February 15, 2013
Tuesday Morning
Legislative Leadership Committee Meetings

The BCA Governmental Affairs Committee will meet Tuesday, Feb. 19, at 8:30 a.m. in the first floor auditorium of the Business Center of Alabama, 2 N. Jackson St., Montgomery. Guest speaker will be Senate Minority Leader Vivian Figures.



The Alabama House of Representatives on Thursday passed HB 84 by Rep. Chad Fincher, R-Semmes.  The bill, known as the Local Control School Flexibility Act, passed by a vote of 65-37, after Rep. Wayne Johnson, R-Ryland, moved the previous question (cloture), ending nearly four hours of debate.

"This legislation is a giant step forward that will enhance our education and skills delivery system. Educators and local schools systems need the flexibility to match each unique education environment with the needs of the students.  The status quo, a one-size-fits-all approach, has proven to be ineffective no matter how much money is thrown at it...this practice should never be an option, again. There are some in Alabama politics who wish to divide business and education by promoting fear; however, the Business Council of Alabama has united with many in the education community creating a true Business Education Alliance that will provide hope and opportunities for our students and our future workforce," BCA President and CEO William J. Canary said upon passage on Thursday.

Canary went on to commend those 65 House members who voted for the bill as true champions of our children and said generations from now they can look back on February 14, 2013, and thank those 65 legislators as fighters for their future!


The bill would authorize the state Board of Education to approve waivers from certain state laws, Board rules, regulations and policies and allow school systems to implement innovative programs and budgets that are designed to raise academic achievement.  An innovation plan must be recommended by the local school superintendent, approved by the local school board, approved by the state superintendent and then approved by the State Board of Education, before waivers are granted and the plan can be implemented.


During debate on the House floor, Fincher noted that seeking innovative school status would be voluntary. He said local school boards, superintendents, and parents should have the flexibility to choose innovative schools because they know what works best in their districts.  Fincher also said that opponents who continue to claim that teacher's rights would be stripped are wrong.


"Let's stop playing politics with education," Fincher said.  "This is a great step forward in bringing true education reform to Alabama."
Fincher gave the example that under this legislation, local school boards would be able to decide that instead of spending money on textbooks, they could use that money instead to purchase iPads.
Rep. Jay Love, R-Montgomery, added that under this bill, school districts would be able to move money in order to save teacher positions.
Opponents of the legislation introduced numerous amendments on the floor in order to slow down debate.  The amendments were all tabled, and the House adopted a Fincher amendment to ensure that tenure would be preserved for current and future educators, while still allowing educators to voluntarily accept a non-tenured tract.
The Business Council of Alabama continued work with the business education alliance at the State House during today's activities.  Working with the BCA to ensure the bill's passage were the Alabama Association of School Boards, the School Superintendents of Alabama, Alabama Association of School Business Officials, A+ Education Partnership, Council for Leaders in Alabama Schools, and the State Department of Education.
The bill now goes to the Senate where Sen. Bill Holtzclaw, R-Madison, is the sponsor.

Click here for a list of how the members of the House voted.



The Alabama Senate on Thursday amended and passed a House bill that requires repaying $437 million that voters approved shifting from the oil and gas Alabama Trust Fund last year to prop up general government spending through 2015. The Senate voted to cut off debate and passed the bill 25-7.

Because it was amended, it goes back to the House for consideration. HB 94, entitled the People's Trust Act, sponsored by Rep. Jay Love, R-Montgomery, establishes an escalating schedule to repay the ATF by the end of Fiscal Year 2026. The Senate amendment requires an automatic annual repayment if in any year the legislature fails to appropriate a scheduled repayment amount.


The Business Council of Alabama supports the effort to repay all funds transferred from the ATF, the Alabama Trust Fund made up of royalties and lease payments from oil and gas production. BCA support for the transfer came with the understanding that elected leaders of the three branches of government would continue to reduce waste and duplicative state services and that no individual segment of the state's economy would bear a disproportionate share of any financial burden. Voters ratified the $437 million transfer on Sept. 18, but there was no repayment requirement.


