Beebe defers action on dubious tax break | Arkansas Blog

Thursday, March 13, 2014

Beebe defers action on dubious tax break

Posted By on Thu, Mar 13, 2014 at 11:41 AM

click to enlarge STUDYING: Beebe withholds action on one bill.
  • STUDYING: Beebe withholds action on one bill.
Gov. Mike Beebe has signed all the legislation from the fiscal session except HB 1048, which contains the almost certainly unconstitutional tax break for fracking sand added to the bill by fracking industry ally Sen. Jonathan Dismang. Could that mean a line-item veto is possible? Will the special interests stand for it if he does?

The amendment defines as "machinery or equipment" exempt from the sales tax:

(vi) Sand and other proppants used to complete a new oil or gas well or to recomplete, redrill, or expand an existing oil or gas  well." 

It's a whopping tax break adopted without the necessary super majority to consider non-budget items in a fiscal session. The state is planning to appeal a dubious circuit court ruling that has already held that sand is equipment. A lawsuit over Dismang's amendment is a virtual laydown on procedural grounds, though the legislature might presumably be of a mind to ratify it by more legal means in 2015. It's abusive use of special language, yet again, in the name of helping a special interest. Nothing to see here, in other words. Business as usual.

Will Beebe wield a line-item veto pen? Would the legislature, when it convened to adjourn next week muster a veto override, which requires only a simple majority? Is the fracking industry, already profiteering mightily in Arkansas thanks to a low severance tax, inadequate contribution to road repair and inadequate environmental oversight, really that powerful?

Don't answer.

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