Arkansas Legislative Council (ALC)
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Unknown speaker
0:00
I'm sorry.
Thank you.
Thank you.
Thank you.
Senator Ben Gilmore
Unverified
2:00
all right members if you would let's go ahead and take your seats members if you would let's go ahead and take our seats
Speaker 10
2:30
members members if you would let's go ahead and take your
Senator Ben Gilmore
Unverified
2:51
seats please all right thank you calling Arkansas Legislative Council to order we will begin with uh representative
lane gene to open us in prayer representative gene if you would press
Representative Lane Jean
Unverified
3:01
your button and you're recognized let's bow our heads a father of heaven we're thankful for all the blessings this day we're thankful for your son jesus who came to this earth and died on the cross for our remission of our sins dear lord we ask you to be with today as we do the state's business that we do it in a manner pleasing to thee we ask that your favor be on our first responders of the state on this country of the military that your grace and be with them and and watch over
them as they protect our freedom we ask that you be with us the rest this meeting forgive us for our sins when we fall short in christ's name we pray amen all right
Senator Ben Gilmore
Unverified
3:51
good morning members thank you all for being here we're going to go ahead and begin and get started let's go we're going to start with item C I'll entertain a motion to adopt the minutes of the last meeting June 20th I have
motion I have a second any discussion all in favor say aye eyes have it moving to Item D. Dr. Silva, if you would please come and present. You're recognized. If you'll introduce
Speaker 20
4:28
yourself. Thank you, Mr. Chairman. Carlos Silva, Bureau of Legislative Research, and today I'm presenting the
Speaker 21
4:33
July 2025 monthly revenue report. That's our first report of
of this fiscal year. As we look into our gross collections for this month, we have $636.8 million. That's an increase of $21 million from July 2024, a 3.4% increase. As we look into net available for distribution, we have $557.48 million. That's also an increase of $29.8 million when compared to July last year, which is 5.6% increase. As we move into page number two, even though it's just one month here,
we have an increase of $29.2 million difference from the forecast for the agency for this month. So assuming there's no further growth here and that the agents get everything correct, we would have $214.3 million. We have a long time to go here, but we had an expected surplus by the end of the day of 185, plus that 29.2, but as I say, it has a long time to go here,
but it's moving in a positive direction. On page three to page number four and five, you're going to have general revenue collections, and from page five and beyond, we're going to have the special revenue collections. As we look into delinquencies, that's one of the things I normally talked about, delinquencies have kind of stabilized in some of the auto industry and some of the other industries we talked about. Unfortunately, we have seen an increase in the student loans.
Delinquencies have increased significantly, but we are keeping an eye on that to see if it's going to have some changes within the other groups as well and the impact on that.
Speaker 22
6:25
With that, I'll take any further questions related to this
Senator Ben Gilmore
Unverified
6:30
report. Thank you, Dr. Silva. It looks like we do have some questions. Going first, Representative
Representative Jack Ladyman
Unverified
6:37
Ladyman, you're recognized. Thank you, Mr. Chairman. I'm over here. I've got a question on page one there. Corporate income tax refunds are down 92% from $3.6 million to $287,000.
Any idea why that is such a big change? Sorry, which line, sir? Page one, under adjusted general revenues. Fourth item now, corporate income tax refunds. Sorry, I was on
Representative Jack Ladyman
Unverified
7:15
the delayed filing, or is there some other reason?
Speaker 21
7:21
That's kind of my understanding. Yes, sir. And as you're going to see on page number three, which is page number one of our main report, you're going to see an increase there in some of the corporate estimates, individual final payments, and on the individual estimates, we saw some of those positive changes from the adjustment. They'll have the extension, so we have seen that there, and that would follow within that adjustment on that first page.
Representative Jack Ladyman
Unverified
7:52
So it shows the individual estimates under income tax increased by 238.9%. So is that related? That's a related extension. Yes, sir.
Speaker 20
8:00
That's my understanding from the conversation with the agency.
Representative Jack Ladyman
Unverified
8:03
One other question from my – on the front page, I'm looking at economic development
incentives. That's down 36%. I mean, oh, it's a small – well, $2 million versus $1.2 million. Is there a reason for that? What's going on there? Those are set up previously, so
Speaker 21
8:27
I don't know what the difference is on that.
I don't know what the difference is on that. We're also breaking down, as you see, that recycling tax credit and wood energy tax credit as well for this year. So we don't have any change of those two, but the Economic Development Incentive Fund is just the Economic Development Incentive Fund that does not include the recycling tax credit or the wood energy credit. But I do, can, sorry, go ahead, sir. Mr. Chairman, can Commerce come up later or now or
Speaker 38
8:57
sometime? I'd like to know. Okay, do you mind if I
Senator Ben Gilmore
Unverified
8:59
take the other questions and get back to that?
No, no, go back again. Thank you. Thank you. All right, if you'll get back in the queue,
Representative David Ray
Unverified
9:08
Representative. All right, going to Representative Ray, you're recognized. Thank you, Mr. Chair. Just a quick question, Dr. Silva, about the state income tax filing deadline being pushed to December. Is there any way or have you been able to quantify what impact that might have on collections of income tax and how much that might move that down the line
Speaker 21
9:31
a bit? We had some this month, as we have seen, but we did not work on that specific.
Is that something that you would like to? We would definitely contact the agents, get more information
Speaker 43
9:45
in order to do that for you, but we do not have
Representative Jim Wooten
Unverified
9:55
thank you. All right, Representative Wooten, you're recognized. Thank you, Mr. Chairman. Mr. Silver, have you had any indication of any impact from the tariffs that are being put in place? Do you think that will affect our corporate income or affect our economy?
Speaker 21
10:15
So, there's many changes that have happened within the last few months, and has changed that have happened. Some of those things, we have, like I said, with the decline in the weakness, I guess, within the delinquency, right? We have an increase in some of those groups.
We have seen some pressure there on the prices, but it has some time to go, right? So we have seen, as you look into CPI, we have seen acceleration there. We have seen some acceleration in some of the other imports. But as things increase, depends on how the job market turns out.
If we have some increase and inflationary increase here, we might see some potential deceleration in the state. But that is still something that we are looking at. I guess that's my best
Representative Jim Wooten
Unverified
11:41
answer here right now. So if I understand what you're saying, it's yet to be determined the total impact from what we anticipate in your forecast versus what reality might be.
Speaker 21
11:56
Yeah, that's correct. There is a lot to go into. There's a lot of things that are still happening, a lot of moving parts out there that are still coming through to the consumer. But we are definitely looking, and that is something that I can definitely touch
Speaker 43
12:12
base with you after this meeting if you
Representative Jim Wooten
Unverified
12:16
want to talk more about it, sir. Thank you. Thank
Senator Ben Gilmore
Unverified
12:19
you, sir, and thank you, Mr. Chairman. Thank you, Representative. Representative Lehmann, you're recognized, and I'm going to go ahead and call up Secretary Hudson.
Speaker 55
12:39
Jim Hudson, Secretary of DFA, good morning, Representative Leitemann. Good morning. So your question was on the Economic Incentive Fund. Generally, the incentive fund, that particular incentive fund, is for one of the incentives that's called create rebate, that is a payment back to companies who qualify, have been approved by ADC, get a rebate on just job creation, essentially. That incentive does not pay out ratably over the course of the year.
