Revenue & Taxation- House

All straightforward bill is one cents and it's literally striking about half of that sentence basically this is requiring that the market value of off premise advertising signs shall be to determined using the cost approach when they're being assessed so at this is basically in essence very similar to a piece of legislation we passed a few years ago there is a court challenge to it and it was in essence thrown out on a technicality and this is just running that piece of legislation to put it back into practice according to it was the twenty fifteen long twenty fifteen law that we passed through this body so more unhappy try to answer any questions if you have any on the details. Thank you risen one you're recognized for. So representantes unified understand. They they pay their tax property tax based on the calls to roll then the revenue income the tests and produce right the the the cost approach is if you might if I may the cost approach is the cost of the value of the asset basically the replacement cost of what it would cost to rebuild it if it were torn down and there are some assesses in Arkansas that have proposed valuing these assets based upon the income that they generate and if I Beez big concern we represent four thousand small business owners if assesses are able to say to a Billboard company tell us how much money you made it this Billboard on ten Adams Avenue with the what's the stop them from doing the same thing with our farmers we're going to value your tractor based upon a complex analysis of how much money that tractor generated from your farm so what's the proverbial camel gets his nose under the tent with this then every business owner Arkansas could be faced with the prospect of their property being value based upon the income that the property allegedly generates and that just is a bridge too far for a small business people. Well. The proverbial tractor. A lot of times and make money. A bill board most of the school make money correctly. No Sir sometimes those Billboard items sit vacant anytime you drive by the highway or the estate in UC of this sign available or some snazzy statement by Lamar advertising or some other advertisers that Billboard had earned a dollar all also they're often donated to the state and other nonprofits and so there are some instances in which the counties would lose money by value and then that way but we're mostly concerned about the regulation in the burden of having to sort out how much each one of these things make because they're also often Pakistan in leased out in bulk and then again just the president's that the county government with till small business owners give us your books that's just unheard of your Arkansas. Thank you Mr chairman thank you personally Lynch. Thank. Representative was question is that the income office signs would be tax as revenue for the business is that not correct. yes it's it's it's it's the one of Billboard entity makes money from their their work they're currently paying the income Arkansas state income tax on that money I'm sorry represent I misunderstood the question and so that money is being taxed in that's another concern we have about this approach because the Arkansas constitution prohibits counties municipalities from doing anything that would be similar to an income tax so thank you I'm sorry I misunderstood the question. Thank you Sir. Merging other questions. President for Porter you're recognized thank you Mr chairman of could you tell me the. I have gotten a several inquires from a couple sessions in my district Asked me to be opposed to this why is they did explain yourself could you why they were feel that way yes Sir and and I want to be very clear I spent five years in the governor's office several years of the Arkansas department of economic development a set in assesses job is to generate as much money as possible for the county and so I don't begrudge an assessor for trying to make an extra dollar for county government we need well funded county government however the the counter argument to that is that we pay our pay our fair share we don't mind paying our fair share we just want a very simple an equitable process for determining how much our properties are our assets are worth so that we set out our budget at the top of the year we know this is what I'm going to the county at the end of the year and we don't want to have to spend weeks and pay accountants and lawyers like me to go through and look at everyone of those billboards to try to figure out how much they may and then also again but no my NFIB hat I don't want my flo flower shops to have to figure out how many miles and dollars each one of the delivery trucks made I don't want my little pizza joints to have to figure out how much pizza they delivered with their trucks it is just to me once once they go or this ox the other oxes will be lined up right behind them to be Gordon so there's a reason that you got you men and women have the wisdom to pass this act in twenty fifteen to say use the cost approach it's simple it's easy it's equitable and and let's do that approach for all these businesses and let's not discriminate against outdoor advertisers and finally I will say this if you look at who advertise on billboards is a lot of small businessmen and women small business including Billboard farms are hurting right now it's so any massive tax increase at the end of the pandemic is just for public policy and so we're asking the legislature to step in and preserve the status quo. Remember. Thank you at. I can't pull the disclosure on that. some year. Billboard or more profit others. And I know some of these downtown you know would be very problem so my only county road and I found that I want to involve. Arkansas election. But it is almost the same principles might have got a pretty good size house initiate County but if it was in Little Rock. It would be worse several several times was worth it and says East Arkansas. Someone if and I always thought it was a fairness issue all water property worth. Is that not correct. I think that is correct and I do believe that if this were to pass in the state was to go to a model where it's income driven it would make a lot of money for Pulaski County and in your locality would lose money because right now if you do it by cost the cost of the steel the cost of bills LCDs technology that's the same so whether it's in Little Rock or its initiate County those counties derive or should arrive right around the same amount of revenue from that asset but if you use this income type approach that I do believe it would be a windfall for Pulaski County and then I think it would create red ink for the city council where you're from the other thing that I think is very important we have an assessment coordination department the supposed to work with these sisters so we have equal and equitable tax treatment across the state they recommend using this approach that the statue would preserve and so this is in line with their policy. What you're recognized guesser. Well first let me say the assessment coordination got their own problems over there. as we've we've learned on two occasions in the past few weeks my question is would you would you agree that thirty to thirty five thousand dollars is the cost of a of a of a Billboard. I think it would depend on the Billboard if the type of technology how many faces it has its sector except for hello this is this is soon thirty five thirty thirty five thousand dollars would cover it that the fair. In some instances yes Sir will okay so in in in four and a half years six hundred dollars a month three hundred dollars for each side of the board then then they they're they're they've got their money back and then if it billboards up there another ten years they're making seventy two thousand dollars I mean there is a drastic difference to me is there not between running a florist or running a drugstore of relative to relative to the Billboard I don't know for comparable comparisons from a business plan business model standpoint. Our president would not call that successful capitalism personally I I I I agree what you're saying and but however my counter argument would be that I could say the same thing for a a a cattle that cav cost so many dollars but when you sell it as a as a full grown cal of however many years later it's value has quadrupled and and that's what we got in the business for is to take a risk and to make some money in the agreement that we make with the government as business people is that the state government will tax that income that we make that win win fall when god blesses there is one but the county will give us a consistent measure on the value of the asset that we agreed to pay whether we make money or lose money we still have to pay the county and so if they want to make a deal with us we're in a year like twenty twenty we may nothing we pay nothing then we might be willing to look at this differently but until such time is just not equitable to try to force us and other little businesses that to try to look it our assets but I'm I'm a lawyer and a lobbyist in a bigger I don't want to have to. Value my laptop baseball what my billable hours were I just don't think that's appropriate for county government to do I you know I try to keep my state taxes in line to cover that income and I think that's the way it ought to be. Follows yes Sir. Would would you not agree that there is a drastic difference between a K. L. and a Billboard. And a tractor in the Billboard and the florist of the Billboard. Represent Senate won't it you coming out here into the hall for farming trying to wrestle with ways Piegan tale no Sir I would not agree I mean I would agree that they are they are different it different entities to different assets but it but I do not agree that they should be treated differently for property tax purposes because that's what we're talking about its property tax and so when it comes to that issue I believe that no matter what you have if you're a small business owner you got to pay state income taxes on what you make in your to pay council income taxes on what the market value of your equipment he is and not with you guys look you made after two dollars a year or you lost for. That's all Mr chairman thank you thank you Sir Richmond Cllr good question. Okay I wanna make sure I write my mind around this I'm a business owner. I have a physical building business in my city. Are we currently taxing that based on cost or valuation. So I'm sure the assesses will come up here and that maybe a better question for them based upon my understanding if that to structure you're talking about is real estate and so it's going to be tax by a variety of fat factors one of those is basically what somebody would pay for in the market and so here what we're arguing is that a Billboard structure I to be treated another relevant property would be a sale fall tower you know we all use the cell phones we don't think a whole lot about how they work cellphone towers a lot like a Billboard is a piece of steel that stands out someplace and if you look at how those of value their value based upon the cost of the steel not how much eighteen tea makes from running wireless service over and so I'm going to tell you you know whenever a county assessor if you guys