Arkansas Legislative Council (ALC)
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- October 2, 2026
Speaker 10
2:05
right members if you could go ahead and grab your seat we'll get started right
call on this meeting to order Good morning members.lad to see everybody here. if we could at this time recognizepresentative Les warren for the prayer
Representative Les Warren
Unverified
2:38
Dearly father we thank you so much for this day we especially thank you for the season celebrating the birth
ofrt and fatherther what that means to each one of us we thank you for this incredible state that we get to come and serve we ask that you would guide everything that we do that what we do will be pleasing in your sight y ther we ask that you help us be aware of those less fortunate around us and especially during
this season so that we can look for opportunities to be your hands and your feet. be with us now we pray all these things in Jesus Our member's first thing on the agenda is approval of
Speaker 20
3:28
the minutes from the last meeting I need a motion to adopt the motion the second
all those in favor say aye opposed the ayes have it this time we're going to recognize Do Carlos Silva for
the presentation of the November 2025 revenue report. Doctor Silvia you recognize you
Speaker 24
3:52
Mr Chairman carlossilva bureau of legislative research and today we're representing the November 2025 revenue report that's the fifth month of this fiscal year as we have a gross collections of3.31 billion dollars or58.9
million dollars above our last fiscal year today for those first five months that's 1.8% above those first five months of the last fiscal year as we move down we see the last line here we have a $2.82 billion in net available for distribution there's also $81.2 million above the last first the first ive months of the last fiscal year and there's a3% increase there when compared those two fiscal years as we look into page number 2 we will find the cumulative
deviation from the F andA net general revenue available for distribution forecast and you can see here we moved from 90.5 to108.7 million dollars so we have an increase there above the forecast for the for this month as well still progressing for all the way from our September number from73.9 million dollars. as we move from page number3 and page number4 we're gonna have a general revenue collections and page number5 and above we have
our special revenue collections on in general that's not many movements here other than we have some of those extensions they start showing up on the on this month and when we talk about our what is going on now in the nation and in the state as we start receiving some updates again from from the federal government have to we have the some of the the agencies weren't collecting data and we saw unemployment the nation has
increased s from44 to to46 we also received the data from the CPI has slowed down to true7 for the headline and true for 26 sorry for our core when looking to the state of our Arkansas we have data from September that's what we have at our unemployment3.9% but as you look into more detail that we have seen the number of individuals working has increased by over 22,000 individuals so we're still going to be looking to this we have some a gap on that data like I
have said from the month of October now we have November we start receiving more data for the state of Arkansas and we keep the members updating in the new calendar year.
Thank you Do Silver members any questions Representative
Representative Jim Wooten
Unverified
6:33
Wooot and you're recognized thank you doctor relative to the first page and those corporate income tax refunds
are down and the the individual income tax refunds the last item are down is does that have to do with the change in the filing
dates that what what does this have
Speaker 24
6:56
to do as well is also the percentage change that we have done right so we have changed the rates so now we have to collect less so we're gonna have less as well on those refunds involves
Representative Jim Wooten
Unverified
7:07
the tax cuts and the lake pilings exact sir follow up if I may there's a there's an
awful lot going on into federal level that could have an impact upon us let's take for example and and my question has to do with the forecast relative to it the economic measures of the farmers are receiving $12 billion that's just50 dollars an acre and they need they lost 243 but but that's money coming into the state that's 12 there
there's talk of a 1500 to2,000 dollars per person check coming from the federal government to all of our citizens the president announced the other night $1776 per military person and then we have the tariffs and impact of that and in the last couple of times and I gave you a break last month I wasn't here and didn't ask you the question about the tariffs but are you
taking this money additional if it comes to bear into the consideration in the forecast and how would that impact our economic wellbeing. I can talk about the general I cannot talk about the
Speaker 24
8:31
forecast the forecast from the agency so I I can talk about the agents might wanna talk about that but if you look into the difference between the forecast and on the second page here have $108.7 million above forecast but within the forecast we have $185 million a buffer if you can say
right so a total of $293 million so if you end the fiscal year as of today there's a $293 million above you know of course we have6 months to go but if things continue this this trend that's how much we would have I've realized what
Representative Jim Wooten
Unverified
9:08
it says here but what I'm asking is will this have an economic impact upon the economy of the state in the on the plus side on the good side
but yet with the farmers losing $243 an acre versus getting only50 dollars they're still impacts them but my point being will the will the per person income increased with the $2000 will will what type of impact will this have on our forecast do you know? OK so there's no there's no computation on how the
Speaker 24
9:47
$2000 would impact the state but we we
can expect that to be positive right we have some in the short term some positive things that could happen with within that that would impact this fiscal year yes sir so assuming that money would come out within this fiscal year we have some positive impact here and we expect this to move in a positive direction faster than what we have right now but again assuming that that come in within this fiscal year will you take that into consideration and
Representative Jim Wooten
Unverified
10:15
in the forecast forecast from the agency so we might need to talk to the agent
yes sir but will the agency take that and it should take that into consideration I don't think
Representative Jim Wooten
Unverified
10:31
apologize re ctor hu d son Mr Chairman because the director come forward and morning Mister M meerryr everybody. Jim Hudson
Speaker 44
10:54
secretary DFfa I heard the question you know we're gonna present a revised forecast or an
Speaker 45
10:59
updated forecast I don't know if it'll be any different around February 1st we have to do that in advance of the fiscal session so at this time I really you know can't speculate as to what the next forecast will look like. I will tell you that when we do compute the forecast we look at actuals we look at you know what's actually going to be happening I think it's it can always get a little you know dicey if
