TAXPAYERS' BILL OF RIGHTS LEGISLATION REMAINS UNFINISHED SENATE WORK

 

Work continues in the Senate to advance the updated Taxpayers' Bill of Rights to final passage and send it to Governor Robert Bentley for consideration.

TBOR II as it's called is HB105 sponsored by Rep. Paul DeMarco, R-Homewood. The House-passed TBOR II 97-2 and the Senate Fiscal Responsibility and Accountability Committee favorably reported the bill, sending it to the Senate. On Tuesday, HB105 was before the Senate as the sole bill on a special order calendar. After nearly four hours of debate, the bill was carried over but it remains in position for Senate action.

"Modernizing the TBOR and creating some form of independent tax appeals model has been the business community's priority for years," BCA President and CEO William J. Canary said. "And this (bill) is important to smaller taxpayers who cannot afford to file a lawsuit."

TBOR II, which would update the original TBOR passed in 1992, for years has been on the business community's must-do list. TBOR II would abolish the Department of Revenue's Administrative Law Division and change it to an independent Alabama Tax Appeals Commission within the executive branch.

Sen. Bryan Taylor, R-Prattville, said no one is accusing the current Department of Revenue Administrative Law Judge of being biased but creating an independent tax appeals commission would serve well in the future. "This would separate the tax appeals judge so he is not a state employee serving at the pleasure of the tax collector," Taylor said.

Members of 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.

Attempts to pass this legislation stretch 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.

A majority of states - 31 - have some version of an independent tax appeals commission.

"Not passing this legislation in Alabama will create an economic development disadvantage for our state in attracting new business" Canary said. "It's important to maintain a positive tax environment for existing business because Georgia, Mississippi and now, likely Tennessee will adopt a form of this legislation."

On Thursday, Sen. Scott Beason, R-Gardendale, introduced his long-anticipated bill to repeal Alabama's College and Career Ready Standards. SB380 would mandate the State Board of Education terminate the adoption and implementation of the standards it adopted in 2010, revert to previous standards, and not update Alabama's course of study until Jan. 1, 2017.

The Business Council of Alabama opposes any attempt to repeal Alabama's current College and Career Ready Standards, also known as Common Core.

"The State Board of Education adopted the standards which affirmed new, tougher reading and math standards for Alabama students," BCA President and CEO William J. Canary said. "The new standards required more critical thinking, problem solving, and teamwork instead of simple fill-in-the-blank memorization. The goal is to prepare students for a 21st Century global workforce, while also keeping them on a level playing field with students from the other 49 states."

The BCA is a founding member of Alabama GRIT (Graduate Ready. Impact Tomorrow) and continues to work closely with a diverse coalition of partners in support of Alabama's high academic standards. You can find a list of all the coalition partners here. They range from business groups to education groups, parent organizations and administrators, and military leaders.

State Superintendent of Education Dr. Tommy Bice said Thursday that the legislation would have a detrimental impact on Alabama's public schools. Because Alabama's previous math and English standards already had a correlation rate of 96 percent and 92 percent, respectively, to the Common Core, the state would be unable to adopt the previous standards set in 2007 and 2009, and therefore would be forced to revert to math standards adopted in 2003, and English standards adopted in 1999.

The House 74-18 passed the government contract neutrality bill by Rep. Mack Butler, R-Rainbow City, and the Senate Committee on Governmental Affairs favorably reported the bill 6-0, sending it to the full Senate. Butler's HB195, the Fair and Open Competition Governmental Construction Act, was debated Thursday in the Senate but it was carried over at the call of the chair. The bill would require state and local public agencies, with some valid exceptions, to remain neutral by prohibiting requirements to use union labor in public improvement contracts, unless there is an imminent threat to public health or safety.

There is a Senate companion bill, SB161 by Sen. Paul Sanford, R-Huntsville. "This makes sure they can bid on all government contracts, be at the table to put in a good, solid bid, and make sure their workers are on the jobsite," Sanford said. Butler said project labor agreements can increase contract costs by 20 percent.

