Revenue & Taxation- House
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Bills discussed (46)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
HB1303
Act 546
· 6 mentions in agenda, chapter, transcript
Matched: “…rd McGrew SPECIAL ORDER OF BUSINESS Number Sponsor Subtitle HB1303 Jean TO CREATE THE SUSTAINABLE AVIATION FUEL INCENTIVE ACT;…”
|
TO CREATE THE SUSTAINABLE AVIATION FUEL INCENTIVE ACT; AND TO CREATE AN INCOME TAX CREDIT … | Jean | Notification that HB1303 is now Act 546 |
|
HB1485
· 4 mentions in transcript, agenda, chapter
Matched: “…list of the bills we're gonna hear HB 1303 HB 1540. SB 219. HB 1485. HB 1538 and HB 1716. Um, and with that we're going to star…”
|
TO CREATE A SALES AND USE TAX EXEMPTION FOR SALES TO CERTAIN ORGANIZATIONS THAT SUPPORT … | K. Brown | Died in Senate Committee at Sine Die adjournment. |
|
HB1538
· 4 mentions in transcript, agenda, chapter
Matched: “…he bills we're gonna hear HB 1303 HB 1540. SB 219. HB 1485. HB 1538 and HB 1716. Um, and with that we're going to start with HB…”
|
TO AMEND THE LAW CONCERNING THE NET OPERATING LOSS INCOME TAX DEDUCTION; AND TO INCREASE … | Ray | Died in House Committee at Sine Die adjournment. |
|
HB1540
· 4 mentions in transcript, agenda, chapter
Matched: “Um, here's a list of the bills we're gonna hear HB 1303 HB 1540. SB 219. HB 1485. HB 1538 and HB 1716. Um, and with that we…”
|
TO AMEND THE INCOME TAX CREDIT AND THE INCOME TAX DEDUCTION RELATED TO MAINTAINING, SUPPORTING, … | J. Mayberry | Died in House Committee at Sine Die adjournment. |
|
HB1716
Act 498
· 4 mentions in agenda, transcript, chapter
Matched: “…TER Page 2 of 4 A SALE OR OTHER TRANSFER OF REAL PROPERTY. HB1716 Cavenaugh TO AMEND THE LAW CONCERNING THE ASSESSMENT AND CO…”
|
TO AMEND THE LAW CONCERNING THE ASSESSMENT AND COLLECTION OF TAXES BY THE SECRETARY OF … | Cavenaugh | Notification that HB1716 is now Act 498 |
|
SB219
Act 380
· 3 mentions in chapter, transcript
Matched: “SB219 J. Dismang TO REPEAL THE SUNSET PROVISION OF THE ARKANSAS M…”
|
TO REPEAL THE SUNSET PROVISION OF THE ARKANSAS MEDICAL MARIJUANA SPECIAL PRIVILEGE TAX ACT OF … | J. Dismang | Notification that SB219 is now Act 380 |
|
HB1018
· 2 mentions in agenda, chapter
Matched: “…NABLE AVIATION FUEL. REGULAR AGENDA Number Sponsor Subtitle HB1018 Hudson TO CREATE THE STRONG FAMILIES ACT; AND TO CREATE AN…”
|
TO CREATE THE STRONG FAMILIES ACT; AND TO CREATE AN INCOME TAX CREDIT FOR EMPLOYERS … | Hudson | Died in House Committee at Sine Die adjournment. |
|
HB1076
· 2 mentions in agenda, chapter
Matched: “…ROVIDE PAID FAMILY AND MEDICAL LEAVE FOR CERTAIN EMPLOYEES. HB1076 Hudson TO CREATE THE CARING FOR CAREGIVERS ACT; AND TO PROV…”
|
TO CREATE THE CARING FOR CAREGIVERS ACT; AND TO PROVIDE AN INCOME TAX CREDIT FOR … | Hudson | Died in House Committee at Sine Die adjournment. |
|
HB1116
· 2 mentions in agenda, chapter
Matched: “…FOR EXPENSES INCURRED IN CARING FOR CERTAIN FAMILY MEMBERS. HB1116 Ray TO CREATE THE REMOTE AND MOBILE WORK MODERNIZATION AND…”
|
TO CREATE THE REMOTE AND MOBILE WORK MODERNIZATION AND COMPETITIVENESS ACT; AND TO PROVIDE INCOME … | Ray | Died in House Committee at Sine Die adjournment. |
|
HB1190
· 2 mentions in agenda, chapter
Matched: “…ED TO CERTAIN REMOTE AND MOBILE EMPLOYEES AND NONRESIDENTS. HB1190 Vaught TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS. HB13…”
|
TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS. | Vaught | Died in House Committee at Sine Die adjournment. |
|
HB1366
· 2 mentions in agenda, chapter
Matched: “…1190 Vaught TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS. HB1366 Ennett TO CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM S…”
|
TO CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM SHELTERS. | Ennett | Died in House Committee at Sine Die adjournment. |
|
HB1388
· 2 mentions in agenda, chapter
Matched: “…O CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM SHELTERS. HB1388 Vaught TO EXEMPT CERTAIN STORAGE SERVICES FROM SALES TAX; A…”
|
TO EXEMPT CERTAIN STORAGE SERVICES FROM SALES TAX; AND TO EXEMPT THE SERVICE OF FURNISHING … | Vaught | Died in House Committee at Sine Die adjournment. |
|
HB1500
· 2 mentions in agenda, chapter
Matched: “…TO CERTAIN ORGANIZATIONS THAT SUPPORT VETERANS' FACILITIES. HB1500 Beaty Jr. TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING…”
|
TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING THE THROWBACK RULE. | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
|
HB1501
· 2 mentions in agenda, chapter
Matched: “…E ECONOMIC COMPETITIVENESS BY REPEALING THE THROWBACK RULE. HB1501 Beaty Jr. TO ADOPT FEDERAL INCOME TAX LAW REGARDING DEPRECI…”
|
TO ADOPT FEDERAL INCOME TAX LAW REGARDING DEPRECIATION AND THE EXPENSING OF PROPERTY; AND TO … | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
|
HB1636
· 2 mentions in agenda, chapter
Matched: “…SUPPORTING, AND CARING FOR AN INDIVIDUAL WITH A DISABILITY. HB1636 Ray TO AMEND THE ARKANSAS SOFT DRINK TAX ACT, AS AFFIRMED B…”
|
TO AMEND THE ARKANSAS SOFT DRINK TAX ACT, AS AFFIRMED BY REFERRED ACT 1 OF … | Ray | Recommended for study in the Interim by the … |
|
HB1657
Act 709
· 2 mentions in agenda, chapter
Matched: “…X BASED ON SALES TAX COLLECTIONS FROM SALES OF SOFT DRINKS. HB1657 Beck TO AMEND THE ARKANSAS WOOD ENERGY PRODUCTS AND FOREST…”
|
TO AMEND THE ARKANSAS WOOD ENERGY PRODUCTS AND FOREST MAINTENANCE INCOME TAX CREDIT. | Beck | Notification that HB1657 is now Act 709 |
|
HB1658
Act 550
· 2 mentions in agenda, chapter
Matched: “…D ENERGY PRODUCTS AND FOREST MAINTENANCE INCOME TAX CREDIT. HB1658 Nazarenko TO AMEND THE LAW CONCERNING THE PAYMENT OF PROPER…”
|
TO AMEND THE LAW CONCERNING THE PAYMENT OF PROPERTY TAXES; AND TO DEFINE "DEPLOYMENT" FOR … | Nazarenko | Notification that HB1658 is now Act 550 |
|
HB1665
· 2 mentions in agenda, chapter
Matched: “…N TO THE ASSESSMENT OF PENALTIES RELATED TO PROPERTY TAXES. HB1665 Wardlaw TO AMEND THE LAW CONCERNING THE INSURANCE PREMIUM T…”
|
TO REPEAL THE CREDIT ALLOWED AGAINST THE INSURANCE PREMIUM TAX FOR ACCIDENT AND HEALTH COMPREHENSIVE … | Wardlaw | Died in House Committee at Sine Die adjournment. |
|
HB1670
· 2 mentions in agenda, chapter
Matched: “…ED ON THE SALARY AND WAGES OF THE EMPLOYEES OF THE INSURER. HB1670 L. Johnson TO CREATE THE PRECEPTOR TAX INCENTIVE PROGRAM; A…”
|
TO CREATE THE PRECEPTOR TAX INCENTIVE PROGRAM; AND TO PROVIDE INCENTIVES FOR CERTAIN MEDICAL OR … | L. Johnson | WITHDRAWN BY AUTHOR |
|
HB1671
Act 1007
· 2 mentions in chapter, agenda
Matched: “HB1671 L. Johnson TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS T…”
|
TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS TAX; AND TO CREATE A GENERAL SALES … | L. Johnson | Notification that HB1671 is now Act 1007 |
|
HB1674
· 2 mentions in agenda, chapter
Matched: “…X EXEMPTION FOR SALES TO QUALIFIED NONPROFIT ORGANIZATIONS. HB1674 L. Johnson TO CREATE AN INCOME TAX CREDIT FOR CONTRIBUTIONS…”
|
TO CREATE AN INCOME TAX CREDIT FOR CONTRIBUTIONS TO CERTAIN RURAL HOSPITAL ORGANIZATIONS; AND TO … | L. Johnson | WITHDRAWN BY AUTHOR |
|
HB1687
· 2 mentions in agenda, chapter
Matched: “…58; AND TO EXEMPT GROCERIES FROM STATE SALES AND USE TAXES. HB1687 K. Moore TO PROVIDE THAT A WATER AUTHORITY IS EXEMPT FROM A…”
|
TO PROVIDE THAT A WATER AUTHORITY IS EXEMPT FROM ALL EXCISE TAXES. | K. Moore | Died in House Committee at Sine Die adjournment. |
|
HB1691
Act 497
· 2 mentions in chapter, agenda
Matched: “HB1691 Torres TO PROVIDE FOR CERTAIN PROPERTY TO BE EXEMPT FROM TA…”
|
TO PROVIDE FOR CERTAIN PROPERTY TO BE EXEMPT FROM TAXATION; AND TO PROVIDE THAT CERTAIN … | Torres | Notification that HB1691 is now Act 497 |
|
HB1698
· 2 mentions in chapter, agenda
Matched: “HB1698 Torres TO AMEND THE LAW CONCERNING THE INCOME TAX TREATMENT…”
|
TO AMEND THE LAW CONCERNING THE INCOME TAX TREATMENT OF EMPLOYER CONTRIBUTIONS FOR AN EMPLOYEE'S … | Torres | Died in House Committee at Sine Die adjournment. |
|
HB1699
· 2 mentions in chapter, agenda
Matched: “HB1699 McCullough TO ADD FIREARM SAFETY DEVICES AND FIREARM STORAG…”
|
TO ADD FIREARM SAFETY DEVICES AND FIREARM STORAGE DEVICES TO THE SALES TAX HOLIDAY; AND … | McCullough | Died in House Committee at Sine Die adjournment. |
|
HB1702
· 2 mentions in agenda, chapter
Matched: “…ICES TO THE SALES TAX HOLIDAY; AND TO DECLARE AN EMERGENCY. HB1702 Wooldridge TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR CE…”
|
TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR CERTAIN MACHINERY AND EQUIPMENT USED IN … | Wooldridge | Died in House Committee at Sine Die adjournment. |
|
HB1708
· 2 mentions in agenda, chapter
Matched: “…FOR MACHINERY AND EQUIPMENT USED IN CLOSED- LOOP RECYCLING. HB1708 Underwood THE KEEP THE BONUS, AXE THE TAX: THE NO-TAX BONUS…”
|
THE KEEP THE BONUS, AXE THE TAX: THE NO-TAX BONUS ACT. | Underwood | Died in House Committee at Sine Die adjournment. |
|
HB1715
· 2 mentions in agenda, chapter
Matched: “…IAL PRIVILEGE TAX ACT OF 2017; AND TO DECLARE AN EMERGENCY. HB1715 Lundstrum TO LIMIT THE INCREASE IN THE ASSESSED VALUE OF RE…”
|
TO LIMIT THE INCREASE IN THE ASSESSED VALUE OF REAL PROPERTY AFTER A SALE OR … | Lundstrum | Died in House Committee at Sine Die adjournment. |
|
HB1732
Act 878
· 2 mentions in agenda, chapter
Matched: “…E ASSESSMENT OF SALES AND USE TAX IN CERTAIN CIRCUMSTANCES. HB1732 Vaught TO INCREASE THE AMOUNT OF THE INCOME TAX DEDUCTION A…”
|
TO INCREASE THE AMOUNT OF THE INCOME TAX DEDUCTION ALLOWED FOR A TEACHER'S CLASSROOM INVESTMENT. | Vaught | Notification that HB1732 is now Act 878 |
|
HB1015
· 1 mention in agenda
Matched: “…LASSROOM INVESTMENT. DEFERRED BILLS Number Sponsor Subtitle HB1015 D. Garner TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO C…”
|
TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO CREATE AN INCOME TAX CREDIT FOR … | D. Garner | Died in House Committee at Sine Die adjournment. |
|
HB1019
· 1 mention in agenda
Matched: “…AND TO CREATE AN INCOME TAX CREDIT FOR DEPENDENT CHILDREN. HB1019 D. Garner TO CREATE THE AFFORDABLE CHILDCARE ACT OF 2025; T…”
|
TO CREATE THE AFFORDABLE CHILDCARE ACT OF 2025; TO CREATE AN INCOME TAX CREDIT FOR … | D. Garner | Died in House Committee at Sine Die adjournment. |
|
HB1021
· 1 mention in agenda
Matched: “…COME TAX CREDIT FOR EMPLOYER-OPERATED CHILDCARE FACILITIES. HB1021 D. Garner TO CREATE THE EARLY CHILDHOOD EDUCATION WORKFORCE…”
|
TO CREATE THE EARLY CHILDHOOD EDUCATION WORKFORCE QUALITY INCENTIVE ACT; AND TO CREATE AN INCOME … | D. Garner | Died in House Committee at Sine Die adjournment. |
|
HB1026
· 1 mention in agenda
Matched: “…E TAX CREDIT FOR CERTAIN EARLY CHILDHOOD EDUCATION WORKERS. HB1026 A. Collins TO CREATE THE ARKANSAS PROMISE ACT; AND TO CREAT…”
|
TO CREATE THE ARKANSAS PROMISE ACT; AND TO CREATE AN INCOME TAX CREDIT FOR TUITION … | A. Collins | Died in House Committee at Sine Die adjournment. |
|
HB1063
Act 875
· 1 mention in agenda
Matched: “…IGIBLE STUDENT AT A PUBLIC INSTITUTION OF HIGHER EDUCATION. HB1063 J. Mayberry TO AMEND THE ACHIEVING A BETTER LIFE EXPERIENCE…”
|
TO AMEND THE ACHIEVING A BETTER LIFE EXPERIENCE PROGRAM ACT; AND TO AMEND THE DEFINITIONS … | J. Mayberry | Notification that HB1063 is now Act 875 |
|
HB1065
· 1 mention in agenda
Matched: “…O CHANGE DISABILITY ONSET AGE FROM TWENTY-SIX TO FORTY-SIX. HB1065 Ray TO CREATE THE INFLATION REDUCTION ACT OF 2025. HB1066 R…”
|
TO CREATE THE INFLATION REDUCTION ACT OF 2025. | Ray | Died in House Committee at Sine Die adjournment. |
|
HB1066
· 1 mention in agenda
Matched: “…. HB1065 Ray TO CREATE THE INFLATION REDUCTION ACT OF 2025. HB1066 Ray TO INCREASE THE STANDARD DEDUCTION. HB1216 Long TO CREA…”
|
TO INCREASE THE STANDARD DEDUCTION. | Ray | Died in House Committee at Sine Die adjournment. |
|
HB1072
Act 876
· 1 mention in agenda
Matched: “…LICENSED CHILDCARE PROVIDERS; AND TO DECLARE AN EMERGENCY. HB1072 C. Cooper TO CLARIFY THE REQUIREMENTS FOR ESTABLISHING ELIG…”
