The House approved two bills that the Business Council of Alabama is supporting in the 2016 regular legislative session that has concluded its second week.
The House on Tuesday passed HB 36, the Small Business Act sponsored by Rep. Kyle South, R-Fayette, and HB 38, the Taxpayer Advocate bill sponsored by Rep. Mark Tuggle, R-Alexander City.
This week’s Tuesday Briefing that was sponsored by AT&T Alabama featured Senate President Pro Tem Del Marsh, R-Anniston. Marsh said business and education are collaborating in order to improve education and ensure that students are ready for the workplace or their continued education.
Marsh described his yet-to-be-introduced “Rewarding Advancement in Instruction and Student Excellence Act” (RAISE Act) that will reward teachers and create a fair evaluation system for schools based partly on student performance.
SB 60 sponsored by Sen. Rusty Glover, R-Semmes, this year’s attempt to eliminate the Alabama College and Career Ready Standards, was brought up but not voted on in the Senate Education and Youth Affairs Committee’s Tuesday meeting. The BCA opposes this legislation.
The Senate confirmed two BCA board-of-directors’ members to the boards of trustees of the University of North Alabama and Jacksonville State University. The Senate reconfirmed BCA Immediate Past Chairman Marty Abroms of Florence to the UNA board of trustees and confirmed Greg D. Brown to the JSU board.
Abroms is president and managing shareholder of Abroms & Associates P.C. and Brown is president of B.R. Williams Trucking Inc. of Oxford.
The BCA in the 2016 Legislative Session
The BCA has a very active 2016 State Legislative Agenda that includes important legal reform initiatives, improving our education system, and responsibly investing in Alabama’s transportation infrastructure.
On Thursday, the BCA hosted a news conference to reveal the results of a national study that said that Alabama’s deteriorating roads and bridges need improvement in order to sustain current business opportunities and gain new ones.
Good news was announced this week regarding Medicaid as the Centers for Medicaid and Medicare granted Alabama a long-awaited waiver to implement Alabama’s Medicaid reform plan that will deliver Medicaid via Regional Care Organizations (RCOs) and focus on patient outcomes.
The state could receive up to $748 million from the federal government over the next five years to implement the program. At least $328 million will go to set up the RCOs over three years. The money can only be used to create the RCOs and not to fund existing health services.
Legislators have introduced 455 bills as of Thursday. The BCA’s Advocacy Team will be on duty 24/7 to ensure that the interest and concerns of Alabama’s business community are represented in Montgomery. Never hesitate to contact us about an issue that is important to your business.
The House and Senate are to return in session on Tuesday for the fifth legislative day.
Senate Committee Postpones Vote to Repeal Education Standards
A bill that would repeal Alabama’s College and Career Ready Standards was amended in the Senate Education and Youth Affairs Committee to make repealing the standards optional by local school systems. But the committee didn’t vote on SB 60 because the sponsor, Sen. Rusty Glover, R-Semmes, was absent.
Senate President Pro Tem Del Marsh, R-Anniston, offered the amendment making the repeal optional, but said he won’t vote in favor of the bill to get it out of committee. “(The amendment) doesn’t force anyone out of the standards that many have claimed have been very positive for their systems,” Marsh said.
Nullifying the proven ACCRS would be another arbitrary government overreach and do away with proven College and Career Ready Standards that were adopted by the Alabama State Board of Education in 2010.
SB 60 would force Alabama to revert to math and English language arts standards adopted in 1999 and 2003 and begin the process of adopting new standards to be in place for the 2017-2018 school year.
The BCA opposes any efforts to remove the responsibility and exclusive jurisdiction of setting academic standards from the Alabama State Board of Education. The BCA has long been a supporter of the Alabama standards that are benchmarks of proficiency in math and English language arts that will better prepare Alabama students for college or a career after high school graduation.
Important Education Bills Considered
HB 41 by Rep. Donnie Chesteen, R-Geneva, would amend the Alabama Ahead Act and lift a requirement that schools invest in pen-enabled mobile devices and provide that funds used in the 2016-2017 fiscal year ensure that a high-quality Wi-Fi system is available in school classrooms and lunchrooms, with remaining funds obligated to buy mobile digital devices. The bill also would set up the Alabama Ahead Oversight Committee. The House Ways and Means Education Committee favorably reported the bill and was placed on the House Calendar on Thursday. BCA supports this bill.