A PLA could force contractors to recognize unions and use union halls to hire workers for projects. If mandated in Alabama, PLA requirements would make it nearly impossible for 90 percent of Alabama's construction employers that choose not to join a labor union to compete for projects paid for with their own tax dollars. The legislation would ensure that Alabama is protected against the PLA initiative on public construction projects and ensure a level playing field. "In the contract you can't specify one way or another that you can or can't use a union," Sanford said.

The House Commerce and Small Business Committee on Wednesday favorably approved SB48 sponsored by Sen. Clay Scofield, R-Guntersville, sending it to the full Senate for consideration. The bill would make it illegal for business owners to avoid unemployment taxes by dissolving one business and creating a new entity with largely the same assets. The bill says a new entity that acquires at least 65 percent of the organization, trade, employees, or the former business itself would inherit the unemployment compensation experience rating of the original business. "Right now there's a yellow line as far as when a company purchases another company what they have to do ... to get the same unemployment compensation rate," Scofield said. The House companion bill, HB109 by Rep. Wes Long, R-Guntersville, was favorably reported by the House Commerce and Small Business Committee and is on the House calendar.

SB122, by Sen. Arthur Orr, R-Decatur, provides a limited tax credit and refundable tax credit, beginning in tax year 2015, against the state income tax for "qualified research expenses" incurred by businesses. The credit would be parallel to the federal research and development tax credit. The bill provides a two-tiered research credit, with an enhanced credit allowed if the taxpayer made "basic research payments," as determined by the Internal Revenue Code, to a public university or to research institutes. Any amount of the enhanced credit that exceeds the taxes due may be carried forward for up to five consecutive years. 

A taxpayer that employs fewer than 150 employees whose research credit exceeds the taxes otherwise due may receive a refundable credit of 75 percent of the excess. The bill would phase-in caps on the aggregate amount of the research credit annually allowed, from no more than $2.5 million to not more than $5 million per year, beginning in tax year 2019. The bill would further cap the aggregate amount of the refundable credits from $1 million, beginning in tax year 2015, to $2 million in tax year 2019. This bill now moves to the House for further consideration. The Senate passed the bill 32-0 and it was assigned to the House Ways and Means Education Committee.

The lawsuit lending bill, SB231 sponsored by Sen. Cam Ward, R-Alabaster, was favorably reported by the Senate Banking and Insurance Committee on Thursday.

The BCA's 2014 State Legislative Agenda's policy statement on judicial and legal reform states that the BCA will support efforts to prohibit third-party litigation financing or efforts to provide meaningful regulation in order to protect the interests of consumers and the public.

The position on lawsuit loans is also a major issue for the U.S. Chamber of Commerce's Institute for Legal Reform that seeks openness and transparency in a little-known but potentially abusive part of the legal landscape. "Lawsuit lending should be regulated like any other consumer financial product," the Chamber's ILR said.

Lawsuit lending is generally unregulated and victimizes plaintiffs who borrow against the potential award in a lawsuit but often at usury rates of up to 200 percent while their lawsuits are pending. Potentially owing a significant amount of money to repay the loan can influence a plaintiff to reject a fair settlement and gamble that a much higher monetary verdict will be rendered by a jury.

Ward's bill would treat a lawsuit loan as a consumer loan and the lender would be classified as a consumer lawsuit lender. The bill would cap the loan finance charge at 10 percent.

"The impact right now is you have people that are seeking out plaintiffs in court claims and are saying while the lawsuit is going on I'll lend you this money to cover your bills," Ward said. "It upsets the court settlement process. You go to settlement and you say 'I'm not settling this'."

The ILR's consumer lawsuit lending website at www.LawsuitLendingTruth.com has information about the ILR's strategy to disrupt the lawsuit lending industry.

Oklahoma passed legislation in 2013 and Colorado requires lawsuit lenders to register under the state's consumer credit laws. The Tennessee lawsuit lending alignment bill, HB 1242, passed out of the House Consumer and Human Resources Committee on Tuesday. 

