The Arkansas General Assembly is scheduled to convene for an Extraordinary Session on Tuesday, Dec. 7 at 10 a.m.
The Arkansas Constitution says Extraordinary Sessions, often referred to as special sessions, can only be called by the Governor. Governor Asa Hutchinson announced on Friday that he is calling the session to address tax cuts and several miscellaneous items of legislation.
The tax cut being proposed would lower the top income tax rate to 5.5 percent for tax year 2022 and gradually reduce the top rate to 4.9 percent for tax year 2025.
Currently, the top income tax rate is 5.9 percent.
The proposal would also gradually reduce the corporate income tax rates to 5.3 percent by tax year 2025. Taxpayers whose taxable income is at or below $23,600 and who timely file a tax return receive a $60 nonrefundable tax credit under the legislation. The latest general revenue report, released this week, shows year-to-date general revenue at $79.5 million or 3 percent above year ago levels.
The Governor is also expected to ask the General Assembly to transfer funds to the Restricted Reserve Accounts. State funds in various accounts throughout state government need to be transferred to Restricted Reserve Funds, the General Allotment Reserve Account, and the Quick Action Closing Fund. Another item is to approve appropriations for American Rescue Plan funds. This bill allows for more federal money from the American Rescue Plan to flow into Arkansas where it is needed. And Hutchinson also wants to consider expanding tax credits for an economic development project.
Article 6, section 19 in the Arkansas state constitution outlines the procedure for Extraordinary Sessions. It states the Governor must specify in the proclamation the purpose for which the General Assembly is convened. The General Assembly cannot take up any other businesses until every item in the proclamation has been addressed or dismissed. After that, the General Assembly can extend the session for up to 15 days to take up other matters with a 2/3 majority vote of both the House and the Senate.