Case Title: Tequila Rogers et al. v. Daniel Boyd et al.

Citation: 

Docket Number: 1131021

State: alabama

Court: Alabama Supreme Court

Date: 2015-03-02T00:00:00Z

Document:
g RELEASED

 

 

Notices thie opinion ie subject to formal revielon before publication in che savas
thects of Southarn Seposter, Readers ate requested to netity the Reporter of Dectaion
Risbana appellate Courts, 300 Dexter Avenue, Montgonary, Mabana 36104-3742 ((334) 23
0643), of any typographical or other errors,

the opinion ia princed in southern Reporter

     

  

SUPREME COURT OF ALABAMA

OCTOBER TERM, 2014-2015
1130987

Julie P. Magee and Thomas L. white, dr., in their official
capacities as Commissioner of Revenue and Comptroller of the
State of Alabama, respectively

Daniel Boyd et al.

1131020

Rachell Prince et al.

Daniel Boyd et al.
3131021

Tequila Rogers et al.
Daniel Boyd et al.

Appeals from Montgomery Circuit Court
(cv-13-901470)

BOLIN, Justice.

‘The three appeals in this case involve issues of first
impression regarding the Alabama Accountability Act
(hereinafter "the AAA"), codified at § 16-6D-1 et seq., Ala.
code 1975.

Facts

‘The Alabama House of Representatives approved House Bill
84 ("HB 84"), a bill relating to education, and the bill, then
known as the “Local Control School Flexibility Act of 2013,"
was sent to the Senate, where the Education Committee gave it
a favorable report. (A copy of HB 84 is attached to this
opinion as appendix A.) At that time, HB 84 authorized the
establishment of innovative schools and school systems by

allowing the State Board of Education ("the State BOE") to
1130987, 1231020, 1131021
enter into a "flexibility" contract with the school or school
system that would allow for program flexibility and/or
budgetary flexibility within the school or school system, The
purpose of the flexibility contracts was to "advance the
benefits of local school and school systems autonomy in
innovation and creativity," HB 84, Section 2(b), by exempting
the schools from certain state laws, including state Oz

rules, regulations, and policies, in exchange for academic and

 

associated goals for students that improve academic outcomes
and close a deficient achievement gap. HB 84 would require a
local school to submit a proposed innovation plan that had
been recommended by the local superintendent of education and
approved by the local board of education to the state
Superintendent of Education in order to qualify for

"innovation" status. HB 84 authorized the State BOR to

 

promulgate any necessary rules and regulations for
implementation.

on February 28, 2013, during the third reading of HB 84
on the floor of the Senate, an amendment, which made minor
changes, was proposed and approved, and HB 84 was passed by

the Senate. The amended version of HB 84 was then sent to the

 
1130987, 1131020, 1131022,
House, but the House voted to "nonconcur," and HB 84 was sent
to a conference committee of representatives and senators.
Notice was issued announcing that the conference
committee would meet at 3:15 p.m. The meeting was called to
order, but was immediately recessed to reconvene at 4:15 p.m.
However, the meeting did not reconvene until 5:00 p.m., at
which time a “substitute” version was distributed. The
substitute version was 21 pages longer than the original; the
name had been changed to the "Alabama Accountability Act of

2013"

 

and multiple new provisions had been added, including
two provisions allowing for tax-credit programs. (A copy of
the substitute version of HB é4 is attached to this opinion as
Appendix B.) Specifically, Section @ of HB a4 provided for a

tax credit for parents of students who are zoned for a

 

"failing school" and who choose to send their children to a
nonpublic school or a nonfailing public school. The tax

credits were to be paid out of the Education Trust Fund ("the

 

ETF").! Section 9 provided for a tax credit that could be

'Revenues credited to the ETF are used for the support,
maintenance, and development of public education in Alabama,
debt service and capital improvements relating to educational
facilities, and other functions related to educating the
State's citizens. See, e.g., Act No. 2014-456, Ala. Acts 2014.

4

 
1130987, 1131020, 1132021
claimed by individuals or corporations who make contributions
to "scholarship-granting organizations" for educational
scholarships for students who would otherwise be attending a
failing school so that the student could attend a nonpublic or
nonfailing public school.

A majority of the conference conmittee voted in favor of
the substitute version of HB 84. Subsequently, HB 84, as
substituted, was sent to the House and the Senate for
approval. The House and the Senate adopted the substitute
version of HB 84 on February 28, 2013, the same day the
substitute version was introduced. on March 14, 2013, the
governor signed HB 84. On May 20, 2013, the legislature
passed House Bill 658 ("HB 658"), which amended portions of
the AAA. (A copy of HB 658 is attached to this opinion as
Appendix C.) The amendments set out in HB 658 prohibited a

public or nonpublic school from being required to enroll a

Programs and agencies supported by the BIF include K-12
education, public-library services, performing and fine arts,
various scholarship programs, the State's education regulatory
departments, and two- and four-year colleges and universities.
Id. The revenues from multiple sources are allocated to the
ETF, the largest of which are the individual and corporate
income tax, sales tax, utility tax, and use tax. See Ala. Code
1975, § 40-18-58, § 40-23-85, § 40-23-108, and § 40-21-123.

5

 

 
1130987, 1231020, 1131021
particular student. The amendments also opened the
scholarship program to low-income students, even if those
students did not attend or were not zoned to attend a failing
school. Although the amendments in HB 658 allowed low-income
students in nonfailing schools to apply for scholarships, low-
income students in failing schools or zoned for failing
schools were given priority for the scholarships.
on April 8, 2014, the legislature passed Act No. 2014-
346, its annual recodification bill, which adopts and
incorporates into the Code of Alabama 1975 those general and
permanent laws of the State enacted during the 2013 Regular
Session as contained in the 2013 Cumulative Supplement to
certain volumes of the Code and additions or deletions made by
the Code commissioner for editorial purposes. (A copy of Act
No, 2014-346 is attached to this opinion as Appendix D.) The
ARA is now set out in § 16-6D-1 et seq.
Procedural History
on August 26, 2013, Daniel Boyd, Anita Gibson, and

Senator Quinton Ross, Jr. (hereinafter collectively referred to

 

 

 
1130987, 1131020, 1131021
as "the plaintiffs"), sued Julie P. Magee, in her official
capacity as the Commissioner of Revenue, and Thomas L. White,
ur., in his official capacity as Comptroller of the state of
Alabama (hereinafter collectively referred to as "the state
defendants"). The plaintiffs challenged the constitutionality
of the AAA under certain provisions of the Alabama
Constitution of 1901 as follows:

Count I alleged that the substitute version of HB
84, which added the tax-credit programs to pay for
the education of Alabama schoolchildren in nonpublic
schools, altered the original purpose of HB 84, in
violation of Art. IV, § 61 ("(NJo bill shall be so
altered or amended on its passage through either
house as to change its original purpose.");

Count II alleged that, because the original version
of HB 84 differed substantially in form and
substance from the substitute version of HB 84, the
ubstitute version had not been read on three days
in each house, in violation of Art. IV, § 63 ("Every
bill shall be read on three different days in each
house ....");

 

 

Counts ITI-v alleged that the AAA contained two
separate and distinct subjects in that Sections 5-7
authorized flexibility contracts with the State BOE
and Sections 8 and 9 created a tax-credit program to
pay for the education of Alabama schoolchildren in

‘paniel Boyd is the superintendent of the Lowndes County
Public School System, Anita Gibson is a public-school teacher
and president of the Alabama Education Association, and
Senator Quinton Ross represents the 26th District in the
Alabama Senate.

 

 
1130987, 1131020, 1131021

nonpublic schools, Section @ repealed an earmark on
funds dedicated to the ETF while also making a new
appropriation of those funds to pay for tax credits,
and Section 9 repealed an earmark on funds dedicated
to the ETF while also making a new appropriation of
those funds to pay for tax credits for donations to
scholarship- granting organizations, all in
violation of Art. IV, §§ 45 and 72 (§ 45 -- "Each
law shall contain but one subject, which shall be
clearly expressed in its title, except general
appropriation bills, general revenue bills, and
bills adopting a code, digest, or revision of
statutes..."; § 71 -- all appropriations other than
those contained in the general appropriation bill
"shall be made by separate bills, each embracing but
one subject.");

 

Count VI alleged that the AAA appropriated funds
from the ETF to finance tax-credit programs that
reimburse tuition and fees to nonpublic schools not
under the absolute control of the State, in
violation of Art. IV, § 73 ("No appropriation shall
be made to any charitable or educational institution
not under the absolute control of the state, other
than normal schools established by law for the
professional training of teachers for the public
schools of the state, except by a vote of two-thirds
of all the members elected to each house.");

Count VII alleged that Section 9 of the AAA provides
a 100% tax credit to be funded by revenue that would
otherwise be deposited in the BIF, in violation of
Art, XI, § 211.02 (Off. Recomp.) (income taxes shall
be earmarked for placement in the ETF and are "to be
used for the payment of public school teachers’
salaries only");

Count VIII alleged that the AAA created a new debt
in that the AAA pledges funds from existing revenue
streams to pay taxpayers in the form of refunds,
rebates, or tax credits in violation of Art. XI, §
213, ("Any act creating or incurring any new debt

8
1130987, 1131020, 1131021

against the state, except as herein provided for,
shall be absolutely void.");

Count_IX alleged that the AAA diverts money from the
ETF that is raised for the support of public schools
and appropriates and uses that money to support
sectarian and denominational schools, in violation
of Art. XIV, § 263 ("No money raised for the support
of the public schools shall be appropriated to or
used for the support of any sectarian or
denominational school."); and

Count _X alleged that the AAA diverts taxpayer funds
to religious schools through tax credits that pay
for some of or all the cost of attending such
schools, which are places of worship and ministries
of the churches or other religious organizations
that own, operate, sponsor, or control them, in
violation of Art. I, § 3 ("{NJo one shall be
compelled by law to attend any place of worship; nor
to pay any tithes, taxes, or other rate for building
or repairing any place of worship, or for
maintaining any minister or ministry "

 

On October 9, 2013, the State defendants filed a motion
to dismiss the case for failure to state a claim upon which
relief could be granted, pursuant to Rule 12(b) (6), Ala. R.
civ. P, The State defendants asserted that the 10-count

complaint fell into 2 broad categories: claims that the AAA is

 

invalid based on alleged procedural deficiencies committed
during its passage and claims that the law is improperly
spending state money. They further argued that there were no

procedural deficiencies in the passing of the AAA and that the

 

 
1130987, 1131020, 1131021
AAA does not violate any restrictions on the use of public
money. Specifically, the State defendants argued that the AAA
did not violate the original-purpose requirement or the
single-subject requirement because, they argued, the AAA
contains two ways of enhancing flexibility in the area of
education in that "both the school flexibility contracts and
the school-choice tax credit programs give their beneficiaries
flexibility from entrenched policies." They argued that the
AAA did not repeal an earmark on funds and reappropriate those
same funds in one act in contravention of Childree v. Hubbert,
524 So, 2 336, 341 (Ala. 1988). This is because, they say,
the tax-credit account established in Section 8 is within the
BIF so that “every penny of sales-tax proceeds is still going

into the Education Trust Fund" and the tax-credit program

 

established in Section 9, while reducing the overall proceeds
available to public schools from the incone-tax proceeds, does
not redirect or un-earnark the income-tax revenues that do
enter the public coffers. The State defendants argued that
the three-reading requirement was met because the Constitution
does not require that a particular version of a bill be read.

‘They argued that the amendments in HB 658 cured any procedural

20

 

 
1130987, 1131020, 1131021
deficiencies in the AAA. The State defendants argued that the
AAA did not improperly spend public funds based on Alabama
Education Ass'n v. James, 373 So. 2d 1076 (Ala. 1979). They
further argued that because the AAA provides funds directly to
parents and not to the nonpublic schools, the funds are not
being improperly used to support religious schools. Last, the
State defendants argued that the AAA did not create a new
public debt in violation of the anti-debt provision in the
Alabama Constitution because the tax credits in Section @ do
not require deficit spending.

On October 21, 2013, the circuit court granted a motion
to intervene filed by Tequila Rogers, Danyal Jones, and Mark
Jones (hereinafter collectively referred to as "the tax-credit
parents"), The tax-credit parents are parents of students
who, at the beginning of the 2013-2014 school year, used the
tax credits created by Section 8 of the AAA, as amended by HB
658, to remove their children from "failing" public schools
and enroll them in private schools. The tax-credit parents
had argued that they were entitled to intervene as a matter of
vight under Rule 24(a) (2), Ala. R. Civ. P., because they had

a significant interest in the operation of the AAA as direct

an

|
|
|

 

 
1130987, 1131020, 1131021
beneficiaries of the AAA and that their interest may be
greatly impaired by the disposition of the plaintiffs’
complaint. They also sought permissive intervention pursuant
to Rule 24(b), Ala. R. Civ. PB.

on Novenber 21, 2013, the plaintiffs filed a motion for
a judgment on the pleadings as to Counts I-vIrIZ of their
complaint. They argued that the AAA had been
unconstitutionally adopted because of the significant
alteration of ite content through a substitute bill and that
the AAA violated constitutional restrictions on the
appropriation and use of public funds. The plaintiffs did not
seek a judgment on the pleadings regarding Counts IX and x of
their complaint asserting religion-clause issues because they
asserted that factual development would be necessary with
regard to the nature of the schools that Alabama
schoolchildren will attend at taxpayer expense under the AAA.

That same day, the tax-credit parents filed a motion for
a judgment on the pleadings on all of the plaintiffs' clains.
The tax-credit parents incorporated the State defendants’
arguments and focused on the plaintiffs' claims in Count Ix

and X of their complaint, which alleged that the AAA violates

12

 

 
1130987, 1131020, 1131022
the manner in which public funds may flow to private religious
schools. They argued that the tax-credit programs are
religiously neutral student-assistance prograns under which
parents are free to choose religious and nonreligious schools.
They further argued that the AAA does not use any funds that
have been raised for the support of public schools because the
scholarships are funded by voluntary private donations, not by
public funds, The tax-credit parents argued that, although
the payment of refundable tax credits does use public funds,
those funds are paid to, and used for the support of, parents
and students, not religious schools. On April 10, 2014, the
State defendants filed a motion asserting that Counts I
through V of the plaintiffs’ complaint had been rendered moot
because the legislature had reenacted the provisions of the
AAA when it incorporated them into the Alabama Code as part of
its annual codification bill. They argued that the adoption
of the 2014 cumulative supplement cured any infirmities of the
legislative procedure in enacting the AAA.

on May 28, 2014, the circuit court entered an order in
favor of the plaintiffs as to Counts T through VITI of their

complaint. We summarize the holdings in the circuit court's

13

 
1130987, 1131020, 1131021 |

 

order as follow:

(1) The AAA, which provides in Sections 5
through 7 for local school-flexibility contracts,
and in Sections 8 through 9 for tax credits to pay
private-school tuition, contains two separate
subjects, in violation of §§ 45 and 71. The circuit
court concluded that the tax-credit programs have no
relation to the flexibility-contract provisions, and
those sections do not interact with each other. The
circuit court determined that no attempt is made in
the AAA to link these provisions in any way, and, i
indeed, the only apparent relationship between them
is the legislature's use of the flexibility-contract
bill as a vehicle for enacting the tax-credit
legislation. The circuit court also determined that
the AAA violated § 45 in that Section @ removed an
earmark on sales-tax revenue deposited in the ETF
and, instead, appropriated those funds to reimburse
parents for the cost of enrolling their children in
private schools.

 

(2) The passage of the AAA violated § 61 in that
the introduction of the substitute bill on February
28, 2013, transformed the local-school-system-
autonomy bill to a bill providing tax credits to pay
for children to leave public schools for private
schools. The circuit court determined that the
alterations in the substitute bill did not advance
local-school-system autonomy or provide school
systems with additional flexibility and, if
anything, did the opposite by setting up a system
under which certain schools deemed to be "failing"
will lose students and resources. The circuit court
also concluded that the substitute bill violated §
63 because the substitute bill, which included the
tax-credit additions, was not read on three
different days, but was instead passed by both the
House and the Senate on a single afternoon. The
circuit court stated that the violations of § 61 and
§ 63 were not "cured" by the subsequent passage of
HB 658, which amended several provisions of the AAA,

14
1130987, 1131020, 1131021

because the legislature was voting only on whether
to approve those amendments and because deficiencies
in the passage of legislation are not cured by a
subsequent vote on amendments to that legislation
based on State v. Martin, 160 Ala. 181, 48 So. 846
(2908)

(3) The AAA improperly appropriated public funds
to a “charitable or educational institution not
under the control of the state" as provided for in
§ 73 because the AAA contains an appropriation of
public funds to pay for the refundable tax credits
provided by Section 8 to parents in reimbursement of
the cost of private-school tuition. The circuit
court stated that it is not dispositive that the
funds appropriated by Section @ reach the private
schools indirectly rather than directly. The
circuit court concluded that because the intent of
the appropriation was to pay tuition for eligible
students to attend private schools in that parents
receive the tax refunds only in reimbursement of
money they have spent for tuition, the legislature
was doing indirectly what it is’ forbidden to do
directly. The circuit court determined that because
the Section 9 tax credit for donations to
scholarship-granting organizations reimburses such
donations in full, there is no private contribution,
but simply a redirection of funds from the public
fise to scholarship-granting organizations.

(4) The AAA violated Art. XI, § 211.02, Ala.
const. 1901 (Off. Recomp.), providing for income-
tax revenue to be deposited in the ETF for the
payment of teachers! salaries, because Section 9 of
the AAA uses funds that otherwise would have been
deposited into the ETF -- up to $25 million each
year -- for a purpose other than the payment of
public-school teachers! salaries. Instead, those
funds go to pay for the education of ‘certain
schoolchildren in nonpublic schools.

In its order, the circuit court denied the state

as

 
1130987, 1131020, 1131021
defendants' motion to dismiss and the tax-credit parents’
motion for a judgment on the pleadings with regard to Counts
I through VIII. The circuit court concluded that, as to
Counts IX and X, which involve religion, their motions were
moot. The circuit court enjoined enforcement of the AAA

On May 29, 2014, the State defendants and the tax-credit
parents filed a joint motion to stay the circuit court's order
enjoining the enforcement of the AAA. The plaintiffs opposed
the joint motion to stay.

on May 30, 2014, Rachell Prince, Tyrone Whitehead, and
Dalphine Wilson, parents of children who received scholarships
from the scholarship program created by Section 9 of the AAA
(hereinafter collectively referred to as “the scholarship
parents"), filed a motion to intervene. In affidavits, the
scholarship parents stated that their children were enrolled
in private schools in the fall of 2013 and received notice in
January or February 2014 that their children would receive
scholarships from a scholarship-granting organization under
the AAA to pay tuition for the 2013-2014 school year. The

plaintiffs opposed the scholarship parents’ motion to

 

intervene on the ground that motions to intervene following

1s

 

 

 
1130967, 1131020, 1131021
the entry of a judgment are generally untimely and will not be
granted except in extraordinary circumstances. ‘The plaintiffs
argued that the scholarship parents are represented by the
sane attorneys who represent the tax-credit parents and that
the attorneys have defended the constitutionality of both
Section 8 and Section 9 from the outset of the litigation.
The plaintiffs noted that the scholarship parents’ interests
are also being represented by the State defendants who are
also defending the constitutionality of the AAA in its
entirety

on June 5, 2014, the State defendants filed a timely
notice of appeal from the circuit court's May 28, 2014, order.
on dune 9, 2014, the cizcuit court granted the joint motion to
stay that part of its order enjoining the enforcement of the
ABA, That same day, the circuit court denied the scholarship
parents’ motion to intervene. On June 11, 2014, the tax-
credit parents filed a timely notice of appeal from the
cixcuit court's order of May 28, 2014, That same day the
scholarship parents filed a notice of appeal from the circuit
court's order of June 9, 2014, denying their motion to

intervene. On dune 27, 2014, this Court consolidated the

a7

 

 
1130987, 1131020, 1132021
three appeals.

Preliminary Procedural Issues
L._Whether legislative developments occurring after the
passage of the AAA have rendered the plaintiffs' procedural
‘Lain in I-V of thei laint moot?

The first issue we address is whether any of the
plaintiffs’ procedural claims were rendered moot by actions of
the legislature following the passage of the AAA. The
plaintiffs asserted several claims that the AAA was
unconstitutional based on procedural deficiencies in the
passage of the AAA. Specifically, the plaintiffs asserted:

Count I -- the AAA violated the "original purpose" requirement

 

of § 61 because a substitute version of HB 84 was proposed and
adopted on February 28, 2013; Count IT -- the AAA violated the
readings “on three different days" requirement set out in § 63
because the substitute version of HB 84 was read and passed on
February 28, 2013; and Counts IIT-v -- the AAA violated the
"single subject" requirement set out in §§ 45 and 71 because
the substitute version of HB 84 added to the flexibility
contracts for local schools Sections 8 and 9 providing for tax
credits to pay for private-school tuition. Subsequent to the

passage of HB 84, the legislature amended the AAA by passing

1s

 
1130987, 1131020, 1131021,
HB 658, and, later, the legislature adopted its annual
cumulative supplement bill in Act No. 2014-346.

A. Whether the plaintifse' claims in Counte I and II of their
sorption moot when the legislature amended the AAA in

HB 658 amended Sections 4, 5, 8, and 9 of the AAA. The
text of HB 658 indicates that the legislature voted only on
whether to amend certain sections of the ARA. A vote against
HB 658 would not have been a vote to repeal the AAA but would
have been a vote against amending the AAA. | The State
defendants argue that HB 658 amended Sections 8 and 9 and that
the plaintiffs cannot now complain that the enactment of the
substitute version of HB 84 violated the original-purpose and
three-readings requirements of the Constitution by including
Sections 8 and 9 in the substitute version.

In State v. Martin, 160 Ala. 161, 48 So. 846 (1909),
there was a challenge to an alderman's right to office where
the original bill annexed one city to another. The relators
challenged the constitutionality of the original bill, The
alderman argued that an amendnent to the original bill cured
the constitutional defect in the original bill. This Court

held that the subsequent vote on the amendment did not cure

a9

 

 
2130987, 1131020, 1131021
the constitutional defect where the subsequent vote was on the
amendment only and not on the entire bill as amended.

In Board of Revenue of Jefferson County v. Hewitt, 206
Ala. 405, 90 So. 781 (1922), Jefferson County had entered into
construction contracts based on the belief that certain bonds
could be sold to pay the contractors. However, the bonds
could not be sold at less than their face value pursuant to
the 1907 Code of Alabama. The legislature enacted a curative
statute in 1920 (applicable only to Jefferson County based on
its population) to provide for the sale of county bonds at
less than their face value and for reimbursement of
contractors who had advanced to the county the difference
between the market value and the face value of the bonds. A
taxpayer sued the Jefferson County Board of Revenue arguing
that the 1920 statute violated the Constitution, which
required a majority of electors to authorize a bond issue, and
that the 1920 statute changed the material conditions and
authority given in an earlier election authorizing bonds in
accordance with the 1907 Code. Although the Court in Hewitt
stated that "subsequent legislative ratification is the

equivalent of primary legislation," the Court recognized that

20

 
1130987, 1131020, 1132021
the extent and effect of retroactive or curative statutes may
be validated only when the legislature “originally had
authority to confer the powers or to authorize the act or
transaction" and that the curative statute did not have the
effect of validating an unconstitutional statute. 206 Ala. at
409, 90 So. at 785-386.

In Glass v. Prudential Insurance Co. of America, 246 Ala.
873, 22 So. 2d 13 (1945), superseded by statute on other
grounds as recognized by Mooney v. Weaver, 262 Ala. 392, 79
So. 2d 3 (1955), the court again addressed the
constitutionality of §§ 890 and 891 of the Code of Alabama of
1940. Those sections provided a remedy by way of a tax
vefund, but the Court had earlier concluded that they
violated the constitutional prohibition against suing the
State. A few years later, the legislature amended §§ 890 and
891 seeking to cure the constitutional defect. It was then
argued that the amended acts violated the constitutional
prohibition against reviving or amending an act by reference
to its title only. The Court held that the title to the 1943
act, which was "[t]o amend Sections 890 and #91" was not

defective even though the sections sought to be amended had

an

 
1130987, 1131020, 1231022
earlier been declared unconstitutional. The Court explained
that the reference to §§ 890 and 891 in the title of the act
was for identification only because the amending act was
“complete in itself," and "not dependent on the repealed act
for any other purpose." 246 Ala, at 583, 22 So. 24 at 16.
The fact that §§ 890 and 891 had been repealed did not
militate against their use for identification purposes. In
short, the amending act was a new act correcting the
constitutional prohibition against suing the state, which had
rendered the prior versions of §§ 890-891 unconstitutional.
The Court's statement that the amending act was complete in
itself did not indicate that any amendnents to a legislative
act reenact the original act.

In the present case, we find State v. Martin to be
controlling on this issue. HB 659 amended only certain
sections of the AAA and, in the passage of HB 658, only those
amended sections were voted on, as was the case in Martin. #8
658 was not a curative statute as was the case in Hewitt. HB
658 was anending an existing statute, unlike Glass, where the
legislature was curing the constitutional defects in an

earlier statute by creating a new statute that was "complete

22
1130987, 1131020, 1131021
and definite, in full compliance with the requirements of the
Constitution.'" 246 Ala. at 583, 22 So. at 16 (quoting Harris
v.State, 228 Ala. 100, 105, 151 So. 858, 862 (1933)). The
amendments in HB 658 do nothing to cure any of the alleged
constitutional defects in the enactment of HB 84.
Accordingly, we cannot say that the amendments to the AAA
contained in HB 658, which essentially (1) clarified some of
the terms, (2) prohibited the mandatory enrollment of a
particular student, and (3) expanded the scholarship program
to low-income students not in failing schools, mooted the
plaintiffs! arguments regarding procedural defects in the
enactment of the AAA as set out in Counts I and II of their
complaint.

B.Whether the plaintiffs' procedural_claims_in Counts _1-V
became moot when the legislature enacted the annual cumulative
supplement to the Alabama Code in Act No, 2014-346?

We now turn to whether the legislature's adoption of its
annual cumulative-supplement bill cured any alleged procedural
defects occurring during the enactment of the AAA. In Ex
parte Coker, 575 So. 24 43 (Ala. 1990), the Court explained
why the adoption of a cumulative-supplement bill did not give

the force of law to a bill that had been improperly enacted

23

 
1130987, 1131020, 1131021
but that was included in the codification bill. The Court
discussed the history of the adoption of the Code of Alabama
1975. The Court noted that the legislature authorized the
appointment of a Code commissioner in 1969 to revise, digest,
and codify all the statutes and that the legislature in 1976
appointed a special joint committee to study the Code
manuscript. All the legislators were given a copy of the Code
manuscript, and in 1977 the legislature adopted the Code
manuscript prepared by the Code commissioner, as reviewed and
revised by the legislature. The Court noted that a similar
process was used when the legislature adopted the 1852, 1867,
1876, 1886, 1896, 1907, 1923, and 1940 Codes of Alabama. The
Coker Court recognized that it was the process of adopting an
entire Code after notice, study, and revision by the
legislature of the Code commissioner's manuscript that the
Court had in mind when it held that "'{aJ1l infirmities of
legislative procedure in enacting an original act are cured

when that act is incorporated into a code and the code adopted

by the legislature.'" Ex parte Coker, 575 So. 2d at 50
(quoting Fuller v. Associates Commercial Corp., 389 So. 24

506, 509 (Ala. 1980)).

24

 

 
1130987, 1131020, 1131021

The Court in Coker went on to cite several cases that
involved the cure of defectively enacted statutes by adoption
of an entire Code where the Codes were "adopted by the process
of appointment of a code commissioner, review by the
legislature of the code as a systematic revision of existing
law, and enactment by the legislature of the manuscript as a
new code governing the subjects included therein." 575 So. 24
at $1. The Court then contrasted this systematic review of
the Codes with the 1983 cumulative-supplement act at issue in
Coker, which adopted and incorporated into the 1975 Code all
general laws enacted during the 1979 and 1980 Sessions, the
1981 Regular Session, and the 1982 Regular Session of the
legislature. The 1983 cumulative-supplement act also
corrected several grammatical and typographical errors in both
the 1975 Code and the recent enactments being incorporated
into the 1975 Code. The Court noted that the legislature had,
by acts equivalent to the 1983 act, regularly adopted and
incorporated into the 1975 Code successive cumulative
supplements in 1978, 1979, 1980, 1981, 1982, 1984, 1985, 1986,
1987, 1988, and twice in 1989.

In Ex parte State Department of Revenue, 683 So. 24 960

25

 
1130987, 1131020, 1131021
(Ala, 1996), the Court acknowledged its holding in Ex parte
Coker that the process of adopting the entire Code repeals any
portion of the original legislation and any prior codification
not included in that adoption. "[T]he adoption of the entire
Code supersedes the original enactments and any prior
codification." 683 So, 24 at 982. The Court went on to
state:

“After this Court decided Coker, the legislature
refined the codification process and began the
current practice of annually codifying legislation.
Under this new procedure, the Code commissioner
continually xeviews the manuscript of the Code and
directs the Code publisher to publish replacement
volumes and an annual supplement that incorporates
into the Code the most recent acts of a general and
permanent nature. Once the annual supplement and the
replacement volumes are published, they are reviewed
by the Code commissioner, who prepares an annual
codification bill to adopt the replacement volumes
and annual supplement. This Court, however, has not
considered the question whether this process has the
same effect as a codification of the entire Code for
the purpose of resolving conflicts between the Code
and the original act. In other words, we have not
determined if these cumulative supplements also
supersede the original enactment. Nevertheless,
because we find that the 1993 supplement is not
applicable here, we need not address this issue
now."

683 So, 2d at 982.
In Swift v, Gregory, 786 So. 2d 1097 (Ala. 2000), the
issue was whether the act as modified by the Code commissioner

26

 
1130987, 1131020, 1131021

took precedence over the original bill passed by

legislature when the two versions differed.

|
the |

The Code

commissioner moved a sentence out of a paragraph and placed it

in its own paragraph. The Court, quoting State v. Towery,

Ala

48, 49, 39 So, 309, 309 (1905), stated:

"It is the settled law of this state that the
Code of Alabama ... is not a mere compilation of the
laws previously existing, but is a body of laws,
duly enacted, so that laws, which previously
enacted, ceased to be law when omitted from [the]
Code, and additions, which appear therein, become
the law from the approval of the Act adopting the
Code."

Swift, 786 So. 2d at 1100.

We note that the complete quote from Towery, which

 

shortened in Swift, is as follows:

"It is the settled law of this State that the
Code of Alabama, adopted as was the present Code of
1896, is not a mere compilation of the laws
previously existing, but is a body of laws duly
enacted, so that laws which previously existed
ceased to be law when omitted from said Code, and
additions which appear therein become the law from
the approval of the Act adopting the Code."

