2016 Legislative Wrap Up- Part II of V- BP Settlement

bpWednesday, May 4th, marked the close of the 2016 Alabama Legislature’s Regular Session.  Legislators passed the constitutionally required appropriations bills fairly early in the session which left time for debate on several high profile issues.  Many of these issues were not resolved which causes speculation that a special session may be called later in the year.

A detailed analysis of several legislative initiatives will be discussed over the next couple of days; Part I- Fuel Tax (see www.alaforestrygovtaffairs.org/2016-legislative-wrap-up-part-i-of-v-fuel-tax-legislation/), Part II- BP Settlelment (today), Part III- Prison Construction, Part IV- Appropriations, and Part V- Other Legislation of Interest.

Today…. The BP Spill Settlement.

Alabama, pursuant to a settlement agreement negotiated by Attorney General Luther Strange, will receive $1 billion from BP over a 20 year period (approximately $50 million per year).  Legislators are concerned that there is a prospect that, for whatever reason, BP will not honor this agreement for its full term.  So there is a strong desire to “monetize” the payment stream through a bond issue.  Analysts estimate that such a bond issue would generate approximately $650-$700 million immediately (the difference between the $1 billion and the amount actually received is due to the uncertainty of the payment stream).

Once the decision was made to monetize the payment stream, the next question was how to spend this one-time money.  Several alternatives were considered, but none of them could gain the support necessary for passage during the Regular Session.

The whole process got started when the Senate originated a bill by Senator Bill Hightower (R- Mobile).  This bill, Option One, would have paid the $161 million debt to the Alabama Trust Fund borrowed in 2009 to prop up the General Fund.  This payback is required by the Constitution and must be paid by 2018.  The remainder of the funding would be used for road construction with the coast getting a vast majority of the funding.  Though it passed the Senate on a 30-5 vote, the bill ran into a brick wall in the House.

Powerful Chairman of the House Ways & Means General Fund Committee, Representative Steve Clouse (R- Ozark), introduced a separate bill that represented Option Two.  This option would pay back the $161 million and also would pay back the remaining amount owed from taking an additional $435 million out of the Alabama Trust Fund, once again to prop up the General Fund in 2013, 2014 & 2015.  Repayment of the $435 million is statutorily required over the next 20 years ($407 million currently remains on this debt).  Option Two would also repay funds owed by Alabama Medicaid to the federal government.  Any excess beyond that would go to the General Fund for appropriation.

As Option Two moved to consideration by the Ways & Means General Fund Committee, the Mobile and Baldwin county legislative delegations, not liking this option, proceeded to work together to shut down activity in the House through filibusters.  In order to appease the coastal legislators, Representative Clouse offered a compromise substitute to his bill that became Option Three.

Option Three would pay back the $161 million constitutional requirement and an additional $287 million that would be paid towards the original $435 million debt.  The $287 million would fast forward the payment stream required statutorily and would then leave approximately $120 million that would still be owed to the ATF.  The remaining amount of the funds, a little over $200 million would go to Mobile and Baldwin counties to be used for road projects.

Paying the $287 million to the ATF would “free up” $15 million that had been allocated for repayment in the 2017 FY general fund appropriation bill.  Additionally, $55 million (from previous BP payments) had been set aside for prospective debt repayment that could now be also be available.  This combined $70 million would be used for a one-time payment to Medicaid for the FY15 budget.

Clouse’s compromise bill, Option Three, then passed out of committee and the full House on an 82-12 vote.  At the same committee hearing, Senator Hightower’s bill was also given favorable consideration.

Clouse’s bill then moved upstairs to the Senate and was referred to the Finance & Taxation General Fund Committee.  At this point, two legislative days remained; the minimum amount of time necessary to pass the bill.  The Senate Finance & Taxation General Fund Committee is chaired by Baldwin County’s Senator Trip Pittman (R- Montrose).  Senator Pittman brought Clouse’s compromise bill, Option Three, up for discussion and it became immediately apparent that there was a great deal of disagreement over the bill.

Senator Arthur Orr (R- Decatur) an equally powerful chairman of the Senate’s Finance & Taxation Education Committee offered a substitute that became Option Four.  This option involved paying back the $161 million constitutional requirement and paying the remaining $407 million owed to the ATF in full, leaving approximately $100 million for road construction projects throughout the entire state’s nine ALDOT districts.  Each district would receive $10 million, while the Mobile/Baldwin district would receive $20 million.

