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June 1, 2012 


2012 Session yields positive
legislation for business

Alabama businesses will reap the benefits of much positive legislation from the recently concluded regular session of the state legislature, as bills were passed to streamline the filing of business taxes, provide incentives for job creation in the coal-mining, data processing and aerospace industries, stiffen penalties for metal theft, and make strides toward improvement in public education, among others.

 

"We are pleased that the Alabama Legislature has built upon the progress begun in the 2011 session," said BCA President and CEO William Canary. "The businesses that we represent every day will benefit from the pro-growth policies reflected in the legislation passed and signed into law by Gov. Bentley."

 

House Speaker Mike Hubbard called the session a "major success," and added, "The days of the 'do-nothing' Legislature in Alabama are over."

 

A number of bills on BCA' s Legislative Agenda were passed and enacted into law, and once again, no anti-business, job-killing legislation was approved.

 

A summary of major bills BCA monitored throughout the regular and special session follows in this special wrap-up edition of BCA Capital Briefing. Specific legislation supported or opposed in BCA's 2012 Legislative Agenda is listed in the first portion of the briefing. For more information, contact Anita Archie, 334-240-8775 or anitaa@bcatoday.org

 

 


Revisions to immigration law make compliance less burdensome for businesses, but penalties harsher

 

Gov. Bentley signed HB 658, enacted as Act #2012-491, which makes several changes to the state's immigration law (HB56/Act 2011-535) passed just one year ago. Several changes make compliance with the law less burdensome on businesses and employers; however, others make the penalties for noncompliance harsher. This document compares HB 56 (the 2011 immigration law) and HB 658.

 

For more information, contact Anita Archie, 334-240-8775, or anitaa@bcatoday.org.

 

 

BCA's 2012 Legislative Agenda supported clarification of the immigration law "to ensure that immigration laws impacting Alabama businesses do not impose additional burdens on, or penalize, Alabama employers."

 

'Guns to work' bills
die on Senate floor

SB 331, Sen. Paul Sanford, R-Huntsville, would have prohibited a public or private employer, property owner, or business from establishing a policy against transporting or possessing a firearm or ammunition if the person was in compliance with other laws.

 

The bill would have made it illegal for an employer or private property owner to establish a policy prohibiting anyone from bringing a gun onto that person's property. Anyone denied the opportunity to transport or store a firearm or ammunition or who is fired for violating a company policy would have been able to sue a business, property owner or public or private employer, for violating the act.

 

Late in the session SB 331 was debated by the full Senate, but a vote was never taken.

  

SB 337, by Sen. Scott Beason, R-Gardendale, would have authorized a person to carry a pistol in his or her vehicle or private property without a concealed pistol permit.

 

While the Constitution protects a person's right to bear arms, eliminating the need for a permit is a safety issue. If permits are no longer required, officers would have no way to determine whether a person is a convicted felon or presents another form of danger. The bill came up for debate on the Senate floor late in the session, but the bill sponsor agreed to carry it over when several senators expressed concern.

 

Unemployment compensation  

fraud law strengthened

HB 72, by Rep. Paul DeMarco, R-Homewood, enacted as Act #2012-292, provides that a person who fraudulently receives unemployment compensation benefits will be subject to disqualification of future benefits. A first offense will result in 52 weeks of disqualification. Subsequent offenses will prevent violators from receiving unemployment compensation for 104 weeks. Violators will also be required to repay the fraudulently received benefits, plus interest, and will not be eligible for future benefits until the debt is paid. The new law makes unemployment compensation fraud just as punishable as theft of property.

  

    

Change in unemployment compensation   

law expected to save state money

 

SB 300, by Sen. Trip Pittman, R-Daphne, and companion bill HB 285, by Rep. Jack Williams, R-Birmingham, enacted as Act #2012-299, establishes a one-week waiting period during the first compensable week of unemployment compensation benefits for individuals seeking unemployment benefits. The bill amends current law which applies a one-week waiting period after the 13th compensable week of paid unemployment benefits. Individuals will be able to receive benefits for 26 consecutive weeks beginning with the second compensable week.

