April 19, 2013
Independent Tax Court on Way to Final OK
Senate Next to Consider Taxpayers' Bill of Rights
Without debate, the Senate Fiscal Responsibility and Accountability Committee on Thursday approved landmark legislation to centralize Alabama's tax appeal process and make that process independent of the taxing authorities. HB 264 by Rep. Paul DeMarco, R-Homewood, which the House approved earlier this month, now goes to the full Senate for final consideration with only eight legislative days remaining in the 2013 regular session. The Senate companion, SB 223 by Sen. Bryan Taylor, R-Prattville, has been ready for consideration by the full Senate since March 13.
The agreed-on revision of the Alabama Taxpayers' Bill of Rights II is part of ARA's 2013 Legislative Agenda and has the support of 25 other members of the Business Associations' Tax Coalition (BATC), a business trade association coalition chaired by Alabama Retail President Rick Brown.
This legislation shifts the appropriation, personnel, equipment and tax appeal functions of the Administrative Law Division of the Revenue Department to the created Alabama Tax Appeals Commission, aligning Alabama with the vast majority of states that have an independent tax appeals process for businesses and individuals. Businesses that cross multiple jurisdictions would be able to use one process for appealing tax assessments rather than having to use a different process for every city and county involved.
>> Read BATC summary of TBOR II
Medicaid Reform Gets Committee Approval;
Headed to House and Senate
Wednesday, both of the Alabama Legislature's Health committees passed and amended substitute versions of a plan to alter Medicaid's structure and delivery in our state. HB 454 by Rep. Jim McClendon, R-Springville, and SB 340 by Sen. Greg Reed, R-Jasper, now move to their respective chambers for consideration. The House bill is on the special order calendar for Tuesday.
The House Health Committee added two amendments, while the Senate Health Committee added the same two, a typographical error and another that removed a provision that would have made managed care immune from provider cuts. The Senate committee also added a third amendment related to long-term care.
The legislation would eliminate the current "fee-for-service" model and replace it with a per-participant, or capitated model, of payment.
It authorizes the Alabama Medicaid Agency to divide the state into as many as eight regions, each capable of supporting at least two risk-bearing regional care organizations. Those organizations will provide healthcare to about half of Alabama's Medicaid patients.
"The way we grade (a regional care organization) will be based on outcomes, not volume and not visits," State Health Officer Don Williamson (pictured) told the House committee. Currently, Alabama Medicaid patients use hospitals as their care source 17 percent more than they should and visit clinics 12 percent less often than the national average, he said.
He said nothing in the legislation would "cut reimbursements to providers," although provider cuts are planned to balance the Medicaid budget over the next two years.
Other Medicaid Reforms on House's Tuesday Calendar
The House has set a General Fund budget agenda for Tuesday that includes a package of bills by Rep. Greg Wren, R-Montgomery, which are aimed at further reforming Medicaid:
HB 370 would put a cap on how many General Fund dollars go toward Medicaid each year. The initial 10-year cap, which would begin in the 2017 fiscal year, would be a negative 1 percent growth in the Medicaid appropriation for 2016. The cap would be adjusted annually by the percentage growth in the U.S. healthcare inflation rate minus 1 percent. The measure does not forbid spending increases because of enrollment growth, lower provider assessments, unfunded federal mandates or changes to the federal Medicaid matching rate.
HB 371 would require the Alabama Medicaid Agency to seek a waiver from the Centers for Medicare and Medicaid Services so Alabama can increase the co-payments Medicaid patients pay for health care services beginning Jan. 1, 2014, or sooner if CMS approves the waiver. The Legislative Fiscal Office estimates the co-payment change would save the state about $700,000 in 2014.
HB 372 abolishes the Legislature's Medicaid Joint Interim Committee and the Permanent Joint Legislative Committees on Medicaid Policy and creates the Permanent Joint Medicaid Committee. It also would create a Medicaid Advisory Council.
Senate Panel Alters House-Passed Medicaid Fraud Bill
On a vote of 7-1 Wednesday, the Senate Finance and Taxation General Fund Committee amended and then approved HB 110 by Rep. Jim McClendon, R-Springville, sending it to the full Senate for consideration. The bill enumerates what qualifies as Medicaid fraud and increases the statute of limitations for Medicaid fraud from three to five years. The committee changed the bill to emphasize that violators must have the intent to defraud or deceive to be guilty under the bill and removed appropriations to the attorney general to enforce the act.
