Revenue & Tax - Senate

Your introduce yourself and then you're recognized to present your bill damn Vaught District eighty seven so this is a it's a it's house bill eleven seventy two sorry Sir. It's revenue neutral yes I. You. Okay. Find it. It's a big chicken composter basically and it's a tumbler and it tumbles chickens until they become what we would use for fertilizer out on our farm. It wasn't designated as farm equipment even though it can't be used for anything else I mean if you saw it it's a big roller that tumbles and it can't be I mean it's truly farm equipment so and I think that the. D. F. and I would have said that it doesn't Something about. Food I can't remember how you put it Mr call but anyway it. It is truly a piece back a Quitman and I appreciate a good vote. Okay there any questions from the committee. Everybody is looked is quite a bit does a anybody from the audience will speak for the bill. Senator Blake Johnson so. Was this something that was not allowed by the FNA Kerr yes Sir I think it's a. And oversight on their part that they thought it could be used for something different but the budget deal we're a review uses checking composter for that's all I know it can be used for Sir thank you. But may I weigh in I think that thing just so that the members understand this because I've had some discussion on it in the beginning whatever all this was first going on different I had actually or some other people and went down there and they had said that it was exempt or whatever then within the agency or whatever and I hope I'm saying all this right within the agency somebody did an audit and they they kind of question do because it's my understanding it needed to be food and fiber of course after that to after that to. Product did you can is a the composed of course then that all whenever you're in that that large of a business and you've got all that then that that's actually the is used for that purpose to the reason there's no revenue impact is because those exemptions were in place so there's not a revenue impact because we haven't been collecting collecting any money because there hadn't been the sale so what this is doing is kind of getting ahead of the thing and just so that the legislature is of making the statement that this is under farm machinery and equipment yes Sir I hope that explains it is hoped that was okay yes Sir thank you. Senator Payton that doesn't mind just wanna verify in this only applies if the person behind the composter is in the business of raising livestock and poultry I would I wouldn't think you would need it for anything else that I do understand though if your heart is it would also do theirs regardless with the needed for anything else I think real specifies yes I did you have to be in the business of production of livestock poultry. So yes thank you senator these give question Sir thank you Mister chair and and for the committee to I I do want to disclose I do work from the poultry industry and let that be on on the record but but echoing what you're clarification this is for sure a farm equipment use is is used for supply chain and is re re circulated throughout the process sure and we're terrifying this for two years in a which was their original thought process anyways my understanding yes. Yes anyone notice will speak for the bill you want to speak against the bill. Of. The bill please close was will the committee motion to pass we got a motion do pass by Senator diseases or second. Second by Senator Dismang all in favor say aye hi you opposed thank you thank you thank you. Okay members the next one is house bill eighteen twenty four representative Beatty if you don't mind going to the end of the table and introducing yourself and at that time you'll be recognized for to present your bill. Thank you Mr chairman members of the committee representative Howard Beatty District ninety five today I'm here to present house bill sixteen twenty four IST amend the law concerning projects eligible for income tax credit for surface water conversion under the water resource conservation development incentives that and include projects in Chico county. Last session we work to enhance the water conservation and development tax credit program which helps landowners make investments primarily in water use conservation one of the many improvements made was the expansion of the land area eligible for some of the tax credits we explain expanded larger credits for critical groundwater areas to include counties contiguous the dose designated as critical groundwater areas. while this was great for counties contiguous it unfortunately left out one important County she go County. And we feel Chicot County should be included for many reasons hi Pat have a Back in twenty twenty. when elected with the redistricting I represented parts of actually part of parts of Drew County. But with redistricting I now have actually and she co County some represent the interests of of of my County if you look at this map it'll show you the the shaded gray portion are all the counties that were added was just an omission that she go County so this bill is to address that include Chico county in that those designations with that I'll close entertain questions. Thank you representive Senator Blake Johnson you're recognized so just self serving real review maybe I would say this is self serving bill I think it'll help many many many many residents of chic okay on thank you Sir. Thank you. That he said thank you. You have a question Senator Pitsch yes please you're recognized thank you Mr. So I guess can you. A little more specific and narrow down how does it help many many many residents a Chicot County well my inclusion and allowing the the the the folks to take advantage of the tax credits it would help those folks in and DFA prepared a impact statement and this is neutral. That's what makes it hard for me to understand how it helps many many residents and they can take an income tax credit and it's revenue