Arkansas Legislative Archives

April 11, 2005
LEGISLATIVE UPDATE
SOUTHWESTERN ASSOCIATION CAPITAL REPORT
BRENT STEVENSON

The End is Nigh…
…it’s just not gonna be today, as legislative leaders had hoped. It looks as though session adjournment will be delayed until at least next week as legislators continue to wrangle over budget issues.

HB 2103-
Though the do pass motion in Wednesday’s meeting of the Senate Revenue and Tax Committee failed by one vote, HB 2103 still has a chance. The vote was expunged by a motion made by Senator Jim Hill. The Senate Revenue and Tax stopped the progress of the energy sales tax exemption with a 3 to 4 vote on a motion of do pass. Those voting in support of the bill include: Senators Jim Hill, Terry Smith, and Sharon Trusty. Dissenting votes were cast by:
Committee Chairman Tim Wooldridge and Senators Bobby Glover (Vice Chair), Steve Higginbothom, and Paul Miller. The genie is out of the bottle on this issue and debate will continue as preparations are made to present this issue to the 86th General Assembly.

HB 1234 -
By Rep. Jay Bradford of Pine Bluff has been referred to the Joint Interim Committee on Public Health, Welfare and Labor. By asking that the bill be referred, Rep. Bradford has ended his efforts to obtain passage of this bill during this session of the General Assembly. The Joint Interim Committee is comprised of members of the Public Health, Welfare and Labor committees of both the House and Senate. These committees normally meet monthly between legislative sessions. In this forum, Rep. Bradford can continue to seek agreement on the bill for presentation to the 86th General Assembly.

SB 1026 -
By Sen. Gene Jeffress of Louann would emulate federal law and provide a tax credit for short line railroads as an incentive for improving and upgrading maintenance of the rail roads. The bill is on the agenda of the Senate Committee on Revenue and Taxation. Sen. Tim Wooldridge, chairman of the committee had deferred consideration of all bills providing for tax exemptions or tax credits until a determination was made on the amount of funding to be needed for school facilities. Because of the delay, SB 1026 has been awaiting action for several weeks. With the current push for adjournment it is possible that adjournment could occur before the next scheduled meeting of the committee on April 13.

SB 1194 -
By Sen. Ed Wilkinson of Greenwood is in the Senate Committee on Public Health, Welfare and Labor. This bill is the result of an attempt to develop an amendment for SB 1234. When the amendments was deemed unacceptable by supporters of SB1234, the proposed amendment was drafted into a separate bill. Sen. Wilkinson has indicated that it is his intention to run the bill, time permitting.

SB 160 -
By Sen. Bobby Glover of Carlisle has been amended to provide for an increase in the multiplier used to determine benefits for Public Safety Officials who are members of the Public Employees System. The bill awaits the results of an actuarial study to determine the amount of increased liability to be incurred by the system. Due to time constraints, the bill is likely to be referred to the Joint Interim Committee on Retirement and Social Security.

March 24, 2005
LEGISLATIVE UPDATE
SOUTHWESTERN ASSOCIATION CAPITAL REPORT
BRENT STEVENSON

PUSH FOR ADJOURNMENT STALLS - Legislative leaders earlier approved a resolution, setting May 15 as a prospective date for adjournment of the 85th General Assembly. Privately, these leaders have been working to make adjournment a reality by April 15th. Developments this past week have lowered the level of optimism for the April date among many rank and file members of the House and Senate so that the session could possibly extend past the April 15 deadline that was targeted.

Attempts to find a resolution to the issues relating to School Facilities has been, not only the most comprehensive of issues before the legislature this session, but because of potential cost, it has also delayed consideration of state’s biennial budgets. Legislation has been approved that deals with oversight and management of a facilities improvement program but, as of this date, there is no consensus on financing methods or the amount of money to be appropriated for that purpose.

Attendant to School Facilities, a controversy continues over whether or not to divert funds from the General Improvement Fund to help pay for school facilities improvements. The General Improvement Fund is created each biennium by accumulating interest that the state earns on various investments and account balances. Traditionally these funds have been used by the Governor and members of the House and Senate to fund improvements to public facilities, and infrastructure needs in their respective districts.

Contentions are now surfacing about the manner in which the legislature has addressed what has been perceived as mandates from the Supreme Court order in the Lake View case. Many of the changes in public school legislation have increased cost for schools and is consuming much of the increased funding provided in appropriations of the extended session of last year.
These increased costs items have become extremely troublesome for many of the school districts that have limited local resources to devote to increased regulation or expanded programs.

One of the four-bill enabling facilities legislative package, SB 590 has passed both chambers is on the way to the executive for signature. SB’s 591, 592, 593 have passed both chambers with some House amendments that must be concurred in by the Senate.

There have been many divisive issues during the session, and each has contributed to some extent in contested leadership roles. At this time in the session, these struggles will probably intensify and slow the legislative process of dealing with the distribution of funds to the various agencies of state government under the Revenue Stabilization Act.

SENATE REVENUE AND TAX TO CONSIDER TAX EXEMPTIONS/ CREDITS- All potential changes in the tax code have been postponed by the Senate Revenue and Tax Committee for consideration until school funding was addressed. Legislation creating tax exemptions and/or credit are expected to be addressed beginning Wednesday, March 30. HB 2103, that provides for a phased-in exemption on the sales tax on energy used in the manufacture of forest products, and SB 1026, that provides an income tax credit for rehabilitation of rail infrastructure, will be two of the bills that the committee is expected to hear over the next two weeks.

WATER UTILITY-EMINENT DOMAIN BILL DIES- After having been played in the media for over 6 weeks SB 230, sponsored by Senator Bob Johnson D-Perryville, sparked the debate over property rights versus the use of eminent domain. The bill cleared the Senate but was stalled in the House City, County and Local Affairs Committee and received a DO NOT PASS motion barring the bill from further consideration this session. It is likely that this issue will surface again in some form in future sessions.

