2016 Legislative Wrap Up- Part III of V- Prison Construction

prisonWednesday, 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 (see HERE), II- BP Settlement (see HERE), III- Prison Construction (today), IV- Appropriations, and V- Other Legislation of Interest.

Today…. Prison Construction

Alabama prisons are currently occupied by 188% more prisoners than there are beds.  This is defined as “overcrowding.”  The prisons have 13,318 beds to house 25,102 prisoners.

On May 21, 2015, Alabama Governor Robert Bentley signed legislation, SB67 sponsored by Senator Cam Ward, which was intended to provide sweeping changes to sentencing and probation standards with the intent to reduce crowding to a level of 137%.

The changes seek to steer low-level offenders away from prison by creating a new Class D felony category and to reduce recidivism with making changes to probation and supervision.  The legislation was the product of a Prison Reform Task Force.

The Alabama prison system was placed in federal receivership in the 1970’s, which led to a court-ordered release of inmates.  The U.S. Department of Justice is investigating conditions at the state’s only prison for women after accusing the state of failing to protect inmates from sexual abuse and harassment.  The Equal Justice Initiative and the Southern Poverty Law Center have filed separate suits on behalf of state inmates to address safety, health and disability issues.

The changes made by SB67 have only recently begun to be implemented.  In February, 2016, the Alabama Board of Pardons and Paroles announced that it was hiring 100 new officers and another 23 probation and parole specialists.  Additionally, a new Day Reporting Center opened in Birmingham in January and others are expected to be opened throughout the state.  These changes will theoretically allow supervision of all prisoners that are released for parole.

The legislation also provides $4 million in funding to expand substance abuse treatment for probationers and parolees.

Interestingly, the Prison Reform Task Force recommendations make no mention about the need to construct new prisons.  In fact the task force was told that “Alabama cannot build its way out of the chronic overcrowding of state prisons.”

The Governor, however, has apparently come to a different conclusion.  While the changes created by SB67 were still in their formative stages, he proposed to the legislature a massive $800 million prison building plan that would result in the construction of 4 new prisons and the closure of 14 older facilities.

The legislation, SB287 sponsored by Senator Trip Pittman (R- Montrose) passed the Senate on a 23-11 vote.  Only five Republican senators voted against the plan; Bill Holtzclaw (R- Madison), Paul Sanford (R- Huntsville), Shay Shelnutt (R- Trussville), Paul Bussman (R- Cullman) and Clay Scofield (R- Guntersville).

The $800 million in funding is proposed to come from a bond issue that will be result in a $50 million payment requirement over the next 30 years ($1.5 billion repayment).  Proponents of the bill maintain that the $50 million will come from “savings” produced by consolidating the prisons (requiring fewer personnel) and reduced maintenance expense.

No economic study was publicly produced to evaluate whether the savings projection was realistic.  Additionally, no economic study was provided to determine the impact that prison facility closure would have on the local communities where they are currently located.  There was also no study discussing the impact on prison personnel that would be relocated.  In fact, there was no disclosure at all regarding where the new facilities would be constructed.

SB287 also set forth a no bid process for the construction project.

The bill reached the House, passed out of the Ways & Means General Fund Committee and was considered before the full House on April 28th, the 28th legislative day.  During House consideration, the bill became quite controversial.  Several representatives attempted to amend the bill.

Representative Mike Holmes (R- Wetumpka) offered an amendment that would preclude the state from closing an existing prison until the Department of Corrections had conducted an economic impact study to determine the impact of the closure on the region’s employment, economic growth and debt service (many communities have outstanding debt requirements for infrastructure they constructed on behalf of the prisons).

Representative Holmes’ amendment passed on a 49-44 vote and the proponents of the legislation were clearly not pleased.  Voting on the prevailing side were 23 republicans and 26 democrats.  After considerable arm-twisting, the vote was reconsidered and this time the amendment failed on a 54-33 vote.  7 republicans and 9 democrats changed their vote.  The republicans were; Dickie Drake (Birmingham), Mickey Hammon (Decatur), Corey Harbison (Cullman), Steve McMillan (Bay Minette), Barry Moore (Enterprise), Jim Patterson (Meridianville) and Ritchie Whorton (Owens Cross Roads).

