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2015 Legislative Update - Week 13

The Alabama Legislature has now completed the 28th legislative day, and final day, of the 2015 regular legislative session. It appears there will likely be one or more special session in August. The General Fund budget did pass the House and Senate which cuts General Fund agencies by an average of 11.1%. True to his word, Governor Bentley vetoed the General Fund budget.

At this point there appears to be four scenarios as to a General Fund budget going forward: 1) repass a General Fund budget much like the one just vetoed by Governor Bentley; 2) pass enough revenue to level fund the General Fund budget; 3) pass enough revenue to level fund state government and prison reform and Medicaid reform (approximately $315 million); 4) pass lottery/gaming legislation that would fund the General Fund, pay for Correction reform and Medicaid reform and begin to pay back money borrowed by or over paid to the General Fund over the past years.

Status of bills ASEA was monitoring:

SB 453, sponsored by Senator Del Marsh, the lottery-gaming bill is dead for the session. The revenue generated from this legislation would have been dedicated to the General Fund.

SB 496, sponsored by Senator Arthur Orr, would have altered the distribution of use tax revenues to 50% for the General Fund and 50% for the Education Trust Fund. This would have increased revenues to the General Fund by $20 million in the current fiscal year (2015) and by $80 million annually thereafter. SB 496 died in the Senate.

SB 497, sponsored by Senator Greg Albritton and Senator Arthur Orr, would have established a factor presence nexus standard for business activity for purposes of income tax. SB 497 died in the House.

SB 502, a Constitutional Amendment, sponsored by Senator Gerald Dial and others, would have eliminated all requirements that limit the appropriation or spending of state revenues in a particular manner. SB 502 died in the Senate.

SB 415, sponsored by Senator Trip Pittman and others, would have amended Section 36-26-27, Code of Alabama 1975, to revise the procedures for review of the dismissal of classified employees by an appointing authority; to specify when the State Personnel Board may reverse or modify the dismissal; and to provide for the venue of judicial review of action by the State Personnel Board. SB 415 died in the Senate.

HB 135, the General Fund budget, sponsored by Representative Steve Clouse, as substituted, passed the Senate Committee on Finance & Taxation. HB 135 cuts state agencies by an average of 11.1%. HB 135 was vetoed by the Governor.

SB 375, sponsored by Senator Author Orr, would provide flexibility to state agencies to utilize state revenue for purposes in addition to the stated purpose. This legislation would effectively un-earmark funds within a department unless specified by statute, constitutional amendment or by court decision. SB 375 passed both Houses and was signed into law by the Governor.

HB 29, sponsored by Representative Randy Wood, would allow a member of ERS who is out of state service for a job related injury to purchase credit for such time. This legislation has passed both Houses and was signed into law by the Governor.

HB 76, sponsored by Representatives Randall Shedd and Ed Henry, would have created a committee for performance-based pay applicable to all state agencies. The legislation would base state employee pay on performance of the agency or department they worked for. This legislation would seem to circumvent the Merit System. HB 76 died in the house.

HB 456, sponsored by Representative Phil Williams, would have required an independent audit of RSA and its investment portfolio every two years and that the results of said audit be provided to the legislature. HB 456 died in the Senate.

SB 24, by Senator Clay Scofield, would merge certain employees from post-secondary education into the Department of Labor under the Merit System. SB 24 was signed into law by the Governor.

SB 216, sponsored by Senator Gerald Dial, would allow a state agency to levy or assess fees that are retained by the agency to fund its operations. SB 216 passed both Houses and is pending action by the Governor.

SB 115, sponsored by Senator Arthur Orr, would have privatized ABC. SB 115 died in the Senate.

On Tuesday, Senate Joint Resolution 104 was introduced by Senator Arthur Orr. SJR 104 set up a committee to study ABC privatization, but it also contained conclusions calling for privatization of ABC by 2017. SJR 104 passed the Senate, was successfully amended in the House and ultimately died when it was returned to the Senate.

SB 476, sponsored by Senator Del Marsh, would limit General Fund appropriations to Medicaid to 10% of total General Fund appropriations and Corrections to 5.5% of total General Fund appropriations. SB 476 died in the Senate.

SB 444, sponsored by Senators Tim Melson and Arthur Orr, would have increased the probationary period for new state employee hires from six months to three years. SB 444 was amended to a one-year probationary period for new hires. SB 444 died in the Senate.

HB 554, sponsored by Representative Alan Baker, would transfer various duties and functions having to do with job training and workforce development from ADECA and post-secondary education to the Department of Commerce. HB 554 passed out of the House. HB 554 as amended passed both Houses and is pending action by the Governor.

HB 562, sponsored by Representative Ron Johnson, would increase the compensation ceiling for retirees who return to work on a part-time basis in state government. HB 562 passed both Houses and is pending action by the Governor.

HB 690, sponsored by Representative Craig Ford, would have re-established the DROP for state and education employees. HB 690 died in the House.

HB 588, sponsored by Representative Lynn Greer, would have required the Governor to order two mandatory furlough days, thus a two day pay cut, for state employees on days designated as state holidays. HB 588 died in the House.

