An account of how select bills – among those ARA supported, opposed or monitored – fared during the 2011 regular session follows. The 2011 session summary will appear in the next issue of Alabama Retail Quarterly.

Product liability protection for Alabama retailers is now law.
Act No. 2011-627 bars product liability suits against retailers, wholesalers and distributors in our state unless those entities also are the manufacturer/ designer of the product, altered the product to make it harmful or the manufacturer cannot be identified. Prior to the governor signing this new law Thursday, Alabama retailers could be sued even if the retailer had nothing to do with the manufacture or design of a defective product and sold it directly as provided by the manufacturer. "This protection is particularly important for small businesses," Gov. Robert Bentley said after signing the bill into law. ARA thanks Sen. Ben Brooks, R- Mobile, and Rep. Wes Long, R-Guntersville, the main sponsors of this legislation for their efforts on behalf of Alabama retailers.

Surrounded by the legislative sponsors and the business groups that supported the legislation , the governor also signed into law three other tort reform bills:

Act No. 2011-522, sponsored by Sen. Clay Scofield, R-Guntersville, and Rep. Ron Johnson, R-Sylacauga, prohibits forum shopping of wrongful death actions by requiring that such lawsuits be brought only in the county where the deceased could have filed suit. "You can't venue shop anymore," the governor said. "Changing this was very important to industry recruitment in certain counties."

Act No. 2011-629, sponsored by Brooks and Rep. Steve McMillan, R-Bay Minette, means Alabama courts will now apply a stricter standard for determining whether to admit scientific expert testimony.

Act No. 2011-521 by Sen. Cam Ward, R-Alabaster and Rep. Greg Canfield, R-Vestavia Hills, changes the rate of interest on judgments in Alabama from 12 percent to 7.5 percent. The Southeast average is 8 percent.

The Alabama Civil Justice Reform Committee (ACJRC) and the Alabama Retail Association as a member of that coalition have sought all of these reforms since 1999, the last time the Legislature addressed tort reform. The Legislature first passed a tort-reform package in 1989. Bentley praised the entire package of bills as job creators.

Retailers and other businesses can now charge a late fee of $18 or 5 percent of the scheduled payment up to $100 on all consumer credit transactions that have been delinquent for 10 days or more. Since 2007, the Alabama Retail Association and the Alabama Consumer Finance Association have sought this modest $8 increase in the minimum late fee contained in Act No. 2011-529, sponsored by Rep. Craig Ford, D-Gadsden, and Sen. Gerald Dial, R-Lineville.

An Alabama Retail Association representative will be one of the eight members of the Alabama Streamlined Sales and Use Tax Commission, which will research Alabama's current sales and use tax laws to identify necessary changes to bring the state into compliance with the federal Streamlined Sales and Use Tax Agreement. The federal agreement, already adopted by 24 states, establishes uniform definitions of taxable items, sets up a system to collect and distribute sales taxes across state lines and provides retailers with software and free databases to tell them how much tax to charge. The commission will help Alabama get ready to join the agreement if the federal proposal becomes law. ARA thanks the Association of County Commissions of Alabama for pushing Act No. 2011-563 by Rep. Mike Hill, R-Columbiana.

>> Read more about the Streamlined Sales Tax Initiative

Starting with 2011 tax returns, businesses with 24 or fewer employees and their employees who earn $50,000 or less can double the amount they pay out for health insurance and deduct it from their 2011 income tax returns. The Business Associations' Tax Coalition, which includes ARA, advocated for this change for the past four years. Act No. 2011-155 by Rep. April Weaver, R-Brierfield, and Sen. Greg Reed, R-Jasper, became law April 21. More than 90 percent of ARA members employ fewer than 25 employees and qualify for this increased deduction if they offer group health insurance.