Later in the debate, Representative A.J. McCampbell (D- Livingston) offered an amendment that would require the DOC to produce a report by the 25th legislative day of the next regular legislative session and would then allow the legislature to approve or reject the report.  If the report was rejected, no bonds would be let and no project would be built.  Surprisingly, McCampbell’s amendment passed on a 49-35 vote with 23 republicans and 26 democrats supporting it, very similar to the first Holmes’ amendment vote.

With this amendment, the bill then passed the full House and was sent to the Senate to either concur with the changes or to go to conference committee.  Obviously, the bill’s proponents were not happy with the amended bill.

Upon arrival in the Senate, the bill now had 2 legislative days remaining for passage.  Intense negotiations began and it appeared that the senate was posturing for a filibuster of the bill.  The Senate voted to send the bill to conference committee where negotiation proceeded throughout the 29th day and into the 30th day.  Ultimately, late on the 30th day, a compromise substitute was developed.

The substitute would essentially reduce the amount of the bond issue from $800 million to $550 million reducing the number of prisons to be built and added some additional transparency language.  The McCampbell amendment was stripped from the substitute.

The Senate then began a filibuster on the bill on the last legislative day.  The filibuster led by Senators Paul Sanford (R- Huntsville) and Vivian Figures (D- Mobile) lasted until about 10:30 pm when it was ended by a cloture petition that passed on a vote of 23-9.  There are 26 republicans in the senate and 23 of them voted to close debate (3 republicans abstained; Paul Sanford, Shay Shelnutt and Larry Stutts).

The bill received final passage at approximately 10:45 pm and was sent to the House for concurrence.  The House rules allow for debate on this motion and it would have required invoking cloture in order to get it passed prior to the midnight deadline.  The House public viewing gallery was packed with lobbyists holding their collective breaths.

What transpired was quite interesting.  The bill was never brought up for consideration.  House Speaker Mike Hubbard later told reporters that there were not enough votes to stop the debate and so the bill died.  Supposedly, many House members were uncomfortable voting on the hastily negotiated substitute.

The Governor, obviously disappointed, is considering whether to call the legislature back to Montgomery to address the issue.

AFA Position:

The Alabama Forestry Association supports the reforms passed in the 2015 session and believes that adequate time should be given to see if this legislation results in positive improvement in the prison crowding challenge.

With respect to new construction, AFA supports a fiscally responsible and transparent solution.  The original construction bill has a $50 million payback requirement that, if the savings are not generated, will fall back to the state’s General Fund appropriations causing even more stress on an already tight budget.  If new prisons are ultimately determined to be the answer, AFA supports building one at a time, rather than a massive construction project.  Additionally, AFA believes that a “design, bid, build” model for construction is better for Alabama’s taxpayers rather than the proposed “negotiated” no-bid solution offered in the current proposal.

Excellent Continuing Education offered at AFA Annual Meeting


The Alabama Forestry Association’s Annual Meeting is coming soon and if you need another reason to come to the beach you might want to consider the Continuing Education Track offered on Sunday, September 13th.


We have an exceptional line-up to discuss Forest Landowner Issues that are both timely and informative.

The agenda includes presentations on the Endangered Species Act, the status of the Alabama Transportation Rehabilitation and Improvement Program (“ATRIP”) and the challenges presented in developing a major renewal of the Gulf State Park.

A focus of the Annual Meeting this year is improving access to international markets. Presentations will also be made on what to expect from the continued development of foreign energy markets, how to structure your small business to access these prospective markets and an in-depth look at the audit requirements for forest certification for resources used to produce products for these markets.

Continuing education credits are being awarded for legal, accounting, forestry and logging. If you are attending the AFA conference, the fee is only $75 and includes your lunch.

For more information, see the Registration Form located here.

The AFA Annual Meeting is being held at the Perdido Beach Resort in beautiful Orange Beach, Alabama, September 13-15. If you have not already registered, it’s easy to do by just going to www.alaforestry.org.

Private Property Rights; Kelo v. City of New London, 10 Years Later

kelo1June 23, 2015 marks the ten year anniversary of the United States Supreme Court’s ruling in Kelo v. City of New London which struck considerable fear into the hearts of private property owners nationwide.


