Revenue & Tax - Senate

Okay members will call the meeting to order apologize or start in just a little late for trying here towards the end to get everything worked around just to kind of put everybody on notice not a hundred percent sure right now we possibly maybe have an revenue tax meeting tomorrow just trying to see if there's a time that we can fit it in and make sure the room is going to be available so anyway if everybody would just kind of make sure that you're kind of watching that so with that the first one that we have on the agenda is S. B. two oh seven. Senator Johnson be prepared the president that when this. Thank you Senator Blake Johnson district twenty one the we have heard this bill the the corporate franchise tax has been. The collected by third party vendor this with the the change would be those fees are collected be collected in the treasury that's what change in the House whenever we move. Okay. As he said member you we've already heard this or anybody have any questions of this. Anyone in the audience will speak for against the bill. You closed I'm close I make a motion to pass okay have a motion motion do pass by Senator Johnson second by Senator pro all in favor say aye opposed Like sign your name your bills passed thank you Sir of the S. B. three fourteen Senator Wallace Europe and I do think you have an amendment is that correct. It's staff does a man was as set out for the membership. You can look like one two Sir. Okay so you're just and co sponsored Sir you can present your name. Mr chairman first senate Dave Wallace District nineteen. The Amendment simply adds a House Cosponsored. Okay is in the this bill is for US still and that is adopted amendments. Okay however motion by Senator call will adopt a minute Senate second by Senator Johnson all in favor say aye opposed Like sign here none the members past you now presenter bill thank you would recognize yourself also. The jury do that I did Sir all right thank you There is a fiscal impact statement with this it is neutral income neutral. Sure this bill simply extends the closing date on qualified still special products manufacturing facility projects. Of the bill has been reviewed by the op of the Arkansas Economic Development Commission. Divination shows that there's neutral benefit or neutral revenue in a positive benefit for the state. US still has over two hundred. Million dollars invested in. Arkansas. The import steel mill specialties. And this will create at least a hundred and fifty jobs and wages of at least seventy five thousand. And once again is going to provide a positive cost benefit to the state of Arkansas. With that I will stand by and answer your questions all right thank you senator Wallace. Members of your this one does so from what if may we have an revenue neutral on this so. any questions. Okay the one from the audience will speak for against the bill. You closer I'm closed. It was will committee center Kroll is makes the motion to do pass Senator pretty was a second all in favor say aye opposed. Your Mr thank you committee members it's best thank you Sir. The Senator Dismang you're going to do this be for nineteen. You're recognized certain all right thank you members for nineteen I just extends. This extends the US special privilege tax on medical marijuana out until July first twenty twenty five. We've been doing this every two years for a while now. Basically revenue neutral instead of a just a small. Programming cost yes to be a gram costs which are exist. Okay members is there any do you have any questions. Anyone from the audience will speak for against the bill. You closing closed thank you senator Johnson you have a motion to pass okay we have a second. Second second by Senator Dismang all in favor say aye. Any opposed. It is passed thank you senator thank you are you going to do. Four thirty four yes Sir but mixes will be senate bill four thirty four scientists man you're recognized thank you Mr chairman currently we have a limit as two hundred fifty employees before you're required to start filing electronically this brings that number down to one twenty five just did some of my own research to make sure that I understood quick books and those programs to file electronically with the state and you know and we but we do in fact still have a large number of people there filing paper returns and I really couldn't explain why that would be the case. Right now DFA is manually keying three hundred thirty three thousand eighty nine that to use each year the number of folks that would be moved in a hundred you know from the two forty nine down to one twenty five that currently filing paper that's tuner twenty four folks are filing paper at this point there are exceptions that they're allowed to ask for a waiver so even if they're on internet Brown whatever may be happening specifically or just bookkeeper that's not willing to kind of move along with the times there are some exceptions that can be made by the FAA of the request and they're pretty pretty forthcoming with giving those exceptions but with that is just trying to clean things up and really take on the burden on staff the hours it takes just to manually enter debate to use any other thing I would tell you that that does lead to human error you cannot help it when you're mainly entering that many items. Okay. Did we have a fiscal impact on that particular one there is. But I don't think they have a programming estimate of eight thousand dollars which you get off wait a minute the number of votes taking to the media in or the other Emanuel