Senate President Pro Tem Del Marsh on Tuesday predicted a successful legislative session that should include passage of government efficiency measures, education initiatives, and fulfillment of a promise to repay $437 million that voters approved shifting from the Alabama Trust Fund last year.

"We think this is the year of efficiency in state government," Marsh, R-Anniston, told the Business Council of Alabama's Governmental Affairs Committee. Marsh outlined concerns about a bill that would allow employees to possess firearms in their locked vehicles parked on private property parking lots while at work.


"We knew it was going to be an issue this session after what happened in Connecticut and what happened in Dothan," Marsh said. "As a business owner our company policy made it very clear you can't have firearms."

BCA President and CEO William J. Canary said the gun parking lot bill tests constitutional issues concerning firearms and private property rights.


Canary said if the bill becomes law, businesses should have immunity from lawsuits, should be able to opt out of the law's provisions, and the law should apply to both the public and private sectors.                                                


Marsh said the Alabama Trust Fund repayment bill is the first measure that he and Hubbard want passed. The repayment legislation, HB 94 by Rep. Jay Love, R-Montgomery, passed the House last week and was pending in the Senate Fiscal Responsibility and Accountability Committee.                        


Voters last year approved taking $437 million from the oil and gas royalty Alabama Trust Fund to bolster the general government budget. But no repayment provision was included in the constitutional amendment that was presented to voters.

Marsh said as a businessman he wants competent future employees from schools and believes that flexibility will give local systems the opportunity to try innovative K-12 teaching methods when needed.

"I do believe anything we do this session with education is about economic development," Marsh said. "As a (businessman) I can tell you the struggles businesses have finding the right people with the skill-set to come in and be employed."

Marsh said the 2013 regular session is the third since Republicans gained control of the House and Senate in 2010.

"We are as prepared for this session as any that I've come into," Marsh said. "We're in position to have early victories to build momentum."

Sen. Bill Holtzclaw, R-Madison, sponsored SB 54, the Local Control Flexibility Act of 2013, and Rep. Chad Fincher, R-Semmes, sponsored the House version, HB 84. The House passed Fincher's bill on Feb. 14 and Sen. Holtzclaw will shepherd the bill in the Senate.

The bill would authorize the state Board of Education to approve waivers from certain state laws, Board rules, regulations and policies and allow school systems to implement innovative programs and budgets that are designed to raise academic achievement.  An innovation plan must be recommended by the local school superintendent, approved by the local school board, approved by the state superintendent and then approved by the State Board of Education, before waivers are granted and the plan can be implemented.

"I hope to see the flexibility bill come out of the House today," Marsh said Tuesday.

He also said that he and Bentley have worked out differences in proposed public safety initiatives.

Government consolidation measures were considered by the Senate this week. They included SB 122 by Sen. Jimmy Holley, R-Elba, that would reorganize House and Senate operations. The bill had been carried over last week to give Senate Democrats more time to study its ramifications.


The chairman of the Business Council of Alabama's Education and Workforce Preparedness Committee, Bob Powers, was quoted in Thursday's New York Times on Alabama's business community, in partnership with the Business Education Alliance is doing to give all of the state's 4-year-olds a chance to succeed.

"The evidence is, if we don't make this investment and we don't make it wisely we're going to pay for it later."


Read the full New York Times article here. 


The BCA has and will continue to support and educate its members on the importance of pre-kindergarten programs in Alabama.


When W. Steven Barnett, director of the National Institute for Early Education Research (NIEER) at Rutgers University, spoke to the BCA Board of Directors at a special business education alliance policy forum last year, he said, Alabama has an advantage, because its First Class Pre-Kindergarten program is in place and is "very high quality. It just needs to be available to more kids, and the business community understands that."


When a state doesn't invest adequately in educating its youngest children in quality pre-kindergarten programs, the long-term effects can result in widening achievement gaps, increased healthcare cost, and additional burdens on business.


BCA president and CEO William J. Canary regularly advocates for Pre-k as he travels the state speaking to chambers of commerce and visiting with business groups.

