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

Sen. Cam WardR-Alabaster
Chairman of the Senate Judiciary Committee


ETF budget sent to governor, General Fund budget advances



With the legislative session quickly drawing to a close, the Legislature this week sent a number of bills to the governor.  "There are so many things that will be decided this week," Rep. Terri Collins told Business Council of Alabama members at the weekly Tuesday Morning Briefing. "This is the week that we really need to get bills out of the House, and the Senate, they probably need to get theirs out to the House."

And that is exactly what happened.


The House on Tuesday voted unanimously to give final approval to the $6 billion Education Trust Fund budget and to send it to the governor for consideration.


A measure to authorize the use of up to $60 million in bonds to provide increased prison capacity cleared the Senate on Tuesday and was sent to the governor's office.


A bill that would allow cities and counties to award competitive bids to local businesses under certain circumstances was given final approval by the Senate on Tuesday, and now it too awaits the governor's approval. 


After last week voting against confirmation of the appointees to the newly created Alabama Public Charter School Commission, the State Board of Education voted on Tuesday to approve the commission members.


House Speaker Mike Hubbard, R-Auburn, created the Commission on Earmarking and Budget Reform and appointed seven members who will study the budget process, including Alabama's separate budgets.

Similar to the House version, the Senate Finance and Taxation General Fund Committee sent an austere General Fund Budget to the full Senate with floor debate expected next week. The Senate was set to consider several budget related bills on Thursday including shifting revenues from the ETF to the General Fund and a constitutional amendment that would essentially combine the two state budgets by completely earmarking revenues, but controversial debate over these measures shut the Senate down late Thursday.

A fuller explanation of these and other issues are in this week's Capital Briefing that recaps the Legislature's 13th week in regular session.



Rep. Collins sat down with Dana Beyerle and Leah Garner to speak about Alabama's new Public Charter School law and appointments to the Public Charter School Commission for the Business Council of Alabama's Two-Minute Tuesdays.

BCA's Two Minute Tuesday with Rep. Terri Collins, R-Decatur


$5.9 Billion Education Budget Sent to Governor


The House on Tuesday voted 101-0 to finalize the Education Trust Fund budget for 2015-16. The House approved the conference committee report that the Senate had approved on May 21 and sent the nearly $6 billion ETF budget to the governor for consideration.


The budget includes a number of recommendations that were identified in the Business Education Alliance of Alabama's 2014 report Obstacles Into Opportunities to improve Alabama's graduation rate.


These funding priorities include First Class Pre-Kindergarten, Student Assessment, Postsecondary Education Dual Enrollment, Distance Learning, Advanced Placement, At-Risk students, and Professional Development.


The final version included additional funding for those programs, with the exception of At-Risk students that will remain at $20.3 million. The budget increases over the current fiscal year's appropriations are: $10 million for First-Class Pre-Kindergarten; $6 million for Student Assessment; $5.3 million for Dual Enrollment; $3 million for Professional Development; $1.3 million for Distance Learning; $700,000 for career coaches; and $1 million for Advanced Placement.

State Board of Education Approves Charter School Commissioners


The State Board of Education on Tuesday approved appointees to the newly created Alabama Public Charter School Commission, reversing a May 14 vote to not confirm them. The board's approval of the commission members resulted in Rep. Terri Collins, R-Decatur, withdrawing HB 664 that would have removed the state school board as the confirming authority for commission appointments.


"We have a great commission," Collins said after the state school board vote. After the board's initial rejection of the appointees, Collins had sponsored HB 664 to remove the state board as the confirming authority.


The Legislature earlier this session approved charter schools in Alabama for the first time. Its action included creation of a commission to set policy.

New Two-Year College Commission Takes Office


Governor Robert Bentley on Wednesday swore in the members that he had appointed to Alabama's newly created two-year college system board. The board will govern the state's 25 community colleges and technical schools.


Alabama's community colleges and technical schools were previously under the oversight of the elected Alabama State Board of Education, which remains as the oversight board for K-12 education.


The two-year board will be able to improve workforce training and eliminate redundancies. Industries seeking employees want a skilled and educated workforce, attributes the two-year schools will be better able to provide.


The governor serves as chair of the board. Al Thompson was elected vice president and Milton Davis was elected president pro tem.


