Daily Legislative Update
Monday, March 23, 2009
68th Day of the 87th General Assembly
* * * * * CALL TO ACTION * * * * *
LEGAL STANDARD FOR TAX AUDIT APPEALS
SB 769 by Sen. Larry Teague and Rep. Keith Ingram received a Do Pass as amended recommendation from the Senate Revenue and Taxation Committee Wednesday. The amendment was formally adopted yesterday and the bill will be considered on the Senate floor Monday afternoon. Please contact your state senator and encourage them to vote for SB 769.
SB 769 provides uniform guidelines for
the “rule of strict construction” of tax statutes. Under this rule,
taxpayers have the burden of establishing they are entitled to tax exemptions.
We have no problem there. However,
The bill clarifies that exemptions must
be interpreted fairly and not interpreted so restrictively that they fail to
serve their intended purpose. This bill would make
* * * HOT TOPICS * * *
ENERGY EFFICIENCY PERFORMANCE STANDARDS
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% 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. We received word from various sources yesterday that an amendment to this bill would be circulated soon.
OTHER STATE CHAMBER/AIA TAX ISSUES:
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 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 on the House Revenue and Taxation Committee agenda and will be considered next week.
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 fifteen 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 HB 1903 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 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 has been amended to require diesel fuel sold at public retail contain at least five percent (5%) 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 on Wednesday, March 25 in the Joint Energy Committee. The State Chamber/AIA opposes mandates.
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. In its weekly meeting this morning, the State Chamber/AIA Executive Committee adopted the position to SUPPORT the following ballot proposals:
HJR 1007 by Speaker Robbie Wills, which would remove the requirement that economic development bonds authorized by the General Assembly must go to companies planning to invest over $500 million in capital and hire over 500 new employees. The Arkansas Economic Developers are also supporting this measure, which would help the state compete for new businesses with other states that have similar recruitment tools.
HJR 1003 by Rep. Bruce Maloch that 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 adjust interest rate limits to assist businesses that make consumer loans.
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; prohibits 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.
The latter three bills are all admirable bills that unfortunately mandate coverage that will increase the cost of health care.
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 10:00 a.m.
The Senate does not meet.
Committee Meetings:
Joint:
None listed.
House:
|
9:00 AM |
Room 149 |
|
||
|
9:00 AM |
Room 151 |
|
||
|
9:00 AM |
ROOM 428 |
|
||
|
9:00 AM |
ROOM 138 |
|
||
|
9:00 AM |
Room 130 |
AGING, CHILDREN AND YOUTH, LEGISLATIVE & MILITARY AFFAIRS- HOUSE |
|
Senate:
None listed.
NEXT WEEK AT THE CAPITOL
Committee Meetings for Monday, March 23, 2009
Joint:
|
10:00 AM |
Room 130 |
|
House:
|
10:00 AM |
Room 151 |
|
Senate:
|
10:00 AM |
ROOM 171 |
|
||
|
15 Minutes Upon Adjournment of Senate |
Room 207 |
|
||
|
15 Minutes Upon Adjournment of Senate |
Room 171 |
|
||
|
Upon Adjournment of Senate |
room 272 |
|
ISSUES
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 the Senate yesterday by a vote of 30-2 and is being held in the Senate. This bill falls outside of the agreement between the State Chamber/AIA and the AFL-CIO.
UNEMPLOYMENT INSURANCE
SB 429 by Sen. Tracy Steele is on the Senate Public Health, Welfare and Labor Committee. The bill revises various provisions of Department of Workforce Service law with respect to employment, discharge, recovery of overpayments, other clean-up and technical changes and is agreed to by the State Chamber/AIA and the AFL-CIO.
To help
replenish a trust fund that is expected to experience a $300 million shortfall
in 2009, management agreed to a $2000 increase in the
taxable wage base effective
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
The agreed bill also has six sections of technical corrections and changes. The agreed bill does not address the $25 additional benefit payments, which are paid solely with federal dollars.
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.
YESTERDAY AT THE CAPITOL
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% to 3.25% effective July 1, 2009. SB 875 passed the House yesterday by a vote of 96 to 0. It will now go to the Governor for his signature. HB 1624 received a Do Pass recommendation from the Senate Revenue and Taxation Committee Wednesday and awaits consideration by the full Senate.
UNEMPLOYMENT INSURANCE
HB 1478 by Rep. Mike Patterson, which is agreed to by the State Chamber/AIA and the AFL-CIO, passed the Senate yesterday by a vote of 33-0 and will now go to the Governor for his signature. The bill would authorize certain information to be shared between the Department of Workforce Services (DWS) and the Department of Finance and Administration.
HISTORIC PROPERTY RESTORATION
HB 1953 by Rep. Robert Moore and Sen. Denny Altes would authorize an income tax credit for restoring historic properties of up to 25% of the total qualified expenses incurred by the owner, limited to $500,000 on income-producing property or $100,000 for nonincome-producing property. This bill was backed by many local chambers and economic developers. It passed the Senate yesterday by a vote of 32 to 0 and will now go to the Governor for his signature.
ELECTION BY PLURALITY
HB 1393 by Rep. Tommy Baker was defeated on the Senate floor yesterday but the vote was expunged and the bill was 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% 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% majority to be elected. We share that concern.
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 received a Do Pass from the House Revenue and Taxation Committee yesterday and is on today’s House calendar for final consideration. 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 received a Do Pass from the Joint Energy Committee yesterday and is on today’s House calendar for final consideration. 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 received a Do Pass as amended recommendation from the Joint Energy Committee yesterday. The amendment will be formally adopted on the House floor this morning.
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 is on the Joint Energy Committee agenda. No position was determined 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% of the cost of equipment used to collect, clean, compress, and transport landfill methane gas as an alternative energy source for commercial purposes. It 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% to 75% 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 passed the House yesterday by a vote of 95 to 1 and has been referred to the Senate Transportation, Technology and Legislative Affairs Committee. 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 nonfarming purposes, until or unless the land is later used for farming purposes. It received a Do Pass recommendation from the Senate Agriculture and Economic Development Committee and is on Monday’s Senate calendar for final consideration.
HB 1910 by Rep. Keith Ingram and Sen. David Johnson would change the equity investment incentive tax credit from 33.3% to 50% of the amount invested; allowing for a tax credit of 100% 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 received a Do Pass from the House Revenue and Taxation Committee yesterday and is on today’s House calendar for final consideration.
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 passed the House yesterday by a vote of 94 to 0 and has been referred to the Senate Insurance and Commerce Committee.
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 passed the House Thursday and has been referred to the Senate Committee on Revenue and Taxation.
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 yesterday, 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 is on the Senate Transportation, Technology and Legislative Affairs Committee agenda.
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 1275 bills and the Senate filed 1010 bills.
The State Chamber/AIA
is tracking 536 bills and resolutions.
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