The Supreme Court has not returned to the subject, and its decision therefore stands as the Court’s last word on the meaning of the Public Use Clause. The problem for public and property rights advocates is that Kelo has essentially been forgotten.

If Kelo should return to prominence because some state or city prefers one private property owner over another, the U.S. Constitution will likely offer property owners no protection against whatever public benefits a majority of a state or local government can imagine.

Government uses its eminent domain power for a host of reasons. Classic examples are the need to construct a road or bridge, a port, a national park, or a government office building. More contemporary instances include the elimination of a public nuisance like an unprotected hazardous waste dumping site or a row of dilapidated crack houses.

The public generally understands that the government will exercise its eminent domain power to take private property in only three circumstances; when government will use it, when the public will use it, or when private parties will use or develop it for the public’s benefit in a quasi-governmental capacity (such as a regulated utility).

A decade ago, however, the Supreme Court of the United States gave its approval to an unprecedented and remarkable use of the eminent domain power. In Kelo v. City of New London, the Court ruled that as long as a property owner is paid the fair market value of what is taken, the U.S. Constitution permits a city to transfer that property from one private party to another, in this case, from a homeowner to a real estate developer, because the city prefers what, in their opinion, is a better use of the land.

Kelo decided that certain particular tracts of private property would be more profitable to the community if the property belonged to different owners and was put to a different use. Unlike what is supposed to happen in an urban renewal program, the city took perfectly maintained and functioning homes away from long-term city residents and gave the homes and the ground land to a private real estate developer in the hope of enticing a large corporation to locate a facility in the area.

The homeowners challenged the takings in court. They lost in the state courts, but the U.S. Supreme Court agreed to hear their plea. Unfortunately for the landowners, however, the Court ruled by a five-to-four vote that as long as just compensation is paid, the government may transfer property from one private party to another not to remedy a social ill, but as long as the government can mount the claim that the latter party will use the land in a manner that improves the local economy.

kelo2The sad irony in this instance is that the property, that was taken ten years ago, sits idle today. As the picture to the left indicates, no development ever materialized.  And the people that were displaced have essentially all left the area.


So what was the response to Kelo in Alabama?

Alabama was the very first state to react legislatively to the Kelo decision. Senate Bill 68 (2005) specified that eminent domain could not be used for “private retail, office, commercial, industrial, or residential development; or primarily for enhancement of tax revenue; or for transfer to a person, nongovernmental entity, public-private partnership, corporation, or other business entity.”

However the law left an exception for the seizure of so-called blighted properties. This would have allowed property to be condemned under blight law if it might become blighted in the future, or if the property is deemed “obsolescent”; which is code for “We want something else here.” And, if the property was condemned for blight, cities could then turn it over to private interests.  This problem was addressed in House Bill 654 (2006) which significantly closed the blight loophole by narrowing the criteria by which property could be designated as blighted.

This legislative fix however was not imbedded in the state’s constitution, and thus is subject to the whims of future lawmakers to amend as they see fit.

As we watch our current legislators, county commissioners and mayors frantically searching for every available source of revenue possible, we need to be particularly diligent to make sure the thrill and excitement in the guise of “economic development” does not overwhelm their sensibilities.

Maybe, now that ten years has gone by, it’s time to amend the constitution to protect private property ownership rights in perpetuity. AFA is studying the issue and may propose legislation in the next year to accomplish that objective.

AFA Legislative Update- Week 3

statehouse2The Alabama Legislature re-convened on Tuesday, March 17th for its third week of work for the 2015 Legislative Regular Session. Meeting on Tuesday, Wednesday and Thursday, the Legislature has now used up 8 of its allotted 30 legislative days. The House has introduced 345 bills and the Senate has introduced 299 bills.

The Legislature will take off next week for Spring Break and will convene Tuesday, March 31st.

Bills of interest that AFA is following (note: italics indicate action that occurred this week):


SB203 (Orr)- Merges Alabama Forestry Commission into the newly named Department of Agriculture, Forestry and Consumer Services.

SB103 (Scofield)/HB217 (Boothe)- Removes limit on tags receiving a discount for farm vehicles. Senate version passed out of committee and received 2nd reading. House version was passed out of committee and is on the special order calendar for consideration by the full House on 3/31.

