April 23th Legislative Update:
The 93rd Arkansas General Assembly has reached the final days of the legislative session. With the Revenue Stabilization Act approved by the Joint Budget Committee, the House and Senate are expected to wrap up its work early next week. The General Assembly has also closed in on the three constitutional amendments that they will submit to voters for consideration. Committee work is coming to a close, and just a few bills remain in line for final consideration in the House and Senate.
The General Assembly is expected to return in the fall to address redistricting, and it's possible that additional tax cuts and a limited list of legislative items could be on the table at that time.
Below is a brief summary of some of the legislative matters we've followed this session. Throughout this legislative session, we have focused on representing our policy resolutions in regard to all matters before the legislature.
Plant Board
HB1210 a bill by Representative David Hillman is now Act 361. This new law reforms the membership and the nomination and appointment procedures of the Arkansas State Plant Board. Act 361 is largely consistent with the policy resolutions of the Ag Council.
HB1471 a bill by Representative Hillman is now Act 364. It amends the abandoned pesticides disposal act to allow for an increase in registration fees from $50 per registered product to up to $100 to provide additional resources to the abandoned pesticides disposal program, which helps collect unwanted pesticides throughout Arkansas. We support this program and the important benefits it provides in providing safe and environmentally responsible method of disposing of unwanted pesticides.
Tax Policy
The General Assembly considered a broad range of legislation related to tax law throughout the session, with many impacting agriculture. We monitored several bills under consideration and advocated for tax policy consistent with our policy resolutions.
The House and Senate Revenue and Tax Committees took considerable time examining various legislative proposals related to tax policy, but in the end, with the exception of making federal COVID-19 aid not taxable as income (an estimated $182 million revenue impact), the legislture opted to adopt only a limited amount of tax cuts that amounted to roughly $20 million. Included in the limited list of tax cuts adopted was HB1314, which enhances the Water Conservation & Development Tax Credits for on-farm investments in land leveling, surface water reservoirs, tail water recovery systems, and adoption of monitoring and control systems for irrigation.
The prudent decision making by the legislature with regard to tax policy was largely due to uncertainty of the true fiscal health of the state due to the influx of pandemic aid and direct limitations placed on federal aid as it related to using the funds as an offset to state tax cuts. There is a possibility of the legislature considering additional tax cuts when they return in the fall for redistricting.
Below are a few of the tax policy bills we followed this session.
HB1361 (now Act 248) a bill by Representative Eaves to exclude from income for state income tax purposes income derived from certain federal disaster aid programs beginning in tax year 2019, including paycheck protection program (PPP) and other COVID related emergency aid such as the Coronavirus Food Assistance Program (CFAP). Market Facilitation Program (MFP) payments in tax year 2020 are already exempt from state taxes under Arkansas law 26-51-316. This Act is consistent with Ag Council policy resolutions.
HB1209 (Now Act 362) a bill by Representative Jett to Create The Elective Pass-through Entity Tax Act; To Impose A Tax On Pass-through Entities; And To Exclude Certain Income From Gross Income For Pass-through Entities. Analysis from Arkansas State Chamber of Commerce: This bill will help about 40,000 Arkansas businesses reduce their federal taxes by an estimated $50 million or more while generating $4 million in state revenue. This bill is consistent with Ag Council policy resolutions.
HB1314 a bill by Representative Hillman to enhance the Water Resource Conservation and Development Act. This bill proposes to expand on tax credits available for landowners looking to make land improvements and investments in eligible irrigation systems to reduce groundwater consumption. This bill is was approved by the full House on April 15th with a vote of 96-0 and the full Senate with a vote of 34-0. It is expected to be signed into law by Governor Hutchinson. This bill is consistent with Ag Council policy resolutions.
SB253 a bill by Senator Beckham to amend the sales tax treatment for certain utilities used by certain qualifying agriculture structures. The bill expands eligible utility uses in agriculture. It was referred to interim study. This bill is consistent with Ag Council policy resolutions.
