Insurance & Commerce - Senate

Well. I thank you for waiting on a couple amendments to get signed here I think we should all take this moment in time to wish Senator Teague a Happy Birthday so everybody. We are not saying. So now that we've totally lost all decorum will turn can bring that back on the rails. All right how we coming with all the amendments we we good. Okay wall senator Elliots get ready with the amendment here I would focus the members attention to the calendar and I want to thank you and staff we are to a point where the heavy day to day which some of those are going to push to Tuesday. And every day next Tuesday Thursday only has two bills on it so we're catching up just keep log in we'll get there so. DO anything else staff. I would mention to the audience if you would like to speak on any of the bills on our agenda today please come see the sheet up here with Sherri she would take your name and phone number and whether you're for or against whatever certain bill. Yes you're recognized Senator Elliot for comment yeah yeah I just a comment to the audience anybody listing either you know on the TV or in the audience now on Senate bill three eighty one that I was going to run the day we move into our next Tuesday but I have yet to hear from anybody who has an issue with this bill so if you have one could you just go ahead and let me know so I can see if I can address your concerns I've just had nothing. Not seeking anything I'm just giving you notice that's all and in the absence of Senator Breanne Davis in the room I think she wants the same accord she mentioned that to me as well. Okay. Are we. This. You know what I'm I'm already going to others My chichi. Okay to begin with Senator Irvin why don't we introduce to you brought to the table with you first so that we don't have to do that mid stream could you do that please yes I'm Senator Missy Irvin with District eighteen. I'm doctor Jonathan Laurier and professor of surgery at U. M. S. John the flowery. Is he on the she. Okay just one second wall could you spell your last name please Dr Lowery abilities L. A. R. Y. E. A. all or. All right senator urban you are recognized to present bill Senate bill three oh nine. Thank you members of the committee and I very very much appreciate artillery being here today with me but we uh it's really an honor to present this legislation and what this legislation does is it lowers the age from fifty to forty five container rope to second I understand you have an amendment we and so we probably need to deal with them at first estate optimal. DO wanna explain the member just to pass a committee member sure so we just we worked with insurance companies on this amendment so just per request and trying to accommodate different requests so could. I think I might have questions on the amendment Senator Elliot you're recognized for a question. So what's the difference in FY I'm just curious about preventive screening test assign either grade eight or grade B. is that an improvement or is that. Of lowering the bar what what what's what's the effect of that that we don't already have is when I'm what I want to find out I'm not sure if mac screen what is here they're the ones that requested the amendment and if it is a good question I know like I said it was just to accommodate the request of the insurance companies that we worked on the bill with but to be specific yes I I can't answer questions on the on the on on where we strike a colonoscopy every ten years I'll get the answer for you let me get back okay why we do and that. Is there someone with you that could text and get that answer senator because I think we might have another question for you as well. At any other questions from the committee. Seeing none will wait till we get that answer. Okay. Yes. So I'm I can't speak to the general bring you are recognized. Thank you I can speak to general principles of what the grades are so that you as preventive services task force looks at all the evidence that's available and makes recommendations based on the evidence that's available and so the evidence goes into different buckets a and B. being that where there's a lot of evidence for that and so in the past the insurance companies and met and CMS I've looked at read the guidelines from USPS the US preventive services task force a and B. as the ones that do would they would pay for. Okay all right now so may I please all of the ground yes. And so what does that mean is there what is it what does that mean for a patient that they won't pay for something else I mean is that is that Jeopardy in health or is that okay in your opinion that somebody might not get be able to get whatever's covered by a or B.. If the insurance company won't cover has something that's that's not a or B. what does that mean to a patient's what I'm asking yeah a means that they will have to pay out of pocket now I mean their health or the health do you don't have any money to pay out of pocket well then that that will negatively affect the House in that sense. I thank is it a really urgent thing when you get below get away from a and B. but I might be okay or is it. I don't know if I'm making sense with this I'm not a I'm not be I'm see it by if the insurance company is not going to pay for the C. category what does that mean to me as a patient is that something I should be concerned about from my health I know I have to pay. The the only difference is whether for the that individual patient the recommendations for an and the categories of A. M. B. don't apply or there's an issue with that so typically if there is a reason why the patient cannot get the category a or B. test then we reach out to the insurance company to argue it out and said these are the reasons why this patient cannot have their recommended test in category a or B.. Senator night nobody's here yet from the insurance company nobody's they're not going to be here I'm. I I've asked for them to be here I mean I ask I'm they're texting them trying to text them but again I can. I don't know what else to do Mr terrible I just think that's a pretty important answer for me but I'm so that what I'm understanding that was a and B. applies to the tasks that but not to the patients. So that's what the a and B. standing is applying to the different tasks but not necessarily to the patient. And we also have a the insurance department Insurance Commissioner here if you have specific questions for them as well. Do you have an estimate of how long whoever might be till they get here they won't be here today they they had chemotherapy. Okay. Well. I see that we've asked that question of this struggle for an answer what is the will of the committee are there any other questions are we going to vote on the motion. I'm trying to get my and then the on my bill we're the motion is on the amendment it did you make a motion to pass I have a recognized that yet I make a motion to move to place the amendment on to my bill yes we have a motion to accept the amendment and I have a second from Senator Teague. And I have a question. Since I'm not going to be voting for this for this motion Fite and your no reason other than I needed to have an answer so. If we passed this motion senator if something comes up that is is deleterious to the patient by not being able to get whatever test it is outside of a or B. are you open to consideration for fixing it I don't know how to ask you to fix it because we I don't know what we're. I don't know what the insurance company is going to say. So yes senator Elliots thank you for the questions and I think that your perspective is probably very aligned to mine. I the purpose of the bill is to try to It's it's really to try to lower the age from fifty to forty five to catch more collie a rectal cancers there are testing that's available for the indication and detection of colorectal cancers without doing colonoscopy ease and so we would want those to be encouraged but we also want those tests to be encouraged and paid for if they actually do work and and I'm fine with the language that was presented by the insurance companies to work with them through that issue there are several things that can be used as testing that are indicators that would then lead to perhaps a colonoscopy. but again I think the language to me was acceptable because I felt like it was reasonable there are out of pocket expenses that patients will occur that's just a normal course of business with their insurance plans and their deductibles and those types of things however you know the main purpose of the bill is really just to lower the age of the screening to so that we can catch more color rectal cancers before they get to a stage where it's survivable for the patient so I was happy to work with the stake holders on this bill to accommodate their request because I appreciate that type of dialogue and and. Well I think that that that that's a good thing I'm I'm I'm fine with the lord the age but it I just wanna be sure we didn't on the one hand or lower the age that we catch people out and and earlier stage but not have somebody in a crucial position whatever the C. category maybe whatever that means and then not be able to be covered that's all I'm I'm not quibbling with that that you know at. This is a bill I worked on back in two thousand five and their changes happening with it I remember how hard it was to get what we do not so that's why that's part of where I'm coming from. I'm finished Mr okay Senator Hickey did you have a question. Yes I. Senator other women in the church I think to I just make sure that I'm I mean the reason it is in entirety. I'm not for sure that it wasn't allowing more because if we do page three. It looks like to me would do the page three. And we're gonna leave in if you start this is the correct screening Jon Bon examination the entire colon including. And then that's where it starts with all examinations lab test or preventing screening assigned either grade a or B.. It's almost like to me that we possibly could be could be covering more with that. Because we go on to say. Because I believe. Then we also relieving in if I let someone missing something the higher the houses to sensitive the school test or the structural and the business visual exam you want to phrase that to the doctor or to senator Bernie the one. Yes so you know based on what you're saying is that's actually expanding the the indications right and that's and that's that's what I think would sit I'm not for sure the the Amendment is not allowing. You know. it's being more liberal for lack of a better word you know we're actually allowing allowing more to happen which I think that might have been your concern. So. Okay may I and and by the Insurance Commissioner up to also address absolutely fees go relevant information to the germane to the topic. If you store please identify yourself for the record and. With the insurance department will take my mask off These grades or grades given by the United States preventive task force and I just look them up wall while the discussion was going on good day means in colorectal adults ages fifty to seventy five the great a recommendation is the recommended as a recommend screening for Colo rectal and all adults ages fifty to seventy five years and grade B. means recommend screening for colorectal adults ages forty five to forty nine years so it's interested educated reader friends. In grades and so I think this is what this is saying is it's adopting those age brackets for correctable lab tests to clarify this sure you may have a follow up Senator Hickey but to clarify the chair that is an expansion of the population that currently does that is that not correct in groups it. Instant to answer senator Elliots. Grade C. is adults ages seventy six to eighty five years old on the other end of the spectrum right okay. Allow me make sure I'm done with Senator Hickey first or you you finish okay Senator L. you're recognized so when we get to grade C. is are we is insurance company covering the covering grade C.. And somebody is how old. The seventy six to eighty five and I'm just kissing carried. I don't know the doctor would speak to this the. The statistical probability of of kind of rectal cancer is less than. Four I'm not sure why they have that they've made that distinction but it's it's a gross by this preventive task force and those are the seventy six to eighty five year old a five year olds okay. Two. Are we good. Do you know what their government by Medicare. so they they are not so here we're talking about screening the screening is for prevention of cancer so the idea is that for someone who has undergone screening since there were fifty I two seventy five in the have really no I that risk factors then the recommendation is to stop at age seventy five now when you come to the patients who are older than seventy five you have to look at the the life expectancy so they have to have at least a life expectancy off over ten years for screening to be beneficial to that age group so this is this is the difference not someone who has symptoms you're talking about screening ways this is someone who has no symptoms yet is screening to prevent cancer so that that's that that rationale behind that okay. Do you have follow up Senator LA you're still with the microphone okay the chair has recognized the motion do pass on the amendment to be added to the bill and I have a second do I have any other further questions for ask for a vote on that. Seeing none all in favor of accepting the motion as presented to Senate bill three oh nine police say aye. Same sign opposed. Your your amendment is added. Okay. So Senator Irvin you're now. To present it Senate bill three oh nine. Thank you. Thank you members of the committee I guess again I