|
TO CLARIFY THE REQUIREMENTS FOR ESTABLISHING ELIGIBILITY FOR THE PROPERTY TAX EXEMPTION FOR DISABLED VETERANS, … | C. Cooper | Notification that HB1072 is now Act 876 |
|
HB1203
· 1 mention in agenda
Matched: “…VETERANS, SURVIVING SPOUSES, AND MINOR DEPENDENT CHILDREN. HB1203 Underwood TO PROTECT ARKANSAS TAXPAYERS FROM A TAX TO COLLE…”
|
TO PROTECT ARKANSAS TAXPAYERS FROM A TAX TO COLLECT TAXES. | Underwood | Died in House Committee at Sine Die adjournment. |
|
HB1216
· 1 mention in agenda
Matched: “…ACT OF 2025. HB1066 Ray TO INCREASE THE STANDARD DEDUCTION. HB1216 Long TO CREATE THE FREE MARKET ZONES ACT; AND TO EXEMPT A B…”
|
TO CREATE THE FREE MARKET ZONES ACT; AND TO EXEMPT A BUSINESS LOCATED IN AN … | Long | Died in House Committee at Sine Die adjournment. |
|
HB1404
· 1 mention in agenda
Matched: “…TO PROTECT ARKANSAS TAXPAYERS FROM A TAX TO COLLECT TAXES. HB1404 C. Cooper TO CREATE A TAX CREDIT FOR CONTRIBUTIONS TO A PRE…”
|
TO CREATE A TAX CREDIT FOR CONTRIBUTIONS TO A PREGNANCY RESOURCE CENTER. | C. Cooper | Died in House Committee at Sine Die adjournment. |
|
HB1435
· 1 mention in agenda
Matched: “…TE FRANCHISE TAX, AND THE ELECTIVE PASS-THROUGH ENTITY TAX. HB1435 Achor TO AMEND THE LAW CONCERNING INCOME TAX CREDITS FOR CH…”
|
TO AMEND THE LAW CONCERNING INCOME TAX CREDITS FOR CHILD CARE; TO AMEND THE INCOME … | Achor | Died in House Committee at Sine Die adjournment. |
|
HB1438
· 1 mention in agenda
Matched: “…CREDIT FOR CONTRIBUTIONS TO A PREGNANCY HELP ORGANIZATION. HB1438 Cavenaugh TO CREATE AN INCOME TAX CREDIT FOR TAXPAYERS SIXT…”
|
TO CREATE AN INCOME TAX CREDIT FOR TAXPAYERS SIXTY-FIVE AND OLDER IN AN AMOUNT EQUAL … | Cavenaugh | Died in House Committee at Sine Die adjournment. |
|
HB1464
· 1 mention in agenda
Matched: “…QUAL TO THE TAXPAYER'S PROPERTY TAX PAYMENT ON A HOMESTEAD. HB1464 Vaught TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS FO…”
|
TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS FOR AND REPAIR OF AGRICULTURAL … | Vaught | Died in House Committee at Sine Die adjournment. |
|
HB1469
· 1 mention in agenda
Matched: “…RTS FOR AND REPAIR OF AGRICULTURAL EQUIPMENT AND MACHINERY. HB1469 Beaty Jr. TO CREATE THE BROADBAND EXPANSION AND EFFICIENCY…”
|
TO CREATE THE BROADBAND EXPANSION AND EFFICIENCY ACT; AND TO CREATE A SALES AND USE … | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
|
HB1472
· 1 mention in agenda
Matched: “…of 4 USED IN PRODUCING BROADBAND COMMUNICATIONS SERVICES. HB1472 Beaty Jr. TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS…”
|
TO CREATE A SALES AND USE TAX EXEMPTION FOR PARTS PURCHASED TO REPAIR AGRICULTURAL EQUIPMENT … | Beaty Jr. | Died in House Committee at Sine Die adjournment. |
|
HB1685
Act 1008
· 1 mention in chapter
Matched: “HB1685 Underwood TO CREATE THE GROCERY TAX RELIEF ACT; TO AMEND TH…”
|
TO CREATE THE GROCERY TAX RELIEF ACT; TO AMEND THE LAW CONCERNING THE SALES AND … | Underwood | Notification that HB1685 is now Act 1008 |
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Thank you, members, for being here. Here's a list of the bills we're going to hear. HB 1303, HB 1540, SB 219, HB 1485, HB 1538, and HB 1716. And with that, we're going to start with HB 1303. Representative Jean, if you will introduce yourself for the record, you'll be recognized.
And I believe you have an
Representative Rick McClure
Unverified
0:35
amendment we need to get first. Yes, madam, if you all pass out the amendment. Lane Jean, State Representative, District 99, and with me
Representative Lane Jean
Unverified
0:43
is Mr. Michael Newton. I'll
Speaker 8
0:46
let him introduce himself. Yeah, Michael Newton, Natural State Renewables. And we'll wait for
the amendment to get passed out. Yeah, they're
Speaker 6
1:04
passing out the amendment. Members, if you'll look over the amendment
and then Representative Jean will speak to
his amendment and then we'll adopt it. If you so,
choose. Representative, you're recognized to
Representative Lane Jean
Unverified
1:38
present your amendment. Thank you, Madam Chair. Members, this is an amendment that when
Representative Rick McClure
Unverified
1:43
we filed the bill, the DF&A was still reviewing
stuff. This is a lot of technical corrections that I would ask that
Representative Lane Jean
Unverified
1:50
we put this in the bill, then we can talk about the bill, and
I'll make a motion we adopt the amendment. Members, we have a motion to adopt the amendment. Do we have any questions about the amendment? Seeing no questions, we have a motion to adopt. All in favor say aye. Opposed? Congratulations. Your amendment is adopted. If you'd like to present your bill as amended.
Representative Rick McClure
Unverified
2:13
Thank you, Madam Chair. Members of the committee, this is House Bill 1303.
This is a sustainable aviation fuel bill that is designed to be built in South Arkansas. Matter of fact, Michael's going to talk about that more in a minute. They have a 500-acre option on some land south of Camden, Arkansas. And what sustainable aviation fuel is, is you take tree tops, kind of the pupwood and the tops of the trees, and you turn them into biofuel for diesel fuel.
And it's jet fuel. It's not high-octane gas fuel. And it's a process that is going to take probably four or five years to build this facility. They're looking at $2 billion plus. And the good news, with the help of Paul Gehring and Jim Hudson, we have worked this bill where it is no fiscal impact to the state of Arkansas. So that's the good thing.
we're going to use roundwood that is harvested in the woods southern arkansas is uh uama did a study for uam but forestry did a study uh for uh uh natural state renewables they say we have three to four times as much pupwood roundwood that they're going to need for this project so we are We are full of Roundwood in South Arkansas.
Right now, you can't give it away. You can't get a dollar a ton for it. People just take it to the mills to get it off the land. This is going to help that market for landowners and also help our forest clean it up. They're going to do a great service to the industry. Highlights of the bill, it will bring at least $2 billion, maybe $3 billion in capital improvements in project. Also, there's going to create somewhere starting off probably about 100
new jobs to 200 jobs, and the average salary is $100,000 per job. The construction of this facility is estimated to have 1,500 employees build this facility south of Camden. It strengthens our forest industry, benefits our loggers, our sawmills, and our landowners. We have partnered with UAM on training and also we'll use training at Southern Arkansas Tech, which is up in
Camden, to help employ people in South Arkansas. It's insured in a long-term economic benefit for our state, and it protects Arkansas by utilizing, and we are a forestry state, by using our natural resources. And with that, I'll turn it over to Mr. Newton and he can get in his words and
Representative Lane Jean
Unverified
5:16
we'll get to questions after he gets through with his opening statement. Good morning,
Michael Newton
Unverified
5:23
Madam Chair, members of the committee. My name is Michael Newton.
I'm Executive Vice President at Natural State Renewables. I do want to say thank you to Representative Jean, Senator Stone and the 64 sponsors of the bill. just a little bit of background on natural state renewables and our relationship with Arkansas. I grew up in Star City. My family still has farmland in Arkansas. I live in Shreveport right now, but the company I have worked for for the last 15 years, Martin Resource Management,
where Martin Midstream owns the Smackover refinery, Cross Oil, where we employ over 200 people. At that refinery back in the late 2018-19, we were taking a look. We had some excess equipment that wasn't being utilized, so tried to partner with Reisland and the soybean producers in the state to figure out how to make renewable diesel. That didn't work out, but we still knew that Long term, there would be some kind of need for renewable fuels production, and after talking
to some of the forester industry, we found out you could take a lot of the wood that used to go to the pulp and paper mills, and we're going to take that, convert that into jet fuel. And so right now, we are taking a look at building about a $3 billion facility. We have an option right now to do that at a 500-acre site in Camden. We've also been looking in the North Louisiana area and around Hainesville because both the
timber and the geology in the North Louisiana/South Arkansas area are very helpful to do this project. As Representative Jean said, we're going to create over 200 permanent jobs for this with the average of $100,000 salary a year. And while we're building it, we'll have over 1,500 people on site. So as we've been talking to all the timber producers in the area, the Anthony Timberlands, the Pylatch Deltics, the warehousers,
they all talk about how this is very helpful for them and all the landowners in the area, because right now there's a lot of sawdust, there's a lot of bark, there's a lot of pulp and paper wood, round wood that can't be used economically for anything, and we're going to create a market for that that's both paying them at or above market price for that wood, plus creating jobs for logging industry and in other areas. So I'm happy to answer anything about the plant, anything else
that may be helpful for you on this project.
Thank you. I have a question. What type of job will you be providing that's
Michael Newton
Unverified
8:29
a really good question so it's going to be a combination of many different jobs most of them are technical in nature so we will hire we'll have lots of operators to help run the plant I forgot to mention while ago part of the plant we will have our own power generation so we'll have a biomass boiler and so we'll need operators for that we'll need technical
jobs such as chemists and engineers in the area. We'll need welders and maintenance people for help to maintain the unit. And then, you know, we'll need logistics people, crane operators, et cetera, to help us run the unloading operations and the moving the wood about the facility. And will most of these
employees actually be from the area, from South Arkansas? Yes, ma'am. So other than the construction, we're
Michael Newton
Unverified
9:18
assuming with the construction, we'll get as many people from the area as we can, but we will have to bring in outside construction help.
But all the full-time jobs will be from the area. We'll partner with the University of Arkansas system and then any local universities to help us on engineering. UA Monticello has been very helpful so far in this project, and we know that SAU and some of the other technical campuses have offered to help us as well on the operator training. And where is your market for this product? That's a great question. So right now, you know, a lot, there are three other projects in the U.S.
similar to ours. And, you know, with the change that's going on in D.C., a lot of those projects are questionable right now. But for us, we have found the market to be in the U.K. and Europe, or they have a mandate of 10% of their jet fuel by the year 2030 has to be sustainable. And of that, after 2027, all the incremental growth cannot come from soybean oil or ethanol-derived sustainable aviation fuel.
So you're going to need something produced from wood or other renewable sources that can meet those demands. And we are working on contracts right now with a lot of the larger cargo airlines and other international airlines, and they seem to be willing to pay a market price without any kind of government incentives that would help us to secure a final investment decision on this project.
Okay, thank you. Members, are there any questions? Representative McClure, you're recognized.