HB1468 (now Act 586) a bill by Representative Jett to create an Independent Tax Appeals Commission for Arkansans. This bill would lead to the creation of a new commission to provide for an independent appeals process to resolve disputes between the Arkansas Department of Finance and Administration and taxpayers. The legislation proposes to create a three person commission comprised of individuals nominated by the Society of Certified Public Accountants, the Arkansas Supreme Court, and the Arkansas Bar Association. The Governor would appoint the individuals to serve on the commission from a list of nominees provided by each entity. This bill was approved by the full House on March 18th with a vote of 95-0 and approved by the Senate on April 1 with a vote of 34-1. It was signed into law by Governor Hutchinson on April 6th.
HB1705 (now Act 593) a bill by Representative Jett to change the state's tax appeals procedures to include the proposed Independent Tax Appeals Commission for Arkansas as proposed by HB1468. This bill was also approved by the House on March 18th with a vote of 97-0 and approved by the Senate on April 1 with a vote of 34-0. It was signed into law by Governor Hutchinson on April 6th.
HB1778 a bill by Representative Jett to create a new tax credit program for activities aiding young and beginning farmers and for young and beginning farmers. This bill was referred to the House Revenue & Tax Committee for consideration. During a hearing on this bill, it was announced by the bill sponsor that this bill would be referred to interim study for futher consideration following the session.
HB1817 a bill by Representative Beaty, Jr., and Senator Gilmore to make Arkansas mirror federal tax law regarding section 179 deductions for depreciation and expensing of property. This bill received a fiscal impact report from the Department of Finance and Administration (DFA) on April 8th. This bill was considered by House Revenue and Tax Committee, but no action was taken. This bill is consistent with Ag Council policy.
HB1818 a bill by Representative Beaty, Jr., and Senator Gilmore to provide a sales tax exemption for used parts for farm machinery and equipment. This bill received a fiscal impact report from the Department of Finance and Administration (DFA) on April 8th. This bill was considered by House Revenue and Tax Committee, but no action was taken. This bill is consistent with Ag Council policy.
HB1820 a bill by Representative Vaught to provide a sales tax exemption for replacement parts and labor for agricultural equipment and machinery. This bill has not yet received a fiscal impact report from the Department of Finance and Administration (DFA). This bill was referred to the House Revenue and Tax Committee for consideration. This bill is consistent with Ag Council policy.
Flood Control
HB1251 (now Act 359) a bill by Representative Bentley to amend the Law Concerning Improvement District And Protection District Reporting Requirements For Collection Of Assessments By County Collectors.
HB1250 (now Act 267) a bill by Representative Bentley to amend the Law Concerning Assessments In Certain Levee Or Drainage Improvement Districts.
HB1249 (now Act 266) a bill by Representative Bentley to Create A Procedure For The Dissolution Or Abolition Of A Levee District.
HB1248 (now Act 265) a bill by Representative Bentley to amend the Law Concerning Consolidation Of Certain Levee Districts And Boards.
Water Conservation
HB1773 (Now Act 563) a bill by Representative Hillman to amend the Water Conservation & Development Act to extend the required project completion date from 3 to 5 years from approval of credit. This bill is consistent with Ag Council policy. This bill was approved by the House on March 23 with a vote of 95-0 and the Senate on March 31 with a vote of 35-0. It was signed into law by Governor Hutchinson on April 5th.
Broadband
SB74 (Now Act 67) a bill by Senator Hill to amend The Telecommunications Regulatory Reform Act Of 2013; And To Declare An Emergency. This bill proposes to expand on government entities abilities to invest in and develop broadband communications systems. This bill is consistent with Ag Council policy supporting expansion of broadband services in Arkansas.
SB605 a bill by Senator Mark Johnson to exempt from sales taxes broadband equipment used in rural areas. This bill received a fiscal impact report from the Department of Finance and Administration on April 19th. This bill was considered by Senate Revenue and Tax Committee, but no action was taken. This bill is consistent with Ag Council policy.
Right to Repair
SB461 a bill by Senator Garner was introduced on March 3rd. His bill proposes to require manufacturers of farm machinery and equipment to make available to independent repair businesses and equipment purchasers the information, tools and access to make repairs to the machinery or equipment. The bill also prohibits the original manufacturers from intentionally disrupting the machinery and equipment operation abilities through software or firmware programs that may coerce buyers to purchase additional products or services to continue the operation abilities of the equipment or machinery. This bill, if enacted, proposes to go into force January of 2022. The bill was referred to the Senate Agriculture Committee for consideration.
