State Government

2014 legislative update: Alabama House committee votes to lift individuals' scholarship credit cap under Accountability Act

An Alabama House committee Wednesday approved a bill to erase a size limit on the state income tax credit that an individual can claim for contributions to groups that grant scholarships under the Alabama Accountability Act. HB 558, sponsored by Rep. Chad Fincher, R-Semmes, moves to the House.

The Accountability Act, enacted last year, provides state income tax credits to help parents of children in “failing” schools pay for private school tuition or a transfer to a non-failing public school. The law also provides tax credits for contributions to scholarship programs to help those students’ parents cover remaining costs.

Fincher’s bill would remove the Accountability Act’s current $7,500 annual cap on the tax credit that individuals or married couples can claim for contributions to organizations that grant scholarships under the act. Alabama still could provide a total of no more than $25 million of scholarship credits annually. Individuals and corporations also still could claim credits only for contributions up to 50 percent of their state income tax liability.

Susan Kennedy of the Alabama Education Association questioned Wednesday whether the state should pass a bill whose tax benefits would flow largely to Alabamians with extremely high incomes. Among those speaking in favor of the bill were Toby Roth, who represents an online education corporation, and Sharon Lewis, principal of the Oakwood Adventist Academy in Huntsville. Lewis said the Accountability Act has given children educational opportunities they otherwise would not have had.

Another portion of HB 558 would allow owners of S corporations and Subchapter K entities to claim tax credits for their share of the companies’ scholarship contributions. The bill also would revise the Accountability Act's definition of “failing” schools. Click here to read the Montgomery Advertiser’s report on the committee’s action for more details.

Lawmakers will return Thursday for the 24th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By M.J. Ellington, health policy analyst. Posted March 12, 2014.

2014 legislative update: Alabama House could vote next week on bill to end lifetime SNAP, TANF bans for people with felony drug conviction

The Alabama House could vote as soon as Tuesday on a bill that would allow people convicted of a drug-related felony to regain eligibility for food assistance or cash welfare benefits. A House committee Wednesday approved the bill, which the Senate passed last month. SB 303, sponsored by Sen. Linda Coleman, D-Birmingham, awaits consideration by the full House.

SB 303 would allow people convicted of a drug-related felony to regain eligibility for benefits under the Supplemental Nutrition Assistance Program (SNAP) or the Temporary Assistance for Needy Families (TANF) program if they successfully comply with their conditions of probation or parole and are otherwise eligible for assistance. The bill’s provisions would expire in three years unless lawmakers renew them.

Alabama is one of 10 states where people convicted of a drug felony face a lifetime SNAP eligibility ban. Alabama is also one of 12 states to apply a similar ban to TANF benefits. The bans apply even to people with a decades-old offense.

Other legislation affecting SNAP, TANF recipients also wins House committee approval

The House State Government Committee also approved a bill Wednesday to require drug testing for TANF applicants who had a drug conviction in the last five years. The Department of Human Resources (DHR) would pay for initial drug tests under SB 63, sponsored by Sen. Trip Pittman, R-Montrose, as well as any later required tests that the applicant passes. The bill would allow someone else to receive benefits on behalf of other family members if an applicant fails two or more drug tests. As with SB 303, SB 63’s provisions would expire in three years unless reauthorized.

People would have to apply for at least three jobs before applying for TANF in Alabama under another bill that won committee approval Wednesday. SB 115, sponsored by Sen. Arthur Orr, R-Decatur, was amended in the Senate at Alabama Arise’s suggestion to ensure that a TANF’s applicant’s cohabiting partner must have a legal obligation to support the applicant’s children before that partner’s income would count in determining TANF eligibility. SB 115 also would order recipients to comply with DHR’s requirements for job search preparation, education and other employment activities.

TANF recipients could not use EBT cards in bars, liquor stores, casinos, tattoo parlors and adult entertainment establishments under SB 116, which the committee endorsed Wednesday. SB 116, sponsored by Orr, also prohibits using TANF benefits to buy alcohol or tobacco.