RESOLUTION FOR REGULATED TRANSPORTATION PRICING LIVES-Rep. Chris Thomason’s HCR 1025 is still kicking. The bill would urge Congress to take action to prevent abusive pricing by railroads for transporting of coal to Arkansas electric generating facilities. The bill has been placed on the Senate Public Transportation Committee’s agenda for Monday, March 28. Please contact your Senator to express your concerns and if you know any of members of the Senate Transportation Committee listed below contact them this weekend while they are at home.

PUBLIC TRANSPORTATION - SENATE
Chair: Senator Tracy Steele
Vice Chair: Senator Jim Holt
Senator Ruth Whitaker
Senator Gilbert Baker
Senator Denny Altes
Senator Randy Laverty
Senator John Paul Capps

TRIAL LAWYERS REBUFFED ON HOUSE FLOOR-In an unexpected show of consensus the House of Representatives this week rebuffed Rep. David Johnson’s HB2510.
The bill which was intended to extend the time period after a home inspection report is completed that a person may bring action to suit to recover damages suffered as a result of an act or omission of the home inspector three fold died on the House floor Wednesday by a vote of 33 ayes and 49 nays.

PRESCRIPTION BENEFIT PLANS RETAIN CONTROL- A well intentioned bill by Representative Johnny Key was defeated soundly in the House Public Health, Welfare and Labor Committee this week allowing employers to continue to control costs of their drug benefits programs. HB 2845 would have impaired employer’s ability to implement flexible solutions to rising costs of employee prescription benefits and severely if not totally disallow for mail order of maintenance prescriptions. After much testimony from both sides the bill was defeated in a voice vote. It is unlikely that the bill will be presented to committee again this session.

March 21, 2005
LEGISLATIVE UPDATE
SOUTHWESTERN ASSOCIATION CAPITAL REPORT
BRENT STEVENSON

And the race is on…

Since our last report, Asa Hutchinson, former 3rd District member of the U.S. House of Representatives and Deputy Director of the US Department of Homeland Security, has formally thrown his hat in the ring for Governor of the state of Arkansas … to no one’s surprise. Lt. Gov. Win Rockefeller has still issued no formal declaration of his intent to run, though he did send out a letter several weeks ago to this effect to many Republican Party stalwarts. Attorney General Mike Bebee’s name has been the only one of note thrown around as a democratic nominee to date. Will he be able to escape Primary opposition?

State Senator Jim Holt (R-Springdale) announced his intent to run for governor officially Saturday. The seat is currently occupied by term-limited Win Rockefeller. State Senator Tim Wooldridge (D-Paragould) has been making assertions that he intends to seek the vacancy in 2006.

On the national front, Secretary of State Condoleezza Rice put an end to the rumor that the 2008 presidential race might culminate in a woman-to-woman face off between her and the hasn’t-yet-but-surely-will-announce candidate Sen. Hillary Clinton. Rice told Tim Russert on Sunday’s Meet the Press that she will not run for president in 2008. Our own Honorable Governor Mike Huckabee has not, however, said anything to confirm nor deny an alleged intent to run for the nation’s highest (or second highest) office.

There has been a great deal of activity in the Legislature this week but very little if any progress is being made on the school facility funding question. The 4-bill package that would outline the qualifications of adequate and equitable facilities is beginning to move but as in the regular budget funding process, there are fundamental questions that have yet to be determined. Questions such as how much, where will it come from - General
Revenue, General Improvement? Stay tuned.

Hostile amendment dies, HB 2103 passes the house.

A concerted effort by the Arkansas Forest and Paper Council brought about a welcome success with the passage of HB 2103 out of the House Revenue and Taxation Committee, and subsequently passage of the bill on the House floor.

After an attempt by Rep. Bruce Maloch of Magnolia to amend the bill, to include all manufacturers in Arkansas (tantamount to a death sentence, had it been attached) failed on a voice vote, the bill cleared the house with a vote of 64-23 and 10 present but not voting. Rep. Jodie Mahony spoke against the bill, as did Rep. Bruce Maloch, while Rep. Gregg Reep of Warren spoke in favor of it.

HB 2103 has been referred to the Senate Revenue and Tax Committee for consideration. It now appears that the bill will not be acted upon by this committee until after a determination is made about the amount of funding and the method of funding for school facilities has been made.

Agency Budgets begin to move - HB 1110 by the Joint Budget Committee is the appropriation bill that provides funding for the next biennium, for the operations of the Arkansas State Board of Architecture. The board operates on fees paid by architects and no state tax dollars are involved. The bill has been approved by the House by a vote of 94 to 0, and by the Senate by a vote of 34-0 and signed by the Governor. It is now Act 850 of 2005.

Protecting the Environment - HB 2648 by Rep. Sam Ledbetter of Little Rock creates the Arkansas Environmental Response and Liability Act, amends the Hazardous Waste Management Act and repeals prior legislation establishing the Emergency Response Trust Fund.

HB 2655 - Also by Rep. Ledbetter revises provisions relating to the Hazardous Waste Act and the Environmental Quality Department's hazardous waste program.

A Proposal to raise taxes, again - HB 2683, also by Rep. Ledbetter would levy an additional 1/8th of one percent state sales and use tax.

A New Way to File - HB 2686 by Rep. Phil Jackson of Berryville would allow corporations that are members of affiliated groups to file combined state income tax returns.

HB 2711 by Rep Johnnie Bolin of Crossett increases fees for registration and licensing of certain motor vehicles, including Class 2 pleasure automobiles and Class 7 trucks exceeding 73,281 to 80,000 pounds.

