February 22, 2013
Tuesday Morning
Legislative Leadership Committee Meetings

The BCA Governmental Affairs Committee will meet Tuesday, Feb. 26, 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 Rep. Mac McCutcheon, R-Monrovia, chair of the House Rules Committee.


Governor Robert Bentley on Wednesday signed into law a bill to require the repayment of the Alabama Trust Fund after voters approved the transfer during a September 2012 referendum.  Known as the "People's Trust Act," it was the first bill passed and signed by the governor in the 2013 session.  Bentley was joined in the historic Old House Chamber with Lieutenant Governor Kay Ivey, Speaker of the House Mike Hubbard, R-Auburn; Senate President Pro Tem Del Marsh, R-Anniston; Sen. Bryan Taylor, R-Prattville; Rep. Jay Love, R-Montgomery; and Sen. Bill Holtzclaw, R-Madison.
In August 2012, the BCA's board of directors voted to support the referendum under two conditions:
  1. The Alabama Legislature enacts legislation that binds successor legislatures to repay all funds to the Alabama Trust Fund; and
  2. That our elected leaders in each branch of state government reaffirm their efforts to eliminate waste and the duplication of services and work to instill confidence among the citizenry that our government operates as efficiently as possible.
The September referendum was necessary in order to prop up the state's general fund budget.  The BCA recognized that longstanding funding issues placed a cloud of funding uncertainty over the agencies of the State of Alabama which provided critical services.
"We made a commitment to the voters that the Alabama Trust Fund would be repaid, and we are fulfilling that commitment," Governor Bentley said in a release following the event.  "We are also working to find more  savings and make government more efficient.  Over the last two years, we have identified $750 million in savings.  From that total, more than $528 million in savings have already been realized, and the rest of the savings will be realized in future years.  Working with the Legislature, we will reach our goal of identifying a billion dollars in savings by the end of this term."
"The governor and legislative leaders are to be applauded for making this the first piece of legislation that was passed and signed this session," said BCA President and CEO William J. Canary.  "They made a commitment to the people of Alabama that they would repay any borrowed funds, and they have once again kept their word.  We look forward to working with them in the future as they look for ways to eliminate waste and operate government more efficiently."
The bills were sponsored by Rep. Love and Sen. Taylor.   The House initially passed the bill the first week of the legislative session, but the Senate amended the House bill to require an automatic annual repayment if in any year the legislature fails to appropriate a scheduled repayment amount.  The House gave final approval to the bill on Tuesday.
The new law requires full repayment of the Alabama Trust Fund by no later than September 30, 2026.  The bill also provides for minimum cumulative amounts that must be repaid at the end of each fiscal year starting  with the fiscal year ending September 30, 2014.


Former U.S. Representative and Florida Attorney General Bill McCollum visited Montgomery on Wednesday to testify at a public hearing before a joint House and Senate Judiciary Committee meeting on SB 134 and HB 227, which would limit the amount of contingency fees private attorneys could be paid when working on behalf of the state.
McCollum, along with BCA senior vice president for intergovernmental affairs Anita L. Archie, spoke on behalf of the U.S. Chamber Institute for Legal Reform (ILR) and the Business Council of Alabama and told committee members the legislation was introduced to promote the principles of transparency and accountability in Alabama's private attorney contracting process.  It is based on model legislation known as Transparency in Private Attorney Contracting (TIPAC), which has already been introduced in more than a dozen state legislatures and successfully implemented in states like Florida, Indiana, and Mississippi.
State attorneys general once held relatively low-profile roles in state government, serving as legal advisers for governors, state agencies and local governments.  Over the past decade, there has been a dramatic transformation in the manner in which state attorneys general enforce their traditional consumer protection and antitrust enforcement powers.  Nationwide, attorneys general are actively working to expand their subject matter jurisdiction into areas such as environmental policy and financial services regulation.  State attorneys general are stepping up their regulation of the business community and are well on their way to displacing federal authorities as the nation's chief consumer protection watchdogs.
As state attorneys general become more engaged in major consumer protection issues, the ILR has noticed a willingness on the part of state attorneys general to hire private plaintiff firms to pursue litigation on behalf of the state.  As payment, these attorneys receive a contingency fee, which is a percentage of whatever amount is recovered on behalf of the taxpayer.  In the past, some private law firms received excessively high fees in relation to the amount of work they did on behalf of the state.  In addition to excessive fees, there is a substantial risk of "pay to play" schemes that may appear when political contributions from plaintiffs firms are traded for contingent fee contracts.  At the very least, use of such counsel without the proper safeguards can give the appearance of impropriety and undermine confidence in our legal system.
It should be noted that Alabama Attorney General Luther Strange has been a model of transparency and accountability during his time in office and has not engaged in the type of private attorney contracting as stated above.