In this option, Medicaid would also get the additional $70 million.  Orr’s Option Four was favored by a good number of legislators in central and north Alabama.  After explaining his substitute, Orr moved for passage.  Pittman then moved to table Orr’s motion.  Pittman’s tabling motion failed and then Pittman immediately moved to adjourn the meeting before any action could be taken on Orr’s substitute.  Senators then frantically met several times trying to come up with an acceptable compromise.  Ultimately, Pittman did not call another meeting of the committee and the 29th legislative day ended effectively killing the legislation.

Or maybe not…

On the final legislative day, in literally the final hour, a couple of Mobile House members tried a last ditch effort to resurrect Hightower’s bill (remember, Option One?  It had passed the Senate and was out of House committee) and tried to substitute it with Clouse’s bill, Option Three.  Due to the late hour, and maybe other unknown reasons, the motion to substitute failed on 37-50 vote.

So what does all this mean?

Well clearly there is no consensus on what to do with the $650 million available from the BP Settlement.  Equally clear, however, is that absent doing anything, the legislature will essentially fritter away $50 million per year as the BP payments will continue to go directly into the General Fund and be spent on ongoing operations.

AFA Position:

AFA supports a policy of having all one-time payments in excess of $5 million be placed into the Alabama Trust Fund.  The BP payments meet this criteria.  In addition, AFA supports a policy of the state repaying its debts out of the ongoing operational appropriations of general fund agencies through savings generated by reducing the size of overall government.

Recognizing that our position is not universally supported by the legislature and knowing that, absent a consensus plan, the BP payments will not be used in a fiscally responsible manner,  AFA does support the monetization of the BP payment stream for the purposes of retiring state debt and the remainder being placed in the ATF in perpetuity.



2016 Legislative Wrap Up- Part I of V- Fuel Tax Legislation

pumpWednesday, May 4th, marked the close of the 2016 Alabama Legislature’s Regular Session.  Legislators passed the constitutionally required appropriations bills fairly early in the session which left time for debate on several high profile issues.  Many of these issues were not resolved which causes speculation that a special session may be called later in the year.



A detailed analysis of several legislative initiatives will be discussed over the next couple of days; I- Fuel Tax, II- BP Settlelment, III- Prison Construction, IV- Appropriations, and V- Medicaid.

Today…the Fuel Tax. 

Representative Mac McCutcheon introduced legislation that would have increased gasoline and diesel taxes to the average of the bordering states.  This would have increased the tax by six cents/gallon (a $200 million annual increase) immediately and the legislation also included language that the tax would automatically adjust once every four years for the next 12 year period.

The fuel tax was not ever brought to the floor of the House of Representatives for a vote supposedly because the Senate had indicated it would not pass the bill and House members did not want to go on record voting for a tax increase if it was not going to be supported in the upper chamber.

After the appropriations bills (or “budget” bills) have been passed and transmitted to the Governor, legislation only requires a simple majority of those present and voting for passage.  In the House, 53 votes are needed if all 105 representatives are present.  Democrats represent 33 votes and it appeared that the conservative block of Republicans had gathered the 20 votes they needed in conjunction with the Democrats to block the legislation.  But it never came to a vote.

In the Senate, a simple majority is 18 votes.  Proponents of the bill had the votes for passage, however, there were 6 senators committed to filibustering the tax increase.  In order to stop the filibuster, a cloture petition requiring 21 signatures is required.  Opponents to the bill had 15 fiscally conservative senators that were not willing to cloture their fellow Republicans so there were not enough votes to stop the debate.  Several of these 15 senators came under incredible pressure from the members of the BCA, Roadbuilders, Heavy Equipment vendors and Engineering Companies in their area.

Threat of the fuel tax being brought up existed until there were only 2 legislative days left.  At that point there was not enough time to pass it in the House and the Senate and the bill died.  Expectations are that the fuel tax will continue to be brought up whenever the legislature meets, including the potential special session later this year.

An increase in the fuel taxes, if one is enacted, will be distributed pursuant to legislation enacted into law that was introduced and managed by Senator Gerald Dial.  This new law, that addresses fuel tax increases imposed in 2016 or 2017, will distribute the first $32 million raised annually (one penny of the increased tax) would be used as the payment stream for a new bond issue to fund a new round of ATRIP projects for the counties.  Counties that still have posted bridges must use this funding for bridges first before any roadwork can be done.  The remaining funding would be distributed 2/3 to  ALDOT and 1/3 to the counties.

