Arkansas Legislative Council

November 18, 2022

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Sen Rice: Members, I’ll call the Arkansas Legislative Council to order. And first up, if you look in your package, you have the minutes. I’d take a motion for approval of the minutes. I have a motion. Do I have a second? All in favor?


Audience: Aye.


Sen Rice: Minutes are passed. Thank you. Next up, if my co-chair is coming right here, we are going to have the executive subcommittee report. Excuse me. I should remember that. We didn’t have executive subcommittee. So report is we didn’t have one this month. I always want to give Representative Wardlaw a chance to speak. Do you got anything else, Representative Wardlaw?


Rep Wardlaw: No, sir.


Sen Rice: All right. We are on Administrative Rules. Senator Hammer, you are recognized.


Sen Hammer: Thank you, Mr. Chair. The Administrative Rules Subcommittee met on Thursday, November 17. The subcommittee filed a report of the executive subcommittee concerning its approval of Emergency Rules. The subcommittee reviewed and filed the quarterly reports that were submitted by the Department of Corrections and Parole Board. Pursuant to Act 517 of 2019 and Act 595 of 2021, the subcommittee received agency updates on outstanding rulemaking. Subcommittee filed a November monthly written update pursuant to Act 595 and three rules by the Department of Finance Administration’s Arkansas Racing Commission concerning shockwave therapy, noninvasive treatment, and prohibited practices were held for consideration by the full ALC. All the other rules were reviewed and approved as noted in the report. I move adoption of the rule, but not including in the Arkansas Racing Commission rules concerning shock wave therapy, noninvasive treatment, and prohibited practices, which will be considered separately after the adoption of this report.


Sen Rice: Thank you. And, members, I skipped over our legislative economist, and we’ll come back to that after this report. Senator Stubblefield, you are recognized.


Racing rules

Sen Stubblefield: Thank you, Mr. Chairman. I just want to say a few words. I don’t think we need to call the two gentlemen from the Racing Commission up, but I do want to say a few words about these rules, these federal rule changes for the Arkansas Racing Commission. And I thought about this all night. This is simply the federal government coming in to Arkansas saying, “We know more about how you should race your horses than you do.” That’s basically what it boils down to. Shock wave therapy has been used for 70 years. I know. I raise horses. It’s a very simple, noninvasive procedure that we use for navicular tendonitis, arthritis and spine. You can’t even tell you do it, and pretty soon this is akin to taking someone to the hospital, having to go across the street. By the way, you could take the horse off the racetrack for two days and do it across the racetrack and then bring them back. Nobody would know if you had done it an hour after it was done if it was done on the racetrack. But this is like going across the hospital, sending you across the highway, having an MRI, and then sending you results two days later. This is simply another example of gross overreach by the Federal government and if we vote on this, I want to be recorded as a no. Mr. Chairman.


Sen Rice: Got you recognized on that. Representative Cavenaugh, question?


Rep Cavenaugh: Thank you, Mr. Chair. I also want to express my frustration with these rules. Now my frustration with the rules is not with the Arkansas Racing Commission or Oaklawn, either one. My frustration, again, is with the federal government. The federal government has implemented some procedures in horse racing, testing, and safety guidelines, which, for the record, everyone knows I’m involved in horse racing. That’s a large business for us. And so I live this every day. But what we have here is we have the federal government who now has control of testing and safety for thoroughbreds. It’s going to go on into quarter horse industry also. And it’s not just going to be about racing. It’s going to be about our rodeos. It’s going to be about all our performance. So this is not the end of this. This is the beginning. And it’s going to get large. And what we really have is people in DC that have no knowledge of equine athletes setting rules that don’t understand what benefits a horse or what doesn’t benefit a horse. Everyone that’s in this industry understands that we have to protect our equine athletes. And that’s what a lot of these treatments that are banned do. They actually help them recover. They actually help them get prepared for the next race.


