House Revenue & Taxation Committee
Video
Transcript
Bills discussed (9)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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SB275
· 5 mentions in chapter, transcript
Matched: “SB275”
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Pre-2017 bill | ||
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HB1680
· 3 mentions in chapter, transcript
Matched: “HB1680”
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Pre-2017 bill | ||
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SB274
· 3 mentions in chapter, transcript
Matched: “SB274”
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Pre-2017 bill | ||
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HB1552
· 2 mentions in chapter, transcript
Matched: “HB1552”
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Pre-2017 bill | ||
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SB276
· 2 mentions in chapter, transcript
Matched: “SB276”
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Pre-2017 bill | ||
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HB1052
· 1 mention in transcript
Matched: “…y of you know, all the third week of the session, we passed House Bill 1052 out of here, which reduced sales tax on manufacturing by a…”
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Pre-2017 bill | ||
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HB1684
· 1 mention in chapter
Matched: “HB1684”
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Pre-2017 bill | ||
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HB1703
· 1 mention in chapter
Matched: “HB1703”
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Pre-2017 bill | ||
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SB270
· 1 mention in transcript
Matched: “those today. Okay, that may be, okay, very well. Senate Bill 270, Senator Madison, HB 1680, Representative Stubblefield, pas…”
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Pre-2017 bill |
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Speaker 1
0:00
Thank you, Mr. Chairman. I appreciate the opportunity to be down here, actually my first trip to the House, to present a bill. And it's a little scary. Just different rules, different process from both chambers, and I respect those differences. But the good news is the bill I bring before you today, there's not much nuance, there's not much difference. There's not much to figure out here. It doesn't take rocket science. I propose in
Senate Bill 274 to raise the exemption on used cars where no sales tax is paid from $2,500 to $5,000, which according to DF&A will have anywhere between a $5 to $7 million a year impact on state revenues. And of course, as Chair of the Budget Committee, revenue impact is a big deal because we gladly have a balanced budget approach to budgeting in Arkansas. So when we have
revenue impact, it's important. But one thing that is absolutely clear from my experience down here, there is only one way in Arkansas to hold the line on spending. Appropriation bills do not hold the line on spending because money continues to flow into the coffers. Rainy day funds, other things, do not hold the line on spending. There is only one way in Arkansas, since we have the Revenue Stabilization Act, to hold
the line on spending, and that is to cut taxes and let Arkansans keep the money in their pockets. And today, we have a great opportunity down here because a lot of folks were elected. As I look around this table, I see a lot of folks that were just elected to hold the line on spending and cut taxes. There's been a lot of discussion about which taxes, what taxes. The good news for me is from the very beginning I've said, Mr. Chairman, that I'm not an economic expert. I'm not an economist. I know there are a lot of economists in this room, but I'm not an economist that wants to pick and choose which taxes to cut.
That's probably by virtue of the fact I've been down here 11 years, and I know how difficult in many years it's been to cut taxes. I was supportive of the grocery tax cut when I first came down here. First of all, I believed it was the right thing, but the second thing is there were a lot of Democrats that supported the grocery tax cut too, and I knew there was a chance to cut taxes, and that's what I wanted to do. So I embraced that. Another reason I embraced this tax cut is because it limits the flow of revenue into state government?
And that is a question we all have to ask ourselves as we cast a vote today. Not next week, not last week, but today. Do we support allowing another $7 million to flow into the Treasury, or do we want to cut taxes and let Arkansans keep that $7 million? And by the way, at the same time, you're giving relief to moderate-income, working Arkansans, give them a chance to get a break on buying a little better car to go to work.
So again, many times you face nuances on bills, what's almost right or not quite right, but the beauty of it today is everybody at this table, no nuance. It really is one of those times where you vote to cut taxes and reduce state spending or whether you vote to open the door and allow that $7 million continue to flow, regardless of anything else that is done in this session, from appropriation bills to whatever.
If you don't pass this out and off the floor and it becomes law, you will be adding $7 million to the state coffers. So it really is one of those chances to step up and not say. I mean, I've heard a lot of people talk to me, Mr. Chairman, about what they want to do, what they intend to do, what they really deep down in their heart want to do but can't go against somebody or some party or something like that. Today, all the talk's off. Folks are going to get a chance to make motions.
Folks are going to get a chance to say yes or no. And, Mr. Chairman, I respect you. If you want to do it by voice, vote, roll call, that's of no concern to me. But today's a chance to limit state government spending by $7 million, and I would sure be glad to answer any questions and would really
Speaker 5
4:45
encourage a positive vote on this bill. MR. Thanks, Senator
Baker, for the comments. I've got a question. Representative Burris, you're recognized for a question. MR. Thank you,
Representative John Burris
Unverified
4:53
Mr. Chairman. The impact of this is $7 million. MR. Five million initially and then $7 million when it's fully implemented per year.
MR. which I agree with. I think the only way to truly limit the amount of general revenue that's available to spend would be through limiting the amount that's collected, which would be through tax cuts. Right. Would your tax cut have an impact more or less on the amount that it affects general revenue if it's passed next week or this week? It will not, but we all know that
Speaker 1
5:20
many of us think we have a crystal ball, but I don't know what the posture is going to be next week. And I encourage folks today, not to say they're going to do something, but today to cast a
vote for tax cuts today and limit spending
today. Representative Lindsey, you're recognized. I have
Representative Uvalde Lindsey
Unverified
5:40
a motion to table this SB 274. Okay. There is a
motion to table. to table is non-debatable, and it requires the majority of the quorum. So all in favor of
the motion to table, say aye. Aye. Any opposed?
Okay. Motion carries. Thank you, Mr. Chairman.
