Capitol Notebook: Capital Gains Bill Passes House, 10 Commandments Monument Bill Gets Senate Approval

It was a wild Wednesday in the legislature as multiple bills crossed the finish line and House members continued a marathon session into the evening.

The House approved a capital gains exemption bill, while a bill to create a monument honoring the 10 Commandments received a yes vote in the Senate.

It was a debate on tax policy that broke out Wednesday as House members discussed putting back the state’s exemption rate on capital gains.

The House voted 68-17 Wednesday to approve a bill to reinstate a 50% exemption rate on capital gains set in the last session.

The bill, House Bill 1402, would gradually move the rate back to 50%, from the current 40% set in a tax cut bill earlier this year. The 40% rate would move to 45%, starting Feb. 1, while the 50% rate would take effect July 1, 2016. Also, a $10 million exemption rate would be kept in the law.

Officials with the Arkansas Department of Finance and Administration said Tuesday that the bill would have a $6 million impact on the state’s budget in FY 2016 and $11.8 million FY 2017.

Rep. Matthew Shepherd, R-El Dorado, who sponsored an amendment on the bill, said the bill would create some consistency in the state’s tax policy.

Rep. Warwick Sabin, D-Little Rock, who had a tax credit bill for people making under $21,000 a year fail in committee Tuesday, said the capital gains bill was weighted toward higher-income Arkansans.

“There are only 12 businesses in the state to benefit from this,” Sabin said, noting it was only about 1/1,000th of a percentage of overall taxpayers.

Shepherd countered that the bill would simply restore the commitment made to businesses and that the capital, people and jobs created would head to other states like Florida or Texas – two states without an income tax – if nothing was done.

The bill now heads to the Senate where it is likely to encounter another debate as Lt. Governor Tim Griffin pushes that chamber to consider a tax break for veterans.

10 COMMANDMENTS BILL
The Senate voted 27-3 to approve Senate Bill 939, sponsored by Sen. Jason Rapert, R-Conway. The bill, which cleared committee Tuesday, would allow the Secretary of State to permit and arrange for the monument.

The monument, which would be paid for through private money at no cost to the state, would be placed on the grounds of the state Capitol in Little Rock. The bill received bipartisan support, with five Democrats joining 22 Republicans in voting yes. Three Democrats voted no, while three senators did not vote.

The bill has been controversial, with opponents saying the monument violated a principle of separation of church and state. However, supporters have said the bill would honor the moral and ethical views of the religious-based text.

The bill now goes to the House.

MATERNITY LEAVE BILL APPROVED
The House approved a bill that would allow female state employees to have up to six weeks maternity leave. The 56-28 vote, with four present, was on House Bill 1426.

Under the bill, sponsored by Rep. Clarke Tucker, D-Little Rock, all female employees who work for a state agency and most executive, legislative and judicial branch employees, could receive up to $500 a week for six weeks.

Tucker said the bill, which would have an estimated $350,000 yearly impact on the state’s budget, would benefit about 120 women each year. The money to help pay for the benefit would come from each agency or office’s primary source of revenue. The bill would also help reduce absenteeism and turnover rates among state employees, Tucker told House members.

However, Tucker did say the bill would not cover mothers who adopt babies.

Rep. Ken Bragg, R-Sheridan said he believes the opportunity for a new mother to spend time with her baby outweighs the fiscal impact of the bill. Rep. Bob Ballinger, R-Hindsville, said while he supports the idea as well, he believes the issue should be part of an overall debate on the state’s salary structure.

The bill now heads to the Senate.

COMMITTEES
The House State Agencies and Governmental Affairs committee was busy Wednesday hearing a series of bills on the agenda.

The committee approved House Bill 1233, sponsored by Rep. Jana Della Rosa, R-Rogers; voted against and then for House Bill 1425, sponsored by Rep. Clarke Tucker, D-Little Rock; and voted against House Bill 1119, sponsored by Rep. Fred Love, D-Little Rock.

The bill from Della Rosa would mandate the filing of campaign finance records online with the Secretary of State’s office. According to the bill, the Secretary of State’s website would also be retrofitted to allow people to search campaign finance records. The bill will go to the House floor Thursday.

The bill from Tucker deals with the issue of coordinating between candidates and interest groups. The committee voted Wednesday morning against the bill, but reversed course after the bill was amended in the afternoon.

The amendment included language to clear up concerns over whether or not a commercial or an ad attempted to influence the outcome of an election.

The committee voted against Love’s bill, which would have removed a dual holiday honoring Dr. Martin Luther King Jr. and Confederate general Robert E. Lee. According to the bill, a memorial day honoring Lee would have been set for the second Friday in January while King would be honored on the third Monday in January.

