Insurance & Commerce- House
Video
Transcript
1 document
Bills discussed (36)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
SB480
Act 739
· 4 mentions in agenda, transcript, chapter
Matched: “…RY PRACTICES; AND TO PROVIDE FOR ENFORCEMENT OF VIOLATIONS. SB480 K. Hammer TO AMEND THE LAW CONCERNING THE INVESTMENT OF STA…”
|
TO AMEND THE LAW CONCERNING THE INVESTMENT OF STATE FUNDS. | K. Hammer | Notification that SB480 is now Act 739 |
|
SB519
Act 958
· 4 mentions in transcript, chapter, agenda
Matched: “if you want. Mr. Chairman, Senate Bill 519 has an amendment.”
|
TO AMEND THE STANDARD NONFORFEITURE LAW FOR LIFE INSURANCE; AND TO REGULATE THE PAYMENT OF … | J. Boyd | Notification that SB519 is now Act 958 |
|
HB1009
· 2 mentions in chapter, agenda
Matched: “HB1009 A. Collins TO ALLOW PREGNANCY TO BE A QUALIFYING EVENT FOR…”
|
TO ALLOW PREGNANCY TO BE A QUALIFYING EVENT FOR ENROLLMENT IN CERTAIN HEALTH BENEFIT PLANS. | A. Collins | Died in House Committee at Sine Die adjournment. |
|
HB1014
· 2 mentions in chapter, agenda
Matched: “HB1014 A. Collins TO REQUIRE COVERAGE OF IN VITRO FERTILIZATION UN…”
|
TO REQUIRE COVERAGE OF IN VITRO FERTILIZATION UNDER THE STATE AND PUBLIC SCHOOL LIFE AND … | A. Collins | Died in House Committee at Sine Die adjournment. |
|
HB1295
· 2 mentions in chapter, agenda
Matched: “HB1295 L. Johnson TO CREATE THE HEALTHCARE COST-SHARING COLLECTION…”
|
TO CREATE THE HEALTHCARE COST-SHARING COLLECTIONS TRANSPARENCY ACT. | L. Johnson | Died in House at Sine Die adjournment. |
|
HB1354
· 2 mentions in chapter, agenda
Matched: “HB1354 Lundstrum TO REGULATE PHARMACY BENEFITS MANAGERS; TO AMEND…”
|
TO REGULATE PHARMACY BENEFITS MANAGERS; TO AMEND THE LAW CONCERNING THE STATE AND PUBLIC SCHOOL … | Lundstrum | Recommended for study in the Interim by the … |
|
HB1409
· 2 mentions in chapter, agenda
Matched: “HB1409 Long TO AMEND THE LAW REGARDING ENERGY; AND TO CREATE THE E…”
|
TO AMEND THE LAW REGARDING ENERGY; AND TO CREATE THE ELECTRIC RELIABILITY ACT. | Long | Died in House Committee at Sine Die adjournment. |
|
HB1443
· 2 mentions in agenda, chapter
Matched: “…EPARTMENT FOR FIREFIGHTING SERVICES BASED ON TIME ON SCENE. HB1443 Pilkington TO CREATE THE SECOND AMENDMENT FINANCIAL PRIVACY…”
|
TO CREATE THE SECOND AMENDMENT FINANCIAL PRIVACY ACT; TO PROHIBIT FINANCIAL INSTITUTIONS AND PAYMENT NETWORKS … | Pilkington | Died in House Committee at Sine Die adjournment. |
|
HB1533
· 2 mentions in agenda, chapter
Matched: “…D TO AMEND THE LAW CONCERNING CERTAIN HEALTH BENEFIT PLANS. HB1533 Gramlich TO CREATE THE DECENTRALIZED UNINCORPORATED NONPROF…”
|
TO CREATE THE DECENTRALIZED UNINCORPORATED NONPROFIT ASSOCIATION ACT. | Gramlich | Recommended for study in the Interim by the … |
|
HB1625
Act 974
· 2 mentions in agenda, chapter
Matched: “…NG A FLEXIBLE SPENDING ACCOUNT OR A HEALTH SAVINGS ACCOUNT. HB1625 Barnett TO AMEND THE LAW CONCERNING INSURANCE REQUIREMENTS…”
|
TO AMEND THE LAW CONCERNING INSURANCE REQUIREMENTS FOR LICENSED HOME INSPECTORS. | Barnett | Notification that HB1625 is now Act 974 |
|
HB1659
· 2 mentions in agenda, chapter
Matched: “…ECLARE AN EMERGENCY. DEFERRED BILLS Number Sponsor Subtitle HB1659 S. Meeks TO AMEND THE UNIFORM COMMERCIAL CODE; AND TO CLARI…”
|
TO AMEND THE UNIFORM COMMERCIAL CODE; AND TO CLARIFY THE PRIORITY AMONG SECURITY INTERESTS AND … | S. Meeks | Died in House Committee at Sine Die adjournment. |
|
HB1813
· 2 mentions in agenda, chapter
Matched: “…D FAMILY CHILDCARE HOMES BY HOMEOWNERS INSURANCE PROVIDERS. HB1813 Gramlich TO ADOPT THE FAIR AND EFFICIENT TRANSMISSION COMPA…”
|
TO ADOPT THE FAIR AND EFFICIENT TRANSMISSION COMPACT. | Gramlich | Recommended for study in the Interim by the … |
|
HB1868
· 2 mentions in agenda, chapter
Matched: “…HE USES OF THE CONSTRUCTION ASSISTANCE REVOLVING LOAN FUND. HB1868 L. Johnson TO REQUIRE AN INSURER TO PAY A FAIR AND REASONAB…”
|
TO REQUIRE AN INSURER TO PAY A FAIR AND REASONABLE SERVICE FEE DIRECTLY TO A … | L. Johnson | Died in House Committee at Sine Die adjournment. |
|
HB1905
· 2 mentions in chapter, agenda
Matched: “HB1905 Lundstrum TO CREATE THE BUYER BEWARE ACT; AND TO REQUIRE A…”
|
TO CREATE THE BUYER BEWARE ACT; AND TO REQUIRE A REAL ESTATE LICENSEE REPRESENTING A … | Lundstrum | Died in House Committee at Sine Die adjournment. |
|
HB1955
· 2 mentions in agenda, chapter
Matched: “…REPORTING REQUIREMENTS FOR THE STATE INSURANCE DEPARTMENT. HB1955 S. Meeks TO REPEAL THE SHIELDED OUTDOOR LIGHTING ACT. HB195…”
|
TO REPEAL THE SHIELDED OUTDOOR LIGHTING ACT. | S. Meeks | Died in Senate Committee at Sine Die adjournment. |
|
HB1994
· 2 mentions in agenda, chapter
Matched: “…ERNING INSURANCE REQUIREMENTS FOR LICENSED HOME INSPECTORS. HB1994 A. Collins TO AMEND THE LAW CONCERNING SELF-SERVICE STORAGE…”
|
TO AMEND THE LAW CONCERNING SELF-SERVICE STORAGE FACILITIES; AND TO REQUIRE NOTIFICATION BY A SELF-SERVICE … | A. Collins | Died in Senate Committee at Sine Die adjournment. |
|
SB331
· 2 mentions in chapter, agenda
Matched: “SB331 G. Leding CONCERNING COVERAGE FOR GENETIC TESTING FOR INHER…”
|
CONCERNING COVERAGE FOR GENETIC TESTING FOR INHERITED CANCER MUTATIONS; AND TO CREATE THE GENETIC TESTING … | G. Leding | Died in House Committee at Sine Die adjournment. |
|
SB420
Act 736
· 2 mentions in chapter, agenda
Matched: “SB420 Hester TO EXPAND ELIGIBILITY FOR WATER DEVELOPMENT STATE PR…”
|
TO EXPAND ELIGIBILITY FOR WATER DEVELOPMENT STATE PROGRAMS; TO AMEND THE WATER AUTHORITY ACT; AND … | Hester | Notification that SB420 is now Act 736 |
|
SB437
Act 945
· 2 mentions in chapter, agenda
Matched: “SB437 Hester TO CREATE THE ARKANSAS WIND ENERGY DEVELOPMENT ACT.e…”
|
TO CREATE THE ARKANSAS WIND ENERGY DEVELOPMENT ACT. | Hester | Notification that SB437 is now Act 945 |
|
SB481
Act 779
· 2 mentions in chapter, transcript
Matched: “SB481 Gilmore TO CREATE A MORE SUSTAINABLE SYSTEM OF PROPERTY INS…”
|
TO CREATE A MORE SUSTAINABLE SYSTEM OF PROPERTY INSURANCE FOR PUBLIC SCHOOLS, STATE-SUPPORTED INSTITUTIONS OF … | Gilmore | Notification that SB481 is now Act 779 |
|
SB483
Act 957
· 2 mentions in agenda, chapter
Matched: “…estrictions designating areas as 'Members and Staff Only'. SB483 Irvin TO REPEAL CERTAIN REPORTING REQUIREMENTS FOR THE STAT…”
|
TO REPEAL CERTAIN REPORTING REQUIREMENTS FOR THE STATE INSURANCE DEPARTMENT AND THE STATE SECURITIES DEPARTMENT; … | Irvin | Notification that SB483 is now Act 957 |
|
SB527
Act 774
· 2 mentions in agenda, chapter
Matched: “AGENDA (Revised 04/08/2025 @ 9:12 PM) Added SB527, SB602 & SB610 House Committee on Insurance and Commerce We…”
|
TO AMEND THE ARKANSAS HEALTH AND OPPORTUNITY FOR ME ACT OF 2021; AND TO INCREASE … | Irvin | Notification that SB527 is now Act 774 |
|
SB544
Act 775
· 2 mentions in agenda, chapter
Matched: “…CASH SURRENDER VALUE ACCORDING TO THE TERMS OF THE POLICY. SB544 M. Johnson TO AMEND THE ARKANSAS PHARMACY BENEFITS MANAGER…”
|
TO AMEND THE ARKANSAS PHARMACY BENEFITS MANAGER LICENSURE ACT. | M. Johnson | Notification that SB544 is now Act 775 |
|
SB583
Act 990
· 2 mentions in chapter, agenda
Matched: “SB583 C. Tucker TO AMEND THE LAW CONCERNING MAXIMUM ALLOWABLE COS…”
|
TO AMEND THE LAW CONCERNING MAXIMUM ALLOWABLE COST LISTS RELATING TO PHARMACY SERVICES. | C. Tucker | Notification that SB583 is now Act 990 |
|
SB596
Act 940
· 2 mentions in chapter, agenda
Matched: “SB596 M. McKee TO AMEND THE LAW REGARDING ENERGY; TO ESTABLISH A…”
|
TO AMEND THE LAW REGARDING ENERGY; TO ESTABLISH A STATE ENERGY POLICY; TO REGULATE RETIREMENT … | M. McKee | Notification that SB596 is now Act 940 |
|
SB610
Act 745
· 2 mentions in chapter, agenda
Matched: “SB610 J. Dismang TO AMEND THE GENERATING ARKANSAS JOBS ACT OF 202…”
|
TO AMEND THE GENERATING ARKANSAS JOBS ACT OF 2025; AND TO DECLARE AN EMERGENCY. | J. Dismang | Notification that SB610 is now Act 745 |
|
SB611
Act 900
· 2 mentions in chapter, agenda
Matched: “SB611 Dees TO AMEND THE SOCIAL MEDIA SAFETY ACT.”
|
TO AMEND THE SOCIAL MEDIA SAFETY ACT. | Dees | Notification that SB611 is now Act 900 |
|
HB1159
· 1 mention in chapter
Matched: “HB1159 J. Richardson TO CREATE THE RETAIL CONVENIENCE STORE SECURI…”
|
TO CREATE THE RETAIL CONVENIENCE STORE SECURITY ACT; AND TO REGULATE SECURITY MEASURES AT RETAIL … | J. Richardson | Died in House Committee at Sine Die adjournment. |
|
HB1177
· 1 mention in chapter
Matched: “HB1177 M. Brown TO AMEND THE ARKANSAS FRANCHISE PRACTICES ACT; AND…”
|
TO AMEND THE ARKANSAS FRANCHISE PRACTICES ACT; AND TO CLARIFY THE APPLICABILITY OF THE ARKANSAS … | M. Brown | Died in House Committee at Sine Die adjournment. |
|
HB1308
· 1 mention in chapter
Matched: “HB1308 Steimel CONCERNING UNFAIR PRACTICES RELATED TO RESIDENTIAL…”
|
CONCERNING UNFAIR PRACTICES RELATED TO RESIDENTIAL REAL ESTATE REPAIR CONTRACTS; AND TO REGULATE SOLICITING RESIDENTIAL … | Steimel | Recommended for study in the Interim by the … |
|
HB1408
· 1 mention in chapter
Matched: “HB1408 Pilkington TO ALLOW QUALIFYING PATIENTS OR DESIGNATED CAREG…”
|
TO ALLOW QUALIFYING PATIENTS OR DESIGNATED CAREGIVERS TO PURCHASE MEDICAL MARIJUANA USING A FLEXIBLE SPENDING … | Pilkington | Died in House Committee at Sine Die adjournment. |
|
HB1811
· 1 mention in chapter
Matched: “HB1811 Steimel TO AMEND PROPERTY AND CASUALTY LAW; AND TO REQUIRE…”
|
TO AMEND PROPERTY AND CASUALTY LAW; AND TO REQUIRE REASONABLE PROOF OF PAYMENT OF A … | Steimel | Recommended for study in the Interim by the … |
|
HB1950
· 1 mention in chapter
Matched: “HB1950 Torres TO PROTECT LICENSED FAMILY CHILDCARE HOMES FROM TERM…”
|
TO PROTECT LICENSED FAMILY CHILDCARE HOMES FROM TERMINATION OF HOMEOWNERS INSURANCE COVERAGE; AND TO PROHIBIT … | Torres | Recommended for study in the Interim by the … |
|
HB1956
· 1 mention in chapter
Matched: “HB1956 S. Meeks TO CREATE THE ARKANSAS NIGHTTIME ENVIRONMENT PROTE…”
|
TO CREATE THE ARKANSAS NIGHTTIME ENVIRONMENT PROTECTION ACT. | S. Meeks | Died in Senate Committee at Sine Die adjournment. |
|
SB475
Act 773
· 1 mention in chapter
Matched: “SB475 J. Dismang TO ESTABLISH THE PHARMACY SERVICES ADMINISTRATIV…”
|
TO ESTABLISH THE PHARMACY SERVICES ADMINISTRATIVE ORGANIZATION ACT; AND TO REGULATE PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS. | J. Dismang | Notification that SB475 is now Act 773 |
|
SB602
· 1 mention in agenda
Matched: “AGENDA (Revised 04/08/2025 @ 9:12 PM) Added SB527, SB602 & SB610 House Committee on Insurance and Commerce Wednesday…”
|
TO PROHIBIT INSURANCE COMPANIES AND APPRAISERS FROM REQUIRING AN INSURED TO USE CERTAIN FACILITIES TO … | Crowell | Died in House Committee at Sine Die adjournment. |
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We will be coming back after session and staying as long as that occurs, if necessary. But we are definitely coming back after session to at least hear one bill. So what I'm asking the committee to do is anything that has any controversy whatsoever, we're going to push to the end so we can run through all the bills that do not as quickly as we can to try to get everything moving. So, Representative Wing, if you want to come to the end of the table, identify yourself.
And what bill, I believe you're going to present a Senate bill, but it's going
Speaker 2
0:38
to be very quick is my understanding. That's true. This is Senate Bill 480, Representative Wing, District 70, North Little Rock and Sherwood. Members, this is just a cleanup bill, some language with regards to this came to us from the Treasurer's Office. Just cleaning up some outdated language and, frankly, some language that probably never applied because it came from the banking code and the treasurer's office doesn't exactly fit into that mold. And that's all this is. 480, SB 480, yes.
Speaker 5
1:09
Members, any questions? Seeing no questions, there's no one signed up? There's no one to like speak against
this bill? Anyone to speak for this bill? Okay, seeing no one, I believe. Representative Perry, you recognized? We have a motion to pass by Representative Perry. All in favor, say aye. Any
Representative Mark Perry
Unverified
1:28
opposed, say no. Congratulations, you have passed your bill. Thank you very much. Thank you, committee.
Speaker 13
1:49
Representative Wardlaw is going to run two Senate bills
Representative Jeff Wardlaw
Unverified
2:07
Senate Bill 519 has an amendment. Staff
Speaker 5
2:12
will circulate the amendment. Representative
Wardlaw, staff is circulating the amendment.
Go ahead and explain the amendment, please.
Representative R. Scott Richardson
Unverified
2:22
Committee, when we ran the bill, the House bill, to change life insurance payback, there was some language in there that probably wasn't constitutional because you can't do retroactivity. This bill fixes that language. The amendment
Representative Austin McCollum
Unverified
2:34
takes the days from 60 to 45. It's an agreed-upon amendment. Appreciate a good vote. Representative Wardlaw has
presented the amendment. We have a motion to adopt the amendment. All in favor say aye. Aye.
Representative Wardlaw, please present. You may present your bill as amended. I'm closed, Mr. Chair. That's the bill. Okay. Representative Wardlaw is closed.
Representative Lee Johnson
Unverified
3:02
Do we have questions for Representative Wardlaw? Why? Okay. Representative Richardson, you are recognized. Why do we
Representative R. Scott Richardson
Unverified
3:08
change it to 45? The original bill had 30. Once all the parties sat down yesterday, the agreement upon was 45.
Representative Austin McCollum
Unverified
3:14
The bill is completely agreed upon, 100% easy deal. is just fixing the unconstitutionality in the original bill.
Representative Robin Lundstrum
Unverified
3:21
Representative Lundstrom, you're recognized. Thank you. I get the unconstitutionality part, but I thought the 60 days was a good bill. I thought you ran a good bill the first time. I don't like changing the board. The first bill had 30 days. 30 days,
Representative Austin McCollum
Unverified
3:37
okay. All right. So it says delete 60 days. Yeah, the amendment deleted 60, carried it to 45, which was a compromise between the two parties. What's the 30? The
Representative Robin Lundstrum
Unverified
3:48
30 was the original. The 30 was the original. Okay. Well, I'll trust your judgment on that.
I thought you did a good job the first time. I'm sorry you're changing it.
Speaker 46
3:56
Me too. But it's what we have to do to be
Chair
Unverified
4:01
legal. Further questions? Representative McCollum, you're recognized. Thank you, Mr. Chair. Senator Boyd, what are you doing
Representative Austin McCollum
Unverified
4:13
here? What am I doing here? Anything to say about this one? Yeah. No, this is a good bill now. Okay.