March 14, 2005
LEGISLATIVE UPDATE
SOUTHWESTERN ASSOCIATION CAPITAL REPORT
BRENT STEVENSON

Deadline prompts a deluge of filings-
Monday of this week was the deadline for filing new legislative proposals for the 85th General Assembly. With most major issues of the session unresolved and little action being taken on necessary appropriations, legislators rushed to file their individual bills. As a result 555 bills were introduced on one day. Many of these bill were “shell bills”, meaning that they were filed with a title and bill number, with little or no actual content. By having the bills filed in this manner, the members can then add content or substitute another bill with that bill number by amending the filed “shell”.

Please pay special attention to your tracking report this week as you are likely to see new bills on your report in response to the legislatures heavy filing activity.

HB 2103 Passes House Revenue and Tax Committee-
HB2103, a bill to exempt the electricity used in manufacturing of wood products from the Arkansas sales tax, passed the House Revenue and Tax Committee with a vote of 15 ayes and 5 nays yesterday morning after and hour and a half of testimony and debate. Testimony was given by Dr. Matthew Pelki of the University of Arkansas at Monticello, Buddy Allen of Domtar at Ashdown, Don Wesson of Potlatch in Mc Gee and Brent Stevenson after the bills presentation to the committee by Rep. Ken Cowling of Ashdown.

Debate centered around the validity of the sales tax as a major factor on the economic health of wood product manufacturers in Arkansas. Other questions from the board included the provision within the bill mandating an audit of the effectiveness of the exemption in January 2012 and the proposition by one committee member that a penalty be imposed if the industry failed to meet certain requirements. In the end, the bill passed as was introduced to the committee by Rep. Cowling. The bill will now go to the House where a vote is expected on Monday.

Dissenters of the bill were Rep. Sam Ledbetter, Rep. Travis Boyd, Rep. David Evans, Committee Chairman Phil Jackson, and Speaker of the House Bill Stovall.

Coverage of the committee meeting was reported today on the front page of the Arkansas Democrat Gazette.

Does it protect the consumer or over regulate business?-
HB 2510 - by Rep. David Johnson of Little Rock – This bill awaits action in the House Committee on Judiciary. The bill would extend the statute of limitations for bringing an action against a home inspector to three years. Current law provides for a limit of one year. Home inspectors oppose this measure on the grounds that it would invite suits and make it necessary to defend causes of action that should rightfully be brought against building contractors in the event that a home purchased displayed a defect in construction.

HB 2584 – By Rep. Marvin Childers of Blytheville – This proposal would require home inspectors to carry errors and omissions insurance. Home inspectors contend that this bill is onerous and unnecessary in as much as they are already required, by law, to purchase general liability insurance. Most home inspection companies operating in Arkansas are sole proprietors and as such, they contend that being required to purchase this type of insurance would impose undue expense and force many to abandon the practice of their craft.

HB 1105 Bond Deceptive Trade Practices (Technical Changes)
Track Code(s): 014
Bill History: 01-26-05 H Meeting set for 10:00 AM - Room 149 H-Insurance and Commerce

HB 1174 Verkamp Workers' Compensation (Waiver of Hearing)
Track Code(s): 001, 003, 004-, 010, 014
Bill History: 03-15-05 H Meeting set for 10:00 AM - Room 149 H-Judiciary

HB 1681 Rosenbaum Commercial Carriers (Out-of-Service Violation)
Track Code(s): 003, 004, 014
Bill History: 03-14-05 S Placed on the Senate calendar

HB 1705 Cowling Real Estate Transfer Tax (Allocation Revised)
Track Code(s): 003, 004, 009, 014, 018
Bill History: 03-01-05 H Meeting set for 10:00 AM - Room 151 H-Revenue and Taxation

HB 2103 Cowling Tax Expemption (Wood/Paper/Gypsum Manufacture)
Track Code(s): 003, 004, 009, 014, 018, 019
Bill History: 03-11-05 H Amendment 1 adopted (Cowling)

HB 2470 Stovall Property Tax (Recoupment on Certain Sales)
Track Code(s): 003, 004, 009, 014
Bill History: 03-10-05 H Meeting set for 10:00 a.m. - Room 151 H-Revenue and Taxation

HB 2770 Cowling Construction Mortgages/Mechanic's Liens
Track Code(s): 014
Bill History: 03-15-05 H Meeting set for 10:00 AM - Room 130 H-Public Health, Welfare and Labor

SB 935 Faris Vehicle Registration (Timber Hauling Vehicles)
Companions: HB 2493 (S)
Track Code(s): 003, 004, 014
Bill History: 03-09-05 S Meeting set for 10:00 am - Room 309 S-Public Transportation

This week saw the passing of the 50th day of the regular session and the deadline on Monday for members to file appropriation bills. There were more than 450 bills filed on Monday with most of them being General Improvement Appropriations. With approximately $160 million that will be available for local district capitol projects, the number of requests that have been filed exceeds $2 billion. General Improvement dollars are those dollars derived from interest earned on state deposits and some excess revenues not spent from the previous fiscal year. The 55th day of the regular session will be tomorrow, so the deadline for all bills to be filed is Monday.

This week was highlighted by the Senate Agriculture, Forestry and Economic Development Committee recommending the formation of a Department of Agriculture; and the Senate Education Committee did not pass a bill that would have made scholarships available to illegal aliens residing in Arkansas for three years.

Additionally, Rep. Johnny Key’s bill passed the House and is in the Senate. His bill would amend the enforcement provisions of the ”any willing provider” legislation to allow only providers to seek injunctive relief rather than any party being allowed to seek punitive damages. He has worked with all stakeholders and has the cooperation of Sen. Faris, the AWP sponsor in the Senate. This measure should pass the Senate next week.

Now attention is being focused on the school-facilities-funding legislation and how much money districts will receive over the next two years. It seems that the amount that will be appropriated for the biennium is approximately $160 million. Senators Broadway, Bisbee and Argue, along with Rep. Mahony, have put together a formula that creates a wealth index for each district that will determine the state-to-local share of facilities dollars per district. The formula has not received universal acceptance, especially in the Senate. It will be interesting to see this issue unfold over the next few weeks.

