Insurance & Commerce- House

Thank you Mr you're welcome and you're recognized to present your bill thank you this members this is a very simple straightforward bill probably the simplest one we have before secession hopefully up all this does is establish that a property owner has the right to repair his own property. Okay thank questions thank you for that presentation members of the committee to have any questions or if the richest Richardson thank you Mr change so that he can do that already they can't repair there and repairing many municipalities the pass ordinances and rules that that prohibit somebody from doing repairs to their property that they that may not be their primary residence did not know that thank you yes Sir. Represent feeling you're recognized. When you when you save a password to me by repair I thought you can always impair your property going to get a permit Senate Senate to a repair and it I mean that that in many municipalities that would only be true if for your primary residence so say I own my house and the house next door and then the house next door that was not my primary residence I'm probably precluded from making any repairs necessary that that might require some sort of license or permit or any of that stuff. Any any represent rate you're recognized. Representative why might this looks like a good bill make. With respect to repairing your own property Senate take your vehicle for instance are there any arbitrary government regulations that would prevent you from repairing your own vehicle if it broke down not that I'm aware of okay doesn't it seem odd to you that that same extension of your ability to repair your own property would apply with extra would not extend to. Other property owned no absolutely okay thank you. Thank you Roger Ferguson you're recognized. Thank you I guess I think you brought this bill before it might concerning is you're not talking about the home you live in this is saying like if you had properties you are rich you are flipping are you had an apartment complex you owned or any of that he wouldn't be required to use license contractors to do that is that right it's does not delve into what requires a license it it just it says of the bill says or right to repair it so I'm not talking about going in and doing. Actual work or anything like that that would fall under a different set of rules and and just to be clear I've never brought a bill like this at all. But but say you owned an apartment complex you you wouldn't you could use unlicensed people to go in and do plumbing or if you had a sewer lines not knowing my could use myself to go in and saw that when I ran out but you would not be licensed you correct. Thank you rationalised remember you're recognized yes I'm who pays the insurance on your property of others okay so you would be doing the pair repairs so if you screw it up you're paying the insurance you're paying for the repair you'd have to pay for somebody else to come in correct yes ma'am so. What's the difference. Agree thank you. Okay any other questions by the committee. If not we do have someone signed up to speak against the bill. If you would come to the table in addition so for the record. Thank you sharing committee my name is Lenny Richmond on legal counsel for the Arkansas Municipal League. we've heard just some concerns from some cities about the breadth of this bill it's written very generic language in and placed in the odd position of the code we think that it would strip away a lot of the permitting powers that cities use to enforce the health and safety codes you know we we need to take a look and make sure people are complying with those ahead of time but. Otherwise there's not much more to add to it. And if there's any questions I'd be happy to answer them thank you for testimony represent building you're recognized thank you Mr so so what is the problem or question so what is the problem now. I have a a red house somewhere else that then the repairs because my problem with the red house. And I'm required to get a permit to go in and repair. That red house so what's the I mean I'm I'm I'm trying to understand the bill as I was trying to understand the bill. Yeah I I would say that's a bit beyond me I'm I'm not a code enforcer I apologize for that okay in mass my question. The chairman I'm sorry what I guess I'm I ask my question I thought he was there to ask okay let's let's just keep moving forward questions. Yes absolutely represent Womack you're recognized this does not remove any permitting requirements at all Mr building. Okay. Thank. I believe next in the queue Reserve Richardson you are recognized thank you Mr chair so you said that you you've got people that are opposed to this bill because of permitting but representative will make you said it doesn't impact the permitting peace so why would they be oppose. With this other than just reduction of funds from permits to people can do themselves yes when we read the bill we we don't see mentions of permits and that it is written in very broad terms so taking a skeptical look at it we we think it may impact permitting okay thank you. Represent brown you're recognized. Thank you Mr chair and that's part of my question so your bill wouldn't ship preclude. A a of a property owner from getting any required permits for like certain work that has to be done by a licensed plumber a licensed electrician as long as it doesn't require a license to do certain work is that in my interpreting this correctly. And yes I'm alone yes absolutely okay it. It could impact those things like for example the ceiling fan that I through that's a common rental problem issues ceiling fan goes out in a lot of municipalities technically you have to hire a licensed electrician to fix that. And I have heard through you know representative Gazaway the bill about the tennis rackets I actually had a landlord say to me you know if they didn't make me paid to get eighty five dollars an hour to come over there and fix that it may hold a simpler to keep this stuff fixed and that's where the idea for this really was born and were in and I have experience with real property myself so it makes total sense to me I know exactly what he's talking about if. You know the truth is if I buy a rental property is an investment so I wanted in good repair but the math also has to work you know and and wine the world will not make it simpler for people to keep their property in good repair follow up. Director you're you're recognized okay so I know that like certain I thought that you know changing out your ceiling fan was did not require electrical license but if you have to run wire from the box or whatever that thing is called outside that has all your switches of. That requires illustration allies selects a don't think you have a correct understanding okay so. Thank you. Representative Alan you're recognized. Thank you Mr chairman let's go back to this ceiling fan for example If. You change the field fan in the house if for some unknown reason it calls a far couple days later. Where is the liability with the insurance company. Actually. Pay for what they require you to mail actually questioned why did you have a licensed electricians to do. Yeah I read so I ask the question because I'm I'm actually a contractor and been in contracting business for better than twenty two years. And so that's what I'm asking you that where where is the liability sure that that's a great question I think it's still lies with whoever it would previously because since you have experience you know that in changing that ceiling fan out there's really nothing I can do to cause a fire if the electrical system is installed properly then your breakers going to prevent that is this first millisecond there's a problem. So I'm not I'm you know what there's nothing in this bill about wiring or structural stuff or new or redo it's it's just granting me the right to keep my property in good repair which you know repair seems pretty simple to me would be a Tollette or a a fan or a light fixture of of last week's the you know those are all common things that happen in rural properties so if you if you own an apartment complex. mobile unit with this bill apply to apartment complexes to. I would think so yes Sir okay so as to a term and I'm not trying to. Trying this But this way of bills storm and I'm just asking the question maybe you and I still have some of the questions off off of record so what I do I talk to you about that later thank you. Thank you represent Alan represent Hodges you're recognized for a question thank you Mr and the Review rollback of problems looked over a light bill like you with very short probably should look it over prior to coming but my question is do it it it it just referring to the property owner or can any unlicensed persons do repairs to that kind of a two questions do repair than if their dollar amount cap as to the amount of work you can do to the property no Sir there is no dollar amount cap and the bill references a property owner yes the owner yes or okay. Thank you representative filling your record your bill you're good okay. Okay. Okay we have no further questions we do have someone signed up to speak on behalf of the bill Paul Calvert is policy okay I'm in favor of what you're. Thanks for that At a meeting that night negatively. Ninety stretch. The representative lawmakers no one else on the on the bill would you like to close for your bill I will real just real briefly because on the end of your time to do this I try to make this bill incredibly simple and straightforward it just says that the problem the person it's liable that owns it that's invested there has the right to repair it and keep it in good shape there's nothing. Nothing more I'm not shooting for a for a sneaky shot here anyway it is pretty short and simple and I would sincerely appreciate a good vote on this okay thank you represent Womack as close for his bill **** Lundstrum I believe you'd first asked to make a motion at the proper time would you like to proceed with the motion yes do pass please okay we have a motion do pass that is inappropriate motion to have any debate or discussion on the motion. Okay saying none all in favor of the motion do pass say aye. Any opposed no. Congratulations you have passed H. B. eighteen oh five Richard Womack thank you Mr Committee. David and. Yeah thirteen. Representive rates my understanding you would like to present on behalf virgin Dotson said correct. For this will. Committee I believe there's a handout that will be passed out now and all of that get passed out before we start the presentation. I thank. Representative Bray we can go and get started fee not to present okay receivership that Mister chairman I've been here three months and was wondering when the freshman hazing would start and then at seven thirty this morning representative Dotson called and asked me to run this bill so I guess that's now but at any rate House Bill thirteen eighty. This bill would repeal the Arkansas legal insurance act this is basically I've spoken with the insurance department prior to the meeting this is basically obsolete licensing language but doesn't really serve much purpose since nineteen ninety eight there's been thirty three states that do have never even implemented a license of this nature and in the last six years eight more states they did have this license have repealed it SO currently we're one of only eight states that has it there's no testing required for the license there's no training that's required the only thing there is with it is a fee so it's really basically just a license for licensing sake and the supplies to. People who are selling subscription based legal services identity theft services things like that a lot of small businesses who don't have the capacity to hire you know a full HR team or or legal team will use these kind of subscription based services for you know they'll pay a small fee per month and then they'll utilize it as needed for things like There were questions related to H. R. basic forms and documents contracts agreements non competes various legal forms like that so with that I the be happy to try and answer any questions. Thank you representive are there any questions by the committee. Okay saying none. Representative ray would you like to close for your bill I'm close to Porsche and I would move to pass thank you we have a motion to pass representative ray that's a proper motions in a discussion on the motion saying none all in favor say aye. Any opposed nay. Graduation you've passed your bill thank you Committee. Representative Clowney it's my understanding you're going to present SP three eight one. Thank you Mr chair with your permission can I bring up Brad Cozart from the AC I see please yes. If you would just introduce yourself and your title for the record please. Thank you Mr Brad consort director the Arkansas crime information center. Thank you representative Connie may proceed. Thank you good morning committee hopefully I will take up less of your time this morning than I did on Monday this bill is from Senator Elliot. Senator Elliot noticed in the interim she was getting a lot of calls from folks in her district who were either being terminated from their jobs or were unable to get a job based on incorrect background check information that was circulating on commercial websites there's no cause of action currently under Arkansas law for people who have such incorrect information posted about them as you can imagine it does really serve a detrimental role in their lives to keep them from getting employment and keeping it this bill creates a cause of action for people who have incorrect information published it's important to note that the burden falls on the person about whom the information has been published so they have to contact the commercial website that has published the incorrect information ask for it to be taken down that website would that have five business days to do so and only after refusing to do so after those five days with the person have a cause of action Happy to answer any questions about how the process would work but just sort of very briefly at that point the person would would file a lawsuit would go to circuit court and would have to prove by a preponderance of the evidence that the information was in fact in correct Mr because or with the crime information center testified in on the Senate side about how big of a problem this is so I'm just going to turn it over to him so he can tell us a little bit about what he sees from his end thank you Mr because or you're recognized thank you Mister senator Elliott called me or contact me while back and ask me about this issue and it was really a problem as it is and a chassis we get at least one call per week from somebody who's just mad as hell at us for releasing information that should not have been released in a background check thinking it's our our fault we check our records to make sure we have made a mistake and I records are correct so we find out then that their employer they be the loss of job or they were not hired because the employer to save a few Bucks I assumed instead of doing an official state background check that's initiated at the state police that would release the correct information they're going to these internet companies which of course we do not have all the correct information certainly don't maintain it in the correct manner they they may pick up the fact somebody's arrest and conviction but they don't ever delete their files when somebody had a record sealed so they're releasing for the most part sealed information that would not be disposable under Arkansas law of return clowning center correct there is no cause of action against them At this point so there's no means you know when when this happens all we can tell the people who call us is if you would get your employer to go back and do an official state background check the state police the correct record will show up but then you're trying to unring the bell because they've already seen the information it would have been disclosed to begin with. Thank you for your testimony any questions by the committee represent ray you're recognized President Clinton there was a bill I think that we passed earlier this session that representative Collins and that seems similar to this the water the do you know what the differences are and how they're connected or not connected sure it is it is similar his bill had to do specifically with mugshots and and mugshots are part of the criminal background check that's a totally separate process so so related but different. Thank you any further questions by the committee. Saying none of the quantity last close your bill. I'm close I make a motion to pass please I have a motion to pass on the floor that is inappropriate motion any discussion on the motion. Sing none all in favor say aye. He opposed nay graduation your bill is passed thank you Committee. I do not see representive Miller on H. B. sixteen seventy two is anyone here for him okay. Trying to move through the ones that might go a little quicker and I also do not see represent Bentley He's. You're recognized. Sorry. As. Rep jim Sullivan were you we will take your bill and now. This is committed as SP four seventy five. Okay. And committee we will be there will be some handouts being passed out but represent Sullivan you can go ahead and you can go and proceed with your testimony. One. Senator Dan Sullivan district twenty one would you mind if representative great join me at the table no not at all thank you. how willing she was will bring. I think we know you would go ahead and but in today's or self if you would please members of passed out of the hand out here if you would you can kind of read that if you don't mind as I kind of present the bill. This bill our first of all. Has a time segment on at the the formula to distribute ad for money and I don't know how many of you know much about it I didn't even know who they were until this section or heard the name but found out quite a bit about distributing money and they they actually distribute tens of thousands of dollars that turn in your communities into tens of thousands and hundreds of thousands of dollars there are really three. This is under the economic development Under Secretary Preston and they work in conjunction for the most part with federal housing programs and administer multiple programs. Among them are the innovation grants acceleration grants venture capital this bill doesn't address those three would it does address is low interest loans a four percent housing tax credit and nine percent housing tax credit and is the nine percent taxing House credit that is most competitive. When I got involved was contacted by a local developer for whatever you here folks I didn't know the developer it never contributed to my campaign didn't know the guy it is called me up and said there's a problem so I started to investigate looked at the website called a the several people up who maintain the website. Investigated after a of some of you may remember a committee meeting last Secretary Preston and therefore I request you may have gotten this it came through committee but this shows how much money was distributed by county by ad for a and a E. D. C. economic development this one particular to add five where the money went I think there's about a hundred and fifty pages all combined in that so one through that data. called secretary Preston talked to and forgive me if I don't get the titles right but I think the president of Advil is Mr Scroggins talk Mr Scroggins about how the money was distributed about the program because there are some inequities and if you look at your hand out you can see I think on the second page of that hand out. It shows distribution by congressional district. Rachel district one Sure it shows first of the population. Which is important and then it shows the distribution and table be it shows the distribution. By congressional district and I'm sure all of you know where you live so that's how the money is distributed that formula came about and I'm sure they'll have testimony in a few minutes three four years ago they changed the formula so when you hear from testimony that my district received an inordinate amount that was before the change in the formula so now the formula has been changed that reflect is reflected in this handout and this was done by a complaint by developers who felt they were treated unjustly by the formula that the board put together. They hired an attorney. He's going to put this complaint together and it was filed with the federal treasury I thank. So adopted secretary Preston I talk with Mr Scroggins and said guys yet is there a way you can take care of this distribution issue without legislation I do not want to run legislation and I didn't hear back from them there is no change in the formula talk to my the developer I'd talk with talk to him a couple of times he attended board meetings I listened in on several board meetings I had a calm do it who is at a board meeting in a member of the board asking questions on my behalf things just didn't change. You that what this bill does. Are those three things. Once it distributes the dollars in an equitable manner through it takes the total tax tax credits distributed them by congressional district equally if you don't use it you lose it so we're not going to hold back money from our economy we're going to put it in the economy so if you don't apply you lose it one of the problems you'll hear is people don't apply folks they don't apply because they're not going to get it they haven't gotten it for several years and the cost is at least five to six thousand dollars to apply so why would people continue to apply if they're not gonna get the money so one this money distributes the dollars in an equitable manner to the board as a political entity. They distribute our constituents dollars we should have a say so this bill allows the house and the Senate and the governor to have people appointments again it's your money yeah I have a say on who's on those boards. We have many boards and I'm not necessarily making this accusation here but many of our boards have more power than the legislature you know we take the money and kept in taxes we collected and we give it out to these boards to then distributed and there's very little oversight and how that money is distributed that's just a plain fact. so what is the bill do you again I tried meeting with the president about for a I had a conversation with the chair of the board the other night hi I have to change formulas that change didn't happen. yard in a calm conversation just the other night it was I was asked the question do I favor regional distribution are distribution by geographic geography I said absolutely use our money we just want a chance to use our money first and if we don't use it then I'm all fine for put you know for moving on. Again just a critical point the formula changed their when the formula changed the distribution changed so far district got a whole lot of money ten years ago five years ago so be it but they change that formula on a fairly regular basis that's all I'm saying is let's change the formula again to include geographic distribution I've also made the promised before the committee in the Senate that in two years that this doesn't work will change of formula again I just want something to change to help our people. Our invest our own money. We try to wind this up and take a few questions you see in the complaint that was filed again re council one important thing And reconstituting the board reconstituting the board only says on J. on December thirty first this board ends on January first the new board takes over but they can be the same people there's nothing in the bill that says you have to kick everybody off well you do have to kick everybody off but there's nothing that prevents them from being put back on and then they would there so I took a drop for terms to in four years but it does give the house in the Senate and the governor equal appointments. I will represent a grade you have any comments. Thank you representative gray District sixty tape the only thing I'd like to add some of the questions that I've heard I asked about well what happens if we don't spend all the money in congressional district one or T. what happens to that money and I just want to reiterate its its says in the bill in each section that we're addressing that to to give an allocation year personal enough allocations for that one district that they can be reallocated to another district so no tax credits no money sitting on the table it can be used. Well I'll say this and wrapping up when I found out these activities were available venture capital several of the low interest loans to tax credits the acceleration I immediately met with a issue and our community I've met with three or four bankers I've met with innovation people in our area technology people other developers. Folks we're not blaming anyone but ourselves for our district not getting money it's awful we've not organized we've not gotten put in our best foot forward to do this so we recognize that there are things we need to do and we're going to do them in our district we just want for shot at keeping that money locally and by the way I've talked a lot of mayors from your district I haven't talked to one that isn't for this I thank you here the Municipal League speak to that later and the association of Arkansas counties is supportive also although they haven't had a board meeting their leadership is very supportive of and they said it's just a simple bill it does what it says. Thank you Mr chairman glad take any questions thank you senator for your presentation would have numerous numerous pre put people in the queue if the first number of your first. Yeah a new may not know this what specifically changed in the formula that bias the formula toward the third district. I don't know if it necessary by as to the third district but there are some rent what what the actual rent is and what the and other to other folks will testify be probably more accurate but there's a gap and what the poor can afford and what the cost of the radius so there's a gap in there and those that qualify have the largest gap then qualify first so that is essentially what sets up the standard far that and although we have gaps in northeast Arkansas and over in West Memphis it apparently is not as big as the gap in other parts of the state. Yeah I think I understand the formula gives you points for what the rental radius compared to what the project is going to charge and we rented that problem with housing all the time our appraisals we have trouble developing selling new houses because our appraisal rate is so low so yeah I think I think I understand so we're not getting points because our regular rental rates aren't high enough to make that gap significant in America get their yes okay thank you. Thank you resent brown you're recognized. Thank you Mr chair Senator Solomon I'm looking at the charts and trying to digest this information as quickly as I can does this. I have been contacted about this and it was my understanding that you were asking for all the money that comes to the State of Arkansas to be divided equally before the between the four districts and One of my concerns when I heard that without you know a lot of information was that we have our pop you know population is moving in Arkansas it's leaving some areas and going to others like Central Arkansas north northwest Arkansas so I would assume that you would have a higher population of low income individuals in those areas a. How do what what do you what is supply of intent thanks thank you there's a chart on there I think it is a back in the back that talks about the the poverty rate in the state but that they're pretty equal that it's on page ten of thirteen. On the back there. The average maximum debt there's some poverty information back there rate or number scanning rate or number of individuals in the property Well I don't know I don't have the number of. The. I don't have the answer to that question but the easiest way to divide this is by congressional district those are all equal in population is absolutely true that they are moving from rule to urban however congressional districts are pretty much equal. Matter factor that list that numbers in this chart that's that's the most equitable way of dividing the money up and when you talk about money coming in is actually our money. The federal we're getting a federal tax credit but it's our money also that were distributing and they're taking the money out of your districts to move to other districts. I thank you are to get first shot at a whether it's federal or state money it's still your money you paid federal taxes you paid state taxes on that money comes back you'll have the first shot at it that's with all the bill does thank you appreciate the explanation thank you represent Allen you're recognized. Thank you Mr chairman although all this is that will the knees may not be equal and one of the things that that that concerns me is that when I went apple with a fork or is the put in place it was designed to stimulate growth. And poverty areas. And since that time a lot of money has gone up to the northwest Arkansas. When there is really a lot of growth going on in Northwest Arkansas now terms like hell in the Mariana and down in the bill the those those poor counties are not reaping the benefits of this program and then if you talk about taking the money is split equally. We're going to do those people them and those parts of the country of this service. How will you stand that because of my their money's leaving now. They got their their all in district one. They received ten percent of the money. This is let me to Mr Mr someone from after that can address this concern involvement. We do have people here I don't know if we want to. Hello for the finishing our questions with with represent Sullivan and and then. What about your Manser representative Allan just want yeah I met with the rule hospital association of the day people are flooding out there you've got some down there you know of them and when we take development money which this is then that hurts that causes people to leave you with they told me their biggest need was their biggest need was a laundry. If not technology the biggest thing was a laundry in this bill it sets up a low interest loan guarantee that someone can come to that area open up a business for the guaranteed I think two hundred thousand dollar loan and they can start up of a start up business like that to keep people employment start jobs it is economic development and right now district one. Doesn't of they don't qualify for it just because of the gaps that are created. Thank you but the stark about the appointments right now who makes appointments off the board the board I thought the government then the point people to the board for a yes if the question is to appoint some of the board the governor appoints all of them if the question is who makes the the rules and makes the formula C. after board so. Right now the governor appoints all board of directors correct correct so what we want to do now is take the appointments out of the governor's hand and we want to do what we want the General Assembly that the is that correct on a given to you I will give forty you. So in other words is going to the General Assembly yes some of the photos actually go to the Speaker of which you are part of the that body and can have some input there yes okay thanks thank you for clarification thank her for the interest of al I want to say that we have someone from at this signed up to speak so you can address that question thank you when you yes thank you resident ray I believe your next. Okay thank you Mr chairman what first two quick questions one went went to the for what year did the formula change I don't know it's it's been I think the lawsuit mentions it starts in twenty eighteen so I'm going to send it started shortly there before okay maybe maybe add fold able to answer that question when they come to the table second second question is. If I like I like the idea of giving the General Assembly more input on appointments I think that is a step in the right direction the other part with allocating the funds by congressional district wouldn't we want the decisions to be made based on merit rather than geography. What I don't think it's necessarily a binary choice thank you can do both the matter of fact in the in the Q. A. P. program and this is from the. From the national housing. Thor national health resource center effective elements of state qualified allocation plans this is an with the national people reference it's not in our state plan but it's in the national recommendations and one of their preferences. Matter of fact the very first preference they give is for geographic preference. So it absolutely should be a part of the plan but it's not ours okay what what what what was that guidance from. One thing resource center. Which does in H. C. housing policy guide so this is the guide under which our. program set. This is the National Guard and it says elements of an effective state qualified allocation plan so that is a subset of our campus a subset of what's going on here this is for housing so it's not it is possible to have geography and need to fix factored into our formula doesn't matter of fact when I talk with the chair of the board the other night it got it got down to shoot he asked me do I think geography should be a part of the job it's our money. And the people that are poor my district are just a sports the people in Northwest Arkansas and their houses and just as much needed spares the need may be greater but we've got poor people that need them also. Thank you. Thank you resent Boyd you're recognized. Actually represented rate is that. Representative Hodges your next live was ray asking nothing my question more you to toward that end with the great read the read my question thank you represent Richardson your next. Thank you so get a couple questions that were posed to me one of them is. Why are we trying to legislate requirements for awarding tax credits outside of the qualified application plan process. Well as I just demonstrated it's not outside this is a qualified application process this is a national plan under which hours state plan falls the national plan as I just read calls for geographic. and has a preference. It calls for geographic preferences this is a state plan that the national plan under which ours is so I think it's well within our purview to grant that. Okay following Mr yes you're recognized yeah earlier you mentioned of that in your area that you guys took full responsibility for you guys not being awarded some of those funds so if you think so because if you saying that do you think now fix in those. Problems that you guys had would you now be in a better position to receive more those funds thank you for that question and I was particular referencing the acceleration grant standardization grants and venture capital those are the ones we never applied for we applied for these and didn't receive them I give you a good example we have peco foods in our peak of they produce a feed for animals bigo one and two in a higher several hundred new employees expand their up in a small town in northeast Arkansas we had a developer who wanted to build that housing ten million dollar project applied to and when you fill the application out he didn't even apply because it would have cost a lot of money to apply if you knew by filling the data you never apply for another developer in Jonesborough we had a big tornado by heard about wiped out a bunch of houses you want to build a ten million dollar project in Jonesborough it even apply it been dropped not qualified three year sentence so if you take just those two projects and only the nine percent tax credit that's twenty million dollars a year we're fixing going to your for without getting that that's eighty million dollars that's not including the other programs so these private projects are critically important to our community but but you didn't get him because they didn't apply the cost about ten thousand to apply and when you fill out the application you can see you just you can add the point service representative Ferguson said you can add the points up and you know you don't you will qualify so why would a business who has been throughout the night previously why would they spend ten thousand dollars filling out out an application with a no they won't qualify that is the as part of the same from your district he per I have people mean this lawsuit came from people around the state. To realize that they can't qualify if not people that are met it's people that think there there's justification for changing the formula to include a geographic component. Thank you. Reserve eleven you are recognized for a question thank you thank you Mr Senator Solomon just said something just made a lot on my head so you references Q. A. P.. So. reviews that who refuse that process to determine if there are any qualities on where these awards are going out and. How often is it reviewed because like you said earlier. If you look back five years district one did get a larger amount but if you look at a three year window so how often is that reviewed and who does that review yeah I'm I'm gonna guess we do and it's one of those things we vote on our radar. And because I've never looked into it I don't know what out for us I didn't know there was uh I went to their website to research it that's a great question and so the answer your question is I did. Due to the application but there's no governing by me this is I'm sure there is a do it well they have to may be able to answer that I'm not familiar with who that section it's Under Secretary Preston so secretary Preston is ultimately responsible for reviewing that program there's an apple board after chairman and have a president and the next I think there's another board and then it goes up to a secretary Preston and I had a conversation with secretary Preston the Secretary Preston said in a meeting with me he said yes we need to take another look at this okay thank you thank you Mr thank you I do not believe we have any further questions for Senator Solomon we might want to move forward represent Allen the questions for math I believe Seth men's with the first to speak for at the. Speaking against the bill. If you would please introduce yourself for the record and your name and title. Thank you Mr chair my name is Seth mims and I'm the chairman of the housing review committee on the board of directors at. And I would like to first help answers the the main question is seems to be on the table and then I have a few things I'd like to say and of course you tell me how you want to run the meeting Mister chair but the formula that Senator Solomon is talking about is that Q. A. P. the qualified allocation plan and the IRS says that every state has to create a qualified application plan that helps dictate how the funds will be awarded because why because it's a competitive system these tax credits are extremely valuable. It's free money this is a it's amazing program but because it's free money there's a whole lot of people that want to and so many many people apply that don't get approved every year in fact you know twenty five thirty percent is all that ever gets approved so you know if you got. Three out of five people are going to go home upset because they didn't win an award so it's very competitive and because it's free money it's also pretty easy for developers there's good developers and that was just like anything but this program is very easy for bad developers to take advantage of so we wanted to address that through our Q. A. P. at first the board of directors is who reviews the committee to set security and it's something that we can do every year. We'd love to infer to just work so perfectly every time that it never needed any tweaking but because the needs of the state change over time in the world in general changes over time you have to continue to tweak so we wanted to help eliminate abuse of the program and so we set a few things in motion and one of those here's what you want to know is called the rental