BUDGETS STILL PENDING

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1 LEGISLATIVE REPORT ISSUE 10 MARCH 21, 2014 BUDGETS STILL PENDING The final three-day week of the 2014 Regular Session was a busy one. Both chambers are hard at work and appear to be working relatively smoothly. However, with only three legislative days remaining, both the General Fund and Education Trust Fund (ETF) budgets have yet to be submitted to the governor. Late Thursday afternoon, the Senate gave final approval to the General Fund budget, as substituted and amended. The had already adjourned and, therefore, it is still pending final consideration of the Senate changes by the. A substitute version of the ETF budget was approved by the on Tuesday. On Thursday, the Senate voted to not concur with the changes and the budget was sent to a conference committee. Though the committee of members of the and Senate appeared to have reached an agreement, the leadership did not bring the budget back to the Senate floor for a final vote to concur with the conference committee. It appears that the governor, who had publicly announced his plan to veto the budget if health insurance for teachers is not fully funded, has influenced lawmakers and the leadership is concerned they did not have the votes in the Senate for passage without full funding for health insurance. At this point, it appears a compromise is in the works to fully fund teachers health insurance and make cuts elsewhere. If a deal can be brokered, both budgets could be delivered to the governor on April 1, the 28th day of the session. SENATE APPROVES MEDICAID REFORM LEGISLATION On Thursday, the Senate united to pass legislation to amend the extensive Medicaid reform enacted last year, which established a new administrative structure for Medicaid via regional care organizations (RCOs) and provided for the implementation of that new structure. SB459 by Sen. Greg Reed (R Jasper), would revise the governance structure of the RCOs by changing the membership and eligibility requirements for the board members of each RCO. Among the most significant changes was eliminating the provision that had allowed one of two physicians on an RCO board to veto any action of the board. The measure would also require the Medicaid Agency to promulgate a rule to set a minimum reimbursement rate for providers. Also, and among other things, the bill would establish a contract dispute committee and provide procedures for the review of contracts upon the request of dissatisfied providers. Democratic senators praised Sen. Reed, a Republican, for his efforts on the bill, stating that it would help improve the quality of health care in Alabama, including to Medicaid recipients. FIREARM BILL MOVES FORWARD WITH BUSINESS-FRIENDLY LANGUAGE SB354 by Sen. Scott Beason (R Gardendale) passed the Senate on Wednesday and goes to the for consideration. The bill would allow for the carrying of a loaded handgun in an automobile without a concealed carry license and make it expressly clear that openly carrying a loaded firearm in public is legal and would not subject one to a charge of disorderly conduct. Concerns arose from some employers that the bill might be intended to circumvent legislation passed in 2013 which restricts employers from prohibiting employees from storing guns in cars parked on company property but allows an employer to require an employee to have a concealed carry license in order to store a firearm in a vehicle. However, Sen. Beason amended the bill to expressly provide that employers would still maintain the right to require an employee to have a (Continued on page 2)

2 NEXT WEEK The Legislature will not meet next week due to Spring Break. It will reconvene for the 28th Legislative Day on Tuesday, April 1 for what is expected to be a two-day week. The Senate will convene at 2 p.m. and the will meet at 1 p.m. BILL TRACKING DATABASE Customize and manage your bill-tracking l i s t o n l i n e a t Call for login info or with questions about your account. concealed carry permit to store a gun in a car on company property. OPEN MEETINGS BILL APPROVED BY HOUSE COMMITTEE The bill to amend the Open Meetings Law was favorably reported out of the Ethics and Campaign Finance on Wednesday, as substituted. The legislation seeks to strengthen the current law by defining and prohibiting serial meetings, a series of meetings held by small groups of members of a deliberative, governmental body before and in order to influence the formal deliberative process. Such meetings are seen by the press as a way to circumventing the open meetings law. The bill would also give private citizens a right to sue for violations of the law. The substitute version of the bill clarified the definition of serial meetings and expressly excluded certain, sensitive deliberations such as discussions on filling certain employment positions, where public disclosure of interest parties or applicants would necessarily need to be avoided. JUDICIAL RECUSAL REFORM CLOSER TO PASSAGE Legislation to repeal current law related to judicial recusal and replace it with new criteria was passed by the on Tuesday and was favorably reported out of the Senate Judiciary this week. HB543 by Rep. Mike Ball (R Huntsville) would require a judge or justice to recuse if a reasonable person would perceive that impartiality is impaired by the receipt of a campaign contribution by a party to a case. Additionally, it would presume that a judge or justice should recuse if over 25 percent of his or her contributions in an election cycle were donated by a party to an action. The bill is intended to resolve gray area in the Alabama Code created by the recent U.S. Supreme Court s decision in Shelby County v. Holder and reflects standards for judicial recusal outlined in the Court s opinion in Caperton v. A.T. Massey Coal Co. PUBLIC EXAMINER BILL PENDING CONSIDERATION BY SENATE A bill to transfer the legislative Department of Examiners of Public Accounts to the Office of the State Auditor was approved by the Senate Fiscal Responsibility and Accountability on Thursday. HB350 by Rep. Ed Henry (R Hartselle) has stirred a bit of debate because the public examiner is a non-political state appointment and employee of the legislative branch, and some contend the transfer would effectively politicize the position because State Auditor is an elected executive office. ACCOUNTING NEWS The Governor signed SB146 by Sen. Jimmy Holley (R Elba), which would amend the current law to make the definition of attest consistent with uniform, national standards. It has been assigned Act# SB98 by Sen. Paul Bussman (R Cullman), related to preneed funeral services, has been submitted to the Governor. The bill was amended as requested by. HB257 by Rep. Napoleon Bracy (D Mobile), which would allow married taxpayers to claim the optional standard deduction when filing separate tax returns, was favorably reported out of the Senate Finance and Taxation on Education this week.

