Friday, October 15, 2010

Week In Review

State Capitol Week in Review

LITTLE ROCK – Arkansas voters will decide on at least two proposed constitutional amendments when they go to the polls.

A third proposed amendment has been challenged at the Supreme Court, and a ruling on whether it stays on the ballot may not come until the 11th hour.

Early voting is from Monday, October 18 through Monday, November 1. Election day is Tuesday, November 2.

The legislature referred three proposed amendments. The first one establishes the constitutional right to fish, hunt, trap and harvest wildlife. Supporters of the amendment say it is needed to ensure that animal rights groups cannot successfully restrict traditional methods of hunting and fishing. The state Game and Fish Commission, which was created in 1945 after Arkansas voters approved Amendment 35, would not be affected by the measure and would retain its authority to regulate hunting and fishing.

Backers of the amendment emphasize that it would not affect current laws on trespassing, eminent domain, public ownership of land or the use of firearms.

The second proposed amendment raises limits on interest rates that retailers based in Arkansas may charge their customers. It also raises the maximum allowable interest rates on local government bond issues. And it creates a new method for the state to issue and pay off bonds for energy efficiency projects.

It is the measure that has been challenged in court by opponents who claim the ballot title is improper.

The current constitutional limit on interest rates that retailers may charge is 5 percentage points above the Federal Discount Rate, which is 0.75 percent. Thus, the limit is 5.75. Business groups say that is too low to make consumer loans feasible, and if the amendment is passed then businesses would be more likely to extend credit.

Banks are not affected by the provisions in the proposed amendment because their interest rate ceilings are determined by federal law. Car dealers, furniture and appliance stores and retailers that extend credit to customers are the major supporters of the measure.

Local governments borrow money for capital projects by issuing bonds, which are under similar constitutional limits on the maximum interest rates that can be charged. The practical effect is that local governments cannot find investors to buy bonds because the interest rates are so low.

The amendment would authorize the legislature to set the maximum interest rates. It also would authorize government entities to issue bonds for energy efficiency projects. They could be paid off with savings resulting from the project or with tax revenue. The legislature would define the types of projects that would be eligible, and their scope.

The third proposed amendment would remove restrictions now in Amendment 82, which allows the state to issue general obligation bonds to recruit large industries. The bonds can finance land acquisition, rail spurs, water and waste service, job training, environmental mitigation and site preparation.

However, under Amendment 82, they can only be issued to recruit industries that hire more than 500 workers and that invest at least $500 million. The proposal on the November ballot would remove those limits.

No comments: