Worst 1-2 Banking News

The Lex Golden family steered a second bank holding company into bankruptcy court in July. The Chapter 11 filing for Allcorp Inc., parent company of Community State Bank in Bradley (Lafayette County), was followed two months later by regulators taking over Allied Bank of Mulberry (Crawford County).

The insolvency of Allied came 30 months after the Goldens took the $66.3 million-asset lender’s parent company, Acme Holding Co., into bankruptcy court.

Best Corporate News

Bank of the Ozarks Inc. announced the start of a new Little Rock corporate campus to accommodate its growing staff to support its expanding operations.

First-phase construction of a 180,000-SF building will nearly triple its existing office capacity. Occupancy at the current 92,000-SF headquarters was forecast to max out at 269 next year.

Worst Fraud Prosecution

The U.S. attorney’s office couldn’t prosecute a dead man, so they tried to convict his underlings. That was the backdrop for the government’s unsuccessful case against former One Bank executives Michael Heald and Brad Paul.

With the March 2013 death of One Bank’s owner, Layton “Scooter” Stuart, Uncle Sam went after his executive team.

The government went ahead with an unconvincing case against Heald and Paul after the duo refused to buckle to plea bargain pressure while maintaining their innocence and cooperating with prosecutors.

Ironic twist: Uncle Sam granted immunity to the man who most helped Stuart operate One Bank as his own personal piggy bank: Tom Whitehead, former chief financial officer.

Former Senior Executive Vice President Gary Rickenbach pleaded guilty to a much reduced charge of failing to report a crime and drew a sentence of probation. Only Alberto Solaroli, the Florida resident whose fraudulent $1.5 million loan from One Bank was the basis for all the charges, went to prison and only for a year.

Best Restaurant Resurrection

That looks to be Stoby’s, the beloved Conway restaurant heavily damaged by fire in March. The restaurant was razed, and now David Stobaugh, who owns the restaurant with his wife, Patti, is rebuilding at the same site and hopes to be open in spring 2017. Facebook reactions to the fire revealed heartbreak: “Will there be a chance to give back to Stobys? As in volunteering help to clean up, remove debris, etc.? If so, please post. I would volunteer in a heartbeat.”

Best Preview

Months before her use of a private email server contributed to Hillary Clinton’s presidential loss, journalist Ernest Dumas summed up her most persistent damaging trait.

“She always said things were nobody’s business,” Dumas told Arkansas Business, linking her “obsession” with privacy and secrecy to imbroglios that plagued her starting in her days as Arkansas’ first lady. Whitewater, Travelgate and the stolen emails were all examples of secrecy-related woes.

Dumas had examined the Rose Law Firm files on Madison Guaranty Savings & Loan, the thrift that failed under Jim McDougal in 1989. Madison became an issue in Bill Clinton’s 1992 campaign and a subject in the Whitewater investigation later.

“I saw all those records at the Rose Law Firm, and there was nothing there to be secret about,” Dumas recalled. “Maybe she was embarrassed for people to know the piddling little stuff she was doing for her legal fees.”

Worst Mix Heard on Air

After years of reporting on the Razorbacks, sportscaster Aaron Peters resigned from KNWA-TV in Rogers and KARK-TV in Little Rock in October after saying he had mixed prescription medication with alcohol and appeared briefly on the air.

Peters announced his resignation in a posting on Facebook, saying he had been “asked to step down.” On Oct. 12, he was seen briefly as the sports segment began, slurring his words and seeming intoxicated. The cameras cut away, and Peters said on his video post that he had “made a poor, poor judgment decision,” mixing prescription medication with alcohol between shows.

Peters concluded that it was time “to ponder what to do with the next chapter of my life.”

Best Political Activist

David Couch is a Little Rock lawyer who’s the force behind a number of voter initiatives in Arkansas that have sought to liberalize state law. Among them is this year’s successful Arkansas Medical Marijuana Amendment, which voters approved Nov. 8 by a margin of 53 percent to 47 percent. “The initiative is pure democracy,” Couch says.

Worst Source

Jason Shelby told a remarkable tale. He served 17 years in the Army, was shot three times in Afghanistan and was helped through recovery by driving for the ride service Uber. As odd as it sounds, the Bentonville resident told Arkansas Business in May, the first ride he gave was to a University of Arkansas student from Afghanistan, and the rider’s warm thanks for Shelby’s service had eased his anxiety. “From that point, I knew I was going to be OK.”

He went on to earn a master’s degree at UA, he said.

The only trouble is that the Army could find no record of a veteran by Shelby’s name with such a war record, and the UA could find no record of a degree being awarded to him. Shelby stood by his account of his service, but did not protest after an editor’s note on the discrepancies was published.

Worst Argument

Even Dennis Smiley Jr. rejected his own lawyer’s attempt to blame his victims during his sentencing hearing in January after pleading guilty to bank fraud.

W.H. Taylor of Fayetteville had argued for leniency in a sentencing memorandum by saying that banks should have been more vigilant in preventing Smiley’s scheme, which amounted to 55 fraudulent loans for approximately $6.3 million. U.S. District Judge P.K. Holmes III called it a “somewhat incredulous argument” and Smiley took full responsibility for his crime on the stand.

Holmes sentenced Smiley to 97 months in prison.

Best Buyback

John James started his career as an entrepreneur with Scrub Shopper, an online seller of medical apparel.

Scrub Shopper became one of several subsidiaries under Acumen Brands, the online retail company James founded in 2009. James left Acumen Brands in 2015 to start Hayseed Ventures, which partners with startup companies to help them become successful businesses.

In March, James bought Scrub Shopper back from Acumen Brands for at least $1 million — James declined to give the exact price. James hopes the still-profitable Scrub Shopper will be the foundation for Hayseed’s growth.

“We want to be the largest reseller of scrubs in the world,” James said. “That’s not a joke. That’s literally our plan.”

Worst Turnover

Dallas Cowboys running back Darren McFadden sued his former family friend and financial adviser, Michael Vick of Pulaski County. The Arkansas Razorbacks’ former star running back had given power of attorney to Vick. That decision backfired. McFadden, in the lawsuit, accused Vick of “gross incompetence, self-dealing and outright theft” of more than $15 million. Vick, who shares his name with a former NFL quarterback, has denied the allegations. The case is pending.

Best Startup Price

Wal-Mart Stores Inc. said in August it would spend $3.3 billion to buy the startup online retailer Jet.com of Hoboken, New Jersey.

Launched in 2015, Jet.com was a members-only online marketplace that was founded by Marc Lore, who was a co-founder of Quidsi, which is the parent company of Diapers.com. When Wal-Mart announced the purchase, few people had ever heard of Jet.com. Some retail watchers, though, praised the move and predicted it would be the spark the Bentonville retailer needs to boost its online sales. Others weren’t so sure. “It looks very irrational and desperate,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York.

Worst Exit Strategy

Three middle-aged women who had all worked for First National Bank of Lawrence County for decades smuggled out almost $4 million in cash between 2005 and 2015, covering up the shortage with timely transfers that depended on advance notice of routine audits. The only plan for getting away with it was apparently the suicide of one, who would then be blamed by the surviving conspirators — but her suicide attempt failed.

Peggy Sutton, Brenda Montgomery and Cindy Tate all received 51-month sentences after pleading guilty to bank fraud in U.S. District Court and were each ordered to pay $1.3 million in restitution.

Best Lawyering

U.S. District Judge Kristine Baker sentenced Montgomery and Tate to 57 months in prison for their embezzlement, and Sutton would have received the same sentence had her lawyer, Tim Dudley of Little Rock, not questioned a discrepancy between the plea agreement with federal prosecutors and the pre-sentencing report by the federal probation officer.

As a result, Sutton got a 51-month sentence and Baker similarly reduced the sentences for Montgomery and Tate.

Worst Transparency

When she was running for state auditor in 2014, Andrea Lea said, “Transparency should be the foundation of any public office.” But that was before she was sworn in.

While Arkansas Business was reporting on Lea’s granting of a no-bid contract to inexperienced, overpriced lawyers recommended by campaign contributor John Goodson, one of her former staff members alerted a reporter to the existence of emailed notes about staff meetings with lawyers who wanted the job.

Those emails had not been produced in response to the first Freedom of Information Act request because George Franks, Lea’s chief of staff during her first six months in office in 2015, took the notes and sent them from his personal email address to her personal email address, as she requested.

The emails were then released, and Arkansas Business reported assurances by spokesman Skot Covert that Lea used her personal email very little. That prompted Franks to produce text messages in which Lea repeatedly instructed him to use his private account to send emails about official state business to her private email address — instructions that continued for months after she took office in January 2015.

After those text messages surfaced, Lea said in an email to Arkansas Business, “I made a statement I believed was accurate but based on the texts, it appears I misspoke. … Moving forward, I am implementing a new communication policy for the office to avoid any appearance of impropriety.”

Best Cautionary Tale

On one side of a dispute is an ex-con who said he was attempting to improve his life. On the other side is a couple who went to his church. Both Mike and Gina Fullerton and ex-con Kristian Nelson claim to have been victimized by the other.