3 March 21, Regular Session /Alabama Legislature- Report #10 Bill Tracking Report ALABAMA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS Client Bill Synopsis HB2 - Enacted HB2 By Representative DeMarco SYNOPSIS: Existing law authorizes the formation of limited liability companies and the filing of documentation of such formation with the Secretary of State. This bill would provide further for the formation of limited liability companies by replacing the current limited liability company law with an updated Uniform Alabama Limited Liability Company Law. This bill would clarify that a limited liability agreement is a contractual agreement between the parties to the agreement and may be modified to suit the needs of the parties. This bill would provide that certain obligations of the contractual agreement, such as the obligation of good faith and fair dealing, could not be modified. This bill would require a limited liability company to file with the Secretary of State certain documents providing for the formation, dissolution, merger, or conversion of the company as a means of providing notice to third parties. This bill would provide that the right of a person to direct and oversee the activities and affairs of the limited liability company would be determined by the limited liability company agreement, and, where the agreement is silent, by the members of the company. This bill would provide that a limited liability company may establish in its certificate of formation and its limited liability company agreement, one or more designated series of assets with which certain members may be associated and would provide that the assets of one series could not be used to satisfy the obligations of another series. HB18 - HB30 - HB42 - HB18 By Representative Holmes RFD Public Safety and Homeland Security SYNOPSIS: Act of the 2013 Regular Session is a comprehensive revision of existing laws regulating the possession and use of firearms. Among other things, the act consolidates certain preemption language regarding the authority of local governments to regulate firearms, establishes a rebuttable presumption that the carrying of a firearm under certain conditions does not constitute the crime of disorderly conduct, revises the pistol permitting process, further provides for business license taxes on persons participating in gun shows, prohibits the carrying of firearms at specified locations and allows employees to transport or store a firearm or ammunition in the employee's motor vehicle under certain conditions, and allows the use of force for protection and self-defense on business property. This bill repeals Act of the 2013 Regular Session in its entirety and restores amended or repealed Sections of the Code of Alabama 1975, to their original form. HB30 By Representative Gaston RFD State Government SYNOPSIS: Under existing law, the Alabama Administrative Procedure Act governs the procedures for state agencies to adopt rules. The Joint on Administrative Regulation Review may allow an agency to withdraw a proposed rule. This bill would allow an agency to withdraw a proposed or certified rule instead of requiring the joint committee to act on a request by an agency to withdraw the rule. SYNOPSIS: To provide for the Alabama Taxpayer Audit Protection Act to prohibit discriminatory misconduct by the Department of Revenue or any county or municipal government against Alabama taxpayers and to provide misdemeanor punishment and a basis for potential disciplinary action for violations; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended. 1

4 HB87 - HB88 - HB97 - HB87 By Representatives Brown and Givan RFD Insurance SYNOPSIS: Under existing law, the Alabama Preneed Funeral and Cemetery Act provides for the regulation of the sale of preneed funeral or cemetery merchandise and services. This bill would strengthen consumer protection and eliminate ambiguity in the requirements for the proper handling of preneed and cemetery endowment care funds. This bill would provide further for the ability of the Commissioner of Insurance to deter violations and ensure compliance with the act. This bill would grant the commissioner jurisdiction over any person unlawfully writing, or suspected of unlawfully writing, preneed contracts and would clarify the penalties for violations. This bill would further clarify the requirement that any person selling funeral or cemetery merchandise or services on a preneed basis obtain a certificate of authority from the Department of Insurance. This bill would specify which violations related to preneed sales, trust deposits, and collections are felonies. This bill would increase, from a Class B to a Class A misdemeanor, all non-felony violations of the act. This bill would authorize the commissioner to bring a civil action against any person or company violating the act and increase the recovery of funds on behalf of consumers. This bill would clarify that a person who only sells preneed burial rights is not required to register as a preneed sales agent. This bill would revise the annual application and renewal dates for persons holding preneed certificates of authority and would waive the requirement of filing annual financial statements under certain circumstances and upon written request to the commissioner. This bill would require each certificate holder to file with the commissioner a quarterly report of all preneed contract and trust activity. This bill would clarify the amount of a bond used as an alternative to a trusting requirement. This bill would