Rep Cavenaugh: My frustration is that Oaklawn is stuck between a rock and a hard place. With these rules, if they don’t implement them, what can happen to them is they can be sanctioned by the federal government. Then they can have their export license taken away for their simulcast, which is a huge hit to their bottom line. But more importantly, the horsemen, the owners, the trainers, the jockeys, the exercise people, they can be sanctioned by this organization also and lose their livelihood if they don’t comply with these rules. So what we’re looking at here in the state of Arkansas, as Senator Stubblefield said, is a massive federal overreach. I will say it is being fought in many different levels. In the federal level, there’s three lawsuits I know of. One has been lost. Not sure it’s going to appeal. There is one that Arkansas is involved in and one Louisiana is involved in. And for the record, I just want to say Arkansas needs to get involved in the Louisiana lawsuit because that’s the best opportunity to overthrow this overreach of federal government so the states can have their sovereignty. And like Representative– I mean, Senator Stubblefield, I also want to go on the record to be a no, but it’s not because of the Racing Commission or Oaklawn. It’s simply because the federal overreach. But for the record, I don’t see any other option that they have at this time.


Sen Rice: Thank you. And, members, since I made the motion yesterday in Rules to hold this over just so the whole council could hear what the federal government has done. And it’s been stated but I’ll state again, this is not something the Arkansas Racing Commission has done. This is something that they’re going to have to live with unless it’s overturned in court. They’re simply trying to put it in effect in December before it goes in effect federally in January, therefore having an effect before racing season, getting everybody up to date on what the new federal rule is. And just wanted to make sure everybody understood that it’s not something that they’ve done that we necessarily can do. I do have a number of people on the board. I’m going to go back, Senator Stubblefield is on there first. Back to you, Senator Stubblefield.


Sen Stubblefield: I just want to add one more quick thing, Mr. Chairman. Thank you. Yesterday, it was brought up that we should pass this for the sake of consistency. When I looked at the 50 states, we have no consistency in our election laws, our immigration laws. We don’t have any consistency in the sale of illegal narcotics across the 50 states. So you can’t use consistency as an excuse to pass this law. This is a very simple procedure that’s done, and I’ve helped do it, to heal nevicular, sesamoid arthritis and horses and to speed up and enhance that healing process because a horse cannot get in a wheelchair or use a cane like a person can. They still have to put their weight on that leg. And the quicker you can get those animals healed up, the better it is for them and the owners. Not that they’re going to run them any quicker, but it helps them heal quicker. It’s better for the animal. And we don’t need Washington, DC, telling us. We have veterinarians that are smart enough to know this. We have for many years. We don’t need DC telling us along with HSUS and PETA, who I’m not sure are not pushing this whole agenda, how we should take care of our horses and put another burden on our horse racing industry. This is not the fault of the Racing Commission. In fact, they’re on our side. They agreed with us yesterday. This is simply Washington imposing its will on another state and putting more burdens on another industry that we as Arkansans enjoy. So that’s all I have to say, Mr. Chairman.


Sen Rice: Thank you. Representative Eaves, you’re recognized. Can somebody– Representative Eaves?


Rep Eaves: Yeah. Thank you. Sorry, I was in another discussion. I agree with everything Senator Stubblefield said and Representative Cavenaugh, but I think no matter what we do here today, these rules are going to be in place in January that they’re going to have to comply with whether we like it or not. And Oaklawn clearly doesn’t want these rules, and I’m sure DFA feels the same way, and they are trying to make it consistent. They’re going into effect in January. They’re trying to get it ahead of the curve because the racing season, if my understanding is correct, starts in December. And Oaklawn has, I believe, said, along with DFA yesterday during the Rules Committee meeting, again, they’re not a fan of these rules, but if the lawsuit prevails, they would automatically go back to the way their rules are today. And there is a rule in the Rules Subcommittee that is also a rule in this committee that says if a state agency presenting a proposed rule to the subcommittee indicates its intent on or agreement to revise a proposed rule in response to discussions by the subcommittee and the revision of the rule in such a manner would not violate any of the requirements of the Administrative Procedures Act, then the subcommittee, including ALC, may review and approve the proposed rule with the revisions agreed on by the state agency. So they’re saying they don’t want them. They do need them to be consistent for the racing season that’s starting in December. If the lawsuit prevails, they’ll go back to the old way. And I don’t think anybody in this room really wants these rules, but the people that don’t want them are asking us to do it. I think that’s important to understand. Thank you.


Sen Rice: Thank you, Representative Eaves. Senator Irvin, you’re recognized.


