Friday, May 8, 2015

You Stopped $50 Million in Retailer Taxes;
$100+ Million in Other Taxes Moving

This was revenue week in the Alabama Legislature with more than $100 million in revenue-raising measures moving through committees.

HB553 StoppedOne revenue measure that did not move was HB553 by Rep. Ken Johnson, R-Moulton, an almost $50 million tax increase on retailers. The bill would have taken away the rebate Alabama retailers receive for collecting and remitting Alabama sales taxes in a timely manner. Thanks to your calls, e-mails, texts and Facebook posts and shares, the House Ways and Means Education Committee carried over the bill to the call of the chairman. Thank you also to the sponsor for asking that the bill be carried over. The retail sales tax rebate, which can be up to $400 a month, would have ceased to exist Oct. 1 if the bill had been enacted.

Lawmakers heard the collective voice of Alabama retailers loud and clear. Thank you for answering the call to action, and please continue to stay connected with your association as we face this and other issues in the 2015 regular session.

Ten legislative days remain in the 2015 regular session, which must end by June 15. This week, the House Republicans offered their plan for funding the 2016 general operating budget, which includes some $200 million in savings and revenue along with entering into a $250 million agreement with the Poarch Band of Creek Indians. Early in the session, the governor proposed $541 million in revenue-raising measures. Senate President Pro Tem Del Marsh this week introduced legislation to create a state lottery and casinos at the state’s four greyhound tracks with no tax increases. It is scheduled for a pubic hearing and vote next week.

Next week, the Legislature is expected to begin consideration of the General Fund budget.


TAXES

House Republicans Begin
to Advance Their Revenue Proposals

At a meeting Tuesday, the Alabama House Republican Caucus approved $200 million in cost-saving and revenue measures and then began approving those measures in committee. The bills that touch on retailers and the amount of revenue they will produce include:

BUSINESS PRIVILEGE TAX
The House Ways and Means General Fund Committee on Wednesday approved HB581 by Rep. Elaine Beech, D-Chatom, which increases the maximum amount of business privilege taxes from $15,000 to $20,000 and changes the tax rate determination to taxable net worth, basically assets minus liabilities. It exempts those with less than $10,000 in taxable net worth from the tax. More than 106,000 small firms would no longer have to pay the annual minimum $100 tax, according to the bill’s fiscal note. Under this legislation, the $100 minimum will apply to taxpayers with a taxable net worth of at least $10,000 but less than $80,000. The bill also changes the due date for business privilege tax to April 15. HB581 is estimated to raise $39 million annually.

CIGARETTE TAX
The House General Fund committee also approved HB572 by Rep. Patricia Todd, D-Birmingham, which raises the cigarette tax by 25 cents from 42.5 cents per pack to 67.5 cents per pack. The committee also amended the bill to decrease the discount wholesalers receive for collecting the tax by 2.75 percent, from 7.5 percent to 4.75 percent. “They will keep what they get now in a discount (about $12 million), but won’t get a raise” because of the tax increase, the amendment author said. The legislation does not increase the tax on other forms of tobacco. Those who testified against this tax included representatives of convenience store operators, the wholesale distributors and a major tobacco company. Estimated revenue: $66 million

LUBRICATING OIL
The House Ways and Means Education Committee at first defeated, then the next day approved HB587 by Rep. Terri Collins, R-Decatur, which places a 4 percent sales tax rather than a six-cent excise tax on lubricating oil. Currently, the tax on a 55-gallon barrel of lube oil is $3.30. Collins’ bill increases that tax to $200 per barrel. Estimated revenue: minimum of $8.5 million

CAR RENTAL TAX
The House Ways and Means General Fund Committee also approved HB267 by Rep. Steve Clouse, R-Ozark, which would increase the state’s vehicle rental and lease tax from 1.5 percent to 2 percent. His original bill, which was included in the governor’s revenue measures, called for a 4 percent tax increase. Opponents included a car rental company and the Alabama Trucking Association. Estimated revenue: $6.1 million

CAR SALES TO OUT-OF-STATE RESIDENTS
Currently, Alabama does not charge sales tax on automobiles purchased within the state by out-of-state residents and then driven out-of-state. On Wednesday, the House General Fund committee approved HB593 by Rep. Ken Johnson, R-Moulton, which would remove that exemption for out-of-state residents unless their state allows an Alabama resident to purchase an automobile without paying tax to that state. The committee amended the bill to exclude county and local taxes and to remove a car buyers’ liability for remitting the incorrect tax if the tax rate information provided by the state is incorrect. Estimated revenue: $2 million

AMUSEMENT-ENTERTAINMENT
MACHINE PRIVILEGE LICENSE
Thursday, the House Ways and Means General Fund Committee approved a substitute version of HB595 by Rep. David Faulkner, R-Birmingham, which would assess an annual license fee for amusement or entertainment machines regardless of the sales derived from the machines. The fee is based on the number of machines a business has. Currently, business owners pay sales tax based on the profits of each machine. This bill does away with the sales tax and requires licensing only. Faulkner said there are 15,000 to 20,000 machines statewide. The bill bans local governments from adding additional taxes or fees for the machines. Estimated revenue: $1.4 million

>> Read the full GOP plan

The bills now go to the full House for consideration, possibly as early as next week.


