The proposed bill, known as the "Access to Credit for Our Rural Economy (ACRE) Act," aims to amend Arkansas's income tax laws by providing income tax deductions for certain financial institutions, specifically those involved in agricultural lending. The bill introduces a new section to the Arkansas Code that defines key terms related to eligible lending institutions and qualified agricultural loans. It specifies that eligible lending institutions include national banking associations, state banks, state trust companies, and federal savings banks. Additionally, it outlines the criteria for what constitutes a qualified agricultural loan, including loans secured by real property used for agricultural production and those made on personal property for agricultural purposes.
Furthermore, the bill allows eligible lending institutions to deduct net interest income received from qualified agricultural loans when computing their net income for tax purposes. This deduction is in addition to other deductions already permitted by law. The provisions of this act will take effect for tax years beginning on or after January 1, 2025.