It's very lumpy, and so it really depends on what projects have completed and hiring's been completed. We had some big projects finished last summer, so I suspect that's probably some of the steel plants that we're seeing in some of that money. So you should expect that number to oscillate up and down throughout the fiscal year. Okay, thank you. Yes, sir. I
Senator Ben Gilmore
Unverified
13:30
appreciate that. You bet. All right, seeing
other questions, thank you both. all right we'll go to item e i'll recognize my co-chair representative eaves
thank you senator members executive subcommittee met yesterday and reviewed and approved emergency rules for the arkansas sentencing commission and the office of property risk all members and alternates of alc were notified of this action by email yesterday and the review and approval of these emergency rules will be effective upon adjournment of today's meeting the subcommittee also authorized BLR to move forward with renewal of its contract with Lexis for the publishing and editing of Arkansas Code. Finally, the subcommittee heard a presentation from Oldsburg
SPI concerning the final report and recommendations on the motion picture study. There's also a report in your packets showing emergency action taken by the legislative council co-chairs on July 25th authorizing BLR to enter an amendment to its contract with ACASO for procurement consulting services and to extend the term of the contract to the end of the year i move adoption of this report members you've
Senator Ben Gilmore
Unverified
14:39
heard motion do i have a second i have a second any discussion on the motion
see none all in favor say aye any opposed eyes have it members of ease also thank you at this time i'd also like to announce that alc meeting week in september will be moved back one week to to the week of September 22nd through September 26th. So if you'd please mark that on your calendar. And at this time, I'd like to recognize, Mr. Chair, with your permission, Ms.
Speaker 61
15:12
Jill Thayer for an announcement. - Ms. Thayer, you're recognized. - Thank you, Mr. Chair. Jill Thayer, Bureau of Legislative Research. In 2019, the General Assembly passed an act
sponsored by then Representative Dotson and Senator Dismang to create the Code of Arkansas Rules. Under that act, the Bureau was assigned the task of compiling all of the agency rules throughout the state and codifying those to create the Code of Arkansas rules and make them more usable and available to the public. After six years of hard work and compiling thousands of pages of agency rules into one usable and searchable format and with a lot of collaboration from the agencies and the governor's staff,
That Code of Arkansas Rules is now live and on our website as of January 1st of this year. Senator Gilmore and Representative Eves asked that I let you all know that last week at the Administrative Code and Registered Section Meeting of the National Association of Secretaries of State Conference, the Code of Arkansas Rules program and website received the Robert J. Colburn, Jr. Innovation Award. This is a huge honor for the Bureau and our staff, particularly Isaac Lynham and Rebecca Miller-Rice
and all of our administrative rules and Code of Arkansas rules staff who worked so hard on this project over the past several years. This was a massive undertaking, and it's really going to be a huge benefit to our state and all the people of the state that can now find easily all the administrative rules. So thank you for the time. Thank you,
Senator Ben Gilmore
Unverified
16:55
Ms. Thayer. members that was a huge undertaking my thanks to senators Dotson and dismaying
for their leadership on that and our staff most importantly for all of their work and many of
them are standing back here so thank you for that all right moving along to administrative rules report senator
Dees if you would thank you.
Senator Tyler Dees
Unverified
17:17
You're recognized. Thank you, Mr. Chair. The committee met on August 14th. The subcommittee adopted the report on the acts of the 2025 regular session specifically requiring new rulemaking and filed one report of the executive subcommittee concerning its review and approval of an emergency
rule. The subcommittee received and filed quarterly reports from the Department of Corrections and the Post-Prison Transfer Board, and the subcommittee received agency updates on outstanding rulemaking from the 2023 regular session and all rules were reviewed and approved and noted in the report mr chair i move for adoption of this report all right i have
Senator Ben Gilmore
Unverified
17:54
a motion i have a second any discussion on the motion seeing none all in favor say aye any opposed
ayes have it item two under f representative baity you're recognized. Thank
Representative Howard M. Beaty, Jr.
Unverified
18:13
you Mr. Chairman. The Charitable Penal and Correctional Institution Subcommittee met on July 10th of 2025. The subcommittee reviewed and heard testimony regarding the following items. The Arkansas Public Defenders Commission June 25 final monthly report investigated the prisoner escape from the North Central Unit and the Department of Corrections
discussed policies and protocols regarding prison security the subcommittee also met on august 11th of 25 heard testimony regarding the following items an update from the arkansas state police regarding the investigation of the escape from the north central unit and an update from the department of corrections regarding the prisoner escape and discuss the current population counts and inmate deaths i move for the adoption of this report all right i have a motion i have a
Senator Ben Gilmore
Unverified
19:02
second And any discussion on the motion?
Seeing none, all in favor say aye. Aye. Any opposed? Ayes have it. All right,
Senator Missy Irvin
Unverified
19:17
item four, Senator Irvin, if you would recognize. Press your button. There we go. You're recognized. Thank
you, Mr. Chair. The Game and Fish State Police Subcommittee met on Tuesday, July 8, 2025 at 1030 a.m. in Mac Room A. The subcommittee heard from the Arkansas State Police and Arkansas Game and Fish Commission regarding updates on the agencies as well as plans for the year. The subcommittee then also met again on Thursday, August 14 at 3 p.m. in Mac Room A.
The subcommittee heard a brief overview of the Arkansas Game and Fish Commission from Director Doug Schoenrock and introduced the new law enforcement head, which is Lieutenant Colonel Joe Williams. The subcommittee also heard an overview of Arkansas State Police's involvement in community outreach and received updates on the Devil's Den homicide case from the Arkansas State Police. And just personal note, I think it's very important that we keep the family and these little girls in our prayers.
Senator Ben Gilmore
Unverified
20:11
I move adoption of the report. Thank you, Senator. I have a motion. I have a second. Any
discussion? Seeing none, all in favor say aye.
Senator Missy Irvin
Unverified
20:28
Aye. Thank you. Ayes have it. And I think, Senator, do you have a second motion? Yes. You're recognized. Thank you, Mr. Chair. As chair of the subcommittee on ALC, Game and Fish, and State Police Subcommittee, I want to make a motion. I move that we authorize the Game and Fish State Police Subcommittee to undertake a study regarding the emergency warning system and response in the state related to floods
and to report the subcommittee's findings and recommendations to the full legislative council and to allow the subcommittee to meet outside the regular ALC meeting week. All right. Thank
Senator Ben Gilmore
Unverified
20:58
you, Senator. I have a motion. have a second I have a second any discussion on this motion see none all in favor say aye aye any opposed all right Senator thank you for your work on that all right moving along to item 5 higher education Senator Sullivan you're
Senator Dan Sullivan
Unverified
21:19
recognized thank you mr. chair of the higher ed subcommittee met on Wednesday September 13th 2025 the subcommittee received the annual certification of adequate funds for the fiscal year 2425 report as required by act 662 109 in addition the subcommittee heard testimony from the Arkansas division of higher ed concerning one the return on investment impacts on productivity formula the student graduate outcomes and online versus in-person education
higher education accreditation the subcommittee also received public comments on these topics. Mr. Chair, I move for adoption of this report. Thank you, Senator.
Senator Ben Gilmore
Unverified
22:02
I have a motion. I have a second. Any discussion on the motion? Seeing none, all in favor say aye. Aye. Any opposed? Ayes have it. Okay, item seven, Representative Bentley, you are
Representative Mary Bentley
Unverified
22:17
recognized. Thank you, Chairman. On Monday, the Hospital of Medicaid and Development Disability Studies subcommittee met to adopt Representative Vought's ISP for 2025.
The subcommittee also heard an update from DHS concerning the Division of Children and Family Services and reimbursement rates under the Living Choices Assisted Living Waiver. In addition, the subcommittee adopted a motion to authorize BLR to begin negotiating a contract with the Georgia Center for Opportunities to provide audit services related to the study assigned to the subcommittee by Act 145 of 2025 concerning workforce and social services reform. And just a little addition to that, Utah, over a decade, investigated in a deep root analysis of their workforce system as well as social services.
Since they've implemented these necessary changes, they now have one of the highest labor participation rates in the nation and have been at the top of rich states, poor states for over a decade. Currently, Utah's labor participation rate is 68.3. Arkansas, on the other hand, has one of the lowest labor participation rates in the nation at 58.3. I believe that we need a deep audit of our outcome of social services and workforce to improve our rates as well. And with that, I move for adoption of the report. All right. Thank you, Representative.
