#1Presentation to the Legislature on Alabama's Financial Condition KIRK FULFORD LEGISLATIVE FISCAL OFFICER LEGISLATIVE SERVICES AGENCY FEBRUARY 6, 2024 www.ww STOP#2Economic Conditions 2#3Labor Market (January 2024): Total nonfarm payroll employment increased by 353,000 • Unemployment Rate unchanged for the third month in a row at 3.7% • Number of unemployed people changed slightly at roughly 6.1 million ⚫ Both figures higher than a year earlier when the jobless rate was 3.5% and the number of unemployed was 5.7 million Labor market participation rate unchanged at 62.5% Employment to Population ratio changed slightly at 60.2% Average hourly earnings for all private nonfarm employees increased by $0.19, or 0.6%, to $34.55 Over the last 12 months, average hourly earnings have increased by 4.5% Real GDP (4th Quarter of 2023): Increased at an annual rate of 3.3%, following an increase of 4.9% annual rate in the third quarter The deceleration compared to 3rd quarter reflects slowdowns in private inventory, investment, federal government spending, residential fixed investment, and consumer spending Real GDP 2023: Increased at an annual rate of 2.5%, compared with an increase of 1.9% in 2022 Primarily reflecting increases in consumer spending, nonresidential fixed investments, state and local spending, exports, and federal government spending. Condition of U.S. Economy Sources: Labor market data is from BLS, GDP data is from BEA 3#4Chart 1. Job openings as a percent of employment for the United States and Alabama, seasonally adjusted - Alabama - United States Number of unemployed persons per job opening, seasonally adjusted Click and drag within the chart to zoom in on time periods 6 8% 5 7% 6% 4 5% 3 4% 3% 2 2% 1% 1 0% Oct 2019 Apr Oct 2020 Apr Oct 2021 Apr Oct 2022 Apr Oct 0 2023 Dec 2019 Dec 2020 Dec 2021 Dec 2022 Source: U.S. Bureau of Labor Statistics. Condition of the U.S. Economy (cont.): Labor Turnover 4 Dec 2023#5Spending % Consumer Spending vs Savings 78.00% 77.00% 76.00% 75.00% 74.00% 73.00% 72.00% 71.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 70.00% 0.00% 2019 2020 2021 2022 Spending as a Percentage of Income Savings Rate Source: BLS & FRED 5 Savings %#68 7 6 5 4 3 2 1 United States Annual Inflation Rates (2013 to 2023) 7 6.5 ........ll 1.5 0.8 0.7 2.1 2.1 1.9 2.3 1.4 3.4 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ■ Annual inflation rate for U.S. was 3.4% for the 12 months ended December 2023 SOURCE: U.S. Inflation Calculator, for the 12 months ending December of each year Condition of U.S. Economy (cont.) 6#710.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Monthly Overall Inflation Trends (year over year comparison) Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Inflation Trends 7#8FOMC Meeting Date July 26, 2023 Rate Change (bps) Federal Funds Rate +25 +25 5.25% to 5.50% 5.00% to 5.25% May 3, 2023 March 22, 2023 +25 4.75% to 5.00% Feb 1, 2023 +25 4.50% to 4.75% Dec 14, 2022 +50 4.25% to 4.50% Nov 2, 2022 +75 3.75% to 4.00% Sept 21, 2022 +75 3.00% to 3.25% July 27, 2022 +75 2.25% to 2.50% June 16, 2022 +75 1.50% to 1.75% May 5, 2022 +50 0.75% to 1.00% March 17, 2022 +25 0.25% to 0.50% Federal Reserve Response to Inflation Fed was holding the federal funds rate at around zero as recently as the first quarter of 2022 - despite 40-year highs in various measures of inflation Typically, the Fed raises rates when the economy starts overheating to much inflation = ☐ Once they began to act, they aggressively increased the federal funds rate Source of chart: Forbes 8#9Federal Reserve