you're just paying attention to what's in the headlines because some things just may not come to fruition generally I think at this stage I would say that I'm no less optimistic about what the remainder Fy26 is looking like compared to what the forecast we had for it in May when we prepared the we prepared the last forecast so but if it if it does come
Representative Jim Wooten
Unverified
11:47
to fruition that you will take that into consideration that's a considerable amount of money at
$2000 a person or 1500 and then 1,776 and then the 12 billion our our portion of that it would certainly have a stimulative effect
Speaker 49
12:04
the question be when timing of that would it be hitting in fy 26 or would it be hitting an Fy27 those are things we'd have to look at thank you Mr Secretary and thank you Mr
Representative Jim Wooten
Unverified
12:16
Chairman. thank you gentlemen. appreciate the answers
members any other questions aren't seeing none that takes us
down to item F1 administrative rules and recognizepresentative Matthew shepherd You recognize the administrative rules
Representative Matthew J. Shepherd
Unverified
12:39
subcommittee met on December 18th the subcommittee filed a report from the executive subcommittee concerning the review and approval of an emergency rule. the subcommittee received agency updates on outstanding rulemaking from the 2023 regular session and filed agencies monthly written updates on rulemaking from the 2025 regular session. the
subcommittee accepted the recommendations of the division of elementary and secondary Education concerning the extension and repeal of rules pursuant to Act781 of201 7 and Act65 of221 or 2021 and all rules were reviewed and approved as noted in the report and I move adoption of the report. all right thank you members any questions on this item? aren't seen none need a motion to adopt the report motion
the second 2 con any discussion seeing none all those in favor
say aye opposed the ayes have it that takes us down to item 8 representative excuse me item seven hospitals medicaid and developmental disability study I'm going to recognize Senator Jane English. you recognize
Senator Jane English
Unverified
13:43
him thank you the hospital medicaid and developmental disabilitiesudit subcommittee met Monday to hear testimony on the following items overview of current status of tanf an update on reimbursement rates under the livingving Choices Assisted Living waiver by DHS subcommittee met again on
Thursday to discuss the mint for more summit and the implications of benefit cliffs I move adoption of the report. thank
Chair
Unverified
14:10
you senator members any questions on this
item? seeing none you have a motion to adopt we have a motion the 2nd 2nd any discussion seeing none all those in favor say aye opposed you guys have it lottery oversight reports can be given by Representative justin gonzalez you're recognized the lottery oversight subcommittee met on Monday. Her
Gordon Watkins
Unverified
14:32
testimony regarding the office of Arkansas Lottery Monthly disclosures and directors annual reports Arkansas division of higher Education scholarship recipients reports and received recommendations from the Arkansas academic Challenge scholarship program the subcommittee adopted the annual report and the report is attached a move adoption of the report Members any questions on this item all right seeing none we have a motion. Can I get a second? we
have a second in the discussion seeing none all those say aye opposed the ayes have it
that takes us down to the peer committee senator Desmaine you're recognized thank
Senator Jonathan Dismang
Unverified
15:12
you Mr Chairman on my notes all right the peer subcommittee met on Thursday
December 16th the subcommittee received reports reviewed requests and approved the following various temporary appropriation and infrastructure investment and jobs actct appropriation one item in the report is marked as held C1 a2.5 million dollars fund transfer request by uhnvironal quality for the used tire program another item failed to receive an action that
was F-14 a7 million dollars preparation request by agriculture for the Mamel watershed project or purchase both items have been pulled from consideration by the agency request. I move for adoption of the rest of the report thank you members any questions? right now
we have a motion gonna get a second secondcond right any discussion seeing
none all in the paper sayy aye opposed the ayes have it vi e w committeepresentative
Representative Frances Cavenaugh
Unverified
16:07
Kavanaugh you're recognized thank you Mr Chair. The reviewe subcommittee met on Tuesday and reviewed methods
of finance discretionary grants, one RfQ request and service contracts services contracts and received regular monthly reports. One contract was held pending further information from the agency under out of state contracts, contract number7 for out of state contracts DHS DCFS with evidence change was held until legislative council pending further information and
discussion Mr Chair on Tuesday the subcommittee also received one supplemental agenda item Department of Commerce AEdC discretionary grants which were subsequently referred to full Arkansas legislative co for review today. It is our understanding that there are some changes to the grant allocations and the revised schedule is on your desk. Mr Chair, I move for adoption of the report including review of the DHS contract with evident change in the revised discretionary grant submitted to
legislative council. all right thank you for that report members any
questions? Representative rose you recognize I'd like to make a substitute motion that we
Representative Ryan A. Rose
Unverified
17:17
put that evident change contract separate vote right. hang on to that one second. members any other questions
on the rest of the report? all right seeing none just one moment
Representativehos your motion is to adopt the rest of the report except for the report that concerns evident change
That's correct, Mister Chair. right all right members you've heard the substitute motion we have a second we have
Representative Frances Cavenaugh
Unverified
17:59
a second Can I just for clarification Mr Chair OK, so is the motion that he's doing is he just wants a separate vote on evident by itself that's my understandingpresentative
rose'll let you answer that question if you push your button ro Say again Mr chair Representative Kavanaugh ask
your question if you don't care. p re s ent ative rose are you just
Representative Frances Cavenaugh
Unverified
18:25
asking for a s a separate vote completely on evident change that's correct OK.
so it's just we'll do two different bolts. OK, thank you.
OK members the the as I understand the motion the the there'll be two votes. The first vote will be a motion to adopt the entire report without evident change then we'll take a second vote on whether we want to review or not review evident change. everybody clear with that? re b ence Kavanaugh don't we have to
Representative Frances Cavenaugh
Unverified
19:21
vote on his substitute motion first? no that is
his substitute motion right so the first vote to be clear the first vote we're taking is to review the entire report except for evident change is that clear
anybody have any questions Representative beatty you recognize just a point of
Representative Howard M. Beaty, Jr.
