Capital Briefing for Week 11 of the 2017 Session

The Legislature started down the home stretch in the 11th week of the session beginning with the Business Council of Alabama’s Tuesday briefing featuring Senate Majority Leader Greg Reed, R-Jasper.

Sen. Reed advised that there are two budgets still to pass prior to the session-end deadline of May 22 – the $1.85 billion General Fund budget bill, HB 155 by Rep. Steve Clouse, R-Ozark, and the $6.4 billion, 2017-18 Education Trust Fund budget bill, SB 129 by Sen. Arthur Orr, R-Decatur.

The House passed the ETF, and the Senate passed the House-originated General Fund.

The BCA testified at the Senate Finance and Taxation General Fund Committee public hearing on HB 284, the autism coverage mandate bill by Rep. Jim Patterson, R-Meridianville. Blue Cross and Blue Shield of Alabama estimates the bill will cost policyholders and large and small businesses that provide medical insurance between $49 and $98 million annually.

Bills were introduced in the House and Senate to redraw districts that can pass court muster, and the Senate passed its bill.

Governor Ivey created an aviation education unit with AIRBUS in Mobile.

Through Day 24 of the session, the House has introduced 599 bills and the Senate 419. The House and Senate return to Montgomery on Tuesday, May 9, to continue in regular session.


House Passes 2017-18 Education Trust Fund Budget; Veteran Scholarship Bills Advance

The House on Wednesday approved the Senate-generated 2017-18 Education Trust Fund budget by a vote of 100-0. Because of changes, the bill returns to the Senate for consideration.

SB 129 sponsored by Sen. Arthur Orr, R-Decatur,  would appropriate $6.4 billion, about $90 million more (1.4 percent) than was appropriated to this year’s ETF budget. It would include $22 million more for the Foundation Program, an increase of $12 million from the Senate-passed version. This would enable Alabama to add 152 more teacher units in grades four, five, and six.

The budget also would increase funding for Alabama’s pre-kindergarten program by $13.5 million, to $78 million – the Senate version advocated a $15 million increase for pre-K, increase the appropriation to the Alabama Community College System for dual enrollment by $1 million, increase workforce development funding by $2.75 million, and increase Advanced Placement by $200,000, National Board Certification by $200,000, agribusiness education by $42,000, and teacher professional development by $1 million.

The proposed budget would level-fund public employees’ health insurance, add $8 million to fully fund teacher retirement, and level-fund teacher mentoring at $3 million. Four-year colleges and universities would be level-funded primarily because the cost of a veterans’ scholarship program will increase by $35 million next year over this year.

The ETF budget amount is capped set by the Rolling Reserve Act that was designed to prevent proration.

Committee Acts on Veterans’ Scholarship Bills

The Senate voting 30-0 this week passed Sen. Orr’s SB 308, a supplemental appropriation of $5 million this fiscal year to the veterans’ scholarship program, which is being modified due to fears that it is becoming an open-ended appropriation.

The House voting 104-0 passed SB 315 by Sen. Gerald Dial, R-Lineville, a proposed retooling of the veterans’ scholarship program.

SB 315 would cap annual appropriations and benefits, increase the disability eligibility requirement, require recipients to have lived in the state for two years or to have filed a state income tax return for at least 10 years, and limit benefits paid to dependents under the Alabama G.I. Dependent Scholarship Program to the cost of in-state tuition only.

The bill also would cap the rate of tuition paid to equal the rate of the Department of Defense Tuition Assistance Cap, require eligible participating dependents to maintain a minimum 2.0 grade point average, and require state educational benefits to be applied only after all other resources have been exhausted.

Additionally, this bill would increase the cap on the assistance provided to eligible active members of the Guard from $2,000 to $4,800 per semester and remove the per-semester spending limit. The bill will have to return to the House due to changes made in the Senate

Bill to Amend Charter Schools Doesn’t Get Procedural Vote to Advance

The House this week failed to approve a procedural vote that would have advanced HB 245, the revision to the Alabama School Choice and Student Opportunity Act, by Rep. Terri Collins, R-Decatur. The House vote on the Budget Isolation Resolution was insufficient to advance the bill into position for consideration.


Autism Bill Subject to Public Hearing

The Senate Finance and Taxation General Fund Committee on Thursday held a public hearing on HB 284, the mandated autism insurance coverage bill by Rep. Patterson. No vote was taken.

BCA President and CEO William J. Canary testified at the hearing, relating how the BCA was involved in an autism study committee involving the autism community, state officials, Medicaid, and legislators that was created by Governor Bentley in 2016 and worked to ensure that all children were included in autism coverage.

However, Rep. Patterson introduced a bill to cover only two of every 10 children diagnosed with autism. Medicaid was not included due to the expense. Rep. Anthony Daniels, D-Huntsville, successfully amended HB 284 to include coverage for eight of 10 children. Canary asked the Senate committee when it votes not to strip the amendment and exclude six of 10 children from potential coverage.