Dial’s bill also included “accountability” measures that would require that all funds be used only for roads and bridges and could not be used for administrative overhead, equipment purchases, offices, etc.

AFA Position:

AFA supports sufficient funding for rural infrastructure, specifically, the repair/replacement of the approximate 1,000 bridges that are posted.  However, AFA further believes that adequate funding would exist for this purpose if existing fuel tax revenues are allocated fairly between ALDOT and the counties.  Currently, 99% of the tax on diesel fuel is directed to ALDOT, while the current tax on gasoline is distributed 55% to ALDOT and 45% to the counties.  AFA supports allocating the existing diesel tax in a similar fashion to that of the gasoline tax.

While You Were Sleeping During the General Fund Debate….

save-spendIn 2015, the Alabama legislature made changes to the Rolling Reserve Act that are beginning to have an impact on the Education Appropriations process as the legislature works to finalize education spending plans for the FY17 fiscal year (begins October 1, 2016).

Originally, the Rolling Reserve Act (which was adopted in 2011 shortly after the Republicans gained control of the legislature) set a cap on education spending based on the prior 15 years average of actual education revenues plus 40% of any new revenue measures passed in the previous legislative session.  This was a vast improvement over the previous method of estimating how much revenue might come in for the year and appropriating that amount.

Additionally, the original Rolling Reserve Act would put Excess Funds (actual revenues that exceeded the cap) into a Budget Stabilization Fund (until it reached 20% of the current year appropriations for education spending; approximately $1.2 billion) and then would begin rolling over into the Education Trust Fund Capital Fund (which could be utilized for education related capital projects).

The original Rolling Reserve Act was a fiscally responsible and prudent budgeting tool.

So of course, the legislature had to change it; which they did during the second special session in 2015.  While everyone else was focused on trying to raise taxes to fund Medicaid through an agonizingly long legislative year, this bill changing the Rolling Reserve Act went practically unnoticed.

The new Rolling Reserve Act now sets a cap based on 14 of the 15 highest previously funded years, adds the amount for the Prepaid Affordable College Tuition (PACT) program and adds 100% of newly enacted revenue measures.  The result is a much higher cap.

Additionally, the new Rolling Reserve Act changes the distribution of any Excess Funds.  Now it only puts 1% of the prior year spending amount into the Budget Stabilization Fund (2% for FY15 only) up to 7.5% of the prior year expenditures (which would be approximately $450 million).  The remaining amount is deposited into an Advancement & Technology Fund to be appropriated in the next fiscal year for school related repairs, deferred maintenance, technology and equipment (read…slush fund).

So what’s the impact of these changes?

In FY15 (ended September 30, 2015), Excess Revenues for education were $140.1 million.  All of these funds would have been placed in the Budget Stabilization Fund pursuant to the original Rolling Reserve Act.  However the new distribution resulted in $118.3 million going to the Budget Stabilization Fund and $21.8 million went to the Technology Fund.

We are currently in FY16, but the estimates are that there will be $195 million in Excess Funds based on a cap of $5.95 billion (the amount that was appropriated) and estimated revenue of $6.15 billion.  The distribution, pursuant to the new Rolling Reserve Act will be $59.5 million to the Stabilization Fund and a whopping $135.5 million to be appropriated by the legislature for special projects in 2017.

As the legislature now considers the FY17 Education Appropriations, they are working off a cap of $6.43 billion (thanks to the new Rolling Reserve Act) while expected revenues are $6.33 billion.  Since anticipated actual revenue is less than the cap, there is no expectation of putting any money into the savings account for FY17.

But….spending on education will now go up an incredible $382 million over the prior year (FY16).

Thanks to the new Rolling Reserve Act, we now have a new cap that is higher than expected revenue and no savings will be put away….in spite of having an increase in actual revenue of $186 million.

Fiscal responsibility and prudent budgeting have been tossed aside.

Who was the architect of the new Rolling Reserve Act?


Senator Trip Pittman (R- Montrose) sponsored it in the Senate and Representative Bill Poole (R- Tuscaloosa) sponsored it in the House.  Interestingly, these were the chairmen of the Education Appropriation committees in both houses.