Representative Rick McClure
Unverified
11:06
Ray. You mentioned that you have a location that you're considering, 500 acres. Did I understand you correctly to say you was also considering a location in Louisiana? Yes, sir. So we
Michael Newton
Unverified
11:18
are taking a look at a lot of different, or two different areas right now. Our preference is near Camden in South Arkansas. We have roots in South Arkansas. The owner of the company is a U of A graduate. His family's from Smackover. And so, you know, we, we prefer there, the Louisiana has primacy right now for CO2 sequestration
permits. They also have some other ways to get permitting done faster. And so that is our alternative location, but our preference is here in Camden. Has
Representative Rick McClure
Unverified
11:55
Louisiana offered you an incentive package like this? Not yet. you. Representative
McGrew, you're recognized. Thank you,
Representative Richard McGrew
Unverified
12:08
Madam Chairman. Representative Jean, I see where this is on the physical impact is revenue neutral
and I absolutely understand that there's a positive cost benefit. Be a great for down there in Camden in there and great for the state of Arkansas. My question is also these tax credits are sellable. So is it at what point in time are they sellable, because
Representative Lane Jean
Unverified
12:35
the cost effect doesn't come until a little lighter,
Representative Lane Jean
Unverified
12:44
state doesn't require 80 percent, they'll be available to sell then,
for three years. Thank you. Representative Debray, you're recognized for a
Representative David Ray
Unverified
12:59
question. Thank you, Madam Chair. Thank you, Madam Chair. Representative Jean, I couldn't hear the last response to that question. Before I ask my question, can you repeat what you said on Representative McGrew's
Representative Lane Jean
Unverified
13:08
question? On the tax credits? Yes. They will be available for the state for three years at 80 percent, and then they'll be able to sell anywhere after that for up to three years.
Representative David Ray
Unverified
13:18
So can you explain how the selling of the tax credits works?
You want to get up here? Paul, you want to get up here?
Speaker 51
13:36
Mr. Gehring, if you'll introduce yourself for the record, please. Thank you, Madam Chair, members of the committee. Paul Gehring, DFA. So what I understand the question is, is that how the credits can be monetized under the legislation in terms of selling the credits. So the Department of Commerce will have to certify the project as a positive cost-benefit analysis.
The machinery and equipment that qualifies as sustainable aviation fuel equipment and machinery, they will certify that those expenditures were made and that those expenditures qualify for a 30% income tax credit. Now, once those credits are awarded to the taxpayer in whatever amount that they are provided for, they can be monetized or sold to a third party at the rate of $10 million per year. Now, if the taxpayer also has an obligation under the legislation to where the
state has the right of first refusal, that the state can purchase the credits for 80% of the face value of those 10 million per year. So what the plan would be is that the state would continue to buy those credits as long as those sellable credits are available because the state has the right of first refusal. Now, if the state does not buy the credits, does not elect its right of first refusal, then the taxpayer can sell those 10 million credits per year to a third party. And I just read the amendments. My understanding that under
the amendment, the credits, when they're in the hands of a third party, would be able to redeem them for a three-year period. So they would expire in the hands of a third party after three years after they purchased them. But while the credits are in the hands of the taxpayer, of the owner of project, they would have an indefinite carry forward period, but $10 million would be sold to the state at 80% of the face value.
Representative David Ray
Unverified
15:29
I guess I don't understand this well enough. Why would the state buy the credits?
Speaker 51
15:35
The incentive for the state to buy the credits is that the state would redeem $10 million in credits per year and pay $8 million for those credits. So there is a 20% discount on the cost of the credits, which is just like how the process works for our recycling credits for the steel mills. If the credits were sold to a third party, that third party would be able to redeem them on the third party's income tax return for the full value.
So instead of the third party paying the state $10 million in income tax, either through their estimated quarterly payments or a payment with their return, instead of getting that dollar payment, they
Speaker 56
16:16
would just redeem the credit and attach it to their return. Okay. All right. Thank you.
Representative David Ray
Unverified
16:24
That wasn't my original question. I'm sorry I got off on that tangent. I have a few questions for Mr. Newton. So for somebody that's just now learning about
sustainable aviation fuel. What is the status of your company now? Where are you headquartered? How many employees do you have? What locations? Can you just give
Michael Newton
Unverified
16:49
me a thumbnail sketch of that? Of course. So the high level is that our company started inside of Martin Midstream, which is, you know, about 1,600 employees. Our CEO, Ruben Martin, bought that company out from Martin Midstream, and it's its own independent company. It's headquartered in Texas. Right
now we have five employees, one in CrossFit, Arkansas, three in Louisiana, and then one in Texas. So right now we have spent about $15 million of development costs on the project. We are at the stage to where we will have our next cost estimate in April on determining whether or not that we're moving forward with the project to get to final investment decision.
At that point, we'll spend about another $30 to $40 million on the project. We have secured the option to buy 500 acres south of Camden. It's about three and a half million dollar cost on that. That option expires in July, and so right now we will make the final investment decision probably sometime late this year, early next year, and happy to answer any other questions
Representative David Ray
Unverified
18:14
about that. Okay. Thank you for that background. So I'm
assuming it's more expensive to manufacture sustainable aviation fuel than it is traditional aviation fuel. Is that correct? So if you
Michael Newton
Unverified
18:29
take a look at just on the marginal cost of taking the wood and converting it to jet fuel and all the operating costs associated with that, it's about even when it comes
to versus conventional jet fuel, which is made from crude oil. The initial cost that makes it uncompetitive at first is the capital cost of $3 billion to put the plant in, but we do have a lot of European and UK airlines who both have mandates from a statutory standpoint that they have to meet this demand, and so that's That's the areas that we're focusing on, so we're not depending upon any U.S. government
Speaker 65
19:20
incentives at this point to make the economics work on the project.
Representative David Ray
Unverified
19:25
Yeah, so it's just government mandates from Europe that make
this product, that create a demand for this product. Am I missing something? Because otherwise... So it is
Michael Newton
Unverified
19:35
a combination. So right now, if the European and the UK mandates weren't there, what we would do is we would still make the fuel, we would sell it into California and we would generate RENs, which are generated, you know, like you generate when you make ethanol that's blended into
gasoline and other things. We would generate those RENs and then we would sell the fuel to California and get the LCFS credit. So that would be our backup for if the European or the UK
Representative David Ray
Unverified
20:07
mandates went away. Okay. And I see there's other people in the queue, so I'll ask one more question and then get at
the back of the line, but is your business model to make sustainable aviation fuel, is it profitable without these sorts of tax credits from the state?
Representative Robin Lundstrum
Unverified
20:28
The business is profitable without the tax credits from
Michael Newton
Unverified
20:32
the state, it's just as we're taking a look at here, there's another plant in northeast Louisiana that's gotten a lot of credits and we're considering a site in north central Louisiana that would still pull from the same timber market, we would just build it right across the border in north Louisiana. Okay. I'll hop out of the queue.
Speaker 68
20:54
Thank you. Representative McClure, you're recognized.
Representative Richard McGrew
Unverified
21:01
Thank you. Just one more tax on the credit, and this might be for DF&A. The impact to the state is when they start buying the building materials, the construction, the tax on that, tax on the employees. That doesn't happen until we start building the project. When are the tax credits applied, or are they applied before that impact, after that impact
Speaker 76
21:32
or when will they be applied? Paul Gehring with DFA. So following the construction
Speaker 51
21:49
of the project, there will be a certification process that would go through the Department of Energy and Environment to certify the qualified expenditures for machinery equipment that were used in the sustainable aviation fuel production process.
Once the expenditures are certified by Energy and Environment, Energy and Environment will essentially provide a tax credit to the company, a tax credit certificate to the company. And then the company at that point during a fiscal year will notify DFA that they plan to begin redeeming $10 million per year, or at least for that first year, that will be sold to the state, that the state will purchase for 80 percent of the face value of the credit.
So the credits will not begin to be purchased until the project is essentially completed and E&E has done their work to certify the expenditures and issue the credit. So depending upon the timeframe for the project to be completed and the purchases of the equipment to be made and certified, that would be the timeline for when the credits would first start to see an impact to the state for the purchase of the credits. Now, there will be a period of time that while the company is building the facility and hiring
employees, and there will be construction companies that are going to be hiring workers to build the facility. The state will obviously see the economic impact of those jobs being created through the construction, the purchases of materials, but when we start seeing the revenue impact from the tax credits is after the certification process at Energy and Environment, and then usually that would be within about a year of the certification process would be the first payment of the $8 million.
Representative Richard McGrew
Unverified
23:47
Okay, thank you. And one other question, Indy, that answers, thank you, but I don't understand the buyback of the state's 80% because they're still giving the company the $10 million, so it's effectively still costing the state $10 million. What's the purpose of the state buying them back at 80%? Yes, sir.
Speaker 51
24:09
So the purpose of the state's ability to purchase the credits at 80% of the discount is that the company could arguably sell those credits to a third party.
Now, there is a degree of the credits will be discounted because of the time value of money. If you buy the credits today and you don't have the ability to claim them on your returns, you're going to pay less than $10 million on the open market for the credits. With the ability to have a commitment in the incentive agreement for the state of Arkansas to buy the credits, the company knows that that revenue stream every fiscal year, that 10 million credits for the project will be sellable to the state, so they know that the
state will buy those credits at $8 million a year or at least have the right of first refusal, and having the 80% value of the credit as our purchase price, there's an incentive for the state of Arkansas to buy the credits because we know if the credits were sold to a third party, they would cost $10 million to the state. They may not cost $10 million to the buyer of the credits, but for the state, when those credits are taken on return, there's no discount when it's taken on the return of a taxpayer that buys the credits. All right.
Thank you very much. Yes, sir. Paul, are there other industries that we do similar incentives to? I think earlier you mentioned this was similar to something we've done for the steel industry. Is this something that we've done
Speaker 51
25:38
in the past? Yes, ma'am. Definitely the steel industry has the same mechanism that the right of first refusal of a fixed amount of credits that is purchased per year. I believe also the pellet mill legislation that was from two sessions ago also had this same mechanism
where there was an amount of credits that could be redeemed per year to the state at that discounted rate. Those are the two industries that I'm aware of
that have this process. Okay, so this isn't something new. It's something that's been done in the past. That's
Representative David Ray
Unverified
26:11
why I'm—okay. That's correct. Thank you. Representative Ray, you're recognized. Thank you, Madam Chair.
Mr. Gehring. So the last time this committee met, we had a bill dealing with IDs for farmers, and you told us that that was going to cost somewhere on the order of $400,000 in new staff to administer an ID card for farmers.
I'm looking at the resources required to implement this tax credit program, and it looks like there basically are none. So help me square that. How does it cost $400,000 to print ID cards for farmers, but there's basically no cost to administer this seemingly
Speaker 51
26:52
really complicated tax credit program? There are programming costs in order to create a new tax credit within our system. Now, the fiscal impact in DFA's document contemplates what DFA anticipates our agency
would have a requirement to do work. We don't have, we don't speak to the mechanisms that are going to go into place and the work that's going to be required at the Department of Commerce to enter into the incentive agreement or also the certification process at Energy and Environment to do their review of the expenditures and provide what is the final amount of credits that are authorized. So once energy and environment determines exactly the amount of credits that are earned, DFA will be notified.
DFA will account for those credits in our system, as well as when those credits are purchased or transferred to a third party or redeemed on a tax return. But we do not, in our fiscal impact, reflect a need to add any personnel to do the job duties that are required under this
Representative David Ray
Unverified
28:03
legislation. What about at Commerce? Will it
increase costs for them to administer? I can't speak to if Commerce. I know
Speaker 51
28:11
that they have their team of economic developers that work on these projects,
but I could not speak to that
Representative David Ray
Unverified
28:18
if they have any additional costs. So this sheet only reflects
cost to DF&A? That is correct. This sheet doesn't reflect cost elsewhere in state government? That's correct. Okay. That context, I think, would be helpful to note on these sorts of things. So, I have a question for Representative Jean. The bill
says, I think on page three, we'll have to employ 75 or more full-time employees.
Is that right? That's our bare minimum. Okay. I guess from a philosophical standpoint,
you know, there's a lot of companies in the state that employ 75 or more employees. You know, why don't
we extend all of those companies a tax credit? You know, if we do do
Representative Rick McClure
Unverified
29:08
a lot of tax credits throughout the state, and I'm not opposed to any other manufacturing. I think my record for supporting manufacturing is pretty solid in my 15 years in legislature.
You're asking somebody, if you've got a bill, you
Speaker 89
29:26
want to do it, and there's no fiscal impact, I'll support
Representative David Ray
Unverified
29:38
was going with that question. I was trying to hit you off. So these employees, one thing I'm curious about, it says we'll employ 75 or more new full-time permanent employees. But then if you go up on that same page three to line nine, it says the full-time permanent employees have to have been filled for 26 consecutive weeks.
I mean, just because they've been—I mean, what happens if—permanent means forever. So these people aren't going to be employed forever. So what if they're—I mean, what if they're laid off? Are there any clawback measures or anything like that?
Representative Lane Jean
Unverified
30:20
If this is not profitable to the state, this company gets nothing.
Speaker 51
30:28
Yes, so also that I agree 100% with Representative Jean. If there's not a positive cost benefit analysis, then the project would not be certified as eligible for the credits.
And also, during the period of time in the incentive agreement, the company's progress and maintenance of those employees at those salary levels is required. And if those levels are not met, then there is a formula that's provided in the incentive agreement in order to claw back the incentives that were granted
Representative David Ray
Unverified
30:59
to the company. So that would be handled in the agreement itself? Correct. Okay.
