March 5th Legislative Update:
This week the 93rd Arkansas General Assembly steamed ahead into another month, and they're now one week closer to the end of the session. Legislative work on the floor and in committees remains very active, and bills continue to be filed. While some tax matters have advanced, most remain held in the Revenue and Tax Committees to see how much room may be available for additional tax cuts.
Things appear to be closer to lining up for the revenue stabilization act, which will set spending levels for the state. In addition, the legislature is soon expected to make determinations on which, if any, proposed constitutional amendments to consider take up or bring before the voters.
We continue to monitoring several bills, and we continue to represent our policy resolutions in regard to matters before the legislature.
Below is a brief summary of legislative matters we are following. This summary will be updated throughout the legislative session, which is expected to carry on through at least April 16th.
Plant Board
As previously noted, there've been two bills in the legislature proposing to reform the nomination and appointment process for the Arkansas State Plant Board. Both bills (SB80, by Senator Dave Wallace, and HB1210 by Representative David Hillman) were pending in the Senate Agriculture Committee prior to this week.
During the Senate Agriculture Committee hearing on March 2nd, a substitute amendment was filed to HB1210. The substitute amendment represented a compromise among members of both the House and Senate Agriculture Committees and was sponsored by all members of the two committees. The committee approved the bill as amended on March 2nd, and the Senate approved the bill on March 4th by a vote of 29-1. It now goes back to the House for consideration. Below is a summary of the bill (HB1210) as amended.
Current law states that 9 of the 16 voting members of the Plant Board are to "elected" by their respective associations with no direct role of the Governor in the appointment process.
Short summary of HB1210 as amended:
- Total number of voting members increased to 17 (Plant Board maintains powers and duties regarding rulemaking and enforcement)
- Row crop farmer representation increased with addition of 2 new row crop producer seats and combination of horticulture (horticulture society) and green industry (nurserymen) seats
- Organizations and associations retain seats and their role in recommending persons to serve
- The bill includes the combining of 2 existing seats into 1 where it was deemed that the seats were somewhat duplicative and industry organizations seemed small or not well organized
More specifics:
- Horticulture and Green Industry (nursery) seats were combined with appointment authority vested in Gov and a confirmation process by Senate (these two associations still able to nominate)
- Every organization making nominations will be required to submit at least 2 nominees, Governor would appoint, and Senate would confirm
- 2 new row crop farmer seats to be appointed by the Gov & confirmed by the Senate (no explicit tie in with trade organization/producer interest group)
- One of the former farmer at-large seats was converted to a soybean grower;
- and the other was a "feed grain" grower
- Other industry orgs with seats: Plant Food Association (fertilizer); Ark Aerial Applicators Association; Forestry Association; Oil Marketers Association; Crop Protection Association; Arkansas Pest Management Association;
- There remains 2 seats for livestock and forage respectively
- There remains a seat for cotton farmer and for rice farmer
HB1210 remains largely consistent with the policy resolutions of the Ag Council, which states that "we support changing the nomination and appointment process for Plant Board seats so they are all consistent with the processes related to research and promotion boards where the industry organizations would recommend nominees to serve and the governor would appoint." The Ag Council has additional policy language related to the composition of the board that supports the addition of two additional row crop farmer seats, which reads, "we support the addition of two new row crop farmer seats to the Plant Board to represent producer interest organizations, including the Ag Council."
The Arkansas State Supreme Court is currently considering litigation that directly correlates to the Plant Board's composition as it relates to the nomination and appointment process. Oral arguments are expected to be heard in the coming weeks. It's not clear on when a decision would be reached by the court.
HB1471 a bill by Representative Hillman to amend 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. This bill was approved by the House on February 23rd with a vote of 83-9, and it now goes to the Senate Agriculture Committee for consideration. 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 Arkansas General Assembly continues to consider a broad range of legislation related to tax law, with many impacting agriculture. We will continue to monitor bills under consideration and advocate for tax policy consistent with our policy resolutions. The House and Senate Revenue and Tax Committees continue to take considerable time examining various legislative proposals related to tax policy. Tax policies with budget impacts will likely be held until the legislature has more clearly determined its budget and how much room there is for tax changes that may impact revenues.
However, last week the Arkansas General Assembly did approve a significant tax relief measure for farmers and agriculture businesses that was also signed into law by Governor Hutchinson. The measure by Representative Eaves (HB1361) excludes from the definition of income the financial aid that a taxpayer received through certain federal coronavirus relief programs, including loan forgiveness under the Paycheck Protection Program (PPP); Small Business Administration grants under the Economic Injury Disaster Loan program; and payments received under the Coronavirus Food Assistance Program (CFAP).
