House Revenue and Tax Committee

Jan. 12, 2023 


Rep Eaves: Well, welcome everybody to Revenue and Taxation. I see some familiar faces, some not so familiar. Dennis, how are you? I want to take a moment just to say that it is truly an honor, and I am grateful and humbled to be able to chair this committee with this fine group. And I’m also honored to have by my side the honorable Howard Beaty. My name is Les Eaves. I represent district 58, and that’s in Searcy, Kensett, and Higginson. And I want to take this time to introduce my vice chair. Howard, tell us a little bit about yourself.


Rep Beaty: I’m Howard Beaty, district 95 Ashley and Chicot County, second time to serve on Rev and Tax, and extremely honored to be vice chair and to work for this committee. And work for this committee, I will. So if you need something, don’t hesitate.


Rep Eaves: All right, thank you, Representative Beaty. Members, we’re going to do something here at the beginning, take just a minute to have all the committee members introduce themselves and tell us what your district is and then also give a little discussion on your background. And normally we’d start with Representative Jean. I know he’s not able to be here today, so Representative Lundstrum, you’re up.


Rep Lundstrum: You almost stepped in and said I’m the oldest member. My name is Robin Lundstrum. I’m a state representative from district 18, which is the northwest corner of Elm Springs, Tonititown, Springdale, and a little bit of Fayetteville. And I’m a small business owner, and I’m glad to be here.


Rep Brown: She was so quick. I wasn’t ready. I’m representative Karilyn Brown. I’m representing District 67, which is about half of Sherwood and half of Jacksonville. My background is I’ve been in financial services as a financial adviser, and I’m also a professional technical writer. And I’ll leave it at that. Thank you.


Rep Fortner: My name is Jack Fortner. I represent District number 4. It’s been my pleasure to serve on this committee for several years and I am looking forward to our new leadership and working with Representative Eaves and Representative Beaty.


Rep Cavenaugh: Representative Cavenaugh, District 30, first time on Rev and Tax, not my first time dealing with rev and tax. In my other life, I’m a CFO for an auto group so we deal with these type of issues on a daily basis. Thank you.


Rep Rye: Representative Johnny Rye. The District 36 is actually about half of Poinsett County and about a third of Craighead County. And I just want you to know I’m proud to be here with you all. I know every one of you and just proud to be here.


Rep Hollowell: State Representative Steve Hollowell from District 37, which covers St. Francis, Cross and Poinsett county, parts of those. I’m from eastern Arkansas and this is my first time on Revenue and Tax, my fourth term of the House. So just glad to be here. Thank you.


Rep Warren: I’m Les Warren, District 84, which is Hot Spring and Garland County. This is the only committee that all four terms I’ve been on. Glad to be back. And I will tell you I’ll never forget my first term in here. I was number 100. And we were dealing with the internet sales tax. And they decided that they would start with number 100, lowest ranking to take the first vote. I was glad to say I was a yes. And while some others were leaving the room, because they, “Oh, I got a call.” So anyway, it doesn’t get any worse than that, and I survived, so welcome to the new ones.


Rep Lynch: Roger Lynch. District 60 has Lonoke, England, Carlisle, Keo, and all those big towns south of here. Glad to be back. This is my fourth term on the Rev and Tax, and always like to mess with money. So glad to be here.


Rep McAlindon: Mindy McAlindon. I’m District 10, Bentonville, Bella Vista area. It is my first time in the legislature. Excited to be here. I have a background in engineering as well as I’ve worked in finance and business for about 20 years. So looking forward to the conversations. Thank you.


Rep Burkes: Rebecca Burkes. I represent District 11, which is eastern portions of Benton and Washington County in Northwest Arkansas. I’m an attorney, a business owner, and most of my career has been in real estate. I’m very excited to be on this committee as a freshman.


Rep Furman: Tony Furman, I represent District 82, which is the southern part of Saline County. And I’m also a former Mr. 100. So happy to be in good company. My background is in real estate. I’m a realtor and a appraiser. And second term in the House, first term on this committee, and I’m excited to be here.


Rep Carr: So I’m state Representative John Carr. I represent central Rogers, District 15, great people. And this is my second term, first term on this committee, and I look forward to doing great things for the people in the state of Arkansas.


Rep Haak: Good morning. I’m Delia Haak. My first term on Rev and Tax, my second term in the House. I’m looking forward to learning a lot and working with our new governor and our new legislature.