In the Senate, one republican member voted against the bill….Senator Bill Holtzclaw.  Three other republicans “passed” on the vote….Senators Pittman, Scofield and Stutts.  22 Republicans voted for the measure.

In the House, the vote was 88-14.  The only republican members voting against the measure were Representatives Harbison, Henry, Holmes (Mike), Jones, Moore (Barry), Wadsworth, Whorton (Issac) and Wharton (Ritchie).

Good thing the AEA is not as powerful as they once were….right?

Must See Video- Cut Government before Raising Taxes

gastaxUnfortunately, this is not an April’s Fool Joke.

The Alabama House of Representatives is expected to consider raising fuel taxes by $200 million as early as next Tuesday, April 5th.  The legislation, HB394, introduced by Representative Mac McCutcheon (R- Madison) will raise fuel taxes (gasoline and diesel) to the average of the taxes/fees placed on gasoline by the contiguous bordering states.  This will result in an increase of approximately six cents/gallon.

Opponents to the fuel tax increase maintain that there is plenty of opportunity to cut the size of government to address the critical need for infrastructure…without having to raise taxes.  Created by Representative Will Ainsworth (R- Guntersville), a video has been produced that stars fellow conservative members of the House and Senate.  Their message is compelling…..Watch the video below and let us know what you think…..

McCutcheon Introduces $200 Million Fuel Tax Increase

mccutcheonAs expected, Representative Mac McCutcheon (R- Madison) introduced the second bill of a two bill package that will result in an increase in taxes on gasoline and diesel fuel of six cents per gallon.  HB394 was considered and given a favorable report by the House Transportation, Utilities & Infrastructure Committee today.  It will receive its second reading and will be available for full House consideration as early as next week, but most likely will not be addressed until legislators return from Spring Break the first week of April.

HB394 ties the total fuel taxes paid in Alabama to the average taxes/fees placed on gasoline by the contiguous bordering states.  The average of the taxes/fees for bordering states on gasoline is 26.95 cents/gallon, while Alabama is currently at 20.87 cents/gallon.  Therefore, the tax on gasoline will increase by 6 cents per gallon upon passage of this legislation.

Interestingly, the bill also ties the increase in diesel fuel taxes to that of the gasoline average.  The current average of the taxes/fees for bordering states on diesel is 26.31 cents/gallon, while Alabama is currently at 21.85 cents/gallon.  This is a differential of 4 cents/gallon, but since the proposed legislation ties the increase for diesel to the border state gasoline average, diesel will increase 6 cents/gallon which would place Alabama above the border state average on diesel by 2 cents/gallon.

The legislation also has an automatic adjustment mechanism that will re-calculate the border state average once every four years over the next 12 years.  Not coincidentally, the adjustment occurs in the year following the election of the legislature.

The fuel tax increase contemplated by the legislation will result in a $200 million increase in taxes.

Ainsworth Only “No” Vote in Committee

The House Transportation Utilities & Infrastructure Committee is chaired by Representative Lynn Greer (R- Rogersville) and is made up of 9 Republicans and 4 Democrats.  McCutcheon’s bill, along with Senator Gerald Dial’s bill, SB180 (the “Accountability” bill directing how the increased taxes will be spent) were both given a favorable report on voice votes by the committee.  The only “No” vote on the tax increase was cast by Representative Will Ainsworth (R- Guntersville).  If you would like to contact Ainsworth, a rising star in conservative circles, he can be reached at will.ainsworth@alhouse.gov.

The other members of the Committee are Representatives Joe Faust (R- Fairhope), George Bandy (D- Opelika), Napoleon Bracy (D- Prichard), Barbara Drummond (D- Mobile), Victor Gaston (R- Mobile), Dexter Grimsley (D- Newville), Nathaniel Ledbetter (R- Rainsville), Phillip Pettus (R- Killen), Chris Sells (R- Greenville), Kyle South (R- Fayette) and Margie Wilcox (R- Mobile).

The committee considered the legislation for approximately 30 minutes and at no time did any committee member acknowledge that the legislation creates a $200 million tax increase.

Lots of Trough Feeders

The list of supporters for the $200 million tax increase is a long one.  Led by the Business Council of Alabama, the coalition of those that will benefit from road construction projects include the Alabama Department of Transportation, the Alabama Roadbuilders Association, the Association of County Commissions of Alabama, contractors, engineers and others.