The House committee Wednesday also approved a new version of SB 87, sponsored by Sen. Bryan Taylor, R-Prattville. The substitute bill would prohibit DHR from seeking a statewide waiver to provide extended SNAP benefits to able-bodied, childless adults. However, the bill would allow DHR to continue to seek local waivers in counties with extremely high unemployment rates.

The new SB 87 would authorize DHR to seek a federal waiver to participate in a pilot program to develop and test employment and training programs for SNAP participants. It also would require the department to implement a work and training program for SNAP recipients.

SB 303 and the other proposals will be among the bills awaiting House consideration as the session winds to a close. Lawmakers will return Thursday for the 24th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Carol Gundlach, policy analyst. Posted March 12, 2014.

2014 legislative update: Bill to increase homestead exemption for debtors clears Alabama Senate committee

Alabamians could shield more of their home’s value from creditors under a bill that the Senate’s General Fund budget committee approved 7-0 Wednesday. SB 427, sponsored by Sen. Cam Ward, R-Alabaster, awaits consideration by the full Senate.

Ward's bill would allow individuals to protect up to $30,000 of their home's value from creditors. The exemption for married couples would be up to $60,000. Current Alabama law sets that homestead exemption at just $5,000 for individuals and $10,000 for couples. Those amounts are among the weakest debtor protections in the nation and are so low as to prove virtually useless in shielding most homes from foreclosure in a debt collection case.

Most states have far higher exemptions. Some, including Florida and Texas, do not limit how much of a home's value can be protected from creditors. Ward's bill would update Alabama's exemptions for the first time in more than 30 years and give debtors a better chance to rebuild after a financial judgment is entered against them.

SB 427 also would allow debtors in bankruptcy cases to choose to exempt homesteads and personal property in accordance with federal bankruptcy law. The bill originally would have increased debtors' state exemptions for personal property as well, but the committee removed those provisions.

The new version also does not include a cost-of-living adjustment. That means the Legislature would have to raise the limit again in the future to prevent inflation from eroding the homestead protection's value. "I think it's something that this body should vote on, instead of some sort of artificial index number," Ward said.

Time is getting shorter for the bill to win Senate approval. Lawmakers will return Thursday for the 24th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Stephen Stetson, policy analyst. Posted March 12, 2014.

2014 legislative update: Changes to state landlord-tenant law approved in Alabama Senate

The Alabama Senate voted 28-0 Thursday for a bill that would adjust some deadlines in the state’s landlord-tenant law in favor of property owners. SB 291, sponsored by Senate President Pro Tem Del Marsh, R-Anniston, goes to the House.

Current state law requires landlords to provide tenants with a 14-day written notice if they plan to terminate the lease for a violation that does not involve failure to pay rent. SB 291 would halve that timeframe to seven days. The notice period to terminate a lease for failure to pay rent would remain at the current seven days.

Landlords could treat a property as abandoned if electrical service is cut off for at least a week under SB 291. The bill also would give landlords 60 days to refund a tenant’s security deposit or give notice of why they are keeping some or all of it, nearly doubling the current 35-day window.

The original proposal would have offered tenants no right to correct, or “cure,” problems cited as a lease violation unless the landlord gave express written consent. A Senate committee last month amended that provision to give renters two chances every 12 months to correct such problems. The Senate increased that to four chances Thursday by adopting an amendment offered by Sen. Rodger Smitherman, D-Birmingham.

Names of execution drug suppliers would be confidential under House-approved bill

The names of companies that provide Alabama with the drugs it uses to perform lethal injections would remain confidential under a bill that the state House passed 77-19 Thursday. HB 379, sponsored by Rep. Lynn Greer, R-Rogersville, goes to the Senate.

Greer’s bill also would shield the identity of anyone who participates in a state-sanctioned execution or performs any ancillary function related to one. Click here to read the Associated Press’ report on the House’s action.

Alabama House passes bill on redistribution of unused HIV drugs

Pharmacies that dispense HIV medications for or in HIV clinics could redistribute certain unopened drugs under a bill that the Alabama House passed 99-0 Wednesday. HB 138, sponsored by Rep. Patricia Todd, D-Birmingham, goes to the Senate.