Committee Moves Bill Seeking Voluntary
Sales Tax Collection by Amazon, Other Remote Sellers

PittmanOrrThe Senate Finance and Taxation General Fund Committee on Wednesday amended and approved SB437 by Sen. Trip Pittman (left in photo), R-Daphne, which would give certain mega online retailers a tax break if they will start collecting taxes from Alabama customers. The legislation would allow remote sellers without a physical presence in our state to:

  • collect use taxes Alabama customers owe on items delivered to our state at a flat rate of just eight percent, regardless of where the items were delivered within the state. The average sales tax rate in Alabama is 8.91 percent.
  • receive a discount of two percent on all use taxes remitted with no cap on the amount they retain.
  • stay in this voluntary sales tax collection program, even if Congress enacts e-fairness legislation requiring all retailers to collect sales taxes.
  • receive amnesty for all uncollected sales tax during the year before they begin participating, if the seller participates for at least three years.

The goal is to collect at least some of the sales taxes that currently aren’t being collected in the state by certain large, online retail merchants that don’t have stores in Alabama.

The “non-nexus sellers” would only be required to give a statewide total of sales made monthly to Alabama customers and would not have to report the location of the purchasers or amount of sales delivered to a specific locality. A quarter of the taxes collected would be shared among the state’s counties and a quarter would be shared with the state’s cities regardless of where the customers who purchased the items live.

The committee made a technical amendment to the legislation suggested by the Alabama Department of Revenue, but decided against an amendment suggested by local governments to sunset the legislation should Congress require remote sellers to collect and remit sales or use tax to the states and local taxing jurisdictions. A legislative analyst told the committee that adding the sunset amendment would “take away the carrot” for remote sellers to participate in the program.

Sen. Bill Holtzclaw, R-Madison, the lone member to vote against the bill, said he did so because a patchwork quilt of state e-fairness laws discourages the federal government from acting.

The bill carries an effective date of Jan. 1, 2016. It now goes to the full Senate for consideration.


Panel OKs Revisions to Motor Fuel Marketing Act

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday approved SB434 by Sen. Bill Holtzclaw, R-Madison, which aims to simplify the current law governing the combined sales of motor fuel and other goods under the Motor Fuel Marketing Act. The bill now goes to the full Senate for consideration.


Jefferson County Delegation OKs Extending Sales Tax

The House Jefferson County Legislation Committee on a voice vote Tuesday approved HB573 by Rep. Oliver Robinson, D-Birmingham, which allows the Jefferson County Commission to refinance its $1 billion school construction debt and pay it off by extending a one-cent sales tax. The bill extends for an extra 19 years a one percent sales tax passed in 2004 that was supposed to go away in about 11 years.

Proceeds of the extended tax would go to schools, transportation, the Birmingham Zoo, roads and industry recruitment. Each local lawmaker also would share a portion of the proceeds to use for projects in their districts.
The bill now goes to the full House for debate.


THEFT REFORM

Governor Says He Will Sign Prison Reform Bill

The Alabama Legislature has overwhelmingly approved sweeping legislation aimed at keeping Alabama’s overcrowded prisons out from under federal control. Lawmakers decidedly embraced SB67 by Sen. Cam Ward, R-Alabaster, sending it Thursday to the governor for his signature. The historic prison reform legislation maintains the state’s current felony theft threshold of $500, which retailers need to protect their stores and property.

This is the first step in a long path forward,” Ward told lawmakers.

The House of Representatives passed the bill 100-5 and the Senate concurred in the House changes on a vote of 27-0. The governor said he will sign it after a legal review.


UNEMPLOYMENT

Bill Encouraging Unemployed
to Work Part Time on Governor’s Desk

The Senate gave final approval Tuesday to 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 companion was SB46 by Sen. Clyde Chambliss, R-Prattville.


WORKPLACE ISSUES AND POLICIES

Legislation Changing Workplace Defibrillator
Requirements Ready for Final Consideration

Without discussion, the Alabama Senate on Tuesday gave final approval to legislation to update state law regarding use of automated defibrillators. Under HB246 by Rep. April Weaver, R-Brierfield, physicians would not have to be involved in the use of an automated external defibrillator, which essentially talk operators through the proper process. 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. The Senate companion was SB213 by Sen. Tim Melson, R-Florence. The House bill now goes to the governor for his signature.


Senate OKs Bill Allowing Labor Department
to Sue Child Labor Violators to Collect Penalties

The Alabama Senate on Tuesday 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 House State Government Committee for consideration.


