Comprehensive summary of the 86th General Assembly

Here are some facts and figures from the 86th General Assembly:

Convened Jan. 8.; recessed April 3.
Length of session: 86 days, shortest since 1991.
No. of bills and resolutions filed: 2,816, fewest since 2001.
No. of new laws: 1,754 (2,325 two years ago)
Eight vetoes; legislative overrides are unlikely as of now.
Formal adjournment is set for May 1.

Highlights:
• Entering the session, we had the blessing of a huge budget surplus. It wound up being $919 million.

• $456 million of the surplus will go to school facility repairs and construction.

• Coupled with another $121 million in new money for public schools, this could very well get the state out from under the Lake View school-funding lawsuit. School funding was increased by $400 million in 2004, and by another $132 million in 2006.

• We approved more than $200 million a year in tax cuts, the most in state history. That includes:
-- cutting the state sales tax on groceries from 6 percent to 3 percent;
-- removing the poorest of working Arkansans from state income-tax rolls.
-- an additional $50 homestead credit on property taxes, bringing the total credit to $350;
-- cutting the diesel tax to help farmers;
-- cutting the states sales tax on utility bills to help the state’s ailing manufacturers.

Also, we put an additional $40 million into preschool programs. We put $50 million into a “quick-action closing fund” to help the governor seal the deal on bringing a major industry to the state. We also increased funding for the state’s colleges and universities by 10 percent, a record increase. The state prison system received enough to money to open two more badly needed units, and the state parole system will be able to hire 60 new probation officers.

The Department of Health and Human Services will be able to expand programs to help abused and neglected children. State and local highways will receive $100 million from the state surplus. The House and Senate will split another $40 million in surplus money for general improvement projects, and the governor will have $188 million at his discretion for statewide general improvement projects.

We also approved a $50 million appropriation to help build a new cancer research center at the University of Arkansas for Medical Sciences. UAMS plans to raise a $50-million-match through private donations, and a bond issue will bring in another $35 million.

Voters for the November 2008 general election will have an opportunity to vote on two proposed constitutional amendments. Lawmakers can refer up to three possible amendments to voters every two years – and a fourth one, if it concerns salaries of constitutional offerings. We approved two proposals for voters. They are:

- To rid the 1874 constitution of obsolete or archaic language such as a phrase denying “idiots and insane persons” the right to vote.

- To allow the General Assembly to hold annual sessions. We currently meet in regular session only during odd-numbered years. If voters permit, the session during even-numbered years would be limited to budget matters. Such sessions also would be limited to 30 days but could be extended only once, by a maximum of 15 days. Consideration of any issue not related to the budget would require a two-thirds vote of both chambers.

By all accounts, this was one of the smoothest and most harmonious sessions in memory. There are a couple of reasons for that:

1) a $919-million surplus can bring along a great deal of good will. Having such a surplus eases the tension, with lawmakers knowing that there will be tax cuts, not budget cuts, while also realizing they still must set spending priorities. There will always be more good programs than the state can fund.

2) Fantastic leadership in the House. Speaker of the House Benny Petrus built and maintained an alliance of Democrats and Republicans and used that super-majority of supporters to push the session along.

3) The governor entered this session with 20 years’ experience as a state senator and four years as attorney general. He knows those marble hallways as well as anyone, not to mention the intricacies of the state budget. He was fair and open-minded, willing to listen, willing to drop in on a committee meeting or meet with lawmakers in the Capitol cafeteria, in the hallways, in offices, wherever he could. He entered the session standing firm on a handful of issues – and he got those passed – and compromised on other areas favored by lawmakers to get those passed.

---

Detailed legislation by issue:

Tax cuts, specifics
• Cutting the state sales tax on groceries from 6 percent to 3 percent effective July 1.

• Adjusting income-tax brackets so that the poorest of Arkansans pay no state income taxes.

• Cutting the state sales tax on energy consumed by manufacturers from 6 percent to 4 ½ percent this coming fiscal year and by another ½ percent during the second year of the biennium.

All told, it’s a record $319-million tax cut, according to state finance officials: $252 million from the grocery-tax reduction, $32 million from the income-tax cut; and $35 million from the manufacturers’ tax cut.