Senators were debating HB 548 by Rep. Jay Love, R-Montgomery, when it adjourned sine die at midnight Thursday. Love's bill would have fixed an inequity in the tax code regarding gross income taxes for pass-through entities, such as partnerships, limited partnerships, limited liability companies and S corporation. Senate President Pro Tem Del Marsh, R-Anniston, sponsored the Senate companion. BATC and ARA supported Love's and Marsh's legislation as a fairer solution than a regulation change proposed by the Alabama Revenue Department. The Revenue Department regulation now will go before the Legislative Council for review. ARA will keep you informed as the regulation develops.

Also on the final special order Senate calendar was HB 427 by Rep. Paul DeMarco, R-Homewood, also known as the Alabama Taxpayers' Bill of Rights II. It would have created an independent and qualified tax appeals court in Alabama and made needed changes in the tax appeals process. Sen. Ben Brooks, R-Mobile, sponsored the Senate companion. The Business Associations' Tax Coalition, a 29-member business trade association group that ARA President Rick Brown chairs, the Alabama Society of Certified Public Accountants, the Alabama Bar Association and the Council on State Taxation among others supported this legislation.

Senate Rules Chairman Scott Beason, R-Gardendale, stood firm in his refusal to place the consumer use tax notification bill, HB 365 by Rep. Jamie Ison, R-Mobile, on the Senate calendar. HB 365 would have educated Alabama consumers about taxes due when they buy goods over the Internet, by phone or by catalogue and taken the first step toward ending the sales tax advantage of large online retailers. Internet sellers lose their "no-tax advantage" once consumers realize a tax is due. This legislation was part of the ARA's 2011 Legislative Agenda.

Act No. 2011-551 by Rep. Blaine Galliher, R-Gadsden, and Sen. Arthur Orr, R-Decatur, provides a one-time, $1,000 income tax credit for each new $10 or more per hour job created by businesses with 50 or fewer employees. The credit can be applied after the employee has worked for a business for 12 consecutive months. The Full Employment Act of 2011 is an enhanced version of the Reemployment Act of 2010, which Gov. Robert Bentley sponsored as a legislator.

Act No. 2011-616 by Rep. Jay Love, R-Montgomery, doubles the weight given to the sales portion of income when multi-state corporations compute net income tax. The law also amends the sales factor so that sales of services and other sales of intangible property as well as income made from trademark and copyright royalties are sourced to Alabama if the taxpayer's market for the sales or royalty is in Alabama. Multi-state corporations doing business inside and outside of Alabama source their income based on a three-factor formula: property, payroll and sales. Now, the more payroll and property a company has in Alabama relative to its sales, the less tax the company will pay to Alabama. This legislation is expected to net about $25 million for the state's Education Trust Fund.

Act No. 2011-535, titled the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, imposes additional burdens
on Alabama employers in regards to hiring and contracts. The Alabama Employers for Immigration Reform, which includes the Alabama Retail Association, sought amendments throughout the process to lessen the burden on retailers and other employers. Despite those efforts, the 71-page law contains several troublesome provisions.

For instance, the law requires any business with government contracts, grants or incentives, to obtain notarized affidavits from subcontractors stating that the subcontractors do not employ any unauthorized aliens. If construed to include suppliers, this requirement will burden many retailers with a great deal of additional paperwork. Retailers that have received government incentives to locate in the state or certain communities, pharmacies and other medical-related retailers with Medicaid contracts and grocers that accept Women, Infant and Children (WIC) funds, may be among those subject to this provision.

The House sponsor, Rep. Micky Hammon, R-Decatur, contends the bill is written so that if any part of it is determined to be unconstitutional or violate federal law, the rest will stand.

ARA and ALEIR will provide input into any regulations and compliance issues that arise out of this new law, and provide ARA members with some practical guidance related to compliance as the law's provisions become effective.

On a 24-9 vote Thursday, the Alabama Senate approved HB 60 by Rep. Blaine Galliher, R-Gadsden, a proposed constitutional amendment to prohibit mandatory participation in any health care system. The governor signed the bill immediately (Act No. 2011-617), but to become Alabama law, the constitutional amendment must be approved by Alabama voters in the next statewide election. Sen. Scott Beason, R-Gardendale, sponsored the companion legislation.