Senator Ben Gilmore
Unverified
23:28
have a motion do we have a second i have a second any discussion on the motion seeing none all in
favor say aye all right okay going to item eight representative gonzalez you're recognized
Chair
Unverified
23:42
thank mr chair uh lottery oversight committee met tuesday reviewed learfield contract and heard testimony in the proposed fiscal year 2026 budget and a report from the director i move adoption of
Senator Ben Gilmore
Unverified
23:55
report all right I have a motion I have a second main discussion the motion see none all in favor say aye any opposed I let's have it all right item 10
occupational licensing review Senator Wallace you're recognized
Senator Dave Wallace
Unverified
24:14
thank you mr. chair the occupational licensing review so committee met on Monday
and on Thursday and received reports from various occupational authorization entities in group six i move adoption of this report all right i have a motion i have a second any
Senator Ben Gilmore
Unverified
24:32
discussion on this seeing none all in favor say aye any opposed ayes have it okay
uh item number 11 uh senator dismayne you're recognized to give the peer report
Senator Jonathan Dismang
Unverified
24:43
thank you mr chairman uh the peer subcommittee met on tuesday august 12th the subcommittee received reports, reviewed requests, and approved the following various temporary appropriation, American Rescue Plan appropriation, infrastructure investment, and Jobs Act appropriation, and the restricted reserve transfer of funds. I move for adoption of the report. Okay, I have a motion. I have a
Senator Ben Gilmore
Unverified
25:03
second. Any discussion? Representative Collins, discussion on the motion? Yes. You're recognized. Would it be
Representative Andrew Collins
Unverified
25:12
possible to pull out A4 for a separate vote on this?
Senator Ben Gilmore
Unverified
25:17
Is that a motion? if it needs to be okay i have a substitute motion to pull item you said what was the item against a4 a4
Representative Ryan A. Rose
Unverified
25:29
is that to include adoption of the report i guess that's to pass the report without a4 and
Representative Andrew Collins
Unverified
25:34
then have a separate vote on a4 okay members
Senator Ben Gilmore
Unverified
25:38
we have a substitute motion to pull that uh to adopt the report with that exception all right do i have a second on the motion
I have a second. Any discussion on this motion? Representative Bentley, you're recognized for discussion. I think
Representative Mary Bentley
Unverified
25:55
this here is just $20,000 has been sent in by constituents across the state to be a part of this monument. I see no reason why not. We don't want these people that have sent money to the Secretary of State's office for this monument. It's just money that we've received in for them to be implemented where, by law, it was sent to go. So I don't see any reason to pull this out of the motion. Thank you.
Chair
Unverified
26:18
Thank you, Representative Senator Hammer, you're recognized. Thank you,
Senator Kim Hammer
Unverified
26:21
and maybe just I might double up on what she said, and that is the funds that we're talking about, and correct me if I'm wrong, Representative Bentley nodded at me one way or the other. These funds have come from citizens. They have not come from taxpayer dollars, and there's no rational reason to stop the process from going through to honor what the taxpayers of Arkansas have given out of their own pocket in order to make this happen. So, I just appreciate voting this down, and let's let it get out of here so that we can get the vendors paid.
Senator Ben Gilmore
Unverified
26:49
Thanks. Thank you, Senator. Representative Beatty, you're recognized. Thank you, Mr. Chair. I just want to echo the
Representative Howard M. Beaty, Jr.
Unverified
26:56
comments of the previous two members and say we've had an opportunity when we voted on this legislation to approve the monument, and it passed. This money's come from private taxpayers in the state, and it's a waste of our time to take up this motion to ask you all to vote no.
Senator Ben Gilmore
Unverified
27:12
All right, thank you, Representative members. we're now going
to take up the substitute motion to approve the report with the exception of that one item. So with that, what's the will of the committee? All in favor say aye. Aye. Any opposed?
No. No's have it. All right. Back to the underlying motion. I have a motion to adopt the report. Do I have a second? I have a second. Any discussion? Seeing none, all in favor say aye. any opposed eyes have it item 12 senator Johnson for
Speaker 98
27:54
the review report the review subcommittee met on Tuesday and reviewed the methods of finance discretionary
grants to agency ratifications RFQ approval requests and services contracts The co-chairs also provided the July 2025 emergency action report to the subcommittee. This morning, staff from the Department of Education and ASU requested that contract number one under in-state contracts on page 47 of the report packet be between Arkansas State University and the communications group be pulled from consideration.
All items were reviewed with the exception of a construction-related contract number one. The Department of Corrections with McClellan Consulting Engineers was held until Legislative Council for further discussion. At this time, I request the Department of Corrections staff to come to the table to answer and have discussion. Okay, members, I'm going to ask the Department of Corrections
Senator Ben Gilmore
Unverified
28:51
to come to the table to speak to this. I know we have members in the queue. Senator Rice, I'm coming to you first.
Do you have a question? Thank you, Mr. Chair. And if you would, gentlemen, recognize yourself for the record
Speaker 103
29:12
and stand by for questions. Chad Brown, CFO, Department of
Eddie Powell
Unverified
29:18
Corrections. Wade Hodge, Department of Corrections. Andy
Senator Ben Gilmore
Unverified
29:21
Powell, Assistant Director, Department of Corrections. All right,
Senator Terry Rice
Unverified
29:23
Senator Rice, you're recognized. Thank you, Mr. Chair. We had some members and subcommittee that asked some questions, and with the answers, I asked it be helpful Friday for the full council
and appreciate Chairman Blake Johnson okay in that courtesy as we do from time to time. And I did get a contact from Mr. Chad Brown. We had a good conversation, and then he followed up yesterday. with some other information, so I appreciate that. And to me, this is a standard on-call, one-year extension. The Department of Corrections has been happy with McClellan, with their work.
I don't have a problem with that, told Mr. Brown that. But I wanted to hold this for clarity and transparency with the questions that came up. We've had many citizens. I represent all or parts of 10 counties, and some that's, and I don't have Franklin County where the proposed prison is, but I'm in the vicinity. But I've had people far away from that that have expressed concerns to me. So we have some citizens that are very concerned
and have lost some faith in state government because of the lack of transparency in the ways things are done. That's not a slide at the Department of Corrections directly, and it's sure not a slide at Mr. Brown, as I told him. I appreciate his answers, and I'm going to quote one, because he was correct when he was first asked. And this is how the Democratic Gazette said, talking about this contract, we use this regular upkeep needs that arise within the department.
We have 28 facilities around the state, so these contracts really geared, that's a little bit of an exception, really geared, Could be different towards the facilities and those needs that we have. So when it comes to the new prison, I just can't answer that. If that need comes up, we'll address it when the need comes up. But as of right now, the needs on these on-calls and this on-call are for 28 facilities that have needs to be addressed. As Mr. Brown and I talked about, that's what he expressed.
he was later asked and many times we ask questions to get an answer that we want to hear and that's kind of what happened at the end of the committee and and i think i'll let mr brown speak to it but i just for transparency what i i understand you tell me i'm wrong mr brown if i am they have needs for this contract that are far 28 the other 28 facilities if the department of corrections decides use mcclellan in other ways that might be part of work on a franklin county
prison site that's the department of corrections that's not mr brown's uh sole purview you correct me if i'm wrong so i don't have a problem with the contract but because questions were asked and answers were again initially given correctly and and not saying all of his answers weren't correctly this contract can be used for some franklin county stuff if if they decide to am i right with that mr
Speaker 107
32:53
yes sir i would say you're correct with
Senator Terry Rice
Unverified
32:58
that answer okay and and with that i i removed my hold on the deal just
Senator Ben Gilmore
Unverified
33:04
for discussion thank you thank you senator rice Senator
Senator Fredrick J. Love
Unverified
33:08
Love, you're recognized. Thank you, Mr. Chair, and I think Senator Rice kind of covered what I was going to cover because I just wanted to make sure that Mr. Brown had a chance to kind of correct some of the testimony. We did have a conversation. I appreciate you, Mr. Brown, in regards to if this –
and I asked a question in regards to if this contract was being used for the Franklin County Prison or will be able to be used. And at that time, I think you said that there was not an intention to be used, but if you could clarify the information that you provided me, I would just like to put it in the testimony. Sure. So
Speaker 103
33:48
just to kind of clear some of this up, as the CFO of a department of this size, I pay bills and my staff pays bills.
