Week 8: Part 1 Legislative Scorecard

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Conduit for Action Legislative Session Weekly Scorecard:

Week 8: Part 1 – March 6 – March 10, 2017

Note: There was a flurry of bill filings in the state legislature this past week as the filing deadline for bills is Monday, March 6. The Conduit for Action Legislative scorecard will be split into parts this week to make sure all relevant bills are covered in depth, while also delivered in a concise, easy to read format.

Taxes / Budget

HB1704: OPPOSE

GIF Appropriation Bill

Sponsor: Rep. Lane Jean (R-H2)

This bill will appropriate $64 million from the general improvement fund to “economic development” districts for “economic development” projects. Each of the eight districts would get $8 million to spend on grants to private groups. This type of spending has come under scrutiny after two former state legislators, Sen. Jon Woods and Rep. Micah Neal, are facing fraud and corruption charges (Neal entering a guilty plea) for kickbacks they received in directing taxpayer money to private groups. Conduit for Action has long covered GIF spending and the problems with it in the articles below. This bill would keep the funding alive funneling taxpayer money to private organizations that have now been highlighted to include alleged fraud and corruption.

A few Conduit For Action articles on General Improvement Fund:

• General Improvement Fund – A Reelection Tool – Part 1 May 8, 2015
• The Fall & Rise of Legislative Pork in Arkansas– Part 2 May 12, 2015
• Raiding state funding sources for Medicaid – Part 3 May 18, 2015
• General Improvement Fund Award Attracts Investigators November 1, 2015
• Rainy Day Fund deception – Part 1 June 28, 2016
• Save it for a rainy day– Part 2 July 11, 2016
• Providing Discretionary Funds Instead of Performing Meaningful Budgeting– Part 3 July 18, 2016
• Rainy Day spending skyrocketing under Governor Hutchinson December 16, 2016
• Legislator’s guilty plea spotlights problem of discretionary spending of GIF January 5, 2017

 

HB1700: SUPPORT

Appropriation for new voting machines

Sponsor: Rep. Justin Gonzales (R-H19)

This bill would appropriate $30 million to the Secretary of State’s office for new voting machines. The Secretary of State’s office is led under the fiscally responsible leadership of Mark Martin. Under Secretary Martin, the office has made significant capital facilities improvements and introduced new online capabilities without asking for new money from the legislature. During Martin’s first term as Secretary of State, his office came in under budget by $12 million and returned those funds to the state treasury. One of the actual roles of government is to oversee fair and free elections. New voting machines are needed in Arkansas and this money would actually go towards a core function of government and is done so after years of this same office saving taxpayers millions of dollars.

 

HB1726 and HB1727: OPPOSE

Puts full 6.5% state sales tax on wholesale gas purchases; issuing of bonds for funding of highway projects.

Sponsor: Rep. Dan Douglas (R-H91)

These bills work together and would impose a 6.5% sales tax on the wholesale price of gasoline and diesel. Rep. Douglas seemed to mock taxpayers and concerned Arkansans in an interview with the Arkansas Democrat Gazette on this issue. Rep. Douglas stated “It’s a revenue increase. I’m sure some will say it’s a tax increase.” Throughout this session legislators have tried to avoid situations where something could be labeled a true “tax increase” or a “new tax” by giving their interpretation of the law and stating that is the only interpretation allowed and any other person’s opinion or view is simply “untrue” somehow.

HB1727 is the bill that imposes the 6.5% tax on wholesale gas purchases. The 6.5% tax increase would apply to an annual average calculated by the Department of Finance and Administration.  However, if the price of gas goes down from one year to the next, the people of Arkansas will not see those savings as the bill would require the previous year’s average be used instead of the lower price.  All new taxes would go into the new “2017 Highway Maintenance and Construction Bond Account of the State Highway and Transportation Department Fund.”

For this “new revenue” to be collected the people of Arkansas would have to vote to issue bonds to fund highway projects. HB1726 covers the bond process. Bonds would be issued to finance highway maintenance and new highway projects, speed up improvement projects already underway, and pay the costs to issue and handle the bonds. The bonds would have to be approved by a majority of the voters in a special election or in the general election.  The bonds would be secured by the full faith and credit of the State of Arkansas, including its general revenues. If revenues from the 6.5% sales tax on wholesale gas are not enough to pay back the bonds, then “other revenues provided by the General Assembly” would be used to pay back the debt. If “designated revenues are insufficient to make timely payments of debt service on the bonds, the payment shall be made from the general revenues of the State of Arkansas.”