Response to Inflation (cont'd) Stated goal of increases: to return inflation rate to 2% over the long run ▪Per Federal Reserve press release (1/31/2024): Job gains have moderated since early last year, but remain strong ■ Inflation has eased over the last year, but still elevated ■ Economic outlook is uncertain, and committee is focused on inflation risks ■Committee decided to maintain target federal funds rate ■ Committee does not expect it would be appropriate to reduce the rate until it has greater confidence that inflation is sustainably moving toward 2% 9#10Labor Market (December 2023): 2.6% seasonally adjusted unemployment rate, up slightly from the November rate of 2.4% о Equal to December 2022 rate of 2.6% Labor force participation rate increased to 57.2% о ⚫ Higher than November rate (57.1%) and December 2022 (56.7%) Number of those counted as employed rose to a new record high 2,264,098 о Yearly increase of 40,194 Alabama Economy Unemployment rate represents 59,454 unemployed persons, compared to 55,462 in November 59,986 unemployed persons in December 2022 Ratio of unemployed persons per job opening was 0.4 (October 2023) о Ratio has been less than 0.5 since October 2021 Wage and salary employment increased by 300 о Gains were seen in the trade, transportation, and utilities sector (+3,600), the manufacturing sector (+2,800), and the financial activities sector (+1,300), among others. GDP (3rd Quarter): Increased by 4.1% at an annual rate Personal Income (3rd Quarter): Increased by 3.0% at an annual rate 10#11Unemployment and Workforce Participation (as of December 2023) UNEMPLOYMENT RATE WORKFORCE PARTICIPATION Pre Pandemic Post Pandemic Pre Pandemic Post Pandemic United States Alabama (2019) 3.5% 3.1% (2023) 3.7% United States 2.6% Alabama (2019) (2023) 63.2% 58.6% 62.5% 57.2% Source: BLS and AL Department of Labor 11#12FY 2023 Review 12#13Revenue Source FY 21 FY 22 FY 23 ABC Board $156,732,629 $170,158,895 $173,591,676 Difference $3,432,781 Percent 2.02% Ad Valorem Taxes $182,200,778 $192,180,118 $214,269,126 $22,089,008 Alabama Trust Fund $123,577,185 $122,499,814 $118,659,764 -$3,840,051 11.49% -3.13% Cigarette Tax $143,374,979 $132,170,597 $121,179,471 -$10,991,126 -8.32% Corporation Tax Court Costs $98,708,994 $98,997,911 $103,450,258 $4,452,347 4.50% $59,644,764 $60,190,411 $64,233,346 $4,042,935 6.72% Financial Institutions Excise Tax $90,417,436 $73,617,451 $78,540,392 $4,922,941 6.69% General Fund Revenue Summary Interest on State Deposits Leasing and Rental Tax Lodgings Tax Insurance Company Taxes $489,046,539 $553,986,900 $584,440,292 $30,453,392 5.50% $19,643,087 $40,373,733 $404,602,014 $91,707,455 $98,834,020 $101,923,183 $63,099,773 $77,371,409 $82,430,243 Mortgage Tax $58,472,446 $56,741,223 $35,639,392 Oil and Gas Taxes $21,846,688 $39,266,075 $33,066,619 Sales Tax $143,006,190 $145,511,169 $152,038,233 $364,228,282 $3,089,164 $5,058,835 -$21,101,831 -$6,199,456 $6,527,063 902.14% 3.13% 6.54% -37.19% -15.79% 4.49% Simplified Sellers Use Tax $192,743,077 $232,876,678 $276,697,316 $43,820,638 18.82% Use Taxes $282,397,962 $326,465,614 Other $293,965,640 Subtotal $2,510,585,621 $295,396,855 $2,716,638,873 $350,362,459 $297,548,458 $3,192,672,232 $23,896,845 7.32% $2,151,600 $476,033,358 0.73% 17.53% Transfers and Reversions $50,947,048 $61,113,747 $46,917,411 -$14,196,336 -23.23% TOTAL $2,561,532,668 $2,777,752,621 $3,239,589,643 $461,837,022 16.63% 13#14EOY Condition of the SGF Fiscal Year 2023 Beginning Balance Revenues Total Available Funds LESS APPROPRIATIONS AND OBLIGATIONS: Enacted