Feb. 20: Arkansas Legislative Council

Representative Les Eaves Alright, members, if you could go ahead and take your seats. We’re on it. Representative Painter, if you could take a seat. Members, we are going to call ALC for the month of February to order. At this time I would like to recognize Senator Hammer, if you would, for the morning prayer. 

Senator Kim Hammer [Prayer]

Representative Les Eaves Thank you, Senator. Members, you have in your packet the minutes from last meeting. I need a motion to adopt the minutes from last meeting. We have a motion. Second. Any discussion? Seeing none, all those in favor say aye. Opposed? The ayes have it. Takes us down to item D. If we could get Dr. Silva for the revenue report. You don’t have to run. It’s OK. But I appreciate it. If you would just introduce yourself for the record and you can begin. 

January 2026 Revenue Report

Carlos Silva Thank you, sir. Carlos Silva, Bureau of Legislative Research. I’m staff. And today I’m here to present the January 2026 monthly revenue report. That’s our seventh month of this fiscal year. As we look into page number one, you see gross general revenue collections here today at $4.78 billion. That’s an increase of around $80 million for this fiscal year to date, or 1.7% above last fiscal year. 

As we look down on the bottom there on the page, you’re going to see our net general revenue available for distribution, which is $4.1 billion. That’s an increase of around $111 million, or 2.8% from last January 2025. And if you’re looking down there, you’re going to see GR, Highway, Casino Gaming. You see the large increase there. So that is due to, once they hit $31.2 million in GR, the money gets transferred out, got holed up in the sub-account until the end of the fiscal year. 

And then that got transferred to a highway transportation fund. So that’s why we see this increase here, doesn’t mean that has increased by 1,000%, has been faster, just because we have that flat holed up at $31.2 million. 

As we move to page number two, we’ll see our cumulative deviation from DFA net general revenue available for distribution forecast. And we’re going to be, at this month, $160.3 million above their forecast of May 2025. If you’re looking to the bottom of this report, or the last pages of this report, you’ll see the updated forecast from the agency that was done on January 30th of this year. 

So that has not been reset yet. That will be reset next month. So when you see next month, you will see the new forecast presented here. So this is, as of January, we have $160 million. On the original forecast, they had $185 million surplus before we had the 160. 

So this new forecast, DFA had a surplus of around $334 million, which I say will be reflected next month on how we’re going to reset here. That was done due to the sales and individual income tax that has grown faster than expected. 

And, of course, we have that shift on the individual income tax this year for around $41 million from fiscal year 25 to fiscal year 26. And we have the $32 million that have been collected by the individual that won the lottery. 

So we have some other things that have moved here. And as we move here to our page number three, in the bottom of it, you see casino and game taxes. That’s what I was talking about on the third to the last line there. You’re going to see $34 million versus $32 million, so that $2 million difference. That’s what I have seen. 

And with regards of any other major change, we have here page number four. The fourth line, you’re going to find penalties and court costs. You’ll see a large number change there. But that is due to some civil penalties of around $85,000 and lawsuit settlements from last year that have been higher. That’s why we have seen this change here. But with that, I will take any further questions related to this report. 

Representative Les Eaves Alright, members, any questions? All right, seeing none, there’s no action required. Dr. Silva, thank you for the report. Members, that takes us down to the report of the Executive Committee. I recognize my co-chair today, Senator Justin Boyd. 

Executive Subcommittee Report

Senator Justin Boyd Thank you, Mr. Chair. The Executive Subcommittee met yesterday and approved a waiver request for cooperative purchasing construction services for the Jackson County School District. This was an amendment to the request previously approved by the Executive Subcommittee in September of 2025. 

The subcommittee also heard an update from BLR Director Marty Garrity on the Bureau’s biannual independent audit, which had no findings. I move for adoption of this report at the proper time. 

Representative Les Eaves Thank you, Senator. Members, any questions on this report? Seeing none, Representative Boyd, you’re recognized for your motion. 

Senator Justin Boyd Motion to adopt this report. 

Representative Les Eaves All right, we have a motion. We have a second? Second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. Report is adopted. Thank you. That takes us down to item F1, Administrative Rules. I recognize Senator Dees at this time. 

