Said in CommitteeBeta

Exactly as spoken.

Transportation, Technology & Legislative Affairs - Senate

April 2, 2025 ·Upon Adjournment of Senate ·Room 207 ·2:11:10
Video Transcript 1 document

Bills discussed (18)

Bill Title Sponsor Status
SB540 Act 702 · 10 mentions in agenda, chapter, transcript
Matched: “…IAL CARGO TRANSPORTED BY A FARM MACHINERY EQUIPMENT HAULER. SB540 M. Johnson TO LIMIT THE SUSPENSION OR REVOCATION OF A DRIVE…”
TO LIMIT THE SUSPENSION OR REVOCATION OF A DRIVER'S LICENSE OR IMPOSITION OF RESTRICTIONS ON … M. Johnson Notification that SB540 is now Act 702
SB96 · 9 mentions in agenda, chapter, transcript
Matched: “…SPOSITION OF REAL PROPERTY BY THE STATE HIGHWAY COMMISSION. SB96 C. Penzo TO AMEND THE LAW CONCERNING DETACHMENT BY A REGION…”
TO AMEND THE LAW CONCERNING DETACHMENT BY A REGIONAL AIRPORT AUTHORITY; AND TO REPEAL REGIONAL … C. Penzo Died in Senate Committee at Sine Die adjournment.
SB492 Act 699 · 5 mentions in agenda, chapter, transcript
Matched: “…ant Sen. Jamie Scott REGULAR AGENDA Number Sponsor Subtitle SB492 J. Bryant TO AMEND THE LAW CONCERNING THE RELOCATION OF UTI…”
TO AMEND THE LAW CONCERNING THE RELOCATION OF UTILITY FACILITIES; AND TO AMEND THE LAW … J. Bryant Notification that SB492 is now Act 699
SB258 · 4 mentions in transcript, chapter, agenda
Matched: “presenting Senate Bill 258 to you several weeks ago. We've worked with the Arkansas Se…”
TO CREATE THE ARKANSAS DIGITAL RESPONSIBILITY, SAFETY, AND TRUST ACT. C. Penzo Died on Senate Calendar at Sine Die adjournment.
SB496 Act 700 · 4 mentions in agenda, transcript, chapter
Matched: “…T OF FEDERAL REGULATION OF CERTAIN TYPES OF DIESEL ENGINES. SB496 Caldwell TO AMEND THE LAW CONCERNING PERMITS FOR SPECIAL CA…”
TO AMEND THE LAW CONCERNING PERMITS FOR SPECIAL CARGOES; AND TO AMEND THE LAW CONCERNING … Caldwell Notification that SB496 is now Act 700
HB1798 Act 531 · 2 mentions in agenda, chapter
Matched: “…ION ON AN ARKANSAS DRIVER’S LICENSE OR IDENTIFICATION CARD. HB1798 Nazarenko TO ESTABLISH A GREEN ENVELOPE PROGRAM. HB1845 Hol…”
TO ESTABLISH A GREEN ENVELOPE PROGRAM. Nazarenko Notification that HB1798 is now Act 531
SB561 · 2 mentions in agenda, chapter
Matched: “…ING THE RELEASE OF A VEHICLE THAT HAS BEEN TOWED OR STORED. SB561 M. Johnson TO ALLOW FOR THE ISSUANCE OF AN ADDITIONAL TEMPO…”
TO ALLOW FOR THE ISSUANCE OF AN ADDITIONAL TEMPORARY PREPRINTED PAPER BUYER'S TAG IN CERTAIN … M. Johnson Died in Senate Committee at Sine Die adjournment.
SB562 Act 704 · 2 mentions in agenda, chapter
Matched: “…E USE OF AN EXPIRED TEMPORARY PREPRINTED PAPER BUYER'S TAG. SB562 Hill TO AMEND THE LAW CONCERNING THE OFFICE OF INTERNAL AUD…”
TO AMEND THE LAW CONCERNING THE OFFICE OF INTERNAL AUDIT; AND TO REPEAL THE REQUIREMENT … Hill Notification that SB562 is now Act 704
HB1606 Act 922 · 1 mention in agenda
Matched: “…estrictions designating areas as 'Members and Staff Only'. HB1606 Steimel TO ALLOW A LOCAL GOVERNMENT TO AUTHORIZE THE OPERAT…”
TO ALLOW A LOCAL GOVERNMENT TO AUTHORIZE THE OPERATION OF A UTILITY TASK VEHICLE ON … Steimel Notification that HB1606 is now Act 922
HB1666 Act 656 · 1 mention in agenda
Matched: “…ICIENCY STUDY OF THE ARKANSAS DEPARTMENT OF TRANSPORTATION. HB1666 S. Meeks TO AMEND THE LAW CONCERNING THE ARKANSAS SELF-FUND…”
TO AMEND THE LAW CONCERNING THE ARKANSAS SELF-FUNDED CYBER RESPONSE PROGRAM. S. Meeks Notification that HB1666 is now Act 656
HB1688 Act 710 · 1 mention in agenda
Matched: “…GOVERNMENT'S JURISDICTION SUBJECT TO CERTAIN REQUIREMENTS. HB1688 Cavenaugh TO AMEND ARKANSAS LAW CONCERNING THE USE OF A DEA…”
TO AMEND ARKANSAS LAW CONCERNING THE USE OF A DEALER'S EXTRA LICENSE PLATE. Cavenaugh Notification that HB1688 is now Act 710
HB1796 Act 711 · 1 mention in agenda
Matched: “…S LAW CONCERNING THE USE OF A DEALER'S EXTRA LICENSE PLATE. HB1796 Beaty Jr. TO REQUIRE THE DISPLAY OF GENDER INFORMATION ON A…”
TO REQUIRE THE DISPLAY OF GENDER INFORMATION ON AN ARKANSAS DRIVER’S LICENSE OR IDENTIFICATION CARD. Beaty Jr. Notification that HB1796 is now Act 711
HB1834 Act 816 · 1 mention in agenda
Matched: “AGENDA (Revised 04/01/25 @ 7:55 PM) Added HB1834 Senate Committee on Transportation, Technology, and Legisla…”
TO AMEND ARKANSAS LAW CONCERNING THE LICENSING AND REGULATION OF MOTOR VEHICLES. Holcomb Notification that HB1834 is now Act 816
HB1845 Act 926 · 1 mention in agenda
Matched: “…RD. HB1798 Nazarenko TO ESTABLISH A GREEN ENVELOPE PROGRAM. HB1845 Holcomb TO ALLOW THE ELECTRONIC ADMINISTRATION OF DOCUMENTS…”
TO ALLOW THE ELECTRONIC ADMINISTRATION OF DOCUMENTS RELATED TO THE OWNERSHIP OF MOTOR VEHICLES; TO … Holcomb Notification that HB1845 is now Act 926
SB330 · 1 mention in agenda
Matched: “…N OF MOTOR VEHICLES. DEFERRED BILLS Number Sponsor Subtitle SB330 J. Scott TO AMEND THE CONTENTS OF THE WRITTEN DRIVER'S LICE…”
TO AMEND THE CONTENTS OF THE WRITTEN DRIVER'S LICENSE TEST AND THE DRIVER'S INSTRUCTION MANUAL; … J. Scott Died in Senate Committee at Sine Die adjournment.
SB447 · 1 mention in chapter
Matched: “SB447 J. Petty TO REQUIRE PERMITTED COMMON CARRIERS TO SUBMIT REP…”
TO REQUIRE PERMITTED COMMON CARRIERS TO SUBMIT REPORTS DETAILING SHIPMENTS OF ALCOHOLIC BEVERAGES INTO THE … J. Petty Died on House Calendar at Sine Die adjournment.
SB478 Act 738 · 1 mention in agenda
Matched: “…DETAILING SHIPMENTS OF ALCOHOLIC BEVERAGES INTO THE STATE. SB478 G. TO CREATE THE ARKANSAS DIESEL ENGINE FREEDOM ACT OF 2025…”
TO CREATE THE ARKANSAS DIESEL ENGINE FREEDOM ACT OF 2025; AND TO PROHIBIT STATE ENFORCEMENT … G. Stubblefield Notification that SB478 is now Act 738
SB541 · 1 mention in agenda
Matched: “…A DRIVER'S LICENSE OF A PERSON WHO HAS SUFFERED A SEIZURE. SB541 G. Leding TO AMEND THE LAW CONCERNING THE TOWING OR STORAGE…”
TO AMEND THE LAW CONCERNING THE TOWING OR STORAGE OF A VEHICLE, IMPLEMENT, OR PIECE … G. Leding Died in Senate Committee at Sine Die adjournment.

Official video page ↗

Transcript

Transcript available SliQ live captions ✓ Whisper ✓ Download .txt
Machine transcript

May contain errors. Verify important quotations against the official video.

