The Foundation for Progress 2012 by Beers and Associates

T H E F O U N DAT I O N for P RO G R E S S • 2012 • B CA

FOR THE

F IGHT PR IVATE S ECTOR

IN THE

Contributors: Anita L. Archie, William J. Canary, Mark Colson, Claire Haynes, Nancy Wall Hewston, Nathan Lindsay, Victor Vernon, Lenore R. Vickrey, Pam Ware

Beers and Associates, LLC 8650 Minnie Brown Road, Suite 120 Montgomery, AL Publisher: Ronald P. Beers Production Staff for The Foundation for Progress â&#x20AC;˘ 2012 Editor: Jennifer S Kornegay Managing Editor: Erin Mohajerin Designer: Scott Fuller Printer: Wells Printing Co. Published 2012 Printed in U.S.A. First Edition ISBN Number: 978-0-9796601-8-4 Every effort has been made to ensure the accuracy of the information herein. However, the Business Council of Alabama and Beers and Associates are not responsible for any errors or omissions that might have occurred.

Dedication This book is dedicated to the volunteer leaders who have led the Business Council of Alabama for more than a quarter-century, with gratefulness for their vision, courage, integrity and commitment. BCA Chairmen 2012 Terry Kellogg Blue Cross Blue Shield of Alabama

2003 Mike Thompson Thompson Tractor Company, Inc.

2011 William W. Brooke Venture Capital – Harbert Management Corporation

2002 Mike Warren Energen Corporation 2001 T. Keith King Volkert & Associates, Inc.

2010 Sandy Stimpson Scotch Gulf Lumber Company, LLC

2000 Roland Vaughan Sherlock, Smith & Adams, Inc.

2009 Phil Dotts Public FA Inc. 2008 David Muhlendorf Paper and Chemical Supply Company

1999 J. Ab Conner Conner Brothers Construction Company, Inc.

2007 Carol Gordy Natural Decorations, Inc.

1998 D. Paul Jones Compass Banchares Inc.

2006 Tom Hamby Bellsouth – Alabama

1997 Van L. Richey American Cast Iron Pipe Company

2005 Johnny Johns Protective Life Corporation

1996 Robert “Bubba” Lee Vulcan, Inc.

2004 C. Charles Nailen, Jr. BBG Specialty Foods, Inc./Taco Bell

1995 Rex J. Lysinger Energen Corporation iii

THE FOUNDATION FOR PROGRESS â&#x20AC;˘ 2012

1994 Frank McRight McRight, Jackson, Dorman, Myrick & Moore 1993 Elmer B. Harris Alabama Power Company 1992 Robert W. Hager The Boeing Company 1991 Dr. Peter Mannsfeld Degussa Corporation 1990 Harry B. Brock, Jr. Central Bank of the South

1989 Winton M. Blount III Blount Strange Holdings, LLC 1988 James Miller MacMillian Bloedel, Inc. 1987 Frank Mason Mason Corporation 1986 Dick Dickson Russell Corporation

Table of Contents Prologue: Choice, not Chance, Determines Destiny • 2012 . . . . . . . . . . Chapter 1: Governor Robert Bentley’s State of the State Address . . . . . Chapter 2: Putting the Private Sector First: Job Creation Kicks Off Legislative Session . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 3: February 13 BCA-Supported Job Creation and Retention Act Passes House . . . . Chapter 4: February 20 Finally a Plan to Fix the Gross Income Problem . . . . . . . . . . . . . . . . Chapter 5: February 27 Senate Begins Debate on Economic Development Bills . . . . . . . . . . Chapter 6: March 5 Sizing up the Pseudoephedrine Bill . . . . . . . . . . . . . . . . . . . . . . . . . . The Business Advocate: The BCA’s 2012 State Legislative Agenda . . . . Chapter 7: March 12 Challenging the Status Quo: Education Options Act of 2012 Announced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 8: March 19 Options and Flexibility for Parents and Teachers. . . . . . . . . . . . . . . . Chapter 9: April 2 After Months of Work, Changes Introduced to Immigration Law . . Chapter 10: April 9 BCA Reiterates Support at Public Hearing on Immigration Revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 11: April 16 House Approves Changes to BCA-Backed Immigration Law . . . . . The Business Advocate: The BCA’s 2012 Federal Legislative Agenda . . . Chapter 12: April 23 Senate Approves Changes to BCA-Backed Immigration Law . . . . . Chapter 13: April 30 Status Quo Senators Pass Bill Making Charter Schools all but Impossible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 14: May 7 Drawing a Line in the Sand, House Refuses Watered-Down Senate Charter Bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

vii 1 9 19 31 39 51 55 73 85 105 117 125 135 149 161 171

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Epilogue: 2012 Session Yields Positive Legislation for Business. . . . . . . Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

APPENDIX

ProgressPAC Launches Carrying the Flag for Business Campaign . . . . Business Council of Alabama Federal Advocacy: 2011-2012 . . . . . . . BCA/ProgressPAC 2012 Endorsed Candidates . . . . . . . . . . . . . . . . . The Partnership: BCA, CCAA Working Together on Behalf of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Partnership: Jeremy Arthur to Head Chamber of Commerce Association of Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes to Alabama’s Immigration Law by Edward A. “Ted” Hosp. . The Truth About Charter School Funding . . . . . . . . . . . . . . . . . . . . . BCA Takes First Step Toward Finalizing 2012 Legislative Agenda . . U.S. Chamber Honors BCA with the 2011 Outstanding Organization Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BCA Advocating for Job Creation, Education Reform in 2012 Session BCA Statement on Pseudoephedrine Bill (HB 88) . . . . . . . . . . . . . . . BCA Statement in Support of Educations Options Act of 2012 . . . . . . . BCA Issues Statement on Proposed Changes to Immigration Law . . BCA Applauds Governor for Signing Immigration Bill . . . . . . . . . . . Coalition Aims to Scrap Metal Theft by William J. Canary . . . . . . . . The Business Advocate: BCA Chairman Looks Beyond Himself to Serve Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Business Advocate: Nation’s 43rd President Headlines Annual BCA Chairman’s Dinner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Manufacturing Advocate: BCA’s Manufacturing Advocacy Council Visits the NAM, Briefs Congressional Delegation . . . . . . The Business Advocate: Outgoing Chairman Challenges BCA to Honor the ‘Privilege of Leadership’ . . . . . . . . . . . . . . . . . . . . . . The Business Advocate: Business Council Hosts Capital Leadership Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Business Advocate: 2012 Session Yields Positive Legislation for Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Manufacturing Advocate: BCA, ATN Honor Alabama’s 2012 Manufacturers of the Year . . . . . . . . . . . . . . . . . . . . . . . . . . .

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183 197 199 200 206 207 209 211 214 218 220 222 224 225 226 227 228 231 235 239 243 249 253 255 263

P RO L O G U E “Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution; it represents the wise choice of many alternatives – choice, not chance, determines your destiny.”

ARISTOTLE

ur nation has always admired and revered great builders — individuals like Andrew Carnegie, Robert Moses, Frank Lloyd Wright and countless others who left behind impressive structures and legacies that remain for generations. Becoming a successful builder requires an investment, commitment and passion far greater than the average person is willing to make and the assumption of more risk than most are comfortable shouldering. These legends understood that choice, not chance, is essential to building the foundation for excellence. The foundation of the Business Council of Alabama is our member companies that employ more than 750,000 working Alabamians. Helping cement this foundation is The Partnership with the Chamber of Commerce Association of Alabama uniting the BCA with the 120-plus local chambers of commerce throughout the state; it is a one-of-a-kind model in America that was formalized in 2004. In addition, both the United States Chamber of Commerce and the National Association of Manufacturers look to the BCA as their state affiliate organization, completing a solid and lasting foundation that ensures the voice of business and industry in Alabama is heard. Since helping elect Alabama’s first truly pro-business legislature in decades, the Business Council of Alabama has embarked upon a massive construction project, and it, too, demands we dedicate unprecedented resources, time and attention to its completion. Unlike the builders who work with mortar and stone, the BCA is working to build an economic structure that allows business owners across the state to operate without needless government regulation, unnecessary health care mandates and punitive, job-killing taxes. Quite simply, our mission is to make it easier vii

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for business owners to sign the front of a paycheck, so that others can sign the back. In 2010, the BCA ignited a true clash of ideas detailed in our book What If No One Were Watching? that drew a line in the sand between probusiness and anti-business forces. In our follow-up book, A Blueprint for Progress: 2011, we sharpened the vision of the business community into a blueprint for putting the private sector first. This year, using this blueprint, we have now begun building The Foundation for Business. Expanding existing industry, preserving Alabama’s status as a rightto-work state and improving Alabama’s public education system are the cornerstones of this foundation. Conservative estimates indicate that 8 out of 10 newly created jobs will come from existing business and industry in Alabama. The BCA has long advocated for significant incentives to expand existing industry in the state. In the 2012 legislative session, a series of BCA-endorsed incentives for existing industry were adopted and have already resulted in job expansions. In April, an existing Alabama business announced it will invest $1.2 billion in a coal production facility that will employ more than 500 workers. Most importantly, Alabama’s status as a right-to-work state sends a clear signal that Alabama is open for business. During an interview following the announcement of a $600 billion project that will create 1,000 new jobs, Alabama Governor Robert Bentley summed it up well when asked why the company chose to locate in Alabama: “We are a right-to-work state,” he said. Fighting assaults on Alabama’s right-to-work laws remains a top priority for the BCA. As the state’s number one source of tax revenue — providing more than $5 billion annually to state and local governments — as well as the largest consumer of the product called education, Alabama’s business community has a vested interest in ensuring that our public education system is achieving its stated goal: educating children. Today’s students are tomorrow’s workforce. The BCA is fully committed to uniting the business and education communities for the simple purpose of educating Alabama’s schoolchildren. We will never be able to fully compete for the jobs of the future unless we prepare the students of today. In the pages that follow, you will read about BCA’s direct advocacy in the legislative process throughout the 2012 session. You will be privy to behind-the-scenes stories of how bills were passed or defeated.

PROLOGUE

You will see that in Alabama, we now are allowed to begin the debate on important issues that face our state; we often forget that less than two years ago merely having a conversation about critical reforms was not even possible. There has been a seismic shift in the status quo. You will learn how we built upon the blueprint and began laying a foundation upon which businesses in our state may continue to grow and expand. Like any construction effort, this project will take time (Patience and time often conflict with one another.) but because of the BCAâ&#x20AC;&#x2122;s direct advocacy efforts within the governmental process, we are well on the way toward building a better Alabama. Just as Carnegie, Moses, Wright and other great builders heeded the words of Aristotle, our state leaders must remember that choice, not chance, determines our destiny. It is imperative for business to know the choices made in the 2012 legislative session.

CHAPTER 1 February 7, 2012

G A VE L E D TO O RD E R : G O VE R N O R R O B E R T B E N T L E Y ’S S TATE OF T HE S TATE ADDRESS

ieutenant Governor Ivey, Speaker Hubbard, President Pro Tem Marsh, distinguished guests, members of the Legislature and my fellow Alabamians: It is in indeed an honor to join you in this Chamber as we reflect on a year of historic events and cast a bold vision for the future of our state. To members of my Cabinet, thank you for your service and for meeting the challenges we face as a state with courage and the hearts of servant leaders. It is a privilege to work with each of you. Chief Justice Malone, distinguished members of the Alabama Supreme Court — thank you for your leadership and your service to our state. As we reflect on the first year of my administration and chart a course for the future, I want us all to remember, state government belongs to the people of this state. As public servants chosen to lead this state, we must begin every day with a commitment to give Alabamians every opportunity to make their lives better. The people of this state expect us to make tough decisions in tough times. They expect us to come together, to work together to create jobs, to give our children the best education and to improve our quality of life. As we face the days ahead, we must have the courage to make difficult decisions, we must have compassion for the people we serve, and we must work together to improve the lives of all Alabamians. The first time we met together, right here in this historic chamber, I pledged to do all I could to put Alabamians back to work. As I stand before you tonight, I’m pleased to report that since we took office, 41,000 more Alabamians are working. That’s 41,000 more 1

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Alabamians earning a paycheck today than a year ago. And more jobs are on the way. We have recruited over 13,000 new, future jobs to Alabama. International companies from India, Germany and Japan and right here in the United States are investing more that $3.2 billion dollars in our state and in our people. And just today there was more good news. A Chinese company will bring up to 500 new jobs to Wilcox County where we have the highest unemployment rate in the state. In the last four months Alabama’s unemployment rate has dropped faster than any other state in the nation. We’ve done this despite facing tough competition from other states and with limited ability to offer incentives to businesses. So why are national and international business leaders choosing to invest in Alabama? They recognize that Alabama has the strongest business climate, best work force training, and the hardest working people they will find anywhere. They also know that our leaders at every level of government and our local economic developers take a team approach to putting Alabamians back to work. There is no better example of that than what we did to help the town of Hackleburg. We all remember what happened in April. This community of 1,400 people in Northwest Alabama was devastated by the storms. Twentyfive people were killed. The schools were demolished. One hundred fifty homes were lost. And the Wrangler Distribution Center, the town’s largest employer, was destroyed. We knew if those critical jobs at Wrangler were not restored, there was little hope for saving this community. The mayor, the county commissioners, local legislators and our Alabama Development Office helped me with one common goal — saving the community. And our teamwork paid off. Wrangler executives heard our message and agreed to not only rebuild in Hackleburg, but to expand from 150 jobs to 250 jobs for the community. I want to thank everyone for a job well done. When I took office, I learned that despite our previous success in recruiting new industry to our state, we did not have a comprehensive, statewide economic development plan to guide our efforts. That’s why I

CHAPTER 1

created the Alabama Economic Alliance made up of economic development leaders from communities across Alabama. Working together the Alliance has delivered a blueprint to drive our future efforts in the creation of jobs in 11 business sectors of the state. The report recommended that we increase the number of prospectready sites across Alabama and it called for strengthening our workforce development programs. All are worthy goals that we will implement this year. We will also present an aggressive jobs agenda as a top priority in this legislative session and that will give our economic recruiters new tools to grow jobs in Alabama. Our workers must continue to have the training they need to succeed in the jobs of the 21st century. That’s why I am proposing new investment in our workforce development and career tech programs. And we will make sure any rule or regulation that stands in the way of economic development is eliminated. We will free our businesses from unnecessary, bureaucratic road blocks so that they can make better bottomline decisions that create jobs and economic opportunity. I have been fortunate this year to spend time in communities across our state. A concern I have heard over and over is the need for better roads and bridges to lead to greater economic opportunities and to improve their quality of life for all our citizens. Trucks, school buses, farm equipment must now be diverted in parts of our rural areas due to bridges that need repair. We have an obligation to preserve the roads we now have and fix our bridges. We have the ability to finance a major infrastructure program. We will work with local leaders to identify what roads need repair and we will get them fixed as soon as possible. With the use of GARVEE Bonds we can achieve this without raising taxes or taking money from our state savings account. These can be issued as needs are identified. If we are going to continue to grow jobs in Alabama, we must manage our money wisely. That will require us to make difficult decisions in our state budgets. We face a major funding shortfall in our General Fund. We have 25 percent less money to provide basic services. We know what the federal government would do. They would print more money, borrow against our children’s future and drive up our national debt. That won’t ever happen in Alabama.

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Early this morning at 4:30 there was a single mother who got up and went to work. She works hard everyday at her job serving the people in her community. On April 15 we expect her to send her taxes to Montgomery. And we’re expected to be good stewards of that money. That’s exactly what we are going to do. And we are not going to raise her taxes. I promised the people of this state that I would not raise taxes on the people of Alabama, and I am going to keep my word. I will oppose any effort to raise taxes on Alabama families, and I will veto any tax increase. The people of this state expect us to live within our means, and that’s exactly what we’re going to do. Now, that means that we must prioritize the people’s money. We must first use that money to support critical state services that have a proven track record. Passing balanced budgets that protect programs and fully funding critical state services will require the same kind of self-sacrifice and spirit that we saw in the wake of the April tornadoes. In our General Fund, we will protect the Alabama Department of Public Safety. Nothing is more important than ensuring the safety of our citizens. Our most vulnerable seniors and children depend on critical services from the Department of Human Resources. I want them to know we will protect them at every turn. And in the budget I am recommending, we will not cut one penny from the Department of Corrections. Not one single prisoner will be set free due to a lack of funds. Unfortunately, government always expands to meet the amount of money we have. We must make sure the opposite occurs. We must reduce the size and scope of government and we have already begun this process. I will propose legislation that consolidates a number of state agencies. We will modernize outdated systems within state government by taking advantage of the latest technology to save $100 million over 10 years. We will streamline our licensing procedures which will produce greater efficiency and significant savings for taxpayers. And that’s just the beginning. I am committed, together with Lt. Governor Ivey, Speaker Hubbard and Senator Marsh and our legislature to making sure we reduce the size of government and make government more efficient. The people of this state

CHAPTER 1

deserve this. And the process of cutting, reducing and saving taxpayers money will never stop as long as I’m Governor. In my education budget, the Alabama Reading Initiative, ACCESS Distance Learning, the Alabama Math Science and Technology Initiative, Advance Placement and our highly successful Pre-K programs will all be protected. These are all proven programs that have helped our children achieve better results. We know that the health care of our children is critical to their learning process. That is why I am proposing that we invest more of our education dollars in the well-being of our children. We will make sure children are ready to compete and learn, knowing that they have access to the health care services they need and deserve. In education, we provide transportation to and from school for our children. If children aren’t in school, they can’t learn. That’s why we will protect funds that provide transportation. We also provide meals to our children who need them — sometimes twice a day. And everyone knows you cannot learn on an empty stomach. In the budget we are presenting, we will ensure no child goes hungry. We also know a child cannot learn if they are sick. By investing more of our education dollars in the health of our children, we will make sure that they are healthy and successful. This year we are proposing an aggressive education agenda. In this global economy, our competitors aren’t just Georgia, Tennessee and Mississippi. They are from all over the world. If we’re going to continue to recruit the jobs our people deserve, our workers cannot be just the best in the Southeast, or the best in the country. They have to be the best in the world. And that’s why, as a state, we have to constantly be looking for ways to improve how we educate our children. We must begin by giving our existing public schools more flexibility. I will propose The School Flexibility Act of 2012, which will allow more decision-making at the local level. Working with the Legislative leadership, we will give local school systems the ability to develop their own innovative strategies, free from state or federal bureaucracy. We must also allow parents a choice in how and where their child receives an education. Every parent, regardless of how much money they have or where they live, should be given the chance for their child to attend an excellent school. We must give children every opportunity to live up to their full potential. Every child, and every parent, deserves nothing less.

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No doubt you’ve heard a lot recently about charter schools, and you will hear a lot more in this legislative session. Charter schools are public schools. The legislation we will propose would create a limited number of public charter schools to give parents a choice. And we are going to pass public charter school legislation in Alabama because our children and parents, and yes, teachers deserve a choice. It’s time for all of us to stop pointing fingers and placing blame for the problems we face in education. It’s time we come together and lend a hand to find real solutions, because there is nothing we cannot solve by working together. Working with State Superintendent Dr. Tommy Bice and his team, we will ensure that every child’s classroom and school is led by a highly effective, professional educator free to use their talents to create a stimulating and innovative learning environment in their own classroom. I know that, many times, our teachers spend hundreds of dollars of their own money on their classrooms. Today, I propose a dollar-for-dollar tax credit for every teacher in this state who spends their money on their classroom. The most important people in a child’s life are the ones who kiss them goodbye in the morning and the one who spends the day with them in the classroom. We know that, other than their parents, nothing matters more to a child’s education than the effectiveness of his or her teacher. We cannot become the world’s best public education system without listening to our teachers and principals. We cannot reform education by ignoring educators. That’s why I will form a “Teacher Cabinet” made up of teachers, administrators, school board members and parents. These leaders will provide my administration with unfiltered feedback on the needs of our public schools. I want to hear directly from Muscle Shoals and Monroeville, Fort Payne and Fairhope, Decatur and Dothan, and all places in between, without the filter and spin of Montgomery lobbyists. And as we’re talking about our teachers, I want to recognize two of the very best of the profession and the first two members of our Teacher Cabinet. Dr. Gay Barnes teaches first grade at Horizon Elementary School in Madison. She is Alabama’s Teacher of the Year and a finalist for National Teacher of the Year.

CHAPTER 1

Jeremy Raper teaches Advanced Engineering and Honors Physics at Bob Jones High School. He is one of only 40 teachers in the country to receive the prestigious Milken Educator Award last year. Both of these teachers represent the best among our educators in Alabama and are great examples of the teachers we now have leading our students and the type of teachers we want to continue to have leading in the classroom. Dr. Barnes, Mr. Raper will you both please stand. To improve the quality of life for all Alabamians, we have to improve our overall health. In every report detailing the health of our state — the news is not good. Alabama consistently is at the bottom of almost every health ranking including rates of obesity, diabetes, heart disease and infant mortality. That is not acceptable. I know we can do better. In Alabama there are countless organizations, agencies and programs all dedicated to improving the health of our people and we are thankful for their efforts. But it’s time we start producing real results that improve the lives of our people. I will create a Health Alliance bringing all of these entities together at one table. Each one will have a clear mission and we will set goals for our state to reach. When we all work together to improve the lives of Alabamians, we produce real results. We saw how well this works with the Tornado Recovery Action Council, where a group of private citizens came together, listened to the people and produced 20 common-sense recommendations to better prepare our state for future disasters. We’re facing some adversity right now. It’s a time that demands courageous leadership and sacrifice. Those of us who serve in government learned during the spring of 2011 that there is no difficulty that the people of Alabama cannot overcome when we work together and put aside personal agendas for the greater good. That is what we saw in the wave of generosity that swept across our state in the aftermath of April 27. Volunteers came from far and wide to help from Franklin to DeKalb County, Calhoun to Winston County. Generous and caring groups from Auburn came to the aid of those in Tuscaloosa. That’s just the kind of spirit we need in our state to help solve all our problems.

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We also see it in Carson Tinker. By now you may have heard Carson’s story. One of the 62 tornadoes that tore across Alabama last spring ripped Carson’s house and his life apart. Carson was injured after being thrown 100 yards. He lost his home. And more importantly, like so many people across this state he lost someone he dearly loved. What you may not realize is that Carson has the most thankless job in football. He snaps the ball on punts and field goals. He’s a long snapper. No one will notice if he’s perfect. They’ll only notice if he’s made a mistake. Despite his injuries, despite his personal tragedies, Carson didn’t make a single bad snap in his career. He did his job to perfection, and he helped his team achieve the ultimate goal. Carson, would you please stand? In these tough times, let’s follow the example of people like Carson Tinker. Let’s pull together in the face of adversity, do our jobs to the best of our ability, and let’s serve the people who sent us here. Last year the people of Alabama showed all of us how it should be done. They came together, worked hard, were unselfish and it didn’t matter who got credit. The people didn’t elect us to be caretakers of state government. We are not here to protect the status quo. We need to do everything we can to give people the opportunity to make their lives better, whether it’s in helping them get a good job, a good education or just being healthier. By working together we can make that happen. When we leave our time in office, we want to leave Alabama a better place than when we arrived. That should be our purpose — and it should be the vision of everyone in this room. God bless you. And may God bless the Great State of Alabama.

CHAPTER 2 February 7, 2012

JOB

P U T T I N G T H E PR I V A T E S E C T O R F I R S T : C RE A T I O N K I C K S O F F L E G I S L A T I VE S E S S I O N

â&#x20AC;&#x153;Excellence is to do a common thing in an uncommon way.â&#x20AC;?

B O O K E R T. WA S H I N G T O N

he Alabama House began its first full workday on Tuesday debating a package of BCA-supported bills intended to ignite job creation. Four of the bills passed the House, butÂ HB 159 and HB 160 together known as the Alabama Job Creation and Retention Act still await House action when it returns on Tuesday. The Act, the cornerstone of Gov. Robert Bentleyâ&#x20AC;&#x2122;s job creation package, consists of a proposed constitutional amendment and an enabling bill that would give wide discretion to the governor to offer tax incentives for companies that locate, expand or retain their operations in Alabama. The two bills,Â by Rep. Barry Mask, R-Wetumpka, would provide that a percentage of state income tax withholdings from the additional employees may be retained and used by the company to offset the costs of acquiring the facility, but not more than the cost of the facility. Bill proponents point out that the stateâ&#x20AC;&#x2122;s success in landing world-class companies like Mercedes, Honda, Hyundai and ThyssenKrupp already prove how effective tax incentives can be for bringing jobs to the state. HB 159 would allow voters to give the governor and the Alabama Development Office more flexibility to offer tax incentives to land major economic development projects and retain companies that might otherwise relocate outside Alabama, without having to call a special session of the legislature. Some lawmakers questioned the lack of specifics and the wide authority the legislation would convey upon the governor. They said the legislation lacks minimum thresholds for the amount of investment and the number of additional jobs that must be created to receive the incentives. However, 9

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Rep. Mask pointed out that the cost-benefit analysis and terms of any agreements would be made public. Mask also stressed that industrial recruiters need more flexibility to quickly match creative offers made by other states, without having to amend legislation. HB 160, the enabling bill, sets strict parameters for how incentives can be used to ensure return on investment. All of the bills in the governor’s job creation package are supported by the BCA. BCA President and CEO William Canary commended the House for acting quickly on four of the bills and urged lawmakers to follow suit and approve HB 159 and HB 160. “We are pleased the House is keeping the momentum going with this jobs-creation legislation,” he said. “When new and existing businesses are successful and hire more people, the Education Trust Fund grows, and we are able to provide more opportunities to our students and teachers. BCA will continue to lead the effort in finding solutions to improve Alabama’s economy.” The other bills that passed the House Thursday: HB 151, by Rep. Alan Baker, R-Brewton, changes the name of the Alabama Development Office to the Alabama Department of Commerce. This name change would help Alabama’s industrial recruiters relate better to prospects, especially international prospects, who are conditioned to being recruited by state agencies called, departments of “Commerce.” The House passed this bill 94 – 1. HB 144, by Rep. Bill Roberts, R-Jasper, amends existing statutes that provide for tax incentives to add that companies engaged in the coal mining industry be included among industries eligible to receive the incentives. HB 144 passed the House 80 – 3. HB 39, by Rep. Paul Lee, R-Dothan, provides an exemption from sales and use taxes on parts and systems that are incorporated into a refurbishment of certified military, governmental or commercial transport aircraft or rotary wing aircraft. Committee testimony revealed that Alabama companies that refurbish aircraft are at a competitive disadvantage versus their counterparts in other states, where the parts used in such conversions are tax-exempt. The vote for passage was 80 – 8. HB 154, by Rep. Dan Williams, R-Athens, enhances the current economic incentives available to data processing centers. Data processing centers create a large number of direct and indirect jobs and have a significant economic impact in the communities in which they locate. The bill was approved on a vote of 72 – 18.

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House bills 151, 144, 39 and 154 now move to the Senate for consideration.

Speaker Hubbard gives preview of 2012 legislative session In his final public appearance just hours before gaveling the Alabama House of Representatives into its regular 2012 session, House Speaker Mike Hubbard set the stage for the BCA Governmental Affairs Committee by outlining several bills and initiatives on tap for the next several months. Hubbard discussed a number of incentive measures and other bills designed to attract new jobs and House Speaker Mike Hubbard retain those that already exist. The package of economic stimulus bills received favorable reports Wednesday from House committees and had been endorsed by the House and Senate Majority Caucuses earlier. These bills include: % A constitutional amendment that would give the Alabama Development Office and the governor more flexibility in offering tax incentives to land major economic development projects and retain those companies that might otherwise relocate outside Alabama.

% The “Heroes for Hire” Act that would offer Alabama businesses a tax credit for hiring a veteran recently returned from war. Newly returned veterans starting their own small businesses also qualify for a tax credit under this bill’s provisions. % The Alabama Regulatory Flexibility Act that would require each state agency to conduct an economic impact analysis as well as a regulatory flexibility analysis prior to the adoption of any proposed regulation that may have an adverse impact on small businesses.

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“Right out of the chute, our focus is going to be jobs and stimulating the economy because that is of paramount importance and the most important issue we will deal with,” Hubbard said. “We will do nothing else until we get our jobs package through the House and through the Senate so we can encourage the private sector to grow.” Hubbard noted that electing a “very conservative, pro-business legislature during the 2010 cycle” is beginning to pay dividends and has already shown signs that Alabama’s economy is beginning to improve at a pace faster than other Southeastern states. Education reform is another high priority, according to the Speaker, and will also take center stage at some point early in the legislative proceedings. He said the effort actually began last year with the successful passage of a teacher tenure reform statute and credited the support and endorsement of BCA and other business groups as a major factor in the accomplishment. “Under the previous legislative leadership, I don’t think there is anybody in this room who would have said we had a prayer of passing tenure reform, but we did,” Hubbard said. “Tenure reform is a direct result of the new mindset of the legislature, and I believe it is going to have a profound positive impact on education in this state for years to come.” He compared the new employment rules promulgated by the tenure reform law to those that are used in the private sector: “Employees who do a good job are rewarded, and those who do a poor job are dismissed.”

Charter schools important component of reform Allowing the creation of charter schools in Alabama is another important component of education reform in spite of the spirited opposition of the union, the Alabama Education Association. Charter schools are public schools operated with taxpayer dollars and open to any student who wishes to attend despite their economic standing, school district or any other factor. They do not charge tuition and, in states where charter schools operate, have proven so popular that waiting lists for openings often exist. Accountability and results are the top priorities in such schools, and the charters under which they operate specifically spell out the goals and student achievements they are expected to produce. Failing to meet these benchmarks, or unsuccessfully maintaining rigorous management and fiscal accountability, results in the school’s closure.

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In return for operating under these heightened standards, educators in charter schools are allowed leeway in the education processes they employ so long as they produce expected results. Such freedom encourages innovation and experimentation in addition to the tried and true methods of teaching. “We want to make sure that every taxpayer with children is not forced to send them to a failing school — that is not acceptable,” Hubbard said. “We have a great ally with State School Superintendent Tommy Bice, who understands this is simply a tool we want to give our education community.” Hubbard conceded that charter schools are not needed in sections of the state where schools are operating up to par but emphasized that they would bring needed change to other areas, especially in the inner city, where evidence indicates schools are failing. He said he recently took a group of African-American legislators to Memphis, Tenn., to demonstrate how charter schools there have made a difference in the lives of minority students. Proponents point out that charter schools are not a panacea to fix education but simply another tool in our arsenal of education reforms. The four-term lawmaker encouraged attendees to view the public education system through an economic model with the student being a product, business serving as the customer, and schools filling the role of manufacturer. A business that manufactured a product without consulting its customers would not remain viable for long, he noted, and that is the way public education has operated in Alabama for decades. Another innovative bill traveling with the charter school measure will allow school systems to petition the state school superintendent for similar regulation flexibility enjoyed by charter schools while also requiring increased accountability. Government efficiency provides the third bullet on the legislature’s priority list this session, Hubbard said. A $400 million shortfall in the state’s $1.8 billion General Fund budget, which funds all of Alabama’s noneducation government agencies, will force the legislature to consolidate agencies and prioritize state services. Hubbard said a study group from Auburn University has been designing a model that combines or abolishes state agencies, reduces duplication and eliminates needless government bureaucracy in an attempt to save scarce tax dollars. “We have to make sure that every dime of taxpayers’ money is spent wisely and that services are not duplicative,” Hubbard said. “We want to

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have a quality state government, but we don’t want to have an excessive state government. Remember, our job is to create private sector jobs, not state government jobs.” He highlighted the Taxpayer Bill of Rights II bill and the reintroduction of the Made in Alabama Act that offsets tariffs paid by foreign companies making investments in the state as other important priorities for legislators this session.

House panel OKs unemployment compensation fraud bill Under current law, a person who fraudulently misrepresents that he is unemployed for the purpose of receiving unemployment compensation benefits cannot be disqualified from receiving benefits. HB 72 by Rep. Paul DeMarco, R-Homewood, seeks to change that. For a first offense, the bill would require up to a 52-week disqualification of benefits or until the amount that was awarded fraudulently is repaid in cash. For subsequent violations, the disqualification of benefits would be for a minimum 52 weeks, and the fraud overpayment must be repaid. Any federal or state funds due to the claimant could be intercepted by the Department of Industrial Relations (DIR) to repay the debt. The bill also further strengthens the penalties associated with fraudulent misrepresentation. Fraudulent benefits exceeding $2,500 would constitute a Class B felony, benefits between $500-$2,500 a Class C felony, and those under $500 a Class A misdemeanor. In lieu of fines, the guilty person would pay restitution to DIR of at least the amount of benefits obtained. In committee, Rep. DeMarco told members the new penalties would allow the state to prosecute this type of fraud in the same manner as it prosecutes persons accused of theft. HB 72 received a favorable report from the House State Government Committee with only one dissent. It now awaits debate from the full House. BCA supports this bill.

Texting while driving could soon be illegal in Alabama HB 2, by Rep. Jim McClendon, R-Springville, passed on a unanimous vote by the House Public Safety and Homeland Security committee this week. If passed, persons found operating a motor vehicle on an Alabama

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public road, street or highway while using a wireless telecommunication device to write, send or read a text-based communication would be subject to a $25 fine upon a first violation, $50 fine upon a second violation and $75 fine upon a third violation. The bill makes texting while driving a primary offense, and individuals would be charged with a two-point violation on their driving record if found to have violated the law. The bill now goes to the Senate. BCA is monitoring this legislation.

House panel passes prescription requirement for common cold meds Employees may soon be forced to obtain a prescription for products containing pseudoephedrine, ephedrine and phenylpropamine. HB 88 by Rep. Mike Millican, R-Hamilton, which would classify these drugs as Class III controlled substances, passed the House Health Committee on a voice vote with only one dissenting vote. If passed, products containing these drugs would no longer be available over the counter. Proponents of the bill, which is modeled after a Mississippi statute, claim the law would cramp down on the manufacture of methamphetamine. The BCA is opposed to HB 88 in its current form. While the BCA recognizes the need to eliminate meth labs in Alabama, requiring employees to take time off work to visit their physician to obtain a prescription for common cold and allergy medications would increase health care costs and reduce worker productivity.

BCA board member appointed to State Personnel Board Joanne Randolph of Huntsville, a member of the BCA Board of Directors, has been appointed to the Alabama State Personnel Board for a term of six years by Alabama Lt. Gov. Kay Ivey. Randolph is president and CEO of the Women’s Business Center of North Alabama and is the former president and CEO of BizTech, which she founded in 1997. She has more than 35 years of experience in entrepreneurship, small business incubator management, marketing and public relations, business management, property management, information technology and telecommunications consulting.

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From 1997 to 2002, Randolph was director of BizTech, Huntsville’s business incubator. After that project, she helped launch the Women’s Business Center of North Alabama and in 2005, became its first executive director.

Washington Br iefing

Sessions, Roby Address BCA Federal Affairs Committee U.S. Sen. Jeff Sessions and U.S. Rep. Martha Roby were special guests of the BCA Federal Affairs Committee this week. The committee, which is in the process of finalizing BCA’s Federal Legislative Agenda for the second session of the 112th Congress, met by conference call this morning. Also joining the call were members of the Chamber of Commerce Association of Alabama as well as BCA’s Manufacturing Advocacy Council. Sessions and Roby are both sponsors of the Honest Budget Act, S. 1651 and H.R. 3844, which targets accounting techniques in the federal budget process. Among other provisions, the Honest Budget Act would make it harder for Congress to pass spending bills without first passing a budget, would reveal the real cost and commitment of federal government spending, and would prevent Congress from claiming savings unless those savings are real and genuine. Sessions, the top Republican on the Senate Budget Committee, shared with the committee that President Barack Obama will be releasing his budget on Monday. It has been more than 1,000 days since Congress passed a budget, and Sessions said that Senate Majority Leader Harry Reid has indicated this budget will not be brought to the Senate floor for a vote. Roby discussed the 27 bills passed by the House that are now stalled in the Senate, and during this election year, she does not foresee any of that legislation moving forward. Roby also indicated that the multiyear transportation reauthorization bill, the American Energy and Infrastructure Jobs Act of 2012 (H.R. 7), is expected to be brought up for a vote in the House next week. Sessions are Roby are strong advocates for Alabama’s business community, and we appreciate the time they spent with us today.

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House Passes Insider Trading Bill The House on Thursday voted 417-2 to approve an ethics reform package that would prohibit insider trading by members of Congress and their staff, as well as executive branch officials. The bill largely remains intact from the bill passed by the Senate last week, applying insider-trading laws to members of Congress and their aides as well as senior advisors in the executive branch. However, the House-passed version of the Stop Trading on Congressional Knowledge Act (STOCK Act) does not contain several provisions that the Senate included and, therefore, will head to a House-Senate conference to reconcile the differences. The House-passed version does not include the Senate-approved amendment that would require “political intelligence” practitioners to adhere to the same requirements as lobbyists. These consultants provide inside information to Wall Street — hedge funds and other information houses — which use the information to make money. The House version replaces this provision with a mandated federal study of the industry to recommend legislative action next year. The House version also includes a provision that would restrict members of Congress from receiving access to initial public offerings of stock.

FAA Reauthorization Bill Sent to President The Senate on Monday passed a four-year, $63 billion compromise bill to renew and extend federal aviation programs through 2015. The Senate voted 75-20 to pass the measure. The House approved the measure last Friday by a vote of 248-169. President Obama is expected to sign it into law. The Federal Aviation Administration’s authorization expired in 2007. Since then, there have been 23 stopgap measures as lawmakers worked on an agreement toward a multi-year bill.

House Committee Approves Pipeline Bill The House Energy and Commerce Committee on Tuesday voted 3320 to pass the North American Energy Access Act (H.R. 3548), which would require the Federal Energy Regulatory Commission to approve

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TransCanada Corp.’s proposed Keystone XL pipeline thus removing the authority from President Barack Obama. The bill would give FERC the authority to approve the project in 30 days. The legislation now heads to the full House where it will be attached to the $260 billion transportation bill. The bill’s chances in the Democraticcontrolled Senate remain unclear.

CHAPTER 3 February 13, 2012

B CA- S U P P O R T E D J O B C R E A T I O N A N D R E T E N T I O N A C T PA S S E S H O U S E “We need to be concerned about young people . . . if we don’t protect them, how are we going to protect this country?” HANK A ARON

AEA fails in effort to kill job-creation bill

n the true spirit of bipartisanship, HB 159, by Rep. Barry Mask, R-Wetumpka, garnered 65 votes to pass the House on Thursday afternoon. It was a minor break from tradition, in that HB 159, the proposed constitutional amendment, passed after the enabling bill, HB 160, also by Rep. Mask, passed the House on Tuesday. Together, both bills comprise the Alabama Job Creation and Retention Act of 2012 that was proposed by Gov. Robert Bentley and is supported by the BCA. It is intended to ensure that Alabama officials have the authority and flexibility to match the creative incentives offered by our sister states when recruiting industry and jobs to Alabama. Gov. Bentley was present on the House floor during the debate, which speaks to the importance of the bill. “This legislation will give us an important new tool to recruit privatesector jobs our people need and deserve,” Bentley said. “This will also encourage existing companies to expand their operations here. As those companies make a greater investment in Alabama, we will be able to keep high-quality jobs in our communities.” If passed and ratified by the voters, the legislation would convey broad authority on the governor to offer tax incentives for companies that locate, expand or retain their operations in Alabama. The provision that attracted 19

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most of the criticism from the opponents would allow a percentage of the additional employees’ state income tax withholdings to be retained and used by the company to offset the cost of acquiring the facility, but not more than the cost of the facility. Opponents, fueled by a misinformation campaign from the Alabama Education Association, continued to argue that education funding would be diminished further by the incentives, with no guarantee that the new jobs or retained jobs would generate enough revenue to pay for the incentives. However, these efforts by AEA to pit job creation and education against each other were unsuccessful. It is interesting to note that an almost identical measure to HB 159, which contained even fewer safeguards than the current version, was approved by the House last year with a 99-0 vote and 82 co-sponsors. “We’re trying to give our state and local economic developers more tools to help grow existing businesses and land new industry, both of which result in more jobs for Alabamians,” Mask said. Mask is the economic development director for Elmore County. On Tuesday, House members adopted amendments to HB 160 that incorporated more accountability into the incentive approval process. For retention projects, employers must undergo a financial review and guarantee that specific percentages of their employees will remain on the job as conditions for receiving the incentives. With the passage of HB 159 and the other jobs bills that were passed by the House, the Senate will begin considering job creation legislation next week. House members voting for HB 159 were: Alan Baker, R-Brewton; Mike Ball, R-Madison; Jim Barton, R-Mobile; Richard Baughn, R-Lynn; Paul Beckman, R-Prattville; Elaine Beech, D-Chatom; Duwayne Bridges, R-Valley; K.L. Brown, R-Jacksonville; Mac Buttram, R-Cullman; Jim Carns, R-Birmingham; Donnie Chesteen, R-Geneva; Steve Clouse, R-Ozark; Terri Collins, R-Decatur; Randy Davis, R-Daphne; Paul DeMarco, R-Homewood; Dickie Drake, R-Leeds; Allen Farley, R-McCalla; Joe Faust, R-Fairhope; Chad Fincher, R-Semmes; Craig Ford, D-Gadsden; Blaine Galliher, R-Gadsden; Victor Gaston, R-Mobile; Lynn Greer, R-Rogersville; Micky Hammon, R-Decatur; Alan Harper, R-Aliceville; Ed Henry, R-Hartselle; Mike Hill, R-Columbiana; Joe Hubbard, D-Montgomery; Mike Hubbard, R-Auburn; Jamie Ison, R-Mobile; Ken Johnson, R-Moulton; Ron Johnson, R-Sylacauga; Wayne Johnson, R-Huntsville; Mike Jones, R-Andalusia; Paul Lee, R-Dothan; Wes Long, R-Guntersville; Jay

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Love, R-Montgomery; Barry Mask, R-Wetumpka; Jim McClendon, R-Springville; Mary Sue McClurkin, R-Pelham; Mac McCutcheon, R-Capshaw; Steve McMillan, R-Bay Minette; John Merrill, R-Tuscaloosa; Barry Moore, R-Enterprise; Becky Nordgren, R-Gadsden; Jeremy Oden, R-Vinemont; Jim Patterson, R-Meridianville; Bill Poole, R-Northport; Kerry Rich, R-Albertville; Bill Roberts, R-Jasper; Oliver Robinson, D-Birmingham; John Rogers, D-Birmingham; Rod Scott, D-Fairfield; David Sessions, R-Grand Bay; Harry Shiver, R-Bay Minette; Allen Treadaway, R-Morris; Mark Tuggle, R-Alexander City; Lesley Vance, R-Phenix City; Kurt Wallace, R-Maplesville; April Weaver, R-Brierfield; Dan Williams, R-Athens; Jack Williams, R-Birmingham; Phil Williams, R-Huntsville; Randy Wood, R-Anniston; Greg Wren, R-Montgomery.

‘Reg-Flex’ bill gets House panel OK The House Committee on Commerce and Small Business approved HB 150, by Rep. April Weaver, R-Brierfield, the Small Business Flexibility Act of 2012, legislation that BCA has supported for several years. The bill defines the term “small business” as one being independently owned and operated and that employs less than 250 employees or has less than $25 million in sales. The bill further requires state agencies to

Rep. April Weaver speaks on the bill with Rep. Barry Moore at right

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analyze the impact(s) and to estimate the costs that their rules place on small businesses. The bill also provides that agencies periodically review their new and existing rules to ensure that they are still needed and to ensure that the agency has not overlooked less intrusive and less costly alternatives. The bill now moves to the full House.

Love, Marsh give session perspective The BCA Governmental Affairs Committee, gathering this week at its new Monday afternoon meeting time, heard remarks from two of the legislature’s most influential members—Senate President Pro Tempore Del Marsh, R-Anniston, and House Ways and Means Education Committee Chairman Jay Love, R-Montgomery. Love outlined what he termed the three main priorities of the 2012 legislative session: jobs, education reform and crafting workable budgets, given the current tenuous state of government finances. “Other states around us have adjusted to what Alabama has been doing very effectively over the past 15 or 20 years starting with Mercedes, Hyundai, Honda and ThyssenKrupp,” Love said, referring to proposed job creation legislation approved later this week by the House. “We have had a great run in terms of economic development coming to this state, but the other states are catching up, and we want to give those who negotiate these deals every tool they can have to bring those prospects and jobs to Alabama.” Love noted that a healthy job market brings more revenue into the state’s coffers and cited figures that show for every 1 percent drop in Alabama’s unemployment rate, the Education Trust Fund budget receives an additional $160 million in new revenue. Alabama’s economic recovery over the next few years will be fragile, Love predicted, and could be affected by events and turmoil in places as far away as Europe.