Administrative Rules Report

Senator Tyler Dees Thank you, Mr. Chair. The Administrative Rules Subcommittee met on February 19th this week. The Subcommittee filed quarterly reports on administrative directives from the Department of Corrections and the Post-Prison Transfer Board. The Subcommittee approved one agency’s request for exclusion from the reporting requirements for rulemaking. 

The Subcommittee also accepted the recommendations of the Division of Public School Academic Facilities and Transportation concerning the extension of rules pursuant to Act 781 of 2017 and Acts 65 of 2021. 

The subcommittee received agency updates on outstanding rulemaking from the 2023 regular session and filed agencies monthly written updates on rulemaking for the 2025 regular session. At the agency’s request, two rules were pulled from consideration prior to the meeting and moved to the next meeting. 

All of the rules were reviewed and approved and noted in this report. Mr. Chair, I move for adoption of the report at the proper time. 

Representative Les Eaves All right. Thank you, Senator. Members, any questions on this item? All right. Seeing none, Senator you’re recognized for your motion. 

Senator Tyler Dees Move we adopt. 

Representative Les Eaves Hang on just a second. Okay, go ahead, Senator. You’re recognized for your motion. 

Senator Tyler Dees I move for adoption of this report. 

Representative Les Eaves All right, we have a motion. And second? Second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. It’s passed. That takes us to item 4. Representative Tosh, you’re recognized. 

Game and Fish Report

Representative Dwight Tosh Thank you, Mr. Chair. The Game and Fish State Police Subcommittee met on Wednesday, January the 21st. During that subcommittee meeting, we heard discussion on the federal immigration laws, wildlife management areas, and flyway federation, and also boating laws in Arkansas. 

The subcommittee met again this past Wednesday. During that meeting, we heard testimony regarding pit maneuver statistics and the process for decertification of law enforcement officers. Mr. Chair, I move for adoption of this report at the proper time. 

Representative Les Eaves Thank you, Representative. Members, any questions? Senator English, you’re recognized for questions. 

Senator Jane English Thank you, Mr. Chairman. The Hospital Medicaid and Developmental Disabilities Studies Subcommittee– 

Representative Les Eaves Hang on. We’re still on Game and Fish. Did you have a question on this topic? Okay. All right. Seeing no other questions, Representative Tosh, you’re recognized for your motion. 

Representative Dwight Tosh I move for adoption, Mr. Chair. 

Representative Les Eaves All right, we have a motion for adoption. We have a second. All those in favor say aye. Opposed? Ayes have it. Okay, Senator English, you are recognized to make your report. 

Hospital Medicaid and Disability Report

Senator Jane English Thank you. Thank you, Mr. Chairman. The Hospital Medicaid and Developmental Disability Study Committee met Thursday to hear testimony on the following items. The overview of current status of SNAP and update on the reimbursement rates under the Living Choices Assisted Living waiver by DHS. The subcommittee also discussed the final report provided by Georgia Center for Opportunity. I move for adoption of the report at the proper time. 

Representative Les Eaves Thank you, Senator. Members, any questions on this item? All right, seeing none, Senator, you’re recognized for your motion. 

Senator Jane English I move for adoption. 

Representative Les Eaves Okay, we have a motion to adopt. We have a second? Second. Any discussion? Seeing none, all in favor signify by saying aye. Opposed? The ayes have it. Report is adopted. Members, that takes us down to item 10. I believe Senator Wallace is giving that report. Occupational Licensing. All right, you’re ready? 

Senator Dave Wallace I am, sir. 

Representative Les Eaves Go ahead. 

Senator Dave Wallace The Occupational Licensing Review Subcommittee met on Thursday and received reports from various occupational authorization entities in group one. I move adoption of the report at the proper time. 

Representative Les Eaves Thank you, Senator. Members, any questions on this report? Seeing none, Senator, you’re recognized for your motion. 

Senator Dave Wallace And sir, I make a motion this report be adopted. 