HIV clinics now must destroy unopened medications if patients do not show up for treatment. Todd’s bill would allow pharmacies to redispense the drugs to other patients and would set controls on handling and oversight of the drugs. Arise and other consumer advocates last year urged Gov. Robert Bentley to support this policy change as his Medicaid Pharmacy Study Commission met to look at ways to reduce costs in the state’s Medicaid drug assistance programs.

Lawmakers will return Tuesday for the 23rd of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Chris Sanders, communications director. Posted March 7, 2014.

2014 legislative update: Arise members gather in Montgomery to support payday, title lending reforms

Nearly 100 Arise supporters gathered Thursday in Montgomery to urge reforms of payday and auto title lending in Alabama. Sen. Arthur Orr, R-Decatur, and Rep. Rod Scott, D-Fairfield, spoke at an Arise news conference to encourage advocates to push for their respective reform bills.

“There is no one in this state who does not have a friend or know someone with a friend who has been affected by these products,” Scott said of title loans. “They should not be allowed at these rates.”

Scott’s HB 406 would cap annual interest rates on title loans at 36 percent APR, down from the current 300 percent APR. Orr’s SB 410 would give borrowers more time to repay payday loans, which now carry annual interest rates of 456 percent APR, by extending loan terms to four months. (Most payday loans in Alabama are now two-week loans in practice.)

Orr’s bill also would create a statewide common database of payday loans. That would make it easier to enforce a current state law that prohibits borrowers from taking out more than $500 in payday loans at any one time. The state Banking Department last year proposed regulations to create a common database, but lenders sued to block the plan, claiming the department lacked the authority to do so.

SB 410 won committee approval Wednesday and could reach the Senate floor next week. Orr said changes to Alabama’s payday lending law have a real chance to be enacted this year. “In politics, many times it’s an incremental gain,” Orr said. “This year is really looking like a year when you will have made progress.”

Arise state coordinator Kimble Forrister thanked Orr and Scott for pushing their bills and said efforts to reform payday and title lending are gaining momentum statewide. Forrister pointed to the growing number of Alabama cities that have imposed moratoriums on new business licenses for such lenders, including Jasper just this week. He also noted the large number of lawmakers who are co-sponsoring SB 410 and HB 406. Nearly half of the Senate co-sponsors Orr’s bill, and more than half of the House co-sponsors Scott’s bill.

Scott urged advocates to remain steadfast. “We have to stay encouraged, but we also have to expand,” he said. “Where we are now is because of everyone’s effort. ... No matter what happens, we’re not going to give up the effort to change these rates.”

Lawmakers will return Tuesday for the 23rd of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Chris Sanders, communications director. Posted March 7, 2014.

2014 legislative update: Alabama Senate panel approves plan to give payday borrowers more time to repay

Borrowers would get longer to repay payday loans in Alabama under legislation that cleared a state Senate committee Wednesday. The bill also would create a statewide common database for tracking payday loans. SB 410, sponsored by Sen. Arthur Orr, R-Decatur, awaits consideration by the full Senate.

The Senate Banking and Insurance Committee voted 8-1 for the bill, which would extend payday loan terms to four months. Payday loans now must be 10 to 31 days in duration, but nearly all are two-week loans in practice. Orr’s bill originally would have given borrowers six months to repay payday loans, but the committee amended it to reduce that period to four months. Sen. Roger Bedford, D-Russellville, offered the amendment.

Sen. Trip Pittman, R-Montrose, cast the lone committee vote against SB 410. “I don’t think we realize the type of people that depend on this business that it works for,” Pittman said. “If it didn’t work, we have a free market, and they wouldn’t stay in business.”

Jabo Covert, a spokesman for the lender Check Into Cash, testified that lengthening loan terms could put stores out of business. When committee members asked what loan terms would work, Covert said extending terms to 45 days would be “just as bad” for the industry as six-month terms.

Current state law prohibits borrowers from taking out more than $500 in payday loans at any one time. But without a common database, many borrowers hop from storefront to storefront and take out multiple payday loans, racking up thousands of dollars of debt. A common database would alert lenders when a borrower already had received $500 and prevent them from extending additional loans.