About transcript accuracy
Source
Whisper
Model
ggml-large-v3-turbo.bin
Processing date
October 7, 2026
Senator Mark Johnson Unverified 0:00
by Ms. Olivia Cox. She is a nurse practitioner that is in the neurology, specializes in adult neurology, so we'd like to present Senate Bill 540 and I promise you we do it quickly. The Senate Bill 540 is representative in it and I've been working on this and Representative Furman who's had some experience with this problem has joined us as a co-sponsor. Under current law, the Office of Driver Services may require a driver to submit to the evaluation by hearing officer when it's possible that they might be suffering with a seizure. Basically what we're doing is, and I got into this kind of interestingly, we had a doctor of the day, it was a neurologist that I talked to about it, and she pointed out that it's important that people be able to maintain their ability to drive because epilepsy and other such seizure disorders can be controlled by medication and she even she felt that the one-year period was probably too long and the reason was that she said someone might lose their job after a long period of time if they couldn't drive and and that I'm gonna let Ms. Cox talk about the neurological side of it and then I'll wrap up on what we're going to do on the legal side of things so you push this button okay perfect good
▶ Play Suggest a correction Report an error
Speaker 6 1:39
evening committee so I'm Olivia Cox I'm a nurse practitioner I've been practicing for the last eight years I specialize in adult neurology the goal of this bill SB 540 is to align Arkansas state law with evidence-based practice regarding driving restrictions and persons who have suffered from a seizure. Current policy requires a 12-month seizure-free interval. SB 540 will reduce that to a maximum of six months, which is in line with the majority of other states. Difficult conversations are commonplace in my specialty, where many diseases that we treat are chronic, progressive, and often have few treatment options. That said, I can tell you with certainty that the most difficult and dreaded conversations I have with patients always pertains to persons who have suffered a seizure and how it impacts their ability to drive. Unfortunately, these conversations occur just about every day. The ability to drive is a key factor in quality of life and when that ability is restricted it significantly impacts an individual's autonomy, their ability to work, and to care for their families. These are the trends that we see in the literature. States with mandatory reporting and prolonged seizure-free interval requirements such as ours do not reduce the risk of seizure-related motor vehicle fatalities compared to shorter seizure-free interval requirements and in fact longer seizure-free interval requirements and mandatory clinician reporting increase the likelihood of unlicensed driving and patients withholding information about their condition from practitioners. SB 540 will bring Arkansas closer to the American Academy of Neurology and American Epilepsy Society. Their recent position statement that was released earlier this month that is aimed to balance public safety with the rights and quality of life of individuals with epilepsy. I have several patient-specific examples of how the 12-month interval has dramatically and negatively impacted their quality of life for the sake of everybody's time. I'm going to skip over those. I'm happy to go back to them if we would like to discuss them each. But, you know, situations like this where we're having to restrict patients from driving that should be able to drive. Again, the data says that a three to six month period of no driving for epilepsy patient is sufficient, is safe, all right? And so SB 540 is a step in the right direction to align Arkansas law with clinical evidence and national trends. 38 other states have a six-month or less requirement for seizure-free. And ultimately, this bill promotes the personal independence and well-being of people with epilepsy, which affects over 33,000 Arkansans, and we're doing
▶ Play Suggest a correction Report an error
Speaker 5 4:30
that without compromising public safety. Thank you guys all for your time. i'm happy to answer any questions any questions from the committee center love
▶ Play Suggest a correction Report an error
Speaker 8 4:38
seeing no questions from seeing no questions from
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 4:49
the committee is there anyone here to speak for against the bill seeing no one what is the will of the committee motion do pass senator scott Second, Senator Bryant. All in favor, say aye. Aye. Opposed, the same sign. Congratulations, Senator. Your bill passed. Thank you. You want
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 5:14
to go ahead and run Senator Caldwell? Yes, sir. I will. Thank you, committee. Thank you. Thank you. Let me find it, Mr. Chairman. Here we go. This is Senate Bill 496. go ahead sir thank you mr chairman mark johnson senate district 17 this is senator caldwell's bill uh it it cleans up the law regarding permits for special cargos and primarily we're talking about farm machinery hauling and it changes one word in two or three places it changes the word dealer to hauler and this is just the actual entity that's hauling the piece of farm equipment rather than the dealer because sometimes that's a third party or someone that is contracted by the dealer. This has to do with permits. My understanding from Senator Caldwell is that RDOT is good with this. They can get some annual permits rather than it being a case-by-case thing, and it cleans it up administratively both for RDOT and for the haulers. I will try to answer any questions. Thank you, Senator Johnson. Any questions?
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 6:43
Seeing none, is there anyone? Senator Ryan. Do you know if this
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 6:51
hurts a dealer? Like we're changing from a dealer to a hauler. So if I bought a piece of equipment from a dealer, they could do this. But if we're going to change the name to a hauler, does that mean that a dealer has to hire a hauler?
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 7:07
Well, no, sir. It means that the dealer is a hauler. Not all haulers are dealers, but all dealers of this type of equipment are haulers. So it would cover those that are existing dealers that do the hauling, plus a third-party contractor or someone that would be doing the hauling. That's my understanding of it, Senator Bryant. Any other questions? Seeing none,
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 7:30
is there anyone here to speak for or against the bill? Senator, are you closed?
▶ Play Suggest a correction Report an error
Speaker 22 7:37
I'm closed. What's the will of the committee? Motion do
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 7:42
pass. Motion do pass by Senator Johnson, a second by Senator Bryant. All those in favor say aye. Aye. Opposed, sign and sign. Congratulations, Senator. Okay, now we're going to get back on track. Senator Bryant. In a motion to expunge the vote. Okay, we've got a... I
▶ Play Suggest a correction Report an error
Speaker 35 8:01
know, but we're going to have a new amendment that's going to incorporate that. Okay. So we have to expunge the vote, by which it passed Monday night.
▶ Play Suggest a correction Report an error
Speaker 38 8:08
It didn't pass Monday night. The amendment did. Okay, so expunge the vote. You got it down, what you're supposed to do? joshua bryant senate district 32 would like to make a motion to expunge the amendment the
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 8:22
adoption of the amendment the adoption of sb 492 got a motion there to expunge do we have a second second all those in favor say aye aye aye opposed same sign and then we got a new amendment thank you mr chair now
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 8:39
we have a new amendment new amendment and while that's being passed out um the utilities and rdot met and uh i guess it would have been yesterday at yesterday morning and spent a few hours both both entities got got comfortable with this language all sides are good all sides are okay there's no as far as i know there's zero opposition to sb 492. so uh at the appropriate time i'd like like to make a motion to adopt the amendment and or to
▶ Play Suggest a correction Report an error
Speaker 38 9:10
explain the amendment we have a motion to
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 9:15
adopt got a second by senator johnson all those in favor say aye opposed
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 9:23
saying sign so thank you mr. chair thank you present the bill as amended to explain the bill as amended we did remove the language for any type of withholding of permits we cleaned up the language about civil penalties to make sure that civil penalties started at the appropriate time that the utilities could agree with change the reporting statements to every two months instead of every month and left the existing language that was adopted previously in the previous amendment intact that way all parties were satisfied okay any questions from the committee seeing none
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 9:54
is there anyone here to speak far or against the bill senator you're free to close i'm closed
▶ Play Suggest a correction Report an error
Speaker 38 10:03
it's been a good process i think we've got a good product So with that, I'd make a motion, do pass as amended. I have a motion, do pass as
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 10:12
amended, seconded by Senator Scott. All those in favor, say aye. Aye. Opposed, same sign. Senator, your bill passed. Senator Penzo. I do want to announce before he gets down there, if anyone is here, I forgot to do this at the beginning, for a House bill. We will not be hearing House bills tonight. We're going to hear all House bills Monday. So if you're here for a house bill, I just want to make sure everyone's
▶ Play Suggest a correction Report an error
Speaker 35 10:44
aware of that. Can we go in the amendment on the 96 first? Yes.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 10:47
Okay. We go in the amendment. No, the House bill today. Senator Penzo, are you
▶ Play Suggest a correction Report an error
Speaker 52 11:01
starting with SB 96? SB 258 is probably quicker. Okay. And then we can do SB 96. We've got an amendment on that one, too.
▶ Play Suggest a correction Report an error
Speaker 56 11:18
This one's going to be faster than the other one? I believe so. Okay. We'll need to do the amendment
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 11:26
first. Passing out an amendment, so you'll need to present your amendment for adoption. Motion to adopt we have a second got a second there senator pencil I would like for you to discuss the amendment though okay I'll let him introduce himself and
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 11:52
kind of explain the amendment he's worked on it more
▶ Play Suggest a correction Report an error
Josh Bryant Unverified 11:59
than I had so hi my name is Josh Bryant I would appreciate the committee having me back
▶ Play Suggest a correction Report an error
Speaker 68 12:05
I'm from Northwest Arkansas and happy to present the amendment. We're not going to go page by page through the bill again, if that's okay with the committee, but we have worked extensively with multiple parties after presenting Senate
▶ Play Suggest a correction Report an error
Josh Bryant Unverified 12:21
Bill 258 to you several weeks ago. We've worked with the Arkansas Securities Department and FINRA. We've worked with the Attorney General's Office. We've worked with TechNet who was here speaking against the bill last time we were here, worked with the National Insurance Crime Bureau, several others who have come out and said they have concerns of broadband, had some concerns with it and so with the amendment that you have in front of you right now addresses all concerns that we're aware of except for one. The one sticking point is on a 60-day cure period whereby if the Attorney General became aware of of a violation of the law that they
▶ Play Suggest a correction Report an error
Speaker 68 13:01
would have to give notice to the offending business and then they would have 60 days to cure that and then have to
▶ Play Suggest a correction Report an error
Josh Bryant Unverified 13:08
jump through some hoops to show that not only that they have cured the problem but that they've taken steps to make sure that that problem doesn't happen again. When we first drafted this bill and and presented to Senator Penzo it had a 60-day cure period in there and Senator Penzo very wisely said hey if the Attorney General is going to have to enforce this. We want to make sure that they have a chance to look at it before I file it. And in the red lines that came back from the Attorney General's office, they did not want the 60-day cure period. The comments we got on that was that it was an administrative headache to do a 60-day cure period, and that ultimately, if there was a violation of the law and Arkansas consumers were being harmed, the Attorney General wanted the authority to act. And so we removed the 60-day cure period. Now, there are some big tech companies across the country who would like that 60-day cure period reinstated. That is not in the amendment before you, and I think ultimately, from my perspective, the vast majority of Arkansans have decided Tim Griffin is the right person to be in that office. His office does not want the 60-day cure period, and I think that deserves a little bit of deference, but every other concern that has been raised to us regarding, for example, the sale of personal data and how we define that, regarding the lawful basis for processing personal information, not being anything similar to Europe, we've backed all of that out of there. We've made substantial changes. All of the AI stuff is gone. All of the biometric stuff is gone.
▶ Play Suggest a correction Report an error
Speaker 68 14:38
You know, this amendment will give the bill a good 15-page haircut. So with that, I'm happy to answer any questions you might have
▶ Play Suggest a correction Report an error
Josh Bryant Unverified 14:44
about the amendment, and we can go from there. Members, you heard the explanation of the amendment. They've already adopted the amendment. Yeah, we've
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 15:00
already adopted it, so we've heard that. So, Senator, you're free to present your bill now, then. Well, we have people to sign.
▶ Play Suggest a correction Report an error
Speaker 35 15:08
If there's no questions from the members, we
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 15:12
have two people. You got anything else you want to say, Senator? I mean, I think we went into pretty deep detail on this last time, So if there's not any questions, I would just go ahead and close and ask for a good vote. No, we've got someone here to speak foreign against. Oh, we do? Yes. Okay.
▶ Play Suggest a correction Report an error
Speaker 8 15:29
Well, then I'll reserve the... We've got Jennifer McCool speaking far.
▶ Play Suggest a correction Report an error
Speaker 74 15:42
Hello. My name is Jennifer McCool with Northwest Arkansas. I'm a compliance privacy and operations consultant, so I work with businesses on a regular basis for privacy needs. I view data privacy as the cornerstone of modern compliance because data itself is what we need for modern technology. But I started compliance in banking where that's accepted that that data is protected. healthcare data is protected. We need to think beyond that and understand that with the growth of technology comes the need for more and more data and guard rails on how that data is used, how that data is obtained, and that the people have a right to say what happens to that data. I've talked with many software engineering managers, project managers who have said that's my data. No, it's not. It's someone's data and you get the privilege of using that data and I think there's a big distinction. So I think we need something like this on the books and what these states that have already passed this are looking for are those guardrails to protect this information. Thank you. Thank you for that. Is any questions
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 17:03
from the committee saying none thank you we have katie butler katie i know you're an attorney because it
▶ Play Suggest a correction Report an error
Speaker 82 17:24
says that down here so let's keep it short yes sir good evening good to see you all again i am an attorney i represent uh generally small businesses in data privacy and cyber security compliance, smaller businesses than Amazon, Google, Facebook, Apple, those kinds of businesses. My clients often are, they're not concerned with complying with an Arkansas privacy law because we don't have one yet, but they're concerned with complying with the laws of 20-ish other states, and generally they make the decision to provide the same rights to Arkansans that they provide to everybody else. So I represent a base of small to medium-sized businesses that are volunteering to take on privacy compliance obligations on behalf of Arkansans that they currently don't have to. And I just, that is such a strong juxtaposition to some of the companies that have come out in opposition or common offenders of privacy rights and that oppose this bill. So I just want to kind of make the point that there are so many companies that are doing things really well and that are really trying to protect consumers out there. And they are not the companies that are currently being sued by our Attorney General for data mishandling. And in fact, the companies that oppose this bill are the same companies that are currently in litigation with RAG right now. So, I support this bill because it brings Arkansas into the kind of the same, it provides Arkansas, Arkansans with the same rights that many state residents already have. Any questions on the committee? Seeing none, thank you, ma'am. Thank you.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 19:25
Center, you're free to close, and while you're closing, if you'd remind me how many other states are
▶ Play Suggest a correction Report an error
Jess Askew Unverified 19:35
doing this. There are currently 20 states that are currently doing this. Thank you. Thank you. I'll
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 19:41
go ahead and close and ask for a good vote. What is the will of the committee? Motion
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 19:49
do pass. As amended. As amended. Motion do pass as amended. do we have a second have a second by senator bryant all
▶ Play Suggest a correction Report an error
Jess Askew Unverified 20:09
those in favor say aye aye opposed same sign your bill passed thank you committee and uh
▶ Play Suggest a correction Report an error
Speaker 80 20:24
have someone here to come up for senate bill 96 We have another minute on that.
▶ Play Suggest a correction Report an error
Jess Askew Unverified 20:48
Have we adopted this amendment? Have not? Okay. My name is Jess Askew. I'm a lawyer for the city of Highville. I practice here in Little Rock. Thank you. Senator,
▶ Play Suggest a correction Report an error
Speaker 97 21:13
if you would present your amendment. Okay, Chair Rouleau, I'll have him explain the amendment.
▶ Play Suggest a correction Report an error
Jess Askew Unverified 21:19
I'm happy to do that. The original Senate Bill
▶ Play Suggest a correction Report an error
Speaker 99 21:23