want to focus us on. You're if you're recognized again I wanna focuses on to the idea of this is a screening process and what we are talking about is paying for those screenings for prevention of cancer and lowering the age from fifty to forty five it is important to note that Arkansas is currently the fifth deadliest state for call your rectal cancer in the United States and this bill off obviously aims to change that statistic Arkansas averages a hundred seventy new cases each year for people fifty years old and younger and this will drop that age from the script for collector Kali rectal cancer screenings from fifty to forty five this allows as I said before doctors to treat patients and to detect those cancers at early on sat increasing the survivability rate and win this cancer according to the American cancer society when it is detected early in the process the five years of a survival rate is ninety percent compared to fourteen percent if the cancer is found at a later stage and has spread to other parts of the body and so you know I think it is It's really we we have people that we have services that we currently serve with actually in our Senate that have been survivors of call your rectal cancer my grandmother died at call your rectal cancer ends being able to catch this and young people is really a game changer towards their survivability of being up to survive cancer and so I'm really proud to be able to to to sponsor the bill and I'm just going to say that Senator Lance Eads is here I'm talking about he is a collie a rectal cancer survivor and he would have been here today but he is on his way to see his daughters play ten nine eight in Northwest Arkansas but thanks to the aggressive care that he received he's a survivor of color right to cancer so I really just want to you know kind of run this bill and recognized him and how he has been a voice on this and I think it's really important that we have a voice on on this cancer and to encourage people to get screenings when they are younger in age and again I think the questions are very importance to this discussion but this is this is this is ensuring that insurance will pay for early detection screenings if a patient does presents at any point in our life with symptoms then those those tests in those colors Moscheles and that's procedures will be performed and will be paid for and covered under insurance that happens every day so you know this bill specific to that portion of the screening process and how and I'm happy to report with all the stakeholders to bring this bill Ford okay looks into the questions Senator Elliot you look like you might have had one still before we did the you're now okay I saw Senator Hammer first and we'll come to Senator Ingram center amber you're recognized. For question. Thank you Mr I just wanna make sure I'm interpreting the bill right so if they present. With verified. Medical test results that show. That they have a high probability Fort then the insurance company is going to have to pay at that point in my interpreting correct. When I look at the whole bill is that kind of the intent I mean the intent is to change the age from fifty to forty five but then it you're correct in saying that that the need for a follow up colonoscopy then also would be provided for in and pot covered in payment Page two top of page three. Okay follow Mr you're granted okay so it's only gonna be after there's medical evidence that's been presented. That shows that central for the cancer is there. What what was the position on the insurance companies. In response to this because it would seem to me like they would want to to get ahead of it Sir for more costly. You know and not to mention quality of life issues down the road so and I don't know if there's any in the room or not but what was their interaction with you. Matt I think that's a. I think they appreciate the bill and I think they appreciate that what we're trying to do and and they were happy to work with me on the bill to your point yeah if you can prevent this early on and you can catch it early you're going to save a lot of money on the backends obviously I mean not only is survivability rates increased for that patient but that also means that if we can take take take take care of it AT early onset it's going to prevent a lot of What clearly pain and suffering for the past I will let the doctor talk about it because he knows more about that because he deals with this firsthand but to your point preventive care always usually I mean always is going to save us money at the back end of it. I'm satisfied motion want to I just wanted to clarify a fine you're recognized it so I think that where you where according is talking about so when we talk about screening that this tool tests and then the optical test was the colonoscopy and so sometimes what happens is if someone uses this to test a test Cologuard all fit test and that turns positive they need a follow up colonoscopy and the way the insurance companies currently treat that is that the screen was that stool test and so for the colonoscopy the patient has to have out of pocket cost and what the bill is saying is that the follow up colonoscopy if someone uses one of this two test as the initial screening and the it is positive and the need a colonoscopy than that be considered as an extension of the screening so that it gets paid for and the patient doesn't incur any out of pocket costs so that's the center shall we can that Senator Ingram you're recognized. Of it I think you said it best the the the primary purpose of this bill is to move from fifty to forty five and there's nothing else in this legislation of any significance it changes anything other than moving it from fifty to forty five. Yeah I think I think that's what I just said is the other aspect of it so moving it to forty five in the I that state is that if someone get screened with this tool test we can spark positive then to follow up colonoscopy has to be considered as the completion of this screening rather than a diagnostic test got that for you okay. Okay Senator Elliot you're recognized. Do it's is this recommendation in line with the American cancer society's recommendation something that would really does help to know that. Yes. Yes it is I'm not truly the American cancer society in two thousand eighteen actually preempted this whole thing by coming up with recommend guidelines to to decrease that recommended screening age to forty five based on the looking at data and someone land that was done and I actually currently as we speak to you as preventive services task force has also changed the age to forty five it's now in at four it in the period of public comment so they have actually also made that that change well I think we just be foolish to to make an issue out of lowering the age so because because so for me that is just a non issue not even up anything I need to discuss I'm trying to find out about the other part white if there is no change at all and let's say it's not one that we even have class A. and be in there because that leads me to believe that there is a C. someplace so is the call as a color guard is that kind of like a C. category. Okay I give up thank you okay. Thank you senator Dismang question you're recognized inside I think I'm going to try to explain the importance of it means go in for. If you put the test PAS whatever going for a colonoscopy there's there's two different price points as one on me they don't find anything it is this and if they do find something they do it all at once then your you have an additional bill and I think what you're saying in this. Is that whole second. Procedure then as part of the initial screening. And that that's that's is that is a significant thing amendments meant M. into someone else doing a misunderstanding with that is a. Okay thank you all right Senator Hammer you're recognized for a question thank you Mr chair so I'm sitting here worrying about what insurance companies are saying Max as they want early screening and so by dropping this down the insurance companies are resistant to this correct. That's correct okay it read and at two point I mean so the. United States preventive services task force just made this recommendation to lower the age to forty five said this this bill reflects that recommendation and it It is also consistent with Medicare and the Arkansas the American cancer society supports this and everything but I just had a friend pass away that was I have a friend of mine's husband that passed away and he took the color guard test which indicated a positive and then he had to go for a colonoscopy six months later he died. And it always just because his wife said you should take this test and so you know as as advances are made in screenings I think it's good for us to keep up with those advances and allow those to be good tools to use for real preventive care so that my friend's husband yes I have been caught earlier. You know could have been here with us and what is the necessity of the bill that we had and want to try to get my mind around what's the necessity of the bill that we have to do it legislatively that the insurance companies could do it by policy. Because that seems like good practice yeah no I appreciate that question I'll let these ran from the insurance department address that question. Skews me I think one of the most important parts of this legislation is the fact that the follow up colonoscopy is done at no cost sharing basis so there's no cost sharing or coinsurance involved whatsoever now if this passes and that's a little bit different than what the carriers were actually claiming or originally are starkly on these okay thank you Mr. Okay any other questions. Is there anyone in the audience who would like to speak for this bill. Please come for now we have one one name down here but feel free to come to the end of the table identify yourself please. Thank you my name is Brian got along with the exact sciences and good afternoon chair pitching vice chair Teague and the members of the Senate committee my name is Brian get on the social director of advocacy at exact sciences the makers of Cologuard Cologuard is a we've heard a little bit as an at home colorectal cancer screening test and senator Elliott it is among those included as part of the US preventive services task force guidelines under the a and B. services thank you senator Ervin and a committee for introducing Senate bill three oh nine and taking up this important issue which is really at a most critical time for Arkansas I want to begin with a very quick story two weeks ago we hosted a PGA tour champions golf tournament in which every pro plate on behalf of a colon cancer patient survivor care giver the players wore ribbons with their survivor or care givers name on it and Arkansas's own John day not only wore the ribbon he went the extra mile recording a personal message and tweeting that he was praying for the patient he played for J. J. singleton. J. J. has gone through ninety five rounds of chemo in his fight with colon cancer when he saw the gesture from John Jay Jay said he was speechless and blown away the John represented him. In fact I have a card a John sign for JJ that will be sent to him next week that's just one story the American cancer society estimates that a hundred and fifty thousand Americans will be diagnosed with colorectal cancer this year more than fifty thousand will die. We applaud you for taking up this bill during national colorectal cancer awareness month and I can tell you that similar laws in other states are breaking down barriers to screening by getting more people screen you can catch colorectal cancer earlier when it's more treatable as you heard Senator Irvin say or better yet prevent it all together in fact it's estimated that sixty percent of colorectal cancer deaths are preventable. The timing of this bill is very critical at the start of the pandemic colorectal cancer screenings dropped by ninety percent to get the screenings back on the books patients need choice this legislation would cover all the a and B. rated tasks for tests from the task force including Cologuard. Today more than five million people of screened with Cologuard and our tests finds ninety two percent of colon cancers overall and has built in patient navigation providing twenty four seven customer service support to answer patient questions and remove the burden from health care providers the big part of why coal guard so popular among both patients and providers. Since getting FDA approval in twenty fourteen we work closely with payers around the country. Right now more than ninety four percent of code are patients pay nothing out of pocket for their screening. Yes Blue Cross blue shield of Arkansas is actually the only Blue Cross blue shield and only major payer plan in the country for that matter that does not cover coal guard. Characterizing it as out of network the affordable Care Act mandates coverage of all United States preventive services task force a and B. rated preventive services. ASA blue shield of Arkansas even follows the task force guidelines in its policy coverage it chooses not to include Cologuard this bill creates a perfect opportunity for Blue Cross blue shield of Arkansas to put coal guard in network and allow its patients and health care providers access to all screening recommendations screening tests that are recommended by the guidelines they follow again including coal guard. Arkansas has made great progress from twenty twelve to twenty sixteen the CDC reported a nearly nine percent increase in Arkansas adults fifty to seventy five who are up to date on their colorectal cancer screening the largest jump of any state. Yep Arkansas still ranks in the bottom half of the