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Annual Meeting Report 2001

Governmental Affairs

The 83rd General Assembly was a hectic session with record numbers of bills filed - House members filed 1,787 bills and resolutions, and senators filed 1,054. These numbers represent a 17.5 percent increase in filings over the 1999 session and a 30 percent increase over the 1997 session, which was the last session before term limits took effect.

The State Chamber/AIA tracked 560 bills, which was a 41 percent increase in bills tracked over the 1999 session. Of the bills tracked, 120 were considered "highest priority" bills with 48 receiving the most attention. Only eight of the 48 bills had State Chamber/AIA support, with six becoming law. The State Chamber/AIA worked very hard to defeat the remaining 40 bills, which would have had a negative impact on the business climate in Arkansas.

During the session a strong grass-roots lobbying network was developed that was very successful in controlling negative legislation. The State Chamber/AIA produced a daily e-mail report that outlined the day's most important issues and, when necessary, requested contact with legislators by business and community leaders. This e-mail was shared with State Chamber/AIA members, local chambers of commerce, economic developers, lobbying coalitions and business associations, which resulted in daily contact with about 27,000 people. Some of the key issues lobbied during the session included:

Workers' Compensation: Without question, protecting the existing workers' compensation law was the greatest challenge for the State Chamber/AIA during the 83rd General Assembly. Since 1995 the State Chamber/AIA and the Arkansas AFL-CIO have negotiated changes to the comp laws and presented an agreed bill to the legislature, which was then easily adopted. This session's negotiations moved slowly and even broke off briefly when more than 20 pro-labor bills were filed, some of which contained key provisions being negotiated. The State Chamber/AIA led a strong grass-roots opposition to the pro-labor bills, which, combined with the urging of the legislature for continued negotiations, eventually led to a successful agreed bill and the defeat of all pro-labor legislation. The agreed changes should not result in any increase in workers' comp rates. However, if approved, five of the defeated pro-labor bills would have increased workers' compensation premiums by 22 to 32 percent.

Healthcare: The State Chamber/AIA's grass-roots lobbying system, direct lobbying and participation in the Arkansas Employers Healthcare Coalition resulted in the defeat of a bill that would have increased the cost of healthcare for employers. The legislature did approve a couple of bills that might reduce the cost of healthcare.

Taxes: The State Chamber/AIA always keeps a close eye out for tax increases that target the business community and works to protect the existing business exemptions. State Chamber/AIA lobbying efforts blocked four potentially costly proposals.

Legal: The State Chamber/AIA's direct and grass-roots lobbying efforts stopped four bills that would have been bad for the business environment in Arkansas. The State Chamber/AIA participated in a large coalition that attempted to pass tort reform legislation, but the Senate and House Judiciary Committees each rejected identical bills.

Labor: The State Chamber/AIA joined many affected organizations and higher education institutions to defeat a collective bargaining bill.

Economic Development: The State Chamber/AIA, the Arkansas Economic Developers and the Arkansas Chamber of Commerce Executivesжorking together as the Arkansas Partnershipеsed the State Chamber/AIA's grass-roots communications system to defeat or modify several pieces of legislation that impacted economic development in Arkansas.

Education: The State Chamber/AIA Education Committee's K-12 subcommittee, chaired by state Sen. John Riggs IV, proposed and passed legislation to explore how to improve the state's public education.

Workers' Comp Committee

Protecting existing workers' compensation law was a tremendous challenge during the 2001 legislative session. This committee, co-chaired by State Chamber officers Steve Carter, president of Wal-Mart's CMI, and Bill Walmsley, of the Walmsley and Weaver law firm, certainly had its work cut out for it.

This session's negotiations with the AFL-CIO began in October 2000, with both parties understanding that the goal of providing a fair and equitable workers' compensation system is best accomplished through compromise and agreement between management and labor.

The committee met frequently during the session to discuss negotiations with labor that moved slowly and even broke off for a brief time. The State Chamber/AIA led a strong grass-roots opposition to more than 20 pro-labor bills, which, combined with the urging of the legislature for continued negotiations, eventually led to a successful agreed bill and the defeat of all pro-labor legislation. The agreed bill contained five provisions:

Amends Arkansas Code Annotated Section 11-9-705 to adopt Rule 702 of the Federal Rules of Evidence. This rule authorizes the use of expert testimony.
Amends Arkansas Code Annotated Section 11-9-715 to provide a flat 25 percent attorneys' fee to a claimant's attorney on controverted indemnity benefits, with no fee paid on medical benefits other than through a voluntary agreement with the medical provider.
Authorizes the Workers' Compensation Commission to adopt guidelines for the diagnosis and treatment of carpal tunnel syndrome proposed jointly by management and labor. Both labor and management will recommend that the commission adopt Occupational Carpal Tunnel Syndrome Guidelines.
Amends the workers' compensation law to prohibit collection actions on disputed medical bills by medical providers for services rendered to an employee due to a work-related injury until there is a final determination regarding the dispute.
Amends Arkansas Code Annotated Section 11-9-601(e)(1) to change the burden of proof on occupational disease claims from "clear and convincing evidence" to "a preponderance of the evidence."