Speaker 1
6:05
I appreciate the one no vote on the tabling tax cuts today. Thank you. Duly noted. Appreciate that. One no vote to table. Appreciate that.
Thank you. Okay. That brings us to Senate Bill 275. Senator Sample. Representative Gene,
are you going to run this?
You're recognized to explain Senate Bill 275. Thank you,
Speaker 21
6:41
Mr. Chairman. In light of the last vote. Senator
Sample, I'm sorry. I didn't see you down there. You're also
Speaker 22
6:50
recognized. Thank you. In light of the last vote, we will not be asking for a vote today, but we do want to present it because we're going to get pretty busy the next couple of weeks. This is Senate Bill 275, and as many of you know, all the third week of the session, we passed House Bill 1052 out of here, which reduced sales tax on manufacturing by a half cent.
And going down and talking to the Senate, Senator Sample had a bill that wanted to reduce sales tax on the independent power producers, and I'm going to let Senator Sample talk about that. This Senate, the committee voted 18 to 1 to pass this out, voted 88 to 8. It's just engraved in Senate Bill 275. And, Senator Sample, if you'd like to explain your part of the bill,
Speaker 27
7:46
and we'll entertain any questions after that. Thank you, Mr. Chairman. Thank you. The independent power producers that use natural gas are using the most efficient machines or equipment available. And the surrounding states, there's only one state that taxes natural gas to make that power,
and that's Tennessee, and that's at 1.5%. Since we're being taxed at 6%, we make these producers not as competitive as they should be. And so I was proud that Representative Gene and I could take and put our bills together and do something good for the state of Arkansas. Thank you. We'll take any questions at this time, if you have any.
Representative Mark Biviano
Unverified
8:54
Representative Bibiano, you're recognized for a question. Thanks, Mr. Chairman. Could you make a comment
Speaker 27
9:06
on the competitive nature of the surrounding states and how this will make us more competitive? Well, these power plants generate power for peak loads, and when they're automatically 6 percent higher than the surrounding states, it makes people not want to use them.
And one of the power companies that is affected by this has started a scholarship program or had Magnet Cove to start a scholarship program. And I would encourage anyone here that is interested in education to see what that money has done for the people or the kids of Magnet Cove in the state of Arkansas. I don't see any more questions.
Is there anybody from the audience who would
like to speak for the bill, against the bill? Mr. Leathers, you're recognized to speak against the bill. Now, you've already spoken against it once. Now, we can refer to the record
Speaker 37
10:22
if you want. Mr. Chairman, usually I would just say this is our standing comments, But I want to make sure everybody understands this is not the same bill before, and the impact is quite a bit greater. I think the other one was $4.3 million.
This one is $7 million the first year, $12.76 in 2013, and $20.85 million in 2014. So looking at not just the budget for next year but the budget in those out years, there's a significant impact that you're going to have to be looking at. And, of course, next year is not built in the balanced budget, which would have been our standing statement that we'd have to have an opposition to the bill. Thank you. Thank you. Thank you
for being here. Would anybody speak for the bill, against the bill?
Senator Sample, Representative Gene, I guess I'm just not going to recognize any motions, and you'll just pass over where you can stay on the
Speaker 22
11:17
active agenda. Is that what your desires are? We're going with the speaker. He
wants to look at the forecast, and maybe next week we'll bring this back up. Very well. We will just pass over it and thank Senator Sample for coming down. That takes us down to Senate Bill 276. Senator Teague, I think Representative Steele, are you also going to go to the end of the table?
You're recognized. Senator Teague, thank you for coming and
Speaker 42
11:47
being here today. I appreciate it, Mr. Chairman. Mr. Chairman, I think we'll do just like Lane. we'll give you a quick rundown and we won't ask for a vote. So I don't think this requires a lot of explanation. This is the Governor's reduction on sales tax. It began in fiscal year 2008, about $122 million reduction, $09, $131 million, $10, $40 million,
and $11, it'll be about $45 or $46 million. It's a half cent. Everybody knows about it. Senator Steele, you have anything to add to that?
Speaker 45
12:23
MR. Thank you, Senator. Mr. Chairman, I would just like to tell the committee that this reduction in grocery tax could not come at a more critical time for our people. I don't know if you've been in the grocery stores lately, but prices on food are up. A lot of people are blaming it on the price of gas going up. So this will be a welcome relief to a lot of people who are hurting around the state
Speaker 42
12:48
of Arkansas. Mr. Chairman, if there are any questions, we'll be happy to ask them, or we'll get up
and let you all get on with business. I don't see any questions. Is
there anybody from the audience who'd like to speak for the
bill, against the bill? Nobody? Okay. Very well. Mr. Chairman, we appreciate your time. Thank you, Senator Ting. We'll pass it over.
Representative John Burris
Unverified
13:12
I'm sorry, Mr. Burris. I'm sorry. I may have made this point earlier, but I've been in several other committees where it It required a vote of the committee to pull a bill down.
A member wasn't allowed to pull their own bill. It required a vote of the committee to do that. I think we might be seeking some clarification on
the process. I understand there has to be a motion before, you know, you get to that point where you can't do it. But I'd like to allow Senator Teague to be able to come, you know, and let's come back You ought to do it any way you want to. What is Passover? I think unless somebody wants to make a motion, I'll entertain any motions.
Thank you, Mr. Chairman. Okay, without objection. Seeing none, we'll pull the bill down.
Thank you. All right. HB 1552, Representative Westerman.
Representative Bruce Westerman
Unverified
14:09
Mr. Chairman, I'm still waiting for fiscal
impacts on 1552 and 1553, so I'm going to pass over
those today. Okay, that may be, okay, very well. Senate Bill 270, Senator Madison, HB 1680, Representative Stubblefield, pass.
