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Final Week of the 2018 Session

The Legislature completed its 2018 regular session on Thursday, departing early in order to campaign for the June 5 primaries. The session that began in January lasted 26 legislative days, four fewer than the 30 days allowed for a regular session. Legislators introduced 922 bills during the session.

The Legislature next meets in regular session in March 2019.

The two state budgets were sent to Governor Kay Ivey, and teachers and state employees will get a raise in October. Eligible state and education retirees will get a one-time bonus.

Important business community measures that passed included tax law clarifications, transportation network company regulations, ethics law clarity for Alabama job creators, and a rural broadband access bill.

Governor Ivey signed the rural broadband bill, SB 149 by Sen. Clay Scofield, R-Guntersville and the Senate and House approved a hotly contested ethics bill to protect Alabama’s economic developers and projects they work on that demand secrecy.

In the $6.6 billion Education Trust Fund, important education functions that help students prepare for the business world after their schooling received significant funding increases. The House and Senate also passed a $2.05 billion General Fund.

House Speaker Mac McCutcheon, R-Huntsville, on Wednesday administered the oath of office to newly elected Rep. Rex Reynolds, R-Hazel Green, who was elected Tuesday to fill the unexpired term of the late Rep. Jim Patterson, R-Meridianville.

ProgressPAC endorsed Rep. Reynolds in the Tuesday special election for District 21, which is entirely in Madison County.

“What an honor,” Rep. Reynolds said. “I appreciate the welcome today for me and my wife.”


EDUCATION AND WORKFORCE DEVELOPMENT

Education Budget Passes, Goes to Governor

The Senate debated the 2018-19 Education Trust Fund budget conference report and voted 28-0 to concur with conference committee report, sending the bill to Governor Kay Ivey.

“The budget is passed,” Senate President Pro Tem Del Marsh, R-Anniston, said. “It was one of the smoothest budgets we’ve had.”

The House had voted 98-0 on Tuesday to pass the conference committee report of HB 175.

“It’s a very positive budget for the state of Alabama in terms of education,” House Ways and Means Education Committee Chairman Rep. Bill Poole, R-Tuscaloosa, said.

Sen. Arthur Orr, R-Decatur, handled budget in the Senate.

Rep. Poole said the bill substantially funds pre-K schools and eligible two-year system and higher education schools. The budget includes substantial resources for the state Foundation Program including for technology, professional development, career tech coordinators, as well as improving the teacher-to-student ratio in grades four through six. It will help recruit and train National Board Certified Teachers who teach core subjects in at-risk areas, Rep. Poole said.

The conference committee substitute for the $6.6 billion Education Trust Fund includes substantial pro-business increases: total Business Education Alliance-recommended initiatives will receive a combined $95.9 million.

HB 175 appropriates an $18.5 million increase for pre-K, the greatest single-year increase in program history, from its current budget amount of $77.5 million, to $95.9 million, and an increase of $4 million to the vaunted Alabama Reading Initiative program, from its current appropriation of $40.8 million, to $44.8 million;

National Board Certified teaching standards will get a $1 million increase and Career Tech, an increase of $1.3 million. The substitute bill keeps a $200,000 increased appropriation to Advanced Placement and an appropriation of $1.5 million to the proposed new Alabama School of Cyber and Engineering in Huntsville.

The ETF budget also includes a $250,000 appropriation to support the Automotive Manufacturing Workforce Development Program and $200,000 for the Automotive Workforce Training Scholarship Program.

Bonuses for Education Employees Approved

The Senate on Wednesday voting 29-0 approved the conference report on SB 21, Sen. Gerald Dial’s one-time bonus for eligible retired education employees. The bill had gone through numerous amendments and emerged from a House-Senate conference committee for final consideration.

Like the state employee one-time, lump-sum retirement bonus, SB 21 authorizes a bonus of $1 per month for each year of service attained by an education retiree or a qualifying beneficiary. The bill went to Governor Ivey’s office.

Sen. Dial, R-Lineville, also successfully sponsored a one-time bonus for retired state employees.

Technology Fund Appropriation Authorized

The House on Wednesday voting 101-0 concurred in the Senate changes to HB 179. HB 179 appropriates in this fiscal year $2 million to the Alabama Community College System for equipment and/or deferred maintenance, $16 million to the public institutions of higher education for repairs or deferred maintenance of facilities, insuring facilities, or the acquiring/buying education technology and equipment, or both, and $41 million to local school systems, the Alabama Institute for Deaf and Blind, the Alabama School of Math and Science, the Alabama School of Fine Arts, and the Department of Youth Services’ School District, for repairs or deferred maintenance of facilities, classroom instructional support, insuring facilities, transportation, of acquiring/buying education technology and equipment, or both. The bill went to Governor Ivey.

