Friday, March 20, 2015

Legislature Leaves for Spring Break

ALCapitolCutoutWith eight days of its 30-day session complete, the Alabama Legislature has moved many items on the Republican majority’s agenda, started its work on prison reform and corrected an issue the Alabama Supreme Court had with small town alcohol sales.

Your Alabama Retail Association is tracking 75 of the almost 700 bills that have been introduced so far, including one that would require retailers and other businesses to notify customers in the event of a data breach.

Still to come are the state’s general and education budgets and the revenue measures needed to fund those budgets. All of the governor’s proposals for raising revenue for the state’s General Fund have been introduced, but few have been debated.

Next week, the Legislature takes its spring break The 2015 regular session resumes Tuesday, March 31, with what is expected to be a regular two-day week. Expect the next issue of the Capitol Retail Report in your inbox on Friday, April 3.


DATA SECURITY

Data Breach Bill Continues to Evolve

ArthurOrrThe Alabama Retail Association continued to work this week with Sen. Arthur Orr (pictured), R-Decatur, on SB106, a data breach notification bill. Orr on Wednesday produced a second substitute for the bill, even though the Senate Judiciary Committee did not consider the bill this week. At press time, the latest version of the bill had yet to be rescheduled for committee consideration. Alabama Retail again thanks Orr for his willingness to listen and act on the retail industry’s concerns.

Orr’s Alabama Information Protection Act requires breached entities to notify Alabama’s attorney general, credit-reporting agencies and Alabamians whose information has been compromised of data breaches. Violators face penalties of up to $50,000 for each breach, but the legislation does not establish a new private cause of action for a civil lawsuit.

Alabama is one of three states without a data breach notification law. The time is right for our state to adopt legislation that provides consumers with timely notification of data breaches. Alabama Retail will continue to ensure any legislation adopted doesn’t punish retailers who become victims of cyber thieves. At the federal level this week, a House subcommittee began debating national data breach security and notification legislation. (See FEDERAL)


TAXES AND FEES

House to Consider Repeal of Withholding Exemption

When it returns from spring break, Tuesday, March 31, the full Alabama House of Representatives may consider HB240 by Rep. Ken Johnson, R-Moulton, which repeals the total exemption from withholding for employees. The governor estimates the legislation will generate $12 million. The bill is part of the governor’s revenue-raising measures intended to shore up the state’s general operating budget. Currently, an employer is not required to withhold income taxes from an employee’s wages if that employee has an exemption certificate that says he or she had no income tax liability in the preceding tax year and anticipates not having a tax liability in the current year. State law says anyone earning more than $5,000 for the year has to file a return. If passed into law, Johnson’s bill would take effect Sept. 1. The House Ways and Means Education Committee approved the bill Wednesday, sending it to the full House.


House Approves Monroe County Tobacco Tax

The Alabama House on Wednesday approved HB184 by Rep. Harry Shiver, R-Bay Minette, a constitutional amendment to levy a 25-cent-per-pack tobacco tax in Monroe County. It awaits consideration by the Senate Local Legislation Committee for the Mobile area.


Occupational Tax Ban Fails to Gain
Enough Support for House Consideration

Rep. Dimitri Polizos, R-Montgomery, failed Tuesday to gain enough support for an occupational tax ban for it to be considered before the state’s budgets. HB149, which proposes a constitutional amendment to prevent counties and cities from imposing an occupational tax after Jan. 1, 2017, could be brought before the body at a later date. The House briefly brought the bill back up Thursday, but carried it over.


Bill Proposes Tying Fees to Consumer Price Index

This week, Sen. Gerald Dial, R-Lineville, introduced SB216, which would allow state agencies to increase fees by whatever percentage the Consumer Price Index had increased over the previous 10 years or since the last change in the fee, whichever was the shorter period of time, as long as that increase did not exceed two percent for each year. In 2013, Dial carried over the bill in the first week of the legislative session at the request of other senators, and it never resurfaced. At the time, senators objected to the bill as being potentially punitive to business. SB216 has been assigned to the Senate Finance and Taxation General Fund Committee.


