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New laws adopted by the 91st General Assembly earlier this year that did not have a specific effective date or an emergency clause went into effect Aug 1. Below is a quick review of the most important Acts to business. Further below are links to the 2017 Legislative Summary and then a link to a document that contains three articles from the Arkansas Democrat-Gazette that address a variety of the laws.
Effective Dates of State Chamber/AIA Legislative Agenda Priority Bills and
Additional Pro-Business Legislation Supported That Passed
MINIMUM WAGE LAWS
HB 1126 (Act 191 by Rep. Charlie Collins, R-Fayetteville) amends the definition of employer to clarify that a natural person acting as a supervisor is not an employer and creates a one-year limitation period for discrimination, retaliation and interference claims. The bill also amends the hate crime section to eliminate claims arising out of employment relationship.
Effective Date: August 1, 2017
UNEMPLOYMENT INSURANCE
HB 1405 (Act 734 by Rep. Robin Lundstrum, R-Springdale and Senators Jim Hendren, R-Gravette and 24 others) will reduce Arkansas employers’ unemployment insurance taxes by $50 million annually. It also reduces the UI benefits from five months to four months to encourage those drawing unemployment benefits to look for work faster.
Effective Date: Most provisions January 1, 2018
ECONOMICS EDUCATION
HB 1442 (Act 480 by Rep. Andy Davis, R-Little Rock and Sen. Linda Chesterfield, D-Little Rock and 33 others) will amend the personal finance curriculum standard to include job seeking skills, soft job skills and employment benefits and require high school students to earn a course credit under this curriculum for graduation.
Effective Date: August 1, 2017
WORKPLACE SAFETY - MEDICAL MARIJUANA
HB 1460 (Act 593 by Reps. Carlton Wing, R-North Little Rock & Doug House, R-Little Rock and Sens. Missy Irvin, R-Mountain View & Gary Standridge, R-Russellville) will provide workplace protections by creating new definitions, modifying existing definitions and setting guidelines for employers regarding employees’ use of medical marijuana.
Effective Date: August 1, 2017
PAYROLL
HB 1609 (Act 475 by Rep. Clarke Tucker, D-Little Rock and Rep. Jana Della Rosa, R-Rogers) will clarify employers’ payroll frequency requirements.
Effective Date: August 1, 2017
SCHOOL BOARD ELECTIONS
HB 1621 (Act 910 by Rep. Mark Lowery, R-Maumelle and Sen. Jane English, R-North Little Rock) will move school board elections to either the General Election or Primary Election date.
Effective Date: January 1, 2018
TRESSPASSER ESPIONAGE
HB 1665 (Act 606 by Rep. DeAnn Vaught, R-Horatio and Sen. Gary Stubblefield, R-Branch and 23 others) creates a cause of action against people who have gained access to a nonpublic area of another person’s property and engaged in an act that exceeds the trespasser’s authority within the nonpublic area.
Effective Date: August 1, 2017
ABOVE GROUND STORAGE TANKS
HB 1721 (Act 584 by Rep. Andy Davis, R-Little Rock and Sen. John Cooper, R-Jonesboro) authorizes reimbursement for corrective actions paid by the owner of an unregistered above ground petroleum storage tank if the owner voluntarily registers the tank.
Effective Date: August 1, 2017
AMENDMENT 97 IMPLEMENTATION
HB 1732 (Act 533 by Rep. Matthew Shepherd, R-El Dorado and Sen. Lance Eads, R-Springdale) amends the Local Government Bond Act of 1985, authorized by Amendment 62, to reflect language in Amendment 97 that authorizes local governments to fund economic development projects, land and infrastructure for industries.
Effective Date: August 1, 2017
DOUBLE DAMAGES
HB 1737 (Act 783 by Rep. Charlie Collins, R-Fayetteville) will prohibit duplication or increasing of damages awarded in discrimination and retaliation cases under the Arkansas Civil Rights Act of 1993, over damages allowed by any other state or federal law as the federal law existed on January 1, 2017. It will also establish that individual employees, agents of an employer or employees of an employer’s agent, are not liable for violations found to have been committed by employers.
Effective Date: August 1, 2017
TORT REFORM - DECEPTIVE TRADE
HB 1742 (Act 986 by Rep. Laurie Rushing, R-Hot Springs, presented by Rep. Michelle Gray, R-Melbourne and Sen. Bart Hester, R-Cave Springs and Sen. Gary Standridge, R-Russellville) amends the Arkansas Deceptive Trade Practices Act to ensure fairness for all litigants in consumer protection actions. As it currently exists, Arkansas’s consumer protection law exposes the state’s businesses to frivolous lawsuits from individuals who have suffered no real harm.