He reiterated that the BCA still has issues with government mandates and that HB 284 still does not cover all children. Families with insurance through small group plans and large group ERISA plans would not likely receive this mandated benefit.

“The goal of the working group from my perspective was to ensure all children be included because the legislation introduced last year would have covered only two,” Canary said. “If you strip it out it’s cruel.”

For some reason, the Legislative Fiscal office has been unable to determine the cost to taxpayers of HB 284, except to say it “will increase the financial obligations of the Alabama Medicaid Agency, the Department of Public Health, the Public Education Employee Health Insurance Board (PEEHIB) and the State Employee Insurance Board (SEIB) by an undetermined amount.”

The BCA has consistently advised that mandates are not free and legislators should fully understand the financial burden on both the public and private sectors before voting on this legislation. Robin Stone, representing Blue Cross and Blue Shield of Alabama, said the cost could exceed $100 million a year.

This bill remains an expensive mandate on both public and private health plans and policyholders and employees who ultimately will be the ones to pay.

Ironically, the hearing occurred the same day that the Republican-led U.S. House of Representatives in Washington D.C., voted to repeal Obamacare, perhaps the most unpopular of insurance mandates in American history.

Senate Approves $1.85 Billion Budget That Level Funds Medicaid

The Senate on Thursday voting 24-4 passed HB 155, the $1.85 billion, 2017-18 General Fund budget.

Since the Senate changed the House version, it must return to the House for consideration of changes.

Alabama Medicaid would get $701 million, the same as this year, but the agency would receive $105 million from the Deepwater Horizon-BP oil spill settlement. Together, the appropriations basically level fund Medicaid for the fiscal year beginning Oct. 1.

Senate budget chairman Sen. Trip Pittman, R-Montrose, said the budget includes a potential carryover of about $95 million for fiscal year 2019, which will be needed since the $105 million from BP will be gone after next year.

The Senate rejected a proposed amendment to take $63.5 million in road funds, which would have forced cuts of 3.4 percent in next fiscal year’s state agency budgets.

The Legislature for years has approved diverting road funds to general government use. The proposed budget would appropriate $35 million in state gasoline tax and related fees to state courts and $28.5 million to the Alabama Law Enforcement Agency.

The Senate kept the clause to allow the Alabama Alcoholic Beverage Control Board to increase the tax on liquor by 5 percent the responsibility of the Legislature. The budget would appropriate $3.3 million to hire 30 state troopers.


Lawsuits Lending Bill Carried Over

SB 261 by Sen. Tom Whatley, R-Auburn, was carried over on the Senate calendar on Wednesday. SB 261 as introduced would establish the “Alabama Consumer Lawsuit Lending Act” and require consumer lawsuit lenders to obtain licensing from the State Banking Department.

Reapportionment Bills See Action

The Senate on Thursday voting 25-7 passed SB 403, the Senate reapportionment bill sponsored by Sen. Gerald Dial, R-Lineville. The House reapportionment bill, HB 571, is first on the House Special Order Calendar for Tuesday. Both bills would redraw Senate and House districts following a federal three-judge panel declaring certain districts unconstitutional.


Statewide Uber Bill Advances

The House on Thursday voting 62-7 passed HB 283 by Rep. David Faulkner, R-Birmingham, commonly called the Uber bill. The bill would establish the regulatory framework under the Alabama Public Service Commission for the operation of Transportation Network Companies (TNCs) in the State of Alabama, as 42 states across the country have done.

Rep. Faulkner said that currently only 11 cities allow companies like Uber to operate, and this bill would provide a uniform framework so all Alabama citizens would have the opportunity to access these transportation services.

The bill goes to the Senate for consideration where the Senate Tourism and Marketing Committee voting 6-0 favorably approved the Senate bill, a substitute SB 271, by Sen. Bobby Singleton, D-Greensboro.

HB 283 requires thorough background screening standards for TNC drivers and contains consumer protection provisions to strengthen the community of riders and drivers in Alabama. Any city may opt out of allowing TNCs to operate in its jurisdiction. It also would establish a fee structure that would provide a stream of revenue to local governments.

Unemployment Duration Limits Contained in Senate Bill

The Senate on Wednesday voted 20-0 to pass SB 188 by Sen. Orr. SB 188 would reduce the maximum number of weeks that unemployment compensation benefits are payable from 26 weeks to the lesser of 14 weeks, or a maximum of 20 weeks, depending upon the average unemployment rate, for any benefit year beginning on or after January 1, 2018.

This will save the Unemployment Compensation Trust Fund for benefits payments funded by employer contributions by approximately $56.2 million. The bill also would increase the weekly benefit amount from $265 to $275 beginning Jan. 1, 2018.

Eligible recipients would be entitled to an additional five weeks after all regular benefits have exhausted if enrolled in and making satisfactory progress in a job training or certification program approved by the Alabama Department of Labor. Each approved training program shall prepare individuals for entry into a high wage, high demand occupation.