country in screening rates and just forty third among adults fifty to sixty four. Arkansas can continue moving in the right direction in this bill can help and Cologuard can be part of the solution. When called up to cancer is detected early roughly nine in ten people survive. Confounds late only one in ten make it five years. Screening and early detection matters by lowering the screening age and removing a major hurdle to follow up colonoscopy ease the members of this legislature can continue Arkansas's momentum toward improving screening rates and detecting colorectal cancer earlier for all these reasons exact sciences and Tuesday asked if we supports the passage of Senate bill three oh nine. Thank you for the opportunity to speak and I would welcome any questions you might have are there any questions from the committee. We have a comment Senator Teague you're recognized for comment. Mr Clark just concerning that sentence suspiciously rocker commercial to me Thank you. All comments are accepted I guess okay any other questions from the committee. Thank you Mr tell for your for your testimony is there anybody that would like to speak against this bill and the audience. Your body else for the bill. Any questions of the committee. Centerman you're recognized close for your bill yes and I I do appreciate the comments that were made in support by the individuals on this bill it just add did get an explanation I appreciate Arkansas Blue Cross blue shield in working with us as well on this the reason for the amendment Senator Elliot that was just sent to me was they requested that this be tied that that section of the bill be tied to the U. S. P. S. T. S. because it is the gold standard and it's the gold standard and the American cancer society folks medical directors everybody was really on the same page to accomplish this and get this done they just wanted that to be tied to because that's the gold standard also it was set as shared that they did that they cover grade C. with cost sharing that and affordable Care Act does require coverage of a and B. at no cost sharing. So that was the specific answer to your question so with that I just you've heard the explanation of the bill you have clearly it's something that's important to me and said a lot of folks and to our state and I think I just want appreciate you for being here and I appreciate a good vote as amended. A take that as a motion do pass as amended from senator from a committee member do I have a second I was the second with senator Hammer. All in favor of passing Senate bill three oh nine as amended police say aye. Same sign opposed. Your senate bill three oh nine has passed. And senator Ben if you would bring up the team that you have with you referred senate bill three fifty one being a Thursday afternoon we want to keep moving we have an amendment process one as well. I'm a Senator Pitsch we have a somebody that's from the FNA that's in the holding room that needs to also come into the committee room to be able to testify and we will get the Broncos thank you please thank you. Yes. All right let's go ahead and begin work on our amendment. Do you need to sign some things are they all signed and ready. And you haven't you haven't. Okay. Blake one but we're worrying that. All right center if you would present your motion per your amendment police. Okay members the members were on Senate bill three fifty one it needs to be amended before we hear the bill correct so what this amendment does is it actually tracks all of the recommendations from the in coil and model acts and as and it goes everything that's and included in the National Council of insurance legislators in cool you're familiar with that on their peer to peer car sharing program model act the amendments for this bill makes all of those changes to reflect that model legislation from Ann Cornwell that's what the amendment is at is doing. Okay members to have questions on the amendment only let's try and keep them on the amendment Senator Dismang so this takes the bill to the in Corbeil only there's nothing has in the bill that there is other stuff in the house is that this is that the amendment does make the majority of the bill the first basically fifteen are they okay fifteen but not the first but fifteen pages of the bill become the in call legislation there are additional components in this according to The legal opinion from the FNA as well as as agreements are provisions for the different airports that are located in the state of Arkansas and we do have people here from the airports that can testify I want to make sure let's introduce your guests for the record before she gives the testimony please. Thank you Mr chairman Julie Mullinax Cummins tourney at Mullenix and associates and representing enterprise rental cars also speaking for the American rental car association which includes hertz avis budget thrifty and dollar who all do business in the state thank you for your testament your witness I need to action on the motion are there any other questions Senator Hammer you're recognized for a question I just with just wanna make sure this is intended to satisfy the insurance issues within the bills that kind of what the amendments about. On Senate quite maybe quite addresses questions about insurance issues in the bill yeah I'm yes I mean I think the S. the amendment the amendment one is we we wanted to make sure that the amendment was someplace to to satisfy some of the questions and concerns that were out at out there so it it helps it helps some people get there and be fine with the bill but not everybody I just wanna be fair to say that thank you. Okay do we have any other questions Senator Teague you'd like to be recognized. We're chairman there's a lot of stuff here. Senator would you consider adopted the amendment let me go get engrossed a student next week. Are we would miss ball next. Yeah and can you describe the Senate can you define that better because I don't think everybody heard that means so Senator Teague aye I understand that the only issue as we do have some folks here from northwest Arkansas airport that's fine and from the airport commission and they're turning to that motion taken stuff that we can do it but I just yeah I would I understand or whatever are waiting for the committee wants to do that well Senator Irvin or witnesses from in state. Are out of They're in state we have someone here from the little rock airport as well as their legal counsel and they are speaking on behalf of XNA and we also have someone here from DFA so I guess on the lever for you to consider that centre manager. You've been request that I guess well I do understand that it is a large amendments and so I do understand if the committee wants me to engrossed the bill and gross the amendment that's fine. We could do it that way and or we and and to go ahead hear testimony since the witnesses are here and then wait on action and get the amendment engrossed I'm fine I'm happy to do whatever the committee wants to do I realize it's the chair I think with the witnesses here I'd like to hear their testimony if you would not mind honoring your colleague you'd like to see that and gross yes I can vote on next Tuesday if you and your yeah I know I think that kind of is a yeah that that works because I don't want to have to have them come back so don't let me let me verify the legality of that okay. Just hear testimony. Okay so what I'm being counsel to do is let's not adopt the amendment let's not adopt a motion to adopt the amendment was not adopted the anything with regard to the bill but let's give you time to follow through with questions and present both the motion and the and the bill so I'm gonna ask you to present the motion as you'd like to present it well here that will answer questions back and forth but we will not ask for a motion to accept The Amendment. Yeah I'll just go to members on I guess Monday so do you are present your motion your amendment. Sir what what is on your amendment go ahead tell us about your amendment okay. Well I mean so I mean the amendment would then become the all big part of the bill so. As. Granted but if you want to just say I'll explain it again Tuesday we can do that as well but you have what expert witness here's what we're led to believe right we do so I'd like to be able to hear from the witnesses if that would be the possibility that would be appropriate okay let's just do that they not speak to the amendment they'll speak to the bill or will they speak to both I mean the amendment then becomes part of the bill and seven The Amendment plus. The portions of the bill you know it would be spoken to and its entirety by the witnesses wintering not going to be experts on the amendment and the language but on the entirety of the subject that the bill is trying to address so okay. Alternative that. So if you want to bring them to the end of the table here they're testimony that be good and and members again I would remind that if you any questions of these folks now is the time to try and get that out there. So just because of time okay I'm going to let Methlmalonic speak and then I'm gonna have the others introduce themselves for the record and then what we'll do is after that we won't take motion we will take action on the bill will just go ahead and engrossing amendment and then come come back come back okay. Senator. The small that you are recognized thank you Mr chair. So this bill has been endorsed by the American rental cars so she ation and again I represent enterprise who has two hundred and ninety one employees in the state twenty seven locations in the state including Little Rock airport XNA and also the airport in Fort Smith. What we're asking or here asking to do with this bill is that you level the playing field is as you have done for many. And state sellers versus online sellers. And You know all of you know what traditional rental car businesses I think we'll hear more today about what the online rental car businesses but what we tried to do with the amendment that senator Ervin drafted the original bill within quite a language they later came out with the red line revised version which was sent to S. and because the opponents to this bill wanted exact precise in Korea language she was willing to amend the bill to make it exactly no more no less than the include a language on the insurance provisions of the bill. In addition this is an eighteen page bill fifteen of it deals with those insurance provisions that are agreed on so there are two other issues. One has to do with airport regulation and it's pretty simple the folks that are here to speak on that are much more half much more expertise than I do but the simple explanation is if there is a vendor. It appear carsharing program doing business on their property. That company is obligated to come forth and. Enter into an agreement with the airport the terms are not dictated in the bill at all it's that they're just obligated I think it's a reasonable obligation when they're doing business on the airport's property to enter into an agreement with them and they will talk more about that And then the second issue in addition to airport regulation is taxes. And I will say the peer to peer car sharing program is an innovative model it gets it gives consumers more choices and many traditional car companies are looking at affiliates that do the same thing offer in app and have a car sharing program similar to what Touro who is here and others are doing with rental cars and as we begin to explore this model enterprise approach the state and I ask some questions that DFA and in August of last year received an opinion from the FAA that if we were to I have the same model with the cars that we ran and put them on Market place facilitator platform online similar to what these peer to peer car sharing programs are doing that we would be obligated to pay state sales tax and vehicle rental tax just as we are doing now in the business model that we use so again it is our desire that you level the playing field but regardless we need to know what the ground rules are because the companies that I mentioned that are currently doing business in Arkansas in addition to the overhead they have it all their facilities that includes payroll they also for enterprise only and it's one of the larger companies. We pay a sales tax of four point three million dollars annually in the state we pay rental tax of eight point five million annually in the state local taxes one point nine million annually and then personal property taxes and licensing of the vehicles of two point three million dollars annually. That's about seventeen million dollars in addition to that enterprise pays combined total to both airports up four point six million dollars in fees. So it's important that companies like enterprise understand what the ground rules are because of a lot of those fees would go away if we chose to also use that up online marketplace facilitator model. M.. Enterprise purchases in Arkansas about fifty five hundred cars a year. And we do not pay sales tax on the cars this is been something that has been raised by the opponents of the bill. because they're a business input there is tax on these cars every single time they are used some of the cars that are on the market place apps. our cars that individuals have bought personally you can also people that on the fleet like enterprise could but there's on but there are cars that people that own individuals and when they have purchased their cars they do pay state sales tax and that is because that car is purchased for personal use so when you go and drive your car you're not taxed every time you drive it as these cars are taxed every time they are used but Winter zero or another application like