Friday, May 22, 2015
Budgets Moving; Six Days Remain
Just a couple of steps more and Alabama’s education budget will be law, while the state’s general operating budget began its legislative journey this week but has a long way to go with only six days remaining in the Alabama Legislature’s 2015 regular session.
Tuesday, the Alabama House of Representatives approved a General Fund budget that no one favors. A Senate budget committee will begin to reshape that austere budget Wednesday.
The general operating budget at this point is $204 million, or 11 percent, less than the current budget. HB135 prioritizes four agencies: Medicaid, Corrections, Mental Health and Human Resources, dropping their funding by 5 percent. Other agencies would see a 9 percent decrease in funding.
House Ways and Means Committee Chairman Steve Clouse, R-Ozark, told reporters this week that an increased cigarette tax, a soda tax and an increase in the maximum amount of tax owed under the business tax – which also provides a tax break for smaller businesses – are the revenue measures most likely to pass. No soda tax legislation has been introduced at this point, indicating that any new revenue stream may be decided in a special session.
Legislation was introduced this week to shift some revenue. Sen. Arthur Orr, R-Decatur introduced SB496 to change the distribution formula for Alabama’s use taxes to a 50/50 split between the General and the Education Trust funds. Use tax is the term used for sales tax when the customer handles the tax after an out-of-state transaction. Currently, the education fund receives 75 percent of use taxes, leaving 25 percent for the general operating fund. In the case of remote use taxes (sales taxes voluntarily remitted on internet sales) the General Fund receives 75 percent and education gets 25 percent. SB496 makes the split even no matter who pays the use tax.
Alabama’s nearly $6 billion education budget (SB179) this week cleared the House of Representatives and a conference committee. The Senate concurred Thursday with the minor changes made in conference. The education spending plan awaits House action and could be on the governor’s desk next week.
LEGAL
Senate Sends Small Claims Changes to the Governor
Legislation on the governor’s desk will allow more claims to be settled in small claims court rather than having to go to district or circuit court. HB232 by Rep. Jack D. Williams, R-Birmingham, (SB74 by Greg Albritton, R-Bay Minette) increases from $3,000 to $6,000 the maximum claims that can be settled in small claims court. In small claims court, you also do not have to an attorney represent you, which significantly reduces the cost of going to court. The Alabama Senate unanimously approved the bill Tuesday. The House passed the bill March 31 on a vote of 54-39.
TAXES
Senate OKs Legislation Seeking Voluntary
Sales Tax Collection by Amazon, Other Remote Sellers
The Alabama Senate on Thursday approved legislation to give certain mega online retailers a tax break if they start collecting taxes from Alabama customers. Sen. Arthur Orr, R-Decatur, told senators that the state’s cities and counties asked for the legislation to promote the voluntary collection of use taxes Alabama customers owe on items delivered to our state at a flat rate of 8 percent, no matter where in the state the seller ships the purchased items.
The goal of SB437 by Sen. Trip Pittman, R-Daphne, is to collect at least some of the estimated $200 million in sales taxes that currently are not being collected annually in the state by certain large, online retail merchants without stores in Alabama. It is unknown if a voluntary program would result in any tax collection.
Federal legislation allowing states to require remote retailers to collect and remit sales taxes has stalled, and many states have reverted to enacting “Amazon bills” in an effort to get non-nexus retailers to compete more evenly with local, brick-and-mortar retailers, who must collect taxes.
The House Ways and Means General Fund Committee will consider the House companion, HB660 by Rep. Rod Scott, D-Fairfield, at its Wednesday meeting.
Governor to Decide Extension
of Jefferson County Sales Tax
HB573 by Rep. Oliver Robinson, D-Birmingham, which reallocates proceeds from a 1-cent county sales tax enacted for school construction, is on its way to the governor. The bill allows the tax proceeds to be used to refinance the $560 million left in debt for the school construction plus go to 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. A Senate committee approved it Tuesday and the Senate gave its final OK Thursday.