Representative Les Eaves Okay, we have a motion to adopt the report. We have a second? Second. We have a second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. The report is adopted. That takes us down to the Peer report. I believe Representative Wardlaw is giving that report today. Representative Wardlaw, you’re recognized. 

Peer Report: Broadband focus

Representative Jeff Wardlaw The Peer Subcommittee met on Tuesday, February 17th. The subcommittee reviewed reports, reviewed requests, and approved the following various temporary appropriations, Infrastructure Investment and Jobs Act appropriations. On that one, members, you will see an updated spreadsheet sent to you next week. 

Members of Peer, the spreadsheet that they’ve been sending out is in arrear. You’re adopting this in forward for a quarter, so you should see the spreadsheet for that forward quarter. So that’s been corrected. We also had transfer requests. In there, there was some questions for the BEAD programs. So at this time, with permission of the chair, I’d call the broadband office to the table. 

Representative Les Eaves Could we get someone from broadband? When you get to the table, if you would, just introduce yourself for the record and we can get on with the questions. 

Glen Howie Glen Howie, State Broadband Director. 

Representative Jeff Wardlaw Thank you, Mr. Chair. Mr. Howie, it’s my understanding there’s some participants in the program that haven’t paid their local property taxes throughout the state of Arkansas to the tune of about $800,000 to $900,000 in about 10 counties included. 

They were not included in this month’s report, but there is pressure from their lobbyists and folks to get them included. Can you walk me through your guys’ standpoint on their tax delinquents and when we should see them in a report? 

Glen Howie Yeah, thank you, representative, for that question. No, you’re correct. There is a provider who is a provisional selectee in the program. However, they were not part of the 15 providers that we put forth this week because they have not met all of our check boxes, including what you’re pointing out. 

And so as I committed to on Tuesday and before in prior months, we will never bring a grant agreement– a provider to execute a grant agreement before you guys without we are fully evaluated them. They have not met those boxes, as you’re talking about, and so they have not been presented to this committee at this time. 

Representative Jeff Wardlaw So once you do bring them before us, and we know they’ve had delinquent property taxes for multiple years, my understanding is this goes back to 2022, how do we know that the grant dollars that you’re then giving them will not be spent on old bills and will be spent on building out new broadband opportunities for our constituents? So how do we audit that to make sure the money’s going to what we say it’s going to? 

Glen Howie And so, one, we would not bring that particular provider before this committee until there’s resolution on that issue. That’s number one. And number two is the way that the BEAD program is structured, the way our office will disburse funding is based on what’s called a fixed amount subaward. 

So in that particular process, disbursements go out to a provider only when they achieve actions. So as they build out and they hit certain percentages of locations and facilities are in the ground and people are getting connected, that’s when we pay them. So they are only paid when they perform their actions. 

Representative Jeff Wardlaw Mr. Chair, that’s all the questions I have. I’ll yield for the rest of the committee and then I’ll make the motion. 

Representative Les Eaves All right, thank you, Representative Wardlaw. Members, any other questions on this report? Seeing none, Representative Wardlaw, you’re recognized for your motion. 

Representative Jeff Wardlaw I’ll move for adoption. 

Representative Les Eaves All right, we have a motion to adopt. We have a second? We have a second. Any discussion? Seeing none, all in favor say aye. Opposed. The ayes have it. That passes. And that takes us to item 12. Representative Cavenaugh, you’re recognized. 

Revenue Committee Report

Representative Frances Cavenaugh Thank you, Mr. Chair. The Revenue Subcommittee met on Tuesday and reviewed methods of finance, one alternate delivery construction project procurement, discretionary grants, one ratification, service contracts, and received regular monthly reports. 

In addition to the regular review items, the subcommittee received one contract for review from the District 4 tire removal program. The subcommittee voted to hold consideration of this contract until next subcommittee meeting on March 17, 2026. Mr. Chair, I move for adoption of this report. 

Representative Les Eaves Thank you, Representative Cavenaugh. Members, any questions on this report? Seeing none, Representative Cavenaugh, you’re recognized for your motion. 

Representative Frances Cavenaugh I move for adoption of this report. 

