Daily Legislative Update

Monday, March 9, 2009
57^th Day of the 87^th General Assembly

*  *  *  *  *  CALLS TO ACTION  *  *  *  *  *

MANUFACTURERS SALES TAX EXEMPTION FOR ENERGY USAGE

HB 1624 by Rep. David Dunn would provide a sales tax exemption for all fuel and energy used by businesses in the manufacturing process. We have not yet seen a revenue impact on this bill but we expect it will be over $100 million. We have not found any appetite in this session to pass a bill this broad. Therefore, this week we must turn our attention to seeking a further reduction in the sales taxes paid on electricity and natural gas by manufacturers in NAICS codes 31, 32 and 33. HB 1624 will be amended or a new bill filed to reflect a reduction that could be passed in this session. Your contacts have helped us get to this point, so please continue to make contact with your state legislators and encourage them to support a reduction in the sales taxes paid by manufacturers on their energy costs.

POPULAR VOTE FOR U.S. PRESIDENT

HB 1339 by Rep. Eddie Cooper and Sen. Terry Smith is on tomorrow’s agenda in the Senate State Agencies and Governmental Affairs Committee agenda. This bill passed the House on February 25 by a vote of 56 to 43 with one present (Visit www.arkleg.state.ar.us to see how your Representative voted). It would require Arkansas’s delegation of presidential electors in a presidential election to be appointed based on the nationwide popular vote total, rather than the popular vote in Arkansas. We believe that the loss of the electoral voting system would greatly reduce Arkansas’s significance in electing the President of the United States . Our population would be too small to matter to the campaigns, which would focus on the large population centers across the country. We believe our nation’s founders provided small population states like Arkansas a relevant and necessary voice in the presidential elections when they created the Electoral College and it is in Arkansas’s best interest to not change the system. The State Chamber/AIA opposes this bill and is very concerned about the political momentum it seems to have developed.  PLEASE CALL YOUR STATE SENATOR AND URGE THEM TO VOTE AGAINST HB 1339.

TODAY AT THE CAPITOL

House convenes at 1:30 p.m.

Senate convenes at 1:30 p.m.

Committee Meetings:

JOINT

HOUSE

None listed.

SENATE

ISSUES

WORKERS’ COMPENSATION

HB 1362, the agreed workers’ compensation bill between the State Chamber/AIA and the AFL-CIO, will be signed by Governor Beebe today.

HB 1403 by Rep. John Edwards, which is now a part of the agreement between the AFL-CIO and the State Chamber/AIA, is on today’s Senate Calendar to formally adopt an amendment to add sponsors and will then be referred to the Senate Public Health, Welfare and Labor Committee. It would create the Uniform Emergency Volunteer Health Practitioners Act allowing volunteer health practitioners registered and in good standing in their state to practice in Arkansas during an emergency proclamation. The bill would make the volunteer health practitioners state employees and extend state workers’ compensation benefits to the volunteer health practitioners. This bill was put forward by the Uniform Laws Committee of the Bar Association; the state workers’ comp trust agreed to the declaration of the volunteers as state employees and the AFL-CIO and State Chamber/AIA agreed to support the bill.

GRADUATED DRIVERS LICENSES

SB 309 by Sen. J. Jeffress and Rep. Shelby passed the House last week and is on today’s Senate Committee on Transportation, Technology and Legislative Affairs agenda to concur in a House amendment. The State Chamber/AIA supports this provision to reduce trauma in Arkansas.

STATE CHAMBER/AIA BILL TRACKING 

To date, the House has filed 1025 and the Senate has filed 863 bills.

The State Chamber/AIA is tracking 392 bills and resolutions. 

Today is the deadline for regular bill filings.

New bills added to the State Chamber/AIA tracking today:

Please visit our tracking site here for the complete, searchable list of bills being tracked. The full text of each bill is also available at the site.

THIS WEEK AT THE CAPITOL

Committee Meetings for Tuesday, March 10, 2009

JOINT

HOUSE

SENATE

ISSUES

OTHER STATE CHAMBER/AIA TAX ISSUES

HB 1179 by Rep. John Burris will be considered as a special order of business in the House Revenue and Taxation Committee tomorrow. This bill would reverse the sales tax sourcing rules changed in the 2007 session to keep Arkansas’s laws in line with the Streamlined Sales Tax Program (SSTP). This bill was a source of consternation for many businesses, difficult for some small businesses and has some cities concerned about lost revenue. However, we believe it is best to not change back. Most, if not all, businesses have made the necessary adjustments and would not benefit from changing back.  Also, a reversal of our laws would most likely take Arkansas out of compliance with SSTP requirements. The State Chamber/AIA opposes this bill.  