neutral. I'm not just going from the impact statement I did not prepare the impact statement so I can speak on that but maybe someone from the F. and they would be a concurrent sentence your concerns if. In the end the here's the thing we need to get we need to get the answer to that question if I say this wrong please come up here this is much like the other ones we have the current legislation in place with a cap in there and the caps not changing. So if the caps not changing there's not going to be a revenue impact because it's already been put into put in our forecast from the previous legislation if we would increase the caps there would have been now whether or not those those are being used I don't know but again that is already factored in Senator Dismang is has explained that on a couple of his bills career. Anything else Senator Payton on the ballots all our thank you Sir anyone else have any questions. Anyone from the audience when the Speaker. For against the bill. Your clothes I'm close I appreciate the help and assistance of the chairman and with that I'm close to and I would appreciate a good vote all right what's will the committee. Senate is my makes motion do pass Senator Blake Johnson makes a second any discussion. Seeing none all in favor say aye opposed. Regulations is passed thank you Mr chairman thank you Committee and if you want to stay there I think you have the next one to I believe you have a house bill. Ten forty five yes Sir if you would recognize yourself again for the record and then your you can start hi thank you Mr chairman members of the committee I representative Howard Beatty District ninety five today I'm here to present house bill ten forty five the bill is to enhance economic competitiveness by phasing out throwback rule this bill would adopt one major corporate tax reform to make the state of Arkansas more competitive by shifting the tax burden away from jobs and investments here in the state of Arkansas repealing the throwback rule make Arkansas more attractive to manufacturers and wholesalers by not taxing income from sales shipped to other states about half the states do not have the roll back rules. Right now many businesses face an income tax penalty to locate in the state of Arkansas the throwback rule states that sales from a facility in Arkansas or source back to Arkansas or thrown back if the taxpayer is not subject to income tax in the destination state this increases Arkansas apportionment factor in the Arkansas tax burden on these businesses manufacturers wholesalers and online retailers are often protected from income tax and the destination state by the United States Public Law but the effect is to turn the sourcing back to the facility and by doing that we tax jobs and investments made here in the state of Arkansas there's also a special rule that state that sales to the federal government our source back to the origin facility where they're manufactured as a great problem for our defense industry here in Arkansas. Strong manufacturing states have been repealing their throwback rules Missouri are Alabama Indiana have all repeal their throwback rules within the past decade the I. sixty five I. seventy five me fax recorder in the south Music Midwest have no throwback rules. Repealing this throwback helps the parts of Arkansas that rely primarily on industrial and distribution jobs. During the twenty seventeen twenty eighteen tax reform task force chaired by Senator Dismang this was a a priority and identified as something that we can address and we have there's been a lot of work between twenty seventeen twenty eighteen when that report came out and now this bill would phase out throwback repeal over seven years. Approximately I think seventy four million dollars when you look at the the impact and this is the best bang for the Buck to encourage jobs and investments in the state of Arkansas. Got one one of the we received a a letter from the council on state taxation and and they sent us a letter endorsing this bill and they also had a statement read you know their policy statement reflecting throwback provisions that kind of sums up the intent and and what we're looking at on on this bill that throwback law seeks to seek to require companies to pay tax in one state on income that another state has chosen not to tax or is legally prohibited from to are unable to tax companies tax liability in one state should not be measured by its tax in another state throwback rule is also discourage investment in the state such rules must be adopted must not be adopted and must be repealed and that's what we're trying to do today with that I'll close no later to any questions okay just just of the members know this is the bill that was previously disclosed of course we're doing the individual in the corporate center Dismang run and then as we told you all this was going to be the separate bills so this is that separate bill that we discussed. whatever day that was so. Are there any questions and in regards to this to this legislation. Senator days this one it's maybe just a curiosity. Where did or what's the background on why seven years. On the face phases well the seven years what we what we could work with from budgetary and and looking at the numbers that that was that we were given instead of the seventy four million dollar hit one year this was I guess a concession take to get this bill for us to get it get it passed it sends a message these manufacturers are looking to locate the state I mean again maybe self serving but in my district we're looking at several projects this is a priority with all the folks that we talked to on economic development there locating here they're they're not grass roots manufacturing come to the state these folks have operations in other states are in other countries that are looking to locate in Arkansas and throwback accounts for eight to nine percent of their total corporate tax burden these folks are looking at this and they're saying Hey you know