96 would have struck much of the 2023 Act 769 that allows a regional airport to detach from a city. And, of course, that's what the issue is between the Northwest Arkansas Regional Airport and the city of Hyattville. The airport is within the city of Hyattville and wishes to detach. So in 2023, there was a bill that was passed that allowed a regional airport to detach. This amendment ratchets down the original bill by simply going at the escrow provision. The escrow provision, as this committee may recall, is something that applies immediately upon the filing of a petition to detach from a city. And on the filing of that petition to detach, the bill as passed two years ago automatically freezes all sales tax revenues collected by the city and requires that they be escrowed to pay bonded indebtedness. The existing bond agreements that the city has for its sales taxes allow the city to collect the sales tax, pay the debt service out of the sales tax, water revenues pay operating depreciation and maintenance expenses, sales tax pays the debt service, and then there's plenty of money left over. and the bondholders have agreed with the city that the city can use that money for any lawful purpose. What this escrow provision does is turn that back around, and it bottles up every nickel of sales tax revenue that the city collects. There was, I mean, there's no process, there's no court hearing, there's no court order. Simply filing the complaint to detach in county court is enough to create this escrow. No city can function like that when a single citizen can file a lawsuit that takes away all sales tax. This amendment would let the city and the airport operate business as usual while they work through the detachment process. It would not take away the detachment process, so the airport could still detach from the city. They just can't bottle up all the escrow sales tax. This amendment would also strike a portion of the statute that prohibited the city from filing a contract impairment lawsuit, which is something that the circuit judge in Benton County has already said he thought is unconstitutional. So this would clean that out, and I think you've got the amendment before you, and I'm happy to speak more specifically to it. But this is vastly different, much
▶ Play Suggest a correction Report an error
Speaker 101 24:31
narrower than the amendment that was originally proposed as Senate Bill 96. Thank you for that explanation of the amendment.
▶ Play Suggest a correction Report an error
Michelle Allgood Unverified 24:45
Any questions on the amendment for the committee? Seeing none, what's the will of the committee? This is just on the amendment. Okay. This is on
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 24:58
the amendment. Motion to adopt. To adopt the amendment. We've got a second. All in favor say aye. Aye. Opposed, same sign. Senator, you're free to present your bill
▶ Play Suggest a correction Report an error
Speaker 99 25:10
as amended. All right. I think it's to me again. I'll be very brief. Two weeks ago, this committee asked Highfill and the airport to meet and come up with an agreement. We thought we did. The agreement that Highfill agreed to was that of the $2 million of sales tax, Highfill would take $900,000 and all the rest would go to pay bond debt, whether the principal and interest on a monthly basis or an escrow that would pay additional monthly or additional principal and interest. When Highfill got the document back, The next morning, the $900,000 had changed to $250,000 because the airport sent back a document that said, you get $900,000, but you have to pay the $650,000 worth of principal and interest on the bonds out of that, and then you can keep what's left, and everything else goes to pay the bonds. And that's not what the deal was. So we are here to try to get this escrow provision taken out of the bill that the airport had, you know, got passed two years ago because that escrow provision is really a, well, it's just a, it's, I hate to be too graphic, but it's like standing on the neck of somebody. this city cannot survive without those sales taxes no city can and I'm not aware of any instance in Arkansas law where the mere filing of a lawsuit means that a city cannot use its sales tax revenues for agreed purposes that are agreed with the bondholders the bondholders have no problem and this is the agreement that the bondholders made so that's it in a nutshell we're trying to get to a point where the city can operate business as usual without this threat of imminent financial catastrophe while we work through the detachment process. Thank you. Any questions from the committee? Senator
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 27:23
Bryant. Thank you. Did you happen to bring copies of the November proposed versus the March 17th proposed? Yes, I think I do. I may
▶ Play Suggest a correction Report an error
Speaker 116 27:31
have to fish around for them in my file here. Just because
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 27:35
I looked at the difference of the two and I didn't see, the things I saw in the March order were exactly as I left that meeting, thinking as they would be. And so when you said they proposed $250,000, I mean the order I saw was they
▶ Play Suggest a correction Report an error
Speaker 101 27:53
proposed $900,000. Yes. 12 payments of $75,000. Paragraph 3 of what was sent
▶ Play Suggest a correction Report an error
Speaker 99 27:58
in March actually says that of the sales tax revenue The first money that comes out pays the principal and interest that's 650,000. So now we're at 900 minus 650
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 28:09
That's the 250. Is that anything different than what
▶ Play Suggest a correction Report an error
Speaker 99 28:13
was proposed in November? Absolutely. Oh You mean in in
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 28:17
November? So they sent one in November for 747,000 right right and then they substitute that for
▶ Play Suggest a correction Report an error
Speaker 100 28:23
900,000 but the city never agreed to that entire framework that XNA Presented in November or
▶ Play Suggest a correction Report an error
Speaker 99 28:28
in March. So the meeting was we don't agree
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 28:30
to it unless the money went up to nine hundred thousand right of the
▶ Play Suggest a correction Report an error
Speaker 99 28:35
two million High field gets nine hundred thousand more than half of it goes to pay the bills either front-end monthly debt service or Escrow at the back end. That's what that's what
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 28:47
the city agreed to. Yeah, so I just want if you have you don't you
▶ Play Suggest a correction Report an error
Speaker 99 28:57
don't have enough copies for members. No I mean, the issue about that November and March document, that was a proposal from XNA that Highfield never agreed to. Would you get that to staff? Sure. I'll have to fish it out.
▶ Play Suggest a correction Report an error
Jess Askew Unverified 29:14
I apologize. While he's digging for that, I know that Josh and I were, Senator Bryant and I were both sitting in the same meeting.
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 29:43
The way I understood it, and I realize we may have understood it differently, was because I asked the question. $900,000 to spend, and the rest goes to pay the bond. And that's how I stated it. And they're like, yeah, it's more complicated than that. There's a waterfall process. But $900,000 will go into the water account. $900,000 will come out. So I'm like, okay. Whatever the mechanism that has to go through, as long as there's $900,000. And it's interesting because we all can still have these conversations and they're like, yeah, that's what's happening. And I'm like, but that's not what's happening because if it's a double-barrel bond and there's money coming in from two revenue streams, they're saying that there's state law that says that it has to all be, the water system has to pay for the water system. And this is, I mean, he can maybe elaborate more on that, but my understanding was $900,000 went in the water account, $900,000 can come out to be used for lawful, I forget how it's worded exactly. Municipal purposes. Lawful municipal purposes. So my understanding was they had $900,000 to operate the city. The rest of the $1 million plus would go to paying off the bond debt service and accelerate the bond payoff. Um, that's how I took it. Now, and, but if we have this conversation, everybody agrees that's what was said, but the, the framework of what happens in that waterfall system, uh, gives two different outcomes based on my understanding and, and other people in the room's understanding. So, I, I see how, at first
▶ Play Suggest a correction Report an error
Jess Askew Unverified 31:42
I couldn't understand why we are all saying the same thing, agreeing, hey, this is great, this was, this was way too easy. And, you know, if it's too good to be true, a lot of times it is too good to be true.
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 31:59
So, but, you know, maybe I misunderstood, maybe they misunderstood, but I guess it's just, it's an unfortunate situation because my understanding was, and even Senator Hester was quoted on 4029 state, and they had $900,000 to spend as, you know, on the city. And the rest went to paid bond payments. So I don't even think he understood the ins and outs, and I'm not really sure who he talked to to get that information when he was, you know, speaking to 4029 on it.
▶ Play Suggest a correction Report an error
Jess Askew Unverified 32:34
But if there's any questions, I'd be happy to explain more.
▶ Play Suggest a correction Report an error
Speaker 99 32:41
And if I may, the senator mentioned a double-barrel bond. This is a bond that's based on water, sewer, sales tax, and general revenues. The revenues that have come in are water, and of course sewer is part of the water bill, and sales tax. The water system revenues pay for operating, maintaining, and depreciation on the water system. The debt service of principal and interest on the bonds is paid by either the water revenues or the sales taxes, and the city has historically used the sales tax revenues because it did not have enough water revenues to pay the debt service, and the bond documents give the city
▶ Play Suggest a correction Report an error
Speaker 132 33:27
that option. I apologize, Senator Bryan. I saw you
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 33:33
hit the button. No, I don't know, maybe wait for those documents, but I guess the question that I'll i'll propose is we passed uh i think it's act 605 2021 that dealt with water rate studies and if you're going to pull a water rate study and add in the debt service into that study to come up with your water rate is that is that something that heifel did to get the water rates where they were I've been and if they did and that revenue coming in on those water rates if I am a rate payer would be dictated that they're going to go to pay for the purposes of which the rates are the way they are and so if you're saying they're gonna have a revenue that pays for operations maintenance and all things that go around a water but the rate study says oh in addition to that also got X amount of millions of dollars out and so I need to average that out and bring my water rates up but then I'm going to take a million dollars and I'm going to pigeonhole it over here in surplus but then I'm going to take this money and plug the hole I mean that's
▶ Play Suggest a correction Report an error
Speaker 99 34:45
I don't think that's what the law intended I don't think that's what the rate study intended well and that's not what Highfield does and these bonds pre-exist that statute I believe you're on our senator these were refund bonds in 2018 and 2021 and the original bonds predated that. And as I say, they weren't just water bonds. They were sales tax bonds. And the bond agreements allow the city to use its discretion to pull money out of sales tax or water or either, not for all operating expenses, but just for the debt service. And so that's, that's the disconnect. This is not simply a water bond. Well, yeah, and I'm not talking about the bond. Forget
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 35:26
the bond. If I'm talking about a water rate study yes and to that regardless of when the bonds were were acquired if i'm talking about a water rate study and i said it's cost this much for trucks men and equipment maintenance and a bond and i consumed 400 or 4 million gallons a month and i'm going to make this rates and now it's eight cents a gallon or whatever you know not that much but 3.8 cents a gallon like that that money it's not a water system is not designed to make a profit yes so if there's a profit held over because the rates had the bond in it then the water rate should be
▶ Play Suggest a correction Report an error
Speaker 114 36:13
paying the bond yes and I don't I can't speak directly to that it's
▶ Play Suggest a correction Report an error
Speaker 99 36:18
my understanding from the city that the city's water rates have been reviewed under the 2021 Act and they had comply with the 2021 Act and I would suggest that maybe the idea that the bond debt service is part of should be part of the water rates is not accurate because the bonds are written on sales tax in addition to water. But we don't. But I'm out of my
▶ Play Suggest a correction Report an error
Speaker 132 36:45
depth at that point. I litigate constitutional questions. I don't do water bonds. Any other
▶ Play Suggest a correction Report an error
Speaker 140 36:54
questions for committee? And after that
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 37:01
exchange right there you can probably understand why I walked out of the meeting not understanding what XNA was intending by the waterfall and the complications of the bonds and things like that it was just stated 900 000 would go to the city the rest of it go to paid bond payments and i took that as you know the bond payment would also include the debt service
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 37:32
and members what was just passed out is uh what senator bryant was asking about the very start and
▶ Play Suggest a correction Report an error
Speaker 38 37:38
then the attorney would like to elaborate a little bit on this the first the first handout was march and the second handout is november of 24th okay
▶ Play Suggest a correction Report an error
Speaker 99 37:50
and uh page three paragraph three of that handout this is where the 900 000 shrinks to 250 000. paragraph three says the city will get 900 000 annually 75 000 a month and first it has to pay the debt service principle and interest that's the that's paragraph 3a and then the remainder in paragraph b if any shall be used for any lawful municipal purpose the city walked out of the meeting Monday two weeks ago thinking that the city got nine hundred thousand dollars and everything else went to debt service this means that the city gets two hundred and fifty thousand dollars and everything else goes to debt service. And that's just not something that the city can work with. Now it gets $2 million in sales tax revenues. So, and I'm not here to try to negotiate an agreement or anything like that. The purpose of the amendment is simply to allow business as usual so the parties can work through this detachment process and try to resolve it. At the end of the day, the detachment statute as it exists doesn't really say that absent an agreement by the city that the city loses a nickel in sales tax. It's only this escrow provision that kicks in at the beginning of a lawsuit without any process that says that the city can't use its sales taxes for anything but bond payments, escrow for the bonds. And that's taken a city that's using sales taxes for normal operations and making it hit a brick wall. Thank you. Any other questions?
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 39:45
Seeing none. Thank you for your testimony there. We're going to speak far and against. We're going to start with the against with Andrew Branch. x and a please identify yourself for the record
▶ Play Suggest a correction Report an error
Speaker 144 40:04
yes sir andrew branch coo x and a thank you mr chair um this has been a long
▶ Play Suggest a correction Report an error
Speaker 145 40:09
process i don't want to take a lot of everybody's time uh we're opposed we're opposed to the amendment the amendment effectively if we if we understand it and our our council has explained it to us i'm sure they understand it uh would allow them to continue issuing new debt and it would extend the sales tax forever. I think that the the bill that was passed in 2023 was effectively a tax cut for the citizens of northwest Arkansas and passing this amendment would be extending or delaying this tax for however many years it's effectively a tax increase on the citizens of northwest Arkansas and so we remain opposed to it. Happy to answer any
▶ Play Suggest a correction Report an error
Speaker 38 40:50
questions. Pleasure of the committee. Senator Bryant. Can
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 40:55
you tell me when when XNA issued the November until they handed out March? Whenever they handed out November did they send it back with any type of counter offer or counter asks or?
▶ Play Suggest a correction Report an error
Speaker 145 41:10
There was a there was a counter offer I believe for $1.3 million. So we offered $746,000. They countered with $1.3 million. We agreed to the $900,000 in the meeting. I'll give everybody the benefit of the doubt that maybe the way the waterfall and municipal finance works is not the easiest thing. But ultimately, as you pointed out, if they comply with the 2021 law, they are charging the water customers for the debt service on the bonds. So that money is in the water fund. So when you put the $900,000 in to pay the bond payments, yes, you're right, you have $250,000, but you've also freed up the $650,000 approximately that have been collected from water customers, of which XNA is one, all that money becomes kicked out. So effectively, you'd have $900,000 roughly available for any lawful purpose. The balance of the money per the agreement would go to retiring the debt. But it's basically you're charging the water customers for the debt payment, not using the money for that, then also taking the sales tax and using it for that. It's effectively taking the $900,000 to $1.5 million. Until two years ago, the city never saw that kind of sales tax revenue. And again, we're able to account for roughly $1.85 million of the $2 million last year collected, was collected by businesses at the airport that the the city doesn't support or
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 42:38
provide any infrastructure for. Do you know, do you know in your research and your dealings, if the, because you're a rate payer. Yes, sir. Do you know if your rates that you pay Hypo, whether in or out, I guess you'd be still considered in, in the limits for in-rate water, in-city water rates? Would we, are we paying that now? Yes. Yes, I believe we are. Do you know if your rate
▶ Play Suggest a correction Report an error
Speaker 145 43:06
includes the bond payment? So I would assume, as everybody else in Arkansas does, that the water systems are complying with state law, and the state law requires that. And I believe, I wasn't sure exactly from the answers, but I believe they said it should. Certainly, an illustrious member of the General Assembly sponsored that bill in 2021. It requires the debt service be in the rate base. So I'm assuming we're paying it. There is a, I believe the last couple of years, the water system did show a positive cash flow. So I'm
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 43:38
assuming they're collecting everything. Okay. And I guess maybe a question for you, and he might be able to respond. But do you know if there is an active bond with additional revenue, you know, double-barreled paying it, would the rate study still require the full amount of the bond to be presented within the water rate study? Are you asking if
▶ Play Suggest a correction Report an error
Speaker 145 44:00
they if they're required to have the full amount of the bond in the rate study? I believe so. I would defer to Senator Love, but I believe that was the intent of the legislation. Senator
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 44:32
Love. you have a question okay i thought you did any other questions seeing none thank you sir thank you mr chair and now we're going to go to jess jess ask you speaking for the bill oh no there you are okay uh chris holland speaking far Thank you, Kim, for letting us be heard
▶ Play Suggest a correction Report an error
Speaker 163 45:00
again today. To answer some of your questions, there's Senator Bryant. We did have a rate study done by, what was his name, Dustin?