Senator Justin Boyd
Unverified
4:18
I mean, basically, it does three things. It puts in a start date, which makes it constitutional.
It goes from 30 days to 60 days, I mean, to 45 days. And if you want to understand, the original concern was on a 1035 exchange where two companies have to work together. And the company that is, you know, doing the, sending the money over could actually be the one slowing things down. And so we just felt like there needed to be a little bit more time. And then the third thing is the original bill had an interest rate tied to the prime rate. The challenge with that was it could discriminate between two different policyholders.
If I had the issue today and somebody else had it tomorrow, this sets the date in statute, which is probably, again, constitutional. And it's a number that was already there. Everybody seems to be good with it. So it makes a good deal. The new interest rate is actually higher than the prime rate. So everybody was really
Representative Austin McCollum
Unverified
5:07
happy with that because it still penalizes company for holding it past the days that they're supposed to hold it. Okay. Motion at the proper time. Any further questions from the committee? Okay.
Seeing none, there's no one signed up. There's anyone who would like to speak against this bill? Anyone else would like to speak for this bill? Representative Wardlaw, are you
Representative Lee Johnson
Unverified
5:35
closed for your bill? I've been closed. Representative Wardlaw is closed for his bill. Representative McCollum, you're recognized. Motion to pass as amended. We have a motion to pass as
Speaker 5
5:46
amended. All in favor say aye. Aye. Any opposed, say no. You've passed your bill. I believe you're going to do one other.
Representative Austin McCollum
Unverified
5:52
I'm going to do one other. It should be quicker, hopefully.
Senate Bill 481 is the comparable bill to the school insurance bill we passed out of here as a House bill a couple weeks ago. So this is just a companion bill from the Senate. I'm closed. Representative Wardlaw is closed for his
Speaker 5
6:08
bill. Questions from the committee? No questions? There's no one signed up. We don't
even like to speak against this bill. No one else for this bill.
Representative Wardlaw has closed. We have a motion to pass. Representative Eubanks, all in favor say aye. Aye. Any opposed say no. Congratulations, you've passed your bills. Thank you, Mr. Chair. Reverend
Speaker 64
6:40
Collins, you have house bills to run, so I'm going to recognize you. Members, these are, I believe,
Representative Andrew Collins
Unverified
6:47
1009 and 1014. Sorry, no, just 1994. That's the only
Speaker 5
6:51
one running. You're only running 1994? Yes. Can we pull the others? Yeah, you can pull those off.
So 1009 and 1014, you can just move to defer. They're gone. Yes. Okay, thank you. 1994. You may proceed with, do you say 1994? Yes. Okay. Thank you, sir. Just introduce yourself for the record and
Representative Andrew Collins
Unverified
7:12
proceed. Sure. Andrew Collins, District 73. So
this bill is basically coming out of some incidents that happened where many storage facilities were broken into. Some of the belongings were scattered around the parking lot, and they were left out there for months, and no one ever notified the tenants.
There was some local news stories about this, and I had a constituent reach out to me as well about a different incident. So talked with the Self-Storage Association, negotiated and got the language that actually serves their interest as well as the tenant's interest, where if the self-storage facility knows about a break-in or theft of property, they just need to notify the tenant. It doesn't put any additional obligations on them. They don't have to even know, but if they do know, they just have to notify the tenant.
It benefits the tenants, obviously, and it also benefits the self-storage operators because this thing shouldn't be happening, and they want to reestablish public trust in what they're doing. So that's it. Happy to answer any questions. We do
Representative Lee Johnson
Unverified
8:18
have questions. I believe Representative McGrew, I believe you're first.
Representative Richard McGrew
Unverified
8:22
Thank you, Chairman. You said, can you point in the bill to where, I'm for this, but
can you point in the bill where it says, because I'm concerned that the person that owns the facility doesn't know about it.
If he's got a big facility and hadn't went, he doesn't know about it. And it says in the bill that he has to notify within five days. Where does it say that knowingly?
Representative Andrew Collins
Unverified
8:46
Right at the very end there, page 2, line 15. Well, there's two different ways it says it. So very in line 15 on page 2, the operator does not have a duty or obligation to determine whether a lease space has been compromised. So they don't have to find out, but if they do find out, then they notify. And the other way that we do it is that compromise is defined on page 1, line 30, as that an operator has actual knowledge that any of these things happen.
Say that in the last part, Mr. Gaines. Sure, that they have actual knowledge. That's in line 30 on page 1. So nothing gets triggered until they actually know something's happened. And that was something that was important to the Self-Storage Association,
Representative Richard McGrew
Unverified
9:31
too. I still don't see, because it says on line 10 that they must let them know within five days. I see the bottom says they're not obligated to,
Representative Andrew Collins
Unverified
9:42
but it doesn't say if they have-- So let me-- so you're looking at B there
on 10, but it's only if there's a compromise lease, OK? That's the trigger for anything happening. So the definition of compromise is up on page 1, line 30. So compromise means that an operator has actual knowledge that any of these things have happened. So nothing goes without actual knowledge because of that definition of compromise on page 1.
Speaker 75
10:14
Page 1, line what? Line 30. So that word compromise is the operative word. I see it. Thank
Chair
Unverified
10:21
you very much. Sure. Thank you, Representative. Further questions from the committee? Representative Lundstrom,
Representative Robin Lundstrum
Unverified
10:27
you're recognized. Thank you. Going back to that word compromised, who decides? I mean, that's a pretty big, it's a big open door to say, well, I just didn't know I was compromised, or I did know. I mean, it just seems a little subjective, I guess that's the word.
Can you give me some comfort on that?
Representative Andrew Collins
Unverified
10:50
Sure. It's a question of proof. I mean, so if you would need to make your case that the person has actual knowledge, it may be a difficult case to make, but it's one of those things that if it ever does come out, you'll either have the evidence to support it or you won't. Or you'll have to hire an attorney. I mean, I don't see how any of these things get settled without. I mean, that's the process in the self-storage law, you know, for things to be resolved that they need to be. But that's the customer benefit, basically.
That's the way that they can get recourse if they need to in this past situation.
Representative Robin Lundstrum
Unverified
11:27
And the problem we're trying to solve here?
Representative Andrew Collins
Unverified
11:30
The problem we're trying to solve is that operators knew about break-ins and just didn't tell their tenants. And so that is a problem, and it was a problem for people who had this happen to them and they had no recourse. Okay. I think that the solution, I'm sorry, let me interrupt. No, no, you go ahead. The solution is more to deter it, right? I mean, that's the preferable solution, not to have a bunch of lawsuits,
but for people to realize operators know this section of code real well. I actually own a self-storage myself, and you know this section of code. You follow this section of code. If you know you need to notify tenants within five days, I would bet 99% already do. You're going to make sure you do that because you don't want to open yourself up to liability. That's how it's really supposed to work. I guess my concern is the market's
Representative Robin Lundstrum
Unverified
12:15
going to dictate. If you're not taking care of your property and trash is laying out there or somebody got broken into, you're going to lose a customer, so the market would take care of it.
So 99% of them are doing their job. 1% maybe aren't, and they'll lose customers. In this case,
Representative Andrew Collins
Unverified
12:30
it's already a regulated industry. We have a section of code that deals with self-storage. And they want, well, I won't say they want, but they see the value in communicating that this is one of the things you get. There's other things you get. You get a process. You get a lien. You get an auction off sale. There are other things that are guaranteed for customers as well as operators. This is one of the things that would be a guarantee for customers in an already regulated industry.
Representative Jim Wooten
Unverified
13:05
Representative Wooten, do you have a question? Thank you, Representative Collins. It may be in there, but I didn't
Speaker 90
13:10
see. Are they required to frequently inspect once a
Representative Andrew Collins
Unverified
13:14
week or something? No, that's a good practice, but we're not getting into that level of granularity. That's up to the operator how they want to do their inspections. This is just if they do have knowledge, which they probably will within a week or two realistically,
but there's different ways of managing a self-storage facility. How would they determine
Representative Jim Wooten
Unverified
13:33
if all the merchandise is scattered over the parking lot without inspecting the units as to which one it came from? Well, you have to have knowledge that it was of a specific unit, and
Representative Andrew Collins
Unverified
13:44
if you don't, then you don't have that knowledge. So if you don't know which unit it was breaking into, there's no evidence that there was a break-in at the unit. You just see stuff scattered around. There's no way you would know who to contact. So in this situation, you wouldn't have an obligation to contact that tenant.
Representative Dwight Tosh
Unverified
14:01
Thank you. thank you mr chair representative tosh recognized thank you mr chair representative i'm just kind of curious you know i ran legislation this session concerning storage facilities and part of that legislation was that for the storage facilities that they be able to renew their contracts and make sure there was a clear understanding between them and notification of what was in each storage facility without getting back into that bill.
But all the things that we're covering here today about who may have known or what should be known concerning notification could not all be covered in the contract. I mean, when you establish the contract between the person that is renting the storage facility with the storage facility owner, would that language not have been just better served if it was in the contract, say, and both agree to that instead of having to run legislation to do it?
I'm just curious why that approach wasn't
Representative Andrew Collins
Unverified
15:10
used. Sure. That would be a good way to do it, too. I think that those contracts don't typically have this sort of thing. And, again, this is a section of code where we have several things that are laid out in code regarding the kind of the outer parameters of what's expected and what's guaranteed for customer protection. So this would be one of those things. It would just be an outer guarantee. If they want to negotiate something more detailed in that contract, they can do that, too.
Speaker 5
15:39
But that's the thought behind it. Any further questions from the committee? Seeing none, is there
anyone in the audience who would like to speak against this bill? Anyone else who would like to speak for this bill? President Collins, you're recognized to close. I'm closed. I'd appreciate a good vote. Okay.
Representative Allen, you're recognized. We have a motion to do pass by Representative Allen. All in favor, say aye. Aye. Any opposed, say no. No. Congratulations, you have passed your bill. Thank you, committee. Representative Meeks, I believe you have two House
Speaker 96
16:34
bills. Is that correct? Members, it appears this is 1955 and 1956. Yes, Mr. Chairman, with your approval, we'll start with 1956. The two of these work in concert.
I do have an amendment, and just to add Senator Urban is
Speaker 5
16:48
a sponsor for the Senate. Motion to adopt the amendment by Representative Laideman. All in favor,
Speaker 96
16:53
say aye. Aye. Reverend Meeks, you can proceed with your amendment, with your bill as amended. As amended, thank you. Colleagues, this is a special bill for me for two reasons. Number one, this is a topic that I actually started working on as a freshman. And number two, this will be, since I'm term limited out, this will more than likely be the last bill of mine that I actually present before our House committee.
So I'm hoping that you all can help me go out with a win here. What this bill does, in a nutshell, is basically the first bill modernizes language. The second bill repeals the outdated language. I wish I could get away with just that, but let me go into a little more detail. So back in the mid-1990s, the General Assembly passed the Shielded Outdoor Lighting Act with the laudable goal of having street lighting fixtures that were installed across the state to be healthier and more energy efficient, save taxpayer money, and so forth.
And while the intentions were good, unfortunately, the law was very vague. It is way too simplistic, and I have AG opinions to that effect. And as you can imagine, with the passage of time, it is now woefully out of date. And so what this bill does, it attempts to modernize that, And it does it in a couple of very important ways. First off, what I'm doing here is I'm going to pull the municipalities and the co-ops
completely out of the law. The municipalities and the co-ops, they have locally elected boards. And so these issues going forward, they can deal with those on a local issue. So this bill basically is going to apply strictly to Entergy. And what it's going to require is that going forward through time, when they go to install brand new street lighting systems, so we're not talking about they're going to go replace everything now.
We're not saying that when they're repairing single fixtures, this is when we're installing brand new equipment that they'll meet three standards. First one is that the outdoor lighting fixture be fully shielded. that's pretty much a standard. They use LED lighting these days. That's pretty standard, so no issues there. The second thing that it would require is that the illumination is based on the standards set by the Illumination Engineering Society. If you've never heard of them, that's the organization that sets the national standards for lighting in construction
and so forth. So, for example, whenever they go to build a building, Representative McGrew, you're probably very familiar with this, they're the ones that set the standards to determine how many light bulbs they are, where they're located at, what their lighting is, to make sure you get good lighting. The reason why that's in there is because if somebody decides to sue because the street lighting is too bright, this will give the courts an objective standard by which to make a decision on that. So that's why that's in there. The third part and final part that they would have to do is based on the color temperature.
So the color temperature of the bulb determines the color. So if it is 7,000, that's going to be a blue-white light. It's a very harsh light. If you go down to the under the spectrum, you get down to about 2,500, and that's kind of a warm red light. So what the bill requires is that when they're installing on primary streets, busy corridors, they will use a 4000 Kelvin, that's a natural white light, it's kind of like what we've
got in this room, that is a federal standard, so basically all we're going to be doing is adopting a federal standard there, so I'm not, you know, pulling pie in the sky, it's a federal standard. And then in residential areas, we're going to drop that to 3000 Kelvin, so it's going to be more of a warmer red color. Reason why we want to do that, going to a little bit of science here, is we were designed by God for a day-night cycle, right? During the day there are certain hormones that are active in our bodies that make us alert and prepared for the day. At night when we see
the red light of sunset, that starts to turn those hormones off and at dark we get melatonin production. Melatonin is important for us to have a good restful night's sleep. You have to have that darkness. You all have probably seen all the articles that warn people about You know, looking at your cell phone at night and being exposed to that blue light at night. Because when we see blue light, blue light is what triggers those daytime hormones. So by installing the warmer red light at night, what we're doing is we are still providing plenty of light for safety and security,
but it's a much more healthier light for our citizens as they're trying to sleep. This session, we have passed numerous bills on breast cancer and trying to, you know, reduce that within our state. Study after study has shown, believe it or not, that women that live in cities where there's a lot of this extra light at night are almost twice as likely to get breast cancer as their rural counterparts. It's a huge risk factor.
And guys, we're not out of the woods either. For men, it's prostate cancer. These are hormone-driven cancers that are driven by this. Another study came out just a couple months ago out of the blue that said one of the highest risk factors for Alzheimer's disease for people under the age of 65 is exposure to this blue light at night. And so there are actually serious health ramifications for having poorly designed lighting systems in our neighborhoods at night. So that's what they need to do.
Now it also adds some important exemptions that are not in the law right now that allows for historic recognitions, for sports facilities, monuments, bridge lighting, also for mental health, correctional facilities, none of these important exemptions exist in the current law. And then in order to make sure we're maintaining local control, the last exemption is that
if one of these lighting systems is going in a local area and it can't meet the needs of that local community, then the city council can pass an ordinance exempting that project from this standard. The last thing that it does is when Entergy does outdoor lighting fixtures, they have to do a big rate case study and go to the Public Service Commission to see about setting those rates.
What the last thing that this bill does is it allows Entergy to go ahead and install any new fixtures, charge a reasonable rate for it, and then when they go to their next review case, add the fixture to their list of offerings at this time. One of the reasons why this is important is the city of Gilbert, which is up along the Buffalo River, they wanted to install dark sky compliant lighting. And one of the reasons why they had trouble getting it done was because Entergy didn't have one of these fixtures in a rate case.
And so they were going to have to wait and go through this long process with the Public Service Commission to get it done. And it actually took Senator Irvin to step in to allow this to get done. So this would allow Entergy more flexibility in working with cities to get this done. I don't think he's here. Oh, there he is. I do want to publicly thank Mr. Bethel from Energy for working with me on this. He provided a lot of the language in here. I think he said he's contacted most of the committee to let you know that Energy is good with this.
And so as far as I know, nutshell, there's no opposition to this. It brings back more local control and helps us to have a better, more healthy lighting going forward. So with that committee, I will be happy to try to answer any questions anyone
Speaker 97
25:16
has. Thank you for your presentation. We do have a couple questions.
Representative Jim Wooten
Unverified
25:22
Representative Wooten, you're recognized. Representative Minx, in the 1990s, when the law, did that deal with the shade of the color of the streetlights?
Wasn't that part of the discussion? Yeah,
Speaker 96
25:34
so the color temperature wasn't really scientifically known at that time, But it was the shielding. So the idea there was if we install lights where the light goes up into the sky, we're wasting energy and electricity. It's not doing any good there. If the light's going out to the side, it's creating glare, which is bad, especially for our elderly drivers. So what they wanted to do is they wanted to make sure that the light we're using is actually going down to the ground where it's useful.
Senator Sam, I think it was Ledbetter, he was the one that ran that bill. I don't know if you
Representative Jim Wooten
Unverified
26:10
know him or not, but he was the one who got it passed back then. So it did deal with the color and we're relative. You see some street lights that are real bright, and you see others that have, I call it an amber color or yellow color, sulfur color. Right. So which one of these is permitted under your bill for street lighting?
Speaker 96
26:31
Right, so on the main thoroughfares, it's going to be 4K or less.
And so the ones that are kind of this natural white light, those would be allowed. The yellow ones would be allowed. The warm ones would be allowed. Basically, the only ones that wouldn't be allowed are those really harsh blue ones. Talking with both the energy and the co-ops, my understanding is 4,000 is kind of the industry standard for these now because it's a federal standard. And so, you know, I think thankfully those blue ones are going away, but. All right.
Chair
Unverified
27:06
Thank you. Thank you, Mr. Chairman. Thank you. Representative McGrew, you're right next.
Representative Richard McGrew
Unverified
27:11
Thank you, Chairman. And Representative Meeks, I appreciate what you're trying to do. This is an industry that has, when they did this night sky thing, you understand
in the 4,000K and all, degrees of Kelvin is the color of light. But when they did this, the lights can only shine down, not up into the sky, so we can see the stars at night. If you're looking at a city block that's been done with this, it looks dark down through there
because the buildings are not lit up because the lights are all going straight down. To me, it makes it a little unsafer. But it's added a lot of cost to my industry. And so one of my questions, and it says in here that the Public Service Commission is permitted to recover in prompt and timely manner, all investing expenses. So my question, it might be for Bethel. I know we have a tremendous amount of street lighting and all that is not compliant to this. It's all over the city of Hot Springs, all over the city of Little Rock.
