Many new Arkansas laws adopted by the 91st General Assembly went into effect Tuesday.
Several others either went into effect earlier this year or will be effective later. Those deemed important to businesses were compiled by the Fort Smith Regional Chamber of Commerce and are as follows:
HB 1405 (Act 734 by state Rep. Robin Lundstrum, R-Springdale, state Sen. Jim Hendren, R-Gravette, and 24 others) will reduce Arkansas employers’ unemployment insurance taxes by $50 million annually.
“It also reduces the unemployment insurance benefits from five months to four months to encourage those drawing unemployment benefits to look for work faster,” the chamber notes. Effecitve date: Most provisions, Jan. 1, 2018.
Minimum wage law
HB 1126 (Act 191 by state 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: Aug. 1
HB 1442 (Act 480 by state Rep. Andy Davis, R-Little Rock, 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: Aug. 1.
Workplace safety — medical marijuana
HB 1460 (Act 593 by state Reps. Carlton Wing, R-North Little Rock, and Doug House, R-Little Rock and state Sens. Missy Irvin, R-Mountain View and 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: Aug. 1.
Wine sales in grocery stores
SB 284 (Act 508 by state Sens. Bart Hester, R-Cave Springs, Gary Stubblefield, R-Branch and state 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.
Many sections of this act become effective Oct. 1. Other sections become effective on Jan. 1, 2018. There is a movement to block several sections of the act through a lawsuit.
Historic rehabilitation income tax credits
SB 253 (Act 393 by state Sen. Bill Sample, R-Hot Springs, state 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.
Amendment 97 implementation
HB 1732 (Act 533 by state Rep. Matthew Shepherd, R-El Dorado and state 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: Aug. 1.
Guns in employer parking lots
SB 37 (Act 1071 by state Sens. Alan Clark, R-Lonsdale, and 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: Aug. 1.
HB 2216 (Act 792 by state Reps. Austin McCollum, R-Bentonville, Grant Hodges, R-Rogers, Greg Leding, D-Fayetteville and 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 was Aug. 1.
HB 1609 (Act 475 by state Reps. Clarke Tucker, D-Little Rock, and Jana Della Rosa, R-Rogers) will clarify employers’ payroll frequency requirements. Effective date: Aug. 1.
School board elections
HB 1621 (Act 910 by state Rep. Mark Lowery, R-Maumelle and state Sen. Jane English, R-North Little Rock) will move school board elections to either the General Election or Primary Election date. Effective date: Jan. 1, 2018.
HB 1737 (Act 783 by state 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 Jan. 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: Aug. 1.
Tort reform — Deceptive trade
HB 1742 (Act 986 by state Rep. Laurie Rushing, R-Hot Springs, presented by state Rep. Michelle Gray, R-Melbourne and state Sens. Bart Hester, R-Cave Springs and 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’ consumer protection law exposes the state’s businesses to frivolous lawsuits from individuals who have suffered no real harm,” the chamber noted. Effective date: Aug. 1.
Property taxpayer fairness
HB 1772 (Act 659 by state Rep. Joe Jett, R-Success, state 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: Aug. 1.
Donning and doffing
HB 1846 (Act 914 by state Rep. Charlie Collins, R-Fayetteville and state 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,” the chamber notes. This went into effect April 5.
Aircraft sales taxes
HB 2278 (Act 595 by state 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.
SB 30 (Act 1041 by state Sen. Jimmy Hickey, R-Texarkana and state 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: Aug. 1.
SB 31 (Act 315, also by Hickey, R-Texarkana and state 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: Aug. 1.
Repair and replacement parts sales tax exemption
SB 362 (Act 465 by state Sen. Lance Eads, R-Springdale, state 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 percent 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, this was effective March 23, but provisions have their own effective dates. Exemption for repair and 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 state 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. The task force begins 60 days after Aug. 1, with a preliminary report due Feb. 1, 2018, and a final report due Sept. 1, 2018. The task force expires July 1, 2019.
Arkansas Workforce Challenge Scholarship program
SB 528 (Act 613 by state Sen. Jimmy Hickey, R-Texarkana and state 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 state Sen. Bruce Maloch, R-Magnolia and state 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 state Sens. Jim Hendren, R-Gravette, Missy Irvin, R-Mountain View, and state Reps. Justin Boyd, R-Fort Smith, Bob Johnson, D-Jacksonville and Tim Lemons, R-Cabot) will implement legislation to reflect the voters support of Issue 3 in the past general election (65 percent supported). It will remove the 5 percent 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 $100,000 and recapture provisions and reporting are included.
There is a 5 percent 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 percent 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: Aug. 1.
Repeal of Prevailing Wage Law
SB 601 (Act 1068 by state Sen. Bart Hester, R-Cave Springs and state 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.
Recycling tax credits
SB 688 (Act 1046 by state 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: Aug. 1.
Franchise liability protection
SB 695 (Act 966 by state 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 new federal joint-employer standard. Effective date: Aug. 1.
• Tort reform caps
SJR 8 (by state Sen. Missy Irvin, R-Mountain View, state 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.
• Low wage income tax cut
HB 1159 (Act 79 by state Reps. Mat Pitsch, R-Fort Smith, Charlie Collins, R-Fayetteville, Andy Davis, R-Little Rock and state Sens. Jim Hendren, R-Gravette and 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. The chamber noted this is the same as SB 115, now Act 78. The tax reduction will be effective Jan. 1, 2019.
• Military income tax cut
HB 1162 (Act 141 by state Rep. Charlene Fite, R-Van Buren, state 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 and soft drinks and lower the tax on soft drink syrup. Effective Jan. 1, 2018.
Higher education funding model
HB 1209 (Act 148 by state Rep. Mark Lowery, R-Maumelle, state 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. The law is effective Aug. 1, but the plan will require legislative approval, therefore it is likely to apply to the 2018-19 academic year.
National Ambient Air Quality Standards
HB 1505 (Act 455 by state 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: Aug. 1.
Trucking, owner operators
SB 635 (Act 1115 by state Sen. Jeremy Hutchinson, R-Little Rock and state 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,” the chamebr noted. “Also, associated federal laws should be reviewed. The two laws could produce conflicting results.” Effective date Jan. 1, 2018.
SB 760 (Act 1058 by state Sen. David Sanders, R-Little Rock and state 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: Aug. 1.