▶ Play Suggest a correction Report an error
Speaker 165 45:14
Had a rate study done that was per law. Mr. Kopke was the one that had done our rate study. So we're following that. We get audited every year on our water system, and we pass all the audits. We're not violating any state law there on any water audits. Like I said, we're following all state laws on the water study with the bonds of how they're wrote. Because when Haifel's water system, when we bought it back in the early 2000s, we only had like 13 customers. So the water system couldn't pay for itself. You know, that's the reason our bonds are set up the way they are. You know, so it takes water and sewer and also the sales tax to pay for all the water and sewer bonds. You know, so that's why when I was here a couple weeks ago, the whole time we've been asking for more time. You know, the city will grow and the city is growing right now. But the problem is if you shut everything off, then we won't be able to grow. Our city will just eventually just die. You know, we don't have no sales tax to be able to go out and get new loans for water. And we're not asking to extend the bonds or anything of that nature, like just got said. The airport passed this in 23, and they're stated it's business as normal, business as usual for the next 14 years. 2036-37 is when our bonds are paid for, and that's all we're asking, is just give us that time and in that time we will be able to grow be able to to to get the income the more businesses the more citizens into our town to be able to absorb the sales tax that we're going to lose that's all we're asking for airport we're not asking them to stay this our amendment isn't changing that at all they can still de-annex out they can leave and do whatever they want to do all we're asking is just hold them to their word that they pass this saying in 2023. Thank you.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 47:16
Any questions for the committee? Senator Brack. Yes, I just want to
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 47:26
make sure, to your knowledge, your water rate study encompassed the entirety of the bonds, the two different bonds, 2018 and 2021 bonds that you have acquired. You've placed that in water rate study to get your water rates to come in. Yes, to my knowledge,
▶ Play Suggest a correction Report an error
Speaker 169 47:44
yes, because I remember Mr. Coffey talking about if this escrow takes effect, we're going to have to come in and redo our rate study because
▶ Play Suggest a correction Report an error
Speaker 165 47:53
the rates will skyrocket at that point in time. You know, so in order for the system to survive, the rates will have to go up high, to my knowledge. Now, I wish, I mean, i'm not as uh versed on it as you are you seem like you're you're you're up on your so
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 48:12
but if you're if your water rates have the bonds in it to cover the the payment plus your maintenance and your overhead why
▶ Play Suggest a correction Report an error
Speaker 173 48:20
would they have to go up so it goes back to our system is still little
▶ Play Suggest a correction Report an error
Speaker 165 48:26
and like i said we're growing and our system will take care of itself eventually but right now we're just not at a good place that's all I'm asking for is just more time I know you I know you're you're fixed I mean Rogers Bentonville Lowell Solomon Springs Centerton they've all been established Gentry Heifel has just barely had its water system for 20 years you know so we're still growing we only started growing in 2023 roughly that's when we basically had our first subdivision come in you know our population was 500 some odd people and that's all rural area you know but now we're $3,500, $3,000, somewhere in there. Don't hold me to it, but that's all I'm saying is what you're saying, yes, but we have to grow, and we just need time to grow. And by taking escrow out, it'll give us that time. We're not asking to keep X and A
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 49:23
in. We just need time. Do you charge impact fees for new customers
▶ Play Suggest a correction Report an error
Speaker 165 49:27
growing in? We're having a study done by Tischler-Bias at this moment in time to to uh research that yes and then
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 49:35
yes the last question do you know what your fund balance is in your in your do you keep your water system separate than your your books do you know what your what your fund balance is what it was like savings or yeah so your operating expenses and your and your general revenue do you know from revenue minus expenses what's
▶ Play Suggest a correction Report an error
Speaker 169 49:52
your no off the top of my head i
▶ Play Suggest a correction Report an error
Speaker 165 49:55
would i wouldn't be able to tell you the truth on that senator bryant uh but it's on our website you can easily look on it i mean i know what we got in our savings and and stuff, because we had to go in, when we left here in 2023, we have water and sewer tap fees, so in order to get some of these projects done, we had an 18-inch sewer line that needed to go in up north of our city, so in order to afford, because if you remember when I told you guys last week that we went to try to get a loan, and they just denied us on the loan, so we had to think outside the box, and we went and got, we talked to developers and we've done a if a developer went in and bought 50 taps at one time they would get a discounted rate on them taps so in order for us to build that fund up to be able to do the project up north so we've got I think 1.5 million dollars in there but that money is earmarked to pay for a water lift station upgrade that we're having engineered
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 51:00
at this time for love now this is where it's not kicking itself but you because you are charging well I would say this you're adding customers so therefore you're charging connection fees different things like that which is generating revenue yes sir to me I mean to have an overage is not a big thing because you have to have deferred maintenance built into your water system but you also have a sewer system yes sir okay and in you have you had a rate study done on that yes sir okay am I
▶ Play Suggest a correction Report an error
Speaker 185 51:32
correct we have water and sewers both had rate study correct yes
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 51:35
sir okay and so you're collecting your deferred maintenance on that as well yes sir and at this point in time do you keep your deferred maintenance separate from your other water fund or is it all together at this time it's all
▶ Play Suggest a correction Report an error
Speaker 191 51:59
together sir I mean it's just it's just one account now we do have a yeah he's
▶ Play Suggest a correction Report an error
Speaker 165 52:08
He's our water and sewer operator. It's Dustin Carl. He can answer some because we do have
▶ Play Suggest a correction Report an error
Speaker 177 52:12
an account that's a maintenance account that so much a percentage of the money goes in this maintenance account. Please introduce yourself for the record.
▶ Play Suggest a correction Report an error
Speaker 193 52:21
Dustin Carl, Public Works Director for the City of Highfield. Senator Bryant, the rate study was done, but it was done according to the way the bonds were written. The bonds were written that the tax revenue on top of the water revenue would pay for the bonds. so that's where you're seeing the disconnect is when the rate study was completed he was taking into account that the excess tax revenue would also be paying for those bond payments and that still put us at a one to one or 1.1 ratio of debt to coverage so the rate study was done lawfully but it wasn't taken into just effect of just the water and sewer paying for those bonds it was taken into effect that we could use the excess tax revenue, as lawfully stated in the bond documents, to make those bond payments. So without that in there, the recommendation was that we would have to raise our rates close to 75% to our rate users. With the tax revenue in there, we only had to raise over the next five years 3% and pass that on to our ratepayers. Okay, so what you're saying is
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 53:26
your system is not producing enough money without the sales tax. It's not producing enough money because you don't have enough connections. So you're not producing enough money to actually pay for the bonds themselves. And so with the sales tax revenue plus what you get from your regular water rates, you can pay for it. Correct. That's what you're saying. I got it
▶ Play Suggest a correction Report an error
Speaker 193 53:49
now. Okay. Because the way the bonds were written and the way Jerry Kopke looked at the rate study was that any excess tax revenue can be used for bond repayment and satisfying you know the needs of the department I got you okay we can
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 54:08
discuss interact just just to add in there you didn't pick an arbitrary number do you know what number the rate study was given as far as how much money needed to be used out of water revenue before they went
▶ Play Suggest a correction Report an error
Speaker 193 54:21
into the sales tax revenue I don't think that was a requirement of act 605 i think the act 605 was to make sure that we had a 1.1 coverage ratio and that was looked at according to the bond documents of the the water and sewer revenue
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 54:35
plus the sales tax i'll ask it again do you know out of your expense category how much of your expenses are paid to service debt i do not know So you key in every month to pay,
▶ Play Suggest a correction Report an error
Speaker 192 54:52
to pay, to pay, to pay. I think we had to move the debt, the bond, out of the water and sewer accounts, correct? Did we move that?
▶ Play Suggest a correction Report an error
Speaker 174 55:02
So the water and sewer used to pay the bonds, but also the sales tax had to help pay the
▶ Play Suggest a correction Report an error
Speaker 165 55:08
water and sewer, because the water and sewer is not big enough yet to pay everything. So the water and sewer, I think we had to shove in about $400,000 a year just into water and sewer to break it even, you
▶ Play Suggest a correction Report an error
Speaker 169 55:21
know, after it paid the bonds. So with this new bill, we had to open up another account, and we started
▶ Play Suggest a correction Report an error
Speaker 165 55:29
paying the bonds out of just the sales tax only. So now the water department is standing there, but it's not completely self-sufficient. That's why I keep on going back, because all we're asking for is just time. That's, I mean, that's, I mean, eventually we will be big enough to stand on our own two feet, but right now we're, we're, we're still trying to get our legs
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 55:54
underneath us. I'll tell you. Can I? Go ahead. So the reason why the bill was written like that is because of the, because, because cities were not keeping enough deferred maintenance. And so I think you, I think you hear what he's saying is that This system was just not big enough to support itself, so with the sales tax revenue, it's now, and you can support yourself with the sales tax revenue, but with 605, we had them separate all that because they deferred maintenance was what cities kept coming back to the state for, and they weren't raising their rates, and when they weren't raising their rates, they were saying, hey, but the state can come and pay for it, and we were like, no. You have to raise your rates before the state will come and pay for it so that the cities would take on some of that. So I understand exactly what you're
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 56:48
saying. Thank you, sir. Thank you. Dr. Bryan? I'll ask just on your general overall city budget. We passed 2023. You need more time, but there's plenty of time to take abrasive action. What action has HIFO been able to start to shed loads of, if not just in the water system, because you want to grow it to ensure that you get good growth in the city? Is there any
▶ Play Suggest a correction Report an error
Speaker 165 57:16
actions that have been taken to reduce? Yes, there has. So when I took over office from the previous administration, I think our reserve and our whole budget was nothing. I mean, that administration probably was spent every dime we had. As of right now, I think our reserve is like $650,000. I'm a very conservative person. so my goal when you got when we left here in 23 you told us to go back start getting businesses start preparing your budget for this that's uh for this detachment that's going to happen in 14 years roughly at the time so that's exactly what we did we went back we've already explained you know we got a mexican restaurant we got a dollar store we got a brewery uh we got a sonic coming we've got all these other things coming but also at the same time you know our city is growing like i've said our property taxes went up so we we've i've started i've started having that cushion so right now two years into it i think it's pretty good that we got like a 650 000 cushion you know that money that's that's not spent on anything that's there to prepare us for this big sales tax drop-off so my goal is to if the airport says they're providing us 1.8 million dollars and we can't get accurate numbers from DF&A about it, then my goal is to, by the time this ends, to have $1.8 million in reserve. That's not earmarked and spent for nothing. That way, when the detachment, when everything ends, then it's business as normal, like we got promised in 2023.
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 58:50
Questions? I just there's a comment made by X&A that the recent influx of sales tax at there that overall that's been pulled in or any X&A's or I'm sorry Hyphel's tax code is is way increased than what what it's been statistically probably prior to COVID he made a mention that it's statistically been closer to maybe the nine hundred thousand million dollar but it's gradually gone up the last couple three years because of i don't remember what the reason was but so two years ago three years ago when you were absorbing 900 000 a million dollars what was the difference like if you if you have if you have that if you had that then and the sales tax is going up but you have that you still have at least that what's what's the difference in balance between not being able to pay for the services you need does that make sense oh can you read so i'll say 2021 if the if the entirety of the tax base of sales tax was a million dollars and nothing's changed you've already had your bonds out and you're doing what you do and then 22 goes up to 1.2 23 the fall the fallout x and a is going to detach but sales tax is going up what's the difference between now that you see there's two million but two three years ago it was one million like where where is why can't you make what the offer was work now based on making it work three years ago i think in 23 the our sales
▶ Play Suggest a correction Report an error
Speaker 165 1:00:31
tax don't quote me 100 on this is either between 1.6 million and 1.7 million that we we received for the total city year it was 2.65 or 2.85 last year in 24 i don't quote me once again I'm roughly, I'm close there, I do believe. In COVID, we figured on the three months that airport didn't have any passengers whatsoever, if you take them numbers, we're looking at about $227,000 that the city is supplying its own sales tax. We didn't have a dollar store. Only thing we had then in Haifel was 500 residents and a gas station. That's it. Now we've got roughly 3,000, 3,500 residents. We've got a brewery. We've got a Mexican restaurant. We've got a Dollar General store. We've got more business. But the point I'm getting to is our city sales tax isn't still $227,000. You know, I think our city sales tax is up higher than that. But I don't know that because we've tried to get DF&A to give us just, and we didn't ask them for specific. We just said, hey, give us, here's the businesses on the airport, just give us the numbers. Because if we had them numbers, then I could intelligently tell you a lot easier, hey, I could give you a time frame of maybe when this could all take place. But without them numbers, I can't, I'm just guessing in the dark. So our property taxes went up because we're adding more residents. You know, you got the point of delivery sale. So when citizens order Amazon, and trust me, my wife orders a lot of that, so I think that's a big majority of our sales tax in Haifel, is, you know, so we've seen an increase. As our populations went up, so is our sales tax.
▶ Play Suggest a correction Report an error
Speaker 177 1:02:22
And we, you know, a bunch of it is from the airport. We don't think all
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:02:37
of it's from the airport, but we don't know that answer. Andrew Love. I think Senator Bryan just prompted this question for me. So if you let $900,000 from your sales tax revenue flow into the water, you pay the bonds out, you get a difference of $250,000. So I guess the agreement is $900,000 of sales tax revenue flows into, I guess, this pot of money. And then you pay, you said there's $650,000 that you collect through your water rates. I guess what I'm trying to figure out is the agreement that it's $900,000 plus the $650,000 that you collect, I guess whatever amount that you collect in your water, or is it just $900,000 total? And that includes the bond. The bonds have to come out of that. So, I mean, if the water money is separate from your sales tax money, I'm trying to figure out what the agreement is. Are you talking about the agreement that we tried to come to
▶ Play Suggest a correction Report an error
Speaker 169 1:03:57
on Monday? Yeah, I'm trying to figure out what the agreement
▶ Play Suggest a correction Report an error
Speaker 216 1:04:02
is. And I specifically asked the question, it's our bonds
▶ Play Suggest a correction Report an error
Speaker 169 1:04:05
being paid, and then we get $900,000 on top of that. And yes, that's what Senator Penzo heard, that's what Senator Hester heard, that he got quoted in the news about. And I specifically asked also, I said, if you're talking about paying the bonds out of the $900,000, that don't leave us very much money. I can't physically, financially do that at this
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:04:32
time. But is your water revenue going into this same account? into the city sales tax. Yeah, because I, I, yeah, so. It's separate. So if you have the separate, I guess, $650,000, right? And then it's not $100,000. I guess, I guess I just need to, I just need to figure out if that's the agreement that you all have, because that's the question that I have. I think that's, you know, in regards to, in regards to this, this whole X&A. for agreement
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:05:11
Think that's the that's the question. I am. Oh, yeah, so what
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:05:18
was your question in that? That's the question is because they're saying we talked about the agreement right and the agreement is We talked about this water revenue that they're raising and I'm just trying to figure out is a $900,000 that total sum of the agreement which they have to pay the debt service with or is it or is do they have water revenue, they're collecting water revenue separately and then having the $900,000 flowing to that? That's the question. The
▶ Play Suggest a correction Report an error
Speaker 176 1:05:48
agreement that the city council passed on that night or on Tuesday was the bonds would be paid, the waterfall and everything would be
▶ Play Suggest a correction Report an error
Speaker 169 1:05:56
paid, and then the city would receive $900,000 on top of all that. That was the agreement. I've got the resolution. That was the agreement the city council passed. That was the agreement that I thought we left the room down there with the agreement on. And then when XNA sent the paperwork to us, the $900,000 would pay all the bonds and all the