So what's the cost going to be? And then the ratepayers are going to have to pay
Speaker 96
28:13
that cost. So this is not, we're going to go replace everything that's out there right now. This is just when we're installing new systems. So this is just going to be going forward. we're going to do this. The cost, from what I understand, is comparable with what we're doing now. So I don't see any major cost change. Mr. Bethel, I'd welcome you if you want to come to the table if it's okay with the chairman and would like to address that. But this is,
as I understand it, this would allow whenever they're going to install a new fixture, unless they've done a rate case for it, they don't have any way of billing for that. So this just allows them to go ahead and install any new fixtures, recover the cost for those, and just charge a fee like they normally would. And then when they go to do another rate case, then they would just include that new option in the rate case. And like I said, Mr.
Bethel, I'll let him introduce himself, and maybe he can, if he has any other words he wants to add.
Speaker 5
29:12
Yes, just introduce yourself for the record, who you're with, and you may comment
Speaker 108
29:17
on the testimony. Thank you, Mr. Chairman. I'm John Bethel, Director of Public Affairs for Energy, Arkansas. And Representative McGrew, if I understand your question correctly, I don't have the cost of what those fixtures are going to cost, but what we will do is we'll identify fixtures that comply with the requirements of the bill, and we'll develop a rate for those fixtures, and then we'll take that proposal to the Public Service Commission to add that fixture to our lighting rate schedule,
and then that's what the customers would pay. Those fixtures, the LED fixtures, are certainly more expensive than the old mercury vapor lights and all of those. And you can look at our current rate schedules and see that the LED fixtures are more expensive, but we are moving just because the industry is moving toward all LED fixtures, and so you'll see more of those, but they will build the rate. And that's how we were able to get to a neutral position on the bill, because we were concerned about how can we recover our costs uh we do recognize it will cost something
Speaker 110
30:22
and uh that's we don't i don't have the number of what
Representative Richard McGrew
Unverified
30:26
that'll be so it will be an additional cost to the rate there also the parabolics on this type
of light that there are a lot less the cone smaller doesn't spread out as far so you will have to add additional lights to cover
Speaker 96
30:39
the area is that correct not necessarily so it depends on the on the fixture so i'll just don't want to I'll follow up on that. So LED fixtures that are coming online, they last a lot longer, and they have a lot less maintenance requirement, and they're a lot more energy efficient.
So there may be a little more upfront costs, but over the long run, they're going to be cheaper because of that, right? But yes, you can put lensing systems underneath them. They've got them in Conway, or they've got them over here in North Little Rock, and I think it's in the Argenta district. So when the light comes down, it hits a lens, and then it spreads out. So you can still do this and get the coverage. It's just making sure you pick the right fixture to
Representative Richard McGrew
Unverified
31:20
get the job done. Well, in my experience on parking lots, when we used a night sky light, we had to use more
of those lights because the whole purpose of night sky
is to keep the light from spreading you on up. There is more design now that may let them spread out a little more. But that's my concern is the cost to not only the general public on rates but the cost to businesses that
Speaker 96
31:44
are putting lights in that these lights may be more expensive? Well, it doesn't affect businesses. Businesses, private property, they can put whatever lights they want in. But remember, when we install the poor lighting, there's also a health cost. Like I said, people in these areas are twice as likely, and I mean, you can Google it.
Those of you who got your laptops there, Google, light pollution cancer. I mean, you'll see all sorts of things come up. There is a huge cost to not doing the right thing. So I understand your concern, but I don't think it's as large of a concern as, you know, thinking, hey, we're going to be spending billions of dollars. We're not talking about that by any means. Thank you. Representative Ferguson, you're recognized.
Representative Kenneth B. Ferguson
Unverified
32:36
Thank you, Mr. Chairman. Representative Meeks, is this a similar bill you had last session? Similar, but not the same. There's some distinct differences. Okay. You reached why I
asked, and maybe Mr. Bethel can answer this. City of Pine Bluff was looking at doing something similar to this, just on our main airfares. but when we looked at the cost for the city, it was going to be kind of high.
Speaker 120
33:09
Do you remember that, Mr. Bethel? Yes, sir, and it was going to be quite a
Speaker 108
33:17
bit more expensive than their current lights that they had in place at the time we
Representative Kenneth B. Ferguson
Unverified
33:22
were working with the city on that. Yes, sir, that's correct. And
in thinking about that and thinking about this bill, it sounded similar to what we would have to do. I can't remember the figures, but it was something that at that time the past mayor didn't want to do. I think even you came down and met with us, City Council Chambers, with the mayor and everything.
Yes, sir. That's my concern. So can you speak to that, if your memory serves? It was when we did the
Speaker 108
33:52
comparison of their current lights, which a lot of them were mercury vapor lights at the time, And the cost of those versus the LED fixtures that the city was looking at was significantly more expensive. And that was the city, as I recall, that
Speaker 123
34:06
was a factor in making the city's decision. Yes, sir. Aren't these lights similar in this bill?
Speaker 103
34:16
They could be. It depends. The bill doesn't require LED lights.
Speaker 96
34:20
It's just the industry, that's where it's going, you know, in the next couple of years. And, you know, maybe Mr. Bethel has a different thought on this. I mean, that's where all lighting fixtures are going to be, these LED fixtures. The mercury vapor is going away, the tungsten, they're all going away. So the only question, it's not whether LEDs are coming. The LEDs are going to be here. The cost, what that's going to be here. The only question is the color temperature issue.
Go ahead. Go ahead. Yeah, the only question is just going to be the color temperature issue And the cost for, you know, doing $4,000 versus $3,000, it means they'll have two fixtures instead of one. And as I understand it, and correct me if I'm wrong, not a lot.
Is there any, I don't know if there's really any cost difference between those two
Speaker 108
35:14
colors? I'm not sure, but I would assume probably not material. And we are phasing out the mercury vapor lights because they're no longer manufactured and available.
Representative Kenneth B. Ferguson
Unverified
35:25
Well, one last question, Mr. Chair. So, Intergy, you guys are going
to be proposing a different kind of lighting for cities? Yes, sir.
Speaker 108
35:37
If the bill passes, we'll develop a rate schedule for lights that conform to the requirements of the bill. But if
Representative Kenneth B. Ferguson
Unverified
35:47
the bill doesn't pass, you're still telling me that you're
going to be recommending a different kind of lighting.
Speaker 108
35:56
Am I hearing that correctly? Yes, sir. And what we have been doing is working with our cities as we replace fixtures because we can't replace a mercury vapor fixture with a mercury vapor fixture anymore because they're not available. And so we have begun to transition our city customers fixture by fixture to the LED fixtures. So there's going to be an extra cost one way or the other. Is that what
Representative Kenneth B. Ferguson
Unverified
36:15
you're saying? Yes, sir. Thank you, Mr. Chair. Representative Wooten, did you have a question?
Representative Jim Wooten
Unverified
36:27
Yes. We've talked a lot about the health situation and all
of that, but isn't it a fact that proper lighting, and my question has to do with private property, buildings and that type of thing, Isn't it a fact that it is a great deterrent to criminal activity? So that's an interesting question. Now, again, the bill doesn't address that. I believe
Speaker 96
36:52
as a private property owner, if you want to light your property up like the noonday sun, go for it.
I would question your sanity for doing that, but that's your right as a private property. On that question, it depends. There have been studies that have been done that show that when we light an area up too much, it actually invites criminals because criminals like everybody else they like to see what they're doing and crimes of opportunities and study after study has shown those crimes actually can jump 40 to 50 percent in areas that are over lit because what is what ends up happening a lot of times is criminals can walk down
a neighborhood in the middle of the night and they can look in all the cars and see all the stuff that people have left in there and they just open you know hey, you forgot to lock your car, I see all your stuff in there, and grab it. When they've looked at issues with graffiti and vandalism, those all go up in well-lit areas. There have been studies that have shown where they've taken areas where there was a lot of graffiti and vandalism, they turned the lights completely off so it was dark, and it stopped. Because if a criminal is trying to vandalize an area that's dark,
they're going to be over there with flashlights, and it's going to draw attention to them. So, it's mixed. So, yes, in some instances, crime is deterred, but in some instances, crime is actually increased. So, that's why it's a case-by-case basis on making sure we're wise about the lighting that we're installing. And that's what I'm trying to do with the bill here. Representative McGrew? Thank you, Chairman.
Representative Richard McGrew
Unverified
38:34
So, actually, irregardless of whether this bill passes or not, you're going to upgrade the LED lights. And this bill is not going to affect that one way
Speaker 108
38:44
or the other, correct? Yes, sir. We're transitioning in that direction because that's what's available on the
Representative Richard McGrew
Unverified
38:50
market. Right. And I understand. And that does save money for, I don't know if it'll save the ratepayers money, but it saves energy money. But also, what I'm concerned is about the cutting down of the light.
It'll be less lights on city streets. I've seen city blocks that have been lit this way versus the other way. The new way, they look a lot darker for me. It would be a concern for me if my daughter was working down one of those streets. And also, one other small correction, mercury was outdone a
Speaker 96
39:24
long time ago. The new one is metal halide. Right. And again, representative to that concern, the bill doesn't stipulate how those are designed for lighting. That's a function of how those systems are designed.
The goal here is not to get rid of light. It's not to make it so dim that you can't see. Now, there are cities that have done that. They've made a nice dim glow, and that's a local choice. We're not trying to do that. All we're saying is that going forward, we want to use energy-efficient fixtures that make sure that the light goes where it's supposed to and that it's using a color temperature that's healthy for humans. You know, it'd be similar to if I was at the courthouse lawn and I set up a sprinkler system there
and half the water was going in the road and half the water was going on the lawn. I mean, we'd all agree that the half the water that was going out on the road is wasted, right? And so that's what these shielded fixtures are doing. We're trying to get rid of that waste and make sure it's going where it's actually useful and productive. So, yes, my goal here is not to get rid of lights. My goal is let's be smarter about it and let's make healthier choices about it. I mean, there's actually, and of course, this is in the future.
I don't think anybody's done this in Arkansas. But as part of these new smart cities that you're hearing about, They have street lights now that are controlled from a central location. And so, say if you call 911 and there's a problem at your house, as the first responders show up, the street light that's closest will actually blink and flash to help first responders find where they're going. They have street lights that will dim at night. And if there's something going on, the city can bring these things up.
They have Wi-Fi in them now, so this technology is coming. And, of course, I don't want to pay any more in my electric bill than anybody else does, right? But this is coming. The question is, do we install the healthier version or do we just slap whatever the cheapest thing is up there regardless of the impacts? And my hope is, with your help, we're going to make sure going
forward here in Arkansas, we're going to choose the better, smarter, healthier choice. And I
Representative Richard McGrew
Unverified
41:40
will say that I do believe it is a smarter choice in some ways,
especially the main reason all this started was so we could see the stars at night. I live out in the country for that reason. Right, right. But my concern is in the construction, and it always costs a lot more money. And in this particular instance, the taxpayers having to pay the bill. Right, but again. I'm not completely against it. I'm on both sides of the issue.
Speaker 96
42:11
see it. Right. And I've been there before on bills. I had one yesterday. And again, you know,
for me, Representative, that's how I got interested in this subject to begin with was the night sky because, as you all know, I'm an astronomy educator. But it's way more than that. This is human health. This is wildlife. This is energy conservation. We already talked about the criminal aspect of it so this touches a lot a lot of different areas okay thank you any further questions okay thank you committee thank you for
all the questions there's no one signed up there
but is there anyone in the audience who'd like to speak against this bill okay anyone else who'd like to speak for this bill represent
Representative R. Scott Richardson
Unverified
43:02
richardson do you have an inquiry Do we have anybody health care? I'm curious about the health impacts that he's saying he's had. Do we
Speaker 96
43:10
have anybody signed up to speak? There's no one signed up to speak for or against. No. And, Representative, if you want, I'm more than happy to delve into that further. So what happened? Okay, okay, okay, yeah. Or, like I said, if you get bored one night, just Google light pollution, human health,
and there's all sorts of studies out there. It'll help you sleep better. That's right. Representative, make sure you recognize the clause for your bill. All right. Thank you, colleagues. So as you know, I'm just going to make two quick points to finish up here. Colleagues, I've been studying this for a very long time. I know that maybe for some of you I'm asking for a degree of trust here. I hope through the years I've earned that trust that this is a good bill.
I don't, you know, like I said, my intention here is not to raise bills. These fixtures are coming regardless. It's just, are we going to install the healthier ones? Second, and my last pitch here to you, is as we've gone through the years, almost every one of you at this table has had bills, things you've been passionate about that you've tried to run. I've always been there to try to help you, support you, and, you know, bills that you guys have been passionate about.
you know, I could go around the room, you know, Representative Eves had a very complicated, I know you're smiling there, but you had a very complicated energy bill. I spent hours, you know, going through that with you, helping support you there. Representative Ladyman, you had the, you know, the term limits bill. Unfortunately, we didn't get it through, but I was there to help you and support you with that. You know, Representative McGrew, I know you're on the fence here, but, you know, when you had your lighting bill, I mean, I was there to support you on that bill. So maybe, my hope is I've been there to support you all, and I'm hoping that you guys can help me out and support me with this one.
So with that, I'm closed, and I appreciate a good support. Thank you. Thank
Chair
Unverified
45:05
you for your, thank you for your presentation and your testimony. I believe Representative Richardson has to be
recognized. Motion to pay. Has amended. Has amended. Okay, so in all seriousness, we have a motion do pass as amended by Representative Richardson. Do we
Chair
Unverified
45:25
have any further discussion on the motion? Thank you, Mr. Chairman. In all seriousness, you know, this is a good thing.
Representative Jack Ladyman
Unverified
45:34
We're wasting energy. I don't like to waste energy. But just talk about the color of the lights and how that affects health and all that. I don't know whether anybody else in here has worked in the chicken plant or not and went in the kill room where the chickens get killed, but I have. And we put blue lights in there because the color of the light affects animals as well as people. Those chickens calm down as soon as you put them in a room with the blue light. In our prisons, we do similar things with lighting. So it does affect humans, and it does affect animals.
And, you know, I like the bill. I know there might be some costs, but it is a good bill in my opinion. I used to be a Luminating
Chair
Unverified
46:13
Engineering Society member, so I know a little bit about it. Thank you. Any
further discussion on the motion? Okay. Seeing none, we have a motion due pass as amended. All in favor say aye. Aye. Any opposed, say no. Congratulations, you have
Speaker 96
46:29
passed your bill. Thank you, colleagues. I appreciate it. So the second bill is really easy. It just repeals the, I do have an amendment to add Senator Irvin to the bill,
and it just repeals the old, now obsolete language. You said the first one was easy, so. Right. Well, this one's even easier. 1966, or 19... This is 55. 1955, yeah, thank you. So, again, the amendment just adds Senator Urban.
Motion to adopt the amendment to add Senator Urban by our representative Eubanks. All in favor, say hi. Opposed, say no.
Speaker 96
47:09
You may present your bill as amended. Again, colleagues, this just repeals the obsolete old 1990s bill. And with that, appreciate a good vote. Representative Leidemann, you're recognized. Anyone to speak against this bill,
Speaker 5
47:29
for this bill? You're recognized or close? Representative Leidemann, motion do pass as amended. Motion do pass as amended. All in favor say aye.
Any opposed to say no? Congratulations, you have passed both of your bills. All right, thank you, colleagues. Thank you, Representative Meeks. Representative Barnett, you have a House bill, so I want to get to you, I believe, is this HB 1625? Is that correct? Introduce yourself for
Representative Lincoln Barnett
Unverified
48:10
the record, and you may proceed with your testimony. Good morning, everyone. Thank you, Chair. I'm Lincoln Barnett, District 63. I'm before you
today to present House Bill 1625, which is a consumer protection bill for homeowners. In the course of speaking with constituents who live and work in my district, I was made aware of an issue that exists within current code, in particular, ACA 17-52-318, Section A, which requires that home inspectors carry general liability insurance. The issue with requiring home inspectors to carry general liability insurance is the fact that the general liability policies that are currently required by law
do not provide coverage for their actual home inspections. The General Assembly, when passing this provision, aimed to protect consumers. However, the mere requirement of general liability insurance misses the mark in protecting consumers. House Bill 1625 removes the requirement for general liability insurance and replaces it with professional liability insurance, which is also known as errors and omissions insurance. These type of policies will ensure that the home inspector's inspections are covered.
And in the unfortunate event that errors are made by the inspector, their policy will provide the coverage that is needed to protect the consumers. There are two cases in my district that I'm familiar with, that our existing law has left those consumers without protection. One married couple who purchased a home for $250,000 after having it inspected only to find shortly after purchase that there were significant electrical problems overlooked by the home inspector. Those repairs were near the range of $100,000.
Despite the evidence presented in court, the general liability insurance policy did not provide coverage. There was another case in which a couple purchased a home after having it inspected. The inspector simply stuck his head under a crawl space and took a photo. And if he had done a thorough inspection, he would have found out that there were significant foundation problems with the home and that the supports were rotten. The new homeowners purchased the home and moved in and discovered the structural problems afterwards, costing them about $75,000 to repair.
In both those cases, the home inspectors had insurance and were found to be negligent in their inspections. However, the insurance carriers would not provide coverage for the home inspector's errors under the general liability insurance policy. House Bill 1625, in its current form, would address the existing loophole and write an unintended wrong, providing our constituents in this state with the intended consumer protections. So I'm before you today to ask for your support in strengthening consumer protection in this state,
and I'm willing to take any questions you might
Chair
Unverified
50:58
have. All right, Representative Leitemann, you're recognized for your question.
Representative Jack Ladyman
Unverified
51:03
Thank you for bringing this bill. I think it's a good bill, but there's a fiscal impact statement, right, for your bill? Yes, sir. And it shows no fiscal impact. But my question is, the people, the industry, people that do these inspections, is it going to be an extra cost for them? Have you talked to them? So the amount of coverage
Representative Lincoln Barnett
Unverified
51:22
is going to stay the same that they would if they had the general liability.
That is not changing. So I don't foresee it being too much of an additional cost, if any. They're just required to have the correct type of insurance. So are
Representative Jack Ladyman
Unverified
51:39
the inspectors on board with this? So
Representative Lincoln Barnett
Unverified
51:42
I have not had any known opposition, but however, I did have a conversation with someone that was representing the Arkansas Association of Real Estate. When I first drafted the bill and filed it, I had language in there that said general liability insurance that covers errors,
and their concern was that general liability doesn't cover errors and that the correct policy needed to be errors or omissions, which is also known as professional liability insurance. All right.
Chair
Unverified
52:17
Thanks. Representative Perry, you're recognized for your question. Thank you, Mr. Chairman. Representative Barnett. Yes, sir. I like
Representative Mark Perry
Unverified
52:24
the idea, but a couple of things. Okay. They still need liability insurance because that's going to cover their premises and operations for damage. If they cause damage to a particular home, what companies will offer professional liability insurance?
