Daily Legislative Update
Tuesday, March 24, 2009
72nd Day of the 87th General
Assembly
* * * CALL TO ACTION * * *
REBATE EXTENSION
HB 1949 by Rep. Davy Carter seeks an extension of the time for businesses to file for a rebate of local sales taxes. Currently businesses have only six months to file and we fear smaller businesses without full time accounting support will not know about this rebate until they meet with their tax advisor, which may be well after six months from the date of purchase. 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. HB 1949 will be considered by the House Revenue and Taxation Committee on Thursday. Please contact members of the House Revenue and Taxation Committee.
ENERGY EFFICIENCY PERFORMANCE STANDARDS
Three bills we oppose are expected to be considered in committee tomorrow. Please contact your state representative to express your opposition to these bills:
HB 1903 by Rep. Joan Cash would create the Energy Efficiency Performance Standards Act of 2009, which would require electric and gas utilities to implement energy efficiency programs for customers to meet minimum energy efficiency performance standards. The bill would also allow cost recovery of up to 2 percent of all utilities’ total revenue. We estimate this amount to be up to $72 million per year paid by utility customers. From a business perspective, this would have the same impact as a tax increase. It is on the House Insurance and Commerce 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 established 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. This bill is on the House Insurance and Commerce Committee agenda. The State Chamber/AIA opposes this bill because it would raise utility costs by an amount between $104 million and $290 million a year.
HB 1790 by Rep. Tiffany Rogers would require diesel fuel sold at public retail to contain at least 5 percent biodiesel fuel by volume. It would also require the Agriculture Department to verify biodiesel production capacity, authorize the Department to require regular reports from producers, to promulgate rules to implement the requirements, and to report to the Governor annually. In addition, it would authorize the Bureau of Standards of the State Plant Board to monitor compliance with the biodiesel fuel standard and allow use for the Alternative Fuels Development Fund for grants and incentives to renewable fuels producers and renewable fuels feedstock processors. It has been scheduled for a special order of business in tomorrow’s Joint Energy Committee. The State Chamber/AIA opposes government mandates that affect business operations in general and this fuel mandate because it would add inefficiencies to the marketplace, create fuel requirements that can restrict fuel distribution flexibility (particularly during emergencies) and may force consumers/businesses to pay more for a specific fuel regardless of price differentials.
* * * HOT TOPICS * * *
LEGAL STANDARD FOR TAX AUDIT APPEALS
SB 769 by Sen. Larry Teague and Rep. Keith Ingram has been amended to reflect the agreement reached late last week and endorsed yesterday by the State Chamber/AIA Tax Committee. It will be considered by the full Senate today. The amended bill will change the evidentiary standard of proof from “beyond a reasonable doubt” to “clear and convincing evidence.” Also, the amended bill will allow tax appeals to be heard “de-novo,” or in other words, the Department of Finance and Administration’s administrative decision would not be presumed correct.
OTHER STATE CHAMBER/AIA TAX ISSUES:
Extend Net Loss Carry Forward
HB 1911 by Rep. Keith Ingram and Sen. Larry Teague seeks an extension of the income tax net operating loss carry forward period from five years to 15 years. It is also on the House Revenue and Taxation Committee agenda.
Clarify Machinery and Equipment Exemption
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 on the agenda in the Senate Revenue and Taxation Committee.
OTHER RENEWABLE ENERGY/CLIMATE CHANGE LEGISLATION WE OPPOSE
In addition to the three bills discussed above, the following bills have been identified by the State Chamber/AIA Task Force on Energy as bills to oppose. Please let your state legislators know of your opposition to these bills.
HB 2079 by Rep. Webb would amend the utility facility environmental and economic protection act regarding waivers for facilities generating electric energy. It is on the Joint Energy Committee agenda. The State Chamber/AIA opposes.
HB 2273 by Rep. Webb is a shell bill that would establish a revolving loan fund to be administered by the Public Service Commission to provide loans to homeowners for the acquisition of energy conservation measures to improve the use of energy. It is also on the Joint Energy Committee agenda. The State Chamber/AIA opposes.
HB 2051 by Rep. Maxwell is the Home Weatherization Revolving Loan fund Act of 2009.
