After just two weeks, the Alabama Legislature has already used 20 percent of their allotted meeting time for the 2014 session. They have used three meeting days each of the past two weeks, with 24 possible meeting days remaining. The leadership’s goal is to conclude the session at the beginning of April. However, even in an election year, there is a great deal of work that must completed, including the difficult task of balancing both budgets.

Budgets

Both budgets, the Education Trust Fund (“ETF”) and General Fund (“GF”) have been introduced in the Senate and sent to their respective committees. No action was taken on either this week, although they are the subject of intense discussion.

A recently released report from the U.S. Department of Justice on conditions at Tutwiler Prison for Women drew attention to the needs of the Department of Corrections, and has led to calls by many for additional funding for prisons. However, with acting Medicaid Commissioner Williamson’s request for an additional $70MM in Medicaid funding, the perpetually challenged GF Budget remains the more difficult of the two budgets.

However, while in better shape, the ETF budget faces its own set of challenges. Demands for increases in pay for education employees are in many respects in conflict with the need to meet the rising healthcare costs associated with the Public Education Employees Health Insurance Program.

Although the budgets are certainly the top priority of the members, it is not expected that they will begin their movement towards adoption for at least the next two weeks.

House Caucus Agenda

As they have done in each of the previous three years of the quadrennium, the House of Representatives focused first on the bills on the Republican Caucus’ agenda. As they planned, all of the Caucus bills that originated in the House (as noted below, one originated in the Senate) have already received final passage by the House. The Healthcare Rights of Conscience Act, Rep. Nordgren (R –Gadsden), HB31: This bill, which would allow health care workers to refuse to perform or participate in a health care service that violates their conscience, is pending before the Senate Health Committee. It is included on the Committee’s agenda for the meeting on Wednesday, January 29 at 12:00 PM.

Alabama Taxpayer Audit Protection Act, Rep. W. Johnson (R-Ryland), HB42:
This bill has been assigned to the Senate Committee on Finance and Taxation, Education. It has not been scheduled for a hearing at this time. The bill would prohibit the State Department of Revenue from targeting organizations for audits based on their politics – a measure proposed in reaction to controversies involving the IRS and conservative-leaning groups.

Adoption Tax Credit Act, Rep. Lee (R-Dothan), HB48:
The bill to give residents who adopt an Alabama child a one-time, $1,000 tax credit has been assigned to the Senate Committee on Finance and Taxation, General Fund. It has not been scheduled for a hearing.

Statutory Immunity for Teachers and State Employees, Rep. M. Jones (R-Andalusia), HB64:
This bill codifies immunity for teachers and state employees while acting in their official capacity. It is pending before the Senate Judiciary Committee and is on the Committee’s agenda for Wednesday, January 29 at 1:00 PM.

Tax Elimination Act, Rep. Patterson (R-Meridianville), HB97:
This bill is pending before the Senate Committee on Finance and Taxation, General Fund. A hearing has not been set.

Taxpayers’ Bill of Rights, Rep. DeMarco (R-Homewood), HB105:
The Taxpayer Bill of Rights, which would create an independent administrative hearing process for tax appeals, has been favorably reported from the Senate Committee on Fiscal Responsibility and Accountability. This important, pro-business legislation could be passed by the Senate at any time, although because an amendment was added in the Senate Committee it would have to be sent back to the House for concurrence in order to reach the Governor.

Business Tax Streamlining Act, Rep. Wren (R-Montgomery), HB108:
This bill is pending in the Senate Committee on Job Creation and Economic Development. It would create a new online filing system for filing business personal property taxes, and allow certain businesses to file a short form for personal property tax.

The Small Business Tax Relief Act, Rep. B. Moore (R-Enterprise), HB151:
The bill to raise the threshold at which a sales tax payment must be made by a business in advance from $1,000 per month to $2,500 is pending in the Senate Committee on Finance and Taxation, Education. No hearing has been set. The Senate version of this legislation is pending in the House Committee on Ways and Means, Education.