On Thursday, the Senate voted 28-0 to pass SB79, by Sen. Dick Brewbaker, R-Pike Road. His legislation would allow a 5 percent preference for resident vendors that submit bids totaling $100,000 or less, for maintenance and repair contracts for state agencies. The bill would require a resident vendor to be in good standing with the State of Alabama by not having defaulted or otherwise failed to fulfill the requirements of previously awarded bids.

The legislation is intended to help restore opportunities for resident vendors to contract to perform repair and maintenance services for state agencies that have been awarded to a few large publically held companies in recent years.  This bill moves now to the House where it is assigned to the State Government Committee.

HOUSE MINORITY LEADER TALKS BUSINESS, POLITICS

House Minority Leader Craig Ford on Feb. 18 discussed business and political issues at the Business Council of Alabama's Governmental Affairs Committee's weekly legislative session meeting.

Ford, D-Gadsden, was chosen Minority Leader by House Democrats in 2010 when Republicans gained a supermajority in the House and Senate, giving the GOP an unassailable ability to pass legislation if Republicans stick together.

Ford, co-owner of an insurance agency and a weekly newspaper in Gadsden, discussed the perception that only Republicans are pro-business. He said many Democrats in the House like himself own businesses.

"Because you have a 'D' beside your name doesn't mean you're not business oriented," Ford said. "We have supported business issues, workers' compensation and unemployment compensation. I deal with it myself."

Ford invited business representatives and association directors to attend the weekly Democratic Caucus meeting held every Wednesday during legislative sessions.

"We have an open door policy," Ford said. "We don't know what issues are before you and your company if you don't come to us. We want you to come back and talk about your legislation."

Ford said that he is the first Democrat Minority Leader in 136 years, noting that Democrats are in the superminority, a political situation he is working to change this election year.

"Our task at hand is to get out of the superminority, that way we can get heard on a daily basis," Ford said. "Our issues are important as everyone else. We are trying our best to become a balance in the legislature, I think everyone wins with a balance.

"Do I think the Democrats will take back the House and Senate, I don't know?" he said. "Do I think they'll come out of a superminority? Yes, I do."

Ford said he meets every week with House Speaker Mike Hubbard, R-Auburn, a former Minority Leader, to discuss the week's agenda. It allows him to inform the Democratic Caucus.

"The Speaker has been good to us, he's been good to me as Minority Leader," Ford said.

Ford said with the 30-day session at its midpoint, he expects budgets to dominate the attention.

"We'll tackle the Education Trust Fund budget and if there are any complicated issues it will be teacher pay raises," Ford said. "Both parties will have to address funding for the General Fund. We cannot continue to go as we have in the past.

"The next 15 days, I imagine it will be mostly budget oriented," he said.

The Senate Finance and Taxation Education Committee on Wednesday favorably reported HB151, the Small Business Tax Relief Act, sponsored by Rep. Barry Moore, R-Enterprise. The bill previously passed the House 96-2. The bill, if it becomes law, would increase the average monthly tax liability threshold, from $1,000 to $2,500, for businesses that make advance estimated sales tax payments. By increasing the threshold, an estimated 3,900 businesses would be relieved from making estimated payments and allow them to redirect those resources to other areas of their businesses. The fiscal note says that the bill would temporarily defer an estimated $4.5 million in sales tax receipts to the Education Trust Fund.

The Senate committee amended the bill to delay its effective date until Oct. 1, 2016, in order to allow the FY 2015 and FY 2016 education budgets to remain unaffected by the deferred revenue. Sen. Bryan Taylor, R-Prattville, is sponsoring the Senate version of the bill, SB46, which is pending House committee approval. Supporters tout the financial and administrative relief the legislation affords small businesses in Alabama,

The BCA strongly supports HB151.

