Week 1 of the 2018 Session

The House and Senate convening for the 2018 regular legislative session on Tuesday immediately went to work in anticipation of adjourning sine die earlier than usual in order to begin campaigning for the June party primaries. All 140 legislative seats are up for election this November as well as the governor, constitutional officers, and some appellate court seats.

The Business Council of Alabama is monitoring and acting on the business community’s legislative agenda that includes infrastructure investment preparation for 2019, education, health care, legal reform, tax and fiscal policy issues.

At the end of the first week, the Alabama House had filed 202 bills and the Senate 171.

Governor Kay Ivey delivered her State of the State address on Tuesday, declaring the ship of state is now on a steady course.

Governor Ivey the next day joined Mazda and Toyota officials in announcing a $1.6 billion joint venture to produce a Mazda crossover model and the venerable Toyota Corolla at a new manufacturing facility that will employ 4,000 men and women 14 miles west of BCA-member Toyota Motor Manufacturing Alabama’s engine plant in Huntsville.

The Senate got to work on an incentive package for the venture with committee approval and a second reading of legislation to grant tax relief to the joint venture. (See OTHER NEWS section.)

House Speaker Mac McCutcheon, R-Huntsville, spoke at the BCA’s Tuesday briefing, the first of the 2018 regular legislative session. He reiterated his support for a pro-business agenda affecting taxes, jobs, and education will continue.

Speaker McCutcheon was introduced by Jeff Rabren, senior vice president, state government affairs & economic development director for Regions Financial Corp., the sponsor of Tuesday’s briefing.

The House and Senate are scheduled to return in session on Tuesday for the third legislative day. A regular legislative session cannot last longer than 30 working days within 105 calendar days.


Childhood Education Department Secretary Position Qualifications Tweaked

The House Education Policy Committee on Wednesday favorably reported HB 71 by Rep. Terri Collins, R-Decatur, that would modify the Department of Early Childhood Education by adding qualifications for the secretary position in order to be considered a candidate, since early childhood is a specific education training in order to keep our Pre-K program ranked highest in the country.

The BCA supports this legislation.

Speaking of education, Alabama’s public schools got a C-plus from the latest school system report cards.

The Legislature began requiring state, district, and all schools in 2012 to provide report card information but implementation was delayed. AL.com reported the state’s grade but the public won’t see individual school and system grades until Feb. 1. Here’s a link to the prototype.


State Unemployment Benefit Bill Introduced

Sen. Arthur Orr, R-Decatur, has introduced SB 92 to change the state unemployment formula and decrease the number of weeks unemployment benefits would be paid, from the current 26 weeks to 14 weeks, or up to a maximum of 20 weeks based on the average state unemployment rate.

The Senate Fiscal Responsibility and Economic Development Committee favorably reported the bill on a vote of 12-0 and sent it to the Senate Calendar where it’s in position to be considered on Tuesday.

Eligible recipients could get an additional five weeks of benefits if enrolled in a job training or certification program authorized by the Department of Labor. The bill if it becomes law would increase the weekly unemployment benefit from $265 to $275 on Jan. 1, 2019.


House, Senate Transportation Bills Would Establish Uniform Operating Regulations

Bills to create uniform transportation network regulations for companies such as Uber and Lyft have been introduced, continuing discussions that began last year to protect consumers and transportation companies from having to deal with a hodgepodge of local regulations, or none at all.

Rep. David Faulkner, R-Birmingham, introduced HB 97 that was assigned to the Commerce and Small Business Committee. Sen. Bobby Singleton, D-Greensboro, introduced the companion bill, SB 65. It was assigned to the Senate Transportation and Energy Committee.

Faulkner said the bills are good for Alabama and have the potential to boost incomes and transportation in rural counties without public bus systems.

“Having consistent rules statewide for ride sharing is the sensible way to give Alabamians access to safe, consistent and efficient transportation options,” Governor Ivey said.


Rural Broadband Legislation Is Introduced

Road transportation infrastructure measures can benefit rural Alabama but there are other types of infrastructure measures

Sen. Clay Scofield, R-Guntersville, says he plans to introduce legislation to spur information transportation benefits to rural parts of the state by introducing broadband development legislation that incorporates tax incentives for providers.

His legislation, SB 149, would exempt broadband telecommunications network facilities from taxation for 10 years, exempt equipment and materials used by those facilities from the state’s sales and use tax, and would offer an income tax credit equal to 10 percent of the investment in those facilities, Yellowhammer reported.

Tax credits would be capped at $20 million per company, an amount that would require an investment of $200 million in rural Alabama, Senator Scofield said. He introduced similar bills in 2016 and in 2017. He’s hopeful that broadband initiative will get traction because of Governor Ivey and President Trump’s mention of it.

“Adequate broadband enhances educational opportunities, increases economic development prospects and develops critical communication systems,” Governor Ivey said.

Scofield said that rural broadband needs tax help because the return on investment isn’t there in sparsely populated regions that require costly infrastructure.


Positive State Income Tax Changes Proposed

Alabama Senate Republicans are proposing an income tax cut as part of their agenda for the 2018 session, the caucus announced.

A tax cut bill, SB 76 by Senator Marsh, was referred to the Senate Finance and Taxation Education Committee. He said the tax cut will target the middle class by allowing more people to claim the maximum standard deduction.

Under this legislation, more Alabama taxpayers would qualify for the full standard deduction, with qualifying adjusted gross income increasing from $20,000 to $23,000. At $23,000 or lower, most filers could claim the total deduction. Above $23,000, the deduction would gradually decline. “It’s a tax break for working class Alabamians,” Senator Marsh said.

The GOP caucus said it will also seek incentives to companies to develop broadband access in rural Alabama and encourage work requirements for able-bodied Medicaid recipients.


New Automaker Joint Venture Announced, Incentive Package on Fast Track

One of the big winners of the announced Mazda-Toyota joint venture for eastern Limestone County has to be the Greenbrier Restaurant located just south of the new venture’s megasite off Greenbrier Road near Interstate 565. The late actor Patrick Swayze and rock stars would frequent the restaurant famous for its white sauce and other barbecue items.

Governor Ivey and Japanese automakers Toyota and Mazda this week announced the $1.6 billion joint-venture that will eventually employ about 4,000 people. The company said it will build 300,000 vehicles per year, half of them a new Mazda SUV and the other half the venerable Toyota Corolla after the plant comes online by 2021.

“This is indeed a great day in Alabama,” Governor Ivey said.
“I’d like to express our sincere appreciation for the people of Alabama and Huntsville for their support,” said Masamichi Kogai, CEO and president of Mazda Motor Corporation.

Akio Toyoda, president of Toyota Motors, said the new facility is a homecoming of sorts since the company already has one plant in the state, the Associated Press reported. The new plant will be 14 miles west of BCA-member Toyota Motor Manufacturing of Alabama’s engine plant.

The Senate Finance and Taxation Education Committee favorably reported SB 98 by Sen. Arthur Orr, R-Decatur, that would grant certain tax credits by authorizing counties to adjust ad valorem taxes for megaprojects. The Senate could consider the bill as early as Tuesday.

Mazda-Toyota joins Mercedes Benz, Honda, and Hyundai vehicle manufacturers, and the Toyota engines plant, that have located in Alabama since 1993.