143

 

143 Ala. at 49, 39 So, at 309. ‘The Court in Towery referred

to the formal process of reenacting the entire Alabama Code as

then set out in Article IV, §

‘The Court explained the process by which an entire Code is

 

27

, of the 1875 Constitution.
1130987, 1131020, 1131021,
adopted, noting that "the whole matter was referred to a
committee, which carefully examined the proposed Code,
comparing section by section, with the amendments and
additions suggested, and reported on the same and the Act was
passed according to the requirements of the Constitution."
143 Ala. at 49, 39 So. at’ 309.

In Densmore v, Jefferson County, 813 So. 2d 844 (Ala.
2001), the Court first concluded that the Storm Water Act was
a general law rather than a local law within the meaning of
the constitutional requirement that notice of the intent to
apply a local law be published in the affected counties as set
out in Art. IV, § 106, Although not necessary to its holding
that the Storm Water Act was constitutionally enacted, the
Court went on to discuss whether the 1995 adoption of the
annual cumulative-supplement bill to the 1975 Code would have
cured any alleged procedural defects in its enactment because
thie was the basis of the trial court's holding. The Court in
Densmore concluded that Ex parte Coker was not controlling,
because "the annual codification process was begun after this
court had decided Coker," as noted in Ex parte Department of

Revenue. 813 So. 2d at 851. The Densmore Court went on to

28

 
1130987, 1131020, 1131022
hold that, assuming arguendo, that the Storm Water Act was a
local act, any infirmities in the adoption of the act were
cured by the adoption of the annual cumulative-supplement
bill.

In the present case, we find Ex parte Coker to be
controlling on the issue whether the adoption of the 2014
cumulative-supplenent bill in Act No. 2014-346 cured any
alleged enactment-related constitutional deficiencies in the
AAA, The Coker Court explained why procedural infirmities in
enacting a particular act are cured by the adoption of Code as
a systematic revision of existing law but are not cured by the
adoption of the annual cumulative-supplement bill. The United
States Bankruptcy Court for the Northern District of Alabama
also explained in In xe Jefferson County, 469 B.R. 92, 105
(Bankr. N.D. Ala. 2012), the collaborative process that is
employed when a Code is enacted:

"For the compilation of the Code of Alabama

1975, The Michie Company and the Sobbs-Merrill

Company were collectively the Code Conmissioner and

collaborated with the Alabama Legislature through

the Joint Legislative subcommittee on Code Revision

of the Alabama Senate and the House of

Representatives (the Joint Committee). As part of

this process, The Michie Company and Bobbs-Merrill

Company solicited the views of the Alabama State
Bar, the Legislative Reference Service, other groups

29

 

 
1130987, 1131020, 1131022
and associations, and attorneys throughout Alabama.

The Joint Committee and the Code Commissioner

communicated via a series of memoranda dedicated to

each title of the draft compilation of the 1975

code. These © communications include the

recommendation by the Code Commissioner to the Joint

Committee and its responses, which sometimes include

agreeing with what the Code Commissioner proposed

and other times disagreeing and providing edited or

alternative language."

No such review or collaboration occurred in the passage
of Act No. 2014-346. Instead, the adoption of the cumulative
supplement in Act No, 2014-346 was part of the Code
commissioner's’ duties to incorporate into the 1975 Code all
the recent enactments of the legislature and to prepare a bill
to adopt those changes to the Code. § 29-7-6(6), Ala. Code
1975. The Code commissioner performs editorial functions such
as changing the wording of descriptive headings and
catchlines; changing and substituting hierarchy units;
changing and correcting reference numbers (so long as such a
correction can be made without altering the substance of a
law); removing language in the Code that is deemed surplusage;
substituting hierarchical designations; changing words when

directed by law; dividing, consolidating, and rearranging

°The Code commissioner is also the director of the
Legislative Reference Service of Alabama.

30

 
1130987, 1131020, 1131021
hierarchy units and parts of them; resolving nonsubstantive
conflicts between multiple acts; changing capitalization,
spelling, and punctuation; and correcting grammatical,
clerical, and typographical errors by adding or deleting
language or by other methods. § 29-7-8(a)(1)-(14), Ala. Code
1975. ‘The Code commissioner also determines the appropriate
location in the Code to place recent enactments. However,
those editorial functions "may not alter the sense, meaning,
or effect of any act." § 29-7-8(a).

To conclude that the adoption of the annual cumulative-
supplement bill cures any enactment-related deficiencies would
be to ignore the procedural requirements set forth in the
Alabama Constitution, which serve to protect the integrity of
the legislative process. Cf. State v. Buckley, 54 Ala. 599,
612 (1875) (explaining that the "main controlling aim and
purpose" of constitutional provisions such as the original-
purpose requirement, three-readings requirement, and single~
subject requirement is to "prevent 'hodge-podge' and injurious
combinations, by confining each law to one subject” and to
"prevent hasty and inconsiderate legislation, surprise and

fraud"). It would also effect a nullification of numerous

31

 
1130987, 1131020, 1131022
cases addressing those constitutional procedural requirenents
for enacting legislation. It is the thoughtful, systematic,
and collaborative review of the entire Code through a Code
manuscript along with revisions by the legislature when
adopting an entire new Code that validate any procedural
infirmities in the enactment of original legislation.

We recognize that the Court in Densmore held that any
procedural infirmities in the Storm Water Act were cured
through the legislature's enactment of the annual cumulative-
supplement bill in 1996. The Densmore Court found that Ex
parte Coker was not controlling, in part because "the annual
codification process was begun after this Court decided
Coker," as noted in Ex parte State Department of Revenue. 813
So. 2d at 851. In Ex parte State Department of Revenue, the
Court did note that the process had been "refined" since this
Court's opinion in Ex parte Coker. 683 So. 2d at 982.
Indeed, we note that subsequent to our decision in Ex parte
Coker, the legislature, in 1993, did statutorily create a
permanent Code commissioner. Act No. 1993-618, amending § 29-
J-1 et seq., Ala. Code 1975. Before then, the Code

commissioner was sometimes the publisher of the Code,

32

 
1130987, 1131020, 1131021
sometimes an individual appointed by the governor or the
Legislature, or sometimes a Code commission or Code committee.
In 1996, the legislature adopted § 29-7-8, addressing the Code
commissioner's compilation of the Code, specified editorial
functions, and exempting the adoption of the annual
cumulative-supplement bill from the single-subject requirement,
of § 45. However, the adoption of the cumulative-supplement.
bills enacted after 1993 occurred nearly annually and
accomplished essentially the same tasks as today, i.e.,
adopting and incorporating recent enactments from the previous
year or legislative sessions into the 1975 Code, along with
making typographical and grammatical changes. Cf. Act No.
1978-674; Act No. 1978-37; Act No. 1980-753; Act No. 1981-653;
Act No. 1982-567; Act No. 1983-131; Act No. 1984-259; Act No.
1985-45; Act No, 1986-375; Act No. 1987-805; Act No. 1988-918;

Act No. 1989-525; Act No. 1989-990; Act No. 1991-55:

 

Act No.
1993-614; Act No. 1994-305; Act No. 1995-255; Act No. 1996-
261; Act No. 1997-216; Act No. 1998-279; Act No, 1999-203; Act
No, 2001-344; Act No, 2002-403; Act No. 2004-484; Act No.
2006-291; Act No. 2007-147; Act No. 2009-249; Act No. 2010-

598; Act No. 2011-236; Act No. 2012-363; and Act No. 2014-346.

33

 
1130987, 1131020, 1131021
In concluding that Ex parte Coker was not controlling, the
court in Densmore placed too much emphasis on a distinction in
the "refined" procedure adopted after ker was
issued.

The Densmore Court also concluded that Ex parte Coker was
not controlling because Coker involved a pocket veto of
legislation that never became law.‘ However, the substance of
Coker was that the bill did not later become law simply
because it was incorporated into the Code by the adoption of
the annual cumulative-supplement bill. Whether a bill has
constitutional defects in the manner in which it was passed or
an event denied a bill's status as law, neither should be
implicitly validated by a later adoption of the annual
cumulative-supplement bill. In concluding that Ex parte Coker
was not controlling, the Court in Densmore placed too much
emphasis on distinguishable facts.

To the extent that the judicial dicta in Densmore can be

‘A "pocket veto" is a veto that occurs when the governor
leaves a bill unsigned at the end of a legislative session,
denying the legislature the opportunity for a potential
override vote

34

 
2130987, 1131020, 1131021

relied upon and conflicts with this opinion, we overrule it.’

  

‘The adoption of the annual cumulative-supplement bill did not
cure any procedural defects in the enactment of the AAA.
“{Clodification of an invalid statute cannot cure a
constitutional defect." Densmore, 813 So. 24 at 859 (Moore,
os,

IL,_Whether the plaintiffs’ claims in Counts I-11 of their

abi tis ine $

 

esenting) .

We now turn to whether the plaintiffs’ procedural claims
set out in Counts I-III of their complaint regarding the

original-purpose requirement of § 61, the three-reading

$  w1mobiter dictum is a an expression of
opinion by the court or judge on a
collateral question not directly involved,
or mere argument or illustration
originating with him, while judicial dictum
is an expression of opinioa on a question
directly involved, argued by counsel, and
deliberately passed on by the court, though
not necessary to a decision. While neither
is binding as a decision, judicial dictum
is entitled to much greater weight than the
other, and should not be lightly
disregarded. "'"

Ex parte M.D.C., 39 So. 34 1117, 1141 (Ala. 2009) (Murdock, J.,
dissenting) (quoting Stark v. Watson, 395 P.2d 191, 196 (Okla.
1961), quoting in turn Crescent Ring Co. v, Travelers' Indem.
Co., 102 N.J.L. 85, 132 A. 106, 107 (1926)).

 

35

 
2130987, 1131020, 1131021
requirement of § 63, and the single-subject requirement of §
45, involve a political question such that those
constitutional requirements are reserved for the legislature
to determine. The State defendants argue that the three-
readings requirement speaks in terms of "bill{s]," which
highlights its relationship to matters of "internal voting
proceedings," which is within the domain of the legislature as
discussed by the Court in Birmingham-Jeffergon Civic Center
hority v. ixmingham, 912 So. 24 204 (Ala.
2005) (hereinafter "BJCCA"). They contend that the original-
purpose requirement also speaks in terms of "bill(s]" and
therefore endows the legislature with primary enforcement
responsibility. The State defendants argue that the single-
subject requirement will lure the Court into making improper
policy judgments.* MWe note that "! [t]he "political question"
doctrine is grounded primarily in the separation of powers. '*
McInnish_v. Riley, 925 So. 2d 174, 187 (Ala. 2005) (quoting
Eletcher v. Kentucky, 163 $.W.2d 852, 860 (Ky. 2005).

In BECCA, we declined to consider a "nonjusticiable

‘The state defendants exclude from their political-
question argument the plaintiffs’ procedural claims set out in
Counts IV and V.

36
1130987, 1131020, 1231021
political question" involving the voting procedures of the
legislature. This Court referred to the United states Supreme
Court's formulation of what constitutes a nonjusticiable
political question, being mindful that there are differences
between the United States Constitution and the Alabama
constitution in that the separation-of-powers doctrine is
explicit in the Alabana Constitution and implied in the United
states Constitution:

"rt is apparent that several
formulations which vary slightly according
to the settings in which the questions
arise may describe a political question,
although each has one or more elements
which identify it as essentially a function
of the separation of powers. Prominent on
the surface of any case held to involve a
political question is found [1] a textually
demonstrable constitutional commitment of
the issue to a coordinate political
department; or [2] a lack of judicially
discoverable and manageable standards for
resolving it; or [3] the impossibility of
deciding without an initial policy
determination of a kind clearly for
nonjudicial discretion; or [4] the
impossibility of a court's undertaking
independent resolution without expressing
lack of the respect due coordinate branches
of government; or [5] an unusual need for
unquestioning adherence to a political
decision already made; or [6] the
potentiality of embarrassment — from
multifarious pronouncements by various
departments on one question."

37

 

 
1130987, 1131020, 1131021
BICCA, 912 So, 2d at 214-15 (quoting Baker v. Carr, 369 U.S.
186, 217 (1962)).

In BJCCA, the City of Birmingham and Jefferson County
sought a judgment declaring that certain taxation statutes
were invalid because they were not passed by a majority of a
proper quorum of the House of Representatives, as required by
§ 63 of the Alabama Constitution. 912 So. 2d at 206-07. The
issue before the trial court was whether "a bill must receive
the affirmative vote of a majority of a quorum, or ... only
the affirmative vote of a majority of the yea and nay votes
cast in the presence of a quorum." 912 So. 24 at 209. The
trial court found that the Constitution required the former --
the affirmative votes of a majority of a quorum -- but that
only the latter had actually occurred, rendering the acts
unconstitutional. On appeal, thie Court held that the case
presented a nonjusticiable political question and that the
trial court should have declined to decide the question. 912
So. 2d at 205. The Court explained that there was evidence in
the form of affidavits that, for at least 30 years, the
legislature had interpreted § 63 to mean that when a quorum is

present and a bill receives a favorable majority of those

38

 
1130987, 1131020, 1131021
votes for and against it, then that bill has passed that house
of the legislature. The Court noted that, as a matter of
local legislative courtesy, members of the legislature had the
practice of abstaining from voting on a bill of purely local
application unless the bill is applicable to that legislator's
county. Although the members of the legislature did not
always follow this practice, both the House and the Senate had
rules in place contemplating that fewer than a quorum present
may vote on a bill. In short, the legislature's
interpretation of § 63 was reflected in its rules and
practices. The Court, following the principles in Baker v..
carr, concluded:
"section 53, Ala. Const. 1901, specifically

commits to each house of the legislature the ‘power

to determine the rules of its own proceedings.’ Our

Constitution contains no identifiable textual

limitation on the legislature's authority with

respect to voting procedures that would permit

judicial xeview of those procedures. There is also

@ lack of judicially discoverable and manageable

standards for resolving whether the House of

Representatives constitutionally passed Act No. 288

and Act No. 357. Finally, for the judicial branch to

declare the legislature's procedure for determining

that a bill has passed would be to express a lack of

the respect due that coordinate branch of

government. For each of these three reasons, this

case presents a nonjusticiable political question."
912 So. 2d at 221.

39

 
1130987, 1131020, 1132021
BICCA was not the first time this Court had addressed the
interplay between the separation of powers and judicial review
of legislative action. In Rice v. English, 835 So. 2d 157
(Ala. 2002), there was a constitutional challenge to the
Senate's redistricting plan. In adéressing the defendants!
argument that the Court should decline to address the
challenge based on the separation-of-powers doctrine, the
Court stated:
"guch abdication of judicial responsibility is
inconsistent with the settled principle that the
people have forbidden the Legislature from
conducting itself in a manner inconsistent with
their constitution and when it does, it is incumbent
upon the judiciary to mullify a legislative

enactment contrary to the constitution. See Ex parte
Selma & Gulf R.R., 45 Ala. 696 (1871).

835 So, 24 at 162. The Court went on to acknowledge the
principle in Selma & Gulf R.R., 45 Ala. 696 (1871), that
although the Court has the power to exercise judicial review
of acts of the legislature, the Court should be mindful of the
need for restraint.

"'No power of this grave nature [i.e.,

judicial review of legislative acts] is

expressly given. Considering its

importance, it is a little strange that it

has been wholly omitted. But, grant that it

exists. It can not be permitted to rest
upon mere inference and argument; because,

40
1130987, 1131020, 1131021

if the inference is a mistake, or the
argument is false, its exercise is an
usurpation by one branch of the government
against the authority of another. Did the
people mean to grant such a power, unless
some express Clause of the constitution was
clearly disregarded? I think not.'*

835 So. 2d at 162 (quoting Selma & Gulf R.R., 45 Ala. at 728).

Subsequent to BJCCA, the Court addressed whether the
constitution was violated by the legislature's authorization
of a permanent joint legislative committee to disburse
appropriations from the education budget through awards of
community-services grants. The Court concluded that the case
wae not concerned with internal legislative matters of
parliamentary procedure, but with a question concerning the
fundamental power of the legislature to enact a law of
statewide application. The political-question doctrine was no
bar, therefore, to judicial resolution of the issue presented.

"(I]£ he question is not one of discretion but of

power, the separation-of-powers doctrine is no bar

to judicial review. In other words, where the issue

is whether '*the [legislative branch has] exceeded

the limits of [its] authority, thereby acting

unlawfully, the courts will not hesitate to say

so."! PACE, Suburban Bus Div, of Reg'l Transp, Auth.

vy. Regional Transp, Auth., 346 I11.App.3d 125, 136,

803 N.E.2d 13, 23, 280 Til.Dec. 783, 793 (2003) .

(quoting West side Org. Health Servs. Corp. _v.

Thompson, 73 I1l.App.3d 179, 187, 391 N.8.2d 392,
399, 29 Ill.Dec. 129, 136 (1979), rev'd on other

 

 

an

 
1130987, 1131020, 1132021

grounds, 79 T1l.2d 503, 404 N.E.2d 208, 38 T11.Dec.
7a (1980)).*

McInnish, 925 So. 2d at 187 (emphasis omitted).

In Jefferson County v, Weissman, 69 So. 3d 827 (Ala.
2011), the issue involved whether published notice of
legislation regarding the reenctment of Jefferson County's
occupation tax complied with § 106 of the Alabama
Constitution, which requires notice by publication to those
affected by the local legislation. The Court noted that the
purpose of the notice requirements of § 106 is the prevention
of deception and surprise so that those affected may have a
fair opportunity to protest or otherwise to express their
views. The Court held that it could review the adequacy of
the notice given for the local act. The Court noted that
numerous cases from the Court had assessed the adequacy of
notice under the constraints of § 106 to determine the
constitutionality of the challenged legislation. The court
concluded that it was the special province of the courts to
determine whether the notice requirements complied with the
Constitution, and the Court declined to retreat from its
history of judicial review on the subject.

In order to determine the existence and extent of any

42

 
1130987, 1131020, 1131021
“textual commitment” to the legislature in this case as set
out in the first factor in Baker v. Carr, it is necessary to
turn to the constitutional provisions governing the exercise
of the power in question. Tt is without question that the
text of the Alabana Constitution commits to the legislature
the legislative power of this state. Art. IV, § 44 ("The
legislative power of this state shall be vested in a
legislature, which shall consist of a senate and a house of
representatives."). The text of the Alabama Constitution
also gives each house the power to enact rules governing its
proceedings. Art. IV, § 53 ("Bach house shall have power to
determine the rules of its proceedings and to punish its
members and other persons, for contempt or disorderly behavior
in its presence; to enforce obedience to its processes; to
protect its menbers against violence, or offers of bribes or
corrupt solicitation; and with the concurrence of two-thirds
of the house, to expel a member, but not a second time for the
same offense; and the two houses shall have all ‘the powers
necessary for the legislature of a free state.").

Although not referring to a single internal rule or to

the legislature's choice or policy of complying with its

43

 
1130987, 1131020, 1131021
internal rules or procedures, the state defendants essentially
argue that the Constitution grants the legislature power to
set ite own internal procedures, including the procedures by
which it determines its own compliance with constitutional
procedural limitations, and because, they say, the plaintiffs
are making a policy-based challenge of whether the AAA met the
original-purpose, three-readings, or _single-subject
requirements, allowing the legislature final authority to
decide its compliance with those constitutional requirenents
will in no way deprive another constitutional provision of its
field of operation. We note that the present case is easily

distinguishable from BJCCA. BJCCA involved an internal rule

 

promulgated by the House of Representatives, along with
evidence of at least 30 years of local legislative courtesy
regarding the legislature's internal voting procedures. It is
also distinguishable from Ex parte Marsh, 145 So, 3d 744 (Ala.
2013). In Marsh, this Court addressed a mandamus petition
arising out of allegations that the AAA was passed in
violation of the Open Meetings Act and an internal legislative
rule regarding additions to bills going to a conference

committee

44

 
1130987, 1131020, 1131021
The factors set out in Baker v, Carr must be interpreted
in light of the purpose of the political-question doctrine:

"The political question doctrine excludes from

 

|icial review ies al
Around policy choices and value determinations
constitutionally committed for i eccetion te the

halls of Congress or the confines of the Executive
Branch. The Judiciary is particularly ill suited to
make such decisions, as ‘courts are fundamentally
underequipped to formulate [state] policies or
develop standards for matters not legal in nature.'"
Japan Whaling Ass'n v. American Cetacean Soc'y, 478 U.S. 221,
230 (1986) (emphasis added). Nevertheless, the exercise of the
judiciary's power to interpret the Constitution and to review
the constitutionality of the acts of the legislature does not
offend these principles. Marbury v. Madison, 5 U.S. (1
Cranch) 137, 177-78 (1803). The legislature's exclusive
power over its internal rules does not give the legislature
the right to usurp the function of the judiciary as ultimate
interpreter of the Alabama Constitution. In carrying out this
function, we do not violate the separation-of-powers doctrine
upon which the political-question doctrine is based when we
determine whether a legislative enactment was constitutionally
adopted. Therefore, the first factor in Baker v. Carr does

not preclude our review of the plaintiffs’ challenges.

45
3130987, 1131020, 1131021

Neither does this Court lack "judicially manageable
standards" under the second factor in Baker v. Cars to
evaluate the plaintiffs' constitutional challenges. In United
States v. Munoz-Flores, 495 U.S. 385 (1990), the issue was
whether 18 U.S.C, § 3013, which required courts to impose a
monetary “special assessment" on any person convicted of a
federal misdemeanor, was passed in violation of the
origination Clause of the United States Constitution. The
origination Clause mandates that "[aJ11 Bills for raising
Revenue shall originate in the House of Representatives." U.S.
const, Art. I, § 7, cl. 1, In rejecting the argument that
the case involved a political question, the Supreme Court

stated:

“The Government also suggests that a second
Baker factor justifies our finding that this case is
nonjusticiable: The Court could mot fashion
"judicially manageable standards' for determining
either whether a bill is ‘for raising Revenue’ or
where a bill ‘originates.' We do not agree. The
Government concedes, as it must, that the ‘general
nature of the inquiry, which involves the analysis
of statutes and legislative materials, is one that
ig familiar to the courte and often central to the
judicial function. Brief for United States 9. To
be sure, the courts must develop standards for
making the revenue and origination determinations,
but the Government suggests no reason that
developing such standards will be more difficult in
this context than in any other. Surely a judicial

46
1130987, 1131020, 1131021
system capable of determining when punishment is
‘cruel and unusual,' when bail is '[e]xcessive,'
when searches are ‘unreasonable,’ and when
congressional action is ‘necessary and proper’ for
executing an enumerated power is capable of making
the more prosaic judgments demanded by adjudication
of Origination Clause challenges."

Munoz-Plores, 495 U.S, at 395-96. There exists no lack of
judicially manageable standards where the underlying
determination to be made is legal in nature and requires this
Court to apply normal principles of interpretation to the
constitutional provisions at issue.

‘The plaintiffs are alleging that the legislature violated
mandatory provisions of the Alabama Constitution. simply
because the plaintiffs and the State defendants disagree on
whether the legislature's actions met the procedural
requirements of enactment does not require "an initial policy
determination of a kind clearly for nonjudicial discretion."
Raker v. Carr, 369 U.S. at 217. A political question exists
under the third factor of Baker v. Carr when, "to resolve the
dispute, the court must make a policy judgment of a
legislative nature, rather than resolving the dispute through
legal and factual analysis." EEOC v. Beabody W. Coal Co., 400
F.3d 774, 784 (9th Cir. 2005). This Court need not make a

a7
3230987, 1131020, 1232021
legislative policy determination in order to resolve the
constitutional challenges. Answering these questions does not
infringe upon the legislature's exclusive constitutional
authority to adopt and enforce its own rules of procedure.
The plaintiffs! complaint requires an interpretation of
the Constitution, and we decline to forgo our responsibility
to ensure that the legislature functions within the bounds of
the Constitution under the pretext of deference to a coequal
branch of government as set out in the fourth factor in Baker
v.Carr. Tavalidating a law for violating the original-
purpose, three- readings, or single-subject requirements of
the Alabana Constitution would not evince a lack of respect
for the legislature within the meaning of Baker v. Carr. The
8 with

 

authority to determine adherence to the Constitution
the judiciary, and, if the legislature has not discharged its
constitutional duty, then it is the judiciary's duty to say
50.

The State defendants do not suggest that answering the
plaintiffs’ constitutional challenges presents an "unusual
need for unquestioning adherence to a political decision

already made." Nor do they suggest that there is any more

48
1130987, 1131020, 1131021
danger of "multifarious pronouncements" in this context than
in any other in which this Court determines the
constitutionality of legislation. Baker v, Carr, 369 U.S. at
217. Accordingly, the plaintiffs’ procedural challenges to
the AAA, set out in Counts I-III are justiciable.
Constitutionality of the AAA

We now turn to whether the circuit court erred in
granting the plaintiffs' motion for a judgment on the
pleadings regarding the constitutionality of the AAA in Counts
I-VITI of their complaint.’

tandard of
A circuit court's grant of a Rule 12(c), Ala. R. Civ. P.,

motion for a judgment on the pleadings is subject to de novo

review. Universal Underwriters Ins: Co. v. Thompson, 776 So.
2d @1 (Ala. 2000). "A court reviewing a judgment on the

*With regard to the constitutionality of the AAA, the tax-
credit parents incorporate by reference several of the State
defendants’ arguments. They also raise essentially the same
arguments regarding the constitutionality of the AAA as the
State defendants have regarding their remaining arguments. We
have considered the tax-credit parents' fine briefs. For ease
of discussion, we will continue to refer to the State
defendants in addressing all the arguments responding to the
plaintiffs’ constitutional challenges to the AAA.

49

 

 
1130987, 1131020, 1131022
pleadings accepts the facts stated in the complaint as true
and views them in the light most favorable to the nonmoving

Universal Underwriters, 776 So. 24 at 82

 

party

This Court's review of constitutional challenges to
legislative enactments is de novo. Richards v, Izzi, 819 So.
24 25, 29 n. 3 (Ala, 2001). In McInnish v. Riley, 925 So. 2a

at 178, this Court further stated:

“(t]he standard of review of the trial court's
judgment as to the constitutionality of legislation
is well established. This Court '*should be very
yeluctant to hold any act unconstitutional."*
'{Z]n passing upon the constitutionality of a
legislative act, the courts uniformly approach the
question with every presumption and intendment in
favor of its validity, and seek to sustain rather
than strike down the enactment of a coordinate
branch of the government." Alabama State Fed'n of
Labor v. McAdory, 246 Ala. 1, 9, 1@ So. 2d 810, 815
(1944). This is so, because 'it is the recognized
duty of the court to sustain the act unless it is
clear beyond a reasonable doubt that it is violative
of the fundamental law.' 246 Ala. at 9, 18 So. 24
at 815."

(Bnphasis omitted.)

"o"rt ig the duty of the court to construe a statute so
as to make it harmonize with the constitution if this can be
done without doing violence to the terms of the statute and

the ordinary canons of construction."'" Ex parte Jenkins, 723

50

 

 
1130987, 1131020, 1131021
So. 2d 649, 658 (Ala. 1998) (quoting Board of Educ, of Choctaw
cnty, v. Kennedy, 256 Ala. 478, 482, 55 So. 2d S11, 514
(1951), quoting in turn Almon v. Morgan Cuty,, 245 Ala. 241,
246, 16 So. 24 511, $16 (1944)).

“Where the validity of a statute is assailed and
there are two possible interpretations, by one of
which the statute would be unconstitutional and by
the other would be valid, the courts should adopt
the construction which would uphold it. ... Or, as
otherwise stated, it is the duty of the courts to
adopt the construction of a statute to bring it into
harmony with the constitution, if its language will
permit."

Alabama State Fed'n of Labor v. McAdory, 246 Ala. 1, 10, 18

So. 24 810, 815 (Ala, 1944), "!"We will not invalidate a

statute on constitutional grounds if by reasonable

construction it can be given a field of operation within

constitutionally imposed limitations. "'* Lunsford v. J

cnty., 973 So. 24 327, 330 (Ala. 2007) (quoting Town of vance

v. City of Tuscaloosa, 661 So, 2d 739, 742-43 (Ala.

1995) (other citation omitted)).

Discussion
III, Whether the AAA_was enacted in violation of Art. IV, §

61, of the Alabama Constitution’

The plaintiffs challenge the constitutionality of the

51

 

 
3130987, 1131020, 1131021
AAA, arguing that the substitute version of HB 64, which added
the tax-credit programs to pay for the education of Alabama
schoolchildren in nonpublic schools, altered the original
purpose of HB e4 in violation of Article IV, § 61. Section 61
provides that "[n]o law shall be passed except by bill, and no

bill shall be so altered or amended on its passage through

 

either House as to change its original purpose." The
purpose" of a bill as contemplated in § 61 of the
Constitution "is the general purpose of the bill and not the
mere details through which and by which that purpose is
manifested and effectuated." State Docks Comm'n vy, State, 227
Ala. 521, 533, 150 So. 537, 547 (1933).

In Blackwell v, State, 230 Ala. 139, 162 So. 310 (1935),
the issue was whether the purpose of a bill was so changed
during the legislative process as to violate § 61. The Court
held that it was not. The original bill relating to gambling

provided as follows:

"an Act to prohibit the operation of slot
machines and punchboards.

"Be it enacted by the Legislature of Alabama:

"section 1. That the operation of all slot

52

 
1130987, 1131020, 1131021

machines, other than those that automatically give
value for value, and the operation of all
punchboards are hereby prohibited.

"sec. 2. Any person violating this Act shall be
guilty of a misdemeanor."

230 Ala. at 140, 162 So. at 311.
‘The final bill that was adopted provided as follows:

"section 1, DEFINITIONS. -- That the term gambling
device shail include and be deemed to embrace the
following: (a) Any machine, mechanical device,
contrivance, appliance or invention, whatever its
name or character, in the use of which a
consideration is paid or deposited, and there is
gambling or the hazarding of small amounts of money
or property to win larger amounts of money or
property. (b) Any machine, mechanical device,
contrivance, appliance or invention, whatever its
name or character, which determines the result of
winning or losing money or property by chance, lot
or luck, in which neither the will nor skill of man
can operate to influence the result of winning or
losing. | (c) Any machine, mechanical device,
contrivance, appliance or invention, whatever its
name or character, for the division of or
distribution of either money or articles of personal
property, where said distribution or division is to
be determined by lot or chance amongst those who
take shares or are interested in the scheme. (d) Any
machine, mechanical device, contrivance, appliance
or invention, whatever its name or character, which
is operated or can be operated as a game of chance.
(e) Any machine, mechanical device, contrivance,
appliance or invention, whatever its mame or
character, where money or property is hazarded on
chance, or risked on an uncertain event. (£) Any
machine, mechanical device, contrivance, appliance
or invention, whatever its name or character, into

 

53

 
1130987, 1131020, 1131021

which money is placed or deposited upon chance or
upon the result of the action of such machine,
mechanical device, contrivance, appliance of
invention. (g) Any machine, mechanical device,
contrivance, appliance or invention, whatever its
name or character, which dispenses to the player or
operator of the same any package of merchandise and
also gives the player or operator the chance of
placing himself in a position where his next
succeeding play will assure him of a return of
several times the value of the coin placed therein
by him, (h) Any machine, mechanical device,
contrivance, appliance or invention, whatever its
name or character, intended for the purpose of
winning money or any other thing by chance or
hazard. (i) Any machine, mechanical device,
contrivance, appliance or invention used or intended
to be used as a substitute for, or in place of, any
machine, mechanical device, contrivance, appliance
or invention described and enumerated in paragraphs
fa), (b), (c), (a), (e), (£), (g), and (h) of this
Act.

