2016 Newsletter Issue 6 March 11, 2016
From our DesK ...
Hot Topics:
Beware the Ides of March: The
Design Build and Prisons
legislature returns to the statehouse on March 15. This day will mark the halfway point for the2016 session. While lots of debate has occurred in committee, the legislaturehas slowed down a bit in terms of action. All eyes will be on the Senate floor come Tuesday. Et tu, Brute?
Historic Tax Credit Right-to-Work Alabama Aerospace Week Dixie Get Your Gun Bama-n-Brews Medicaid vs. Tourism Legislative Calendar
Unfortunately the Medicaidshortfall has caused rumblings of a Special Session that has sent shock wavesthroughout the statehouse. Tensions havealready flared due to hot button issues like the preemption of minimum wage,right to work codification and a potential revamping of the Medicaid agency andthis threat adds fuel to the fire.
Design/ Build Provision Once Again Delays Vote onPrison Building Bill After yet another hearing on the prison building bill, Sen. Trip Pittman,the Senate General Fund Budget Chair, delayed a vote on the bill until nextweek. It appears that lawmakers still remain confused over the proposal tobuild new prisons. Questions of the ability to pay back the bond issue, thealleged savings and the location of the prisons are topics of concern but notas much as the exception to allow for the design-build model. Under the prison-building plan, the state would build three new prisons formen; each capable of holding about 4,000 inmates, plus one new prison forwomen. Those prisons would be overcrowded from the start, but would cut theprison system's occupancy rate from about 180 percent to about 125 percent,prison officials say. The plan's proposed “design-build” process would allowone company to both design and construct the prisons without separate bids.Advocates of the prison plan said the approach would save time, but Senatorssaid they worried about potential cost overruns without a typical bid process. “Wecan't afford to go off on a tangent and find out that we're financing failure,”said Scott Williams, a general contractor who spoke at the hearing. Col. Jeff Dunn, the Alabama Prison Commissioner, stressed more than once the plan to beaffordable depended on lawmakers approving this one-time exception to thestate's bid law. If that exception was not granted, then the DOC would have tobid out each new prison to likely a host of companies which Dunn said woulddrive up the overall costs by at least a $100 million. The bid exception part of the plan has drawn the opposition of some groupslike architects, engineers and construction firms who are lobbying lawmakersnot to grant the exception from bid law and instead require all design andconstruction phases’ at all new prisons to be bid and awarded to multiplecompanies. MDG continues to watch this hotbutton issue.
Historic Tax Credit Remains Stalled With Onerous Amendment
A bill monitored by MDG and dozens of groups including city leaders, chambers of commerce andother trade organizations has stalled over the past few weeks. Supporters say thatthis economic incentive is responsible for pumping millions of dollars ofreinvestment into aging downtown properties in Birmingham and Mobile and is nowfacing a murky future. News accounts suggest that it is “is embroiled inpolitical maneuvering that supporter fear may kill it.” The bill keeps thestate's historic tax credit program going another seven years, to 2022.
It setsaside $20 million in each of the next seven years for redevelopment projectsinvolving buildings that are on the National Register of Historic Places. According to the Alabama HistoricalCommission, 14 such projects are already on the waiting list. But, the amendmentadded by Rep. Phil Williams of Huntsville would suspend the taxcredits in years of proration or level funding within the General Fund orEducation Trust Fund.Proration -- mid-year budget cuts during economic slumps-- has occurred about a dozen times since 1979. The last time was during fiscalyear 2011. Supporters of thetax credits, however, say developers will shy away from expensiverestoration projects if incentives aren't a sure thing. "That createsuncertainty with developers and a lot of uncertainty in the marketplace. If thedevelopers cannot get financing and move forward, it creates a lot ofdisruption," said Alison Howell, vice president of public policy with theBirmingham Business Alliance. They point to the incentives as to the revivalsof places such as the Lyric Theater and the Redmont Hotel in downtownBirmingham and the old Turner-Todd Motor Co. in downtown Mobile. There was an$11.5 million restoration at the Lyric Theatre that opened to the public as aperforming arts center. Those in Birmingham say that there has been over $200million in investments in Birmingham alone. Rep. Victor Gaston,R-Mobile, sponsor of the House version of the bill, said he believes he hasenough support in the full chamber to strip out the amendment. He said the billcould reach the House floor soon although the House has been in a stalledposition with a back log of bills that continue to pile up. Rep. Patricia Todd,D-Birmingham, who favors the tax credits, and lauds their effects, said theamendment stemmed from worries, in some circles, that the Legislature needs allthe revenue that it can lay its hands on. Opposition in the Senate also looms. Sen.Trip Pittman, R-Montrose has said he doesn't support doling out the tax creditsto benefit a few developers. The result, he said, is an imbalance in themarketplace. Other kinds of taxcredits have fared well in the Legislature thus far. The House votedunanimously last month to establish tax credits to support the state's portfacilities. The same amendment was offered on this bill but Greg Canfield, theCommerce Director, persuaded lawmakers to not attach that amendment to thebill. Alabama is one of 34states offering a historic tax credit for rehabilitation of older buildingsthat qualify. A January report byMaryland-based Novogradac & Company shows the Alabama credit has generatedstrong returns during its first three years, being responsible for $384 millionin private investment. The report estimatesthat for every $1 tax credit that the state provides, $3.90 will return tostate/local collections over 20 years. In fact, the state is set to break evenon its initial $60 million tax credit allocation by 2019.
