The proposed bill, titled the "Sustainable Aviation Fuel Incentive Act," aims to establish tax incentives to promote the production and use of sustainable aviation fuel in Arkansas. It introduces a new subchapter under Arkansas Code Title 26, Chapter 51, which includes definitions for key terms such as "end user," "producer," and "qualified sustainable aviation fuel project." The bill outlines income tax credits for both end users and producers of sustainable aviation fuel, with specific provisions detailing the amount of credit available, eligibility criteria, and limitations on claiming these credits. Additionally, it mandates that any income tax credit must be accompanied by a cost-benefit analysis and an incentive agreement with performance criteria.

Furthermore, the bill proposes a sales and use tax exemption for utility services utilized in the production of sustainable aviation fuel, ensuring that the gross receipts from these services are exempt from state taxes. The exemption is contingent upon the utility services being separately metered and used exclusively for the production of sustainable aviation fuel. The Secretary of the Department of Finance and Administration is tasked with promulgating rules for the implementation and administration of these provisions. The effective dates for the tax credits and exemptions are set for tax years beginning on or after January 1, 2025, and the utility services exemption will take effect on the first day of the calendar quarter following the bill's enactment.