In addition to the sales tax reduction for manufacturers’ utility costs, the State Chamber/AIA has a package of four additional bills. However, we will not push these bills for consideration until progress is made on the sales tax exemption for manufacturing, which was set as an organizational priority prior to the session.

HB 1911 by Rep. Keith Ingram seeks an extension of the income tax net operating loss carry-forward period from five years to 15 years. It has been referred to the House Revenue and Taxation Committee

HB 1949 by Rep. Davy Carter seeks an extension of the time for businesses to file for a rebate of local sales taxes from six months to the standard three years. The rebate would be for amounts of local sales taxes paid in excess of the local sales tax caps that went away after the 2007 legislative session. We fear smaller businesses without full time accounting support will not know about this rebate until they meet with their tax advisor and that could be after the current six month deadline has expired. HB 1949 has also been referred to the House Revenue and Taxation Committee.

SB 769 by Sen. Larry Teague and co-sponsored by Rep. Keith Ingram proposes an act to amend the taxpayer bill of rights and provide uniform guidelines for the strict construction of tax exemptions, deductions or credits. It would also set the standard for review of administrative tax determinations on appeals. This bill awaits consideration in the Senate Revenue and Taxation Committee.

SB 770 by Sen. Teague and Rep. Ingram would clarify that partial replacement of manufacturing machinery and equipment that improve manufacturing efficiency, modernize existing machinery, or economically or physically expand an existing facility, including the machinery and equipment that act as a mold or die to determine the physical characteristics of a product, are exempt from the sales and use tax. It is also on the agenda in the Senate Revenue and Taxation Committee. 

In addition to our bill, HB 1624 described above in the call to action, Sen. Barbara Horn filed four bills last week that seek sales tax reductions for industry’s utility usage. Three seek a reduction only for specific industries and one would phase out the sales tax for manufactures over a period of time. All four have been referred to the Senate Revenue and Tax Committee. These bills are:

SB 832 provides a schedule for incremental reduction of sales and use tax on utilities used by wood manufacturers, beginning July 1, 2009.

SB 833 provides a schedule for incremental reduction of sales and use tax on utilities used by wood and agricultural manufacturers, beginning July 1, 2009.

SB 834 provides a schedule for incremental reduction of sales and use tax on utilities used by manufacturers, beginning July 1, 2009.

SB 835 provides a schedule for incremental reduction of sales and use tax on utilities used by agricultural businesses, beginning July 1, 2009. Defines agricultural business and defines utility to include gas, electricity, and liquefied petroleum gas.

CLIMATE CHANGE LEGISLATION

SB 584 by Sen. Shane Broadway authorizes the Development Finance Authority to issue the Energy Cost Savings Projects General Obligation Bonds, not to exceed $300,000,000, to finance energy cost savings contracts by state agencies for improvements to state buildings. It is on the Senate Insurance and Commerce Committee agenda.

HB 1663 by Rep. Kathy Webb would provide for the building and renovation of buildings owned by the state or institutions of higher education through sustainable, energy efficient methods. It is on the Joint Energy Committee agenda.

HB 1851 by Rep. Kathy Webb would include renewable energy resources as an integral part of its energy resource plan. It defines a “feed-in tariff” as a tariff that governs the purchase of energy from a renewable generation facility and is approved by the Arkansas Public Service Commission (APSC). It would require an electric public utility to purchase electricity produced by a renewable energy producer in the state at a rate establish by the APSC for a period not to exceed 20 years. It further requires the cost of necessary interconnection facilities be the exclusive responsibility of the renewable electric generation facility and allow for an electric company to recover the cost of a feed-in tariff and recover and earn a return on the investment costs for an electric system upgrade. HB 1851 is on the House Insurance and Commerce Committee agenda.

Additional bills addressing climate change and/or as a result of the Global Warming Commission’s work are expected to be filed today. We will provide a more thorough analysis in future updates.

EQUAL RIGHTS AMENDMENT

HJR 1014 by Rep. Lindsley Smith and SJR 12 by Sen. Sue Madison would ratify the proposed amendment to the United States Constitution guaranteeing equality of rights to women and authorize Congress to enforce by legislation those provisions. We are concerned about potential applications in the workplace. SJR 12 failed on a 4-4 vote in the Senate State Agencies and Governmental Affairs Committee last week, but remains on the agenda and the sponsor can bring the bill back up at any time. HJR 1014 is currently not listed on the agenda in the House State Agencies and Governmental Affairs Committee. 