Unverified
19:38
clarification his motion was to have a separate vote. do we not have to approve that motion for a separate vote first before we can proceed to have two votes no sir to have a
separate vote he's got a motion we have
report without evident change and then take another vote a separate
Speaker 98
20:04
vote about evident change that's not what the
Representative Ryan A. Rose
Unverified
20:15
member said p re s ent ative hose you wanna chime in here I defer to you procedurally sir my suggestion was a separate vote for evident change and retain
Speaker 100
20:22
all the rest of the review information in the initial vote yes sir. so that's what I said the first vote would
be to take up a vote on whether we want to approve the entire report without evident change we'll take a
second vote that will decide whether or not we review or not review separately and on its own evident change after his clarification I'm good with that
Representative Howard M. Beaty, Jr.
Unverified
20:43
Mr Chair. OK. thank you all right members so
the vote we're taking again is the entire report to be reviewed without evident change. that's the first vote.bo good with that and we already have a second on that so all those in favor say aye opposed the ayes have it report is adopted with the exception of the portion that contains evident change now his motion would be to take a separate vote
on whether or not we want to review evident change Representative rose is your motion to not review evident change? excuse me sorry my motion
Representative Ryan A. Rose
Unverified
21:20
was just simply for a separate vote but I do have discussion at
the proper time ok thank you Senator Hester you recognized my motion is that
Senator Bart Hester
Unverified
21:30
we do review the contract withentate motion do pass I think that's the same thing as
representative rose is asking to review or not review. so senator hester's motion is to review the contract. Everybody understand that that's the motion we're taking up now we have a motion by Senator Hester to review the evident change contract Do I have a second? we have a second any discussion Representative rose yes sir thank you Mr Chair
Representative Ryan A. Rose
Unverified
22:07
appreciate the the latitude we've discussed this kind of at length over the last couple of AlC meetings in November and December the long and short of it is this this contract is additional scope and expenses to DCfS for new work from this vendor as we discussed in review this vendor has more or less for lack of a better term vertically integrated themselves into DCfs
they recommend and and provide consulting to implement and provide tools we pay them for the consulting we pay them for the tools and then we pay them to grade how the tools function this has been an expansion over the last several years of their scope and our reliance on them they now have 11 employees in the state of Arkansas if you remember the Baxter County case with the 29 missed reports we have discovered since the
division has341 other similar cases eight of those have been referred out and evident change in their practices have been right in the middle of all of this the report's not entirely done my concern is that we should not just keep throwing more money while we're trying to figure out what the root of that issue is. I think thatrector Wright and her capable leadership team can look internally and try and find some of the issues that are causing these problems instead of being completely reliant on an out of state
vendor Representative bentley filed an interim study proposal to investigate the hotline in the call center and has a working group for that I think that's going to reveal a great deal and the final thing I'll say is that when I met with the vendor when we interviewed in committee this week they had said that they want to put their client our state in a position to where we don't need them where we can fire them but when I asked for an answer on an off ramp is there a plan for an off ramp they never would answer it
because there's not a plan for off ramp. The plan is to continue to deeply entrench themselves in DCfS and expand their contracts and their scope so my suggestion to each one of you would be a no vote on this
Speaker 108
24:22
contract. thank you very much Mr Chair. thank youpresentative Representative Kavanaugh you recognized for discussion.
Thank you Mrir although I've always been a
Representative Frances Cavenaugh
Unverified
24:34
proponent that we need to do as much inside the agencies as we
can. This is a problem with the hotline that we've been having now for years and years going into decades. we have lost children because of our inability to run the hotline correctly I do not believe that it is something DCFS can fix internally because DCFS has been part of the issue with the hotline and I think for us to be able to know what the problem is so that representative bentley can move
forward with her study she needs outside eyes looking at what the process is in DCfS and DHS on the hotline. That's what this scope will do. It will actually start doing quality control already on the hotline. They already do the middle and the end but they don't do the beginning. although I'm not a proponent to spend money recklessly as as my record will show over the eight years that evident change even under
their other name. they've only spent 11.6 million and I know I say 11.6 million only. so that's about $1.4 million a year that they've been paid for multiple services in eight years in the scheme of things with DHS's budget and with the other contracts that are in there that's not an exorbitant amount of money for me if they can help us find a way to stop the problems in where ex exist that we
currently have in our hotline the300,000 dollars amendment is worth that because if we can save one child I'm glad to have so spent that300,000 dollars and that's my take on it sir. Thank youpresentativepresentative Wardlaw you recognize Mr Chair I've been out of
Representative Jeff Wardlaw
Unverified
26:30
town all week and I'm awful
slow but I'm trying to read this and it shows total projected here at5.7 million and some change we don't have to get that pacific and under these amendments that representative rose just
referred to as he referred to their relationship. they've only spent 2.3 so I don't know if staff or department can answer that question but it seems like we're on track with the current contract and we're not amending it outside of what we agreed to from the beginning so I I really don't understand the issue somebody could have we're in discussion so I can't get
anybody to the table but I can Re Kavanaugh's been duging pretty deep if she wants to respond to that she's welcome to
and we can ask staff our staff Give me just a second right Representative Wardlaw's staff says that you're reading from the contracts that's also all the information they have as
well so they're reading the same thing you're
reading you made Representative Kavanaugh you good? right.embers any other discussion points right see now and we already have a motion and a second to review the evident change contract all those in favor of reviewing the contract signify by saying aye all those opposed the ayes have it. thank you
members that takes us down to item 14 p re s ent ative
warren personnel. Representative warren push your button please thank you you're recognized thank you Mr
Representative Les Warren
Unverified
28:36
Chairman. personnel subcommittee met on Wednesday, December 17th. and
reviewed three growth pool requests a miscellaneous federal grant and four reports that required no action. The committee also approved item4,
the reassignment of51 positions from the division oforrection to the department of Correction shareredervices for the new recidivism reduction system I'll be glad to answer any questions and move to adopt the report at the proper time right