Following its annual review, the Insurance Commission announced a 7.5 percent rate decrease for the workers' compensation voluntary market, marking the seventh consecutive year workers' comp rates have fallen in Arkansas. The decrease in the voluntary market can be attributed to Act 796 of 1993, which a coalition led by the State Chamber/AIA worked hard to bring about. The agreed bill protects the modifications made to the workers' comp laws in 1993.

Unemployment Comp Committee

This committee, chaired by Dan Woods, successfully negotiated the usual package of changes to the law, most of which were either federally mandated changes or housekeeping items.

Only two items have a possible cost implication to employers. First, there is a provision to allow, for a two-year period, the transfer of 0.05 of 1 percent of stabilization tax to develop technology to improve the cost and efficiency of the agency. The second provision eliminates the disqualification of benefits for permanently terminated employees who may receive an accrued vacation check after termination.

Positive legislation for employers includes a new tax rate for out-of-state companies that have excellent UC records (to help attract new employers) and stronger provisions to recover benefits paid due to fraud.

The Unemployment Compensation Trust Fund stood at $230.5 million as of July 31, 2001, down from $272.9 million a year ago. This is the first drop in several years, and is due to the slower economy. Further, the year-end projection for the fund level is $185 million, down from $265 million at year-end 2000.

It appears the stabilization tax will return to 0.4 percent in 2002. That has been the stabilization tax rate for a number of years, except it did drop to 0.3 percent in 2001 due to the growing trust fund. Should the slow economy continue very long beyond the year 2001, changes in the contribution (tax) levels might be considered in the 2003 legislative session.

Education Committee

This committee chaired by state senator John Riggs IV, of J.A. Riggs Tractor in Little Rock, provided the most significant piece of legislation supported by the State Chamber/AIA during the session. This committee's K-12 subcommittee proposed and passed legislation to explore how to improve public education in Arkansas. The legislation created the Arkansas Blue Ribbon Commission on Public Education. Its purpose is to:

Actively involve the private sector as full and valued partners in the education improvement process;
Define the components of the constitutional mandate for "a general, suitable and efficient system of free public schools";
Define an equitable and adequate system of free public education;
Assess current efforts to improve the state's system of public education; and
Propose and recommend legislation for the 2003 regular session of the General Assembly.

The State Chamber/AIA plans to take an active role in K-12 education reform.

Tax Committee

Eric Barkley of Reliant Energy Arkla chaired this committee, which experienced an unusually light workload for a legislative year. The committee met monthly during the session and reviewed all tax bills tracked by the State Chamber/AIA. However, very few bills required lobbying activity. Most of the bills that did require attention were modified satisfactorily through discussions with the state Department of Finance and Administration or the Department of Economic Development.

The committee maintained its position of protecting all existing sales tax exemptions. The State Chamber/AIA's lobbying efforts blocked a couple of attempts to remove such exemptions. Opposing testimony was also offered against some of the legislature's attempts to raise revenue through specific "fee" increases.

Health Committee

This committee, chaired by Stephen W. Jones of the Jack, Lyon & Jones law firm in Little Rock, met prior to the opening of the legislative session. Arkansas Insurance Commissioner Mike Pickens presented his department's legislative package to the group and a U.S. Chamber spokesperson addressed some important national healthcare issues. During the session, the State Chamber/AIA worked to block a major piece of legislation that would have increased the cost of health insurance in Arkansas.

Many of this committee's members worked as part of the Arkansas Employers Healthcare Coalition during the session. Also, many members of this committee were appointed to a task force formed with a federal grant through UAMS to study the reasons people don't have health insurance.

Small Business Council

This group, chaired by Eric Munson, did not meet during the session due to the heavy lobbying activity required to protect the workers' comp laws and health insurance rates. The committee did meet in June and discussed the results of the legislative session with Rep. Jim Magnus and Rep. Danny Ferguson.

