Friday, February 14, 2014
Snow, Ice, Lawmaking
and Valentines Mark the Week
Although north Alabama experienced another winter storm this week, the Alabama Legislature was able to meet for three full days.
Both chambers completed their agendas Tuesday, then slowed down somewhat Wednesday and Thursday. Lawmakers were able to leave for their districts just as the snow and ice melted and in time to pick up last-minute Valentine’s gifts before today.
The state legislation acted on or to be acted on next week of interest to retailers follows. Read to the end of this report for the latest delay of the employer health insurance mandate and the most recent action from the president on a minimum wage hike. 
Alabama’s third state of emergency in a one-month span ended at 10 a.m. today, just as our state gears up for its third annual severe weather sales tax holiday. Common supplies needed in an emergency can be bought tax free beginning at 12:01 a.m. Friday, Feb. 21, one week from today. The three-day holiday ends at midnight Sunday, Feb. 23.
The severe winter weather has been a boon to some retailers and has slowed traffic to others. National retail numbers out this week indicate that severe winter weather across the nation had an impact on January sales. Alabama’s January sales numbers won’t be available until the first week of March, but our state had already expected a decline in January sales mostly due to Alabama being without a national championship football team for the first time in four years. Holiday sales in Alabama came in at the projected two percent growth, or $8.9 billion in taxed sales.
TOBACCO
Senate Approves Statewide Smoking Ban
Tuesday, after making several amendments, the Alabama Senate approved a statewide smoking ban on a 21-8 vote, sending it to the House Health Committee for consideration. Similar legislation has passed the Senate before, only to die in the House.
The most significant change the Senate made to SB168 by Sen. Vivian Figures, D-Mobile, was to exempt private clubs completely, allowing those entities to continue to allow smoking. The original bill exempted existing private clubs but would have banned smoking in future private clubs. Having some private clubs that would allow smoking and others where smoking would be banned, would be an “overreach of our government,” said Sen. Bill Holtzclaw, R-Madison, author of all of the amendments added to the bill Tuesday.
Figures’ legislation bans smoking statewide in any workplace, public building or public place with exemptions for bars, cigar bars, retail tobacco stores and certain outdoor areas.
Two of the amendments changed the word “shall” to “may,” which gives property owners the option of refusing service to a customer who smokes and calling law enforcement if someone on their property refuses to extinguish whatever they are smoking.
This is the 16th straight year Figures’ has championed this legislation.
House Panel Approves Overhaul
of Tobacco Tax Enforcement
The House Commerce and Small Business Committee on Wednesday amended and approved HB404 by Rep. Mike Jones, R-Andalusia, which requires retailers to maintain 90 days of computer and machine-generated invoices for tobacco products it purchases at the store level with the tobacco tax stated separately. After 90 days, the records must be maintained for three years from the date of purchase but they don’t have to be kept at the store itself, under this legislation. The legislation also:
- redefines wholesale dealers and jobbers and adds a definition for semijobbers.
- makes retailers of semijobbers who refuse to provide a duplicate invoice to the Revenue Department subject to a $1,000 to $5,000 department-imposed penalty that is multiplied by the sum of the violation added to any prior violations.
- removes archaic language regarding stamps on tobacco products.
- makes handwritten invoices from tobacco wholesalers invalid documents as proof of sale.
- sets out penalties, including confiscation of tobacco, for failure to maintain records.
- adds a definition for cigars, cheroots and stogies.
- creates a website listing of permitted and registered tobacco distributors.
Retailers would have until Oct. 1 of this year to gear up for this change should the bill become law. It now goes to the full House for consideration.
WORKERS’ COMPENSATION
Senate Panel OKs
Workers’ Comp Exemption for LLC Members
The Senate Business and Labor Committee on Wednesday amended and approved SB304 by Sen. Cam Ward, R-Alabaster, which would allow members of a limited liability company to exempt themselves from Alabama Workers’ Compensation Act coverage on a year-by-year basis. Corporate officers already have that option. The committee amended the bill to clarify that it does not exempt an LLC member from being counted as an employee for determining the employer’s number of employees. The bill also removes the requirement that written notification be given to the Department of Labor of the exemption. The only notification required under the bill is to the employer’s insurance carrier. The committee approved similar legislation last year, but the bill didn’t make it to the Senate floor. The bill now goes to the full Senate for consideration.