I think you're going to get more that savings less restrictive any in other areas just just want members to. With our discussions on what we said about the impact means to resource impact right. Any questions from the committee. Anyone from the audience will speak for against this. You clothes senator I'm closed. The motion do pass by Senator call will we have a second Senator Kroll second all in favor say aye. You opposed and that. Next one is going to be S. before seventy nine yes Cerner's an amendment for that at a house sponsor. Posted on. Thank you. So does this mean you're gonna make a motion to motion dot the amendment that are House sponsors. Motion the second all in favor say aye. Any pose. Okay the amendment is a. Put on there. I'm. Hold on just a. Okay you can continue on. I thank you. All right members we currently kind of I think have at a agreement to fully fund the NCI a project here with you amis currently the medical marijuana privilege tax is being sent to fund that program again we're gonna pay that offer or fully fund fully fund that project so in doing so that frees up these resources one thing I would just remind everyone what we just passes only for two years and so there is no guarantee that whatever happens with these funds can be utilized for you know for instance put in on our in our say is an on going for an ongoing project or extend the cost out of multiple years so with that we've directed that a new restrict reserve fund he created to be used to address students securities and a public health needs the two things that I will tell you that we have identified in the we have general agreement that will be prioritized that is number one that to make up that copayment for the reduced lunches and so there be apportioned used for that not exactly sure on the amount depends on the feds agree to do but it could be as much as six million dollars to fully fund the copayments there and the other is the establishment of the G. in mi program a gradual medical graduate medical. Education program that would be used by all those that are willing to apply and start participating the start up for that is ten million dollars my understanding for two years and after that happens are up and going so again I think it's a great fit for the with these funds are used only having a a sunset or having a sense of two years there would be some additional money that would remain in again that would be up for discussion as long as it's still in that food in security in and public health needs kind of as it's outlined. With that be happy taking questions anybody in the committee have any questions. The one notice will speak for against the bill. You clothes senator I'm closed and what do we have a motion. Senator crow yeah as amended and Senator crow you're your motion is do pass as amended okay we have a motion to have a second. Senator Peyton as second all in favor say aye. You pose. Okay that has passed. And that made me remember one thing not with you Senator Dismang but with Senator Wallace a minute ago we had added a co sponsor whenever the motion was done I don't think it was done as amended to add that co sponsor so if you don't mind a more make up make a motion to expunge that vote and then if you would somebody can come right back and make a motion to just do pass on what's that bill number three what the forty three fourteen so I will make a motion that we expunge vote that we took on a Senate bill three fourteen all in favor say aye opposed okay thank you and. S.. Okay there's motion except three fourteen is amended amended is our second. Second by Senator Petty the motion was made by Senator crow all in favor say aye you pose an thank you all for that. Okay the next one on the. Nicks which may. You want to build. What a. All. Chair senator if you would introduce yourself Jimmy Hickey Arkansas Senate. Your. Recognized to present your bill thank you the members what this is we'll give you a little bit of background information there was an amendment that was passed at one point we're That were the people that put a put all impasse that we would give a I believe it's a three hundred dollar homestead tax credit. So of course as you all know that that's done that's done every year and we have that we have since raised that what we originally done as a legislature had passed I think it was a half cent have seen it to be able to fund that of course as the economy's grown everything else is grown there's been more money coming in and we've raised that and it the first of the session if you all remember we had actually taken it from three seventy five to give a credit back to the constituents of four hundred and twenty five in their homes. Here's here's. The rest of the thing at one point we had done legislation that said that if there was any additional money in that account that what would happen is it will roll over to our long term reserve account we sent change that name of the long term reserve reserve account to a catastrophic reserve account and this is the important part we we pass legislation a couple years ago so that it's always our intent to try to maintain that is a true rainy day top on and what we do at the end of the fiscal year is that we make sure that we are maintaining a twenty percent of our balance in that account. So. What I'm doing is is no longer allowing any additional money to be transferred into this account because we really don't we really don't as far as that account is concerned we don't want to do to put a whole lot of additional money in it because we're maintaining