Thursday, April 14, 2011

88th General Assembly Legislative Summary


Act 773 is the Speaker's bill to refer to voters an increase in diesel fuel taxes by five cents a gallon. If voters approve, revenue would pay off $1.1 billion in bonds for a highway improvement program. The tax would not be levied unless voters approved the bond issue in a statewide election.

A connected piece of the highway program is HJR 1, a proposed constitutional amendment by Rep. Barnett to raise the state sales tax by half a cent for a 10-year bond program to build four-lanes throughout the state. The bonds would generate an estimated $1.8 billion.

Another piece of the highway program is in HB 2188 by Rep. Cowling and Sen. Teague to exempt from sales and use taxes the purchase of Class 6 and Class 7 trucks and semi-trailers. Passage of this bill was necessary to win the support of the trucking industry for the five-cent per gallon increase in diesel fuel.

It has been sent to the governor.


Act 570 by Sen. Luker is a 167-page bill to change sentencing laws. To make sure prison space is available for violent offenders, the bill would increase the use of parole and probation for non-violent offenders.

Drug crimes and theft would be treated more leniently than violent crimes or drug crimes by manufacturers and dealers.

Act 184 by Rep. Tyler and Sen. Burnett authorizes the state Correction Department to transfer inmates to other jurisdictions. Arkansas is negotiating with Louisiana, which unlike Arkansas has available prison space.

Louisiana would charge us $28 a day per inmate, half of what it costs us to house them here. However, Louisiana would offer no drug abuse programs, vo-tech training or adult education, which is what drives up the cost.

Arkansas has more than 16,000 inmates.

Tax cuts

The package of $35 million in annual tax cuts has been approved and sent to the governor (except for one bill that is being amended to add sponsors).

* Act 755 by Sen. Teague to lower the sales tax on food by half a cent - $20 million fiscal impact.

Act 753 by Sen. Baker to raise the sales tax exemption on used cars, from $2,500 to $4,000 -- $2.5 million.

Act 754 by Sen. Sample to lower sales taxes on manufacturers' utility bills from 3.125 to 2.625 percent -- revenue impact of $5.27 million.

Act 736 by Rep. Lindsey would remove about 50,000 low-income parents from the state income tax rolls if they have two or more dependents. Revenue impact is $3.7 million.

Act 738 by Rep. Patterson to extend and expand tax credits for geotourism projects in the Delta.

Act 757 by Rep. Shepherd to make the first weekend in August a "back to school" sales tax holiday on clothing items valued up to $100 and accessories of up to $50, as well as school supplies.


The big question was whether the legislature will put Fayetteville in the Fourth District, which is mostly south Arkansas. That plan failed, and after more than a week of negotiations the Senate passed SB 792 by Sen. Madison to wrap up the session.


Act 197 by Sen. Johnson would require cities with more than 5,000 residents to fluoridate their water. It would exempt Texarkana because it buys water from Texas. The major cities it would affect are Fort Smith and Hot Springs. In all, 32 water systems will add fluoridation. The percentage of Arkansans with access to fluoridated water will increase from 64.5 percent to 80 percent.

Delta Dental Foundation will pay the $500,000 in start-up costs.

Higher Education

Act 1203 by Sen. Baker would change how colleges and universities are allocated state dollars. The new formula would take into account graduation rates and course completion rates.

The new formula would determine 5 percent of their funding in 2013-2014, and it would up 5 percent a year until 25 percent of institutions' funding relied on graduation rates, or "outcomes."

It has been sent to the governor.


Act 48 by Sen. Bookout and the entire Senate prohibits retiring legislators from becoming a registered lobbyist until a year after they leave office. It affects any legislator running for re-election next year, therefore it does not apply to 11 outgoing senators and 24 House members who are term limited after their current terms.

The act also limits travel reimbursements for legislators to the cheapest mode of travel. They can still drive to out-of-town conferences, but if it is cheaper to fly then mileage reimbursements will be no more than the price of the airline ticket.

Constitutional Amendments

* HJR 1001 by Rep. Barnett would levy a half cent increase in sales taxes to finance bonds for a $1.8 billion highway program.

* SJR 5 by Senator Files to allow cities and counties to create districts within their city limits or county borders, which could issue bonds for retail projects and other economic development projects. The bonds would be paid off with local sales taxes.

Drug Abuse

Act 587 by Sen. Johnson authorizes the Board of Health to prohibit synthetic drugs. This codifies the Board's ban on synthetic marijuana and also gives it flexibility to prohibit other new drugs that hit the market.

Act 751 by Sen. Malone regulates the sale of "bath salts" that are being abused like meth because of their ingredients. People are snorting and ingesting the salts and it can make them crazy and prone to suicide. They will be a Schedule I controlled substance under the bill.

Act 588 by Sen. Malone further restricts sales of cold medicines like Sudafed that contain ingredients needed to cook meth. The bill limits a consumer from buying more than three packages in one transaction.