Rep Ray: Good morning, everybody. I’m David Ray. I’m starting my second term, first term on Revenue in Tax. I represent District 69, which is the northernmost part of Pulaski County and the southern part of Faulkner County. And my background is largely in electoral politics and issue advocacy. And I’m excited to be on this committee. I have a lot of interest in tax and fiscal policy, and I’m happy to be here.


Rep McGrew: I’m Richard McGrew from District 85, which is the west part of Garland County, Hot Springs Village. It’s my second time in here in Revenue and Tax. I also started out as number 100. And previously, I was CEO of McGrew Companies, which held electrical contracts and electrical service company, property management company, and several real estate holdings.


Rep Wooten: I’m Jim Wooten. I represent District 59, which is Beebe, Ward and Austin, North Lonoke County, and south White County, and I’m pleased to serve with Les Eaves and Representative Beaty as the leadership of this group. I’ve coached football for 25 years at Beebe. I also owned an Exxon distributorship. We had convenience stores and truck stops all over the state. And this is my third time on the committee, my fourth term. I’m a former DFA director and a director of the Department of Commerce. And I look forward to working with each other. Thank you. Thank you, Mr. Chairman.


Rep Eaves: All right, members, thank you for that. And I want to take a moment to introduce our staff and thank God for them. We have Mr. Brandon Smith. He’s the committee analyst. And sitting over to my right, we have Miss Theresa Maxwell. She’s a committee assistant, and then Joy Leonard is the committee attorney. I don’t know if she’s here. Yeah. Okay. So thankful to have these folks helping us out with this committee. That’s going to be a lot of help. Next thing we want to do is recognize some representatives from different agencies and organizations and associations for introductions and maybe a brief description of their agency. So there’s no specific order if you guys want to just raise your hand, any of you can go to the table and give us a little history about yourself or some information. Starting with DFA.


Walther (DFA): My name is Larry Walther, and I’m the secretary of the Department of Finance and Administration. I’m starting my ninth year on this job. I’ve spent the first eight years with the former governor, Asa Hutchinson, and starting the ninth year with the new governor, Sarah Huckabee Sanders. So I’m very pleased to be here. What you’ll find, DFA in all of your committee meetings, you will also find us at the end of this table. I was thinking it wouldn’t be today, but we get the opportunity– I would say every meeting that you have, you’ll have DFA down here at the end of the table. What we’ll be doing is providing analysis on revenue impact of the bills that you’ll be considering. And we’re very pleased to be here. This is a very, very important committee for DFA and the state of Arkansas. So we’re proud to be here, and I’ll take any questions if you’d like.


Rep Eaves: Representative Lundstrum, you’re recognized.


Rep Lundstrum: Larry is one of those people that he could have easily sailed off in the sunset, and I want to thank you for staying. You have an incredible resume. And you always are extremely humble, but you also always return your phone calls. And I’m just glad you’re here. So thank you.


Walther (DFA): Thank you.


Rep Eaves: Thank you, Representative Lundstrum. Members, any other questions for Mr. Walther? All right. Thank you, Larry, for coming down.


Walther (DFA): Thank you. Easy day today.


Rep Eaves: That’s about the easiest day Larry’s going to have.


Collins (DFA): Thank you very much, Mr. Chairman, for giving us this opportunity. And one of the things I recall from my days in the legislature was sometimes the state agencies can look a little bit like a black box and kind of who’s over there and what do they have. So hopefully you’ll indulge me, Mr. Chairman. I brought over as much of my management team in tax as I could bring over today. So if you ask the question, how many managers do we have over in tax, we’ve got about half of them here today. And I want to just introduce them so you can kind of put names and faces together. So first in income tax, so the three income tax managers, if you just stand up, please. And I’ll just introduce them. So the way our income tax section is organized, Autumn Hemphill is the boss, and then we have two sections with managers. One is individual income tax, and the boss of that section is Judy Bowers. And then we have a corporate income tax section, and the boss of that group is Scott. So between those people, they have about 75 years’ experience working in DFA. And then they have a team of employees that work for them. There’s also another group in income tax, which does a lot of the, I’m just going to call it administration. So people send paper tax returns and we process those, etc. But we don’t have a manager over that organization. We’ve got a supervisor. Thank you very much. If the three of you could sit down.