There’s also a $50-per-year increase in property-tax relief. Homeowners will see their tax credit on their primary residences increase from $300 to a maximum $350. Some 538,000 homeowners will be helped by that legislation.

A family of four that spends $150 a week on food items at the grocery store will save $234 a year under the grocery-tax reduction. The tax cut will be on grocery items defined as “food” under federal guidelines. It doesn’t apply to restaurant meals or to prepared foods such as those at grocery stores’ delicatessens. The reduction will slice $252 million in state general revenues over the next two fiscal years. The tax cut also doesn’t affect any sales taxes on groceries levied by cities and counties or the state’s one-eighth-cent conservation tax. The bill saw unanimous passage in both chambers: 35-0 in the Senate and 99-0 in the House.

Adjusting income-tax tables will help some 81,000 Arkansans who are at or below the federal poverty line. A family of four with an income of $20,700 is considered to be living in poverty and will be freed of paying state income taxes. The poverty level is $10,200 for a single person, and $17,200 for a household of two. Also, a single head of household or widow or widower with an income of less than $13,700 would be taken off the state income tax rolls.

The effort to help manufacturers stems from the loss of some 7,000 high-paying manufacturing jobs in the state since November 2005. The governor initially sought a 1-percent cut in the state sales tax on energy consumption by manufacturing plants but agreed to the 1 ½-percent cut as part of the compromise with House leaders.

The governor put his signature to Act 195 of 2007, removing the poorest of working Arkansans from state income-tax rolls. The law raises the minimum level at which Arkansans must pay state income taxes – to $9,800 in annual income for an individual and $20,000 for a family of four. Those dollar figures coincide with the federal poverty level. About 116,000 Arkansans will be helped by the law.

School funding
The state’s share of per-student funding will go from $1.82 billion to $1.83 billion in fiscal 2008 and to $1.85 billion in fiscal 2009. This includes Beebe’s “enhanced educational funding” -- $23 million in 2008 and $40 million in 2009 -- which goes beyond the “adequate” mandate of the state Supreme Court in the Lake View decision.

Total per-student funding, including the local share, would increase to $2.65 billion in 2008 and $2.73 billion in 2009. Most school officials gave their support. All 135 legislators voted for the major school-funding bills.

Total state education spending will increase $107 million, or 4.3 percent, in fiscal 2008, bringing total state education spending up to $2.57 billion. That would rise to $2.60 billion in fiscal 2009. The biggest share of that increase is for another $40 million for additional preschool programs.

K-12 and higher education
• Invested $40 million in Pre-K education, expanding this opportunity to every at-risk child whose family earns below 200% of the federal poverty line.

• Created a $1,000 need-based scholarship program so that more Arkansans who want to go to college can have the means to get there.

• Increased funding for our state colleges and universities with a record 10 percent -- increase -- the largest investment in higher education ever made during a session that also brought tax relief.

• Took $465 million of our surplus money to fund capital improvement projects for educational facilities, the largest single capital investment in state history.

• Established the structure for Traveling Teachers to ensure that all Arkansas children receive a top-quality education, regardless of whether they are rural or urban.

• Created alternative pay for teachers.

• Allowed paid leave for parents who are state employees so they can participate in parent-teacher conferences and volunteer in their children's schools.

• Amended the 2003 Body Mass Index law at public schools. The new law will have the tests conducted every two years, rather than every year. Standards for higher nutrition and cutting junk food remain in effect.

School Facilities
Legislators approved $456 million from the projected $919 million state surplus to build and renovate school facilities across the state. That’s in Act 1031. More than 1,600 projects have been approved with a total state and local cost of $1.4 billion.
The state’s share is $631 million and will be paid with cash.

The local share varies from district to district, depending on a ratio of the value of property in the district compared with enrollment. Districts would fund their share with cash, ongoing revenue or a bond issue.

In addition to the $456 million from the surplus, the state’s share will come from $70 million from general revenue this session, $70 million from general revenue in the 2009 session, $35 million left over from $50 million approved for facilities in the2006 special session.