Professional liability, I understand, on the side of it, where if they fail to recognize, like you said, electrical or something that was major should have been repaired or should have been pointed out, is this coverage available through an association, through individual carriers, and what's the
Representative Lincoln Barnett
Unverified
53:08
approximate cost? I don't know the quote-unquote approximate cost in my conversations with having the fiscal impact done
and with talking with the communication with the Arkansas real estate inspectors representative that reached out to me. They weren't concerned about the cost. They were just wanting to make sure that we weren't requiring for them to have both and that it was clear in the language of the bill that it was professional liability because that would actually cover the errors. Okay, so follow-up.
Representative Mark Perry
Unverified
53:49
Yes, sir. You're crossing out general liability, so it's wise to carry general liability. You'd be crazy not to. But if we're requiring them to have professional liability, I'm for the idea. But you want to make sure that it's available and affordable. Does the association offer it? Because you don't want to mandate something that you can't get. It's kind of like an OBGYN. Their liability insurance is astronomical.
This could be, depending on the situation, it could be $1,000 a year, $2,000, $3,000. I mean, is it available? There wasn't
Representative Lincoln Barnett
Unverified
54:33
a concern expressed to me about availability when they communicated with me. Is there an
Representative Mark Perry
Unverified
54:41
association? Is there someone from the association, the Home Inspector Association here, that can answer that question? That maybe they have a group professional liability policy?
I don't see anyone here. Yeah, I'm not seeing anyone there, Representative Perry. Representative Perry, so your question is, is there
Representative R. Scott Richardson
Unverified
55:04
an errors and omissions, just like there would be for an insurance agent or anything else, that they would be able to ascertain to protect themselves? Is that what your question is? Right. Maybe the insurance department could help us. If you
would, Jimmy Harris, please come to the end of the table. Identify yourself and be open to questions.
Speaker 170
55:27
Jimmy Harris, Arkansas Insurance Department. Deputy Commissioner for Market Regulation. To answer your question, yes, there are professional liability policies for contractors that are filed and approved at the department right now. Okay. All
Representative Jim Wooten
Unverified
55:38
right. So it would be available, just to ensure
Chair
Unverified
55:42
the cost. Okay. Thank you. Representative McGrew, you're recognizing your question. One question for you, because an
Representative Richard McGrew
Unverified
55:55
airs and admission for me is generally in paperwork or something that administrative business staff do, not necessarily in contracts.
So in contracting, does it cover the mechanical and physical work that they do? Would that cover this? And what would a charge amount be for
Speaker 175
56:16
an inspector? If I had to guess, I would say it's a few hundred dollars. I'm not positive on that because for commercial policies, they don't have to file rights in Arkansas. Rates are deregulated for commercial policies here. For this particular policy, though, there are at least 10, I think,
Speaker 176
56:37
because I looked whenever he reached out to me earlier. So it would cover rebuilding the foundation or some major
Speaker 175
56:49
cost on the house? It would cover errors made by the inspector. There's going to be limits. I am unsure if it would cover to rebuild a foundation, you know, that's going to be handled on a case-by-case basis by the insurance company, you know, depending on what error
Representative Richard McGrew
Unverified
57:12
was made. And I would say I'm for what you're trying to do. I'm in that
industry a lot. I see a lot of home inspectors that really don't know what they're doing. I recommend you get you an electrician and a plumber and a builder that really knows rather than a home inspector, not to badmouth them because there's really some good ones out there. But we also, whether this goes through or not, maybe looking at the way that they're certified, that we make sure they're really knowledgeable before they get there
because you are addressing a problem that's real. Thank you.
All right. Any other questions from committee? I'll wait. Okay. Seeing none.
Chair
Unverified
57:55
Oh, Representative Luton, you're recognized for
Representative Jim Wooten
Unverified
57:58
your question. This is of the chair. Who performed the fiscal impact? Was it BLR staff or DFA, or
Speaker 178
58:06
who performed the fiscal impact? I want to say it was Arkansas Insurance.
Speaker 179
58:15
Yes, the insurance department. Yeah, it was, it
Representative Jim Wooten
Unverified
58:20
looks like, BLR. BLR? At the bottom, prepared by BLR. Do you know if they looked at the insurance rates relative to the increase in cost for error and omissions? Because, you know, it has no cost, but if it's a change from the insurance industry, wouldn't there be an increased cost? That's the point, but it's going to be a cost to the consumer.
To the person who's doing the job, not to the... Well, yeah, well, the person will. That's the consumer, right. Right. So there will be an increased cost, more than likely. Is that correct? There's the
Speaker 184
59:02
potential for it to be a cost. All right. That's what I wanted to be clear. Thank you. Thank you, Representative Wooden.
Speaker 185
59:08
Any other questions from the committee? All right. Anyone here to speak for this bill?
Representative R. Scott Richardson
Unverified
59:17
Anyone here to speak against this bill? Representative Barnett, you're recognized close
Representative Lincoln Barnett
Unverified
59:23
for your bill. Okay. Again, I thank you all for your questions. I know that there are concerns about whether or not this will be an additional cost to home inspectors, but I think when we're put into the task of protecting consumers, I think if there is any additional cost and that it will save someone that has had a bad home inspection and they'll be able to be compensated when errors do occur, I think that's worthwhile.
And I think it's important that our consumers are protected, especially when they are engaging in one of the most important aspects of their life, buying a home. And so if an error occurs, we should be able, as the General Assembly, and that was the intent when the law was first put into action, was to protect consumers. And I think this would be a step further in making
that a reality. All right. And Representative Richardson, you're recognized.
Motion to pass. All right. That is a proper motion. Any discussion on the motion? Seeing none, all those in
Representative R. Scott Richardson
Unverified
1:00:29
favor say aye. Aye. All opposed say no. Congratulations, Representative Barnett. You have passed your bill.
Thank you. Representative Beatty, you've been very patient. We appreciate that. I believe you have a Senate bill that you say is going
Representative Howard M. Beaty, Jr.
Unverified
1:00:51
to move fairly quickly. Thank you, Mr. Chair, members of the committee, Representative Howard Beatty, District 95.
Y'all are just saving me from state agencies and listening to Senator King, so I'd very well sit here and patiently wait. Tell us the bill number. I'm sorry. It is
Senate Bill 420. And with your permission, I'll ask Secretary of Ag Westward to join me at the table. On Senate Bill 420, I get to the right page here, is to expand the eligibility for water development state programs, amend the act, and the use of construction assistance money.
Since January of 2021, the Arkansas Department of Ag has approved 477 water and wastewater projects totaling $2.5 billion in all 75 counties throughout the state. The current estimates right now for water and wastewater needs throughout the state over the next 20 years is about $13 billion. What 420 seeks to do is expand the definition of a qualified corporation and allow more conversions to a public water authority. It seeks to expand the financial assistance eligibility to private
entities for state water and wastewater programs consistent with federal water and wastewater programs. The expanded eligibility does not guarantee funding. Basically, this bill overall just aims to streamline the process for nonprofits involved in water distribution into those water authorities, enabling them to access funding more efficiently and support the development of water infrastructure for the benefit of the public
and various users in their areas. And with that, I'm closed to entertain any questions.
Chair
Unverified
1:02:37
Questions from the committee? Representative Perry. Thank you, Mr. Chairman. Representative, so we spoke about this a little bit.
Representative Mark Perry
Unverified
1:02:48
Are there some water or wastewater facilities in a particular area that we're trying to help on that?
Representative Howard M. Beaty, Jr.
Unverified
1:03:00
Well, I think right now under existing law, some of the private or non-private entities are excluded from seeking the loans under natural resources,
and this would expand and allow this primarily the one that comes to mind is Liberty in Pine Bluff right now. It
Representative Mark Perry
Unverified
1:03:22
would help that water district and that water system. And
is if, well, I'm trying to say out of word this. So is Liberty a nonprofit or? It's a for-profit. For-profit, okay. Yeah, my bad. If they have any kind of violations or complaints or issues with regulations,
does that disqualify them for qualifying for this? Representative, I'm not certain about the qualifications under the
Representative Howard M. Beaty, Jr.
Unverified
1:03:51
program as far as the grant program or the loan program, they would
have to meet all those qualifications. So if that would be an exclusion, they would be excluded. But just right now, they can't even apply. So it would allow them to apply for these resources. Okay. They still have to go through the process just like everyone else, and it's not guaranteed approval. Okay. All right. Thank you, Mr. Chairman.
Chair
Unverified
1:04:18
Any further questions? Representative Ladyman. Very nice.
Representative Jack Ladyman
Unverified
1:04:23
Thank you, Mr. Chair. So would this be like we're talking about like a POA out in the county that maybe is non-profit owned by the property owners? That's what we're talking about. All right,
Representative Richard McGrew
Unverified
1:04:37
thanks. Representative McGrew, you're recognized. Thank you, Chairman. Yes, this would affect Hot Springs Village, which is in my district, which has over 17,000. It would be one of the biggest cities if it was. They have to meet all the requirements municipalities have to have.
But this would help that community, and I support the bill, and the motion do pass at the proper
time. Okay. Any other questions? Okay. Seeing none. There's no one signed up. Is there anyone who would like to speak against this bill? Anyone else would like to
Representative Howard M. Beaty, Jr.
Unverified
1:05:09
speak for this bill? Representative Beatty, would you like to close? Mr. Chairman, I've closed.
I noticed the lights turned blue in the room a little bit there, so I'm feeling a lot better. and I appreciate a
motion and a good vote from the committee.
Speaker 63
1:05:22
Thank you all so much. That's it. We have a motion due pass on the floor. A motion due pass
has been made. All in favor say aye. Aye. Any opposed say no. Congratulations, you have passed your bill. Thank you, Mr. Chairman. Thank you, committee. Representative Gassaway, I believe you have a Senate
Representative Lee Johnson
Unverified
1:05:48
bill. I do. This is, I believe, SB 544.
Representative Jimmy Gazaway
Unverified
1:06:11
Mr. Chair, with your permission, may Mr. Benson join me at the
Speaker 5
1:06:16
table? Yes, go ahead and introduce yourself, sir, for the record, and you may proceed
Speaker 208
1:06:22
with your testimony. Thank you, Mr. Chair. Members of the committee, John Vinson, CEO of the
Representative Jimmy Gazaway
Unverified
1:06:29
Arkansas Pharmacists Association. I'm State Representative Jimmy Gassaway, District 31. Members, before you have Senate Bill 544, which is an act to amend the Arkansas Pharmacy Benefit Manager Licensure Act.
Essentially, what the bill does is it gives the insurance department more control and authority to take enforcement action against pharmacy benefit managers who violate existing Arkansas law. It includes the ability for the insurance department to place a pharmacy benefit manager on probation. It gives the insurance department the ability to assess a penalty of up to 12% for violation violations of existing laws, underpayment, and other various violations, or it gives
the insurance department the ability to craft some unique combination of probation or other types of enforcement actions against the pharmacy benefit managers, again, for their violations of Arkansas law. I don't think I have to tell this committee about the bad actors that pharmacy benefit managers have been, the bad actions that they've taken against our independent pharmacies, the way that they have steered patients to themselves, they've underpaid claims, they've done a number of things that have put our independent pharmacies in jeopardy.
I know many of you are well aware of this, and so this bill simply gives the insurance department more enforcement mechanisms, primarily is what it does. But, Mr. Chair, with your permission, I would ask that Mr. Benson be allowed to explain a little bit
Speaker 208
1:08:12
more in depth you may proceed mr benson thank you mr chair so senate bill 544 that just got an overview of has a few new definitions that are already in existing they're in existence in contract but it cleans up definitions for the insurance department
the one that's probably the newest is the term opt-out contract that is not in the current law or has not been clear, is a situation where a pharmacy or their contracting entity is in a contract with a PBM and there is a term condition provided to them that says that they are automatically renewed unless they opt out, which actually has some merit in terms of making sure patients don't lose access and it is supposed to simplify the administration
of continuing, but if there are decreases in reimbursement that are take it or leave it, the pharmacy needs to have time to be able to evaluate that, and not a short five- or ten-day window to make those decisions. So this gives them some time to make that decision and to make sure that that is communicated in a way that is not just a fax, that there are multiple attempts and that there's ability for the pharmacy to be able to review that information. The other part of the bill. Some of it is on the prohibited practices section. The opt-out contract defines
what is valid and what is not allowed, as I just explained. And then the part about giving the pharmacy the right to clarify and gather specific information and for the PBMs to follow existing state laws and bulletins. I know it seems ridiculous to have to say that in a new law, they have to follow laws but it clarifies what needs to be in the contract to ensure that they are following the law and not just a statement that says we will follow the laws they need to have terms and conditions that are arkansas specific in the contract and how they're going
to follow the law and this bill clarifies that the main part of the bill is the enforcement section the 12% interest that he explained, and then also the making sure in practice, this is already being implemented, but it's not clear in the statute that if there is an underpayment and there's a violation that's been determined, that the PBM can't just simply say, go back and make the patient pay that. The PBM would be responsible clearly in statute, and there wouldn't
be an argument over who was responsible for that underpayment. And with that, I'd be happy to
Representative Lee Johnson
Unverified
1:10:45
take any questions. Thank you for your testimony. Representative
Representative Les D. Eaves
Unverified
1:10:50
Eves, you're recognized for a question. Thank you, Mr. Chairman. Okay, is this a bill that
Speaker 208
1:10:56
came from the Pharmacy Association? Yes, we did work with Senator Mark Johnson and others, and it goes back to whenever we were having discussion again on Rule 128 about that they're one of the biggest issues with what is happening in the pharmacies is lack of enforcement or lack of proper tools for
enforcement. I know Senator Lee Johnson had a bill that came before this committee that was his idea to increase and provide the fees. But on this one, this was a combination of the Pharmacists Association and feedback from employees of the insurance department, feedback to us about what they were having
Speaker 207
1:11:29
trouble with. And we did help draft this with Senator Mark Johnson and Representative Gasway. I mean, you said something interesting. This
Representative Les D. Eaves
Unverified
1:11:35
seems like we're going to pass a law to make PBMs follow the other law that we passed? What makes us think they're going to
follow this law? And we've done everything we can for pharmacy at this point from banning pharmacies from owning, or PBMs from owning pharmacies. What more do we need to do to fix this problem? I mean, clearly PBMs seem to be not following current state law. Is this going to force them to follow state law now?
Speaker 208
1:12:06
What I would say is The insurance department's obviously not at the table, but a lot of the language in here is feedback that I got back from the enforcement side of the insurance department.
I know Booth ran, for example, on the interest piece of it. We asked him about that. That's consistent with other penalties that they have in the medical side of enforcement of the medical laws for the insurance companies. Isn't there a law in the
Representative Les D. Eaves
Unverified
1:12:31
books now that they should be enforcing when PBMs break the law? Yes, I agree with that.
Speaker 216
1:12:36
And they're not enforcing that now? I'm
Speaker 208
1:12:41
just sharing with you feedback that I've gotten from the Insurance Department of challenges and definitions
and challenges with enforcement, and we provided this feedback in this law. But thank you for questioning. Okay.
Representative Fred Allen
Unverified
1:12:58
Representative Allen, you're recognized. Thank you, Al. Thank you all for bringing this bill, but if you look at page 5, line 11, it says I pay 12% interest per month. If you do the calculation, that's 144% interest. Right, and we've asked,
Speaker 208
1:13:16
we did get that question on the Senate end about that being, is that usury?
Representative Jimmy Gazaway
Unverified
1:13:20
Do you want to comment on that? So it's my understanding from the, it's a good point, and it's a great question, from conversations with the insurance department that this is not considered usurious, that it is considered a penalty, and while it does use the word interest, it's paid 12% per interest per month as a penalty. And this is the same language that they use in other areas of the law related to medical providers. It's not considered usurious there, and it's the opinion of the insurance
department that it would not be considered usurious in this situation.
And it's not a loan. It's not a loan either, and that's the other big thing. Usury is prohibited in relation
Speaker 208
1:14:01
to loans. This is not a loan. And a lot of times the penalties or the underpayments, as you've heard during the Rule 128 discussion, might only be $1 or $10 or they're not a million-dollar hospitalization. And so there was discussion about whether should it be treble damages, should it be interest, how should it be, and we used consistent terminology with what they use in the medical representative Allen.
Representative Fred Allen
Unverified
1:14:26
Okay, is that 12% per violation per month or just 12% per month? It's 12% for
Speaker 208
1:14:34
the underpayment on the penalties per month. So if there's an underpayment to resolve the underpayment, if it was supposed to be paid at $15 and it was paid at $12, then it would be 12% interest per month on that underpayment. And you're supposed to file these complaints normally within a 30-day period to Representative Allen,
so that's another reason why it's per month, because you're supposed to file the complaints if they're underpayments within a 30-day time frame. So is
Representative Fred Allen
Unverified
1:15:10
that 12% on the difference or the total price? I believe it's on the way
Speaker 208
1:15:14
it's drafted, and it's on the underpayment. Not on the total price, but on the underpayment. Representative Dalby, do you
Representative Carol Dalby
Unverified
1:15:25
still have a question? I think Representative Allen asked mine, and I think reasonable minds can differ. It sure appears to be usurious to me, and I'd be curious because they keep saying,
oh, we charge this in medical claims. I'd like to hear from the insurance department because even on post-judgment interest is capped at 10%, and now we're sticking something in the law that I just, I don't know, But I agree with the line of questioning that Representative Allen, and the answers did not satisfy me, so I don't have a question. Is there anyone
Speaker 5
1:16:01
here from the insurance department who could come up
and speak to Representative Dalby's concerns?
Speaker 232
1:16:12
Well, they're mainly Representative Allen's concerns. Representative Allen's concerns. sir just introduce yourself and who you're with and proceed with your testimony please daniel
Representative Carol Dalby
Unverified
1:16:39
holland pbm general counsel at the arkansas insurance department i think my my question really centered around what representing allen was asking about this 12
percent, and then the statement made, oh, well, they're doing that for other violations with other groups, and I'd like to know what other groups, and how this doesn't become usurious, I think that certainly is going to give, well, it's going to get in litigation over it, quite frankly, I think. But, you know, when we cap interest at 10 percent for other things, and all of a sudden we're doing 12. I just want to know, is this the common practice? Are we charging other people
in other industries the same thing? And why?