Effective Date: August 1, 2017
PROPERTY TAX PAYER FAIRNESS
HB 1772 (Act 659 by Rep. Joe Jett, R-Success and Sen. Jake Files, R-Fort Smith and 31 others) provides training, hearing guidelines and additional resources to County Equalization Boards, and a procedural warning to corporate taxpayers appealing Equalization Board decisions to the next level; lowers the taxpayer “burden of proof” in court appeals; clarifies and improves taxpayer refund rights for various types of reporting and assessment mistakes; and addresses various procedural handicaps for taxpayers appealing assessments by the Tax Division of the Public Service Commission.
Effective Date: August 1, 2017
DONNING AND DOFFING
HB 1846 (Act 914 by Rep. Charlie Collins, R-Fayetteville and Sen. Bart Hester, R-Cave Springs) will establish that an employer is not subject to liability for failure to pay an employee minimum wage or overtime compensation related to certain activities that are not principal to the employee's job. This bill does not cut into employee protections but instead puts employers and employees back where they were before a court case was decided. A dissent in that court case cautioned against opening the floodgates of litigation at the expense of businesses in Arkansas, and warned that the opinion “undermines the collective-bargaining process and destroys any confidence employers and employees have in the enforceability of their agreements” and that the Fair Labor Standards Act does not consider such activities “work” under state or federal law.
Effective Date: April 5, 2017
SOCIAL MEDIA
HB 2216 (Act 792 by Rep. Austin McCollum, R-Bentonville, Rep. Grant Hodges, R-Rogers, Rep. Greg Leding, D-Fayetteville and Rep. Clarke Tucker, D-Little Rock) makes restrictions on employers regarding their employees’ social media accounts apply only to requirements to add the employer to a social media contact list and not to requests, suggestion or otherwise. This bill was filed by the Arkansas Society of Human Resource Professionals.
Effective Date: August 1, 2017
AIRCRAFT SALES TAXES
HB 2278 (Act 595 by Rep. Joe Jett, R-Success) will apply the sales tax exemption for aircraft sold to purchasers that are residents of another state and will base the aircraft outside the state to aircraft sold to such purchasers by in-state residents who will remove the aircraft to be based out of state.
Effective Date: March 23, 2017
HISTORIC REHABILITATION INCOME TAX CREDIT
SB 253 (Act 393 by Sen. Bill Sample, R-Hot Springs and Rep. Joe Jett, R-Success and 11 others) will increase the per-project cap for income-producing properties from $125,000 in credits to $400,000 in credits under the existing Arkansas Historic Rehabilitation Income Tax Credit Act for projects that start on or after July 1, 2017. The bill does not increase the current annual aggregate cap of $4 million in credits.
Effective Date: July 1, 2017
LOTTERY SCHOLARSHIPS
SB 30 (Act 1041 by Sen. Jimmy Hickey, R-Texarkana and Rep. Michelle Gray, R-Melbourne) will repeal sections of law that prohibit using semester credit hours that were earned before high school graduation to calculate lottery scholarship award amounts. In its place, the law will require the applicant to elect not to count pre-graduation hours.
Effective Date: August 1, 2017
LOTTERY SCHOLARSHIPS
SB 31 (Act 315 by Sen. Jimmy Hickey, R-Texarkana and Rep. Kim Hammer, R-Benton) will expand the definition of “traditional student” for purposes of lottery scholarships to include students who spent the previous academic year as full-time freshmen at higher learning institutions.
Effective Date: August 1, 2017
WINE SALES IN GROCERY STORES
SB 284 (Act 508 by Sen. Bart Hester, R-Cave Springs, Sen. Gary Stubblefield, R-Branch and Rep. Jon Eubanks, R-Paris) will permit grocery stores to sell wine for off-premises consumption. This bill does not change existing laws regarding the ability to sell alcohol in any location in the state.
Sections 1, 2, 3, 6, 7, 8, 9, 10, 11, and 12 of this act become effective on October 1, 2017
Sections 4 and 5 of this act become effective on January 1, 2018
TEACHER READING INSTRUCTION SKILLS
SB 328 (Act 416 by Senators Alan Clark, R-Lonsdale, Jane English, North Little Rock, Bart Hester, R-Cave Springs and Representatives Charlotte Douglas, R-Alma, Mickey Gates, R-Hot Springs & Bruce Cozart, R-Hot Springs) will require the State Board of Education to test applicants for first-time teacher licensure for elementary education (K-6) and special education (K-12) in subject matter content and knowledge of beginning reading instruction.