Collins (DFA): The second group we have in tax, we call field audit. So if you’re in the field audit group, please stand up. So the boss of our field audit group is Eileen Henderson, if you’d raise your hand, please. The assistant boss is Rob Allen. Rob personally does a lot of the fiscal impacts. He’s one of our experts in sorting through some of those more challenging, difficult methods of thinking about how can we do that? And Rob is, I’m going to say he’s probably, if not the best, one of our two best at doing that. We’ve got really three people that I would call experts in that area. And then in addition, we’ve got Amanda Land, and she’s kind of legal background. She’s got a broad background. She spent some time with the attorney general, and she’s going to be helping us with lots of field audit questions and answers. A lot of you and your constituents have questions about the audits, if they’re a business, if they’re a person. A lot of times we’ll have senators or representatives asking us about specific audits or questions about lots of different things. And Amanda is going to be kind of our key legal expert to kind of help and help our other managers do that.


Collins (DFA): In field audit, I also have five managers which are out in the field. So we have one in the northeast, one in the northwest, etc. And they’re over the offices where the auditors are who are actually doing the individual audits. So field audit is group number two. Thank you very much, folks. If you would, if you would sit down. The next group is our sales tax and others. So if you’re in that group, would you please stand up? The boss of our sales tax group is not here today. Her name is Deanna Munds-Smith. She’s been with us for a very long time and was one of our most experienced leaders. This is the area where we deal with a tremendous amount of complexity. When you look at the budget and you look at the revenue statement, income tax is a humongous part, and sales tax is a humongous part. But we have many, many, many, many other taxes and they may not add up to a lot of money, but from an administration and a management standpoint, we have a lot of those. So our assistant boss in that area is Todd Cockrell. So everything from cigarette tax stamps to marijuana taxes and many others kind of fall in Todd’s shop of miscellaneous taxes. We also have Drew Smith, who’s one of our assistant bosses, and he is over the sales tax area. So lots of people have questions about things like, my constituent lives just outside Bentonville but she had Bentonville taxes on the Amazon purchase. How could this happen, etc., and so Drew is an expert at, well, here’s the map that we have with GIS. Here’s how all the city boundaries were laid out in the state of Arkansas and how every house that’s on the city boundaries is listed so that anybody could look up any address and find out exactly what the taxes are. If by chance there’s some plating error that put one house in the wrong area, if we need to get that corrected we have extremely few of those, but it doesn’t mean it couldn’t happen. All the way to the big taxes that we collect from the major retailers all flow through Drew.


Collins (DFA): Similarly, your counties and your cities because we provide them their tax receipts after they’re collected, they have lots and lots and lots of questions and Drew’s been in charge of building the datasets that are available online for all your cities and counties to look at to see all of the discrete breakdowns of the money they receive, when they receive it, and how they receive it. Drew put together a package of information on city and county taxes. I shared that with the speaker. He may have sent it out. If you’re familiar with that package of information, fantastic. Mr. Chairman, if you’d like me to send it to you for distribution, we’re happy to do that again. But it answers questions like, why does DFA hold my tax money until date X-Y-Z? And we’ve got a table in there that shows every day from the day a customer walks into Walmart and pays the money where it is every single day until it lands in your county judges account. Lots of information like that if you want it. And Drew is fantastic not only at the macro, but also dealing with the individual issues.


Collins (DFA): Next, we have Deven Toney. She manages the area we call tax credits. So somebody buys a used vehicle. They buy a new vehicle. Why was it that I could– how do I get my credit to match up? I didn’t do them on the same day. Where’s my refund? Who’s keeping track of that? That’s in Deven’s area. Also, when you say at AEDC, we’re going to give these discounts or these kickbacks to employer A-B-C and what is the clawback process, and who’s keeping track of that, and how do we know they’re not snookering on us or whatever the questions might be. Deven and her shop keep track of every one of those. And there’s a 10-year audit that happens with legislative audit, usually in December, and she walks through– the last time was what $684 million going back 10 years? Every nickel and where it is and where it was and it’s by legislative audit and Deven and crew are there to present that to the legislature. So that’s where it’s tracked as in Deven’s group.