“section 2, MACHINES OR DEVICES NOT REGARDED AS
UNLAWFUL. -- The provisions of this Act shall not
apply to any machine, mechanical device,
contrivance, appliance or invention by which
merchandise is dispensed in a uniform quantity to
each purchaser, although the price may be deposited
in a slot in such machine, mechanical device,
contrivance, appliance or invention, provided such
machine or device can not be played for money,
property, checks, credits, or any other
representative or token of value. Nor shall the
provisions of this Act apply to machines or devices
Where the element of chance is wholly absent, as
where the machine or device indicates with absolute
certainty, before the player deposits his coin or
check, what he will receive from the machine,
mechanical device, contrivance, appliance or
invention.

 

54

 
1130987, 1131020, 1131021

"Section 3. UNLAWFUL TO POSSESS, KEEP, OWN, SET UP,
OPERATE OR CONDUCT GAMBLING DEVICES. --' That it
shall be unlawful for any person, firm, corporation
or association of persons, within this State, to
possess, keep, own, set up, operate, or conduct, or
permit to be set up, operated, or conducted, any
gambling device prescribed in Section : of this Act,
at any place whatsoever.

"Section 4, PUNISHMENTS FOR VIOLATING ACT. -- Any
violation of the provisions of this Act shall be a
misdemeanor punishable by a fine of not more than
five hundred dollars, to which, at the discretion of
the court or judge trying the case, may be added
imprisonment in the county jail, or confinement at
hard labor for the county, for not more than six
months.

"Section 5. DUTY OF SHERIFF TO SEIZE AND REMOVE. --
It shall be the duty of the sheriff of any county in
which any gambling device may be found to seize the
same, remove it from the place where it is found,
and keep until disposed of as hereinafter provided
in this Act. Within five days after the seizure and
removal of any gambling device, the sheriff making
the same shall report the seizure and detention to
the circuit or other solicitor, or deputy solicitor,
or any prosecuting officer within the county where
the gambling device was found or seized, giving a
full description thereof, the number of the device,
if any, the place and firm of manufacture, the
pexson in whose possession it was found, the person
making claim to the same, or any interest therein,
4f the name can be ascertained or is known, and the
date of the seizure.

"Section 6. DUTY OF SOLICITOR TO FILE BILL POR
FORFEITURE AND CONDEMNATION. -- Upon the receipt of
the report from the sheriff mentioned in Section 5
of this Act it shall be the duty of the circuit or
other solicitor or deputy solicitor, or any
prosecuting officer within the county wherein the

55

 
1130987, 1131020, 1131021

gambling device was found or seized, to forthwith
file a bill in equity in the circuit court of the
proper county, praying that such seized device be
declared a gambling device, be forfeited with its
contents to the State, and be destroyed. Any person,
firm, corporation or association of persons in whose
possession said device may be found, or who shall
claim to own the same, or any interest therein,
shall be made a party defendant to said bill, and
thereupon such matter shall proceed and be
determined in equity in the circuit court of the
proper county in the same form and manner, as near
as may be, as in cases for the forfeiture and
destruction of contraband liquors, conveyances and
vehicles transporting prohibited liquors within the
State, except as herein otherwise provided.

"Section 7. DISPOSITION OF CONTENTS OF GAMBLING
DEVICE. -- It shall be the duty of any sheriff or
other officer seizing and removing any gambling
device to open the same in any manner, in the
presence of the register of the circuit court, in
equity, for the proper county, to take therefrom any
money or property found therein, and to turn over
and deliver to the said register said money or said
property. The register shall safely keep said money
and other property found in such gambling device,
and if said device is condemned and forfeited as
being in violation of the terms of this Act, the
court shall direct in its decree that one-half of
the money, or monies, taken therefrom, shall be paid
to the officer making the seizure, and the remaining
one-half shall be paid into the general fund of the
county in which said gambling device was found and
seized. Anything else found in said gambling device,
such as candies, gums, merchandise, or other
personal property, shall be disposed of as the court
may in its decree direct.

"section 8. APPEAL LIES TO COURT OF APPEALS. -- From
any decree or judgment of the circuit court, in
equity, condemning any device to be a gambling

56

 
3130987, 1131020, 1131021

device, the party or parties aggrieved thereby may
appeal to the Court of Appeals of Alabama, within
fifteen days from the date of such decree or
judgment, upon giving security for the cost of such
appeal. ‘And from any judgment or decree of the
circuit court, in equity, denying the condemnation
and forfeiture of any such device, the State may
likewise appeal within fifteen days without the
giving of any bond. When any person, firm,
corporation, association of persons, or the State,
appeals, the alleged gambling device shall remain in
the custody of the sheriff until a final
determination of the cause on appeal.

"Section 9, DECREE TO DIRECT DESTRUCTION OF GAMBLING
DEVICE. -- When any decree of condemnation and
forfeiture is made in any case filed under the
provisions of this Act, the judge or chancellor
making such decree shall direct therein the
destruction of said gambling device by the sheriff
of said county in the presence of the register of
the court; and said order or decree, in the event no
appeal is taken, shall be carried out and executed
before the expiration of twenty days from the date
of the decree.

"section 10. HOW COSTS ARE TO BE PAID. -- Upon any
decree of condemnation and forfeiture, the court, at
its discretion, shall direct that the costs of the
proceedings be paid by the person in whose
possession said gambling device was found, or by any
party or parties who claimed to own said gambling
device, or any interest therein, and who contested
its condemnation and forfeiture, and if such costs
are not collected by execution, the register shall
tax and collect such costs from the county in which
said bill was filed, and same shall be paid as in
criminal cases in which the State fails, upon the
court making an order to that effect.

"Section 11. IF ONE PART OF ACT DECLARED VOID, OTHER
SECTIONS NOT AFFECTED. -- If, for any reason, any

87

 
1130987, 1131020, 1231021 |

section, paragraph, provision, clause or part of
this Act shall be held unconstitutional or invalid,
that fact shall not affect or destroy any other
section, paragraph, provision, clause pr part of
this Act not in and of itself invalid, but the
remaining provisions shall be enforced without
regard to those so invalidated.

"Section 12. This shall take effect on October
ast, 1931."

 

Act No. 671, Ala. Acts 1931.
In addressing the original-purpose requirement, the

Blackwell Court stated:

"It is true that said act as finally adopted is
much broader than the bill as originally introduced
and much more comprehensive as to details, but we do
not think that the purpose of the bill was so
changed as to violate section 61 of the
Constitution. The main purpose of the bill as
introduced was to prohibit the operation of
punchboards and slot machines, and the bill as
passed simply broadens the scope and purpose and
prevents the possession, etc., of same which tends
to prevent the operation of same. We therefore hold
that the amendments or changes were mere extensions
or related details and did not change the general

 

purpose of the bill. Stein v, Leeper, 78 Ala. 517
{(1885)]; Hall _v. Steele, 82 Ala. 562, 2 So. 650
((2887)]; Alabama State Bridge Corp. v. smith, 217

Ala. 311, 116 So, 695 [(1928)]. True, the bill as
amended does not specifically mention punchboards,
but the instruments mentioned and described could
include punchboards kept or used as a gaming

device."
Blackwell, 230 Ala. at 140, 162 So. at 311.
In Qpinion of the Justices No, 183, 264 Ala. 176, 85 So.

58

 
1130987, 1131020, 1131021
24 391 (1956), the House of Representatives sought, among
other things, an advisory opinion as to whether the amendment
to the bill at issue so altered the bill as change its
original purpose in contravention of § 61. The original bill
stated that the purpose was to provide for the operation of
public schools; the amendment provided that the purpose was to
provide for public education, including institutions of higher
learning. The Court noted that, under Alabama caselaw, public
schools had never been understood to include higher
institutions of learning like colleges and universities. The
court stated:

‘However the purpose of a bill within the meaning of

§ 61 of the constitution is the general purpose of

the bill, not mere details through which the purpose
is to be manifested and effectuated. State Docks

Commission v, State ex rel. Jones, 227 Ala. 521, 150
So. 537 [(1933)]. Tt is our duty to uphold the

constitutionality of an act of the legislature by
adopting any reasonable construction of which it is
susceptible. Standard oil Co. v. State, 178 Ala.
400, 59 So. 667 [(1912)]. And in determining the
legislative intent in a bill we must look to the
entire bill and not to isolated phrases or clauses
in the bill, State v. Western Union Telegraph Co.,
196 Ala. 570, 72 So. 99 [(1916)]. It will be noted
that in the original bill the purpose of the bill as
stated in section 4 is to prevent any deficit in the
appropriations for any fiscal year made in Act No.
343 approved September 5, 1955. These appropriations
according to Act No. 343 relate to public education,
the normal schools and the institutions of higher

59

 

 

 

 
1130987, 1131020, 1131021

learning, among others. It can, therefore, well be
said that the Act as originally propoged relates to
public education including institutions of higher
learning when all of the provisions of the Act are
considered. If this be true, then the term public
schools in the original bill was used in a more
comprehensive sense than that indicated by the
aforecited cases. In fact the amendment can be
considered as clarifying the purposes and intent of
the bill in its use of the term ‘public schools.’
Sook v, Burke, 177 Ala. 155, 58 So. 984 [(1922)];
Blackwell v. State, 230 Ala. 139, 162 So. 310
[(1935)}. Accordingly, the original purpose of the
bill is not changed by the amendment. In_xe Opinion
of the Justices [No. 79], 249 Ala. 500, 31 So. 2d
644 ((1947)]; In_xe Opinion of the Justices [No.
2031, 252 Ala. 525, 41 So. 2d 758 [(1949)]."

264 Ala. at 190, 85 So. 24 at 394-95.

In Opinion of the Justices No, 266, 361 So. 24 187 (Ala.
1980), the Senate asked the Court whether § 61 had been
violated by subsequent amendments to an original bill. The
purpose of the bill as originally introduced was to transfer
funds from the state insurance fund to be earmarked for
Medicaid purposes. The Finance and Taxation Committee amended
the bill to provide only for "medicaid and investigation of
welfare fraud purposes." The Court opined that the
Committee's amendment did include an additional earmarking

provision, i.e., it provided that the transferred funds could

 

be used for "investigation of welfare fraud." However, that

60

 
1130987, 1131020, 1132021
amendment was sufficiently germane and cognate to the original
purpose of the original bill that the amendment did not
violate § 61. Subsequently, another amendment was made to the
bill to include funds to pay for cost-of-living raises for
certain education personnel and State officials and for
Medicaid emergency use and to appropriate the balance into
the ETF (then known as the Special Education Trust Fund), The
court held that the second amendment changed the nature of the
bill from one earmarking funds into one appropriating funds
and that the second amendment provided funds to pay cost-of-
living raises for certain personnel and employees. The Court
concluded that the second amendment changed the general
purpose of the bill, which was to transfer certain funds into
the General Fund to meet specified needs, to one that
appropriated certain funds in violation of § 61.

In the present case, we cannot say that the substitute
version of HB @4 go changed the original bill that its
original purpose was changed in violation of § 62. The
purpose of a bill within § 61 has been held to be the general
purpose. A determination of whether an amendment or

substitute act changed the original purpose depends on whether

61

 
1130987, 1131020, 1131021
the subject matter of the amendment or substitute was germane
to the general purpose. The substitute version of HB 64 was
not 20 diverse from the original purpose as to have no
necessary connection to it. ‘The purpose of the original bill
in providing flexibility contracts was to advance the benefits
‘of local school and school-systens autonomy in innovation and
creativity by exempting the schools from certain State laws,
including state BOR rules, regulations, and policies, in
exchange for academic and associated goals for students
through flexibility contracts. The substitute bill contained
the provisions for flexibility contracts between schools and
the State BOF and included the tax-credit programs to provide
for state accountability for students in failing schools. New
matter may be included in an amended bill, so long as that new
matter is germane to the general purpose. The prohibition in
§ 61 is directed to the introduction of matter that is not
germane to the general purpose of the legislation or that is
unrelated to ite general purpose. We cannot say that the
substitute version of HB 84 changed the general purpose of the
original bill go as render the AAA unconstitutional under §

61.

62

 
1130987, 1131020, 1131021

IV._Whether the AAA was enacted in violation of Art. IV, §
of the Al: Constitution?

The plaintiffs challenge the constitutionality of the
AAA, arguing that the original version of HB 84 so differed
substantially in form and substance from the substitute
version of HB 84 that the substitute version was not read on
three different days in each house in violation of § 63.
Section 63 provides:

"Every bill shall be read on three different
days in each house, and no bill shall become a law,
unless on its final passage it be read at length,
and the vote be taken by yeas and nays, the names of
the members voting for and against the same be
entered upon the journals, and a majority of each
house be recorded thereon’ as voting in its favor,
except as otherwise provided in this Constitution."

Thie Court has stated:
"The requirement for several readings of subjects of
consideration by legislative bodies as directed to
the purposes, among others, of preventing hasty and
ill-advised action, to the assurance of cautious and
deliberate judgment by the bodies."

Jones v. McDade, 200 Ala. 230, 234, 75 So. 988, 998 (1917).
The circuit court here found Opinion of the Justices No.

12, 223 Ala. 365, 368, 136 So. 585, 588 (1931), to be

persuasive in its analysis of the three-readings requirement.

In Opinion of the Justices No, 12, the Justices responded to

63

 

 
1130987, 1131020, 1131021,

 

the Governor's request for an advisory opinion as to whether
or not the legislature, in proposing an amendment to the
Constitution by Senate Bill No. 520, had complied with the
provisions of § 284 of the Constitution, which requires that
a proposed amendment to the Constitution be read in each house
on "three several days." The original version of the proposed
constitutional amendment was read three times in the Senate
and passed. Tt was then sent to the House, where it was read
once, and the House amended the original version. After
nonconcurrence by the Senate, the amended version of the
proposed amendment went to a conference committee, where it
was again amended. This last version of the proposed
amendment was adopted by both the House and the Senate on the
last legislative day.

‘The original version of the proposed amendment authorized
the issuance of interest-bearing warrants for the purpose of
paying a past-due indebtedness. The version that passed both
houses on the last legislative day completely revised the
system of taxation. The proposal to change the system of
taxation then became the major subject and purpose of the

proposed constitutional amendment. In its amended form, the

64

 
1130987, 1131020, 1131021
proposed constitutional amendment was not read on three
separate days in each house. The Court held invalid the
proposed amendnent as thus amended by the legislature,
concluding that the changes in the subsequent versions of the
Proposed amendment were too drastic to come within the
protection of the “principle that proposed amendments may be
amended during the course of the legislative procedure for the
purpose of perfecting the same and to harmonize with the
judgment of the requisite majority of the two bodies" and
‘that the proposal of the amendment in question violated both
the letter and spirit of section 264 of the Constitution, and
must be declared null and void." 223 Ala. at 369, 136 So. at
see

In Storrs v, Heck, 238 Ala. 196, 190 So. 78 (1939), a
constitutional amendment was challenged on the ground that
certain procedural requirements set forth in the Constitution
were not followed, including the three-reading requirement of
§ 204. The proposed constitutional amendment, as it passed
the House, suspended the constitutional limitations on the
legislature's authority to reduce compensation of state

officials. It was amended in the Senate by a substitute bill

65

 
1130987, 1131020, 1132021
to provide, among other things, a maximum compensation of
$6,000 per annum for State officials. The House concurred in
the Senate's amended version, and the amendment was
subsequently ratified by the electorate. The main argument
was that the proposed constitutional amendment as voted on by
the people did not receive the required three readings in haec
verba in both houses. The Court held that the Senate
amendment limiting compensation was in the nature of a
"legislative detail" and, therefore, did not constitute a
departure from the original bill.

In Qpinion of the Justices No, 224, 335 So, 24 373 (Ala.
1976), one of the questions answered was whether the
legislature had complied with the three-readings requirement
of § 284, The original House bill proposed a constitutional
amendment authorizing the issuance and sale of general
obligation bonds in the principal amount of $7,000,000 to fund
construction of secure mental-health facilities. It was read
twice in the House. Tt was amended by a substitute bill that
raised the authorization to $9,000,000 and, in addition,
provided that part of the money be used to construct a seed-

technology center and a seed-processing facility. That bill

66

 
1130987, 1131020, 1131021
was xead at length and passed in the House. It was then sent
to the Senate and read at length twice. It was amended in the
Senate to authorize $15,000,000 in principal amount of bonds
and to provide that a portion of the additional proceeds from
the sale of the bonds be used to construct prison-
rehabilitation facilities. The amended bill was read at
Length and passed by the Senate

‘The Court found that the amendments to the bill were not
read in each house on “three several days" as required in §
284. However, the Court concluded that there had been
substantial compliance with § 284. "The central question in
the proposed constitutional amendment, posed by original House
Bill 235, was whether Alabama would incur debt. No amendment
of that bill changed that question. Bach of the three readings
in the respective houses of the Legislature posed that
question to those houses." 335 So. 2d at 375.

In the present case, it is clear that the substitute
version of HB 84 was not read "on three different days" in
each house. However, we hold that an amended bill or a
substitute bill, if germane to and not inconsistent with the

general purpose of the original bill, does not have to be read

67
1130987, 1232020, 1132021
three times on three different days to comply with § 63. The
legislature complies with the three-readinge requirement if
the three readings include the version before the substitution
was made. On their face, the legislative journals indicate
three readings of HB 84 in both houses even though the
substitute version was read only once in each house. This
practice complies with § 63 so long as the original bill and
the amended or substitute bill are not vitally altered so that
there is no longer a common purpose or relationship between
the original bill and the amended or substitute bill

Several state courts have held that a substituted or
amended bill is not a new bill necessitating rereading where
its subject is germane to the original bill. Yan Bmint vw.
State, 653 P.2d 243, 345 (Alaska Ct. App. 1982) (holding that
the reading requirement did not extend to amended bills, even
those that have been ‘substantially alter(ed]," unless the
subject matter of the bill is changed); People ex rel. caty
collector v. Jeri, Ltd., 40 111, 24 293, 239 N.B.24 77
(1968) (holding that constitutional requirement that bills be
read three times does not extend to an amended bill when the

amendments are germane to the general subject of the bill);

68

 

 
1130987, 1131020, 1131021
People v, Clopton, 117 Mich. App. 673, 324 N.W.2d 128
(1982) (holding that when an original bill has met the
procedural constitutional requirements for passage, an amended
version or substitute bill need not also meet those
vequirements in its later form, so long as the amended version
ox substitute serves the same purpose as the original bill, is
in harmony with the objects and purposes of the original bill,
and is germane thereto); State v. Ryan, 92 Neb. 636, 139 N.W.
235 (1912) (holding that where amendments have been made to a
bill after its first or second reading, it is not required
that the bill be read on three separate days); Frazier v.
Board of Comm'rs, 194 N.C. 49, 138 S.E. 433, 437
(1927) (holding that rereading of a bill is necessary only
when the bill is amended "in a material matter"); Hoover v.
Board of County Comm'rs, 19 Ohio St. 3d 1, 5, 482 N.E.2d 575,
579 (1985) (holding that amendments that do not "vitally alter"
the substance of a bill do not trigger a requirement that the
amended bill be reconsidered three times); and stilp v.
Commonwealth, 588 Pa. 539, 905 A.2d 918 (2006) (holding that a
bill does not have to be considered on three separate days if

amendments to the bill during the legislative process are

69

 
1130987, 1131020, 1131021
germane and do not change the general subject of the bill).
Cf. Maybee v, State, 4 N.Y. 34 415, 417-18, 828 N.E.2d 975
(2005) (discussing compliance with New York Constitutional
requirement that "no bill shall be passed or become a law
unless it shall have been printed and upon the desks of the
members, in its final form, at least three calendar
legislative days prior to its final passage"). Accordingly,
we cannot say that the failure to read the substitute version
of HB 84 on three different days violated § 63 so as to render
the AAA unconstitutional.

V._Whether_the AAA was enacted in violation of Art, IV, §§ 45
and_71,_of the Alabama Constitution?

In challenging the AAA under §§ 45 and 71, the plaintiffs
alleged in Count III of their complaint that the AAA violates
the "single-subject" requirements because Sections 5-7 of the
AAA authorize the State BOB to enter into school-flexibility
contracts with local school systems to allow exemptions from
certain State laws or regulations in contrast to Sections 8
and 9, which create tax credits to pay for the education of
schoolchildren in nonpublic schools. In Count Iv, the
plaintiffs allege that, because Section 8 "set(s) aside"
sales-tax money from the ETF and deposits it into a Failing

70

 
1130987, 1131020, 1131022
School Income Tax Credit Account, the ABA both repeals an
earmark of funds and makes a new appropriation in one act. In
Count V, the plaintiffs allege that because Section 9 provides
for an incone-tax credit to reimburse 100% of the amount
contributed to scholarship-granting organizations, the AAA
redirects income-tax revenue from the BIF and effectively
repeals an earmark and appropriates funds in one bill.

Section 45 provides:

“The style of the laws of this state shall be:
'Be it enacted by the legislature of Alabama, ' which
need not be repeated, but the act shall be divided

into sections for convenience, according to
substance, and the sections designated merely by

figures. Each law shall contain but one subject.
which shall be clearly expressed _in its title,
except general appropriation bills, general revenue

bills, and_bills adopting a code, digest, or.
revision of statutes; and no law shall be revived,
amended, or the provisions thereof extended or
conferred, by reference to its title only; but so
much thereof as is revived, amended, extended, or
conferred, shall be re-enacted and published at
length."

(Bmphasis added.)
Section 71 provides:

"The general appropriation bill shall embrace
nothing but appropriations for the ordinary expenses
of the executive, legislative, and judicial
departments of the state, for interest on the public
debt, and for the public schools. The salary of no
officer or employee shall be increased in such bill,

n

 
1130987, 1131020, 1131021

nor shall any appropriation be made therein for any
officer or employee unless his employment and the
amount of his salary have already been provided for

by law. All other appropriations shall be made by
ills, ea ject.”

(Bmphasis added.)

The plaintiffs have alleged that the AAA violated the
single-subject requirements of both § 45 and § 71. As the
court explained in Opinion of Justices No. 174, 275 Ala. 254,
154 So, 2d 12 (1963), an appropriations bill that is not a
general appropriations bill must meet the single-subject
requirement of § 71. Tf an appropriations bill complies with
§ 71 in having a single subject, then it necessarily complies
with that portion of § 45 mandating that each law contain but

one subject.* Section 45 contains the additional requirement

 

‘section 45 excepts general appropriation bills from its
single-subject requirement. Section 71 limits the
appropriations that can be made in a general appropriation
bill to the ordinary expenses of government. Chief Justice
orbert theorized why general appropriations bills were exempt
from the single-subject requirement: "It probably became
evident that there was an advantage in allowing more than one
subject to be included in a single bill where that bill
provided for the ordinary expenses of state government. It is
impractical and too time-consuming to fund every agency in a
separate bill." Childree v. Hubbert, 524 So. 2d 336, 343
(Ala. 1988) (Torbert, C.J., concurring in part and dissenting
in part). In Opinion of the Justices No. 323, 512 $o. 24 72
(Ala, 1987), the Court explained how public schools went fron
being funded in a general appropriations bill to being funded

cry

 
1130967, 1131020, 1131021
that the subject of each law "shall be clearly expressed in
its title.”

The purpose behind the single-subject requirement has
been stated to be:

"'Birst, to prevent "hodgepodge" or "logrolling"
legislation; second, to prevent surprise or fraud
upon the Legislature by means of provisions in bills
of which the titles give no intimation, and which
might, therefore, be overlooked, and carelessly and
unintentionally adopted; and, third, to fairly
apprise the people, through ‘such publication of
legislative proceedings as is usually made, of the
subjects of legislation that are being considered,
in order that they may have the opportunity of being
heard thereon, by petition or otherwise, if they
shall so desire.' Cooley, Const. Lim. 172, No one of
these purposes is of more or less importance than
the other. The mischief of hodgepodge legislation,
=> the inclusion in one act of matters or subjects
tof a very heterogeneous nature, which may mislead,
and surprise the good faith of ‘the law-making body;
or logrolling legislation, intended to enlist
varied, and, it may be, hostile, interests, in
support of the proposed act, would have ‘been
avoided if the constitutional limitation had gone no
further than the requisition that ‘each law shall
contain but one subject.' The unity of subject is
an indispensable element of legislative acts; but it
is not the only element; the subject must be
‘clearly expressed in its title.' The purpose of
this requisition is, as expressed in the second
proposition of the exposition of Judge Cooley, ‘to
prevent surprise or fraud upon the legislature by
means of provisions in bills of which the title

 

through a separate education appropriation bill and subject to
the single-subject requirements of §§ 45 and 71.

cE

 
1130987, 1131020, 1131022

Lindsay v. United states Sav. & Loan Ass'n, 120 Ala. 156, 172,
24 So. 171, 176 (1988) (addressing the single-subject

gives no intimation, and which might therefore be
overlooked, and carelessly and unintentionally
adopted.’ The third proposition must be deemed, and
by all authority is deemed, of equal importance, --
‘to fairly apprise the people, through such
publication of legislative proceedings as is usually
made, of the subjects of legislation that are being
considered, in order that they may have opportunity
of being heard thereon, by petition or otherwise, if
they so desire.’ When there is a fair expression of
the subject in the title, all matters reasonably
connected with it, and all proper agencies or
instrumentalities, or measures, which will or may
facilitate its accomplishment, are proper to be
incorporated in the act, and, as usually said, are
cognate or germane to the title.”

requirement of the 1875 Constitution).

State ex rel, Birmingham v. Miller, 15@ Ala. 59, 62, 48 So.

As early as 1909, thi

 

Court recognized:

"The history as well as the purpose of section 45 of
the Constitution is now too well understood to
require extended elucidation here. There was no
design in this clause to embarrass legislation by
making laws unnecessarily restrictive in their scope
and operation, and thus multiplying their number;
but the framers of the Constitution meant to put an
end to a species of vicious legislation commonly
termed 'logrolling,' and to require, in every case,
that the proposed measure shall stand upon its own
merits, so that neither the members of the
Legislature nor the people may be misled by the
title. Ballentyne v, Wickersham, 75 Ala. 533
[(1883)1; Cooley's Con. Lim, (7th Ed.) 117."

™

 

 
1230987, 1131020, 1131021
496, 497 (1909).

We turn first to the Counts IV and V of the plaintiffs’
complaint in which they allege that the AAA violates the
single-subject requirements of §§ 45 and 71 because Section 8
repealed an earmark on funds dedicated to the ETF while also
making a new appropriation of those funds to pay for tax
credits and because Section 9 repealed an earmark on funds
dedicated to the ETF while also making a new appropriation of
those funds to pay for tax credits for donations to
scholarship-granting organizations. Because, as we discuss
infra, Section 8 does not make an "appropriation," the circuit
court ered in concluding that the AAA violated the single-
subject requizement in Sections @ and 9. However, the
plaintiffs have also argued that the AAA violated the single-
subject requirement of §§ 45 and 71 because, they argue, the
school-flexibility contracts in Sections 5-7 are a separate
subject from the tax-credit programs in Sections @ and 9, as
set out in Count III of their complaint.

‘The plaintifés argue that Sections 5-7 create a mechanism
by which public schools can enter into contracts with the

State to obtain exemptions from certain state regulations and

18
1130987, 1131020, 1131021
that these sections contain nothing about tax credits, private
schools, scholarship-granting organizations, or assistance to
parents of students who transfer from public to nonpublic
schools. They argue that the two tax-credit programs in
Sections 8 and 9 do nothing to advance or impact and that they
have no relevancy to the local school-flexibility contracts.
‘The plaintiffs contend that the circuit court was correct in
rejecting the argument that the single subject of the AAA was
"education" based on Opinion of the Justices No. 323, 512 So.
2a 72 (Ala. 1987).

In Opinion of the Justices No, 323, the Court was asked
for its opinion on the constitutionality of a bill that would
provide appropriations for public educational purposes
generally and, more specifically, for the elementary and
secondary schools of the state; for junior and technical
colleges; for colleges and universities; for various other
State agencies; and for entities that are not State agencies,
but some of which, at least arguably, serve educational
purposes. ‘The constitutional provisions at issue were § 45,
which requizes that bills, except for general appropriation

bills, contain only one subject, and § 71, which restricts the

16

 
1130987, 1131020, 1131021
contents of general appropriation bills. The Court explained
that the bill was not a general appropriation bill. The
general appropriation bill that is exempt from the single-
subject requirement under § 45 and shall embrace nothing but
appropriations for the ordinary expenses of the "executive,
legislative, and judicial departments, ... and for public
schools" under § 71 cannot be bifurcated. The Court explained
that another reason the bill was not a general appropriations
bill was because the Court had held that "public schools," as
that term is used in § 45, includes only elementary and
secondary schools. Because the bill at issue included
technical schools, junior colleges, and universities, then the
bill was not a general appropriations bill. The Court
concluded that the bill was governed by the single-subject
requirements of §§ 45 and 71.

The Court, in discussing whether the title of the bill
clearly contained only one subject, acknowledged that the
appropriations for public education would be a very broad
subject. The Court also acknowledged that a statute may have
a very broad subject with numerous provisions and still comply

with the single-subject provisions of the Constitution so long

7
1130987, 1131020, 1231021
as those provisions relate to the same subject. The Court
went on to explain the history of how Alabama progressed to
the point where a separate appropriation bill for public
education is much larger than the general appropriation bill
and why the general appropriation bill no longer appropriates
money for public schools. 512 So. 2d at 76-77. The Court
concluded that appropriations for public education have been

treated as a single subject since 1927,

"and throughout that time the education
appropriation bill has had such a consistent content
as to define that single subject. ‘These

appropriations have been made in this way for so

long that neither legislators nor the public could

fail to be put on notice of the content of the

education appropriation bill. Therefore, we are of

the opinion that the title of HB 269 adequately

expresses the single subject of the bill ...."
512 So. 2d at 77. However, the Court went on to hold that the
bill violated § 45 and § 73 (appropriations to charitable or
educational institutions not under the absolute control of the
State) because some of the appropriations for “public
education" were to "non-State agencies." 512 So. 2d at 78.
‘The Court opined that the appropriations to the non-State
agencies should be eliminated. The Court also noted that

whether appropriations to State agencies for education

78

 

 
1130987, 1131020, 1131021
purposes, such as an appropriation to the state health
department for immunization of schoolchildren, would have to
wait for a later determination because the description in the
bill was too general.