Speaker 235
1:17:22
Yeah, my understanding is that that is a common practice in the medical health insurance
Speaker 237
1:17:28
industry. And we do agree that it would not be usurious because this is a penalty as opposed to interest on a loan or in a credit situation. So it does happen within the medical health insurance industry, but it has yet to happen with a PBM.
Representative Carol Dalby
Unverified
1:17:49
Can you tell me what the interest rates are and the other facets of the
Speaker 235
1:17:56
industry that you're referring to? I actually cannot. I'd be happy to gather that information and
Speaker 5
1:18:03
get it over to you. Thank you, Representative Dalby. Any
Representative Jack Ladyman
Unverified
1:18:08
further questions? Representative Leitman, you're recognized. Well, in order to try to understand what you're doing here, so this is quantifying a penalty, is that correct? You're using, somehow you have to quantify what the penalty is for a violation.
And are you using 12% of the violation to quantify the penalty? Is that what you're doing?
Speaker 237
1:18:34
Or am I off base here? That's my understanding is that it would be a
Representative Jack Ladyman
Unverified
1:18:40
12% interest on the violation itself. So if it's $15 and they sell it for $12, so it's $3, they lose. So it's only 12% of $3, which is not a very big penalty.
Yes, sir. Even for 12 months, that's not a very big penalty. Now, if it's a $1,000 drug and they're $100 under, right?
Chair
Unverified
1:19:06
Yes, sir, that's correct. But this is a method to quantify the penalties the way I look at
Representative Jim Wooten
Unverified
1:19:14
it. Is that correct? Yes, sir, that's correct. Thank you. Representative Boyden, you're recognized for a question. Mine's along the same line of Representative Lederman and to answer Representative Dobby.
It's used not as an interest rate, but it's used as a percentage of what the violation is. Yes, sir, that's correct. So, Representative Gassaway, you're an attorney. In language, can't we clarify relative to the penalty being a penalty and not an interest rate that we're charging for a loan, which you used?
Is that possible? I mean, is that permitted without it being called a user? Yes, and that's
a fair point. This is language that was ported over from another
Representative Jimmy Gazaway
Unverified
1:20:17
area that's used in another section related to other industries in the medical field, as I understand it. To be clear, though, it says 12% interest per month as a penalty.
And so that's in the bill. And so in other contexts, that's been interpreted as a penalty, not a loan. And if it's not a loan, it can't be considered usurious because it is a penalty and it's paid as a penalty. And as Representative Ladyman said, this is a way to figure the penalty as 12%. It would not be considered interest. So could it have been, I mean, in light of your questions, could it have been more clearly defined? Probably. Do I think that it would result in it being struck down or held invalid or not accessible?
Representative Jim Wooten
Unverified
1:21:09
No. But if we used a scale, that would completely do away with it. In other words, if it's $3 fine or $3 and 12% of $3, but if we had, say, under a $50 penalty for up to $10 or $20 or $150, my problem comes about I had one situation for one pharmacist
that revolved around, they dilly-dallied around the PBM and wouldn't pay it, and then they paid it, and then they made up the difference on the cost of the prescription. They paid that, but then also there had been a $500 penalty levied against them, and they fought against that. So my question is, would it be better to use a scaled than to use a percentage?
Representative Jimmy Gazaway
Unverified
1:22:15
Maybe so. I think you make a good point. What happened here is the Pharmacists Association talked with the insurance department about what type of enforcement mechanisms would be helpful to them. And this was the language that was given to the Pharmacists Association from the insurance department based on what they do in other contexts, which has not been interpreted as interest or usurious in other contexts. Now, to your point, might there be a better way to do it?
Maybe so. But we're late in the session, and I don't think we're going to be able to make a change. And if we want to give the insurance department the mechanism that they need to hold the PBMs accountable, because I don't think anyone here would likely disagree that they have not been bad actors, this is what they've requested, and this is what we're trying to give them.
Representative Jim Wooten
Unverified
1:23:08
Thank you, Mr. Chairman. I'll have a motion at the appropriate time. Thank you, Mr. Gadsworth.
Representative Les D. Eaves
Unverified
1:23:22
Representative Veves, you recognize for a question? This is for the Insurance Department. My understanding is that pharmacists
are now reporting violations to the Insurance Department in the thousands of instances where they're being underpaid by PBMs. And I'm not trying to put words in your mouth, but it seems like I'm not certain the insurance department can keep up with that amount of complaints now. How in the world are you going to keep up with the issues that will come up if we pass this bill?
Because you're going to have to keep up with not only what you're already trying to keep up with, but also calculating accrued interest on these PBMs as they're underpaying pharmacists. And this is going to, if they continue to do it month after month after month, I mean, do you have a process or systems in place that would be able to send out statements of what they owe, you know, to every pharmacist that they're underpaying? I mean, I understand the point of the bill and certainly want to do what we can to help pharmacists, and we've done a lot.
But how are you guys going to do
Speaker 233
1:24:31
that? I mean, help me understand. Yeah, great question. Happy to answer. So, you know, historically
Speaker 237
1:24:36
it has been difficult to keep up with the number of complaints that came in. They do number in the thousands or they have in the past. The insurance department has ramped up staffing in the PBM division. I'm an example of that. I was hired recently to do exactly what you're talking about. We're also in the process right now of hiring two other PBM coordinators or analysts to help us with that.
We've got penalty structures that we're setting up to where we will actually penalize PBMs for each of these violations. So I don't foresee a huge problem with adding interest to those penalties for the violations. I think it will all be a long time together. Are they paying now? I mean,
Representative Les D. Eaves
Unverified
1:25:22
they're not following current law. Is there a penalty currently when they underpay? Yes,
Speaker 233
1:25:30
right now we have authority to penalize them up to $5,000.
Speaker 237
1:25:34
Are they paying it? When they've been asked to pay it or told to pay it, yes, they are. Mr. Harris,
would you like to come to the table? If you want to hear more about the insurance, I can. I think you might as well just come to the table and
Representative Fred Allen
Unverified
1:25:58
see if anyone has questions, they'll ask on that. That's come up. Representative Allen. Thank you, Mr. Chairman. Wouldn't you agree that if the PBMs would stop breaking the law,
they would not have to worry about the 12%? I would 100% agree with that. Okay. So I support
Speaker 5
1:26:17
what you're trying to do. Thank you, Representative Allen. Further questions? Any further questions from
the committee? Okay. Thank you. Thank you for your testimony, gentlemen. We do not have anyone signed up to speak against, but is there anyone in the audience who would like to speak against this bill? Anyone else would like to speak for this bill? Representative Gadsworth, do you like to close?
Representative Mark Perry
Unverified
1:26:39
Thank you, Mr. Chairman. I'm closed for the bill and would appreciate a
good vote. Thank you. Okay. Representative, we've had numerous people ask. I think you were first. Representative Wooten, you were recognized. I'll make a motion
Speaker 5
1:26:51
do pass. We have a motion do pass. That's a proper motion. Any discussion on the motion? Seeing none, all in favor say aye. Aye. Any opposed, say no. No. Congratulations, you have passed your bill. Thank you, Mr. Chair. Thank
Speaker 227
1:27:04
you, committee. Thank you, Representative Gazeway. Senator Dismang, I believe you have a couple of bills you'd like to proceed with.
Representative R. Scott Richardson
Unverified
1:27:23
If you would, just introduce yourself for the record and which bill you would like to proceed with first. Senator Jonathan Dismang, District 18, Senate
Senator Jonathan Dismang
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1:27:31
Bill 475. Thank you. Members, yep, go ahead. Okay, members,
Speaker 94
1:27:53
are we ready to hear Senate Bill 475?
Senator Jonathan Dismang
Unverified
1:27:57
You may proceed. All right. Thank you, members. This really came to my attention back when we were having the debate over Rule 128 over the summer. That was a very robust debate that we had in council about what to do there. And one of the things I found about it, and maybe you all aren't familiar with either, are these entities called PSAOs, or Pharmacy Service Administrative Organizations. And the way that these entities work, these are the actual entities that help create the contracts for independent pharmacists, so it's the contract between the PBM and the pharmacist.
And what we heard in that Rule 128 debate was that they were not following through and helping enforce those contracts. In fact, they're reporting all of that burden on the insurance department. And so I followed up even with some of my local pharmacists and had conversations about the PSAOs that they are working with. And in fact, what was happening at their level is they no longer even try to work with the PSOs on trying to make sure they're getting paid enough because they're just dead-end roads. They're not helping. They're paying their fees. They're helping create their contracts. But these entities aren't helping the pharmacists follow through in enforcing the contracts with the BBMs.
And so they consulted with the insurance department. And so what this bill is is a licensing and registration bill for PSAOs in the state. It's one of the first times we've created a more robust definition for what a PSAO is. And with that, I'd be happy to take any questions. Thank you for your testimony. Any questions
Speaker 76
1:29:22
about the committee? Okay, seeing none. There's no one signed up, but
does anyone like to speak against this bill?
Representative R. Scott Richardson
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1:29:35
Anyone else who would like to speak for this bill? Excuse me. Senator Disman, would you like to close with your bill? Once upon a time, two years. That's all I wanted. Yes. No, I'm closed. Thank you. Senator Dismanian has
closed for his bill. We have a motion due passed by Representative Dalby. All in favor, say aye. Aye. Any opposed, say no. Congratulations, Senator. You have passed your bill. Thank
Senator Jonathan Dismang
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1:30:01
you. I have one more at the end, and I don't remember what the number was,
but I can tell you what it does. I believe it's 610. All right. Senate Bill 610, there was an engrossing and drafting error that BLR brought to us in Senate Bill 307. That was the job creations bill. Again, it's just technical screening up brought to us straight from BLR. Thank you. Any questions from the committee? None. There's no
one signed up, but anyone might speak against this bill? Anyone else for this bill? Are you closed for your bill? I'm closed.
Representative Eves? We have a motion to do pass. All in favor, say aye. Aye. Any opposed? Thank you, Mr. Chairman. We'll pass your bill. Thank you, Senator. Hey, Michelle. Is there an amendment?
Senator Dees. Okay. Representative Wooldridge. And do note, I did ask Senator Dees. I know he's been waiting patiently, but I did ask. Representative Wooldridge, would you please tell us
Speaker 259
1:31:31
the bill that you're going to run? Thank you, Mr. Chair. Senate Bill 602, Jeremy Wooldridge, State Representative, District 1.
Excuse me. You may proceed. Thank you, Mr. Chair, and thank you, committee. Senate Bill 602 does,
Representative Jeremy Wooldridge
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1:31:44
or the intention is to do exactly what it says in the title, and that's prohibit insurance companies and appraisers for acquiring an insured to use certain facilities to repair glass damage for vehicle safety. And basically what that's done and what we're trying to accomplish, and I'd be happy for the insurance department to come up and help to clarify some of the language in this bill. I met with them prior to the meeting. I don't think there's anything in the language that they're concerned about.
There was some people that had reached out to me saying this had something to do with deductibles. That's not accurate. This talks about deductibles being charged by a person that's fixing a window or glass, but not by an insurance company for deductibles. But in essence, it just says in here that you can use anybody you want to fix your glass, that they can't steer you towards a specific person or a contractor to do that. With that, I'd be happy to answer any questions. Thank you. Questions by the committee?
Representative Carol Dalby
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1:32:43
Representative Dalby, you're recognized. Thank you. Representative, on page 2, somebody pointed this out to me, and so I just want to see what you're taking. It says we're putting penalties under the Deceptive Trade Practices Act. Page 2, line 31, and making them subject to that. But the insurance companies fall under the insurance department.
So are we not having conflicting provisions as to what controls in this situation? And can you tell me how that's going to work? So if you have the insurance department, but now we're tacking on these treble damages through the Deceptic Trade Practice, it just seems like the two are not, don't work together. Could you address that? I understand that, and
Representative Jeremy Wooldridge
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1:33:39
I appreciate that question, Representative. Could I ask the insurance department to come up and clarify that?
Yes, please come up, introduce yourself and who you're with, and if you
Speaker 175
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would, answer Representative Dalby's question. Jimmy Harris, Arkansas Insurance Department. Section E says, in addition to penalties available under the Trade Practices Act, and, you know, we would look at that and stop. That encompasses every penalty we have. I know there's the two under it, deceptive trade practices. I assume that would be if somebody was going to go after the glass company.
But the TRIP practices, yes, that would be plenty for
Representative Carol Dalby
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1:34:31
us. So the insurance department, if I understood, if that's plenty for y'all, so y'all are going to abrogate your responsibility to some other act. Is that
Speaker 265
1:34:44
what you're wanting to do? To be clear, this isn't our
Speaker 175
1:34:49
bill. But the fact that there are penalties available on the TRIP practices act here, that would allow us to enforce the bill.
Representative Jim Wooten
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1:34:59
Okay, thank you. Thank you,
Representative Dalby. Representative Wooten, you're recognized. I've had some questions raised about the compel speech used in the act, or in the bill. Can you share, do you think the court review would be forthcoming on this rule? I'm sorry.
I'm not sure I understand the question, Representative.
Well, it has to do with compelled speech as ruled and held by some courts relative to the scrutiny of this bill. And it comes forward as perhaps it might lead to lawsuits. Are we in a defendable position with this legislation should we have to go to
Speaker 175
1:35:59
court? The requirements put on an insurer in this bill,
I would have a problem if an insurer was requiring an insurer to use a certain glass company already. They already are prohibited from requiring an insured to go to a certain glass repair shop. So if your question is can we enforce that, I would say yes. We can say an insurance company cannot send their insured to a certain.
Representative Jim Wooten
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1:36:40
Okay, well, you didn't answer my question. I'm sorry. Well, you came close, but what I'm saying, would we be in a defendable position? I'm not saying we would win, but do you think we could defend what we're getting ready to vote on here in the event should a lawsuit be
Speaker 175
1:37:05
filed? Thank goodness I'm an insurance man, not an attorney. But yes, I would think that we could defend that.
that we could defend the act of saying you cannot steer your insurance to a certain repair
Representative Jim Wooten
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1:37:27
facility. Am I there? Well, you're close. I mean, you hesitate. It's what worries. It's what brings consternation to me is the fact that you hesitate. I appreciate your position, But really, we need to be careful.
And I know that any rule, any law can be declared unconstitutional, but only by one person, and that's a judge. But should that occur, and should they find it stands on its own, can we defend it from our position? Can we be defensive? I mean, can we not necessarily win? I realize the limitation of the court, but would it be defendable, this rule?
Speaker 259
1:38:18
If you're wanting the opinion of an insurance agent and
Speaker 175
1:38:24
a social worker, we think so. And if you want an opinion from an attorney, I'll have to get someone else up here. But reading this, I believe this bill reinforces expectations that are already in place.
Chair
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1:38:38
Thank you, Representative Wooden. Thank you. Representative Perry, I believe you're next. Thank you,
Representative Mark Perry
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1:38:47
Mr. Chairman. So Representative Woodridge, I'm trying to understand this.
So I know insurance companies have preferred vendors. This basically will take the preferred vendor out of the glass claim. So you have a glass claim, and whenever you call your agent or you turn in the claim on your phone or however, they can't say, hey, if you want to go to this place, their preferred vendor you basically have to give them multiple choices or Yeah, they can still have a preferred vendor,
Chair
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1:39:19
they just have to give an alternate choice
to the consumer In addition to the preferred vendor? Correct Okay Alright, thank you. Rep.
Representative Carol Dalby
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1:39:39
Weinstrom Thank you. Representative Dalby? Just real quick.
On line 28, page 1, it says, well, motor vehicle safety glass repair practices. And the definition is, it looks like we're changing the definition or at least adding a definition.
It says motor glass safety glass means glass for which a deductible shall not be applied under the section when being repaired or replaced. So now, are we requiring all insurance policies? Because it says no deductibles. So now, are we going to require that all insurance policies have this and no deductible applies? Because it seems like if that's what we're going to require, then I no longer have to pay that extra $100 I pay for my windshield replacement insurance.
Now it's just all going to be covered. At least that's what it
Representative Jeremy Wooldridge
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1:40:29
appears that you're saying. Is that correct? No, ma'am. If you want to run a bill to do away with deductibles, you've got my full support, but this doesn't do that. This is the deductible for the person that's repairing the glass, so if that person chooses to not collect, then that's what that's addressing, or that's my understanding, not the insurance company.
Representative Lee Johnson
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1:40:57
Are you satisfied, person? Any further? Reps. Tom, we recognize for a question. Thank
you, Mr. Chair. Back to, you know, Representative Wooten's concerns about the compelled speech, you know, the language in here, you know, in quotations, you
Representative R. Scott Richardson
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1:41:12
have the right to choose a glass shop or the damage to your motor vehicle, blah, blah, blah. Can you give
me the line that you're discussing? Yes, 15 and 16, page 2. Why do we feel that that language
Representative R. Scott Richardson
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1:41:27
is necessary in there when it is already ill?
Well, we're not supposed to be steering people to body shops, glass shops. My understanding is we're just trying to clarify
Representative Jeremy Wooldridge
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1:41:36
what the common practice has been, and that's why it's in there. Well, I mean, I
Representative R. Scott Richardson
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1:41:43
still, I mean, my concern would be, I think that's the compelled speech part, is we're going to be putting words into people's mouths, potentially, that they have to follow that script, and that could potentially be a challenge that Wooten alluded to earlier. I understand.
Thank you, Reverend Stommel. Further questions from the committee? Okay, seeing none. So there is no one signed up, but is there anyone in the audience who would like to speak against this bill? Anyone else would like to speak for this bill? Representative Wooldridge, you are recognized to close. Mr. Chairman, I'm
Chair
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1:42:26
closed, and I'd appreciate a good motion. Thank you for your testimony.
Speaker 63
1:42:34
What is the will of the committee? Okay, we have a motion due passed by Representative McCollum. Any discussion on the motion?
All in favor, say aye. Aye. Any opposed, say no. No. Your bill
Speaker 5
1:42:52
has failed, Representative Wooldrich. Thank you for your testimony. Thank you, Mr. Chairman.
Representative Lee Johnson
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1:43:01
Thank you, committee. Thank you. Senator Deese, thank you for your patience. If you go to the end of the table, I believe you have SB 611.
Speaker 5
1:43:09
Just introduce yourself for the record, and you may proceed, sir. I apologize. There is an amendment, members, that
will be circulated by staff. If you would like, sir, go ahead
Speaker 276
1:43:24
and explain the amendment first. Yes, sir. Thank you, Mr. Chair. Thank you, members.