Revolving Door Act, SB36, Sen. Marsh (R-Anniston):
This bill originated in the Senate, although it is a part of the House Caucus agenda. As introduced, it would broaden Alabama’s Revolving Door statute as it applies to former Legislators. The bill was carried over on the floor of the Senate during the first week of the session to allow discussion of a proposed amendment sought by Senator Sanders. Senator Marsh indicated on Thursday that he intends to bring this measure up for a vote on Tuesday, January 28.

Other Issues
Legislative Reorganization & Administrative Procedures:
Two bills sponsored by Senator Jimmy Holley (R-Elba) caused a one day slow-down in the Senate on Wednesday. SB11 would consolidate multiple offices housed in the legislative branch, including the Legislative Fiscal Office, Legislative Reference Service, Alabama Law Institute, and the Offices of the Speaker of the House and President Pro Tem of the Senate, under the control of a smaller, reconstituted Legislative Council.

A companion bill by Senator Holley, Senate Bill 178 received less attention, but for those not employed by, or members of, the Legislature, is much more significant in its potential impact. Under the current Administrative Procedures Act, rules and regulations proposed by state agencies must be reviewed by the Legislative Council. The Legislative Council can block proposed rules by voting to do so. That vote would then have to be ratified by the full Legislature through a joint resolution at the next regular session.

Under proposed SB178, rules and regulations would have to be affirmatively approved by the Committee in order to take effect. If not affirmatively approved, the rule would be deemed disapproved. If disapproved, the rule could be appealed to the Lieutenant Governor who could approve the proposed rule. Finally, if approved by the Lieutenant Governor, the Legislature could, by joint resolution, overrule that decision by joint resolution.

Though the new process sounds complex, the end result is that it may be more difficult to adopt new rules or regulations. Perhaps more interesting, the bill would give significant new authority to the Lieutenant Governor with respect to the rule making process.

Senate Democrats fought passage of these bills, arguing that they consolidated too much power over the Legislative branch in too few hands. In the end, cloture petitions closed debate, and the bills were passed and sent to the House. They have been assigned to the Committee on State Government.

Bid Laws:
As noted previously, a number of bills have been introduced that would make minor changes to Alabama's bid laws. Most of those minor changes appear to be non-controversial. However, one set of bid-law bills that are of interest are those that would grant a mandatory preference to in-state companies of 5 percent on competitive bids. One of these bills, SB79 by Senator Brewbaker (R-Montgomery) has been set for a hearing on Wednesday, January 29 in the Senate Committee on Fiscal Responsibility and Accountability.

Crowd Funding:
A bill sponsored by Senator Arthur Orr (R-Decatur) and supported by the Alabama Securities Commission would allow Alabama start-ups to raise capital through social media and advertising. Ventures would be limited raising funds from in-state investors in increments of not more than $5,000 per investor, and could not raise more than a total of $1 million. Supporters argue that in a difficult credit market, this legislation would provide entrepreneurs with an alternative source of funds to begin a business.

Death Penalty:
Both the House and Senate Judiciary Committees approved several criminal justice measures supported by the Attorney General and the Alabama District Attorneys Association. As a whole, the purpose of this package of bills is to speed up the appeals process for capital crimes, to add new crimes to the current list of those eligible for the death penalty, and to limit the contact that a defense attorney could have with jurors (after a verdict), victims and their family members (both before and after verdict). Those bills are now ready to be considered by their respective houses of origin.

The Week Ahead

The Legislature will reconvene on Tuesday, January 28, for its seventh legislative day. The Senate will go into session at 2:00 PM, and the House will convene at 1:00 PM. It is anticipated that the legislature will meet two days (Tuesday and Thursday) this week.

Maynard & Gale will send out updates throughout the Legislative Session. If you have any questions about the matters discussed above, or if there is a particular matter in which you or your business has an interest or concern, please do not hesitate to contact us:

• Clay Ryan: 205.254.1108 or cryan@maynardcooper.com
• Peck Fox: 334.420.0793 or pfox@maynardcooper.com
• Ted Hosp: 205.254.1077 or thosp@maynardcooper.com