The bill would
direct the Arkansas Public Service Commission to establish a home
weatherization revolving loan fund for
HB 1968 by Rep. Webb would prohibit conflict of interest voting by members of state boards and commissions and conflicts of interest by all public servants. It was amended earlier this week and is on the House Rules Committee agenda. This bill addresses an issue that has been opposed in past sessions.
A couple of bills that
should be studied are SB 906 by
Senator Mary Ann Salmon and SB 959 by
Sen. John Paul Capps. SB 906 would amend
the
CONSTITUTIONAL AMENDMENTS
Each session, the General Assembly is authorized to refer up to three proposals to the next general election. This session, there were 24 joint resolutions filed that propose ballot issues. The State Chamber/AIA Executive Committee has adopted the position to SUPPORT the following ballot proposals:
HJR 1007, by Speaker Robbie
Wills, would remove the investment and employment limits ($500 million
in capital and 500 new employees), as well as the upper limit on the amount
of bonds issued, for funding economic development projects. It will change
Amendment 82, the Super-project Amendment, to make it more broadly applicable
to projects in more areas and allow
HJR 1003 by Rep. Bruce Maloch would remove the interest rate limits on bonds issued by governmental units and loans made to governmental units. This is also a pro-economic development proposal that would help local government projects and student loans.
HJR 1004 by Rep. Eddie Cheatham would make the same changes in interest rate limits as HJR 1003. In addition, it would adjust interest rate limits to assist businesses that make consumer loans as well as address concerns by the banking industry.
The Arkansas Employers’ Health Care Coalition opposes the following bills:
HB 2088 by Rep. Gene Shelby would require that physician profile ranking, rating and performance results are not public or used for reimbursement and providing for Insurance Department to promulgate rules for profile accuracy and transparency. This bill is too broadly drafted and would regulate activity that one could not reasonably anticipate. It is on the House Public Health Welfare and Labor Committee agenda.
SB 913 by Sen. Mary Anne Salmon would require health benefit plans to provide coverage for the diagnosis and treatment of autism spectrum disorders, and would prohibit insurers from terminating or refusing coverage solely because a person is diagnosed with an autism disorder. An amendment has been filed for the bill. It is on the Senate Insurance and Commerce Committee agenda.
HB 1930 by Rep.
Pam Adcock would require health benefit plans to provide coverage for a
hearing aid that is prescribed by a qualified physician, beginning
SB 940 by Sen. Joyce Elliott would require group health plans and group health insurers to cover certain medically necessary reconstructive surgeries, though not cosmetic surgery. It is on the Senate Insurance and Commerce Committee agenda.
POPULAR VOTE FOR U.S. PRESIDENT
HB 1339 by Rep. Eddie
Cooper and Sen. Terry Smith would assign
TODAY AT THE CAPITOL
House convenes at
Senate convenes at
Committee Meetings:
Joint:
8:00 AM |
Room 151 |
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9:00 AM |
Room 171 |
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House:
10:00 AM |
Room 428 |
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10:00 AM |
Room 149 |
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10:00 AM |
Room 130 |
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10:00 AM |
Room 138 |
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10:00 AM |
Room 151 |
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Senate:
10:00 AM |
OSC |
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10:00 AM |
Room 171 |
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10:00 AM |
ROOM 309 |
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10:30 AM |
ROOM 272 |
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Upon Adjournment of Senate |
Room 309 |
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30 Minutes upon Adjournment |
ROOM 272 |
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ISSUES
MANUFACTURERS SALES TAX EXEMPTION FOR ENERGY USAGE
HB 1624 by Rep. David Dunn and SB 875 by Sen. Barbara Horn are identical bills that are backed by the State Chamber/AIA, which will reduce the sales and use tax rate on electricity and natural gas used by manufacturers in NAICS codes 31, 32 and 33 from 4 percent to 3.25 percent effective July 1, 2009. SB 875 passed the House last week and will now go to the Governor for his signature. HB 1624 is on today’s Senate calendar.
TAX WITHHOLDING
HB 1929 by Rep. Bill Sample would make an employer who pays an employee in cash and fails to withhold taxes subject to a penalty of three times the amount of withholding. It is on the House Revenue and Taxation Committee agenda.