Are you prepared to run HB 1680, Representative Stubblefield? Okay, you're recognized. Explain your bill. Thank you,
Chair
Unverified
14:50
Mr. Chairman and committee. This bill came about as a result of a couple of people in my district that kept calling me concerning the variation in the assessment values of used vehicles.
And after doing some research, I found that different counties were using different sources to derive the assessment values of cars and trucks, and just a few of those were sources like Kelly's Blue Book and National Auto Dealers Association, Phillips, Prime Media, and we felt like in order to slow down maybe some of these assessment appeals that come about and also to give some consistency to the assessment values of used autos that maybe all counties should use the same source.
So we came up talking to the assessors and auto dealers. We felt like that using the National Auto Dealers Association would be the best source in order to bring some consistency into these appraisal values that are so inconsistent. And I realize that, you know, there are some other factors that play into this, such as gas prices and the recent program we had, Cash for Clunkers, but those programs no longer exist. And either paying too much or not paying enough should not occur because for a used car, it
should not occur because of the use of sources that give different assessed values. And that's the reason this bill was brought up. I have Mr. Lamar Murphy here. I think most of you are familiar with him. He would like to say a
Speaker 62
16:43
few words, Mr. Chairman? Yes, you're recognized. Thank you, Mr. Chairman. I'm here just to testify that the NADA is an industry standard, an industry norm.
I've been in the car business for 28 years. And this is the one that the used car dealers, the new car dealers, the banks, and all rely on for a consistent and reliable value. And I have no financial interest. This is not my association that does it. So I'm speaking strictly as a professional. Thank you. Representative Cowling, you recognize
for a question. Thank you.
Representative Larry Cowling
Unverified
17:25
The NADA, is that, can anyone use that? I mean, does everybody have that? Is it online like Kelly Blue Book or anything like that? Yes, sir. But you can't pull it up on the
computer? Okay, thank you. Representative Gene, you're recognized. Motion at
the proper time. You bet. Don't see any other questions. Is there anybody from the audience that would like to speak for the bill?
Representative Viviano, you want to speak for the bill? I have a question. You got a question. Okay. Anybody want to speak against
Chair
Unverified
18:10
the bill? Representative Viviano, you're recognized for a question. Thank you,
Representative Mark Biviano
Unverified
18:15
Mr. Chairman. Will this put any disadvantage to maybe obtaining the maximum value of a vehicle from
Speaker 3
18:22
only using one source as opposed to maybe using a couple sources and taking some type of average
Chair
Unverified
18:29
appraisal value? Well, the example I spoke of earlier, the man from Greenwood said that his son had had
his truck appraised one year for $1,600, and he moved to another county, and it was appraised that year for $2,600. So, you know, that's really not right for someone to have to pay higher taxes just because two different counties use two different sources to appraise the value of a vehicle. And we're just trying to bring about some consistency across the state and level the playing field so that
Speaker 72
19:02
everyone, you know, gets a fair shake when it comes to assessing
Representative Kelley Linck
Unverified
19:06
these automobiles. Representative Link, you're recognized. Rufus and Stubblefield, this sounds like a good thing. National Audible Bill Dealers Association guides, is there a cost to them? Is anybody making
Speaker 62
19:30
money off of them? Not that I'm aware of. So they're free? No, sir. There is a cost to them. It depends on which way you want to assess.
They are free. You can log on to it and get a value. I have to pay for mine as a book. The reason
Representative Kelley Linck
Unverified
19:48
for my question, I'm just trying to be clear that we're not mandating that a profitable company is used without some sort of bid process. In other words, does Kelly Blue Book charge for their manuals? Does NADA
charge for theirs? Are we in some way mandating for a company? Well, that
Chair
Unverified
20:12
certainly was not the intent of this bill.
The intent of this bill, like I said, was just bring about a more equitable and
Representative Kelley Linck
Unverified
20:20
consistent basis. And I understand what you're saying. I'm in agreement with your intent, and I think it's great intent, and I'm, you know, obviously would like to vote for it, but I just
want to make clear that we're not doing something outside of our scope here. Representative Lincoln, this
kind of leads into maybe a question that I had. I'm 99% sure that you can go
out on their website and do this for free, and they make money through advertising, and you don't have to pay for the services.
We use it some. Some financial institutions use this as well. The question I would have is there are a lot of ranges that are given when you go out and look for the value of a vehicle, And it's a pretty wide spectrum from, you know, new, clean, you know, not so clean, wholesale value, whatever the case may be. So which one of those are we going to use?
Retail. Retail. Representative Kerr, you're recognized. Okay, you're saying retail, but
Speaker 86
21:30
there's different levels of retail, too. There is, you know, trade-in value or sold by individual, sold by a car lot. I mean, what are we talking
Speaker 62
21:46
about? In the NADA, they will have a rough average and clean trade value.
It will have a loan value, and it will have a retail value. Okay. Most of these assessors are going to go by bill of sale. What happens is if you don't have a bill of sale, they're going to have to have some way to value this automobile, and this goes for revenue office also. They have to have a way to value this vehicle without a bill of sale. Otherwise, you're going to be assessed on the bill of sale. Right. My
understanding. Okay. So in your anticipation, is this going to increase the value of vehicles
Speaker 90
22:27
or reduce the value of vehicles on the average? In
Speaker 62
22:32
my opinion, well, I don't have any way of knowing. If they have a bill of sale, it will be a bill of sale. If it's been hit by a train, it's going to be less than if
it come out of your room or's garage. Okay. All right. Thank you, sir. Representative Stubblefield, is there anybody here from the, I think it's the assessment coordination department, the assessor coordination department, or are there any county assessors here that are interested in speaking right here?