 

The new waiting period will save the Unemployment Compensation Trust Fund between $11 million and $14.5 million in the first year, according to the Alabama Department of Industrial Relations.

 

BCA's 2012 Legislative Agenda supports legislation to decrease fraud in unemployment compensation workers' claims, and opposes expanding unemployment compensation benefits that would incur increased taxes on Alabama business. 

   

Charter school legislation
will return next year

SB 513 by Sen. Dick Brewbaker, R-Pike Road, was the school flexibility and charter school bill introduced this year. It was the first step in an effort to allow new opportunities for parents when their children attend consistently failing schools. The law as originally intended would have allowed for the creation of a limited number of charter schools around the state. Charter schools are public schools allowed freedom to teach in innovative ways while being held accountable for higher standards and achievement. Charter schools are not the single solution to all of Alabama's education problems; however, they are another tool in the education reform arsenal that will help reduce the dropout rate and prepare students to enter the workforce.

 

After the bill made it through the Senate Education Committee and the full Senate, it was a watered-down piece of legislation that would have made it virtually impossible to open a charter school in Alabama. Not only did it restrict charter schools to the state's four most populous counties, it required the unanimous consent of every legislator in the county's delegation. After passing the Senate late in the session in this watered-down form, it went to the House Ways & Means Education Committee where Rep. Phil Williams, R-Huntsville, sponsor of the House version, asked that it be carried over, essentially killing the bill for the remainder of the session. Williams did make it clear he wanted a better charter school bill and he would be back in 2013 to push for it again.

 

Following the committee meeting, BCA President and CEO William J. Canary spoke passionately of Alabama's advances in the education reform movement and said BCA would support the charter school bill next year. "Twenty months ago, we would not have even been able to have a conversation about any education reforms," Canary said. "The bill may not have passed, but we finally have a Legislature that is willing to spend a significant amount time discussing reforms to our education system. The BCA looks forward to this discussion in the 2013 legislative session."

 

BCA's 2012 Legislative Agenda supported enacting legislation allowing public charter schools in Alabama. 

 

 'Agreed-upon' gross income fix is law

A longstanding issue involving the Alabama Department of Revenue and resident owners/members/partners of "pass-through" entities that do business in and outside of Alabama has been resolved with the passage of HB 286, by Rep. Jay Love, R-Montgomery, enacted as Act # 2012-27. This compromise legislation, which originally died on the last night of the 2011 regular session, requires the taxpayer to recognize his/her share of the entity's income from all sources worldwide, with the taxpayer receiving credits for 100 percent of entity-level, income-like taxes paid to other states and receiving a 50 percent credit for income taxes paid to foreign countries, to avoid double taxation on the same income.

  

For years, the BCA, along with the other members of the Business Associations Tax Coalition or BATC, has advocated for this legislation as an equitable solution that provides these taxpayers more certainty in tax planning.

  

Single-point of filing: Common sense application of technology to promote tax compliance

SB 549, by Sen. Slade Blackwell, R-Mountain Brook, enacted as Act #2012-279, establishes the ONE-SPOT system, an electronic single-point filing system administered by the Alabama Department of Revenue for taxpayers to file state and local sales, use and rental/lease tax payments.  

  

The bill sets up an eight-member Advisory Commission, comprised of three members from county government, three members from municipal government, a representative from the BCA and a representative from the Alabama Retail Association, to advise the commissioner of revenue on the development and operation of the system. The bill further requires local governments to provide tax rate information and to provide updates as needed.

  

BCA's 2012 Legislative Agenda supports streamlining and simplifying our sales/use tax system to provide a single point of filing for state and all local sales and use tax returns. 

