May 5, 2015 - 8:30 a.m. - The Business Center of Alabama
2 North Jackson St. Montgomery, AL 36104

Sen. Jabo Waggoner, R-Vestavia Hills
Senate Rules Committee Chairman



Manufacturers no longer will have to look over their shoulders worrying whether they're going to be sued for injuries caused by a product they didn't make or sell now that SB 80 has been signed into law. SB 80 received final passage in the 2015 Legislature this week and was signed by the governor today.


Business Council of Alabama President and CEO William J. Canary said SB 80 will prevent the souring of Alabama's business climate.


Canary testified this week against potentially burdensome health regulations that would micro-manage private healthcare contracts and could increase health insurance costs to both employees and employers.


Canary, testifying in another Senate committee on a flat-tax bill, said the legislature has an opportunity to address the long-standing structural problems with Alabama's budgets of which over 90% of funds are earmarked. 

Speaking to the Governmental Affairs Committee this week, House Rules Committee Chairman Mac McCutcheon, R-Huntsville, listed the issues he believes will dominate the remainder of the 2015 regular legislative session. They include final passage of an update to the 2013 Accountability Act, the Open Meetings Act, legislative oversight, prison reform, Governor Robert Bentley's package of taxes, and budgets.


Details of these and other issues are in this week's Capital Briefing that recaps the Legislature's eighth week in session.


Dual-Enrollment Bill Gains Senate Committee Release


The Senate Education and Youth Affairs Committee this week favorably reported SB 246 sponsored by Sen. Arthur Orr, R-Decatur. SB 246 would allow students who earn the credits enabling them to graduate high school early the opportunity to fully enroll in a two-year college while in the 11th or 12th grade. Currently, students are allowed to earn college credits while still in high school. SB 246 would allow students who graduate early the opportunity to earn a two-year college degree by the time they would have normally graduated from high school.


The bill would require that state payments for a high school student would go to the two-year school.

Two-Year College Board Legislation Carried Over


The House and Senate passed SB 191 sponsored by Sen. Trip Pittman, R-Daphne, in different forms, requiring acceptance of changes or assignment to a conference committee.


The House had substituted the Senate-passed bill and returned it to the Senate. But Sen. Paul Bussman, R-Cullman, threatened a filibuster and the bill was carried over at least until Tuesday when the Legislature returns.


SB 191 would separate supervision of the two-year community and technical colleges from the elected state school board and replace their governance with an unpaid 10-member board of trustees appointed by the governor.

The bill would establish the existing Alabama Aviation College as an independent institution within the Alabama Community College System that would directly report to the ACCS chancellor.


BCA-Backed Bill to Prevent Federal Overreach Goes to Governor


SB 52 by Sen. Cam Ward, R-Alabaster, overwhelmingly passed the House by a vote of 99-0 and is now sitting on the governor's desk awaiting signature.  It previously passed the Senate by a vote of 31-0. 


Known as the Energy Security Act, SB 52 and its House companion HB 120 by Rep. Randy Davis, R-Daphne,are needed due to a new regulation by the Federal Energy Regulatory Commission, which essentially shifts the jurisdiction of planning, design, and development of new transmission projects from the state to the federal government.


When it becomes law, this act will prevent these risks posed by this federal overreach from being placed on consumers and ensure that Alabama electricity providers maintain the right to construct new transmission lines for Alabama consumers.

Senate Confirms Dr. Craig Martin for Environmental Management Commission


On Wednesday, the Senate confirmed Dr. Craig Martin to the Alabama Environmental Management Commission.  A native of the Birmingham area, Dr. Martin is a founding member of Liberty Animal Hospital P.C. in Birmingham where he currently practices veterinary medicine.  After graduating from the Auburn University College of Veterinary Medicine, he practiced at the Martin Animal Hospital and Pinson Animal Hospital. 

The seven-member Environmental Management Commission, whose members are appointed to six-year terms by the governor and subject to confirmation by the Alabama Senate, is charged with developing the state's environmental policy, hearing administrative appeals of permits, administrative orders and variances issued by the Department, adopting environmental regulations and selecting an ADEM director. For more information on the commission visit

Birmingham Water Works Board Legislation Advances


After holding a public hearing on Wednesday, the House Commerce and Small Business Committee on Thursday favorably reported a substitute to SB 89, by Sen. Jabo Waggoner, R-Birmingham, which would end the Birmingham City Council's exclusive control over appointments to the Birmingham Water Works Board. The bill would subject board members to provisions of the Alabama Ethics Law and limit their terms and compensation.