The dispute centered on Pinnacle Valley Road west of Little Rock, where Nelson grew up and the Fullertons live now, and where the three hoped to turn a former yoga studio into a restaurant and build an office building next door. The Pinnacle Valley Restaurant opened in 2015, but the office building never got past the slab.

Nelson sued the Fullertons and alleged they used his status as a convicted felon to keep him from getting an ownership interest in their joint business venture. The Fullertons denied the allegation and sued Nelson for filing a false lien. Both cases are pending.

Worst Halftime Speech

We don’t know what Bret Bielema and his coaching staff told the Arkansas Razorbacks while in the locker room with a 24-7 lead over the Missouri Tigers on Nov. 25.

Whatever the gridiron spiel, it should be banished from his playbook, never to be uttered again.

The worst team in the SEC East (2-6 and 4-8 overall) went on to win 28-24 when the Hogs failed to score in the second half.

Perhaps committing the halftime speech to paper with a cathartic burning and burial ceremony is in order.

No. 1: Trump Triumphant

In a presidential election like no other, Donald Trump proved all the naysayers wrong.

He overcame 16 Republican primary opponents and Democrat Hillary Clinton, the first woman atop a major-party ticket but also a veteran politico with a gold-plated resume married to one of the best retail politicians the United States has ever produced.

And, as the song says, Trump did it his way.

He was an unconventional candidate, to say the least. Remarks — on Mexicans, immigrants, an American POW, a disabled journalist, the family of a U.S. soldier killed in the Iraq War, Muslims, women — any one of which would have sunk any other candidate only seemed to reinforce his popularity among many.

And revelations — and Trump’s acknowledgement — that he’d avoided paying income taxes for years, along with allegations of shady business dealings and sexual assault, also failed to sway supporters.

Trump’s ideology is flexible and it veers from traditional Republican stands. His views have about-faced on immigration, foreign policy, health care, abortion. However, on a couple of issues he’s remained fairly firm: trade and entitlements. Trump supports international tariffs and has said he wouldn’t cut Social Security, Medicare or Medicaid.

What Trump, a real estate mogul, did that few other presidential candidates have been able to do in recent elections is connect with the crowd. The star (and executive producer) of the reality TV program “The Apprentice” and a consummate showman, Trump exploited his show business experience to successfully sell himself and his campaign, employing the slogan “Make America Great Again” and encouraging the use of simple, memorable chants like “Build the wall” (on the U.S. border with Mexico) “Lock her up” (Hillary Clinton) and “Drain the swamp” (the Washington power structure).

Trump also took full advantage of social media in the form of Twitter, bypassing media outlets — and political handlers — to reach out directly to voters, a practice that @realDonaldTrump has maintained since the election.

His supporters consider Trump an alpha male straight-shooter unconcerned with political correctness who is too rich himself to be beholden to oligarchic special interests. Trump understands his power, noting in January: “I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose voters.” And though one hopes his theory is never tested, he’s probably right.

Although much has been made of Trump’s defying almost all polling predictions to win the Electoral College and, hence, the election, he trailed Clinton in the popular vote, 62.8 million to her 65.4 million votes, more than President Barack Obama received in 2012. But Trump won in key states with big electoral totals: in the industrial states of Michigan, Wisconsin and Pennsylvania, states hit particularly hard by manufacturing’s decline.

In Arkansas, it was no contest at all. Trump got 60.6 percent of the vote in the November General Election; Clinton, who spent almost a dozen years as the state’s first lady when Bill Clinton was governor, 33.7 percent.

In the Arkansas General Assembly, the election gave Republicans an extra nine seats in the 100-member House, and after the election, three Democrats switched parties, giving the GOP a total of 76 in the House. Republicans also gained two seats in the 35-member Senate for a total of 26.

Victory has a way of reordering the universe and wiping slates — and memories — clean.

In February, Republican Gov. Asa Hutchinson told a Washington audience that the 2016 presidential election was a new phenomenon: “The entrance and the dominance of Mr. Trump on the stage and the way he really consumes the media is extraordinary.” The governor added that “the frustrations with Washington and the establishment has just created a different dynamic than we’ve ever seen before. … All of the criteria that we’ve used to evaluate candidates probably could be thrown out the window this year.”

A few days later, Hutchinson endorsed U.S. Sen. Marco Rubio of Florida for the GOP presidential nomination, saying it was “up to Arkansas to stop the Donald Trump show. The next generation of

conservatives cannot allow Donald Trump to take everything we stand for and throw it away.”

By March, with Trump winning Arkansas’ Republican primary, Hutchinson was saying he’d support Trump if he became the nominee.

By mid-June, after meeting with Trump, the governor said promoting conservative causes was more important than any difference he might have with the businessman, adding, “Anybody’s presidential who’s elected president.”

And by July, speaking before the Republican National Convention, Hutchinson proclaimed, “Donald Trump is the right leader for our time.”

The transition of President-elect Trump to President Trump continues with hardly less drama than the campaign: Calls are circulating for a congressional investigation of a Central Intelligence Agency assessment that Russian hacking was a deliberate effort to tip the election to Trump. Trump disagrees with the CIA’s findings.

The American electorate wanted change. We got it.

No. 2: Health Care in Transition

2016 was a rocky year for health care administrators in Arkansas, and though they worried about the future of Medicaid funding at the start of the year, they pushed forward with major construction projects throughout the state.

Uncertainty bedeviled the start of the year, with hospital administrators unsure if Arkansas’ hybrid Medicaid expansion plan, which had improved the bottom lines of their institutions throughout the state, would continue. Dan Rahn, chancellor of the University of Arkansas for Medical Sciences, warned in April that if the Medicaid expansion wasn’t funded, losses at UAMS could increase by tens of millions of dollars.

It all goes back to the Affordable Care Act, which, beginning in 2014, had expanded health insurance coverage in the United States. Although states had the option of expanding Medicaid using federal money, many states rejected that money. Arkansas, however, created the private option, which used federal Medicaid expansion money to buy private health insurance for Arkansans who earn too much for traditional Medicaid, but not enough to be eligible for federal tax credits on health insurance.

The federal government is paying for all of the cost of the expansion through 2016 and then will gradually decrease its share to 90 percent, leaving the state to pay 10 percent.

Gov. Asa Hutchinson’s plan, Arkansas Works, called for making modifications to the private option, but it still used federal money to buy insurance for the poor.

Arkansas Works faced two hurdles: The Legislature had to approve it in a special session. If it survived there, it then needed a supermajority vote of 75 percent in the state House and Senate in order to receive funding. It overcame both obstacles. Starting Jan. 1, the private option will be called Arkansas Works.

National politics, however, brings further uncertainty.

One of the many campaign promises President-elect Donald Trump made was that he would repeal and replace the Affordable Care Act, which he called a “total disaster.”

Across the country, monthly premiums for private insurance sold through government-run exchanges are ballooning an average of 25 percent starting in 2017. In Arkansas, the premiums on policies sold through the exchange to about 60,000 Arkansans are also climbing, an average 10 or 11 percent in 2017.

What’s more, several insurance companies have turned their backs on Obamacare, saying the exchanges are not profitable. In 2016, UnitedHealth Group said it wouldn’t sell insurance on the exchanges in 34 states, including Arkansas. And QualChoice Life & Health Insurance Co. of Little Rock is withdrawing coverage in certain counties in the state.

After November’s election, Hutchinson remained pragmatic. He said he would ask the Trump administration to approve even more changes to the Arkansas Works program, which covers more than 300,000 Arkansans, that the Obama administration had allowed.

Arkansas’ hospital landscape also was transformed in 2016. In September, the $150 million Baptist Health Medical Center-Conway began taking patients. And St. Bernards Medical Center in Jonesboro has started a four-phase, multiyear $130 million construction project.

In northwest Arkansas, Mercy Northwest announced in April it would spend $247 million over five years on projects that included expanding its Rogers campus and building clinics. Arkansas Children’s Hospital continued with its $167 million hospital project in Springdale, which was announced in 2015 and which is expected to open in January 2018. Washington Regional Medical System’s $65 million Women & Infants Center started taking patients in November.

Opening new facilities doesn’t necessarily mean profits will follow. In November 2015, CARTI opened its $88 million cancer center in west Little Rock. The nonprofit cancer treatment center experienced several one-time events that caused financial problems, and in 2016 it fell below the required debt-service coverage ratio on the $49 million bond issue that was used to build the four-story center. In September, Fitch Ratings Inc. of Chicago, which provides the credit rating for CARTI, lowered its rating on CARTI’s bond from BBB+ to BBB-, which is the lowest investment-grade rating. Fitch’s outlook remained negative.

No. 3 Big Projects Make the News

Steel in northeast Arkansas and wood in the southwest supplied raw material for big economic development news in 2016. Natural gas fueled big dreams in Pine Bluff.

Big River Steel began production at a $1.3 billion plant in March, planning to employ 425 workers eventually. State officials said 100 additional workers would be employed by businesses associated with the plant, the largest private investment ever in Arkansas. Nucor Corp. said it would add a $230 million cold mill to its Blytheville operations, predicting 100 new jobs and bringing Nucor’s payroll to about 1,800 area workers.

