2017 Legislative Newsletter Issue 5 March 10, 2017
From Our DesK: This coming week is being dubbed "The Budget Week" and is the last full week of session prior to two-week Spring Break slated for March 17-28. Many important bills are on the agenda for committees this week, as well as for floor debate. However, it has been made clear to many, nothing shall get in the way of moving forward with the House version of the General Fund Budget. Alas, it's a good thing there's no Caesar around to worry about this coming busy week. Beware the Ides of March!
Alabama Transformation PrisonInitiative Act Transformed Thisweek after numbers of committee meeting agenda changes, it became apparent thatthe current prison proposal that was comprised of the design build method, calledfor an $800 million dollar bond issue and the building of three new 4,000 bedprisons in undisclosed locations was not on the fast track. In fact, it was not on any track and itseemed that no amount of sway was changing some legislator’s minds who opposedthat version of the bill. It closed 14 of Alabama’s 17 prisons in theconsolidation. Insteadon Thursday, a much different version of the bill was passed out of thecommittee. It allows the state to borrow up to $775 million for up to threeprisons and for renovations to be made on existing facilities. Another interesting twist that seems to beattractive to
lawmakers allows Counties and cities to set up authorities toacquire property and issue bonds to build prison facilities that theauthorities would then lease to the Department of Corrections. The leasepayments would then be used to pay off the bonds. Notably,the Design build model is not authorized in the legislation. It, too, hadcontinued to be a hot button issue for lawmakers. The new version also revertsback to the traditional bid process which includes bidding by an architect anda contractor. Ward said that even if this method is more costly “I think thereis so much concern and skepticism about State government today that going back tothe way we’ve always done it would be good. Going back to the method that we’vealways used made people feel a lot better.” Theprisons built locally would have to meet ADOC standards and state bid laws. Thelocalities would also be required to set up a public corporation to issue thebond and comply with the state open meetings law. Thestate Legislative Council comprised of both House and Senate members would havethe authority to sign off on all procedures used by the authority. The billreceived a second reading on Thursday and eligible for floor debate. It wouldthen go to the House for further deliberations.
Historic Tax Credit ClearsCommittee but a Very Different Version MDG was front and center to hear the debate on SB 262 by Sen. JaboWaggoner-Vestavia Hills, aka the Historic Tax Credit and Rehabilitation legislation,supported by members of the construction industry. But the version that wasadopted by the committee contains very different provisions than the onedropped in the hopper last week. Underthe substituted version, the bill requires the historic property located inAlabama to be at least seventy-five years old. It also allows for tax years2018 through 2022, the aggregate amount of all tax credits that may be reservedin any one of such years by the Commission and certification of rehabilitationplans shall not exceed $20,000,000 plus any amount of previous reservations oftax credits that were rescinded during the tax year. However, if all of theallowable tax credit amount for any tax year is not requested and reserved, anyunreserved tax credits may be utilized by the Commission in awarding taxcredits in subsequent years; provided, however, that in no event shall a totalof more than $100,000,000 be reserved by the Commission during the period fromthe effective date of this act through Dec. 31, 2022. For purposes of thisbill, "tax year" shall mean the calendar year. Theannual amount of tax credit provided for in shall be divided equally among theCongressional Districts in the state and available for reservation for projectswithin those districts for the first three months of each tax year. Any taxcredits remaining available after six months in each Congressional Districtshall then be made available for use by any Congressional District in thestate. Tax credits granted to a partnership, a limited liability company, SCorporations, trusts, or estates, shall be claimed at the entity level andshall not pass through to the partners, members, or owners.
New license platelaunched to benefit state park system A new specialty motorvehicle license plate was launched in January to benefit the state parks systemin Alabama and was dubbed "State Parks Supporter." The plate costs anadditional $50 and can be requested with motor vehicle owners renew their tagsat their local county offices. License
commissioner Jeff Brown said 12 tagshave been sold by the Tuscaloosa County office. The state parks willreceive about 80 percent of the revenue through the specialty plate, whileapproximately 20 percent will go toward administrative costs. This comes aftercomes after a referendum in November that provided more assurances fees andother funding from parks so they wouldn't be taken away to fill budget holes.
Alabama History Did you know in 1883, Alabama was the first state to enact an antitrust law? Antitrust Laws are laws that exist to protect fair competition to the benefit of consumers (i.e., to prevent high costs and monopolies). So far in the 2017 Regular Legislative Session, the Real Estate Commission, the Board of Professional Engineers/Land Surveyors and the Board of Chiropractors have all introduced legislation for antitrust law.
Competitive Bid Advantage forVeterans Raised Eyebrows In committee this week, there was a livelydiscussion regarding preferential bid treatment for veterans of the Afghan andIraq wars this week in the Senate Fiscal Responsibility and Committee. SB 220 sponsored by Sen. Gerald Dial-Lineville, told membersthat preferred vendors are already given preference in the awarding of publiccontracts by stateagencies and institutions. SB 220 wouldgive preferred vendor status to those businesses located in the state that areowned by veterans who were deployed to Afghanistan or Iraq as a part of OperationEnduring Freedom or Operation Iraqi Freedom. Legislatorson the committee expressed concerns that this bill and even current existinglaw should be re-vamped with more specifics, such as a minimum amount ofservice in the armed forces, the amount of ownership required in the company,along with an array of similar questions. Thebill received two amendments in committee where it was given a favorable vote.The two amendments were clarification to begin the first day of the third month if enacted, and aclarification of definitions includes "City and county governments"change to “County and municipal governments and instrumentalities or publiccorporations thereof.” The amended version of SB 220 now awaits its third reading and final passage in theSenate.