We recognize that the Court in Opinion of the Justice No.
323 opined that part of the education appropriation bill
violated § 45 because it made appropriations to non-state
agencies. We also recognize that the Court concluded that
because public-education funding had been treated as a
separate bill for so long the bill complied with § 45 because
it put the public and the legislature on notice of the content
of the education appropriation bill. However, as discussed
infra, the AAA does not involve any "appropriations," and the
single-subject at issue in the AAA is education reform through
accountability. This Court recognized in Bagby Elevator &
Electric Co, v. McBride, 292 Ala. 191, 195-96, 291 So. 2d 306,
310 (1974), that, if the subject is stated in broad terms,
then naturally a broader range of provisions will relate to
the subject.

‘The plaintiffs contend that the flexibility contracts to

allow for creativity and innovation in schools are unrelated

19

 
1130967, 1131020, 1131021
to tax credits and scholarships that do not help public
schools and do nothing to reform education or make failing
schools more accountable because they contend the tax credits
will negatively impact public schools. ‘The state defendants
contend that providing parents and students with additional
educational options is education reform, just as is allowing
local school systems "struggling to improve academic outcomes
and close the achievement gap" to enter into flexibility
contracts. The State defendants argue that giving parents
additional educational options will make failing schools,
i.e., ones "struggling to improve academic outcomes," more
accountable to parents and that those schools will need to
improve in order to get off of the State's list of "failing
schools" if they wish to retain students (and the state funds
that accompany them).

** [A] statute has but one subject, no matter to how many
different matters it relates if they are all cognate, and but
different branches of the same subject.'" Ex parte Hilsabeck,

477 So. 24 472, 475 (Ala. 1985) (quoting Knight v, West Alabama

Envtl. Improvement Auth., 287 Ala. 15, 22, 246 So. 2d 903, 908
(ag972)) «

a0

 
2130987, 1131020, 1132021

"It is settled under our decisions that however
numerous the subjects stated in the title, and
however numerous the provisions in the body of the
act may be, if they can be by fair intendment
considered as falling within the subject-matter
legislated upon in the act, or necessary as ends and
means to the attainment of such subject, the act
does not offend our constitutional provision that no
law shall embrace more than one subject, which must
be expressed in its title.‘

Alabama State Fed'n of Labor v, McAdory, 246 Ala. 1, 10, 18
So. 24 810, 816 (1944) (quoting State v. Henry, 224 Ala. 224,

227, 139 So. 278, 281 (1931) (emphasis added)). We cannot say
that the means by which the legislature chose to embrace
education reform and accountability -- through flexibility
contracts and tax credits -- did not attain the end. The
parties disagree as to the effect the tax credits will have on
education; this alone, however, does not indicate that the
school-flexibility contracts address a different subject than
the provisions in Sections 8 and 9 creating the tax-credit
programs. The puzpose of the single-subject requirements is
not to resolve such a disagreement. Accordingly, the AAA does
not violate the single-subject requirements of §§ 45 and 71.

VE. Whether the tax-credit provisions of the AAA violate Art.
TW._§ 73, of the Alabama Constitution?

‘The plaintiffs have presented a constitutional challenge

8

 

 
3130987, 1131020, 1131021
to the tax-credit provisions of the AAA. Section 8 and
Section 9 of the AAA are now codified at § 16-6D-1 et seq.
Section 16-6D-8(a) (1) (formerly a part of Section 8) of the AAA
provides a refundable Alabama income-tax credit "to the
parent of a student enrolled in or assigned to attend a
failing school to help offset the cost of transferring the
student to a nonfailing public school or nonpublic school of
the parent's choice." The income-tax credit is an amount
equal to 80% of the "average annual state cost of attendance"
for a public K-12 student during the relevant tax year or the
actual cost of attending a nonfailing public school or
nonpublic school, whichever is less. § 16-6D-8(a)(1)." TE
the income-tax Liability of a parent of a transferring student
is less than the total credit allowed, the taxpayer is
entitled to a refund or rebate equal to the balance of the
unused credit. § 16-6D-8(a) (1). Section 16-6D-8 (a) (2) of the

ABA provides that the authorized tax credits "shall be paid

ewrhus, if a parent takes advantage of the AAA by
transferring hie or her child to a [nonfailing public school
or a] nonpublic school and receives the tax credit, the
child's failing school retains the remaining twenty percent of
state funds ‘for as long the parent receives the tax credit,’
even though the failing school no longer bears the expense of
educating the child who transferred." CM, ex rel. Marshal)
v.Rentley, 13 F. Supp. 3d 11a8, 1194 (M.D. Ala. 2014).

a2

 
2130987, 1132020, 1132022
out of sales tax collections made to the Education Trust Fund,
and set aside by the Comptroller in the Failing Schools Income
Tax Credit Account." The AAA does not require a nonfailing
public or nonpublic school to enroll any student seeking a
transfer from a failing school under the AAA. See § 16-6D-
8(d) (1), Ala. Code 1975.

Section 16-6D-9(a) (2) (formerly a part of Section 9) of
the AAA also creates a scholarship program whereby individual
taxpayers may claim a tax credit up to certain limits for
total contributions made to scholarship-granting organizations
who, in turn, provide educational scholarships to students
attending a failing school so that those students may attend
a nonfailing public or nonpublic school. section 16-6D-
9(a) (3) further authorizes tax credits to be claimed by
corporate taxpayers up to certain limits for contributions
made to scholarship-granting organizations. The AAA imposes
various administrative accountability and academic standards
upon the scholarship-granting organizations.

‘The plaintiffs alleged in Count Vi of their complaint
that the tax-credit provisions of the AAA violate Art. IV, §

73, of the Alabama Constitution of 1901. Section 73 provides

83

 
1130987, 1131020, 1131021
that

"{n]o appropriation shall be made to any charitable

or educational institution not under the absolute

control of the state, other than normal schools

established by law for the professional training of
teachers for the public schools of the state, except

by a vote of two-thirds of all the members elected

to each house. "*

‘The plaintiffs asserted in their complaint that the AAA
appropriates funds from the ETF to finance the tax credits
provided for by § 16-6D-8(a) (2) (formerly a part of Section 8)
of the AAA and made available to the parents of students
attending failing schools, in order to “reimburse [those
parents for] tuition and fees paid to nonpublic schools, which
by the statute's own definition are ‘not under the
jurisdiction of the State Superintendent of Education and the
State Board of Education.'" The plaintiffs alleged that "[bly
appropriating public funds in this manner, the AAA effectively
provides for an appropriation to educational institutions that
are not under the absolute control of the State." The
plaintiffs also asserted that the income-tax credit found in
§§ 16-6D-9(a) (2) and (3), which provides a tax credit to those
individuals and corporations that have made a contribution to

“The AAA was not approved by a two-thirds vote of all
members elected to each house.

ea
1130987, 1131020, 1131021
a scholarship-granting organization, channelled] to
charitable organizations monies that otherwise would have gone
to the public [and] is the functional equivalent, in all
respects, of an appropriation to such charitable institutions
that are not under the absolute control of the state." The
plaintiffs alleged that because the AAA provides for
appropriations to educational and charitable institutions that
are not under the absolute control of the state, and because
those appropriations were not approved by a two-thirds vote of
all members of each house, the AAA violates § 73.

In its order, the circuit court found that the tax-
credit provisions of the AAA constituted a prohibited
appropriation to a charitable or educational institution in
contravention of § 73. Specifically, the circuit court
stated:

"The AAA contains an appropriation of public
funds to pay for the refundable tax credits provided

by Section 8 to parents in reimbursement of the cost

of private school tuition, It is not dispositive

that the funds appropriated by Section 8 reach the

private schools indirectly rather than directly.

The intent of the appropriation is to pay the

tuition for eligible students to attend private

schools; this is the purpose for which the funds are
appropriated, and parents receive the tax refunds

only in reimbursement of money they have spent for
that purpose. It has long been established that

as
1130987, 1131020, 1132022

‘the legislature cannot do indirectly that which it
is forbidden to do directly.’ Ex parte State ex
rel. Patterson, 108 So. 24 448, 453 (Ala. 1958). An
instructive case is Haley v. Clark, 26 Ala. 439
(1855), in which the Alabama Supreme Court held that
the Constitution reserved to the executive branch
the power to grant pardons and remit fines, and that
the legislature could not circumvent this
restriction on its authority through [a] bill
xefunding certain fines after they had been paid.
So too here, the legislature cannot avoid the
constitutional limitation on appropriating funds to
private charitable and educational institutions by
instead reimbursing to parents the cost of their
tuition payments at such institutions.

"The section 9 tax credit for ‘donations’ to
charitable scholarship-granting organizations is
equally problematic. Because this tax credit
reimburses such donations in full, there is in fact
no private contribution, but simply a re-direction
of funds from the public fisc to scholarship-
granting organizations. If it were possible for the
legislature by this artifice to avoid the
Constitution's funding restrictions, Section 73 --
and numerous other constitutional provisions that
place restrictions on the use of public funds --
would be rendered toothless."

thus, the circuit court concluded that the tax credits
violated § 73 because the credits had the practical effect of
being an “appropriation" of public funds to nonpublic
educational institutions. The circuit court reasoned that the
tax credits prevented the state from collecting income-tax
revenues that it would have otherwise been entitled to collect

had it not been for the tax credits.

26

 

 
1130987, 1131020, 1131022,

The State defendants argue on appeal that the circuit
court erred in concluding that §§ 16-6D-8 and -9 constitute
vnconstitutional appropriations because, they say, the tax
credite found in the AAA do not "appropriate" public funds for
the benefit of non-State charitable or educational
institutions. The State defendants contend that the Alabama
Constitution expressly recognizes that "appropriations" relate
to "money in the state treasury" and cannot be construed to
include tax credits.

"tWe axe cognizant that the long-settied and fundamental
rule binding this Court in construing provisions of the
constitution is adherence to the plain meaning of the text.'*
Town of Gurley v, M& N Materials, Inc., 143 So. 34 1, 13
(Ala. 2012) (quoting Jefferson Cnty. v. Weissman, 69 So. 34
827, 834 (Ala. 2011)). "' (T]he Constitution is not to have a
narrow or technical construction, but mist be understood and

enforced according to the plain, common-sense meaning of its

terme.'" Houston cnty, Econ. Dev. Auth, v. state, (Ms.
1130388, November 21, 2014] _ So. 34 _, __ (Ala.

2014) (quoting Hagan_v. Commissioner's Court of Limestone
cnty., 160 Ala. 544, 554, 49 So. 417, 420 (1909)). "'"In

a7
3130987, 1231020, 1132021
construing a constitutional provision, the courts have no
right to broaden the meaning of words used and, likewise, have
no right to restrict the meaning of those words."' This Court
is '*not at liberty to disregard or restrict the plain meaning
of the provisions of the Constitution."'* City of Bessemer v.
McClain, 957 So. 24 1061, 1092 (Ala. 2006) (quoting City of
Birmingham v, cit Lis, 654 So. 24 532, 538
(Ala, 1995), quoting in turn McGee v, Borom, 341 So. 24 142,
143 (Ala. 1976))

Traditional definitions of "appropriations" do not extend
to include tax credits. Appropriations have been defined as
"[e}he act by which the legislative department of government
designates a particular fund, or sets apart a specified
portion of the public revenue or of the money in the public
treasury, to be applied to some general object of governnental
expenditure, or to some individual purchase or expense.’
Black's Law Dictionary 93 (Sth ed. 1979); Toney v. Bower, 318
TLL, app, 34 1194, 744 N.E, 2d 351, 253 TIL. Dec. 69 (2002);
McAlpine v. University of Alaska, 762 P.2d 61, 87 (Alaska
1988) (*'An appropriation is the setting aside from the public

revenue of a certain sum of money for a specified object, in

88

 

 
1130987, 1131020, 1131022
such a manner that the executive officers of the government
are authorized to use that money, and no more, for that
object, and no other.'"(quoting State ex rel. Finnegan v.
Dammann, 220 Wis, 143, 264 N.W. 622, 624 (1936))).

In contrast to an appropriation, a tax credit has been
defined as "[a]n amount subtracted directly from one's total

tax liability, dollar for dollar, as opposed to a deduction

from gross income." Black's Law Dictionary 1689 (10th ed.
2014); Toney, supra; see also Gilligan v. Attorney General 413

Mass. 14, 17, 595 N.B. 24 288, 291 (1992) (holding that the
“proposed tax credits did not set aside monies in the treasury
and, thus, could not be viewed as an appropriation") .

Article XI, § 213, of the Alabama Constitution of 1901,
provides, in part, as follows:

"(1]t shall be unlawful from and after the adoption
of thie amendment for the state comptroller of the
state of Alabama to draw any warrant or other order
for the payment of money belonging to, or
administered by, the state of Alabama upon the state
treasurer, unless there is in the hand of such
treasurer money appropriated and available for the
full payment of the same. In case there is, at the
end of any fiscal year, insufficient money in the
state treasury for the payment of all proper claims
presented to the state comptroller for the issuance
of warrants, the comptroller shall issue warrants
for that proportion of each such claim which the
money available for the payment of all said claims

a9

 
1130987, 1131020, 1131022
bears to the whole, and such warrants for such
prorated sums shall thereupon be. paid by the state
treasurer. At the end of each fiscal year all unpaid
appropriations which exceed the amount of money in
the state treasury subject to the payment of the
same after the proration above provided for, shall
thereupon become null and void to the extent of such
excess."

Article IV, § 71, of the Alabama Constitution of 1901,

involving certain restrictions on the general appropriations

bill, relates only to legislative appropriations from the

State treasury. State v. Street, 117 Ala. 203, 23 So. 807

(1898). Additionally, "{n]o money shall be paid out by the

treasury except upon appropriations made by law, and on

warrant drawa by the proper officer in pursuance thereof."
art. IV, § 72, Ala. Const. 1901, “All appropriations are paid
out of revenue." Opinion of t1 78, 249 Ala.

389, 390, 31 So. 2d $58, 559 (1947) (addressing whether a

proposed bill had to originate in the House). Clearly, the

aforementioned provisions of the Alabama Constitution
expressly contemplate appropriations being directly related to
moneys in the State treasury because it is those public funds
that would ultimately. satisfy the particular designated
appropriation. Additionally, nothing in the plain text of §

73 defines an appropriation as relating to or including a tax

90

 

 
1130987, 1131020, 1131022
credit. Furthermore, nothing in § 73 can be read as
indicating that its drafters intended the term
"appropriations" to be construed in a manner to include tax
credits.

The State defendants also contend that the tax credits do

not violate § 73 because, they say, the State does not pay

public funds to individual non-state charitable or educational
institutions. Rather, they say, the refundable tax credits in

§ 16-6D-8 (formerly Section 8) are made to the parents of
students transferring from a failing public school.

tn Alabama Education Ass'n v. James, 373 So. 2d 1076
(ala. 1979), the Alabama Education Association ("the ABA") and
others challenged the constitutionality of the Alabama student
Grant Program. The Student Grant Program established a
student-assistance program that provided state-tuition grants
to eligible students seeking a postsecondary education. Unlike
the AAA, the student-grant program did not provide tax credits
to the students’ parents. Rather, the student-grant program
paid the tuition grants directly to postsecondary institutions
on behalf of the eligible students. The act establishing the

student-grant program, among other things, prohibited the use

on

 

 
1130987, 1131020, 1131022
of grants for sectarian purposes and prohibited the use of
money raised for the support of public schools to support
schools of a predominantly sectarian or denominational
character.

Nonetheless, the AFA and other plaintiffs sought
injunctive and declaratory relief, arguing that the act
violated, among other things, Art. XIV, § 263 of the Alabama
Constitution of 1901, which provides: "No money raised for the
eupport of the public schools shall be appropriated to or used
for the support of any sectarian or denominational school."
‘The plaintiffs in Jameg also alleged that the act failed to
receive the two-thirds vote of each house as required by § 73
for appropriations to charitable or educational institutions
not under the control of the state. Following a hearing, the
trial court entered an order, among other things, dismissing
the AFA as a plaintiff for lack of standing and declaring that
the act was constitutional on its face. Id.

on appeal, this Court concluded that the act did not
violate § 263 because (1) the act did not appropriate any

money;" and (2) the grants provided for by the act were "not

‘fhe act was funded through a separate appropriations
act.

92
1130987, 1131020, 1131021
yet of the indi x

fit of individual ate_edu
system." James, 373 So. 24 1081 (emphasis added). This Court
also concluded that the act did not violate § 73 in that a
two-thirds vote of each house was not required because the act
did not appropriate any moneys. Id.

‘The reasoning applied by this Court in disposing of the
§ 263 claim in James is likewise applicable to this case.
Article Iv, § 73, provides that “{n]o appropriation shall be
made to any charitable or educational institution not under
the absolute control of the state." The tax credits provided
by the AAA are even further removed from State involvement
than the grant program upheld against a constitutional
challenge in James, because, unlike the grant program at issue
in James, the State does not pay money directly to the
educational institution. Rather, in the case of the
refundable tax credit provided by § 16-6D-8, the tax credit is
paid to the parents of a child who transfers from a failing
public school to a nonfailing public school or nonpublic
school for the purpose of offsetting any expenses incurred by

the student's transfer. Thus, no money is set aside or

93

 
1130987, 1131020, 1131021
specified from the public revenue or treasury to be applied to
a charitable or educational institution. Toney, supra,
McAlpine, supra. We recognize that the tax credits provided by
16-6D-8 are paid out of sales-tax collections made to the ETF.
Nevertheless, the tax credits are paid to the parents of a
transferring student in order to offset the costs associated
with the student's transfer and are not "made to any
charitable or educational institution not under the absolute
control of the state." art. IV, § 73.

Likewise, in the case of the tax credit provided by § 16-
6D-9(a) (2) (formerly a part of Section 9) to individual
taxpayers for contributions made to scholarship-granting
organizations, no appropriations are made to any charitable or
educational institution. Rather, monetary contributions are
made to scholarship-granting organizations by the taxpayer;
those oxganizations, in turn, grant educational scholarships
based on certain prescribed criteria to students attending a
failing school so that those students may attend a nonfailing
public or nonpublic school. The individual taxpayer then may
claim a tax credit in an amount equal to the total

contribution made to the scholarship-granting organization.

94

 

 
1130987, 1131020, 1231022
again, no money is set aside or specified from the public
revenue or treasury to be applied to a charitable or
educational institution. Toney, supra, McAlpine, supra.
Thus, there is no appropriation made to charitable or
educational institution. The individual taxpayer simply

receives a tax credit

 

as that term has traditionally been
defined -- for monetary contributions made to a scholarship-
granting organization.

Other courts have rejected the "tax credit as a de facto
appropriation approach" argued by the plaintiffs and adopted
by the circuit court in this case. In Kotterman v, Killian,
193 Ariz. 273, 972 P. 24 606 (1999), the plaintiffs challenged
the constitutionality of an Arizona law that allowed a state
tax credit of up to $500 for those who chose to donate to
school-tuition organizations (similar to scholarship-granting
organizations) that, in turn, used the donated funds to offer
scholarships to students to attend nongovernmental primary or
secondary schools. The plaintiffs contended, among other
things, that the tax credit violated the Arizona state
constitution because it channeled public money to private and

sectarian schools. ‘The Arizona Supreme Court rejected this

95

 
1130987, 1131020, 1231021

argument, holding that the tax credit did not constitute an

appropriation:

"[W]o money ever enters the state's control as a
result of this tax credit. Nothing is deposited in
the state treasury or other accounts under the
management or possession of governmental agencies or
public officials. Thus, under any —_ common
understanding of the words, we are not here dealing
with 'public money. '*

 

Kotterman, 193 Ariz, at 285, 972 P.2d at 618. The court went
further and expressly rejected the rationale offered by the
plaintiffs in this case and relied upon by the circuit court,
d.e., that tax credits are public funds because, but for the
tax-credit provisions of the AAA, the State would have

collected and deposited the income-tax revenues into the State

treasury:

"Petitioners suggest, however, that because
taxpayer money could enter the treasury if it were
not excluded by way of the tax credit, the state
effectively controls and exerts quasi-ownership over
it. Thie expansive interpretation is fraught with
problems. Indeed, under such reasoning all taxpayer
income could be viewed as belonging to the state
because it 4s subject to taxation by the
legislature. That body has plenary power to set tax
rates, categorize taxable income, and determine the
type and amount of adjustments including deductions,
exemptions, and credits. ...

 

"We do not accept the proposition, implicit in

96
1130987, 1131020, 1131021

petitioners’ argument, that the tax return's purpose
is to return state money to taxpayers. For us to
agree that a tax credit constitutes public money
would requixe a finding that state ownership springs
into existence at the point where taxable income is
first determined, if not before. The tax on that
amount would then instantly become public money. We
believe that such a conclusion is both artificial
and premature. It is far more reasonable to say that
funds remain in the taxpayer's ownership at least
until final calculation of the amount actually owed
to the government, and upon which the state has a
legal claim,"

Kotterman, 193 Ariz. at 285, 972 P. 2d at 618 (footnote

omitted). See also Arizona Christian sch. Tuition Org. v,
Winn, __ v.s. 131 S. Ct 1436, 1447 (2011) (stating that

 

"{w]hen Arizona taxpayers choose to contribute to [student-
tuition organizations], they spend their own money, not money
the State has collected from ... taxpayers").

In Toney, supra, the plaintiffs brought a declaratory-
judgment action challenging the constitutionality of a law
that permitted an income-tax credit up to $500 against income-
tax liability equal to 25% of qualified education expenses
incurred by students attending K-12 at any public or private
school. ‘The plaintiffs argued, among other things, that the
credit reduced the state's annual revenue and had the

practical effect of being a legislative appropriation. The

97

 

 
1130987, 1131020, 1131021
trial court entered an order denying the plaintiffs‘ motion
for a sumazy judgment, holding: (1) that the money accruing
from the credit was not public money and (2) that the credit
id not provide support for sectarian schools, reasoning that
the money is not public until it belongs to the state and the
fact that a state allows individual taxpayers to keep more of
their own money does not make the money kept the state's
money.

In affirming the trial court's order denying the
plaintiffs! motion for a summary judgment, the Toney court
stated:

erhe trial court found that the Credit did not
violate the constitutional provisions cited by
plaintiffs because it does not constitute public
funds but merely allows people to keep more of their
own money. Plaintiffs argue that following the trial
court's reasoning would permit the State to do
indirectly through the Tax Code what it cannot do
directly. Plaintiffe insist that the effect of
reimbursing parents for private school tuition
expenses through the Credit is exactly the same as
reimbursing them through payments from the State
treasury. The cost of a tax benefit given to certain
taxpayers is necessarily borne by other taxpayers in
the form of higher taxes or reduced services; thus,
these taxpayers are compelled to support the
religious preferences of those who will be able to
claim the Credit.
1130987, 1131020, 1131022

".., Defendants and intervenors urge us to give
the terms ‘public fund' and 'appropriation' their
plain and ordinary meaning, as did the trial court.

"ipublic fund’ is defined in Black's Law
Dictionary as, ‘1. The revenue or money of a
governmental body. 2. The securities of the national
government or a state government.’ Black's Law
Dictionary 682 (7th ed. 1999). In contrast, ‘tax
credit! is defined as ‘[a]n amount subtracted
directly from one's total tax liability, dollar for
dollar, as opposed to a deduction ‘from gross
income .' Black's Law Dictionary 1473 (7th ed. 1999).

"plaintiffs direct us to no evidence
demonstrating that the framers of the Tllinois
Constitution intended the term ‘public fund’ to have
the broad, expansive meaning that plaintiffs would
give it. Giving the term such a meaning may have
broad implications for other tax credits,
deductions, and exemptions from taxation, such as
the property tax exemption for property used
exclusively for religious purposes (35 ILCS
200/15-40 (West 1998)) and the partial state income
tax exemption for religious organizations (35 ILCS
5/205(a) (West 1998)). We are unwilling to interpret
the term ‘public fund' so broadly as to endanger the
legislative scheme of taxation.

“similarly, the Credit does not constitute an
‘appropriation," as that term is commonly
understood. an’ appropriation involves '"the setting
apart from public revenue a certain sum of money for
a specific object."' American Federation of state,
County & Municipal Employees v. Netsch, 216 Til.
App. 34 566, 567, 159 Ill. Dec. 138, 575 N.E. 2d
945, 946 (1991), quoting Illinois Municipal

Retirement Fund v. City of Barry, 52 Tll. App. 34
644, 646, 10 Ill. Dec. 439, 367 N.E.2d 1048, 1049
(1977) . Accordingly, we reject plaintiffs’ argument
that a tax credit constitutes a public fund or an
appropriation of public money ....*

99

 
1130987, 1131020, 1131021

Toney, 318 11. App. 3d at 1198-1200, 744 N.B. 2d at 357-358,
253 Til. Dec. at 75-76.

In Griffith v, Bower, 319 I11. App. 34 993, 747 N.E.2d
423, 254 11. Dec. 383 (2001), the plaintiffs brought a
subsequent challenge to the Illinois income-tax credit,
alleging that the tax credit had the effect of giving aid to
children in religious schools that is not likewise given to
children in public schools in violation of the Tilinois
constitution. As part of their argument, the plaintiffs
contended that a tax credit was an expenditure; therefore,
they asserted, the support of religious education through tax
credits is an appropriation or payment of public funds for
sectarian purposes. The trial court dismissed the plaintiffs’
action.

on appeal, the Illinois appellate court, as it did in
Toney, supra, fejected the plaintiffs’ argument that the tax
credit was in the nature of an appropriation stating:

“the credit at issue here does not involve any

appropriation or use of public funds. See Toney, 318

T1l, App. 34 at 1200, 253 Ill. Dec. 69, 744 N.B.2d

351. No money ever enters the state's control as a

result of this tax credit. Rather, the Act allows

Illinois parents to keep more of their own money to

spend on the education of their children as they see

fit and thereby seeks to assist those parents in
meeting the rising costs of educating their

200

 
1130987, 1131020, 1131022
children."

Griffith, 319 T11. App. 34 at 995-996, 747 N.B. 2d at 426, 254

TL. Dec. at 386.

Based on the foregoing, we conclude that the circuit
court's construction of the term "appropriation" to include
the tax credits provided by AAA is contrary to the Alabama
constitution, existing caselaw, and the commonly accepted
definition of the term appropriation.

VII. Whether the tax-credit provisions of the AAA violate
Art, XI, § 211,02, of the Alabama Constitution?

The plaintiffe alleged in Count VII of their complain=
that the tax credit provided by § 16-6D-9 (formerly Section 9)
of the AAA violates Art. XI, § 211.02(B) (2), of the Alabama
Constitution of 1901 (Off. Recomp.), which provides, in part,
that fall net proceeds" of the state income tax, after
deducting certain amounts for purposes described in §
211,02(B) (1), "shall be placed in the state treasury to the
credit of the Alabama special education trust fund to be used
for the payment of public school teachers salaries only." The
plaintiffs asserted in Count VII that by providing an income-
tax credit to reimburse 100% of the amount contributed by a

taxpayer to a scholarship-granting organization, § 16-6D-9

201,

 

 
1130987, 1131020, 1131021
redirects income-tax revenue that would otherwise be deposited
into the ETF, Therefore, the plaintiffs alleged that § 16-6D-
9 violated § 211.02(8) (2) of the Alabama Constitution of 1901,
by permitting income-tax revenue that would otherwise be
deposited into the ETF to be used for a purpose other than the
payment of public-school-teacher salaries.

In determining that § 16-6D-9 of the AAA violated §
211.02(B) (2), the circuit court stated:

"In this instance, Section 9 of the AAA uses
funds that otherwise would have been deposited into
the ETF -- up to $25 million each year -- for a
purpose other than the payment of public school
teachers’ salaries. Instead, these funds go to pay
for the education of certain schoolchildren in
nonpublic schools -- contrary to the intent and
purpose of [§ 211.02(B) (2)]. For reasons discussed
above in connection with Section 73, the contention
that the funds going to scholarship-granting
organizations under Section 9 are private
contributions rather than income tax revenue ignores
the real substance of the matter, and if accepted
would allow the legislature to circumvent the
constitutional restrictions by doing indirectly what
it is clearly prohibited from doing directly."

 

The state defendants argue that the AAA tax credits do
not use income-tax proceeds for purposes other than the
payment of public-school-teacher salaries. specifically, the
State defendants contend that, although the tax credits

provided by § 16-6D-9 do reduce the amount of revenue entering

102

 

 
2130967, 1131020, 1131021
the State treasury, they do not constitute "net proceeds” and
in no way redirect any revenue already held in the state
treasury to any purpose other than paying public-school-
teacher salaries. we agree.

The phrase "all net proceeds" of the state income tax is
not defined in § 211.02. "Gross Proceeds" has been defined as
"'(eIhe entire proceeds[;] [t]he proceeds of a sale or of a
collection without deduction for cost, commissions, or any
other expenses whatsoever. '* Lee v, BSP Greenwich Mortg, Ltd.
Pighip, 267 7.34 172, 179 (2d Cir. 2001) (quoting Ballentine's
law Dictionary 537 (34 ed. 1969)). ‘This Court has defined
‘net proceeds" as *'[g]zoss proceeds, less charges which may

be rightly deducted. '" opinion of the Justices No. 385, 69 So.

3d 847, 856 (Ala. 2011) (quoting Black's Law Dictionary 1042
(6th ed. 1990)). In Qpinion of the Justices No, 385, this

court considered whether a Senate bill, which, as part of an
econonic-developnent plan, allowed certain qualified employers
to retain a percentage of state income taxes withheld from
the pay of eligible employees, violated § 211.02 of the
‘Alabama Constitution, In determining that the Senate bill aid

violate § 211.02, this Court stated:

103

 
1130987, 1131020, 1131021

"(T]he legislature may not prevent any amounts that
are withheld from employees’ paychecks pursuant to
state-income-tax laws from becoming state-income-tax
proceeds to be deposited into the appropriate funds
simply by allowing an approved entity to retain
those amounts once collected, rather than turning
them over to the State. As soon as an employer
a a oyent
heck. ‘withheld 2
of the state income tax. ... {We are clear to the
conclusion that any attempt to bypass the provisions
of § 211.02 by allowing an approved entity to retain
a portion of the state income taxes withheld from
employees would amount to an unconstitutional
diversion of some net proceeds of the state income
tax because, even allowing for any otherwise
appropriate deductions from the state income taxes
withheld, at a minimum, some portion of the
percentage of such state income taxes that would be
retained by an approved entity would constitute net
proceeds of the state income tax."

