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Capital Briefing for Week 4 of the 2017 Session

The Business Council of Alabama continued working on the business community’s legislative agenda during the fourth week of the 2017 Alabama legislative session. That work includes continuing efforts to pass consumer lawsuit lending reform that began its path through the Senate this week.

Sen. Tom Whatley, R-Auburn, introduced an important bill to regulate lawsuit lending that currently is not regulated by the state as other loans are regulated.

The House and Senate prepared for two, three-day legislative work weeks in advance of the planned two-week break beginning March 27. In Thursday’s House Rules Committee meeting, Chairman Rep. Alan Boothe, R-Troy, said the plan is to meet three legislative days each of the next two weeks in advance of spring break and to get the 2017-18 General Fund budget on the House floor on March 14.

At Tuesday’s legislative briefing, House Ways and Means General Fund Chairman Steve Clouse, R-Ozark, said the committee will begin discussing the budget next week with Medicaid dominating the discussion.

The Senate passed sunset agency bills on Thursday and adjourned as did the House, until Tuesday, the ninth legislative day. The session must end on or before May 22.

As of week four, House members have filed 356 bills and Senate members 270 bills. Of the 626 bills, the House has passed 52 and the Senate 36. A total of 26 bills, mostly sunset bills, have passed both houses.


EDUCATION

Bills Would Require Elected Superintendents To Be Appointed In The Future

House and Senate bills were introduced this week that would make all currently elected county school superintendents to be appointed after their current terms expire. Of the 67 county schools systems in Alabama, 37 hold elections for the post and 30 superintendents are appointed. All 69 city school systems in Alabama have appointed superintendents.

Alabama and Florida are the only two states that still elect superintendents. The Mississippi Legislature passed a law in 2016 requiring all local superintendents to be appointed.

The bills are SB 267 by Sen. Dick Brewbaker, R-Pike Road, and HB 350 by Steve McMillan, R-Gulf Shores.

SB 267 was assigned to the Senate Committee on Youth Affairs and HB 350 was assigned to the House Education Policy Committee. In the BCA’s 2017 State Legislative Agenda, the Education and Workforce Preparedness Committee included support for legislation requiring the appointment of local superintendents.


ENVIRONMENT AND ENERGY

Bill Would Regulate The Use Of Water By Some Non-Riparian Landowners

SB 255 by Sen. Orr, would authorize certain owners of land that is non-contiguous to water sources to be able to use the water for agricultural irrigation. This bill would only apply to the Alabama, Tennessee, and Tombigbee rivers where the average water flow exceeds 8,000 cubic feet per second.

The bill outlines certain elements of the process that a non-contiguous land owner would have to follow in order to use water for agricultural irrigation as well as restrictions on the aggregate non-contiguous, or non-riparian, use.

The BCA has maintained a longstanding policy that any changes to Alabama’s water laws and policies should be based on a demonstrated scientific need and substantiated byverifiable data.


JUDICIAL AND LEGAL REFORM

Consumer Lawsuit Lending Bill Is Introduced; Previous Versions Have Passed the House

Sen. Whatley introduced SB 261, the Alabama Consumer Lawsuit Lending Act, that would subject lawsuit loans to regulation by the Alabama Banking Department. SB 261 was assigned to the Senate Judiciary Committee.

Consumer lawsuit lending is the unregulated practice of loaning money to plaintiffs seeking settlements or judgments. Plaintiffs must repay lenders if any settlement or judgment is received at interest rates that can exceed 100 percent. This practice targets a vulnerable population, introduces third-party interests into the attorney-client relationship, and both slows the pace of and increases the cost of litigation for plaintiffs and defendants.

“Aggressive lawsuit lending poses challenges to Alabama’s legal system by charging exorbitant interest rates on loans that can affect how plaintiffs negotiate a settlement,” BCA President and CEO William J. Canary said.

The BCA’s 2017 legislative agenda includes support of regulating consumer lawsuit lending. Previous attempts to pass this legislation received broad support from both Republicans and Democrats. In 2015, a BCA-supported lawsuit lending bill passed the House on a bipartisan 98-1 vote. In 2016, a similar bill passed the House on a bipartisan 86-6 vote.

The BCA, working with the U.S. Chamber of Commerce’s Institute for Legal Reform, supports SB 261.

Sen. Whatley was recognized last week with a Business Champion Award for working to pass lawsuit lending legislation that will bring legal fairness to involvement by third-party agencies with a financial interest in lawsuits.

Governor’s Prison Construction Bill Has Public Hearing

The governor’s prison construction bill, SB 59 by Sen. Cam Ward, R-Alabaster, was the subject of a lengthy public hearing in the Senate Judiciary Committee on Wednesday, but no vote was taken. The bill would authorize an $800 million bond issue to construct four new prisons: three men’s prisons and one women’s prison.

Sen. Ward acknowledged the promising results of recent prison reform efforts, but he also noted that lawsuits and the threat of federal government intervention still require Alabama to act to improve prison conditions and reduce overcrowding.

