An Alabama House committee agreed almost unanimously today on a bill to allocate $1.06 billion in federal funds, but that was only the first step in approving the plan for how the state will use its final portion of pandemic recovery money from the American Rescue Plan Act.

Water and sewer projects, reimbursements for hospitals and nursing homes, public employee insurance programs, and expansion of broadband internet access would be among the recipients of the biggest portions of funds.

The bill sponsor, Rep. Rex Reynolds, R-Huntsville, said there have been eight meetings with lawmakers to discuss the plan, answer questions, and propose changes. Today’s approval by the House Ways and Means General Fund Committee sets the bill up for a vote on Tuesday by the full House of Representatives. The Legislature is meeting in a special session called by Gov. Kay Ivey.

“We need to get this done,” said Reynolds, a former police chief in Huntsville who is the chair of the General Fund committee for the first time this year. “It’s a special session and it’s very specific. We need to get this passed and then we’ll get it up to the Senate and we’ll address any amendments that come up there.”

The money is the second half of Alabama’s money from ARPA. Lawmakers allocated the first $1 billion in 2021 and 2022.

Reynolds said one of the results of the multiple talks with lawmakers is an allocation in the bill of $55 million that would be distributed through grants for programs in individual communities, including food banks, child welfare services, assistance for domestic violence victims, senior citizens services, services for mental health disorders and behavioral analysis, long-term housing, and summer learning and sports programs for children.

Reynolds said in most cases, organizations would apply for those funds through a grant from the Alabama Department of Economic and Community Affairs. He said there was a lot of discussion about that category of the bill. “We didn’t want to exclude anybody. So, we had to make that language very broad so we could be inclusive of all of those type of services,” Reynolds said.

Asked if the money would be spread too thin with so many types of demands, Reynolds said volunteer fire departments and drug treatment programs were removed from the list to make the money go further. Reynolds said he hopes lawmakers can find supplemental funds for those programs from other sources. Volunteer fire departments received money in last year’s round of ARPA funds.

In broad categories, the bill would apply $400 million to water and sewer projects, $339 million to healthcare costs such as reimbursements to hospitals and nursing homes, $260 million for expansion of broadband internet access, and the $55 million for the community programs.

Out of the $339 million category for healthcare costs, $100 million would go to reimburse hospitals for pandemic-related costs and $100 million would go to reimburse nursing homes. Reynolds was asked several questions about whether that would be adequate for hospitals, especially rural hospitals that are struggling financially.

“I certainly hope so,” Reynolds said. “Our hospitals do great work. I’m so proud that we can give them $100 million. I certainly look forward to having that discussion and getting my colleagues to support it. It concerns me. We are all concerned about our hospitals.”

The $400 million for water and sewer projects would be administered through the Alabama Department of Environmental Management. The bill sets aside another $5 million for septic systems that can be used in the state’s Black Belt, where some communities lack sanitary sewage systems. Asked if the $5 million would be adequate to fill the need, Reynolds said the amount was based on a recommendation from ADEM about how many projects could be finished before the end of 2026, which is the deadline for spending the ARPA funds. Reynolds said the septic systems will typically serve a single neighborhood or a limited number of residences.

The Ways and Means Committee includes 11 Republicans and four Democrats, the approximate ratio of the membership in the full House, which has 77 Republicans and 28 Democrats. The only no vote today came from Rep. Arnold Mooney, a Republican from Shelby County.

Mooney raised several concerns about the plan. He said he had gotten conflicting information on how the broadband money will be used. He questioned why funds could go to victims of domestic violence and not victims of all violent crime. And he expressed concerns that the bill authorizes spending through 2026, questioning whether the Legislature was maintaining adequate control as the branch of government responsible for the public purse. “It is the individual and corporate responsibility of our body to make these decisions,” Mooney said.

Reynolds said he believed lawmakers will maintain adequate controls through an oversight committee. Speaking to reporters after the meeting, Reynolds said he appreciated the concerns from Mooney. “We’re supposed to be a deliberative body. And he’s exercising those rights,’ Reynolds said.

Under the new plan, most of the $339 million in the healthcare category would be used for reimbursement for eligible expenses. That would include:

• $100 million to hospitals
• $100 million to nursing homes
• $5 million to state veterans homes
• $40 million to the health insurance program for state employees
• $40 million to the health insurance program for public education employees

Other funds in the healthcare category include $25 million for mental health services, $9 million to expand the use of telemedicine, and $20 million for “a voluntary clinical trial and health care research program to enable greater access to personalized medicine for citizens of Alabama.”

The $400 million for water and sewer projects would include $195 million for projects identified as high-need and eligible for the EPA’s clean water and drinking water revolving funds. Projects that were not funded last year would be priorities, and the Alabama Department of Environmental Management would rank the projects. Another $200 million would be used as matching grants for water and sewer projects.

With Alabama’s first $1 billion of ARPA funds, the largest shares were allocated to construction of new prisons, expanding broadband access, water and sewer projects, and hospitals, nursing homes, and other healthcare facilities. The $400 million allocated to prison construction last year was from a category to replace tax revenue lost because of the pandemic. States have more flexibility in how to use those revenue replacement dollars. But the revenue replacement category is not part of the allowed spending with this year’s round of ARPA funds.