Beware if you are in Autauga, Chilton or ElmoreCounty Local Alcohol Tax to Fund DA’s
SB 286 by Sen. Dick Brewbaker-Montgomeryintroduced legislation on Thursday, March 9, regarding local alcohol tax forAutauga, Chilton and Elmore Counties. The tax was levied tax on the retail andwholesale price of all spirituous or vinous liquors sold in the 19th JudicialCircuit, and providing for disposition of the proceeds. The tax shall be collected as are other taxes on alcoholic beverages anddeposited into each county's general fund for distribution to the 19thJudicial Circuit district attorney's office for the operation of the office. The Alcoholic BeverageControl Board may withhold 5 percent of the tax collected under this act forcosts for administration and collection not to exceed $2,000 per year. A Housecompanion, HB 379 was introduced by Rep.Jimmy Martin-Clanton and was referred to the House Local LegislationCommittee.
Exxon to spend $20 billionalong Alabama’s Gulf Coast ExxonMobil Corp. Chairman and CEO Darren Woods said the company plans to spend $20billion on refineries, chemical and liquefied natural gas plants along the AlabamaGulf Coast over the course of a decade. The sum of $20 billion would be roughlyequal to Exxon's total capital spending last year. Woodsalso said the company would expand current plants and build new ones, mostlydesigned to create petroleum products for export. This would create 12,000permanent jobs and 35,000 construction jobs.
Questions Abound RegardingPrivatization of ABC Stores A showdown ensued at the public hearing that is designed to privatizeall of the state stores in Alabama. MDG joined the packed and overflow crowdto hear from proponents and opponents of SB 260, by Sen. ArthurOrr-Decatur. The bill seeks to close all of the ABC stores over the course of fiveyears beginning in 2018. Under the bill, stores closings would be determined bythe ABC and would close approximately 20 percent of its stores each year.Currently, Alabama has about 170 liquor ABC stores and approximately 600 privateretailers. SB 260 lays out the storeclosing factors in order of priority: store lease end date, store profitabilityand proximity of another ABC store nearby. The fiscalnote for SB 260 states the store closings could increase funds tothe General Fund Budget by an estimated amount of $18-21 million annually. Opponents of the bill included the State Employees Association thatspoke about the 600 jobs of state employees that would be eliminated with noguarantee to be replaced by the private business. No number was produced as tothe number of full time versus part time workers when asked by the committeemembers. Under the bill any displaced workers among other provisions receive alump sum equivalent to three months of his/her annual salary. The bill wouldalso allow if a licensee hires a displaced employee to receive a 20 percentdiscount on license/permit fees if the licensee employs the displaced workerfull-time for 12 consecutive months or longer. The discount applies for eachcompleted year for up to five years. The bill requires restaurants and bars topurchase alcohol from private package stores. "I think it's sound policy to remove the state from competingagainst the private sector in retail
sales of alcohol," Senator Orr toldthe Decatur Daily. "If the state weren't in the liquor business today,with the 600-plus private liquor retailers out there, would we be entertainingthe concept of getting into the retail sale of alcohol in the 21st century? Idon't think so." SB 260 requires the AlabamaAlcoholic Beverage Control Board to phase-out retail sales operations prior toOct. 1, 2022 on a staggered basis by closing twenty percent of stores each yearfor five years based on the following factors in order of priority: 1) thelease end date, 2) the profitability, and 3) the proximity of surrounding stateoperated liquor stores. This bill could increase receipts to the SGF by anestimated range of $18 million to $21 million annually beginning in fiscal year2023 after the completion of the five-year retail sales phaseout. Starting Oct. 1, 2022, the bill amends the markup levied by the Boardto 16.99 percent, of which 15.99 percent shall be allocated to the State GeneralFund (SGF). The remaining 1 percent of the markup levied by the Board will bedistributed to replace revenue from net profits as follows: (1) 30.5 percent tothe Department of Human Resources (DHR); (2) 13.8 percent divided equally tothe general fund of each wet county; (3) 1.4 percent divided equally to eachwet county to be used for public health purposes; (4) 29.1 percent tomunicipalities that had state operated stores prior to Oct. 1, 2022 to bedistributed in amounts equal to the ratio of profits earned by store(s) in eachmunicipality to the total net profit of all state operated stores; (5) 20.9percent to cities and towns in wet counties based on population; and (6) 4.3percent to wet counties based on population. This fiscal note says the bill will also increase license fee receiptsfor retail outlet operation to the SGF by an estimated $396,000 annuallyassuming all currently privately owned retail stores remain and the same numberof state operated stores that close become privately owned retail stores and alsoincrease nonrefundable filing fee receipts to the SGF by an estimated $8,500assuming all state operated stores become private owned retail stores. It restricts a retail licensee purchasing a closed state operatedliquor store from transferring the purchased license and limits the number ofstores that can be purchased by a retail licensee to no more than five and alsorestricts retail licensees from selling spirituous or vinous liquor belowretail cost plus freight. Further fiscal notes say that the legislation could increase receiptsto the SGF and municipal general funds from fines; increase receipts to theSGF, county general funds, municipal general funds, and other funds to whichcourt costs are deposited; and could increase the obligations of the districtattorneys and local jails by an amount dependent upon the number of personscharged with and convicted of the offenses provided by this bill and thepenalties imposed. It could increase receipts to the board up to $1 million percivil penalty if a person gives anything of value to induce another to refrainfrom operating a retail outlet. The bill was given a favorable report and a second reading on Thursdayand eligible for Senate floor debate.
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