Alabama Legislative Update: Republican Leadership Focuses on Priority Legislation

by Baker Donelson
Contact

The second week of the Alabama Legislature's Regular Session saw Republican leadership maintaining their momentum and passing priority legislation at a furious pace. 

Senate Passes Legislation Guaranteeing Automatic Repayment of Alabama Trust Fund

With a vote 25-7, Alabama senators passed legislation that will mandate the automatic structured repayment of $437 million borrowed from the Alabama Trust Fund (ATF) in September 2012. An amendment added in the Senate to HB 94 by Senator Bryan Taylor provides for an automatic annual appropriation to the ATF ensuring that each transfer from the ATF is repaid within 10 years or less. With the Taylor amendment, the bill does not require any further action by this legislature or future legislatures to ensure repayment. The bill calls for the $437.4 million to be repaid no later than Sept. 30, 2026. HB 94 now goes back to the House of Representatives (House) for concurrence with the Senate version. Full passage is expected within the third week of session.

School Flexibility Bill Debate Takes Center Stage

After four hours of debate, the House voted 65-37 to approve a school flexibility bill that would allow school systems to seek waivers from state education policies and laws. Under the proposal, school systems would submit proposals or "flexibility plans" to the state. Waivers would have to be approved by both the local and state board of education and the state superintendent of education and public hearings must be held for each plan.

The bill says schools cannot force employees and new hires to "involuntarily relinquish" the rights and privileges of tenure or non-probationary status. However, employees could choose to waive those protections under the bill. Representative Chad Fincher, who sponsored the legislation, said an employee might, for example, give up tenure in exchange for higher pay.

The bill prohibits school systems from seeking waivers on ethics laws, requirements on academic reporting, requirements of the State Minimum Salary Schedule and other mandatory laws. School systems are also directed under the bill to assure that proposals maintain a "commitment to state standards, assessments, and academic rigor." The bill would allow school systems to seek a waiver from state bid law.

The bill now moves to the Senate, where a different version of a similar bill is making progress. The day before the House passed its version, the Senate Education Committee approved its own school flexibility bill, by a vote of 9-0, after adding amendments sought by the Alabama Education Association (AEA) to protect the current tenure process and to specify that the legislation cannot be used to create charter schools. The amendments passed 5-4. The Governor has indicated his full support for the legislature's school flexibility efforts.

Red Tape Reduction Act Unanimously Passes House

The House voted 92-0 for the "Red Tape Reduction Act," which would give businesses an opportunity to challenge a regulation which would adversely affect their business. The state agency would then have to prepare an economic analysis of how much the new regulation would cost the Alabama economy and how it would positively affect Alabama public as a whole. A legislative council would hear both sides and then would decide whether or not that state regulation would be implemented or not. The Red Tape Reduction Act would also publish new regulations on a web site in real time instead of the current process of announcements in the Alabama Administrative Monthly. The Act will apply to future regulations and does not retroactively apply to administrative law already in place. The bill now moves to the Senate.

House Passes Bill to Improve Career Technical Programs

The House passed the "21st Century Workforce Act" by a vote of 93-1. This legislation approves the sale of $50 million in bonds to invest in high school career technical programs. The funds will be used to help Alabama high schools upgrade career technical programs and prepare students for technical careers. The bill now goes to the Senate.

Senate Approves Move to Merge Agencies and Operations

The Senate passed legislation to merge state law enforcement programs into a new agency. The structure of state government traditionally stays the same from one administration to the next, but government consolidation is a priority of the Senate's Republican leadership. The Senate voted 31-0 for a bill, supported by Governor Robert Bentley that will merge 14 police-type groups into a new Alabama State Law Enforcement Agency. President Pro Tem Del Marsh, who sponsored the law enforcement legislation, said it would save $30 million annually by coordinating communications, accounting and other support services.

The Senate also passed, by the same margin, a bill that would consolidate information technology operations of all state agencies under an appointed board, the Alabama Technology Authority. The Authority could shift responsibilities from state employees to private companies who would compete for the work. A study done by Auburn University at Montgomery estimated state agencies spend $317 million annually on IT operations, and it forecast annual savings at $32 million to $64 million, based on experiences in similar states. A companion bill setting up a secretary of information technology in the Governor's cabinet was approved 32-0. Legislators expect the Governor's Homeland Security Director, former state Representative Spencer Collier, to be appointed.  All three bills now go to the House for consideration.

Senate Passes Economic Development Legislation

Senators passed SB 96, which would authorize a municipality to designate certain real property as a Major 21st Century Manufacturing Zone. This bill would provide requirements to qualify as a zone and provide that projects within the zone could be financed with ad valorem tax increments.

ADEM Budget and Proposed Permit Fee Increase

Governor Bentley's proposed 2013-2014 general fund budget decreases the Alabama Department of Environmental Management (ADEM) appropriation from $3.2 million in FY 2013 to $558,048 in FY 2014. ADEM's statutory authority only allows the agency to charge fees to cover the cost of issuing permits; however, there are other ADEM programs funded by general fund appropriations. On February 1, 2013, ADEM issued a notice for a proposed permit fee increase of 50 percent for the purpose of offsetting general fund budget shortfalls but many questions remain on what the impact of the decrease in state general fund appropriations will have on business and industry, especially in light of inadequate federal EPA funding for ADEM.

Proposal to Reduce the Corporate Income Tax Rate Considered

Senator Paul Sanford addressed the Senate Finance and Taxation-Education Committee this week to propose a constitutional amendment, which would reduce the state's corporate income tax rate from 6.5 percent to 5.0 percent. That rate reduction will reduce income tax receipts by an estimated $97.5 million annually.

An AEA spokesman argued that that Alabama is one of only a few states that offer the federal income tax deduction and that deduction makes Alabama's effective tax rate range between 3 percent to 4 percent. The Committee chair, Senator Trip Pittman, urged the sponsor and AEA to study and report the consequences of reducing or eliminating the federal income tax deduction to offset the revenue lost from the proposed rate reduction.

Bill to Carry Forward Capital Loss Passes Committee

The Finance & Taxation-Education Committee favorably reported SB 156, to provide that resident taxpayers who incur a capital loss may deduct up to $3,000 per year and carry the balance forward until the capital loss is fully exhausted. Federal income taxes are treated this way, but in Alabama, a resident who incurs a capital loss may deduct the loss only in the year in which the loss is incurred. The bill now goes to the full Senate for consideration.

Throughout this legislative session, the Alabama State Public Policy Team will monitor all proposed and pending legislation and maintain a presence in the State House. Should you have any questions or concerns about how the Legislature's activities could affect your business, please contact Dennis Nabors in our Montgomery office or Denise Killebrew  in our Birmingham office.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Donelson | Attorney Advertising

Written by:

Baker Donelson
Contact
more
less

Baker Donelson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.