HB 227 by Rep. Paul DeMarco, R-Homewood, and SB 134 by Sen. Cam Ward, R-Alabaster, require the state contracting agency to make a written determination that contingency fee counsel is cost effective and in the public interest.  The legislation requires a contracting agency to request proposals from private counsel, with certain exceptions.  In order to rein in excessive attorneys fees, the bill sets tiers for contingency fees as a percent of recovered amounts ranging from 25 percent to 1 percent.  To ensure that the private plaintiff's firm is acting in the best interests of the state, and not in the interest of its own profit, the legislation requires government attorneys to maintain control of the case and any settlement decisions.  Transparency is achieved through the requirement that a copy of the executed fee contract be posted online.  In addition, the private attorney must maintain time records and keep detailed records of expenses, disbursements, etc. for 4 years after the contract terminates.
No official action was taken after the public hearing concluded.
BCA supports this legislation.  


A House-passed school flexibility bill advanced through the legislature this week and is in position to be considered by the Senate on Tuesday.

HB 84 by Rep. Chad Fincher, R-Semmes, called the Local Control School Flexibility Act, would allow the waiver of certain laws and regulations in exchange for the permission to implement educational innovations that are expected to yield measurable academic improvements. The bill authorizes flexibility contracts between local boards of education and the State Board of Education and it authorizes the state school board to create flexibility rules.

The Senate Education Committee favorably reported Fincher's bill on Wednesday, 5-3, sending it to the Senate. The House passed HB84 by a vote of 65-37 on Feb. 14.

Here's how it would work: A local school superintendent would recommend a flexibility plan to his or her school board. If approved by the local board, the plan would go to the state Superintendent of Education for consideration and then to the state school board.

The Business Council of Alabama supports the flexibility legislation.

Fincher said the measure protects tenure rights of teachers, an important issue for opponents that include the state's teachers' union. The union contends the bill will gut the tenure law. Voting on the bill has largely been along party lines with Republicans supporting it and Democrats opposing it.

Fincher said innovative school status would be voluntary.

Working together with the BCA to ensure passage of the bill are state School Superintendent Dr. Tommy Bice, local school board members, superintendents, retired teachers, the Alabama Association of School Boards, School Superintendents of Alabama, the Alabama Association of School Business Officials, the A+ Education Partnership, and Council for Leaders in Alabama Schools.


State Sen. Vivian Davis Figures of Mobile introduced herself Tuesday (Feb. 19) to the Business Council of Alabama's Governmental Affairs Committee as the new Senate Minority Leader for the remainder of the 2010-14 legislative term.

"I was elated and looking forward to coming here," she said.


Figures explained her vision of leadership for Alabama, her signature anti-smoking legislation, education, bipartisan politics, and the need for more women in politics. "We want to just get the job done," Figures said, but cautioned "don't take my kindness and sweetness for weakness."


The Democrat who has been in the Senate since 1997 succeeds Sen. Roger Bedford, D-Russellville, as Minority Leader. She is a former Mobile city council member.


Although Republicans control both houses of the legislature, Figures said political compromise is required on important state issues.


"There is a way for us to come together, give a little, take a little," she said. "In order for Alabama to move forward, we have to come together and put aside our partisanship."


Figures entered statewide politics after the sudden death of her husband, Senate President Pro Tem Michael Figures, D-Mobile, in 1996. For 14 years, she was a member of the Senate's dominant Democratic Party until the 2010 election when the GOP took both the House and Senate.


Figures said it's important for all voices to be heard.


"That's why we never want a total Democratic government and total Republican government," Figures said. "I think that in order for Alabama to move forward, we have to come together and put aside all of this partisan politics."


Figures said she finds common ground with the BCA on one issue. "I am definitely an advocate for education," she said.


Figures is known for legislation to regulate smoking. She passed the Alabama Clean Indoor Act in 2003 that bans smoking in certain public places and requests that employers adopt a smoking policy and provide smoke-free work areas.


Figures seeks to replace the 2003 law with the provisions of SB 195 that she has introduced in the 2013 legislative session.


If SB 195 becomes law, smoking would be prohibited in private businesses and public places and certain outdoor areas.


It has 17 cosponsors from both parties and is in the Senate Health Committee.

The bill addresses clean air and the effects of second-hand smoke and would trump private business ownership decisions.


"It has come to our attention that a lot of business owners don't want to be told don't smoke in their establishments that they own," she said. "I feel when something is happening that is going to cause harm to another person then your rights stop there."


Figures said limiting exposure to second-hand smoke can help the bottom line.

"It affects economic development," she said. "We can save millions of dollars in health care costs, protect employees who work in particular businesses."