authorize the commissioner to use funds received from any source for purposes of enforcement. This bill would clarify that funds received for funeral and cemetery merchandise placed in storage prior to death need not be placed in trust. This bill would require certificate holders to satisfy additional requirements and to file with the commissioner a quarterly report of all preneed contract trust activity. This bill would subject endowment cemetery authorities to the act. This bill would require any person receiving funds from the sale of a preneed contract to contribute to a trust fund, life insurance contract, or annuity contract. This bill would require that preneed cemetery merchandise and services funds remain in trust until cancellation or fulfillment of a preneed contract. This bill would prohibit a person serving on a cemetery board of trustees from also serving as the trustee of an endowment care fund, with certain specified exceptions, and would require bonds on trustees, with certain specified exceptions. This bill would define net income for purposes of an endowment care fund. Amendment 621 of the Constitution of Alabama of 1901 prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose. The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of Amendment 621. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in Amendment 621. HB88 By Representative Williams (J) RFD Commerce and Small Business SYNOPSIS: Under existing law, an eligible individual who is unemployed or partially unemployed in any week shall be paid an amount equal to his or her weekly benefit amount that is reduced by any wages payable to the individual for that week in excess of $15. This bill would alter the formula for calculating the individual weekly benefit payment, providing that an eligible individual who is unemployed or partially unemployed in any week shall be paid an amount equal to his or her weekly benefit amount reduced by any wages payable to the individual for that week in excess of one third of the weekly benefit amount. SYNOPSIS: To add Section to the Code of Alabama 1975; to require the Department of Revenue, by administrative rule, to suspend collection of certain taxes or fees if the administrative cost of collection is more than the amount collected; to provide exceptions; to provide that no administrative rule suspending collection of a tax or fee shall be applied retroactively; and providing for periodic review of such rules. 2

5 HB105 - Enacted HB107 - Enrolled HB108 - SYNOPSIS: To add Chapter 2B to Title 40 of the Code of Alabama 1975, to provide for the creation and operation of the Alabama Tax Appeals Commission; to state that the intent of this act is to adopt in large part the American Bar Association Model State Administrative Tax Tribunal Act; to hear appeals of tax and other matters administered by the Department of Revenue and certain taxes levied by or on behalf of selfadministered counties or municipalities that do not opt out; to provide the necessary funding for the first year of operations of the Tax Appeals Commission; to amend Sections 40-2A-3, 40-2A-4, 40-2A-5, 40-2A- 7, 40-2A-8, 40-2A-11, and , Code of Alabama 1975, for purposes of conformity to the federal Taxpayer Bill of Rights, including broader innocent spouse type relief and increased penalties for negligence, fraud, and frivolous appeals or returns; to make technical corrections; to require amended state income tax returns as a result of IRS audit changes; to increase the amount of time a taxpayer has to file an appeal of a preliminary or final assessment; and to abolish the Administrative Law Division of the Department of Revenue, including repealing Section 40-2A-9, Code of Alabama HB107 By Representative Scott RFD Commerce and Small Business SYNOPSIS: Under the existing workers' compensation law, if a covered employee dies as a result of an employment related accident or occupational disease, the employer is required to pay burial expenses not to exceed $3,000. This bill would increase this amount to $6,500. HB By Representatives Wren and Hubbard (M) RFD: Commerce and Small Business First : 14-JAN-14 SYNOPSIS: This bill would provide an optional non-itemized short form for filing a business personal property tax return for those taxpayers whose total original acquisition cost of all taxable tangible business personal property assets is equal to or less than $10,000 each year. The Department of Revenue would be required to design the short form along with filing instructions to be used when filing the short form with the applicable local tax assessing official or agency. 3

6 HB111 - HB126 - HB130 - HB111 By Representative Hill RFD Insurance SYNOPSIS: Under existing law, members of an insurance holding company system are required to meet certain requirements deemed appropriate to protect the solvency of the insurers within the system. Under existing law, the commissioner is required to hold a public hearing to consider a proposed acquisition of control of an Alabama-domiciled insurer. Under existing law, insurers or officers, directors, employees, or agents thereof willfully violating the holding company act can be criminally prosecuted and, upon conviction, fined up to ten thousand dollars ($10,000) for an insurer and up to one thousand dollars ($1,000) for an individual, or up to two years in prison, or both. This bill would add requirements to the insurance holding company system law for assessing the "enterprise risk" within the entire holding company system, including the risk caused by