Sen Irvin: Yes, Mr. Chair. I think at the proper time I’d like to make a motion that we refer this to the Arkansas Attorney General. Representative Cavenaugh is shaking her head no. But I do feel like this is something that our state needs to consider–


Sen Rice: Senator Irvin, were you through? Senator Irvin, were you through?


Sen Irvin: What happened? Okay, sorry. No, I’m through. I think it’s just something that we need to have them look at. If there’s a lawsuit that’s ongoing, I think it would be important for the Attorney General’s office to look into that. So at the proper time, I can make that motion.


Sen Rice: Again, I’ve got a couple more people on board. Let me state again, those that sat through the committee and asked many questions yesterday, federally, this is going in effect January, regardless, unless court throws it out. Again, if we do not approve this, it will still go in effect. They will just not have time to– before the racing season starts, they’ll have to change and try to get everybody knowledgeable of the new rules after season starts. Representative Ladyman, you’re recognized.


Rep Ladyman: Thank you, Mr. Chair. I totally agree with what Representative Eaves said and all I want to do is try to add more clarity if I can. We need to pass this in order to help the Racing Commission have a full season uninterrupted. Because if you run half the season under one set of rules and the second half under another set of rules, it’s very confusing for people that are trying to comply with the laws. And I’ve complied with these environmental laws for a long time and they’re bad enough if they’re consistent, but if they’re inconsistent, it’s terrible for the people who are trying to comply with these laws. And I agree with Senator Stubblefield and Representative Cavenaugh. It’s a very bad thing. But we need to keep in mind we need to help the Racing Commission have a very good season for them and for the economy of the state. So for that reason, we need to pass this bill.


Sen Rice: Representative Cavenaugh, you’re recognized.


Rep Cavenaugh: Thank you, Mr. Chair. And I just want to remind everyone that we cannot pass this rule, and it is still going in effect. It doesn’t matter. The lawsuits are still ongoing. Arkansas can join them anytime. Actually, Arkansas is involved in one– is involved in one of the better ones right now. But more importantly, if we don’t– I don’t know the best way to put this. If we don’t give the Racing Commission and Oaklawn some cover and we don’t go ahead and approve these rules, which I’ve already told you I’m going to be against, but I see no way that we can not do this, is it puts a red flag up for the Feds, who then will start looking at Arkansas because we have said that we’re not going to comply. So what does that do? That puts us as a beacon on their radar and they’re going to come down on them. So I just want to bring that out. Thank you.


Sen Rice: Senator Irvin, if you hit your button–


Sen Irvin: I’ll make a motion that we approve these rules. But I also request the Attorney General’s office to be involved and give us an update on any lawsuits that they’re involved with, as well as if there is other further opportunity to try to create public comment for the process of the federal rule.


Sen Rice: Okay. We’ve got that motion. I’ve also got the other motion Senator Hammer did. Other than these– just a minute. I’m going to go ahead and take a vote on items 1 through 3 on the Thoroughbred Racing. Senator Irvin has made the motion to pass those rules and also ask the Attorney General to look into what she mentioned. All those in favor, aye.


Audience: Aye.


Sen Rice: Opposed?


Audience: No.


Audience: No.


Sen Rice: Rule passes with objection. I’m going to go back to Senator Hammer for the other items on Rules. Is there any other thing– I’ve already got your motion to pass those. Is that correct, Senator Hammer?


Sen Hammer: No, sir. My understanding of what we just did if we vote to pass– if you take my motion, we will vote everything else.


Sen Rice: Everything except 1 through 3, which just passed.


Sen Hammer: Yes, sir.


Sen Rice: I have motion of Senator Hammer. I have a second?


Audience: Second.


Sen Rice: All in favor, aye?


Audience: Aye.


Sen Rice: Opposed? The entire rules have been passed. Thank you, members, for the discussion. Going back now for our October revenue report. And, Dr. Silva, apologize for skipping over you, but we’ve given you time to prepare. You’re ready to go I can tell. If you will recognize yourself for the recording?