The Senate on Thursday placed SB163, the counterfeit airbag bill, on the Senate calendar, putting it in position for consideration when the Senate returns to the State House on Tuesday. The bill sponsored by Sen. Jerry Fielding, R-Sylacauga, passed the Senate 31-1 and was favorably reported by the House Judiciary Committee. Rep. Randy Wood, R-Anniston, has the House companion, HB370.

The bills would make airbag fraud a crime if an unauthorized, inadequate, or used airbag is installed in a vehicle after the original airbag has deployed, and the seller doesn't disclose the nature of the airbag to the buyer. According to the bill, the offense of "airbag fraud" would make it a crime to sell, install, or reinstall an airbag in a vehicle that causes the diagnostic system to inaccurately recognize a functional airbag, or sell a counterfeit airbag, or no airbag at all with the intent to deceive. The bill, if it becomes law, also would provide enhanced criminal penalties if the fraud causes a serious physical injury to a vehicle's occupant.

The bill says it would be a Class A misdemeanor to install a counterfeit or unworkable airbag punishable by up to 1 year in jail and a fine of no more than $6,000. The bill would make it a Class C felony if a counterfeit airbag caused a serious injury. The minimum penalty is between 366 days and up to 10 years in jail and a fine of not more than $15,000.

The Business Council of Alabama is monitoring the bills. 

The Alabama Senate in a Joint Resolution on Thursday commended Charles D. McCrary for his "outstanding professional achievement" following his recent retirement as president and chief executive officer of Alabama Power Co. The resolution sponsored by all 35 members of the Senate lauds McCrary for a distinguished career that began in 1970 while a freshman at Auburn University. McCrary served 13 years as president and CEO of Alabama Power.

The resolution states: "That Mr. Charles D. McCrary is highly honored and commended, and this resolution is offered to him in deepest admiration and appreciation, along with sincere best wishes for continued success in all future endeavors."

BCA President and CEO William J. McCrary said, "Charles McCrary is one of the most extraordinary people I've ever known ... like so many others in Alabama, we have been the beneficiary of his inspirational example, counsel, and desire to make Alabama even greater than he found it. Charles in many ways is a teacher. Over the years he has taught us to meet every challenge we face with good humor, optimism, and kindness. He taught us that that we can turn impossible challenges into opportunities."

McCrary is an engineer, earned a law degree, and serves on numerous boards including the Auburn University board of trustees.

In recent years, the Municipal Separate Storm Sewer System (commonly referred to as the "MS4") permitting program has grown in complexity and become unnecessarily onerous on local governments and businesses all across Alabama. The EPA has been pushing policies that have not been officially adopted as regulation including asking local governments to redundantly regulate businesses already regulated by ADEM. Recently, local governments solicited business interests to jointly seek a workable solution to this problem.

The agreed-upon solution, the Regulatory Relief Act, amends the current stormwater act (Chapter 11-89c of the Code of Alabama) to: 1) apply statewide and not just Jefferson and Shelby counties; 2) limit what the cities and counties may do in carrying out the program to only that which is required to meet the Clean Water Act (CWA); 3) limit the fees that the various MS4s may charge - as of now they are unlimited; 4) prohibit the inclusion of Environmental Protection Agency guidance or mandates in the various MS4 permits unless such guidance and/or mandates have gone through proper rulemaking; and, 5) require that the local MS4 programs primarily rely upon ADEM for the permitting and enforcement components of the local construction stormwater program, in other words, no double-regulation of those sites. This legislation was drafted by members of the business community and MS4s and has been reviewed and signed off on by ADEM. This legislation goes a long way in remedying many of the issues that both the business community and the MS4s have with this program in its current state.

This week, the Senate Committee on Energy and Natural Resources held a hearing on the legislation. As expected, the environmental groups mobilized in opposition to the Regulatory Relief Act. At the hearing they alleged that the legislation would somehow force the individual MS4s to not comply with the CWA, although the Regulatory Relief Act explicitly requires that in carrying out the local MS4 programs, the municipalities must comply with federal law. This is a misrepresentation of the proposed legislation. In fact, the proposed legislation simply takes what currently exists in Jefferson and Shelby counties and applies it to other MS4s across the state. This doesn't materially change any of the regulatory requirements that currently exist in Jefferson and Shelby counties.

