ARBA Legislative Report 2-20-20

Week three is in the books and it was a cold, wet, quick week in Montgomery. Safety first as the legislature adjourned and left town before lunch today. The house finished up some bills on the regular order calendar in a pretty routine day, unlike their Tuesday when they heavily debated a bill that would require any municipality seeking an occupational tax to receive approval from the legislature first, while grandfathering in the existing ones. This was in response to Montgomery’s proposed 1-percent occupational tax, which they adopted at a Tuesday evening council meeting following the House’s action. Nice tit for tat to say the least.

Today, the senate cruised through some sunset bills ,which reauthorize the existence of boards and commissions for various trades. Tuesday, they held military appreciation day and passed an array of bills impacting the military including a in-state tuition bill for military children, qualified teaching certificate authorization for former military, magnate school access, and a bill to authorize charter schools near military bases to serve the military. Very patriotic and well thought out.

SB 216 by Sen. Whatley (R-Auburn) – Sales Tax exemption bill – Special thanks to Senator Whatley for sponsoring this bill to address an issue that has plagued us for too long. The sales tax exemption was removed on all public projects in 2003 under then Governor Riley when the Education Trust Fund was “stressed”. In 2013, they reinstated the tax exemption on vertical construction public projects, but left it on road and bridge projects. With two consecutive years of half a billion new dollars in the ETF and following passage of Rebuild Alabama, it’s time to focus on this overdue correction.

We estimate the amount of this tax to be between $30 and $40 million with the state’s share being about $16 million and the various cities and counties where projects are located sharing the rest. That math is based on using 30-percent as the share of a project cost that is materials and ALDOT’s let-to-contract annual budget of (in this case) $900 million (healthy during ATRIP). The bill has been assigned to the Senate Finance and Taxation Education Committee, which is listed below. Please makes contact with those you know. Chairman Orr will be handled by AAPA lobbyists at this juncture.

Senate Finance and Taxation Education Committee
Chair – Arthur Orr (R-Decatur) – 334-261-0758 – – DO NOT CALL
Vice Chair – Tim Nelson (R-Florence) – 334-261-0773 –
Rodger Smitherman (D-Birmingham) – 334-261-0870 –
Greg Albritton (R-Bay Minette) – 334-261-0785 –
Gerald Allen (R-Tuscaloosa) – 334-261-0861 –
Donnie Chesteen (R-Geneva) – 334-261-0890 –
Vivian davis Figures (D-Mobile) – 334-261-0871 –
Garlan Gudger (R-Cullman) – 334-261-0855 –
Jim McClendon (R-Springville) – 334-261-0789 –
Malika Sanders-Fortier (D-Selma) – 334-261-0860 –
Clay Scofield (R-Guntersville) – 334-261-0876 –
David Sessions (R-Mobile) – 334-261-0882 –
Bobby Singleton (D-Greensboro) – 334-261-0335 –
Jabo Waggoner (R-Vestavia Hills) – 334-261-0892 –
Tom Whatley (R-Auburn) – 334-261-0865 –

General Fund
The current General Fund budget appropriated $2.2 billion to operate most non-education functions of state government. An additional $360 million is available for the coming fiscal year, largely driven by upticks in online sales and use taxes and the insurance premium tax. In the context of recent decades, this level of General Fund growth is exceedingly rare, and legislative analysts cautioned budgetwriters to avoid committing to new, recurring expenditures. It begs the question on transfers from the Road & Bridge Fund. The $35 million transfer to the Court System is again eliminated from the budget. However, the $28.5 million to the Alabama Law Enforcement Agency remains.

Indemnification – Negotiations with the Association of County Commissions of Alabama regarding the indemnity clause in their contract continues. We hope to have a resolution on that by next week. In doing so, we would tailor our legislation to only address the contractor – subcontractor indemnification issue and leave out public owners – counties and ALDOT, who have also expressed concern with legislation that includes them.

Construction Zone bill – Currently, Alabama law doubles fines for only speeding in a construction zone when workers are present. That fine is only $20, which is clearly not enough of a deterrent. This bill would combine all moving violations into a law that would provide for a penalty with some real teeth – $250 or double the fine, whichever is greater. The bill would further deny civil recourse for anyone who has an accident in a construction zone when workers are present if they are determined to be under the influence.

Contractor liability – Amending the contractor liability law is a tall order, but there are several areas we would like to address including repealing language that states a “reasonable and prudent contractor should have known” something and the duty to report. Adding the acceptance doctrine to the law, which absolves a contractor of liability once the project has been accepted as complete to specifications and the owner has assumed maintenance responsibilities, is also a priority. We are currently working with the trial bar on this bill.

Bills of Interest

1. HB 21 – Pringle (R-Mobile) – SB141 – Elliott – Transportation Commission – 5-member commission from the five ALDOT regions appointed by governor.
2. HB 152 – General Fund – Clouse (R-Ozark) – transfers $28.5 mm to ALEA
3. HB 158 – Lee (R-Dothan) – SB 130 – Scofield – prohibits private auditing or collecting firms prohibited from recovering certain expenses
4. Elliott (R-Fairhope) – SB 4/SB 151/SB 152 – Income tax credit for tolls paid. Require ALDOT to complete economic impact study on toll projects. 152 is a constitutional amendment to require a referendum for a toll to be imposed.
5. SB 178 – Gudger (R-Cullman) – This bill would allow an awarding authority, under certain specified circumstances, to negotiate with the lowest responsible and responsive bidder when all bids received exceed the funding available to the awarding authority for the contract. Amended to only apply to Higher Ed.
6. SB 185 – Orr (R-Decatur) – This bill enhances the law enforcement and the courts ability to determine a driver’s impairment by allowing a chemical test, additional authority to withdraw blood and witness testimony.
7. SB 217 – Whatley (R-Auburn) – Requires cities and counties to spend any tax derived from gasoline on road and bridge projects.

April 20-24 is National Work Zone Awareness Week – Each year the Alabama Struck-By Alliance, made up of approximately 20 organizations from around the state, reaches out to the public through an awareness campaign asking them to slow down and pay attention when entering a Work Zone. That week is April 20-24 this year. We hope to have our work zone bill signed by the governor by then.