Friday, April 8, 2016
Legislature Overrides Governor’s
General Fund Veto; Medicaid Weighs Cuts
A $1.85 billion general operating budget for the 2017 fiscal year is now law without the governor’s signature and without $85 million of the money Alabama’s Medicaid Agency says it needs to operate.
Act No. 2016-116 became law at 6:18 p.m. Tuesday after both chambers of the Alabama Legislature overrode the governor’s veto of the General Fund budget. The vote was 71-24 in the House and 22-11 in the Senate. The governor, who earlier had said he would call the Legislature back into special session to adequately fund Medicaid, backed off that statement Wednesday, saying he is weighing cuts in order to “live within our means.” Meanwhile, the House and Senate budget committees plan to meet jointly next week to study Medicaid costs.
In jeopardy are the state’s 11 regional care organizations, which were intended to shift the Medicaid delivery system from a fee-for-service model to one that allocates money on a per-person basis tied to health outcomes. The new delivery system was to be operational by Oct. 1, the same day the “inadequate” budget becomes effective. If the budget shortfall blocks the RCO system, the state will lose $328 million in federal money to jumpstart the RCOs, plus $420 million more over five years the state could have received if it met certain health-related goals.
In a Wednesday news conference, Medicaid Commissioner Stephanie Azar provided a list of potential cuts the governor could consider. She also said Medicaid could go to a pharmacy preferred provider plan, or single prescription provider, which would save an estimated $19 million to $30 million in state dollars. The possible program cuts and their estimated value are:
- Prescription drug coverage for adults: $50 million to $60 million
- Reimbursement rates for providers: Zero to $50 million
- Health Home and Physician case management fee: $16.6 million
- Primary care bump (pays doctors at Medicare levels): $14.7 million
- Outpatient dialysis: $3.7 million
- Administrative costs: $3.5 million
- Program of All Inclusive Care for the Elderly (PACE): $2 million
- Prosthetics and orthotics; $500,000
- Eyeglasses for adults: $300,000
Alabama Medicaid consumes about 38 percent of the General Fund budget to provide health coverage for more than 1 million Alabama children, disabled and elderly. Bentley said the agency “underpins our entire healthcare system.”
>> Governor’s Wednesday news conference
TAX ISSUES
Revision of Remote Sellers’
Voluntary Collection of Sales Taxes Now Law
Monday, the governor signed into law a revision and expansion of the 2015 Simplified Seller Use Tax Remittance Act. The 2015 law allowed remote sellers without a physical presence in Alabama to collect a flat 8-percent sales tax from Alabama residents. Act No. 2016-10 by Sen. Trip Pittman, R-Daphne, which went into effect immediately, allows eligible remote sellers under certain circumstances to participate in the state’s voluntary sales tax collection program, even if the seller later establishes a physical presence in Alabama.
Pittman said the aim is to get more remote retailers “to voluntarily remit revenue.” Those sellers can “locate a facility in our state as long as they don’t conduct retail sales” from that property, the sponsor said. The sellers also cannot sell to Alabamians through an Alabama affiliate, and they must have been in the voluntary program for six months or more before opening a facility in Alabama.
The revision allows 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 have been in the voluntary program at least six months before the federal law becomes effective.
House OKs Exempting Prescription Drugs
from Gross Sales for Business Licenses
Pharmacies would be able to remove prescription drug sales from their gross receipts when calculating the cost of their business license, under a bill the Alabama House approved on a 77-5 vote Tuesday. HB58 by Rep. Ron Johnson, R-Sylacauga, now goes to the Senate Finance and Taxation General Fund Committee for consideration. The Senate Fiscal Responsibility and Economic Development Committee has already approved the Senate companion, SB329 by Sen. Billy Beasley, D-Clayton. It awaits consideration by the full Senate.
House to Take Up Bill Exempting Video Programming
Services From Rental, Sales and Use Taxes
The third bill on the House’s proposed special order calendar for Tuesday is HB349 by Rep. Ed Henry, R-Hartselle, which would exempt video programming services (such as streaming) — including subscription services, video-on-demand television services and broadcasting services — from rental, sales and use taxes. The bill does not exempt software that is purchased and downloaded onto a computer for permanent use. The Senate companion, SB345, awaits action by the Senate Fiscal Responsibility and Economic Development Committee.
Bill Would Suspend Tax Credits
in Proration or Level Funding Years
Thursday, Rep. Phil Williams, R-Huntsville, introduced legislation that would suspend tax credits in years when the governor declares proration in the education or general operating budgets as well as in years when the budgets are level funded. HB505 has been assigned to the House Ways and Means Education Committee.