THEFT REFORM

Committee OKs Substitute Prison Reform Bill

The Senate Judiciary Committee on Tuesday unanimously approved a substitute version of SB67, a 135-page prison reform bill by Sen. Cam Ward, R-Alabaster, which targets recidivism in an effort to keep Alabama’s overcrowded prisons out from under federal control. The legislation maintains the state’s current felony theft threshold of $500, which retailers need to protect their stores and property. Ward says the bill avoids early releases, utilizes alternative programs to incarceration and in five years, coupled with an effort to add 1,700 beds, will reduce the occupancy rate in Alabama’s prisons from 192 percent to 142 percent.

Under the bill, thefts between $500 and $1,499 in value become Class D, rather than Class C felonies. The bill creates the new lower-level, Class D felony to put those convicted of nonviolent property crimes in community corrections programs, rather than prison, at least initially. Theft of amounts less than $500 would still result in a misdemeanor charge, as they do now. For the first through fourth convictions, Class D offenders, as long as they haven’t committed any greater felonies, will be sentenced to community corrections programs, secure facilities (not county jails) that offer intensive programming for offenders. Thirty-seven such programs already exist in our state, serving 45 of the 67 counties, according to the Justice Center for the Council of State Governments. That same four-time Class D offender would be punished as if he/she had committed a Class C felony upon a fifth Class D conviction, which would increase the prison time to up to 10 years. Conviction of a Class D felony on top of higher-class felony convictions would pull the offender into the state’s four-strikes-and-you-are-out provisions that could result in life imprisonment.


ECONOMIC DEVELOPMENT

Governor Gets First Alabama Jobs Incentive Bill

Legislation encouraging existing Alabama businesses to reinvest in their current operations is the first in a package of economic incentive legislation to make it to the governor’s desk.

The Alabama Senate gave final approval Thursday to HB59, the Alabama Reinvestment and Abatements Act, by Rep. Paul Lee, R-Dothan, sending the bill to the governor. To qualify for the incentives, businesses must have at least $2 million in new capital expenditures and must be the type of business eligible for the incentives offered under the main bill in the package being pushed by the governor and the Alabama Republican Party caucuses. The incentives in HB59 take effect 90 days after the governor signs the bill into law.

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday added amendments to the other two bills in the package:

  • HB58, the Alabama Jobs Act, by Rep. Alan Baker, R-Brewton, gives businesses that create at least 50 jobs in our state: a jobs credit equal to 3 percent of the company’s previous year’s wages paid to new employees; and an investment credit of 1.5 percent, both good for 10 years. Four amendments were added to the bill in committee, which means once it is approved by the full Senate, it will have to go back to the House for concurrence.
  • HB57 by Rep. Elaine Beech, D-Chatom, extends additional incentives to Alabama Jobs Act projects that create at least 25 jobs and locate in low-income counties with 70,000 or fewer residents and no municipalities with populations of more than 25,000. The legislation also gives additional job credits to the Jobs Act qualifying projects that employ veterans as at least 12 percent of their workforce. The committee amended the bill to switch its focus from rural areas to low-income areas. According to the Alabama Department of Commerce, businesses locating in 55 of the state’s 67 counties could qualify for the extra incentives offered under this bill. The Alabama Senate brought the bill up late Thursday afternoon, but delayed consideration so supporters could work on keeping the focus of the bill on extra incentives for the areas most in need of industries and the jobs they provide.

The incentives in all three bills are offered through a pay-as-you-go system. The incentives are only given after jobs are created and investments are made.


ALCOHOL

Local Alcohol Sales Bills on Governor’s Desk

The Alabama Legislature this week sent four local alcohol-related bills to the governor for his signature.

The Alabama Senate on Wednesday gave final approval to three River Region area bills, while the House gave the final nod Thursday to the Senate companions of those bills:

  • HB81 by Rep. Mike Holmes, R-Wetumpka, and SB47 by Sen. Clyde Chambliss, R-Prattville, allow the Wetumpka City Council to authorize Sunday alcohol sales for on-premise consumption in Wetumpka between noon and 9:30 p.m.
  • HB82 by Rep. Mike Holmes, R-Wetumpka, and SB48 by Sen. Clyde Chambliss, R-Prattville, allow the Wetumpka City Council to authorize draft beer sales in the city.
  • HB20 by Rep. Paul Beckman, R-Prattville, and SB42 by Sen. Dick Brewbaker, R-Montgomery, allow the Millbrook City Council by a majority vote to authorize draft beer sales and permit Sunday sales of alcoholic beverages after noon for on-site consumption.