non-insurance affiliates. The bill would permit the commissioner to hold the public hearing required to consider a proposed acquisition of control of an Alabama-domiciled insurer on a consolidated basis with other commissioners if the approval of commissioner from other states is also required. The bill would require, in certain circumstances, a pre-acquisition notification to the commissioner, and give the commissioner authority to order the acquisition not occur under certain circumstances and according to certain requirements. The bill would authorize the commissioner to participate in a supervisory college with other regulators for any domestic insurer that is part of a holding company with international operations in order to determine compliance by the insurer with this law. The bill would add additional penalties for certain violations of the act, including a daily fine of up to ($1,000) for failure to file any registration required to be filed under the act, up to a maximum of ($50,000); a civil forfeiture of up to ($10,000) per violation for any officers or directors of an insurance holding company system who knowingly violate, participate in, or assent to, or who knowingly permit the officers or agents of the insurer to engage in transactions or investments not properly reported or submitted pursuant to the act; and a criminal penalty of up to five years in prison or a fine of up to ($50,000), or both, for any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statement or false reports or false filings with the intent to deceive the commissioner in the performance of the commissioner's duties under this act. The bill would provide certain recovery rights to a receiver appointed to liquidate or rehabilitate a domestic insurer from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer the amounts of distributions paid by the insurer on its capital stock or in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment to a director, officer, or employee made at any time during the one year preceding the petition for liquidation, conservation, or rehabilitation, with certain limitations and exceptions. Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose. The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment. HB126 By Representative Hubbard (J) RFD Economic Development and Tourism SYNOPSIS: This bill would propose an amendment to the Constitution of Alabama of 1901, to create a Small Business and Job Creation Fund for the purpose of providing a statewide availability of funds for lending purposes to businesses forming new business entities. This bill would provide for the transfer of $50 million each year for three years from the Alabama Trust Fund to the Small Business and Job Creation Fund and would provide for administration of small business loans from the fund by the Department of Commerce. This bill would also provide for further implementation and administration of loans from the Small Business and Job Creation Fund by the Legislature. HB130 By Representative Knight RFD Ways and Means Education SYNOPSIS: This bill would propose an amendment to the Constitution of Alabama of 1901, to repeal Amendment 225 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended; and to exempt sales of food and overthe-counter drugs from state sales tax. 4

7 HB151 - Passed by HB156 - HB160 - HB163 - HB215 - HB151 By Representatives Moore (B), Boothe, Sanderford, Long, McMillan, Williams (D), Lee, Bridges, Faust, Shedd, Carns, McClurkin, McCutcheon, Wren, Buttram, Greer, Butler, McClendon, Baker, Merrill, Johnson (K), Wallace, Hammon, Standridge, Henry, Nordgren, Johnson (W), Brown, Patterson, Farley, Hubbard (M), Collins, Williams (P), Baughn and Weaver RFD Ways and Means Education SYNOPSIS: Under existing law, any taxpayer liable for the payment of state sales taxes whose average monthly tax liability was $1,000 or greater during the preceding calendar year must make estimated monthly payments to the Department of Revenue based on the actual tax liability for the same calendar month of the preceding year. This bill would increase the average monthly tax liability threshold for a taxpayer to be required to make estimated payments to $2,500 or greater. HB156 By Representative Tuggle RFD Education Policy SYNOPSIS: This bill would require the State Department of Education to develop, and each local board of education to adopt, an anaphylaxis preparedness program. This bill would provide for implementation of the program by each local board of education commencing with the scholastic year. This bill would authorize the lead nurse employed by the local board of education to collaborate with a local physician to develop and maintain a protocol for emergency response that includes a supply of premeasured, autoinjectable epinephrine on each public school campus. Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose. The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment. HB160 By Representative Patterson RFD County and Municipal Government SYNOPSIS: This bill would specifically prohibit a municipality from imposing a business license tax on the rental of residential real estate on a per unit basis unless the municipality was imposing a business license tax on a per unit basis prior to January 1, HB163 By Representative Poole SYNOPSIS: This bill would revise merger and conversion provisions of the Alabama Business and Nonprofit Entities Code. HB215 By Representative Greeson RFD County and Municipal Government SYNOPSIS: Under existing law, the Department of Revenue supervises and regulates the periodic reappraisal of all property in Alabama. This bill would provide that Class II and Class III real property in Alabama would not be subject to reappraisal more often than once every four years, provided that the level of equalization for a particular county falls between 90 percent and 105 percent with a coefficient of dispersion of no greater than 20 as determined by an annual sales ratio study conducted by the Department of Revenue. 5

