2017 Legislative Update: Week 9

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The ninth week of the 2017 Regular Session was a contentious one—particularly in the Senate, which worked on a series of bills relating to guns, abortion, and LGBT rights. Meanwhile the House addressed and passed measures that included a required civics test for high schoolers, legalization of fantasy sports, mandated purchase of insurance for autism coverage, and regulation of day care facilities run by religiously affiliated entities.

Governor Kay Ivey's decision to move the special election for the seat in the United States Senate currently held by former-Attorney General Luther Strange from November 2018 to December 2017 has added a layer of complexity to the goings on in Montgomery. Since the primary for the election is on August 15—less than four months away—and running no longer requires current office holders except sitting judges to give up the office they occupy, many elected officials have either announced or hinted at their intentions to challenge Senator Strange.

Neither budget was taken up by the House or Senate this week, leaving considerable work to be done in the last third of the session. Furthermore, the latest reports on legislative redistricting—which is required in the wake of a federal court's decision that race was impermissibly used as a factor in drawing their boundaries—are that as many as 90 districts will be affected. The redistricting process is expected to be highly time-consuming and intense.

Tax Credits

Late in the evening Tuesday, the House passed HB345, sponsored by Victor Gaston (R–Mobile). The bill would reauthorize Alabama's popular and successful historic tax credit program for five years, modifying it slightly to include changes recommended by a University of Tennessee study. For instance, the selection of projects that would receive the credits would no longer be on a first come, first served basis, but would be overseen by a committee that would score applications based on their merits. Additionally, the credits would now be refundable if the credit holder's tax liability in a given year were lower than the amount of the credit. The credits would still be transferable, but only once—and not for a value less than $0.85 for every $1.00 of the credit. The bill has moved to the Senate, where the companion legislation, sponsored by Senator Jabo Waggoner (R–Vestavia Hills) was reported favorably from committee several weeks ago. The Senate bill was amended in committee, so the changes made there will have to be reconciled with the House version if the bill is to receive final passage.

On Tuesday this week, Senate President Pro Tem Del Marsh (R–Anniston) introduced a bill, SB377, that would repeal Alabama's new markets tax credit. The tax credit, which has existed in its current form since 2012, provides incentives for investment in businesses and real estate projects in low-income communities. Alabama's tax credit largely mirrors a similar federal one. Nevertheless, Alabama's program did not receive a favorable report in the University of Tennessee study.

Church Sponsored Daycare Facilities

Under existing Alabama law, a daycare facility that is an "integral part" of a church or religious school is exempt from licensure and inspection requirements. Following a statewide wave of reports of abuse and neglect at daycares that were only nominally related to churches—or that were related to churches that had seemingly been created just to allow the facilities to qualify for the exemption—Representative Pebblin Warren (D–Tuskegee) introduced legislation to require all daycares to meet the same state licensure standards. After significant revisions, the House of Representatives passed that bill, HB277, on Thursday by a vote of 88–9. The current version of the legislation would require any daycare that receives governmental funding to obtain a license, annual fire and health inspections for all daycares, and annual reporting on safety and the criminal records of employees. The bill has not yet been assigned to a committee in the Senate.

Autism Insurance Mandate

After several hours of discussion, the House of Representatives overwhelmingly approved a measure to mandate insurance coverage for certain types of treatment for Autism Spectrum Disorder on Thursday. HB284, by Representative Jim Patterson (R–Meridianville), requires purchasers of health insurance to buy coverage for applied behavioral analysis, or ABA. As Representatives acknowledged on the floor of the House during discussion of the bill, the new state insurance mandate guarantees increased premiums for individuals and businesses with private health insurance and a significant cost increase to the state. HB284 also requires this coverage for state employees and education employees covered under PEEHIP. It does not include small plans for businesses with 49 or fewer employees, nor does it affect large plans that are covered by federal benefits-related laws such as ERISA. An amendment adopted by the House would require Medicaid and ALL Kids to cover the treatment. Estimates of the cost of this coverage to the state have not been made available at this time.

Medicaid False Claims Act

Senator Pittman (R–Montrose) held a public hearing this week on a bill he has introduced that would seek to provide a state-based remedy for false claims made to Medicaid. SB367, known as the Alabama Medicaid False Claims Act, would allow the state to recover up to three times the amount of a fraudulent claim for reimbursement made to Medicaid. The bill would also empower individuals to bring suits in the name of the state, for which they would receive a share of any damages recovered. The legislation mirrors existing federal false claims law, including the right for private individuals to sue on behalf of the government. As a result, some of the bill’s opponents have argued that the legislation is unnecessary, and will only lead to frivolous litigation in state courts. Senator Pittman has actively sought input from all stakeholders in an effort to address their concerns, and a substitute measure is expected to be up for a vote in committee next week.

Cloture Calendars in the Senate

On both Tuesday and Thursday, the Senate passed a series of measures that were opposed, though futilely, by the Democratic Caucus. The Republican majority invoked cloture, a procedure that ends debate on a bill, on four of the five bills passed on Tuesday and two of four bills passed on Thursday. Tuesday's agenda included two bills from the Senate Republican Caucus agenda: SB24, relating to firearms, and HB24, relating to the regulation of child placement agencies. Thursday was Pro-Life Day in the Senate, with a proposed constitutional amendment declaring Alabama a right to life state, a bill that would allow health care providers to refuse to perform services to which they had a conscientious objection, and a bill that would ban assisted suicide.

HB24, sponsored by Representative Rich Wingo (R–Tuscaloosa), prohibits the state from taking any adverse action against adoption or foster placement agencies for discriminatory actions taken by that agency that is based on a religious belief. While the bill only applies to agencies that do not accept federal or state funding, opponents have warned that the federal government might withhold funding for Alabama's Department of Human Resources if the state fails to meet federal standards for child placement. Because HB24 would prevent DHR from intervening in cases in which an agency claimed a religious motive, DHR might be unable to ensure that those standards were being met. Because the bill was amended in the Senate, it has been sent back to the House for a vote to concur in the amendment.

Conclusion

The Legislature has met for 19 of the 30 possible meeting days for this Regular Session. Because Alabama's Constitution does not permit the Session to last past May 22nd, it seems likely that the Legislature will begin to meet for more than two days a week in the four weeks that remain. Nevertheless, next week is expected to be a two-day week, with both the House and Senate meeting on Tuesday and Thursday and holding committee meetings on Wednesday.

The House will convene at 1:00 p.m. on Tuesday, April 25th. 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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