2011 LEGISLATIVE SUMMARY 88TH GENERAL ASSEMBLY 88TH GENERAL ASSEMBLY • 2011 LEGISLATIVE SUMMARY 1 economica y engaged Mitchell Williams’ attorneys work with national and international companies that are considering locating in Arkansas and others that are already involved in large projects in the state. We work alongside local and state economic development agencies and with major global manufacturing companies, as well as other business sectors, to help bring new opportunities to Arkansas. Learn more at MitchellWilliamsLaw.com. Arkansas Texas New York Washington, D.C. MitchellWilliamsLaw.com Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. 425 W. Capitol Ave., Suite 1800 | Little Rock, AR 72201 | 501-688-8800 | Harry Hamlin, Managing Director 2 88TH GENERAL ASSEMBLY • 2011 LEGISLATIVE SUMMARY TABLE OF CONTENTS State Chamber/AIA Executive Committee & Staff ................................................................ 3 Message from State Chamber/AIA Governmental Affairs Team .................................. 5 Priority Issues ..................................................................................................................................................6 Lobbying Summary ......................................................................................................................................7 Congressional Redistricting..................................................................................................................13 Arkansas State Tax Update .................................................................................................................14 1200 West Capitol Avenue P.O. Box 3645 (72201) Economic Development Related Legislation ............................................................................18 Little Rock, Arkansas 72203-3645 What the Legislature Did and Didn’t Do .................................................................................. 22 Telephone: 501-372-2222 Tracked Bills That Became Law and Tracked Bills That Did Not Become Law .. 23 Fax: 501-372-2722 www.arkansasstatechamber.com Pinnacle Program ........................................................................................................................................24 Written by: Arkansas General Assembly Bills and Resolution Filings ...................................................26 Kenneth R. Hall Executive Vice President, State Chamber/AIA Michael O. Parker, Esq. Dover Dixon Horne PLLC Angela DeLille Director of Governmental Affairs, Executive Committee State Chamber/AIA Arkansas State Associated Industries Roby Brock Executive Editor, Chamber of Commerce of Arkansas Talk Business & Politics CHAIRMAN OF THE BOARD Chairman of the Board Edited by: Ed Drilling Bill Hannah AT&T Arkansas Nabholz Construction Corporation Jeff Thatcher Director of Communications, Vice Chairman Vice Chairman State Chamber/AIA Mike Callan Russell Bragg Arkansas Oklahoma Gas OK Industries Inc. Staff: Vice Chairman Vice Chairman Randy Zook Gary Head Steve M. Cousins President/CEO Signature Bank of Arkansas Lion Oil Company Kenneth R. Hall, J.D. Vice Chairman Vice Chairman Executive Vice President Maggie Sans Ken Kimbro Susie Marks, CCE Wal-Mart Stores Inc. Tyson Foods, Inc. Senior Vice President - Programs Vice Chairman Vice Chairman Angela DeLille Director of Governmental Affairs George Wheatley Bill J. Reed Waste Management Riceland Foods Inc. Jeff Thatcher of Arkansas Director of Communications Treasurer Treasurer Treasurer Phillip Baldwin Phillip Baldwin Deb Mathis Phillip Baldwin Manager, Scheduling & Events Southern Bancorp, Inc.Southern Bancorp, Inc. (Retired) Southern Bancorp, Inc. (Retired)(Retired) Marcus Turley Past Chairman Past Chairman Membership Development Representative Randy Wilbourn Ray C. Dillon Martin-Wilbourn Partners LLC Deltic Timber Corporation Bill Watson Sales Representative Past Chairman Past Chairman Sue Weatter Hugh McDonald Benny Baker International Paper Container Division Program Director, Governor’s Entergy Arkansas, Inc. Quality Award Ex-Officio Bob Lamb Raymond Burns Joanne Douglas Bob Lamb Consultant Rogers-Lowell Area Chamber of Commerce Administrative Assistant 88TH GENERAL ASSEMBLY • 2011 LEGISLATIVE SUMMARY 3 4 88TH GENERAL ASSEMBLY • 2011 LEGISLATIVE SUMMARY DEAR STATE CHAMBER/ AIA MEMBERS The State Chamber/AIA secured a significant return on the investment of our members and succeeded in enhancing the business climate in the state during the 88th Session of the Arkansas General Assembly. This was a very successful session for business. We succeeded in saving employers between $60 and $75 million dollars by reducing the cost of the state’s unemployment insurance system; we led the effort to further reduce the sales tax that manufacturers