Previously, the state wasn’t in the business of funding local school facilities. But the Arkansas Supreme Court in 2002 declared that it ultimately is a state responsibility to ensure that each public school child has an equal opportunity for an adequate education.

The Legislature also approved a plan to allow the governor to call a special election by 2011 on whether to issue bonds of as much as $750 million for school facilities.

Constitutional amendments
Voters for the November 2008 general election will have an opportunity to vote on two proposed constitutional amendments. Lawmakers can refer up to three possible amendments to voters every two years. The offerings this year:

- To rid the 1874 constitution of obsolete or archaic language such as a phrase denying “idiots and insane persons” the right to vote.

- To allow the General Assembly to hold annual sessions. We currently meet in regular session only during odd-numbered years. If voters permit, the session during even-numbered years would be limited to budget matters. Such sessions also would be limited to 30 days but could be extended only once, by a maximum of 15 days.

Bond issues
The Legislature approved bond measures for water and irrigation projects, highway improvements and school facilities construction and maintenance. The legislation alone doesn’t authorize the bonds, but calls for elections in which the voters will decide to authorize them or empowers the governor to call elections.

Act 631 renews the bonding authority of what is now the Natural Resources Commission. Voters nearly 10 years ago gave the entity the power to issue up to $300 million in bonds to fund irrigation and water projects, but that money is nearly gone. The new legislation allows a new election to authorize the commission to issue $300 million more in bonds. Proceeds from the bonds in Act 631 could be used to finance and refinance the development of water, water disposal, pollution control, abatement and prevention, drainage, irrigation, flood control, wetlands and aquatic resources projects. No more than $100 million of it could be issued to finance projects for irrigation.

Unless the General Assembly authorizes a greater amount, the total principal amount to be issued during any two-year budget cycle would be limited to $60 million. The vote would be in the 2008 general election unless the governor calls a special election before then.

Act 511 gives the state authority to issue $575 million in bonds for interstate improvements, subject to voters’ approval. Debt from the bonds, which would have to be issued before 2014, would be repaid with proceeds from a 4-cents-per-gallon tax on diesel fuel instituted in 1999.

Act 1021 create a stream of money for school building projects, if more money issued years down the road.. The $750 million in bond authority allowed under the act would serve to back up the roughly $630 million that lawmakers and the governor spent this session.

General Improvement Fund
Projects funded with the $919 million General Improvement Fund, which is made up of state surplus funds, included $40 million that legislators distributed to projects to benefit their home districts.

Figuring out how to fund local projects was a problem for legislators this session, in light of the Supreme Court’s ruling in December. The court said a $400,000 appropriation for miscellaneous projects in Bigelow during the 2005 session was unconstitutionally local legislation.

Legislative leaders have said their plan to comply with that ruling is to fund local projects through grants with state agencies, and those agencies would have discretion over which projects were approved.

Besides the $456 million for public school facilities, the statewide projects funded include $80 million for highway projects, $44 million to settle a lawsuit with the federal government over improper Medicaid billing during the administration of former Gov. Mike Huckabee, and $36 million for a cancer center at UAMS.

Tax, fee increases
Even with a state revenue surplus, some taxes and fees are going up. Act 869 levies a 1 percent excise tax on the retail sale of beer to raise about $3 million a year to be divided between the state Department of Health and Human Services and the University of Arkansas for Medical Sciences. It’s for programs to protect children from sexual abuse, including a system of children’s advocacy centers. A previous 3 percent excise tax on retail sale of beer expires June 30. It’s replaced the next day by the 1 percent excise tax.

Act 292 raises by 5 cents -- to 30 cents -- the monthly fee water systems charge customers to fund required quality testing. This would raise an additional $600,000. The current fees raise $3.1 million per year.

Act 1059 increases fees collected by the state registrar of vital records. Among other things, the fee would go from $5 to $15 for issuing a new certificate of birth for a person who has been legitimated or whose paternity has been determined or whose name has been changed. Existing fees raise about $33,000 a year. The bill will increase the total to $137,000 a year.

