Arkansas Legislative Council (ALC)
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get started. We got a long agenda, folks. I hear a motion to adopt the minutes from the previous meeting. Got a motion. Need a second? Let's get your seats. Let's get going. Got a second? Got a second. All those in favor say aye. All opposed? ayes have it
we'll move on to the report of the executive submit committee
co-chairman blitzo you you ready to give the report of the executive committee The Executive
Senator Cecile Bledsoe
Unverified
6:27
Subcommittee met on December the 19th to hear a request from the Benton
County Regional Solid Waste Management District for approval of an emergency rule regarding district fees. Following public testimony and questions and debate from subcommittee members, a motion was passed to hold the consideration of the emergency rule for 30 days for placement on the january agenda of the executive subcommittee i move adoption of this report that is a proper motion do i hear a second i
have a second all those in favor of the adoption of the report say
aye all opposed the ayes have it reports adopted representative love
Representative Fredrick J. Love
Unverified
7:14
do you i just had a quick question yes they're not going to be a
revenue report any any yes and I'll
Speaker 19
7:27
have staff explain that representative representative love those revenue reports are available online we can email them to you also if you would like with Richard Wilson's retirement we're in the process of figuring out you're
getting a new economist or uh figuring out how we're going to fill that position in the meantime we are doing the revenue reports um but they're just available online we're not
doing a report here in council okay all right thank you thank you representative sullivan i'm gonna recognize you to
Representative Dan Sullivan
Unverified
8:08
give the uh administrative rules report thank you mr chair the subcommittee met on tuesday december 3rd At that subcommittee meeting, the subcommittee renewed the rules of the Group 1 agency scheduled for consideration pursuant to Act 781 of 2017.
The subcommittee met again on Wednesday, December 18th, and at that meeting, the subcommittee reviewed and filed letters submitted by APHERS and the Bank Department pursuant to Act 893 of 2019. the rules of the arkansas state police were reviewed pursuant to act 820 of 2019 the subcommittee deferred the rule by the office of state procurement to the january meeting all other rules were reviewed and approved mr chairman i move for adoption of the report thank you
representative sullivan um representative ballinger i mean senator ballinger i'm
sorry i guess i'm used to serving with you in the house will you give us your
Senator Bob Ballinger
Unverified
9:05
substitute motion please sir yeah And basically all I need is to to have the bail bonds licensing rules pulled out I need to have a chance to meet with him talk with him about some of them. So my substitute motion would be to Adopt the report with
Speaker 30
9:20
the bail bonds licensing rules pulled out Thanks, Senator. They're here second
You got a second all those in favor of substitute motion to pull the Bales bondsman out and approve the rest of the report say
aye aye all opposed eyes have it thank you guys we'll move on to claims review
Senator Bart Hester
Unverified
9:48
Senator Bart Hester the claims review subcommittee met on Thursday December 19th the subcommittee affirmed the rulings of the claims commission as to two awarded claims and 21 denied and dismissed claims appealed by the
claimants I move the adoption of
Representative Jim Wooten
Unverified
10:14
the report I got a motion in a second all those in favor say aye
all opposed eyes have it we'll go on to performance Route review, which is Senator Malik.
Speaker 44
10:33
Thank you, Mr. Chairman. I'm getting there. I'm looking for my actual report. Senator Malagy, you're recognized. Okay, before I make a motion on the report, because of some discussions, and we'll come back with a motion to approve, but for my initial report, I'm going to pull out item B2A,
and that is the rainy day release to the Department of Education Division of Career and Technical Education for the $2.5 million for Camp Couchdale. I'm going to pull that out of the report at this time, but otherwise, so my initial motion will not include that. The peer committee met on Tuesday, December 17th. The subcommittee approved six items. There were three requests to transfer funds from the Rainy Day Division of Career and Technical Education, which I am pulling out of this report at this time. Also, the Division of Community Correction and the Division of Medical Services.
A request to transfer funds from the Arkansas Highway Transfer Fund to the Department of Transportation. and there were two appropriation transfer requests for the division of community corrections and also the division of workforce services the detail is in the report that's in your packet i'd move adoption of the report with the exception of item b2a and then i'll come back with another motion after we deal with this that's
a proper motion in a second all
those in favor say aye all opposed ayes have it representative bragg do you
have a question are you in the queue for next all right
Speaker 44
12:17
Senator Malik I'm coming back yes thank you Mr. Chair and let me make just a couple of comments we we had discussion and work with members just to make certain on the rainy day release that we had competitive bidding and and reporting and oversight and that's certainly been agreed to by all the parties I'm going to make a motion but let me state before I do that I have visited with Jake Bleed and Greg Rogers with Jake with DF&A and Greg Rogers with ADE to state that if we put requirements for bidding and
reporting, is there an assurance that the funds are not released actually to Camp Couchdale until those requirements are satisfied? And Jake, if you and Greg could both give us a nod of the head that you understand that and agree to that. And I think I see an affirmative from both of them. So here is my motion with respect to the rainy day release to Camp Couchdale. I move to approve the rainy day release of $2.5 million to the Division of Career and Technical Education to provide funding for FFA Camp Couchdale, subject to the Division of Career and Technical Education
developing a grant application process that will include the requirement of at least three competitive bids on the project and quarterly reporting of performance information, including expense and progress reports. it's the intention it's the intent of this motion that transactions are transparent and readily identifiable to the public as it relates to this 2.5 million dollar disbursement that's my motion that's a proper motion and i have
a second all those in favor say aye aye all opposed motion carries thank you
senator mallet representative bragg you're recognized to give the policy review policy making report.
Representative Ken Bragg
Unverified
14:07
Thank you, Mr. Chair. Policy making subcommittee met on Wednesday, December 18th and heard from Representative Cozart and Senator English concerning a consultant services contract with APA consulting for use by the House and Senate education committees to provide education adequacy consulting services. Representative John Eubanks made a motion to approve the revised contract between BLR and APA consulting as recommended by the education committee on
december 16th 2019 following a roll call by division the motion failed i move adoption of the report that is a proper motion
i do have representative kozark in the queue so let's see what he has do you have a motion or a statement uh represent mr chair
Representative Bruce Cozart
Unverified
14:51
i have a substitute motion okay before i take your
motion uh senator ballinger do you have a motion or statement i have a question but i'm
Speaker 30
15:04
in at this point i don't know what the substitute motion is but
i would have a question regarding the
substitute motion representative cozart we'll hear your motion seeing no one else in the queue and then
Representative Bruce Cozart
Unverified
15:18
we'll go back to senator ballinger for a question thank you mr chair i make a motion to authorize bureau of legislative research to enter negotiations with shules and associates for a contracting service agreement incorporating the terms and conditions of RFP number BLR 19003 and Shul's proposal in response to the RFP with AL subcommittee having final improvement of the contract I move for
the consultant service consultant service agreement with APA consultant contingent upon the approval of the House of Senate education for the use of both Shul's and Associates and APA consulting to provide education adequacy consulting service to the committees under the RFP the Bureau of legislative research shall not authorize to enter into either of these consultant service contracts unless the approval of both contracts is agreed upon by the House Senate and the House and Senate Education Committee sorry that's a long motion that's proper motion do I hear second I have a second
and I have a few questions senator Ballinger you recognize first for a question.
Senator Bob Ballinger
Unverified
16:24
That basically changed my question, but I want clarification that his motion essentially is to go ahead. Basically, the previous report that came out of the policymaking subcommittee is what was just adopted there. I
Speaker 61
16:35
know it's a lot of words, but is that basically right? That's basically the same thing
we had last month. Okay, thank you. So, Senator Ballinger, staff corrected Representative Cozart's statement to say
that the contract is different now or revised because the dates have changed because of the timing of the last 30 days. So other than that, it's the
same. Senator Teague, you recognize for a question? Mr. Chairman, I'm just a poor
Senator Larry Teague
Unverified
17:06
old country insurance agent, but I came up here to vote no against one of those, and now are they back together again? That's what it sounds like, senator well that's how much additional money do we spend by putting them
together representative Cozart do you want to answer that question his question was how
Representative Bruce Cozart
Unverified
17:36
much additional money one contract was about six hundred and ninety thousand the other contract was four hundred and I'm sorry six hundred and yes six hundred ninety thousand it was four hundred ninety nine
Senator Linda Chesterfield
Unverified
17:47
thousand So we're spending $500,000 more by
Representative Bruce Cozart
Unverified
17:49
doing it this way? Yeah. You could spend $500,000 or you could spend almost $700,000, short of
which way you want to go, or put both of them together. And spend $1.2?
Yes, sir. Thank you, Mr. Chairman. Yes, sir. Senator Elliott, you're recognized
Senator Joyce Elliott
Unverified
18:09
for a question or statement. Mr. Chair, I move to substitute the substitute motion, since we can have two substitutions. Senator,
let me come back to you once I have all the questions answered on this one. I'll come right back to you on that
Senator Joyce Elliott
Unverified
18:22
motion. Well, I know, is that proper procedure, or you just want to go to the other questions, because... Go ahead. I'll take your motion.
