Week 2 of the 2018 Session

The House and Senate this week acknowledged Alabama’s unusually extreme winter ice and snow by cancelling Wednesday committee meetings and holding short sessions on Thursday. Both bodies are scheduled to return to Montgomery on Tuesday for the session’s fifth legislative day.

The Senate on Tuesday passed SB 98 by Sen. Arthur Orr, R-Decatur. It’s the economic incentive legislation for the $1.6 billion, Mazda-Toyota super-project in eastern Limestone County that was announced last week.

Senate President Pro Tem Del Marsh, R-Anniston, spoke at the Business Council of Alabama’s Tuesday briefing. Sen. Marsh said the 2018 regular legislative session will be shorter than usual but productive and will set the stage for important education and infrastructure issues in 2019.

Cleo Washington, chief of legislative affairs for AT&T Alabama, which sponsored the briefing, introduced Sen. Marsh. “It’s obvious he’s been great for business,” said Washington, a former Indiana state senator.

The House observed a moment of silence in memory of Rep. George Bandy, D-Opelika, who died Tuesday in a Georgia hospital after a short illness. Bandy was elected to the House in 1994.

The House honored the three Congressional Medal of Honor recipients living in Alabama on Tuesday, which had been designated as the day to salute military veterans.

At the end of the session’s second week, the Alabama House had filed 264 bills and the Senate 197.

The BCA 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.


Uniform Ridesharing Regulations Bill Reported by Committee

The Senate Tourism and Marketing Committee on Thursday voting 6-1 favorably reported SB 143 by Sen. Bobby Singleton, D-Greensboro, the uniform ridesharing transportation network company (TNC) regulation bill. It goes to the full Senate for consideration. (Singleton had a similar bill, SB 65, that was assigned to the Senate Transportation and Energy Committee, but he decided to go with SB 143.)

Several major cities and hospitality groups and individual entertainment venues are now supporting this legislation.

Companies such as Uber and Lyft operate in Alabama, but consumers and transportation companies are subject to a hodgepodge of local regulations, or none at all. SB 143 would provide for statewide regulation of TNCs under the Alabama Public Service Commission, with mechanisms for sharing fee revenues with localities and also allowing local governments to opt out of allowing TNCs to operate.

The House bill is HB 97 by Rep. David Faulkner, R-Birmingham, that was assigned to the Commerce and Small Business Committee.

Faulkner said his and Singleton’s bills are good for Alabama and have the potential to boost incomes and transportation in rural counties without public bus systems. Governor Kay Ivey said she supports uniform rules for ride sharing.


Toyota-Mazda Super-Project County Ad Valorem Tax Incentives Bill Passes

Sen. Orr’s SB 98 as amended authorizes counties to abate all or a part of the ad valorem taxes for certain qualifying projects under the Alabama Jobs Act, which create the specified number of new jobs pursuant to the Alabama Jobs Act, and have at least $50 million of anticipated capital expenditures in connection with development of property of a qualifying project.

The bill is in response to the announcement of a $1.6 billion joint venture by automakers Mazda and Toyota in eastern Limestone County 14 miles west of Business Council of Alabama member Toyota Motor Manufacturing Alabama’s engine plant.

Simplified Sellers Use Tax Hearing

On Wednesday, the Senate Finance and Taxation, General Fund Committee heard from supporters and opponents of SB 130 by Sen. Trip Pittman, R-Montrose, which would grandfather in current users of the Simplified Sellers Use Tax (SSUT) even after acquiring a physical retail presence in the state.

Specifically mentioned at length at the hearing was Amazon’s recent purchase of Whole Foods, which has five physical locations in Alabama.

The SSUT allows an eligible seller to collect, report, and submit sales taxes at a rate of 8 percent. Eligible participants, particularly Internet businesses that do not have a presence in the state, and which choose to participate, must collect, report, and remit the simplified sellers’ use tax for all sales. Fifty percent of the tax proceeds are divided between the General Fund and the Education Trust Fund on a 75 percent-25 percent basis. Of the remaining 50 percent, 25 percent is distributed to counties and 25 percent to municipalities.

At the hearing, city of Mobile officials expressed concern about the current program and the potential consequences of this bill beyond Amazon: specifically, existing brick and mortar stores with an online presence electing to participate in the SSUT rate, which is typically lower than local sales tax rates, both in overall rate and in the split that local jurisdictions would receive.

The Association of County Commissions of Alabama spoke in support of the bill, noting that Alabama has over 500 local tax jurisdictions and the SSUT allows for a fairer split of revenues to the counties and cities without a physical retailer presence that still receive deliveries from online orders made by residents.

No vote was taken on SB 130.

Committees Act on Two Infrastructure-Related Bills

The Senate Transportation and Energy Committee voting 8-0 favorably amended and approved SB 86 by Sen. Gerald Dial, R-Lineville. SB 86 would establish the Alabama Road and Bridge Rehabilitation and Improvement Authority, which would be 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.

The total bond issue could not exceed $2.45 billion. Of that amount, $1.25 billion would be earmarked to finance county and municipal transportation projects, and the remainder for state projects.

The bill also would permanently establish the Alabama Transportation Rehabilitation and Improvement Program (ATRIP) Committee created in 2016. That committee is charged with reviewing projects submitted by counties and municipalities and submitting to the authority those meeting the criteria for funding.

The House Transportation, Utilities and Infrastructure Committee on Thursday favorably approved a second infrastructure-related bill, HB 25 by Rep. Chris Pringle, R-Mobile. HB 25 would create a five-member state transportation commission whose members would be appointed by the governor from the five Department of Transportation regions. The commission would coordinate and develop the activities of the DOT as well as have the authority to select the DOT director.


BCA Executive Committee Member is Published in CPA Magazine

BCA executive committee member Tony Cochran, managing partner of CK Business Solutions in Albertville, is featured in a member profile in the current issue of Connections, the publication of the Alabama Society of CPAs, a BCA member. Cochran’s article begins on page 8.

ASCPA President and CEO Jeannine Birmingham is a member of the BCA board of directors.

CK Business Solutions is a traditional public accounting firm as well as serving as business advisors and executive coaches for clients. Cochran has been a member of the ASCPA since 1983.