Collins (DFA): Next to Deven is Shonda, and Shonda is over our withholding section. So as many of you recall in August, you passed a tax reduction that was effective retroactively in 2022. How are we going to manage that, and what are we going to do with withholding tables, and when are those going to go into effect? And what are employers going to do? And so she’s got personal relationships with whether it’s all the payroll companies, the major companies like Walmart, to talk to them about here’s the work we would like you to do to adjust your withholding tables and can you do this and will you do that so that small business owners when you’re getting your QuickBooks, all those things can automatically work? Shonda and her team are the group that do that. So those are the folks that we have in management in the tax section. And those are the major areas and again, Mr. Chairman, I appreciate your indulgence in letting me share that. And if there’s any questions I’m happy to answer.


Rep Eaves: Thank you, Charlie, for that. And you can send that information to me. That would be great.


Collins (DFA): Yes, sir. I will do it.


Rep Eaves: And members, as you can tell, Charlie’s very experienced with these matters and is a numbers guy, which is, I think, why he probably failed to introduce himself. I think. It’s Charlie Collins. He’s a former member of this body. And if I’m not mistaken, and also a former chairman of this committee. So real good resource for information about this committee and about DFA in general. So members, you have any questions of Mr. Collins? Representative Fortner? You’re recognized.


Rep Fortner: Thank you, Mr. Chairman. The shining star forgot to introduce himself. And you introduced him. So he’s usually not that bashful. He sat by me for a long time in the House of Representatives and there was a huge debate about who was the smartest in the House at the time.


Collins (DFA): I remember you telling me when I lost my race, you thanked me because then you were the smartest.  Mr. Chairman and committee, thank you very much. I appreciate y’all.


Rep Eaves: Thank you.



Gehring (DFA): Good morning, Mr. Chair, members of the committee. My name is Paul Gehring. I’m the assistant revenue commissioner for DFA. I began my work with DFA in 2007 as an attorney, and then my current role I took on in 2016 when John Tice retired. So I work in the office of revenue legal counsel, which is the legal division of the revenue division, and we represent DFA in both litigation, appeals, as well as administrative hearings before the newly created Arkansas Tax Appeals Commission. But during the legislative session, our primary focus is on serving the General Assembly by working on fiscal impact statements for the legislation that is filed for consideration by the committees. We serve primarily in the Revenue and Tax Committees, but we also have our personnel in Transportation, State Agencies, Judiciary. We have a number of areas of Arkansas law that impact DFA so we want to be present and provide our analyses in our fiscal impact statements to any type of bill that’s going to affect the revenue division or DFA. So we have– just a quick note about fiscal impact statements. We look at every single bill and amendment that gets filed in the General Assembly. We immediately quickly assign that bill to our various tax sections, as well as to the revenue legal counsel attorneys so that we can begin reviewing and performing our analysis. Our fiscal impact statement is designed to be an objective analysis to provide the General Assembly with a number of issues.


Gehring (DFA): First and foremost, we want to provide a revenue impact for that bill so that it can be used for budgeting purposes, forecasting purposes, and also just to see what the cost of the tax changes that are going to be proposed by that piece of legislation. We also look, not just for how it’s going to impact our collections of taxes, but any administrative costs that might be associated with that change. If there is, for example, a new tax credit that we will need to administer, we’re going to make an analysis of the personnel cost, the programming costs, and also we’re going to be identifying any changes to procedures that we’re going to need to do to our tax forms and instructions, as well as any communications that we need to make to the taxpayer community. The fiscal impact statement is also going to identify any issues for administration of that legal change. We’re going to try to identify any areas of clarification that might be helpful. So quite often when we issue a fiscal impact statement, we’re going to bring those issues in either the legal analysis or possibly other comments within that fiscal impact statement. But we’re also going to work very hard to communicate with the sponsor so we can get our questions answered. And sometimes we may propose or want to discuss a potential amendment to that bill, just so that we can administer and implement the changes that the General Assembly wants to make to our tax law. So Commissioner Collins and myself quite often are going to be your primary points of contact. So if you have a question from a constituent or a question that you have individually about the revenue laws that we administer, please feel free to reach out to Commissioner Collins or myself directly.