Also on the governor’s desk is SB171 by Sen. Steve Livingston, R-Scottsboro, which allows the Scottsboro City Council by a majority vote to regulate and permit Sunday alcohol sales. The Alabama House gave the bill final approval Thursday. The House companion was HB219 by Rep. Tommy Hanes, R-Bryant, which the House had approved Tuesday.


Variety of Alcohol Legislation Sees Floor
or Committee Action This Week

Four other local bills and one statewide alcohol-related bill saw movement in the Legislature this week:

  • FORT PAYNE DRAFT BEER. Both the House and Senate passed companion bills this week that would allow the Fort Payne City Council to authorize the sale of draft or keg beer or malt beverages in the city limits. The Alabama House on Tuesday approved HB223 by Rep. Nathaniel Ledbetter, R-Rainsville. The Alabama Senate on Thursday approved the Senate companion, SB168 by Sen. Steve Livingston, R-Scottsboro.
  • SHELBY COUNTY SUNDAY SALES. The Alabama House on Thursday approved HB301 by Rep. Mike Hill, R-Columbiana, a local constitutional amendment that would allow alcohol sales in Shelby County after noon on Sundays. If the Legislature enacts this legislation, the constitutional amendment would be on the ballot during the next countywide election in Shelby County. It awaits consideration by the Senate Shelby County Local Legislation Committee.
  • ST. CLAIR COUNTY SUNDAY SALES. The Alabama Senate on Thursday approved SB259 by Sen. Jim McClendon, R-Springville, which authorizes elections within St. Clair County and its cities on Sunday alcohol sales. It awaits consideration by the House Local Legislation Committee.
  • TIMING OF ALCOHOL REFERENDUMS. The Senate County and Municipal Government Committee on Wednesday approved SB210 by Sen. Dick Brewbaker, R-Montgomery, which requires that wet/dry elections be held no less than 82 days nor more than 97 days following the date a petition is filed for a referendum. It now goes to the full Senate for consideration.
  • HOUSTON COUNTY SUNDAY SALES. The House Local Legislation Committee on Thursday approved HB308 by Rep. Steve Clouse, R-Ozark, which authorizes the Houston County probate judge to set a referendum on whether to allow alcohol sales in Houston County between 1 p.m. and midnight on Sundays. Local governments in Houston County, except the city Dothan, can opt out of Sunday sales through approval of an ordinance or resolution. The bill now goes to the full House for consideration.

Liquor/Wine Tastings, Rogersville Draft Beer
Among Bills Introduced This Week

SB247 by Sen. Billy Beasley, D-Clayton, and HB294 by Rep. Margie Wilcox, R-Mobile, would allow licensed liquor manufacturers or representatives to conduct liquor and wine tastings, at no charge to consumers, in retail and state liquor stores. Under this legislation, tasting servings would be restricted to one-quarter ounce of liquor with no more than two products or one ounce of wine with no more than four products at any tasting. The Senate bill has been assigned to the Senate Tourism and Marketing Committee, while the House bill has been assigned to the House Economic Development and Tourism Committee.

HB280 by Rep. Lynn Greer, R-Rogersville, would allow the Rogersville Town Council by a majority vote to permit draft beer sales in the town. The bill has been assigned to the House Local Legislation Committee.


UNEMPLOYMENT

House OKs Bill Encouraging
Unemployed to Work Part Time

People drawing unemployment checks would still be able to earn up to $88 per week without losing their benefits under a bill the Alabama House of Representatives passed Tuesday. On a vote of 94-2, the House approved HB19 by Rep. Jack D. Williams, R-Birmingham, which allows people who’ve been unemployed to do temporary work that would bring home extra money – while giving them a chance to demonstrate to employers that they’re worth hiring. The bill alters 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 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. The Senate Fiscal Responsibility and Economic Development approved the Senate companion, SB 46 by Sen. Clyde Chambliss, R-Prattville, at its Wednesday meeting. Chambliss said the bill gives those trying to re-enter the workforce a tool to do so.