Do not look for this regular session to end as abruptly as the 84th did in 2003. Look for the legislature to extend itself 30-45 days to continue to work on the facilities formula and to address the Governor’s package on highways, higher education and health. The executive recommendation to merge the Department of Health with the Department of Human Services seems to have some support at this time.

The highway program has not been unveiled as of yet and how to address higher education is still up in the air. It is unlikely that the extension will include an extension of a time to file bills for consideration.

Other Items of interest that surfaced this week are:
Property Tax Reform - SB 955 by Sen. Dave Bisbee of Rogers and Rep. Bill Stovall of Quitman - The bill would mandate a new method of assessing property within the local jurisdictions. Under the provisions of this bill, a property would be reassessed when sold and must be recorded on the books of the local assessor at 20% of appraised value (not the selling price or the market value). The buyer of the property would not be eligible to participate in any assessment limitations until after the second appraisal following purchase.

A New Local Taxing Authority - SB 957 by Sen. Dave Bisbee of Rogers and Rep. Bill Stovall of Quitman - This bill would authorize the creation of Local Revenue Sharing Districts, for the purpose of controlling the allocation of local sales and use taxes generated within those districts.

These districts or compacts could be formed by cities, counties, or any combination of cities and counties. Local sales and use tax receipts, except for levies dedicated to the retirement of bonds, would be identified by the director of the Dept. of Finance and Administration and allocated by the State Treasurer, to the respective member entities. Treasurers of each city or county comprising the district or compact would form an ad hoc committee that would meet following each allocation of revenues to formulate a report of receipts of all member entities to each of the respective member governing bodies.

A New Approach for Economic Development - HB 2103 by Rep. Ken Cowling of Forman and Rep. Johnnie Bolin of Crossett is set for hearing before the House Committee on Revenue and Taxation, as a special order of business for Thursday of next week. The bill would authorize sales and use tax exemptions for the purchase of electricity and other forms of energy used in the manufacturing process, as it applies to the forest products and paper industries. This form of exemption already exists for the steel and aluminum industries.

In recent years Arkansas has lost a number of existing manufacturing plants and missed out on a number of potential relocations to the state, which involves hundreds of jobs. Numerous newspaper articles have highlighted the job losses the manufacturing sector of the economy has experienced and editorials have been written advocating that the state consider altering the way it has been conducting its economic development business.

It has been a calm week on the hill. The flood of appropriation bills seen of late is indicative of the General Assembly gearing down for the end of the regular session.

THIS WEEK ON THE HILL

Economic stimulus bill introduced in the House
HB 2103 has been a long time in coming. The bill introduced this morning by Rep. Ken Cowling of Ashdown would exempt electricity used in manufacturing of wood and paper products from the general sales tax. The exemption would be phased in over a three year period and have negligible impact upon general revenues of the state. Arkansas currently has one of the highest such sales tax in the nation and well above that of neighboring states. This measure is an effort to implement a recommendation from a study by the General Assembly in 2001, which stated that such a move was needed in order for Arkansas to improve its “Business Climate” and become more comparable to our neighboring states. “This is an Economic Development bill,” said Rep. Cowling, “and one that is badly needed if we are to keep our current levels of jobs in the Forest Products and Paper industries, and attract additional investment and expanded employment to Arkansas”.

House passes bill to provide college aid to benefit illegal aliens
Two-thirds of the house said “aye” to Rep. Joyce Elliott’s bill HB1525. The bill would allow non-documented aliens to attended state colleges and universities for the same tuition rate as legal Arkansas residents and make them eligible for state sponsored scholarships. The bill stipulates that the students must have spent at least three years in, and be a graduate of, an Arkansas school. The bill moved out of the house with a vote of 63-31 and has gone on to the senate where it is expected to pass. No one spoke in opposition of the bill.

School funding to come largely from the General Improvement Fund
The $150 million plan for addressing school facilities needs was the product of a joint effort by Senators Jim Argue, Shane Broadway, Dave Bisbee and Rep.Jodie Mahoney. The rough breakdown of the plan is as follows: $20 million for immediate safety and health needs to meet minimum requirements, $20 million for construction bonds outstanding as of January 1, 2005, $50 million to supplement individual district facilities projects, and $60 million toward payment of debts incurred after January 1, 2005. While $60 million is proposed to be funneled from the General Improvement fund, $40 million would come from the Property Tax Relief Fund and the remaining $50 million from general revenue. The planned spurred much debate among senators but was applauded by Governor Mike Huckabee.

“Any Willing Provider” package marches on
Senate Bills 43 and 44 – Sen. Faris of Malvern – This bill which allows medical providers to treat patients that are members of managed care organizations, provided the treating physician is willing to abide by the rules of and accept the payment schedule of the managed care organization. The bill has passed both Houses, with the Senate concurring in House amendments and sending the bill to the Governor for his signature. Opponents of the bill contend that the final resolution to this long running debate will likely go to the Courts again, as was the case in similar legislation a few years ago.

AND IN OTHER NEWS…

Lincoln “Wages some war” on President’s budget proposal
Senator Lincoln spoke in opposition to the President Bush’s proposed budget at the “Breakfast with your Senator” town meeting on Wednesday. Lincoln criticized the elimination of Perkins funding which gave support to Arkansas higher education facilities. Current recipients of Pell Grants may find themselves ineligible for the assistance if the President’s budget is passed. Also eliminated in the proposal is the Area Health Education Center Program that has a half dozen facilities statewide.

Rockefeller throws his hat in the ring… sort of
Lieutenant Governor Win Rockefeller informally announced his candidacy for Governor this week in a letter to Republican Party members. After eight years in his current office, it looks like the now term limited son of former Governor Winthrop Rockefeller has finally decided to follow in his father’s footsteps and validate the popular rumor. Rockefeller said yesterday that he will delay his formal announcement until the end of the legislative session which is expected in April.