The legislation specifically exempts private clubs and private residences not used for child or adult care, or as a health care facility. It would establish requirements for owners, operators, managers, and employers.


Local governments could adopt stricter standards, the legislation states.



On a voice vote, the House Judiciary Committee gave a favorable report to HB 264, sponsored by committee chair, Rep. Paul DeMarco, R-Homewood.  The bill provides for an independent Alabama tax appeals commission, separate from the Alabama Department of Revenue, and it updates and conforms to federal law several provisions of Alabama Taxpayers' Bill of Rights to promote tax fairness and compliance.
The voice vote and brief discussion of the bill in committee reflected the extent to which the members were thoroughly familiar with the bill that has passed both the committee and the House for the last several years.
There is cautious optimism for the bill's enactment this year, with this year's effort having the direct input and expressions of support from Governor Bentley.  This year's bill provides that the governor will select judges for the tax appeals commission from a list of qualified candidates vetted by a seven-member nominating committee.  The judge would then be sworn in, as there is no requirement for Senate confirmation.
The BCA and several other business and trade associations under the Business Associations Tax Commission (BATC) support this legislation.

In last week's Capital Briefing, the BCA incorrectly reported that Sen. Trip Pittman, R-Montrose, had requested further study of the ramifications of the proposed corporate income tax rate reduction in tandem with reducing or eliminating the federal income tax (FIT) deduction. Sen. Pittman did not request further study of the FIT, and he continues to firmly 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.

The Senate Fiscal Responsibility & Accountability Committee gave a favorable report to SB 179, by Sen. Jabo Waggoner, R-Vestavia Hills.  The bill entitled the Red Tape Reduction Act provides:
  • That a business economic impact statement must be prepared by state agencies, other than agencies primarily engaged in licensure, when the agency proposes a rule change and receives a complaint that the change may adversely impact small business.
  • For a five-year review of all existing rules to determine whether they should be changed or rescinded.
  • That proposed and existing regulation reviews be posted on agency websites to allow for public review.

The companion bill, HB 101, by Rep. April Weaver, R-Brierfield, already passed the House last week by a vote of 92-0, and it has been referred to the Senate Governmental Affairs Committee.
The BCA supports this legislation.

The goal of Executive Order No. 36, which creates the governor's College and Ready Task Force, is to close the gap between the knowledge and skills of the workforce and those necessary for success in business and industry.  Frequent communication and coordination among members of the education community, workforce trainers and representatives from business and industry, along with the availability of accurate education and workforce data, will help to identify causes and successful strategies for closing the skills gap.
Chaired by Governor Bentley and supported by co-chairs, Lt. Governor Kay Ivey, Senate President Pro Tem Del Marsh, R-Anniston, Speaker of the House Mike Hubbard, R-Auburn, and Secretary of Commerce Greg Canfield, the task force is expected to: 1) endorse a standard definition for "prepared graduate" for each level of education that is completed; 2) to explore potential partnerships between education and industry that can better prepare students for success in either college or career and 3) to promote college and career awareness among students.  Governor Bentley asked the Task Force to complete its report by the end of 2013.

The Senate Education Committee gave a favorable report by a vote of 7-1, to SB 67, by Sen. Dick Brewbaker, R-Pike Road.  The bill proposes a constitutional amendment that upon ratification will extend to local boards of education, as is currently the case with local governments, the requirement that a two-thirds vote be attained for a general law to impose an unfunded mandate on local governmental entities or to mandate the expenditure of local funds.
The BCA supports this legislation.

A Senate bill that would create a cabinet-level Secretary of Information Technology and a legislative oversight committee is on the House calendar and in position for possible consideration when the legislature reconvenes Tuesday. The House Technology and Research Committee on a voice vote Thursday favorably reported SB 117 by Sen. Phil Williams, R-Rainbow City. If the bill becomes law, an eight-member Permanent Legislative Oversight Committee for Information Technology also would be created.

The oversight committee would review operations of the cabinet secretary whose job would be to develop a four-year strategic plan for state agency information technology. The new agency would provide non-education IT support similar to the support provided by the Alabama Supercomputer Authority to education entities. The secretary would update the operation plan and publicly report its status to the governor once a year.

The Permanent Legislative Oversight Committee for Information Technology would review the operation and performance of the cabinet secretary. The committee would consist of chairs of the House and Senate General Fund and Education appropriations committees, two members appointed by the Speaker of the House, one senator appointed by the Senate president and one member appointed by the Senate President Pro Tem. Committee members would name a chair and vice chair. A search committee would seek candidates for cabinet secretary and would include two members appointed by the governor, one by the Speaker of the House, one by the Senate President Pro Tem, and a member appointed by the Lieutenant Governor.

