Friday, April 3, 2015
General Fund Budget Grim;
No Action on Revenue Proposals
Alabama legislators got their first look this week at what the state’s general operating budget would look like without new revenue sources, but delayed looking at any of the governor’s proposals to raise revenue.
Wednesday, the chairmen of the House and Senate General Fund committees — Rep. Steve Clouse, R-Ozark, and Sen. Arthur Orr, R-Decatur — distributed a rough draft of a spending plan without additional revenue.
The General Fund would shrink by $240 million to $290 million based on various estimates, and state agencies overall could see cuts of 11.5 percent or higher next fiscal year. Individual agencies could face even higher cuts: 20 percent for courts, 23.5 percent for Mental Health; and 30 percent for the Department of Human Resources.
Clouse postponed hearings on the revenue proposals, saying he first wanted to hear from state agencies about their needs and how they would be impacted by budget cuts.
In February, Gov. Robert Bentley proposed a $541 million tax increase with the bulk — $405 million — coming from raising cigarette taxes by 82 cents per pack, as well as other tobacco products, and raising the sales taxes on automobile purchases from 2 percent to 4 percent.
The Legislature already has begun whittling down the governor’s proposals with many House members supporting an alternative proposal that would raise cigarette taxes by 32.5 cents. The vehicle sales tax proposal introduced only calls for a three percent tax.
The governor has also proposed shifting of $187 million in existing revenue to the state’s General Fund. The General Fund proposal presented this week also banks on a shift in use taxes from the Education Trust Fund that has not been approved. Without the funds shift, total state funding cuts would jump to 16 percent, the budget chairmen said.
The Alabama Legislature has completed the first third of its regular session with no action on the budget nor any movement of any new taxes. The governor has threatened to call the Legislature back in as many special sessions as needed to solve the state’s funding issues. The regular session continues until mid-June.
LEGAL
House Approves Doubling
Jurisdiction of Small Claims Court
After lengthy discussion and in a close 54-39-2 vote Tuesday, the Alabama House of Representatives approved HB232 by Rep. Jack D. Williams, R-Birmingham, which doubles the amount of claims that can be settled in small claims court. The bill now goes to the Senate Judiciary Committee for consideration.
Small claims now involve amounts of $3,000 or less. The bill increases that maximum amount to $6,000. The bill leaves intact the filing fees for all controversies of $3,000 or more. The Senate companion is SB74 by Sen. Greg Albritton, R-Bay Minette. It is also assigned to Senate Judiciary.
“This bill gives businesses the opportunity to collect rightfully owed debts,” said Williams, who said the law governing small claims hasn’t been amended since 1996. Over the past 20 years, the cost of goods has increased significantly, he added. Only one state, Rhode Island, has a lower limit for small claims than Alabama, Williams said. Georgia’s maximum for small claims court is $15,000.
Rep. Paul Beckman, R-Prattville, tried unsuccessfully to amend the bill to require those with claims of more than $3,000 to have a licensed attorney represent them. In small claims court, you do not have to an attorney represent you, which reduces significantly the cost of going to court.
ECONOMIC DEVELOPMENT
Primary Alabama Jobs Incentive Bill Goes to Governor
The cornerstone of the economic development package being pushed by the state’s industry recruiters, the governor and the Republican majority is now on the governor’s desk awaiting his signature.
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 a capital investment credit of 1.5 percent.
Both credits are good for 10 years. The incentives are only given after jobs are created and investments are made. The bill sets an $850 million aggregate for the incentives offered.
The governor visited both chambers Tuesday to promote the package. “Our incentives are 15 years old,” he said. “They are based primarily on debt. We want to get away from being based on debt and to be based more on production.” The pay-as-you-go incentive bill also requires a contract with the state that includes clawbacks for when companies receive incentives but then fail to meet investment or job-creating obligations.