this takes these cars and could see the cars into our revenue generating transactions that transaction is taxed the company the program online facilitator is responsible for those taxes not the car owner. but the car owner does receive the benefit of the personal use of their vehicle and if they. I wanted to purchase a car as a business asset then I'm sure DFA could tell us how that would work if that was what they use their car for this is additional revenue with that. And then I think the last thing I wanted to point now is that like enterprise Turo is not the little guy if we're worried about the little guy getting taxed they operate in the US and UK and Canada they operate in over five thousand five hundred cities they had over a fifty over a hundred and fifty million dollars in revenue last year and they have announced that they intend to go public at the end of this year so they're not the little guy and according to a final thing according to a October twenty twenty publication automotive world the car sharing business is expected to reach eleven billion dollars in business by just twenty twenty three. Okay I'm gonna do one personal prayer John introduce the chairman of the house insurance and commerce representative mark Lowry's come down to hear testimony today so welcome representative all right to have someone else to speak for on your as far as your team presenting the bill so yes and this is there with the little rock airport and so they're going to speak on that portion of the bill that relates to that agreements of language of the bill okay. Mr identify yourself please and you may proceed. We're limited to three microphone so you pass around good afternoon everyone my name is Jane Carter I'm director of public affairs and government relations for Clinton national airport in little rock municipal airport Commission joining me today is miss Caroline Witherspoon who is our general counsel we're also representing northwest regional national or Northwest Arkansas national airport in Bentonville as well. What are the key factors in airports business models and Bob collaboration with the Federal Aviation Administration the FAA FAA grants which have allowed airports to improve terminals increase runway safety areas an update master plans require airports to abide by certain grant assurances pursuant to the airport and airway improvement act as amended and set forth more specifically and forty nine USC four seven one oh seven in exchange for the acceptance and use of federal money the FAA requires that airports agreed to thirty nine grand insurances underground insurance twenty four airports must maintain a fee and rental structure for the facilities and services at an airport which will make the airport as self sustaining as possible pursuant to this requirement airports charge ground transportation provider such as taxis transportation network companies like uber and lift a per ride fee rental car operators have agreements with airports that require payment of a minimal annual guarantee or a percentage of gross revenue whichever is greater for the rental of vehicles plus rentals for parking and counter spaces failing to give Arkansas's municipal airport commissions and regional airport authorities the ability to enter into separate contractual agreements with peer to peer providers would create a real and imminent threat to the orderly management of airport facilities because it will create barriers to the equitable treatment of all commercial ground transportation enterprises seeking to operate on airport facilities airport language in this bill is necessary it will allow airports to treat these commercial entities on a fair and reasonable basis airports must be allowed. To regulate their ground transportation providers to ensure passenger safety and provide for the orderly controlled ground transportation services utilizing airport facilities for commercial purposes if I'm like either ground transportation operators peer to peer operators do not have an agreement with an airport how can the airport import impartially enforce fees and minimal safety standards for customers an airport facility years. Our customers are best served by having an array of ground transportation options but there are significant consequences to airports in customers if we are forced to deal an evenly with commercial enterprises we ask that the airport language be retained so that the airports can continue to serve their critical role as economic generators and transportation hubs for this state without interruption or disruption miss Witherspoon and I will be glad to answer any questions you have thank you for your time today. Okay. To have well. We're still in the present is kind of strange were still presenting the bill do you have someone else to help present the bill and what it mean might as well go ahead and get it all out there but the last component would be then the D. F. and a the the do it given a legal opinion and that's I'm not serve questions for well I don't wanna get into question because we're presenting the bill you've had asked experts presenting the bill on your by outside the lines they in that mode okay then we'll get you in a. I please identify yourself and you may proceed. Farm dollar the department of finance and administration and DFA's not taking a position on this bill but we were asked to be here today to answer any questions I can confirm that the department did issue a legal opinion honorable peer to peer question it respectfully regarding the marketplace This auditor issues I'm here to answer any questions that. The commitment committee might have okay and then I guess so that Senator Irvin or you finish presenting your bill because then we will going to questions of your expert testimonies you're done yes okay I a will recognize Senator Teague with first question then I see some others. Mister chairman do we have the. DFM a document that says we have a copy of the document that we have a copy of your yes. To have the office for the all the committee members. The staff of the. Maybe maybe while we're doing this Senator Irvin I'm gonna move on to the next do you have another question senator I do the airport folks okay please follow up job you got your name I apologize but did you say that federal law or the your contract with the federal something said that you had to have the ability to. tax Ray's revenue from taxing all of all bills and Senate setter. Thank you Sir and acceptance of our use of federal money the FAA requires us to maintain a funeral structure for facilities and services. So you're calling all those the the rent is service would be a service if they're doing business on their property yes Sir. Okay thank you Mr okay and then Senator Ingram I have you next in the queue. You're recognized so. This is for the airport folks of would you just walk me through how the the airport I mean I think we all understand how rental cars work but how do you come in contact with peer to peer is it people financing picking somebody up at the curb and taking them to how do you come in contact with with peer to peer. Well in this this point they would be operating in our parking lot without our knowledge so we are not coming into contact with them and that's a problematic for us particularly from a safety concern. But I mean passenger picked up every day by somebody in a car the without your knowledge to me that that's mean they could mean that you have patches jours de plane they're picked up by cars are sitting in your parking lot every day correct yes Sir that's correct now does of. To the airport if you touched on taxicabs in thanks thank you can impose permit some caps and things and generate revenue off that for their use of your facility right correct yes Sir yeah can you do that currently with with peer to peer no Sir you're not allowed to do that don't do you don't have any contracts we we do not have a contract with them currently okay. And then I guess I can will let me just take it with it on page two of five through nine and I've understood someone to say that the airport of. Is there is that you don't there's no dignity you don't dictate terms in this for peer to peer is that correct. In this legislation we don't dictate terms no that would that would be upon the agreement that's entered into between the provider in the airport commission the body in this agreement on page two five it's sorta lays out the yeah the ticket that there are if I read that right I might not have read that right. it's is a written agreement described shall impose the same reasonably similar standards regulations procedure so you're going to have the same you're basically they're going to they're going to be operated. We got to go up you will be operating the they'll be operating under the same basic agreement that rent a car in an equitable manner yes Sir okay thank you. Thank you senator Hammer you're recognized for a question. Probably gonna be more interest in financial statement but you're not there anymore of. By the way what she's coming back to the desk they're making copies that was a very large substantial documents are making copies for the members so give us a give us around about financial impact of the. How much how much we talk about generating in taxes on this I'm actually I I apologize I think I don't but did thank you in fact I don't believe was on the the website last I checked but and what was issued by the department back on Monday I have that as well and would you have as well but we actually didn't have a fiscal impact for that because as as I think I was explaining the original presentation under our understanding of the peer to peer that would be already contemplated under the marketplace facilitator said we did not actually included a fiscal impact on okay and then to the folks from the airport what to. So so the federal money that could be lost can you get something documented that would actually show that or do you have something with you that would actually show that if we didn't do this you where you would actually and how you would actually lose federal money well this is Caroline Witherspoon I'm general counsel for the airport commission on with cross country whether spending gal just law firm here in town I can just tell you this the airport received millions of dollars in grants from the federal government every time we accept a grant we. Have about half an inch of paper to go through and there are thirty nine is showing its chain mentioned thirty nine promises that we must agree to in order to receive that money if we don't fulfill those promises or we do something in violation of those promises we stand to lose that money so it's very important that the airport follow those grand sure says and number twenty four out of the thirty nine says that we have to maintain a fee and rental structure for the facilities and services at the airport there's also a nondiscrimination clause in there so we are in in essence we can't differentiate between the two types of transportation modes are really three when you consider Abram left so we have individual contracts with uber and left and then we have the grand assurances in the taxis have their their permitting requirements so what we would that's why it's important for us to keep the airport language in this bill so we can insured that we haven't even equal enforcement and we don't risk losing our funds from the federal government so I can't give you a. Is a substantial amount of money I mean most of the money for operating the airport comes from the federal government. And so do you collect taxes you mention did you say zoo were or who what were the names of the two you just call that the over and left. Okay so. We go the center ever go out thank my years went to sleep but anyway so do you do you collect you have contracts with them now do you yes taxes yes through them yes. Okay thank you. Thank you okay that is I believe Senator Dismang I apologize thank you Mr chairman in just one quick question on so many. Right now we are they denying all the bill to set up some type of contract or is that a possibility that's been exercised by their board or even attempted by their board are you just wanting us to dictate what you do here in law because this is not gone will I mean I'm I'm assuming like a city you'd like for us to stay out of your business I mean I've I've got a member that would love to change the name of the airport if you'd like a sooner but you know your business. I mean I just don't exhausted and you're needing legislative help to actually enable and have these contracts or is it something that I mean or you just asked to come here today to to say that you would like to have legislation we were yes we were asked to come here today and support the legislation is important to us that we have the airport language in there so now motions fifteen yet to be specific. I mean are you all in talks on you know setting up some type of a contract or agreement have you tempted and reached out to those genes sharing entities or do they provided or what's the. Well this point it's very preliminary so we don't have to make sure we get your microphone on I think for the audience and the camera. Dividends and it this point those talks have not begun but we expect to have them as their usage rate goes up. I thank all. Is that you want us to preemptively start your negotiation for use through legislation one typically you don't want us involved in your business officer or just here today to say we're supporting the bill that's what whatever isn't that you're here for a very specific piece of legislation I mean I'm assuming the whole bill is not really in your wheel house there's you know a specific piece that you care about and legislation why we want to