Okay. Question answered. Okay. Any questions? More questions? I don't
see any. Is anybody from the audience like to speak for the bill? It looks like Mark Whitmore from the Association of Counties has signed up to speak for the bill. So
Speaker 96
23:29
with that, Mark, you're recognized. Mark Whitmore, Association of Arkansas Counties.
Speaker 98
23:35
It's my understanding that ACD Assessment Coordination has a guidebook that they pay for access to, and the assessors have access. I'm not intimately familiar with how that works exactly, but it's my understanding they do have access to a uniform guidebook, and the assessors have that access. It's a paid-for
Speaker 99
23:56
service, and that's the extent of my knowledge on this particular
subject. MR. Mark, I understand maybe there's some rule
that they're all required to follow, a uniform rule and it addresses
this, is that being followed uniformly? Well, let me say this,
Speaker 103
24:15
the only thing I can say is that, and I wasn't prepared on this particular topic,
Speaker 98
24:21
is that ACD's mission in life is to provide uniformity, and they do promulgate rules and regulations. And I'm under the belief that due to the fact they do pay for service and have that guide, but accessible to the accessors, that it's understood that they should use that.
Speaker 96
24:38
Now, I have no idea whether or not how that's ‑‑ I think ACD would be more equipped to answer any kind of questions about compliance or lack of compliance or whether it's a strict
Representative Mike Patterson
Unverified
24:54
rule or how that works. Representative Patterson, you recognize. I've got a question from Mr. Whitmore. Do you not agree that whether we change the book that they're wanting to change to or use the
Speaker 96
25:04
one that we got now, there will probably be a difference in some of the counties? Well, I think I'd be concerned about passing a law.
Speaker 98
25:11
My familiarity with ACD is that they have regulations and they have dominion over the assessors, and they provide rules and regulations based upon their understandings, and I'd be cautious about passing a law. I have no idea about how the assessors react to the particular guideline at this point, I think that's ACD's purview, and I have really no knowledge, to be honest with you. I was here to testify on another bill, and I'm, you
Speaker 96
25:39
know, somewhat familiar, and that's the best I can say.
Well, I appreciate your insight on it. I'm glad you're here to answer the questions. Is there anybody else that
would like to speak against the bill, for the bill? Representative Stubblefield, would you like to close for your
bill? I'm closed, Mr. Chairman. Representative Stubblefield has closed for the bill.
Representative Gene, you're recognized. Make a motion due pass. Motion before the committee is due pass. Any discussion? If not, all in favor of the vote, Mr. Blink, you're recognized. I have concerns about this with
Representative Kelley Linck
Unverified
26:31
questions I'd like to answer. I'm not prepared to vote yay
or nay myself at this time. I've heard some questions, and I don't want to vote this bill down, so I think it has good possibilities if the problems exist that I think exist.
well the motion is debatable so you're free to ask any more questions that you'd like to ask
Representative Kelley Linck
Unverified
27:03
Representative Stoublefield would you be willing to come back to us another time with answer of some of these questions that I have
Chair
Unverified
27:11
if you will give me those questions in advance
Representative Kelley Linck
Unverified
27:14
I will be glad to talk with you after this board meeting if you'd be so inclined,
because I'm concerned about that we authorize, first off, a possibly for-profit company. I'm also concerned it sounds like they're
using some sort of system now that we may want to further encourage that they
Chair
Unverified
27:32
use better. But they are using a variety of systems, different sources, multiple sources, that have a wide, you know, inequitable, I mean, there's a lot of ranges here that people shouldn't be having the pain of paying taxes because of the inconsistency in these assessed values.
Okay. Thanks. Representative Collins-Smith, you're recognized. Representative Stubblefield,
Representative Linda Collins-Smith
Unverified
27:58
would you consider pulling the bill down and talking about a couple of those issues, those questions that have been asked, so that we can get a little bit more information? Sure. Thank you. I have
no problem with that. Well, without objection, why don't we do that And just to be fair to you, and so we'll pass over it without objection, Representative Stubblefield, and we'll get some questions answered, you know, that some of them may have.
And you're more than welcome to bring it back Tuesday or Thursday whenever you see fit. Okay. Sounds fine. Thank you.
Okay. That moves us to HB 1684. It's also your bill. Representative Stubblefield, would you like to present that one today? Yes, considering the first three or four that
Chair
Unverified
28:40
went through here rather quickly, I was thinking about pulling this, but I thought it was going to be a little more drawn out than this. This deal is, you know, as a farmer, I've always been sympathetic to farmers
because I know a little bit about farming. I've worked all but the four years I spent at the University of Arkansas. I've been farming, and I know that farmers are a stubborn, independent kind of group of people, and I know other people work hard too, but this bill is to create an exemption for the sales tax on baler twine, net wrap material, and silage wrap used to wrap animal feeds. And you know, I woke up this morning early, and I thought, you know, there's something
else I've got to say. So I wrote down a little scenario, if you'll just bear with me. I want to read it to you. I think I told some of you yesterday, I grew up rather poor like some of you did. I remember when we put carpet in our bathroom, we liked it so well we ran it all the way to the house. So some of you grew up in the same kind of circumstances, but I want you to just listen. I wrote this down this morning. Look ahead. I want you to look ahead with me. Now this is a scenario. Two years from now
and imagine the following. Try to imagine diesel fuel prices at $6 a gallon. Thanks mainly to this conflagration in the Middle East. Try to imagine global food reserves at the lowest levels in history. The U.S. faces unofficial rates in the 12 to 15 percent unemployment range. Inflation is rampant. The U.S. dollar is further weakened. Meanwhile, China, with 20 percent of the world's people and only 7 percent of the irritable land in the world, has money and they have
hundreds of millions of hungry people to feed. So they start to buy up U.S. farmland. And not only do they buy up farmland, but they buy up U.S. processing plants. And then China buys remaining supplies of U.S. grain, shorting our own grain supplies. And you say, well, our federal government would not let this happen. Well, guess what? There's nothing our federal government can do about it because under the free trade rules that were passed years ago. It is illegal for any nation to block food exports if that buyer has the money
to buy them. I read a story the other day in the New York Times about an Ethiopian farmer who was a hydraulic engineer. He was talking about how his country's land and their irrigation water had been taken over by the likes of the Europeans and the Saudis, and they were growing everything from cut flowers to wheat, while these fellow citizens were barely eking out of living. Simply put, sometimes it's free trade predation for our natural resources is not good.