Financial report and projections

Silva (BLR): Thank you, Mr. Chairman. Carlos Silva, Legislative Economist, Bureau of Legislative Research. And right now we’re going to talk about item D. So item D is October 2022 general revenues for the fourth month there. So we got the July, August, September, October. As we’re looking to our gross general revenue, year to date we have approximately $2.796 million. After we take it out, all the deductions like claims and taxes, erroneously pay, uncollected checks, EFT reversals, we’re going to have an adjusted value there at $2.790 million and then we have off the top. So we have net available for distribution at $2.455 million. As we move forward to page 2, we’re going to see the cumulative deviation from the May forecast. So since we’re talking about October, the forecast that was presented to this committee– what?– this week have not been updated there. So what we’re looking here is from the May forecast. We have a $224 million above forecast. As we move forward to next month, that’s going to be adjusted based on the forecast that DFA have presented here in last few days. So page 3 to page 5, we’re looking at general revenues collected by the Revenue Division. We have income taxes, cigarette, tobacco taxes, alcoholic beverage taxes, and so on on those first three pages. And as we move forward to page 6 through 9, you’re going to have the selected special revenues. There is the increase that we have seen the state of Arkansas, it’s similar to have seen the neighboring states. This trend has been happening for the last few months. We are a little bit slower than the neighboring states when you’re looking to just the total values there for general revenue. But we’re still moving in the same direction as all the states near the state of Arkansas. So with that, I’ll take any further questions. Thank you.


Sen Rice: Thank you, Dr. Silva. Representative Wooten, you’re recognized.


Rep Wooten: Thank you, Mr. Chairman. Doctor, on the first page– well, page 3 actually, the income is down 6.8%, which is about $217 million. And then when you look at page 2 on the graph, it shows that from August to September we had $128 million increase and then it decreases from September through October to $49.2 million. Do you think that we’re starting to see a contraction of the economy as a result of the inflationary spiral that we’re experiencing?


Silva (BLR): So what we’re seeing right now is based on the May forecast. So as DFA have updated the forecast, we will update these values as well starting next month. So since they’re going to have actual values next month, it’s going to be a zero above forecast because they’re going to correct the forecast. But as we look into the indicators and we look into what other experts are expecting to happen in the next few quarters, there is a large portion that is expecting Q4 to have a small reduction. The majority is looking at Q1 to have another reduction in Q2, which that’s what it seems to be what people tend to agree on. But Q4 is still have some doubts of what’s going to happen. There is definitely a slowdown. But at what level, we do not know yet. And when does that slowdown is going to take effect? We still have some questions between Q4 and Q1. But then we’re going to start– we’re expected to see that once you get some values on those holidays, right, so how people are spending money during the holidays. When you look into revolving loans, we’re moving back to values above pre-pandemic. So when you think about credit cards and some of those revolving types of credit, we’re above that. So are individuals going to continue to spend their money throughout time? Equity values from the home start to decline. So are they going to attempt to smooth out the consumption throughout time or not? So that’s some of the questions that they are pending right now in the next couple of quarters. And we’re keeping close look on everything that’s coming out. We have something coming out right now for the state at 9 o’clock. So it just happened. So we are keeping an eye on it and I’ll be happy to talk with you later on if there’s any further questions. I hope that answers your question, Sir.


Rep Wooten: Follow up, Mr. Chairman. The reason I’m questioning and asking you about that is I noticed that several of the special revenue, particularly in the alcohol area, are down, showing minuses. And to me that’s a pretty good indication that the consumer is starting to back off on the money that you’re spending because they don’t have as much. Is that a fair assumption?


Silva (BLR): So anecdotally we’ve seen that, but when you look at real spending, it’s still up, at least from the numbers that we have from September, that people are still spending higher levels than they were previous years. So we’re really not seeing a reduction. We do expect a reduction and there is a lot of discussion when this reduction is going to happen. But people still consuming at higher levels. It is a declining rate of the increase and it’s not something as we have seen in the previous years, but still positive when compared to some of the previous year’s months.


Rep Wooten: I want to follow up on that. On page 7, I noticed that the aviation sales tax jumped from October 2021 of $776,000 to $3 million. What’s the difference there?


Silva (BLR): Yeah, thank you for the question. That’s a great question, sir. So aviation, so we start looking to flights. They have increased. It’s been positive in many months now, and it has a positive trend. We’re still not fully back to where we would be on pre-pandemic there. But it is moving at a fast pace towards the pre-pandemic levels. And that’s why we’ve seen that last year was really low. That’s why we have that difference.


