April 19, 2013


The BCA Governmental Affairs Committee will meet Tuesday, April 23, at 8:30 a.m. in the first floor auditorium of the Business Center of Alabama, 2 N. Jackson St., Montgomery. Our guest speakers will be Rep. Ed Henry, R-Hartselle, and Rep. Jack Williams, R-Vestavia Hills.

Contact Pam Ware for more information.


The Senate Education Committee on Wednesday gave a favorable report to a bill that would repeal Alabama's College and Career Ready Standards, otherwise known as Common Core. SB 403 by Sen. Scott Beason, R-Gardendale, passed on a voice vote after Senate President Pro Tem Del Marsh, R-Anniston, moved to give the bill a favorable report only a few seconds into Beason's explanation of the bill. A nearly identical bill by committee chairman Sen. Dick Brewbaker, R-Pike Road, was killed by the same committee a few weeks ago.


Before the voice vote was taken, Sen. Bill Holtzclaw, R-Madison, offered an amendment that would have kept the standards in place but would have prevented the State Board of Education from ceding control over Alabama standards to anyone outside of Alabama. The State Board of Education already has complete control over Alabama standards and has never allowed anyone outside the state to have any say over the standards. The Holtzclaw amendment failed on a 5-4 vote with one abstention.


"I stopped by the superintendent's office in Madison and asked for a Common Core book," Holtzclaw told committee members before the vote. "They gave me this fourth grade math book based on Common Core for you all to see. You know what's in it? Math."


The Common Core State Standards were developed to define the knowledge and skills students should have within their K-12 education careers so that they will graduate from high school able to succeed in entry-level, credit-bearing academic college courses and in workforce training programs. In short, it prepares students to be college and career ready in a global economy and also helps students, especially children of military personnel, to be able to move between states and not fall behind in their academic work.


Marsh told Al.com's Evan Belanger following the meeting that he expected to see the Common Core repeal bill on the Senate floor and that it had a very good chance of passing.


BCA opposes any attempt to repeal Alabama's high academic standards.  For more information on what the Alabama College and Career Ready Standards actually do and do not do, we have set up an information page on our website which includes links to the standards themselves.


"The Senate Education Committee today on a voice vote allowed fear to trump hope in rejecting Alabama's high academic standards," BCA president and CEO William J. Canary said following the meeting.  "These standards are vital in preparing students to compete in the 21st century global workforce.  Our business, education and military community alliance will continue to stand united in guaranteeing that our children succeed regardless of the zip code they live in.  These standards provide a more defined path towards success."


With bipartisan support, the House voted 69-26 on Tuesday to pass HB 227, by Rep. Paul Demarco, R-Homewood. The Transparency in Private Attorney Contracting bill, known by its acronym, TIPAC, promotes a uniform set of standards. It requires that government attorneys control state litigation rather than private attorneys who have a financial interest at stake. It also requires a state agency to explain why it would be in the state's best interest to hire outside counsel on a contingency fee basis, and it sets a tiered fee structure to ensure it is for the public good and not private profit. The bill requires annual reports on contingency fee counsel so the practice can be reviewed by lawmakers and the public. "The reason I am encouraging my House and Senate colleagues to support this bill is simple; it's in the best interest of the taxpayers," DeMarco said.


Rep. Daniel Boman, D-Sulligent, suggested that legal constraints could be enacted through executive order by the governor. DeMarco said that's possible, but the best way to ensure transparency is to pass a law. Rep. Joe Hubbard, D-Montgomery, said the bill does not include attorneys hired on an hourly basis by the state.  DeMarco said hourly agreements with private attorneys are already transparent and are readily available for public review.


DeMarco said that both Governor Robert Bentley and Attorney General Luther Strange support HB 227.  Rep. Bill Poole, R-Northport, offered an amendment to allow the attorney general to seek to waive the contingency fee limits in the event of extraordinary circumstances by certifying in writing to the governor why a waiver is necessary.  The governor could either reject the waiver or certify it in an Executive Order. DeMarco accepted the amendment because it would not violate the intent of transparency, and it was adopted. The bill, which is supported by the Business Council of Alabama, goes to the Senate for consideration. Sen. Cam Ward, R-Alabaster, is the Senate sponsor.


The BCA for the last two years has been at the forefront of the effort to require state agencies to declare in writing that hiring outside lawyers on a contingency fee basis is cost effective and in the public's best interest.  As state attorneys general become more engaged in major consumer protection issues, there has been a willingness on the part of some state attorneys general to hire trial lawyer firms to pursue litigation on behalf of the state.  Attorneys receive a contingency fee, which is a percentage of whatever amount is recovered on behalf of taxpayers.  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. Strange has been a model of transparency and accountability while in office and has not engaged in the type of private attorney contracting as stated above.


Former U.S. Rep. and Florida Attorney General Bill McCollum visited Montgomery on Feb. 20 to testify at a public hearing before a joint House and Senate Judiciary Committee meeting in support of HB 227. He said that TIPAC legislation has been introduced in more than a dozen state legislatures and successfully implemented in states such as Florida, Indiana, and Mississippi.  You can read more about McCollum's visit to Montgomery on our BCA Blog.  