Economic turnaround predicated on education reform Love said part of the state’s economic turnaround will also be predicated upon education reform, and he highlighted two bills that will play an important role in that process. One provides local school systems with

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more flexibility in the regulations they must follow and another allows for the creation of charter schools as a pilot program in Alabama. Love added that the two bills may be combined into one before session’s end. “I am very committed to charter schools, and I think, if you look at the public school system here, in Montgomery, we would be a poster child for why we need charter schools in this state,” Love said. “What ultimately comes out in terms of legislation is still to be determined, however.” The budget committee chairman said a suggestion by the Bentley administration that revenue earmarked for public education could be used to buoy programs within the anemic General Fund budget was not well received by members of the legislature and will not be implemented. The ETF, he said, is suffering its own shortfall of roughly $140 million compared to FY2012 due largely to the Rolling Reserve Budget Act, which was passed by the legislature last year and requires revenue estimates to be based on a several year rolling average rather than unreliable economic predictions. Because of its almost $6 billion size, Love said the ETF can better absorb a shortfall than the much smaller General Fund. “While the Rolling Reserve is difficult medicine to take right now, eventually we are going to have to take it,” Love said. “We are going to be able to manage the cuts fairly effectively with only minimal impact on the classroom level.” Marsh followed by saying the level of reform instituted thus far in the quadrennium has left him optimistic, and he feels certain that future positive changes are soon to follow. He referenced an Efficiency Division located on the third floor of the Alabama State House that is looking into reducing duplication of state services and possible consolidation of several state agencies over time. “We have met with the governor, and some of these efficiencies can be implemented simply by executive order while other changes and consolidations will have to take place by statute,” Marsh said. “It will probably take a five-year process to get to a fully efficient state government because we want to do it in a way that the state can absorb these changes over time.” He said that predictions of his caucus losing unity after a first year “honeymoon period” during the quadrennium have proven wrong and added that some senators from across the aisle have indicated a desire to work in a more bi-partisan and friendly manner than in years past.

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“The body as a whole — Republicans, Democrats and our Independent — seem to understand we’ve got to work together during these tough times for the good of the state,” Marsh said. “I feel very confident that having the jobs bills up early will set a good mood for the state and help us, as leaders, provide hope to our citizens that things are going to get better.”

Metal theft bills advance in committees Two bills designed to combat metal theft passed House and Senate committees this week. SB 35, sponsored by Sen. Ben Brooks, R-Mobile, passed the Senate Judiciary Committee on Wednesday by a vote of 9-0. HB 278, sponsored by Rep. Bill Poole, R-Northport, passed the House Judiciary Committee on Thursday by a voice vote. Following approval of the bills, BCA President and CEO William Canary said, “From churches and schools to hospitals, cemeteries and farms and even our own homes, metal theft affects all of us. At the same time, I commend the sponsors of these bills for recognizing that the scrap recycling industry is a critical component of our economy, a key link in

Rep. Bill Poole explains bill to House Judiciary Committee

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the manufacturing supply chain and a leader in job creation. We urge the Alabama Legislature to approve these bills.â&#x20AC;?

House approves unemployment compensation fraud law changes Â Changes to Alabamaâ&#x20AC;&#x2122;s unemployment compensation fraud law are one step closer to becoming law. HB 72, by Rep. Paul DeMarco, R-Homewood, passed the House of Representatives by a vote of 74-15. Under current law, a person who fraudulently misrepresents that he is unemployed for the purpose of receiving unemployment compensation benefits cannot be disqualified from receiving benefits. HB 72 changes that. For a first offense, the bill would institute a 52-week disqualification of benefits, beginning from when the fraud is determined, or until the amount that was awarded fraudulently is repaid in cash. For subsequent violations, the disqualification of benefits would be for 52 weeks until the fraud overpayment is repaid. Any federal or state funds due to the claimant could be intercepted by the Department of Industrial Relations (DIR) to repay the debt. The bill also further strengthens the penalties associated with fraudulent misrepresentation. Fraudulent benefits exceeding $2,500 would constitute a Class B felony, benefits between $500-$2,500 a Class C felony, and those under $500 a Class A misdemeanor. In lieu of fines, the guilty person would pay restitution to DIR of at least the amount of benefits obtained. Currently, unemployment fraud cases are prosecuted the same as theft of property cases, but the penalties have been inconsistent with the crime. Rep. DeMarco told members of the House that new penalties created in HB 72 would remedy the disparate prosecution of unemployment compensation fraud because it will strengthen penalties to mirror existing theft of property statutes. BCA supports this bill.

House committee approves changes in unemployment compensation law The House Commerce and Small Business Committee gave a favorable report to HB 285, by Rep. Jack Williams, R-Birmingham. The bill would establish a one-week waiting period during the first compensable week of unemployment compensation benefits for individuals seeking

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unemployment compensation benefits. The bill would amend current law that applies a one-week waiting period after the 13th compensable week of paid unemployment benefits. Individuals would be eligible to receive benefits for 26 consecutive weeks beginning with the second compensable week. The new waiting period would save the Unemployment Compensation Trust Fund $14.5 million dollars in the first year of implementation, according to the Alabama Department of Industrial Relations. Bill opponents dispute this claim, saying that because the average person is back to work within 12 weeks of being unemployed, he or she typically does not encounter the waiting period. The bill now goes to the full House.

Senate committee OKs options for employment verification SB 195, by Sen. Paul Sanford, R-Huntsville, would provide Alabama business entities and employers with options to verify the employment eligibility and immigration status of their workers. In addition to the federal E-Verify program, businesses would also be allowed to utilize the AL Verify program developed by the Center for Advanced Public Safety at the University of Alabama, the E-Verify employer agent service established by the Alabama Department of Homeland Security or a valid, unexpired Alabama driver’s license or nondriver identification card to verify the employment eligibility status of workers. The bill would also give the same options to subcontractors who are awarded state contracts, grants or incentives. Under existing law, an individual conducting a “business transaction” with the state is required to verify his or her citizenship when applying for or renewing a vehicle license plate, a driver’s license, nondriver identification card or a business license. SB 195 substitutes a “license transaction” for a “business transaction” and specifies that a license transaction would not include the renewal of any of those transactions or any other license required by the state; rather, the proof of citizenship would only apply to the initial application submitted. SB 195 received a favorable report from the Senate Job Creation and Economic Development Committee by a vote of 6-2. The bill now goes to the full Senate.

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House committee gives favorable report to impairment evidence bill Under existing law, a failed drug test in the workplace is conclusive evidence of impairment in workers’ compensation cases. However, the burden is on the employer to prove that the impairment from drugs or alcohol actually caused the accident. HB 104, by Rep. Paul DeMarco, R-Homewood, seeks to change that. If passed, neither medical or indemnity benefits would be awarded to an employee if the employee’s injury was a direct result of an impairment or intoxication. Also, the burden would be on the employee to prove that the impairment did not cause the accident when a positive drug test or blood alcohol content level of .08 percent is present. The bill further allows the employer to request a hearing within 60 days of the failed drug or alcohol test and for a judge’s ruling within 15 days of the hearing. The employer must continue to pay medical benefits until the medical provider is notified by the judge that the employer is no longer responsible for payment of the employee’s medical treatment. HB 104 passed the House Judiciary Committee on a voice vote. It now awaits consideration by the full House. BCA supports this bill.

Committees approve bills expanding incentives for state’s film industry HB 243, by Rep. Terri Collins, R-Decatur, and its companion SB 290, by Sen. Gerald Dial, R-Lineville, received favorable reports from their respective committees, despite opposing testimony by the Alabama Education Association. The bill doubles the aggregate annual amount of taxes that production companies in the entertainment industry may recoup via rebate, from $10 to $20 million. It also doubles the cap on the size of each eligible entertainment project, to allow more and larger film projects to be eligible for incentives in the future. Before film incentive legislation was enacted in 2009, with a few exceptions, Alabama had been frequently passed over as a location for major film projects. The incentives have made Alabama competitive for film projects. However, according to proponents of the bill, Alabama is

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just receiving a small portion of its potential share of film projects because of the limitations in place under current law. The bills now move on to the House and Senate.

Committees approve some election bills, stop others The House Constitution, Campaign and Elections Committee on Wednesday approved a handful of election bills that will require only minor changes to state law. The bill that received the most attention and opposition at a public hearing was HB 44, by Rep. Jack Williams, R-Birmingham. Under this legislation, campaign volunteers would be required to remain 150 feet away from the door of any polling place on election day. Current law only requires individuals handing out political information to remain 30 feet away from the door of any polling place. The committee approved the measure after representatives from AEA, the Alabama Democratic Conference and the Probate Judges Association spoke out against it. Also on Wednesday, the House Ethics and Campaign Finance Committee took up three election bills, two of which were immediately sent to a subcommittee, which effectively kills the legislation. HB 200, by Rep. Chris England, D-Tuscaloosa, would prevent a corporation from contributing to a political action committee. HB 207, by Rep. Merika Coleman, D-Birmingham, would limit contributions made to candidates from individuals, corporations, business groups and political parties to $500 per election that the candidate’s name is on the ballot. One bill approved by the House Ethics and Campaign Finance Committee was HB 246, by Rep. Marcel Black, D-Tuscumbia. This legislation would provide that a candidate who does not file a timely report of contributions and expenditures to the Secretary of State’s office would be subject to a fine of $100 for each day past the deadline that the report is due. This bill now goes to the full House.

Washington Br iefing

Congress Reaches Deal on Payroll Tax Cut Extension House and Senate negotiators came to a bipartisan agreement this week on extending the payroll tax cut and unemployment benefits through the end of the year. The current reduction of two percentage points in the

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6.2-percent Social Security payroll tax would continue through the end of the year. The turning point in the negotiations came when Republican leaders decided that the payroll tax package will not require offsetting costs for the tax holiday, which costs an estimated $100 billion. In addition, the agreement would prevent a 27 percent cut in Medicare reimbursements paid to physicians treating Medicare patients. This socalled “doc-fix” and the extension of unemployment benefits tacked on about $50 billion to the agreement. Finding new revenue and spending cuts to offset the $50 billion cost became the sticking point in reaching an agreement. Negotiators agreed to require new federal employees, beginning next year, to contribute 2.3 percent more of their salaries to their pension plans than current federal employees. Negotiators also reduced the current maximum of unemployment benefits from 99 weeks to 73 weeks in states with the highest unemployment and reduced benefits to 63 weeks in states that have been moderately affected by the recession. An additional $15 billion would be achieved by selling radio spectrum to telecommunications companies. Both chambers are expected to pass H.R. 3630 later today.

President Obama Delivers Budget to Congress President Barack Obama on Monday delivered to Congress his budget proposal for fiscal year 2013. The president’s budget proposal normally serves as a starting point for Congress to consider; however, this year, everyone seems to agree the president’s $3.8 trillion budget stands no chance of passing. The president’s budget proposes ending the Bush-era tax cuts for families who earn more than $250,000, restoring the estate tax to its 2009 level, limiting subsidies for oil and gas companies and raising the tax rate on dividends from 15 percent to as much as 39.6 percent for families making more than $250,000. The budget also suggested that the alternative-minimum tax (AMT) should one day be replaced with the so-called Buffett Rule, which would require those earning more than $1 million to pay a tax rate of at least 30 percent.

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The president’s $3.8 trillion budget includes some $1.6 trillion in tax increases and would result in a $1.33 trillion deficit in 2012 and a $900 billion shortfall in fiscal year 2013. Sen. Jeff Sessions, ranking member of the Senate Budget Committee, called the president’s budget, “one of the most spectacular fiscal cover-ups in American history.” In a statement following the submission of the budget Sessions said, “The White House claims they have introduced a plan to achieve $4 trillion in deficit reduction... But these assertions rely on a calculated series of budget gimmicks. An honest analysis proves that the president’s plan achieves only $273 billion in total deficit reduction over 10 years... Under this plan, we will accumulate $11 trillion in new gross debt... The vision the president has laid out today leads to a bigger government, a smaller middle class and a painful debt crisis.”

House Begins Debate on Transportation and Energy Bills On Wednesday, the House began consideration of the American Energy and Infrastructure Jobs Act of 2012 (H.R. 7). The bill is a longterm surface transportation reauthorization that maintains current funding levels and would streamline the permitting process to reduce bureaucratic delays. The bill also would expand domestic energy production and approve the Keystone XL pipeline. The House is expected to complete debate on the energy provisions this week and take up the transportation infrastructure provisions during the week of February 27. Last month, the Business Council of Alabama joined the U.S. Chamberled coalition, Americans for Transportation Mobility Coalition, in calling for passage of a multi-year highway and transit bill this spring. The Americans for Transportation Mobility Coalition is a nationwide effort by business, labor, transportation organizations and concerned citizens to advocate for improved and increased federal investment in the nation’s aging and overburdened transportation system. Visit www. fasterbettersafer.org for more information.

CHAPTER 4 February 20, 2012

F I N A L L Y A P L A N TO F I X T HE GROSS INCOME PROBLEM “The probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.”

ABRAHAM LINCOLN

he House Ways and MeansEducation Committee gave a favorable report to HB 286, by Rep. Jay Love, R-Montgomery, sending the bill to the House. This bill would fix, once and for all, the Department of Revenue’s problems with the “Gross Income” issue. As committee members struggled to re-learn the history behind the issue, an AEA spokesperson attempted to convince the members to defeat the legislation. For years, the department has been caught in the middle of a conflict between the state income tax statutes and the department’s own regulation. BCA Tax and Fiscal Policy Chairman Readers will remember that the statute Marty Abroms tells committee HB 286 is directed Alabama resident owners/ needed partners of “pass-through” entities that do business in multiple states to report their shares of the entity’s income from all sources. A departmental regulation, however, instructed the taxpayers to report their shares of the entity’s income earned in Alabama. 31

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A taxpayer who followed the regulation and applied all of his/her federal income tax deduction could then reduce or eliminate all of his state income tax liability. In the last regular session, however, the BCA, the Business Association Tax Coalition (BATC) and the Bentley administration negotiated compromise legislation, which passed the House overwhelmingly, but died, along with other bills, on the last night of the session when a filibuster blocked it from coming before the Senate. Following the session, all parties that had agreed to the compromise bill agreed that all would work for the bill’s passage when the legislature reconvened. The compromise bill would require the taxpayer to recognize his/her share of income from all sources, and the taxpayer would receive credits for entity-level, income-like taxes paid to other states and receive a 50-percent credit for income taxes paid to foreign countries. BCA Tax and Fiscal Policy Committee Chairman Marty Abroms, a certified public accountant from Florence, traveled to Montgomery to speak to the committee on behalf of the bill, stressing that if the 50-percent foreign tax credit is not passed it would result in double taxation. For years, the BCA offered in vain to work in good faith with the key parties to resolve this issue. The BCA worked in good faith last year to come up with a mutually equitable solution outlined in HB 286 and is still working diligently to fulfill its promises to enact the compromise legislation.

Senate passes metal theft bill The Senate on Thursday passed the substitute to SB 35, sponsored by Sen. Ben Brooks, R-Mobile, by a vote of 28-2-1. The bill would impose more stringent requirements on those in the scrap metal recycling industry. These businesses would be required to maintain for one year additional records relating to the purchase of scrap metal, including both a copy of the personal identification card of the person delivering the metal to be sold, a digital photograph or video recording of that same person, and the vehicle license tag number and state of issue of the person delivering the metal property, among other items. Businesses that fail to obtain and maintain these records would face criminal penalties. SB 35 also would classify as a felony the theft of certain metal property, including telephone, cable and power lines and poles; railroad materials;

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manhole covers; grave markers; and any metal property taken from a school or church. Cash transactions would be limited to no more than $50 for copper, air conditioning coils and catalytic convertors. Persons younger than 18 years old would not be allowed to sell metal property, and metal property would only be purchased between 6 a.m. and 9 p.m. A similar bill, HB 278, sponsored by Rep. Bill Poole, R-Northport, passed the House Judiciary Committee last week. BCA supports this legislation.

Committee approves $650 million bond issue for rural roads and bridges The Senate Committee on Agriculture, Conservation and Forestry discussed and gave a favorable report to SB 339, by Sen. Paul Bussman, R-Cullman, which provides for the issuance of up to $650 million in bonds for construction and improvements of rural roads and bridges. The bill creates the Public Road and Bridge Construction Council, whose members will be the director of the department of transportation, the lieutenant governor, the commissioner of agriculture, the president pro tem of the Senate and the speaker of the House. The council would review project proposals submitted by the counties and authorize funding, giving priority to rural economic development and rural education projects. As an alternative to SB 339, Gov. Robert Bentley, in remarks Thursday to the 55th Annual Alabama Transportation Conference, outlined the use of GARVEE (Grant Anticipation Revenue Vehicles) bonds as a way to finance highway and transit infrastructure and help the state recruit jobs. “In this time when state dollars are limited, GARVEE bonds will allow us to pave today’s roads with tomorrow’s federal dollars,” Bentley said. “Through the use of these bonds, we can fund much-needed road projects now, rather than wait for federal funding years from now.” BCA is monitoring this legislation, which now moves to the full Senate, and the governor’s plans.

Panel approves bill providing for state ‘New Market Development Program’ The House Economic Development and Tourism Committee favorably reported a substitute version of HB 257, by Rep. Jamie Ison, R-Mobile,

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that would provide tax credits for investments in qualified community businesses in low-income communities. If enacted, Alabama will join states such as Florida, Mississippi and Illinois that already have state New Market Development Programs that are modeled after the New Market Tax Credit Program established by Congress in 2000. The federal program promotes investments in businesses and real estate projects located in low-income communities. When state incentives are coupled with federal incentives, community leaders have a potent tool to revitalize low-income census tracts in downtown core areas and central business districts. The bill caps the credit at $5 million per transaction over a seven-year period, sets an aggregate cap of $20 million annually and limits the taxpayer’s credit to not more than the taxpayer’s state tax liability. BCA supports this bill, which now will be considered by the full House

Coal mining incentives cut by 50 percent in Senate-passed bill HB 144, by Rep. Bill Roberts, R-Jasper, provides that projects in the coal mining industry would be eligible for the state’s capital credits and other abatements under the state’s “Mercedes” incentive law, but the incentives would be limited to 50 percent of the amount otherwise available to other industries. The Senate adopted an amendment offered by Sen. Trip Pittman, R-Daphne, that cut the credits and abatements in half for coal mining companies and excludes the coal company’s costs of acquiring land and the related preliminary engineering, architectural and environmental costs from the “capital costs,” which are otherwise recoverable for other qualifying industries. This bill will now return to the House, where the Senate’s changes to the bill will be considered.

Bills to extend the term of state’s capital credits make progress SB 48, by Sen. Arthur Orr, R-Decatur, and its companion HB 140, by Rep. Mickey Hammon, R-Decatur, provide that businesses that qualify for the state’s income tax capital credits may carry forward the credits for up to four additional years. A Revenue Department report on the actual utilization of capital credits shows that significant portions of credits are not taken because many companies are not profitable in their early years of operation.

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Qualifying companies that create at least 100 jobs and make investments of at least $100 million may have up to an additional four years to take the credits. BCA supports this legislation.

Senate committee OKs ‘Reg-Flex’ bill The Senate Business and Labor Committee approved SB 222, by Sen. Bill Holtzclaw, R-Madison, the Jobs Impact Act of 2012 legislation that BCA has supported for several years. The bill defines the term “small business” as one being independently owned and operated and which employs less than 250 employees or has less than $25 million in sales. The bill further requires state agencies to analyze the impact(s) and to estimate the costs that their rules place on small businesses. The bill also provides that agencies periodically review their new and existing rules to ensure that they are still needed and to ensure that the agency has not overlooked less intrusive and less costly alternatives. The bill now moves to the full Senate. The companion bill, HB 150, by Rep. April Weaver, R-Brierfield, passed the House Commerce and Small Business committee last week, and now awaits consideration by the full House. BCA supports this legislation.

Bill would promote Alabama artists by establishing cultural districts The House Committee on Economic Development and Tourism favorably reported a bill to give Alabama’s art industry a boost. HB 142, by Rep. Terri Collins, R-Decatur, authorizes the governing bodies of Alabama municipalities to designate cultural districts that are hubs of cultural activity and have affordable artist housing and workspace within their corporate limits. The bill further provides sales tax exemptions on sales of “one-of-a-kind limited” pieces of art created by an artist living in the cultural district. The bill designates the Alabama Council on the Arts to develop the standard criteria for the establishment of cultural districts. BCA is monitoring this bill, which now will be placed on the House calendar for consideration.

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In Other News

More work needed on unemployment compensation fraud bill Under current law, a person who fraudulently misrepresents that he is unemployed for the purpose of receiving unemployment compensation benefits cannot be disqualified from receiving benefits. SB 137, by Sen. Paul Bussman, R-Cullman, changes that by instituting a three-year disqualification of benefits, beginning from the date when the fraud is determined and until the amount that was awarded fraudulently is repaid in cash. Any federal or state funds due to the claimant could be intercepted by the Department of Industrial Relations (DIR) to repay the debt. A similar bill, HB 72 by Rep. Paul DeMarco, R-Homewood, passed the House last week by a vote of 74-15. BCA supports this bill. SB 137, which would set up a three-year disqualification of unemployment compensation benefits, received a public hearing in the Senate Business and Labor Committee, but the committee delayed voting until more work could be completed on the bill.

Senate committee approves waiting period change The Senate Job Creation and Economic Development Committee gave a favorable report to SB 300, by Sen. Trip Pittman, R-Daphne. The bill would establish a one-week waiting period during the first compensable week of unemployment compensation benefits for individuals seeking unemployment compensation benefits. The bill would amend current law that applies a one-week waiting period after the 13th compensable week of paid unemployment benefits. Individuals would be eligible to receive benefits for 26 consecutive weeks beginning with the second compensable week. The new waiting period would save the Unemployment Compensation Trust Fund $14.5 million dollars in the first year of implementation, according to the Alabama Department of Industrial Relations. Bill opponents dispute this claim, saying that because the average person is back to work within 12 weeks of being unemployed, he or she typically does not encounter the waiting period. The bill now goes to the full Senate.

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The companion bill, HB 285, by Rep. Jack Williams, R-Birmingham, passed the House Commerce and Small Business committee last week and is awaiting approval from the full House.

Senate bill would make more changes in unemployment compensation law SB 77, by Sen. Arthur Orr, R-Decatur, seeks to revise portions of the workers’ compensation law. After hearing testimony on the proposed changes, the Senate Business and Labor Committee gave the bill a favorable report with the agreement from Sen. Orr that he would work to resolve the concerns that were presented. SB 77 would make five changes to the 37-year-old law. It would: % Require an employee to provide to the trial court more evidence than simply his or her pain complaints in order for the employee to receive more compensation than what is allowed under the law for the total loss or loss of use of the specific body part.

% Terminate benefits for permanent total disability (PTD) when the employee reaches age 65 or 500 weeks after the date of the injury, whichever is longer. % Increase the maximum weekly compensation for permanent partial disability (PPD) to $240. Currently the maximum amount is $220 per week.

% Relieve the employer from paying for an injured employee’s treatment if the employee does not receive medical treatment related to the claimed injury for a period of two years unless the employee can provide “clear and convincing proof ” that the treatment is related to the workers’ compensation injury. If the employee doesn’t seek medical treatment for four years after the injury, the employer is fully absolved from payment of medical benefits. % Provide an “evidentiary standard of appeal.”

The BCA will continue to work with Sen. Orr on comprehensive workers’ compensation reform.

CHAPTER 5 February 27, 2012

SENATE BEGINS DEBATE ECONOMIC DEVELOPMENT BILLS

“Insanity: doing the same thing over and over again and expecting different results.”

ALBER T EINSTEIN

he Senate Finance and Taxation-Education Committee heard testimony from both proponents and opponents of HB 160, the enabling bill, which — with the proposed constitutional amendment HB 159 — comprises the Alabama Job Creation and Retention Act. Sponsored by Rep. Barry Mask, R-Wetumpka, the bills would allow a new or existing business to retain a percentage of its employees’ state income tax withholdings to offset the cost of acquiring or expanding its facility, but not more than the cost of the facility. Supporters of the legislation pointed out that the concept may be new to Alabama, but it is being used by 19 other states that are now winning projects that Alabama once competed for, until the state no longer provided direct financial incentives. Alabama Development Office Director Greg Canfield emphasized that the legislation provides continuity, protections and safeguards, including the public disclosure of cost-benefit analyses when negotiations are finalized. Canfield also stressed that for retention projects, the employer must agree to remain in the state at least five years and make an investment of at least $1 million in non-favored geographic areas and at least $500,000 in favored geographic areas. Sen. Phil Williams, R-Rainbow City, who is handling the bill in the Senate, described the competition among the states for industrial prospects as analogous to a soldier in a war zone who needs access to the best weapons available. 39

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Proponents also circulated a handout by the Alabama Development Office that showed that for three real-world projects, the new revenue to the state would have far exceeded the cost of incentives, had the incentives provided for in this legislation been available. Opponents continued to lament that the bill puts too much discretion under the governor and provides too few assurances that sufficient jobs would be created to justify the cost of incentives. Again, it was asserted that the legislation would move Alabama down to 50th in per-student funding. It also was asserted that the powers it gives to the governor to grant incentives could be abused for political purposes, to leverage campaign contributions. Also speaking in opposition to the bill was Dr. Craig Pouncey, deputy superintendent for Finance and Administration at the State Department of Education, who urged committee members to be wary of the volume of incentive legislation, some of which he believes to be not well reasoned, as funding for public education has endured several lean years. The committee delayed voting on HB 160 until its meeting next week. BCA supports the Job Creation and Retention Act.

Galliher, Surtees stress importance of economic incentives bills Rep. Blaine Galliher, R-Gadsden, chairman of the powerful, agendasetting House Rules Committee, and Tom Surtees, who pulls double duty as the cabinet-level director of the Alabama Department of Industrial Relations and is also legislative director for Gov. Robert Bentley, were the featured speakers during this week’s meeting of the BCA Governmental Affairs Committee. Galliher, now serving his fifth term in the legislature, highlighted the importance of incentive legislation like House Bills 159 and 160, which were recently approved by the House and sent to the upper chamber for consideration (see previous story). HB 159, a constitutional amendment that will go before voters in November if approved by the Senate, would allow the governor and the state’s economic recruiting arm more authority to offer incentives to potential large employers and mega-projects when competing against other states. The bill also provides them the ability to encourage existing large employers to remain in Alabama when they are tempted to relocate.

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He noted that both HB 159 and its enabling legislation HB 160, are strongly opposed by the Alabama Education Association, which argued both had the potential to drain resources from the state’s Education Trust Fund. “I have argued with [AEA] for years on the need for incentives for industry, and not only for new industries, but for existing industries, as well,” Galliher said. “About three years ago, I brought executives with Goodyear Corporation [which has a major manufacturing facility located in Galliher’s district] to meet with BCA and discuss the very real possibility that its Gadsden plant was going to leave Alabama. At that time, I proposed a capital reinvestment act, similar to the one contained in HB 159, that the state needed in order to convince existing industries to maintain roots within Alabama.” According to Galliher, the Gadsden Goodyear plant employs roughly 1,600 people with an average salary of about $40,000 to $50,000 a year and provides each with what he termed a “gold-plated benefits package” through Blue Cross/Blue Shield. The loss of those jobs, he said, would devastate the community, a fact he has shared with the local hospital administrator and other area leaders. But successful passage of the HB 159 constitutional amendment will help preserve the Goodyear jobs and others like them around the state, Galliher said. “We were able to pass HB 159 and HB 160 out of the House only with the help of the Business Council of Alabama, the Alabama Power Company and various other groups,” Galliher said. “Now it is in the bosoms of our good brethren in the Senate, and I hope they will hold firm because it is the right thing to do.” Galliher implored those in attendance to get involved in the referendum election, should HB 159 go to the public for ratification, and work to counter the efforts of interest groups who oppose it. “There are people who believe what the opposition is saying just because it is in print,” Galliher said. “Now it’s our job to rebut that, change their minds and show them what the real story is because we are not only working for today’s jobs, we are also deciding whether our grandchildren will have jobs for decades to come.” Surtees, who was introduced as a long-time BCA member and former committee chair, outlined the priorities assigned to him by the governor in

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his new role as the Bentley administration’s director of legislative affairs: jobs, education, health and transportation. Funding for groundbreaking education programs like the Alabama Reading Initiative; the Alabama Math, Science and Technology Initiative; ACCESS Distance Learning; and pre-kindergarten are protected in the budget Bentley submitted to the legislature, according to Surtees. “We have essentially doubled funding for access to advanced placement programs for students in the Black Belt,” Surtees said. “And we have included funding for a $300 tax credit - not a deduction but a dollar-fordollar tax credit - for public school teachers who purchase work supplies.” He predicted that the upcoming debate over charter schools, which are public schools that are allowed leeway in the education processes they employ so long as they produce expected results, will become as contentious as the discussion over HB 159 and will likely include some of the same type of misinformation being spread by opponents. “I read one piece opposing HB 159 that said if 200 employers hire 1,000 people each, it will cost the Education Trust Fund several hundred million dollars,” Surtees said. “The truth is, if 200 employers hired that many workers, it would create 200,000 new jobs, and since we only have 165,000 people unemployed in Alabama, we’d have to import workers from other states.” In addition to allowing public charter schools to enjoy freedom from Education Department regulations, Surtees said another Bentleysupported bill would allow entire school systems to apply for waivers from rules and regulations they find cumbersome and obstructive to meeting their goals. He told the group that a federal program offering low-interest roadbuilding bonds, known as GARVEE Bonds, has provided the state an opportunity to make needed road and bridge improvements while saving money on future costs. “We can borrow money using GARVEE bonds on a 1.5 percent interest rate as opposed to the inflation rate on future road projects going up 4 to 6 percent, so it just makes sense to start projects now instead of waiting until later,” Surtees said. “We can let these GARVEE bonds at $250 million increments, but we aren’t looking to four-lane every two-lane road in the state. We are looking to maintain our roads and certainly upgrade our posted bridges that do not allow trucks or school buses to pass over them.”

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A variety of incentives for manufacturers, the coal industry, the film and television industries and others make up the cornerstone of Bentleyâ&#x20AC;&#x2122;s job creation package, Surtees said. Streamlining state government is yet another Bentley priority, and Surtees said legislation that would combine the Childrenâ&#x20AC;&#x2122;s Affairs agency and the Office of Multiple Needs Child into the Department of Human Resources will soon be filed, along with a bill to combine the Department of Labor and the Department of Industrial Relations into one Department of Labor. Measures to make it easier for Alabama-based businesses to bid on projects with the state, an unemployment compensation fraud crackdown bill, a Taxpayersâ&#x20AC;&#x2122; Bill of Rights and other pro-business measures round out the executive agenda, he said.

House passes metal theft bill The House on Thursday passed the HB 278, sponsored by Rep. Bill Poole, R-Northport, by a vote of 83-8. A similar bill, SB 35, sponsored by Sen. Ben Brooks, R-Mobile, passed the Senate last week. Both bills would impose more stringent requirements on those in the scrap metal recycling industry, requiring these businesses to maintain for one year additional records relating to the purchase of scrap metal, including both a copy of the personal identification card of the person delivering the metal to be sold, a digital photograph or video recording of that same person, the vehicle license tag number and state of issue of the person delivering the metal property. Those businesses that fail to obtain and maintain these records would face criminal penalties. HB 278 would classify as a felony the theft of certain metal property, including telephone, cable and power lines and poles; railroad materials; manhole covers; grave markers; and any metal property taken from a school or church. It also raises the crime to a felony if the theft or destruction of these items causes imminent danger to the health and safety of the public. Cash transactions would be limited to no more than $50 for copper, air conditioning coils or catalytic convertors. Persons younger than 18 years old would not be allowed to sell metal property, and metal property would only be purchased between 6 a.m. and 9 p.m. HB 278 would also require scrap metal recyclers to register with the Alabama Criminal Justice Information Center (ACJIC) or other

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responsible state agency and transmit electronically all of their business transactions to the database each day. An amendment was offered and accepted that allows only properly authorized law enforcement agencies to access this data. BCA has been a part of the broad coalition of business and manufacturing leaders, energy providers, law enforcement, municipalities, churches, scrap recyclers and lawmakers working together for months to develop this legislation to address this growing epidemic. BCA supports this legislation.

Bill to provide incentives for coal industry transmitted to governor HB 144, by Rep. Bill Roberts, R-Jasper, is the first of the job creation bills to pass the Alabama Legislature this session. The bill provides that projects in the coal mining industry will be eligible for the state’s capital credits and other abatements under the state’s “Mercedes” incentive law, but the incentives will be limited to 50 percent of the amount otherwise available to other industries. Both the House and the Senate agreed to a conference committee report that also excludes the coal company’s costs of acquiring land and the related preliminary engineering, architectural and environmental costs from being included as “capital costs,” which are otherwise recoverable for other qualifying industries. The governor may sign the bill or return it to the legislature with an executive amendment.

Bills seek an erosion of employer constitutional property rights and would destroy jobs in Alabama Once again, companion bills have been introduced in the Alabama Legislature that would erode the constitutional property rights of individuals and businesses. SB 331, by Sen. Paul Sanford, R-Huntsville, and HB 471, by Rep. Craig Ford, D-Gadsden, violate the rights of property owners by making it illegal for businesses and individual property owners to establish a policy that prohibits anyone from bringing a gun onto that person’s property. Although the bills specifically target businesses and employers, they also authorize new lawsuits against anyone in Alabama

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who owns property and denies a person with a gun access to carry the gun on that property. In fact, the bills violate both the Alabama and U.S. Constitution-guaranteed property rights. As stated in the Alabama Constitution: “the sole object and only legitimate end of government is to protect the citizens in the enjoyment of life, liberty, and property and when the government assumes other functions it is usurpation and oppression.” Alabama Const. of 1901, Section 35. Private companies in Alabama are already struggling with excessive rules and regulations that burden their operation and increase their costs. The inescapable result of this legislation would be to increase employer costs — including insurance costs — and the loss of jobs. Particularly in the current economic environment, government should not intrude on private property rights in a manner that results in more Alabamians finding themselves out of work. More egregiously, these bills are essentially a dream come true for trial lawyers. While Alabama businesses are already plagued with countless frivolous lawsuits, this proposal would add fuel to the fire. HB 471 and SB 331 would authorize an individual injured on property where there existed a no-guns policy to sue the property owner for his injuries. The creation of another cause of action against which property owners would be required to defend themselves is simply bad public policy.

Public hearing held on bill allowing ‘open carry’ of weapons The Senate Judiciary Committee held a public hearing on SB 337, by Sen. Scott Beason, R-Gardendale. The bill would authorize a person to carry a pistol in his or her vehicle without a concealed pistol permit and to carry a concealed pistol on another’s property. Proponents contend that persons should be allowed to carry weapons anywhere, including in their vehicles, and that law-abiding citizens must be able to defend themselves from any potential threats. Opponents in law enforcement argue that while they support a person’s right to carry a weapon, it is a safety issue, and if permits are no longer required, officers would not have any way to determine if a person is a convicted felon or if they could present some other form of danger. The committee is expected to vote on the bill next week. BCA’s 2012 Legislative Agenda states: We will oppose any legislation that allows persons to openly carry loaded or unloaded handguns in public or in the workplace.

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Committee to preview substitute version of Taxpayers’ Bill of Rights/Alabama Tax Appeals Commission Rep. Paul DeMarco, R-Homewood, chair of the House Judiciary Committee and sponsor of HB 105, will circulate among his committee members a substitute version of a bill that provides for an independent tax appeals tribunal and updates several provisions of the Alabama Taxpayers’ Bill of Rights. The BCA and other business associations under the auspices of the Business Associations Tax Coalition have supported this legislation for several years. The committee will consider HB 105 at its meeting next week. BCA supports this legislation.

House passes bill to expand incentives for film industry Amid the accolades for the state’s second Academy Award winner, Octavia Spencer, the Alabama House overwhelmingly passed HB 243, by Rep. Terri Collins, R-Decatur, on Tuesday by a vote of 101–0. The bill doubles the aggregate annual amount of taxes that production companies in the entertainment industry may recoup via rebate from $10 to $20 million, and it doubles the cap on the size of each eligible entertainment project, to allow more and larger film projects to be eligible for the incentives in the future. The entertainment incentives clearly have made Alabama competitive for film projects, as more than 60 percent of the current fiscal year’s allotment of film incentives has been awarded in the first four months of the year. Still, according to proponents of the bill, Alabama is receiving just a small portion of its potential share of film projects because of the limitations in place under current law. The bill now moves to the Senate.

Senate Committee cuts incentives for data centers, denies incentives for warehousing operations The House-passed version of HB 154, by Rep. Dan Williams, R-Athens, would extend the maximum term that abatements may be granted for data centers from 10 to 30 years and reduce the minimum number of new jobs from 50 to 20 that must be added to receive abatements or capital credits. The House-passed version also would broaden the definition of “industrial and research enterprise” to include warehouse and storage operations.

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HB 154 was favorably reported from the Senate Finance and TaxationEducation Committee to the full Senate but with provisions that are markedly different from the House-passed version. An amendment by committee Chairman Sen. Trip Pittman, R-Daphne, would:

1) Disallow purchases of computer software used in the data center’s operations to be tax exempt as a “construction related transaction tax.” 2) Double the capital investment thresholds necessary to receive abatements of 20 and 30 years.

3) Exclude the warehousing industry from qualifying for abatements and capital credits as “industrial or research enterprises.”

4) Add a sunset provision effective 12/31/2018 to the abatements and capital credits, unless the legislation is reauthorized every five years. 5) Deny the incentives in years when the state unemployment rate is less than 6 percent.

Several members expressed concerns that the denial of incentives to the warehousing industry might inadvertently exclude distribution centers, agricultural warehouses and auto equipment/parts warehouses. Sen. Pittman promised that before the bill is considered by the Senate, he would make sure that those businesses would be eligible for the incentives.

In Other News

Business would bear the brunt of costs from PBM licensure bill HB 254, by Rep. Ron Johnson, R-Sylacauga, would require the licensing and regulation of pharmacy benefit managers by the Alabama State Board of Pharmacy. Commonly known as PBMs, these companies contract with prescription drug companies and pharmacies to provide discounts and rebates to health insurance companies and self-insured employers who provide prescription drug coverage to their employees. PBMs simply manage prescription drug benefits for health insurance companies and large, self-insured employers that contract directly with them. They are not pharmacies, and should not be regulated or licensed by the Board of Pharmacy. Current law requires health insurance companies to regulate PBMs, so additional oversight would only increase costs for consumers because the Board of Pharmacy could require

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the PBMs to cover more expensive drugs, reimburse pharmacists at higher rates for dispensing the medications and pay licensing fees to the Board of Pharmacy, all of which would be passed on to the consumer — Alabama businesses. After much discussion, HB 254 was given a favorable report by the House Health Committee on a voice vote. BCA is opposed to any legislation or regulation that would increase health care benefit costs, in this case prescription drug costs, to Alabama consumers.

Judiciary committee approves constitutional amendment raising judicial retirement age The Senate Judiciary Committee on Wednesday approved SB 256, a constitutional amendment by Sen. Tom Whatley, R-Auburn, which will increase the retirement age of judges to 75. Under current law, no person may be elected or appointed to a judicial office after reaching the age of 70 years. Under the proposed amendment, a judge may be appointed to the office of supernumerary judge so long as he is not eligible to receive state judicial retirement benefits.

Washington Br iefing

BCA Urges Passage of Fair Interstate Corporate Taxation Bill On Wednesday, the Business Council of Alabama joined more than 150 businesses, trade associations and taxpayer groups from across the country in sending a letter to House Speaker John Boehner and Democratic Leader Nancy Pelosi urging them to pass H.R. 1439, the Business Activity Tax Simplification Act (BATSA). H.R. 1439 would set a uniform standard for state taxation of the income of non-resident companies, ending unfair, confusing and costly state corporate income taxation. If passed, H.R. 1439 would permit states to impose income-based taxes only on companies that have a physical presence in the taxing state. States would be prohibited from taxing the income of companies that solicit sales in the state. H.R. 1439 would not affect sales tax.

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The letter explains why H.R. 1439 should be approved. Among other things, the bill would create a “bright line” standard for business activity taxation, eliminate confusion for state tax administrators and businesses, and reduce audits, lawsuits and guess work. It would also encourage economic development and job growth. “Enactment of BATSA would lead to greater investment in U.S. business growth and jobs by clarifying the standards for imposition of business activity taxes by states and localities on multi-state businesses by resolving widespread uncertainty... If the bill were to become law, businesses would not be avoiding taxes. They would simply be paying taxes in the proper jurisdictions,” the letter said. The House Judiciary Committee approved BATSA by voice vote and reported it to the full House last summer.

House Passes Resolution Commemorating the 1965 Selma to Montgomery Marches The House on Thursday voted to pass a resolution, H.Res. 562, sponsored by U.S. Reps. Terri Sewell and Martha Roby, that directs the House historian to compile oral histories from current and former Members of Congress involved in the historic and annual Selma to Montgomery marches, as well as the civil rights movement. These documents will be used to expand and augment the historic record for public dissemination and education. “As a Selma, Alabama, native, I am proud and humbled to introduce this bi-partisan congressional resolution acknowledging the historical significance of the Selma to Montgomery marches, which led to the passage of the Voting Rights Act of 1965,” said Sewell. “This resolution ensures the preservation of the historical recollections of countless freedom fighters who served as members of Congress, such as my esteemed colleague Rep. John Lewis.” Roby said, “What took place during three historic marches in Alabama over a three-week period in 1965 proved to be a powerful transformation in American history. The courageous actions of so many moved our country out of an era of misguided actions. Participants marched towards a unified goal — to provide equal voting rights for all Americans.” The resolution passed the House by a vote of 418-0.

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Senate Tables ‘Conscience Exemption’ Health Care Amendment The Senate on Thursday voted 51-48 to table an amendment that would have allowed employers and insurers to opt out of parts of last year’s health care law on moral or religious grounds. The measure was an attempt to broaden the Obama administration’s controversial birth control health coverage rule, which only fully exempts explicitly religious organizations from requirements that worker health plans include contraceptive coverage with no out-of-pocket expenses. Under this amendment, any non-religious employer with a moral objection would have qualified. The measure was offered as an amendment to the highway funding bill.

CHAPTER 6 March 5, 2012

S I Z I N G U P T H E PS E U D O E P H E D R I N E B I L L “Those who can, build.”

ROBER T MOSES

he Business Council of Alabama welcomed new members to its Board of Directors on Tuesday as part of its annual Capital Leadership Day. The members were briefed by BCA staff on BCA’s legislative agendas, policies and upcoming events as well as their responsibilities as board members at a luncheon. The new members received special pins from First Vice Chairman Carl Jamison, then attended their first full board meeting and a business-education alliance policy forum presented by BCA and the Alabama School Readiness Alliance. When a state doesn’t invest adequately in educating its youngest children in high-quality pre-kindergarten programs, the long-term effects can result in widening achievement gaps, increased healthcare costs and additional burdens on business, according to W. Steven Barnett, director of the National Institute for Early Education Research (NIEER) at Rutgers University. Barnett spoke to the board and invited guests from the education community and state government about the proven economic return of funding pre-K programs. Alabama has an advantage, Barnett said, because its First Class voluntary pre-K program is in place and is “very high quality. It just needs to be available to more kids, and the business community understands that,” he said. The next step is to secure political support to drive up the enrollment without cutting the quality. “That will be the key to success,” he said. New members of the BCA board are: Pamela Burnham, Saraland Area Chamber of Commerce, Saraland 51

THE FOUNDATION FOR PROGRESS • 2012

Jeff Coleman, Coleman World Group, Midland City J. Danny Cooper, Alabama Association of REALTORS, Montgomery Edward Crowell, VT Miltope Corporation, Hope Hull Ron Davis, ZF Lemforder Corporation, Tuscaloosa Ashley Eiland, Andalusia Area Chamber of Commerce, Andalusia Al Garrett, Robertson Banking Company, Demopolis Keith Granger, Trinity Medical Center, Birmingham Perry Hand, Volkert, Inc., Mobile Bill Lyons, Lyons HR, Inc., Florence Sid McAnnally, Energen Corporation, Birmingham Mark Nix, Infirmary Health, Mobile Marty Parker, Boise Paper, Jackson Joanne Randolph, Women’s Business Center of North Alabama, Huntsville John Turner, Regions Financial Corporation, Mobile Phil Webb, Webb Concrete & Building Materials, Inc., Heflin Barry Whatley, Craftmaster Printers, Inc., Auburn Lisa Williams, System Dynamics International, Huntsville

BCA First Vice Chairman Carl Jamison presents BCA pin to new board member Lisa Williams

CHAPTER 6

BCA President and CEO William Canary, NIEER Director Steven Barnett and Chairman Terry Kellogg

Robert Vaughan, Alabama Self-Insured Worker’s Compensation Fund, Birmingham Morri Yancy, Lake Guntersville Chamber of Commerce, Guntersville Ronald Yarbrough, America Apparel, Inc., Selma Following the board meeting and forum, BCA hosted its annual Salute to State Leaders reception at the Montgomery Renaissance Hotel. More than 500 persons attended.