Senator Tyler Dees
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1:43:28
State Senator Tyler Deese, District 35. There's an amendment being passed out, and I'll describe that amendment, and then we can talk about the bill if it adopted. So the amendment does a couple things. We had a cleanup for my good friend, Senator Tucker,
as the esteemed lawyer has helped us review this bill to do what it actually intended to do. I appreciate Senator Murdoch as well with his feedback and support to get the bill here. But really what the amendment does is takes out the addictive algorithm, addictive feed section. I actually want it still to be in there, but that portion is being held up in federal court with some other states. So we felt it would be wise to remove that from our bill. It also has a majority of this amendment, when you take out a section, is just cleaning up numbers in the order that they should be throughout the side.
but it also adds some amendments requested by some of these social media companies, such as personally identifiable information. And on the last page, you'll see where we just had an update to the notifications side, and I'm happy to describe those more clear if needed, but I would appreciate the ability to adopt that motion. We have a motion to adopt the amendment by Reps
of Eubanks. All in favor say aye. Aye. You may proceed with the bill as amended.
Speaker 94
1:44:44
Thank you, members. So if you'll remember two years ago or so, the last
Senator Tyler Dees
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1:44:48
session when we brought this bill, Arkansas was the first state to launch a Social Media Safety Act introduction. And so when leaders go first, like this body has done, I'm very proud of the work we did. But there's some things that got held up in court, some things we learned. Other states followed behind us. Dozens of states have now passed social media and tech bills to protect children. But all the states have continued to learn from each other for the right language.
And what this does is takes all the learnings that have been happening across the country and amends our Social Media Safety Act. And so you'll see that we've removed language that has been held up in some federal courts to try to make that streamlined, while also still with the mission to protect children online. And so, for example, on page 7, you'll see where we have struck the addictive algorithm section, as I mentioned before in the amendment. But you will see that our heart is to continue protecting kids through notifications.
We've got kids that are being staying up all night that are continuing to be hound with dings and notifications throughout their day. So this, even with the amendment, adds some ability for notifications to be shut off from 10 to 6 so they can sleep at night. imagine that. That'd be wonderful. And it talks about the age of 16 and under. But I can go on further, but really that's still the intent and the heart. The AG's office has been involved to make sure that the language is well. But really the ability to protect our children online is still
the ultimate focus. Happy to answer any questions. Thank you, Senator.
Representative Lee Johnson
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1:46:33
Questions from the committee? Okay, no questions. There is no one who has signed up to speak for or against this bill, but I'm going to ask if there's anyone
out there who would like to speak against the bill. Okay. Anyone else who would like to
Representative Lee Johnson
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1:46:48
speak for the bill? If not, then Senator Deese, you are recognized to close for your bill. Thank you, Chairman Maddox.
Senator Tyler Dees
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1:46:53
Members, we've worked hard on this for the last three years, I'd say, and it's a continual effort that we'll constantly be making sure that we're keeping front and foremost the protection of children online. We have listened to industry on this. We want to be reasonable whenever we can be and still want to try to make sure that we're working well with the right policy and the right language. And I think we can be proud of those efforts that we are ensuring that parents are more involved, that children are safer, and I believe we're heading in the right direction with this bill.
We'd appreciate a due pass. Thank you for your testimony, sir. We have a motion to pass as amended by Representative Eubanks. All in favor, say aye. Aye. Any opposed, say no. Congratulations, Senator. You've passed your bill. Thank you, members. Appreciate
Speaker 5
1:47:54
it. Members, we've worked through a lot of bills, but I do not want to cease the meeting yet.
Representative Lee Johnson
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1:47:57
Is there anyone else who would like to present a bill in insurance and commerce at this time? House, Senate.
Oh, yeah, Brent Hall. Where is it? Oh, I apologize. I did not see Representative Hall. I did not see it. I apologize. Just come to the end of the table, sir. This is Senate Bill 437, I believe, and there is an amendment which is being circulated by staff.
Representative Lee Johnson
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1:48:27
Members, we will be hearing 1177 by Representative Brown this afternoon. That was moved to this afternoon to
accommodate witnesses who are traveling. There are also a couple other bills I believe we're going to have to hear this afternoon. They're going to have some witnesses. So, yes, we will convene 15 minutes after we adjourn.
Thank you so much. Sir, gentlemen, if you would, just introduce yourselves for the record, and you may proceed with your testimony. Brad Hall, State Representative,
Speaker 285
1:49:16
District 24. James Eaton, State Representative, District 26. The bill we're bringing to you today
Representative Brad Hall
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1:49:22
is Senate Bill 437. It deals with wind energy. across the state. First, I'd like to say I'm not a regulations guy,
but the sheer size of these structures warranty it alone. I apologize. You've got to make a motion for that.
I apologize. Is there a motion to adopt? We have a motion to adopt the amendment. Motion to adopt the amendment. All in favor, say aye. Aye. Thanks, sir. Proceed
Representative Brad Hall
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1:49:52
with your bill as amended. Thank you. As it stands, these can be built anywhere and under any conditions. We all want regulations on our airplanes, buildings, cars, et cetera. The oil and gas industry, as well as electric companies, are all regulated.
This is not a statewide moratorium. And like I said, I repeat, this is not a statewide moratorium. This is only regulation that is in place in other states, such as Texas and Oklahoma. And the windmill industry is still thriving there. We are only one of two states whom are not regulated currently. I think if I was going to add anything
Representative James Eaton
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1:50:33
to that, it would be when I was a court member a couple of years ago,
the local, the county next to us came and said, would you put a moratorium in and help us with our county? And I said, that's a county, that should be a county regulation. But the county didn't do anything. And so now the counties have came to me as a representative and asked me to help get some legislation in place to help stop this. I am a local control guy, but what's happening currently, as Representative Hollis said, we're one of two states. So we're being inundated, and it's typically small rural counties that's being inundated with the wind turbines.
So that's what encouraged me to get on board with
Chair
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1:51:18
this legislation. Thank you. Questions from the committee? Representative Bladieman, you're
Representative Jack Ladyman
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1:51:25
recognized. Thank you, Mr. Chairman. I've got a question on page two there, line five through eight, where it says the construction, location, operation of wind energy facilities can have significant potential impacts on the health, safety, and welfare of members of the community.
Representative Brad Hall
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1:51:43
Do you have any data to back that up? I'm sorry, Representative. Mr. Chairman, could we have our expert come up
Speaker 64
1:51:53
here and speak? Yes, just have them come to the table and introduce yourselves. If you can specifically answer that question, that would be
Julie Morton
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1:52:13
fine. My name is Julie Morton, and I don't claim to be an expert,
Speaker 295
1:52:17
but I have done quite a bit of research. And I'm sorry,
Representative Jack Ladyman
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1:52:24
but I could not understand the question. I'm a little hard of hearing. My question was, what are
Speaker 295
1:52:35
the health effects and the safety effects and the welfare effects? Do you have data to back up that statement? Well, the health effects are noise-related, shadow flicker-related. The ongoing effects of vibration that these turbines cause and also just the safety effects of these things actually fail and they catch on fire.
And those shards of fiberglass from these turbines can spread, according to the National Institute of Health, up to a mile. So you've also got the effect of the fiberglass on the human body and on cropland. There are farmers that have had this happen that have completely lost the use of their land. And they don't even know for how long.
Representative Jack Ladyman
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1:53:37
Does that answer your question? I'm not aware. What state and where did these happen where it affected
the land? Have you got a specific incident for
Speaker 295
1:54:10
that? Yes, sir, I do. Here's an article from Mechanicsville, Iowa.
A farm in Mechanicsville must clean up its third wind turbine fire in less than a year and a half. Lightning caused the strikes to all three. Now the farm's owners are trying to figure out what's next. A Cedar County ordinance requires wind turbines that aren't producing energy must be taken down within the year. While the turbines owners have to take care of that, the damage left behind is the responsibility of the landowner.
Let me try to skip to something that would more answer your question. I don't really know how you ever clean it up. This is the farmer speaking, especially since the longer you wait, the harder it is to clean up. And since there's so much still here, I don't know what we're going to do with it. Freeman is now dealing with her third turbine fire, and she has learned from experience that cleanup takes forever.
Representative Jack Ladyman
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1:55:23
I might have more questions later. Thank
Speaker 97
1:55:31
you. Thank you. Thank you, Representative Leidyman. Representative McGlory, I believe you're
Representative Richard McGrew
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1:55:37
next for a question. Yes. I understand the cleanup. I'd also say is the owner of the windmill not responsible for the cleanup to the fire, to the property owner? So the property owner could go after the wind company to force them to do the cleanup.
Speaker 295
1:55:55
That would take litigation. If the company is not willing to do it under their easement, then it would take litigation. And there you get into whether an individual landowner can find a billion-dollar foreign corporation. And as it stands right now, there's no
Representative Brad Hall
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1:56:10
regulations in Arkansas, so they're not. Yeah,
Speaker 207
1:56:15
they'd still be held responsible for any
Representative Richard McGrew
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1:56:18
negligence on their part or all that. But my bigger question might be on page 10. You're limiting the things to be – you're limiting so much, it almost seems like there's no place to put them.
It can't be within a mile of a school, a hospital, a nursing home, a church, a city limit, a park, an airport. And then if you go down a little further, it says there's an environmental impact assessment required that covers almost everything in the world. So it seems like you're essentially limiting that they can't be done here. That's my concern. And they are building these in, was it northeast Arkansas
Speaker 295
1:56:58
now? There's one under construction in northeast Arkansas now, yes.
And like I said, we chose, let me explain how the basis of the bill was made, and perhaps that would help you understand. I actually sat and read 48 states' regulations for three months, and it was informative but very boring. But we then took what we felt would be palatable and applicable to Arkansas. So these are regulations that we have found worked for other states,
and also that particular one, the National Institute of Health issue that I mentioned, in that they say that when these things fail or catch on fire, that fiberglass can spread for up to a mile. Well, we don't want your children to be exposed to that type of danger, nor your father in the hospital, nor your mother in the nursing home. So we feel that in order to ensure the safety of places where the public gathers,
that it's important that we give plenty of distance between what
Speaker 298
1:58:10
could be a disastrous situation. Do you have
Representative Richard McGrew
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1:58:14
any documentation or any proof where someone
Speaker 164
1:58:17
has been damaged by a piece of fiberglass, one of these?
Representative Brad Hall
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1:58:22
No, I do not. There's also ice. They also throw ice from blades in the
Representative James Eaton
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1:58:29
wintertime. Another issue that hadn't been brought up, these wind turbines are also 200 feet taller than the Simmons Bank building.
So they're very large machines. And if they were to have fire with that blade throw, I think that's the reason of the distance of a mile, is because of their advanced
height and the width of the blade. I think that's the
Speaker 295
1:58:59
logic there, Representative McGrew. The ones permitted through the FAA right now are all permitted to 681 feet to 698 feet tall. And then if you put them on a ridge, according to the FAA,
they will extend a half mile total into the
Representative Jim Wooten
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1:59:22
Representative Wooten, the right next. I'm a little confused, which is not unusual. I've made that statement before, but this amendment talks about the oil and gas commission and the lands. Are you trying to force the windmills out of a portion of the state
or put them in a portion of the state, or what are we after here? Just complete elimination? My concern is East Arkansas, where we have rice planted and we have crop dusters that have to fly in and out. So we don't need them. And personally, I don't see, you know, they only work when the wind's blowing.
Yes, sir. It's just like solar. They only work when the sun's shining. So, and they don't produce all that much energy. So let me be perfectly clear, I'm against them to start with. But I have concerns relative to the crop dusters being able to apply pesticides and fertilizer and other crop needs. So would this force them into, when you talk about hills,
and ridges, that's the northwest part of the state. Yes, sir. But the eastern part of the state is flat and level,
and the wind blows constantly over there. But how does this impact that? Well, this
Representative Brad Hall
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2:01:11
was amended so it would pertain to all the state and not just over 300-foot elevation. So this now pertains to the whole state. So this amendment takes care of that. Yeah,
Representative Jim Wooten
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2:01:23
yeah, it pertains to the whole state now.
The whole state. Yes, sir. Thank you. And
Representative James Eaton
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2:01:30
Representative Wooten, kind of to address that too, when I was talking about, I was just talking about the logic for the mile. If you're on a ridge top and it's 700 feet tall, it throws it a little farther, obviously. So that's. Representative
Representative Les D. Eaves
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2:01:51
Eves, I think you were next, actually. Thank you. How does this affect windmill projects that are currently under construction?
Speaker 295
2:01:58
Well, there are two that are under construction now. One is the crossover wind project in Cross County, and there is one in Carroll County, the Nimbus Scout Wind Project, and they are both going to be exempt from this bill because they have achieved what the bill describes as being under construction. Can you show me in the
Speaker 211
2:02:27
bill where they're exempt for being grandfathered in?
Speaker 314
2:02:31
Okay, thank you. I'll look for that if you want to take other questions. Pardon? I said I can look for that
Speaker 295
2:02:53
if you want to take other questions. It's kind of dangerous. Well, I said I could, but of course I don't have that marked down. Actually, the definition of construction is what would exempt them, and that's on page
Page 3, 3A, construct means the activity of clearing land, excavation, relocation of utilities, a wind energy facility expansion, or other action that would adversely affect the natural environment of the proposed site. So those both have met that criteria. All right.
Chair
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2:03:42
Let me jump back in and get some other questions. I'll come back in. Representative Ladyman, you are recognized for a question.
Representative Jack Ladyman
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2:03:49
Thank you, Mr. Chairman. Well, the first question, you all have at the end of the table. Have any of
Representative Brad Hall
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2:03:56
you all ever been on a wind farm? Yes, sir. You have? Yes, sir. My wife's family have
Representative Jack Ladyman
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2:04:02
them all around their farm. Yes, sir. So what is the noise level? You talked about noise being a problem. What's the noise level at the property land on a wind farm?
Representative Brad Hall
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2:04:12
I didn't take a reader when I was there at the time.
Representative Jack Ladyman
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2:04:16
Well, I've worked on many wind farms. I've actually responded to towers that burn out in Uruguay and in South Texas. And also one that the hub came off and flew, burned, but flew off. And, you know, there are EPA regulations, there are OSHA regulations on all these things that covers this. And I agree, we need a bill to regulate wind farms.
But this bill, I mean, you don't have the data here to prove some of your points in this bill. You don't know what the noise level is. You
Speaker 295
2:04:59
don't know whether that's a hazard. Well, the noise level that we've included in the bill, we got from the Department of Energy. But what
Representative Jack Ladyman
Unverified
2:05:12
is the noise level? 35 to 45 decibels. 35 to 45 decibels. Yes, sir. Do you know that the noise level in this room is probably
Speaker 295
2:05:18
55 decibels? Yes, sir, I'm aware of that, and I understand that the noise level is not great,
but I also understand that there needs to be some designation of what the parameters on the noise level is. Yeah. Well,
Representative R. Scott Richardson
Unverified
2:05:35
thank you. Representative Richardson. Thank you. Thank you, Mr. Chair. So my
only question is this. amendment that you guys have brought down here, is this the same amendment that was prescribed, that was offered in the Senate end? And what's the difference if it's not? The amendment on the Senate
Representative Brad Hall
Unverified
2:05:56
end, they wanted to do an elevation of 300 feet or more, and if you was under the sea level of 300 feet, then you did not have any regulations at all,
which is what Mr. Wooten was talking about. Okay. And I just didn't, We just didn't feel that was fair to the other people in the state of Arkansas. Okay, so what passed out of
Representative R. Scott Richardson
Unverified
2:06:18
there, this change is what actually passed out of the Senate then, right? Yes, sir. Okay, thank you.
Speaker 258
2:06:29
Representative Eaves, are you back in the queue?
Representative Les D. Eaves
Unverified
2:06:34
I've just got a bunch of questions, but we've got another meeting at 12. We may have to come back. I'm looking at page 20, line 28, and I'm trying to reconcile what I'm reading in the bill versus what you have in the amendment. But it says the wind energy facility project is exempt from this subchapter, basically, if the project is under development as of the effective date. So is under development the same as under construction?
Julie Morton
Unverified
2:07:05
Is that a question for me?
Representative Les D. Eaves
Unverified
2:07:09
Anybody? Okay. I'm just trying
Speaker 295
2:07:11
to understand the whole thing. Yes, I understand. It's pretty complex. I would consider that underdevelopment would be the same as under construction. Underdevelopment is not fully defined in the bill, but under construction is. So I am considering that underdevelopment means under construction.
Representative Les D. Eaves
Unverified
2:07:37
So are you saying that under construction is defined in the bill? Yes, sir. But under development
is not? That's right. Okay. Why did we use under development then in this case instead of under construction? I had no input into that language on the amendment. I understand. Okay. Yes.
Speaker 295
2:07:48
I'm not trying to be difficult. I'm just trying to understand what we're doing here. I know. I know you're not.
Representative Les D. Eaves
Unverified
2:07:53
Further questions from the committee? Secretary. Mm-hmm. Thank you for the
Speaker 5
2:08:05
secretary. No further questions? Okay. Thank you for your testimony.
I believe we do have someone signed up to speak against the bill. Yes, sir. If you would go to the end of the table, and you can introduce yourself. Members, housekeeping matter. There are, it appears there are going to be numerous witnesses in this, so this has gone longer than I thought. Some members have to get the rules, so we're not going to vote on this until everyone gets back, to be fair to everyone.
So we're going to continue, but we're not going to vote until after session. Sir, if you would come
Speaker 326
2:08:55
to the end of the table. Mr. Chairman, committee, I'm Bill Paschal. I'm here representing Cordelia Power. My client is the one that has built 22 wind turbines in Cross County. In Senator Hallwell's district, we've invested over $250 million in the project,
and we have a second phase coming that will be in excess of that. And I'll be really simple today. I'm going to ask you to vote no on this bill because this is a surprise amendment. We haven't seen it. It just got handed out. There was a tough compromise on the Senate side. We brought everybody to the table to try to find a bill that folks could live with. And this guts that compromise. And it's a last-minute surprise. We've just seen it.
So I will implore you to vote against the bill as amended because it goes 180 from what was agreed to on the Senate side by all the parties. Thank you for
Chair
Unverified
2:09:58
your testimony. Questions? Would you be willing to take questions if there are any?
I'm no expert, but I do know legislative protocol. Questions from the committee? Okay, seeing none. Thank you. Oh, I'm sorry.
Thank you, sir. There's no one else signed up? I'm sorry. All right, are you against? Yes, sir. Okay, let me call for us first. Is there anyone else who would like to speak for the bill? Okay. Sir, you may go to the end of the table, introduce yourself, who you're with, and provide your testimony.
