This week’s Tuesday Briefing, sponsored by Vulcan Materials Co., featured Rep. Connie Rowe, R-Jasper, who discussed prison overcrowding and Medicaid funding. Rep. Rowe was introduced by Jeff Johnson, manager of lands and public affairs, Southern and Gulf Coast Division for Vulcan Materials Co.
The House and Senate met Tuesday, Wednesday, and Thursday this week, the 11th of the2016 regular legislative session that saw action on issues that are vital to Alabama business.
Both the 2016-17 Education Trust Fund budget and teacher pay raise bills that were assigned to conference committees received final approval and were sent to the Governor, who released statements in support. The 2016-17, $1.85 billion General Fund previously became law without the Governor’s signature.
The House and Senate will reconvene Tuesday on the 26th day of the session and plan to meet three days next week. The session cannot last beyond 30 legislative days.
House and Senate Give Final Passage to Education Trust Fund Budget
The House and Senate have now voted final passage of the 2016-17 Education Trust Fund budget and the teacher pay raise.
The House voted 100-0 on Thursday to concur with the Conference Committee report on HB 117, the 2016-17 ETF by Rep. Bill Poole, R-Northport. The Senate followed suit voting 32-0 for approval. Next year’s ETF budget will be the largest since the recession began in 2008 – a $6.3 billion spending plan for public schools and universities. This year’s ETF budget is $6 billion.
HB 117 includes the following funding increases for business-backed initiatives compared with this year: $16 million for Pre-K; $4 million for Student Assessment; $3 million for Teacher Mentoring; $2.3 million for At-Risk students; $2 million to recruit Career Tech instructors from the private sector; $1 million for Advanced Placement; $1 million for Distance Learning; $400,000 for Career Coaches; and $200,000 for Workforce Development.
A $16 million increase for Pre-K will add more than 150 classrooms and enroll an additional 2,700 4-year-olds. The proposed budget also would add 475 new teacher units in grades 7 through 12, “where they’re most needed,” Rep. Poole said.
Fully funding voluntary Pre-K is a BCA and Business Education Alliance of Alabama priority.
Many BCA recommendations can be found in the BEA’s report, “Teachers Matter.”
The budget also contains money for 4 percent raises for public K-12 school employees who make less than $75,000 per year and all two-year college employees. K-12 employees making more than $75,000 will get a 2 percent raise but an amendment would grant raises of 4 percent to principals and assistant principals no matter how much they make.
The authority for the pay raise is in HB 121 also by Rep. Poole. It, too, went to conference. The House voted 100-0 to concur in the conference committee report on Thursday and the Senate followed, concurring 31-1.
The Governor praised the House and Senate for final passage of both bills, an indication that he will approve them.
Senate Carries Over House Data Bill
After a debate, the Senate on Thursday carried over HB 125, which would create the Alabama Longitudinal Data System to match student performance and workforce data and administered by a newly created Alabama Office of Education and Workforce Statistics created within the Department of Labor.
The bill by Rep. Terri Collins, R-Decatur, also requires K-12 education, higher education, and junior colleges to define remediation.
Rep. Collins said HB 125 will greatly aid evaluating how well students do from early schooling to their first jobs and help Alabama move to the forefront of workforce development. The Alabama Workforce Council recommended this legislation and the BCA supports its passage.
Committee Approves Substitute Virtual Enrollment Funding Bill
The House Education Policy Committee substituted and favorably reported SB 229 by Sen. Dick Brewbaker, R-Pike Road. SB 229 would clarify that full time students will be treated the same as traditional students for enrollment and funding.
It also explicitly would allow expansion of virtual schools from K-8th grade and incorporation of the Alabama High School Athletic Association rules for athletics. Members were uncomfortable with the language and an amendment was adopted that would differentiate full-time virtual students from traditional students for the purpose of athletics. The bill could be in position to be debated by the House next week.
RCO Operating Deadline to Be Extended
The Senate Committee on Health and Human services voting 11-0 favorably reported SB 397 by Sen. Greg Reed, R-Jasper, and sent it to the Senate calendar.
SB 397 and its House companion, HB 530 by Rep. April Weaver, R-Alabaster, would grant the state Medicaid Agency the authority to extend the certification deadline for Regional Care Organizations beyond the current deadline of Oct. 1, 2016.