"Alabama's voluntary First Class Pre-k program is ranked as one of the best in the country and the BCA will continue to advocate for increased funding," Canary said. "Every $1 spent on high-quality pre-k programs creates $7-$9 in future savings to the communities and states that invest.  Children with quality early learning opportunities are more likely to read at grade level, graduate from high school, earn more money and contribute more tax dollars, as well as becoming more productive members of the business community."


The Senate on Tuesday passed several government agency consolidation bills that would combine state public safety and investigation functions and create a new cabinet agency for non-education state information technology.

After two days of debating but not passing SB 122, by Sen. Jimmy Holley, R-Elba, which streamlines the various legislative offices and functions, the Senate adjourned Thursday until 10 a.m. Tuesday.  A substituted SB 122 by Sen. Holley would abolish various legislative agency oversight committees, create a Joint Committee on Legislative Operations, the House Committee on House Administration and the Senate Committee on Senate Administration, which would assume functions of all of the current oversight committees.

A paragraph in Section 3 of Holley's substitute sums it up: "Reduce and contain the cost associated with the co-operation and maintenance of the Legislative Department to the fullest extent reasonably possible and practical. In accomplishing the reduction, the joint committee, to the fullest extent possible, shall look for methods to save public funds and contain costs."

The consolidation and efficiency bills, if nothing else, signal to business and individual taxpayers that legislative leaders are attempting to shrink government where possible and modernize agencies after the first financial and operational review probably in decades.

Gov. Robert Bentley and Senate President Pro Tem Del Marsh, R-Anniston, commissioned efficiency studies. One result is the proposed consolidation of law enforcement and investigation functions of the Department of Public Safety and at least 20 other state agencies.

Marsh said his state police and investigative agency consolidation bill, SB 108, will save taxpayers $260 million over 10 years. "I truly believe the administrative side will be where the savings are," Marsh said.

Marsh's bill would create a cabinet-level Secretary of the Department of Public Safety and an Alabama State Law Enforcement Agency. The new agency would consist of a Department of Public Safety and a State Bureau of Investigations.

An amended SB 108 passed 31-0 on Tuesday and was assigned to the House Public Safety and Homeland Security Committee. The amendment would change the implementation date from Oct. 1, 2014, to Jan. 1, 2015.

SB 116 by Sen. Phil Williams, R-Rainbow City, would create the Alabama Technology Authority. SB117 also by Williams would create a new cabinet-level position of Secretary of Information Technology and the Permanent Legislative Oversight Committee for Information Technology.

SB 116 was passed 32-0, and SB 117 was passed 31-0, both on Tuesday. They were assigned to the House Technology and Research Committee.

On Wednesday, BCA President and CEO William Canary and Senior Vice President of Intergovernmental Affairs and Advocacy Anita Archie, along with other representatives from business and industry, law enforcement, plaintiff bar, non-profits and counties' representatives expressed their concerns to a contract lobbyist for the National Rifle Association and Senators Scott Beason, R-Gardendale, and Roger Bedford, D-Russellville, regarding gun legislation. Both asked the question: "Why is this needed?"
As reported last week, BCA's legislative policy will not allow us to support any legislation that infringes on employers' right to provide a safe workplace on company property while creating new causes of action against employers because of "mandated" changes in the law by government.
The working group will consider on Tuesday an updated rough draft reflecting proposed changes as discussed in the last meeting. For more information contact Anita Archie at anitaa@bcatoday.org.

