BCA-BACKED TAX COMMISSION BILL PASSES HOUSE AND HEADS TO SENATE FOR A PUBLIC HEARING    

The House Thursday on a 97-2 vote passed an important piece of legislation that would create an independent commission for adjudicating tax appeals and update provisions of the 22-year-old Alabama Taxpayers' Bill of Rights, or TBOR. The measure, HB105 by Rep. Paul DeMarco, R-Homewood, and known as TBOR II, would conform to federal law and promote tax fairness and compliance.

"This takes (appeals) outside the Department of Revenue, we're not creating a new agency," DeMarco said.

His bill and the Senate version, SB74 by Sen. Bryan Taylor, R-Prattville, are in the Senate Committee on Fiscal Responsibility and Accountability. A public hearing on SB74 is scheduled for Wednesday, but it would be more advantageous for HB105 to be taken up and reported out at that time in order to get a vote by the full Senate early in the 2014 session. 

The legislation has been a BCA priority for several years, as a majority of states have adopted some form of the independent tax appeals model, with Georgia being one of the latest. Others in the Alabama business community have joined forces with the BCA in support of the legislation under the banner of the Business Associations' Tax Coalition (BATC), which includes 27-member business and trade associations. The bill would create an independent tax appeals tribunal, separate and apart from the Alabama Department of Revenue, and would allow local governing bodies the option of using this tax appeals commission or their existing appeals process to settle local tax disputes.

Long-term members of Alabama's business community know that the attempts to pass this legislation actually precede this term, stretching back to the late 1990s. Over the years, the legislation has not been enacted for various reasons, including anti-business leanings of previous legislatures, misunderstandings, erroneous conclusions, apathy concerning the bill, and even simple bad luck.

Still, there are reasons for tempered optimism by supporters that the legislation will be enacted this time around. The measure is listed on the House Republican Caucus's 2014 "Commonsense Conservative" legislative agenda, a pro-business endorsement that dispels misguided conclusions and instead speaks to the merits of the legislation in promoting tax fairness for business taxpayers of all sizes and sectors.

The bill is moving faster this time than at any time in previous efforts, passing the House and receiving its first reading in the Senate on the third legislative day. In addition, Governor Bentley's chief of staff, David Perry, on Tuesday reiterated Bentley's willingness to sign the legislation upon it reaching his desk. These factors alone will not guarantee its enactment, so supporters of the legislation must stay ready to address legitimate concerns of legislators and to counter misinformation with the facts.

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

Governor Robert Bentley addressed the opening of the 2014 Legislature on Tuesday with his State of the State speech that included support for business-friendly initiatives and for a proven early education program that he said he'll seek to expand.

Bentley mentioned Alabama's five-star automotive and aerospace recruits that have provided thousands of jobs for more than 20 years and his hopes for the new Airbus assembly operation that will provide 1,000 more jobs in the Mobile area. He also announced small business initiatives.

"We have to keep working to make sure we are doing all we can to not only help people find jobs, but also help businesses continue to create those jobs, especially the nearly 400,000 small businesses in the state," Bentley said. "That is why I am creating the Small Business Advisory Council to address specific needs of Alabama's small businesses."

Bentley said The Small Business Advisory Council will make sure businesses have resources and support needed not only to grow but also to create well-paying jobs.

He said the Governor's College and Career Ready Task Force joins leaders in business, industry, and education to develop ideas to help prepare students for careers. Bentley promised legislation to create a Statewide Workforce Council of business and industry leaders who would advise educators and colleges on workforce needs.

Following the speech, BCA President and CEO William J. Canary said, "The business community found much to applaud in Gov. Robert Bentley's 2014 State of the State address, from increased funding for Pre-K programs to workforce preparedness and job creation. The Business Council of Alabama has wholeheartedly embraced these proposals for many years, and they are included in BCA's 2014 Legislative Agenda, which was released earlier this month. Since 2007, BCA has been a fierce advocate for Alabama's proven and successful voluntary Pre-K program and for the funding and resources it demands. As I have said time and again, the business community in Alabama is, by far, the largest consumer of the product created by our state's school systems, so it is imperative that graduates possess the skills and education the 21st century workplace demands. Alabama's business community continues its work to build an economic structure that allows business owners across the state to operate without needless government regulation and punitive, job-killing taxes, and we commend the governor for highlighting many of these important initiatives in [Tuesday's] speech. In his speech, the governor said 'Alabama is a great place for companies to do business'. I could not agree more."  

The Senate voted 33-0 on Thursday to pass SB7 by Sen. Dick Brewbaker, R-Pike Road, a proposed constitutional amendment that would require a two-thirds legislative vote before an unfunded mandate or expenditure of local funds could be imposed on a local school board. The bill passed the Senate in 2013 but wasn't considered by the full House. "It is exactly the same bill," Brewbaker said of SB7. The companion enabling legislation, HB26 sponsored by Rep. Mary Sue McClurkin, R-Indian Springs, received a favorable report from the House Education Policy Committee and was placed on the regular House calendar.