rate impact the rental rate impact was a tool that we devised to help make sure that these dollars these federal income tax a federal low income housing tax dollars we're going into that to to benefit the needs of the people that need the housing not to help developers get bigger airplanes so when we devise a rental rate impact what that does is it says the lower that rent is compared to the market rate meaning developers willing to make less money. Meeting ten it can get a better deal. It's been less than he gets that developer will get here she will get more points in the scoring so that Renteria impact. From twenty eighteen as it had an unintended consequence of going to places where the rents were so much higher like notice Arkansas little rock a Jones were also qualifies under impact they they have pain of France but we don't want them to go to one corner OR one adjusted gross areas we understand that spread those taxpayers from the state is incredibly important and what I've learned in my six years in this role chair is that skews me I'm not the best of the Speaker. But I am passionate. This these tax credits they they they kinda Evan flow as you try to spread them around the state into trying to send them exactly twenty five percent to each corner every year is not appropriate because needs change what if we had a philanthropic family that wanted to do some good in the delta and they said Hey we'll do this but we need you to provide this housing what we were going to send some extra dollars down there that next year we would want to reflect that in our queue A. P. or if there's a natural disaster somewhere and the tornado takes out thirty percent of the houses in Texarkana we want to be able to address that so flexibility is very important and I'm here to assure you that nobody on this board wants or is trying to send these tax credits to the third district we just want to send where they need to go so with that was another question I needed answered Mr Speaker before I start talking I don't know how to respond to that. It it it hi. If you want okay I'm trying to be quick if you would like what we have people sign up now to take questions you want to finish a brief statement and take questions or you want to take questions now I'm I'm ready for questions represent Ferguson you're recognized. Yeah and we had talked and I guess that maybe when we talk but didn't fully understand the of the formula process and they had dramatically it was changed to really disadvantage a place like West Memphis and Marion we're if you're looking at apartment rents for West Memphis you look at price five hundred dollars a month for a two bedroom apartment and there's a severe lack of housing I can tell you when we put an apartment up for rent it's gone in three days so it would be very difficult in a place like West Memphis. To the present a formula that got the reinstate and significantly enough below the market value to qualify for these tax credits thank you do you see what I mean absolutely so I mean it to represent celebrates point they would be asked there's no sense to me sir spending five or ten thousand dollars applying for something if that read it ratio is going to be a significant part of the formula and we we need housing desperate later and I guess I'm trying to understand why you would add that significant portion to the formula which he knew would have to disadvantaged for areas that we did not know that and thank you for the question because that we have you know since we seen that happen over the last couple of years we realize we have to change that and so this year we we we we address the Q. A. P. every year that'll be coming up here late spring early summer and we have already decided that you know talking with staff that we want to remove the threshold requirement of rental rate impact because it's having an unintended consequence of going to areas with the rents are higher so that's again a tweak that we get to make to fix that and make sure that we're having an equitable distribution over time now you can never really look at just a two or three year snapshot it to judge a program to to judge the effectiveness you have to look at a larger sample of time and that that's what these charges are right here in front of you. You can take any three this chart right here first page. This is showing where the low income housing tax credits were allocated between twenty thirteen twenty fourteen and twenty fifteen so another three year snapshot and you can see then that the first district was getting over half of the credits and and the force combined with the first or to most rural districts were getting eighty one percent so sometimes. They get a larger share and if it went that way for ten years in a row that wouldn't be fair either but it moves around and it. My goodness well you're recognized for followers of yeah and I guess my concern is if you're you know changing the formula have influenced is that by a. Political decisions you know any big businesses influence on yeah we need to build this project in this area we want to change the formula to advantage us not with this board ma'am. Thank you represent Lowery you are recognized. Yes thank you let me follow up on that the last line of questioning about the potential political decisions what is the make up of the board the members including you are developers is that correct well there's only to developers on the board okay yes Sir we have a someone who specializes in social services we have the economic development economic economic development director from. From a. Northeast Arkansas Newport and we have a gentleman who has a is is an accountant the account his whole life we've got an attorney I could keep going but what I think is interesting for your question Sir is that is an eleven member board right now so there's four districts so. To get equal distribution of those is we we we have that there there three people from the fourth district there's three people from the first district there's three people from the third district but only to from the second district and and that's just because it's an eleven member board. If if it was a twelve member board we have another person from the second district and it would be but is is equal as it can get with an eleven member board okay follows you're recognized and I appreciate your passion and you were going through and giving us information about the other board members what what issue haven't you I I'm a real estate developer we develop market rate mixed use communities meaning it they're not affordable they're kind of the opposite but my background is affordable housing hi it primarily in what part of the state are you developing I develop and only in Fayetteville Bentonville okay right. and you feel like the formula is is I mean I hear hear you saying that the formula gets tweaked and all of that but you feel like that that tweaking does not amount to putting a thumb on the scale to make sure that it goes one way or the other as far as distribution across the state the them on a scale is just trying to keep it equal that that move right there was about trying to. Help the people that live in the projects get a lower rent that's all that was a sincere attempt to take the money and put it in the pocket of the occupant. Okay all right thank you very much yes Sir thank you I have a question it represent rate kind of kind of touched on this could you address he I believe the friend is merit versus geography meaning you know how much merit Sir project has verses distributed equally in the G. R. Fink you just give expand on that or let let me hear your opinion on that yes Sir will the most important thing is that the the the we want to projects to be spread around the state because every single town in the state has a housing for a housing problem it's bad everywhere and so the intention to do that which you don't want to do is ever incentivized projects that are not going to be financially feasible over the long term you want to make sure it's a solid project and you also want to make sure that the quality of the project is high enough that it's is going to be good for those children that get to live there some developers because you can really deliver a very low in product if if all you care about the return and we want people that want to do more than that and that's that's what we do in our company is. But. So the merit versus geography thing is it what it's easier for developers to get a poor project approved if they go deny a poor quality project approved if they go to a more two to more rural district that doesn't have many applications or as many. And they know that and so that's the intentional I think that would be a big advantage to them. So we we want good projects all around the state but merit is very important okay thank you worsen Lester you're recognized for a question. Thank you I've been following this board obviously because I'm a landlord and I want to see good quality projects I've been concerned about some of the cost issues that have happened in the past and I'm glad this board's been doing its job can you tell me about some of the past issues when you came on board that you all had to clean up what the cost per unit that have happened on some of the past projects and you have cleaned up. Yes Matter fact we had a meeting on Monday of the housing if you Committee where we talked about making several. I H. exciting changes about the way that we're gonna you know incentivize folks educate folks but what I've seen in the past what was happening a lot when I got there was a developer my phone you know he he would charges full developer fee which is fifteen percent slot market rate is for by the way I've never done a low income housing tax credit dealing never plan to that's not my business I'm here to serve and I'm here to lend my expertise in multi family deal structures and multi family project execution to help to help this mission of helping folks get a fair shake in housing. so what was happening a lot when I got there was a developer would charges full developer fee and then he was on the architecture firm and he would charge a full architecture fee even though he's been the exact same thing that we funded the last round just in another place and then he would also be the contractor and he would charge the full contractor fee and then the other is also less issues of a developer maybe by an materials at one price and then selling to the job at a higher price lots of those things were happening and and we what happened was when we made it harder for that to happen a lot of developers got mad and because you were getting in the way their free money and so that's where that's where I believe the most of this sentiment is actually coming from is a disgruntled developers. Thank you I'm concerned about that too. Thank you saying no further questions appreciate your testimony Mr Menem's I believe next we have Sir I never gonna say what I want to say. He said a lot of it okay go ahead I'm sorry I was trying to accommodate. Okay please understand. Your first page shows House sometimes it goes more one area than another I don't think that anyone was trying to politically hook up the first district I think it just happened that way and and that three year period but certainly they they got the lion's share the next page is what daca Mr Sullivan is talking about over the last three years shows allocation and yes forty five percent went to the third and we don't want to see that either we're looking for the equal allocation OR is equal as possible if you look at the next page you can see now let's look at ten years now shot because that really helps us understand over time how the program is working and you can see that the first in the force that you rule districts there got fifty seven percent of the money again the line share the first district with thirty six percent that's over ten year period so over ten year period you begin to see a more equal distribution and if you turn the next page you'll see going back fifteen years again pretty equal distribution but first district being in first place yes ma'am. I'm trying to hear these charts. What Board of. Also. Yes no ma'am I'm sorry this that I wish that they also with the fourth page says which says the light tech awards by congressional district that's that's what each of these grasses it showing where these. Yes ma'am. No no no sorry about that thank you go and procedures okay so on that fourth page you can see over a fifteen year period that it's still a pretty equal distribution the and I think you can judge a program more bite what is done over time but again it was fifteen your pre the first got the most calendar so. I think this is bad for the first district especially because if they can now only compete for twenty five percent of the dollars that's going to discourage a lot of people from trying to compete in that district for example first district has northeast Arkansas it's got a Blytheville bigger steel it's got West Memphis has got the delta. And and so if a developer was thinking I want to try to do a project in the delta. He would be concerned that he there's not enough awards to go for he's gonna spend ten thousand dollars in all this time when he's only got a twenty five he's only going for twenty five percent a ward meeting the other developers and other big cities and that district which probably soak up those awards and it would be harder for him