March 20, 2025

Daily Legislative Update: Thursday, March 20, 2025

Photo by Will Newton/Arkansas House of Representatives

Thursday, March 20, 2025 – Day 66

LEGISLATIVE SCHEDULE

The Joint Budget Committee met at 9:00 a.m.; the Senate Education Committee met at 9:30; and standing committees will meet at 10:00 a.m. The House will convene at 1:00 p.m., and the Senate will convene at 1:30 p.m. To view committee schedules, agendas, and live streams—including live coverage of the House and Senate—visit www.arkleg.state.ar.us.

The General Assembly plans to recess for spring break from March 24-28, and aims to adjourn by April 16.

CALLS TO ACTION

ASK STATE SENATORS TO OPPOSE SB 284, 285, 286, 287 and SB 288.

These bills affect all employers, not just businesses. Colleges, K-12 schools, state, county, city governments and non-profits will all be faced with increased costs.

SB 284 and 288 await consideration on the Senate floor. SB 285 was amended in committee yesterday to lower the benefit cap from $120,000 to $100,000. The bill received a “Do Pass as amended” recommendation yesterday. SB 286 was not considered and may not be. SB 287 was also considered in the Senate Public Health Welfare and Labor Committee yesterday and was defeated.

SB 284 and 288 would increase physician and specialist changes from one time to annual. SB 285 would increase the maximum weekly benefit from $903 to $2300. SB 286 would add objective findings to scheduled injuries and broaden coverage. SB 287 would increase attorney’s fees.

Why Do These Bills Matter?

Workers’ Compensation is one of Arkansas’ most competitive business cost elements. It is a key measure of our overall economic standing compared to other states.
The cost of doing business is one of the top five factors influencing investment location decisions.
These bills will undermine recent years’ improvements in operating costs through tax reductions.
In short, these bills will undermine all of the State’s efforts to attract business and industry and create and maintain jobs.
Any one of these bills alone will increase the cost of doing business; passing more than one of these bills will make that exponentially worse
Employers are already on edge because of concerns with the economy. Common sense dictates that we do not impose additional costs on them during this uncertainty.

In committee last week, Dale Douthit, chairman of the Arkansas Workers’ Compensation Commission testified that, “rates are going to be affected. All these bills are labor leaning, and they are going to have an effect on workers’ compensation rates in Arkansas. These bills will increase costs for employers. These bills will most likely increase litigation in workers’ comp. They will most likely cause the Workers’ Compensation Commission to hire more staff. It will have an impact and without knowing that impact, I would be hesitant to go down that road.”

Please contact state senators. To leave a message dial 501-682-2902.
Just ask them to Vote NO on SB 284, 285, 286 and 288.

For more details, see the “Call to Action Bills” section below.

AT THE CAPITOL: A SYNOPSIS OF WHAT YOU NEED TO KNOW

Today at the Capitol

We oppose HB 1656, which seeks to modify existing royalty contracts. It is on today’s agenda in the Senate Agriculture and Economic Development Committee.

Our tax package includes these four bills because the Tax Foundation has identified these measures as critical to improving Arkansas’ tax competitiveness ranking:

HB 1500 – Repeals the throwback rule
HB 1501 – Aligns Arkansas’ income tax law with federal standards for expensing depreciable business assets
HB 1538 – Extends the net operating loss carryforward period
HB 1750 – Repeals the franchise tax

The House Revenue and Taxation Committee has been reviewing, but not yet voting on, bills with state revenue implications. This approach allows the General Assembly to finalize budgetary plans before implementing any tax reductions. HB 1500, 1501 and 1538 have been reviewed by the House Revenue and Taxation Committee. HB 1750 is on today’s committee agenda.

Other tax-related bills we support that are pending in the House Revenue and Taxation Committee, including:

HB 1435 – Provides income tax credits for childcare
HB 1469 – Establishes the Broadband Expansion and Efficiency Act
HB 1807 – Amends the sales tax exemption for aircraft held for resale and used for rental or charter and clarifies eligibility for the exemption.

For more details, see the “Tax Bills We Support” section below.

SB 390, which creates an apprenticeship program, received a “Do Pass” recommendation from the Senate Education Committee yesterday and is on today’s Senate calendar.

Bills we support that are pending on committee agendas:

SB 361 – Creates the Industrial Development Authorities Expansion Act. It is pending in the House Agriculture, Forestry and Economic Development Committee.
HB 1706 – Prohibits the use of ranked-choice voting in Arkansas elections. It is pending in the House State Agencies Committee.
HB 1797 – Seeks to amend the law concerning the Arkansas Development Finance Authority. It is pending in the House State Agencies Committee.