Of course, most of you probably remember just this last January, the United Nations had a committee meeting, and on February the 8th, they issued an emergency level warning about the severe drought that is threatening China's wheat. By the way, China is the leading wheat producer in the world. Representative Stubblefield just had a few kind of looks. We
need to try to keep it more germane in the bill. All right. What I'm saying here is China is
Speaker 119
32:05
importing huge amounts of animal forage,
Chair
Unverified
32:09
and the wrapping material used to wrap up this forage drives up the prices here in this country. And this bill is just brought about to try to give farmers some help. And I realize there's not a large – I broke down this. It's probably $40 to $60 per farmer in Arkansas that bails hay, which is not enough really other than to buy a tank of diesel fuel to run one day
or maybe enough to buy some vaccines to vaccinate the cattle. So it's not going to be a lot, but every little bit helps. The Farm Bureau backs this bill. There is a physical impact. $395,000 in the year 2012. That's basically it. Thank you. Representative
Patterson, you're recognized. I'm sorry. Okay. Representative Love, you're recognized. Motion to the proper time.
Okay. Representative Linderman, you're recognized. Representative Stubblefield, you and I have talked about this, Bill,
Representative Homer Lenderman
Unverified
33:18
and you know I'm 100% behind you, but I understand that one of the problems with the application of this in the past has been that different people had a different interpretation. They would exempt Baylor Twine but wouldn't exempt NetRap and things like that. Is that
Chair
Unverified
33:33
correct? That is correct, and Baylor Twine is exempt if you use it for tomatoes and cotton. But there is an inequability, you know, because you can't use it for animal feeds,
Speaker 119
33:45
and yet it is exempt for tomato crops and cotton crops. So
Representative Homer Lenderman
Unverified
33:50
this bill would basically clarify the code and make it equitable throughout the state.
That's correct. Thank you, sir. Okay. I don't see any more questions. Is there anybody from the audience that would like
to speak for the bill? Against
Speaker 126
34:14
the bill? Mr. Leathers, you're recognized. Speak against the
Speaker 37
34:21
bill. Mr. Steppelfeld has done an excellent job, Mr. Chairman, of explaining the bill.
It does just add to the current farm exemptions those baling twines and the materials used that are not currently exempt. And he gave you the revenue impact, which is a little over $300,000. And I just want to make our standing statement that this was not in the balanced budget that was presented, and make sure that we were consistent in making that among the exemption bills. Thank you.
Okay. Mr. Leathers is speaking, has spoken against the bill.
Would anybody like to speak for the bill? Against
the bill? Okay. Mr. Young, you recognize, speak against the bill. Thank you,
Speaker 129
35:13
Mr. Chairman. I'm Paul Young with the Arkansas Municipal League. I just thought it was appropriate at this time just to reiterate and remind the committee of the Municipal League's longstanding opposition to the expansion of sales tax exemptions just as a matter of the effect on the tax base, the shrinking tax base and tax equity.
And I think a lot of these proposals involving exemptions certainly can make a good case for the entities that are benefited and the activities that might be supported. However, you raise a question, and I've heard these comments from most of this committee about tax equity and treating similar entities the same. And so I just wanted to reiterate our opposition to the expansion of sales tax exemptions. That's all I have to say. Thank you, Mr. Young.
Is there anybody else in the audience who would like to speak for the bill?
Speaker 108
36:15
the bill? Representative Stubblefield, would you like to close for your bill? Yes. Ladies and gentlemen of the committee, whenever you go to
Chair
Unverified
36:21
the country caucus and you go over here to the Capitol Hill and you bite into one of those steaks or some of that roast beef, I want you to think about the years, not months and weeks, but the years of sacrifice and work that went into that, producing that. Our farmers, you can live
without a lot of things. I mean, we can live without the TV cameras and computers, but I haven't found anybody can live without food. And if we don't protect our farmers and do what we can for them, this is a small, small favor to ask. So,
Speaker 27
36:49
yes, I'm closed. What's the player of the committee? Representative
Speaker 131
37:00
Love. I want to make a motion to table this bill for further
consideration. Okay. The motion is to table the bill, which is non-debatable.
All in favor of the motion say
aye. Aye. Any opposed? The motion will be laid on the table and until further notice.
Thank you, Representative Stubblefield. HB 1703, Representative English. Yes, sir. In order to bring it off the table, the motion will have to be made as such, and it
also requires a majority of the quorum vote.
And it is on the agenda. They
stay on the agenda. But it does take a motion and a vote.
Representative Jane English
Unverified
37:47
Representative English, you're recognized. Thank you, Mr. Chairman. I'm Jane English, District 42. And I have with me today Mr. Mark Whitmore with the Association of Arkansas Counties and Sue Lyle, who is the White County tax collector. And basically, this is a bill to amend some statutes relating to the collection, payment, and enforcement of property taxes.
