2017 Legislative Update: Week 11

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With only two more weeks left in the 2017 Regular Session, the Legislature has taken meaningful action on two of its “must-do” tasks: redistricting and the budgets. This week was an unusual three Session-day week, meaning that the House and Senate were both actively voting on measures Tuesday, Wednesday, and Thursday, and holding committee meetings in and around time spent on the floor. The effect of several late nights in a row, as well as the heated nature of the debates surrounding some of the most contentious legislation before the chambers, has been a sense of exhaustion and frustration in the State House.

Reapportionment

Though mostly behind closed doors, the Legislature has been working to redraw legislative districts all Session, after a Federal court found that race was impermissibly used as a factor in establishing the previous lines. The process of approving legislative districts is inherently highly political and therefore typically contentious. After months of work, the Senate finally took up a reapportionment plan on Thursday that would redraw 25 of the Senate’s 35 districts. A particular sticking point is the number of Senators that would now represent Jefferson County—seven instead of eight. After a lengthy debate on the floor, and the failure of an alternative map proposed by the Democratic Caucus, the Senate shut down for several hours as the Democrats requested the bill be read at length. The Senate then voted to pass the redistricting bill along party lines, 25–7. The House is expected to take up its redistricting bill on Tuesday.

Education Trust Fund Budget

The House unanimously passed the Education Trust Fund budget on Wednesday evening. The budget appropriates state funds for all education-related state services. This year’s budget is nearly $90 Million larger than last year’s—a reflection of projected growth in revenue. While there was some discussion of the $6.4 Billion budget, it is largely non-controversial. The House version does not include a teacher pay raise, but increases teacher retirement funding. It also includes a $13.5 Million increase for Alabama’s innovative and widely praised Pre-K program. The budget now goes back to the Senate, which must either concur in the House’s changes, or send it to a conference committee that would be tasked with reaching compromises acceptable to both chambers.

General Fund Budget

The Senate passed the State’s General Fund budget, previously approved by the House, late Thursday evening. The budget appropriates state funds for all non-education state services. The General Fund is typically the subject of significant debate, since the revenue streams allocated to that budget are relatively static, while the demands on the budget—particularly Medicaid and prison-related costs—increase significantly every year. On Wednesday, Senator Paul Sanford (R–Huntsville) amended the budget in committee to reallocate approximately $63 million in gas tax revenue from the General Fund to the Department of Transportation and to cut every agency not related to transportation by roughly 3.5%. Senator Sanford explained that his amendment was intended to meet the state’s infrastructure needs without passing a new tax.

The Senate removed Senator Sanford’s amendment relatively quickly on the floor, and seemed close to final passage of the budget by early evening Thursday. Senator Phil Williams (R–Rainbow City) took issue with a perceived cut to Veterans Affairs in an amount roughly equal to two tourism appropriations—one for the World Games in Birmingham and one for Barber Motorsports Park. Senator Phil Williams (R–Daphne), the Chairman of the budget committee, explained that what appeared to be a cut to Veterans Affairs was actually the result of a change in the way agencies’ reserves are represented in the budget. Nevertheless, Senator Williams sought to amend the budget to remove the appropriations for tourism and to increase the appropriation for the VA. The amendment drew intense criticism from the Birmingham delegation, which seemed to feel that the increase to the VA appropriation should not come arbitrarily at the expense of two line items that benefitted their city; at one point Senator Rodger Smitherman (D–Birmingham) was yelling over his microphone. Eventually, Senator Williams amendment was defeated.

The budget again seemed about to pass. At the very last moment, however, Senator Sanford requested that it be read at length—a process that takes several hours. While Senator Sanford eventually relented and called off the reading, the Senate did not take a final vote on the budget until 8:21 p.m. It passed 23–4, and now moves back to the House of Representatives, which will likely send it to a conference committee.