Meanwhile, nearly 250 miles away, officials announced plans for a $1.3 billion pulp mill near Arkadelphia expected to employ 250 workers by 2020. Shandong Sun Paper Industry of China will operate the plant, which is expected to pump up to $100 million a year into the economy, on 1,000 acres. As many as 1,000 additional jobs in the timber industry are expected in the plant’s supply chain.

What could be the state’s largest economic development endeavor ever is developing north of Pine Bluff. Energy Security Partners of Little Rock, led by Roger Williams and Arkansas figures Wesley Clark and Rodney Slater, plans a massive $3.5 billion plant for turning natural gas into diesel and jet fuel. A peak construction workforce of 2,700 and 225 long-term jobs are projected. The site was confirmed in September after the Jefferson County’s economic development team secured 1,100 acres with taxpayer money and leased the land to ESP, which is at work securing financing.

In October, Suzhou Industrial Park Tianyuan Garment Co., which makes clothing for Adidas, agreed to put a clothes factory in Little Rock, a $20 million commitment expected to bring 400 jobs. The project represents the first apparel company moving manufacturing from China to the United States, Gov. Asa Hutchinson said.

Intimidator Inc. of Batesville, which makes mowers and utility vehicles, revealed plans for a $12 million expansion to add 400 full-time employees over four years, giving it a workforce of more than 500. FMH Conveyors of Georgia hailed a $12.5 million material-handling factory in Jonesboro, creating 110 jobs.

Northwest Arkansas and the Fort Smith area were job-creation hotbeds, led by Mercy Northwest Arkansas’ announcement of a $247 million expansion and 1,000 new jobs by 2021 at its Rogers hospital and surrounding clinics. Simmons Foods Inc. of Siloam Springs planned to add 100 jobs at leased space in Fort Smith; Bekaert, maker of steel cord for tires, announced increased plant capacity for 100 new jobs; P.H. Glatfelter Co. announced a $12.5 million specialty paper and fiber facility, creating 83 jobs; and Elite Comfort Solutions said it would expand its production of flexible foam bedding and cushions in Fort Smith, adding 100 workers. Shared Services Center-Fort Smith, which supplies business office support in health care, also said it would add 100 jobs.

In the Little Rock area, an American Airlines subsidiary, Envoy Air Inc., said it would bring 60 new jobs to a $2 million aircraft maintenance facility; FedEx marked the grand opening of a 303,000-SF ground facility employing 175 people; and Sig Sauer Inc. finalized plans to move its Elite Performance Ammunition manufacturing to Jacksonville from Kentucky, creating 50 full-time jobs with more promised later.

No. 4: A Wild Ride For Energy

2016 was a roller-coaster year for the state’s energy industry, with fossil fuel companies seeking to rebound and clean energy projects on the upswing.

But since the presidential victory of oil-coal-and-gas-friendly Donald Trump and an OPEC decision to cut production, oil and gas prices have rallied.

As the year began, natural gas was swooning in Arkansas as a supply glut devastated prices and brought drilling to a virtual halt. Production plunged after a 10-year boom, and state severance tax collections fell by half.

Murphy Oil Corp. of El Dorado reported a 2015 net loss of $2.27 billion in January, and later froze top salaries. Layoffs came on top of 2015 job reductions, and dividends were cut. A sale of Canadian assets brought a second-quarter profit, and third-quarter losses moderated. Murphy’s retail fuel spinoff, Murphy USA, fared better, with its stock rising to near $70 a share in December, up from $60.78 on Jan. 4.

In February, Energy Security Partners, led by Roger Williams and Arkansans Rodney Slater and Wesley Clark, proposed a Jefferson County site for a $3.5 billion plant for turning natural gas into liquid fuel. Williams confirmed the site 10 miles north of Pine Bluff in September and said pre-engineering for the project, which would be the state’s largest economic development endeavor ever, has begun. He predicted he would have financing of “$100 million by the first of the year or early 2017.”

Arkansas’ solar-energy industry faced a crossroads. The Public Service Commission is reviewing rules for utility customers who produce their own power, with rate and rebate recommendations due from utilities, environmentalists and consumers by September 2017. Meanwhile, the state’s largest solar array went online in East Camden in March, supplying defense contractor Aerojet Rocketdyne and giving Ouachita Electric Cooperative Corp. a cushion for peak demand. Other cooperatives initiated smaller solar facilities, and Entergy Arkansas says a large field near Stuttgart could deliver power within two years. Scenic Hill Solar of Little Rock, led by former Lt. Gov. Bill Halter, and L’Oreal announced a multimillion-dollar deal to install 4,000 solar panels at the cosmetics giant’s factory in North Little Rock and 5,000 more on the roof of a Kentucky plant.

The Plains & Eastern Clean Line, a nearly $2 billion project to transmit Oklahoma wind power across Arkansas, advanced with federal approval in 2016 after an earlier state rejection and opposition from lawmakers in Washington. But the project faces a court challenge from opponents who allege the misapplication of federal power and an intrusion on local authority. Opponents also fear environmental damage and falling property values. U.S. Sens. John Boozman and Tom Cotton, as well as Rep. Steve Womack, are set to fight the power line anew after Trump’s inauguration.

Changes in Washington could also kill moves to shut down two coal-fired power plants owned by Entergy. The Sierra Club sought the shutdowns in February to meet Environmental Protection Agency clean air rules. Instead, Entergy plans to close the plants, in Jefferson and Independence counties, by 2028. Trump campaigned on curtailing the EPA’s power.

No. 5: Medical Marijuana Gets Voters’ OK

Arkansas became the 29th state and the first in the Bible Belt to approve the sale and use of marijuana for medicinal purposes.

Arkansas voters approved Issue 6, the Arkansas Medical Marijuana Amendment, on Nov. 8 by a margin of 53 percent to 47 percent. Another medical marijuana proposal, Issue 7, the Arkansas Medical Cannabis Act, was struck from the ballot by the Arkansas Supreme Court in late October for not having enough qualified signatures for the voter-initiated proposal.

The amendment passed despite opposition that included Gov. Asa Hutchinson, a former director of the federal Drug Enforcement Administration, and the Arkansas State Chamber of Commerce.

A medical marijuana proposal on the 2012 ballot had been narrowly defeated by Arkansas voters.

Hutchinson said he wouldn’t try to block the program’s implementation and designated $3 million of state funds to fund the startup.

The 2016 amendment calls for medical marijuana to be overseen by three government agencies: the Department of Health sets the guidelines for qualifying conditions and patients and the patients’ caregivers, the Medical Marijuana Commission will grant licenses to dispensaries and cultivation facilities, which will then be regulated by the Alcohol Beverage Control Division.

Hutchinson, President Pro Tempore of the Senate Jonathan Dismang and Speaker of the House Jeremy Gilliam named representatives to the commission on Dec. 7.

Hutchinson named Little Rock oncologist Dr. Ronda Henry-Tillman, who was designated chairwoman of the commission; Dismang named pain management specialist Carlos Roman of Little Rock and Dismang’s former chief of staff, James Miller of Bryant, while Gilliam named pharmacy executive Stephen Carroll of Benton and attorney Travis Story of Fayetteville.

The three agencies have until March 9 to announce their rules for running the medical marijuana program. The commission will begin accepting applications for dispensary licenses by June 1.

Hutchinson said he preferred that the dispensary and grower licenses be awarded through a lottery system similar to the way the state awards alcohol permits. He said that would prevent large companies from dominating the new industry.

State Rep. Doug House filed a bill that would postpone the agencies’ rules deadline until May and the start of dispensary applications until July 1.

The state Legislature has the authority to alter the amendment by a two-thirds vote if, according to the amendment, the changes do not affect the legalization of medical marijuana or the number of dispensaries created.

State Sen. Bart Hester said he is considering a bill to raise additional taxes on marijuana sales to offset his proposed $105 million tax cut.

No. 6: NWA Back to Boom Times

At the 22nd annual Business Forecast Luncheon in January 2016, Kathy Deck said northwest Arkansas was the economic star of the state.

The region added nearly 5,000 jobs in 2015 and Deck predicted it would add another 5,000 in 2016. While the exact statistics of 2016 haven’t been tabulated, it looks like it was another stellar year for northwest Arkansas, as Deck predicted.

“It continues to be nothing short of amazing,” said Deck, the director of the Center for Business & Economic Research at the University of Arkansas at Fayetteville. “The northwest Arkansas economy is very dynamic and it’s huge.”

According to the Arkansas Department of Workforce Services, unemployment in northwest Arkansas was less than 3 percent in September. The national rate was 5 and the state’s rate was 4 percent.

Most of the other economic metrics look strong.

Construction continues to be vibrant in the region. Commercial permits for Benton and Washington counties, the backbone counties of the area, amounted to $206.5 million in the first half of 2016. That figure is more than all of 2015, which had a total of $188 million. The first half of 2015 had $75.2 million in commercial permits; the first half of 2016 saw almost three times that total.

