Daily Legislative Update
Friday, May 1, 2009
Close of the 87th General Assembly
SINE DIE
The 87th General Assembly adjourned today “sine die.”
Here is a summary of the State Chamber/AIA’s lobbying activity during the 2009 session.
LOBBYING SUMMARY
Prior to the 2009 legislative session, the State Chamber/AIA membership adopted as its top legislative priorities to lead the effort to pass a sales tax exemption for energy used in industry and manufacturing, to protect the education reforms passed in 2003-04, to protect the legal reforms enacted by Act 649 of 2003 and to protect the workers’ compensation reforms enacted by Act 796 of 1993. We are pleased to say that we were successful in all of these areas.
With the economy slowing, Governor Mike Beebe took a conservative approach to the state’s budget and coordinated with legislative leaders to block tax exemption bills. However, the Governor maintained his priority to further extend the reduction in the sales tax on food. We worked with legislative leaders to plead our case for a further reduction in the sales tax paid by manufacturers on their energy costs and eventually prevailed. Only a couple other sales tax exemption bills became law.
There were a couple of bills filed that threatened to weaken the education reform measures we helped pass in 2003, but these bills were defeated in the Senate Education Committee.
We maintained a stand-down agreement with the Trial Lawyers Association and therefore only a couple of bills were pushed that attempted to address tort reform. One was easily defeated and another bill to help the nursing home industry was negotiated with the trial lawyers and passed.
Throughout 2008, we had regular meetings with leaders of
the AFL-CIO to discuss workers’ compensation legislation. Our meetings
resulted in an agreed package of legislation, which made only minor
adjustments to
Tax Issues
To accomplish our goal of achieving a sales tax exemption
for energy used by manufacturers, we balanced our analysis of this
session’s political environment with the desire of all manufacturing
members of the State Chamber/AIA. First, we filed a bill that would have
created an exemption for all fuels used by all manufacturers in
In addition to the sales tax reduction for manufacturing, we also produced a package of four additional tax bills and were able to pass two of them. Early in the session, our Tax Committee developed a bill to clarify the exemption for machinery/equipment and tools/dies (SB 770), a taxpayer’s bill of rights to address tax appeals (SB 769), a bill to extend the time period to carry net operating losses forward on income tax returns (HB 1911), and a bill to extend the time to claim rebates on local sales taxes paid in excess of old local caps (HB 1949).
All of these bills were held until the sales tax reduction for manufacturing was completed, which was in the latter weeks of the session. The state Department of Finance and Administration (DFA) was strongly opposed to SB 769 and SB 770. We met with DFA two or three times trying to resolve our differences but got nowhere until we obtained a Do Pass recommendation from the Senate Revenue and Taxation Committee on the tax payer bill of rights, SB 769 by Sen. Larry Teague and Rep. Keith Ingram. Then we were able to negotiate an agreement with DFA on SB 769 that changed the standard of proof in tax appeal cases from beyond a reasonable doubt to clear and convincing evidence. SB 769 is now Act 755. We also reached an agreement with DFA on SB 770 that clarifies the existing exemption on dies and molds. SB 770 is now Act 1208.
HB 1911 by Rep. Keith Ingram and Sen. Larry Teague was an
attempt to make
DFA did not oppose our bill to extend the rebate time for businesses to recover local sales taxes paid above old local caps, but mayors and county judges stopped HB 1949 by Rep. Davy Carter on the House floor.
Our Tax Committee also agreed to endorse HB 1060 by Rep. Tracy Pennartz that would have established an investment tax credit for the rehabilitation and development of central business improvement districts. It also failed to gain support from the Senate Revenue and Taxation Committee the last week of the session and was referred to interim study. Finally, in the last days of the session Rep. Ed Garner pushed HB 1947 out of the House but joined the many bills that failed in the last week to gain support from the Senate Revenue and Taxation Committee. This bill would have created The Arkansas Capital Gains Reduction Act of 2009. It was also referred to interim study. This is a tax issue that the State Chamber/AIA Tax Committee should look into prior to the next legislative session.
Workers’ Compensation
HB 1362 by Rep. Mike Burris, Rep. Rick Green, Sen. Jerry Taylor and Sen. Joyce Elliott contained the agreement negotiated between the State Chamber/AIA and the AFL-CIO on workers’ compensation issues. This bill simply exempted workers’ individual disability policies that they paid for from the workers’ compensation benefit offset requirements, clarified the responsibility for second injury claims, allowed certain claims to move from the Second Injury Trust Fund to the Death and Permanent Disability Trust Fund, and strengthened the proof of insurance requirements for certain contractors. We ran into some unexpected opposition from legislators responding to concerns by small contractors and had some legislative drafting issues that complicated the contractor issue even more. However, we worked with the labor leaders and legislators as well as kept constant grass roots pressure on legislators to honor the negotiated agreement between the State Chamber/AIA and the AFL-CIO. The bill eventually passed and is now Act 327.
During the session, about a half-dozen workers’ compensation bills were filed in addition to our agreed bill. Four were held or withdrawn in honor of the agreement between the State Chamber/AIA and the AFL-CIO. The other two passed. One was a simple attempt to deal with volunteer firefighter’s training, SB 872, which also expanded workers’ compensation coverage to include volunteers who do not fight fires. The State Chamber/AIA and AFL-CIO testified against the bill in the Senate Committee, but it was obvious the legislature did not see this bill having a strong impact on the overall workers’ compensation system. It is now Act 808.