FLOOR ACTION
The legislature also approved two workforce training-related bills Wednesday.

The House voted 90-1, with one present, to approve Senate Bill 791, sponsored by Sen. Jeremy Hutchinson, R-Benton and Rep. Ken Bragg, R-Sheridan. Bragg told the House that the bill would help the state comply with the federal Workforce Innovation and Opportunity Act, provide $27 million in funding and help build a workforce development plan for the state.

According to the bill, officials will build a plan “through (the) alignment of workforce development, education and economic development systems in support of a comprehensive, accessible and high-quality workforce development system in the state to better address the employment and skill needs of workers, job seekers and employers.”

The bill now heads to the Senate.

The Senate approved a key part of the governor’s workforce training initiative. The Senate voted 34-0 to approve Senate Bill 368, sponsored by Sen. Jane English, R-North Little Rock. The bill would create a 10-member board to build a plan for vocational-technical education in the state, as well as an overall workforce development plan.

The board would control the state’s adult education funding, as well as have a supervisory role for every vocation, technical and occupational education program in Arkansas. The bill also was approved in the House by an 86-1 margin March 20.

RESTRUCTURING BILL APPROVED
A plan to study the restructuring of nearly 125 state agencies into state departments also received bipartisan support Wednesday. The Senate voted 34-0 to approve Senate Bill 382, sponsored by Sen. Eddie Joe Williams, R-Cabot.

Under the bill, state government would be divided into at least 10 departments. They include the Department of Agriculture, Department of Commerce, Department of Interior, Department of Health and Human Services, Department of Corrections, Department of Education, Department of Finance and Administration, Department of Labor, Employment and Workforce, Department of Natural Resources and Department of Homeland Security.

The bill also gives the governor discretion on creating additional departments “in order to facilitate an increase in efficiency and reduction of administrative costs.”

The bill now goes to the House.

RACIAL IMPACT BILL FAILS
A bill requiring a racial impact statement for any crime-related bills filed in the state legislature narrowly failed Wednesday. The Senate voted 17-3, with 14 not voting (one vote short of passage) in Senate Bill 604, sponsored by Sen. Joyce Elliott, D-Little Rock.

Under the bill, a racial impact statement would have to be prepared for any bill to “create a new misdemeanor or felony offense; substantially change an element of an existing misdemeanor or felony offense; change the penalty for an existing misdemeanor or felony offense or change existing sentencing, parole or probation procedures.”

The statement would have had to be prepared within 15 days of filing and submitted to the University of Arkansas at Little Rock William H. Bowen School of Law for review. The statement would also have to show the estimated number of criminal cases per year that the bill would affect, the impact of the bill on a minority, the impact on correctional facilities and services and other matters deemed relevant to the bill, the bill noted.

SCHOOL SAFETY BILL PASSES
The Senate overwhelmingly approved a school safety bill that supporters say will use a panic button system to notify police if an emergency happens.

The 34-0 vote on House Bill 1653, sponsored by Rep. Scott Baltz, D-Pocahontas and Sen. Jane English, R-North Little Rock, came after a 91-0 vote in the House on March 16.

Baltz has said the system, connected with a cell phone app, would be used by school and emergency officials. Once a button is pushed, 911 is notified within seconds while people who are signed up for the system will get a text alert within two seconds.

Officials are working with a Massachusetts based company, Rave Panic Button, on the project. The program is expected to cost about $950,000 the first year and $850,000 a year after that for use statewide. The bill now heads back to the House.

THURSDAY SCHEDULE
In addition to Gov. Asa Hutchinson announcing Mike Preston as his new AEDC director at 10:30 at the Governor’s conference room, the following committee meetings are set for Thursday in the Arkansas General Assembly:

Joint Committees
9:00 a.m. – Joint Budget Committee, Room A, MAC.

House Committees
8:00 a.m. – Judiciary, Room 149.
8:30 a.m. – Advanced Communications and Information Technology, Room 151.
10:00 a.m. and Call of Chair – Education, Room 138.
10:00 a.m. – Public Transportation, Room B, MAC.
10:00 a.m. – Public Health, Welfare and Labor, Room 130.
10:00 a.m. – Revenue & Taxation, Room 151.
12:00 p.m. – Rules, Room B, MAC.

Senate Committees
10:00 a.m. – Agriculture, Forestry & Economic Development, Room 309.
10:00 a.m. – City, County & Local Affairs, Room 272.
10:00 a.m. – Insurance & Commerce, Room 171.
10:00 a.m. and Upon adjournment – State Agencies & Governmental Affairs, OSC.

The House and Senate will convene at 1 p.m. Thursday.