thank you members any questions Representative Wooten you're recognized thank
Representative Jim Wooten
Unverified
29:09
you Mr Chairman. p re s ent ative warren this has to do with the positions that were approved for the agricultural department
there were three of them I think but my question has to do do you know are we still holding in abeyance Act796 where it covered the those that have been vacant for over 2.5 years are we still holding that hostage if you will relative to how it impacts the benefits of of of employees
Representative Jim Wooten
Unverified
30:05
just a moment s er ative that's uhopPM anddF
Representative Les Warren
Unverified
30:26
andA are the ones that have the oversight on that and they're supposed to be looking at it on a continuous basis and and that's all I can give you on that
Speaker 117
30:39
one so it's DFfa and opm well we passed
Representative Jim Wooten
Unverified
30:45
that law it became an act two sessions ago and now we're holding it in a banance so we still holding it and not enforcing the 2.5 year
that they can't carry forward any position that's vacant for over 2.5 years it has to be relinquished, given up I will have to get you in touch with some other folks that can give you
Representative Les Warren
Unverified
31:12
more details on that that that's all I know on that one thank you chairman thank you Mr Chairman you Senator Irving you recognized thank you Mr Chair. I just quickly wanted to express my
Senator Missy Irvin
Unverified
31:28
appreciation for F12 the attachment I appreciate them addressing that funding issue on behalf of the citizens I represent in Faulkner County all right thank you senator members any other questions on the personnel
report all right seeing now we have a motion can I get a second? We have a second in the discussion seeing none all those who ever say aye opposed the ayes have it that takes us down to item
h 1 This is Arkansas Children's Hospital and UMS Arkansas infant and Child De Review panel this is a we we're going to need a motion to refer this review program to the Senate interim Committee on Children, Youth and the House Committee onagging, Children and Youth and Legislative affairs we have a motion 2nd 2, thank you. any discussion all right seeing none all those in favor sayy aye oppose you ayes have it takes us down to item two This is a review of the
partial equity ownership agreement with the Arkansas Teachers retirementystem and we're getting a motion to file as reviewed
the motion the 2nd 2nd any discussion seeing none all those in the paper say aye oppose the ayes have it that's takes us down to item three this
is department of agg. this is just a report on the 20262027 biennium plan of work for the state of Arkansas water waste disposal and pollution abatement facilities. I need a motion to give
favorable advice motion second Representative ladyman you recognize can we ask questions on this discussion if the department could come down I had a question we get someone down from the ag department good morning
if you would just introduce yourself for the record you can begin with the
answers yeah riallazer director of the naturaltural Resources division
Speaker 128
33:35
at the Arkansas Department of Ac. thank you for being here and I
I'm not opposed to the report I just had a question about I was reading this and I think it's on page 5 where it talks about the sparta and the alluvial aquifers and how that's being pulled down I know that's been a problem for many years but that's very important to northeast Arkansas while all of the delta really you know
rice is one of our biggest exports and that that affects that but I know that you all and a lot of people have worked to convert from groundwater to surface water for irrigation of all crops but specifically rice and I would just wonder how that's going because this has been discussed and worked on for many many years so can you kind of give us an update on how that's going where it's at what progress we've made yeah so I don't have the exact numbers
Speaker 128
34:34
but we have two major tools that we've been using for that conversion one we have a state tax credit program that incentivizes on farm storage such as reservoirs pipelines, things like that so we have that program that's running all the time in the background and then we've forgot the investments that we've made in the two large irrigation projects that if they're fully functional they'll irrigate about500,000 acres with surface water so those are our two big tools that we've been using and then we've got other partners such as NRCS that
also incentivizes folks to convert and so a lot of work going on don't have the exact numbers but there is progress being made well I know some of the
farmers in northeast Arkansas have worked have done this so what's the overall response by farmers in the state to to completing these projects or working with the department yeah I mean overall there's been a good response for that obviously I
Speaker 128
35:28
mean we're trying to market our tax credit program for example so that more folks
are aware of that as a as a tool and a resource we also produce an annual groundwater report each year where we're monitoring the actual groundwater levels and then we pushed that information out and and that's meant to be educational so that folks understand more about the particular issue thank you for that Mr.
Chairman can I ask one more question? Yep. thank you on page 11 we're talking about the the water and wastewater treatment projects
and you have four projects listed there and I know as well as a lot of people that we've got major problems with water treatment and primarily wastewater treatment in municipalities especially small municipalities but what I was wondering and I know we have limited funds but I'm not sure that all of these small towns are aware of what to do or how to do it to get
their problems fixed so if there's a small town out there that that maybe needs a water treatment system or expanded water treatment system what is the procedure I mean where do they go can you just kind of tell us that publicly so that maybe there's people listening that needs to know that you bet so if they're going to apply
Speaker 128
36:58
to us and there's multiple funders of water and wastewater but I would say we're primarily the the main one that folks go to what we ask of them is one that
they submit a water and wastewater advisory committee application and that there's a group of us that all fund water and wastewater that get together once a month to look at all of the needs and make recommendations and this is just a preliminary recommendation so for example it may be that you need to apply to us or that you need to apply to department of commerce or you need to apply to USDA rural development we also asked that they submit a project priority list application and that just allows us to rank projects so
that we understand what are the issues that they're facing what are their needs and then ultimately if if we're the ones that are going to fund them then we're going to ask for a funding application from them just like USDA rural Development or one of the other funders the other thing that I'll say is we we are actively presenting all the time to water wastewater managers association Arkansas municipal League trying to get out there we work with the municipal league regional folks so that
when there are issues locally they know to come to us and then a lot of different other entities across the state we also have technical service providers folks that we work with so for example if a community may not understand how to go all the way through the application process we can call a technical service provider that can go out there and help them.rural Water association would be one of those communities unlimited would be another that can go out and actually walk them through the application process and get all their stuff in.
