Insurance & Commerce- House

Um, Representative Warren, you recognized. Thank you Mr. Chairman, committee members. The circuit clerk is the custodian of the public records. In recent years, out of state, third parties have persuaded largely inexperienced circuit clerks to delegate that authority to them. Those third parties then watermarked the documents as their own versus the public record that they are and allow access to the documents for profit. This bill reinforces the circuit clerk's custodial role and brings the current statute, statute language into the electronic age. Previously, the statute contemplates mechanical. This bill also contemplates electronic access and so we're just addressing an issue that's come up and the circuit clerks are actually here in support of this. So I'd be willing to answer any questions. You're trying to find your. Just trust me. Little Bill, don't do much. I Members, uh, my apologize. Um, this was on deferred so everyone take a moment and look, um, and if there are any questions, let Representative Es know on that. Again, this is HP 1367. Um, we do actually have some people signed up. Um, to speak, um, would you like to bring one of them to the table, would be great. OK, just have them come up and introduce themselves and proceed with their testimony. I Good morning. My name is Kyle Sylvester. I'm the Washington County Circuit clerk and 2nd vice president for the Arkansas Circuit Clerks Association. My name is Wes Lassa. I'm here on behalf of the Arkansas Land Title Association. As Representative Warren indicated, um, this bill is to Bring records with respect to the circuit clerk in particular real property records into this age to account for digital records, um, and to prevent these third party out of state providers, uh, vendors that have engaged with various circuit clerks across the state from taking documents that are real property records, uh, for which the circuit clerks are the custodian water marking those and then selling those for. profit as their own. Um, we've worked extensively with the circuit clerks and they're in support of this bill. Yeah, so we've got, uh, a lot of the electronic recording vendors, uh, I say a lot of them. There, there are several of them that, that, uh, have business here in the state of Arkansas. We have, we have trained, um, during our conferences, the the circuit clerks to request from their vendors to not watermark these whenever they whenever they, uh, post them online for viewing, um. And so we've this last This last election cycle out of the 75 counties we had 25 new circuit clerks and so my fear is that some of these uh vendors might be trying to take a little advantage of You know, the inexperience of some of these circuit clerks, so along with the training, um, We, we just kind of feel like that having some legislation in place to to back up our our uh substance on not watermarking these documents is unfortunately necessary. OK. Thank you for your testimony, um, it appears we have some uh a question in the queue, if you'd be willing to take some questions represent Wootton, you're recognized. OK. Thank you, Mr. Chairman. you all may have said this, and you may have mentioned it too, uh, Representative Warren, but aren't these public records. These are all public records and that's the whole point is that these third party vendors are watermarking them and then trying to make a profit off of them. We're trying to put it in the statute that they can't do that. Thank you. Thank you, Mr. Chairman. They wouldn't. Any any other questions, committee? Representative Ladyman, you recognized Mr. Chairman, legislative inquiry from staff. I need to, this looks like a really good I definitely would vote for it, but bringing it off a deferred and, and when we have people here to speak for it. If there's one, someone opposed to this, they would not. No And I really I'm really a little nervous about doing this because the, the, the public don't know that we're going to do this. And again it's a good bill and I understand the urgency to do it needs to be done, but But I, I, I believe we ought to follow the rules. That's just my input. Reps of Warren, um, I, I'm going to allow you to proceed with all of your testimonial witnesses, um, and we will most likely vote on this at a later date, but that's acceptable to you. That, that is fine, and I can tell you the, uh, we have no known opposition to this, uh, the main players are the circuit clerks, and they're here in support of it, so I understand your, your reservation, uh. of lighting men, but uh, In all honesty, I really don't know of any opposition. OK. Any further questions about the committee? Representative Lindstrom. Um, I'm a little flat-footed on this, there's a fee involved, um, who pays that fee? Are you referring to the $150 fee. OK, that's where the title companies since we were negotiating the Land Title Association and the circuit clerks. There had not been fees charged, So since title companies rely on these documents to run their businesses. It was agreed that They could charge title companies up to $150 a month for the electronic downloads because we get everything for title companies. OK, um, also, I get where you're going, I think, how is this going to stop the bad guys from really just taking the documents and doing whatever they want or adding a fake watermark. What's the security involved in this? I think number one, What we're doing is They're starting to educate all circuit clerks that If you do have someone come in and help with the management of your documents. You can't have watermarks on them and they can't charge the public for access to them. So we're, we're trying to get it in the statute, so it's clear you can't do that. Whereas right now the statute is silent on it, OK, all right, thank you. Thank you. Any other questions from the committee? All right. Thank you, Representative Warren. Thank you for your testimony. We are going to hold this bill to the next meeting and you can finish with your presentation. And of course, any other witnesses who might want to show up can do it at that time. certainly understand, appreciate it, Mr. Chairman and committee. OK, moving to the regular agenda, um, Representative Eaves, I think, are you going to run a Senate bill? You are recognized to run, I believe it's SB 150. You know he is. market. Representative AG or recognized to present your bill. Thank you, Mr. Chairman. Members, I have a Senate Bill 150, um, by the uh employee benefits division. It's already made its way obviously through the Senate, but I was, there were 6 things I want to tell you about the bill that are that are issues, and I'll tell you how the bill fix it. First issue is that state law prohibits a retiree who leaves our plan for being able to come back on our plan at a later date. Uh, the way CMS works with Medicare Advantage plans leaves the enrollment and administrative powers to CMS. If a member has inadvertently signed up for a Medicare Advantage or a Medicare Part D plan outside of the state due to late night TV ad or telemarketing or some other sales effort than they're, uh, automatically disenrolled from the state plan. Uh, the member then has the ability to appeal that unintended enrollment to CMS and EBD here in the state is not a part of that process, and then CMS can agree that the enrollment was under false pretenses. Um. When CMS agrees with the member, then they, they will unenroll them from the unintended plan, so unenroll them from the unintended plan and automatically enroll them back into our plan. So EBD receives a file weekly from CMS that notifies them after the decision to enroll that member back into our plan. Uh, the problem is EBD gets into a situation between state law prohibiting that member from coming back on, I think, for a year. Forever, OK. So EBD gets into the situation again with, with, uh, between state law and which prohibits them from coming back and then from CMS operations, which is allowing them back. So what this bill will do is give the director of EBD, the flexibility to allow members in that situation that we just described to come back onto our plan but still maintain state law around retirees who knowingly leave the plan from coming back onto our plan. Thank you, Representative Aves. Members, any questions? Representatives recognized. Thank you, Mr. Chair. Representative, quick question. Um, The member's health, is that an issue when they try to re-enroll maybe you does that make sense? You see what I'm saying? Sometimes the members he may have deteriorated during that year that they inadvertently enrolled in somebody else in another plan. So when they attempt to come back, is that how is that considered? Grant Wallace, director of employee benefits division, and health is not a consideration. We really look at the retiree eligibility and the rules that are set up. state law of whether they are eligible or not eligible. This really is just impacting a decision of I don't want to misleading advertising, and honestly, uh our members being taken advantage of from telemarketing and those kind of things and where they get in a sense of they didn't quite understand that they were leaving our plan. They thought that they may be adding a prescription benefit or something to that nature through a Part D plan when they don't need that are Our group Medicare plan covers all of that, but if they do make any change, it kicks them out of our plan, and then we get into an issue where we are not supposed to be letting them back onto our plan, but CMS is reverting us back to us so we get in this crux back and forth, and we're just trying to help our members and do what's best for our members. OK, thank you for that answer, because I did have a constituent. I just want to make sure that I understood. He, exactly what you described, he was convinced that making that switch would benefit him. He switched over. They actually told him he had a year, then when he tried to go back to his uh other plan, he was denied and so, uh, is that what this is going to fix that, yes. OK, that