HB 590 was pulled from consideration by Speaker Mike Hubbard. HB 590, sponsored by Representative Arnold Mooney and others, would have eliminated longevity pay for state employees in the upcoming fiscal year, FY 2016. HB 590 died in the House.

HB 572, sponsored by Representative Patricia Todd, would have increased the fees on tobacco products. HB 572 died in the House.

SB 76, sponsored by Senator Del Marsh, would consolidate functions of the Alabama Building Commission under the Finance Director. SB 76 as amended passed both Houses and is pending action by the Governor.

SB 212, sponsored by Senators Tim Melson, Dick Brewbaker, Shay Shelnutt, Larry Stutts, Greg Albritton and Arthur Orr, would allow state agencies to have up to two additional exempt employees. SB 212 passed both Houses and is pending action by the Governor.

HB 613, sponsored by Representative Matt Friday, would have reduced by 50% (cut in half) mileage reimbursement paid by the state when an employee is required to use their personal vehicle for work. HB 613 died in the House.

HB 267, sponsored by Representative Steve Clouse, would have increased motor vehicle rental tax. HB 267 passed out of committee, but died in the House.

SB 411, sponsored by Senator Arthur Orr, would amend Section 36-27B-1, Code of Alabama 1975, relating to preretirement death benefits for judges, clerks and district attorneys; to establish the Judges’ and Clerks’ Plan for retirement for justices, judges, and circuit clerks; to establish the District Attorney’s Plan for retirement for district attorneys; and to provide guidelines for the plans. SB 411 passed both Houses and is pending action the Governor.

SB 410, sponsored by Senator Shay Shelnutt and Senator Del Marsh, provided that Confederate Memorial Day and Jefferson Davis’ birthday are unpaid holidays, unless designated otherwise by the Governor; to provide for the designation of two additional paid holidays for state employees under certain conditions; to limit the number of paid state holidays for state employees; and to limit the leave or compensation to the lessor of eight hours or the time worked; and to define a state holiday as an eight-hour day. In essence this legislation would cut two holidays for state employees and would have the effect of a pay cut. SB 410 died in the Senate.

HB 39, sponsored by Representative Donnie Chesteen, would require the state to provide state employees and education employees with a list of their benefits and value of said benefits annually. The Governor has signed HB 39 into law.

HB 48, sponsored by Representative Mac McCutchen, would have provided for the Office of the Ombudsman on Child Welfare (DHR). This legislation, as substituted, passed out of committee, but died in the House.

HB 542, sponsored by Representative Barry Moore and others, would have allowed a non-elected department head to receive a year-end bonus equal to the percentage of reduction in the annual budget of the department. HB 542 died in the House.

HB 490, sponsored by Representative Steve Clause, would have revised the repayment schedule for funds transferred from the Alabama Trust Fund to provide for the repayment not later than September 30, 2027. HB 490 passed out of committee, but died in the House.

SB 355, sponsored by Senator Greg Albritton and Jabo Waggoner, would have removed State Personnel Board members from the State Employee Insurance Board and create appointments to fill those positions. SB 355 died in the Senate. SB 203, sponsored by Senator Arthur Orr, would have merged the Department of Forestry into the Department of Agriculture. SB 203 died in the Senate. HB 224, sponsored by Representative Steve McMillian, would have taxed tobacco products, including consumable vapor products. HB 224 died in the House. HB 268, sponsored by Representative Steve Clouse, would have increased the sales and use tax on motor vehicles to 3%. HB 268 died in the House. HB 276, sponsored by Representative Chris England, would have imposed a license tax of 2.2% on any public, private or municipal utility. HB 276 died in the House. HB 277, sponsored by Representative John Knight, would have removed tax credits from the insurance premium tax, thus increasing revenue to the General Fund. HB 277 died in the House. SB 100, sponsored by Senator Rusty Glover, would have removed the cap on donated sick leave. SB 100 died in the Senate. HB 100, by Representatives John Rogers and Mary Moore, would have placed all correctional officers, law enforcement officers and state police employees under Tier I of the Retirement Systems of Alabama regardless of their hire date. HB 100 died in the House. HB 114, a Constitutional Amendment, sponsored by Representative Thad McClammy, would have provided a COLA for state employees may not become effective unless the increase also applies to public education employees and retired state and public education employees. HB 114 died in the House. HB 455, sponsored by Representatives Richard Lindsay and Rod Scott, would have required combined reporting for determining Alabama taxable income. HB 455 died in the House.

HB 471, sponsored by Representative Craig Ford and others, a Constitutional Amendment, would have provided for a lottery to fund Medicaid. HB 471 died in the House.

HB 475, sponsored by Representative John Knight, a Constitutional Amendment, would have repealed the state exemption for payment of federal income tax. HB 475 died in the House.

HB 477, sponsored by Representative John Knight, a Constitutional Amendment, would have increased state property tax by 1 mill with proceeds going to the General Fund. HB 477 died in the House.

HB 478, sponsored by Representative John Knight, a Constitutional Amendment, would have repealed the state exemption for payment of federal income tax and would exempt food and over-the-counter drugs from state sales tax. HB 478 died in the House.

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