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2019 Pro-Business Legislative Victories 

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UNEMPLOYMENT INSURANCE

Unemployment Insurance Cost Reduction SB 298-Act 512

Creates system to index wage base and will lower wage base from $10,000 to either $8,000 or $7,000, effective January 1, 2020
Impact: $40 to $60 million annual savings to employers

TAXATION

Business Tax Reforms SB 576-Act 822

• Corporate Tax Reduction

Corporate Income Tax Rate will be reduced from 6.5% to 6.2% effective January 1, 2021, then to 5.9% effective January 1, 2022
Impact: $39.3 millions in savings to employers by 2023

• Net Operating Loss (NOL) Carry Forward

Effective January 1, 2020 NOL carry forward period increases from five years to eight years, then to 10 years effective January 1, 2021
Impact: Estimated savings of $70 million by 2032

• Marketplace Fairness

On July 1, 2019, out-of-state retailers with more than $100,000 of in-state sales or 200 annual transactions with Arkansas citizens will be required to collect and remit sales taxes
Impact: Improved competitiveness for in-state retailers

• Single Sales Factor

Use of a single sales factor instead of the current double-weighted formula will tax in-state businesses solely on their sales in Arkansas, not physical investment, payroll and sales in Arkansas
Impact:  Arkansas will join 25 other states using a single sales factor

Individual Income Tax Reduction SB 211 - Act 182

Personal Income Tax Rate will be reduced from 6.5% to 6.2% effective on January 1, 2020, then reduced to 5.9% effective January 1, 2021.  The brackets are also simplified.
Impact: Savings for individual taxpayers of $97 million by 2022, which includes a significant reduction for most Arkansas business entities.

WORKFORCE QUALITY AND EDUCATION

Workforce Development Leadership SB522 - Act 1079

Amends duties of Career Education and Workforce Development Board and renames it the "Office of Skills Development and the Career Education and Workforce Development Board."
Impact: Increases business and industry involvement in workforce training

Weighted Credit Courses SB 478 - Act 632

Provides training options for teachers in advance placement programs and broader options for Department of Education to approve weighted credit courses.
Impact: New standards to approve weighted credit courses

Elimination of Higher Education Service Areas SB 659 - Act 944

Allows 2-year institutions of higher education to market and offer courses or provide services regardless of service areas
Impact: Broader student access to community colleges

Improving Student Reading SB 603 - Act 1082

Creates new literacy requirements on Department of Education and school districts, plus coordinates and directs support from Department of Education to certain school districts not performing satisfactorily
Impact: Literacy plan by categorized school districts

TRANSPORTATION 

Highway Maintenance SB 336 - Act 416

Transfer some casino tax revenue and indexes fuel tax at wholesale level equivalent to 3 cents a gallon on gas and 6 cents on diesel to generate increased revenue.
Voters may extend existing half-cent sales tax that is committed to highway maintenance and construction
Impact: $300.6 million for highway maintenance:
$95 million from Act 416
$205.6 million if voters approve HJR 1018

BALLOT INITIATIVE PROCESS

Ballot Initiative Reform SB 346 - Act 376 and HJR 1008

Act cleans up laws regarding signature gathering and removes Attorney General from the process of clarifying ballot title language and providing authority to collect signatures
Impact: Protecting the Costitution

Referral to 2020 General Election Ballot seeks to:

• Set January 15 of election year as filing date for ballot title and petitions
• Set April 15 of election year as filing deadline for legal challenges
• Eliminates the signature cure period
• Increases required vote of legislature from simple majority to 60% to refer measures to the ballot
• Increases the number of counties from 15 to 45 (60%) from which a specific number of signatures are required

LABOR & EMPLOYMENT AND LEGAL ENVIRONMENT

Employment Law Enhancement HB 1751 - Act 853

Clarifies employment laws on wage payment and aligns certain Arkansas employment laws with federal laws
Impact: Legal protection for employers

Pre & Post Judgement Interest Rate Reduction SB 544 - Act 995

Lowers the interest rate on pre & post judgments from 10% per annum to the Federal Reserve primary credit rate plus 2% and in contract actions, the lower of contracted amount or new rate
Impact: Savings in court cases