Cybercrime law update, jobs bills priorities for judicial panel chairs The chairmen of the Senate and House Judiciary committees — Sen. Cam Ward, R-Alabaster, and Rep. Paul DeMarco, R-Homewood, respectively — addressed this week’s meeting of the BCA Governmental Affairs Committee and outlined the bills and initiatives they consider priorities for their panels to address. Ward said that updating Alabama’s antiquated cybercrime law is fundamental to protecting citizens from one of the fastest-growing forms of larceny in the United States and noted that our state ranks 12th in the nation in the number of identity theft victims.

THE FOUNDATION FOR PROGRESS • 2012

“When our cybercrime laws were last updated in 1985, Ronald Reagan was president, New Coke was an idea being discussed, and Atari game systems were the closest thing to computers that families had in their homes,” Ward said. “Today, our iPhones have more technology, memory and ability to display information than all of the computers had at the time when our laws were last updated.” Laws currently on the books, Ward said, are insufficient to fight those who spread malicious viruses and steal digital information from businesses and individuals. He added that his bill, SB 356, which has already passed the Senate Committee, addresses serious technology issues and makes it easier to prosecute those who engage in phishing, the sowing of Trojan viruses and network hacking. The companion bill is HB 400 by Rep. DeMarco. Several tax incentive bills, which would give the governor and the state’s chief job recruitment agency more discretion in the incentives they may offer to attract or retain industrial megaprojects, were recently approved by the House but remained bogged down in the Senate due to philosophical differences over their contents, he said. HB 154, for example, was designed to attract warehouse and distribution centers for major retailers to the state, but Ward said the removal of an important provision threatens its effectiveness and could result in Alabama losing a major Hibbett Sporting Goods facility, along with the jobs it carries. He concluded by encouraging the group to lobby to have the bill returned to its original version. DeMarco highlighted the fact that the House and Senate Judiciary committees have worked together more closely than in quadrenniums past and pointed to a series of statewide joint hearings on issues such as digital crime and synthetic drugs as evidence of the new cooperative relationship. “Having the committees work together is more efficient and makes it easier for the public and various groups to keep track of what we are doing together rather than having a guessing game about what each is doing separately,” DeMarco said. “All the business community asks for is certainty and a level playing field, and I think many of the bills you see our committees handling bring just that.” DeMarco said he continues to work on a Taxpayer Bill of Rights measure, which he has sponsored for the past several sessions, and has pushed sweeping, and much needed, workers’ compensation fraud legislation that continues to work its way through the process.

55 $ SXEOLFDWLRQ RI WKH Business Council of Alabama

Volume 3 | Issue 2

The Business

ADVOC ATE

The Business Council of Alabamaâ&#x20AC;&#x2122;s

2012 STATE LEGISLATIVE AGENDA

Adopted by the BCA Board of Directors on December 2, 2011

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House Speaker Mike Hubbard and Senate President Pro Tem Del Marsh thanked the BCA for its hard work during the past session

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A d v o c a t e BCA Education Committee members listen to legislative updates.

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57 T h e

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ENVIRONMENT & ENERGY

A d v o c a t e Rep. Mary Sue McClurkin speaks to BCA committee about bills affecting business

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Sen. Arthur Orr updates BCA committee on legislative actions

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THE FOUNDATION FOR PROGRESS • 2012

T h e

B u s i n e s s

A d v o c a t e

HEALTH

Sen.. Greg Reed tells the BCA Health Committee about challenges in the coming year.

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59 T h e

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A d v o c a t e

JUDICIAL & LEGAL REFORM

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SMALL BUSINESS

2011 BCA Chairman Will Brooke and 2nd Vice Chairman Carl Jamison

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Lt. Gov. Kay Ivey talks with BCA small business members Greg Powell, Ron Perkins and Mack Ferguson of the Talladega Chamber of Commerce

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61 T h e

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Sen. Trip Pittman addresses the Tax and Fiscal Policy Committee; below, Committee Chairman Marty Abroms discusses the agenda as BCA staff member Victor Vernon looks on.

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A d v o c a t e Business Council of Alabama Intergovernmental Affairs, Advocacy and Communications Team

Anita L. Archie Senior Vice President for Intergovernmental Affairs, Advocacy and Communications and Legal Advisor 334-240-8775 | Fax 334-241-5984 anitaa@bcatoday.org William J. Canary President and Chief Executive Officer 334-240-8714 | Fax: 334-241-5984 billyc@bcatoday.org Mark Colson Chief of Staff and Executive Director for ProgressPAC 334-240-8724 Fax: 334-240-8824 mcolson@bcatoday.org Claire Haynes Director, Legislative Advocacy and Intergovernmental Affairs 334-240-8726 | Fax: 334-241-5984 claireh@bcatoday.org Nancy Wall Hewston Director, Federal Governmental Affairs and Strategic Communications

334-240-8725 | Fax: 334-241-5984 nancyh@bcatoday.org Nathan Lindsay Director of Political Affairs and Regional Operations 334-240-8766 Fax: 334-241-5984 nathanl@bcatoday.org Victor Vernon Director, Legislative Policy and Intergovernmental Affairs 334-240-8725 | Fax: 334-241-5984 victorv@bcatoday.org Lenore Reese Vickrey Director, Strategic Affairs and Advocacy Communications 334-240-8740 | Fax: 334-241-5984 lenorev@bcatoday.org Pam Ware Manager, Intergovernmental Affairs, Advocacy and Communications 334-240-8719 | Fax: 334-241-5984 pamw@bcatoday.org

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“Currently in Alabama, you can be intoxicated or impaired due to drugs and still receive lifetime medical benefits because the burden is on the employer to prove the impairment, and my bill bars lifetime benefits and shifts the burden from the employer to the employee,” DeMarco said. “We want existing businesses and prospective businesses alike to look at Alabama and know that we have fair workers’ compensation laws on the books so they will be comfortable operating here.” Also touching upon the incentive bill Ward discussed, DeMarco said its passage is vital to Jefferson County and the Birmingham area due to the number of projects it affects. He said he is working with a group of north Alabama legislators to pass legislation that is acceptable and effective.

House Health Committee OKs revised pseudoephedrine bill HB 363, by Rep. Blaine Galliher, R-Gadsden, seeks to cramp down on the manufacture of methamphetamine in Alabama while still allowing persons to purchase over-the-counter products containing ephedrine and pseudoephedrine (PSE), such as common cold and allergy medications. As a result of a law passed in 2010, products containing these medications can be sold at any retail establishment so long as the medications are kept either behind the counter or in a locked box, a photo-government ID is presented by the person purchasing the products, and the retailer is registered with the electronic tracking system known as NPLEX. The NPLEX system is an electronic database used by more than 20 states to help law enforcement officers track sales of PSE and ephedrine products. Persons who purchase these products are entered into the electronic tracking system, which will block the sale of these products when a person has exceeded the monthly allowance allowable under the law. Although the NPLEX system blocked almost 100,000 attempted sales of PSE and ephedrine products in 2011, some law enforcement groups and legislators questioned the success of the system and the 2010 law at reducing the manufacture of meth in Alabama and introduced legislation this session requiring a prescription for products containing these medications. While the BCA recognizes the necessity of taking steps to decrease the manufacture of methamphetamine, requiring a prescription for a common cold or allergy product otherwise considered to be safe and effective would greatly increase employers’ health care costs and decrease employee productivity by requiring employees to take time off work to be

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treated by a physician for a common cold. As a result, the BCA worked with Rep. Galliher, several business groups and law enforcement, including the District Attorney’s Association, to make changes to the existing law that would not penalize consumers who purchased the products for lawful reasons and would also provide tracking mechanisms beneficial to law enforcement that would help crack down on those who purchase these products to manufacture meth. HB 363 makes the following changes: 1) Requires products containing PSE and ephedrine to be sold behind the counter and only in a pharmacy. 2) Broadens the definition of the crime of “smurfing” and makes it a Class B Felony. “Smurfing” is when a person purchases; attempts to purchase; solicits; or conspires to purchase, possess, sell, transfer or furnish the essential items used in the manufacture of methamphetamine.

Rep. Blaine Galliher explains bill to House Health Committee

3) Strengthens the ID requirement for purchasing ephedrine and PSE products. Only a valid, non-suspended driver’s license, non-driver ID, valid military ID or valid passport will be acceptable forms of ID. Current law allows for simply a photo, government-issued ID. 4) Reduces the amount of ephedrine allowed to be purchased within a 30-day period from 9 grams to 7.5 grams. This amount would be the equivalent of a 30-day supply of Claritin D.

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5) Requires persons living in states where a prescription is required to purchase ephedrine and PSE products to obtain a prescription in Alabama before being allowed to purchase these products. Persons who obtain a prescription illegally would be guilty of a Class C felony. 6) Prohibits persons convicted of drug-related crimes from being able to purchase ephedrine and PSE products for seven years if convicted of a crime of possession and 10 years if convicted of a crime of distribution. 7) Increases the penalty for drug paraphernalia to a Class C felony when the intent for manufacturing meth is evident. Currently, if the ephedrine, PSE or finished drug is not present in a meth lab at the time of a meth lab bust, no crime has been committed. This would allow law enforcement to pursue prosecution if all other drug paraphernalia used in the manufacture of meth is present. 8) Provides restitution to law enforcement and prosecutors for the cost of an investigation and/or prosecution of drug offenses. Currently, the only way restitution can be awarded is when the restitution is negotiated as part of plea agreement. This would allow a judge to award restitution whenever he deems it necessary. 9) Requires the subcommittee of the Drug Abuse Task Force to report to the legislature by the 10th legislative day of each session its findings on the state of illegal drugs: trends in use, distribution and manufacture of illegal or synthetic drugs, and the use and misuse of legal products used to manufacture illegal drugs. HB 363 received a favorable report from the House Health Committee and now awaits consideration by the full House. BCA supports this bill.

Business Coalition for Property Rights and Workplace Safety opposes bills seeking to erode property rights and destroy jobs Once again, companion bills have been introduced in the legislature that would erode the constitutional property rights of individuals and businesses. SB 331 by Sen. Paul Sanford, R-Huntsville and HB 471, by Rep. Craig Ford, D-Gadsden, violate the rights of property owners by making it illegal for businesses and individual property owners to establish a policy that prohibits anyone from bringing a gun onto that personâ&#x20AC;&#x2122;s property.Â Although the bills specifically target businesses and employers, they also authorize new lawsuits against anyone in Alabama who owns

THE FOUNDATION FOR PROGRESS • 2012

property and denies a person with a gun access to carry the gun on that property. Private companies in Alabama are already struggling with excessive rules and regulations that burden their operations and increase their costs. The inescapable result of this legislation would be to increase employer costs — including insurance costs — and the loss of jobs. Particularly in the current economic environment, government should not intrude on private property rights in a manner that results in more Alabamians finding themselves out of work. More egregiously, these bills are essentially a dream come true for trial lawyers. While Alabama businesses are already plagued with countless frivolous lawsuits, this proposal would add fuel to the fire. HB 471 and SB 331 would authorize an individual injured on property where there existed a no-guns policy to sue the property owner for his injuries. The creation of another cause of action against which property owners would be required to defend themselves is simply bad public policy. Members of the coalition are: Alabama Railway Association Alabama Trucking Association Alabama Society of Certified Public Accountants Alabama Cable Telecommunications Association Business Council of Alabama The BCA Manufacturing Advocacy Council The Alabama Retail Association

Bill would define pharmacy services and retain jobs in Shoals area

HB 393, by Rep. Lynn Greer, R-Rogersville, further defines the term “pharmacy services.” The bill is intended to satisfy recent requirements imposed by the Alabama Board of Pharmacy on a Northwest Alabama call center and would allow it to retain 220 jobs. The bill as amended would also prevent additional regulation of Pharmacy Benefit Managers (PBMs) that are used by employers of all sizes, as well as by state public employee and educator benefit programs like the Retirement Systems of Alabama and the State Employee Insurance Board, to administer prescription drug benefit programs and restrain rising costs. PBMs are currently regulated by the Alabama Board of Pharmacy as well as the Alabama Department of Insurance and the Federal Drug Administration.

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HB 393 will be at the top of the House of Representatives’ special order calendar on Wednesday. The bill as amended would provide a “winwin” situation by helping to retain existing jobs in Muscle Shoals and by protecting the ability of employers and state government to continue to offer affordable prescription drug benefits to their employees through the use of PBMs. BCA supports efforts that help contain health care costs for employers.

House passes “New Market Development” program

By a vote of 75–22, the Alabama House passed HB 257, by Rep. Jamie Ison, R-Mobile, known as the New Market Development Act. The act would provide tax credits for investments in qualified community businesses in low-income communities. If enacted, Alabama will join states such as Florida, Mississippi and Illinois that already have state New Market Development Programs modeled after the New Market Tax Credit Program established by Congress in 2000. The federal program promotes investments in businesses and real estate projects located in low-income census tracts. When the state incentives are coupled with the federal incentives, community leaders have a potent tool to revitalize low-income census tracts in downtown core areas and central business districts. The House-passed version caps the credit at $10 million per transaction over a seven-year period, in which the credit totals 0 percent the first year and 8.33 percent for the following six years. The bill further sets an aggregate cap of $20 million annually, and limits the taxpayer’s credit to not more than the taxpayer’s state tax liability. BCA supports this bill, which now advances to the Senate.

Bill exempting aircraft parts, components approved by committee The Senate Finance & Taxation-Education Committee favorably reported HB 39, by Rep. Paul Lee, R-Dothan, that provides an exemption from sales and use taxes on parts, components and systems that are incorporated into the refurbishment of certified military, governmental or commercial transport aircraft or rotary wing aircraft. Committee testimony revealed that Alabama companies that refurbish aircraft are at a competitive disadvantage compared to their competitors in

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other states, where the parts used in such conversions are tax-exempt. The committee adopted an amendment offered by the chair, Sen. Trip Pittman, R-Daphne, that would end the exemption on May 30, 2020, unless the exemption is extended by a joint resolution of the legislature. BCA supports this legislation, which now moves to the full Senate.

Committee increases UC fraud bill’s disqualification period Unemployment compensation fraud law changes are one step closer to becoming law. Under current law, a person who fraudulently represents that he is unemployed for the purpose of receiving unemployment compensation benefits cannot be disqualified from receiving benefits. In its original form, HB 72 by Rep. Paul DeMarco, R-Homewood, would institute a 52-week disqualification of benefits if a person is found to be fraudulently claiming he is unemployed so that he can receive unemployment compensation benefits. The disqualification would begin from the date the fraud is determined or until the amount that was awarded fraudulently is repaid in cash. Any federal or state funds due to the person could be intercepted by the Department of Industrial Relations (DIR) to repay the debt. The Senate Banking and Insurance Committee amended the bill to increase the benefit disqualification period to 104 weeks and until the amount fraudulently awarded is repaid in cash. The companion bill, SB 137, by Sen. Paul Bussman, R-Cullman, received a public hearing a few weeks ago by the Senate Banking & Insurance Committee, but the vote was delayed to give time for HB 72 to travel to the Senate. BCA supports this legislation.

In Legal Refor m News SB 342, by Sen. Phil Williams, R-Rainbow City, seeks to codify case law relating to the duty of care an owner of real property owes to certain trespassers on his property. Under existing law, a land possessor owes no duty of care to a trespasser, except in very narrow and well-defined circumstances. The legislation seeks to preempt courts from adopting a more liberal provision that would expand trespassers’ rights to sue land possessors by imposing a broad new duty on land possessors to exercise reasonable

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care for all entrants on their land, including unwanted trespassers. This bill received a favorable report of 7-0 in the Senate Agriculture, Conservation and Forestry Committee. The Senate passed SB 139, by Sen. Clay Scofield, R-Guntersville, on Thursday. The bill would limit the civil liability of a contractor for work performed on a highway, road, bridge or street, including repairs, construction or maintenance on behalf of the Alabama Department of Transportation (ALDOT), the county or local government, unless it is shown by a preponderance of evidence that physical injury, property damage or death is caused by the contractorâ&#x20AC;&#x2122;s performance or inability of the contractor to recognize a dangerous condition.

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Senate Passes RESTORE Act The Senate on Thursday voted 76-22 to pass the Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economy (RESTORE) the Gulf Coast Act of 2012, originally sponsored by nine of the 10 Gulf state senators, including Sens. Richard Shelby (R-AL). Passed as an amendment to the highway reauthorization bill, the RESTORE Act would dedicate 80 percent of the Clean Water Act penalties issued in the wake of the BP Deepwater Horizon oil spill to Gulf Coast states to aid in their economic and environmental restoration. If enacted, 65 percent of the funds will be spent by state and local task forces, 30 percent of the funds will be spent by a federal-state task force and 5 percent will be for Gulf Coast fisheries and ecosystem research and monitoring. Without congressional action, between $5.4 billion and $21.1 billion in expected fines would go into a fund to pay for the cleanup of future oil spills as well as to the federal treasury. Last month, the House voted to attach a RESTORE amendment to the Houseâ&#x20AC;&#x2122;s transportation reauthorization bill.

Senate Transportation Bill Moves Forward After much debate and negotiations, Senate leaders reached an agreement late Wednesday to move its transportation bill, Moving Ahead Progress for the 21st Century (S. 1813). Majority Leader Harry Reid

THE FOUNDATION FOR PROGRESS • 2012

(D-NV) and Minority Leader Mitch McConnell (R-KY) agreed to the consideration of a package of 30 non-germane amendments, including the RESTORE Act (see previous article). All amendments require a filibusterproof 60 votes for passage. Two amendments dealing with the controversial Keystone XL oil pipeline were rejected. The first, offered by Sen. John Hoeven (R-ND), would have given congressional approval to the pipeline, thus removing it from the executive branch. The amendment failed 56-42. The second, sponsored by Sen. Ron Wyden (D-OR), would have required the pipeline permit application be approved or denied within 90 days of the completion of all analyses required by law. It also would have required all construction materials be made in the United States and would have banned the export of Keystone oil. It failed by a vote of 33-65. Another amendment, offered by Sen. Susan Collins (R-ME), would have provided the Environmental Protection Agency additional time to redraft achievable Boiler MACT rules as well as extend the compliance time frame from three years to five years. It failed by a vote of 52-46. An amendment, sponsored by Sen. David Vitter (R-LA), to provide more domestic energy production by allowing the sale of leases throughout the Outer Continental Shelf (OCS), failed by vote of 44-54. Final passage of the Senate transportation bill could be concluded next week. With the deadline of March 31 looming, the day the government runs out of authority to release federal transportation money, the House is working through different versions of its highway bill.

House Passes JOBS Act The House on Thursday voted 390-23 to pass the Jumpstart Our Business Startups ( JOBS) Act, H.R. 3606. The JOBS Act is a package of bills designed to remove the barriers preventing small businesses and start ups from accessing capital they need to grow. The JOBS Act includes: A measure that would give small businesses a reprieve from costly SEC regulations by phasing in certain regulations over a 5-year period, or until the company reaches $1 billion in revenue.

A measure, H.R. 2940, that would repeal the solicitation ban on companies trying to raise capital.

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A measure, H.R. 2930, that would remove the ban on “crowdfunding,” enabling entrepreneurs to pool investments from smaller investors. A measure, H.R. 2167, that would raise the shareholder threshold regulations from 500 to 1,000 shareholders.

A measure, H.R. 4088, that would revise an outdated requirement that banks with 500 or more shareholders register with the Securities and Exchange Commission by raising the threshold to 2,000.

Several of these measures have already passed the House as stand-alone bills with more than 400 votes each; however, none has been considered in the Senate. Senate Majority Leader Harry Reid said Thursday he would introduce similar legislation next week and “move as quickly as we can” to pass it. The House package received the endorsement of the White House this week with the White House Office of Management and Budget issuing a statement saying that President Barack Obama is “encouraged to see that there is common ground” between the bill and policies he mentioned in his State of the Union speech earlier this year.

CHAPTER 7 March 21, 2012

CHALLENGING T HE STATUS QUO: EDUCATION OPTIONS ACT OF 2012 ANNOUNCED “Leadership is doing what is right when no one is watching.” G E O R G E VA N VA L K E N B U R G

School flexibility and charter schools top priorities; BCA fully supports legislation

ov. Robert Bentley and legislative leaders on Wednesday announced their education initiative for this session, the Education Options Act of 2012. Standing outside the old Cloverdale School in Montgomery, Gov. Bentley was joined by Speaker of the House Mike Hubbard; Senate President Pro Tem Del Marsh; Sen. Dick Brewbaker, R-Pike Road; Rep. Phil Williams, R-Huntsville; Montgomery Mayor Todd Strange; and Rev. David Craig, pastor of Mount Pilgrim Missionary Baptist Church in Fairfield. HB 541 is the first step in an effort to allow new opportunities for parents to educate their children when they attend consistently failing schools. The law will allow for the creation of a limited number of charter schools around the state. Charter schools are public schools that are allowed freedom to teach in innovative ways with strict accountability for higher standards and achievement. While charter schools are not the single solution to all of Alabama’s education problems, it is another tool in the education reform arsenal that will help reduce the dropout rate and prepare students to enter the workforce. Local school boards will serve as the authorizing agent for charter schools, and should they deny an application, the applicant may appeal to the Charter School Application Review Council, which will be also created under this legislation. 73

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The legislation also allows for local school systems to seek flexibility from burdensome state regulations and bureaucratic red tape. In exchange for flexibility, schools must pledge to increase their accountability for student achievement and school system performance. The State Superintendent of Education would approve waivers for school systems seeking flexibility, and they would be conditional for five years to ensure accountability. “Education options and flexibility equal more success for our children. The Business Council of Alabama is proud to support this historic education package that finally will provide parents more options to improving the education of their children while at the same time allow teachers more flexibility for classroom instruction,” BCA President and CEO William J. Canary said. “Businesses are the number one consumer of the product education, and when Alabama adopts this legislation, the dropout rate will decline, more students will be prepared to enter the workforce, and our economy will grow.” A third aspect of the legislation would allow local communities to convert existing schools into charter schools. The process begins with the local superintendent submitting a proposal to the local school board for approval but only after a majority of parents at the existing school have approved. A conversion of an existing school to a charter school is not appealable to the Charter School Application Review Council if the local school board denies the proposal. Only nonprofit and non-religious entities may apply for a charter, regardless of whether applying as a new charter school or through conversion of an existing school. “In America, we don’t tell you where to go to church or what to do for a living, but we do tell you where you have to send your kids to school,” said Sen. Brewbaker, the Senate sponsor of the bill. “This bill is a great step forward because it provides options to parents in failing school districts and maintains local control of the school system.” Rep. Williams, sponsor of the House bill, also spoke at the press conference on the importance of this legislation. “I’m an advocate for innovative education reforms because I believe no parent should be forced to send their child to a failing school with no option to seek a better education,” Rep. Williams said. “It doesn’t have to be that way. We can have excellent teachers in every classroom preparing the next generation of Alabamians to be our greatest yet. This bill is a big step in that direction.” BCA supports this legislation.

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Senate Committee OKs guns to work bill despite opposition from business On a 3-1 vote, SB 331, by Sen. Paul Sanford, R-Huntsville — a bill that would prohibit a public or private employer, property owner or business from establishing a policy against transporting or possessing a firearm or ammunition if the person is in compliance with other laws — was given a favorable report by the Senate Business & Labor committee. BCA strongly opposes this bill and its House companion, HB 471, by Rep. Craig Ford, D-Gadsden, as these bills would trample on the constitutional rights of individual property owners and businesses. Sen. Cam Ward, R-Alabaster, made the motion to give the bill a favorable report. Sen. Shadrack McGill, R-Scottsboro, seconded the motion. Voting in favor of SB 331 were Sen. Ward, Sen. McGill and Sen. Rusty Glover, R-Semmes. The only senator voting against SB 331 was Sen. Priscilla Dunn, D-Bessemer. Sen. Slade Blackwell, R-Mountain Brook, left the meeting before the vote. The bill makes it illegal for an employer or private property owner to establish a policy prohibiting anyone from bringing a gun onto that person’s property. Anyone denied the opportunity to transport or store a firearm or ammunition or who is fired for violating a company policy can sue a business, property owner or public or private employer for violating the act. Sen. Sanford told committee members that the bill doesn’t infringe on an employer’s rights to make his own policies banning guns on his property because not only does it require employees to leave their weapons in their vehicle out of sight, but, he said, employers should trust their employees to be “law-abiding citizens” and not violate the law by bringing their guns inside the workplace. Therefore, having a no-firearms policy in place would no longer be necessary. Employers would be immune from civil liability for any misuse of a firearm if a person violates the law by removing the weapon from his vehicle unless the employer “intentionally solicits or procures” the employee to do so. When asked to give an example Sanford said, “If an employer says to an employee, ‘Why don’t you just go get your gun, bring it in here and start shooting people.’” Sen. Dunn expressed her opposition to the committee members and the bill’s sponsor by saying it was bad policy to simply trust that employees

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would be law-abiding citizens who would leave their guns in their cars. She contended that it’s much easier for a person to use a weapon when it’s within close proximity. She compared the situation to two friends riding in a car where a weapon is present: An argument ensues over a sporting event, and one person shoots the other person. Had the gun owner not been allowed to transport the weapon, the injury or death could have been prevented. It is interesting to note that visitors to the Alabama State House must be searched before entering the building for weapons, and if a weapon is found, it is removed from that person. Elected state leaders, staff of elected leaders and certain other individuals may enter the Alabama State House without being subject to security and searches. A letter authored by the Business Coalition for Property Rights and Workplace Safety was circulated on Wednesday urging members of the Senate and Labor Committee to vote no on SB 331. The Coalition and the Business Council of Alabama will continue to oppose this legislation. Members of the coalition are: ALFA Companies Alabama Railway Association Alabama Trucking Association Alabama Society of Certified Public Accountants Alabama Cable Telecommunications Association Business Council of Alabama The BCA Manufacturing Advocacy Council The Alabama Retail Association

Senate Panel conducts second round of hearings on “Job Creation & Retention Act” State Department of Education speaks in opposition

Officially, the Senate Finance & Taxation Committee held a public hearing but did not vote on HB 159, the proposed constitutional amendment; however, remarks by both proponents and opponents also pertained to HB 160, the enabling bill. Together, the two bills comprise the Alabama Job Creation & Retention Act. Both bills are sponsored by Rep. Barry Mask, R-Wetumpka, and both will be handled in the Senate by Sen. Phil Williams, R-Rainbow City. If enacted and ratified by the voters of Alabama, the legislation would allow a new or existing employer

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to retain a percentage of its employeesâ&#x20AC;&#x2122; state income tax withholdings to offset the costs of acquiring or expanding its facility, but not more than the cost of the facility. Sen. Williams again told the committee that local economic developers need the flexibility provided by the bill to match the creative packages of incentives that other states are using to land industrial projects for which Alabama can no longer compete because Sen. Phil Williams explains job incentives bill to Senthe state can no longer offer ate F&TE Committee a second time direct incentives. He assured the committee that the legislation would be used to create jobs in every senate district, not just to save jobs in his own district. Alabama Development Office Director Greg Canfield mentioned that his team has been working to address many of the concerns raised by the AEA. He stated that he would circulate a substitute version of HB 160 and expressed a willingness by the Bentley Administration to: 1) void the constitutional amendment by a simple majority vote of the legislature at any time it is determined that the legislation is no longer needed; 2) cap the amount of incentives available for retention projects; 3) allow the authority for retention projects to expire, unless reauthorized by the legislature. Canfield also spoke of being amenable to including local governing bodies in the approval process for retention projects and adding legislative representation to the State Industrial Development Authority to evaluate retention projects. He further asked that the committee weigh job creation, capital investment and revenue growth against the loss of potential revenue. An AEA spokesperson charged that the legislation could divert an â&#x20AC;&#x153;unlimitedâ&#x20AC;? amount of revenue from public education at a time when school funding is being statutorily held in check to avoid another midyear budget cut. Dr. Craig Pouncey of the State Department of Education again spoke in opposition to the legislation by questioning whether any group can

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properly evaluate an application for a retention project and correctly conclude that it is cost effective. He also advocated that the state’s economic developers should put more emphasis on the state’s strengths, such as low property taxes and the absence of combined reporting, rather than seeking legislative approval for more incentives. BCA supports the Alabama Job Creation and Retention Act, which is expected to be acted upon when the committee meets again next week.

Committee holds hearing on film industry incentives Proponents and opponents of a bill that would expand the incentives offered for film productions to shoot projects in Alabama testified before the Senate Finance & Taxation Committee on Wednesday. HB 243, Rep. Terri Collins, R-Decatur, has already passed the Alabama House by a vote of 101-0, but the AEA now is working to defeat the film incentive bill in the Senate. The AEA spokesperson distributed a January 2010 report by the Tax Foundation that was very critical of film incentives offered by the State of Louisiana and concluded that such incentives are costly and fail to deliver all that is promised. Rep. Collins pointed out that beyond the overall positive impact that the incentives have on economic activity and revenue growth, there are other tangible benefits of a community hosting film productions. She spoke to the positive image that the production brings to a community, resulting in a spike in tourism. Often, production companies will establish a permanent presence in the area in anticipation of future productions. BCA supports this legislation, which will be voted on by the committee at the next meeting.

Rep. Terri Collins speaks to film incentive bill

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House passes pseudophedrine bill By a vote of 100-1, the House of Representatives passed HB 363, by Rep. Blaine Galliher, R-Gadsden, which seeks to crack down on the manufacture of methamphetamine in Alabama while still allowing persons to purchase over-the-counter products containing ephedrine and pseudoephedrine (PSE), such as common cold and allergy medications. As reported last week, the bill was a collaborative effort by legislators, business groups, law enforcement and the District Attorneys Association to make changes to the existing law that would not penalize consumers who purchased these products for lawful reasons and also would provide tracking mechanisms beneficial to law enforcement to help crack down on those who purchase products containing PSE to manufacture meth. HB 363 now heads to the Senate. The companion bill, SB 344, by Sen. Bill Holtzclaw, R-Madison, passed the Senate Health Committee with only one dissenting vote. SB 344 could be debated by the full Senate as early as next week. BCA supports this bill.

Bill to define pharmacy services and retain jobs in Shoals area passes House

HB 393, by Rep. Lynn Greer, R-Rogersville, which further defines the term “pharmacy services,” unanimously passed the House this week. The bill is intended to satisfy recent requirements imposed by the Alabama Board of Pharmacy on a Northwest Alabama call center and would allow it to retain 220 jobs. If enacted, the bill would also prevent additional regulation of Pharmacy Benefit Managers (PBMs) that are used by employers of all sizes, as well as by state public employee and educator benefit programs such as the Retirement Systems of Alabama and the State Employee Insurance Board to administer prescription drug benefit programs and restrain rising costs. PBMs save the state more than $300 million annually on prescription drugs for teachers and state employees. PBMs are currently regulated by the Alabama Board of Pharmacy, as well as the Alabama Department of Insurance and the Federal Drug Administration. HB 393 would provide a “win-win” situation by helping to retain existing jobs in Muscle Shoals and protecting the ability of employers and

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state government to continue to offer affordable prescription drug benefits to their employees through the use of PBMs. The bill now heads to the Senate Health Committee. Its companion bill, SB 350, by Sen. Tammy Irons, D-Florence, received a favorable report from the Senate Health Committee and awaits consideration by the full Senate. BCA supports efforts that help contain health care costs for employers.

BCA members recognized for trade excellence Four BCA member companies were recognized Wednesday for excellence in trade activities. Gov. Robert Bentley presented the seventh annual Governor’s Trade Excellence Awards during a ceremony at the Capitol. BCA members honored were MCM Custom Vehicles of Trussville, AZ Technology of Huntsville, Henderson Sewing Machine Co., Inc., of Andalusia and Kappler Inc. of Guntersville. The Governor’s Trade Excellence Awards program was established in 2005 to recognize Alabama manufacturers and service companies for excelling in global competition. The program seeks to identify Alabama’s successful exporters, promote exporters as role models to the Alabama business community to encourage greater involvement in the global marketplace, and increase awareness of the impact of exporting on Alabama’s economy. The awards program is coordinated by ADO and the Export Alabama Alliance. The program includes large, medium and small businesses as well as new-to-export companies. “The companies honored today are an important part of the state’s engine for growth, retention and job creation,” said ADO Director Greg Canfield. “That is why exports are an important part of Accelerate Alabama, the state’s economic development strategic plan.” Alabama exports reached an all-time high of $17.9 billion in goods shipped globally last year, a 15.4 percent increase over last year.

Governor declares 10.6 percent proration in General Fund budget On Friday, Gov. Robert Bentley declared 10.6 percent proration on the state’s General Fund Budget for the remainder of fiscal year 2012, which ends September 30.

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According to a press release from the governor’s office, the General Fund has been impacted by several major factors that make proration necessary, including tens of millions of dollars in state funding required for tornado recovery. Also, stock market conditions during the fourth quarter of fiscal 2011 were among the worst in the last 60 years, directly affecting revenues to the General Fund, the press release said. “We have pursued every possible option in order to avoid proration; however, this step must be taken,” said State Finance Director Dr. Marquita Davis. “While proration is difficult, it is necessary to balance the budget, which is constitutionally required in Alabama.” Upon the declaration of proration, state agencies that are financed by the General Fund must reduce expenses through the current fiscal year. The proration declaration does not affect public school funding.

BCA and ProgressPAC-endorsed candidates successful in 2012 Primary Election All candidates endorsed by the BCA and ProgressPac were successful in Tuesday’s primary elections. Federal Elections - BCA-Endorsed U.S. House *District 1 Jo Bonner - won 56 percent *District 5 Mo Brooks - won 71 percent *District 6 Spencer Bachus - won 59 percent *Contested race State Elections - ProgressPAC-Endorsed Supreme Court *Tommy Bryan, Place 1 - won 65 percent Lyn Stuart, Place 2 Glenn Murdock, Place 3 Jim Main, Place 4 Court of Civil Appeals Craig Pittman, Place 1 Terri W. Thomas, Place 2 Terry Moore, Place 3

THE FOUNDATION FOR PROGRESS • 2012

Court of Criminal Appeals Liles Burke, Place 2 Michael Joiner, Place 3 Alabama Board of Education *Tracy Roberts, District 1 - won 63 percent *Jeff Newman, District 7 - won 51 percent *Contested race

Washington Br iefing

BCA-endorsed candidates successful in Tuesday’s primary election All three candidates endorsed by the Board of Directors of the Business Council of Alabama were successful in their primary elections this Tuesday. Congratulations to U.S. Reps. Spencer Bachus (AL-06), Jo Bonner (AL01) and Mo Brooks (AL-05), the BCA-endorsed candidates who faced primary opponents.

Senate Looks to Reauthor ize Ex-Im Bank Following passage of the transportation bill, the Senate on Thursday began consideration of the House-passed job-creation package, H.R. 3606. While H.R. 3606 sailed through the House last week on a 390-23 vote, Sen. Majority Leader Harry Reid (R-NV) announced his intention to attach a four-year renewal of the U.S. Export-Import (Ex-Im) Bank’s mandate. Failure to reauthorize Ex-Im’s operations at an internationally competitive level would seriously disadvantage U.S. companies, small and large, in foreign markets, threatening thousands of American jobs that depend on its crucial export financing. Ex-Im has a proven record of success, supporting thousands of large and small U.S. exporters across the nation. Last year, the Bank supported more than $40 billion in U.S. exports that helped create or sustain 290,000 jobs at more than 3,600 companies. The Bank has provided significant support to many Alabama companies. Over the last five years, 53 Alabama companies used Ex-Im to help finance the export of more than $500 million in products and services around the world.

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The Bank is particularly important in supporting the exports of smaller firms. More than 85 percent of Ex-Im’s transactions last year directly supported small businesses, and in Alabama, the Ex-Im provided assistance to 19 small or minority-owned businesses. Alabama products exported include plastic and paint products, coal, wood products, food products, transportation equipment, manufacturing equipment and many others. Many of these small businesses have found alternative financing drying up because of the global financial situation. Smaller exporters account for fully one-third of all American exports, and it is vital they receive the support they need. The Export-Import Bank is self-financed, paying for itself out of the fees it collects. In fact, the nonpartisan Congressional Budget Office concluded that a reauthorization of the Bank would reduce the deficit by $900 million over five years. The U.S. Treasury has made more than $3 billion from Ex-Im’s activities since 2005. U.S. Sen. Richard Shelby (R-AL), ranking Republican on the Senate Banking Committee, along with U.S. Sens. Maria Cantwell (D-WA), Banking Committee Chairman Tim Johnson (D-SD) and Lindsey Graham (R-SC) introduced an amendment Thursday night that would increase the bank’s lending limit to $140 billion from $100 billion and extend the life of the bank through 2015; however, House leaders have indicated they will take a different approach. House Majority Leader Eric Cantor’s (R-VA) plan would cap the bank’s financing at $113 billion and reauthorize it until June 1, 2013. Reauthorization of the U.S. Export-Import Bank prior to its charter expiring on May 31, 2012, is a BCA federal legislative priority.

Senate Passes Transportation Bill

Reauthorization is a BCA Legislative Priority After weeks of debate and negotiations, the Senate on Wednesday passed its transportation and infrastructure bill, Moving Ahead Progress for the 21st Century (S. 1813), by a vote of 74-22. The transportation and infrastructure reauthorization bill establishes the funding mechanism through which the federal government pays its share of the cost of transportation repair and construction projects carried out by state and local governments.

THE FOUNDATION FOR PROGRESS • 2012

The $109 billion Senate bill is a two-year blueprint approved less than three weeks before the March 31 expiration of the current transportation funding as well as the expiration of the authority to collect the federal gas tax that supports the funding. The Senate bill consolidates 196 federal transportation programs to about a dozen and gives states more flexibility in determining their transportation priorities. The Senate-passed transportation bill includes the RESTORE Act, which would dedicate 80 percent of the Clean Water Act penalties issued in the wake of the BP Deepwater Horizon oil spill to be split among the five Gulf Coast states, including Alabama. The RESTORE Act was added last week to the transportation bill by a rare bipartisan vote of 76-22. The Business Council of Alabama has been part of the U.S. Chamber-led coalition, the Americans for Transportation Mobility Coalition, supporting passage of an adequately funded multi-year surface transportation bill. This nationwide effort, Make Transportation Job #1, included a letter to every member of Congress signed by the BCA, the U.S. Chamber of Commerce and more than 1,000 groups and associations from across the country. With the House in recess this week, it remains unclear what path House leaders will take. Some have indicated the House will consider health care and budget legislation first, pushing the transportation bill to next month, after the March 31 deadline. Next week will mark the two-year anniversary of the health care reform legislation, and oral arguments are scheduled in the Supreme Court the following week. House Republican leaders are expected to seize this timing and bring legislation repealing the Independent Payment Advisory Board. There are also technical barriers to the House considering the Senate bill next week. The Senate bill includes revenue provisions, which must originate in the House. The House, therefore, would have to “clone” the Senate bill. The House’s three-day rule would delay bringing it to the floor that much longer, assuming House leaders move forward with the Senate bill. To no avail, House Speaker John Boehner spent last week trying to persuade House Republicans to support a five-year House bill. Another alternative is passage of a short-term extension that keeps funding at current levels. Passage of a multi-year federal transportation reauthorization is a BCA federal legislative priority.

CHAPTER 8 March 19, 2012

O P T I O N S A N D F L E X I B I L I T Y FO R PA R E N T S A N D TE A C H E R S “Yesterday’s home runs don’t win today’s games.”

BABE RUTH

he House Ways & Means Education Committee on Wednesday held the first public hearing on the Education Options Act of 2012. Before a standing-room-only crowd, committee members heard from Rep. Phil Williams, R-Huntsville, the House sponsor of HB 541. Williams told the committee that in charter schools, local school officials and teachers would be given more flexibility from bureaucratic red tape to address problems and teach in ways that would be more beneficial. Charter schools are just one option for parents looking to do whatever it takes to get their children the education they deserve in the lowestperforming schools in the state, he said. “Look at this as a cafeteria plan,” Williams said. “You have a wide variety of options to choose from that will help local school systems deal with their individual problems. A problem facing Limestone County may not be a problem facing Baldwin County.” Following Williams’ remarks, committee Chairman Jay Love, R-Montgomery, opened the public hearing to proponents and opponents. Opponents consisted of superintendents, school board members and the Alabama Education Association,while proponents who testified represented the BCA, the Birmingham Business Alliance, parents and teachers with charter school experience. Testifying on behalf of BCA, Senior Vice President for Intergovernmental Affairs, Advocacy and Communications and Legal Advisor Anita L. Archie discussed the importance of education reform to the business community by relaying that “for very selfish reasons, we want everyone that comes through the educational system to get a 85

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quality education, to get quality jobs in this state.” After speaking on the business community’s need for an educated workforce, Archie spoke passionately as the parent of two children in the Montgomery public school system. “My husband and I had options on where we would send our children to school, whether it is public, private or a magnet school,” Archie said. “But hard-working families in lowincome communities with failRep. Phil Williams, R-Huntsville: Charter schools are a needed option ing schools generally do not have that personal choice. They are trapped in under-performing schools, praying their children will get whatever education they can.” Shilheim Lee, a teacher at B.C. Rain High School in Mobile, urged members to approve the package and testified that while he served as a teacher in Houston, New Orleans and even as far away as Indonesia, he witnessed the most growth in all of his students while teaching at the Houston charter school. The committee also heard the testimony of Ashley Welch, a young mother who traveled to the hearing from Tuscaloosa. The parent of a six-year-old and the legal guardian of her younger sister, Welch told the committee she was, “looking for an education system that works and provides options to me as BCA Senior VP Anita L. Archie says business a parent.” She went on to tell a needs an educated workforce

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television reporter after the hearing that the school system she was raised in “failed me and everyone I know.” Opposition did not come from anyone in the room on the flexibility portion of the legislation. Most who spoke in opposition to the bill said they were supportive of more flexibility for superintendents, school boards and teachers, but they just did not want to have a charter school law passed in Alabama. Huntsville City Schools Superintendent Dr. Casey Wardynski, speaking on behalf of the School Superintendents Association, expressed his concern at how long it would take boards to properly review complex charter school applications in the time frame laid out in the legislation. He also said his association opposed the legislation because they wanted all schools to be successful, not just a handful of charter schools around the state. “This bill will maximize risk and increase uncertainty in planning for school districts,” said Wardynski. “I see no certain reward to compensate for that.” Some of the most telling opposition to the legislation came from Dr. Henry Mabry of the Alabama Education Association who told the panel that Alabama gets a “pretty darn good value” and a “pretty good deal” when it comes to education in Alabama. In an email to AEA members after the meeting, Mabry said opening up Alabama to a charter school law would allow such schools to avoid many laws already on the books and would create a dual system of education. While the committee did not take a vote after the public hearing, Love asked members of the committee who had questions or concerns to work with Rep. Williams this week or over the legislative spring break. The committee will likely vote on the measure the first week of April.

Brewbaker: Local superintendents would have more flexibility if Education Options Act is adopted Sen. Dick Brewbaker, R-Pike Road, who is carrying the BCA-endorsed Education Options Act of 2012 in the upper chamber, used Monday’s meeting of the Governmental Affairs Committee to outline his bill, which would bring charter schools to Alabama and provide more flexibility from State Board of Education regulations to public educators. Brewbaker, who served on Gov. Fob James’ staff as his education policy advisor from 1995-1997, said providing local school superintendents more

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ability to operate autonomously from over-burdensome regulations that are set in Montgomery is a primary goal of his measure. “In Alabama, we have what we like to call local control in public schools, but we really don’t,” Brewbaker said. “Between the state legislature, the State Department of Education and the administrative code, we have bound local school boards and superintendents very tightly to the system we want them to use.” He noted that most state dollars flowing into the Education Trust Fund are constitutionally or statutorily earmarked for specific purposes, and added that most local dollars are similarly assigned. As a result, Montgomery’s earmarking and its top-to-bottom pattern of regulation have largely removed decision-making powers from local school officials. Under the provisions of his legislation, Brewbaker said any local superintendent, with local board approval, could apply for a waiver from almost any state-mandated public education regulation if the flexibility could be tied to a specific and expected outcome. Scheduling school day start times and adjournments and allowing around-the-year schools with regular breaks between semesters are two examples he offered of waiver possibilities. The only administrative areas prohibited from being waived are retirement and health insurance benefits for teachers and support staff and rules governing fair dismissal. While the state superintendent is not mandated to grant waiver requests, they will likely be awarded when cases for stricter efficiency or improved student performance can be made, he said. Brewbaker added that granted waivers would be reviewed annually and revoked if predicted results are not achieved. “What we are trying to do is get some real local innovation not only in failing school systems but, more importantly, in successful systems as well,” Brewbaker said. “School superintendents often accuse those of us in Montgomery as acting like Moses handing down the Commandments from Mt. Sinai, but with this bill, they will finally get the flexibility and local control they have been requesting for so many years.” As a trade-off for the measure of autonomy, Brewbaker said superintendents are being asked to open the door to charter schools in areas of the state in which public schools routinely underperform. A persistently underperforming school, he said, is defined as one that ranks in the bottom 5 percent in the state in reading and math proficiency for

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three years in a row, and Alabama currently has 67 such schools that fall below those metrics. The Education Options Act of 2012 creates a new state appeals panel that could allow charter schools to open in areas with poorly performing schools. Local school boards, however, would decide whether to allow charters in systems that consistently meet minimum expectations. Charter schools are public schools operated with taxpayer dollars and open to any student within the district who wishes to attend. They do not charge tuition and, in states where charter schools operate, have proven so popular that waiting lists for openings often exist. Accountability and results are the top priorities in such schools, and the charters under which they operate specifically spell out the goals and student achievements they are expected to produce. Failing to meet these benchmarks, or unsuccessfully maintaining rigorous management and fiscal accountability, results in the school’s closure. In return for operating under these heightened standards, educators in charter schools are allowed leeway in the education processes they employ so long as they produce expected results. Most schools operate autonomous of the school board and, instead, use parents to constitute a specific board of trustees. Such freedom encourages innovation and experimentation in addition to the tried and true methods of teaching. Brewbaker said charter schools are targeted primarily toward underserved student populations, not high-achieving, college-bound students. English as second language students and those with learning disabilities also seem to thrive better in a charter school environment rather than a by-the-book, run-of-the-mill public school setting, he added. “Charter schools are aimed at children who will never see the inside of a magnet school,” Brewbaker said. “The difference between the charter schools that serve these underserved students and the regular public schools serving them now is that if the charter schools don’t demonstrate real, measurable gains, they will be closed. The regular schools serving them now have been failing, in most cases, for more than a decade and have never suffered any sanctions for low performance.” He noted that associations representing both local school boards and school superintendents currently oppose the charter school portion of the Education Options Act but covet the flexibility options it also carries. Brewbaker said he hopes the bill’s evolution throughout the legislative

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process, along with the strong support of the business community, will convince the associations to eventually jump on board with the legislation. “I’m hoping we can get them on board by educating them about what the bill does do, but, more importantly, also educating about the things it does not do, but they think it does,” Brewbaker said. The fact that Alabama is among the last states in the nation to approve charter school legislation may prove to be a bonus, Brewbaker concluded, because it gives our state a chance to look at what has and has not worked elsewhere.