▶ Play Suggest a correction Report an error
Speaker 165 1:06:20
stuff out of there, and then we would, if any, would receive what's left. So both sides passed a different
▶ Play Suggest a correction Report an error
Speaker 169 1:06:29
agreement. Okay. All right. Thank you. Thank you. Any other
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:06:36
questions? Seeing none, thank you, sir. Thank you. Thank you, guys.
▶ Play Suggest a correction Report an error
Speaker 111 1:06:44
Going against now, we have Michelle Allgood. Please introduce yourself
▶ Play Suggest a correction Report an error
Speaker 230 1:07:02
for the record. So my name is Michelle Allgood. I'm an attorney with Mitchell-Williams Law
▶ Play Suggest a correction Report an error
Speaker 231 1:07:07
Firm. and our law firm was engaged to assist XNA with the legislation and the process. I am a municipal finance attorney. Most of you don't know what that is, but we carry around books like this that have a lot of paper in them, and it's a long process for issuing bonds. So when we were engaged by XNA, one of the questions or one of the first things that we were asked was, how do we detach without impairing the bond issues? Because when you detach, there would be a decrease potentially in the sales tax. We knew that the sales tax was part of the pledge for the existing bonds. So the legislation was drafted to avoid default and to avoid an impairment on the bonds. So one of the things, I have a lot of things I want to share about my paper, but one of the first things I would like you to do is to look at the amendment that has been proposed. And if you look at some of the language on the second page, Part B, so about the middle of the page right before Section 2, So what it says is that after the petition for detachment has been filed, the municipality, as permitted by the documents relating to the debt obligations, shall use or escrow all pledged taxes and revenues to pay off or prepay the debt obligations and shall not use the pledged taxes and revenues for any other purpose. So saying that we need to delete that language in order to keep the status quo is not how I interpret the law, because the law right now says that you should use the money to pay the bonds as the documents require. The bond documents currently require that you use your water revenues, which are not impacted by detachment in any way and to use your sales tax revenues to pay only the debt service on the bonds so what this the legislation unamended permits the use of the sales tax to pay the debt service on the bonds so this legislation is not needed this amendment is not needed to keep the status quo with regard to the use of the sales tax in connection with the payment of the debt service of the bonds part a of this the intent there with that language is to maintain the status quo while the detachment process is working its way you've seen the legislation it is a pretty detailed process it doesn't happen overnight and this prevents the issuance of additional bonds or the refunding of bonds that would essentially extend the sales tax forever it allows there to maintain the status quo work out the the details of the detachment and then move forward so i'm against the amendment um there has been questions one of the things i want to address and i share the frustration of the mayor in this regard some of the numbers are really hard to come by so back in 2023 whenever this legislation was originally intended the information that was available was a 2021 audit for the city of hyphal that is still the most current audit that is available for the city of hyphal some of the other information that we have looked at that is available so in connection with the outstanding bonds federal securities law requires the city of hyphal to file an annual report each year that identifies information with respect to the bonds. And the city of Haifel has done that. The most recent filing was in June of 2024. And it identifies the amount of sales tax that has been received for the last five years from the city. So the most recent year that is in this, and I don't know if we want to share this, but I have a copy of that report. And then there is an older report that goes all way back to 2012 to show what the sales tax revenues were so the math says senator love one of your your points the math the amount of sales tax only in recent years is a higher level so in 2021, it was $689,000. In 2020, it was $405,000. In 2019, it was $746,000. It was lower numbers generally in the years prior to that. So if the debt service is $650,000 and they're using their sales tax to pay that, then for example in 2021 when there was only $689,000, that would only mean an excess of $39,000 in sales tax. So there is obviously some money that is coming from the water revenue in order to satisfy their debt obligations. In looking at the financial information, there are water audits the most recent water audit that is available is from 2023 and if you look at the transfers in which it's been a minute since i had an accounting class but the transfers in to the water system are about 400,000 that's not exact but it's not it doesn't look like from the audits that are available on legislative audit that the entirety of the debt service is being paid from sales tax. I'm going to interrupt you for a second because we've
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:13:59
got a lot of stuff to do tonight still. Is there anything else you want to tell us besides just throwing numbers out to us? Because without me looking at them, and I'm
▶ Play Suggest a correction Report an error
Speaker 235 1:14:11
a banker, you're just throwing numbers out to me.
▶ Play Suggest a correction Report an error
Speaker 231 1:14:14
And I'm happy to provide the copies if that's what we need. But that's one of the points that I want to make is that I agree with Senator Love. There is money that should be flowing through the buckets and out of the water revenues. And you're accurate in saying that the difference is that Highfield wants $1.5 million because they want that amount available and what XNA is proposing is $900,000. And if we look back at the numbers, which I understand you don't have in front of you, but I can provide copies of what we have. Yes, we're not going to do that tonight. Then the $900,000 appears to be more than what has been available previously. Thank you. Any questions from the committee?
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:15:07
so are you are you saying that that the proposed agreement
▶ Play Suggest a correction Report an error
Speaker 231 1:15:19
is $900,000 in sales tax revenue so the proposed agreement from because I did work draft or assisted with the agreed order it's not quite that simple because you have to follow the bond documents we have to follow the law it starts with $900,000 that would be used first to pay the debt service. So $650,000 would pay debt service, which, to your point, should free up $650,000 of water revenue. So after all the buckets overflow, there's $900,000 that is a mix of sales tax revenue and water revenue. Okay, all right. So, all right, so
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:15:58
I have a short. Okay, thank you. So that is
▶ Play Suggest a correction Report an error
Speaker 231 1:16:03
the proposal from XNA is it's a mix, 900,000 at the bottom of the waterfall. And what Haifel wants or what they proposed was 1.5 million. I don't know if it's a mix or not, but at the bottom of the waterfall, they want 1.5 million and XNA has proposed 900.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:16:26
Any other questions? Seeing none, thank you. John Baker with Mitchell Williams as well. Are you going to say anything different than
▶ Play Suggest a correction Report an error
Speaker 239 1:16:42
your counterpart did? All means, sir. I have
▶ Play Suggest a correction Report an error
Speaker 240 1:16:46
something different to say. Okay, well, you've got two minutes. Thank you. I'm John Baker. I'm an attorney for XNA. I've been defending them in a lawsuit for the last 17 months that was filed against them by the city of Highfield over your legislation you passed in 2020. 23. They won in their lawsuit. They wanted a court to invalidate this language here on the top of the second page of this amendment, and the court refused. The trial court heard evidence about why this case or this language was unconstitutional, and the trial court rejected it, and then it did more than that. It said that the city had not proven that this statute and the filing and the locking up of the money for the bondholder's benefit was going to be some sort of irreparable harm to the city. The court said you didn't prove that. The court said and received evidence that the city has other levers besides sales tax to raise revenue for their needs, and they haven't done that. Senator, you mentioned development impact fees. This city of Haifel has never adopted them. Every other city around them has them. And they've got all these lots that they are dreaming and saying that are coming online. They don't even have development impact fees that feed their city like all of their other sister cities have. And the court noted that. And this idea, they haven't raised their franchise fees since like the Reagan years. The court noted you have other levers as a city to raise revenue if you need it. If this revenue, the sales tax revenue is locked up for the bondholders to protect them, it's not end of days. You have other options. And that's what he ruled. And Senator Johnson, you mentioned it last hearing. What we're really being asked to do is second guess what a judge has already ruled on. And this legislation has been upheld. They lost at the circuit court. They lost at the Supreme Court. And now they want you to come in here and save them again. When the judge has already made it clear, they have other means to save themselves. This is not some financial calamity that's coming their way. I mean, this was after days of evidence. So that's all I want to say. That whole premise of this thing is wrong. Thank
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:19:02
you. What did you say? We may have some questions for you.
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:19:10
Oh, I'm sorry. I'm trying to speed up. Senator Johnson. Thank you, Mr. Chairman. Counselor, I appreciate your being concise. And I feel for the situation. appreciate the mayor and I know he's a relatively new mayor that's trying to clean us up and all that but we're not a circuit court and we're not the Supreme Court we passed a law and you the city and the airport are trying to work things out within that and that's my dad who was on the Supreme Court once said this is why they build courthouses that's not what the capitals for we're not here to work on this. Would you
▶ Play Suggest a correction Report an error
Speaker 244 1:19:48
agree? Yeah, I do. And, you know, when the judge has looked at it and said, look,
▶ Play Suggest a correction Report an error
Speaker 240 1:19:54
this law is constitutional. Supreme Court held the same way. And the court said, you guys can figure out other ways to raise revenue if we have to protect the bondholders and lock up some money for just a few years until those bonds are paid off. This isn't forever. This is a locking up of the money for the bondholder protection only until all of those deaths are paid off, which most estimates are four to six years max. So the city can either cut expenses, this is what the judge said, raise alternate revenues to get through this impasse. It's not end of days, and that's what the judge held. And so this idea that, I mean, every other, think about this, every other city in northwest Arkansas, nobody has this sort of largesse of tax money that comes from this huge economic engine that's X and A. And you know what? Every one of those towns survives. Every one of those towns has a budget that works. Every one of those towns provides services and keeps their employees employed. How is it that Highfield cannot live, supposedly, if it loses this money for a few years? Of course they can live, and that's the reality of it. Now, yeah, they're going to have to make some changes. The circuit court said that, But this is not end of days, and I think they've lost in court, and now they want you to come in at the end and try to repeal your legislation. You just passed it two years ago to save them from something that is imminently solvable by themselves doing it. Thank you.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:21:23
Thank you. Senator Love? No. Thank you, sir. Thank you. And we have Ryan Burke speaking against Thank you sir, Senator Penzo Before we go to you, I'm gonna make sure is there anyone else that
▶ Play Suggest a correction Report an error
Jess Askew Unverified 1:22:00
did not sign up that wants to speak or against Say none Senator. Thank you. I made a few notes on my phone here while we were waiting. I didn't have a pen handy, but you're right. We're not a court, but we created this mess two years ago. We passed legislation that said if this detachment was filed, 100% of their tax revenue had to go into escrow. Now that, I don't know if y'all realized if you voted for that bill that that's what we were doing. Which gives 100% of the leverage to X&A. Someone came down and said, oh, this is a tax cut for citizens. And they can raise impact fees and they can raise this right here this right here to offset it. Well, how's that a tax cut? We're shifting revenue stream from people coming in and out
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 1:23:00
of state that are coming to Walmart and spending money in northwest Arkansas. That's where that tax revenue is coming now. Now we want to shift it to the residents of
▶ Play Suggest a correction Report an error
Jess Askew Unverified 1:23:11
Haifel. That kind of upset me that they're trying to pitch this as a
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 1:23:17
tax cut for citizens in northwest Arkansas and then say that we're going to raise fees on Arkansans when most of those tax fees are probably coming from people out of state that are visiting the businesses
▶ Play Suggest a correction Report an error
Jess Askew Unverified 1:23:31
in northwest Arkansas. We all probably have different ideas on how Heifel should run their business and we we affected that two years ago with a piece of legislation. X&A board members have an idea, the Heifel mayor, city council all have a different idea. Everybody around this table has an idea of how they probably should run things. The judge has an idea. We can discuss double barrel bonds, waterfalls, need improvements, deferred maintenance, reserves, audits, offers, counter-offers. Let's not conflate what's being discussed here. This amendment is about getting rid of the escrow portion of this contract that says they have to put 100% of their tax revenue into escrow. a normal detachment would be business as usual till the bonds are paid off that's how it would be if we hadn't have muddied the water two years ago that's why I think that eliminating that portion of this you know we're not we're not arguing about this offer that offer I sat down with the two attorneys thinking hey maybe we can get somewhere with this I just want the two attorneys we're going we're going to sit down talk about the bond see if we can come to something they both had different ideas of if it goes to litigation how it's going to come out there's different ideas of the bonds like I said everybody's got an opinion here but all i'm asking is to undo the the part of the legislation we passed two years ago if they want to detach let them detach but to undo the portion of the bill that gives a hundred percent of the leverage to the airport and the city is just asked to comply we did that that's not how it would normally work in a detachment situation and there's a lot of
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 1:25:40
history here that took place and a lot of hurt feelings but I like people on both sides I've got friends on that X&A board and I've got friends at the city of Heifel and and I've got a lot of friends that are constituents of that area and I love the fact we've got that airport northwest Arkansas and I love to see it
▶ Play Suggest a correction Report an error
Jess Askew Unverified 1:25:59
grow but let's not conflate the issue like I said this is just about the escrow portion of what we passed two years ago. Let them work out the detachment. Let the bonds pay off like they normally would if we hadn't have muddied the water two years ago. With
▶ Play Suggest a correction Report an error
Senator Clint Penzo Unverified 1:26:16
that said, I'll close and ask for a good vote. Thank you, Senator
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:26:23
Penzo. What's the will of the committee? Motion do pass. Motion do pass as amended. We have a motion by Senator Love. Do we have a second? Second by Senator Scott. Any discussion? Seeing none, all those in favor of a do pass, say aye. Aye. Opposed, saying sign. No.
▶ Play Suggest a correction Report an error
Speaker 258 1:27:05
Senator, Bill Feld. Thank you, committee, for your time. Next, we have Senator Petty, SB447.
▶ Play Suggest a correction Report an error
Speaker 26 1:27:35
Please introduce yourself by the record, Senator, and you're
▶ Play Suggest a correction Report an error
Senator Jim Petty Unverified 1:27:47
clear to present your bill. There we go. All right. Thank you, Mr. Chair. Jim Petty, Senator, District 29. Members, I know it's late, and you've heard lots of bills, and we're all just getting started in a lot of ways. I was in here a few days ago. This is the common carrier shipper bill. The purpose of this bill is simply to give the state a two-year gauge of the volume of alcohol being shipped into Arkansas. As it stands now, we really don't know. With a few exceptions, it's currently illegal to ship alcohol into the state, but it is happening. SB-447 requires the common carriers like FedEx, UPS, DHL file quarterly reports with DFNA documenting the amount of alcohol they're bringing into the state and who shipped it. It does not create a sting operation on the consumer. The quarterly report would not provide specific information about that like the name or address. It just requires the zip code where the alcohol was delivered and the company that fulfilled that order. We worked with the Arkansas Trucking Association, had some amendments there. We had a late amendment by FedEx. I worked with them and their government relations team to satisfy them, and there's no known opposition at this time to this bill. 18 states, including Texas and Oklahoma, Tennessee and Louisiana, have similar shipper reporting laws. And again, FedEx, UPS, DHL currently have software to create these reports. It will just essentially give us a gauge of the volume of alcohol shipped into the state. And then after that, the FNA can determine if there's anything else we need to do regulatory-wise or enhancement of collections of any lost revenue. With that, I'll be happy to answer any questions.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:29:56
Any questions for the senator? Seeing none, is there anyone here to
▶ Play Suggest a correction Report an error
Speaker 262 1:30:08
speak far or against the bill? Please introduce yourself for
▶ Play Suggest a correction Report an error
Speaker 263 1:30:12
the record. Yes, sir. I'm Bill Paschal. I'm here on behalf of the United Beverage Retailers Association. We, along with the wholesalers, met with DF&A months ago to talk about this bill and why it was needed. We worked with DF&A on the front end, ran this bill by them. And as Senator Petty has mentioned, we ran it by the Truckers Association. And then when FedEx had some issues with it, we worked with them. And so we have agreed upon language now. And I think Senator Dias Mang asked me once, why do we need this bill? We need the bill because illegal shipping is taking place every day in Arkansas, and we don't know if it's 36 cases, 300 cases, or 3,000 cases a day or shipments a day. So all this does is allow the state to grab data so we know how much is coming in, and then we may be able to back in and figure out if we're losing tax revenue if people are not paying Arkansas taxes when that's shipped in. We suspect that's not, that is happening.