Allowing Workers’ Comp Patients to Choose Pharmacy
Gets Public Hearing Before Senate Health
The Senate Health Committee conducted a public hearing but took no vote Wednesday on SB205 by Sen. Billy Beasley, D-Clayton, which gives an employee with a workers’ compensation claim the right to select his or her own pharmacy for medications arising out of the claim. Representatives of the Alabama Council of Funds, a group of association-backed workers’ comp funds, testified against the bill saying it would prevent those funds from negotiating the best price for medications for employees with long-term medical claims. Alabama courts have already ruled that the employee can choose a pharmacy, those testifying for and against the bill pointed out. The only proponent at the hearing, besides the sponsor, represented an out-of-state online pharmacy. If enacted, the legislation would become effective Jan. 1, 2015. The House companion, HB61, by Rep. Ron Johnson, R-Sylacauga, awaits action by the House Commerce and Small Business Committee. Alabama Retail will continue to monitor this legislation.
Senate Panel to Consider
Workers’ Comp Burial Expenses Bill
Next Wednesday, the Senate Judiciary Committee will consider HB107 by Rep. Rod Scott, D-Fairfield, which would more than double the possible burial expenses a workers’ compensation claim can pay. The bill moves the allowed expense from $3,000 to up to $6,500, an increase of $3,500. The House approved the bill Feb. 6.
LABOR AND EMPLOYMENT
Bill Banning Cities and Counties
from Mandating Leave Time
for Private Employees Clears Senate Panel
The Senate Governmental Affairs Committee on Wednesday unanimously approved SB313 by Sen. Rusty Glover, R-Semmes, which prohibits cities and counties from passing laws that would require an employer to grant vacation or other leave time that isn’t required by state or federal law. The House companion, HB360 by Rep. Jack Williams, R-Birmingham, is on the House Special Order Calendar for next Tuesday. The House Commerce and Small Business Committee unanimously approved it Feb. 5.
UNEMPLOYMENT
Senate Approves Change in Definition of Employing Unit
On a vote of 29-1 Wednesday, the Alabama Senate approved SB48 by Sen. Clay Scofield, R-Guntersville, which clarifies that an employing unit for unemployment compensation purposes can be an employer who acquires at least 65 percent of another employing unit in Alabama. It now goes to the House Commerce and Small Business Committee for consideration.
Currently, an employer must acquire all of the assets of another employing unit to be considered an employing unit. This legislation makes it clear that if one business buys another, the unemployment compensation experience taxing rate of the purchaser is applied if the company owns 65 percent or more of the acquired company.
On Jan. 22, the House Commerce and Small Business Committee approved the House companion, HB109 by Rep. Wes Long, R-Guntersville, putting that version in line for consideration by the full House.
Senate Committee Approves
Bill Encouraging Unemployed to Work Part Time
The Senate Business and Labor Committee on Wednesday unanimously approved HB88 by Rep. Jack Williams, R-Birmingham, which would allow the unemployed to earn some money without reducing their unemployment benefits.
On Jan. 30, the Alabama House approved the legislation that will alter the formula for calculating the individual weekly unemployment benefit payment if the beneficiary is earning money, either through forced hours reduction or a part-time job. The bill now goes to the full Senate for final approval.
According to the Legislative Fiscal Office, the bill will increase the annual obligations of the Unemployment Compensation Trust Fund by almost $1 million. The benefits program is funded primarily by employer contributions.
The Labor-Department-requested bill allows earnings up to one third of the weekly benefit. Any money earned beyond that level would result in that dollar amount reduction in the unemployment benefit. The maximum weekly unemployment benefit in Alabama is $265, so the bill would allow $88.33 in earnings before any penalty would be taken from that maximum benefit. Since 1963, the amount an unemployment beneficiary could earn weekly without penalty to their benefits has been $15.
Bill Deals with Pensions and Unemployment Benefits
Rep. Kurt Wallace, R-Maplesville, introduced legislation this week that specifies that only 100-percent-employer-financed pensions would disqualify someone from receiving unemployment benefits. Any pension payments retroactively awarded to an individual would constitute disqualification and require recovery of any unemployment benefits paid during the disqualification period only if the worker did not contribute anything to the pension fund, under HB405. The bill has been assigned to the House State Government Committee.
ALCOHOL
Bills Increasing Alcohol License Fees
and Changing Renewal Process Set for Public Hearings
Bills by Rep. Lesley Vance, R-Phenix City, that would alter the alcohol licensing process and mean higher fees for businesses are set for public hearings next week in the House Economic Development and Tourism Committee. HB443 would switch the renewal period for alcohol license renewals from Oct. 1 to between June 1 and July 31, while increasing the fee for late filing from 50 percent to 75 percent of the license fee. The legislation also would allow the Alabama Alcoholic Beverage Control Board to charge a “reasonable fee” for electronic processing of licenses and fees.