Okay. All right. I just want to make sure we're doing in the right order, Mr. Chair. I'm not trying to be defiant against what you want
Representative Jim Wooten
Unverified
18:40
to do as the chair. Is that
Senator Joyce Elliott
Unverified
18:43
clear? Any way you want to do it, so follow me. It's the same language as what was used with Representative Cozart, except that my motion is to accept the APA contract, substitute APA in the place of both contracts. Second. That's a proper motion and seconded.
May I speak to the motion, Mr. Chair? Please hold on one second. I have staff. Okay. Okay, Senator, that's
Senator Joyce Elliott
Unverified
19:22
a proper motion, and I have it seconded. You're welcome to
have your statement. Okay, thank you. Members, I'm making this motion to accept the APA contract because it is what was recommended by the Education Committee
that did hours and hours and hours of study. And it's not to suggest that other people in this committee don't have good judgment. Everybody absolutely does. But I am in no position if somebody has done all of the work, for example, on studying what we should do for highways and say in that task force, for example. If I haven't been there, if I haven't been paying close attention, I am going to give deference to the folks who have done the work.
And that's not to say, as suggested by one of our members, that this is a rubber stamp committee. That is not what it means. But we started this out originally trying to get to a consultant that could help us do a study that we haven't done in 16 years. And we can do the study after even getting more recommendations as a result of one member
asking for those recommendations about APA. I don't know if the committee members read it, but we got two, at least two, maybe three more recommendations that are glowing recommendations for APA, absolutely glowing recommendations for APA. and I don't know if they went to everybody else on this committee on the uh on council but it was absolutely an endorsement of the work that the education committee did so that's why I'm asking you to support this motion as opposed to spending 500,000 more dollars
to support both motions that's probably just going to create chaos for us so I respectfully ask for your yes vote so that we can get on with our work. Thank you very much, Mr. Chair. Senator
Chesterfield, do you have a statement or a question on that motion? Ma'am?
Senator Linda Chesterfield
Unverified
21:40
I move the previous question. Okay. I move immediate consideration, let me say that.
That's a proper motion. It takes two-thirds. All right. All those in
Representative Jim Wooten
Unverified
21:55
favor, say aye. Aye. All opposed? No. Ayes have it. We'll take a... I have a motion. Farroka, do I see
Speaker 90
22:09
the hands? I need five hands. I have a roll call. So you're on
a roll call on the immediate
Senator Linda Chesterfield
Unverified
22:21
consideration. That's what I thought. So you're asking for a roll call
by division on Senator Joyce Elliott's substitute motion. Yes. All right. I
see the hands. We'll take roll call starting
Speaker 94
22:42
in the Senate. Senator Ballinger. Senator Byne. Senator Caldwell. Senator Caldwell. Senator
Speaker 99
22:56
Cheatham. First alternate, Senator Caldwell. Senator Cooper.
Speaker 94
23:03
Senator Cooper. Senator Chesterfield. Senator Clark, Senator Davis, Senator Dismayne, Senator Eads,
Speaker 94
23:35
Senator Flippo, Senator Flowers, Senator Garner, Senator Hammer, Senator Hammer, Senator Senator
Speaker 100
23:51
Hamer? Senator Hendren? Senator Hester? Senator Hickey? Senator Ingram? Senator Irvin? Senator Johnson?
Speaker 94
24:34
Senator Johnson, first alternate, Senator Hill, Senator
Speaker 111
25:02
Malik, Senator Raypert, Senator Senator
Senator Stubblefield? Yes. Okay. Committee members, let's keep it in order and
Speaker 94
25:50
answer your votes. Senator Wallace? Yes. Senator Rice? I can't.
Senator Rice,
Speaker 99
27:19
you.
Senate vote passed, so we're going
to move on to the House roll call. If you would, call rolling in the House.
Speaker 147
28:11
Birch. Representative Cozart
Representative Davis Representative Deffenbaugh Representative Douglas Representative Eubanks Representative Ferguson
Speaker 118
28:48
Deborah Ferguson Representative Deborah Ferguson
Speaker 147
28:53
First alternate, Representative Hodges Second alternate, Representative Speaks Representative Kenneth Ferguson Representative Fielding First alternate, Representative Watson. Yes.
Representative Charlene Fite. Yes. Representative Lenny Fite. No. Representative Godfrey. Yes. Representative Jean. Yes. Representative Love. Yes. Representative Lowry. No. Representative McNair. Rep. Miller, Rep. Murdoch, Rep. Steve Hollowell, Rep. Gray, Rep. Payton, Rep. Richie, Rep.
Representative Richmond, Representative Rushing, first alternate, Representative Warren, second alternate, Representative Kapp, Representative Shepard, Representative Smith, Representative Smith, Representative Sullivan, Representative Vaughn, Representative Whitaker?
Aye. Representative Womack? Representative Womack? Representative Wooten? Yes. Representative Dodson? No. Representative Warlaw? Yes. 1,
2, 3, 4, 5, 6, 7, 7. Motion carries. Council has initiated
a contract with APA. So we'll move on to the review subcommittee, and Senator Blitzo will be the chair for that committee.
Senator Cecile Bledsoe
Unverified
31:30
All right, review. Senator Scott Flippo asks for your report. thank you madam chair
Speaker 165
31:40
the review subcommittee met on tuesday and
Senator Scott Flippo
Unverified
31:42
reviewed mofs grants and service contracts there were two contracts for community correction recommended for ratification the subcommittee approved a land purchase agreement disclosure for dhs the subcommittee held all eight total of the dhs non-emergency transportation contracts after an opportunity
for an explanation of the net contracts i will move adoption of the report including those items So, Madam Chair, I would request that we get Mark White with DHS
Speaker 169
32:18
to come up and speak on these net-like contracts. I believe
Senator Cecile Bledsoe
Unverified
32:24
Senator Rice is going to ask some questions for them. All right. Before someone comes to the table, we have several that are going to recuse.
Okay. And I'm going to go down the list. Senator Malik? Senator Malik? Thank you, Madam Chair. Members, I have
Speaker 44
32:45
filed a letter of recusal with respect to item A-1, and that's a purchase of some property by DHS, Division of Youth Services, from Farmers Bank, which is my employer. And so I will be recusing with respect to any discussion and voting on that item but would be available to vote on the other items in the packet.
Senator Cecile Bledsoe
Unverified
33:07
All right. Thank you. We'll note that. Representative Wardlaw. Thank you, Madam
Chair. I'll be recusing on the net transportation contracts because I sit on the board of Southeast Area Agency for the same reasons, and I've submitted
Senator Cecile Bledsoe
Unverified
33:23
a letter also. All right. We've noted that. Representative Gene. Thank you,
Representative Lane Jean
Unverified
33:31
Madam Chairman. I'll also be recusing on item A, the Farmer's Bank. I'm a stockholder and have a financial interest in it.
Senator Cecile Bledsoe
Unverified
33:39
All right. We've noted that. Representative
Representative Fredrick J. Love
Unverified
33:43
Love. I don't have a recusal because I'm not a big shot. Okay. Well, if you. But I do have a question on the corrections department, number one. So I'll get back in
Speaker 184
34:03
the queue. Thank you. All right. Thank you. All right, and I believe... Hold on just a minute.
Senator Cecile Bledsoe
Unverified
34:12
All right, someone from DHS for the net contracts,
Speaker 186
34:16
would you come to the table, please? Would
Senator Cecile Bledsoe
Unverified
34:26
you state your name and where you're from, please? Thank you,
Speaker 189
34:38
Madam Chair. Mark White, Chief of Legislative and Integral Affairs for the Department of Human
Speaker 191
34:44
Services. Good morning. Janet Mann, Director of DMS at DHS.
Speaker 192
34:48
Okay. Good morning. Melissa Stone, Director for Developmental Disabilities at DHS. All right.
Senator Cecile Bledsoe
Unverified
34:55
Thank you. All right. Senator Flippo, you are recognized for a question. Madam Chair,
Senator Scott Flippo
Unverified
35:01
I'm going to yield my time to Senator Rice. I believe he
has some questions. Okay. Senator Rice. Thank you. And for those of council that were not in subcommittee,
Senator Terry Rice
Unverified
35:20
we had some discussion the other day, and I asked these to be held. We did have a meeting. that. I appreciate Director Gillespie and each one at the table meeting with us. We had some good discussion. I
have asked that some of the report be given for the council body to hear. I asked Director Geraghty if Kathy or somebody could give
the part of the report that was the additional emergency spending. Was that going to be possible? Yes. Kathy Smith. If she could,
give that report and then we'll have some questions. Thank you. Ladies and gentlemen of the committee, let's really
Senator Cecile Bledsoe
Unverified
36:14
keep you keep your voices down. It's hard to hear up here and I think some of the people didn't hear
Senator Rice either. But we have some specific questions that
Speaker 199
36:28
he would like to ask. Thank you, Madam Chairman. And Senator Rice
Speaker 200
36:34
had asked me to provide just a brief overview of what we're talking about. There were eight contracts that were held for DHS that are net-related contracts. DHS has two types of net contracts. They have the net contracts for rides for doctor's appointments and other covered medical services.
and they have what they call a net-like. These are transportation services for children and adults meeting the need for day treatment programs, and they refer to them as net-like or net day treatment contracts. On your report, the traditional net contracts, there were three of those, and there were amendments to those existing contracts. It was in item D3, contract number 11 with Southeastern's, and D4, contract number 16 with Area Agency on Aging, and D4, number 18, Central Arkansas Development.