Representative Les Eaves We have a motion to adopt. We have a second? Second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. Thank you. That takes us down to, I believe, Representative Beck for the State Insurance programs. You’re recognized. 

Insurance Report

Representative Rick Beck Thank you, Mr. Chair. The State Insurance Program Oversight Subcommittee met Wednesday, February 18th. The subcommittee reviewed the Employment Division, excuse me, Employment Benefits Division contract with the Boston Consulting Group. 

The subcommittee approved the following EBD items, the pharmacy formulary recommendations for December of 25, and for January of 26, and January of 2026. We also reviewed the medical drug recommendation for February of 2026. And with that, I move for adoption of this report. 

Representative Les Eaves Members, any questions on this item? All right, seeing none, Representative Beck has a motion to adopt. Do I have a second? Second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. All right, that takes us down to item 14. This would be the Personnel Committee. Representative Warren, you’re recognized.

Representative Les Warren Thank you, Mr. Chairman. The Personnel Subcommittee met Wednesday, February 18, in room A. The committee reviewed all items listed in the report. I will answer any question members may have and move to adopt the report at the proper time. 

Representative Les Eaves All right, members any questions? All right, seeing none, Representative Warren, you’re recognized for your motion. 

Representative Les Warren I move for adoption of the report. 

Representative Les Eaves Okay, we have a motion to adopt. We have a second? Second. Any discussion? Seeing none, all those in favor say aye. Opposed? The ayes have it. Members, that takes us down to item H. This is a review of communications. In your packet there is a presentation of a report from AID. If you would take a look at that for a second. I’ll need a motion to adopt that report at the proper time. Senator Rice, you’re recognized. 

Senator Terry Rice If we got somebody from AID that I could ask a question. 

Representative Les Eaves Yes sir, if we could get some down here from AID to answer a couple of questions. And members, just so you’re aware, I’ve skipped down to item H4 currently. We’ll go back to item H1 here momentarily. But gentlemen, if you would introduce yourself for the record, we can get on with Senator Rice’s questions. 

Jimmy Harris Jimmy Harris, Insurance Commissioner, State Insurance Department. 

Daniel Holland Daniel Holland, PBM General Counsel, State Insurance Department. 

Representative Les Eaves Thank you, Senator Rice. You’re recognized. 

Navitus and PBM updates

Senator Terry Rice Good morning, gentlemen. I appreciate you being here. I have a question here on the back page of this. Can you give us an update? It says Navitus Health Solutions has objected to providing data. Can you give us some updates? Has that changed? 

Daniel Holland No sir, that has not changed. We’re working on setting that matter for hearing at AID. Both the parties have briefed the issue. It’s about data from self-funded plans that we’re looking at in this affiliate pricing examination. We’ll get that set for hearing within the week or so and then finalize that issue. 

Senator Terry Rice Is there any other provider that is in the same boat? 

Daniel Holland No sir. 

Senator Terry Rice Just that one? 

Daniel Holland Yes, sir. 

Senator Terry Rice Okay, thank you. Thank you, Mr. Chair.

Representative Les Eaves Thank you, Senator. I’m going to recognize my co-chair, Senator Boyd, at this time. 

Senator Justin Boyd Thank you, Mr. Chair. Just making sure that you’ve seen that West Virginia fined Navitus $800,000 and you’re looking into that too. 

Daniel Holland I have. I’ve spoken with some PBM regulators in West Virginia about that. Yes, sir. I’m aware. 

Representative Les Eaves Thank you, Senator. Representative Beaty, you’re recognized. 

Representative Howard Beaty Thank you, Mr Chair. Kind of following up on that question, have y’all kind of had an internal meeting to decide what their pain threshold would be to comply with state law here in Arkansas and what it’s going to take for them to comply with state law in Arkansas? 

Daniel Holland I would say for the most part, they have complied. It’s more of an issue we’re disagreeing about whether or not a state can request this type of data. They are complying with the audit. I don’t want that to be the impression. But we are at a disagreement over this. 

Representative Howard Beaty What about the client’s always right? And the state’s the client, correct? 