There were numerous big-ticket builds planned or put into construction in 2016. The region’s medical community was at the forefront with multimillion-dollar expansions announced or completed by Mercy Northwest Hospital, Arkansas Children’s Hospital and Washington Regional Medical Center. Hospitals are feeling the need to expand to better serve the area’s growing population.

That need to expand continues to be felt in northwest Arkansas’ residential segment, which has recovered to its prerecession levels. In Arvest Bank’s Skyline Report, there were nearly 1,600 residential building permits issued in the first half of 2016, an increase of 15 percent from the same period of 2015 in Benton and Washington counties. More than 4,300 homes were sold in the first six months of the year, an increase of 16 percent compared with the same span in 2015.

Construction of multifamily units continues strong in northwest Arkansas, thanks to a vacancy rate of just 2.4 percent in the first half of 2016. Fayetteville has three projects totaling nearly 1,110 units under construction, while Rogers and Bentonville have more than 800 under construction.

“If Little Rock is screaming hot, northwest Arkansas is screaming hot squared,” said Jerry Webster, president of Little Rock’s Webster Corp., an apartment broker.

No. 7: Infrastructure Landscape Changing

The central Arkansas infrastructure landscape has been in flux this year, with the Broadway Bridge closing, Robinson Center opening, interstate work and a few smaller public projects.

The bridge, which crosses the Arkansas River and connects Little Rock and North Little Rock, closed Sept. 28. The Arkansas Highway & Transportation Department’s $98.4 million plan is to replace the aging structure in six months.

The Robinson Center in Little Rock comes in at a close second to the bridge in being the most noticeable change. Its 28-month, $68.6 million renovation and expansion concluded Nov. 10.

Funded by a 2 percent advertising and promotion tax, the project included:

• A new ballroom and outdoor terrace overlooking the river;

• A complete reorganization of the back-of-house support areas;

• Performance hall improvements, including more acoustic volume, improved sight lines, bigger lobby spaces and restroom facilities and new box seating along the side walls; and

• Restoration of the building’s exterior.

Also completed this year were improvements to Interstate 40 between Conway and North Little Rock. The 22-mile, $117 million project took about four years and ended in April.

But little progress has been made on the $630.7 million project to expand the Interstate 30 corridor, including its bridge over the Arkansas River. A public meeting was held in April to present two plans: an eight-lane general purpose proposal and a six-lane with four collector/distributor lanes. Also proposed is moving the Cantrell Road interchange that brings drivers from I-30 into downtown Little Rock south to Fourth and Sixth streets.

The next step is for the plans to be honed and for a no-build alternative to be analyzed. The estimated construction timeline is 2018-22.

Other central Arkansas building and development news includes the Little Rock Technology Park’s nearly $7 million worth of phase 1 renovations. The Tech Park announced this month the first tenants moving into its permanent offices at 415 and 417 Main St., set to open March 1. The $100 million project will entail more than 600,000 SF spread over five phases; voters passed a half-cent sales tax in 2011 to provide $22 million for it.

In addition, a $6.2 million federal grant was awarded to the Little Rock Port Authority in August, a grant that will be used to add a new dock with direct dock-to-rail capability and new rail storage at the port’s Slackwater Harbor. That is expected to cost $10 million and take two years.

And in September, the Clinton National Airport learned it was getting a $5.9 million Federal Aviation Administration grant to help it improve 2,500 feet of the pavement of Taxiway A at Adams Field.

In the education sector are four schools that ranked among the state’s largest commercial building projects: the nearly complete $95.3 million North Little Rock High School; Robinson Middle School and Mills High School in Little Rock, weighing in at $37.6 million each; and the $33.3 million Pinnacle View Middle School in Little Rock.

No. 8: Bank Consolidation Continues

Bank consolidation was the biggest business story of 2015 and it continued into 2016, with some of the biggest banks in the state and some of the smaller getting in on the action.

Publicly traded Bank of the Ozarks in July overtook privately owned Arvest Bank as the largest bank chartered in Arkansas by completing two big bites that were announced in late 2015: an $800 million deal to buy Community & Southern Bank of Atlanta and the $402.5 million purchase of C1 Bank of St. Petersburg, Florida.

As of Sept. 30, BOZ’s total assets topped $18.4 billion, while Arvest, which hasn’t made an acquisition since 2013, reached $17 billion.

Centennial Bank, owned by publicly traded Home BancShares Inc. of Conway, remained a distant third at the end of the third quarter, with $9.75 billion in assets. But two more Florida acquisitions announced in the fourth quarter — Landmark Bank of Fort Lauderdale and Bank of Commerce of Sarasota — will add some $670 million in assets and allow Centennial to “crawl over $10 billion,” in the words of Chairman John Allison.

Simmons Bank, which converted to a state bank charter in April, acquired Trust Co. of the Ozarks of Springfield, Missouri, in February and then in September completed the acquisition of a Tennessee bank, Citizens National Bank of Athens.

Another Tennessee acquisition announced in the fourth quarter, First South Bank of Jackson, and Simmons’ biggest yet — a $564 million deal for $2.47 billion Bank SNB in Stillwater, Oklahoma, revealed last week — will combine to bring its assets above $10 billion as well.

Bear State Bank of Little Rock, the smallest of Arkansas’ four publicly traded banks with $2 billion in assets as of Sept. 30, acquired Metropolitan National Bank of Springfield, Missouri, in February.

Bear State also converted from a national to a state charter in 2016, as did Anstaff Bank of Green Forest. As the year draws to a close, the $444 million Anstaff Bank has applied to merge in $125 million Twin Lakes Community Bank, which Anstaff’s parent company, First National Bancorp Inc., acquired at the end of 2015.

Two more announced acquisitions were pending in December:

• First Community Bank of Batesville’s all-stock acquisition of Little River Bank in Lepanto; and

• Central Bank of Little Rock’s acquisition of Pinnacle Bank of Rogers.

And two small Arkansas bank charters disappeared completely in 2016:

• Allied Bank of Mulberry, $66 million in assets as of June 30, was shut down in September by bank regulators, who arranged an emergency acquisition by Today’s Bank of Huntsville, pushing its assets to $184 million as of Sept. 30.

• Community First Bank of Harrison, $469.5 million in assets as of Sept. 30, was acquired in November by $1.5 billion Equity Bank of Andover, Kansas.

No. 9: Goodsons’ Legal Controversies

Class-action attorney John Goodson of Texarkana and his wife, Arkansas Supreme Court Justice Courtney Goodson, dominated legal news in Arkansas in 2016.

John Goodson, a member of the University of Arkansas board of trustees, was sanctioned in August along with other attorneys for abusing the federal court system in a controversial class-action strategy first reported by Arkansas Business in December 2015.

Media attention to the case may have changed the way class-action cases are handled, and media attention to judicial elections — including Courtney Goodson’s unsuccessful run for a promotion — could change the way state Supreme Court justices are chosen in the future.

In January, weeks before voters statewide chose between Justice Goodson and Circuit Judge Dan Kemp of Mountain View to become the state’s chief justice, a three-part series in the Arkansas Democrat-Gazette examined the role of financial contributions to judicial campaigns and the appearance of favoritism shown by the state Supreme Court to a handful of law firms specializing in class-action cases. It found that John Goodson, his law firm and five out-of-state law firms were among the biggest campaign donors.

“Dark money” — spending on advertising by groups that can shield the identity of donors — favored Kemp, the ultimate victor. The influence of identified and unidentified donors contributed to a debate about whether popular elections are the best way to choose appellate judges, a system that Gov. Asa Hutchinson was already concerned about.

In November, the Arkansas Bar Association completed its draft of a proposed constitutional amendment to appoint justices to the state Supreme Court rather than have them elected.

Meanwhile, John Goodson’s method for litigating class-action cases was again being picked apart. U.S. District Court Judge P.K. Holmes III, the chief federal judge for the Western District of Arkansas, learned from Arkansas Business that a case that had been in his courtroom was dismissed in 2015 only to be refiled the next day in state court. (An earlier strategy that Goodson’s firm and others used to generate hundreds of millions of dollars in settlement fees was found to be illegal by the U.S. Supreme Court in 2013.)

Holmes said he never would have approved the settlement, which called for the plaintiffs’ attorneys to quickly receive $1.85 million while thousands of victims had to complete a claims process so onerous that, in the end, only 4 percent filed claims amounting to less than $300,000.

Holmes ordered 17 attorneys involved in the case to explain why they shouldn’t be sanctioned for abusing the court system, a step so rare that it drew attention from newspapers and legal publications nationally.

In August, Holmes reprimanded John Goodson and four other attorneys after finding bad faith and abuse of the court system in their manipulation of the case. Ten other attorneys were found to have abused the judicial process, but their misconduct didn’t rise to the level of bad faith, Holmes said, so they were not sanctioned.

The attorneys’ appeal of Holmes’ order is pending with the 8th Circuit.

The attention that the case has received is expected to make life harder for plaintiffs and attorneys as other judges have now been alerted to their techniques. One law professor said Holmes’ finding is likely to deter plaintiffs’ attorneys and defense attorneys from bailing out of federal court and filing in state court in the hope of getting better results.

