Friday, February 2, 2018
2018 LEGISLATIVE UPDATE: WEEK FOUR
This was the fourth week of the 2018 Regular Session of the Alabama Legislature, and the state has its first new general law of the year. As of this writing, the Governor has only signed one bill—SB17, sponsored by Senator Cam Ward (R–Alabaster), which brings the Alabama Family Trust into compliance with federal law—but the pace is sure to increase. Alabama’s constitution requires a bill to be “read” on five different legislative days. Next Tuesday will be the Legislature’s ninth day in session, and 30 more bills are poised for final passage. Perhaps as a result of nearly a third of the session having already passed, the momentum of the State House has begun to build. While no filibusters have yet kept the Legislature in session late into the night, this week saw significant floor debates on several bills. Nevertheless, many votes have been near unanimous, and hopes remain high among leadership in both the House and Senate that the session can be concluded swiftly and without too much controversy.
Rural Broadband Initiative
SB149, sponsored by Senator Clay Scofield (R–Guntersville), passed out of the Senate unanimously on Wednesday. The bill seeks to accelerate private investment in rural broadband by providing a tax credit equal to 10% of the investment made by a broadband provider in facilities in unincorporated areas of the state with fewer than 25,000 residents. Proponents of the bill liken bringing broadband to rural parts of the state to the efforts made to electrify those areas in the 20th century. The bill would sunset in 2023, and the total amount of credits given in any year could not exceed $20 million statewide.
Statewide Uber and Lyft Bill Passes House
The House passed HB190, sponsored by Representative David Faulkner (R–Mountain Brook), on Tuesday after a lengthy debate on the floor. The bill would allow the state directly to regulate transportation network companies—such as Uber and Lyft—through the Public Services Commission. In essence, the bill would allow services like Uber and Lyft to operate statewide, rather than working out individual agreements with various municipalities or authorities. The bill has been introduced for each of the past few years, but has generated opposition from some municipalities that already have agreements with the companies and that are resistant to a loss of direct oversight. The floor debate in the House centered around the deletion of nondiscrimination language in the most recent version of the bill, but after an amendment by Representative Juandalynn Givan (D–Birmingham) incorporating Title 7 of the Civil Rights Act, the body passed the bill by a vote of 97–3. Alabama is one of only six states in which transportation network companies operate that does not have such a law. A nearly identical Senate version of the bill, SB143, sponsored by Senator Bobby Singleton (D–Greensboro), unanimously passed the Senate last week.
Additional Regulations for Daycares
On Thursday, the House passed a bill that would increase regulation of daycares affiliated with religious organizations in Alabama after a lengthy floor debate. Under current Alabama law, any daycare that is affiliated with a church or religious nonprofit school is exempt from licensure and regulation by the state’s Department of Human Resources (“DHR”). Considerable media attention focused on the mistreatment of children at some daycares that avoided licensure and regulation by claiming such an affiliation have prompted efforts in the Legislature to eliminate or modify the exemption. HB76, sponsored by Representative Pebblin Warren (D–Tuskegee), would not require that all daycares be licensed and regulated. Instead, the bill would only require that daycares that are currently exempted to post a notice to that effect and to forward annually all records of health and fire inspections as well as the names and criminal background checks of all employees to DHR. Furthermore, the bill would empower DHR to inspect any exempted facility if there is reason to suspect a threat to child safety or if the facility has not supplied the required documentation. Much of the debate over the bill—which was itself the result of a lengthy process to reach a compromise among stakeholders—centered on a last minute amendment offered by Representative Allen Farley (R–McCalla). The amendment removed language from the bill requiring that any facility that enrolled children who receive state or federal subsidies must be licensed. Representative Farley argued that he was simply trying to prevent a de facto penalty for religiously affiliated daycares that enrolled needy children. After a prolonged conversation on the floor among several members about the effect of the amendment’s language, it was adopted by a narrow vote. The bill, as amended, passed the House by a vote of 86–5 and now moves to the Senate.