HB444 would double the application filing fee for an alcoholic beverage license from $50 to $100. The fee, which is only assessed on new applicants, has not been increased since it was first instituted in early 1980s. This is the third year Vance has introduced similar bills.
Wine Supplier/Wholesaler Relationship Bills
for Shelby and Montgomery Counties in Works
The House Shelby County legislative delegation this week approved HB286, or the Shelby County Wine Franchise Jobs Protection Act, by Rep. Mike Hill, R-Columbiana, which outlines the parameters for the wine supplier/wholesaler relationship in Shelby County.
It specifically requires suppliers to designate in writing exclusive sales territories for wine wholesalers in the county. It also forbids wholesalers from delivering wine to a retail business outside the designated sales territory. Under the bill, suppliers would be forbidden to offer the same brand or brands of wine in the same territory to more than one wholesaler or to sell directly to any retailer in the state. It also forbids suppliers from requiring a wholesaler to purchase one or more brands of wine or other products in order for the wholesaler to purchase another brand of wine.
Meanwhile, Rep. John Knight, D-Montgomery, this week introduced a similar bill for Montgomery County, HB445. It awaits action by the Montgomery County Legislation Committee.
Panel to Consider Bill Next Week
to Align Alabama’s Cork-and-Go Law with Federal Law
At its Wednesday meeting, the House Economic Development and Tourism Committee will consider SB56 by Sen. Paul Sanford, R-Huntsville,which requires restaurant patrons who don’t finish their wine to transport the recorked or resealed bottles out of the reach of the vehicle driver. Last week the committee approved the House companion, HB81 by Rep. Terri Collins, R-Decatur.
The legislation amends a 2012 law, also sponsored by Sanford and Collins, which allows Alabama restaurant patrons to put the cork back in an unfinished bottle of wine and take it home. The 2012 law permits only one opened bottle of wine to be carried out of a properly licensed establishment, if the bottle has been recorked and resealed in a bag.
Alabama and 31 other states must pass legislation that requires unfinished wine be locked away to reflect federal standards so the states can continue to receive federal transportation money.
The proposed legislation specifies that the unfinished bottle must be placed in a locked glove compartment; in a storage or cargo compartment in the bed of a pickup truck or in a locked case not readily accessible behind the front seat of a pickup truck; or in the area behind the last upright seat of any vehicle that does not have a trunk. Current law already requires the seller to provide the customer with a dated receipt for the resealed wine bottle.
TAXES AND FEES
Senate Makes Changes
to Adjusted Gross Income Filing Requirements
On a vote of 31-1 Wednesday, the Senate approved SB51 by Sen. Tammy Irons, D-Florence, which requires any taxpayer with an adjusted gross income of more than the sum of the standard deduction and the personal exemption for their filing status to file a tax return. Right now, some taxpayers have to file a return even though their standard deduction and personal exemption are such that they owe no taxes, Irons told senators. Currently, taxpayers have to file a return if their adjusted gross income is more than $1,875 for single taxpayers and more than $3,750 for married filers. The bill now goes to the House Ways and Means Education Committee for consideration.
LEGAL
House OKs Revamp of Limited Liability Law
On a vote of 96-0 Wednesday, the Alabama House approved HB2, or the Uniform Alabama Limited Liability Company Law, by Rep. Paul DeMarco, R-Homewood, which would replace the current limited liability company law. The Senate Judiciary Committee will consider the bill at its Wednesday meeting.
DeMarco said the state’s limited liability law, which governs 70 percent of all businesses in the state, hasn’t been updated since 1994. Part of the purpose of the legislation is to keep Alabama businesses from organizing in Delaware, which has advanced and flexible corporation laws, he said.
The 140-page bill, drawn up by the Alabama Law Institute, focuses on the contractual nature of LLCs. Under the bill, the implied contractual covenant of good faith and fair dealing cannot be eliminated. The bill also acknowledges that LLCs don’t necessarily have to be for-profit businesses.
The Senate companion, SB3 by Sen. Rodger M. Smitherman, D-Birmingham, also awaits consideration by the Senate Judiciary Committee.
House Panel Approves Bill
Changing Contract Interest Rate Agreements
The House Judiciary Committee on Wednesday amended and approved HB278 by Rep. Paul Beckman, R-Prattville, which prohibits judgments from bearing interest on contracts at an annual rate in excess of 21 percent, regardless of the rate stated in the contract. Rates below 21 percent, however, would be allowed if stated in the contract. Judgments arising from contracts that don’t include an interest rate would bear an annual interest rate of 7.5 percent. Judgments based on a contract action would bear interest from the day of the cause of action and all other judgments, including contracts that don’t specify an interest rate, would bear interest from the date the judgment is signed. The legislation would apply to all judgments entered on and after Sept. 1 of this year. The bill now goes to the full House for consideration.