it again for for a rainy day that particular account as the Senator Dismang and worked on we had to by having that money in that particular account we also get to the best rating that we can on our bonds. And as you all know sometimes we even tight if we do You know some of our tax cuts what we'll do if we were to put a trigger on that or what we've done in the past we've actually tied to that account so it and say that if we don't take any money out or if we were to take any money out of it that that would stop the tax cut so it's just it that is just an account now the way that we have a structure that we we want to keep as a place holder if we possibly can we don't want extra money to get there and then people to try to get their fingers in it for lack of better words and and do it the money will be maintained in the property tax relief fund the way that this bill is structured so any of that money that comes in there will sit there is a balance so if we do get any overage we can in the future we can look at still increasing that to that created I've even had some members that you know of discuss will maybe possibly should look at. You know trying to eliminate part of the sales tax it's my understanding that we have to do those and eighth increments so we have to make sure all that cash flows and everything at that time so I hope that's a fair explanation. Attempt to answer any other questions are there any questions by the committee. Ninety. Is there anyone in the audience would like to speak for against the bill. If not you're free to close some closed I appreciate a good vote. Have a DO Pat. But the make model our motion do pass by Senator Kroll. Second by Senator Blake Johnson all those in favor blood to be known by I. Any opposed Like sign. Graduations thank you Sir. Mr. We do that let me do one more than no I'll recognize you if that's okay okay thank you a House bill of fifteen ninety two is all is on the list I don't think that we're going to run this today thanks. If you. Okay skip fifteen twenty three is there anybody here for fifteen twenty three. That's me well. This is the sales organization we can run that it is as small revenue impact that they are not collecting now but man city this is we're not gonna be losing any general revenue but this is a cleanup bill forty FAA so. What have you all with revenue impact on that on that particular one. No losses thirty five thousand thirty five. A job do you members I mean we had said that the we're going trying not to run anything you know that has a substantial revenue impact again this is brought to this but if in a is a more clean up type thing but it does have a revenue impact I hate to say thirty five thousand is not substantial in the scheme of things down here it's a. It is fairly small so I'm okay with that initial object. When we go into that particular one I think we're probably up around our. Top with it. You're recognized center I thank you Mr chairman in in one thing just. These funds are not being collected right now there's not going to be a G. R. hit this is just if we went out and found every band organization or whatever it may be that's got some fundraisers we decided audit them and try to collect their money we might could recoup about thirty five thousand dollars so again we're not this is going to impact our bottom line there is no revenue impact the issue is this came. Came I don't know what's going on but the but but someone we became aware of I think last sessions when we passes initially we're some athletic organization hospital organizations were you know the question whether not they should be paying sales tax whatever it may be on what they were selling it was never really an issue before and so just provide clarification we passed a bill stating that is not have to after that figured out will you know wasn't just them it may be the robotics team or the you know the band group or whatever maybe that's having fundraisers and also as a concession stand whatever and so this is just a strike that word athletics so it's nonprofit youth organization in general so it's everybody understands where we are. You members having questions. Anyone from the audience will speak for against. You will close I am just a close man and one circle back on that thirty five thousand already impact again it would take a lot of effort to go try to find these those contracting down and I can assure you there's not an account you can hire right now for thirty five thousand dollars or if you're going to be it's going to be slim try to find out so with that I I don't see any costs the state I think it's just good government bill and and in large lowers the burden on these folks just trying to do some fundraising for the organization's thank you senator we have a motion. Okay Senator days makes a motion to pass of to have seconds. Senator Patty makes a second all in favor say aye opposed it did pass. This is the way it all right fifteen a to do want to just let's just have a conversation on that and then I recognize you okay we'll set list have a conversation on the H. B. fifteen fifteen ninety two one other Senator Dismang do you kind of want to explain this rule yet and I'm I'm not we're gonna pass over these today you're going to see minimal revenue impact the reality is we've already scored those in the and we have not changed the cap so there's a four million dollar cap on the credits that can be taken in Arkansas whenever it was originally scored we said that there's going to be a four million dollar revenue impact and that was removed for a