The legislation is aimed at individuals who defraud Medicaid by submitting false claims, as well as doctors and corporations that commit Medicaid fraud. Medicaid providers guilty of fraud, regardless of the amount, will be banned from Medicaid programs for at least three years, under this proposal. Any individual or provider who fails to keep required records or who knowingly destroys the records within five years from the payment date would be guilty of a Class A misdemeanor under this bill. Pharmacies and physicians have to retain Medicaid patient records for seven years and Part D patients for 10 years. The bill is part of the "We Dare Defend Our Rights" Agenda being advanced by the House Republican Caucus.
House to Consider General Fund Budget Next Week
The House Ways and Means General Fund Committee on Wednesday approved a substituted and amended version of the state's general operating budget. The Alabama Senate had approved the budget last month. Even if the House approves the $1.75 billion budget as is, it will have to be returned to the Senate for concurrence in the House committee changes. The budget is on a 12-item agenda slated for action in the House Tuesday. All 12 bills are budget related.
Included in the flat $615.1 million appropriation for the Alabama Medicaid Agency are parameters for prescribing and paying for prescription drugs, including a ban against the agency paying for a generic drug that is more expensive than its brand name drug net of rebates. The budget allows for no more than five brand name drugs per Medicaid patient. The third and subsequent brand drugs provided for a Medicaid patient requires prior authorization by the agency.
RED TAPE REDUCTION
Law Now Requires Less Red Tape
Gov. Robert Bentley has signed into law the Red Tape Reduction Act, Act 2013-88, by Rep. April Weaver, R-Brierfield. HB 101 as enacted requires any state agency that receives a complaint that a regulation might negatively impact business to file a business economic impact statement with the Joint Committee on Administrative Regulation Review or its successor committee prior to a proposed regulation's adoption. The bill also requires all existing rules and regulations to be reviewed every five years. As of July 1, agencies will be required to post information related to proposed and existing regulation reviews on their websites. Emergency rules are exempt from the provisions of this new law. It also requires state agencies as of July 1 to fulfill license or permit requests within 28 calendar days or notify the applicant as to why the license or permit has not been granted.
Senate Panel Votes to Remove Sales Tax
on Food and Increase Sales Tax on All Other Goods
The Senate Finance and Taxation Education Committee on Wednesday approved SB 279 by Sen. Gerald Dial, R-Lineville, which would increase the state sales tax on all items besides food by a quarter of a percent each year while lowering the sales tax on food by 1 percent each year over the next four years. By Sept. 1, 2016, the state sales tax would reach 5 percent and the state sales tax on food would be zero, under Dial's bill, which now goes to the full Senate for consideration.
"It's time for Alabama to take action to remove the tax on food," Dial told the committee. While Dial said he tried to make the bill revenue neutral, the Legislative Fiscal Office estimates the bill would increase sales tax receipts by $70 million annually after full implementation. Dial's bill requires lawmakers to adjust the plan in 2017, if necessary, to ensure it is revenue neutral. Opponents argued removing the state sales tax on food and increasing the sales tax on other items would be "replacing one regressive tax with another regressive tax."
The bill uses the same definition of food as is used in the federal Supplemental Nutrition Assistance Program (SNAP).
Committees Give OK to Bills that Lessen
Business Personal Property Tax Burden
Senate committees acted this week on two bills by Sen. Shadrack McGill, R-Woodville, which would lessen retailers and other businesses obligations in regards to business personal property. Both bills are now ready for consideration by the full Senate.
The Senate Fiscal Responsibility and Accountability Committee on Thursday approved SB 281, which instructs the Alabama Department of Revenue to recalculate the composite factors for business personal property so that no property tax eventually would be due on business equipment and furniture.
The Senate Finance and Taxation General Fund Committee on Wednesday unanimously approved SB 415, which would exempt any tangible taxable assets that originally cost $250 or less from property taxes. "This is a simple bill dealing with business personal property tax," McGill told the committee. Meanwhile, Rep. Wes Long, R-Guntersville, introduced the House companion, HB 624. Long's bill has been assigned to the House Commerce and Small Business Committee.
Taylor Proposes Adding Band
Instruments to August Sales Tax Holiday
Sen. Bryan Taylor, R-Prattville, introduced legislation this week that would add school band instruments valued at $500 or less to the state's August back-to-school sales tax holiday. Alabama's eighth annual sales tax holiday for school-related items begins at 12:01 a.m. Friday, Aug. 2, and ends at midnight Sunday Aug. 4, giving shoppers the opportunity to purchase certain school supplies, computers, books and clothing free of state's four percent sales or use tax. SB 447 adding band instruments to the list of exempt items has been referred to the Senate Committee on Finance and Taxation Education.