   

Drafting errors lead to pocket veto of tax appeals commission bill; Bentley pledges support in future session

  After working for several years to enact legislation to provide for an independent tax appeals tribunal, Alabama business associations will have to try once more, as Gov. Robert Bentley opted not to sign SB 549, by Sen. Ben Brooks, R-Mobile. On the final day of the 2012 regular session, the bill was referred to a conference committee to resolve differences between the versions passed by the two chambers, but in the last-minute rush the wrong version of the bill was used to draft the compromise bill. The drafting errors were unintentional but were deemed to be too significant for the governor to sign into law.

  

Both SB 549 and its companion, HB 105, by Rep. Paul DeMarco, R-Homewood, were in position to pass the opposite chamber on the final day. The bills provided for an independent tax appeals tribunal that is the model used by more than 30 states, with Georgia being the latest to adopt. Other sections pertaining to the Alabama Taxpayers Bill of Rights update and conform state law to the procedures and provisions used by the federal government to equitably deal with taxpayers. Under the auspices of the Business Associations Tax Coalition (BATC), the BCA is among some 27 business and trade associations that have endorsed this bill.

  

The governor pledged to include the legislation in any special session that he might call before the regular session in February 2013, and assured the interested parties that he would support its passage.

  

We thank Sen. Brooks and Rep. DeMarco for working tirelessly to shepherd the bills through the entire process. Supporters are urged to maintain their resolve and continue to advocate for this legislation that provides a sound statutory framework for independent and equitable state-local tax administration.

 

BCA's 2012 Legislative Agenda supports both creation of the Alabama Tax Appeals Commission and the Alabama Taxpayers' Bill of Rights. 

 

Metal theft now a felony 

HB 278, by Rep. Bill Poole, R-Northport, enacted as  Act #2012-426, classifies the theft of certain metal property as a felony, including telephone, cable and power lines and poles, railroad materials, manhole covers, grave markers and any other metal property taken from a school or church.

 

Cash transactions will be limited to no more than $50 for copper, air conditioning coils and catalytic convertors. Persons younger than 18 will not be allowed to sell metal property, and metal property can only be purchased between 6:00 a.m. and 9:00 p.m. The new law will also require scrap metal recyclers to register with the Alabama Criminal Justice Information Center (ACJIC) and transmit electronically all of their business transactions to the database each day. Only properly authorized law enforcement agencies will be able to access this data.

 

BCA's 2012 Legislative Agenda supports efforts to address the problem of metal theft crimes.    

 

Law aims to curb meth manufacturing

HB 363, by Rep. Blaine Galliher, R-Gadsden, enacted as Act #2012-237, seeks to clamp down on the manufacture of methamphetamine in Alabama while still allowing persons to purchase over-the-counter products containing ephedrine and pseudoephedrine such as common cold and allergy medications.

 

HB 363 is an alternative to requiring these products to be available by prescription only. Requiring employees to take time off work to obtain a prescription from a physician for these medications would lead to higher health insurance costs for employers and a loss of employee productivity. The BCA worked with legislators, law enforcement, and the District Attorney's Association to make changes to the existing law that would not penalize consumers who purchased these products for lawful reasons while also providing tracking mechanisms beneficial to law enforcement seeking out those who purchase products containing pseudoephedrine to manufacture meth.

 

BCA's 2012 Legislative Agenda opposes making pseudoephedrine available to Alabama residents by prescription only because it would increase health care costs and lessen employee productivity.  

Law gives more liability protection for roadbuilders

SB 139, by Sen. Clay Scofield, R-Guntersville, enacted as Act #2012-225 and actively supported by the Alabama Roadbuilders Association, provides additional liability protection for road builders without shifting responsibility to counties. The new law limits the liability of a road contractor for physical injury, property damage, or death for work performed on a highway, road, bridge or street on behalf of the Alabama Department of Transportation, the county or local government unless evidence shows that an incident was caused by the contractor's performance or inability to recognize a dangerous condition. The new law also provides that a contractor must notify the Department of Transportation if he discovers before or during construction that the plans and specifications could result in a potentially dangerous condition. 

 

BCA's 2012 Legislative Agenda supports legislation providing additional liability protection for Alabama businesses.