Again, those were amendments to existing contracts to add funds for the net contracts for providing transportation for medical services. They also had three new contracts for net day treatment services that were done as a special procurement. And those contracts are in D3, number 8, for Southeasterns, in D4, number 14, for Area Agency on Aging Southeast Arkansas, and D4, number 15, Central Arkansas Development.
The net-day treatment contracts were originally procured in late December after determining the service providers would be unable to provide those transportation services. and so those contracts were deemed critical emergencies by the Office of State Procurement. They were executed and reported to ALC by OSP. These three contracts were for one year only and will expire in the end of December, so OSP has approved those three new contracts as special procurements.
Then under item E1 of the report, OSP is reporting that two of the original net day treatment contracts, which were done as emergency procurements, are being amended to add funding. These two amendments are being reported on pages 21 and 22 of the review report. Central Arkansas Development Contract is reporting that an additional $3.75 million is being added to that contract, which will end December 31st for the services they provided this year.
And Southeastern's contract is reporting that an additional $7.4 million is being added to that contract, which will also end December 31st of this year. In addition, a request was made for expenses paid by DHS for the contract with Central Arkansas Development Council. On Friday, December 13th, DHS notified OSP and the review subcommittee that they had paid over $3 million on that contract and had only previously reported a little over $547,000 to ALC, and they were seeking ratification of that excess payment.
So in summary, there were eight total contracts, three amendments to existing regular net contracts, three special procurements that will begin January 1 for day treatment services, and then the two contracts that are being reported ending the end of this month that have additional funds being added and the one contract
Senator Cecile Bledsoe
Unverified
40:14
needing ratification. Thank you. Senator Rice.
Senator Terry Rice
Unverified
40:16
Okay, and Kathy, when you said the other had not been reported, what
was the lag time on that additional spending that hadn't been reported?
Speaker 200
40:27
Do you have that? Senator Rice, I think what you're asking me is that contract began January 1, 2019, and they have provided rides all year based on that. And they have paid out a little over $2.5 million, I believe, more than what they had reported to this committee. So they're asking for $3.75 to cover the rides that have been provided throughout the year for those day treatment programs.
And then the other contract is asking for $7.4. And both of those contracts were done as critical emergencies. so they are being reported to this committee, and that was all that was done originally was they were done as an emergency procurement, critical emergency, and reported to the committee. Thank
Senator Terry Rice
Unverified
41:18
you. I just wanted membership to have that. Let me run through. I'll be as brief as I can on this, but I did want public statements. Going back just a little over a year ago, we had a lot of discussion on this.
I said and mothers knew that we were chasing a timeline because of protest
and action that legally had to be done that it was going to be hard for anybody to make January 1st contract. That didn't happen. They had problems. They had elected officials shuttling patients in quite a turmoil. They ended up a broker was removed. other ones came in there's many things it's taken almost a year to get up to speed
that that's troubling it may not may not could help it but it's just it's very troubling and and what I was trying to get to in subcommittee when I asked has the original bid contract had any further spending on them because we had far-profit brokers that didn't didn't have physical assets in my area came in and we threw out a non-profit that had done a good job for over 20 years
and when you look back and you see how much trouble it's been and we've spent more money even though you tell me and I understand you're saying there's not been any more money paid on these bid contracts When I used the word the other day of a subsidy, I probably would be more clear it was supplemented not by your choice,
but court said you've got to do these net-like, and I've learned that over the past week. so there has been additional revenues come in to that and i'm but but one thing i wanted you to clarify today uh i believe ms stone's the one that did that and you you're welcome to do it but uh with you're asking for a year of extension on this emergency but you're saying it's only going to take hopefully a few months to to bid this to get formal contracts for the net like
Speaker 192
43:52
Is that correct? I'll let us know to respond to that. Thank you. So, yes, in accordance with the agreement that we made with the opposing party, we entered into a comprehensive rate study for transportation for these particular clients that go to and from these developmental clinics every day. um we will be bringing the providers in um january to go over a proposed rate and we will
start the process of formalizing this um through a um through a formal procurement and we do expect
Speaker 189
44:31
that to occur within this year within the coming year okay
Senator Terry Rice
Unverified
44:35
uh and i had hoped by the end of the year i could say we don't
need any more monthly reports and all they they've been helpful i think oversight is good i think some things would not have happened maybe had we not had oversight and that that goes to brokers and dhs we have a substantial fine on a broker and
all of these that were held i just held all of them it wasn't anything accusations you get or any violations against all of them but we just held all of them at once uh and madam chair that you're in the chair now uh i will move that all of these net contracts be approved uh and i also request that we have at least six more months of monthly reports uh on the net contract so we can follow along with that all right
Senator Cecile Bledsoe
Unverified
45:33
committee you have heard the motion it's a proper motion all
those in favor say aye oh is there I'm sorry discussion that there's a long list of people I'm gonna go down the list and you tell me whether you have a question about this particular issue representative Godfrey are you asking a question about this particular issue no
Representative Megan Godfrey
Unverified
45:58
madam chair at the proper time I'd like to make a motion to pull intergovernmental contract one out of the report for
Senator Cecile Bledsoe
Unverified
46:07
individual consideration all right represent a senator bond are you
asking the question I'm sorry all
Speaker 204
46:15
right thank you senator urban are you asking a
Senator Cecile Bledsoe
Unverified
46:19
question this particular issue I was gonna ask a question of DHS
Senator Missy Irvin
Unverified
46:24
all right representative love is
Senator Cecile Bledsoe
Unverified
46:27
your question about this particular motion it is all right you're recognized thank you madam chair I just wanted
Representative Fredrick J. Love
Unverified
46:35
to get some clarification in regards to the money being put in now did you all track
these expenditures along the way because I noticed that you said that you didn't report them to this committee until now so I'm just trying to figure that
Speaker 219
46:55
one out yes sir that's one one place where we did not have proper internal controls in place. Because these are Medicaid claims, they're paid through the Medicaid claim system rather than ACES. And so the normal internal controls that ordinarily would have caught exceeding that contract amount, those weren't in place. And so we've moved to institute new
internal controls to make sure that we don't exceed a contract value going forward, even if it's on the Medicaid claim side. Okay. All right. Thank
Senator Cecile Bledsoe
Unverified
47:24
you. All right. Any other questions on this particular
Senator Missy Irvin
Unverified
47:28
issue madam chair I have just have a question of DHS about transportation contracts it's not necessarily on these contracts or this motion but if you'll come back to me while they're still at the table all right I
Senator Cecile Bledsoe
Unverified
47:40
will are any other questions all right seeing none you've heard the
motion all those in favor say aye all those opposed motion passes thank you All right, thank you.
It's along these lines of
Senator Missy Irvin
Unverified
48:39
the reports, and I support the motion that Senator Rice made, and
the information that you have been giving to us on transportation is very important, and we appreciate the progress that has been made on this issue. can you also inform us because we've been in a settlement issue with the previous organization
because of what has happened at the beginning of this year in January that kind of moved us in this direction which was the impetus for all of the reports and everything else. So I think in order to have all the information out there can you give us an update on that situation? Yes,
Speaker 219
49:23
ma'am. We did have a vendor that was removed at the beginning of the year. We've been in negotiations with that vendor, and as of yesterday we reached an agreement,
and that vendor will be repaying the state. Between claims that they are waiving and dollars they are paying back to us, it's a total of $1.95 million. So
Senator Missy Irvin
Unverified
49:46
$1.95 million that they are paying back to the state of Arkansas because of? Yes, ma'am. the mess that occurred yes that's great news and i think that um thank you for those efforts i know it's been a year-long process and a year-long effort but i think it's so important for us to
hold folks accountable if you do not meet them terms of the contracts and that's why we have procurement laws and that's why we have the ability to negotiate which is what the review subcommittee spent so much time doing and putting in place and passing those laws and I think it's important that you know this legislative body sees the follow-up on that it that effort by both the legislative branch and the executive branch which results in a 1.95 million dollar payment back to the
state of Arkansas for really failures that really harmed the patients and the people of our state and so I think it's really important to note that and let this legislature know if
that effort so well done. Thank you. Thank You Senator. You guys are excused.