Meanwhile, another bill in the package, the Alabama Reinvestment and Abatements Act by Rep. Paul Lee, R-Dothan, has been signed into law. Act. No. 2015-24 gives tax abatements to existing, qualified Alabama businesses that invest at least $2 million in their current operations. The incentives for existing businesses are effective June 25, 90 days after the governor signed them into law.
The Senate on Thursday passed a substitute version of a third bill, HB57 by Rep. Elaine Beech, D-Chatom, which extends additional incentives to Alabama Jobs Act projects that create at least 25 jobs and either locate in counties with fewer than 25,000 people or employ veterans. It now goes back to the House for concurrence.
THEFT REFORM
Committee OKs Substitute Prison Reform Bill
The Alabama Senate on Thursday approved prison reform legislation that maintains the state’s current felony theft threshold of $500, which retailers need to protect their stores and property. SB67 by Sen. Cam Ward, R-Alabaster, targets recidivism and greater investment in probation and parole services in an effort to keep Alabama’s overcrowded prisons out from under federal control.
Under the bill, thefts between $500 and $1,499 in value become Class D, rather than Class C felonies. Theft of amounts less than $500 would still result in a misdemeanor charge, as they do now.
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. The state’s Habitual Offender Act does not apply to the new felony.
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.
The bill now goes to the House Judiciary Committee for consideration.
FOOD
Senate OKs Fund to Finance
Grocery Stores in Food Deserts
The Alabama Senate on Tuesday unanimously 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.
Reed told senators, “Alabama doesn’t have the ability to ask for the funds available for food deserts, because we don’t have the methodology to do so.” The U.S. Department of Agriculture defines food deserts as low-income urban neighborhoods and rural towns without ready access to fresh, healthy and affordable food. In urban areas, a food desert exists if there is not access to a grocery store or a healthy, affordable food retail outlet within a one-mile radius. In a rural setting, the radius is 10 miles.
The Senate bill now goes to the House Agriculture and Forestry Committee, where it and the House companion HB283, by Rep. James Buskey, R-Mobile, are on the agenda for the committee’s April 8 meeting.
WORKPLACE ISSUES AND POLICIES
House and Senate Pass Bills Changing
Workplace Defibrillator Requirements
Companion bills that would update the state law regarding use of automated defibrillators passed both the House and Senate on Tuesday, without dissent. Under HB246 by Rep. April Weaver, R-Brierfield, and SB213 by Sen. Tim Melson, R-Florence, physicians would not have to be involved in the use of an automated external defibrillator. The legislation 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. It also includes a “Good Samaritan” exemption from liability for any individual who renders emergency treatment with a defibrillator.
Weaver told House members that many of today’s defibrillators can be operated by almost anyone as the machines talk the user through the process. Having an automated external defibrillator nearby when someone suffers sudden cardiac arrest can increase the survival rate by 50 percent to nearly 70 percent, according to the latest data.
The House bill awaits consideration by the Senate Health and Human Services Committee, while the House Health Committee will consider the Senate bill at its April 8 meeting.
Senate Panel OKs Preferential Hiring for Veterans
The Senate Veterans and Military Affairs Committee on Wednesday approved the Voluntary Veterans’ Preference Employment Policy Act by Sen. Bill Holtzclaw, R-Madison. SB269 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 now goes to the full Senate for consideration.
ALCOHOL
Governor Signs Local Alcohol Sales Bills into Law
Over the spring break, Gov. Robert Bentley signed into law, four bills altering alcohol sales in three cities:
- Act No. 2015-21 is by Sen. Steve Livingston, R-Scottsboro allows the Scottsboro City Council by a majority vote to regulate and permit Sunday alcohol sales. The Senate Local Legislation Committee on Tuesday approved the House companion, HB219 by Rep. Tommy Hanes, R-Bryant.
- Act No. 2015-5 by Rep. Paul Beckman, R-Prattville, and Act. No. 2015-17 by Sen. Dick Brewbaker, R-Montgomery, allowed 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. The council voted March 24 to approve both draft and Sunday sales, which began March 29. Draft sales will begin as businesses acquire the proper equipment and product.