The extension is required because the RCOs won’t be operational by then under the current Medicaid appropriation for the 2016-17 fiscal year, Medicaid Commissioner Stephanie Azar told the Legislature’s interim Medicaid review committee on Wednesday.
Commissioner Azar appeared at the first of several planned hearings by legislators to learn about Medicaid, which receives more than one-third of the entire $1.85 billion General Fund budget. She narrated a slide presentation on Medicaid, a $6.1 billion federal-state program.
Governor Bentley asked for a Medicaid appropriation of $785 million for next fiscal year but the General Fund contains only $700 million, $15 million more than this year’s appropriation.
JUDICIAL AND LEGAL REFORM
House Committee Approves Prison Funding Bond Issue
The plan to borrow $800 million to build four new state prisons moved from the House Ways and Means General Fund Committee this week. The committee favorably reported SB 287 by Sen. Trip Pittman, R-Montrose.
The annual repayment on the borrowed $800 million would be about $50 million. The bond issue would be repaid every year with savings from consolidating prison operations into four new prisons – three for men and one for women.
House Ways and Means General Fund Committee Chairman Steve Clouse, R-Ozark, said he expects the bill to be voted on by the full House next week.
To help pay for a portion of the financing of the plan, the committee also approved HB 556 by Rep. Reed Ingram, R-Mathews, that would increase the auto title fee by $13 (to $28 from the current $15). According to the fiscal note, this bill would increase revenue to the state in excess of $19 million annually.
Senate Committee Passes Lawsuit Lending Regulation Bill
The Senate Judiciary Committee on Wednesday favorably reported HB 395, the Consumer Lawsuit Lending Act, by Rep. Chris Pringle, R-Mobile. The committee voted 7-4 to send the bill to the full Senate, which could take it up next week. The House previously passed the bill 86-6. Sen. Tom Whatley, R-Auburn, is carrying the bill in the Senate.
The BCA, working with the U.S. Chamber of Commerce’s Institute for Legal Reform, supports HB 395.
HB 395 would extend fair-lending laws and subject consumer lawsuit lenders to licensure requirements and to oversight by the State Banking Department.
Consumer lawsuit lending is the unregulated practice of loaning money at exorbitant interest rates to plaintiffs who might receive large settlements or judgments. Plaintiffs must repay lenders if any settlement or judgment is received and be subject to 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.
The bill has broad support among both Republicans and Democrats. In last year’s regular legislative session, a BCA-supported lawsuit lending bill passed the House on a bipartisan 98-1 vote. The Senate Judiciary Committee has now favorably reported the bill three times.
BCA Applauds Legislature for Passage of Bill Providing Tax Relief for Small Business Hiring
The House on Wednesday voted 100-0 to concur with the Senate-amended version of the Alabama Small Business and Agribusiness Jobs Act. The bill went to the Governor for his consideration.
HB 36 by Rep. Kyle South, R-Fayette, authorizes a tax credit of $1,500 per employee for a small business that hires a new, full-time resident of Alabama in a job that pays at least $40,000 a year.
The bill defines a small business as having 75 or fewer employees, is qualified to do business in Alabama, and is headquartered in or has its principal place of business in the state. The bill also authorizes an additional $1,000 tax credit for hiring a recently deployed and unemployed veteran of the U.S. Armed Services.
The Senate voting 29-0 approved the bill that contains a sunset provision requiring the tax credit to expire on Jan. 1, 2019, unless the Legislature decides to extend the credit.
HB 36 is a part of the BCA’s 2016 legislative agenda. It also is a priority of the House Republican Caucus, which recognizes that small businesses have created more than 65 percent of new jobs over the past 20 years nationally.
“Small businesses are the economic engine of Alabama,” said BCA President and CEO William J. Canary. “The Business Council of Alabama recognizes that small businesses provide the majority of jobs for Alabamians, and we applaud the Legislature for recognizing the need to provide small businesses looking to add jobs with the necessary incentives they need.”
Bill Filed to Provide Property Tax Relief for Small Business Startups
Rep. Nathaniel Ledbetter, R-Rainsville, has filed HB 511, the Alabama New Small Business Employer Ad Valorem Tax Abatement Act. HB 511 was assigned to the House Ways and Means General Fund Committee. Rep. Ledbetter’s bill would allow any new Alabama small business that is organized after Oct. 1, 2016, to apply for abatement against state and local property taxes.