I have no further questions for DHS. Thank you Mr. Chairman. Representative
Goffey will recognize you for your substitute motion to Senator
Representative Megan Godfrey
Unverified
51:08
Flippo's motion to adopt the report. Thank You Mr. Chair. I'd like to move for a substitute motion that we adopt
Speaker 234
51:17
the report without intergovernmental contract one there's a proper motion here second
Speaker 236
51:22
I have second all those in favor of the motion say aye all opposed I just have it
Representative Jon S. Eubanks
Unverified
52:41
Representative Eubanks, you're recognized. Thank you, Mr. Chairman. I have a motion to adopt intergovernmental contract number one. That's
a proper motion. Do I hear a second? Second. I have a second. I have some discussion on that motion. Senator Bond, you're
Senator Will Bond
Unverified
53:00
recognized for discussion. Well, and what I was going to ask, if somebody could answer a few questions, obviously not on review, But if you look at the item that's in our packet, it has a total projected of $163 million, total after a review of $8 million.
I just wanted to discuss how ongoing this is and
what the state's obligation is. It's my understanding this is the private prison agreement. Is there somebody who can
answer those questions? We can get someone from the Department of Corrections. Solomon. Senator Bond, you're recognized to ask any questions
You want to do Department of Corrections. If you guys would, Solomon, introduce yourself for the record, and
Speaker 255
54:12
Senator, you're recognized. Thank you. I'm Father Graves, Chief of
Speaker 256
54:18
Staff and Legislative Liaison, Department of Corrections. I'm
Senator Will Bond
Unverified
54:22
required to legal counsel for the Department of Corrections. And so you can see on the report that we received, the total projected is $163 million, total
after review $8 million. Is the
Speaker 258
54:34
contract ongoing? How long are we obligated to pay the
Speaker 259
54:37
private prison? The contract has a 20-year term subject to the
Speaker 260
54:42
facility continuing to meet the requirements of the contract,
but we would be able to house up to 500 inmates in the regional jail operated by
Speaker 255
54:51
Bradley and Drew County for up to 20 years. So it's
Senator Will Bond
Unverified
54:55
a 20-year contract unless there's a breach by the whatever. What group is it that we're contracting with? we are contracting
Senator Will Bond
Unverified
55:05
guaranteeing them certain payments or a certain number of prisoners
Speaker 260
55:09
we are guaranteeing in the contract that the state will house up to 500 inmates at a rate of 40 a day for 20 years
Senator Will Bond
Unverified
55:17
or is there there's got to be an elevator in there
Speaker 258
55:20
right there is there is an escalator in
Senator Will Bond
Unverified
55:24
the contract yeah escalator i said elevator i appreciate the
correction. You're right, I'm wrong. So was the project bid for the private prison system? How do we get this company to do it? I mean, as you may know, I'm kind of personally opposed to private prisons, but how do we get this
Speaker 260
55:48
company? The department, and I want to be clear on
this point, the Department of Correction, the state of Arkansas, is not contracting with a private management company. The state of Arkansas is contracting with Bradley and Drew counties who on their own have decided to sub out the management of the facility to a private management company. But our contract is with the counties and state law provides that
Speaker 258
56:14
intergovernmental agreements which this is are not subject to the bid requirements under procurement law. I did
Senator Will Bond
Unverified
56:20
review the state law. It's a creative way. I get that. But the state's paying the money. So I understand what you're saying. But was the project bid by the counties? Do you know?
Speaker 259
56:34
The counties waived their requirement to bid with the provider and accepted an agreement with the private management company. And why was that? That would be
Senator Will Bond
Unverified
56:54
a question for the counties. well and i don't know if the counties are here so the the total projected just to put it to loop this in the total projected 163 million 240 000 is the 20-year term of the contract yes sir
and that includes the escalation provisions for the state that would be an approximate estimate and the department of corrections is in favor of this 20-year term contract guaranteeing 500 prisoners as
Speaker 258
57:24
as we have continuously stated throughout this process we are in favor of bringing the 336
Speaker 260
57:29
inmates we we have in the state of texas back to arkansas this provides us the best opportunity to do that we're also in favor of additional capacity for our system which which
while growth has slowed, growth is still an ongoing part of our daily considerations. Thank you, Mr. Chairman,
and thanks for your patience. Thank you,
Representative Fredrick J. Love
Unverified
58:01
Senator. Representative Love, do you have a question? Of course. So we're going to pay $40. We're going to guarantee $40 per prisoner. Is that what you're saying? That's the testimony, correct? That would
Speaker 268
58:12
be the contract rate with Bradley and Drew counties, yes, sir.
Representative Fredrick J. Love
Unverified
58:16
Okay, so in their counties. What is our current guaranteed rate for counties to hold state prisoners? The current rate for offenders being
Speaker 268
58:27
held on the backup list is $30 a day. Okay, and so we're going
Representative Fredrick J. Love
Unverified
58:34
to guarantee $40 for these counties. Is there any particular reason why we're guaranteeing $40 for these counties and
Speaker 268
58:45
two separate issues specific to the issue of the backup rate.
And if I'm misspeaking, I know Secretary Walder is behind me and will probably throw something. But the administration and DFA have had conversations leading up to the section about whether there is a need to increase the reimbursement rate and what that increase should look like. Those conversations are ongoing. Specific to why there is a $40 rate with this particular contract, if you look at the contract, we are requiring certain programmatic offerings for the inmates that are being housed there.
We also have some specific requirements regarding fiscal plant issues to ensure that national standards, the same standards that our Division of Correction facilities meet are being met by this regional jail and there was also a need to increase the daily rate to account for the minimum wage
Representative Fredrick J. Love
Unverified
59:47
increase that the people approved during the last election. Are you saying currently that you are not the standards
that you are holding the private to, you're not holding the counties to? and they're i mean because we're both talking we're talking about housing prisoners period
Speaker 267
1:00:06
so there are every every county jail
in the state sir yes sir if you would speak directly into the microphone we're having trouble hearing
Speaker 268
1:00:14
you every county jail in the state meets minimum standards set by the office of the criminal detention facility review bradley and drew county this regional jail will meet those same minimum standards that your jail meets and that the jail
and every county represented by every member in this room meets. We asked for additional standards on top of those to ensure that the same standards that are being met within the Division of Correction, which are in many ways more stringent than minimum jail standards, are being met by the regional jail in Bradley and Drew County. Is there
Representative Fredrick J. Love
Unverified
1:00:53
any particular reason why you asked for additional standards?
because because we're talking about housing inmates period it doesn't matter if it's in a county jail or in this new regional jail are there any reasons why you ask for these additional
Speaker 268
1:01:12
standards the department um both of our divisions the division of correction and the division of community correction have been proud for some time to be fully accredited by the american Correctional Association. Those minimum standards address issues regarding programming, regarding
safety and security, regarding fiscal plan. It was our position that if these inmates are going to be housed in the state of Arkansas, regardless of where they're housed in the state of Arkansas, they should meet, they should be residing in a facility that has the ability to meet those same standards. That is why we put those requirements in the contract. Okay, thank you. Representative Bart, you recognize for
a question? Thank you, Mr. Chair.
Speaker 276
1:02:07
To be clear, LaSalle, this Louisiana-based company, has been the company that's been considered for the entire time that this contract was being prepared by the Department of Corrections. has the department of corrections satisfied itself through research and any other means possible that this company meets the business practices and is such that we
Speaker 277
1:02:33
want to enter into a 20-year contract with it
Speaker 278
1:02:38
the department of the board the administration is satisfied with
Speaker 277
1:02:43
this agreement yes ma'am satisfied with this agreement which is an agreement with the counties are satisfied with doing business with
Speaker 268
1:02:54
this company the agreement with the counties which sets out minimum standards that the counties if they chose to operate the facility would meet the same standards of the contract if they were to contract with LaSalle or another private provider they would have to meet the same standards of the contract.
Speaker 276
1:03:14
Spoken like an attorney. While I married
Speaker 259
1:03:17
one, and I am very happy with that, I am
Speaker 276
1:03:21
not one. Which means I'm going to go back and ask you to answer the question. Are you satisfied with doing business with this
out-of-state company? Yes, ma'am. All right. Thank you. I'm
Representative Dan Sullivan
Unverified
1:03:39
Michael. Representative Sullivan, you're recognized for a question. Thank you, Mr. Chair, right here.