SB 89 would expand the Water Works Board to include new members from Jefferson County and create two seats for other counties also serviced by the Water Works. The Birmingham City Council currently appoints the five-member board.


BCA Testifies Against Health Mandate Bills


Business Council of Alabama President and CEO William J. Canary testified this week against bills that would mandate the fine-print in health care contracts and potentially increase health insurance costs to employees and employers.


So far, there have been eight health mandate bills in the Legislature this session. A Senate committee favorably reported two of them and a House committee favorably reported one this week.


The Health section of the BCA's 2015 State Legislative Agenda states that "BCA will actively oppose mandating employer-provided health care benefits or any legislation, resolution or regulation that would increase health plan costs."


At the Senate Health Committee public hearing on two mandate bills, SB 295 and SB 296, Canary said the BCA has a long-standing policy against healthcare mandates. He said businesses are struggling to offer health insurance to employees at a reasonable cost.


The Senate committee favorably reported SB 295 and SB 296, which were sponsored by Sen. Paul Bussman, R-Cullman.


SB 295 as originally introduced would prohibit a health insurance entity from establishing a quality rating system for dentists using only cost of services. A Senate committee amendment to SB 295 says that a health insurance company could not use cost as the "only" factor in establishing a quality rating system.


SB 296 would prohibit a private insurer from being able to dictate set costs of non-covered services of a dental provider for its contracts with those providers.  The House Insurance Committee favorably reported the companion to SB 296, HB 397 sponsored by Rep. Anthony Daniels, D-Huntsville.

To read more about BCA's position against health mandates, see this recent BCA blog post: "Post-Obamacare Federal and State Health Care Mandates Still Bad for Job Creation"


Bill That Protects Alabama's Manufacturers becomes law


The Legislature this week gave final approval to a priority on the BCA's State Legislative Agenda for 2015 - innovator liability legislation - and earned praise from Alabama's business community for clarifying the Alabama Supreme Court's adoption of a novel legal theory that could have hurt Alabama businesses and the state's business climate.


Business Council of Alabama President and CEO William J. Canary thanked Sen. Cam Ward, R-Alabaster, and Rep. Jack "J.D." Williams, R-Vestavia Hills, for sponsoring bills to reverse the Supreme Court's adoption of the innovator-liability theory.


The theory holds that a manufacturer could be held liable for a product it did not make or sell.


Ward sponsored SB 80 and Williams sponsored HB 110, the companion bill. The Senate passed Ward's bill 32-0 and the House passed it 86-14. Governor Bentley signed the bill into law.


"Today I signed SB 80," Governor Bentley said. "It's an important bill for our pro-business state and it will help recruit businesses to Alabama." 


"By passing this important legislation, the Alabama Legislature has stood with Alabama's businesses by reversing the Alabama Supreme Court's adoption of a novel tort theory, which could have had chilling effects on Alabama's business climate," Canary said. "Had this not been swiftly corrected by the Legislature, Alabama would have been at a great disadvantage in attracting new business investment, which is key to bringing economic growth and jobs to our state."


Tommy Lee, BCA First Vice Chairman and President and CEO of Vulcan Inc., a manufacturer in Foley, agreed.

"Alabama manufacturers are fortunate that this legislation will now be law," he said. "To think that a company could be held liable for injuries allegedly caused by a product it neither manufactured nor distributed is alarming, and we thank Speaker (Mike) Hubbard and Pro-Tem (Del) Marsh for making this pro-business bill a priority."

To read more about this Bill:
"Alabama legislature passes bill avoiding 'looming disaster' for state's business climate"
"Ala. lawmakers send bill reversing state SC's 'innovator liability' decision to governor"

Prison Reform Bill Passes House Committee


Prison reform legislation that has already passed the Senate was given a favorable report by the House Judiciary Committee on Thursday.


SB 67 by Sen. Cam Ward, R-Alabaster, would reduce the state prison system's capacity from about 190 percent to about 160 percent in five years. If it becomes law, penalties for some minor crimes would be reduced and greater supervision of inmates would occur. It also would create a Class D felony, a new category, for some nonviolent property and drug offenses.