“Thank Goodness for Mississippi”

The taxes/fees paid by the citizens of the State of Mississippi are 18.79 cents/gallon for gasoline and 18.4 cents/gallon for diesel, representing the lowest of the four contiguous border states.  However, legislators in Mississippi are considering raising their taxes/fees on fuel by a whopping 17 cents/gallon.  If this were to occur, their action, taken in Mississippi, will raise Alabama’s fuel taxes by another 4 cents/gallon or another $130 million.  Alabama’s citizens, in effect, will have their taxes raised without any representation.  Similarly, the State of Florida pays 36.58 cents/gallon in taxes/fees on gasoline, of which 19 cents/gallons are imposed by the various counties.  Again, Alabama’s citizens could be subject to an increase in taxes because of an action taken in a county in Florida.

Stay tuned….

AFA Legislative Update

statehouse3The Alabama Legislature returns this week to work its 15th and 16th legislative days.  The pace of work has been brisk and principally directed towards passing the constitutionally mandated spending bills as early as possible, perhaps before they take Spring Break on the week of March 28th.

General Fund Appropriation

The Senate has passed a General Fund Appropriation bill (SB125) and Chairman Steve Clouse has quickly moved the bill through the House Ways & Means Committee to allow floor consideration as early as Tuesday of this week.  The House committee made some slight changes to the Senate version and the Senate is expected to concur with those changes if the bill comes out of the House in similar fashion to what was passed from committee.  There is expected to be much discussion regarding Medicaid funding and it will probably be a contentious day in the House.  If the Senate concurs with the House bill, the Governor is expected to veto the bill because it does not include enough for Medicaid.  The legislature is expected to override the Governor’s veto and is anticipating a potential special session to address the issue later in the year.

Education Fund Appropriation

The Appropriation bill for education spending, HB117 sponsored by Representative Bill Poole (R- Tuscaloosa) has passed the House of Representatives and now moves to consideration by the Senate’s Finance & Taxation Education Fund committee.  The committee, chaired by Senator Arthur Orr (R- Decatur) is expected to consider the bill in the next week or so.  The bill passed with no opposition in the House.

Fuel Tax Increase

The House of Representatives is expected to take up the “Accountability” portion of the fuel tax increase package, SB180 sponsored by Senator Gerald Dial (R- Lineville), on Wednesday in the House Transportation committee.  The long-awaited introduction of the second bill, the actual fuel tax increase itself, is also expected to occur this week.  The bill, sponsored by Representative Mac McCutcheon (R- Madison), is expected to include an increase in both gasoline and diesel taxes, a mechanism to automatically adjust the tax on a four year basis (without any future votes required) and an index from which to make the adjustment.  The index most prominently discussed to date would include an average of surrounding contiguous states.  AFA is opposed to any new fuel tax increase until transparency and fiscal accountability and a change in prioritization (allowing counties more revenue) for existing fuel taxes is implemented.  An automatic adjustment mechanism, especially one linked to other state’s actions, is also not supported.

Property Tax Increase

A bill, SB136, sponsored by Senator Vivian Figures (D- Mobile) would set up a state-wide referendum to increase property taxes by 5 mils to be dedicated to Medicaid funding.  The bill was given a favorable report out of the Senate’s Finance and Taxation General Fund Committee last week.  The committee, chaired by Senator Trip Pittman (R- Montrose), voted 7-6 in favor of the bill.  During the committee’s discussion, it was apparent that several committee members were in favor of discussing property tax increases as part of the overall “solution” for the constantly challenged General Fund Appropriations process.

The six senators that opposed the bill were Clyde Chambliss (R- Prattville), Steve Livingston (R- Scottsboro), Tim Melson (R-  Florence), Paul Sanford (R- Huntsville), Larry Stutts (R- Tuscumbia) and Cam Ward (R- Alabaster).  Please contact these members and express your appreciation for their support in opposing the property tax increase.  Their contact information can be obtained here.

The seven senators voting in favor of the property tax increase included 4 Republicans and 3 Democrats:  Trip Pittman (R- Montrose), Greg Albritton (R- Range), Bill Holtzclaw (R- Madison), Jabo Waggoner (R- Vestavia Hills), Priscilla Dunn (D- Birmingham), Billy Beasley (D- Clayton) and Bobby Singleton (D- Greensboro).



AFA Legislative Update








The Alabama Legislature met for three legislative days this past week and has now completed one third of the allotted 30 working days for the session.

