15-1-101. Economic Advisor.

1. There is established within the office of the Governor the position of Economic Advisor, to be appointed by and serve at the pleasure of the Governor.
2. The advisor shall confer and advise with the Governor on all matters pertaining to the economy of this state.
3. On instruction of the Governor for further economic advancement, the advisor shall:
   1. Advise and confer with all state agencies having responsibilities for planning, publicity, promotion, and development of the industrial and economic advancement of this state so that the programs are coordinated into a maximum effort of promoting the industrial and economic growth of the state;
   2. Evaluate and advise the Governor with respect to all aspects of the state's industrial development program, of the effectiveness of various efforts of the program, and of means of improving it;
   3. Confer and advise with the various private organizations and groups of this state representing agriculture, labor, industry, trade and commerce, finance and banking, and other areas of economic interests to the extent that the Governor might be fully advised of all aspects of economic activity in the state and be kept informed of means whereby the State of Arkansas might aid and assist in promoting greater economic expansion and growth; and
   4. Perform such other duties with respect to the development and coordination of the state's industrial and economic expansion efforts as the Governor may direct.

History. Acts 1965, No. 103, § 1; A.S.A. 1947, § 12-301.

15-1-102. [Repealed.]

Publisher's Notes. This section, concerning a state rural development study commission, was repealed by Acts 2005, No. 1962, § 55. The section was derived from Acts 1989, No. 704, §§ 1, 2.

15-2-101. Enactment and text.

The Southern Growth Policies Agreement is hereby enacted into law and entered into by this State with all other states legally joining therein in the form substantially as follows:

SOUTHERN GROWTH POLICIES AGREEMENT

Subchapter 1 — Division of Science and Technology of the Arkansas Economic Development Commission

Publisher's Notes. Acts 1985, No. 409, § 19, provided that it was the intention of the act to amend only those parts of Act 859 of 1983 as were specifically mentioned and that the remainder of the 1983 act would remain in full force and effect.

Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 76, substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in the subchapter heading.

Preambles. Acts 1983, No. 859 contained a preamble which read:

“Whereas, science and technology have made significant contributions to improving the quality of life and the providing of technological advancements in a broad spectrum of human endeavor and activities benefitting people throughout the world that were unknown or unavailable to mankind only a few generations ago; and

“Whereas, it is well-recognized that if the State of Arkansas and its people are to participate in and enjoy the benefits to be gained from continued improvements in science and technology, the government of this State must take immediate and bold steps to establish the necessary organizational structure and authority to enable this State to gain the benefits of advanced science and technology for its people; and

“Whereas, the vast agricultural capacities of this State, its broad variety of natural resources, its climate, and the resourcefulness and energy of its people offer an opportunity for the State of Arkansas to play a role in efforts to gain for this State the benefits of advanced science and technology;

“Now, therefore… .”

Effective Dates. Acts 1975 (Extended Sess., 1976), No. 1035, § 3: Jan. 27, 1976. Emergency clause provided: “It is hereby found and determined by the Seventieth General Assembly, meeting in Extended Session, that the standardization of mileage reimbursement for members of the state's Boards and Commissions will alleviate many discrepancies and inequities in existing laws and will allow such members to receive travel reimbursement commensurate with that paid to state employees. Therefore, an emergency is hereby declared to exist, and this act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1985, No. 409, § 20: Mar. 19, 1985. Emergency clause provided: “It is hereby found and determined that there is an urgent need to promote the establishment of high-technology industries within the State of Arkansas and, further, to support basic and applied research in Arkansas colleges and universities; that the Arkansas Science and Technology Authority as presently constituted lacks some of the powers necessary to meet those needs; and that the amendment of The Authority's enabling legislation will permit it more effectively to carry out the purposes for which it was established. Therefore, an emergency is hereby declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety, shall be in full force and effect, from and after its passage and approval.”

Acts 1987, No. 210, § 4: Mar. 13, 1987. Emergency clause provided: “It is hereby found and determined by the General Assembly that it is essential to the technological development program of this State that small businesses be rendered all possible assistance in their efforts to fund research and development programs, and that the Arkansas Science and Technology Authority be given specific powers to render such assistance. Therefore, an emergency is hereby declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1987, No. 862, § 3: Apr. 13, 1987. Emergency clause provided: “It is hereby found and determined by the General Assembly that because of the case Ricarte v. State, CR 86-31, a question has arisen over the validity of Act 1035 of the Extended Session of 1976; that this Act is a reenactment of the former law; and that the immediate passage of this Act is necessary to clarify the state of the law on this issue. Therefore, an emergency is hereby declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1989, No. 271, § 5: Mar. 1, 1989. Emergency clause provided: “It is hereby found and determined by the General Assembly that the State of Arkansas has experienced severe deficiencies in the development and promotion of product and process technologies which have the potential to contribute significantly to the business and economic growth of the State. Therefore, an emergency is declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1989, No. 803, § 9: Mar. 21, 1989. Emergency clause provided: “It is hereby found and determined by the General Assembly that the economy of the State of Arkansas is suppressed in many areas creating a lack of business opportunities and promoting unemployment. The provisions of this Act are necessary to help promote economic stability and productivity. Therefore, an emergency is declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1995, No. 586, § 8: Mar. 13, 1995. Emergency clause provided: “It is hereby found and determined by the General Assembly that establishment of qualified medical companies in this State will result in numerous benefits including industrial diversification, broadening of the economic base, the creation of jobs and benefits to the residents of this State through new products and processes; that this Act would provide assistance to qualified medical companies and at the same time create benefits to the State and its residents; that this Act would make state law concerning qualified medical companies' net operating loss carry forward provisions compatible with the Internal Revenue Code of the United States; and that the need for the assistance set forth in this Act is necessary in order to provide for assistance to qualified medical companies. Therefore, an emergency is hereby declared to exist and this act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 250, § 258: Feb. 24, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly that Act 1211 of 1995 established the procedure for all state boards and commissions to follow regarding reimbursement of expenses and stipends for board members; that this act amends various sections of the Arkansas Code which are in conflict with the Act 1211 of 1995; and that until this cleanup act becomes effective conflicting laws will exist. Therefore an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governer [sic], it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-3-101. Definitions.

As used in this subchapter:

1. “Applied research” means any activity which seeks to utilize, synthesize, or apply existing knowledge, information, or resources to the resolution of a specified problem, question, or issue;
2. “Basic research” means any original investigation for the advancement of scientific or technological knowledge;
3. “Construct” means to acquire or build, in whole or in part, in such manner and by such method, including contracting therefor, and if the latter, by negotiation or bidding upon such terms and pursuant to such advertising as the Arkansas Economic Development Commission shall determine to be in the public interest and necessary, under the circumstances existing at the time, to accomplish the purposes of and authorities set forth in this subchapter;
4. “Enterprise” means a business with its principal place of business in Arkansas and which is or proposes to be engaged in this state in manufacturing, research, and development, or the provision of services involving a significant amount of technology;
5. “Equip” means to install or place on or in any building or structure equipment of any and every kind, whether or not affixed, including, without limiting the generality of the foregoing, building service equipment, fixtures, heating equipment, air conditioning equipment, machinery, laboratories, scientific equipment, furniture, furnishings, and personal property of every kind;
6. “Facilities” means any real property, personal property, or mixed property of any and every kind that can be used or that will be useful in securing or developing industry, including science and high-technology, including, without limiting the generality of the foregoing, rights-of-way, roads, streets, pipes, pipelines, reservoirs, utilities, materials, equipment, fixtures, machinery, furniture, furnishings, instrumentalities, and other real, personal, or mixed property of every kind;
7. “Industry” shall include, but not be limited to, manufacturing facilities, warehouses, distribution facilities, repair and maintenance facilities, agricultural facilities, and corporate management offices for industry;
8. “Initial capitalization” means financing that is provided for the development, refinement, and commercialization of a product or process and other working capital needs;
9. [Repealed.]
10. “Lease” means to lease for such rentals, for such period or periods, and upon such terms and conditions as the commission shall determine, including, without limiting the generality of the foregoing, the granting of such renewal or extension options for such rentals, for such period or periods, and upon such terms and conditions as the commission shall determine, and the granting of such purchase options for such prices and upon such terms and conditions as the commission shall determine;
11. “Qualified security” means any note, stock, treasury stock bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, preorganization certificate or subscription, transferable share, investment contract, certificate of deposit for a security, certificate of interest or participation in a patent or application therefor, or in royalty or other payments under such a patent or application or, in general, any interest or instrument commonly known as a “security” or any certificate for, receipt for, guarantee of, or option, warrant, or right to subscribe to or purchase any of the foregoing, provided that in the valuation of “qualified security”, no value shall be placed on in-kind services;
12. “Scientific and technological project” means a project undertaken in Arkansas by an enterprise, which project the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission shall have determined promotes the purposes of this subchapter and otherwise benefits the state and its citizens; and
13. “Sell” means to sell for such price, in such manner, and upon such terms as the commission shall determine, including, without limiting the generality of the foregoing, private or public sale, and if public, pursuant to such advertisement as the commission shall determine, sell for cash or credit payable in lump sum or installments over such period as the commission shall determine, and if on credit, with or without interest and at such rate or rates as the commission shall determine.

History. Acts 1983, No. 859, § 19; 1985, No. 409, § 17; A.S.A. 1947, § 6-1619; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2017, No. 374, § 1.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 deleted former (2), (4), (6) and (17) and redesignated the remaining subdivisions accordingly; substituted “commission” for “authority” throughout present (3), (10), and (13); and substituted “Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “board” in present (12).

The 2017 amendment repealed (9).

15-3-102. Construction.

1. This subchapter shall be liberally construed to accomplish the intent and purpose thereof and shall be the sole authority required for the accomplishment of such purposes.
2. To this end, it shall not be necessary for the Division of Science and Technology of the Arkansas Economic Development Commission to comply with general provisions of other laws dealing with public facilities and equipment, their acquisition, construction, leasing, encumbering, or disposition.

History. Acts 1983, No. 859, § 20; 1985, No. 409, § 18; A.S.A. 1947, § 6-1620; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (b).

15-3-103. Establishment of the division.

There is established for the State of Arkansas the Division of Science and Technology of the Arkansas Economic Development Commission, which shall have the powers, functions, and duties, as provided in this subchapter, to be the instrumentality of this state to exert leadership in and to give direction to a broad spectrum of programs and services designed to gain for this state and its people the benefits and opportunities to be realized through advanced science and technology.

History. Acts 1983, No. 859, § 1; 1985, No. 409, § 1; A.S.A. 1947, § 6-1601; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

A.C.R.C. Notes. Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 62, provided:

“Transfer of the Arkansas Science and Technology Authority.

“(a)(1) The Arkansas Science and Technology Authority is transferred to the Arkansas Economic Development Commission by a type 2 transfer under § 25-2-105.

“(2) For the purposes of this act, the commission is the principal department under Acts 1971, No. 38.

“(b) The statutory authority, powers, duties, functions, records, personnel, property, unexpended balances of appropriations, allocations, and other funds, including the functions of budgeting or purchasing, of the authority are transferred to the commission, except as specified in this act.

“(c) The prescribed powers, duties, and functions, including rulemaking, regulation, and licensing; promulgation of rules, rates, regulations, and standards; and the rendering of findings, orders, and adjudication of the authority are transferred to the executive director of the commission, except as specified in this act.

“(d) The members of the Board of Directors of the Arkansas Science and Technology Authority, and their successors, shall continue to be selected in the manner and serve for the terms provided by the statutes applicable to the board except as specified in this act.”

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority, hereinafter referred to as the ‘authority’ ”.

15-3-104. Members.

1. The Secretary of the Department of Commerce shall be advised by fourteen (14) directors, who together shall serve as the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission.
2. Directors shall be legal residents of the State of Arkansas.
3. The board shall consist of the Director of the Division of Higher Education or the Director of the Division of Higher Education's designee and thirteen (13) directors who shall be appointed by the Governor, subject to confirmation by the Senate, as follows:
   1. Three (3) directors shall be engineers or scientists recognized for their scientific or technological research efforts;
   2. Two (2) directors shall be appointed as representatives of academic institutions who have an extended extensive involvement in science and technology research;
   3. Five (5) directors shall be representatives of the private sector of the state, who shall be persons with knowledge or experience in the fields of agriculture, forestry, finance, economic development, or science and technology; and
   4. Three (3) directors shall be appointed as representatives of the private sector of the state, who shall be persons with knowledge or experience in the field of manufacturing.
4. In making appointments, the Governor shall give consideration to geographical representation in order that each major area of the state will be represented on the board.
5. Directors shall be appointed for terms running four (4) years from January 14 of the year of appointment. Directors shall hold office for the terms of their appointments and until their successors have been appointed and qualified.
6. In the event of a vacancy in the position of director, the vacancy shall be filled by appointment by the Governor in the same manner as provided for the initial appointment for the remainder of the unexpired portion of the term of the director.
7. No director shall serve more than two (2) terms of office.
8. A director may be removed by the Governor for cause, stated in writing, after a hearing or upon joint address of a majority of the membership of both houses of the General Assembly at a regular session, fiscal session, or extraordinary session.
9. Unless otherwise provided by law, a director may receive expense reimbursement in accordance with § 25-16-901 et seq. Such expenses and mileage shall be paid from funds appropriated for such purpose or otherwise available to the Arkansas Economic Development Commission.

History. Acts 1975 (Extended Sess., 1976), No. 1035, § 1; 1983, No. 859, § 2; 1985, No. 409, § 2; A.S.A. 1947, §§ 6-616, 6-1602; reen. Acts 1987, No. 862, § 1; Acts 1995, No. 65, § 1; 1997, No. 250, § 91; 2001, No. 1288, § 6; 2009, No. 962, § 30; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, §§ 330, 331.

A.C.R.C. Notes. Part of this section was reenacted by Acts 1987, No. 862, § 1. Acts 1987, No. 834 provided that 1987 legislation reenacting acts passed in the 1976 Extended Session should not repeal any other 1987 legislation and that such other legislation would be controlling in the event of conflict.

As amended by Acts 1995, No. 65, § 1, subdivision (c)(4) also provided:

“The three persons first appointed under this subdivision shall by lot draw terms so that one expires January 14, 1996, one expires January 14, 1998 and one expires January 14, 1999. Thereafter, their successors shall serve four year terms.”

Publisher's Notes. Acts 1985, No. 409, § 2 provided for the Governor to appoint two directors to serve until January 14, 1986; two directors to serve until January 14, 1987; two directors to serve until January 14, 1988; and three directors to serve until January 14, 1989.

Amendments. The 2009 amendment, in (h), deleted “thereon” following “after a hearing” and substituted “regular session, fiscal session, or special session” for “special or regular session thereof.”

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (a), substituted “The Executive Director of the Arkansas Economic Development Commission shall be advised” for “The Arkansas Science and Technology Authority shall be governed” and “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority”; deleted “of the authority” following “director” in (g) through (i); and substituted “to the commission” for “to the authority” in (i).

The 2019 amendment substituted “Secretary of the Department of Commerce” for “Executive Director of the Arkansas Economic Development Commission” in (a); and substituted “Division of Higher Education” for “Department of Higher Education” twice in the introductory language of (c).

15-3-105. Organization.

Directors of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission shall annually elect from their membership one (1) member as chair, one (1) member as vice chair, and one (1) member as secretary.

History. Acts 1983, No. 859, § 2; 1985, No. 409, § 2; A.S.A. 1947, § 6-1602; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, § 332.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (a); deleted former (b)(1) and redesignated the remaining subdivisions accordingly; and, in present (b)(1), substituted “Executive Director of the Arkansas Economic Development Commission” for “directors” and “he or she” for “they”.

The 2019 amendment deleted the (a) designation and deleted (b).

15-3-106. Executive committee.

1. The directors shall establish an Executive Committee of the Division of Science and Technology of the Arkansas Economic Development Commission, to be composed of the chair, the vice chair, the secretary, and two (2) additional members to be chosen by the chair from the remaining directors.
2. The committee, in intervals between meetings of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, may transact any business of the board that has been delegated to the committee.
3. A majority of the committee may conduct business, and a favorable vote of three (3) members shall be deemed consent of the committee.

History. Acts 1983, No. 859, § 2; 1985, No. 409, § 2; A.S.A. 1947, § 6-1602; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (a).

15-3-107. Meetings.

1. The Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission shall meet at least one (1) time during each calendar quarter and at such other times as may be provided in the rules of the Arkansas Economic Development Commission, upon call by the chair, or upon written request of a majority of the directors.
2. A majority of the directors shall be necessary to transact business of the board, and all actions of the directors shall be by a majority vote of the full number of the members of the board.

History. Acts 1983, No. 859, § 2; 1985, No. 409, § 2; A.S.A. 1947, § 6-1602; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 rewrote (a); and, in (b), substituted the first occurrence of “board” for “authority” and the second occurrence of “board” for “Board of Directors of the Arkansas Science and Technology Authority”.

15-3-108. Nature, powers, and duties generally.

1. The Division of Science and Technology of the Arkansas Economic Development Commission shall be a body corporate and politic, having the powers and jurisdiction hereinafter enumerated and additional powers as conferred upon it by the General Assembly, the Director of the Arkansas Economic Development Commission, or the people of this state.
2. The director, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, is authorized and designated to engage in undertakings, programs, enterprises, and activities involving agriculture, manufacturing, medical and healthcare, transportation, public utility services, research and development, and other programs involving the establishment and encouragement of science and technological research.
3. The director, the division, and its board, employees, and agents shall be immune from civil liability for performing the duties under this subchapter.
4. In the furtherance of the division's purposes, the director shall have all the powers necessary to carry out the division's purposes, which shall include, but not be limited to:
   1. Make, amend, and repeal bylaws and rules for the management of the affairs of the division;
   2. Adopt an official seal for the division;
   3. Sue and be sued in his or her own name;
   4. Make contracts and execute all instruments necessary or convenient for carrying out the business of the division;
   5. Acquire, own, hold, dispose of, and encumber real or personal property of any nature, both tangible and intangible, or any interest therein;
   6. Enter into agreements or other transactions with any federal, state, county, or municipal agency and with any individual, corporation, firm, association, or any other entity involving science and technology;
   7. Acquire real property or an interest in real property by purchase or foreclosure when such an acquisition is necessary or appropriate to protect or secure any investment or loan in which the division has an interest;
   8. Sell, transfer, and convey any such property to a buyer, and in the event the sale, transfer, or conveyance cannot be effected with reasonable promptness or at a reasonable price, lease the property to a tenant;
   9. Invest any funds appropriated by the state and held in reserve in funds not required for immediate disbursement, in investments that may be lawful for fiduciaries in the State of Arkansas, and invest funds received from gifts, grants, donations, and other operations of the division in investments that would be lawful for a private corporation having purposes similar to the division;
   10. Borrow money and give guaranties, provided that the indebtedness and other obligations of the division shall be payable solely out of its own resources and shall not constitute a pledge of the full faith and credit of the State of Arkansas or any of its revenues;
   11. [Repealed.]
   12. Appear on behalf of the division before boards, commissions, departments, or other agencies of municipal, county, state, or federal government;
   13. Procure insurance against any losses in connection with the properties of the division in amounts from insurers that may be necessary or desirable;
   14. Consent, subject to the provisions of any contract with noteholders, whenever he or she deems it necessary or desirable in the fulfillment of the purposes of this subchapter, to the modifications with respect to the rate of interest, time payment, or of any installment, of principal and interest, or any terms of any contract or agreement of any kind to which the division is a party;
   15. 1. Accept any and all donations, grants, bequests, and devises, conditional or otherwise, of money, property, services, or other things of value that may be received from the federal government or any agency thereof, any governmental agency, or any institution, person, firm, or corporation, public or private, to be held, used, or applied for any or all of the purposes specified in this subchapter in accordance with the terms and conditions of any such grant.
       2. Receipt of each such donation or grant shall be detailed in the annual report of the division.
       3. This report shall include the identity of the donor or lender, the nature of the transaction, and any conditions attaching thereto;
   16. Trade, buy, or sell qualified securities;
   17. Finance, conduct, or cooperate in the financing or conducting of scientific, technological, business, financial, or other investigations that are related or likely to lead to business and economic development involving science and technology by making and entering into contracts or other appropriate arrangements, including the provision of grants, loans, and other forms of assistance;
   18. Solicit, study, and assist in the preparation of business plans and proposals of new or established science and technologically oriented businesses and advance the state of science in Arkansas for those purposes;
   19. Prepare, publish, and distribute, with or without charge as the director may determine, such technological studies, reports, bulletins, and other materials as he or she deems appropriate, subject only to the maintenance and responsibility for confidentiality of the client's proprietary information;
   20. Organize, conduct, sponsor, or cooperate in and assist the conduct of special institutes, conferences, demonstrations, and studies relating to the stimulation and formulation of basic science, applied science, and technologically oriented businesses and studies relating to the formulation of scientific or technologically oriented business and industry endeavors;
   21. Own and possess patents, copyrights, and proprietary processes and enter into contracts and establish charges for the use of such patents, copyrights, and proprietary processes involving science or technology;
   22. Provide and pay for advisory services and technical assistance that may be necessary or desirable to carry out the purposes of this subchapter;
   23. Exercise any other powers necessary for the operation and functioning of the division within the purposes authorized in this subchapter;
   24. 1. Provide scientific and technological data and information required by the Governor, the General Assembly, or its committees, and to state agencies and cities, counties, and school districts, and to private citizens and groups, within the limitations of the resources available to the division.
       2. This service shall be in addition to any services currently being provided to the General Assembly by any higher education institution, committee, or any other organization; and
   25. Prepare, publish, amend, and distribute a research and development plan to guide investments in research and commercialization, strategic research, and technology-based enterprises.

History. Acts 1983, No. 859, §§ 3, 4; 1985, No. 409, §§ 3-6; A.S.A. 1947, §§ 6-1603, 6-1604; Acts 2005, No. 183, § 1; 2007, No. 988, § 1; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 315, § 1050; 2019, No. 910, §§ 333-335.

Amendments. The 2005 amendment added the subdivision designations in (c)(15) and (c)(24); and added (c)(25) and made a related change.

The 2007 amendment added (c) and redesignated former (c) as present (d).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “the division” for “the authority” throughout (d); rewrote (a) and (b); in (c), substituted “executive director, the division” for “authority” and deleted “of the authority” following “duties”; in the introductory language of (d), substituted “the division's” for “its” twice and “executive director” for “authority”; substituted “the affairs of the division” for “its affairs” in (d)(1); added “for the division” in (d)(2); substituted “his or her” for “its” in (d)(3); substituted “the business of the division” for “its business” in (d)(4); substituted “on behalf of the division” for “in its own behalf” in (d)(12); substituted “the properties of the division” for “its properties” in (d)(13); substituted “he or she” for “it” in (d)(14); and, in (d)(19), substituted “executive director” for “authority” and “he or she” for “it”.

The 2019 amendment by No. 315, substituted “bylaws and rules” for “bylaws, rules, and regulations” in (d)(1).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a); and deleted “executive” preceding “director” in (b), (c), and the introductory language of (d); and repealed (d)(11).

15-3-109. Power to carry out programs.

1. In relation to the authorization under this subchapter to engage in undertakings, programs, enterprises, and activities involving research and development and other programs involving the establishment and encouragement of scientific and technological research, the Director of the Arkansas Economic Development Commission shall have all the powers necessary to carry out programs which include, but are not limited to:
   1. Funding basic research at Arkansas colleges and universities as specified in § 15-3-110;
   2. Stimulating applied research partnerships between private industry and Arkansas colleges and universities and matching funds from private sources for proposed applied research projects as specified in § 15-3-110;
   3. Assisting small businesses in identifying and applying for funds to conduct research and development work on innovative technical ideas;
   4. Transferring knowledge and technology from college, university, and government laboratories to private industry;
   5. Creating, in cooperation with Arkansas colleges and universities, facilities to foster the growth of technology-based enterprises;
   6. Developing emerging product and process technologies which contribute to business and economic growth;
   7. Engaging in innovative demonstration and pilot projects involving improved education and preparation of the future workforce in the areas of science, technology, and mathematics; and
   8. Transferring knowledge and technology from colleges, universities, government entities and laboratories, and other sources of innovation to public schools.
2. In establishing and maintaining the programs authorized by this section, the director may utilize moneys as are lawfully available to the director for supporting the purposes of the Division of Science and Technology of the Arkansas Economic Development Commission.

History. Acts 1983, No. 859, § 15; 1985, No. 409, § 13; A.S.A. 1947, § 6-1615; Acts 1987, No. 210, § 1; 1989, No. 271, § 1; 1995, No. 456, § 1; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2017, No. 374, § 2; 2019, No. 910, §§ 336, 337.

Publisher's Notes. Acts 1987, No. 210, § 3 provided that it is the intention of the act to amend Acts 1983, No. 859, §§ 15, 16, and that the remainder of Acts 1983, No. 859, as amended, shall remain in full force and effect as enacted until further amended or repealed.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (a), substituted “the authorization” for “its authorization” and “Executive Director of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority”; and, in (b), substituted “executive director” for “authority” twice and “the purposes of the Division of Science and Technology of the Arkansas Economic Development Commission” for “its purposes”.

The 2017 amendment deleted “drawn from the investment fund and such other moneys” following “utilize moneys” in (b).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the introductory language of (a); and deleted “executive” preceding “director” twice in (b).

Cross References. Establishment of centers of excellence, § 6-61-129.

15-3-110. Power to promote basic and applied research at Arkansas colleges and universities.

1. The Director of the Arkansas Economic Development Commission may make such rules as he or she may deem appropriate to enable him or her to create and fund programs designed to promote basic research and applied research at Arkansas colleges and universities and to develop technology emerging from sources of innovation in this state, including, but not limited to, colleges and universities, federal laboratories, small businesses, and inventors.
2. 1. In carrying out his or her functions under this section, the Director of the Arkansas Economic Development Commission may create such advisory committees as may be useful in evaluating research and development proposals.
   2. The memberships of these advisory committees may include both directors and staff members of the Division of Science and Technology of the Arkansas Economic Development Commission and other persons drawn from sources other than the division, all of whom shall serve at the pleasure of the Director of the Arkansas Economic Development Commission.
   3. Members of such advisory committees shall serve without compensation for their membership on such committees but may receive expense reimbursement in accordance with § 25-16-901 et seq.
3. 1. Any moneys lawfully available to the division for the purpose of supporting basic research at Arkansas colleges and universities shall in no event defray more than sixty percent (60%) of the total cost of the proposed basic research project being funded.
   2. The remaining forty percent (40%) of the total cost of the proposed basic research project shall be funded by moneys or in-kind services provided by the college or university proposing the basic research project.
4. 1. 1. Any moneys lawfully available to the division for the purpose of creating applied research partnerships between private industry and Arkansas colleges and universities shall in no event defray more than fifty percent (50%) of the total cost of the proposed applied research project.
      2. However, the contribution of the Director of the Arkansas Economic Development Commission may defray up to sixty-six and two-thirds percent (66 2/3%) of the total cost of a proposed applied research project if the Director of the Arkansas Economic Development Commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, finds that the participating private industry is principally located in Arkansas and employs fifty (50) or fewer persons.
   2. The proposed applied research project shall be submitted by an Arkansas college or university, and the proposal shall state that a percentage of the total cost of the proposed applied research project will be provided by private sources in accordance with the matching provisions of this subsection.
   3. The Director of the Arkansas Economic Development Commission shall approve for funding only those proposed applied research projects for which the Director of the Arkansas Economic Development Commission finds that enhanced employment opportunity within Arkansas will be a likely result.
5. 1. Any moneys lawfully available to the division for the purpose of supporting technology development shall in no event exceed one hundred thousand dollars ($100,000) per project being funded.
   2. The Director of the Arkansas Economic Development Commission shall impose a reasonable, nonrefundable fee for the evaluation of the technological and economic potential of emerging technologies contained in proposals from nonpublic sources of innovation.
   3. The Director of the Arkansas Economic Development Commission is authorized to incorporate a royalty provision not to exceed five percent (5%) of net sales revenue per year for a period of not more than ten (10) years as a condition of award.
   4. The Director of the Arkansas Economic Development Commission shall approve for funding only those proposed technology development projects for which the Director of the Arkansas Economic Development Commission finds that enhanced economic opportunity within Arkansas will be a likely result.

History. Acts 1983, No. 859, § 16; 1985, No. 409, § 14; A.S.A. 1947, § 6-1616; Acts 1987, No. 210, § 2; 1989, No. 271, § 2; 1997, No. 250, § 92; 2005, No. 1232, § 11; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 315, § 1051; 2019, No. 910, §§ 338-341.

Publisher's Notes. As to intent of Acts 1987, No. 210, see Publisher's Note to § 15-3-109.

Acts 2005, No. 1232, § 1 provided:

“Legislative intent.

“(a) Accelerate Arkansas, a statewide group of volunteers whose mission is to foster economic growth in Arkansas by raising the average Arkansas wage to the level of the national average wage by using the essential building blocks of the knowledge-based economy to create an environment supporting entrepreneurship and continuous innovation, developed its five-point strategy to increase per capita income:

“(1) Support research and development that creates jobs;

“(2) Provide incentives that make risk capital available in the funding gap;

“(3) Encourage entrepreneurship and new enterprise development;

“(4) Sustain successful existing companies; and

“(5) Increase achievement in science, technology, engineering, and mathematics education.

“(b) These core strategies focus on the economic building blocks of research, entrepreneurship, risk capital, and the science and engineering workforce.

“(c) These core strategies are consistent with and supported by the findings in:

“(1) The Department of Economic Development's Report of the Task Force for the Creation of Knowledge-Based Jobs;

“(2) The Winthrop Rockefeller Foundation's Entrepreneurial Arkansas: Connecting the Dots; and

“(3) ‘Arkansas' Position in the Knowledge-Based Economy’, a report prepared by the Milken Institute and the Center for Business and Economic Research at the University of Arkansas.”

Amendments. The 2005 amendment substituted “one hundred thousand dollars ($100,000)” for “fifty thousand dollars ($50,000)” in (e)(1).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “division” for “authority” and “executive director” for “board” throughout; substituted “Executive Director of the Arkansas Economic Development Commission may” for “Arkansas Science and Technology Authority is empowered to” in (a); substituted “executive director” for “Board of Directors of the Arkansas Science and Technology Authority” in (b)(1); rewrote (b)(2) and (d)(1)(B); and made stylistic changes.

The 2019 amendment by No. 315 deleted “and regulations” following “rules” in (a).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a); and substituted “Director of the Arkansas Economic Development Commission” for “executive director” throughout the section.

15-3-111. Additional powers.

The Director of the Arkansas Economic Development Commission shall have such additional powers and duties as may be hereafter delegated to or imposed upon him or her from time to time by the General Assembly.

History. Acts 1983, No. 859, § 5; A.S.A. 1947, § 6-1605; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, § 342.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Executive Director of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” and “him or her” for “it”.

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission”.

15-3-112. Prohibition on personal interest in contracts.

1. No director, officer, or employee of the Division of Science and Technology of the Arkansas Economic Development Commission or of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, for purpose of personal gain, shall have or attempt to have, directly or indirectly, any interest in any contract or agreement of the division in connection with the qualified investments or other programs of the division.
2. The Director of the Arkansas Economic Development Commission shall not invest, pursuant to § 15-3-122, in any qualified security of:
   1. Any enterprise that is owned, wholly or partially, directly or indirectly, by any director or officer of the division; or
   2. Any enterprise that employs a director of the division.
3. It shall not be a violation of this section for the Director of the Arkansas Economic Development Commission to permit any college, university, or other nonprofit institution with which a director is affiliated to participate in any program of the division, provided that the director shall promptly disclose the nature of the affiliation to the board.
4. 1. It shall not be a violation of this section for the Director of the Arkansas Economic Development Commission to permit a manufacturer or other for-profit entity with which a director is affiliated to pay to the division fees for services and receive, in return for those fees, services:
      1. That are generally available to all manufacturers or other for-profit entities; and
      2. That are not available to the manufacturer or other for-profit entity solely due to its affiliation with a director.
   2. 1. A director affiliated with a manufacturer or other for-profit entity that enters into a contract or an agreement pursuant to subdivision (d)(1) of this section shall disclose the contract or agreement in writing to the Director of the Arkansas Economic Development Commission.
      2. The Director of the Arkansas Economic Development Commission shall inform the board of the contract or agreement at its next regularly scheduled meeting and attach a copy of the written disclosure to the minutes of that meeting.

History. Acts 1983, No. 859, § 17; 1985, No. 409, § 15; A.S.A. 1947, § 6-1617; Acts 2007, No. 988, § 2; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, § 343.

Amendments. The 2007 amendment added (d).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (a), substituted “Division of Science and Technology of the Arkansas Economic Development Commission or of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” and “the division” for “the authority” twice; substituted “Executive Director of the Arkansas Economic Development Commission” for “authority” in (b); inserted “of the division” in (b)(1) and (b)(2); in (c), substituted “for the executive director” for “for the authority”, “of the division” for “of the authority”, and “board” for “Board of Directors of the Arkansas Science and Technology Authority”; in (d)(1), substituted “for the executive director” for “for the authority” and “to the division” for “to the authority”; and substituted “executive director” for “president of the authority” in (d)(2)(A) and (d)(2)(B).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the introductory language of (b); and substituted “Director of the Arkansas Economic Development Commission” for “executive director” throughout (c) and (d).

15-3-113. Studies, planning, and recommendations — Cooperation with other agencies.

1. The Division of Science and Technology of the Arkansas Economic Development Commission shall, from time to time, make studies and develop plans and programs in the sciences and technologies to support industrial development in certain areas of research and development.
2. The Director of the Arkansas Economic Development Commission shall recommend to the General Assembly proposed laws and rules to support the growth and development of programs and research in the sciences and specialized areas of high technology.
3. The director may provide leadership and assistance in cooperation with the Arkansas Public Service Commission, or any other federal, state, county, or municipal authority and to private industries in this state for the adoption and execution of any improvements, changes in methods of operation, rates of transportation, utilities, and zoning and building requirements and covenants which, in the opinion of the director, may be designed to improve or better operate the existing programs and research in the sciences and specific areas of high technology and related industrial development.

History. Acts 1983, No. 859, § 6; A.S.A. 1947, § 6-1606; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 315, § 1052; 2019, No. 910, § 344.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (a); substituted “Executive Director of the Arkansas Economic Development Commission” for “authority” in (b); and, in (c), substituted “executive director” for “authority” twice and deleted “Arkansas Transportation Commission [abolished], the” following “cooperation with the”.

The 2019 amendment by No. 315 substituted “rules” for “regulations” in (b).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b); and deleted “executive” preceding “director” twice in (c).

15-3-114. Use of land, buildings, or facilities for science and high technology.

The Arkansas Economic Development Commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, is authorized to own, acquire, construct, reconstruct, extend, equip, improve, operate, maintain, sell, lease, contract concerning, or otherwise deal in or dispose of any land, buildings, or facilities of any and every nature whatever that can be used in securing or developing industry, transportation facilities, research and technological laboratories and production facilities, and agricultural, medical, and scientific enterprises involving the use of science and high technology, hereinafter referred to as “industry” or “industries”, within this state.

History. Acts 1983, No. 859, § 8; A.S.A. 1947, § 6-1608; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “Science and Technology Authority”.

15-3-115. Pledging of credit.

The Division of Science and Technology of the Arkansas Economic Development Commission shall not pledge the credit of the State of Arkansas or any of its revenues, except by the authority granted to it by the General Assembly and upon approval of the electors of this state as may be required by Arkansas Constitution, Amendment 20.

History. Acts 1983, No. 859, § 5; A.S.A. 1947, § 6-1605; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology Authority of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority”.

15-3-116. Deposit of moneys — Audit.

1. All moneys coming into the hands of the Division of Science and Technology of the Arkansas Economic Development Commission shall be deposited into one (1) or more financial institutions selected by the Director of the Arkansas Economic Development Commission with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission and authorized to do business in this state.
2. Moneys received by the division from appropriations of the General Assembly shall be deposited, administered, and accounted for in such manner as the General Assembly may provide.
3. The director shall provide for an audit to be performed and accepted by a certified public accountant or firm within sixty (60) days following the conclusion of each fiscal year of the division and shall file copies thereof with the Legislative Joint Auditing Committee.
4. The Legislative Joint Auditing Committee may accept such audit report or direct an audit of the financial record of the division by the staff of the Legislative Joint Auditing Committee.

History. Acts 1983, No. 859, § 7; A.S.A. 1947, § 6-1607; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, §§ 345, 346.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 rewrote (a); substituted “the division” for “the authority” in (b) through (d); and substituted “The executive director” for “The authority” in (c).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a); and deleted “executive” preceding “director” in (c).

15-3-117. Use of revenues — Assistance to minority businesses.

1. The Arkansas Economic Development Commission is authorized to use any available revenues for the accomplishment of the purposes set forth in this subchapter.
2. In carrying out the purposes set forth in this subchapter, the commission will assist minority businesses in obtaining loans or other means of financial assistance.
3. The terms and conditions of such loans or financial assistance, including the charges for interest and other services, will be consistent with the provisions of this subchapter.
4. In order to comply with this requirement, efforts will be made to solicit for review and analysis proposed minority business ventures.
5. It is further provided that basic loan underwriting standards will not be waived to inconsistently favor minority persons or businesses, or both, from the intent of the commission's lending practices.

History. Acts 1983, No. 859, § 9; 1985, No. 409, § 7; A.S.A. 1947, § 6-1609; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (a); substituted “commission” for “authority” in (b); and substituted “the commission's” for “the authority's” in (e).

Cross References. Minority and Women-Owned Business Economic Development Act, § 15-4-301 et seq.

15-3-118 — 15-3-121. [Repealed.]

Publisher's Notes. These sections, concerning the Arkansas Science and Technology Authority Endowment Fund, were repealed by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 76. The sections were derived from the following sources:

15-3-118. Acts 1983, No. 859, § 10; 1985, No. 409, § 8; A.S.A. 1947, § 6-1610.

15-3-119. Acts 1983, No. 859, § 11; 1985, No. 409, § 9; A.S.A. 1947, § 6-1611.

15-3-120. Acts 1983, No. 859, § 12; 1985, No. 409, § 10; A.S.A. 1947, § 6-1612.

15-3-121. Acts 1983, No. 859, § 13; 1985, No. 409, § 11; A.S.A. 1947, § 6-1613.

15-3-122. Purchase of qualified securities — Prerequisites — Advisory committees.

1. The Arkansas Economic Development Commission may utilize moneys as appropriated by the General Assembly to purchase qualified securities issued by enterprises as a part of a scientific and technological project for the purpose of raising the initial capitalization for such scientific and technological projects subject to the conditions set forth in this section.
2. The commission shall purchase qualified securities issued by an enterprise as a part of a scientific and technological project only after:
   1. Receipt of an application from the enterprise which contains:
      1. A business plan, including a description of the enterprise and its management, product, and market;
      2. A statement of the amount, timing, and projected use of the capital required;
      3. A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and
      4. Such other information as the commission shall request; and
   2. Approval of the investment by the Director of the Arkansas Economic Development Commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, after the director shall find, based upon the application submitted by the enterprise and such additional investigation as the staff of the commission shall make, and incorporate in its minutes that:
      1. The proceeds of the investment will only be used to cover the initial capitalization needs of the enterprise except as hereinafter authorized;
      2. The enterprise has a reasonable chance of success;
      3. The commission's participation is necessary to the success of the enterprise because funding for the enterprise is unavailable in the traditional capital markets or because funding has been offered on terms that would substantially hinder the success of the enterprise;
      4. The enterprise has the reasonable potential to create a substantial amount of primary employment within the state;
      5. The entrepreneur and other founders of the enterprise have already made or are contractually committed to make a substantial financial and time commitment to the enterprise;
      6. The securities to be purchased are qualified securities;
      7. There is a reasonable possibility that the commission will recoup at least its initial investment; and
      8. Binding commitments have been made to the commission by the enterprise for adequate reporting of financial data to the commission, which shall include a requirement for an annual or other periodic audit of the books of the enterprise and for such control on the part of the commission as the director shall consider prudent over the management of the enterprise so as to protect the investment of the commission, including, in the discretion of the director and without limitation, right of access to financial and other records of the enterprise.
3. 1. In carrying out his or her functions under this section, the director may create such advisory committees as may be useful in evaluating potential investments in qualified securities.
   2. The memberships of these advisory committees may include both directors of the board and staff members of the commission and other persons drawn from sources other than the commission, all of whom shall serve at the pleasure of the director.
   3. Members of these advisory committees shall serve without compensation for their membership on the committees but may receive expense reimbursement in accordance with § 25-16-901 et seq.
4. The commission shall not make investments in qualified securities issued by enterprises in excess of the following limits:
   1. Not more than five hundred thousand dollars ($500,000) shall be invested in the qualified securities of any one (1) enterprise; and
   2. The commission shall not own securities representing more than forty-nine percent (49%) of the voting stock of any one (1) enterprise at the time of the purchase by the commission, after giving effect to the conversion of all outstanding convertible securities of the enterprise. However, in the event of severe financial difficulty of the enterprise threatening, in the judgment of the director, the investment of the commission therein, a greater percentage of such securities may be owned by the commission.
5. The commission may not invest nor may it commit to invest in any qualified securities prior to the commission's adopting rules to govern the programs authorized under this section.

History. Acts 1983, No. 859, § 14; 1985, No. 409, § 12; A.S.A. 1947, § 6-1614; Acts 1997, No. 250, § 93; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2017, No. 374, § 3.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “commission” for “authority” throughout the section; substituted “Economic Development Commission” for “Science and Technology Authority” in (a); substituted “commission” for “Board of Directors of the Arkansas Science and Technology Authority” in (b)(1)(D); rewrote (b)(2); substituted “executive director” for “board” in (b)(2)(H) twice; substituted “his or her” for “its” in (c)(1); substituted “executive director” for “board” in (c)(1), (c)(2), and (d)(2); and substituted “commission's” for “board's” in (e).

The 2017 amendment substituted “moneys as appropriated by the General Assembly” for “the investment fund” in (a).

15-3-123. Annual report.

Unless and until otherwise provided, the Arkansas Economic Development Commission shall make an annual report to the Governor and to both houses of the General Assembly setting forth in detail the operations and transactions conducted by it pursuant to this subchapter and any other legislation thereafter provided.

History. Acts 1983, No. 859, § 5; A.S.A. 1947, § 6-1605; Acts 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority”.

15-3-124 — 15-3-129. [Reserved.]

For the purposes of this section and §§ 15-3-131 — 15-3-134, “center for applied technology” or “center” means a college or university or university-affiliated unit, or a consortium of such units, which conducts a continuing program of basic research and applied research, development, and technology transfer in one (1) or more technological areas in collaboration with and through the support of private enterprises.

History. Acts 1989, No. 803, § 4; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 made no change to this section.

15-3-131. Centers for applied technology — Authority to designate.

In order to encourage greater collaboration between private enterprises and Arkansas colleges and universities in the development and application of new technologies, the Arkansas Economic Development Commission may designate technological areas as having significant potential for economic growth in Arkansas or in which the application of new technologies could significantly enhance the productivity and stability of Arkansas enterprises.

History. Acts 1989, No. 803, § 1; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission may” for “Science and Technology Authority is authorized to”.

15-3-132. Centers for applied technology — Criteria — Designation.