The state Banking Department last year proposed regulations to create a common database, but lenders sued to block the plan, claiming the department lacked the authority to do so. A House committee voted Wednesday for a new version of HB 145, sponsored by Rep. Patricia Todd, D-Birmingham, that would create a common database.

Sen. Bill Holtzclaw, R-Madison, spoke in favor of Orr’s bill. Holtzclaw described high-cost loans he saw while in the military. The federal Military Lending Act of 2007 sets a 36 percent APR cap on the annual interest rates on traditional payday and auto title loans made to active-duty service members and their dependants.

SB 410 received “yes” votes from Sens. Bedford; Slade Blackwell, R-Mountain Brook; Jerry Fielding, R-Sylacauga; Bill Hightower, R-Mobile; Holtzclaw; Tammy Irons, D-Florence; Jabo Waggoner, R-Vestavia Hills; and Tom Whatley, R-Auburn. Pittman voted against the bill.

The bill could reach the Senate floor next week. Lawmakers will meet into Wednesday night and return Thursday for the 22nd of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Stephen Stetson, policy analyst. Posted March 5, 2014.

2014 legislative update: Alabama House committee OKs bill to create statewide database of payday loans

Enforcement of current Alabama law would be easier under a pared-down payday lending reform bill that emerged from a House committee Wednesday. Triple-digit annual interest rates on the loans would not change, however, under the new version of HB 145 that the House Financial Services Committee approved. The bill awaits consideration by the full House.

The committee substitute to HB 145, sponsored by Rep. Patricia Todd, D-Birmingham, removed language that would have capped the annual percentage rate (APR) on payday loans at 36 percent APR, down from the current 456 percent APR. The new version would require payday lenders to use a common statewide database to keep track of the high-interest loans.

Even with the removal of the interest rate cap, Todd touted the substitute bill as a step forward. “We think people won’t get into massive debt by shopping other places,” Todd said.

Current state law prohibits borrowers from taking out more than $500 in payday loans at any one time. But without a common database, many borrowers hop from storefront to storefront and take out multiple payday loans, racking up thousands of dollars of debt. A common database would alert lenders when a borrower already had received $500 and prevent them from extending additional loans. The state Banking Department last year proposed regulations to create a common database, but lenders sued to block the plan, claiming the department lacked the authority to do so.

Todd’s bill would require lenders to submit information annually to the Banking Department, which many advocates say would greatly improve access to data about the industry. With annual reporting requirements, consumer advocates could get a better understanding of the number of payday loans made each year in Alabama.

For more on the committee’s action on Todd’s bill, check out the Montgomery Advertiser’s coverage. The Legislature will return Wednesday afternoon for the 21st of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Stephen Stetson, policy analyst. Posted March 5, 2014.

2014 legislative update: Alabama Senate passes education budget; changes likely in House

State K-12 and higher education funding next year would remain far lower than it was before the recession under the Education Trust Fund (ETF) budget that the Alabama Senate passed 21-10 Thursday. The $5.9 billion budget is identical to the version that cleared a Senate committee Wednesday, but changes likely are ahead in the House.

K-12 schools and two-year colleges would get slightly more ETF support next year under the budget, while universities would receive slightly less. The Senate plan includes money to hire more middle school teachers and give all K-12 teachers a one-time 1 percent bonus next year.

Alabama State University (ASU) would lose about one-fourth, or $10.8 million, of its ETF support next year under the budget, accounting for almost the entire overall funding cut to universities. The budget would include $10 million for ASU as a “first-priority conditional,” meaning Gov. Robert Bentley could release the money to the university if ETF revenue collections exceed budgeted spending next year.

Bentley has said he does not support the proposed ASU cut. Sen. Trip Pittman, R-Montrose, who chairs the Senate’s ETF budget committee, said after Thursday’s vote that he will work with a House colleague to restore ASU’s funding, according to AL.com.