don't pass this whenever they do try to do this you know we're gonna file a lawsuit we're gonna say that we're not being treated equally we're being discriminated against because they're not tax eighteen anti that way for the cell towers and so I I I I think that things when use talking about you know these per these items of property to use for business that'd be tax based upon what it costs to replace them not what how much you may earn it because then you don't hate Peter Miller's law firm makes a whole lot more than mine and so is business is certainly ought to be taxed more than mine is even if it's the same size building and so that's the kind of argument that we're going to get into if we don't preserve the status quo with the statute. Right I just trying to make sure that there's consistency across for the business owners I believe there is right now because you know Billboard or business also so okay. President body. I guess my question would be right now you're saying that it's the market value and I that and you know the simple way I would look at this as a banker and an appraisal of an asset is market values what someone would be willing to pay for that asset. But if you hired an appraiser to look at it they're going to take into account the cost the income and then also the sales and they're gonna come out with an average or or a price that's approximate. so I guess my consideration of my concern would be the if you're saying true market value that's what someone would be willing to pay for that asset. Not eighteen. Not just the cost of that asset so I mean explain where you're coming from on that site if the cost is the cheapest approach or the lowest to the the lowest cost I made the lowest number value ideas I don't my words I I kind of told myself into a corner with that one I I think that there's fundamentally he was asking me about a a piece of real property and I believe that in in my legal opinion impractical opinion fundamentally a Billboard is actually a Billboard structures an item of personal property although it's also my opinion that the law is not clear on that and so that's an argument potentially for another day I would say however to answer your question the cost approach is the most static valuation and so what are Billboard may sell for in the market place that changes depending on what's going on a lot of wide variety external factors the the most simplistic inconsistent means to value them is what that will if the wind blew it over today what would it cost to replace it and that's the cost approach and that's what we've been utilizing here in Arkansas for the past half decade or more and we're just asking that we maintain that approach and again we're not trying to do anything new we're just trying to make it clear the judge said that what we had had some problems and so we're just trying to clean it up. A follow up yes Sir well again now you raised in issued by me thank and and that's not always good either you said cost and and then you change to replacement cost and if I read the bill right and see replacement cost and in in the bill it said cost. And was that cost of acquisition I mean that would be cost acquisition when it was first erected but you've just set and and kind of made the case that it should be replacement cost and at some that at some point the replacement cost may be a lot more than the actual cost of time that these billboards or signs were constructed so yeah my question is which one of those sounds you know more advantageous to you and your argument the replacement cost are the actual cost of that structure or size the cost of the structure would be more advantageous to me but the statue for the past six years since their cost and so I don't want to make a misstatement about what that means in the assessor's office I know what I believe it means but I don't want to be an accurate but I would say that is my opinion that the language as we have is is good it's quality is consistent I believe is the most economical approach for both parties being the Billboard company or the assessor's. Sessions. There's a dozen anything that for start for and against I'm good thank you because we got to a couple folks signed up for against this Mister Russell hill and can go in the table please and. Mr when you situate recognize yourself sermon and get comfortable school and start. My name is Russell hill I'm the assessor for Washington County and I'm here on behalf of the Arkansas assessor's association. And what this this bill does which gives gives us a little of a lot of alarm is that it tears away at the integrity in the equity in the way that assessors value All property across the state of Arkansas and so although primarily we use the cost approach but we and and we talked a little bit about tractors and billboards well tractors are personal property so they're they they are put on at the value of that that property minus and then they depreciate so whatever the cost of that property wasn't in each year it tends to depreciate over time and then it'll flatten out bottom out and it'll stay at that until the tractors no longer deemed usable and is no longer in existence billboards or real estate we did add there are three approaches when you're want to determine the value of the property and in actually the uniform standards of professional appraisal practice addresses under standards were one through four which states the appraiser must analyze and reconcile three approaches to value now with billboards it's a little bit different so if you have the cost approach which is the cost of the Billboard minus depreciation so if the Billboard of so many years old we're gonna go here's what the cost of it is to replace new minus depreciation to its current condition and age and then we create the value on that but with it being real estate with the big factor is location and that's where they want to take and they want to take the location out of the Billboard and that's one of the primary functions of the value of that Billboard is location it's real estate what is the first rule of real estate location location location and if you don't want to take my word for it that billboards in dot com frequently asked questions number five I'm just trying to get a general idea of what billboards cost can you help unfortunate here's the. Answer unfortunately to answer this question isn't simple billboards can vary widely in cost depending on. Location. On type in on size so but the first thing they state is the location of the Billboard has a tremendous amount on how much they're going to charge you for that I've purchased billboards myself and I looked at two billboards that purchase just a couple of years ago they are on the same interstate two point three miles apart one was thirty three percent same size same type they were static billboards ten by ten by forty twenty by forty something like that rectangle One was thirty three percent higher because it was one hundred feet closer to the interstate then the other one same stretcher ROW two point three miles apart thirty three percent difference in the cost of that for me to read it it's commercial leased spaces what that is that you can do the income approach we typically but in order for that we have to receive the income and some businesses do that because they find that benefits them on the value of the commercial property some don't they don't want to disclose that information billboards do not want to disclose that information that's fine within were not able to use that approach bore fine with that again three pro just kind at three different approaches kind of get us to that value at the end of the day assessors don't care how much revenue will bring it in that's not our concern that's what the millage rate does you're just the millage rate in those departments those this which mainly in this case be school districts because or once primarily funded our job is to accurately and equitably value that at market value what would this go for on the market so you've got the cost approach but you need to add location factor when you're dealing with real estate and this is considered real estate in the state of Arkansas you've got the income approach we typically don't get that now the grandiose approach of all is the sales comparison approach that's that's the if you can get that kind of data that's the best approach because then you're dealing with arms length transactions in an open market that's that's the golden standard but with Billboard you can't really get that because they don't really sell individually and that's what we have to price them individually because each one is different based on their location based on their size based on the cost of that Billboard plus location so sales where sales comparisons are not going to really work with Billboard so we do the cost that we have to add an location factor because a Billboard in Pulaski. The county on I. forty is going to be a lot different it is in some other County that's not that doesn't have the traffic count of the traffic flow and the amount of what they call impressions on that Billboard in that that affects the value of it so our big concern is not the revenue loss if I'm if you don't want exempt and exempt I don't care what I care about what the assesses across the state care about is we care about protecting the integrity and the equity of the values that we put on our property across the state of Arkansas because they very in different types and so we look at all three approaches and then we used which approach best accommodates that particular property what this bill does the cost approach we're fine with that DO that's typically how we do it and we've been doing it the last six years because it ran in fifteen and passed and so we were told we had to do it this way but the sixty years prior to that we did the cost approach with the location factor included now they're not going to they did want to mention that so if you want to go back a little further in time and do it for a lot longer that's the way we've been doing that that's the correct way to do it and also if we were to do it this bill would be a violation of code twenty six twenty six nineteen oh two which states that each county in the state of Arkansas shall be required to appraise all market value real estate normally assessed by the county assessor at its full and fair market value this bill is in direct conflict with that code. So I would please urge you protect the integrity and the equity of the values in and here's what happens if if we do this have. That that money's got to be made up somewhere and so that gets rolled off on to Joe property owner Joe farmer because those millage rate you're going to have to increase to cover the loss of that revenue that these billboards are not paying their fair share and it also opens a Pandora's box I was in a meeting the committee meeting earlier there's another organization trying to get us to skew our values so it gives them a tax loophole there's a battle going on right now in Pulaski County and in in the courts where big box retail companies are wanting us to value their open stores that are generating hundreds of millions of dollars and they want this to value them as if they are dark that cuts their values by fifteen percent realty Sir distinctive bill please okay