ALCOHOL
Legislature OKs Commission-Recommended Bills
to Allow Limited Retail Sales for Alcohol Makers
The Alabama Legislature this week approved the final two bills in a three-bill package recommended by the Alabama Alcoholic Beverage Study Commission. The package allows greater retail opportunities for distilleries, wineries and breweries/brewpubs.
- SPIRITS: SB132 by Sen. Bobby Singleton, D-Greensboro, allows 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. Singleton said his legislation will help Alabama distilleries market their product. Tuesday, the House substituted the Senate bill for the House companion, HB46 by Rep. Alan Boothe, R-Troy, and approved Singleton’s bill 84-11. If the governor signs the legislation into law, it will take effect July 1.
- WINE: SB166 by Sen. Linda Coleman-Madison, D-Birmingham, allows a licensed winery that produces less than 50,000 gallons of table wine annually to obtain a permit to operate one additional tasting room outside its on-site tasting room from which it can sell one case of wine, per customer, per day. It also allows an association representing the majority of wineries and grape growers in the state to operate one off-site tasting room that could be used for retail sales of table wines produced by the state’s wine manufacturers. Producers can deliver up to two cases of table wine directly to a charitable event. Tuesday, the House substituted the Senate bill for the House companion, HB83 by Rep. David Faulkner, R-Birmingham, and Rep. Alan Harper, R-Aliceville. Like the distillery bill, the wine legislation will be effective July 1, if the governor signs it into law.
- BEER: Starting June 1, Alabama brewers and brewpubs producing less than 60,000 barrels of beer annually will be able to sell up to 288 ounces of beer per day to a customer for off-premise consumption. Brewers also will be able to directly deliver up to two kegs per event to charity functions. The governor signed Act No. 2016-97 by Rep. Anthony Daniels, D-Huntsville, into law March 24.
Liquor and Wine Tastings
Possible at Retail Starting Oct. 1
Monday, the governor signed into law, Act No. 2016-111 by Sen. Billy Beasley, D-Clayton, which allows licensed distilleries or wineries to conduct liquor and wine tastings, at no charge to consumers, in retail stores licensed for off-premise consumption as well as state liquor stores. Under the new law, one-quarter ounce of liquor with no more than two products or one ounce of wine with no more than four products can be served at any tasting. The law allows only one tasting within a 24-hour period. All tastings must begin before 6 p.m. The law also specifies 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. Rep. Becky Nordgren, R-Gadsden, was the House sponsor (HB148).
Panel OKs Bill Allowing Family Members to Operate
Separate Businesses within the Alcohol Supply Chain
A bill approved Wednesday by the Senate Fiscal Responsibility and Economic Development Committee would allow family members of alcohol retailers, wholesalers, distributors or manufacturers to be licensed in another aspect of the alcohol supply chain as long as they are not an officer, employee or stockholder of the original business.
By a vote of 7-3 with three abstentions, the committee approved SB343 by Sen. Bill Holtzclaw, R-Madison, despite objections from the Alabama Brewers Guild, the Alabama Beer Association and the Alabama Citizens Action Program (ALCAP). Sen. Paul Sanford, R-Huntsville, who serves as co-chairman of the Alabama Alcoholic Beverage Study Commission, was among those who abstained from the vote. He said he did so to honor a commitment not to address any other statewide alcohol bills than the three-bill package related to limited retail sales by alcohol manufacturers.
Holtzclaw said he would consider a floor amendment that would restrict family members who live in the same household as the original business licensee from being licensed for another business in the alcohol supply chain. An Alabama Beverage Control Board representative said that is the board’s current policy.
The bill now goes to the full Senate.
Rainbow City, Hollywood and
Cedar Bluff Sunday Sales Get OK
Three local Sunday sales bills saw legislative action this week:
- The Alabama House on Tuesday approved HB381 by Rep. Mack Butler, R-Rainbow City, which authorizes the Rainbow City Council to ask voters in that city if they would like to allow alcohol sales between 1 and 9:30 p.m. on Sundays. The bill now goes to the Senate Local Legislation Committee.
- The Alabama Senate on Thursday approved SB352 by Sen. Steve Livingston, R-Scottsboro, which would authorize the Hollywood Town Council through a vote of the council to allow Sunday alcohol sales in that Jackson County town. The bill now goes to the House Local Legislation Committee for consideration. The House companion, HB401 by Rep. Tommy Hanes, R-Bryant, awaits consideration by the Senate Local Legislation Committee.