Senators rejected a proposed amendment by Sen. Quinton Ross, D-Montgomery, to shift $3 million from state-funded teacher liability insurance to ASU. The chamber also refused a proposal by Sen. Roger Bedford, D-Russellville, to use that money to help K-12 schools buy toilet paper and paper towels instead.

Pittman said he tried not to overestimate future economic growth while working on the ETF budget. “Revenue doesn’t just happen,” Pittman said. “The reality is that we’re in a very difficult financial situation.”

Lawmakers will return Tuesday for the 20th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Chris Sanders, communications director. Posted Feb. 27, 2014.

2014 legislative update: Senate passes bill to end Alabama's lifetime SNAP, TANF bans for people with felony drug conviction

People convicted of a drug-related felony could regain their eligibility for food assistance or cash welfare benefits in Alabama under a bill that the state Senate passed 18-8 Thursday. SB 303, sponsored by Sen. Linda Coleman, D-Birmingham, moves to the House.

SB 303 would allow otherwise eligible people to receive food assistance or cash welfare benefits even if they have a prior felony drug conviction, as long as they have completed their sentence or are complying with their probation terms, including court-ordered drug treatment. The Senate amended the bill Thursday to say its provisions would expire in three years unless lawmakers renew them.

Alabama is one of 10 states where people convicted of a drug felony face a lifetime eligibility ban under the Supplemental Nutrition Assistance Program (SNAP). Alabama also is one of 12 states to apply a similar ban to benefits under the Temporary Assistance for Needy Families (TANF) program. The bans apply even to people with a decades-old offense.

Sen. Trip Pittman, R-Montrose, said SB 303 could help people as they try to overcome a drug addiction and become productive workers. “It’s important to encourage people and try to give them support to be able to make good personal decisions,” Pittman said. “People who have paid their debt … will be able to get modest amounts of money that hopefully will get them on a better path.”

Other legislation affecting SNAP, TANF recipients also wins Senate approval

The Senate’s action Thursday came one day after the chamber voted 25-4 for a bill that would require drug testing for TANF applicants who had a drug conviction in the last five years. The Department of Human Resources (DHR) would pay for initial drug tests under SB 63, as well as any later required tests that the applicant passes. The bill would allow someone else to receive benefits on behalf of other family members if an applicant fails two or more drug tests. The provisions of SB 63, sponsored by Pittman, would expire in 2017 unless reauthorized.

People would have to apply for at least three jobs before applying for TANF under legislation the Senate passed 25-6 Wednesday. SB 115’s sponsor, Sen. Arthur Orr, R-Decatur, amended the bill at Alabama Arise’s suggestion. One change would ensure that a TANF’s applicant’s cohabiting partner must have a legal obligation to support the applicant’s children before that partner’s income would count in determining TANF eligibility. The other change deleted an obligation for TANF recipients to continue applying for three jobs every week to stay eligible. Instead, recipients would have to comply with DHR’s requirements for job search preparation, education and other employment activities.

TANF recipients could not use EBT cards in bars, liquor stores, casinos, tattoo parlors and adult entertainment establishments under SB 116, sponsored by Orr. The bill, which the Senate passed 25-0 Wednesday, also would prohibit using TANF benefits to buy alcohol or tobacco.

DHR could not continue to request waivers of federal SNAP work requirements for able-bodied, working-age adults with no dependents under a bill that senators passed 25-5 Wednesday. SB 87, sponsored by Sen. Bryan Taylor, R-Prattville, could limit Alabama’s ability to provide SNAP benefits to some single adults during economic downturns or after natural disasters. The bill that passed in the Senate is far narrower than the original version was.

SB 303 and the other proposals will be among the bills awaiting House consideration when lawmakers return Tuesday for the 20th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Carol Gundlach, policy analyst. Communications director Chris Sanders contributed to this report. Posted Feb. 27, 2014.

2014 legislative update: Legacies of recession, chronic shortfalls linger in Alabama's budgets

State support for education and other public services under the Education Trust Fund (ETF) and General Fund (GF) next year would not come close to its pre-recession level under the budgets that advanced in the Alabama Legislature on Wednesday. Both budgets are built on the assumption that the state will see no major revenue increases next year.

