Daily Arkansas Legislative Update Wednesday March 27, 2013

Wednesday, March 27, 2013

73^rd Day of the 89^th General Assembly

 STATE CHAMBER/AIA TAX BILLS

TAX REDUCTION FOR MANUFACTURERS AND IPPs

***HB 1218 by Rep. Lane Jean and Sen. Bill Sample remains on the House Revenue and Tax Committee agenda. It has been amended to remove the final step of the proposed excise tax reduction on one portion of the sales of utilities to manufacturers in NAICS codes 31-32-33, reducing the tax on sales of utilities to facilities that use combined-cycle gas turbine technology to 1 percent by 2015 (but not 0 percent, as in the last engrossment of the bill). The bill also continues the phased reduction of the excise tax on the purchase of natural gas used in the production of electricity. 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. _

 TAX REDUCTION FOR REPAIR AND REPLACEMENT PARTS

***SB 334 by Sen. Jake Files and Rep. Tommy Wren remains on the Senate Revenue and Tax Committee agenda. This bill would provide a refund of sales and use taxes for expenditures on repairs and replacement of certain machinery and equipment used directly in manufacturing. As originally drafted, the bill set 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. _

 It is not too late to contact your legislators and tell them about the importance of these job-creating and job-protecting tax reductions to your business.You may find contact information on the General Assembly’s website.

YESTERDAY AT THE CAPITOL

ISSUES

EMINENT DOMAIN

***SB 367 by Sen. Jim Hendren was scheduled for a Special Order of Business yesterday morning in the House Judiciary Committee, but Sen. Hendren did not run the bill. SB 367 provides for compensation of private property owners whose property loses fair market value as a result of a government regulatory program. It does not apply to a property owner if the regulatory program does not directly apply to the property. _

 TAX REFORM

The House Revenue and Tax Committee, which has rarely met this session, met twice yesterday. Two pieces of legislation that were considered may become a piece of the final tax package:

 ***HB 1585 by Rep. Charlie Collins would change the personal income tax rates by elevating the top tax rate from $34,000 to $44,000 and then lowering the top tax bracket from 7% to 6.875%.The bill also makes technical corrections to the tax code. The bill received a Do Pass recommendation from the House Revenue and Tax Committee. _

 ***HB 1966 by Speaker Davy Carter would increase the income tax exemption from 30 percent to 70 percent for capital gains over $5 million that are from investments made before January 1, 2014. It would revert back to the standard 30 percent exemption for such capital gains after January 1, 2014 and create a permanent 70 percent exemption for capital gains from the sale of Arkansas property acquired after that date and owned for more than one year before the sale. The bill received a Do Pass recommendation from the House Revenue and Tax Committee. A reduction of the capital gains tax has been a piece of the State Chamber/AIA Legislative Agenda for many years. _

 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 – Amendment No. 1

***SB 787 by Sen. Joyce Elliott is on the Senate Judiciary Committee agenda. As originally filed, this bill would require that the court appoint and the condemning entity pay for legal representation for property owners in any eminent domain proceeding who do not have attorneys. It would also require compensation for property taken to include costs of relocation. An amendment has been filed that replaces the original bill. The amendment would require the condemning utility to pay for legal representation for eminent domain proceedings and require that all eminent domain proceedings comply with federal law unless explicitly exempted. The amendment also adds an emergency clause. _

 UNEMPLOYMENT INSURANCE

***SB 575 by Sen. Linda Chesterfield received a Do Pass as Amended recommendation from the House Public Health, Welfare and Labor Committee yesterday. The amendment, which adds Rep. Hank Wilkins as the lead House sponsor, will be formally adopted on the House floor today. This bill would amend various provisions related to unemployment compensation, including the addition of a definition of misconduct in connection with work as a disqualification for benefits, procedure for recovery of overpayments and more. SB 575 was filed on behalf of the Department of Workforce Services. The State Chamber/AIA supports this bill. _

 ***SB 780 by Sen. Cecile Bledsoe was amended yesterday and has been re-referred to the Senate Public Health, Welfare and Labor Committee. The bill would add types of employee conduct which can disqualify persons from receiving unemployment benefits when the conduct leads to their termination. Amendment No. 1 adds an additional section that amends § 11-10-514(a), explicitly including “a willful disregard of the employer’s interest” within the definition of misconduct for purposes of this subchapter. It also removes proposed language explicitly making excessive or unauthorized absence grounds for disqualification for unemployment benefits. _