Gehring (DFA): At this point, I’d also like to introduce the members of our revenue legal staff. First is Alicia Austin Smith. Alicia has been with revenue legal counsel since 2017. She started as an attorney just like myself, and now she is our chief counsel. So she has approximately 19 or 20 attorneys that report directly to her. So anytime that DFA is involved as a party to litigation that affects the revenue division, she’s going to be our leadership person that’s going to work with the attorneys that are assigned to that matter. And then to her left is Keith Linder. He is one of our supervising attorneys. Keith has been with us for approximately two years. Three and a half, okay. All right. So, yes. So Keith works on a number of issues. He works on litigation, appeals, as well as our legislative matters, bill drafting, etc. So I’d be happy to answer any questions. I know first and foremost, the most questions that I get about legislation is going to be the fiscal impact statement. So many of you have sat through committee meetings where I have sat at the end of the table to talk about the revenue impact. But I’d be happy to field any questions that the members might have today about that process.


Rep Eaves: All right. Thank you. Thank you, Paul. Members, this is about as well rested as you’ll see Paul for the next three months. Paul, real quick, is DFA the only place that a member could go to get a financial impact statement on a particular bill?


Gehring (DFA): Well, you might be aware, Mr. Chair, that as a part of a legislative change that occurred in 2021, DFA is now providing a tremendous amount of tax data to the Bureau of Legislative Research. So now that’s anonymous tax data. That’s not individual information. This is aggregated information. I’m not aware of what steps the bureau has instituted at this point to begin doing those individual analyses of revenue impacts. But they’re also going to see that there are other state agencies that may review a bill for fiscal impact, for example, perhaps in corrections. They do do legislative or fiscal impact statements. But if there is a tax change, we are directly going to be looking at that bill for purposes of any type of state tax that might be affected. But also as a part of the transformation, I would like to note that the Assessment Coordination Department has now been made a part of the Department of Finance and Administration. It’s now the Assessment Coordination Division. So if there is a matter that pertains to property taxes, either real or personal property taxes, our administrator for ACD is Sandra Collier. She also works in Charlie’s area and is going to be involved. In years past, ACD was a separate part of state government, but now it’s housed under DFA revenue. So anytime that we have a bill that affects property taxes, it’s also going to be assigned to ACD for review and analysis.


Rep Eaves: Okay, thanks, Paul. Representative Wooten, you’re recognized for a question.


Rep Wooten: Thank you, Mr. Chairman. I just want to echo Representative Lundstrum’s comments about Secretary Walther and the DFA over there. They have a real challenge. And I know at times you see a different approach to me, but I know where they are and I know what they do and I know what they have faced. And Mr. Gehring and Representative Collins, and McVey, and Rick, and Secretary Walther, it’s a balancing act. They serve so many masters. They serve the governor. They carry the banner of the governor, plus they serve the Senate and the House. And that’s not an easy task. And so they have to lay it out like they see it, and we have to evaluate that. But I just want to– we are blessed to have Larry Walther as secretary of finance of DFA because of his knowledge and his ability, but most of all his gentleman approach to all the issues. And I just wanted to express that at the outset, Mr. Chairman. They have a tough job. Thank you very much.


Rep Eaves: Thank you, Representative Wooten. You seem to have a little bit of knowledge about DFA. Were you a part of that at some point?


Rep Wooten: Yeah, I’ve been there. Let’s put it that way.


Rep Eaves: I believe you were the director of DFA?


Rep Wooten: Yes.


Rep Eaves: A while ago?


Rep Wooten: You don’t have to add a while ago, but we had one– I can’t remember, who was that that got up here and he had testified and when he finished, he said, “I was a young man when Mr. Wooten was director of DFA.”


Rep Eaves: All right.


Rep Wooten: Thank you, Mr. Chairman.


Rep Eaves: Thank you. Representative Brown, you’re recognized.


Rep Brown: Thank you, Mr. Chair. I just want to say, I’m a former employee of DFA when I was just a young person. And I have a sister who was an auditor for you all. But I wanted to ask you, Mr. Gehring, on the financial impact statements, I haven’t required very many since I’ve been in the House, but I do know or I think that there are certain times when a legislator needs to be proactive and reach out to you all for the financial impact statement. I guess particularly if they anticipate the financial impact or if there’s a deadline to have that financial impact statement. Could you speak on that a little bit?