Williams' bill was amended to exclude the Alabama State Port Authority and colleges and universities that are governed by separate boards of trustees. Williams has a related bill, SB 116, to create the Alabama Technology Authority. Gov. Robert Bentley's legislative director, Blaine Galliher, told committee members that SB 117 has priority. "He wants the secretary of technology first and then we'll go forward," Galliher said. SB 116 also is in the House Technology and Research Committee.

The Senate sponsor of a bill to consolidate and streamline legislative support agencies carried his bill over when a test vote on it was overwhelmingly defeated. Sen. Jimmy Holley, R-Elba, carried over SB 122 after a vote to end a filibuster failed. Only two senators voted to end debate while 27 voted to continue the filibuster. SB 122 would create two legislative committees that would review House and Senate support agencies such as the Legislative Fiscal Office and Legislative Reference Service. Holley had agreed to expand the number of House and Senate members on the oversight committee by two from each house, to 16 total members, but that wasn't acceptable to opponents who feared the concentration of power in the hands of a few.

Democrats led the filibuster, but in the end, Republicans voted to continue it, crippling Holley's effort. "I want a non-partisan body," Sen. Linda Coleman, D-Birmingham, said shortly before the cloture vote. The sole Democrat to co-sponsor Holley's bill, Sen. Quinton Ross of Montgomery, started a filibuster and pushed his own substitute bill. "I read some things and it gave me pause," Ross explained. "Also concerning me was the power concentrated in six members of the House and Senate." Ross's substitute would have created an 18-member oversight committee. "I think every member of the Senate will lose some control," Sen. Hank Sanders, D-Selma, said of the small size of the proposed oversight committee.

Gov. Robert Bentley supports SB 108, the law enforcement consolidation bill, and this week Attorney General Luther Strange added his support. The House Public Safety and Homeland Security Committee on Thursday favorably reported SB 108 by Senate President Pro Tem Del Marsh, R-Anniston, and sent it to the full House. It could be considered on Tuesday. SB 108 would combine various functions of state police and law enforcement investigation agencies and save as much as $26 million a year, Marsh said.

Strange said he supports streamlining law enforcement and consolidating agencies for more effective operations and more efficient use of scarce resources.

"This legislation has been carefully crafted to provide important reforms that make our law enforcement stronger and give it the ability to operate more efficiently to protect the people of Alabama," Strange said in a statement. "Our state troopers are overextended and have not received pay raises in many years."

He said many areas of Alabama lack sufficient resources to investigate crimes such as farm theft. Strange said Marsh assured him that part of the savings would go to state trooper pay raises and to support agricultural crime investigators. The attorney general's office would not be part of the consolidation.

Both Bentley and Marsh created law enforcement consolidation study commissions, and the bill is the result. SB 108 would create a Secretary of Law Enforcement and combine functions of at least 20 agencies into either a newly created Department of Public Safety or State Bureau of Investigations.

This week, the Irrigation Tax Credit Bill, SB 204 by Sen. Arthur Orr, R-Decatur, and HB 289, Rep. Alan Boothe, R-Troy, were favorably reported from the Senate Finance and Taxation-General Fund and the House Ways and Means-Education committees,  respectively.  This legislation makes three revisions to the original bill passed last year.  First, it reduces, from 10,000 to 8,000 cubic feet per second (cfs), the size of a water body that qualifies for a tax credit without building an off-stream reservoir.  This revision will open farm land in portions of the Upper Tombigbee, Warrior and Coosa Rivers.   Second, it allows a farmer to spread the tax credit over five years.  Lastly, at the request of the Department of Revenue, the legislation would add language to describe how the tax credit is distributed amongst members of a partnership that own a farm.  The end result of this bill would be to encourage more withdrawals from major rivers for the purposes of irrigation.
No action was taken on the Drought Bill (SB 208) sponsored by Sen. Billy Beasley, D-Clayton.  This bill would codify the Alabama Drought Assessment and Planning Team process that has been in place through executive order for more than a decade.  The bill also will require the development of drought plans for water utilities and the State of Alabama.
Also, regarding environmental issues and funding, more information has been requested from ADEM to better understand the conditions surrounding the proposed 50 percent fee increase.  Lastly, the governor's recommendation in the general fund budget includes $1 million for the Geological Survey of Alabama (GSA) to perform ground water assessments.  BCA, in our comments on the state water agency working group paper, supports the collection of data to assist in identifying any existing issues that could be addressed with policy changes.  BCA has opposed any policy changes until the agencies collect the proper data and identify what problems exist that the policies would be addressing.  It is unclear why all of the water assessment funding initially would be proposed to go to GSA, as their expertise resides with groundwater issues and not comprehensive surface water and water resources issues.
The BCA advocacy team will continue to monitor these bills and report any developments in the Capitol Briefing.
Anita L. 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