LEGAL

House to Consider Small Claims Change on March 31

The House Commerce and Small Business Committee on Wednesday approved HB232 by Rep. Jack D. Williams, R-Birmingham, which increases the jurisdiction of the small claims court by $3,000. Under the bill, for the amount in controversy to be considered a small claim would go from $3,000 or less to $6,000 or less. The bill leaves intact the filing fees for all controversies of $3,000 or more. The bill is on the House’s calendar for Tuesday, March 31. The Senate companion is SB74 by Sen. Greg Albritton, R-Bay Minette. It has been assigned to the Senate Judiciary Committee.


Bill Allows Labor Department
to Sue Child Labor Violators to Collect Penalties

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday approved SB219 by Sen. Steve Livingston, R-Scottsboro, which allows the Alabama Department of Labor to file a lawsuit to collect civil penalties for child labor law violations. The suit must be filed in the county where the violation occurred. Civil penalties for violations of child labor law range from $300 to $5,000 for each employee affected by a violation. The bill now goes to the full Senate for consideration.


ELECTRONIC FILING

Senate Panel Approves Electronic Business Entity Filings

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday approved SB229 by Sen. Steve Livingston, R-Scottsboro, which would create an electronic process for business entity and nonprofit filings with probate judges and the secretary of state. The secretary of state would create the pilot online filing system, while counties’ participation would be voluntary. The online system is to include filing of forms, online recording and payment of fees through credit or debit cards. The bill now goes to the full Senate for consideration.


FOOD

Bill Provides Financing for Grocery Stores in Food Deserts

The Senate Health and Human Services Committee on Wednesday approved SB260 by Sen. Greg Reed, R-Jasper, which creates the Healthy Food Financing Act to provide financing for grocery stores to operate in low and moderate income areas in order to increase the availability of fresh and nutritious food to underserved communities. Any federal, state or private funds available for the purpose of attracting grocery stores to underserved areas would go into a fund, from which a minimum of 25 percent would be used for grants or forgivable loans to retailers seeking to build, renovate or expand grocery stores in underserved areas. The bill now goes to the full Senate for consideration. The House Agriculture and Forestry Committee will take up the House companion, HB283, by Rep. James Buskey, R-Mobile, at 3 p.m. April 1.


WORKPLACE ISSUES AND POLICIES

Committee Carries Over Workplace Anti-Bullying Legislation

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday carried over SB195 by Sen. Rodger M. Smitherman, R-Birmingham, which would make harassment, intimidation or bullying in the workplace an unfair labor practice. The bill requires employers to establish and implement a policy to address workplace harassment, intimidation or bullying and to promote bullying prevention. It creates a cause of action for an employee against an employer or fellow employee who commits harassment, intimidation or bullying. Harassment, intimidation and bullying are defined as any act that substantially interferes with an employee’s work performance or creates an intimidating, hostile or offensive work environment. Alabama’s Labor Commissioner would adopt rules to enforce this act. “We as a legislative body are going to have to man up to tough social issues,” Smitherman told the committee after agreeing to delay consideration of the bill.


House Panel OKs Bill Making Employer
Liable for Child Support
That Employer
Prevented from Being Collected

The House Judiciary Committee on Wednesday amended and approved HB222 by Rep. Becky Nordgren, R-Gadsden. The bill makes an employer who protects an employee’s wages from being garnished or withheld for the purposes of child support personally liable for the child support that could have been garnished or withheld. The committee amended the bill to say: “proof of the employer’s intent to protect the wages of the employee in a manner violating this section must be established by clear and convincing evidence.” The bill now goes to the full House for consideration.


Bills Changing Workplace Defibrillator Requirements Moving

Under HB246 by Rep. April Weaver, R-Brierfield, which the House Health Committee approved Wednesday, physicians would not have to be involved in the use of an automated external defibrillator. The bill also encourages, rather than requires, owners to receive training on the use of automated external defibrillators and cardiopulmonary resuscitation. It does require defibrillator manufacturers to provide in-house training to those to whom they sell defibrillators. The bill is on the full House’s agenda for Tuesday, March 31. The Senate companion, SB213, also was approved by the Senate Health Committee on Wednesday and is ready for consideration by the full Senate.