In addition to Bentley, board members appointed from state school board districts are: District 1 - Al Thompson, owner of Thompson Properties; District 2 - Ron Fantroy, plant manager at Shaw Industries Group; District 3 - Susan Foy, marketing director for Russell Medical Center; District 4 - Frank Caldwell, retired president of Ridgewood Healthcare Center; District 5 - Crystal Brown, business development director for the Decatur-Morgan County Chamber of Commerce; District 6 - Milton Davis, director of industrial business development for B.L. Harbert International; District 7 - Chuck Smith, retired human resources manager for RockTenn Paper; District 8 - Blake McAnally, president of Pugh Wright McAnally Inc. State School Board member Mary Scott Hunter is the ex-officio representative of the State School Board.

BCA President and CEO William J. Canary congratulated the members of the newly formed board, "The work that these men and women will do is of vital importance to the future of Alabama's workforce. We are grateful for their willingness to serve the state of Alabama."

Accountability Act Changes Go to Conference Committee


The House voted 68-26 on Thursday to approve a Senate bill that would amend the Alabama Accountability Act. Because the House version differed from the Senate version of SB 71, bill sponsor Senate President Pro Tem Del Marsh, R-Anniston, non-concurred in the changes and sent it to conference committee.


The AAA, passed in 2013, allows families with students in schools designated as failing to claim tax credits to help pay tuition in private schools and grants scholarships to children in homes below the poverty line to transfer out of failing schools, among other provisions.

The legislation would expand the number of schools designated as failing and increase the number of families that could qualify for grants from Scholarship Granting Organizations. Student scholarships will be capped at $6,000 for elementary school, $8,000 for middle school, and $10,000 for high school per academic year. The bill also would increase the statewide cap on tax credits that can be claimed from $25 million to $30 million.


Senate Confirms BCA's Pam Ware to ASU Board of Trustees


On Tuesday, the Alabama Senate confirmed BCA's Pam Ware to the Alabama State University Board of Trustees. She currently serves as the manager of governmental affairs at the Business Council of Alabama where she has been a part of the BCA Team since 2004. Ware previously served in former Governor Bob Riley's administration in the office of legislative affairs. Prior to that she was a business education teacher in Elmore County from 1998-2003 in grades 9-12. 


In 2014, Governor Robert Bentley appointed Ware as a trustee to ASU, her alma mater, where she earned her bachelor of science degree. She also serves on the Alabama Children's Advocacy Council.


BCA President and CEO congratulated Ware on her confirmation, "For more than a decade, Pam has been a dedicated member of the BCA Team, and I know she brings that same dedication and passion to her service on the ASU Board. There is no greater calling than working to enrich the lives of our students, and it is truly a blessing that Pam has answered this calling."


House Insurance Committee Favorably Reports Two Health Mandate Bills


The House Insurance Committee this week favorably reported two health mandate bills, SB 270 and SB 296.


SB 270 by Sen. Slade Blackwell, R-Birmingham, would prohibit vision care service insurers from limiting a vision care provider's ability to set fees for services and materials, from participating in specific vision care plans, and from choosing sources of suppliers in certain circumstances, among other provisions.


SB 296 by Sen. Paul Bussman, R-Cullman, would prohibit a private insurer from being able to set costs of non-covered services of a dental provider for its contracts with those providers.


These bills are two of the nine bills introduced this session that stipulate certain provisions in health care contracts.

Read about the BCA's position on health mandates on our blog.


Restrictive Covenant Bills Advance


House and Senate Judiciary Committees on Wednesday favorably reported companion bills that relate to restrictive covenants.


The House Judiciary Committee favorably reported SB 367 by Sen. Phil Williams, R-Rainbow City, and the Senate Judiciary Committee favorably reported HB 352 by Rep. Chris England, D-Tuscaloosa. The bills await a third reading in their respective second house.


Restrictive covenants, like non-compete clauses, are in contracts between businesses and their employees, business partners, buyers and 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.


HB 352 and SB 367 originated with proposals 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, Alabama courtrooms produce disparate results. Current law is not consistent and judges have significant discretion in their reasoning and decisions. A new law would provide a guide for judges to follow in interpreting 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.

Prison Reform Financing Bill Goes to Governor


The Senate on Tuesday passed HB 420 by Rep. Mike Jones, R-Andalusia, which would authorize the Alabama Corrections Institution Finance Authority to redirect up to $60 million in bonds for a prison facility in one county to locations statewide in order to create more prison capacity.


The bill is part of the 2015 Legislature's prison reform package of bills that included a significant measure to lower the prison inmate population over the next five years. Jones's bill was enrolled and sent to the governor to await his signature.

Resolution Sent to Governor to Establish a Committee to Study Feasibility of Business Courts


The Alabama Legislature has sent SJR 50 by Sen. Cam Ward, R-Alabaster, to the Governor which would establish the Business Litigation and Complex Litigation Study Committee.  The Committee will be made up of a cross-section of interested parties from business, government, judicial, legal and civic communities and will meet monthly following the conclusion of the 2015 Legislative Session. 