The tax abatement would be allowed for two years but would not be allowed to decrease a business’s tax liability to less than zero in any tax year. The tax abatement is not transferable or refundable. In order to qualify, the business must be headquartered in Alabama and have 50 or fewer employees during the tax year in which the tax abatement is claimed.
TAX AND FISCAL POLICY
Committees Approve Bills Limiting Local Government Use of Third-Party Collecting Firms
Voting 9-0 on Wednesday, the Senate County and Municipal Government Committee favorably reported SB 335 by Sen. Paul Sanford, R-Huntsville. The House State Government Committee favorably reported the House version, HB 375 by Rep. Paul Lee, R-Dothan.
These bills would help restrict aggressive third-party auditing and collecting firms from mistreating businesses when it comes to the collection of local sales and use tax and protect businesses from becoming overburdened by the audit process.
The bills would add specific requirements and disclosures that would have to be made by third-party auditing and collecting firms when they are contracted by a municipality or county. They include certain confidentiality requirements, requiring the taxing authority to use an independent hearing and appeals officer, and requiring a public official or employee of the local government to sign the final assessment.
House Committee Votes to Carry Over BP Settlement Bond Issue Legislation
After the Senate voted 30-5 to pass SB 267, the Alabama Strategic Investment Initiative bill by Sen. Bill Hightower, R-Mobile, the House Ways and Means General Fund Committee this week voted to carry over the bill at the call of the chair.
SB 267 is a constitutional amendment that would ask voters to create an authority to sell revenue bonds backed by Alabama’s $1 billion Deepwater Horizon Oil Spill Disaster Settlement, allowing the state to invest in critical transportation projects around the state and repay the $161.5 million debt to the General Fund Rainy Day account.
BCA supports passage of SB 267.
Historic Tax Credit Bill Declared Dead by Senate Leader
Because the Alabama Senate has refused to consider HB 62 by Rep. Victor Gaston, R-Mobile, the Historic Tax Credit will expire in May. HB 62 as amended would extend tax credits for rehabilitating qualified structures for seven years, until 2022.
Despite the widespread support for the bill and the evidence that it has spawned downtown revitalization and job creation, the Alabama Senate effectively has killed the legislation this session by not taking the House bill out of the basket.
Senate President Pro Tem Del Marsh, R-Anniston stated this week in an article on AL.com, “I am not convinced the credits are advantageous to the state,” Marsh said. “I want to make sure we are creating a program that (doesn’t just benefit) large corporations and big developers.”
The BCA is a member of a coalition advocating for this important legislation. Learn more about how extending this tax credit benefits Alabama at advancealabama.org.
Senate Committee Votes Down Taxpayer Advocate Bill
On Wednesday, the Senate Finance and Taxation Education Committee voted 10-1 to not give HB 38 a favorable report. If passed, the bill would have shifted the authority to appoint the Department of Revenue taxpayer advocate from the Revenue Commissioner to the Governor and would have required the advocate to compile a report on potential ambiguities in the state’s tax laws and to maintain a website providing information to taxpayers.
The advocate would have been charged with the responsibility of promoting the interests of taxpayers when ambiguities in the law or tax policy arise, recommending solutions to the Legislature, and meeting with the legislative budget chairs annually. HB 38 would have provided more autonomy to the position and ensured that the advocate is a true champion for taxpayers when disputes arise.
BCA’s Leah Garner Appointed to Health Literacy Partnership of Alabama
Governor Bentley has appointed BCA Director of Governmental Affairs and Advocacy Leah Garner to the Health Literacy Partnership of Alabama, which he created by executive order on April 20. Ms. Garner (third from right) and other members of the Partnership are charged with recommending to the Governor “ways to improve the health literacy of Alabamians. Recommendations may take the form of regulatory or statutory changes, with initial recommendations due before the start of the 2017 regular session of the Alabama Legislature.”
“Congratulations to Leah Garner for the Governor’s appointment to the Health Literacy Partnership of Alabama,” BCA President and CEO William J. Canary said. “The people of Alabama can be assured that Ms. Garner will serve the Partnership well and contribute to the health literacy of Alabama.”
(Photo: Governor’s Office, Daniel Sparkman)