So things that take place within a department, Sometimes we have invoices come our way. We have to pay those invoices. Like I mentioned previously, my intent of our on-call contracts is not for the use of the new facility. However, if that need arises, we will address it at that point in time. We currently have several wastewater projects for this on-call specifically that we need to continue. So as of right now, is my intent to use our on-call for the new facility?
No, it's not as the CFO. But if that need arises and leadership comes back and says, how can we get things done, then those
Senator Fredrick J. Love
Unverified
34:40
are the conversations that we have. Okay, so at this current time, is there any part of this contract being used
Speaker 103
34:48
for the Franklin County Prison? Yes. Okay. So this contract is not being used for the design nor the construction of this prison. Those who have gone through the RFP process are in a waiting period. What we have done is we have drilled wells or tested wells.
I'm not a construction guy, so I don't know the correct terminology. And our on-call went out and found a company called Gilbert's Drilling. They're just a drilling company. McClellan was out there with him, and we got charged their time. Like I said, as the CFO, I had no idea McClellan was out there with him, and we were going to get charged time. So my testimony Tuesday was incorrect, and I would like to correct that, and I appreciate that, Senator. At the time, I didn't know. Yesterday, I found we had an invoice come in for around $4,500 for time spent through McClellan as they oversaw the drilling on the property.
We need to pay that invoice. McClellan is a great vendor for us. They're probably one of our best and easiest to work with. McClellan has done nothing wrong. They're doing exactly what they've been asked to do. So for me, that's what has taken place. I just wanted to clear that up for the
Senator Ben Gilmore
Unverified
36:01
committee. Okay, I appreciate it. Thank you, Mr. Chair. Thank you. Thank you,
Speaker 116
36:09
Senator. Senator Stubblefield, you're recognized. Thank you. Thank you, Mr. Chairman. Gentlemen, I have a question.
Senator Gary Stubblefield
Unverified
36:14
Why, just two days ago, I was told by a board member of the Arkansas Board of Corrections that they had found that they had water for that location there in Franklin County. And I said, where did you get the water? And he said, well, we're getting it from South Franklin County Water Use Association. So I immediately, knowing the guy that runs that, called him, and he said, that's an absolute lie. He said, that's not false. We've told them we cannot furnish water. So I called the mayor of Ozark.
She said, nobody has called her in three months. So the two wells that Hard Rock Drilling did from MENA, I called them because I know those guys. And they told me that the two 200-foot wells, I think we paid them $50,000 for drilling, $7,000 an hour. My granddad drilled wells for 50 years. He would have made a year's salary or less. He said we had two gallons per minute from one well, a 200-foot well,
11 gallons per minute for another 200-foot well. And then you guys put out, or Veneer puts out 16 gallons and another number. We're getting so much misinformation that I would like to know why you guys can't get your facts straight. Point of
Senator Ben Gilmore
Unverified
37:37
order. Senator, if you'll suspend for a
second. Did I hear a point of order? Representative Beatty, if you'll hit your microphone.
Representative Howard M. Beaty, Jr.
Unverified
37:48
Let's hear your point of order. Could the senator speak on the subject that we're on now? We're not going to re-litigate the prison in this committee. We're talking about a contract through a committee, and could we stay on task with that?
Senator Ben Gilmore
Unverified
38:02
Because this will take all day. All right. Representative
Beatty, thank you for your point of order. Senator Stubblefield, thank you. I'm granting privilege if you would speak to the contract or finish your question. I think this is a part of the
contract. Well, I'm going to let you finish, sir, if you would go ahead and finish.
Speaker 125
38:22
I'm finished. I just asked him the last question.
Representative Ryan A. Rose
Unverified
38:25
Okay. All right. Mr. Brown, if you would speak to that question briefly. Mr. Chair, if it's okay, I'm going
Speaker 127
38:34
to let Chief Hodge address that. Mr. Hodge? Thank You mr. Chairman centers double field the information I have about the water that came from the test wells comes from banner I don't know about the other other numbers that that you mentioned. I'm not familiar with those Sir still filled if
Senator Ben Gilmore
Unverified
38:52
you would get with them offline maybe to get the rest of your questions answered
Thank you Representative Wooten you're recognized Thank
Representative Jim Wooten
Unverified
39:05
you, Mr. Chairman. Mr. Brown, can you tell us how much is designated for the Franklin County Institution development? Out of this contract? Yes. Zero. Zero. Zero. None there. In the media,
the reference is being made to a new prison,
and the Franklin County observation is being left out. Is there a change of feeling regarding this institution? And my constituents, like the previous comment, they have great concern about the cost of the institution as presently presented. But
in the media, it gives the impression that it's changed from the specific location to being a
new prison somewhere, who knows where.
But is that the positioning of the Board of Correction
Senator Ben Gilmore
Unverified
40:17
or the department? Representative Wooten, I'm going to ask that I've already heard a point of order. I'm not going to recognize the point of order, but speak
Representative Jim Wooten
Unverified
40:27
deliberately to the contract, if you will, please. Okay, well, does the contract address the Franklin County location in any form, shape, or form? No,
Speaker 105
40:35
sir, other than what I mentioned earlier in my previous testimony. And that
Speaker 103
40:38
was what? That was I pay bills as a CFO.
I watch the money of the department. The intent of this contract, in my mind, is not for the new facility. We have other projects in the pipe. I want to use this contract for those other projects. If something with that new facility arises, I address that at that time. But for current, I
Representative Jim Wooten
Unverified
41:02
need these projects. Okay. Is one of the projects the situation at Cummins relative to 14 years of neglect? Yes, sir. Okay. Thank you. Thank you, Mr. Chairman.
Senator Ben Gilmore
Unverified
41:14
Thank you. Members, I'm about to go to Senator Irvin. I have several in the queue. I'm trying to be very fair and deliberate. it i'm going to ask the comments stick to the contract and if they're not i would ask
Senator Missy Irvin
Unverified
41:31
that you get with the department offline senator ervin you're recognized thank you mr chair just quickly um do
we have do you work uh this contract in the overarching capacity of like a contract manager for a larger project um because sometimes like if you have a overarching larger project that's
handled by a contract manager then engineering would fall this contract would fall under that contract manager the reason i'm asking is because generally when we work with a contract manager the individual subcontractors would then all fall under that one contract manager whose job and duty is to manage the project in its entirety to eliminate you know you having to keep up with all these smaller subcontractors i was just i'm trying to understand this contract in the capacity
of any type of work we do and if you employ contract manager in addition to engineering this engineering contract or would ever this contract move underneath like a contract manager i would say our contract manager for the department in this and
Speaker 103
42:36
i would like to introduce everybody uh in the committee to our new construction director for the department of corrections mr eddie powell i'm hoping he can take some of the attention off me in the future and i won't have to come up here so mr powell but he he would be our project manager uh when it
comes to our on-call contracts so him and his staff handle all of our on-calls and do
Senator Missy Irvin
Unverified
42:59
you mind if i follow up then since he follow up
do you do you mind just introducing yourself and tell us what your background is or your experience because i i'm a little familiar i have a i have a child who has a master's in construction management, so I know the value of it. So do you mind, Mr. Chair, since he's already introduced him, I'd love to hear. Please, you recognize, but I would ask,
Senator Ben Gilmore
Unverified
43:18
please be brief. Be brief, yeah, be brief. Thank you, members. My name is Eddie Powell.
Eddie Powell
Unverified
43:26
I'm the assistant director, the new director over the Construction and Maintenance Division. I've been with the DLC about 18 years. I've been the budget administrator, and I've been through accounting. I've also done nine years in the security field, So I have a good understanding of how the whole department operates. Before that, I have eight years in construction and as a construction supervisor and manager on projects and maintenance projects. Okay, good. So you're
Senator Missy Irvin
Unverified
43:51
following along what I'm talking about. Yes, ma'am. Perfect. Okay, thank you so much. Thank you.