69 So. 3d at 858. Central to this Court's conclusion that the
Senate bill at issue in Opinion of the Justices No, 385
violated § 211.02 was the fact that the Senate bill
contemplated an income tax actually being collected by the
State through the employer acting as the agent" for the state.
once the state income tax was withheld from the employee's
paycheck by the employer it became "gross proceeds" of the
State, subject to lawful deductions and disposition as
“ngvery employer xequired to deduct and withhold tax
under Section 40-18-71 shall for each quarterly period
file a return and pay to the Department of Revenue the tax
xequired to be withheld." § 40-18-74(a), Ala. Code 1975.

os
1130987, 1131020, 1131021
mandated by § 211.02, Thus, any diversion of the resulting
‘net proceeds" in a manner not dictated by § 211.02 was
unconstitutional. Id. Here, the State never actually
collects income tax from the taxpayer, i.e., "gross proceeds"
pursuant to the tax credit provided in § 16-6D-9. Because
there are no "gross proceeds" actually collected, there can be
no ‘net proceeds" produced that are being appropriated for
purposes other than the payment of public-school-teacher
salaries. The tax credit provided by § 16-sD-9 merely allows
the taxpayers to retain more of their earned income as an
incentive to contributing to _scholarship-granting
organizations. When the taxpayers contribute to scholarship-
granting organizations, they spend their own money and not
public revenue actually collected by the state. see Arizona
v.s: at __, 131 8.

Christian sch, Tuition org. v. Winn,

 

 

Ct. at 1447 (holding that tax credits allow taxpayers to spend
theix ow money and not money the state has collected from
other taxpayers) .

Based on the foregoing, we conclude that the tax credit
provided by § 16-6D-9 does not violate § 211.02 of the Alabama

Constitution of 1902.

105

 
1130987, 1131020, 1131021

- we: f_the
Art, XI, § 213, of the Alabama Constitution?

The plaintiffs, in Count VITI of their complaint, alleged
that the refundable tax credit provided by section 8 was
unconstitutional because, they say, it violates § 213, which
provides, in part, that "[a]ny act creating or incurring any
new debt against the state, except as herein provided, shall
be absolutely void." specifically, the plaintiffs alleged
that § 16-6D-8 of the AAA "creates a new obligation that binds
the state annually to make payments to taxpayers, whether in
the form of refunds, rebates, or credits to help fund the cost
of sending children to a nonfailing public school or [al
nonpublic school." The plaintiffs further alleged that the
AAA pledges funds from existing revenue streams to satisfy
this new obligation of the state without placing a limit on
the total amount of money the State would be obligated to pay
the taxpayers each year.
In determining that the refundable tax credit provided by
Section @ of the AAA violated § 213, the circuit court stated:
"the Constitution provides, with limited
exceptions not applicable here, that ‘no new debt
shall be created against, or incurred by the state,'
and that ‘any act creating or incurring any new debt

against the state ... shall be absolutely void.

10s

 
1130987, 1131020, 1131021

Ala. Const. Art. XI, § 213 (as amended by Amendment
26). Section 213 ‘prevents the legislature from
enacting laws that would deplete the funds available
and necessary to meet the state's current
obligations in future years.’ Opinion of the
Justices No. 359, 692 So, 24 825, 826-27 (Ala.
1997) .

 

"Legislation creates a debt when an ‘obligation
is imposed on the state to pay money.’ Ala.
Alcoholic Beverage Control Bd. v, City of Pelham,
255 So. 24 1070, 1081 (Ala. 2003) (quoting Opinion of
the Justices No, 346, 665 So, 2d 1357, 1361 (Ala.
1995)). The AAA imposes obligations on the State to
pay in the form of tax refunds to parents who claim
the Section 8 refundable tax credit. Section 8 is |
written in mandatory terms and requires the State to

make payments to as many taxpayers as are entitled
to claim the tax credit in whatever amounts they are
entitled to. See Ala. Code §§ 16-6D-9(a) (2), 16-6D-
2(c). The AAA thus expressly imposes an obligation
on the State to pay money, and therefore creates a
new debt of the state within the meaning of Section
213. See Opinion of the Justices No. 88, 36 So. 24
475, 479 (Ala, 1948) (finding _ unconstitutional
legislation that would ‘bind the state ... to pay
money for a period of thirty years’).

 

 

‘While the State is free to create continuing
financial obligations otherwise within its
constitutional authority, ‘[iJn order to escape
being a new debt of the State, there must be a new
source of revenue provided to retire the debt.

Opinion of the Justices No. 359, 692 So. 24 at 627
(finding invalid legislation that appropriated
proceeds of existing tax on cellular radio
telecommunications to pay for new obligations).
Thus, '{n]o part of the taxes presently paid into
the general fund of the State will or can be used!
to satisfy the new obligations created by the
legislation. Edmonson v, State Indus. Dev. Auth.
lea So, 24 115, 117 (Ala, 1966). Tt is undisputed

107

 
1130987, 1131020, 1131021

that the AAA does not contain any new source of
revenue to finance the new obligations created by
Section 8. Rather, it diverts funds from an existing
revenue source to pay those obligations. See Ala.
Code § 16~6D-8(a) (2) (‘Income tax credits authorized
by this section shall be paid out of the sales tax
collections made to the Education Trust Fund.').
Because the AAA imposes new financial obligations on
the State without a corresponding new source of
revenue to pay those obligations, it creates a new
debt in violation of section 213."

‘The State defendants argue that Section 8 of the AAA does
not create a "debt" as contemplated by § 213. We agree.
Section 16-6D-8(a) (1) provides, in part:

“The income tax credit shall be an amount equal to
80 percent of the average annual state cost of
attendance for a public K-12 student during the
applicable tax year or the actual cost of attending
a nonfailing public school or nonpublic school,
whichever is less. ... If income taxes owed by such
a parent are less than the total credit allowed
under this subsection, the taxpayer shall be
entitled to a refund or rebate, as the case may be,
equal to the balance of the unused credit with
respect to that taxable year."

Section 16-6D-8(c) provides, in part, that

"(t]he Commissioner of Revenue shall certify to the
Comptroller the amount of income tax credits due to
parents under this section and the Comptroller shall
transfer into the Failing Schools Income Tax Credit
Account only the amount from sales tax revenues
within the Education Trust Fund that is sufficient
for the Department of Revenue to use to cover the
income tax credits for the applicable tax year."

Initially, we note that any tax credits the state is

108

 
1130987, 1131020, 1131022
obligated to refund pursuant to § 16-6D-8 will be refunded
solely on the basis of an annual determination. Alabama
Alcoholic Beverage Control Bd, v. City of Pelham, 855 So. 2d
1070 (Ala. 2003) (holding that no "debt" existed under § 213
because any amount paid by the State would be paid solely on
the basis of an annual determination). To the extent that the
refundable tax credits can be construed as creating a new
obligation of the state, they are constitutionally permissible
because they are credited by the express language of § 16-6D-8
against the current State sales-tax revenue for the applicable
tax year. See Opinion of the Justices No. 88, 251 Ala. 91, 36
So. 24 475 (1948); Hall vy. Blan, 227 Ala. 64, 148 So. 601
(2933), Specifically, § 16-6D-8(c) requires the revenue
commissioner to certify to the State comptroller “only the
amount from sales tax revenues ... that is sufficient for the
Department of Revenue to use to cover the income tax credits
for the applicable tax year." Thus, the refund provision of
§ 16-6D-8 "‘neither makes nor contemplates an obligation of
the State further than such as is "within the revenues levied
and assessed, and in process of collection" for the current

year or such as may have been already collected for that year.

109

 
1130987, 1131020, 1131021

In_xre Opinions of i , 251 Ala, 91, 36 So. 24

475 [(194e)]; Brown v, Gay-Padgett, 188 Ala. 423, 66 So. 161

[(1924)]; In ze Opinions of Justices [No, 581, 238 Ala. 293,
191 So. a2 [(1939)].1" ic Beves

Bd., @55 So. 2d at 1081 (quoting Opinion of the Justices No.
109, 252 Ala. 465, 467, 41 So. 2d 761, 763 (1949)). Because
any refunds due parents pursuant to § 16-6D-8 are determined
on a yearly basis and paid only from that amount of sales-tax
revenue necessary to cover the income-tax credits for that tax
year, no new debt is created within the meaning of § 213.
Second, a debt within the meaning of § 213 does not
include obligations of the State that are contingent in
nature. See Opinion of the Justices No. 381, 892 So. 2d 375,
278 (Ala. 2004) (holding that "Section 213 of the Alabama
Constitution, as amended by Amend. No. 26, is directed toward
preventing the creation of an obligation that must be paid 'in
any_event.'" and that because the interest-rate swap agreenents
at issue were contingent in nature, there was no "new debt"
created as that phrase is defined in § 213). Here, the refund
available under § 16-6D-8(a) (1) comes into play only "if [the]

income taxes owed by a parent are less than the total

 

110

 

 

 
1130987, 1131020, 1131022
credit allowed" under § 16-6D-8(a) (1). Thus, whether a parent
is entitled to a refundable tax credit is contingent upon
whether that parent's tax liability is less than the total
credit allowed for that taxable year. Even the amount of the
tax credit itself is contingent, because it is based upon the
“average annual state cost of attendance for a public K-12
student during the applicable tax year or the actual cost of
attending a nonfailing public school or nonpublic school,
whichever is less." § 16-6D-8(a){1). Accordingly, because
the tax credit provided by § 16-6D-8 is contingent in nature,
there is no new debt created within the meaning of § 213.
Separation of Church and state

We now turn to the issue whether the circuit court should
have addressed the plaintiffs! constitutional challenges to
the AAA on religious grounds. As previously stated, the
plaintiffs did not move for a judgment on the pleadings with
respect to Counts IX and X (alleging that the AAA violates §
263 and § 3, respectively, of the Alabama Constitution) of
their complaint because they contended that factual
development would be necessary for a resolution of those

claims. Counts IX and X were therefore before the circuit

aun

 
1130987, 1131020, 1131021
court only on the State defendants’ motion to dismiss the
entire complaint pursuant to Rule 12(b) (6), Ala. R. Civ. P.,
and the tax-credit parents’ motion for a judgment on the
pleadings pursuant to Rule 12(c), Ala. R. Civ. P. Because the
circuit court ruled that the AAA was unconstitutional for
other reasons, it did not address whether Counts IX and X of
the complaint stated claims upon which relief could be granted
and it denied the State defendants! and the tax-credit
parents! motions as moot. Because this Court has now
concluded that the AAA is not unconstitutional on the grounds
alleged in Counts I through VIII, we will, for purposes of
judicial efficiency, address whether Counts IX and X should
also be dismissed, especially since resolution of these
claims are inextricable intertwined with the plaintiffs’ § 73
claims. see Lloyd Noland Found. Inc. v. City of Fairfield
Healthcare Auth., 837 So. 2d 253, 263 (Ala. 2002) ("[A]
pretrial final judgment disposing of all claims in the case
(as distinguished from a Rule 54(b)[, Ala. R. Civ. P./]
summary judgment disposing of fewer than all claims) entitles
[the appellant], for purposes of our review, to raise issues

based upon the trial court's adverse rulings, including the

112
1130987, 1131020, 1131021

denial of its summary-judgment motions. See Ala. R. App. P.

ata) (a).

 

Standard of Review

in Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993),
this Court stated the following standard for reviewing a Rule
12(b) (6), Ala. R. Civ. P., motion to dismiss:

“The appropriate standard of review under Rule
12(b) (6) is whether, when the allegations of the
complaint are viewed most strongly in the pleader's
favor, it appears that the pleader could prove any
set of circumstances that would entitle her to
relief. ... Inmaking this determination, this Court
does fot’ consider whether the plaintiff will
ultimately prevail, but only whether she may
possibly prevail. ... We note that a Rule 12(b) (6)
dismissal is proper only when it appears beyond
doubt that the plaintiff can prove no set of facts
in support of the claim that would entitle the
plaintiff to relies."

 

For the reasons discussed below, we conclude that Counts Ix
and X of the plaintiffs’ complaint are due to be dismissed
insofar as the plaintiffs will be unable to prove any set of
facts that would entitle them to relief under Rule 12(b) (6).
Because of this holding, there is no need to address the tax-
credit parents’ motion for a judgment on the pleadings. cf.

ntiue v, state Fai Ins, Co,, 915 So. 24 557

(Ala. 2005) (discussing the similarities and differences

13

 

 
1130987, 1131020, 1131021
between Rule 12(b) (6) and Rule 12(c)).
Discussion

IX, Wh XIV, he Alab:
Constitution?

Article XIV, § 263, of the Alabama Constitution of 1901
provides that "[n]o money raised for the support of the public
schools shall be appropriated to or used for the support of
any sectarian or denominational school." The plaintiffs
allege in Count IX of their complaint that the tax credit
provided by Section 8 of the AAA, which authorizes a
refundable State income-tax credit for parents who transfer
their children from a failing public school to another
nonfailing public or nonpublic school of the parents! choice,
violates § 263 because, they say, the tax credit diverts money
from the ETF raised for the support of the public schools and
appropriates that money to the support of xeligious schools.
‘The plaintiffs further allege that as of August 23, 2013, 53
of the 56 nonpublic schools for which the Section @ tax credit
could be used were religious schools and that the AAA places
no restrictions on the use of the funds to those religious
schools. For the same reasoning previously employed in

holding that nothing in the plain text of Art. IV, § 73,

a4

 

 

 
3130987, 1231020, 1131022
defines an appropriation as relating to or including a tax
credit, we also hold that nothing in the plain text of Art.
XIV, § 263, defines an appropriation as relating to or
including a tax credit, Additionally, we point out that the
present jurisprudential trend by the United states Supreme
Court regarding indirect government aid to pervasively
sectarian schools demonstrates that an indirect-governnent-aid
program is not subject to constitutional challenge where the
program is neutral with respect to religion and the ultimate
decision to confer the aid rests with a private individual as
opposed to the government. The most instructive case in this
sense is Zelman _v. Simmons-Harrig, 536 U.S. 639 (2002), in
which a group of Ohio taxpayers brought an action challenging
the voucher portion of the Ohio Pilot Scholarship Program on
the ground that the voucher portion had the primary effect of
advancing religion in violation of the Establishment Clause.
The Supreme Court held that the program did not violate the
Establishment Clause because the program was neutral with
respect to religion and the governmental assistance flowed to
religious schools only through the private choice of the
students’ parents:

ais

 
1130987, 1131020, 1131021

"There is no dispute that the program challenged
here was enacted for the valid secular purpose of
providing educational assistance to poor children in |
a demonstrably failing public school system. Thus,

the question presented is whether the Ohio program
nonetheless has the forbidden 'effect' of advancing |
or inhibiting religion.

"To answer that question, our decisions have i
drawn a consistent distinction between government
programs that provide aid directly to religious

schools, Mitchell v, Helms, 530 U.S. 793, 810-814
(2000) (plurality opinion); id., at | 841-844

(O'CONNOR, J., concurring in judgment); Agostini [v. t
Felton, 521° U.S. 203] at 225-227 [(2997)];
Rosenberger v, Rector and Visitors of Univ. of Va., |
515 U.S. @19, 842 (1995) (collecting cases), and |
programs of true private choice, in which government |
aid reaches religious schools only as a result of |
the genuine and independent choices of private
individuals, Mueller v, Allen, 463 U.S. 368 (1983);

v. Washington Dept. o: ind, 474
U.S. 481 (1986); Zobrestv, Catalina Foothills

School Dist., 509 U.S. 1 (1993). While our
jurisprudence with respect to the constitutionality

of direct aid programs has ‘changed significantly!

over the past two decades, Agostini, supra, at 236,

our jurisprudence with respect to true private

choice programs has remained consistent and

unbroken. Three times we have confronted |
Establishment Clause challenges to neutral

government programs that provide aid directly to a
broad class of individuals, who, in turn, direct the
aid to religious schools or institutions of their
own choosing. Three times we have rejected such
challenges.

 

"In Mueller, we rejected an Establishment Clause
challenge to a Minnesota program authorizing tax
deductions for various educational expenses, |
including private school tuition costs, even though
the great majority of the program's beneficiaries

16
1130987, 1131020, 1132021

(968) were parents of children in religious schools.
We began by focusing on the class of beneficiaries,
finding that because the class included ‘all
parents,’ including parents with ‘children [whol
attend nonsectarian private schools or sectarian
private schools,’ 463 U.S., at 397 (emphasis in
original), the program was ‘not readily subject to
challenge’ under the Establishment Clause,’ id., at
399 (citing Widmar v, Vincent, 454 U.S. 263, 274
(1981) ('The provision of benefits to so broad a
spectrum of groups is an important index of secular
effect')). Then, viewing the program as a whole, we
emphasized the principle of private choice, noting
that public funds were made available to religious
schools ‘only as a result of numerous, private
choices of individual parents of school-age
children.’ 463 U.S., at 399-400. This, we said,
ensured that ‘no "imprimatur of state approval" can
be deemed to have been conferred on any particular
religion, or on religion generally.’ Id., at 399
(quoting’ Widnax, supra, at 274). We thus found it
irrelevant to the constitutional inquiry that the
vast majority of beneficiaries were parents of
children in religious schools, saying:

 

"'We would be loath to adopt a rule
grounding the constitutionality of a
facially neutral law on annual reports
reciting the extent to which various
classes of private citizens claimed
benefits under the law.' 463 U.S., at 401.

“That the program was one of true private
choice, with no evidence that the State deliberately
skewed incentives toward religious schools, was
sufficient for the program to survive scrutiny under
the Establishment Clause.

"In Witters, we used identical reasoning to
reject an Establishment Clause challenge to a
vocational scholarship program that provided tuition
aid to a student studying at a religious institution

a7

 
1130987, 1131020, 1131021

to become a pastor. Looking at the program as a
whole, we observed that ‘[alny aid ... that
ultimately flows to religious institutions does so
only as a result of the genuinely independent and
private choices of aid recipients.' 474 U.S., at
497. We further remarked that, as in Mueller, ' [the]
program is made available generally without regard
to the sectarian-nonsectarian, or public-nonpublic
nature of the institution benefitted.’ 474 U.S., at
487 (internal quotation marks omitted). In light of
these factors, we held that the program was not
inconsistent with the Establishment Clause. Id., at
498-429.

 

“Five Members of the Court, in separate
opinions, emphasized the general rule from Mueller
that the amount of government aid channeled to
religious institutions by individual aid recipients
was not relevant to the constitutional inguiry. 474
U.S., at 490-491 (Powell, J., joined by Burger,
C.J., and REHNQUIST, J., concurring) (citing
Mueller, supra, at 398-399); 474 U.S., at 493
(O'CONNOR, J., Concurring in part and concurring in
judgment); id., at 490 (White, J., concurring). Our
holding thus rested not on whether few or many
recipients chose to expend government aid at a
religious school but, rather, on whether recipients
generally were empowered to direct the aid to
schools or institutions of their own choosing.

"Finally, in Zobrest, we applied Mueller and
Witters to reject an Establishment Clause challenge
to a federal program that permitted sign-language
interpreters to assist deaf children enrolled in
religious schools. Reviewing our earlier decisions,
we stated that ‘government programs that neutrally
provide benefits to a broad class of citizens
defined without reference to religion are not
readily subject to an Establishment Clause
challenge.' 509 U.S., at 8. Looking once again to
the challenged program as a whole, we observed that
the program ‘distributes benefits neutrally to any

 

118

 

 
1130987, 1131020, 1231021

child qualifying as "disabled." Id., at 10. Its
"primary beneficiaries,’ we said, were ‘disabled
children, not sectarian schools.' Id., at 12.

"We further observed that ' [bly according
parents freedom to select a school of their choice,
the statute ensures that a governnent-paid
interpreter will be present in a sectarian school
only as a result of the private decision of
individual parents.' Id., at 10. Our focus again was
on neutrality and the principle of private choice,
not on the nunber of progran beneficiaries attending
religious schools. Id., at 10-11. See, e.g
Agostini, 521 U.S., at 229 (*Zobrest did not turn on
the fact that James Zobrest had, at the time of
litigation, been the only child using a publicly
funded sign-language interpreter to attend a
parochial school’). Because the program ensured that
parents were the ones to select a religious school
as the best learning environment for their
handicapped child, the circuit between government
and religion was broken, and the Establishment
Clause was not implicated.

 

"Mueller, Witters, and Zobrest thus make clear
that where a government aid program is neutral with
respect to religion, and provides assistance
directly to a broad class of citizens who, in turn,
direct government aid to religious schools wholly as
a result of their own genuine and independent
private choice, the program is not readily subject
to challenge under the Establishment Clause. A
program that shares these features permits
government aid to reach religious institutions only
by way of the deliberate choices of numerous
individual recipients. The incidental advancement of
a religious mission, or the perceived endorsement of
a religious message, is reasonably attributable to
the individual recipient, not to the government,
whose role ends with the disbursement of benefits.
As a plurality of this Court recently observed:

as

 
1130987, 1131020, 1131021

"'{I]£ numerous private choices, rather
than the single choice of a government,
determine the distribution of aid, pursuant
to neutral eligibility criteria, then a
government cannot, or at least cannot
easily, grant special favors that might
lead ‘to a religious establishment.’
Mitchell, 530 U.S., at 810.

"See also ig., at 243 (O'CONNOR, J., concurring
in judgment) ('{iJhen government ‘aid’ supports a
school's religious mission only because of
independent decisions made by numerous individuals
to guide their secular aid to that school, "no
reasonable observer is likely to draw from the facts

‘an inference that the state itself is endorsing
a religious practice or belief"’ (quoting Hitters,
474 U.8., at 493 (O'CONNOR, J., concurring in part
and concurring in judgment))). It is precisely for
these reasons that we have never found a program of
true private choice to offend the Batablishnent
Clause.

 

 

 

"We believe that the program challenged here is
a program of true private choice, consistent with
Mueller, Witters, and © Zobrest, and thus
constitutional. As was true in those cases, the Ohio
program is neutral in all respects toward religion.
it is part of a general and multifaceted undertaking
by the State of Ohio to provide educational
opportunities to the children of a failed school
district. It confers educational assistance directly
to a broad class of individuals defined without

reference to religion, i.e., any parent of a
school-age child who resides in the Cleveland City
School District. The program permits the

participation of all schools within the district,
religious or nonreligious. Adjacent public schools
also may participate and have a financial incentive
to do so. Program benefits are available to
participating families on neutral terms, with no
reference to religion. The only preference stated

120

 
1230987, 1131020, 1131021
anywhere in the program is a preference for
low-income families, who receive greater assistance
and are given priority for admission at
participating schools."

536 U.S, at 649-53. See also Locke v. Davey, 540 U.S. 712,

719 (2004) (" [T]he link between government funds and religious

training is broken by the independent and private choice of

 

recipients").

‘The reasoning applied in Zelman is applicable in this
case. To start, the AAA as a whole has a secular purpose,
ineofar as it aimed at improving public education by injecting
additional accountability into the education system, as well
as ensuring educational opportunities for children in failing
public schools, The purpose of the Section 8 tax credit is to
provide financial aid or assistance in the form of a
refundable State income-tax credit to parents who choose to
xemove their child froma failing public school to offset the
expenses incurred by transferring the child. Thus, the

Section @ tax-credit provision was designed for the benefit of

parents and students, and not for the benefit of religious
schools. The Section 8 tax-credit provision is neutral

insofar as the credit is extended to a class of parents who

have children in failing public schools and is extended

aaa

 
1130987, 1131020, 1131021
without reference to religion. Moreover, the parents of
children in a failing public school have the freedon to
transfer the students to a school of their own private choice,
i.e., another nonfailing public school or nonpublic school,
either religious or nonreligious. For these reasons, the AAA
as a whole ensures that any aid that may ultimately flow to a
religious school as a result of the tax credit will do so only
as a result of the private decision of individual parents
vather than flowing directly from the State. There is simply
no evidence that the State, in authorizing the Section 8 tax
credit, has deliberately skewed incentives toward religious
schools. As emphasized in Zelman, “(t]he incidental
advancement of a religious mission, or the perceived
endorsement of a religious message, is reasonably attributable
to the individual recipient, not to the government, whose role
ends with the disbursement of benefits." 536 U.S. at 652

Because the Section 8 tax-credit provision is both neutral as
to religion and is based on true private choice, the provision
survives scrutiny under § 263, and the plaintiffs therefore
will be unable to prove any set of facts that would entitle

them to relief. Rule 12(b) (6), Ala. R. Civ. P.

122
1130987, 1131020, 1131021

The plaintiffs also allege in Count Ix of their complaint
that the tax credit provided in Section 9 of the AAA, which
authorizes a tax credit for individuals and corporations who
donate to scholarship-granting organizations violates § 263 of
the Alabama Constitution because, they say, the tax credit
diverts money from the ETF, which supports the public schools,
and appropriates and uses that money to support religious
schools. Again, as previously held, the Section 9 tax credit
to a parent or a corporation under the AAA cannot be construed
as an "appropriation" to a religious school; there is simply
no money being set aside or specified from the public revenue
or treasury to be applied to a religious school. Toney,
supra, McAlpine, supra. A good analysis involving similar
facts can be gathered from Arizona Christian School Tuition
Organization v. Winn, supra, a case in which a group of
taxpayers challenged an Arizona statute that provided dollar-
for-dollar tax credits for private contributions to Student
Tuition Organizations ("sT0s"), which, in turn, distributed
the scholarships to students attending private schools, many
of which were religious. ‘The taxpayers alleged that the

Arizona statute violated the Establishment Clause because the

123

 
1130987, 1131020, 1131021

statute "allowled] ST0s ‘to use State income-tax revenues to
pay tuition for students at religious schools,’ some of which
‘discriminate on the basis of religion in selecting
students.‘" __ U.S, at __, 131 S.Ct. at 1441. The taxpayers
viewed the tax credit as a government expenditure. In reaching
the threshold decision that the taxpayers lacked standing to
pursue their action, the United States Supreme Court
incorporated into its reasoning the following analysis and
distinction between governmental expenditures and tax credits:

"The distinction between governmental
expenditures and tax credits refutes respondents’
assertion of standing. When Arizona taxpayers choose
to contribute to ST0s, they spend their own money,
not money the State has collected from respondents
or from other taxpayers. Arizona's § 43-1089 does
not ‘extrac{t] and spen(d]' a conscientious
dissenter's funds in service of an establishment,
Flast_Iv. Cohen], 392 U.S. [83], at 106, 88 S. Ct.
1942 [(1968)], or '"force a citizen to contribute
three pence only of his property"' to a sectarian
organization, id., at 103, 88 S. Ct. 1942 (quoting
2 Writings of James Madison, supra, at 186 [(G. Hunt
ed, 1901)]. On the contrary, respondents and other
Arizona taxpayers remain free to pay their own tax
bills, without contributing to an STO. Respondents
are likewise able to contribute to an STO of their
choice, either religious or secular. And respondents
also have the option of contributing to other
charitable organizations, in which case respondents
may become eligible for a tax deduction or a
different tax credit. ...

"... When the government collects and spends

124

 
1130987, 1131020, 1132021

taxpayer money, governmental choices are responsible
for the transfer of wealth. ... Here, by contrast,
contributions result from the decisions of private
taxpayers regarding their own funds. Private
citizens create private ST0s; ST0s choose
beneficiary schools; and taxpayers then contribute
to STOs. While the State, at the outset, affords the
opportunity to create and contribute to an STO, the
tax credit system is implemented by private action
and with no state intervention.

"... Like contributions that lead to charitable
tax deductions, contributions yielding STO tax
credits are not ‘owed to the State and, in fact, pass
directly from taxpayers to private organizations
Respondents! contrary position assumes that income
should be treated as if it were government property
even if it has not come into the tax collector's
hands. That premise finds no basis in standing
jurisprudence. Private bank accounts cannot be
equated with the Arizona State Treasury."

 

 

Arizona Christian, U.S. at 131 8. Ct. at 1447-48.

 

ikewise in thie case, a tax credit cannot be equated to
@ government expenditure. When Alabama taxpayers and
corporations contribute to scholarship-grant ing organizations,
they do so by virtue of their own private funds, not funds
that the State has collected from other taxpayers. As noted
in Arizona Christian, "contributions yielding [scholarship-
granting organization] tax credits are not owed to the state

and, in fact, pass directly from taxpayers to private

 

organizations." __ U.S. at __, 131 8.Ct. at 1448. "While the

 

125

 
1130987, 1131020, 1131021
State, at the outset, affords the opportunity to create and
contribute to [a scholarship-granting organization], the tax
credit system is implemented by private action and with no
state intervention." ___ U.S. at __, 131 S.ct. at 1448.
Moreover, the Section 9 tax-credit provision in this case
offers genuine and independent choices to taxpayers and
corporations insofar as they are free to contribute to
scholarship-granting organizations of their own private
choice. Because we hold that the Section 9 tax credit also
survives scrutiny under § 263, the plaintiffs will be unable
to prove any set of facts that would entitle them to relief.
Accordingly, Count IX of the plaintiffs! complaint is due to
be dismissed. Rule 12(b) (6), Ala. R. Civ. PB.

X.Whether the AAA violates Art. I, § 3, of the Alabama
Constitution?

Article I, § 3, of the Alabama Constitution of 1901
provides:

“that no religion shall be established by law;
that no preference shall be given by law to any
religious sect, society, denomination, or mode of
worship; that_no_one_shall_be compelled by Law to
attend any pl. in
faxes, or other Zate for building or repalting any
place of worship, or for maintaining any minister or
ministry; that no religious test shall be required
as a qualification to any office or public trust

 

 

126

 

 

 
1130987, 1131020, 1131022
under this state; and that the civil rights,
privileges, and capacities of any citizen shall not
be in any manner affected by his religious
principles."

(Bmphasis added.)

The plaintiffs allege in Count X of their complaint that
the Section 8 and Section 9 tax-credit provisions of the AAA
violate Article § 3 of the Alabama Constitution because, they
say, taxpayer funds are diverted to religious schools through
tax credits and taxpayers are therefore compelled, through
their tax payments, to pay for the building and repair of
places of worship and for maintaining ministers and
ministries. This argument is basically a rehash of the
previous arguments that both tax-credit provisions are
violative of §§ 73 and 263 of the Alabama Constitution. our
previous holdings that the tax-credit provisions of the AAA
pass constitutional scrutiny under §§ 73 and 263 compel the
same conclusion with respect to the plaintiffs’ § 3 claim with
the necessity of little, if any, additional analysis.

Section 3 of the Alabama Constitution is the counterpart
of the religion clauses of the First Amendment to the United
States Constitution. It is well settled that the

Establishment Clause prevents a State from enacting laws that

127

 
1230987, 1131020, 1131021
have the purpose or effect of advancing or inhibiting
religion. In Locke, supra, the Supreme Court stated:

“The Religion Clauses of the First Amendment
provide: ‘Congress shall make no law respecting an
establishment of religion, or prohibiting the free
exercise thereof.' These two Clauses, the
Bstablishment Clause and the Free Exercise Clause,
are frequently in tension. See Norwood v. Harrison,
413° U.S. 455, 469 (1973) (citing Tilton v.
Richardson, 403 U.S. 672, 677 (1971)). Yet we have
long said’ that ‘there is room for play in the
joints’ between them. Walz v. Tax Comm'n of City of
New York, 397 U.S. 664, 669 (1970). In other words,
there are some state actions permitted by the
Establishment Clause but not required by the Free
Exercise Clause.