 ***SB 850 by Sen. Jim Hendren is on the Senate Public Health, Welfare and Labor Committee agenda. As originally drafted, the bill would reduce the rate of the Unemployment Stabilization Tax from 0.7 percent to 0.5 percent and, when assets of the Unemployment Compensation Fund are less than 0.4 percent of total payrolls during the preceding calendar, from 0.8 percent to 0.6 percent. Amendment No. 1 sets the effective date for the tax changes in this bill as 2014 rather than 2013. Amendment No. 2 adds an additional section that amends § 11-10-705(a), requiring an employer’s tax record to include a payment representing a stabilization tax payment on wages paid by the employer. The amendment also clarifies that the changes in this bill only apply to calendar years 2014 and after. _

 ***SB 857 by Sen. Alan Clark received a Do Pass as Amended recommendation from the House Public Health, Welfare and Labor Committee yesterday.The amendment, which adds Rep. Bruce Cozart as the lead House sponsor, will be formally adopted on the House floor today. This bill would require the Department of Workforce Services to enforce provisions concerning ineligibility for extended unemployment benefits for failure to accept or seek work and to report results to the Legislative Council quarterly. Amendment No. 1 would create specific requirements for the director’s reports to the Legislative Council and require the Department to facilitate electronic reporting of unemployment benefit recipients who refuse to take jobs or fail drug tests. It also would require that the Department notify employers with instructions for reporting such cases and remove liability for an employer who makes such a report with the belief that it is true. _

 ***SB 884 by Sen. Stephanie Flowers is on the Senate Public Health, Welfare and Labor Committee agenda. This bill would amend ACA 11-10- 210(f), exempting licensed unemployment agencies that report payments to individuals through IRS Form 1099 from the provisions of the section and would make the exemption retroactive through January 1, 2003. _

 ***SB 875 by Sen. Bart Hester is on today’s Senate calendar for amendment. Amendment No. 1 prevents the 10 percent reduction in weekly benefits mandated by this bill from reducing an individual’s weekly benefit amount below $81. SB 875 would reduce weekly unemployment benefits from 66 2/3 percent to 60 percent of the average weekly wage for insured employment, with a maximum benefit amount of $325.00 per week. _

 ***SB 1112 by Sen. Robert Thompson would repeal most of the changes made by the Department of Workforce Service’s (DWS) bill in the 2011 Regular Session. Act 1040 of 2011 extended the expiration date from 2011 to 2015 for mandatory deposits of portions of proceeds from the stabilization tax in the UI Trust Fund and Workforce Services Training Trust Fund. The language in SB 1112 addresses UI eligibility related to certain employment in an educational setting. It has been referred to the Senate Public Health, Labor and Labor Committee. _

 ***SB 1116 by Sen. Ronald Caldwell is on the Senate Public Health, Welfare and Labor Committee agenda. Amendment No. 1 sets rate calculations effective January 1, 2014. It also adds a new section, amending ACA 11-10-706(a)(2), allowing the stabilization tax to be credited to the separate accounts of each employer. As originally drafted, SB 1116 would provide for an increase in an employer’s additional contribution assessments of the unemployment insurance stabilization tax. _

 WORKERS’ COMPENSATION

***SB 802 by Sen. David Sanders would specify that owner/operators providing commercial motor vehicles or drivers to a motor carrier under contract are not employees of the carrier, but independent contractors for purposes of workers’ compensation law. It is on the Senate Public Health, Welfare and Labor Committee agenda. _

 ***SB 813 by Sen. Jon Woods would amend Workers’ Compensation law to require a complaint of muscle spasms to be an objective finding, with a specific diagnosis of palpable muscle spasms to qualify as a compensable impairment. It is on the Senate Public Health, Welfare and Labor Committee agenda. _

THIS WEEK AT THE CAPITOL

Committee Meetings: Thursday, March 28, 2013

 JOINT:

None listed.

 SENATE:

None listed.