8 HB236 - HB241 - HB244 - HB257 - HB274 - HB236 By Representative Hall RFD Commerce and Small Business Rd 1 15-JAN-14 SYNOPSIS: Under existing law, there is no specific statute or rule that prohibits wage differentials between minorities and non-minorities who are performing the same job. This bill would establish the Equal Pay Remedies and Enforcement Act. The bill would express certain legislative findings regarding wage differentials between males, females, minorities, and non-minorities. The bill would create the Equal Pay Commission to study wage disparities and report its findings and recommendations to the Speaker of the Representatives for transmission to the Governor and the Legislature. HB241 By Representative England Rd 1 15-JAN-14 SYNOPSIS: This bill would clarify the proper use and enforcement of restrictive covenants in contracts. HB244 By Representative Hill RFD Ethics and Campaign Finance Rd 1 15-JAN-14 SYNOPSIS: Under existing law, the Open Meetings Act of 2005 specifically applies to quorums of committees and subcommittees of governmental bodies. In 2012, the Alabama Supreme Court, in a 5-4 decision, ruled that the Open Meetings Act did not apply to a series of committee or subcommittee gatherings at which discussions were conducted on matters that would later come before the full governmental body. In 2013, the Alabama Supreme Court ruled, in a 5-3 decision, that citizens do not have standing to bring suits under the Open Meetings Act if the civil penalty is paid to the state and there is no allegation of a likelihood of future violations. Also in 2013, the Alabama Supreme Court stated that there is no requirement that the Alabama Legislature hold open meetings. This bill would define and expressly prohibit serial meetings. This bill would further define the terms deliberation, governmental body, and meeting, to clarify that the Open Meetings Act of 2005 applies to meetings of the Alabama Legislature, committees, or subcommittees of governmental bodies involving the exchange of information or ideas among a quorum of members of the committee, subcommittee, or full governmental body intended to arrive at or influence a decision as to how any members of the governmental body should vote on a specific matter that, at the time of the exchange, the participating members expect to come before the committee, subcommittee, or full governmental body immediately following the discussion or at a later time. This bill would provide that both houses of the Alabama Legislature and their committees shall meet in public unless there is a public vote taken by the respective house or committee that the meeting requires secrecy. This bill would provide that private citizens may bring civil actions under the Open Meetings Act, that penalties may not exceed the greater of one thousand dollars or one-half the monthly salary of a defendant for service on the governmental body, and that the prevailing plaintiff shall receive any penalties awarded against the defendants. HB257 By Representative Bracy RFD Ways and Means Education Rd 1 16-JAN-14 SYNOPSIS: Currently, if separate returns are filed by husband and wife and one spouse elects to claim the optional standard deduction, the other spouse must also claim the optional standard deduction. This bill would allow spouses who live apart for the entire year to claim either the optional standard deduction or itemized deductions, regardless of the deductions claimed by the other spouse. HB274 By Representatives Gaston, McMillan, Clarke and Melton RFD Ways and Means Education Rd 1 16-JAN-14 SYNOPSIS: Existing law provides a tax credit against the tax liability of the taxpayer for the rehabilitation, preservation, and development of historic structures. This bill would provide for the transfer of the tax credit against the tax liability of the taxpayer for the rehabilitation, preservation, and development of historic structures. 6

9 HB278 - HB279 - HB278 By Representatives Beckman, Scott and Coleman-Evans Rd 1 16-JAN-14 SYNOPSIS: Under existing law, judgments for the payment of money based on a contract action bear interest from the day of the cause of action at the same rate of interest as stated in the contract. This bill would provide that those judgments would bear interest from the date judgment is signed and provide for a post-judgment interest on contracts of up to 21 percent per annum. HB279 By Representatives Melton, England, Jackson, McCampbell, Colston, Givan, Moore (M), Scott, Hall, Grimsley, Bracy, Warren, Forte, Boyd, Coleman-Evans, Robinson (O), McAdory and Rogers RFD Commerce and Small Business Rd 1 16-JAN-14 SYNOPSIS: Currently, Alabama does not have a state minimum wage law. This bill would propose a constitutional amendment to increase the state minimum wage to $9.80 per hour in three steps ending January 1, This bill would provide that tipped employees' wages may not fall 30 percent of the minimum wage at any time. The bill would provide for an increase commencing on January 1, 2020, and every three years thereafter based on the Consumer Price Index for the July 1st of the year preceding the year of the increase. The bill would require the State Finance Director to notify the Alabama Department of Labor in writing between October 1 and October 15 each year preceding a wage adjustment of the percentage to be used for the cost-of-living adjustment for the next three calendar years. This bill would require the Alabama Department of Labor to post any change in the state minimum wage on its website which shall serve as notice to each employer of this state. HB283 - HB307 - HB283 By Representative McMillan Rd 1 16-JAN-14 SYNOPSIS: Under existing law, it is not specifically illegal to possess or use an automated sales suppression device or phantom-ware, which are devices used to delete records of sales transactions from cash register records, so that sales taxes are under-reported to the state, county, and municipal tax collecting authorities. This bill would make the possession or use of an automated sales suppression device, or phantom-ware a felony, punished by a fine of not more than $100,000, or $500,000 in the case of a corporation, or imprisonment for not more than three years, or both, and the person would be liable for all lost revenue. Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose. The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment. HB307 By Representatives Ford, McCampbell, Jackson, Melton, Black, Scott, Buskey, Coleman-Evans and Boyd RFD Ways and Means Education Rd 1 21-JAN-14 SYNOPSIS: Under existing law, the Alabama Accountability Act of 2013 authorizes income tax credits for parents who transfer students enrolled in or assigned to attend a failing public K-12 school to a nonfailing public school or nonpublic school of the parents' choice and for taxpayers that make contributions to organizations that provide educational scholarships to qualifying schools. This bill would repeal portions of the Alabama Accountability Act of 2013, that authorizes and implements the income tax provisions of the Act and would rename it the Local Control School Flexibility Act of

10 HB311 - HB312 - HB311 By Representatives Burdine, Black, Scott, Jackson, Melton, McCampbell, Boyd and Coleman-Evans RFD Economic Development and Tourism Rd 1 21-JAN-14 SYNOPSIS: This bill would require any tax incentive or subsidy provided as an incentive for a company to build or expand in the state after the effective date of this act to outline specific job commitments required by a company. This bill would require a company to operate in the state and maintain the company's committed employment levels for a period of not less than five years after the year in which the project is completed. This bill would require a company to repay the state all or a portion of the tax incentive or subsidy received by the company if the company fails to honor its job commitment provided in the contract. This bill would allow the Department of Revenue to audit any company periodically to monitor compliance by the company. HB312 By Representatives Boyd, Melton, Ford, Hubbard (J), Burdine, Black, Scott and Jackson RFD Ways and Means Education Rd 1 21-JAN-14 SYNOPSIS: This bill, which shall be known and may be cited as The Workforce Development and Training Act, would authorize the Alabama Public School and College Authority to sell and issue up to $20,000,000 in aggregate principal amount of bonds in addition to all other bonds previously issued by the authority for the purpose of establishing a fund that would be used to expand Workforce Training Programs operated by the Alabama Community College System for existing business and industry. This bill also authorizes the authority to provide for the details of the bonds and for the terms of the sale thereof; and to make an appropriation and pledge for payment of the principal of and interest on the bonds of proceeds from specific excise taxes and other specific and dedicated appropriations to the extent necessary to pay the principal and interest at their respective maturities; to authorize the authority to pledge for payment of the principal of and interest on the bonds the monies so appropriated and pledged; to provide for the investment of funds by the State Treasurer; to provide that the bonds shall be limited obligations of the authority payable solely out of the funds so appropriated and pledged so that the bonds will not create a debt or obligation of the state; to provide that the bonds and the income therefrom shall be exempt from taxation in this state and the bonds may be used to secure deposits of funds of this state and its political subdivisions, instrumentalities, and agencies, and for investment of fiduciary funds; to authorize the authority to establish procedures and requirements to ensure compliance with the tax covenants with which the authority must comply; to exempt the bonds from the usury laws of this state; to authorize the issuance of refunding bonds by the authority and give details of such refunding; to provide for the employment of attorneys, fiscal advisors, trustees, paying agents, investment bankers, banks and underwriters and for the payment of all expenses incurred in the issuance of the bonds; to provide that after payment of the expenses of the issuance of the bonds the proceeds from the sale thereof shall be disbursed on orders or warrants issued by or under the direction of the authority for the purposes for which the bonds are authorized to be issued; to provide for the timely expenditure of the proceeds from the sale of the bonds; to provide that if any portion of this act shall be held invalid such holding shall not affect the validity of any other portion thereof; and to authorize the authority to reimburse the Building Commission, the Department of Finance, and the State Treasurer's Office for costs incurred in providing services for the authority. 8

