The Economic Development District Act of 2025 aims to create a structured framework for establishing economic development districts in Arkansas by introducing Chapter 177 to the Arkansas Code. This chapter defines key terms such as "economic development district" and "available funds," and outlines the roles of the Department of Commerce in supporting these districts. The bill details the process for creating a district, which can be initiated by local municipalities or counties, requiring a proposal that includes a map, a preliminary economic development plan, and an assessment of economic conditions. It also establishes a governance structure for the districts, mandating boards of five to nine members and ensuring transparency through annual audits and public access to financial records.

Additionally, the bill introduces provisions for financial oversight, allowing districts to impose property and sales charges, with specific conditions for increases. It permits the establishment of receivership under certain circumstances, such as insolvency, and prohibits bankruptcy filings. The legislation also outlines funding mechanisms, including exemptions from certain taxes and the ability to provide grants to support economic development projects. Furthermore, it establishes a process for applicants seeking abatements on property and sales charges, requiring detailed proposals and annual compliance reports. The act is set to take effect on January 1, 2027, contingent upon the adoption of Senate Joint Resolution 15 at the 2026 general election.