1. The Division of Science and Technology of the Arkansas Economic Development Commission shall:
   1. Identify technological areas for which centers for applied technology should be designated, including, but not limited to, technological areas that are related to enterprises with significant potential for economic growth and development in Arkansas and areas that are related to the enhancement of productivity in various enterprises in Arkansas;
   2. Establish, in consultation with the Division of Higher Education, criteria that must be satisfied for designation as a center, including, but not limited to:
      1. An established record of research, development, and instruction in the area of technology;
      2. The capacity to conduct research and development activities in collaboration with private enterprises;
      3. The capacity to secure substantial private and other government funding for the proposed center;
      4. The ability and willingness to cooperate with other colleges and universities in conducting research and development activities and in disseminating research results and to work with institutions of higher learning to enhance the quality of technological education in the area or areas of technology involved; and
      5. The ability and willingness to cooperate with the Division of Science and Technology of the Arkansas Economic Development Commission, the Arkansas Economic Development Council, and other economic development agencies in promoting the growth and development in Arkansas of enterprises based upon or benefiting from the areas of technology involved; and
   3. Designate, using a competitive selection process, those centers for applied technology to be created in cooperation with colleges and universities in the state.
2. The Division of Science and Technology of the Arkansas Economic Development Commission may not designate technological areas or establish centers prior to the Division of Science and Technology of the Arkansas Economic Development Commission's adopting rules to govern the program authorized under this section, §§ 15-3-130, 15-3-131, 15-3-133, and 15-3-134.

History. Acts 1989, No. 803, §§ 2, 6; 1997, No. 540, § 18; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, § 347.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (a); substituted “division” for “authority” in (a)(2)(E); and, in (b), substituted “The division” for “The authority” and “division's” for “Board of Directors of the Arkansas Science and Technology Authority’s” and made stylistic changes.

The 2019 amendment substituted “Division of Higher Education” for “Department of Higher Education” in the introductory language of (a)(2).

15-3-133. Centers for applied technology — Advisory committees.

1. In carrying out its functions under this section, §§ 15-3-130 — 15-3-132, and 15-3-134, the Division of Science and Technology of the Arkansas Economic Development Commission may create such advisory committees as may be useful in evaluating potential technological areas and centers for applied technology.
2. The memberships of these advisory committees may include both directors and staff members of the division and other persons drawn from sources other than the division, all of whom shall serve at the pleasure of the Director of the Arkansas Economic Development Commission.
3. Members of such advisory committees shall serve without compensation for their membership on such committees but may receive expense reimbursement in accordance with § 25-16-901 et seq.

History. Acts 1989, No. 803, § 5; 1997, No. 250, § 94; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76; 2019, No. 910, § 348.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Board of Directors of the Arkansas Science and Technology Authority” in (a); and, in (b), substituted “of the division” for “of the Arkansas Science and Technology Authority”, “than the division” for “than the authority”, and “Executive Director of the Arkansas Economic Development Commission” for “board”.

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b).

15-3-134. Centers for applied technology — Disposition of funds.

Any moneys lawfully available to the Arkansas Economic Development Commission for the purpose of creating centers for applied technology may be used for the purchase of equipment and fixtures, employment of faculty and support staff, provision of graduate fellowships, and other purposes approved by the commission but may not be used for capital construction.

History. Acts 1989, No. 803, § 3; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” and “commission” for “authority”.

15-3-135. Promotion of scientific, medical, and technological jobs and infrastructure enhancements — Definition.

1. As used in this section, “qualified medical company” means a corporation engaged in:
   1. Research and development in the medical field; and
   2. Manufacture and distribution of medical products, including therapeutic and diagnostic products.
2. 1. All agencies, departments, boards, commissions, and other instrumentalities of this state and all political subdivisions of this state and all agencies, departments, boards, commissions, and other instrumentalities thereof, to the greatest extent possible, shall expedite the processing of all lawful applications and requests required or permitted by law which are submitted or made by qualified medical companies and, in considering all such applications and requests, give due consideration to the purposes of this section.
   2. To the extent available time, personnel, and other resources permit, all state-funded colleges and universities shall provide research assistance to the Arkansas Economic Development Commission to assist with planning to develop scientific, medical, and technological commercial infrastructure enhancements to encourage qualified medical companies to locate in this state.

History. Acts 1995, No. 586, §§ 1–3; 2015 (1st Ex. Sess.), No. 7, § 76; 2015 (1st Ex. Sess.), No. 8, § 76.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority”.

Subchapter 2 — Arkansas Research Matching Fund

Effective Dates. Acts 1999, No. 1545, § 9, provided: “Effective Date. Matching grants may be authorized under this act for any federal funding awarded on or after July 1, 1999.”

Acts 1999, No. 1545, § 13: July 1, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that in order for the benefits of this act to be accessible in a timeframe consistent with the availability of appropriated funds, it is necessary for the act to be effective on July 1, 1999; that the benefits of this act may provide opportunities that would not be available should funds be available and the means to use those funds not be consistent; and that funding cycles for federal grants may be present in the interim. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health and safety shall be in full force and effect on and after July 1, 1999.”

Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-3-201. Legislative intent.

A national ranking of Arkansas's research performance in comparison with other states places our state forty-ninth. In order to be competitive in our economic and educational endeavors, it is critical that our research capabilities be upgraded. To be competitive will require a commitment on behalf of the state that is specifically targeted to improving our ranking among the states in the areas of science and engineering graduates, university research and development, federal research and development, and small business innovation research grants. The commitment necessary to improve our ranking is to be found in investing in research and research infrastructure.

History. Acts 1999, No. 1545, § 1.

15-3-202. Creation.

1. There is created the Arkansas Research Matching Fund.
2. The fund shall be administered by the Arkansas Economic Development Commission and shall be for the benefit of colleges and universities located within the State of Arkansas.
3. In order to qualify for the research moneys to be made available through this fund, schools must be a two-year or four-year accredited institution of post-secondary education. Consortiums of eligible institutions are eligible and encouraged to apply for these funds. The fund shall be focused on basic and strategic research.

History. Acts 1999, No. 1545, § 2; 2015 (1st Ex. Sess.), No. 7, § 77; 2015 (1st Ex. Sess.), No. 8, § 77.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (b).

15-3-203. Administration.

1. In order to obtain moneys from the Arkansas Research Matching Fund:
   1. A college or university may provide the Arkansas Economic Development Commission with the research grant proposal for federal funds submitted with a letter of intent to apply for a match to one (1) of the funding agencies identified in § 15-3-205;
   2. 1. A college or university shall apply to the commission for a match from this fund in writing within two (2) weeks of the notice of an award of federal funds from one (1) of the funding agencies identified in § 15-3-205.
      2. In addition to the grant proposal submitted to the federal agency, the application shall include an approved budget and an official notice of the grant award from the federal funding agency; and
   3. A college or university shall adhere to the rules that may be promulgated by the commission for administration of this fund.
2. 1. Upon receipt of an application for matching funds to match federal funds from one (1) of the funding agencies identified in § 15-3-205, the commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, shall determine the eligibility for matching funds based on a finding that the proposed research is in fields having long-term economic or commercial value to the state and which have been identified in the research and development plan approved by the Director of the Arkansas Economic Development Commission.
   2. The commission shall promptly review applications for matching funds for consistency with this subchapter.
   3. The commission shall ensure that no commitments for matching funds shall be made in excess of funds available for any given year and may review and approve those applications that have:
      1. Provided the information on the application for matching funds in accordance with the provisions of this subchapter;
      2. Included an official notice of award of a research grant from one (1) of the funding agencies identified in § 15-3-205; and
      3. Filed a proposal for federal funding consistent with the types of research authorized by this subchapter.

History. Acts 1999, No. 1545, § 3; 2003, No. 417, § 1; 2015 (1st Ex. Sess.), No. 7, § 78; 2015 (1st Ex. Sess.), No. 8, § 78; 2019, No. 315, § 1053; 2019, No. 910, § 349.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (a)(1); substituted “commission” for “authority” in (a)(2) and (a)(3); in (b)(1), substituted “commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “authority” and “Executive Director of the Arkansas Economic Development Commission” for “Board of Directors of the Arkansas Science and Technology Authority”; substituted “commission” for “authority” in (b)(2); and substituted “commission” for “board” in (b)(3).

The 2019 amendment by No. 315 deleted “and regulations” following “rules” in (a)(3).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b)(1).

15-3-204. Disbursement of funds.

1. The matching funds authorized by this subchapter are to be used primarily to attract federal funds to the state for basic and strategic research.
2. The Director of the Arkansas Economic Development Commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, may approve multi-year research grants, but disbursements of the matching funds authorized by this subchapter shall be for no more than a twelve-month period.

History. Acts 1999, No. 1545, § 4; 2015 (1st Ex. Sess.), No. 7, § 79; 2015 (1st Ex. Sess.), No. 8, § 79; 2019, No. 910, § 350.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Executive Director of the Arkansas Economic Development Commission, with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “Board of Directors of the Arkansas Science and Technology Authority” in (b).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b).

15-3-205. Funds for match.

Funds used under the provisions of this subchapter shall adhere to the following criteria:

1. Be used for the purposes of matching an approved grant from an eligible federal agency, limited to the following:
   1. The National Science Foundation;
   2. The National Institutes of Health;
   3. The United States Department of Energy;
   4. The United States Department of Defense;
   5. The United States Environmental Protection Agency;
   6. The National Aeronautics and Space Administration;
   7. The United States Department of Agriculture;
   8. The United States Department of Transportation;
   9. The United States Department of Commerce;
   10. The United States Department of Education; and
   11. The United States Department of Homeland Security;
2. 1. Proposals for federal funds that contain a specific state or federal match requirement, for the purposes of this subchapter, shall not be matched at a rate of more than fifty percent (50%), except that any portion of the match over fifty percent (50%) may be borne by the college or university.
   2. Proposals for federal funds that do not contain a specific state or federal match requirement, for the purposes of this subchapter, shall not be matched at a rate of more than ten percent (10%), provided that the state share is matched dollar for dollar by the college or university for a combined match of not more than twenty percent (20%), except that any portion of the match over twenty percent (20%) may be borne by the college or university; and
3. A state financial match requirement of at least twenty thousand dollars ($20,000) for equipment matching and at least fifty thousand dollars ($50,000) for research project matching.

History. Acts 1999, No. 1545, § 5; 2005, No. 2265, § 1.

Amendments. The 2005 amendment added (K) and made a related change.

15-3-206. Reporting.

The Arkansas Economic Development Commission shall present to the Governor's office and the General Assembly a report on the investment from the Arkansas Research Matching Fund by April 1 of each even-numbered year.

History. Acts 1999, No. 1545, § 6; 2015 (1st Ex. Sess.), No. 7, § 80; 2015 (1st Ex. Sess.), No. 8, § 80.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority”.

15-3-207. Prohibition.

None of the moneys appropriated by the General Assembly for the Arkansas Research Matching Fund shall be used for the construction of new facilities.

History. Acts 1999, No. 1545, § 7.

15-3-208. Rules.

The Arkansas Economic Development Commission has the authority to establish guidelines by which eligible institutions might access research funds created by this subchapter through the promulgation of administrative rules in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq.

History. Acts 1999, No. 1545, § 8; 2015 (1st Ex. Sess.), No. 7, § 81; 2015 (1st Ex. Sess.), No. 8, § 81.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” and deleted “and regulations” following “rules”.

Subchapter 3 — Arkansas Research Alliance Act

Effective Dates. Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

15-3-301. Title.

This subchapter shall be known and may be cited as the “Arkansas Research Alliance Act”.

History. Acts 2007, No. 563, § 1.

15-3-302. Legislative intent.

The General Assembly finds:

1. Economic growth and development in Arkansas in the twenty-first century are indisputably tied to the success of research centers and institutions in incubating high-tech industry;
2. The critical success factors of research institutions are available research infrastructure, talented senior researchers, suitable buildings, and effective equipment; and
3. Private sector leadership understands the market potential of research in economic development and the job-creating power of public-private collaboration.

History. Acts 2007, No. 563, § 1.

15-3-303. Definitions.

As used in this subchapter:

1. “Job-creating research” means basic and applied laboratory research that may reasonably be expected to lead to the creation of knowledge-based and high-technology jobs in Arkansas;
2. “Knowledge-based and high-technology jobs” means employment opportunities in positions that pay more than one and seventy-five hundredths (1.75) times the average annual wage in the state according to the most recent data available;
3. “Research alliance” means the collaborative functions of research universities for the purpose of:
   1. Enhancing research infrastructure;
   2. Increasing the number of talented researchers at research universities; and
   3. Expanding knowledge-based and high-technology job-creating research activities;
4. “Research infrastructure” means the equipment, buildings, information technology connectivity, and software of research universities within which talented researchers conduct their work; and
5. “Research university” means any university campus in Arkansas that receives significant federal funding of job-creating research.

History. Acts 2007, No. 563, § 1.

15-3-304. Collaboration of Arkansas Economic Development Commission with research universities and private business sector representatives.

1. The Arkansas Economic Development Commission may work with the chancellors and presidents of research universities and the private business sector to support collaborations establishing a research alliance for the purpose of improving the economy of the state through:
   1. Improving research infrastructure;
   2. Increasing the focus on job-creating research activities within or supported by the research universities; and
   3. Expanding job-creating research activities toward producing more knowledge-based and high-technology jobs in this state.
2. The commission shall designate no more than five (5) institutions of higher education as research universities for the purposes of this subchapter.

History. Acts 2007, No. 563, § 1; 2015 (1st Ex. Sess.), No. 7, § 82; 2015 (1st Ex. Sess.), No. 8, § 82.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in the section heading and in (a); and substituted “commission” for “authority” in (b).

15-3-305. Areas of collaboration.

The Arkansas Economic Development Commission may recommend that a research alliance under this subchapter:

1. Identify specific areas where scientific research and technological investigation may contribute to the creation and growth of knowledge-based and high-technology jobs in Arkansas;
2. Determine specific areas in which financial investment in scientific and technological research and development from federal agencies or private businesses located in Arkansas could be enhanced or increased if state resources were made available to assist in financing research infrastructure;
3. Advise universities of the research needs of Arkansas businesses and improve the exchange of scientific and technological information for the mutual benefit of universities and private businesses;
4. Encourage collaborations among scholars and faculty of research universities in the areas of research identified by the research alliance;
5. 1. Recommend state investments in research infrastructure.
   2. In determining the recommendations for state investments in research infrastructure, the research alliance shall invite from research universities:
      1. Assessments of the capabilities of the research universities to seize research opportunities in the areas of research identified by the research alliance; and
      2. Investments that would accelerate the creation of economic opportunities for the citizens of the state;
6. Certify investments in research infrastructure from the Arkansas Research Infrastructure Fund; and
7. Monitor, in the specific areas identified by the research alliance:
   1. Growth in university research funding;
   2. Intellectual property creation;
   3. Licensing of technology to entrepreneurial firms and existing Arkansas companies;
   4. Growth in venture capital investments in Arkansas; and
   5. Employment in knowledge-based and high-technology employees.

History. Acts 2007, No. 563, § 1; 2015 (1st Ex. Sess.), No. 7, § 83; 2015 (1st Ex. Sess.), No. 8, § 83.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in the introductory paragraph.

15-3-306. Contracting with research alliance.

1. In order to assist a research alliance in achieving the objectives identified in § 15-3-305, the Arkansas Economic Development Commission may contract with a research alliance or any nonprofit organization recommended by a research alliance for activities consistent with the research alliance's purpose under § 15-3-305.
2. When contracting with the research alliance or its designee under this subchapter, the commission may directly enter into agreements with persons or entities and shall not be bound by the provisions of Arkansas procurement law requiring competitive bids.

History. Acts 2007, No. 563, § 1; 2015 (1st Ex. Sess.), No. 7, § 84; 2015 (1st Ex. Sess.), No. 8, § 84.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (a); and “commission” for “authority” in (b).

Subchapter 4 — Postdoctoral Science and Engineering Grant Program for Economic Development and Knowledge-Based Job Growth

Effective Dates. Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

15-3-401. Legislative intent.

It is the intent of the General Assembly:

1. To assist growing, technology-based enterprises by:
   1. Attracting and retaining highly trained science and engineering postdoctoral graduates by encouraging the establishment of career opportunities within the State of Arkansas;
   2. Providing scientific expertise to emerging technology-based enterprises by helping them hire postdoctoral graduates to address the needs of these businesses; and
   3. Developing a growing core of scientific job talent in Arkansas by attracting and retaining postdoctoral science and engineering graduates; and
2. That the establishment of the postdoctoral science and engineering grant program shall benefit the State of Arkansas as a whole and that provisions be made to ensure that all parts of the state have an opportunity to benefit from this subchapter.

History. Acts 2009, No. 463, § 1.

15-3-402. Application for funding.

1. The Arkansas Economic Development Commission shall make available forms upon which a business eligible for a grant under § 15-3-403 may apply for a grant to support the hiring of postdoctoral science and engineering graduates to work in areas of their expertise in Arkansas.
2. Within thirty (30) days of the receipt of an application, the commission shall notify the applicant whether:
   1. The applicant meets the criteria for benefits; and
   2. Funds are available to assist the business in the hiring of postdoctoral science and engineering graduates.

History. Acts 2009, No. 463, § 1; 2015 (1st Ex. Sess.), No. 7, § 85; 2015 (1st Ex. Sess.), No. 8, § 85.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (a); and “commission” for “authority” in the introductory language of (b).

15-3-403. Eligibility for grants.

To qualify for a grant authorized under § 15-3-404, a business shall:

1. Have operations within the State of Arkansas that are in one (1) of the six (6) categories of targeted businesses identified in § 15-4-2703(43)(A);
2. Pay average hourly wages in excess of one hundred ten percent (110%) of the county or state average hourly wage, whichever is less;
3. Agree to hire a postdoctoral graduate; and
4. Provide proof that the postdoctoral graduate is an Arkansas taxpayer and a resident of the State of Arkansas.

History. Acts 2009, No. 463, § 1.

15-3-404. Authorization of grants.

1. If an applicant meets the requirements of § 15-3-403, the applicant shall be placed in one (1) of the following four (4) levels and be eligible for a grant for up to five (5) years:
   1. 1. An eligible business with a payroll in excess of ten million dollars ($10,000,000) is eligible to receive a grant of up to thirty-five thousand dollars ($35,000) over the five-year period.
      2. If approved, the business will receive:
         1. Ten thousand dollars ($10,000) in year one (1);
         2. Ten thousand dollars ($10,000) in year two (2);
         3. Seven thousand five hundred dollars ($7,500) in year three (3);
         4. Five thousand dollars ($5,000) in year four (4); and
         5. Two thousand five hundred dollars ($2,500) in year five (5);
   2. 1. An eligible business with a payroll in excess of five million dollars ($5,000,000) but no more than ten million dollars ($10,000,000) may be eligible to receive a grant of up to fifty-two thousand five hundred dollars ($52,500) over the five-year period.
      2. If approved, the business will receive:
         1. Fifteen thousand dollars ($15,000) in year one (1);
         2. Fifteen thousand dollars ($15,000) in year two (2);
         3. Eleven thousand two hundred fifty dollars ($11,250) in year three (3);
         4. Seven thousand five hundred dollars ($7,500) in year four (4); and
         5. Three thousand seven hundred fifty dollars ($3,750) in year five (5);
   3. 1. An eligible business with a payroll in excess of at least one million dollars ($1,000,000) but no more than five million dollars ($5,000,000) may be eligible to receive a grant of up to seventy thousand dollars ($70,000) over the five-year period.
      2. If approved, the business will receive:
         1. Twenty thousand dollars ($20,000) in year one (1);
         2. Twenty thousand dollars ($20,000) in year two (2);
         3. Fifteen thousand dollars ($15,000) in year three (3);
         4. Ten thousand dollars ($10,000) in year four (4); and
         5. Five thousand dollars ($5,000) in year five (5); and
   4. 1. An eligible business with a payroll of less than one million dollars ($1,000,000) may be eligible to receive a grant of up to eighty-seven thousand five hundred dollars ($87,500) over the five-year period.
      2. If approved, the business will receive:
         1. Twenty-five thousand dollars ($25,000) in year one (1);
         2. Twenty-five thousand dollars ($25,000) in year two (2);
         3. Eighteen thousand seven hundred fifty dollars ($18,750) in year three (3);
         4. Twelve thousand five hundred dollars ($12,500) in year four (4); and
         5. Six thousand two hundred fifty dollars ($6,250) in year five (5).
2. The grants authorized by this section shall be administered and paid according to rules established by the Arkansas Economic Development Commission.
3. The commission shall not provide further grant funds to the approved business if at any time during the five-year grant period the postdoctoral graduate is no longer employed in Arkansas by the approved business.

History. Acts 2009, No. 463, § 1; 2015 (1st Ex. Sess.), No. 7, § 86; 2015 (1st Ex. Sess.), No. 8, § 86.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (b); and “commission” for “authority” in (c).

15-3-405. Rules.

1. The Arkansas Economic Development Commission, through the promulgation of rules in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., shall establish procedures consistent with this subchapter to carry out the intent of this legislation.
2. The commission shall establish by rule opportunities for assisting in the hiring of postdoctoral graduates in each of the four (4) congressional districts in the state.

History. Acts 2009, No. 463, § 1; 2015 (1st Ex. Sess.), No. 7, § 87; 2015 (1st Ex. Sess.), No. 8, § 87.

Amendments. The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (a); and “commission” for “authority” in (b).

Subchapter 5 — Arkansas Acceleration Fund Act

Effective Dates. Acts 2013, No. 1095, § 12: Apr. 11, 2013. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the continuous operation of the Arkansas Risk Capital Matching Fund is essential to maintaining the state's entrepreneurial infrastructure that is available to Arkansas citizens seeking to create employment opportunities in the state; that this act is necessary to meet immediate demands for funding under the program; and that this act is immediately necessary to provide for continuity of services to Arkansas entrepreneurs and immediate employment opportunities. Therefore, an emergency is declared to exist, and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

Acts 2017, No 165, § 3: Oct. 1, 2017.

Acts 2017, No 166, § 3: Oct. 1, 2017.

15-3-501. Title.

This subchapter shall be known and may be cited as the “Arkansas Acceleration Fund Act”.

History Acts 2011, No. 706, § 1.

15-3-502. Legislative intent.

1. The General Assembly finds that in October 2008 the Arkansas Task Force for the 21st Century Economy found and recommended that:
   1. Education, research and development, entrepreneurship, risk capital, existing business innovation, and cyberinfrastructure are the most critical roles to Arkansas's success in the twenty-first century global economy;
   2. Twenty-six (26) programs, initiatives, and constitutional issues be given priority consideration as being key to competitiveness and contributing to economic development in the twenty-first century global economy;
   3. Resources should be dedicated to further study the structure and effectiveness of the state's economic development organizations because economic development is ever changing and the continuing review will provide information about twenty-first century demands on the organizations; and
   4. Arkansas should create a dedicated revenue stream for funding twenty-first century business development.
2. The General Assembly further finds that Arkansas:
   1. Needs an approach to an economy supported by knowledge-based jobs; and
   2. Lacks a recurring and predictable funding formula for economic development.

History Acts 2011, No. 706, § 1; 2017, No. 167, § 1.

Amendments. The 2017 amendment deleted “in 2009 the Arkansas Governor's Strategic Plan for Economic Development identified that” following “that” in (b).

15-3-503. Advice and recommendations.

1. The Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission shall advise the Governor, the General Assembly, the Arkansas Economic Development Commission, and other agencies responsible for programs enumerated in subsection (b) of this section.
2. 1. The board shall make recommendations regarding support and assistance for the accelerated growth of knowledge-based and high-technology jobs in the state through focused funding of the state's initiatives and programs.
   2. For funds in or allocated to the Arkansas Acceleration Fund, § 19-5-1243, the board shall make recommendations to the commission regarding the allocation or reallocation of funds and moneys for programs and initiatives authorized by the:
      1. Arkansas Research Alliance Act, § 15-3-301 et seq.;
      2. Innovate Arkansas Fund, § 19-5-1237;
      3. Venture Capital Investment Act of 2001, § 15-5-1401 et seq.;
      4. Supplemental science, technology, engineering, and math fund grants under § 6-17-2701 et seq.;
      5. Existing programs of the commission authorized under § 15-3-101 et seq., § 15-3-201 et seq., and § 15-3-401 et seq.;
      6. [Repealed.]
      7. Any other programs or activities aimed at the creation of knowledge-based and high-technology jobs;
      8. Arkansas Business and Technology Accelerator Act, § 15-3-601 et seq.; and
      9. Arkansas Small Business Innovation Research Matching Grant Program, § 15-3-701 et seq.

History Acts 2011, No. 706, § 1; 2013, No. 1095, § 1; 2015 (1st Ex. Sess.), No. 7, § 88; 2015 (1st Ex. Sess.), No. 8, § 88; 2017, No. 165, § 1; 2017, No. 166, § 1; 2017, No. 167, § 2; 2019, No. 237, § 2; 2019, No. 925, § 1.

Amendments. The 2013 amendment rewrote the section heading and (a); substituted “Arkansas Research Alliance” for “committee” in (b)(1) and (2); and added (b)(2)(G) and (b)(3).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “Economic Development Commission” for “Science and Technology Authority” in (a); substituted “commission” for “authority” in the introductory language of (b)(2); and, in (b)(2)(E), substituted “commission” for “authority” and inserted “the Arkansas Research Alliance Act”.

The 2017 amendment by No. 165 added (b)(2)(H).

The 2017 amendment by No. 166 added (b)(2)(I).

The 2017 amendment by No. 167 rewrote the section heading; in (a), substituted “Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Research Alliance” and substituted “advise” for “serve in an advisory capacity to”; in (b)(1), substituted “board” for “Arkansas Research Alliance”; inserted “or allocated to” and substituted “board” for “Arkansas Research Alliance” in (b)(2); deleted “the Arkansas Research Alliance Act, § 15-3-301 et seq.” following “15-3-201 et seq.” in (b)(2)(E); deleted (b)(3); and made stylistic changes.

The 2019 amendment by No. 237 repealed (b)(2)(F).

The 2019 amendment by No. 925 substituted “Venture Capital Investment Act of 2011, § 15-5-1401 et seq.” for “Arkansas Risk Capital Matching Fund Act of 2007, § 15-5-1601 et seq.” in (b)(2)(C).

Effective Dates. Acts 2017, No. 165, § 3: Oct. 1, 2017.

Acts 2017, No. 166, § 3: Oct. 1, 2017.

15-3-504. [Repealed.]

Publisher's Notes. This section, concerning committee members of the Arkansas Acceleration Fund Committee, was repealed by Acts 2013, No. 1095, § 2. The section was derived from Acts 2011, No. 706, § 1.

15-3-505. [Repealed.]

Publisher's Notes. This section, concerning recommendations, was repealed by Acts 2017, No. 167, § 3. The section was derived from Acts 2011, No. 706, § 1; 2013, No. 1095, § 3; 2015 (1st Ex. Sess.), No. 7, § 89; 2015 (1st Ex. Sess.), No. 8, § 89.

Subchapter 6 — Arkansas Business and Technology Accelerator Act

Effective Dates. Acts 2017, No. 165, § 3: Oct. 1, 2017.

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-3-601. Title.

This subchapter shall be known and may be cited as the “Arkansas Business and Technology Accelerator Act”.

History Acts 2017, No. 165, § 2.

15-3-602. Legislative findings.

The General Assembly finds that:

1. Corporate growth requires the infusion of innovative ideas, products, and services;
2. A critical component of creating high-skilled, high-wage jobs is the encouragement of the Arkansas innovation entrepreneurial ecosystem to develop technological products and services;
3. Economic growth can be fostered by linking innovative new ideas, products, and services by entrepreneurs and start-up companies to corporate sponsors seeking the commercialization of new products and services; and
4. An inducement, in the form of a grant program, is needed to encourage Arkansas businesses to sponsor business and technology programs to mentor start-up companies, resulting in an infusion of new products and services to fuel corporate growth.

History Acts 2017, No. 165, § 2.

15-3-603. Definitions.

As used in this subchapter:

1. “Business and technology accelerator” means a full-time, immersive program administered by an eligible applicant to potentially invest in, mentor, and accelerate commercial development of start-up businesses;
2. “Business and technology accelerator grant” means a discretionary grant of up to two hundred fifty thousand dollars ($250,000) for each approved business and technology accelerator application; and
3. “Eligible applicant” means an entity that is:
   1. Registered as a business entity in good standing with the Secretary of State; and
   2. Principally engaged in one (1) or more of the following categories of business or industry:
      1. A manufacturer classified in sectors 31-33 of the 2012 North American Industry Classification System;
      2. A business that:
         1. Is primarily engaged in the design and development of prepackaged software, digital content production and preservation, computer processing and data preparation services, or information retrieval services; and
         2. Derives at least seventy-five percent (75%) of its sales revenue from out of state;
      3. An office sector business whose business operations support primary business needs, including without limitation customer service, credit accounting, telemarketing, claims processing, and other administrative functions that:
         1. Is a nonretail business; and
         2. Derives at least seventy-five percent (75%) of its sales revenue from out of state;
      4. A national or regional corporate headquarters as classified in code 551114 of the 2012 North American Industry Classification System;
      5. A scientific and technical services business that derives at least seventy-five percent (75%) of its sales revenue from out of state;
      6. A firm primarily engaged in commercial, physical, and biological research as classified in code 541711 or code 541712 of the 2012 North American Industry Classification System; and
      7. A firm engaged in one (1) or more of the following categories:
         1. Advanced materials and manufacturing systems;
         2. Agriculture, food processing, and environmental sciences;
         3. Biotechnology, bioengineering, and life sciences;
         4. Information technology;
         5. Transportation logistics; and
         6. Internet-enabled technology or service solutions for one (1) or more of the categories described in subdivisions (3)(B)(vii)(a)-(e) of this section.

History Acts 2017, No. 165, § 2.

15-3-604. Administration.

1. 1. The Arkansas Business and Technology Accelerator Grant Program is created.
   2. The Division of Science and Technology of the Arkansas Economic Development Commission shall administer the program.
2. The division shall:
   1. Create application forms to be submitted by eligible businesses seeking a business and technology accelerator grant from the program;
   2. Devise an application process that:
      1. Defines the eligibility criteria for a business and technology accelerator grant; and
      2. Establishes application submittal and review processes;
   3. Define a process by which business and technology accelerator grants may be awarded; and
   4. Execute standard legal grant agreements and other documentation governing the disbursement and use of business and technology accelerator grants.

History Acts 2017, No. 165, § 2.

15-3-605. Application requirements.

1. To request a business and technology accelerator grant under this subchapter, an applicant shall complete and submit the application forms prescribed by the Division of Science and Technology of the Arkansas Economic Development Commission under § 15-3-604.
2. An applicant shall submit an application for each proposed business and technology accelerator grant.
3. The division shall:
   1. Review applications:
      1. In order of receipt, as determined by the date and time stamp of receipt; and
      2. In accordance with rules promulgated by the division under § 15-3-608;
   2. Not consider an incomplete or noncompliant application and shall return an incomplete or a noncompliant application without further review;
   3. Review each application with the advice and recommendation of the Commercialization Committee of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission; and
   4. Provide advice to the Director of the Arkansas Economic Development Commission concerning the applications for business and technology accelerator grants reviewed by the division.
4. 1. Applications submitted to the division are subject to the Freedom of Information Act of 1967, § 25-19-101 et seq.
   2. To the extent an applicant believes that information in an application is confidential or otherwise exempt under the Freedom of Information Act of 1967, § 25-19-101 et seq., the applicant shall specifically designate in writing the information the applicant believes to be confidential or exempt and the basis for the confidentiality or exemption on that portion of the application in which the information appears.

History Acts 2017, No. 165, § 2; 2019, No. 910, § 351.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (c)(4).

15-3-606. Business and technology accelerator grant awards.

1. A business and technology accelerator grant awarded under this subchapter:
   1. Shall not:
      1. Be awarded under this subchapter unless offered in writing by the Director of the Arkansas Economic Development Commission; and
      2. Exceed two hundred fifty thousand dollars ($250,000); and
   2. Subject to funding and the discretion of the director, may be offered to an eligible applicant that successfully completes the application process.
2. The business and technology accelerator grant agreement between the Division of Science and Technology of the Arkansas Economic Development Commission and the eligible applicant shall delineate all requirements of the business and technology accelerator grant.
3. Disbursements for business and technology accelerator grants shall be made on a reimbursable basis, payable when invoices and financial reports are submitted to the division.

History Acts 2017, No. 165, § 2; 2019, No. 910, §§ 352, 353.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a)(1)(A); and deleted “executive” preceding “director” in (a)(2).

15-3-607. Program funding.

Business and technology accelerator grants awarded under this subchapter are limited by the amount of funds allocated to the Arkansas Business and Technology Accelerator Grant Program created under this subchapter.

History Acts 2017, No. 165, § 2.

15-3-608. Rules.

The Division of Science and Technology of the Arkansas Economic Development Commission shall promulgate rules to implement and administer this subchapter.

History Acts 2017, No. 165, § 2.

Subchapter 7 — Arkansas Small Business Innovation Research Matching Grant Program

Effective Dates. Acts 2017, No. 166, § 3: Oct. 1, 2017.

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-3-701. Title.

This subchapter shall be known and may be cited as the “Arkansas Small Business Innovation Research Matching Grant Program”.

History Acts 2017, No. 166, § 2.

15-3-702. Legislative findings.

The General Assembly finds that:

1. The federal Small Business Innovation Research Program encourages innovative small businesses to engage in federal research and commercialization that has the potential for technological innovation and commercialization;
2. Stimulating research and commercialization grows the economy by leveraging investment, creating exportable products and services, and creating and retaining high-wage, high-tech jobs in moderately and highly skilled occupations;
3. Arkansas consistently ranks poorly among states in the number of federal Small Business Innovation Research grants awarded; and
4. An inducement, in the form of a matching grants program, is needed to encourage Arkansas businesses to apply for federal Small Business Innovation Research grants and realize economic benefits of commercialized research.

History Acts 2017, No. 166, § 2.

15-3-703. Definitions.

As used in this subchapter:

1. “Eligible business” means a for-profit business that:
   1. Is registered as a business entity in good standing with the Secretary of State; and
   2. Has its principal place of business in Arkansas;
2. “Matching grant” means a discretionary grant of up to fifty percent (50%) of the amount of a federal Small Business Innovation Research grant for each approved matching grant application;
3. “Principal investigator/project manager” means the primary individual designated by an eligible business to provide the scientific and technical direction to a project supported by a matching grant; and
4. “Small Business Innovation Research Program” means the federal program administered by the United States Small Business Administration according to regulations adopted pursuant to 15 U.S.C. § 638, as it existed on October 1, 2016, which provides funds for Phase I and Phase II Small Business Innovation Research grants through participating federal agencies.

History Acts 2017, No. 166, § 2.

15-3-704. Administration.

1. 1. The Arkansas Small Business Innovation Research Matching Grant Program is created.
   2. The Division of Science and Technology of the Arkansas Economic Development Commission shall administer the program.
2. The division shall:
   1. Create application forms to be submitted by eligible businesses seeking a matching grant from the program;
   2. Devise an application process that:
      1. Defines the eligibility criteria for a matching grant; and
      2. Establishes application submittal and review processes;
   3. Define a process by which matching grants may be awarded; and
   4. Execute standard legal grant agreements and other documentation governing the disbursement and use of matching grants.

History Acts 2017, No. 166, § 2.

15-3-705. Eligibility.

1. To be eligible for a matching grant under this subchapter, an applicant shall:
   1. Be an eligible business; and
   2. Certify that:
      1. The eligible business:
         1. For Phase I applications, has received a Small Business Innovation Research grant from a sponsoring agency in response to a specific federal solicitation; or
         2. For Phase II applications, has:
            1. Submitted a final Phase I report to the sponsoring agency;
            2. Demonstrated that the sponsoring agency has interest in the Phase II proposal; and
            3. Submitted a Phase II proposal to the sponsoring agency; and
      2. All federal Small Business Innovation Research grant requirements will be met.
2. An eligible business awarded a matching grant under this subchapter shall:
   1. Remain in Arkansas for the duration of the matching grant project;
   2. Designate an Arkansas resident or employee as the principal investigator/project manager during the duration of the matching grant; and
   3. Be principally engaged in one (1) or more of the following targeted business activities:
      1. Advanced materials and manufacturing systems;
      2. Agriculture, food, and environmental sciences;
      3. Biotechnology, bioengineering, and life sciences;
      4. Information technology;
      5. Transportation logistics; and
      6. Bio-based products.

History Acts 2017, No. 166, § 2; 2019, No. 384, § 1.

Amendments. The 2019 amendment added “and” in (a)(1).

15-3-706. Application requirements.

1. To request a matching grant under this subchapter, an applicant shall complete and submit the application forms prescribed by the Division of Science and Technology of the Arkansas Economic Development Commission under § 15-3-704.
2. An applicant shall submit an application for each federal Phase I and federal Phase II grant proposal for which the applicant is requesting a matching grant.
3. The division shall:
   1. Review applications:
      1. In order of receipt, as determined by the date and time stamp of receipt; and
      2. In accordance with rules promulgated by the division under § 15-3-709;
   2. Not consider an incomplete or noncompliant application and shall return an incomplete or a noncompliant application without further review;
   3. Review each application with the advice and recommendation of the Commercialization Committee of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission; and
   4. Provide advice to the Director of the Arkansas Economic Development Commission concerning the applications for matching grants reviewed by the division.
4. 1. Applications submitted to the division are subject to the Freedom of Information Act of 1967, § 25-19-101 et seq.
   2. To the extent an applicant believes that information in an application is confidential or otherwise exempt under the Freedom of Information Act of 1967, § 25-19-101 et seq., the applicant shall specifically designate in writing the information the applicant believes to be confidential or exempt and the basis for the confidentiality or exemption on that portion of the application in which the information appears.

History Acts 2017, No. 166, § 2; 2019, No. 910, § 354.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (c)(4).

15-3-707. Matching grant awards.

1. A matching grant awarded under this subchapter:
   1. Shall not:
      1. Be awarded under this subchapter unless offered in writing by the Director of the Arkansas Economic Development Commission; and
      2. Exceed fifty percent (50%) of the federal Small Business Innovation Research award, up to:
         1. Fifty thousand dollars ($50,000) for a matching grant awarded to match a federal Phase I award; and
         2. One hundred thousand dollars ($100,000) for a matching grant awarded to match a federal Phase II award; and
   2. Subject to funding and the discretion of the executive director, may be offered to an eligible applicant that successfully completes the application process.
2. The matching grant agreement between the Division of Science and Technology of the Arkansas Economic Development Commission and the eligible applicant shall delineate all requirements of the matching grant.
3. At least fifty-one percent (51%) of the amount awarded for the matching grant shall be spent in Arkansas.
4. Disbursements for matching grants shall be made on a reimbursable basis, payable when invoices and financial reports are submitted to the division.
5. An eligible business shall not receive more than three (3) matching grants under this subchapter.

History Acts 2017, No. 166, § 2; 2019, No. 910, § 355.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a)(1)(A).

15-3-708. Program funding.

Matching grants awarded under this subchapter are limited by the amount of funds allocated to the Arkansas Small Business Innovation Research Matching Grant Program created under this subchapter.

History Acts 2017, No. 166, § 2.

15-3-709. Rules.

The Division of Science and Technology of the Arkansas Economic Development Commission shall promulgate rules to carry out the purposes of this subchapter.

History Acts 2017, No. 166, § 2.

Subchapter 1 — General Provisions

Effective Dates. Acts 1979, No. 65, § 10: approved Feb. 7, 1979. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the State of Arkansas has had heretofore an inadequate program for the economic development of the State and its several sections; that on account of such inadequate program the State of Arkansas has been unable to provide for its inhabitants sufficient opportunities in agriculture and industry; that unless an adequate program for the economic development of the State be immediately undertaken the State of Arkansas will suffer immediate and irreparable further loss in the opportunity for economic expansion; and that only by the passage of this Act and giving immediate effect to its provisions can the State of Arkansas further secure for its inhabitants opportunities for economic development. An emergency, therefore, is hereby declared to exist, and this Act being necessary for the preservation of the public peace, health and safety shall take effect and be in full force from and after its passage.”

Acts 1981, No. 41, § 10: Feb. 10, 1981. Emergency clause provided: “It is hereby found and determined by the General Assembly that the Arkansas Industrial Development Commission as established by Act 404 of 1955 rendered great service to the State of Arkansas in developing programs, objectives, and goals for the industrial development of this State, and that the ‘AIDC’ emblem became symbolic, not only in this State but throughout the Nation, of Arkansas' outstanding industrial and economic potential and growth; and that the reestablishment of the Arkansas Department of Industrial Development and the Arkansas Industrial Development Commission (AIDC) is essential to the State in gaining the continuing advantages of the economic progress instituted more than a quarter of a century ago; and that the immediate passage of this Act is necessary to accomplish said purposes and to provide means for accelerated progress in the economic development of this State, thereby providing for increased payrolls, job opportunities, and tax income for the support of the public services of this State. Therefore, an emergency is hereby declared to exist and this Act, being necessary for the immediate preservation of the public peace, health, and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1999, No. 1584, § 5: Apr. 15, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that unless this act becomes effective immediately, there is substantial risk of Arkansas jobs leaving this state. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-101. Title.

This act shall be referred to and may be cited as the “Arkansas Industrial Development Act”.

History. Acts 1981, No. 41, § 1; A.S.A. 1947, § 9-504.

Meaning of “this act”. Acts 1981, No. 41, codified as §§ 15-4-101, 15-4-202, 15-4-203, 25-11-101, 25-11-102.

15-4-102. Construction.

1. This section and §§ 15-4-101, 15-4-201 — 15-4-204, 15-4-206, 15-4-209, 15-4-210, and § 15-4-501 et seq. shall be construed liberally.
2. The enumeration of any object, purpose, power, manner, method, or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods, or things.

History. Acts 1979, No. 65, § 7; A.S.A. 1947, § 9-540; Acts 2013, No. 1185, § 2.

Amendments. The 2013 amendment substituted “15-4-210” for “15-4-212” in (a).

15-4-103. Registration of community development corporations — Definition.

1. As used in this section, “qualified community development corporation” means an organization chartered under the Arkansas nonprofit corporation law which:
   1. Is governed by a board consisting of the area's business, professional, and civic leaders;
   2. Has a record of implementing economic development projects or whose articles of incorporation or bylaws state the organization's mission to develop and improve local communities through economic and related development;
   3. Has secured from the federal Internal Revenue Service a 26 U.S.C. § 501(c)(3) tax exemption status; and
   4. Otherwise meets the federal definition of a community development corporation.
2. The Secretary of State shall maintain a registry of all qualified community development corporations established under the laws of Arkansas.
3. 1. Every qualified community development corporation shall register with the Secretary of State within ninety (90) days after August 13, 1993, or within ninety (90) days after the date of its establishment if established after August 13, 1993.
   2. The Secretary of State shall collect a registration fee of twenty-five dollars ($25.00) from each qualified community development corporation registered under this section.

History. Acts 1993, No. 989, §§ 1-3.

Cross References. Arkansas Nonprofit Corporation Act, § 4-28-201 et seq.

Arkansas Nonprofit Corporation Act of 1993, § 4-33-101 et seq.

15-4-104. Bond guaranty programs for employee stock purchases.

1. When an Arkansas-based employee stock ownership plan buys at least twenty percent (20%) of the stock of an Arkansas-based business entity formed under Arkansas law and the Director of the Arkansas Economic Development Commission determines that had it not been for the purchase by the employee stock ownership plan that Arkansas jobs would have been lost, the Arkansas-based business entity shall be qualified for any bond guaranty programs administered by the Arkansas Economic Development Commission or the Arkansas Development Finance Authority.
2. The commission and the authority shall promulgate rules necessary for the implementation of this section.

History. Acts 1999, No. 1584, § 1; 2019, No. 315, § 1054; 2019, No. 910, § 356.

Amendments. The 2019 amendment by No. 315 substituted “rules” for “regulations” in (b).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a).

Subchapter 2 — Arkansas Economic Development Council

Cross References. Arkansas Energy Reorganization and Policy Act of 1981, § 15-10-201 et seq.

Compacts between counties and cities for industrial development, § 14-165-201 et seq.