Senator Justin Boyd
Unverified
2:10:47
Hello, Chairman and members of
Simon Mahan
Unverified
2:10:49
the committee. My name is Simon Mahan. I'm the Executive Director of the Southern Renewable Energy Association. We are a trade association of large-scale renewable development companies, including wind energy developers. My family and I, we live here in Little Rock. I'm here today to strongly oppose Senate Bill 437. As mentioned previously by Mr. Pascal, the amendment that was passed moments ago strips out protections for projects that are under development.
That's on page 20 of the legislation. That was, or 21 of the legislation. Let's see. That would protect projects that are currently under development. The legislation itself was borrowed very heavily from legislation that was passed in Tennessee in 2018. I was there in 2018 in Tennessee in Nashville regarding this legislation.
And the regulations involved in this bill were designed specifically to ban wind energy in Tennessee. Since then, no wind farms have been built in Tennessee over the past five years. Meanwhile, nearby states like Oklahoma and Texas receive more than 40% of their power from wind farms. So any of the really significant negative impacts from wind energy, we would have already seen them, but we don't. Instead, states like Oklahoma have some of the lowest electric rates in the country, thanks to wind energy.
As mentioned, we have a number of wind energy projects that are underway here in Arkansas. The newer technology is enabling these turbines to show up. Each individual wind project can bring somewhere between $200 million and $300 million in local investment. That's in addition to the lease payments for the local landowners. As mentioned previously, the counties here in Arkansas are able to make their own rules with regards to what gets built or what does not get built.
This bill does not give those counties any additional benefit other than what they already have. Throughout the bill, there are a number of extreme regulations that effectively eliminate the ability to build wind energy projects throughout the state. It was mentioned earlier there's a limitation. You're not allowed to be within a mile of parks, churches, cities, airports, you name it. We have some literature to pass out here in a moment to show you there's basically nowhere left in the state that you could actually build.
As mentioned, there were exemptions on page 20 of the bill that was passed out of the Senate that would exempt wind energy projects that are under development as of effective date of this act. The amendment that was passed just moments ago strips that exemption out. During the Senate discussion there was concern that the bill retroactively penalizes already constructing wind projects and they would have to comply with many of the regulations and that's part of the
reason that that amendment was put in on the Senate side was because of, frankly, a constitutional concern that the bill would not be able to, should not be applying to projects that are already underway. You know, Arkansas, we need more power. We had a lot of discussions in the legislature this past year about we have a lot of load growth that's happening, data centers are showing up,
Wind energy resources are just one arrow in the quiver that can be useful. We shouldn't be picking winners and losers when it comes to energy policy whenever we are shopping around for a need for more energy. Again, these wind energy projects are voluntarily entered into with their private property owners. No one is forcing anyone to purchase the wind energy. I will mention the new wind project that is up in Tunica, Mississippi.
They're selling their power to the Amazon data center because Amazon requested that power. And so if this legislation passes as amended today, it would effectively ban wind energy in the state and limit the ability for the state to draw additional economic development from folks that want to purchase this wind energy. So again, I urge the committee to reject the bill, and I'm here for any questions.
Speaker 64
2:15:37
Thank you for your testimony. It appears we do
Representative Jim Wooten
Unverified
2:15:43
have a couple of questions. Representative Wooten, you're recognized. So if I understand correctly, I'm confused. It says on our calendar list or on our agenda to create the Arkansas Wind Energy Development Act. Yes, sir. But everything I'm hearing from you is that it will prevent it.
Yes, sir. Arthur, the writer, the presenter of the bill, would you clarify what we're talking about? Are we talking about the Development Act, or are we talking about the failure to permit them to be
built? No, sir. This is just regulating. This is just... The regulations.
Well, the ones speaking against it seem to think it—let me get to my question.
My question is, would every farmer who leases land to raise rice on be advised to have a clause in their contract that no windmill would be built on the property that they've leased if they wanted to use aerial application? That would be up to them. But my question is, would they be well-advised to do that? If they
would like it to be crop-dusted, I would say probably.
Chair
Unverified
2:17:13
Okay. Thank you. I'll just add, many
Simon Mahan
Unverified
2:17:18
of these states, Arkansas, Oklahoma, Kansas, they have crop-dusters as well and significant wind energy penetration. Oftentimes, I'm not a crop-duster, but my understanding is the aerial applicators tend to fly when the wind is not blowing or tries to blow the least, and that's when the wind turbines are not spinning. If I may, Mr. Chairman,
Representative Jim Wooten
Unverified
2:17:41
the point being, it doesn't make any difference whether the wind's blowing or not.
You fly a crop duster to try to dust a field, that's an entirely different ballgame. The structure is still there, whether the windmill is whipping around or whether it's still there. And it's not just concern about the crop duster. It's concern about if it should come off, will the fan or whatever you call it fly off.
And I know we've got a company here that builds those operations or builds those facilities. So, I mean, but specifically to the crop dusters, it doesn't make any difference whether the wind's blowing or not. The structure's
Chair
Unverified
2:18:38
still there. I'd just reiterate, many of the states that have wind farms have agricultural uses that the crop dusters in those states have figured out how to coexist with the resources.
Representative Fred Allen
Unverified
2:18:56
Representative Allen, you're recognized for your question. Thank you, Mr. Chairman. Okay. Thank you, Mr. Chairman. I'm a little bit confused because just a second ago you were against it. Are you against the bill or for it? We're against the bill.
Chair
Unverified
2:19:15
Okay. All right. You've answered my question. Representative Leigh-Demann, you're recognized for your question. Thank you, Mr. Chairman.
Representative Jack Ladyman
Unverified
2:19:27
Thank you. Sir, are you familiar with the, I forgot your name there at the end of the table. I'm Simon. Nice to meet you, sir. Are you familiar with Texas wind
farms? Generally, yes, sir. Do you know, I think it was mentioned that Texas has a law. Do you know anything about the specifics of
the Texas law? Because I know there's a large number of wind farms down
Simon Mahan
Unverified
2:19:57
in southern Texas. Yes, sir. We are, I do not work on regulation or legislative work in Texas. I'm generally aware
that there are statewide rules regarding decommissioning of wind farms. We are in support of good regulation. I will even go as far to say within this bill, there are components that we think could be useful for Arkansas. However, many of the other parts of this legislation are designed specifically to stop wind energy production in the state. As I mentioned, the bill
reads almost verbatim from legislation that was passed in Tennessee seven years ago that was designed specifically to stop wind farms but we are more than eager to work with folks on reasonable regulation within the state regarding what we might be able to borrow from some of our neighboring states that have significant wind development.
Representative Jack Ladyman
Unverified
2:21:03
Representative Paul do you know the expert mentioned that this was based on other state regulations do you know which state
Representative Brad Hall
Unverified
2:21:12
regulation this bill's based on? She can come back up if she's allowed to. She can
Speaker 196
2:21:27
answer that for you. Okay. Do you want me to come up? Not yet. Sure, you can
Speaker 295
2:21:36
come up, but let's try to move this along if we can. Actually, very little of this bill ended up being based on Tennessee. It more came out of Iowa.
Even parts of it were from New Hampshire when dealing with the view scape. We did have some from Tennessee. We had quite a bit from Oklahoma. The oil and gas part of it is from Oklahoma. So I used, I wrote the bill. I know where I got the information, and it was from several varied states. So it came from multiple states is what you're saying? Yes, sir. Yes, sir.
Representative Jack Ladyman
Unverified
2:22:07
It did. All right. Thank you. Thank you, Representative Leitman. Any further questions?
Representative Lee Johnson
Unverified
2:22:18
Okay. Seeing none, thank you for your testimony again. Is there anyone else who would like to speak for this bill? Anyone else who would like to speak against this bill? Representative Morey. I'm sorry, not Representative. Mr.
Chair
Unverified
2:22:37
Morey, please go to the end of the table, introduce
Speaker 341
2:22:43
yourself and who you're with. Thank you, Mr. Chairman. Robert Morey with Swift Current Energy. It's a common practice for me to never come to the table to speak for or against the bill as a contract lobbyist.
However, with the short notice of this amendment this morning, my client couldn't travel to be here in time to share a lot of the same remarks you've already heard this morning. Just to be brief, again, I'll reiterate a lot of what Mr. Paschal said, that this new amendment undoes an amendment that was made on the other end of the building that my client, along with our peers, I believe, I don't know that we can say we agreed to, but we were okay with, and that's what led to the bill making it down to this end of the building and us being okay with it passing out in its form before it was amended this morning.
I do want to address, for my project specifically that I'm talking to, Representative Wooten, my client, we have met with all three aerial applicators in our project area. Just about, I'm going to say 90 to 95 percent of our project is in tillable agricultural production. And we were very intentional on meeting with all those guys on the very front end. We have taken their input. We are going to construct our met towers, our meteorological towers, within the next six months with red paint, with some other things that they requested to be on them just for their visibility.
And then as we continue to develop our project over the next couple of years, we'll also take their input on whether it be other notification devices on when they're spinning, what time they're spinning. From my understanding, the technology now allows to turn on and off with the switch of a button. So if they're flying in a particular field and it's putting out fertilizer or chemical, I believe we'll have the capability to turn those off for safety. I agree with Mr. Simon's comments at my company. We do also believe in very sensible regulations, but we do think that many of the things in
the original bill here are very far overreaching, and it is with the intent of kill and win projects. However, the language that was agreed upon by the other end that has now been amended out is something that we simply do have a lot of problems with. And just wanted to, again, reiterate our opposition to this legislation as it's been amended this morning. Thank you for your
Chair
Unverified
2:25:01
testimony. Would you take some questions? Sure. Representative Allen, the recognized.
Representative Fred Allen
Unverified
2:25:06
Thank you. So your testimony is that when the bill was in the Senate, you all were okay with the language. But between the bill leaving the Senate and coming down here, the language was amended. You all just amended it this morning. Yes, sir. So you have not had an opportunity to
Speaker 343
2:25:25
see this. We had not seen it until you all just saw it this morning. Okay, thank you. Go ahead.
Speaker 49
2:25:33
We had seen the amendment this morning essentially gets the bill back to its original version
Speaker 341
2:25:39
when it was first filed by Senator Hester roughly a month and a half to two months ago. That bill was also heard in the Senate Insurance and Commerce Committee. It was voted down. Senator Hester worked with Senator Caldwell and I believe a few others to get to the First Amendment on the language, which is what the bill was as it arrived this morning and then
Speaker 49
2:25:57
now has been stripped out by way of the amendment you all just approved a little bit ago. So the bill is back in its original form? Essentially,
Representative Fred Allen
Unverified
2:26:06
yes, sir. Okay. So the only way you all could get it out of the Senate
was with a compromise amendment. Is that correct? That's correct. So now the compromise amendment is
Representative Jim Wooten
Unverified
2:26:25
back at the original bill? Yes, sir. Okay.
Do we have a misnomer in the agenda that it's a development bill? It sounds like it's a control regulation type thing.
Yes, sir. It sounds like, I don't know what it sounds like. I mean, it's confusing to us relative to what do we need to do? I mean, that's an unfair question for you. Well, if you were against it, I guess you'd want us to be against it. But I'm unclear by the title of the Development Act when it sounds like it's prohibitive and it's preventing it.
Julie Morton
Unverified
2:27:15
That's my fault. That's a title I took from the Oklahoma Wind Energy Development Act. Okay. So it should
Representative Jim Wooten
Unverified
2:27:24
have been worded differently in our agenda. You're not the only one that has said that. So that is
Speaker 307
2:27:33
my error. Okay. Thank you. Thank you. Further questions from the committee?
Representative Jim Wooten
Unverified
2:27:37
Thank you for your testimony. Thank you.
Is there anyone else who would like to speak for this bill? Anyone else at this time would like to speak against this bill? Unfortunately, members, as I stated, we are not going to vote on this bill because there are more people coming to testify on both sides of this issue because obviously some circumstances have changed very quickly. So I'm going to accommodate everyone and allow them to review this amendment and come and speak on that. So we're going to have to bump you guys to after session, unfortunately.
But that's just how we're going to have to do it. So thank
Speaker 5
2:28:20
you for your testimony. Thank you, Mr. Chairman. Members, we're not finished
yet. Representative Johnson, would you like to proceed with some... Members, it
Speaker 64
2:28:38
would not be a meeting if Representative Johnson didn't present. Representative Johnson, District 47.
Representative Lee Johnson
Unverified
2:28:54
In all fairness, this is a Senate bill I'm presenting. Would you identify the number, sir? Yeah, Senate Bill 527, and I have someone here at the table with me. I think the committee will recognize, but I'd still like to have
Speaker 358
2:29:10
her introduce herself. Good afternoon. Janet Mann, DHS. Thank
Representative Lee Johnson
Unverified
2:29:14
you. You may proceed with your bill. Members, before I start, I do want to make one comment. Lots of folks sign up for co-sponsors' bills and sometimes for different reasons want to pull off a bill. I did have one member approach me wanting to pull off the bill as a co-sponsor,
but because of the time constraints, submitting the person off the bill was going to create it hard to get this through, and I wanted to make that comment publicly that Representative Clowney did request to be pulled off as a co-sponsor. What this bill is is it renews the Medicaid waiver. You know, we chose to go through Medicaid expansion quite some time ago now, and periodically we have to renew our waiver to continue to provide that coverage for the members of the state of Arkansas. And when we do, we have opportunities to make changes in the waiver, to try to improve the waiver. That's what this bill is. We're mainly doing a few things.
One is we're adding FQHCs to the definition of community bridge organizations. Do I? And others. And others, yeah.
That's right, community bridge organizations. We're also, right now, we're required to
collect cost share in anticipation of what the cost share might be for the next year. So we have to pay forward what we anticipate the insurance company's cost share costs are going to be for the next year. And then we do a settle up at the end of the year. What this bill is going to allow us to do is move that cost share into the premium payment.
That's going to allow us to recover more in the way of premium tax from the premium tax we get on premiums. We're also going to be recouping pharmacy rebates in this bill. Currently, pharmacy rebates under the expansion program go back to the commercial payers. This is going to require them to seek all rebates, and then those rebates would come back directly to DHS. The other thing this bill does is it requests a change in the medical loss ratio. So currently, the medical loss ratio is set at 80-20. We're asking that to be shifted to 85-10.
the medical loss ratio is defined by how much money insurance companies spend on medical costs versus administrative costs. By raising it to 85, we're looking for them to spend more of their dollars on medical issues, and what doesn't get spent would revert back to the state. Additionally, there's a work requirement in this bill, and I have Director Mann here too. We'd be happy to answer any questions on the bill anyone has.
Chair
Unverified
2:31:29
We have a few questions. Representative Perry.
Thank you, Mr. Chairman. Representative, I appreciate this, but when
Representative Mark Perry
Unverified
2:31:35
you said the amount that we've been paying in the past, or in the back end of it, now will be added towards the premium. What kind of impact will that be
Representative R. Scott Richardson
Unverified
2:31:50
on premiums? Thank you for the question. So every year we negotiate the premium and the advanced cost share. That is paid monthly for the eligible beneficiaries. And then at the end of the year we do reconcile. So what we're doing with this is taking the premium and the advanced cost share and redefining that as the premium so that we can calculate the premium tax.
So we're actually continuing the process. We're just trying to capture more premium tax for the state. Is there a fiscal impact on that? Yes, sir. I believe the additional premium tax is approximately $12 million annually. That's to the positive. That
Representative Lee Johnson
Unverified
2:32:29
would be to the positive impact on the budget. And regarding the premiums, I don't think the cost
is going to be more to the insurance companies. We're just changing how it reports. So instead of reporting it as cost share, we're reporting it as premiums, redefining it.
So it shouldn't affect the premiums because the cost of the insurance is the same, with the exception of a slight increase in the amount of tax they're going to have to
Chair
Unverified
2:32:54
pay. Okay, thank you. Representative Aker, you're recognized. Thank you,
Representative Aker
Unverified
2:33:01
Mr. Chair. I think one of the most interesting pieces of this is that it seems that we're going to be trying to capture more of the rebate dollars that we previously were not capturing. Is that correct? Yes, sir, it is correct.
Speaker 365
2:33:15
Currently, the state does not collect the rebates from the
Representative R. Scott Richardson
Unverified
2:33:19
QHP program, and so this would be a major change to collect that, and we would remit 90% back to the feds and 10% would stay in the state, which would be equivalent to how we are handling past population
Representative Aker
Unverified
2:33:32
and the fee-for-service population. What's the estimated fiscal impact on that 10% that will be added to your budget? There's a
Representative R. Scott Richardson
Unverified
2:33:40
range of estimates, So we are hoping for cost avoidance of up to $200 million a year, total dollars.
Representative Aker
Unverified
2:33:50
How long have the QHPs been operating in
Representative R. Scott Richardson
Unverified
2:33:53
the state? I believe since January of 2014.
Chair
Unverified
2:33:59
Thank you. Representative Lundstrom, recognize for a question. Thank
Representative Robin Lundstrum
Unverified
2:34:06
you, Chairman. Could you talk about the work component in this? on page eight and tell us how you're going to monitor that, how this will remove people if they're not working. Could you walk
us through that? Yes, ma'am. Thank you for the question. I'm
Representative R. Scott Richardson
Unverified
2:34:25
going to start, and the secretary and others are here to help me make sure I get it correct. So we have sent an amendment to do a work requirement, and we are going to be working with individuals, and we want to have them on track for economic prosperity. So we will be working with them in developing personal development plans and doing success coaching with our members. And then if they are not on track, which we will be using an automated, more automation by working with the launch system as it goes live also, then we will do exception reporting.
And if they are not on track, we will be suspending their coverage. That is different from what we've done in the past. which is removing them from eligibility. If they come into
Speaker 370
2:35:11
compliance, then the suspension can be lifted and they can
Representative Robin Lundstrum
Unverified
2:35:15
receive their benefits. Okay. How long is that compliance period or that first period where you've got a shot at keeping this? Do they get a month or what's the process? Because we have people taking advantage of the system extensively. I
Representative R. Scott Richardson
Unverified
2:35:30
do believe it's up to three months to be compliant,
and if they're not compliant, then they are removed and suspended until they become compliant. Okay. Yeah, I'm going to ask the secretary to join, if
Speaker 358
2:35:41
you don't mind. I want to make sure we get it correct. That'll be a
Speaker 375
2:35:49
negotiation. Good afternoon now. Christy Putnam, Secretary of DHS. Thank you for the question. To answer that, that is one of the details that we will work through negotiation with CMS in negotiating the terms and conditions of the waiver itself. So we will be able to put some parameters on the length of time
before somebody can be considered noncompliant. So that is something that we can certainly have discussions with the governor's office and the legislature about what parameters do we want to set for that. But to Director Mann's point, Deputy Mann's point, we could set it for a three-month period before they are being suspended. It could be a two-month period, but that is definitely something that we would have to negotiate with CMS in conjunction with communicating with
Representative Robin Lundstrum
Unverified
2:36:28
you all. Let's say the government says, no, we're not going to do any waivers. That's out.