Senate approves aircraft incentives to promote job growth in aerospace industry By a vote of 28–0, the Alabama Senate passed HB 39, by Rep. Paul Lee, R-Dothan, which provides an exemption from sales and use taxes on parts, components and systems incorporated into a refurbishment of certified military, governmental or commercial transport aircraft or rotary wing aircraft. The incentive legislation is designed to assist in-state aerospace companies that refurbish aircraft. These companies are currently at a competitive disadvantage versus their competitors in other states, where the parts used in such conversions are exempt from taxes. The Senate added an amendment to the bill that would terminate the incentive on May 30, 2020, unless the exemption is extended by a joint resolution of the legislature, causing the bill to be returned to the House. BCA supports this legislation.

House panel favorably OKs tax reform bill for independent tax appeals commission With very little discussion, the House Judiciary Committee voted to favorably report HB 105, by committee Chairman Rep. Paul DeMarco, R-Homewood, a testament to efforts by Rep. DeMarco to clearly explain the lengthy bill and answer members’ questions. The bill has been introduced in several previous legislative sessions. The concept of an independent tax appeals tribunal is the model used in 22 states, while other sections of the bill that pertain to the Taxpayers’ Bill of Rights update the procedures and provisions of federal law that the

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state will use to equitably deal with taxpayers. Under the auspices of the Business Associations Tax Coalition (BATC), the BCA is among some 27 business and trade associations that have endorsed this bill. HB 105 now moves on to be considered by the full House.

Senate Committee approves film production tax incentives The Senate Finance & Taxation-Education Committee approved a substitute version of HB 243, by Rep. Terri Collins, R-Decatur, that further expands tax incentives available for film productions in Alabama. As in previous versions, the cap on the size of specific projects would double from $10 million to $20 million, but the substitute version would not increase the aggregate cap for such incentives by as much as originally passed by the House. The committee substitute to HB 243 raises the aggregate annual cap for film incentives from $10 million to $15 million, whereas the House-passed version phases-in increases in the aggregate cap from $10 million to $25 million by 2015. The BCA supports HB 243, which now moves to the Senate calendar and will be debated by the full Senate after the legislature returns from its break.

Pharmacy bill that would save jobs close to becoming law

The Senate Health Committee has approved HB 393, by Rep. Lynn Greer, R- Rogersville, which further defines the term “pharmacy services.” The bill is intended to satisfy recent requirements imposed by the Alabama Board of Pharmacy on a northwest Alabama call center, allowing it to retain 220 jobs. The bill, as amended, would prevent additional regulation of Pharmacy Benefit Managers (PBMs) that are used by employers of all sizes, as well as by state public employee and educator benefit programs, such as the Retirement Systems of Alabama and the State Employee Insurance Board, to administer prescription drug benefit programs and restrain rising costs. PBMs are currently regulated by the Alabama Board of Pharmacy as well as the Alabama Department of Insurance and the Federal Drug Administration. The bill will be considered Tuesday, April 3, by the full Senate. The bill as amended would provide a “win-win” situation by helping to retain existing jobs in Muscle Shoals and protecting the ability of employers and

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state government to continue to offer affordable prescription drug benefits to their employees through the use of PBMs. BCA supports efforts that help contain health care costs for employers.

House Committee approves bill to extend capital credits The House Economic Development and Tourism Committee approved SB 48, by Sen. Arthur Orr, R-Decatur, which provides that businesses that qualify for the state’s income tax capital credits may carry forward the credits for up to four additional years. A Revenue Department report on the actual utilization of capital credits shows that significant portions of credits are not taken because many of the companies are not profitable in their early years of operation. If enacted, qualifying companies that create at least 100 jobs and make capital investments of at least $100 million may have up to an additional four years to take the capital credits.

Committee OKs ADEM term limit bill HB 506, by Rep. Jack Williams, R-Birmingham, received a favorable report from the House Commerce and Small Business Committee. The bill would limit to two the number of terms for members of the Alabama Environmental Management Commission and expands the qualifications for one of its members to include not only a person who has been certified by the National Water Well Association Program but also a person who is a hydro-geologist or geologist or a person certified by the National Ground Water Association.

Speaker pleased with productivity as session reaches halfway point As lawmakers reached the halfway point of the 2012 Regular Session, House Speaker Mike Hubbard said Thursday he was pleased with the productivity of the session so far. The House has passed a significant portion of its priority legislation, including a slate of job-growth bills. Other important bills are moving through committee, including proposals that would reform the state’s retirement systems, offer more flexibility and choice for parents whose

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children are in public schools, and repeal the 2007 legislative pay raise and allow voters to set legislative pay at median income. “Our top priority was passing job-growth legislation, and we’ve accomplished that,” Hubbard said. “Other significant items are successfully moving through committee and are poised to come before the full House in the second half of the session. Our members have worked hard representing the needs of their constituents and moving Alabama forward.”

Bills of interest to business include: % The

Alabama Data Processing Center Economic Incentive Enhancement Act, HB 154, by Rep. Dan Williams, R-Athens, passed by House, passed by Senate Committee, pending action by the full Senate. Data processing centers are key components of the 21st century economy. These centers employ a skilled workforce, provide highpaying jobs, and have a low environmental footprint. Alabama is uniquely positioned to compete for jobs in this growing industry. This proposal would expand the scope of certain tax incentives in order to focus on recruiting more data processing centers to Alabama.

% The Alabama Job Creation & Retention Act, House Bills 159 & 160,

by Rep. Barry Mask, R-Wetumpka, passed by the House, pending committee action in the Senate.

This constitutional amendment (HB 159) would allow voters to give the governor and the Alabama Development Office more flexibility in offering tax incentives to land major economic development projects and retain companies that might otherwise relocate outside Alabama without having to call a special session of the legislature. The corresponding enabling bill (HB 160) sets strict parameters for how incentives can be used to ensure return on investment.

% Spurring Investment in Struggling Communities, HB 257, by Rep.

Jamie Ison, R-Mobile, passed by the House, pending committee action in the Senate. This bill would encourage economic investment and job growth in low-income areas by leveraging available federal tax incentives with new state tax incentive offerings.

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In exchange for their investments in qualified businesses and projects located in low-income downtown areas throughout Alabama, the state will offer investors a future tax credit. Investors could claim a 50-percent graduated tax credit over the course of seven years for investments up to $240 million. The credit would be zero for the first year, 8 percent for each of the next five years, and 10 percent the seventh year.

BCA members honored at AAMA event BCA member ZF Axle Systems of Tuscaloosa was named Supplier of the Year by the Alabama Automotive Manufacturers Association this week. Plant manager Ron Davis, PE, is a member of the BCA Board of Directors. Several other BCA members were finalists for the award: Aluminum Technology Schmid-North America, Inc., Eissmann Automotive North America, Inc., Hwashin America Corporation and Navistar Diesel of Alabama, LLC.

Washington Br iefing

Senate Rejects Ex-Im Bank Reauthorization The Senate on Tuesday voted 55-44 not to reauthorize the U.S. ExportImport (Ex-Im) Bank. The measure, offered as an amendment to the unrelated House-passed job creation package H.R. 3606, needed 60 votes to proceed. Just before the vote, Senate Minority Leader Mitch McConnell (R-KY) urged his colleagues to vote no on the cloture motion, not because of opposition to reauthorization but because of parliamentary objections. Attaching the provision would send the bill back to the House and slow progress on the overall bill. The reauthorization amendment offered by U.S. Sen. Richard Shelby (R-AL), ranking Republican on the Senate Banking Committee, along with U.S. Sens. Maria Cantwell (D-WA), Lindsey Graham (R-SC) and Banking Committee Chairman Tim Johnson (D-SD) would increase the bank’s lending limit to $140 billion from $100 billion and extend the life of the bank through 2015.

2011 A N N U A L M E E T I N G

The CCAA Board of Directors: 1st row, left to right: Ronnie Acker, Bessemer Chamber of Commerce; Jan Wood Wells, Chair of the Chamber of Commerce Association of Alabama; Kirk Mancer, Cullman Area Chamber of Commerce; 2nd Row, left to right: Mary Patchunka Smith, Clay County Chamber of Commerce; Lolly Steiner, Auburn Chamber of Commerce; Pamela Burnham, Saraland Chamber of Commerce; Morri Yancy, Lake Guntersville Chamber of Commerce; Jeremy Arthur, executive director of the Chamber of Commerce Association of Alabama; Marvin Waggoner, Alexander City Chamber of Commerce; Jim Page, West Alabama Chamber of CommerceÂ

BCA Chairman Will Brooke gives final remarks before handing over the gavel to incoming BCA Chairman Terry Kellogg

Major Garrett, Congressional correspondent for National Journal, talks with former BCA Chair Carol Gordy

THE FOUNDATION FOR PROGRESS â&#x20AC;˘ 2012

BOARD

DIRECTORS

Members of the BCA Board of Directors listen during their meeting in Montgomery

New members of the BCA Board of Directors listen to BCA President and CEO William J. Canary during an orientation luncheon in Montgomery

C H A I R M A N’S DINNER

2011 BCA Chairman Will Brooke presents former Governor Bob Riley with the annual “Chairman’s Award”

COMMITTEE LEADERSHIP DAYS

The BCA Judicial and Legal Reform Committee discusses changes to the 2012 State Legislative Agenda

Speaker of the House Mike Hubbard addresses attendees during the 2011 Committee Leadership Days

BCA Chairman Will Brooke presents Sen. Arthur Orr with an Advocate for Progress Leadership Award. These awards were presented to legislators at the 2011 Governmental Affairs Conference

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GOVERNMENTAL AFFAIRS CONFERENCE

Attendees at the Governmental Affairs Conference listen to retired General Stanley McChrystal give the keynote address on Saturday morning Governor Robert Bentley greets Chester Vrocher and his wife Nancy upon his arrival at the Governmental Affairs Conference

Rep. AJ McCampbell speaks to Ron Buford of Alabama Power Company at the opening reception of the Governmental Affairs Conference

Â Governor Robert Bentley sits with BCA 2nd Vice Chairman Carl Jamison during a speech by former Secretary of Education Margaret Spellings Rep. Pebblin Warren and her husband, Macon County Sheriff David Warren, visit with Fred and Laurel Blackwell at the opening reception for the Governmental Affairs Conference

GOVERNMENTAL AFFAIRS MEETINGS

A standing-room only crowd listened to House Speaker Mike Hubbard at the first meeting of the Governmental Affairs Committee of the legislative session

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H E A L T H FO R U M S

Above, from left to right: BCA President and CEO William J. Canary; BCA Senior Vice President Anita L. Archie, Rep. Paul Lee and former BCA Chairman and current Treasurer Charles Nailen attend the Dothan health care forum Owen Bailey, chairman of BCA’s Health Committee and administrator of USA Children’s and Women’s Hospital in Mobile, speaks to the press about the importance of the health care forums for businesses across Alabama.

Denson Henry of Henry Brick Company speaks to particpants at the Selma Health Care Forum

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RECEPTION SALUTING LEADERS OF STATE GOVERNMENT A N D C E L E B R A T I N G BCAâ&#x20AC;&#x2122; S 25 T H A N N I V E R S A R Y

Sen. Jabo Waggoner, R-Vestavia Hills; Sen. Greg Reed, R-Jasper; Sen. Phil Williams, R-Rainbow City are among the attendees at the 2011 Reception Saluting Leaders of State Government

Left to right: Harris Morrissette of China Doll Rice and Beans; David Perry, chief of staff to Governor Robert Bentley; Sandy Stimpson of Scotch and Gulf Lumber; Erik Johnsen of International Shipholding

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2 012 A L A B A M A MANUFACTURER OF T H E YE A R A W A R D S BCA President and CEO William J. Canary welcomes guests to the 2012 Alabama Manufacturer of the Year Awards ceremony in Montgomery

Attorney General Luther Strange visits with Dick Anderson and Don Hopper of Huron Valley Steel, and Jeremy Nails of the Morgan County Economic Development Association prior to the Manufacturer of the Year Award ceremony

BCA and ATN officials pose with the winners of the Manufacturer of the Year Awards. The 2012 winners were Austal USA (large category), Daikin America Inc. (medium category), and Cascades Sonoco (small category)

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The Ex-Imâ&#x20AC;&#x2122;s authority expires in May, and failure to reauthorize ExImâ&#x20AC;&#x2122;s operations at an internationally competitive level would seriously disadvantage U.S. companies, small and large, in foreign markets, threatening thousands of American jobs that depend on its crucial export financing. The Ex-Im Bank provides loan guarantees to foreign companies that buy U.S. exports. Most industrialized nations have some sort of similar entity. Reauthorization of the U.S. Export-Import Bank prior to its charter expiring on May 31, 2012, is a BCA federal legislative priority.

House to Consider Short-Term Transportation Extension The House next week will consider a short-term extension of the transportation and infrastructure reauthorization bill. By not taking up the two-year highway funding bill, S. 1813, approved by the Senate last week, final passage of a long-term bill will be prolonged. The transportation bill is critical because it establishes the funding mechanism through which the federal government pays its share of the cost of transportation repair and construction projects carried out by state and local governments. House leaders have indicated they will put forward an extension of 45 or 60 days that keeps funding at current levels. Senate Majority Leader Harry Reid (D-NV), however, said this week that he does not plan to schedule a Senate vote on a short-term extension, setting up a standoff between the two chambers. Passage of a multi-year federal transportation reauthorization is a BCA federal legislative priority.

Senate Approves Insider Trading Bill The Senate on Thursday voted 96-3 to give final congressional approval to the Stop Insider Trading on Congressional Knowledge Act, the STOCK Act. The bill, S. 2038, is intended to apply insider trading laws to Capitol Hill to ensure lawmakers and their staff do not profit from nonpublic information. Originally passed by the Senate in February, the House-passed version did not include some of the more forceful provisions, forcing the Senate to reconsider. The bill now heads to the White House where President Barack Obama is expected to sign it.

CHAPTER 9 April 2, 2012

A F T E R M O N T H S O F WO R K , C H A N G E S I N T R O D U C E D TO I M M I G R A T I O N L A W “To be successful, you have to have your heart in your business, and your business in your heart.”

T H O M A S WA T S O N , S R.

ooper Shattuck, legal advisor to Gov. Robert Bentley, outlined several proposed legislative changes to Alabama’s illegal immigration statute for BCA’s Governmental Affairs Committee on Monday, three days before HB 658, by Rep. Mickey Hammon, R-Decatur, was introduced. BCA supports the legislation. “The intent of the immigration law was never to make it difficult for businesses to comply and burden businesses with unnecessary red tape,” said BCA President and CEO William Canary. “These changes, while not perfect, are a much-needed step in the right direction and will allow businesses to clearly comply with both federal and state immigration law. We will work actively for the passage of HB 658, urging our member companies to voice support for these necessary changes in the law.” Shattuck told the group that the changes were meant to “make [the statute] more enforceable, more clearly understood and more effective in accomplishing the genuine goals it should have rather than some of the other goals others have attributed to it.” While promulgating the suggested changes, the Bentley administration met with several stakeholder groups, Shattuck said, including the BCA and other similar associations in an attempt to address some lingering concerns. Calling the immigration statute one of the “most misunderstood and misrepresented” pieces of legislation in recent history, Shattuck walked attendees through several proposed adjustments. Among them: 105

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Section 3, which provides definitions for certain words and phrases in the bill. A “business entity,” for example, will be redefined to include only those entities employing one or more persons in Alabama. The change will prevent those who contract with out-of-state companies that do not employ Alabamians from having to comply with e-verify requirements on the out-of-state business. Similarly, the term “employee” will be redefined to include only those employed within the state of Alabama, which exempts out-of-state employees from e-verify requirements. A “state-funded entity” would be redefined to one that “receives more than 50 percent of its total revenue in any one of the three preceding fiscal years from a state, county or political subdivision.” Section 5 and Section 6 currently allow citizens to file suit for failure to enforce portions of the statute. Thus, attorneys, fearing claims filed against their clients, have interpreted the statute’s provisions in the broadest terms possible. Shattuck said the proposed change would allow citizens to petition the state attorney general to initiate a lawsuit, which would provide an added level of review and lessen the possibility of actions being filed. Section 7, which addresses public benefits, would require only those agencies that fund public benefits to verify citizenship of recipients. A current interpretation has led even those agencies that administer benefits funded by another to comply with verification requirements, which simply adds to paperwork, confusion and redundancy. Because public benefits include obtaining licenses and professional certifications, Shattuck said the change will be important to many within the business community. He added that license renewals would not be subject to verification of immigration status, only initial applications. Section 9 governing the awarding of grants, contracts or incentives by a public entity would see the requirement that contractors and subcontractors submit affidavits attesting to the legal status of their employees removed and, instead, would simply require them to participate in the e-verify process for their workers. In addition, a contractor could not be held liable if a subcontractor employs those here illegally unless it can be proven they had clear and convincing previous knowledge of the violation. Section 9 and Section 15 would see the requirement that violators lose their business licenses replaced with a progressive punishment system that is up to the discretion of the courts.

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Section 12 would see its provisions changed to allow law enforcement to verify citizenship status only when a traffic citation has been issued or an arrest has been made. If those conditions have been met, anyone in the car can be asked to provide proof of citizenship or legal status. Section 13 deals with those caught “concealing, harboring or shielding” illegal immigrants. A proposed change would make the statute apply only to those shielding an illegal immigrant “from detection,” so simply having an illegal immigrant in a vehicle would no longer automatically trigger the provision. Religious groups would be exempt from the provision. Section 14 currently makes it illegal to copy a false identification document, which creates a conflict for employers who must copy documents in order to verify employees’ status. That conflict would be excised with the proposed changes. Section 17 allows lawsuits to be filed when an illegal immigrant is hired by an employer in place of a lawful citizen who also applied for the position. A proposed change would require the plaintiff to prove actual discrimination led to the hiring and provides an exemption for employers who hire for a legitimate business reason. A new criminal charge for filing a false or frivolous lawsuit under this section would also be created. Section 18 currently requires law enforcement personnel to bring someone before a magistrate if he cannot produce a drivers’ license and is suspected of having illegal citizenship status. Because not every area of Alabama has a magistrate available 24 hours a day, Shattuck said this provision could lead to embarrassment for the state if someone with legal status is jailed while awaiting a judge. The proposed change would provide law enforcement the discretion of allowing someone to go free in these cases. Section 28 would still allow the State Department of Education to determine the cost of educating illegal immigrants enrolled in the public school system but would not allow educators to question students or parents about their legal status. Section 30 would be changed to define business transactions with the government to include obtaining motor vehicle license plates, drivers’ licenses and business licenses. In only these cases would citizens be asked to prove their legal status, and only upon first application, not renewals. Shattuck said the laundry list of amendments does not address every concern that was expressed about the statute but goes far toward providing relief from its most cumbersome provisions.

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He noted that the changes should not have a significant impact on the pending federal court litigation involving the immigration statute. Though some plaintiff concerns will likely be addressed by the proposed changes, other provisions with which they strongly disagree would remain intact. Shattuck noted that much of the litigation remains in limbo while the U.S. Supreme Court’s ruling on a similar Arizona immigration statute is anxiously awaited.

HB 541 on way to full House after committee gives favorable report After a sometimes contentious three days of meetings, the House Ways and Means Education Committee gave a favorable report to HB 541, the Education Options Act, which would allow Alabama to join the majority of other states and offer public charter schools, as well as offer existing schools more flexibility from burdensome state laws and regulations. The committee voted 9-6 to approve the bill, with the five Democrats and one Republican, Rep. Jeremy Oden, R-Vinemont, voting against the measure. Sponsored by Rep. Phil Williams, R-Huntsville, the legislation would help educators customize schools for the needs of their students by allowing school systems to develop innovation plans that seek flexibility from burdensome state laws and regulations in exchange for greater accountability for performance and establish public charter schools in districts with persistently low-performing schools. “We are pleased that the House Ways and Means Education Committee has given a favorable report today to the Education Options Act of 2012,” said BCA President and CEO William Canary, who was present for the 9-6 vote, along with Anita L. Archie, senior vice president for Intergovernmental Relations, Advocacy and Communication s and Legal Advisor. Canary reiterated the BCA’s support of the bill: “Education options and flexibility equal more success for our children. The Business Council of Alabama is proud to support this historic education package that finally will provide parents more options to improving the education of their children while at the same time allow teachers more flexibility for classroom instruction. Businesses are the number one consumer of the product education, and when Alabama adopts this legislation, the dropout

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rate will decline, more students will be prepared to enter the workforce, and our economy will grow.” Rep. Williams said the committee vote was a big step forward for education reform in Alabama. “Today was a victory for students and parents who have never been given an option of a quality school,” Rep. Williams said. “Public charter schools will bring a new dynamic to Alabama education that can breathe new life into areas that have fallen dreadfully behind. The great thing about this bill is that it offers every school district in Alabama many of the same flexibilities that are given to charter schools. If our administrators take advantage of this proposal, every school in Alabama could benefit from the Education Options Act.” State School Superintendent Tommy Bice had said he was pleased with the revised version of the bill, but under questioning Thursday from committee member Rep. Craig Ford, D-Gadsden, Bice said he could not support the bill as amended because some state school board members still had concerns about resources and the review process for applications. The committee deliberated the proposal for more than two weeks, eventually altering the plan to tighten the focus of charter schools to areas with struggling schools and limiting the total number of charter schools to 20 statewide. House Speaker Mike Hubbard said support for the bill was growing among House members. “The more people learn about the opportunities charter schools can offer the more they support the idea of finally allowing them in Alabama,” Hubbard said. “Too often our system puts the needs of the education bureaucracy above the needs of students. We saddle schools with burdensome rules and regulations instead of getting out of the way and letting teachers teach. While we work to improve our overall education system from the ground up, we must also allow parents, educators and community leaders flexibility from one-size-fits-all regulations so they can fix local problems with local solutions.”

House approves bill for independent tax appeals commission By a vote of 89-0, the Alabama House passed HB 105, by Rep. Paul DeMarco, R-Homewood, which provides for an independent Alabama Tax Appeals Commission and updates provisions related to the Alabama Taxpayers’ Bill of Rights. The bill has been introduced in several previous

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legislative sessions, and the concept of an independent tax appeals tribunal is the model used in more than half of the states, with Georgia being the latest to adopt the model. The remaining Taxpayers’ Bill of Rights section of the bill aligns and updates procedures and provisions with federal law that the state will use to deal equitably with taxpayers. Under the auspices of the Business Associations Tax Coalition (BATC), the BCA is among some 27 business and trade associations that have endorsed this bill. HB 105 now moves on to be considered by the Senate.

House committee amends bill to create ‘single-point’ of filing for sales/use taxes to also include rental/lease taxes Businesses that now pay state-local sales/use and rental/lease taxes to multiple jurisdictions will soon have a central site to electronically file and pay their tax obligations. Up to now, Alabama’s patchwork of local sales/ use tax rates, along with local tax administration conducted by state or local officials as well as third parties, have combined to make tax compliance a costly ordeal for businesses. The House Commerce & Small Business Committee gave a favorable report to HB 597, by Rep. Jack Williams, R-Birmingham, which creates the “One-Spot” system under the Alabama Department of Revenue for filing and paying sales/use and rental taxes to all Alabama governmental bodies. The bill sets up an eight-member Advisory Commission, composed of three members from county government, three members from municipal government, a representative from the BCA and a representative from the Alabama Retail Association, to advise the commissioner of revenue on the development and operation of the system. The bill further requires local governments to provide tax rate information and to provide updates to that information as changes occur. The BCA supports this legislation.

Senate passes tax incentives for data processing centers and extends tax incentives to distribution centers Late Thursday afternoon, the Alabama Senate passed HB 154, by Rep. Dan Williams, R-Athens, which reduces the minimum number of new jobs that must be created for a data processing center to qualify for tax abatements and capital credits from 50 to 20 jobs. The bill also provides

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that the term of abatements for data processing centers may be extended, based on several capital investment thresholds, from a maximum of 10 years to up to 30 years. Heeding concerns expressed by several senators that the exclusion of warehousing and storage operations would hamper the stateâ&#x20AC;&#x2122;s chances of luring distribution centers, Sen. Trip Pittman, R-Daphne, offered a floor amendment that restored the capital credits to certain warehousing and storage activities that provide at least 50 new jobs and have a capital investment of at least $5 million in non-favored geographic areas or at least $1 million in favored (economically distressed) areas of the state. That amendment will keep the state in play for several distribution center projects. HB 154 will now be returned to the House for its members to consider the changes made by the Senate. The BCA supports this legislation.

Bill exempting aircraft parts, components being transmitted to the governor The Alabama Senate took most of the day on Thursday to end a filibuster and bring to a vote the conference committee report for HB 39, by Rep. Paul Lee, R-Dothan. That bill provides for the exemption of state sales/ use taxes on parts, components and systems that are incorporated into the refurbishment of certified military, government or commercial transport fixed-wing or rotary wing aircraft. The bill is intended to remove a competitive disadvantage experienced by Alabama companies that refurbish aircraft relative to their competitors in other states, where the parts used in such conversions are tax exempt. The bill includes a provision that will terminate the tax exemption on May 30, 2022. The BCA supports this legislation.

Senate OKs plan to change unemployment benefit payments The Alabama Senate approved SB 300, by Sen. Trip Pittman, R-Daphne, that would reduce unemployment compensation payments by some $11.4 million annually. Currently, weekly unemployment benefits are interrupted for one week after 13 weeks of payments and then resume. The bill would delay the first unemployment payment a week, but the interruption after

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13 weeks would not happen. According to published reports, the state’s unemployment compensation fund would save $11.4 million a year under the bill because unemployed persons collecting benefits who found a job before the waiting period after the 13th week would lose a week’s benefits compared to the current law.

Pharmacy bill that would save jobs awaits governor’s signature HB 393, by Rep. Lynn Greer, R-Rogersville, that aims to retain 220 jobs in the Shoals area passed the Senate unanimously and now awaits the governor’s signature. The bill further defines the term “pharmacy services” and protects the ability of employers and state government to continue to offer affordable prescription drug benefits to their employees through the use of pharmacy benefit managers (PBMs). PBMs are used by employers of all sizes, as well as by state public employee and educator benefit programs such as the Retirement Systems of Alabama and the State Employee Insurance Board, to administer prescription drug benefit programs and are a tool to prevent rising prescription costs. BCA supports efforts that help contain health care costs for employers.

Senate committee OKs bill to curb manufacture of methamphetamine HB 363, by Rep. Blaine Galliher, R-Gadsden, seeks to clamp down on the manufacture of methamphetamine in Alabama while still allowing persons to purchase over-the-counter products containing ephedrine and pseudoephedrine (PSE), such as common cold and allergy medications. It is one step closer to becoming law. The bill was reported favorably by the Senate Health Committee and now heads to the full Senate. The bill was a collaborative effort by legislators, business groups, law enforcement and the District Attorneys Association to make changes to the existing law that would not penalize consumers who purchased these products for lawful reasons and would also provide mechanisms beneficial to law enforcement to track those who purchase products containing PSE to manufacture meth. The companion bill, SB 344, by Sen. Bill Holtzclaw, R-Madison, previously passed the Senate Health Committee with only one dissenting vote. BCA supports this bill.

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Governor signs “Heroes for Hire” jobs bill Gov. Robert Bentley has signed into law HB 152, by Rep. Duwayne Bridges, R-Valley. The bill provides an additional $1,000 tax credit to employers who hire unemployed military veterans who were recently deployed and are now discharged from military service. The bill further provides that unemployed veterans will be allowed a nonrefundable credit of up to $2,000 for expenses related to a start-up business in which he or she owns at least a 50-percent interest. The BCA supports this legislation.

Jeremy Arthur to Head Chamber of Commerce Association of Alabama The Board of Directors of the Chamber of Commerce Association of Alabama has named Jeremy Arthur, current president of the Prattville Chamber of Commerce, as its new executive director. Arthur will assume the position in mid-May. “We are extremely pleased and fortunate to have a person with the unique blend of experience and professional ability that Jeremy Arthur brings to the executive directorship of the Chamber of Commerce Association of Alabama (CCAA),” said CCAA board member William J. Canary, president and CEO of the Business Council of Alabama. The BCA and the CCAA, through a unique relationship known as The Partnership, together represent the interests of some one million working Alabamians through BCA’s member companies and more than 120 local chambers of commerce. “We have known and enjoyed working with Jeremy for the past eight years at the Prattville Chamber,” said Canary, “and we look forward to working even closer in our new partnership on all matters important to our state in his new capacity at CCAA.” Arthur brings several years of experience in chamber of commerce work to the CCAA job. In 2004, he was named executive vice president of the Prattville Chamber, and subsequently was named president of the organization that has more than 875 members in one of the fastestgrowing areas of Alabama. Before joining the chamber, he was an outreach research assistant for the Economic Development Institute at Auburn University. He holds a bachelor’s degree in political science, a master’s degree in public

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administration and is a doctoral candidate in public administration and public policy, all from Auburn. “I am excited about the new opportunity that awaits me,” said Arthur. “Under the leadership of CCAA Board Chairman Jan Wood and the entire CCAA Board of Directors, I look forward to helping achieve the CCAA’s goal of ‘building a better Alabama through strong chambers of commerce.’” Arthur is a member of several national organizations, including the board of directors of the Auburn Alumni Association, the American Society for Public Administration and the American Chamber of Commerce Executives. He was also elected vice-chairman to the U.S. Chamber of Commerce Board of Regents representing the Southeast Institute for Organization Management (IOM). He is an active member of numerous statewide organizations, including the board of directors of the CCAA and the Economic Development Association of Alabama, where he is currently serving on its Conference Committee.

Washington Br iefing

Congress Passes Transportation Extension On March 29, both the House and the Senate passed a 90-day extension of H.R. 4281, of the federal highway and transit programs. The extension now goes to President Barack Obama for signature. The current extension was set to expire March 31. Without an extension, transportation programs, along with the gas tax, which funds these programs, would have expired. Passage of a multi-year federal transportation reauthorization is a BCA federal legislative priority.

JOBS Act Sent to President’s Desk The House last week gave final approval to a package of bills, H.R. 3606, designed to remove the barriers preventing small businesses and start-ups from accessing capital they need to grow. The bipartisan legislation now goes to President Barack Obama, who has said he will sign it. The 380-41 House vote came after the House overwhelmingly passed it in early March and the Senate passed it on March 22. Because the Senate

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amended the House version to add investor protections, the House had to vote on it again before sending it to the White House. Under the JOBS bill, small businesses would have a reprieve from costly SEC regulations by phasing in certain regulations over a five-year period or until the company reaches $1 billion in revenue. The bill also would repeal the solicitation ban on companies trying to raise capital. The Senate added some investor protections, including a provision to ensure that any company using crowdfunding methods must still file basic information with the securities commission. This information would include the names of directors, officers and holders of more than 20 percent of the companyâ&#x20AC;&#x2122;s shares, plus a description of the business and its financial condition. Companies seeking to raise $100,000 or less also would be required to provide tax returns and a financial statement certified by a company principal; those raising up to $500,000 must provide financial statements that are reviewed by an independent public accountant. The Senate also included requirements that intermediaries seeking to help companies raise money through crowdfunding register with the commission, ensure investors are advised of the risks and take measures to prevent fraud.

BCA Joins Industry Letter on Ex-Im Bank The Business Council of Alabama joined more than 300 companies and associations in signing a letter, spearheaded by the National Association of Manufacturers, to congressional leadership urging the House and Senate to bring Ex-Im Bank reauthorization to a vote. Ex-Im Bank is a vital tool to help grow U.S. exports and boost American jobs. The Bankâ&#x20AC;&#x2122;s authorization expired at the end of September 2011, and the bank is currently operating under a short-term extension that ends on May 31. Passage of a long-term reauthorization of Ex-Im Bank is a federal legislative priority of the BCA.

Panel hears testimony in House chamber on immigration law

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BCA R E I T E R A T E S S U P P O R T A T P U B L I C H E A R I N G ON IMMIGRATION REVISIONS “Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit.”

CONRAD HILTON

he Business Council of Alabama reiterated its support for legislation that makes revisions to the state’s immigration law as a public hearing on HB 658 got under way Wednesday. “The intent of the immigration law was never to make it difficult for businesses to comply and burden businesses with unnecessary red tape,” said BCA President and CEO William Canary. “These changes, while not perfect, are a much-needed step in the right direction and will allow businesses to clearly comply with both federal and state immigration law. We will work actively for the passage of HB 658, urging our member companies to voice support for these necessary changes in the law.” The two-hour hearing before the House Public Safety and Homeland Security Committee was held in the House chamber. The committee heard from opponents and proponents but did not vote on the bill. Bill sponsor Rep. Micky Hammon, R-Decatur, said he felt the original bill worked and accomplished what lawmakers intended, but the proposed changes to HB 658 would improve it. The Senate Judiciary Committee held a public hearing Wednesday afternoon on SB 41 by Sen. Billy Beasley, D-Clayton, which would repeal the original legislation, HB 56. Proponents, including students, businessmen and Sen. Hank Sanders, D-Selma, spoke passionately about the need to repeal the law, which they said hurts families as well as the state’s economy. Sen. Ben Brooks, R-Mobile, thanked those who testified 117

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and said the committee would “approach the issue with great compassion and great sensitivity” before making a decision.

House Committee approves ‘single point of filing’ bill The House Commerce & Small Business Committee gave a favorable report to SB 459, by Sen. Slade Blackwell, R-Mountain Brook, which creates the “One-Spot” system under the Alabama Department of Revenue for filing and paying sales/use and rental taxes to all Alabama governmental bodies that levy such taxes. The bill directs the Department of Revenue to provide up to $1 million for three years to assist local governments in interfacing with the system. The bill further sets up an eight-member Advisory Commission, composed of three members from county government, three members from municipal government, a representative from the BCA and a representative from the Alabama Retail Association, to advise the commissioner of revenue on the development and operation of the system. The bill requires local governments to provide tax rate information and to provide updates to that information as changes occur. Gov. Robert Bentley praised the Senate approval of the bill. “We owe it to the taxpayers to be good stewards of the money they send to Montgomery,” he said, “and with this system, we can offer businesses an efficient process that meets their administrative needs. We have heard from some companies that a hindrance to doing business in this state is the complexity of the tax filing system. By streamlining the system, we are making Alabama even more open for business and future economic development.” The bill now moves to be considered by the full House. The BCA supports this legislation.

‘Clean’ version of Education Options Act gets House committee approval The House Ways and Means Education Committee gave a favorable report to HB 650, a “clean” version of the Education Options Act of 2012, which would allow Alabama to offer public charter schools, as well as offer existing schools more flexibility from burdensome state laws and regulations, in exchange for more accountability. The committee had

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already approved a similar measure last week but Chairman Jay Love, R-Montgomery, said sponsors wanted a “clean bill” incorporating several rewrites and changes approved last week. The new bill, Love said, would make it easier to follow on ALISON, the legislative online service. The new version now has the approval of the Alabama Association of School Boards. AASB President Steve Foster said the bill is now aligned with its position on flexibility for all public schools. The group had been concerned the bill did not require schools to locate in the zones of failing schools. Several proponents spoke at the public hearing Wednesday, including Barbara Rountree, director of The Capitol School, a private school in Tuscaloosa, who welcomed the chance to have a charter school in that city where her teachers help tutor students from a failing public school. The committee voted 9-4 to approve the bill. Voting for the bill were Committee Chairman Rep. Jay Love, R-Montgomery; Rep. Terri Collins, R-Decatur; Rep. Jamie Ison, R-Mobile; Rep. Barry Mask, R-Wetumpka; Rep. Mary Sue McClurkin, R-Pelham; Rep. Steve McMillan, R-Bay Minette; Rep. Bill Poole, R-Northport; Rep. Phil Williams, R-Huntsville; and Rep. Mark Tuggle, R-Alexander City. Voting against the bill were Rep. James Buskey, D-Mobile; Rep. Jeremy Oden, R-Vinemont; Rep. Patricia Todd, D-Birmingham; and Rep. Rod Scott, D-Fairfield. Two members, Rep. Craig Ford, D-Gadsden, and Rep. John Rogers, D-Birmingham, voted against the bill last week but were not present to vote on HB 650. BCA supports this legislation.

Finance chief briefs BCA on state’s economic situation Just hours before the House of Representatives debated and approved a Fiscal Year 2013 General Fund budget that reduced spending by $340 million compared to the current year, State Finance Director Dr. Marquita Davis addressed the BCA Governmental Affairs Committee to brief members on the status of Alabama’s economic situation. Noting that Alabama is one of three states in the nation that has two budgets divided between education and government operations, Davis said this is the first year that the Rolling Reserve Budget Act, passed by the legislature in 2011 and designed to prevent proration declarations in public schools, will be in effect.

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Under provisions of the law, state revenue estimates in the Education Trust Fund are required to be based upon a rolling 15-year average rather than undependable income projections, and any leftover monies are placed in a reserve that can be used to replenish the Rainy Day Fund. Because of the newly implemented budgeting cap, proposed spending in the almost $6 billion Education Trust Fund lags behind current year expenditures by more than $100 million. Davis said the funding issues in the ETF are minor when compared to the General Fund. Original estimates for the spending plan that covers most non-education related agencies indicated a shortage of $469 million in a budget of just $1.3 billion — a shortfall of almost 47 percent. The finance director said Gov. Robert Bentley’s administration first considered across-the-board cuts of 25 percent in state agencies as a means of combating the shortfall, but circumstances and constitutional mandates made that scenario impossible. “You can’t cut prisons by 25 percent, for example, because their constitutional duties are protected,” Davis said. “Cutting 25 percent from Corrections would mean allowing 11,000 prisoners to go free, and that’s not a threat — It’s a reality.” Davis said that two days after the legislature convened, Bentley took a new tack with the budgets and proposed paying for approximately $185 million in General Fund programs related to children, such as health care services administered by the Medicaid Agency, using proceeds from the newly created ETF reserve fund. The governor also proposed capping revenues from the Use Tax, which is earmarked for the ETF, at $180 million and dividing any collected overage between the Education and General Fund budgets on a 50-50 basis. Even with these accounting maneuvers, Davis said Bentley was forced to propose cutting the budgets of about 49 agencies between 20 and 25 percent in the suggested spending plan submitted to the legislature. Lawmakers on both sides of the aisle, however, reacted adversely to the diversion of earmarked education dollars and announced that new versions of the budgets would be drafted from scratch. The alternative General Fund budget offered by House Ways and Means General Fund Chairman Jim Barton, R-Mobile, had serious issues of its own, according to Davis, including a $6.5 million funding increase for the legislature at a time when other agency budgets are being slashed to the bone.

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Negotiations between the governor’s office and the legislature continue regarding what form the General Fund will take, Davis said, and she plans to work with Senate Finance and Taxation General Fund Committee Chairman Arthur Orr, R-Decatur, on a revised government spending plan that differs from the House-passed version. Conversely, she expects the FY2013 ETF budget to be introduced in the Senate next week by Finance and Taxation Education Committee Chairman Trip Pittman, R-Daphne, and in a form very similar to the version that Bentley originally proposed when the session convened. While traveling to various cities to outline the budget issues facing Alabama, Davis said she is often asked why the governor will not propose new taxes as a means of shoring up state finances, and she noted Bentley’s strong opposition to broad-based revenue enhancements as one of the reasons.

Broader role of government must be considered “Gov. Bentley signed a pledge that he would not raise taxes on Alabama families, and he is very committed to that,” Davis said. “The other point of contention is who would see their taxes raised. It’s always easy to propose a cigarette tax or a tax on someone else, when you’re not the one affected by it. Non-smokers don’t mind supporting a cigarette tax, but if a tax is proposed on something everybody uses, the response is simply not the same.” She added that an opinion survey recently conducted by the Public Affairs Research Council of Alabama showed that roughly 57 percent of Alabamians believe that state government has adequate funding to carry out the services it provides, and a majority of respondents also voiced opposition to tax increases of any kind. “I will say that every year we have the same conversations, discuss the same ideas and do the same thing over and over and over again. Seemingly, someone needs to figure out how to resolve this issue for the long term,” Davis said. “If you are in opposition to one unified budget, you need to figure out how we avoid the same problems we continue to experience by having two. We need strong suggestions about how to improve government in the long run.” Davis said an even broader issue to decide is what exact role government should play in the lives of its citizens and which services should be defined as “essential functions of government.”

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“Should we fund non-profits? Should we funnel money to local communities? Should workforce development be the priority of the state?” Davis asked. “What exactly should we be doing? Those are the questions that we have to begin asking if we are going to be honest with ourselves.”

House passes general fund budget 20 percent less than current year Alabama’s General Fund budget for FY2012 was recently reduced by 10.6 percent at the direction of Governor Bentley, and this week, the Alabama House passed a FY2013 General Fund budget that will total $1.39 billion, which is $345 million — or nearly 20 percent — less than the year before. Years of supplementing the General Fund revenues with one-time funds have hidden the true funding shortfall in general government, but the magnitude of those problems is becoming increasingly clear, as state agency consolidations/closures, reduced state services and state employee layoffs edge closer to reality. The more state agencies depend on the General Fund for their funding, the greater the agency will be negatively affected by funding cuts. The negative funding impacts are even more pronounced for agencies that use their General Fund appropriations to match federal funds. The following table compares selected agencies’ FY2013 state General Fund appropriations to FY2012 prorated: 1) 2) 3) 4)

Judicial Branch (Courts) Public Health Human Resources Corrections

($ 28.6 million) ($ 16.2 million) ($ 19.4 million) ($ 38.8 million)

(22.8%) (32.1%) (24.9%) (10.2%)

Film incentives bill goes to governor A conference committee report to HB 243, by Rep. Terri Collins, R-Decatur, has re-passed both the House and Senate and is now awaiting the governor’s signature. The bill expands the incentives that are offered for film productions shot in Alabama, by increasing the cap on the size of film projects that may be recouped by rebates from $10 million to $20 million and by increasing the aggregate annual cap on incentives from $10 million to $20 million in FY2015. According to proponents of the bill, Alabama is

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receiving only a small portion of its potential share of film projects because of the limitations currently in effect.

In Other News

Coal and severance tax extended, proceeds redistributed HB 145, by Rep. Bill Roberts, R-Jasper, passed the House on Thursday.Â A similar bill to extend the collection of coal and severance tax died in last yearâ&#x20AC;&#x2122;s regular session, causing the tax to expire October 1, 2011. The bill provides for the retroactive collection of the tax for the months preceding the passage of the bill and extends the collection of the tax until October 1, 2016. The bill also alters the distribution of the proceeds from the tax to certain entities.

Bill limiting immunity to road builders in line to be signed by the governor The Alabama House gave final approval to SB 139, by Sen. Clay Scofield, R-Guntersville, that limits the liability of a contractor for physical injury, property damage or death for work performed on a highway, road, bridge or street on behalf of the Department of Transportation (DOT), a county governing body or a governing body of any other local government unless certain factors are present. The bill further provides that a contractor must notify DOT if he discovers before or during construction that the plans and specifications could result in a potentially dangerous condition. BCA supports this legislation.

