Arkansas Legislature Puts Big Issues to Rest

The 89th General Assembly isn’t sneaking quietly out the back door as it winds down the 2013 regular session.

Lawmakers closed the books last week on hotly debated issues including the Medicaid “private option,” formal approval of the state’s deal for a proposed $1.1 billion steel mill in Mississippi County and the GOP’s $120 million tax cut package.

One book, however, was opened with the filing of the first lawsuit challenging session-approved abortion restrictions.

The private option debate was finally put to bed last week with formal approval from the House of Represenatives and the Senate. 

After much gnashing of teeth (and in the case of the House, multiple votes), both chambers, with supermajorities, eventually passed legislation authorizing the private option, much to Gov. Mike Beebe’s delight. 

Under it, the state would use federal money earmarked for Medicaid expansion to offer private insurance to the state’s 250,000 or so residents enrolled in Medicaid. 

The Arkansas plan is now being viewed as a model for other states trying to determine how to deal with aspects of health care reform. While the plan has yet to receive final federal approval, state lawmakers expect to receive it.

The plan includes a provision that Arkansas employers would not be subject to penalties under the Affordable Care Act if any of their employees are enrolled in the private option program. 

Beebe planned a special ceremony for Tuesday to sign the plan into law.

Big River Mill Gets Final OK

The proposed Big River Steel Mill on the banks of the Mississippi River just outside Osceola will proceed as planned. 

As expected, the Legislature last week gave its stamp of approval for the deal negotiated by the Arkansas Economic Development Commission.

The state offered an incentive package of $125 million plus $216 million over 14 years in recycling tax credits.

Ground is expected to be broken later this year just south of Osceola. Big River officials promise 525 jobs right off the bat at an average annual salary of $75,000.  Nucor Steel already operates two facilities in Mississippi County.

Tax Cut Package Advanced

The House passed (with the full Senate expected to do so late Thursday) a package of tax cuts totaling $120 million and including reductions in the state income tax, capital gains tax and the taxes manufacturers pay on utilities. 

The tax cuts, to take effect in the 2014 tax year, include a lowering of the top income tax rate from 7 percent to 6.875 percent, and a raising of the minimum income within that rate from $34,000 to $44,000. 

In addition, manufacturers would see the taxes they pay on electricity and natural gas reduced to 1 percent by 2015. 

Another component to the tax cut package would reduce the sales tax paid by manufacturers on repairs and replacement of certain equipment, and eliminate it by 2018.

The capital gains tax exemption was increased from 30 percent to 70 percent for capital gains of more than $5 million made from investments before Jan. 1, 2014.

After that date, it would revert to 30 percent for capital gains and create a permanent 70 percent exemption for capital gains made from the sale of all Arkansas property acquired thereafter and owned for more than a year before the sale.

Another component of the legislation creates a $2,000 individual deduction beginning in 2014, increasing annually by $200 through 2016. 

Also, it exempts from state income tax any net capital gains of more than $10 million from an investment made before Jan. 1, 2014. 

As of late last week, the bills cleared their final legislative hurdles and awaited only Beebe’s signature.

Also awaiting full Senate approval late last week, the Associated Press reported, was Beebe’s plan to cut the grocery tax if the state’s bonds for school desegregation payments decrease by $35 million over a six-month period.

First Abortion Lawsuit Filed

The first legal challenge to the law outlawing abortions beyond 12 weeks of a pregnancy was filed even before the Legislature adjourned.

Lawmakers passed — and then overrode Beebe’s veto of — a measure banning abortions after a fetal heartbeat can be detected, usually at about 12 weeks.  North Dakota recently passed a law banning most abortions after six weeks.

The Arkansas law exempts cases of rape, incest, risk to the life of the mother, and fatal fetal disorders.

According to The Associated Press, the ACLU filed the suit on behalf of Little Rock doctors Louis Jerry Edwards and Tom Tvedten, who both provide abortions. 

The suit asks a federal court to strike down the law, which is set to take effect July 18.