Hemp
HB1640 (now Act 565) a bill by Representative Hillman to repeal the Industrial Hemp amend the Industrial Hemp Act and replace with the Industrial Hemp Production Act. This bill proposes to move the current industrial hemp research program into a more permanent industrial hemp production program. This change recognizes changes in federal law, which allows for the industry to expand beyond research into commercial scale production. It also offers additional policy changes sought by participants in the sector. The statute proposed is consistent with Ag Council policy related to commercial hemp production. This bill was approved by the House on March 22 with a vote of 93-1 and the Senate on March 31 with a vote of 34-0. It was signed into law by Governor Hutchinson on April 5th.
Other:
Sale of State Lands
HB1694 (now Act 564) A bill by Representative Hollowell to amend fhe Law Concerning The Sale Of State Land; To Establish A Process To Sell State Land; And To Declare An Emergency. This bill proposes to place limits on the ability of the University of Arkansas to sell the Pine Tree Research Station to private entities and requires that the land be made available for public use for hunting and fishing. This bill was approved on March 22 by the House with a vote of 88-1 and on March 31 by the Senate with a vote of 31-3. It was signed into law by Governor Hutchinson on April 5th.
SB661 A bill by Senator Ingram as amended would provide $5 million in funding to the University of Arkansas System for rice research in addition to other initiatives including scholarships for East Arkansas students attending higher education schools under the management of the Arkansas State University system. The proposal of $5 million for rice research is aimed at offsetting some lost funds due to the enactment of Act 564, which barred the University of Arkansas's proposed sale of land at the Pine Tree Research Station. The legislation proposes to utilize unspent funds previously designated for greyhound dog racing, which will cease operations in 2022. This bill was withdrawn by the sponsor on April 19th.
Ownership of Agricultural Lands by Foreign Entities
SB312 A bill by Senator Blake Johnson to restrict foreign ownership of agricultural lands in Arkansas. This bill was approved by the full Senate on March 4th with a vote of 33-1. The bill was amended multiple times in the House before being returned to the Senate on April 22nd. The amended bill represents a significant departure from the original bill, and it now proposes to set aside existing state reporting requirements of foreign ownership of agricultural lands and instead proposes to mandate the transfer of USDA reported information to the Arkansas Department of Agriculture. The bill was returned to the Senate for further consideration.
Daylight Savings Time
HB1017 A bill by Representative Rye to provide a process for permanent adoption of daylight savings time. This bill was approved by the House on February 9th with a vote of 71-5, and is now before the Senate State Agencies and Government Affairs Committee for consideration.
Feral Hogs
HB1636 (Now Act 692) A bill by DeAnne Vaught to amend state laws related to Feral Hogs. The bill was approved by the House on March 11th with a vote of 94-0 . The Senate amended the bill and approved the measure on April 1 with a vote of 31-1. The House concurred with the Senate amendment on April 8th with a vote of 92-0, and it was signed into law by Governor Hutchinson on April 13.
Homemade Foods & Drinks
SB248 A bill by Senator Ballinger to broadly accept the sale of homemade food and drinks and exempt makers of such products from certain certificates, licenses, and inspections. The bill was approved by the full Senate on April 15 with a vote of 23-4. The bill will amended in the House and returned to the Senate with a vote of 87-0. The Senate is expected to vote on this bill as amended Monday.
State Meat Inspection Program
HB1315 (Now Act 418) A bill by Representative Vaught to create a State Meat Inspection Program; To Amend The Arkansas Meat And Meat Products Inspection Act; To Transfer Authority Over Meat Inspection To The Department Of Agriculture; And To Declare An Emergency. This bill is consistent with Ag Council policy, which supports establishing a meat inspection program to expand on feed markets in Arkansas. This bill was approved by the full House on February 4th with a vote of 95-0 and by the Senate as amended on March 11th with a vote of 34-0. House voted 92-0 on March 18 to concur in the Senate amendment and bill was signed into law by Governor Hutchinson on March 23.
Energy & Public Service Commission
SB23 A bill by Senator Johnson to establish the Electric Cooperative Corporation Self-regulation Act. This bill proposes to exempt electric cooperative utility providers from being subject to Public Service Commission (PSC) regulations. This bill is pending before the Senate Insurance and Commerce Committee. This bill was referred to interim study by committee on March 17.