Appropriations Ending Balance Conditional Appropriations (Act 2022-270) Correctional Capital Improvement Fund Conditional (Act 2023-381) Senior Services Conditional Supplemental Appropriations (Act 2023-2) Additional Supplemental Appropriations (Act 2023-381) Reversions Reappropriated Total Appropriations and Obligations FY 2023 $515,845,225 $3,239,589,643 $3,755,434,868 $2,749,596,233 $56,500,000 $40,000,000 $379,704 $59,997,772 $207,623,865 $147,398,955 $3,261,496,529 Ending Balance (before reversions and adjustments) Reversions and Adjustments Ending Balance (after reversions and adjustments) $493,938,339 -$223,517,849 $717,456,188 14#15FY 2024 ALLOCATIONS OF TOTAL FY 2023 SGF ENDING BALANCE Reversions Reappropriated Agency/Fund Corrections - Correctional Capital Improvement Fund (conditional released) Corrections - Correctional Officers/Correctional Capital Improvement Fund (conditional released) Other conditionals released TOTAL Amount 215,268,008 100,000,000 40,000,000 6,000,000 361,268,008 As of January 31, 2024. 15#16Education Trust Fund Revenue Summary FY 2021 FY 2022 FY 2023 $22,597,381 Difference FY 23 vs. FY 22 % Difference Beer Tax Income Tax $23,444,102 $22,347,818 $249,563 1.12% $5,643,876,383 $7,182,568,354 $7,032,093,931 -$150,474,423 -2.09% Mobile Telecommunications Tax $7,854,607 $7,876,760 $8,089,746 $212,985 2.70% Sales Tax Use Taxes Utility Tax All Other Grand Total $2,320,781,188 $266,445,693 $379,592,951 $2,479,655,623 $2,592,614,517 $112,958,894 4.56% $318,025,204 $350,994,365 $32,969,161 10.37% $406,487,071 $421,950,643 $15,463,572 3.80% $1,818,139 $2,570,768 $2,619,603 $48,835 1.90% $8,643,813,063 $10,419,531,598 $10,430,960,185 $11,428,587 0.11% 16#1735.00% Average Growth: 4.69% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00% FY 2009, -11.81% FY 2021, 7.81% FY 2022, 30.17% FY 2023, 0.11% -15.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 % Growth in ETF Recurring Revenues Since FY 2002 17#18Gross Sales Tax 20.00% Average Growth: 3.63% FY2021, 14.91% 15.00% 10.00% 5.00% 0.00% -5.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Percentage Growth of Sales Tax, Income Tax, and Withholding Payments -10.00% -15.00% -5.00% -10.00% Individual Income Tax 25.00% Average Growth: 4.93% 20.00% 15.00% 10.00% 5.00% 0.00% FY2022, 22.02% A 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 15.00% Average Growth: 4.31% 10.00% 5.00% 0.00% -5.00% Withholding Payments FY2022, 10.47% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 18#19Beginning Balance ETF Revenues FY 2023 $2,907,418,790 $10,430,960,185 TOTAL AVAILABLE (beginning balance, plus receipts) $13,338,378,975 EOY Condition of the ETF Fiscal Year 2023 Enacted ETF Appropriations ETF Reversions Reappropriated ETF Supplemental Appropriations $8,261,590,649 $120,551,481 $2,787,667,309 TOTAL ETF APPROPRIATIONS AND OBLIGATIONS $11,169,809,439 ENDING BALANCE BEFORE REVERSIONS AND ADJUSTMENTS $2,168,569,536, Reversions and Adjustments TOTAL ENDING BALANCE -$350,427,926 $2,518,997,462 19#20FY 2024 ALLOCATIONS OF FY 2023 ETF ENDING BALANCE Agency/Fund Reversions Available for Reappropriation ETF Budget Stabilization Fund* Amount 343,295,735 111,698,094 ETF Educational Opportunities Reserve Fund* ETF Advancement and Technology Fund* TOTAL Maximum amount available for ETF Supplemental Appropriations* *Pursuant to the revisions to the ETF Rolling Reserve Act in Act 2023-390. 412,800,727 1,000,000,000 1,867,794,556 651,202,906 As of January 31, 2024. 