Senator Ben Gilmore
Unverified
43:57
Thank you, Senator. And based on the questions and comments, I think you're about to have a bunch of
people call you, like Senator Stubblefield and Representative Wooten and probably a few others. So get ready for that. Senator hammer is this on the contract You're recognized.
Senator Kim Hammer
Unverified
44:12
Thank you. I just want to put a bow on ask you one specific question that is Based on the contract amount that we're talking about based on the projects that you have Ongoing and based on the projects that you anticipate that you're going to have to deal with set aside the Franklin
Franklin jail These funds will be sufficient to take care of what you have scheduled right now, what's in the works right now, and be able to let you keep doing business if we get it out of here. Is that a fair statement? Please turn your mic on. Senator,
Speaker 145
44:46
yes, sir, pretty much it is. If we ever need more authority on a contract, we come
Speaker 103
44:51
back before you guys and get that authority. But right now we work with what we have, and when we have things come up, we come back and ask
Senator Kim Hammer
Unverified
44:59
for that authority. I think it would be in everybody's best interest than if you're asked to do anything outside of what's already scheduled
and if it's attached to the Franklin, that you would come and specifically state that amount out in public. I think that would help relationships in the future. Thank you, Mr. Chair. Thank you, Senator Hammer. Representative
Senator Ben Gilmore
Unverified
45:17
Ladyman, is this a question on the contract? Okay. Let's, again, admonishments to be brief. I'll
Representative Jack Ladyman
Unverified
45:23
try. Mr. Powell, I think you qualified to answer this question. It may be more of a statement than a question, but there seems to be a lot of confusion in what kind of contract this is and what kind of contract would be used to build a prison.
And as Senator Irvin talked about, that's like building a prison. That's a general contractor. You've got all these subcontractors that work under the general. But if I understand it correctly, and McClellan Engineering is a great firm. They've been around a long time. I did business with them 25 years ago. And they have multifunctional engineering, so they can cover civil, mechanical, electrical, whatever you need. Is that correct? Yes, sir, that is correct. So what you have here is a contract with McClellan, an engineering firm.
You can extract engineering, you put accounting or IT or whatever into that contract, but it's an on-call. So they have quoted you an hourly rate or a time materials rate or whatever, And if you need that service, and it could be accounting or it could be IT or anything else, if you need engineering service, you call them, and they pay you an hourly rate. It has no connection to the project, or it may not have any connection to the project that they go to work on.
In this case, they were drilling wells. You needed engineering oversight to make sure that that driller did the right thing, that he followed, dotted the I's, crossed the T's, did what you wanted. This engineering firm understand your requirements, so they just went out to be an oversight, but they were not a part of the contract to drill the well. They were a general service engineering to provide you that service. I hope that clarifies some of the questions. Am I correct in that? Yes, sir.
Eddie Powell
Unverified
47:12
There are a lot of our regulatory.
We use them for regulatory requirements because, you know, we don't have the engineers on staff to be able to, like at our wastewater, so that's exactly right. They have to go out and tell the drillers where to drill through the geo-surveys they do. It was just an oversight at the driller. It wasn't necessarily directed at the Franklin County project. They were just overseeing the drillers at the time. And when you say that you
Representative Jack Ladyman
Unverified
47:36
might have to use them again, that's just an on-call thing. Yes, sir. Another contract might come up. You need an engineer for a couple hours, you call them.
So it's not directly related to the prison contract. Is
Senator Ben Gilmore
Unverified
47:52
that correct? That is correct, yes, sir. All right, thank you. okay thank you originally
Speaker 156
48:02
senator stubblefield coming back to you question on
Senator Gary Stubblefield
Unverified
48:04
the contract there we go sir you're on these contracts are they not to exceed bids contracts and are you taking bids on all
Eddie Powell
Unverified
48:13
these no sir on the on-call we don't have to we don't conduct any bids or three quotes or
anything we can call them out on the project at our discretion up to our authorization to spend but can they
Speaker 159
48:25
exceed the whatever they initially tell you yes sir if you tell me if they give us
Eddie Powell
Unverified
48:32
a quote and then later they say it costs more and they come back they can only exceed to the amount of the authorization that we're allowed on the contract so they we can do it we can they come out and they see something like a hidden damage sort of they come out and it's a lot more damage than we think on a roof or something like that they could have recently estimated of course and
then come back with a with it's going to take more time on site they could of course bill us for that time also so basically they just bill us for the time they're there it's just an hourly
Senator Ben Gilmore
Unverified
49:05
rate all right thank you mr chairman so just to summarize they're on call meaning they get called if there's an emergency
not to exceed the amount set and authorize what in in this specific contract correct
Speaker 153
49:14
yes sir we can't go over the authorization
Speaker 98
49:20
allowed thank you senator johnson blake johnson you're recognized gentlemen and thank you chair for the discussion if there's no other uh no other
discussion mr chair i move to review the department of corrections contract with mcclellan consulting engineers that was previously held and to remove the asu contract with the communications group from consideration and adopt the review subcommittee report all right i have a
Senator Ben Gilmore
Unverified
49:43
motion I have a second. Any discussion? Miraculously,
I see none. All right. All in favor, say aye. Aye. Any opposed? Ayes have it. Thank you.
All right. Moving to item 13, state insurance program oversight. I think Senator Hickey, are you giving that
Senator Jimmy Hickey, Jr
Unverified
50:06
report? Yes, sir, Mr. Chair. Thank you, Senator. All right. The state insurance program oversight subcommittee met on Wednesday. the subcommittee approved the employee benefits division pharmacy formulary and medical drug recommendations in the 2026 rate schedule for the public school and state employees health insurance the subcommittee reviewed ebd contracts including connector connect your care incorporated hmo partners incorporated and united healthcare the subcommittee encouraged ebd to make preparation
to put the medicare advantage prescription drug contract out for bid this year so that we the legislature will have time to look at it the subcommittee approved the state captive insurance program items including University of Arkansas athletics premiums and deductibles and the lead insurance policy mr. chair I move for adoption of
Senator Ben Gilmore
Unverified
50:51
the report thank you senator I have a motion to have a second I have a second any discussion seeing no discussion all
in favor say aye any post I just have it item 14 representative Warren you're recognized
Representative Les Warren
Unverified
51:07
Thank you, Mr. Chairman. The Personnel Subcommittee met on Wednesday, August 13th and reviewed the requests and reports listed as items 1 through 15. No items were held. I'm glad to answer any questions and move to adopt the report. All right. Members, I have
Senator Ben Gilmore
Unverified
51:26
a motion. Do I have a second? I have a second. Any discussion? I see no discussion. All in favor say aye. Aye. Any opposed? Ayes have it.