Below are a few of the tax policy bills we continue to follow. Additional proposed bills are still expected to be introduced in the near future.
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 bill was approved by the House on February 22nd (96-0) and the Senate on February 25th (33-0), and signed by Governor Hutchinson on March 2nd. This Act 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 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 is pending before the Senate Revenue and Tax Committee. This bill is consistent with Ag Council policy resolutions.
HB1209 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 was approved by the House Revenue and Taxation Committee and is scheduled to be considered by the full House next week. This bill is consistent with Ag Council policy resolutions.
HB1468 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 awaits consideration in the House Revenue and Taxation Committee.
Flood Control
HB1251 a bill by Representative Bentley to amend the Law Concerning Improvement District And Protection District Reporting Requirements For Collection Of Assessments By County Collectors. This bill was approved by the full House on February 4th with a vote of 94-3 and the full Senate on March 3 with a vote of 33-0. The bill, which was amended in the Senate now returns to the House for consideration.
HB1250 (now Act 267) a bill by Representative Bentley to amend the Law Concerning Assessments In Certain Levee Or Drainage Improvement Districts. This bill was approved by the full House on February 4th with a vote of 75-15 and the full Senate on March 2nd with a vote of 34-1. It was signed into law by Governor Hutchinson on March 4th.
HB1249 (now Act 266) a bill by Representative Bentley to Create A Procedure For The Dissolution Or Abolition Of A Levee District. This bill was approved by the full House on February 4th with a vote of 96-0 and the Senate March 2nd with a vote of 35-0. It was signed into law by Governor Hutchinson on March 4th.
HB1248 (Now Act 265) a bill by Representative Bentley to amend the Law Concerning Consolidation Of Certain Levee Districts And Boards. This bill was approved by the full House on February 4th with a vote of 95-0 and the Senate on March 2nd with a vote of 35-0. It was signed into law by Governor Hutchinson on March 4th.
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 has passed the Senate and House, and it was signed by Governor Hutchinson as Act 67. This bill is consistent with Ag Council policy supporting expansion of broadband services in Arkansas.
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.
Other:
Sale of State Lands
SB241 A bill by Senator Caldwell to amend fhe Law Concerning The Sale Of State Land; To Establish A Process To Sell State Land; And To Declare An Emergency. Referred to the Senate State Agencies and Governmental Affairs Committee.
SB358 A bill by Senator Caldwell to amend fhe Law Concerning The Sale Of State Land; To Establish A Process To Sell State Land; And To Declare An Emergency. Referred to the Senate State Agencies and Governmental Affairs Committee.
Ownership of Agricultural Lands by Foreign Entities
SB312 A bill by Senator Blake Johnson to restrict foreign ownership of agricultural lands in Arkansas. Bill referred to the Senate Agriculture Committee for consideration.
Daylight Savings Time
HB1017 A bill by Representative Rye to provide a process for permanent adoption of daylight savings time. Bill approved by the House on February 9th with a vote of 71-5. Bill now before the Senate State Agencies and Government Affairs Committee for consideration.
State Meat Inspection Program
HB1315 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 House Agriculture Committee on February 3nd and the full House on February 4th with a vote of 95-0. This bill is now pending before the Senate Agriculture Committee.
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.
HB1055 A bill by Representative Fite (same as SB23). This bill is pending before the House Insurance and Commerce Committee.
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. 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.
Critical Infrastructure
HB1321 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 Judiciary Committee on March 4th and will soon be considered by the full House.
Workers Compensation
HB1488 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. On March 1, the House approved the bill 74-9. It now is under consideration in the Senate Public Health, Welfare and Labor Committee.
Constitutional Amendments
February 10th marked the final day to file measures aimed at amending the Constitution of the State of Arkansas. In total, 43 such measures were filed for consideration. The legislature will consider the measures. They may refer up to three of the proposed amendments for voter consideration.
Full List of Proposed Constitutional Amendments
Appropriation Acts
HB1084 An Act For The Arkansas Rice Research And Promotion Board Appropriation For The 2021-2022 Fiscal Year. This bill was unanimously approved by the House and Senate this week, and it now awaits the signature of Governor Hutchinson.
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 An Act For The University Of Arkansas - Division Of Agriculture Appropriation For The 2021-2022 Fiscal Year.
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.
SB447 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.
SB398 An Act to provide $2.25 million to the Department of Agriculture to distribute as grants to fairs throughout Arkansas.