SB127 (Whatley)/HB 188 (Lee)- Eliminates the sales tax on farm equipment. Currently the sales tax for farm equipment is 1.5%.

SB116 (Orr)- Creates felony crime and penalties for hunting on land without permission. Passed committee and received 2nd reading.

hankjrSB123 (Whatley)- Requires permit and $50 fee for game feeders. After testimony provided in support of the bill provided by Hank Williams, Jr, an amended version passed by Senate Ag Committee.




Fiscal Responsibility:

SB12 (Sanford)- Establishes Alabama Recurring Revenue Fund and distributes funds to GF and ETF proportionally. Allows GF to participate in growth tax revenues. AFA supports.

SB75 (Beasley)- Medicaid Expansion- AFA opposes.

SB115 (Orr)- State ABC Agency phase out. AFA supports.

SB98 (Ross)- Repeals Rolling Reserve Act. AFA opposes.

HB135 (Clouse)- General Fund Appropriations Bill

HB155 (Poole)/SB179 (Pittman)- Education Fund Appropriations Bill

SB231 (Allen)- Creates Legacy Trust Fund for BP funds and other windfalls.

SB248 (Pittman)- Constitutional Amendment- Rolling Reserve Act- AFA supports.

SB281 (Holley)/HB330 (Boothe)- Rolling Reserve Act changes.

HB322 (Poole)- Rolling Reserve Act changes.


HB139 (McMillan)- Tax increase on tobacco products. Part of Governor’s tax increase package.

HB142 (Hill)- Combined reporting for corporate income tax. Part of Governor’s tax increase package. AFA opposes.

HB183 (Shiver)- Monroe County excise tax on gasoline and diesel fuel. AFA opposes. Passed out of House and has been assigned to Senate Committee on Local Legislation #1.

HB240 (Johnson)- Repeals withholding exemptions from state income taxes. Part of Governor’s tax increase package. Passed out of committee and awaits consideration before the full House.

HB267 (Clouse)- Increases the sales tax on leased autos to 4%. Part of Governor’s tax increase package.

HB268 (Clouse)- Increases the sales tax on purchase of autos to 3%. Part of Governor’s tax increase package.

SB227 (Singleton)- Increases advalorem taxes. AFA opposes.


collins2SB45 (Marsh)/HB192 (Collins)- School Choice/Charter School Bill- Senate bill substituted in committee and has received its second reading. Senate passed the bill and it has been transmitted to the House where it now has cleared committee and has received its second reading. It is now in position for final passage. The House passed an amended version, returned it to the Senate where they concurred and sent to the Governor who signed it on Thursday.

marsh3SB71 (Marsh)- Alabama Accountability Act amendments. Received a public hearing and is expected to be voted on in committee next week. It was voted out of committee this week and is being considered by the full Senate.

SB101 (Glover)- Repeals Common Core.

HB270 (Ford)- Repeals Alabama Accountability Act. AFA Opposes.

Incentives/Job Creation:

HB57 (Beech)- Alabama Veterans and Rural Jobs Act. Part of Governor’s Incentives Package works in conjunction with HB58, The Alabama Jobs Act. Provides incentives to companies making capital investments and providing jobs in rural counties and to veterans. Passed committee and received second reading. Passed by the House and received its first reading in the Senate. Received a favorable report in Senate Committee and moves to full Senate.

HB58 (Baker)- Alabama Jobs Act. Part of Governor’s Incentive Package and repeals existing statutory capital investment incentives for new and expanding businesses and replaces with new incentives. Passed committee and received second reading. Passed the House and received its first reading in the Senate. Received a favorable report in Senate Committee and moves to full Senate.

HB59 (Lee)- Alabama Reinvestment and Abatements Act gives tax incentives to companies that re-invest in their businesses and extends those incentives to potentially 20 years. Passed committee and received second reading. Passed the House and received its first reading in the Senate. Received a favorable report in Senate Committee and was then passed by the full Senate. Awaits Governor’s signature.

General Governance:

SB55 (Pittman)- Restricts state agencies to amend rule-makings only once every 10 years.

SB57 (Pittman)- Term Limits, reported out of committee and received its second reading.

SB73 (Brewbaker)/HB78 (Ball) – Initiative and Referendum- AFA opposes.