Daniel Holland I definitely see your point. They have some– it’s a legitimate argument that they’re making. It’s within their power to object. And the state does have to give due process to all licensees. So that’s what we’re giving them at this point. 

Representative Howard Beaty Well, it’s been a problem from the rollout, even the way they rolled out the program in the very beginning. I still have heartburn over how that was done at the very beginning of the process. So I hope that y’all get some resolve on this. And I think this is something members of this committee take very seriously. So thank you. 

Representative Les Eaves Thank you, Representative. Representative Rose, you’re recognized. 

Representative Ryan Rose Thank you, Mr. Chairman, over here on your right. You just, and I’m paraphrasing, you just said something to the effect of that their objection carries merit or has validity or something along those lines. Could you just explain that to the committee briefly, why you believe that, what it is that you believe has merit? 

Daniel Holland Well, obviously, I disagree with their position here. My point there is that, again, we have to give due process to licensees. And when they bring up a legal argument about this, we have do address it, give them an opportunity to brief that particular issue, give AID, the state, an opportunity to do the same and respond and then let our hearing officer make a recommendation to the commissioner. So I very much disagree with their position here, but we have to give them due process, which is exactly what we’re doing here. 

Representative Ryan Rose Okay, so to paraphrase once again, you’re saying they need to have due process and more or less go through the process as opposed to saying that their objection carries merit. Am I interpreting that correctly? 

Daniel Holland I think so. Yes, sir. 

Representative Ryan Rose Okay, thank you. Thank you, Mr. Chair. 

Representative Les Eaves Thank you, Representative. Senator Boyd, you’re recognized. 

Senator Justin Boyd Thank you, Mr. Chair. So could you just clarify, there are five PBMs that are being audited, is that correct? 

Daniel Holland That’s correct. 

Senator Justin Boyd And four of the five are not making the argument that one of the five is? Is that correct? 

Daniel Holland It is. 

Senator Justin Boyd And do any of the other four PBMs have multi-million dollar contracts with the state of Arkansas, to your knowledge? 

Daniel Holland Not that I’m aware of. 

Senator Justin Boyd Thank you. 

Representative Les Eaves Thank you, Senator. Senator Hammer, you’re recognized. 

Senator Kim Hammer Thank you, Mr. Chair. With regard to being compliant with the laws that was passed, are they being compliant? And are you working within– you mentioned about due process– but the requirements of the law, are they compliant with it as it is now? 

Daniel Holland Well, that’s what we’re looking at in this examination. We’re conducting this examination to find out are they compliant with the law when it comes to affiliate pricing. And when I say that there’s merit to the argument, what I mean is that they have raised an objection, and we have to deal with that objection. 

I can’t just go back and tell them, sorry, you have to do this. Once they raise an objection in this process, due process concerns that we have to give them. But back to your question, yeah, that’s why we’re doing this examination to find out how compliant they are with Arkansas law. 

Senator Kim Hammer The four that Senator Boyd referenced though, they didn’t raise any objection like the one company did. Is that correct? 

Daniel Holland There’s been several objections throughout the process that have come from different PBMs. We’ve been able to work those objections out short of setting a public hearing and conducting all this briefing. This particular issue though with Navitus, we just weren’t able to come to any kind of agreement to move forward. 

Senator Kim Hammer Okay, and what is the one issue that they are, that you’re having to exercise due process over in handling? What is that issue that they are raising? 

Daniel Holland It’s providing some claims data for self-funded plans, which are normally– there’s an argument that can be made for self-funded plans that this is preempted by ERISA. That’s the argument that they’re making. The state and AID and myself, we disagree with that position. So that’s essentially what we’re fighting over at this point. 

Senator Kim Hammer And how long do you think the due process is going to take, 30 days, 60 days? You got to estimate or a timetable or flow chart as to how you think it’s going to play out and get to a conclusion where you’re going to have some resolve to it? 

Daniel Holland So again, this matter has been fully briefed. Counsel for Navitus and myself, yesterday approached the hearing officer, asked for a hearing date. At this point, we’ve asked for a hearing date in April. I haven’t heard back yet, but we should find out soon when that hearing day will be. And that will be the next step on the administrative level here. 