Rep. John Edwards filed HB 1403, the Uniform Emergency Volunteer Health Practitioners Act. This
bill was designed to help
Energy Efficiency and Climate Change
As the bill filing deadline approached in early March,
most of the bills related to energy efficiency, climate change and other
issues arising from the Global Warming Commission were filed. The State
Chamber/AIA Task Force on Energy identified about 30 bills related to these
issues, but only seven required opposition. Of the bills that we were either
neutral on or favored, about 10 became law. Our opposition efforts focused on
two bills, HB 1851 by Rep. Kathy Webb and HB 1903 by Rep. Joan Cash. We worked
with a large coalition of our industrial and utility members to stop these
two bills. HB 1903 would have required electric utilities to achieve energy
efficiency recommendations by 2013, but would have allowed the utilities to
pass the cost of the programs on to rate payers. Our estimates were that
these programs could cost
We also applied grass roots pressure and worked with a coalition of organizations and businesses to defeat HB 1968 by Rep. Kathy Webb. We feared this bill would have created a chilling effect upon people’s willingness to serve the state through participation in boards and commissions that address the environment or any other issue by expanding the conflict of interest laws including an impact on family members and the addition of criminal enforcement. We believe that many people participate on boards and commissions because of their expertise and experience, and we could see this bill causing such expertise to go away.
Unemployment Insurance
Five members of
the State Chamber/AIA Unemployment Insurance Committee including the
co-chairs of the committee and the organizations’ Executive Vice
President participate in the ESD Advisory Council, which also includes five representatives
of the AFL-CIO and three consumers. This Advisory Council meets quarterly to
discuss issues related to the state’s unemployment insurance (UI)
system and also negotiates legislative issues. The economic downtown had a dramatic impact on the
state’s Unemployment Insurance Benefit Trust Fund, which became
depleted in March. Department of Workforce Services staff estimates the Trust
Fund will have a shortfall of at least a $300 million in 2009 and likely
again in 2010. The state started receiving federal cash advances in March
that are interest-free through 2010. The fund and its loans are the
responsibility of businesses in
To meet the financial needs of the trust fund, we agreed to a $2,000 increase in the taxable wage base effective January 1, 2010. Additionally, we secured labor’s support when they 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
agreement supported by management and labor was filed as SB 429 by Sen. Tracy
Steele and is now Act 802. This bill also makes changes to our UI system to
qualify for federal stimulus dollars.
Popular Vote for U.S. President
HB 1339 by Rep. Eddie Cooper and Sen. Terry Smith would have
assigned
Healthcare
The State Chamber/AIA worked with the Arkansas Employers Healthcare Coalition (AECH) on a few healthcare-related issues in this session. In the first half of the session, the big issue was pharmacy benefit management (PBM). SB 460 by Sen. Percy Malone and HB 1601 by Rep. Allen Maxwell were bills that garnered our attention, but were less troublesome than PBM legislation filed in previous sessions. Eventually, a deal was struck on SB 460, which is now Act 769.
Late in the session, our attention was drawn to three bills that would have mandated coverage for autism (SB 913), hearing aids (HB 1930), and reconstructive surgery (SB 940). We applied grassroots pressure to these bills while coordinating with members of the AEHC who were conducting in-capitol lobbying and working with each bill’s sponsor. Our opposition to all of these bills was based upon the fact that all would increase healthcare costs. The reconstructive surgery bill was never considered in committee, the hearing aid bill was amended from mandating coverage to being a mandated offering, and the autism bill cleared the Senate but failed to gain approval from the House Insurance and Commerce Committee where the sponsor pulled the bill down and referred it to interim study.
Constitutional Amendments
Each legislative session, the legislature can refer up to three proposed amendments to the state Constitution. During the 87th General Assembly, there were approximately 25 proposals filed by legislators and the State Chamber/AIA supported four, HJR 1003 by Rep. Bruce Maloch, HJR 1004 by Rep. Eddie Cheatham, HJR 1007 by House Speaker Robbie Wills and SJR 6 by Sen. Shane Broadway.
HJR 1007 would modify
Amendment 82, the Super-project Amendment, to make it more broadly applicable
to projects in more areas and allow
At their first joint meeting, the House and Senate State Agencies Committees voted to refer SJR 3 by Sen. Steve Faris to the 2010 General Election ballot. This would establish a state constitutional right to hunt and fish. Then, the committees voted to refer HJR 1007 to the ballot. Both of these joint resolutions were then adopted by the full House and Senate. Meanwhile there was quite a bit of work done by the legislature and many interests on the third and final ballot referral. Eventually the original proposals of HJR 1003, HJR 1004 and SJR 6 were all blended into HJR 1004, which received the approval of both chambers and will be on the November 2010 ballot. The State Chamber/AIA will form a coalition to support passage of HJR 1007 and HJR 1004.
Immigration
In the interim period
between the 2007 and 2009 sessions, there was much discussion about
immigration legislation coming up in the 87th General Assembly.
However, it turned out that there were less than a half-dozen bills filed.
The most notable immigration bill was HB 1093 by Rep. Bill Sample. We joined
with the Farm Bureau and the Poultry Federation in reviewing this bill and
found it to be similar to legislation adopted in
Tort Reform and Education
As mentioned in the opening comments to this summary, we monitored all legislation to identify attempts to weaken the civil justice and education reforms we helped pass in 2003 and 2004. Only three bills required any effort and all three were defeated.
Animal Cruelty
Agriculture’s strong impact on the
Trauma System
In our legislative agenda, we indicated support for the
development of a trauma system in
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