BENTLEY'S CHIEF OF STAFF PREVIEWS SESSION
FOR BCA GOVERNMENTAL AFFAIRS COMMITTEE

Governor Robert Bentley's chief of staff told the Business Council of Alabama's Governmental Affiars Committee that Bentley will support vital BCA education, workforce preparedness, and business tax initiatives in the 2014 legislative session that began Jan. 14.

Chief of Staff David Perry spoke to the BCA's Government Affairs Committee on the opening day of the legislative session that could end April 7, a month earlier than usual due to a dramatically changed political primary election qualifying season. Democrat and Republican Party qualifying ends Feb. 7, earlier than usual due to overseas military ballot requirements. The party primaries are June 3.

"I hope it will be short and sweet and let the Legislature get out of town," Perry said of the session.

Perry said Bentley doesn't have a lengthy legislative slate but he will continue to back education, tax and workforce preparedness issues that are on the BCA's 2014 legislative agenda. Early education is vital to businesses that need qualified workers.

Perry said Bentley will seek a substantial funding increase for voluntary pre-kindergarten for 4-year-olds and will support other valuable education initiatives - the Alabama Reading Initiative, the Alabama Math Science Technology Initiative, ACCESS, and Advanced Placement.

Bentley supports creating a Workforce Advisory Council that has been recommended by the College and Career Ready Task Force, Perry said. Its members are from education and business including the BCA.

The House on Thursday passed the Business Personal Property Streamlining Act, HB 108, sponsored by Rep. Greg Wren, R-Montgomery, sending it to the Senate for consideration. The bill that passed on a vote of 99-0 instructs the Department of Revenue to create an online system that will allow businesses to electronically file any annual business personal property tax return at no charge to the taxpayer or to the taxing jurisdiction. The new online filing system will help to simplify the filing process for businesses by providing a singular location to file their business personal property taxes. It must be operational by Sept. 30, 2016.

The bill establishes a 10-member, state-local advisory committee to review the system's design and operation. It must convene and organize itself no later than Sept. 30, 2014. The committee will include local tax officials and representatives from the business community, including an appointee from the Business Council of Alabama.

This bill also provides for an optional, non-itemized short form that can be filed by small business taxpayers if 1) the taxpayer has previously filed an itemized business personal property return showing the cost of the personal property asset totaling less than or equal to $10,000; and 2) the total cost of any personal property assets acquired during the current year result in the total amount of the entity's personal property assets being $10,000 or less. An eligible taxpayer meeting those two conditions must then agree to a business personal property tax liability that is based on total personal property assets being equal to $10,000. "This bill is a tremendous opportunity for us to streamline business personal property tax, which will have a positive impact on the Alabama small business community," Wren said at the bill's consideration by the House Commerce and Small Business Committee.

The BCA supports this legislation.

HB151 and SB46, entitled the Small Business Tax Relief Act, passed their respective chambers on Thursday. These companion bills increase the threshold from $1,000 to $2,500 in average monthly sales tax payments that requires affected businesses to estimate their sales/use tax liabilities and remit tax payments in advance to the Department of Revenue. The bills will relieve about 3,900 businesses from having to make the estimated payments. This action will result in a one-time $4.5 million cash flow loss to the Education Trust Fund.

The House approved HB151 by Rep. Barry Moore, R-Enterprise, by a vote of 96-2. "Because small business owners already shoulder the responsibilities of providing jobs, servicing their customers, and keeping our economy going, we should not make them jump through unnecessary hoops when collecting sales taxes on behalf of the government," Moore said. HB 151 now goes to the Senate for consideration.

The Senate passed SB46 by Sen. Bryan Taylor, R-Prattville, by a vote of 34-0. However, the Senate amended the bill to delay the effective date of implementation to Oct. 1, 2015, shifting the estimated $4.5 million reduction in sales tax revenue to Fiscal Year 2016 and leaving the FY 2015 education budget unaffected. "Small businesses will be able to use these funds to upgrade equipment or provide healthcare coverage to their employees" Taylor said, addressing the Senate. SB46 goes to the House for consideration.

This Senate on Thursday passed SB20, the drought bill by Sen. Billy Beasley, D-Clayton, on a vote of 28-0. This legislation would codify the Alabama Drought Assessment and Planning Team (ADAPT) process that has been in place by executive order for more than a decade. The bill also would require the development of drought plans for water utilities and the State of Alabama. It should be noted that Sen. Beasley amended the bill to specifically add the director of the Choctawhatchee-Pea Water Authority to the ADAPT, which would, in effect, give that authority two members on ADAPT. All other agencies are allowed only one appointment. The House companion of this bill, HB49, by Rep. Alan Boothe, R-Troy, was referred to the House Committee on Agriculture and Forestry.

The General Fund budget, HB235, sponsored by Rep. Steve Clouse, R-Ozark, was introduced this week. The budget contains two items that have been of interest for the BCA's Environmental and Energy Committee - funding for the Alabama Department of Environmental Management and the potential statewide water assessment program. ADEM received level funding of $1 million in the initial version of the budget recommended by the governor. In the area of water resources, BCA has supported agencies collecting the appropriate data needed to assist the State in making informed decisions regarding water policy in Alabama. The budget includes a $1 million appropriation to the Geological Survey of Alabama, to be spent in coordination with the Office of Water Resources, to be used to support the state water assessment program.