Effective Dates. Acts 1939, No. 68, § 10: Feb. 10, 1939. Emergency clause provided: “Because the act creating the present Agricultural and Industrial Commission expires on March 25, 1939; and after that time there will be no other Commission to carry into effect the provisions of the Tax Exemption Amendment; and such a Commission being required; and, because competitive bidding for new industrial investments among our neighboring states is now intense, and Arkansas should take full advantage of every opportunity; and, it being immediately necessary for the preservation of the public peace, health and safety; an emergency is hereby declared to exist, and this act shall take effect and be in full force from and after its passage and approval.”

Acts 1955, No. 404, § 40: approved Mar. 29, 1955. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the State of Arkansas has had heretofore an inadequate program for the agricultural and industrial development of the state and of its several sections, that on account of such inadequate program the State of Arkansas has been unable to provide for its inhabitants sufficient opportunities in agriculture and industry, that on account thereof the State of Arkansas has suffered great losses of population and a decreasing standard of living for its inhabitants, that unless an adequate program for the agricultural and industrial development of the state be immediately undertaken the State of Arkansas will suffer immediate and irreparable further loss in population and the opportunity for agricultural and industrial expansion, and that only by the passage of this act and giving immediate effect to its provisions can the State of Arkansas prevent further losses in population and secure to its inhabitants opportunities for agricultural and industrial development. An emergency, therefore, is hereby declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall, except as to Sections 11 and 12, hereof, take effect and be in full force from and after its passage.”

Acts 1965, No. 553, § 3: Mar. 24, 1965. Emergency clause provided: “It is hereby found and determined by the General Assembly that the activities of the Industrial Development Commission are vital to the economic growth and expansion of this state and in providing vitally needed new job opportunities in our rapidly changing technological world, and that an effective industrial development commission representing a broad cross-section of the various economic aspects of this state is highly desirable in order that said Commission might represent all phases of economic life, and that the immediate passage of this act is essential to provide additional members of said Commission in order that the same might accomplish the aforementioned objectives. Therefore, an emergency is hereby declared to exist and this act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1968 (2nd Ex. Sess.), No. 11, § 6: June 12, 1968. Emergency clause provided: “The General Assembly finding that the industrial development of the State of Arkansas is retarded on account of the lack of adequate financing available to secure and develop new industry within the state and to expand and develop presently existing industries, and that only by this act can additional financing for the industrial development of the state be made immediately available, an emergency, therefore, is hereby declared to exist, and this act being necessary for the preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1971, No. 443, § 3: June 30, 1971.

Acts 1979, No. 65, § 10: approved Feb. 7, 1979. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the State of Arkansas has had heretofore an inadequate program for the economic development of the State and its several sections; that on account of such inadequate program the State of Arkansas has been unable to provide for its inhabitants sufficient opportunities in agriculture and industry; that unless an adequate program for the economic development of the State be immediately undertaken the State of Arkansas will suffer immediate and irreparable further loss in the opportunity for economic expansion; and that only by the passage of this Act and giving immediate effect to its provisions can the State of Arkansas further secure for its inhabitants opportunities for economic development. An emergency, therefore, is hereby declared to exist, and this Act being necessary for the preservation of the public peace, health and safety shall take effect and be in full force from and after its passage.”

Acts 1981, No. 41, § 10: Feb. 10, 1981. Emergency clause provided: “It is hereby found and determined by the General Assembly that the Arkansas Industrial Development Commission as established by Act 404 of 1955 rendered great service to the State of Arkansas in developing programs, objectives, and goals for the industrial development of this State and that the ‘AIDC’ emblem became symbolic, not only in this State but throughout the Nation, of Arkansas' outstanding industrial and economic potential and growth; and that the reestablishment of the Arkansas Department of Industrial Development and the Arkansas Industrial Development Commission (AIDC) is essential to the State in gaining the continuing advantages of the economic progress instituted more than a quarter of a century ago; and that the immediate passage of this Act is necessary to accomplish said purposes and to provide means for accelerated progress in the economic development of this State, thereby providing for increased payrolls, job opportunities, and tax income for the support of the public services of this State. Therefore, an emergency is hereby declared to exist and this Act, being necessary for the immediate preservation of the public peace, health, and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1981, No. 249, § 4: Feb. 27, 1981. Emergency clause provided: “It is hereby found and determined by the General Assembly that the immediate passage of this act is necessary for Agricultural and Industrial interests to be properly represented on the Arkansas Industrial Development Commission. Therefore, an emergency is hereby declared to exist and this Act, being necessary for the immediate preservation for the public peace, health, and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1981, No. 452, § 5: Mar. 12, 1981. Emergency clause provided: “It is hereby found and determined by the General Assembly that the immediate passage of this act is necessary for Agricultural and Industrial interests to be properly represented on the Arkansas Industrial Development Commission. Therefore, an emergency is hereby declared to exist and this Act, being necessary for the immediate preservation for the public peace, health, and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1987, No. 91, § 3: Feb. 27, 1987. Emergency clause provided: “It is hereby found and determined by the General Assembly that the present composition of the Arkansas Industrial Development Commission is based upon the Congressional Districts as they existed over thirty years ago; that the representation should be more fairly representative of the various areas of the State; that this Act provides such equitable treatment; that Act 1005 expires on June 30, 1987 unless this Act goes into effect before that time; that unless this emergency clause is enacted this Act may not go into effect until after June 30, 1987. Therefore, an emergency is hereby declared to exist and this Act being immediately necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1987, No. 668, § 3: Apr. 6, 1987. Emergency clause provided: “It is hereby found and determined by the Seventy-Sixth General Assembly that the immediate passage of this Act will help to insure that agricultural interests are properly represented on the Arkansas Industrial Development Commission. Therefore, an emergency is hereby declared to exist, and this Act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1989, No. 885, § 6: Mar. 22, 1989. Emergency clause provided: “It is hereby found and declared that there is an immediate and urgent need to facilitate the development of agriculture and agricultural businesses in the State of Arkansas. Therefore, an emergency is declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1989 (1st Ex. Sess.), No. 280, § 41: July 1, 1989. Emergency clause provided: “It is hereby found and determined by the Seventy-Seventh General Assembly, that the Constitution of the State of Arkansas prohibits the appropriation of funds for more than a two (2) year period; that the effectiveness of this Act on July 1, 1989 is essential to the operation of the agency for which the appropriations in this Act are provided, and that in the event of an extension of the Regular Session, the delay in the effective date of this Act beyond July 1, 1989 could work irreparable harm upon the proper administration and provision of essential governmental programs. Therefore, an emergency is hereby declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after July 1, 1989.”

Acts 1995, No. 589, § 6: Mar. 13, 1995. Emergency clause provided: “It is hereby found and determined by the General Assembly that the provisions of this act are of critical importance to the state's economic development and potential for marketing Arkansas products in foreign markets. The maintenance of overseas offices is vital to the continuation of market development for Arkansas's efforts. Therefore an emergency is hereby declared to exist and this act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 250, § 258: Feb. 24, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly that Act 1211 of 1995 established the procedure for all state boards and commissions to follow regarding reimbursement of expenses and stipends for board members; that this act amends various sections of the Arkansas Code which are in conflict with the Act 1211 of 1995; and that until this cleanup act becomes effective conflicting laws will exist. Therefore an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governer, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2007, No. 1602, § 8: July 1, 2007. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act renames the Department of Economic Development and the Arkansas Economic Development Commission and that the ideal time to implement these names changes is at the beginning of the state's fiscal year. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2007.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-201. Arkansas Economic Development Council — Creation.

There is created and established at the seat of government of this state a council to be known as the “Arkansas Economic Development Council”.

History. Acts 1955, No. 404, § 1 [2]; A.S.A. 1947, § 9-505; Acts 1997, No. 540, § 19; 2007, No. 1602, § 3; 2013, No. 1185, § 1.

A.C.R.C. Notes. Acts 2007, No. 1602, § 1, provided: “SECTION 1. Department of Economic Development renamed Arkansas Economic Development Commission.

“(a)(1) The Department of Economic Development, as it is referred to or empowered through the Arkansas Code, is renamed. “(2) In its place, the Arkansas Economic Development Commission is established, succeeding to the general powers and responsibilities previously assigned to the Department of Economic Development. “(3) The Director of the Department of Economic Development shall identify and revise all interagency agreements, financial instruments, funds, and other necessary legal documents in order to effect this change.

“(b) Nothing in this act shall be construed as impairing the powers and authority of the Department of Economic Development before the effective date of the name change.

“(c) Appropriations authorized for the personal services and operating expenses of the Department of Economic Development may be utilized for the personal services and operating expenses of the Arkansas Economic Development Commission.”

Acts 2007, No. 1602, § 2, provided: “SECTION 2. Arkansas Economic Development Commission renamed Arkansas Economic Development Council.

“(a)(1) The Arkansas Economic Development Commission, as it is referred to or empowered through the Arkansas Code, is renamed. “(2) In its place, the Arkansas Economic Development Council is established, succeeding to the general powers and responsibilities previously assigned to the Arkansas Economic Development Commission. “(3) The Chair of the Arkansas Economic Development Commission shall identify and revise all interagency agreements, financial instruments, funds, and other necessary legal documents in order to effect this change.

“(b) Nothing in this act shall be construed as impairing the powers and authority of the Arkansas Economic Development Commission before the effective date of the name change.

“(c) Appropriations authorized for the personal services and operating expenses of the Arkansas Economic Development Commission may be utilized for the personal services and operating expenses of the Arkansas Economic Development Council.”

Acts 2007, No. 1602, § 6, provided: “SECTION 6.

“(a) This act shall not be construed as impairing the continued effectiveness of any rules or orders promulgated or issued by the Department of Economic Development or the Arkansas Economic Development Commission before the effective date of this act.

“(b) This act shall not be construed as extinguishing or otherwise affecting the unexpired terms of any current members of the Arkansas Economic Development Commission.”

Acts 2007, No. 1602, § 7, provided: “SECTION 7. The Arkansas Code Revision Commission shall make all changes in the Arkansas Code necessary to effectuate the intent of this act.”

Publisher's Notes. Acts 1939, No. 68, §§ 1, 2, which created the State Agricultural and Industrial Commission, were superseded by Acts 1945, No. 138, which abolished the commission and transferred its functions to the Division of Agriculture and Industry in the Arkansas Resources and Development Commission. Acts 1955, No. 404, § 7 abolished the Division of Agriculture and Industry in the Arkansas Resources and Development Commission and transferred its functions to the Arkansas Industrial Development Commission. Acts 1971, No. 38, § 6 transferred the Arkansas Industrial Development Commission and its functions, by a type 4 transfer, to the Department of Industrial Development. Acts 1979, No. 65, § 2 created the Department of Economic Development and the Arkansas Economic Development Commission, transferring the Arkansas Department of Industrial Development and the Arkansas Industrial Development Commission, together with their functions, to the Department of Economic Development, except where otherwise expressly specified.

Acts 1981, No. 41, § 7, abolished the Arkansas Department of Economic Development and the Arkansas Economic Development Commission; transferred all contracts, agreements, liabilities, funds, and appropriations to the Arkansas Department of Industrial Development and the Arkansas Industrial Development Commission; and transferred all powers, functions, and duties of the Director of the Department of Economic Development and all laws governing the appointment, replacement, or removal of the Director of the Department of Economic Development to the Director of the Department of Industrial Development and the Industrial Development Commission.

Amendments. The 2007 amendment substituted “council” for “commission” in three places.

The 2013 amendment added “Arkansas Economic Development Council” to the section heading and deleted “hereinafter referred to as the ‘council’” at the end.

Cross References. Arkansas Economic Development Council, § 25-11-102.

15-4-202. Arkansas Economic Development Council — Members.

1. 1. The Arkansas Economic Development Council shall consist of sixteen (16) members, who shall be qualified electors of this state, to be appointed by the Governor with the advice and consent of the Senate.
   2. 1. At least three (3) members shall be appointed from each of the four (4) congressional districts existing on January 1, 2012.
      2. Four (4) members shall be appointed at large.
   3. The members appointed by the Governor shall be selected with special reference to their knowledge of and interest in the resources and economic development of the State of Arkansas.
2. For each member appointed by the Governor, the term of office shall commence on January 15 following the expiration date of the preceding term and shall end on January 14 of the fourth year following the year in which the regular term commenced.
3. A vacancy arising in the membership of the council appointed by the Governor for any reason other than expiration of the regular terms for which the members were appointed shall be filled by appointment by the Governor to be thereafter effective until the expiration of the terms, subject to the confirmation of the Senate when it is next in session.
4. Before entering upon his or her duties, each member of the council shall take, subscribe, and file in the office of the Secretary of State an oath to support the United States Constitution and the Arkansas Constitution and to faithfully perform the duties of the office upon which he or she is about to enter.
5. Members of the council may receive expense reimbursement and stipends in accordance with § 25-16-901 et seq.
6. Members of the council, acting in good faith, are not personally liable under this subchapter.

History. Acts 1955, No. 404, §§ 3-6; 1965, No. 553, §§ 1, 2; 1979, No. 65, § 3; 1981, No. 41, § 4; 1981, No. 249, §§ 1, 2; 1981, No. 452, §§ 1-3; 1985, No. 1005, § 2; A.S.A. 1947, §§ 9-506 — 9-509; Acts 1987, No. 91, § 1; 1987, No. 668, § 1; 1989, No. 885, § 1; 1997, No. 250, § 95; 2013, No. 1185, § 1.

Amendments. The 2013 amendment added “Arkansas Economic Development Council” to the section heading; substituted “qualified electors” for “residents and qualified electors” in (a)(1); substituted “2012” for “1987” in (a)(2)(A); substituted “economic development” for “industrial development” in (a)(3); and added (f).

15-4-203. Arkansas Economic Development Council — Organization and meetings.

1. 1. The Arkansas Economic Development Council shall select a chair and vice chair annually from its membership.
   2. The Director of the Arkansas Economic Development Commission shall be ex officio Secretary of the Arkansas Economic Development Council but shall have no vote on matters coming before it.
2. 1. The council may adopt and modify rules for the conduct of its business and shall keep a public record of its transactions, findings, and determinations.
   2. The rules shall provide for regular meetings and for special meetings at the call of the Chair of the Arkansas Economic Development Council or of the Vice Chair of the Arkansas Economic Development Council, if he or she is for any reason the acting chair, either at his or her own instance or upon the written request of at least seven (7) members.
   3. The rules adopted under this section may allow for meetings to be held by conference call or other means of communication to conduct the council's business.
   4. A quorum shall consist of at least seven (7) members present at a regular or special meeting, and an affirmative vote of seven (7) members shall be necessary for the disposition of any business.

History. Acts 1955, No. 404, § 9; 1968 (2nd Ex. Sess.), No. 11, § 1; 1979, No. 65, § 4; 1981, No. 41, § 5; A.S.A. 1947, § 9-512; Acts 1997, No. 540, § 64; 2013, No. 1185, § 1; 2019, No. 910, § 357.

Amendments. The 2013 amendment added “Arkansas Economic Development Council” to the section heading; substituted “annually” for “from time to time” in (a)(1); inserted “Executive” near the beginning of (a)(2); substituted “seven (7)” for “six (6)” at the end of (b)(2); inserted (b)(3) and redesignated former (b)(3) as present (b)(4); and, in (b)(4), substituted “at least seven (7) members” for “not fewer than six (6) members” and “seven (7) members” for “that number”.

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a)(2).

15-4-204. Arkansas Economic Development Council — Functions, powers, and duties.

1. The Arkansas Economic Development Council may serve in an advisory capacity to the Director of the Arkansas Economic Development Commission, the Governor, and the General Assembly.
2. A primary function of the council is to approve the issuance of guaranties of amortization payments on Act No. 9 bonds under the Industrial Revenue Bond Guaranty Law, § 15-4-601 et seq.
3. The addition or elimination of international offices of the Arkansas Economic Development Commission by the commission shall first be approved by the council.
4. By a majority vote, the council may establish or dissolve committees and subcommittees as needed.

History. Acts 1955, No. 404, §§ 7, 8; 1971, No. 443, § 1; 1979, No. 65, § 4; A.S.A. 1947, §§ 9-510, 9-511; Acts 2013, No. 1185, § 1; 2019, No. 202, § 1; 2019, No. 910, § 358.

Amendments. The 2013 amendment added “Arkansas Economic Development Council” to the section heading; substituted “may serve in an advisory capacity to the Executive Director of the Arkansas Economic Development Commission, the Governor, and the General Assembly” for “shall have and be subject to all functions, powers, and duties imposed upon it by this act” in (a); rewrote (b) and (c); and added (d).

The 2019 amendment by No. 202 inserted “or dissolve” in (d).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a).

15-4-205. Arkansas Economic Development Commission — Status and purpose.

1. The Arkansas Economic Development Commission is the state agency responsible for implementing programs and policies aimed at improving the state's economic condition.
2. The purposes of the commission are to:
   1. Serve as the primary governmental source for carrying out the Governor's plan for economic development in the state;
   2. Promote the state with a central focus on state, local, and regional economic development efforts;
   3. Coordinate the activities of private and public efforts to advance economic development in the state;
   4. Compile and disseminate all available information pertinent to the economic opportunities afforded by the state;
   5. Receive and disburse funds for the purpose of community and economic development; and
   6. Perform other duties as designated by the Governor.

History. Acts 1939, No. 68, § 3; A.S.A. 1947, § 9-501; Acts 1997, No. 540, § 65; 2013, No. 1185, § 1; 2019, No. 202, § 2.

Amendments. The 2013 amendment substituted “Status and purpose” for “Information and investigations” in the section heading; and rewrote the section.

The 2019 amendment inserted “state, local, and” in (b)(2).

Cross References. Creation, director, organization, and personnel of the Arkansas Economic Development Commission, § 25-11-101.

Establishment of centers of excellence, § 6-61-129.

15-4-206. Arkansas Economic Development Commission — Director.

1. 1. The Director of the Arkansas Economic Development Commission shall be appointed by the Governor subject to confirmation by the Senate.
   2. The director shall serve at the pleasure of the Governor.
   3. The director shall report to the Secretary of the Department of Commerce.
2. The director shall:
   1. Have the experience necessary to lead the Arkansas Economic Development Commission as determined by the Secretary of the Department of Commerce;
   2. Be custodian of all property held in the name of the commission; and
   3. Be the ex officio disbursing agent of all funds available for the commission's use.

History. Acts 1955, No. 404, § 10; 1979, No. 65, § 4; 1985, No. 712, §§ 1, 2; A.S.A. 1947, § 9-513; Acts 1997, No. 540, § 20; 2013, No. 1185, § 1; 2019, No. 910, § 359.

A.C.R.C. Notes. Acts 2016, No. 226, § 43, provided: “ADDITIONAL PAYMENTS AUTHORIZED. The Arkansas Industrial and Economic Development Foundation is hereby authorized to make additional payments to the Director of the Arkansas Economic Development Commission, from private funding sources, and upon prior approval from the Arkansas Economic Development Commission, the Arkansas Industrial and Economic Development Foundation, and the Governor. Such additional payments to the Director of the Arkansas Economic Development Commission shall not be considered salary and shall not be deemed or construed to exceed the maximum salaries established for unclassified employees by the General Assembly. Nothing in this section may be construed to reduce or eliminate the authority granted elsewhere in the Arkansas statute for the payment of allowances or bonuses to unclassified employees.

“The provisions of this section shall be in effect only from July 1, 2016 through June 30, 2017.”

Amendments. The 2013 amendment inserted “Executive” in the section heading; redesignated (a) as (a)(1) and (2); inserted “Executive” in (a)(1); inserted “executive” in (a)(2); rewrote (b); and deleted (c) and (d).

The 2019 amendment substituted “Director” for “Executive Director” in the section heading; substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a)(1); deleted “executive” preceding “director” in (a)(2); added (a)(3); deleted “executive” preceding “director” in the introductory language of (b); and substituted “Secretary of the Department of Commerce” for “Governor” in (b)(1).

Cross References. Creation, director, organization, and personnel of the Arkansas Economic Development Commission, § 25-11-101.

15-4-207, 15-4-208. [Repealed.]

Publisher's Notes. These sections, concerning duties of Economic Development Commission regarding tax exemption to industries and cooperation of Economic Development Commission with other states and federal government, were repealed by Acts 2013, No. 1185, § 1. The sections were derived from the following sources:

15-4-207. Acts 1939, No. 68, § 4; A.S.A. 1947, § 9-502; Acts 1997, No. 540, § 66.

15-4-208. Acts 1939, No. 68, § 5; A.S.A. 1947, § 9-503; Acts 1997, No. 540, § 66.

15-4-209. Arkansas Economic Development Commission — Functions, powers, and duties.

1. In accordance with state and federal law, the Arkansas Economic Development Commission shall:
   1. Administer grants, loans, cooperative agreements, tax credits, guaranties, and other incentives, memoranda of understanding, and conveyances to assist with economic development in the state;
   2. In concert with others, periodically develop a strategic plan to guide the commission in the pursuit of the commission's stated mission;
   3. Cooperate with public and private organizations to advance the commission's goals and objectives as identified in the commission's most recent strategic plan;
   4. Administer the Small Cities Community Development Block Grant (CDBG) Program with funds received from the United States Government;
   5. Assist rural communities and agencies with funding, educational opportunities, and technical assistance to enhance the quality of life in rural areas of Arkansas;
   6. To the extent that funds are available, assist with the cost of infrastructure in the pursuit of new or expanded job creation;
   7. Encourage the exportation of Arkansas-produced goods and services;
   8. Assist women-owned businesses and minority-owned businesses through certification, loan guaranties, technical assistance, or grants to encourage their growth and development;
   9. Provide assistance to cities, counties, and regions as they develop and implement strategic plans for community and economic development;
   10. Establish and administer a business and industry training program to train both new and existing employees;
   11. Cooperate with other international, multistate, regional, federal, state, and local efforts aimed at providing resources or assistance to economic development;
   12. Work with communities and regions to develop ongoing processes focused on the creation and recruitment of new businesses and the retention of existing businesses;
   13. Utilize all available means of securing financing for business development statewide;
   14. Serve as the state's focal point for the establishment of foreign trade zones under the programs offered by the Unites States Department of Commerce, including without limitation serving as the grantee of Foreign Trade Zone 14;
   15. Promote innovation and the commercialization of ideas into viable Arkansas businesses;
   16. Highlight the state's ability to host film projects and make available resources to assist in building the film industry in the state;
   17. Comply with procedures for the disposal of properties acquired by the commission;
   18. Administer the provisions of Arkansas Constitution, Amendment 27, providing a limited exemption from certain tax liabilities;
   19. Assist in the creation and growth of small businesses; and
   20. Carry out any other duties or responsibilities as designated by the Governor.
2. The commission may:
   1. Contract and be contracted with;
   2. Purchase, lease, rent, sell, and receive bequests or donations of real, corporeal, or personal property from any lawful source;
   3. Establish and maintain international offices, as approved by the Arkansas Economic Development Council, to assist with the export of Arkansas-produced goods and services as well as foreign direct investment, either through the use of contractual employees or other means;
   4. Conduct studies as necessary to assess any economic development need or asset; and
   5. Promulgate rules necessary to implement the programs and services offered by the commission.

History. Acts 1955, No. 404, § 8; 1971, No. 443, § 1; 1979, No. 65, § 4; A.S.A. 1947, § 9-511; Acts 2013, No. 1185, § 1; 2019, No. 202, § 3.

A.C.R.C. Notes. Acts 2016, No. 226, § 33, provided: “MULTI-USE FACILITIES. The Arkansas Economic Development Commission (AEDC) shall structure its annual update to the Five Year Consolidated Plan and the new Five Year Consolidated Plan to reflect the legislative intent for a priority to be placed on the use of Community Development Block Grant (CDBG) funds for Multi-use facilities that will offer combined facilities for programs commonly offered in separate facilities such as senior centers, public health centers, childcare centers and community centers. AEDC shall report the methodology for complying with this priority to the Legislative Council.

“The provisions of this section shall be in effect only from July 1, 2016 through June 30, 2017.”

Acts 2016, No. 226, § 34, provided: “PUBLIC PARTICIPATION. Arkansas Economic Development Commission (AEDC) shall make additional efforts to increase non-traditional public participation in its annual update to the Five Year Consolidated Plan and the new Five Year Consolidated Plan. These efforts shall be in addition to current public notification methods. Notification should be considered through direct mail-out to mayors and county judges, contacts with planning and development districts, contact with the Department of Rural Services, submissions to grant notification publications, and publication on AEDC's web page. AEDC is encouraged to develop additional innovative public awareness strategies.

“The provisions of this section shall be in effect only from July 1, 2016 through June 30, 2017.”

Amendments. The 2013 amendment substituted “Functions” for “Additional functions” in the section heading; added (b); rewrote (a)(1) through (12); and added (a)(13) through (19).

The 2019 amendment added “In accordance with state and federal law” in the introductory language of (a); in (a)(1), inserted “guaranties” and substituted “memoranda of understanding” for “memoranda of understandings”; substituted “United States Government” for “federal government” in (a)(4); rewrote (a)(5); in (a)(8), substituted “women-owned businesses and minority-owned” for “small and minority”, and substituted “loan guaranties” for “loans”; substituted “strategic plans for community and economic” for “their own plans for economic” in (a)(9); added “including without limitation serving as the grantee of Foreign Trade Zone 14” in (a)(14); inserted (a)(19); redesignated former (a)(19) as (a)(20); and made stylistic changes.

15-4-210. Arkansas Economic Development Commission — Foreign operation — Reports.

1. The Arkansas Economic Development Commission may engage the services of contract employees to promote the development of:
   1. Foreign direct investment in the state;
   2. Increased trade with foreign countries; and
   3. Improved relations with countries with which the state currently trades and countries that present future opportunities for enhanced economic development in the state.
2. The commission may establish an Arkansas operation in any country approved by the Governor and the Arkansas Economic Development Council.
3. The commission shall report the progress of any foreign offices annually to the Legislative Council, the Legislative Joint Auditing Committee, and the Governor.

History. Acts 1989 (1st Ex. Sess.), No. 280, § 33; 1995, No. 589, § 1; 1997, No. 540, § 21; 2013, No. 1185, § 1.

A.C.R.C. Notes. Former section 15-4-210, concerning legislative intent and reports for the overseas program, is deemed to be superseded by this section. The former section was derived from Acts 1975 (Extended Sess., 1976), No. 1015, § 1; A.S.A. 1947, § 9-513.1n.

Acts 2016, No. 226, § 32, provided: “FOREIGN OFFICE OPERATIONS. The Arkansas Economic Development Commission is hereby authorized to enter into contractual arrangements with private and/or public companies, corporations, individuals or organizations for the purpose of operating foreign offices. Arkansas Code 15-4-210 shall not be deemed restrictive in its language so as to preclude the use of standard Professional Services Contracts for the operation of the foreign offices and/or payment of such contracts from the special line items as established by legislative appropriation for the operation of said foreign offices.

“The provisions of this section shall be in effect only from July 1, 2016 through June 30, 2017.”

Amendments. The 2013 amendment substituted “Arkansas Economic Development Commission — Foreign operation — Reports” for “Overseas operation – Reports” in the section heading; rewrote (a); inserted present (b); redesignated former (b) as (c); and, in (c), substituted “commission” for “council” and “any foreign” for “these”.

15-4-211 — 15-4-214. [Repealed.]

Publisher's Notes. These sections, concerning personnel of overseas program, the sale of property, rural development, and interagency contracts, were repealed by Acts 2013, No. 1185, § 1. The sections were derived from the following sources:

15-4-211. Acts 1975 (Extended Sess., 1976), No. 1015, § 2; 1983, No. 627, § 1; A.S.A. 1947, § 9-513.1; Acts 1989 (1st Ex. Sess.), No. 280, §§ 31, 37; 1995, No. 589, § 2; 1997, No. 540, § 21.

15-4-212. Acts 1955, No. 404, § 12; A.S.A. 1947, § 9-515; Acts 1997, No. 250, § 96; 1997, No. 540, §§ 67, 68.

15-4-213. Acts 1987, No. 1069, § 1; 1997, No. 540, § 22.

15-4-214. Acts 1993, No. 1172, § 41; 1997, No. 540, § 22.

15-4-215. [Repealed.]

Publisher's Notes. This section, concerning foreign office operations, was repealed by Acts 1999, No. 1412, § 31. The section was derived from Acts 1997, No. 419, § 32.

15-4-216, 15-4-217. [Repealed.]

Publisher's Notes. These sections, concerning the Division of Agriculture Development, were repealed by Acts 1989, No. 885, § 1. The sections were derived from the following sources:

15-4-216. Acts 1985, No. 1005, § 4.

15-4-217. Acts 1985, No. 1005, § 5.

15-4-218. [Repealed.]

Publisher's Notes. This section, concerning access to industrial sites, was repealed by Acts 2013, No. 1185, § 1. The section was derived from Acts 1995, No. 418, § 3; 1997, No. 540, § 23.

15-4-219. Annual report.

The Arkansas Economic Development Commission shall present a report annually on the commission's work during the previous calendar year in these areas of concern:

1. An accounting of:
   1. Each project that was offered incentives in the previous calendar year, including without limitation:
      1. The number of jobs proposed by each project;
      2. For each job creation project that receives funds from the Economic Development Incentive Quick Action Closing Fund under § 19-5-1231, an indication of whether each project contains a repayment requirement;
      3. 1. Each project that received funds from the Economic Development Incentive Quick Action Closing Fund under § 19-5-1231.
         2. The information reported in subdivision (1)(A)(iii)(a) of this section and any other related information shall be made available to the Office of Economic and Tax Policy upon request;
      4. The location of each project; and
      5. The specific incentives offered by the commission;
   2. Each project that was offered incentives but that did not accept incentives, including without limitation:
      1. An assessment of the reasons why each offered project failed to open; and
      2. Any proposals the General Assembly should consider that would have assisted the commission in its negotiations regarding each project;
   3. Each factory and plant that closed in the previous calendar year, including without limitation:
      1. The number of jobs lost as the result of the closure of each factory or plant;
      2. The location of each factory or plant that closed; and
      3. An assessment of the reasons for each factory or plant closing; and
   4. The commission's strategies and recommendations for the coming year, including:
      1. An assessment of the relative risk of loss of factories, plants, and jobs in the state; and
      2. Plans for:
         1. Preventing future closings of factories and plants;
         2. Preventing future losses of jobs;
         3. Increasing the number of economic development proposals within the state;
         4. Drawing an increasing number of economic development proposals into the state; and
         5. Creating new incentives for economic development proposals; and
2. The Director of the Arkansas Economic Development Commission's assessment of the commission's performance, including without limitation a comparison to:
   1. The commission's performance over the past two (2) years;
   2. The commission's own projections; and
   3. Economic development in neighboring states.

History. Acts 2001, No. 1282, § 2; 2005, No. 1962, § 56; 2013, No. 1185, § 1; 2019, No. 202, § 4; 2019, No. 910, § 360.

A.C.R.C. Notes. Acts 2001, No. 1282, § 1, provided:

“The General Assembly finds:

“(1) That knowledge of the state's economy plays a central role in the legislative process;

“(2) That the members of the General Assembly require a comprehensive understanding of the present health and the potential for economic growth of this state in order to effectively represent the people;

“(3) That the members of the General Assembly require a comprehensive understanding of the economic position of this state in relation to our neighbor states in order to effectively represent the people; and

“(4) That understanding the state of the state's economy requires that the members of the General Assembly receive regular, comprehensive reports of the programs, goals, and strategies of the Department of Economic Development.”

As enacted by Acts 2001, No. 1282, § 2, this section began:

“Beginning with the May 2002 meeting of the Legislative Council, and annually thereafter.”

Amendments. The 2005 amendment substituted “the department's” for “our” in (1)(A)(iii).

The 2013 amendment substituted “commission” for “council” and “project” for “program” throughout; in (1)(A), substituted “Each project that was offered incentives in” for “All projects completed” and added “without limitation”; rewrote (1)(A)(i); inserted present (1)(A)(ii) and (iii) and redesignated former (1)(A)(ii) and (iii) as present (1)(A)(iv) and (v); rewrote (1)(B) and (C); and, in (2), substituted “Executive Director of the Arkansas Economic Development Commission's” for “director’s” and inserted “without limitation”.

The 2019 amendment by No. 202 deleted “and the average hourly wage or annual salary for each project” following “by each project” in (1)(A)(i); and substituted “specific incentives offered by the commission” for “elements of the commission's incentive packages that were used” in (1)(A)(v).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission’s” for “Executive Director of the Arkansas Economic Development Commission’s” in the introductory language of (2).

15-4-220. Audit of economic incentive programs.

1. In order to provide information to the General Assembly regarding the benefits of certain economic incentive programs, Arkansas Legislative Audit shall prepare annually a cost-benefit analysis of the projects provided incentives under the Consolidated Incentive Act of 2003, § 15-4-2701 et seq.
2. The analysis may include without limitation:
   1. The dollar amount of incentives actually provided;
   2. The direct, indirect, and induced state tax benefits associated with each project, including without limitation:
      1. Estimated tax revenues;
      2. Full-time equivalent jobs created;
      3. Wages; and
      4. Investment; and
   3. The safeguards to protect noneconomic influences in the award of incentives.
3. 1. The analysis required under subsection (a) of this section may be conducted on a rotating basis so that each project is evaluated at least one (1) time before the completion of the financial incentive agreement under the Consolidated Incentive Act of 2003, § 15-4-2701 et seq.
   2. If the staff of Arkansas Legislative Audit is insufficient to conduct the scheduled analysis in a given year, the executive committee of the Legislative Joint Auditing Committee may establish the priority and number of projects that can be reasonably analyzed with the available resources for a particular year.
4. 1. All records, data, and other information from whatever source that the Legislative Auditor deems necessary in the examination of the incentive programs shall be made available to Arkansas Legislative Audit.
   2. However, this subsection does not authorize publication of information protected from publication by law.
   3. Records and information exempt from public disclosure shall remain exempt in the custody of Arkansas Legislative Audit.
5. Arkansas Legislative Audit and the Arkansas Economic Development Commission shall enter into a memorandum of understanding concerning the need for common definitions and rules for evaluating economic incentive projects.

History. Acts 2005, No. 1769, § 1; 2013, No. 1185, § 1.

Amendments. The 2013 amendment, in (a), inserted “annually” and substituted “projects provided incentives” for “incentive programs provided”; substituted “without limitation” for “but not be limited to” in the introductory language of (b); rewrote (b)(2) and (c)(1); in (c)(2), substituted “If the staff of the division is” for “Should the division's staff be” and “projects” for “programs” and inserted “the” preceding “available”; substituted “this subsection does not authorize” for “nothing in this subsection authorizes or permits” in (d)(2); and added (e).

Subchapter 3 — Minority and Women-Owned Business Economic Development Act

Effective Dates. Acts 1979, No. 1060, § 13: July 1, 1979. Emergency clause provided: “It is hereby found and determined by the Seventy-Second General Assembly, that the Constitution of the State of Arkansas prohibits the appropriation of funds for more than a two (2) year period; that the effectiveness of this Act on July 1, 1979 is essential to the operation of the agency for which the appropriations in this Act are provided, and that in the event of an extension of the Regular Session, the delay in the effective date of this Act beyond July 1, 1979 could work irreparable harm upon the proper administration and providing of essential governmental programs. Therefore, an emergency is hereby declared to exist and this Act being necessary for the immediate preservation of the public peace, health, and safety shall be in full force and effect from and after July 1, 1979.”

Acts 1983, No. 644, § 3: July 1, 1983.

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-301. Title.

This subchapter shall be known and may be cited as the “Minority and Women-Owned Business Economic Development Act”.

History. Acts 1977, No. 544, § 2; A.S.A. 1947, § 5-916.3; Acts 1997, No. 540, § 69; 2009, No. 1222, § 1; 2017, No. 1080, § 1.

Amendments. The 2009 amendment rewrote the section.

The 2017 amendment inserted “and Women-Owned”.

15-4-302. Purpose — Goals — Notice.

1. The General Assembly finds that it is the policy of the State of Arkansas to support equal opportunity as well as economic development in every sector.
2. The General Assembly recognizes that it is the purpose of this subchapter to support to the fullest all possible participation of firms owned and controlled by minority persons and women in state-funded and state-directed public construction programs and in the purchase of goods and services for the state.
3. All state agencies shall attempt to ensure that the following percentages of the total amount expended in state-funded and state-directed public construction programs and in the purchase of goods and services for the state each fiscal year are paid to minority business enterprises and women-owned business enterprises:
   1. 1. For minority business enterprises, ten percent (10%).
      2. The ten-percent goal under subdivision (c)(1)(A) of this section shall be allocated as follows:
         1. Two percent (2%) for service-disabled veteran-owned minority business enterprises; and
         2. Eight percent (8%) for all other minority business enterprises; and
   2. For women-owned business enterprises, five percent (5%).
4. To facilitate notification of potential respondents to procurement solicitations, a state agency shall publish all state contract solicitations on the website of the Office of State Procurement.

History. Acts 1977, No. 544, § 1; 1979, No. 1060, § 9; 1983, No. 644, § 1; A.S.A. 1947, §§ 5-916.2, 5-916.2a, 5-916.2a note; Acts 1997, No. 540, §§ 24, 70; 2009, No. 1222, § 2; 2017, No. 1080, § 1.

Amendments. The 2009 amendment rewrote the section.

The 2017 amendment inserted “Goals — Notice” in the section heading; inserted “and women” in (b); in the present introductory language of (c), substituted “the following percentages” for “ten percent (10%)”, substituted “are” for “is”, and inserted “and women-owned business enterprises”; and added (c)(1), (c)(2), and (d).

15-4-303. Definitions.

As used in this subchapter:

1. 1. “Exempt” means goods and services classified as exempt for the purpose of administering this subchapter.
   2. The classification shall be determined by the Office of State Procurement and the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission and submitted to the Arkansas Economic Development Council for its review and consideration for the purposes of this subchapter;
2. “Minority” means a lawful permanent resident of this state who is:
   1. African American;
   2. Hispanic American;
   3. American Indian;
   4. Asian American;
   5. Pacific Islander American; or
   6. A service-disabled veteran as designated by the United States Department of Veterans Affairs;
3. “Minority and women-owned business officer” means the individual within each state agency with the responsibility for carrying out the intended purposes of this subchapter;
4. “Minority business enterprise” means a business that is at least fifty-one percent (51%) owned by one (1) or more minority persons as defined in this section;
5. 1. “Nonexempt” means goods and services classified as nonexempt for the purpose of administering this subchapter.
   2. The classification shall be determined by the Office of State Procurement and the division and submitted to the council for its review and consideration for the purposes of this subchapter;
6. “Procurement” means buying, purchasing, renting, leasing, or otherwise acquiring any goods or services;
7. “State agency” means a department, an office, a board, a commission, or an institution of this state, including a state-supported institution of higher education;
8. “State contract” means a state agreement, regardless of what it may be called, for the purchase of commodities and services and for the disposal of surplus commodities and services not otherwise exempt; and
9. “Women-owned business enterprise” means a business that is at least fifty-one percent (51%) owned by one (1) or more women who are lawful permanent residents of this state.

History. Acts 1977, No. 544, § 5; A.S.A. 1947, § 5-916.6; Acts 2003, No. 1814, § 2; 2009, No. 1222, § 3; 2011, No. 893, § 1; 2017, No. 1080, § 1.

Amendments. The 2009 amendment rewrote the section.

The 2011 amendment added (2)(F).

The 2017 amendment inserted “and Women-owned” in (1)(B); inserted “and women-owned” in (4); added the definition for “Women-owned business enterprise”; and made stylistic changes.

15-4-304. Creation.

The Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission:

1. Is established and confirmed within the Arkansas Economic Development Commission;
2. Shall be operated as a division within the commission; and
3. Shall perform the functions and duties as provided in this subchapter.

History. Acts 1977, No. 544, § 3; A.S.A. 1947, § 5-916.4; Acts 2009, No. 1222, § 4; 2017, No. 1080, § 1.

Publisher's Notes. Acts 1977, No. 544 created the Division of Minority Business Enterprise within the Department of Commerce, and Acts 1979, No. 1060, § 9, transferred the division to the Department of Economic Development. Acts 1981, No. 41, § 7, abolished the Department of Economic Development and transferred its powers, duties, and functions to the Department of Industrial Development. Acts 1983, No. 691, § 16, provided that the division should continue to function within the Department of Industrial Development as provided by law.

Amendments. The 2009 amendment rewrote the section.

The 2017 amendment inserted “and Women-owned” in the introductory language; and deleted “under the jurisdiction of the Arkansas Economic Development Council” following “Commission” at the end of (1).

15-4-305. Administrator.

1. The head of the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission is the Administrator of the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission.
2. The administrator shall be appointed by the Governor and shall serve at the pleasure of the Governor.
3. The administrator shall report to the Secretary of the Department of Commerce.

History. Acts 1977, No. 544, § 4; A.S.A. 1947, § 5-916.5; Acts 2009, No. 1222, § 5; 2017, No. 1080, § 1; 2019, No. 910, § 361.

Amendments. The 2009 amendment rewrote the section.

The 2017 amendment inserted “and Women-owned” twice.

The 2019 amendment rewrote the former text of the section and designated it as (a) and (b); and added (c).

15-4-306. Duties.

The Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission shall:

1. Provide technical, managerial, and counseling services and assistance to minority business enterprises and women-owned business enterprises;
2. With the participation of other state departments and state agencies as appropriate:
   1. Develop comprehensive plans and specific program goals for a minority business enterprise and women-owned business enterprise program;
   2. Establish regular performance monitoring and reporting systems to assure that goals are being achieved; and
   3. Evaluate the impact of federal and state support in achieving the objectives established by the Arkansas Economic Development Commission;
3. Implement state policy in support of minority business enterprise and development and women-owned business enterprise and development and coordinate the plans, programs, and operations of state government that affect or may contribute to the establishment, preservation, and strengthening of minority business enterprises and women-owned business enterprises;
4. Coordinate, make application for, and administer federal funding grants from the United States Minority Business Development Agency, the United States Small Business Administration, the United States Department of Veterans Affairs, and other federal agencies when applicable;
5. Promote the mobilization of activities and resources of state agencies and local governments, business and trade associations, universities, foundations, professional organizations, and volunteer and other groups toward the growth of minority business enterprises and women-owned business enterprises, and facilitate the coordination of the efforts of these groups with those of other state departments and state agencies;
6. Establish a center for the development, collection, and dissemination of information that will be helpful to persons and organizations throughout the state in undertaking or promoting the establishment and successful operation of minority business enterprises and women-owned business enterprises;
7. Conduct coordinated reviews of all proposed state training and technical assistance activities in direct support of the minority business enterprise and women-owned business enterprise program to ensure consistency with program goals and to preclude duplication of effort of other state agencies with overlapping jurisdictions;
8. Recommend appropriate legislative or executive actions to enhance minority business enterprise and women-owned business enterprise opportunities in this state;
9. Assist minority business enterprises and women-owned business enterprises in obtaining governmental or commercial financing for business expansion, establishment of new businesses, or industrial development projects;
10. Provide services to promote the organization of local development corporations for rural development and assist minority business enterprise and women-owned business enterprise persons in agrarian endeavors;
11. Assist minority business enterprises and women-owned business enterprises to promote reciprocal foreign trade and investment;
12. Assist minority and women-owned business persons in business contract procurement from governmental and private commercial sources; and
13. Provide a program effort to ensure participation of veterans and women in Arkansas minority business enterprise activities and women-owned business enterprise activities.

History. Acts 2009, No. 1222, § 6; 2017, No. 1080, § 1.

Amendments. The 2017 amendment inserted “and Women-owned” in the introductory language; inserted “and women-owned business enterprises” and similar language throughout; inserted “and women-owned business and development” in (3); substituted “United States Minority Business Development Agency, the United States Small Business Administration, the United States Department of Veterans Affairs, and other federal agencies when applicable” for “Minority Business Development Agency of the United States Department of Commerce and other federal agencies where applicable” in (4); inserted “enterprise and women-owned business enterprise” in (8) and (10); inserted “and women-owned” in (12); and, in (13), inserted “and women” and “and women-owned business enterprise activities”.