"This case involves that 'play in the joints’
described above. Under our Establishment Clause
ent, the link between government func

xelisious txainina 4a broken by the independent and
See

Bimoneslaneia, $30 U8 039, 682" (2002); dobeaal v

Catalina Foothills school Dist., 509 U.S. 1, 13-14

(1993); Witter: Washington Dé Serve. for

Blind, 474 U.S. 481, 487 (1986); Mueller v. Allen,

463 U.S. 398, 399-400 (1983) ."

540 U.S, at 718-19 (emphasis added).

As can be gleaned from Zelman, aupra, and the cases cited
therein, most of the First Amendment Establishment Clause
cases that have reached the Supreme Court have involved state
laws authorizing financial benefits to church-related

institutions, and those cases, including Zelman, have

128

 

 
2130987, 1132020, 1131021
consistently held that indirect-governmental-aid programs to
religious schools do not violate the Establishment Clause
where the programs are neutral with respect to religion and
the decision to confer the aid rests with a private
individual, as opposed to the government. In applying the
principles of Zelman, we concluded that the tax-credit
provisions of the AAA passed constitutional scrutiny under §
263 because the provisions were neutral insofar as they did
not have the primary effect of advancing religion, and any
moneys that may ultimately flow to a religious school as a
result of those provisions will do so only as a result of the
independent and private choice of students’ parents, as
opposed to the State. In other words, the State's interest in
authorizing the tax credits in this case was not building or
repairing places of worship or maintaining ministers and
ministries. tn Alabama Education Ass'n v. James, supra, it
was held that the “Alabama constitutional provisions
concerning the establishment of religion are not more
restrictive than the Federal Establishment of Religion Clause
in the Firet Amendment to the United States Constitution."

373 So. 24 at 1081. Consequently, the tax-credit provisions

129

 
1130987, 1131020, 1131021
of the AAA do not violate Art. I, § 3, of the Alabama
Constitution, the Alabama counterpart of the religion clauses
of the First Amendment to the United States Constitution.
Accordingly, Count X of the plaintiffs! complaint is also due
to be dismissed for failure to state a claim upon which relief
can be granted. Rule 12(b) (6), Ala. R. Civ. P.
Intervention
The last issue we address is the scholarship parents’
postjudgment motion to intervene filed pursuant to Rule
24(a) (2) and Rule 24(b), Ala. R. Civ. P.
Standard of Review
‘The denial of a motion to intervene as of right is an
appealable order. State v, Estate of Yarbrough, [Ms. 1130114,
June 6, 2014) ___ So. 34 ___ (Ala. 2014). Generally, a
ruling on a motion to intervene is within the sound discretion
of the trial court and will not be disturbed on appeal absent
an abuse of that discretion. Id. Likewise, the denial of a

motion for permissive intervention is an appealable order.

Universal Underwriters Ins. Co, v, Anglen, 630 So, 2d 441
(ala. 1993). A motion for permissive intervention is

committed to the broad discretion of the trial court and is

130

 
1130987, 1131020, 1132021
therefore reviewed by this Court for abuse of that discretion.
OBE Ins. Corp, v. Austin Co., 23 So. 3d 1127, 1132 (Ala.
2009).

; excess 8 2

The scholarship parents argue that the circuit court
erred in denying their postjudgment motion to intervene, which
they filed on May 30, 2014. They sought to intervene both as
a matter of right pursuant to Rule 24(a) (2), Ala. R. Civ. P.,
and, in the alternative, as permissive intervenors pursuant to
Rule 24(b). In affidavits attached to their motion, Rachell
Prince stated that her two children had been assigned to
attend a school listed as failing under the guidelines of the
AAA. She said that she enrolled her children at a private
school in the fall of 2013 and applied for scholarships from
a scholarship-granting organization based of her income
eligibility. She received notice in February 2014 that her
children had been approved for scholarships totaling
approximately $13,800 to offset the approximate tuition of
$22,000 to attend the private school. Tyrone Whitehead's child
was zoned for a failing school, and he enrolled his child in
a private school and applied for a scholarship with one of the

a31

 

 
1130987, 1131020, 1131021
approved scholarship-granting organizations under the AAA.
Whitehead was notified in January 2014 that his child had been
approved for a scholarship and that the scholarship covered
approximately $10,000 of the $11,000 in tuition at the private
school. Dalphine Wilson stated that she did not like the
disruptive atmosphere of the school her children were zoned to
attend. she did not testify that her children were zoned for
a failing school, although this is no longer a requirement of
the AAA. She enrolled her children in a Catholic school in
the fall of 2013 and applied for scholarships based on her
income level. In February 2014, she was notified that her
children had been approved for scholarships that offset
approximately $9,000 of the approximate $11,000 in tuition due
for both children. wilson stated that she was not Catholic
and that she did not choose the school for religious grounds.

Rule 24(a) provides:

"Upon timely application, anyone shall be permitted

to intervene in an action: (1) when a statute

confers an unconditional right to intervene; or (2)

when the applicant claims an interest relating to

the property or transaction which is the subject of

the action and the applicant is so situated that the

disposition of the action may as a practical matter

impair or impede the applicant's ability to protect

that interest, unless the applicant's interest is

adequately represented by existing parties.”

132

 
1130987, 1131020, 1131021

As noted above, the standard of review applicable in
cases involving a denial of a motion to intervene as of right
is whether the trial court has acted outside its discretion.

of Doxa v, Beavers, 692 So. 2d 08, #10 (Ala. 1997).
typically, persons desiring to intervene in a civil action as
of right will claim entitlement to intervention under Rule
24(a) (2), Ala. R. Civ. P., which mandates intervention upon
timely application if "the applicant claims an interest
relating to the property or transaction which is the subject
of the action" and is "go situated that the disposition of the
action may as a practical matter impair or impede the
applicant's ability to protect that interest, unless the
applicant's interest is adequately represented by existing
parties." Thus, this Court has held that, under Rule

24(a) (2), the trial court has discretion to determine "whether

 

the potential intervenor has demonstrated: (1) that its motion
is timely; (2) that it has a sufficient interest relating to
the property or transaction; (3) that its ability to protect
its interest may, as a practical matter be impaired or

impeded; and (4) that its interest is not adequately

 

represented." City of Dora, 692 So. 2d at 810. Intervention

133

 
1130987, 1131020, 1131021
as of right under Rule 24(a) is proper only if all four
requirements have been established.

Rule 24(b), Ala. R. Civ. P., provides that on a timely
motion the court may permit anyone to intervene when a statute
confers a conditional right to intervene or when an
applicant's claim or defense and the main action share a
common question of law or fact. Rule 24(b) goes on to provide
that "[iln exercising its discretion the court shall consider
whether the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties."

In discussing the timeliness of motions to intervene,
this Court has stated:

"since [Rule 24, Ala. R. Civ. P.J,
itself, is silent’ concerning what
constitutes a "timely application," it has
long been held that the determination of
timeliness is a matter committed to the
sound discretion of the trial court. see
Strousse v. Strouse, 56 Ala. App. 436, 322
So. 2d 726 (1975). See also McDonald v.
Ed. Lavino Co,., 430 F. 2d 1065, 1072 (Sth
Cir. 1970). Because the pressure to allow
intervention “of right" under Rule 24(a) is
by ite very nature more compelling than is
permissive intervention, most courts tend
to require less rigidity in evaluation of
timeliness under Rule 24(a). See Diaz _v.
Southern Drilling Corp., 427 F.2d 1116 (5th
Cir.) cert. denied, 400 U.S. 878, 91 S.ct.
118, 27 L.Ed.2d 115 (1970), ‘rehearing

134

 

 
1130987, 1131020, 1131021

denied, 400 U.S. 1025, 91 8.ct. 580, 27 b.
Ed. 24'636 (1971). See generally, [Charles
Alan Wright et al., Federal Practice &
Brocedurel § 1916 '[(2d ed. 1986)]. As
expressed in McDonald, 430 F.2d at 107
"since in situations where intervention is
as of right, the would-be intervenor may be
seriously harmed if he is not permitted to
intervene, courts should be reluctant to
dismiss such a request for intervention as
untimely, even though they might deny the
if the intervention were merely

 

 

 

 

"Randolph County v. Thompson, 502 So. 2d 357, 364
(Ala. 1987). In other words, trial courts have
broader discretion in denying a motion for
permissive intervention as untimely under Rule 24(b)
than they do in denying as untimely a motion to
intervene as of right under Rule 24(a)."

QBE Ing, Corp, v, Austin Co,, 23 So. 3d at 1131.

Generally, postjudgment motions to intervene are
disfavored. Duncan v, First Nat'l Bank of Jasper, 573 So. 24
270, 275 (Ala, 1990). The rationale behind this general
principle is the assumption that allowing intervention after
a judgment has been entered will prejudice the rights of the
existing parties or substantially interfere with the orderly
processes of the court.

With regard to the scholarship parents! motion to

intervene as a matter of right, they are seeking to intervene

to uphold the constitutionality of the AAA, arguing that they

135

 
1130987, 1131020, 1131022
will not be able to keep their children enrolled in private
schools if the AAA is declared unconstitutional. We cannot
say that the scholarship parents’ interests are not being

adequately represented in this case. The United states

 

Supreme Court, in interpreting Rule 24, Fed. R. Civ. P.,
provided two central principles for an adequacy-of-

> Trbovich v, United Mine Workers

of America, 404 U.S. 528 (1972). First, the Supreme Court

 

representation analysis

stated that, while a proposed intervenor bears the burden of
proof, it is sufficient to prove that representation "'may be!
inadequate" -- an intervenor does mot have to prove that
representation will in fact be inadequate. 404 U.S. at 538 n.
10. Second, the Suprene Court established that the burden of
showing that representation may be inadequate "should be
treated as minimal." 4. "However ‘minimal’ thie burden may

be, it cannot be treated as so minimal as to write the

 

requirement completely out of the rule." Bus) 740

F.2d 350, 355 (Sth Cir, 1984).

ncases interpreting the Federal Rules of Civil Procedure
can be persuasive authority in construing the Alabama Rules of
Civil Procedure because of the similarities between the
Alabama rules and federal rules."
Auto, Ins, Co,, 915 So. 24 557, 561 n. 3 (Ala. 2005).

136
1130987, 1131020, 1132021

“There is a presumption of adequate representation
when an existing party seeks the same objectives as
the interveners. Clark _v. Putnam County, 168 F.3d
458, 461 (11th Cir. 1999). This presumption is weak
and’ can be overcome if the plaintiffs present some
evidence to the contrary. Id. If the interveners
overcome this presumption, the court ‘returns to the
general rule that adequate representation exists
"{1] if no collusion is shown between the
representative and an opposing party, [2] if the
representative does not have or represent an
interest adverse to the proposed intervener, and [3]
Af the representative does not fail in fulfillment
of his duty."' Id. Interveners need only show that
the current plaintiff's representation ‘may be
inadequate,' however, and the burden for making such
a showing is 'minimal.' id."

stone v, First Union Coxp., 371 F.3d 1305, 1311 (11th Cir.
2004); see also United states v, City of Miami, 278 F.3d 1174,
1178-79 (11th Cir, 2002) (finding that the United States of
America's interest in bringing the employment-discrimination
suit against the city was identical to a police officers’
association); Athens Lumber Co, v. FEC, 690 F.2d 1364, 1367
(ath cir. 1982) (denying intervention because both the
machinists’ union and the Federal Election Commission "have
precisely the same objective" in upholding the
constitutionality of a provision of the Federal Elections
Campaign Act).

The State defendants have argued for the

137

 

 
1130987, 1131020, 1131021

 

constitutionality of the AAA, including making arguments that
the scholarship program set out in Section 9 is
constitutional. Additionally, the scholarship parents' own
counsel have filed briefs and argued the constitutionality of
the AAA on behalf of the tax-credit parents. The scholarship
parents argue that they have a separate interest from that of
the tax-credit parents in that they are relying on
scholarships instead of tax credits to send their children to
private school. However, the scholarship parents stated in
their postjudgment motion to intervene that they would not be
presenting any new claims or legal defenses. As indicated
earlier, failure to meet one of the requirements of
intervention as of right is fatal to the motion to intervene.
We also question the timeliness of the scholarship parents’
motion, where the motion was filed at least three months after
they knew they had received scholarships and there is
absolutely no indication that they were unaware of the
litigation challenging the constitutionality of the AAA.
There may also be a question as to whether the scholarship
parents have shown that their rights will be impaired based on

the information before the circuit court. The scholarship

138

 

 
1130987, 1131020, 1132021
parents sought intervention to argue for the constitutionality
of the AAA so that their children can remain in private
schools for the 2014-2015 school year and beyond. The
scholarship parents make no argument that they will have to
xefund the scholarship money they received for the 2013-2014
school year. Furthermore, the scholarship parents did not
address the applicable scholarship-granting organization's
requirements for reapplying for scholarships, e.g., how income
status is confirmed from year to year, or whether there are
enough funds to pay for scholarships from year to year, or
whether any subjectivity is involved. Accordingly, we cannot
say the circuit court exceeded its discretion in denying the
scholarship parents! motion to intervene as of right.

With regard to permissive intervention, we cannot say the
circuit court exceeded its broad discretion in denying the
scholarship parents' postjudgment motion. Again, we question
whether their motion was timely filed. Additionally, the
scholarship parents are making the same claims as the state
defendants and the tax-credit parents, who are adequately
representing the scholarship parents’ interests. This

diminishes their argument for permissive intervention. See

 

139

 
1130987, 1131020, 1131021
City of Stilwell v, Ozarks Rural Elec, Coop, Corp., 79 F.3d
1038, 1043 (10th Cir. 1996) (affirming the district court's
denial of intervention under Rule 24(b), Fed. R. Civ. P., when
district court found that potential intervenor's interests
were adequately protected); Perry v. Schwarzenegger, 630 F.3d
898, 906 (9th Cir. 2011) (affirming district court's denial of
intervention under Rule 24(b), Fed. R. Civ. P., when the
court, in part, “based this conclusion first on the fact that
Movants had explained that they had no new evidence or
arguments to introduce into the case"); and Hoots v.
Pennsylvania, 672 F.2d 1133 (3d Cir, 1982) (holding that
although intervention as of right does not automatically
mandate denial of permissive intervention, where the interests
of the applicant for permissive intervention, in every manner,
match those of an existing party and the party's
representation is deemed adequate, the district court is well
within its discretion in deciding that the applicant's
contributions to the proceedings would be superfluous) .
Based on the foregoing, we cannot say that the circuit
court exceeded its discretion in denying the scholarship

parents! motion to intervene.

140

 
1130987, 1131020, 1131021
Conclusion

The plaintiffs challenged the constitutionality of the
AAA on several grounds. Following the enactment of the AAA on
February 28, 2013, no subsequent act of the legislature
rendered any of the plaintiffs’ procedural challenges moot.
‘The plaintiffs' procedural challenges to the AAA did not fall
into the realm of nonjusticiable political questions
implicating separation-of-powers concerns. Instead, the
plaintiffs! allegations of procedural infirmities in the
enactment process of the AAA did not implicate a lack of
respect due the legislative branch of government, but
acknowledged the constitutional responsibility of this Court
as the final arbiter of state constitutional disputes. Im
addressing the merits of the plaintiffs’ constitutional
challenges, we hold as follows: (1) that the AAA did not
violate the original-purpose requirement of the Alabama
Constitution because the substitute bill did not change the
general purpose of the HB 84, the original bill; (2) that the
ABA did not violate the three-readings requirement of the
Alabama Constitution because the substitute bill was germane

to and not inconsistent with the general purpose of the

242.

 
21130987, 1131020, 1131021
original bill so that the substitute bill did not have to be
read three times on three different days; (3) that the AAA did
not violate the single-subject requirements of the Alabama
Constitution simply because the legislature embraced education
reform and accountability through making school-flexibility
contracts available to underachieving schools and providing
tax credits for parents whose children attend failing schools
and the AAA did not violate the single-subject requirements by
including the tax-credit programs because the tax-credit
programs do not involve an appropriation; (4) that the AAA did
not violate the prohibition against appropriating money to
non-State charitable or educational institutions because
"appropriations" are directly related to moneys in the State
treasury because it is those public funds that would
ultimately satisfy the particular appropriation, whereas the
tax-credit programs did not involve moneys that are ever
collected by the State or available to the legislature for
appropriation; (5) that the AAA also did not violate the
prohibition against appropriating money to non-state
charitable or educational institutions because the refundable

tax credits in Section 8 of the AAA are made to the parents of

142

 
1130987, 1131020, 1131021
students transferring from a failing school and are not paid
to a non-State charitable or educational institution, and,
likewise, Section 9 of the AAA does not involve a payment to
a non-State charitable or educational institution because the
taxpayer receives a tax credit for donations to a scholarship-
granting organization; (6) that the AAA does not violate the
constitutional requirement that all net proceeds from the
State income tax be used for the payment of public-school-
teacher salaries because the Section 9 tax-credit program is
a tax credit and therefore does not involve funds that
actually enter the State treasury; (7) that the AAA does not
violate the constitutional prohibition against creating new
debt because the tax credits are determined on a yearly basis
and paid only from that amount of sales-tax revenue necessary
to cover the income-tax credits for that tax year; (8) that
the AAA does not violate the constitutional prohibition
against appropriating money raised for public schools to the
support of religious schools because the AAA does not involve
appropriations and because the AAA is neutral with respect to
religion, and any governmental assistance to religious schools

will flow only through the private choice of the students!

143

 
1130987, 1131020, 1131021
parents; (9) that the AAA does not violate the constitutional
prohibition against the State's advancing religion because the
AAA is neutral with respect to religion and any perceived or
incidental advancement of religion is from the private choices
of individual parents about their children's education; and
(10) that the circuit court did not exceed its discretion in
denying the scholarship parents’ postjudgment motion to
intervene because, among other things, they were adequately
represented by the existing parties.

Based on the foregoing, the judgment of the circuit court
is affirmed in part and reversed in part and the case is
remanded for proceedings consistent with this opinion. The
order denying the scholarship parents' motion to intervene is
affirmed.

1130987 -- AFFIRMED IN PART; REVERSED IN PART; AND
REMANDED.

Moore, C.d., and Stuart, Parker, Main, and Wise, JJ.,
concur.

shaw and Bryan, JJ., concur in part and concur in the
result.

Murdock, J., dissents.

aaa

 

|
1130987, 1131020, 1131021
1331020 -- AFFIRMED.
Moore, C.J., and Stuart, Parker, Murdock, Shaw, Main,
Wise, and Bryan, JJ., concur

1131021 -- AFFIRMED IN PART; REVERSED IN PART; AND
REMANDED.

Moore, C.J., and Stuart, Parker, Main, and Wise, oJ.,
concur.

Shaw and Bryan, JJ., concur in part and concur in the
result.

Murdock, J., dissents.

145
1130987, 1131020, 1131021

SHAW, Justice (concurring in part and concurring in the result
in case nos. 1130987 and 1131021).

I concur as to Parts IIT, V, VI, VIZ, and VIII. For the
reasons discussed below, I concur in the result as to Parts I,
II, IV, IX, and X. I algo concur to affirm the trial court's
denial of the motion to intervene filed by the scholarship
parents.

Part I holds that the later legislative developments
could not cure any procedural defects in the passage of House
Bill 84, Because the main opinion holds that there were no
procedural defects in the first place, I believe that any
analysis as to whether the defects could be cured by
subsequent action is hypothetical and thus dicta. Therefore,
I concur in the result as to Part I.

i also concur in the result as to Parts IT and IV. 1
agree that an analysis concerning whether the passage of House
Bill 64 violated Ala. Const. 1901, Art. IV, §§ 61 and 45, does
not present a political question. However, T have serious
concerns as to whether compliance with the three-readings

requirement of § 63 might present such a nonjusticiable issue.

MT also see no need to overrule prior caselaw if such has
no impact in thie case.

1a6
1130987, 1131020, 1131021
The plain language of this section merely requires that a bill
be read on three different days in each house of the
legislature. This is a purely procedural requirement, and
Ala. Const. 1901, Art. IV, § 53, vests the legislature with
the power to determine the rules of its proceedings. what it
means to properly read a bill is a matter within the inherent
and internal decision-making process of the legislature, and
the Alabama Constitution places no limit on the legislature's
authority with respect to compliance with this portion of §
63. My concern is that a determination of whether a bill was
properly read under § 63 is no different than a determination
of whether, as also required by the section, a bill received
a majority vote of each house, which this Court held in
Birmi: = iv ter Ay i city o:
Birmingham, 912 So, 24 204 (Ala. 2005), to be a nonjusticiable
political question. Here, however, House Bill 84 was actually
read three times in each house, which is all the face of § 63
requires. Therefore, I hesitate to examine the issue any
further.

I express no opinion as to Parts IX and X, addressing

counts IX and x in the complaint, which still remain pending

147

 
1130987, 1131020, 1132021

in the trial court.**

“specifically, the plaintiffs did not move for a judgment
on the pleadings as to these counts, and there is no judgment
in the record adjudicating them. To the extent it might be
argued that the judgment before us is not final, T note that
the ruling on the plaintiffs’ Rule i2(c), Ala. R. Civ. P.,
motion formed the basis of the injunctive relief they sought.
See Rule 4(a)(1) (A), Ala. R. App. P. (providing for an appeal
as of right to our appellate courts "from any
interlocutory order granting, continuing, modifying, refusing,
or dissolving an injunction"). A review of the trial court's
judgment on the pleadings seems to me to be a proper method to
@etermine whether the injunction should have been granted,
specifically, whether the plaintiffs demonstrated "success on
the merits." Walden v. ES Capital, LLC, 89 So. 3d 90, 105
(Ala. 2011). See, e.g., Dawkins v. Walker, 794 So. 2d 333
(Ala. 2001) (reviewing, under Rule 4(a)(1)(A), a ruling on a
motion for summary judgment that formed the basis for an
injunction) .

 

ass

 

 

 
1130987, 1131020, 1132021

BRYAN, Justice (concurring in part and concurring in the
result in case nos. 1130987 and 1131021).

I concur in all aspects of the main opinion, except for

Parts IX and IV, as to which I concur in the result. i

 

149

 
1130987, 1131020, 1131021

MURDOCK, Justice (dissenting in case nos. 1130987 and
1131021) .

It appears to me that House Bill 84 was amended to serve
a different "purpose" (albeit within the general "subject" of
improving education) than that which characterized the bill as
originally introduced and thereby violates Art. IV, § 61, Ala.
const. 1901. As a corollary, it also appears to me that the
‘three-readings" requirement of Art. IV, § 63, of the Alabama
Constitution was not met. In addition, to the extent that the
Alabana Accountability Act provides for the payment of funds
to parents in excess of the parents’ tax Liabilities, T am
concerned that it does so under conditions as to the
expenditure of those funds that effectively violate, or
contemplates a violation of, Art. IV, § 73, Ala. Const. 1902.
I, therefore, respectfully dissent as to case nos. 1130987 and

1131021,

150

I

 

 
APPENDIX A

Original Version of HB 84
20

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ENGROSSED

A brn
TO BE ENTITLED
aw ACT

To establish the Local Control School Flexibility
Act of 2013, relating to public K-12 educations to authorize
the esteblishnent of innovative schools and school systens in
the state; to provide legislative Findings and purposes; to
provide an overviews to authorize the state Goard of Education
to enter.into school flexibility contracts with local school
systens? to require the local board of education to subnit a
docurent of assurance? to require the State Board of Education
te promulgate rules and regulations relating to innovative
school systems; to require local school systens to submit an
Annovation plan to the State Department of Education in order
to qualify for innovation status; and to provide for an
effective date.
BE If ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and nay be cited
as the Local Contzol School Flexibility Act of 2013.

Section 2. (a) Innovative schools and school systens
may be established in Alabama in accordance with this act.

(©) The purpose of this act is to advance the

benefits of local school and school system autonomy in

Fage 1

 
30

Innovation and creativity by allowing flexibility from state
laws, regulations, and policies.
Section 3. (a) The Legislature finds and declares

all of the following:

 

(1) To further the goals of public education
‘throughout the state, each school system should be able to

have naximun possible flexibility to meet the needs of

 

 

students and the communities within its jurisdiction,

(2) there te a critical need for innovative nodels
of public education that are tailored to the unique
cizcunstances and needs of the students in all schools and
communities, and especially in schools and communities that
are struggling to improve academic outcomes snd close the
achievenent gap.

(3) To better serve students and better use
available cesources, local boards of education and local
school systens need the ability to explore flexible
alternatives in an effort to be more efficient and effective
in providing operational and programatic services.

(b) Therefore, it is the intent of the Legisiature
to do all of the following:

(2) Allow school systens greater flexibility in
meeting the educational needs of a diverse student population.

(2) Improve educational perfomance through greater
individual school autonomy and managerial flexibility with

xegard to programs and budyetary matters.

Page 2

 
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(3) Encourage innovation in education by providing
local school systems and school administrators with greater
control over decisions inciuding, but not Limited to,
budgetary matters, staffing, personnel, scheduling, and
educational programming, including curriculum and instruction.

Section 4. For the purposes of this act, the
following tems shall have the following meanings:

(a) FLEXIBILITY CONTRACT. A school flexibizity
contract between the local school system and the State Board
of Education whersin a local school system may apply for
programmatic flexibility or budgetary flexibility, or both
from state laws, regulations, and policies, including
regulations and policies promulgeted by the State Board of
Education and the State Department of Education.

(2) INWOVATION PLAN. ‘The request of a Local school
system for flexibility and plan for annual accountability
measures and five-year targets for all participating schools
within the school systen.

(3) LOCAL BOARD OF EDUCATION, A city ox county board
of education that exercises management and control of a local
school systen pursuant to state lew.

(4) LOCAL SCHOOL SYSTEM, A public agency that.
establishes and supervises one or more public schools within
its geographical Limits pursuant to state law.

(5) SCHOOL ADMINISTRATOR. A local superintendent of
education or local school principal, unless otherwise

specified.

page 3

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Section 5. (a) Pursuant to this act, to be
considered'as an innovative school system, a lecal school

system shall successfully comply with the requirements and

 

procedures set forth by the State Department of Education

regarding school flexibility contracts, which include, but are

 

not Limited to:

(1) Submission to the State Department of Education

 

 

of a letter of intent to pursue a school flexibility contract

(2) Submission to the State Department of Education
of a resolution adopted by the local board of education
supporting the intent of the local school system to pursue a
schocl flexibility contract.

(2) Submission to the State Department of Education
of a document of assurance stating that the local beard of
education shall provide consistency in leadership and =
comitment to state standards, assessments, and academic
rigor.

(4) Submission to the State Board of Rducation of a

 

 

zesolution adopted by the local board of education supporting
the flexibility contract proposal and the anticipated timetin
of the local school systen.

(b) Pursuant to State Board of Education rules, each
local school system shall provide an opportunity for fu11
discussion and public input, including @ public hearing,
before submitting a school flexibility contract proposal to

the State Board of Education.

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{c) A 1ocal school systen shall ensure that its
school flexibility contract proposal and innovation plan ts
eacily accessible to the general public on the website of the
Local school systen.

Section €. (a) The innovation plan of a local school

system shall include, at a minimum, all of the followin:

 

(1) The school year that the local school system
expects the school flexibility contract to begin.

(2) the List of state laws, regulations, and
policies, including rules, reguiations, and policies
promulgated by the State Board of Education and the State
Department of Education, that the local school system 1s
seeking to waive in its school flexibility contract.

(2) A Let of schools included in the innovation
plan of the local school systen.

(®) A local school system 1s accountable to the
stata for the performance of all schools in its system,
including innovative schools, under state and federal
accountability requirements.

{c) A local school eysten may not, pursuant to this

act, walve requirenents imposed by federal lax, requirements

 

related to the health and safety of students or employees,
roquirenents imposed by athics laws, requizements inposed by

open records or open meetings laws, requirements related to
financial or academic reporting or transparency, requirements
designed to protect the civil rights of students or employees,

requizenents related to partictpetterine the state

Page 5

 

 
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retirement system or state health insurance plan, oF
requirements imposed by Section 16-13-231, Code of Alabama
1975. This act may not be construed to allow a iecai-schoo?
-systen-to-compensate-a-current-empioyse-at an ennui rete-that
‘t-tees-thar-the-anount-the-current-emptoyee Jocal_ school
systen to compensate an employee at an annual amount that is
less than the amount the enplovee would otherwise be afforded
through the state Minimum Salary Schedule included in the
annual Education Teust Fund Appropriations Act #nforee-at—the
time. Additionally, this act may not be constzved to allow a

 

Jocal school system to require any employes or future employas
who attains tenure or nonprobationary status to involuntarily
relinguish any rights or privileges acquired by that employes

as a result of attaining tenure or nonprobationary status

 

under the Students First Act.

 

No provision of thig act shall be construed ox shall
housed to authorize the formation of a charter school.

(d) Nothing in this act shall be construed to
prohibit the approval of ¢ flexibility contract that aives
jal, cur = future the option

voluntarily waive any rights or privileges already acquired o:
chat could potentially be acquired as a result of attaining
tenure or nonprobationary si wovided, however, that_am
employee provided this option s also provided the option of

ainin entially obtaining any rights or pr
provided under the Students First Act, Chapter 24¢ of Title

16, Code of Alabana 1975.

Page 6

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40h (e} The State Departnent of Education shall
finalize all school data and the local school systen shall
seek approval of the Local board of education before final
subniseion to the State Departnent of Education and the State
Board of Education.

tet (2) The final innovation plan, as recommended by
the local superintendent of education end approved by the
local board of education, shall accompany the formal
submission of the local school syaten to the State Department
of Bdscation.

46 (a) Within 60 davs of recoiving the final
submission, the State Superintendent of Education shalt decide
ether or not the school flexibility contract and the
Annova wld be approve: tate
Superintendent of Edueation denies a school flexibility
contract and innovation plan, he or she shall provide a
written explanation for his or her decision to 1 board
of education. Likewise, a written letter of approval by the
State Superintendent of Eduestion shell be provided to the

cal board that subaitted the £4 2
flexibility contract and innovation plan.

481g {b) The State Board of Education shall
promulgate any necessary rules and regulations required to
Implenent thie act Sncluding, but not Linited to, all of the

following:

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(2) the specification of tinelines for submission
and approval of the Innovation plan and school flexibitity
contract of a local school systen.

(2) An authorization for the State Departnent of
Education, upon approval by the State Board of Education after
periodic review, to revoke a school flexibility contract for
noncompliance or nenperformance, or both, by @ local schoo?
system.