forecast to say there's too revenue impact the B. double counting that and that's not would be if a saying you'll actually see in in below I don't know if you have the updated revenue impact that the cap has not changed but there may be more people that are able to utilize the credit because of changing the policy for what the credit could be used for so again I'm I don't wanna get in the weeds are several these bills that I have that way that we're not moving the cap all we're doing is changing the policy on what can be you don't or done to to receive the credit or how the credits applied but I think to that point I think Senator Hickey we're gonna come back and try to have a conversation about those zero revenue impact bills. And I'm gonna let you take it from there. So are there any questions everybody understand that how how close to the tampering. Well that I think and what what what is actually transpiring here is we have the old the old the old legislation bill what that point whenever D. F. and they had done the revenue impact whatever that was passed we started factoring in our forecast that it had the potential to to be the for the cap on whatever this one is and whatever the other bills or in this case is four million dollars so in other words from our forecast we've always been allowing for for that. But it may have not been taken so what the FNA Day has done and rightfully so is there just showing that you know what what is actually transpired. Between that and and the current cap which is coming out of forecast already so again we've already. We've already a water board for a for a lack of a better word is just has not been it has not been used but we are trying to show you that it possibly could be used but is not going to affect our forecast in any way shape profession the way that I see it I and I explained a little bit farther if you look in your packet here there's a couple more bills that increase the cap and I will not deny there's a revenue impact for those bills and and I intentionally separated the revenue I'm in the what would have been around revenue impact increase the credits knowing that that may be an issue because I felt we needed to really reestablished the policy And on what the credits Duke's think that's important again when I'm presenting the bill I'll explain to you why I think that the changes that were making to the application the credits and and how it how you're able to take them. You know is better for us as a state policy wise but not in a separate discussion talk about raising the that the caps on the credits. Thank you senator dismaying any other questions Senator Johnson there's a there's a revenue gain to rat through the through the function of the of the. Hiring folks and things in the state correct. So and and we we are not going to do dynamic scoring and we're probably little late in the session really have those discussions I I wish we would we're not just kinda where we are yeah and it I would just tell you most everything that I focused on was how do you create new money coming into the state so for instance I mean the motion picture industry those are predominantly folks that are investing money in Arkansas from out of state historic projects those are even if even if it's an in state guy doing it it creates the trigger of a federal credit of twenty percent again that's new money into the state we're not winning any of that in these bills but I but I understand your point yes thank you. Okay here's the thing we're not presenting the bill I do see that we had someone that was here to speak for it Mr Peterson normally I wouldn't allow that to happen believe me if you're out there you raise your hand okay did you drive a long way to have to speak. Okay do you mind are you are you gonna be open to come back whenever we actually have the presentation of it or would you want to try to go ahead and say a few words now I mean it would be better for us if you wait until we presented it but also since we put it on the agenda I want to make sure that I give you the full. Okay so with this white wait to the end thank you. All right senator Payton you're recognized Sir thank you Mister chair members of this committee just like to draw your attention to Senate bill one thirty three. It's not been moved from the deferred list. It's the used car sales tax the smaller bill that raises are exemption I'm not going to present the bill in committee I'm probably going to make a motion to extracted from committee on the Senate floor in the next day or two if anybody has any questions about it I'd like to hear about that if this committee wants to take it up and here it. Then I'd love to do it in committee first if if we can get it. To the a gender or have a meeting to discuss it that. That would be just fine but I just wanted the committee to look at it draw your attention to it let and know my intentions thank you Senator Payton I do appreciate that just so that the membership knows and everything Senator Payton and I have a good and had a good conversation with that I'm toting that based upon my discussions with you all that you know these larger fiscal impact bills that we were not going to moved to the active agenda totally totally is right if you want to try that on the Senate floor of or if you all want to try to have a overruled me in here that course at your that's your prerogative to so I want everybody to understand that so but again we've had a very cordial of conversation about that and I told him whenever he tries it on the Senate floor I'll be speaking against it