Also in 2016, Arkansas Business reported that out-of-state attorneys recommended by John Goodson were given a no-bid contract by state Auditor Andrea Lea for a contingency fee nearly twice as high as other states have committed to pay in pursuit of unredeemed U.S. Treasury bonds that belonged to Arkansans. Goodson contributed to Lea’s campaign for office in 2014.

No. 10: White-Collar Crime

The land of fraud remained a popular domain for denizens of the private and public sector alike during 2016. A calendar sampling of white-collar crimes that generated federal prison time includes:

Jan. 8: Brenda Blair, 48, of Gentry is sentenced to 28 months after waiving indictment and pleading guilty to one count of wire fraud. Blair bilked Tyson Foods of more than $550,000 through illegal benefit payments.

Jan. 28: Dennis Smiley Jr., 52, is sentenced to eight years and a month for bank fraud. The former Arvest Bank executive pleaded guilty to a single count of bank fraud in connection with $5.3 million he obtained from 23 Arkansas lenders through forged signatures and fraudulent collateral.

Feb. 26: Alberto Solaroli, 61, is sentenced to 12 months and one day for money laundering and ordered to pay $120,000 in restitution. That represented a sweet plea deal after a grand jury penned a $1.5 million loan fraud indictment against him for ripping off Little Rock’s One Bank & Trust.

June 29: Andrew Melton, 69, is sentenced to seven years for using hundreds of thousands of dollars from ThermoEnergy Corp. to pay personal expenses. The former chief financial officer of the company was convicted of 12 counts of mail fraud and five counts of failure to remit $1.9 million in payroll taxes to the IRS.

July 25: Little Rock Dr. Robert Barrow, 63, is sentenced to two years for conspiring to commit health care fraud. Barrow swindled $680,000 from Arkansas Blue Cross & Blue Shield and more than $32,000 from dozens of patients.

Sept. 13: Dawn de Brantes, 48, is sentenced to 90 months for investment fraud conspiracy and tax fraud conspiracy. Daniel C. Olivares, her 34-year-old stepson, is sentenced to two years for investment fraud conspiracy.

The Clarksville pair were part of the ZeekRewards online Ponzi scheme, where she was chief operating officer and he was senior technology officer.

Oct. 5: Final sentencing for all three embezzlers at First National Bank of Lawrence County concluded with each defendant receiving 51-month sentences. Peggy Sutton, 61; Brenda Montgomery, 57; and Cindy Tate, 57; admitted to stealing more than $3.9 million from the Walnut Ridge bank during the course of a 10-year conspiracy.

Oct. 27: Ted Suhl, 51, is sentenced to seven years after his July conviction on two counts of fraud and bribery. The case involved Suhl using charitable donations to a West Memphis church to disguise payoffs to benefit his business ventures, which provided behavioral health services for youths.

Much of the money flowed through the 15th Street Church of God in Christ to Phillip W. Carter, 47, with a portion passed on to Steven B. Jones, 51, who both were sentenced in February after making plea deals.

Jones, a former deputy director of the Arkansas Department of Human Services and a former state legislator, was sentenced to two years and six months. Carter, 47, a former probation officer in Crittenden County and a former West Memphis City Council member, was sentenced to two years.

When Chris Bell launched his business 10 years ago, he envisioned it as an accounting firm to compete with the ones he had worked for since college. However, when he quickly began to notice the gaps in services many of his clients were experiencing, his entrepreneurial strategy shifted.

“I quickly realized the delivery of services from a traditional accounting firm was not what I felt like our clients needed,” he said. “I see so often where the accounting firm would ask a few questions, get some information, generate some reports and send them to the client and the client would toss them in the box and go on about their day.

“I believe that as a CPA that we should be, as our profession so often tags, our client’s trusted business advisor.”

Bell rebranded the firm Complete Consulting in 2008 to reflect this comprehensive approach and set about developing a network of fellow professionals for referring clients who needed services outside of his company’s core expertise.

“We understand that we’re not a jack of all trades; we’re not an expert in every one of those areas,” Bell said. “But, we believe that we have a strong enough network that when those needs are brought to us, we can coordinate those services on behalf of our clients to ensure that they’re getting the best advice and the best service as it relates to those products.”

Bell has grown the company to 10 employees, specializing in entities receiving public funds as well as professionals such as doctors and lawyers. The company also has a growing tax practice serving individuals of all walks of life. He said marketing the firm has come through a combination of traditional sales, expanding services performed for existing clients and partnering with his church to present money management seminars within the community.

On this latter point, he said in addition to enhancing the company’s name recognition and improving participants’ financial skills, community outreach helps re-shape perception of the professional network overall.

“One of the things I’ve noticed is that individuals and small businesses typically do not engage [business] professionals on a regular basis,” he said. “When they have a legal matter they go online and ask Google to represent them. When they have a financial need, they go to a tax preparer or a bookkeeper or they even go to their spouse and try to have them to resolve those problems for them internally. Often they will not go to a professional until something is completely broken.

“What we want to do is encourage those same individuals, those same small businesses, to engage the professionals early, much like the larger corporations do.”

Heartland Bank of Little Rock and its holding company, Rock Bancshares Inc., have entered a written agreement with the Federal Reserve aimed at improving their "financial soundness" even as a prominent borrower has filed for bankruptcy protection.

The Federal Reserve on Tuesday released the written agreement, which was signed on Dec. 13 by Judy Lawton, president of both Heartland Bank and Rock Bancshares. Within minutes of that release, Rock Bancshares issued a statement saying that many of the items addressed in the agreement "have either already been resolved, or progress is being made toward their resolution."

The $219 million-asset lender remains well capitalized, the statement said, with tier 1 capital of 11.46 percent ($27.9 million) as of Sept. 30.

Heartland, as Arkansas Business reported in September, and its lead shareholder, Walter Quinn, have suffered from the collapse of the oil and gas industry. Tuesday's statement from Heartland acknowledged as much, saying that "the request from the Federal Reserve to participate in this Agreement was expected based on challenges the bank has faced resulting from a limited number of troubled assets primarily related to the oil and gas industry."

The Federal Reserve action was made public a day after Heartland was mentioned by the Wall Street Journal as a creditor in the Chapter 15 bankruptcy of Platinum Partners Value Arbitrage Fund Ltd. of New York. The hedge fund has been described by federal prosecutors in New York as a $1 billion fraud and a "Ponzi-esque" scheme.

Five top executives of the fund were charged yesterday with securities fraud, conspiracy and other crimes in an eight-count indictment. The Securities & Exchange Commission also launched a civil case against the men.

According to court filings in the provisional liquidation case, Heartland entered into an August 2015 funding agreement of $7 million with a Cayman Islands fund associated with Platinum Partners. The outstanding balance of that debt was more than $7 million as of May 30.

Heartland, in its September 30 call report, said its noncurrent loans totaled nearly $31.2 million. (That number stood at almost $18 million a year earlier.) Meanwhile, its provision for loan losses at the end of the third quarter was $2.6 million.

In its statement on Tuesday, Rock Bancshares said Heartland's "positive earnings performance in 2015 and 2016 year-to-date has allowed the bank to address loan losses aggressively with minimal impact on capitalization."

Heartland posted net income of $237,000, a return on assets of 0.10 percent. Its earnings through the first three quarters of this year are $73,000, while it charged off $6.9 million in loans.

The bank paid out $4.55 million in dividends in 2015 and another $500,000 in the first quarter of 2016. The Federal Reserve agreement forbids Heartland or the holding company from declaring or paying any dividends without regulatory approval.

"The board and management understand and accept the Agreement and will work in full cooperation with the Federal Reserve as the bank returns to profitability and ensure that the company and the bank meet all requirements of the Agreement," the statement from Rock Bancshares concluded.

The Federal Reserve Bank of St. Louis announced Tuesday the following appointments, effective Jan. 1, to the board of directors for Little Rock and Memphis branches:

• R. Andrew Clyde, president and CEO of Murphy USA Inc. in El Dorado, to a three-year term on the Little Rock board.

• Millie A. Ward, co-founder and president of Stone Ward Advertising in Little Rock, to a three-year term on the Little Rock board.

• J. Brice Fletcher, chairman of First National Bank of Eastern Arkansas in Forrest City, to a three-year term on the Memphis board. His is a reappointment.

Ray C. Dillon, former president and CEO of Deltic Timber Corp. of El Dorado, will serve a chairman of the Little Rock board in 2017.

Also on the Little Rock board are Keith Glover, president and CEO of Producers Rice Mill Inc. in Stuttgart; Robert Martinez, owner of Rancho La Esperanza in De Queen; Charles G. Morgan Jr., president and CEO of Relyance Bank N.A. in Pine Bluff; and Karama Neal, COO of Southern Bancorp Community Partners in Little Rock.

John N. Roberts III, president and CEO of J.B. Hunt Transport Services Inc. in Lowell, was not among the appointments announced Tuesday but is the lone Arkansan serving on the St. Louis Federal Reserve Board of Directors.