way I'm just saying that that but when you start doing that to one group special interest group they start light and they're already lined it up worked with this is I mean I got dots to prove provided that so anyway that's we feel very strongly will want to protect the integrity and equity of the values in the state and this this this this up would destroy that mystery to questions service person would have a question. Thank you Mr chairman good understand you to say that you all been told what to appraisal bent. Yes what we have yes we what we have to we have to do what the state law tells us. The relative to assessment coordination they set guidelines and rules for us to vote for you okay follow the yes Sir. So. You said you own billboards you've been involved in it would you sell me one of. If you built a new Billboard I came to you would you sell me at the cost. What would you sell me okay they're saying been there three years five years would you what would you base your value on the sale money that a Billboard based on the calls or based on the revenue it had produced as a business owner I would based off the revenue that it would be the smart thing to do yeah. As a taxpayer I'm going to base it off the cost is that the one more question Sir you're on a roll what what what what what is the difference here and companies having to take an inventory at the end of the year in order to pay their per personal property taxes based on the inventory. This value that a given the mail isn't not. Yes Sir yes and and that that is the year before they don't pay the taxes until the following year realize below I'm saying is is based on that value at that point in time relative to what they'll sell that piece of merchandise for. Is typically lower. I mean that we will as amended from a tax standpoint it's lower but you look at it from the standpoint of the value like you were talking about the big boxes yes relative what they will want to do now they will basis own previous backwards not forward only evaluation absolutely okay thank you Mr chairman you're welcome Sir remeber you have a question now. Thank you Mr chair can can you tell me because it was it was brought up but I'm just trying to understand how our cell towers evaluated cell towers are based on the cost approach with that there's not really location that because it's treated as personal property and so it is at think I'm pretty sure on that we actually because some some of the PSC does that we do some of it so My sister it's being half. Yep PSE typically values the towers on that there's not necessarily really location factor on it because. It does that that's not where the revenue is made it's made how many uses that tower is so I I you know it's it's personal property so it's based on the equipment only. Thank you ma'am Richard McGrew you have a question. Yes thank you chair yeah I would. That that was in Leding to me because if you're treating the sale Tyler's different than your treating signs why would we treat to make but another question because you classified this is real estate so if I look at real estate like I make a restated to building I have been elected business that has a building. you also talk about the three different ways that you value it. When an appraiser come look at my electric bill and they don't look at my profit loss statement to find out how much I made they look at what it would cost to replace that or sell it on an open market what we value would be worth. But in my understanding that into this sign your want to take into consideration the income that it makes that tip never we typically do not I don't know if we've ever done that it's always been the cost approach with the location factor included based on its location all right yes Sir and also you said the lost money but you said sense that whatever the year was you were building it you were doing it on the cost of your doing it that way we're so lost of money what we're currently well what what we're currently at what we had done in the past was the cost of the cost to purchase tip is the. Number one way that most at counties assess billboards is the cost approach with the location factor included what they're wanting to do there's no mention of location factor they're taking the location of the Billboard out there taking the real estate out and wanting to treat it as personal property only just the cost of that bill port Billboard depreciated each year until it reaches a certain amount that it's it bottoms out in the meantime they're making more money on it because the cost of billboards increase like real estate you know real estate typically increases over time these the cost at the the rental space the to lease that Billboard was gonna cost more over time to lease those billboards those costs that they're able to generate more income off that so what we do is we depreciate the sign over time but yet that location factor maintains the true market value of that Billboard the market value is located where that that's where the money is made is where that sign is at. Okay thank you for that I would say I still have a major problem with everyone freaked one industry different they were going to well another one you've got a look at how billboards not a sale tax you got a look at billboards as commercial leased property just like a building because that person is leasing that space just if I was to lease at an office building I'm leasing that space for either a month at a time or six months at a time or a year at a time and im pei and you know the independent on the Billboard location paying probably about the same amount of rent or the cell phone people not leasing the space of his own I don't see the difference what we don't we don't value is PSE values that so I don't I don't I can't get into the details of that. For somebody. I just wanna clarify what you're saying. The assessor's job is to assess and calculate a market value on the asset. There are three steps that you go through to obtain a market value you discuss those the cost the income in the sales what you stated is that you don't have the income information due to it may be an unwillingness to provide that information or if it's beneficial then that's provided in you can take that into calculation so the the easiest methodology for you utilize is the cost approach because you have that available correct and so you're looking at all three and if an appraiser comes out looks at your property they're gonna look at all three they're going to do their best their by owned by the code to do their best to look at all three methodologies and then to reconcile those and come up with the market value and again market value is what someone in the market would reasonably pay for that asset. So regardless of which way you're taking me in and utilizing all three methodologies if they're available if you come up with the market value so I guess in essence you're taking into account what they're asking you to do in your calculation of market value you are looking at and analyzing the cost approach so I would I would say you're we're already doing what they wanted to do this bill it would that be a correct statement he's the only differences is there wanting to take the location of that Billboard out of the value and that's the primary factor of determining an actual true market value of the Billboard is its location they're just wanting to treat it like a tractor here's how much that Billboard cost you depreciated each time and and and that's that's what we need to pay taxes on is just the structure itself and not where it's located and **** assessors are saying that's not how we do real estate you have to cap you calculate in the location factor just like we do with all other property and and we do have the assessment coordination department that has got they have Billboard guidelines for us that calculate that and work excellent in that's really. The I mean I mean I love you guys but that's really where those guidelines need to come from is from them Thank you. General questions. Thank you Mr Bill. The body not as we speak for the bill. Mr Lizzy no speak against. Please recognize shop now and graduation by the way thank you Mr chair welcome Lynsey French with the association of Arkansas counties that was a lot of technical information I want to take a few steps back in again look look at the ten thousand foot view here and address some of what Mr Smith said and in his opening This is the. A particular group of business owners who want their property treated differently than any other type of property is treated under Arkansas law and the Arkansas constitution what the Arkansas constitution requires is that all property be valued at true market value and that's what's done for real property as well as for personal property we've already discussed the three approaches at length I don't want to bore you with that there is a one type of property that is written into the constitution that's not treated it true market value and that's agro pastor and timberland that's that's the only property that gets that kind of special treatment because it is in the constitution what what the sponsor and and the Billboard group behind the bill would ask you to do is to give them preferential treatment and only allow the assessor to look at cost approach and no other type of approach which is not allowed for any other industry business type or property time. My second and final point Mr Smith mentioned keeping the status quo let's keep the status quo last I checked they're the ones bringing a bill to change the law so in and closing my statement I would say let's keep the status quo and I ask you to vote no on this bill. Thank you ma'am. Any questions members. Thank you membership. Anybody also speak for the bill. Guessed the Bill resent us you'll close your bill Sir. She was the best only represent us close first bill. Thank you Mr chair So. Her quite a bit there don't want to belabor this point I know been going back and forth you ask lots of questions but I would refer you back to the bill that's one sentence I'm gonna read it. The market value of an off premise advertising sign shall be due determined by using the cost approach. Period. That was B. what the law would say once this is passed we're striking the part the end of that sentence to avoid the inclusion of exempt and tangible personal property in the valuation. So I didn't see in there where it says anything about location At. I guess that's the intangible personal property valuation that they're wanting to add to it but this is basically the same approach that has been in operation for last half dozen years since this legislative body soffit to pass the law which a court struck down over technicality so. This is the way these these up pieces of property have been valued for the last half dozen years in Arkansas there's not going to be any new loss of revenue to counties because this is the weather already been doing it this is basically the guidance that they've been operating under for the last half a dozen years this lawsuit was I believe in twenty twenty that it was finally had judicata so it's just in the last few months that. The law that we passed was reversed so. Yes we're trying to get back to the status quo of what we've been doing for the last half dozen years And I would appreciate a