 HOUSE:

 ISSUES

EMINENT DOMAIN – Special Order Thursday

***HB 1042 by Rep. Nate Bell is scheduled for a Special Order of Business in the House Judiciary Committee on Thursday, March 28. The bill would provide limitations on the acquisition of private property by eminent domain for private interests. Amendment No. 1 limits the use of eminent domain only when “necessary for a public use by a public agency”. It adds railroads to the list of private entities on whose behalf eminent domain may be exercised and removes language forbidding courts from looking at legislative intent when making a determination of public interest. The amendment also states that this section does not apply to property acquired by state or local entities in regard to roads and highways. _

 UNEMPLOYMENT INSURANCE

***SB 542 by Sen. Missy Irvin has been referred to the House Public Health, Welfare and Labor Committee. As originally drafted, the bill would require the Department of Workforce Services (DWS) to track false statements and misrepresentation by applicants for unemployment benefits and report to the Legislative Council. Amendment No. 1 would prohibit termination of unemployment benefits from false statements or misrepresentations made by the claimant outside of the current benefit year. The amendment would shorten the statute of limitations to allow for temporary disqualifications for reporting false statements from 5 years to 2 1/2 years. It also would remove the new tracking and reporting requirements, and would require DWS to provide reports of unemployment insurance claim fraud upon request by the Legislative Council. _

 INDEMNITY CLAUSES

***SB 762 by Sen. Jeremy Hutchinson would prohibit enforcement of indemnity or hold harmless clauses in motor carrier transportation contracts. An amendment was filed that would exclude insurance contracts from the rules created in this bill. SB 762 received a Do Pass recommendation from the Senate Judiciary Committee, but the bill has not been considered by the Senate. _

 ***SB 917 by Sen. Bruce Holland would extend provisions regarding the unenforceability of a construction contract hold-harmless clause to limit liability for death or bodily injury to the construction company’s surety or insurer. It is on the Senate Insurance and Commerce Committee agenda. _

 WORKERS’ COMPENSATION

***HB 1846 by Rep. Jim Nickels would repeal § 11-9-102(9)(B), which exempted real estate agents from the workers’ compensation law. It is on the House Public Health, Welfare and Labor Committee agenda. _

 ***SB 515 by Sen. Cecile Bledsoe would amend Workers’ Compensation Law, providing that an employee who retains a compensable injury is entitled to benefits during the healing period only if the employer does not have work available with the employee’s medical restrictions. This bill received a Do Pass recommendation from the Senate Public Health, Welfare and Labor Committee, but has not yet been considered by the Senate. _

 ***SB 589 by Sen. Jon Woods received a Do Pass as Amended recommendation from the Senate Judiciary Committee, but has not been put on the Senate calendar. Amendment No. 1 restricts the scope of this bill to firefighters and law enforcement officers only, removing mention of medical and other emergency personnel. The amendment also removes the provision that would increase temporary and total disability from 26 to 52 weeks (as was included in the original bill). As originally drafted, this bill would have defined an emergency responder for purposes of workers’ compensation for mental injury or illness as a compensated person or volunteer who is acting in an assigned role in public safety and emergency services. It would also have increased temporary total disability from 26 to 52 weeks. The State Chamber/AIA is opposed to this bill. _

 UNITARY COMBINED INCOME TAX REPORTING

***HB 1845 by Rep. Jim Nickels would define tax haven and unitary business and require corporations with nexus to Arkansas engaged in a unitary business with another corporation to file a combined income tax report. This bill is on the House Revenue and Tax Committee agenda. The State Chamber/AIA is opposed to this bill. _

 STATUTORY FORECLOSURES

***HB 1847 by Rep. Jim Nickels was heard as a Special Order of Business last week in the House Judiciary Committee, but was pulled down by the sponsor. Rep. Nickels has the option to amend the bill and bring it back before the committee. As drafted, HB 1847 would abolish the authority and procedures to perform statutory foreclosures. It would direct county circuit clerks to conduct judicial sales of real or personal property, prescribe a fee schedule and allow fees collected to be used to offset administrative costs or the sale and general operation of the circuit clerk. _

 EMPLOYEE HANDGUNS ON COMPANY PROPERTY

***HB 1269 by Rep. John Catlett remains on the deferred list in the House Judiciary Committee. The bill 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 includes exemptions for certain properties owned by chemical, oil or gas companies and for property owned by a person other than the employer that is subject to a mineral lease. It also precludes liability of an employer for damages resulting from an employee’s possession of a handgun and states that the employer does not have a duty to patrol or secure the parking area.In response to State Chamber/AIA member comments, we are opposed to this bill.

 Please make sure you have expressed your opposition to this legislation when speaking with your state representative, especially those who are members of the House Judiciary Committee. Contact information for Committee members can be found here and a listing of all legislators is available here. _

STATE CHAMBER/AIA BILL TRACKING

This session, the House filed 1,300 bills and the Senate filed 1,192 bills.

The State Chamber/AIA is tracking 612 bills and resolutions. For the complete, searchable list of bills being tracked please visit our tracking site. The full text of each bill is available at the site.