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:31:23
Thank you, Mr. Chairman. Mr. Paschal, this is really an attempt to gain data to decide if we as a state need to pass something to capture this revenue or stop this shipping or whichever direction we want to go. that's really that's
▶ Play Suggest a correction Report an error
Speaker 270 1:31:47
correct and I remind you that it is illegal
▶ Play Suggest a correction Report an error
Speaker 263 1:31:51
to ship alcohol into Arkansas with with my with an exception we have an exception that you can ship wine from a winery that a person has established a relationship with 24
▶ Play Suggest a correction Report an error
Speaker 272 1:32:01
cases I'm so glad to know that because I would be breaking a law if you hadn't and that that law looks like it's going to be amended some that even make it a little but it's still going to be just a wine
▶ Play Suggest a correction Report an error
Speaker 263 1:32:15
from wineries in the U.S. But yes, all this is doing is collecting data to give the state a better sense of where we are in terms of how much alcohol is being shipped in. Because I can tell you here representing my retailers, we know that it's being shipped in every day because some of our folks have ordered it just to see if they can get it. And we're pretty certain a lot of that is not being taxed as it comes in. So that hurts us at a local level because, one, our folks have to have a license to sell it in Arkansas, which they have to pay for they have to you know go through the process to get that and then two we have to pay the taxes so if that's being shipped in to the state illegally and they're not paying taxes they have a price they're being put
▶ Play Suggest a correction Report an error
Speaker 273 1:32:56
at a competitive disadvantage that's exactly right not to mention the
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:33:02
taxpayers are not receiving the revenue that's exactly what we're going to try to do with this
▶ Play Suggest a correction Report an error
Speaker 270 1:33:08
is to find out how much that is that's all we're doing trying to gauge how much the volume of alcohol that's being shipped that's
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:33:18
all this bill is. Thank you, sir. Thank you, Mr. Chairman. Senator Scott. Motion at the proper time. What is your motion? Do pass. I
▶ Play Suggest a correction Report an error
Michelle Allgood Unverified 1:33:28
have a second. Any discussion? I don't know. I was
▶ Play Suggest a correction Report an error
Speaker 38 1:33:31
going to ask to make a comment. We'll allow you to see for that since it went fast. Thank you. I was just,
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:33:38
I'm still not supportive. I still feel like it's a little big brother to me. And, you know, the conversation I have with FedEx, whether they're good with it or not, it was a good conversation. And I just, I guess I agreed with it's not their job to, not their job. They receive it and they ship it and that's it. But I was looking at the provisions of the common carrier reported. If they don't do these reports, they'll be subject to penalties. under 2313 234 just to see what what would that look like and it it kind of goes from a common carrier needs to have a permit or a certificate from the from rdot to operate and then it flips over into if a person does not if any person violating the provision of any other term or condition of a certificate permit or license i assume that would be kind of where this would fall under. So would the penalty of $100 go to the driver or the carrier of which doesn't
▶ Play Suggest a correction Report an error
Speaker 206 1:34:43
really provide provisions for the carrier if they don't prevent that? So this
▶ Play Suggest a correction Report an error
Speaker 276 1:34:47
bill is focused purely on a licensed carrier, CCL license. So it would go to whoever has the CCL license. Even though the CCL license doesn't
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:34:57
have a provision to uphold this, it falls under a person. Does that make sense? It's going to fall into the corporation.
▶ Play Suggest a correction Report an error
Speaker 279 1:35:08
The corporation will be fined $100 but not more than $500.
▶ Play Suggest a correction Report an error
Speaker 272 1:35:14
That's correct. And we're not trying to be punitive with it. And we had
▶ Play Suggest a correction Report an error
Speaker 263 1:35:18
that discussion with FedEx. We're just trying to incentivize them to do the report. We're not trying to go after the shipper. We're trying to find out who's shipping it and how much is coming in. And eventually we'll back in to see if they're paying their taxes. That's all this bill is doing. It's really simple. It's
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:35:38
not a hard bill. So let's follow that. You get a report, and it says there's 10,000 pounds.
▶ Play Suggest a correction Report an error
Speaker 281 1:35:45
It means today. It'll be weight now. Weight.
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:35:47
Okay, so what's next? We've got to do something. We want
▶ Play Suggest a correction Report an error
Speaker 263 1:35:52
to find out now. That's going to be up to you as policymakers and DF&A once we've collected enough data that you can see what's going on. Then
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:36:01
we'll be who's doing it, who's not self-reporting that they've received this, now let's end the shipment into the state, that's where this would head. Most likely, that's where this would go, is once the data comes in. So, you know, the way
▶ Play Suggest a correction Report an error
Speaker 263 1:36:16
this probably plays out is, you know, if you guys pass this law and it goes on the books, the EFNA will collect this information for the next two years, and they'll come back to you in two years and say, we got a real big problem or we don't. If
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:36:30
we have a big problem, if we have More coming in that's not accounted for. That's when we'll have to decide to be big brother. That's right. That's when it will
▶ Play Suggest a correction Report an error
Speaker 272 1:36:38
be up to you as policymakers to decide if there's a law that's needed. I may not be here, and I don't want that to happen. I'm going to stay against the bill. Well,
▶ Play Suggest a correction Report an error
Speaker 263 1:36:48
remember, we've got folks out there that are being put at a price disadvantage, both the wholesalers, not just my liquor retailers, but the wholesalers as well, because they're doing an end run on the three-tier system. Yeah, and I guess.
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:37:00
So you're not trying to be punitive, but a penalty is the definition of being punitive. A penalty for not doing something that you otherwise wouldn't have to do without a state
▶ Play Suggest a correction Report an error
Speaker 276 1:37:15
law. It's a minimal penalty for them not filing the report, that's
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:37:20
all. I just wouldn't characterize it quite the way that you characterized it.
▶ Play Suggest a correction Report an error
Speaker 263 1:37:24
Okay, that's fair. That's fair enough. We're not going after, we're not trying to penalize the people that are shipping it in yet. The only penalty in here is for... It's the only people being penalized for
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:37:35
the people shipping it in. No, no, the people they're
▶ Play Suggest a correction Report an error
Speaker 282 1:37:38
bringing in, the shipping party. The bill that you have right
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:37:41
now, the only people that would be penalized are the people that do not report what you want to be reported to DFA. That's correct. You're giving them one more task to do as shippers, and if they don't want to do that task, you're going to penalize them. That is, penalties are penalized. You're right. Okay, all right.
▶ Play Suggest a correction Report an error
Speaker 288 1:37:57
Yeah, I'm not arguing that. But I
▶ Play Suggest a correction Report an error
Speaker 263 1:38:00
will say that, again, the Truckers Association reviewed the bill and FedEx. We worked with FedEx, and they're good with it. They're not opposed to it. Senator Brown. Do you know that you said
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 1:38:14
there's 18 states that do this? Yeah. Is there any feedback from common carriers that say, hey, the administrative burden that you're going to put on us is going to increase my carrier rates into those states? No, nobody's brought that up. Do the
▶ Play Suggest a correction Report an error
Speaker 263 1:38:31
other states have punitive? Most of them have some kind of minor fine like
▶ Play Suggest a correction Report an error
Speaker 26 1:38:37
this if they don't file the report. Yes, sir Thank you, Sandra Love I'm just used to going back and forth when you And
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:38:48
this is both Senator Petty and and to mr. Paschal Is this Alcohol that's shipped in by these common carriers. Is it contraband? Contraband contraband It's not taxed in Arkansas in the fact so is it contraband and We I mean, I'm not I'm not trying to punish anybody But I'm trying to identify that the product that they're shipping. It's not supposed to be shipped to Arkansas unless someone self-reports and pays the tax is that
▶ Play Suggest a correction Report an error
Speaker 299 1:39:28
Would you agree? I think that's a fair assessment of the situation. So while we can argue how
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:39:34
punitive or light we should be as the state of Arkansas on our policy, we're looking at, we want to identify, is this a measly little amount that doesn't amount to a hill of beans? It's not worth the cost of our administration to try to collect it? Or we're losing a whole lot of money and hurting our local small businesses. Is that kind of the conundrum that we're in here?
▶ Play Suggest a correction Report an error
Senator Jim Petty Unverified 1:39:58
As an example, Kansas identified nearly 200,000 shipments after they implemented their shipping law, and Tennessee had 185,000 nearly. You're talking about pounds. Shipments. Shipments. Is there a
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:40:11
dollar figure that was figured through that? Not available to us. Okay. The point is
▶ Play Suggest a correction Report an error
Senator Jim Petty Unverified 1:40:17
they did identify there were shipments in pretty healthy numbers. that answers my question. Thank
▶ Play Suggest a correction Report an error
Speaker 22 1:40:25
you. Thank you. Seeing no
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:40:30
other questions, is anyone here
▶ Play Suggest a correction Report an error
Speaker 35 1:40:33
to speak for or against the bill? Yeah, we had a motion. Senator
▶ Play Suggest a correction Report an error
Michelle Allgood Unverified 1:40:43
Scott had a motion. Motion to pass, yeah. Had a motion. Do we have a second? Second.
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:40:48
Had a second by Senator Johnson. Any discussion? Seeing none, all those in favor say aye. Aye. Again, same sign? No. Ayes have it.
▶ Play Suggest a correction Report an error
Speaker 209 1:41:05
Thank you, committee. Thank you, Mr. Chair. Okay, we're going
▶ Play Suggest a correction Report an error
Speaker 125 1:41:13
to skip down to SB 562. if you could please identify yourself
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:41:33
with the committee ricky hillson in district 11
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:41:37
you're recognized senator committee this is just a simple bill it's to do away with the report uh it's a report that no one ever looks at and it's just uh make make it uh one less uh report that the uh highway department has to put together that no one looks at it's one of the So one of them that Senator Hester brought to us on a list and said, hey, you know, if we can do away with some of these reports, this happens to be one of the reports that we have to make it we don't have to have a report anymore. With that, I'll take any questions.
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:42:24
Are they still going to do the work of the report, though? Because I do think that's valuable work. Let's get Mr. Wiley down here and let them go over it. I think this looks vaguely familiar to me. And I would say I've looked
▶ Play Suggest a correction Report an error
Senator Ricky Hill Unverified 1:42:44
at it. But this is one of them that came from Senator Hester and the governor's office to get
▶ Play Suggest a correction Report an error
Speaker 313 1:42:50
rid of. Yes. Jared Wiley, Director of R&I. Yes, we're still working through this, Senator. We've implemented 78 of the 90 rules to date, or 87% complete. We project to be fully complete by the end of this calendar year. So we're actively working and reporting on this to the commission each meeting, and we come down to the Highway Commission Review and Advisory Subcommittee and present each quarter as well. Do
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:43:16
you feel like it's useful information for the legislature?
▶ Play Suggest a correction Report an error
Speaker 168 1:43:19
Yes, sir. Well, this is the audit. This deals with the
▶ Play Suggest a correction Report an error
Speaker 313 1:43:22
audit, and the committee has elected not to conduct that audit any longer. So this is just dealing with the audit, not with the report that we're submitting.
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:43:34
But it's striking the language. I mean, maybe there's more language above that I'm not seeing because I don't have the full code section. But it says conduct an annual project review and efficiency study of the Department of Transportation, including without limitation, review of processes, procedures, procurement, projects, appeals, and expenditures. the results of the study of the subdivision of the section shall be reported legislative council no later than October 1st of each year so is what audit help me walk me back into the audit portion there may be again a provision that's I'm not seeing above this somewhere so powers of internal
▶ Play Suggest a correction Report an error
Speaker 318 1:44:19
audit is appeal Thank you. Michelle Davenport, Chief Counsel for the Arkansas Department of Transportation. It is my understanding that this is only dealing with the report that comes from OIG, not from the actual Department of Transportation that's presented to H-Priess. And OIG, so they went
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:44:34
back and forth whether or not they were going to hire people or spend the time to be able to do it, and they've decided it's not worthy
▶ Play Suggest a correction Report an error
Speaker 318 1:44:44
of the time even though it's in legislation. The testimony also included the fact that we have a new internal audit head that has previously worked with the Office of Inspector General and that the processes that she follows and those reports that are
▶ Play Suggest a correction Report an error
Speaker 323 1:44:57
available to the department satisfy those same requests, so they felt like it was a duplication was the testimony that
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:45:03
was presented. All right, thank you. Do we have any other questions? All right, see, none. What's the will of the committee? Or do we want to speak for or against? Against. four. All right, Senators, close. We have a motion. Motion to pass. We've got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. Congratulations. All right, I think next up we have House
▶ Play Suggest a correction Report an error
Speaker 37 1:45:37
Bill. Is Senator Johnson going to run 561? Senator, are
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:45:42
you running 561? Yes. Okay. Take your drinks out of here. Senator, if you could recognize yourself for the committee. Thank you, Mr. Chairman. You're
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:46:11
welcome to proceed with your presentation. Mark Johnson, State Senator, District 17. Senate Bill 561 is one of those bills that, you know, you don't get a lot of these where you literally have constituents calling you up and complaining about something. And I would bet some of you have as well. This is to address the problem of the expired temporary paper license tags that people get on cars. I have seen them as old as two years old. They're, not only are they abusing the system where you get a 60, I think we changed it from 30 days to 60 days, and that was to give people time, in some cases, to obtain their titles, pay their tax, do all this stuff. People aren't doing it. have actually I've had several constituents that you know they call me every now and they say are you going to run a bill on this and so here here we are the the bill here's basically what it does it it adds an additional 30-day tag if you're 60 you're near the expiration of your 60-day tag you can go in and and pay I don't know if I put actually put the amount in the I don't think I did. I'd recommended to DFNA maybe $10. You get an additional 30-day tag, whatever covers the cost of doing that. But when you do that, you have to provide proof that you've assessed and paid your personal property taxes, which is why I think many people may be pushing this thing down the road so they can evade. Obviously, they have to pay their sales tax when they get their permanent tag and some people may not have that but if you don't have the sales tax then don't buy the car so the point I'm saying is that what we do is you buy you go buy a car you get this paper tag you're supposed to within 60 days go the revenue office and buy your permanent tags by your sales tax and when you do that of course you have to show that you've assessed that vehicle in the your county of residence and that your previous year's personal property taxes paid that's the way we do business and thanks to the way we do computerized now you get a thing from DF&A saying you're set for our star and you can go online and do all this online and I guess when you do it the first time I know that Mr. Hamrick was here could answer any questions about the technicality of how you do it but what this does is if you don't do it and you're driving around on an expired paper temporary tag then a it gives you a chance to not let it expire if you haven't got all your paperwork and everything together to go get your permanent tags it gives you another 30 days assuming you've assessed and you paid your personal property tax on that vehicle which by law you're separately required to do then this gives a mechanism to allow people an extra 30 days but they've got to show they assessed it and they got to show that they paid their personal property tax now think about this if you drag this out I've seen like I've said I've seen them on cars people calling me about I saw one that was you know 2023 20 so something's two years old or longer those that individual may have totally skipped a year of even paying his personal property tax but that money of course goes to the city the counties and school districts so they're not just evading the sales tax or possibly and of course the fees for the license but they're potentially evading paying their their tax that goes the property tax that goes to our schools and our cities and counties. So this is an abuse of the system. I get more, I'm blown away how many, when I knocked doors in the campaign last year, I had people, what are you going to do about this? And I said, well, I'll take a look at that. So this is the bill. Now, the penalty is simple. If you, if you're fined for driving around with the tag that's expired, it's a hundred dollar fine. but second and subsequent offenses are $250 fines that is what the bill does and I'll be glad to
▶ Play Suggest a correction Report an error
Speaker 333 1:50:58
answer any questions. Thank you members for
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:51:03
any questions. Senator Love. Okay so you said that they would have to assess before going to well first of all let me let me let me ask DFNA to come to the table because I need to ask this question before I ask