sounds good. Any other questions from the committee? No. Um, representative, is there anyone signed up to speak for or against this bill? Anyone else? No? Oh. No, OK. Uh, Reverend Perry, you're recognized. OK, go ahead. Thank you Mr. Chairman. Going back to the point of being able to go back, I think on Representative Tosh had a had a constituent whether or not my question is, and I'll, I'll make this in the form of a question, but I think to clarify your on the, on the group benefits, what uh Grant's talking about is That allows them to go back because your constituents complain about all these phone calls I get. I haven't, that's my line of business is what I do, and I haven't come in the office all the time and they've been disenrolled from a plan, and it's, it's a shame. And then there's nothing I can do to fix it. What this will allow is him to fix it on the group side of it now on individual side, it will not. Would you agree? Correct. We, we, this is only for retirees who are eligible either through the public school service or state service. We're, we're, I'm not looking at anything outside of that, so it is not the individual plans or anything along those lines. It's just for EBD plans. Then represent Perry. Any other questions from the committee. OK. Saying none, is there anyone in the audit? Someone signed up who'd like to speak for or against this bill. Saying that when Representative Abes you're recognized. I'm closed for the bill. I appreciate Representative Perry. He, he explained it in that. Concise time, probably better than I did. So, um, I'm closing and with that I make the motion to pass. OK, Representative Eaves has made a motion to pass. Any discussion on the motion, seeing none, all in favor say aye, aye. Any posts say no. Congratulations, you've passed your bill. Next on the agenda is Representative Johnson appears you have a couple of bills, um, if you're ready, you can go to the end of the table. Yeah. Representative Johnson District 47. Uh, yeah, I have 2 bills, so I have Senate Bill 48. And then I'm ready to run House Bill 1184 again, just whichever order you want me to take, OK, I guess just start at the top if you want with SB 48. So members, this is, this is a bill that we've already heard here in committee. There were some questions around the term owner occupied, uh, versus commercial. I tried to dig into that some, and I think I understand better now that language and why that's there. My current understanding is there are really only 2 terms, 2 types. There's owner occupied, which is a single owner occupied home. And then there are commercial plans and commercial plans include anything from a High rise, uh, you know, building with offices in it all the way down to one person owning one rental house, so there's definitely some opportunity, I think, to, to create some better definitions around commercial plans and owner occupied plans, but I don't know that they that we can step into that space in this particular bill, you know, this particular bill is just trying to do some transparency around what you're responsible for with deductibles, um. And so again, I think this bill is doing a good thing. It's accomplishing a good thing. I do agree that there's space and room to maybe improve the overall process around commercial plants as well, but I think that's going to be something that needs to be done in a separate bill and probably as a deeper project than the intent of this bill, so I think the intendence bill is good. I think it's accomplishing a good thing. I think we had good questions on the bill before, but I don't think there's anything I can do in this bill to address those particular questions. And I'd be happy to take more questions if people have them. Thank you, Johnson. Any questions from the committee? Seeing none, there is no one signed up anyone in the audience who'd like to speak for or against this bill. Saying that when Johnson, you recognize the close for your bill. I'm close to the bill. Make a motion to pass. We have a motion do pass. All in favor say aye. Any post say no. You passed your bill. members, uh, House Bill 1184? This was a bill we passed out a committee that was around mortgage trigger leads. If you recall this was the bill that was where we had an issue where when your credit record was requested. People were receiving that and making unsolicited calls to people who were trying to buy a home and trying to in some ways represent themselves as maybe working for your mortgage company after this bill got out of committee and on the House floor, there were some questions around specifically lines 31 to 33. Uh, if you look at that section, it says knowingly using information prior to that amendment, it said knowingly or negligently. So there was concerns that that was too broad and so there were requests to amend that from knowingly and negligently to just knowingly using information, so that's the only change we've made in this bill, and so this is just coming back to committee so that we can vote out the bill as amended. OK. Johnson. Any questions from the committee. OK, saying no. Um, there's Is there anyone in the audience who like to speak for or against this bill? OK, seeing no one represents John, you recognize the close for your bill. I'm close to my bill, I guess close for my bill. The amendments engrossed. I don't know. However, I'm supposed to close for this bill in this section, as amended or otherwise. I'm closed for this bill. OK. I make a motion to pass Reent Johnson has made a motion do pass. All in favor, say aye. Any post say no. You've passed your bill. Thank you. You is that all you're gonna run today? We're not gonna do that. I don't think we're going to do that today. Uh, you're not doing any of those. OK. Thank you. I believe Represent Pilkington is not running, um, 1443 today, um, Representative Ake or I believe you have two bills that that you could run at this time. Just one? OK. Go to the end of the table if you would and identify which bill you want to run and um proceed with your testimony. Thank you committee. Uh, today I am looking to run HB 1466 to the fort to amend the Fair Mortgage Lending Act. I believe I have some representatives here from the Arkansas Security Department. I'd like to welcome to. The table. I believe Mr. Campbell. Yes, if you would just come up and introduce yourself, um, and who you're with and then you can proceed with the presentation of your bill. Karen Tierney, Arkansas Securities department. Thank you. Uh, today we're looking for the Arkansas Security Department to amend the Fair Mortgage Lending Act. This is primarily concerning the prudential standard requirements and data security requirements. Uh, the focus of this bill has two main areas the financial conditions as well as including capital liquidity and of course the corporate governance like board of directors and internal and external audits, uh, the standards outlined in this bill align with existing federal minimum eligibility requirements wherever practical. and that obviously will help minimize some of the regulatory burden for services. Uh, the Social Securities department and the banking department as well have identified several areas of efficiency needs, and that's what a series of bills that I'll be running this one including 3 with Senator Boyd on the agenda today. Um, the standards here do not apply to small servicers that meet the diminis cutoff and or not for profit mortgage servicers or housing agencies, um, with that, if you guys have any questions about the new standards and the cleanup language for these efficiencies. I welcome any questions. 10 groups of an acre. Any questions from the committee? OK. Saying none, is there anyone in the audience you'd like to speak for or against this bill? OK. Represent Baker, you are recognized to close for your bill. I'm closed for my bill, and I make a motion to pass. We have a motion do pass from Representative Aker, all in favor say aye. NFO say no. You've passed your bill. That is the only one who want to run right now, Reverend Baker, is that correct? Yes, I have 3 others later in the agenda for Senator Boyd. I don't know. OK, will the committee, I can run those at however you deem appropriate. OK, thank you. Representative Graham like, are you wanting to proceed on 1533 today. Uh, no, I asset to be placed on deferred. OK, thank you. Representative McGrew, I believe you are ready to run HP 1558. Is that correct? Thank you, Mr. Chairman and committee. This is uh HB. 1558, it's uh It's property management bill that's been a long time coming. I've been working very hard on this one. I have worked extensively with the British State Commission and the Reachors Organization. His handle a lot of input on this bill. They're both OK with this bill moving forward. And it's really pretty simple. All it all it does is provide uh a property management brokers. position in here where you can can manage other people's property without going through the process of being a sales agent or sales broker. It does not affect that side at all. It does require education, so for the first time as a property manager, you will be required to have experience and knowledge. On property management and required to take 60 hours of education and pass the test in order to be that, and then you can hire associates under you, very similar to the sales associate side where they'll serve 2 years and then they will be eligible to to also take that path, uh, it solved the problem of Someone from restricting someone to manage other properties because they have to put their property with a sales broker, so, uh. It um it's pretty simple and been vetted through both commissions a lot and I'm available for any questions. Representative A you recognize for a question. Thank you. So, um, you can still be a licensed real estate broker or agent and be a property manager. You can. It doesn't affect anything in that side. OK. What it will allow is one of the things the commission asked me to do the education that's required on the property management side. They didn't