And I thought I would let Mr. Whitmore explain the
Speaker 98
38:21
bill. Mr. Whitmore, you recognize. Thank you, Mr. Chairman. members of the committee, Mark Whitmore, Association of Arkansas County. This is the Association of Arkansas County's package bill. We've had some feedback from citizens that in terms of payment of taxes, current taxes, one section of this bill, section three, provides that the taxpayer currently is under some
rigid requirements about having installment payments at certain times of the year and the taxpayers feedback is that they would prefer to have an opportunity to pay at their convenience in differing amounts on installments. Also, the current law does not provide that a taxpayer can pay their personal property. It's not clear that they can pay their personal property in installments prior to becoming delinquent and so section three of this bill has is to allow the taxpayers to come in at their liberty and pay their
Speaker 96
39:26
current real or personal property taxes rather that's the thrust of that section the first section if we could the way our
Speaker 98
39:38
property tax works is that there's a a lien on the property on the year of the assessment, the third Monday of January, let's say 2011, and they assess your property. That's when the lien is imposed on the property itself. I, Mark Whitmore, I don't actually have a personal obligation. It's to me, but basically
that lien is on the property. And if you don't pay your taxes, you don't sue the property the owner, you have the ability to confiscate the property, and that's the hammer the tax collectors have. It's difficult to explain that to folks when they sell a business. If I were to purchase a business from an individual, they will often remark, well, he owes that tax. Well, they have to deal with that at the time of sale, and this makes it real clear that
The property, and this is the current law, is that when there's a property tax lien, the lien that we were talking about that starts on the third Monday of January, it stays on that property until the taxpayer pays that tax off. And that's what this first section C-1 is attempting to do, is to make that real clear. And keep in mind if you're a tax collector, like Ms. Lyles, They can't pull out five AG opinions and six court cases and make a compelling argument to the taxpayer.
That's the law. So that's what C-1 is doing is taking current law and making it explicit that that lien follows the property around. Mark, I'm
a little confused. I thought that's already the case. It is the case.
Speaker 98
41:20
And what we're trying to do is to make it clear for the taxpayer that if they come in to pay their taxes, we say, folks, here's one little sentence that makes that real clear to you because while it's true that it's the law, it's just too big of a hurdle for us to have the tax collector like Ms. Lyles
when she's dealing with a taxpayer to pull out five AG opinions and four court cases and to make some sort of legal argument. And that's what we're trying to do is
to clarify that on C-1. Let me ask about, okay, I'm sorry. Are we
dealing with this bill solely, are we dealing with personal property taxes or with real estate taxes?
Speaker 96
42:12
It'd be real and personal because the lien in all cases follows the property.
It's a lien on the property. Are we, would this bill change, you know, currently, you know, delinquent real estate taxes have some super lien that trumps mortgage liens. True. Are we doing anything that would put delinquent personal property taxes in that same category?
Speaker 139
42:38
No. So what we're trying to say here is that, for example,
Speaker 98
42:43
if I buy 40 acres from Chairman
Carter, the lien date's still the same. So the priority is exactly where it's always been. It'd be the third Monday of January. And a purchase money mortgage or other mortgages, we're not changing anything other than on that one section making clear that the lien is on the property and it's not to the person. And that's what that sentence, a transfer of the property, the lien remains on the property and the penalties and taxes. And it's just difficult. I think Ms. Lyles could probably explain to you when a taxpayer comes in, either in a
real estate purchase or in a business purchase, the collector has an engaging conversation with the taxpayer having to explain to them that the taxes is on the land. But I don't know if that's a… No, it doesn't. I mean,
that is a concern. I just want to make that crystal clear that that's not the case, because I wouldn't be in favor of
Speaker 98
43:39
that. That's right. And all we're saying is the date of the lien, which is the third Monday of January, and both real and personal, that that doesn't change. And to the extent a purchase money mortgage exceeds it.
And, by the way, we agree with Mr. Tice that on a car, the lien on the title is the one that has priority. And this doesn't have anything to do with a lien on the title of a car. This is just telling the taxpayer that under that section that the lien remains on the property after you transfer property. It seems like a no-brainer, but when you're a taxpayer, you have to, I mean, and a collector, they don't have the ability to pull four or five cases and four or five AG opinions.
How would it work with, you know, you've got the
bona fide purchaser for value. You've got this third party out there. I mean, what
Speaker 136
44:38
would we do in the situation that, you know, in that instance? Okay. What we're referring to, if you're referring to Section 1, lines 30 through 32, that references Section 2636-201, and that is, I'll jump to that, Section 4.
And Section 4 would be in the instance if I bought your business, and it's talking specifically about a purchase of a business or the assets, goods, inventory, or equipment of a business, not in the ordinary course of business. And that's if you'll look at that on page 4, lines 17 through 21. So if
Speaker 98
45:16
I were to purchase either your entire business or all the assets of your business, your inventory, which is in legal terms, that's called a bulk transfer.
If I were to do those things, then what the law is saying is that I owe those taxes.
Speaker 96
45:32
And what happens is that the collector, if I were to
Speaker 98
45:38
purchase a business, they have to have an engagement with the taxpayer to explain that even though, let's say, Mr. Jones owned the business and Mr. Smith bought it, the taxpayer Smith is saying, well, that was Mr. Jones' problem. Well, that's not the way the law works now,
And that's not the way it should work, and we're making it clear that the person that purchased it, because that lien that's on the assets, is going to be responsible for that lien. The other thing that the tax collectors are going to do is take the
property and sell it. MR. I'm sorry I didn't ask you these questions before. MR. Sure. MR.
And I'd hate to get into this right now, but I'm a little worried about the situation where, you know, you buy my boat or, you know, I don't know, there's something out there
where the innocent purchaser has bought something and then at some point in the future and they haven't, and it's not a real estate transaction, there's no good way to go back and see liens and they come back and say, well, you just thought you bought the boat, you know, you owe the, you know, the taxes on it. So how do we
prevent that from happening? Are you telling me that that's not going to happen?