All Small Business Council members have been included as ex-officio members of all other State Chamber/AIA committees. This will allow small business owners to keep up with important legislative issues that apply to the entire business community and inject the small business viewpoint into these other committees.

Communications

We use a variety of communications materials and tools to successfully provide members and others with information of importance. This past year we received excellent feedback on our daily legislative e-mail and on the new formats for some of our main printed materials.

In past legislative sessions, we used a daily telephone message recorded on a toll-free number to update members of what had happened the previous day in the General Assembly and what was likely to be considered that day. This year we took our grass-roots lobbying efforts to a new level with a comprehensive daily message that was e-mailed to our members each morning and posted on our web site.

Our daily legislative report outlined the day's most important issues. Distributing it by broadcast e-mail proved to be a quick, efficient means of providing needed information for contacting state senators and representatives in a timely manner to voice pro-business opinions on legislation. We also used broadcast e-mails and faxes throughout the year to quickly communicate with our members on upcoming events, state and federal issues and other news.

At the end of the legislative session, we produced a printed summary detailing the bills we tracked on behalf of the business community. This reference piece lists by subject matter proposed bills that became law and others that were defeated. We sold advertising space in the summary for the first time this year, allowing us to upgrade to a professionally designed, four-color cover. Its contents also were posted on our web site.

We created a multipurpose informational piece for use on our annual Washington trip. It met our objective of bringing together what in the past had been separate materials into one printed piece that could easily tuck into a portfolio or personal organizer. We continued to publish our newsletterПolicyWatch�in a summary format.

Our communications efforts were recognized last fall by the Arkansas Chapter of the International Association of Business Communicators with Bronze Quill awards for our overall program, a speech and a press release.

Membership

A sincere thank you goes out to all of our members who renewed their State Chamber/AIA membership this year. The state of the economy has had a major impact on all of us and your continued support of our organization is greatly appreciated.

The 2000 membership survey provided over 900 e-mail addresses enabling us to reach more than 75 percent of our membership on a daily basis during the 83rd General Assembly. A vital part of our job is to keep you informed on legislation that affects your business; please keep us informed on corrections so you don't miss important information and announcements.

The Membership Committee, under the guidance of chairman Eric Barkley of Reliant Energy Arkla, met twice during the fiscal year. We would like to welcome George Wheatley of Waste Management as our new chairman. At the end of the fiscal year our membership consisted of 1,240 companies and organizations.

Major Events

About 130 people from Arkansas participated in the 42nd Annual Salute to the Arkansas Congressional Delegation on May 5-8. Sen. Blanche Lincoln served as emcee for the banquet at the Wyndham City Center Hotel in Washington, D.C. Other events included luncheons with Congressmen Marion Berry, Vic Snyder, Asa Hutchinson and Mike Ross, a reception with Sen. Lincoln and Sen. Tim Hutchinson, and a briefing at the U.S. Chamber of Commerce.

Robert L. Brown, owner of Technical Machining Services in Rogers, was named Small Business Person of the Year at the 11th Annual Arkansas Small Business Awards Luncheon on June 4 at the Hilton Inn Riverfront in North Little Rock. Gov. Mike Huckabee addressed a crowd of about 275 at the event, which was hosted by the State Chamber/AIA to honor the U.S. Small Business Administration's Small Business Persons of the Year.

Issues Briefings

Area issues briefings provide an excellent opportunity for State Chamber/AIA staff to meet with members and other business and community leaders around the state and update them on issues of importance as well as State Chamber/AIA activities on their behalf. Kenny Hall reported on the 83rd General Assembly, including updates on workers' compensation, education, healthcare, challenges to business, our grass-roots lobbying network and the continuing impact of term limits.

Cities visited were Batesville, Clinton, El Dorado, Fayetteville, Fort Smith, Harrison, Jonesboro, Maumelle, Newport, North Little Rock, Pine Bluff, Searcy, Springdale and West Memphis, with other briefings scheduled for Conway and Van Buren.

Seminars

Our seminar schedule has been expanded considerably over the past year, with both Bill Paddack and Linda Bennett planning and implementing educational sessions for our members and others. Besides the Annual Conference on Current Employment Law Issues and Operating Union Free, we have added FMLA and ADA Updates, Controlling the Cost of Unemployment Compensation, Cycle Time Reduction, Workers' Comp Update and Drug-Free Workplace. We have worked closely with the Arkansas Association of Two-Year Colleges and its WorkForce Training Consortium to develop a series of performance leadership workshops designed to help employers bring their employees into effective leadership positions.