Cyber School Funding Bill Goes to Governor

The Senate on Tuesday sent SB 212 to the governor’s office for consideration after its final passage. The House voting 91-1 passed an amended SB 212, the cyber school bill by Sen. Orr. The Senate concurred in the House amendment.

The bill appropriates $1.5 million for a new Alabama School of Cyber Technology and Engineering, an independent residential school in Huntsville. The bill also creates a 15-member board of trustees to govern the school. Cyber technology and engineering is expected to be a growing field with employment opportunities for Alabama’s current and future workforce.

Governor Gets House Teacher Scholarship Loan Repayment Bill

The House voted 100-0 on Wednesday to concur in the Senate-amended HB 261 by Rep. Joe Lovvorn, R-Auburn.

Rep. Lovvorn’s bill would authorize a loan repayment amount for qualified school teachers. The “Alabama Math and Science Teacher Education Program” to be administered by the Alabama Commission on Higher Education is contingent upon availability of funding. It would authorize up to $7,500 each year for repayment of federal student loans for teachers if they instruct in science, math, or technology in unserved or hard-to-serve areas.

School Security Measures Emergency Funding Okayed

The House and Senate approved Governor Ivey’s executive amendment to SB 323 by Sen. Trip Pittman, R-Montrose, this week. The bill adds school security measures as an allowable use of funds appropriated from the Education Trust Fund Advancement and Technology Fund upon the governor’s certification that a state of emergency is been declared for a natural disaster that damages school property. The fund withdrawal cannot exceed 10 percent of the current balance and the amount withdrawn must be repaid within two years.


HEALTH

Troubling Liability Language Removed from Bill Increasing Fentanyl Penalties

The Senate and House approved the conference report of an amended SB 39 by Sen. Cam Ward, R-Alabaster, the Senate voting 27-0 and the House voting 101-0.

SB 39 will stiffen penalties for distributing fentanyl if a person is convicted of trafficking in the event he or she possesses more than one gram of fentanyl or 50 packages of a fentanyl mixture. The bill also sets mandatory minimum sentences based on weight.

Last week, a House floor substitute version of the bill inserted broad language relating to lawsuits against opioid manufacturers and distributors using rare “market-share liability” system wherein companies that make, sell, market, or distribute these products would be liable for their percentage of the total market share of opioid sales, regardless of whether their particular product was the cause of an individual plaintiff’s harm.

Fortunately, that language was removed in the conference committee substitute and special thanks is owed to bill sponsors Sen. Ward and Rep. April Weaver, R-Alabaster, for removing this problematic language in the legislation.

Medicaid-Related Nursing Home Bills Pass

Rep. Steve Clouse, R-Ozark, sponsored HB 321 and HB 322, which benefit Medicaid nursing home payments and the General Fund. HB 321 passed 102-0 in the House and 26-0 in the Senate. HB 322 was passed in the House 100-0 and in the Senate, 27-0.

HB 321 extends the current nursing home bed taxes, which are the supplemental privilege assessment, the secondary supplemental privilege assessment, and the monthly surcharge on nursing home beds that were to expire Aug. 31, 2018, by one year to Aug. 31, 2019. The supplemental privilege assessment is $1,603 annually, the secondary supplemental privilege assessment is $401 annually, and the surcharge is $525 annually, for a total of $2,529 annually on each licensed nursing home bed. This is a continuation of the current nursing home bed taxes.

HB 322 extends the Medicaid assessment of private hospitals that currently will expire at the end of Fiscal Year 2018 to the end of FY 2019, and increases the 5.5 percent assessment on private hospital net patient revenue to 5.75 percent of net patient revenue as a cost of doing business in the state.


JUDICIAL AND LEGAL REFORM

Economic Developer Ethics Clarification Goes to Governor

The Senate on Wednesday voting 15-14-1 passed an amended HB 317, the site selector ethics bill, sending it to the House. House members voted 52-22-22 to concur. Since the Senate had adjourned Sine Die Thursday prior to the House beginning debate on the bill by Rep. Ken Johnson, R-Moulton, the choice was to accept the Senate’s amendment or kill the bill for the session.

HB 317 states that a person acting as an economic development professional such as a site selector will not be considered a lobbyist. Its introduction and passage were greatly dictated by other states that did not consider its economic developers subject to lobbying restrictions that required public disclosure of clients.

In Alabama, lobbyists are required to register and list their clients. Should economic developers be required to list their clients, businesses seeking to locate projects in a state could avoid Alabama due to the initial secrecy required in the site location.

In recent weeks, various entities including the Attorney General’s office and the Department of Commerce have been negotiating a compromise that resulted in an amended HB 317. The bill clarifies that Alabama economic developers such as site selectors, industrial developers, and chamber of commerce officials will not be classified as lobbyists.

If classified as lobbyists, economic developers would have to reveal information that could endanger economic development efforts, which demand secrecy for competitive reasons until the last possible moment. The rule for professional economic developers includes exemption from registering with the state, undergoing yearly training, and reporting activity.