So if I heard you correctly, the county has the authority to waive the bid process
and obligate the taxpayers to a $1 to a $10 increase for 500 inmates for 20 years. The
Speaker 286
1:03:58
counties have the ability to, by a two-thirds vote, waive the bid requirements for this form of contracting. So I
Speaker 278
1:04:07
was correct. Yes, sir. Okay. Do you have
Speaker 287
1:04:13
the math on, so if we saved $5 and the bid went down to $35,
dollars so that would be five dollars times 20 years times 500 times that's
Representative Dan Sullivan
Unverified
1:04:26
quite a bit of money that a county can choose to obligate the rest of the taxpayers in the state and just waive that
Speaker 286
1:04:40
and they they had that authority the and you guys approved that No,
Speaker 268
1:04:46
sir. The rate itself is set in a contract with the Department of Corrections and an entity of the state of Arkansas and Bradley and Drew County's. Bradley and Drew County's contract that they waive the bid requirements for did not set rates.
What that contract did is allow the counties to say, okay, we have this contract with the state. Now we're going to sub out operation of this facility to a private provider. So you guys then, you set the rates? Yes, sir. The rates themselves were set by, were recommended by the department, approved by our board, now here before the committee today. And so you're okay with them
Speaker 289
1:05:27
not bidding it and obligating the taxpayer for whatever amount of money for 20 years times 500?
Speaker 268
1:05:36
With the way the contract is structured now, we are comfortable with what we're getting back for the money that
Speaker 286
1:05:45
we would be paying to the counties. Okay, just one last short question. So do we have plans to
Speaker 268
1:05:51
raise the rate statewide? Again, there are conversations ongoing between the governor's office and DFA regarding a potential increase in the
Speaker 291
1:05:58
county jail. I understand that, but that's different than anticipating you're having a conversation. So is the conversation trending towards we're going to raise the rate statewide?
Speaker 285
1:06:09
And I can ask that afterwards. I don't need
Speaker 268
1:06:13
anybody more to come to the table. That would be a question for DFA. I'm aware that those conversations are
Chair
Unverified
1:06:22
ongoing. All right. Thank you, Mr. Chair. Senator Hickey, you're recognized for a question. Thank you, Mr. Chair.
Senator Jimmy Hickey, Jr
Unverified
1:06:27
Mr. Solomon, I'm here. Yes, sir. Just a couple of questions. On your $40 agreement, or your initial $40 agreement, is it all-inclusive, medical, and
Speaker 259
1:06:35
everything? No, sir. The same agreement, this would mirror the same structure we have currently
Speaker 260
1:06:42
with Bowie County where we pay a per-inmate per-day rate to the county, and then we would have to enter into a separate agreement regarding medical currently for the inmates we're housing in texas we're paying three dollars per day per inmate it is our intention and has been our initial conversation with our medical provider that once this facility is open that we would ask for that same three dollar rate okay
Speaker 295
1:07:06
so are we still going to be providing the medical
Senator Jimmy Hickey, Jr
Unverified
1:07:11
Is that the way it's going to work?
Speaker 259
1:07:14
The request would be for the counties, the facility itself, to provide on-site, and the state would
Speaker 260
1:07:20
pay $3 a day, which would cover prescriptions and off-site medical. Okay. Let me ask you this. In regards to the escalator
Senator Jimmy Hickey, Jr
Unverified
1:07:29
or elevator, whatever we want to call it, I think we all know what we're talking about, Could you explain that a little bit more? Is the $40 that they're going to be doing, is that going to be guaranteed for a certain time?
Speaker 260
1:07:46
And then how does this escalator work? The escalator is based off of a fixed percentage, and I'll defer to Ms. Cryer to go through the contractual language, but it is a fixed percentage of the regional consumer price index. okay and if we
Senator Jimmy Hickey, Jr
Unverified
1:08:06
recalculated that today my next question will be this
if we recalculated that today would it be forty dollars or would it automatically go up and how often are we going
to recalculate that and my apologies i know i could have got the contract but with all these on here it's tough to tough
Speaker 258
1:08:31
to do it without asking these questions and if the chair would give me last latitude to read from the contract direct
Speaker 295
1:08:40
I think this might answer your question thank you sir is that okay mr. chair if he reads that
Speaker 255
1:08:46
yes and this is found on page 8 of the contract under section 15 cost
and reimbursement for and I'm starting about halfway down that paragraph for example assume ADC starts paying $44 per MA per month in October 2020 a year later there is the 1% southern CPI increase the rate would increase to 44 29 in year two two-thirds of 1% at the end of year two the CPI goes up another 1%. So the rate goes to $44.58, which is two-thirds of the 1% of the original $44, not two-thirds
of the increased $44.29. At the end of year three, the CPI drops by 2%, but the rate remains $44.58 for year four. At the end of year four, the CPI goes up 3%. The rate would be $44.87 because the increase from the start of the contract is up by three percent total to clarify of one percent year one and year two down two percent year three and then up by three percent in year four okay so it
Senator Jimmy Hickey, Jr
Unverified
1:09:55
will be recalculated yearly yes sir okay and the floor is 40 so we don't have a floor of the 40 no
Speaker 183
1:10:04
matter what yes that would be that would that would be the floor all right thank you sir representative gene you recognize
for a question thank you mr chairman it's all
Representative Lane Jean
Unverified
1:10:17
i'm way over here yes sir uh and i was out on some of this so i apologize what is the county rate that you reimburse state prisoners for just say columbia county your sheriff would be getting 30 a day
currently all right it's 30 uh what is the the share
Representative Lane Jean
Unverified
1:10:40
is it per they're currently receiving 36 36 and this this drew county uh is going
Speaker 268
1:10:48
to be 40 bottom for inmates placed in the regional jail under this contract if hypothetically there is no change to the uh regular reimbursement rate for uh inmates on the state's backup any inmate that is being
housed on the backup would be under that separate rate. The only ones who would receive this $40 rate are those being placed there under the contract. And
Speaker 295
1:11:15
any major medical on any of these will be
Speaker 296
1:11:20
paid by the state of Arkansas. This is not included
Speaker 259
1:11:22
in their contract. The medical major medical. Yeah
Speaker 268
1:11:25
the contract provides on-site. The state would have to pick up off-site and prescriptions. Okay, thank you. Thank you, Representative. Senator Elliott,
Senator Joyce Elliott
Unverified
1:11:35
you're recognized for a question. Thank you, Mr. Chair. So right now, do
we pay the counties, the $3 a day for medical services
Speaker 259
1:11:47
the way as well? Is that the case? No, the current arrangement, if there is, for instance, you
Speaker 260
1:11:53
represent Pulaski County, so if Sheriff Higgins has a chronic medical within his jail he would contact our our classification office and notify them and we would expedite that chronic medical into the state system so the
state would pick up the only thing that the counties regularly pay would be routine on-site medical things that can be handled within the infirmary
Senator Joyce Elliott
Unverified
1:12:18
so but we would have a different setup for this for LaSalle they would you would go just
Speaker 259
1:12:27
go ahead and explain it to me that'll save time. The same answer I gave Representative Jean if there is a
Speaker 260
1:12:34
inmate that is being housed in this regional jail by the Bradley or Drew County on the state's
regular backup list and hypothetically there is no adjustment to that backup reimbursement rate that
Speaker 312
1:12:50
the county would be reimbursed the $30 rate for that inmate.
Senator Joyce Elliott
Unverified
1:12:56
No, no, I'm talking about medical. Are we still
Speaker 260
1:13:03
that $30 reimbursement rate. The $30 reimbursement rate is by statute intended to cover feeding,
prorated cost of medical, transportation, staffing. I understand what you're saying. For those that are housed under this contract, they would receive the $40, which is an approximate, and I feel like I should be clear about that. I think the specific dollar right in the contract is $44. They would receive that approximate $40 a day, and the state would have a separate contract with our medical provider, which, if we follow the Bowie County model, would be about $3 a day, which would cover prescriptions and off-site medical.
Senator Joyce Elliott
Unverified
1:13:42
Oh, so for the, is this still going to be located in Drew County or Bradley County? Where
Speaker 260
1:13:49
is it located? The last word I got was that the counties were still debating on the final site location, but it would be in
Senator Joyce Elliott
Unverified
1:13:58
either Bradley or Drew County. So they voted on something. They're not sure even where they're going to place it. That's just rhetorical. Never mind. um how many how many prison how many um folks how many beds i guess is a better way to put it are kind of guaranteed or assumed to be used by both those counties combined how many beds
Speaker 278
1:14:19
will they have in the jail uh it's uh around 150 between 100 100 together yes
Senator Joyce Elliott
Unverified
1:14:26
ma'am around 150 yes ma'am. So they're going to be paying for $150. We're going to be paying for up to $500. Yes,
ma'am. So who's going to pay for that jail to be built? That's what I need to, who's going to pay for that? That's the county going to pay for it to be built? From my understanding, the
Speaker 260
1:14:52
provider is taking out a commercial building loan to fund the construction. The provider is
Senator Joyce Elliott
Unverified
1:14:58
going to provide it. Yes, ma'am. And so over
the long haul, if somebody has 150 folks and another group has 500, so the state in the end with our reimbursements will pretty much pay for the construction of that prison.
Would that be, is that something you would assume to be logical?