good vote thank you thanks Sir. Move your testimony to have a motion. The motion for. You make a motion now. Will do my phone please. Motion to pass thank you ma'am measure must do pass we have any debate on the motion. All in favor say aye. Opposed no. Sorry Sir you Bill failed. Thank you members welcome. Members moving on is represent Christian in room. Members this is house bill eleven ninety six and we will be holding this bill is not willing to elect a. If you don't care recognize yourself. Thank you Mr chairman Committee this is house bill eleven ninety six I'm Craig Christiansen District forty seven. This is an act to provide a sales and use tax exemption for certain utilities used by a poultry farm and that is basically on boulder water used in production and the roller growing houses this does not affect anything. To do with commercial operations such as peco Tyson anything along that we're strictly talking about the over sixty five hundred small farms that exist in Arkansas that provide their chickens and poultry under contract. To the commercial producers. Currently Arkansas ranks section second in the nation for broiler production I don't know what you know that or not we produce over one point one billion dollars per year in thirty million turkeys and three point five billion eggs across the board in Arkansas last year the cash receipts for poultry was four point four billion dollars which is fifty two percent of the total agricultural cash receipts in the state. We produce poultry and sixty of our seventy five counties so this does affect some people. The industry as a whole which includes the growers as well as the commercial houses that do package produce and provide the items that we see our store shelves employer over a hundred and sixty three thousand people in the state of Arkansas. But this bill has a direct impact on our small growers. Most of our growers and I can't tell you the exact statistics because they vary from year to year but the majority of all of our producers. Have their own wells this affects a narrower band of them might be considered because this affects those who for reasons of high alkalinity acidity or so if your content or the ground in the way they are. Choose to do it on or required to do it with a commercial water produced either by a water district or a municipality. So in this case it would offer some parity for our. Growers in the chicken farm Turkey farm business because we exempt water. For our pork producers that are poultry producers an across the board it seems that the only section in the state of Arkansas Code that does not exempt production water for these things is in the production of poultry. This would be a great bill for the small farmers for the people who have been hit hard by COVID whose families of either been decimated or people who have moved away or they can't get the employment that they did I know several who are getting up in years and they're finding it difficult to hire people sometimes a small difference can make a difference in building another growing house or not or in fact closing down operations as we've seen in many. All. To give you chapter verses to test it so I can't to tell you that this is something that is very important to that band of people that produce such high volume for our state. A simple break and putting them on equal footing with the pork and beef producers would be an absolutely wonderful thing to do and I believe the fiscally right thing to do for the state of Arkansas. Most states do exempt poultry water for the the growers the producers of there's very few states around that do not I believe it's either Tennessee or Texas I can't tell you right now that does not but the vast majority of states in the nine states around Arkansas the secondary borders do exempt over production water even the piping is exempt if it is not permanent piping attached to a building to be flexible used. This again does not concern ourselves with the producers that put it on the grocery shelves but it does produce for the contract growers who grow the birds that are ultimately slaughtered frozen section processed and we consume at the dinner table. Your question Sir you're done. Yeah I'm open to questions if you'd like to members you have any questions. Paul you wanna give us your official version if I. I do have limpid **** here with the poultry federation and I will state as he comes to this gentleman comes to the table that to the of farm bureau in and poultry federation or I know the poultry federation is one hundred percent on board with this thank you thank you. Good afternoon thank you Mr chair members of the committee Paul Garin department finance administration DFA in our fiscal impact statement for house bill eleven ninety six are projected effective date for this bill is ten one of two thousand twenty one so that would refer result in approximately eight months of reduce collections on the water that would be exempt from sales and use tax for a eight month of eight months of reduced tax collection our estimate is one point eight million in state sales taxes. Six hundred thousand local sales taxes and for full fiscal year the estimate is two point seven million in state sales tax and nine hundred thousand in local sales taxes I would be happy to answer any questions about the fiscal impact. Risen Miller you're recognized. Thank you Paul just a quick question did you look at the water bills of the sixty five hundred. Farm Sir how did you go about. Coming up that number yes so The excise tax section and sales tax did announces the data and is indicated the fiscal that they relied upon an actual purchases of water by Arkansas industrial poultry processors hatcheries I water consumption by broiler chicks laying hens and turkeys and water used in cooling poultry houses and facilities. Thank you. When you're recognized her. Mr hearing he asked did you look at the sixty five hundred farmers do their water bills you know Hey I heard what you said but did you have how many of the farmers did you actually look at and compare their water bill. I don't believe that we look at an actual farmers water bill we would look let look at statistical data that was available for for review but no I don't I don't believe that we looked at any actual water bills of a. Of the pharmacist is sickle aggregated data follows yes Sir hello hello the. If you didn't look at him actually how did you come up with the number. Generally what we rely upon for a number of sales tax exemptions that are proposed in the General Assembly will have to look at statistical data will also look at. the information that's available within our air system now a typically a a utility would be providing water it would not be it a tax I'm sorry of a tax that's reported on a at a farmer's. they're not gonna be reporting sales or use tax it'll be the utility that's going to be collecting the sales and use tax and they don't differentiate between their customers when they report the taxable remit the tax to the state of Arkansas so we'll have to rely upon statistical data that we can used for deriving revenue impact. VOL a. Of this yes Sir. I hate to be this way every time you all come up here we get this same discussion. And and and you know I feel more comfortable on your instrument if you have actually then affiant those sixty five hundred farmers are to command for each what you're saying this is this decree you looked at it but how alley you know voces District or of. Verifiable relative to these poultry farmers the small port the form I'm not talking about time as soon George and and all the rest of month there I'm talking about the guy at the time here every morning at six o'clock in the morning out there too ten o'clock at night working as poultry farm and and how you come up with the I mean once this districts to use revival yeah it's and generally speaking with a lot of arc with bill can rely upon nationwide data we can rely on Arkansas specific data of course it would be preferable if we had actual data that we can derive from returns that a taxpayer reported to us to say this is the exact amount that we are collecting on this specific sale to this specific customer that data just does not exist because it's not reported to DFA. Yes Sir. What would you say would you agree with this statement the agriculture farmers of the only people the seller does sell and buy at retail is that right. Well I mean we're charging on sales tax what you're using to produce you know we're in the same argument here that were in while ago about the billboards. Would you agree to that I'm sure that they definitely sell it at wholesale to grocers or or other retailers but I'm not sure. About buying it retail monster will is diesel fuel spill exempt for agricultural uses what's the difference in water and diesel fuel seven one eight this is a decision for the General Assembly to make whether or not something is going to be exempt or not we we merely want to be able to provide the fiscal impact because that's our responsibility is to do that you would do an evaluation of the bill and provide the best possible estimate for the General Assembly to determine what this specific tax change will cost and impact the budget so we we're not making a decision on whether or not to vote for against this bill we're providing the fiscal impact only. Would you agree follows yes Sir would you agree that your impact statement could affect good or bad. Relative to this that's a decision for the General Assembly to make unless I will ask you. And I'm not going to answer about policy on a bill no Sir. Okay thank you Mr chairman. Member center questions. Thanks Paul thank you. Does anybody I speak against the bill. For the bill. Richard Christian or close rebuilder. Mr chairman I appreciate that and committee I believe Mr caring said that and I'm reading it here that is based on purchases by Arkansas industrial poultry processors in at the beginning of my presentation I mentioned that we specifically were not discussing poultry processors and what they do we are only discussing the broiler houses in the growers and what they need in the wholesale water in the growing of the birds that they ultimately sell at wholesale to the processors so those two are separate and distinct items in committee I appreciate very much your latitude in hearing me today I would ask for a good vote I think this is something that are poultry farmers need they've asked for it for a long time I'm proud to be here trying to help this process forward and I thank you very much as you make your decisions later on the line I would ask you for a good vote thank you so much for the opportunity thank you thank you Sir. Resume makes ready roll. There is no other bill or hold up to seventeen seventy one seventy seventy one. Yes Sir go ahead all right colleagues thank you for the opportunity present house bill seventeen seventy one to to you obviously we're not gonna vote on it today so I see this is the beginning of a conversation about the direction do to to take with this bill if I were to ask each of you by your legislative priorities for this section I dare say one of the common themes that we would find is the importance of broadband doubt for all of our citizens are specially as we get into the rural areas and that's what this bill is about as your technology