Bill Status Report
02-25-2005 - 14:25:21

HB 1105

Bond

Deceptive Trade Practices (Technical Changes)

Track Code(s):

014

Bill History:

01-26-05 H Meeting set for 10:00 AM - Room 149 H-Insurance and Commerce

HB 1174

Verkamp

Workers' Compensation (Waiver of Hearing)

Track Code(s):

001, 003, 004-, 010, 014

Bill History:

02-24-05 H Amendment 1 adopted (Verkamp)

HB 1705

Cowling

Real Estate Transfer Tax (Allocation Revised)

Track Code(s):

003, 004, 014, 018

Bill History:

02-24-05 H Meeting set for 10:00 AM - Room 151 H-Revenue and Taxation

Auto Dealer’s Prevail, So Far – SB 202 by Sen. Jack Critcher of Batesville and Sen. Paul Miller of Melbourne failed to receive a do-pass recommendation from the Senate Committee on Transportation this week. The measure would prohibit automobile dealers from collecting a fee for developing the paper work involved in the purchase of an automobile. Current law authorizes the Arkansas Motor Vehicle Commission to set a limit on these charges. However, previous attempts to set a limit on these charges by the Commission have been repulsed by legislative oversight committees.

The Arkansas Automobile Dealers Association opposes the bill, contending that the charges are necessary in order for a dealership to be profitable. Sen. Miller stated that the dealership he owns in Melbourne does not charge document fees and that the matter of doing the paper work is just a part of the dealerships overhead costs.

Any-Willing-Provider Law Progresses – Sen. Bill 43 and 44 by Sen. Steve Faris of Malvern received a do-pass recommendation from the House Committee on Public Health, Welfare and Labor this week. The bills have been approved by the Senate and now await floor action in the House before being sent to the Governor.

SB 43 would permit any doctor or hospital to provide services to patients who are members of a health care network, even though the doctor or hospital is not a part of the network, if the provider is willing to accept the payment schedule and conditions for payment established by the network.

Many employers in the state along with labor unions opposed the legislation arguing that AWP would dilute the patient base within managed care networks and result in higher healthcare costs to employers and employees.

The Arkansas Medical Society, supported the measure contending that many doctors and hospitals throughout the state are not included in the networks affiliated with Blue Cross and Blue Shield, and new graduates from medical schools were discouraged from establishing a practice in many areas of rural Arkansas that many patients must bear the full cost of treatment when they go to the doctor of their choice who is not included in the network.

SB 44 would allow actions of tort against by aggrieved parties when and if SB 43 is violated. This is a drastic step in the enforcement of the ability of employers to provide health benefits to their employees. Parties that believe that they are aggrieved are entitled to a minimum $1,000 plus attorney’s fee’s if they prevail.

Financing Highways Could Tap General Revenues – Sen. Bill 430 by Sen. Gilbert Baker of Conway would allow the State Highway Commission to issue bonds to provide monies for highway improvements, provided the total issue does not exceed $575 million.

The financing plan calls for using existing fuel taxes authorized by a 1999 Act as and should these tax not be sufficient to repay the bonds, additional funding would come from the state’s General Revenues. Details of the proposed $1Billion highway program, such as what type of sales tax would be needed and which highways are to be built or repaired, are yet to be decided.

Effort To Address School Facilities Emerges – Sen. Shane Broadway of Bryant, on Thursday, released four bills in draft form, proposing a program for determining and addressing needed improvements to school facilities. Legislators met in caucuses to hear presentations on the contents of the bills by leaders that had helped to craft the drafts. The actions proposed in the four bills are directed toward academic facilities only.

The first of the proposed bills would create an Academic Facilities Oversight Committee made up of members of the General Assembly. It would also create the Academic Facilities Advisory Committee, made up of building contractors, architects, engineers, educators and school administrators. The Advisory Committee would work with the State Department of Education to establish standards for academic facilities.

The second proposal would create a Distance Learning Coordinating Council, a group consisting of officials of the State Department of Education, Department of Higher Education, Department of Workforce Education, Department of Economic Development, Department of Information Systems, and the Executive Council of the President’s Council. This group is intended to develop standards and rules for implementing distance leaning in the state’s public schools, develop an on-line curriculum, recommend supplemental material appropriate for distance learning, coordinate distance learning services; and assessing costs and coordination of distance learning through out the state.

The third bill draft would rename and redefine the role of the Division of Building Services in the Department of Education. Additional staff would be employed in this division, to be identified as the Public School Academic Facilities and Transportation Division. Once staffed, this group would begin a process of formulating standards, inspecting school facilities, and prioritizing needs to be funded with state funds.

The fourth and final measure would establish the Academic Facilities Program, to set forth how to put together long-range plans and how the state would sanction districts that fail to maintain adequate facilities.

Nothing in the drafts addresses the cost of implementing the bills or the cost of the state’s participation in local building programs.

Controversial Bill on Protecting Water Source Slows – SB 230 by Sen. Bob Johnson of Bigelow, dealing with the issue of limiting eminent domain, remains in the House Committee on City, County and Local Affairs. The bill deals with the struggle between Central Arkansas Water and Deltic Timber, Inc. and the ability of the utility to bar proposed development near Lake Maumelle by Deltic Timber, Inc. The bill has passed the Senate and awaits committee action before being recommended to the House.

Mental Health Professional Not Agreed – HB 1234 by Rep. Jay Bradford of Pine Bluff remains in the House Committee on Public Health, Welfare and Labor. A meeting was held on Monday of this week for all parties interested in the measure to discuss their concerns or support. All, but one, of the attendees that spoke to the interim study committee, expressed opposition to many of the provisions for professional identity and licensure.