One-time teacher bonus, Alabama State funding cut in Senate committee’s ETF budget

Alabama would allocate $113.9 million, or 1.9 percent, less from the ETF next year under the $5.9 billion budget that won approval Wednesday in the Senate’s ETF budget committee. (By contrast, K-12 and higher education officials had requested $474 million more support next year.) If the budget becomes law, ETF funding in 2015 would be 18.5 percent less than it was in 2008, adjusted for inflation. The full Senate could consider the plan as soon as Thursday.

K-12 teachers would receive a one-time 1 percent bonus next year under the committee’s budget. Gov. Robert Bentley had recommended a 2 percent pay raise, but committee chairman Sen. Trip Pittman, R-Montrose, said he isn’t sure revenues will grow enough to sustain that pay increase. “You can’t spend optimism,” Pittman said. The committee rejected an attempt by Sen. Hank Sanders, D-Selma, to provide a 6 percent teacher raise.

K-12 schools and two-year colleges would receive slightly more ETF money next year under the committee’s budget, while universities would receive slightly less. The budget would include money to hire more middle school teachers and increase support for the Alabama Math, Science and Technology Initiative (AMSTI). Funding for the Alabama Reading Initiative would be flat.

Alabama State University (ASU) would lose about one-fourth, or $10.8 million, of its ETF support next year under the budget, accounting for almost the entire overall funding cut to universities. The budget would include $10 million for ASU as a “first-priority conditional,” meaning Bentley could release the money to the university if ETF revenue collections exceed budgeted spending next year.

Flat funding abounds for General Fund services

The House voted 80-20 Wednesday night to approve a GF budget that would be about the same size it was last year and is little different than the one that cleared a House committee last week. The $1.8 billion budget now goes to the Senate.

Medicaid, prisons, mental health care and other public services could struggle to maintain current services at the funding levels in the House’s GF budget. Overall GF support for those and other non-education services would be 8.3 percent lower next year than it was in 2008, adjusted for inflation, despite higher costs and population growth since then.

The House budget would cut GF support for Alabama’s prison system, which operates at nearly twice its designed capacity. Rep. Steve Clouse, R-Ozark, who chairs the House’s GF budget committee, said last week that he wants to work with House and Senate leaders to find more money for corrections.

Medicaid would see an 11.4 percent GF increase, though that amount still would fall short of what State Health Officer Don Williamson said the agency needs from the GF. Williamson said Medicaid could survive next year at the House’s proposed funding level by looking for more ways to trim costs in the prescription drug program and other areas.

Mental health services would receive the same amount of GF money next year, despite the increased demand for community-based mental health services following the closure of several state mental health hospitals. State courts, which have cut hundreds of jobs in recent years, would receive far less GF funding than they requested.

ALL Kids, which insures Alabama children whose low- and middle-income families do not qualify for Medicaid, would receive 28.3 percent more from the GF to help cover higher enrollment. A $13.9 million ETF boost for the Department of Human Resources (DHR) would help the agency offset an $11.8 million GF reduction. DHR provides child welfare, child support collection and elder abuse services. The agency also administers the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) program in Alabama.

Rep. Chris England, D-Tuscaloosa, said lawmakers have missed several opportunities to ease the burden on state budgets in recent years. Instead, England said, the Legislature has declined to increase the state cigarette tax, reform the state’s criminal sentencing system, or expand Medicaid eligibility under the Affordable Care Act.

The GF draws its revenues from a variety of sources that do not grow quickly enough to keep pace with cost increases. That leaves the budget with a structural deficit, meaning it often is strapped for cash even when the economy is doing well.

Rep. John Knight, D-Montgomery, said lawmakers eventually must solve Alabama’s perennial GF shortfalls. “At some point, we’re going to have to figure out how to say, ‘We’re going to do better,’” Knight said. “We can’t take care of the basic things we’re supposed to do.”

Time is getting shorter for the Legislature to finalize the budgets. Lawmakers will return Thursday for the 19th of 30 allowable meeting days during the 2014 regular session, which is expected to last until early April.

By Chris Sanders, communications director. Posted Feb. 26, 2014.

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