Effective Date: August 1, 2017
REPAIR AND REPLACEMENT PARTS SALES TAX EXEMPTION
SB 362 (Act 465 by Sen. Lance Eads, R-Springdale and Rep. Andy Davis, R-Little Rock and 21 others) will create a sales tax exemption for manufacturers on their repair and replacement part purchases by phasing out the entire sales tax by 1% a year, along with the Constitutional taxes. Manufacturers must continue to seek a rebate until the tax is completely gone after June 30, 2022. To mitigate revenue impact to the state, it also phases out the InvestArk incentive.
As a whole, effective March 23, 2017, but most provisions have their own effective dates.
Exemption for repair & replacement parts is phased in beginning July 1, 2018 and will be fully implemented by June 30, 2022.
InvestArk phaseout is achieved by prohibiting acceptance of new applications after June 30, 2017.
WORKFORCE EDUCATION EXCELLENCE TASK FORCE
SB 441 (Act 951 by Sen. Jane English, R-North Little Rock) creates the Legislative Task Force on Workforce Education Excellence, which is tasked with reviewing and researching ways to improve technical education and workforce development programs.
Task Force begins 60 days after August 1, 2017 with a preliminary report due February 1, 2018, final report due September 1, 2018 and the Task Force expires July 1, 2019.
ARKANSAS WORKFORCE CHALLENGE SCHOLARSHIP PROGRAM
SB 528 (Act 613 by Sen. Jimmy Hickey, R-Texarkana and Rep. Charlotte Douglas, R-Alma) creates the Arkansas Workforce Challenge Scholarship Program, which awards scholarships from excess lottery funds to students seeking associate degrees or certificates in industry, healthcare or information technology.
Effective March 23, 2017
AMENDMENT 97 IMPLEMENTATION
SB 538 (Act 686 by Sen. Bruce Maloch, R-Magnolia and Rep. Mike Holcomb, R-Pine Bluff) also provides some technical implementation of Amendment 97 needed by local economic developers.
Effective March 27, 2017
SB 581 (Act 685 by Sen. Jim Hendren, R-Gravette, Sen. Missy Irvin, R-Mountain View, Rep. Justin Boyd, R-Fort Smith, Rep. Bob Johnson, D-Jacksonville & Rep. Tim Lemons, R-Cabot) will implement legislation to reflect the voters support of Issue 3 in the past general election (65% supported). It will remove the 5% cap on Amendment 82 bonds and provide a framework for municipalities/counties to appropriate money for economic development projects and economic development services while also maintaining safeguards for judicious use of municipal/county resources. A Cost Benefit Analysis is required for expenditures over $100K and recapture provisions and reporting are included. There is a 5% cap on expenditures of the municipality’s/county’s general revenue and reserves of the previous fiscal year but does allow for exceeding the 5% upon issuance of a financial forecast of the governing body by an independent CPA. Revenue that is specifically dedicated by law or public vote for economic development purposes is excluded from these limitations/restrictions. There are no prohibitions or restrictions on funding economic development projects through revenue bonds.
Effective Date: August 1, 2017
STUDENT ASSESSMENTS & BOARD OF EDUCATION POWERS
SB 596 (Act 936 by Sen. Jane English, R-North Little Rock and Rep. Bruce Cozart, R-Hot Springs) amends various provisions of law concerning qualifications for public school grants, funding, assessments and others. It also repeals various provisions related to student assessments and powers of the Board of Education.
Effective Date: August 1, 2017
REPEAL OF PREVAILING WAGE LAW
SB 601 (Act 1068 by Sen. Bart Hester, R-Cave Springs and Rep. Jim Dotson, R-Bentonville) will repeal the entirety of the Prevailing Wage Law that governs required payments by contractors. Eliminating this law in Arkansas will lower state and local government costs of doing business, create opportunities for more schools, roads, bridges, low-income housing, and hospitals, and create more jobs in construction.
Effective April 7, 2017
RECYCLING TAX CREDITS
SB 688 (Act 1046 by Sen. David Wallace, R-Leachville and Rep. Monte Hodges, D-Blytheville) will revise qualifications for and calculation of allowable tax credits for investment by qualifying companies in waste reduction, reuse and recycling.
Effective Date: August 1, 2017
FRANCHISOR LIABILITY PROTECTION
SB 695 (Act 966 by Sen. Linda Collins-Smith, R-Pocahontas) clarifies franchise law definitions related to employment relations, to help ensure that state enforcement agencies and courts do not adopt the expansive new federal joint-employer standard.
