Week 5 of the 2018 Session

The Business Council of Alabama board of directors met Wednesday for its first meeting of 2018 and voted unanimously to approve a resolution commending Alabama’s senior United States senator, Richard Shelby of Tuscaloosa, for his exemplary service to the state of Alabama. He has been instrumental in the state’s military, space, commerce, and overall business development efforts for three decades.

“Senator Shelby has always conducted himself on the national stage in a way that reflects the values, decency, and strength of the people of Alabama,” BCA Chairman Perry Hand said.

Following the board meeting, Governor Kay Ivey and more than 400 legislators, BCA members, statewide office holders, or guests, attended the annual Saluting Leaders of State Government reception.

Senate Finance and Taxation Education Committee Chairman Arthur Orr, R-Decatur, (pictured above) this week was the Business Council of Alabama’s Governmental Affairs Committee Tuesday Briefing speaker.

Jeremy Arthur, president and CEO of the Chamber of Commerce Association of Alabama (CCAA), which sponsored Tuesday’s briefing, introduced Sen. Orr.

Senator Orr sponsored SB 92, which would update Alabama’s unemployment compensation law and could save businesses at least $56 million a year in lower unemployment compensation premiums.

The Senate passed the bill and sent it to the House Committee on Commerce and Small Business. It would reduce the maximum number of weeks that unemployment compensation benefits could be paid for any benefit year beginning on or after Jan. 1, 2019, from the current maximum of 26 weeks, among other provisions.

A House committee favorably reported the 2018-19 Education Trust Fund budget and associated budget bills, including a teacher pay raise and supplemental appropriations. The bills are on the House special-order calendar next week.

On Tuesday, Governor Ivey signed the Toyota-Mazda tax incentives bill, SB 98 by Sen. Orr, into law.

Through the ninth legislative day, the Senate has introduced 299 bills and the House, 400.


Education Bills Including Budget and Pay Raise Advance

The House Ways and Means Education Committee on Wednesday favorably reported numerous education-related bills including a substituted HB 174, the teacher pay raise, and HB 175, the 2018-19 Education Trust Fund budget.

HB 175 is the $6.63 billion education budget for next year. The bill’s sponsor is Rep. Bill Poole, R-Tuscaloosa. The Legislative Fiscal Office estimates that the ETF’s growth will be about 3.4 percent, an increase of $216 million.

Just under half of the growth will pay for the 2.5 percent pay raise for education employees in the state’s K-12 schools and community colleges. For a rank-and-file teacher with a four-year degree, his or her pay is expected to increase just under $1,000 a year. Teachers got a 4 percent pay raise in 2016 but they also saw increased benefit costs. The bill also includes the authority to hire nearly 197 teachers in the fourth through sixth grades.

The ETF bill includes an additional $20 million for the state’s First-Class Pre-K program, from $77 million to $97 million, and fund an additional 142 classrooms serving 2,556 students. Another $5 million will restart the valuable Alabama Reading Initiative, a program supported by the BCA and Governor Kay Ivey.

The budget includes an additional $200,000 for Advanced Placement; $750,000 for teacher professional development; $300,000 for agribusiness education; $1.5 million for National Board Certified Teachers, with language that teachers receiving this accreditation and work in-hard-to-staff content in At-Risk areas would receive an additional $5,000 a year in addition to the $5,000 pay increase for earning national board certification.

The Science and Math teacher mentoring program would get another $400,000 and At-Risk, an additional $1 million. The proposed budget includes an additional $1.9 million for technology coordinators.

Four-year colleges would see increases. Overall, state funding for four-year colleges and universities would increase $37 million, to $1.12 billion, or 3.4 percent. Funding for community colleges would increase by $16.2 million, to $380.1 million, an increase of 4.4 percent.

Other education bills that advanced to the House calendar this week include HB 179 and HB 180, both sponsored by Rep. Poole.

HB 179 requests supplemental appropriations of $2 million to the Alabama Community College System, $15.2 million to colleges and universities, and $41.2 million to the Department of Education, the Alabama Institute for Deaf and Blind, the Youth Services School districts, the Alabama School of Fine Arts, and the Alabama School of Math and Science.

HB 180 would make supplemental appropriations of $4.3 million to the Department of Veterans’ Affairs and $500,000 to the Alabama School of Cyber and Engineering, and would allow the Alabama Community College System to carry-over unused appropriations from this fiscal year to FY 2019.

Senate Passes Education Savings Account Bill Update

SB 189 sponsored by Sen. Dick Brewbaker, R-Pike Road, is similar to previous education savings account bills that are supported by the BCA and other school-choice advocacy groups.

The Senate on Thursday voted 26-0 to pass SB 189, which would update the existing Wallace-Folsom Savings Investment Plan law that authorizes the Achieving a Better Life Experience Program (ABLE), the Alabama College Education Savings Program (ACES), and the Alabama Prepaid Affordable College Tuition Program (PACT).

SB 189 would authorize a contribution to, and continued investment in, an ACES or ABLE program savings account for a designated beneficiary by the guardian or conservator of the designated beneficiary. This bill would also conform the applicable code sections to recent amendments to Section 529 of the Internal Revenue Service Code.

A 529 savings plan is a qualified tuition program, sponsored by a state or state agency, and designed to give families a tax-advantaged way to save for college. A 529 college savings account provides federal tax advantages, potential state tax benefits, account control, and investment flexibility.

Savings can be used at eligible institutions for tuition, fees, books, supplies, and equipment required for enrollment. Room-and-board would be a qualified education expense if the student is enrolled at least half-time.


House TNC Bill Gets Committee Nod

The Senate Tourism & Marketing Committee on Wednesday unanimously favorably reported HB 190, the Transportation Network Companies (TNC) bill sponsored by Rep. David Faulkner, R-Birmingham.

HB 190 would authorize the Public Service Commission to create uniform, statewide regulations governing TNCs such as Uber and Lyft, and for those companies to secure permits from the Public Service Commission, and maintain agents for service of process, maintain certain records, implement a non-discrimination policy, and require drivers and vehicles to meet certain safety and consumer protection requirements.

In addition, TNCs would be required to collect a 1 percent assessment fee based on each ride fare for the PSC, which would remit a portion of it to local governments where a ride originates. Local governments would not be allowed to levy any fee.

Single-Request Tax Refund Bill Leaves House Committee

SB 63 by Sen. Steve Livingston, R-Scottsboro, which passed the Senate 22-0 and received a favorable report by the House Ways and Means Education Committee, was placed on the House calendar on Thursday ready for consideration by the full House.

SB 63 would eliminate the current requirement that petitions for tax refunds be jointly filed by a taxpayer and the consumer/purchaser and replace it with a single-petitioner refund request authorization by the person who paid the tax directly to the licensed seller.

Senate Bill to Capitalize Transportation Infrastructure Bank Advances in House

Following a favorable report by the House Transportation, Utilities & Infrastructure Committee, SB 100 by Sen. Orr was placed on the House calendar. SB 100 would capitalize the existing Alabama Transportation Infrastructure Bank by allowing the appropriation and pledge of certain gas tax revenues, license and registration fees, diesel fuel tax revenues, motor carrier tax revenues, and identification marker fees.

A seven-member board of directors would be established to govern the bank, which would include the director of the Alabama Department of Transportation, the state Finance Director, three members appointed by the governor, one member appointed by the Speaker of the House, and one member appointed by the Senate President Pro Tem.

This bill would also allow certain local governments to obtain bonds for transportation projects through the state. The state would be allowed, using its AA bond rating, to back bonds of some counties with higher bond ratings, such as an A rating, giving them a better repayment rate.