HB1055 A bill by Representative Fite (same as SB23). The sponsor of this bill withdrew the bill from consideration in the House on March 10.
HB1787 A bill by Representative Fite proposes to change the net metering laws of Arkansas for renewable energy production, including solar, and to modify the authority of the Public Service Commission (PSC) in relation to net metering. The bill would lessen the economic benefits of adopting solar arrays and developing solar power systems by reducing net metering rates and limiting the size of solar power production systems eligible for net metering. This bill is not consistent with Ag Council policy, which supports the continuation of state policies that encourage the development of renewable energy production, including solar, especially as it relates to the potential of our members to participate in the production and distribution of renewable energy. This bill was referred to the House Insurance & Commerce Committee where it was amended several times, but no further action was taken.
Arkansas Economic Development Commission & Trade Policy
SB252 A bill by Senator Garner to prohibit the Arkansas Economic Development Commission (AEDC) from establishing or maintaining an office in China. This bill was voted down in the State Agencies Committee on February 4th and later voted out of committee on March 9th and approved by the Senate on March 10th with a vote of 19-8. During consideration before the House Agriculture Committee it failed to receive a motion for a vote during committee consideration. This bill is not consistent with Ag Council policy as it aims to diminish government resources supporting the trade of agricultural commodities to one of the largest export markets for Arkansas grown commodities. Bill was referred to interim study on April 19th.
Critical Infrastructure
HB1321 (Now Act 712) A bill by Representative Gazaway to define certain types of enclosed areas as critical infrastructure and enhance criminal penalties for acts of criminal mischief and trespass offenses on such properties. Included in this definition of critical infrastructure are food processing and manufacturing facilities. This bill was approved by the House on March 9th with a vote of 94-0. It was amended in the Senate by Senator Clark on March 15th and approved by the Senate on April 1 with a vote of 34-0. The House approved the measure as amended with a vote of 90-0.
Game and Fish Commission
SB670 A bill by Senator Caldwell authorizing the Arkansas Game and Fish Commission to promulgate rules to adjust hunting and fishing license fees. This bill was voted out of the Senate Agriculture Committee on April 13th but was later re-referred back to the same committee on April 14 for further consideration.
SB523 A bill by Senator Caldwell authorizing the Arkansas Game and Fish Commission to adjust hunting and fishing license fees. This bill was referred to the Senate Agriculture Committee for consideration.
SB697 A bill by Senator Caldwell to establish hunting and fishing license fees for the Arkansas Game and Fish Commission and to authorizing the Arkansas Game and Fish Commission to adjust hunting and fishing license fees in future years. This bill was referred to the Senate Agriculture Committee for consideration.
HCR1014 A concurrent resolution by Representative Wardlaw and Senator Pitsch to recognize the contributions of rice production and waterfowl to the economy, environment, tourism, and general quality of life in Arkansas. This resolution was read and agreed to by both the House and Senate and was approved by Governor Hutchinson on April 12.
Workers Compensation
HB1488 (now Act 353) A bill by Representative Gonzales and Senator Gilmore is designed to allow an employee to make a claim under workers’ compensation for COVID-19 if the employee proves it is a workplace exposure. This bill provides protection for employers against workers’ compensation claims becoming tort claims.
SB530 A bill by Senator Wallace that seeks to decrease the amount of a workers' compensation third-party liability that an employer, carrier, or (newly added) self-insured carrier is entitled to, from two- thirds to one-half of the proceeds that remain after payment of costs. It also provides that the rights of the employer, carrier, or self-insured entity to recover benefits paid as a result of either settlement or judgment against the third party are absolute. On March 29th the Senate voted the bill, but it failed to receive the 2/3 required for approval with a vote of 19-12. The bill was withdrawn by the bill sponsor on April 7th.
Occupational Licensing Requirements
HB1667 by Representative Furman proposes to reduce occupational licensing requirements in Arkansas. This bill was introduced on March 8th and was referred to the House Public Health, Welfare, and Labor Committee for consideration. The committee failed to approve the bill on a voice vote in the committee on April 1.