It's almost the end of the year and with the Dow Jones Industrial Average up almost 15 percent you may be thinking of taking some gains to put in your Christmas stocking.

But before you hit the sell button, you might want to consider how you might keep even more of those gains by waiting just a few more days. Looking ahead to what could be 2017 tax law changes, you may want to review any sale of an asset for capital gain purposes for tax planning at an individual tax level for 2016 to see whether it could be more advantageous to report the sale in 2017.

Two plans are in talks to possibly be implemented early in 2017, one proposed by President-elect Donald Trump, and one proposed by Speaker of the House Paul Ryan.

Under the Trump plan, the current capital gain taxation structure of a tiered 0-20 percent tax rate on qualified dividends and capital gains based on the taxpayer's bracket would be retained. However, the plan would simplify the tax bracket structure for married filing jointly taxpayers to $0-$75,000 with a tax rate of 12 percent and capital gains rate of 0 percent, $75,000-$225,000 with a 25-percent tax rate and 15-percent capital gains rate and more than $225,000 with a 33-percent tax rate and 20-percent capital gains rate.

Instead of starting with a capital gains rate of 0 percent, the Ryan plan would start at 6 percent and top out at 16.5 percent. For married filing jointly taxpayers the brackets, tax rates and capital gains rate would be: $0 to $75,300 with a 12-percent tax rate and 6-percent capital gains rate; $75,300 to $231,450 with a 25-percent tax rate and 12.5-percent capital gains rate and $231,450 and up with a 33-percent tax rate and 16.5-percent capital gains rate.  

Most important, the Trump plan would also eliminate the 3.8-percent Net Investment Income Tax, which includes non-business capital gains, interest and dividend income, rental income and royalties. The elimination of the 3.8-percent tax could be the most important part of the equation since it would effectively reduce capital gains taxes next year even if the capital gains tax rate and income tax brackets and rates went unchanged.

In might be good to practice the same strategy of patience when selling as you did when buying. Waiting a few more weeks to book those gains may be the more prudent approach and could realize a greater return on your investments.

Sixty-five percent of business contacts in the Little Rock zone expect local economic conditions to be better or somewhat better in 2017, according to the latest Burgundy Book.

That's an increase of 17 percentage points from the same time in 2015 when contacts were asked about 2016 conditions.

The Burgundy Book is a quarterly review of economic information by the Federal Reserve Bank of St. Louis. The St. Louis district's Little Rock zone includes the majority of Arkansas, except the northeast part of the state. The population in the zone is about 2.5 million, including 710,000 who live in the Little Rock metropolitan statistical area.

This will be the final Burgundy Book. Next year, zone-specific anecdotal information will be included in a supplement to the Fed's redesigned Beige Book. The Beige Book is released eight times per year, and the next release will be Jan. 18

The zone’s unemployment rate averaged 3.9 percent in the third quarter, up slightly from a record low in the second quarter, according to the report. Jonesboro, included in a separate Memphis zone report, showed an unemployment rate of 3.4 percent.

Payroll employment growth was modest across the zone, faster than the national rate in Fayetteville but slower than the national rate in Little Rock, Fort Smith and Texarkana. Only 40 percent of contacts reported wages were higher or slightly higher year-over-year.

Employment in manufacturing continued to decrease in the third quarter, and transportation sector employment also dropped slightly.

Although single-family homes sales in Little Rock decreased during the third quarter, apartment rents have been increasing by about 2 percent. The vacancy rate has dropped to under 7 percent, with steady declines over the past four quarters.

Growth in house prices throughout the Little Rock zone has fallen behind the national average, but but, according to the Memphis zone book, Jonesboro saw single-family building permits grow at a relatively fast rate during the third quarter.

Per capita incomes in Arkansas are up 1.8 percent from one year ago, and mortgage debt balances have declined 1 percent. But the delinquency rate for automotive debt continued to increase for the Little Rock zone, reaching 3.5 percent in the third quarter, and credit card debt growth increased to triple the national rate.

In the agriculture industry, many Arkansas farmers are expected to experience another tough year because strong national row cop production is keeping prices low.  

WASHINGTON — Long-term US mortgage rates climbed again this week, hitting the highest levels since 2014.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Editor's Note: This is the first of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Here's a quick look at important employment issues that could arise next year.

Now that Arkansas is the latest state to have a medical marijuana law on the books, Arkansas employers must be prepared to address this issue.

Although the amendment to the Arkansas Constitution is effective immediately, it should take some time for most Arkansas residents to take advantage of the approved use of medical marijuana given the regulatory and administrative mechanisms that must be put into place. Arkansas has just 120 days to promulgate rules to implement the amendment.

Employment-Related Provisions

From an employment perspective, the new law allows "qualifying patients" who have "qualifying medical conditions" certain protections in the workplace.

For instance, employers:

1. Cannot "discriminate" against a person (that includes not hiring, disciplining, failing to promote or terminating one's employment) or otherwise penalize a person based upon that person’s past or present status as a "qualifying patient" or "designated caregiver";

2. Cannot discipline a "qualifying patient" for the medical use (which includes actual use or mere possession) of marijuana in accordance with the amendment if he or she possesses not more than 2 ½ ounces. Under the amendment, a rebuttable presumption exists that a "qualifying patient" is lawfully engaged in the medical use of marijuana if he or she A) is in actual possession of a registry identification card and B) possesses an amount of usable marijuana that does not exceed 2 ½ ounces;

3. Cannot discipline a "qualifying patient" for giving a permitted amount of usable marijuana to another "qualifying patient" for medical use if nothing is transferred in return;

4. Cannot discipline a "qualifying patient" for possessing marijuana paraphernalia to facilitate the use of medical marijuana; and

5. Cannot discipline anyone for giving a "qualified patient" marijuana paraphernalia to facilitate the use of medical marijuana.

"Qualifying medical conditions" presently include cancer, glaucoma, HIV/AIDS, amyotrophic lateral sclerosis, severe arthritis, posttraumatic stress disorder (PTSD), Tourette’s syndrome, hepatitis C, Crohn’s disease, fibromyalgia, Alzheimer’s disease, ulcerative colitis and any "chronic or debilitating disease or medical condition" with symptoms such as peripheral neuropathy, "intractable pain," seizures, "severe" nausea or "severe and persistent" muscle spasms. The Department of Health may add to this list in the future.

Significant Compliance Issues for Employers

Given this new law, how do you respect the rights of an employee who has permission to use medical marijuana, yet protect other staff and customers?

Answer: It depends on a variety of issues discussed below.

Are you a federal contractor? Federal contractors could have their hands full given the tug-of-war between federal and state law on this issue. Federal law still considers marijuana an illegal drug, although there are some legal prescription drugs, like Marinol, that contain THC or other marijuana derivatives.

For those of you who are federal contractors, you are in luck — most courts believe federal law preempts state medical marijuana laws on this issue. Still, if you decide you are a federal contractor, it would not hurt for you to seek guidance on the medical marijuana issue from the federal agency involved with the contract.

Differing obligations under the Americans with Disabilities Act and the Arkansas Civil Rights Act. Arkansas employers might have different obligations under the federal Americans with Disabilities Act (ADA) and the state Arkansas Civil Rights Act (ACRA), which mirrors the ADA in various ways.

For instance, while the ADA would not protect the use of medical marijuana by a person with a disability — it would consider it an illegal drug — the ACRA would not prohibit its use. So, you could face a situation in which it was perfectly legal to fire an employee under the ADA for medical marijuana use, but not legal under the ACRA, and chances are the ADA would not preempt the ACRA on this issue.

Perhaps the best approach to this issue is to think about medical marijuana like any other prescribed medication — what would you normally do if an employee was taking a prescription drug that could impact his or her ability to safely perform the essential functions of the job? Typically, you should have your HR manager (not the employee's direct supervisor) forward the relevant job description to the employee’s doctor and ask in writing A) whether the employee can safely perform the essential functions of the job, B) what is the duration of the health condition that requires the medical marijuana prescription and C) whether the doctor suggests any accommodations. We typically advise employers to allow the employee to take the written request for information to the doctor.

If the doctor raises concerns about the employee's ability to safely perform the essential functions of the job, you may have to consider an "accommodation" for the employee, such as leave while using medical marijuana or a transfer to a non-safety sensitive job.

The impact on workers' compensation claims. There are also implications under Arkansas' workers' compensation laws.

One particular statutory section that defines compensable injuries states, "The presence of alcohol, illegal drugs, or prescription drugs used in contravention of a physician's orders shall create a rebuttable presumption that the injury or accident was substantially occasioned by the use of alcohol, illegal drugs, or prescription drugs used in contravention of physician's orders."

In other words, there used to be a rebuttable presumption that a workplace injury was non-compensable if the employee tested positive for marijuana.

With the passage of the amendment, if medical marijuana use by an employee who is injured on the job is not inconsistent with a physician's orders, the previous presumption about the cause of the injury disappears. More injuries will be considered "compensable."

What Actions Can You Prohibit?

First, the new amendment does not require an employer to "accommodate the ingestion of marijuana in a workplace."