The duties of the committee are as follows: study the potential benefits, detriments, feasibility, and possible scope of a Business Litigation or Complex Litigation Court;

identify the resources necessary to create such a court; and report its findings and recommendations to the Legislature at least one month prior to the convening of the 2016 Regular Session.


Business courts, if implemented effectively, have shown in parts of the country to increase efficiency in resolving complex legal issues affecting businesses, reducing courts costs and reducing the case load of existing court dockets.  


The BCA's 2015 State Legislative Agenda states that BCA supports the establishment of a Business Court system that will provide a stable and reliably informed system for resolving complex business and commercial disputes.


Bill to Prevent Patchwork of Labor Laws, Minimum Wage at Local Level Advances


The House State Government Committee on Wednesday amended and favorably reported HB 495 by Rep. Arnold Mooney, R-Birmingham, which would further specify Alabama's status as a right-to-work state by prohibiting local governments from enacting certain employment policies and labor peace agreements on private sector businesses that go beyond federal and state regulations.   


HB 495 would establish a statewide policy prohibiting municipalities, counties, or authorities from setting wage, benefit, leave, or background check policies for private-sector employers. HB 495 also would prohibit municipalities from requiring employers to grant collective bargaining concessions to unions in exchange for assistance with a development project.


As the bill explains, there are existing federal and state laws that seek to protect individuals from discrimination in employment while providing appropriate due process to employers without limiting employers' ability to maintain a secure, safe, and productive workplace.


The Senate companion bill, SB 403 by Sen. Greg Albritton, R-Range, made it to the floor of the Senate on Thursday but due to the filibuster over budget related bills, a vote was not taken. 


The Labor and Employment section of the 2015 BCA State Legislative Agenda states that the BCA strongly supports Alabama's "right-to-work" status for its benefits to economic growth, industrial recruitment, and job creation.


The BCA works to protect Alabama's competitive edge nationally and internationally by fighting efforts to create a state minimum wage above the national minimum wage and opposes attempts to negatively influence the current balance between business and labor as it relates to unionization and contract negotiations.

Other states with similar laws are Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, North Carolina, and Tennessee.


Local-Preference Competitive Bid Bill Goes to Governor


A bill that would authorize cities and counties to award competitive bids to local businesses under certain circumstances went to the governor's office on Tuesday for consideration following Senate passage.


HB 264 sponsored by Rep. Steve McMillan, R-Gulf Shores, would authorize a county or municipality to award a competitive bid to a responsible bidder having a place of business in a local preference zone if that bid is no more than 5 percent greater than the bid of the lowest responsible bidder.


The bill also would allow a county or municipality to award a competitive bid to a responsible bidder whose bid is no more than 10 percent greater than the lowest bid if the responsible bidder has a place of business within the local preference zone or is a responsible bidder from a business within the state that is a woman-owned enterprise, an enterprise of small business, a minority-owned business enterprise, a veteran-owned business enterprise, or a disadvantaged-owned business enterprise, and if the lowest bid was made by a business entity that does not have a place of business in the state.


Senate Expected to Debate "Austere" General Fund Budget Next Week


The Senate Finance & Taxation Committee-General Fund reported a slightly different version of the "austere" budget that was passed earlier by the Alabama House.  Both versions of the budget propose to expend a total of $1.635 billion, reflecting the total amount of revenue currently available, with no solid expectations of additional revenue proposals being enacted. 


The Senate committee restored $4.2 million to the Department of Commerce, which the House recommended for $0 in funding from the General Fund.  The Senate committee provides the funding to the Department of Commerce by reducing funding to the Alabama Law Enforcement Agency by $4.2 million.


The latest version of the budget contains three categories of conditional appropriations that total approximately $208 million.  The conditional appropriations will only be released to the specified agencies if additional revenue is raised by the Legislature during the remaining four legislative days or during a special session of the legislature that appears inevitable at this time. 


For a detailed look at each version of the general fund budget to date, click here.

The BCA continues to talk with the legislative leadership and the governor to explore options that include Alabama's excessive earmarking of tax revenues. It remains a priority to find a path leading to more streamlined, growth-oriented state budgets in the future.

Senate Passes Bill Adopting "Factor-Presence Nexus Standard"


The Senate on Thursday voting 28-2 passed SB 497, by Sen. Greg Albritton, R-Range, and sent it to the House where it was assigned to the House Ways and Means Education Committee. SB 497 would subject a company that engages in certain minimal levels of economic activity to Alabama income taxes.