- Act No. 2015-6 by Rep. Mike Holmes, R-Wetumpka, and Act No. 2015-19 by Sen. Clyde Chambliss, R-Prattville allow the Wetumpka City Council to authorize draft beer sales in the city.
- Act. No. 2015-7 by Rep. Mike Holmes, R-Wetumpka, and Act. No. 2015-18 by Sen. Clyde Chambliss, R-Prattville, allow the Wetumpka City Council to authorize Sunday alcohol sales for on-site consumption in Wetumpka between noon and 9:30 p.m. The Wetumpka City Council will vote on both the draft beer and Sunday sales laws at their April 6 meeting. If approved, the laws will be effective with their publication in a local newspaper on April 8.
Five Local Alcohol Bills See Action This Week
Tuesday, the Alabama House 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 Senate Local Legislation Committee.
Thursday, the House approved HB280 by Rep. Lynn Greer, R-Rogersville, which would allow the Rogersville Town Council by a majority vote to permit draft beer sales in the town. It now goes to the Senate Local Legislation Committee.
The House Baldwin County Local Legislation Committee on Tuesday approved HB137 by Rep. Harry Shiver, R-Bay Minette, which allows the Bay Minette City Council to call an election in the next year asking city voters to approve on-premises Sunday alcohol sales. The bill now goes to the full House for consideration.
The Senate Local Legislation Committee on Tuesday approved HB223 by Rep. Nathaniel Ledbetter, R-Rainsville, which would allow the Fort Payne City Council to authorize the sale of draft or keg beer or malt beverages in the city limits. The bill awaits final consideration by the full Senate. The Senate has approved the companion bill, SB168 by Sen. Steve Livingston, R-Scottsboro, which the House Local Legislation Committee approved Thursday. It now goes to the full House for final consideration.
The Senate Shelby County Local Legislation Committee on Tuesday 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. The bill now goes to the full Senate for final consideration.
Debate Set for Next Week on General Alcohol Bills
The Senate Tourism and Marketing Committee will considert four alcohol-related bills Wednesday, April 8:
- SB128 by Sen. Paul Sanford, R-Huntsville allows small breweries to enter into enforceable contracts with beer wholesalers that provide for the termination or changing of their relationship with beer wholesalers.
- SB207 by Sen. Tom Whatley, R-Auburn, allows licensed alcohol sellers to move from one location to another without having to pay an additional fee, reapply for a license or be re-inspected by the Alcoholic Beverage Control Board. The local governing jurisdiction must approve of the relocation. This includes sale of items for off-premise consumption
- SB214 by Sen. Larry Stutts, R-Tuscumbia, creates a license for limited production breweries that allows them to produce beer and operate a restaurant on their licensed premises and sell their beer at the brewery and restaurant.
- SB247 by Sen. Billy Beasley, D-Clayton, allows 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 House companion, HB294 by Rep. Margie Wilcox, R-Mobile, has been assigned to the House Economic Development and Tourism Committee.
UNEMPLOYMENT
Senate Next for Bill Encouraging
Unemployed to Work Part Time
The Senate will get the final say on HB19 by Rep. Jack D. Williams, R-Birmingham, which allows the unemployed to do temporary work to demonstrate to employers that they’re worth hiring. People drawing unemployment checks would still be able to earn up to $88 per week without losing their benefits under the bill, which the Senate Fiscal Responsibility and Economic Development Committee approved Wednesday.
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 Committee also has approved the Senate companion, SB 46 by Sen. Clyde Chambliss, R-Prattville.