The chiefs of staff to House Speaker Mike Hubbard and Senate President Pro Tem Del Marsh reviewed the 2013 legislative session and outlined expectations for the final one-third of the session that cannot last beyond May 20.

Speaking to the Business Council of Alabama's Governmental Affairs Committee on Tuesday, Josh Blades, chief of staff to Hubbard, R-Auburn, and Philip Bryan, who is chief of staff to Marsh, R-Anniston, discussed the timetable for the remainder of the session.

Blades had bad news and good news, the bad news being SB 286, the omnibus gun bill by Sen. Scott Beason, R-Gardendale, which is opposed by the BCA, will pass in some form. The Senate passed the bill that makes some business concessions and sent it to the House last week.

"Y'all aren't going to be really happy with it, but I hope it least it will be palatable and we can get a good balance between gun rights and property rights," Blades said.

The BCA believes the omnibus gun bill infringes on the rights of business to prohibit firearms on their property. The Senate-passed bill would not allow businesses to ban firearms in an employee's locked vehicle while at work but would allow employers to restrict employees from carrying concealed pistols under certain conditions, would give immunity to businesses, and allow businesses to post trespassing warnings.

Blades said Hubbard wants to make the bill as "palatable as possible to people sitting in this room" but in the end, "We're going to have do something, we're going to have to have a bill."

"We intend to make that immunity language stronger," Blades said. "Yes, we want an employee to be safe on the way to work but that should not endanger that employee or his or her colleagues once they get to work."

The good news, Blades and Bryan said, is that the House and Senate intend to continue passing business- and taxpayer-friendly legislation and will support Governor Robert Bentley's goal of cutting spending by $1 billion a year. "We're about 75 percent of the way to that goal," Blades said.

Bryan said the Republican-dominated legislature since 2010 ended the $50 million Deferred Retirement Option Program, helped cut state employment by 3,000, shifted $243 million in retirement and insurance costs to state employees and teachers, changed state pensions, saving $325 million over three years, and voted to reimburse $437 million to  the Alabama Trust Fund that voters "borrowed" last year.

"The point is so we don't have to raise taxes," Blades said.

Bryan revisited the House and Senate leadership's controversial passage of the Education Accountability Act of 2013 that allows parents to move children from failing public schools to other public or private schools and receive certain state financial aid.

"What we saw was an opportunity to make a bold move, a bold strike to do something good for education," Bryan said. "The reason we did it that way was there are a lot of major forces in this town that do not want education to be reformed."

(The Republican leadership began pushing a bill to modify the Accountability Act that Bentley had signed into law.)

In other action, the Senate-passed General Fund probably will make it to the House floor next week and a compromise Medicaid revision bill that hospitals and medical providers "are good with" remains on schedule.

Bryan said eight of the first 19 bills that have passed both houses are business and taxpayer friendly including repaying the Alabama Trust Fund, the school accountability act, film incentive rebates, the Major 21st Manufacturing Zone Act, law enforcement consolidation, streamlining information technology functions, agriculture economic incentives, and the so-called Airbus bill. "There is nothing on here that is fluff or is just a feel good bill," Bryan said.

Medicaid-related bills on Wednesday moved toward what sponsors hope will change the state Medicaid program from a fee-for-service system to one based on healthy outcomes for patients and taxpayers.


The House Health Committee on a voice vote favorably reported a substitute to HB 454 by Rep. Jim McClendon, R-Springville. Just hours later the Senate Health Committee on a voice vote approved the Senate companion bill, a substitute to SB 340 by Sen. Greg Reed, R-Jasper.


McClendon and Reed chair the respective House and Senate health committees and sponsored the Medicaid-revision bills.


Their bills will allow the Medicaid Agency to authorize regional care organizations to manage the health care of approximately 940,000 Medicaid recipients and avoid costly emergency room visits for routine care. The substitutes removed the original concept of allowing up to eight regional care organizations.


McClendon said his bill is designed to shift the cost risk of Medicaid from taxpayers to organizations that, if operated correctly, could make a profit on the federal and state appropriations from the Medicaid program.


The Business Council of Alabama supports reform of the state's Medicaid program to ensure long-term sustainability and to control costs by improving efficiency, addressing fraud and abuse, and ensuring access to quality health care for citizens.


Reed said affected providers participated in drafting the substitutes. The bills go to their respective full houses for consideration.


"It is the No. 1 responsibility of the Alabama Legislature to reform Medicaid to meet all efforts to protect recipients, providers, and taxpayers who are paying every dime of it," Reed said.


Later Wednesday, the House Ways and Means General Fund Committee on voice votes approved two Medicaid-related bills, HB 562 and HB 605, both by Rep. Steve Clouse, R-Ozark.


HB 562 would extend the Medicaid nursing home supplemental privilege assessment and monthly surcharge for two years. HB 605 would extend the hospital Medicaid assessment for three fiscal years but would allow alteration after two years if Congress mandates other changes.