make sure that that is included as it was presented please in in how did this process play out because we had a very similar asking minute what it goes back to me is when uber and we had cap companies you know they wanted to they don't want the competition let's not kid ourselves I'm I'm sure they wish that we could have preempted these you know those industries out of being above operate in Arkansas when you find a particular reports it worked and they have rules and you know you can't get picked up or you can't get dropped off at all these weird things that they were you know various other reports on the we have those here I'll but it was part of a competition issue that was driven you know by state law or local government or whatever to drive out uber or who whoever might be in transit on the cap companies turf for a better way to put it that's that's the way I see this and I don't want a hopefully I don't want and I hope it's not and I guess month raises questions your goal to help stifle some innovation that's happening out there by like I said. Limiting their ability to participate in provide benefit to consumers so we we believe that customers are served by having a wide variety of options and we treat each person and company in an equitable manner. You're granted a follow up please and so on a cruel side in again it's been a while as I typically don't rent cars But I mean it for instance mandate in enterprises some of these other larger this is they have locations on your site right probably a preferred rate if we broke that down into daily rate on how much it costs to rent each one of those spaces is probably quite a bit less than the the daily rate out the lot I would assume for the areas that they have the correct. It's all part of their contract a contract right but they're they're contracted to rent a space that like city broke that up into the parking spots is probably slightly less than the daily rental on the spaces with that be fair I have no idea because I wanna make sure accessible so for going to rent spaces on contract those rent rates would need to be act will not just for enterprise before these other entities and so again if you want to send the business of helping you manage the airport by putting things into legislation I'm happy to do that but I wanna make sure we re visit then equitable at some point to make sure that what you're doing for enterprise rental space and run a lot and that sort of thing we're also going to do for Toro in these other entities that may come into play thank. At just another follow up on that as well though as Senator Dismang is I'm not sure if you Bergman you might be able to answer this but if it were an left you currently do correct have to they actually have in their contract rental space on the facility itself as a parking. He I understand. They they operate under a different business model and do not have counterspy ace and internal space. Or poor parking space no ma'am. Okay I'm going to consider we've presented we've had questions of the bill sponsor. If I'm following the protocol we would now go to seeing no other questions we we go to do we have anybody in the audience would like to speak for that I believe we perjure speak for is that correct Senator Irvin. Yes okay. Do we have anybody on the list that are for this we have one that is again so I think at this time we've heard the for on this bill and do we have anybody in the audience would like to speak against this bill. Please proceed to the end of the table and identify yourself. Identify yourself for the record and you may proceed. Thank you Mr chairman my name is Dustin Brighton and I work with my own firm bright stone bridge but working regionally with Perot out in the state so I'm representing them today. So I appreciate the opportunity to be here today Mister chairman. Yes proceed thank you that appreciate the opportunity to be here today and appreciate to the members of the committee that have been listening to up to road position on this bill again Thoros a peer to peer car sharing platform and they are asking today that you oppose this bill. It appear question platforms are very similar to companies and platforms such as Airbnb or B. R. BO but instead of a home or condo they allow a person to register with the website and subject to the appropriate terms with their vehicle on that website for a price that is determined by a third party the vehicle owner sets the terms of the agreement including the price of the car share as this type of arrangement as a merge traditional rental car companies I have unleashed a multi state effort around the country to pass legislation regulating these platforms based on a need to as you heard today level the playing field in reality this legislation as we have seen in other states is designed to stifle these platforms and at the cost to the consumer including our Kansans rather than innovate adjuster compete unfortunately it seems the traditional rental car industry wants to legislate I competition out of the picture in this case the platforms there are approximately twenty three thousand our cans and signed up on the Turrell platform today and over six hundred are Kansans actually list their vehicles on the platform for use at the average monthly earnings that a person that puts their car out on the platform gains is roughly a hundred dollars a month in Arkansas roughly a hundred dollars hi this is used largely to help pay for. Student loans they also subsidizing a car payment hi the perhaps the their cars are more expensive and day I would like a little nicer car so they subsidize the payment through using the platform it's also a way to help make ends meet I it's been a really up it's been a I'd nice boon for military members who a lot of times when they go overseas they will put their car out on the platform and have somebody at home friends or family health and manage that so actually they're using an asset that normally would be sitting in there go I drive way to help them generate a little revenue I'm I have to admit that I have when I hear that Turo is a big company Turrell right now globally has just two hundred employees they're not they're not a huge company they've been as many in the tourism industry they've been very negative negatively affected by the pandemic I'm and they're trying to come out of that as again many in inter isn't basically this bill today I wanted to talk a little bit and I know there is an amendment and I'll speak to that as quickly as I can this bill proposes three things basically it requires peer to peer platforms to obtain airport airport comments on the same terms as the rental car companies I'm considering me beat me to that and I with the the language in the bill it does say that it has to be the same terms or similar I'm also at it requires for people that use Turow or Turo to remit the excise tax on the rental transaction or the sharing transaction it also sets forth insurance requirements for peer to peer carsharing taking each of these in turn hi it's interesting to me that the airports are saying they have to have this authority IDFA. Hey it sounds like and I will say that two years ago the head of government relations for terror which I'm not but the head of government relations visited with the FAA and the FAA basically said no. What's grants are not going to be threatened if you all are allowed to operate on their grounds so I'm yeah I guess there there there's some questions about that but outside of that at Touro is already negotiating committee permits across the nation in different airport facilities we're we're more than happy to talk to the little rock municipal authority were more than happy to talk tax and I would love to negotiate a permit I can give the number of the person that could be called tomorrow that would love to to take that up we don't think that the state should be mandating airports to acquire these permits and shouldn't be dictating the terms in them so I again I I can't help but think that some of these provisions designed to create obstacles for peer to peer transaction raise costs and limits of liability for those Arkansans that want to use their personal vehicles on the way it on the website the excise tax imposition I really would like to talk to that about that for a minute this is what the rental car and she tells you is needed to level the playing field again we heard that today this is not an appropriate tax for peer to peer model a peer to peer car sharing platform is not a rental car company Tero does not buy inventory obviously the rental car companies do additional additionally it was mentioned by D. F. and I I'm the marketplace facilitator statute peer to peer car sharing platforms including Turow will pay the those taxes where it meets the threshold and will be doing so in Arkansas when we reset threshold requiring at peer to peer platforms to pay the excise tax on the rental transaction will unfairly single out. Peer to peer platforms from other market facilitators I think it's very important to point out that when it comes time to the excise tax car or a car owners that utilize peer to peer must pay their sales tax on their vehicle I live in Arkansas I have paid that sales tax on my vehicle and if I choose to put it out on terror I certainly don't want to be treated as somebody that has started a rental car company rental car companies however and I think this is huge has a complete exemption from that tax Arkansas is no exception in a report published by net shorts they analyze the sales tax exemptions in fifty states in Arkansas alone the exemption is pegged to somewhere around just for the rental car ninety talk about the vehicle licensing fee we're talking about does the state tales to sales tax that's worth around twenty four million to the state of Arkansas so right now Arkansas is not getting the twenty four million because the rental car companies do not pay that sales tax if we want to level the playing field by imposing an excise tax on peer to peer companies then we really should repeal the state tax exemption sales exemption for rental car companies there's a lot of talk on this and other states around the nation right now for instance there is a bill in Maryland that at terra testified on just stab at the was last week where the sales tax exemption was being eliminated they were talking about using those funds to help historically black colleges and universities with the money that was going to be recouped I also should say that we are finding in research and I don't know if this is the case in Arkansas yeah we we are researching that these states the reason that there are excise taxes for rental car companies is because of the exemption I get on the front this was a way to the state for like what we got to get that revenue so they put the X.. Cites tax out there again the citizens of Arkansas there put their cars on these platforms it's not it's not the same it's it's it's comparing apples to oranges so with that being said it again I'll try and wrap wrap up it just seems like that this bill again we're more than willing to talk with airports about comments as a matter of fact and there is a state just to the east of Arkansas where we were working on permits with an airport they passed a statute similar to the language regarding airports here we were in negotiations I stopped to go she eighteen just sit somewhere in the middle of litigation now hi in that state and that would be Tennessee so again hi I feel like that this bill has been put here just to put burdens on a. Platform where people are making in the vast majority of people who use that terror website are putting their cars out there just to make some extra money I think it would be short sighted at this point for the state of Arkansas to hinder somebody for making a few extra dollars especially when we've got these terribly trying economic times with that I'll conclude and thank you very much are you eligible for some questions yes Sir of course okay Senator Hickey you're recognized yes Sir just before I ask you this question Little you kind of permit tension there all of personal personal car I thought most security agreements with disallowed the commercial leasing of it within language on the on the nose so I guess that's something that we make we need to look into because I thought that that was not allowed so you say people are subsidizing their car payment that's that's the I wonder if it's in violation of some note but I haven't heard that to be honest service yeah I'm pretty sure it's back there but guess we need to look the with the the one thing I would like to know is with the airports could you give me a step by step play of how people are getting the car or whatever someone wants to lease it to their peer what are they doing or the meeting went there for like parking in the lot what just tell me exactly how that's transpired as far as air pollution sure with the host and the guest is there column platform they work out how they want to transfer the vehicle it was at an airport of course it can be in a parking lot it might be off the airport premises and and and and another parking lot that's really worked out between the host and the gas so I won't sit here today and tell you that they're not drop off center happening but again that's that's between those who gets a work out how to transfer the car. Okay so if it's of map continue your follow credible so if it's a in the airport parking lot if that's the way or that way most of them happened I know that you all probably know I mean if you're in the business I don't know what the percentage is right now sometimes they're in a parking lot sometimes and I actually did this in California myself when I when I used or the driver came picked us up and