well I know there's a lot of work that y'all have done a lot of other people in this league and others have
done good work on this but it's it's still very confusing to a small town mayor on where do I go so what would you suggest as their point of contact if they've got an issue I mean should they come to natural resources should they go to the municipal league? what what what would you suggest for their first point of contact would suggest that they come to us because we
Speaker 128
39:10
can we can steer them in the department of bag or
natural resources well we're a division of Department of actct so if they'll come to the naturalsources division they'll contact us I I don't mind giving my business card. and if they contact us we'll get them all the information that they need to apply I have a person on staff that works with communities every day just just trying to help them through that process all right thank you very much thank you Mr
Chair
Unverified
39:38
Chairman. thank youpresentative Senatoreyton you're recognized thank you Mr Chair and I think
Senator John Payton
Unverified
39:45
I'm probably going to want to ask Secretary Hudson to come to the
table right and I may embarrass myself but if I understand this correctly Arkansas Natural Resources Commission's asking to borrow48.5 million dollars they call it issuing bonds and I'm sure that these infrastructure projects are needed and necessary and and probably warranted but my question to Secretary Hudson is why do we
have to borrow the money we've been running surpluses and as a state, why wouldn't we budget this in a way that that we don't have to borrow the money by issuing bonds. it just seems like we're running up our credit card debt instead of paying our way so can you speak to to that and and evidently this is an act that was passed in 2007. which back then I I don't think they were running big surpluses so they probably had a reason to give this borrowing authority
but I guess my question is since Secretaryhudson typed a letter here saying that he doesn't think he'll put an undue hardship on any agency to borrow this money would it put an undue hardship on the state to pay it out of our surpluses Well obviously you know, Jim Etson secretary of DFfa you
Speaker 44
41:10
know that's a policy choice to make between the general assembly and the governor as to how we're going to allocate our
surpluses this is a long standing bonded bonding program as a you know percentage of our overall budget size of the state's budget you know Arkansas is one of the least indebted states in the nation one of the most well reserved states in the nation so this particular bonding program that is a general obligation bond that's very targeted much like you know, highway programme is it does not strain our resources. We do cap the amount of the state's budget
that goes to debt service for this at you know roughly $15 million as I looked at it and we had our folks just kind of do the cash flow analysis and figure out what the payback would be on bonds being issued consistent with historical levels of issuing bonds it would not stretch us it would not impair the state's budget would not take money away from state agencies so we can we can meet the
Speaker 150
42:10
obligations OK and so when you say that Arkansas compared to other
Senator John Payton
Unverified
42:19
states is our debt service our indebtedness is not out of line have you compared that to to specifically states that have a balanced budget amendment because you know I don't see how we can call it a balanced budget when we spend more than we took in and we do it by borrowing money so we we don't spend more than we take in we we
Speaker 45
42:41
don't do that that's not that's not an accurate statement. Well if we issue bonds
Senator John Payton
Unverified
42:49
then it's because we need the cash flow we
Speaker 150
42:54
we issue the bonds in order to be able
Speaker 44
42:56
to provide capital to fund these projects but that's
Senator Jimmy Hickey, Jr
Unverified
43:00
not you know the state's spending money on the issuance of the debt the
Senator John Payton
Unverified
43:04
general obligation bonds well I hope we don't teach our citizens to budget their personal budget that way but thank you right
Speaker 69
43:12
senator Murdock you're recognized thank you chair going back
Senator Reginald Murdock
Unverified
43:16
to the previous representative that that was speaking with
Mrlolazer I'd like to echo what he was saying but also per publicly give credit to you and your organis your entity for your involvement as you state with communities you've been in my district specifically helder west He you come down and met with us on some very publicly and some tough issues so I do did want to say thank you for that and that though there is still the need for those lower capacity situations there's also a presence and I want to thank you for that
thank you senator Representativeladyman you're back in you're recognized thank you Mr. Chairman. Secretaryhudson senatoreyton touched
the thought when you ask his question so if we issue bonds is there a cost to the state for the cost of money you know interest whatever you want to call it the cost of getting that money does the state pay for that
Speaker 158
44:26
the state pays for a portion of that some of these the bond proceeds are used to generate loans to
Speaker 44
44:33
local systems Mr Colazure can speak more to what the relative mix is on that and they pay those loans back then we get obviously money came back in that can go toward the debt service as well but we have allocated you know roughly $15 million of general revenue on a recurring basis is not something new none of this is new this has been going on for for quite some time
Speaker 45
44:57
that we use to both you know pay for the debt service and also issue grants as well for water projects it's a combination of
both. Well I'm not opposed to the bond but my question here is you know if we're if we're borrowing money and paying cost of money and we have a billion dollar surplus why don't we loan our money and get that cost of money into our state accounts we we just passed a bill for an energy bill to allow one of our major energy suppliers to do something
similar to that and they came to us and said that they would save a lot of money by reducing their cost of money well you understand what I'm saying
Senator Jimmy Hickey, Jr
Unverified
45:38
I understand what you're saying you know it's all it's it's all just
Speaker 44
45:42
a question of choices and how you want to use the capital that money that we have in surplus is not just setting idle it is being invested and we're generating rates of return to the state for that you know think in excess of400 million dollars last year so you know I don't I don't know that we're going to necessarily
get that rate of return if we start generating some loans which may very well be impaired loans in some cases because sometimes these folks can't pay the loans back I understand I understand the risk and
I understand the income that we're getting already. I just say that I think we ought to we got to be mindful of that idea we're we're very mindful
Speaker 44
46:20
of how the best utilize the capital and I would say that the creditworthiness of state of Arkansas is exceptional we just had an increase in our rating by Standard and Poor's so I think we get we get
a very attractive rate to borrow for these bonds to issue these bonds under and it is a much better rate
Speaker 45
46:39
than any of these local municipalities could secure on standing on their own well that's
great and I know you're you're right about that because I talked to people from other states and they look
at Arkansas as as a good state somebody that they can follow so and partly
Speaker 45
46:53
because we have those reserves and so by not spending the reserves and having the reserves in place they look at that to assess
Speaker 166
47:00
the adequacy of our capital reserves and to gauge what our creditworthiss is
thank you Mr Secretary appreciate it right one more Senator hickey you're recognized thank you Mr
Speaker 168
47:10
chairir. excuse me my voice is not real good. 11 other thing of course we'd have to pay a a higher interest rate on the bonds senatoreyton does have a a point but we also have origination fees and things to that of issuing those bonds right yes sir there are origination fees with it and underwriting fees that go with it just like
Senator Jimmy Hickey, Jr
Unverified
47:34
any other bond issuance sure so it's really more than
Speaker 168
47:37
the right we also have to take that into account and like I say Senatoreyton does have a good a good thought there that I'm not for sure that and I don't know about loaning the money but you know if we've got the money and we can you know I don't know that it makes a lot of sense for us if we can get if we're not going to get the right that we're putting it out for plus the origination why we wouldn't just look at look at doing this
on most of our bonds so again I I kind of agree withenator Payton on
this right thank you senator. no other questions you guys are excused thanks for coming down.embers we have a motion in a
second. we've gone through this in a all those in favor signify was saying aye opposed yeah just have it noted our members the only thing left on here is a several reports I'll give you a second to take a look at those and see if you have any questions. Senatorhammer you have a
question you'd like to get insurance commissioner to the table please for number4
Senator Kim Hammer
Unverified
48:44
we get someone from insurance department down please.