The committee adopted a substitute bill, which clarified some of the language of the original bill as introduced, and then carried over SB355 to allow proponents of the bill to address the misinformation provided by the opponents.

Consistent with our agenda, the BCA supports the Regulatory Relief Act and will support passage of this legislation. 

The General Fund budget, HB235 sponsored by Rep. Steve Clouse, R-Ozark, was substituted and favorably reported out of the House Ways and Means Committee. There are two areas in the budget that have been of particular interest to the Environmental and Energy Committee: Funding for the Alabama Department of Environmental Management (ADEM) and the potential statewide water assessment program. It appears that the substitute slightly increased ADEM's funding. 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. These funds are to be used to support the state water assessment program.

The Birmingham Water Board bill, SB344 by Sen. Jabo Waggoner, R-Vestavia Hills, received its second reading this week. This bill would apply to municipal water works boards which serve water customers in four or more counties in addition to the one where the authorizing municipality is principally located.  The legislation would: 1) provide for the appointment to the board of an additional member by the county commission of each county where water customers are served, other than the county where the authorizing municipality is principally located; 2) limit the term of all board members to two, four-year terms; 3) limit the compensation and expense allowance of board members; 4) specify that board members would be covered by the State Ethics Law; 5) provide for notice and a public hearing prior to the board adopting any rate increase; and, 6) provide that the board be subject to the Open Meetings Law.

Several House variations of SB344 have been introduced and are pending committee action:

* HB482, by Rep. Jim McClendon, R-Springville, would: 1) provide for the appointment to the board of an additional member by the county commission of each county where water customers are served, other than the county where the authorizing municipality is principally located; and, 2) limit the term of all board members to two, four-year terms. HB482 was referred to the House Health Committee. 

* HB483, by Rep. David Standridge, R-Hayden, includes all of the provisions of SB344 but also includes a withdrawal fee that the Birmingham Water Works Board would pay to a county that withdraws more than 25 million gallons of water per day (5 cents per 1,000 gallons). The bill was referred to the House Ethics and Campaign Finance Committee. 

* HB484,by Rep. Paul DeMarco, R-Homewood, was referred to the House Judiciary Committee. HB484 differs from SB344 in that the House version of the bill does not call for the expansion of the board's membership.  

* HB492, by Rep. Randall Shedd, R-Cullman, appears to be consistent with HB483. This bill was referred to the Ethics and Campaign Finance Committee.  

The Recycling Labeling bills would require that no person could sell any plastic container unless it contains certain markings. The stated intent of this bill is to prevent contamination of recyclable plastic containers. HB375 sponsored by Rep. Alan Boothe, R-Troy, was favorably reported out of the House Committee on Commerce and Small Business and awaits consideration by the full House. This week, SB284 sponsored by Sen. Jimmy Holley, R-Elba, passed the Senate 23-2 and was referred to the House Committee on Commerce and Small Business.

The wind energy bills would regulate wind energy conversion systems as well create a mechanism for removing abandoned systems. Bill were introduced in both the Senate and the House - SB12 sponsored by Sen. Phil Williams, R-Rainbow City, and HB106 sponsored by Rep. Becky Nordgren, R-Gadsden. SB12 has been discussed, substituted and favorably reported out of the Senate Committee on Energy and Natural Resources. The main difference in the bill that was reported out of the committee and the bill that was introduced was the state agency responsible for permitting was changed, from the Alabama Department of Environmental Management to the Public Service Commission.

Senate Joint Resolution 7 introduced by Sen. Gerald Dial, R-Lineville, would create the Alabama-Georgia Joint Legislative Committee. This committee would be charged with working with counterparts in Georgia to discuss and review issues that are common to both states. This resolution has been carried over by the Senate Rules Committee.