Friday, Feb. 26, 2016

Law Preempts Mandated
Local Minimum Wages and Benefits

Gov. Robert Bentley on Thursday signed into law legislation that voids Birmingham’s $10.10 minimum wage and preempts other Alabama localities from creating a local minimum wage and mandating other benefits. Alabama is the eighth state with a minimum wage / paid leave preemption law.

HB174Signing

Local governments can no longer “increase labor costs with a day or three weeks’ notice,” said Rep. David Faulkner, one of the bills’ 53 House sponsors. He was referring to the Birmingham City Council’s attempt to create a minimum wage for that city, first with a three-week notice, then with less than a 24-hour warning. A $10.10 mimimum wage for that city was approved Tuesday, with Wednesday as the specified effective date. It technically could not have been enforced until its scheduled Sunday publishing date. The governor’s signature on HB174 makes that local ordinance void.

Among the 30 cities and counties nationwide that have established their own minimum wages, mostly in California, fewer than 10 have a minimum wage higher than $10.10.

This is the first time in Alabama a municipality or county (tried to raise) its own minimum wage,” said Sen. J.T. “Jabo” Waggoner, R-Vestavia Hills, who handled the bill in the Senate. The Senate voted 23-11 Thursday for the legislation. Besides the eight Senate Democrats, Republican Sens. Paul Bussman of Cullman and Bill Holtzclaw of Madison, along with independent Sen. Harri Anne Smith of Slocomb voted against the measure. The House vote was 71-31.

The Alabama Retail Association worked tirelessly for the measure’s passage, and the association and its more than 4,000 member companies thank Faulkner, Waggoner, Rep. Arnold Mooney, R-Birmingham, and all of the lawmakers who voted for this legislation. Thanks for seeing it through the process before Alabama’s more than 400 cities and 67 counties could create a hodgepodge of local labor laws.

The Alabama Uniform Minimum Wage and Right-to-Work Act prohibits local governments from requiring minimum wages, paid or unpaid leave, vacation time or work schedules. It also prohibits local governments from requiring employers to grant organizing concessions to unions in exchange for assistance with a development project, a practice known as labor peace agreements.

The new law requires a uniform minimum wage, based on state or federal law. It does not create or set a state minimum wage. Alabama is one of 21 states that use $7.25, the federal minimum, as the lowest possible wage employers can pay employees.

Three state minimum wage bills have been introduced so far in the regular session: HB70, HB71 and SB185. None are set for committee consideration at this time.

The debate on the value of labor, we are going to have to continue to discuss,” Sen. Trip Pittman, R-Daphne, said.

Alabama Retail kept members updated about the implications of this issue as it developed. Thank you for contacting your legislators and letting them know your concerns. If you have any questions, please contact ARA Vice President Alison Hosp.


BUDGET

Senate Approves 4 Percent Increase
in General Fund Budget; Level Funds Medicaid

On a vote of 24-10 Thursday, the Alabama Senate passed a $1.8 billion General Fund budget that level funds Medicaid.

Medicaid Commissioner Stephanie Azar told lawmakers that level funding would stall the plan to shift Medicaid services to regional, managed care organizations, which were just recently approved by the Centers for Medicare and Medicaid Services, but have been in the making for several years. The governor’s budget provided an $100 million increase for Medicaid.

Sen. Trip Pittman, R-Daphne, the Senate Finance and Taxation General Fund Committee’s chairman and sponsor of SB125, referred to the Senate-passed budget as a vehicle to begin a debate about how to pay for Medicaid while also funding other critical services.

As is, the budget boosts spending from the General Fund by $65 million. Gov. Robert Bentley had proposed moving $181 million in recurring tax revenues from the Education Trust Fund to the General Fund. That transfer is not included in what the Senate passed Thursday. The governor said he would veto the Senate’s version of the budget.


TAX ISSUES

Companion Bills Would Revise Remote Sellers’
Voluntary Collection of Sales Taxes

Thursday, the Alabama House and Senate unanimously approved legislation that would allow eligible remote sellers to continue to participate in a voluntary program for collecting Alabama sales taxes, under certain circumstances, even if the seller later establishes a physical presence in our state. The bills now move to the other chambers.

HB116 by Rep. Rod Scott, D-Fairfield, and SB233 by Sen. Trip Pittman, R-Daphne, revise the Simplified Seller Use Tax Remittance Act, which the Legislature approved in its last regular session. The 2015 law allows remote sellers without a physical presence in Alabama to collect a flat 8-percent sales tax from Alabama residents who buy their merchandise. In the first six months of the law, 29 companies voluntarily remitted the tax, according to the Alabama Department of Revenue.