chair this is an area that I've been focused on four. Probably eight good years now my legislative career and so what I did and where this bill came from is couple weeks ago I went over and sells sells website to take a look at what our other states doing to promote broadband no reason for us to reinvent the wheel of someone's got a good in on a good option out there and so as I went down the list I was pleasantly surprised that the the vast majority of things that other states are doing we've already done here in Arkansas everything from pole attachments to setting up grant programs and so forth there are three things that I found that we weren't doing here in the state of Arkansas one of whom was a study in the state of New York to have the state take over all electronic and telecommunications which I think that's a bridge way too far the other two dealt with did once policy of which did once policies what that involves is when the highway departments out digging up the highway since I've already got the highway dug up that what will go ahead and put in broadband at that point so that way the broadband providers don't have to come back and re dig up what's already been dug up I had some good discussions with the highway department there have actually committed to taking care of that without legislation so we've got that piece of the puzzle that leaves this tax credit here this one actually comes to us from our friends in New Jersey believe it or not it's actually mirrored after their bill so again it's a starting place but what it does is it says that time for broadband providers now if they go to put in broadband infrastructure in two cities that have a population of ten thousand allows or into our unincorporated areas that they can claim a tax credit of up to twenty five percent of that cost against their following years income tax liability though they won't get a refund from the state but they claim that against their liability if they do not use all that credit they can then rolled over into the following year. Are up to up to three years hi as we all know one of the chief challenges to getting broadband into the rural areas is the cost it is simply not possible to make a profit argument to go into these rural areas of our state and so this is just another way that we as a state can help invest in the rural areas thanks as I had mentioned this is a starting point the fiscal impact the first year on we got back was ten million second year and then going forward the estimate was twenty million so as chairman Jett and other members of house leadership begin kind of pen down the budget and kind of figure out how much we'll room we've got to will know if we need to explain you know we can expand this to cities of fifteen thousand or whether we need to pull that tax credit back to the you know only twenty percent know what the what the word those details out but I least want to present the the concept to the committee I'd love to have you here any feedback that you have on this bill well support against ways to improve so forth and then at the appropriate time will make the appropriate tweaks and then hopefully we can garner the committee support to help us promote broadband expansion within our state and and I would argue and I think. All of you would agree that even though the fiscal impact is considered to be twenty million dollars that the economic activity that would result from getting this out to our citizens would in time pay that back in more so with that Mister chairman I'm happy to answer any questions the committee might have at this time for suggestions. Image Clerk you're recognized. Of obviously this is a huge need in the state agency so let me understand this from an economic development standpoint. The tax credit that we've got a three year limit correct I'm going to assume from a business perspective if I'm doing a build out and putting that much investment in it I'm probably in the read the first three years. Potential I mean yet and you have to look at the specifics of any project I'd also have to take into account grants received and so forth but may be yes that that that is a possibility shows so if I'm in a read the first three years do I get the tax credit. Three years after that one fights become profitable. Now so with the with the way it would work is you get the tax credit based upon the equipment the fiber the routers and things like that that you're do putting in the ground so for example let's say that you know all the small town of booster our local telco or whoever decides they want to put in they spend. I don't know a million dollars on fiber on labor on digging on right away all that then after the they put that in and then they would have they would be able to claim this tax credit for twenty five percent of that cost so two hundred fifty thousand dollars now. If there total tax bill their liability would say only two hundred thousand dollars they've got a tax credit for two hundred fifty thousand dollars or we're not going to give him a check for fifty thousand dollars for that difference what we're saying is that they can roll that fifty thousand over and claim that the following year against against whatever their liability as thank you mmhm remeber to test your hand ma'am the Bill. Okay we'll let me get misrepresent what if you got one and I get units going to prison would be gentle Sir. He's always general. He has had a heart sure you understand what is really. Opposes going to agree with your bill have a problem with that but I would ask between now and the time maybe we vote if you will with your are you saying that there's no of positions available over there DFSA now to fill these to Ellis positions is going cost of additional hundred thousand a year. that it yeah that that'll be a question for the department yeah I'll give him a per second they enter that you bet Mr second. I don't know what one thing that that I will just toss out for the committee's. Information is they are roughly seventy seventy five internet providers within the states all they would potentially be working with up to seventy seventy five entities Related to this tax credit. Russia would let me feel completely get present Mayberry and we'll get the if I down there okay this question okay. VOL. I know you're excited to go back down there. I will say I think this is one of the first bills are brought to this committee since I was on this committee likes on all four sessions ago so. Thank you Mr chair members of the committee Paul Gary with the FAA representative makes in his presentation did cover the estimated fiscal impact of this bill of ten million dollars in FY twenty two FY twenty three would have an estimated fiscal impact of of twenty million and also is is represented within pointed out and this would be a new tax credit that would be responsible to be administered within DFA's tax provision so we it in any time that we have a new tax credit was going to be a greater workload for our staff because we have to evaluate those expenditures and make sure that we are appropriately auditing as expenditures before the the credits are awarded so we would definitely have to make sure that our staff was appropriately. step I had the resources to make sure that in order to enact this new law that we have the appropriate people in place to do it correctly. I'm happy to answer any other questions. Yes Sir would. Okay I'm not saying that you don't need to people because of increased war. Let me go is this way are you adding two additional positions to what you already have appropriated and budgeted over there are two vacant positions that are but. We would need to add two additional staff persons to our what is that because of the the administering the new credit they would be an additional workload we would have to be evaluating the expenditures auditing the claims of of the credits will realize that but do you not have a thousand vacant positions over there. I'm not aware of having any vacant positions and and tax credits that were not utilizing them hello with and remit employment I'm asking you if you have positions vacant that could be used for this and cost a hundred thousand dollars if you've already appropriated but you have field we certainly have unfilled positions we that is certainly correct but this descended individual department would need to have those positions to be added to their to their department was or will have a mechanism where you income of the personnel committee with a LC and get that the. We we certainly do what we do we have to evaluate all of the legislation that it is enacted in the General Assembly to make sure that anything that is a new program that is going to give us new new responsibilities thank. Net they won't just affect this one department they're going to be other responsibilities that we have and we have to make a determination based upon all of our new responsibilities how we are going to allocate positions and based upon this bill it in our evaluation we would need to have two additional positions added to tax credits. And and representative maybe to follow up and I mean it seems like there's you know between seventy and you know maybe we get to a hundred entities it doesn't seem like a lot of work but it would be their responsibility to go back and verify all these purposes to make sure all the cable that's per been purchased go is going into that project the labor going into that project and and then making sure that the speed is the speed requirement that once that provider goes into the area that provide at least twenty five three so part of the other thing that these staff members will have to do will be to make sure all these all requirements are met so there will be some but I don't know if it's a hundred thousand dollars worth of at the you know you'll have them for that but. Yes Sir but there will be a little bit of work involved so I just wanna make sure I understand that I don't have a problem with the bill I don't have a problem with the additional workload. Well I have a problem with is you got vacant positions over there why add two more but I can't be any more direct than that what I add two more when you have a vacant position that's the reason were sent around here today with seven thousand vacant positions in state government on the report to we just got it yesterday in personnel what what do we have to add two more to a bloated role and I'm not trying to hurt your agency all I'm saying is whether we have to add to this no person mail when you get up vacant positions that you could transfer in the here and take care a person what we're going to have Secretary come down. wall thirty FAA of representative wouldn't the wait I would look at this is. Those are two positions you're talking about that if we didn't have this additional responsibility those two positions would not be filled so that the from up as we look at this bill and what it's going to cost DFA we would have to more people physically on the payroll that we would not have otherwise had and that's why we've we would tell you that that that that cost is part of the cost of the bill okay so but but are you adding to new positions and the your agents we have we haven't gotten to that point the bill is not been passed the Bill most of the time what we do is we re purpose of positions that are