SESSION ENDS WITH NO GENERAL FUND, BUT OVERALL A GOOD SESSION FOR BUSINESS

 

The 2015 regular legislative session ended Thursday with no General Fund for next fiscal year, guaranteeing a special session later this summer.

 

After passing a modified version of the House General Fund Budget, the Senate quickly adjourned Sine Die, ending the session a day early. The House had concurred with the Senate changes sending the budget with roughly $200 million in cuts to the governor who quickly issued a veto. The House overrode the governor's veto, but the bill died due to the Senate's adjournment.

 

The House has indicated that it will convene for a legislative workday on June 11; however they will be unable to conduct any official business due to the Sine Die adjournment motion.

 

The House and Senate did pass other measures affecting business during the session that began March 3.

 

Governor Robert Bentley signed the 2015-16 Education Trust Fund budget, which contains increases for most Business Education Alliance of Alabama priorities, such as First Class Pre-Kindergarten.

 

Accountability Act changes that were made should expand application of the original legislation.

 

Speaking to the final BCA's Governmental Affairs Committee meeting of the 2015 regular session, Ward said the session has been successful for the business community with passage and signing into law of his legislation to protect manufacturers against lawsuits over products they did not make and signing into law of Ward's prison reform legislation. New economic incentive legislation emerged from the session.

 

A fuller explanation of these and other issues are in this week's Capital Briefing that recaps the Legislature's 14th and last week of the regular session. Look for a full summary of the 2015 legislative session next week.

TWO MINUTE TUESDAY WITH SEN. CAM WARD

 

Senate Judiciary Committee Chairman Cam Ward, R-Alabaster, sat down with the Business Council of Alabama's Dana Beyerle and Leah Garner to discuss the 2015 legislative session's final days.

BCA's Two Minute Tuesday with Sen. Cam War, R-Alabaster

EDUCATION/WORKFORCE PREPAREDNESS

Governor Signs $5.9 Billion Education Budget

 

Governor Robert Bentley on Tuesday signed the $5.9 billion, 2015-16 Education Trust Fund budget that contains recommendations from a recent Business Education Alliance of Alabama study.

 

The BEA recommendations were in the 2014 report, Obstacles Into Opportunities, a blueprint 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, Professional Development, and Career Coaches.


The budget increase includes $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, and $1 million for Advanced Placement. The budget provides $700,000 for career coaches. At-Risk Students is level-funded at $20.3 million.

Accountability Act Changes Go to Governor

 

The House and Senate this week approved a conference committee report on SB 71, the update to the Alabama Accountability Act. SB 71 by Senate President Pro Tem Del Marsh, R-Anniston, had passed in different versions and went to conference. It was sent to the governor on Thursday.

 

Lawmakers passed the Alabama Accountability Act in 2013 to allow families with students in schools designated as failing to claim tax credits to help pay tuition to private schools and scholarships to children in homes below the poverty line to transfer out of failing schools, among other provisions.

 

Marsh said the bill will allow current students to continue to be served. It also would tighten income requirements for first-time scholarship eligibility to 185 percent of the federal poverty level. That equals $44,123 for a family of four, the Decatur Daily reported. The bill also would cap the dollar amount of scholarships at $30 million statewide.

 

The bill also would increase public reporting requirements for scholarship-granting organizations, cap annual scholarship amounts at $6,000 for elementary school students, $8,000 for middle-school students, and $10,000 for high school students, prohibit a private school from increasing the cost of tuition for a child receiving a scholarship, cap annual donations from individuals at $50,000, and retain eligibility for current students if their poverty level threshold rises.

Senate Confirms Buntin to the Alabama Commission on Higher Education

 

The Senate on Thursday confirmed the appointment of Charles Buntin to the Alabama Commission on Higher Education. The vote was 33-0. Buntin, who was appointed by House Speaker Mike Hubbard, will represent Alabama's Second Congressional District and will serve a term ending Aug. 31, 2024.


Buntin is a shareholder at Tom West Co., a real estate firm in Dothan. He is former chairman of the Dothan Area Chamber of Commerce board of directors and a graduate of Leadership Alabama and Leadership Dothan.

ENVIRONMENT AND ENERGY

Legislature Passes BCA-Initiated Resolution to Rein In EPA

 

On Wednesday, the Legislature sent SJR 97 by Sen. Jabo Waggoner, R-Vestavia Hills, to the governor. It highlights the egregious federal overreach from the Environmental Protection Agency in the north Birmingham community.