Constitutional Amendments
The General Assembly considered 43 proposals aimed at amending the Constitution of the State of Arkansas. Being restricted to only referring up to three proposed amendments, the General Assembly appears to have settled on the following:
HJR1005 - A joint resolution by Representative David Ray to change the processes for citizen led ballot initiatives for initated acts and constitutional amendments. The measure, if approved by voters, would require 60% approval of voters to adopt ballot initiatives to amend the state constitution or state law. The measure was approved by the House with a vote of 74-18 on April 15 and the Senate on April 22 with a vote of 23-6.
SJR10 - A joint resolution by Senator Davis proposing to permit the General Assembly to convene in an extraordinary session by a joint written proclamation of the speaker of the House and the Senate president pro tempore or by the submission of the signatures of two-thirds of the members of the 35-member Senate and the 100-member House. The measure was approved by the Senate with a vote of 30-2 on April 21 and the House on April 22 with a vote of 82-9.
SJR14 - A joint resolution by Senator Rapert proposing to amdend the constitution to prohibit the government from burdening a person's freedom of religion unless the government can demonstrate that it furthers a compelling government interest and is the least restrictive means of furthering that interest. The measure was approved by the Senate with a vote of 27-4, and it is expected to be heard in the House Monday.
Revenue Stabilization Act (RSA)
The proposed Revenue Stabilization Act (RSA) establishes a $5.84 billion budget for fiscal year 2022. The mirroring House and Senate RSA bills would distribute $5.65 billion to programs in Category A; $73.7 million in Category B; $99.7 million in Category C; and $17.1 million in Category D. The fiscal year 2022 budget is based on an estimated net general revenue forecast of $6.06 billion before the Legislature's tax cut measures which collectively reduce projected net general revenue by $203.1 million. The budget also projects a surplus of $17 million.
HB1949
https://www.arkansasonline.com/news/2021/apr/23/panel-advances-584b-budget-plan/?news-arkansas
https://talkbusiness.net/2021/04/governor-legislative-leaders-tout-budget-management-outline-plans-to-recess-and-hold-special-session-this-fall/
Appropriation Acts
HB1084 (Act 286) An Act For The Arkansas Rice Research And Promotion Board Appropriation For The 2021-2022 Fiscal Year.
HB1075 (Act 13) An Act For The Arkansas Corn And Grain Sorghum Promotion Board Appropriation For The 2021-2022 Fiscal Year.
HB1074 (Act 12) An Act For The Arkansas Soybean Promotion Board Appropriation For The 2021-2022 Fiscal Year.
HB1073 (Act 11) An Act For The Arkansas Wheat Promotion Board Appropriation For The 2021-2022 Fiscal Year.
SB37 (Act 4) An Act For The Arkansas Catfish Promotion Board Appropriation For The 2021-2022 Fiscal Year.
SB221 (Act 768) An Act For The University Of Arkansas - Division Of Agriculture Appropriation For The 2021-2022 Fiscal Year. This bill was voted out of Joint Budget on April 8th and approved by the full House 93-0 on April 15. It now heads to the Senate for consideration.
HB1178 (Act 39) An Act For The Department Of Agriculture - Arkansas Natural Resources Commission Appropriation For The 2021-2022 Fiscal Year.
SB164 An Act For The Department Of Agriculture Appropriation For The 2021-2022 Fiscal Year. The appropriation bill was amended on February 23rd to allow for the use of spending up to $750,000 for a meat inspection program and $200,000 for purposes of carrying out peanut inspections for the peanut industry. It was amended on March 11th to include an appropriation of $3million to carry out a feral hog eradication program. This bill was approved by the Senate 34-0 on April 20 and the House 95-0 on April 21 and is awaiting signature from the Governor.
SB447 (now Act 582) An Act to increase funding for the University of Arkansas Division of Agriculture by providing $16.5 million of general funding to go towards the Northeast Arkansas Rice Research and Extension Center. This bill also contains language restricting the University from selling land at the Pine Tree Research Station. This bill was approved by the Senate on April 1 with a vote of 30-5 and the House with a vote of 88-0. It was signed by Governor Hutchinson on April 7th.
SB398 An Act to provide $2.25 million to the Department of Agriculture to distribute as grants to fairs throughout Arkansas. This bill was approved by the Senate 33-0 on April 19 and the House 86-2 and is awaiting signature from the Governor.