Right to Work Bill Carried Over in theSenate The final step to allow the people to vote on placing the current statutoryright to work language in the Constitution was thwarted this week in theSenate. With just one step from final passage, filibusters ensued when the billwas brought to the floor. The bill was
carried over and must now be broughtback by the Senate Rules committee. The bill is sponsored by Rep. Arnold Mooneyand Sen. Gerald Dial. The lobby of the Senatewas filled with union lobbyists when the bill came up and could account for thedelay although it is expected to receive final passage. The law states that Alabamians have the rightto work without their membership or lack of membership in a union being acondition of employment.
Worker’s Compensation Bill Sparks Interestin Committee MDG was also on hand as legislators in the Commerce and SmallBusiness Committee discussed the bill being pushed by Rep. Barry Moore thatlowers the number of people that a company must have to carry worker’scompensation. His proposal does not count any person with at least a 50 percentinterest in the company for purposes of carrying worker’s compensation insurance. Current law requires a company with 5 or more employees to carry the coverage with no exception. The trial bar called a public hearing on the bill and suggested it wouldbe more devastating to a business if they choose not to carry the insurance.The committee appeared to be very much in favorable of the bill, but will nottake an official vote until next week. No other groups testified for or againstthe legislation.
Alabama Aerospace Week Celebrated on Goat Hill Marshall Center Director Todd May and Astronaut Steve Bowen, veteran of seven spacewalks, voyaged down to Montgomery from Alabama's own Rocket City on Thursday, March 10. Alabama Aerospace Week acknowledges Alabama's contribution to aerospace endeavors, as well as the economic impact of the aerospace industry in Alabama. Director May and Astronaut Bowen didn't come empty handed; Washington Street alongside the Capitol closed down to house a real RS-25 rocket engine and other interactive exhibits.
MedicaidAbsorbs Money from Dept. of Tourism/ Public Service Comission Even though the Medicaid budgetremains short of the requested $785 million an additional $15 million was addedin the General Fund budget committee. That amount included money transferred from the Department of Tourismaccording to news accounts.
The Housecommittee increased the appropriation to $700 million but the MedicaidCommissioner said that the additional monies would not be enough to allow forthe Regional Care Organization/managed care model submitted and approved by theFederal Government. The Commissionertold the Committee the amount jeopardizes $747 million federal dollars.Governor Bentley had suggested that the additional $100 million needed comefrom the Education Budget but lawmakers rejected that plan and instead tooktourism dollars and funds from other agencies. The Governor has threatened toveto a budget that does not fully fund Medicaid that could trigger a SpecialSession. Bentley’s task force called theAlabama Health Care Improvement Task Force called for another increase in thetobacco tax by 75 cents.Last year the legislaturepassed a 25 cent tobacco tax and to date there is no appetite in thelegislature to increase that amount. Rep. Clouse said the increase was unlikelysince it would tax cigarettes in Alabama more than they are taxed insurrounding states. Transfers came from the Department of Tourism and the PublicService Commission. Over $20 million additional funds to the General Fund havecome from taxes collected this past year from the remittance of the retailon-line sales tax.
Dixie Get Your Gun "Jefferson County is on track to issue almost 63% more pistol permits to women this year than last year. In 2015, the county issued 13,747 pistol permits to women, and they have already issued more than 4,000 this year. If that volume stays consistent for the rest of the year, Jefferson County will issue over 22,000 permits to women in 2016." Yellowhammer News
Bama-n-Brews
Alcohol bills front and center, yet again, This week at the Alabama legislature Super Tuesday Vote: Alcohol bills continue to dominate much of theactivity in the House and the Senate and even on the Super Tuesday ballot. Besides the authorization of Sunday sales inShelby
County, voters in two other cities voted to throw out the ban. Both Lineville and Ashland located in ClayCounty voted to no longer be dry, the only dry County remaining in the state.Retailers who want to sell alcohol must apply for licenses from both the ABCBoard and each city government. The citycouncils of both cities are currently developing ordinances to regulate thesale including what businesses will be eligible to sale. Small Brewery Beer Bill on the Move: The House has approved ameasure advocated by the Alabama Alcoholic Beverage Study Commission to allowbreweries and brewpubs to engage in limited retail sales of alcohol. Sponsored by Rep. Daniel of Huntsville thebill allows small brewers and brewpubs that produce less than 60,000 barrels ofbeer annually to sell up to 288 ounces of beer per day to a customer foroff-premise consumption. Further, itallows the brewers to directly deliver up to two kegs per event to a charityfunction. Under current law breweriescan only sell beef for off-premise consumption through a licensedwholesaler. Sen. Holtzclaw also ofHuntsville is the sponsor of the Senate companion bill and was also up forconsideration for Senate passage but was carried over. Stay tuned‌. Liquor Distilleries authorized for Retail Sales Passes Senate: Thebill to allow 750 milliliters of off-premise sales by distilleries also passedthe Senate on a short Senate calendar. It now goes to the House. Privatization Shelved in Committee: The bill that privatizes the ABCindustry drew a large crowd to the Fiscal Responsibility and EconomicDevelopment committee. After a lengthy debate on the overhaul of the Medicaidprogram, Sen. Phil Williams, Chair of the Fiscal Responsibility and EconomicDevelopment committee, announced that the public hearing on the agenda would betaken up this week. Tasting Rooms For Wineries Passes Senate: A short calendar in theSenate landed SB 166 by Sen. Coleman-Madison allows a licensed small winery toobtain a permit for one off-site tasting room. It now goes to a Housecommittee.
Find Your Alabama Representative
Find Your Alabama Senator
Legislature Reconvenes March 15, 2016 The Alabama House of Representatives reconvenes on Tuesday, March 15, 2016
at 1 p.m. The Alabama Senate reconvenes on Tuesday, March 15, 2016 at 2p.m.
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