LITTLE ROCK — State incentives for a proposed $1.1 billion steel mill in eastern Arkansas won final legislative approval in the House on Tuesday.
In rapid succession, the House also approved measures that would cut income taxes, sales taxes on the energy manufacturers use, capital gains taxes and the state sales tax on food.
The Senate approved legislation that would allow home-schooled students to participate in interscholastic activities at public schools.
The House tax cut proposals, along with several Senate proposals, are to be considered by the Senate Revenue and Taxation Committee Wednesday, Senate leaders also said the Revenue Stabilization Act, the legislation that set’s the state’s spending priorities for next fiscal year, could be released late Wednesday or on Thursday. That bill must sit on the desk for three days before it can be approved.
House Speaker Davy Carter, R-Cabot, and Sen. Pro Tem Michael Lamoureux, R-Russellville, both said it appeared likely that approving the RSA and completing other business would prevent the Legislature from recessing on Friday as scheduled.
By a vote of 81-9 Tuesday, The House approved Senate Bill 430, an appropriation bill for the state Economic Development Commission, which includes a revenue stream for a $125 million bond package of incentives and loans for the superproject that required approval under Amendment 82.
Big River Steel says the steel mill planned for Mississippi County will bring more than 500 jobs that pay more than $70,000 annually. Enabling legislation for the project passed the House and Senate earlier.
The appropriation bill also contains funding for $50 million for the Governor’s Quick Action Closing Fund; $3 million for work force training; $2 million for rebates for the motion picture industry; $37.5 million for incentives and rebates for new and existing industry expansions as part of signed financial agreements; $500,000 for the state’s strategic plan; and $5 million for the Innovate Arkansas Fund for start-up tech businesses.
SB 430 passed in the House with no discussion. It passed in the Senate 34-1 in February and now goes to the governor.
Tax cut proposals
The House also passed House Bill 1585 by 74-10. The bill would raise the minimum income level for the top state income tax bracket from $34,000 to $44,000 a year and reduce the tax rate for that group from 7 percent to 6 7/8 percent. The bill is estimated to cost the state $57 million a year.
“It’s going to send a signal to the country that Arkansas is open for business,” said the bill’s sponsor, Rep. Charlie Collins, R-Fayetteville.
Speaking against the bill, Rep. Skip Carnine, R-Rogers, said, “As a legislator, I do not want to harm the budget to the point that the next governor and the next Legislature are in fact creating a situation that revenue will be at a very, very negative position.”
HB 1218 by Rep. Lane Jean, R-Magnolia, passed 96-0. The bill would reduce the sales tax manufacturers pay for electricity and natural gas from the current 4.375 percent to 1 percent and would cost the state $25 million a year.
HB 1966 passed 87-3. It would increase the tax exemption for net capital gains on existing Arkansas investments of more than $5 million from 30 percent to 70 percent. It would create a 70 percent exemption for capital gains on all Arkansas investments made Jan. 1, 2014, or later. It also would increase the standard income tax deduction from $2,000 to $4,000.
The state fiscal office estimates the cost to the state at $3.1 million in fiscal 2014, $10 million in the second year, $18.3 million in the third year and $27.9 million in the fourth year.
Collins presented the bill for its sponsor, House Speaker Davy Carter, R-Cabot. Collins said the capital gains tax cut would attract more investment in Arkansas and the deduction increase would “make lives better and easier for our lowest-income workers.”
Carnine said he opposed the bill for the same reason he opposed the income tax cut.
HB 1234 by Rep. Darrin Williams, D-Little Rock, passed 90-2. The measure is Gov. Mike Beebe’s proposal to reduce the state sales tax on groceries to one-eighth of a cent. The fiscal impact would be $70 million a year, though it would be partially offset by a decrease in expenditures that would have to occur before the tax cut could take effect.
Under the bill, the tax cut would take effect when certain budget obligations, including desegregation payments to three Pulaski County school districts and payments on certain bonds, decline by at least $35 million for six consecutive months.
All of the tax cut measures go to the Senate.
Sen. Jake Files, chairman of the Senate Revenue and Taxation Committee, said the House tax bills, and several Senate bills, will be on the committee’s agenda Wednesday.
Files said Tuesday afternoon that final decision had yet to be made among legislative leadership on the exact amount of the tax cuts but said it would be between $90 million and $100 million. He also said the tentative plan was for the majority of the tax cuts to take effect in 2014-2015, which is what the governor wants to take advantage of savings from the expansion of health insurance coverage proposed under the federal Affordable Care Act.
“We’re looking at a limited number of tax cuts in (2013-2014) with the majority of them taking effect in (2014-2015),” Files told reporters. “There is some negotiating going on just to make sure that some members think we’re getting something done in the next fiscal year. There is money there to do it, but nobody has identified the specific points at which that money is going to cut out.”
The House voted 88-0 to approve Senate Joint Resolution 7 by Sen. Jonathan Dismang, R-Beebe. The measure would ask voters to approve a constitutional amendment giving legislators authority to approve or disapprove rules changes proposed by state agencies. The bill has already been approved by the Senate and now goes to the November 2014 general election ballot.
In a 52-8 vote, the House narrowly passed HB 1044 by Rep. Nate Bell. Under the bill, the reimbursements that legislators receive for trips related to state business would be reduced from 51 cents to 42 cents per mile, the same rate that state employees receive. The bill goes to the Senate.
Guns in church
HB 1284 by Rep. Reginald Murdock, D-Marianna, also barely passed with a 52-21 House vote. Under the bill, a church that allows people to carry concealed handguns into the building would have immunity from lawsuits over the actions of armed churchgoers. A provision that would have required signage was dropped from the bill. It goes to the Senate.
Health insurance exchange
In a 78-0 vote, the House passed HB 1508 by Rep. Mark Biviano, R-Searcy, which would create a nonprofit entity with authority over the state health insurance exchange.
The entity would be governed by a board that would consist of the state insurance commissioner, the director of the state Department of Human Services, three people appointed by the governor, three people appointed by the House speaker and three people appointed by the Senate president pro tem. The bill goes to the Senate.
Medicaid ID cards
The House voted 89-0 to approve HB 1256 by Rep. Bruce Westerman, R-Hot Springs, which would create a seven-county pilot program in which Medicaid recipients would be issued identification cards that would be used for verification in all Medicaid transactions. The bill goes to the Senate.
In the Senate, HB 1789 by Rep. Mark Lowery, R-Maumelle, passed 34-1. It would allow home-schooled students to participate in high school interscholastic activities. The bill goes back to the House for concurrence on a Senate amendment.