okay members going over to item G reports from interim special committees none going to item H please look through those I know that we do have a presentation from the insurance commissioner and members I'm going to ask that we hear this report very briefly there may be some questions but I ask that they they be brief for sake of time so if you look through there if you see any other things that you want to ask questions on please let me know
otherwise we're going to move to item four motion to file is reviewed the teacher retirement system report do I have a motion motion I have a second oh any discussion see none all in favor say aye all right any opposed I always have it all right department or excuse me item five Department of Commerce insurance department if they would come to the table present that report briefly and we'll take any questions on that members just so you are aware this is a
report that was scheduled to give to be given monthly regarding the PBM situation rule 128 so I'm going to ask them to give that report expeditiously if you would recognize yourself for the record good
Speaker 167
53:02
morning daniel holland pbm general counsel at aid the august 8th rule 128 report so we've from the as you know there were two rounds of data
Speaker 168
53:16
reporting under rule 128 that first round was completed in january of this year the second round was completed July 31st, so a couple weeks ago. On that first round, as you know, there were 654 deficient plans, meaning that was 654 plans reporting reimbursements below 100% of NADAC. We've issued notices to cure and corrective action plans to roughly half of those,
and the other half, they told us that there were data issues, there was some confusion on the reporting. We're going to audit those plans and verify their numbers. All of this is in an effort to figure out exactly how many plans are paying below NADAC on average so that we can minimize the cost impact of a cost to dispense. for the the second round of data like I said we got that in a couple weeks ago
we're going through it now we're hoping to see some improvement especially from those 654 deficient plans and we're hoping to see overall improvements since this data is going to show us what happened after the passage of rule 128 and again this is in an effort to only institute a to dispense where it's absolutely necessary it'll take us about 30 days to get through the the data that we received a couple weeks ago by then we should kind of have a better idea of how many
plans we're actually looking at to implement a possible cost to dispense so we'll have some more accurate data about potential cost impacts at that point yeah that's where we are
Speaker 166
55:01
with rule 128 right now I'm happy to answer any questions. Okay I see we have questions again
Senator Ben Gilmore
Unverified
55:09
we're coming up on an hour just want to be mindful of people's time so Senator Hammer coming to you for a question. Thank you Mr. Chair. I'll be short and
Senator Kim Hammer
Unverified
55:19
sweet can you tell me I'm looking at the pages aren't numbered so it's where it
deals with the penalties that have been assessed can you tell me the dollar amount of penalties that have been assessed against the PBMs that are violating
Speaker 167
55:39
Rule 128 so we haven't assessed penalties necessarily pursuant to Rule 128 the we've assessed penalties for
Speaker 168
55:47
below NADAC reimbursements the the data that we get pursuant to Rule 128 is about
averages we don't see claim level data from that report so the claim level data that we would use to assess a penalty for it below NEDAC reimbursement comes from pharmacy complaints that are submitted to us it's the same idea but the rule 128 data is is more about figuring out where and how to implement a cost to dispense as opposed to issuing enforcement actions to assess a penalty all right and you can get
Senator Kim Hammer
Unverified
56:25
this to me I'd like to know how
many dollars um have been assessed and how many dollars have actually been collected against the pbms um that that have been paying under nadat please if you get that for me yes sir i'll get that thank you mr chair
Senator Ben Gilmore
Unverified
56:40
thank you senator going to representative rose and members we already have several in the queue so be mindful time thank you represent rose you're recognized thank
Representative Ryan A. Rose
Unverified
56:49
you mr chair over here appreciate your time thank
you for your testimony this morning uh just briefly Uh, when the penalties are being assessed or determined, uh, I'm just looking at the
last one that's listed here from, from Navidus health solutions, uh, says that there were violations from early 2025. Uh, are you, are you guys determining and then taking into account whether these violations are incidental or intentional? And does that play a role in how the penalties are assessed? It plays
Speaker 167
57:28
some role, but at this point, the way that I see it, AID has issued
Speaker 168
57:34
multiple bulletins over several years that we're expecting reimbursements, at least at NADAC, and we're going to penalize if those reimbursements fall below.
At this point, if we see a complaint that has reimbursements with below-NADAC violations, even if it was an accident, even if it was a system issue or something like that, we're still assessing a penalty. At this point, there's not a ton of leeway when it comes to below-NADAC reimbursement. Well, and I didn't want to make
Representative Ryan A. Rose
Unverified
58:06
the assumption, but kind of my assumption is that everybody in this arena should know. But I just kind of wanted to make the point that it would seem that if these violations are happening, they know what they're doing.
Senator Ben Gilmore
Unverified
58:19
I agree. Okay. Thank you. Thank you, Mr.
Representative Jack Ladyman
Unverified
58:29
Chair. Thank you. Representative Lightingman, you're recognized. Thank you, Mr. Chairman. Rule 128 was passed back in December, and you're talking about high numbers of violations here. So, you know, these small businesses, I've got like six mom-and-pop pharmacies in my district. And, I mean, they're struggling every day. And to them, eight months, we're in August already.
They see no improvement. That's what they tell me anyway. So, I mean, can you not speed up this process? You know, back when I would do projects and the guy would come in and wasn't doing anything, he said, well, put up some tents and lights and work nights. So can you guys work nights? can you move this a little quicker what is your plan to speed this process up and correct this problem that we know is out there and we're not putting any pressure on these folks and as i think representative rose said it almost looks like they know what they're doing here that's just my opinion
but what are you doing to speed this process up and what's your timeline to fix these problems
Speaker 168
59:34
actually moved through the data that we received a couple weeks ago much faster than we did the first round
Speaker 167
59:41
we've got a full team in place now thanks to the the budget that you guys
Speaker 168
59:46
have given us so we're going to be able to make a faster assessment this time i expect that we'll be finished with our assessment of what we've received in july
within the next 30 days and at that point we'll have a almost accurate idea of every single plan that we're going to have to look at there will be because we're talking about you know 3,500 plans there will be some who have some some issue with the data maybe they had a different interpretation of what we were asking for so at that point we will have to go back and forth with probably several plans but overall we're going to be able to to finish our assessment of this data much
faster than we did the first time um because we have this team in place and we've also done it before so we get a little bit faster just because we have that experience but we're very much um we're working very hard to complete this as quick as we can i know um the situation with the pharmacies that's also why we're um doing so many enforcement actions and limited scope exams and individual audits based on the first round of reporting um so we're doing as much as we can to address these issues and enforce Arkansas law.
Representative Jack Ladyman
Unverified
1:01:09
One follow-up. Thank you, sir. Penalties, and you haven't assessed any, and you've got a big volume of data and a lot of people involved, but if you catch two of the big fish, the other fish are going to pay attention. So I would suggest that you go after the main violator, if you can identify that, and take an action that a penalty that might get a reaction from the other folks so I appreciate your answers yes sir thank you co-chair
Senator Ben Gilmore
Unverified
1:01:37
you should recognize you have to follow up on that just so I'm clear
have any PBMs been fined yet for violating state law yes yes do you know
Speaker 167
1:01:51
how many and how much um I don't I can't tell you how much right now I didn't bring that with me but I can get that to you um
i can get i can you put that together and get it
to staff so and one of the things i'd also like to ask is so violating state law would be paying below nadac right but there's another part of that and that's a fair and reasonable cost to dispense and do you look at both sides of that
equation when you decide on whether or not to find a
Speaker 167
1:02:16
pbm for violating that law the penalties that we've assessed so far on this topic have been about nadac
Speaker 168
1:02:22
until we define fair and reasonable um we're we're somewhat limited to nadac uh you know a pbm is going to say well you know we we have a dispensing fee in our contract it's 30 cents it's 50 cents we think that's fair and reasonable until that fair and reasonable um category is determined we haven't assessed any
penalties so is that fair and reasonable to them is that what i'm seeing where the cost to dispense ranging from 40 cents to a dollar 40 that's correct that's that's correct if you could just get that information to staff we'll get it
Senator Ben Gilmore
Unverified
1:03:01
sent out to the committee members thank you okay thank you co-chair okay members we have more in the queue i'm going to ask you to be short and sweet senator wallace coming to you
Senator Dave Wallace
Unverified
1:03:10
i'm over here to your right thank you mr chair you know this body
gave a lot of thought to this matter when we created this law, this rule. We've got small town pharmacies on life support. We've got small towns that are not going to have pharmacies if we
don't do something. How many penalties have we accessed? Have we acted on with this? So that, I think that would
Speaker 167
1:03:37
be the information that I'm going to gather and send to the
Speaker 185
1:03:41
committee. i'll be sure to to put all of that in there and i'll get you know historic data from aid so i'll
Senator Dave Wallace
Unverified
1:03:48
kind of give you a complete picture of that please move quickly please move quickly okay
Senator Ben Gilmore
Unverified
1:03:55
thank you sir thank you mr chair thank you senator hammer you
Senator Kim Hammer
Unverified
1:04:01
said you had a really short question um i want to broaden the landscape a little bit and it is about independence but it's also about walmart walgreen harps it's about all the other providers that have pharmacy uh you know involved in their business model so i want to make sure we we expand the net but uh the the thousand dollar penalty
on rx and optimum was that the maximum that you could charge them or what's the max that you can hit them
Speaker 167
1:04:26
with the max for a below nadac violation is five thousand dollars um so we can charge up to 5,000. Why are we not hitting them with the max? Well, our intention is to move up to 5,000 as we see a pattern. There was a lot of debate about that. Do you start
Speaker 168
1:04:45
right at 5,000? Do you start lower and then increase that amount if there's a pattern from that particular PBM? We've kind of
Speaker 167
1:04:55
been a little bit scattered as to how we've assessed those penalties. So when I started, But
Speaker 168
1:04:59
I'm trying to, like, I'll start at $1,000, and then when I see it again, we'll go up from there. And if I start seeing a bigger pattern, we'll look at the license for that PBM and ultimately
Senator Kim Hammer
Unverified
1:05:10
pull it if we need to. Okay. Then I want to make this statement as a legislator to the agency. These companies are paying millions and millions in attorney fees to fight the laws that we have passed as legislators. I would like the agency to quit pussyfooting around with them.
