Capitol Notebook: Tax, Prison And Lottery Bills Advance

The major action at the Arkansas Legislature centered on the so-called “Religious Freedom Restoration” bill and the official release of Gov. Asa Hutchinson’s nearly $5.2 billion state budget. But other legislation worked its way through the corridors of the capitol.

TRADE BILL PULLED
A House bill that would regulate the importation of wine from states that impose certain agricultural production standards on the state’s agricultural producers was withdrawn from consideration Monday.

Rep. Dan Douglas, R-Bentonville, said he would not run House Bill 1934.

According to the bill, “wine shall not be imported into Arkansas from a state that imposes standards on agricultural products if those standards impose a substantial burden on this state’s agricultural industry as determined by the Secretary of the Arkansas Agriculture Department.”

Douglas said he had no intention of running the bill, which passed the House Thursday, through a Senate committee Monday.

However, he said the bill was not about “wine, chicken or eggs”, but about trade in California. The state recently imposed regulations on Arkansas eggs, Douglas told the House last week.

“It was to send a message to the state of California, that Arkansas does not appreciate their (California) regulations being sent down our throats,” Douglas said.

Douglas also said he spoke with lawmakers and officials in the Golden State over the weekend about the bill, noting they “got the message.”

AIRCRAFT BILL APPROVED
The Senate Revenue and Taxation Committee approved a bill that would exempt sales and use tax on certain services and parts related to commercial jet aircraft.

The bill, sponsored by Rep. Joe Jett, D-Success, would amend state law by allowing certain exemptions.

“Parts or other tangible personal property incorporated into that become a part of commercial jet aircraft components or commercial jet aircraft subcomponents and the services required to incorporate the parts or other tangible personal property or otherwise make the parts or other tangible personal property part of a commercial jet aircraft component or commercial jet aircraft subcomponent,” the bill noted.

The bill would exempt the “gross receipts or gross proceeds derived from the sale of an aircraft within the state” from the gross receipts tax if the aircraft is sold by a person that is a resident of another state to a purchaser that is a resident of another state and will base the aircraft outside the state of Arkansas.”

The bill would only apply to aircraft weighing more than 12,500 lbs. and the Department of Finance and Administration scored its impact as revenue neutral. It now heads to the Senate floor.

CAPITAL GAINS TAX CUT
The Senate Revenue and Taxation committee also approved a bill, setting a capital gains tax exemption rate.

The committee approved the bill, House Bill 1402, sponsored by Rep. Matthew Shepherd, R-El Dorado. The bill would set a 50% exemption rate for capital gains, effective July 1, 2016.

Now, the rate is set at 40%. The rate was set as part of an overall tax cut bill earlier in the session. The 40% rate would be moved to 45%, effective Feb. 1, 2015 and from 45 to 50% by July 1, 2016.

The bill now heads to the Senate floor.

FLOOR ACTION
A bill to create a pilot program to do suspicion-based drug screening and testing for people receiving help from the Temporary Assistance for Needy Families program received overwhelming support in the House of Representatives.

The House voted 69-14 to approve Senate Bill 600, sponsored by Sen. Blake Johnson, R-Corning. Under the bill, a minimum of 10% of the people in the program including applicants and recipients in each county bordering Arkansas from Mississippi, Missouri, Oklahoma and Tennessee would be part of the program.

Rep. Robin Lundstrum, R-Springdale, said the people who participate in the program must sign off to be part of the program. Also, if a person tests positive, a family would not lose welfare benefits, Lundstrum said, noting the benefits would be given to another family member.

The bill now heads back to the Senate.

A bill to implement regional jails to house inmates in the state was also approved by the House. The House voted 89-2 in favor of Senate Bill 618, sponsored by Sen. David Sanders, R-Little Rock.

The bill would allow the Department of Correction to contract or reach an agreement with a regional punishment facility to hold inmates. Under the bill, a regional jail approach would have to be approved by the governor, Rep. Matthew Shepherd, R-El Dorado, who spoke in favor of the bill, said.

The bill also heads back to the Senate on Tuesday.

LOTTERY BILLS MOVE IN SENATE
The Senate approved a lottery funding bill Monday, while a Senate committee gave support for a bill dealing with how scholarships are funded.

The Senate voted 27-2 to approve Senate Bill 5, sponsored by Sen. Jimmy Hickey Jr., R-Texarkana, content partner KUAR reported Monday.

The bill, which now goes to the desk of Gov. Asa Hutchinson for signature, would lower the funding that incoming freshmen receive from $2,000 to $1,000. Sophomores would see their funding go from $3,000 to $4,000, while funding for juniors and seniors would continue at $4,000 and $5,000, respectively.

The bill, if approved, would take effect during the 2016-17 school year.

The Senate Education Committee also approved a bill that would establish how the amounts for a scholarship tied to the Arkansas Lottery are set.

The bill, House Bill 1779, was sponsored by Rep. Dwight Tosh, R-Jonesboro. Under the bill, students would be given funding on a semester credit-hour basis instead of the current semester-by-semester basis. The bill was approved Thursday in the House by a 77-0 margin.

The bill, which would take effect during the 2016-17 school year, now heads to the Senate floor.

TUESDAY SCHEDULE
The following committee and caucus meetings are scheduled for Tuesday in the Arkansas General Assembly:

House Committees
9:00 a.m. – Agriculture, Forestry & Economic Development, Room 138.
9:30 a.m. – Insurance & Commerce, Room 149.
10:00 a.m. – Education, Room 138.
10:00 a.m. – Judiciary, Room 149.
11:00 a.m. – Public Transportation, Room B, MAC.
11:30 a.m. – Rules, Room B, MAC.
Call of Chair – State Agencies & Governmental Affairs, Room 151.

Senate Committees
9:00 a.m. – Education, Room 207.
10:00 a.m. – Insurance & Commerce, Room 171.
10:00 a.m. – State Agencies & Governmental Affairs, Room OSC.

Caucus Meetings
8:00 a.m. – House Freshmen Caucus, Room 138.
12:00 p.m. – Arkansas Conservative Caucus, Room 272.

The Senate convenes at 1:00 p.m., while the House gavels in at 1:30 p.m. Tuesday.