Rep Wooten: More travel.


Silva (BLR): Yes, sir.


Rep Wooten: Thank you, doctor. Thank you, Mr. Chairman.


Sen Rice: Thank you, Senator Hammer. You’re recognized.


Sen Hammer: Thank you, Mr. Chair. Good morning. I think the underlying thought is that we’d like to hold about 20% of the budget in reserve just as a cushion. In the event when things start to fall, we can be safe. Do you think that number is still a realistic number that we need to hold on to or should we increase it a little bit more? Do you have any personal opinion about what’s the safe balance we need to hold for when things turn down?


Silva (BLR): That’s a policy question, so I will leave that to the wisdom of this committee. I’m sorry.


Sen Hammer: Let me ask you this. Based on your research that you’ve seen other states do that are fiscally sound, are we in line with them or are there other states that are being more aggressive as far as what they’re holding in reserves, or do you know or could you find out?


Silva (BLR): I’ll need to take a look into that. That’s a lot of moving parts right now. And what are they changing, what they’re reserving? So I need to probably contact them in order to get those values and keep in touch with you. Are you looking for the whole US or you’re looking for the neighboring states?


Sen Hammer: I would probably say region or someone comparable to state. I don’t care if they’re in the region or not. If you would, if you’d look at that, we’ll get together.


Silva (BLR): Yes, sir.


Sen Hammer: Thank you.


Sen Rice: I’m not seeing any more questions. Doctor Silva, thank you. Well, I do have one popped up, but I was going to say we do value your knowledge, but you just displayed some of it, too. Representative Ladyman, you’ve popped up there.


Agriculture and the economy

Rep Ladyman: Thank you, Mr. Chair. I don’t know whether this is a big problem, but on page 8 and 9, I’m just looking at the agri area. The incomes on those different lines like rice and corn and some of those, they’re all negative. Is that because it’s seasonal or is there a problem going on in agriculture that we don’t know about?


Silva (BLR): Are you talking about the wheat ones, the wheat tax?


Rep Ladyman: Well, I’m talking about all of them, really. If you look at rice, it’s down 14%. Corn is down 28% and the others are in the 4 and 5 percent range. They’re all down.


Silva (BLR): Right. So the commodities, they tend to be really volatile. But rice and corn specifically, as we start looking into year to year and from last month, we had some declining yields right there. For rice, we had around 50 pounds month-over-month declining yield and 130 pounds year-over-year declining yield when you look into that total for the acreage there. And we’re going to see around on corn, I think was 20% year-over-year. And so there’s a decline there. Again, agricultural should be really volatile. So we’re going to see some of that change. But the price is a big portion of it and the yield that has happened, the change out there. But if you need further understanding what is going on with the yield we probably need to contact somebody in the Ag Department to understand if it’s a weather issue or something like that. But that’s what we have seen.


Rep Ladyman: Well, I’d be interested to know if it’s due to volume reduction due to the Mississippi River and not being able to ship grains. I’d be interested to know if that’s a problem.


Silva (BLR): Yes. So that’s something that we did not look into yet. That’s kind of the values that we see that declined. But the reason for the decline, it’s not clear yet. So I need to contact an agriculture economist or somebody expert on the industry to kind of get that.


Rep Ladyman: Could you send us some information to the chair on that?


Silva (BLR): Yes, sir.


Rep Ladyman: Thank you.


Sen Rice: Representative Ladyman, did you want any information? Secretary Ward is with us today.


Rep Ladyman: Yeah, Secretary Ward or someone from Agri want to come up and comment on it?


Sen Rice: Thanks, Secretary Ward. If you’ll recognize yourself.


Ward (Agri): Yes, sir. I appreciate that. Wes Ward from the Arkansas Department of Agriculture. And I was following that conversation there, and I would say there is a lot of volatility in the commodity markets in particular, but this year has been very challenging. And we had a House and Senate Ag Committee meeting a few months ago and just talked about the challenges that the industry has faced. And so some of that disruption, of course, has to do with the Mississippi River, but broader, it has to do with supply chain disruption. It has to do with the number of acres planted. It has to do with the hot and dry conditions over the summer that impacted the ability to irrigate and just the overall quality and overall production and harvesting of those commodities. But we could certainly dig in a little bit deeper and provide a more specific report on rice and corn in particular, but overall commodities this year that we’ve seen. But it has been a very challenging year for all of agriculture.