The ballot title for the vote of issuing the bonds is “Issuance of 2017 Arkansas Highway Maintenance and Construction Bonds and pledge of the full faith and credit of the State of Arkansas.” There is additional language that would be included but nowhere does it state that the debt would be paid for by a tax increase of 6.5% tied to the taxpayer’s vote for the bond program. Instead, it tells the people that this is already a tax but will not become effective unless the issuance of bonds are approved. In effect, the people are voting on the tax increase to then fund the bond project. This doesn’t seem clear in the title or other sections and instead seems to indicate this is already a tax on the books and you are just voting to enforce it. However, the reality is that the tax itself will not go into effect unless the people pass it in this bond measure.

The terms and conditions of the bonds themselves do not put any cap on the amount of bonds which may be issued. Instead, the bill states “the bonds shall be issued in series in amounts sufficient to finance all or part of the costs of highway improvements.” This appears to be another blank check for the issuing of public debt secured by the general revenues of the state of Arkansas similar to the one passed in November 2016.  Interest rates type and amounts would be set later by the Highway Commission and could be either a fixed or variable rate. With interest rates at near record lows, any variable rates would seem to only increase over time.

It appears as written that full authority of these bonds would be handed over to the very entity who would benefit from the bonds themselves, the Highway Commission. The bill states, that “the bonds may be sold in any manner, either at private or public sale, and upon any terms determined by the State Highway Commission.” Additionally, “the commission shall set the terms and conditions of bidding, including without limitation the basis on which the winning bid will be selected.” The cost of the bond program explodes further with broad “employment of professionals” to issue and sale the bonds including without limitation “legal counsel, financial advisors, underwriters, trustees, paying agents, and remarketing agents.” Authority and decision making will be turned over to the private groups who stand to gain the most from this bond process.

All bonds issued and interest on the bonds are exempt from all taxes of the State of Arkansas, including without limitation income, inheritance, and property taxes. Finally, immunity is granted to the Highway Commission and its members so that they are not personally liable for any reason.

HB1727 and HB1726 combined are a behemoth of a growth in government. From a tax increase to this nearly unrestricted bond program, the true price tag for taxpayers can not likely be fully estimated. The tax itself is projected by DFA to bring in over $200 million more tax revenue annually from gas purchases.

Roads are truly one of the actual roles of government. Priority to roads over the other hundreds of millions of dollars in state spending elsewhere would avoid this new expansion of government.

State Agencies

SB504: SUPPORT

Requires school board elections be part of the general election

Sponsor: Sen. Jane English (R-S34) / Rep. Mark Lowery (R-H39)

This bill would remove the choice of schools to have their school board elections on the “third Tuesday in September” and instead make the elections part of the general election held in November. This should help save local governments money by not having to fund an election just for school board contests when turnout has historically been low.

SB512: SUPPORT

Requires State Agencies to repeal at least one rule for each new rule they propose

Sponsor: Sen. Linda Collins-Smith (R-S19)

This straightforward bill would require state agencies to repeal one rule before it can adopt a new proposed rule. This bill mirrors a similar effort at the federal level to cut back on regulations. President Trump recently signed an executive order requiring federal agencies to repeal regulations before implementing new ones. This common-sense solution would seek to cut back on new regulations at the state level. There are exceptions for rules specifically required by the General Assembly and emergency rules. This would keep government from expanding rules and regulations by state agencies.

 

Occupational Licensing / Regulation

HB1717: OPPPOSE

Required registration for those selling dogs or cats; criminal penalties for regulation violations

Sponsor: Rep. Jim Sorvillo (R-H32)

This bill would require any person who offers or attempts to offer a dog or cat for sale within the state with advertising to register as a seller with the Department of Public Health. This registration would force all dog or cat sellers to give their name, location, the exact number of dogs or cats at their facility, a certificate of good health from a licensed vet for all dogs or cats being sold, and “any other information required by the department.” A fee to cover the costs of these registrations would also be imposed. It would require those advertising the sale of dogs or cats to place this new “registration number” they receive in the ad and if the seller does not do so they would then become a criminal, with a violation being a Class A misdemeanor (up to one year in jail and a fine of up to $2,500). An additional fine could also be levied by the Department of Public Health. The legislation would prohibit people from selling dogs or cats in a park, flea market or other outdoor market, or parking lot EVEN IF the private property owner allows the sale on his private property. The failure to register or renew as a seller with the Department of Health would be a Class C misdemeanor (up to 30 days in jail and a fine up to $500). These regulations could immediately increase the price of dogs and cats in Arkansas. It could also criminalize potentially innocent people who sell dogs or cats. A Class A misdemeanor for not getting a registration number and using it in advertisements would be the equivalent of possessing four ounces of marijuana for personal use. It is an increase in government and a decrease in the freedom for Arkansans. A free and open market for the sale of dogs and cats in Arkansas would be no more if this bill became law.