C H A P T E R 11 April 16, 2012

H O U S E A P P R O V E S C H A N G E S TO BCA - B A C K E D IMMIGRATION LAW “Efficiency is doing things right; effectiveness is doing the right things.”

PE T E R D R U C K E R

B 658, by Rep. Micky Hammon, R-Decatur, which makes several much-needed revisions to the state’s immigration law, HB 56, passed the Alabama House after a prolonged filibuster by opponents who advocated for the law’s repeal. The House spent the majority of Thursday on the bill, spending nearly seven hours in debate before invoking cloture to end the debate. The bill received bipartisan support with a vote of 64-34. The BCA was one of 12 business associations that worked vigorously to garner “yes” votes for the legislation, which would provide some relief from burdens placed on the business community by the original HB 56. In a joint statement this week, the business associations urged support for the bill which, while not perfect, “would nevertheless bring some needed clarity and relief to our members.” The bill now moves to the Alabama Senate where the members are heavily divided. In related legislation, a public hearing was held on SB 140, by Sen. Gerald Dial, R-Lineville, that incorporated many of the law enforcement changes suggested by Attorney General Luther Strange. A hearing was held last week on SB 41 by Sen. Billy Beasley, D-Clayton, that advocates for the repeal of HB 56. Another bill, SB 541, by Sen. Scott Beason, R-Gardendale, proposes changes to the immigration law but fails to address many of the concerns of the business community.

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Attendees listen to the Senate Education Committee discuss the Education Options Act

Senate Education Committee approves Sen. Brewbaker’s Education Options Act The Senate Education Committee on Tuesday held the first public hearing for SB 513, by Sen. Dick Brewbaker, R-Pike Road. The bill by Brewbaker, chairman of the Education Committee, is slightly different from the version the House Ways and Means Education Committee passed last week, which is sponsored by Rep. Phil Williams, R-Huntsville. Under Brewbaker’s bill, charter schools could only be started in already existing failing schools, otherwise known as “conversion-only” charter schools. Under Williams’ bill, a charter school would not have to start from an already existing school, meaning a “startup” charter school would be permissible. It became evident during the public hearing that the tide had turned in favor of the flexibility and charter school legislation. The first to testify, and the only opponent who spoke out against the legislation, was AEA Executive Secretary Henry Mabry. Mabry continues to approach the issue from the school-funding angle, contending that public charter schools take money from traditional public schools. Following Mabry’s testimony, speaker after speaker told committee members of the need for more parental choice and more options for students

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in Alabama. Parents and business owners pleaded with the committee to give their children an option when it came to failing schools. Former senator and two-year college chancellor Bradley Byrne passionately spoke on where Alabama could be with true education reform. Montgomery County School Superintendent Barbara Thompson expressed a desire to open a charter school to focus on young men in the school system — those who she says are consistently dropping out and committing crimes in Montgomery. The Alabama School Board Association and the Alabama Superintendents Association reiterated their support for the legislation after having initially opposed the bill. Chairman Brewbaker adjourned the meeting after everyone spoke who wanted to speak. No vote was taken until the committee met again on Wednesday morning. At the Wednesday morning meeting of the Education Policy Committee, Chairman Brewbaker accepted several amendments to the bill that require charter schools to submit detailed reports of student transfers, withdrawals and expulsions, and he allowed committee members to speak out on the bill once again. After some objections by Democratic members of the committee, mostly lead by Sen. Quinton Ross, D-Montgomery, who continued to express his belief that no one could tell him what the “silver bullet” was about charter schools that made them so great, Brewbaker informed committee members that he would incorporate all amendments into a substitute bill in hopes of making the bill more palatable by the time the full Senate took it up. The Education Committee approved the bill on a 5-4-1 vote. Education Committee Members voting in favor of the bill: Sen. Dick Brewbaker, R-Pike Road; Sen. Bill Holtzclaw, R-Madison; Sen. Slade Blackwell, R-Mountain Brook; Sen. Trip Pittman, R-Daphne; Sen. Del Marsh, R-Anniston. Education Committee Members voting against the bill: Sen. Gerald Allen, R-Tuscaloosa; Sen. Quinton Ross, D-Montgomery; Sen. Vivian Figures, D-Mobile; Sen. Hank Sanders, D-Selma. Education Committee members present but not voting: Sen. Shadrack McGill, R-Scottsboro.

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Senate Health Committee chair gives health care exchange update Senate Health Committee Greg Reed, R-Jasper, addressed the BCA Governmental Affairs meeting on Tuesday to discuss the impact of the federal Patient Protection and Affordable Care Act on Alabama and other concerns facing the state. Reed said he was honored by BCA at the end of the last legislative session for sponsoring a law allowing small business owners to deduct 200 percent of the amount they pay for employee health insurance costs while also allowing employees to deduct the same amount for the portion they pay for coverage. He said the Senate Health panel that he leads routinely handles a wide variety of issues ranging from the spaying and neutering of pets to scopeof-practice issues to insurance regulation and other matters, many of which are important to the business community at large. Reed said his committee is currently dealing with the creation of Alabama’s health care exchange, which is mandated by the Affordable Care Act passed through Congress and signed by President Barack Obama. He voiced his hope that the U.S. Supreme Court will soon rule the federal health care program unconstitutional as the result of lawsuits filed against its existence on behalf of several states, including Alabama. “I think there are several issues keeping our economy from growing as fast as it can, and among those is a fear of what the federal government will require from businesses in terms of health care moving forward,” Reed said. “One question is who will pay for the $30 to $50 million in estimated costs to set up Alabama’s exchange? Will it be a surcharge on insurance rates or will those who use the exchange be required to pay for it themselves and leave everyone else alone?” To comply with provisions of the federal health care mandate, Gov. Robert Bentley formed a commission chaired by Reed and House Health Committee Chairman Jim McClendon, R-Springville, and tasked them with making recommendations on how to best set up a state health care exchange. The resulting legislation by Rep. Greg Wren, R-Montgomery, could soon be voted upon in the Alabama House, according to Reed. (See related story below.) The senator said he hopes the bill empanelling Alabama’s exchange would meet only the minimum requirements of the federal law and contain

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a self-destruct stipulation that automatically rules the measure moot if the Supreme Court finds the Affordable Care Act or any of its provisions unconstitutional. “Recognizing that the Affordable Care Act may continue to be the law of the land and that the exchange is a requirement thereof, it would be irresponsible for us to not have the elements in place needed to comply on our terms rather than the federal government’s terms,” Reed said. “We can’t just ignore this issue and hope it goes away only to later find the federal government on top of us putting together its own exchange that we have to then pay for. I want Alabama to control its own destiny rather than the federal government.” Reed said he often must juggle the interests of competing groups while keeping business and insurance and the coverage each must provide balanced. Scope-of-practice issues affecting midwives, nurse practitioners, physical therapists and similar groups are among the debates Reed said he must referee. Finding a solution to funding woes in the state’s perpetually anemic General Fund budget must also be a legislative priority, Reed said. The General Fund budget approved by the House after an hours-long debate has several issues that need to be rectified, he noted, and added that he expects Senate Finance and Taxation General Fund Chairman Arthur Orr, R-Decatur, to lead that effort. “The governor has repeatedly stated that Alabama needs to live within its means, and, recognizing the economic downturn, that means there are going to be cuts many will find difficult,” Reed said. “But, at the same time, taxing our businesses and our citizens at a higher rate than they currently are is not an acceptable option either.” Reed, who represents four of the state’s five largest coal-producing counties in Walker, Jefferson, Tuscaloosa and Winston, held up the coal industry for special recognition because its members agreed to continue paying a coal severance tax despite no law requiring it of them. He said he is pushing legislation to bring clarity to the issue because proceeds from the tax are used on the local level for road-building and repair projects. Responding to a question about constitutionally mandated legislative redistricting, Reed said redrawing district lines is always a controversial issue, but he feels the Reapportionment Committee will be “fair and equitable” to all involved. He added that the issue may be tackled during

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a special legislative session called within the regular session, or, perhaps, a stand-alone session convened after sine die adjournment in late May.

House Committee OK’s bill establishing Alabama Health Insurance Exchange The House Health Committee granted a favorable report to a substitute version of HB 245, by Rep. Greg Wren, R-Montgomery, that would create and set operating guidelines for the Alabama Health Insurance Marketplace as mandated by the Patient Protection and Affordable Care Act of 2010. Commonly referred to as “the exchange,” it would provide a centralized location where individuals may obtain comparative information on available health insurance plans and would facilitate the purchase and sale of those plans. The bill also creates a Small Employer Insurance Marketplace where small employers with 50 or fewer full- and part-time employees could access health insurance coverage for their employees beginning in 2014. In 2016, employers with 100 or fewer employees would be eligible to offer coverage via the small employer exchange. HB 245 further mandates the Alabama exchange be self-sustainable by 2015. Funding to operate the estimated $30-50 million per year exchange would come from fees or assessments to policies sold to individuals and employers who purchase coverage through the exchange. The 2012 BCA Health Legislative Agenda states that BCA will “ensure legislation that creates and sets operating guidelines for an Alabama Healthcare Insurance Exchange will: focus on providing small businesses and individuals an option for purchasing healthcare insurance; base operation on free market principles; encourage competition within the market; provide transparency to consumers; include business representation within the administrative oversight structure; avoid duplication of current regulatory authority; ensure the stability and reliability of the state’s healthcare insurance market.”

Latest version of ‘Job Creation Act’ denies tax incentives for job retention projects Members of the Senate Finance & Taxation-Education Committee approved a substitute version HB 160, the Bentley administration’s key

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job creation incentive proposal that now will not apply to job retention projects. HB 159 and HB 160, by Rep. Barry Mask, R-Wetumpka, are a proposed constitutional amendment and enabling bill that, if passed and ratified by voters, would give wide discretion to the governor to offer tax incentives for companies that locate or expand their operations in Alabama. The two bills in tandem would provide that a percentage of state income tax withholdings from the additional employees may be retained and used by the company to offset the costs of acquiring and equipping the facility. The concept of having tax incentives apply to job retention projects is where opponents have directed their harshest criticisms. Several members of the legislature have publicly questioned whether state officials could properly evaluate or discern the legitimacy of a retention project or whether representatives from the company are working with them in good faith. To ensure that decisions concerning whether companies will be allowed to retain withheld income taxes, Sen. Phil Williams, R-Rainbow City, explained that for purposes of approving income tax withholding incentives, the State Industrial Development Authority, consisting of the commissioner of revenue, the director of finance and the secretary of the Department of Commerce, will be expanded to include the Senate President Pro Tempore and the Speaker of the House. HB 160 now goes before the full Senate, where several Senate Democrats have pledged to oppose it because they believe the incentives will reduce funding for public schools. The BCA supports this legislation.

FY2013 Education Budget will total $151 million less than FY2012 As education budget writers experience the initial impact of the “Rolling Reserve” act, the Senate committee version of the budget will total $5.5 billion, or $38 million more than the amount recommended by Gov. Robert Bentley, but it is some $151 million less than the current year’s total. A recalculation of the budget cap accounts for the $38 million increase above the governor’s total. The committee elected not to include $185 million in funding for Children’s Health Insurance as recommended by the governor and historically funded from the State General Fund. The committee version

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also provides an increase of $242.8 million more than the governor’s recommendation to K-12 classrooms, but it is still $46 million less than the amount budgeted for FY2012. State education officials anticipate that 600 to 800 fewer teaching positions will be funded next school year, but expect attrition to account for the reductions, not forced layoffs. The following table shows selected public education appropriations in millions. K-12 Reading Initiative Career/Tech O&M AMSTI (Math/Science) Distance Learning Advanced Placement Virtual Library Career Tech Initiative Off. School Readiness

TWO-YEAR SYSTEM Adult Education Indus. Dev. Training W’force Dev. Projects ALTech Network TOTAL UNIVS

Budgeted Gov Rec

F&T-E Sub 2012

2013

$58.1 ----$26 $18.5 $1.3 $3.0 $2.4 $19.1

$58.1 $4.0 $28 $18.5 $2.3 $2.8 $2.2 $17.8

$58.1 $5.0 $28 $18.5 $2.3 $2.8 $2.2 $17.8

$15.7 $5.5 $25 $4.7

$12.6 $5.5 $25 $4.6

$12.4 $5.5 $27.9 $4.6

$1042.5

$1001.4

$992.9

State agencies expresses concerns over proposed change to administrative rules The House State Government Committee held a public hearing to a standing room-only crowd that expressed serious concerns over SB 190, by Sen. Jimmy Holley, R-Elba. The bill would, among other things, add an extra layer of approval by the governor for rules promulgated by state agencies pursuant to the Alabama Administrative Procedures Act. Under existing law, the AAPA governs the process by which state agencies adopt rules. The process includes a requirement that before any rule other than an emergency rule can become effective, it must be certified to the Legislative Reference Service. The process also allows an administrative agency to withdraw a certified rule with the approval of the

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Joint Committee on Administrative Regulation Review. However, under the proposed amended statute, this authority would rest solely with the chair of the Joint Committee on Administrative Regulation Review. Personnel from many state agencies, including the governor’s legislative director, expressed the importance of keeping the current process as is. Some of the concerns raised include an increase in the workload of the governor’s staff and the potential impediment to needed rule changes. More importantly, the governor and the legislature are working to streamline and make government more effective, and the bill appears opposite of that intent. The agencies’ concerns also have been raised by BCA members. The committee is set to vote on the bill next week.

Senate Committee approves bill allowing ‘open carry’ of weapons The Senate Judiciary Committee gave a favorable report to SB 337 by Sen. Scott Beason, R-Gardendale, by a vote of 5-1. The bill would authorize a person to carry a pistol in his or her vehicle without a concealed pistol permit and to carry a concealed pistol on another’s property. Sen. Tom Whatley, R-Auburn, was the lone senator voting with business and against the bill. Proponents contend that persons should be allowed to carry weapons anywhere, including their vehicles, and that law-abiding citizens must be able to defend themselves against any potential threats. Law enforcement opponents argue that while they support a person’s right to carry a weapon, it is a safety issue, and if permits are no longer required, officers would have no way to determine whether a person is a convicted felon or if they present another form of danger. BCA’s 2012 Legislative Agenda states BCA “will oppose any legislation that allows persons to openly carry loaded or unloaded handguns in public or in the workplace,” and “infringing on employers’ right to provide a safe workplace for employees by restricting firearm possession on company property when appropriate and/or creating any new causes of action against employers because of such policies.”

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In Other News

Bill to curb manufacture of methamphetamine heads to governor

HB 363, by Rep. Blaine Galliher, R-Gadsden, which seeks to clamp down on the manufacture of methamphetamine in Alabama while still allowing persons to purchase over-the-counter products containing ephedrine and pseudoephedrine (PSE) such as common cold and allergy medications, is on its way to the governor. The bill received final passage from the Senate by a vote of 27-4. The bill was a collaborative effort by legislators, business groups, law enforcement and the District Attorneys Association to make changes to the existing law that would not penalize consumers who purchased these products for lawful reasons and would also provide mechanisms beneficial to law enforcement to track those who purchase products containing PSE to manufacture meth. The BCA staff would like to thank Rep. Galliher and Sen. Bill Holtzclaw, R-Madison, for working with the business community to address this issue. BCA supports this bill.

House Committee passes toxic waste bill

After numerous questions by committee members, HB 447 by Rep. Ron Johnson, R-Sylacauga, received a favorable report by the House Commerce and Small Business Committee. The bill authorizes the Alabama Department of Environmental Management to require certain centralized waste treatment facilities to post a performance bond or other form of financial assurance in an amount sufficient to close the facility if it becomes necessary. The bill also authorizes permit holders for nonhazardous industrial waste treatment plants to impose a user fee equal to 5 percent of the costs of the facility to treat industrial waste. The fee is to be remitted to ADEM. The bill also creates the Centralized Waste Treatment Facility Rehabilitation Fund managed by ADEM for the collection of the user fees established under the bill. When the fund reaches a threshold amount of $10 million, ADEM may suspend the posting of bonds or other financial assurance requirements. If the fund falls below the threshold amount at the end of any fiscal year, financial assurance requirements of the permit

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holders may resume until ADEM determines the threshold amount is restored to the fund. The bill further provides that funds authorized in the bill are for the exclusive use of closing a facility if the owner or operator ceases proper operation or abandons or fails to properly maintain a facility to ensure compliance with environmental regulations.

Joint Committee discusses water management plan The Permanent Joint Legislative Committee on Water Policy and Management, led by Sen. Arthur Orr, R-Decatur, and Rep. Alan Boothe, R-Troy, met on Wednesday to discuss a comprehensive water management plan for the state. The committee is tasked with “developing the Alabama Water Management Plan to recommend... courses of action to address the state’s long-term and short-term water resources challenges.” A key piece of this plan, HB 674, the Alabama Water Sustainability and Security Act, sponsored by Rep. Chad Fincher, R-Semmes, was introduced in the House last week. This bill would direct the Alabama Office of Water Resources to work with other relevant state agencies and interest groups to develop the long-needed water-management plan. Mitchell Reid, program director for the Alabama River Alliance, and J. Brian Atkins, P.E., division chief for the Office of Water Resources, were on hand to discuss with the committee members the need for statewide policies and procedures as well as to answer questions. Upon adjournment of the meeting, the committee indicated its next meeting would be late this summer.

Alabama’s unemployment rate falls again, March’s rate is 7.3 percent Gov. Robert Bentley on Friday announced that Alabama’s March preliminary unemployment rate dropped to 7.3 percent, down from February’s revised rate of 7.5 percent. The last time Alabama’s unemployment rate was at 7.3 percent was December 2008. March’s rate represents 157,378 unemployed persons, down from 161,795 last month, and significantly down from last year’s count of 203,799. Alabama’s online jobs database, www.joblink.alabama.gov registered more job postings in March than at any time since 2008 (with the

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exception of spikes due to temporary jobs following the Gulf Oil Spill and the 2011 April tornadoes). In March, 12,788 jobs were posted. “Additionally, we continue to see our initial weekly claims for unemployment compensation drop to pre-recession levels,” Tom Surtees, director of the Alabama Department of Industrial Relations said. “This means fewer people are losing their jobs. Of those that are receiving benefits, the average duration is getting shorter — Most are receiving benefits for about 17 weeks, meaning that people are going back to work faster.” Wage and salary employment increased 12,200 over the month, with increases in the trade, transportation and utilities industry; the leisure and hospitality industry; the manufacturing industry; and the professional and business services industry, among others. The counties with the lowest unemployment rates were: Shelby County at 5.1 percent, Coffee County at 6 percent and Lee County at 6.2 percent. The counties with the highest unemployment rates were Wilcox County at 16 percent, Lowndes County at 15.3 percent and Dallas County at 13.4 percent.

Washington Br iefing

Aderholt addresses BCA Federal Affairs Committee U.S. Rep. Robert Aderholt was the special guest of the Business Council of Alabama’s Federal Affairs Committee last week. Currently in his eighth term representing Alabama’s Fourth Congressional District, Congressman Aderholt is a member of the House Appropriations Committee. With the annual budget and appropriations process now under way, he discussed his role as chairman of the Subcommittee on Homeland Security, which has an annual budget of $40 billion, as well as his efforts to bring fiscal discipline and oversight to securing the nation. The congressman also talked with BCA members about his own efforts to rein in the Environmental Protection Agency and their harmful regulations. He shared the story of Cullman-based RollSeal, Inc., which has developed energy-efficient commercial freezer doors. However, because their doors are not manufactured with foam and the current ratings only apply to foam-made doors, this company cannot manufacture their innovative product.

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Instead of stifling innovation, the Congress should be focused on boosting our nation’s competitiveness and encouraging entrepreneurship, he said. “Jobs are not a Republican or Democrat issue; they are a red, white and blue issue.” Congressman Aderholt is a strong voice for Alabama’s business community, and we appreciate the time he spent with us.

Brooks receives Spirit of Enterprise Award

U.S. Rep. Mo Brooks was the featured speaker at the Huntsville/ Madison County Chamber of Commerce’s Washington Update luncheon earlier this month. He discussed our nation’s growing debt and its threat to our future. The Business Council of Alabama was on hand as our partner, the U.S. Chamber of Commerce, used the opportunity to present Congressman Brooks with the coveted “Spirit of Enterprise” award for his pro-business voting record in 2011. During the second session of the 111th Congress, the Chamber keyvoted 11 Senate and 9 House votes, including passage of a tax cut extension, health care reform, financial services legislation, campaign finance reform and legislation to improve science and math education. U.S. Sens. Richard Shelby and Jeff Sessions and U.S. Reps. Jo Bonner, Mike Rogers, Robert Aderholt and Spencer Bachus all earned the “Spirit of Enterprise” award for the second session of the 111th Congress.

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Sessions Addresses Montgomery Leaders U.S. Sen. Jeff Sessions, ranking Republican on the Senate Budget Committee, addressed business leaders and officials at the Montgomery Area Chamber of Commerce’s Eggs and Issues breakfast.

BCA joins U.S. Chamber-led coalition to prevent investment income tax hike The Business Council of Alabama joined more than 87 trade associations and chambers of commerce in signing a letter, spearheaded by the U.S. Chamber of Commerce, sent to every member of Congress calling for their support of S. 1647 and H.R. 3091, “The Tax Hike Prevention and Business Certainty Act,” introduced by Sen. Michael Crapo (R-ID) and Rep. Peter Roskam (R-IL), respectively. These bills would maintain the top capital gains and dividends tax rates at 15 percent and prevent a massive tax increase that would have detrimental impacts on investment and jobs in the United States. Unless Congress acts by the end of 2012, the tax rate for capital gains will increase from 15 percent to 20 percent and the dividend tax rate will more than double from 15 percent to 39.6 percent. In addition, beginning in 2013,

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investment income will be subject to an additional Medicare Hospital Insurance tax of 3.8 percent, raising the top rate on capital gains to 23.8 percent and on dividend income to 43.4 percent, resulting in one of the largest tax increases in U.S. history.

House passes tax cut for small businesses The House on Thursday voted 235-173 to pass the Small Business Tax Cut Act, H.R. 9, sponsored by House Majority Leader Eric Cantor (RVA), which would provide new tax cuts for businesses that employ fewer than 500. H.R. 9 would provide businesses with fewer than 500 employees, which is the definition of a small business used by the Small Business Administration, with tax deductions of up to 20 percent of their business income. The Democrat-controlled Senate has no plan to consider this Republican measure, and President Barack Obama has said that he would veto it if is passed.

‘Buffett Rule’ blocked in Senate On a largely partisan vote, the Senate on Monday rejected consideration of the so-called “Buffett Rule,” a key component in the philosophical debate over taxes in this election year. The procedural vote was 51-45, falling short of the 60 votes needed to break a filibuster. The Buffett Rule, named after hedge fund manager Warren Buffett, who famously disclosed that he was paying a lower tax rate than his secretary, was designed to ensure that those earning more than $1 million per year pay the same tax rate as those earning less. The Paying a Fair Share Act of 2012, S. 2230, sponsored by Sen. Sheldon Whitehouse (D-RI), would impose a minimum 30 percent income tax on people making more than $2 million yearly and phase in higher taxes for those earning at least $1 million. According to the nonpartisan Tax Policy Center, a Washington-based group that studies taxes, those who earn $1 million or more annually paid an average effective rate of 25 percent last year in federal income and payroll taxes. Those earning $50,000 to $75,000 paid an average effective rate of 12 percent, the group said.

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Rep. Micky Hammon explains bill amendments as BCA President and CEO William Canary, Senior Vice President and Legal Advisor Anita L. Archie and Legislative Advocacy and Intergovernmental Affairs Director Claire Haynes listen

C H A P T E R 12 April 23, 2012

S E N A T E A P P R O V E S C H A N G E S TO B CA - B A C K E D IMMIG RATION LAW CHANGES “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

W INSTON C HURCHILL

he Senate Judiciary Committee approved the latest version of HB 658 by Rep. Mickey Hammon, R-Decatur, which seeks to revise HB 56, the state’s immigration law that was passed last year. The bill will likely go to the Senate floor next week for a vote. The committee approved the legislation by a 7-3 vote, following testimony from opponents and debate among committee members. The panel approved amendments that would modify the “reasonable suspicion” provision in the bill, added language that would prohibit school officials from collecting from schoolchildren information on the status of their parents, and provide that the bill would go into effect 60 days after being signed. Other changes would remove language to ban undocumented aliens from attending public colleges and a section that prohibited state and local agencies from doing business with undocumented aliens would limit that ban to business licenses and motor vehicle transactions. Published and broadcast reports quoted Senate President Pro Tem Del Marsh, R-Anniston, as saying he expects a vote on Tuesday. Voting YES on the bill were Sen. Phil Williams, R-Rainbow City; Sen. Bryan Taylor, R-Prattville; Sen. Arthur Orr, R-Decatur; Sen. Tom Whatley, R-Auburn; Sen. Cam Ward, R-Alabaster; Sen. Jerry Fielding, D-Sylacauga; and Sen. Del Marsh, R-Anniston. Voting NO on the bill were Sen. Marc Keahey, D-Grove Hill; Sen. Rodger Smitherman, D-Birmingham; and Sen. Linda Coleman, D-Birmingham. 149

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Redrawn lines for districts to be subject of likely special session State Rep. Jim McClendon, R-Springville, House chairman of the Permanent Legislative Committee on Reapportionment, addressed the BCA Governmental Affairs Committee on Tuesday and outlined plans to approve redrawn House and Senate district lines before the end of the 2012 regular legislative session. McClendon said his committee, which is chaired in the Senate by Sen. Gerald Dial, R-Lineville, is tasked with drawing districts that accurately reflect the population of Alabama as captured by the most recent census data, which he termed “a snapshot in time.” In this case, the panel will use the results of the 2010 census. “There is no need for deception in the process, no need to push plans that are borderline fair, and no need to target any individuals or any regions,” McClendon said. “All that needs to be done is to create fair districts.”

BCA Senior VP Anita L. Archie listens as Rep. McClendon addresses committee

He noted that redistricting is not a “haphazard” process in Alabama, especially given the extreme spotlight on the state as a result of its past history. In addition to the Voting Rights Act of 1965, McClendon said his committee must take into account various court cases, the “one man, one vote” concept and the examination of the newly drawn maps by the U.S. Justice Department Civil Rights Division, a process known commonly as “Section 5 review.”

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Calling it the “most politically charged process the legislature encounters,” McClendon said the recurring, decade-long results of redistricting can often lead to bitterness and ill will among legislators. “I still hear tales from the redistricting process conducted 10 years ago, and it is still the lingering hard feelings that survive the times,” McClendon said. “Redistricting animosity can, and does, spill over into subsequent legislative sessions.” In order to prevent the redistricting battle from disrupting the current legislative session, McClendon said the issue will be tackled during an extraordinary session expected to be held May 14-18. The five-day special session is also scheduled to take place between the 29th and 30th legislative days of the on-going regular session, just prior to its sine die adjournment. “Sen. Dial and I have been working with members for many months, both majority and minority members,” McClendon said. “It is my hope that the special session garners no headlines, and my expectation is that for the first time in a century, the composition of the legislature will be an accurate reflection of Alabama.” The three-term lawmaker said the Reapportionment Committee is composed of 11 House members and 11 Senate members with seven from each body representing each of Alabama’s seven congressional districts and another four from both houses serving at-large. The committee operates under a set of self-imposed guidelines, which, for example, includes making efforts to prevent two incumbents from opposing each other and, when possible, attempting to make new districts somewhat resemble their old versions. Splitting cities and counties among several legislative districts is also undesirable by committee members, McClendon said, but population clusters and disbursement often make it unavoidable. Target numbers require roughly 45,000 citizens to reside in each of Alabama’s 105 House districts and about 135,000 to reside within each of the 35 State Senate districts. McClendon said his committee engaged in a transparent redistricting process that “set new standards for openness.” Noting that the Democratic majority tasked staff members with holding 18 public hearings across the state when it last handled redistricting a decade ago, McClendon said his panel invited public input during visits to 21 cities, and both committee chairmen participated in each session. A

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court reporter recorded testimony at the meetings, and transcripts of the discussions are available for public review online. Though new maps for congressional and State Board of Education districts were successfully redrawn, approved by the legislature and scrutinized by the Justice Department last year with no lawsuits apparently forthcoming, McClendon said he is prepared for the reapportioned House and Senate lines to be challenged in court, no matter how fairly they are drawn.

House passes ‘agreed-upon’ bill to fix gross income problem The Alabama House debated for three hours Tuesday before passing HB 286, by Rep. Jay Love, R-Montgomery, on a vote of 54-32, sending the bill to the Senate. This bill would fix, once and for all, the Department of Revenue’s problems with the “Gross Income” issue. During the floor debate, several members asked legitimate questions in hopes of gaining an understanding of the complex issue, but the bulk of the time was consumed by rhetoric and appeals by opponents to defeat the legislation. For years, the department has been caught in the middle of a conflict between the state income tax statutes and the department’s own regulation. Readers will remember that the statute directed Alabama resident owners/ partners of “pass-through” entities that do business inside and outside of Alabama to report their shares of the entity’s income from all sources. A departmental regulation, however, instructed taxpayers to report their shares of the entity’s income earned in Alabama. A taxpayer who followed the regulation and applied his/her full federal income tax deduction (representing the entity’s worldwide operations) could then reduce or eliminate all of his/her state income tax liability. In the last regular session, the BCA, the Business Association Tax Coalition (BATC) and the Bentley administration negotiated compromise legislation that passed the House overwhelmingly, but died, along with other bills, on the last night of the session when a filibuster blocked it from coming before the Senate. Following the session, all parties that had agreed to the compromise bill agreed 1) to allow the department’s latest version of the regulation concerning “gross income” to take effect and 2) that all would work to enact the bill when the legislature reconvened this year. The compromise bill would require the taxpayer to recognize his/her share of income from all sources worldwide, and the taxpayer would receive

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credits for 100 percent of entity-level, income-like taxes paid to other states and receive a 50-percent credit for income taxes paid to foreign countries to avoid double taxation. Opponents advocate defeating the bill and prefer to have taxpayers rely on the departmental regulation rather than lawfully enacted legislation. Their reason for preferring the regulation is to deny the 50-percent foreign tax credit and thereby collect more tax revenue. For years, the BCA has worked in good faith with the key parties to resolve this issue. Those efforts last year led to a mutually equitable solution outlined in HB 286, and the BCA remains committed to fulfilling its promises to enact the compromise legislation. The BCA supports this legislation.

Senate panel OKs companion bill for independent tax appeals commission The Senate Judiciary Committee voted to favorably report SB 549, by Sen. Ben Brooks, R-Mobile, with very little discussion. This Senate version of the bill is a companion to HB 105, by Rep. Paul DeMarco, R-Homewood. HB 105 has not been placed on the agenda of the Senate Job Creation & Economic Development Committee, where it was assigned on April 10. Similar versions of the bill have been introduced in several previous legislative sessions, and the concept of an independent tax appeals tribunal is the model used by more than half of the states, with Georgia being the latest to adopt it. Other sections of the bill that pertain to the Alabama Taxpayers Bill of Rights update and conform state law to the procedures and provisions used by the federal government to equitably deal with taxpayers. Under the auspices of the Business Associations Tax Coalition (BATC), the BCA is among some 27 business and trade associations that have endorsed this bill. SB 549 now moves on to be considered by the full Senate. BCA supports this legislation.

House passes bill to extend capital credits The Alabama House passed HB 140, by Rep. Mickey Hammon, R-Decatur, which provides that businesses that qualify for the state’s income tax capital credits may carry forward the credits from one year

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up to four additional years, depending on the amount of the capital investment, but not to exceed the original total of 20 years. An Alabama Department of Revenue report on the actual use of capital credits shows that significant portions of the credits are not taken because the companies are not profitable in their early years of operation. BCA supports this legislation, which now moves to the Alabama Senate.

Senate committee approves unitary combined reporting bill The Senate Finance & Taxation-Education Committee, on a vote of 8-3, gave a favorable report to SB 333, by Sen. Marc Keahey, D-Grove Hill. In addition to mandating combined reporting, which is estimated to raise $30 million annually, the bill reduces the domestic production activities deduction, to raise an estimated $20 million annually, and it further reduces the deduction for bonus depreciation by 50 percent, to raise an estimated $13 million annually. The BCA continues to oppose any legislation mandating unitary combined reporting.

‘Single point of filing’ bill awaits governor’s signature Businesses that now pay state-local sales/use and rental/lease taxes to multiple jurisdictions will soon have a central site to electronically file and pay their tax obligations. Alabama’s patchwork of local sales/ use tax rates along with various forms of local tax administration (state, self-administered local and third party) have all combined to make tax compliance a costly ordeal for businesses. The House and Senate agreed to the conference committee report on SB 459, by Sen. Slade Blackwell, R-Mountain Brook, which creates the “One-Spot” system under the Alabama Department of Revenue for filing and paying sales/use and rental/lease taxes to all Alabama governmental bodies. The bill sets up an eight-member Advisory Commission, composed of three members from county government, three members from municipal government, a representative from the BCA and a representative from the Alabama Retail Association, to advise the Commissioner of Revenue on the development and operation of the system. The bill further requires local governments to provide tax rate information and to provide updates to that information as changes occur.

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The BCA supports this legislation.

House approves changes to Unemployment Compensation Law The House has passed HB 285, by Rep. Jack Williams, R-Birmingham, that would establish a one-week waiting period during the first compensable week of benefits for individuals seeking unemployment compensation benefits. The bill now heads to the Senate. If enacted, the bill would amend current law that applies a one-week waiting period after the 13th compensable week of paid unemployment benefits. The new waiting period would save the Unemployment Compensation Trust Fund $14.5 million in the first year of implementation, according to the Alabama Department of Industrial Relations.

Unemployment Compensation Fraud changes get Senate approvalÂ Changes to the stateâ&#x20AC;&#x2122;s unemployment compensation fraud law are one step closer to becoming law. Under current law, a person who fraudulently misrepresents that he is unemployed for the purpose of receiving unemployment compensation benefits cannot be disqualified from receiving benefits. HB 72, by Rep. Paul DeMarco, R-Homewood, changes that. The Senate-amended version would institute a 104-week disqualification of benefits if a person is found to be fraudulently claiming he is unemployed simply to receive unemployment compensation benefits and until the amount fraudulently awarded is repaid in cash. Any federal or state funds due to the person could be intercepted by the Department of Industrial Relations (DIR) to repay the debt. HB 72 unanimously passed the full Senate, but it must go back to the House to concur with the changes made. If the House approves the changes, the bill will then go to the governor. BCA supports this bill.

Limited direct access for physical therapists goes to the governor Â On a unanimous vote, the Senate granted final passage to a substitute version of HB 163, by Rep. Ed Henry, R-Hartselle, that would allow

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physical therapists in specific situations to evaluate and treat patients without a referral from a health care provider. The bill further allows physician assistants, nurse practitioners and chiropractors to refer patients to physical therapists. HB 163 allows a physical therapist to perform an initial evaluation to determine the need for physical therapy and perform therapy without a referral in five limited areas: % To a child with a diagnosed developmental disability pursuant to the

plan of care for the child.

% To a home health care patient pursuant to the plan of care for the

patient.

% To a nursing home patient pursuant to the plan of care for the patient. % Related to conditioning or to providing education or activities in a

wellness setting for the purpose of injury prevention, reduction of stress or promotion of fitness.

% To an individual who has received physical therapy for a previously

diagnosed condition within 90 days of the diagnosis. The physical therapy would be limited to 15 days before the patient must return to the health care provider.

HB 163 now awaits the governor’s signature.

House passes bill establishing an Alabama Health Insurance Exchange By a vote of 92-0, the House of Representatives granted a favorable report to a substitute version of HB 245, by Rep. Greg Wren, R-Montgomery, that would create and set operating guidelines for the Alabama Health Insurance Marketplace as mandated by the Patient Protection and Affordable Care Act of 2010. The bill now goes to the Senate. Commonly referred to as “the exchange,” it would provide a centralized location where individuals may obtain comparative information on available health insurance plans and would facilitate the purchase and sale of those plans. The bill also creates a Small Employer Insurance Marketplace where small employers with 50 or fewer full- and part-time employees could access health insurance coverage for their employees beginning in 2014. In 2016, employers with 100 or fewer employees would be eligible to offer coverage to their employees via the small employer exchange.

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HB 245 further mandates the Alabama exchange be self-sustainable by 2015. Funding to operate the estimated $30 million to $50 million per year exchange would come from fees or assessments to policies sold to individuals and from employers who purchase coverage through the exchange. HB 245 also includes language that if the PPACA is upheld, lawmakers must enact legislation by December of this year to establish a framework for an Alabama-led and managed health insurance exchange. If the legislature fails to act, the exchange will be managed by the federal government. The U.S. Supreme Court is expected to rule in early summer on the constitutionality of the act. The 2012 BCA Legislative Agenda states that BCA will: “ensure legislation that creates and sets operating guidelines for an Alabama Healthcare Insurance Exchange will: focus on providing small businesses and individuals an option for purchasing health care insurance; base operation on free market principles; encourage competition within the market; provide transparency to consumers; include business representation within the administrative oversight structure; avoid duplication of current regulatory authority; ensure the stability and reliability of the state’s healthcare insurance market.”

In Other News

Bill would require oversight and fees for PACs and candidates SB 551, by Sen. Bryan Taylor, R-Prattville, received a favorable report from the Senate Constitution, Campaign Finance, Ethics and Elections Committee on Thursday. The bill would require the Alabama Ethics Commission to create a division to monitor registered candidates and political action committees (PACs) in accordance with the Fair Campaign Practices Act. Annual registration fees would be established and required by the Ethics Commission, and the following penalties would be instituted for failing to timely file reports: $500 for the first offense; $1,000 for the second offense; and the third offense will be referred to the attorney general for further action. The fees and fines collected would go to the Ethics Commission to cover the operational cost of the new division. The bill would also require that each PAC and campaign committee designate a registered agent to be legally responsible for the actions of the

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committee. Candidates and the registered agents would be responsible for any fines and criminal actions; however, campaign funds would be allowed to pay fines. SB 551 now goes to the full Senate for consideration.

House OKs bill creating Small Business Financing Authority The House on Thursday approved HB 600, by Rep. Barry Moore, R-Enterprise, that would set up an independent entity to help companies with a variety of credit needs. The Alabama Small Business Financing Act, operating under the Alabama Department of Economic and Community Affairs (ADECA), would allow the state to strengthen and streamline ADECA’s existing business loan and grant programs. Establishing a small business financing authority was a key recommendation of the Speaker’s Commission on Job Creation. “Job creation has been and continues to be our top priority this session,” said Speaker Mike Hubbard. “One of the top inhibitors to small business growth is access to capital. Assisting viable companies in attaining loans is a real-world way to promote job growth.” In August, Alabama was awarded a $31.3 million grant through the U.S. Treasury’s State Small Business Credit Initiative to promote small business lending through three programs: the Alabama Capital Access Program, the Alabama Loan Guaranty Program and the Alabama Loan Participation Program, all administered within ADECA. The Alabama Small Business Financing Act would codify the current SSBCI programs into law under the Alabama Small Business Financing Authority.

Washington Br iefing

Sen. Shelby named to transportation conference committee The House and Senate this week appointed 47 conferees, including U.S. Sen. Richard Shelby, to the conference committee that will craft the final version of the surface transportation authorization. Of the 47 conferees, there are 14 senators and 62 members of the House. The Senate-passed transportation bill includes the RESTORE Act, which would dedicate 80 percent of the Clean Water Act penalties issued in the wake of the BP Deepwater Horizon oil spill to be split among the five Gulf Coast states, including Alabama.

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Another key provision of importance would prevent the Environmental Protection Agency from regulating coal ash as a hazardous material. In addition to Shelby, other senators on the committee include Barbara Boxer (D-CA); Max Baucus (D-MT); Jay Rockefeller (D-WV); Dick Durbin (D-IL); Tim Johnson (D-SD); Chuck Schumer (D-NY); Bill Nelson (D-FL); Bob Menendez (D-NJ); James Inhofe (R-OK); David Vitter (R-LA); Orrin Hatch (R-UT); Kay Bailey Hutchison (R-TX); and John Hoeven, (R-ND). House members on the committee include John L. Mica (R-FL); Don Young (R-AK); John Duncan (R-TN); Bill Shuster (R-PA); Shelley Moore Capito (R-WV); Rick Crawford (R-AR); Jaime Herrara Beutler (R-WA); Larry Buchson (R-IN); Richard Hanna (R-NY); Steve Southerland (RFL); James Lankford (R-OK); Reid Ribble (R-WI); Dave Camp (R-MI); Pat Tiberi (R-OH); Doc Hastings (R-WA); Rob Bishop (R-UT); Ralph Hall (R-TX); Chip Cravaack (R-MN); Fred Upton (R-MI); and Ed Whitfield (R-KY).

BCA joins multi-industry coalition urging House to keep politics out of federal contracting The Business Council of Alabama joined a multi-industry coalition of 154 associations and chambers of commerce, led by the U.S. Chamber of Commerce, in writing a letter in support of H.R. 2008, the Keeping Politics Out of Federal Contracting Act of 2011. The bill was introduced April 26 at a hearing of the House Committee on Oversight and Government Reform. As stated in the letter, “H.R. 2008 is offered in response to a draft Executive Order under consideration by the Obama Administration and, if enacted, would preclude the White House from forcing federal agencies to require entities to disclose their political spending — as well as that of their officers and directors — as a condition of participating in the federal procurement process. “The legislation would help ensure that political spending — or the lack thereof — continues to play no role in federal contracting decisions. The legislation reaffirms the principle, currently embodied in federal procurement laws, that the Executive Branch has an obligation to procure goods and services based on the best value for the American taxpayer,

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and not on political considerations. It also reaffirms the principle that the Administration cannot enact through executive fiat legislation that Congress has considered and explicitly rejected.”

C H A P T E R 13 April 30, 2012

S T A T U S Q U O S E N A T O R S PA S S B I L L M A K I N G CHARTER SCHOOLS ALL BUT IMPOSSIBLE “Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both sides.”

MARGARET T HATCHER

he Senate on Wednesday night passed the Education Options Act of 2012 that would authorize charter schools in Alabama and give teachers and local schools systems more flexibility when it comes to Montgomery bureaucratic red tape. SB 513, by Sen. Dick Brewbaker, R-Pike Road, passed just before 8 p.m. by a vote of 23-12. Facing stiff opposition from the Alabama Education Association and Democratic senators, the message at the State House all week was that opponents would filibuster the bill in an attempt to kill it. When it became clear the votes were there to pass the bill, AEA and Sen. Quinton Ross, D-Montgomery, worked out several compromises that would prevent a filibuster and allow the bill to pass. Under the compromises, charter schools would be limited to only class-3 municipalities, which are the four most populous cities in the state: Huntsville, Birmingham, Montgomery and Mobile. Another significant change to the legislation was a provision that Sen. Ross introduced, and the Senate agreed to, that would require unanimous consent of the local legislative delegation before a charter school could open in one of the four cities. Much of the debate has also centered on the idea that only non-profits could operate a charter school. Sen. Brewbaker added language to the bill that would prohibit non-profits with poor performance records from running a charter school. Previous changes to the bill limited the number of charter schools to no more than 20. That provision was kept in place during floor debate Wednesday night. 161

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BCA President and CEO William Canary remains particularly pleased with the flexibility provisions in the bill. “It’s a great step toward beginning to break the cycle of status quo in education,” he said. “It is historic in that less than 20 months ago, this body was unable to even entertain a discussion or debate on charter schools in Alabama.” The bill now goes to the House of Representatives where members are expected to make changes to the Senate version before passage. Senators voting for SB 513: Sen. Gerald Allen, R-Tuscaloosa; Sen. Scott Beason, R-Gardendale; Sen. Slade Blackwell, R-Mountain Brook; Sen. Dick Brewbaker, R-Pike Road; Sen. Ben Brooks, R-Mobile; Sen. Linda Coleman, D-Birmingham; Sen. Gerald Dial, R-Lineville; Sen. Jerry Fielding, D-Sylacauga; Sen. Rusty Glover, R-Semmes; Sen. Jimmy Holley, R-Elba; Sen. Bill Holtzclaw, R-Madison; Sen. Del Marsh, R-Anniston; Sen. Arthur Orr, R-Decatur; Sen. Trip Pittman, R-Daphne; Sen. Greg Reed, R-Jasper; Sen. Paul Sanford, R-Huntsville; Sen. Clay Scofield, R-Guntersville; Sen. Harri Anne Smith, I-Slocomb; Sen. Bryan Taylor, R-Prattville; Sen. Jabo Waggoner, R-Vestavia Hills; Sen. Cam Ward, R-Alabaster; Sen. Tom Whatley, R-Auburn; Sen. Phil Williams, R-Rainbow City. Senators voting against SB 513: Sen. Shad McGill, R-Scottsboro; Sen. Paul Bussman, R-Cullman; Sen. Billy Beasley, D-Clayton; Sen. Roger Bedford, D-Rogersville; Sen. Priscilla Dunn, D-Bessemer; Sen. Vivian Figures, D-Mobile; Sen. Tammy Irons, D-Florence; Sen. Marc Keahey, D-Grove Hill; Sen. Quinton Ross, D-Montgomery; Sen. Hank Sanders, D-Selma; Sen. Bobby Singleton, D-Greensboro; Sen. Rodger Smitherman, D-Birmingham.