pay for energy used in industry and manufacturing. The total dollar amount we have State Chamber/AIA President saved manufacturers on this exemption amounts & CEO Randy Zook and to approximately $24 million over the last three Executive Vice President Kenny legislative sessions; and we led efforts to expedite Hall plot strategy at the State administrative tax appeals and promote Capitol. access to justice. House Speaker Robert Moore, Attorney General Dustin Besides our legislative successes, we hosted a McDaniel, State Chamber Chairman Ed Drilling of AT&T series of lobbyist luncheons during the Session. Several prominent legislators Arkansas and State Representative Barry Hyde at the State made presentations including the House Speaker, Senate Pro Tem, Chamber/AIA Legislative Reception in mid-January. House and Senate Minority Leaders, House and Senate Revenue and Tax Committee Chairmen, House and Senate Budget Chairs, House Judiciary Chair and others who had relevant legislation/issues to discuss. In mid-January, we hosted a Legislative Reception in the newly remodeled State Chamber/AIA building drawing more than 300 guests including legislators, constitutional officers, legislative staff members, State Chamber/AIA board members, State Chamber/AIA Governmental Affairs Committee members, Leadership Arkansas Class V members and Leadership Arkansas alumni. The event provided an excellent opportunity for legislators to network with members of the state’s business community as well as an opportunity for business leaders to discuss issues with their legislators in a one-on-one setting. The Lobbyist Luncheons featured a number of notable speakers and drew We continued our industry-leading communications substantial crowds throughout the Session. efforts by providing our members a Daily Legislative Update each day the General Assembly was in Session. Thanks to all of our members who read our updates and made contact with our legislators. This 2011 Legislative Summary has been prepared for you as a resource document. It includes a summary of our priority issues for the Session; a chart showing the top legislation we worked on; a report from our tax counsel; economic development-related legislation and a broad business summary of legislation provided by Talk Business host Roby Brock. Business matters, now more than ever, and we recognize that our successful efforts during the 88th General Assembly were bolstered by the strong grassroots participation of our members. Thank you for your continuing support of the State Chamber/AIA. S i n c e r e l y, Randy Zook President & CEO Kenneth R. Hall Executive Vice President Angela DeLille State Chamber/AIA Governmental representatives Director of Governmental Affairs Angela DeLille, Randy Zook and Kenny Hall. 88TH GENERAL ASSEMBLY • 2011 LEGISLATIVE SUMMARY 5 PRIORITY ISSUES • Returning the state’s unemployment insurance • Fighting efforts to eliminate the Electoral College trust fund to solvency. We took a leadership role in the system to elect the President of the United States. introduction and successful passage of Act 861, which eliminates This was never introduced due to our efforts prior to the session. wage indexing, reduces Arkansas jobless benefits from 26 to 25 • Protecting the Education Reforms of 2003-04, the weeks and sets new eligibility requirements for workers seeking Civil Justice Reform Act of 2003 and the workers’ unemployment benefits. These changes are expected to save compensation reform act of 1993. Mission accomplished - employers between $60 and $75 million annually or between 17 no bills were passed that weakened any of these important measures. and 21 percent of the total trust fund deficit. • The State Chamber/AIA also supported efforts to • Leading the effort to further reduce the sales improve Arkansas infrastructure, specifically the state’s tax exemption for energy used in industry and highway system with the passage of Act 773, which would allocate manufacturing. We led the effort to pass Act 754, which will a temporary 5-cent-per-gallon increase in the tax on diesel fuel if provide an additional ½ cent reduction for manufacturers in NAICS approved by voters. The General Assembly also referred a proposal codes 31-32-33 to a new state tax rate of 2.625 percent, as well as to the November 2012 election ballot providing the state’s independent power producers a tax cut similar that would impose a temporary half-cent to that enjoyed by manufacturers. The additional sales tax reduction general sales tax increase that would be for manufacturers became effective July 1, 2011. The tax cut for dedicated to highway improvements. independent power producers becomes effective January 1, 2012. • Additionally, the State Chamber/ Thus far, over the last three