Act 615 increases the recording fees charged by county recorders for certain documents. The fee for recording deeds, mortgages and other documents will increase from $8 to $15 for the first page and from $3 to $5 for each subsequent page.

Economic Development
Act 510 creates the $50-million economic development incentive quick-action closing fund, effective July 1. The fund can to be used by the state Department of Economic Development for “investment incentives to compete with other states to attract new business and economic development to the state or to retain existing business in the state.” Any proposed use needs to be approved by the governor and reviewed by the Legislative Council, which oversees legislative business between legislative sessions.

Act 1025 authorizes creation of the Arkansas Risk Capital Matching Fund to help develop and retain technology-based industries. It is one of several measures proposed by Accelerate Arkansas, which includes leaders in business, higher education and other fields. The leaders’ goal is to increase Arkansas’ per-capita income to the U.S. average by 2020.

The fund’s financial assistance must be targeted toward technology-based enterprises in the early stages of development that are not yet able to attract private sources of traditional financing or venture or investor-backed capital.

Act 564 creates the Science, Technology, Engineering and Math Fund. It will be used to retain, recruit and attract competent public school science, technology, engineering and math teachers by providing them industry competitive income.
The Department of Economic Development, in coordination with the state Department of Education, must develop rules governing the eligibility of teachers to receive supplemental grants from this fund.

Act 563 authorizes the state Science and Technology Authority to support an alliance of research universities and the private sector to create jobs and increase research. It creates the Arkansas Research Infrastructure Fund from funds appropriated by the Legislature and any gifts, contributions, grants or bequests received from federal, private or other sources. We also organized the expansion of the Career Pathways, so that the people of our State can receive the career training they need to get better-paying jobs.

We also approved a project of Speaker of the House Benny Petrus, and that is to establish the Arkansas Alternative Fuels Development Act. It opens the bio-fuel market to more farmers and producers in an effort to reduce dependency on foreign oil. The law provides $16 million in grant to companies that make bio-fuels from soybeans or wood products and to farmers who grow the soybeans. Bio-diesel distributors would be eligible for incentives to stock the new product and for necessary equipment. Another $2 million would be available to fund further bio-fuel research at the University of Arkansas, and $2 million would go to help poor Arkansans insulate and weatherize their homes.

Miscellaneous legislation

Bingo
In November, voters approved a constitutional amendment allowing religious groups and other nonprofits to run bingo games and raffles. The amendment left it to the General Assembly to pass legislation implementing it. Act 388 sets the rules, establishes a licensing mechanism for the operators, and give the state Department of Finance and Administration the authority to regulate the games. Under that law, nonprofit groups, including charities and religious groups, need to have been in existence in the state at least five years in order to be licensed to conduct the games. Proceeds above the cost of conducting the games are to be used only for charitable, religious or philanthropic purposes.

The organizations holding the games can’t hire agents to run them or pay employees from the proceeds. Bingo sessions must end within five hours, and organizations may not hold more than two sessions a week.

The maximum prize per bingo game is $1,000, and the total in prizes per session may not exceed $7,500. The law places a $50,000 annual limit on the value of the prizes if they’re purchased and a $100,000 annual limit on the value of the prizes if they’re donated.

Wine
The Legislature entered the session in the midst of state and federal court challenges to Arkansas’s wine laws, which allow in-state wineries to ship directly to consumers and sell their products in grocery stores but deny the privilege to out-of-state wineries. That statute was widely believed to be unconstitutional under a 2005 U.S. Supreme Court decision, and legislators introduced a variety of approaches, each backed by some of the disparate interests in the alcohol industry -- wholesalers, package stores, Arkansas wineries and anti-alcohol forces.
Act 668 allows the products of small wineries, both within the state and outside of it, to be sold in Arkansas grocery and convenience stores without going through wholesalers. It doesn’t allow direct shipment to consumers. “Small” wineries are those that produce 250,000 gallons or less a year.

Elections
We changed how new political parties can qualify for the state ballot. The new law requires parties to collect 10,000 signatures of registered voters within 60 days. Lawmakers made the change after a federal judge ruled that the previous process was too onerous on new parties and restricted candidates’ access to the ballot. The new 10,000-signature threshold now matches what the state had been requiring of independent candidates.