Other bills of interest

Capital credits extended

HB 140, by Rep. Micky Hammon, R-Decatur, enacted as Act #2012-385, allows businesses that qualify for the state's income tax capital credits to carry forward the credits from one year up to four additional years, depending on the amount of the capital investment, but not to exceed the original total of 20 years. An Alabama Department of Revenue report on the actual utilization of the capital credits shows that significant portions of the credits are not taken because many companies are not profitable in their early years of operation.

 

New Markets Development Act to promote investments in low-income communities

HB 257, by Rep. Jamie Ison, R-Mobile, enacted as Act #2012-483, authorizes tax credits on the state's share of certain taxes for investments made in qualified community businesses in low income communities. Alabama joins states such as Florida, Mississippi and Illinois that have state New Market Development Programs, which are modeled after the New Market Tax Credit Program established by Congress in 2000. The federal program promotes investments in businesses and real estate projects located in low income communities. Adding the state tax incentives to the federal incentives provides community leaders an effective tool for revitalizing low income census tracts in downtown core areas and central business districts. The bill caps the credit at $10 million per each qualified active low-income community business, sets an aggregate cap of $20 million annually and limits the taxpayer's credit to not more than the taxpayer's state tax liability.

 

Incentives expanded
for the entertainment industry

HB 243, by Rep. Terri Collins, R-Decatur, enacted as Act #2012-212, expands the incentives offered for film productions shot in Alabama. The law increases the cap on the size of film projects that may be recouped by rebates from $10 million to $20 million and increases the aggregate annual cap on film incentives from $10 million to $20 million in FY 2015. According to proponents of the bill, Alabama received only a small portion of its potential share of film projects because of limitations under prior state law.

 

Incentives enacted for aerospace industry

HB 39, by Rep. Paul Lee, R-Dothan, enacted as Act #2012-185, provides an exemption from state sales/use taxes on parts, components and systems incorporated into the refurbishment of certified military, government or commercial transport fixed-wing or rotary wing aircraft. The bill is intended to remove a competitive disadvantage experienced by Alabama companies that refurbish aircraft relative to their competitors in other states, where the parts used in such conversions are tax-exempt. The bill includes a provision that will terminate the tax exemption on May 30, 2022.

 

'Heroes for Hire' jobs bill salutes veterans

HB 152, by Rep. DuWayne Bridges, R-Valley, enacted as Act #2012-168, provides an additional $1,000 tax credit to employers that hire unemployed military veterans who were recently deployed and are now discharged from military service. The bill further provides that the unemployed veteran will be allowed a nonrefundable credit of up to $2,000 for expenses related to a start-up business in which he or she owns at least a 50 percent interest.

 

Incentives expanded to attract data processing centers; distribution centers must add at least 50 jobs

HB 154, by Rep. Dan Williams, R-Athens, enacted as Act #2012-210, reduces from 50 to 20 the minimum number of new jobs that must be created for a data processing center to qualify for tax abatements and capital credits. The bill also provides that the term of abatements for data processing centers may be extended, based on several capital investment thresholds, from the current maximum of 10 years, to up to 30 years. This bill also extends the capital credits to certain warehousing and storage activities that provide at least 50 new jobs and have a capital investment of at least $5 million in non-favored geographic areas or at least $1 million in favored (economically distressed) areas of the state. This provision will keep the state in play for attracting several prospective distribution center projects.

 

Incentives for coal industry scaled back but still expected to be effective

HB 144, by Rep. Bill Roberts, R-Jasper, enacted as Act #2012-54, provides that job creation projects in the coal mining industry will be eligible for the state's capital credits and other abatements under the state's "Mercedes" incentive law, but the incentives will be limited to 50 percent of the amount otherwise available to other industries. The bill also excludes the coal company's costs of acquiring land and the related preliminary engineering, architectural and environmental costs from being included as "capital costs," which are otherwise recoverable for other qualifying industries.