The House, by a vote of 97–0, gave final approval to a bill on Tuesday that would allow counties to abate ad valorem taxes for large economic development projects. SB98, sponsored by Senator Arthur Orr (R–Decatur), would permit county commissions to grant an abatement of all or a portion of all county ad valorem taxes owed on properties within their counties. The property must be used for a project that qualifies for economic incentives under the Alabama Jobs Act, which the Legislature renewed and reworked last year, and which sets requirements for investment levels and job creation. The project must also be significant in size; under the proposed law, the project must anticipate investment of more than $50 million in the construction, rehabilitation, or outfitting of its facility. The bill now awaits the Governor’s signature.
Alabama Partnership Act
On Wednesday, the Senate Committee on the Judiciary favorably reported HB72, sponsored by Representative Bill Poole (R–Tuscaloosa), which would repeal and replace the Alabama Partnership Act. As part of an ongoing process to modernize Alabama’s business entities statutes, the Alabama Law Institute has been working with the Legislature to develop Alabama versions of model laws relating to the formation, dissolution, governance, and powers of business entities. The Legislature has already rewritten the sections of the Code relating to limited liability companies and limited partnerships, and has now turned its attention to general partnerships. HB72 would bring Alabama’s laws relating to general partnerships more closely into line with other states’, significantly increasing the ease of doing business across state lines both for in-state and out-of-state businesses. The bill now moves to the Senate as a whole for final passage.
Direct Payment of Chiropractors
Two identical bills that would allow chiropractors to take direct payments from patients without being regulated as selling insurance have moved out of committee in their respective chambers. SB234, sponsored by Senator Priscilla Dunn (D–Bessemer), and HB136, sponsored by Representative Ken Johnson (R–Moulton), would treat chiropractors in roughly the same way as doctors who choose to receive direct payments from their patients under a law passed last year. In essence, the bills would allow chiropractors to charge an agreed-upon fee for treatments over an agreed-upon time. The bills clarify that such arrangements would not be treated as insurance, and so would not be regulated by the state’s Department of Insurance. As a general rule, however, physicians or chiropractors who take payment—other than copays—from patients are not eligible to participate in many insurance networks.
First-time Homebuyer Accounts
The House Committee on Ways and Means Education favorably reported a bill, sponsored Representative Kyle South (R–Fayette), which would allow Alabamians to claim a tax deduction for saving money towards the purchase of their first home. HB248 would allow an annual income tax deduction of up to $6,000 for individuals and $12,000 for couples for up to five years for deposits made into an account set aside for first-time purchase of a home. Under the proposed law, funds must be used for the purchase or closing cost of a first home, and the accountholder as well as the purchased home must meet certain conditions. If the bill passes, Alabama would become the seventh state to offer first-time homebuyer accounts.
A bill that would create an amnesty program for all taxes other than motor fuel, motor vehicle, and property taxes unanimously passed out of the House Committee on Fiscal Responsibility on Wednesday. HB137, sponsored by Representative Ken Johnson, would create a three-month window—from July 1st through September 30th of this year—during which Alabama taxpayers could pay any taxes owed from before January 1, 2017 without penalties or interest. In order to be eligible for the program, the taxpayer cannot have already been audited or contacted about the unpaid taxes by the Department of Revenue. The taxpayer would also be required to waive any right to dispute the amount of the taxes owed. The bill now moves to the House for a vote of the whole body.
The Legislature has met for eight of its available 30 meeting days for the 2018 Regular Session. While the Legislature has a 105 calendar day window in which to meet, hopes still remain high that the session will conclude by the end of March. The House will reconvene on Tuesday, February 6th at 1:30 p.m. The Senate will reconvene on the same day at 2:00 p.m. Next week is anticipated to be a two legislative day week, with Wednesday reserved for committee meetings.
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