ADEM Budget and Proposed Permit Fee Increase

Governor Bentley's proposed 2013-2014 general fund budget decreases the Alabama Department of Environmental Management (ADEM) appropriation from $3.2 million in FY 2013 to $558,048 in FY 2014 (SB 143 and HB 158).  ADEM's statutory authority only allows the agency to charge fees to cover the cost of issuing permits; however, there are many important ADEM programs funded by general fund appropriations. On February 1, 2013, ADEM issued a notice for a proposed permit fee increase of 50 percent for the purpose of offsetting general fund budget shortfalls but many questions remain on what the impact of the decrease in state general fund appropriations will have on business and industry, especially in light of inadequate federal EPA funding for ADEM.
The 2013 BCA Legislative Agenda states we will actively work to adequately fund the Alabama Department of Environmental Management (ADEM) in order to eliminate the need for continued fee increases imposed by the ADEM on the backs of Alabama's regulated industries. A public hearing is scheduled for March 19, 2013, on the proposed permit fee increase, and BCA will offercomments. For further information, contact Anita Archie at anitaa@bcatoday.org.

Joint Legislative Committee on Water Policy

The committee met this week and approved the following:
Drought bill: Sen. Billy Beasley, D-Clayton, and Rep. Mark Tuggle, R-Alexander City, are the sponsors of the bill. Sen. Beasley introduced SB 208 on Thursday.
Irrigation tax credit bill: The committee agreed to the revisions offered by the Alabama Farmers Federation which includes reducing the size of a water body that qualifies for a tax credit without building an off-stream reservoir and allowing a farmer to spread out the tax credit for five years. The committee also accepted, at the request of the Department of Revenue, an amendment that would add language to describe how the tax credit is distributed among members of a partnership who own a farm. Companion irrigation tax credit bills were introduced on Thursday by Sen. Arthur Orr, R-Decatur, sponsoring SB 204 and Rep. Alan Boothe, Troy, sponsoring HB 289.

Sen. Paul Sanford, R-Huntsville, the sponsor of SB 92, spoke to the Senate Finance & Taxation-Education Committee on Wednesday and urged its members to support his proposed constitutional amendment which reduces the state's corporate income tax rate from 6.5 percent to 5.0 percent. That rate reduction will reduce income tax receipts by an estimated $97.5 million annually.


A spokesperson representing the Alabama Education Association spoke against the bill, arguing that Alabama is one of only a few states that offers the federal income tax deduction and that deduction makes Alabama's effective tax rate range between 3 percent to 4 percent.


Committee chair, Sen. Trip Pittman, R-Montrose, urged the sponsor and the AEA to study and report on the ramifications of reducing or eliminating the federal income tax deduction to offset the revenue lost from the proposed rate reduction.

The BCA will continue to monitor this bill and report any developments to our readers.


The BCA incorrectly reported that Sen. Pittman had requested further study of the ramifications of the proposed corporate income tax rate in tandem with reducing or eliminating the federal income tax (FIT) deduction. Sen. Pittman did not request further study on reducing or eliminating the FIT, and he reminds us that he has and continues to support the preservation of the FIT for both individuals and corporations. The BCA wishes to correct the record and regrets any confusion that resulted from the error. 


Presently, an Alabama resident who incurs a capital loss may deduct the loss only in the year in which the loss is incurred. On Wednesday, the Finance & Taxation-Education Committee favorably reported SB 156, by Sen. Slade Blackwell, R-Mountain Brook, to provide that resident taxpayers who incur a capital loss may deduct up to $3,000 per year and carry the balance forward until the capital loss is fully exhausted, as is the case for federal income taxes. Based on tax year 2011 data, the bill would have reduced income tax receipts by up to $20 million. The bill now goes to the full Senate for consideration.


The BCA will continue to monitor this legislation.

Anita Archie
Senior Vice President
and Legal Advisor,
Intergovernmental Affairs,
and Advocacy
Dana Beyerle
Manager of Communications
William J. Canary
President and CEO
Mark Colson
Chief of Staff and
Executive Director, ProgressPAC
Nancy Wall Hewston
Vice President for
Communications, Strategic Information and
Federal Affairs
Nathan Lindsay
Director of
Political Affairs and
Regional Operations
Victor Vernon
Vice President for
Public Policy  
Joshua Vaughn
Manager of Visual
Communications and
Strategic Information
Pam Ware
Manager of Intergovernmental Affairs, and Advocacy

For more information on the Business Council of Alabama
contact Elaine Fincannon at elainef@bcatoday.org