State Policy Watch: Alabama and Kentucky close tough legislative sessions

NOTE: With state legislative sessions coming to a close, in the coming weeks Facing South will be offering reports on key policy decisions in Southern states. The following comes from the excellent weekly dispatch published by the Progressive States Network.

Session Roundup: ALABAMA

Alabama's three month legislative session that adjourned on April 22 was dominated by three issues -- passing a state budget, a controversial bill to bring a referendum on whether to make electronic bingo legal and legislation to bail out the state's popular pre-paid college tuition program.

Budget, Tax and Revenue:  As with so many other states, Alabama faced a large budget shortfall this year.  Based on estimates from the Legislative Fiscal Office, the state's general fund faced a shortfall of about $600 million this fiscal year.  But largely through the use of state rainy day funds and federal aid the state received through ARRA money, major cuts in education, health and services programs were avoided.

The legislature made their budget situation worse by approving new corporate tax breaks (HB 260) in the name of subsidizing employers who hire unemployed workers up to 50 percent of wages paid to new hires. 

Unfortunately, a more positive measure for working families was defeated.  A broad-based campaign proposed repealing the 4 percent state tax on groceries and over the counter medications, while raising revenue by eliminating the deduction for federal taxes paid by higher-income earners.  The constitutional amendment (HB 1) received a  vote of 54-42 in the House of Representatives, but the proposal fell just 9 votes short of the 63 votes needed to bring the bill to the House floor for debate.

Electronic Bingo: The most controversial bill of the year was one that would have let voters decide whether to declare electronic bingo legal and set up a gaming commission. While SB 515 passed the Senate, it died without a vote because the sponsor wasn't able to find enough backing for the bill among other House members. Opponents viewed the bill as bad public policy, especially a provision where, if it had been approved by the voters the Legislature could have revisited the bill to create rules for bingo operations. During the time the bill's fate was being decided, federal authorities revealed an investigation into possible corruption in the legislature involving the bingo bill.

Education:  One major bill that did pass was to appropriate funds for the state's prepaid college tuition program (PACT).  The PACT program covers about 45,000 children.  The Prepaid Affordable College Tuition program ran into trouble when the stock market collapsed last winter.  The program's assets, once valued at nearly $900 million, were heavily invested in stocks, and their value plunged below $500 million.  However, despite initial differences between the House and Senate over whether to establish a cap for state university tuition increases, Senate Bill 162 will provide the program with a total of $236 million over eight years, as it was signed into law on April 30^th.

Transportation: A major transportation bill did pass the legislature this session. SB 120, a proposed constitutional amendment that authorizes the Alabama Trust Fund to make payments of $100 million each year for 10 years for road & bridge construction, maintenance and repair programs in the state's transportation infrastructure. The measure has been placed on a November ballot initiative. If approved, the state will make an annual distribution of $25 million of the $100 million to cities and counties based on the state's gasoline tax distribution formula, $74 million to the Alabama Department of Transportation (ALDOT) and $1 million to the Alabama Shortline Railroad Infrastructure Fund.

Environment and Energy: The Alabama Permanent Joint Legislative Committee on Energy and interest groups worked to pass several bills pertaining to energy and energy efficiency. Among the bills passed was HB 128 , which provides for the "Codification of the Joint Legislative Committee on Energy Policy" and provides for an ongoing state energy study and energy plan.  Additionally, SB 315 requires the adoption of the Alabama Energy and Residential Codes to comply with certain federal energy and building requirements.

Defeated Bills Included:

• Charter Schools: Legislators also defeated attempts to allow charter schools in the state (HB189 and SB202). 
• Health Care: Alabama joined 24 other states in rejecting bills (SB 233 and its companion, HB 47) calling for states to prohibit mandatory participation in the health care system established by the federal health care reform bill.
• Immigration: The best immigration news to come out of Alabama's legislature this session is the fact that no anti-immigrant bills were passed. One highlight though was the passage of a bill, HB 432 to make human trafficking a crime in Alabama. The new law provides for much harsher penalties for the criminals and more protections for victims than were previously provided under kidnapping statutes.

Defeated Affordable Housing: Even though a bill (HB 512) to create a state Affordable Housing Trust Fund sailed in the House unanimously (91-0), it never came up for a vote in the Senate. The estimated shortage in the number of affordable housing units in Alabama totals about 45,000. Alabama is one of only 12 states that has not established a housing trust fund as a strategy to address housing shortages.