Rep Ladyman: Well, I’m just wondering if inflation, because farmers are squeezed a little bit, is it really affecting them that much, inflation? So I’d like some information on that.


Ward (Agri): Sure, absolutely. We’d be more than happy to provide that for you. But it’s been fertilizer. It’s been inputs. It’s been just overall supply chain, diesel. Every piece of the input that producers have to rely on every single year have been impacted in a negative way. This year has just been very challenging. But we’d be more than happy to get you–


Rep Ladyman: Thank you.


Sen Rice: Okay. Not seeing any more questions. Thanks, Secretary Ward for being here. Did you have anything else? Thank you, Dr. Silva. We appreciate your report. And next members, we’re going to the Peer report, and Representative Eubanks is going to give that for us.


Rep Eubanks: Thank you, Mr. Chair. The Peer Subcommittee met on Tuesday, November 15. The subcommittee received reports, reviewed items, and approved requests for the following items: various temporary appropriation, American Rescue Plan Act appropriation, Infrastructure Investment and Jobs Act appropriation, Rainy Day Fund transfer, Restricted Reserve Fund transfer, a reallocation of resources for DHS and a fund transfer for ARDOT. Several items are noted in the report as being held in subcommittee. I move adoption of the report.


Sen Rice: I’ve got some questions. Representative Wooten, you’re recognized.


Rep Wooten: Can we have someone from DFA come to the table, Mr. Chairman?


Sen Rice: Okay. Somebody from DFA come.


Rep Wooten: Well, I’ve got a question about the rescue plan.


Sen Rice: On the ARPA money? Somebody can come up and answer that. Please, recognize yourself.


Babbitt (DFA): Andy Babbitt. DF&A.


Federal money and inflation

Rep Wooten: Thank you, Mr. Chairman. How much more money do we have that we’re going to dole out and get us in a deeper mess as it relates to what’s happening, Inflationary? But how much more money do we have that has not been awarded?


Babbitt (DFA): So far that we have not awarded, I’m going off memory here– I can get you an exact amount– but somewhere in the $450 to $500 million range,


Rep Wooten: $400-500 million. How much money have we pumped into the economy since the beginning of the pandemic?


Babbitt (DFA): We’ve spent all of the CARES money with the exception of a little bit. So that’s $1.2 billion. Then we spent another approximately $900 million or so of the ARPA money that came through DFA, then you have some direct funding also.


Rep Wooten: And I understand the need, but I think we need to fully understand that reckoning day is here as it relates to all this money that’s flown into the state. And so about a third of our budget that we have every year is what we had pumped in in one year in addition to what we spent and collect. Is that not right? Okay.


Babbitt (DFA): That’d be a fair statement.


Rep Wooten: Okay. Do you see the direct correlation between what we’re facing today with inflation and what it’s doing to the– hurting the citizens of this state as a result of overspending and spending too much money? And we’ve got fraud galore in every area of that expenditure. Do you see that as a problem, as a result for the inflation?


Babbitt (DFA): I’m an accountant, so that gets more into the economics side of it.


Rep Wooten: You answered my question by just what you said. Thank you, Mr. Chairman. Thank you, sir.


Sen Rice: Thank you. No other questions here. I’ve got a motion from Representative Eubanks for Peer. Do I have a second? All in favor aye?


Audience: Aye.


Sen Rice: Opposed. Thank you for that. Number 10, Review. Representative Eaves, you have that report, I believe.


Rep Eaves: Thank you, Mr. Chairman. The Review Subcommittee met on Tuesday and reviewed the agenda items, including MOFs, grants, and contracts. They approved a lease for motor vehicles for tobacco control. No items were held, and I move adoption of the report.


Sen Rice: I got a motion and second. All in favor aye? Opposed. Thank you. We have Senator Wallace, I believe you have the Personnel Subcommittee report.


Sen Wallace: Yes, sir. Thank you, Mr. Chair. Mr. Chairman, the Personnel committee met Wednesday, November 16, in Room Alpha of the Mac Building. The committee reviewed the request and reports listed as item 1 through item 17 on the report. I would be happy to entertain any questions, and I move to adopt report at the proper time.


