Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 875 of the Regular Session
 State of Arkansas                     As Engrossed:     H4/15/21
 93rd General Assembly                        A Bill
 Regular Session, 2021                                                             HOUSE BILL 1314
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 By: Representative Hillman
 By: Senator Hill
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                                   For An Act To Be Entitled
                 AN ACT TO AMEND THE WATER RESOURCE CONSERVATION AND
                 DEVELOPMENT INCENTIVES ACT; AND FOR OTHER PURPOSES.
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                                               Subtitle
                         TO AMEND THE WATER RESOURCE CONSERVATION
                         AND DEVELOPMENT INCENTIVES ACT.
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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        SECTION 1.        Arkansas Code  26-51-1005(b)(1) and (2), concerning the
 income tax credit for certain water impoundments under the Water Resource
 Conservation and Development Incentives Act, are amended to read as follows:
        (b)(1)       The tax credit allowed to each approved applicant shall not
 exceed the lesser of fifty percent (50%) of the project cost incurred or
 ninety thousand dollars ($90,000) one hundred twenty thousand dollars
 ($120,000).
                 (2)(A)     The amount of tax credit allowed to each approved
 applicant per project that may be used for a taxable year shall not exceed
 the lesser of:
                                 (i)    The amount of individual or corporate income tax
 otherwise due; or
                                 (ii)    Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
                          (B)   If the approved applicant is a pass-through entity
 such as a partnership, a limited liability company taxed as a partnership, a
 Subchapter S corporation, or a fiduciary, the amount of tax credit that may
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     As Engrossed:           H4/15/21                                                    HB1314
 be used for a taxable year shall not exceed the lesser of:
                                    (i)    The aggregate amount of individual or corporate
 income tax otherwise due by all members of the pass-through entity; or
                                    (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
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          SECTION 2.        Arkansas Code  26-51-1007(b), concerning the income tax
 credit for surface water conversion outside critical areas under the Water
 Resource Conservation and Development Incentives Act, is amended to read as
 follows:
          (b)(1)     The tax credit allowed to each approved applicant shall not
 exceed the lesser of ten percent (10%) twenty-five percent (25%) of the
 project cost incurred or twenty seven thousand dollars ($27,000) thirty-five
 thousand dollars ($35,000).
                   (2)(A)     The amount of tax credit allowed to each approved
 applicant per project that may be used for a taxable year may not exceed the
 lesser of:
                                    (i)    The amount of individual or corporate income tax
 otherwise due; or
                                    (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
                            (B)   If the approved applicant is a pass-through entity
 such as a partnership, a limited liability company taxed as a partnership, a
 Subchapter S corporation, or a fiduciary, the amount of tax credit that may
 be used for a taxable year shall not exceed the lesser of:
                                    (i)    The aggregate amount of individual or corporate
 income tax otherwise due by all members of the pass-through entity; or
                                    (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
                   (3)    Any unused tax credit may be carried over for a maximum of
 two (2) fifteen (15) consecutive taxable years following the taxable year in
 which the credit originated.
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          SECTION 3.        Arkansas Code  26-51-1008 is amended to read as follows:
          26-51-1008.        Credit granted  Surface water conversion within critical
 areas.
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     As Engrossed:       H4/15/21                                                    HB1314
      (a)     For projects located within critical groundwater areas and
 counties contiguous to counties with areas designated as critical ground
 water areas, there shall be allowed a credit against the tax imposed by the
 Income Tax Act of 1929,  26-51-101 et seq., to an approved applicant for the
 reduction of groundwater use by substitution of surface water for water used
 for industrial, commercial, agricultural, or recreational purposes.
      (b)(1)     For agricultural or recreational projects, there shall be
 allowed a tax credit to each approved applicant not to exceed the lesser of
 fifty percent (50%) of the project cost incurred or twenty seven thousand
 dollars ($27,000) thirty-five thousand dollars ($35,000).
               (2)(A)     The amount of tax credit allowed to each approved
 applicant per project that may be used for a taxable year may not exceed the
 lesser of:
                                (i)    The amount of individual or corporate income tax
 otherwise due; or
                                (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
                        (B)   If the approved applicant is a pass-through entity
 such as a partnership, a limited liability company taxed as a partnership, a
 Subchapter S corporation, or a fiduciary, the amount of tax credit that may
 be used for a taxable year shall not exceed the lesser of:
                                (i)    The aggregate amount of individual or corporate
 income tax otherwise due by all members of the pass-through entity; or
                                (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
               (3)    Any unused tax credit may be carried over for a maximum of
 two (2) fifteen (15) consecutive taxable years following the taxable year in
 which the credit originated.