 

Voters to decide whether to fund economic development incentives for job creation

HB 12, by Rep. Jay Love, R-Montgomery, proposes a constitutional amendment which, if ratified, would authorize a bond commission for the Alabama Capital Improvement Trust Fund to refinance certain existing debt by issuing refunding bonds, not to exceed $750 million when added to the outstanding general obligation bonds. This refinancing would free up an estimated $126.7 million in bonding authority that the state would then use for economic development incentives to attract new jobs to the state. Voters will decide whether to approve the amendment on the November general election ballot.

School performance grading system
will provide comprehensive view 

HB 588, by Rep. Terri Collins, R-Decatur, enacted as Act #2012-402, requires the State Superintendent of Education to 1) develop a school grading system that reflects overall school and school district performance for the 2013-14 school year; 2) post the grades on the Department of Education's website; and 3) annually provide the grade information to the parent or guardian of each school student. Schools and school systems would receive grades ranging from "A" to "F," to allow parents to make comparisons.

 

Mandatory minimum school age lowered to six

SB 28, by Sen. Priscilla Dunn, D-Bessemer, enacted as Act #2012-295, lowers the minimum mandatory age of school attendance from seven to six years. The Department of Education reports that annually there are a few dozen children who enroll for their first school-based learning experience at age seven. These children are often far less school-ready than many of their younger classmates who have attended pre-school and kindergarten. Public schools are expected to have about 50 additional students enroll statewide due to the new minimum age.

 

Pharmacy benefit manager bill saves Shoals jobs

 HB 393, by Rep. Lynn Greer, R-Rogersville, enacted as Act #2012-213, is intended to satisfy recent requirements imposed by the Alabama Board of Pharmacy on a northwest Alabama call center, allowing it to retain 220 jobs.

 

The new law will also prevent the additional regulation of Pharmacy Benefit Managers (PBMs) that are used by employers of all sizes, as well as by the state public employee and educator benefit programs, such as the Retirement Systems of Alabama and the State Employee Insurance Board, to administer prescription drug benefit programs and restrain rising costs. PBMs are currently regulated by the Alabama Board of Pharmacy as well as the Alabama Department of Insurance and the Federal Drug Administration, making additional oversight and regulation by the Board of Pharmacy unnecessary.

 

The law creates a "win-win" situation by helping to retain existing jobs in Muscle Shoals and protecting the ability of employers and state government to continue to offer affordable prescription drug benefits to their employees through the use of PBMs.  

  

Autism benefits expanded  

SB 283 by Sen. Cam Ward, R-Alabaster, enacted as Act #2012-298, expands coverage of certain health benefits for children up to the age of nine with autism spectrum disorder. The bill, which was agreed to by health benefit plan providers and the bill sponsor, will increase the number of occupational, physical or speech therapy visits for children under the age of nine from 35 visits per calendar year to 100 visits.

 

Benefit plans also will be required to offer coverage to employers with 50 or more employees for behavioral therapy benefits for children diagnosed with autism disorder. Employers will have the option to purchase this coverage, and the benefit amount will be capped at $35,000 per year.

 

This law does not impact small employers.

 

 

Campaign finance law changed

 Politicians and political action committees will be affected by at least two pieces of legislation that passed in the recent session.

 

SB 497, by Sen. Arthur Orr, R-Decatur, enacted as Act #2012-477, eliminates duplicate and multiple filings for certain time periods that were previously reported. The new law also specifies that daily reports must include all activity occurring since the most recent prior report, and that weekly and monthly filing requirements cover the entire preceding week or month. Monetary balances of each report must now begin at the same monetary balance reported in the previous report.

 

Committee to look at changes   

to Fair Campaign Practices Act

 SJR 97, sponsored by Sen. Jabo Waggoner, R-Vestavia Hills, enacted as Act #2012-358, sets up an interim legislative study committee on campaign finance reform. It also sets up an Alabama Bar Association study group to recommend changes to the Fair Campaign Practices Act to make it more effective.