Chair
Unverified
48:48
you would just introduce yourself for the record
and we'll get started with the questions good morning Daniel Holland Arkansassurance Department Pbm
Speaker 179
49:03
division. good morning to far left over here just a question about yours
Senator Kim Hammer
Unverified
49:09
about your lawyer that you put out is it is it in rule 128 that requires you to collect one year's data in order to provide the report. I'm just refresh my memory where that's a requirement or if that's just something that y'all have decided one year's the time frame well it you know
Speaker 182
49:29
I think rule 128 started where we had reporting for half of a
Speaker 184
49:33
year and then we got reporting for the other half this next round of reports that
we'll get from 2025 after Ru128 had passed after we had issued some corrective action plans to to plants that seem to be deficient and now that's why we're an analyzing the data that we receive in March. I don't think there's anything in the rule that has any kind of requirement on a
Speaker 182
49:59
timeline like that for a certain report is that what you were asking if there's a timeline for a report and a note
Senator Kim Hammer
Unverified
50:06
in your letter that you have already determined that there are some activities that reveal that some of the
Pbms are reimbursing under NADAC. is that correct? that's correctok actions that have been taken against those PBms would include what as of this state so when we
Speaker 184
50:27
get complaints from pharmacies that are against those PBms paying under NADA we issue penalties possibly get consent orders there hasn't been a like a large action under rule in 28 taken it's just enforcement of the NADA statute when we get the
rule 128 reports in March our hope is that those deficient plans have increased their reimbursement rates so we can determine how many plans are actually deficient and then target any kind of administrative action to those plans once we get that info what would you anticipate that the time frame between the
Senator Kim Hammer
Unverified
51:02
end of March when you'll have one year's data will be before you will actually have a across the board application of all the Pb
Speaker 182
51:16
it'll be a shorter time frame than what we've seen so farone by and by everyone I mean
Speaker 184
51:22
health plans and PBms are more familiar with what's happening there's more consensus across the board on what is actually being reported and what Arkansas is looking for here so I don't think it'll be a situation where we need you know six months to a year again after we get the the March data it'll be pretty quick. it's it's
a little bit hard to say how long it takes for our consultants to look through and compare the transactional and reimbursement data but I would imagine you know, once we get the data in March it'll take us two or three months to review that and
Speaker 191
51:59
then we'll have a final number of of deficient plans that are still operating in Arkansas. OK last
Senator Kim Hammer
Unverified
52:05
last couple of quick ones you've got two on the back that are refusing to cooperate. I noticed Nevitas and express strips at least my interpretation of the way your letters read written is that these have objected. Have they
turned over the information at this time as of right now? no
Speaker 182
52:22
soavvitus has turned over some information it's just a portion of the plans that they represent they don't think that Arkansas has jurisdiction to get
Speaker 184
52:30
that reporting. so I've asked our consultants to go ahead and start analyzing what they do have and give me those results while we kind of figure out this self-funded plan problem. for Express Scripts we're working with them.
Speaker 182
52:44
Hofully we don't have to resort to administrative
action or subpoena to get that information I think we'll probably be able to come to a resolution but as of today we have not gotten what we're seeking a thing that prohibits you from suspending their
Senator Kim Hammer
Unverified
52:59
ability to operate because of their lack of cooperation not at this point it hadn't risen to
Speaker 182
53:05
that level. they are cooperating. we just have a disagreement about this one particular issue. OK last thing I'll say is budget hearings are
Senator Kim Hammer
Unverified
53:12
coming up in April. I hope you'd have that report finalized before budget hearings and before the budget
when we had the fiscal session coming up a lot of pharmacies have been strung out waiting for this and I would just encourage you to get that report once you get it. don't make it three months and push it past the fiscal session would be my encouragement and I appreciate it very much. thank you. thanks sir all right senator
Senator Mark Johnson
Unverified
53:40
Mark Johnson you recognized thank you chairir senator hammer covered some of the things I I'm concerned about and one a recent report I won't say the last report you
brought up some information about Pbms that basically just didn't even register with the department and it to call the I was trying to find a word to describe the relationship between the state of Arkansas and the Pbm industry and troubling was the only one I could come up with that I would use in a public forum but I I'm concerned when if if a plumber or a lawyer or somebody went out and tried to have do
business without properly being licensed through the state of Arkansas I like to think that those boards would come down hard on them and it seems at this point that the insurance department has not been real strong with them I I'm just and that troubles me we're not talking about a million dollar industry we're talking about a multibillion dollar industry so the longer we're delayed to Senatorhammer's point the more money these people make off the backs of of the consumers and
the pharmacists in our state so is there some reason why this is take I think the rule 128 went in what 14 months ago 16 months ago I don't know last year it was in 2024 I know that is there any reason why it seems to take this long to do this and when you say they're being cooperative yeah they sit around the table and drag this out over a period of time and while that's going on you know the cash register's running on their
part would there be any way to recoup their ill-gotten gain once a final determination is made that that indeed is ill gotten yes let me let me address the
Speaker 182
55:35
the first part about the unlicensed PBms so from what I know
Speaker 184
55:39
Aidd had never found aPbm that was operating without a license in previous years we found these two in I think it was September of this year
you know we issued notices of public hearing to both of those both of those responded and and we're working on a consent order and you know they're going to pay a penalty for those activities that they conducted while they were unlicensed. we're certainly not going to let that go or not penalize a pbm who's operating in Arkansas without a license under the PbmLA I can, I can assure you that that will not happen and that the very month that we found those Pbms doing that we we started that enforcement action
as far as the the timeline for rule 128 you know some states they they just say all right you know this is what a cost to dispense is going to be here across the board or maybe they limit it to a certain classification of drugs for Medicaid and federally regulated plans Cms does that in Arkansas you know our concern with the passage of rule 128 was making sure that we didn't increase healthcare costs for for Arkansas residents