So, Representative Jean, it says on here, again on page three, line 34,
we'll employ 75 or more new full-time permanent employees. But then up on line seven, it says they may authorize the counting of existing employees, I guess, as part of that 75. So my question would be, it's not 75 new employees if
Speaker 89
31:32
they're getting to count existing employees toward that total, is it? Well, what I'm thinking, you know, they've got five people employed right now.
Representative Rick McClure
Unverified
31:44
Existing, to me, would be one of the members come up and run the plant that's the five. That would be the existing. They don't have five people now working for them. And by the way, the Martin part of this, their family ran the oil refinery and smack over for years and years. So they have a background in refining oil to fuel diesel. But that's who the Martin family is. But I would think that would read as, you only got five employees.
So if one of them came
Speaker 89
32:19
up, they would be existing. And Michael, if you've got something additional. What about employees from Louisiana? If there was somebody that lived in Louisiana and commuted, would they count toward
Representative Lane Jean
Unverified
32:30
that total? Well, I'm sure they
Representative Rick McClure
Unverified
32:33
would. I think anywhere you look with a big river still, whether it be over in northwest Arkansas, you count total employees. I don't think they're going to look at their birth certificate and see where they're born, but this is just total.
That's what we have to deal with when we're on the border and we're not living in central Arkansas. We have to, we have to, we have workers
Representative David Ray
Unverified
32:57
from all over. Okay, I was just, I mean, obviously I know companies draw from other states if they're close to a border. My question was just specifically if they would count toward the
Speaker 51
33:06
total for the incentive. Paul, you all got anything that precludes that? I'd be happy to comment, Representative Ray, and I think primarily, and I don't want to speak for commerce, but what we're interested in really is the job being performed in the state of Arkansas
and the income tax from those individual employees also being paid in the state of Arkansas. So if you are a Louisiana resident, you're driving to Arkansas to work, and that's where your permanent job is. Even though you might file a non-resident return, you're deriving your income in the state of Arkansas. And that's what's really important for purposes of arriving at a positive cost benefit analysis is those
Speaker 95
33:44
permanent employees as defined by the bill. Arkansas receiving the benefit of the income for that employee.
Representative David Ray
Unverified
33:51
Okay. All right. I'll hop back out of the
Representative Ry
Unverified
33:58
queue if there's other people there. Representative Rye, you're recognized. Thank you, Mr. Chairman. Gentlemen, can we back up just a little bit? There's two figures that have been out here. One is a 30% tax credit, and the
Speaker 51
34:12
other one is a 80%. Could you explain that one more time, please? Yes, sir. So Representative Rye, what you have is when the facility spends or invests in the aviation fuel machinery and equipment that's going to do the processes to create the fuel, the
Department of Energy and Environment, once they build the plant, they will go out and do a review of the machinery that was purchased and all the machinery that qualifies for the credit, the company gets a 30% tax credit based upon that investment in the machinery. So when the company gets the tax credit certificate, the state of Arkansas has the ability to buy a limit of $10 million a year back from the company, and the state of Arkansas,
instead of buying those credits for $10 million, they pay $8 million, or 80%
Speaker 56
35:04
of the face value per year thank you yes sir thank you mr representative maddox you're recognized thank you
Representative John Maddox
Unverified
35:12
madam chair and representative ray touched on this a little bit i'm just not that familiar could you walk me through the clawback provision how that works how it's worked in the past like how you monitor it and if you can get an example of where there actually was a clawback i'm just not that familiar but could you talk about that a little bit certainly and of course
Speaker 51
35:32
Of course, I'm not sure if anyone from commerce is here, but so what will occur is that under this bill, the company and commerce, if this bill were to be enacted, would negotiate an incentive agreement that would provide, with the goal of providing a positive cost benefit to the state and specify the amount of the credits that would be authorized under the incentive agreement. Sometimes the incentive agreement could potentially state that, yes, you might be entitled to the full 30% of your investment,
but in order to have a positive cost benefit, you might get the full 30%, but only a certain portion are subject to being sold back to the state. So whatever the terms of the incentive agreement are contractual and will control, They have to be, the terms of the incentive agreement has to be in line with all the requirements of the law. And there are metrics and formulas that are in place in the clawback. So if this company is every single year is reviewed, their employee totals meet their
requirements, there's no need for a clawback to be triggered. However, if there's some issue that the employee headcount metrics are not being met, there are specific formulas in the incentive agreement that will provide for what portion of those credits would have to be returned back to the state. Thank
Representative Rick McClure
Unverified
37:09
you. Yes, sir. Representative McClure, you recognize. Gene, working with AEDC, they have benchmarks for companies that are coming in, growing,
that type of thing, for these type of incentives. And it's a little bit complicated, it depends on the district, it depends also unemployment rates come into, meaning the average wage, the product, the impact of the product, the total wage wage every dollar the payroll is then compounded to economic impact throughout the community so ADC takes all of these little pieces of information and at this point as I'm reviewing this I don't see anything out
of the normal from other packages we've looked at do you see anything out of the normal on this particular package you
know we went before we went to DFA we went to Department of Commerce they're very aware of they support this project And I'll be the first to tell you, I'm not the most technical person in this room, but I have seen nothing that's out of ordinary of what we've done in the past. I agree, and I like
Speaker 105
38:11
the project. Thank you, sir. Representative Ray, you're recognized. Thank you, Madam Chair.
Representative David Ray
Unverified
38:21
I appreciate Representative McClure's observations on the incentive process. I guess my question is, is there anyone from Commerce here to answer questions about this bill? I don't see them. I think that's
Speaker 89
38:34
pretty important. I mean, they're the ones that are going to be drawing up the incentive agreement. They're the ones that are going to be administering it. DF&A can't tell
Representative David Ray
Unverified
38:45
us what the costs to commerce are going to be. Commerce, I assume, would be in a better position to answer that, but there's no one here from
Speaker 89
38:54
commerce. Well, Commerce does this on a regular
Representative Rick McClure
Unverified
38:58
basis, checks employment status for a variety of tax credits. That's fine, but that doesn't mean they don't have to
Representative David Ray
Unverified
39:05
answer questions about it. Well,
no, no. I mean, okay. I mean, this is on a special order. I assume Commerce looked at the agenda or knew this was happening today. Well, I don't answer for Commerce.
Okay. Well, if anyone from Commerce is watching the live stream, I do have some questions. It would be nice if they would send someone over.
Representative Rick McClure
Unverified
39:32
Representative Ray, for anybody that needs to, I'll have Commerce over next week and answer any of these questions.
Speaker 89
39:38
They're going to answer the questions before we vote or next week? Well, I'd like to vote on it today. Okay. I'm going to make that motion. Okay. All
Representative David Ray
Unverified
39:57
right. I guess last question, and I'll jump back out of the queue.
Representative Jean, what groups or organizations have endorsed this bill? Are there any taxpayer organizations that have supported this bill? We
have not gone to any endorsement. This
Representative Rick McClure
Unverified
40:12
is just for jobs for South Arkansas and health and timber market down there. I wasn't looking for any endorsements. This is a jobs bill, and
Representative Lane Jean
Unverified
40:21
I'm sure there would be some, but I haven't asked for any. Okay, thank you. Representative Wooten, you're recognized.
Representative Jim Wooten
Unverified
40:33
Thank you, Madam Chairman. This is for DFA to start
with. This is not abnormal. I mean, we've done this for Big River Steel. We did it for Nucor. We did it for many other companies, maybe not in this manner, But to secure economic development for the state and more employees and better salaries, you have to do these
Speaker 51
41:01
type things, correct? I agree, Representative Wooten. So certainly the structure of the tax credit as provided in this bill, as well as the AEDC's role,
Energy and Environment's role and DFA is all very similar and modeled upon the recycling credits for the steel manufacturers that have been in the Arkansas code for several decades. Thank you. This question,
Representative Jim Wooten
Unverified
41:25
if I may, is for Representative Jean. That part of the state is depressed,
is it not? Have they not lost the industry? Have they not lost the population? Well, I mean, everybody can
Representative Rick McClure
Unverified
41:37
look at the population and see that it's declining. And the reason it's declining mainly is the loss of industry.
We've lost a major paper mill in Camden over the last 15 years. You know, I'm fortunate in Magnolia and Columbia County. I have the only lumber mill and plywood mill in one county in the state of Arkansas. They've dismantled the mill across it. It's a shadow of what it used to be. So we've lost a lot of timber business in South Arkansas, and this would just help pick it up. And, you know, we're trying to do things to help all of the state of Arkansas.
And so I don't see where this bill is, what different we've done for the steel mills, what we did for the pellet mill a couple of sessions ago. I think it's a jobs bill, and I don't see the downside in it. We're not impacting the revenue for the state of Arkansas. And none of these things happen unless this thing is profitable, and it's confirmed by the Department of Commerce. Thank
Representative Jim Wooten
Unverified
42:45
you. Mr. Newton, a question for you.
Yes, sir. Did you not make the comment that it possibly would be 200 employees at a salaries of $100,000 average? Yes, sir. That's correct. So the concern about 75 employees and five here and five there is really relevant to the fact that we stand the possibility of having a minimum of 200 new jobs in South Arkansas, where you have a depressed economy already.
And you agree with what you said? I
mean, that is correct.
Michael Newton
Unverified
43:24
Yes, sir. And that's direct jobs. There will be many more indirect jobs. You know, we'll have loggers and truckers and, you know, any kind of expansion for all the restaurants and everyone else around there who would
Representative Jim Wooten
Unverified
43:39
service our plant. So is it not true that every plant like yours, and you mentioned it, but has ancillary people and companies that
benefit from the fact that you're there in South Arkansas?
Michael Newton
Unverified
43:54
Yes, sir. That's correct. And even some of our timber producers that we've been negotiating feedstock agreements for offered to be here today just to testify how much it would help the timber industry. So, you know, we feel very confident that it's not only a benefit for new jobs, but
Representative Jim Wooten
Unverified
44:16
existing industries as well. And is it not true that what they're doing with the treetops is a use of
a byproduct that heretofore has not been utilized?
That's correct. Is it true that the airlines in Europe and other parts of the world
will have access to sustainable fuel that they can use in a viable way? And how will
you get that fuel to them? Yes,
Michael Newton
Unverified
44:47
sir. So the way we would get the fuel to them is that we would make it here in South Arkansas. We would transport it by rail to a terminal that our company, not Natural State Renewables,
but Martin Midstream that owns the refinery in Smackover. We would transport that to a terminal in Beaumont and then put it on
Speaker 65
45:07
a ship to take over for use in Europe and the UK. All right. Thank you very much. Thank
Chair
Unverified
45:16
you, Madam Chairman. Representative Lundstrom, you're recognized. Just a couple
Representative Robin Lundstrum
Unverified
45:20
of quick questions. I'm a little bit concerned that we're building an industry on EU mandates. Can you give me some comfort on that?
Just because they've gone crazy over there doesn't mean maybe we should go crazy too.
Michael Newton
Unverified
45:37
So help me on that process. Just give me the overview. Yeah, that's a good question. So right now, the EU mandates help encourage use of this. But even before, when we talked to the large cargo airlines, the FedExes, the DHLs, the UPSs of the world, they have customers who have certain sustainability requirements for their own use,
and they want to make sure that the fuel that their packages get transported on are carbon neutral. And so when that happens, they are willing to pay up to $25, $30 a gallon for these types of fuels to certify that their package delivered is carbon neutral and not used from some kind of food source as a feedstock. And so that's where even if those mandates go away, there's still a niche of demand out there.
And so we have airlines that are willing to sign up for a take-or-pay contract regardless of what the mandates are for a 10 to 20-year all-take agreement. So whenever we get this financed, you know, it's a $3 billion project, so you're not going to have any kind of bank or equity financing without solid contracts from credit-worthy partners. So this isn't a bet-on-the-come type project. This is something that will be papered up all across the board
to where the feedstocks will be secure, The all take agreements will be secured by a take or pay agreement. And so we should reach a final investment decision that can be contracted up in just high level. You're gonna need about 200 to 300 plants our size in order to meet the long-term sustainability goals.
a lot of these companies, and so while we're not here for regulations or anything on that, the free market is deciding that they value the carbon sequestration, and that can really only be done in places that have both the materials and the sequestration abilities. And so that really only exists in the U.S., in South Arkansas, North Louisiana, and in South Texas, right on the Louisiana-Texas border. So these projects will be done,
and I think they will be done in this
Representative Robin Lundstrum
Unverified
48:20
area. - Okay, thank you, this helps. This is for DF&A. Has there ever been any look back or retrospective audit or review of some of these packages, and we've seen whether it's been good or bad? Has anybody done a
Speaker 51
48:36
look back on some of this? - Representative Lundstrom, there is a process where the legislative audit does an audit of incentives to provide the cost-benefit analysis.
And they do a very in-depth review of projects in conjunction with Commerce, with DFA, to look at all the projects. The legislative audit produced a report that was presented, I believe, in December of all the projects that they reviewed. I'd be happy to send you a copy of that report. I would like to see that. Yes, ma'am. So there is a very in-depth, substantial review of projects that in order so the General Assembly knows what incentives that are being offered in the law are, what's
the return coming back and how effective those
Representative Robin Lundstrum
Unverified
49:21
incentives are. Okay, thank you. And overall, were they effective or win-lose? What's our goal?
Speaker 51
49:26
There is a, so in the legislative audit report, they do provide essentially what the score is in terms of how, because if a score of a project is really just one-to-one for one dollar that we give in incentives, we're only getting a dollar back to the state, you know, we're wanting to have, our goal is to have a higher score than that, that one dollar incentive
comes back with, you know, a higher number than a dollar being returned. So they do have a very good breakdown in their report of the projects that they reviewed, and to identify those scores that they gave to each type of incentive in their annual report. Okay, thank you. Sounds like I'll look forward
Representative Robin Lundstrum
Unverified
50:09
to reading it. Yes, ma'am. It's very helpful. Representative
Representative Jim Wooten
Unverified
50:18
Wooten, you're recognized. Thank you, Madam Chairman.