11 HB317 - HB336 - HB345 - Indefinitely Postponed in HB360 - Enacted HB317 By Representatives England, Melton and Boyd Rd 1 21-JAN-14 SYNOPSIS: Existing law does not authorize the criminal record related to a charge to be sealed or expunged if the person is found not guilty of a crime or if the charges are dismissed or for a conviction record to be sealed or expunged. This bill would authorize a person charged or convicted of certain felony or misdemeanor criminal offenses, a violation, or a traffic violation to petition the court in which the charges where filed or in which the conviction occurred to have his or her records expunged, including, but not limited to, arrest records, fingerprints, photographs, or index references in documentary or electronic form, relating to the arrest or charge, or both, and conviction in certain instances. Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose. Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose. HB336 By Representative Williams (J) RFD Commerce and Small Business Rd 1 22-JAN-14 SYNOPSIS: Under current law, the business privilege tax due date for financial institutions is March 15. The Alabama excise tax return filed by financial institutions is due April 15. Taxpayers often need to extend the filing date of the business privilege tax return in order to have complete information not available until the financial institution excise tax return is completed. All other entity types have corresponding due dates for both the business privilege tax return and the income tax return. This bill would amend the business privilege tax due date for taxpayers subject to the financial institution excise tax from March 15 to April 15, to provide for corresponding tax return due dates for financial institutions. HB345 By Representatives Collins, Johnson (K), Baker, Buttram, Wallace, Beech, Patterson, Rich, Merrill, Warren, Chesteen, Scott, Burdine and Hammon RFD Commerce and Small Business Rd 1 22-JAN-14 SYNOPSIS: This bill would create the Alabama Workforce Council. HB360 By Representative Williams (J) RFD Commerce and Small Business Rd 1 30-JAN-14 SYNOPSIS: This bill would specify that a political subdivision in this state may not require an employer to grant vacation or other leave to employees of the employer. HB377 - Indefinitely Postponed in HB384 - Enacted HB377 By Representatives Jones, Hill, Weaver, Harper, Gaston and Ison RFD Financial Services Rd 1 30-JAN-14 SYNOPSIS: Under existing law, the term attest is defined in the Public Accountancy Act of 2003 as providing specified financial statement services, including the examination of prospective financial information. This bill would expand this definition to include any engagement to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE) rather than just examination of prospective financial information. This bill would also define the term report and would require nonresident certified public accountants with practicing privileges to provide services in accordance with professional standards. HB384 By Representatives Buttram, Baker, Collins and Hubbard (M) RFD Ways and Means Education Rd 1 30-JAN-14 9

12 HB386 - HB398 - HB405 - SYNOPSIS: This bill would provide a state income tax credit to individuals and businesses that make contributions to the Department of Postsecondary Education for qualifying educational expenses directly associated with the Career-Technical Dual Enrollment Program as defined by the State Board of Education. HB386 By Representatives Sessions and Fincher RFD Commerce and Small Business Rd 1 30-JAN-14 SYNOPSIS: Under existing law, there is no specific law which provides for the depositing of material from the dredging of the inlets of this state. This bill would provide the procedure for depositing of material from the dredging of the inlets of this state. This bill would exempt certain types of construction projects. HB398 By Representatives Collins, McClurkin and Scott RFD Commerce and Small Business Rd 1 04-FEB-14 SYNOPSIS: Currently, under Chapter 12, Title 40, Code of Alabama 1975, the Department of Revenue is authorized to promulgate rules relating to the issuing of business and other licenses by the department. This bill would require that each applicant for a new or renewal license under Chapter 12 to provide his or her federal employer identification number or Social Security number. HB405 By Representative Wallace RFD State Government Rd 1 04-FEB-14 SYNOPSIS: Under existing law, an individual is disqualified for total or partial unemployment compensation if he or she received or has been determined eligible to receive governmental or other pension, retirement or retired pay, annuity, or similar periodic payment that is based upon the individual's previous work; provided, however, that for weeks of unemployment beginning on or after April 26, 1982, the amount of benefits payable to an individual for any week which begins in a period during which the disqualification provision applies, the amount payable to the individual is reduced by an amount equal to the periodic payment only if the payment is made under a plan maintained or contributed to by a base period employer. Under existing law, if, in accordance with the pension payment provision, any