Fair and reasonable has been a discussion for way too long. And I'd like to just give you, from this legislator's point of view, don't start at the bottom and work up. Start at the top and don't move from the top. Because if they can spend the millions of dollars that they're spending fighting this legislative body and our governor, then we don't need to cut them any slack. For the benefit of not only independents, but Walgreens, Walmart, Harps, all of them, it's time for us to make a statement. And I just appreciate it. Thank you, Mr. Chair, for the latitude.
Senator Ben Gilmore
Unverified
1:05:58
Thank you, Senator, for the short question. uh representative wooten
Representative Jim Wooten
Unverified
1:06:04
thank you mr chairman i'll make it short thank you fair and reasonable is one thing but fair and reasonable to the local pharmacists that are telling me that the pb pmbs or pbms are at fault and they're not seeing the action that they need to see in order for them to avoid doing that so do you think your process is
addressing all the issues quick enough fast enough I would like
Speaker 167
1:06:41
to be faster with rule 128 implementation but again because of the amount of data we're we truly are going as fast as we can when you you know some states when they
Speaker 168
1:06:52
look at a cost to dispense they'll go across the board you know they'll say all right 10 50 every plan no matter what no exception that that does have a tremendous cost impact but that's a lot faster
than the way that we're doing it in arkansas we've decided an aid has decided instead of doing that and having a relatively large cost impact we're gonna we're gonna take the the more difficult road and go plan by plan so that we can truly limit the impact of a cost to dispense while also you know helping pharmacies and truly enforcing Arkansas law so I certainly sympathize with what you're saying I hear it pretty often we are moving as fast as we can but with this amount of incoming
data it's very important that we're accurate in this assessment that we make this decision based on data that we receive and not just a more subjective idea of what we think you know where it should go we very much want to make an informed decision on this so I hear your point I definitely understand why and we're moving as
Representative Jim Wooten
Unverified
1:08:03
fast as we can okay we and and I just would admonish you to follow Senator Hammer's suggestions
which I totally agree with something's got to be done it's got to be done faster thank you thank you mr chairman thank you senator
Senator Ben Gilmore
Unverified
1:08:20
Hickey coming to you thank you mr. chair I
Senator Jimmy Hickey, Jr
Unverified
1:08:23
want to I want to kind of go in another way with this fee that you're doing because I'm gonna tell you right now whenever we had looked at this way back there you know and you correct me if I'm wrong a lot of the parts that were under what cost were according to NADAC were maybe a third of
a cent or a penny or things like that so I believe at that particular time that the thought was that the law read up to the five thousand dollars and the thing was is we wanted to be fair to them also and know that okay all of this has just popped up and yes you may have had a rounding error with your computer or whatever but that was the reason that you all were charging less money on the front end was try to be fair so what you're trying to say now is is that at some point here
they're going to have enough time to have gotten all that right but wasn't that your initial reason to do that and i believe that i had kind of brought that up that i thought you know if we're going to talk about fair let's make sure that we're being fair according to our law you know don't want to charge somebody five thousand dollars for uh you know for them not understanding that they were a third of a cent or a cent below where they should
Speaker 167
1:09:44
have been. Was that correct? Yeah, I think so. So there was the issue of, you know, the fractional cents below NADAC,
Speaker 168
1:09:52
and we don't see that anymore. Since those enforcement actions were sent out, I don't think we've seen a single fractional cent reimbursement. And I think the remainder of your question kind of goes to how we're assessing the penalty based on, like, the amount that it is below NADAC. Because it was a little bit scattered, sometimes we would charge an extremely low fee, but sometimes we'd go all the way to $5,000.
There wasn't a lot of certainty as to what the consequence was for paying below NADAC. i'm trying to create that certainty so that everybody kind of knows like here starting now here's where we we start and if we see a pattern we're going to go up all the way to the point of possibly pulling
Speaker 185
1:10:38
or denying a license which is may i follow up which is
Senator Jimmy Hickey, Jr
Unverified
1:10:42
what i believe but you know we sit down here and we listen to people saying well we should have started off charging five thousand dollars i think that there was a rhyme or reason to what you all were doing personally i
I think that you not charging $5,000 for a penny whenever this was first discovered or whatever, I think that was the correct thing for you all to do. So I don't want us to sit down here and, you know, I understand this deal with the PBM. It's a big political deal, how people like to throw that out there, and I don't have any love of loss for any of them. You know, it's just business to me. But I do believe that, you know, you all did correct the first way where you did back off from the up to $5,000 to charge a lower amount that would be fair to them.
Because if we're going to talk fair and reasonable for the pharmacist, you've got to talk fair and reasonable for the other side also. So I appreciate what you all have done as far as trying to navigate
Senator Ben Gilmore
Unverified
1:11:47
through this and where you're at. Thank
Senator Missy Irvin
Unverified
1:11:51
you, sir. Thank you. Thank you, Senator. Senator Urban, coming to you. Thank you, Mr.
Chair. Thank you for being here. Is it not part of the law that the pharmacist can also appeal directly to the PBMs for resolution?
They can. Okay. And I think we've had that previous testimony, and it was requested at that time and agreed to that there would be in the report included the number of submissions that were solved through direct contact and direct resolution with the PBMs. And do you have that in your report? Because that was requested and agreed to be information provided to us as to how many of the submissions then were also submitted directly for resolution to the PBMs and how
many of them were resolved in that form and fashion. I don't see that in your report. Do you have, is that in the
Speaker 168
1:12:49
report and I'm just missing it? No, I might not follow. We wouldn't, when a pharmacy appeals a reimbursement directly with a PBM and doesn't file
Speaker 185
1:12:57
a complaint with AID, we wouldn't have any way to track that or
Senator Missy Irvin
Unverified
1:13:02
know that. I think in the discussion we talked about you asking on the front end
when the submissions were being made directly to the insurance department that was part of the conversation that was supposed to happen in the process of that submission. In other words, a little question that says, have you submitted this complaint directly to the PBMs for resolution and what is the result of that? I remember distinctly committee hearings where we instructed and asked the insurance department to do that Because to alleviate the amount of complaints that were being sent directly to the insurance department, and y'all were struggling with maintaining that.
And so I specifically remember this legislature requesting that and then requesting that information and that data on the direct submissions to the PBMs and then the percentage of those being resolved directly without the interaction or involvement of the insurance department. So you've not done that. Is this under Rule 128? Is
Senator Missy Irvin
Unverified
1:14:17
have the ability under Rule 128, it's part of the law,
that they should first submit the complaint for resolution directly with the PBM. It's in the law. They're not required to go
Speaker 168
1:14:31
to the PBM first. I understand that,
Senator Missy Irvin
Unverified
1:14:34
but I think it was part of the discussion that this legislature said to eliminate all of the complaints coming and y'all having to process them, And that discussion was had by this General Assembly and directed to the insurance department to do that.
So, again, I take that back. I mean, there are other people requesting information. I have the ability to request that information from the insurance department. So I would appreciate if you could
Speaker 167
1:15:09
get that information for me. I mean, I can, well, okay, I'll look back and try to track that down.