unnecessarily so to address that we we did it this way and we we look at each individual plan which there are thousands of and then each pbm that those plans hire and then we take in a tremendous amount of data to make that assessment so it's it's a tradeoff right? so if we're gonna keep cost impact or or we're gonna keep that as low as we can we have to do it this way and we have to take in all this data analyze it and then make individual determinations for health plans and Pbms that that process
just inherently takes longer than just saying all right it's you know 1050 across the board cost to dispense but you know, I think the insurance department and this body as well felt that this analysis was the the best way to address the problem without creating unnecessary cost impact to Arkansas residents and and that's what we're doing and it it does take a while and I I certainly understand the importance of this and understand the desire to have this happen quickly. I can
assure you we're working as fast as we can but it it it does take time. well
Senator Mark Johnson
Unverified
58:04
this is an industry that if they don't like what the state of Arkansas does as far as regulating them their answer is to sue us they didn't like the vertical integration band that we put on that was Senator Hammer's bill which I was proud to cosponsor and so when it passed when the governor signed they decided they rather than comply they would sue us so I'm
I'm just not real sympathetic thank you senator for to for an industry that when you say we're sitting at the table we're negotiating this you know if if they come in with clean hands and want to negotiate that's one thing but they don't have clean hands their hands are very dirty on this so I I ask you to do whatever you can both for our local pharmacists and our consumers to expedite what you're doing thank you thank you Mr chairman. all right thank you Senator Murdock thank you chair and a lot of my
Senator Reginald Murdock
Unverified
58:59
concerns were voiced by the previous two senators but just knowing from people that worked on this for many years I'm right here in front of you look right here there you go that's worked on this for many years that it's been a problem and we as a legislature we gave the the teeth the stick to the Aidd to protect us in this situation that the legislature a few sessions ago did that so it's our hope that we would be
expeditious and making sure that the the intended users at the end of the day of this is being affected our our constituents and our small businesses so we really really need that to be taken care of in an expedited fashion as the previous to senators mentioned so we're patient but we're also pushing so we really need help and really need to make sure that these things are taken care of and that they are complying because some of these are just compliance issues and they're just deciding not to do it and
because the the information that you ' re getting will help you determine whether they're playing ball fair which we are constantly being told that they're not so please help us help our citizens thank you thank you thank you Representative Wooten. looks like you're
the last one. thank you thank you Mr
Representative Jim Wooten
Unverified
1:00:22
Chairman. I'm gonna try not to use my coaching
boys but we we've waited and waited and waited
on y'all to do something out there now are we're gonna have to take more action get more stringent do you not have the do you not have the people do you not have the capability do you not have what is the problem they they're yanking our pharmacists around they're yanking our constituents around and we keep asking y'all to help us out and we don't get any help. Now what what what are you what what's the problem? why can't y'all all give us a report
on the number of agencies on the number of Pbms that are creating the problem it's not just limited to the Pbm's
Speaker 182
1:01:11
creating the problem. So rule 128 asks for data from PBms and from plans so we have to incorporate both of those together. I don't there's not necessarily a problem right now with with implementation of rule 128 or with Pbm enforcement actions. Aidd is in we've done more enforcement actions this year than we've done throughout
the history of the PbmLA or any of the Pbm statutes and we're gonna continue to do that and I imagine that's going to grow every year since we've we've kind of revamped everything this year. but the amount of time that this takes is it's just it's part of the rule and it's part of the the way that this rule was passed we want to take in the data before we make these decisions and we want to make sure that our approach is very targeted and doesn't unnecessarily increase costs especially you
know in 2025 where there's a ton of uncertainty and there's just increased costs across the board so we we need to be very exact about how we do this and that's what we're doing as far as what we need we're we're right now we're gonna to hire another attorney to help me. I took over the entire division once our some other employees resigned so once we get that additional help I think our enforcement efforts will at least double probably more
but I don't think that hiring anybody else is going to make this go any faster when it comes to rule 128. this is just kind of what the
Speaker 184
1:02:44
rule requires that's what we're doing and we're trying to do it to the best of our ability. well requires that's what we're doing and we're trying to
Representative Jim Wooten
Unverified
1:02:56
do it to the best of our ability the the question about employees Oklahoma I understand has two times as many people working on it as as we do in Arkansas
maybe34 times the right and and but but my question the next question is if I may Mr Chairman is how how many pbms are we talking about pMBs how many are we talking about well I guess there's there's around70
Speaker 184
1:03:25
that are licensed in Arkansas as far as Pbms that are contracted with health plans that we found paying below NADA I think we're we're talking about7 or 8. I don't have that in front of me but it's that's a
an accurate ballpark but it's really the you know we have to look at the plan and the PbM so it's
Representative Jim Wooten
Unverified
1:03:52
that answer your question the legal res do you have the legal capabilities to be able to yank their chain and get the message to them they they they're dealing they're they're yanking the chain every day on our pharmacists every day delaying payment overcharging them in fees
and that we we had one situation where we find them and they still consistently violate the law yes sir that's that's why can't you yank their chain? why can't you get their attention? Do we do we need to do something from a legal standpoint from a statute standpoint to put to give you all the capability to deal with the situation I I would say we are
Speaker 184
1:04:40
dealing with this situation. it's a it's a problem that's happening across
the country the federal government runs into the same problems that states run into I understand that it's very frustrating and I certainly understand where the pharmacists are coming from. I believe what they tell me and I see that beared out in the complaints that we receive. but we do have to to do this a certain way and and Pbms are they get protection of the laws just like pharmacists do so we have to follow the law and that doesn't it doesn't happen very quickly unfortunately. I understand
where you're coming from and and I certainly want these things to move as fast as they can but there's only so much I can do to speed this this
Representative Jim Wooten
Unverified
1:05:27
these processes up your hairs do you do you have any comment and we've had this conversation going on four years if not longer.