or her to qualify what it's important to have the flexibility we. We are. Very committed and responsible people trying to do the right thing real rate impact although it was a really really noble idea it did accidentally sent them to hire areas we're gonna fix that yeah I don't think that you dismantle the entire program because we have some disco developers which we always have there's always this girl developers because there's limited resources that we get to allocate. And so Sir I will close a lot earlier than I meant to next time I know say aye you my presentation first. before answering questions but. I just want you guys to know that this board they're all very sincere they're all here to serve there's not a one of them was an agenda it's an honor to serve with them because you can tell and they're engaged they're trying and if you just got one of those rubber stamp boards that's not going to think about how to benefit these people that need our help then you're going to run direction you need people who are going to try and make an effort or not willing I mean not or not or not frayed to try and make things better and and who is willing to make sure that it is fair and equitable as I think you'll see in this year's Q. A. P. when we remove rumor impact and we won't have the unintended consequence anymore. Thank you very much Mister chair thank you Mr Sims actually and we're trying to start move moving more quickly but now there are more people more questions for you so okay we'll try to move quick represent register out toxicity Hester yes so thank you Mr chair and I forgot your name Seth Seth real quick did you have any conversation with Senator Solomon about this the real rate impact yes no I haven't but I did ask him to talk about compromise. But we we never got that far okay thank you. One other question I believe chairman Larry do you have a question yes I do. In your testimony and you do go very fast so it's not sorry okay no that's okay I I'm a former debaters so I know how to keep up with rapid fire you you said that the goal is an equitable distribution. Isn't that exactly what this bill is trying to do that we want to see allocated over time and equitable manner but if you artificially limit each district only twenty five percent you're actually putting each district at a disadvantage but there is but there is a mechanism in here that if there is an unused allocation in each congressional district in first let me say that I mean we know how crazy the the congressional districts are drawn I mean it really it's not like it used to be where the congressional districts were one corner of the State four corners of the state but it does say that if there is a an unused allocation in a congressional district that that can then be applied to another district is that not enough flexibility all that is such a good question the problem with that is all the people that will not apply because they're concerned that there's not a good enough chance of them getting an award on there good project because there's only twenty five percent available for them to go for so that ever apply so then you say I'm gonna re allocate those to another developer will other developer didn't apply because they were concerned about the too high a risk and so we don't want to dis incentivize good projects in places that where they need to go there's just so many examples over time about things change you gotta be able to address and the yes Sir based on population but some of those districts have like twenty eight counties and and one of only has five counties I mean it's to do it by that way just doesn't quite seem fair. Okay thank you we'll have more questions or to Ferguson recognized you have a what is the application fee so high who determines that well it's not that the application fee is so high it's just all the things are required any development project on the front end has what's called pursuit costs and they're very expensive you have to use engineers and architects and consultants and that is how you get up to that ten grand and you get past ten grand pretty quick I just use that number because it was used before that it's also it's it's the fees required to submit the project not an application is the fees to to what we call Beck up the project to to get the strategy together here's what I'm going to build its engineer if you give me the money this is what you're proving Sir yeah and if you don't get the project can you don't get the tax rate is then you've wasted all that money yes ma'am thank you thank you reprimand or curing this. yes do you have an opinion on the portion of the bill that deals with the appointments and reappointing and how that what do you have an opinion on that Sir I don't feel like I can speak to that without it seeming self serving I'm really here to fight against the the although it sounds reasonable trust me if you understand taxpayers in the business it's not the the trying to distribute them equally every year between the four districts that is what I'm against regarding the board I will just say if you start over with the new board there's a learning curve and this stuff is kind of complex and that is gonna be counterproductive for sure and and so is Senator resulting kicks them all off and how may you think you're going to come back if they're asked to to be reappointed I don't know but I mean it's it's not a logical conclusions they always bring my back so I I feel like they're chair the reference maybe I speak up for prime that's that's not true well what what will be the opportunity to close that's fine what we're to try to commit let's try to move it move forward representative ray believe your you have a question. Thank you. This may not be directly related to the bill but I think it ties in representative Ferguson's questions about why it's so expensive to apply your answer sort of let me to think that. People are just creating projects to qualify for the tax credit is that no it's just any development project is expensive to get the architecture and engineering done in order to get the financing for the you gonna get from the bank or from tax credits that something that you just have to do plus the application fees plus it's the consultant's fees are very high attorney's fees and consulting fees on these low income housing tax credit deals are much higher than in the market rate world. Yes Sir. Thank you I don't believe there any further questions of okay Red Hodges okay the image seven hundred hundred disk so the the the. Formula is changed any you guys Review the formal every year yes Sir the correct so I mean if if it reviewed every year in the end and we see that is not be in proportion it's not be distributed at. Correctly you may you guys could just those formulas that you know what when you guys meet. The correct yes Sir we do we do that once a year in the summertime okay how then the board the board from private time the folks eleven well there's eleven that are appointed in their three members of state government there also members of the board okay. Okay we would I can finish but more of a discussion I guess okay thank you what what we'll get to that at some point hopefully Mr men's thank you for your testimony thank you very much we have numerous people signed up for Matt for the speak against I believe the next would be on the pro side I can actually tell the sun that Jack creature from Municipal League I can't tell if you're if you come up and introduce yourself. Before that of before you today yourself for the record please do you have a motion personal instrument yes can we limited debate to three sides to each. Three. Three minutes yes three minutes okay yes I would certainly that meant. A large number sorry the person sent out for I believe her motion is three minutes per person yes is that correct okay that is a proper motion is not a bad non debatable all in favor say aye. Any opposed in the motion carries we're gonna limit that two three minutes. If you will go and introduce yourself and you may proceed with the testimony Sir thank you Mr chairman I'll be certainly quicker than three minutes Jack creature Arkansas Municipal League but when Senator Solomon brought this bill to our attention two three days ago we were unaware the bill and he so we look at the bill and the Office among staff and we thought it was a good bill he asked us if we would support the bill well the way our organization is governed we're governed by an executive committee of forty elected municipal officials and obviously they don't the every day so unique periodically and so that would have required us to do is in call or something and you know get a beneficial position so as while we don't have an official position as an organization of supporting a bill the staff has reviewed the bill and we think it that it is a good bill and. That's those are my remarks and I be happy to answer any questions thank you Sir for your testimony. Are there any questions by the committee. Okay actually don't leave just yet represent Hodges you're recognized okay thank you thanks for being here so we explained of why he feels a good bill. Well when we saw course we think that the appointment section you know going from twelve eleven we're all the appoint these are by the governor to spreading that out we we think that's reasonable but the other two changes if I recall a bill as far as the loan guarantees and the housing of tax credits may have that wrong with it I think the main thing was that one Senator Solomon pointed out the especially I think in the first district in the fourth district the disparity in the moneys in those two areas that work was distributed we we thought that it just makes sense that it would be distributed equally in. I don't know if that answers your question but a. That's how we saw the bill. Representive Boyd I believe you're in the queue. Thank you Mister Mister chair Mister thank you maybe answer this but just I want to ask again just bluntly so why do you think location I mean I would say in our cans in from Batesville is no different than in our cans and or a project in Arkansas is no different in Batesville or Jonesborough versus Camden I mean so why do you believe geography should be put into state law as a upping you know criteria over other merits within the project thank you yeah a representative board I appreciate that question I would I would contend that is not so much geography as. Per capita if you will because for the most part you know you have the same number of people in each congressional district so the money would be allocated per capita of as opposed to you know geographical laughing that that's that would be my response to that follow person aboard the so so I I hear you but let me ask it a little it would if you were in Russellville and Dover I mean you know they're in technically different congressional districts but the really and what I would argue would be. At the sim a similar community and so I mean how may when we start dividing things up by work how we draw congressional lines don't you think that gets a little messy well I would I would admit that it's certainly not a perfect system but I think Senator Solomon's Decision that you know the four congressional districts probably maybe as close to begin the call as a formula that could come up with. Thank you represent breath here recognized. Yes thank you appreciate your testimony and appreciate your you made some good points I guess I'm curious is do you find it persuasive the argument that the opponents of the bill or making that that the. Housing market requires some degree of flexibility that is not just as simple as saying you know twenty five twenty five twenty five twenty five that they were because of needs and you know variations in poverty and and things like that that some flexibility may be warranted. I agree that that flexibility should be warranted and not but also agree with the senator Solomon's point that if the young maybe one area didn't use all the allocation and that money would roll over into those other three districts Okay I don't we just represent Allen were you wanting to ask a question okay thank you at rizin Brown. Thank you Mr and this would be for other of you to answer let's say you divvied up twenty five twenty five twenty five. And all of its not used in the third district and so you've got this leftover money. It I know what construction projects eight generally or you know they want to do at certain times of the year and things like that does that create difficulty in replacing that money to another district and who has dibs on that left over money. And the after border make those rules Department of my press will make the rules on distribution Michael have a final say. So there's money left over to your rolls over that's in the bill but but but that can be done in a timely manner. Well that would be up to Mr president to make the rules to do that and we would approve a mass legislature. Thank you thank you resident board yet and had a question. Thank you Mister chair Mister greater I want to come back to this geography issue again I I hear you and I'm I'm just trying to understand why we believe geographies better because as I'm looking at the congressional districts. The big are some of them are are much larger so. Couldn't we have a legitimate scenario where all the money went to say Jonesborough and none of it went to Helena if we did it this way. Well I suppose representative board we could