HBAA Legislative Alert
HBAA Senior Officers Meet With
Governor Bentley
The HBAA Senior Officers, led by 2016 HBAA President Mark Reid, met with Governor Robert Bentley in his office earlier this week to discuss the state of Alabama's economy and housing's role in improving the state's economic outlook.
                 
Fresh from his State of the State address, Governor Bentley repeated his desire to see Alabama overcome its current issues. The ability to confront prison overcrowding, Medicaid, and other critical state needs still dominates the political landscape according to the Governor.
 
Governor Bentley, a long-time supporter of the housing industry, stressed his commitment to promoting home ownership and increasing the ranks of skilled workers entering the trades. The Governor stated the need to get more young people into a workforce ready condition. In particular, he focused on the importance of the building trades and trade education.
                 
Another key point made by the Governor was keeping a handle on the regulatory process. His appointment of pro-housing tradespeople to the various construction boards are a testament to that fact. He once again assured the leadership that he would make appointments based on the HBAA's recommendations.
                 
The HBAA appreciates all the efforts Governor Bentley has made on behalf of housing in Alabama and looks forward to building on that relationship to help keep housing strong in Alabama.

Session Gets Underway, Familiar Problems Loom
The start of the 2016 Legislative Session seems eerily familiar as the specter of a shortfall in the General Fund budget looms. Expected to exceed $200 million, the shortfall will be the primary concern of the Legislature again this year. Unlike last year, Governor Bentley will not be pushing a series of tax measures, leaving the Legislature to sort it out.   It is unlikely that any significant revenues will be added to the General Fund during this session.
 
That being said, anything is possible. With crippling effects to hospitals possible if Medicaid is not funded and the threat of a federal takeover of Alabama's prison system, legislators may be motivated to find new revenue in the form of taxes, fees, and other "enhancements." Here is a look at some of those measures:

            Casino Gaming
 
Less than a year ago, expanded casino gaming in Alabama seemed to have a fighting chance. At the time, one of the most powerful office holders in the state, Senate President Pro Tem Del Marsh (R-Anniston), was actively promoting a plan to allow Class III casino-style gaming at the state's four existing dog racing tracks, to create a state lottery for education, and to encourage the Governor to seek a gaming compact with the Poarch Band of Creek Indians. A powerful coalition, organized under a foundation called the Alabama Jobs Foundation, supported the plan. That coalition included prominent Alabama business people as well as Pat Dye, former Auburn football coach. According to a study conducted by Auburn University at Montgomery, Senator Marsh's plan would have created as many as 11,000 jobs in the state. It would also have generated as much as $400 million in revenue annually, nearly all of which would have come from the lottery.
           
Unfortunately for gaming proponents, Senator Marsh has decided that he will not champion gaming or lottery legislation this year. According to Senator Marsh, the plan lacks sufficient support in the Senate and would likely bog down the Regular Session, making it impossible to accomplish other important tasks. Thus far, no one else has picked up the casino issue and indicated that they will sponsor legislation this year. Although it seems likely that some form of casino gaming bill will be introduced, its chances of passing seem fairly remote.
 
            Lottery
 
Another possible source of revenue for the state would be a lottery. Almost 17 years ago, voters in Alabama rejected then-Governor Don Siegelman's proposed education lottery by a margin of 54% to 46%. With the General Fund now in dire straits, Representative Alan Harper (R-Northport) and Senator Jim McClendon (R-Springville) have introduced bills that would allow the people to once again vote on a lottery. The bills that have been introduced have been criticized by some for their lack of specificity. Both bills merely provide that, if approved by the people, the Legislature could establish a lottery. What sort of lottery games would be permitted (Powerball, scratch-off games, etc.) and how the money would be used by the State are left open.
 
Because the creation of a lottery requires an amendment to the State's Constitution, and because the proposed amendments thus far would require significant additional legislation if approved by voters, any new revenue from a lottery would take some time-most likely two or more years-to be realized. After passage by a three-fifths majority in both houses of the Legislature, the measure would be put to a vote of the people, probably at the November 2016 general election. If approved, the state would then have to pass enabling legislation setting up a lottery corporation to run the games.
 