Bill Bans Intimidation and Blocking
of Accesses During Labor Negotiations

Rep. Margie Wilcox, R-Mobile, this week introduced HB326, the Prohibition Against Employer Intimidation Act, which would ban unlawful intimidation of employers or employees during labor negotiations in an effort to obtain a neutrality agreement, card check agreement, collective bargaining recognition or other objective of an organized initiative. The bill would also prohibit unlawful mass picketing or mass demonstrations that deny public or private access to buildings and places. The effective date of the bill is July 1, 2015. The bill has been assigned to the House State Government Committee.


Bill Allows Voluntary Policy
to Give Veterans Preference in Hiring

Sen. Bill Holtzclaw, R-Madison, this week introduced SB269, or the Voluntary Veterans’ Preference Employment Policy Act, which would allow private employers to have a written voluntary veterans’ preference employment policy. The policy would have to be applied uniformly to employment decisions, such as hiring, promotion or retention. The bill has been assigned to the Senate Veterans and Military Affairs Committee.


NEXT LEGISLATIVE DAY

The Alabama House will convene at 1 p.m. Tuesday, March 31, for the ninth legislative day of the 2015 regular session. The Alabama Senate will convene at 2 p.m.


FEDERAL

U.S. House Votes to Overturn Regulation
Allowing Ambush Union Elections; Veto Looms

The U.S. House voted 232-186 Thursday for S.J.Res.8, which would overturn a National Labor Relations Board regulation allowing “ambush” union organizing elections. The U.S. Senate approved the legislation earlier this month by a vote of 53-46. The resolution now goes to the president who has vowed to veto it.

Under the seldom-used Congressional Review Act, lawmakers can block any regulation they disapprove of from going into effect.

The NLRB issued the regulation in December, and it is scheduled to take effect on April 14. Under the new rule, union organizing elections could take place in as few as 14 days after a petition is filed, down from the current median of 38 days. Employers would also be required to turn over workers’ personal contact information to union organizers. The rule infringes on employee and employer rights and is an attempt to favor union organizing.

A host of business groups are also challenging the rule in court.


House Subcommittee Debates
Federal Data Security and Breach Bill

The House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade conducted a lengthy hearing Wednesday on a discussion draft of the Data Security and Breach Notification Act of 2015, which first surfaced last week.

The National Retail Federation advocated for a federal data breach notification law, saying such a measure “must apply to all entities handling sensitive information, including cloud services companies, payment processors, telecommunications firms and branded payment networks; must reflect a strong consensus of existing state laws; and must preempt state laws in order to establish a truly uniform nationwide standard.”

Former Federal Trade Commission chairman Jon Leibowitz, who testified as co-chairman of the 21st Century Privacy Coalition, a group of communications companies, said, “Having to comply with a patchwork of state requirements has created confusion and uneven protection even though a single breach rarely obeys state boundaries.

Most of the members of the committee and those who testified spoke in favor of a national data breach and security measure but had objections to varying specifics of the draft proposal.

Read testimony from Wednesday’s data breach hearing (Testimony appears in link after the name and title of each witness.)


Oversight Committee Looks at Cybersecurity

The House Oversight and Government Reform Committee’s Subcommittee on Information Technology conducted a hearing Wednesday on cybersecurity.

The National Retail Federation outlined six solutions supported by the nation’s retailers:

  • Expanding consumer liability protection for using debit cards;
  • Issuance of PIN-and-chip cards that incorporate both computer microchips and use of a personal identification number (PIN) to authenticate a transaction;
  • Adoption of end-to-end data encryption throughout the payments system;
  • Developing open source, competitive tokenization standards to replace sensitive data with unique and unusable tokens;
  • Passage of a uniform nationwide breach notification law applying to all entities that handle sensitive customer information (see story above), and
  • Bolstering federal law enforcement investigation and prosecution of cybercriminals.

The House of Representatives is tentatively scheduled to hold a “Cyber Week” in April to consider legislation from the House Intelligence, Homeland Security, and Energy and Commerce committees.

Read testimony from Wednesday’s cybersecurity hearing (Click on pages next to a witness name to read their testimony)