UNEMPLOYMENT INSURANCE

HB 1478 by Rep. Mike Patterson was amended for the second time on Friday and has been re-referred to the Revenue and Taxation Committee for consideration in the form agreed to by the State Chamber/AIA and the AFL-CIO. It would authorize certain information to be shared between the Department of Workforce Services (DWS) and the Department of Finance and Administration.

SB 429 by Sen. Tracy Steele awaits an amendment to properly reflect an agreement between the State Chamber/AIA and the AFL-CIO. With the advice and consent of the State Chamber/AIA Unemployment Insurance Committee and the State Chamber/AIA Executive Committee we have agreed to an increase in the taxable wage base and labor agreed to treat discharges like quits for two years. This bill is being held until the impact of federal stimulus dollars is determined and for a meeting of the ESD Advisory Council on Friday.

WORKERS’ COMPENSATION

HB 1864 by Rick Green is a shell bill that has been referred to the House Insurance and Commerce Committee. The bill addresses transparency and accountability issues of the workers’ compensation self-insurer guaranty fund. It is not clear when this bill might be amended or considered. This bill will be opposed by the AFL-CIO and the State Chamber/AIA because it is not part of our agreement.

PHARMACY BENEFIT MANAGEMENT (PBM)

HB 1601 by Rep. Allen Maxwell and SB 460 Sen. Percy Malone are identical bills that require entities that are managers of pharmacy benefits plans for insurers, employers and certain other health care entities or health plans to itemize individual claims, disclosing the amount paid to a pharmacist, the identity of the pharmacist and the prescription number when the PBM seeks reimbursement or payment for services provided by the pharmacists. It also provides that a violation constitutes a deceptive and unconscionable trade practice under the Deceptive Trade Practices Act. Each bill has been presented in committee but neither has completed debate.

FOOD TAX

SB 88 by Sen. Bobby Glover would reduce the sales tax on food and food ingredients by 1%. This is a priority item for Governor Beebe. The bill remains on the House Revenue and Taxation Committee agenda and may be considered on March 12. 

WORKPLACE

HB 1552 by Rep. Lindsley Smith provides that employers shall provide unpaid break time each day to employees who need to express breast milk for her child in order to maintain milk supply, and to make a reasonable effort to provide a private and sanitary room for her to do so. It passed the House last week and has been referred to the Senate Public Health, Welfare and Labor Committee. The bill has been amended once, but a human resource professionals group is working on a broader amendment to this bill.

LAST WEEK AT THE CAPITOL

ISSUES

SSTP

SB 322 by Sen. Larry Teague passed the House Friday by a vote of 72 to 22 and will now go to the Governor’s desk for his signature. The bill amends sales tax provisions to be consistent with the Streamlined Sales and Use Tax Agreement and provides that sales tax is levied on the withdrawal of goods from the stock of an established business.

SCRAP METAL

HB 1479 by Rep. Darrin Williams is on the way to the Governor’s desk for his signature after the House voted 97 to 0 Friday to concur in a Senate amendment. HB 1479 would create a Class D felony for the offense of damaging wires and other fixtures of telephone, cable and electric power companies or any line that could result in physical injury. It also adds new restrictions and requirements on scrap metal dealers. This is an agreed bill by the parties in interest. The State Chamber/AIA supports this bill.

TRAUMA SYSTEM

SB 315 by Sen. Tracy Steele and Rep. Gene Shelby is the legislation to set up a statewide trauma system. The bill would authorize the Department of Health to grant funds to emergency medical care providers, ambulance providers, trauma rehabilitation service, and to hospitals to assist qualification as trauma centers; to create a communication network; and more. It passed the House Friday by a vote of 89 to 4 and will now be sent to the Governor’s office for his signature.

CONTACT INFORMATION

State Senators: 501-682-2902
State Representatives: 501-682-6211
State Chamber/AIA Staff
Randy Zook, President/CEO: rzook@arkansasstatechamber.com
Kenny Hall, Executive Vice President: khall@arkansasstatechamber.com  
Angela DeLille, Director of Governmental Affairs:adelille@arkansasstatec hamber.com
State Chamber/AIA phone: (501) 372-2222
State Chamber/AIA web site: www.arkansasstatechamber.com