Effective Date: August 1, 2017
TORT REFORM - CAPS
SJR 8 (by Sen. Missy Irvin, R-Mountain View, Rep. Bob Ballinger, R-Hindsville and 66 others), will be on the 2018 General Election ballot. This will provide Arkansas electors the opportunity to vote on a Constitutional Amendment that will set caps on attorneys’ fees, punitive and non-economic damages.
Will be on the November 2018 General Election Ballot
LOW WAGE INCOME TAX CUT
HB 1159 (Act 79 by Rep. Mat Pitsch, R-Fort Smith, Rep. Charlie Collins, R-Fayetteville, Rep. Andy Davis, R-Little Rock and Sen. Jim Hendren, R-Gravette and Sen. Bart Hester, R-Cave Springs) will lower income tax rates on incomes under $21,000 and create a Legislative Task Force to study potential reform of tax laws to attract business. (Identical to SB 115 now Act 78)
Tax reduction effective January 1, 2019
MILITARY INCOME TAX CUT
HB 1162 (Act 141 by Rep. Charlene Fite, R-Van Buren and Sen. Jane English, R-North Little Rock and 43 others) will increase Medicaid Program allocations, exempt military retirement benefits from income tax, apply income tax to unemployment insurance benefits, apply sales tax to digital downloads. increase tax on candy & soft drinks and lower the tax on soft drink syrup.
Tax reduction effective January 1, 2018
HIGHER EDUCATION FUNDING MODEL
HB 1209 (Act 148 by Rep. Mark Lowery, R-Maumelle and Sen. Eddie Joe Williams, R-Cabot and 11 others) will require the Arkansas Higher Education Coordinating Board to adopt a productivity-based funding model for institutions of higher education and repeal the existing funding model.
Law effective August 1, 2017 but plan will require legislative approval, therefore likely to apply to the 2018-19 academic year.
NATIONAL AMBIENT AIR QUALITY STANDARDS
HB 1505 (Act 455 by Rep. Andy Davis, R-Little Rock) will allow standards under the National Ambient Air Quality Standards state implementation plan that are identical to applicable Arkansas Pollution Control and Ecology Commission regulations to be exempt from demonstrating their reasoning.
Effective Date: August 1, 2017
WORKERS COMPENSATION
HB 1813 (Act 658 by Rep. David Hillman, R-Almyra) clarified that workers’ compensation can pay for rabies treatments without presentation of symptoms. This was part of our bill, HB 1586. This bill was filed when it became clear our bill would not pass.
Effective Date: August 1, 2017
GUNS IN EMPLOYER PARKING LOTS
SB 37 (Act 1071 by Sen. Alan Clark, R-Lonsdale and Sen. Jimmy Hickey, R-Texarkana) will prevent private employers from restricting a licensed employee’s ability to have a legally owned handgun in their vehicle while it’s parked in their employer’s parking lot.
Effective Date: August 1, 2017
LOW WAGE INCOME TAX CUT
SB 115 (Act 78 by Sen. Jim Hendren, R-Gravette and Mat Pitsch, R-Fort Smith and 21 others) will lower income tax rates on incomes under $21,000 and create a Legislative Task Force to study potential reform of tax laws to attract business. (Identical to HB 1159 now Act 79)
Tax reduction effective January 1, 2019
OWNER OPERATORS
SB 635 (Act 1115 by Sen. Jeremy Hutchinson, R-Little Rock and Rep. Joe Jett, R-Success) will exempt certain owner-operators and contracted drivers from the Department of Workforce Services Law for purposes of unemployment insurance taxation or compensation. We urge a careful reading of this law before relying upon it. Also, associated federal laws should be reviewed. The two laws could produce conflicting results.
Effective date January 1, 2018
WORKERS’ COMPENSATION
SB 760 (Act 1058 by Sen. David Sanders, R-Little Rock and Rep. Charlie Collins, R-Fayetteville) revises workers’ compensation laws in regard to joint petition settlements. This bill was presented as an agreed bill between the Arkansas Self Insured Association, the Arkansas Workers’ Compensation Commission and the AFL-CIO.
Effective Date: August 1, 2017
The State Chamber/AIA’s 2017 Legislative Summary can be viewed by clinking the link below. Pages 21-24 is the Tax Summary that reports on tax related laws adopted by the 91st General Assembly.
http://www.arkansasstatechamber.com/wp-content/uploads/2017/06/LegislativeSummary2017.pdf
Link to July 30 Arkansas Democrat-Gazette stories about new laws going into effect.
https://arkansasstatechamber-my.sharepoint.com/personal/khall_arkansasstatechamber_com/_layouts/15/guestaccess.aspx?docid=1d7e6602400ea4de489b948d3da527052&authkey=Ac6IQc7AWBoQ0v7DmekD_ZI
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