want, they wanted that to be available for the broker if they wanted to take it into the continuing. So we changed that in the bill to let them have access to that. What does that look like, like hours or What's the class? Can you give me the property management side? They're on the, on the I'm not sure I understand the question on the continuing ed or on the original, I guess. What does that look like on the original on if you're going to become a property management broker. uh, what the bill says is you have to have experience of two years of 7 units or more, then you can take 60 hours of education, that education, 30 of it is basically on Arkansas law that has to do with with managing property. The other 30 is on best practices. You complete that and take a test and then you will be given that license. On the continuing a portion of it, uh, have to look, I'm not sure on the associate side it's 30 hours of education. It's basically mostly on the law, and then you have to work under that broker for 2 years. Um, the continuing it, I think it's 6 hours, I believe, on the on the real estate. agent side of it. They would not be able to manage property unless they went to that 60 hour class you're talking about, is that right? No, sir. OK, if they're on the brokers, it doesn't affect the broker's side at all. So if their existing property now, they can continue managing property and do what they've always done, and they can manage not just any property that there's no limitation on what they can do as far as managing property without going to this class. That's correct. OK, thank you. Now that was one of the questions that the realtors had was we're going to require their brokers to have this education, and the answer was no, we're not going to require that, and they come back and said, Well, can you allow it to be used if they want to, and the answer was yes. Thank you, Representative Eaves. Any other questions from Representative Graham? like you ask for a question. Uh, thank you very much. So, um, say I own a number of my own property and the properties to manage my own property, and I decided I want to take on more properties, but I'm not a, a You know, a real estate agent, I would have to take a 60 hour class to be able to do that. Actually, who this, who this will serve as people, for instance, that are managing their own properties now, you know, so if you had, you know, 20 properties you're on 15, whatever, and you wanted, you know, and your, your neighbors and your friends and your family we're asking you to manage their property in order to legally do it, you would have to go take this 60 hours of education which would the process is to verify that that you have the education and the knowledge and the experience, and then you, after passing that test, you'll be awarded that license, uh, thank you very much and everything stays under the real estate commission under the recovery fund. It, like I said, I've worked with them a lot on this bill and Where in Tosh, you are recognized for her question. Thank you, Mr. Chair. Representative, if I, if I had a family member that wanted to manage property that I owned, they would not, would or would they, would they have to take this 60-hour course. Now, if it's your property representative Tasha, and you want to hire your nephew or grandson or whoever to manage your property, you can do that and they would not be required. It's only when they manage it, they're going out and marketing and managing other people's property. I understand. Thank you. Uh, in Perry, you recognized him. Thank you, Mr. Chairman. Representative McGrey, where's the classes, where are the classes offered if you've got 60 hours of education. Uh, where would I have to do that? This bill this bill allows the commission a year to get this set up. The classes they have is they have education facilities now for the sales broker side, so they'll be working with them to get the property manager side and they'll be available at those locations. Do we know? Approximately how much that would cost for 60 hours of for education. I do not, I know the fee for the license is $80 a year for the class itself. No, that will be set up when they promulgate the rules for this and those fees aren't shit in the bill. OK. I'm assuming they will be very compatible with what the regular broker classes are and associates classes are. How much are they? I don't know right off. I've taken those, but I don't know, it's not a large amount. It's, it's uh. You know, I been I don't know. I can sure get you that answer. OK, you know, I think I paid $100 something like that, 60 hours at $10 an hour, $600. So, you know, next thing you know you're going to be $1000 it was not in the 60 because I took 60 hours for the broker's test, which was, it was actually Saturday and Sunday, 3 weekends in a row. The amount for the class was very nominal. It wasn't, it wasn't real high. OK. All right. Thank you, Mr. Chairman. and Perry. Any further questions from the committee? OK. Seeing that, is there anyone in the island who would like to speak for or against this bill. OK. Seeing no one reps in McGrew, you are recognized. I thank you much, very much, Chairman. I'm closed and and motion to do pass. Hey, we have a motion due pass by Representative McGrew, all in favor, say aye. Any post, say no. Congratulations, you have passed your bill. Thank you. I believe reps of acre, are you ready to present a couple of the, you have a few bills, I think, a couple of Senate bills, and you have one bill that I want to do last because there are some witnesses signed up on that one. So whichever ones you want to start with would be fine. But I want you to start with the um Quickest ones if you can. OK Uh. Yeah. I always just read the titles and do pass on. Uh, thank you, committee, as I alluded to earlier, I have several Senate bills here that are part of an overall efficiency package that has been requested by the Security Department banking department. I'd like, uh, Any of the same representatives from that department to join me at the Stage table. If you don't mind, just go ahead and introduce yourself and, um, and once, once you guys do that Representative Acer, then you can proceed with your bill. Thank you, Mr. Chair. My name's John Allen. I'm Deputy commissioner with the Arkansas State Bank Department. Represent Baker, I'm, I'm sorry. Before we start, which, which one are we starting with? We're going to go with Senate Bill 220. I think we're going to go in order. Yeah, he's in order on the agenda, so this is 220 members. Thank you. You may proceed. Do they need to introduce themselves and good morning, Mr. Chair and members. My name's Campbell McLaren. I'm the deputy commissioner at the Arkansas Securities Department. Thank you, sir. My committee today, starting with Senate Bill 220, uh, this is one of the I'm most excited to present today. Uh, the Arkansas Security Department is proposing amendments to the Arkansas Securities Act, and this is to create the Invest Arkansas exemption from securities registration. The proposed exemption would eliminate some birds and requirements from existing exemption for interstate securities, and the proposed changes will facilitate a greater opportunity for Arkansas residents to invest in the local businesses that will encourage responsible and competitive intrastate capital by increasing the financial resource opportunities. Uh, so that a few bullet points throughout the bill that I'd like to highlight. One is the issuer of the securities shall be a for-profit business entity under the Arkansas law and registered with the Secretary of State. In addition to that, the sum of the total investment shall not exceed $10 million and this will be an increase from the previous amount of $1 million. The maximum amount of investment from any single non-accredited investor shall not exceed $100,000. This is an increase from $5000. The issuer will still need to file a proof of exemption with the Arkansas Securities Department that supplies the information about the offering and includes the offerings documents for review. So essentially my understanding is the department in their purview of enforcing compliance, has noticed a need for an increase in some of these minimal exemptions, and they're here today to offer any expertise they have on those numbers that were selected. So with that, I welcome any questions. Thank you. Are there any questions from the committee? Representative Tos recognized for your question. Thank you. Thank you, Mr. Chair. I'm just curious, uh, in the definition. Help me understand what is a family relationship, a close family relationship where be considered one transaction or a single transaction. Could you elaborate on that just a little bit? I can. I'll, uh, defer to the individuals who made those definitions and are currently enforcing that definition in current statute. Uh, yes, sir. We wanted to ensure that 2 people who were living in a home together, um, did not, um, weren't able to exceed that threshold, um, by each investing $200,000 and counting as two investors when they should actually just be included as one. close personal family relationship would, would be two people in the same household, um, you know, whether that's by definite, definition of marriage or otherwise, so. So if if the residents are where they're living is if that's both the individuals there, if that's their place of abode, then that's considered uh one single transaction. Would that be correct? Yes, sir, that would be correct. Yeah Thank you, Representative Representative Richmond, you're recognized for your question. Yeah Oh, But No, Richardson, I'm sorry. I did. Represented acre. I was just curious, the, the struck the language it says corporation or and change it to for profit business and what made you strike that and change? Um, again, I believe that there's been some current um updates to how the enforcement needs to read for the Securities department to actually make use of these exemptions. I'll defer to them on the need for those to read that way. We, we