We also established instant runoff voting for all overseas voters – not just those in the military, as current law now provides. It’s been impossible for overseas voters to cast a runoff vote because there’s such a short time, usually three weeks, between the regular election and runoff. Under instant runoffs, a voter returns his or her regular ballot as well as a possible runoff ballot in which the voter’s preferences are numbered. Five candidates in one race, for example, would be marked 1-through-5, to show the voter’s preference in case of a runoff.

Law and order
• Act 630 create the offense of theft of scrap metal. It’s aimed at fighting the growing spate of copper thefts from homes, businesses and utility lines. It increases the classification and penalty range by one level for anyone convicted of stealing copper if the theft causes more than $250 in damages. Also, the enhanced penalties would kick in if the person stealing the copper crossed state lines to sell or dispose of it.

Act 508 creates a data base to track pharmacy purchases of cold and flu medicines containing pseudoephedrine, a key ingredient in manufacturing of methamphetamine. The data base allows law enforcement officers to identify people who go to multiple locations to purchase the cold and flu medicines to make methamphetamine.

Act 632 increases the level at which writing a hot check becomes a felony. The threshold now is $200. Under HB 2340, writing a $500 hot check would become the new felony mark.

Act 841 establishes a training program for constables, require constables to wear uniforms and identification common to all constables, and allow the Arkansas Crime Information Center to give information to constables when requested.

Act 183 requires prisoners serving life without parole to wait six years between requests for executive clemency. The current wait is four years. The six-year wait can be waived in certain circumstances, such as an inmate’s poor health or if new evidence arises.

Act 258 allows a Class A misdemeanor charge to be filed against the owner of a dog that attacks a person. Law enforcement agencies say current law offers no such recourse. Conviction of a Class A misdemeanor is punishable by up to a year in jail, a fine of up to $1,000, or both. A judge or jury also can set restitution for medical bills incurred.

Act 139 allows orders of protection in domestic-abuse cases to last as long as 10 years. The current limit is two years.

Act 338 sets a fine of up to $400 for the offense of failing to yield to an emergency vehicle. Such failure to yield is already a traffic offense, but current law carries no penalty.

Act 579 requires that the covers of adult magazines on sale at retail establishments be covered by blinder racks. Legislation two years ago required that such material be kept in an area separate from the rest of the store, such as behind the counter, was ruled unconstitutional. The new law replaces the blinder racks that had been required before the 2005 change.

Health
Act 128 prohibits the sale of prescription drugs through the Internet unless the patient has actually consulted a physician in person.

Military
Act 160 increases the income-tax exemption for officers of the armed forces from $6,000 to $10,000. The exemption for enlisted personnel is already at $10,000, having been set at that amount two years ago by the 85th General Assembly.

Government reorganization
Act 384 allows the governor to rescind the merger of the state Department of Health with the state Department of Human Services that the Legislature enacted in 2005 at the urging of then-Gov. Huckabee. Supporters of the bill said the merger led to a savings of about $3.6 million but made problems with the agencies worse.
Act 751 eliminates the state Office of Information Technology and the chief information officer post, effective July 1. The change will save about $1 million a year, state officials said.

Legislation, Dead on Arrival or at some point
ERA. For the second session in a row, an attempt failed to have the state ratify the Equal Rights Amendment, albeit belatedly. House Joint Resolution 1002, by Rep. Lindsley Smith, D-Fayetteville, would have had the Legislature endorse the amendment in hopes that two other states that never ratified it -- Arkansas was one of 15 -- would do so. Then, the legal battle would have begun over whether it was too late to add to the U.S. Constitution that equal rights “shall not be denied or abridged by the United States or by any state on account of sex.”

This time, the amendment had support of all the state’s constitutional officers, including Beebe, and a majority of House members signed on as sponsors. Former Gov. and U.S. Sen. David Pryor urged the House Committee on State Agencies and Governmental Affairs to recommend passage of the resolution, but Phyllis Schlafly, famed for her opposition to the amendment in the 1970s, flew to Arkansas to testify against it. The resolution failed by one vote of winning a committee endorsement.