already there so that I would expect that to happen like we've been doing throughout this year. Thank you thank you Mr secretary thank you Mr chairman you're welcome Sir. President of the questions. Your body also speak against Bill. For the bill or submission close rebuild yes because I just close by and going out a couple extra thought so one is that in order for this tax credit to be claimed obviously that means there's fiber orders infrastructure being built that infrastructure means jobs so besides just the the tax credit and more of our citizens getting broadband it also means there's more jobs and work for our citizens so good economic development to the bill and the hopefully at the proper time we'll have your support again as things narrow down may we can the whole business may we can open this up more and maybe capture few more of our our cities and towns with that so with that I appreciate it and what you're gonna do we can thinkers and make this a like your bill is good bill and just everybody knows that representative makes as been a champion broadband for rural Arkansas so I appreciate all your hard work Sir all right all right members were is represented Penzo in a room I don't think uses a. President Sorenson you wanna I appreciate your patience ma'am. Members this is house bill sixteen twenty eight more wilderness bill as well. Absolutely. They do a bill. Right Sir thanks thanks very much for the opportunity to be here Williams just recognize ourselves when you get comfortable to school and start okay thank you thank you colleagues Ashley Hudson district thirty two I'm pleased to be here for my maiden voyage here in writing tax presenting this bill sixteen twenty eight which is not a tax credit that you heard from a representative makes previously on broadband but rather a tax exemption this bill would exempt solar equipment as defined it's just a little two page bill from taxation and the reasons for this really kind of came about earlier in the session representative and it he was in here a little bit earlier and I we're both talking about and it this type of possibility coming from from constituents both for districts and we started kind of looking into this and I was fortunate to be able to reach out to Mr halter's well who had great information on the the economic opportunity that allowing for this type of expansion of of solar could provide to Arkansas and I'll let Mister hoelter speak more to this since he is the expert on solar down here and I am just the the lowly representative bringing the bill but it's it's it's a really cool opportunity Arkansas is uniquely situated to really utilize solar and we. I have the opportunity to expand this type of business in a way that that opens up more jobs more good jobs all over the state it can really open up opportunity especially in areas like the delta and other under served regions and bring jobs to to districts down there where there may not be these types of opportunities right now and that you do have that the DFA fiscal impact statement it looks at about two point two million for fiscal year twenty twenty to about three million if you count an entire year twenty twenty three eight so but I think that what you will hear from Mr halter and what you'll see when you start really considering the impact that we might be able to have with it this type of exemption for solar equipment is that the economic benefits of expanding this type of business in this type of of really an infrastructure bill ultimately a driver for better infrastructure in certain areas will really be offset any impact that we see on this the fiscal impact so with that I am going to pass it over to Mr halter who has been working and in the solar industry and can provide you some more insight on his experience in the navy yeah well if you don't care is recognized yourself Sir thank you very much Mr chairman and and thank you representative Hudson very much for for your leadership and and also thank chairman Jett who is a sponsor of the bill as well it members of the committee it is a tremendous honor for me to be back in the capital I had the great opportunity to serve with many of you and regard to all of you that the work was previously is as good old friends it is true if it to be back. I would say that you know we're on the cusp of a great opportunity for the state of Arkansas all my life for all of your lives Arkansas has been either forty eight or forty nine ten per capita income we we know this we have been working hard at this and here now we have a technology that comes along that actually plays to many of Arkansas's natural strings the first string that we have is a state and and certainly representative McElroy and others so on this committee or very where a aware of it we have far more plentiful land as a state of than most other states in the country we also have land which is well suited for solar because it is flat. the second thing that we have is plentiful sunshine. if you look at the national statistics by state we are the tenth or eleventh most sunny state are out of fifty states in the country and of course the sunshine is the fuel for solar power plants and the more fuel that you have being pumped through the solar power plants the less expensively you can generate electricity. We also have the opportunity as a result of an act that you passed two years ago ACT four sixty four we have a remarkable demonstration of success of this investment in solar power I checked before coming here it is literally true that every member of this committee. Either has a solar power plant in your district or you've got one or two or more coming and I could go around the table and site the economic development impact locally from everyone of those. Representative McElroy has at least a hundred million dollars of economic investment in his district for the representatives who represent Hot Springs just the projects that my firm scenic hill solar has already under contract we're gonna be depositing twenty million dollars of economic investment into the city of hot springs over the course of the next year. In Sturch guard Arkansas population seven thousand nine hundred and two at the last census. We're gonna be depositing seventy million dollars of economic investment into Stargardt Arkansas over the course of the next two years you do the math on that and it winds up being eight thousand dollars of capital spend per man woman and child in Stargardt Arkansas. It is truly remarkable. We are on a path within just the next few years. Over a half a billion dollars. Of economic investment solely through solar power in the state of Arkansas. As a former lieutenant governor. I couldn't imagine. An opportunity like that and yet here it is and so I would say to all of you the thing that is most preeminent in my mind is making sure that we maximize that opportunity that we don't mess it up. So. Let me just tell you this is a sales tax exemption on solar equipment there are thirty one states in the United States that completely exempt solar equipment from sales tax. There are thirty six states in the United States that completely exempt solar equipment from property tax. Arkansas currently is one of only a handful of states that has neither one of those exemptions. In the handful of states that have neither one of those exemptions there are six states that have other financial incentives. For renewable energy and solar power so we are literally down to being one of only two states out of fifty. That do not have these forms of financial incentives for this investment. Now years ago I used to work at the U. S. Senate finance committee and so I'm familiar with being in the same position as the department of finance and administration where would have to come up with a fiscal impact statement and the fiscal impact statement of this as as representative Hudson as already noted DFA's notice is about three million dollars in a full fiscal year. But I would say to you ladies and gentleman that the other tax benefits that are going to be generated from these investments sole swamp. That three million dollars of sales tax laws that that is what I would say that you really need to be focused on. Let me also say that. We have across the United States and imperative driven by companies and driven by Wall Street that are demanding sustainability initiatives from companies all over the country. Bancos E. K. Arkansas's largest bank is a client of of our company. They're gonna drop. Eight million dollars in the state guard Arkansas as long as this legislature doesn't change the net metering rules. But they're gonna put eight million dollars in the Stargardt even though there is not a Bancos de que branch. Instacart. And the reason is that star guard has the land the place to interconnect and because the city of star guard has been incredibly friendly to these projects. Many of you may have read an article there's not been a tremendous amount of news about it the General Motors. Is going to build a hundred megawatt which is a at least a hundred and fifty million dollar capital infusion in the State of Arkansas they're gonna build a solar power plant for their purposes in Arkansas. This is an opportunity for Arkansas to become the place where the generation of electricity for other parts of the United States occurs. And we benefit from all of those property tax revenues from the income tax that comes from the construction and from the income tax that comes from the profits off of these operations. I don't mean to to go on and on here I there's there's more I could tell you but I just hope that this is a compelling message and that you can see the clear cut economic benefits of what's before us and with that Mister chairman I certainly would be delighted to answer anyone's questions thank you Mr alter members have any questions. Go ahead presenter. Thank you very much I certainly found modern so or of. Three part question how much of this appointment is being manufactured in Arkansas how many jobs do we estimate it's going to be created for the installation and then once it's there's maintenance jobs later do we have any long term jobs idea yes thank you very much represent excellent question so very little of the equipment is manufactured in Arkansas. this is a global market we have certainly I wanted to pursue those opportunities there are a couple of exceptions one of which is already here there is a little rock based company that manufactures electric wire and they are a big supplier to the solar industry around the world so there's an advantage there I can't I'm under confidentiality agreement so I cannot reveal which particular company but I can tell you there is a steel manufacturer that is looking at moving into manufacturing of the steel post that are used of for these for these projects your second question on job creation. let me let me speak to that from real experience so for those of you who and driven in Northwest Arkansas on interstate forty new passed through Clarksville Arkansas next time you you go past there at exit fifty five just look right and you'll see forty two acres of power plant that we built and actually that we own and we're selling electricity to the city of Clarksville. That project employed a hundred different tradesman craftsman and men and women and so forth eighty five percent of