      (c)(1)     For industrial or commercial projects, there shall be allowed a
 tax credit to each approved applicant not to exceed the lesser of fifty
 percent (50%) of the project cost incurred or one million dollars
 ($1,000,000).
               (2)(A)     The amount of tax credit allowed to each approved
 applicant per project that may be used for a taxable year may not exceed the
 lesser of:
                                (i)    The amount of individual or corporate income tax
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     As Engrossed:       H4/15/21                                                     HB1314
 otherwise due; or
                                (ii)   Two hundred thousand dollars ($200,000).
                        (B)   If the approved applicant is a pass-through entity
 such as a partnership, a limited liability company taxed as a partnership, a
 Subchapter S corporation, or a fiduciary, the amount of tax credit that may
 be used for a taxable year shall not exceed the lesser of:
                                (i)    The aggregate amount of individual or corporate
 income tax otherwise due by all members of the pass-through entity; or
                                (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
               (3)    Any unused tax credit may be carried over for a maximum of
 four (4) fifteen (15) consecutive taxable years following the taxable year in
 which the credit originated.
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      SECTION 4.        Arkansas Code  26-51-1009(b), concerning the income tax
 credit for land leveling for water conservation under the Water Resource
 Conservation and Development Incentives Act, is amended to read as follows:
      (b)(1)     The tax credit allowed to each approved applicant shall not
 exceed the lesser of ten percent (10%) twenty-five percent (25%) of the
 project cost incurred or twenty seven thousand dollars ($27,000) thirty-five
 thousand dollars ($35,000).
               (2)(A)     The amount of tax credit allowed to each approved
 applicant per project that may be used for a taxable year may not exceed the
 lesser of:
                                (i)    The amount of individual or corporate income tax
 otherwise due; or
                                (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
                        (B)   If the approved applicant is a pass-through entity
 such as a partnership, a limited liability company taxed as a partnership, a
 Subchapter S corporation, or a fiduciary, the amount of tax credit that may
 be used for a taxable year shall not exceed the lesser of:
                                (i)    The aggregate amount of individual or corporate
 income tax otherwise due by all members of the pass-through entity; or
                                (ii)   Nine thousand dollars ($9,000) Eighteen
 thousand dollars ($18,000).
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     As Engrossed:       H4/15/21                                                HB1314
               (3)    Any unused tax credit may be carried over for a maximum of
 two (2) fifteen (15) consecutive taxable years following the taxable year in
 which the credit originated.
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      SECTION 5.       Arkansas Code  26-51-1013(b)(1), concerning the annual
 compilation of credits and the total amount of credits that can be approved
 under the Water Resource Conservation and Development Incentives Act, is
 amended to read as follows:
      (b)(1)     When the total amount of tax credits used pursuant to the
 provisions of this subchapter exceeds ten million dollars ($10,000,000)
 twenty million dollars ($20,000,000) in any calendar year, the tax credits
 established by this subchapter shall expire on December 31 of the calendar
 year following the calendar year in which the tax credits used pursuant to
 the provisions of this subchapter exceeded ten million dollars ($10,000,000)
 twenty million dollars ($20,000,000).
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      SECTION 6. EFFECTIVE DATE.       This act is effective for tax years
 beginning on or after January 1, 2021.
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                                      /s/Hillman
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                                   APPROVED: 4/25/21
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Statutes affected: 
Old version HB1314 Original - 1-27-2021 12:57 PM: 26-51-1005(b), 26-51-1007(b), 26-51-1008, 26-51-101, 26-51-1009(b), 26-51-1011(c)
Old version HB1314 V2 - 4-15-2021 10:24 AM: 26-51-1005(b), 26-51-1007(b), 26-51-1008, 04-15-2021, 26-51-101, 26-51-1009(b)
HB 1314: 26-51-1005(b), 26-51-1007(b), 26-51-1008, 04-15-2021, 26-51-101, 26-51-1009(b)
Act 875: 26-51-1005(b), 26-51-1007(b), 26-51-1008, 04-15-2021, 26-51-101, 26-51-1009(b)