Alabama Department of Corrections Commissioner Jeff Dunn emphasized the desperate need for new facilities, particularly for personnel safety reasons, and he claimed that the cost of the bond could be paid out of the DOC’s budget due to efficiencies and other savings.

The committee is scheduled to vote on SB 59 next Tuesday.

Senate Committee Favorably Reports Gun Rights Bill After Public Hearing

The Senate Judiciary Committee voting 6-3 on Wednesday favorably reported SB 24 by Sen. Gerald Allen, R-Cottondale. The bill would make a number of substantial changes to Alabama’s gun laws including removing the concealed weapon permit requirement to carry a pistol in a gun owner’s vehicle. It would add further requirements for owners of restricted-access buildings or facilities to prevent firearms from entering or being on-site.

The original bill would have removed the existing requirement for either a concealed weapon permit or property owner consent to carry a pistol on private property belonging to another person or business, but the committee adopted an amendment to keep those provisions in force.


TAX AND FISCAL POLICY

Historic Structure Renovation Tax Credit Bills Are Introduced

Sen. Jabo Waggoner, R-Vestavia Hills, and Rep. Victor Gaston, R-Mobile, this week introduced bills to reinstate the historic renovation income tax credit program for the next 10 years.

Sen. Waggoner filed SB 262 that was assigned to the Senate Finance and Taxation Education Committee. It is co-sponsored by 28 senators including Senate President Pro Tem Del Marsh, R-Anniston. Alabama’s historic tax credit law expired last year and legislation to extend it stalled, leaving worthy projects in limbo.

Rep. Gaston introduced HB 345. It has 87 co-sponsors and was assigned to the House Ways and Means Education Committee.

The legislation would authorize an income tax credit refund for developers of eligible and certified historic building renovations. The total amount of credits would be capped at $20 million a year and at $200 million over the lifetime of the act – until 2027. If the bill becomes law, applications for reserving new tax credits would be accepted beginning Jan. 1, 2018.

The bill would create a Historic Tax Credit Evaluation Committee that would determine project worthiness. The committee would consist of the director of the Governor’s Office of Minority Affairs, the executive director of the Alabama Historic Commission, the state Finance Director, the director of the Alabama Department of Economic and Community Affairs, the secretary of the Department of Commerce, two members of the House, and two members of the Senate.

Bill Would Phase Out ABC Stores

Sen. Arthur Orr, R-Decatur, introduced SB 260 that was referred to the Senate Fiscal Responsibility and Economic Development. If his bill becomes law, Alabama’s Alcoholic Beverage Control Board stores would be shuttered over five years beginning next year.

The ABC board would determine which stores to close at the rate of 20 percent per year. The state has about 170 liquor stores and hundreds of private retailers.

“I think it’s sound policy to remove the state from competing against the private sector in retail sales of alcohol,” Sen. Orr told the Decatur Daily. “If the state weren’t in the liquor business today, with the 600-plus private liquor retailers out there, would we be entertaining the concept of getting into the retail sale of alcohol in the 21st century? I don’t think so.”


OTHER BILLS OF INTEREST

Environment and Energy

HB 328 by Rep. Alan Baker, R-Brewton, and SB 259 by Sen. Greg Albritton, R-Range, would clarify aspects of the existing permitting process from local governments for certain solid waste facilities. The BCA participated in a task force assembled by the governor to work with other stakeholders on this legislation, and is continuing to review this bill.

Health

HB 348 by Rep. Clouse would, among other changes and clarifications, extend the private hospital assessment and Medicaid funding program through fiscal year 2018.

Judicial and Legal Reform

HB 279 by Rep. Alan Baker, R-Brewton, would expand the list of crimes eligible for expungement from a criminal record to include violent felony offenses that an individual was charged with but found not guilty. This bill was amended and given a favorable report on Wednesday by the House Judiciary Committee.

HB 321 by Rep. Bob Fincher, R-Woodland, is a proposed constitutional amendment that would cap interest rates on a variety of consumer loan products at 36 percent annually.

Tax and Fiscal Policy

SB 253 by Sen. Clay Scofield, R-Guntersville, relating to the Alabama Renewal Act, would provide income tax, property tax, and sales and use tax incentives relating to broadband telecommunications infrastructure.

Elections

The Senate Constitution Ethics and Elections Committee on Wednesday approved SB 108 by Sen. Whatley. It would prohibit voters from switching parties between primary and primary runoff elections. Currently, electors choose which primary they wish to vote in, and if a runoff is needed, there is nothing to prohibit “crossing over” and voting in the other party’s runoff. The committee favorably reported the bill 4-1.

The committee also carried over SB 77 by Sen. Rodger Smitherman, D-Birmingham, because he was unable to attend. The proposed legislation would allow Alabama to conduct early voting. Currently, electors may cast ballots only on election day or by absentee voting. The legislation would allow for early voting to take place for at least five days during the 14 days before an election. For statewide elections, electors would also be allowed to vote on the two Saturdays prior to an election.


