Daily Legislative Update                    

Monday, February 18, 2013

36^th Day of the 89^th General Assembly

HOT TOPICS – STATE CHAMBER/AIA TAX BILLS

TAX REDUCTION FOR MANUFACTURERS AND IPPs

***HB 1218 by Rep. Lane Jean and Sen. Bill Sample seeks to further reduce the sales taxes paid by manufacturers classified in NAICS codes 31-32-33. It would reduce the sales tax on manufacturers’ utilities from 2.625 percent to 1 percent in 2013 and exempt them from sales tax in 2014. The bill also continues the phased reduction of the excise tax on the purchase of natural gas used in the production of electricity with exemption occurring in 2016. However, the one-eighth (1/8) of one percent conservation tax and the temporary sales tax of one-half (1/2) of one percent highway tax would not be eliminated for manufacturers or independent power producers. HB 1218 has been referred to the House Revenue and Tax Committee.                        _

NET OPERATING LOSS CARRY-FORWARD

***SB 108 by Sen. Keith Ingram and Rep. Jeremy Gillam would extend the period for which a net operating loss may be carried forward for purposes of state income tax to 10 years or until the loss has been exhausted or absorbed by the taxable income of a succeeding year, whichever is earlier. State and Federal Net Operating Loss (NOL) tax rules apply to businesses that report a taxable loss for a given tax year. These losses can be applied against previous years’ earnings or against future earnings. More than 40 states permit NOL carryovers of 10 – 20 years. Eighteen (18) states permit NOL carry back and carry forward. The IRS permits a carry back of three years and carry forward of 20 years. Arkansas is one of seven states that restrict NOL carry forward to five years only. SB 108 has been referred to the Senate Revenue and Tax Committee.      _

TAX REDUCTION FOR REPAIR AND REPLACEMENT PARTS

***SB 334 by Sen. Jake Files and Rep. Tommy Wren would provide a refund of sales and use taxes for expenditures on repairs and replacement of certain machinery and equipment used directly in manufacturing. The bill sets a six-year schedule for gradually increasing the refund to 100 percent in 2018. However, the one-eighth (1/8) of one percent conservation tax and the temporary sales tax of one-half (1/2) of one percent highway tax would not be eliminated. SB 334 has been referred to the Senate Revenue and Tax Committee.                                                  _         

Please contact your legislators and tell them about the impact these job-creating and job-protecting tax reductions would have on your businesses.

TODAY AT THE CAPITOL

House convenes at 1:30 p.m.

Senate convenes at 1:30 p.m.

Committee Meetings:

JOINT:

SENATE:

HOUSE:

ISSUES

EMINENT DOMAIN

***HB 1192 by Rep. Kim Hammer would prohibit improvement districts from using the power of eminent domain to acquire lands or rights-of-way for their use. It received a Do Pass recommendation from the House Judiciary Committee last week and is on today’s House calendar.                              _

STATE CHAMBER/AIA BILL TRACKING

To date, the House has filed 387 bills and the Senate has filed 340 bills.

The State Chamber/AIA is tracking 196 bills and resolutions.

New bills added to State Chamber/AIA tracking today:

Please visit our tracking site for the complete, searchable list of bills being tracked. The full text of each bill is available at the site.

THIS WEEK AT THE CAPITOL

Committee Meetings for Tuesday, February, 19^th:

JOINT:

SENATE:

HOUSE:

ISSUES

UNEMPLOYMENT INSURANCE

***HB 1018 by Rep. Jim Nickels was defeated by a vote of 8-10 in the House Public Health, Welfare and Labor Committee last week. The State Chamber/AIA opposed this bill that would increase the maximum potential unemployment benefits in a benefit year from 25 to 26 times the worker’s weekly benefit amount. Rep. Nickels could choose to bring this bill before the committee one more time, but we do not expect him to do so in the near future.                          _

***HB 1261 by Rep. Denny Altes would increase the time period for filing an appeal to the Department of Workforce Services regarding an administrative decision. It is on the House Public Health, Welfare and Labor Committee agenda.                            _

***SB 38 by Sen. Jeremy Hutchinson would require applicants and recipients of unemployment benefits to be tested for illegal drug use. Sen. Hutchinson presented the bill to the Senate Public Health, Welfare and Labor Committee last week, but agreed to pull the bill down while the Department of Workforce Services conducts a fiscal impact study.                                                                          _

EMPLOYEE HANDGUNS ON COMPANY PROPERTY

***HB 1269 by Rep. John Catlett would prohibit an employer from basing an employee’s employment status on concealed handgun licensure and would require employers to permit employees with handgun licenses to possess a handgun locked inside a vehicle in the employer’s parking lot. It is on the House Judiciary Committee agenda. We have received a significant amount of feedback from members and as such, and at the direction of the Executive Committee, the State Chamber/AIA is opposed to this bill in its current form.                                              _

CONTACTINFORMATION

State Senators: 501-682-2902

State Representatives: 501-682-6211

To view schedules, calendars, bill information and legislator information, visit:  www.arkleg.state.ar.us.

To view live stream video and audio from the Arkansas House of Representatives, visit www.arkansashouse.org.