15-4-307. Minority and Women-owned Business Advisory Council.

1. The Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission shall be represented by a statewide Minority and Women-owned Business Advisory Council and shall report to that council.
2. 1. The council shall consist of nine (9) members.
   2. The council shall:
      1. Monitor progress, make recommendations, and develop strategic plans for performance improvement; and
      2. Report to the Governor, the Speaker of the House of Representatives, and the President Pro Tempore of the Senate.
3. 1. The Governor shall appoint three (3) members of the council with the advice and consent of the Senate.
   2. The President Pro Tempore of the Senate shall appoint two (2) members of the council.
   3. The Speaker of the House of Representatives shall appoint two (2) members of the council.
   4. The Director of the Arkansas Economic Development Commission shall appoint two (2) members of the council.
   5. Appointments shall reflect and be representative of the minority and women-owned business communities, resource organizations, entrepreneurs, corporations, and other minority and women-owned business advocates.
4. Except as otherwise provided by law, members of the council shall serve without compensation.
5. The term of office of the council shall:
   1. Be at the pleasure of the appointing officer; and
   2. Not exceed five (5) years.
6. There is established a formal relationship between the council and the Administrator of the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission.
7. 1. The administrator shall be the liaison to the council and shall be responsible for submitting to the council any reports and documents under the provisions of this section.
   2. Their duties in relation to this section shall be considered official duty in the conduct of state business.
8. The council's duties and responsibilities shall be to:
   1. Review reports and interpret each state agency's achievement of its goals under § 15-4-302(c);
   2. Advise the Governor when a state agency has not reached its goals under § 15-4-302(c);
   3. Make annual reports to the Secretary of the Department of Commerce, including without limitation:
      1. A summary of the state's performance in relation to the goals stated in § 15-4-302(c); and
      2. Any recommendations for modifications to the division's or other state agency's plans for improving statewide performance in relation to the goals stated in § 15-4-302(c);
   4. Recommend to the state agency, the division, and the Office of State Procurement corrective actions to strengthen minority and women-owned business opportunities in the state; and
   5. Conduct public hearings when necessary to obtain public input and support for the purpose of carrying out the provisions of this subchapter.
9. Each state agency, through its minority and women-owned business officer, shall submit to the division and the office the state agency's plan to reach its goals for the coming fiscal year, which shall:
   1. Be submitted to the division by June 30 of each year;
   2. Contain the name of the state agency submitting the plan;
   3. Contain a policy statement signed by the state agency head expressing a commitment to strengthen minority business enterprises and women-owned business enterprises in all aspects of contracting to the maximum extent feasible;
   4. Identify the name of the minority and women-owned business officer in the state agency who is responsible for developing and administering the compliance plan;
   5. Establish a timetable for the state agency to reach its goals under the plan and the manner in which the state agency intends to reach its goals; and
   6. Contain any other procedures the division deems necessary to comply with the goals and the compliance plan.

History. Acts 2009, No. 1222, § 6; 2017, No. 1080, § 1; 2019, No. 910, §§ 362, 363.

Amendments. The 2017 amendment inserted “and Women-owned” in the section heading and throughout; substituted “nine (9)” for “seven (7)” in (b)(1); inserted (c)(4) and redesignated former (c)(4) as (c)(5); substituted “communities” for “community” in present (c)(5); redesignated (e) as present (e) and (e)(1); added (e)(2); deleted “and the small disadvantaged business officer” following “administrator” in (g)(1); inserted “under § 15-4-302(c)” in (h)(1) and (h)(2); inserted “including without limitation” in the introductory language of (h)(3); added (h)(3)(A) and (h)(3)(B); deleted “the council” following “division” in the introductory language of (i); in (i)(3), substituted “strengthen” for “use” following “commitment to” and inserted “and women-owned business enterprises”; and made stylistic changes.

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (c)(4); and substituted “Secretary of the Department of Commerce” for “Governor” in the introductory language of (h)(3).

15-4-308. Administration.

1. The Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission and the Office of State Procurement shall serve as the principal coordinators of the initiative to ensure the successful implementation of this subchapter.
2. The division and the office shall provide assistance to minority business enterprises and women-owned business enterprises seeking state contract opportunities with various state agencies.
3. The division and the office shall maintain a directory of all minority and women-owned business officers for each state agency.
4. The division and the office shall provide management and technical assistance to any state agency that experiences difficulty in complying with the provisions of this subchapter.
5. The division and the office shall maintain a current directory of minority business enterprises and women-owned business enterprises and shall make the directory available to each state agency and minority and women-owned business officer.
6. The division shall serve as a central clearinghouse for information on state contracts, including a record of all pending state contracts upon which minority business enterprises and women-owned business enterprises may participate.

History. Acts 2009, No. 1222, § 6; 2017, No. 1080, § 1.

Amendments. The 2017 amendment inserted “and Women-owned” and “and women-owned business enterprises” and similar language throughout the section.

15-4-309. Exempt contracts.

Upon the approval of the Minority and Women-owned Business Advisory Council, the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission and the Office of State Procurement shall determine the classifications of state contracts to be exempted from the goals established by this subchapter whenever there exists an insufficient number of minority business enterprises or women-owned business enterprises to ensure adequate competition.

History. Acts 2009, No. 1222, § 6; 2017, No. 1080, § 1.

Amendments. The 2017 amendment inserted “and Women-owned” two times and “or women-owned business enterprises” once.

15-4-310. Minority and women-owned business officer.

1. Each state agency shall designate an individual as its minority and women-owned business officer.
2. The minority and women-owned business officer shall be the person within the state agency with whom the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission and the Minority and Women-owned Business Advisory Council shall work in their efforts to accomplish the goals of this subchapter.
3. Upon the appointment of the minority and women-owned business officer in each state agency, the state agency shall notify the division and the Office of State Procurement.

History. Acts 2009, No. 1222, § 6; 2017, No. 1080, § 1.

Amendments. The 2017 amendment inserted “and women-owned” and similar language in the section heading and throughout the section.

15-4-311. Annual minority and women-owned purchasing plan.

1. Prior to June 30 each year, each state agency shall submit to the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission and the Office of State Procurement a minority and women-owned purchasing plan that shall outline the state agency's plan to reach its goals for the coming fiscal year.
2. The minority and women-owned purchasing plan shall include without limitation:
   1. The name of the state agency;
   2. A policy statement signed by the state agency head expressing a commitment to use minority business enterprises and women-owned business enterprises in all aspects of contracting to the maximum extent feasible;
   3. The name of the minority and women-owned business officer in the state agency who is responsible for developing and administering the purchasing plan;
   4. The timetable for the state agency to reach its goals under the purchasing plan and the manner in which the state agency intends to reach its goals, including without limitation the manner in which the state agency intends to include minority business enterprises and women-owned business enterprises in reaching its goals; and
   5. Any other procedures the state agency deems necessary to comply with the goals and the purchasing plan.
3. The minority and women-owned business officer shall determine the category to which a purchase shall be assigned for purposes of the minority and women-owned purchasing plan required under this section.

History. Acts 1991, No. 698, § 1; 2007, No. 692, § 1; 2009, No. 1222, § 7; 2017, No. 1080, § 1.

Amendments. The 2007 amendment substituted “§§ 15-4-312 – 15-4-320” for “§§ 15-4-312 – 15-4-319.”

The 2009 amendment rewrote the section.

The 2017 amendment inserted “and women-owned” and similar language in the section heading and throughout the section; inserted “enterprises and women-owned business enterprises” in (b)(2); substituted “purchasing” for “compliance” in (b)(3); in (b)(4), inserted “purchasing” and “including without limitation . . . its goals”; substituted “purchasing” for “compliance” in (b)(5); and added (c).

15-4-312. State agencies to submit reports.

Within fifteen (15) days of the close of each six-month period, each state agency shall submit a report to the Minority and Women-owned Business Advisory Council summing up total procurement for all state contracts, except exempt state contracts of the state agency, and the dollar value and the percentage of the state contracts of the state agency awarded to minority business enterprises and women-owned business enterprises.

History. Acts 1991, No. 698, § 2; 2009, No. 1222, § 8; 2017, No. 1080, § 1.

Amendments. The 2009 amendment rewrote the section.

The 2017 amendment substituted “Within” for “The Minority Business Advisory Council shall require each state agency to produce within” and “six-month” for “three-month”, inserted “each state agency shall submit”, inserted “to the Minority and Women-owned Business Advisory Council”, inserted “state”, and added “and women-owned business enterprises”.

15-4-313. Accelerated payments.

To ensure that minority business enterprises and women-owned business enterprises are not financially hindered due to delays in payment by state agencies entering into state contracts with minority business enterprises and women-owned business enterprises under this subchapter, state agencies shall accelerate payment to minority vendors and women-owned vendors to preclude accounts receivable problems of minority business enterprises and women-owned business enterprises caused by the State of Arkansas.

History. Acts 1991, No. 698, § 3; 1995, No. 1296, § 48; 1997, No. 540, § 25; 2003, No. 487, § 12; 2007, No. 692, § 2; 2009, No. 481, § 1; 2009, No. 1222, § 9; 2017, No. 1080, § 1.

Amendments. The 2007 amendment, in (5), added “a lawful permanent resident of this state who is” and deleted former (5)(A) and redesignated the remaining subdivisions accordingly; and added (6) and redesignated the remaining subsections accordingly.

The 2009 amendment by No. 481 substituted “A Native American” for “An American Indian” in (5)(C); substituted “An Asian American” for “An Asian a Pacific Islander” in (5)(D); inserted (5)(E); and made related changes.

The 2009 amendment by No. 1222 rewrote the section.

The 2017 amendment inserted “and women-owned business enterprises” three times and “and women-owned vendors” once.

15-4-314. Minority business enterprises and women-owned business enterprises certification process.

1. The Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission shall promulgate rules to create a certification process for minority business enterprises and women-owned business enterprises.
2. The certification process shall include without limitation:
   1. Criteria for certification that shall include without limitation:
      1. A determination that the business is structured as a minority business enterprise or a women-owned business enterprise;
      2. Verification of minority or woman ownership and control of the business; and
      3. Annual updates indicating continuing minority or woman ownership and control;
   2. A formal application process;
   3. An education program to assist minority business enterprises and women-owned business enterprises in achieving certification; and
   4. An outreach to ensure the broadest possible participation of minority business enterprises and women-owned business enterprises and persons proposing new minority business enterprises or women-owned business enterprises.
3. The Office of State Procurement shall cooperate with the division to the fullest extent possible in sharing information concerning certification and registration of minority business enterprises and women-owned business enterprises carrying out the purposes of this section.

History. Acts 1991, No. 698, § 6; 2009, No. 1222, § 10; 2017, No. 1080, § 1.

Amendments. The 2009 amendment rewrote the section.

The 2017 amendment inserted “and women-owned business enterprises” and similar language in the section heading and throughout the section; and inserted “or woman” in (b)(1)(B) and (b)(1)(C).

15-4-315. Small procurements.

To assist the state in ensuring that the percentages of the total amount expended in state-funded and state-directed public construction programs and procurement of commodities and services for the state each fiscal year under § 15-4-302 are paid to minority business enterprises and women-owned business enterprises under this subchapter, a procurement that does not exceed two (2) times the amount stated in § 19-11-204(13) may be procured without seeking competitive bids or competitive sealed bids if the procurement is with a certified minority business enterprise or certified women-owned business enterprise.

History. Acts 2017, No. 1080, § 2.

Publisher's Notes. Former § 15-4-315, concerning administration, was repealed by Acts 2009, No. 1222, § 11. The section was derived from Acts 1991, No. 698, § 7; 1995, No. 1296, § 48.

15-4-316 — 15-4-320. [Repealed.]

Publisher's Notes. These sections, concerning exempt contracts, minority business officer, state agencies to submit reports, accelerated payments, and minority business enterprises certification process, were repealed by Acts 2009, No. 1222, § 11. The sections were derived from the following sources:

15-4-316. Acts 1991, No. 698, § 9; 1995, No. 1296, § 48.

15-4-317. Acts 1991, No. 698, § 5.

15-4-318. Acts 1991, No. 698, § 4.

15-4-319. Acts 1991, No. 698, § 8.

15-4-320. Acts 2003, No. 1456, § 1.

Subchapter 4 — Jobs Creation by Stimulating Small Business Growth Act of 1985

15-4-401. Title.

This subchapter shall be known and may be cited as the “Jobs Creation by Stimulating Small Business Growth Act of 1985”.

History. Acts 1985, No. 869, § 2; A.S.A. 1947, § 9-570.

15-4-402. Legislative findings and purpose.

The General Assembly finds that:

1. It would be in the best interest of the population of the State of Arkansas to promote the growth and development of small business concerns and concerns owned and controlled by socially and economically disadvantaged individuals, to the extent provided in this subchapter, by:
   1. Stimulating the flow of private capital and long-term loan funds these concerns need for the sound financing of capital improvements for their business operations and for growth, expansion, and modernization; and
   2. Providing incentives as appropriate for the increase of business volume these concerns need to become competitive; and
2. The State of Arkansas's primary concern is to encourage the creation of more jobs for the population in a segment in which the ratio of new jobs per dollar invested is maximized.

History. Acts 1985, No. 869, § 1; A.S.A. 1947, § 9-569.

15-4-403. Definitions.

As used in this subchapter:

1. “Council” means the Arkansas Economic Development Council;
2. “Division” means the Division of Minority Business Enterprise of the Arkansas Economic Development Commission;
3. “Small business concern” means small business firms in this state owned and operated by:
   1. Socially and economically disadvantaged individuals who are qualified to receive federally secured loans through small business investment companies licensed by the United States Small Business Administration; and
   2. Small business firms owned and operated by persons of limited financial means; and
4. “Small business investment company” means a small business investment company organized and chartered under the business corporation or nonprofit corporation statutes of this state or formed as a limited partnership for the purpose of making investment loans for capital improvements and expansion to persons whose participation in the free enterprise system is hampered because of social or economic disadvantages, as authorized in 15 U.S.C. § 681(d) [repealed], or because of limited financial means.

History. Acts 1985, No. 869, § 3; A.S.A. 1947, § 9-571; Acts 1997, No. 540, §§ 26, 71.

Cross References. Arkansas Business Corporation Act, § 4-26-101 et seq.

Arkansas Business Corporation Act of 1987, § 4-27-101 et seq.

Arkansas Nonprofit Corporation Act, § 4-28-201 et seq.

Arkansas Nonprofit Corporation Act of 1993, § 4-33-101 et seq.

15-4-404. Promulgation of rules generally.

The Arkansas Economic Development Council shall promulgate rules and procedures to be followed by the Division of Minority and Women-owned Business Enterprise of the Arkansas Economic Development Commission:

1. In administering the provisions of this subchapter; and
2. In the making of loans to small business investment companies or in the purchase from the companies of loans made to small business concerns in compliance with the provisions of this subchapter.

History. Acts 1985, No. 869, § 10; A.S.A. 1947, § 9-578; Acts 1997, No. 540, § 72; 2019, No. 315, § 1055.

Amendments. The 2019 amendment deleted “and regulations” following “rules” in the section heading and deleted “regulations” following “rules” in the introductory language.

15-4-405. Companies qualified for loan application and sale — Apportioning available funds.

1. Any small business investment company which qualifies and is licensed by the United States Small Business Administration as a small business investment company authorized to do business in this state and to make loans and provide investment funds for capital improvements to persons whose participation in the free enterprise system is hampered because of social or economic disadvantage shall be entitled to apply with the Division of Minority Business Enterprise of the Arkansas Economic Development Commission for loans under the provisions of this subchapter and may sell to the division loans made to small business concerns eligible to receive the loans under the provisions of this subchapter.
2. If applications for loans or applications to sell investment loans filed with the division exceed the funds available for such purposes, the Arkansas Economic Development Council shall promulgate appropriate rules to apportion to each such small business investment company its pro rata share of available loan funds in accordance with guidelines and standards promulgated by the council.

History. Acts 1985, No. 869, § 10; A.S.A. 1947, § 9-578; Acts 2019, No. 315, § 1056.

Amendments. The 2019 amendment deleted “and regulations” following “rules” in (b).

15-4-406. Authority to issue revenue bonds — Loan funds.

To stimulate the flow of private funds for capital improvements to small business concerns, the Arkansas Economic Development Council is authorized to:

1. Issue revenue bonds to obtain funds to be administered through the Division of Minority Business Enterprise of the Arkansas Economic Development Commission to make investment loans to small business concerns insured by the United States Small Business Administration; and
2. Provide funds whereby the division may purchase from small business investment companies small business enterprise loans for capital improvements and expansions guaranteed by the United States Small Business Administration, thereby making available to such small business investment companies additional loan funds.

History. Acts 1985, No. 869, § 4; A.S.A. 1947, § 9-572; Acts 1997, No. 540, § 73.

15-4-407. Limits on bond issuance and loan purchases.

1. The Arkansas Economic Development Council is authorized and empowered to issue revenue bonds in such amounts as may be determined by the council.
2. For the purposes of this subchapter, the aggregate amount of revenue bonds to be issued under the provisions of this subchapter shall not exceed the sum of ten million dollars ($10,000,000) for the fiscal biennium ending June 30, 1987.
3. Moneys loaned to small business companies under the provisions of this subchapter shall be used by the companies in making business loans to small business concerns, as defined in this subchapter, in amounts not to exceed an aggregate of one hundred thousand dollars ($100,000) in such moneys to the same small business concern during any fiscal biennium.
4. Small business concern loans purchased by the council from qualified small business investment companies shall not exceed an aggregate of one hundred thousand dollars ($100,000) in loans to any single business firm during any fiscal biennium.

History. Acts 1985, No. 869, §§ 4, 5; A.S.A. 1947, §§ 9-572, 9-573.

15-4-408. Prerequisites to issuance.

Before the Arkansas Economic Development Council shall issue its revenue bonds, the council, acting through the Division of Minority Business Enterprise of the Arkansas Economic Development Commission, shall have received from small business investment companies in this state binding commitments to make business loans to small business concerns, as defined in this subchapter, to sell small business loans to the division or to engage in specific small business concern loan activities, as authorized in this subchapter.

History. Acts 1985, No. 869, § 5; A.S.A. 1947, § 9-573.

15-4-409. Authorizing resolution and trust indenture.

1. Before revenue bonds shall be issued, the Arkansas Economic Development Council shall adopt an authorizing resolution and trust indenture which, together with this subchapter, shall constitute a contract between the council and the holders and registered owners of the bonds.
2. The contract and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and conditions of the contracts, and the covenants, agreements, and obligations of the Arkansas Economic Development Commission shall be enforced by mandamus or other appropriate proceedings at law or in equity.

History. Acts 1985, No. 869, § 6; A.S.A. 1947, § 9-574.

15-4-410. Issuance and redemption procedures.

1. The bonds to be issued by the Arkansas Economic Development Council shall be issued in accordance with the same procedures provided for the issuance of revenue bonds by the Arkansas Development Finance Authority.
2. All other provisions of the Arkansas Housing Development Agency Act [repealed] governing the issuance of revenue bonds, the issuance of refunding bonds, and the various formalities and procedures to be followed with respect to the issuance or redemption thereof shall be applicable to revenue bonds to be issued by the council under the provisions of this subchapter.

History. Acts 1985, No. 869, §§ 5, 9; A.S.A. 1947, §§ 9-573, 9-577.

Publisher's Notes. Acts 1985, No. 1062, § 4.01, abolished the Arkansas Housing Development Agency, transferred its functions, powers, and duties to the Arkansas Development Finance Authority, and provided that any reference to the Arkansas Housing Development Agency should be deemed to refer to the Arkansas Development Finance Authority.

15-4-411. Security.

1. The principal of, interest on, and trustees' and paying agents' fees in connection with the revenue bonds issued by the Arkansas Economic Development Council under the provisions of this subchapter shall be secured by a lien and pledge of the loans made or the investment loans purchased from the proceeds and collateral security received by the council from small business investment companies.
2. It shall not be necessary to the provisions of the lien and pledge that the trustees or holders of the revenue bonds take possession of the loan mortgages for collateral security.

History. Acts 1985, No. 869, § 6; A.S.A. 1947, § 9-574.

15-4-412. Expenses.

The Arkansas Economic Development Council may require the small business investment company borrowing money from the council or selling small business concern investment loans to the council to pay all or part of the incidental expenses in connection therewith and all or part of the expenses of issuance of the bonds.

History. Acts 1985, No. 869, § 5; A.S.A. 1947, § 9-573.

15-4-413. Tax exemption.

Bonds issued under the provisions of this subchapter and the interest on those bonds shall be exempt from all state, county, and municipal taxes, and the exemption shall include income, inheritance, and estate taxes.

History. Acts 1985, No. 869, § 7; A.S.A. 1947, § 9-575.

15-4-414. No personal liability.

Neither the members of the Arkansas Economic Development Council nor officials or employees of the Arkansas Economic Development Commission or the Division of Minority Business Enterprise of the Arkansas Economic Development Commission executing bonds or notes pursuant to this subchapter shall be liable personally on such bonds or notes by reason of the issuance thereof.

History. Acts 1985, No. 869, § 8; A.S.A. 1947, § 9-576; Acts 1997, No. 540, § 27.

15-4-415. Authority to use bond proceeds.

The Arkansas Economic Development Council, acting through the Division of Minority Business Enterprise of the Arkansas Economic Development Commission, is authorized and empowered to use the proceeds of any bonds issued under this subchapter, together with any other available funds, for the making of loans for:

1. The purchase of investment loans and paying of incidental expenses in connection therewith;
2. Paying the expenses of amortizing and issuing the bonds;
3. Paying interest on the bonds until revenues thereon are available in sufficient amounts; and
4. Funding such debt service reserves as the council deems necessary or desirable.

History. Acts 1985, No. 869, § 5; A.S.A. 1947, § 9-573.

15-4-416. Deposit and use of revenues.

1. All revenues received by the Division of Minority Business Enterprise of the Arkansas Economic Development Commission in behalf of the Arkansas Economic Development Council under the authority of this subchapter, except revenues derived from appropriations, are specifically declared to be cash funds restricted in their use and dedicated and to be used solely as provided in this subchapter.
2. The pledged revenues shall not be deposited into the State Treasury, but, when received, shall be deposited by the council into the account or accounts and into the depository or depositories specified by resolution of the council and shall be used by the council solely for the purpose of carrying out the provisions of this subchapter and in conformity with the provisions of any resolution or indenture-securing bonds of the council or other agreement entered into by the council pursuant to the provisions of this subchapter.
3. Any revenues at any time held by the council in excess of the amount necessary to accomplish the purpose for which the revenues were received and to comply with all covenants and agreements of the agency relating thereto shall be deposited to the credit of the state into such depositories and shall be reported to the Treasurer of State at such time and in such manner as shall be designated and prescribed by the Treasurer of State.

History. Acts 1985, No. 869, § 9; A.S.A. 1947, § 9-577.

Subchapter 5 — Industrial Development Corporations

Effective Dates. Acts 1955, No. 404, § 40: approved Mar. 29, 1955. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the State of Arkansas has had heretofore an inadequate program for the agricultural and industrial development of the state and of its several sections, that on account of such inadequate program the State of Arkansas has been unable to provide for its inhabitants sufficient opportunities in agriculture and industry, that on account thereof the State of Arkansas has suffered great losses of population and a decreasing standard of living for its inhabitants, that unless an adequate program for the agricultural and industrial development of the state be immediately undertaken the State of Arkansas will suffer immediate and irreparable further loss in population and the opportunity for agricultural and industrial expansion, and that only by the passage of this act and giving immediate effect to its provisions can the State of Arkansas prevent further losses in population and secure to its inhabitants opportunities for agricultural and industrial development. An emergency, therefore, is hereby declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall, except as to Sections 11 and 12, hereof, take effect and be in full force from and after its passage.”

Acts 1957, No. 47, § 16: approved Feb. 15, 1957. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the State of Arkansas has had heretofore an inadequate program for the agricultural and industrial development of the state and of its several sections, that on account of such inadequate program the State of Arkansas has been unable to provide for its inhabitants sufficient opportunities in agriculture and industry, that on account thereof the State of Arkansas has suffered a decreasing standard of living for its inhabitants, that unless an adequate program for the agricultural and industrial development of the state be immediately undertaken the State of Arkansas will suffer immediate and irreparable loss in population and the opportunity for agricultural and industrial expansion, and that only by the passage of this act and giving immediate effect to its provisions can the State of Arkansas prevent losses in population and secure to its inhabitants opportunities for agricultural and industrial development. An emergency, therefore, is hereby declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall take effect and be in full force from and after its passage.”

Acts 1968 (2nd Ex. Sess.), No. 11, § 6: June 12, 1968. Emergency clause provided: “The General Assembly finding that the industrial development of the State of Arkansas is retarded on account of the lack of adequate financing available to secure and develop new industry within the state and to expand and develop presently existing industries, and that only by this act can additional financing for the industrial development of the state be made immediately available, an emergency, therefore, is hereby declared to exist, and this act being necessary for the preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1981, No. 425, § 54: Mar. 11, 1981. Emergency clause provided: “It has been found and is hereby declared by the General Assembly of the State of Arkansas that the financing of the public improvements to which this act pertains is not feasible under existing maximum interest rate limitations, that the accomplishment of these public improvements is essential to the continued development of this state and the continued improvement of the economic conditions of her people, and that these public improvements can be accomplished only by the immediate effect of this act. Therefore, an emergency is declared to exist and this act, being necessary for the preservation of the public peace, health and safety, shall be in effect from and after its passage and approval.”

15-4-501. Purpose — Incorporators.

In order to encourage and promote the economic, agricultural, and industrial development of any city, town, or county in this state, not fewer than fifteen (15) natural persons of the age of twenty-one (21) or more who are residents of the city, town, or county may act as incorporators of a corporation to be organized under this act by executing articles of incorporation as provided in this act.

History. Acts 1955, No. 404, § 13; A.S.A. 1947, § 9-516; Acts 2001, No. 620, § 1.

Meaning of “this act”. Acts 1955, No. 404, codified as §§ 15-4-201 — 15-4-204, 15-4-206, 15-4-209, 15-4-212 [repealed], 15-4-501 — 15-4-503, 15-4-504 [repealed], 15-4-505 — 15-4-515, 15-4-516 [repealed], 15-4-517, 15-4-518, 15-4-519 [repealed], 15-4-520 — 15-4-525.

15-4-502. Articles of incorporation — Contents.

1. The articles of incorporation shall state:
   1. The name of the corporation. The name shall include the name of the city, town, or county and the words “industrial development” or “economic development” and the word “corporation”, “incorporated”, “inc.”, or “company”. The name shall be such as to distinguish it from any other corporation organized and existing under the laws of this state;
   2. The purpose for which the corporation is formed;
   3. The names and addresses of the incorporators who shall serve as directors and manage the affairs of the corporation until its first annual meeting of members or until their successors are elected and qualified;
   4. The number of directors, not fewer than three (3), to be elected at the annual meetings of members;
   5. The address of its principal office and the name and address of its agent upon whom process may be served;
   6. The period of duration of the corporation, which may be perpetual;
   7. The terms and conditions upon which persons shall be admitted to membership in the corporation, but if expressly so stated, the determination of such matters may be reserved to the directors by the bylaws; and
   8. Any provisions not inconsistent with law which the incorporators may choose to insert for the regulation of the business and the conduct of the affairs of the corporation.
2. It shall not be necessary to set forth in the articles of incorporation any of the corporate powers enumerated in this act.

History. Acts 1955, No. 404, § 14; A.S.A. 1947, § 9-517; Acts 2001, No. 620, § 2.

Meaning of “this act”. See note to § 15-4-501.

15-4-503. Articles — Signatures and acknowledgment of incorporators.

The original copy of the articles of incorporation shall be signed by the incorporators and acknowledged before any officer authorized by the laws of this state to acknowledge the execution of deeds and conveyances.

History. Acts 1955, No. 404, § 15; A.S.A. 1947, § 9-518.

15-4-504. [Repealed.]

Publisher's Notes. This section, concerning approval of the articles of incorporation by the commission, was repealed by Acts 1997, No. 339, § 1. The section was derived from Acts 1955, No. 404, § 15; A.S.A. 1947, § 9-518.

15-4-505. Articles — Filing.

1. The original executed articles of incorporation shall be filed in the office of the Secretary of State.
2. If the Secretary of State finds that the articles of incorporation conform to law, he or she shall, when the fees prescribed by this act have been paid:
   1. Endorse on the original copy the word “Filed”, and the month, day, and year of the filing thereof;
   2. File the original in the office of the Secretary of State; and
   3. Issue a certificate of incorporation to the incorporators.
3. The incorporators shall file for recording a certified copy of the articles of incorporation in the office of the county clerk in the county in which the principal office of the corporation is located.

History. Acts 1955, No. 404, § 15; A.S.A. 1947, § 9-518; Acts 1997, No. 339, § 2.

Meaning of “this act”. See note to § 15-4-501.

15-4-506. Beginning of corporate existence.

1. Upon the issuance of a certificate of incorporation by the Secretary of State, the corporate existence of the corporation shall begin.
2. The certificate of incorporation shall be conclusive evidence, except as against the state, that all conditions precedent required to be performed by the incorporators have been complied with and that the corporation has been incorporated under this act.

History. Acts 1955, No. 404, § 16; A.S.A. 1947, § 9-519.

Meaning of “this act”. See note to § 15-4-501.

15-4-507. Meeting.

1. After the issuance of the certificate of incorporation, an organization meeting shall be held at the call of a majority of the incorporators for the purpose of adopting bylaws and electing officers and for the transaction of such other business as may properly come before the meeting.
2. The incorporators calling the meeting shall give at least three (3) days' notice by mail to each incorporator. The notice shall state the time and place of the meeting, but the notice may be waived in writing.

History. Acts 1955, No. 404, § 17; A.S.A. 1947, § 9-520.

15-4-508. Filing corrected articles of incorporation.

1. In the event any corporation has filed defective articles of incorporation or has failed to do all things necessary to perfect its corporate organization, it may, nevertheless, file corrected articles of incorporation or amend the original articles and do and perform all acts and things necessary in the premises for the correction of such defects.
2. The action so taken shall be valid and binding upon all persons concerned. The capacity of such a corporation to file corrected articles of incorporation or amendments to the original articles or to do and perform all acts and things necessary in the premises shall not be questioned.

History. Acts 1955, No. 404, § 18; A.S.A. 1947, § 9-521; Acts 1997, No. 339, § 3.

15-4-509. Corporate powers.

Each corporation organized under this act shall have power:

1. To sue and be sued, complain, and defend in its corporate name;
2. To have perpetual succession, unless a limited period of duration is stated in its articles of incorporation;
3. To adopt a corporate seal, which may be altered at pleasure, and to use it, or a facsimile thereof as required by law;
4. To encourage and promote the economic, agricultural, and industrial development of its city, town, or county;
5. To purchase, receive, lease as lessee or in any other manner acquire, own, hold, maintain, sell, exchange, and use any and all real and personal property, or any interest therein;
6. In the manner hereinafter provided, to borrow money and otherwise contract indebtedness, to issue its bonds or other obligations therefor, and to secure the payment thereof by mortgage, pledge, or a deed of trust of all or any part of its property, assets, revenues, or income;
7. To sell and convey, mortgage, pledge, lease as lessor, and otherwise dispose of all or any part of its property and assets;
8. To accept gifts or grants of money, service, or property, real or personal;
9. To make any and all contracts necessary or convenient for the exercise of the powers granted in this act;
10. To conduct its business and have officers within or without the state;
11. To elect or appoint officers, agents, and employees of the corporation and to define their duties and fix their compensation;
12. To make and alter bylaws not inconsistent with the articles of incorporation or with the laws of this state for the administration and regulation of the affairs of the corporation; and
13. To do and perform any and all acts and things and to have and exercise any and all powers as may be necessary, convenient, or appropriate to effectuate the purpose for which the corporation is organized.

History. Acts 1955, No. 404, § 19; A.S.A. 1947, § 9-522; Acts 1997, No. 339, § 4; 2001, No. 620, § 3.

Meaning of “this act”. See note to § 15-4-501.

15-4-510. Bylaws.

1. The power to make, alter, amend, or repeal the bylaws of the corporation shall be vested in the board of directors.
2. The bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation.

History. Acts 1955, No. 404, § 21; A.S.A. 1947, § 9-524; Acts 1997, No. 339, § 5.

15-4-511. Amendments to articles of incorporation.

1. A corporation organized under this act may amend its articles of incorporation by a majority vote of the members present in person or by proxy at any regular meeting or at any special meeting of its members called for that purpose.
2. The power to amend shall include the power to accomplish any desired change in the provisions of its articles of incorporation and to include any purpose, power, or provision which would be authorized to be included in original articles of incorporation if executed at the time the amendment is made.
3. Articles of amendment, signed by the president or vice president and attested by the secretary certifying to such an amendment and its lawful adoption, shall be executed, acknowledged, filed, and recorded as the original articles of incorporation of a corporation organized under this act.
4. As soon as the Secretary of State has accepted the articles of amendment for filing and issued a certificate of amendment, the amendments shall be in effect.

History. Acts 1955, No. 404, § 23; A.S.A. 1947, § 9-526; Acts 1997, No. 339, § 6.

Meaning of “this act”. See note to § 15-4-501.

15-4-512. Filing charges.

The Secretary of State shall charge and collect for:

1. Filing articles of incorporation and issuing a certificate of incorporation, ten dollars ($10.00);
2. Filing articles of amendment and issuing a certificate of amendment, ten dollars ($10.00); and
3. Filing articles of dissolution, one dollar ($1.00).

History. Acts 1955, No. 404, § 25; 1957, No. 47, § 4; A.S.A. 1947, § 9-528.

15-4-513. Nonprofit operation — Payment of indebtedness.

1. 1. Each corporation organized under the provisions of this act shall be operated without profit to its members.
   2. All revenues of the corporation derived from lands subject to mortgage or deed of trust given to secure the payment of bonds or other obligations of the corporation shall be devoted:
      1. First to the payment of taxes, insurance, and, in the instance of damage to the mortgaged property of the corporation caused by acts of God, to the extent of the amount in excess of insurance recovery as shall be required to restore the property to its condition prior to the time of the damage;
      2. Then to the payment of interest on and principal of the bonds or other obligations of the corporation secured by the mortgage or deed of trust as they mature and according to the terms of the mortgage or deed of trust; and
      3. Thereafter to the encouragement and promotion of the economic, agricultural, and industrial development of its city, town, or county.
2. However, revenues of the corporation may be used also to refund the amounts paid by members of the corporation, as evidenced by its register of membership certificates, and the refunds may be made concurrently with the payment of bonds or other obligations of the corporation.
3. Notwithstanding the fact that refunds from time to time may be made as provided in subsection (b) of this section, no prior legal right to such revenues of the corporation shall ever attach for the purpose of making refunds on membership certificates so long as any bonds or other obligations of the corporation remain outstanding.

History. Acts 1955, No. 404, § 22; 1957, No. 47, § 2; A.S.A. 1947, § 9-525; Acts 2001, No. 620, § 4.

Meaning of “this act”. See note to § 15-4-501.

15-4-514. Authority to borrow money, issue bonds, etc.

1. Each corporation organized under this act is authorized to borrow money and to issue negotiable coupon bonds, or notes, or other obligations for the payment thereof from corporate funds to carry out the purposes for which the corporation is organized.
2. However, no first lien bonds, notes, or other obligations shall be issued by any corporation organized under the provisions of this act for the purpose of purchasing any equipment or other personal property not used in manufacturing or processing operations.

History. Acts 1955, No. 404, § 27; 1957, No. 47, § 5; 1968 (2nd Ex. Sess.), No. 11, § 2; A.S.A. 1947, § 9-530.

Meaning of “this act”. See note to § 15-4-501.

15-4-515. Exemption from Arkansas Securities Act.

Whenever any corporation organized under this act borrows money, the bonds of the corporation or its other obligations issued to evidence such indebtedness shall be exempt from the provisions of the Arkansas Securities Act, § 23-42-101 et seq.

History. Acts 1955, No. 404, § 26; A.S.A. 1947, § 9-529.

Meaning of “this act”. See note to § 15-4-501.

15-4-516. [Repealed.]

A.C.R.C. Notes. The amendment to this section by Acts 1997, No. 540, § 74, is deemed to have been superseded by the repeal of this section by Acts 1997, No. 339, § 7. Acts 1997, No. 540, § 74, substituted the phrase “Department of Economic Development” for “Department of Industrial Development.”

Publisher's Notes. This section, concerning the statement required to be presented to the commission prior to borrowing money or issuing bonds, was repealed by Acts 1997, No. 339, § 7. The section was derived from Acts 1955, No. 404, § 30; 1957, No. 47, § 8; A.S.A. 1947, § 9-533; Acts 1997, No. 540, § 74.

15-4-517. Bond issue — Terms.

1. 1. Bonds, notes, or other obligations issued under the provisions of this act shall be issued by the corporation in such form as its directors may provide and shall be executed by the president and the secretary of the corporation and be sealed with its corporate seal.
   2. In the event any of the officers whose signatures appear on any such obligations shall cease to be officers before the delivery thereof, the signatures shall, nevertheless, be valid and sufficient for all purposes the same as if they had remained in office until delivery.
   3. Signatures to interest coupons attached to any such obligation may be lithographed or engraved.
2. First lien obligations of the corporation shall bear interest at such rate or rates, payable semiannually, and shall be payable at such times and places not exceeding twenty-five (25) years from their date, as shall be prescribed by the corporation.

History. Acts 1955, No. 404, § 28; 1957, No. 47, § 6; 1968 (2nd Ex. Sess.), No. 11, § 3; 1971, No. 210, § 1; 1981, No. 425, § 49; A.S.A. 1947, § 9-531.

Meaning of “this act”. See note to § 15-4-501.

15-4-518. Security for bonds.

1. 1. Such bonds, notes, or other obligations as may be issued by the corporation may be secured by a mortgage or deed of trust of any of the lands of the corporation and the improvements constructed or proposed to be constructed thereon and machinery and equipment installed or to be installed therein.
   2. However, no corporation shall issue first lien obligations under the provisions of this act in excess of eighty percent (80%) of the appraised or cost value duly established of such lands, improvements, machinery, and equipment mortgaged to secure payment of the obligations.
2. Obligations may be secured additionally by a mortgage or deed of trust on any other personal property of the corporation, by a pledge of the revenues of the corporation derived from the properties mortgaged to secure the obligations, and by a pledge of any and all other income of the corporation.

History. Acts 1955, No. 404, § 28; 1957, No. 47, § 6; 1968 (2nd Ex. Sess.), No. 11, § 4; A.S.A. 1947, § 9-531.

Meaning of “this act”. See note to § 15-4-501.

15-4-519. [Repealed.]

A.C.R.C. Notes. The amendment to this section by Acts 1997, No. 540, § 75, is deemed to have been superseded by the repeal of this section by Acts 1997, No. 339, § 8. Acts 1997, No. 540, § 75, substituted the phrase “Department of Economic Development” for “Department of Industrial Development.”

Publisher's Notes. This section, concerning the validity of bonds or notes and the countersignature of the chairman of the commission, was repealed by Acts 1997, No. 339, § 8. The section was derived from Acts 1955, No. 404, § 28; 1957, No. 47, § 6; A.S.A. 1947, § 9-531; Acts 1997, No. 540, § 75.

15-4-520. Excess funds.

1. Any funds remaining with the corporation in excess of the amount necessary to finance a project, including the cost of lands, buildings, and facilities and other expenses necessary to its completion, shall be used by the corporation to reduce the amount of its first lien obligations.
2. For this purpose, the corporation shall call its first lien obligations for payment in inverse numerical order not later than the next interest payment date after completion of the project.

History. Acts 1955, No. 404, § 28; 1957, No. 47, § 6; A.S.A. 1947, § 9-531.

15-4-521. Sale of obligations.

1. Obligations of the corporation may be sold at public or private sale as the corporation shall determine.
2. 1. No first lien obligations may be sold for less than par on the basis of interest thereon at the rate of ten percent (10%) per annum.
   2. However, any obligation of the corporation may be sold with the privilege of conversion into obligations bearing a lower rate or rates of interest on such terms that the corporation shall receive no less and pay no more than substantially the same that it would have received and paid had no conversion been effected.
3. Any conversion of obligations must be approved by the trustee provided in the deed of trust given to secure the payment of the obligations.
4. No brokerage, agent's fees, or commissions of any kind for securing a purchaser of the bonds shall be allowed.
5. Obligations may be sold and delivered at one (1) time or in parcels as funds are needed.
6. The proceeds derived from the sale of obligations of the corporation shall be used exclusively for the purpose for which issued.

History. Acts 1955, No. 404, §§ 31, 32; 1957, No. 47, §§ 9, 10; 1968 (2nd Ex. Sess.), No. 11, § 5; 1971, No. 210, § 2; A.S.A. 1947, §§ 9-534, 9-535; Acts 1997, No. 339, § 9.

15-4-522. Refunding obligations.

1. Any corporation organized under this act shall have the right to refund its outstanding obligations at any time.
2. All refunding obligations shall state on their face that they are refunding obligations, and no refunding obligations shall be issued until the debt refunded is cancelled simultaneously with the issue of the refunding obligations, either:
   1. By the surrender of the obligations being refunded; or
   2. If the outstanding obligations are redeemable before maturity and have been called for redemption, by the deposit of the money for their payment on presentation according to the terms of the call, in trust, with the paying agent for the obligations to be refunded; or
   3. By a combination of methods set out in subdivisions (b)(1) and (2) of this section.

History. Acts 1955, No. 404, § 33; 1957, No. 47, § 11; A.S.A. 1947, § 9-536; Acts 1997, No. 339, §§ 10, 11; 1997, No. 540, § 76.

A.C.R.C. Notes. The amendment to former subsection (c) of this section by Acts 1997, No. 540, § 76, is deemed to have been superseded by the repeal of former subsection (c) by Acts 1997, No. 339, § 11. Acts 1997, No. 540, § 76, in former subsection (c), substituted the phrase “Department of Economic Development” for “Department of Industrial Development.”

Meaning of “this act”. See note to § 15-4-501.

15-4-523. Authorized investors.

1. Any city or town in this state or any board, commission, or other authority duly established by ordinance of any such city or town or the boards of trustees, respectively, of the firemen's relief and pension fund and the policemen's pension and relief fund of any such city or town may invest any of its funds not immediately needed for its purposes in the bonds or other obligations of any industrial or economic development corporation having its principal office in the county in which any such city or town is located.
2. The board of trustees of any retirement system created by the General Assembly, in its discretion, may invest its funds in first lien coupon bonds of any corporation organized under the provisions of this act.

History. Acts 1955, No. 404, §§ 20, 35; 1957, No. 47, § 1; A.S.A. 1947, §§ 9-523, 9-538; Acts 2001, No. 620, § 5.

Meaning of “this act”. See note to § 15-4-501.

15-4-524. Tax exemptions.

Interest on bonds or other obligations issued in accordance with the provisions of this act shall be exempt from all state income taxes and the principal thereof from inheritance taxation.

History. Acts 1955, No. 404, § 36; 1957, No. 47, § 13; A.S.A. 1947, § 9-539.

Meaning of “this act”. See note to § 15-4-501.

15-4-525. Dissolution.