Back on the fuel again, is this equivalent to 80 and 90
octane aviation fuel, or is it just applied to jet fuel? It's
Michael Newton
Unverified
50:32
the equivalent of a Jet-A fuel that you would use in a commercial airline, and there's no type of modifications or anything else required for the airline to use this. They can use a 50/50 blend of conventional jet fuel with this jet fuel and meet all the requirements of
Representative Jim Wooten
Unverified
50:54
the FAA and ASTM for fuel methods.
Will this not augment the inventory and supply of jet fuel? As I understand it, the airline industry is not on a take-or-pay contract basis. They're on an allocation basis
relative to how much demand they had the past year relative to what they'll be refined the next year so that the companies will know what the supply is going to be. Is it not a limited supply today?
Michael Newton
Unverified
51:28
There is a limited supply today. And I come from the refining industry. And so what happens is that there are certain units inside the refinery that can make the choice of making gasoline, diesel and jet fuel. And so those are tweaked, those conditions are tweaked based on the market conditions. And so I think the conventional refiners will adjust, and then the airlines will secure their supply of renewable fuels needed to meet either their mandates or their own internal
Representative Jim Wooten
Unverified
52:03
standards. But we could reach a point where because of the
way they tweak the supply each year, they look at it and they look at the contracts that you have with them, and then they base that don't supply, and you've got to tell them how much demand you think you
Michael Newton
Unverified
52:23
will have. Is that correct? Yes, sir. That's the way it works for a lot of airlines. For our contracts, we will have a taker pay, so the amount that they'll adjust will be
based on the supplies that they haven't secured via taker pay, but for ours, in order to get our project financed, they understand that they'll have to commit to a certain amount of volumes. All right. Thank
Representative David Ray
Unverified
52:46
you, Madam Chairman. - Thank you, Mr. Newton. - Thank you. - All right, next in the queue is Representative Rye. You're recognized for a question. - Thank
Representative Ry
Unverified
52:54
you, Mr. Chairman. Representative Lane, you've been around this stuff a long time. Let me ask you this, and I don't think we've mentioned it up to this point, is this, will this be declared a super project?
Representative David Ray
Unverified
53:06
- No. - No? Okay. Thank you, Mr. Chairman. Okay. I
guess, all right, so I'm next in the queue, so I'll go ahead with my question. Mr. Newton, did I understand you correctly at the beginning when you were describing the, I think I asked you about the profitability of your industry. Did I understand you correctly saying that the primary barrier to viability or profitability is the upfront capital investment
because it's quite significant. Did I understand that correctly? That's correct. Okay. So, Representative Jean, to that point, is this credit permanent? Will it exist? Will companies that meet the requirements in here, will they continue to receive the credit forever, or is the credit just for a defined period of years while the company gets off the ground? Representative Ray, I believe in the
bill that the project will have to be commenced, I believe, by December of 27. So if
Speaker 51
54:10
there was not a project that was commenced by that time, I'll have to go back and just look at the bill,
but I believe that's the deadline is that now the General Assembly could come back in a future session and decide to extend that date for if there are additional projects. But for practical purposes, you would no longer be eligible for this credit unless the project
Representative David Ray
Unverified
54:34
was commenced by that deadline. Okay. So that
raises another question in my mind, which is if this is such a great idea, Why does it expire in 2020 for projects that begin before 2027? I mean, it seems like if we want to attract aviation, sustainable aviation fuel companies
to the state, we would want to attract all of them,
or is this just written for one specific instance? Representative
Speaker 51
54:59
Ray, the steel incentives are structured in the exact same way. But that wasn't my question. Well, certainly, but I was just going to explain, and possibly the reason for that would be is that the ability for the state to be able to come back and consider the value of these projects as they are and the value of the incentive to see if they need to be tweaked, it allows the General Assembly that power to really reconsider whether or not the incentive is worth the
Representative David Ray
Unverified
55:31
state's benefit that they're providing to the taxpayer.
So you answered my question
by stating that there is a cutoff for projects, but that wasn't what my question was. My question was about
how long the credits, the company will continue to receive the credits. Will they receive them into perpetuity, or is there some sort of, Representative Jean, is there some sort of duration under which they will qualify? Representative Ray, I'm sorry
Speaker 51
56:01
I misunderstood your question. That's okay. So now that I understand the question, so when the credits are authorized to the company
and Energy Environment certifies the amount of the credit, the company has a legal obligation under the law to sell their sellable credits to the state of Arkansas at a maximum limit of $10 million a year at the 80% discount. Now, the credits that would be claimed on the taxpayer's return, those are indefinite credits. They do not expire. But if the credits are sold to a third party under the amendment that was passed out
Speaker 56
56:37
this morning, the third party would have a three-year period to redeem the credits.
Representative David Ray
Unverified
56:43
Okay. So my last question on this point is just to Representative Jean. If the barrier to this type of industry is the upfront capital costs, why wouldn't we just put a duration on the amount of time they could receive the credits?
Representative Rick McClure
Unverified
57:01
Well, you know, what we crafted this bill was to make sure that this had no impact on the state of Arkansas. So up front, it has no impact on it. And the duration, I don't think we ever even thought about extending it any farther.
We worked with DF&A to get this bill crafted so it doesn't hurt the taxpayers of the state of Arkansas up front. But if you want me to add that to the bill, I'll look into it. Well, I
Speaker 89
57:32
think we should have that conversation because... And we can bring another bill back to do it. Okay. All right. Thank you. Representative McClure,
Representative Rick McClure
Unverified
57:44
you're recognized. Thank you, Madam Chair. Representative Jean, I'm going to put my economic development hat on here.
I have not spoken to AEDC, but I'm just trying to figure the regional impact. So once I get up to 200 employees at average wage, $100,000, that's a lot of payroll dollars in your area. There's an impact fee once you put a dollar in the economy locally, how many times it circulates. I'm going to count that as three. That's just me and my thinking. There's a ripple effect into the trucking, the transportation, oil, gas, tires, all that kind of stuff. I put $30 million there.
We haven't even talked about the forestry part of it yet. So I'm considering this is about a $100 million impact to South Arkansas. So would that be a good
deal for South Arkansas? Oh, absolutely. I mean, this area that has lost paper mills, has lost lumber mills, mills have been dismantled and Fordyce all over. And, you know, people don't realize it, but timber is the number one agriculture product in Arkansas.
It's not rice, it's not soybeans, it's timber. And this will help this area. And people understand timber. We're in the timber basket. It will provide a lot of jobs, and we've done everything we can not to hurt the state financially. So, you know, and I think we've got to be a little bit more statewide in our hoping everybody does good and try to build up the whole state. And this is, yes, this is a South Arkansas jobs, but South Arkansans are residents too,
and we need, this is just the best I could do. And we work with DF&A, so this would not take an impact on the state. That was very key to me as budget chair. And this bill does that. And the Department of Commerce will only provide this stuff when this company becomes profitable. How far off was
I on AEDC's expectations of an annual economic impact, regional impact? Well, you've done a lot of
Representative Lane Jean
Unverified
59:58
economic development work locally. You know more about it than I do.
Representative Les D. Eaves
Unverified
1:00:02
OK. Representative Eves, you're recognized. Thank you, Madam Chair. My question really is
not about the tax credits. It's about the fuel itself. Is this an FAA-approved, I mean, straight drop-in for Jet
Michael Newton
Unverified
1:00:22
A? It functions the same way? Yes, sir. Right now, it's approved up to a 50-50 blend. There have been tests with it where both United and Virgin Airlines and Delta have done a test in just one engine to where they used 100% of the fuel, and it's operated without any issues.
They actually say it burns a little cleaner because it is all synthetic, so that's...
Representative Les D. Eaves
Unverified
1:00:45
So when you say 50/50, Jet A and then this sustainable fuel or alternate
fuel? Yes, sir. Okay, and it's refined to the degree that Jet A would be. Is there the possibility of refining it less as a drop-in
Representative Robin Lundstrum
Unverified
1:01:00
replacement to just diesel? Yeah, so the process that we're using, I'll give a
Michael Newton
Unverified
1:01:06
high-level overview, and this may be too much, But basically, you bring the trees in, you chip them up, dry them out into what looks
like gunpowder or coffee grinds. You take that into a gasification reactor, which will break the hydrogen and carbon into separate molecules. You'll then build that back up using the Fischer-Tropes process into a wax, and then you'll take that into a hydro-treater, similar to what you would use in a regular refinery, and then at that point you decide whether or not you make gasoline, jet fuel, diesel, or lubes with
it. So as the operator of the facility, we can make any of those four different products if we
Speaker 143
1:01:52
desire. That's exactly how I thought you made it. And I
Speaker 144
1:01:57
would say this, based on what Representative Jean said, I mean,
Representative Les D. Eaves
Unverified
1:02:01
the largest export Arkansas has is aerospace products, aviation-related parts and components, so I think this Jet A product would fit right into that. So thank you for the information. Thank you. Members, are there any other questions?
The Department of Commerce is sending someone over is what I was told. Hallelujah. Oh, I didn't see her come in.
I'm sorry. Is there someone? Can you speak for the
Representative Lane Jean
Unverified
1:02:42
Department of Commerce? If the Chief of Staff can't speak for him. Jim Hudson was at the Department of Commerce forever. If you'll both come to the table
and please introduce yourself for the record.
Speaker 148
1:02:57
It's been a minute. Jim Hudson, Secretary of DFA, it's been a minute, but I think I still
Speaker 150
1:03:03
remember the tax incentive process pretty well. And I'm sorry, I had to step out earlier for a meeting with the governor. What exactly were
Speaker 151
1:03:11
you, information you're looking for that
we can help you with related to commerce? Representative Ray has a question about the cost to the Department of Commerce for
Representative David Ray
Unverified
1:03:23
administration of this incentive. Well, when I asked Mr. Gehring earlier about the cost of implementation, he said there was
no cost to administer the tax credit on behalf of DF&A because Commerce is doing it. And so what he was essentially saying was that the costs on this sheet only reflect DFNA's costs. So I guess my question is, to commerce, what will be the cost to administer these tax credits? You
Speaker 150
1:03:51
know, it would be my expectation, I can visit with Secretary McDonald as well, that they should be able to incorporate this.
We're talking about one project. They don't do the detailed work of looking at all the invoices That actually gets done both at Energy and Environment under this bill, and then DFA will audit it as well. So their workload will be relatively minimal in terms of, you know, doing the project, you know, evaluating it, conducting the cost-benefit analysis, and preparing the paperwork. I would not expect they'd have a need for additional staff to be able to do that. But I'll let the Chief of Staff tell me if I'm wrong.
Speaker 153
1:04:34
Allison Hatfield, Chief of Staff for Commerce, and I agree with
Representative David Ray
Unverified
1:04:40
Secretary Hudson. Yes, sir. Okay, so there won't be, the department won't come back and
Representative David Ray
Unverified
1:04:49
positions to do this. No, sir, I do not anticipate that. Okay, so I guess from a top level standpoint, I mean, help me understand the Department of Commerce's aims in terms of attracting business to our state. Because, you know, for many years, everybody said, oh, we need an auto plant.
If we could just get an auto plant, boy, we'd be rolling in it. Nobody talks about an auto plant anymore. Sustainable aviation fuel, help me understand, there's a million different categories of companies that we could attract to the state. Why do we need a tax
credit for this specific, seemingly very narrow category? And for those that just, Mr. O'Neill, since you just came in,
if you will recognize or introduce yourself for the record and you can answer any questions you
Jay Robertson
Unverified
1:05:49
feel you need to answer. Hi, Clint O'Neill, Executive Director, AEDC. Thank you for having me this morning. Sorry, I just ran in and a little out of breath. Need to get in better shape. I would say the ideal project for us is one that raises the per capita income of Arkansans, one where companies utilize the resources that we have available, whether that's raw
materials or just a great fit for communities when it comes to real estate, workforce, taking advantage of the great business cost of Arkansas. But for us, projects that come in, have a high capital investment, are very attractive to us. It's excellent for communities. The multiplier effect of a construction project like that and the property taxes that a community would receive are just such great economic benefits. Jobs and jobs that pay higher than the average per capita income for the county and for the state are incredibly attractive.
So, you know, a bill like this that would lead to a project that hits the sweet spot in those categories would
Representative David Ray
Unverified
1:07:01
be attractive. So, you probably weren't able to hear some of my earlier questions, so I'll just repeat a few of them. So on page three of the bill, it says anyone who receives this tax credit has to employ a minimum of 75 or more new, full-time, permanent employees.
So there's three conditions there, new, full-time, and permanent. I guess one of my questions is, you know, it says they must be new, but then up on line seven of the same page, it says, well, they may count existing employees toward that total. So if you can count existing employees, what's the point in saying that they must be new? Another question would be on the permanent aspect, no employee is permanent. So what
happens if a company like this that receives the tax credit on the precondition that they're going to create permanent jobs and then they have to have layoffs or something. What happens in that instance? Do they continue to receive the tax credit or is the
agency going to revoke it? So the definition of
Jay Robertson
Unverified
1:08:19
permanent for the purposes of a project like this would be the term of the agreement. So if it's set up under a 10-year term or a 15-year term, the company would be held responsible
to retain those positions for the life of the agreement. When it comes to new versus retained positions, I believe the language, the intention is that these would be new full-time jobs. However, there's a carve-out exemption in rare cases where the AEDC Executive Director and the Secretary of DF&A can jointly agree to say this is a rare circumstance and which would be worth it to classify retained positions as new positions. So again, that's rare. It has
happened on all of our incentive programs to date, once within the Sanders administration, and that would be in, again, in rare circumstances. Okay. And I appreciate
Representative David Ray
Unverified
1:09:23
you mentioning the term of the
agreement. One of the questions that I asked previously was, you know, a company that qualifies under this, once they qualify to receive the credit, do they just receive the credit in perpetuity? Or is there a defined period of
time in which they receive the credit and then it goes away? Why
Speaker 150
1:09:53
don't you let me take that one, Representative Ray. I think there was some confusion the part of the conversation I heard there's a difference between the utilization period for an already issued credit and then the time period under which credits are generated based on the capital investment by the company the
issuance of credits is not in perpetuity it is going to be a defined period in the incentive agreement between AEDC and the company that says this is what we think it's going to take in terms of the period to build your plant. You've got to complete it within that time period. Here's the CapEx value for that. And it will be that that sets the cap for the amount of tax credits that you can get as specified in the statute as well. You can't get any more than what's in the incentive agreement.