have uh other exemptions that apply to to nonprofit and government organizations and this exemption applies to small businesses, entrepreneurs, and startups who want to raise capital within the limits that we've set out, um, but those should be to, uh, to kind of meet the public policy reasons behind the exemption should be for-profit businesses that are looking to make a profit and take investment for that reason, so that was the purpose of that amendment. Thank you, Representative Richardson, Representative Longstrom, you recognized for your question. I'm willing to admit my ignorance. I'm totally lost. What, what are, what problem are we trying to solve for? Are we growing government or are we unleashing some, I mean, uh, walk me through this on a little bit more of a clear basis, of course, Representative, I'll give my because again this is outside my area of expertise, but my understanding is that there's been certain exemptions in place for small. investment for small investors that prevents them from investing more dollars into the state. This to me would be loosening government because it actually raises that exemption or I guess minimizes the exemption, if that makes sense, and they can give a little bit more clarity on why the threshold is raised, but raising the threshold actually brings more opportunity for more people of larger capital size to invest into the state. That's correct. Now I can elaborate just a bit more on that. Um, so if there's an offering that's uh issued here in Arkansas, it needs the registration with our department and uh registration by qualification can often be a very involved process, um, without an exemption or some other, um, uh, ability, safe harbor from the full-blown process of registration, um, usually it requires hiring attorneys to file a lot of documentation. related to the company's financials, uh, the investors that they're seeking, the type of business they're running, um, to, uh, ensure that those are safe and that all disclosures are are made to investors here in Arkansas, but we have a lot of exemptions from the full-blown registration, and those are for public policy reasons and otherwise, uh, risk reasons as well, low risk securities don't require the same amount of disclosure, don't require the same amount of paperwork and uh can be issued in a more timely manner. So For instance, government issued securities, um, certain charitable and nonprofit securities that we want to ensure, don't have to go through that process and this exemption is for, uh, designed for small businesses here in Arkansas and about a decade ago, we adopted this exemption, um, with certain parameters, uh, a cap of $1 million total offering and $5000 for non-accredited investors, and it was rarely used. And so that It, it wasn't meeting the public policy that was designed for the exemption to exist. And so in our office, uh, we undertook, uh, an analysis and reached out to a lot of stakeholders and entrepreneurs support organizations, um, to ask them what, what could be done to broaden out the use and create more opportunities for Arkansas businesses, particularly startups that need capital, um, to, uh, to be able to meet this exemption in a way that, uh, we're all, all risk. Disclosures met, but, uh, where we could remove some of the onerous requirements that delay issuance or create expense for those businesses and uh here and their feedback and based on our analysis, this proposal is what we are putting forth. We feel like we'll, we'll help small businesses be able to raise more money without as much uh government red tape, so to speak. OK. Thank you. I'm going to sit with that for a second and come back in to build off of that, the way that I've, uh, Made this makes sense for me is that it seems that there are this will expand the number of people who will be exempt from burdensome red tape, so the amount of people that can participate in this market will expand because they're no longer being held to a standard of accreditation, I guess is or credentialing that is cost prohibitive for them to participate. Thank you, Representative Lundstrom. Representative Tos you recognized for your question. Thank you, Mr. Chair. I'm just curious and, and I've always heard this terminology and what is the threshold when you move from a small business. I keep hearing a lot about a small business, small business. When does that, when do you move from a small business and I guess in terms of like a definition, what is that threshold then you go to a larger business. I mean, I'm just curious. Could you explain that? Well, it's it's a good question, and it's one that I don't know that I can give an exact dollar amount for, but, uh, what we did is we looked at other states with similar exemptions and looked at their thresholds and uh and tried to find regionally comparable thresholds. And we felt like the $10 million mark, uh, here in Arkansas was appropriate uh within the region and also nationwide, um, you know, we'd like to have a high ceiling so that, you know, this exemption stands on its own for years to come. Representatives to build off of that, I think when you look at the market and how it's operating, they're trying to fill a gap where you already have larger businesses that are currently participating in this who have found value in it, and then you have really small businesses that can participate under the current exemptions, and there's a gap there in the middle where they're trying to let the market decide what is small and what isn't, so. All right. Thank you, Representative Tosh. Are there any other questions from the committee? See done as everyone in the audience that wants to speak for or against this bill. Seeing no Representative Baker, you can close for your bill. I'm closed for my bill. I make a motion to pass. That's a proper motion. Any discussion on the motion? See none. All those in favor say aye. I was supposed to say no. I have it. Congratulation, Representative Acker. Your bill's passed. Thank you. All right, if we're gonna go right down the line, uh, Senate Bill 229. Is that correct? You want to present? Yes. All right, you're recognized to present Senate Bill 229. Thank you, Chairman. Thank you, Committee. Senate Bill 229, I believe is significantly less complicated than the previous ones. Uh, this one is to create the Department of Financial Services within the Department of Commerce and so what I believe this is trying to address is there's been a recent merger of two different departments that need more qualifying designation on how they operate, um, and the bank department's proposed bill recognizes the act, um, I guess the trusts and Institutions Act of 1997, and this will create that's a different 10. That's why you're here. Uh, and with that, I'd open up for questions. All right, are there any questions committee, Representative Laman you recognize for your question. Thank you, Mr. Chairman. So is there added cost here? You're, I mean, is this an additional layer or is this just readjusting the layers. Is my interpretation that they are readjusting the layers, I believe in the first page it says Department of Financial Services South consists of the state bank department and the state securities department and the bank commissioner shall be the director of the Department of Financial Services. It was a merger of those two. Thank you. 2. All right. Thank you, Representative Ladyman. Representative, you're recognized for your question. Thank you, Mr. Chairman. So what, what are we doing here? Explain one more time. We got the bank department and the securities department. We merged or made the director of, of, uh, the bank department head of the Securities department. Now, is this a whole different division. What, what, what are we doing? It's my understanding I'll defer to. My guest here, but it's my understanding that these departments have been operating as a unified department and this is clarifying and I guess solidifying their new organization. Well, is it going to be known as the bank department or the financial services, what looks, it reads as if it'll be the Department of Financial Services, and it'll have to departments underneath that representative um maybe I can give you a little clarity, so 2023, the legislature passed a law that made the bank commissioner, also the securities commissioner, so we currently have both of us have the same head, which is the bank commissioner. My understanding is this name changes to kind of make an umbrella organization and name only over the bank department and securities department. There's no additional, you know, fees, changes in administration and my understanding is maybe the next session there'll be a further integration of the two departments under that. name, so this is just kind of setting that up for a future further integration of the departments. Well, I'm still confused. are you going to call it the, the financial services department, or is it going to be, well, why not just call it bank andcurities department. So in other states that are set up similarly, they operate under a name very similar to this, and I think the intention is to start kind of branding the departments as that for the shareholders so they could become comfortable with that going forward, and then there'll be a further integration where my understanding is is that name would become the name for The entire organization, which is similar to about 20 or 30 other states. Well, how, how long have we had the name State Bank department since 1913 and we're going to do away with it. Potentially, well, let me ask you another question then. Well, what about the bankers? What do they feel about this? I'd say um bankers are aware of it and I believe Laurie Trogin with the bank department or with the bankers association is here and she I might turn that over to her to address that question. Do I need to invite her to the table? Yeah, yeah. Yeah. Lord. back. Yeah, if you would please come to the end of the table, recognize yourself, and you may perceive your testimony. Laurie Trogden, I'm