Historic Tax Credit

On Wednesday, the Senate Finance & Taxation Education Committee (F&TE) approved a slightly revised version of HB345, the bill that would reinstate Alabama’s Historic Tax Credit program. HB345, sponsored by Representative Victor Gaston (R–Mobile), passed the House by a wide margin several weeks ago. The Senate version, sponsored by Senator Jabo Waggoner, was reported out of F&TE on March 9th by a vote of 12–1. As with the version originally introduced, the current version of the bill would allow for $20 million in refundable tax credits each year. HB345 retains the evaluating committee recommended by the comprehensive study of the program conducted over the summer by University of Tennessee economists. There are two significant changes in the bill from the version previously approved by the committee.

First, the substituted bill would set aside 40%—or $8 Million—of the available credits for the first six months of each year for projects in counties with populations of fewer than 175,000 people. The largest counties (Jefferson, Mobile, Madison, Montgomery, Tuscaloosa, Shelby, and Baldwin) would still be able to apply for the remaining 60% in the first six months. Any credits not claimed by the smaller counties in the first six months would then be made available for projects statewide. The goal of this set aside is to make these credits available outside the major urban areas of the state.

Second, the minimum age of a structure to be eligible for credits was dropped from 75 years to 60 years. The federal historic tax credit program requires a building to be at least 50 years old, so the committee’s change brings Alabama closer to that standard. The Historic Tax Credit legislation is expected to be brought to the floor after the budgets have been finalized. Because it will have been amended in the Senate, the bill will have to go back to the House for a final vote before it can be sent to the Governor.

Autism Insurance Mandate

The Senate Finance and Taxation General Fund Committee (F&TG) held a lengthy public hearing on Thursday morning in which it heard comments regarding HB284, by Representative Patterson (R–Huntsville). The bill would require many businesses in Alabama that provide health care to their employees to purchase and pay for coverage for Applied Behavioral Analysis, which is a treatment for Autism Spectrum Disorder. That coverage is currently required to be made available in Alabama, but few purchasers have chosen to include it in their plan. Representative Patterson’s bill would require that the coverage be included and paid for in those plans going forward. Official cost estimates for the bill are not available, but in addition to requiring private businesses to purchase the coverage, it would also require the plans that insure state employees (SEIB) and public education employees (PEEHIP), Medicaid, and ALLKids to pay for it as well.

Advocates for the bill spoke forcefully about the effectiveness of the treatment and its benefits for the children in Alabama who are diagnosed with Autism Spectrum Disorder. Those advocates also noted that, without insurance coverage, the treatment—which can cost as much as $50,000 per patient per year according to testimony—is out of reach for many Alabamians. Those opposing the measure questioned whether it is proper to force people who neither need nor want this coverage to pay for it in order to bring down the cost for those who unquestionably both need and want it. That point was made somewhat ironic by the fact that it occurred on the same day the U.S. House of Representatives voted to repeal the Affordable Care Act, or Obamacare, a program that is based entirely on the concept that it is necessary to force people to buy insurance they do not want in order to lower costs for those who need it.

Adoption Religious Exemption Bill

Governor Kay Ivey signed HB24, by Representative Rich Wingo (R–Tuscaloosa), on Wednesday this week. That bill allows private child placement services to refuse to place children with families seeking to adopt or foster if the refusal is based on a religious belief. Opponents argued that the primary purpose of the legislation was to permit those services to refuse to place children with same-sex couples. Governor Ivey had made significant efforts—along with some members of the Legislature—to find an acceptable amendment to the legislation to satisfy opponents of the bill. In the end, however, no solution acceptable to both sides could be crafted.

Conclusion

The Legislature has met for 24 of the 30 possible meeting days for this Regular Session. Next week is expected to be a two-day week, with both the House and Senate meeting in session on Tuesday and Thursday and holding committee meetings on Wednesday. It is widely expected that the House and Senate will meet for three session days for the following—and likely last—week of the session, which could allow a flurry of legislation to move at the very end of the session.

The House will convene at 1:00 p.m. on Tuesday, May 9th. The Senate will convene at 2:00 p.m. on the same day.

If you have any questions or would like to reach out for more information, please contact Edward A. "Ted" Hosp or Edward A. O'Neal. To read more about Maynard's Governmental and Regulatory Affairs Practice, please click here.

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