House to Consider Ban on Tax Zappers
HB140 by Rep. Steve McMillan, R-Bay Minette, which makes possession or use an automated sales suppression device a Class C felony, is on the Alabama House’s agenda for consideration next week. The devices, also known as phantom ware or zappers, are used to delete records of sales transactions from cash register records, so that sales taxes are under-reported to the state, county and municipal tax collecting authorities. Individual violators also would be subject to fines up to $100,000, while corporate violators could be fined up to $500,000. Twenty states have restricted the sale or possession of automated sales suppression devices and more, like Alabama, are considering similar legislation.
Next Week, Senate Panel to Consider
Factor Presence Nexus Standard
At its Tuesday meeting, the Senate Finance and Taxation General Fund Committee will consider SB497 by Sen. Greg Albritton, R-Bay Minette, which would establish a factor presence nexus standard for business activity for income tax purposes in Alabama. The bill would make Alabama’s standard for establishing substantial nexus different than any other Southern state and the majority of the other U.S. states. The House companion, HB466 by Rep. Rod Scott, D-Fairfield, has not had a committee hearing. Similar legislation by Scott died last year in a House committee.
FOOD
Bill to Finance Grocery Stores
in Food Deserts Headed to Governor
A funding mechanism to attract grocery stores to low and moderate income areas is on its way to the governor. The goal of SB260 by Sen. Greg Reed, R-Jasper, (HB283 by James Buskey, R-Mobile) is to increase the availability of fresh and nutritious food in what is known as food deserts. The House approved the bill Tuesday and the Senate concurred with the House changes Thursday.
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 food deserts.
FUEL REWARDS
Senate Sends Revisions to Motor Fuel
Marketing Act to Governor
A bill to allow retailers that sell fuel plus other goods to discount gasoline below the market price as long as the retail price of the fuel doesn’t dip below the actual cost of the fuel received final passage this week.
HB411 by Rep. Mac McCutcheon, R-Huntsville (SB434 by Bill Holtzclaw, R-Madison) simplifies and “clears up gray areas” in the Motor Fuel Marketing Act law, which allows for fuel reward programs, McCutcheon said.
The bill changes the fuel cost definition from whichever is lower, the invoice cost or the lowest replacement cost, to the lowest of the “most recent invoice” or the “weighted-average cost,” which McCutcheon referred to as the “cost of the fuel in the tank at the time” the discount is offered.
POLICE JURISDICTIONS
Senate Agrees to Limit Frequency and Require Notice
of Police Jurisdiction Changes; Bill Returns to House
Legislation requiring municipalities to give residents and businesses fair notice of changes in police jurisdictions awaits concurrence by the House. The Senate on Tuesday approved HB377 by Rep. Ron Johnson, R-Sylacauga, (SB325 by Paul Sanford, R-Huntsville) to allow a municipality to change its police jurisdiction only on Jan. 1 of each year. The bill also requires municipalities to notify residents and businesses 30 days BEFORE enforcing certain ordinances, collecting license fees and levying and collecting taxes within a police jurisdiction.
WORKPLACE ISSUES
Senate Gets Another Substitute of Gun Legislation
Thursday, the Senate Governmental Affairs Committee approved yet another substitute of legislation rewriting portions of Alabama’s gun law. HB47 by Rep. Chris England, D-Tuscaloosa, deals with firearms possession in secure facilities, record keeping, a minor’s possession and inheritance of pistols and carrying a loaded firearm when drunk among other provisions.
The bill specifies that someone in lawful possession of a firearm can have the weapon and ammunition locked in a compartment of their private vehicle parked at a secure facility, which includes parking lots protected by guards and inside a fence where weapons are prohibited inside the building.
It also includes parameters for minors possessing pistols and the elimination of much of the record keeping for pistols. Gun dealers, law enforcement and the secretary of state would have to destroy all records of pistol, revolver or silencer sales 180 days after the bill becomes law. Supporters said the legislation removes the requirement for duplicate registration records. The bill now goes to the full Senate for consideration.
Senate Approves Carrying
Unpermitted Guns in Cars, Homes
People could carry loaded handguns without a pistol permit in their vehicles, homes and businesses or in or on another’s real property with their permission under SB14 by Sen. Gerald Allen, R-Tuscaloosa, which the Senate approved 24-14 Thursday.
An employer can still prohibit an employee from possessing a firearm inside the place of business and/or anywhere when the employee is engaged in the employer’s business and business owners with certain security measures can still prohibit anyone from entering their business with a firearm.