Bills we oppose that are on committee agendas or the floor agenda today:

SB 456 – Impacts local zoning authorities. It was passed over on the Senate calendar yesterday and is on today’s Senate calendar.

For more details, see the “Bills We Support” and “Bills We Oppose” sections below.

Yesterday at the Capitol

We support SB 322, which passed 34-0 in the Senate yesterday. This bill would allow third parties to review plans and perform site inspections. It has been assigned to the House City, County and Local Committee.

SB 279 clarifies how wage and hour disputes are investigated. This bill passed 97-0 in the House yesterday. We support this bill.

HB 1643 amends and expands the reference checking bill known as the Quality In Hiring Act 1474 of 1999. This bill passed the Senate 34-0 yesterday and has been sent to the Governor. We join ARHSRM in supporting this bill.

SB 403, which seeks to create a complete count committee for the 2030 census, received a “Do Pass” recommendation yesterday from the House State Agencies committee. We support this bill.

Pending Bills We Support
The State Chamber/AIA supports several key bills aimed at workforce development, employment regulations, and government operations.

HB 1571 – Amends the Arkansas Adult Diploma Program Act. This bill received a “Do Pass” on March 18 from the House Education Committee.
HB 1446 – Expands the Arkansas Workforce Challenge Scholarship Program, improving access to workforce training opportunities.

For more details, see the “Pending Bills We Support” section below.

Pending Bills We Oppose

The State Chamber/AIA opposes HB 1442, which seeks to place additional restrictions on pharmacy contracting, potentially increasing costs for businesses and consumers.

For more details, see the “Bills to We Oppose” section below.

Constitutional Amendments

The State Agencies Committees are currently reviewing Joint Resolutions that propose constitutional amendments for referral to the 2026 General Election Ballot. The State Chamber/AIA supports SJR 15 and HJR 1014, which are companion bills aimed at improving the state’s legal and regulatory framework.

For further information, see the “Constitutional Amendments” section below.

NEWLY TRACKED BILLS
We added 11 bills to our tracking list today.

HB 1800 – Rep. Mindy McAlindon and Sen. Matt McKee
Amends campaign finance disclosure laws, requiring agents of a foreign principal to disclose their activities. Updates portions of the Arkansas Code from Initiated Act 1 of 1990. Committee: House State Agencies

HB 1850 – Rep. Lee Johnson
Revises laws on ground ambulance services, clarifying minimum reimbursement rates. Committee: House Insurance and Commerce

HB 1852 – Rep. Jeremiah Moore and Sen. Matt Stone
Establishes a right to repair for certain agricultural equipment. Committee: House Agriculture, Forestry, Economic Development

HB 1857 – Rep. Lee Johnson and Sen. Justin Boyd
Changes sales and use tax collection for new and used motorboats, allowing direct payment when sold by a dealer. Committee: House Revenue and Taxation

HB 1863 – Rep. Lee Johnson and Sen. Missy Irvin
Amends the Transportation Benefit Manager Act and declares an emergency. Committee: House Insurance and Commerce

SB 516 – Sen. Ben Gilmore and Rep. David Ray
Allows appointees running for Arkansas Supreme Court or Court of Appeals to use their current title as a prefix on ballots. Committee: Senate State Agencies

SB 524 – Sen. Dave Wallace and Rep. Matt Duffield
Criminalizes illegal online casinos and sports betting. Creates the Interactive Gaming Act, covering name, image, or likeness drawing games and casino gaming. Declares an emergency. Committee: Senate Insurance and Commerce

SB 527 – Sen. Missy Irvin and Rep. Lee Johnson
Amends the Arkansas Health and Opportunity for Me Act of 2021, increasing the medical-loss ratio in the program. Committee: Senate Insurance and Commerce

SB 528 – Sen. Ben Gilmore and Rep. Howard Beaty
Defines the powers of the Office of Skills Development and the Career Education and Workforce Development Board regarding secondary technical centers. Committee: Senate Education

SB 529 – Sen. Blake Johnson and Rep. Frances Cavenaugh
Amends the Independent Tax Appeals Commission Act. Committee: Senate Revenue and Taxation

SB 530 – Sen. Breanne Davis and Rep. Rick Beck
Modifies the Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit. Committee: Senate Revenue and Taxation

CALL-TO-ACTION BILLS

SB 284-288 – Sen. John Payton

Specifically these bills will:

SB 284 and 288: Allow an annual change of physician instead of a one-time change. SB 284 addresses personal physicians, while SB 288 addresses specialty physicians. While employers must cover all job-related injuries, they can direct care. Annual changes could encourage “doctor shopping,” disrupt treatment plans, increase medical costs, prolong claims, delay recovery, and effectively provide lifetime medical benefits.
SB 285: Dramatically raise the maximum benefit amount by over 255%, setting an annual cap of $120,000—the highest in the nation. (Annualized, our current weekly benefit maximum is $46,956.) Arkansas’ current weekly maximum of $903 would jump to $2,307.69, one of the highest in the country. This increase would create a financial strain on employers and Arkansas would be misaligned with neighboring states.
The National Council on Compensation Insurance (NCCI), a nationally recognized group with expertise in these matters, has done an initial evaluation of SB 285. It will cost the workers’ compensation system $12 million to $16 million annually.
Our cap already exceeds that of Mississippi and Louisiana; this will widen the gap dramatically, making Arkansas less competitive for industry and business investment.
SB 286: Expand wage loss disability benefits in ways that would make the system less predictable.
Currently, those benefits are largely determined on objective measures that derive the percentage of impairment, as assigned by a physician, and applied to the rate schedule.
This bill would allow the Workers’ Compensation Commission to be able to increase those benefits, over and above the schedule, based on subjective criteria that includes age, education, work experience, and “other matters.”
According to the NCCI, this bill will result in an “indeterminate increase in cost to the system.”

SB 287: Increase attorney fee caps for medical benefit appeals, which are currently capped at $500 for appeals to the commission and $1,000 for appeals to the Court of Appeals. It also allows attorneys to claim 12.5% of all medical bills, even if they had no involvement. This could drive excessive litigation, raise costs, and reduce system efficiency.

TAX BILLS WE SUPPORT

HB 1500 – Rep. Howard Beaty and Sen. Ben Gilmore
Enhances economic competitiveness by repealing the throwback rule. This bill is part of the State Chamber/AIA tax package. We support this bill.

HB 1501 – Rep. Howard Beaty and Sen. Ben Gilmore
Adopts federal income tax law regarding depreciation and expensing of property; increases the allowable amount for expensing certain depreciable business assets to align with federal law. This bill is part of the State Chamber/AIA tax package. We support this bill.

HB 1538 – Rep. David Ray
Seeks to extend the state’s existing net operating loss carry forward law from 10 years to 20 years. This bill is part of the State Chamber/AIA tax package. We support this bill.

HB 1750 – Rep. Frances Cavenaugh
Repeals the Arkansas Corporate Franchise Tax Act of 1979 and makes conforming changes. This bill is part of the State Chamber/AIA tax package. We support this bill.

HB 1435 – Rep. Brandon Achor and Sen. Jane English
Seeks to amend the law regarding income tax credits for childcare by modifying the employer-provided childcare credit and establishing a new income tax credit for licensed childcare providers. We support this bill.

HB 1469 – Rep. Howard Beaty and Sen. Blake Johnson
Creates the Broadband Expansion and Efficiency Act and a sales and use tax exemption for machinery and equipment used in producing broadband communications services. We support this bill.

HB 1116 – Rep. David Ray and Sen. Jonathan Dismang
Seeks to establish the Remote and Mobile Work Modernization and Competitiveness Act. The bill proposes income tax and withholding exemptions for certain remote and mobile employees as well as nonresidents. We support this bill.

PENDING BILLS WE SUPPORT

HB 1446 – Rep. Robin Lundstrum and Sen. Jane English
Seeks to amend the Arkansas Workforce Challenge Scholarship Program by adding the ability for scholarship funds to go towards a public or private vocational – technical school or institute in Arkansas. The bill is focused on associate degrees or certificate programs that result in a portable license or certificate in high demand fields including manufacturing, health care trades, information technology, construction trades and logistics and distribution. We support this bill.

SB 390 – Sen. Jane English and Rep. Robin Lundstrum
Establishes the State Apprenticeship Agency Act. We support this bill.

SB 403 – Sen. Clarke Tucker and Rep. Howard Beaty
Creates the 2030 Arkansas Complete Count Committee to improve awareness and participation in the 2030 federal census. We support this bill.

HB 1807 – Rep. Les Eaves
Amends the sales tax exemption for aircraft held for resale and used for rental or charter; clarifies eligibility for the exemption. We support this bill.

SB 279 – Sen. Missy Irvin and Rep. Jeremy Wooldridge
Seeks to assist the division of labor with enforcing the fair and prompt payment of wages to Arkansas citizens; and to clarify the manner in which wage and hour complaints are investigated. We support this bill.

HB 1706 – Rep. Austin McCollum and Sen. Bart Hester
Prohibits ranked-choice voting in Arkansas elections. We support this bill.