‘Agreed-upon’ bill to fix gross income problem continues to advance The Senate Commerce Transportation and Utilities Committee approved HB 286, by Rep. Jay Love, R-Montgomery, putting the bill in position to pass the Senate during the remaining four days of the current session. The bill is compromise legislation that resolves a longstanding conflict between a tax statute and a Department of Revenue regulation governing the tax treatment of income earned by resident owners/partners/ members of Sub-S corporations, partnerships and LLCs that do business in multiple states.

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Voting for the bill were Sen. Gerald Allen, R-Tuscaloosa; Sen. Greg Reed, R-Jasper; and Sen. Del Marsh, R-Anniston. Sen. Shadrack McGill, R-Scottsboro abstained.Â Readers will remember that the bill would put into statute a Department of Revenue regulation directing Alabama resident owners and partners of such pass-through entities to 1) report their respective shares of the entityâ&#x20AC;&#x2122;s income earned worldwide, 2) provide an income tax credit for their shares of entity-level income-like taxes paid to other states, and 3) add a provision that provides a 50-percent credit for taxes paid to foreign countries. The BCA, through its affiliation with the Business Associations Tax Coalition, continues to work for passage of this legislation that is long overdue.

Senate passes companion bill for independent tax commission The Senate passed SB 549, by Sen. Ben Brooks, R-Mobile, which is the companion bill to, but differs from, HB 105, by Rep. Paul DeMarco, R-Homewood. HB 105 passed the House April 5, but was not in position Thursday to pass the Senate. With four working days remaining in the current legislative session, one of the bills must pass both the House and Senate,Â and differences between the House and Senate versions must be resolved. On Wednesday, the Senate Job Creation & Economic Development Committee gave a favorable report to a substitute version of HB 105 by chairman Sen. Paul Sanford, R-Huntsville. Its contents are the same as those in SB 549 that passed the Senate. Some of the primary changes made by the Sanford substitute are: % The governor will nominate, subject to Senate approval, successor

judges to the Commission, rather than the governor selecting from names submitted by a nominating committee.

% After a final assessment has been rendered, the burden of proof falls

on the Department of Revenue rather than the taxpayer.

% The substitute provides 45 days to appeal an assessment. The current

time for appeal is 30 days; the House-passed version provides 60 days to appeal.

The concept of an independent tax appeals tribunal is the model used by more than half of the states, with Georgia being the latest to adopt it.

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Other sections of the bill that pertain to the Alabama Taxpayers Bill of Rights update and conform state law to the procedures and provisions used by the federal government to deal equitably with taxpayers. Under the auspices of the Business Associations Tax Coalition (BATC), the BCA is among some 27 business and trade associations that have endorsed this bill. SB 549 now moves on to be considered by the House.

Blackwell proud of legislation to streamline tax filing for business State Sen. Slade Blackwell, R-Mountain Brook, chairman of the upper chamber’s Banking and Insurance Committee, appeared before the weekly meeting of BCA’s Governmental Affairs Committee on Tuesday to outline several bills he has recently sponsored and share his thoughts on how the final days of the 2012 regular session might proceed. Blackwell said he and his family operate a small real estate development company in Birmingham, so his priority as a legislator has been to provide small business owners with the tools and economic environment necessary to build, grow and expand the companies they operate. Thus, his legislative package is composed primarily of economic and incentive measures rather than the social issue concerns that many lawmakers in his party often promote.

BCA Senior VP Anita L. Archie listens as Sen. Slade Blackwell addresses BCA Governmental Affairs Committee

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“You won’t see me pushing a lot of social issues because there are enough members who are hitting those,” Blackwell said. “What I want to do is focus on getting rid of red tape, streamlining government and making it easier for business owners to operate.” The lawmaker, who also sits on the Business and Labor and the Job Creation and Economic Development committees, among others, pointed to the recent passage of important legislation to streamline tax filings as an example of his efforts. Known as ONE SPOT, an acronym for Optional Network Election for Single Point Online Transactions, Blackwell’s bill sets up a single, electronic system that businesses may use to file or pay state and local sales taxes, use taxes and rental and lease levies. Currently, businesses operating in multiple counties and cities must file separate tax returns with each local entity, along with the Alabama Department of Revenue. According to the Alabama Retail Association, some retailers in the state must file 150 separate returns and write 150 separate checks to 150 taxing entities each month. Once Blackwell’s bill goes into effect, mandated to occur by the start of FY2014, those same retailers will have the convenience of one-stop, electronic filing. He noted that the legislation passed both houses without opposition. Gov. Robert Bentley signed the bill into law this week. Among other bills he has continued to push, but not yet passed, are those allowing businesses to carry forward their capital losses not offset by income to the next year on state taxes. Federal law allows businesses to carry forward up to $3,000 in capital losses, but Alabama demands that they be used only in the current year. Blackwell said his New Market Tax Credit legislation is an important incentive bill that allows Alabama to mirror a tax credit being offered to businesses on the federal level, which has spurred roughly $30 billion in private investment in businesses across the country over the past decade. In exchange for their investments in qualified businesses and projects located in low-income and underdeveloped areas throughout Alabama, the state would offer private investors an income or premium tax credit over the next seven years. The program would make a total of $240 million available for investment with participating venture capitalists able to claim 50 percent of the amount in tax credits. For investments in urban downtown areas, the credit is zero for the first year and 8.33 percent for each of the next six years. The cap on state tax credits that can be made available is $20 million

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a year, or $120 million over a span of six years, as tax credits are uncollected in the first year. Louisiana was the first state to supplement the program with a state tax credit in 2005 with Mississippi following in 2007. Because of its state incentive complement, Louisiana has benefited from more than $1.5 billion in New Market-based investments, and Mississippi has reaped almost $500 million in direct capital while Alabama has seen only $77 million flow into the state through the federal incentive program. Since passing its New Market state tax credit in 2010, Florida has seen its investments quadruple. Economic impact studies have shown that for every $1 in tax incentives Alabama would offer through the program, roughly $4 in investment would flow into the state. Another measure he hopes to push strongly next year is a research and development incentive that provides tax credits of between 6 and 13 percent to qualified companies and financial institutions. He predicted the remaining days of the 2012 regular session could be dominated by a debate over proposed changes and adjustments to Alabama’s illegal immigration statute that was originally passed and enacted last year. The state Senate, Blackwell said, is divided into three competing Republican factions on the subject. One group wants to pass a House-approved bill sponsored by State Rep. Micky Hammon, R- Decatur, that includes many changes long requested by the business community as a whole. Another faction supports an alternative being offered by Sen. Scott Beason, R-Gardendale, that makes minor adjustments to the immigration law but fails to address most of the issues raised by the business community. A third bloc seeks to do nothing until the Supreme Court rules on a similar Arizona law this summer and offers precedence and guidance on how to best proceed. A majority of Senate Democrats advocate for repeal. “I think we need to move Hammon’s bill because I’m more interested in having a law we can enforce, but without putting a burden on business owners and the business community,” Blackwell said. “Getting those three factions on the same page is going to take a lot of moving parts. If we can’t get a consensus, I’m going to have both hands raised in an effort to slow down the Senate until we get the concerns of the business folks taken care of.”

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Bill to strip away rights of property owners stayed by senator but battle not over Once again, a bill that sought to shackle businesses and property owners with yet another regulation and another new cause of action was defeated, but it is not technically dead. SB 331, by Sen. Paul Sanford, R-Huntsville, would make it illegal for businesses and individual property owners to establish a policy prohibiting anyone from bringing a gun onto their property. The bill would also authorize new lawsuits against property owners who would deny anyone with a gun access to carry the gun onto the owner’s property. Thursday was the 26th legislative day, the last day to pass a Senate bill without unanimous consent. The senators agreed to work through all Senate bills on the special order calendar, and agreed to carry the bill over if a senator opposed a bill and a long debate ensued. The BCA sent an electronic copy of its opposition to SB 331 to each senator when the bill came up for debate Thursday evening. In the statement, BCA President and CEO William Canary said, “This bill erodes the constitutional property rights of individuals and businesses. Alabama businesses are already struggling with burdensome regulations that impact productivity and increase costs. The inescapable result of this legislation would be to increase employer costs, including insurance costs, which would result in the loss of jobs. BCA has consistently opposed this type of legislation for nearly a decade.” Sen. Slade Blackwell, R-Mountain Brook, was the lone senator to support property owners and immediately began a filibuster on SB 331 to protect private companies in Alabama from being further burdened by the bill’s passage. When it appeared Sen. Blackwell would not waiver from his filibuster, Senate President Pro Tem Del Marsh, R-Anniston, moved for adjournment of the Senate. The motion failed. However, shortly thereafter, Sen. Sanford asked for SB 331 to be carried over at the call of the chair, and the Senate subsequently adjourned. SB 331 may come before the Senate on Tuesday if it has any chance of passing during the remaining days of this session. BCA opposes this legislation.

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In Other News

Minimum school age bill on way to governor The House passed SB 28, by Sen. Priscillla Dunn, D-Bessemer, that would change the mandatory minimum age required for children to be enrolled in school from seven to six years of age. However, the bill allows a parent, legal custodian or guardian of a child who is six to opt out of enrolling their child by notifying the local board of education in writing that the child will not be enrolled in school until the child turns seven. The bill now goes to the governor for his signature. BCA supports this bill.

Bill would transfer Forever Wild Trust funds if amendment fails A public hearing was held this week on a proposed constitutional amendment, SB 516, by Sen. Shadrack McGill, R-Scottsboro. If it is approved by the voters in November, and the Forever Wild Amendment fails to be ratified, the legislation would authorize the transfer of monies from the Forever Wild Land Trust to the Alabama Department of Child Abuse & Neglect Prevention and to the Education Trust Fund for vocational and technical education in high schools. The transfer of funds could also be authorized in the event that the Forever Wild amendment is approved but receives fewer “yes” votes than the McGill amendment. BCA’s 2012 Legislative Agenda supports reauthorization of the Forever Wild Program. BCA opposes SB 516.

House OKs expansion of benefits for autism disorder The House on Thursday passed SB 283, by Sen. Cam Ward, R-Alabaster, that expands coverage of certain health benefits for children up to the age of nine with autism spectrum disorder. The bill, which was agreed to by health benefit plan providers and the bill sponsor, would increase the number of occupational, physical or speech therapy visits for children under the age of nine and increase the number of office visits to 100 per year. Health benefit plans “offer” coverage for behavioral therapy benefits for children diagnosed with autism disorder to employers with 50 or more employees for $35,000 per year. Employers will have the option to choose this coverage. This bill will not impact small employers.

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BCA’s Vernon confirmed as UWA trustee The Senate has confirmed the nomination by Gov. Robert Bentley of Victor Vernon, BCA’s director of legislative policy, to the board of trustees of the University of West Alabama. Vernon represents the interests of the Alabama business community before the legislature and state and local governmental agencies on tax, public education and workforce training issues. “We are very proud and pleased that Victor’s abilities and expertise have been recognized by the governor and confirmed by the Senate,” said BCA President and CEO William Canary. “We are confident he will be a valuable asset to the University of West Alabama’s board of trustees.” Before joining the BCA in 1998, Vernon was the Senate fiscal officer for the Alabama Legislative Fiscal Office for 18 years. He directed preparation of the Senate’s versions of state education and general government budget bills and directed the work of staff analysts on all tax, budget and other fiscal issues pending before the Senate. He holds a master of arts in finance from the University of Alabama and a bachelor’s in economics from the University of Alabama in Birmingham. Located in Livingston, the University of West Alabama has more than 5,000 students and offers more than 60 undergraduate programs and 10 graduate programs.

Walter Energy mine project to bring 500 new jobs BCA President and CEO William J. Canary joined BCA board member Walter Scheller, CEO of Walter Energy, at the announcement that his company will bring 500 new jobs to Alabama. The company will open a metallurgical coal mine in Tuscaloosa County, and the project will provide jobs in Fayette and Walker counties as well as at the Port of Mobile.

C H A P T E R 14 May 7, 2012

DRAWING A LINE IN THE SAND, HOUSE REFUSES WA T E R E D - D O W N S E N A T E C H A R T E R B I L L “There are no great limits to growth because there are no limits of human intelligence, imagination, and wonder.”

RONALD REAGAN

any observers this week had expected the Senate to devote a majority of its time making changes to HB 56, the state’s illegal immigration law, but that was not to be. Word came late Thursday that HB 658, by Rep. Micky Hammon, R-Decatur, would not be brought up for debate until the last day of the session, Wednesday, May 16. The business community as well as immigration advocates had geared up for a presumed debate on Tuesday, but the day passed without any action. Wednesday’s special order calendar included SB 41, by Sen. Billy Beasley, D-Clayton, that would repeal HB 56, and also included HB 658, which included many changes advocated by the business community. After a lengthy debate, senators rejected the repeal measure by a vote of 20-14. When the proposed substitute to HB 658, by Sen. Scott Beason, R-Gardendale, was brought up, many senators objected to taking any action on the bill because it contained several changes that they had not been given the opportunity to review. “The intent of the immigration law was never to make it difficult for businesses to comply and burden businesses with unnecessary red tape,” BCA President and CEO William Canary said when the original HB 658 was first introduced. “These changes, while not perfect, are a much-needed step in the right direction and will allow businesses to clearly comply with both federal and state immigration law.” BCA supports HB 658. 171

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Charter school bill dead for this session, but history is made for education reform The House Ways & Means Education Committee met on Thursday morning to hold a final public hearing on SB 513. Rep. Phil Williams, R-Huntsville, who sponsored the House version and is a passionate supporter of education reform, recognized the fallacies of the amended legislation and asked that the bill be carried over, which stopped it from reaching the House floor for the one remaining day of the 2012 session. Sen. Dick Brewbaker, R-Pike Road, who sponsored SB 513, spoke at the public hearing and told the committee the version that passed the Senate last week had been diluted, but it was the only way it would have passed in the Senate. “Believe me, if in your wisdom you decide to scrap SB 513, you won’t hurt my feelings at all. We will all come back and try again next year,” Brewbaker said. Williams then explained to the committee that because of changes the Senate made to the bill, they had essentially made it impossible to open a charter school in Alabama. Echoing Brewbaker, Williams concluded by saying, “We will be back.” Readers will remember that several changes were made to the bill in the Senate last week that included limiting charters to the state’s four most populous cities and requiring unanimous consent from the local legislative delegation. Under those conditions, it would have been an uphill fight to get even one charter school open. House Speaker Mike Hubbard, R-Auburn, said House leadership decided to let the bill die in committee because, as reported in the Montgomery Advertiser, “What the Senate sent to us was totally unacceptable. When you get down to it, it was a bill that provided no opportunity for charter schools, (and) no competition. At this late date, it didn’t make any sense for us in the House... to have come through to try to fix a very, very flawed bill” that had little chance of passage. Following the meeting, BCA President and CEO William J. Canary noted the historical significance of what had just occurred. “Twenty months ago, we would not have even been able to have this conversation about any education reforms. The bill may not have passed, but we finally have a legislature that is willing to spend a significant amount time discussing

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reforms to our education system. The BCA looks forward to this discussion in the 2013 legislative session.”

‘Agreed-upon’ bill to fix gross income problem awaits governor’s signature HB 286, by Rep. Jay Love, R-Montgomery, completed its journey through the Alabama Legislature in virtually the same form that it began, despite several early efforts to derail the measure. The measure now goes to Gov. Robert Bentley for his signature. The compromise legislation eliminates the uncertainty and resolves a longstanding conflict between a tax statute and a Department of Revenue regulation governing the tax treatment of income earned by resident owners/partners/members of Sub-S corporations, partnerships and LLCs that do business in multiple states. The bill puts into statute a Department of Revenue regulation directing Alabama resident owners and partners of such pass-through entities to report their respective shares of the entity’s income earned worldwide. It also provides an income tax credit for their shares of entity-level income-like taxes paid to other states and adds a provision that provides a 50-percent credit for taxes paid to foreign countries. “This issue has always been about tax fairness and tax consistency for Alabama residents to address inequities in the Alabama tax law,” said BCA President and CEO William Canary. “That is why a broad-based coalition of business organizations, including BATC, BCA and ASCPA, strongly believes that any attempt to change tax law should be through a legislative solution and not by bureaucratic regulations and rule changes. For over a year, we have worked with the administration and legislative leadership in both houses to secure passage of this legislation, and we are pleased that it is finally going to the governor for his signature.” Failure to pass HB 286 would have doubled taxes for many businesses in Alabama.

Reapportionment hearings set to begin As the House and Senate wrap up the 2012 session next Wednesday, lawmakers will remain in town as Gov. Robert Bentley is expected to call the legislature into special session to take up the issue of redistricting

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state House and Senate seats next week. Maps of proposed districts were released this week for the first time and with some interesting changes. Rep.Jim McClendon,R-Springville,who co-chairs the Reapportionment Committee with Sen. Gerald Dial, R-Lineville, introduced the House version, while Dial introduced the Senate version. Constitutionally, the process of redistricting must take place every 10 years following the census. Based on Alabama’s population, the 105 seats in the House of Representatives must be redrawn so that each member represents roughly 46,000 people. The 35 Senate seats must also be redrawn so that each senator represents approximately 137,000 people. Last year the legislature redrew lines for congressional districts and State Board of Education districts. Proposed changes to House districts include Montgomery County losing one seat, currently held by Rep. Joe Hubbard, D-Montgomery, to Shelby County, while Madison County, which has seen a population boom over the last decade, would gain an additional seat at the expense of Rep. Demetrius Newton, D-Birmingham. Proposed changes to Senate districts also would add an additional Senate district in Madison County. Sen. Tammy Irons, D-Florence, would see her district expand from Florence all the way to Huntsville. In southwest Alabama, the district of Sen. Marc Keahey, D-Grove Hill has been expanded from the Mississippi line, down through Baldwin County and over to the Florida line.

Bills providing for independent tax appeals commission in position to pass on final legislative day Both HB 105, by Rep. Paul DeMarco, R-Homewood, and SB 549, By Sen. Ben Brooks, R-Mobile, are poised to pass the opposite chambers when the legislature returns for its final day of the session Wednesday. If either bill passes, each must be returned to its house of origin for concurrence or for the differences between the versions to be resolved by a conference committee. The concept of an independent tax appeals tribunal is the model used by more than half of the states, with Georgia being the latest to adopt it. Other sections of the bill that pertain to the Alabama Taxpayers’ Bill of Rights would update and conform state law to the procedures and

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provisions used by the federal government to equitably deal with taxpayers. Under the auspices of the Business Associations Tax Coalition (BATC), the BCA is among some 27 business and trade associations that have endorsed this bill. The House Judiciary committee adopted an amendment offered by Rep. DeMarco that changed several provisions in the Senate-passed version of SB 549 as follows: % Restored the concept of a nominating committee to submit names to

the governor for successor judges.

% Re-shifted the burden of proof to the taxpayer after a final assessment. % Restores a period of 60 days to appeal an assessment, where currently

one must appeal within 30 days and the Senate-passed version provided 45 days to appeal.

BCA supports this legislation.

Senate denies floor vote on key job creation bill On a procedural vote, the Alabama Senate failed to muster sufficient support for bringing HB 160, by Rep. Barry Mask, R-Wetumpka, before the full Senate for final passage. That vote means that the cornerstone of the governor’s and the legislative leadership’s concept for job creation is likely dead for this session. HB 160, the enabling bill, in conjunction with proposed constitutional amendment HB 159, were intended to provide the state’s industrial recruiting officials flexibility and a variety of incentives that could be used to match creative inducements that our competitor states offer industrial prospects. The legislation would have provided that a percentage of state income tax withholdings from the additional employees be retained and used by the company to offset the costs of acquiring and equipping the facility. The Senate Finance and Taxation-Education Committee had earlier removed all references that mentioned using the incentives for job retention projects, which had attracted the most criticism.

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Governor signs bills relating to unemployment compensation Gov. Robert Bentley signed into law this week SB 300 and HB 72, both of which relate to uemployment compensation. HB 72, by Rep. Paul DeMarco, R-Homewood, increases penalties for individuals who commit unemployment compensation fraud. Under the new law, Act 2012-292, violators will be subject to criminal penalties, disqualification for future benefits and repayment of fraudulently received benefits. The bill makes unemployment compensation fraud just as punishable as theft of property. Individuals who receive fraudulent benefits in amounts of $2,500 or greater will be guilty of a Class “B” felony. Fraud in amounts less than $2,500 will be prosecuted as Class “C” felonies, and fraud amounts less than $500 will be Class “A” misdemeanors. Violators will also be subject to disqualification of future unemployment benefits. A first offense will result in 52 weeks of disqualification. Subsequent offenses will prevent violators from receiving unemployment compensation for 104 weeks. Violators will also be required to repay the fraudulently received benefits, plus interest, and will not be eligible for future benefits until the debt is paid. The Alabama Department of Industrial Relations estimates that there were more than 12,000 cases of unemployment compensation fraud in fiscal year 2011, equaling more than $15 million. The second bill, SB 300, by Sen. Trip Pittman, R-Daphne, imposes a one-week waiting period after filing for unemployment benefits. Currently, individuals have a one-week waiting period after 13 weeks of unemployment payments. Under the new law, Act 2012-299, the first week waiting period will save the Unemployment Compensation Trust Fund an estimated $11.4 million.

Metal theft bill heads to governor The Alabama Legislature this week gave final approval to the metal theft bill, which now awaits the governor’s signature. HB 278, by Rep. Bill Poole, R-Northport, would impose more stringent requirements on those in the scrap metal recycling industry, requiring these businesses to maintain for one year additional records relating to the purchase of scrap metal, including both a copy of the personal

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identification card of the person delivering the metal to be sold, a digital photograph or video recording of that same person and the vehicle license tag number and state of issue of the person delivering the metal property. Those businesses that fail to obtain and maintain these records would face criminal penalties. The legislation also would classify as a felony the theft of certain metal property, including telephone, cable and power lines and poles; railroad materials; manhole covers; grave markers; and any metal property taken from a school or church. It raises the crime to a felony if the theft or destruction of these items causes imminent danger to the health and safety of the public. Cash transactions would be limited to no more than $50 for copper, air conditioning coils or catalytic convertors. Persons younger than 18 years old would not be allowed to sell metal property, and metal property could only be purchased between 6 a.m. and 9 p.m. HB 278 would also require scrap metal recyclers to register with the Alabama Criminal Justice Information Center (ACJIC), or other responsible state agency, and transmit electronically all of their business transactions to the database each day. Only properly authorized law enforcement agencies investigating thefts of metal property would be able to access this data. BCA has been a part of the broad coalition of business and manufacturing leaders, energy providers, law enforcement, municipalities, churches, scrap recyclers and lawmakers working together for months to develop this legislation to address this growing epidemic. BCA supports this legislation.

‘New Market Development Program’ bill transmitted to Bentley Gov. Robert Bentley is expected to sign HB 257, by Rep. Jamie Ison, R-Mobile, which authorizes tax credits on the state’s share of certain taxes for investments in qualified community businesses in low-income communities. If enacted, Alabama will join states such as Florida, Mississippi and Illinois that already have state New Market Development programs modeled after the New Market Tax Credit Program established by Congress in 2000. The federal program promotes investments in businesses and real estate projects in low-income communities. Coupling the state incentives

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with the federal incentives provides community leaders an effective tool for revitalizing low-income census tracts in downtown core areas and central business districts. The bill caps the credit at $10 million per each qualified active low-income community business, sets an aggregate cap of $20 million annually, and limits the taxpayer’s credit to not more than the taxpayer’s state tax liability. BCA supports this legislation.

Insurance fraud bill with BCA-authored language goes to governor HB 323, by Rep. Steve McMillan, R-Bay Minette, would allow the Department of Insurance to investigate suspected insurance fraud when the attorney general neglects or refuses to prosecute an alleged violation. The Senate passed the bill this week, and it now awaits the governor’s signature. The bill creates a fraud unit within the Department of Insurance to investigate suspected insurance fraud. Funding for the fraud unit would come from a $200 annual assessment of insurers doing business in the state. The new law also creates civil and criminal penalties for those found guilty of committing insurance fraud and would allow for restitution to the aggrieved party. Because HB 323 defines self-insured health benefit plans (ERISA plans) as insurers, BCA was concerned employers would be subjected to unnecessary audits by the Department of Insurance. As a result, BCA staff was successful in having the bill amended to exempt ERISA plans from the bill.

UA intern helping BCA staff Caty Cameron, a senior at the University of Alabama, is spending three weeks at the Business Council of Alabama as part of “The Montgomery Experience” program that provides UA students with the opportunity to learn and work in the state’s capital. She is assisting in the Intergovernmental Affairs, Advocacy and Communications department. Cameron, who is from Demopolis, maintains a 3.8 GPA while majoring in political science and minoring in communication studies. A member of the Pre-Law Student Association, she is also a justice on the College

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of Arts and Sciences Academic Honor Council. She plans to attend law school after graduation.

Washington Br iefing

House Passes Ex-Im Reauthorization The House on Wednesday voted 330-93 to pass a bipartisan agreement, H.R. 2072, reauthorizing the Export-Import Bank. The legislation went to the House floor under suspension of the rules, which requires support of two-thirds of the House for passage. All seven members of Alabama’s House delegation voted in support of the measure. The legislation would allow the bank’s lending limit to be lifted gradually, reaching $140 billion in 2014. For the current fiscal year, the cap would increase from $100 billion to $120 billion, and then in fiscal years 2013 and 2014, it would grow in two successive $10 billion increments. The bank’s mandate would be extended for three years. Without this agreement, the bank’s authority would expire at the end of the month. Failure to reauthorize Ex-Im’s operations at an internationally competitive level would seriously disadvantage U.S. companies, small and large, in foreign markets, threatening thousands of American jobs that depend on its crucial export financing. The bill now heads to the Senate where Majority Leader Harry Reid has indicated that the Senate will quickly take up the House bill and try to pass it unchanged. Reauthorization of the U.S. Export-Import Bank, prior to its charter expiring on May 31, 2012, is a BCA federal legislative priority. This week, the Business Council of Alabama and more than 180 chambers of commerce signed a letter spearheaded by the U.S. Chamber

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of Commerce urging the reauthorization of the Ex-Im Bank. The letter was delivered to every member of Congress. Also this week, the BCA, along with associations and manufacturers from across the country, joined the National Association of Manufacturers in a print ad urging reauthorization of the bank. The ad appeared this week in Politico, National Journal, CQ Today and Human Events.

Sessions Receives Coveted U.S. Chamber Award The Mobile Area Chamber of Commerce hosted U.S. Sen. Jeff Sessions during a Forum Alabama breakfast held last week in Mobile. The Business Council of Alabama was on hand as our partner, the U.S. Chamber of Commerce, used the opportunity to present the senator with the coveted “Spirit of Enterprise” award for his pro-business voting record in 2011. During the second session of the 111th Congress, the Chamber keyvoted 11 Senate and 9 House votes, including passage of a tax cut extension, health care reform, financial services legislation, campaign finance reform and legislation to improve science and math education. U.S. Sen. Richard Shelby, U.S. Reps. Jo Bonner, Mike Rogers, Robert Aderholt, Mo Brooks and Spencer Bachus all earned the “Spirit of Enterprise” award for the second session of the 111th Congress.

BCA, Gulf Coast coalition urge Congress to pass RESTORE Act The Business Council of Alabama as part of a coalition of 115 leaders of Gulf Coast cities, municipalities, economic development organizations and chambers of commerce sent a joint letter to Congress urging passage of the RESTORE Act in conjunction with the finalization of the transportation reauthorization bill now pending. The RESTORE Act would establish the Gulf Coast Restoration Trust Fund, which would receive 80 percent of all administrative, civil and criminal penalties paid by responsible parties in connection with the Deepwater Horizon oil spill, together with any other appropriated funds. In addition, the legislation would: Allocate Clean Water Act oil spill program penalties to the Gulf Coast States according to a formula:

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R 35 percent of the total would be allocated in equal shares to the five Gulf Coast States

R 60 percent of the total would be allocated to the Gulf Coast Ecosystem Restoration Council

R 5 percent would be allocated to a Gulf Coast research, science and technology program

Authorize the governor of each of the five states to support projects and programs that restore, protect and use the resources of the state

Establish the Gulf Coast Centers of Excellence for Ecosystem Restoration Science, Monitoring and Technology

The letter states, “The economic and ecological restoration called for under the RESTORE Act will create needed private sector jobs while reclaiming vital natural and commercial assets that are unique to the Gulf Coast and critically important to the economic and environmental health of the nation.” Both the House and Senate have approved versions of the RESTORE Act, which will now be finalized by the conference committee on the transportation reauthorization bill.

President Signs Ex-Im Reauthorization President Barack Obama on Wednesday signed legislation reauthorizing the Export-Import Bank, which makes it easier for U.S. companies to sell their goods overseas by providing financing for exports. The legislation gradually raises the bank’s lending limit, reaching $140 billion in 2014. For the current fiscal year, the cap increases from $100 billion to $120 billion, and then in fiscal years 2013 and 2014, it will grow in two successive $10 billion increments. At the bill signing ceremony, the president said, “We’re helping thousands of businesses sell more of their products and services overseas, and in the process, we’re helping them create jobs here at home. And we’re doing it at no extra cost to the taxpayer.” The Ex-Im Bank, which dates back to the Roosevelt administration, provides loans and other support for both large and small businesses to sell their products outside of the United States. These loans are generally

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considered to be more risky due to the volatility of the overseas marketplace. Without this legislation, the bankâ&#x20AC;&#x2122;s authority would have expired on Thursday, and U.S. companies, small and large, would face a serious disadvantage in foreign markets, threatening thousands of American jobs that depend on its crucial export financing. Reauthorization of the U.S. Export-Import Bank was a BCA federal legislative priority.

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labama businesses will reap the benefits of much positive legislation from the recently concluded regular session of the state legislature, as bills were passed to streamline the filing of business taxes; provide incentives for job creation in the coal-mining, data processing and aerospace industries; stiffen penalties for metal theft; and make strides toward improvement in public education, among others. “We are pleased that the Alabama Legislature has built upon the progress begun in the 2011 session,” said BCA President and CEO William Canary. “The businesses that we represent every day will benefit from the pro-growth policies reflected in the legislation passed and signed into law by Gov. Bentley.” House Speaker Mike Hubbard called the session a “major success,” and added, “The days of the ‘do-nothing’ legislature in Alabama are over.” A number of bills on BCA’ s Legislative Agenda were passed and enacted into law, and once again, no anti-business, job-killing legislation was approved. A summary of major bills BCA monitored throughout the regular and special session follows specific legislation supported or opposed in BCA’s 2012 Legislative Agenda listed in the first portion of the briefing. Revisions to immigration law make compliance less burdensome for businesses, but penalties harsher Gov. Bentley signed HB 658, enacted as Act #2012-491, which makes several changes to the state’s immigration law (HB56/Act 2011-535) passed just one year ago. A few changes make compliance with the law less burdensome on businesses and employers; however, others make the penalties for noncompliance harsher. 183

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BCA’s 2012 Legislative Agenda supported clarification of the immigration law “to ensure that immigration laws impacting Alabama businesses do not impose additional burdens on, or penalize, Alabama employers.”

‘Guns to work’ bills die on Senate floor SB 331, by Sen. Paul Sanford, R-Huntsville, would have prohibited a public or private employer, property owner or business from establishing a policy against transporting or possessing a firearm or ammunition if the person was in compliance with other laws. The bill would have made it illegal for an employer or private property owner to establish a policy prohibiting anyone from bringing a gun onto that person’s property. Anyone denied the opportunity to transport or store a firearm or ammunition or who is fired for violating a company policy would have been able to sue a business, property owner or public or private employer, for violating the act. Late in the session SB 331 was debated by the full Senate, but a vote was never taken. SB 337, by Sen. Scott Beason, R-Gardendale, would have authorized a person to carry a pistol in his or her vehicle or private property without a concealed pistol permit. While the Constitution protects a person’s right to bear arms, eliminating the need for a permit is a safety issue. If permits are no longer required, officers would have no way to determine whether a person is a convicted felon or presents another form of danger. The bill came up for debate on the Senate floor late in the session, but the bill sponsor agreed to carry it over when several senators expressed concern.

Unemployment compensation fraud law strengthened HB 72, by Rep. Paul DeMarco, R-Homewood, enacted as Act #2012292, provides that a person who fraudulently receives unemployment compensation benefits will be subject to disqualification of future benefits. A first offense will result in 52 weeks of disqualification. Subsequent offenses will prevent violators from receiving unemployment compensation for 104 weeks. Violators will also be required to repay the fraudulently received benefits, plus interest, and will not be eligible for future benefits until the

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debt is paid. The new law makes unemployment compensation fraud just as punishable as theft of property.

Change in unemployment compensation law expected to save state money SB 300, by Sen. Trip Pittman, R-Daphne and companion bill HB 285, by Rep. Jack Williams, R-Birmingham, enacted as Act #2012299, establish a one-week waiting period during the first compensable week of unemployment compensation benefits for individuals seeking unemployment benefits. The bill amends current law that applies a one-week waiting period after the 13th compensable week of paid unemployment benefits. Individuals will be able to receive benefits for 26 consecutive weeks beginning with the second compensable week. The new waiting period will save the Unemployment Compensation Trust Fund between $11 million and $14.5 million in the first year, according to the Alabama Department of Industrial Relations. BCA’s 2012 Legislative Agenda supports legislation to decrease fraud in unemployment compensation workers’ claims, and opposes expanding unemployment compensation benefits that would incur increased taxes on Alabama business.

Charter school legislation will return next year SB 513, by Sen. Dick Brewbaker, R-Pike Road, was the school flexibility and charter school bill introduced this year. It was the first step in an effort to allow new opportunities for parents when their children attend consistently failing schools. The law as originally intended would have allowed for the creation of a limited number of charter schools around the state. Charter schools are public schools allowed freedom to teach in innovative ways while being held accountable for higher standards and achievement. Charter schools are not the single solution to all of Alabama’s education problems; however, they are another tool in the education reform arsenal that will help reduce the dropout rate and prepare students to enter the workforce. After the bill made it through the Senate Education Committee and the full Senate, it was a watered-down piece of legislation that would have

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made it virtually impossible to open a charter school in Alabama. Not only did it restrict charter schools to the state’s four most populous counties, it required the unanimous consent of every legislator in the county’s delegation. After passing the Senate late in the session in this watereddown form, it went to the House Ways & Means Education Committee where Rep. Phil Williams, R-Huntsville, sponsor of the House version, asked that it be carried over, essentially killing the bill for the remainder of the session. Williams did make it clear he wanted a better charter school bill, and he would be back in 2013 to push for it again. Following the committee meeting, BCA President and CEO William J. Canary spoke passionately of Alabama’s advances in the education reform movement and said BCA would support the charter school bill next year. “Twenty months ago, we would not have even been able to have a conversation about any education reforms,” Canary said. “The bill may not have passed, but we finally have a legislature that is willing to spend a significant amount of time discussing reforms to our education system. The BCA looks forward to this discussion in the 2013 legislative session.” BCA’s 2012 Legislative Agenda supported enacting legislation allowing public charter schools in Alabama.

‘Agreed-upon’ gross income fix is law A longstanding issue involving the Alabama Department of Revenue and resident owners/members/partners of “pass-through” entities that do business in and outside of Alabama has been resolved with the passage of HB 286, by Rep. Jay Love, R-Montgomery, enacted as Act # 2012-27. This compromise legislation, which originally died on the last night of the 2011 regular session, requires the taxpayer to recognize his/her share of the entity’s income from all sources worldwide, with the taxpayer receiving credits for 100 percent of entity-level, income-like taxes paid to other states and receiving a 50-percent credit for income taxes paid to foreign countries, to avoid double taxation on the same income. For years, the BCA, along with the other members of the Business Associations Tax Coalition (BATC), has advocated for this legislation as an equitable solution that provides these taxpayers more certainty in tax planning.

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Single-point of filing: Common-sense application ofÂ technology to promote tax compliance SB 549, by Sen. Slade Blackwell, R-Mountain Brook, enacted as Act #2012-279, establishes the ONE-SPOT system, an electronic singlepoint filing system administered by the Alabama Department of Revenue for taxpayers to file state and local sales/use and rental/lease tax payments. The bill sets up an eight-member Advisory Commission, comprised of three members from county government, three members from municipal government, a representative from the BCA and a representative from the Alabama Retail Association, to advise the commissioner of revenue on the development and operation of the system. The bill further requires local governments to provide tax rate information and to provide updates as needed. BCAâ&#x20AC;&#x2122;s 2012 Legislative Agenda supports streamlining and simplifying our sales/use tax system to provide a single point of filing for state and all local sales and use tax returns.Â

Drafting errors lead to pocket veto of tax appeals commission bill; Bentley pledges support in future session After working for several years to enact legislation to provide for an independent tax appeals tribunal, Alabama business associations will have to try once more, as Gov. Robert Bentley opted not to sign SB 549, by Sen. Ben Brooks, R-Mobile. On the final day of the 2012 regular session, the bill was referred to a conference committee to resolve differences between the versions passed by the two chambers, but in the last-minute rush, the wrong version of the bill was used to draft the compromise bill. The drafting errors were unintentional but were deemed to be too significant for the governor to sign into law. Both SB 549 and its companion, HB 105, by Rep. Paul DeMarco, R-Homewood, were in position to pass the opposite chamber on the final day. The bills provided for an independent tax appeals tribunal that is the model used by more than 30 states, with Georgia being the latest to adopt this concept. Other sections pertaining to the Alabama Taxpayers Bill of Rights update and conform state law to the procedures and provisions used by the federal government to equitably deal with taxpayers. Under the auspices of the Business Associations Tax Coalition

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(BATC), the BCA is among some 27 business and trade associations that have endorsed this bill. The governor pledged to include the legislation in any special session that he might call before the regular session in February 2013 and assured the interested parties that he would support its passage. We thank Sen. Brooks and Rep. DeMarco for working tirelessly to shepherd the bills through the entire process. Supporters are urged to maintain their resolve and continue to advocate for this legislation that provides a sound statutory framework for independent and equitable state-local tax administration. BCA’s 2012 Legislative Agenda supports both creation of the Alabama Tax Appeals Commission and the Alabama Taxpayers’ Bill of Rights.

Metal theft now a felony HB 278, by Rep. Bill Poole, R-Northport, enacted as Act #2012-426, classifies the theft of certain metal property as a felony, including telephone, cable and power lines and poles; railroad materials; manhole covers; grave markers; and any other metal property taken from a school or church. Cash transactions will be limited to no more than $50 for copper, air conditioning coils and catalytic convertors. Persons younger than 18 will not be allowed to sell metal property, and metal property can only be purchased between 6 a.m. and 9 p.m. The new law will also require scrap metal recyclers to register with the Alabama Criminal Justice Information Center (ACJIC) and transmit electronically all of their business transactions to the database each day. Only properly authorized law enforcement agencies will be able to access this data. BCA’s 2012 Legislative Agenda supports efforts to address the problem of metal theft crimes.

Law aims to curb meth manufacturing HB 363, by Rep. Blaine Galliher, R-Gadsden, enacted as Act #2012237, seeks to clamp down on the manufacture of methamphetamine in Alabama while still allowing persons to purchase over-the-counter products containing ephedrine and pseudoephedrine such as common cold and allergy medications. HB 363 is an alternative to requiring these products to be available by prescription only. Requiring employees to take time off work to obtain a

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prescription from a physician for these medications would lead to higher health insurance costs for employers and a loss of employee productivity. The BCA worked with legislators, law enforcement and the District Attorneys Association to make changes to the existing law that would not penalize consumers who purchased these products for lawful reasons while also providing tracking mechanisms beneficial to law enforcement seeking out those who purchase products containing pseudoephedrine to manufacture meth. BCA’s 2012 Legislative Agenda opposes making pseudoephedrine available to Alabama residents by prescription only because it would increase health care costs and lessen employee productivity.

Law gives more liability protection for road builders SB 139, by Sen. Clay Scofield, R-Guntersville, enacted as Act #2012225 and actively supported by the Alabama Roadbuilders Association, provides additional liability protection for road builders without shifting responsibility to counties. The new law limits the liability of a road contractor for physical injury, property damage or death for work performed on a highway, road, bridge or street on behalf of the Alabama Department of Transportation, the county or local government unless evidence shows that an incident was caused by the contractor’s performance or inability to recognize a dangerous condition. The new law also provides that a contractor must notify the Department of Transportation if he discovers before or during construction that the plans and specifications could result in a potentially dangerous condition. BCA’s 2012 Legislative Agenda supports legislation providing additional liability protection for Alabama businesses.

Other bills of interest HB 140, by Rep. Micky Hammon, R-Decatur, enacted as Act #2012385, allows businesses that qualify for the state’s income tax capital credits to carry forward the credits from one year up to four additional years, depending on the amount of the capital investment, but not to exceed the original total of 20 years. An Alabama Department of Revenue report on the actual utilization of the capital credits shows that significant portions of the credits are not taken because many companies are not profitable in their early years of operation.

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New Market Development Act to promote investments in lowincome communities HB 257, by Rep. Jamie Ison, R-Mobile, enacted as Act #2012-483, authorizes tax credits on the state’s share of certain taxes for investments made in qualified community businesses in low income communities. Alabama joins states such as Florida, Mississippi and Illinois that have state New Market Development Programs, which are modeled after the New Market Tax Credit Program established by Congress in 2000. The federal program promotes investments in businesses and real estate projects located in low-income communities. Adding the state tax incentives to the federal incentives provides community leaders an effective tool for revitalizing low income census tracts in downtown core areas and central business districts. The bill caps the credit at $10 million per each qualified active low-income community business, sets an aggregate cap of $20 million annually and limits the taxpayer’s credit to not more than the taxpayer’s state tax liability.

Incentives expanded for the entertainment industry HB 243, by Rep. Terri Collins, R-Decatur, enacted as Act #2012-212, expands the incentives offered for film productions shot in Alabama. The law increases the cap on the size of film projects that may be recouped by rebates from $10 million to $20 million and increases the aggregate annual cap on film incentives from $10 million to $20 million in FY2015. According to proponents of the bill, Alabama received only a small portion of its potential share of film projects because of limitations under prior state law.

Incentives enacted for aerospace industry HB 39, by Rep. Paul Lee, R-Dothan, enacted as Act #2012-185, provides an exemption from state sales/use taxes on parts, components and systems incorporated into the refurbishment of certified military, government or commercial transport fixed-wing or rotary wing aircraft. The bill is intended to remove a competitive disadvantage experienced by Alabama companies that refurbish aircraft relative to their competitors in other states, where the parts used in such conversions are tax-exempt. The bill includes a provision that will terminate the tax exemption on May 30, 2022.

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‘Heroes for Hire’ jobs bill salutes veterans HB 152, by Rep. Duwayne Bridges, R-Valley, enacted as Act #2012-168, provides an additional $1,000 tax credit to employers that hire unemployed military veterans who were recently deployed and are now discharged from military service. The bill further provides that the unemployed veteran will be allowed a nonrefundable credit of up to $2,000 for expenses related to a start-up business in which he or she owns at least a 50-percent interest.

Incentives expanded to attract data processing centers; distribution centers must add at least 50 jobs HB 154, by Rep. Dan Williams, R-Athens, enacted as Act #2012210, reduces from 50 to 20 the minimum number of new jobs that must be created for a data processing center to qualify for tax abatements and capital credits. The bill also provides that the term of abatements for data processing centers may be extended, based on several capital investment thresholds, from the current maximum of 10 years, to up to 30 years. This bill also extends the capital credits to certain warehousing and storage activities that provide at least 50 new jobs and have a capital investment of at least $5 million in non-favored geographic areas or at least $1 million in favored (economically distressed) areas of the state. This provision will keep the state in play for attracting several prospective distribution center projects.

Incentives for coal industry scaled back but still expected to be effective HB 144, by Rep. Bill Roberts, R-Jasper, enacted as Act #2012-54, provides that job creation projects in the coal mining industry will be eligible for the state’s capital credits and other abatements under the state’s “Mercedes” incentive law, but the incentives will be limited to 50 percent of the amount otherwise available to other industries. The bill also excludes the coal company’s costs of acquiring land and the related preliminary engineering, architectural and environmental costs from being included as “capital costs,” which are otherwise recoverable for other qualifying industries.

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Voters to decide whether to fund economic development incentives for job creation HB 12, by Rep. Jay Love, R-Montgomery, proposes a constitutional amendment which, if ratified, would authorize a bond commission for the Alabama Capital Improvement Trust Fund to refinance certain existing debt by issuing refunding bonds, not to exceed $750 million when added to the outstanding general obligation bonds. This refinancing would free up an estimated $126.7 million in bonding authority that the state would then use for economic development incentives to attract new jobs to the state. Voters will decide whether to approve the amendment on the November general election ballot.