 

This BCA-supported resolution calls on the Alabama congressional delegation, governor, attorney general and Alabama Department of Environmental Management to continue combating the EPA's "novel and overbroad air deposition theory" to justify a Superfund site in north Birmingham. 

 

It is clear that this theory is being used to unfairly target Alabama businesses and advance political and social agendas rather than instituting fair environmental regulatory policies that are authorized by federal law.

 

As the resolution states, "EPA's broad air deposition theory would allow EPA to order businesses to clean up hazardous contamination within an indefinite area before proving that the business was actually responsible." It calls on the EPA to "refrain from acting outside of its statutory authority in North Birmingham, Tarrant and other communities in Alabama, and specifically to abandon its questionable 'air deposition' theory of CERCLA liability."

 

BCA has been on the front-lines calling out the EPA for initiating a series of new broad regulations (without proper authority) that have the potential to cost Alabama businesses and citizens millions of dollars and lost jobs. 

 

Read more about BCA's environmental advocacy in these blog posts:

 

BCA Testifies at EPA Hearing on Carbon Emissions

 

New EPA Rule Will Threaten Manufacturers' Competitive Advantage

 

Business Council of Alabama Expresses Concern Over Proposed EPA Clean Air Act

 

EPA Releases Final Water Rule That Threatens Private Property Use

 

BCA to EPA, Corps of Engineers: Ditch the Proposed WOTUS Rule

HEALTH

Health Mandates Sent to Governor

 

The House on Thursday passed SB 270 by Sen. Slade Blackwell, R-Birmingham. The bill 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.

 

The House then passed SB 296 by Sen. Paul Bussman, R-Cullman. It 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 were two of 10 introduced this session that stipulate certain provisions in health care contracts. They went to the governor for consideration.

 

Another bill, SB 483 by Sen. Del Marsh, R-Anniston, known as the Pharmacy Audit Integrity Act, had a public hearing this week. Similar to other bills, this would alter the contractual arrangements between providers and in this case, Pharmacy Benefit Managers, which work on behalf of employers and consumers to manage the costs of prescription medicine.

 

Employers of all sizes use PBMs as a tool to stretch their premium dollars and ensure quality of care for their workers. SB 483 would make significant changes to existing law by restricting the audit process for PBMs to monitor cost, efficiencies, and appropriate dispensing practices. 

 

No action was taken on the bill, but Marsh encouraged parties to work together between sessions.


Read about the BCA's position on how these types of bills have the potential to increase employer and employee health costs.

JUDICIAL AND LEGAL REFORM

Restrictive Covenant Bill Passes

 

The Senate on Thursday gave final passage to HB 352, the restrictive covenant bill by Rep. Chris England, D-Tuscaloosa.

 

Restrictive covenants, like non-compete clauses, are found in contracts between businesses and their employees, business partners, buyers and sellers, and others. This bill 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 its companion SB 367 sponsored by Sen. Phil Williams, R-Rainbow City, 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.
 

SMALL BUSINESS

Cities to Notify Businesses When Annexations Alter Police Jurisdictions

 

A bill was sent to the governor that would require a municipality altering its police jurisdiction to notify businesses and individuals affected by any annexation or de-annexation.

 

HB 377, by Rep. Ron Johnson, R-Sylacauga, would further limit change to a police jurisdiction to once a year, on Jan. 1. A municipality must provide public notice of the change in police jurisdiction online and in a newspaper, along with a map of the new municipal and police jurisdiction limits. The notification requirements should help businesses avoid unexpected liabilities for local taxes and fees.

TAX AND FISCAL POLICY

Governor's Veto of General Fund Will Stand

 

HB 135, the General Fund budget by Rep. Steve Clouse, R-Ozark, passed the House and Senate, but Governor Bentley vetoed it. The House overrode the veto; however, because the Senate had already adjourned on Thursday, the veto stands, and the 2015 session ended with no general government operating budget.

 

A special session is guaranteed, probably in August, for legislators to craft a new budget with or without funding between $200 million and $250 million just to level-fund government operations in the 2015-16 Fiscal Year.

 

HB 135 did have three categories of conditional appropriations totaling $208 million, which would have shored up state agencies only if the additional revenue materialized.


The timing of calling a special session and the matters to be considered are at the discretion of the governor. The Legislature will have 12 legislative days to complete its work within a 30-day time frame.

Simplified Sellers Use Tax Remittance Act Goes to Governor

 

The House on Thursday voting 69-23 passed the Simplified Sellers Use Tax Remittance Act sponsored by Sen. Trip Pittman, R-Daphne. The House had substituted SB 437, so it returned to the Senate where the upper chamber approved it, sending it to the governor.