Gehring (DFA): Yes, Representative. So we have our staff within revenue legal that generally do not attend the committee meetings. They’re back at the office and watching everything that’s going on. They’re watching every single bill on an hourly basis that’s getting introduced and reading those bills. And as soon as we see a bill that’s going to be a tax bill, we’re going to immediately assign that bill to our tax administrators and to our attorneys to review. So definitely on the day that the bill’s filed, it’s going to get assigned. So I will say this, I don’t think that anyone really would ever be in a situation to have to reach out to DFA for a fiscal impact statement on a tax bill. We’re already going to be a work in progress not only for the bill when it’s originally filed, but any subsequent amendments or engrossments of the bill. In terms of a time frame, we do try to work very quickly. We know that the committees and the legislators, you all are only going to be here for the number of months that you need through the spring to get all the state’s business done. We know how important it is to get that information turned around and filed and available so that you can have it, review it before the committee meeting, and so when you’re ready to run your bills that you have the information and not just that, but also have an opportunity to talk to us if you have questions. But sometimes the bills that get filed are very straightforward. The revenue impact is very simple to calculate. Sometimes it’s much more complicated, and we have to rely upon information that’s outside of the DFA tax records that we’re looking at to calculate a revenue impact.


Gehring (DFA): For example, we might be looking at federal, statistical information, Census Bureau information, economic information, but we’re going to work very quickly to make sure that the fiscal impact is available and filed with BLR. On that note, I would also say that we have a distribution list of individuals that received the revenue impacts. Once they are released, if anyone would like to be added to that list, you will get them immediately once they are released by DFA. The process currently is that BLR is on the distribution list. They receive it and then post the fiscal impact statement to the BLR website. But if you would like to get the fiscal impact statements once they are released, I’m happy to add you to that distribution list. We also try to work very hard to make sure that if there’s something that you’re very much interested in, that when we release it to email it directly to you. I understand during the legislative session, your email inboxes are– that you’re going to be getting multiple tens, hundreds maybe, a day, may get lost in your inbox. So if you would like to have your fiscal impact statements emailed directly to you when they’re released, please reach out to me and we can make sure that that gets done, so.


Gehring (DFA): But to give you an idea of a time frame, we certainly have circumstances where a bill might get filed within a day or two of the committee meeting where the member is going to want to run their bill. We will work very hard to make sure that the fiscal impact statement is finalized and posted to the BLR website in advance of the committee meeting. But please understand that we’re working very quickly. We also want to make sure that the bills that have been filed before that one are also getting appropriately worked up and so we’re trying to work on the bills in the order that they have been filed. That’s not necessarily going to be the timeline for when all of them get released. Once things are done and completed, we want to get it out and released. But if something is giving us a great deal of delay, we do certainly try to reach out to the member and say, “We’re having some difficulty on numbers, but we are working on it.” But certainly we certainly understand that the committee is going to be meeting. The committee is going to need the information and we need to get those fiscal impact statements to you as quickly as possible. Now, we do see from time to time, we might see a typographical error. We might see an error in the fiscal impact statement that we’re going to proactively move to correct. If there is a circumstance that you see something that you don’t understand or you think that the calculations are just incorrect or in need of review, please reach out to us. We will be happy to explain the methodology for calculating the fiscal impacts within the revenue impact in the fiscal impact statement.


Gehring (DFA): And from time to time, as we get greater information, we may revise the revenue impact. We may revise other sections of the fiscal impact statement as we get clarification on certain items in the bill. So certainly, I want to just make sure the committee understands that what our sole focus on the fiscal impact statement is to provide the objective analysis of the bill. This is not DFA trying to inject what we think the law should be. We want to be sure that you all– when you’re filing a bill, we’re looking at it from our perspective of what the fiscal impact or the revenue impact is going to be, and what any administrative hurdles that we are going to need to implement if this bill becomes an act of the General Assembly.


Rep Eaves: Thank you, Paul.


Rep Brown: Thank you.


Rep Eaves: One more question. Representative Ray.


Rep Ray: Mr. Gehring, I know any time there’s discussion of fiscal impact statements, there’s a question of whether the scoring is static or dynamic. When your team is developing these fiscal impacts, do you try to take into account the changes in behavior that legislation will spur or is it simply a static scoring? Can you speak to that?