You may actually get less depending upon what's in the statute. So it's not a question of the company will continue to generate the right to receive achieve future credits in perpetuity. That's just not how it works. It's capped to the actual capital investment period. Okay. Thank you for
answering the question. Thank you. And Representative Wooten, you're recognized.
Representative Jim Wooten
Unverified
1:11:12
Thank you. Since the auto industry has been brought up into the discussion,
isn't it a fact that we lost some of the auto industries that we're going to locate? This is for commerce, economic development, is it not a fact that some of the auto industries that we lost was because the incentives were
Jay Robertson
Unverified
1:11:41
greater in the other states? I would say that is true to a certain extent. Every project is a little different.
There are some projects that we've worked in the automotive industry where we simply did not have the real estate requirement i think about the ford blue oval project that went to the memphis mega site the memphis mega site is 3 500 acres with all utilities extended we were not able to compete for a project like that just due to lack of having sites but if you look at the three primary categories that all companies are looking at real estate including all infrastructure workforce and a range of business costs, I think they all stack up in a little different
ways when companies do their multi-state location analysis. But there have been times where maybe a company's more comfortable with the workforce in one state or another, the real estate or the business cost. So I would say that's a factor, but I don't know that I could point to one project that It
Representative Jim Wooten
Unverified
1:12:43
was head-to-head, apples-to-apples, and we lost only because of incentives. But it was a factor. Yes, sir, always is. All
right. Follow-up. As an example, the Toyota truck plant that was going to be located in West Memphis
that ended up in San Antonio was a market condition because people in Texas buy more pickup trucks than any other state of the
nation. Is that not a fact? Yes, sir. We believe
Jay Robertson
Unverified
1:13:15
that the two projects, I believe, around 2005 and 2007, where Toyota located projects in Texas and then in Mississippi, both of those projects evaluated Arkansas as a part of that. But for the one that went to San Antonio to build trucks, I do believe that the customer demand, the market,
was certainly a factor in that
Representative Jim Wooten
Unverified
1:13:37
location decision. Do you feel that Arkansas, because of the production of steel in northeast Arkansas, is more advantageous today for the automobile industry than we were 10 years ago, 15 years ago? Yes, sir. Absolutely. So the northeast part of the state has, we've given incentives to Big River Steel and others, no car and others up there to locate in the northeast part of the state.
And what we're talking about today is South Arkansas, which would you agree is depressed, that they've lost industry, that people are unemployed, that they're having a hard time making ends meet? Would you not agree that South Arkansas deserves some action and Representative Jean and DFA and Commerce see the need to locate such a plan as this in Southwest Arkansas?
Jay Robertson
Unverified
1:14:36
Every region of the state is incredibly valuable to us, and any time that we could locate a facility and help facilitate that, especially in parts of the state that have lost population and lost jobs, are incredibly special opportunities to us. And yes, sir, we want to be leaders in recruiting industry to South
Representative Jim Wooten
Unverified
1:15:00
Arkansas and all parts of the state. Would you agree that there's a
risk to any new venture or to any new plan, that there's an economic risk?
Let me rephrase that. Is any investment a surety?
No, sir. There's always a risk. So any business is a gamble. Well, I think
Jay Robertson
Unverified
1:15:32
we've made very good strides as a state to be good stewards of taxpayer dollars and to put in protections so that we're not providing funds that we can't recoup. As a part of due diligence, we always want to increase our confidence that if we provide
any upfront funds, we're working with an entity that has the ability to pay back those funds. So I think that we could strike a good balance of being aggressive and pro-business, but protecting
Representative Jim Wooten
Unverified
1:16:02
ourselves as a state. You answered that exactly the way I
wanted you to. Thank you very much. Representative Lundstrom, you're recognized. Thank you.
Representative Robin Lundstrum
Unverified
1:16:14
Thank you. Is this on? Yes. Just
a quick question on, and I'm not sure who can answer this,
but we do static scoring and we do dynamic scoring now. Has anybody scored this dynamically? I would think if we're going to spend, if you're going to come to the state and spend $2 billion, thank you. There's probably been some due diligence on what this, the amount of tax dollars and investment is going to bring back to the state. Maybe somebody
Speaker 150
1:16:44
could answer that. Yes, ma'am. I think that's actually, you're bringing up a very important point just kind of for us to get focused on what the bill is doing. The bill is authorizing an incentive, you know, on the books.
it is not awarding an incentive to any company. It is not approving siting of a plant anywhere. It is just approving for DFA and primarily for commerce to be able to enter into an incentive agreement if they decide to build a plant here. And more importantly, if the cost benefit analysis, which is a dynamic scoring, their econometric models that they use at AEDC, of their dynamic scoring models that take into account
the inputs in terms of the values that are nearing to the state and then also the outputs in terms of the tax credits. So it will be dynamically scored, but that scoring will not occur until somebody comes to ADC and says, we want to do a project. Here's the promised capital investment. Here's the promised payroll. They run the numbers and the numbers justify us making the investment back to them. So that will be yet to be determined, Representative Lundstrom. Okay, thank you.
Representative Richard McGrew
Unverified
1:17:58
Representative McGrew, you're recognized. Yes, just a little bit of a clarification. In the beginning, I didn't understand how and when the tax credits was going to be. So now I'm understanding under the agreement that you make, Commerce is going to make us sure that those tax credits aren't dispensed until the work until it is a positive response to the state. And also, isn't it an easy assumption that if this company is successful,
the positive impacts on the state of Arkansas could go on for years after those tax credits have been used. Is that correct? That's correct. Thank you. Representative Breyer, you're recognized. Thank you,
Representative Ry
Unverified
1:18:44
Mr. Chairman. Paul, maybe you can help me with this one. You know, we brought up the part about the 400-something thousand dollars that it was going to take to implement this with the farmers. But then now we're talking about a different situation with a, okay, now we need to know the difference between the two functions, I think.
When you look at a new implementation of some type of a workload that has to go in on something that we were talking about the other day with the farmers, you got that. But this is totally different because these folks do this all the time. Is
Speaker 51
1:19:26
that the reason that there's no impact? I think also for purposes of our personnel needs, you give the farming card as an example. There was testimony that there were 37,000 potential eligible applications that DFA would have to process,
verify, and then provide, produce a card back to the farmer. that would require personnel. Under this bill, there is a process that would occur over at the Department of Commerce to evaluate the project, enter an incentive agreement only after that there was a positive cost benefit analysis performed, that DFA could be consulted on that positive cost benefit analysis, and then also energy and environment if once the project was
essentially completed and the capital expenditure was there on the ground in the state of Arkansas, Energy and Environment would then review and verify that the machinery and equipment that was purchased by the company for this investment actually qualifies for the credit. Once that review by Energy and Environment is completed, then a tax credit certificate would be generated and put on the books of DFA so that we could keep track of the credit as well as the process
to buy back the 10 million in credits per year. That process, in our view, would not require DFA to add any additional personnel. We would
Speaker 56
1:20:55
add those duties to our existing job duties within the Office of Tax Credits. Thank
you. Thank you, Paul, and thank you,
Chair
Unverified
1:21:05
Mr. Chair. Representative Eaton, recognized. Thank you,
Representative James Eaton
Unverified
1:21:07
Madam Chair. Representative Jean, would you say that the timber industry is struggling right now? Yes, most definitely. And
Speaker 3
1:21:16
it seems like that margin is very thin for those folks. And especially for what this product is going to be, the
pulpwood business, which this would fall into. Yes, sir.
Representative James Eaton
Unverified
1:21:25
Which leads me to is this, the resource that Mr. Newton is going to use is almost an, isn't a
very valuable resource. So it seems to me and And the people in my area would love to have an outlet for their almost unused product. So it's an additional fiber. And along with that, I missed the first few minutes, Mr. Newton, I apologize on that. Is your plant going to use sludge or any part of that?
Speaker 65
1:21:55
I'm not familiar with sludge, but I do
Michael Newton
Unverified
1:21:59
not think so. Okay. Just kind of a high-level overview, we will use the tops, the thinnings, we will use sawdust, bark, all those kind of things, and we'll buy about 3.5 million tons a year. And so when you're going back to Representative McClure's question earlier about the total number of value, we're going to spend somewhere between $50 million to $100 million a year
just in wood that is currently not going to the forestry industry that they're just cutting and letting rot or having to pay somebody to take away so in our minds there's at least 50 to 100 million dollars of value without any ancillary dollar dollars just to the state of Arkansas because all the almost all the forestry that we're considering for
Speaker 65
1:22:47
this project is in Arkansas and a follow-up and
Representative James Eaton
Unverified
1:22:52
if I were and a part of that my point another point I had there was that will really help the logger side of it because they aren't really, they aren't getting anything
at all out of that, the byproduct they're going to bring you right now. So it does
Representative Jim Wooten
Unverified
1:23:09
lay there. So it does multiple things.
Michael Newton
Unverified
1:23:12
That's correct. And then when we've talked to the timber industry, they also said it's going to help all the truckers that have to bounce back and forth between the agriculture on the soybeans and rice side to go haul those things during the harvest season. It gives these truckers a lot more steady work because we're going to be taking in material every day.
Representative James Eaton
Unverified
1:23:35
And another point I just wanted to make was you're going to help a lot of people that are struggling more than just up
Representative Robin Lundstrum
Unverified
1:23:47
to 200 that you're employing here. Yes, sir, by far. Thanks. Representative Lundstrom, you're recognized. Just a quick question. What is this going to cost on infrastructure to the area? How is that
gonna be handled, water, sewer, electric, all that process? - Yeah, so right now we're going through
Michael Newton
Unverified
1:24:05
all those cost estimates. And so for us, our 500 acre site
has rail infrastructure already. It sits between two major highways. So we will be adding a overpass over the rail siding, over the railroad track to keep any kind of any kind of backup there from any trucks that are waiting to enter the plant, all the roads and infrastructure on the plant site, we're going to be building ourselves. We have lots of staging area to keep any kind of nuisance off the road, so all the infrastructure
that we can imagine is going to be done on our own site, including the power. Right now there's a 30 megawatt line that goes across the site, but we're going to have our own power island there, which is basically our own biomass boilers to generate our own power. So from the infrastructure standpoint, I don't see a lot of taxation upon the
existing systems. Okay. Thank you. Members, I see no other members in the queue for questions.
I'm going to go and see, I don't see anybody signed up to speak against or for the bill. So I'm going to ask, is there anybody in the audience would
like to speak against the bill or for the bill? Seeing
Representative Lane Jean
Unverified
1:25:29
none, Representative Jean, would you like to close for your bill? Yes, ma'am. Thank you. Thank you, Madam Chair.
Representative Rick McClure
Unverified
1:25:34
Once again, Natural States is putting up the money to buy this land. You've heard them. They're going to take care of their own infrastructure needs.
Any of these tax credits will not happen until they're profitable. It's a good deal, it's a good investment, $2 billion in South Arkansas in a depressed area, a minimum of $2 billion, and, you know, providing 100 to 200 jobs at $100,000, I would appreciate a good vote on this, and I'm closed, and I'll make
Representative Lane Jean
Unverified
1:26:06
a motion that we do pass as amended. All right, members, we have
a motion on the floor for do pass as amended.
discussion on the motion representative ray you're recognized thank you madam
Representative David Ray
Unverified
1:26:23
chair uh colleagues i know i've asked a lot of questions that probably come across as critical of the bill so i just want to provide a little context for why i had that posture first of all i'm thrilled that there are companies that are interested in coming to our state i'm thrilled that there are people like like Mr. Newton that want to invest in our state. I think that is absolutely fantastic.
You know, so I'm not, I think all of that is great news. It's good for South Arkansas. I believe wholeheartedly that things that are good for one part of the state are good for other areas of the state. I'm just frustrated with making tax policy in a way is specifically designed just to benefit one single company. I am fully committed to doing everything that I can to build the most pro-growth, pro-business, most economically competitive state
in the country and doing that in a way that lowers taxes for every company in our state. I think I'm afraid that at the end of this session we're going to go home to our districts and our constituents are going to ask us what did we do to lower taxes for them. And the only thing I'm going to be able to say is, well, are you a data center? Or are you a sustainable aviation fuel company? Or are you a packaging company? Because if the answer to those questions are yes, then sure, we did something to help you. But
in a broad-based way, what did we do to lower the taxes for all businesses in our state or for all individuals in our state um uh you know we're about a month from the end of session and i'm just being honest here i don't feel like uh i don't feel like we've done a lot to benefit the taxpayers of this state um to really improve our business climate overall so um that that's just the context for why i was asking those questions
that i asked so i just wanted to
Representative Les Warren
Unverified
1:28:31
share that with the committee representative warner recognized michael i would just like to say i was born in camden grew up 18 miles south and smack over for the last 40 plus years i've watched population decline down there i'd like to personally say thank you for considering doing this in South Arkansas. I think it could be something that would be great for that area. I still love
South Arkansas and want to see something good happen down there to revive it. So thank you for considering doing this and I hope that it goes extremely well and we have a lot of success down there. Thank you. Thank you very much. Representative Wooten, you're
Representative Jim Wooten
Unverified
1:29:23
recognized. thank you madam chairman i just want to follow up on what representative warren made a comment and then share with
you that that is a depressed part of the state
they have difficulty down there and the forest industry uh is in a difficult situation today but in addition we we have incentives for anybody that wants to come in this state i don't know why we're hung up or why chair of vice chairman ray is hung up on favoring one industry and the governor with tax cuts the governor has decided to defray any action in
this session on tax cuts that will handle that and on top of that we've got the recessionary in front of us perhaps but in the conversation with secretary hudson this morning They're going to redo the forecast. And if it holds true to what we've been told thus far, then we're going to have the money for some type of tax cut. And so, I mean, this is a situation here where we can help a section of the state that is suffering, that is hurting.