The 2010 federal health care reform law requires individuals to obtain health insurance starting in 2014. In a related action,
11th Circuit Court of Appeals Chief Judge Joel Dubina of Alabama along with U.S. Circuit Judges Frank Hull of Georgia and Stanley Marcus of Florida heard oral arguments Wednesday from Alabama and 25 other states urging the appeals court to uphold a federal judge's ruling that the federal healthcare overhaul's core requirement mandating health insurance is unconstitutional.

The Alabama Board of Pharmacy can now set up protocols so retail pharmacies can re-label and store certain prescription drugs for patients who live in residential care facilities without an on-site pharmacy. Act No. 2011-520 by Sen. Billy Beasley, D-Clayton, and Rep. Ron Johnson, R-Sylacauga, was signed into law Thursday.

On the final legislative day, the House of Representatives gave the final OK to SB 113 by Sen. Arthur Orr, R-Decatur, which authorizes the Alabama Department of Corrections to accept and re-dispense unused prescription medications. This bill is on the governor's desk.

The Alabama Senate voted 23-7 Thursday for HB 64 by Rep. Kurt Wallace, R-Maplesville, which would guarantee elections by secret ballot, including union organization. The House voted 63-31 for the bill in the second week of the session. The governor immediately signed the bill into law (Act No. 2011-656). This legislation came in response to proposed federal legislation pushed by labor unions to force employees to forego secret ballots in union representation elections. Sen. Greg Reed, R-Jasper, told the Gadsden Times, "Maintaining privacy in the voting process allows Alabama's citizens to vote their conscience and be protected from retribution or abuse from outside forces trying to manipulate the system."

The governor signed Act No. 2011-548 by Rep. Ken Johnson, R-Moulton, and Sen. Gerald Allen, R-Tuscaloosa, into law Thursday. It bans local food nutrition labeling laws, thus preventing Alabama from having a patchwork of local labeling laws and saving small restaurants from unnecessary and costly regulation. ARA supported the efforts of the Alabama Restaurant Association to pass this legislation.

The governor signed several bills related to alcohol sales into law Thursday, joining those that became law earlier in the session.

Under the Brewery Modernization Act, Act No. 2011-630 by Sen. Bill Holtzclaw, R-Madison, and Rep. Joe Hubbard, D-Montgomery, brewpubs can now sell up to 10,000 barrels of draft beer annually on premise or to a distributor. The new law allows brewpubs to sell though wholesalers, who can package and supply the product to restaurants and grocery stories. The bill also allows breweries to operate tap or tasting rooms. Brewpubs must be in an historic building or an historic district or in areas locally designated as "economically distressed." The annual license fee is $1,000.

Gov. Robert Bentley signed the session's sixth draft beer authorization Thursday. Under Act No. 2011-659 by Rep. Lesley Vance, R-Phenix City, the Russell County Commission can authorize properly licensed retailers to sell draft beer in the unincorporated areas of the county. The new law also would allow alcoholic beverages to be sold after 1 p.m. on Sundays in Russell County.

Once the Athens City Council gives the go ahead, the citizens of Athens will be able to buy draft beer. Act No. 2011-292 by Sen. Bill Holtzclaw, R-Madison, which was signed into law May 31, and Act No. 2011-262 by Rep. Dan Williams, R-Athens, which became law May 25, allow the council to adopt an ordinance regulating draft or keg beer.

Act No. 2011-251 by Rep. Bill Roberts, R-Jasper, gave the Jasper City Council authority to decide if draft beer sales will be allowed in that municipality. The council was expected to vote on the issue at its meeting today.

Act No. 2011-119 and Act No. 2011-118 by Rep. Steve Clouse, R-Ozark, authorize Daleville and Ozark to call referendums to allow draft beer sales at the next general election.

At least one draft beer bill died this session: SB 430 by Sen. Bryan Taylor, R-Prattville, which would have authorized the Prattville City Council to OK on-premise sales of draft beer, got as far as a House local legislation committee.