but I guess we could probably have that same situation now could we not under the current structure of I don't know. Your answer follow up questions but. So help me understand then why doing it by geography is better than letting it be on the merits of the project thank you I'll take one more step that it represented board I I I. Two. To me personally and I think I speak for the rest of staff the. Each congressional district has the same number of people and regardless of you know I appreciate the Dover example that you gave me and those are probably several those all of the state but. Per capita if you would you have the same number people park for the for each congressional districts so everyone's going to have an equal bite at the apple I guess another that's not very good answer but that's the best I can come up with for you. Thank you I don't believe there any further questions thank you for testimony thank you members committee. NexoBrid read John Chad will send a. Few would introduce yourself your name in your title for the record please. Hi my John Chadwell the economic developer in Newport Arkansas I also serve on the ad for board I'm the newest ad for board member I came on a little over a year ago appointed by the governor I. M. in the first congressional district and I'm pretty passionate about the first congressional district in the fourth congressional district I will quickly just for weight of. Introduction give you the four communities I've worked as an economic developer and blive all Camden Prescott in Newport so you can see where my passion lies it's rules Arkansas and it's real economic and housing development and there is a lot of need there is need in West Memphis there's need and Helena there's need in all of the fourth in the first district. We've heard that dividing this up by population makes sense here's my concern with dividing it up by congressional district housing is not a per capita issue it's a county and city issue if I have a low housing income project built and Helena but my job is in West Memphis there's probably no way I'm going to be able to afford to live in the hell in the housing area and drive to West Memphis for a job the housing needs to be where my job is and so what we're talking about is taking twenty nine counties in the first district approximately and all of the cities and towns in there and saying okay all of you compete for twenty five percent the money and they were gonna take the second and the for the third districts and say your six or seven counties and the cities and then get to compete for twenty five percent of the money and so now everybody who works in Little Rock North Little Rock fat bill is going to be within driving distance of appropriate low income housing whereas in the first district that competitive balance is thrown off because there's twenty nine district twenty nine counties and it's even worse than worse in the fourth congressional district I mean the counties down there I think it's thirty two thirty three counties down there that are in that one and so you can't put a project in one of those counties and say it's going to serve the same amount of population if it is if you put that project in Little Rock and so it's going to dis proportionately hurt the people who live in those counties of having proximity to housing what it does is it doesn't lower the floor if you read the bill if you don't have a qualified project so at the board is still going to determine what a qualified project is if you don't have a qualified project you don't get awarded you don't get awarded part of the twenty five percent just because you apply you've got actually qualify so there's still a chance that the first or the fourth or the second or the third could get zero projects. In their districts what we've changed is not the floor all we're changing is the ceiling we're saying you can never get more than twenty five percent so you can get zero but you never so would you imagine a basketball game where they told you can still score zero points but we're going to only allow you to score fifty points so as long as you can we had only scored fifty points are good one that we would never put that limit on but we're putting that limit on housing I came on the board after the rental rate impact had been initiated I'm just I hate to interrupt your three minutes are up so okay would you would you be willing to submit to questions I will be willing to submit questions about that K. R. about any of it thank you thank you represent Ferguson I believe you have a question am I have a question the lady to finish because I am curious to know be from the First decirte que you allowed that disproportionate rent formula to go three okay the rental rate impact was put in prior to my arrival at the board since I've been on the board I have argued against the rental rate impact I know the people on the board there was not a nefarious reason I understand why they did it it had an unintended consequence this year when we tweaked the Q. A. P. the amount of points awarded for the rental rate impact was cut in half to see if that made any difference if it did not we said we'll try one year if it does make a difference will eliminate it will get rid of it and so there's been a monitoring in the board is very honest about monitoring the question was was a rental rate impact pushed by any big companies I have never been contacted by a big company to do anything like that while I've been on the at the board I have been contacted by some developers who want to do projects in rural areas they advise me as to what it would take for this to change to rural areas as an advocate for the first congressional district along with two others we push for those changes every time the Q. A. P. comes up it gets tweaked not everybody gets everything they want each year but each year we try to get it closer to where everybody's playing on the same playing field. Thank you follow up questions for yep and I'm just wondering might have better formula to be to base it on of percentage of market that you. At all I mean what what what are you changing the formula to I guess would be what I'd like to know my my preference would be to either base it on a percentage below the a percentage below. What low income housing has been our representative Jack what low income housing in a community is find out where that where people's per capita income under the base and per capita income and what people can afford as housing rather than basing on what's being charged as rents in the area. Thank you I don't see any further questions thank you for testimony thank you next person we have signed up to speak on behalf against the bill I believe is hello Mrs or anyone else an artist I speak for the bill. Saying on the next signed up to speak against the bills Brian Scoggins. And. If you would come up and introduce yourself for the record. You can begin your testimony. Brian Scoggins I'm president Arkansas development finance authority I know we've had a long discussion this morning but I want to make sure that we understand that what we haven't been specifically identifying it most this discussion has been surrounded around the nine percent current competitive low income housing tax credit rounds. there there's also the four percent low income housing tax credit program which is not competitive immediately available and available on on going basis and state of Arkansas and it was dormant for many many years and so I what I want to make sure you understand is that it it cranked up and started getting utilized more and two thousand sixteen two thousand seventeen and in the the fourth congressional district has made great use of of those four percent credits along with some of the home dollars that that that ad for a utilizes and and administers and so the point I'm trying to make is that there is John mentioned there's there's needs in every part of the state those needs may be different depending on where you're standing in that state and there's a variety of programs and adds that ministers and and and decides upon where we need to do it what's a good project in in any sorts of of of criteria that we use and it depends a lot on those needs and I wanted to to give you a further example one of the things that we do is the is is the home buyer program is supporting people who are going to be owning property rather than renting property. And and I would submit to you that the first congressional district has made great use of that I mean we we announced our awards this past year in the home realtor of the year the lender of the year the bank of the year everything of the year that we could get came from the first congressional district they made use of that program now again it's it's it's not really apples and apples but a point of trying to make use of a wide variety and needs in a wide variety of programs and so when we provided the information for the charts there in front of you we wanted to we wanted to look at all of that information and do it over a longer period of time because that Q. eight P. as as John and Seth both mentioned atha Board is incredibly diligent on this state spent on whole number of hours that trying to go over this to a P. to make it fit and make it be available to everyone and make sure that valid financially feasible projects had a chance to get get approved but it's the ninety percent rounds are not the only program that we have That's probably a half for opening statements happy and try to answer any questions thank you for your testimony. A reserve board question. Thank you I just you probably heard my questions about congressional districts and I'm just curious about that I mean so. A congressional district holds what about seven hundred fifty thousand our Kansans so could we really draw different map and just draw are seven hundred fifty thousand you know just straight up and down the state or something I mean is it really not just an arbitrary thing to to set the laws of congressional district to your knowledge. Well I think that that they're trying to get to that seven hundred fifty preferred congressional district so you have equal representation and I agree I don't think that it does a very good job of achieving a regional distribution but because of the unusual a geographic boundaries of congressional districts I agree completely that you could have something in the fourth congressional district in the project be located just a few miles east available which is a bit you know I think is is probably many peoples of the issues is that you have it all going up into the that you have a lot of it going up into the northwest corner of the state what you still might and you still might be able to hit that fourth congressional district threshold or quote if you want to call it that and not really achieving the the goal of of of of the the legislation in my opinion. Thank you president Hodges who recognized for a question thank you Mr how many applications do you know how many applications are submitted and how many are approved or denied possibly it changes every year I know for the previous year there were twenty six applications that were submitted for about twenty three million dollars in in value and and as I had nine million dollars to allocate for those successful ones and I think it was either ten or eleven projects that ended up getting awards out of those twenty six applications and and that's that. The percentage is probably pretty standard it may go up or down when you're not there but the last year that's that's essentially what was. Couple of you're recognized for for how much of the dollar amount of the tax credit who determines that any that was what is that amount and half you know what how do how how do you get the term has distributed in and it could that not be increased IT department treasury essentially establishes those saying the and you might be able to that borrow from the following year's allocation to if you have just not quite enough to fund everything that that meets the standard in this particular year but you don't want to do that too much because then you get into that following year and you don't have enough to to allocate to all the various projects but it's it's eight or nine million dollars a year give or take just about every year. Thank you saying the further questions from the committee thank you for testimony thank you. Thanks person signed up to speak is Dennis second of its hunt If you come up at our dishes of for the record please. Mr chairman and members of the committee my name is Dennis not them executive vice president of Stevens and head up or public finance department and while I have personal feelings as it relates to this particular senate bill four seventy five and As a citizen and taxpayer I have concerns in terms of us basing it on anything other than merit that's really not the purpose for me being here today my only concern with the bill as it relates to Stevens is section four and I would like to focus your attention to that particular section that's a section in terms of employment a professional services for for ad for and for some reason the term and consent has been added to that particular section and it causes me some concern to mean that all of the current procurement procedures for professional services are going to have to go through Legislative Council to get approval again it concerns me in terms of many of the transactions that investment banking firms like