Alabama Retail Analyzing Workers' Comp Reform Bill
Thursday, Alabama Senate President Pro Tem Del Marsh, R-Anniston, introduced comprehensive workers' compensation reform legislation. The Alabama Retail Association is analyzing SB 453, which has been assigned to the Senate Business and Labor Committee. The Alabama Legislature has completed more than two-thirds of its 30-day regular session. Only eight legislative days remain in the session.
House OKs More Than Doubling Possible
Burial Expenses Paid by Workers' Comp
Tuesday, the Alabama House unanimously approved HB 461 by Rep. Rod Scott, D-Fairfield, which increases the possible burial expenses a workers' compensation claim can pay by $3,500. If a covered employee dies as a result of an employment-related accident or occupational disease, the expenses paid by the employer currently are not to exceed $3,000. The bill would require the employer to pay up to $6,500. Scott told House members that the average burial cost in Alabama is $9,000.
Panel OKs Workers' Comp Exemption for LLC Members
Thursday, the Senate Business and Labor Committee approved SB 431 by Sen. Bryan Taylor, R-Prattville, which would allow members of a limited liability company to exempt themselves from Alabama Workers' Compensation Act coverage on a year-by-year basis. Corporate officers already have that option. The bill also removes the requirement that written notification be given to the Department of Labor of the exemption. The only notification required under the bill is to the employer's insurance carrier. The bill now awaits consideration by the full Senate.
WEIGHTS AND MEASURES
House Approves Weights, Measures Inspection Bill
On a vote of 73-23-1, Tuesday, the House approved HB 357 by Rep. Paul Lee, R-Dothan, which would allow merchants to use certified inspectors to ensure equipment to weigh and measure is working properly. The registered service agents then would submit inspection reports to a central database accessible to the Alabama Department of Agriculture and Industries. Like its Senate counterpart, SB 261 by Sen. Billy Beasley, D-Clayton, the bill would govern the inspection process for weights and measures for grocery stores, drug stores, filling stations, pawnshops, farms and even coal operations, Agriculture Commissioner John McMillan told legislators. The Senate Agriculture, Conservation and Forestry Committee has scheduled a public hearing on the House-passed bill for its Wednesday meeting. Beasley's bill is ready for Senate consideration.
Under the legislation, any individual or company that services, repairs, or reconditions weighing or measuring devices and registers with the Agriculture and Industries Commissioner could be a service agent. Budget cuts have reduced the number of department weights and measures inspectors from 28 to just five, while there are some 2,000 registered service agents in the state. "Owner/operators are already responsible for the accuracy of their devices," McMillan said. The department will develop rules for inspections and provide decals that the registered service agents will be required to place conspicuously on devices that pass their inspections.
Jobless Benefit Increase Gets House Approval
On a vote of 54-33-6, the Alabama House on Thursday approved HB 539 by Rep. Pebblin Warren, D-Tuskegee, which would increase the maximum weekly jobless benefit in Alabama by $20 by 2014. The Alabama Department of Labor estimates the increase could mean at the most a $3.60 per employee increase in unemployment taxes paid by certain employers. The bill now awaits consideration by the Senate Business and Labor Committee.
The maximum weekly jobless benefit in Alabama is $265. Warren's bill would increase that amount to $275 beginning July 5 of this year and to $285 beginning July 5, 2014.
The increase in the maximum benefit will affect employers who have laid off employees who had been earning about $15 or more an hour and had been working 40 hours a week for more than 13 weeks when they became unemployed, according to the Alabama Labor Department. Unemployment compensation taxes are individual to each business based on a formula that takes into account wages paid; the amount of unemployment among current and former employees; the average duration and cost of unemployment benefits paid to all claimants over a three-year period; as well as shared costs. Warren's bill does nothing to change that formula.
House to Get Final Say on Bill to Penalize Late or Inadequate Responses to Unemployment Inquiries
Wednesday, the House Commerce and Small Business Committee approved SB 201 by Sen. Paul Bussman, R-Cullman, under which an employer's failure to respond promptly or adequately to the state when questioned about an unemployment claim could result in any consequent overpayment of claims being charged against the employers' account. Employers who have failed to respond in a timely fashion or adequately two or more times could see a decline in their unemployment compensation account, under this bill. The Alabama Senate approved the bill April 10. It now goes to the full House for final approval.