Voters in unincorporated Tuscaloosa County will follow the cities of Tuscaloosa and Northport in voting on Sunday alcohol sales. Act No. 2011-600 by Rep. Alan Harper, D-Aliceville, gives the Tuscaloosa County Commission 30 days from Thursday (the day the governor signed the law) to set a date for the referendum. The commission's next meeting is set for June 15.

Act No. 2011-120, also by Harper, calls for a Sunday alcohol sales referendum in Northport. The Northport City Council has set the referendum for Aug. 23. If voters approve the referendum, alcohol sales would be permitted there from noon to 9:30 p.m. Sundays.

Thursday, the governor let HB 587 by Rep. Lynn Greer, R-Rogersville, become law (Act. No. 2011-663) without his signature. It allows the St. Florian City Council to authorize Sunday sales in the Lauderdale County town.

On June 1, the Senate indefinitely postponed SB 518 by Sen. Bobby Singleton, D-Greensboro, which would have authorized a Sunday sales referendum in the city of York in Sumter County. Not enough time remained in the session for the bill to complete the legislative process.

Thursday, the governor signed into law legislation that will keep Alabama from losing federal funding for 20 extra weeks of unemployment benefits. Act No. 2011-564 by Rep. Jack Williams, R-Birmingham, makes a technical change in the formula for determining if Alabama qualifies for the 20 weeks of unemployment benefits, which are totally funded by the federal government and have no bearing on the unemployment compensation tax rate for employers, according to the Alabama Department of Industrial Relations. Unemployed Alabamians can continue to qualify for up to 99 weeks of unemployment benefits through the employer-funded Alabama Unemployment Compensation Trust Fund and extended benefits funded federally. The formula change applies only through Dec. 31, which is when the extended federal benefits run out.

Early in the 2011 session, the Rolling Reserve Budget Act, Act No. 2011-003, became law and ended the practice of basing Alabama's education budget on tax revenue forecasts. Instead, the budget will be based primarily on revenue trends for the past 15 years. In years when tax collections grow faster than historic trends, the extra money will be saved and used to stabilize spending in lean years. The new law by Rep. Greg Canfield, R-Vestavia Hills, and Sen. Tripp Pittman, R-Daphne, does not eliminate prorated budgets, but should make that possibility less frequent.

>> Read the Alabama Public Safety & Sentencing Coalition report

ARA was able to amend SB 204 by Sen. President Pro Tem Del Marsh, R-Anniston, and HB 218 by Rep. Rod Scott, D-Fairfield, which originally called for a 100 percent increase in the felony shoplifting threshold to maintain the current felony shoplifting threshold of $500. Those bills also called for a 1,000 percent increase in the value of property that qualifies as organized retail theft. The Senate bill never made it to the full Senate and the House bill never came out of committee.

ARA thanks the sponsors and Sen. Cam Ward, R-Alabaster, for their willingness to negotiate this legislation. We also thank Chad Tice, corporate vice president of loss prevention for Books-A-Million Inc., one of the nation's largest book retailers and an ARA member since 1984, who testified at the public hearing on the bills. ARA most of all thanks the ARA members who called, e-mailed or wrote their lawmakers about maintaining current laws and punishments for retail theft.

>> Read Tice's full testimony

ARA strongly opposed several bills that would have made ephedrine/ pseudoephedrine products controlled substances in Alabama, including SB 88 by Sen. Roger Bedford, D-Russellville. None of the bills made it out of committee. ARA supports an electronic tracking system for the legal products commonly used in the illegal manufacture of methamphetamines, which Alabama enacted last year. Making these products available by prescription only would limit cold and allergy sufferers' access to medicine they need daily and drive up costs by as much as 50 percent.

HB 301 by Rep. Richard Lindsey, D-Roanoke, and SB 352 by Sen. Bobby Singleton, D-Greensboro, would have required corporations to follow a set of unitary combined reporting rules when calculating their Alabama income taxes. Opposition to required unitary combined reporting for corporate taxpayers was part of ARA's 2011 Legislative Agenda.