And we're talking about tax cuts, and that's fine. And I hope we can. And we probably will be able to. So injecting that tax question into it and injecting the fact of the question as it relates to helping just this industry, that doesn't need to be—we don't need to talk about that. This company has stated and DFA and the Commerce Department and Energy and Environment have
gone through and looked at it. This is a viable situation. And we need to take advantage of it because we know that fuels are moving this way. So we need to take advantage of having one. There may—the insulary value, truckers, auto supply, truck supplies, diesel fuel, it just goes on and on. And I guarantee you there will be some other industry that will want to locate down there because it's close to them.
And not only that, they're building their own power plant. So this is a win-win situation for Arkansas. And sure enough, for Southwest Arkansas, Camden, Magnolia, Crossett, Eudora, Dermont, Lake Village, they'll all benefit from it. So I'm
voting yes. Thank you. I'm just
Representative Ry
Unverified
1:32:20
kind of echoing what Mr. Wooten is saying here.
You know, you got 200 jobs, up to 200 jobs, and it's got a compound in effect. I mean, you pay someone $100,000 a year, they're going to go to the grocery store, they're going to buy automobiles, they're going to do a lot of things. But I can't
see anything but good coming out of this. Thank you. Okay, members. Seeing no others to speak on the motion. We have a motion do pass. All in favor, say aye. Aye. Opposed, say nay. No. Congratulations, Representative Jean. Your bill has passed. Thank you all for coming.
Speaker 174
1:32:59
Mr. Chairman, Madam Chairman, members of the committee, thank you
very much. With that, members, we're going to go to HB 1540, Representative Mayberry. If you'll go down, introduce yourself for the record, and you'll be recognized. And she has a handout that we'll be giving out, members. Just as a reminder, this is one that does show a physical impact, so we won't be able to take a vote, but we will be able to hear and debate it.
Representative Mayberry, if you'll recognize yourself and your guest, and then you'll be able
Representative Julie Mayberry
Unverified
1:33:51
to present your bill. Sure. State Representative Julie Mayberry. Pressure. Hi, I'm Katie Sursa,
Katie Sursa
Unverified
1:34:02
and I am with Achieve Community Alliance.
Thank you, ladies. You're recognized.
Representative Julie Mayberry
Unverified
1:34:08
Okay, I'm giving you a handout because I like visuals, and I felt like this might help explain the true purpose of this bill. So as it stands now in Arkansas Tax Code, there is a deduction for someone raising a child with a disability. It is a $500 tax deduction, and you can see my handwriting at the top.
It's been there since 1991 at $500. I also want to point out on that form that there's no medical professional that has to sign this form. It's just the person saying, yes, I have this person and I helped take care of them. Okay, there's no verification that any of this information is true. And I do believe that there could be, you know, no way of knowing for sure, but there could be some fraud with that.
If you look at the next page, the next one is actually the Certificate for Individuals with Developmental Disabilities. This one is a tax credit, also for $500. This one, if you'll notice at the bottom, it does require a doctor's signature or a licensed psychological examiner, a licensed psychologist, and what have you. This one was established, I see trying to figure it out, AR1000DD is the second form I'm looking at.
If you notice on this, it was established in 1977 at $500. It's been $500 since 1977. So, when you put that into the inflation calculator, that actually shows up as $2,727.20. Well, I've been in this legislature long enough to know that if I come to you and say, we need to bring this up to today's dollars, y'all are just going to go, well, there's
just not enough money for that. I understand that. So what my bill proposes to do is, first of all,
eliminate that deduction, because I do believe there might be some fraud, and I don't think that the deduction really helps people as much as the tax credit does. I want to simplify things for people. I don't want them to have to fill out two different forms. I'd love to give them one form that stays around, and that's what this
other form is. Now, I want to point out one other thing on that tax credit form is that we are going to change the definition to meet the federal definition of a developmental disability. If you look at that AR1000DD, you'll notice that there's boxes that you can check. The people with developmental disabilities don't always fit in one of those boxes, And the federal definition, if you look at the very next page, helps give us a better definition so that someone doesn't fall through the cracks.
And that's what I'm trying to do. Using those checkboxes is just not really an adequate way. There are some people who just do not fit into one of those boxes, but clearly they have a developmental disability. So that's the other part of this bill. Then the last part of this bill that I hope to be able to solve, and it might require another bill or at least a rule change by the Game and Fish Commission, and how this whole idea
came up to being was Katie Sursa reached out to me in maybe September saying that over at UCP that they hold a fishing derby every year and they can't get their clients to have a discounted Game and Fish Commission license. So I'm going to let you hear her story and why this bill might actually help that situation as well. Thank you, Julie,
Katie Sursa
Unverified
1:38:35
and thank you, honors of the committee.
So hi, I'm Katie Sursa. Like I said, I am with the Chief Community Alliance. We just renamed from United Cerebral Palsy, so it's the same company, just renamed to to better reflect the people that we do serve, because we serve a much broader definition than just cerebral palsy. We currently serve over 300 clients statewide. We are a statewide company, and we employ over 750 people in a statewide. Now we do have a fishing derby here in central Arkansas, and we have had this fishing derby
year over year for the last, I believe, seven or eight years, and it is in conjunction with the Game and Fish Commission. They have generously helped us throw this every single year, and every single year for all 65 of our clients that are here in central Arkansas, we purchase a three-day license, which is $6 for our people, so that they are licensed and legal to go fish, because we do use city resources and we want to make sure that we're honoring laws and regulations
of the state. However, every single one of them should qualify for a developmental disability license through the Game and Fish based on the definitions that are currently established. The problem with that is that the documentation in order to prove that they are eligible for this isn't something that our people can provide. Even though they do have the disability, the documentation is limited. So the four kinds of documentation, if I can think on the top of my head, is, oh, thank
you, is, yes, yeah, so you have the Arkansas Game and Fish handout, but the first one is a Social Security award letter, which means that you are approved for Social Security income, a Veterans Administration letter, as if you were a disabled vet, a Railroad Retirement Board letter, or a photocopy of the Medicare card. Now, Medicare obviously is age-based, so not all of our clients will qualify for that as a matter of fact due to the diagnoses and the medical condition of a lot of our clients.
Most of our clients are below the age of what you would be considered for Medicare. Now, that is to say that 99 percent of our people do qualify for Medicaid. They also have many other sorts of documentation that they could provide. We approached the Game and Fish Commission through the representative that I work with for our fishing derby about two years ago to try to work on this, and we presented it to him, and he was like, oh, yeah, absolutely, we can work on this. Now, I come at this from an organizational standpoint because of the fishing derby, but
I also, in transparency, I have a daughter with Down syndrome. She is 11, and I hope to be able to get her fishing and hunting one day. Her dad is a huge hunting enthusiast and would love to take her, and we would love to do so using the structure of which she can apply for and should be able to be eligible for. However, because she is under guardianship of me and my husband, she doesn't have an approved and I don't think will ever have an approved Social Security letter because in order to
qualify for Social Security income, even after age 18, you have to meet an income and assets approval letter. So basically saying that you have to be under a certain threshold. I believe assets are still around $2,500 for that. And then the income is very, very low as well. So even after she is over 18, if she is not completely independent and completely, you know, on her own guardianship, if she stays under our guardianship, which she probably will, she wouldn't qualify, even though she has one of the checkboxes definition of the previous
form. So, that is how I got thrown into this mix, but
Representative Julie Mayberry
Unverified
1:42:33
yeah. So what I hope to accomplish with this bill, first of all, we're simplifying things by only having
one form. We're getting rid of a form that there's possibly some fraud on. helping to raise that tax credit from $500 to $1,000. And members, if, and you can see there's a fiscal impact of $10 million, if that's too much, when you all start analyzing
things, maybe $750 is the happy point. I'd like to raise it some. I think, you know, it's been around since 1977. I think it's time to raise that amount. And then the other thing that I'd like to do is allow, and this, again, possibly through rules with Game and Fish or even another bill that I have ready to go, allow people to use that tax credit form as a way to apply for the fishing license, all the Game and Fish licenses, the hunting
license, the combo license, that that could be, because it meets that federal definition because apparently that's important because they're using federal markers on that. And by using that federal definition, I think that we could get a little closer to maybe getting the Game and Fish Commission on to make sure that we're really providing those licenses for
the people who need them. And I'd be happy to take questions. Thank you. Representative McClendon, you're recognized. Thank you, Chairman.
Representative Mindy McAlindon
Unverified
1:44:09
Hey, thank you so much for bringing this. I have a quick question for you. So can you clarify your organization? Does it
Katie Sursa
Unverified
1:44:17
pay for all of the passes for the children who come? Is that what I'm understanding? That's correct. And we -- they're actually adults. We bring our adult day habilitation center, and we open it up to anybody on our waiver program as well. So it's grown every year. It used to be about 45 people, and now last year I believe we had 65-plus volunteers, And we do front the entire cost of that.
Representative Mindy McAlindon
Unverified
1:44:39
And we would continue to do so. So you said it's $6 a person? For the three-day, yes ma'am. For the three-day.
Representative Julie Mayberry
Unverified
1:44:47
And then if they qualify, will that go to zero? No. The Game and Fish Commission, it's a three-year license. This is just the fishing one, but it's a three-year license for $10.50. And that's what you would qualify for? Correct.
Katie Sursa
Unverified
1:45:00
Yeah. It would still be, I mean, it would be an increased expenditure initially, but it would be something that we wouldn't have to pay for every single year and it would make them
eligible to hunt or to fish, excuse me, completely year round. So we actually had a partnership with Bass Pro where they provided fishing poles for our people and they donated 15 fishing poles and tackle boxes, which are great and we can use them on the three days when we have the fishing derby, but then we would love for that to be like a library that they could check that out and then go fishing on the weekend because we have already purchased their fishing license for them. I also, in this whole
two-year process, we've collaborated with the other providers in the state like Easterseals, Access, Pathfinder, Friendship. I have personally called them and their directors to speak with them to see what their tendency to take advantage of this license would be. And they are 100% on board as well. So, I mean, they don't host fishing derbies that I know of, but I do know that they have clients that would love to get out and do the hunting and fishing. And so, yeah, we're all on board as one community. Okay. Thank you. Appreciate it. Yes.
Members, any other questions? Seeing none, Representative Mayberry, you're recognized close for your bill members i realize
Representative Julie Mayberry
Unverified
1:46:28
you can't take a vote today but wanted to get this information out there please share with me any feedback i would love to see this bill go all the way through again if if a thousand dollars is is too much when you start looking at at all the bills that you're looking at because i know everybody who comes down to the end of this table that's a a fantastic idea, but I'm willing to pare that back if I have
to. I would just like to be able
to move it above the 500 that it's been at since 1977. Thank you, Representative.
I don't have anybody that signed
up to speak for or against the bill. I forgot to ask, but I appreciate y'all coming. Appreciate you presenting. Thank you for being here. Representative Eaves, if you will We will present SB 219, and members, this is one that we can vote on.
Representative Les D. Eaves
Unverified
1:47:29
If you'll introduce yourself for the record, please. Thank you, Madam Chairman. This is Representative Les Eves. You are recognized. Thank you, members. This is Senate Bill 219. It's regarding the 4% privilege tax that we apply to medical marijuana. marijuana.
In previous sessions, we've had to extend the sunset date, which became kind of tedious. So
we're just removing the sunset date on that portion of it. And the effect is on the money that we get from the privilege tax. That goes to the food insecurity fund. And out of that
fund, we pay for the summer EBT program. We pay for the free and reduced lunch co-pays and for the free breakfast during school if the child asks for it that we just voted through a few weeks ago.
And that's all it does. Ultimately, nothing changes, just removing a sunset date. Members, are there
any questions? Seeing none, I don't see
anybody signed up to speak for or against the bill. Is there anybody the audience would like to speak for or against the bill? Seeing none, Representative Eves,
Representative Les D. Eaves
Unverified
1:48:42
you are recognized and closed for your bill. Thank you, members.
I'm closed for my bill, and I'd like to make a motion due pass. Members, we have a motion due pass. Any discussion on the motion? Seeing none, all in favor say aye. Opposed say nay. Congratulations, your bill has passed. Okay, members, next up on is HB 1485, but I don't see Representative Brown. Oh, there she is. Representative Brown, you snuck in on me.
If you'll go down to the end of the table. And members on Representative Brown, she'll be able to present, but we won't be able to take a vote on this one because it does have a physical impact. DF&A will tell you that it's undetermined, but they do believe it to be minimal. but there is a fiscal impact representative you'll introduce yourself for the record
Representative Matt Brown
Unverified
1:49:39
please representative carolyn brown district 67 i have a handout if i could i hope i have enough for
everybody. Can I bring these up? They'll come and get that from you please.