Data Notification Breach Bill Goes to Governor

The Senate on Tuesday voting 30-0 concurred with the House-amended version of the data breach notification bill, SB 318 by Senator Orr. The bill went to Governor Ivey for consideration.
Senator Orr tried several years to pass a bill. “Nonetheless, we now have this consumer protection law on the books and I appreciate Attorney General Steve Marshall’s tremendous help getting this legislation passed,” Senator Orr said.

Consumer protection data breach legislation is the result of ongoing discussions between interest groups that include the business community and the Alabama Attorney General’s office. The legislation will require businesses and other entities to provide notice to affected individuals upon a breach of security that results in the unauthorized acquisition of sensitive, personally identifying information.

Bill Increasing Authority of Banking Superintendent Sent to Governor

The Senate voting 24-2 passed HB 417 by Rep. Chris Blackshear, R-Phenix City, and sent it to the governor.

The bill will provide the Superintendent of Banks with substantial new authority over bank service providers. The bill aims to help police customer data security at third-party institutions that may handle banking data, as well as protect the stability of our financial system. Some concern was expressed about the scope of the bill and the potentially broad array of companies that could be affected.


LABOR AND EMPLOYMENT

Unemployment Compensation Change Dies in House

SB 92 by Sen. Orr died on the House calendar on the last day of the session. The Senate had passed it 21-8 on Jan. 25.

The bill would have reduced the maximum number of weeks that unemployment compensation benefits could be paid in a benefit year from the lesser of 26 weeks or one-third of the wages paid for insured work during the base period, to the lesser of 14 weeks up to a maximum of 20 weeks depending upon the state’s average unemployment rate or one-fourth of the wages paid for insured work during the base period. It would have increased the weekly benefit amount from $265 to $275 beginning Jan. 1, 2019.

SB 92 would have reduced costs to the Unemployment Compensation Trust Fund for benefit payments funded by employer contributions by over $50 million.


TAX AND FISCAL POLICY

Amended SSUT House Bill Passes

The Senate amended and passed HB 470 on a vote of 25-1 and the House followed suit, voting 96-0 on Wednesday to concur in Senate changes. The bill went to Governor Ivey’s office for consideration.

HB 470 would authorize an out-of-state vendor that is an eligible seller participating in the Simplified Sellers Use Tax Remittance Program that establishes a physical presence substantial nexus in this state only through the acquisition of an in-state business and thereafter meets the certain provisions may elect to satisfy the requirements to collect and remit tax for the out-of-state vendor’s Alabama sales by continued participation in the Simplified Sellers Use Tax Remittance Program.

Eligible sellers may deduct and retain a discount equal to 2 percent of the simplified sellers use tax properly collected and then remitted to the department in a timely manner, provided that for tax periods beginning on or after Jan. 1, 2019, the allowance for discount shall not apply to any taxes collected and then remitted which are in excess of $400,000.

Beginning on or after Jan. 1, 2019, net proceeds after the distribution to the Alabama Department of Revenue shall be distributed 60 percent to each municipality based on a ratio of population and 40 percent to counties based on population.

The Broadband Accessibility Act Becomes Law

Governor Ivey on Wednesday signed SB 149, the Alabama Broadband Accessibility Act sponsored by Sen. Scofield and in the House by Rep. Donnie Chesteen, R-Geneva. It authorizes the creation of a broadband accessibility grant program to be administered by the Alabama Department of Economic and Community Affairs.

“The Internet is vital to economic development, health, education, and to be honest, all areas of our modern life,” Governor Ivey said. “This commonsense legislation will help us attract new broadband to areas that need it most, especially in rural Alabama.”

Governor Ivey said more than 842,000 people in Alabama are without access to a wired connection capable of 25 mbps download speeds and more than 1 million have access to only one wired provider. Another 276,000 people in Alabama don’t have any wired internet providers available where they live.

“With this expansion we can see more growth in our economy, our residents can find better health care and there will be more opportunity for our students to learn,” Senator Scofield said.

Grants awarded by ADECA under this act may only be awarded for projects in unserved areas. A federal pilot program of grants and loans, through an effort led by U.S. Rep. Robert Aderholt, R-Haleyville, includes a $600 million Broadband Pilot Program. It will enable applicants to finance a project by combining loans and grants to provide broadband to eligible rural and tribal areas.”

Senate-Passed Transportation Bonding Authority Legislation Dies

The Senate had voted 27-2 to pass SB 86 by Sen. Dial, and it made it to the House calendar where it died at the end of the session. The bill would have established the Alabama Road and Bridge Rehabilitation and Improvement Authority, which would have been able to finance the rehabilitation and improvement of roads and bridges using bond issues payable solely from proceeds from any new levy of gasoline and diesel fuel excise taxes.

About Dana Beyerle

Dana Beyerle
Director of Communications
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