At least seven states have adopted some form of the factor-presence nexus standard in part as an alternative method to tax remote sellers who are not required to pay sales and use tax to jurisdictions where they have no physical presence. 


Under SB 497, "substantial nexus" would be established if any of the following apportionment factors were exceeded: $50,000 of property; $50,000 of payroll; $500,000 of sales; or if 25 percent of the taxpayer's total property, total payroll, or total sales are located in or are derived from Alabama.


The bill further provides that the factor thresholds will be adjusted for inflation. It could generate between $2 million and $8.5 million annually, according to the fiscal note.

Speaker Hubbard Creates Commission on Earmarking and Budget Reform


House Speaker Mike Hubbard, R-Auburn, appointed members to the Commission on Earmarking and Budget Reform that will study the budget process, including earmarking, appropriations, spending oversight, and Alabama's separate budgets for general government and education. Alabama is one of three states with separate budgets.


"Prior to Republicans taking control of the budget process in 2011, proration had been declared six times in 10 years, but since passage of the Proration Prevention Act, also known as the Rolling Reserve, it hasn't occurred once," Hubbard said. He said he hopes the commission will recommend similar common sense solutions to Alabama's budget challenges.

The members are Rep. Will Ainsworth, R-Guntersville; Rep. Elaine Beech, D-Chatom; Rep. Terri Collins, R-Decatur; Rep. Steve Clouse, R-Ozark; Rep. Allen Farley, R-McCalla; Rep. Bill Poole, R-Northport; and Rep. Rod Scott, D-Fairfield.

Senate Passes Bill Authorizing State Agencies to Raise Fees for Operations


Voting 21-8, the Senate on Thursday passed SB 216 and sent it to the House for consideration. SB 216 by Sen. Gerald Dial, R-Lineville, is one of several measures the Legislature is considering to balance the General Fund budget for Fiscal Year 2015-16.


The bill would authorize state agencies, boards, and commissions, except for the Alabama Public Service Commission and the Alabama Banking Department, to increase fees they can charge to fund their operations. The affected agencies may or may not receive funding from the General Fund, but in all cases collect fees that are earmarked to fund the agencies' operations.

Any increase in fees would be based on the increase in the Consumer Price Index for the last 10 years or since the fee was last increased, whichever is less. The increases are capped and cannot exceed 2 percent per year. The bill also would allow the agencies to review and adjust their fee structures in five years.

Bill Providing Amnesty for Delinquent Taxes Passes Senate


Delinquent taxpayers could get some relief if SB 423 sponsored by Sen. Tim Melson, R-Sheffield, becomes law. SB 423, entitled the "Tax Delinquency Amnesty Act of 2015," would create an amnesty program for taxpayers that owe delinquent state and local taxes, other than motor fuels taxes, that were due prior to Jan. 1.

The amnesty window will be open until the end of calendar year 2017. The amount of interest and penalties owed that would be waived for the taxpayer will decline the longer the taxpayer waits to participate in the amnesty program.

Bill to Provide Method for Online Businesses to Voluntarily Collect Sales and Use Tax Heads to House Floor


SB 437 sponsored by Sen. Trip Pittman, R-Daphne, was given a favorable report by the House Ways and Means General Fund committee on Wednesday.  Rep. Rod Scott, D-Fairfield, who is the sponsor of the House version of the bill, HB 660, is carrying the Senate bill in the House. Scott offered a substitute bill to the committee and reviewed how the substitute bill is structured to align with the Marketplace Fairness Act currently before Congress. 

Also known as the Simplified Sellers Use Remittance Act, SB 437 would require the Department of Revenue to develop and make available an easily accessible, online system that would allow the eligible seller to collect, report and submit the simplified sellers use tax, which would be set at a rate of 8 percent.  This would allow internet businesses that do not have a brick and mortar presence in the state to voluntarily collect sales and use tax on behalf of their customers.  There is no determined amount on how much revenue this measure would bring to the state.  Fifty percent of the funds received from this revenue measure would be split between the State General Fund and the State ETF on a 75/25 percent basis. Of the remaining 50 percent, 25 percent will go to counties and 25 percent will go to municipalities.

Senate Passes Infrastructure Funding Bill


The Senate on Tuesday unanimously approved SB 475 by Sen. Trip Pittman, R-Daphne, which would remove the exemption of local government road and bridge projects from the contractors' gross receipts tax.  

The bill would direct the additional revenue gained from the removal of the exemption to be distributed as gasoline and fuel monies to the Alabama Department of Transportation and to the local governments for maintenance and construction. The actual amount of additional revenue to be distributed will depend upon the total local road and bridge projects that would become subject to the tax.


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

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