General Fund Appropriation

Senate Finance & Taxation General Fund Chairman Trip Pittman (R- Montrose) quickly moved the General Fund FY17 Appropriation bill through committee and the full Senate this week. The bill allocates $1.82 billion in spending for non-education government agencies.  The bill includes level funding of $685 million for Medicaid. The Alabama Forestry Commission received $6.7 million in General Fund dollars which is a reduction of $300,000 from the current year. The funding bill appears to be on an expedited schedule and now goes to the House of Representatives.

Fuel Tax Increase

The first bill of a two bill package passed out of the Senate’s Transportation and Energy Committee yesterday. A substitute to SB180 was offered by the bill’s sponsor, Senator Gerald Dial (R- Lineville). This bill, referred to as the “Accountability” bill, sets forth the criteria for allocation of any new revenues that may materialize from a planned second bill to increase fuel taxes. Dial’s Substitute made more money available to local uses than the previous proposal. The Substitute sets aside $32 million generated by the increased taxes for a new ATRIP program that will be used as a payment stream for a new bond issue for county road and bridge projects. Additionally, each county will receive an additional $500,000 that was previously available but only with a match requirement. The Substitute removes the match requirement. There is no obligation on the counties to use their money to address structurally deficient bridges.

The second bill will actually increase the tax on diesel fuel and gasoline. Sponsored by Representative Mac McCutcheon, the bill will be introduced in the House of Representatives and is expected to propose an increase of $0.12/gallon on diesel and gasoline over a three year period. A $0.12/gallon increase results in a whopping $400 million tax increase. Local entities would get an increase of $180 million over their current allocation.

Workers Compensation

AFA is promoting a bill to reduce the uncertainty of workers compensation expense regarding future liabilities faced by the Forest Fund and its clients. SB122, sponsored by Senator Arthur Orr (R- Decatur), received a favorable vote in the Senate’s Fiscal Responsibility and Economic Development Committee on a 12-2 vote.

Special thanks should be sent to Senator Orr for handling the bill, Senator Phil Williams (R-Gadsden) the Chairman of the Committee and the following Senators for voting with us; Bill Hightower (R- Mobile), Clay Scofield (R- Guntersville), Clyde Chambliss (R- Prattville), Greg Reed (R- Jasper), Jim McClendon (R- Springville), Larry Stutts (R- Tuscumbia), Paul Sanford (R- Huntsville), Steve Livingston (R- Scottsboro), Tim Melson (R- Huntsville), and Trip Pittman (R- Montrose). You can find the contact information for the Senators at http://www.legislature.state.al.us/aliswww/SenatorsPicture.aspx.

The only two Senators voting against us were Senators Cam Ward (R- Alabaster) and Bobby Singleton (D- Greensboro). Representatives of the plaintiff lawyers association testified at the committee hearing against the bill.

The bill now moves to consideration by the Rules Committee for placement on the Special Order Calendar to allow for consideration by the full Senate.

AFA Legislative Update

capitol.jpgThe Alabama Legislature convenes today for Day 5, the first of an anticipated three day workweek. The pace of activity has been brisk as it appears the members desire to complete their work in an expeditious manner.

Each year, the legislature must address “sunset” legislation by the 10th legislative day. Sunset legislation involves evaluating the need to keep agencies, boards and commissions operational. If the legislature decides that one is not needed, they would simply not vote to extend it or, in effect, “sunset” it. The fact that the legislature is addressing these bills early is indicative of their desire to move quickly through the session.

The only other responsibility the legislature has is the passage of appropriations bills. At this point the General Fund Appropriations (SB125/HB104) and the Education Trust Fund Appropriations (HB117) bills have been introduced but only reflect the Governor’s plan. The legislative versions are expected to be substituted in committee. Currently no committee hearings have been scheduled to address the appropriations bills.

Tax Incentives

A couple of good tax incentive bills are making their way quickly through the process. SB131 creates an income tax for contributions to health savings accounts mirroring what is allowed by federal law. SB131 is sponsored by Senator Paul Sanford (R- Huntsville) and has been given a favorable report out of committee.

HB36 creates a tax incentive for a small business that hires new employees during the course of the year. Sponsored by Representative Kyle South (R- Fayette), the bill has passed the House and has been assigned to the Senate’s Fiscal Responsibility and Economic Development Committee.