Speaker 260
1:15:22
The state is making the largest financial contribution to the operation of the facility. So if
Senator Joyce Elliott
Unverified
1:15:29
we take that denominator to be the cause of the prison, and we can get to a number pretty quickly, that's something else I think for us to think about. It's $40 a day starting and then an escalator. Yeah. Approximately. Okay, and then I think my last question probably is,
If, for example, we are guaranteeing these 500 beds and we don't need them, we've got enough space in our own prison system, do we have to then leave beds empty in our own prison system to place some people at LaSalle to guarantee they get paid what we have contracted contracted for them to be paid?
Speaker 260
1:16:25
Ms. Cryer is looking at that specific language now,
Senator, but I would tell you just to kind of give you the current environment that we're working within. Within the Division of Correction now, we're at 105 percent capacity. Within the Division of Community Correction, we're at 102 percent capacity. Within the next 10 years, our ADC population is projected to increase by approximately 2,700 inmates and our facility population within the Division of Community Correction is projected to
increase by roughly 2,000 inmates. We need capacity today. We will need capacity tomorrow. Well we
Senator Joyce Elliott
Unverified
1:17:11
will but if we're going to build is it not possible was for
Speaker 259
1:17:18
us to expand our own facility that we have in the past presented proposals for construction
Speaker 260
1:17:24
within the division we are just now getting to the point of looking at what our biennial budget requests would look like I am
fairly certain there will be a component of that for additional capacity within in the system. In
Senator Joyce Elliott
Unverified
1:17:43
addition to LaSalle? Yes, ma'am. Well, so I think
this is a flaw in the way we're thinking about the purpose of prisons then, because when you look at the latest information, if Arkansas were a country, we'd be the number one country in the world for locking up people per capita. So if we keep building in this ongoing assumption that we are not going to do anything different except there's continued to as if what we're doing is working we will forever be here
having this conversation I'm just saying this since I'm waiting for an answer when she gets it I'll stop talking um if you've got it okay no go ahead I'm not I'm not being I'm not blaming you but what I'm saying since we have this up because we just take it as we're doing everything right but we just keep growing you take states all around us like mississippi georgia oklahoma is almost as bad as we are and places like georgia hawaii new jersey all these folks are reducing
and texas all these folks are drastically reducing the folks are locking up and we are going the other way by building more space and paying for somebody else's jail rather than change and closely examine some things we ought to be doing. Now I know ADC took the position they didn't need a study of any of their processes and what we're doing, but I think this belies that position. So if you've got an answer for me about, I'll
take that, and then I'll be finished Mr. Chair when I get this answer.
Speaker 259
1:19:28
So you could just turn me right off. The contract qualifies that the state will house up to 500, but should our need decrease or the county's need
Senator Joyce Elliott
Unverified
1:19:41
to that 500 number. So if the county's need increased, and
we needed that space, but the county gets first dibs on it,
but we needed it too, what would we do?
just be overcrowded in our in our in our
in our prison although we have pretty
Speaker 259
1:20:02
much paid for jail to use your phrasing if the state needs 500 beds we got we have dibs on those 500 beds up to those 500 beds if the state were to hypothetically need
Speaker 260
1:20:14
501 beds but the counting the counties between both of them need all 150 of those beds well yes ma'am we would have to find a place for that one we're guaranteed by contract
Senator Joyce Elliott
Unverified
1:20:27
of two five hundred although we pretty much paid for something that's being called a reason of jail thank you very much
Senator Bart Hester
Unverified
1:20:39
I appreciate it Senator Hester make a motion of
Representative Jim Wooten
Unverified
1:20:41
meeting consideration as a proper motion do I have a second I have a second all those in favor say aye aye all opposed ayes
have it we have a motion and a second on the floor for review of said contract. All those in favor say aye. Aye. All opposed. No. Ayes have it. We'll move on to the
next report on the agenda. We did. We'll move on to personnel. Representative Wooten. If you would hit your request
button representative. Representative Birch can we use your mic
Representative Jim Wooten
Unverified
1:21:35
Thank you Representative Wooten you are recognized to give the report Mr. Chairman the personnel subcommittee If we could get an order in the room So the representative be heard Amid Tuesday December 17 and reviewed the reports and requests listed in the report in your packet. We'd be happy to answer any questions that you might have,
but I move for the adoption of the report at the appropriate
time. That is a proper motion. Do I hear a second? I have a second. All
those in favor say aye. Aye. All opposed? Ayes have it. With that, we'll go to
Senator Joyce Elliott
Unverified
1:22:24
Senator Elliott for the lottery oversight report. Thank you, Mr. Chair. The Lottery Oversight Committee met Monday, December 16, 2019. Members heard testimony regarding recent activities and operations of the Office of the Arkansas Lottery and reviewed the following.
The Department of Higher Education's invoice to the Office of the Arkansas Lottery for reimbursable direct costs. The Department of Higher Education's recommendations for the Arkansas Academic Challenge Scholarship Program. the total proceeds from the lottery for FY19, the amount deposited into and dispersed from the scholarship shortfall reserve trust account, the projections for net proceeds from the state lottery for the current fiscal year, and an amendment to the Office of the Arkansas Lottery's
contractual agreements with the advertising agency, Cranford, Johnson, Robinson, and Woods. The subcommittee also approved its annual report to the General Assembly and recommends that the Lottery Oversight Subcommittee continues providing oversight to the operations of the DF&A Office of the Arkansas Lottery and monitoring available funds in order to guarantee the Arkansas Academic Challenge Scholarship remains solvent within its parameters.
Mr. Chair, I move that we adopt the report.
Representative Jim Wooten
Unverified
1:23:43
As a proper motion, I have a second. All
those in favor, say aye. Aye. All opposed? Ayes have it. With that, we'll go to Senator Irvin for
Senator Missy Irvin
Unverified
1:23:58
the Occupational License Report. Senator, you are recognized. Thank you, Mr. Chair. The Occupational Licensing Review Subcommittee met Wednesday, December 18th in Committee Room A. The subcommittee heard testimony regarding the following items. Number one, there was discussion of recommendations to be made regarding entities heard at the November 12th subcommittee meeting
with testimony from Mr. Matt Gilmore of the Public Health Programs Policy Coordinator of the Arkansas Department of Health. We also had reports from Occupational Authorization Entities, Arkansas Auctioneers Licensing Board, with testimony from Mr. Brad Woolley, who was the chairman, and Ms. Christy Arnold, Secretary and Treasurer of the Arkansas Auctioneers Licensing Board. The second entity that we heard from was Arkansas Department of Health Radiation Control Section with testimony from Ms. Connie Melton,
Branch Chief of Health Systems Licensing Certification Branch, and Mr. Chuck Thompson, who's a managing attorney with the Arkansas Department of Health. I can entertain any questions. If there are no questions, then I will move for adoption of this report. Seeing no questions, do I hear a second? I have a second. All
those in favor, say aye. aye all opposed eyes have it thank you sender members you'll follow me to the next page of the
agenda under item g there are exhibits g1 g2a and g2b that i need a motion to file as review i would take a batch motion if oh i'm sorry sorry g.1 needs a motion to approve so i need that motion prior to the review motion yes ma'am i move g1 Okay, I have a motion for G1 for approve. Do I hear a second? Second. All those in favor say aye. Aye. All opposed.
Ayes have it. Senator Chesfield, I recognize you for the motion for batch G2A and 2B for review, correct? So moved. Do I hear a second? Second. I have a second. All those in favor say aye. Aye. All opposed. Ayes have it. Members, the rest of the report down to item 15 is just for report purposes. If you members have any questions, I'll recognize you for those. Other than that, we'll go on to item one, or I, under new business,
and it's an interim study by Representative Gary Stubblefield, or Senator
Senator Linda Chesterfield
Unverified
1:26:27
Gary Stubblefield. I've done that all day. Senator, I recognize you to explain your study. Yes, sir.
Senator, you're recognized to explain your study.
Senator Gary Stubblefield
Unverified
1:27:09
Thank you, Mr. Chairman. I was just going to ask if these two ladies could come down. Absolutely. All right. Thank you, Mr. Chairman, and thank you, colleagues, for being here today to listen to this. Before I tell you about the resolution and what it does exactly, I want to say a few words concerning ACD and the decision they made to changes in the poultry house assessments by issuing new guidelines rather than adopting rules.
Senator, hold on a second. For clarification for the membership, this is an interim study, and within the interim study there is a resolution for council for the assessment coordination board. So I want to make that clear that
there is basically two votes in the one. So, Senator, you're recognized to carry on. Thank you,
Senator Gary Stubblefield
Unverified
1:27:59
Mr. Chairman. ACD's position appears to be that because county assessors are not required to follow the guidelines they issue Relating to assessments, they are not rules that have to go through the rulemaking procedure under the Administrative Procedure Act.