House Gives Final OK to Draft Beer in New Brockton
On a vote of 19-0-2, the Alabama Senate gave final approval Thursday to a bill to allow the New Brockton City Council to authorize draft beer sales in that city. If the council passes a draft beer ordinance, New Brockton will become the only municipality in Coffee County to allow draft beer sales. HB 294 by Rep. Barry Moore, R-Enterprise, has gone to the governor for his signature.
Off-Premise License for Breweries Headed to House
Wednesday, the House Economic Development and Tourism Committee OK'd legislation that would create an off-premises liquor license for breweries and brewpubs. HB 530 Rep. Barry Mask, R-Wetumpka, would create an additional $1,000 annual liquor license, which would allow brew pubs to sell the beer they produce in bottles or cans for off-premise consumption. It limits the amount that can be produced for off-premise consumption to 25,000 barrels annually. If the bill becomes law, brewers would be able to sell directly to customers without going through a distributor. The bill now goes to the full House for consideration.
Senate to be Final Test for Home Brewing
By a one-vote margin, the Senate Job Creation and Economic Development Committee voted Wednesday to legalize home brewing in Alabama, sending HB 9 by Rep. Mac McCutcheon, R- Huntsville, to the Senate for final approval. The House of Representatives approved the bill on a vote of 58-33 earlier this month. A home brew bill died in the Senate on the final day of the 2012 regular session.
McCutcheon's bill would allow home brewers to make up to 15 gallons of beer, cider and wine every three months as long their homemade spirits are not offered for sale. A similar Senate bill, SB 171 by Sen. Bill Holtzclaw, R-Decatur, also awaits consideration by the full Senate.
Panel OKs Bill to Allow Incorporated
Golf Communities to Stay Wet
Tuesday, the Senate Governmental Affairs Committee approved SB 390 by Sen. Marc Keahey, D-Grove Hill, which would allow the state's community development districts, which include qualifying golf and marina developments, to remain wet if the district already has the authority to sell alcohol and becomes a municipality, even if the newly incorporated city doesn't have the 1,000 residents required by state law to be a wet municipality. According to testimony during the committee meeting, there are seven community development districts in the state and one that is considering becoming a municipality. On Wednesday, April 10, the House Economic Development and Tourism Committee approved the House companion, HB 549 by Rep. Jim Barton, R-Mobile. Both bills are now ready for consideration by their respective chambers.
Senate to Get Final Say on Bill to Allow
Pharmacists to Destroy Outdated or Unused Drugs
HB 237 by Rep. Elaine Beech, D-Chatom, which would allow pharmacies in Alabama to accept unused or expired dispensed medications for destruction, is headed to the Senate for final approval. The Senate Health Committee approved the bill Wednesday. Current law forbids pharmacists from paying refunds for unused prescription drugs. This bill would allow pharmacists to accept unused drugs for the purposes of destruction only. Chatom is a retired pharmacist. The Alabama House unanimously approved the bill Wednesday, April 10.
Drug Database Reform with Pharmacist
Protection Headed to Senate for Final OK
Wednesday, the Senate Judiciary Committee unanimously approved HB 150, the Controlled Substances Prescription Database reform bill by Rep. Jim McClendon, R-Springville, sending it to the full Senate for final consideration. The bill is part of a three-bill package to further regulate the sale and use of controlled substances as prescription drugs. At the request of the Alabama Retail Association, HB 150 and its Senate companion, SB 115 by Sen. Cam Ward, R-Alabaster, protect pharmacists from liability by retaining current law, which states pharmacists are not obligated to check the database every time they fill a prescription for controlled substances. No state mandates that pharmacists consult the database before dispensing drugs.
The legislation changes the makeup of the Controlled Substances Prescription Database Advisory Committee, allows for committee teleconferencing and video conferencing and tweaks who has access to the database. Another provision calls for adding the method of payment and the third-party payer identification to the information included in the database. The Senate bill also is ready for consideration by the full Senate.
House Judy OKs LLC Reform
The House Judiciary Committee on Wednesday amended and approved HB 531, or the Uniform Alabama Limited Liability Company Law, by Rep. Paul DeMarco, R-Homewood, which would replace the current limited liability company law. It now goes to the full House for consideration.
The bill focuses on the contractual nature of LLCs and has few mandatory features. The bill, however, does say the implied contractual covenant of good faith and fair dealing cannot be modified. The bill also acknowledges that LLCs can be used for purposes other than operation of a business.