the president and CEO of the Arkansas Bankers Association. We have reviewed this bill, uh, our executive committees reviewed this bill, and we don't have any issue with the bill. You don't have an issue with changing the name since 1913. Well, there will still be a state bank department, but there will just be a different name, an umbrella. We consider this an umbrella name, but there will still be a, a state bank department that is separate from securities and will run separately from securities. Am I correct in that statement? Thank you, Mr. Chairman. Thank you all. Thank you, Representative Wooten. Representative Ferguson, you have a question. Thank you, Mr. Chair. Just a quick question for clarification. The first question is, uh, so under the Department of Financial Services, you're going to have a division of the state bank department and then the division of State Securities department and then you'll probably have a deputy commissioner. Or a deputy director over each one of those, correct? I, I couldn't speak to that. I don't think that's been discussed. I know that the bank commissioner will be the head of both divisions within the Department of Financial Services and how they decide to kind of spread that out or organize that. I couldn't speak to you more than likely you probably have two separate supervisors and my next question is, So some of the the duties that the state bank department has will continue and then the state securities department that does certain things with any of those cross over. Now, typically we both stay, stay in our lane, have different missions, oversee different things like a Campbell from Securities was here, you know, they do money servicers, um, non-depository mortgage, and we do state chartered banks. I mean, We each have our own individual missions. One final question, so, uh, state credit unions were under the state's securities department. With that change or you don't know the answer to that as it stands now, credit unions are overseen by securities department and for the moment that is staying the same. Thank you. Thank you, Mr. Chair. Thank you, Representative Ferguson, Representative Ladyman, you recognized for your question. Thank you, Mr. Chairman. So Will this change make the state bank department and state securities department more efficient. Is this to improve efficiencies? Will it work better and smoother? Is that the point of this? Ultimately I believe that is the goal, yes, sir. All right, thank you. Representatives, you're recognized for your question. Thank you, Mr. Chair. Concerning the budget as of now, you submit your own budget for the The state bank department, is that correct? I mean, do you submit your own budget to us as. Yes or no? the Thank you. Uh yes, sir. So in this legislative session there's a single budget bill for both the bank department and the securities department, but we both have separate pots of money, so bank departments funded solely by assessments taken on state chartered banks and then the Securities department has its own fund and money for their, from their registrants. But now you're wanting to move that if I'm, if I'm reading this correctly and you correct me if I'm wrong, you're wanting to move those to uh departments under the Department of Commerce, is that correct? We're already under the Department of You're already under the umbrella of the Department of Commerce. Yes sir, so there would be a new division within the Department of Commerce and then we would both sit as I mentioned, you know, they're becoming, it would be an umbrella organization and there would be a division of banking division of securities within it. OK, and I know this probably, but I'm just, I want to make sure so when the Department of Commerce now when they submit their budgets to this legislative body, you're, your budgets are included in their overall budget. Is that correct? No, sir, we have a separate budget bill for banks have a separate budget. Will that, will this change that? No, sir, it should not. OK. Thank you, Representative Tosh. Representative Langstrom, you're recognized for your question. Thank you. I think I understand where you're going, but with every department, there's a department head, there's a division head. There's all this. I want to make sure we're not growing government and we're shrinking government because if you, your intention is to come back and flush this out later. I just want to make sure to flush it out later doesn't end up with a new director here, a new director there, and we are shrinking government. That's, that's my biggest concern. Thank you, Lundstrom, and I believe that uh My interpretation is that the organization of this is already currently happening. It's more of a branding to kind of unify that the bank commissioner is the commissioner of both of these institutions and having a Department of Financial Services and her being the I guess commissioner of financial services gives clarity to her scope of Of coverage, so the current organ is the current arrangement of how this is being run in my opinion, does not change. This is more of a branding, more uniform and cleaning up the confusion over the banking commissioner also being over the securities commissioner from 2023. They can give some clarity to that, but I do interpret this as more of a Cleanup of the branding of the current, how things are currently run and not growing government, you know, I agree with his comments and I, I would just say that really what this does is basically give the bank commissioner a third title. There are no additional positions being created, she'll continue to oversee both of our divisions, but you'll also be, you know, The head of the division of Financial Services as well, so that that. He has the diabetes Yeah. And there are, as you said, we already have deputy commissioners within the departments and we're not creating any additional oversight or any other positions that both agencies will continue to run in the same way as they are now, so yeah, there will be a contact that is specific to the securities bank or the state department and the state securities department as well as it currently exists. Thank you, Representative Lungstrom. Representative Dalby, you're recognized for your question. Thank you Mr. Chair. I understand what you're trying to do, but it sure seems like to me that this is going to be confusing to everyday Arkansans who since 1913, we've been able to find the banking department and all of a sudden now we have the Department of Financial Services, and it appears to me, and if you could, uh, respond to this, it appears to me there's gonna be a cost involved to educate our Kansans as to where you're gonna find the banking department and where you're going to find the securities department and I wouldn't know that it was under the Department of Financial Services and maybe no one in Arkansas looks for y'all, but I think they do. And so just because 20 other states or 30 other states is doing this, it doesn't seem like it is, um, a good solid ground for us to suddenly decide, let's do it. So could you please address how much is this going to cost in, in your rebranding efforts because it's not gonna be free. Could you please opine to that? Thank you. Yes, ma'am. I don't have a number I can give you. I would say that at least initially we would probably continue going on. We each have our own websites, um, the bank department has a very minimal outward facing presence, um, so most of it are. Availability is online, so I don't know there'd be a whole lot of costs with changing our website. I know we've discussed having a website as a landing page under the division of Financial Services, which would direct people to the bank department or securities department depending on what kind of issues they might have, but I'm unaware of having done any studies about any costs related to branding or marketing for this, and so you haven't done any, so you haven't done anything in regard to. Letterheads. I know. We still have paper out there letterheads, business cards, signage, um. All the things that go into it, I. You have, you have done nothing in that regard, so we don't know how much it's going to cost the state just so that we can have a new name. Is that correct? I would answer that by saying that, you know, our letterhead, our letterhead, we don't have preprinted letterhead. It's an electronic format, so we can just change that with an electronic documents and print out a new letterhead. So for example, when there's an administration change, we'll update the governor's name or the Secretary of Commerce's name on our letterhead, so there shouldn't be any costs with that. Our intention would be to use our existing business cards or anything we would have in the interim until it ran out and then we could look to, you know, styling new Letterhead logo, whatever that might be going forward. So I feel like it'd be minimal costs for our agencies and to build off of that, Representative Dalby, I do believe that there's not going to be an elimination of access as far as identifying the existence of a securities specific area and a banking specific area, this would be in addition to. So I believe that the public may actually find their way back to the banking institution by seeing financial services more than they would be hindered by the existence of a option. The financial services can actually direct people to where they're supposed to, their proper department, so the verbiage and use and availability of information from the Department of Securities and the Department of Banking will not change. This will be a third avenue of resource for the public to use. Thank you, Representative Dalby. Representative McGrew, do you have a question? You Maxon. You recognize. Thank you, Chairman. My question, I guess, and maybe I'm missing something, but if the existing person is over both of these departments now, and nothing is changing, no operations is changing. Why aren't we doing this? What are we accomplish by changing this other than just adding an additional