them were our Kansans. Eighty five out of a hundred they're good paying jobs they're they're good paying jobs for those folks I as we like to say shower at the end of the day rather than at the beginning of the day the appreciated it if you want to see how enthusiastic they are about it we've actually got a little video on our website and we just have them talking about the project and and how much they enjoyed it your third question was on operations and maintenance. So virtually all of that is performed locally. So the so those jobs nine not every bit of it I don't want somebody to call me out you for exaggerating everything because some of this relies on network operations centers that monitor the equipment and that's done twenty four by seven and it's typically done from you know I T. network operations centers but the actual electrical work mechanical work the maintenance of the grounds and so forth those are local folks that are performing that work. Sir. Thanks Sir we're not sure question Sir. Thank you Mr chair and Mr alter your with your experiences former lieutenant governor you might be able to answer this with more of a wide perspective. So this is great on the front end and I think that you know looking at renewable energy is a wonderful thing for us to be doing is a state for you to do in fifteen to twenty years for disposing of all of these was great questions and options and and how would you just and I and I really want to lean on your perspective is for lieutenant governor in having a broader view there the the cost solid waste districts how are we going to find the disposal of these items because we we're putting them all over yes everywhere yesterday now incentivizing it yes Sir representantes great question and the good news is that people of very smart people and very good businessmen and women are already thinking about that they're actually already taking action so let me let me walk through the main component parts I think you'll see how this can get can be resolved so for the steel obviously that steel can can be recycled that is not a big deal and and in terms of the weight and the aggregate amount of matter a representative box that's the line share of it the next biggest category of weight is glass on the modules in a course that is recyclable. there is very little by way of toxic material of that is inherent in this in fact most modules don't have any toxicity at all there's one particular type of C. N. film module that has cadmium telluride in it and you do have to take some special steps with that I would say in terms of time frame we're talking about assets of the modules that now have a rated useful life for thirty years and the reality is you're going to have out there longer than that because you've already paid form and they're still going to generate electricity. The the in the side of the module sales are manufactured in much the same way using much the same equipment as the inside of your computer the integrated circuits and it's not a lot of the material by volume there are existing firms businesses out there that are there in the business right now recycling this equipment and they are going to put a market price on it and I guess what I would say to you Sir is that the market is going to take care of it in that very little of that is going to wind up in a landfill. Thank you Sir. Good. Questions. Thank you anybody else will speak against the bill. For the bill results in your clothes for your bill now. I'm sorry Sir. I do not issued under Paul. We don't we don't wanna make you miss this opportunity I know he's been looking forward to hear that. Okay nice to meet you. Thank you Mr chairman was the committee Paul guarantee of thanks president Hudson or presentation did cover the fiscal impact statement of two point two million in the first fiscal year and three point one in the second fiscal year happy to answer any questions many questions. Thank you probably believe. Richmond has your clothes for you bill mail. If thank you Mr chair and colleagues at that think that to us Mr halter really did the line sure to work on this and this is just an extraordinary opportunity for our state and obviously we know that sellers coming in regardless but we could really ramp up the the interest and the job creation and the the ability to start exporting renewable energy to other states and selling it I mean there's there's a lot here a lot of possibility and the and and like every every dream it all starts with taxes so. with that I'm close for my bill I know that you all will be discussing all of these in the days and weeks to come so I will remain available of course with any questions I know that Mister hoelter will certainly be available as well but we very much appreciate your consideration of this The and hope that we get to do pass thank you thank you ma'am thank you the Attorney General said combat. Okay members were down to two more opens to be a short and sweet. Represent Fortner twelve all members one to House Bill fourteen sixty nine and we have an amendment with this bill as well staff or pass out. Thank you. Okay members we're going to here fourteen sixty nine we are going to take a vote on this one today. Representative Jett when you're ready to go ahead and present your bill okay this is the moment the members on the bill when the when the bill come out it it it to defy it and acts as to further define what bill Arkin access through their records so basically this with amendment does is make sure that bill are inside the bill if we pass this out today cannot access personal information of taxpayers but information us to safely and in the aggregate and then this is my amendment my bill in the dot the member-elect's plane the bill so with that Mister chairman I'm closed okay S. the answer the questions is anyone have questions about the amendment. Okay Sir motion except amendment. Motion all in favor. Okay the amendment passed. Okay present your bill as amended thank you Mr chairman members I think you know we Senator pretty much all session we heard all these tax credits and this bill is no way shape form reflection of DFA the work they do force. But over the course of you know my career here in the General Assembly we've always talked about getting dynamic scoring DFA they score everything the static sense you've heard that today you know you hurt you know if we had a dynamic scoring you know this bill might cost state say three million dollars but the impact is going to be coming but you know money come back to the states through economic growth whatever the commanders. So with that several folks leadership we're talking about. Maybe we can actually have our own consulting firm to because like I said if I does not score in the dynamic sense only score static so we like to have our own consulting firm during session time to bill to consult with them to get to master these questions because if you say you know these members are coming to us nor center trying to figure out what we let out what we try to hold based on how much money we things come back to the states so on so forth. So what this bill really does is it gives bill are. The state statute can access the DFAT numbers and the statistical sense in any aggregate is not accessing individual taxpayers information nothing private U. K. doesn't get bill are the right to access you know my information live represent warns information nobody's information is just that we come in we want something scored. Can we get the numbers in aggregate can we get this is to school information to make qualified responsible decisions For us not to take anything away from DFA also everybody keeps in mind they understand the fact that they do work for the executive branch and they don't really work for us you know they're they they answer to the to the governor and so what this bill would do this gives bill are. The option to based on through A. L. C. to put out an RFP. Now this don't give it don't give we're we're not putting our P. out through this what it does is Marty Garrity says that this should be the first step as we get out of session and get A. L. C. once he gets up and running we can put out an RFP to go hire an independent consulting firm so that way that we have access through to score the stuff in a dynamic sensor just get us going period So it like Senator I will be clear you know we're not trying to access anybody's individual information we're not trying to to. Get it anything nefarious it just we're just trying to get to the point where we can get information and the dynamic scoring sense. And so the way I see this going in is at the end of the day. If we approve this today then A. L. C. will take this and they will put out an RFP and then we'll see how much money's going cut because I have no idea how much money is going to cost and might be once we approve this it might be actually to the point we cannot afford to do this and who knows something for a seated terminal later but but we put out an RFP we get consulting firms come in and build it out and then through that process run take a look at what how long do we keep we keep them in my mind maybe too much for session starts during session time maybe two months after session maybe not keep mall the whole two years the biennial but anyway long story short that's kind of the fifty thousand foot view Mr chairman all happy to entertain any questions do you have any questions members. Seeing none is there anybody in the audience oh I'm sorry representative Jean. Thank you Mr chairman chairmen Jett don't you think that giving a separate entity discordant tax proposals will give us some increase strength because sometime right now we do not have of a for a firm footing on what was the phone call for this. Yesterday I mean I'm really hasn't to to to to go down that but I'm since you asked mail answer the question because anything I say my it might it might sound like I'm taking a shot at the of nine that's not what this is about I mean I'm just hundred percent straight up doll that's not what this is about but but that we've had in years past we've had the chairman James found on the governor's two four five point nine Plan last session you know without a mistake this section you know we're kind of his lover he is with the FAA on On the two hundred million dollars on a PPP you know we've held some money back because we don't think it was scored it faces a discord is baked into the budget so I mean it's just it's just it gives everybody peace of mind we're dealing with so much money here and we just immediately and I'm saying this but DFA DFA has the folks they're they're smart enough to work there that's that's intelligent enough to do what to do the they they they they try hard but what happens with the FAM and I've I've spoke with Lori Walter about this as well I think I think what happens sometimes we're so compressed and such a short period of time in light poles during what to the if he comes down and you Gascon I mean I might have fifty phone calls in a play with them trying to get a score at or multiple scores out so we're compression all this ask D. F. ninety impaired about five or six weeks and had a had in throughout the full year had they had time to work on these issues forced this land out for but one when you have somebody and I'm just one individual and so you got Dismang