HB 300 by Lindsey and SB 351 by Sen. Marc Keahey, D-Grove Hill, would have decoupled Alabama from the federal depreciation schedule, preventing Alabama businesses from taking advantage of the bonus depreciation offered in the federal Tax Relief, Unemployment Insurance Reauthorization & Job Creation Act of 2010. ARA opposed this bill.

The Alabama Senate carried over and never returned to SB 46 by Sen. Cam Ward, R-Alabaster, which would have given healthcare providers the right to refuse to perform or participate in healthcare services that violate their conscience. The House Health Committee carried over and then couldn't get enough members to attend a meeting to consider the House companion, HB 178 by Rep. Mary Sue McClurkin, R-Indian Springs. ARA contends resolving the dilemma of how to make certain a patient has access to appropriate drug therapy as determined by their prescribing practitioner, while allowing pharmacists to follow their conscience, is complex and should be independent of governmental mandates.

Two bills related to rebates died in the 2011 session. SB 104 by Sen. Linda Coleman, D-Birmingham, which would have mandated the time period for customers to send in rebate materials and for issuers to provide the rebate, died in a House committee. SB 30, also by Coleman, would have classified advertising manufacturer's rebates without providing the rebate to the consumer at the time of purchase as a deceptive trade practice. It never made it out of committee.

Committee approval is as far as HB 555 by Rep Mike Ball, R-Huntsville, got. It would have required anyone who serves, dispenses or provides alcoholic beverages at any licensed, on-premise liquor location to register with the state and to obtain a $35 server ID card for four years.

SB 381 by Sen. Quinton Ross, D-Montgomery, would have kept findings of fact made under unemployment compensation statutes from consideration as evidence in other proceedings.

SB 384 by Sen. Vivian Figures, D-Mobile, and HB 380 by Rep. Laura Hall, D-Huntsville, would have created an Equal Pay Commission to study wage disparities and report its findings and recommendations to the House speaker, governor and Alabama Legislature. The ultimate result of this legislation could have been exposure to regulations and laws broader than those required by the federal government.

HB 457 by Rep. Patricia Todd, D-Birmingham, would have raised the state tax on cigarettes from 42.5 cents per pack to $1.42.5 cents per pack. ARA continues to support comprehensive tax reform over patchwork tax policy.

The Common Sense Consumption Act, HB 193 by Rep. Mike Jones, R-Andalusia, would have protected retailers from civil action brought by those who claim the food sold by retailers made them obese. The only step between this bill and final passage was Senate passage. It came up on the Senate calendar June 2, was carried over at the call of the chair and never came back up for consideration. Sen. Gerald Allen, R-Tuscaloosa, sponsored the Senate companion. ARA supported this legislation being pushed by the Alabama Restaurant Association.

HB 313 by Rep. DuWayne Bridges, R-Valley, would have regulated Alabama residents' power to put a security freeze on their credit report. It would have prohibited a credit reporting agency from releasing a credit report or score to a third party without the explicit consent of the consumer. The bill incorporated ARA requested changes and would have provided free credit freezes for senior citizens. It never made it onto a Senate special order for consideration.

HB 312 by Rep. Mike Millican, R-Hamilton, and SB 438 by Sen. Del Marsh, R-Anniston, would have regulated E-911 services and fees. Under this legislation, retailers, rather than carriers, would have collected the E-911 fees for prepaid wireless communications services at the point of sale. ARA negotiated a provision that would have allowed the retailer to deduct and retain four percent of the prepaid wireless 911 charges collected from consumers to cover the retailer's expenses for collecting and remitting the fees, along with sales taxes, to the Alabama Revenue Department. The House approved HB 312 on a vote of 85-13 on June 1, but that is as far as the bill got.

SB 254 by Sen. Bryan Taylor, R-Prattville, would have exempted many of the state's smallest businesses from having to estimate and remit their sales tax obligations on a monthly basis. Taylor's bill would have raised the threshold at which a retailer is responsible for making estimated monthly payments to the Alabama Revenue Department to $2,500. It received committee approval but did not make it to floor debate.