That strikes that portion of the bill. Then are we still committed to a financial, I mean, the rest of the bill
Speaker 264
2:36:43
would still stand or no? I believe it would. I don't see the current administration not wanting to pursue a work waiver. I don't
Representative Robin Lundstrum
Unverified
2:36:50
either, but I want to make sure that we have a strong work waiver because we have so much. This is one of our biggest expenses, so I'm really concerned about that particular point. I'll step out and let some other folks step back in.
Representative Jim Wooten
Unverified
2:37:07
Representative Boyden, you're recognized. Okay, when you say premium, are you talking about the premium that's paid
by the consumer? No, sir, I'm not.
Representative R. Scott Richardson
Unverified
2:37:18
The Medicaid program pays a premium to the carriers every month for the coverage of the expansion population. So this is what we are paying every month to the carriers. So we're going to increase that? No, sir. No,
Representative Lee Johnson
Unverified
2:37:36
I don't think we're going to increase anything.
So currently, the way the process works is if you're eligible for Medicaid expansion, you can go and pick one of a couple of plans on the marketplace, and then the state plays the premiums. We're not doing anything to change that process. We're just redefining cost share to include it as part of the premium. The state would be covering that cost, not the individual, Because we already covered the cost share part for the individual.
Representative Jim Wooten
Unverified
2:38:05
Will this add to the bill that we had last week that we ended up calling a mess but we approved?
Representative Lee Johnson
Unverified
2:38:13
How does this impact that cost? If you're referencing the House Bill of 1930 that representative Wardlaw ran, I don't think this would have any impact or change on that. I don't foresee this having a big impact on premiums the way we have it written now. because, again, the cost for the insurance companies is essentially the same. The only difference is there's this $12 million total difference spread across all the insurance companies with regard to how we're going to pay a tax now. But the cost share, they're not paying any more in the cost share. It's the same cost back and forth between the DHS and the insurance carriers.
Representative Jim Wooten
Unverified
2:38:45
But it would increase the premium cost and would be adjusted after the next year? I heard the word adjusted. Yes, sir. We're increasing the premium
Speaker 358
2:38:58
tax, not the premium. The premium tax.
Representative Jim Wooten
Unverified
2:39:06
That the carriers pay, yes, sir. Okay. But that
would be adjusted based upon what their outflow is?
Representative Lee Johnson
Unverified
2:39:13
Yes, there'd still be that reconciliation process.
And so, you know, the amount of cost share that we're required as a state to pay now, that wouldn't change. That varies from year to year depending on how often, you know, individuals access the health care system. And then that reconciliation process stays the same. The only thing we're doing, the amount we're paying isn't changing. The amount we're on the hook for isn't changing. We're just, you know, creating a reporting mechanism that requires them to report that as part of the premium that we're paying already, not as the cost share. Okay. Thank you. Thank you, Mr. Chairman. Thank you.
Further questions from the committee? Representative Richardson, you're
Representative R. Scott Richardson
Unverified
2:39:54
recognized. So my question is real simple. To my people at home, tell
me how this helps them. This is a continuation of the Medicaid expansion program. Every five years, under an 1115 waiver, we have to reapply. So with this legislation, we are reapplying for the expansion coverage
so that they can keep insurance. We're also trying to be better stewards of the state taxpayers' money by having these additional financial controls. Without this, we are not
Speaker 264
2:40:32
authorized to have expanded Medicaid. It goes away. Thank you. Thank you
Representative Lee Johnson
Unverified
2:40:37
very much. And I would say one other comment. By recouping some of this money that we're going to recoup, that's extra money back in the coffers of DHS that can then be paid back as benefits in different places for the constituents back home.
Representative R. Scott Richardson
Unverified
2:40:50
I have my next question, so thank you.
Representative Lee Johnson
Unverified
2:40:53
Thank you, Representative Rich. And further questions? I'm sorry, Representative Lundstrom.
Representative Robin Lundstrum
Unverified
2:41:03
You're recognized. I'd still like to know the total cost of this and where are we going to get cost savings. I was not a fan of the Medicaid expansion
program at all, so I'm looking for cost
Representative R. Scott Richardson
Unverified
2:41:18
savings. Where are those cost savings? Yes, ma'am. So currently, the Medicaid expansion program can cost anywhere from $2 to $2.5 billion at its highest during the pandemic.
And so we are hoping to cost avoid about $300 million. The majority of that is going to come from pharmacy rebates. The additional will come from the MLR estimates, the medical loss ratio that Representative Johnson referred to, by asking the carriers to spend 85% of their premiums versus 80% on medical services. That's estimated at anywhere from $50 to $100 million a year. It is based on claims, so it has to be calculated every year.
And then the additional is $12.5 million in premium tax. So we have a range of $261 million in cost
Speaker 365
2:42:08
avoidance as a low estimate to $320 million as a high estimate. Okay. Have you done any calculations
Representative Robin Lundstrum
Unverified
2:42:16
about taking people and requiring them to work? No, ma'am. We have not done
Speaker 370
2:42:22
those estimates yet. We are in the process with CMS going through
Representative R. Scott Richardson
Unverified
2:42:27
acceptance, and then we'll do public comment on the federal side when we begin the negotiations of terms and conditions and have a clearer picture of what
they're going to require of us to do and negotiate that out, then we can do the estimates on the work requirement.
Representative Lee Johnson
Unverified
2:42:44
Okay. All right. Thank you. If I could make one more comment to that, and I'm going to ask y'all, I'm a member of the committee, I guess they asked a question. How many lives are covered currently and managed in the expansion population? Approximately 225,000. Okay. So a percentage of those are going to fall into this work requirement. So you will see some savings, not only from the $250 to $320 million cost avoidance savings that we're going to recoup through the pharmacy rebates,
through the MLR ratio change, through the cost share as reported as premium tax, but also, you know, presumably there are some of these folks that are going to have their coverage lost because of the work requirements. So that $225,000 number is going to drop and would create savings through that. And if I may to
Speaker 375
2:43:25
that point, when we say coverage lost, that would be because they are working and have employer-based insurance. That is the goal. The goal here is not to be punitive, and I know you all have heard me say that before. The goal is truly to figure out how can we provide enough supports for individuals who are currently covered on Medicaid to move to full
employment, not half employment, full employment, so they have access to better economic stability and they are able to access employer-sponsored insurance or purchase a plan off the marketplace that they can
Representative Lee Johnson
Unverified
2:43:53
actually afford. I think that's a great comment. Thank you
Representative Robin Lundstrum
Unverified
2:43:57
for that extra comment on that. Okay. $225,000 out of a state that's $3.2 million. That's a lot of people that are on those programs. And there seems to be more people in the cart some days than there are pulling the cart. And I just want to emphasize how important it is.
We've got to cut spending. And I'm hoping this is a method to do that. I'm kind of in the wait and see and hope. I don't know if that's going to feed the bulldog when it comes down to we don't have money to cover all the expenses that we are incurring. Thank you, Representative. Any further
Speaker 5
2:44:38
questions? Okay. Thank you, committee, for the questions. Is there anyone? Representative Johnson, do you like to? No, I'm up close from my bill.
Okay. Is there anyone? There's no one signed up, but is there anyone who would like to speak against this bill? Okay. Is there anyone else like to speak for this bill? Representative Johnson, do you recognize the closing? I'm closing
Speaker 5
2:44:56
my bill. Make a motion to do pass. Okay. We have a motion to do pass by Representative Johnson. All in favor, say aye. Aye. Any opposed, say
Representative Lee Johnson
Unverified
2:45:14
no. Do we not have any discussion? You've passed your bill. Any further business before we break from lunch?
I see some other legislators here. Any further business? Okay, we are going to reconvene 15 minutes upon adjournment to 1177 and to hear the other bill that we ceased the testimony on.
Agenda
RE-REFERRED TO COMMITTEE
Number Sponsor Subtitle
HB1905 Lundstrum TO CREATE THE BUYER BEWARE ACT; AND TO REQUIRE A REAL ESTATE LICENSEE REPRESENTING A SELLER TO DIRECT THE SELLER TO THE OFFICE OF THE COUNTY ASSESSOR FOR THE CURRENT ASSESSED VALUE OF A RESIDENTIAL REAL ESTATE PROPERTY.
REGULAR AGENDA
Number Sponsor Subtitle
HB1295 L. Johnson TO CREATE THE HEALTHCARE COST-SHARING COLLECTIONS TRANSPARENCY ACT.
HB1308 Steimel CONCERNING UNFAIR PRACTICES RELATED TO RESIDENTIAL REAL ESTATE REPAIR CONTRACTS; AND TO REGULATE SOLICITING RESIDENTIAL CONTRACTORS AND TREE CONTRACTORS.
HB1811 Steimel TO AMEND PROPERTY AND CASUALTY LAW; AND TO REQUIRE REASONABLE PROOF OF PAYMENT OF A DEDUCTIBLE TO RECOUP RECOVERABLE DEPRECIATION UNDER PROPERTY AND CASUALTY LAW.
SB420 Hester TO EXPAND ELIGIBILITY FOR WATER DEVELOPMENT STATE PROGRAMS; TO AMEND THE WATER AUTHORITY ACT; AND TO AMEND THE USES OF THE CONSTRUCTION ASSISTANCE REVOLVING LOAN FUND.
HB1868 L. Johnson TO REQUIRE AN INSURER TO PAY A FAIR AND REASONABLE SERVICE FEE
DIRECTLY TO A FIRE DEPARTMENT FOR FIREFIGHTING SERVICES BASED ON TIME ON SCENE.
HB1443 Pilkington TO CREATE THE SECOND AMENDMENT FINANCIAL PRIVACY ACT; TO PROHIBIT FINANCIAL INSTITUTIONS AND PAYMENT NETWORKS FROM USING CERTAIN DISCRIMINATORY PRACTICES; AND TO PROVIDE FOR ENFORCEMENT OF VIOLATIONS.
SB480 K. Hammer TO AMEND THE LAW CONCERNING THE INVESTMENT OF STATE FUNDS.
SB331 G. Leding CONCERNING COVERAGE FOR GENETIC TESTING FOR INHERITED CANCER MUTATIONS; AND TO CREATE THE GENETIC TESTING ACT.
SB483 Irvin TO REPEAL CERTAIN REPORTING REQUIREMENTS FOR THE STATE INSURANCE DEPARTMENT AND THE STATE SECURITIES DEPARTMENT; AND TO REVISE CERTAIN REPORTING REQUIREMENTS FOR THE STATE INSURANCE DEPARTMENT.
HB1955 S. Meeks TO REPEAL THE SHIELDED OUTDOOR LIGHTING ACT.
HB1956 S. Meeks TO CREATE THE ARKANSAS NIGHTTIME ENVIRONMENT PROTECTION ACT.
SB481 Gilmore TO CREATE A MORE SUSTAINABLE SYSTEM OF PROPERTY INSURANCE FOR PUBLIC SCHOOLS, STATE-SUPPORTED INSTITUTIONS OF HIGHER EDUCATION, AND STATE-OWNED PROPERTY; AND TO DECLARE AN EMERGENCY.
SB519 J. Boyd TO AMEND THE STANDARD NONFORFEITURE LAW FOR LIFE INSURANCE; AND TO REGULATE THE PAYMENT OF INTEREST ON DEFERRED PAYMENT OF ANY CASH SURRENDER VALUE ACCORDING TO THE TERMS OF THE POLICY.
SB544 M. Johnson TO AMEND THE ARKANSAS PHARMACY BENEFITS MANAGER LICENSURE ACT.
HB1177 M. Brown TO AMEND THE ARKANSAS FRANCHISE PRACTICES ACT; AND TO CLARIFY THE APPLICABILITY OF THE ARKANSAS FRANCHISE PRACTICES ACT.
HB1408 Pilkington TO ALLOW QUALIFYING PATIENTS OR DESIGNATED CAREGIVERS TO PURCHASE MEDICAL MARIJUANA USING A FLEXIBLE SPENDING ACCOUNT OR A HEALTH SAVINGS ACCOUNT.
HB1625 Barnett TO AMEND THE LAW CONCERNING INSURANCE REQUIREMENTS FOR LICENSED HOME INSPECTORS.
HB1994 A. Collins TO AMEND THE LAW CONCERNING SELF-SERVICE STORAGE FACILITIES; AND TO REQUIRE NOTIFICATION BY A SELF-SERVICE STORAGE FACILITY TO AN OCCUPANT WHEN THE OCCUPANT'S LEASED SPACE IS COMPROMISED.
SB437 Hester TO CREATE THE ARKANSAS WIND ENERGY DEVELOPMENT ACT.ea
SB475 J. Dismang TO ESTABLISH THE PHARMACY SERVICES ADMINISTRATIVE ORGANIZATION ACT; AND TO REGULATE PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS.
SB583 C. Tucker TO AMEND THE LAW CONCERNING MAXIMUM ALLOWABLE COST LISTS RELATING TO PHARMACY SERVICES.
SB596 M. McKee TO AMEND THE LAW REGARDING ENERGY; TO ESTABLISH A STATE ENERGY POLICY; TO REGULATE RETIREMENT OF DISPATCHABLE ELECTRIC GENERATION FACILITIES; AND TO DECLARE AN EMERGENCY.
SB611 Dees TO AMEND THE SOCIAL MEDIA SAFETY ACT.
SB527 Irvin TO AMEND THE ARKANSAS HEALTH AND OPPORTUNITY FOR ME ACT OF 2021; AND TO INCREASE THE MEDICAL-LOSS RATIO IN THE ARKANSAS HEALTH AND OPPORTUNITY FOR ME PROGRAM.
SB610 J. Dismang TO AMEND THE GENERATING ARKANSAS JOBS ACT OF 2025; AND TO DECLARE AN EMERGENCY.
DEFERRED BILLS
Number Sponsor Subtitle
HB1659 S. Meeks TO AMEND THE UNIFORM COMMERCIAL CODE; AND TO CLARIFY THE PRIORITY AMONG SECURITY INTERESTS AND ENTITLEMENT HOLDERS UNDER THE UNIFORM COMMERCIAL CODE.
HB1009 A. Collins TO ALLOW PREGNANCY TO BE A QUALIFYING EVENT FOR ENROLLMENT IN CERTAIN HEALTH BENEFIT PLANS.
HB1014 A. Collins TO REQUIRE COVERAGE OF IN VITRO FERTILIZATION UNDER THE STATE AND PUBLIC SCHOOL LIFE AND HEALTH INSURANCE PROGRAM.
HB1409 Long TO AMEND THE LAW REGARDING ENERGY; AND TO CREATE THE ELECTRIC RELIABILITY ACT.
HB1159 J. Richardson TO CREATE THE RETAIL CONVENIENCE STORE SECURITY ACT; AND TO REGULATE SECURITY MEASURES AT RETAIL CONVENIENCE STORES.
HB1354 Lundstrum TO REGULATE PHARMACY BENEFITS MANAGERS; TO AMEND THE LAW CONCERNING THE STATE AND PUBLIC SCHOOL LIFE AND HEALTH INSURANCE PROGRAM; AND TO AMEND THE LAW CONCERNING CERTAIN HEALTH BENEFIT PLANS.
HB1533 Gramlich TO CREATE THE DECENTRALIZED UNINCORPORATED NONPROFIT ASSOCIATION ACT.
HB1950 Torres TO PROTECT LICENSED FAMILY CHILDCARE HOMES FROM TERMINATION OF HOMEOWNERS INSURANCE COVERAGE; AND TO PROHIBIT DISCRIMINATION AGAINST LICENSED FAMILY CHILDCARE HOMES BY HOMEOWNERS INSURANCE PROVIDERS.
HB1813 Gramlich TO ADOPT THE FAIR AND EFFICIENT TRANSMISSION COMPACT.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — INSURANCE & COMMERCE- HOUSE, Apr 9, 2025 | Agenda | 3 | Official source ↗ |
Speakers
Representative John Maddox Chair
Unverified
Speaker 2
Speaker 5
Representative Mark Perry
Unverified
Speaker 13
Speaker 19
Representative Jeff Wardlaw
Unverified
Representative R. Scott Richardson
Unverified
Representative Austin McCollum
Unverified
Representative Lee Johnson
Unverified
Representative Robin Lundstrum
Unverified
Speaker 46
Chair
Unverified
Senator Justin Boyd
Unverified
Speaker 64
Representative Andrew Collins
Unverified
Representative Richard McGrew
Unverified
Speaker 75
Speaker 11
Representative Jim Wooten
Unverified
Speaker 90
Representative Dwight Tosh
Unverified
Speaker 96
Speaker 97
Speaker 108
Speaker 110
Representative Kenneth B. Ferguson
Unverified
Speaker 120
Speaker 123
Speaker 103
Representative Jack Ladyman
Unverified
Representative Lincoln Barnett
Unverified
Representative Trey Steimel Chair
Unverified
Speaker 170
Speaker 175
Speaker 176
Speaker 178
Speaker 179
Speaker 184
Speaker 185
Representative Howard M. Beaty, Jr.
Unverified
Speaker 63
Representative Jimmy Gazaway
Unverified
Speaker 208
Representative Les D. Eaves
Unverified
Speaker 207
Speaker 216
Representative Fred Allen
Unverified
Representative Carol Dalby
Unverified
Speaker 232
Speaker 235
Speaker 237
Speaker 233
Speaker 227
Senator Jonathan Dismang
Unverified
Speaker 94
Speaker 76
Speaker 259
Representative Jeremy Wooldridge
Unverified
Speaker 265
Speaker 276
Senator Tyler Dees
Unverified
Speaker 285
Representative Brad Hall
Unverified
Representative James Eaton
Unverified
Julie Morton
Unverified
Speaker 295
Speaker 298
Speaker 164
Speaker 196
Speaker 211
Speaker 314
Speaker 258
Speaker 326
Simon Mahan
Unverified
Speaker 341
Speaker 343
Speaker 49
Speaker 346
Speaker 307
Speaker 358
Representative Aker
Unverified
Speaker 365
Speaker 370
Speaker 375
Speaker 264