Alabama lawmakers wrapped up the 2023 legislative session Tuesday, a three-month period that produced bills that will put some extra money in the pockets of state residents.

The session started on March 7 with Gov. Kay Ivey proposing tax rebates during her State of the State address.

With the state in an extraordinary position this year with surplus dollars for the education and General Fund budgets, lawmakers considered many ideas and reached a consensus on both tax cuts and a rebate.

Reduced sales tax on food

The Legislature passed HB479, a bill to reduce the 4% state sales tax on food to 2% in two phases. The sponsor was Rep. Danny Garrett, R-Trussville, and almost every member of the House and Senate were co-sponsors. The tax will drop to 3% on Sept. 1, 2023. It will drop to 2% on Sept. 1, 2024. The reduction to 2% would be delayed if tax revenues for the education budget are not projected to grow by at least 3.5% over the following year. Education revenues have grown by more than that amount the last few years but that is not always the case, particularly if there is an economic downturn.

The reduced rate will apply to foods that qualify under the Supplemental Nutrition Assistance Plan, formerly known as food stamps, which covers most foods, including fruit and vegetables, meat, poultry and fish, dairy products, breads and cereals, snacks, and non-alcoholic beverages.

The bill does not affect city and county sales taxes on food, except that local governments cannot raise their sales tax on food. The 2% reduction in the state tax is projected to save taxpayers about $300 million a year.

Read more: Can Alabama eliminate its entire grocery tax?

Tax exemption on overtime pay

HB217, by House Minority Leader Anthony Daniels, D-Huntsville, will exempt overtime pay from the state income tax. The exemption applies to pay that full-time hourly workers in the public and private sectors receive for working more than 40 hours in a week. The state income tax carries a 5% rate. So, for example, an employee who makes $20 an hour and works 10 hours overtime during a week, assuming time-and-a-half pay for the overtime, would take home an extra $15 that week because of the exemption.

The exemption takes effect Jan. 1, 2024 and will expire June 30, 2025 unless lawmakers extend it. Employers will be required to report to the state Department of Revenue the amount of overtime they pay and the number of employees who received it. That information will help lawmakers know the impact of the exemption as they consider whether to extend it. One concern is how it will affect the state education budget, because income taxes go to the Education Trust Fund.

HB217 had a cap of $25 million on the total exemptions paid, but Gov. Kay Ivey proposed an executive amendment to remove the cap, and lawmakers concurred with the change. Ivey’s amendment also moved the expiration date up from Jan. 1, 2027, to June 30, 2025. Daniels said he is confident lawmakers will extend the exemption.

Read more: Gov. Kay Ivey amendment removes cap from tax exemption on overtime pay

Tax rebate

After several changes to the proposal, lawmakers approved SB86, by Sen. Arthur Orr, R-Decatur, to provide a one-time tax rebate of $150 to individuals and $300 to couples filing jointly. To be eligible, residents must have filed a state income tax return for the 2021 tax year no later than Oct. 17, 2022. Nonresidents of Alabama are not eligible. Those claimed as dependents on another taxpayer’s return are not eligible.

The Department of Revenue will begin paying the rebates no sooner than Nov. 30, 2023. The rebates will be sent electronically to the bank account the taxpayer listed on their state income tax return. If no account is listed, the DOR will mail a check for the rebate.

Distracted driving

On Tuesday, the last day of the session, the Legislature approved SB301 by Sen. Jabo Waggoner, R-Vestavia Hills, to make it illegal to hold a cellphone while driving under certain circumstances. The bill expands an Alabama law that already made it illegal to text while driving.

The bill says it is a distracted driving violation if a driver crosses in and out of a traffic lane without using a turn signal, swerves, or otherwise operates the vehicle in an impaired manner while:

• Holding a cellphone or another electronic device
• Reading or sending a text message or email
• Watching a video
• Recording or broadcasting a video
• Using more than a single button or swipe of a finger to begin or end a call
• Reach for a cellphone or another electronic device in such a manner that requires the driver to no longer be in a seated driving position properly restrained by a safety belt.

The bill includes exceptions, such as using the cellphone to call emergency services, using a cellphone with an earpiece, headphones, steering wheel controls, or a mount to allow hands-free operation, or using a cellphone while the vehicle is parked on the shoulder of the road.

Supporters of the bill say they expect it to save lives. The House had considered similar bills for years but none had passed until Tuesday.

If Gov. Kay Ivey signs the bill into law, the penalty for a first violation would be $50. Police will not issue tickets, but only warnings, during the first year the law goes into effect.

Smoking in a vehicle

The Legislature passed HB3 by Rep. Rolanda Hollis, D-Birmingham, to prohibit smoking in a vehicle with passengers age 14 or younger. The prohibition applies whether the vehicle is in motion or at rest, and whether the windows are rolled up or down.

A violation is punishable by a fine of no more than $100.

Driver’s license suspensions

Lawmakers passed SB154 by Sen. Will Barfoot, R-Montgomery, to give drivers who have committed traffic violations more flexibility in paying their fines and fees before having their license suspended.

The bill allows people to miss up to three payments on a payment plan for fines and fees before a judge could suspend their license. It would also allow up to one missed court date, outside of an initial date. Gov. Kay Ivey has signed the bill into law.

Supporters of the bill said it was counterproductive in many cases to suspend driver’s licenses and make it difficult for those with traffic violations to get to work, school, and family obligations.

Hospital visitation

The Legislature passed SB113 by Sen. Garlan Gudger, R-Cullman, to allow hospital patients and nursing home and assisted living facility residents to designate an “essential caregiver” who would be assured of being able to visit at least two hours a day in addition to the facilities’ normal visitation hours.

The bill came in response to family separations that occurred during the COVID-19 pandemic. Gudger said it was not meant as a criticism of how hospital staffs managed visitation during the pandemic. Under SB113, the patient can designate different people as essential caregivers on different days. If a patient was unable to make a designation, a family member could do so.

The bill requires hospitals to allow visitation under specific circumstances, including end-of-life situations, patients facing major medical decisions, struggling with the change in environment and lack of in-person family support, patients who who need encouragement to eat and drink, and other circumstances.

Read more: 12 things Alabama changed for schools, teachers, students in 2023 legislative session

Absentee ballot bill, other contentious bills quietly die on last day of legislative session