Foster parents. Last year, the state Supreme Court declared unconstitutional an executive branch policy banning homosexuals from becoming foster parents. The court said the executive branch board overstepped its bounds with the policy, a ruling that many lawmakers saw as an invitation to place such a ban into statute. Senate Bill 959, by Sen. Shawn Womack of Mountain Home, would have taken the prohibition further and also outlawed homosexuals from adopting even their relatives. Opponents argued that it was too harsh, and Beebe referred to “constitutional problems” with the bill. The bill passed quickly in the Senate, but stalled – and died -- in the House Judiciary Committee. An existing state policy bans “co-habiting” couples, unmarried people who live together in a sexual relationship, from serving as foster parents. Senate Bill 959 would have extended the adoption ban to them as well.

Animal cruelty. Arkansas remains one of only a handful of states with no felony charges for any act of animal cruelty, however egregious, after competing bills stalled yet again this session. Both bills would have applied only to dogs, cats and horses. House Bill 2788 was backed by farmers and rancher groups. It called for a felony charge if a person committed the act a second time within five years of the first offense. The bill passed in the House but couldn’t win the support of the Senate Judiciary Committee. Senate Bill 777, which was supported by Humane Society organizations and animal rescue groups, called for a felony on a first offense. It passed in the Senate but stalled in the House Committee on Agriculture, Forestry and Economic Development.

Seat belts. Arkansas drivers still can’t be pulled over for not wearing their seat belts. Senate Bill 227 would have made the requirement a “primary offense.” It passed in the Senate but got stuck in the House.

Motorcycle helmets. Motorcycle enthusiasts again stopped legislation requiring cyclists 21 and over to wear helmets. Current law still requires bikers under 21 to wear helmets. The mandatory helmet law was repealed 10 years ago.

Cell phones while driving. Legislation aimed initially at requiring hands-free cellular devices while driving failed quickly. Efforts then were made to require the devices by teen drivers. It also failed, as did other legislation to restrict teens’ nighttime driving and the number of passengers in their cars.

Trauma network. Arkansas is the only state that lacks a Level 1 trauma network. While all lawmakers supported the idea, the effort failed when no agreement could be reached on how to fund such a network.

Budget
The Revenue Stabilization Act forbids deficit spending and sets the state’s spending priorities through a succession of categories (Category A being the highest priority and including public schools, prisons and health and human services). Lower categories are funded as revenues become available. The bill sets a budget of $4.35 billion for fiscal 2008, which starts July 1, and $4.52 billion for fiscal 2009. (The budget for the current year is $4.06 billion.)

State colleges and universities received a total increase of 10 percent, from the current fiscal year’s $644 million to $709 million in fiscal 2008. The Health and Human Services budget would go from $1.03 billion in 2007 to $1.12 billion in 2009. The big increase is about $8 million for the Children and Family Services Division to hire another 100 caseworkers to help ease caseloads in abuse and neglect cases.
The Department of Correction goes from $251.9 million in 2007 to $289.7 million in 2009. The extra money is needed to open space for more beds at the women’s prison in Newport and the special-needs prison in Malvern. There are also increases in medical costs.

The Department of Community Correction moves from $53 million in 2007 to $69.9 million in 2009. This is mostly to hire 60 more probation officers.
The Arkansas State Police would go from $49.7 million in 2007 to $66 million in 2009. About $9 million of that increase is for the Arkansas Wireless Information Network, which helps law enforcement agencies communicate, for operations and radio tower upkeep.

The Public School Fund would rise from $1.72 billion in 2007 to $1.9 billion in 2009. The biggest chunk of the increase is for $40 million in additional preschool programs.

Budget surplus: $919 million.
Expenditures include:
• $456 million, school repairs.
• $187 million, governor’s general improvement projects.
• $40 million, House and Senate general improvement projects, including regional and county fairs, domestic-abuse shelters, fire departments.
• $100 million, state and local roads, highways.
• $50 million, cancer research UAMS.
• $44 million to settle a federal dispute during Huckabee administration.