LABELING
Senator Introduces Bill to Expand
Catfish Notification and Restrict It to Menus Only
Sen. Bobby Singleton, D-Greensboro, this week introduced SB335, which would require restaurants, grocery delis and other food service establishments to include country of origin labeling for catfish and its entire species order, Siluriformes, on menus only. The legislation takes away the current option of notifying customers of the country of origin via a sign or table top display. It is the companion to HB432 by Rep. A.J. McCampbell, D-Livingston, introduced last week. 
The legislation would force grocery delis and other small food vendors to print menus in order to comply. Current law, which gives both the menu and sign options, applies only to the Ictaluridae family of catfish. This legislation broadens it to the entire order of catfishes.
>> Current Alabama catfish and seafood labeling notification rules
The Senate bill has been assigned to the Senate Agriculture, Conservation and Forestry Committee, while the House bill has been assigned to the House Agriculture and Forestry Committee.
BAD CHECKS
Bills Extend Bad Check Law to Electronic Versions
Electronic drafts would be considered a negotiable instrument under bills introduced this week. Under existing law, a person commits the crime of negotiating a worthless negotiable instrument if he or she presents a check or promissory note as payment, knowing or intending that it will not be honored by the drawee. SB339 by Sen. Scott Beason, R-Gardendale, and HB450 by Rep. Mike Hill, R-Columbiana, extend the same punishment and other related legal matters to bad electronic drafts. The Senate Judiciary Committee will consider Beason’s bill Wednesday.
>> Alabama’s current bad check law
NEXT LEGISLATIVE DAY
The 15th legislative day, the halfway point of the Alabama Legislature’s 2014 regular session, is Tuesday, Feb. 18. The Alabama Senate and House of Representatives meet at 1 p.m.
FEDERAL
Obama Delays Mid-Size Employer Health Insurance
Mandate until 2016; Those Who Work
6 Months or Less a Year Not Full Time
Mid-size employers get an extra year to comply with the Affordable Care Act’s employer insurance mandate thanks to a second delay announced Monday by the Obama administration. 
Perhaps bigger news for retailers, restaurants and the hospitality industry is that seasonal workers no longer are considered full time or subject to the mandate. The new guidelines define seasonal workers as those who work less than six months out of the year. Previous definitions considered workers seasonal if they worked a much shorter amount of time. Still, employers will be subject to a $3,000 fine every time one of their seasonal workers purchases coverage through a health-insurance exchange and qualify for subsidized premiums.
Employers with 50 to 99 full-time workers will not have to provide employees with health insurance or pay a fine until 2016.
Monday’s announcement marks the second delay of the ACA insurance mandate for employers. Under the original 2010 law, employers with the equivalent of 50 full-time workers were to offer coverage beginning in 2014. Last year, the administration delayed the requirement for the first time by moving the deadline to the start of 2015.
Additionally, the Treasury Department-issued final regulations phase in insurance coverage requirements for larger employers over the next two years. Businesses with 100 or more employees must offer health insurance coverage to at least 70 percent of full-time workers in 2015, and 95 percent in 2016, to avoid penalties.
>> U.S. Treasury Department summary of latest changes
Obama Signs Minimum Wage Hike
for Federal Contractors; Alabama Democratic Bills
Create State Minimum Wage
On Wednesday, President Obama signed an executive order hiking the minimum wage for federal contractors to $10.10 from $7.25 starting next year. Many believe the action is part of his efforts to draw attention to the minimum wage debate in advance of the midterm elections. In Alabama, two bills have been introduced in the Alabama Legislature to create a minimum wage for our state:
- SB295 by Sen. Bobby Singleton, D-Greensboro, which would immediately establish a state minimum wage of $12 for hourly employees that would be tied, beginning in 2020, to the Consumer Price Index. Alabama’s Labor Commissioner would enforce law. Under the bill, tipped employees’ wages could never fall below 30 percent of the state minimum wage. The bill awaits action by the House Business and Labor Committee.
- HB279 by Rep. Darrio Melton, D-Selma, would amend the constitution to create a minimum wage of $9.80 per hour by Jan. 1, 2016. It awaits action by the House Commerce and Small Business Committee.
Alabama currently uses the federal minimum wage.