name. A great question. John, I would just have to say that this was intended to be a step in a further integration of these into a, you know, a unified agency with commerce and, you know, to your point, I feel like there would be future um looking to find future efficiencies with administration as in terms of like admins, IT, those sorts of issues. I Manners. So you're saying in the future we would have less employees than we have now by putting some of those. some of those positions together potentially. Thank you Thank you, Representative McGrew Representative Graham, you're recognized for your question. I, I guess so your, your goal with this is to create a more efficient and cost savings in the future. OK, thank you. Thank you, Representative Representative Lady, you're recognized for your question. Thank you, Mr. Chairman. I think there's a lot of confusion here, and I mean, change is hard for everybody and understand the question about people are used to this, but, you know, sometimes change reduces cost, so it looks to me like what you're doing is you're adjusting the management structure and the reporting structure. And when you do that, there should be efficiencies and there should be cost savings. So is that the purpose, you're, you're adjusting your management structure to make a to create an overstructuring manager which should make both departments more efficient. Is that correct? Yes, sir. Thank you. Thank you, Representative Lederman. Representative Root and, you're recognized for your question. the longer I listen to, The lower I listen to you, it becomes apparent to me that y'all have not looked at what caused or you you use the term potential. Well, I was director of the Department of Commerce years ago when I had the bank department to securities department and the insurance department. And all three of them are funded outside of state revenues. They're paid for by the banks, by the securities companies and by the insurance companies. I'm really, where is this coming from? Is this coming from the Secretary of Commerce or the governor's office, or is this coming from the bank department and the Securities department and has your board is the bank board approved your requesting the name change. Who's, who's driving this, so my understanding is this was this bill came from a conversation between the Secretary of Commerce and the bank commissioner. The state Baking Board has not heard it, and you know. under the wall. I don't know that the bank board has any role in approving any sort of activity which is their normally limited to approving our rules, so you're you're saying that the bank board doesn't have any authority out there now. Is that what you're saying for this particular issue? No, sir, they don't. I can't believe that. I, I found, I found this whole Issue ridiculous. I don't see any need to change the name. If you want to change the legislation, that's fine. And with all due respect, Representative Anchor, I, I, I just, uh, I just, I just don't understand what we're trying to do here. I, I don't care if 20 other states have financial divisions, what does that say? Well they're going to get you confused with The Department, the DFA, which I was also director of DFA? Are you going to get concerned with that, uh, confused. I agree with Representative Dalby. It's I just don't understand why the need for the change. So you all have done this without consulting with the board is a courtesy. Well, sir, I, I defer to Laurie Trogden on this, the bankers are aware of this, and you know, Majority of the board are bankers, so I mean they are aware that this legislation is out there. Thank you, Mr. Chairman. Thank you, Representative Ruin. Representative Doby recognized for your question. Thank you, Mr. Chair. Uh, I was interested, you gave it a different answer to Representative Ladyman than what was given previously because Representative Ladyman, as I understood, was asking about, you know, is this changing up the structure and everything and, and you said yes, but in your previous testimony, you said, well, it all remains the same that the, you know, that the bank banking commissioner is already over all this and it all remains the same, so what if you're test to what what. Which one's true? Yes, ma'am. So as I took Representative Lehman's question, he asked if combining this was a way that we were seeking to create efficiencies which is true in 2023 with the bank commissioner becoming also the securities commissioner of that eliminated one paid position at the securities department, so that salary was saved by her serving in both roles, but that's already been done, that has already been done. Yes, ma'am. And the goal moving forward is that we will further combine some of the strative stuff in the sense like we were talking about like our IT staff or admin stuff potentially finding ways to find efficiencies there, so this is part of an ongoing process. So just a name change is going to do it where you're already doing it. So we're really just talking about a name change. We're not talking about changing the structure. We're not talking about any of those things. You're wanting a name change. Correct. Yes, ma'am. And a name change that the people of Arkansas will not understand, in my opinion, but that's, I guess not a question, and I guess I could say, would you agree in your, I know the answer to that, so never mind. Thank you, Representative Doby. Any other questions from the committee? Seeing none. Is there anyone here to speak for or against this bill? See no representative Acer, you are recognized to close your bill. Mind if I consult with my assistant here before I close with the bill? You may. Thank you. we can address these questions. Committee in respect to the questions asked here today, I'd like to pull this bill down and address them individually before this is reheard. All right. So I'm moved. Thanks guys. Representative Baker, um, let's move on to your next non controversial bill. I Yeah. I'll put that in a different pile this one over here. All right, well, that was a 2 pager. I think this bill's 135 pages, so let's see how this one goes. And go, go ahead and identify the bill and proceed with your testimony. All right, committee today we're going to be hearing Senate Bill 2:30, um, let's see here and I will defer a pretty significantly to my colleagues here as this is a pretty substantive change. Again, my understanding is the bank department is attempting to create some logistical efficiencies, um, and this will help encourage that. So during the bank department would like to amend, reorganize and update and correct the current Arkansas Trust Institution. Act of 1997. This was previously based on a model law developed by the Conference of State Bank Supervisors. Um, and except for the repeal of sections 200 through 211 by Act 1031. There have been no additional changes to the Act since its adoption. Currently there is only one Arkansas Chartered State Trust Institution in the state that operates under this Act. The act is out of date internally inconsistent and poorly organized with 199 sections of code that are not organized into subchapters or topics. The bank department's proposed bill reorganizes the act by creating 12 subchapters organized by topic correcting internal inconsistencies in making updates where appropriate and clarifying language, and with that, I will welcome any questions. you recognize for a question. What is the one state chartered institution right now. That's a community first trust, and they have been in existence about 20 years. They were recently acquired by one of our banks, but they still exist as a separate subsidiary under the Trust Institution charter. What would this do to them? It doesn't do anything to them. Our goal is to primarily just to reorganize it to where it was more coherent. There were sections of the code that conflicted with each other, but we didn't do anything that would change any of their, you know, rights, abilities to conduct business. They are aware of the act we've spoken with them and shared with them. They haven't expressed any concerns to us, so it's just more of a housekeeping to make the act more user friendly and um we did incorporate one section that was in the model law that was not originally adopted, and that does not impact them in any sort of negative way. It's just, you know, one more way to open offices. Thank you. Representative Dalby, you recognize for question. Thank you, Mr. Chair. I appreciate you reorganizing because it is hard to negotiate through. You mentioned that there was one substantive change and you just alluded to that. Could you point to where that substance is changes and what that substantive change does there are two sections um I believe it's in the. So I want to say it's in subchapter 8, but can you tell us what page um. P I will try. One moment. I apologize, I can't give you a page only it's called a representative trust office, and they are similar to an LPO with a bank. What it is is an office that a trust institution may open up where they don't act as a fiduciary, but they conduct marketing. They can help customers with their accounts, so it is just a means for them to kind of branch out with that opening a full branch of their business. Any other questions from the committee? Representative Warren, you're recognized. Well, then what are you referring to help them with their accounts at this location. So for instance, if you had customers in that area, they wanted to come in and talk to someone about their account with the trust institution. They could help them, you know, with the paperwork or whatever questions they might have about it, but they don't actually do the fiduciary administration of the trust from that office. That would be done at the central office. OK, it rips and warn, it's my understanding that the activities that they could perform that would be outside of the fiduciary requirements would include such as advertising, marketing, or soliciting trust business, but not accepting fiduciary appointments is kind