HB 125 by Terri Collins, R -Decatur, would authorize the collection of student data from early education through entry into the workforce by a newly created Alabama Longitudinal Data System. It is expected to be considered in the House Education Policy committee next week.
The Alabama Longitudinal Data System would be developed by a new Alabama Office of Education and Workforce Statistics within the Alabama Department of Labor in order to have access to more federal workforce grants. The system would access student performance data from various agencies to include grade-point averages, state and national assessment results, and demographic information.
It would not collect health and medical records or any court or juvenile criminal and delinquency information or any personal identifiable information. The bill states that if any aggregate information is specific enough to allow an individual’s identification, that data would not be used.
Collins said that data would be “a thread that will follow groups of students throughout their educational careers and give the state important information back. For example, will students who this year attend voluntary pre-kindergarten programs perform better academically against their peers in high school?”
Public schools, including two- and four-year colleges, would share data. This information will allow the K-12 system to know if children enrolled in dual enrollment actually filled jobs in those fields of study. Each year, an advisory board would summarize the results and data usage in a report to the governor and Legislature.
HB 125 also would require, by the end of 2016, the state’s K-12, community college, and four-year university systems to define remediation and a process to utilize remediation. Currently, high school graduates can enroll in one school and qualify for remediation but at a different school they can qualify for college-level courses.
As a recommendation of the Alabama Workforce Council, BCA fully supports the passage of this legislation. A public hearing was held this week in the House Education Policy Committee which Rep. Collins is Chair. It is scheduled to receive committee action in the next week.
Feds Grant Alabama Important Medicaid Waiver
The Montgomery Advertiser reported that the state had received an 1115 waiver from the CMS, which administers the Medicaid program. The waiver will allow the state to create 11 regional care organizations (RCOs), which will enroll Medicaid patients with the goal of encouraging preventive care and cutting costs.
Alabama could receive up to $748 million in federal Medicaid payments over the next five years to implement the program. At least $328 million will go to set up the RCOs over three years.
Danne Howard, executive vice president and chief policy officer for the Alabama Hospital Association, said the biggest patient pool into the RCOs would be children, the blind, and the disabled.
“For some of it it’s not advantageous for us,” she said. “If you have less patients coming to the hospital, our revenues will likely go down. But then our resources are better used elsewhere.”
JUDICIAL AND LEGAL REFORM
Consumer Lawsuit Lending Reform Supported by BCA is Debated
Consumer lawsuit lending is the unregulated practice of loaning money at exorbitant interest rates to plaintiffs who could potentially receive large settlements or judgments. The plaintiff must repay the lender if any settlement or judgment is received at an interest rate that often exceeds 100 percent. This practice targets a vulnerable population, introduces a third-party’s interests into the attorney-client relationship, and slows down and increases the cost of litigation for both plaintiffs and defendants.
SB 67, introduced by Senator Cam Ward, R-Alabaster, will subject consumer lawsuit lenders to licensure requirements, existing fair-lending laws, and oversight by the State Banking Department.
SB 67 was the subject of a public hearing on Wednesday in the Senate Judiciary Committee.
The BCA’s Canary testified: “A diverse national coalition of business and consumer groups have voiced support for lawsuit lending reforms including the U.S. Chamber of Commerce, National Black Caucus of State Legislators, and the national Hispanic Caucus of State Legislators.”
Members from the lawsuit lending industry also testified at the hearing claiming that they do not loan money but are “purchasing an asset” in the form of an expected settlement or judgment.
Sen. Phil Williams, R-Rainbow City, challenged this assertion by noting that in no other case does someone who sells an asset pay interest on something they sold to the buyer.
“This is a loan and if you don’t get paid back, well then it was a bad loan,” said Sen. Larry Stutts, R-Tuscumbia.
SB 67 is scheduled for a Tuesday committee vote.
In the 2015 regular legislative session, a BCA-supported lawsuit lending bill passed the House on a bipartisan 98-1 vote. After the Senate Banking and Insurance Committee favorably reported the bill, it remained stuck at the “call of the chair” in the Senate unable to receive a vote despite broad support from both sides of the political aisle.
LABOR AND EMPLOYMENT
Minimum Wage and Right-To-Work Bill Gets Committee Approval
The House State Government Committee voting favorably 10-3 moved HB 174 by Rep. David Faulkner, R-Birmingham, to the full House for consideration. HB 174, the Alabama Uniform Minimum Wage and Right-to-Work Act, further specifies Alabama’s status as a right-to-work state and would prohibit local governments from requiring minimum wage, leave, or other benefits to employees.