 

Since the act was enacted in 1988, several changes have been made to provide more transparency and accountability, such as the ban on PAC to PAC transfers, the addition of filing requirements and requiring a searchable internet database that must be up and running by 2014. The study committee will report its findings to the legislature and the governor by the 5th legislative day of the 2013 session.

  

Solid waste landfill moratorium extended

HB 556, by Rep. Alan Baker, R-Brewton, enacted as Act #2012-434, gives a one-year extension to the existing 24-month moratorium on the issuance of any new permits by the Alabama Department of Environmental Management for public solid waste landfill facilities which receive or are intended to receive wastes not generated by the permittee. The moratorium was set to expire May 31, 2014.


Digital Crime Act goes after cyber criminals

Under HB 400, enacted as Act #2012-432, by Rep. Paul DeMarco, R- Homewood, and Sen. Cam Ward, R-Alabaster, persons guilty of committing a computer crime, including cyberstalking, electronic harassment, phishing, data fraud and computer tampering, are subject to criminal penalties, prosecution and forfeiture of equipment. This law makes online threats punishable and outlaws acts such as "phishing" and "cyberstalking." The law also allows law enforcement officials to obtain search warrants to secure information held by out-of-state providers such as Twitter and Facebook. It requires Alabama companies to honor the same warrants from out-of-state law enforcement agencies.

 

Law outlines basis for honoring  

foreign money judgments

SB 348, by Sen. Phil Williams, R-Rainbow City, enacted as Act #2012-470, sets up a framework outlining when foreign money judgments will and will not be honored by Alabama courts. The new law states that a foreign money judgment will be honored in Alabama as long as the issuing court was competent, had jurisdiction, and gave the parties an opportunity to defend themselves. The law provides Alabamians and persons with assets in Alabama with a safeguard that did not previously exist. The law provides a simple court procedure for enforcing foreign-country money judgments, addresses burdens of proof of the parties not covered by current law, establishes grounds for denying recognition of foreign-country money judgments, and establishes a statute of limitations for recognition actions. 

 

 

Definition of de minimis clarified in ethics law

HB 466 by Rep. Jay Love, R-Montgomery, enacted as Act #2012-433, clarifies the definition of the legal term, "de minimis," under the state ethics statute. After the enactment of the 2010 ethics reform package, the term was strictly construed and prevented the giving of gifts that provided little or no value but served merely as a token of appreciation. The term is now defined as a gift of $25 or less per occasion and an aggregate of $50 or less in a calendar year from any single provider. However, the act allows the Ethics Commission to adjust this amount to reflect any increase in the cost of living as indicated by the United States Department of Labor Consumer Price Index.

 

Insurance fraud bill with BCA-authored  

language becomes law

HB 323, by Rep. Steve McMillan, R-Bay Minette, enacted as Act #2012-429, will allow the Department of Insurance to investigate suspected insurance fraud when the attorney general neglects or refuses to prosecute an alleged violation.

HB 323 creates a fraud unit within the Department of Insurance to investigate suspected insurance fraud. Funding would come from a $200 annual assessment of insurers doing business in the state. The law also creates civil and criminal penalties for those found guilty of committing insurance fraud and would allow for restitution to the aggrieved party.

Because HB 323 defines self-insured health benefit plans (ERISA plans) as insurers, BCA was concerned employers would be subjected to unnecessary audits by the Department of Insurance. As a result, BCA staff successfully amended the bill to exempt ERISA plans.

 

Texting while driving now banned

HB 2 by Rep. Jim McClendon, R-Springville, enacted as Act #2012-291, prohibits a person from writing, sending or reading a text-based communication while operating a motor vehicle on a public road, street or highway. However, there are exceptions relating to communication for emergency services, idling on the shoulder of a highway, road or street, and for using the device to receive driving directions.

 

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BCA Events

Alabama Manufacturer of the Year Awards  

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June 20, 2012

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YOUR BCA ADVOCACY TEAM

Anita Archie, Senior Vice President and Legal Advisor,

Intergovernmental Affairs, Advocacy and Communications

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334-240-8775

 

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