So, unlike the normal use of prescription drugs, Arkansas employers do not have to allow their employees to "light up" or otherwise use marijuana on their property. In fact, the amendment states that nothing in the new law permits a person to possess, smoke or use marijuana in a variety of locations, including schools, school busses, alcohol or drug treatment facilities, community or recreation centers, public transportation or any "public place."

Second, the new amendment does not require an employer to allow an employee to work "while under the influence of marijuana." Additionally, the amendment states that nothing in its text permits a person to undertake any task under the influence of marijuana "when doing so would constitute negligence or professional malpractice."

Finally, the amendment does not permit a person to operate, navigate or control any type of "motor vehicle, aircraft, motorized watercraft, or any other vehicle drawn by power other than muscle power" while under the influence of marijuana.

What to Do Now

Here is our list of things to do for now:

1. Take a hard look at your job descriptions, especially the ones you consider to be safety-sensitive. Update them as needed with the assistance of your employment lawyer.

2. For truly safety-sensitive positions, make it a requirement that an employee disclose to your HR manager or other senior manager that he or she is using medical marijuana or any other "regular" prescription drug that could impact the employee's ability to safely perform the essential elements of the job.

3. Make sure your handbook is up-to-date and include in it prohibitions against the use of medical marijuana at work and being under the influence of medical marijuana at work.

We suspect the Arkansas Department of Health or the General Assembly will fine-tune the amendment to help everyone understand their obligations, so stay tuned.

Additionally, we can’t be sure at this point whether the Trump administration will take a harder line on medical marijuana than the Obama administration. All sorts of questions remain about the provisions of the amendment, many of which seem contradictory.

(Stuart Jackson heads up the Labor & Employment Law team at Wright Lindsey Jennings in Little Rock.)

WASHINGTON — Congressional Republicans are planning a massive overhaul of the nation's tax system, a heavy political lift that could ultimately affect families at every income level and businesses of every size.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Editor's Note: This is the second of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Here's a quick look at important employment issues that could arise next year.

Since the Department of Labor has appealed the district court injunction of the overtime exemption rules that were scheduled to take effect earlier this month, the new rules are in limbo until the legal battle plays itself out (or the new presidential administration takes on the ultimate decision).

Faced with this uncertainty, relieved employers who were unprepared for the new overtime exemption rules may feel as if they are now excused from having to make any effort to comply with the new rules, and some employers who have already transitioned employees from exempt to non-exempt or increased employees' wages to meet the new salary level (i.e., $47,476 per year or $913 per week) may be considering whether they should roll back these changes.

In addition to the reasons employers should consider going through with a planned transition, employers who intend to wait until the dust finally settles before taking steps to comply with the new overtime exemption rules or who plan to roll back an already-implemented change, should consider the following:   

The overtime exemption rules could be enforced retroactively to Dec. 1, 2016. If the district court injunction is overturned on appeal or the rules are otherwise revised and implemented, employers may be held liable for any overtime worked by employees who would have been classified as non-exempt under the rules starting Dec. 1, 2016 — regardless of when the rules are eventually enforced and as if the injunction had never been issued. (Employers may want to consider tracking the hours of any employees who may be reclassified if the new rules are enforced.)

Employers are not required to roll back any changes implemented in anticipation of the new rules. For the sake of employee morale (and potential administrative resources/efficiency factors), employers should consider maintaining already-implemented wage increases.

Rollbacks of already-implemented changes could lead to discrimination claims. Employers should carefully review all roll-backs of employees' wages to ensure that adjustments are being applied consistently.

(Jane A. Kim is a partner at Wright Lindsey Jennings in Little Rock. Her practice centers on defending employers in state and federal court litigation, and providing guidance on workplace policies and agreements.)

Editor's Note: This is the third of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Here's a quick look at important employment issues that could arise next year.

Changes are coming to the EEO-1 form certain employers must file with the U.S. Equal Employment Opportunity Commission (EEOC).

Beginning with the 2017 EEO-1, private employers and federal contractors with 100 or more employees will have to supply additional information. The form will require summary pay data, which will set out the pay ranges of certain categories of employees. Individual employee pay information will not be required. But summary pay data for private employees will go to the EEOC and data for certain federal contractors — those subject to Executive Order 11246 — will go to the U.S. Department of Labor.

For years, employers have reported information on the EEO-1 form by job category, and then by sex and ethnicity or race. The summary pay data requirement is new for 2017, and must first be reported on the new EEO-1 that will be due on March 31, 2018. The EEO-1 form for subsequent years will be due on each March 31 thereafter.

The 2016 EEO-1 deadline was Sept. 30, 2016, so employers will have 18 months to prepare for the change. Employers subject to the EEO-1 filing requirement should receive a notice from the EEOC describing the new filing and deadline.

For employers who must file the revised EEO-1, the first step will be to count and categorize employees by EEO-1 job category. They will then calculate the number of employees in each of 12 pay bands on the new EEO-1, categorizing the employees in each band by sex and ethnicity or race. Finally, the new form requires the employer to report the total number of hours worked that year by the employees in each pay band.

According to the EEOC, the newly required information will assist the agency in evaluating Title VII charges of employment discrimination, especially as they relate to pay discrimination, since the agency does a statistical analysis of EEO-1 data early in its investigations.

More Scrutiny

What does this mean for employers? Basically, more scrutiny of your pay practices, so be ready to explain why two employees who have the same job, the same experience and the same performance make different amounts of money.

Employers might even decide to hire counsel to conduct attorney-client privileged pay audits.

(Troy Price is a partner at Wright Lindsey Jennings in Little Rock and an experienced appellate lawyer. In addition to focusing on ERISA and other employee benefits litigation, he is also recognized as an authority in First Amendment law.)

NEW YORK — Donald Trump's election as president has made many small business owners more upbeat about 2017.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Editor's Note: This is the fourth of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Below, a quick look at two important employment issues that could arise next year.

Momentum for ‘Ban-the-Box’ Continues to Grow

Last year I wrote an article about the "ban the box" movement — an initiative intended to prevent employers from learning about and considering the criminal history of an applicant in the early stages of the hiring process.

The initiative, which delays the background check inquiry, is intended to provide job applicants with a criminal record a more fair chance to make their qualifications known to prospective employers.

Momentum for the policy continues to grow with a total of 24 states now having adopted statewide policies, according to the National Employment Law Project. Additionally, nine states have now removed the conviction history question from job applications for private employers. Although Arkansas has not yet adopted a statewide policy, Pulaski County has now joined the movement by unanimously passing an ordinance removing criminal history questions from the county’s initial employment applications.

The stated purpose of Pulaski County Ordinance 16-1-29A, which took effect in August, is to assist in the “successful reintegration into the workforce of people with criminal records by removing barriers to employment and enhance the health and safety of the community by assisting people with criminal records to lawfully provide for themselves and their families.” The ordinance requires that background checks are delayed until after a conditional offer of employment is made.

If a background check reveals an offense, the county is required to conduct an individualized assessment that consists of a consideration of the nature and gravity of the offense, the time passed since the offense and the nature of the job.

If Pulaski County rescinds an offer of employment based on a finalist’s criminal history, the applicant must be provided with an adverse-action letter that specifies the deadline by which the applicant may contest the accuracy of the reported information or provide evidence of rehabilitation.

Attorneys with expertise in employment screening can help private sector employers who are considering the implementation of a ban-the-box policy. Human resource professionals should be prepared to discuss with counsel the company’s current hiring process and to provide documents that are involved in the hiring process, including employment applications, offer letters and adverse-action notices.

(By Regina Young, a partner at Wright Lindsey Jennings in Little Rock. Her active trial practice includes defending employers in federal and state court litigation and appeals. Email her here.)

Protected Concerted Activity Under the National Labor Relations Act

Recently, the National Labor Relations Board (the board) seems to be focusing more on violations of the National Labor Relations Act (the act) involving non-unionized employees.

That’s right, non-union employees as well as employees represented by a union are protected by the act. Under Section 7, employees have a right to engage in "concerted activities for the purpose of … mutual aid or protection" or "protected concerted activity."

Protected concerted activity involves two or more employees taking action for their mutual aid or protection regarding terms and conditions of their employment. The board’s concept of the type of conduct protected by Section 7 is broader than you might expect.

For example, an employee at a used car dealership in Yuma, Arizona complained to his manager about how sales commissions were being calculated. Later, the owner asked the employee to come to a meeting in the sales manager’s office.

During the meeting, the employee lost his temper and began yelling at the owner calling him a "f--king motherf--ker," a "f--king crook" and an "a--hole." He also told the owner he was "stupid" and stood up during the meeting, pushed his chair aside and warned the owner that if he was fired, the owner would "regret it."

The employee was fired by the owner for his conduct at the meeting. After reviewing the facts, the board concluded that the employee’s conduct was protected by Section 7 of the act and it was against the law for the owner to fire him.

In a similar case, an employee of a catering company became upset because he thought a supervisor had been disrespectful of his co-workers.

The employee posted on Facebook that the supervisor was "a nasty mother f--ker," a "loser," and said "f--k his mother and his entire f--king family."