School performance grading system will provide comprehensive view HB 588, by Rep. Terri Collins, R-Decatur, enacted as Act #2012-402, requires the State Superintendent of Education to 1) develop a school grading system that reflects overall school and school district performance for the 2013-14 school year; 2) post the grades on the Department of Education’s website; and 3) annually provide the grade information to the parent or guardian of each school student. Schools and school systems would receive grades ranging from “A” to “F” to allow parents to make comparisons.

Mandatory minimum school age lowered to six SB 28, by Sen. Priscilla Dunn, D-Bessemer, enacted as Act #2012-295, lowers the minimum mandatory age of school attendance from seven to six years. The Department of Education reports that annually there are a few dozen children who enroll for their first school-based learning experience at age seven. These children are often far less school-ready than many of their younger classmates who have attended pre-school and kindergarten. Public schools are expected to have about 50 additional students enroll statewide due to the new minimum age.

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Pharmacy benefit manager bill saves Shoals jobs HB 393, by Rep. Lynn Greer, R-Rogersville, enacted as Act #2012-213, is intended to satisfy recent requirements imposed by the Alabama Board of Pharmacy on a northwest Alabama call center, allowing it to retain 220 jobs. The new law will also prevent the additional regulation of Pharmacy Benefit Managers (PBMs) that are used by employers of all sizes, as well as by the state public employee and educator benefit programs such as the Retirement Systems of Alabama and the State Employee Insurance Board, to administer prescription drug benefit programs and restrain rising costs. PBMs are currently regulated by the Alabama Board of Pharmacy as well as the Alabama Department of Insurance and the Federal Drug Administration, making additional oversight and regulation by the Board of Pharmacy unnecessary. The law creates a “win-win” situation by helping to retain existing jobs in Muscle Shoals and protecting the ability of employers and state government to continue to offer affordable prescription drug benefits to their employees through the use of PBMs.

Autism benefits expanded SB 283 by Sen. Cam Ward, R-Alabaster, enacted as Act #2012-298, expands coverage of certain health benefits for children up to the age of nine with autism spectrum disorder. The bill, which was agreed to by health benefit plan providers and the bill sponsor, will increase the number of occupational, physical or speech therapy visits for children under the age of nine from 35 visits per calendar year to 100 visits. Benefit plans also will be required to offer coverage for behavioral therapy benefits for children diagnosed with autism disorder to employers with 50 or more employees. Employers will have the option to purchase this coverage, and the benefit amount will be capped at $35,000 per year. This law does not impact small employers.

Campaign finance law changed Politicians and political action committees will be affected by at least two pieces of legislation that passed in the recent session.

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SB 497, by Sen. Arthur Orr, R-Decatur, enacted as Act #2012-477, eliminates duplicate and multiple filings for certain time periods that were previously reported. The new law also specifies that daily reports must include all activity occurring since the most recent prior report, and that weekly and monthly filing requirements cover the entire preceding week or month. Monetary balances of each report now must begin at the same monetary balance reported in the previous report.

Committee to look at changes to Fair Campaign Practices Act SJR 97, sponsored by Sen. Jabo Waggoner, R-Vestavia Hills, enacted as Act #2012-358, sets up an interim legislative study committee on campaign finance reform. It also sets up an Alabama Bar Association study group to recommend changes to the Fair Campaign Practices Act to make it more effective. Since the act was enacted in 1988, several changes have been made to provide more transparency and accountability, such as the ban on PACto-PAC transfers, the addition of filing requirements and requiring a searchable internet database that must be up and running by 2014. The study committee will report its findings to the legislature and the governor by the 5th legislative day of the 2013 session.

Solid waste landfill moratorium extended HB 556, by Rep. Alan Baker, R-Brewton, enacted as Act #2012-434, gives a one-year extension to the existing 24-month moratorium on the issuance of any new permits by the Alabama Department of Environmental Management for public solid waste landfill facilities that receive or are intended to receive wastes not generated by the permittee. The moratorium was set to expire May 31, 2014.

Digital Crime Act goes after cyber criminals Under HB 400, enacted as Act #2012-432, by Rep. Paul DeMarco, R-Homewood, and Sen. Cam Ward, R-Alabaster, persons guilty of committing a computer crime, including cyberstalking, electronic harassment, phishing, data fraud and computer tampering, are subject to criminal penalties, prosecution and forfeiture of equipment. This law makes online threats punishable and outlaws acts such as “phishing” and

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“cyberstalking.” The law also allows law enforcement officials to obtain search warrants to secure information held by out-of-state providers such as Twitter and Facebook. It requires Alabama companies to honor the same warrants from out-of-state law enforcement agencies.

Law outlines basis for honoring foreign money judgments SB 348, by Sen. Phil Williams, R-Rainbow City, enacted as Act #2012470, sets up a framework outlining when foreign money judgments will and will not be honored by Alabama courts. The new law states that a foreign money judgment will be honored in Alabama as long as the issuing court was competent, had jurisdiction and gave the parties an opportunity to defend themselves. The law provides Alabamians and persons with assets in Alabama with a safeguard that did not previously exist. The law provides a simple court procedure for enforcing foreign-country money judgments, addresses burdens of proof of the parties not covered by current law, establishes grounds for denying recognition of foreign-country money judgments, and establishes a statute of limitations for recognition actions.

Definition of de minimis clarified in ethics law HB 466, by Rep. Jay Love, R-Montgomery, enacted as Act #2012-433, clarifies the definition of the legal term, “de minimis,” under the state ethics statute. After the enactment of the 2010 ethics reform package, the term was strictly construed and prevented the giving of gifts that provided little or no value but served merely as a token of appreciation. The term is now defined as a gift of $25 or less per occasion and an aggregate of $50 or less in a calendar year from any single provider. However, the act allows the Ethics Commission to adjust this amount to reflect any increase in the cost of living as indicated by the United States Department of Labor Consumer Price Index.

Insurance fraud bill with BCA-authored language becomes law HB 323, by Rep. Steve McMillan, R-Bay Minette, enacted as Act #2012-429, will allow the Department of Insurance to investigate suspected insurance fraud when the attorney general neglects or refuses to prosecute an alleged violation.

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HB 323 creates a fraud unit within the Department of Insurance to investigate suspected insurance fraud. Funding would come from a $200 annual assessment of insurers doing business in the state. The law also creates civil and criminal penalties for those found guilty of committing insurance fraud and would allow for restitution to the aggrieved party. Because HB 323 defines self-insured health benefit plans (ERISA plans) as insurers, BCA was concerned employers would be subjected to unnecessary audits by the Department of Insurance. As a result, BCA staff successfully amended the bill to exempt ERISA plans.

Texting while driving now banned HB 2, by Rep. Jim McClendon, R-Springville, enacted as Act #2012291, prohibits a person from writing, sending or reading a text-based communication while operating a motor vehicle on a public road, street or highway. However, there are exceptions relating to communication for emergency services, idling on the shoulder of a highway, road or street, and for using the device to receive driving directions.

AC K N OW LED G EM EN T S The Business Council of Alabama would like to acknowledge the valuable contributions of the volunteer chairs and co-chairs of our BCA committees, several of whom made numerous trips to the Alabama State House during the 2012 session to testify before legislative committees on behalf of pro-business legislation. GOVERNMENTAL AFFAIRS

JUDICIAL AND LEGAL REFORM

Chair: Fred Blackwell,

Chair: Debbie Long,

Co-Chair: Chester Vrocher,

Co-Chair: Greg Butrus,

EDUCATION AND WORKFORCE PREPAREDNESS

SMALL BUSINESS

Fred Blackwell Roofing

Protective Life Corporation Balch & Bingham LLP

Alabama Technology Network

Chair: Rick Roden, Greater Jackson

Chair: Bob Powers,

County Chamber of Commerce

The Eufaula Agency

Co-Chair: Ron Perkins,

Co-Chair: Ronnie Boles,

Doozer Software, Inc.

General & Automotive Machine Shop

TAX AND FISCAL POLICY

ENVIRONMENT AND ENERGY

Chair: Marty Abroms,

Chair: Tim McCartney,

Abroms & Associates, P.C.

McCartney Construction Co.

Co-Chair: Jim O’Brien

Co-Chair: David Roberson,

Vulcan Materials Company

The Drummond Company

LABOR, WORKER AND UNEMPLOYMENT COMPENSATION & HUMAN RESOURCES

FEDERAL AFFAIRS

Chair: Suzanne Respess,

Children’s Health Systems

Chair: Freda Bacon,

HEALTH

Chair: Owen Bailey,

USA Children’s and Women’s Hospital

Alabama Self-Insured Workers’ Compensation Fund Co-Chair: Paige Goldman, Energen

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APPENDIX P R O G R E S S PAC L A U N C H E S CAR R YING THE FLAG FOR BUSINESS CAMPAIGN

he Business Council of Alabama’s political action committee, ProgressPAC, has served as the rallying point when the business community and its interests have come under attack time and time again. ProgressPAC has led the charge for business in state elections for nearly three decades with the goal of creating a pro-business legislature and a fair and equitable judiciary. Because so many courageous business leaders joined together under ProgressPAC’s battle flag leading up to the 2010 election cycle, Alabama now has an unprecedented number of legislators and government officials who understand what it means to sign the front of a paycheck so others can sign the back. ProgressPAC’s non-partisan engagement in the 2012 and 2014 campaign cycles will prove critical to determining whether the business community continues to advance the positive gains made over the last several years. Our mission is to ensure that private sector interests remain ahead of increased taxes and suffocating government guidelines. Important reforms in the areas of job creation, education, streamlining government and removing unnecessary regulations must remain top priorities for state leaders. For these reasons, in 2012, ProgressPAC launched its new political advocacy and grassroots mobilization campaign named Carrying the Flag for Business. With the goal of raising $750,000 annually through 2014, the campaign will focus on combating anti-business special interests that routinely collect millions for political purposes, such as actively assaulting Alabama’s status as a right-to-work state, and supporting those elected officials who understand what it means to be pro-business. ProgressPAC’s Carrying the Flag for Business campaign is supported in part by contributions to BCA’s annual Chairman’s Dinner, which in 2012 featured national political strategists Karl Rove and James Carville as guest speakers. Carrying the Flag for Business is a 24/7/365 endeavor that will establish ProgressPAC’s fundraising and political resolve as never before, but be assured that the BCA Team is up to the task. ProgressPAC will continue to serve as the rallying point of the business community through the 2012 and 2014 election cycles. 199

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BCA F E D E R A L A D V O C A C Y 2011-2012

hile much of this book is dedicated to our work at the State House in Montgomery, BCA is the state’s most powerful and effective advocate for business and industry in the halls of Congress. Some of BCA’s federal advocacy during the past year is listed below:

Reauthorization of the Export-Import Bank 3 • The Ex-Im Bank, which dates back to the Roosevelt administration, provides loans and other support for both large and small businesses to sell their products outside of the United States. These loans are generally considered to be more risky due to the volatility of the overseas marketplace. • Without this legislation, the bank’s authority would have expired at the end of May, and U.S. companies, small and large, would have faced a serious disadvantage in foreign markets, threatening thousands of American jobs that depend on its crucial export financing. • March 6, 2012 – The Business Council of Alabama sent a letter to each member of Alabama’s congressional delegation urging their support for reauthorizing the Ex-Im prior to its charter expiring. • March 28, 2012 - The Business Council of Alabama joined more than 300 companies and associations in signing a letter, spearheaded by the National Association of Manufacturers, to congressional leadership urging the House and Senate to bring Ex-Im Bank reauthorization to a vote. • May 7, 2012 - The Business Council of Alabama and more than 180 chambers of commerce signed a letter spearheaded by the U.S. Chamber of Commerce urging the reauthorization of the Ex-Im Bank. The letter was delivered to every member of Congress. • May 11, 2012 - The BCA, along with associations and manufacturers from across the country, joined the National Association of Manufacturers in a national print ad urging Congress to reauthorize the Ex-Im Bank. The ad appeared in Politico, National Journal, CQ Today and Human Events. • President Obama signed the reauthorizing legislation on May 30, 2012.

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Blocking EPA’s Utility MACT rule 3 • The Utility MACT rule would impose — by regulation — the most stringent and costly clean air regulation that electric generation cooperatives and investorowned utilities have ever faced, resulting in higher energy prices and forcing manufacturers to shed approximately 200,000 jobs. • Under the EPA’s Utility MACT rule, the Mercury and Air Toxics Standards, coal- and oil-fired generating units must install and operate “maximum achievable control technology,” or MACT, by 2015 to prevent 90 percent of the sector’s mercury emissions. • September 6, 2011 - The Business Council of Alabama joined nearly 300 companies and associations, including the National Association of Manufacturers, in sending a letter to House and Senate leadership outlining broad support for the EPA Regulatory Relief Act of 2011 (H.R. 2250 and S. 1392). This bipartisan legislation addresses business and manufacturers’ serious concerns regarding the Environmental Protection Agency’s (EPA) Boiler MACT rules, which place hundreds of thousands of jobs at risk, by providing facilities additional time to comply with the complex requirements of the rules and also providing direction and support for the EPA to use its discretion to add flexibility and make the rules achievable. • December 9, 2011 - The Business Council of Alabama joined more than 130 organizations from across the country in writing President Obama regarding the Utility MACT regulation. The letter states that the Utility MACT rule “could cause significant electricity reliability constraints that would have a ripple effect through our fragile economy, hurting businesses of all sizes.” • June 8, 2012 – The Business Council of Alabama signed a letter, spearheaded by the National Association of Manufacturers, along with 258 companies and associations from across the country, urging senators to support S.J. Res. 37, Resolution of Disapproval on the EPA’s Utility MACT (Maximum Achievable Control Technology) rule. S.J. Res. 37 would repeal the rule and allow the EPA to propose a more reasonable mercury regulation for power plants. Passage of a multi-year transportation reauthorization bill 3 • The transportation and infrastructure reauthorization bill establishes the funding mechanism through which the federal government pays its share of the cost of transportation repair and construction projects carried out by state and local governments.

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• January 25, 2012 - In an open letter to Congress, the Business Council of Alabama joined more than 1,000 companies, organizations and chambers of commerce from all 50 states in calling for passage of a multi-year highway and transit bill this spring. • January 2012 – The Business Council of Alabama joined the Americans for Transportation Mobility Coalition, spearheaded by the U.S. Chamber of Commerce. The coalition is a nationwide effort by business, labor, transportation organizations and concerned citizens to advocate for improved and increased federal investment in the nation’s aging and overburdened transportation system. • June 29, 2012 - Following a four-month stalemate, congressional negotiators reached an agreement to extend federal highway funding for two years. President Obama signed the reauthorizing legislation on July 6, 2012. Passage of the RESTORE Act 3 • The RESTORE Act would establish the Gulf Coast Restoration Trust Fund, which would receive 80 percent of all administrative, civil and criminal penalties paid by responsible parties in connection with the Deepwater Horizon oil spill, together with any other appropriated funds. • May 29, 2012 - The Business Council of Alabama as part of a coalition of 115 leaders of Gulf Coast cities, municipalities, economic development organizations and chambers of commerce sent a joint letter to Congress urging passage of the RESTORE Act in conjunction with the finalization of the transportation reauthorization bill now pending. • The letter stated, “The economic and ecological restoration called for under the RESTORE Act will create needed private sector jobs while reclaiming vital natural and commercial assets that are unique to the Gulf Coast and critically important to the economic and environmental health of the nation.” • Both the House and Senate approved versions of the RESTORE Act, and the conference committee on the transportation reauthorization bill included it in the final transportation reauthorization law signed into law by the president on July 6, 2012. Passage of Fair Interstate Corporate Taxation Bill 3 • The Business Activity Tax Simplification Act, H.R. 1439, would set a uniform standard for state taxation of the income of non-resident companies, ending unfair, confusing and costly state corporate income taxation. If passed, the

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legislation would permit states to impose income-based taxes only on companies that have a physical presence in the taxing state. States would be prohibited from taxing the income of companies that solicit sales in the state. H.R. 1439 would not affect sales tax. • February 29, 2012 – The Business Council of Alabama joined more than 150 businesses, trade associations and taxpayer groups from across the country in sending a letter to House Speaker John Boehner and Democratic Leader Nancy Pelosi urging them to pass the Business Activity Tax Simplification Act. Passage of the Mobile Workforce State Income Tax Simplification Act 3 • November 16, 2011 - The Business Council of Alabama joined business and associations from across the country in writing a letter in support of the Mobile Workforce State Income Tax Fairness and Simplification Act, H.R. 1864. The letter, spearheaded by the Council on State Taxation (COST), was sent to the chairman of the House Judiciary Committee, Lamar Smith, as well as to Howard Coble, the chairman of the House Subcommittee on Courts, Commercial and Administrative Law. • As stated in the letter, “Every work day in our country, thousands of Americans travel outside their home state on business trips for temporary periods. Each state has its own set of requirements for filing non-resident individual income tax returns and commensurate rules for employer withholding on those employees. Most individuals are not aware of the patchwork of nonresident state income tax filing rules, and many employers are required to incur extraordinary expenses to comply with withholding requirements. …The Mobile Workforce State Income Tax Simplification Act of 2011 would establish fair, administrable and uniform rules to help ensure that the appropriate amount of tax is paid to state and local jurisdictions without placing undue burdens on employees and their employers.” • HR 1864 passed the House on May 15, 2012 and awaits consideration in the Senate. Reauthorization of the Workforce Investment Act 3 • The workforce skills gap has become an increasingly pressing issue for manufacturers, who cannot find qualified workers to fill positions. • The bill includes industry-recognized credentials as a common performance measure. • June 7, 2012 - The House Committee on Education and the Workforce marked up and passed H.R. 4297 by a vote of 23-15.

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Continuation of Gulf oil exploration 3 • The Bureau of Ocean Energy Management (BOEM) recently approved Shell’s exploration plan, one of the first approved following the lifting of the offshore drilling moratorium in October 2010; however, some environmental groups sued to halt the permit. The case is Defenders of Wildlife, et al. v. Bureau of Ocean Energy Management, et al. and Shell Gulf of Mexico, et al. • December 2011 - The Business Council of Alabama joined the U.S. Chamber of Commerce, the National Association of Manufacturers and 34 other industry groups in an amicus brief in support of an oil exploration permit for the Outer Continental Shelf (OCS) in the Gulf of Mexico. According to the brief, there is no legal basis for rejecting Shell’s exploration plan, which includes newly implemented safety measures, much less imposing a de facto moratorium on all further deepwater exploration and production by stopping or significantly delaying new approvals for deepwater exploration in the Gulf. Prevention of a Tax Hike on investment income 3 • April 9, 2012 – The Business Council of Alabama joined more than 87 trade associations and chambers of commerce in signing a letter, spearheaded by the U.S. Chamber of Commerce, sent to every member of Congress calling for their support of S. 1647 and H.R. 3091, “The Tax Hike Prevention and Business Certainty Act,” introduced by Sen. Michael Crapo (R-ID) and Rep. Peter Roskam (R-IL), respectively. • These bills would maintain the top capital gains and dividends tax rates at 15 percent and prevent a massive tax increase that would have detrimental impacts on investment and jobs in the United States. Unless Congress acts by the end of 2012, the tax rate for capital gains will increase from 15 percent to 20 percent and the dividend tax rate will more than double from 15 percent to 39.6 percent. In addition, beginning in 2013, investment income will be subject to an additional Medicare Hospital Insurance tax of 3.8 percent, raising the top rate on capital gains to 23.8 percent and on dividend income to 43.4 percent, resulting in one of the largest tax increases in U.S. history. Leaving politics out of federal contracting 3 • April 25, 2012 - The Business Council of Alabama joined a multi-industry coalition of 154 associations and chambers of commerce, led by the U.S. Chamber of Commerce, in writing a letter in support of H.R. 2008, the Keeping Politics Out of Federal Contracting Act of 2011.

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• As stated in the letter, “H.R. 2008 is offered in response to a draft Executive Order under consideration by the Obama Administration and, if enacted, would preclude the White House from forcing federal agencies to require entities to disclose their political spending — as well as that of their officers and directors — as a condition of participating in the federal procurement process. … The legislation would help ensure that political spending — or the lack thereof — continues to play no role in federal contracting decisions. The legislation reaffirms the principle, currently embodied in federal procurement laws, that the Executive Branch has an obligation to procure goods and services based on the best value for the American taxpayer, and not on political considerations. “

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BCA/P R O G R E S S PAC 2012 E N D O R S E D C A N D I D A T E S

n 2012, the board of directors of ProgressPAC announced the endorsements of the following state candidates:

Alabama Supreme Court Judge Tommy Bryan - Place 1 Justice Lyn Stuart - Place 2 Justice Glenn Murdock - Place 3 Justice Jim Main - Place 4 Alabama Court of Civil Appeals Judge Craig Pittman - Place 1 Judge Terri W. Thomas - Place 2 Judge Terry Moore - Place 3

Alabama Court of Criminal Appeals Judge Liles Burke - Place 2 Judge Michael Joiner - Place 3 Alabama Board of Education Tracy Roberts - District 1 Jeff Newman - District 7

In 2012, the board of directors of the Business Council of Alabama announced endorsements of the following federal candidates: United States House of Representatives Rep. Jo Bonner - District 1 Rep. Martha Roby - District 2 Rep. Mike Rogers - District 3 Rep. Robert Aderholt - District 4 Rep. Mo Brooks - District 5 Rep. Spencer Bachus - District 6 Rep. Terri Sewell – District 7

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T H E P A R T N E R S H I P : BCA, CCAA WO R K I N G TO G E T H E R O N B E H A L F O F B U S I N E S S

n 1937, as Alabama teetered on the brink of recovery from the Great Depression, representatives of the chambers of commerce from the leading cities of Alabama — Huntsville, Mobile, Dothan, Tuscaloosa, Anniston, Alexander City and Selma, along with utility and media representatives — met in Mobile to found what was originally known as The Alabama Association of Commercial Organizations. The intent of this group, as originally stated, was to “foster the commercial, industrial, and recreational welfare of the state…” This group of like-minded business and civic leaders maintained a loose association through the years, and in 1997, adopted the name Chamber of Commerce Association of Alabama (CCAA). In 1999, the volunteer leadership of CCAA saw the need to take CCAA from a volunteer-led organization to a professionally staffed group that would allow it to become more involved in events that would shape the future of Alabama’s business community. Ralph Stacy, former executive director of the Greenville Area Chamber of Commerce and past Chairman of CCAA, was named the CCAA’s first president and CEO and set about the task of bringing more than 120 local chambers across the state together to help form a true grassroots business network. In 2003, William J. Canary accepted the post of president and CEO of the Business Council of Alabama (BCA). Since its formation in 1985 by the merger of the Alabama Chamber of Commerce and the Associated Industries of Alabama, BCA had always maintained contact with CCAA and supported the efforts of local chambers. Canary saw the great potential that the more than 60,000 members of local chambers offered to the efforts of BCA in the halls of government and set in motion a plan to formalize the relationship of the two organizations. In October 2003, an historic agreement was signed linking the two through The Partnership. In the nine years following the formation of The Partnership, both groups have been able to find common ground on business issues that affect the men and women who make up Alabama’s business community. In addition to bringing local business leaders of all types together in the Leadership Exchange format, The Partnership maintains contact during the legislative session through a series of conference calls with key BCA staff, elected leaders and others involved in the political process to keep local chambers and their leadership up to date on business issues. Through the Capital Briefing publication, members of The Partnership receive a weekly update on the goings-on in Montgomery and Washington in a format that allows quick

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distribution to their local members if so desired. The Partnership has also coordinated trips to the State House for several chambers who wanted to visit with their local legislators. The mission of CCAA is “to build a better Alabama…through strong Chambers of Commerce.” The Partnership, anchored by BCA’s unwavering support, helps bring that mission to reality. That same spirit set forth in 1937 is still alive and well today in the form of The Partnership.

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T H E PA R T N E R S H I P : J E R E M Y A R T H U R TO HEAD C HAMBER OF COMMERCE ASSOCIATION OF ALABAMA April 9, 2012

he Board of Directors of the Chamber of Commerce Association of Alabama has named Jeremy Arthur, current president of the Prattville Chamber of Commerce, as its new executive director. Arthur will assume the position in midMay. “We are extremely pleased and fortunate to have a person with the unique blend of experience and professional ability that Jeremy Arthur brings to the executive directorship of the Chamber of Commerce Association of Alabama (CCAA),” said William J. Canary, CCAA board member, and president and CEO of the Business Council of Alabama. The BCA and the CCAA, through a unique relationship known as The Partnership, together represent the interests of some one million working Alabamians through BCA’s member companies and over 120 local chambers of commerce. “We have known and enjoyed working with Jeremy for the past eight years at the Prattville Chamber,” said Canary, “and we look forward to working even closer in our new partnership on all matters important to our state in his new capacity at CCAA.” Arthur brings several years of experience in chamber of commerce work to the CCAA job. In 2004, he was named executive vice president of the Prattville Chamber, and subsequently was named president of the organization that has more than 875 members in one of the fastest-growing areas of Alabama. Before joining the chamber, he was an outreach research assistant for the Economic Development Institute at Auburn University. He holds a bachelor’s degree in political science, a master’s degree in public administration, and is a doctoral candidate in public administration and public policy, all from Auburn. “I am excited about the new opportunity that awaits me,” said Arthur. “Under the leadership of CCAA Board Chairman Jan Wood and the entire CCAA Board of Directors, I look forward to helping achieve the CCAA’s goal of ‘building a better Alabama through strong chambers of commerce.’” Arthur is a member of several national organizations, including the board of directors of the Auburn Alumni Association, the American Society for Public Administration and the American Chamber of Commerce Executives. He was also elected vice-chairman to the U.S. Chamber of Commerce Board of Regents

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representing the Southeast Institute for Organization Management (IOM). He is an active member of numerous statewide organizations, including the board of directors of the CCAA and the Economic Development Association of Alabama, where he is currently serving on its Conference Committee.Â

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UPDATE: C H A N G E S T O A L A B A M A ’S I M M I G R A T I O N L A W

n Friday, May 18, 2012, Governor Bentley signed HB658, which became Act 2012-491. This Act makes significant changes to Alabama’s immigration law (HB56/Act 2011-535), which passed just one year ago. Several changes make compliance with the law less burdensome on businesses and employers, however, other changes make the penalties for noncompliance more harsh. The following changes are now in effect: • Sworn affidavits from contractors and subcontractors are no longer required as a condition for the award of any contract, grant or incentive by the state, county or municipal governments in Alabama. • Section 9 (doing business with the state or any political subdivision) is modified, and the prohibition on hiring any “unauthorized alien” is limited to employees “within the State of Alabama.” • Contractors with state, county or municipal governments are no longer required to obtain proof of enrollment in E-Verify by subcontractors, however, prime contractors will still be required to provide documentation of their enrollment in E-Verify as a condition for the award of a contract, grant or incentive as defined in Section 9. • The following clause must be in all state, county and municipal contracts: • “By signing this contract, the contracting parties affirm, for the duration of the agreement, that they will not violate federal immigration law or knowingly employ, hire for employment, or continue to employ an unauthorized alien within the state of Alabama. Furthermore, a contracting party found to be in violation of this provision shall be deemed in breach of the agreement and shall be responsible for all damages resulting therefrom.” • The definition of a contract in Section 9 has been modified: “a contract awarded by the state, any political subdivision thereof, or any state-funded entity that was competitively bid or would, if entered into by the state or an agency thereof, be required to be submitted to the Contract Review Permanent Legislative Oversight Committee.” • This language is intended to describe a category or type of contract — and not to only apply to contracts that are actually submitted to the State Legislature’s Contract Review Committee.

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• The type of contracts that must be submitted to the State Legislature’s Contract Review Committee are personal and professional services contracts (whether they are employment agreements or independent contractor agreements), unless the contracts are for insurance, are competitively bid, are entered into by a public corporation or authority, or are for less than $1,500. • The definition of BUSINESS ENTITY is modified to include only those “employing one or more persons.” One of the practical impacts of this change is that a sole proprietorship, which has no employees, is no longer required to enroll in E-verify. • STATE-FUNDED ENTITY is redefined to provide that “an entity that merely provides a service or a product to any governmental entity of the state or a political subdivision thereof, and receives compensation for the same, shall not be considered a state-funded entity.” This eliminated confusing language that may have rendered a private party that was paid pursuant to a government contract a “state-funded entity.” • SUBCONTRACTOR is redefined: “A person, business entity, or employer who is awarded a portion of an existing contract by a contractor, regardless of its tier.” This language is designed to eliminate “collateral” companies (for example, the company that provides coffee and soft drinks at the business’s headquarters) employed by a business from the definition of a “subcontractor.” • The right of a citizen or an alien lawfully present to bring a private action against an official or head of an agency to enforce federal IS SOME TEXT OR WORD MISSING HERE? of Alabama immigration law has been eliminated. Instead, a person must file a petition with the Attorney General (or appropriate local district attorney) requesting that he or she bring an action. • In the section that prohibits courts from enforcing contracts between a party and an alien unlawfully present, an exemption has been provided. This prohibition does not apply to contracts entered into prior to the effective date of the law, nor to contracts for legal services. • The definition of “public records transaction” has been modified and limited to applying for or renewing a motor vehicle license plate, a driver’s license or nondriver identification card, a business license, a commercial license or a professional license. • Proof of citizenship is only required for initial public records transaction for United States citizens and lawful permanent residents. Verification is not required for renewals.

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If you have any questions or would like more information regarding this legislation, please contact: Edward A. “Ted” Hosp Maynard, Cooper & Gale, P.C.

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FOR IMMEDIATE RELEASE: TUESDAY, AUGUST 23, 2011

BCA TA K E S F I R S T S T E P TO W A R D F I N A L I Z I N G 2012 L E G I S L A T I V E A G E N D A MONTGOMERY—The Business Council of Alabama took its first step toward finalizing its 2012 state legislative agenda with BCA committee members and legislative leaders during a two-day conference in Prattville last week. Known as “Committee Leadership Days,” the two-day event consisted of meetings with the members of BCA’s seven policy committees to discuss the previous legislative session and submit a draft agenda for the 2012 legislative session. BCA’s final legislative agenda will be submitted to the BCA governmental affairs committee in mid-October and is subject to approval later this year by the BCA board of directors. “The BCA has long worked toward accomplishing one stated goal — to provide Alabama’s business community an equal opportunity to make a case and seek support for legislation we support and programs we believe are important,” said William W. Brooke, chairman of the BCA Board of Directors and managing partner of Venture Capital for the Harbert Management Corporation. This year’s Committee Leadership Days coincided with the summer meeting of the Chamber of Commerce Association of Alabama, which allowed local chamber executives the opportunity to receive updates on issues the BCA will support in the next legislative session. Leaders from both the state House of Representatives and state Senate were also in attendance to provide an insider’s look at legislation passed last year and hear ideas for new pro-business legislation in 2012. House Speaker Mike Hubbard and Senate President Pro Tem Del Marsh addressed the group at breakfast on Thursday, while Lt. Gov. Kay Ivey and Alabama Development Office Director Greg Canfield delivered an update during a luncheon. “This is a great opportunity for legislative leaders to hear directly from BCA members about the job-creating policies we will be fighting for in 2012,” said Carl Jamison, second vice chairman of the BCA board of directors and shareholder in the firm Jamsion Money Farmer, P.C. “This was the first year we invited legislators to attend our committee meetings, and it provided a great opportunity to have an open dialogue on how to grow jobs in Alabama.”

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In addition to BCAâ&#x20AC;&#x2122;s Governmental Affairs Committee, the seven policy committees that met in Prattville were: Education and Workforce Preparedness, Environment and Energy, Health, Judicial and Legal Reform, Small Business, Tax and Fiscal Policy and Labor and Employment.

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FOR IMMEDIATE RELEASE: FRIDAY, OCTOBER 28, 2011

U.S. C H A M B E R H O N O R S BCA W I T H T H E 2011 O U T S T A N D I N G O R G A N I Z A T I O N A W A R D MONTGOMERY—The Business Council of Alabama received the 2011 Outstanding Organization Award by the U.S. Chamber Institute for Legal Reform for its continuing contributions to the legal reform movement in Alabama. “We’re thrilled to honor the Business Council of Alabama with our Outstanding Organization Award,” said Lisa Rickard, president of ILR. “The BCA has been a partner to ILR in our legal reform efforts for many years, and its work this year was instrumental to passage of important legislation that will make Alabama more competitive for businesses and job growth.” BCA Chairman William Brooke, managing partner for Harbert Management Corporation, was on hand to accept the award. “The legal reform movement in Alabama has been a decades long quest to strengthen the economy and help create jobs,” Brooke said following the award presentation. “This recognition is due to the support of the entire business community and most importantly those elected officials in Alabama who had the courage to support legal reform.” Those principally responsible for the passage of the legal reform bills in the 2011 legislative session were: Governor Robert Bentley, who signed the bills into law; Speaker of the House Mike Hubbard and Senate President Pro-Tempore Del Marsh; Judiciary Committee Chairs Sen. Cam Ward, Sen. Ben Brooks and Rep. Paul Demarco; and bill sponsors Sen. Clay Scofield, Rep. Wes Long, Rep. Greg Canfield, Rep. Ron Johnson and Rep. Steve McMillan. For almost two decades, tort reform was a priority of the BCA; however, it was not until the 2010 election of a pro-business legislature that tort reform became a reality. The annual Legal Reform Awards honor individuals and organizations whose work has contributed to the efforts to make America’s civil justice system simpler, fairer and faster for everyone. The BCA is the exclusive affiliate for the U.S. Chamber of Commerce in Alabama.

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The Business Council of Alabama is Alabamaâ&#x20AC;&#x2122;s foremost voice for business. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabamaâ&#x20AC;&#x2122;s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

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FOR IMMEDIATE RELEASE: MONDAY, FEBRUARY 6, 2012

BCA A D V O C A T I N G F O R J O B C R E A T I O N , E D U C A T I O N R E F O R M I N 2012 S E S S I O N MONTGOMERY—As the Alabama Legislature convenes in Montgomery this week for the 2012 session, the Business Council of Alabama is prepared to move forward in supporting legislation that will help existing industries hire, reduce regulatory burdens on business, and fundamentally reform education. Following approval of the 2012 BCA State Legislative Agenda by the board of directors last December, the BCA presented a clear message: Support policies that will boost private sector job growth and create a world-class education system. “When existing businesses are successful and hire more people, the education trust fund grows, and we are able to provide more opportunities for our students,” said BCA President and CEO William J. Canary. “We must also support education policies that allow for new and innovative ways to teach our children. The status quo is no longer an option. Our children and teachers deserve better.” Legislative leaders last November presented an ambitious job creation agenda that would allow the governor and the Alabama Development Office to use new incentives not only to recruit new companies to Alabama, but to continue to help those already doing business in the state. Another proposal, the Regulatory Reform Act, will require state agencies to prepare an economic impact analysis as well as a regulatory flexibility analysis before the adoption of any regulation that may adversely impact small businesses. As businesses are the number one consumer of the product of education, the BCA will aggressively advocate for much needed education reforms. Providing local school districts with increased flexibility and giving parents more options to educate their children will be top priorities. The BCA will support initiatives to give parents more education options when a school is under-performing or operating in underserved areas of the state. Since Alabama’s new immigration law was introduced in the 2011 legislative session, BCA has worked to lead the effort to clarify the law so that Alabama employers, who employ legal and documented workers, can fully comply without being

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overburdened with the bureaucratic process and without fear of unintentionally violating the law. In setting up an Alabama business roundtable, the BCA brought together business leaders from across the state to meet with legislative leaders to address any unnecessary penalties for those businesses that have always been committed to following the law. “During the last legislative session, many pro-business items that have been a part of our legislative agenda for several years were enacted,” said Anita L. Archie, BCA senior vice president for intergovernmental affairs. “We are excited that Governor Bentley and the legislative leadership will keep the momentum this session by promoting job creation and education reform issues. BCA will continue to lead the effort in finding solutions to improve Alabama’s economy.” The Business Council of Alabama is Alabama’s foremost voice for business. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

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FOR IMMEDIATE RELEASE: TUESDAY, FEBRUARY 21, 2012

BCA S T A T E M E N T

PS E U D O E P H E D R I N E B I L L (HB 88)

MONTGOMERY— BCA President and CEO William J. Canary released the following statement today regarding HB 88, more commonly referred to as the Pseudoephedrine Bill: “The proposed legislation (HB 88) would require individuals to obtain a prescription for products containing common cold and allergy remedies such as pseudoephedrine, ephedrine and phenylpropamine, in an effort to combat the manufacturing of methamphetamine. While the BCA recognizes the critical need to eliminate meth labs in Alabama, requiring all employees to take time off work to visit their physician to obtain a prescription for common cold and allergy medications would result in increased employee health care costs and reduced worker productivity. We look forward to supporting legislation being proposed and introduced by Sen. Holtzclaw and Rep. Galliher that will contain health care costs while ensuring we all engage in the fight against meth production in Alabama.” The Business Council of Alabama is Alabama’s foremost voice for business. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

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FOR IMMEDIATE RELEASE: WEDNESDAY, MARCH 14, 2012

BCA S T A T E M E N T I N S U P P O R T O F E D U C A T I O N O P T I O N S A C T O F 2012 MONTGOMERY—In keeping with the Business Council of Alabama’s commitment to establishing and working with an Alabama business-education alliance, BCA President and CEO William J. Canary released the following statement this morning after Gov. Robert Bentley, Speaker of the House Mike Hubbard and Senate President Pro Tem Del Marsh announced their education initiative, the Education Options Act of 2012: “Education options and flexibility equal more success for our children. The Business Council of Alabama is proud to support this historic education package that finally will provide parents more options to improving the education of their children while at the same time allow teachers more flexibility for classroom instruction. Businesses are the number one consumer of the product education, and when Alabama adopts this legislation, the dropout rate will decline, more students will be prepared to enter the workforce, and our economy will grow.” The Business Council of Alabama is Alabama’s foremost voice for business. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

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FOR IMMEDIATE RELEASE: WEDNESDAY, APRIL 11, 2012

BCA I S S U E S S T A T E M E N T O N PRO P O S E D C H A N GE S T O I M M I G R A T I O N L A W MONTGOMERY—The Business Council of Alabama, along with other business groups and chambers of commerce, has continued to stress that Alabama’s immigration law needs to be clear and unambiguous so that businesses can easily comply with the law and focus on what they do best: creating jobs. BCA President and CEO William J. Canary released the following statement today after the start of a public hearing on HB 658, which would change Alabama’s immigration law previously known as HB 56: “The intent of the immigration law was never to make it difficult for businesses to comply and burden businesses with unnecessary red tape. These changes, while not perfect, are a much-needed step in the right direction and will allow businesses to clearly comply with both federal and state immigration law. We will work actively for the passage of HB 658, urging our member companies to voice support for these necessary changes in the law.” The Business Council of Alabama is Alabama’s foremost voice for business. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

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FOR IMMEDIATE RELEASE: FRIDAY, MAY 18, 2012

BCA A P P L A U D S G O V E R N O R F O R S I G N I N G IMMIG RATION BILL “We are grateful Gov. Bentley has signed HB 658. The intent of the immigration law was never to make it difficult for businesses to comply and burden businesses with unnecessary red tape. These changes, while not perfect, are a much-needed step in the right direction and will allow businesses to clearly comply with both federal and state immigration law. We actively worked for passage of HB 658 in its final form, urging our member companies to voice support for these necessary changes in the law,” said BCA President and CEO William J. Canary. The Business Council of Alabama is Alabama’s foremost voice for business. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

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COALITION AIMS

SCRAP METAL T HEFT

By William Canary

hen most people hear of metal theft, images of ransacked air conditioner units typically come to mind. However, with the price of scrap metal skyrocketing and the economy still fragile, criminals are becoming increasingly creative — and daring — in their attempts to steal metal and make quick money by selling the items to scrap yards. Across the country, incidents of copper wire being stripped from utility poles, interrupting phone and Internet service and rendering traffic signals and lights dark, are all too common. Here in Alabama, copper thieves burned down the city of Birmingham’s Christmas tree in 2010. Students across Alabama have endured sweltering classrooms after copper was stripped from air conditioning equipment at their schools. Last summer, more than 165 pounds of copper AT&T telephone wiring in Birmingham was stolen in one week, helping Alabama to earn the dubious distinction as the nation’s leader in the theft of copper telephone cable. From churches and schools to hospitals, cemeteries, farms and even our own homes, metal theft affects all of us. It is a growing threat to public safety, our quality of life and electricity delivery and reliability. Over the past several years, theft of metals such as steel, copper and aluminum has grown at an alarming rate, costing the national economy $1 billion per year. According to the Department of Energy, scrap copper in 2011 sold for five times the amount it went for in 2002, making it an attractive target, especially during these difficult economic times. To combat this growing epidemic, the Business Council of Alabama’s Manufacturing Advocacy Council, a select group of BCA members representing Alabama’s manufacturing industry, has made passage of a stronger metal theft law in Alabama a priority. The BCA’s Manufacturing Advocacy Council is proud to be part of a broad coalition of business and manufacturing leaders, energy providers, law enforcement, municipalities, churches, scrap recyclers and lawmakers who have come together over the last several months to put forward tough new legislation to further strengthen Alabama’s current metal theft laws. The proposed bill would tightly restrict the purchase of scrap metal in Alabama by reducing the amounts of cash purchases to less than $50 for most metals. The legislation would limit the hours for scrap buyers to make purchases, require recyclers to submit an electronic record of each purchase on the day of the transaction

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and establish proof of ownership to purchase certain metal property. In addition, the bill would increase penalties if the crime puts the health and safety of the public, property ownersâ&#x20AC;&#x2122; employees, first responders, law enforcement or utility workers in imminent danger. The scrap recycling industry is a critical component of the U.S. economy, a key link in the manufacturing supply chain and a leader in job creation. The simple truth is this: Metal theft is not a problem exclusive to the scrap recycling industry or law enforcement. It is a threat to all Alabamians. We are encouraged that in the upcoming session the Alabama Legislature this package of tougher restrictions and penalties for metal theft will be considered. William J. Canary is president and CEO of the Business Council of Alabama. The BCA is a non-partisan statewide business association representing the interests and concerns of nearly one million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. BCA is Alabamaâ&#x20AC;&#x2122;s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

231 A publication of the Business Council of Alabama

Volume 2 | Issue 6

The Business

AD VOC ATE

William W. Brooke

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BCA Chairman Looks Beyond Himself to Serve Others By Lenore Reese Vickrey

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Will and Maggie Brooke often travel overseas to countries such as Cambodia to work in cross-cultural ministry opportunities

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Will Brooke has always dreamed of a better Alabama. At BCA he has led a movement that has awakened our entire state. When I think about Will Brookeâ&#x20AC;&#x2122;s leadership, I am reminded of something I once heard about another great leader of our time: â&#x20AC;&#x2DC;Excellence is never an accident; it is the result of high intention, sincere effort, intelligent direction, skillful execution and the vision to see obstacles as opportunities.â&#x20AC;&#x2122; â&#x20AC;&#x201D; William Canary, BCA President and CEO The Business Advocate / 3

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BCA honors officials and spotlights business-education alliance Retired general inspires with â&#x20AC;&#x153;plywood leadershipâ&#x20AC;? remarks at Governmental Affairs Conference

BCA honored Gov. Robert Bentley, below, with its 2011 Spirit of Leadership Award at its Governmental Affairs Conference in Pt. Clear. Senate President Pro Tem Del Marsh and House Speaker Mike Hubbard, left, were given the Advocate for Progress Leadership Award, and several legislators, top, were named Advocates for Progress for their pro-business stance during the 2011 legislative session. Former U.S. Secretary of State Margaret Spellings, right, commended BCA for beginning a business-education alliance, telling the audience of nearly 400 persons, â&#x20AC;&#x153;The folks who are moving the needle and making a difference are the ones who have such an alliance.â&#x20AC;? BCA Senior Vice President Anita Archie, below right, spoke at the Sunday morning inspirational service. Keynote speaker, bottom left, was retired Army General Stan McChrystal, who inspired the audience with his remarks on â&#x20AC;&#x153;plywood leadershipâ&#x20AC;?. See more conference photos and coverage at www.bcatoday.org.

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4 / The Business Advocate

235 A publication of the Business Council of Alabama

Volume 2 | Issue 7

The Business

AD VOC ATE

Former President George W. Bush talks about the principles that guided his presidency at BCAâ&#x20AC;&#x2122;s Chairmanâ&#x20AC;&#x2122;s Dinner.

Nationâ&#x20AC;&#x2122;s 43rd President Headlines Annual BCA Chairmanâ&#x20AC;&#x2122;s Dinner By Lenore Reese Vickrey

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Former President George W. Bush speaks before a packed house at the Sheraton Birmingham, site of BCAâ&#x20AC;&#x2122;s annual Chairmanâ&#x20AC;&#x2122;s Dinner, in September.

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A d v o c a t e BCA Chairman Will Brooke asks the former president questions following his address to the crowd. “It’s no sacrifice to serve a nation you love,” he said. “It’s an honor.”

BCA President and CEO William Canary welcomes guests.

BCA officers and select members chat with the former President in a private roundtable meeting before the evening’s festivities.