Gehring (DFA): I certainly can. So it’s a very great question, Representative Ray. Our fiscal impact statements, the revenue impact is based on static scoring. And the alternative to that is dynamic scoring. So we make tax changes, obviously, to change behavior and also when the state is collecting too much revenue to make sure that we can provide tax relief to those individuals that we want to assist. Now, so I would say the predominant fiscal impact statements that we’re going to be issued are going to be purely a static score. There’s going to be some times that we are going to need to look at circumstances where it’s unknowable in the future. A good example is the last session we had the paycheck protection program legislation that exempted the PPP loan forgiveness from COVID. This was an entirely new program that was a part of the federal COVID relief that we were just– that it was going to be an ongoing program, so calculating the revenue impact was a much more intensive process in a bill such as that as opposed to perhaps a rate change in the income tax or the sales tax where we have very good information from income tax returns that we can compare a rate change to see what that static impact would be. We generally only provide a fiscal impact for two or three fiscal years. So we’re not looking out multiple years unless just the terms of the bill are going to be a phase-in of a tax change that would be implemented over a number of years.


Rep Eaves: Thank you, Paul. Thank you for coming down very much. Appreciate that.


Gehring (DFA): Thank you, chair. Thank you, members of the committee.


Rep Eaves: All right. Is there anyone else from an agency organization or association that wants to briefly introduce themselves or say anything? Okay. All right, members. You got a couple of announcements that staff is asking us to tell you about. During session, the committee is scheduled to meet in this room, room 151, every Tuesday and every Thursday at 10 AM or at the call of the chair. Currently, it looks like our next meeting will not be Tuesday, but it’ll be Thursday of next week. Let’s see. Also, a quorum must be present to start each meeting. 11 committee members constitute a quorum in this meeting room. It is important for members to be on time to the meeting so that we can see a quorum and get the meeting started on time. Agendas are prepared in accordance with House rules. Agendas are prepared two days in advance. Sponsor notifications will be sent to members who have bills on the agenda two days before the committee meeting, and sponsor notices are also sent via email. After a bill or resolution has appeared on the committee agenda and has been called up for consideration and the sponsor is not present, the item will be placed at the bottom of the active agenda. If the bill or resolution has been called up for consideration three times, it will automatically be dropped to the deferred list unless the sponsor notifies staff. Requests to move bills from the deferred list to the active agenda must be made by 2:30 PM two days prior to the scheduled committee meeting. Amendments should always be in writing so please let staff know before the meeting if you do have an amendment.


Rep Eaves: And then regarding special order of business, this will be set at the call of the chair, and it is done when the sponsor of a bill requests a special meeting date or time for the committee to hear this bill. This is used when there is a controversial bill that will have a lot of people testifying either for or against the bill or when the sponsor has people coming from out of town to speak on this bill. And I believe that is all of the announcements. You’ve got pencil and paper in front of you. If you would, before you leave, take a moment to write down your first and last name and your cell numbers so that myself and Representative Beaty will have that. We’re going to communicate with this committee members primarily via text. And this is going to be run a little bit different than some of the other committees that you may be on as we probably won’t hear every bill that’s on the agenda every time you come in. So you’ll get a list of the bills that we’re going to hear ahead of time so that you can prepare and have a chance to read those. And I want you to understand, too, that in this committee, we are somewhat the gatekeepers of legislation that affects the state budget. You’re going to have a lot of tax-related bills come through this committee. And not all of them are going to make it out nor all should make it out. Speaker Shepherd has met with the governor’s staff and is apparently working through– one of her priorities as you are well aware of, is income tax cuts. So we’re going to probably be off to a little bit of a slow start until that kind of materializes and we figure out what that looks like and then, at the end of the day, how much it’s going to cost. That will allow us probably more toward the end of the session to run some of the other bills that we think that we need to run.


Rep Eaves: This is your committee. I just ask that, I’m a fair person, I’m respectful of your time and of yourself, and I ask that you be respectful of all of the members on this committee and as well as the people here who are testifying. Also remember that everything is live-streamed. So if your button is pushed, you’re going to be heard. So whatever you’re doing in here is going to always be on audio and video forever. Ask me how I know. If something happens in the committee that you don’t like or that you think perhaps I’ve been unfair or whatever, just come see me. My office is right behind here. The door is going to be open. And I want to take care of business the way we need to take care of it, not air it in public. So if you have any questions, any comments or compliments, right? Compliments?


Rep Beaty: Yes.


Rep Eaves: Yeah. Come see us. We’re glad to do that. And just remember, we have a job to do. And I think that, for me, that is to make Arkansas a better place for our constituents, for our families, and a better place to do business. So if you’ll please help me focus on that as we get going, I think we’re going to have a good time, and I appreciate you being on Revenue and Tax. Any other comments before we head out? Nope. All right. Thank you very much. We are adjourned.