SB80 (Ward)/HB110 (Williams)- Limits manufacturer liability. AFA supports. Senate version was reported favorably by the Judiciary Committee and received its 2nd reading. House version also passed the House Judiciary Committee and received its 2nd reading. Senate bill passed Senate and has been referred to House Judiciary. House bill passed House and has been referred to Senate Judiciary.

SB16 (Marsh)/HB193 (Davis)- Proposed constitutional amendment to allow statewide referendum to give counties limited home rule authority. AFA amended the bill in Senate committee and it now has been reported out and has had its second reading. The House version has also been passed through committee as amended. The House bill is on the special order calendar for the House on 3/31.

Orr Introduces AFC Merger Bill

afcSenator Arthur Orr (R- Decatur) introduced SB203 this week which proposes to merge the Alabama Forestry Commission into the newly created Department of Agriculture, Forestry & Consumer Services. Senator Orr introduced similar legislation late in the session last year and it died without being considered in committee.

SB203 has been referred to the Senate’s Finance & Taxation General Fund Committee which Senator Orr chairs. This bill is one of several bills introduced by Senator Orr in his effort to streamline government.

AFA is currently monitoring the legislation and has not taken a position on the bill. The Association has a clearly articulated board policy supporting improving efficiencies in government through consolidation of state agencies.

However, with respect to this legislation, at a minimum, any consideration of restructuring the AFC must include clear language that the consolidation; (1) must be a true merger and not an acquisition, (2) must preserve the core mission of forest fire protection and (3) must protect the funding for the core mission.

The current Department of Agriculture & Industries is run by the Commissioner of Agriculture & Industries, John McMillan. The Commissioner is elected by state-wide vote every four years. The Department is currently governed by the State Board of Agriculture & Industries which is composed of 11 members; the Governor, the Commissioner, the Director of the Cooperative Extension Service of Auburn University, the Administrative Head of Agriculture at Auburn University, four outstanding farmers and three outstanding leaders of industry.

Senator Orr’s bill reconstitutes the newly named State Board of Agriculture, Forestry and Consumer Services to include 14 members; the Governor, the Commissioner, the Administrative Head of Agriculture at Auburn University, the Administrative Head of Forestry at Auburn University, five farmers (appointed by the Governor from a list provided by ALFA), three forest landowners (appointed by the Governor from a list provided by AFA)and two licensed and registered foresters (appointed by the Governor from a list provided by AFA).

Currently the State Forester is selected by the Alabama Forestry Commission with the advice and consent of the Governor. In SB208, the current State Forester shall remain, but once the position is vacated, the new State Forester shall be appointed by the Governor based upon the recommendation of three of the five forestry board members.

You can read a copy of the proposed legislation here.

We will keep you updated on this bill as the legislative session moves forward….

Holtzclaw Takes on Recent License Fee Increase

dlThe State of Alabama, on February 9, 2015, increased its driver’s license fees by 50%, from $23.50 to $36.25. This increase caused quite a stir; enough such that one Alabama Senator has decided to take action.

Senator Bill Holtzclaw (R- Madison) introduced SB44 on the first day of the recently convened 2015 Regular Session of the Alabama Legislature. SB44 specifies that setting any charge to the public for issuing driver’s licenses or cards would be subject to the Alabama Administrative Procedures Act.  This act requires state agency rule-makings to follow a process that is open for public discussion and participation.

The bill also contains a provision that makes it retroactive to February 9th and requires the State to credit any person who paid the increased fee with the difference in the amount of the increased fee and the fee prior to the increase.

A $12.75 increase doesn’t sound like much, does it?

The fiscal note accompanying SB44 indicates that as of March 3, 2015, a whopping 79,000 drivers licenses were issued at the increased rate. The fiscal note continues by estimating that the increase for driver’s license fees on an annual basis would be $12.75 million.

Yep, you read it correctly….$12.75 million.

holtzclawTaxes, revenue enhancements, fees, etc. By whatever name you wish to address it, this is real money coming out of the public’s pockets.

Senator Holtzclaw’s bill was considered today by the Senate Transportation & Energy Committee and was carried over until next week.