Under the legislation, remote sellers could continue to participate in the voluntary program even after establishing a physical presence in the state, as long as they don’t sell to Alabama residents from their Alabama location or through an affiliate and have been in the voluntary program for six months or more. The revision also would allow those in the voluntary program to continue to collect the flat tax rate, even if federal efairness legislation passes as long as the remote retailers had been in the voluntary program six months before the federal law passed.

The goal is to entice more companies” to remit voluntarily, Pittman said.


Senate Panel Amends Expansion
of Small Business Tax Breaks for Creating Jobs

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday amended a small business tax credit for creating jobs to include agribusinesses and banks.

HB36 by Rep. Kyle South, R-Fayette, provides a one-time, $1,500 income tax credit to Alabama businesses with 75 or fewer employees, for each qualified, new, full-time, Alabama resident employee hired. It allows for an additional $1,000 income tax credit (for a total of $2,500) if the new employee hired is a recently returned, unemployed veteran as part of the Heroes for Hire Act passed in 2012. To qualify for the credit, businesses must retain the new employee for a full year, and the employee must make $40,000 or more annually. In addition, businesses must show a net employee growth each year to qualify for the credit.

If the full Senate approves the amended bill, it will have to go back to the House for concurrence.


House Panel OKs Exempting
Prescription Drug Costs from Business License Taxes

The House Ways and Means General Fund Committee gave a favorable report Wednesday to HB58 by Rep. Ron Johnson, R-Sylacauga, which would exempt prescription drug costs from business license taxes based on gross receipts. The bill now goes to the full House for consideration.


Knight Introduces Two Bills to End Food Sales Tax

Rep. John F. Knight Jr., D-Montgomery, has introduced two pieces of legislation aimed at removing the state portion of sales and use taxes from food, as defined by the Federal Supplemental Nutrition Assistance Program (SNAP).

HB307, a constitutional amendment, would remove the state sales and use taxes from food and over-the-counter drugs, while disallowing the deduction of federal income taxes by individual tax payers subject to state income tax.

HB306 would remove the state portion of the tax from food and does not contain any revenue-raising proposals.

Both pieces of legislation instruct local governments to continue to collect their portion of sales and use taxes at the current rate. The bills have been referred to the House Committee on Ways and Means Education.


DATA SECURITY

Senate Committee OKs Data Breach Notification Bill

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday unanimously approved a data breach notification bill, SB238 by Sen. Arthur Orr, R-Decatur, which if enacted would make Alabama the 48th state to provide consumers with timely notification of data breaches.

The committee discussed but did not not vote on an amendment that would have deleted any reference to the Deceptive Trade Practices Act.

Under the bill sent to the full Senate, failure to comply with the act would be considered a deceptive trade practice and not a criminal offense. The legislation also does not establish a new private cause of action for a civil lawsuit. Violators would face penalties of up to $50,000 for each breach, not each individual affected. Assistant Attorney General Noel Barnes told the committee the amendment would “seriously weaken the bill.” However, the sponsor said it may be possible to insert the portions of the Deceptive Trade Practices Act that the attorney general needs as a litigaton framework, rather than applying the full act to a violation. Orr said he would continue to work on a possible amendment to add when the bill reaches the Senate floor. Alabama Retail will continue to work with the sponsor and the attorney general’s office to make sure retailers’ interests are protected.

Orr’s bill, the Alabama Information Protection Act of 2016, requires breached entities to notify Alabama’s attorney general, Alabama residents whose information has been compromised and credit-reporting agencies of breaches involving more than 1,000 that could result in financial harm to the individuals. The notifications are to occur within 60 days of the determination of a breach with a possible 15-day extension if requested before the 60 days end. Law enforcement agencies also can delay a notification.

Compromised information that would qualify as a notifiable breach would be the individual’s first name or initial and last name in combination with any one of these data elements:

  • A Social Security number.
  • Driver’s license or state-issued identification card number.
  • A financial account, credit or debit card number along with a required security code, PIN, access code or password necessary to access the account.

Rep. Connie C. Rowe, R-Jasper, this week introduced the House companion, HB291. It has been assigned to the House Military and Veterans Affairs Committee.