Sen Rice: I have a motion. I have second. All in favor, aye.


Audience: Aye.


Sen Rice: Opposed? The report is accepted. We next have EBD, Employment Benefits Division. Senator Hammer, I believe you’ve got that report for us.


Sen Hammer: Sure. Thank you, Mr. Chair. The Employee Benefits Division Oversight subcommittee met on Wednesday, November 16, 2022. In addition to an overview of EBD budgeting processes by Jake Bleed, director of the EBD Division, the subcommittee reviewed and approved the following actions that were approved by the State Board of Finance on November 9, 2022: One, Employee Benefit Division’s quarterly report for the first quarter of FY 2023, and two, changes to the EBD drug formula plan. Move for adoption of the report.


Sen Rice: I have a motion. I have second. I see no questions. All in favor aye.


Audience: Aye.


Sen Rice: Opposed? Passes. Thank you. Representative Cavanaugh, Occupational License Report.


Rep Cavenaugh: Thank you, Mr. Chair. The Occupational Licensure Review Subcommittee met on Thursday, November 17, to discuss and approve the final report for the occupational entities in group two. I move for adoption of this report.


Sen Rice: I have a motion to second. All in favour aye.


Audience: Aye.


Sen Rice: Opposed? The report is passed. Members, if you’ve looked on your list of the other reports, the only one on H1, Arkansas Public Employees Retirement System requires motion to approve. If there’s not any questions on that, I’d take a motion. I have a motion. I have a second. All in favor aye.


Audience: Aye.


Sen Rice: Opposed? And then down on number 4– excuse me, number 5. I’m sorry, number 6A. Secretary White, if you’d come up, give us a brief update. We appreciate that.


White (DHS): Thanks, Mr. Chairman. Mark White, Department of Human Services. So I’ve sent the written report to you on the assisted living rate and our progress there. That rate on the state promulgation side, everything is in place for you all to review that rule next month. And so that is set to go. We received, I think, just a handful of comments from the public, but they were all in support of the rate. On the federal side, we’ve sent the waiver amendment to CMS to implement that rate increase. We’ve had a call with CMS staff and also with CMS’s– their actuarial vendor. To this point, they have not asked us any questions. And so I’m taking no news to be good news. But we are waiting for them to finish their review and then bring back an approval of the rate, which we are still expecting to have before the end of the year. And with that, happy to answer any questions.


Sen Rice: Representative Eaves, you’re recognized.


Rep Eaves: Thank you, Mr. Chairman. Just quick, what are you raising the rate to and from?


White (DHS): Oh, goodness. I apologize. I did not bring that with me.


Rep Eaves: You can send it later.


White (DHS): Yeah, right now, we’re paying in the 80s. This would raise it to, I believe it’s 96.54.


Rep Eaves: Okay, Thank you.


Sen Rice: Okay. I’m not seeing any more questions. Thank you, Secretary White, for your report and being here today.


White (DHS): Thank you.


Sen Rice: Members, not anything else that requires action. I will remind you, December 16 is the next full Legislative Council meeting. It is expected to maybe be a little longer than normal. We’ve got a lot of stuff to cover, but we’ve seen sometimes that doesn’t happen, and vice versa. So please put on your schedule for December 16 to be here. And I have Senator Irvin on the board. You’re recognized.


Sen Irvin: I just wanted to direct members’ attention to item G1, which is this report, Arkansas Criminal Justice Task Force on offender costs and collections. I specifically want to thank Senator Clarke Tucker, Representative Robin Lundstrum, and Senator Bob Ballinger. They did a lot of work on this, along with our Department of Corrections folks and everybody in that space. So if you get a chance, take this with you please, and review it. It’s very, very important that we have a more consistent way of collecting fees and fines for folks who have caught themselves up in the criminal justice system so that we can help them get those paid down effectively. And it was very, very good work. So I just wanted to specifically thank those individuals, particularly Robin Lundstrum. She did a fabulous job on this. And so take that with you folks, and please review that for future policy changes. Thank you.


Sen Rice: Thank you, Senator Irvin. And with that members, I hope you have a happy and blessed Thanksgiving. We are adjourned.