The, may I begin? Yes. This bill is to allow a sales and use tax exemption for 501c3 organizations that support veterans facilities. It's not the best word, but that's the best word I can come up with right now, that are under the auspices of the Arkansas Department of Veterans Affairs. They must be a registered 501C3, and they must exclusively support one of our Arkansas veterans facilities,
like the home or one of those cemeteries. And I don't like to speak for Secretary Ator, but he's not here, And I know that he would like to expand or encourage others to get involved in supporting veterans' facilities. So the reason I wrote this legislation the way I did was to accommodate any other 501c3s that register to support veterans' facilities.
I will tell you personally, I have been a member of the Arkansas Veterans Cemetery Foundation in North Little Rock that supports the Arkansas State Veterans Cemetery there. I've been a member of that organization since 2010. And speaking with our treasurer, he said we spent $3,000 on sales tax last year. So it's not a huge amount. We have another 501c3 that was established for the cemetery in Bird Eye.
I don't know what their expenditures were. They work a lot with reeds across America. So this is, at the present time, this legislation would benefit the two cemeteries because there aren't any other 501c3s that have been established yet. And I'd be welcome to answer any questions. What we do, you've got this little handout. If we base at the cemetery, the activities that we support is we purchase all the flags for the avenue of flags as you enter the cemetery.
We purchase all the little flags that we place on all the grave sites, which are over 8,000 at this point. We're almost about maxed out in capacity at the state cemetery in North Little Rock. And I had hoped to talk to Secretary Ator and see if there are any grants in process to expand the cemetery. But right now, we are placing flags and reads at over 8,000 grave sites. We do that with the help of the community, Boy Scouts, and volunteers that come out to assist with that.
The Arkansas Department of Veterans Affairs did build us a facility a few years ago to store all of our reeds and flags. We do not purchase brand new every time. We are very frugal with our money and very careful about that. So we made a large purchase of reeds last year and don't anticipate having to purchase very many more. I know we had a board meeting the other day, and I learned that we need to purchase bows. So, I mean, we're not the last of the big spenders.
But this would be really nice for us because our contributions to the foundation from individuals has fallen off considerably since COVID. And I'm available for questions. Members, are there any questions for Representative Brown? Representative
Eaton, I recognize. Does the 501c3 not tax exempt
Representative James Eaton
Unverified
1:54:07
now? Can you explain why they're paying taxes? Income tax exempt.
Representative Matt Brown
Unverified
1:54:11
They are income tax exempt, but this is asking for a sales and use tax exemption.
Thank you. You're welcome. Any other questions, members? Seeing none, I don't see anybody signed up to speak for or against the bill. I'm going to ask, is there anybody here to speak for or against the bill? Seeing none, Representative Brown, you're recognized
Representative Matt Brown
Unverified
1:54:38
to close for your bill. I think that this would be a very nice thing for the state of Arkansas to do for our 501c3s that support our veterans facilities. And I would certainly appreciate a good vote.
Thank you. Thank you for presenting to us. We appreciate it. Thank you. Thank you. Representative Ray, I'll present my bill
Representative David Ray
Unverified
1:55:09
if you want to chair. All right, committee, Representative Kavanaugh is going to be presenting House Bill 1716.
Thank you, members. House Bill 1716 is just clarification on an issue that Secretary Hudson and myself have been working on for about a year now, I would guess, when it came to our attention about an exemption on a manufacturer that had been granted. This really just takes current case law and the current policies with the current DF&A department and puts it in statute.
And this way, in the future, it wouldn't be up to another secretary or someone else to change this. So it's really just taking case law and current procedure and putting it in statute. And basically it's saying that if someone has gone through the process, whether it's administratively or it's through the appeals system, and they're awarded this exemption, that exemption will stay in place until either we repeal the law or through a rule change that ALC approves, it gets changed.
So unless that statute revolving around that exemption is changed through the legislative process, then it stays. And that's really all this does. There is no physical impact. And with that, I take questions. I was just about to say, committee, this is a
Representative David Ray
Unverified
1:56:42
bill that does not have a fiscal impact according to the green sheet in front of you.
So this is one that we could take a motion on and a vote on. So with that being said, you've heard an explanation of the bill. Are there questions from committee members?
Okay, seeing no questions, is there anyone signed up to speak for or against this bill? Okay, anyone in the audience? All right, seeing none, Representative Kavanaugh, would you like to close for your bill? Members, I appreciate this.
This is just something that I think provides clarification also for the tax holders, but also for the department, so it's just a good bill that provides clarification going forward for what the policy is for the state, and with that, I would make a motion to pass. All right. Committee, Representative
Representative David Ray
Unverified
1:57:30
Kavanaugh has made a motion to do pass.
Is there any discussion on the motion? Okay. Seeing none, all those in favor say aye. All those opposed, no. All right. The bill is passed. And I believe that's the last bill on the agenda for the day. Okay. So that being said, we are adjourned.
Agenda
HB1303 Jean TO CREATE THE SUSTAINABLE AVIATION FUEL INCENTIVE ACT; TO CREATE INCOME TAX CREDITS RELATED TO SUSTAINABLE AVIATION FUEL; AND TO CREATE A SALES AND USE TAX EXEMPTION ON UTILITIES USED TO PRODUCE SUSTAINABLE AVIATION FUEL.
REGULAR AGENDA
HB1018 Hudson TO CREATE THE STRONG FAMILIES ACT; AND TO CREATE AN INCOME TAX CREDIT FOR EMPLOYERS THAT PROVIDE PAID FAMILY AND MEDICAL LEAVE FOR CERTAIN EMPLOYEES.
HB1076 Hudson TO CREATE THE CARING FOR CAREGIVERS ACT; AND TO PROVIDE AN INCOME TAX CREDIT FOR EXPENSES INCURRED IN CARING FOR CERTAIN FAMILY MEMBERS.
HB1116 Ray TO CREATE THE REMOTE AND MOBILE WORK MODERNIZATION AND COMPETITIVENESS ACT; AND TO PROVIDE INCOME TAX AND WITHHOLDING EXEMPTIONS RELATED TO CERTAIN REMOTE AND MOBILE EMPLOYEES AND NONRESIDENTS.
HB1190 Vaught TO CREATE AN INCOME TAX EXEMPTION FOR TEACHERS.
HB1366 Ennett TO CREATE AN INCOME TAX CREDIT FOR QUALIFIED STORM SHELTERS.
HB1388 Vaught TO EXEMPT CERTAIN STORAGE SERVICES FROM SALES TAX; AND TO EXEMPT THE SERVICE OF FURNISHING ACCOMMODATIONS BY A TOURIST CAMP OR A TOURIST COURT FROM SALES TAX, AS AFFIRMED BY REFERRED ACT 19 OF 1958.
HB1485 K. Brown TO CREATE A SALES AND USE TAX EXEMPTION FOR SALES TO CERTAIN ORGANIZATIONS THAT SUPPORT VETERANS' FACILITIES.
HB1500 Beaty Jr. TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING THE THROWBACK RULE.
HB1501 Beaty Jr. TO ADOPT FEDERAL INCOME TAX LAW REGARDING DEPRECIATION AND THE EXPENSING OF PROPERTY; AND TO INCREASE THE AMOUNT ALLOWED FOR THE EXPENSING OF CERTAIN DEPRECIABLE BUSINESS ASSETS TO THE AMOUNT ALLOWED UNDER FEDERAL LAW.
HB1538 Ray TO AMEND THE LAW CONCERNING THE NET OPERATING LOSS INCOME TAX DEDUCTION; AND TO INCREASE THE CARRY-FORWARD PERIOD FOR THE NET OPERATING LOSS INCOME TAX DEDUCTION.
HB1540 J. Mayberry TO AMEND THE INCOME TAX CREDIT AND THE INCOME TAX DEDUCTION RELATED TO MAINTAINING, SUPPORTING, AND CARING FOR AN INDIVIDUAL WITH A DISABILITY.
HB1636 Ray TO AMEND THE ARKANSAS SOFT DRINK TAX ACT, AS AFFIRMED BY REFERRED ACT 1 OF 1994; AND TO PHASE OUT THE SOFT DRINK TAX BASED ON SALES TAX COLLECTIONS FROM SALES OF SOFT DRINKS.
HB1657 Beck TO AMEND THE ARKANSAS WOOD ENERGY PRODUCTS AND FOREST MAINTENANCE INCOME TAX CREDIT.
HB1658 Nazarenko TO AMEND THE LAW CONCERNING THE PAYMENT OF PROPERTY TAXES; AND TO DEFINE "DEPLOYMENT" FOR PURPOSES OF THE EXCEPTION TO THE ASSESSMENT OF PENALTIES RELATED TO PROPERTY TAXES.
HB1665 Wardlaw TO AMEND THE LAW CONCERNING THE INSURANCE PREMIUM TAX; AND TO REPEAL THE CREDIT ALLOWED AGAINST THE INSURANCE PREMIUM TAX BASED ON THE SALARY AND WAGES OF THE EMPLOYEES OF THE INSURER.
HB1670 L. Johnson TO CREATE THE PRECEPTOR TAX INCENTIVE PROGRAM; AND TO PROVIDE INCENTIVES FOR CERTAIN MEDICAL OR COUNSELING PROFESSIONALS TO TRAIN CERTAIN STUDENTS WHO ARE LEARNING TO BECOME MEDICAL OR COUNSELING PROFESSIONALS.
HB1671 L. Johnson TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS TAX; AND TO CREATE A GENERAL SALES AND USE TAX EXEMPTION FOR SALES TO QUALIFIED NONPROFIT ORGANIZATIONS.
HB1674 L. Johnson TO CREATE AN INCOME TAX CREDIT FOR CONTRIBUTIONS TO CERTAIN RURAL HOSPITAL ORGANIZATIONS; AND TO CREATE THE HELPING ENHANCE ACCESS TO RURAL TREATMENT (HEART) ACT.
HB1685 Underwood TO CREATE THE GROCERY TAX RELIEF ACT; TO AMEND THE LAW CONCERNING THE SALES AND USE TAXES LEVIED ON FOOD AND FOOD INGREDIENTS, AS AFFIRMED BY REFERRED ACT 19 OF 1958; AND TO EXEMPT GROCERIES FROM STATE SALES AND USE TAXES.
HB1687 K. Moore TO PROVIDE THAT A WATER AUTHORITY IS EXEMPT FROM ALL EXCISE TAXES.
HB1691 Torres TO PROVIDE FOR CERTAIN PROPERTY TO BE EXEMPT FROM TAXATION; AND TO PROVIDE THAT CERTAIN MOTOR VEHICLES USED EXCLUSIVELY FOR PUBLIC CHARITY ARE EXEMPT FROM PERSONAL PROPERTY TAX.
HB1698 Torres TO AMEND THE LAW CONCERNING THE INCOME TAX TREATMENT OF EMPLOYER CONTRIBUTIONS TO A HEALTHCARE SHARING MINISTRY OR OTHER MEDICAL COST-SHARING PROGRAM.
HB1699 McCullough TO ADD FIREARM SAFETY DEVICES AND FIREARM STORAGE DEVICES TO THE SALES TAX HOLIDAY; AND TO DECLARE AN EMERGENCY.
HB1702 Wooldridge TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR CERTAIN MACHINERY AND EQUIPMENT USED IN MANUFACTURING; AND TO PROVIDE A SALES AND USE TAX EXEMPTION FOR MACHINERY AND EQUIPMENT USED IN CLOSED-LOOP RECYCLING.
HB1708 Underwood THE KEEP THE BONUS, AXE THE TAX: THE NO-TAX BONUS ACT.
SB219 J. Dismang TO REPEAL THE SUNSET PROVISION OF THE ARKANSAS MEDICAL MARIJUANA SPECIAL PRIVILEGE TAX ACT OF 2017; AND TO DECLARE AN EMERGENCY.
HB1715 Lundstrum TO LIMIT THE INCREASE IN THE ASSESSED VALUE OF REAL PROPERTY AFTER A SALE OR OTHER TRANSFER OF REAL PROPERTY.
HB1716 Cavenaugh TO AMEND THE LAW CONCERNING THE ASSESSMENT AND COLLECTION OF TAXES BY THE SECRETARY OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION; AND TO PROHIBIT THE ASSESSMENT OF SALES AND USE TAX IN CERTAIN CIRCUMSTANCES.
HB1732 Vaught TO INCREASE THE AMOUNT OF THE INCOME TAX DEDUCTION ALLOWED FOR A TEACHER'S CLASSROOM INVESTMENT.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — REVENUE & TAXATION- HOUSE, Mar 13, 2025 | Agenda | 4 | Official source ↗ |
Speakers
Representative Frances Cavenaugh Chair
Unverified
Representative Rick McClure
Unverified
Representative Lane Jean
Unverified
Speaker 8
Speaker 6
Michael Newton
Unverified
Representative Richard McGrew
Unverified
Speaker 38
Representative David Ray
Unverified
Speaker 51
Speaker 56
Speaker 65
Representative Robin Lundstrum
Unverified
Speaker 68
Speaker 76
Speaker 89
Speaker 90
Speaker 95
Representative Ry
Unverified
Representative John Maddox
Unverified
Speaker 105
Representative Jim Wooten
Unverified
Chair
Unverified
Representative Les D. Eaves
Unverified
Speaker 143
Speaker 144
Speaker 148
Speaker 150
Speaker 151
Speaker 153
Jay Robertson
Unverified
Representative James Eaton
Unverified
Speaker 3
Representative Les Warren
Unverified
Speaker 174
Representative Julie Mayberry
Unverified
Katie Sursa
Unverified
Representative Mindy McAlindon
Unverified
Representative Matt Brown
Unverified