OTHER NEWS

House And Senate To Get Reapportionment Plan By End Of Session

The Joint Committee on Reapportionment met Wednesday and got an update on 2017 reapportionment efforts concerning 12 legislative districts that a federal judge ruled in January were unconstitutional. The committee plans to have drafts of the new districts in the coming weeks.

The committee’s co-chair, Sen. Gerald Dial, R-Lineville, told members of the agreement by House and Senate leaders to take up a reapportionment plan that the committee produces. Sen. Dial said he hopes the committee can vote on a plan in the next few weeks and move it to the full Legislature before the end of session and prevent a special session regarding reapportionment.

Currently there are no draft maps for review, but the committee hoped to have them for members before the legislative spring break later this month. Sen. Dial has said he plans to conclude the redistricting process during this regular session.
The judge declared there was an improper use of race in the original 2012 redistricting process.

House Republican Caucus Majority Leader and Vice Chair Elected

BCA President and CEO Canary congratulated Rep. Nathaniel Ledbetter as House majority leader and Rep. Connie Rowe as House Republican caucus vice chair. They were selected to the positions by the House Republican Caucus this week.

“Your elections by your peers show their confidence in your abilities to conduct the majority’s business,” Canary said. “The business community promises cooperation and an open-door policy for any discussions concerning mutual interests that promote the economy of Alabama and the fruitful and profitable operation of small and large businesses.”

Rep. Ledbetter, R-Rainsville, and Rep. Rowe, R-Jasper, who is the first female to hold a caucus leadership position, will serve the remainder of the 2014-18 quadrennium.

“My goal as House Majority Leader will be to ensure that the bills, measures, and resolutions passed by the body reflect the conservative beliefs and values of our Republican members,” said Ledbetter, a small businessman who served as mayor and city council member in Rainsville. He was elected to the House in 2014 and is the first freshman House member elected to serve as majority leader in modern times.

Rep. Rowe, also elected in 2014, served as Jasper police chief and was an investigator for the Walker County District Attorney’s Office for more than 20 years.
“As the caucus vice chair, I’ll work hard every day to support our Majority Leader, and promote the conservative agenda that House Republicans share,” Rowe said. “I appreciate the opportunity my colleagues have provided me to step up and serve.”

Rep. Harper Steps Down as Committee Chair on Doctor’s Advice

Rep. Alan Harper, R-Northport, announced Thursday that he is stepping down as chairman of the House Economic Development and Tourism Committee based on advice from his doctor. Under House rules, Vice Chair Rep. Becky Nordgren, R-Gadsden, will preside for the remainder of the session and Rep. Harper will remain a member of the committee.

“It’s no secret that I’ve had three heart attacks and a number of serious medical procedures in recent years, so I am under the constant care and supervision of my doctors,” Rep. Harper said in a statement. “Following a recent exam, they have advised me to avoid stress and take things a bit easier in the best interest of my health, so while I will keep working for my constituents in my House seat, I must reluctantly resign my chairmanship.”

“Rep. Harper has proven to be an able and hardworking chairman for the Economic Development and Tourism Committee, so we’ll miss his leadership and guidance,” House Speaker Mac McCutcheon, R-Monrovia, said. “Luckily, the committee will still have access to his institutional knowledge and experience as he rightfully puts his health concerns first.”

Alabama’s Historic Aerospace Industry Saluted

Alabama’s vaunted aerospace industry that began in 1910 with the nation’s first civilian flight school in a cotton field that became Maxwell Air Force Base by Orville and Wilbur Wright was lauded in a Joint Resolution naming this week as Alabama Aerospace Week.

Alabama’s significant aerospace history includes its space systems – the Saturn series of rockets, their predecessors and successors, that were and are managed at the Marshall Space Flight Center in Huntsville, leading to U.S. astronauts landing on the moon in July 1969, and the Space Shuttle.

The Alabama aerospace industry has been a powerful and innovative industry and is closely associated with the BCA through its partnership with the Alabama Aerospace Industry Association.

The resolution says that Alabama’s aerospace industry directly employs more than 25,000 people and supports an additional 13,000 jobs in related fields and brings in more than $244 million in annual state and local tax revenues. The industry accounts for 4.6 percent of the state’s manufacturing GDP.

Alabama houses the training ground for the heroic Tuskegee Airmen, who were the first African-American military aviators in the U.S. Armed Forces, the U.S. Army Aviation Center of Excellence at Fort Rucker, the U.S. Army Materiel Command, the U.S. Army Aviation and Missile Command, the U.S. Army Space and Missile Defense Command and the Missile Defense Agency at Redstone Arsenal, the U.S. Coast Guard Aviation Training Center, the U.S. Air Force’s Maxwell-Gunter Air Force Base, home to the Air University, NASA’s Marshall Space Flight Center, five commercial airports, and hundreds of general aviation airports.

Alabama is a recognized leader in aerospace research, development, and education with premier institutions that include Auburn University, The University of Alabama, The University of Alabama in Huntsville, and others.

About Dana Beyerle

Dana Beyerle
Director of Communications
(334) 240-8768 | Fax: (334) 241-5984
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