of how that seems to be delegated by these trust offices. So as marketing only. Primarily, yes sir, trying to get business but no rebranding or renaming. Any other questions from the committee? Seeing none. Is there anyone in the audience who would like to speak against this bill. So anyone else now I should like to speak for the bell? Representative Aker, you are recognized to close for your bill. Mr. Chairman, I'm closed for the bill. I make a motion to pass. We have a motion do pass as a proper motion. Is there any discussion on this motion committee? Seeing no, all in favor of motion do pass, say aye aye and say no. Congratulations, you have passed your bill, Reverend Baker. Members, is there anyone else who wants to take up a bill that could be fairly quick before we get into Representative Acres last bill, um. OK, seeing no one. I seen Virgin Island. I have a question, Mr. Chairman. I know we have a lot of deals and and pending uh depending financial impact statements. Could you give us a status report on that. Uh, I can't if you want to let me know specific bills that you want me to inquire about, I can do that. My bills. I thought she might be to your bills, um, as you know, I do not, um, do that. I'll try to get you some information on your bills. Yes, sir. Resident Baker, would you like to, you certainly don't have to I think that is the, the last one on the agenda for today, so. Weaker, uh, my understanding is you are wanting to present SB 94. That is correct, correct. OK. Um, if you have anyone you want to call to the table, go ahead and do that. If not, you may proceed. Yes, I'd like to call Steve Good and the Arkansas Retailers Association. OK. Um, sir, go ahead and introduce yourself, who you're with, and, um, and then you can proceed with your testimony or your presentation, Mr. Representative Baker. Thank you for chairing members of the committee, Steve Good, the Arkansas, Arkansas retailers. I Uh, community today 94, uh. Attempts to amend the requirement for all new all-terrain vehicle dealers and new low speed vehicles to maintain service and parts storage areas. Uh, what this bill does is it allows retailers to sell ATVs and UTVs without having to have an onsite service center within the contiguous building of the area that they're selling the Products, um, it does, it is a agreed upon bill, I believe, with a lot of the service dealers as well as the manufacturers and the current retailers. Um, the warranty work has been a big issue. This is still required and honored by the manufacturer just like today. The amendment requires the retailer to coordinate with the warranty service provider within 40 miles, and the amendment was the agreement between the dealers and the retailers. Uh, this to me from my district in particular, we had a tractor supply. um recently invest over $170 million into a new distribution center out in the Malmell area, and there's been some, I guess, interesting developments in their ability to have to distribute out of our state to sell their own products, um, and that's led to further investigation into how to correct that while still mitigating the impact on small businesses. Obviously I'm very empathetic to the small businesses who have to operate in this space, and I believe the amendments do give them significant leverage in the 40 mile requirement for them to have to agree to participate in service. And with that, I welcome any questions. And Representative McCollum, you can ask for a question. Thank you, Mr. Chair. What is I'm sure it's in here and defined, but you use the term they have to coordinate what what all does that mean? Uh, so I appreciate the question. I believe on page 2 line 17. It mentions that, uh, they have to give the name of a service provider that will service the Altrain vehicle, so it's not simply that if they exist or that if they um they can't just mention that that's an option. They have to guarantee a will service, and so that would be an onerous on the retail. to coordinate with service providers in the area. Thank you. And I, I do actually want to follow up on that for Mr. Good, I have a couple of questions in that regard. Um, and that's where Representative McCollum was, was discussing. So in essence, what the testimony is, is there's going to have to be a contractual relationship, um, between the retailer and whomever's going to provide the warranty service. Is that correct? The relationship will actually be from the manufacturers that the retailers sell their product. Yes, sir. Yes sir. And so that will be disclosed on the front end to the purchaser. at the retail location of who that is and they're within 40 miles, um. What verificate let's just say that once this is granted, that that, um, that that repair shop for whatever reason, goes out of business. Um, well, the motor vehicle commission promulgate rules on that that we have to have I guess my thought is once they get to sell it, is anyone going to be looking to make sure that's still in effect. Could you just touch on that. Yes, sir, as part of the agreement, we agreed that that uh motor Vehicle commission would promulgate rules that would touch on issues that weren't covered in the legislation like this. So potentially maybe just annually to say this, you know, Smith repair still in effect and are still in business and ongoing entity, etc. something like that. Yes, sir. Is that correct? Yes, sir. OK. Thank you. Yes, sir. Any other questions about the committee? Uh, right. Um, seems like we're getting in the middle of businesses and their dealings and you've got to have a repair service or we've told these all-terrain vehicle folks, as long as you have a repair service, you're in business and now we're separating that. I'm a little confused. Why are we here? Can you give me a little background and what what are we solving for? Sure, yes, ma'am. We, we think this is a consumer choice bill. Arkansas is one of only 2 states in the nation that, that requires that dealers have service centers on site to service vehicles. And so what that does is it limits consumers' choices because in other states there are ATVs and UTVs that are, that are able to be sold at retailers that don't have service centers that typically are are more. Cost effective UTV or ATV. Uh, we certainly, you know, uh, value our, our independent dealers, our power sports dealers that are in the state, the, the Polaris dealers, the Honda dealers, the Kawasaki dealers, and I think they have requirements from their manufacturers that they must have a service center. We just have manufacturers that that will be able to be sold in some of our stores that don't have that requirement. They, they have the, they have to honor a warranty. That's federal law, but they allow independent businesses to set up service centers or, or war. centers to to service those. I, I'll give you a free example. You, you could go today, uh, if you wanted a new, uh, zero turn lawn mower. You, you can buy a, uh, a very nice zero turn lawn mower at an individual dealer, uh, that, that sells those or you can also buy them at a big box store. Either way, the warranty is covered by the manufacturer. Now some of the warranty work is done at maybe if you buy it from an independent dealer, the warranty work is done there, but if you buy it from a a bigger store your warranty work is guaranteed by the manufacturer, but it's done in a different location. And so this will allow our dealers, our retailers to be able to sell items that they're able to sell in 48 other states. We just can't sell here because of this law that requires that we have a service center. Because quite frankly, we build, you know, most of our retailers build the same, same box across the nation. It's cost effective that way, and they don't want to have to come to Arkansas and build a different box. That they're doing in other places. So again, consumer choice bill allows consumers a wider variety of items to buy, uh, 48 other states, you know, it's happening, happening very successful. We've reached out to the manufacturers. I think y'all should have gotten some letters from manufacturers, emails that, that talked about the warranty work. And, and what the manufacturers tell us is that for every tractor supplier lows that that opens and and is able to start selling these vehicles, there will be normally 3 or more service centers that will open up within a 40 mile radius for them to service those those vehicles. Yes, ma'am. Good question. Refson McGrew, you're recognized for a question. Thank you, Chairman. By providing this, have you done any research to find out. It seems like to me this would create more competition in the market and therefore a better price to the consumer. We think it's a great consumer choice billpresentative. Yes, sir. If you, if you look around the nation, we, we think that it's, it provides consumers with an opportunity to buy more variety and sometimes at a cheaper price. Yes, sir. And to piggyback off of that, I do think it's important that some of these requirements do come from the manufacturer down. So if there are uh If we consider them luxury or higher quality uh manufacturers who want their to have uniformity in how their patients or patients, sorry, how their consumers purchase and operate, they would still have the autonomy to to make those requirements. This again opens up for an expansive list of maybe lower cost alternatives to increase competition while still maintaining the service requirement within a 40 mile radius. Representative Richardson, I think you were next with a question. Thank you, Mr. Chair. So, I heard you say that it will allow some manufacturers to come into Arkansas that aren't currently here. Yes, sir. Can you give me an example of some of those, and these will be brand names. I'm not necessarily sure that they're going to be the exact manufacturer, but like Massimo, uh, it will be a dealer or will be a, a, a, a unit that will come into the state, Bighorn, Axis, those are just some of several that will come in. Yes, sir. OK, and what do you see the impact doing to the, to