so. Senator days you have something a just a a question if if this is the perfect time to have that a pop part of the conversation around it and what we just did here we we took an educated view on a minor impact on one could you help can outlined some of that I it also will have a larger impact would you mind discussing a little bit about that today if the churro indulge me I'd be happy to yes Sir analysts explain the bill or you know talk about it without president of so the exempt current exemption on used cars is any vehicle that the sales price is four thousand dollars or lower it's been that way for the last eight years we know there's been tons of inflation in the car market and it's almost impossible to buy basic transportation for under four thousand dollars yeah we give tax credits to. Steel mills and entertainment industry and things like that these are hard working our Kansans on a tight budget they should be able to buy dependable transportation you can have a dependable employee without them having to wait to get to work is dependable so anyway I've been trying for years to raise that exemption from four thousand to seventy five hundred often moblie to ten thousand is where I think you should be especially with what's happened the last two years with inflation in the car market. The the good news so to speak is that this does have a a revenue impact that significant three to five million dollars depend on what how you read the impact statement but the good news is that's been going down over the eight years that I've been trying to get this passed it continues to go down in revenue costs because there's fewer fewer transactions in that range so the number transactions that would have been under ten thousand dollars six years ago was a bigger revenue impact than it is today because there's fewer transactions in that price range the the Inflation has has moved the bulk of the transactions above ten thousand dollars obviously so you know some of the budget constraints that we have this session that's going on and some of the worries about doing too much on tax cuts is tied to the fact that we have fiscal projections for a year two years down the road but like on this education bill we don't know what's gonna happen you're three four and five some of the other things we've we've done to spend money is going to cost us more in years three four and five the thing about this fiscal impact is years three four five it's going down you know it's not money aye aye Jonathan Dismang was pointing out on his bill it's not money that we would be collecting anyway because those transactions are moving north of the ten thousand dollar mark two years ago we did reduce the rate of tax between four and ten thousand dollars or three point five this bill would eliminate that reduced rate and it would it would exempt every it move the exemption from four thousand up to ten thousand and I think it's important I deal with these people that are on a tight budget. I'll I love the fact that it would help people in the lower income class it may not receive any benefit from our income tax cut that we're hoping to pass here in a few days But the good thing is it's not just targeted to those people anybody can take advantage of it in any. income category you know if if you're sending a child to college or bind the vehicle for for somebody in the family of. You may be tax exempt under ten thousand dollars so prized if you have any questions I'll try to answer just one quick follow ups are paid thank you It represented district on the border borderlines I'm aware of the transactions were were people purchase purchase behavior is cross state lines on on laws like these of G. do you have a pulse on some or bordering states on where their or their laws are on on this no I'm I'm sorry I don't have that data I thought you were going to the yeah. If they bite out of state and bring it in state they start those taxes I was returning a pressing decision was being made by a by state law that they have or we have bye for now if the resident Arkansas they can't Dodge the Arkansas Tax by going across state lines thank you your question. Right again don't want to get a whole lot and to the bill but senator Patty. Okay well no you go ahead I mean I want to give Senator Payton since he's a member of this committee you know Foles so if you if you want to that's fine assistance from. For my own sake so. Currently at four thousand if you buy a vehicle at five thousand you don't get to four thousand if it automatically eliminates that completely or do you get four thousand of the five thousand as an exemption so the exemption for every transaction that has a sale price of four thousand or less if it's four thousand and one dollar you paid the three point five rate on the four thousand one dollars then when you get ten thousand dollars it goes to six point five. Okay again members of this is just one of those things up not saying that this one and every other one on this list and the House list or not if not probably all honorable type things is just as a revenue tax revenue tax has to operate a little bit different because any and everybody wants to probably do any and every tax cut at some point we have to try to prioritize and I think you know that you know this body is a trying to focus on on you know some of the. A some of the things that we've already passed and then try to try to see if we can focus on the income tax cut so that's where we're at anybody else have anything. All right members I do appreciate you in with that were adjourned.