Friday, January 19, 2018
2018 LEGISLATIVE UPDATE: WEEK TWO
Severe winter weather significantly impacted the second week of the 2018 Regular Session of the Alabama Legislature. On Monday night, Governor Ivey declared a state of emergency in all 67 counties in anticipation of snow, sleet, and freezing rain. While the Legislature convened as scheduled on Tuesday afternoon, legislative leadership canceled all planned activity for Wednesday—including committee meetings—and sent legislative staff home for the day. The result was an unusually fraught Thursday, with committee meetings taking place before and after the House and Senate convened. The Senate did not take up any legislation as a body on Thursday, choosing instead to recess immediately for committee meetings. The House, which convened slightly later than the Senate, did manage to pass three bills before adjourning for the week. Many committee chairs simply chose to reschedule their meetings for next week.
Much of the legislation that has moved at all at this stage is either noncontroversial or part of the Republican Caucuses’ agendas.
Sunset Bills in the Senate
On Tuesday, the Senate worked through a calendar largely made up of so-called “sunset” bills. Many agencies and commissions must be reauthorized every few years, or they will cease to exist. This mechanism, known as “sunsetting,” is intended to provoke regular legislative review of state programs. Typically, such bills enjoy broad bipartisan support. As is usually the case, the vast majority of the bills passed easily, including bills to reauthorize the Sickle Cell Oversight and Regulatory Commission, the Surface Mining Commission, the Board of Home Medical Equipment, and the State Oil and Gas Board, among others. The Senate carried over the bills reauthorizing two agencies, the State Construction Recruitment Institute and the State Pilotage Commission, for further consideration.
The Senate passed a bill on Tuesday, by a vote of 27–0, 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 as amended by Senator Holley (R–Elba), the project must anticipate investment of more than $50 million in the construction, rehabilitation, or outfitting of its facility.
The Senate also passed a bill on Tuesday, by a vote of 19–1, that would eliminate marriage licenses and replace them with a contract-based system. SB13, sponsored by Senator Greg Albritton (R–Bay Minette), would establish a new procedure for two individuals to marry by filing affidavits, forms, and data with the state’s probate judges. Under the proposed law, probate judges would have no authority to reject any such filing, but would simply record the marriage and forward notice of it to the state’s Office of Vital Statistics. The law would entirely do away with marriage licenses as well as the requirement that marriages be solemnized, although it would still allow for the performance of a marriage ceremony. The law is seen by many as being motivated by a desire to remove probate judges from any responsibility to issue licenses for marriages to which they object.
The Senate chose to use Thursday as its committee day, rather than taking up any further legislation as a body. The Committee on Finance and Taxation General Fund gave a favorable report to a Senate Republican Caucus agenda item, SB93, sponsored by Senator Orr, which would establish procedures allowing Medicaid to place a lien on the property of a Medicaid recipient to recover medical payments. But the committee carried over SB130, sponsored by Senator Trip Pittman (R–Daphne), which would make changes to the Simplified Seller Use Tax Remittance Act (“SSUT”), which passed the Legislature in 2015. SSUT allows for online sellers, such as Amazon, to lock in a lower sales tax of 8% if they opt in. The bill would clarify that sellers remain eligible to pay the lower rate even if they have a brick-and-mortar presence in the state. The introduction of the bill was prompted by Amazon’s acquisition of Whole Foods last year, which triggered a review of whether the online retailer could continue to pay the flat 8% tax. The bill remains the subject of considerable controversy between the state and counties and municipalities.
The Senate Committee on Tourism and Marketing gave a favorable report to SB143, sponsored by Senator Bobby Singleton (D–Greensboro), which 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 airport 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.
Joint Task Force on Budget Reform
The Joint Task Force on Budget Reform, which was formed two years ago, released its final report on Tuesday. At a brief meeting, the chairmen of the Task Force, Senator Clyde Chambliss (R–Prattville) and Representative Danny Garrett (R–Trussville), emphasized several key findings: Alabama’s spending is not out of control, but is well below the 40-year average; Alabama has the lowest overall tax burden of any state in that country; Alabama’s tax structure, much of which was established over a century ago, is “archaic” and will continue to create fiscal challenges in the future if changes are not made; and the Legislature should review all revenue and expenditures during the appropriations process, including earmarked and un-earmarked funds, as well as federal funds that affect state agencies but that are not directly appropriated by state legislators.
Military and Veterans Appreciation Day in the House
Tuesday was Military and Veterans Appreciation Day in the House of Representatives, which included a ceremony honoring Alabama’s living recipients of the Medal of Honor, the nation’s highest military award, and a package of bills designed to benefit veterans.
Among the bills that were overwhelmingly passed by the House were: HB58, sponsored by Representative Dickie Drake (R–Leeds), which would provide free admission to any state park managed by the Department of Conservation and Natural Resources to all active and retired military personnel; HB83, sponsored by Representative Connie Rowe (R–Jasper), which would raise the tax credit for businesses that hire unemployed veterans from $1000 to $2000 as well as extend the credit to businesses that hire combat veterans, even if they are not unemployed at the time of hiring; and HB88, sponsored by Representative Drake, which would grant preferred vendor status to businesses owned by veterans that bid on government projects.
Alabama Partnership Act
One of the three bills passed by the House on Thursday was 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 code, 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 Legislature has used four of its available 30 meeting days for the 2018 Regular Session. The Session can last until April 23—105 calendar days from its opening session on January 9th—but, despite the slow week caused by winter weather, hopes are still high that the session will conclude by the end of March. The House will reconvene on Tuesday, January 23rd at 3:00 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.
If you have any questions or would like to reach out for more information, please contact Edward A. "Ted" Hosp or Edward A. O'Neal. To read more about Maynard's Governmental and Regulatory Affairs Practice, please click here.
To receive future updates from our Governmental and Regulatory Affairs Practice, sign up here.