then he drove us to a location off the the the airport and then he got a member home let us take the car do what we were doing so it can very just in some business parking lot or some Walmart or some other retail stores that we're talking County. Interesting the. Well if it's on the airport parking lot would parking fees have been paid or would they not have been all right wing or is there free airport parking yes Sir I mean in most places there are paid airport spaces and yes the users would pay the appropriate parking space fee so the airport is getting that money from the the revenue from that is that is it always ours are free parking at the airports I mean we have to know we have to know where they're putting these cars I mean because if they're putting it to use and if they're using the airport's free parking and they're using using that then I I can understand where the airports are having to have an issue method somewhere this paid parking if that's where the majority of these cars are being left you know maybe that's a maybe that's a different subject so. Senator you're right I mean if there's that free parking after beyond city makes variance I haven't seen too many free parking spaces airport thank you Sir. Any other questions for members. We'll Senate is when you're recognized and mine would have been with the FAA just based on the comment he made about market place so tires they're still here if you'd like to the camp yeah I know that the fine so you know we he was saying once they hit that threshold some assuming that means territorio hasn't hit that threshold you mean you in you that you have a letter that was made to them is made in a prize for somebody else but no request in the. For the information but. So if we. If we pass this and they have not yet hit the threshold are we passing a tax increase. Well as a marketplace facilitator would and I'm just gonna walk through this I can yes. Yeah so I think at the marketplace facilitator language is. Sort of the threshold of who has the burden to collect tax that would ordinarily be able to impose that that taxability on so as written right now under marketplace facilitator you have to reach that two hundred transaction by one hundred thousand dollar threshold before you are responsible as the disability as a facilitator to collect that's correct admitted that portion of the bill I believe the way it is right now a marketplace facilitator includes peer to peer car sharing programs as defined here So I I don't know whether or not that would I would think that would work in tandem with the threshold but certainly it would be more about the. Responsibility to collect sales tax then added to increase in sales taxes that makes sense well or when the sales taxes quotable right I mean and wealthy yes and no so so it's still collectable I would argue at all points it's just whether the marketplace facilitators gonna be the one with responsibility click that for the individual selling on that platform we still have that we still are entitled to that tax so depended upon so if they don't meet the threshold I would argue the State of Arkansas could go into them trying to find those people that are listed on the platform and collect the sales tax that way. If it's applicable. I need to look at that I'm not sure that that was the well I look at that thank you the that gives rise to questions of the chair. Maybe for most for Brighton. Yes the tax in your transaction. You and I decide you're going to use my car. Is that is there a tax on that transaction because it happens on your app Disher app apply a tax based upon the zip code or anything or is it just a transaction hundred dollars for a day or whatever yeah I am I would say I believe that I and I will verify this for you but I believe no there's not a portion for the tax on the app right now I will say that we are collecting and remitting in the states where where were it is required based on the volume based on based on the on sales by insurance so the follow up to that question Mrs Ballard do I have that right. How would do you have an AC that transaction happening in our state and I appreciate that that's actually good clarification I would like to give Senator Dismang aye aye I got done talking I you still have to be I think under the law are you still to be engaged in the business so it would still if you're talking about somebody that regularly leases their vehicle that somebody engaged in the business you would have at the fifteen the response really quick that sales tax it's not gonna part of what we call like isolated sale situations were it's a one off the league sure Carter two if I lease my car one time to at a person It is a committee set them up or something like that I'm not necessarily engaged in the business but I guess maybe this was Senator Dismang so question I don't want to walk away from it because I think it's very critical is there a threshold of me leasing my car or using the app with my car that when I get over that there needs to be a tax collector no well what is that there's not a threshold that that goes back to D. F. A.'s at analysis of whether you're engaged in the business the threshold exists as a response to the Supreme Court ruling and I believe waiver of versus South Dakota that we could impose sales tax collection on certain out of state businesses that that would not violate the constitution if there were certain limits to that so that's why we have but we we adopted that at what was done the time to go to that two hundred transaction one hundred thousand dollars that's where that limit comes from this Senate is my as a follow up because I've got Senator Elliot the queue ahead of you but if it's follow up go ahead pretty late okay. Somebody's got a hang of. The way that I've I mean I was reading guidance of the but I think you were saying was. Towards collect sales tax to let you know. Sorry there was not going to collect sales tax and then shouldn't by law until they hit a hundred thousand dollars to enter transactions in the state in the year thanks whether it works and so I think what you were saying was the sales taxes still owed so by the consumer at that point and their responsibility the responsibility remitted to the state Committee used to be. Thank you to Odin there still still sex out there but it's the consumer's responsibility to submit that whatever to the state of Arkansas. That right I mean because that's what this is not taxes due by Toro at this point until they hit the threshold and then it's responsibility to collect and remit prior to that is the responsibility of the state of Ingram because he really likes this new technology peer to peer platform in any to send this check of you know it's status check for a dollar fifty cent fair is that that's what you were saying I think. Yeah yeah. But the qualifier that that the people that would be responsible for collecting that up to the one hundred two hundred thousand words let's say for example Turrell comes into effect they would need to be engaged otherwise responsible for collecting and remitting sales tax. Yes. Okay. Senator Elliot you're recognized for a question. Thank you I so it see it see it to be clear is the individual that is responsible the way we were supposed to be forty dot through the big box industry and all that we were supposed to be paid in taxes every time I ordered a pair of shoes from whatever which I was not. So. When but we have some expectation that is going to happen this time is that a. I don't know what we have the expectation not that's what that's the idea of what we're doing. What what what happens. Senator Clark. Thank you Senator Elliot I think it's a little bit different of an issue I've said we've got to two things at play here and it does get really confusing there's the sales tax component which is required to be collected by people that make sales and then there's the compensating use tax component so that's what you're talking about issues from out of state and we we had a lot of people that were necessarily maybe remitting their there and compensating use taxes they remitted when that happened if you at so again it gets kind of complicated but if you're talking about me leasing my car to you let's say I'm one of these platforms you and I are both residents of the state of Arkansas because I leased it to you in let's say I'm I do this all the time I'm in the business even though you know maybe not set up that way I would have the responsibility to collect sales tax that you would have no compensating use tax obligation that situation so if you now in the alternative if you I guess leased a car you picked it up outside of Arkansas brought it into Arkansas and we're using it here then there might be a compensating use questions but I think for the purpose of what we're talking about here today we're not talking about you is the person renting the vehicle being responsible for those taxes would be on the person leasing the vehicle if they are if they are otherwise required to do that. All right okay our question of the general I'm sorry I missed your name I was I was out of the room for a second so I might have missed it but answer to this question but in how many states are you remitting I can get back to you on that I'm not sure how many we were required to do so I can answer it with where we are required to so we're collecting and I will get back to you with the number do you happen to know if it's I I would assume that might have something to do with the states in the airport and all that kind of thing but Do you happen to know a kind of a. Only the time before you generally might hit that threshold and no room depend on the business yeah it it I would have to get back to you on that too I don't know how long it would it would take to get there I can tell you this though senator if this bill were to pass it would be almost like a new tax on somebody wanted to use the website I'm sure that which slow down the. For people use it. Okay thank you thanks Mr. Okay committee members are there any other questions. Is there anybody that would like to speak for the bill I think we have it heard all of those to have anybody else once this he like to speak for. All I would be here for all upon something the general. The Speaker of yeah I think we can hear yes I think you can come to the thing And speak for thank you. One time. He was presenting the bill as opposed to speak for I just wanted to clarify the gentleman beside me that mentioned about a parking rates at our airport the first ten minutes are free obviously if you pick up somebody at the curbside like he mentioned in his transaction that would be free and our cell phone what would also be free I have one other piece of information. As far as rental cars go I was asked about what they pay on the lot they pay approximately half of the garage rate or about six dollars and fifty cents per space per day so that was in response to the question I was asked okay allow them. Okay anybody else for or against. And since we are going to trying to gross the amendment right so if I can just make a I'm good I'm not going to I mean it what I'm gonna do members as I'm gonna go ahead and engrossed this amendment and then we'll come back with an engrossed bill next week I really do appreciate everybody being here I think we've got some additional information that was requested by all the people that spoke today which will try to track that down but I I do want to say. This this highway as a sponsor of this piece of legislation and not trying to stifle anybody's industry these are real questions that need to be addressed and answered to particularly when it comes to the insurance components of how this is covered under this type of a what would I buy model so I did I want to do in closing no I know I'm not what I wanted but what I'm saying is if there are additional questions of the members of the committee have if you will try to get those with me because these are some real serious policy type questions that need to be answered so on the airport language contracting issue on the DFM a tax issue and then as well as on the insurance issue I kind of got three circuits wrangling on your election that we don't answer questions from single member because you might influence the decision of the other six with that answer in other words if I ask you a question and you tell me the answer might influence someone else he might want to bring it back discuss it on Tuesday is what I know I understand that what I'm saying is is if you have if you need more information I will to perhaps try to accommodate you with more information that's what I'm talking about okay I think we've. Hammer that I'd caution members to make sure you remember what was said and done I think the testimony of those that were for and against we are going to move on don't forget what you heard today because we're going to hear it grows the Amendment. And go for with only new information going forward so thank you senator Irvin thank you Mr brighten another's you spoke for this bill okay we have one bill left the good news is we have one bill left the other good news is to bills have been proceeded on to next Tuesday I'm told this is a party. I will I will curse you with that the last one of those ended up being pulled out and throw away but Senator Davis if you would present senate bill four eighty nine you are recognized thank you Mr chair yes this is M. should be a non controversial bill so we like to in my committee introduced the folks with you so we know who's there in case any kind of testimony might blurt out so please introduce early. I was chair of intro Thompson regional customs service manager eventually Arkansas. And I'm John Bethel director of public affairs for injuries the