“Water, Water everywhere, and not a drop to drink” - It isn’t quite that drastic but the issue of managing water resources is taking on a new level of significance with the introduction of SB 230 by Sen. Bob Johnson of Bigelow.

This bill deals with the controversy between Central Arkansas Water, a 225 unit residential development, The Ridges of Rolling Creek, owned by Deltic Timber, Inc. Central Arkansas Water official want to limit develop of lands that comprise the watershed for Lake Maumelle, the principle source for potable water for central Arkansas. The utility utilizes the right of eminent domain as a tool for limiting development.

SB 230 allows developers to enter in voluntary agreements, enforced by the Arkansas Soil and Water Commission, that would protect the lake from pollutants, and limit the ability of the utility to exercise eminent domain.

“Another Volley in the War against Drugs” - SB 109 is closely modeled on an Oklahoma law that has reduced methamphetamine laboratory busts by 80%, according to Attorney General Mike Beebe. The bill would require that all over-the-counter medications containing ephedrine and pseudoephedrine be dispensed by a pharmacist, who would keep a record of all sales of these products. The bill has been approved by the Senate Committee on Public Health, Welfare and Labor and now goes to the full Senate for consideration.

“Choosing your doctor, a step closer (again)” - SB 43 and SB 44 received approval in the Senate Committee on Public Health, Welfare and Labor on Wednesday. SB 43 would allow individuals who are insured in a health-network plan, such as an HMO or PPO, to utilize the services on any physician they choose, even though the physician may not be a member of the plan network, provided the physician were willing to accept the same fees as
provided by the network plan. SB 44 would authorize lawsuits when SB 43
was not adhered to by network administrators and provides for monetary damages in successful suits.

“There’s a rumble in the camp” - HB 1234 by Rep. Jay Bradford of Pine Bluff renews the struggle over licensure and qualifications for licensure among the various levels of practice in the field of Psychology. The bill would create a new board, Licensure of Psychological Examiners would be discontinued after 2007, but be “grandfathered in” as continuing to practice, while future licensees would be identified as licensed psychotherapists. It appears that some titles would be discontinued and new titles may not have an identity with national organizations that provide licensure and performance standards.

“Revenue Growth Heralds Economic Expansion” - On Wednesday of this week, the Department of Finance and Administration released a report state revenue collections for the month of January. Year-to-date tax collections for fiscal 2005 equals $2,618,900,000. This represents a growth of 9.6% or $231,000,000 over the same period of time in fiscal 2004. Taxes on individual income increased at a rate of 11.7%, corporate income grew 30.4% and Gross Receipts taxes grew at a rate of 7.1%. These three categories of taxes provide 93.6% of General Revenue Tax Collections.

These Year-To-Date Gross tax collections are subject to reduction for prioritized expenditures before Net General Revenue can be distributed to state agencies. Provisions are required to fund individual income tax refunds, $7.5 million; corporate income tax refunds, $13.6 million; Claims against the state, -$22.6 million; Bonded indebtedness of the State, $1.8 million; Tourism Incentive Assistance, $5.8 million; School Desegregation,
$19.2 million; Education Excellence, $143.4 million; Educational Adequacy,
$12.7 million; Elderly Transportation, $1.3 million. General Revenue receives reimbursements in the amount of $26.7 million through interagency transfers. Thus, $198.2 million represents the net available for distribution during the month of January. It is estimated that approximately $11 million of the growth in collections for January was the result of increased sales during the Christmas holidays of 2004.

Should you have any questions about any bill on the attached tracking report call our office.

Inside This Issue:
Huckabee Seeks $10 Million to Connect State to eCorridor State Reorganization Plan May Not Be Ready for the Next Session Supreme Court Reverses Removal of Nader’s Name From Ballot Statewide Assessment of School Facilities Completed on Time PSC Grants Entergy Arkansas Approval to Recover ‘Transition Costs’ Entergy Wants to Remain Independent From Regional Groups Ross Leads the Way as House Votes to End D.C. Handgun Ban Congress Gives Up After Not Agreeing on Highway, Welfare Bills Amendment 1 Campaign Seeking Individual Contributions Construction Spending Surges, Manufacturing Continues to Expand It’s Happy Trails for the Ponderosa Ranch

RESEARCH
Governor Wants State Connected to eCorridor Gov. Mike Huckabee says he will ask the legislature for $10 million to connect the state to a high-speed, fiber-optic computer network-known as the eCorridor-that is used for research. The governor says that joining the network, which links university researchers across the country, will improve scientific research and will make Arkansas more attractive to technology-based companies. “If we want high-tech, high-paying jobs, we must sow the seeds that will bring them,” Huckabee said in remarks on Sept. 22 to the Strategic Policy Forum sponsored by the University of Arkansas System.

STATE GOVERNMENT
Reorganization Plan May Not Be Ready in 2005 State Sen. Steve Faris, D-Malvern, and state Rep. Chris Thomason, D-Hope, say it will take some time to develop a government reorganization plan and that it might not be ready for the legislature to consider next year. They are co-chairmen of the State Agencies Reorganization Steering Committee of the Senate and House Interim Committees on State Agencies and Governmental Affairs. They suggested the issue might have to be considered in a special session, or during the 2007 legislative session. Faris, Thomason and other state lawmakers on the panel asked state agency directors to begin looking for cost savings within their departments, saying any reorganization of state government needs to start with a reduction in spending and more efficient programs.

ELECTION
Supreme Court Puts Nader Back on the Ballot The Arkansas Supreme Court on Oct. 1 reversed a Sept. 20 ruling by Pulaski County Circuit Court Judge Timothy Fox that had ordered the removal of presidential candidate Ralph Nader's name from Arkansas' Nov. 2 general election ballot. Fox ruled the third-party group failed to disclose Nader's party affiliation on the petition used to get him on the ballot. The group initially referred to itself as the Better Life Party and later identified itself as the Populist Party. However, in a split 4-3 decision, the Supreme Court disagreed and restored Nader to the ballot in time for ballots to be printed and mailed overseas to soldiers who vote absentee.