(2) An outline of procedures and necessary steps
that a local school system shall follow, upon denial of an
original submission, to anend and resubmit an innovation plan
and school flexibility contract for approval.

Section 7. The State Board of Education and the
State Depaxtrent of Education shall ensure equal opportunity
for all school systems that apply for programmatic flexibility
or budgetary Flexibility, ox both, as delineated in this act,
and in no way shall one local school systen be favored over
another local school system based upon ite size, location,
student population, or any other possible discriminatory

Section 8. This act shall become effective
innediately following its passage and approval by the

Governor, or its otherwise becoming law.

Fage @
APPENDIX B

Substitute Version of HB 84
 

ENROLLED, An Act,

To establish the Alabana Accountability Act of 2013,
relating to public K-12 education; to authorize the
establishment of innovative schools and school systems in the
states to provide legislative findings and purposes; to
provide an overview; to authorize the State Board of Education
to enter into school flexibility contracts with local school
systens; to requize the local board of education to submit a
document of assurance; to require the State Board of Education
0 promulgate rules and regulations relating to innovative

school system

 

to requize local school systems to submit an
Annovation plan to the State Department of Education in order
to qualify for innovation status; to provide an income tax

credit to any parent who transfers 9 student enrolled in or

 

assigned to attend a failing public K-12 school to a
nonfailing public school cr nonpublic school of the parent's
choice; co Limit the income tax credit to 80 percent of the
average annual state cost of attendance; to create within the
Education Trust Pund the Failing Schools Income tax Credit
Account; and to authorize the Comptroller to annually transfer
into the account proceeds from sales tax revenues in an amount
suffieient for the Department of Revenve to pay the incone tax
credits; to authorize a tax credit for contributions to

organizations that provide educational scholarships to

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qualifying schools; to provide for the responsibilities of
scholarship organizations; to provide for oversight of
Participating schools; to provide for the responsibilities of
the Department of Revenue; and to provide for an effective
date.
BE IT BNACTED BY THE LEGISLATURE OF ALABAMA:

Section 1, This act shall be known and may be cited
as the Alabama Accountability Act of 2013.

Section 2, (a) Innovative schools and school systens
may be established in Alabama in accordance with this act

(b} he purpose of this act is te advance the
benefits of local school and school systen autonoay in
Annovation and creativity by allowing flexibility from state
laws, regulations, and policies.

Section 3. (a) The Legislature finds and declares

all of the followin

 

(1) To further the goals of public education
throughout the state, each school system should be able to
have maximum possible flexibitity to meet the needs of
students and the comunities withia its jurisdiction.

(2) there is 4 critical need for innovative models

 

of public education that are tailored to the unique
circumstances and needs of the students in all schools and

conmunities, and especially in schools and communities that

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are struggling to improve academic outcomes and close the

 

chievenent gap.

{3) To better serve students and better use

 

available resources, local boards of education, local school

syste

 

and parents need the ability to explore flexible
alternatives in an effort to be more efficient and effective
An providing operational and programmatic services

(®) Therefore, it is the intent of the Legislature

to do all of the followin:

 

(2) Allow school systems greater flexibility in

resting the educational needs of a diverse student. population.
(2) Improve educational performance through greater

individual school autonomy and managerial flexibility with

regard to prograns and budgetary matters.

(2) Encourage innovation in education by providing
Jocal school systems and school administrators with greater
control over decisions including, but not limited to,
budgetary matters, staffing, personnel, scheduling, and
educational programming, including curriculum and instruction.

(4) Provide financial assistance through an income
tox eradit to a parent who transfers a student froma faiting
Public school to a nonfailing public school or nonpublic
school of the parent's choice.

Section 4, For the purposes of this act, the

following terms shall have the following meanings:

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(1) EDUCATIONAL SCHOLARSHIPS. Grants to any
qualitying school to cover all or part of the tuition and fees
at the school for an eligible student.

(2) ELIGIBLE STUDENT, A student who satisfies all of
the foitewing:

4, Ie a member of a household whose total annvai
Ancone the year before he or she receives an educational
scholarship under this progran does not exceed an amount equal
to 180 percent of the nedian household income. Once a student
receives an educational scholarship under this program, the
student shall remain eligible regardless of household incene
until the student graduates high school or reaches 19 years of
ace

b, Was eligible to attend a public school in the
preceding senester or is starting school in Alabama for the
Hirot tine.

©. Resides in Alabana while receiving an educational
scholarship,

(3) FAILING SCHOOL. A public K-12 school that is

 

labeled os persistently low-performing by the State Department
of Education, in the then most recent United States Department
of Education School Improvement Grant application; that is
Aleted in the lowest ten percent of public K-12 schools on the
state standardized assessment in reading and math; that has

earned 2 grade of "P or three consecutive grades of *D"

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pursuant to Section 16-6-2, Code of Alabana 1975; or that is
designated a failing school by the State Superintendent of
Education.

(4) FLEXIBILITY CONTRACT. A school flexibility
contract between the local school system and the State Board
of Education wherein a local schoo! system may apply for
programatic flexibility or budgetary flexibility, or both,
from state laws, regulations, and policies, including
regulations and policies promulgated by the state Board of
Education ané the State Department of Education.

(5) TMNOVATION PLAN, The request of a Local school

system for flexibility and plan for annual accountability

 

meacures and fiv

 

year targets for all participating schools
within the school systen.

(6) LOCAL BOARD OF EDUCATION. A city or county board
of education that exercises management and control of 4 local
school systen pursuant to state tow.

(7) WAL SCHOOL SYSTEM, A public agency that
establishes and supervises one or nore public schools within
its geographical Linits pursuant to state lav.

(8) LOW-INCOME ELIGIBLE STUDENT. A student of a
family with incone ess than two times the federal poverty
devel

(3) WONPUBLIC SCHOOL. Any nonpublic ox private

‘school, including parochial schools, not under the

 

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jurisdiction of the State Superintendent of Education and the
State Board of Education, providing educational services to
children. A nonpublic school se accredited by 2 state
recognized accrediting agency that provides education to
elementary or secondary, oF both, students and has notified
the State Department of Fevenue of its intention to
Participate in the scholarship program and comply with the

quirements of the scholarship program. A nonpublic schol

 

does not include hone schooling.
(10) PARENT. The parent or legal guardian of a
student, with authority to act on behalf of the student, who

clains the student as a dependent on his or her federal income

 

(21) QUALIFYING ScHiOOL. Either a public school

outelde of the resident school district that {s not considered

 

falling under either state or federal standarde or any
nonpublic school as defined in this act or that satisfies the

Section

 

compulsory attendance requirenents provided
16-28-7, Code of Alabama 1975. A qualified nonpublic achool
shall be accredited by one of the six regional accrediting
agencies or, 1£ not so accredited, shell satisfy all of the
following conditions:

a, Be in existence for at Least three years.

 

b, Have daily attendance of at least 85 pé

2 tworyear period.

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cc. Have a mininum 180-day school year, or its hourly
equivalent.

a. Have a day

 

hours.

@. Require all students to take the Stanford

 

Achievenent Test, or its equivalent.
£, Roquize all condidates for graduation to take the
american College Test before graduation.

@. Require students in high school in grades nine
vhrough 12 to earn a minimum of 24 Carnegie credits before
graduating, including 16 credits in core subjects and
additional requirements in health and physical education, fine
arte, computer studies, and foreign 2anguage.

hh, Not subject special education students to the
sone testing or curricular requirements as regular education
students if it is not required in the individual plan for the
student.

4, Maintain a current website that describes the
school and the instructional progran of the school.

4. Annually affirm on forms prescribed by the
scholarship granting orgenization and the departrent its

status finanefally and acadenicatly and provide othe:

selative

 

information as required by the scholarship granting

organization or as otherwise required in this act.

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(12) SCHOLARSHIP GRANTING ORGANIZATION. An
organization that provides or is approved to provide

‘educational scholarships to students attending qualifying

 

schools of their parents’ choice.
(23) SCHOOL ADMINISTRATOR. A local superintendent of
education or local school principal, unless otherwise
specified.
Section §. (a) Pursuant to this act, to be
considered as an innovative school system, a locsl school

system shall successfully comply with the requirements and

 

procedures set forth by the State Departnent of Education
regarding school flexibility contracts, which include, but are
not Limited to:
(1) submission to the State Department of Education
of a letter of intent to pursue a school flexibility contract.
(2) submission to the State Department of Education

of @ resolution adopted by the local board of education

 

supporting the intent of the local school system to pursue a
school flexibility contract.

(3) Submission to the State Department of Education
of @ document of assurance stating that the local board of
education shail provide consistency in leadership and a
commitneat to state standards, assessnents, and academic

rigor.

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(4) Submission to the State Board of Education of a

 

resolution adopted by the local board of education supporting
the flexibility contract proposal and the anticipated timeline
of the local school systea.

() Pursuant to State Board of Edveation rules, each
Local school system shall provide an opportunity for full
Alecussion and public input, including a public hearing,
before submitting a acheol flexibility contract proposal to

the State Board of Education.

 

(©) A Yocal senox

 

syaten shall ensure that its
‘school flexibility contract proposal and innovation plan is
easily accessible to the general public on the website of the
local school aysten.

Section 6. (a) The innovation plan of a local school
system shall include, at a minimum, all of the following:

(2) ‘The school year that the local school system
expects the school flexibility contract to begin.

(2) The List of state laws, regulations, and
policies, including rules, regulations, and policies
promulgated by the State Board of Education and the State
Department of Education, that the local school systen is
seeking to waive in ite school flexibility contract.

(3) A List of schoots included in the innovation

plan of the local school system.

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{b) A Local school system is accountable to the
state for the performance of all schools in its system,
ineluding innovative echoole, under state and federal

account:

 

ty requizenents.

(c) A local school aysten may not, pursuant to this

 

act, waive xequixenents imposed by federal law, requirements
related to the health and safety of studants or employees,

requirenents imposed by ethics laws, require:

 

ints imposed by
‘the Alabana Child Protection Act of 1993, Chapter 2A, Title
16, Code of Alabana 1975, roquirenents inposed by open records
for open meetings laws, requtrenents related to financial or
acadenic reporting or transparency, requirements designed to
protect the civil rights of students or employees,
requirenents related to the state retirement systen or state

health insurance plan, or

 

.quirenonts imposed by Act
2012-482. This act may not be construed to allow a local
school systen to compensate an exployee at an annual amount
that 4s Less than the amount the employee would otherwise be
afforded through the State Mininun Salary Schedule included in
the annual Education Trust Fund Appropriations Act. No local
school system shall Jnvoluntarily reneve any rights or
privileges acquired by any employee under the Students First
Act of 2011, chapter 24C, Title 16, Code of Alabana 1975.
Except as provided for a failing school pursuant to subsection

(e), no plan oF progran submitted by a local board of

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education may be used to deny any right or privilege granted

to a new employee pursuant to the Students First Act of 2011.

 

(@) Xo provision of this act shall be construed or

be used to authorize the formation of a charter school.

 

(e) Any provision of subsection (c) to the contrary
notwithstanding, nothing in this act shall be construed to
prohibit the approval of a flexibility contract that gives

potential, current, or f

 

wre employees of a failing school

eal echot

 

within the

 

system the option to voluntarily waive

 

any Fights oF privileges already acquized or that col
potentially be acquired as a result of attaining tenure or
nonprobationary status, provided, hovaver, that any employee
provided this option is also provided the option of retaining
or potentially obtaining any rights or privileges provided
under the Students First Act, Chapter 24¢ of Titie 16, Code of
Alabama 2975.

(f) The State Department of Education shall finalize
fall school data and the local school system shall seek

approval of the local board of education before final

 

submission to the State Department of Education and the State
Board of Education.
(g) The final innovation plan, as recommended by the

proved by the loca

 

local superintendent of education and

board of edu

 

fon, shall accompany the formal subaisoion of

the local school system to the State Department of Education.

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(h) Within 60 days of receiving the final

submission, the State Superintendent of Education shall de:

whether or not the school fle:

 

{lity contract and the

innovation plan should be approved. If the State

Superintendent of Education denies a school flexibility

contract and innovation plan, he or she shall provide a

written explanation for his or her decision to the local board

of education. Likewise, a written letter of approval by the

State Superintendent of Education shall be provided to the

local beard of education that submitted the final school

flexibility contract and innovation plan.

(1) The State Board of Education shall promulgate

any necessary reles and regulations required to inplenent this

act including, but not Limited to, all of the following:

(2) The specification of timelines for submission

and approval of the innovation plan and school flexibility

contract of a local school system.

(2) An authorization for the State Department of

Education, upon approval by the State Board of Education after

periodic review, to revoke a school flexibility con

 

ct for

noncompliance or nonperformance, or both, by @ losal school

systen.

(3) An outline of procedures and necessary steps

that a local school eye!

 

shall follow, upon denial of an

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original submission, to anend and reavbmit an innovation plan

 

if school flexibility contrac: for approval.
Section 7. The State Board of Education and the

State Department of Education shall engure equal opportunity

for all school systens that apply for programmatic flexibility

or budgetary flexibility, or both, as delineated in this act,

 

1d {n no way ehall one local school eysten be favored over

jother local school system based upon its size, location,

 

student population, or any other possible discriminatory
Section 8, (a) To provide educational flexibility

and state accountability for students in failing schools:

 

(2) For tax years beginning on

 

nd after January 1,
2013, an Alabama incone tax credit 1s nade available to the
parent of a atudent enrolled in or assigned to attend a
failing school to help offset the cost of transferring the
student to a nonfailing pubiic school or nonpublic school of
the parent's choice, The incone tax credit shall be an anount
equad to 80 percent of the average annual atate cost of
attendance for a public K-12 student during the applicable tax
year or the actual cost of attending a nonfailing public
school or nonpublic school, whichever is less. A parent te

allowed a credit against income tax for each taxable ye:

 

under the terms established in this section. If incone taxes

owed by the parent are less than the total credit alloved

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under this subsection, the taxpayer shall be entitled to a
refund or rebate; aa the case may be, equal to the balance of
the unused credit with respect to thet taxable year.

(2) Any. income tax eredit due a parent under this
section shall be granted or issued to the parent only pon his

or her

 

faking application therefor, at such time and in such

manner as may be prescribed from time to time by the

 

Department of Revenue. The application process shall include,

 

parent that the

 

but not be limited to, certification by th

 

atudent was enrolled in or was assigned to attend a failing
school, certification by the parent that the student was

subsequently transferred to, and was enrolled and attended, a
nonfailing public school or nonpublic school of the parent's

choice, and proof, satisfactory to the Department of Revenue,

 

of the actual cost of attendance for the student at the
nonfailing public school or nonpublic school. The Department
of Revenue shall also prescribe the various methods by which
Income tax credits are to be issued to taxpayers. Incone tax
exedits authorized by this section shell be paid out of sales
tax collections made to the Education Trust Fund, and set
aside by the Comptroller in the Failing School Tax Credit
Account created in subsection (c), in the same manner ae
refunds of income tax otherwise provided by law, and there is,

hereby appropriated therefrom, for such purpose, so much ar

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nay be necessary to annually pay the incone tax credits
provided by this section.

(3) An application for an income tax credit
authorized by this section shall be filed with the Department
of Revenue within, the tine prescribed for filing petitions for
refund under Section 4028-7, Code of ALabena 1975,

(4) The Department of Revenue shail promulgate
reasonable rules to effectuate the intent of this section.

(0) (1) The parent of & public school student may
request and receive an income tax credit pursuant to this

\ction to reimburse the parent for costs associated with

 

transferring the student from failing school to a nonfailing
public school or nonpublic school of the parent's choice, in
any of the following cizcunstances:

1001 attendance area, if the

   

a. By assigned
student spent the prior school year in attendance at a failing
school end the attendance of the student occurred during
‘achool year in which the designation was in effect.

b. The student was in attendance elsewhere in the
Alabama public school aystem and was assigned to a failing
school for the next school year.

co. Te student wes notified that he or she was
assigned to @ failing school for the next school year.

(2) thie section does not apply to a student who is

enzolled ip the Department of Youth Services School District.

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(3) For the purposes of continuity of educational
choice, the tax credit shall be available to parents for those

grade levels of the failing school fron which the student,

 

transferred. The parent of a student who transfers from a

  

failing achool may zeceive income tax credits for those grade
levels enrolled in and attended in the nonfailing public
school or nonpublic school of the parent's choice transferred
to that were included in the fa{ling school fron which the

student traneferred, ¥!

 

thes oF not the failing school becomes
1a nonfailing school during those years. The student shall
return to his or ker original local school system of
attendance when he or she completes the highest grade level of
the failing schoo) transferred from in the nonfailing public
‘school or nonpublic school of the parent's choice, If the

public school the student returns to is a failing school, the

 

parent may again transfer the student to a nonfailing public
school or nonpublic school of the parent's choice and request
land receive an incone tax credit a9 provided in this section.

(4) A local school systen, for each student enrolled
in or assigned to a failing school, shall do ali of the
following:

a, Timely notify the parent of the student of all
options available under this section as soon as the school of

attendance is designated ss 3 failing school

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b. Offer the parent of the student an opportunity to

enroll the student in a

 

cher public school within the loca
school system that is not @ failing school or a fatling school
which the student has been assigned.

(5) Te paront of a student enrolled in or assigned

to a school th

 

fe has been designated as a failing school, as

 

an alternative to paragraph b. of subdivision (4), nay choose
to enroll the student in and transport the student to a

nonfailing public school that has available space in any other
local school system in the state, and that local school system

wer terme and

 

is willing to accept the student on whi
conditions the system establishes and report the student for
purposes of the local school system's funding pursuant to the
Foundation Program.

(6) For students in the local school system who are
participating in the tax credit progran, the local school
system shall provide locations and tines to teke all statewide

assessments required by law.

 

(1) Students wth disabilities who are eligible to
receive services from the local school systen under federal or
state lax, and who participate in the tax credit program,

remain eligible to receive services from the local school

 

systen as provided by federal or state law.
(8) If 2 parent requests that the student be

enrolled in 6 nonfalling public school within the sane local

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school system, transportation costs to the nonfailing public

schoo) shai

 

be the responsibility of the local school system.
(9) Te State Department of Education shall

promulgate reasonable rules

 

effectuate the intent of this
section, Roles shall include penalties for noncompliance.

(c) There is created within the Education Trust Fund
a separate account named the Failing Schools Incone Tax Credit
Account. The Commissioner of Revenue shat annually certify to
the Comptroller the amount of incoxe tax credits due te

pazents under thie section and the Comptroller shail transfor

 

Anto the Failing Schools Income Tax Credit Account enly the
amount from sales tax revenves within the Education Trust Fund
that is sufficient for the Department of Revenue to use to
cover the income tax credits for the applicable tax year, the
conmiseioner of Revenue shall annually distribute the funds in
the Failing Schools Incone Tax Credit Account to parents
pursuant to this section

Section 9. (a)(1) A taxpayer who files a state
Ancome tax return and 1s not a dependent of another taxpayer:
may claim a credit for contribution made to a scholarship
granting organization.

(2) the tax credit may be clained by an individual
taxpayer or a married couple filing jointly in an amount equal
to the total contributions made to # scholarship granting

organization for educational scholarships during the taxable

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year for which the credit ie clained up t0 50 percent of the
tax lfability of the taxpayer, not to exceed seven thousand
five hundred dollars ($7,500) per taxpayer or married couple
sling jointly.

(2) the tax credit may be claimed by 2 corporate
taxpayer in an anount equal to 50 percent of the total
contributions made to a scholarship granting organization for
educational scholarships during the taxable year for which the
credit is clained up to 50 percent of the tax Liability of the
taxpayer. The cusulative anount of tax credits issued pursuant
to subdivision (2) and this subdivision shall not exceed
twenty-five million dollars (525,000,000) annually. The
Department of Revenue shall develop a procedure to ensure that

this cap Le not exceeded and shall also prescribe the various

 

methods by which these credits are to be issued.
(4) A corporate taxpayer, an individual texpayer, oF
a married couple filing jointly nay carzy forward a tax credit
under the tax credit scholarship program for three years.
(®) (2) Administrative accountability standards, ALL
scholarship granting organizations shall do al of the

following:

 

a. Notify the Department of Revenue of their intent
to provide educational scholarships.
b, Demonstrate to the Departrent of Revenue that

they have been granted exemption from the federal income tax

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ae an organization described in Section 501(c) (3) of the

inter

 

1 Revenue Code,

fe. Distribute periodic educational scholerehip
payments as checks made out and mailed to the school vhere the
student is enrolled.

4. Provide a Departnent of Revenue approved receipt
to taxpayers for contributions made to the scholarship
granting organization.

fe. Ensure that at least 95 percent of their revenve
‘from donations is spent on educational scholarships, and that
all revenue from interest or investments is spent on
educational scholarships.

£, Spend each year a portion of their expenditures
on educational scholarships for low-incone eligible students
equal to the percentage of low-incone eligible students in the
county where the scholarship grenting organization expends the
najority of its educational acholarshtps.

g. Ensure that at least 75 percent of first-time
recipients of educational scholarships were not continuously
enrolled in a private school during the previous year.

h, Cooperate with the Departnent of Revenue to
conduct criminal background checks on all of their employees
and board menbers and exclude from employment or governance
any individual vho may reasonably pose a risk to the

appropriate use of contributed funds.

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A. Ensure that educational scholarships are portable
uring the school year and can be used at any schecl that

accepts the eligible student according to the wi:

 

128 of the

parent. If a student transfers to another achool during a

 

school year, the educational scholarship anount may be
prorated.

J. Publicly report to the Department of Revenue by
June 1 of each year all of the following information prepared

by @ certified public accountant regarding

 

ir grante in the
previous calendar year

1, The nane and address of the scholarship granting
organization.

2, The total number and total dollar anount of
contesbutions received during the previous calendar year

3. The total number and total dollar amount of

educational scholarships awarded during the previous caiendar

 

 

Lar amount of educational

 

year, the total number and totel do
scholarships awarded during the previous year for students
qualitying for the federal free and reduced-price lunch
program, and the percentage of first-time recipients of
educational scholarships who were enrolled in a public school
uring the previous year.

. Enoure educational scholarships are not provided

for students to attend a school with paid staff or board

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nonbera, or relatives thereof, in conton with the scholarehip
granting ozganization

i, Ensure that scholarships are provided in a manner
that does not discriminate based on the gender, race, or
Gisability status of the scholarship applicant or his or her
parent.

are provided

 

ing school
so that the student can attend @ nonpublic school or a
nonfailing public school.

(2) Financial accountability standards.

44, ALL scholarship granting organizations shall
denonstrate their financial accountability by doing all of the

following:

 

1, Annually submitting to the Department of Revenue
a financial information report for the scholarship granting
organization that complies with unfforn financial accounting
standards established by the Departaent of Revenue and
conducted by a certified public accountant.

2. Having the auditor certify that the report is

free of material misstatenents.

 

b. All participating nonpublic schools shall
demonstrate finsncial viability, if they are to receive
donations of fifty thousand dollars ($50,000) or more during

the school year, by doing either of the following:

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1, Filing with the scholarship granting ozganization
before the start of the school year a surety bond payable to
the scholarship granting organization in an amount equal to
the aggregate amount of contributions expected to be received
during the school year.

2, Filing with the acholership granting organization
before the start of the school year financial information that
demonstrates the financial viability of the participating
nonpublic school.

(©) (2) Each scholarship granting organization shall
collect written verification from participating nonpublic |
schools that accept its educational scholarship students that
those schools do all of the following:

a. Comply with all health and safety lews or codes

that otherwise apply to nonpublic schools.

 

B. Hold a valid occupancy permit if required by the
municipality.

e+ Certify compliance with nondiserimination
policies set forth sn 42 usc 1981.

¢. Conduct criminal background checks on employees

and then do alt

 

of the following:
1, Exclude from employment any person not permitted
by state law to work in a public school.
2, Exclude trom employment any person who may

Yeasonably pose a threat to the safety of students.

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(2) Acadente accountability standards. There shall

 

be sufficient information about the academic impact

ede

 

jonal scholarship tax crodite have on participating
students in order to allow parents and taxpayers to measure
the achievenents of the tax credit scholarship progran, and
therefore:

4a, Bach scholarship granting organization shall
ensure that partiéipating achools that accept its educational
scholarship shall do all of the following:

1, Annually adzinister either the state achievement

 

teste or nationally recognized norm-referenced tests that

 

meastre learning gains in math and language arte to a

 

participating students in grades that require testing under
the accountability testing laws of the state for public
schools.

2, Allow costs of the testing requirements to be
covered by the educationel scholarships distributed by the
scholarship granting organizations.

3. Provide the parents of each student who was
vested with a copy of the results of the tests on an annual
basis, beginning with the firet year of testing.

4, Provide the test results to the Department of
Revenue or an organization chosen by the state on an annual

basis, beginning with

 

le first year of testing.

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5. Report student information that allows the state

to aggregate data by grade lev

 

Gender, family income Level,
and race.

6. Provide graduation rates of those students
benefitting from education scholarships to the Department of
Revenue ox an organization chosen by the state in a nanner
consistent with nationally recognized standards.

D, The Department of Revenue or an organization
chosen by the Department of Revenue shall do ail of the

followin:

 

2, Ensure compliance with all student privacy lews.

2. Collect all test result:

 

 

3. Provide the test results and associated learning
gains to the public via a state website after the third year
of test and test-related data collection. The findings shal
bbe aggregated by the grade level, gender, family incone Level,
number of years of participation in the tax credit scholarship
progran, and race of the student.

(4) (1) The Departnent of Revenue ehall adopt rules
land procedures consistent with this section as necessary to
Amplement the tax credit scholarship progran.

(2) The Department of Revenue shall provide «
standardized format for a receipt to bo issued by
scholarship granting organization to a taxpayer to indicate

the value of a contribution received. The Department of

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Revenue shall require a taxpayer to provide a copy of the
Fecoipt when claining the tax eredit pursuant to this section,

(3) The Dopartnent of Revenue shall provide a
standardized format for a scholarship granting organization to
Feport the information required in paragraph j. of subdivision
(2) of subsection @).

(4) the Department of Revenue nay conduct either a
Hinancial review or audit of a scholarship granting
organization if possessing evidence of fraud.

(5) the Department of Revenue may bar @ scholarship
granting organization from participating in the tax credit

scholarship program if the Department of Revenue establishes

 

that the scholarship granting organization has intentionally
and substantially failed to comply with the requireents in
subsection (b) oF aubsection {c)

(6) TE the Departs

 

ent of Revenue decides to bar a
scholarship granting organization from the tax credit
scholarship progras, the Department of Revenue shall notify
affocted educational scholarship students and their parents of
the decision as quickly as possible.

(7) The’ Department of Revenue shall publish and
routinely update, on the website of the department, a List of
scholarsh{p granting organizations in the state, by county.

(e) (2) AL schools participating in the tax credit

scholarship program shall be required to operate in Alabana.

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(2) ALL schools participating in the tax credit
‘scholarship progran shalt comply with all state levs that
apply to public schools regarding criminal background checks
for employees and exclude from employment any person not
Permitted by state law to work in a public school.

(2) The tax credit provided in this section may be
first claimed for the 2013 tax year.

Section 10. the provisions of this act are
severable, If any part of this act is declared invalid or
unconstitutional, that declaration shail not affect the part

which renaine.

 

Section 1, This act shall become effective
Amediately following its passage and approval by the

Governor, oF its ot

 

rwise beconing law.

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APPENDIX C

HB 658 (amending HB 84) |
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ENROLLED, An Act,
‘To amend Sections 4, 5, 8, and 9 of the Alabama

Accountability Act of 2013, Act 2013-64, 2013 Regular Session
(acta 2013); to revise definitions; to further Linit what may
bbe contained in a school flexibility contracts to provide for
the calculation of tax credits for parents of students
enrolled in or assigned to attend failing school; to provide
for the retention of certain funds by a failing schools to
provide for treatment of students with disabilities; to

provide no peblic of nonpublic school would be required to

 

enroll @ students to prohibit discrimination; to revise the

 

tax credit for corporate donors to scholarship prograns; to
provide for retroactive effect; and to further provide for the
manner of payment of scholarships.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Sections 4, 5, 8, and 9 of the Alabama
Accountability Act of 2013, Act 2013-64, 2013 Regular Session
(Acts 2013), aze amended to read as follows:

"section 4. For the puzposes of this act, the
following terms shall have the following meanings:

(2) EDUCATIONAL SCHOLARSHIPS. Grants nade by @

scholarship aranting csganization co-emy-qustifying-sehoct to
cover all or part of the tuition and mandatory fees charged by

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a atthe gunlitying school for to an eligible student
receiving a scholarship.

(2) ELIGIBLE STUDENT. A student who satisfies all
of the following:

sa. 18 a neaber of a household whose total annual
Ancona the year before he or she receives an educational
scholarship under this progran does not exceed an amount equa

to 150 percent of the medien household income. Once = student

 

receives an educational scholarship under thie program, the
student shall renain eligible regardless of household income
until the student graduates high school or reaches 19 years of
age

mp, Was eligible to attend a public school in the
preceding semester or {s starting school in Alabama for the
first tine.

tc. Resides in Alabama while receiving an
educational scholarship.

113) FAILING SCHOOL. A public K-12 school (4) that
is labeled as persistently low-performing by the State

Department of Education, a the then most recent United States

 

Departnent of Education School Improvement Grant application:
GL) that de designated os a falling school by the state

50 dent of Education: oF ‘chat

xclysively serve a 1 population of students and, unti

June 1, 2017, #2 bas beon listed three or wore tines during

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the then-most recent six yeare in the lowest ten six percent
of public K-12 schools on the state standardized assessment in

reading and math or, on or after June 1, 2017,7-thet has,

during the then-most recent three vears, earned at least one o
grade of "F* or, durin: hen-most recent four years

 

 

earned at least three consecutive grades of "D" on the schoo}

arading system developed pursuant to Section 16-6C-2, Code of
Rlebana 1975 ;-er-that-te—destganted-efatting-scheot bythe:

atete Seperintendent-oftdventton. In the event sufficient

rules required to implenent the arading system provided for by
fection 16-6-2, Code of Alabama 1975, have not besn
mploented pursuant to the AL Adnintotrative Procedure
Act_in tine to provide # sufficient record to implement this
subdivision by June 1, 2017, then a failing school shall be a
choo! that has been Listed in the Loves: 10 percent of

Ke12 schools in the state standardized assessment in readin
and

(4) FLSMIBILITY CONTRACT. A school flexibility
contract between the local achool system and the State Board

of Bducation wherein a local school system may apply for

 

programmatic flexibility or budgetary flexibility, or both,
from state laws, regulations, and policies, including
regulations and policies promulgated by the state Board of

Bducation and the State Department of Education.