WORKERS’ COMPENSATION

Panel OKs Revisions to Workers’ Comp
Disability and Medical Benefits

On a vote of 12-2 after a Wednesday public hearing, the Senate Fiscal Responsibility and Economic Development Committee approved a bill revising workers’ compensation benefits. SB122 by Sen. Arthur Orr, R-Decatur, would:

  • end an employer’s liability for permanent total disability benefits after the disabled employee turns 65 or 500 weeks after the injury, whichever is longer; and
  • end the obligation of an employer to pay medical benefits if an employee does not receive medical attention for a claimed work injury for four years. After two years, the employer would be liable for medical treatment only with clear and convincing proof that the treatment is related to a workers’ compensation injury.

The bill now goes to the full Senate. The committee’s chairman, Sen. Phil Williams, R-Rainbow City, suggested the sponsor seek mediation for the legislation after several senators said they voted for it with reservations. Orr agreed the state needs a “global workers’ comp overhaul.” The Alabama Legislature failed to reach a consensus on comprehensive workers’ compensation reform legislation proposed in 2013.


ELECTIONS

Primary is Tuesday

Alabama voters go to the polls Tuesday to vote in the Super Tuesday presidential primary and to elect other statewide and local offices. The Alabama Retail Association has made endorsements in the U.S. Senate race, the four contested congressional races and for the Place 3 Supreme Court seat. (See photos at right). You will receive a voter guide email Monday reminding you of the recommended choices in your district.


LEGAL

Limited Partnership Reform Headed to the House

The House Judiciary Committee on Wednesday approved HB202 by Rep. Bill Poole, R-Tuscaloosa, which would revise the state’s Alabama Limited Partnership Law. The bill now goes to the full House for consideration.


Bill Sets Time Limit for Bringing
Civil Action To Recover Credit Card Accounts

SB 288 by Sen. Bobby Singleton, D-Greensboro, clarifies that any civil action to recover money on a credit card or revolving credit account must begin within three years of the date of the last item on the account or the date the account was due. The bill awaits action by the Senate Judiciary Committee.


WORKPLACE ISSUES

Panel Passes Bill to Allow Loaded Guns in Cars

On a vote of 6-3, the Senate Judiciary Committee on Wednesday approved a substitute version of SB14 by Sen. Gerald Allen, R-Tuscaloosa, which among other provisions, would allow owners to carry their pistols without a license on their own property, vehicle, home or business or on the property or in the vehicle of another owner with their consent. Allen said the intent is to allow people to protect themselves in their cars, the same as they do in their homes. Under current law, a pistol must be unloaded and locked in a compartment out of reach of the driver and passengers unless the owner has a concealed carry permit from their county sheriff.


Gender Wage Bill Introduced

This week, Rep. Adline Clarke, D-Mobile, introduced HB 295, requiring employers to demonstrate that a wage differential between opposite genders is based upon one or more specified factors, while prohibiting employers from limiting employees’ discussion of wages. The legislation has been sent to the House Commerce and Small Business Committee.


HEALTH

Panel Votes to Outlaw Sale
of Adjustable Focus Eyewear

The Senate Health and Human Services Committee voted unanimously Wednesday for legislation that would halt the sale of adjustable focus eyewear in Alabama. SB245 by Sen. Jim McClendon, R-Springville, sets lens requirements for over-the-counter eyewear that would preclude the sale of glasses with an adjustable magnification, a technology that is being marketed worldwide by Adlens. It defines over-the-counter spectacles as “nonprescription, ready-to-wear magnifying spectacles or glasses that contain spherical convex lenses, uniform in each meridian, which are encased in eyeglass frames and intended to ameliorate the symptoms of presbyopia. The lenses in over-the-counter spectacles may not have a minus power (-) and may not exceed plus three diopters (+3.00).”

The bill makes failure to conform to that definition a violation enforceable by the Alabama Board of Optometry, a district attorney or the attorney general. It now goes to the full Senate.

Rep. April Weaver, R-Brierfield, this week introduced the House companion, HB336. It has been refered to the House Health Committee.


Bill Would Grant Anti-Trust Liability
Immunity to the Pharmacy Board

Rep. Ron Johnson, R-Sylacauga, this week introduced legislation that would give the Alabama Board of Pharmacy and its members immunity from liability under state and federal anti-trust laws for adopting pharmarcy rules that prioritize “patient safety and wellness but may be anti-competitive.” HB320 has been assigned to the House Health Committee.

