The proposed bill establishes the "Sustainable Aviation Fuel Incentive Act" in Arkansas, which aims to create tax incentives for businesses involved in the production of sustainable aviation fuel. It introduces a new subchapter in the Arkansas Code that defines key terms related to the act, including "incentive agreement," "new full-time permanent employee," and "qualified manufacturer of sustainable aviation fuel." The act outlines the criteria for businesses to qualify for an income tax credit, which is set at 30% of the costs associated with sustainable aviation fuel production and processing equipment. To be eligible, manufacturers must meet specific investment thresholds and obtain necessary certifications from state departments.

Additionally, the bill includes provisions for performance criteria and claw-back agreements to ensure compliance with the terms of the incentives. The income tax credits can be carried forward indefinitely if not fully utilized in a given tax year. The act is set to take effect for tax years beginning on or after January 1, 2025, and allows relevant state departments to promulgate rules for its implementation and administration.