- The House Local Legislation Committee on Thursday approved legislation to authorize the Cedar Bluff Town Council to ask voters if they would like the council to allow on-premise Sunday alcohol sales within that Cherokee County town. HB494 by Rep. Richard J. Lindsey, D-Centre, is now ready for consideration by the full House.
WORKPLACE ISSUES
Senates Votes to Allow Loaded Guns in Cars
On a vote of 27-7 Tuesday, the Alabama Senate approved SB14 by Sen. Gerald Allen, R-Tuscaloosa, which would allow gun owners to carry loaded pistols in their cars without a concealed pistol permit.
“Vehicles are an extension of a person’s home,” Allen said of his bill, which allows legal gun owners to have pistols without a concealed carry permit on their own property, vehicle, home or business or on the property or in the vehicle of another owner with their consent. 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. The state’s sheriffs oppose Allen’s bill.
The bill next goes to the House Public Safety and Homeland Security Committee.
Senate Judiciary Limits ‘Ban the Box’ Bill
to State Employment and Licenses
The Senate Judiciary Committee on Wednesday approved a substitute version of SB327 by Sen. Quinton Ross’ “ban-the-box” bill that only applies to state employment and licensing agencies. The Montgomery Democrat’s original bill would have also kept private employers from asking about a job applicants’ criminal background until after the applicant had received a conditional job offer. Under the revised bill, the only reason a prior conviction would automatically disqualify someone for state employment or from being considered for a state license would be if the conviction is directly related to the job being sought. The bill now goes to the full Senate for consideration.
LEGAL
Revision to Limited Partnership Law Heads to Senate
The Senate Judiciary Committee on Wednesday unanimously approved HB202 by Rep. Bill Poole, R-Tuscaloosa, which modifies the state’s Alabama Limited Partnership law to reflect current case law. The sponsor has said his bill also brings the state’s LP law in conformity with its LLC law. The 173-page bill was written by the Alabama Law Institute. Like the Senate companion — SB151 by Sen. Cam Ward, R-Alabaster — Poole’s House version awaits action by the full Senate.
NEXT LEGISLATIVE DAY
The Alabama House of Representatives will convene at 1 p.m. Tuesday, April 12, for the 21st legislative day of the Alabama Legislature’s 2016 regular session. The Alabama Senate convenes at 4 p.m.
FEDERAL
Legislation Gives Employers
Another Chance to Weigh in on Overtime Rule
As we reported in the March 18 Capitol Retail Report, the U.S. Department of Labor (DOL) has sent the proposed federal overtime rule to the Office of Management and Budget (OMB) for review – the last step taken before a rule is final.
As a result, federal legislation has been introduced to press pause on the rule’s progress.
H.R. 4773 by Rep. Tim Walberg, R-Mich., and S. 2707 by U.S. Sen. Tim Scott, R-S.C., the Protecting Workplace Advancement and Opportunity Act, would require the department to perform a detailed impact analysis prior to implementing changes to the white-collar exemptions under the Fair Labor Standard Act’s overtime pay requirements.
Currently, a person must satisfy three criteria to qualify as exempt from federal overtime pay requirements: first, they must be paid on a salaried basis; second, that salary must be more than $455/week ($23,660 annually); and third, their “primary duties” must be consistent with managerial, professional or administrative positions as defined by DOL.
The proposed rule adds some 5 million people nationally to those eligible for time-and-a-half pay for working more than 40 hours a week by increasing the minimum salary necessary for employees to qualify for an overtime exemption to $970 weekly, or $50,440 annually.
Monday, you should have received an email letting you know that you still have time to weigh in on the rule to OMB and Congress. The link below takes you to a single form that allows you to comment to Alabama’s senators, your representative and OMB Regulatory Affairs Administrator Howard Shelanski:
Express Your Concerns to Congress and OMB here
Or if you prefer, email or call Alabama’s senators and your representative today and ask them to:
Co-Sponsor S. 2707
U.S. Sen. Richard Shelby | (202) 224-5744
U.S. Sen. Jeff Sessions | (202) 224-4124
Co-Sponsor H.R. 4773
District 1 Bradley Byrne | 202-225-4931
District 2 Martha Roby | 202-225-2901
District 3 Mike Rogers | 202-225-3261
District 4 Robert Aderholt | 202-225-4876
District 5 Mo Brooks | 202-225-4801
District 6 Gary Palmer | 202-225-4921
District 7 Terri Sewell | 202-225-2665
(You will need your zip code+4
to contact members of Congress via email)