▶ Play Suggest a correction Report an error
Speaker 199 1:51:21
you. Yes, sir. Go right ahead. Recognize
▶ Play Suggest a correction Report an error
Speaker 338 1:51:26
yourself with the committee. Thank you, Senator. Thank you, Senator. Members of the committee,
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:51:31
Alicia Austin-Smith with DFA. Okay. Let me ask you, so there's usually a penalty when you don't renew your, or you don't pay your sales tax initially. What that penalty is? The 10% or the 10%, yes.
▶ Play Suggest a correction Report an error
Speaker 342 1:51:46
All right, so it's 10% plus interest. Yes, sir. Okay. That's on the tax, as I
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:51:56
recall. Yes, on the tax. That's not on
▶ Play Suggest a correction Report an error
Speaker 345 1:51:59
the fee of the... Yeah, it's on the sales tax. Yes, I assume we were talking about
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:52:05
an individual who's purchased a car and is needing to register it. All right, so this is what I'm going to ask. Is there, so, Senator, you're saying that they have to assess personal property?
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:52:20
Yeah, they're supposed to assess within that 60-day period, because you've got 60 days to come in with all your paperwork, including your proof of assessment and your proof of your previous year's property tax pay before they can issue the license and collect your sales tax. so what if they don't have a personal property well now if you you can get a clearance from the from the what if this is your first vehicle because i don't remember then you you show that you've listed it for assessment and therefore you're on the tax book so and that and that the uh county is basically saying they're okay next year they'll get a bill for their personal property tax like you're saying their first car they ever bought type thing. I understand that the
▶ Play Suggest a correction Report an error
Speaker 337 1:53:06
law is written that way so that these vehicles are on the rolls of the counties, otherwise, you know, then the year would come up. Okay, so the,
▶ Play Suggest a correction Report an error
Speaker 347 1:53:15
but I thought, I thought that you paid your sales
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:53:18
tax before you assessed, so is that not? You provide proof of assessment
▶ Play Suggest a correction Report an error
Speaker 345 1:53:22
when you come in to register and pay your sales tax. All right, and of course,
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:53:27
that's the state collecting the sales tax, even if it's county portion of the sales tax, But the personal property tax is collected by the counties. Okay. Yeah, you
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:53:36
first go assess and then you go and pay your tax. Okay.
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:53:41
Yes, sir. But now those of us who are of the age, Senator, we've been paying that personal property tax for a long time. But someone, say a young person buying their first car and all that, this would be the first item that they have that goes on the tax book. So their list, they call it listed. When you go into the county assessor you're listing it You assess
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:54:03
and then you go and pay the penalty and then you get your temporary
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:54:10
tag and you just keep Well, does that temporary tag is
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:54:15
it is listed is it initially Provided by the dealer. So let me ask you this Is there a penalty and so does the clock start over for them? Because what we're saying is this is they can extend their temporary tag right for 30 days under this bill yeah for and then so does the penalty
▶ Play Suggest a correction Report an error
Speaker 351 1:54:38
are you all still going to assess the penalty i'm not
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:54:44
aware that the bill changes the deadline for the sales tax it doesn't change that no sir it does not it only deals with the temporary tag which is issued the dealer obtains them from dfna you buy a new car they put it on there and then you've got or even a used car that then you buy you go we have 60 days to clean up all your paperwork pay your taxes and uh uh pay your fees to dfna and this is so then what is the
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:55:11
benefit of of you know of getting this tag if you're not going to extend the deadline for your sales tax well that that's in the separate section of
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:55:21
the code and i didn't try to
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:55:23
address But do you hear what I'm saying? It's like I was thinking that we're given an opportunity for 30 more days We are on the registration But I'm not aware that the bill
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:55:38
changes it doesn't it doesn't change that and that's in another section of code because that's a sales and paying the sales tax law, I think all
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:55:47
right, thank you just as Inside, in revenue and tax, there is a 60-day window to pay your sales tax, and they just extended a 60-day window to assess your car to match because there was confusion. Now, we would have to vote that to approve it all, but those things will be aligned, whereas right now it's 30 days to assess, 60 days to pay sales tax. Okay, but
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:56:09
I guess this is what I'm saying is, what is the benefit of them paying for another tag when it doesn't move well. I mean, that's a discussion. Well, theoretically,
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:56:19
Senator, if I could respond, you might not have all the paperwork on your car. You might have some other, and let's be honest, some people might not have the money to pay the sales tax in, and they're stretching out as long as they can on it. I'm saying we can give you another 30 days. That's a total of 90 days from when you got the car, but after that, if you're driving around, And that is an expired tag any way you cut it. And I have had a friend who was one of the people that called me that the police officer had his car towed, had it impounded and towed because he was driving on an expired tag. So this is to give, we're going to give a little bit more grace, 30 days. But after that, there's a fine. And if you do it a second time,
▶ Play Suggest a correction Report an error
Speaker 337 1:57:11
it's a $250 fine. I think, Senator, he's dealing more with the imposition of the penalty on the criminal side, right? But yes, the sales tax is still due within 60 days, and so that would increase the penalty
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:57:23
and interest there. Senator Dismanks, that y'all are working on cleaning that up, that language up in revenue and tax.
▶ Play Suggest a correction Report an error
Speaker 337 1:57:30
They extended from 30 to 60 days the deadline to assess so that it matches what you guys did last session, extending the
▶ Play Suggest a correction Report an error
Speaker 355 1:57:36
deadline. I might need to look at doing
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:57:39
that again if they take up this. But I'm not trying to get them to get a break on the, I guess it's 10% penalty on that. But I am trying to give them an opportunity to not be driving on an illegal expired tag. And Senator
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:57:57
Johnson, do you have a House
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:58:03
sponsor? I believe I do. I believe I got, do we have an amendment on this, Jessica? It's Representative Alyssa Brown, Senator. I may be holding an old copy of the bill that didn't
▶ Play Suggest a correction Report an error
Speaker 358 1:58:26
have it. I don't have one here in our packet, but
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 1:58:29
let me look online. Representative, I will look online too. Representative Alyssa Brown has agreed to be the house sponsor. It is not engrossed if you did. Okay. And I don't think we have that rule in this committee, but certainly we want to do it. We do have a house sponsor.
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 1:58:51
Okay. All right. Do we have any other questions? All right. Seeing none. Would anyone like to speak against the bill? For the bill, seeing none, what's the will of the committee? We have a motion to do pass by Senator Johnson. We've got a second by Senator Scott. Any discussion on the motion? Senator Love, you're recognized for
▶ Play Suggest a correction Report an error
Senator Fredrick J. Love Unverified 1:59:19
discussion. I guess I understand what we're trying to do, but I just, I don't, I guess I really don't see a benefit in it Since, I mean, we're not pushing back the, I mean, because the penalty is there, is already, you get a 10% penalty on not registering your car within 60 days. And so, I guess we're just adding on penalties, which are going to put people further behind. I just, I don't know, I guess I could have been in agreement with the bill if this was to actually push back that for 30 more days to give them time. But since we're not dealing with that, it just seems like a, you know.
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 2:00:06
That would probably need to be done separately and something that would go to revenue and tax. But Senator, let me remind you that if people are truly doing this to avoid, they're not just avoiding the sales tax part. If they do it for two years, they're trying to carry this car over into the first year that they assess it or should have assessed it. They didn't. And the school district and the cities and counties are not getting a property tax they're entitled to. So, you know, there's several forms of tax evasion going on because they're fudging on the dates of when they're supposed to have their assessment and their taxes paid. Okay. All right. Thank you. Any other discussion? All right. Seeing none, I've got a motion
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:00:50
to do pass and second. All those in favor signify by saying aye. Aye. All those opposed? No. Bills failed. Roll
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 2:01:08
call. Mr. Chairman, I'll drop my request for a roll call because the number of people in the room, so if it had any negative, it didn't get by. Thank you, committee. We'll try again. Thank
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:01:20
you. That's a patient man in the room. Looks like you have a one-page bill to present. Representative? Yeah, they've been here waiting. So, yeah.
▶ Play Suggest a correction Report an error
Representative Jason Nazarenko Unverified 2:01:43
Come on. Thank you, Mr. Chairman. With your permission, I'd like to have my guest also here. Yeah,
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:01:51
if y'all could just recognize yourselves for the committee and you'll be welcome to proceed. Yes, sir. Presenting
▶ Play Suggest a correction Report an error
Representative Jason Nazarenko Unverified 2:01:57
House Bill 1798. House Bill 1798, and I'm Jason Azranco, the representative for District 4, that's Marion County, and then parts of Baxter County. And I'm Ange Pereira. I'm a
▶ Play Suggest a correction Report an error
Speaker 371 2:02:07
licensed clinical social worker living in Baxter County in Cotter, Arkansas. First of all, thank you, Mr. Chairman.
▶ Play Suggest a correction Report an error
Representative Jason Nazarenko Unverified 2:02:15
Thank you, Committee, for making the exception and being able to hear us tonight. I know Ange has driven quite a few hours to be here, so very excited to bring you 1798. You may remember a little over a month ago you had a bill that was the Blue Envelope Program. that's now Act 16. This is a mirror image of Act 16. If you look at the language written exactly the same, this is focusing on folks with mental illness. So Arkansans that suffer from mental illness, we know that sometimes when they get stopped by the police, there's a chance that that could escalate. And it had, this was brought to me from Ange about a month ago. She told me of a patient that she had that that exactly happened to. And it escalated. Luckily, it did not escalate so far that it went beyond that point of no return. But this bill with the green envelope program would do great steps into helping folks with mental illness. It also protects our law enforcement as well so that they are protected as well as all those Arkansans. I did speak with the Sheriff's Office and State Police. No issues there as well as DF&A. We spoke with them. You can see there is a fiscal impact. What it is is exactly the same as Act 16. There's actually, now that we're putting a green envelope and a blue envelope, probably not going to cost twice as much, but I'm sure it will have a small additional cost. So with that, as I mentioned, the police, there's no arguments there, and this will be a great step forward for our folks that have mental illness. I'm open to any questions.
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:03:52
Thank you. Members, if you have any questions, all right. Senator
▶ Play Suggest a correction Report an error
Senator Mark Johnson Unverified 2:03:58
Johnson, you're going to ask for a question. Thank you, Mr. Chairman. On the DF&A analysis, Representative, it says that it may benefit from an amendment to add a definition for mental illness to establish qualified illnesses for the program, and it also says it might benefit what documentation an individual must present to obtain that. Is that addressed separately, or was that something to be done by rule, or what?
▶ Play Suggest a correction Report an error
Speaker 375 2:04:23
It was something that would be done
▶ Play Suggest a correction Report an error
Representative Jason Nazarenko Unverified 2:04:26
more by rule, and then as the licensed clinical social workers, as they work with their patients, they would be, you know, providing them with something that
▶ Play Suggest a correction Report an error
Speaker 243 2:04:36
they could go to DF&A or up to their motor vehicle when they're going to get that documentation. So your intent is to be done by rule? Yes, sir. Okay.
▶ Play Suggest a correction Report an error
Senator Joshua Bryant Unverified 2:04:47
All right. Thank you, Mr. Chair. Could you go ahead and describe, so DF&A won't just promulgate those, they'll need direction. Maybe the witness could elaborate on what diagnosis would they be seeking to be listed?
▶ Play Suggest a correction Report an error
Speaker 377 2:05:00
In the world of mental health, we have what's called a DSM, and we're now on the fifth version of it. So it stands for Diagnostic Statistical Manual, and it's a tried-and-true booklet. Oftentimes, the mental health professional calls it the Bible, And it does outline every single mental illness that is acceptable today. It gives us criteria. It gives us symptoms to look at. It gives us severity, frequency, duration. And so we have to use that whenever we have a patient or a client in front of us that is presenting with a mental illness. We then have to diagnose them. And we diagnose them for many reasons, most of all because they need that diagnosis. And then we also use it, of course, for billing and insurance purposes. So the mental health professional would be the one that would diagnose them through the DSM-5 and would write a letter to the DF&A or the local motor vehicles stating that this person does, in fact, meet that very stringent criteria to be considered mentally ill with the diagnosis.
▶ Play Suggest a correction Report an error
Speaker 378 2:06:08
It doesn't create any loopholes for someone that
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:06:14
does something inappropriate that has mental illness. No, it does not. I mean, recently, and I don't know why, you get stuck on the internet some nights or whatever, and there was a video, it was a viral video of a guy, and essentially the title was, This is Not How to Respond to an Officer. And in the video, in about the first 30 seconds, it was very clear that the officer didn't know he was antagonizing someone with a mental illness, but that person had a mental illness. And there's a three-minute video or longer. And I just think if someone had known, like, hey, it's not quite right, then it could have all been de-escalated. But it almost got to a point that it was a very bad situation. I mean, so ironically, like, I didn't know you had this, but I was watching that video going, man, if someone could have just said, even the passenger could have just said, hey, this is a trigger, Or, you know, this is whatever you're, I mean, because it was clear that the officer had pinpointed in on how to get a response. And he was getting a response over and over from that individual. And almost enjoying part of it because clearly it made it online. And that didn't just happen on its own. But anyway, so I appreciate what you're bringing. I think it's valuable, can be very valuable. Again, we're not, no one's going to get away with something because they have a green card. It just may prevent something else from happening.
▶ Play Suggest a correction Report an error
Speaker 377 2:07:41
so it's really a win-win situation for mental health individuals this gives them a better way to communicate with more respect it gives the law enforcement officer a better way to communicate and know what's happening the end result is we want both parties to go home at night to their families that's what we want and so it does give pause to both sets of individuals you had mentioned senator about even a passenger saying something the the clients that I am referring to there was a passenger that said something and it didn't matter so there's there is a visual way to be able to let law enforcement understand and be able to take a pause we know from statistics the first 45 words out of a law enforcement individual sets the tone and especially if he's walking up to the car with his hand
▶ Play Suggest a correction Report an error
Speaker 381 2:08:37
on his gun. All right. Members, do we
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:08:43
have any other questions? All right. Would anyone in the audience like to speak against? House Bill 1798. Four. Seeing none, what's the will of the committee? We've got a motion to do pass by Senator Scott, a second by Senator Johnson. Any discussion on the motion? It's your night. the one that
▶ Play Suggest a correction Report an error
Senator Jamie Scott Unverified 2:09:21
says push I think this is a really good bill thank you for bringing it to us because I think sometimes our law enforcement get a bad rap and if you can put some tools in their hands to ensure the safety of our Kansas who do have mental illnesses and our law enforcement just interacting with them I think that's a win-win for everybody so I just wanted to echo what you said so that's why I was okay with not saying nothing
▶ Play Suggest a correction Report an error
Speaker 377 2:09:49
if I couldn't get this on I did kind of want it in closing let you know that Arkansas will be the only state that has this so that just proves to the innovation that Arkansas Arkansas has as as well as their thought in going forward with individuals with mental illness. And I also do want to just put a shout-out to Margaret, because she is a very remarkable woman, and without her collaborating with me, we would not be sitting here. All right, thank you. Just in time, Senator, last bill. We're about to vote.
▶ Play Suggest a correction Report an error
Senator Jonathan Dismang Unverified 2:10:19
All those in favor, signify by saying aye. Aye. All those opposed, motion carries. Congratulations. Thank you, Mr. Chairman. thank you committee thank you so much all right members i think we that that wraps up our business for the night unless anybody wants to run some house bills for some house members we're good and everybody i think senator wallace i'll go off all right with that we are adjourned Thank you.
▶ Play Suggest a correction Report an error