Stevens works with that ad for our related to refunding and restructuring we basically have a procurement procedure in place now that says if that investment banking firm brings a re funding or an economic savings opportunity to the state that that investment banking firm will give be given priority to try to do that transaction and those firms are monitoring all of the ads for his outstanding debt and I just want to make certain that if we're doing this consent that that will be able to be can ten you'd and that it will not to interrupt our ability as well as the states benefit of being able to get that advice from various investment banking firms to save money for the state. Thank you Sir thank you for your testimony there any questions by the committee. Okay saying none thank you thank you thanks person signed up is Stephanie. Skinner at eleven when I guess I can't read the handwriting sorry no I'm sorry if you senator so for the record place Stephanie garner. Sees me Stephanie garner and I'm a board member for years and C. E. O. of our back community action agency which is located our corporate offices in Russellville Arkansas Polk County and I touch on actually district two three and four we serve a nine county area and so I just wanted to come before you today just against this legislation because I believe legislation is not needed I believe communication is needed in collaboration I've had the pleasure of serving with Seth man's the chair of the housing review committee previously and to just based on my background in the work that I do in community action for those who need who may be familiar those who don't know we provide um services to low income individuals I oversee eighty B. as substance abuse treatment facility I oversee hood grants for housing of homeless individuals we also provide utility assistance food assistance and we serve over thirty five thousand individuals in the three districts annually and so I bring that expertise as well as a background economic community development work and higher it for ten years prior to the board and over a four year period it's been quite the eye opener an education for me as well as we touch on things such as venture capitalism as love investments homeownership and in removing or redistributing how we select for members I agree is definitely a learning curve that would be detrimental to the future of our cans and for me specifically I am proud of the work that we have done in the direction that we're going with truly understand the human side of this as well and the constituents and who this is affected right now we're working with we'll when we serve the working poor these are individuals who work making minimum wage full time eleven. Now we're bringing home three hundred dollars a week but being hit even Russellville with rants at six hundred dollars a month that's half of their income that's fifty percent many of our grants even for hood for homeless assistance it has to me rate raise reasonableness we can't find a a rental unit in our area that is below that meets that threshold so there's issues we definitely understand that more affordable housing is needed we're working very diligently to address that as stated previously we don't rubber stamp anything and we do look at it from a means not just fiscally sound but also is a providing benefit and work to our constituents it's a quality housing doesn't have programming and services to bring individuals to a point of self sufficiency I'm passionate because if you guys remember the commercials for hair club for me and where I'm not only the president I'm also the client I'm also participant you know I was in income base housing I utilize student loans I my first home was from the first home ownership ma'am I'm sorry hate to direct you but we're trying to stay in our schedule you for your future allotted three minutes I I do not do any questions no no questions for the committee thank you for your testimony thank you. I believe we'll have one more person signed up to speak mark from ad for. Chairman of all you'll want time to other developers like to speak. Okay we have no one else signed up limit let me ask Is there anyone else you'd like to speak for the bill Okay please competitors of. Thank you Mr chairman and committee members as I said my name is jim Patty and I'm an affordable housing developer most everything that is been spoken so far this morning has been from the public sector this program was created as a public private partnership and has been very successful bipartisan since its inception and and I as a participant from the private sector I thought I would share some to some experiences I've been doing this for over thirty years I've done it through Democrats Republicans there's been several turns over that those and the board there's been several turns over at the staff so I've seen lots of things through the thirty plus years but I'm here today because I see the difference that these. I'm I'm passionate to so I apologize I see the difference that these programs make in the lives of those people that were helping to the gentleman for Mrs west Helena. Start my company one of my favorite stories it is we got our first project done we hand the keys to the lady she breaks down in tears because you've never been given the opportunity to have something this nice we have property in West Helena West Memphis in women in Marion we have an in Northwest Arkansas we probably covered all congressional districts in our thirty years there is a tremendous need everywhere and and quite frankly there probably needs to be legislative assistance at times but with all due respect this bill is not yet there possible thank you there are possible things that could be done we're not here to talk about that today real quick because of my time limitations born transition I've done this for a long time there's a huge learning curve and and unfortunately with the learning curve comes at a break in in production and so for that reason I think that is that is significant that I would be opposed to geographic distribution I think there's been a fair distribution equitable distribution in my opinion it offers a lot of flexibility they've talked about that we've been involved with the this is the. Big river steel we've been involved with the Simmons food expansions and the the board in the way that have the flexibility to respond to those situations we've been involved with that and and so making it based on geographic distribution as opposed to where there's a need where there's a natural disaster or an economic expansion or if there's an opportunity to capitalize on other federal funds that have a short time frame this gives that flexibility and finally in closing I know it's been said before but this is an extremely competitive process and and I suspect I think the five billion dollars this that there's probably the reason that this is been proposes it some very deserving development in some community did not get funded for a tire to I've been turned down I've lost it I'm sorry to interrupt you thank you so much for your testimony we're sticking to our three minute limitation we do have a couple questions for you though okay Russian Boyd you're recognized thank you Mr chair thank you Mr thank you for being here today and so you know I just I'm just gonna for time's sake say there's a chance that saving hearing could be in the third congressional district in Fort Smith could be in the fourth and two years from now right and so you know those communities are really kind of homogenous so it is the would that create a scenario where Van Buren could then get a significant chunk of these dollars in Fort Smith could get some of these dollars and then meet the the scenario where they've gone to both the third and fourth congressional district but then not really meet the spirit of intent. Absolutely and and as a thirty year participant I can I can probably be the only one that would be willing to go on record if you divided up evenly they're all gonna get spent there is there is there is no reason that the folks that are in this is a very complicated business folks that are in this they're going to go where the need is and where the dollars are and and that very well could be the scenario in the Fort Smith Van Buren or the Dover Russellville situation. Okay thank. Thank you representative void are there any further questions by the committee. Okay thank you for testimony Sir. Thank you. There there are no one else signed up to speak represent Sullivan we like close your bill of yes Sir thank you now bring up what what the German Jett said I'm sorry I'm sorry to interrupt you apparently there was someone what if you could come to the table in addition of please apologize centers over. Senate committee my name is Glen Gilbert I am with the new cap invested partners based here in Little Rock we're real estate developer and we specialize in affordable housing as well I wanted to bring out a few points of from the perspective as a of a of a developer and how this bill is not a good step that the state needs to take there is mention about a qualified qualified at the allocation plan that that the IRS gives each state the economy to determine what those rules and guidelines are going to be for each particular state those guidelines tell us what qualified applications look like they tell us where they need to be they tell us what the guidelines require as far as construction of quality of construction building building standards are all a part of the Q. E. P. those guidelines so currently we have that in place so we if we're feeling like there's no need for additional legislation to to take care of those fundamental aspects of the program. Senate bill four seventy five creates a significant challenge for developers the bill proposes to give legislators the power to regulate access and to change the way look at low income housing credits are distributed to the state. It propose a developed proposes to divide the funds in Arkansas and distribute them twenty five percent by a congressional district we don't feel that this is a good decision to make. as and as was mentioned before the lighted program is an extremely complex process the applications are about a six five or six to inch binder likely we've submit those electronically now but they are. Pretty mind boggling to to process that takes months and months of preparation to prepare an application there was a mention of I think ten thousand dollars for application the actual costs or about thirty to forty thousand dollars if not more because you have to prepare market study to determine if there is if there is a need in that area that you're proposing you have to do engineering you have to provide architectural plans a lot of soft costs are involved in these in these in the application. if this bill passes so we'll be working with that twenty five percent of cool. Of allocation versus the top one hundred percent allocation that the state would get as a whole. as a matter of fact our team is looking at doing a project in district one right now we had a Planning Commission meeting last week with the unanimous vote for the project in a much needed area economic development is taking place in this area but they have no housing so these folks are having to drive fifty miles to seventy five miles to go to and from work because there's not a good stock of of of Act affordable housing in the area so they're asking us to come their way our mayors are could giving us calls telling us that they need housing so we're trying to meet the needs of the areas that need it. This bill would discourage developers from incurring costs when there's less of a probability of an award. And that the bill does not specifically address the need for affordable housing in the district relative to the whole state. It does not have a mechanism to score the. A score the applications or to target areas with the greatest needs met ma'am I again I apologize I okay did interrupted all right one but we just need to make sure that we understand what we're here fair decent affordable housing so people can feel good about going home they deserve to deserve to have fair housing and to have quality housing just like the rest of us okay thank you any questions by the committee. Thank you for testimony ma'am. Okay now we have no one else left to speak so Represent Senator Solomon you are recognized to close your bill thank you I'll try to close quickly there's several things at once with the lady just said after makes those rules so there's nothing in the bill because that's already done the effort will make the bills and they will promulgate those rules Mike Preston will they'll promulgate those rules through the process. Also to say that it's not a good bill you heard that several times but then you heard the gentleman from adverse say they're going to scrap the the What was that the rental rate program they're gonna scrap. Okay never said that to me ten months ago I went to and said gas I don't think this is a good formula come first come up with something we can work with I told Mr Preston that I told Mr Scroggins that they never came back to me to say that's your right we need to look at this every business reviews their plan every year and you have a three one three and five year plan and you're looking at that and all of sudden now you come up they come up and say we're getting rid of the program now when they had months to do that folks I take a