The cold medication can only be sold at licensed pharmacies, and not at convenience stores or groceries. It gives pharmacists discretion to refuse to sell medications to a customer, if the pharmacist believes there is not a valid medical reason for the customer to have it.

Drug Abuse (cont.)

Act 270 by Sen. Key requires physicians and clinics to report to law enforcement when they treat suspicious burns, that appear to be cause by cooking methamphetamine. In the same way ER doctors now report gun shot wounds and knife wounds.

Sentencing Reform

Act 570 by Sen. Luker, to increase the use of parole and probation in order to keep more non-violent offenders out of prison, has been signed by the governor and is now Act 570.

It also increases the number of drug courts.

The Department of Community Correction has 362 probation and parole officer. Act 570 will add 49 and reduce the average caseload from 110 to 85.

There are 41 drug courts and the act will add six.

The additional cost will be $ 9 million, to be paid for from increased charges levied from parolees and probationers, and from the Correction Department budget and the Community Correction Department budget.

More than 16,000 inmates are in the Arkansas system. We spend more than $400 million a year on Corrections.

The act is expected to slow growth from the previously anticipated 21,000 inmates by 2020 to about 18,500.

Lottery Scholarships

Act 1212 by Rep. Perry reduces lottery scholarships by 10 percent, from $5,000 to $4,500 for students at four-years universities and from $2,500 to $2,250 for students at two-year colleges.

The reduced scholarships reflect concern that proceeds from lottery ticket sales will taper off and not be enough for all eligible students at the current amounts.

Lottery Vending Machines

SB 867 by Sen. Madison prohibits the sale of lottery tickets in vending machines. It was passed by the Senate but failed in the House Rules Committee, as did another bill to allocate more funding for prevention of compulsive gambling.

Autism Coverage

Act 196 by Rep. Lindsey requires health insurance companies to offer up $50,000 in therapy for children diagnosed with autistic disorders.

Coverage would be limited to children under 18. The requirement would add an estimated $30 a year to a plan for a family of four.

Unemployment Insurance

Act 1125 by Sen. Hutchinson authorizes a bond issue for the state to repay a loan of about $330 million we've borrowed from the federal government for unemployment benefits.

The act authorizes ADFA to issue up to $500 million in bonds, but only if voters approve in a statewide election.

Act 861 by Sen. Dismang sets minimum ($81) and maximum ($451) weekly unemployment benefits.

Financial Transparency Act

Also known as the "Online Checkbook Act," Act 303 by Senator Dismang creates a new Internet web page where all state government financial transactions can be accessed.

State agencies will post the salaries of all employees, as well as expenditure data that includes amounts paid under contracts with private companies that bid on state projects. The data includes the names of vendors that are awarded contracts, the amounts of the contracts and whether they are for commodities or professional services.

The act applies to the offices of the governor, attorney general, secretary of state, land commissioner, auditor, treasurer and lieutenant governor. It also would apply to all boards and commissions, judicial offices, the Lottery Commission and legislative offices.

State agencies shall make available on the Internet information about their bonded indebtedness, such as the original amount of principal borrowed, the interest rates charged and the source of revenue for repayment of the debt. They must cite the statute authorizing them to borrow money.

The expenditure data is scheduled to be online by July 1, 2012. The state Department of Finance and Administration will create and regularly update the website.

Higher education is exempted from the act because colleges and universities use a separate accounting system and it would cost millions of dollars to include them.

Charter Schools

Act 987 by Sen. Baker removes the current cap of 24 charter schools. When the number of charter schools gets up to 22, the cap will go up by five.

There are currently 16 open enrollment charter schools in Arkansas, the majority in Pulaski County.

School Funding and Transportation

Act 1039 by Rep. Ingram, is the adequacy bill. It increases school funding by 2 percent. In a compromise with senators who wished to help rural schools with long bus routes, the governor agreed to put $500,000 in an account which schools can apply for if they have high transportation costs.

Health Care Reform

HB 2138 by Rep. Allen was sent to interim committee, as part of a compromise to get the state Insurance Department budget approved. HB 2138 would have set up state health insurance exchanges to implement provisions in the national health care law that will require people to obtain health insurance. The exchanges will offer insurance to people without coverage through their employer.

The national law requires that everyone be covered by 2014. The health insurance exchange also will offer policies to small businesses.

This was one of the most contentious bills of the session because of vocal opposition to national health care.

Internet Sales Tax

Act 1001 by Sen. Files and others puts the responsibility on Internet retailers to collect sales and use taxes on items bought online, such as through Amazon or L.L. Bean.

The revenue impact is negligible, mainly because of a lack of data on which to base an estimate. In the past, when Arkansas was working to conform its tax collection procedures with other states so we could join the "streamline sales tax" compact, estimates of new revenue were in the tens of millions.

It has been sent to the governor.

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