20 20#21Appropriation of State Funds for FY 2024 21#22Appropriation of all State Funds FY 2024 (As Enacted) General Education Other State Total State Fund Trust Fund Funds Funds $3.01 $8.80 $4.28 $16.09 Billion Billion Billion Billion 22#23FY 2024 SGF APPROPRIATIONS AS ENACTED (Act 2023-382) $900,000,000 $800,000,000 $700,000,000 $600,000,000 21.96% 28.64% 18.14% 3.75% 4.04% 3.80% 1.69% 7.02% ALEA Human Resources Public Health Corrections Debt Service Judicial Branch Legislative Branch $500,000,000 $400,000,000 SGF Appropriations by Agency Total SGF appropriations from the General Fund are broken down by $300,000,000 6.52% $200,000,000 agencies for a closer look into where $100,000,000 the money was allocated. 1.53% $0 2.91% Medicaid Other Pardons and Paroles Mental Health 23#24Education Trust Fund Total: $8,798,594,041 Higher Education $2.2B 25.65% The Split: K-12 72.63% Higher Ed 27.37% K-12 $5.9B 68.07% ETF APPROPRIATION FY 2024 AS ENACTED (ACT 2023-379) All Other $0.5B 6.28% 24#25General Fund FY 2024 and FY 2025 Budget Outlook 25 45#26Condition of the SGF FY 2024 and FY 2025 Estimated Estimated BEGINNING BALANCE TOTAL RECEIPTS (Fiscal Division estimates) FY 2024 FY 2025 717,456,188 396,696,221 Difference (320,759,967) 3,255,037,787 3,213,815,632 (41,222,155) 3,972,493,975 3,610,511,853 (361,982,122) TOTAL AVAILABLE (beginning balance plus total receipts) Less: Regular Appropriations (FY 2024 as enacted, FY 2025 Estimated) Reversions Reappropriated (as of 12/31/2023) 3,014,529,746 3,360,529,746 346,000,000 215,268,008 (215,268,008) Corrections - Correctional Capital Improvement Fund (Act 2023-382) 100,000,000 (100,000,000) Corrections - Correctional Officers/Correctional Capital Improvement Fund (Act 2023- 382) 40,000,000 (40,000,000) Other Conditional Appropriations (Act 2023-382) 6,000,000 (6,000,000) Supplemental Appropriations, estimated TOTAL APPROPRIATIONS AND OBLIGATIONS ESTIMATED ENDING BALANCE 200,000,000 (200,000,000) 3,575,797,754 3,360,529,746 (215,268,008) 396,696,221 249,982,107 (146,714,114) 26#27State General Fund Total Revenue Growth = $81.4M Decreasing Revenue Sources Financial Institutions Excise Tax -$7,968,929 -27.93% 7.50% Increase in FY 2024 over FY 2023 Oil and Gas Taxes -$4,518,588 -29.24% Cigarette Tax -$1,871,345 -4.89% Total Net Receipts $1,500,000,000 State General $1,166,448,608 Increasing Revenue Sources $1,085,022,810 $1,000,000,000- Interest on State Deposits $84,195,680 90.90% $500,000,000- Simplified Sellers Use Tax $14,010,086 15.77% $0 2023 2024 Ad Valorem Taxes $12,886,445 8.24% Fund Budget Conditions FY2024 Year to Date FY 2024 SGF Budget Condition (as of 2/1/24) SGF $717,456,188 $1,166,448,608 Beginning Balance YTD Receipts Total Available Funds $1,883,904,796 Total Obligations $3,375,797,754 Revenue Needed in Feb. - Sept. of FY24 $1,491,892,958 Revenue Received in Feb. Sept. of FY23 $2,153,566,833 27#28Education Trust Fund FY 2024 and FY 2025 Budget Outlook 28#29Education Trust Fund Total Revenue Growth = -$21.5M -0.69% Decrease in FY 2024 over FY 2023 Decreasing Revenue Sources Sales Tax -$33,109,528 Use Taxes -$1,878,600 Beer Tax -$1,361,128 -4.06% -2.12% -16.46% $4,000,000,000 Total Net Receipts $3,124,745,866 $3,000,000,000 $2,000,000,000 $1,000,000,000 Increasing Revenue Sources $3,103,276,981 Income Tax $5,233,378 0.26% Utility Tax $5,010,492 3.67% Simplified Sellers Use Tax $4,670,029 15.77% $0 2023 2024 FY 2024 ETF Budget Condition (as of 2/1/24) ETF $2,518,997,462 $3,103,276,981 Beginning Balance YTD Receipts Total Available Funds $5,622,274,443 Total Obligations $10,666,388,597 Revenue Needed in Feb. Sept. of FY24 $5,044,114,154 Revenue Received in