the small dealers that are in our neighborhoods right now. What type impact do you think this is going to have on those guys. I do think it will create consumer choice for, for the consumers and so it could have an effect, but quite frankly, those manufacturers, the big ones, Polaris, Can Am, Kawasaki, those folks they sell in the other 48 states and so it, it, you know, it, you know, look, I'm a retailer myself. It could competition could happen and it could, it could create a better buying environment for the consumer. Uh, it's uh, you know, we, we love competition amongst our retailers in Arkans. And, and this will provide that, you know, Representative Richardson, quite frankly, you know, uh, I'm a Can Em guy. I, I love Canham. I think they make the best UTV on the market. I'm not going to change and representatives grew shaking his head. He likes something different, but uh, I'm not gonna change. I'm still gonna go and, and really I drive all the way to Pine Bluff for my K&M and I live in Faulkner County. I, I passed a couple of them because they provide great service down there and so I'm still gonna, you know, buy from my Canham dealer down in Pine Bluff, uh, and So I think some consumers will continue to make that choice and some consumers will buy cheaper or or more local, you know, here's the thing, we, we talk about a small neighborhoods, but if you think about rural, uh, you know, tractor supply is in a lot of areas that consumers can't buy you TVs today. They have to buy a drive to bigger markets. Uh, I, I, you know, I have a grocery store in Clinton, and there is no UTV dealer in my area at all, tractor supply will actually provide that then, and then, you know, we're the closest UTV dealer we're to today. is either having to drive to Conway, which is 40 miles, or Harrison, which is further than that. So, you know, in, in a small community like Clinton, uh, it'll provide a service and an opportunity for consumers to buy without having to leave town. So this now gives tractor supply an opportunity to sell these items. Yes sir, it does, you know, what, what happened was when, when tractor supply made the huge investment in Malmill and created, you know, 500 jobs, over $175 million investment, uh, their leadership team came for the ribbon cutting and then, you know, did some store tours afterward and and did the shore tours and, and, you know, leadership said well where are the UTVs and the ATVs that we sell across the nation because they actually have those products in that warehouse in Mel and they're selling them into Oklahoma and they're selling them in Texas. They're selling them into Tennessee and Mississippi, and they can't sell them here in Arkansas. And so when leadership asked, you know, the, the, the local team had to say, well, it's against the law for us to sell them here in Arkansas and so that's kind of why we're bringing you this bill today and to piggyback off of that. Representative Richardson, so as you all know, I, I operate in a, in a very similar competitive retail market in the pharmacy space, and I do believe um that there's a difference in just a race to the bottom in price and a race to the top in quality, and so if small dealers have a long history of providing a higher quality experience for the consumer, having a direct line to have those discussions, having the on-site service center. If the consumer finds value in that, I believe that they will maintain that. loyalty. Again, that's, you know, people ask me all the time, you know, when you're concerned about Amazon or all of these mail order issues, there is, there is concern on when individuals are forced to use those, but as far as the quality, um, You know, anytime you force somebody to buy your product, I think you sell a terrible product, you know, even the competitive market, if you hire, if you offer a higher quality return on a patient's experience, they'll choose to use you. Represent Perry, you ask for a question. Thank you, Mr. Chairman. Representative Baker, so on. Well, this it says all terrain vehicle. Does this include gas and electric? That's a great question. I'll defer to, yes, sir, I think those manufacturers sell both, uh, and, and let me clarify that, but I'm, I'm sure when I've looked on their website, I've seen both, if I'm not mistaken. Yes, sir. OK, because I know, I know we have a Lowe's in Jacksonville and they have the golf carts. So they, they have golf carts and uh uh which they are able to sell those now, uh, again, when we look at rules, we'll probably try to look at rules a little closer, you know, you can sell a golf cart at Lowe's right now that has regular tires, but you can't. golf cart Lowe's right now that has knobby tires and so, uh, you know, it's uh you have to limit the terrain. This is all the terrains and I'm assuming that as soon as you start limiting the terrains, then you can sell them, I'll stay off the green. Yes sir, that's right. Yes, sir. So we will try to seek some remedies in those rules when we, when we do work on those for things like that as well. Yes, sir. Thank you. Yes, sir. Representative Wooton, you're recognized. good. Mr. Good, how many, how many stores does, does, in addition to the $175 million investment in the Mall male. How many stores do they have in the state? I know they have one in BB and one in Cabot. Uh, yes, sir. I think we, uh, tractor supplies is over 40 stores in the state today, if I'm not mistaken, and they've, uh, you know, they've been very aggressive about coming to communities that were underserved. Again, like I said, they came to Clinton. We were underserved in that community for, for that type of for those type of items and so, uh, you know, Cherokee Village, uh, BB like you talked about, uh, Cabot Cersei, so I think over 40 locations, if I'm not mistaken, represent. I'll get you an exact number, that's fine. And how, how, how many employees do they? but each one of those facilities. Uh, again, I, I, that's a question I'll have to verify, but I think the last I checked is they average about 20 employees per location or more. Thank you, Mr. Chairman. Thank you. Any further questions? But saying that, thank you for your testimony. Um, we do have some someone signed up in this matter to speak against the bill. Seth Maxwell, if you're, yes, sir. Come up, introduce yourself, who you're with, and you may proceed with your testimony. Thank you Mr. Chair, members of the committee, my name is Seth Maxwell. I represent Doug Reynolds Suzuki, a local power sports dealership here in Little Rock, um, I have firsthand knowledge of two of the products that are going to go into uh the retail stores, um, and I have one concern, Arkansas consumer responsibility. That's, that's it. I'm not here to stop anybody or or block, you know, free commerce. It's simply the consumer, um, with these particular products, we handle these for 5 or 6 years. I believe, um, I come from a service background, again, very, very, um, up front on the front lines with this product, um, not necessarily attacking the brand. We had multiple issues with this brand, um, just the quality in general, so Ego, that leads us to uh multiple warranty issues, brand new machines, 20 miles, etc. um I was at the uh, the amendment basically for the other dealers. express my concerns and that's kind of what I'm here to do today. Um, it The independent repair facilities in this state have been in the industry for 32 years and it is an ever revolving door. They're just, they're in and out constantly, um, and one of the major concerns for us as dealers is we're going, going to put this product and it has to be registered with the Department of Finance Administration, uh, quite frankly, it's not a paint gun or, you know, a, another product, um, so it has a lot of regulations. Obviously, we all know the safety issues that are concerned with these machines, um. We're trained in our facilities to be able to handle any warranty, you know, opportunities and, and more of that just safety. We provide helmets, we provide the necessary, you know, uh um um means and, and again educating the customer on how to operate these machines. That's very important to specialized, you know, product line, uh, and that, that's where we're really concerned just to make sure that um you know, the consumer stays safe and, and again not to block free commerce. Um, we don't currently carry those for one reason, that was customer satisfaction. Um, we just could not continue to take care of these customers with these particular products, um, and again, our, our main concern is just the Arkansas consumer and we're looking at amending legislation that the only reason this legislation was written to protect the consumer, and that's that's our concern as dealers. That's all I have to say open any questions if there are. Thank you for testimony, Mr. Maxwell. Committee, is there any questions for, for Mr. Maxwell? saying that thank you for your testimony, sir. There is no one else signed up. Is there anyone else in the audience who would like to speak for the bill? Saying no one, is there anyone else who'd like to speak against the bill? OK. Saying no one represent Baker, you're recognized. Uh, thank you committee and thank you, Mr. Maxwell, for your testimony. I do believe that that does equally speak volumes to the fact that Mr. Maxwell offers a much higher quality experience for its customers as far as the products he services, the products he sells, and the education that he provides. I think that this allows for more options to be given into the hands of the consumer to find their return on that quality, and again, I believe I have faith. The rulemaking process as well to address any gaps that may result in consumer harm. With that, I'm closed for my bill, and I make a motion to pass. OK, we have a motion to pass, uh, committee, is there any discussion on the motion? saying no motion do pass by Representative Acer, all in favor say aye. Any post say no. Congratulations, you've passed your bill. Any other business before the committee today? Seeing none, we are adjourned.