In case you are interested in weighing in and expressing your opinion on this matter, the Senate Transportation & Energy committee is chaired by Senator Gerald Allen and is composed of Senators Greg Albritton, Clyde Chambliss, Linda Coleman, Gerald Dial, Jimmy Holley, Bill Holtzclaw, Steve Livingston, Del Marsh, Jim McClendon, Arthur Orr, Greg Reed, Quinton Ross, Hank Sanders, Clay Scofield and Tom Whatley.

Supposedly the bill was carried over because information has been provided that there are other “fees” issued by other agencies that can be increased without any oversight and there seems to be interest by the members of the committee to require these fees to be subject to the Administrative Procedures Act as well.

According to Senator Holtzclaw, the bill will be back on the committee’s agenda next week and he intends to ask for a roll call vote (as opposed to a voice vote). This vote will be watched with interest to determine how conservative this new legislature is truly going to be.

Stay tuned……

AFA Releases 2015 Legislative/Regulatory Agenda

AFA 2020 Vision Brochure_v3 1The 2015 Regular Legislative Session begins Tuesday, March 3rd.  A typical session lasts for 30 “legislative” days (a day when the House and/or Senate is actually meeting to conduct business).  The Constitution requires that these 30 legislative days occur before 105 calendar days have expired, so it appears that their work will need to be completed prior to June 15th.

The Alabama Forestry Association has released its 2015 Legislative/Regulatory Agenda and you can find it here.  This agenda is developed as a component piece to the 2020 Vision, which is the long range objectives of the Association to promote systemic change in Alabama’s governance.  The 2020 Vision can be found here.

This year’s work for AFA will include three major legislative initiatives.  First, a constitutional amendment requiring that all one-time windfall payments to the State be placed in the Alabama Trust Fund.  Second, another constitutional amendment placing the Education Fund Rollling Reserve Act in the constitution.  Finally, a joint resolution of the legislature opposing any expansion of Medicaid as part of the Affordable Care Act.

As the session progresses, we will be providing detail on these initiatives and other legislation that affects forestry and general Alabama governance.

Put your seat belts on, from all indications this is going to be a wild ride.


Public Official Spotlight: Valerie Bradford Davis, Probate Judge, Clarke County

valerie_davis_2011Clarke County is considered “ground zero” for the timber industry in Alabama and thankfully we have a public official there that “gets it.”

Judge Valerie Bradford Davis was appointed as Probate Judge for Clarke County in 2009 by then Governor Bob Riley. She served out her appointed term and then ran successfully for election becoming the first Republican elected to serve as Probate Judge in Clarke County in 100 years.

Judge Davis grew up in Scyrene, a small community 15 miles east of Grove Hill. She is the daughter of Calvin and Terri Bradford, earned a bachelor’s degree from the University of Alabama and graduated with honors from The University of Mobile with a master’s degree in Marriage and Family Therapy. She is married to Tommy Davis, a Semmes, Alabama firefighter and they have two children, Jay and Grace.

So what caught our attention about Judge Davis?

The Clarke County Commission had indicated that they were going to consider adopting a timber logging ordinance during their April 22, 2014 meeting. Becoming aware of this, Judge Davis, the daughter of a logger, recognized the negative impact such an ordinance might have on the local timber industry.

Using her public stature, Judge Davis immediately contacted the Alabama Forestry Association and sought our assistance in preparing and sending a letter to Clarke County timberland owners informing them of the Commission’s activities. Without her involvement and diligence, the Commission may have moved forward with the ordinance.

Because of her leadership efforts, the Commission did not adopt a logging ordinance.

She understands that timber is the primary economic engine for Clarke County. She knows that the citizens of Clarke County will suffer if the timber industry is negatively impacted. Protecting the citizens of Clarke County is part of her job responsibilities and she takes this responsibility seriously. Regardless of political party, regardless of the consequences, she put the citizens first. It is not easy to challenge the power structure, especially when you are in the public spotlight. But this did not stand in her way.

The Clarke County Commission is composed of five commissioners. The chairmanship rotates every nine months. The Commission meets every second and fourth Tuesday at 9:00 am in the Annex Building of the Clarke County Courthouse in the Commissioner’s Courtroom located at 114 Court Street, Grove Hill.

Judge Davis has committed to attend all future meetings of the Commission to ensure that a logging ordinance doesn’t get addressed. We need to help her. We need our members to be organized and to participate in the process as well.