Alabama Jobs Act to Be Updated

The House Ways and Means Education Committee on Thursday favorably reported a substitute HB 574 by Rep. Alan Baker, R-Brewton, that would revise the existing Alabama Jobs Act, which provides certain incentives and credits to qualifying economic development projects. The law caps the aggregate balance of outstanding incentives at $850 million and limits the incentives to qualifying projects for which agreements have not been executed on or before Dec. 31, 2019.

The bill would continue the eligibility for incentives to projects by one year, Dec. 31, 2020, and would revise the aggregate cap on outstanding incentives to $300 million, unless the Legislature by joint resolution or action of both houses votes to allow additional jobs act incentives.

Historic Tax Credit Renewal One Step Closer to Passing

The Senate Finance and Taxation Committee voting 13-0 favorably reported a substitute HB 345 by Rep. Victor Gaston, R-Mobile, moving it to the Senate calendar for consideration. The bill would restate and revise the historic buildings tax credit that expired last year.

The substitute would lower the allowed age of an eligible building from 75 years to 60 years and set aside 40 percent of the tax credit, about $8 million, for six months for counties with populations of less than 175,000. The tax credit in any one year would be capped at $5 million per project, except for a certified historic residential structure, which would be capped at $50,000, and capped at $20 million overall.


Governor Ivey Makes Change in Revenue Department

Governor Kay Ivey continues to make her mark on appointed state agency positions. Today, WSFA Channel 12 in Montgomery reported that Governor Ivey will replace Alabama Revenue Commissioner Julie Magee.

Details on Magee’s departure are not currently available, WSFA reported, but Ivey’s office said a successor will be named soon. The revenue commissioner is responsible for overseeing the annual collection of nearly $10 billion in revenue for the state.

Magee is the latest member of ex-Governor Robert Bentley’s administration to leave as the Ivey administration is set up. On Thursday, Jim Byard stepped down as head of the Alabama Department of Economic and Community Affairs and was succeeded by Enterprise Mayor Kenneth Boswell.

Aviation Education Center Planned in Mobile

Governor Kay Ivey this week announced creation of the Alabama Aviation Education Center, a hands-on instructional facility to be located near Business Council of Alabama-member Airbus’s aircraft manufacturing facility in Mobile.

The Aviation Education Center will be developed in partnership with Airbus to provide aviation-themed activities and STEM-focused educational programs to generations of visitors.

The $6.5 million facility will feature classrooms, workshops and innovation rooms, along with exhibits, aircraft models, videos and more. The goal is to bolster Alabama’s workforce development efforts and inspire young people to pursue careers in the state’s growing aerospace cluster, Governor Ivey said.

“Alabama’s aviation and aerospace industries are poised to drive economic growth in the state over the next 20 years, and it’s important that we prepare for this expansion with game-changing workforce development initiatives,” Governor Ivey said.

“Airbus strongly supports the establishment of this education center, a facility that will be of great benefit both to the region and to the aerospace industry,” said Allan McArtor, chairman of Airbus Americas. “It will provide Gulf Coast residents, students and visitors a place to learn about the rich history, and bright future of aerospace in Mobile, to see themselves as a part of this industry, and to learn more about the ways in which the Mobile Bay area, the state of Alabama and the entire Gulf Coast are benefitting from the aerospace hub at the Brookley Aeroplex at Mobile.”

Airbus will play a central role in developing the educational programs offered at the center. The facility will be managed and operated by Airbus Americas Inc., the global aerospace company’s North American arm.

Governor Supports Infrastructure Investment 

In an interview with the Associated Press, Governor Ivey said she supports a gas tax to support transportation infrastructure, a proposal that so far has stalled this session.

“We’ve got to pay for roads and bridges that are in disrepair,” Governor Ivey said. “School buses now have to travel around certain bridges. … We want safety for our school buses. We want safety for our families. We want safety for our commerce. It’s just part of doing business and we haven’t had a gas tax increase in the last 25 years. It makes sense to tend to business.”

Governor Ivey Appoints New ADECA Director

Governor Kay Ivey has appointed Enterprise Mayor Kenneth Boswell as Director of the Alabama Department of Economic and Community Affairs.

“ADECA provides valuable support to our local communities, improving the quality of life of our people through overseeing important economic development projects, infrastructure improvements and job training, in addition to managing all federal grant dollars,” Governor Ivey said. “ADECA’s mission is important to Alabama’s success. His tenure as mayor shows that he understands the importance of leading local communities in economic development and he will be an asset to the people of Alabama.”

Boswell served as mayor of Enterprise since 2003 and was elected to the City Council in 2000.

“I will bring to the agency the same work ethic and drive that I have given the City of Enterprise for the previous 17 years,” Mayor Boswell commented. “ADECA has significant responsibility, and I will see to it that the agency and its team work hard to serve all Alabama.”

Boswell replaces Jim Byard who resigned as ADECA Director. He will officially begin work on May 15.