Senator Kim Hammer Okay, then the last question is this, who’s driving the conversation? Who’s driving the narrative? Who’s the driving force behind getting it done? Them, by their political maneuvering, or you, by inserting yourself to the full limits of what you have the power to do? 

Daniel Holland Well, so again, they can make these objections and then we have to deal with them in a certain way. As far as who’s driving the conversation, it was the state. It was AID who initiated these examinations. 

We’ve worked through all of the issues so far, but this was one that we just couldn’t come to an agreement on. But they certainly can hire attorneys and fight this at the administrative level. And we’ll just have to get a decision from the hearing officer and possibly from courts if they don’t like that decision. 

But this is something that’s within their– they have the right to do this and we have the authority to continue pushing and continue asking these questions during the examination. 

Senator Kim Hammer All right, thank you. 

Representative Les Eaves All right, thank you, Senator. Senator Irvin, you’re recognized. 

Senator Missy Irvin Thank you. Just providing a little bit more clarity for me. The issue at hand is that we are asking for claims data information on a self-funded plan that Navitus is in contract with a company, private company. 

Daniel Holland That’s correct. 

Senator Missy Irvin So the private company has contracted with Navitus to be their PBM to perform a duty. And we are asking for that contract to be breached? Because, well, it could be potentially, correct? 

I mean, if that information and that data of claims data on those employees of that private company is somehow protected by the contract between the company that hired Navitus, would that not be a potential breach of a contract? 

Daniel Holland No, absolutely not. This isn’t a contract issue. This is a federal law preemption issue. 

Senator Missy Irvin So we’re asking federal law, federal law preemption issue. But it’s based on the state law that was passed. 

Daniel Holland The examination itself is conducted under a state law. And federal law, in our view, does not preempt a state from asking for self-funded data in light of the Supreme Court’s decision in Rutledge. 

Senator Missy Irvin I just needed clarity. Thank you. 

Representative Les Eaves Alright, last question. Here we have Senator Love. You’re recognized. 

Senator Fred Love Thank you, Mr. Chair. And following up on Senator Irvin, because I’m just trying to figure– I’m trying to understand, like, what would be the specific reason why they would not want to turn over this data? I mean, is it any different than any other data that would be turned over from a plan that is not self-funded? I mean like, what really is the crux of their argument here? 

Daniel Holland So with, there’s essentially two buckets of insurance plans here. There’s fully insured and there’s self-funded plans. The Employee Retirement Security Act, the federal law, that typically governs the vast majority of aspects when it comes to self-funded plans. 

The Supreme Court in Rutledge in 2020 said that ERISA preemption is called. That still exists, but when it comes to cost states can regulate some of those areas. So the argument specifically is about can a state regulate this particular area of cost? So, for fully insured plans, can the state ask for this type of data for plans that are typically covered under ERISA? It is definitely a complicated issue. I’m happy to meet with you and we can talk through some of those details if that didn’t help. 

Senator Fred Love That would definitely help. So thank you. Thank you, Mr. Chair 

Representative Les Eaves Gentlemen, seeing no other questions, you’re excused. Thank you, we appreciate that information. Members, that takes us back up to item H1. This is Arkansas Teacher Retirement System. You have a review of an agreement in there and I’ll need a motion to file this as reviewed. Motion. Second? We have a second. Any discussion? Yep, I’m sorry, Senator Hickey, I was going a little too fast. You’re recognized, sir.

Senator Jimmy Hickey All right, I was trying to figure this out. I’m not for sure if I may own some stuff that’s a parent company of this. So I’m just going to say that I’m going to not vote on this because I can’t figure it out sitting here. 

Representative Les Eaves I understand. That’s noted. Thank you. All right, members, we do have a motion. We have a second. Any discussion? Seeing none, all in favor say aye. Opposed? The ayes have it. Members, there are a bevy of reports that are in your packet. You can take a look at those. There’s no action needed. 

So I’ll give you a minute to look at these. If you have any questions, let me know. Members, seeing no questions, there is no other new business, no other interim study proposals, no business carried over. Thank you for your participation. We are adjourned.