A bill reducing the state’s sales tax on energy paid by manufacturers sailed through the Arkansas House’s tax committee Tuesday, the 79th day of the 2013 legislative session.
The House approved a bill that would require owners of primates to register their animals with the county sheriff’s office and another to increase penalties for scrap-metal theft and ban people convicted of such theft from selling scrap metal.
TAX CUTS
Rep. Lane Jean, R-Magnolia, told the House Revenue and Taxation Committee that House Bill 1218 is aimed at keeping jobs in Arkansas by making the state’s tax on energy used by manufacturers more competitive with surrounding states.
Randy Zook, president of the Arkansas State Chamber of Commerce, said that almost all lawmakers came to the Legislature with “the No. 1 task of doing whatever is possible to create jobs in the state.
“This is one of the building blocks of opportunity and of job expansion in the state,” he said.
HB1218 would cut the sales tax on energy paid by manufacturers from 2.75 percent to 1.625 percent, effective July 1, and to 0.625 percent, effective July 1, 2014.
The remaining 0.625 percent rate would comprise the half-percentage point sales-tax increase for roads enacted by voters in November through a constitutional amendment and the 0.125 percent sales tax for conservation enacted by voters through an amendment in 1996.
It also would cut the sales tax on energy paid by electricity generators to 1.625 percent, effective July 1, 2015. Under existing law, the rate is 4.25 percent and will increase to 4.75 percent on July 1, after the half-percentage point increase for roads goes into effect.
It is scheduled to drop to 3.25 percent on Jan. 1.
The bill would reduce state revenue by $13.1 million in fiscal 2014, $25.4 million in fiscal 2015, $27.2 million in 2016, and $27.2 million in 2017, according to the state Department of Finance and Administration.
Department Deputy Director Tim Leathers asked the committee to consider the bill’s revenue impact. Gov. Mike Beebe’s proposed $4.9 billion budget for fiscal 2014 - up from the current budget of $4.7 billion in 2013 - doesn’t include the bill’s reductions.
Beebe’s proposed budget doesn’t include any tax cuts in fiscal 2014. Beebe’s plan to cut the state sales tax on groceries of 1.5 percent is dependent on bond obligations that won’t end for years or the resolution of a decades-old lawsuit that requires the state to pay millions for desegregation efforts.
But the committee tabled House Bill 1769 by Mark Perry, D-Jacksonville, to provide an income-tax credit for installing solar-energy systems or solar water-heating systems.
The bill would reduce state revenue by $530,000 in fiscal 2015 and $609,500 in fiscal 2016, according to the finance department.
For several weeks, House and Senate leaders said they’ve been trying to reach agreement on a tax-cut package of about $100 million in fiscal 2014. But House tax committee Chairman Charlie Collins, R-Fayetteville, and Senate tax committee chairman Jake Files, R-Fort Smith, said they’ve still not reached a deal on a tax-cut package.
Collins said it’s impossible to predict what will end up in the package, although “I think we are pretty close” to reaching a tax-cut deal. Files said lawmakers are trying to figure out how to pay for the cuts.
Senate President Pro Tempore Michael Lamoureux, R-Russellville, has called Collins’ House Bill 1055, cutting state income taxes, “the anchor” of the tax-cut package. It would reduce state general revenue by $28.6 million in fiscal 2014 and $57.2 million in 2015, according to the finance department.
FOOD-SERVIC PERMIT FEE
The House tax committee endorsed House Bill 1744 by Rep. Debra Hobbs, R-Rogers, to increase the food-service permit fee issued by the state Department of Health from $35 to $50.
Robert Brech, chief financial officer for the Health Department said there are about 14,000 food-service permit holders and the fee hasn’t increased since 1999. The $35 fee covers about 10 percent of the food-service program’s cost and the $50 fee would cover about 14 percent of the cost, he said.
The department also has agreed to streamline the licensing process for the permits, he told lawmakers.
REGISTERING PRIMATES
The House voted 56-15 in favor of a bill that would require owners of primates to register their animals with the county sheriff’s office.
Rep. Warwick Sabin, D-Little Rock, said that it wasn’t possible to say how many primates are currently held in the state, but House Bill 1391 would provide safeguards in the case of escapes.
The bill also includes requirements for caring for primates and aligns the state’s standards with those of the U.S. Department of Agriculture.
SCRAP METAL
The House approved a bill 85-4 that would increase penalties for scrap-metal theft and ban people convicted of scrap-metal theft from selling it.
House Bill 1975, sponsored by Rep. Darrin Williams, D-Little Rock, also would require scrap-metal dealers to obtain a license from local law enforcement. Dealers would pay a onetime $250 fee and a $25 annual license-renewal fee.
Rep. Allen Kerr, R-Little Rock, who also is an insurance agent, said scrap-metal thieves have targeted residential and commercial buildings in central Arkansas sometimes causing hundreds of thousands of dollars in damage .
Kerr said the bill would help fix “a runaway problem.” MURDER INHERITANCE
The House voted 88-0 to approve a bill that would prevent a murder victim’s estate from going to the family of the killer.
Supporters say Senate Bill 781, sponsored by Cecile Bledsoe, R-Rogers, would prevent the children of the murderer from benefiting from the crime, unless the children were related to the victim.
Front Section, Pages 7 on 04/03/2013