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(5) INNOVATION PLAN. The request of a local school
system for flexibility and plan for annual accountability

measures and five-year targets for all participating schools

 

within the school syste

(6) LOCKL BOARD OF EDUCATION. A city or county
board of education that exercises managenent and control of @
local school aysten pursuant to state law.

(7) LOCAL SCHOOL SYSTEM. A public agency that
establishes and supervises one or ore public schools within
its geographical linits pursuant to state Law.

\ (6) LOW-INCOME ELIGIALE STUDENT. A student of a
family with incone equal to or less than two tines the federal
poverty level.

(9) NONPUBLIC SCHOOL. Aay nonpublic ox private
achool, including parochial schools, not under the
jurisdiction of the State Superintendent of Education and the
state Board of Education, providing educational services to
children. A nonpublic school is accredited by a state
recognized accrediting agency that provides education to
clenentazy or secondary, or both, students and has notified
the state Department of Revenue of its intention to
partictpate in the scholarship program and comply with the
requirements of the scholarship program. A nonpublic school

does not include hone schooling.

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(10) PARENT. The parent or legal guardian of &

student, with authority to act on behalf of the student, who

 

Jing the student as a dependent on his or her federst

Alabama state income tax return.
(11) QUALIFYING SCHOOL. Either a public school

outside of the resident school district that is not considered
failing under either state or federal standards or any
nonpublic school as defined in this act or that satisfies the
compulsory attendance requirements provided in Section

16

 

1, Code of Alabana 1975. A qualified nonpublic school
shall be accredited by one of the six regional accrediting
agenctes or, if not so accredited, shati-catiety that
satisfies all of the following conditions:

wa. Be Has boen in existence for at least three

 

 

year:
Mp, fave Has daily attendance of at least 85 percent
over a two-year period.

"c. Have flag a minimun 180-dsy school year, or its

 

hourly equivalent.

a. Have Has a day length of at least six and

 

one-half hours.
ve, Require Reauires all otudents to take the
Stanford Achievenent Test, or its equivalent.
wf, Requize Roguizes 211 candidates for graduation
to take the Anerican Collage Test before graduation.

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ng. Require Requizes students in high schoo! in
grades nine through 12 to earn a minimum of 24 Carnegie
credits before graduating, including 16 credite in core
subjects and additional requirements in health and physical
‘education, fine arts, computer studies, and foreign language.

hn, Net Does not subject special education students
to the sane testing or curricular requirenents as regular
education students if it 1s not required in the individual
plan for the student.

"4, Maintain Haintaing a current website that
describes the school and the instructional program of the
school.

J, annually e#ftem affirms on forms prescribed by
the scholarship granting organization and the department ite
status financtally and academically end provide other relative
infornation as required by the scholarship granting

otherwise required in this act.

 

organization or
(22) SCHOLARSHIP GRANTING ORGANIZATION. An.

organization that provides or is approved to provide

 

educational scholarships to students attending qualifying

schools of their parents’ choice.

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"section 5. (a) Pursuant

 

this act, to be
considered as an innovative school system, 4 local school

systen shall successfully comply with the requirenents and

 

procedures set forth by the State Department of Education
regarding school flexibility contracts, which include, but are

not Linited tot

 

(2) Submission £0 the State Department of Education
of @ letter of intent to pursue @ school flexibility contract.

"(2) Submission to the State Department of Education
of a resolution adopted by the local board of education
supporting the intént of the local school ayatem to pursue 2
‘school flexibiiiey contract.

(3) Submission to the State Department of Education
of a document of assurance stating that the local board of
‘education shall provide consistency in leadership and =
comitment to state standards, assessments, and acadente
igor.

(4) subnission to the State Board of Education of
resolution adopted by the local board of education supporting
the flexibility contract proposal and the anticipated timeline
fof the local school system.

*(b) Pursuant to State Board of Education rules,
each local school system shall provide an opportunity for full

Giscuseion and public input, including a public hearing,

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before submitting, a school flexibility contract propo:

 

the State Board of Education.
"(e) A local school system shall ensure that its

school flexibility contract proposal and innovation plan is

 

sily accessible to the general public on the website of the

Local schoo) syeten.

{g) Mo school flexibility contract proposal
innovation plan shall be used to allow the collection or
t f data in 9 manner that violates the pri

ints of any student Lo

"section 8. (a) To provide educational flexibility
and state accountability for students in failing schools;
(1) For tax years beginning on and after January 1,

2

 

an Alabama incone tax credit is nade available to the
parent of a student enrolled in or assigned to attend a
failing school to help offeet the cost of transferring the
student to a nonfailing public school oF nonpublic school of

the parent's choice, The income tax credit shall be an amount

 

‘equal to 80 percent of the average annual state cost of

 

attendance for a public K-12 student during the applicable tax
year of the actual cost of attending s nonfailing public

school or nonpublic school, whichever ts less. The actual cost

atte jonfei}ing public schoo! snpub}ic school
shall be celculated by adding together any tuition amounts 0}
datory fees charged by the school to the student ase

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sont £ enrolling or of naintal prolinent e
yL. The average annval_stal fatter ea

bic K-12 student shall ated by dividing the stati

fonds appropriated to the Foundation Program pursuant to

Section 16-13-231 (9) che total statewide number of

pile in average daily mexbership during the 20

cholastic days follovina uabor Day of the ing echos

fear, For each student who was en: and attended 9

t aches evious semester whose parent receives ai
ora tax credit under sion, an amount equal to 20

percent of the average annual state cost of attendance for
olic K-12 student during the applicable tax year shall

allocated, for as long as the varent receives the tax credit,
ko the failing school from vhich the student transferred if

‘the student transfers to and remains enrolled in a nonpublic
school. \ch allocetion shall be made in the event the
student transfers to or enrolls in a nenfatling public schos
‘The Department of Education shall determine the best method of
anguring that the fozeaoing allocation provisions are proper)
Anplenented. A parent 18 allowed a credit against incone tax
for each taxable year under the terms established in this
section, T£ income taxes eved by the auch a parent are less
than the total credit alloved under this subsection, the

taxpayer shall be entitled to a refund or rebate, es the case

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nay be, equl to the balance of the unused credit with respect,
to that taxable year.

(2) Any income tax credit dus a parent under this
section shall be granted or issued to the perent only upon his
or her making application therefor, at such time and in such
manner as may be prescribed from tine to tine by the
Department of Revenue. The application process shall include,
but not be Limited to, certification by the parent that the
student was enrolled in or was assigned to attend a failing
school, certification by the parent that the student was

subsequently transferred to, and was enrolled and attended, a

 

nonfailing public school or nonpublic school of the parent's
choice, and proof, satisfactory to the Department of Revenue,
of the actual cost of attendance for the student at the

nonfailing public school or nonpublic school. For purposes

‘the tax credit authorized by this section, costs of sttendance
not include any such costs incurred for en academic year

prior to the 2013-2014 academic year. The Department of
Revenue shall also prescribe the various methods by which

Ancone tax credits are to be issued to taxpayers. Income tax
credite authorized by this section shall be paid out of sales
tax collections made to the Education Trust Fund, and set

aside by th

 

Comptroller in the Failing Seheet Schools Income

 

‘tax Credit Account created in subsection (c), in the sane

manner as refunds of income tax otherwise provided by lew, and

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there is hereby appropriated therefrom, for such purpose, 30

much ae may be necessary to annt

 

11y pay the Incone tax
credite provided by this section.

(3) An, application for an incone tax credit
authorized by this section shall be filed with the Department
of Revenue within the tine prescribed for filing petitions for
refund under Section 40-2A-7, Code of Alebana 1975.

(4) the Department of Revenue shall promulgate
reasonable rules to effectuate the intent of this section

(@) (1) the pare
ft and receive an income tex credit porsuant to this

of a public school student may

 

req!

 

section to reimburse the parent for costs associated with
transferring the student from a failing school to a nonfatling
public school or nonpublic school of the parent's choice, in
any of the following eircunstences:

a, By assigned school attendance area, if the
student spent the prior school year in attendance at a failing

school and the attendance of the student occurred during &

 

school year in which the designation was in effect.
sD. the student was in attendance elsewhere in the
Alabana public school system and was assigned to a failing
school for the next school year.
wc. the student was notified that he or she was

assigned to @ failing school for the next school year.

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(2) Tis section does not apply to a student vio te

enrolled in the Departnent of Youth Services School District.
(3) For the purposes of continuity of educational

choice, the tax credit shall be available to parents for those

grade levels of the failing school from which the

 

dent
transferred. The parent of a student who transfers from a
failing school may receive incone tax credits for those grade
levels enrolled ia and attended in the nonfailing public
‘school or nonpublic school of the parent's choice transferred
to that were included in the failing school from which the
student transferred, whether or not the failing school becomes
a nonfailing sehool during these years. The parent of euch a
student shall no longer be eligible for come tox credit
reteratehis or her originai-ioca-scheciaysten of
sttemdance-whea-he-or-she after the student completes the
highest grade level An which he or she would ise
been enrolled at of the failing school trensferred-fromimthe
nontatting pubtte schoo! -or-nonpubite-school-of the parent's
choice. Notwithstanding the foregoing, as long a9 the student

 

remaing enrolled 4p or asst attend a failing school =f
the parent may again transfer the student to @ nonfailing

public school of nonpublic echool of the parent's choice and
request and receive an income tax credit as provided in this

section.

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"(4) A local school system, for each student
enrolled in or aczigned to @ failing school, shall do all of

the fotlowing:

 

|. Timely notify the parent of the student of all
options available under this section as soon as the school of
attendance 1s designated as a failing school.

"b. offer the parent of the student an opportunity

te enroll the student in another public school within thé

 

Joca? school system that is not a failing school or a failing

scheol to which the student has been assigned.

 

(5) The parent of a student enrolled in or assigned
to a school that has been designated as a failing school, a=
aeceiternative-to-paregrapir br of subdivision ttt-may-chesse
gorenroti-the-student-in-end-transport—the-studentte-s who

decides to transfer the student to a nonfailing public schoo}

 

shall fizet sttenpt to on pe student in a nonfailin
wwblic school within the Jocal system in which the
stud already eprolled or assigned to attend before

‘attempting to enroll the student in a nonfailing public school
that has available space in any other toca school system in
the staterend-thet A local school system iswittingto may
accept the student on whatever terms and conditions the systen
establishes and report the student for purposes of the local

school system's funding purevant to the Foundation Program.

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"(6) For students in the local school system who are
participating in the tax eredit program, the local school
system shail provide lecations and times to take all statewide
assesenents required by law.

"(1) Students with disabilities who are eligibie to
receive services from the locsl school systen under federal or
state lav, and who participate in the tox credit program,
romain eligible to receive services from the local school
system as provided by federal or state law.

(8) If a parent requeste-thetthe-student-be
enrotied enrolls a student in a nonfailing public school
within the same local school system, and that system provides

tation services for other enrolled students,
exansportation costs to the nonfailing public school shall be
the responsibility of the local schoo: system, Local schoo
systens may negotiate transportation options vith a parent to

ne system costs, If a parent enrol: dent ina

 

nonpublic 1 oF in a nonfailing public school wi
another local school system, regardless of whether that system
ro \sportation services for other enrolled students,
transportation of the student shall be the responsibility of
‘the parent.

(9) The state Department of Education shall
promulgate reasonsble rules to effectuate the intent of this

gubsection, Rules shall include penalties for noncompliance.

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“{e) Tere is created within the Education Trust
Fund @ separate account naned the Failing Schools Income Tax
Credit Account. The Commissioner of Revenue shall exmoetty:
certify to the Comptroller the anount of incone tax credits
due to parents under this section and the Comptroller shall
transfer into the Failing Schools Incone Tax Credit Account
only the anount from sales tax revenues within the Education
trust Fond that 1s sufficient for the Cepartnent of Revenue to
use to cover the incone tax credits for the applicable tax
year. The Connissicner of Revenue shail enaesity distribute
tthe funds in the Failing Schools Income Tax Credit Account to

parents pursuant to this section,

{4) (0) Nothing in this section oF act shall. be
construed to force any public school, school system, of school
distetet or any nonpublic school evatem, or schoo!
distelct to enroll any student.
12) A public sel chool_evetem, or echo:

Mistrict of any nonpublic school, school system, of school
Ere ay develop the tert ond conditions under which it
will s1low a student why ‘ent receives an incon tax

1 purguant to thie section enrolled, but uch terms
and conditions may net discriminate on the basis o! race
render, reliaion, color, disability or ethnicity of
she student or of pete

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"{2) Nothing in thie section shali be construed to

horize the of or superse hority of an
court hat applies to the school, school evsten,
ors ict, specifically any federal court order

clated to the desearecation of the system's
student population.

"section 9. (a) (1) A taxpayer who files a state
income tax return and is not a dependent of another taxpayer
may claim a credit for a contribution made to a scholarship
granting organization.

(2) The tax credit nay be claimed by an individual

taxpayer or a married couple filing jointly in an amount equal

 

to the total contributions made to a scholarship granting
organization for educational scholarships during the taxable
year for which the credit is claimed up to $0 percent of the
tax Mability of the taxpayer, not to exceed seven thousand
Hive hundred dollars ($7,500) per texpayer or married couple
filing Jointly.

"(3) me tax credst may be clained by a corporate
taxpayer in an amount equal to $8 100 percent of the total
contributions nade to a scholarship granting organization for
educational scholarships during the taxable year for which the
credit is clained up to 50 percent of the tax Liability of the

taxpayer. The cumulative amount of tax credits issued pursuant

 

to subdivision (2) and this subdivision shall not exceed

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twenty-five million dollars ($25,000,000) annually. The
Departnent of Revenue shall develop a procedure to ensure that

this cap 4g not exceeded and shall also prescribe the various

 

nethods by which these credits are to be issued.
"(4) A conporate taxpayer, an individual taxpayer,
or a married couple filing jointly may carry forvard a tax
credit under the tax credit scholarship program for thre
years.
%() (1) Adninistrative accountability standards. ALL
scholarship granting organizations shall do all of the

following:
a, Notify the Department of Revenve of their intent

to provide educational scholarships.

 

p, Demonstrate to the Department of Revenve that
they have boon granted exemption from the federal income tax
fas on organization described in Section $01 (6) (3) of the
Internal Revense Code.

ve. distetbute periedic educational scholarship
paynents as checks made out and mailed to the school where the
student 4s enrolled.

td, Provide a Department of Revenue approved receipt
to taxpayers for contributions made to the scholarship
granting oxgantzation.

Engure that at least 95 percent of their revenue

  

from donations ig spent on educational scholarships, and that

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ail revenue from interest or investments is spent on
educational scholarships.

"£, Spend each year a portion of their expenditures
en educational scholarships for low-income eligible students
equal to the percentage of lov-incone eligible students in the
county where the scholarship granting ozganization expends the
majority of its educational scholarships.

vg. Ensure that at least 75 pezcent of first-time
recipients of educational scholarships were not continuously
enrolled in 2 private school during the previous year.

"n. Cooperate with the Department of Revenue to
conduct criminal background checks on ail of theiz enployess
land board nenbere and exclude fron enploynent ox governance
any individual vho may reasonably pose a risk to the
appropriate use of contributed funds.

+ Engure thet educational scholarships are

 

portable during the school year and can be used at any
‘qualifying school that accepts the eligible student according
to the wishes of the parent. If a student transfers to another
‘qualifying school during a school year, the educational
scholarship anount may be prorated.

", Publicly report to the Department of Revenue by

 

June 1 of each year all of the following information prepared

by a certified public accountant regarding their grants in the

previous calendar year:

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"L, the nane and address of the scholarship granting
organization.

"2, the total number and total dollar amount of
contributions received during the previous calendar year.

"3. the total number and total dollar amount of

 

‘educational scholarships awarded during the previous calendar
year, the total number and total doller anount of educational
scholarships avarded during the previous year for students
qualifying for the federal free and reduced-price Lunch
program, and the percentage of first-time recipients of
educational scholarships who were enrolled in a public school

during the previous year.

 

“x. Ensure educational scholarships are not provided
for atudonts to attend a school with paid staff or board
nenbers, of relatives thereof, in connon with the scholarship
granting organization.

|. Ensure that scholarships are provided in a

 

annex that does not discriminate based on the gender, race,

 

or disability status of the scholarship applicant or his oF

her parent.

   

|. Rnsure that educational scholarships are
provided only to students who would otherwise attend a failing
school so that the student can attend a nonpublic school or a

nonfailing public school. Provided, hovever, that am

 

acho funds unaccounted for on Septem! bof each

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roa 12 nade gvallable to low=incoy ble students to
defray the costs of atte a qualifying school, vhether or
not the student ie ass a faSing scho

‘n. Ensure that no donations are directly mde to
renee ifically designated scholarship reciptente,

(2) Financial accountability standards.

wa. ALL scholarship granting organizations shall
demonstrate their financial accountability by doing all of the
following

i, annually submitting to the Department of Revenve
a financial information report for the scholarship granting
organization that complies with uniform financial accounting
standards established by the Departnent of Revenue and
conducted by a certified public accountant.

"2, Having the auditor certify that the report is
free of material misstatements.

ny, Ani participating nonpublic schools shall

 

deronstrate financial viability, if they are to rec
donations of fifty thousand dollars ($50,000) or more during
the school year, by doing either of the following:

"1, Filing with the scholarship granting

organization before th

 

start of the school year a surety bond

 

payeble to the scholarship granting organization in an amount
equal to the aggregate amount of contributions expected to be

received during the school year.

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"2, Piling with the scholarship granting
organization before the start of the school year financial
Anformation that denonstrates the financial viability of the
participating nonpublic school.

‘"(c) (2) Each scholarship granting organization shal
collect written verification from participating nonpublic
schools that accept its educational scholarship students thet
‘those schools do all of the following:

a. Comply with all health and safety laws or codes
that otherwise apply to nonpublic schools.

*p, Hold a valid occupancy permit if required by the
monteipaliy.

ve. Certify complionce with nondiscrimination
policies set forth in 42 UsC 1981.

nd. Conduct eximinal background checks on employees
and then do ell of the following:

"1, Exclude from employment any person not permitted
by state law to work in @ public school.

"2. Exclude from employment any person who may

jonably pose a threat to the safety of students.

 

(2) acadente accountability standards. There shall

be sufficient information about the academic impact

 

‘educational acholership tax credits have on participating

students in order to allow parents and taxpayers to measure

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the achleverents of the tax credit scholarship program, and
therefore:

a, Bach scholarship granting organization shall
ensure that participating schools thet accept its educational
scholarship shall do all of the following:

1, Annually administer either the state achievenent

feferenced tests that

 

tests or nationally recognized norm~1
meacure learning gains in math and language arte to all
participating students in grades that require testing under
the accountability testing laws of the state for public
schools.

+2, Allow costs of the testing requirements to be
covered by the educational scholarships distributed by the
scholarship granting organizations.

%3, Provide the parents of each student who was
tested with a copy of the results of the teste on an annual
basis, beginning with the first’ year of testing.

4. Provide the test results to the Department of
Revenue orr-orgenizationchosex-by-the-stete on an annual
basis, beginning with the firet year of testing.

95, Report student information that allows the state
to aggregate data by grade level, gender, family income level,
and race.

g, Provide graduation rates ‘of those students

 

benefitting from education scholarships to the Departnei

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Revenue or an organization chosen by the state in a manner

consistent with nationally recognized standards.

"p. The Department of Revenue or an organization

chosen by the Department of Revenue shall do all of the

following:

1. Bnaure compliance with all student privacy laws.

"2, Collect all test results,

"3, Provide the test results and associated learning

gains to the public via a state website after the third year

of test and test-related data collection. The findings shall

be aggregated by the grade level, gender, family income level,

nunber of years of participation in the tax credit scholarship

program, and race of the student.

"(d) (1) ‘the Department of Revenue shail adopt rules

and procedures consistent with this section es nece

depienentthe tex-credit-scholershtp-progran.

 

ary te

(2) The Department of Revenue shall provide a

standardized format for a recoipt to be issued by a

scholarship granting organization to a taxpayer to indicate

tthe value of a contribution received. The Department of

Revenue shall require @ taxpayer to provide a copy of the

receipt when claiming the tex credit pursuant to this section,

(3) The Department of Revenue shall provide a

standardized format for a scholarship granting organization to

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report the information required in paragraph 3. of subdivision

(2) of subsection (b).

 

4) The Department of Revenve may conduct either a
financial review or audit of a scholarship granting
organization {f possessing evidence of fraud.

(5) The Departnent of Revenue may bar a scholarship
granting organization fron participating in the tax credit
scholarship progran Af the Depaztnent of Revenue establishes
that the scholarship granting organization has intentionally
and substantially failed to comply with the requirenente in
subsection (b) er subsection (c).

"(6) Tf the Department of Revenue decides to bar a
scholarship granting organization from the tax credit
scholarship program, the Departnent of Revenue shall notify
affected educational scholarship students and their parents of
the decision as quickly as possible.

"(7) ‘The Department of Revenue shall publish and

 

routinely update, on the website of tho department, a list of
scholarship granting organizations in the state, by county.
s(e) (2) ALL schools participating in the tax credit
scholarship program shall be requized to operate in Alabana.
(2) M11 schools participating in the tax credit
scholarship program shall comply with ali state las that

apply te public schools regarding criminal background checks

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for enployees and exclude from employment any person not
permitted by state law to work in @ public school.

*(f) The tax exedit provided in this section may be
first claimed for the 2013 tax yeer but may not be clained for
any tax year prior to the 2013 tax year.

‘“q)_(1) Mothing in this section shall be construed

poe any public ach st
ox any nonpublic school, school aysten, or school district to
‘enroll any student.

"421 A public school, system,
gisteict or any nonpublic school, school system, oF school
district may develop the terne ai yndor whit

will allow a student who receives a scholarship from 3
echolarehip granting organization pursuant to this section to

be enroll uct ditions may a
discriminate on the basis of the race, cender, religion
golor, disability status, or ato
the student's parent.

(3) Nothing in en! shall be construed to

authorize the violation of of supersede che authority of any

court ruling that at 2 choot
or school district, specifically any federel court order

related to the desegrecation of the local schoo} systen's
student popelation."

 

Page 25 Aprende © | Pagere

 

 
 

 

Section 2.

retroactive to March 14, 2013.
Section 3. Nothing in this act shell affect or

change the ethletic eligibility rules of student athletes
governed by the Alabama High School Athletic Association or

similar association.
Section 4, This act shall becone effective

innediately following ite passage and approval by the

Governor, of its otherwise becoming law.

Page 26

  

 

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APPENDIX D

Act No. 2014-346
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HUBOLLED, An Act,
To adopt and incorporate into the Code of Alabana
1975, those genezal and permanent lays of the state enacted
during the 2023 Reguiar Session as contained in the 2013
Cumulative Supplement to certain volumes of the code and 2013
Replacement Volumes 16R, 198, and 22; to initially adopt and
Ancorperate into the Code of Alabana 1975, 2013 Volume 22H

(Local Laws Greene - Jackson Counties) and to adopt and

 

incorporate inte the Code of Alabama 1975, 2013 Cumulative

Supplements to lecal law volumes; to make certain corrections

 

in the replacement volumes and certain volumes of the
cumulative supplement; to spectfy that this adoption and

incorporation constitute a continuous systematic codification

 

of the entire Code of Alabama 1975, and that this act is a law
that adopts a coder to declare that the Code Publisher has
certified it has discharged its duties regarding the

replacement volures; to expr

 

sly provide that this act doss
not affect any other 2014 session statutes; and to specify the
Gaties of the Secretary of State regarding the custody of
these cumulative supplements, replacement volunes, and initial
volume.
BE TT ENACTED BY THE LECTSLATURE OF ALABAMA:

Section 2. (a) Those general and permanent laws of

the state enacted during the 2013 Regular Session as contained

yege 1 Appendix | Paez

 
 

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aoa

in the 203 Cumulative Sugplenents to Volunes 3 to 16,
inclusive, Volunes 17 to 19, inclusive, Volumes 20 to 2A,
inclusive, and Volume 22 and the 2013 Replacement Volunes
16K, 19A, and 22 and the additions and deletions made by the
Code Commissioner for editorial purposes, as edited and
published by West Group, as the Code Publisher, which volunes
of the 2013 Cumulative Supplement and 2013 Replacement Volumes
are identified and authenticated by the Great Seal of the
State of Alabama placed upon the front and back of each of the

 

volunes of the cumulative supplenent and upon the first inside
page and the last inside page of the replacenent volune, are
adopted and incorporated into the Code of Alabama 1975.

(b) The following corrections are made to the 2019,
cumulative Supplenonts:

(2) Section 6-5-752, 2013 Cumlative Supplement to
Volume 5, page 160. To correct a publishing misprint in
subdivision (7), delete the words "RESPONSE PERIOD." in the
definition and replace it with "REPOSE PERIOD."

(2) Section 12-19-91, 2012 Replacenent Volume 118,
page 198, to correct a publishing error which resulted in the
inadvertent deletion of language in subdivision (1) of
subsection (c), at the end of the subdivision after “notice of
appeal" restore the following:

+$100.00

 

Aprende | Pages

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e402

(3) section 12-25-32, 2012 Replacement Volume 118,
page 707, to correct an inteznal reference in subdivision (7),
to reflect the renunbering of the subdivisions in this section
tn Aot 2012-472, after the word "subdtvieton" delete *(32)"
and insert the following:

aa)

(4) Section 23-1-181, 2023 Comblative Supplennt to
Volume 15, pages 19 and 20, to renumber various inteznal
citations to code sections that have been renumbered and to
delete references to sections that have been repealed to
conform with the repeal and replacement of various sections in
itle 40 of the code in act 2011-565:

In subdivision (4) of subsection (a), delete
“Division 2 of Agticle 2 of Chapter 17 of Title 40" and
replace it with "Section 40-17-359"

tn paragraph a. of subdivision (5) of subsection
(a), delete "Section 40-17-21, a8 amended, and replace {=
with "mubdivision (1) of subsection (a) of Section 40-17-3265"

In subdivision (6) ef subsection (a) after "less any
refunds of proceeds pursuent to the provisions of" delete
*article 3 of" and after "Title 40" delete ", or pursuant to
the provisions of either of Divisions 3 and 4 of Article 2 of

chapter 17"

Page 3 ‘reanete 0 |

 

 
 

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wneo2

In subdivision (7) of subsection (a), delete
“section 40-17-72" and replace it with "subsection (c) of
Section 40-17-359"

In paragraph a, of subdivision (3) of subsection
(b), delete "article 1 of Chapter 17 of Title 40" and replace
it with "subdivision (2) of subsection (a) of Section
40-27-325"

(5) In Section 27-4-2, 2013 Cumulative Supplenent to
Volume 16, page 17, to correct a publishing error which
resulted in the inadvertent deletion of paragraph d. of
subdivision (1) of subsection (a), on the Line after paragraph
c., restore the following language:

d. Reinstatement fe s+ +500

 

 

(6) Section 27-44-13, 2007 Replacement Volume 16,

page 896, to renumber an internal citation to reflect the

 

rolettering of Section 27-44-9 in Act 2012-319, in subsection
(a) roplace “Section 27-44-9(g)" with "Section 27-44-9(n)".
(7) In Chapter 9B of Title 36 comprised of Sections
38-9E-1 to 38-95-12, inclusive, 2013 Cumulative Supplenent,
pages 13 to 18, inclusive, to redesignate Chapter 9B as
Article 9 of Chapter 6 of Title 13A and to renusber Sections
38-9E-1 to 38-9E-12, inclusive, as follows: Section 38-9E-1 as

1BA-6-190; Section 38-9E-2 as 13A-6-191; Section 38-92-

 

3, as
19A-6-192) Section 38-98-4 as 19A-6-193; Section 30-9E-5 as
22A-6-1947 Section 38-98-6 as 13A-6-195; Section 36-9E-7 as

Page Append | Pages

 
 

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402

1BA-6-196; Section 38-92-8 as 13A-6-197; Section 38-9E-9 as
13A+6-1987 Section 38-92-10 as 13A-6-199; Section 38-96-11 as
23R-6-200; and Section 38-9B-12 as 13A-6-202.

(8) Section 40-13-6, 2013 Cumelative Supplement to
Volume 21, page 155, to correct a clerical error and reference
the intended subsection and subdivision, in the first sentence

of subdiviaion (2) of subsection (e), replace the language

 

“gubsection (c) (1)" with "subdivision (1)"
Section 2, Those local and permanent laws of the
state previously enacted and contained in initial 2013 Volume

22H (Local Laws Greene ~ Jackson Counties) and the local and

 

permanent avs pertaining to various counties enacted during
the 2012 Regular Sesion as contained in the 2013 Cumulative
Supplement to Volunes 22B, 22C, 22D, 228, 22F, and 226 and the
additions and deletions made by the Code Commissioner for
editorial purposes, as edited snd published by West Group, as
the Code Publisher, which volunes of the 2013 Cumulative
Supplement are identified and authenticated by the Great Seal
of the State of Alabama placed upon the front and back of each
of the volumes of the cumulative supplement, are adopted and
incorporated into the Code of Alabama 1975.

Section 3. The adoption and incorporation of the
supplenents and replacement volumes specified in this act
shall constitute a continuous systenatic codification of the

entire Code of Alabama 1975, for purposes of Section 85 of the

page 5 Arpandie 0 | Pages

 
 

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do2

official Recomptlation of the Constitution of Alabama of 1901,
as anended. This act is a law that adopts a code for the
puzposes of Section 45 of the Official Reconpilation of the
Constitution of Alabana of 1901, as amended.

Section 4. It is declared that West Group, as the
code Publisher, has certified that it has discharged its
duties and responsibilities to edit and publish 2013
Replacement Volumes 26A, 198, and 22 of the Code of Alabama
1875, by combining the material in the previous bound volumes
with the material contained in the cumulative supplenent
without making substantive changes, but making, under the
supervision and pursuant to the direction of the Code
Commissioner, nonsubstantive changes and corrections as may
have resulted fron changes in reference nunbers, ‘changes of
anes and titles of governmental departments, agencies, and
officers, typographical ezrors, grammatical changes, and
misspellings.

Section 5. The adoption of this act shall not
repeal, supersede, amend, or in any other way affect any

oe

 

(te enacted into law during any 2014 session of the
Legislature.

Section 6, Upon passage and approval of this act,
the duly authenticated volumes of the 2013 Cumvlative |
Supplement and the 2013 Replacement Volunes shall be

transmitted to the Secretazy of State, who shall file the

 

Page 6

 
 

10

Bto2

volunes of the supplements and the replacement volunes in that
office. The volunes of the supplements and replacenent volunes
shall not be renoved from the office of the Secretary of

State, but the Secretary of State, upon request, under prop

 

certificate and seal of that office, shall certify any part or

 

parts thereof upon payrent of the fee specified by law for
similar services.

Section 7. This act shall becone effective
innediately following its passage and approval by the

Governor, or ite otherwise becoming law.

 

page 7 Appenctx 0 | Pogo