UNION DUES CHECKOFF
SB 945 by Sen. Joyce Elliott would allow county employees to have union dues withheld from their paychecks. It received a Do Pass recommendation from the Senate Committee on City, County and Local Affairs on March 17 and is pending consideration by the full Senate.
REAL ESTATE TRANSACTIONS
HB 2225 and HB 2226 by Rep. Pam Adcock are a couple of bills to watch if you are involved in frequent property transactions. HB 2225 would require the filing of a survey with all applications for permits to alter real property in the state and HB 2226 would require the filing of a survey with all instruments that transfer real property in the state. They are on the agenda in the House Revenue and Taxation Committee.
ELECTION BY PLURALITY
HB 1393 by Rep. Tommy Baker was defeated on the Senate floor last week but the vote was expunged and the bill has been re-referred to the Senate Committee on City, County and Local Affairs. This bill would change the way city and county officials are elected by eliminating the need for a runoff if the ticket leader received at least 40 percent of the vote and won by a specified margin. Senators thought the bill needed additional cleanup and many were concerned about removing the requirement of a 50.1 percent majority to be elected. We share that concern.
WORKERS’ COMPENSATION
SB 872 by Senator Larry Teague would expand workers’ compensation coverage to members of volunteer fire departments who do not engage in firefighting to be eligible for workers’ compensation. It passed last week and is being held in the Senate. This bill falls outside of the agreement between the State Chamber/AIA and the AFL-CIO.
TOMORROW AT THE CAPITOL
Committee Meetings for
Joint:
8:00 AM |
Room 272 |
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9:00 AM |
Room 171 |
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12:00 PM |
Room 130 |
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Upon Adjournment |
Room 149 |
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House:
10:00 AM |
ROOM 138 |
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10:00 AM |
ROOM 428 |
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10:00 AM |
Room 151 |
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10:00 AM |
Room 149 |
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10:00 AM |
Room 130 |
AGING, CHILDREN AND YOUTH, LEGISLATIVE & MILITARY AFFAIRS- HOUSE |
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12:00 PM |
room 428 |
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1:00 PM |
Room 151 |
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Senate:
10:00 AM |
Room OSC |
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10:00 AM |
Room 272 |
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10:00 AM |
Room 171 |
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10:00 AM |
Room 207 |
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15 Minutes Upon Adjournment of Senate |
Room 207 |
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ISSUES
UNEMPLOYMENT INSURANCE
SB 429 by Sen. Tracy Steele is on the Senate Public Health, Welfare and Labor Committee agenda. The bill is agreed to by the State Chamber/AIA and the AFL-CIO.
The Department of Workforce Service’s Unemployment Insurance Benefit Trust Fund is expected to experience at least a $300 million shortfall in 2009 and likely 2010. To address this problem, the ESD Advisory Council, made up of State Chamber/AIA, AFL-CIO and consumer members, developed an agreement to address the Trust Fund’s shortfall. Management agreed to a $2,000 increase in the taxable wage base effective Jan. 1, 2010. Labor agreed to allow discharges to be treated in the same manner as quits. The change in the wage base will cost employers about $50 per employee per year on average and will generate about $46 million in additional benefit funding per year. The change labor agreed to will save the fund about $25 million each year.
The
amended bill also makes changes to our UI system to qualify for federal
stimulus dollars. By enacting an alternative base period to determine UI
qualification and two of four additional options,
PENDING ISSUES OF INTEREST
RENEWABLE ENERGY/CLIMATE CHANGE LEGISLATION
In addition to the bills mentioned above that the State Chamber/AIA Task Force on Energy identified as bills to oppose, the following bills were identified as bills that we could support unless otherwise noted.
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 2256 by Rep. Alan Maxwell would exempt biomass grown for biofuel production from the severance tax. It passed the House on Friday and has been referred to the Senate Revenue and Taxation Committee. This bill is part of the Arkansas Economic Development Commission’s legislative package.
HB 2230 by Rep. Webb would provide incentives for windmill blade and component manufacturers. It passed the House Friday and will next be considered by the full Senate. This bill is part of the Arkansas Economic Development Commission’s legislative package.