SB514: SUPPORT

More flexibility on supervision of apprentice plumbers

Sponsor: Sen. Bart Hester (R-S1) / Rep. Jim Dotson (R-H93)

This bill allows a master plumber or journeyman plumber to supervise up to three apprentice plumbers at single job. The bill defines an apprentice plumber who is in their “last year of apprenticeship” as those who already have obtained 480 hours or more of classroom instruction and completed 6,000 hours or more of on the job work. Those who have met these requirements may then engage in plumbing with “indirect” supervision. This would ease the “reasonable proximity requirements” and allow an apprentice plumber to communicate with their supervisor through electronic means. This bill could help spread out the work of a plumbing company to allow an apprentice plumber to provide plumbing services without the direct supervision of the master plumber. This would free them up to get more projects done providing the plumbers more economic freedom to engage in their profession, and thus benefitting the consumer.

HB1757: OPPOSE

Requires “off-premises” caterers to register with the secretary of state & mandates insurance coverage requirements

Sponsor: Rep. David Hillman (R-H13)

This bill would require that off-premises caterers would have to be an entity registered with the Secretary of State in good standing. This bill would also require off-premises caterers to maintain a liability policy with a minimum coverage of $1 million, an increase from $100,000 previously. For anyone to even get an off-premises caterer’s permit they would now have to have general liability insurance coverage of $1 million, an increase from $200,000 previously. Additional “liquor liability” coverage would now be required for a permit under this bill. This bill could make it harder for people to be an off-premises caterer and at the least increase the costs they have currently, which would be passed off onto the consumer. A better solution would be to let the free market and the individual parties contract for any insurance coverage amounts they deem necessary rather than the government mandating an amount and specific coverage. This bill increases the dependency on government and lessens economic freedom in this area of commerce.

SB524: OPPOSE

Increases rules violation penalties; outlaws payments for HVACR work done without a license; new criminal penalties imposed on non-payment of fines

Sponsor: Sen. Jeremy Hutchinson (R-S33)

This bill would increase penalties from $250 to $1,000 for HVACR licensing board rules violations. For anyone who is assessed a penalty for a third time and fails to pay the penalty within six months, they are deemed guilty of a Class B misdemeanor and shall be punished by a fine not exceeding $1,000 or 90 days in jail, or both. The bill also makes it illegal for any person who engages in HVACR work without a license to receive any payments for the work they have done. Any payments received must be given over to the government through the HVACR licensing board. This in effect would be legal theft because someone did not get the permission of the HVACR licensing board before engaging in HVACR work. There is no language in the bill requiring that the work may have somehow been harmful to the health, welfare, or safety of the public, but simply because they were “unlicensed” when performing the work they shouldn’t get paid. This is an egregious overstep in occupational licensing, grows government, and increases dependency on government.

 