Session Roundup: KENTUCKY

Although the General Assembly met this year in regular session from January-April, the session was overshadowed by negotiations over how to resolve a $1.5 billion budget gap in 2011 and 2012.  Governor Steve Beshear's initial proposal to close the shortfall relied heavily on new revenue from the expansion of gaming.  The House agreed to support the increase in gaming revenue, but Senate leadership refused to consider it.  A State Budget Director report shows that April 2010 revenues were lower than in April 2009, suggesting that the projected deficit could be growing - a gap that will be increasingly difficult to control without new sources of revenue.  Both houses issued their own budget bills, but were unable to come to agreement, and the legislative session ended on April 15 without a budget.

On May 12, Governor Beshear issued a revised budget proposal incorporating elements of the House and Senate versions.  The new budget includes spending cuts of 3.5% in 2011 and 4.5% in 2012.  The General Assembly will meet in special session, beginning May 24.  There has been much attention on the $63,000/day cost of the special session, so Assembly leaders and the Governor wanted to make sure an agreement on the budget was in place to limit the special session to the minimum length of five days. 

As of this writing, Governor Beshear has not formally issued the special session order, but said he expects to add transportation plans for 2011-2016 to the agenda.  These items could still be contentious.  House leadership has said that, while the House approved $300 million in bonds for transportation in the Governor's original plan, members may be less receptive to it now that funding for most other construction projects has been cut.  Also, the House may object to the full $2 billion transportation plan for 2013-2016 proposed by the Senate.

Renewable Energy and Energy Efficiency Incentives:  In 2008, the General Assembly enacted a law (HB 2) creating a package of tax incentives for renewable energy and efficiency projects. However, the state has not been able to implement the programs due to a legal challenge based on the fact that it was passed after midnight on the last day of the legislative session.  This year, the General Assembly passed HB240, which repeals and reenacts HB2 as a way to settle the legal dispute and enable the state to make real progress in reducing global warming pollution and bring down energy costs.  The law's major provisions include:

• Creating the Energy Efficiency Program for State Buildings, with a provision allowing the program to move forward with low-cost/no-cost projects (based on projected energy cost savings) when appropriations are not available in a given budget year.
• Requiring that all public buildings for which 50% or more of the financing is provided by the Commonwealth meet "high-performance building" standards set by the Finance and Administration Cabinet.
• Creating the High-Performance Buildings Advisory Committee to inform the Finance and Administration Cabinet's standards for "high efficiency buildings," incorporating LEED, Green Globe, EnergyStar, and other recognized benchmarks and taking into account guidelines issued by organizations such as the U.S. Green Buildings Council, and the American Society of Heating, Refrigerating and Air-Conditioning Engineers. 
• Requiring best practices in the field of energy efficient construction, such as utilizing life-cycle cost analyses for in developing construction plans for public buildings.
• Implementing reporting requirements that ensure transparency and make the program's reports measurable.
• Making tax credits available for certain energy efficiency improvements, at 30% of cost.  The law limits future state liability under the program by capping the maximum credit at $500 for single-family residences and $1,000 for multi-family and commercial buildings
• Creating an energy technology career track program to be organized by the state's Department of Education and the Department for Workforce Investment.
• Empowering the Public Service Commission to evaluate energy conservation programs (or "demand-side management plans") proposed by public utilities, including cost-recovery mechanisms funded through charges to ratepayers
• Creating a Center for Renewable Energy Research and Environmental Stewardship to provide leadership, research, policy, and technical assistance to advance the state's renewable energy and efficiency goals.
• Creating the Kentucky Bluegrass Turns Green Program to provide funding to and to guide the development of public and private sector demand-side management programs.

Natural Gas Deregulation:  HJR141 directs the Legislative Research Commission to open a case on retail competition in natural gas supply.  Advocates have warned that the state should proceed cautiously in considering deregulation of natural gas because of evidence showing the likelihood that consumers' energy costs will rise rather than decline.  Of particular note is a pilot competition program in Columbia Gas service territory.  During the program's first eight years, consumers who have participated have paid $4.45 million dollars more in gas costs over and above what they would have paid had they chosen to remain with Columbia Gas.