The Senate Finance and Taxation General Fund Committee on Wednesday favorably approved HB 110 by McClendon that previously passed the House. His bill would make Medicaid fraud a Class C felony.


The bill also would appropriate $250,000 each of the next three fiscal years to the Attorney General's Medicaid Fraud Control Unit and appropriate $1 million next fiscal year to the Alabama Medicaid Agency. The $1 million will pay for an upgraded Medicaid information system that will screen each Medicaid application for fraud or errors, according to the bill's synopsis.


McClendon and Reed's Medicaid bills are seen as the fix for Alabama's growing financial crisis in the Medicaid program that was appropriated about $615 million this year, nearly one-third of the entire $1.7 billion General Fund. Medicaid also receives federal and provider funds.


HB 454 and SB 340 would establish deadlines for moving Medicaid in a new direction using regional care organizations that emphasize managed care between providers and patients. "It's about instead of showing up in emergency rooms, it's getting patients into doctors' offices," said state Health Officer Dr. Don Williamson. He is chairman of Governor Robert Bentley's Medicaid Advisory Commission.  


The House State Government Committee on Wednesday favorably reported  HB 303 that would require faster payment of invoices submitted by contractors to public agencies. The substituted bill by Rep. Bill Roberts, R-Jasper, goes to the full House for consideration.

Currently, there is a 45-day time limit for payment of invoices without interest penalties but Roberts said that deadline is frequently not met. His substitute would require an invoice to be submitted to the paying agency within 10 days and then the invoice to be paid within 35 days.

An amendment would require the government agency that is bidding a job to be paid by a state or federal grant to disclose up front that the funds aren't available to pay an invoice until the job is completed. In those cases, the 45-day payment requirement won't begin until the awarding authority actually has the grant money in hand.

Roberts said the up-front disclosure will allow a contractor to decide whether to bid on a project knowing that there probably will be a delay in payment.

HB 599, by Rep. Phil Williams, R-Huntsville, was well received by the House Economic Development and Tourism committee, earning a favorable report for consideration by the full House. The current requirements for a new or expansion industrial project to qualify for the capital credit are that a minimum of $100 million be invested and that a minimum of 100 new jobs be created. HB 599 will lower those levels such that projects of at least $50 million that create at least 50 new jobs will qualify for the capital credit. It is expected that the lower eligibility thresholds will encourage a number of companies to give the "go ahead" to mid-size projects that they have planned, which will strengthen the state's recovery by creating more jobs.


The bill also amends a provision that would extend the carry forward of the capital credit from the current four years to a total of five years. 


The BCA supports this legislation.


The Senate Fiscal Responsibility & Accountability committee gave a favorable report to HB 264, by Rep. Paul DeMarco, R-Homewood. The bill creates an independent tax appeals tribunal, separate and apart from the Department of Revenue, and updates the Alabama Taxpayers' Bill of Rights to conform to provisions of federal law and to promote tax fairness and compliance. The bill further provides that the governor will select successive tax appeals judges from a list of five qualified candidates recommended and vetted by a select nominating committee. The committee members expressed their thorough familiarity with the measure after having a public hearing earlier in this session on the companion bill, SB 223, by Sen. Bryan Taylor, R-Prattville.


The BCA, through its affiliation with the Business Associations Tax Coalition (BATC), supports this legislation.


The House Education Policy committee gave a favorable report to SB 47, by Sen. Dick Brewbaker, R-Pike Road. The bill proposes a constitutional amendment that upon ratification would include the local boards of education among the public entities that are not to have state mandates placed upon them, per Amendment 621 of the Constitution of Alabama. As another entity that would be shielded from unfunded mandates, the legislature must either specifically provide funding for the mandate, or the legislature must pass the act that creates the mandate by a two-thirds vote of each house.


The BCA supports this legislation.

The House referred the Drought Bill, SB 208 sponsored by Sen. Billy Beasley, D-Clayton, to the House committee on Commerce and Small Business.  Last week, the House companion of this bill, HB 382 by Rep. Mark Tuggle, R-Alexander City, received a favorable report by the House Committee on Commerce and Small Business. This legislation codifies the Alabama Drought Assessment and Planning Team process that has been in place through executive order for more than a decade. The bill will also require the development of drought plans for water utilities and the State of Alabama.
The General Fund Budget, SB 143 by Sen. Arthur Orr, R-Decatur, was substituted and favorably reported out of the House Ways and Means General Fund Committee. BCA supports a properly funded Alabama Department of Environmental Management, and this budget includes increased appropriations compared to the governor's budget recommendation. Unfortunately, the committee substitute decreased the amount of general funds to the Department compared to the previous version. If additional funds are not included in the budget for the Department, Director Lance LeFleur has stated that he will seek a permit fee increase to fill any gaps. Also, language in the substitute budget under the Geological Survey of Alabama broadened the agency's responsibilities regarding water assessments to include both surface and ground water assessments and that the agency coordinate this effort with the Office of Water Resources.
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