The corporation, once established, would then have to ramp up operations and select vendors for the operation of the lottery itself and vendors for the tickets. In Wyoming, the most recent state to adopt a lottery, the time between the passage of legislation and the first ticket sold was approximately fifteen months. Furthermore, in order to create its lottery, Wyoming did not have to go through the additional step of amending its Constitution as required in Alabama.  Thus, even if a lottery were approved, it could take a number of months to come on line.
 
           Gas Tax/Infrastructure Improvement
 
A significant effort by business and community leaders in Alabama is underway to increase the State's gas tax, with the additional revenue to be earmarked for infrastructure improvement at both the state and local levels. According to proponents, Alabama's tax is one of the lowest in the region, and the current low price of gas creates an opportunity to increase the tax without unduly burdening the public. In fact, Alabama's gas tax was last increased in 1992-twenty-four years ago. Because vehicles are increasingly fuel-efficient, the average car on the road today provides less to the state in revenue from the gas tax than it did 20 years ago. These factors, along with a 17% increase in the state's population, have left Alabama's roads in difficult shape.
 
Under the proposal being discussed, the price of gas would increase next year by $0.12 per gallon. An early version of the proposal would have added the initial increase, and then stepped up the tax over several years before finally being set at a fixed percentage of its market price.  It is not clear, however, whether the current proposal includes this indexing feature.
 
There are a number of other measures that are likely to be considered.  The HBAA has not taken a position on any of the revenue bills.

Fire Sprinkler Bill Introduced
The Alabama State Fire Marshal is pushing a bill sponsored by Rep. Tommy Hanes (R-Scottsboro) that would allow plumbers to install potable water sprinkler systems in residential units. The HBAA has worked closely with the State Fire Marshal to alter the draft to enhance the measure.
 
As introduced, the bill creates a process for the collection and publication of actual structural fires in Alabama. Information collected will include the age of the structure, code the structure was built to, cause of the fire, any criminal activity associated with the fire, type and extent of damage caused, and the number of functional fire alarms and sprinkler heads. Additionally, HB 114 creates the Fire Prevention, Protection, and Fire Sprinkler Advisory Board. The HBAA will be represented on the board along with members of the Associated Builders and Contractors, the Alabama Plumbers and Gas Fitters Examining Board and the Alabama Fire Sprinkler Association, as well as a building code official and a fireman.
 
The HBAA expects the bill to be before the Public Safety and Homeland Security committee in the House in the coming weeks. The HBAA is supportive of the bill as drafted.
Regulatory Oversight Legislation
Senator Gerald Dial introduced legislation this week to provide a backstop against anticompetitive regulations and actions. The bill is an attempt to address a recent Supreme Court decision that requires regulatory boards on the state level to have any action or rule reviewed to ensure it didn't violate anticompetitive laws. Senate Bill 80, as drafted, only covers rules adopted by the boards, but not other actions such as unlicensed activity or disciplinary actions. The HBAA and the Alabama Association of Regulatory Boards met yesterday with those who drafted the bill to get an amendment drafted to ensure that the bill covers all submitted actions. The HBAA is working closely with Senator Dial to make the appropriate changes.
Your Guide Throughout the Session
With over 1,500 bills expected to be introduced, the Legislative Session can become overwhelming to even the most seasoned observer. The HBAA Legislative Alert is your guide to the session. Each Friday we will highlight and recap the events of the week and report to you on the progress of the HBAA's legislative agenda and actions. If you know of other members who would benefit from receiving this weekly update, have them contact Candi Stroh  to be added to our list. If you have any questions concerning the content or subjects we cover, contact by email  Russell Davis or Jason Reid  or at 800-745-4222.
You have been subscribed to the HBAA Legislative Alert because you are a member of the Home Builders Association of Alabama. The Alert is published every Friday following a legislative week. If you have any questions regarding this email please contact Jason Reid at (800) 745-4222.
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