Arkansas thank you K. thank you may proceed thank you Mr chair members of the committee in two thousand fifteen the General Assembly passed ACT seven twenty five that updated the regulatory framework and enabled utilities to update rates annually with the formula rate plan. The legislation has been working effectively and has allowed utilities to invest in their systems while maintaining stable rates in fact Arkansas nuclear one one of the state's largest lowest cost and most reliable resources lies in my district. Energy Arkansas's made significant investments maintain that valuable resource and ensure that is operating to the benefit of customers in Arkansas. At the utilities of implemented their plans there been some debates on a couple of technical issues that have arisen and need to be cleaned up to avoid costly litigation and to allow the mechanism to work as the General Assembly intended. The technical adjustments in this bill address the opportunity for utilities to recover their netting adjustment and confirms that the four percent base rate cap is calculated using total revenues these amendments maintain the status quo for customers in Arkansas well income customers other residential customers and small businesses in Arkansas will continue to enjoy the customer protections included in the act principally the four percent cap on any rate changes today customer bills have increased at less than the rate of inflation. And passing ACT seven twenty five and twenty fifteen the General Assembly established cost allocation and rate design provisions to ensure that Arkansas's largest employers at competitive rates to ensure that Arkansas could continue to attract and retain retain business in Arkansas retain these businesses use me the amendments complete an implementation of those provisions over the five year extension term at inter G. Arkansas's formula rate plan while shielding other customers from any adverse impact through the four percent cap. These amendments ensure that all customers as well as the state continued to realize the benefits that were intended by the General Assembly when it initially passed the act in two thousand fifteen. Okay do your guests have anything that like that in presenting the bill before we go into questions I think there were just available for questions okay members do we have any questions for senator Davis or gas. Senator Teague you're recognized. Sought to be good. Thank you Mr chairman. Five my question to offer them there for the PSC there your questions are for the PSC do need them. Okay all right let's go on and see if we have any other questions. Seeing no further questions do you want to ask the question of Senator Davis and she can bring someone up from the PSC then I think that's the okay we'll come back to center go ahead Senator Ricky you're recognized that no we've talked extensively about this so but what I wanna hear you publicly as far as as far as what we're doing right here this is the way in y'all's calculations is is not going to because of a rate increase on just to residential customers as far as we can tell is that correct. Fortunately we only work with three microphone so make sure who okay and answers on Senate give the the residential customers will continue to experience the status quo that they've had during the first five year term of the formula rate plan mechanism and during that term the customer's rates have changed of total bill about one point one percent and this won't change anything with how the how the mechanism works and we did that five year rate term start it started in twenty sixteen okay thank you Sir yes okay Senator Teague do you want to ask your question and we'll see a Saturday of us wants to ask for help with the. Well if I can follow up on Senator Hickey later grant so. You're saying that. Taken what's the number sixty seven million or forty million what's the number. Roughly in the in the high risk pool are the high cost pool every caught. Hi it's me probably. There you go try that again Senator Teague. Please are you a user is your question what was the rate increase so my question is what's approved what's that Max was a high call which the large industry pool of money that we're talking about. how much money there is there. It's. Are you XP seven million or a the are you talking about the the cost allocation yes change from residential to I mean from where it is today. It'll phase in approximately. If the over the over the period of the next five years it will phase in. Roughly sixteen point seven million dollars from the the largest class their their costs will go down if we're at so it goes from sixty seven to forty no no no that year but those are to those numbers are you two different numbers yes but if you're looking at the change from one class from the cost allocation piece would affect. approximately sixteen million dollars over five years if we're at the cat entered you would absorb that difference if we're not at the cap that difference would be negligible to all other customer classes because it's it's very very small that three point two million dollars a year over more than six hundred thousand customers. Would be fractions of a cent on a customer's bill. And so where are we are we at negligible are we at more cost. Based on current numbers. On a current numbers. In three of the five years that the formula rate plans been in effect we've been that the cap and if we're there for the same if we have a similar experience over the next five years that will have no effect on the other customer classes and that's and I really do believe that the changes we're making will have. Little or no effect on any other customer class the cost allocation piece that we're talking about there is a difference between little and none you realize and and as I said before I think that will be. Thank you hello there be hope you hope would be at nine yes Sir so I okay do you want to ask questions for the. Yes please ask and we'll see if they're they're available said I think kids in the room of his secretary. So Mister Thomas did you hear my question. Mister Thomas please identify yourself for the record and you may proceed. The Thomas some German the public service commission it's the same questions Senator Teague yes yes that's a good part of. It just so I don't for first of all let me say I speak on behalf of myself I know not speak on behalf of my two colleagues and I should always say that but I always forget but that's always the case when I'm sitting here and and just just just so I don't file it up if you could shoot your question to me and so my question I think that will alter my question is that is Mr Bethel right when he says that no money trickle no calls trickles down to my grandmother. You know I worry about my grandmother. The. The problem with any questions regarding a rate increase is it's a relative question you're comparing two things. And if you compare now to twenty fifteen everybody's at a rate increase if you compare the PSE I think the sixty seven million dollars your reference was the netting adjustment if you compare the disallowed manning adjustment. To this bill. It's a rate increase. By. You know. If you compare this bill to what entered you requested with respect and ending to rate cut. It it's a two part do a comparison you have type two parts and it depends on where you're starting at Mr Thomas some accuse you a double Speaker triple Speaker What do people speak with okay you put in something I can understand I'm just parole countries insurance agent. Tell the tale ultimately. How much money gets to cut out of the top pool twenty six sixteen million well. That was separate questions. Okay one of the questions with the utility gets. And the second question is going to decide with utility gets is how that's distributed among all customers right okay what I think in terms of the equity of this bill and in terms of your grandmother in compared to another customer. What it would be like a thanksgiving when there's a pie. Perhaps there's some pie for your grandmother there's probably more pine for for other folks but when you look at the overall situation. On balance balancing all of it. I support the bill. Yes follow granted so rush Thomas does my grandmother win or lose on this bill. H. as just a yes or winner loser I know you have trouble giving those kind of answers. Again compared to comply doesn't think I'm there to the current bill. Compared to what you're paying now. Do they win or lose. They lose. The rates go up anyway I guess Senate rates follow costs costs have to be recovered regardless of the bill right. And so do they win or lose if you if you can answer to say that I'm fine with that. But you can answer you may not want to. I think I think business customers to better relatively speaking to residential customers under this bill hi hi within. Yeah okay I'm think about that statement while somebody else and okay do we have any other questions. I have Senator Ingram and then senator one of. Mr Thomas the but in terms of winners and losers the. Beg users are cheaper to service versus the individual houses so I mean you have to take that into consideration as well correct yes that's correct and that in the regulatory road that is a matter of debate where there isn't one right answer it's a matter of decrees depending on which economic sphere you you. You want in terms of precisely where you draw that but as a general matter customers with flat usage patterns like businesses are cheaper to serve customers whose thing goes up and down like this with that uses primarily of air conditioning and heating. Okay. Senator Irvin you're recognized for a question. Thank you just I'm Pitsch eight and nine and it could be in other places of the bill but it's very prescribed what's the public service commission shall do and what they shall not do so what is the difference what what does this bill do differently than what you're currently doing. And why is it necessary for you to be very prescribed in statute as to what you shall do and shall not to I mean. This is a negotiation. That's part of the negotiation that is part of the negotiation that is less consistent with my preference there other parts because Jason or more consistent with my preference preference but never the less it is negotiation. There are select on page nine where it says the Arkansas Public Service Commission shall not approve any adjustments or changes the formula rate review filings that are consistent with the findings of the at PSC's order on the public it is application for general injured rates or charges including and then again shall not approve any adjustments or changes. I mean why is it is that how is this different than what you're currently doing and why is this now necessary what we're currently doing is when we do the formula rate plan. All parties can offer adjustments. What this bill does is say the parties under certain Sturch cannot offer those adjustments. Now it's enter Jeez you that. That the commission is gone too far in allowing parties to offer adjustments. And that this is a status quo in my view this changes the status quo so it's the parties that want to make arguments and with respect to adjustments can no longer make them. Okay. All right. Senator Hickey right I did not understand that I'm kind of a center team on this and the you know I will make sure that we got what it is now but I will say this you know we exempted you all out of transformation and I did want to research not consider you ought to be a legislative agency Clause our legislative exactly absolute that being said I feel like you work for the legislature and the governor in a in a certain way I please bring ward said that yes and I say that morning just some straight answers and not be disrespectful to you but. What we want to know is by doing this we're making we are making. eight Arkansas I don't heard the comment that under the rate plan under the right plan we've been in since for the five years. That. There's not going to be an increase on the residential customers. But the thing was is if we didn't do this there would be a decrease with that be rider would it not be right. If we don't do the bill what what what happens if we didn't if we didn't pass this. If you didn't pass this the PSC would make this decision why are you know making it anyway. The the reason the thing that I like about this bill there was a nating adjustment of what the netting is is when you have a cap. If you go over the cap. Then under certain circumstances the money that you go over the cap in your one passes the two year to. The question is if the new year to you also go above the cap which is four percent yes okay the money that rolls from year one to year two is that under the cap or not. Enter Jeez views of what is not that was not. The PSC founder was because of the legal language what the law said was that that number is the actual number and in our view when entered you said you exclude the number from the previous year that was an adjustment and because it was set actual rather than adjustment we couldn't do that what this bill does is make that proportional. Proportional to you lose some of it from the cap and the second year you do a proportion so some of it is is. They can't recover and others they can now when you isolate that process by itself. This bill is a better result even though it increases the amount of money that that entered you would get. That in my view the proportional is fair but we couldn't do the proportional under the old law because that is also an adjustment and was our view that the law prohibit an adjustment so when you take that money. Which is a rate increase compared with energy ask for. Are read decrease compared to what entry asks for the rate