SCHOOL FACILITIES
Statewide Assessment Completed on Time State officials said Sept. 30 that a statewide assessment of the condition of Arkansas’ more than 6,400 school buildings has been completed on time, but they have a lot more work to do before they deliver their final report on the state’s school buildings to the Legislature’s Joint Committee on Educational Facilities on Nov. 30. Committee Co-Chair Sen. Shane Broadway, D-Bryant, said 18 assessment teams of architects and engineers started the assessment in June. That was in response to the state Supreme Court’s November 2002 ruling in the Lake View school-funding lawsuit. The court said all 450,000 public-school students had a right to adequate facilities, and facilities in some districts were not adequate.

UTILITIES
PSC Allows Entergy to Recover ‘Transition Costs’ The state Public Service Commission has granted Entergy Arkansas approval to recover up to $8.5 million in “transition costs” over the next 16 months. The costs were incurred when the state repealed its never-enforced deregulation law in February 2003. This means that starting in October the average Entergy customer in Arkansas will pay about 38 cents more a month on home electric bills through January 2006. Commercial customers such as stores and schools will see a 33.6-cent increase per 1,000 kilowatt hours used. For the same usage, large businesses, such as manufacturers, will see a 30.3-cent increase. Regulators to Consider Entergy’s Request Regulators and electric power producers will meet in Jackson, Miss., next week to consider the merits of Entergy Corp. joining a regional power transmission authority versus serving as its own monitor. Entergy Services, Inc., has filed testimony and data last week in response to questions raised by the Arkansas Public Service Commission and the Federal Energy Regulation Commission. Entergy, which is the only public electric utility in the state that has not joined an organization such as the Southwest Power Pool, has said it opposes regional transmission organizations for reasons that center on cost and reliability.

CONGRESS
Ross Leads the Way on D.C. Gun-Control Repeal Congressman Mike Ross was the lead Democratic sponsor of a measure passed Sept. 29 by the House that would overturn the District of Columbia’s strict gun-control laws. Called the District of Columbia Personal Protection Act, the bill would appeal 27-year-old laws that ban handgun ownership in the nation’s capital and require registration and locked storage of rifles or their disassembly. Congressmen Marion Berry and John Boozman also voted for the repeal while Congressman Vic Snyder voted against it. The measure is not expected to pass the Senate. Lawmakers Abandon Highway, Welfare Bills Congress won't be passing a new highway spending bill or revising welfare reform until next year. The House and Senate voted Sept. 30 to continue the old highway and welfare bills into next year. Members say they didn't have the time or the votes to pass new legislation in time for members to recess and head home to campaign for reelection in November. The bills were intended to add tens of thousands of people to the work force.

TERM LIMITS
Amendment 1 Backers Seek Individual Donors Proponents of Amendment 1-which would not eliminate term limits, but would extend House maximums to six two-year terms and Senate maximums to three four-year terms-are asking supporters to publicly endorse the campaign. Specifically, they’re encouraging individuals to join and contribute to the campaign so it won’t look like all the money raised is from the corporate community or organizations. Even donations of $5, $10 and $25 will help. Of course, they also need large contributions as well and are counting on major grass-roots support from leaders across the state. Information, forms and talking points are available on the Arkansans For Term Limits That Work web site (www.termlimitsthatwork.com <http://www.termlimitsthatwork.com>) or by calling the toll-free telephone number (1-866-882-5483).

ECONOMY
Construction Spending, Manufacturing Expand Two reports issued Oct. 1 provide an optimistic look at the sturdiness of the economy, with construction spending surging to a record high in August and manufacturing activity remaining strong in September. The Commerce Department reported that construction spending jumped in August to the highest level ever. The 0.8 percent increase to a seasonally adjusted annual rate of $1.02 trillion reflects continued strength in the housing market. The increase was double what economists had been forecasting, and July’s figure was revised to reflect an even stronger month than previously estimated. The private Institute for Supply Management said its manufacturing index registered 58.5 in September, down from 59 in the previous month, and slightly higher than the 58.3 reading forecast by analysts. An ISM reading of 50 or above means the manufacturing sector is expanding, while a figure below 50 represents a contraction. The index has been above 50 since June 2003.

POP CULTURE
‘Bonanza’ Ranch Rides Off Into the Sunset A great symbol of the rugged old West, or at least as it was portrayed by Hollywood, is riding off into the sunset. The Ponderosa Ranch at Incline Village, Nev., an American West theme park where the television show "Bonanza" was filmed, closed Sept. 26 after its sale to a financier whose plans for the property are unclear. The show, which ran on NBC from 1959 to 1973, was the top-rated U.S. TV program in the mid-1960s.

In This Issue: · Governor Working on Legislative Package · Term Limits Coalition Calls Informational Meeting · Republicans Elect Lamoureux Minority Leader · Weyerhaeuser Will Sell Acreage in Georgia · International Paper Acquiring Box USA · EPA Report Shows Drop in Toxic Releases in State · Group Supporting Marriage Amendment Turns in Signatures · Arkansas Senator Endorses Kerry’s White House Bid · DFA Auditing Equipment Dealers in Arkansas Huckabee Stressing Highways, Health, Higher Ed Gov. Mike Huckabee said at a recent media gathering that his 2005 legislative package would emphasize "the three H's of health, higher education and highways." He told Stephens Media Group journalists that he’s drafting a highway program focusing on the state’s most heavily traveled roads, but acknowledged that any sizable proposal will probably require bond financing because there likely will be little support for a major tax increase. This comes on the heels of the near completion of his five-year, $950 million program that was passed in 1999 to improve nearly 380 miles of Interstate highways. Huckabee said improving the health of Arkansans "has absolutely got to be front-burner because of the mere fact that it will affect our capacity to try to contain some of those costs.” On higher education, the governor said that the recent emphasis on K-12 public education has left state-run colleges and universities short on money, leading to high tuition increases.