1. Any corporation organized under this act, after the payment in full and cancellation of its bonds and other obligations issued under the provisions of this act or the deposit in trust with the trustee provided in the deed of trust given to secure the payment of all such obligations of a sum of money sufficient for the purpose, may dissolve by a majority vote of the members present in person or by proxy at any regular meeting or at any special meeting of its members called for that purpose.
2. A certificate of dissolution shall be signed by the president or vice president and attested to by the secretary certifying to the dissolution and stating that they have been authorized to execute and file the certificate by vote cast in person or by proxy by a majority of the members of the corporation.
3. A certificate of dissolution shall be executed, acknowledged, filed, and recorded in the same manner as the original articles of incorporation of a corporation organized under this act.
4. As soon as the Secretary of State shall have accepted the certificate of dissolution for filing and issued a certificate of dissolution, the corporation shall be deemed to be dissolved.
5. However, the corporation shall continue for the purpose of paying, satisfying, and discharging any other existing liabilities or obligations, collecting or liquidating its assets, and doing all other acts required to adjust and wind up its business and affairs, and may sue and be sued in its corporate name.
6. Any assets remaining after all liabilities or other obligations of the corporation have been satisfied or discharged shall be distributed pro rata among the members of the corporation at the time of the filing of the certificate of dissolution.
7. Any corporation which purports to have been incorporated under this act but which has not complied with all of the requirements for legal corporate existence and which does not have outstanding and unpaid any bonds or other obligations authorized to be issued under the provisions of this act, nevertheless may file a certificate of dissolution in the same manner as a validly existing corporation.
8. The certificate of dissolution, in such case, may be authorized by a majority of the incorporators or directors at a meeting called by any incorporator upon ten (10) days' notice mailed to the last known post office address of each incorporator or director and held at the principal office of the corporation named in the articles of incorporation.

History. Acts 1955, No. 404, § 24; 1957, No. 47, § 3; A.S.A. 1947, § 9-527.

Meaning of “this act”. See note to § 15-4-501.

Subchapter 6 — Industrial Revenue Bond Guaranty Law

Cross References. Municipalities and Counties Industrial Development Revenue Bond Law, § 14-164-201 et seq.

Preambles. Acts 1967, No. 173 contained a preamble which read:

“Whereas, the people of Arkansas, having recognized the need for a competitive industrial financing program, in 1958 voted approval of Constitutional Amendment No. 49 which empowered counties and municipalities to issue general obligation bonds in connection with the securing and development of industry, debt service of which was limited to five mills of the assessed valuation of real and personal property within the participating units; and

“Whereas, because of the limiting features of Amendment 49 and for other purposes the Legislature, in special session January, 1960, expanded Arkansas' industrial financing program by enactment of Act 9 which enabled counties and municipalities also to issue revenue bonds for use in the securing or development of industry; and

“Whereas, the experience of the Arkansas Industrial Development Commission now shows there are many sound industries in the middle range whose financial requirements are too large in many instances for general obligation issues, and too small to be attractive to the revenue bond investing public. Moreover, many counties and towns now have exhausted all the millage allowed under Amendment 49. As a consequence, it now appears necessary that the Arkansas industrial finance programs be expanded and improved….”

Effective Dates. Acts 1967, No. 173, § 11: approved Feb. 28, 1967. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the State of Arkansas now has inadequate industrial financing programs to encourage and maintain the accelerating industrial development of the state and of its several sections, that on account of such inadequate financial programs the State of Arkansas is now unable to successfully compete for industry with other states, that on account thereof the State of Arkansas henceforth may be expected to have a decelerated industrial development program and thus cause the State of Arkansas to suffer immediate and irreparable economic losses, and that only by passage of this act and immediate effectuation of its provisions can the State of Arkansas prevent substantial economic losses. For these reasons an emergency is hereby declared to exist, and this act which is necessary for the preservation of the public peace, health and safety shall take effect and be in full force from and after its passage.”

Acts 1971, No. 251, § 7: approved Mar. 9, 1971. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly that the enlarging and strengthening of the Industrial Revenue Bond Guaranty Law provided for herein is essential to the accelerating of industrial development of the state without which the state and its citizens will suffer irrevocable loss, and that only by passage of this act and immediate effectuation of its provisions can such loss be prevented. For these reasons an emergency is hereby declared to exist, and this act which is necessary for the preservation of the public peace, health and safety shall take effect and be in full force from and after its passage.”

Acts 1975 (Extended Sess., 1976), No. 1183, § 3: Feb. 11, 1976. Emergency clause provided: “It is hereby found and determined by the General Assembly that it is essential to the industrial development program of this state that information filed in support of requests by counties or municipalities for a guaranty under the Industrial Revenue Bond Guaranty Law be kept confidential in those instances where the guaranty application is rejected or unless the municipality or county is aggrieved by the rejection thereof; that the making of such applications public information in circumstances other than as authorized in this act could do irreparable harm to prospective industries and could jeopardize the obtaining of suitable industries by municipalities or counties who wish to issue industrial development revenue bonds, and that the immediate effectiveness of this act is necessary in order to provide the necessary protection to municipalities and counties and their industrial prospects in those circumstances where a guaranty application is not submitted for approval by the Arkansas Industrial Development Commission after staff or committee review. Therefore, an emergency is hereby declared to exist, and this act being necessary for the immediate preservation of the public peace, health, and safety shall be in full force and effect from and after its passage and approval.”

Acts 1977 (1st Ex. Sess.), No. 10, § 2: Aug. 15, 1977. Emergency clause provided: “It is hereby found and determined by the General Assembly that the strengthening of the Industrial Revenue Bond Guaranty Law is essential to the acceleration of industrial development in the state; that industrial growth provides additional employment and income to the people of this state thereby increasing the revenues of the state; and that the immediate passage of this act is necessary to increase the limits on the amount of industrial revenue bonds that may be guaranteed thereby giving the Arkansas Industrial Development Commission additional means of stimulating the economic growth of the state. Therefore, an emergency is hereby declared to exist, and this act being immediately necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1979, No. 115, § 4: Feb. 13, 1979. Emergency clause provided: “It is hereby found and determined by the General Assembly that the strengthening of the Industrial Revenue Bond Guaranty Law is essential to the acceleration of industrial development in the State; that industrial growth provides additional employment and income to the people of this State thereby increasing the revenues of the State; and that the immediate passage of this Act is necessary to increase the limits on the amount of industrial revenue bonds that may be guaranteed thereby giving the Arkansas Economic Development Commission additional means of stimulating the economic growth of the State. Therefore, an emergency is hereby declared to exist, and this Act being immediately necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1981, No. 259, § 4: Feb. 27, 1981. Emergency clause provided: “It is hereby found and determined by the General Assembly that the strengthening of the State's industrial development revenue bond guaranty program is essential to the acceleration of industrial development in the State, that industrial growth provides additional employment and income to the people of this State, and that the immediate passage of this Act is necessary to strengthen that program, thereby giving the Economic Development Commission of the State of Arkansas additional means of stimulating the economic growth of the State. Therefore, an emergency is hereby declared to exist, and this Act being immediately necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1985, No. 864, § 3: Apr. 4, 1985. Emergency clause provided: “It is hereby found and determined by the General Assembly that the strengthening of the Industrial Revenue Bond Guaranty Law is essential to the acceleration of industrial development in the State; that industrial growth provides additional employment and income to the people of this State thereby increasing the revenues of the State; and that the immediate passage of this Act is necessary to increase the limits on the amount of industrial revenue bonds that may be guaranteed. Therefore, an emergency is hereby declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1987, No. 996, § 3: Apr. 14, 1987. Emergency clause provided: “It is hereby found and determined by the General Assembly that because of the case Ricarte v. State, CR 86-31, a question has arisen over the validity of Act 1183 of the Extended Session of 1976; that this Act is a reenactment of the former law; and that the immediate passage of this Act is necessary to clarify the state of the law on this issue. Therefore, an emergency is hereby declared to exist, and this Act being necessary for the immediate preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1987 (1st Ex. Sess.), No. 39, § 8: June 19, 1987. Emergency clause provided: “It is hereby found and determined by the General Assembly that permitting bonds issued by the Arkansas Development Finance Authority to be guaranteed under the provisions of Act 173 of 1967, as amended, will further encourage the location of industry in Arkansas, thereby significantly assisting in the economic and industrial development of the State. Therefore, an emergency is hereby declared to exist and this Act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 778, § 8: Mar. 24, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly that there is an immediate need to facilitate the guaranty of revenue bonds by the Arkansas Industrial Development Commission for the purpose of securing and developing industry. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

15-4-601. Title.

This subchapter shall be referred to and may be designated as the “Industrial Revenue Bond Guaranty Law”.

History. Acts 1967, No. 173, § 1; A.S.A. 1947, § 9-559.

15-4-602. Definitions.

As used in this subchapter:

1. “Act No. 9 bonds” means revenue bonds issued in accordance with the provisions of the Municipalities and Counties Industrial Development Revenue Bond Law, § 14-164-201 et seq.;
2. “ADFA bonds” means revenue bonds and direct loans, including bond anticipation loans, issued by the Arkansas Development Finance Authority in accordance with the Arkansas Development Finance Authority Act, §§ 15-5-101 — 15-5-106, 15-5-201 — 15-5-211, 15-5-213, and 15-5-301 — 15-5-316;
3. “Amortization payments” means periodic, which may be monthly, semiannual, annual, etc., payments of interest, and payments of principal, whether the principal is payable in installments or otherwise, including principal required to be prepaid upon the happening of certain events, as required by an Act No. 9 bond or Arkansas Development Finance Authority indenture or resolution; and
4. “User” means the lessee or other principal user of the industrial project to be financed, in whole or in part, with the proceeds of Act No. 9 bonds or ADFA bonds.

History. Acts 1967, No. 173, § 2; A.S.A. 1947 § 9-560; Acts 1987 (1st Ex. Sess.), No. 39, § 1; 1997, No. 778, § 1; 2001, No. 1032, § 1.

Publisher's Notes. Acts 1987 (1st Ex. Sess.), No. 39, § 7, provided that it is the intention of the act to amend such sections of Acts 1967, No. 173, as amended, as are specifically mentioned in the act and that the remainder of Acts 1967, No. 173 shall remain in full force and effect as enacted until the same shall be further amended or repealed.

15-4-603. Arkansas Economic Development Council empowered to grant or deny guaranty bonds.

The Arkansas Economic Development Council, called the “council”, in addition to all the duties and functions defined in §§ 15-4-101, 15-4-102, 15-4-201 — 15-4-204, 15-4-206, 15-4-209 — 15-4-212, and 15-4-501 — 15-4-525, is empowered to approve or deny by majority vote of the membership of the council the guaranty as provided in this subchapter of amortization payments on Act No. 9 bonds or ADFA bonds, subject to the provisions, restrictions, and conditions set forth in this subchapter.

History. Acts 1967, No. 173, § 2; A.S.A. 1947, § 9-560; Acts 1987 (1st Ex. Sess.), No. 39, § 1; 1997, No. 540, § 28; 1997, No. 778, § 2.

Publisher's Notes. As to legislative intent of Acts 1987 (1st Ex. Sess.), No. 39, see Publisher's Note to § 15-4-602.

15-4-604. When bonds may be guaranteed — Standards and rules for evaluations.

1. Amortization payments on Act No. 9 bonds and ADFA bonds may be guaranteed in instances when:
   1. Substantial employment is involved;
   2. The total principal amount of all outstanding Act No. 9 bonds and ADFA bonds under guaranty is not in excess of one hundred million dollars ($100,000,000);
   3. No one (1) issue or series of Act No. 9 bonds or ADFA bonds guaranteed under this section shall exceed five million dollars ($5,000,000) in principal amount;
   4. The user of the industrial project involved is not permitted to purchase or own at any time any of such bonds; and
   5. The user is found to be financially responsible and the full payment of the interest and principal amount of the bonds may reasonably be expected.
2. The Arkansas Economic Development Council shall promulgate standards and rules for the evaluation of the financial condition and business history of users.

History. Acts 1967, No. 173, § 3; 1967, No. 509, § 1; 1969, No. 397, § 3(a); 1971, No. 251, § 1; 1977 (1st Ex. Sess.), No. 10, § 1; 1979, No. 115, §§ 1, 2; 1981, No. 259, § 1; 1985, No. 864, § 1; A.S.A. 1947, § 9-561; Acts 1987 (1st Ex. Sess.), No. 39, § 2; 1997, No. 778, § 3; 2001, No. 1032, § 2; 2019, No. 315, § 1057.

Publisher's Notes. As to legislative intent of Acts 1987 (1st Ex. Sess.), No. 39, see Publisher's Note to § 15-4-602.

Amendments. The 2019 amendment substituted “rules” for “regulations” in (b).

15-4-605. Revenue Bond Guaranty Reserve Account — Investment of funds.

1. The Arkansas Economic Development Council is authorized to:
   1. 1. Establish a Revenue Bond Guaranty Reserve Account, sometimes referred to in this subchapter as the “account”, in any Arkansas bank that is a member of the Federal Deposit Insurance Corporation.
      2. Each account shall be in the name of the council, and the amount thereof in excess of that insured by the Federal Deposit Insurance Corporation must be secured by direct obligations of the United States or general obligations of the State of Arkansas or political subdivisions thereof; and
   2. 1. Invest funds in the account in either direct obligations of the United States or certificates of deposit issued by an Arkansas bank or banks.
      2. All moneys received by the council under and pursuant to the provisions of this subchapter shall be deposited as and when received into the account.
      3. It is the intent of this subchapter that idle funds in the account shall be invested in direct obligations of the United States or certificates of deposit issued by an Arkansas bank or banks, as provided in this section, in order that maximum interest return may be received by the account.
2. All moneys now or hereafter deposited into, or paid to the council for deposit into, the account are specifically declared to be cash funds, received from sources other than taxes, restricted in their use. These moneys shall not be deposited into the State Treasury but shall be deposited into one (1) or more banks, as set forth in subsection (a) of this section.

History. Acts 1967, No. 173, § 4; 1969, No. 397, § 3(b); A.S.A. 1947, § 9-562.

15-4-606. Evidence to support guaranty — Review of applications.

1. 1. 1. Each county or municipality requesting a guaranty under this subchapter shall submit to the Arkansas Economic Development Council evidence showing conformity with §§ 14-164-201 — 14-164-206 and 14-164-208 — 14-164-224 and such other supporting documents as the council shall require. The application and documentation may be submitted by the user of the industrial project involved.
      2. When a guaranty is requested with respect to ADFA bonds, the Arkansas Development Finance Authority shall submit to the council evidence showing conformity with §§ 15-5-101 — 15-5-105, 15-5-201 — 15-5-211, and 15-5-301 — 15-5-316 and such other supporting documents as the council shall reasonably require.
   2. 1. All applications for guaranties shall be accompanied by a one-time premium payment to the Revenue Bond Guaranty Reserve Account in an amount equal to whichever is the larger amount of either:
         1. Three percent (3%) of the amount of the total principal and interest requirements from date of issuance to maturity of the Act No. 9 bonds or ADFA bonds guaranteed; or
         2. Five percent (5%) of the principal amount of the Act No. 9 bonds or ADFA bonds guaranteed.
      2. The premium payment may be collected by the county or municipality or the authority from the lessee of the industrial project involved.
2. 1. All applications filed with the council under the provisions of this subchapter shall first be reviewed by the appropriate designated staff officials of the council or by a committee consisting of members of the council for preliminary review and recommendation prior to being submitted for consideration by the council.
   2. 1. All applications submitted to the council and all supporting documents, instruments, proposed contracts, estimated costs, or other evidence submitted therewith shall be confidential and shall not be open to public review except as provided in this section.
      2. All staff meetings or meetings of the review committee of members of the council established for the purpose of giving preliminary review of such applications shall be confidential and shall not be open to the public.
   3. Upon conclusion of the preliminary review of each request for a guaranty under this subchapter, if the request for guaranty is submitted to the council with a recommendation that it be approved, the application and all supporting documents, including the findings and the recommendations resulting from the staff or review committee thereof, shall be an open public record available for inspection during all regular business hours.
   4. In the event that an application from a municipality or county or the authority requesting a guaranty under this subchapter is not recommended for approval by the council, that application and all supporting documents, including all findings and recommendations in regard thereto by the staff or review committee, shall continue to be confidential and not open to public inspection.
   5. The municipality or county or the authority shall be notified in writing of any staff or review committee determination that the application is not being submitted to the council with a recommendation that it be approved. This notice shall advise the municipality or county or the authority that the application will be kept confidential unless the municipality or county or the authority, within thirty (30) days from the date of receipt of the written notice, shall file a petition with the council requesting that the council hold a hearing in regard to the application. In this event, the application and all supporting documents shall become public information available for public inspection.
3. The membership of a review committee, when acting in that capacity, shall never be considered to constitute a quorum of the council for the purpose of approving an application for guaranty under this subchapter.
4. No provision of this section shall be interpreted to create any private right against any member of the council or any member of its staff.

History. Acts 1967, No. 173, § 5; 1971, No. 251, § 2; 1975 (Extended Sess., 1976), No. 1183, § 1; A.S.A. 1947, § 9-563; reen. Acts 1987, No. 996, § 1; 1987 (1st Ex. Sess.), No. 39, § 3; 1997, No. 540, § 29; 1997, No. 778, § 4.

A.C.R.C. Notes. This section was reenacted by Acts 1987, No. 996, § 1. Acts 1987, No. 834 provided that 1987 legislation reenacting acts passed in the 1976 Extended Session should not repeal any other 1987 legislation and that such other legislation would be controlling in the event of conflict.

Acts 1987, No. 996, § 2, provided, in part, that in the case of any conflict between the provisions of the act and any other law pertaining to meetings of, or the disclosure of information by, public agencies, the provisions of the act shall control.

Publisher's Notes. Acts 1971, No. 251, § 4, provided that all guaranties issued in accordance with the provisions of Acts 1967, No. 173, as amended, were ratified and validated.

As to legislative intent of Acts 1987 (1st Ex. Sess.), No. 39, see Publisher's Note to § 15-4-602.

15-4-607. Power to accept grants.

The Arkansas Economic Development Council is authorized to accept grants to its Revenue Bond Guaranty Reserve Account from any federal agencies, municipalities, corporations, foundations, individual donees, or authorities.

History. Acts 1967, No. 173, § 6; A.S.A. 1947, § 9-564.

15-4-608. Guaranty agreement provisions.

Guaranty agreements entered into by the Arkansas Economic Development Council under the provisions of this subchapter with respect to Act No. 9 bonds issued by any municipality or county or the Arkansas Development Finance Authority shall provide, among other things, that:

1. 1. The council guarantees and the council is required to use the funds on deposit in the Revenue Bond Guaranty Reserve Account to meet amortization payments as guaranteed under this subchapter as the payments become due in the event and to the extent the issuer of the bonds is unable to meet such payments in accordance with the terms of the bond indenture when called on to do so by the trustee of the bondholders.
   2. Whenever the council, acting under the terms of the guaranty agreement, deems it necessary to assume the obligation of maintenance of any building or facility, the amortization payments of which the council has guaranteed under the provisions of this subchapter, the council may use funds on deposit in the account to pay insurance and maintenance costs required for the preservation of the building or facility and to protect the reserve account from loss or to minimize losses in such manner as deemed necessary and advisable by the council; and
2. 1. The guaranty shall not be a general obligation of the council or of the State of Arkansas but shall be a special obligation. In no event shall the guaranty constitute an indebtedness of the council or of the State of Arkansas within the meaning of any constitutional or statutory limitation.
   2. Each guaranty agreement shall:
      1. Have plainly stated on the face thereof that:
         1. It has been entered into under the provisions of this subchapter;
         2. It does not constitute an indebtedness of the council or the State of Arkansas within any constitutional or statutory limitation; and
         3. The full faith and credit of the State of Arkansas or any of its revenues are not pledged to meet any of the obligations of the council under such a guaranty agreement; and
      2. State that the obligation of the council under the guaranty shall be limited to the funds available in the account as authorized in this subchapter.

History. Acts 1967, No. 173, § 7; 1969, No. 397, § 3(c); A.S.A. 1947, § 9-565; Acts 1987 (1st Ex. Sess.), No. 39, § 4.

Publisher's Notes. As to legislative intent of Acts 1987 (1st Ex. Sess.), No. 39, see Publisher's Note to § 15-4-602.

15-4-609. Rules.

1. The Arkansas Economic Development Council is authorized and directed to conduct such investigation as it may determine necessary for the promulgation of rules to govern the operation of the guaranty program authorized by this subchapter.
2. These rules shall include the restrictions and conditions imposed by this subchapter, including particularly those set forth in §§ 15-4-604 and 15-4-608. The rules may include such other additional provisions, restrictions, and conditions as the council, after the investigation referred to in subsection (a) of this section, shall determine to be proper to achieve the most effective utilization of the guaranty program authorized by this subchapter. This may include, without limitation, a detailing of the remedies that must be exhausted by the bondholders or a trustee acting in their behalf prior to calling upon the council to perform under its guaranty agreement and the subrogation or other rights of the council with reference to the industrial project and its operation in the event the council makes payment pursuant to the applicable guaranty agreement.
3. In this regard, the council is expressly authorized to enter into such agreements and otherwise take such action as may be necessary to exercise the authority conferred by this subchapter or to evidence the exercise thereof.
4. The rules promulgated by the council to govern the operation of the guaranty program shall contain specific provisions with respect to the rights of the council to enter, take over, and manage the industrial development properties upon default. These rules shall set forth the respective rights of the council and the bondholders in regard thereto.
5. Such rules shall be in conformity with §§ 14-164-201 — 14-164-206, 14-164-208 — 14-164-224, 15-5-101 — 15-5-105, 15-5-201 — 15-5-211, and 15-5-301 — 15-5-316.

History. Acts 1967, No. 173, § 8; A.S.A. 1947, § 9-566; Acts 1987 (1st Ex. Sess.), No. 39, § 5; Acts 2019, No. 315, § 1058.

Publisher's Notes. As to legislative intent of Acts 1987 (1st Ex. Sess.), No. 39, see Publisher's Note to § 15-4-602.

Amendments. The 2019 amendment substituted “Rules” for “Regulations” in the section heading and substituted “rules” for “regulations” throughout the section.

Subchapter 7 — Industrial Development Guaranty Bond Act

Effective Dates. Acts 1981, No. 259, § 4: Feb. 27, 1981. Emergency clause provided: “It is hereby found and determined by the General Assembly that the strengthening of the State's industrial development revenue bond guaranty program is essential to the acceleration of industrial development in the State, that industrial growth provides additional employment and income to the people of this State, and that the immediate passage of this Act is necessary to strengthen that program, thereby giving the Economic Development Commission of the State of Arkansas additional means of stimulating the economic growth of the State. Therefore, an emergency is hereby declared to exist, and this Act being immediately necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-701. Title.

This subchapter shall be known and may be cited as the “Industrial Development Guaranty Bond Act”.

History. Acts 1969, No. 397, § 4; A.S.A. 1947, § 9-568.

15-4-702. Authority to use Arkansas Economic Development Council moneys if account is insufficient.

If the Arkansas Economic Development Council shall at any time determine that the moneys in the Revenue Bond Guaranty Reserve Account, sometimes referred to in this subchapter as “account”, created and being maintained pursuant to the provisions of the Industrial Revenue Bond Guaranty Law, § 15-4-601 et seq., are not or will not be sufficient to meet the obligations of the account, the council is authorized to use the necessary amount of any available moneys that it may have which are not needed for or committed to other authorized functions and purposes of the council then or in the foreseeable future. Any such moneys so used may be reimbursed out of the account if and when there are moneys therein available for the purpose.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567; Acts 1997, No. 540, § 30.

15-4-703. Authority to issue bonds — Arkansas Economic Development Council determinations.

1. If at the time there are no other available moneys to meet the then-present or reasonably projected obligations of the Revenue Bond Guaranty Account, the Arkansas Economic Development Council shall proceed promptly to issue bonds, as authorized in this subchapter, in such principal amounts as may be necessary to enable the council to meet, as and when due, all obligations of the account.
2. The authority to issue bonds shall be a continuing authority that may be exercised from time to time.
3. Determination of when additional moneys will be needed for the account, the amounts that will be needed, the availability or unavailability of other moneys, the necessity for the issuance of bonds, and the principal amounts of bonds to be issued shall be made solely by the council in the exercise of its discretion.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567.

15-4-704. Authorizing resolution — Bond issuance, form, and contents.

1. The bonds shall be authorized by resolution of the Arkansas Economic Development Council.
2. The bonds may be issued at one (1) time or in series from time to time. If in series, the initial series shall be designated “Series A” and subsequent series shall be designated in alphabetical order.
3. All bonds issued under this subchapter, regardless of series, shall be on a parity as to lien, pledge, and security.
4. The bonds may:
   1. 1. Be coupon bonds payable to bearer or may be registrable as to principal only with interest coupons or may be registrable as to both principal and interest without coupons, and may be made exchangeable for bonds of another denomination.
      2. The bonds of another denomination may in turn be either coupon bonds payable to bearer or coupon bonds registrable as to principal only or bonds registrable as to both principal and interest without coupons; and
   2. Be in such form and denomination, may have such date or dates, may be stated to mature at such times, may bear interest payable at such times and at such rate or rates, provided that no bond may bear interest at a rate exceeding ten percent (10%) per annum, may be made payable at such places within or without the State of Arkansas, may be made subject to such terms of redemption in advance of maturity at such prices, and may contain such terms and conditions, all as the council shall determine.
5. The bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas, subject to provisions as to registration of ownership, as set forth in subsection (d) of this section.
6. The authorizing resolution may contain any other terms, covenants, and conditions that the council determines are desirable, including, without limitation, those pertaining to the:
   1. Maintenance of various funds and reserves;
   2. Nature and extent of the security;
   3. Custody and application of the proceeds of the bonds;
   4. Collection and disposition of revenues; and
   5. Rights, duties, and obligations of the council and of the holders and registered owners of the bonds.

History. Acts 1969, No. 397, § 1; 1971, No. 209, § 1; A.S.A. 1947, § 9-567.

Cross References. Negotiable instruments, § 4-3-101 et seq.

15-4-705. Trust indenture.

1. The resolution authorizing the issuance of bonds may provide for the execution of a trust indenture by the Arkansas Economic Development Council with a bank or trust company within or without the State of Arkansas.
2. The trust indenture may contain any terms, covenants, and conditions that are deemed desirable by the council, including without limitation, those pertaining to the maintenance of various funds and reserves, the nature and extent of the security, the custody and application of the proceeds of the bonds, the collection and disposition of revenues, and the rights, duties, and obligations of the council and of the holders and registered owners of the bonds.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567.

15-4-706. Execution and delivery of bonds.

1. The bonds shall be executed by the facsimile signature of the Chair of the Arkansas Economic Development Council and by the manual signature of the Director of the Arkansas Economic Development Commission.
2. Interest coupons attached to the bonds shall be executed with the facsimile signature of the chair.
3. Delivery of the bonds and coupons so executed shall be valid notwithstanding any change in persons holding such offices occurring after the bonds have been executed.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567; Acts 1997, No. 540, § 77; 2019, No. 910, § 364.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (a).

15-4-707. Temporary notes or bonds.

Temporary notes or bonds conforming generally to the provisions of this subchapter, exchangeable for definitive bonds, may be issued in the discretion of the Arkansas Economic Development Council.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567.

15-4-708. Sale of bonds.

1. The bonds shall be sold at public sale on sealed bids.
2. Notice of the sale shall be published one (1) time a week for three (3) consecutive weeks in a newspaper published in the City of Little Rock and having a general circulation throughout the State of Arkansas, with the first publication to be at least twenty (20) days prior to the date of sale.
3. The award, if made, shall be to the bidder whose bid results in the lowest net interest cost, determined by computing the aggregate interest cost at the rate bid and deducting any premium or adding the amount of any discount.

History. Acts 1969, No. 397, § 1; 1971, No. 209, § 2; 1981, No. 259, § 2; A.S.A. 1947, § 9-567.

15-4-709. Arkansas Economic Development Council obligations — Deposit of revenues and net proceeds.

1. All bonds issued under this subchapter shall be obligations of the Arkansas Economic Development Council only and shall not be obligations of the State of Arkansas and shall not be secured by a lien on any revenues of the State of Arkansas.
2. The bonds shall be payable from the Guaranty Bond Fund created by this subchapter and the revenues which, pursuant to the provisions of this subchapter, are to be deposited therein.
3. It shall be stated on the face of each bond that it has been issued under the provisions of this subchapter.
4. The net proceeds, meaning gross proceeds less all expenses of authorizing and issuing the bonds which shall be first paid out of the proceeds, of all bonds issued under this subchapter shall be deposited into the Revenue Bond Guaranty Reserve Account, except that accrued interest paid by the purchaser shall be deposited into the fund.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567.

15-4-710. Notice to State Board of Finance — Disposition of bond debt service amount.

1. The Arkansas Economic Development Council shall notify the State Board of Finance or the appropriate officer, board, or agency then having jurisdiction over the moneys involved when it has determined to issue bonds under this subchapter and the amount that will be needed each month after the bonds are issued to provide for the payment, when due, of interest, principal, trustee's and paying agent's fees and any other necessary expenses and to provide for the establishing and maintaining of reserves, if the council determines to establish reserves. The monthly amount is referred to in this section as the “bond debt service amount”.
2. After receipt of notice, the board or the appropriate officer, board, or agency then having jurisdiction over the moneys involved shall set aside the bond debt service amount out of interest derived from the investment of state funds pursuant to § 19-3-219 [repealed].
3. The bond debt service amount shall not be deposited into or deemed to be a part of the State Treasury for purposes of Arkansas Constitution, Article 5, § 29; Arkansas Constitution, Article 16, § 12; Arkansas Constitution, Amendment 20; or any other constitutional or statutory provision, but shall be paid directly to the council for deposit into a special fund of the council in a bank or trust company selected by the council designated “Guaranty Bond Fund”, also known as the “fund”.
4. Moneys in the fund shall be used to pay interest, principal, trustee's and paying agent's fees and to establish and maintain reserves all as shall be specified by the council in the resolution or trust indenture authorizing and securing the bonds.
5. The interest earnings, meaning the bond debt service amount transferred directly to the council, are declared to be cash funds restricted in their use and dedicated and to be used solely as authorized in this subchapter.
6. So long as any bonds issued under this subchapter are unpaid, no changes shall be made in laws of the State of Arkansas which would or could result in the council's not receiving as cash funds amounts of interest equaling the bond debt service amount.

History. Acts 1969, No. 397, § 1; A.S.A. 1947, § 9-567.

A.C.R.C. Notes. Section 19-3-219, referred to in this section, was repealed by Acts 1997, No. 847, § 4. For current law, see § 19-3-501 et seq.

Subchapter 8 — Arkansas Enterprise Zone Act of 1989

15-4-801 — 15-4-815. [Expired.]

A.C.R.C. Notes. The practical application of §§ 15-4-801 — 15-4-815 ended in April, 1995.

Publisher's Notes. This subchapter expired June 30, 1995, pursuant to former § 15-4-814. The subchapter was derived from the following sources:

15-4-801. Acts 1989, No. 462, § 1.

15-4-802. Acts 1989, No. 462, § 2.

15-4-803. Acts 1989, No. 462, § 3.

15-4-804. Acts 1989, No. 462, § 4.

15-4-805. Acts 1989, No. 462, § 5.

15-4-806. Acts 1989, No. 462, § 6.

15-4-807. Acts 1989, No. 462, § 7; 1992 (1st Ex. Sess.), No. 58, § 1; 1992 (1st Ex. Sess.), No. 61, § 1.

15-4-808. Acts 1989, No. 462, § 10; 1989 (3rd Ex. Sess.), No. 52, § 1.

15-4-809. Acts 1989, No. 462, § 11.

15-4-810. Acts 1989, No. 462, § 12.

15-4-811. Acts 1989, No. 462, § 9.

15-4-812. Acts 1989, No. 462, § 8.

15-4-813. Acts 1989, No. 462, § 16; 1989, No. 854, § 2.

15-4-814. Acts 1989, No. 462, § 14.

15-4-815. Acts 1993, No. 1142, § 1.

For current law, see the Arkansas Enterprise Zone Act of 1993, § 15-4-1701 et seq.

Subchapter 9 — Arkansas Development Finance Corporation Act

15-4-901 — 15-4-927. [Repealed.]

Publisher's Notes. This subchapter, concerning the Arkansas Development Finance Corporation Act, was repealed by Acts 2017, No. 426, § 3. The subchapter was derived from the following sources:

15-4-901. Acts 1957, No. 567, § 1; A.S.A. 1947, § 67-1601.

15-4-902. Acts 1957, No. 567, § 13; A.S.A. 1947, § 67-1613.

15-4-903. Acts 1957, No. 567, § 2; 1985, No. 667, § 1; A.S.A. 1947, § 67-1602.

15-4-904. Acts 1957, No. 567, § 26; A.S.A. 1947, § 67-1626.

15-4-905. Acts 1957, No. 567, § 25; 1961, No. 21, § 2; A.S.A. 1947, § 67-1625; Acts 2001, No. 64, § 1.

15-4-906. Acts 1957, No. 567, § 10; 1985, No. 667, § 2; A.S.A. 1947, § 67-1610.

15-4-907. Acts 1957, No. 567, § 3; A.S.A. 1947, § 67-1603.

15-4-908. Acts 1957, No. 567, § 4; A.S.A. 1947, § 67-1604.

15-4-909. Acts 1957, No. 567, § 5; A.S.A. 1947, § 67-1605.

15-4-910. Acts 1957, No. 567, § 6; A.S.A. 1947, § 67-1606.

15-4-911. Acts 1957, No. 567, § 7; A.S.A. 1947, § 67-1607.

15-4-912. Acts 1957, No. 567, § 8; A.S.A. 1947, § 67-1608.

15-4-913. Acts 1957, No. 567, § 9; A.S.A. 1947, § 67-1609.

15-4-914. Acts 1957, No. 567, § 11; 1985, No. 667, § 3; A.S.A. 1947, § 67-1611.

15-4-915. Acts 1957, No. 567, § 12; 1985, No. 667, § 4; A.S.A. 1947, § 67-1612; Acts 1997, No. 540, § 78; 2015 (1st Ex. Sess.), No. 7, § 90; 2015 (1st Ex. Sess.), No. 8, § 90.

15-4-916. Acts 1957, No. 567, § 13; 1985, No. 667, § 6; A.S.A. 1947, § 67-1613.

15-4-917. Acts 1957, No. 567, § 14; A.S.A. 1947, § 67-1614.

15-4-918. Acts 1957, No. 567, § 14; A.S.A. 1947, § 67-1614.

15-4-919. Acts 1957, No. 567, § 15; A.S.A. 1947, § 67-1615.

15-4-920. Acts 1957, No. 567, § 20; A.S.A. 1947, § 67-1620.

15-4-921. Acts 1957, No. 567, § 21; A.S.A. 1947, § 67-1621.

15-4-922. Acts 1957, No. 567, § 17; A.S.A. 1947, § 67-1617.

15-4-923. Acts 1957, No. 567, § 18; 1985, No. 667, § 5; A.S.A. 1947, § 67-1618.

15-4-924. Acts 1957, No. 567, § 22; A.S.A. 1947, § 67-1622.

15-4-925. Acts 1957, No. 567, § 23; A.S.A. 1947, § 67-1623.

15-4-926. Acts 1957, No. 567, § 24; A.S.A. 1947, § 67-1624.

15-4-927. Acts 1957, No. 567, § 16; A.S.A. 1947, § 67-1616.

Subchapter 10 — Arkansas Capital Development Company Act

A.C.R.C. Notes. Pursuant to § 1-2-207(b) and Acts 2017, No. 374, § 44, § 15-4-1026 is deemed repealed by Acts 2017, No. 426, § 4. Acts 2017, No. 374, § 44 amended subdivision (a)(3)(B) of this section to change the phrase “proceeds by the funds” to “proceeds by the venture capital funds or private equity funds”.

Acts 2017, No. 374, § 44, provided: “Construction and legislative intent. It is the intent of the General Assembly that:

“(1) The enactment and adoption of this act shall not expressly or impliedly repeal an act passed during the regular session of the Ninety-First General Assembly;

“(2) To the extent that a conflict exists between an act of the regular session of the Ninety-First General Assembly and this act:

“(A) The act of the regular session of the Ninety-First General Assembly shall be treated as a subsequent act passed by the General Assembly for the purpose of:

“(i) Giving the act of the regular session of the Ninety-First General Assembly its full force and effect; and

“(ii) Amending or repealing the appropriate parts of the Arkansas Code of 1987; and

“(B) Section 1-2-107 shall not apply; and

“(3) This act shall make only technical, not substantive, changes to the Arkansas Code of 1987.”

15-4-1001 — 15-4-1004. [Repealed.]

Publisher's Notes. These sections, concerning title, definitions, construction and application for approval, were repealed by Acts 2017, No. 426, § 4. The sections were derived from the following sources:

15-4-1001. Acts 1985, No. 410, § 1; A.S.A. 1947, § 67-1627; Acts 2003, No. 860, § 1.

15-4-1002. Acts 1985, No. 410, § 2; A.S.A. 1947, § 67-1628; Acts 2003, No. 860, § 1; 2007, No. 15, § 2.

15-4-1003. Acts 1985, No. 410, § 29; A.S.A. 1947, § 67-1655.

15-4-1004. Acts 1985, No. 410, § 3; A.S.A. 1947, § 67-1629; Acts 2003, No. 860, § 2.

15-4-1005 — 15-4-1007. [Repealed.]

Publisher's Notes. These sections, concerning preliminary investigation, preliminary approval, and organization, were repealed by Acts 2003, No. 860, § 3. The sections were derived from the following sources:

15-4-1005. Acts 1985, No. 410, § 4; A.S.A. 1947, § 67-1630.

15-4-1006. Acts 1985, No. 410, § 5; A.S.A. 1947, § 67-1631.

15-14-1007. Acts 1985, No. 410, § 6; A.S.A. 1947, § 67-1632.

For current law, see § 15-4-1011.

15-4-1008, 15-4-1009. [Repealed.]

Publisher's Notes. These sections, concerning ex officio members of the governing board and liability of governing board and officers, were repealed by Acts 2017, No. 426, § 4. The sections were derived from the following sources:

15-4-1008. Acts 1985, No. 410, § 7; A.S.A. 1947, § 67-1633; Acts 1997, No. 540, § 79; 2003, No. 860, § 4; 2005, No. 1759, § 1; 2015 (1st Ex. Sess.), No. 7, § 91; 2015 (1st Ex. Sess.), No. 8, § 91.

15-4-1009. Acts 1985, No. 410, § 16; A.S.A. 1947, § 67-1642; Acts 2003, No. 860, § 4.

15-4-1010. [Repealed.]

Publisher's Notes. This section, concerning certificate of organization, was repealed by Acts 2003, No. 860, § 5. The section was derived from Acts 1985, No. 410, § 8; A.S.A. 1947, § 67-1634.

For current law, see § 15-4-1011.

15-4-1011 — 15-4-1019. [Repealed.]

Publisher's Notes. These sections, concerning investigation and approval by the State Banking Board, commencement of existence, articles, amendment to articles, management of a capital development company, power, dividends and distributions, bonds or notes of the company, and authority of other corporations and financial institutions, were repealed by Acts 2017, No. 426, § 4. The sections were derived from the following sources:

15-4-1011. Acts 1985, No. 410, § 9; A.S.A. 1947, § 67-1635; Acts 2003, No. 860, § 6.

15-4-1012. Acts 1985, No. 410, § 10; A.S.A. 1947, § 67-1636; Acts 2003, No. 860, § 6.

15-4-1013. Acts 1985, No. 410, § 11; A.S.A. 1947, § 67-1637; Acts 2003, No. 860, § 6.

15-4-1014. Acts 1985, No. 410, § 12; A.S.A. 1947, § 67-1638; Acts 2003, No. 860, § 6.

15-4-1015. Acts 1985, No. 410, § 13; A.S.A. 1947, § 67-1639; Acts 2003, No. 860, § 6; 2005, No. 1759, § 2.

15-4-1016. Acts 1985, No. 410, § 14; A.S.A. 1947, § 67-1640; Acts 2003, No. 860, § 6.

15-4-1017. Acts 1985, No. 410, § 15; A.S.A. 1947, § 67-1641; Acts 2003, No. 860, § 6.

15-4-1018. Acts 1985, No. 410, § 18; A.S.A. 1947, § 67-1644; Acts 2003, No. 860, § 6.

15-4-1019. Acts 1985, No. 410, § 19; A.S.A. 1947, § 67-1645; Acts 2003, No. 860, § 6.

15-4-1020, 15-4-1021. [Repealed.]

Publisher's Notes. These sections, concerning loan limits for member financial institutions and withdrawal of members, were repealed by Acts 2003, No. 860, § 7. They were derived from the following souces:

15-4-1020. Acts 1985, No. 410, § 20; A.S.A. 1947, § 67-1646.

15-4-1021. Acts 1985, No. 410, § 21; A.S.A. 1947, § 67-1647.

15-4-1022 — 15-4-1031. [Repealed.]

Publisher's Notes. These sections, concerning compliance with the Arkansas Securities Act, obligations as negotiable instruments, eligibility for certain investments, exemption from certain taxes, tax credit, investment and loan policy, supervision of capital development companies, dissolution, merger and application of business laws, were repealed by Acts 2017, No. 426, § 4. The sections were derived from the following sources:

15-4-1022. Acts 1985, No. 410, § 22; A.S.A. 1947, § 67-1648; Acts 2003, No. 860, § 8.

15-4-1023. Acts 1985, No. 410, § 23; A.S.A. 1947, § 67-1649; Acts 2003, No. 860, § 8.

15-4-1024. Acts 1985, No. 410, § 24; A.S.A. 1947, § 67-1650; Acts 2003, No. 860, § 8.

15-4-1025. Acts 1985, No. 410, § 25; A.S.A. 1947, § 67-1651; Acts 2003, No. 860, § 8.

15-4-1026. Acts 1985, No. 410, § 26; A.S.A. 1947, § 67-1652; Acts 1991, No. 333, § 1; 2003, No. 860, § 8; 2005, No. 1232, § 4; 2005, No. 1759, §§ 3, 4; 2007, No. 566, §§ 2, 3.

15-4-1027. Acts 1985, No. 410, § 27; A.S.A. 1947, § 67-1653; Acts 2003, No. 860, § 8.

15-4-1028. Acts 1985, No. 410, § 28; A.S.A. 1947, § 67-1654; Acts 2003, No. 860, § 8; 2005, No. 1994, § 300.

15-4-1029. Acts 1985, No. 410, § 17; A.S.A. 1947, § 67-1643; Acts 2003, No. 860, § 8; 2005, No. 1759, § 5.

15-4-1030. Acts 2003, No. 860, § 9.

15-4-1031. Acts 2003, No. 860, § 9.

Subchapter 11 — Steel Mill Tax Incentives

15-4-1101 — 15-4-1104. [Repealed.]

Publisher's Notes. This subchapter concerning steel mill tax incentives was repealed by Acts 2005, No. 1962, § 57. The subchapter was derived from the following sources:

15-4-1101. Acts 1987, No. 48, § 1.

15-4-1102. Acts 1987, No. 48, § 1; 1997, No. 540, § 80.

15-4-1103. Acts 1987, No. 48, § 3.

15-4-1104. Acts 1987, No. 48, § 5; 1987, No. 575, § 3; 1997, No. 540, § 81.

Subchapter 12 — County and Regional Industrial Development Company Act

Publisher's Notes. Former subchapter 12, the County Industrial Development Corporation Act, was repealed by Acts 1991, No. 1029, § 30. The former subchapter was derived from the following sources:

15-4-1201. Acts 1989, No. 660, § 1.

15-4-1202. Acts 1989, No. 660, § 2.

15-4-1203. Acts 1989, No. 660, § 27.

15-4-1204. Acts 1989, No. 660, § 3.

15-4-1205. Acts 1989, No. 660, § 4.

15-4-1206. Acts 1989, No. 660, § 5.

15-4-1207. Acts 1989, No. 660, § 14.

15-4-1208. Acts 1989, No. 660, § 6.

15-4-1209. Acts 1989, No. 660, § 7.

15-4-1210. Acts 1989, No. 660, § 8.

15-4-1211. Acts 1989, No. 660, § 9.

15-4-1212. Acts 1989, No. 660, § 10.

15-4-1213. Acts 1989, No. 660, § 11.