increase compared with the commission did. When you take that proportion of money that is now if you look at is a benefit. That benefit you know. Disproportionately favors resident industrial customers. But as Senator Ingram mentioned. It costs less for them to serve and I and I know this is. This is extraordinarily complicated and I spent a lot of time talking to people. There are many had like me with respect this topic and it makes it difficult. To communicate. And at first I agree one hundred percent we are legislative agency I do work for you it is my obligation to answer any questions you have with us on the side I hope that answers the question but but ultimately costs aren't. That moves the thing more. You know if costs go up rates go up period. When costs come down and much of the benefit. We said we was one or two percent a year much of that isn't on the base rate side that's on the fuel pass through side so fuel costs have come down which saves you money but if they go back up those savings disappear because that's a pass through that happens automatically without PSC decision with respect to the base rates which are capped at four percent. You know it it it depends on the car and and while not knowing not answering your questions on the stop and and I'm like yeah we want to stay on top of the question engine center did we get to your question yes Sir that was better I'm happy. Senator Elliot and then Senator Dismang. Somebody has to somebody. Yeah okay. in in a discussion about what we were what we are doing presently when you say things are relative let's take what we're doing presently and what we would do under this bill so we take those those two things and look at them at it if we merge those two things and some kind of way we're going to get we're going to get some kind of dividend over here AS eight as as a residential customer. Do I need to have what we have on the table pass now so that I don't end up with the rate increase unless of course I exponentially use more energy. Question what we need to get your microphone on please. You're recognized yes. It depends on the starting point if you. It. If you compare this the PSC's decision it's a rate increase. Well. You're right there. I think what you're trying to ask is how do we change this to guarantee that minimum Residential's are harmed if we don't do anything else yeah that's that's right. I don't believe that there harmed I'm not sure if you know if I had to make that equitable decision in terms of the distribution of benefits I think I would divided differently. but that's the hardest decision. That I have to make because of two things number one I know that employers compete on cost business competes on cost. And low cost are essential for businesses to succeed. But on the other hand I know that many of our folks struggle to pay the bills that they have now. In that at this point it's a zero sum game you decide how much the utility gets and then you divided out or by definition one person's gain is another person's Lawson vice versa. Okay all right thank you senator Dismang you're recognized for a question thank you think you're close to actually I think you're almost there on when you're finishing up with Senator Hickey because I think we're talking about a couple D. you can't guarantee the rates are going to go up because we're talking about a couple different things based in the fluctuating and you know that sort of thing so at the end of the day I think what we're trying to find out is when the the capture still in place for residential yes but it's important to remember that when you hit the cap every year it's four percent every year correct and if you get the cap and five years ago by and it's five times for twenty percent you're not gonna have a party about how low rates are gonna go yes but there's still a there is there are protections in place you can't guarantee anything but there are protections in place yes okay thank and the protections are enhanced by the change to the netting provision in my in my view okay. Okay Senator Hammer you're recognized. Per share Going back to what you said what go is this bill about. Trying to balance between the residential rate and a commercial rate that is part of the builders three parts that is one of the parties we call cost allocation okay let me just let me take a bite size if you don't mind. So that that's one part of it all right. Does this bill. As I heard you talking about the cap and trying to understand without this bill are you prohibited. From lowering the rates if by chance you shouldn't hit the cap. Is there anything to prohibit you from going down if the cost goes down no is it the cost goes up then do you have the freedom to also lower the costs lower the rate yes in fact person cap if it goes down but that's four percent either side yes I wish we lived in that world but. Right okay. And so is this intended you just distribute. That cost. To the residential as well as the commercial whereas right now you can't. We already do that it alters that bounce we make the balance anyway okay this alters and limits are discretion of how we how we do that in a way that's negotiated. And and in a way that again to Senator Ingram is point. We've been facing in that direction it it probably speeds up that phase in. Then let me just say assist if this bill passes. Who's going to. To to Senator teach point awhile ago if this bill passes who's gonna be screaming at us. I don't know it well I don't know that anybody will be screaming because we're fortunate that we have low natural gas prices except for ten days in February And that is masks. the rate increases on the other side but at the same time what generates those are investments. And it's a balance that you have to make between investing in the system and not That the. If there is a dramatic spike in prices it would be difficult to attribute it to this bill where this bill might do is contribute to a a slight uptick in in what is already an upward trend. Make sure we get a microphone go ahead Senator if I may add one thing to your question I think it and Senate dress a little bit of what Senator Dismang and Senator Teague of also asked I think it's important to note that only seven other states have rates lower than I said this is one thing that Arkansas's not last and we're eighth right now in low rates there's only seven states lower than S. and and I think as a good trend line it's important to note that energy and has hit the cap three out of the last five years so not every single year have they had that four percent cap three out of the last five years so I would say in response to Senator Teague that I think grandma wins because like what what this does is clarify what the legislature intended to do in twenty fifteen when several of you voted for it which was and yes entertain himself voted for that bill so I would say that in this case what we're trying to do here is clarify what was originally passed and and what was referred originally happened with this bill and so the idea is that we want to keep rates stable and if you can keep the status quo and keep a stable rate then that's what we have right now do you have people screaming at you right now and so I would say in this case this bill ensures that grandma wins I think if we do nothing we don't clarify the language then weave then we have a lot of issues and and that's why. This bill is taken so long to get you to you all because there's been numerous parties involved in making sure compete different people coming from you know sit at the table from all different industries to come to an agreement there's no opposition on this bill and to insure that what we're doing is protecting customers and keeping a stable rate. Okay Senator Teague you're referenced you had one more question well I think emitters sorry but how costs are one starting one one of the time So. And just for the record I did vote for that my proudest moment but it I did vote for it I think Josh Newkirk you could means not anyways look at me there we go so many go. So ultimately I believe this is an effort by the by the big users to a passer call stone. Two. Grandmother. Nice to the folks in the back shaking their head no how do you feel about that test. I mean it looks to me like it's it's originally the server users whatever we call what we call but but to me are defined as those to shift their cost down the line. By most by the count of almost anybody and if you look at the prices and compared or industrial rates to residential rates anywhere. California Massachusetts Arkansas Vermont we Z. any taxes anywhere the industrial rates are a lot lower than the residential rates but that also reflects the fact that it costs less to serve those customers interview the industrial customers there's a subsidy that flows to the residential because of that cost of service and what this does is phase out that subsidy. Faster we've been phasing it out anyway but this mandates it at a faster pace. Hello. Hello. It mandated at a faster pace. So. So when you talk about keeping rates stable. And you said this would keep him stable what what would you say what the purpose of a formula rate plan over time it's not going to change the total cost. The purpose is to phase them in that that eighty eight ten percent. Rate increase every five years. Is is it better if it's two percent each year or rather than nothing five years and then ten. Ultimately the formula rate plan doesn't change the cost it attempts to phase in changes quicker and in smaller increments that's the purpose there isn't a free lunch that if you do it this way your costs go down. Now what it also does that the consumer does benefit from is there's a concept called regulatory lag and the quicker. A utility gets its money. The more stable it is seen financially and there's a benefit when it borrows money in a rate that is a benefit that flows back through and you want. Fiscally strong utilities for example when the the hurricane hit Louisiana. They had a bill we over a billion dollars of damage you want them to borrow that money and repair but the basis for the being able to borrow that money is to know the eventually will be recovered. The consumer benefit is it is a complex question all of this is complex question and again I apologize for straying from your question not. Okay so still. Follows you like to speak against the. My give you that opportunity might be better served yeah we'll wait on that okay. Senator Hammer you you're recognized for a question okay thank you Mr so when it comes to what drives the cost up let's talk about that for me when it comes to what drives the cost up what is this bill going to do to help keep the costs from getting driven up for is it just going to stabilize it so that it doesn't get above that four percent cap you talk about it does the stabilization but part of what the netting adjustment does if it's only a deferral it might create the temptation to spend to the cap which would put upward but when you do it proportionally if they try to spend for the cap then they lose something so it to me the netting provision in the bill helps put the brakes on the tendency of someone to spend to the cap now when they spend their investing in the system they're making the system better and that's another balance that you have to do we can we can multiply rates by a factor of five and not make it tornado proof but there would be fewer outages it's just a balance how much reliability can you afford when they invest money it generally promotes reliability it's also in their business model that's how they make money but we we have to balance. Affordability and reliability and this tilts it more towards. The investment that they talk about making helps reliability. Okay but. Right sure again to thanks clear. Okay Senator Ingram you're recognized for a question we might just ask taxes about invest in. System of. T. at it we would it be a fair statement to say without the industrials in what they utilize it coming to look at it one way but I'm sort of looking at the other without the industrials the residential rates would go up if we didn't have the industrials to carry the heavy love correct yes when you have fixed costs that don't change. And you price on per unit used when use more units the price per unit by definition goes down. The any other questions. Senate seeing no further questions is there anybody who would like to speak for this bill. Against this bill. Senator Davis. Are you you're welcome to close for your bill thank you thank you Mr chair and members of the committee and I'll just close by saying that the intent of the legislation originally passed in twenty fifteen was to provide consistent and predictable rates for our customers and that this technical bill it ensures that the intent of that legislation is carried out and again Arkansas is a leader in low rates across the nation and so I just I want us to be mindful of that and with that I'd ask for a good vote thank you. Okay Senator Davis is closed for her bill and what is the will of the committee. Senate. Senator Hickey has a motion do pass do I have a second Senator Elliott with the second. All in favor of passing Senate bill four eighty nine police say a. The same sign opposed. The ETS have a. Congratulations Senator Davis you pastor bill. Members. Members let's draw to your attention. The agenda we put in front of you had to Bills moved to it today and we're going to vote on senator urban's bill as well so Tuesday's got too much in it right now staff and I will meet before then and trying to figure out what goes where but I believe Senator Elliot needs to be here on Tuesday and several others have requirement so be safe have a good weekend and staffer we done. We're adjourned.