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 2078 by Rep. Webb would provide for the development of a program to assist residents with energy audits, weatherization and the installation of energy efficiency measures and to promote a workforce for that purpose. This is still a shell bill which is on the Joint Energy Committee agenda. Amendments will have to be reviewed to determine a final position.
HB 2260 by Rep. Webb would
require the Arkansas Energy Office to collect data on aviation fuel and to issue
a rule that requires an
HB 2002 by Rep. Maxwell would add a definition for “synthetic transportation fuel,” amend the definitions of “alternative fuels” and “biomass” and increase the incentive in the Arkansas Alternative Fuels Development Act. It passed the House yesterday by a vote of 93 to 1 and will next be considered by the full Senate.
HB 1796 by Rep. Fred Allen would create the Alternative Energy Commission to study bioenergy, ethanol, solar and wind power, and other energy sources identified by the commission. It was amended yesterday and is on the Joint Energy Committee agenda. The amendment will be studied to determine a position on this bill.
HB 1838 by Rep. Roy Ragland is a shell bill that would provide incentives for the development of renewable energy sources. It is on the Joint Energy Committee agenda. No position was determined on this bill.
HB 2008 by Rep. Webb creates an income tax credit of 30 percent of the cost of equipment used to collect, clean, compress, and transport landfill methane gas as an alternative energy source for commercial purposes. It was amended yesterday and is on the House Revenue and Taxation Committee agenda.
HB 2077 by Rep. Webb would allow an income tax credit for expenditures by a contractor that increases the energy efficiency of an eligible residential property. It is also on the House Revenue and Taxation Committee agenda.
HB 1748 by Rep. Steve Breedlove would allow a deduction from gross income for the purchase and use of a solar energy system. It failed on a voice vote in the House Revenue and Taxation Committee last week but remains on the Committee’s agenda.
HB 1861 by Rep. Jane English would increase from 50 percent to 75 percent the income tax credit under the Emerging Technology Development Act of 1999, renames the Act, and adds alternative fuel sources, wind power, and electric vehicle equipment as qualifying technologies. It is on the House Revenue and Taxation Committee agenda.
HB 2109 by Rep. Bill Sample would provide incentive to promote the generation of electricity from biomass, including without limitation agricultural waste, wood waste, poultry waste and other animal waste. It is on the House Revenue and Taxation Committee agenda.
SB 440 by Sen. Broadway would extend the Legislative Task Force on sustainable Building Design and Practices. It is on the Senate State Agencies and Governmental Affairs Committee agenda. No position was determined on this bill.
HB 1902 by Rep. Cash would provide for the registration of autocycles for operation on roads; defines autocycle as an enclosed, electric, three-wheel motorized cycle with a steering wheel that carries between one and four persons. It received a Do Pass from the Senate Transportation, Technology and Legislative Affairs Committee yesterday and is on today’s Senate calendar. No position was taken on this bill.
HB 2235 by Rep. David Dunn would promote conservation of energy and natural resources in certain buildings leased by the state or state-supported institutions of higher education. It is on the House Education Committee agenda.
SB 921 by Sen. Shane Broadway would create the sustainable building design program for state agencies. It is on the Senate State Agencies and Governmental Affairs Committee agenda.
SB 946 by Sen. Johnny Key would provide an income tax credit for costs of energy
efficiency home improvements, not to exceed $500 per taxpayer; provides claim
procedure; to remain in effect from
SB 973 by Sen. Sue Madison is a shell bill that would amend the tax provisions in Title 26 of the Arkansas Code to provide for the tax treatment of wind power. It is also on the Senate Revenue and Taxation Committee agenda.
SB 927 by Sen. Robert Thompson is a shell bill to promote the development of the alternative fuels industry in the state by establishing minimums for the percentage of alternative fuels to be sold in the state. It is on the Senate Agriculture and Economic Development Committee agenda. This bill is expected to be amended to include a mandate. The State Chamber/AIA opposes mandates.
SB 928 by Sen. Robert Thompson is a shell bill to increase state economic incentives for alternative fuel development. It is also on the Senate Agriculture and Economic Development Committee agenda. A position will have to be determined after the bill is amended.
AEDC’S LEGISLATIVE PACKAGE
In partnership with the Arkansas Economic Developers, the State Chamber/AIA favors the AEDC package of bills.