>> Summary of HB 531
Bill Would Protect State from Innovator Liability Suits
Rep. Jack Williams, R-Birmingham, this week introduced legislation he says is aimed at preventing brand-name manufacturers from being sued by consumers who use a generic version of their product made by a different company. HB 617 is in response to a January decision by the Alabama Supreme Court that a brand name manufacturer – or innovator – can be held liable for injuries suffered by someone who used a generic equivalent of the product made by a different company. That particular case involves a drug manufacturer. The bill has been assigned to the House Commerce and Small Business Committee, which Williams chairs.
Bill Would Further Define How Fees
Are Awarded in Frivolous Cases
Rep. Jack Williams, R-Birmingham, this week introduced legislation to expand how attorneys' fees are assigned in frivolous lawsuits. Under existing law, a court can award attorneys' fees and costs against any attorney or party who has brought a civil action or claim without substantial justification. This bill would:
specify that the costs that may be awarded along with attorneys' fees are litigation expenses.
no longer allow a court to consider the relative financial position of the parties involved when determining whether to award attorneys' fees or litigation expenses.
allow for the appeal of a court order granting or refusing to grant an award of attorneys' fees or litigation expenses.
HB 618 has been assigned to the House Commerce and Small Business Committee.
Bill Bans Cities and Counties from Mandating
Leave Time for Private Employees
Rep. Todd Greeson, R-Ider, this week introduced legislation prohibiting cities and counties from passing laws that would require an employer to grant vacation or other leave time that isn't required by state or federal law. Greeson's bill is backed by the Alabama Restaurant Association.
HB 628 is in response to action taken in recent years by five major U.S. cities (New York, San Francisco, Washington, D.C., Seattle, and Portland, Ore.) as well as the state of Connecticut to require that businesses provide ill workers with paid time off.
Federal law does not require businesses to offer paid sick leave. The federal Family Medical Leave Act requires businesses with more than 50 workers to offer unpaid leave.
Paid time off is a perk employers offer to attract employees. When it comes to managing time off and other work place issues, employers working in cooperation with their employees is a much better approach than a one-size-fits-all government mandate.
NEXT LEGISLATIVE DAY
The Alabama Senate and House will convene at 1 p.m. Tuesday, April 23, for the 23rd legislative day of the 2013 regular session of the Alabama Legislature.
U.S. Senate to Vote on Marketplace Fairness Next Week; Contact Sessions and Shelby Now!
The U.S. Senate could vote on the Marketplace Fairness Act to level the playing field for all retailers in relation to sales tax collection as early as next week.
Senate Majority Leader Harry Reid, D-Nev., filed a motion Tuesday night to begin the process of putting S.743, the Marketplace Fairness Act, on the Senate calendar. The plan is to move the bill directly to the Senate floor, skipping the committee process.
If you haven't already, please take a few moments now to:
First, thank the senators for their votes last month in support of the Marketplace Fairness amendment to the Senate's federal budget resolution, then ask them to vote "yes" when S. 743 comes to the Senate floor.
The Marketplace Fairness Act seeks to end sales tax disparity by giving states the authority to require remote and online sellers to collect sales and use tax at the point of purchase. States would be required to simplify and streamline their sales and use tax definitions and obligations before implementation and provide sellers with free software to help them comply. The bill exempts small businesses that earn less than $1 million annually from out-of-state sales. Without this congressional action, online-only retailers will continue to receive a government-sanctioned tax advantage.
It isn't too early to start talking with Alabama's representatives as well about this legislation.
The 55 co-sponsors of the House companion, H.R. 684, includes U.S. Rep. Spencer Bachus, R-Birmingham, chairman of the House Judiciary subcommittee, which could consider the House bill. Ask Alabama's other representatives to sign on as co-sponsors and to support the Senate or House versions when either reaches that chamber.
Panel OKs Roby Bill to Extend
Comp Time for Overtime to Private Sector
The U.S. House Education and the Workforce Committee on a vote of 23-14 Wednesday approved the Working Families Flexibility Act of 2013, or H.R. 1406, by U.S. Rep. Martha Roby, R-Montgomery. The bill would allow private-sector employers to offer compensatory time off instead of overtime pay to their hourly workers. Federal workers have that option now. The bill now goes to the full U.S. House of Representatives for consideration, where it is likely to pass. The bill's fate in the U.S. Senate is less certain.
Senators Introduce Sweeping Immigration Reform
Federal immigration reform introduced this week shifts the emphasis for awarding visas to live in the United States from family ties to skills and economic needs. S. 744, the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, also mandates that all employers check workers' legal status. The 844-page Senate bill also lays out a path to citizenship for immigrants living in the United States illegally. While the proposal has bipartisan support, Alabama Republican Sen. Jeff Sessions, R-Mobile, criticized the legislation in a Thursday news conference.