The BCA’s Canary testified at the public hearing in support of Faulkner’s bill, “Instead of raising small businesses labor costs and creating more barriers to entry-level employment, government should focus on policies that actually help create jobs. Alabama businesses are already subject to and are complying with numerous government regulations at the federal, state and local level. This bill will prevent even more onerous regulations from being imposed on Alabama businesses.”
HB 174 also would authorize the Legislature to establish uniform employment policies and regulations of collective bargaining under federal labor laws. The bill has 53 sponsors. The BCA supports this legislation.
House Considers Right-to-Work Constitutional Amendment
The House voted 60-24 to approve HB 37 sponsored by Rep. Arnold Mooney, R-Birmingham, but the chamber voted 60 to 24 for the measure. The constitutional amendment needed 63 affirmative votes to pass.
A number of Republicans were absent Thursday, and Democrats used a procedural motion requiring members to vote their own machines – and not those of others – to defeat the measure.
House Speaker Mike Hubbard, R-Auburn, said Republicans would bring the amendment back up on Tuesday.
“We simply didn’t have enough people in the chamber at the time,” he told the Montgomery Advertiser.
Since 1953, Alabama has had a law guaranteeing a right to work but a constitutional amendment would set that right in the state Constitution. The BCA supports a right-to-work constitutional amendment as necessary to continue marketing Alabama as a good state to conduct business.
“The right to join or not join a union and be free of coercive attempts to force unionization is often cited as a hallmark of Alabama’s attraction to every segment of our economy, especially manufacturers and suppliers,” the BCA’s Canary said.
“Heavy unionization does not attract new manufacturers, expand existing business, or lead to prosperity, and the constitutional amendment sends a message that the right to work is a fundamental right and has constitutional protections in Alabama.”
House Sends Small Business Tax Credit Bill to Senate
The House voted 88-12 on Tuesday to send the Small Business Tax Credit bill to the Senate for consideration.
HB 36 by Rep. Kyle South, R-Jasper, would provide tax credits to small businesses under certain conditions. The bill would provide a $1,500 income tax credit for every new, qualified employee hired by a small business in the previous tax year. This bill also would authorize an additional $1,000 tax credit for hiring a recently deployed and unemployed veteran of the U.S. Armed Services.
A new employee must be employed full time, be an Alabama resident, be paid at least $40,000 annually, and may not have been employed by that company full time during any time 12 months prior to the start of the qualifying hire.
HB 36 would require the Department of Revenue to actively promote the tax credits allowed under the Small Business Jobs Act along with other tax credits available for small businesses, such as the Full Employment Act of 2011 and the Heroes for Hire Tax Credit Act.
Once the Small Business Tax Credit bill becomes law, the BCA and entire business community will need to help spread the word to Alabama small businesses so that they will be able to take advantage of this tax credit.
The bill was assigned to the Senate Fiscal Responsibility and Economic Development Committee.
Health Savings Account Deduction Legislation Passes Out of Committee
The Senate and House versions of legislation that would allow for a tax deduction for contributions made to a health savings account received favorable committee reports on Wednesday.
SB 131 sponsored by Sen. Paul Sanford, R-Huntsville, received a favorable report by the Senate Finance and Taxation Education Committee. The House Ways and Means Education Committee favorably reported HB 109 sponsored by Rep. Becky Nordgren, R-Gadsden.
Both bills would grant a deduction on the Alabama Individual Income Tax return for contributions made to a health savings account beginning Jan. 1, 2018. The maximum deduction allowed under this bill will coincide with the annual amount allowed by federal law. Employer contributions are not includable in an employee’s income and wouldn’t be deductible.
TAX AND FISCAL POLICY
House Passes Independent Taxpayer Advocate Bill
The House voting 70-33 on Tuesday passed HB 38 sponsored by Rep. Mark Tuggle, R-Alexander City, sending it to the Senate.
HB 38 would shift the power to appoint the Department of Revenue taxpayer advocate from the Revenue Commissioner to the Governor. The bill would require the advocate to compile a report on potential ambiguities in the state’s tax laws and to maintain a website providing information to taxpayers.
“Currently the advocate is not fully on the side of the taxpayer,” Tuggle said. “(The advocate) would go to bat for taxpayers having difficulty with the department. My legislation ensures that the taxpayer advocate will be independent, autonomous, and a true champion for taxpayers when disputes arise.”