these other states or neighboring they don't have that some of the other states were competing with they don't have it so when it comes down to it that eight or nine percent makes a huge decision and puts us in a disadvantage in the state of Arkansas so thank you for that question they are ready. Any other questions I'm I would say that we have a representative eight ACT commerce that may would like to speak on the record. Just wait just are you sure you'll be speaking for here in just a moment let me just back or any other any other questions from the committee so we going to get that out of the way. If you will come for you we recognize Sir. You're speaking for the bill. I have to take advantage of these guys when they're available. If you recognize yourself sure Tucker bracken's Department commerce thank you Mr chair committee don't have anything to add substantively representative may cover the bill really well just wanted to come and speak and support our office is supportive of the bill and as well as the governor's office I think this is a great thing for economic development in the state for new projects and an existing projects that want to expand and it's going to make us more competitive with a couple of our direct economic development competitors and order in state so. Happy to take any questions any questions. Senator Petty you're recognized. This comment made at a number of times but I've heard that this is the single most discussed issue when you are looking at future growth on economic development projects in Arkansas is that true or at least in the top one or two that's my understanding senator penny of it I've been with commerce long enough to go back and and know about all those conversations but I know this is top of mind with a lot of these companies looking to expand or or movement Arkansas for sure. Any other questions. Thank you Sir thank you very by an audience that would that would like to speak against this bill. Anyone will speak against it. Anyone else will speak for. We have rabies of care today of state James. Vaigai recognizing my. You'd recognize yourself and and brandies are present Arkansas state chamber of commerce I'm I can only say a man the representative Beatty's excellent presentation of the. Purpose and the results from the impact of the bill it's a major consideration in any manufacturing or do you see that distribution center that's. Selecting a site and we hear about it especially these days from our defense contractor plants and businesses in south central Arkansas this is a bogey for them in competing against other plants within their corporate structure for instance Lockheed Martin is always in competition with Marietta Georgia in fort worth Texas on any major. Capital investment and. It's a burden for a minute it It costume opportunities in this is something that would be a major impact on the industrial sector in Arkansas where urgent urgent and would appreciate a good vote on any members have any questions Mr. Thank you Sir thank you. You want against. Are your clothes are you closed I would just be a closing I would just like to thank the leadership in the Senate and the house and and and the governor's office for support endorsing this bill and getting is where we are now a lot of people that worked on this in the past and and I'm very happy that that we get to this point that this committee can endorse and and send this bill to the Senate floor and we sent to the governor for signing I thank you chairman thank you senator Dismang I'm closed thank you Sir what will the committee should. Okay I have a motion by Senator Blake Johnson I have a second by Senator Petty your any other discussion on the motion. All in favor say aye hi any opposed. Graduation thank you Mr chairman thank you committee members we have one other item of business. Yes. Okay members as you all know what we've been trying to do is is anything that didn't have a fiscal impact to put that put that owner active agenda there was one that we had on deferred. And again I'll need voted for if you all want to do this is house bill seventeen nineteen give me just a second to look at it. Yes Sir it's by representative Lundstrum and senator Kroll. Again there's not there's zero fiscal impact on the thing. So we need to make a motion to allow this to be on the active agenda and to be heard today. The rule. Okay we've got a we've got a motion to do that we're gonna sit we are motion by Senator Blake Johnson got a second by Senator Payton all in favor say aye. Any oppose. Hearing none of that past Senator Dismang is my understanding that you're going to present the bill if you recognize yourself and thank Mister chairman if we need any help I think it's pretty straightforward particular finally saving you are just so This Is Senator Jonathan Dismang. it clarifies that there is no tax on the service of electronic prescription claims as is and as is the case with other prescriptions so just clarification there's no revenue impact not being taxed at the moment. Any any questions on this exciting. You want the audience was before the bill against the bill. Your clothes. I'm closed will of committee. Senator Blake Johnson makes a motion to pass Senator days make second any discussion all in favor say aye any oppose graduations. Okay members that's all that we have on our list this is this is my understanding whenever we go into session today. Of course there's a lot of bills that have to be read across the desk that will get referred to the Committee our staff is going to be watching that in if there's Bills without fiscal impact we're going to put those on that on there and we're gonna have an hour that we're we're going to adjourn before in betweens while we're in session to come back in here so if if there are or bills of that nature and again we need to see what's read across if there's bills of that nature then we will have and will have a revenue tax meeting. That's for the public also. And with that or any other thing