They do not mention Amendment 92, which requires agencies to send their rules to the General Assembly for approval. Given the Assessment Coordination Division's position on these guidelines, they do not consider the agency to be required to publish the proposed guidelines and have a public comment period. Under the Administrative Procedure Act in Amendment 92, a rule is an agency statement of general applicability and future effects that implements, interprets, or prescribes law or policy or describes the organization, procedure, or practice of any agency and includes but is not limited to the amendment or repeal of a prior rule.
In its October the 10th, 2019 letter to JPR, that meeting, the Assessment Coordination Division seemed to say that it is not required to adopt rules on issues unless the law explicitly requires the adoption of rules under the Administrative Procedure Act. and I cannot find any law in the state of Arkansas that supports that assertion. The Administrative Procedure Act and Amendment 92 apply to anything that meets the definition of a rule unless it is explicitly exempt from the law
and I certainly have not found any exemption of ACD in relation to the Administrative Procedure Act under Amendment 92 of the Arkansas Constitution. uh during the september 11th 2019 meeting of jpr there was testimony and member comments relating to the confusion among county assessors as to whether they are required to comply with the guidelines sent out by acd on poultry houses and whether they could be subject to penalties for failure to comply during the september jpr
meeting the Polk County P.O.L.K. County Assessor testified that she would have felt pressure if she deviated from the ACD's guidelines because there are consequences for not staying in compliance. ACD has stated that most assessors use the values that ACD provides because the counties do not have the resources to research what the value should be. In that September 11, 2019 meeting, if a county deviates, this was the testimony, if a county deviates
from what ACD sends out is required to use a generally accepted appraisal methodology in the valuation industry and it has to be documented, it has to documented support for the use of that alternative method for purposes of the ratio study. ACD clarified during the September meeting of JPR that ACD's enforcement authority is limited to the ratio study and the reappraisal plans. However, ACD stated that poultry houses are not included in the ratio study. This
could be contributing to the confusion as to whether the county assessors face any sort of penalty for not following the guidelines sent out by ACD. I'm sure that most of you received a letter from the Baxter County Assessor's Office. She is the president of the Arkansas Tax Assessor's Association. If you just give me a minute to respond to some of her statements that she made in that letter.
In paragraph one, did the Arkansas Assessor's Association Board look at whether ACD's rates were in line with the value of poultry houses and the counties not represented on the board because the study they did only included those board members, the poultry houses that were located, and those board members' counties. Not any other counties were included in that study. Paragraph 2. The letter states that any market values that
are not in line with ACD's guidelines should be adjusted through depreciation, but it does not take into account new houses or varying sales markets, and I would like to know is there a reason for that. Paragraph two, each county assessor is charged with ensuring the equal and uniform taxation of property in his or her county. Each county assessor makes a determination on valuations within his or her county based on the property value within that county. It is the responsibility of the state to ensure taxation is equal and uniform throughout the state.
ACD states that its mission is to ensure the equal and uniform valuation of property throughout the state in accordance with Article 16-5 of the Arkansas Constitution. ACD acknowledges that the Arkansas Constitution charges the General Assembly with the responsibility to provide for a method of valuation for property. That was in a letter October the 10th to the JPR. All the set methods of evaluation listed, except for one, were methods of evaluation established by the Arkansas General Assembly.
Paragraph three, where she talked about carving out rules for special interests. She almost made it sound like these were carved out for poultry houses. and I'm not real clear what she meant by special privileges in that context because market value is a constitutional requirement, not just a goal, and any method of valuation set by the General Assembly would presumably be structured to ensure that the taxation of poultry houses is equal and uniform throughout the state. Paragraph four, they did not have any rates
by the type of houses, the assessment coordination vision did not have any rates by the type of poultry houses until 1995. And what I mean by that, they did not have separate rates for pullet houses, breeder houses, broiler houses. They were all valued the same. That changed in 1995. Paragraph five. Again, this does not address other adjustments that could occur, such as state sales comparisons and it does not address the effects on new poultry houses
would see the full increase assessment immediately. Paragraph six, the legislation is required to set the method of valuation. The Arkansas Constitution, Article 16, gives the General Assembly that responsibility. The General Assembly is looking at what would be equal and uniform throughout the state, not just based on a group of counties or how county assessors feel about the fairness or uniformity of taxation in their individual counties. Finally, paragraph seven, the Equalization Board does have
the authority to adjust values when needed, but is a general assembly that has been tasked with setting methods of valuation to ensure the equal and uniform taxation of property throughout the state. Now let me give you a just a brief guidelines of what this this resolution does. Excuse me. First of all it describes the steps of the assessment coordination department
which is now the assessment coordination division took in increasing the assessment assessment rate for poultry houses beginning in 2017 with a statewide review of poultry house assessments, which led them to conclude that the assessments were not equal throughout the state and that the cost manual used by the assessors did not reflect the current value of poultry houses. It also outlines changes made to the assessment rates of ACD in 2018 for brawler houses, layer houses, and breeder houses. This resolution also provides ACD's stated
position on the effect of the rate changes when they described as recommendations rather than requirements that serve as a starting point for the assessors in determining the assessment value of poultry houses. These changes were made as guidelines rather than rules, so they did not go through the rules promulgation process. It also states that the Arkansas Constitution gives the General Assembly the authority to set the methods of valuation purposes of property tax and that the General Assembly should do so
to ensure equal and uniform taxation. It also states that the ACD changes in the rates has caused confusion among property owners and county assessors and that the changes should be amended or suspended to avoid confusion and any and equity, states that any future changes in the assessment rates should be made through the rulemaking process to allow the General Assembly to review the rules to ensure that they comply with legislative intent.
It also calls for the Assessment Coordination Division to amend the guidelines on poultry house assessments and follow the proper rulemaking procedures in establishing any future guidelines. The Joint Performance Review Committee is to study the means by determining the valuation of poultry houses for poultry tax purposes and recommend legislation in establishing a method of valuation. This resolution will be sent to ACD and the county assessors. Let me end up with saying one thing.
Back early in the year, ACD hired a third-party company to do a value assessment on automobiles in the state of Arkansas. When the Baxter County Assessor, Ms. Nicholson, who is also president of the Arkansas Assessors Association, she and some other assessors called ACD and said, these rates do not look quite right. assured them that the rates were right. Even after repeated calls
concerning the values that did not appear to be correct, they were sure that the values were correct. A month later, all 75 counties were notified that the values were indeed incorrect. Miller County Tax Assessor testified in that JPR meeting, Nancy Heron, estimates that between 30,000 and 40,000 errors were made. The assessments have gone up. In all, it amounted to $9 million in miscalculations, in assessment miscalculations, costing Miller County
$8,000 just in postage alone to send out notices to their citizens that they had messed up in their taxes. In Washington County, there were 85,000 notices sent out. So when you add up, there were 74. The only county that caught this early and did not send out notices was Pulaski County. The other 74 counties all had to send out notices costing the counties hundreds of thousands of dollars. Some of these larger counties may be
able to absorb these costs, but I can assure you that a lot of these smaller counties did not have the funds available to pay for these notices that were the result of a third-party company who issued a flawed report that cost the state of Arkansas hundreds of thousands of dollars. Now, my question to you is if a third-party company can do a flawed report, and not only a third-party company, but I've been here 10 years. I have seen contracts come in from
other vendors for millions of dollars. Millions of dollars for software that did not work, that we never recouped. And now we're asking the counties to have to pay for a mistake that a third-party company hired by ACD made. And I think the citizens of the state of Arkansas would want us to hold accountable. Those companies who come in and do a service and provide a service and we pay them and that service is flawed and yet we are stuck with the bill. You go to the
doctor to have your right pinky toe amputated and they amputate your left one, I can assure you you're gonna want compensation for that. We don't seem to want to force these companies to come back and make right what they've wronged for some reason and I think that needs to change in the state of Arkansas. So So with that being said,
Speaker 337
1:41:10
we will take any questions, and I would hope for a
good vote. Are there any opening remarks from Representative Bentley or Representative Vaught?
