73 The Alabama Lawyer 366 (2012). Legislative Wrap-Up.

• Author: Othni J. Lathram

Alabama Bar Journal

2012.

73 The Alabama Lawyer 366 (2012).

Legislative Wrap-Up

Legislative Wrap-UpOthni J. Lathramolathram@ali.state.al.us

Paul DeMarco

Constitutional Revision

On November 6, 2012 the citizens of the State of Alabama will have a historic opportunity to amend Article XII and Article XIII of the Alabama Constitution. This opportunity is notable not only because it significantly improves the portions of the Alabama Constitution which relate to banking and corporations, but, more importantly, it will provide momentum to the Alabama Constitution Commission's effort to reshape the constitution.

As more fully discussed in this column in January 2012(fn1), the legislature created the Constitution Revision Commission in 2011. The Commission is charged with leading the effort to revise the Alabama Constitution on an article-by-article basis. This approach is the only mechanism available to the legislature.(fn2)

The article-by-article approach has been successful twice before this. In 1973, Article VI, relating to the judiciary, was revised in an effort led by then Chief Justice Howell Heflin. This approach was followed again in 1996 when Representative Jack Venable led the effort to revise Article VIII, relating to suffrage and elections.

The endeavor to revise Article XII and Article XIII began in 2007, with proposed revised articles being introduced in the legislature each session since. The revisions actually passed one of the houses of the legislature on numerous occasions, but could not get through both houses until 2012. With the installation of the Commission, the effort was re-energized. After some minor tweaking of the proposed revisions to these articles, the Commission recommended their passage and the legislature responded with enormous support by passing both articles with near unanimous votes.

Passage by the legislature of these articles is an important step, but more important is the vote of the people which will occur November 6, 2012. In order for these revised articles to take effect, they must be adopted by the affirmative vote of the citizens of our state. The first step in the process took place June Sth when Secretary of State Beth Chapman certified the proposed constitutional amendments which will appear on the November 6th ballot. That certification placed these revisions as Statewide Amendment 9 and Statewide Amendment 10.

The changes proposed in these two revisions are viewed as non-controversial. They do not in any way affect taxes or property rights. Instead, they update antiquated language, repeal provisions that are no longer necessary and consolidate and streamline the remaining provisions.

Amendment 9-Article XII

Article XII of the Alabama Constitution deals with the governance of corporations. The article is divided into three sections: Municipal Corporations, Private Corporations and Railroads and Canals. The municipal corporations portions of the article are unaffected by the proposed revisions.

The portions of the current Article XII which relate to private corporations and railroads and canals are perfect examples of the antiquated and outdated provisions of the constitution. They provide a glimpse of a time when the corporation was the only type of statutory entity and corporate regulation was predominately the governance of railroads. The current Article includes antitrust provisions which predate federal antitrust laws, deal with the use of telegraph lines and one of the sections became moot by its own terms 12 months after ratification.

In today's Alabama, there are a dozen statutory entity types. The revised Article XII would ensure that the governance of these 12 entity types would be more uniform. The regulation of these entity types is governed by the Business and Nonprofit Entity Code contained in Title 10A of the Alabama Code. Therefore, there is no longer any need to regulate corporations via the constitution. Many of these provisions are wholly...