OTHER PHARMACY INTRODUCTIONS

  • Legislation requiring the State Board of Health to classify ephedrine, pseudoephedrine and phenylpropanolamine as controlled substances has been introduced in the Alabama House. HB298 by Rep. Ed Henry, R-Hartselle, has been sent to the House Judiciary Committee.
  • The Alabama Pharmacy Board would “adopt rules concerning the training of pharmacy technicians” under HB304 by Rep. Elaine Beech, D-Chatom, and SB299 by Sen. Billy Beasley, D-Clayton. The House bill has been referred to the Boards, Agencies and Commissions Committee, while Senate bill awaits action by the Health and Human Services Committee.

ALCOHOL

Senate Panel OKs Three Bills Recommended
by the Alcohol Study Commission

The Senate Fiscal Responsibility and Economic Development Committee on Wednesday approved bills recommended by the Alabama Alcoholic Beverage Study Commission that would allow greater retail opportunities for breweries/brewpubs, distilleries and wineries:

  • SB211 by Sen. Bill Holtzclaw, R-Madison, would allow small brewers and brewpubs producing less than 60,000 barrels of beer annually to sell up to 288 ounces of beer per day to a customer for off-premise consumption. The bill also allows brewers to directly deliver up to two kegs per event to charity functions. The House companion HB176 by Rep. Anthony Daniels, D-Huntsville, awaits action by the the full House.
  • SB132 by Sen. Bobby Singleton, D-Greensboro, which would allow an Alabama distillery to sell a standard-size bottle (up to 750 milliliters) per customer, per day from its premises for off-premise consumption only. The House companion, HB46 by Rep. Alan Boothe, R-Troy, is ready for House consideration.
  • SB166 by Sen. Linda Coleman-Madison, D-Birmingham, which would allow a licensed winery to obtain a permit to operate one additional tasting room outside its on-site tasting room.

Wednesday, the House Economic Development and Tourism Committee amended and approved what had been the House companion to SB166. HB83 by Rep. David Faulkner, R-Birmingham, and Rep. Alan Harper, R-Aliceville, now goes to the full House for consideration.

As amended, the bill would only apply to wineries that produce less than 50,000 gallons of table wine annually. The bill now also would allow an association representing the majority of wineries and grape growers in the state to operate one off-site tasting room that also could be used for retail sales of table wines produced by the state’s wine manufacturers. The bill also would permit a producer to deliver up to two cases of table wine directly to a charitable event as long any table wine remaining at the conclusion of the charitable event is returned to the manufacturer for disposal.


Liquor and Wine Tasting Bill
Headed to House for Final OK

The House Economic Development and Tourism Committee on Wednesday approved SB219 by Sen. Billy Beasley, D-Clayton, which would allow licensed distilleries or wineries to conduct liquor and wine tastings, at no charge to consumers, in retail and state liquor stores. It now goes to the House for final consideration. The House companion, HB148 by Rep. Becky Nordgren, R-Gadsden, also awaits consideration by the full House.

Under both billls, one-quarter ounce of liquor with no more than two products or one ounce of wine with no more than four products could be served at any tasting. The bills also specify that no more than 10 percent of state liquor stores can have tastings in 2016; no more than 20 percent in 2017 and no more than 28 percent in 2018 and beyond.


State Store Privitization, Other
Alcohol Bills Introduced This Week

Sen. Arthur Orr, R-Decatur, this week introduced SB292, which would phase out retail alcohol sales at the Alabama Alcoholic Beverage Control Board’s 176 state stores by Oct. 1, 2021. The Alcohol Beverage Reform Task Force, which this summer and fall studied the possibility of privatizing state liquor sales, has made no recommendations to the Legislature. Orr’s bill has been assigned to the Senate Fiscal Responsibility and Economic Development Committee.

HB274 by Rep. Ron Johnson, R-Sylacauga, would give the Kellyton Town Council authority to ask voters if they would like to allow alcohol sales after 1 p.m. on Sunday in that Coosa County town.

HB281 by Rep. Dimitri Polizos, R-Montgomery, would level an additional five percent sales tax on the retail and wholesale price of all spirituous or vinous liquors sold in Montgomery County with proceeds going to the district attorney’s office.


NEXT LEGISLATIVE DAY

The Alabama Senate and House of Representatives will convene at 2 p.m. Tuesday, March 1, for the 11th legislative day of the Alabama Legislature’s 2016 regular session.


To provide input about the above and other issues of importance to you, please contact the Alabama Retail Association governmental affairs team: Rick Brown and Alison Hosp.