Senate Panel to Consider Reducing UC Benefits
Only for Employer-Financed Pensioners
The Senate Governmental Affairs Committee next week will consider HB506 by Rep. Napoleon Bracy, D-Prichard, which would reduce unemployment benefits for those receiving a pension or retirement benefits only if those benefits were 100 percent employer financed.
HEALTH
House Approves Medical Record Request Bill
Tuesday, the Alabama House unanimously approved 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 hospital records.
Bill Proposes Regulation
of Pharmacy Benefit Management
Sen. Del Marsh, R-Anniston, this week introduced SB483, which would bring pharmacy benefit managers under the Alabama Insurance Department, allow the department to develop rules for the regulation of PBMs and change pharmacy audit procedures. The bill bans pharmacy benefit managers from mandating a specific pharmacy be used, specifically prohibiting mandated use of a particular community or mail-order pharmacy. The bill has been assigned to the Senate Banking and Insurance Committee.
ALCOHOL
Study Commission in Place; Mission Set
Sen. Paul Sanford, R-Huntsville, and Rep. Alan Harper, R-Aliceville, will lead the newly appointed nine-member Alabama Alcohol Beverage Study Commission, which consists of eight legislators and one representative of the state’s Alcoholic Beverage Control Board. In a memorandum sent to the commission, the co-chairmen said the group will focus on the state’s three-tier system of regulation and licensing. Under that system, makers of alcohol products can only sell to distributors who sell to retailers. The memo says the commission’s work is necessary to examine the potential for economic development and jobs relative to new alcohol products. The group will collect information through public hearings and visits to other states before making recommendations by the end of the year on how to make Alabama’s alcoholic beverage laws more competitive.
Senate OKs Liquor/Wine Tasting Bill
The Senate on Tuesday approved SB247, which would allow licensed liquor manufacturers or representatives to conduct liquor and wine tastings, at no charge to consumers, in stores with off-premise-only liquor licenses and state liquor stores. The bill now goes to the House Economic Development and Tourism Committee, where its companion, HB294, still awaits action.
Hoover/Vestavia Hills Entertainment
District Bill on Governor’s Desk
The Senate gave final approval Thursday to HB446, which would allow the Hoover and Vestavia Hills city councils to designate up to three entertainment districts per city. Patrons of licensed establishments may carry open containers of alcoholic beverages within the boundaries of an entertainment district. The bill now goes to the governor.
House OKs Chilton County 2016 Referendum; Panel
Votes to Lengthen Time Between Wet/Dry Referendums
Tuesday, the Alabama House approved HB647, which authorizes Chilton County to hold a referendum on whether to allow alcohol sales every day of the week except Sunday. If the bill becomes law, the referendum would be on the ballot in the November 2016 General Election. It next awaits action by the Senate Local Legislation Committee
Meanwhile, the House County and Municipal Government Committee this week amended and approved HB667, which would lengthen the time between wet/dry referendums from 720 days to 1,440 days.
Marshall County Draft Beer,
Sunday Sales Bill Now in Play
Rep. Will Ainsworth, R-Guntersville, this week introduced legislation that would allow each city council in Marshall County to authorize six-day-a-week draft beer sales and to set referendums to ask voters if they favor Sunday alcohol sales. HB692 is assigned to the House Local Legislation Committee.
NEXT LEGISLATIVE DAY
The Alabama House will convene at 1 p.m. Tuesday, May 26, for the 25th legislative day of the Alabama Legislature’s 2015 regular session. The Alabama Senate will convene at 2 p.m.
FEDERAL
Bill Means Fewer Banks Will Limit Debit Fees
The U.S. Senate Banking Committee on Thursday adopted financial regulation legislation by Sen. Richard Shelby, R-Tuscaloosa. The measure is the largest effort at altering rules for the financial sector since the 2010 Dodd-Frank law.
Currently, only banks with $10 billion or more in assets have to abide by the debit swipe fee cap of 24 cents. A provision in this bill would annually adjust the asset threshold based on the gross domestic product (GDP), which likely will mean even fewer banks have to acknowledge the cap.
Please share with Shelby any concerns you have about altering the bank threshold for abiding by the current limits for debit card fees.