Feb. - Sept. of FY23 $7,306,214,319 Education Trust Fund Budget Conditions FY2024 Year to Date 29#30ETF Rolling Reserve Act Through FY2023 Effective beginning FY 2013. Capped the annual appropriations from the ETF о • Tied to the percentage growth in recurring revenues to the ETF over the last 15 years, dropping the lowest year Limited ETF expenditures to the average of the estimated available revenues when such estimates are less than the ETF appropriations cap Prescribed how excess funds are distributed in fiscal years when appropriations equal the cap and actual ETF receipts exceed the cap, including: о ⚫ The Budget Stabilization Fund: an additional reserve fund accessible only in the event of proration or for temporary transfers to public schools/higher education due to natural disasters о • The Advancement and Technology Fund: funding available for supplemental appropriation to K-12 and higher education for certain allowable expenses No ETF proration since the ETF Rolling Reserve Act became effective 30#31•Effective beginning in FY 2024 Establishes a secondary spending limit for annual appropriations from the ETF equal to 106.5% of prior year appropriations in FY 2024, reduced by .25% annually to 105.75% in FY 2027 and thereafter •Caps annual appropriations from the ETF to the appropriation cap, or secondary spending limit whichever is less • Drops the high and low growth years from the calculation of the appropriation cap • Creates the Educational Opportunities Reserve Fund and provides for the use of funds •Prescribes a new allocation of annual ETF receipts in excess of expenditures, including: Budget Stabilization Fund - an amount equal to 1% of prior year ETF expenditures • Advancement and Technology Fund - 50% of the remaining balance, not to exceed $1 billion annually • Educational Opportunities Reserve Fund - 20% of the remaining balance ETF Rolling Reserve Act: Act 2023-390 Changes 31#32Advancement and Technology Fund Current Balance: $1.75 billion Any amount of the available balance may be appropriated through a supplemental appropriation bill and divided between K-12 public schools and institutions of higher education in accordance with the percentage split between the two sectors Allowable one-time expenses: • Repairs/deferred maintenance of facilities Capital outlay • Classroom instructional support . Insuring facilities • Transportation • School security measures • Educational technology and equipment 32#33Educational Opportunities Reserve Fund ▪May be withdrawn through a supplemental appropriation bill ■ Allowable one-time uses: ■ To offset a reduction in revenues to the ETF that could negatively impact funding for budgeted obligations from the ETF for the current fiscal year ■ To provide funding for unanticipated obligations ■ To sustain required programmatic increases for existing ETF obligations in the event of a change in economic conditions To maintain prior year appropriation levels, if the computation of the fiscal year appropriation cap or secondary spending limit is less than prior year base ETF appropriations ■ For start-up or transitional support for initiatives that provide access to enhanced educational opportunities to all public K-12 or higher education students in the state, or both ■Initial balance of $353,975,000 (from Act 2023-378) 33#34FY 2025 Allowable ETF Appropriations Under Act 2023-390 (formula) The lesser of the two: Fiscal Year Appropriation Cap Secondary or Spending Limit Max Total ETF Base Appropriation 34#35FY 2025 Allowable ETF Appropriations Under Act 2023-390 The lesser of