When the posting was brought to the attention of the employer, the employee was fired. The board found that the employee’s Facebook posting was not so egregious as to lose protection under Section 7 of the act. The board ordered the employer to reinstate the employee and pay him full back pay.

Employers must be very careful how they deal with situations that could involve an employee engaged in protected concerted activity under the National Labor Relations Act.

Currently, the five-member National Labor Relations Board consists of only three members: two Democrats and one Republican. The two vacant seats will be filled by President-elect Trump, giving Republicans majority control.

But this does not mean that employers should expect immediate relief from what some would consider overreaching decisions by a board controlled by President Obama’s appointees.

(By John Davis, a partner at Wright Lindsey Jennings in Little Rock. He represents employers in labor and employment law matters and workers' compensation defense. He advises clients in connection with wage and hour issues, union activity, and employment policies and agreements. Email him here.)

WASHINGTON — Long-term US mortgage rates ticked up again this week, staying at their highest levels since early 2014.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Editor's Note: This is the last of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Below, a quick look at two important employment issues that could arise next year.

LGBT Rights in the Workplace: What's Next for Arkansas?

In the summer of 2015, the U.S. Supreme Court issued a landmark decision affecting the LGBT community, ruling that same-sex couples have a constitutional right to marry. While there were no such watershed LGBT decisions in 2016, several legal issues are working their way through state legislatures and the lower courts.

Title VII

For example, this year several federal courts considered whether to overturn years of precedent and adopt the U.S. Equal Employment Opportunity Commission’s (EEOC) position that Title VII’s prohibition against "discrimination because of sex" includes a prohibition against sexual orientation discrimination.

In oral arguments held in late November, the judges of the Seventh Circuit seemed inclined to rule that Title VII does cover sexual orientation discrimination. It seems inevitable that this question will ultimately have to be resolved by the Supreme Court. Like Title VII, the Arkansas Civil Rights Act (ARCA) does not list sexual orientation or gender identity as a protected class, but Arkansas courts have looked to Title VII when interpreting the ACRA. If Title VII is ultimately found to prohibit sexual orientation discrimination, we can expect plaintiffs to argue that the ACRA should be interpreted the same way.

At the agency level the EEOC under the Obama administration has identified sexual orientation and gender identity discrimination as an enforcement priority. Many have questioned whether that enforcement priority will change under the incoming Trump administration.

Transgender employees’ restroom access is another area in which legal challenges are working their way through the courts.

Bathroom Access

A bathroom access bill similar to the one passed in North Carolina is expected to be introduced in the 2017 session of the Arkansas General Assembly.

North Carolina’s controversial law requires people to use the restroom of the gender assigned to them at birth and is the subject of more than one pending lawsuit.

Some believe North Carolina’s governor lost his re-election bid at least in part because of the bathroom bill, which many business groups opposed. Should such a bill pass in Arkansas, we can expect national attention and reaction similar to that received by North Carolina.

(By Michelle Kaemmerling, a partner at Wright Lindsey Jennings in Little Rock. Her labor and employment practice focuses on employment and complex commercial litigation in state and federal court, and consumer class action lawsuits. Email here here.)

Immigration Law Compliance: Preparing for a Trump Administration

Donald Trump's victory in November has generated many questions for employers — what's going to happen to the Affordable Care Act, or the U.S. Department of Labor's new overtime rule? — but there is one area slated for change in which employers can prepare for now: immigration.

While Mr. Trump’s proposal for "an impenetrable wall" along the southern border has garnered the most attention, his other immigration policies likely will have a more direct and immediate impact for Arkansas employers.

As an employer you might be thinking, "Well, I don’t have any foreign workers, so changes in immigration policy won't affect me, right?" Wrong.

Trump has consistently stated that he wants to deter illegal immigration by "turning off the jobs and benefits magnet" that attracts foreign workers. In other words, he wants to crack down on businesses that employ people without work authorization.

This likely means more worksite enforcement visits from Immigrations and Customs Enforcement (ICE) to check whether there are workers employed without work authorization. Such visits commonly occur by ICE agents who arrive unannounced (or with very little notice) seeking to audit the company's I-9 forms.

To accomplish his goal of increased enforcement, Trump has proposed tripling the number of ICE agents. He's also suggested that E-Verify should be mandatory for all employers (keep in mind that E-Verify is separate from Form I-9; it does not replace it).

In short, employers need to be prepared for an increase in I-9 audits by a beefed-up ICE agency.

During an ICE audit, employers can find themselves in trouble not only if they have unauthorized workers, but (more commonly) because they did not properly prepare or maintain their I-9 forms for each employee. Penalties can be steep; fines generally start around $200 and go up to several thousand dollars per offense. In 2015, a California company was fined more than $600,000 because it failed to properly complete I-9 forms for its employees.

So what should employers do to get ready for a possible audit?

First, you must prepare. You definitely don't want to wait until ICE is on-site demanding to see your I-9 forms. Therefore, employers would be wise to conduct an internal I-9 audit to identify and correct potential problems now. In fact, an annual internal I-9 audit is on ICE's list of "Best Employment Practices."

If you need another reason to conduct an internal audit, keep in mind that you'll be given safe harbor if ICE discovers an unauthorized worker, but only if you have properly prepared and maintained your I-9 forms.

Unfortunately, audits can create more problems when employers choose to perform them themselves and then commit mistakes that lead to further violations. Common mistakes include filling out new I-9s for employees and throwing the old ones away, making revisions to I-9 forms without signing and dating the changes, and preparing new I-9 forms to correct mistakes and backdating them so they appear to be timely.

Even if these mistakes are "innocent," they can lead to stiff fines.

Therefore, the better practice may be to engage an outside firm to perform the audit, especially if it's the company’s first audit or if the company suspects there may be issues.

Employers can also use an external audit as an opportunity to update I-9 policies and to train compliance employees on proper procedures to prevent future mistakes.

While the future of employer regulations may be uncertain, conducting an internal I-9 audit is an easy step employers can take to ensure they are complying with both current immigration law and likely changes by the Trump administration.

(By Neemah Esmaeilpour, who heads up the immigration law practice at Wright Lindsey Jennings in Little Rock and is a member of the Labor & Employment team. Email him here.)

Dear Readers,

Last week Arkansas Business subscribers received the Book of Lists, in which we compile most of the business lists that we published throughout 2016. Lists like that — the biggest law firms or the highest-paid executives or the most profitable banks — appeal to the part of the human brain that likes to see data organized (especially the kind of data that can translate directly into business contacts and sales leads).

This week, for the third time, we offer a compilation that appeals to the universal interest in other people: all 50 of 2016’s Executive Q&A features in the first issue of Arkansas Business for 2017.

Executive Q&A is not hard-hitting journalism. We don’t set out to grill the executives who agree to answer questions for us. (In fact, if we suspect we need to grill someone, we don’t ask him or her to participate in this particular feature.) But we do look for a variety of subjects from all over Arkansas and from a broad cross-section of our state’s industries and institutions. We ask questions about the individual, his company and his industry or area of expertise. We try to ask questions that will elicit candid and enlightening answers, but, naturally, some people are more candid and enlightening than others.

I know the Executive Q&A is a popular feature with our readers, mainly because of the response that the executives themselves report after appearing in it. With this issue, you have an opportunity to catch up on any of the Q&A features that you missed.

Executive Q&A will continue throughout 2017. If you know of someone who would make a worthy subject, I’m all ears. Email me at GMoritz@ABPG.com.

Best wishes,
Gwen Moritz, Editor

Executive Q&A - 2016

BOSTON  — As marijuana shops sprout in states that have legalized the drug, they face a critical stumbling block — lack of access to the kind of routine banking services other businesses take for granted.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

WASHINGTON — After nine straight weeks of increases, long-term US mortgage rates fell this week.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

A new player has entered the financial fray at the dormant K Lofts development in downtown Little Rock.

Creek Capital Partners LLC of Fort Smith last month stepped to the front of the line of creditors by purchasing the project’s construction loan from IberiaBank of Lafayette, Louisiana.

The faces behind Creek Capital Partners: the Steve Creekmore Jr. family.

You might recall that four months ago IberiaBank sued to recover more than $1.4 million owed on an original June 2013 loan of $1.3 million to K Lofts LLC.

That debt bears the personal guarantees of Scott Reed of Portland, Oregon, and Brian Corbell of Los Angeles.

Another K Lofts creditor is Pulaski County Brownfields Revolving Loan Fund, which provided a $275,000, zero-interest loan for asbestos abatement.

Work on the renovated 115-year-old building at 315 Main St. remains incomplete six years after Reed trumpeted the mixed-use project.

The K Lofts contractor, Little Rock’s AMR Construction LLC, pulled off the job after April Fools’ Day 2015. The company has a lien claim of $196,440 divided between two contracts.

More than $143,700 of that is owed on the original $2.1 million contract to redevelop the upper floors of the once-dilapidated five-story building into 32 apartments.

The remaining $52,600-plus is owed on an $825,300 contract to repair a partial collapse of the east wall in 2013.

AMR filed a foreclosure action in June, and at last report, its dispute with K Lofts is in arbitration.