SB 272 by Sen. Billy Beasley, D-Clayton, and HB 303 by Rep. Ron Johnson, R-Sylacauga, would have exempted prescriptions from business licenses taxes based on gross receipts. Both bills received committee approval but neither made it on a calendar.

HB 217 by Rep. Mike Millican, R-Hamilton, would have required the Alabama Medicaid Agency to establish a competitive bid process for generic drug manufacturers to assure that generic drugs were furnished to Medicaid recipients at a competitively bid low cost. It never even received committee consideration.

SB 515 by Sen. Arthur Orr, R-Decatur, would have given certain Alabama Medicaid providers a one-year-only income tax deduction of 10 percent on Medicaid payments in excess of $10,000. This bill was intended to alleviate some of the burden placed on Medicaid providers because of state budgetary constraints. The Senate approved the bill 30-0 on May 31 and the House Ways and Means Committee amended it on June 1, but it did not come up for a House vote.

SB 152 by Sen. Paul Bussman, R-Cullman, would have given businesses that employ fewer than 100 people property tax exemptions to expand or locate in Alabama. The Senate approved it 30-0 on April 5.

SB 50 by Sen. Cam Ward, R-Alabaster, would have provided tax credits for qualifying companies for job creation, depending on the amount of jobs, the wages paid and the county in which the jobs were located.It received committee approval but did not make it to a floor vote.

HB 117 by Rep. Thad McClammy, D-Montgomery, would have allowed Class 3 municipalities to provide income tax credits for businesses hiring those under the age of 19. The House OK'd it 90-0 on March 31 and it received Senate committee approval on April 26, but it never made it to the Senate for debate.

HB 17 by Rep. James Buskey, D-Mobile, would have allowed cities with populations of more than 25,000 to create entertainment districts where patrons could walk from establishment to establishment. All it lacked was Senate OK.

HB 402 by Rep. Mike Jones, R-Andalusia, would have done away with an outdated law that prohibits working at more than one business that sells alcoholic beverages. The bill received full House and Senate committee approval.

HB 281 by Rep. Bill Roberts, R-Jasper, would have allowed cities to schedule a wet/dry referendum at any time, rather than having to wait for a regularly scheduled election. It received committee approval but never reached the full House.

For the fourth year, Rep. John Knight, D-Montgomery, introduced a state constitutional amendment to remove the 4 percent state sales tax from groceries state by reducing the income tax deduction for federal income taxes paid. HB 242/HB 380 also would have exempted over-the-counter drugs from sales tax. SB 363 by Sen. Hank Sanders, D-Selma, was similar. None of the bills ever received committee consideration.

SB 109 by Sen. Arthur Orr, R-Decatur, would have given county or city officials the authority to exempt food, as defined by the Federal Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) or as defined by the county commission or municipal governing body, from their local sales taxes. In many areas of the state this would have reduced sales taxes by as much as 6 percent. It received committee approval but not Senate consideration.

HB 505 by Rep. Alan Harper, D-Aliceville, would have set a one-time, $100 filing fee and a $250 annual licensing fee for tobacco product retailers. There are no fees associated with a retail tobacco license. A committee never even heard the bill.

HB 461 by Rep. Harry Shiver, R-Bay Minette, would have banned obscuring, removing, or otherwise rendering illegible any product information on food or beverage labels and prohibited storing, transporting or selling any food or beverage without a label or with a label that has been obscured, removed or otherwise rendered illegible. It received committee approval but never received a floor vote.

HB 520 by Rep. Mike Hill, R-Columbiana, would have more than doubled liquor license fees and impose the first increase in these fees in 30 years.

HB 498 by Rep. Lesley Vance, R-Phenix City, would have doubled the application filing fee for an alcoholic beverage license from $50 to $100.

HB 499 by Rep. Alan Boothe, R-Troy, would have changed the timing for alcohol license renewals. The bill sought to have licenses renewed between June 1 and July 31, while increasing the fee for late filing from 50 percent to 75 percent of the license fee. It also would have allowed the Alabama Alcoholic Beverage Control Board to setup an online renewal process and charge a "reasonable fee."