Fuel Tax Increase

The plan to increase fuel taxes began its process in the Senate last week. The plan involves the passage of two bills; the first is an “accountability” bill that will determine how the new tax revenue is distributed and spent and the second will be the actual tax increase. SB180, sponsored by Senator Gerald Dial (R- Lineville), was brought up in the Senate’s Transportation & Energy Committee last Thursday. Dial’s bill would allocate 2/3 of the new revenue to the State’s DOT and 1/3 to local entities (counties and municipalities).

Senator Greg Albritton (R- Range) offered a substitute to SB180 that would; (1) distribute the new revenue at 55% to the DOT and 45% to the locals, (2) require any new tax revenues received by the counties to be used to replace/repair structurally deficient bridges first, and (3) allocates the existing diesel tax revenue at 55% to the DOT and 45% to the local entities (currently 98% goes to DOT). If adopted, Albritton’s Substitute would re-prioritize $62 million to counties and municipalities that currently goes to DOT, regardless if whether a tax increase is adopted. AFA is supporting the Albritton Substitute.

The second bill, increasing the fuel tax, is expected to be introduced in the House by Representative Mac McCutcheon (R- Huntsville) only after the Senate has passed the “accountability” bill. The tax increase being discussed is 6 cents/gallon the first year, an additional 3 cents/gallon the second year and an additional 2 cents/gallon the third year. The total 11 cents/gallon increase is equivalent to a $368 million increase.

Legislative Action Alert!

The Alabama Senate’s Transportation & Energy Committee is considering SB180 sponsored by Senator Gerald Dial (R- Lineville). The Alabama Forestry Association and the Alabama Farmer’s Federation are working together to support a Substitute to SB180 that is being offered by Senator Greg Albritton (R- Bay Minette).

Senator Albritton’s Substitute would re-allocate $62 million of existing diesel tax revenue to the counties for road and bridge projects. This would give the counties much needed revenue without having to raise taxes.

Please contact your county commissioners immediately and let them know about Senator Albritton’s Substitute and ask them to call their senators and express support for the Substitute.

If you are able to make contact with a commissioner, please let Bill Harris know the outcome of your discussion at bharris@alaforestry.org. We need to know what contacts have been made.

The Senate Transportation and Energy is chaired by Gerald Allen (R- Tuscaloosa) and is made up of Senators Greg Albritton (R- Bay Minette), Clyde Chambliss (R- Prattville), Linda Coleman (D- Birmingham), Gerald Dial (R- Lineville), Jimmy Holley (R- Elba), Bill Holtzclaw (R- Madison), Steve Livingston (R- Scottsboro), Jim McClendon (R- Springville), Arthur Orr (R- Decatur), Greg Reed (R- Jasper), Quinton Ross (D- Montgomery), Hank Sanders (D- Selma), Clay Scofield (R- Guntersville), Cam Ward (R- Alabaster) and Tom Whatley (R- Auburn).

Supporting us today in committee were Senators Albritton, Allen, Chambliss, Holtzclaw, Livingston, Orr, Scofield and Sanders. Please contact these senators (their contact information can be found at www.legislature.state.al.us/aliswww/ISD/Senate/ALSenators.aspx) and express your appreciation for their support and encourage them to continue to support the Substitute.

The Transportation and Energy Committee is expected to meet early next week on Tuesday, February 16th so time is of the essence.

AFA On the Road to Notasulga

DSC_0033The Alabama Forestry Association will host a Capital District Meeting and Auburn Area Regional Reception on Thursday, February 11th at Coach Pat Dye’s Crooked Oak Lodge in Notasulga.  The District Meeting will begin at 5:00 pm CST and the Reception will last from 6:00 pm CST until 8:00 pm CST.  If you have not already registered, you can do so by going to our website by clicking here.

This is one of our most highly anticipated events and we are very grateful for the generous support provided by our sponsors; First South Farm Credit, Auburn Bank, Southern Loggers Cooperative, King Auto, Daniel & Son, Country & Commercial Properties, Beck’s Turf Farm and Southeastern Land Group.

The world famous and always popular Barbecue House of Auburn will once again cater the event and we expect an excellent turnout just for the purpose of sampling their superb food.

In addition, we appreciate Dave Milton with Southeastern Land Group for being a sponsor and he will have a special presentation to make regarding our late friend and long-time AFA member Mason Dollar.

Please plan on joining us this Thursday to enjoy fellowship, good food, refreshments and to get an update on what AFA is planning for 2016.