Speaker 145
46:50
Well, that's what we're, our language, and when we say the purchase of a business or business inventory, not in the ordinary course of business. Now, Mr. Chairman,
Speaker 98
46:56
if we need to say we're not, if we need to make clear that we're not
Speaker 96
47:02
talking about title property such as a boat or such as a car, we'd be glad to do that. But the lien still follows that object. But if we need to clarify, we'll be glad to do that if there's any issues there. Well, thanks for asking.
Again, I'm sorry I didn't ask you before. I just clued in a little bit there. Any other
Representative Homer Lenderman
Unverified
47:29
questions? Lenderman? To clarify what you just said on title property, when that thing was licensed or titled, that tax would be paid at that time.
Speaker 98
47:37
Is that correct? And here's the trick. And the AG has said clearly, and we agree with the Attorney General's opinion, that, say, for example, car. The only way you can get a title, get a lien on the car, on the title, is to physically have the title. And the catch, what happens is, and that's one of the mechanisms you all have created that's one of the best tools we've ever had, is that if I purchase Mr. Jones' car, I've got to get the title and I've got to get my tags. And that's the mechanism we use is having to tag and register the vehicle.
and the tax collector doesn't have a lien because they don't have a lien on the title. But you do have to pay the taxes off in order to get your car registered and get your tags. And that's what happens during a transfer. It's extremely acknowledged in that context. And the problem we have is business personal. When somebody buys a business, they go to the tax collector and
Speaker 96
48:37
say, well, that was the seller's problem. And that's not true because the lien, when you buy a business or the inventory, is on the property,
and the purchaser is responsible for it, or the collector can get that inventory.
Representative Homer Lenderman
Unverified
48:51
Okay. To further with what the question here, would not the realtor or the attorney that gave you the title opinion, that's part of their job is to make the buyer and seller both aware of that. Is that correct? And
Speaker 96
49:04
I'll go back to what Chairman Carter was driving at. But in a real estate transaction, the
Speaker 98
49:09
escrow and the taxes are all acknowledged and paid and made clear at the time of the escrow whose responsibilities are for the taxes, and that
the lien does follow the property in a real estate context. And the purpose of this bill is to make it clear to the world, taxpayers, everybody, that the lien follows real and personal property, and in a business context, if somebody purchases of business, that if they don't pay the taxes, that they're going to be responsible for them, the purchaser, that the seller has walked away.
Speaker 96
49:43
And you are correct that a lawyer or people that are prudent, when they buy a liquor store or buy a tractor
Speaker 98
49:51
supply store, they, in due diligence, should be clearly understanding that they have a lien on that property and that they bought it subject to those liens and subject to those obligations, and the seller walks away free. unless they have a specific agreement, because the only thing the collective can do is sell the property. Thank you,
sir. Thank you. Representative Viviano, you're recognized for a
Representative Mark Biviano
Unverified
50:15
question. Thank you, Mr. Chairman. This question is for Mrs. Lyles, who, by the way, is from White County and runs what I believe is the best assessor's office in the state of Arkansas.
She always ensures that all the property I own in white counties is assessed at its maximum value. So I'm doing my part for the state. Mrs. Lyles, can
Speaker 151
50:38
you, from an assessor's office, what impact
Representative Mark Biviano
Unverified
50:41
does this have? What efficiency does this help you with? Can you kind of give us that perspective? Sue Lyles
Speaker 152
50:54
from the White County Tax Collector's Office.
Yes, Representative Viviano, this just gives us some more. The main thing that we're wanting in this is to allow taxpayers to make partial payments at any time in any amount. And the trouble we're having with business personnel is, as Mark said, it sells during the year, so the next year we send out a bill to the Sitco 66 station, and Joe comes in and says, this isn't my bill because I didn't buy it until the middle of the year. You know,
all the stock I had, I bought from him, but it was his stock at the beginning of the year, but I didn't buy it until the middle of the year. And they come in, they want us to split it. Well, charge Joe for half the year, charge this for half. And this is just so we can and notify the local attorneys and local realtors that, look, your purchaser is going to really be penalized if you don't explain to them and collect on this business personal
because it goes with that inventory he's buying, all that stock and cooking equipment, whatever he's bought from them, that this is going to follow that stock and that equipment and And it's to help us to educate them and to get them to take care of this because then neither we're caught in the middle and neither party wants to pay. I sold it. It's not my responsibility. I didn't buy it until the middle of June, so it's not my responsibility. So we kind of get caught in the middle there.
And when you're dealing with business personal, sometimes it's quite a
bit of money. And I would, Ms. Lyles has been very nice to me when I've been up there, so I will second your kind comments. Representative Love, you recognize for a question? Thank you, Mr. Chair. I
Representative Fredrick J. Love
Unverified
52:55
was stepped out, so I came in a little late on the conversation. But I wanted to know, if there's a lien on the property and then the property is sold,
Speaker 96
53:07
why are we not collecting on the lien when the property is sold? The only way we can collect is actually to
Speaker 98
53:22
sell the property. And the fact that they sold it doesn't necessarily trigger the collector to go out and sell the newly purchased Citgo or something. They don't use
Speaker 96
53:31
that mechanism until they're delinquent for some period of time. So the fact that a sale occurred doesn't trigger a
Representative Fredrick J. Love
Unverified
53:37
question. But isn't that the reason why we place the lien on the property so that we can collect it if it's transferred?
Well, if I may, I think the situation where you had a real estate transfer, you know, there's
a deed. And there's got to go through a process or a car title, you get a title. But, you know, if you sell me your, I don't know, I mean, I'm going to blank, but if you sell me a swing set or, I mean, I'm just making something up, you know, there's no title or no way to come in other than a bill of sale. You're going to give it to me.
