Government Affairs Local Legislative Update
February 8, 2007
Manufacturers Sales Tax Exemption for Utility Costs:
The Governor
and the Speaker of the House reached an agreement Tuesday on budget
issues including the creation of a partial sales tax exemption for utility
costs incurred in the manufacturing process. The plan would reduce the
state sales tax rate by 1.5 cents effective July 1, 2007 for the first year of
the next biennium and an additional ½ cent effective July 1, 2008 for the
second year of the biennium. This means we will enter the next legislative
session with a sales tax rate of four cents instead of six cents on
manufacturers’ utility costs.
Governor’s press release: In a meeting this morning [2-6], Speaker Petrus and
House leadership agreed to support Governor Beebe’s plan to cut the state
grocery
tax in half beginning July 1. Governor Beebe praised the Senate and
specifically the
Senate Revenue and Taxation Committee for holding firm to the
plan to eliminate the
state sales tax on groceries, the largest tax cut in state
history. Beebe and the House
leadership have worked together to reach a
positive understanding to help move our
state forward with substantive tax
relief that includes:
Cutting in half the grocery tax, the first step in a phase-out of the tax.
Adjusting the state income tax brackets so that those Arkansans earning
100%
of the federal poverty level will not pay state income tax. This will
save low-income
Arkansans about $16 million a year.
Increasing the cut on the sales tax on utilities used by manufacturers
from 1% to
1.5% in the first year of the biennium and 2% in the second
year of the biennium.
This will provide a savings to manufacturing employers of $15 million the
first year
and $20 million the second year.
Senator Horn’s (Foreman) amendment to SB 119 passed out of the Senate
Committee
on Revenue and Taxation Wednesday. The definition of manufacturing
in the amendment
to SB 119 includes operations classified in NAICS codes 31 to 33.
Here is a link to the
amendment: http://www.arkleg.state.ar.us.pdf
Currently Oklahoma, Texas and Missouri charge no sales tax on manufacturers’
utility
costs while Tennessee and Mississippi charge 1.5%. Louisiana currently
charges 3.3%
with electricity exempted for forest products and a cap on natural
gas taxes for all
manufacturers. There is also legislation seeking a full exemption
in Louisiana. In
addition, 35 other states provide some kind of sales tax relief for
their manufacturers.
Regional Mobility Authority:
We are actively pursing the adoption of Regional
Mobility Authority Amendment legislation. A regional mobility authority (RMA)
is a political subdivision formed by a city, county, a geographically designated
portion of a city or county, or a combination of the above for the purposes of
planning, constructing, operating, funding, or purchasing improvements to a
surface transportation system. Due to pursing sign off by a number of agencies,
organizations and legislators a bill has not yet been filed. I anticipate a bill to be
filed soon. The attached RMA summary and background information is provided by
Mike Malone, Executive Director of the Northwest Arkansas Council.
Union Dues, Checkoff and Payroll Issues: SB 248
An Act to establish regular
and
uniform pay periods for Arkansas employers and employees; increasing the
ways in
which employers may pay wages to their employees; establishing the time
and method
of paying employees’ wages following termination of employment was
filed by Senator
Sue Madison (Fayetteville) last week. The State Chamber has
checked with HR
professionals and employment attorneys and have discovered
grave concerns about this bill. You should have your HR people look at it right away and make contacts
with your
legislators if you see problems. Here is a link to the bill: http://www.arkleg.state.ar.us
Bills filed in the 86th General Assembly:
To date, the House has filed 417 bills
and the
Senate has filed 271 bills. The following is a link to bills being tracked
by the State
Chamber/AIA that are of particular interest to the business community
and industry: http://tracking.weknowarkansas.org/allbills.php
New DHHS Director:
Governor Mike Beebe named Jay Bradford of Pine Bluff
to the
Division of Behavioral Health Services at the Arkansas Department of Health
and Human
Services on February 5th, 2007. Bradford, served 24 years in the
Arkansas Legislature,
16 as a senator and the past eight as a representative.
For details: http://www.arkansasbusiness.com
Other State Agency Governor Appointments:
For other recent Governor
appointments: http://www.arkansas.gov
Legislative Forums: The Chamber hosts a Legislative Forum every other Saturday
morning during the state’s legislative sessions (held every two years). The forums
provide members with the opportunity to meet with area legislators to discuss topics
of interest being addressed during the session.
The February Forums are Saturday, February 10 and Saturday, February 24 at the
Embassy Suites Northwest Arkansas. Breakfast begins at 7am with the forums kicking off
approximately at 7:30am. Legislative Forums are free and open to members, but
reservations
are required by registering online at www.RogersLowell.com or email martine@RogersLowell.com.
I want to thank Embassy Suites Northwest Arkansas and the John Q. Hammons Center for their sponsorship of this year's Legislative Forums
Government Affairs Committee: The Rogers-Lowell Area Chamber of Commerce will hold Government Affairs Meetings in the Baggett-Trammel Conference Room on the third Friday
of each month at noon (2/16, 3/16, 4/20, 5/18, 6/15, 7/20, 8/17, 9/21, 10/19, 11/16 and
12/21).
If you are interested in participating please email martine@RogersLowell.com
Daily Arkansas Legislative Updates: If you are not already receiving the Daily Legislative
Update provided by the Arkansas State Chamber of Commerce and the Associate
Industries of
Arkansas please let me know by contacting me at martine@RogersLowell.com.
Please do note hesitate to contact me with any questions on the above information.
Best regards,
Martine L. Downs
Vice President Government Affairs
Rogers-Lowell Area Chamber of Commerce
317 West Walnut
Rogers, AR 72756
479.619.3193
Fax: 479.636.5485
martine@RogersLowell.com
Visit our website at:www.RogersLowell.com
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