Speaker 209
1:05:37
Jimmy Harris insurance commissioner yespresentative Wootton we hear you and and we are
taking a very careful datadriven approach to make sure that we identify the plans that are actually deficient and take proper action against those plans yes this is very very frustrating. it's frustrating for us it's frustrating for pharmacists it's frustrating for for for patients. I have 10% confidence in the direction that our pbm division is headed
I have 100% confidence in our personnel as late as yesterday afternoon. I was reviewing attorney applications we are actively looking for an additional litigator daniel's a very very good but yes we need help and we're we're going to get help we're going to complete this analysis I understand it's been going on a long time we have another exam going on I
think we're gonna have a really clear picture after the first of the year so I'm I'm looking forward to presenting that to everybody here. thank you thank you Mr Harri. thank thank you sir and thank you Mr Chairman
Representative Jim Wooten
Unverified
1:07:02
thank you members we've got two more in the queue.
those will be the last two for these for this group Representativeladydingman you recognize. thank you chairman
well this may be off base I
hope I'm not but what we're talking about here
but the act I believe said that they they
the pharmacies could not lose money in other words they wouldn't be charged more by the pb pm then they can sell it for when you're doing an analysis on that do you take into account the cost of doing business for the pharmacy. I mean they've got to make if if if I've got a business and I sell a product for what I pay for it, I'm not going to be in business very long and I'm looking at a text I got here yesterday a pharmacy up in my area of the state been in
business for 50 years a family pharmacy they closed the doors yesterday Last year we had a fairly large pharmacy down south Arkansas did the same thing you know he's a parental businesses been around a long time something's going on if they've been in business operating making a profit for 50 years they probably know how to make a profit unless they're restrained by government or regulation so we do need to do this speedily but but I think we need
to make sure that when we're looking at this that we put in the formula what does it cost this pharmacy to dispense this drug that they're buying they need to be you know at least be able to charge for their cost because they're still selling at a loss if their cost is not covered so I just put that out there but and I understand it's a big problem and I think we're probably may be doing better than some other states but we're
not doing good enough and I appreciate what y'all are doing but we need to we need to really
really put a lot of emphasis on getting this done I appreciate that and that that
Speaker 179
1:09:03
is something that we we talk about. I talked to a lot of pharmacists about that we've learned quite a bit about what those costs are in the pharmacy's
Speaker 184
1:09:09
and so that that's certainly something that we have learned about and we we we will consider thank you thank you gentlemen for coming downembers give you just a second. any other questions on any of the rest of the reports
ain't seeing none I'm going to recognize Senator flippo for a point of personal privilege. golly it's my turn
Senator Scott Flippo
Unverified
1:09:32
already feel like I just got the cue you were skipping a few moving so yeah I was gonna have a motion to adjourn but before I do that a point of personal privilege my good friend and seat mates interized made the cardinal mistake of telling me today is his birthday. so what ask you all to join me in extending our best wishes tosenator Rice on his birthday
or as he likes to call it medicare eligibility day. right. happy
birthday senator Remember seeing no other business have a merry Christmas happy holidays we're adjourned
Agenda
A. Call to Order.
B. Roll Call.
C. Approval of the Minutes of the Last Meeting, November 21, 2025
D. Presentation of the November 2025 Revenue Report – Dr. Carlos Silva, Legislative Economist
E. Report of the Executive Subcommittee — Sen. Ben Gilmore, Rep. Les D. Eaves, Co-Chairs
F. Reports of Standing Subcommittees:
G. Reports of Interim or Special Committees: (none)
H. Review of Communications:
I. New Business: (none)
J. New Interim Study Proposals and Interim Resolutions: (none)
K. Business Carried Over: (none)
L. Adjournment.
Documents
Speakers
Speaker 10
Representative Les D. Eaves Chair
Unverified
Representative Les Warren
Unverified
Speaker 20
Speaker 24
Representative Jim Wooten
Unverified
Speaker 44
Speaker 45
Speaker 49
Representative Matthew J. Shepherd
Unverified
Senator Jane English
Unverified
Chair
Unverified
Gordon Watkins
Unverified
Senator Jonathan Dismang
Unverified
Representative Frances Cavenaugh
Unverified
Representative Ryan A. Rose
Unverified
Representative Howard M. Beaty, Jr.
Unverified
Speaker 95
Speaker 98
Speaker 100
Senator Bart Hester
Unverified
Speaker 108
Representative Jeff Wardlaw
Unverified
Speaker 120
Speaker 117
Senator Missy Irvin
Unverified
Representative Jack Ladyman Chair
Unverified
Speaker 128
Senator John Payton
Unverified
Speaker 150
Senator Jimmy Hickey, Jr
Unverified
Speaker 69
Senator Reginald Murdock
Unverified
Speaker 158
Speaker 166
Speaker 168
Senator Kim Hammer
Unverified
Speaker 179
Speaker 182
Speaker 184
Speaker 191
Senator Mark Johnson
Unverified
Speaker 185
Speaker 209
Senator Scott Flippo
Unverified