The House Judiciary Committee approved a substitute version of the bill with changes related to juvenile issues, driver's licenses for released inmates, mental health care, and medical costs incurred by those on parole or probation.


Prison reform is of vital interest to Alabama as the real threat of a federal takeover of prisons would result in more than $400 million of new taxes to build additional prison capacity.

BCA President and CEO William J. Canary outlined the bill's impact on business in an op-ed 
that was printed in several Alabama newspapers.

For more information on the Prison Reform legislation, see this previous Capital Briefing

Billy Canary, president and CEO of the Business Council of Alabama, follows up with Andrew Barbee from the Council of State Governments Justice Center and State Senator Cam Ward of Alabaster about Justice reform in Alabama and specifically "Project Justice Reinvestment."

A discussion with Sen. Cam Ward and Andrew Barbee from the Council of State Government's Justice Center about the current state of Alabama's prison system. This episode is the first in a continuing series on this topic.

Municipalities Required to Notify Affected Businesses When Annexation Alters Police Jurisdictions


The Senate County and Municipal Government Committee this week favorably reported a bill that would require a municipality that alters its police jurisdiction to notify businesses and individuals affected by the annexation or de-annexation.


The House voting 67-20 previously passed HB 377 and sent it to the Senate where it was assigned to committee.


HB 377 sponsored by Rep. Ron Johnson, R-Sylacauga, would require that changing the police jurisdiction could occur only once per year, on Jan. 1, and that the municipality must provide public notice of the change in the police jurisdiction online and in a newspaper along with a map of the new municipal and police jurisdiction limits.


Restrictive Covenants Bill Would Replace Current Law


SB 367 by Sen. Phil Williams, R-Rainbow City, and its House companion, HB 352 by Rep. Chris England, D-Tuscaloosa, relate to restrictive covenants, like non-compete clauses, in contracts between businesses and their employees, business partners, buyers/sellers, and others.


These bills would replace existing law with a more specific list of protectable interests and presumptively reasonable restraints on length-of-time and geographic area. Both bills have been favorably reported by their respective chambers' Judiciary Committees.


SB 367 was on the Senate calendar on Thursday, but no action occurred.


SB 367 and HB 352 originate from legislation proposed by the Alabama Law Institute. The ALI supports these bills because of the lack of clarity in Alabama law on these types of restrictive covenants. 


Currently, a wide disparity of results flow from various Alabama courtrooms. Current law is not consistent and judges have discretion in their reasoning and decisions. A new law would provide a guide for judges to follow in interpreting these covenants and add clarity for those in the business community who not only draft these agreements but also face the potential of costly litigation over them.


BCA members are encouraged to review this legislation to analyze its impact on their particular industries.

Other Bills of Interest


HB 506 by Rep. Napoleon Bracy, D-Prichard, relates to unemployment compensation and retirement benefits. Under current law, an individual eligible for or receiving any pension, retirement, or other such benefits is disqualified from total or partial unemployment compensation, and the individual must repay any unemployment benefits if he or she receives any retroactive pension or retirement payments covering periods of time that the individual received unemployment benefits.


This bill would clarify that any such disqualification or repayment would only occur if the pension or retirement benefits payments were made under a plan that is maintained or contributed to by a base period employer, 100 percent employer-financed, and not contributed to by the worker. This bill was given a favorable report on Wednesday by the House Commerce and Small Business Committee and is on the House calendar.


HB 522 by Rep. Jack "J.D." Williams, R-Vestavia Hills, relates to corporate officers and the procedures they must follow when opting in or out of workers' compensation insurance. The bill would allow officers to opt in or out of coverage at any time instead of the current annual requirement. It also would require notice to the workers' compensation insurance provider rather than the Department of Labor.

The bill received a favorable report on Wednesday from the House Commerce and Small Business Committee and is on the House calendar.


Flat Tax Bill Carried Over in Committee


Business Council of Alabama President and CEO William J. Canary testified at a Senate committee public hearing Wednesday on a proposed flat tax constitutional amendment.


Canary said that any discussion of taxes should include Alabama's excessive earmarking of tax revenue and the status of two state budgets. Canary said the BCA volunteers to be at the discussion table when the bill is being refined by its sponsor.