The advocate would be selected from a pool of between two and five persons recommended to the Governor by a committee of legislators, government officials, and business professionals, including the Business Associations’ Tax Coalition (BATC) of which the BCA is a member.
HB 38 was assigned to the Senate Finance and Taxation Education Committee.
Committee Favorably Approves Apprenticeship Tax Credit Bill
The Senate Finance and Taxation Education Committee with no dissent on Wednesday favorably approved SB 90, the Apprenticeship Tax Credit Act sponsored by Sen. Arthur Orr, R-Decatur. SB 90 would provide an income tax credit of $1,000 to an employer for each qualified apprentice hired by that employer. An apprentice is defined under the bill as a worker of lawful working age that is compensated by a third party but whose work occurs under the supervision of an eligible employer.
TRIP: Transportation Improvements Will Benefit Alabama’s Economic Growth
A national transportation research organization reported Thursday that Alabama’s deteriorating roads and bridges threaten to stifle economic growth and development. At news conferences in Birmingham and at the Business Council of Alabama in Montgomery, the Washington, D.C.-based research organization TRIP identified 20 transportation improvements that are needed to support economic growth and quality of life.
Another 30 needed transportation improvements are detailed in the TRIP report, “The Top 50 Highway Projects to Support Economic Development and Quality of Life in Alabama,” that can be found at www.tripnet.org.
The improvements include building, expanding, and modernizing Alabama’s highway and bridges. “It’s not a question of whether we need to do it, it’s a question of how we do it,” Canary said.
Legislation is not yet ready for introduction, its sponsor, Rep. Mac McCutcheon, R-Huntsville, said.
Representatives from the Alabama Trucking Association, the Alabama Road Builders Association, the Economic Development Association of Alabama, Associated General Contractors, and the Alliance for Alabama’s Infrastructure attended the news conference.
The AAI is comprised of members of Alabama’s business community, chambers of commerce, industry associations, community groups, and concerned citizens. “We have rural counties that are at an economic disadvantage due to their infrastructure,” said AAI spokesman Jim Page, President and CEO of the Chamber of Commerce of West Alabama.
Committee Favorably Approves Apprenticeship Tax Credit Bill
On Thursday, the Senate Transportation and Energy Committee debated SB 180 by Sen. Gerald Dial, R-Lineville, that would establish the Alabama Transportation Safety Fund.
Sen. Dial explained to committee members that during the Joint Transportation Committee’s five recent regional meetings held across the state, one of the main takeaways was a demand by the public that any new revenue for infrastructure must be dedicated 100 percent to improving roads and bridges in Alabama.
Sen. Dial’s bill includes accountability and transparency measures that ensure that funds go directly to road and bridge projects by setting up a separate fund where any new revenues would be deposited and distributed to the Alabama Department of Transportation (ALDOT). Counties and municipalities would use the same distribution formula that is being used today. All of these entities would be required to expend these funds on road and bridge projects rather than on salaries or administrative expenses.
It also would require ALDOT to announce annual projects and post quarterly progress reports on its website. Counties and cities would be required to adopt annual plans that identify the road and bridge projects for the year and post the plan throughout the district. County and city engineers must provide annual written reports detailing the expenditures made during the prior fiscal year.
Committee members generally agreed on the need for investing in Alabama’s infrastructure and that the lack of funding is negatively impacting every community in the state. They also agreed on the need for improving transparency and accountability in the process of investing in infrastructure and that funds should be dedicated to fixing roads and bridges.
Debate in the committee focused on how funds would be distributed to the state and local governments. Sen. Dial said he favored leaving the distribution between state, county and city governments the same as it is today because changing it would create mass confusion and destroy the opportunity to responsibly invest in transportation infrastructure this session.
Sen. Greg Albritton, R-Atmore, introduced a substitute bill that would change the distribution formula for not only new revenue but also for existing revenue with less money going to the state and more money going to counties. It also included a provision that would require funds going to counties to be primarily used for bridge construction. It was noted that under Albritton’s plan the state would lose over $230 million in federal matching money.
Committee members requested additional time to study these proposals. The committee adjourned and is expected to reconsider this issue next week.
The following Senators serve on the Transportation and Energy Committee:
Gerald Allen (Chair), Greg Albritton, Clyde Chambliss, Linda Coleman-Madison, Gerald Dial, Jimmy Holley, Bill Holtzclaw, Jim McClendon, Arthur Orr, Greg Reed, Quinton Ross, Hank Sanders, Clay Scofield, Cam Ward, and Tom Whatley.