LABELING
House Panel Approves Catfish Origin Notification Bill
After a public hearing Wednesday, the House Agriculture and Forestry Committee approved HB186 by Rep. A.J. McCampbell, D-Livingston. The bill would require restaurants, grocery delis and other food service establishments to notify customers of the country of origin for the entire catfish species order, Siluriformes. The law at both the federal and state levels defines catfish as only those fish belonging to the Ictaluridae family, which is the North American family of catfish. Anything else advertised or labeled as catfish is considered fraud. If this legislation becomes law in Alabama, food service establishments would have to follow the same notification requirements for all species of catfish. The Senate companion is SB211 by Sen. Bobby Singleton, D-Greensboro. It awaits consideration by the Senate Agriculture, Conservation and Forestry Committee.
TAXES
Adding Lodging Tax Filings
to ONE SPOT Headed to House
County and municipal lodgings tax could be filed and remitted with sales, use and rental taxes through the state’s ONE SPOT filing system under SB130 by Sen. Paul Sanford, R-Huntsville, which the House County and Municipal Government Committee approved Wednesday. The Senate unanimously approved the bill March 12. It now goes to the full House for final consideration.
Bill Removes Liability for Collecting Wrong Tax
if Governments Provide Incorrect Rates
Sen. Paul Sanford, R-Huntsville, this week introduced SB322, which relieves business taxpayers from liability for charging and collecting the incorrect tax rate if local governments do not properly notify the state of local tax increases and if, as of March 1, 2016, the state provides incorrect information on the total tax rates for sales, use, rental or lodgings taxes.
The bill requires local governments to give the Alabama Revenue Department 60 days notice, rather than the current 30-day notice, of the effective date of any local tax increases and shifts the effective date for local tax increases until the first day of the third month following the Revenue Department receiving notification of the increase.
Alabama Department of Revenue also would be forbidden from charging cities and counties for utilizing the state’s ONE SPOT filing system, which is currently used for sales, use and lease taxes.
POLICE JURISDICTIONS
Bill Limits Frequency and Requires Notice
of Police Jurisdiction Changes
HB377 by Rep. Ron Johnson, R-Sylacauga, would allow a municipality to change its police jurisdiction only once a year and require that municipalities notify residents and businesses of the jurisdiction change 30 days BEFORE enforcing certain ordinances, collecting license fees and levying and collecting taxes within the new jurisdiction. The notice also must be posted on Atlas Alabama, any state-operated site offering business information and on the municipality’s website. The bill has been assigned to the House County and Municipal Government Committee.
ASSISTIVE DEVICES
Bill Would Regulate Returns of Assistive Devices
SB303 by Sen. Cam Ward, R-Alabaster, spells out obligations to replace, refund or remedy new, but defective, assistive devices with a value of $500 or more, including wheelchairs, scooters, hearing aids, voice synthesizers, Braille printers and talking software.
If a manufacturer, dealer or leasing agent can’t fix a defect in a device, the bill calls for a full manufacturer refund plus finance charges and sales taxes or a replacement devise within 30 days of the consumer returning the defective device. The bill’s provisions only apply during the warranty period.
In addition to other remedies, the bill allows a consumer to sue for damages within a year of the violation.
It has been assigned to the Senate Judiciary Committee.
NEXT LEGISLATIVE DAY
The Alabama House will convene at 1 p.m. Tuesday, April 7, for the 11th legislative day of the 2015 regular session. The Alabama Senate will convene at 2 p.m.
FEDERAL
President Vetoes Resolution to Overturn
Ambush Union Election Rule; Rule Effective April 14
As President Obama vowed, he vetoed S.J.Res.8, which would have overturned the National Labor Relations Board regulation allowing “ambush” union organizing elections. The rule gives labor an unfair advantage in elections because employers do not have enough time to make their case to workers. The U.S. House voted 232-186 and the U.S. Senate voted 53-46 to overturn the rule.
With Congress lacking the votes to override the Tuesday veto, the fate of the rule now lies with the courts. Business groups have already filed lawsuits challenging the rule.
Without court intervention, the regulation will take effect April 14. Under the new rule, union organizing elections could take place in as little as two weeks after a petition is filed. Employers also would be required to report workers’ personal contact information to union organizers. The rule favors union organizing and infringes upon employee and employer rights.