We also need to take a few minutes to call Judge Davis and express our appreciation for her service and attention to our industry. Judge Davis’ office number is 251-275-3251. I am sure that she would appreciate hearing from you.

Forestry Commission Merger Bill Dies in Senate- Lots of Black Smoke on the Horizon

Yesterday was the last legislative day for bills to be considered in the same house from which they originate.  SB411, seeking to merge the Alabama Forestry Commission into a newly named Department of Agriculture, Forestry and Industries, was not brought for consideration and thus died for this session.

The bill was originally scheduled for consideration on Wednesday, but a late amendment proposed by the Alabama Farmers Federation (ALFA) caused some disagreement among the members and as a result the bill’s sponsor, Arthur Orr (R- Decatur) decided against moving the bill forward.

The Alfa amendment proposed changing the methodology of selecting the State Forester.  Their amendment would allow Alfa, the Forestry Association and the Alabama Forestry Commissioners to each make a recommendation for the State Forester position and the Governor and Commissioner of Agriculture, Forestry & Industries would then pick one from those three recommendations.

AFA stated its opposition to the amendment as we wanted the recommendation to continue to come from the Alabama Forestry Commissioners.

Though the bill died for this session, we fully expect it to come again next session.

On a related topic, the Alabama Senate Finance & Taxation General Fund Committee passed its version of the General Fund appropriations yesterday and, as expected, it didn’t include any good news for state agencies.  The Senate version of the FY15 appropriations bill set forth expenditures at $1.839 billion, an increase of 1.83% over last year. 

The Alabama Forestry Commission was allocated $8.76 million, a 4% decrease from last year.  The bill also included $685 million for Medicaid (11.38% increase) and $394 million for Corrections (a ½% decrease).

Assuming that appropriated expenditures equal revenues, then actual revenues anticipated are approximately $1.693 billion (remember that $145.7 million is being used as revenue from the third and final installment of the funds “borrowed” from the Alabama Trust Fund).

The “new” legislature (elections are being held this year) will meet next spring to work on the FY16 appropriations.  Here is where things really get nasty.  Looking forward, if you grow the actual FY15 projected GF revenues at 2%, then the legislators will have approximately $1.727 billion to work with.  Assuming that Medicaid and Corrections are level funded (wishful thinking), this would leave $648 million for all other agencies.  Comparing apples to apples, in the FY15 appropriations bill, those same agencies were funded at $760 million.

This leads to a scary bottom line that indicates these other agencies will see at least a 15% funding cut in the FY16 GF appropriations bill.  For purposes of the Alabama Forestry Commission, this would result in a reduction of $1.31 million in FY16 as compared to FY15.

And frankly, that’s the best case scenario.

A more plausible scenario is that Medicaid continues its 10-15% growth appetite and/or the U.S. Department of Justice requires the state to address prison overcrowding.  This could result in a draconian 25-50% reduction in funding available for other General Fund agencies.

The absolute worst case scenario, the “nuclear option”, is that certain state agencies get “zeroed out”.  Before you dismiss this as outside the realm of possibility, consider the Alabama Department of Conservation and Natural Resources (DCNR), the Alabama Department of Environmental Management (ADEM) and the Office of the Attorney General.

As many of you know, DCNR has been operating for years with no funding from the General Fund.  More recently, ADEM has been operating very near zero funding for the last several years.  Finally, the Office of Attorney General was completely zeroed out in the Senate passed GF appropriation this week.  In all three of these cases, the logic is that the agencies have the capacity to “stand alone” and use resources available internally to fund their ongoing operations.

Stay tuned….

House Passes HB350- Strengthens the Office of State Auditor

On a 65-23 vote, the Alabama House of Representatives passed HB350 which, if enacted, will place the Office of Examiners of Public Accounts under the management of the State Auditor.  Sponsored by Ed Henry (R-Hartselle), the bill moves the audit function out from under the control and limited management of the State Legislature.  The move comes as part of an ongoing effort by the Legislative Leadership to promote efficiency in state government.  While improving efficiency, this measure most likely will result in an increased transparency and accountability with this important area of maintaining fiscal responsibility for the use of taxpayer dollars.  The bill now moves to the Senate for consideration.  Please contact your senators and express support for this legislation.