sample and Hickey down on the other hand you got myself Lane Jean the Speaker and everybody else on this and then you then you got with the governor's folks are asking is just to me it's just overload FOR D. F. and I and I think this is just another tool that discount to spread the workload out that helps everybody so I don't know term June of an industry question not but established under and and my comment was not to. criticize the event I think they do a fine job but in most states as you will know when and I know talking to people their their house and Senate has their own finance and they get they get a a a a executive of look at this and get an executive and this will just give us a legislative it just a different angle different people and try to get the numbers as precise as we can would you would you agree with that yes Sir and the money part also because somebody and I will get accuse growing government again you know this really not trying to I'm just trying to make good government better but the money part of this would be in the house is already appropriated so much money for the house to operate to Senate appropriate so much money for the Senate to to operate as well so I'm assuming the money there's no appropriations made for this the money just like this Committee years allocated so many tens of thousands of dollars that the year so the money the money part if we so choose to put this out today I'm assuming the money part is going to come out of the house and Senate will start appropriated must already allocated to both ends of the building so this is this money will not be coming out of general revenues. A representative would you have questions. I have a motion to make at the appropriate time Mr chairman all right a representative warned if you have questions. Chairmanship or know that you and I have had this to. likening this to what we have in retirement. We have our own. firm that we contract with to do our call studies and I I just can say it's it's been really nice to each of the systems have their own actuary as well but. They do theirs but we have a guy that does a cost study for each one of our bills. because of course with us it's not as much it's not exactly like this but we want to make sure that we're not Adding to the unfunded liability but. Is that where you're going with this you you're getting a total picture. Of what you're you're facing not just revenue cuts but the other side of this picture as well yes Sir like Senator not just goes back to the dynamics when we heard and what three four bills today that probably if we scored dynamic scoring would see the fiscal impact of the state would be a positive as opposed to negative election is not to take away anything different it does is just a score static in the best way we've always done and we just thank us is time maybe to move this state forward a little bit here and I'll. Okay is there anybody already speak for the bill. Against the bill. There any more questions members. If they did you want to speak. Identify yourself for the record thank you Mr chair Paul Goehring with TFA when it extend my appreciation to chairman Jett you know I've had a number of conversations about this legislation how to get it to where it needed to be so we cooperated and and we work together on an amendment for this bill to make sure that the information that we provided would be the most productive and useful information for the LR and their consultancy you should they decide to hire one but also we want to make sure that we were protecting taxpayer information as well we make sure it was air tight that we would not have an obligation to release any confidential taxpayer records audit reports names any other identifying numbers of a taxpayer so we really appreciative of for procurement jets efforts to get the bill in the best possible forms that we could so I'd be happy to answer any questions any questions members. All right thank you Paul I believe we have the missed representative would you want to make a motion. Your phone stop. So your clothes well knows just Senate representative would not misspoke I don't I don't wanna short him a chance to talk down there are you close for your bill I'm close thank you okay now representative who thank you Mr chairman let me say that this this is before a. I make a motion this is a good email this is something we've needed for many many years and state government in fact my next bill of this going to be a similar. A similar of bill to this but this is much more efficient and much more effective and will save the taxpayers money but it'll give a balanced approach to our budgeting system so my mom motion would be a do pass. And as amended as amended. Committee. Is amended all right all at high praise and flowers on his desk to all right we have a motion. All in favor. Opposed. Congratulations your bill is passed thank you members I don't let that go to your head because we're not going to vote on your next will you guys have a Tennessee trying to keep me humble so I appreciate the effort all right members one last bill here and this is a a county association council bill sixteen ninety eight of this bill does have fiscal impact and miss Lindsay Bailey is going to come up present the bill forming and just know that we will hold this bill. Thank you Mr chair thank you representative Jett for a allow me to present this bill if you it's not a special honor I'm it's a northeast Arkansas thing. I guess. We got each other's backs of their. Okay and this is a short and simple bill with two parts it's dealing with delinquent property taxes in the first section section one most of you are probably familiar with DFA's income tax set off process. I'm looking for Nanzer nose yes okay well for those of you who are not I'll just give you as a quick a introduction to that process there are claimant agencies that are listed in the tax code in twenty six thirty six three oh one three and it's mostly state agencies and local governments and they can take debts that are owed to them by Arkansas taxpayers or other Arkansas resident debtors and does submit the amount that's owed to them to DFA as well as some other identifying information and if that person is owed a tax refund on their state income taxes then the if they can intercept some of that amount to give back to the agency that they're owed. currently a county collectors and treasures are already on that list this bill doesn't change that the problem is that they're AG opinions that say on delinquent property taxes County collectors cannot collected delinquent debt and less it's the full amount that's owed to the schools in the taxing entities so for instance if you owe two thousand dollars in delinquent property taxes but that there only a able to capture maybe two hundred dollars from an income tax refund then that's obviously not the full amount so section one of this bill would allow them to to capture that amount even though it's not the full debt owed and that amount would then be distributed to the taxing entities. And that's that section one. Section two of this bill is much more simple than section one even currently DFA takes five percent fee it's called a collection assistance via the code for all of those claiming agencies that I mentioned earlier except circuit courts and district courts which were added in nineteen ninety five and they're charged a ten percent collection fee this just lowers the rate from ten percent to five percent for district and circuit courts to be on on the same level playing field is all the other agencies it doesn't cost the FAA anymore worker anymore money or any more resources to collect for the court than it does for anyone else there is a small fiscal impact of around forty thousand dollars with this bill but DFA's said that they they are okay with this bill and I've been told the governor's office also supports the policy behind it speaking of static scoring I can tell you that if we're able to get the collectors on to do this from section one of this bill and if we're able to get the fee lowered from ten to five percent and get more courts doing this will actually bring in more courts and more County collectors during this process so I think a lot of that forty thousand if not all of it would be made up by new clients using this process okay thank you they don't have any questions. Seeing none representative Jett are you close for your bill I am. All right well thank you In order to set up we're not going to let this go yeah pay attention okay thank you though all right It has been representative we have just a little bit of announcements a representative represent Mister audible chairman Jeff thank you we should get it straight okay member so here's here's kind of the game plan or right now leadership talking maybe about letting twenty five run twenty five million dollars out So DFA's going to send you a spreadsheet was with the bills that we've already had the we've heard Brenda's going to send out a spreadsheet of what's held up in committee so you'll get two different spreadsheets sometime In the I'll text or email everybody else is not in here that's what we like you guys do is pick out the top four Bills and you like the most. and so we're trying to score these last night several of this leadership met together and we kind of went through what we thought was good policy bills of ours tax cuts tax credits tax deductions would also obviously this committee in the Senate referentes Committee has if you say what we're actually it out no we only time a twenty five million dollars or is Sullivan is going to get it up pretty quick here but in the. So anyway long story short when you get these tried attorneys back in maybe around Tuesday to myself or the representative Fortner up there and then what I see happening in and also also remember this man members we're going there's more bills were not done we've got a handful of other tax cuts tax credibility at there so so what come back revisit this issue again but this time to you know we're down next week we're down to three more weeks left in the session so it's time to start wrapping this thing up pretty quick I think our society governor coming days will start working on our site next week so things will start coming pretty quick as so a long story short here's how I see this thing planned out so everybody gets the the spreadsheet take your top for terminal myself represent Fortner we're gonna meet Tuesday were runs more tax cuts tax credits tax deduction bills Tuesday Thursday morning will probably just wanna get committee together someplace in the capital I'm not sure we get this room and all they want is one discuss the scoring run to and wide open or body can see it we're not going try to scrutiny if allow loss anything like that they were having a debate on everybody's we're we're we're kind of correlate everybody try to pick the top for out of everybody's Bills and we're gonna have a debate on that and then we'll come back Thursday and I'm anticipating that will actually run the surtax bill in the car tax bill Thursday afternoon so that's kinda how I see this thing planned out to ya and I got questions. Okay if you think something does feel pretty give me a call our. I guess the Mr chairman done I guess all right well thank you all for your time and patience have a good weekend.