15-4-1214. Acts 1989, No. 660, § 12.

15-4-1215. Acts 1989, No. 660, § 13.

15-4-1216. Acts 1989, No. 660, § 16.

15-4-1217. Acts 1989, No. 660, § 17.

15-4-1218. Acts 1989, No. 660, § 18.

15-4-1219. Acts 1989, No. 660, § 19.

15-4-1220. Acts 1989, No. 660, § 20.

15-4-1221. Acts 1989, No. 660, § 21.

15-4-1222. Acts 1989, No. 660, § 22.

15-4-1223. Acts 1989, No. 660, § 23.

15-4-1224. Acts 1989, No. 660, § 24.

15-4-1225. Acts 1989, No. 660, § 25.

15-4-1226. Acts 1989, No. 660, § 26.

15-4-1227. Acts 1989, No. 660, § 15.

Effective Dates. Acts 1991, No. 1029, § 31: Apr. 8, 1991. Emergency clause provided: “It has been found and it is hereby declared by the General Assembly of the State of Arkansas that the State of Arkansas has had heretofore an inadequate program for financing the agricultural, industrial, technological, scientific and economic development of the State, that on account of such inadequate program, the State of Arkansas has been unable to provide for its inhabitants sufficient opportunities in agriculture and industry, that on account thereof the State of Arkansas is threatened with a decreasing standard of living for its inhabitants, that unless an adequate program for financing the agricultural, industrial, technological, scientific and economic development of the State be immediately undertaken, the State of Arkansas will suffer immediate and irreparable loss in population and the opportunity for agricultural and industrial expansion, and that only by the passage of this Act and giving immediate effect to its provisions, can the State of Arkansas prevent losses in population and securing to its inhabitants opportunities for agricultural, industrial, technological, scientific and economic development. An emergency therefore, is hereby declared to exist and this act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 904, § 6: became law without Governor's signature. Mar. 28, 1997. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that county and regional industrial development corporations are in need of additional regulatory protection; that, in order to protect Arkansas citizens that invest in these corporations, it is necessary that these corporations be required to operate in a safe and sound manner and in accordance with the laws of this state; and that it is necessary that this protection begin immediately. Therefore an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 1997, No. 906, § 5: Mar. 27, 1997. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that securities issued by county or regional industrial development corporations are not subject to the regulation of the Arkansas Securities Act; and that, in order to protect the safety of investment in such corporations by Arkansas citizens, these securities should be subject to the Arkansas Securities Act and it is necessary that this protection begin immediately. Therefore an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 1999, No. 37, § 31: Feb. 10, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that the various regional industrial development corporations established pursuant to Arkansas Code 15-4-1201 through 15-4-1228 have been most successful in accomplishing their purposes of promoting, stimulating, developing, and advancing the business prosperity and economic welfare of the county or region they serve; that such entities can even better serve their purposes as limited liability companies; that the state income tax credit provided in the present law for purchasers of common stock in such corporations expires and will not be allowed for any tax year ending after December 31, 1999; that this law permits such corporations to convert to limited liability companies, expands the tax credit to include premium taxes, permits tax credit arising under present law to be carried forward past 1999 and extends the expiration date for the tax credit allowance to December 31, 2006; and that these revisions of the County and Regional Industrial Development Corporation Act must be given effect immediately to assure that the entities established hereunder can continue to carry out their essential function of promoting and developing the economic prosperity of the counties and regions they represent. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

Cross References. Capital Access Program for Small Businesses, § 15-5-1101 et seq.

15-4-1201. Title.

This subchapter shall be referred to and may be cited as the “County and Regional Industrial Development Company Act”.

History. Acts 1991, No. 1029, § 1; 1999, No. 37, § 1.

15-4-1202. Definitions.

As used in this subchapter:

1. “Bank Commissioner” means the Bank Commissioner of the State of Arkansas;
2. “Board” means the State Banking Board;
3. “Company” means a county or regional industrial development corporation or limited liability company authorized to be organized under the provisions of this subchapter;
4. “Financial institution” means any banking corporation or institution, trust company, savings bank, savings and loan association, insurance company, or related corporation, partnership, foundation, or other institution engaged in lending or investing funds;
5. “Impaired” means, for the purposes of § 15-4-1228, that the capital of the company has been reduced to fifty thousand dollars ($50,000) or less;
6. “Loan limit” means, for any member, the maximum amount permitted to be outstanding at any one (1) time on loans made by the member to the company, as determined under § 15-4-1218;
7. “Member” means any financial institution authorized to do business in the State of Arkansas which may undertake to lend money to a company upon its call and in accordance with the provisions of § 15-4-1218;
8. “Person” includes all natural persons and legal entities;
9. “Region” means any compact area composed of no fewer than three (3) nor more than fifteen (15) contiguous counties within the State of Arkansas;
10. “Securities Commissioner” means the Securities Commissioner of the State of Arkansas; and
11. “Unit of interest” means a participation in the profits interests of a limited liability company so that the total of all the units of interest in a limited liability company shall equal one hundred percent (100%) of the profits interests in the limited liability company.

History. Acts 1991, No. 1029, § 2; 1999, No. 37, § 2.

15-4-1203. Liberal construction.

1. This subchapter shall be construed liberally.
2. The enumeration of any object, purpose, power, manner, method, or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods, or things.

History. Acts 1991, No. 1029, § 27.

15-4-1204. Application for preliminary approval.

Any five (5) or more qualified natural persons who shall be bona fide residents of the same county or region in this state to be served by the proposed company and who desire to associate themselves for the purpose of establishing and operating a company may subscribe, acknowledge, and file with the Bank Commissioner for preliminary approval proposed articles of incorporation in the case of a corporation and articles of organization and an operating agreement in the case of a limited liability company, in duplicate, as authorized by § 15-4-1211.

History. Acts 1991, No. 1029, § 3; 1999, No. 37, § 3.

15-4-1205. Preliminary approval.

1. If the Bank Commissioner is satisfied that the applicants are bona fide residents of the county or region to be served by the proposed company, that the applicants have the confidence of their respective communities, that, in the case of a regional company, the proposed region constitutes a reasonably compact area with similar economic development needs, that public convenience and necessity require a company, and that the proposed articles of incorporation or articles of organization and operating agreement conform to the provisions of § 15-4-1211, the commissioner shall issue his or her certificate approving the articles of incorporation or articles of organization and operating agreement and authorizing the applicants to proceed with the organization of the company.
2. 1. The commissioner shall not refuse a certificate to a regional company solely because one (1) or more county companies have been approved for the counties composing the region.
   2. Provided, however, only one (1) county industrial development company may be organized to serve in each individual county.

History. Acts 1991, No. 1029, § 4; 1999, No. 37, § 4.

15-4-1206. Organization.

Upon receipt of such certificate of preliminary approval, the applicants may proceed to complete the organization of the company, to obtain subscriptions for and payment of its stock or limited liability units of interest, and to do all other things necessarily incidental to its transacting business.

History. Acts 1991, No. 1029, § 5; 1999, No. 37, § 5.

15-4-1207. Liability of directors, officers, managers, and members.

The directors and officers of a corporation organized under the provisions of this subchapter and the managers and members of a limited liability company organized under the provisions of this subchapter shall not be responsible for losses of assets of the company unless the losses shall have been occasioned by the willful misconduct of such directors, officers, managers, or members.

History. Acts 1991, No. 1029, § 14; 1999, No. 37, § 6.

15-4-1208. Certificate of organization.

1. When the applicants have completed the organization of the proposed company, they shall file with the Bank Commissioner a certificate of organization executed by the chief executive officer of the company, attested by its chief financial officer, and with its seal affixed thereto, certifying:
   1. The names and addresses of all of its subscribers of stock or units of interest of a limited liability company, the number of shares subscribed or the amount of units of interest subscribed in the case of a limited liability company, and the number of shares fully paid for by each in the case of a corporation or the amount of units of interest fully paid for by each in the case of a limited liability company;
   2. The total number of shares of stock or units of interest of a limited liability company subscribed, but not fully paid for;
   3. The total number of shares of stock or units of interest paid in full;
   4. The name and address of the depository or the names and addresses of the depositories, if more than one (1), holding on deposit the funds of the company; and
   5. The names and addresses of the officers, directors, and members of the executive committee, if any, of a corporation and the names and addresses of the managers and members of the management committee of a limited liability company.
2. The certificate of organization of the applicant shall be accompanied by the certificate of the named depository or by the certificates of the named depositories, if more than one (1), certifying the amount of the funds on deposit to the credit of the company.
3. The certificate of organization shall also be accompanied by any bylaws or by any regulations which may have been adopted by the directors of a corporation or the operating agreement of a limited liability company.

History. Acts 1991, No. 1029, § 6; 1999, No. 37, § 7.

15-4-1209. Final investigation and approval by the board.

1. 1. Immediately upon the filing of the certificate of organization by the applicants, the Bank Commissioner shall submit to the State Banking Board the proposed articles of incorporation, articles of organization and operating agreement, as appropriate, and the certificate of organization of the applicants.
   2. As soon as practicable thereafter, if the board shall determine from the best sources of information at its command that:
      1. Public convenience and necessity continue to require the company;
      2. The holders of the fully paid common stock of a corporation or units of interest of a limited liability company are at least twenty (20) in number;
      3. Not less than one hundred thousand dollars ($100,000) of common stock or units of interest have been subscribed and fully paid for;
      4. No single stockholder nor related group of stockholders owns more than ten percent (10%) of the voting stock in the case of a corporation or no single member nor related group of members owns more than ten percent (10%) of the units of interest in the case of a limited liability company; and
      5. The bylaws submitted, if any, or the operating agreement is in conformity with the articles of incorporation or articles of organization and the provisions of this subchapter, is not contrary to the laws of the state, and is otherwise satisfactory,
2. 1. The commissioner shall also return to the applicants one (1) of the copies of the articles of incorporation or the articles of organization theretofore submitted to the commissioner by the applicants, upon which copy he or she shall have endorsed the fact of the issuance by him or her of the certificate of incorporation or certificate of organization.
   2. If the bylaws, regulations, or the operating agreement are submitted and are found to be satisfactory by the board, the commissioner shall also issue his or her certificate of approval.

the board shall direct the commissioner to issue to the applicants a certificate of incorporation or certificate of organization in such form as it may prescribe.

History. Acts 1991, No. 1029, § 7; 1999, No. 37, § 8.

15-4-1210. Commencement and continuation of existence.

1. Upon the issuance of the certificate of incorporation or certificate of organization by the Bank Commissioner, the existence of the company shall begin.
2. The certificate of incorporation or certificate of organization shall be conclusive evidence, except as against the state, that all conditions precedent required to be performed by the applicants have been complied with and that the company has been organized under this subchapter.
3. A copy of the articles of incorporation or articles of organization so endorsed by the commissioner, as prescribed in § 15-4-1209, shall be filed for recordation in the office of the county clerk in the county in which the principal office of the company is located, and a copy shall be delivered to the Secretary of the Department of Finance and Administration.
4. The company shall pay to the commissioner in semiannual billings four hundred dollars ($400) per year to establish and continue its existence and good standing under this subchapter.

History. Acts 1991, No. 1029, § 8; 1999, No. 37, § 9; 2019, No. 910, § 3395.

Amendments. The 2019 amendment substituted “Secretary” for “Director” in (c).

15-4-1211. Articles of incorporation or articles of organization.

1. The articles of incorporation for any corporation or the articles of organization of any limited liability company organized under the provisions of this subchapter shall state:
   1. The name of the company, which shall include the words “County Industrial Development Company” if the proposed company is to serve a single county, or “Regional Industrial Development Company” if the proposed company is to serve a region larger than a single county, and such designation as may be appropriate to distinguish it from any subsequent company which may be organized under the provisions of this subchapter, and the name shall be such as to distinguish it from any other corporation, limited liability company, limited partnership, limited liability partnership, and limited liability limited partnership organized and existing under the laws of the State of Arkansas as evidenced by the Secretary of State in writing;
   2. The purpose for which the company is formed;
   3. The period of duration of the company, which for a corporation may be perpetual or limited, but which for a limited liability company must be for a stated term;
   4. The address of the principal office of the company and the name and address of its agent upon whom process may be served;
   5. The total number of shares of common stock that the corporation is authorized to issue, which number shall be not less than one hundred (100) shares of common stock, each share having a par value of one hundred dollars ($100) in the case of a corporation or the total units of interest in the limited liability company that the limited liability company is authorized to issue, which number shall not be less than one hundred (100) units of interest, each unit of interest having a stated value of one hundred dollars ($100);
   6. The total number of shares of stock of any other class or distinction which a corporation is authorized to issue and its par value, if any, in the case of a corporation or the total number of units of other interests in a limited liability company that a limited liability company is authorized to issue and its stated value and preferences or limitations, if any;
   7. That no stockholder or member shall have preemptive rights with respect to any additional equity issued by the company or with respect to any debt issued by the company;
   8. That no stockholder shall be entitled to own more than ten percent (10%) of the total number of shares of voting stock issued at any time or that no member shall be entitled to own more than ten percent (10%) of the total units of interest of a limited liability company issued at any time;
   9. 1. In the case of a corporation, the number of directors, not fewer than six (6) nor more than fifteen (15), to be elected at the annual meeting of the holders of stock entitled to vote for the election of directors, in the case of a regional corporation, the requirement that at least one (1) director shall be a resident of each county composing the region and a prohibition of more than one-third (1/3) of the directors being residents of any single county, the terms of office of the directors, and any provisions desirable for staggering their terms of office.
      2. However, the terms of office of directors and other matters pertaining to the directors may be provided in the bylaws of the corporation;
   10. 1. In the case of a limited liability company, the number of members of the management committee, not fewer than six (6) nor more than fifteen (15), to be elected at the annual meeting of the members of the limited liability company entitled to vote for the election of the members of the management committee, in the case of a regional limited liability company, the requirement that at least one (1) member of the management committee shall be a resident of each county composing the region and a prohibition of more than one-third (1/3) of the members of the management committee being residents of any single county, the terms of office of the members of the management committee, and any provisions desirable for staggering their terms of office.
       2. However, the terms of office of members of the management committee and other matters pertaining to the members of the management committee may be provided in the operating agreement of the limited liability company;
   11. The names and addresses of the incorporators or organizers who shall constitute the board of directors or the management committee and manage the affairs of the company until the first meeting of the holders of the common stock or until the first meeting of the members of the limited liability company;
   12. 1. In the case of a limited liability company, that such an entity shall be a manager-managed limited liability company and shall be governed by a management committee elected by the holders of the units of interest of the limited liability company.
       2. The management committee shall appoint a chief operating officer, a chief financial officer, and such other officers as it deems appropriate;
   13. 1. In the case of a corporation, that the shares of the corporation shall be issued at such prices and with such rights and preferences as stated in the articles of incorporation, the bylaws, and as stated by the board of directors.
       2. In the case of a limited liability company, the ownership of the limited liability company shall be represented by units of interest that shall be issued at such prices and with such rights and preferences as stated in the articles of organization, the operating agreement, or as stated by the management committee of the limited liability company.
       3. 1. Stock and units of interest may be issued for consideration consisting of money paid, labor done, or property actually received, but neither promissory notes nor the promise of future services shall constitute valid consideration.
          2. In all cases, shares or units of interest shall be issued at not less than the par value of one hundred dollars ($100) per share or the stated value of one hundred dollars ($100) per unit of interest; and
   14. Any provisions not inconsistent with law which the incorporators or organizers may choose to insert for the regulation of the business and the conduct of the affairs of the company.
2. It shall not be necessary to set forth in the articles of incorporation or the articles of organization or the operating agreement any of the company powers enumerated in this subchapter.

History. Acts 1991, No. 1029, § 9; 1999, No. 37, § 10.

15-4-1212. Amendment to articles of incorporation or articles of organization.

1. A company organized under the provisions of this subchapter may amend its articles of incorporation or its articles of organization by a majority vote of the common stock in the case of a corporation or by a majority vote of the units of interest of a limited liability company represented in person or by proxy at any regular meeting or at any special meeting of the holders of the common stock or members of the limited liability company called for that purpose.
2. The power to amend shall include the power to accomplish any desired change in the provisions of the articles of incorporation or articles of organization and to include any purpose, power, or provision authorized to be included in the original articles of incorporation or articles of organization or by later amendment to this subchapter.
3. 1. Articles of amendment signed by the chief executive officer and attested by the secretary, an assistant secretary, or another manager certifying to such an amendment and its lawful adoption shall be executed, acknowledged, and filed with the Bank Commissioner and, when approved by the State Banking Board, recorded with the certificate of the commissioner approving the articles of amendment in the same manner as the original articles of incorporation or articles of organization.
   2. As soon as the commissioner shall issue his or her certificate of amendment, the amendment or amendments shall be in effect.

History. Acts 1991, No. 1029, § 10; 1999, No. 37, § 11.

15-4-1213. Management of company.

1. 1. Only the holders of common stock, through the board of directors, shall manage the affairs of a corporation.
   2. Only holders of units of interest in a limited liability company shall manage the affairs of a limited liability company.
   3. Each holder of common stock or each holder of a unit of interest in the limited liability company shall be entitled to one (1) vote, in person or by proxy, for each share of common stock or each unit of interest held by him or her and, in voting for the directors or management committee of the company, shall be entitled to exercise the right of cumulative voting.
2. 1. 1. In the event of the transfer of shares of common stock or units of interest, whether by act of the holder or by operation of law, the name or names of the proposed transferees shall be submitted to the directors of the corporation or to the management committee of the limited liability company and the directors or the management committee may refuse to approve the transfer, in which event the company shall have the option to purchase the shares of common stock or the units of interest at par or stated value.
      2. Shares of common stock or units of interest so purchased shall be cancelled, and shares or units in lieu thereof may be reissued and sold by the company.
   2. In the event that the directors or the management committee do not purchase the shares of common stock or the units of interest subject to transfer, the shares of common stock or the units of interest then may be transferred without the approval of the directors or the management committee.

History. Acts 1991, No. 1029, § 11; 1999, No. 37, § 12.

15-4-1214. Powers of the company.

1. The purposes of each company organized under the provisions of this subchapter shall be to:
   1. Promote, stimulate, develop, and advance the business prosperity and economic welfare of the county or region where it is located and its citizens;
   2. Encourage and assist through loans, investments, or other business transactions in the location of new business and industry in that county or region, and to assist the growth and expansion of existing business and industry;
   3. Stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of the county or region, provide maximum opportunities for employment, encourage thrift, and improve the standard of living of the citizens of that county or region;
   4. Cooperate and act in conjunction with other organizations, public or private, in the promotion and advancement of industrial, technological, scientific, commercial, agricultural, and recreational development in that county or region; and
   5. Provide venture financing for the promotion, development, and conduct of all kinds of business activity in that county or region on terms and conditions that would not otherwise be available from existing financial institutions.
2. In furtherance of such purposes, each company organized under this subchapter shall have the power to:
   1. Sue and be sued and to complain and defend in its corporate or limited liability company name;
   2. Have perpetual succession, in the case of corporations, unless a limited period of duration is stated in its articles of incorporation;
   3. Adopt a company seal, which may be altered at pleasure, and to use it or a facsimile thereof as permitted by law;
   4. Within the limitations imposed in this subchapter and in the manner prescribed in this subchapter, borrow money and otherwise contract indebtedness, to issue its bonds, notes, debentures, or other obligations with or without security, and, if with security, to secure the payment thereof by mortgage, pledge, or deed of trust on all or any part of its property, assets, revenues, or income;
   5. Purchase, receive, lease as lessee, or in any other manner acquire, own, hold, maintain, sell, exchange, and use any and all real and personal property or any interest therein;
   6. Sell and convey, mortgage, pledge, lease as lessor, and otherwise dispose of all or any part of its property or assets;
   7. Make loans to any qualifying person within its county or region and to establish and regulate the terms and conditions with respect to those loans and the charges for interest and service connected with those loans, consistent with the provisions of this subchapter;
   8. Purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of:
      1. Bonds, securities, or evidences of indebtedness created by any other corporation or corporations of this state or any other state or government or created by any individual, unincorporated association, limited liability company, limited partnership, general partnership, limited liability partnership, limited liability limited partnership, trust estate, improvement district, municipality, or governmental or municipal agency of any character;
      2. Shares of the capital stock of any other corporation or corporations of this or any other state or government, subject to such restrictions and limitations, if any, as may be imposed by the laws of this or any other state in which the corporation may do business, and, while owner of such stock, to exercise all the rights, powers, and privileges of ownership, including the right to vote that stock; and
      3. The units of interest of limited liability companies, partnerships, joint ventures, or other business entities of this or any other state or government, subject to such restrictions and limitations, if any, as may be imposed by the laws of this or any other state in which the business entity may do business, and, while owner of such units of interest, to exercise all the rights, powers, and privileges of ownership, including the right to vote those units of interest;
   9. Make any and all contracts necessary or convenient for the exercise of the powers granted in this subchapter;
   10. Elect or appoint officers, agents, and employees of the company and to define their duties and fix their compensation;
   11. Conduct its business and to have officers within or without the state;
   12. Accept gifts or grants of money, service, or property, real or personal;
   13. With the approval of the board of directors or the management committee by action of those persons, make and alter bylaws and regulations not inconsistent with the articles of incorporation or the articles of organization and operating agreement or with the laws of this state for the administration and regulation of the affairs of the company;
   14. Encourage and promote the cultural, industrial, technological, scientific, economic, and recreational development of the county or region where it is located;
   15. 1. Assist minority businesses in obtaining loans or other means of financial assistance.
       2. The terms and conditions of such loans or financial assistance, including the charges for interest and other services, will be consistent with the provisions of this subchapter.
       3. Efforts must be made to solicit for review and analysis proposed minority business ventures.
       4. Be it further provided that basic loan underwriting standards will not be changed to inconsistently favor or disfavor minority persons or businesses, or both, from the intent of the company's lending practices; and
   16. Do and perform any and all acts and things and to have and exercise any and all powers as may be necessary, convenient, or appropriate to effectuate the purpose for which the company is organized.

History. Acts 1991, No. 1029, § 12; 1999, No. 37, § 13.

15-4-1215. Dividends and distributions.

1. The directors of a corporation, subject to such limitations as may be set forth in the articles of incorporation or bylaws of the corporation, may declare dividends to the holders of its stock and make partial distribution of its capital surplus pursuant to the provisions of the Arkansas Business Corporation Act of 1987, § 4-27-101 et seq.
2. The management committee of a limited liability company, subject to such limitations as may be set forth in the articles of organization or the operating agreement, may declare distributions to the holders of the units of interest in the limited liability company consistent with the provisions of the Small Business Entity Tax Pass Through Act, § 4-32-101 et seq.

History. Acts 1991, No. 1029, § 13; 1999, No. 37, § 14.

Cross References. The Arkansas Business Corporation Act, § 4-26-101 et seq.

15-4-1216. Bonds and notes of the company.

1. 1. From time to time as the conduct of its business requires, any company organized under the provisions of this subchapter may issue and sell at such price and on such terms as the board of directors or the management committee shall determine its bonds and notes not to exceed in a total aggregate amount outstanding at any one (1) time ten (10) times the total amount of its fully paid common stock or units of interest, its fully paid issued and outstanding preferred stock, if any, and the amount of its earned surplus in excess of a reserve set aside therefrom equal in amount to five percent (5%) of the aggregate total amount of loans of the company outstanding at any one (1) time.
   2. However, the validity of the bonds and notes of the company valued at the time of issuance and delivery shall not thereafter be affected if in excess of such ratio.
2. 1. The bonds and notes of the company shall:
      1. Be in such form and denominations;
      2. Have such dates and maturities;
      3. Bear interest payable at such times and places within or without the state; and
      4. Contain such provisions as to registration of ownership if registration is deemed desirable,
   2. 1. The bonds and notes of the company shall be executed by the chief executive officer and chief financial officer of the company and be sealed with the company seal.
      2. In the event any of the officers whose signatures appear on any obligation shall cease to be officers before the delivery of those obligations, those signatures, nevertheless, shall be valid and sufficient for all purposes, the same as if they had remained in office until the delivery.
3. All bonds and notes of a company issued under the provisions of this subchapter, unless otherwise limited by the express provisions thereof and irrespective of the date of issue, shall be on a parity as to security and shall be secured by a lien on the entire assets of the company. The lien shall be a first lien and superior to all other debts and to all other encumbrances of whatsoever nature on all of the assets of the company.
4. In the discretion of the directors of the corporation, the earned surplus of a corporation, in whole or in part, may be invested as provided in the bylaws of the corporation and retained in reserve to meet losses and contingencies of the corporation.
5. The undistributed earnings of a limited liability company, in whole or in part, in the discretion of the management committee of a limited liability company, may be invested as provided in the operating agreement of the limited liability company and retained in reserves to meet losses and contingencies of the limited liability company.

all as the directors of a corporation or the management committee of a limited liability company shall determine in conformity with the provisions of this subchapter.

History. Acts 1991, No. 1029, § 16; 1999, No. 37, § 15.

15-4-1217. Authority of other corporations and financial institutions.

Notwithstanding any rule at common law or any provision of law or any provision in their respective articles of incorporation:

1. All domestic corporations, including nonprofit corporations and associations, organized for the purpose of carrying on business within this state, including, without implied limitation, any public utility, and all trusts, are authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, notes, securities, or other evidences of indebtedness created pursuant to this subchapter or the shares of the common stock or the units of interest of a company organized under this subchapter and, while owners of the stock or units of interest, to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of the state;
2. All financial institutions are authorized to become members of the company and to make loans to the company as provided in this subchapter;
3. A financial institution which does not become a member of the company shall not be permitted to acquire any shares of the common stock or units of interest of the company; and
4. 1. 1. Each financial institution which becomes a member of the company is authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, notes, securities, or other evidences of indebtedness created pursuant to this subchapter or the shares of the common stock or the units of interest of the company and, while owners of the stock or units of interest, to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of the state.
      2. However, the amount of the common stock of a corporation or the units of interest of a limited liability company which may be acquired by any member pursuant to the authority granted in this section shall not exceed ten percent (10%) of the loan limit of each member.
   2. The common stock or the units of interest of a company organized under this subchapter which any member is authorized to acquire pursuant to the authority granted in this section is in addition to the amount of common stock in corporations or units of interest in other business entities which the member may otherwise be authorized to acquire.

History. Acts 1991, No. 1029, § 17; 1999, No. 37, § 16.

15-4-1218. Member financial institutions — Loan limits.

1. Any financial institution may request membership in the company by making application to the board of directors or the management committee on such form and in such manner as the board of directors or the management committee may require, and membership shall become effective upon the acceptance of the application by the board of directors or the management committee.
2. Each member of the company may make loans to the company as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors or the management committee, subject to the following conditions:
   1. All loan limits shall be established at the thousand-dollar amount nearest to the amount computed in accordance with the provisions of this section;
   2. No loan to a company organized under this subchapter shall be made by members pursuant to a call made by the company if immediately thereafter the total amount of the loans will exceed ten (10) times the amount then paid in on the outstanding stock or the units of interest of the company plus ten (10) times the earned surplus of a corporation less reserves or ten (10) times the undistributed earnings of a limited liability company less reserves;
   3. The total amount outstanding on loans to a company made by any member at any one (1) time, when added to the amount of the investment in the capital stock or the units of interest of the company then held by that member, shall not exceed the limitation on loans established by law, rule, or regulation applicable to the member or, in the absence of any limitation, the amount approved by the board of directors or the management committee for that member;
   4. 1. Each call made by the company may be prorated among members of a company in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members.
      2. The adjusted loan limit of a member shall be the amount of the member's loan limit, reduced by the balance of outstanding loans made by the member to the company and the investment in capital stock of a corporation or units of interest in a limited liability company held by the member at the time of the call, and further reduced, in the case of a member who has assumed the obligation of a financial institution withdrawn from membership pursuant to § 15-4-1219(a)(2), by the balance of outstanding loans made to the company by the financial institution; and
   5. All loans to a company by members shall be evidenced by bonds, debentures, notes, or other evidence of indebtedness of the company which shall be freely transferable at all times and which shall bear interest at a rate which may be adjusted from time to time in a manner determined by the board of directors or the management committee. The rate shall not be less than one-quarter of one percent (0.25%) in excess of the prime or base rate of interest prevailing at the time of the adjustment for commercial banks in the City of Little Rock on unsecured commercial loans.

History. Acts 1991, No. 1029, § 18; 1999, No. 37, § 17; 2019, No. 315, § 1059.

Amendments. The 2019 amendment inserted “rule” in (b)(3).

15-4-1219. Withdrawal of members.

1. 1. Membership in a company shall be for an indeterminate period not to exceed the termination date of the company stated in its articles of incorporation or articles of organization.
   2. Provided, however, that:
      1. Upon written notice given to a company five (5) years in advance, a member may withdraw from membership in the company at the expiration date of the notice; or
      2. 1. In the event that a member, herein called a “constituent member”, shall consolidate with, merge into, or sell all or substantially all of its property and assets to another financial institution, herein called the “continuing institution”, the board of directors or the management committee may permit, in such manner as it determines, the withdrawal of the constituent member from membership in the company if the continuing institution at the time of the withdrawal is a member and has assumed any obligation of the constituent member to make loans to the company.
         2. If the continuing institution is not a member prior to the consolidation, merger, or sale, the assumed obligation shall be discharged at the time the continuing institution becomes a member.
2. A member shall not be obligated to make any loans to the company pursuant to calls made either before or after the withdrawal of the member.

History. Acts 1991, No. 1029, § 19; 1999, No. 37, § 18.

15-4-1220. Exemption for securities.

1. 1. The stock, units of interest, notes, debentures, bonds, and all other securities or obligations issued by any company organized and existing under the provisions of this subchapter shall be exempt from the provisions of the Arkansas Securities Act, § 23-42-101 et seq.
   2. However, any company organized and existing under the provisions of this subchapter shall not be exempt from the following:
      1. The antifraud provisions of the Arkansas Securities Act, § 23-42-101 et seq., under § 23-42-507;
      2. The criminal provisions for violation of the provisions found in § 23-42-104(a); and
      3. The civil remedies available for violation of the provisions found in § 23-42-106.
2. 1. Notwithstanding the provisions of subsection (a) of this section, no company may offer its stock, units of interest, notes, debentures, bonds, or other securities or obligations without filing a notice with the Securities Commissioner before the first offer of the securities to be sold.
   2. 1. The filing shall state the terms of the offer and how the company intends to comply with the antifraud provisions of the Arkansas Securities Act, § 23-42-101 et seq., and shall be accompanied by copies of any sales materials the company will use in the offer of the securities.
      2. The filing shall be effective upon deposit with the commissioner.
      3. This filing requirement shall be applicable to the initial capitalization of the company and any subsequent offer of stock, units of interest, notes, debentures, bonds, or other securities or obligations or series thereof.
3. Failure of a company to make the filing required by subsection (b) of this section shall be a basis for imposition of all remedies available to the commissioner for the offer and sale of unregistered and nonexempt securities under the Arkansas Securities Act, § 23-42-101 et seq.

History. Acts 1991, No. 1029, § 20; 1997, No. 906, § 1; 1999, No. 37, § 19.

15-4-1221. Obligations as negotiable instruments.

All bonds, notes, debentures, and other obligations of a company authorized under and issued in compliance with the provisions of this subchapter shall be, shall have, and are declared to have all the qualities and incidents of negotiable instruments under the negotiable instruments laws of the state.

History. Acts 1991, No. 1029, § 21; 1999, No. 37, § 20.

Cross References. Negotiable instruments, § 4-3-101 et seq.

15-4-1222. Eligibility for certain investments.

Any city or town in this state or any board, commission, or other authority duly established by ordinance of any such city or town or the boards of trustees, respectively, of the firemen's relief and pension fund and the policemen's pension and relief fund of any such city or town may invest any of its funds not immediately needed for its purposes in the bonds and notes of any company organized under the provisions of this subchapter.

History. Acts 1991, No. 1029, § 22; 1999, No. 37, § 21.

15-4-1223. Exemption from certain taxes.

1. 1. County or regional industrial development companies shall be exempt from taxation under the Income Tax Act of 1929, § 26-51-101 et seq., and from the payment of any other income taxes levied by a county or a municipality.
   2. Dividends on stock or distributions with respect to units of interest of any such company pursuant to § 15-4-1215 shall be exempt from all state, county, or municipal income tax.
   3. Interest on bonds, notes, or other obligations of any company issued under and in accordance with the provisions of this subchapter shall be exempt from all state, county, or municipal income taxes.
2. Corporations and limited liability companies shall file income tax returns each year at the time provided for the filing of corporate or partnership income tax returns, respectively.
3. A company claiming exemption from income tax under this section shall attach to the return required in subsection (b) of this section a certification from the Bank Commissioner stating that the company has been incorporated or organized and is operating as a corporation or limited liability company in accordance with the provisions of this subchapter.

History. Acts 1991, No. 1029, § 23; 1999, No. 37, § 22.

15-4-1224. [Repealed.]

Publisher's Notes. This section, concerning tax credit, was repealed by Acts 2017, No. 374, § 5. The section was derived from Acts 1991, No. 1029, § 24; 1995, No. 363, § 1; 1995, No. 1044, § 1; 1999, No. 37, § 23.

15-4-1225. Loan policy.

1. A company organized under the provisions of this subchapter shall not lend money when credit is readily available with comparable terms elsewhere. Before granting a loan, the directors of a corporation or the management committee of a limited liability company shall endeavor so far as is reasonably possible to ascertain that reasonable opportunity to grant the loan has been given to the financial institutions of the state.
2. No company organized under the provisions of this subchapter shall receive money on deposit.
3. The company shall not deposit any of its funds in any banking institution unless the institution has been designated as a depository by a vote of a majority of the directors or a majority of the management committee present at an authorized meeting of the directors or the management committee, exclusive of any director or any member of the management committee who is an officer or director of the depository so designated.

History. Acts 1991, No. 1029, § 25; 1999, No. 37, § 24.

15-4-1226. Supervision of companies.

1. 1. Each company organized under the provisions of this subchapter shall be subject to the general supervision and control of the Bank Commissioner.
   2. In addition to the other duties imposed upon them by law, the powers of the Bank Commissioner are to:
      1. Make reasonable rules which may be necessary to regulate the safety and soundness of the companies for making this subchapter effective;
      2. Conduct investigations which may be necessary to determine whether any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of this subchapter or of the laws of this state;
      3. Conduct any examinations, investigations, and hearings which may be necessary and proper for the efficient administration of the county and regional industrial development company laws of this state and to charge the company for the expense of such examination, investigation, or hearing at the rate of two hundred twenty-five dollars ($225) per examiner per day or partial day; and
      4. 1. Within the Bank Commissioner's discretion, classify as confidential certain records and information obtained by the State Bank Department when such matters are obtained from an investigation or examination by the department's staff.
         2. However, applications shall be public documents.
2. With respect to § 15-4-1220, each company organized under the provisions of this subchapter shall be subject to the specific regulation and control of the Securities Commissioner, who shall have the authority to:
   1. Make reasonable rules which may be necessary for making § 15-4-1220 effective;
   2. Conduct investigations and hearings which may be necessary to determine whether any person has engaged in or is about to engage in any act or practice constituting a violation of § 15-4-1220 and to charge the company for the expense of such an investigation or hearing at the rate of two hundred twenty-five dollars ($225) per investigator per day or partial day;
   3. Conduct any examinations, investigations, and hearings which may be necessary and proper for the efficient administration and application of § 15-4-1220 to county and regional industrial development companies; and
   4. Within the Securities Commissioner's discretion, classify as confidential certain records and information obtained by the Securities Commissioner when such matters are obtained from an investigation or examination by the department's staff.

History. Acts 1991, No. 1029, § 26; 1997, No. 904, § 1; 1999, No. 37, § 25; 2019, No. 315, §§ 1060, 1061.

Amendments. The 2019 amendment deleted “and regulations” following “rules” in (a)(2)(A) and (b)(1).

15-4-1227. Dissolution of company.

1. Any company organized under this subchapter, after the payment in full and cancellation of all its notes, bonds, and other obligations issued under the provisions of this subchapter or after the deposit in trust with the respective trustees designated in any deeds of trust given to secure the payment of any such obligations of a sum of money sufficient for the purpose, may dissolve by a vote of a majority of the common stock of a corporation or by a vote of a majority of the units of interest of a limited liability company, represented in person or by proxy, at any regular meeting or at any special meeting of the holders of the common stock of a corporation or the holders of the units of interest of a limited liability company called for that purpose.
2. A certificate of dissolution shall be signed by the chief executive officer and attested by the chief financial officer certifying to the dissolution and stating that they have been authorized to execute and file the certificate by a vote cast in person or by proxy by holders of a majority of the common stock of a corporation or by holders of a majority of the units of interest of a limited liability company.
3. The certificate of dissolution shall be executed, acknowledged, and filed and recorded in the same manner as the original articles of incorporation or articles of organization, and as soon as the Bank Commissioner shall have accepted and endorsed on the certificate of dissolution his or her approval thereof, the company shall be deemed to be dissolved.
4. 1. However, the company shall be continued for the purposes of:
      1. Paying, satisfying, and discharging any other existing liabilities or obligations;
      2. Collecting or liquidating its assets; and
      3. Doing all other acts required to adjust and conclude its business and affairs.
   2. The company may sue and be sued in its corporate or limited liability company name.
5. Any assets remaining after all liabilities or other obligations of the company have been satisfied or discharged shall be distributed pro rata first among the then-holders, if any, of any stock of a corporation or the then-holders, if any, of any units of interest of a limited liability company entitled to a preference, and the remaining assets of the company shall then be distributed pro rata among the then-holders of the common stock of a corporation or among the then-holders of the units of interest of a limited liability company not entitled to any such preferences.
6. A copy of the certificate of dissolution as accepted and endorsed by the commissioner, as prescribed in subsection (c) of this section, shall be filed for recordation in the office of the county clerk in the county in which the principal office of the company is located, and a copy shall be delivered to the Secretary of the Department of Finance and Administration.

History. Acts 1991, No. 1029, § 15; 1999, No. 37, § 26; 2019, No. 910, § 3396.

Amendments. The 2019 amendment substituted “Secretary” for “Director” in (f).

15-4-1228. Investigations by Bank Commissioner or Securities Commissioner — Injunctions.

1. The Bank Commissioner may investigate, either upon complaint or otherwise, when it appears that a county or regional industrial development company is conducting its business in an unsafe and injurious manner or in violation of this subchapter or the rules promulgated under this subchapter by the Bank Commissioner or when it appears that any person is engaging in the business without being approved under the provisions of this subchapter.
2. The Securities Commissioner may investigate, either upon complaint or otherwise, when it appears that a county or regional industrial development company is offering its securities in violation of § 15-4-1220 or is otherwise violating the provisions of Arkansas law that come under the jurisdiction of the Securities Commissioner.
3. 1. Subject to the jurisdictional provisions of subsections (a) and (b) of this section, whenever it appears upon sufficient grounds or evidence satisfactory to the Bank Commissioner or the Securities Commissioner that any county or regional industrial development company has engaged in or is about to engage in any act or practice in violation of this subchapter or any rule or order under this subchapter, or the assets or capital of any county or regional industrial development company is impaired or the county or regional industrial development company's affairs are in an unsafe condition, the Bank Commissioner or the Securities Commissioner may:
      1. Refer the evidence which is available concerning violations of this subchapter or any rule or order under this subchapter to the appropriate agency, which may institute the appropriate corrective action or proceedings with or without the reference; or
      2. 1. Summarily order the county or regional industrial development company to cease and desist from the act or practice during the time the Bank Commissioner or the Securities Commissioner may apply to the Pulaski County Circuit Court to enjoin the act or practice and to enforce compliance with this subchapter or any rule or order under this subchapter.
         2. However, the Bank Commissioner or the Securities Commissioner may apply directly to the Pulaski County Circuit Court for injunctive relief without issuing a cease and desist order.
   2. Upon a proper showing, a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the county or regional industrial development company or its assets.
   3. The court may not require the Bank Commissioner or the Securities Commissioner to post a bond.
   4. In addition to any other remedy provided in this subchapter or under applicable law, the costs of the Bank Commissioner or the Securities Commissioner incurred in successfully prosecuting violations of this subchapter may be imposed by the court as additional damages payable by the company.
4. A copy of all reports of the investigation or other proceedings conducted pursuant to this section shall be forwarded to the Secretary of the Department of Finance and Administration.

History. Acts 1997, No. 904, § 2; 1999, No. 37, § 27; 2019, No. 315, §§ 1062, 1063; 2019, No. 910, § 3397.

Amendments. The 2019 amendment by No. 315 substituted “rules” for “regulations” in (a); deleted “or regulation” following “rule” in the introductory language of (c)(1); and deleted “regulation” following “rule” in (c)(1)(A) and (c)(1)(B)(i).

The 2019 amendment by No. 910 substituted “Secretary” for “Director” in (d).

Subchapter 13 — Arkansas Linked Deposit Program Act

15-4-1301 — 15-4-1312. [Repealed.]

Publisher's Notes. This subchapter concerning the Arkansas Linked Deposit Program Act was repealed by Acts 1993, No. 318, § 1. The subchapter was derived from the following sources:

15-4-1301. Acts 1991, No. 671, § 1; 1991, No. 682, § 1.

15-4-1302. Acts 1991, No. 671, § 2; 1991, No. 682, § 2.

15-4-1303. Acts 1991, No. 671, § 3; 1991, No. 682, § 3.

15-4-1304. Acts 1991, No. 671, § 12; 1991, No. 682, § 12.

15-4-1305. Acts 1991, No. 671, § 10; 1991, No. 682, § 10.

15-4-1306. Acts 1991, No. 671, § 5; 1991, No. 682, § 3.

15-4-1307. Acts 1991, No. 671, § 4; 1991, No. 682, § 4.

15-4-1308. Acts 1991, No. 671, § 5; 1991, No. 682, § 5.

15-4-1309. Acts 1991, No. 671, § 6; 1991, No. 682, § 6.

15-4-1310. Acts 1991, No. 671, § 8; 1991, No. 682, § 8.

15-4-1311. Acts 1991, No. 671, § 9; 1991, No. 682, § 9.

15-4-1312. Acts 1991, No. 671, § 7; 1991, No. 682, § 7.

Subchapter 14 — Inventors' Assistance Act

Effective Dates. Acts 1991, No. 707, § 11: Mar. 22, 1991. Emergency clause provided: “It is hereby found and determined by the General Assembly that establishment of businesses by inventors results in numerous benefits to the state; that these benefits include industrial diversification, broadening of the economic base, the creation of jobs, and benefits to the residents of the state through new products and processes; that it is estimated that ninety-five percent (95%) of all inventions are never authoritatively considered primarily because inventors are unfamiliar with the business environment or financial structure necessary for implementing their proposals; that this act would provide assistance to inventors and at the same time create benefits to the state and its residents; and that the need for assistance constitutes such an emergency that the immediate passage of this act is necessary in order to provide for assistance to inventors. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall take effect and be in full force from and after its passage and approval.”

Acts 1997, No. 324, § 9: Mar. 3, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly that Act 10 of the First Extraordinary Session of 1995 abolished the Joint Interim Committee on State Agencies and Governmental Affairs and in its place established the House Interim Committee and Senate Interim Committee on State Agencies and Governmental Affairs; that various sections of the Arkansas Code refer to the Joint Interim Committee on State Agencies and Governmental Affairs and should be corrected to refer to the House and Senate Interim Committees on State Agencies and Governmental Affairs; that this act so provides; and that this act should go into effect immediately in order to make the laws compatible as soon as possible. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

15-4-1401. Title.

This subchapter shall be known and may be cited as the “Inventors' Assistance Act”.

History. Acts 1991, No. 707, § 1.

15-4-1402. Definitions.