Agenda

Call to Order

0:09

SB492 J. Bryant TO AMEND THE LAW CONCERNING THE RELOCATION OF UTILITY FACILITIES; AND TO AMEND THE LAW CONCERNING THE ACQUISITION, CONDEMNATION, AND DISPOSITION OF REAL PROPERTY BY THE STATE HIGHWAY COMMISSION.

7:58

SB96 C. Penzo TO AMEND THE LAW CONCERNING DETACHMENT BY A REGIONAL AIRPORT AUTHORITY; AND TO REPEAL REGIONAL AIRPORT AUTHORITY DETACHMENT.

20:55

SB258 C. Penzo TO CREATE THE ARKANSAS DIGITAL RESPONSIBILITY, SAFETY, AND TRUST ACT.

11:07

SB447 J. Petty TO REQUIRE PERMITTED COMMON CARRIERS TO SUBMIT REPORTS DETAILING SHIPMENTS OF ALCOHOLIC BEVERAGES INTO THE STATE.

1:27:15

SB496 Caldwell TO AMEND THE LAW CONCERNING PERMITS FOR SPECIAL CARGOES; AND TO AMEND THE LAW CONCERNING THE ISSUANCE OF A PERMIT FOR SPECIAL CARGO TRANSPORTED BY A FARM MACHINERY EQUIPMENT HAULER.

5:27

SB540 M. Johnson TO LIMIT THE SUSPENSION OR REVOCATION OF A DRIVER'S LICENSE OR IMPOSITION OF RESTRICTIONS ON A DRIVER'S LICENSE OF A PERSON WHO HAS SUFFERED A SEIZURE.

0:28

SB561 M. Johnson TO ALLOW FOR THE ISSUANCE OF AN ADDITIONAL TEMPORARY PREPRINTED PAPER BUYER'S TAG IN CERTAIN CIRCUMSTANCES; AND TO CREATE A PENALTY FOR THE USE OF AN EXPIRED TEMPORARY PREPRINTED PAPER BUYER'S TAG.

1:45:48

SB562 Hill TO AMEND THE LAW CONCERNING THE OFFICE OF INTERNAL AUDIT; AND TO REPEAL THE REQUIREMENT FOR AN ANNUAL PROJECT REVIEW AND EFFICIENCY STUDY OF THE ARKANSAS DEPARTMENT OF TRANSPORTATION.

1:41:21

HB1798 Nazarenko TO ESTABLISH A GREEN ENVELOPE PROGRAM.

2:02:02

SB540

0:28

Adjourn

2:10:50

Speakers

Senator Mark Johnson Unverified
68 segments
Speaker 6
6 segments
Speaker 5
1 segment
Speaker 8
2 segments
Senator Ricky Hill Unverified
47 segments
Senator Joshua Bryant Unverified
51 segments
Speaker 22
2 segments
Speaker 35
4 segments
Speaker 38
6 segments
Speaker 52
1 segment
Speaker 56
1 segment
Senator Clint Penzo Unverified
19 segments
Josh Bryant Unverified
8 segments
Speaker 68
3 segments
Speaker 74
3 segments
Speaker 82
4 segments
Jess Askew Unverified
19 segments
Speaker 80
1 segment
Speaker 97
1 segment
Speaker 99
26 segments
Speaker 101
2 segments
Michelle Allgood Unverified
3 segments
Speaker 116
1 segment
Speaker 100
1 segment
Speaker 132
2 segments
Speaker 114
1 segment
Speaker 140
1 segment
Speaker 144
1 segment
Speaker 145
10 segments
Speaker 163
1 segment
Speaker 165
25 segments
Speaker 169
9 segments
Speaker 173
1 segment
Senator Fredrick J. Love Unverified
44 segments
Speaker 185
1 segment
Speaker 191
1 segment
Speaker 177
2 segments
Speaker 193
5 segments
Speaker 192
1 segment
Speaker 174
1 segment
Speaker 216
1 segment
Speaker 176
1 segment
Speaker 111
1 segment
Speaker 230
1 segment
Speaker 231
19 segments
Speaker 235
1 segment
Speaker 239
1 segment
Speaker 240
9 segments
Speaker 244
1 segment
Speaker 258
1 segment
Speaker 26
2 segments
Senator Jim Petty Unverified
8 segments
Speaker 262
1 segment
Speaker 263
15 segments
Speaker 270
2 segments
Speaker 272
3 segments
Speaker 273
1 segment
Speaker 206
1 segment
Speaker 276
2 segments
Speaker 279
1 segment
Speaker 281
1 segment
Senator Jonathan Dismang Unverified
39 segments
Speaker 282
1 segment
Speaker 288
1 segment
Speaker 299
1 segment
Speaker 209
1 segment
Speaker 125
1 segment
Speaker 313
4 segments
Speaker 168
1 segment
Speaker 318
3 segments
Speaker 323
2 segments
Speaker 37
1 segment
Speaker 333
1 segment
Speaker 199
1 segment
Speaker 338
1 segment
Speaker 342
1 segment
Speaker 345
2 segments
Speaker 337
4 segments
Speaker 347
1 segment
Speaker 351
1 segment
Speaker 355
1 segment
Speaker 358
1 segment
Representative Jason Nazarenko Unverified
7 segments
Speaker 371
1 segment
Speaker 375
1 segment
Speaker 243
1 segment
Speaker 377
7 segments
Speaker 378
1 segment
Speaker 381
1 segment
Senator Jamie Scott Unverified
3 segments