The BCA's long-standing tax policy states that should any tax or tax reform initiative be proposed, the BCA will not consider support unless it is applied fairly without levying a disproportionate burden on any individual segment of Alabama's economy. Any tax reform proposal must be tied to governmental accountability and the elimination of wasteful spending.


Sen. Bill Hightower, R-Mobile, introduced SB 409. But after Senate Finance and Taxation Education Committee member questions, he said he wouldn't move the bill and would consider changes.


Hightower's bill as introduced would replace the current tax rate of 5 percent for individuals with a rate of 2.75 percent and the current rate of 6.5 percent for businesses with a rate of 4.59 percent.


The Legislative Fiscal Office said SB 409 as introduced and if ratified by voters would reduce receipts to the Education Trust Fund by an estimated $146.5 million annually beginning in fiscal year 2018 but increase corporate tax receipts by $14.5 million.


Jeannine Birmingham, President and Chief Executive Officer of the Alabama Society of CPAs and Chair of the BCA's Tax Committee, said a tax policy should be fair and equitable and not increase the regulatory burden.

Alabama Retail Association President Rick Brown, who is chairman of the Business Associations' Tax Coalition, said tax discussions are important as long as the conversation includes tax fairness. The BCA is a member of the BATC.

Business Owners Have Concerns With Bill That Repeals Tax Discounts


Many small business owners expressed concern with HB 553 during a public hearing in the House Ways and Means Education Committee on Wednesday.


The bill, sponsored by Rep. Ken Johnson, R-Moulton, would eliminate $39 million in administrative discounts for businesses that remit certain taxes to the Department of Revenue in a timely manner.


Retail businesses are allowed discounts if they pay the state sales tax they collect before the 20th day of the month in which the tax is due. The discount is 5 percent of the first $100 of taxes due, and 2 percent of taxes levied over $100, to a maximum of $400 per month.


Each business, no matter the number of store locations it owns, is only allowed one $400 monthly discount. The maximum for the discount was set in 2001 by executive order.


Rick Brown, president of the Alabama Retail Association, spoke in opposition to HB 553 at the public hearing. He explained that retailers receive the discount because they collect sales tax for the state and remit it to the Department of Revenue.


"By removing this discount you are placing an unfunded mandate on small businesses," Brown said. "The people that this bill affects are your local small retailers and restaurants. I highly recommend that you talk to a few of them back in your district before casting this vote."


HB 553 also would eliminate discounts for suppliers, licensed distributers, and licensed importers who timely file returns for gasoline and motor fuel taxes. HB 533 also would end the discount that qualified wholesalers get when they buy tobacco tax stamps as well as the discount to persons subject to the state lodging tax.

At a time when the state General Fund is in dire need of additional funding, this bill would increase receipts to the Education Trust Fund by almost $47 million, while decreasing funding to the state General Fund by about $7.2 million, according to the bill's fiscal note. If HB 553 becomes law, Alabama merchants, jobbers, and distributors will lose a total of $39 million, according to the Legislative Fiscal Office.

Bill Introduced to Raise the Business Privilege Tax


On Thursday, Rep. Elaine Beech, D-Chatom, introduced HB 581, which would make changes to the Alabama Business Privilege Tax. The bill would eliminate the annual business privilege tax on businesses with Alabama net worth of less than $10,000, change the tax rate schedule from one based on the business' federal taxable income to a schedule based on its net worth apportioned to Alabama, and raise the maximum annual BPT cap from $15,000 to $22, 000. No estimate of the net annual increase in tax revenue is available at this writing.


Dana Beyerle
Director of Communications
William J. Canary
President and Chief Executive Officer
Mark Colson
Senior Vice President of Government Affairs and
Chief of Staff
Anna Dobbins
Meetings/Events and Communications Coordinator
Leah Garner
Director of Government Affairs and Advocacy
Drew Harrell
Deputy Chief of Staff and Director of Strategic Operations
Nancy Wall Hewston
Vice President of Communications, Strategic Information and Federal Affairs
Nathan Lindsay
Vice President for Political Affairs, Regional Operations and Executive Director of ProgressPAC
Trevor Parrish
Legislative Policy Coordinator
Joshua Vaughn
Director of Visual Communications and Strategic Information
Victor Vernon
Vice President for Public Policy
Pam Ware
Manager, Government Affairs and Advocacy

For more information on the Business Council of Alabama contact