personal affront. When someone says I'm trying to kick the board off that's a personal accusations to flatten not true. And I'm hi. Resent that implication of this is personal and that I'm trying to kick people out of a job the bill specifically allows the house gets appointments to the board the bill specifically allows for you to reappoint those people you the house not the governor but you the House to reappoint those people and if you think they need three of the four or for the for put right back on there I'm fine with that that was intentional it wasn't it wasn't done afterthought so to say that I'm trying to kick everybody off just demonstrates that they're trying to kill a good bill. This without there's been out there for a long time. You know the gentleman spoke from Stevens not talk again with Mr Preston ten months ago what did Mr Preston call Stevens and ask them to come speak with me instead they come here to kill bill and some of the things that they said or just not quite accurate because some of the programs at the covers the venture capital and the innovation and the accelerator program they're not covered in this bill and that's where most of the bombs go through so some of the testimony is just intended to dissuade you I'll say this in closing out the poor people in West Memphis four people live. Four people in Fort Smith the four people and baseball cap four people all your areas. What an opportunity an opportunity to have a business in their districts that supplies their housing the lady that spoke lastly it's it's like I don't agree with that she's saying Senator Solomon filed this bill and he doesn't agree that people have poor out the red house and that they don't they're not as important as everybody else in the state folks I know most of you most of you know me and you know that's just not true. I want the people in your district by the way I don't want your housing in my district for your people have an opportunity and of your people don't take advantage of that and there's rollover money to my district that's fine if there's not that's fine but we have projects has been mentioned today in West Memphis items in that those poor people need shelter money and having those housing so we just look through for a second I will. your partisanship yeah I've run two or three bills this year that I've been very partisan this bill passed out of the Senate with thirty three yes votes one no one present the the tune the no was a Republican and the president was a Republican so this is a very bipartisan bill of this learning curve idea that people have to have a learning curve that's up to you appointment on a point. In the they also talk about discretion and a representative board I know you made a valid point is this the best way I don't know it's the best way I came up with and I made a promise that in two years if this doesn't work I come back and repeal the entire bill. This again just really strange that it's a terrible bill it's a terrible bill it's a terrible bill we're going to do it represent with Senator Solomon says we're going to get rid of the program but this is a terrible bill. Folks they're out to kill the bill I'm not sure what all the reasons are is a good bill is going to help the poor people in your district it's going to create jobs it's going to be a great economic development project in in two years you have my word if it doesn't work we'll come back and I'll be the first one repeal it I thank you and I appreciate a good vote was chair thank you Senator Solomon sent the center as close for his bill. And I believe represent balance trying to get my attention okay I apologize I apologize for that Represent rate you're recognized. Motion. A respirator recognized your motion motion do pass the motion do pass by representative Brad that's a proper motion is there any discussion on the motion. President Boyd recognized for discussion. Thank you Mr chair I want to state at the outset I'm going to vote no on this bill but I also want this say how much I appreciate Senator Solomon bringing this topic to life because there's clearly some changes that need to. Happened and so Senator Solomon I know you can't participate this conversation now but I appreciated and and the appreciate you bringing this forward and I'm gonna be looking at at some things but I I just don't think this is the rights solution right now thank you. Thank you resident avoid any further discussion on the motion. Okay seeing none we have a motion do pass by representative or a all in favor say aye opposed no. The nose haven't syndrome sorry bills filled. Okay. Members I'm going to go ahead and and take back share I made a commitment to representative Murdock and I know represent Clowney are you caring senator Elliots bill today. Yorty did okay well that's what happens when. You're moving slow like I was this morning representive Murdock his bill was on the agenda but it somehow came off it we will need to suspend the rules to be able to let him hear the bill is there a motion to suspend the rules we have a motion from representive fielding all those in favor of the motion to suspend the rules to be able to take up this bill signify by saying aye. Any opposed no so represent Murdock you are recognized I apologize that your bill was originally on the agenda thank you to my wonderful chairman. For your indulgence and your consideration to committee for suspending the rule this bill is simply a bill that is protections consumer protection if you will to a large degree what it does currently if as we were practically see it today with someone dies the if there's insurance policy the beneficiary is paid for at the time of death. There is a Supreme Court ruling that this bill will prevent possibly eighty we'll superseding the insurance policy the beneficiary on insurance policy with this all this does so the practice is what I just see it but it but it was brought to me by a concerned citizen about something that somewhere ends in a sum ruling that happen in the nineteen thirties so what this would do is just put in the statute what we already practice that if you are the beneficiary name benefits year and then we'll get supersede that represent represent I'm sorry we did not let anyone know the bill numbers eighteen oh one I'm sorry eighteen. So I'm sorry you can proceed to yeah we do have a question that when you're ready I'm ready okay representative brown. Okay. My apologies I'm maybe I'm missing something it's my understanding that a beneficiary of an insurance policy is a contract beneficiary in a will cannot overrule that already. Okay well but I don't think it's a statute as I understand it and what I've been told that I have not researched what I was told is that there was a old Supreme Court ruling or challenging thirties that allow for something of this nature and that we needed to put in the statute that that the beneficiary will be honored and can't be challenged even now because it is because it's not a law that's my understanding but I of I could bring Farnborough up there I think they're here and they could. Answering a property same as I'm saying that I know there are Insurance Commissioner the claim is here and staff is here if there's any other than that can answer that question. Since we're kind of. We'll send a lawyer up here okay. Please identify yourself for the record depreciate your testimony. Thank you Mr Yeah. Thank you Mr chair generator general counsel the Arkansas insurance department. I've resented Murdock is actually up referred to a case is correct there there is Supreme Court case law in Arkansas. That puts us into a minority of states the general rule is that the changes of two of a beneficiary must be done according to the contract itself with the terms of the contract call for we've got no case here in Arkansas with Supreme Court felt that as long as the will reference the policy with enough specificity and may the intent of the person by drafting a will or are issuing will was known that they want to change it beneficiary that could override the contract so this would put Arkansas in the majority is that of a state senator. We would we would be hearing to the general rule with this bill. Right yes. Okay. And and I'm I'm I know we're just asking you for informational purposes but I would assume that that that would be a good direction for us to take to be able to be consistent with other states. I think it's up to you okay all right that's what we don't have any opposition to this bill okay well that's my place to make that now that that's really what I was searching for. Okay so I just wanna be clear what I would be voting on so whoever so right now today so if we vote on this this means the what if I designated beneficiary that takes precedence over what might be and will so like today I could have a will that would override what I had written in is is a preference on a beneficiary according to that okay for this with this would changes so that when I say I'm Laurie Boyd is the beneficiary that would make clear that the word Boyd was the beneficiary rather than what might be and will okay thank you okay representative Lundstrum. I'm not and I'm not an attorney that's why pay for one yeah how does this impact for us This will be for life estate I'm sorry life insurance policies and and possibly a new entities I don't I don't think this will go over to trusts in the same manner. Okay because trust can hold policies and they can. But does your business and but trust will hold the policy the policy is going to be what governs the choosing the beneficiary now rather than a subsequent will the changes and so I so well yes it's encompass within a trust I don't think we're we're dealing specifically with life insurance policies and the contract at issue those and and this this bill would say. What that contract calls for change of beneficiaries what you must do if you want to change the beneficiary. That helps. Someone. Representative Brett. I think in this situation I'm asking that representative Lundstrum mentioned the benefit that the doctors make thanks for all the beneficiary of the policy would then be to trust it if the trust is the and to be administered properly. Because if you had a policy that was held within the trust and the policy had named something other then the trust as the beneficiary that that that life insurance policy designation of beneficiary would have to be honored. I'm just saying it has to be honored but the way to keep it from being a mess it's just to name the trust this pendant fishery that's a good legal questions you. What. We can do numerous fact patterns look back Hollis C. and with the policy calls for for the change of beneficiary will now be in statute and that you'll have to do what the policy calls you to do thank you later reference but that a change of beneficiary in a will that would have. Okay represented Ferguson. I guess what would it be true having I've gone through the will process if you if you have an attorney riding the wheel they will recommend that you check the beneficiaries of the insurance I mean this probably wouldn't. An issue very often I wouldn't think I think if you're working with a a good lawyer they would they would check that box absolutely yes thank you okay. Members any other questions for me either Mr Prater or. Represent Murdock the other questions bill there does seem to be any okay as well at this point then we'll just move and see if there's anyone in the audience who wishes to speak for the bill. Against the bill. If not representive you're recognized to be able to close and to make a motion I'm closer recommend to pass okay we have a motion do pass is there any conversation or discussion among the members I know you off love to ask questions so. Did I see a finger raised their okay representative Gazaway thank you Mr chairman a representative Murdock I think this is a good bill. And that some members can ask me what my experience has been with this and I haven't seen this particular instance where a wheel says something different from the beneficiary of a life insurance policy but I have seen a case in this happened recently where the will sought to the the will made provisions about real estate at that had already been made in the deed and the question was very similar to this issue doesn't will trump indeed that was made before the will happen and the that that the answer there was is no the deed controls over whatever was set out in the will I had. And that's how most states do it I think this is how most states that the same thing with life insurance proceeds and policies you can say one thing in a wheel but the documents for the life insurance policy can should control and that that's how we do it with the that's how we should do it life insurance policies I think this clarifies that I think it's a good bill and I'm certainly going to support. Thank you any other comments discussion representative Maddox I just want to echo that this actually cleans up an issue that's kind of that it's somewhat unclear in Arkansas loss of this is actually really good bill and I appreciate you bringing this and be supportive okay. Any other kind of discussion members. If not you have a motion on the floor to pass on house bill eighteen oh one all those in favor say aye. Any opposed say no. The regulations and thank you for your patience in us getting on the agenda members. You'll have to tell me if we of could dispense with all the business of I believe we have so