As used in this subchapter:

1. “Center” means the Center for Prototype Development and Emerging Technologies to be developed and operated by the University of Arkansas at Little Rock;
2. “Commercial state” means the point at which a product has been developed beyond the theoretical and prototype stage and is capable of being manufactured or practiced commercially;
3. “Gross sales revenues” means all revenues or anything of value received by any person from the sale of a proprietary product;
4. “Intellectual property” means patents, copyrights, or trademarks acquired pursuant to federal or state law or applications for patent or for copyright or trademark registration;
5. “Inventor” means any person who conceives a new concept which may result in a proprietary product;
6. “Person” means any individual, sole proprietor, partnership, or corporation;
7. “Product” means any device, technique, process, item of manufacture, composition of matter, or work of authorship;
8. “Product development plan” means a plan prepared by the center for developing a product to the commercial state;
9. “Proposal” means a plan provided by the inventor which includes technical and descriptive information on a product;
10. “Proprietary product” means a product patented, copyrighted, or trademarked pursuant to federal or state law or for which an application for patent or for copyright or trademark registration is pending; and
11. “Royalties” means all things of value received by an inventor in connection with the licensing of a proprietary product or the assignment, sale, or licensing of intellectual property.

History. Acts 1991, No. 707, § 2.

15-4-1403. Prototype development center — Objectives of program.

1. The Board of Trustees of the University of Arkansas, in consultation with the Arkansas Inventors Congress, Inc., is authorized to establish a Center for Prototype Development and Emerging Technologies at the University of Arkansas at Little Rock to provide assistance to inventors.
2. The inventors' assistance program shall be designed to:
   1. Attract inventors from throughout this state, the nation, and other countries and encourage them to submit their proposals for review and evaluation;
   2. 1. Provide assistance to inventors whose proposals are accepted after evaluation and review.
      2. Assistance may include limited patent searches, market analysis, product research and development, assistance in obtaining financing, business counseling, and any other assistance not prohibited by the Arkansas Constitution or laws of this state which is necessary to develop the product to the commercial state.
      3. To protect both the state and the inventor, a disclosure document shall be on file with the United States Patent and Trademark Office before the center will review a proposal;
   3. Provide assistance to enable the manufacturing, marketing, and distribution of the product; and
   4. Protect the confidentiality of each inventor's proposals to the extent permitted by law.

History. Acts 1991, No. 707, § 3.

15-4-1404. Authority of board.

1. The Board of Trustees of the University of Arkansas, on behalf of the Center for Prototype Development and Emerging Technologies, may:
   1. Enter into contracts on a competitive-bid basis or noncompetitive-bid basis, consistent with state laws and rules, with public and private agencies, institutions, organizations, and individuals for the purpose of providing assistance to and services for inventors as required by this subchapter;
   2. Solicit the support and contribution of public and private agencies, organizations, institutions, and individuals;
   3. Receive and administer funds for the purpose of operating the inventors' assistance program;
   4. Advertise and promote the inventors' assistance program;
   5. Adopt policies and procedures to implement the provisions of this subchapter; and
   6. Acquire security interests in intellectual property to the extent necessary to protect the state's interest in the fees charged pursuant to § 15-4-1406.
2. The board, on behalf of the center, is authorized to enter into a written contract with each center employee which shall include provisions designed to protect the confidentiality of inventors' proposals and to prohibit the employee from using information gained at the center to compete with or disadvantage any inventor.

History. Acts 1991, No. 707, §§ 4, 5; 2019, No. 315, § 1064.

Amendments. The 2019 amendment substituted “rules” for “regulations” in (a)(1).

15-4-1405. Annual report.

1. The Center for Prototype Development and Emerging Technologies shall submit an annual report based on the fiscal year on or before December 31 of each year to the Governor and shall file an electronic copy of the report with the Legislative Council to be reviewed by the House Committee on State Agencies and Governmental Affairs and the Senate Committee on State Agencies and Governmental Affairs.
2. The report shall include, but not be limited to:
   1. The number of proposals submitted for review and evaluation;
   2. The number of proposals accepted for development and the number rejected;
   3. The number of products patented;
   4. The number of products developed to the commercial state;
   5. The number of jobs created and preserved as a result of the manufacturing, marketing, packaging, warehousing, and distribution of products; and
   6. An estimate of the multiplier effect on the Arkansas economy as a result of jobs so created and preserved.

History. Acts 1991, No. 707, § 7; 1997, No. 324, § 2; 2013, No. 501, § 1.

Amendments. The 2013 amendment substituted “file an electronic copy of the report with” for “mail the report to” in (a).

15-4-1406. Fees — Review of proposals.

1. The Center for Prototype Development and Emerging Technologies shall charge a filing fee of up to five hundred dollars ($500) for each proposal submitted for review and evaluation, depending upon the cost to research the proposal as determined by the center.
2. After review and evaluation, proposals shall be accepted or rejected for product development under the inventors' assistance program.

History. Acts 1991, No. 707, § 5.

15-4-1407. Product development — Contracts.

1. 1. If a proposal is accepted for product development, the Center for Prototype Development and Emerging Technologies at the University of Arkansas at Little Rock shall prepare a product development plan which will include a technical plan for developing the product, time schedule, and estimated cost.
   2. The center will have an established policy for making decisions to develop products utilizing appropriate resources and bringing the products to a commercial state.
   3. The services of the center may include patent searches, applications for patent, copyright registration, market analysis, product research and development, assistance in obtaining financing, including financing from private resources, and business counseling.
2. 1. If the inventor wants the center to develop the product according to the product development plan but is unable to finance all or part of the development, then the center may develop the product using in part its own or other resources, provided such resources are available.
   2. The inventor shall be liable to pay a fee according to the policy set forth in subdivision (c)(3) of this section.
   3. The inventor may finance the product development plan in full and, in such cases, there will not be any additional fee involved.
3. Before services to aid in the development of the product shall commence, the Board of Trustees of the University of Arkansas, on behalf of the center, shall enter into a written contract with the inventor which shall include, in addition to any other provisions consistent with this subchapter:
   1. The services which the center will provide to aid in the development of the product;
   2. Any other services which the center will assist the inventor in obtaining and for which the inventor shall be liable pursuant to written consent;
   3. 1. Authorization for the center to receive a fee not to exceed an amount equal to:
         1. Ten percent (10%) of all royalties from the product for a period not to exceed ten (10) years from the first day after royalties are first received by the inventor;
         2. One percent (1%) of the gross sales revenue for a period not to exceed ten (10) years from the first day after the product reaches the commercial state;
         3. An equitable percentage of any consideration received from the sale, licensing, or transfer of any interest in intellectual property or proprietary products; or
         4. Any combination of amounts under subdivisions (c)(3)(A)(i)-(iii) of this section.
      2. The fees shall be based on a consideration of the following factors:
         1. The inventor's contribution to the financing of the product according to the product development plan;
         2. The center's contribution to the financing of the product according to the product development plan; and
         3. The potential for commercial success of the product;
   4. 1. A written agreement from the inventor that all products developed under the inventors' assistance program shall be researched, developed, manufactured, and packaged within this state and distributed from this state, to the extent that it is economically feasible.
      2. Provided, wherever the products are manufactured, the fee set forth in subdivision (c)(3) of this section shall accrue to this state pursuant to the provisions of this subchapter;
   5. Provision for acquisition by the center of any security interest in intellectual property as required to protect the state's interest in the fee set forth in subdivision (c)(3) of this section;
   6. Agreement by the inventor that any assignment, sale, or licensing of a product or intellectual property developed under the program shall be subject to the center's security interest and that any contract with a third party for the assignment, sale, or licensing of a product or intellectual property developed under the program shall explicitly condition such assignment, sale, or license on the prior rights of the center; and
   7. Provision for such fiscal reporting by the inventor, the inventor's assignee, or licensee as may be necessary to assure the performance of all provisions of the written contract.

History. Acts 1991, No. 707, § 5; 2017, No. 374, § 6.

Amendments. The 2017 amendment added (c)(3)(A)(iv).

15-4-1408. Inventors' Assistance Program Fund.

There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Inventors' Assistance Program Fund”. This fund shall consist of all moneys received by the Center for Prototype Development and Emerging Technologies for implementation of this subchapter and all fees received pursuant to this subchapter. Moneys received into the fund are authorized to be applied to implement this subchapter. Any amount in the fund not directly needed to implement this subchapter shall go to the general revenue fund of the state.

History. Acts 1991, No. 707, § 6.

Subchapter 15 — Arkansas Aviation and Aerospace Commission

15-4-1501 — 15-4-1508. [Repealed.]

Publisher's Notes. This subchapter concerning the Arkansas Aviation and Aerospace Commission was repealed by Acts 2005, No. 2086, § 34. The subchapter was derived from the following sources:

15-4-1501. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1.

15-4-1502. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1; 1997, No. 250, § 97; 1997, No. 540, § 82; 2001, No. 1288, § 7.

15-4-1503. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1; 1997, No. 540, § 83.

15-4-1504. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1.

15-4-1505. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1.

15-4-1506. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1; 1995, No. 857, § 1; 1995, No. 1250, § 1.

15-4-1507. Acts 1992 (1st Ex. Sess.), No. 59, § 1; 1992 (1st Ex. Sess.), No. 60, § 1; 1995, No. 434, § 1; 1995, No. 857, § 2; 1995, No. 1250, § 2; 1997, No. 540, § 84.

15-4-1508. Acts 1995, No. 1250, § 3.

Subchapter 16 — Arkansas Economic Development Incentive Act of 1993

Effective Dates. Acts 1993, Nos. 788 and 851, § 14: Mar. 30, 1993, and Apr. 2, 1993, respectively. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that unemployment and economic underdevelopment has reached intolerable levels in certain portions of this state and the state as a whole has been unable to compete with other state's incentive programs for economic development; and, that the incentives afforded by this act are critical to the development and expansion of job opportunities in the state. Therefore, an emergency is declared to exist and this act, being necessary for the preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval. ”

Acts 1995, No. 590, § 7: Mar. 13, 1995. Emergency clause provided: “It is hereby found and determined by the General Assembly of this state that unemployment and economic underdevelopment has reached intolerable levels in certain portions of this state and the state as a whole has been unable to compete with other state's incentive programs for the economic development; and, that the incentives afforded by this act are critical to the development and expansion of job opportunities in the state. Therefore, an emergency is declared to exist and this act, being necessary for the preservation of the public peace, health, and safety shall be in full force and effect immediately upon its passage and approval.”

Acts 1995, No. 820, § 5: Mar. 28, 1995. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that economic underdevelopment has reached intolerable levels in this state and the state as a whole has been unable to compete with other state's incentive programs for economic development; and, that the incentives afforded by this act are critical to the development and expansion of job opportunities in the state. Therefore, an emergency is declared to exist and this act, being necessary for the preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 807, § 28: Mar. 25, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that unemployment and economic underdevelopment has reached intolerable levels in certain portions of this State, and that the establishment of tax incentives afforded by this Act are critical to the development and expansion of job opportunities in those areas. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 1999, No. 584, § 11: Mar. 15, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that existing Arkansas businesses must remain competitive in today's global economy; that the tax incentive provided by this Act is necessary to provide businesses with the incentive to invest in Arkansas and hire Arkansans; that other states compete with Arkansas for the location or expansion of business activity and this incentive is also necessary to offer the companies a business environment compatible with other states; and that without this incentive companies considering locations or expansions of their businesses may choose to locate in another state, depriving Arkansas of these jobs and the economic benefit that the jobs bring to the state. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-1601. Title.

This subchapter may be referred to and cited as the “Arkansas Economic Development Incentive Act of 1993”.

History. Acts 1993, No. 788, § 1; 1993, No. 851, § 1.

15-4-1602. Definitions.

As used in this subchapter:

1. “Annual payroll” means the wages of the net new full-time permanent employees based on the payroll for the previous twelve (12) months reported to the Division of Workforce Services and is computed by using the total of the net new full-time permanent employees' reported taxable earnings, including overtime pay;
2. “Commission” means the Arkansas Economic Development Commission;
3. “Corporate or regional headquarters” means the home or center of operations, including research and development, of a national or multinational corporation;
4. “Distribution center” means a facility for the reception, storage, or shipping of:
   1. A business's own products or products which the business wholesales to retail businesses or ships to its own retail outlets;
   2. Products owned by other companies with which the business has contracts for storage and shipping if seventy-five percent (75%) of the sales revenues are from out-of-state customers; or
   3. Products for sale to the general public if seventy-five percent (75%) of the sales revenues are from out-of-state customers;
5. [Repealed.]
6. 1. “Existing employees” means those employees hired by the business prior to the date of the signed financial incentive plan.
   2. Existing employees may be considered “net new full-time permanent employees” only if:
      1. The position or job filled by the existing employee was created in accordance with the signed financial incentive plan; and
      2. The position vacated by the existing employee was either filled by a subsequent employee or no subsequent employee will be hired because the business no longer conducts the particular business activity requiring such classification;
7. “Financial incentive plan” means an agreement entered into by a business and the Arkansas Economic Development Commission to provide the business an incentive to locate a new facility or expand an existing facility in Arkansas;
8. “Fund” means the Economic Development Incentive Fund;
9. 1. “High unemployment” means an unemployment rate equal to or in excess of one hundred fifty percent (150%) of the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division when the state's annual average unemployment rate is six percent (6%) or below.
   2. When the state's annual average unemployment rate is above six percent (6%), “high unemployment” means equal to or in excess of three percent (3%) above the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division;
10. 1. 1. “Net new full-time permanent employee” means a position or job which was created pursuant to a signed financial incentive plan and which is filled by one (1) or more employees or contractual employees who were Arkansas taxpayers during the year in which the tax credits or incentives were earned.
       2. The position or job held by such an employee or employees must have been filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours per week.
    2. However, in order to qualify for the provisions of this subchapter, a contractual employee must be offered a benefits package comparable to a direct employee of the business seeking incentives under this subchapter; and
11. “Office sector” means control centers that influence the environment in which data processing, customer service, credit accounting, telemarketing, claims processing, and other administrative functions that act as production centers are performed.

History. Acts 1993, No. 788, § 2; 1993, No. 851, § 2; 1995, No. 590, § 1; 1997, No. 540, §§ 31, 85; 1997, No. 807, § 11; 1999, No. 584, § 1; 2001, No. 1054, §§ 1-3; 2019, No. 910, §§ 365-367.

Amendments. The 2019 amendment substituted “Division of Workforce Services” for “Department of Workforce Services” in (1); repealed (5); and substituted “Division of Workforce Services” for “department” in (9)(A) and (9)(B).

15-4-1603. Economic Development Incentive Fund.

There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Economic Development Incentive Fund” of the Arkansas Economic Development Commission. The fund shall consist of revenues designated for this fund by the Revenue Division of the Department of Finance and Administration pursuant to agreements entered into by the Arkansas Economic Development Commission with qualified businesses.

History. Acts 1993, No. 788, § 3; 1993, No. 851, § 3; 1997, No. 540, § 32; 1999, No. 584, § 2.

Cross References. Economic Development Incentive Fund, payroll rebate, §§ 15-4-2707, 15-4-3106.

Economic Development Incentive Fund, special revenues, § 19-6-479.

15-4-1604. Powers and duties of the Arkansas Economic Development Commission.

The Arkansas Economic Development Commission shall administer the provisions of this subchapter and shall have the following powers and duties in addition to those mentioned in this subchapter and in other laws of this state:

1. To promulgate rules in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., necessary to carry out the provisions of this subchapter;
2. 1. In highly competitive situations, the Director of the Arkansas Economic Development Commission is authorized to negotiate proposals on behalf of the state with prospective businesses which are considering locating a new facility or expanding an existing facility that would employ the requisite number of net new full-time permanent employees provided by § 15-4-1605.
   2. The commission is authorized to negotiate with the business a financial incentive plan up to an amount equal to three and nine-tenths percent (3.9%) of the business's annual payroll for the net new full-time permanent employees, and may negotiate with the business a financial incentive plan up to an amount equal to five percent (5%) of the annual payroll for the net new full-time permanent employees if the business locates in an area of high unemployment as defined by § 15-4-1602;
3. To provide the Department of Finance and Administration with a copy of each formal agreement entered into by the commission with each of the qualifying businesses so that the department will know how much money is to be designated for the Economic Development Incentive Fund each quarter; and
4. To make disbursement from the fund to qualified businesses which have entered into financial incentive plans.

History. Acts 1993, No. 788, § 4; 1993, No. 851, § 4; 1999, No. 584, § 3; 2019, No. 315, § 1065; 2019, No. 910, § 368.

Amendments. The 2019 amendment by No. 315 deleted “and regulations” following “rules” in (1).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (2)(A).

15-4-1605. Qualifications.

To qualify for the benefits of this subchapter, the entity applying must:

1. Be classified as one (1) or more of the following types of businesses:
   1. Manufacturers classified in Standard Industrial Classification codes 20-39, including semiconductor and microelectronic manufacturers that will employ one hundred (100) or more net new full-time permanent employees;
   2. 1. Computer businesses primarily engaged in providing:
         1. Computer programming services;
         2. Design and development of prepackaged software;
         3. Digital content production and preservation;
         4. Computer processing and data preparation services;
         5. Information retrieval services; and
         6. Computer and data processing consulting and developing.
      2. All businesses in the group described in subdivision (1)(B)(i) of this section shall:
         1. Employ twenty-five (25) or more net new full-time permanent employees;
         2. Derive at least seventy-five percent (75%) of the business’s revenue from out-of-state sales; and
         3. Have no retail sales to the general public;
   3. Businesses primarily engaged in commercial physical and biological research as classified by Standard Industrial Classification code 8731 that will employ fifty (50) or more net new full-time permanent employees;
   4. 1. Businesses primarily engaged in motion picture production that will employ fifty (50) or more net new full-time permanent employees.
      2. All businesses in this group must derive at least seventy-five percent (75%) of their revenue from out-of-state sales and have no retail sales to the general public;
   5. A distribution center with no retail sales to the general public unless seventy-five percent (75%) of the sales revenues are from out-of-state customers and that will employ one hundred (100) or more net new full-time permanent employees;
   6. An office sector business with no retail sales to the general public and that will employ fifty (50) or more net new full-time permanent employees;
   7. A national, corporate, or regional headquarters with no retail sales to the general public that will employ fifty (50) or more net new full-time permanent employees; and
   8. A coal mining operation that employs twenty-five (25) or more net new full-time permanent employees;
2. Hire the requisite number of net new full-time permanent employees within twenty-four (24) months following the date the financial incentive plan was entered into with the Arkansas Economic Development Commission;
3. Agree to certify to the Department of Finance and Administration the number of net new full-time permanent employees and the net new full-time permanent employees' payroll once the number of net new full-time permanent employees reaches the requisite number provided in subdivision (1) of this section and recertify the number and payroll of the net new full-time permanent employees annually thereafter during the term of the financial incentive plan so that the department can determine the amount of money to be deposited into the Economic Development Incentive Fund; and
4. Agree to certify to the department within thirty (30) days after the number of net new full-time permanent employees falls below the required numbers enumerated in subdivision (1) of this section.

History. Acts 1993, No. 788, § 5; 1993, No. 851, § 5; 1995, No. 590, § 2; 1997, No. 807, §§ 19, 20; 1999, No. 584, § 4; 2001, No. 1054, §§ 4-6; 2001 No. 1065, § 3; 2005, No. 1962, §§ 58, 59.

Amendments. The 2005 amendment inserted the subdivision designations in (1)(B)(i) and (ii) and made related changes; inserted “programming services” in (1)(B)(i)( a ); deleted “businesses engaged in” preceding “Digital” in (1)(B)(i)( c ); substituted “consulting and developing” for “consultants and developers” in (1)(B)(i)( f ); substituted “the group described in subdivision (1)(B)(i) of this section shall” for “this group must” in (1)(B)(ii); and substituted “new full-time permanent employees” for “full-time permanent positions” in (1)(H).

Cross References. Economic Development Incentive Fund, special revenues, § 19-6-479.

15-4-1606. Limitations.

The following limitations shall apply to all financial incentive plans negotiated by the Arkansas Economic Development Commission:

1. 1. The term of a financial incentive plan shall not exceed one hundred twenty-six (126) months.
   2. 1. For defense industry projects, as defined in § 26-52-702 [repealed], the one hundred and twenty-six (126) months shall be calculated forward from the date certification of the mandatory number of employees is granted by the Department of Finance and Administration.
      2. For all other financial incentive plans, the one hundred twenty-six (126) months shall be calculated forward from the date of the financial incentive plan entered into by the business and the commission;
2. The business shall not be entitled to the benefits of a financial incentive plan entered into with the commission until twelve (12) months after it has hired the requisite number of net new full-time permanent employees and has certified that fact to the department as required by this subchapter;
3. 1. If the number of net new full-time permanent employees drops below the requisite number provided in § 15-4-1605, all benefits under the financial incentive plan entered into with the commission shall be terminated unless the Director of the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State approve a written request filed by the business explaining why the number of net new full-time permanent employees fell below the requisite number. The director and the Chief Fiscal Officer of the State may grant the business up to twenty-four (24) months to bring the number of net new full-time permanent employees back up to the requisite number and may approve the continuation of benefits during that period.
   2. 1. In the event that the requisite number of net new full-time permanent employees cannot be employed within the twenty-four-month period, the business can file a written application with the commission explaining why additional time is necessary. The business can be afforded up to twenty-four (24) more months to hire the requisite number of employees if the director and the Chief Fiscal Officer of the State agree.
      2. In the event that a business fails to notify the department that the number of net new full-time permanent employees has fallen below the required number to continue to receive benefits under a financial incentive plan, that business will be liable for the repayment of all benefits which were paid to the business after it no longer qualified for the benefits. Interest shall also be due at the rate of ten percent (10%) per annum;
4. 1. The financial benefits received by a business shall be used in accordance with the financial incentive plan entered into with the commission.
   2. 1. Financial incentive plans shall designate how the funds are to be used by the business.
      2. A financial incentive plan may designate funds for employee training, infrastructure, or other purposes agreed to by the business and the director; and
5. Recipients of benefits under this subchapter are precluded from receiving benefits under the Arkansas Economic Development Act of 1995, § 15-4-1901 et seq.

History. Acts 1993, No. 788, § 6; 1993, No. 851, § 6; 1995, No. 820, § 1; 1997, No. 807, § 22; 1999, No. 584, § 5; 2001, No. 737, § 4; 2017, No. 374, § 7; 2019, No. 910, §§ 369, 370.

Amendments. The 2017 amendment deleted “§ 2-8-101 et seq. [repealed] and” following “under” in (5).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the first sentence of (3)(A); and deleted “executive” preceding “director” in the second sentence of (3)(A) and in (4)(B)(ii).

15-4-1607. Transfer of funds.

After the Department of Finance and Administration has received the certification of the number of employees and their payroll from a business that has entered into a financial incentive plan with the Arkansas Economic Development Commission, the department shall transfer the appropriate amount of money designated by the financial incentive plan out of general revenues into a special account designated as special revenue for the Economic Development Incentive Fund.

History. Acts 1993, No. 788, § 7; 1993, No. 851, § 7.

Cross References. Economic Development Incentive Fund, special revenues, § 19-6-479.

15-4-1608. Verification.

1. The Department of Finance and Administration shall have the authority to obtain whatever information necessary from participating businesses and from the Division of Workforce Services to verify that businesses which have entered into financial incentive plans with the Arkansas Economic Development Commission are complying with the terms of the financial incentive plans and reporting accurate information concerning the number of employees and their payrolls to the department.
2. The department may promulgate rules necessary for the proper administration of the provisions of this subchapter.

History. Acts 1993, No. 788, § 8; 1993, No. 851, § 8; 1995, No. 590, § 3; 2019, No. 315, § 1066; 2019, No. 910, § 371.

Amendments. The 2019 amendment by No. 315 deleted “and regulations” following “rules” in (b).

The 2019 amendment by No. 910 substituted “Division of Workforce Services” for “Department of Workforce Services” in (a).

15-4-1609. Effect of participation.

Receiving benefits pursuant to this subchapter will preclude a business from participating in the incentive program of the Arkansas Economic Development Act of 1995, § 15-4-1901 et seq.

History. Acts 1993, No. 788, § 9; 1993, No. 851, § 9; 1999, No. 584, § 6.

15-4-1610. [Repealed.]

Publisher's Notes. This section, concerning the effective date of this subchapter, was repealed by Acts 1999, No. 584, § 7. The section was derived from Acts 1993, No. 788, § 10; 1993, No. 851, § 10.

Subchapter 17 — Arkansas Enterprise Zone Act of 1993

A.C.R.C. Notes. Acts 1999, No. 1130, § 7 provides:

“The additional benefits provided by this act shall only apply to those financial incentive plans signed after July 30, 1999.”

Effective Dates. Acts 1993, No. 947, § 14: July 1, 1993. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that unemployment and economic underdevelopment has reached intolerable levels in certain portions of this state, and that the establishment of tax incentives afforded by this Act are critical to the development and expansion of job opportunities in those areas. Therefore, an emergency is declared to exist and this Act, being necessary for the preservation of the public peace, health and safety, shall be in full force and effect on July 1, 1993.”

Acts 1995, No. 394, § 9: Feb. 20, 1995. Emergency clause provided: “It is hereby found and determined by the General Assembly that unemployment and economic underdevelopment have reached intolerable levels in certain portions of this state, and that the establishment of tax incentives afforded by this act are crucial to the development and expansion of job opportunities in those areas. Therefore an emergency is hereby declared to exist and this act being necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 807, § 28: Mar. 25, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that unemployment and economic underdevelopment has reached intolerable levels in certain portions of this State, and that the establishment of tax incentives afforded by this Act are critical to the development and expansion of job opportunities in those areas. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 1999, No. 1130, § 11: Apr. 6, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that existing Arkansas businesses must remain competitive in today's global economy; that the tax incentive provided by this Act is necessary to provide businesses with the incentive to invest in Arkansas and hire Arkansans; that other states compete with Arkansas for the location or expansion of business activity and this incentive is also necessary to offer the companies a business environment compatible with other states; and that without this incentive companies considering locations or expansions of their businesses may choose to locate in another state, depriving Arkansans of these jobs and the economic benefit that the jobs bring to the state. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2001, No. 807, § 6: Mar. 19, 2001. Emergency clause provided: “It is found and determined by the General Assembly that this act is designed to bring new jobs to this state; that current financial conditions dictate that unless industries can take advantage of the provisions of this act immediately they may forced to locate in another state; that unless this bill takes effect immediately significant numbers of jobs will be lost to this state. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2003, No. 1473, § 74: July 1, 2003. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act includes technical corrects to Act 923 of 2003 which establishes the classification and compensation levels of state employees covered by the provisions of the Uniform Classification and Compensation Act; that Act 923 of 2003 will become effective on July 1, 2003; and that to avoid confusion this act must also [become] effective on July 1, 2003. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2003.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-1701. Title.

This subchapter may be referred to and cited as the “Arkansas Enterprise Zone Act of 1993”.

History. Acts 1993, No. 947, § 1; 1999, No. 1130, § 1.

15-4-1702. Definitions.

As used in this subchapter:

1. 1. “Average hourly wage” means the average wage of the net new full-time permanent employees based on payroll for the most recent quarter reported to the Division of Workforce Services.
   2. “Average hourly wage” is computed by using the total of the net new full-time permanent employee's reported taxable earnings, including overtime pay and one quarter (¼) of the employee's annual bonus amount, divided by the number of weeks worked during the most recent quarter, divided by the average hours worked per week per net new full-time permanent employee;
2. “Commission” means the Arkansas Economic Development Commission;
3. “Corporate headquarters” means the home or center of operations, including research and development, of a national or multinational corporation;
4. “Distribution center” means a facility for the reception, storage, or shipping of:
   1. A business's own products or products that the business wholesales to retail businesses or ships to its own retail outlets;
   2. Products owned by other companies with which the business has contracts for storage and shipping if seventy-five percent (75%) of the sales revenues are from out-of-state customers; or
   3. Products for sale to the general public if seventy-five percent (75%) of the sales revenues are from out-of-state customers;
5. [Repealed.]
6. 1. “Existing employees” means those employees hired by the business prior to the date of the financial incentive plan.
   2. Existing employees may be considered net new full-time permanent employees only if:
      1. The position or job filled by the existing employee was created as a result of the project; and
      2. The position vacated by the existing employee was either filled by a subsequent employee or no subsequent employee would be hired because the business no longer conducts the particular business activity requiring such a classification;
7. “Financial incentive plan” means an agreement entered into by a business and the commission to provide the business an incentive to locate a new facility or expand an existing facility in Arkansas;
8. “Governing authority” means the quorum court of a county or the governing body of a municipality;
9. 1. “High unemployment” means an unemployment rate equal to or in excess of one hundred fifty percent (150%) of the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division when the state's annual average unemployment rate is six percent (6%) or below.
   2. When the state's annual average unemployment rate is above six percent (6%), “high unemployment” means an unemployment rate equal to or in excess of three percent (3%) above the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division;
10. “Modernization” means to increase efficiency or to increase productivity of the business through investment in machinery or equipment, or both, and shall not include costs for routine maintenance;
11. 1. 1. “Net new full-time permanent employee” means a position or job that was created pursuant to a signed financial incentive plan and that is filled by one (1) or more employees or contractual employees who were Arkansas taxpayers during the year in which the tax credits or incentives were earned.
       2. The position or job held by the employee or employees must have been filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours per week.
    2. However, in order to qualify for the provisions of this subchapter, a contractual employee must be offered a benefits package comparable to a direct employee of the business seeking incentives under this subchapter.
    3. Employees could not have been claimed for tax credits or incentives under this subchapter during the preceding taxable year.
    4. The number of net new full-time permanent employees shall be equal to the total number of new full-time permanent employees for the current year minus the total number of new full-time permanent employees for the previous tax year;
12. “Office sector business” means control centers that influence the environment in which data processing, customer service, credit accounting, telemarketing, claims processing, and other administrative functions that act as production centers are performed;
13. “Program” means this subchapter;
14. 1. “Project” means:
       1. All activities and costs associated with the construction of a new plant or facility;
       2. The expansion of an established plant or facility by adding to the building or production equipment or support infrastructure, or both; or
       3. Modernization through the replacement of production or processing equipment or support infrastructure, or both.
    2. Expenditures for routine repair and maintenance that do not result in new construction or expansion are ineligible for benefits under this subchapter.
    3. In order to receive credit for project costs, the costs must be incurred within four (4) years from the date the project plan was approved by the commission.
    4. Routine operating expenditures are ineligible for benefits under this subchapter;
15. “Project plan” means the plan submitted to the commission containing such information as may be required by the director to determine eligibility for benefits;
16. “Regional headquarters” means the center of operations for a specific geographical area;
17. “Routine maintenance” means the replacement of existing machinery parts with like parts; and
18. “Trucking sector business” means a business that is classified within the Standard Industrial Classification code number 4231.

History. Acts 1993, No. 947, § 2; 1995, No. 394, §§ 1-3; 1997, No. 540, §§ 33, 86; 1997, No. 807, §§ 1, 12; 1999, No. 1130, § 2; 2001, No. 807, § 1; 2001, No. 1401, § 4; 2003, No. 1473, § 31; 2019, No. 910, §§ 372-374.

A.C.R.C. Notes. Acts 2001, No. 1401, § 1, provided:

“LEGISLATIVE INTENT. It is the intent of the General Assembly that expenditures for replacements of items previously purchased as part of a project and routine operating expenditures would not be eligible for benefits under the Arkansas Enterprise Zone Act of 1993, § 15-4-1701 et seq., or the Arkansas Economic Development Act of 1995, § 15-4-1901 et seq. These incentive program provisions are in need of clarification, and the purpose of the amendments in this act is to ensure that the original legislative intent is fulfilled.”

Amendments. The 2019 amendment substituted “Division of Workforce Services” for “Department of Workforce Services” in (1)(A); repealed (5); and deleted “executive” preceding “director” in (15).

15-4-1703. Powers and duties of the Arkansas Economic Development Commission.

The Arkansas Economic Development Commission shall administer the provisions of this subchapter and shall have the following powers and duties, in addition to those mentioned in this subchapter and in other laws of this state:

1. To monitor the implementation and operation of this subchapter and to conduct a continuing evaluation of the progress made;
2. To assist the governing authority in obtaining assistance from any other department of state government, including assistance in providing training and technical assistance to new businesses and industries;
3. To assist any employer or prospective employer with a qualifying project in obtaining the benefits of any incentive or inducement program authorized by state law;
4. To act as a liaison between other state agencies and businesses and industries to assure that both the spirit and the intent of this subchapter are met;
5. To submit an annual written report evaluating the effectiveness of the program and presenting any suggestions for improving the program, to be submitted to the Governor no later than March 1 of each year; and
6. To promulgate rules, in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., necessary to carry out the provisions of this subchapter.

History. Acts 1993, No. 947, § 3; 1999, No. 1130, § 3; 2019, No. 315, § 1067.

Amendments. The 2019 amendment deleted “and regulations” following “rules” in (6).

15-4-1704. Refund of sales and use tax — Tax credit.

1. 1. The Revenue Division of the Department of Finance and Administration shall authorize a refund of sales and use taxes imposed by the state and a municipality or county if the municipality or county authorized the refund of its local tax on the purchases of the material used in the construction of a building or buildings or any addition, modernization, or improvement thereon for housing any legitimate business enterprise and machinery and equipment to be located in or in connection with such a building.
   2. A refund shall not be authorized for routine operating expenditures.
   3. 1. 1. A refund shall not be authorized for the purchase of replacements of items previously purchased as part of a project under this subchapter unless the items previously purchased will not enable the project to function as originally intended.
         2. In order to qualify for a refund under this subchapter, the replacement of an item previously purchased must be necessary for the implementation or completion of the project.
      2. However, a program participant may make changes in a project by amendment to the project plan filed with the Arkansas Economic Development Commission.
   4. 1. All claims for sales and use tax refunds under this subchapter shall be filed with the division within three (3) years from the date of the qualified purchase or purchases.
      2. Claims filed after three (3) years from the date of the qualified purchase or purchases shall be disallowed.
   5. 1. The time limitation in this section for filing claims shall be tolled if:
         1. A program participant fails to pay sales or use tax on an item that was taxable; and
         2. The applicable tax is subsequently assessed as a result of an audit by the division.
      2. All claims for sales and use tax refunds relating to an audited purchase shall be filed with the division within one (1) year after payment of the assessed tax or the date of a final administrative or judicial order, whichever is later.
   6. A program participant that files a claim for a sales or use tax refund relating to an audited purchase shall be entitled to a refund of interest paid on the amount of tax assessed on the audited purchase if a refund is approved for the purchase.
2. A sales and use tax refund as provided for in subsection (a) of this section shall be authorized, provided that the business is classified as one (1) of the following types of businesses:
   1. Manufacturers classified in Standard Industrial Classification codes 20-39, including semiconductor and microelectronic manufacturers, that create one (1) or more net new full-time permanent jobs;
   2. 1. Computer businesses primarily engaged in:
         1. Providing computer programming services;
         2. The design and development of prepackaged software;
         3. Businesses engaged in digital content production and digital preservation;
         4. Computer processing and data preparation services;
         5. Information retrieval services; and
         6. Computer and data processing consultants and developers.
      2. All businesses in this group must:
         1. Create five (5) or more net new full-time permanent jobs after July 1, 2001;
         2. Derive at least seventy-five percent (75%) of their revenue from out-of-state sales; and
         3. Have no retail sales to the general public;
   3. Businesses primarily engaged in commercial physical and biological research as classified by Standard Industrial Classification code 8731 that create one (1) or more net new full-time permanent jobs;
   4. 1. Businesses primarily engaged in motion picture production that will create twenty-five (25) or more net new full-time permanent jobs.
      2. All businesses in this group must derive at least sixty percent (60%) of their revenue from out-of-state sales and have no retail sales to the general public;
   5. A distribution center with no retail sales to the general public, unless seventy-five percent (75%) of the sales revenues are from out-of-state customers, that creates twenty-five (25) or more net new full-time permanent jobs;
   6. An office sector business with no retail sales to the general public that creates twenty-five (25) or more net new full-time permanent jobs;
   7. A corporate or regional headquarters with no retail sales to the general public that creates twenty-five (25) or more net new full-time permanent jobs;
   8. A trucking/distribution terminal as classified by Standard Industrial Classification code 4231 with no retail sales to the general public that creates twenty-five (25) or more net new full-time permanent jobs; and
   9. A coal mining operation that employs twenty-five (25) or more net full-time permanent persons.
3. The business shall file an endorsement resolution with the commission and the Department of Finance and Administration. The endorsement resolution must be approved by the governing body of a municipality or county in whose jurisdiction the facility is located and must:
   1. Approve the specific entity's participation in the program; and
   2. Specifically state whether the municipality or county authorizes the department to refund local sales and use taxes to the entity under the program. A municipality or county can authorize the refund of all or part of a tax levied by it but cannot authorize the refund of any tax not levied by it.
4. In the event it is found that any business receiving the benefits contained in subsection (a) of this section has failed to comply with the conditions contained in subsections (b) and (c) of this section, that business will be liable for the payment of all sales and use taxes which were refunded under subsection (a) of this section.
5. If the business does not continuously and throughout the project term meet the requirements of subdivisions (b)(1)-(9) of this section, then that business shall automatically be disqualified from receiving any benefits under this section and shall be required to repay any tax benefits already received under this subchapter, plus penalty and interest, as allowed by law.
6. 1. In the event that a business fails to notify the department that the number of employees has fallen below the required number to continue to receive benefits under this subchapter, that business will be liable for the repayment of all benefits which were paid to the business after it no longer qualified for the benefits.
   2. Interest shall also be due at the rate of ten percent (10%) per annum.
7. 1. The requisite number of net new full-time permanent employees must be employed by the business within twenty-four (24) months following the date the financial incentive plan was signed.
   2. In the event that the requisite number of net new full-time permanent employees cannot be employed within the twenty-four-month period, the business can file a written application with the commission explaining why additional time is necessary. The business can be afforded up to twenty-four (24) more months to hire the requisite number of employees if the Director of the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State determine that the need for additional time is due to:
      1. Unanticipated and unavoidable delay in the construction of a facility that must be completed before the employees can be hired;
      2. The project as originally planned will require more than twenty-four (24) months to complete; or
      3. A change in the business ownership or business structure due to a merger or acquisition.
8. 1. The division shall authorize an income tax credit equal to one hundred (100) times the average hourly wage paid, with a maximum of three thousand dollars ($3,000) per net new full-time permanent employee hired within sixty (60) months following the date of the approved financial incentive plan of a business qualifying under subsection (b) of this section.
   2. 1. This tax credit may be used for the taxable year in which the net new full-time permanent employee was hired.
      2. However, with respect to projects approved prior to March 25, 1997, if the entire credit cannot be used in the year earned, the remainder may be applied against the income tax for the succeeding four (4) years or until the credit is entirely used, whichever occurs first. For projects approved on or after March 25, 1997, the credit may be applied against income tax for the succeeding nine (9) years or until the credit is entirely used, whichever occurs first.
   3. The multiplier allowed under this section shall be four hundred (400) multiplied by the average hourly wage paid with a maximum credit of six thousand dollars ($6,000) if the business is located in a high-unemployment county.
9. 1. An income tax credit as provided for in subsection (c) of this section shall be authorized, provided that:
      1. The request for such a credit is accompanied by an endorsement resolution approved by the governing body of the appropriate municipality or county in whose jurisdiction the establishment is to be located; and
      2. All of the net new full-time permanent employees are employed at the facility.
   2. 1. In the event it is found that any business receiving the benefits contained in subsection (h) of this section has failed to comply with the conditions contained in this section, that business shall be disqualified from receiving any further benefits under the program and shall be liable for the payment of such additional income taxes as may be due after the income tax credits provided for in subsection (h) of this section are disallowed.
      2. Interest shall also be due at the rate of ten percent (10%) per annum.
10. To be counted as a net new full-time permanent employee for the purpose of qualifying for the tax credits and incentives provided in this section, the employee in the position or job must have been an Arkansas taxpayer during the year in which the tax credits or incentives were earned.

(c) The business shall file an endorsement resolution with the commission and the Department of Finance and Administration. The endorsement resolution must be approved by the governing body of a municipality or county in whose jurisdiction the facility is located and must:

History. Acts 1993, No. 947, § 4; 1995, No. 394, §§ 4, 5; 1997, No. 807, §§ 2-9, 13; 1999, No. 1130, § 4; 2001, No. 807, §§ 2-4; 2001, No. 1065, § 1; 2001 No. 1401, § 2; 2005, No. 443, § 1; 2017, No. 374, § 8; 2019, No. 910, § 375.

A.C.R.C. Notes. Acts 2001, No. 1401, § 1, provided:

“LEGISLATIVE INTENT. It is the intent of the General Assembly that expenditures for replacements of items previously purchased as part of a project and routine operating expenditures would not be eligible for benefits under the Arkansas Enterprise Zone Act of 1993, § 15-4-1701 et seq., or the Arkansas Economic Development Act of 1995, § 15-4-1901 et seq. These incentive program provisions are in need of clarification, and the purpose of the amendments in this act is to ensure that the original legislative intent is fulfilled.”

Amendments. The 2005 amendment inserted “hired within sixty (60) months following the date of the approved financial incentive plan” in (h)(1); and substituted “may be used” for “shall be used” in (h)(2)(A).

The 2017 amendment, in (e), substituted “(b)(1)-(9)” for “(b)(1)-(8)” and twice substituted “shall” for “will”.

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the second sentence of the introductory language of (g)(2).

15-4-1705. Projects under Manufacturer's Investment Sales and Use Tax Credit Act of 1985.

1. 1. No person or entity may file for benefits under this subchapter if an application for benefits has been filed and approved under the Economic Investment Tax Credit Act, § 26-52-701 et seq., for the same project.
   2. However, an application for benefits under the Economic Investment Tax Credit Act, § 26-52-701 et seq., may be withdrawn if no tax credits have been taken under that subchapter.
2. 1. When a project has been approved under the Economic Investment Tax Credit Act, § 26-52-701 et seq., no application for a project under this subchapter will be accepted until the expiration of one (1) year after the date of the approval of the application under the Economic Investment Tax Credit Act, § 26-52-701 et seq.
   2. When a project has been approved under this subchapter, no application for projects under the Economic Investment Tax Credit Act, § 26-52-701 et seq., shall be accepted until the expiration of one (1) year after the date of approval of the application under this subchapter.

History. Acts 1993, No. 947, § 5; 1999, No. 1130, § 5.

15-4-1706 — 15-4-1708. [Repealed.]

Publisher's Notes. Former §§ 15-4-1706 — 15-4-1708, concerning a transition period, the effective date, and the expiration date of this subchapter, were repealed by Acts 1999, No. 1130, § 6. The sections were derived from the following sources:

15-4-1706. Acts 1993, No. 947, §§ 6, 7.

15-4-1707. Acts 1993, No. 947, §§ 8, 9.

15-4-1708. Acts 1993, No. 947, § 10; 1997, No. 807, § 10.

15-4-1709. Exceptions.

1. A county that does not qualify as a high-unemployment county, as defined in § 15-4-1702, but has experienced a sudden and severe period of economic distress caused by the closing of a business entity that results in the loss of a minimum of five hundred (500) full-time permanent jobs or a minimum of five percent (5%) of the employed labor force, as determined by the most recent “Labor Market Information” publication published by the Division of Workforce Services, may be designated as a high-unemployment county by the Arkansas Economic Development Council.
2. The designation as a “high-unemployment county” shall be in effect for one (1) year after the closing of the business.

History. Acts 2001, No. 807, § 5; 2019, No. 910, § 376.

Amendments. The 2019 amendment substituted “Division of Workforce Services” for “Department of Workforce Services” in (a).

Subchapter 18 — Major Industry Facilities Incentive Act

15-4-1801. Title.

This subchapter shall be known as the “Major Industry Facilities Incentive Act”.

History. Acts 1993, No. 1165, § 1.

15-4-1802. Definitions.