Bill Banning Local Government Interference
with Hiring and Labor Relations Clears Committee

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday amended and approved SB403 by Sen. Greg Albritton, R-Bay Minette, which bans county and municipal governments from adopting laws, ordinances or policies that:

  • interfere with an employers’ ability to conduct background checks and any other lawful investigations relating to an employee or potential employee that comply with state law.
  • require any employer or employee to waive their rights under the National Labor Relations Act.
  • interfere with the state’s authority to regulate collective bargaining under federal labor laws.

Albritton told the committee that the bill would prevent local governments from interfering with such employment issues as minimum pay and time off.

The companion bill HB495 by Rep. Arnold Mooney, R-Birmingham, awaits consideration by the House State Government Committee. Albritton also introduced another similar bill, SB408.


Lawmaker Introduces Anti-Discrimination Bill

HB615 by Rep. Chris England, D-Tuscaloosa, seeks to safeguard employment, housing, public accommodations, credit transactions and accessing the right to vote from discrimination based on race, color, religion, national origin, sex, sexual orientation, gender identity, disability, or familial status.

The bill creates causes of action related to any discriminatory practices complete with compensatory and punitive damages as well as back pay, the cost of litigation and reasonable attorney’s fees.

The bill would apply to businesses or organizations with nine or more employees. The bill, introduced this week, has been assigned to the House Judiciary Committee.


Bill Would Leave Wages Available for Debt Collection

Rep. Mike Hill, R-Columbiana, this week introduced legislation that would make it so compensation, such as wages and salaries, could not be exempted from garnishment or debt collection. HB634 has been assigned to the House Judiciary Committee.


FOOD

Financing of Grocery Stores in Food Deserts
Ready for House Consideration

The House Agriculture and Forestry Committee approved identical bills Wednesday to create a funding mechanism to attract grocery stores to low and moderate income areas in order to increase the availability of fresh and nutritious food. HB283 by Rep. James Buskey, R-Mobile, and SB260 by Sen. Greg Reed, R-Jasper, were amended to make the Alabama Department of Economic and Community Affairs, rather than the Alabama Department of Agriculture and Industries, administrator for the program.

Under the legislation, 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 the underserved areas, known as food deserts. The bill gives the state the ability to ask for funds for food deserts, but it does not commit any state funds to the effort at this time.

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.

Both bills are now ready for consideration by the full House. If approved, the Senate bill would have to go back to the Senate for approval of the House changes before the governor could sign off on it.


WIC Changes Peanut Butter Policy

As of June 1, Alabama participants in the Women, Infant and Children program, or WIC, will no longer be required to buy the least expensive peanut butter. Participants will be able to buy any WIC-approved peanut butter. Grocery stores should have received inserts about the peanut butter change for the Alabama WIC Approved Foods brochure. If you have questions, contact the Alabama WIC office at (334) 206-5673.


HEALTH

Panel OKs Healthcare Rights of Conscience Bill

The House Health Committee amended and approved HB491 by Rep. Arnold Mooney, R-Birmingham, which would give healthcare providers, including pharmacists, the right to refuse some reproductive healthcare services that violate their conscience. The bill has 54 cosponsors. In 2014, similar legislation received committee approval but never received a floor vote. The issue also has failed to make it through the legislative process prior to 2014.


Committee Approves Medical Record Request Bill

The House Judiciary Committee on Wednesday added three amendments to HB228 by Rep. Tim Wadsworth, R-Arley, which would allow a patient to request all medical records from medical providers, including itemization of charges and allow the custodian of those records to process the request and deliver the records in the same manner as requests for hospital records are processed.


ALCOHOL

Houston County Can Call Sunday Sales Referendum

Wednesday, the governor signed into law legislation that authorizes the Houston County probate judge to set a referendum on allowing alcohol sales in Houston County between 1 p.m. and midnight on Sundays. Under Act No. 2015 – 117 by Rep. Steve Clouse, R-Ozark, local governments in Houston County, except the city Dothan, can opt out of Sunday sales through approval of an ordinance or resolution.

The bill is identical to the one passed by the city of Dothan in 2013, which allows the sale of alcoholic beverages in that city on Sundays after 1 p.m.


Draft Beer for Collinsville
and Sunday Sales for Valley Get Final OK

Thursday, the Senate gave final approval to:

  • HB489 by Rep. Richard J. Lindsey, D-Centre, which would allow the Collinsville Town Council in DeKalb County to authorize the sale of draft or keg beer or malt beverages.
  • HB479 by Rep. Isaac Whorton, R-Valley, which would allow the Valley City Council to ask voters to approve Sunday alcohol sales after noon. Valley is in Chambers County. If the council approved it, the referendum would be held at the next regular or special election.

The bills now go to the governor for his signature.


NEXT LEGISLATIVE DAY

The Alabama House will convene at 1 p.m. Tuesday, May 12, for the 21st legislative day of the Alabama Legislature’s 2015 regular session. The Alabama Senate will convene at 2 p.m.