Setting Livestock and Poultry Care Standards:  As originally filed, SB105 would have preempted local ordinances defining certain industrial livestock production practices as animal cruelty by creating a state Livestock Care Standards Commission.  The House Agriculture and Small Business Committee amended the bill as HB398 to make the commission advisory to the state Board of Agriculture, and to protect the ability of communities to control and abate nuisances arising from concentrated animal feedlot operations (CAFOs) and CAFO siting ordinances.

Care for Children with Autism:  The General Assembly unanimously enacted HB 159, which increases the amount of coverage health insurers must provide for autism spectrum disorders.  The bill requires large-group and state employee insurance plans to provide coverage in the annual amount of $50,000 for children with autism from age 1 to 6 and up to $12,000 a year for older children with autism.

Labor and Workers' Rights:  Not much progress - or regress - was made on labor issues this year.  Two pro-worker bills that passed included a job creation measure and a workers' compensation measure, including a Bid Preferences for Kentucky Contractors (SB 45) and Workers' Compensation Claim Guidance (HB 38), which updates existing workers' compensation legislation and requires workers' compensation guidelines to remain current with the most recent medical and scientific knowledge by continually updating the law's reference to the relevant AMA document as new editions are released.

Hospital Visitation Bill:  A significant step for LGBTQ-friendly legislators and advocates was unanimous passage by the House of HB 118.  The bill would allow any adult hospital patient to designate another individual to be treated as a member of the patient's family with regard to visitation.  The bill died in the Senate Judiciary committee, but the House's vote was a strong statement in the face of HB 440 - a bill that would have legalized discrimination on the basis of sexual orientation or gender identity (see below).

Notable Progressive Defeats Included:

• Payday Lending:  HB 381 would have capped the interest rates that payday lenders can charge at 36% APR.  Currently, these predatory lending establishments are permitted to charge $15 for each $100 loaned every two weeks - subjecting consumers to a 390% annual interest rate and making it all but impossible for many low-wage workers to escape the cycle of poverty and bad credit and subjecting them to endless harassment from collection agents.  The bill was sent to the House Banking and Insurance Committee but did not receive a hearing. Legislators introduced this bill last year, but industry lobbyists were successful in making amendments that took out the substantive consumer protections and replaced them with the creation of a database to help check cashing companies better track their compliance with the existing law.
• Clean Energy:  Significant energy-related bills were introduced but that did not pass included a Renewable And Energy Efficiency Portfolio Bill (HB 3), which is expected to be reintroduced in the 2011 Session.
• Alternative Schools:  HB 412 would have increased accountability and required data reporting for alternative schools.  It passed the House Education Committee on February 24.  Progress on the bill halted when an unrelated amendment was tacked onto it.  Governor Beshear is considering adding it to the agenda for the upcoming special session.
• Early Childhood Education:  HB 190 would have established a framework for expanding quality preschool for 3-and-4 year old children as funds became available. The bill passed the House 99-0 on March 3, but failed to pass the Senate.
• Restoration of Civil Rights:  HB 70, a bill restoring voting rights for people who have completed their sentences and parole for felony convictions passed the House of Representatives but died in the Senate 

Notable Conservative Bills Defeated Included:

• Lifting The Nuclear Power Plant Ban:  SB 26, which would have eliminated the current state prohibition on construction of new nuclear plants until a permanent waste disposal site is approved, was defeated.
• Immigration:  One significant win for progressive legislators was the defeat of HB 321, an anti-immigrant bill.  HB321 would have criminalized the hiring of undocumented workers by public agencies and their contractors, and it would have required those employers to participate in the federal e-Verify program.
• Entitlement to Discriminate Bill:  HB 440 would have amended the constitution to enshrine discrimination based on sexual orientation and gender identity and to pre-empt local nondiscrimination laws.  The proposed amendment would have allowed discrimination as long as a person or organization claims their action is based on "sincere religious belief."  The bill died in committee.
• Abortion Restrictions:  SB 38 and HB 373 passed the Senate (32-4), but died in the House Health and Welfare Committee.
• Criminalizing Pregnancy and Substance Abuse:  This bill (HB 136) would have criminalized the ingestion of controlled substances or alcohol by a woman while she was pregnant, based on the presence of such substances in the blood of the baby after birth. The bill died in committee without a hearing