Okay. Representative Lowry, you've been in the queue the longest. You're recognized to ask
Speaker 339
1:41:28
your question. Thank you, Mr. Chair, and I do have a question, but I also may want to be back in the queue just for discussion. Senator Stubblefield you know I understand one two things one that representing a request for an interim study is usually pro forma you know that we just we allow it and I think that that's fine we should we should study things so the question I really have related to that and the
second thing I'm going to say is that I'm a city slicker and I don't know the first thing about poultry houses so i'm out of my element here okay but the question i have is why introduce a resolution basically already prefacing that this is what the interim study would show and this is what we want to present to the legislature would you be willing to separate those out so that we could say yes we think that there ought to be a study but no we don't think that
you ought to be putting the thumb on the scale and presenting a resolution before it's even been studied. Well, that's the whole purpose, Representative Lowry,
Senator Gary Stubblefield
Unverified
1:42:42
is to study the resolution and to study the, there's no continuity in the assessment values across the state as far as poultry houses
are concerned. That's one of the things we're looking for in this study, this interim proposal. But if I read this... Are you wanting me to separate, are you asking me to separate we've been told
Speaker 143
1:43:05
that there are two different study proposals
Speaker 339
1:43:08
proposals here in one that one vote is going to be to have a study and the other is to pass a resolution urging that a change be made and I just think urging that a change be made before it's even been studied is really putting the cart before the horse Representative
Lowry, if you look in your packet under
i yes oh one dot oh one zero one it is an enum resolution urging the assessment coordination
Representative Jim Wooten
Unverified
1:43:39
board to act so there is a resolution in the pack
Speaker 339
1:43:48
as well well no i understand that that's the case I am just wanting to know why would we be sanctioning an action before it has actually been studied. And I know it went before joint performance review and there was testimony and all of that, but the real bottom line on this is that the assessors, and I understand that
you've called into question whether this letter that was sent actually fully represents the intent of all its assessors. But the truth is they are elected officials and they have the flexibility to accept these guidelines or not. Could we not still just pull down the resolution? I think we're, again, we're getting ahead of ourselves to urge an action before it has actually have been studied during the interim and so that's the question I'm
asking you is that can these be separate maybe the questions to the chair can these be separated out you you had indicated with Representative Wardlauer Mr. Chairman that this was two actions in one and I guess I'm asking are there two different votes that will be taken I'm going to have
legal explain it, but yes, since she's fixing to explain why.
Speaker 19
1:45:18
It could be separated, but the ISP, the study to JPR would need to be filed as an ISP and then referred to JPR. So it would be, that second part of the study
Speaker 22
1:45:29
would need to come in council in January if you wanted to do it that way.
Speaker 339
1:45:38
Okay, so this is just one piece of paper, it's a resolution, but there is really not any referral to a specific committee to do the interim study? JPR?
JPR. Okay. I'm sorry. Come back to me, I'll examine these documents because I may be, I'm going to get some
help here. Senator Hickey, you're
Senator Jimmy Hickey, Jr
Unverified
1:46:06
recognized for a question. Thank you. My request is this, if passed, however this falls out, that on page three of the interim resolution, line 11,
I think the appropriate committee would, instead of joint performance review, that that should be sent to the joint House and Senate Committee on Revenue and Tax. I think that would be the most appropriate place if this is passed for that to go. So I would like to see if Senator Stubblefield would include that in his motion at the proper time, and if not, then I would make a substitute motion, but I
want it to go to revenue and tax. Senator Hickey, I have no
Senator Gary Stubblefield
Unverified
1:46:48
problem with sending that to revenue and tax.
Speaker 353
1:46:52
If that would be fine with the body, I have no problem with sending that to tax and revenue. As long
Senator Jimmy Hickey, Jr
Unverified
1:46:58
as that's in the motion, and then they can vote whether to approve it or not. If it is passed, I just think that's where it needs to
be. Senator Stuffelville can accept that as a friendly amendment. Sir. Senator Stuffelville can accept that as a friendly amendment. That works good for me. Sounds like that's agreeable. That's agreeable. All right. Thank you. Senator Ballinger, you're recognized for a question. Thank you, Mr. Chair.
Senator Bob Ballinger
Unverified
1:47:24
This is for any of my colleagues down there. i mean what i would say is one of the reasons for the resolution um on top of the study that i think the study is necessary but one of the reasons for the resolution is we have constituents right now who are facing being crushed we have have one that well senator sublinfeld and i basically share because she's right on the border and you know she is facing the potential of a tax increase of you know exorbitant amount maybe enough to make it where where she ain't you know loses has no income and so this is a this is a present problem for constituents you know who are facing this and
then on top of it you know you know if they're willing to accept this and start this doing the study process then all of a sudden all this confusion will go away and then that fixes the problem right right right chairman can i
Representative Mary Bentley
Unverified
1:48:14
make a response to senator representative lowry uh his comments earlier you know this is a present danger to my constituents now because they're not
going move forward on building new houses affecting our economy and also you can't pick and choose assessors can't pick and choose what are the guidelines they're going to take because it leaves them no basis on why they're why the cherry
picking one assessment one thing out of the guideline and not they're held to the guidelines that's the only thing they have to stand on on why they're charging what they're charging in each county and this is a pretty seriously hurting my constituents now and impeding any progress of anybody building any new homes in my area which is a huge economic hurt
Senator Gary Stubblefield
Unverified
1:48:51
to my district so and I'm I would add one, if it's okay, Mr. Chairman. I know we have heard word that there's the potential of
hundreds of new poultry houses being potentially built over in western Arkansas.
The first two questions they ask are how much is it going to cost us and how much are the property taxes? I think this is very relevant to the current situation and the time element is critical
here. I think it's imperative that we do this now. Senator Irvin, you recognize? I want to be able to ask my questions.
Senator Missy Irvin
Unverified
1:49:36
Thank you so much, Mr. Chair. Tired of immediate considerations.
Thank you. My question is, whenever they sent the letter back out, because I follow this whole situation, when they sent the letter back out, correct, what action occurred when they sent that letter back out? Was there any action? Did that letter amend their guidelines or rates?
Can you be more specific about the action?
Senator Gary Stubblefield
Unverified
1:50:12
Senator Irvin, are you speaking about the automobile evaluation? No, no,
Speaker 362
1:50:16
no, I'm talking about the poultry houses.
Senator Gary Stubblefield
Unverified
1:50:18
Well, if you remember correctly, most of us were informed of this over a year ago, and it seemed as though, when I heard about it, that the Assessment Coordination Division almost made it, well, they didn't almost, they made it appear like that the legislature had passed a law that mandated this action to be taken, which was totally false.
The legislature had nothing to do with increasing the assessment rates on these poultry houses. And then we were able to delay it for some time, and then
Speaker 337
1:50:53
inevitably this is what happened. So I'm not sure about the second letter that
Senator Missy Irvin
Unverified
1:50:59
you're referring to. Can people stop talking while we
Representative DeAnn Vaught
Unverified
1:51:03
have this conversation? Senator Irvin, from what I understand, the letter that was sent out still does not clarify that the tax assessor has the purview to go ahead and pick what is true market value for that area.
Senator Missy Irvin
Unverified
1:51:17
Okay. So it didn't really take the action that you're asking here. This is action going beyond what they did. Is that correct? and and second question i would agree with you senator stubblefield because there seemed to be a lot of back and forth going on between the assessors well the state's making us do this well no the state's not making us do this we're issuing these quote guidelines but then if you don't do it there's consequences so it's either one way or the other and i think that's my
frustration in this whole assessment process. We're raising taxes on individuals without statutory legislative direction to do that, which I find to be problematic. Even though the assessors are elected, there's got to be, and I can say there was an issue that came up in my area where the assessment coordination division just wasn't clear enough on how they needed to go forward
and it cost lawsuits and everything else so there definitely needs to be some clarification in that matter thank you for answering my questions Thank you Senator Senator Hester, you're recognized I have
a motion for immediate consideration, that's a proper motion do I hear a second? I have a second, all those in favor say aye aye all opposed ayes
have it question on the floor is a motion to accept
the interim resolution an interim study that's going to revenue and tax is the only change that was a friendly amendment added all those in favor say aye all opposed ayes have it thank you members the last thing on the agenda was item J it was Senator Ballinger's carryover it's my understanding he's good with that So seeing no further business on the agenda, we stand adjourned.
Agenda
A. Call to Order.
B. Roll Call.
C. Approval of the Minutes of the Last Meeting, November 15, 2019.
D. Report of the Executive Subcommittee — Rep. Jeff Wardlaw, Sen. Cecile Bledsoe, Co-Chairs.
E. Reports of Standing Subcommittees:
F. Reports of Interim or Special Committees:
G. Review of Communications:
H. New Business:
I. New Interim Study Proposals and/or Interim Resolutions:
J. Business Carried Over: Reports on the “course of action” implemented to ensure compliance with FORUM Act 184 of 2019 from Higher Education Two (2) Year and Four (4) Year Institutions, submitted pursuant to A.C.A. §6-60-1008:
K. Adjournment.
Documents
Speakers
Representative Jeff Wardlaw Chair
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Senator Cecile Bledsoe
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Representative Fredrick J. Love
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Representative Dan Sullivan
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Senator Bob Ballinger
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Senator Bart Hester
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Representative Jim Wooten
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Representative Ken Bragg
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Representative Bruce Cozart
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Senator Larry Teague
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Senator Linda Chesterfield
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Senator Joyce Elliott
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Chair
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Senator Scott Flippo
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Representative Lane Jean
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Senator Terry Rice
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Representative Megan Godfrey
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Senator Missy Irvin
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Representative Jon S. Eubanks
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Senator Will Bond
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Senator Jimmy Hickey, Jr
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Senator Gary Stubblefield
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Representative Mary Bentley
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Representative DeAnn Vaught
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