the two: Estimated FY 25 Appropriation Cap: $10,707,440,447 or Estimated FY 25 Secondary Spending Limit: $9,348,506,169 Max Total ETF Base Appropriation: $9,348,506,169 Allowable Increase in ETF Appropriations: $549,912,128 35 55#36Condition of the ETF FY 2024 and FY 2025 Estimated FY 2024 Estimated FY 2025 1,704,417,345 Difference BEGINNING BALANCE 2,518,997,462 (814,580,177) TOTAL RECEIPTS (Fiscal Division estimates) 10,503,001,386 10,698,891,440 195,880,054 TOTAL AVAILABLE (beginning balance plus total receipts) 13,022,008,848 12,403,308,784 (618,700,063) Regular Appropriations (FY 2024 as enacted, FY 2025 Equals Secondary Spending Limit) Reversions Reappropriated (as of 12/31/2023) 8,798,594,041 343,295,735 9,348,506,169 549,912,128 (343,295,735) Assumed supplemental appropriations (maximum available)* 651,202,906 477,372,429 Transfer to Educational Opportunities Reserve Fund* 412,800,727 318,248,286 (173,830,477) (94,552,441) Transfer to Budget Stabilization Fund* 111,698,094 113,175,915 1,477,821 Transfer to Advancement and Technology Fund* 1,000,000,000 795,620,715 (204,379,285) TOTAL APPROPRIATIONS AND OBLIGATIONS ESTIMATED ENDING BALANCE 11,317,591,503 11,052,923,513 (264,667,990) 1,704,417,345 1,350,385,271 (354,032,073) *Equals estimated allocations pursuant to the updated Rolling Reserve Act (Act 2023-390) 36#37Sales Tax on Food Before Act 2023-554 "No definition of food in the state sales and use tax statutes "No separate state tax rate for food ▪Food was subject to the general 4% state sales and use tax rate for "all other" tangible personal property "Local sales and use tax base required to be the same as state base per Local Tax Simplification Act, so food subject to local general rate as well ▪Local governments did not have the authority to define food or exempt it from their sales and use tax, or to lower the sales and use tax rate on food 37#38Sales Tax on Food After Act 2023-554 "Food defined in the state sales and use tax statutes as it is defined for Supplemental Nutrition Assistance Program (SNAP) ■Separate state tax rate for food established at 4%, reduced to 3% on September 1, 2023 ■Tax rate could be further reduced to 2% on September 1, 2024, if average estimated growth in total net receipts to the Education Trust Fund for fiscal year 2025 certified by Director of Finance and Legislative Fiscal Officer is at least 3.5% higher than previous year "If growth requirement is not satisfied for fiscal year 2025, the rate will be reduced in a subsequent fiscal year when growth requirement is satisfied 38#39Funding Issues to Consider Managing Expectations ■ Agency Funding Request Exceeding Available Revenues $1.24 billion in requested increases from ETF, but only $550 million of new capacity ■ Credits, deductions, exemptions vs appropriations Advancement and Technology Fund ■Expiring federal funds for some programs ■Benefit Increases ■ SEIB rate/employee - $1,026/month vs. $977/ month in FY2024 COLAS for state employees and teachers? ■Prison and other construction costs "Major Funding Requests from General Fund: ■ Medicaid - $92.1 million Public Health (CHIP) - $3.2 million ■ Corrections - inmate healthcare -$25 million ■ Mental Health - $36.8 million ■ Human Resources $58.6 million ■ ALEA - $48.9 million ■Other Issues: Opioid Settlement Funds ■ ARPA SFRF ■ Slowing Revenue Projections 39#40OF ALABAMA STATE OF KLAARA STATE HORSE SERVICES AGEN AGENCY LEGISLATIVE Thank You KIRK FULFORD LEGISLATIVE FISCAL OFFICER (334) 261-0650 KFULFORD @LSA.STATE.AL.US HTTPS://ALISON. LEGISLATURE.STAT E.AL.US/LSA 10 40