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BCA Senior Vice President Anita Archie recognizes elected officials.

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52 / Business Alabama November 2011

239 A publication of the Business Council of Alabama

Volume 1 | Issue 2

The m a nufact uri ng

A D V O C AT E

BCAâ&#x20AC;&#x2122;s Manufacturing Advocacy Council Visits the NAM, Briefs Congressional Delegation

By Nancy Wall Hewston

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By Nancy Wall Hewston

The NAMâ&#x20AC;&#x2122;s President and CEO Jay Timmons speaks to BCAâ&#x20AC;&#x2122;s Manufacturing Advocacy Council members after receiving the BCAâ&#x20AC;&#x2122;s 2011 â&#x20AC;&#x153;Building a Better Alabamaâ&#x20AC;? award, which was presented by House Speaker Mike Hubbard. BCA 2nd Vice Chair Carl Jamison, BCA Federal Affairs Committee Chair Suzanne Respess and MAC member Denson Henry look on.

Published in Business Alabama

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The Manufacturing Advocate / 1

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Leading the Charge for Manufacturing in Alabama

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After he was presented the 2011 Gov. Bob Riley “Building a Better Alabama” award, the NAM’s president and CEO Jay Timmons (center) was joined by (from left) BCA 2nd Vice Chairman Carl Jamison, BCA 1st Vice Chairman Terry Kellogg, House Speaker Mike Hubbard, and BCA President and CEO William J. Canary.

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Published in Business Alabama

241 T h e

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(From left) Ronnie Boles, Ray Perez, Carl Jamison, Speaker Mike Hubbard and Denson Henry visit with U.S. Rep. Martha Roby in the U.S. Capitol.

U.S. Rep. Terri Sewell met with members of the MAC in the U.S. Capitol. Pictured (l to r) are: Congresswoman Sewell, MAC co-chair Ronnie Boles, Sewell’s chief of staff, Nichole Reynolds, and BCA Senior Vice President for Intergovernmental Affairs, Advocacy and Communications/Legal Advisor Anita L. Archie.

Jim Proctor, Speaker Mike Hubbard, Terry Kellogg, Carl Jamison, Suzanne Respess, Dick Anderson, and U.S. Reps. Robert Aderholt and Martha Roby listen as U.S. Rep. Jo Bonner updates MAC members on what is happening in Congress.

BCA President and CEO William J. Canary and MAC member Denson Henry listen as U.S. Sen. Jeff Sessions visits with BCA’s MAC members in the U.S. Capitol.

U.S. Reps. Mike Rogers and Jo Bonner briefed the MAC delegation. Also pictured from left: Mike Sharp, legislative director for Bonner, Stephen Davis, National Security Advisor for U.S. Rep. Mo Brooks, and Suzanne Respess, chair of BCA’s Federal Affairs Committee.

Published in Business Alabama

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The Manufacturing Advocate / 3

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TOP LEFT: MAC co-chair Doug Mannion of Rheem Water Heating in Montgomery chats with BCA Senior Vice President for Intergovernmental Affairs, Advocacy and Communications/Legal Advisor Anita L. Archie. TOP RIGHT: BCA President and CEO William J. Canary visits with Jay Timmons, president and CEO of the NAM in Washington. RIGHT: Right: U.S. Reps. Robert Aderholt and Martha Roby as well as U.S. Sen. Jeff Sessions visit with members of the MAC in the U.S. Capitol. BOTTOM LEFT: BCA 2nd Vice Chair Carl Jamison (left) and MAC member Dick Anderson listen to policy briefings by several NAM experts at their headquarters in Washington D.C. MIDDLE LEFT: Jay Timmons, president and CEO of the NAM, talks with Ronnie Boles, MAC co-chair and board member of the NAM.

BCAâ&#x20AC;&#x2122;s Manufacturing Advocacy Council Ronnie Boles, co-chairman

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Published in Business Alabama

243 A publication of the Business Council of Alabama

Volume 3 | Issue 1

The Business

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BCA Elects 2012 Officers, Board; Outgoing Chairman Cautions Group to Stay on Its Toes

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9L[\YUPUN [V [OL )*( IVHYK HYL! Mobile/Baldwin District: Cathy Anderson-Giles, Owen Bailey, Joseph Busta, Carol Gordy, Winthrop Hallett, Sheila Hodges, Erik Johnsen, Robert â&#x20AC;&#x153;Bubbaâ&#x20AC;? Lee, Harris Morrissette, Joe Rella, Sandy Stimpson, Charlie Story, Donna Watts, J.M. â&#x20AC;&#x153;Margieâ&#x20AC;? Wilcox, Cheryl Smiley Williams. Selma/Southwest Alabama District: Denson Henry, Frances Turner. Montgomery Area District: Bill Barranco, Fred Blackwell, Steve Cawood, Frank Filgo, Randall George, Jack Hawkins, Mark Hope, Horace Horn, Doug Mannion, Cameron Martindale, Caroline Novak, Russ Tyner, J. Cameron West, Jan Wood, Alan Worrell. Auburn/East Alabama District: Paul Cocker, Ab Conner, Susan Foy, Eddy Kilman, Robert Powers, Lolly Steiner, John Russell Thomas. Dothan/Southeast Alabama District: Bill Brunson, George Flowers, Charles Nailen, Steve Roy. Tuscaloosa/Jasper District: Carl Jamison, Bryan Kindred, Greg Leikvold, Linda Lewis, Tim Parker, Markus Schaefer.

Birmingham Area District: Freda Bacon, Eason Balch, William Brooke, Terrance Brown, Robert Campbell, Karen Carter, Shane Clanton, William Dow, Garry Neil Drummond, Fournier Gale, Brian Hilson, Terry Kellogg, Debbie Long, Douglas Markham, Fred McCallum, Mary Sue McClurkin, Charles McCrary, Jeff Miller, Bill Morton, Ron Perkins, Greg Powell, James Proctor, Suzanne Respess, Van Richey, Walter Scheller, Stephen Still, Michael Thompson, Donta Wilson. Anniston/Gadsden District: Dick Anderson, Gregory Brown, Patricia King, Tim McCartney, Ray Perez. Huntsville Area District: Ronnie Boles, Jim Bolte, Philip Dotts, Ken Tucker, Rick Roden. Decatur/Cullman District: Jim Fincher, Kirk Mancer, Donald Morgan, John Seymour. Shoals/Northwest Alabama District: Martin Abroms, Steve Holt, David Muhlendorf.

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Magic Moments recipient of BCA holiday gift

BCA Chairman Will Brooke asks the former president questions following his address to the crowd. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s ,Q NHHSLQJ ZLWK LWV DQQXDO WUDGLWLRQ no sacrifice to serve a nation you love,â&#x20AC;? he said. WKH %&$ GRQDWHG PRQH\ SUHYLRXVO\ VSHQW â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s an honor.â&#x20AC;?

Pam Jones of Magic Moments accepts check from BCA Chairman Will Brooke

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John Seymour, Rick Roden and Susan Foy visit before BCA-CCAA joint meeting; Mark Wnuk and Lynn Cox of the Montgomery Regional Airport and Jeremy Arthur, president of the Prattville Area Chamber of Commerce.

January 2012 Business Alabama / 61

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Board members taking BCA to â&#x20AC;&#x153;Next Levelâ&#x20AC;?

Harris Morrissette, China Doll Rice and Beans; Steve Still, Maynard, Cooper & Gale P.C.; Ron Perkins, Doozer Software; Greg Powell, fi-Plan Partners; Charles Nailen, BBG Specialty Foods/ Taco Bell; Dick Anderson, Huron Valley Steel; Owen Bailey, USA Childrenâ&#x20AC;&#x2122;s and Womenâ&#x20AC;&#x2122;s Hospital; Denson Henry, Henry Brick Company; Sandy Stimpson, Scotch & Gulf Lumber Those not pictured: Doug Mannion, Rheem Water Heating; Bob Powers, Eufaula Agency Inc.

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Volume 3 | Issue 4

The Business

A D VOC ATE House Speaker Mike Hubbard and legislators discuss key legislation that passed during the 2012 session, which he termed a “major success.”

2012 Session Yields Positive Legislation for Business

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Marty Abroms, chairman of BCAâ&#x20AC;&#x2122;s Tax and Fiscal Policy Committee, addresses legislative committee

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255 A publication of the Business Council of Alabama

Volume 2 | Issue 1

T he m an ufa ctur i ng

A D V O C AT E

BCA, ATN Honor Alabamaâ&#x20AC;&#x2122;s 2012 Manufacturers of the Year Celebrating Alabamaâ&#x20AC;&#x2122;s 2012 Manufacturers of the Year are (from left): William Canary, BCA president and CEO; Michael Bailey, ATN president; Anita Archie, BCA senior vice president of intergovernmental affairs, advocacy and communications/legal advisor; Dee Dee Bonner, Austal manager of state legislative affairs, events and protocol; Donald Keeler, Austal vice president of human resources; David Hendrixson, Daikin America vice president and plant manager; Emmanuel Boullay, plant manager for Cascades Sonocoâ&#x20AC;&#x2122;s Birmingham operations; Steven Marimberga, quality manager for Cascades Sonoco; and Carl Jamison, BCA 1st vice chairman.

Alabama Attorney General Luther Strange delivered this yearâ&#x20AC;&#x2122;s keynote address.

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Best of the BEST Award Davidson High School, Mobile 7KH %(67 5RERWLFV ,QF LV GHVLJQHG WR H[FLWH DQG LQVSLUH RXU VWXGHQWV DERXW HQJLQHHULQJ VFLHQFH DQG WHFKQRORJ\ FD UHHUV WKURXJK SDUWLFLSDWLRQ LQ D VSRUWV OLNH FRPSHWLWLRQ 7KLV QRQ SUR¿W YROXQ WHHU EDVHG SURJUDP LV KHDGTXDUWHUHG DW $XEXUQ 8QLYHUVLW\ DQG 'DYLGVRQ +LJK 6FKRRO ZDV WKH KLJKHVW DFKLHYLQJ VFKRRO LQ WKH VWDWH GXULQJ WKH %(67 FRP SHWLWLRQV

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1 1. More than 225 people attended this year’s Manufacturer of the Year Awards luncheon. 2. The 2012 Governor Bob Riley “Building a Better Alabama” Award recipient is U.S. Rep. Jo Bonner (R-Mobile). Due to scheduled votes in Washington, Congressman Bonner accepted the award via video from the U.S. Capitol. Pictured: Carl Jamison, BCA 1st vice chair, Anita Archie, BCA senior vice president, and William Canary, BCA president and CEO, present Eliska Morgan, Congressman Bonner’s deputy chief of staff, with the award. 3. The Business Council of Alabama acknowledged BCA member company, Alabama Steel Supply, on its 100th year. The Centennial Award recognizes those companies that have achieved this great milestone of creating and sustaining jobs for generations of Alabama families. BCA’s Anita Archie and William Canary present Alabama Steel Supply’s Marc Labovitz and Jerald Labovitz with the 2012 Centennial Award.

4. BCA’s 1st Vice Chair Carl Jamison presented Rheem Manufacturing’s Peter Reynolds with the 2012 Partnership Award, which recognizes excellence in manufacturing, exemplary leadership in service to community, job creation and being an outstanding example of a corporate steward throughout Alabama. With three facilities in Montgomery, Rheem is one of the region’s largest manufacturers.

5. Students from Mobile’s Davidson High School were recognized for achieving the highest in the 2011 Alabama BEST Robotics competitions. The BEST Robotics Inc. is designed to excite and inspire students about engineering, science and technology careers through participation in a sports-like competition. Pictured are (l to r): Michael Bailey, ATN president; William Canary, BCA president and CEO, George Blanks, executive director of BEST Robotics, Inc.; Anita Archie, BCA senior vice president of intergovernmental affairs, advocacy and communications/legal advisor; Justin Poiroux, BEST student; Lucas Donivan, BEST student; Rohan Palanki, BEST student; Zack Brewer, DHS teacher; Mike Fletcher, DHS teacher; Delaney Thull, BEST student; Carl Jamison, BCA 1st vice chair; Jenny Parker, DHS teacher; and Robin Fenton, Jubilee BEST Robotics hub director.

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BCA’s Manufacturing Advocacy Council Ronnie Boles, co-chairman General & Automotive Machine Shop Huntsville

Mac McBride Steris Corporation Montgomery

Doug Mannion Rheem Water Heating Montgomery

Joe Pampinto Wise Alloys, LLC Muscle Shoals

Dick Anderson Huron Valley Steel Corporation Anniston

Ray Perez Honda Manufacturing of Alabama, LLC Lincoln

George Flowers Cox Swimming Pools Dothan

James Proctor II McWane, Inc. Birmingham

Denson Henry Henry Brick Company Selma

Ken Tucker The Boeing Company Huntsville

Greg Leikvold BF Goodrich Tire Manufacturing Tuscaloosa

Barry Whatley Craftmaster Printers, Inc. Auburn

Ex Officio Members W. Michael Bailey President Alabama Technology Network Mark Brazeal President Alabama Automotive Manufacturers Association Jim Byard Director Alabama Department of Economic and Community Affairs Ed Castile Director Alabama Industrial Development Training Institute Susan Price Interim Chancellor Alabama Community College System Jeff Thompson Executive Director Alabama Aerospace Industry Association

Left: BEST Robotics students Justin Poiroux and Lucas Donivan demonstrate Davidson High School’s winning robot from the 2011 BEST Robotics competitions as their teacher Mike Fletcher discusses the program with the BCA’s Manufacturing Advocacy Council at the June meeting. Above: MAC members Ken Tucker of The Boeing Company, Barry Whatley of Craftmaster Printers, Inc., Ray Perez of Honda Manufacturing of Alabama, LLC, Ed Castile, director of the Alabama Industrial Development Training Institute, Michael Bailey, ATN president, Dick Anderson of Huron Valley Steel Corp., and Mark Brazeal, president of the Alabama Automotive Manufacturers Association, were in attendance at the June 2012 meeting of BCA’s Manufacturing Advocacy Council. 4 / 7 K H P D Q X IDF W X U L Q J $ GY R F DW H

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2012 Large Manufacturer of the Year

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Above: Donald Keeler, Austal USA vice president of human resources, accepted the 2012 Large Manufacturer of the Year Award on behalf of Austal USA. Alabama Attorney General Luther Strange, ATN President Michael Bailey, representing the 2011 Large Manufacturer of the Year Hyundai Motor Manufacturing Alabama, Hyundaiâ&#x20AC;&#x2122;s Vice President of Production Ashley Frye, and BCA President and CEO William Canary presented the award.

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2012 Medium Manufacturer of the Year

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Daikin Americaâ&#x20AC;&#x2122;s David Hendrixson, vice president and plant manager (center with award) accepted the 2012 Medium Manufacturer of the Year on behalf of Daikin America. Also pictured (l to r) are: William Canary, BCA president and CEO; Michael Bailey, ATN president; Val Ray, Dakin America director of operations, Forrest Keith, Daikin America community relations and general affairs manager; Anita Archie, BCA senior vice president of intergovernmental affairs, advocacy and communications/legal advisor; and Carl Jamison, BCA 1st vice chair.

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Sen. Trip Pittman addresses the Tax and Fiscal Policy Committee; below, Committee Chairman Marty Abroms discusses the agenda as BCA staff member Victor Vernon looks on.

2012 Small Manufacturer of the Year

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Steven Marimberga (second from right), quality manager for Cascades Sonoco, and Emmanuel Boullay (far right), plant manager for Cascades Sonocoâ&#x20AC;&#x2122;s Birmingham operations, accepted the 2012 Small Manufacturer of the Year Award on behalf of Cascades Sonoco. BCA President and CEO William Canary, Curtis Lewey of Applied Chemical Technology, the 2011 Small Manufacturer of the Year, ATN President Michael Bailey and Alabama Attorney General Luther Strange presented the award.

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I N D EX A A.J. McCampbell 98 Ab Conner 244 Advocate for progress Leadership award 97 Affordable Care Act (ACA) 128, 129,130,156, Aircraft 10, 67, 90, 111, 190, 255 Alabama Administrative Procedures Act 132 Alabama Automotive Manufacturers Association (also AAMA) 258 Alabama Cable Telecommunications Association 66, 76 Alabama Community College System 242, 258 Alabama Council on the Arts 35 Alabama Criminal Justice Information Center 43, 177, 188 Alabama Data Processing Center Economic Incentive Enhancement Act 93 Alabama Democratic Conference 28 Alabama Department of Commerce 10 Alabama Department of Economic and Community Affairs (also ADECA) 158 Alabama Department of Environmental Management (also ADEM) 57 Alabama Department of Homeland Security 26 Alabama Department of Postsecondary Education 56

Alabama Department of Public Safety 4 Alabama Department of Revenue 61, 110, 118, 154, 165, 186-7, 189 Alabama Department of Transportation (ALDOT) 69 Alabama Development Office 2, 9-11, 39-40, 77, 93, 218, 222 Alabama Economic Alliance 3 Alabama Education Association 12, 27, 41, 85, 87, 232 Alabama Environmental Management Commission 92 Alabama Ethics Commission 157 Alabama Health Insurance Exchange 156 Alabama Industrial Development Training Institute (also AIDT) 242, 258 Alabama Job Creation and Retention Act 9, 19, 39, 78 Alabama Math, Science and Technology Initiative (AMSTI) 42 Alabama Power iv, 41, 98 Alabama Railway Association 66, 76 Alabama Reading Initiative (ARI) 5, 42, 56 Alabama Retail Association 61, 66, 76, 110, 118, 154, 165, 187 Alabama River Alliance 143 Alabama Roadbuilders Association 189 Alabama School Board Association 127

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Alabama School Readiness Alliance 51 Alabama School Superintendents Association 87 Alabama Society of Certified Public Accountants 66, 76 Alabama State Board of Education 56,87,152,174, Alabama State Board of Pharmacy 47 Alabama Steel Supply 256-7 Alabama Tax Appeals Commission (also ATAC) 46, 61 Alabama Taxpayersâ&#x20AC;&#x2122; Bill of Rights II 61 Alabama Technology Network (also ATN) 255 Alabama Trucking Association 66, 76 Alan Baker 10, 20, 194 Alan Boothe 143 Alan Harper 20 Alan Worrell 244 Albert Garrett 244 Allen Farley 20 Allen Treadaway 21 Alternative-minimum tax (AMT) 29 American Energy and Infrastructure and Jobs Act 16,30 Americans for Transportation Mobility Coalition 30, 84, 202 Amy Bishop 62 Andrew Carnegie vii Anita Archie 234, 237, 253, 255, 257, 260 Annual Meeting 243 Applied Chemical Technology 261 April Weaver 21, 35

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Arthur Orr 34, 37, 57, 92, 97, 121, 129, 143, 149, 162, 194 Ashley Eiland 52, 244 Ashley Frye 259 AT&T Alabama 243 Attorney General 102, 106, 125, 157, 178, 195, 212, 255, 259, 261 Auburn University 13, 113, 209, 256 Austal USA 102, 242, 255, 259 Autism 168, 193 B Barbara Boxer 159 Barbara Thompson 127 Barry Mask 9, 19, 21, 39, 76, 93, 119, 131, 175 Barry Moore 21, 158 Barry Whatley 52, 242, 244, 258 BCA vii-ix, 14-16, 31-7, 55-68, 78-87, 94-7, 11015, 133-42, 152-5, 167-9, 177-81, 183-9, 218-29, 231-46, 253-62 BCA Education and Workforce Preparedness Committee 197, 219 BCA Environment and Energy Committee 197, 219 BCA Federal Affairs Committee 16, 144, 239 BCA Governmental Affairs Committee 11, 22, 40, 53, 119, 150, 164, 218 BCA Health Committee 58 BCA Judicial and Legal Reform Committee 97 BCA Education and Workforce Preparedness Committee 197, 219 BCA Environment and Energy Committee 197, 219 BCA Tax and Fiscal Policy Committee 32 Becky Nordgren 21 Ben Brooks 24, 32, 43, 117, 153, 162-3, 174, 187, 220

Best of the BEST Award 256 BEST Robotics, Inc. 257 Bill Barranco 244 Bill Brunson 244 Bill Holtzclaw 35, 79, 112, 127, 134, 162 Bill Lyons 52, 244 Bill Morton 244 Bill Nelson 159 Bill Poole 21, 24, 33, 43, 119, 176, 188, 254 Bill Roberts 10, 21, 34, 44, 123, 191 Bill Shuster 159 Billy Beasley 117, 125, 162, 171 Birmingham Business Alliance 85 Blaine Galliher 20, 40, 63-4, 79, 112, 134, 188 Blue Cross and Blue Shield of Alabama 243 Blue Cross/Blue Shield 41 Board of Directors 15, 51, 55, 82, 94-6, 113-14, 206, 209-10, 218, 222, 232, 239, 244, 246 Bob Menendez 159 Bob Riley 97, 238-40, 256-7 Bobby Singleton 162 Boiler MACT 70, 201 Boys and Girls Club 245 Bradley Byrne 127 Brian Hilson 244 Bryan Kindred 244 Bryan Taylor 149, 157, 162 Buffett Rule 29 Business Activity Tax Simplification Act (also BATSA) 48 Business Associations Tax Coalition (BATC) 91, 110, 153, 164, 175, 186-7 Business Coalition for Property Rights and Workplace Safety 65, 76 Business Council of Alabama ii-iii, vi-vii, 55, 58-62, 76, 144-5, 178-80, 199-204, 206-7, 220-9, 231, 234-6, 238-40, 243, 253-5

Business Education Alliance (also BEA) 51, 225, 234 C Cam Ward 53, 75, 149, 162, 168, 193-4, 220 Cameron Martindale 244 Capital Leadership Day vi, 51 Carl Jamison 51-2, 60, 99, 218, 239-44, 255-7, 260 Carol Gordy iii, 95, 244 Caroline Novak 244 Carrying the Flag for Business Campaign vi, 199 Cascades Sonoco 102, 255, 261 Casey Wardynski 87 Cathy Anderson-Giles 244 Centennial Award 256-7 Chad Fincher 20, 143 Chairman’s Dinner vi, 199, 235-6, 238 Chamber of Commerce Association vii, 16, 95, 113, 207, 209, 218, 221, 223-7, 229, 243, 255 Chamber of Commerce Association of Alabama (also CCAA) 113, 207, 209 Chamber of Commerce of Huntsville/Madison County 145 Charles McCrary 244 Charles Nailen iii, 100, 2434, 246 Charlie Story 244 Charter School Legislation 6, 90, 126, 185, 254 Charter schools v, 6, 12-13, 23, 42, 56, 73-4, 85-9, 108-9, 118, 126-7, 161-2, 172, 185-6, 254 Cheryl Smiley Williams 244 Chester Vrocher 98, 197 Chip Cravaack 159 Chris England 28 Chuck Schumer 159 Cigarette tax 121 Clay Scofield 69, 123, 162, 189, 220

INDEX

Clean Air Act 201 Clean Water Act 69, 84, 158, 180 Coal mining 10, 34,44,191 Committee Leadership Days 97, 218 Congress 16-17, 28-9, 34, 49, 67, 84, 114, 128, 1456, 160, 177, 179-80, 200, 202, 204 Constitutional amendment 9, 11, 19, 39-41, 48, 56, 76-7, 93, 131, 168, 175, 192 Cooper Shattuck 105, 106, 107, 108 Council on State Taxation (COST) 203 Court of Civil Appeals 81, 206 Court of Criminal Appeals 82, 206 CQ Today 179, 200 Craig Ford 20, 44, 65, 75, 109, 119 Craig Pittman 81, 206 Craig Pouncey 40, 77 Curtis Lewey 261 Cybercrime 53-4 D Daikin America 102, 255, 260 Dan Williams 10, 21, 46, 93, 110, 191 Data processing centers 10, 93, 110, 191 Dave Camp 159 David Craig 73 David Hendrixson 255, 260 David Muhlendorf iii, 244 David Sessions 21 David Vitter 70, 159 Davidson High School (also DHS) 256, 257, 258 Debbie Long 59, 197, 244 Dee Dee Bonner 255 Deepwater Horizon oil spill 69, 84, 158, 180, 202 Del Marsh 22, 55, 59, 73, 127, 149, 162-3, 167, 218, 220, 225, 234, 237 Demetrius Newton 174

Denson Henry 59, 100, 239, 241-2, 244, 246, 258 Department of Corrections 4 Department of Human Resources 4, 43 Department of Industrial Relations (DIR) 14, 25, 36, 68, 155 Department of Insurance 66, 79, 91, 178, 193, 195-6 Department of Labor 43, 195 Department of Transportation 33, 69, 123, 189 Dick Anderson 102, 228-9, 241-2, 244, 246, 258 Dick Brewbaker 73, 87, 1267, 161-2, 172, 185, 254 Dick Durbin 159 Dickie Drake 20 Distance Learning, ACCESS 5, 42 District Attorneys Association 79, 112, 134, 189 Doc Hastings 159 Don Young 159 Donald Keeler 255, 259 Donald Morgan 244 Donna Watts 244 Donnie Chesteen 20 Donta Wilson 244 Doug Mannion 242, 244, 246, 258 Douglas Markham 244 Duwayne Bridges 113, 191 E E-verify 26, 106, 211-12 Eason Balch 244 Economic Development Association of Alabama 114, 210 Economic impact analysis 11, 222 Ed Castile 242, 258 Ed Crowell 244 Ed Henry 20, 155 Ed Whitfield 159 Eddy Kilman 244 Education Options Act v, 73, 85, 87, 89, 108-9, 118, 126, 161, 225

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Education Policy Committee 127 Education reform vi, 12, 22, 73, 85, 109, 127, 172, 1856, 223, 254 Education Trust Fund 10, 22, 41-2, 88, 120, 168, 222 Efficiency Division 23 Elaine Beech 20 Eliska Morgan 257 Emmanuel Boullay 255, 261 Employment verification 26 Environmental Protection Agency (also EPA) 70, 144, 159, 201 Ephedrine 15, 63-5, 79, 112, 134, 188, 224 Eric Cantor 83, 146 Erik Johnsen 101, 244 Estate Tax 29 ETF 23, 120-1 Ex-Im Bank 82, 94, 103, 115, 179, 181, 200 Export-Import Bank (also Ex-Im) 83, 103, 179, 181, 182, 200 F FAA 17 Fair Campaign Practices Act 157, 194 Federal Advocacy vi, 200 Federal Legislative Agenda vi, 16 Film incentives 46, 78, 91, 122, 190 First Class pre-k 51 First class voluntary pre-k 51 Forever Wild 57, 168 Forever Wild Program 57, 168 Forrest Keith 260 Fourner J. “Boots” Gale III 243 Fox News 243 Frances Turner 244 Frank Filgo 244 Frank Lloyd Wright vii Fred Blackwell 197, 244 Fred McCallum 243-4 Fred Upton 159 Freda Bacon 197, 244 Freida Hill 242

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G Garry Neil Drummond 244 GARVEE Bonds 3, 33, 42 General Fund Budget 13, 23, 80, 119-20, 122, 129 George Blanks 257 George Flowers 242, 244, 258 George W. Bush 235-6 Gerald Allen 127, 162-3 Gerald Dial 27, 125, 150, 162, 174 Glenn Murdock 81, 206 Goodyear 41, 255 Governmental Affairs Conference 97-8, 231, 234 Governor Bob Riley “Building a Better Alabama” Award 256-7 Governor’s Trade Excellence Awards 80 Greg Butrus 197 Greg Canfield 39, 77, 80, 218, 220 Greg Leikvold 242, 244, 258 Greg Powell 60, 244, 246 Greg Reed 58, 101, 128, 162-3 Greg Wren 21, 128, 130, 156 Gregory Brown 244 Gross Income Regulation 61 Gulf Coast 69, 84, 158, 1801, 202 Gulf Coast Restoration Trust Fund 180, 202 Gun 44-5, 65-6, 75-6, 167, 184 Guns-to-work 59, 60,62,75,184 H Hank Sanders 117, 127, 162, 174 Harbert Management Corporation 218, 220, 231, 233, 243 Harri Anne Smith 162 Harris Morrissette 101, 244, 246 Harry Reid 16, 69, 71, 82, 103, 179

Harry Shiver 21 Health Alliance 7 Health care vii, 5, 15, 48, 50, 58, 63, 67, 80, 84, 92, 100, 128, 156-7, 224 Health care exchange 128 Henry Mabry 87, 126 Hibbett Sporting Goods 54 Highway Trust Fund 50, 103, 202 Honda 9, 22, 242, 258 Honest Budget Act 16 Horace Horn 244 House Committee on Commerce and Small Business 21 House Committee on Oversight and Government Reform 159 House Constitution, Campaign and Elections Committee 28 House Economic Development and Tourism Committee 33, 92 House Energy and Commerce Committee 17 House Ethics and Campaign Finance Committee 28 House Health Committee 15, 48, 63-5, 128, 130 House Judiciary Committee 24, 27, 33, 46, 49, 90, 175, 203 House Public Safety and Homeland Security Committee 14, 117 House Rules Committee 40 House State Government Committee 14, 132 House Ways and Means Education Committee 108, 118, 126 Human Events 179, 200 Hyundai 9, 22, 259 Hyundai Motor Manufacturing Alabama 259

I Immigration v-vi, 26, 56, 5960, 62, 105-6, 108, 11617, 125, 166, 171, 183-4, 211-12, 226-7, 253 Innovation 13, 88-9, 108, 145, 231, 260 J J. Cameron West 244 J. Danny Cooper 244 Jabo Waggoner 101, 162, 194 Jack Hawkins 244 Jack Williams 21, 25, 28, 37, 92, 110, 155, 185, 254 Jaime Beutler 159 James Buskey 119 James Inhofe 159 James Lankford 159 James Proctor 242, 244, 258 Jamie Ison 20, 33, 67, 93, 119, 177, 190 JamisonMoneyFarmer PC 243 Jan Wood 114, 209, 244 Jay Love 22, 31, 85, 119, 152, 162, 173, 186, 192, 195 Jay Rockefeller 159 Jay Timmons 239-40, 242, 256 Jeff Coleman 52, 244 Jeff Miller 244 Jeff Newman 82, 206 Jeff Sessions 16, 30, 145, 180, 241-2 Jeff Thompson 242, 258 Jefferson County 63 Jenny Parker 257 Jerald Labovitz 257 Jeremy Arthur vi, 95, 113, 209, 245 Jeremy Oden 21, 108, 119 Jerry Fielding 149, 162 Jim Barton 20, 120 Jim Bolte 244 Jim Byard 242, 258 Jim Carns 20 Jim Fincher 244 Jim Main 81, 206 Jim McClendon 14, 21, 128, 150, 174, 196 Jim O’Brien 197

INDEX

Jim Patterson 21 Jimmy Holley 132, 162 J.M. â&#x20AC;&#x153;Margieâ&#x20AC;? Wilcox 244 Jo Bonner 81-2, 145, 180, 206, 241, 256-7 Joanne Randolph 15, 52, 244 Job creation v-vi, 9-10, 1920, 22, 25-6, 39-40, 43-4, 76-8, 93-4, 130-1, 158, 175, 191-2, 222-3, 256-7 JOBS Act 16, 30, 70, 114 Jobs package 12 Joe Faust 20 Joe Hubbard 20, 174 Joe Pampinto 242, 258 Joe Rella 242, 244 John Boehner 48, 84, 203 John Duncan 159 John Hoeven 70, 159 John Merrill 21 John Mica 159 John Rogers 21, 119 John Russell Thomas 244 John Seymour 244-5 John Turner 52, 244 Joint Committee on Administrative Regulation Review 133 Joseph Busta 244 Jubilee BEST Robotics 257 K Karen Carter 244 Kay Bailey Hutchison 159 Kay Ivey 15, 60, 218 Keeping Politics Out of Federal Contracting Act of 2011 159, 204 Keith Granger 52, 244 Ken Johnson 20 Ken Tucker 242, 244, 258 Kerry Rich 21 Kim Turner 245 Kirk Mancer 95, 244 K.L. Brown 20 Kurt Wallace 21 L Larry Buchson 159 Legislative Fiscal Office 169 Legislative Reference Service 132

Lesley Vance 21 Liles Burke 82, 206 Linda Coleman 149, 162 Linda Lewis 244 Lindsey Graham 83, 94 Lisa Williams 52, 244 Lolly Steiner 95, 244 Luther Strange 102, 125, 255, 259, 261 Lyn Stuart 81, 206 Lynn Cox 245 Lynn Greer 20, 66, 79, 91, 112, 193 M MAC 20-1, 239, 241-2, 258 Mac Buttram 20 Mac McBride 242, 258 Mac McCutcheon 21 Mack Ferguson 60 Made in Alabama Act 14 Maggie Brooke (also Margaret Brooke) 232 Magic Moments 245 Major Garrett 95, 243 Manufacturer of the Year (also MAC) 102, 255-7, 259-61 Manufacturing Advocacy Council vi, 16, 66, 76, 228-9, 239-40, 242, 258 Marc Keahey 149, 154, 162, 174 Marc Labovitz 257 Marcel Black 28 Margaret Spellings 99, 234 Maria Cantwell 83, 94 Mark Brazeal 242, 258 Mark Hope 244 Mark Nix 52, 244 Mark Tuggle 21, 119 Mark Wnuk 245 Markus Schaefer 244 Marquita Davis 81, 119 Martha Roby 16, 49, 206, 241-2 Martin Abroms 244 Marty Abroms 31-2, 61, 197, 254, 261 Marty Parker 52, 244 Mary Sue McClurkin 21, 119, 244 Max Baucus 159

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Memphis 13 Mercedes 9, 22, 34, 44, 191 Merika Coleman 28 Metal Theft (also scrap metal) vi, 24, 32, 43, 57, 176, 183, 188, 228-9, 253-4 Michael Bailey 242, 255, 257-61 Michael Joiner 82, 206 Michael Thompson 244 Micky Hammon 20, 117, 125, 148, 166, 171, 189 Mike Ball 20 Mike Fletcher 257-8 Mike Hill 20 Mike Hubbard 11, 20, 55, 60, 73, 92, 97, 99, 109, 158, 172, 183, 218, 23941, 253 Mike Jones 20 Mike Millican 15 Mike Rogers 145, 180, 206, 241 Mississippi 5, 15, 34, 67, 166, 174, 177, 190 Mitch McConnell 70, 94 Mo Brooks 81-2, 145, 180, 206, 241 Mobile Area Chamber of Commerce 180 Mobile Workforce State Income Tax Fairness and Simplification Act 203 Montgomery Advertiser 172 Montgomery Area Chamber of Commerce 145 Morri Yancy 53, 95, 244 N NAM 240 Nancy Pelosi 48, 203 National Association of Manufacturers (also NAM) vii, 62, 115, 179, 200-1, 204, 221, 223-7, 229, 234, 238-40, 246, 254-6 National Institute for Early Education Research (also NIEER) 51 National Journal 95, 179, 200, 243

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New Market Development Act 67, 190 Nichole Reynolds 241 NIEER 51, 53 North American Energy Access Act 17 O Octavia Spencer 46 Office of Water Resources 143 Offshore Drilling 204 Oliver Robinson 21 ONE SPOT 165, 254 Orrin Hatch 159 Outer Continental Shelf 70, 204 Owen Bailey 100, 197, 244, 246 P Paige Goldman 197 Pam Jones 245 Pamela Burnham 51, 244 The Partnership vi-vii, 113, 207-9 Partnership Award 256-7 Pat Tiberi 159 Patient Protection and Affordable Care Act (also PPACE, ACA, health care reform law) 128, 130, 156 Patricia King 244 Patricia Todd 119 Paul Beckman 20 Paul Bussman 33, 36, 68, 162 Paul Cocker 244 Paul DeMarco 14, 20, 25, 27, 36, 46, 53, 68, 90, 109, 153, 155, 163, 174, 176 Paul Lee 10, 20, 67, 90, 100, 111, 190 Paul Sanford 26, 44, 65, 75, 162-3, 167, 184 Paying a Fair Share Act 147 Payroll Tax Cut 28 PBM 47 Pebblin Warren 62, 99 Permanent Joint Legislative Committee on Water Policy and Management 143

Permanent Legislative Committee on Reapportionment 150 Perry Hand 52, 244 Peter Reynolds 257 Pharmacy 47-8, 64, 66, 79, 91, 112, 193 Pharmacy benefit managers (PBM) 66, 79, 91, 112, 193 Phenylpropamine 15, 224 Phil Dotts iii Phil Webb 52, 244 Phil Williams 21, 39, 60, 68, 73, 76-7, 85-6, 101, 108, 119, 126, 131, 149, 162, 172 Philip Dotts 243-4 Physical therapists 129, 155-6 Pocket veto 187 Politico 179, 200 Prattville Chamber of Commerce 113, 209 Pre-k 5, 51, 55 Pre-kindergarten 42, 51, 56 Pre-Kindergarten programs (also pre-k) 51 President Barack Obama 16, 18, 29, 71, 103, 114, 128, 146, 181 Priscilla Dunn 75, 162, 192 Private sector v, viii, 12, 14, 181, 199, 202, 222 Pro-business vii-viii, 12, 43, 145, 180, 197, 199, 218, 220, 223, 231-2, 234, 2367, 239, 243 Probate Judges Association 28 ProgessPAC vi, 62, 81, 199, 206, 232, 235,237 Property rights 44-5, 65-6, 76, 167 Proration 80-1, 119 Pseudoephedrine v-vi, 15, 58, 63, 79, 112, 134, 1889, 224 Public Affairs Research Council of Alabama 121 Public Road and Bridge Construction Council 33

Q Quinton Ross 127, 161-2 R Ralph Hall 159 Randall George 244 Randy Davis 20 Randy Wood 21 Ray Perez 241-2, 244, 258 Reapportionment Committee 129, 151, 174 Reception Saluting State Leaders 53 Redistricting 129, 150-1, 173-4 Reg-Flex 21, 35 Regulatory Flexibility Act 11 Regulatory Relief Act of 2011 201 Reid Ribble 159 RESTORE Act 69-70, 84, 158, 180-1, 202 Revenue Department 34, 61, 92 Rheem Manufacturing 256 Richard Baughn 20 Richard Hanna 159 Richard Shelby 69, 83, 94, 145, 158, 180 Rick Crawford 159 Rick Roden 197, 244-5 Right-to-work viii, 199 Right-to-work Statutes viii, 62, 199 Rob Bishop 159 Robert Aderholt 144-5, 180, 206, 241 Robert Bentley v, viii, 9, 19, 33, 40, 73, 80, 98-9, 101, 105, 113, 118, 173, 176-7 Robert “Bubba” Lee iii, 244 Robert Campbell 244 Robert Moses vii Robert Powers 244 Robert Vaughn 244 Robin Fenton 257 Rod Scott 21, 119 Rodger Smitherman 149, 162 Roger Bedford 162, 232 Rolling Reserve 23, 119, 131 Rolling Reserve Budget Act 23, 119

INDEX

Ron Davis 52, 94, 244 Ron Johnson 20, 47, 134, 220 Ron Perkins 60, 197, 244, 246 Ron Wyden 70 Ronald Yarbrough 53, 244 Ronnie Boles 197, 241-2, 244, 258 Russ Tyner 244 Rusty Glover 75, 162 S Sales/Use tax 61, 187 Sandy Stimpson iii, 101, 244, 246 School Flexibility Act 5 School grading system 192 Scott Beason 45, 125, 133, 162, 166, 171, 184 Scrap metal 254 Secretary of State 28, 234 Senate Agriculture, Conservation and Forestry Committee 69 Senate Banking and Insurance Committee 68 Senate Budget Committee 16, 30, 145 Senate Commerce Transportation and Utilities Committee 162 Senate Constitution, Campaign Finance, Ethics and Elections Committee 157 Senate Finance and TaxationEducation Committee 39, 47, 175 Senate Job Creation and Economic Development Committee 26, 36 Senate Judiciary Committee 24, 45, 48, 117, 133, 149, 153 Shadrack McGill (also Shad) 75, 127,162,163,168 Shane Clanton 244 Sheila Hodges 244 Sheldon Whitehouse 147 Shelley Moore Capito 159 Sid McAnnally 52, 244

Single Point of Filing 61, 118, 154, 187, 254 Slade Blackwell 75, 118, 127, 154, 162, 164, 167, 187, 254 Small Business 15, 21, 25, 35, 37, 60, 92, 110, 118, 128, 134, 146, 158, 164, 197 Small Business Administration 146 Small Business Financing Authority 158 Small Business Flexibility Act 21 Small Business Tax Cut Act 146 Speaker Mike Hubbard 11, 55, 60, 92, 99, 109, 158, 172, 183, 218, 234, 236, 239-41, 253 Speaker of the House 33, 73, 97, 131, 220, 225 Speakerâ&#x20AC;&#x2122;s Commission on Job Creation 158, 239 Special session 9, 93, 150-1, 173, 183, 188, 253Spencer Bachus 81-2, 145, 180, 206 Spurring Investment in Struggling Communities 93 Stan McChrystal 234 State Board of Education 56, 87, 152, 174 State Department of Education 40, 76-7, 88, 107 State Employee Insurance Board 66, 79, 91, 112, 193 State Industrial Development Authority 77, 131 State of the State Address v, 1 State Personnel Board 15 State school superintendent 13, 109 Stephen Still 244 Steve Cawood 244 Steve Clouse 20 Steve Holt 244 Steve McMillan 21, 119, 178, 195, 220

269

Steve Roy 244 Steve Southerland 159 Steven Marimberga 255, 261 STOCK Act 17, 103 Students viii, 7, 10, 13, 42, 56, 73-4, 86, 89, 107-9, 117, 119, 126, 169, 256-8 Sub-S Corporations 162, 173 Supreme Court 1, 81, 84, 108, 128-9, 157, 166, 206 Susan Collins 70 Susan Foy 244-5 Susan Price 258 Sustainability in Manufacturing Award 256 Suzanne Respess 197, 239, 241, 244 T Talladega Chamber of Commerce 60 Tammy Irons 80, 162, 174 Tax credit 6, 11, 32, 34, 42, 61, 67, 94, 113, 153, 163, 165-6, 173, 177, 190-1 Tax-exempt 10, 68, 190 Tax Hike Prevention and Business Certainty Act 146, 204 Tax incentives 9-11, 19, 91, 93, 110, 130-1, 166, 190 Taxpayer Bill of Rights 14, 46, 54 Teachers v, 6-7, 10, 42, 56, 74, 79, 85, 87-8, 108-9, 119, 161, 222, 225 Terrance Brown 244 Terri Collins 27, 35, 46, 78, 91, 119, 122, 190, 192 Terri Sewell 49, 206, 241 Terri Thomas 206 Terry Kellogg iii, 53, 95, 240-1, 243-4 Terry Moore 81, 206 Texting 14-15, 196 ThyssenKrupp 9, 22 Tim Johnson 83, 94, 159 Tim McCartney 197, 244 Tim Parker 244 Todd Strange 73 Tom Cleckler 245

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THE FOUNDATION FOR PROGRESS • 2012

Tom Surtees 40, 144 Tom Whatley 48, 133, 149, 162 Tommy Bice 6, 13, 109 Tommy Bryan 81, 206 Tornado Recovery Action Council 7 Tracy Roberts 82, 206 Transportation Bill 18, 6970, 82-4, 103, 158 Transportation Reauthorization Bill (also Multi-year highway bill) 16,69,180,181,201,202 Trip Pittman 34, 36, 47, 61, 68, 111, 121, 127, 162, 176, 185, 254, 261 U Unemployment Compensation 14, 25-6, 36-7, 43, 62, 68, 111-12, 144, 155, 176, 184-5, 254 Unemployment compensation trust fund 26, 36, 155, 176, 185, 254 Unitary combined reporting 61, 154 University of Alabama 26, 169, 178, 231-2

University of West Alabama 169 U.S. Chamber vi, 30, 84, 114, 145, 159, 179-80, 200, 202, 204, 209, 220-1, 2237, 229, 240 U.S. Chamber of Commerce 84, 114, 145, 159, 179-80, 200, 202, 204, 209, 220-1, 223-7, 229, 240 U.S. Justice Department 150 U.S. Supreme Court 108, 128, 157 Utility MACT 201 V Val Ray 260 Van Richey 244 Victor Gaston 20 Victor Vernon i, 61-2, 169, 261 Vivian Davis Figures 127, 162 Voting Rights Act of 1965 49, 150 W W. Steven Barnett 51 Walter Scheller 169, 244 Wayne Johnson 20 Wes Long 20, 220

Will Brooke (also William Brooke) 60, 95, 97, 231, 233, 236-7, 243, 245 William Canary 10, 24, 53, 105, 108, 117, 148, 162, 167, 169, 171, 173, 243, 257, 259-61 William J. Canary i, vi, 62, 96, 100, 102, 113, 169, 172, 207, 209, 222, 224-7, 229, 240-2 Winthrop Hallett 244 Women’s Business Center of North Alabama 15-16, 52, 244 Workers’ Compensation 27, 37, 54, 62-3 Workforce Development Office 62 Workforce Investment Act 203 Z Zack Brewer 257 ZF Industries 256