"What's happening with these double-digit hikes in tuition almost on an annual basis is that we're going to price higher education right out of the hands of the very kids who need it the most," Huckabee said. "At some point we've got to address that by making our expenditures more efficient, giving a greater focus on how every school can't be everything and offer all things." Pledger Heading Coalition to Extend Term Limits Arkansans for Voter Rights, a coalition formed to support passage of proposed Amendment 1, has set an informational meeting for 9:30 a.m. Thursday, July 15, in the Bob Lamb Conference Room at the offices of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas at 410 South Cross Street in Little Rock. Amendment 1 is the term limits extension proposal that the legislature referred to the November 2004 ballot. Jim Pledger, general manager of the Arkansas State Fair, is serving as the group’s chairman.

The proposal is being opposed by an organization called Save Term Limits headed by Tim Jacob. In response to a press conference held by that group, Pledger outlined to the Arkansas Democrat-Gazette why he feels term limits should be extended from three two-year terms in the House and two four-year terms in the Senate to six two-year terms in the House and three four-year terms in the Senate. “We’ve taken away the right of the people to pick the ones who will represent them best,” he said. “What term limits has done is taken the experience from the legislature and transferred it to the executive branch and to the full-time [state agency] staff members.” Lamoureux Will Lead House Republicans House Republicans elected state Rep.Michael Lamoureux on June 29 as Minority Leader for the remainder of the 84th General Assembly. He replaces state Rep. Marvin Parks, who resigned as leader of the House Republicans to focus on his Second District congressional race against Congressman Vic Snyder. An attorney from Russellville, Lamoureux, 28, represents District 68, which covers part of Pope County. He is completing his first term in the House and is unopposed in the November general election.

Weyerhaeuser Selling 304,000 Acres in Georgia On June 30, Weyerhaeuser Company announced it would sell approximately 304,000 acres of timberlands in Georgia to four companies for $404 million, the largest in a series of recent sales to reduce debt. The purchasers of the timberland are Virginia Forest Investment LLC from Hogansville and Macon, Ga.; Georgia Fall Line Properties LLC from Greensboro, Ga.; Southern Timber Consultants LLC from Perry, Ga.; and Copper Station Holdings #3 from Beaufort, S.C. Upon completion of this transaction, the company will own or manage approximately 6.5 million acres of timberland in the United States. Weyerhaeuser, one of the world’s largest owners of merchantable softwood timber, added 1.7 million acres to its portfolio with the Willamette acquisition in 2002. The company hasn’t sold any of its 730,000 acres in Arkansas as part of its debt-reduction drive. Weyerhaeuser will continue operating its other nine facilities in Georgia.

IP Completes Acquisition of Box USA International Paper announced it completed its acquisition of Box USA on July 1. This acquisition is consistent with International Paper's strategic direction to grow its three core businesses of paper, packaging and forest products. International Paper will immediately begin the process of integrating Box USA's 24 industrial packaging converting facilities and containerboard mill into its industrial packaging business, which comprises 11 paper mills and 77 converting facilities worldwide. "Both International Paper and Box USA share a commitment to making quality products and serving customers. Together, we'll combine our knowledge, talents and expertise, and keep building on our successes by creating better packaging solutions for our customers," said Wayne Brafford, International Paper's senior vice president for Industrial Packaging. "Joining our two companies will also bring value to customers by expanding our market access and coverage. By combining Box USA converting together with our domestic containerboard mills and industrial packaging facilities, we'll improve our position as a supplier of choice in the packaging industry.

Arkansas Receives Favorable Report From EPA The Environmental Protection Agency reported in late June an 18 percent drop in emissions of man-made poisons by industries in Arkansas in 2002, making the state significantly cleaner. A decrease in toxic byproducts released by Nucor-Yamato Steel Company at Blytheville was the main reason for the favorable showing, according to the EPA, which said overall toxic releases by other Arkansas companies increased from 2001 to 2002. EPA’s annual Toxic Release Inventory also showed that industrial toxic releases increased 5 percent nationwide.

Group Submits Signatures on Marriage Issue A group supporting an Arkansas constitutional amendment that would declare that “marriage consists only of the union of one man and one woman” said it submitted petitions to the state July 1 signed by 200,693 Arkansans. If the signatures turned in by the Arkansas Marriage Amendment Committee were approved, that would be double the number needed to get the proposal banning same-sex unions on the Nov. 2 ballot.

Pryor Endorses Kerry for President Senator Mark Pryor recently invited Democratic presidential nominee John Kerry to Arkansas for a hunting trip and officially endorsed the senator from Massachusetts for president. Pryor has said that he and Kerry “have a little different approach on some issues,” but that doesn’t stop him from supporting Kerry’s campaign for the White House. “I’m comfortable with him as a person and a leader,” Pryor said. “Nobody agrees with everybody on every single issue. Certainly, husbands and wives don’t always agree.” A recent Zogby International poll, which appears on the web site of the Wall Street Journal, showed Kerry with a slight lead in Arkansas over President George Bush. In its survey of 505 people, Zogby said Kerry had support from 46.8 percent while Bush had 44.7 percent.

DFA Auditing Equipment Dealers in State Be careful with sales and purchases of equipment. The state Department of Finance and Administration is currently conducting audits of equipment dealers to determine if sales taxes owed to the state are being properly remitted. Arkansas has a farm equipment exemption 26-52-403 for equipment used in the production of food and fiber, but it does not extend to the production of harvesting of timber.

However, there is an exemption for timber harvesting equipment for the first $50,000 of the purchase price. DF&A is not auditing the sale of major equipment purchases. The problem seems to be in the purchases of ATVs and small garden tractors.

For more information about the SouthWestern Association's lobbying activities, contact Jeff Flora.