Senator Missy Irvin
Unverified
1:15:23
to track that down for you. Well, it was a very distinct conversation that occurred with this legislature in a committee hearing about this issue.
And so if you're telling me that the insurance department did not follow the recommendations of the General Assembly, I need to know that. And I appreciate the latitude, but it's important information to have in the report. The reason why we had those discussions was to try to alleviate the amount of work that was being done at the level of the insurance department on these complaints to try to get them resolved directly, first and foremost.
And then, if they can't be resolved directly with the PBMs, then to bring them to the insurance department. It was a way to have a greater level of efficiency and alleviate all the workload from the department. So I will stop, but that's very important information, and I will visit with you offline about that. Thank you. Thank you, Senator. Senator Disman, you're recognized. I just want
Senator Tyler Dees
Unverified
1:16:35
to try to create some clarity for myself in
Senator Jonathan Dismang
Unverified
1:16:37
the conversation that we're having right now
because I think we're kind of commingling two things together that are kind of related but not really related. So as far as the NADAC enforcement and making sure that PBMs are paying above NADAC per state law, that is its own train track. We're trying to make sure that that happens. You're going to penalize when you need. Technically, it's got nothing to do with 128 technically. It does in the sense because if you find out that there's been underpayments you want to make sure that you bring those back to right so that it is part of the consideration when you determine fair and reasonable
and so when we're talking about moving expeditiously through rule 128 and I can't say how much I appreciate you saying we're going to get it right because when we talk about moving through rule 128 who that impacts is not the BBMs at the end of the day rule 128 is going to impact the patient and the payer and their relationship if we talk about a fee to dispense you can correct me if i'm wrong but the the pbm isn't going to pay
a dispensing fee the insurance plan or you know however the plan is written the patient will pay the dispensing fee and so it is critical that we get that right because we may right size things for the pharmacist and then turn around and create a punitive effect on the patient and their insurance policies and their premiums and so it has to be done right and so we can be upset with pbms about what's happening you're taking your action as far as the state laws as it's related to nadac for one of the first times in several years so i'd applaud
you for doing that but i just for the members if i tell me if i'm wrong but rule 128 is not about nadac it is about i mean with the exception of let's make sure everyone's paying everything they're supposed to be first before we start talking about what it means for a dispensing fee and fair and reasonable is that fair or am i missing part of the conversation no
Speaker 167
1:18:42
that is that is fair um we like i said we definitely want to get it right and we definitely want to
Speaker 168
1:18:49
place the cost to dispense where it needs to be and not impose that where it does not need to be that that is absolutely what we're trying to do but
Senator Jonathan Dismang
Unverified
1:19:00
when we say we're going let's just say we did a 10.50 dispensing fee who will pay that dispensing
Speaker 168
1:19:08
fee it will certainly have a cost impact on arkansas residents which is why we're we're doing what we're doing
Senator Jonathan Dismang
Unverified
1:19:13
right but will it have an impact on pbms will a dispensing fee have an impact on
Speaker 168
1:19:22
you know they'll actually they're they're the the ones in between the patient and the plan so the pbm is initially going to to make the payment what the pbm does with regarding its contract with the plan um i i can't speak to what's going to happen there and how they're going to share cost between those two entities but yeah I mean I've heard some plans
Senator Jonathan Dismang
Unverified
1:19:43
just intend to pass that directly on to the customer if not have the customer pay the dispensing fee themselves to be able to keep the premiums from escalating for all members across the board so again it's a
it's going to be I mean it's going to be important that it is done correctly by the right region and by everything else and if you know we can bring out the the pitchforks and whatever else we want to do as it relates to PBMs. Let's do that on NADAC, but we need to be very careful when we're talking about the ultimate impact we're going to have on patients in the state of Arkansas and what they're going to have to pay to have the prescriptions filled. Thank you. All right, Senator Tucker, you're recognized. Thank you, Mr. Chair. Thank you, Mr. Holland, for your work.
Senator Clarke Tucker
Unverified
1:20:26
I just want to follow up on Senator Irvin's line of questioning. The legislature can encourage pharmacists and pbms to resolve their disputes privately it's almost like an alternative dispute resolution in a pharmacy context it's not a bad it's it's a worthwhile policy but while the department can ask a pharmacist if they tried to resolve it privately and failed when the pharmacist applies to the insurance department we can ask that question correct we can yes we can ask that but at the same at the same time if the pharmacist appeals directly to the pbm and they resolve it
privately then we're not ever really going to have that information because that's a private resolution between two non-governmental entities is that right
Senator Ben Gilmore
Unverified
1:21:13
okay all right thank you all right senator johnson you're recognized before i go to you i'll just
Senator Mark Johnson
Unverified
1:21:22
keep in mind members the time has the volume
Speaker 210
1:21:29
of complaints decreased it has by half by two-thirds it depends on the time frame
Speaker 185
1:21:36
that you're looking at um i don't have an actual percentage um right now i can include that and what i'm going to put together for you um but overall they have uh decreased um since the passage of of rule 128 um i'm i'm right now i am
Speaker 168
1:21:54
kind of going back and looking like years back to see how many you know we used to get a long time ago before i was here um a lot has changed
since then you know there was a time where aid asked pharmacies to submit you know med d prescription information not because we had jurisdiction to do something with it we just wanted to know what was happening um and that you know that was years ago that's changed uh we don't we don't need med d complaints now but that really increased the amount of incoming uh complaints that we got and it increased the amount of reimbursements that were contained in those complaints so we can definitely attribute some of the decrease to rule 128 and to the enforcement
action that that we've started taking at aid and i think but i think we can also attribute some of that to just better information and communication between aid and pharmacists that are submitting complaints i think those two things are the reason why we've seen a bit of a decrease but i can put some exact numbers
Speaker 98
1:23:10
on on that and send it as well from january 2025 to august 2025 the volume has
decreased in that same time from january 2024 to august 2024 is that correct yes all right thank
Senator Ben Gilmore
Unverified
1:23:28
sir for being here no further questions in the queue i appreciate the report thank you members for your participation on this one final item that we have is under 8b and that's a motion to file is reviewed division of state parks um there's no questions i'll
entertain a motion to file is reviewed i have a motion i have a second any discussion seeing none all in favor say aye with that carries thank you members for your time this morning I hope you have a great weekend we're adjourned
Agenda
A. Call to Order
B. Discussion of State-Specific Workforce Reform Initiatives [Exhibits B1-B5]
− Mason Bishop, Principal, WorkEd Consulting
C. Discussion of Recommendations by Committee
D. Other Business
E. Adjournment
Documents
Speakers
Senator Ben Gilmore
Unverified
Speaker 10
Representative Lane Jean
Unverified
Speaker 20
Speaker 21
Speaker 22
Representative Jack Ladyman
Unverified
Speaker 27
Speaker 38
Representative David Ray
Unverified
Speaker 43
Speaker 44
Representative Jim Wooten
Unverified
Speaker 55
Representative Les D. Eaves Chair
Unverified
Speaker 61
Senator Tyler Dees
Unverified
Representative Howard M. Beaty, Jr.
Unverified
Senator Missy Irvin
Unverified
Senator Dan Sullivan
Unverified
Representative Mary Bentley
Unverified
Chair
Unverified
Senator Dave Wallace
Unverified
Senator Jonathan Dismang
Unverified
Representative Andrew Collins
Unverified
Representative Ryan A. Rose
Unverified
Senator Kim Hammer
Unverified
Speaker 98
Speaker 103
Eddie Powell
Unverified
Senator Terry Rice
Unverified
Speaker 107
Senator Fredrick J. Love
Unverified
Speaker 116
Senator Gary Stubblefield
Unverified
Speaker 125
Speaker 127
Speaker 105
Speaker 145
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Speaker 153
Senator Jimmy Hickey, Jr
Unverified
Representative Les Warren
Unverified
Speaker 167
Speaker 168
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Speaker 169
Speaker 185
Speaker 186
Senator Clarke Tucker
Unverified
Senator Mark Johnson
Unverified
Speaker 210
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