 

SB 437 would require the Department of Revenue to develop and make available an easily accessible online system that would allow an eligible seller to collect, report, and submit the simplified sellers' use tax. The rate will be 8 percent.

 

Eligible participants, particularly internet businesses that do not have a presence in the state and which choose to participate, will have to collect, report, and remit the simplified sellers' use tax for all sales.

 

The amount of revenue to be produced cannot be determined because the number of participating businesses is unknown. Fifty percent of the tax proceeds will be divided between the General Fund and the Education Trust Fund on a 75 percent-25 percent basis. Of the remaining 50 percent, 25 percent would be distributed to counties and 25 percent to municipalities.

 

Another component of the bill structures the act to align itself with any potential federal law or court ruling that would allow the states to enforce their sales and use tax jurisdiction on internet businesses, such as the Marketplace Fairness Act.

Bill Allowing State Agencies to Raise Operating Fees Sent to the Governor

 

The House on Wednesday voting 61-38 passed a bill that would help reduce the shortfall in the General Fund budget for Fiscal 2015-16 when one eventually is passed. SB 216, sponsored by Sen. Gerald Dial, R-Lineville, would authorize state agencies, boards and commissions, other than the Alabama Public Service Commission, the Alabama Banking Department, and State Parks, to increase fees they are authorized to charge and keep the money for operations.

 

The affected agencies may or may not receive funding from the General Fund, but in all cases can collect fees that are earmarked to fund their operations. Any fee increase will be tied to the Consumer Price Index for the last 10 years or to when a fee was last increased, whichever is a shorter time period.

 

Any increase will be capped at a maximum of 2 percent per year. The bill also would authorize an agency to review their fee structure once again in five years and make necessary adjustments.

Bill to Provide Infrastructure Funding to State and Localities Did Not Pass

 

SB 475, by Sen. Trip Pittman, R-Daphne, which would have removed the exemption of local government road and bridge projects from the contractors' gross receipts tax, did not receive final passage in the House. The bill would hold harmless current recipients of the tax revenue and distribute additional revenue, presumably due to the removal of the exemption, as gasoline and fuel tax revenues. The Alabama Department of Transportation would have received 45 percent and cities and counties 55 percent.


The actual amount of additional revenue would have depended upon the aggregate total of local road and bridge projects that would be subject to the tax.

"Alabama Renewal Act" Voted Down by Senate Committee

 

In the final week of the legislative session, the Senate Finance and Taxation Education Committee voted not to give HB 416 a favorable report. The BCA-supported legislation, sponsored by Rep. Chris Pringle, R-Mobile, would have given a port credit, if approved by the Alabama Renewal Commission, to users of Alabama's publicly owned ports based on qualifying increased cargo shipments.

 

The credit would also have been used to incentivize large distribution centers to locate operations and operate at the Alabama ports.  The bill would have capped the port credit at an annual amount of $8 million.

 

Another component of the bill would have created the Growing Alabama Act. This portion would have allowed Alabama to meet economic development needs that cannot be solved with traditional tax incentives by allowing individual and corporate contributors of funds or property to economic development organizations to receive an income tax credit that for the lesser of either 50 percent of the contributor's tax liability or the full amount of the contribution.


In the Senate committee meeting on Wednesday, the bill was discussed at length. After discussion, an amendment was offered by Sen. Trip Pittman, R-Daphne, to add additional requirements for businesses that file for the credit. But the amended bill did not receive a favorable report. 

YOUR BCA ADVOCACY TEAM

Dana Beyerle
Director of Communications
334.240.8768
William J. Canary
President and Chief Executive Officer
Mark Colson
Senior Vice President of Government Affairs and
Chief of Staff
334.240.8724
Anna Dobbins
Meetings/Events and Communications Coordinator
334.240.8775
Leah Garner
Director of Government Affairs and Advocacy
334.240.8726
Drew Harrell
Deputy Chief of Staff and Director of Strategic Operations
334.240.8727
Nancy Wall Hewston
Vice President of Communications, Strategic Information and Federal Affairs
334.240.8725
Nathan Lindsay
Vice President for Political Affairs, Regional Operations and Executive Director of ProgressPAC
334.240.8766
Trevor Parrish
Legislative Policy Coordinator
334.240.8773
Joshua Vaughn
Director of Visual Communications and Strategic Information
334.240.8740
Victor Vernon
Vice President for Public Policy
Pam Ware
Manager, Government Affairs and Advocacy
334.240.8719


For more information on the Business Council of Alabama contact