Scorecard Year-To-Date

Bill #	Description	Score
HB1011	prohibiting PAC-to-PAC contributions	OPPOSE
HB1012	prohibiting PAC-to-Candidate contributions	OPPOSE
HB1018	Annexation procedures amended	SUPPORT
HB1034	Licensing of hearing instrument dispensers	OPPOSE
HB1035	Restricts use of SNAP benefits to the purchase of foods with sufficient nutritional value	SUPPORT
HB1126	Exempts hate offense litigation in an employer-employee relationship	SUPPORT
HB1161 & SB119	Creates new earned income tax credit	OPPOSE
HB1182	Authorizing advanced practice registered nurse recognized as primary care provider under medicaid	SUPPORT
HB1222	School Choice and Education Savings Accounts	SUPPORT
HB1227	Reduction of income tax rates if revenue from those rates is greater than 3% from the previous year	SUPPORT
HB1267	Tire tax	OPPOSE
HB1272	Microbrewery production caps increased	SUPPORT
HB1335	Allows annexed landowners to vote to get out of annexation	SUPPORT
HB1387	Prohibits seat belt violations as only cause for stopping a vehicle	SUPPORT
HB1395	Income tax credit for small businesses hiring recently returned veterans	SUPPORT
HB1405	Unemployment tax cut and incentives to seek employment	SUPPORT
HB1427	requiring electronic filing of campaign finance reports; provides searcable database for campaign contributions	SUPPORT
HB1442	Personal and family finance class requirement for public school graduation	SUPPORT
HB1462	Restricts SNAP benefits waiver requests; protects current SNAP benefits work requirement	SUPPORT
HB1465	Freezes Obamacare Medicaid Expansion (Private Option, Arkansas Works) enrollment	SUPPORT
HB1551	Protections against unneccessary regulation and misuse of occupational licensing	SUPPORT
HB1700	Appropriation for new voting machines	SUPPORT
HB1704	GIF Appropriation bill	OPPOSE
HB1717	Required registration for those selling dogs or cats; criminal penalties for regulation violations	OPPOSE
HB1726	Puts full 6.5% state sales tax on wholesale gas purchases;	OPPOSE
HB1727	issuing of bonds for funding of highway projects	OPPOSE
HB1757	Requires “off-premises” caterers to register with the state and mandates insurance coverage requirements	OPPOSE
HJR1019 / SJR13	Loser pays tort reform; capts on punitive damage; alternative to SJR8	SUPPORT
SB101	prohibits game warden from entering private property without a warrant	SUPPORT
SB102	Limits the max fine for not wearing a seatbelt to $25	SUPPORT
SB112	Income tax deduction for homeschool expenses, private school tuition	SUPPORT
SB115	Reduces income tax rates on lowest tax bracket; creates Tax Reform Task Force	SUPPORT IF AMENDED
SB120 & HB1162	retired military income tax exemption; new tax on digital products; tax cut for soda syrup; tax increase on candy/soda;	SUPPORT IF AMENDED
SB140	New Internet Sales Tax	OPPOSE
SB175	Disclosure of benefits received by government officials from medicaid providers	SUPPORT
SB24	Decreases number of juvenile criminal detentiuon facility review committees	SUPPORT
SB331	$50 million to Governor’s quick action closing fund ($30 million increase for corporate welfare)	OPPOSE
SB355	Ends Obamacare Medicaid Expansion (Private Option / Arkansas Works) on Dec. 31, 2018	SUPPORT
SB362	Repeals InvestArk; phases in sales tax exemption on purchases for manufacturing equipment repair parts	SUPPORT
SB4 & HB1010	Publishing PAC reports, exploratory committees, Independent Expenditures	SUPPORT
SB425	Takes treasurer’s investment work and puts under Board of Finance oversight	SUPPORT
SB5 & HB1009	Prohibits constitutional officers from forming more than one PAC	OPPOSE
SB504	Requires school board elections be part of the general election	SUPPORT
SB512	Requires state agencies to repeal at least one rule for each new rule they propose	SUPPORT
SB514	More flexibility on supervision of apprentice plumbers	SUPPORT
SB524	Increases rules violation penalties; outlaws payments for HVACR work done without a license; new criminal penalties imposed on non-payment of fines.	OPPOSE
SB86	Adds continuing education program for HVACR licensees	OPPOSE
SJR10	Fair Ballot Titles; 3/4th majority vote for legislative proposed constitutional amendments	SUPPORT
SJR4	A constitutional amendment to move from elected supreme court justices to appointment process	OPPOSE
SJR8	Tort reform; giving General Assembly power over certain court matters; caps contingency fee agreements	OPPOSE

 

 

Week One Scorecard

Week Two Scorecard

Week Three Scorecard

Week Four Scorecard

Week Five Scorecard

Week Six Scorecard

Week Seven Scorecard

 

Purpose:

Conduit for Action, Inc. (CFA) promotes the reduction in the size and scope of Arkansas state government with the belief such reduction would proportionately increase individual freedom and liberties and economic prosperity for all Arkansans.  During the Arkansas 91^st General Assembly regular legislative session, CFA will issue weekly analysis of relevant bills filed by the legislature.  CFA will take a position on those bills and either support or oppose them using the CFA Economic Freedom Filter. This filter looks at whether a piece of legislation promotes more freedom or less freedom by considering: (1) If it grows or shrinks government, (2) Increases/Decreases dependency on government, and/or (3) Spends money the state does not have.

CFA will be highlighting the bills (by topic) recently filed and which may be considered for either a committee or full chamber vote. CFA will additionally be tracking and scoring those bills mentioned. These scores will assist in rankings for the annual Calvin Coolidge Heroes of Freedom awards, highlighting those state legislators promoting legislation which promotes reducing the scope and size of government.

 

*This scorecard, its contents, and positions on legislation is policy only and does not indicate any personal support for or against a specific legislator-sponsor.