The proposed bill amends the Consolidated Incentive Act of 2003 to introduce a new "modernization and automation tax credit" aimed at encouraging investment by existing businesses in Arkansas. Key changes include the definition of "project costs," which now allows eligible costs to be incurred within four years or six years for projects qualifying for the new tax credit. The bill also specifies that applications for this tax credit must be submitted before incurring project costs, and only costs incurred after the commission's approval of the application will be eligible. Additionally, the bill outlines requirements for the financial incentive agreement, including maintaining payroll and employment levels and a forfeiture provision for any credits claimed if the agreement is breached.

Further amendments include increasing the minimum investment threshold for the tax credit from $5 million to $25 million and establishing that the maximum credit available in a fiscal year is $2 million. The bill also clarifies that the modernization and automation tax credit cannot be combined with other tax credits for the same project and sets forth that expenditures cannot qualify for both the modernization and automation tax credit and the increased tax refund for major maintenance and improvement projects. The effective date for these changes is set for October 1, 2025.

Statutes affected:
Old version HB1935 Original - 3-31-2025 04:15 PM: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)
Old version HB1935 V2 - 4-8-2025 09:41 AM: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)
HB 1935: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)
Act 882: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)