individual is awarded pension payments retroactively covering a period during which he or she received unemployment benefits, the retroactive payments shall constitute disqualification and any benefits paid during the period shall be recovered. This bill would clarify that the amount of benefits payable to an individual under these circumstances shall be reduced only if the payment is made under a plan that is maintained or contributed to by a base period employer, 100 percent employer-financed, and not contributed to by the worker. This bill would clarify that any pension payments retroactively awarded to an individual would constitute disqualification and require recovery of any benefits paid during the disqualification period only if the pension payments were made under a plan that is maintained or contributed to by a base period employer, 100 percent employer-financed, and not contributed to by the worker. HB465 - HB465 By Representative McClendon RFD State Government Rd 1 12-FEB-14 SYNOPSIS: This bill would provide for the extension of the effective date of a rule proposed by an agency or a division of an agency which primarily performs certification or license-related functions which is generally exempt from the act, but which rule the Joint on Administrative Regulation Review has determined has such a negative impact on business that the filing of a business economic impact statement is warranted. 10

13 HB543 - HB543 By Representative Ball RFD Constitution, Campaigns and Elections Rd 1 26-FEB-14 SYNOPSIS: Under existing law, a justice or judge must recuse himself or herself if the appearance of impropriety exists because a party in the case gave the judge a substantial campaign contribution. Under existing law, a judge is required to report the names of all campaign contributors before the term of office commences. Also under existing law, the attorneys for all parties are required to serve a certificate of disclosure of campaign contributions by the attorney or a party made to the judge presiding over the case. This bill would repeal the existing law requiring campaign contribution disclosures by judges and provide new criteria for recusal. This bill would provide that a justice or judge must recuse himself or herself if a reasonable person would perceive that the ability of the judge to be impartial is impaired or there is a serious objective probability of bias by the justice or judge due to the contribution. This bill would create a rebuttable presumption that the justice or judge should recuse himself or herself if the contribution exceeds 25 percent of the total contributions the justice or judge received during the election cycle. This bill would also provide for appeal of an order denying a motion to recuse. HB548 - HB548 By Representative Scott RFD Ways and Means Education Rd 1 26-FEB-14 SYNOPSIS: Under existing law, the term nexus is used to describe the amount and degree of business activity that must be present before a state can tax an entity's income. Multi-state taxpayers and the Department of Revenue must make nexus determinations regarding the taxpayer's corporate income tax filing requirements. Currently, there is nothing codified that provides a "bright line" test when determining nexus. This bill would establish a factor presence nexus standard for business activity for purposes of income tax. This bill would provide for the adoption of the Multi-State Tax Commission standard for determination of nexus. SB3 - SB3 By Senator Smitherman SYNOPSIS: Existing law authorizes the formation of limited liability companies and the filing of documentation of such formation with the Secretary of State. This bill would provide further for the formation of limited liability companies by replacing the current limited liability company law with an updated Uniform Alabama Limited Liability Company Law. This bill would clarify that a limited liability agreement is a contractual agreement between the parties to the agreement and may be modified to suit the needs of the parties. This bill would provide that certain obligations of the contractual agreement, such as the obligation of good faith and fair dealing, could not be modified. This bill would require a limited liability company to file with the Secretary of State certain documents providing for the formation, dissolution, merger, or conversion of the company as a means of providing notice to third parties. This bill would provide that the right of a person to direct and oversee the activities and affairs of the limited liability company would be determined by the limited liability company agreement, and, where the agreement is silent, by the members of the company. This bill would provide that a limited liability company may establish in its certificate of formation and its limited liability company agreement, one or more designated series of assets with which certain members may be associated and would provide that the assets of one series could not be used to satisfy the obligations of another series. SB5 - SB5 By Senator Blackwell RFD Finance and Taxation Education SYNOPSIS: Under existing law, an Alabama resident who incurs a capital loss is allowed to use a deduction for state income tax purposes only in the year in which the loss is incurred. Also under existing law, a net operating loss for state income tax purposes may be carried back two taxable years from the year in which the loss is incurred. This bill would allow certain capital loss provisions to be operative until the capital loss is exhausted. 11