Daily Legislative Update

Wednesday, March 11, 2009
59^thDay of the 87^th General Assembly

*  *  *  *  *  CALL TO ACTION  *  *  *  *  *

MANUFACTURERS SALES TAX EXEMPTION FOR ENERGY USAGE

HB 1624 by Rep. David Dunn and SB 875 by Sen. Barbara Horn were amended yesterday in an identical manner. These bills will reduce the sales and use tax rate on electricity and natural gas used by manufacturers in NAICS codes 31, 32 and 33 by 3/4ths of one cent (3.875 percent to 3.125 percent) effective July 1, 2009. There is also a provision to protect the state if claims from the reduced rate exceed $27 million in one year, which is over five times the actual amount of claims being filed and should not become an issue.

Please encourage your state representative and state senator to support HB 1624 and SB 875. Also please thank Governor Beebe, Rep. John Lowery, Rep. Bruce Maloch, Rep. David Dunn and Senator Barbara Horn for their work on this issue.

POPULAR VOTE FOR U.S. PRESIDENT

HB 1339 by Rep. Eddie Cooper and Sen. Terry Smith is on Thursday’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 (Click here to see how your Representative voted). This bill has developed momentum that will likely spill over into the next session. If adopted, it would assign Arkansas ’s presidential electors to the winner of the national popular vote rather than the winner of the popular vote in Arkansas . This would eliminate 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. The Electoral College has served Arkansas well and should be protected. The State Chamber/AIA opposes this bill.  PLEASE CONTACT 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:

Senate:

ISSUES

WORKERS’ COMPENSATION

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 Public Health, Welfare and Labor Committee agenda. 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.

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. HB 1601 remains on the agenda for today’s House Insurance and Commerce Committee meeting.

WORKPLACE

HB 1552 by Rep. Lindsley Smith provides that employers shall provide unpaid break time each day to an employee who needs 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 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.

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 is on this morning’s agenda in the House State Agencies and Governmental Affairs Committee. 

IMMIGRATION

HB 1383 by Rep. Jim Nickels is a bill to allow the contractors licensing board to take action against a contractor for knowingly employing workers without legal status. It will be considered today as a special order of business in the House State Agencies and Governmental Affairs Committee.

TOMORROW AT THE CAPITOL

Committee Meetings for Thursday, March 12, 2009

Joint:

House:

Senate:

ISSUES

UNEMPLOYMENT INSURANCE

HB 1478 by Rep. Mike Patterson was amended for the second time on Friday and now reflects the language agreed to by the State Chamber/AIA and the AFL-CIO. It was not considered yesterday because the committee spent all its time on one bill but should be considered tomorrow by the House Revenue and Taxation Committee. It would authorize certain information to be shared between the Department of Workforce Services (DWS) and the Department of Finance and Administration.

FOOD TAX

SB 88 by Sen. Bobby Glover would reduce the sales tax on food and food ingredients by 1 percent. This is a priority item for Governor Beebe. Following the agreement on the sales tax reduction for manufacturers yesterday, this bill was amended to add all 100 members of the House as co-sponsors of the bill. It is expected to be considered tomorrow in the House Revenue and Taxation Committee. 

YESTERDAY AT THE CAPITOL

ISSUES

SALES TAX SOURCING

HB 1179 by Rep. John Burris was considered as a special order of business in the House Revenue and Taxation Committee yesterday. It failed on a voice vote. This bill would have reversed the sales tax sourcing rules changed in the 2007 session to keep Arkansas ’s laws in line with the Streamlined Sales Tax Program (SSTP).

GRADUATED DRIVERS LICENSES

SB 309 by Sen. J. Jeffress and Rep. Shelby passed the final Legislative hurdle yesterday when the Senate voted 32-1 to concur in a House amendment. The bill will now go to the Governor for his signature. The State Chamber/AIA supports this provision to reduce trauma in Arkansas .

PENDING ISSUES OF INTEREST

UNEMPLOYMENT INSURANCE

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 of at least $1000 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.

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 has been referred to the House Revenue and Taxation Committee. 

OTHER STATE CHAMBER/AIA TAX ISSUES

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 the sales tax exemption for manufacturing bills are complete.

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 on the House Revenue and Taxation Committee agenda.

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 is also on the House Revenue and Taxation Committee agenda.

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. 

CLIMATE CHANGE LEGISLATION

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 today’s House Insurance and Commerce Committee agenda. Rep. Webb hosted a meeting on this bill yesterday afternoon and it is expected that she will continue working on the bill before brining it up for consideration. We have concerns with this bill.

HB 1903 by Rep. Joan Cash would create the Energy Efficiency Performance Standards Act of 2009, which would require electric utilities to implement energy efficiency programs for customers to meet minimum energy efficiency performance standards of .3 percent of the utility’s annual weather-normalized retail electricity sales in kilowatt hours in the prior year for 2009-2010, 0.5 percent in 2011, 0.75 percent in 2012, and 1 percent in 2013. It would also restrict spending by utility companies on energy efficiency programs and require that within 90 days of this act, the Arkansas Public Service commission require utilities to submit an energy efficiency plan. Utilities must also file a plan within 180 day including an annual energy efficiency plan filed with the commission. The Arkansas Public Service Commission must monitor and verify compliance. Utilities would be allowed to recover costs to implement the program. The Public Service Commission must conditionally approve or reject an energy plan within 180 days of receiving it. It provides for financial incentives if a utility exceeds energy performance standards. The Public Service Commission must report biennially on the progress and results of energy efficiency programs. We also have concerns with this bill.

Other bills filed on this subject include:

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 today’s 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 2008 by Rep. Webb is the Methane Gas Recovery Income Tax Credit Act of 2009.

HB 2077 by Rep. Webb would allow an income tax credit for expenditures by a contractor than increases the energy efficiency of an eligible residential property.

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.

HB 2079 by Rep. Webb would amend the utility facility environmental and economic protection act regarding waivers for facilities generating electric energy.

HB 2230 by Rep. Webb would provide incentives for windmill blade and component manufacturers.

HB 2273 by Rep. Webb is the Home Efficiency Revolving Loan Fund Act of 2009.

SB 440 by Sen. Broadway would extend the Legislative Task Force on sustainable Building Design and Practices.

STATE CHAMBER/AIA BILL TRACKING 

This session the House filed 1275 bills and the Senate filed 1010 bills.

The State Chamber/AIA is tracking 522 bills and resolutions. 

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.

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