I'm going to give you money, and we made a deal. And they're out of the, you know, there's no way for
Representative Fredrick J. Love
Unverified
54:23
them to be involved in that transaction. Okay, Mr. Chair. I guess the problem I'm having is that if there's a purchaser and they're unaware, and then the assessors are unaware and the purchaser is unaware, then you're passing the harm on to an innocent person. And I'm just, I don't know if, you know, I'm not saying this is not a good bill or a bad bill,
but I'm just saying that the protection should be to
Speaker 158
54:49
the purchaser of the property and not, you know, to the... If I may explain,
Speaker 98
54:56
since our property taxes began, which would have been 1920s or so, the lien on the
Speaker 96
55:03
property follows the property around. So when I purchase property, real property or personal, it's assessed, not all personal property is assessed, that's the current law.
And actually our attempt, part of our attempt here is to make it so clear to the taxpayer there, that the lien does follow the property, and that just because I purchased a business, a lawnmower shop or a Citgo from somebody, that lien doesn't evaporate. It's there until it's satisfied by payment
Speaker 98
55:31
of the taxes. And so the thrust of what we're trying to do here is to make it explicit that that lien is already the law, but the purchaser doesn't have the ability to avoid paying those taxes,
And the seller doesn't have any – you can't go sue the seller. The only means we have is selling the property. And we don't do that at the
Speaker 96
55:55
time of transfer. We do it at the point of time it becomes so delinquent that the tax collector has to go pursue
it. And that's the current status. Thank you, Mr.
Chair. We do have some people signed up to speak, which may answer some questions if you all are comfortable with that process. Anybody would like to speak for, we'll come back to questions.
Speak for the bill, against the bill, Mr. Charles Miller with the Arkansas Bankers Association
is recognized to speak against the bill. Thank you, Mr. Chairman. I'm Charles Miller with the
Speaker 160
56:36
Arkansas Bankers Association. And first off, I want to apologize to Representative English. I normally wouldn't have done this without talking to her, and I just hadn't had a chance to get to her. The bill was filed, I guess, late last week.
And anyway, I apologize for doing that. Our problem, obviously, is what happens with a piece of property that has a purchase money lien on it, and now the owner of the property is the bank. It's not the individual anymore. And we have a philosophical problem with paying personal property tax, which has absolutely nothing to do with the real estate before we can sell the property.
Mr. Whitmore made reference to an AG's opinion, which may have clarified it, may not, and it's possible that this bill clarifies it. I'm just not certain, but I didn't want to go out, the bill to go out of committee without at least raising that question and having it addressed. One of the other members of the committee mentioned that, you know, the purchaser, the new purchaser of the property, why should he be stuck with that bill? Well, that's a question because he had nothing to do with the debt for which
the lien has been filed. But he's getting the new property. Well, maybe you can argue that, but clearly the bank or the individual that put up the purchase money lien, he has absolutely no relationship to that personal property which the lien has been filed on. MR.
Representative Keith M. Ingram
Unverified
58:13
Charles, will you take a question? Sure. Representative Ingram, you recognize. MR. After hearing this, would the sponsor consider meeting with Mr. Miller and working this out and bringing it back to us?
Because I mean, I've listened to both sides of this and I'm uncertain and I'm uncomfortable about trying to make a decision and a vote on it. And that's certainly up to the sponsor, but I would like to see if they couldn't work it out and come back to us. Motion. MR.
I'm seeing a nod there. Okay. Well, without objection, let's do that, and I think that's a good call. And thank you for all coming. Thank you for coming. Thank you, Mr. Chairman. All right. We'll move down. HB 1720, purpose of Altus?
Pass. 1724, purpose of Altus? Pass. HB 1737, purpose of Ingram? You bet
I'm passing. Yeah, Ingram's pretty good.
All right, HB1757, Representative Link. I am waiting on impact study. Very good, which
reminds me that DF&A asked me to announce that they're a little behind
just from the rush of bills that were filed or being filed here in the last inning to getting
their impact statements out. So the announcement has been made. HB 1760, Representative Summers, pass, 1761, Representative Summers, pass, 1767, Barnett, pass, 1771, Altus, pass, to remind you we have a special order coming up on the 8th
with representative Pernards and also on the 10th with representative Nichols so seeing no other business we shall stand adjourned
Agenda
Call to Order
SB274
SB275
SB276
HB1552
HB1680
HB1684
HB1703
Adjournment
Documents
No documents posted.
Speakers
Speaker 1
Speaker 5
Representative Davy Carter Chair
Unverified
Representative John Burris
Unverified
Representative Uvalde Lindsey
Unverified
Representative Allen Kerr Chair
Unverified
Speaker 21
Speaker 22
Speaker 27
Representative Mark Biviano
Unverified
Speaker 37
Speaker 42
Speaker 45
Representative Bruce Westerman
Unverified
Chair
Unverified
Speaker 62
Representative Larry Cowling
Unverified
Speaker 3
Speaker 72
Representative Kelley Linck
Unverified
Speaker 86
Speaker 90
Speaker 96
Speaker 98
Speaker 99
Speaker 103
Representative Mike Patterson
Unverified
Representative Linda Collins-Smith
Unverified
Speaker 119
Representative Homer Lenderman
Unverified
Speaker 126
Speaker 129
Speaker 108
Speaker 131
Representative Jane English
Unverified
Speaker 139
Speaker 136
Speaker 145
Speaker 151
Speaker 152
Representative Fredrick J. Love
Unverified
Speaker 158
Speaker 160
Representative Keith M. Ingram
Unverified