HB 1731 – Rep. DeAnn Vaught
Strengthens child labor laws by reinstating employment certificate requirements. We support this bill.

HB 1571 – Rep. David Ray and Sen. Breanne Davis
Amends the Arkansas Adult Diploma Program Act. We support this bill.

SB 361 – Sen. Tyler Dees and Rep. Howard Beaty
Creates the Industrial Development Authorities Expansion Act to establish industrial development authorities for securing and fostering economic growth. This bill is supported by the Northwest Arkansas Council, and we echo their support.

SB 421 – Sen. Bart Hester and Rep. Howard Beaty
Authorizes the Arkansas Natural Resources Commission to issue general obligation bonds for water, waste disposal, and pollution abatement projects. This bill is supported by the Northwest Arkansas Council, and we echo their support.

PENDING BILLS WE OPPOSE

HB 1800 – Rep. Mindy McAlindon and Sen. Matt McKee
Amends campaign finance laws to require disclosure by agents of a foreign principal. This would require employees, lobbyists representatives, etc. to register as a foreign agent if they represent a foreign company and make frequent financial filings. A foreign company includes any corporation, organization, association, partnership, etc. organized under the law of or having its principal place of business in a foreign country. We oppose this bill.

HB 1656 – Rep. Rick Beck and Sen. Breanne Davis
Amends laws related to oil and gas production and conservation. One of the primary problems with the bill is it upends a decades-long legal standard and seeks to undo terms of existing contracts. This would violate the “Contracts Clause” of the Arkansas and U.S. Constitutions.

Another provision would require operators and working interest owners to provide a statement of accounting that is “itemized for each separate deduction” and “clearly identifies” each deduction’s purpose and amount. This would prevent the use of an industry standard of bundling expenses into categories to improve efficiency. This provision would lead to check stubs having dozens or hundreds of pages of detail. Such a detailed requirement would invite numerous lawsuits.

The bill seeks to undue a law that has been in place since 1985 regarding royalty payments in a way that would create liability for reimbursing any unauthorized deductions within 30 days, regardless of who made them.

Finally, these royalty issues have been adjudicated numerous times in federal court, and all were decided in favor of the industry. We oppose this bill.

SB 418 – Sen. John Payton
Amends the Workers’ Compensation Law to require workers’ compensation insurers to spend at least 85% of premiums on healthcare and wage claims. We oppose this bill.

HB 1150 – Rep. Jeremiah Moore and Sen. Kim Hammer
Prohibits healthcare payors and pharmacy benefits managers from obtaining specific pharmacy permits. We oppose this bill.

HB 1442 – Rep. Brandon Achor and Sen. Dave Wallace
Seeks to set restrictions on pharmacy contracting and conflicts of interest and to establish pharmaceutical patient freedom of choice. This bill presents the significant risk of the regulation of self-insured employer health plans and is likely preempted by ERISA, which prohibits states from dictating employers’ self-funded health plan structures, and therefore is likely to face a legal challenge if adopted. We oppose this bill.

SB 7 – Sen. Clint Penzo
Seeks to allow members of the General Assembly to request a sales and use tax report from the Department of Finance and Administration. We oppose this bill.

SB 5 and SB 6 – Sen. Brian King
SB 5 seeks to add the criminal offense of prescription drug harm or homicide. SB 6 would create the criminal offense of vaccine harm. We oppose these bills.

SB 258 – Sen. Clint Penzo and Rep. Stephen Meeks
SB 258, known as the Arkansas Digital Responsibility, Safety, and Trust Act, seeks to address technology privacy and artificial intelligence (AI).

While the State Chamber/AIA and much of the business community recognize the need for a comprehensive privacy bill, we believe changes were necessary to the privacy provisions in SB 258, and we are currently reviewing the latest amendment. However, a major concern remains—the AI section of the bill. The prevailing consensus among businesses is that it is premature to legislate AI at this stage, and we believe this section should be entirely removed from the bill.

SB 456 – Sen. Jim Petty and Rep. Rebecca Burkes
Creates the Home Opportunities Made Easier Act. Local chambers of commerce have expressed concerns about this bill. We oppose this bill.

CONSTITUTIONAL AMENDMENTS

The House and Senate State Agencies Committees are working their way through lengthy lists of joint resolutions proposing changes to the Arkansas Constitution. The legislators will not vote on the resolutions until later in the session.

SJR 15 and HJR 1014 – Sen. Jonathan Dismang and Rep. Howard Beaty
These constitutional amendments concern economic development in the state of Arkansas. They authorize the General Assembly to provide for the creation of economic development districts to promote economic development. We support this joint resolution