HB 1939 by Rep. Rick Saunders would repeal the Motion Picture Incentive Act of 1997 and creates the Digital Product and Motion Picture Industry Development Act of 2009, replacing the tax rebate program with various production cost rebates. It is on the Senate Agriculture and Economic Development Committee agenda.
HB 2029 by Rep. Jerry Brown and Sen. Jim Luker would remove the requirement that foreign individuals or entities file a declaration of intent with the Secretary of State upon acquiring agricultural land for non-farming purposes, until or unless the land is later used for farming purposes. It passed the Senate yesterday by a vote of 34 to 0 and will now go to the Governor for his signature.
HB 1910 by Rep. Keith Ingram and Sen. David Johnson would change the equity investment incentive tax credit from 33.3 percent to 50 percent of the amount invested; allowing for a tax credit of 100 percent of start-up costs of forming a regional or community-based alliance fund; changing eligibility for investments. It is on the House Revenue and Taxation Committee agenda.
HB 2256 by Rep. Allen Maxwell and Sen. Jimmy Jeffress provides that biomass grown for the purpose of biofuel production is not subject to a severance tax. It passed the House on Friday and has been referred to the Senate Revenue and Taxation Committee.
SB 1005 by Sen. Tracy Steele is a shell bill filed to amend laws regarding minority business economic development. It is on the Senate Agriculture and Economic Development Committee agenda.
HB 2076 by Rep. Kathy Webb makes various revisions to the Nonprofit Incentive Act, including reductions in the payroll and equipment spending threshold amounts that are required for eligibility to receive benefits. It is on the Senate Insurance and Commerce Committee agenda.
HB 2081 by Rep. David Dunn would repeal the Emerging Technology Development Act of 1999 and makes various changes to the Consolidated Incentive Act of 2003. It is on the Senate Committee on Revenue and Taxation agenda.
HB 2260 by Rep. Kathy Webb would require the Arkansas Energy Office to collect data on aviation fuels; authorizes the Energy Office to require cities and counties issuing building permits to adopt the current Arkansas Energy Code for New Building Construction. It was presented at the Joint Energy Committee meeting last week, but was pulled down by the sponsor to address some questions and concerns raised by committee members.
SB 920 by Sen. Shane Broadway would create the Technology Acceleration Fund for use by the Economic Development Commission, Science and Technology Authority, and Development Finance Authority for investment incentives to improve technology development. It received a Do Pass from the Senate Transportation, Technology and Legislative Affairs Committee and is on today’s Senate calendar.
HB 2230 by Rep. Kathy Webb would provide a limited
exemption for income taxes to qualified windmill blade and windmill component
manufacturing companies locating in the state after
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 on the House Insurance and Commerce Committee agenda, but we do not expect this bill to be amended right away. This bill will be opposed by the AFL-CIO and the State Chamber/AIA because it is not part of our agreement.
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 previously on a 4-4 vote in the Senate State Agencies and Governmental Affairs Committee, but remains on the agenda and the sponsor can bring the bill back up at any time. HJR 1014 remains on the agenda in the House State Agencies and Governmental Affairs Committee.
STATE CHAMBER/AIA BILL TRACKING
This session the House filed 1,275 bills and the Senate filed 1,010 bills.
The State Chamber/AIA is tracking 537 bills and resolutions.
We have added one of the recently amended shell bills to our tracking list:
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Creates civil liability for new acts of Medicaid fraud or collusion and increasing civil penalties for fraud under the Medicaid Fraud False Claims Act, allowing a person to bring an action in the name of the state for false claims. |
ANTI-TORT REFORM
HB 2103 by Rep. Lindsley Smith would create civil liability for new acts of Medicaid fraud or collusion and increase civil penalties for fraud under the Medicaid Fraud False Claims Act, allowing a person to bring an action in the name of the state for false claims. Recent amendments appear to be an expansion of civil liability that would be an expansion of tort laws in violation of our agreement with the trial lawyers to not bring tort reform or anti-tort reform bills. It is on the House Judiciary Committee agenda.
Please visit our tracking site here for the complete, searchable list of bills being tracked. The full text and an up to date status of each bill is also available at the site.
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
