Forestry Legislative Report
Issues Affecting the Future of Alabama Forestry
VOL. 103 NO. 2-R
April 14, 2003
The House and the Senate met two days last week leaving 19 days remaining in the Regular Session. The pace of legislation action has been slow, although there has been a flurry of behind the scenes activity as the legislature prepares to address the State’s budget problems. The Senate has been involved in a tactical slowdown conducted by the 16 members of the conservative caucus. Their hope is to block all legislation until the other 19 members consent to changes in the Senate rules and committee assignments designed to enhance the influence of those in the minority. The House continues to work on relatively uncontroversial legislation.
STREAMLINED SALES TAX (SST)
A very serious threat to the manufacturing community has emerged recently under the guise of an effort to tax internet and catalogue sales. A multi-state compact has been working for two years to develop model legislation for all states. Congress has agreed to act when a minimum of 10 states representing a minimum of 20% of the country’s population adopt this model legislation. The model legislation provides uniform definitions for all states sales tax statutes. States would be allowed to have only three different sales tax rates. Alabama currently recognizes four different rates. Items that are exempt from sales tax, of course enjoy a 0% rate. Self-propelled agricultural, forestry and construction equipment and manufacturing equipment and parts are currently taxed at 1½% by the state. Automobiles are taxed at 2%. Everything else is taxed at the general rate of 4%.
A draft of the bill proposed for Alabama was recently posted on the Department of Revenue’s web site. This draft eliminates the 1½% rate and taxes manufacturing equipment at the 4% rate. Self-propelled equipment would be taxed at 2%. Unfortunately, many legislators view this legislation as an opportunity to raise taxes while being allowed to argue that they have no choice under the terms of the national agreement. The bill has not yet been introduced. We are trying to convince potential sponsors and other legislators that the SST legislation should not be used to impose massive tax increases on the state’s mining, manufacturing and agriculture and forestry industries.
The March 11 issue of the “Forestry Legislative Report” reported on Alabama’s budget problems and the ongoing tax reform discussion. There have been no recent developments. Crunch time approaches but neither the administration nor the Legislature has come forward with concrete proposals for balancing the budget. Obviously, there are only two variables in the formula; budget cuts or tax increases. We are anxiously waiting to see whether the administration or the Legislature will take the initiative and propose a solution. We are even more anxious about whether the proposal, from whatever source, will be taxes or cuts or some of each.
OTHER TAX ISSUES
Rep. John Knight of Montgomery has introduced legislation to eliminate the deduction of Federal income taxes paid from the state’s personal income tax. He would also increase the maximum rate from 5% to 6½%.
Congress has voted to phase out the Federal estate tax over ten years. Because Alabama’s death tax is tied to the Federal tax, it will also disappear unless the Alabama Legislature acts. Sen. Hank Sanders of Selma has introduced a constitutional amendment to provide that the state death tax will remain in place after the Federal tax expires.
Sen. Sanders also introduced a constitutional amendment to increase the state’s ad valorem millage rate to 15.5 in 2005, 24.5 in 2007 and 33.5 in 2009.
Several bills have been introduced that would increase costs for employers.
Bills have been introduced that would mandate health insurance coverage for contraceptives, prostate-specific antigen (PSA) tests and outpatient self-management and training for diabetics.
Alabama is an “employment-at-will” state. This means unless an employee is covered by a union contract or has an employment contract either the employee or employer can terminate the employment relationship for any reason. (Of course, Federal law overrides this doctrine in many instances through various discrimination statutes.) A bill introduced by Sen. Charles Steele of Tuscaloosa would allow employees to sue for wrongful discharge unless the reasons for the discharge “comply with fundamental notions and standards of fairness, justice, reason and justification”. Since this language is undefined in the bill, one may assume that Sen. Steele is content allowing the plaintiff trial lawyers to explain what it means to the jury.
Rep. John Rogers of Birmingham introduced legislation to extend and expand the statute of limitations for filing workers’ compensation claims for occupational diseases.
The Environmental Management Commission is composed of seven members appointed by the Governor. This important commission governs the Alabama Department of Environmental Management (ADEM). Currently, one member must be a nationally certified well-driller, five members are appointed from various other disciplines and one member is appointed from the public at-large. Rep. Allen Layson has introduced legislation to replace the well-driller position with a geologist or hydro-geologist and the at-large position with a representative from agriculture or forestry.
A bill has been introduced that would, among other things, establish a trust fund to collect and dispose of the millions of scrap tires that have accumulated across the state’s landscape over the years. A $1.00 fee on each tire purchased in the state would fund the trust.
Rep. Dick Brewbaker of Montgomery persuaded the House to pass a resolution establishing the Alabama Department of Environmental Management Joint Interim Legislative Committee. The motion for suspension of the rules and immediate adoption of the resolution was approved routinely. This is a bad idea that the Senate should decline to approve. The interim committee may inject politics into the environmental management process. The current process was purposefully designed to eliminate politics, as much as possible, from environmental regulation and enforcement.
Rep. Sue Schmitz of Toney introduced legislation requiring ADEM to publish a quarterly list of persons and firms violating any of its rules, orders or permits.
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