As used in this subchapter:

1. “Bonds” means revenue bonds or general obligation bonds;
2. “Eligible facility” means any facility owned by any state agency or political subdivision and any facility financed through the issuance of bonds by any state agency or political subdivision at which at least one hundred (100) people are employed and which is acquired or completed or substantially reconstructed or expanded after December 31, 1992;
3. “Political subdivision” means cities of the first class or cities of the second class and counties and any governmental entity created by them; and
4. “State income tax” means the Arkansas state income tax.

History. Acts 1993, No. 1165, § 2.

15-4-1803. Application for assistance generally.

Any state agency or political subdivision that has acquired or constructed or which desires to acquire or construct or which has financed or which desires to finance through the issuance of its bonds an eligible facility may apply to the State Board of Finance for state assistance in paying the debt service requirements, including principal, interest, and trustee's and paying agent's fees and charges, on bonds issued or to be issued by the state agency or political subdivision to finance all or a portion of the eligible facility and capital improvements related thereto and any amounts theretofore expended by the state agency or political subdivision from its revenues to acquire or construct the eligible facility and capital improvements related thereto, increased by an annual rate of interest equal to the average rate of interest to be paid on the bonds issued to finance the eligible facility.

History. Acts 1993, No. 1165, § 3.

15-4-1804. Application — Contents.

1. All applications for state assistance under this subchapter shall be in writing and shall describe:
   1. The eligible facility;
   2. The financing thereof;
   3. The estimated number of people to be employed at the eligible facility;
   4. The estimated additional state income tax revenues to be derived as a result of the expenditures;
   5. The expected expense, if any, to the state; and
   6. Any other matters prescribed by the State Board of Finance.
2. Upon receipt of an application for state assistance, the board shall proceed promptly to review it and shall notify the applicant of any additional information needed for a proper evaluation of the application.

History. Acts 1993, No. 1165, §§ 4, 5.

15-4-1805. Application — Hearings.

1. After reviewing the application and upon reasonable notice to the applicant, the State Board of Finance shall hold a public hearing on the application.
2. 1. The board shall give notice of the time, place, and purpose of the public hearing by publication one (1) time in a newspaper of general circulation within the boundaries of the applicant, the publication to be not less than ten (10) calendar days prior to the hearing.
   2. The notice shall describe generally the eligible facility for which state assistance has been requested and shall contain a brief description of the procedural steps to be taken in connection with the application and the financing of the eligible facility.
3. At the public hearing, representatives of the applicant and any other interested persons may appear and present evidence and argument in support of or in opposition to the application, and the board may present additional evidence.

History. Acts 1993, No. 1165, § 6.

15-4-1806. Application — Determination of eligibility.

1. After consideration of the application and conclusion of the hearing, the State Board of Finance shall determine whether the facility described in the application is an eligible facility.
2. If the board determines that the facility described in the application is an eligible facility and that the financing of or repayment for such eligible facility through a combination of bonds of the applicant and state assistance under this subchapter is in the best interest of the applicant and the state, the application shall be approved.
3. In determining whether state assistance is in the best interest of the applicant and the state, the board shall consider:
   1. The capacity of the applicant to issue bonds to finance the eligible facility;
   2. The amount of additional state income tax revenues estimated to be derived from the eligible facility; and
   3. The estimated principal and interest requirements for the bonds issued in connection with the eligible facility or amounts necessary to repay the investment by a state agency or political subdivision in the eligible facility.

History. Acts 1993, No. 1165, § 7.

15-4-1807. State assistance.

1. If the application is approved, the State Board of Finance shall fix the amount of state assistance to the state agency or political subdivision to repay its investment or for paying debt service on the bonds issued to finance, in whole or in part, the eligible facility, if requested by the state agency or political subdivision and, on behalf of the state, shall enter into an agreement providing for the payment of the amount so fixed in quarterly payments and shall certify the amount to the Treasurer of State.
2. If the state agency or political subdivision issues two (2) or more issues of bonds to finance an eligible facility, the amount of state assistance shall be fixed separately for each issue.
3. The total amount of state assistance shall be fixed at no more than the additional state income tax revenues directly generated by the eligible facility.
4. It shall be a condition to any payments under this subchapter that the state agency or political subdivision has issued and has outstanding its bonds for the purpose of financing, in whole or in part, the eligible facility, but this shall not limit the provisions in this subchapter for repayment of a state agency's or political subdivision's investment heretofore made in an eligible facility.
5. The payments provided for in this subchapter shall be subject to the specific appropriation by the General Assembly and shall be for a term of not longer than two (2) years, but, subject to the appropriation by the General Assembly, shall be extended from time to time for additional terms of not to exceed two (2) years each.

History. Acts 1993, No. 1165, § 8.

15-4-1808. Major Industry Facilities Incentive Fund — Creation.

1. There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Major Industry Facilities Incentive Fund”.
2. The Treasurer of State shall monthly, before making the percentage distributions of general revenues as provided by law, deduct from the General Revenue Fund Account of the State Apportionment Fund an amount of money necessary to meet the quarterly payments to state agencies and political subdivisions provided for in this subchapter and shall credit them to the Major Industry Facilities Incentive Fund, and shall quarterly pay over the amounts to each state agency or political subdivision, provided that the General Assembly shall have appropriated funds for them.
3. 1. The State Board of Finance shall certify to the Treasurer of State the amount of assistance to each state agency or political subdivision for paying debt service on the bonds issued to finance the eligible facility.
   2. If it should be determined that overpayments were made to the entity, then the overpayments shall be recovered by reducing the succeeding fiscal year's entitlement by the overpayment.

History. Acts 1993, No. 1165, §§ 9-11.

Cross References. Major Industry Facilities Incentive Fund, § 19-5-1060.

15-4-1809. Payments.

1. Payments of state assistance to state agencies and political subdivisions under this subchapter shall be made by remitting them directly to the trustee for the holders of the bonds issued to finance the eligible facility.
2. The trustee shall apply the state assistance money to the payment or redemption of the bonds and to the payment of interest thereon.
3. When the bonds issued to finance the eligible facility are fully retired or the investment of the state agency or political subdivision of its revenues in the eligible facility has been repaid with accrued and accruing interest, any money then held by the trustee derived from the state assistance shall be returned to the Treasurer of State and deposited into the State Treasury as general revenues to the credit of the General Revenue Fund Account of the State Apportionment Fund, and future eligibility for that project shall be terminated.

History. Acts 1993, No. 1165, § 12.

Cross References. General Revenue Fund Account, § 19-5-202.

15-4-1810. Suspension of local tax.

Any state agency or political subdivision entering into an agreement pursuant to this subchapter may provide for suspension, in whole or in part, of the collection of any tax voted for payment of its general obligation bonds issued in accordance with an agreement under this subchapter in any year when money derived from state assistance under this subchapter or from other sources is available for payment of all or a portion of the debt service on the bonds.

History. Acts 1993, No. 1165, § 13.

15-4-1811. Pledge of state revenues prohibited.

1. Nothing in this subchapter shall be construed as authorizing the pledging of the faith and credit of the state or any of its revenues, either for the performance of the obligations of the state under the agreements authorized by this subchapter or for the payment of bonds issued pursuant to such agreements.
2. All payments to state agencies and political subdivisions under this subchapter are made subject to specific appropriations for such purpose and nothing in this subchapter or in any agreement entered into pursuant to this subchapter shall be construed to require the General Assembly to make any appropriation pursuant to this subchapter or such agreement or to prohibit the General Assembly from amending or repealing this subchapter at any time.

History. Acts 1993, No. 1165, § 14.

Subchapter 19 — Arkansas Economic Development Act of 1995

Effective Dates. Acts 1995, No. 831, § 9: in full force and effect for all tax years beginning on and after January 1, 1995.

Acts 1995, No. 831, § 13: Mar. 29, 1995. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that economic underdevelopment has reached intolerable level in this state and the state as a whole has been unable to compete with other state's incentive programs for economic development; and, that the incentives afforded by this act are critical to the development and expansion of job opportunities in the state. Therefore, an emergency is declared to exist and this act, being necessary for the preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval.”

Acts 1997, No. 807, § 28: Mar. 25, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly of this State that unemployment and economic underdevelopment has reached intolerable levels in certain portions of this State, and that the establishment of tax incentives afforded by this Act are critical to the development and expansion of job opportunities in those areas. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 1999, No. 575, § 8: Mar. 15, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that existing Arkansas businesses must remain competitive in today's global economy; that the tax incentive provided by this act is necessary to provide businesses with the incentive to invest in Arkansas and hire Arkansans; that other states compete with Arkansas for the location or expansion of business activity and this incentive is also necessary to offer the companies a business environment compatible with other states; and that without this incentive companies considering locations or expansions of their businesses may choose to locate in another state, depriving Arkansans of these jobs and the economic benefit that the jobs bring to the state. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-1901. Title.

This subchapter may be referred to and cited as the “Arkansas Economic Development Act of 1995”.

History. Acts 1995, No. 831, § 1.

15-4-1902. Definitions.

As used in this subchapter:

1. 1. “Average hourly wage” means the average wage of the net new full-time permanent employees based on payroll for the most recent quarter reported to the Division of Workforce Services.
   2. “Average hourly wage” is computed by using the total of the net new full-time permanent employees' reported taxable earnings, including overtime pay and one quarter (¼) of the employee's annual bonus amount, divided by the number of weeks worked during the most recent quarter, divided by the average hours worked per week per net new full-time permanent employee;
2. “Commission” means the Arkansas Economic Development Commission;
3. “Corporate headquarters” means the home or center of operations, including research and development, of a national or multinational corporation;
4. “Distribution center” means a facility for the reception, storage, or shipping of:
   1. A business's own products or products that the business wholesales to retail businesses or ships to its own retail outlets;
   2. Products owned by other companies with which the business has contracts for storage and shipping if seventy-five percent (75%) of the sales revenues are from out-of-state customers; or
   3. Products for sale to the general public if seventy-five percent (75%) of the sales revenues are from out-of-state customers;
5. “Eligible business” is defined as one (1) or more of the following:
   1. Manufacturers classified in Standard Industrial Classification codes 20-39, including semiconductor and microelectronic manufacturers;
   2. 1. Computer businesses primarily engaged in providing computer programming services; the design and development of prepackaged software; businesses engaged in digital content production and preservation; computer processing and data preparation services; information retrieval services; and computer and data processing consultants and developers.
      2. All businesses in this group must derive at least seventy-five percent (75%) of their revenue from out-of-state sales and have no retail sales to the general public;
   3. Businesses primarily engaged in commercial physical and biological research as classified by Standard Industrial Classification code 8731;
   4. 1. Businesses primarily engaged in motion picture productions.
      2. All businesses in this group must derive at least seventy-five percent (75%) of their revenue from out-of-state sales and have no retail sales to the general public;
   5. A distribution center with no retail sales to the general public unless seventy-five percent (75%) of the sales revenues are from out-of-state customers;
   6. An office sector business with no retail sales to the general public; and
   7. A corporate or regional headquarters with no retail sales to the general public;
6. [Repealed.]
7. “Financial incentive plan” means an agreement entered into by a business and the commission to provide the business an incentive to locate a new facility or expand an existing facility in Arkansas;
8. “Governing authority” means the quorum court of a county or the governing body of a municipality;
9. 1. “High unemployment” means an unemployment rate equal to or in excess of one hundred fifty percent (150%) of the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division, when the state's annual average unemployment rate is six percent (6%) or below.
   2. When the state's annual average unemployment rate is above six percent (6%), “high unemployment” means equal to or in excess of three percent (3%) above the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division;
10. 1. 1. “Net new full-time permanent employee” means a position or job which was created as a result of a project and which is filled by one (1) or more employees or contractual employees who were Arkansas taxpayers during the year in which the tax credits or incentives were earned.
       2. The position or job held by the employee or employees must have been filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours per week.
    2. However, in order to qualify for the provisions of this subchapter, a contractual employee must be offered a benefits package comparable to a direct employee of the business seeking incentives under this subchapter;
11. “Office sector” means control centers that influence the environment in which data processing, customer service, credit accounting, telemarketing, claims processing, and other administrative functions that act as production centers are performed;
12. “Payroll factor” of a project plant or facility is a fraction, the numerator being the total amount paid in this state during the tax period by the project plant or facility for compensation to employees working in the plant or facility and the denominator being the total compensation paid in the taxpayer's Arkansas operations during the tax period;
13. “Program” means this subchapter;
14. 1. “Project” means the construction or expansion of an eligible business as defined in subdivision (5) of this section in Arkansas costing at least five million dollars ($5,000,000), including the cost of the land, buildings, and equipment used in the construction or expansion, which has been approved by the commission as a construction or expansion qualifying for tax benefits under this subchapter.
    2. The project cost shall include:
       1. All activities and costs associated with the construction of a new plant or facility;
       2. All activities and costs associated with the expansion of an established plant or facility by adding to the building or production equipment or support infrastructure, or both; and
       3. All activities and costs associated with the replacement of production or processing equipment or support infrastructure, or both.
    3. The project cost shall not include routine operating expenditures;
15. “Property factor” of a project plant or facility is a fraction, the numerator being the average value of the taxpayer's real and tangible personal property owned or rented and used at the project plant or facility during the tax period and the denominator being the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period in Arkansas;
16. “Regional headquarters” means the center of operations for a specific geographical area; and
17. “Sales factor” of a project plant or facility is a fraction, the numerator being the total sales of the project plant or facility in this state during the tax period and the denominator being the total sales of the taxpayer's Arkansas operations during the tax period.

History. Acts 1995, No. 831, § 2; 1997, No. 540, § 87; 1997, No. 807, §§ 14, 15, 23; 1999, No. 575, § 1; 2001, No. 975, §§ 1-7; 2001, No. 1401, § 5; 2019, No. 910, §§ 377, 378.

A.C.R.C. Notes. Acts 2001, No. 1401, § 1, provided:

“LEGISLATIVE INTENT. It is the intent of the General Assembly that expenditures for replacements of items previously purchased as part of a project and routine operating expenditures would not be eligible for benefits under the Arkansas Enterprise Zone Act of 1993, § 15-4-1701 et seq., or the Arkansas Economic Development Act of 1995, § 15-4-1901 et seq. These incentive program provisions are in need of clarification, and the purpose of the amendments in this act is to ensure that the original legislative intent is fulfilled.”

Publisher's Notes. As amended by Acts 1997, No. 807, §§ 15 and 25, this section contained two subdivisions (13).

Amendments. The 2019 amendment substituted “Division of Workforce Services” for “Department of Workforce Services” in (1)(A); and repealed (6).

15-4-1903. Powers and duties of the Arkansas Economic Development Commission.

The Arkansas Economic Development Commission shall administer the provisions of this subchapter and shall have the following powers and duties in addition to those mentioned in this subchapter and in other laws of this state:

1. To promulgate rules in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., necessary to carry out the provisions of this subchapter;
2. 1. To negotiate proposals on behalf of the state with prospective businesses which are considering locating a new facility or expanding an existing facility that would employ at least one hundred (100) net new full-time permanent employees and expend at least five million dollars ($5,000,000) on the project.
   2. 1. For projects initiated after June 1, 2000, the commission is authorized to negotiate with a business a financial incentive plan granting an income tax credit based on total investment, without regard to how the project is financed, if it otherwise meets the qualifications of this act. The annual credit earned shall be based on the total investment divided by the term of the financial incentive plan.
      2. The amount of credit that may be claimed each year will depend on the average hourly wage of the net new full-time permanent employees.
      3. The amount of the income tax credit that may be claimed each year shall be negotiated in accordance with the following:
         1. When the average hourly wage, multiplied by forty (40), of the net new full-time permanent employee is between one hundred twenty-five percent (125%) and one hundred forty-nine percent (149%) of the lesser of the county or state annual average weekly wage per employee, the employer shall receive an annual income tax credit in the amount of fifty percent (50%) of the employer's state income tax liability;
         2. When the average hourly wage, multiplied by forty (40), of the net new full-time permanent employee is between one hundred fifty percent (150%) and one hundred seventy-four percent (174%) of the lesser of the county or state annual average weekly wage per employee, the employer shall receive an annual income tax credit in the amount of seventy-five percent (75%) of the employer's state income tax liability;
         3. When the average hourly wage, multiplied by forty (40), of the net new full-time permanent employee is one hundred seventy-five percent (175%) or more of the lesser of the county or state annual average weekly wage per employee, the employer shall receive an annual income tax credit in the amount of one hundred percent (100%) of the employer's state income tax liability; and
         4. If the average hourly wage, multiplied by forty (40), of the net new full-time permanent employee is less than one hundred twenty-five percent (125%) of the lesser of the county or state annual average weekly wage per employee, the employer shall receive no tax credit under this section.
      4. If the project is located in a high-unemployment area, the Director of the Arkansas Economic Development Commission will consider all the factors of the project and negotiate with the business an income tax credit in an amount up to one hundred percent (100%) of the state income tax liability;
3. 1. To provide the Department of Finance and Administration with a copy of each financial incentive plan entered into by the commission with each of the qualifying businesses so that the department will know the maximum amount of income tax credit the qualified business may claim during the term of the agreement.
   2. 1. The financial incentive plan shall specify the annual amount of payments, including principal and interest, the business will make to the lender in connection with the project financing and attach copies of the business’s loan documents that reflect the amount of the annual payments.
      2. For projects initiated after June 1, 2000, and which qualify for the incentives authorized by this subchapter regardless of financing, the financial incentive plan shall specify the amount of tax credit to be earned annually, based on estimates of total project investments, which shall be limited to land, buildings, and equipment and divided by the term of the financial incentive plan; and
4. To collect a one-time fee of two thousand five hundred dollars ($2,500) for the commission's administrative and legal fees associated with the preparation of the financial incentive plan.

History. Acts 1995, No. 831, § 3; 1999, No. 575, § 2; 2001, No. 975, §§ 8-10; 2019, No. 315, § 1068; 2019, No. 910, § 379.

Amendments. The 2019 amendment by No. 315 deleted “and regulations” following “rules” in (1).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (2)(B)(iv).

Meaning of “this act”. Acts 2001, No. 975, codified as §§ 15-4-1902, 15-4-1903, 15-4-1905, 15-4-1906.

15-4-1904. Qualifications.

To qualify for the benefits of this subchapter, the business must:

1. Be an eligible business as defined in § 15-4-1902;
2. Hire at least one hundred (100) net new full-time permanent employees within twenty-four (24) months of the date the financial incentive plan was signed by the Arkansas Economic Development Commission and the business;
3. Expend at least five million dollars ($5,000,000) on the project covered by the financial incentive plan;
4. Agree to certify to the Department of Finance and Administration the number of net new full-time permanent employees and the average hourly wage of the net new full-time permanent employees once the number of net new full-time permanent employees reaches one hundred (100); and
5. Agree to certify to the department within thirty (30) days after the number of net new full-time permanent employees falls below one hundred (100) or the average hourly wage falls below the amount specified in the financial incentive plan.

History. Acts 1995, No. 831, § 4; 1997, No. 807, § 16; 1999, No. 575, § 3.

15-4-1905. Financial incentive plan.

The financial incentive plan shall:

1. Specify the tax incentives the business is to receive, including the maximum amount of income tax credit the business may claim for each tax year covered by the financial incentive plan;
2. 1. Specify the term of the financial incentive plan, which cannot exceed ten (10) years.
   2. The ten (10) years shall be calculated from the date the financial incentive plan is signed by the business and the Arkansas Economic Development Commission;
3. Specify the annual tax credit earned based on total investment divided by the term of the financial incentive plan and attach copies of the business's loan documents which reflect the amount of the annual payments, or documents reflecting the amount of total investment in land, buildings, and equipment;
4. Specify the amount of the average hourly wage the business must maintain to receive benefits under the financial incentive plan;
5. Specify the percentage of income tax liability against which the income tax credit may be claimed;
6. Specify that the tax credits can never exceed the total amount of the debt service or for projects initiated after June 1, 2000, the total amount of the investment in land, buildings, and equipment; and
7. Specify that after the term of the financial incentive plan expires, the business may not claim any unused credit against income tax liability for subsequent tax years.

History. Acts 1995, No. 831, § 5; 2001, No. 975, §§ 11, 12.

15-4-1906. Refund of sales and use tax — Income tax credit.

1. 1. The Revenue Division of the Department of Finance and Administration shall authorize a refund of sales and use taxes imposed by the state and a municipality or county if the municipality or county authorized the refund of its local tax on the purchases of the material used in the construction of a building or buildings or any addition or improvement thereon for housing any legitimate business enterprise and machinery and equipment to be located in or in connection with such a building.
   2. A refund shall not be authorized for routine operating expenditures.
   3. 1. 1. A refund shall not be authorized for the purchase of replacements of items previously purchased as part of a project under this subchapter unless the items previously purchased will not enable the project to function as originally intended.
         2. In order to qualify for a refund under this subchapter, the replacement of an item previously purchased must be necessary for the implementation or completion of the project.
      2. However, a program participant may make changes in a project by amendment to the financial incentive plan entered into with the Arkansas Economic Development Commission.
   4. 1. All claims for sales and use tax refunds under this subchapter shall be filed with the division within three (3) years from the date of the qualified purchase or purchases.
      2. Claims filed after three (3) years from the date of the qualified purchase or purchases shall be disallowed.
   5. 1. The time limitation in this section for filing claims shall be tolled if:
         1. A program participant fails to pay sales or use tax on an item that was taxable; and
         2. The applicable tax is subsequently assessed as a result of an audit by the division.
      2. All claims for sales and use tax refunds relating to an audited purchase shall be filed with the division within one (1) year after payment of the assessed tax or the date of a final administrative or judicial order, whichever is later.
   6. A program participant that files a claim for a sales or use tax refund relating to an audited purchase shall be entitled to a refund of interest paid on the amount of tax assessed on the audited purchase if a refund is approved for the purchase.
2. 1. A sales and use tax refund as provided for in subsection (a) of this section shall be authorized, provided that:
      1. The company is an eligible business as defined in § 15-4-1902;
      2. The business and its contractors give preference and priority to Arkansas manufacturers, suppliers, contractors, and labor, except when it is not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operational efficiency; and
      3. 1. The business:
            1. Files an endorsement resolution with the commission and the Department of Finance and Administration; and
            2. Files with the department a copy of the financial incentive plan the business entered into with the commission.
         2. The endorsement resolution must be approved by the governing body of a municipality or county in whose jurisdiction the facility is located and must:
            1. Approve the specific entity's participation in the program; and
            2. 1. Specifically state whether the municipality or county authorizes the commission to refund local sales and use taxes to the entity under the program.
               2. A municipality or county can authorize the refund of all or part of a tax levied by it but cannot authorize the refund of any tax not levied by it.
            3. The business shall file an endorsement resolution with the commission and the Department of Finance and Administration. The endorsement resolution must be approved by the governing body of a municipality or county in whose jurisdiction the facility is located and must:
   2. 1. The requisite number of net new full-time permanent employees must be employed by the business within twenty-four (24) months following the date the financial incentive plan was signed.
      2. In the event that the requisite number of net new full-time permanent employees cannot be employed within the twenty-four-month period, the business can file a written application with the commission explaining why additional time is necessary. The business can be afforded up to twenty-four (24) more months to hire the requisite number of employees if the Director of the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State determine that the need for additional time is due to:
         1. Unanticipated and unavoidable delay in the construction of a facility that must be completed before the employees can be hired;
         2. The project as originally planned will require more than twenty-four (24) months to complete; or
         3. A change in the business ownership or business structure due to a merger or acquisition.
3. 1. 1. The division shall authorize an income tax credit based on the total investment in land, buildings, and equipment divided by the term of the financial incentive plan for each tax year.
      2. 1. The amount of income tax credit taken during any tax year shall not exceed the Arkansas income tax liability resulting from the project plant or facility.
         2. The income tax liability of the project plant or facility shall be determined by adding the sales factor, the payroll factor, and the property factor of the plant or facility and dividing the sum by three (3) to arrive at the project apportionment percentage. The total Arkansas corporate income tax liability of the corporation shall be multiplied by the project apportionment percentage to arrive at the income tax liability arising from the project.
         3. The income tax credit available may then be used to offset the income tax liability arising from the project as agreed upon in the financial incentive plan.
   2. However, if the entire credit cannot be used in the year earned, the remainder may be applied against the income tax for the succeeding nine (9) tax years or until the financial incentive plan expires, whichever occurs first.
4. An income tax credit as provided for in subsection (c) of this section shall be authorized, provided that:
   1. The request for such a credit is accompanied by an endorsement resolution approved by the governing body of the appropriate municipality or county in whose jurisdiction the establishment is to be located and a copy of the financial incentive plan the business entered into with the commission;
   2. All of the net new full-time permanent employees are employed at the facility; and
   3. Benefits for the same project are not being claimed under the Arkansas Economic Development Incentive Act of 1993, § 15-4-1601 et seq.
5. 1. 1. If the number of net new full-time permanent employees drops below one hundred (100) after twenty-four (24) months from the date the financial incentive plan is signed, all benefits under the financial incentive plan will be terminated unless the Chief Fiscal Officer of the State approves a written request filed by the business explaining why the number of net new full-time permanent employees fell below one hundred (100).
      2. The Chief Fiscal Officer of the State may grant the business up to twenty-four (24) months to bring the number of net new full-time permanent employees back up to at least one hundred (100) and may approve the continuation of the benefits during that period.
   2. In the event that a business fails to notify the department that the number of employees has fallen below one hundred (100) or that the average hourly wage has fallen below the amount specified in the financial incentive plan, the business will be liable for the repayment of all benefits which were received by the business, plus penalty and interest.
6. 1. Any business receiving benefits under this program shall be liable for the repayment of any benefits received, plus penalty and interest, if it does not comply with:
      1. The terms of the financial incentive plan;
      2. The requirements of this subchapter; or
      3. Any rule promulgated pursuant to this subchapter.
   2. The Chief Fiscal Officer of the State may bring any lawful action to recover any amount for which the recipient is liable.

History. Acts 1995, No. 831, § 6; 1997, No. 807, §§ 17, 18, 24; 1999, No. 575, § 4; 2001, No. 975, § 13; 2001, No. 1401, § 3; 2019, No. 315, § 1069; 2019, No. 910, § 380.

A.C.R.C. Notes. Acts 2001, No. 1401, § 1, provided:

“LEGISLATIVE INTENT. It is the intent of the General Assembly that expenditures for replacements of items previously purchased as part of a project and routine operating expenditures would not be eligible for benefits under the Arkansas Enterprise Zone Act of 1993, § 15-4-1701 et seq., or the Arkansas Economic Development Act of 1995, § 15-4-1901 et seq. These incentive program provisions are in need of clarification, and the purpose of the amendments in this act is to ensure that the original legislative intent is fulfilled.”

Amendments. The 2019 amendment by No. 315 deleted “or regulation” following “rule” in (f)(1)(C).

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the second sentence of the introductory language of (b)(2)(B).

15-4-1907. Verification.

1. The Department of Finance and Administration shall have the authority to obtain whatever information necessary from the participating businesses and from the Division of Workforce Services to verify that businesses which have entered into financial incentive plans with the Arkansas Economic Development Commission are complying with the terms of the financial incentive plans and reporting accurate information concerning the number of employees and their payroll to the department.
2. The department may promulgate rules and regulations necessary for the proper administration of the provisions of this subchapter.

History. Acts 1995, No. 831, § 7; 2019, No. 910, § 381.

Amendments. The 2019 amendment substituted “Division of Workforce Services” for “Department of Workforce Services” in (a).

15-4-1908. Effect of participation.

Receiving benefits for a project pursuant to this subchapter will preclude a business from receiving benefits under any other tax incentive program for that same project.

History. Acts 1995, No. 831, § 8.

Subchapter 20 — Digital Product and Motion Picture Industry Development Act of 2009

Publisher's Notes. Former subchapter 20 which consisted of §§ 15-4-2001 – 15-4-2012, concerning the Motion Picture Incentive Act of 1997, has been repealed and reenacted by Acts 2009, No. 816, § 1. Historical information has been kept when and where possible. Former §§ 15-4-2009 and 15-4-2010 were not reused but were derived from the following sources:

15-4-2009. Acts 1997, No. 919, § 9.

15-4-2010. Acts 1997, No. 919, § 10.

Effective Dates. Acts 1997, No. 919, § 16: Mar. 28, 1997. Emergency clause provided: “It is hereby found and determined by the General Assembly that the incentive afforded by this Act to the motion picture industry can serve to stimulate the economy of the area in which filming is done; and that the incentive has a multiplier effect, in terms of economic development, in the locality of the filming and statewide; and that tax revenues generated by the activities of motion picture filming more than offset the revenue lost through the incentive provided by this Act. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2009, No. 816, § 4: Apr. 3, 2009. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas the incentives afforded by this Act to the digital content industry can serve to stimulate the economy of the area in which production and postproduction is performed; and that the incentives have a multiplier effect, in terms of economic development, in the locality of the production and statewide; and that tax revenues generated by the activities of digital content production and postproduction more than offset the revenue lost through the incentives provided by this act. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-2001. Short title.

This subchapter may be referred to and cited as the “Digital Product and Motion Picture Industry Development Act of 2009”.

History. Acts 1997, No. 919, § 1; 2009, No. 816, § 1.

15-4-2002. Legislative intent.

It is the intent of the General Assembly to assist in cultivating the film industry by:

1. Providing the citizens of Arkansas with the education, training, and financial tools to succeed in today's global economy. The economic landscape of the state and the nation has moved from a manufacturing-based economy to one based on knowledge and technology, and to cultivate the state's economy based upon knowledge and technology, by further developing the film and digital content industry in Arkansas;
2. Providing the financial incentives needed to foster the long-term development of the digital medium and traditional film industry in Arkansas;
3. Recognizing that similar incentives in surrounding states have been a catalyst for unprecedented economic growth within those states and that to create an effective mechanism for the sustained growth of the film industry in Arkansas will require the passage of legislation that establishes a film production incentive program that is not only competitive but also uniquely attractive to specific types of projects, production companies, and infrastructure creation;
4. Recognizing that a successfully cultivated film industry will create a sector of high technology in Arkansas, a much-needed infusion of capital into areas of the state that may be economically depressed, and offer to Arkansans skilled labor employment opportunities that require knowledge and pay well;
5. Recognizing that the temporary revenue loss to seed the initial growth will be offset by the film and digital content industry's total value added to the Arkansas economy and directly offset through the state and local taxes collected on economic activity generated by the industry;
6. Allowing Arkansas to become competitive with surrounding states that offer financial incentives to the film and digital content industry;
7. Creating a vibrant film and digital content industry in Arkansas that will be essential to retain highly educated and creative individuals in Arkansas who want to pursue a career in this field;
8. Recognizing that the state is uniquely qualified to attract digital form product providers to live, work, and play within its borders due to the state's natural settings, availability of labor and materials, climate, and the hospitality of its people; and
9. Recognizing that the Motion Picture Incentive Act of 1983, previously codified at this subchapter, which was one of the first incentives offered to the motion picture industry and allowed the state and motion picture industry to develop a strong partnership, resulted in a significant increase in the number of movies filmed in Arkansas.

History. Acts 1997, No. 919, § 2; 2009, No. 816, § 1.

15-4-2003. Definitions.

As used in this subchapter:

1. “Application for rebate” means the document required by the Film Office to begin the process for obtaining a rebate under this subchapter;
2. 1. “Below-the-line employees” means employees involved with the production of a motion picture production, including without limitation:
      1. Casting assistants;
      2. Costume design;
      3. Gaffers;
      4. Grips;
      5. Location managers;
      6. Production assistants;
      7. Set construction staff; and
      8. Set design staff.
   2. “Below-the-line employees” does not include directors and producers;
3. 1. “Film and digital product” means video images or other visual media entertainment content.
   2. “Film and digital product” includes without limitation:
      1. Motion pictures;
      2. Documentaries;
      3. Long-form programs, specials, miniseries, series, music videos, and television programming;
      4. Interactive television;
      5. Interactive games;
      6. Video games;
      7. Commercials;
      8. Digital media created primarily for distribution or exhibition to the general public; and
      9. A trailer, pilot, video teaser, or demo created primarily to stimulate the sale, marketing, promotion, or exploitation of future investment in either a product or a qualified production through any means and media in a digital media format, film, or videotape if the program meets all the underlying criteria of a qualified production;
4. “Film Office” means the division of the Arkansas Economic Development Commission charged with the responsibility of promoting and assisting the digital content industry in Arkansas in order to enhance Arkansas as a land of opportunity for digital and motion picture filmmaking;
5. “Financial institution” means any bank or savings and loan association in the state that carries Federal Deposit Insurance Corporation insurance;
6. 1. “Highly compensated individual” means an individual who directly or indirectly receives compensation in excess of five hundred thousand dollars ($500,000) for personal services with respect to a single production.
   2. An individual receives compensation indirectly when a production company pays a personal service company or an employee-leasing company that pays the individual;
7. 1. “Postproduction” means a final stage in the production of digital content occurring after the action has been filmed or videotaped and involves editing and the addition of soundtracks.
   2. “Postproduction” includes without limitation editing, music, soundtracks, special effects, and credits;
8. “Postproduction costs” means all expenditures associated with the postproduction phase of a state-certified production within the state;
9. 1. “Production” means the process of producing a type of entertainment content and includes film and digital product.
   2. “Production” shall not include:
      1. An ongoing program created primarily as news, weather, or financial market reports;
      2. A production containing any material or performance that is obscene;
      3. A production deemed an infomercial; or
      4. Sexually explicit productions as defined in 18 U.S.C. § 2257, as it existed on January 1, 2009;
10. “Production company” means a corporation, partnership, limited liability company, or other business entity engaged in the business of producing qualified productions and qualified by the Secretary of State to engage in business in the state;
11. 1. “Qualified production costs” means costs associated with the development, preproduction, production, or postproduction of a qualified production within the state.
    2. “Qualified production costs” includes costs associated with original music compositions produced by an Arkansas resident to be used as incidental music, the score, or the soundtrack in film or video games.
    3. “Qualified production costs” includes the cost to option or purchase intellectual property, including without limitation books, scripts, music, or trademarks relating to the development or purchase of a script, screenplay, or format if:
       1. The intellectual property was produced primarily in Arkansas or the creator of the intellectual property is a resident of Arkansas;
       2. At least seventy-five percent (75%) of the subsequent film or digital content is produced in Arkansas; and
       3. The production expenses or costs for the optioning or purchase are less than twenty-five percent (25%) of the production expenses or costs incurred in Arkansas. The expenses or costs include all expenditures associated with the optioning or purchase of intellectual property, including option money, agent fees, and attorney's fees relating to the transaction but do not include deferrals, deferments, royalties, profit participation, or recourse or nonrecourse loans that the eligible production company may negotiate in order to obtain the rights to the intellectual property.
    4. “Qualified production costs” does not include:
       1. The optioning or purchase of intellectual property that does not comply with the provisions of subdivision (9)(A) of this section;
       2. Media buys, promotional events, or gifts or public relations associated with the promotion or marketing of any qualified production;
       3. Deferred, leveraged, or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including without limitation producer fees, director fees, talent fees, and writer fees; and
       4. Amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the qualified production;
12. “Resident” means natural persons and includes, for the purpose of determining eligibility for the rebate incentive provided by this subchapter, a person domiciled in Arkansas and any other person who maintains a permanent residence within the state and spends in the aggregate at least six (6) months of the taxable year within the state; and
13. “State-certified production” means a qualified production produced by an eligible production company that is:
    1. In compliance with established rules to this subchapter;
    2. Authorized by the Film Office to conduct business in this state; and
    3. Approved by the Director of the Arkansas Economic Development Commission as qualifying for a discretionary production rebate under this subchapter.

History. Acts 1997, No. 919, § 3; 2009, No. 816, § 1; 2013, No. 496, §§ 1-6; 2019, No. 367, § 1.

Amendments. The 2013 amendment added new (1) and redesignated existing subdivisions; in present (2)(B), deleted “actors” preceding “directors” and “and writers” following “producers”; in present (4), substituted “Commission” for “Council” and added “in order to enhance Arkansas as a land of opportunity for digital and motion picture filmmaking”; in present (8), substituted “associated with” for “incurred in the state in” and added “within the state”; in present (11)(A), substituted “associated with” for “incurred in Arkansas in” and added “within the state” at the end; in (11)(B), substituted “associated with” for “incurred concerning”; in (11)(D)(iii), substituted “without limitation” for “but not limited to”; deleted (11)(D)(v); substituted “rules” for “regulations” in (13)(A); and substituted “Film Office” for “commission” in (13)(B) and (C).

The 2019 amendment, in (13)(C), substituted “Director of the Arkansas Economic Development Commission” for “Film Office”, and inserted “discretionary”.

15-4-2004. Requirement for registration.

1. A production company that plans to operate within the borders of Arkansas shall register with the Film Office before beginning operations.
2. 1. Upon registration and signing a financial incentive agreement, the production company shall include the name of Arkansas in the credits.
   2. The Director of the Arkansas Economic Development Commission may waive this requirement if he or she determines that the state should not be acknowledged.

History. Acts 1997, No. 919, § 4; 2009, No. 816, § 1; 2019, No. 910, § 382.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b)(2).

15-4-2005. Production rebate.

1. 1. The Director of the Arkansas Economic Development Commission may offer to a production company that has submitted an application under § 15-4-2007 a rebate of up to twenty percent (20%) on all qualified production costs in connection with the production of a state-certified film project.
   2. If the director approves a project for a rebate under this section, an additional rebate of ten percent (10%) shall be granted for the payroll of below-the-line employees who are full-time residents of Arkansas.
2. To qualify for this rebate, a production company shall spend at least two hundred thousand dollars ($200,000) within a six-month period in connection with the production of one (1) project.
3. A production rebate shall not be processed until the production company has met in full all obligations to each Arkansas institution and vendor owed for products or services in the state.

History. Acts 1997, No. 919, § 5; 2009, No. 816, § 1; 2013, No. 496, § 7; 2019, No. 367, § 2.

Amendments. The 2013 amendment substituted “twenty percent (20%)” for “fifteen percent (15%)” in (a)(1); rewrote (b); and added (c).

The 2019 amendment rewrote (a).

15-4-2006. Postproduction rebate.

1. 1. The Director of the Arkansas Economic Development Commission may offer to a qualifying production company that has submitted an application under § 15-4-2007 a rebate of up to twenty percent (20%) on all qualified production costs in connection with the postproduction of a state-certified film project.
   2. If the director approves a project for a rebate under this section, an additional rebate of ten percent (10%) shall be granted for the payroll of below-the-line employees who are full-time residents of Arkansas.
2. To qualify for this rebate, a production company must spend at least fifty thousand dollars ($50,000) within a six-month period in connection with the production of one (1) project.
3. A postproduction rebate shall not be processed until the production company has met in full all obligations to each Arkansas institution and vendor owed for products or services in the state.

History. Acts 2009, No. 816, § 1; 2013, No. 496, § 7; 2019, No. 367, § 3.

Amendments. The 2013 amendment substituted “twenty percent (20%)” for “fifteen percent (15%)” in (a)(1); and added (c).

The 2019 amendment rewrote (a)(1); and added “If the executive director approves a project for a rebate under this section” in (a)(2).

15-4-2007. Application for rebate.

1. 1. To apply for the rebates provided under this subchapter, a production company shall submit an application and provide an estimate of total expenditures to be made in Arkansas in connection with the production.
   2. The application and estimate of expenditures required under subdivision (a)(1) of this section shall be filed with the Arkansas Economic Development Commission and approved by the Director of the Arkansas Economic Development Commission as eligible for the rebate provided by this subchapter before the commencement of production in Arkansas.
2. 1. If an application for a rebate is approved under subsection (a) of this section, the production company and the director shall sign a financial incentive agreement.
   2. 1. The financial incentive agreement shall define the incentives to be received and the start and end date of the project.
      2. The financial incentive agreement shall include the:
         1. Effective date of the financial incentive agreement;
         2. Term of the financial incentive agreement, which shall be calculated from the date the agreement is signed by the production company and the director;
         3. Incentive for which the production company may qualify;
         4. Investment threshold requirements necessary to qualify for eligibility;
         5. Production company's responsibilities for certifying eligibility requirements; and
         6. Production company's responsibilities for failure to meet or maintain eligibility requirements.
3. At the time the production company registers and provides the estimate of expenditures to the commission, the production company also shall designate a member or representative to work with the commission and the Film Office on the reporting of expenditures and other information necessary to qualify for the rebate.
4. No later than one hundred eighty (180) days after the last production expenses or costs are incurred in the production of a qualified production, the production company shall:
   1. Apply to the commission for a production rebate certificate; and
   2. Provide a final expenditure report that includes the amount of the production company's production expenses or costs.
5. 1. Production companies are encouraged to make payments for production and postproduction expenses from a checking account from an Arkansas financial institution.
   2. Direct cash payments by a production company to Arkansas vendors, businesses, or citizens hired as cast or crew that are accompanied by receipts may be allowed if the sum of the cash payments does not exceed forty percent (40%) of the total verifiable expenditures.
   3. The following are eligible expenditures:
      1. Per diem expenditures by the cast or crew for lodging when accompanied by receipts; and
      2. Fringe contributions being paid for work performed in this state, including:
         1. Health benefits;
         2. Pension contributions;
         3. Welfare contributions;
         4. Stipends; and
         5. Living allowances.
6. Expenditure reports also shall include information as required by the Revenue Division of the Department of Finance and Administration to ensure compliance with this subchapter.
7. Payments for salaries or wages shall be eligible for the rebate if they are reported to the division and are subject to state income taxes.
8. 1. If approved by the director, the employment rebate also entitles a state-certified production to an additional rebate for employing full-time residents of Arkansas.
   2. The employment rebate authorizes an additional credit of ten percent (10%) for the aggregate payroll of salaries and wages to Arkansas residents who are below-the-line employees of the state-certified production.
9. If approved by the director, the employment rebate may include the first five hundred thousand dollars ($500,000) of a highly compensated individual's salary.
10. Payments for penalties or fines, payments to nonprofit organizations, and payments to federal and state entities that do not pay state taxes are not eligible.
11. If a production company hires a payroll service company to handle the payroll of a production, the payroll payments otherwise allowable may be allowed as eligible expenditures if all eligible income payments to employees and independent contractors done through the payroll service are subject to Arkansas state income taxes.
12. 1. 1. Within two (2) weeks after principal photography begins, the production company shall begin filing weekly expenditure reports.
       2. Failure to file weekly expenditure reports may result in a delay in the disbursement of the rebate provided in §§ 15-4-2005 and 15-4-2006.
    2. The weekly expenditure report shall be filed in accordance with but shall not be limited to the following:
       1. Direct cash payments by the production company to Arkansas vendors, businesses, or citizens hired as cast or crew that are accompanied by receipts shall be allowed if the sum of those cash payments does not exceed forty percent (40%) of the total verifiable expenditures;
       2. Per diem expenditures by cast or crew, or both, for lodging, when accompanied by receipts, shall be allowed as eligible expenditures; and
       3. Expenditure reports shall include without limitation:
          1. Check identification number;
          2. Date of payment;
          3. Name of payee;
          4. Address of payee;
          5. Amount paid; and
          6. Other information the division deems necessary to ensure compliance with this subsection.
13. When a production company hires a food catering service company that is located outside the state, payments otherwise allowable that are made by the out-of-state food catering service to food businesses located in Arkansas shall be allowed as eligible expenditures.
14. 1. Upon completion of filming or production, or both, in Arkansas, the production company shall file an application for the rebate allowed under this subchapter.
    2. The application for rebate shall include a proof of performance expenditure list that provides the total amount of expenditures that were made in the state in connection with the filming or production, or both, of a film and digital product that complies with this subchapter.
    3. The production company shall provide documentation for expenditures in accordance with rules promulgated by the commission.

History. Acts 1997, No. 919, § 6; 2009, No. 816, § 1; 2013 No. 496, § 7; 2019, No. 367, §§ 4-7; 2019, No. 910, § 383.

Amendments. The 2013 amendment rewrote the section.

The 2019 amendment by No. 367 substituted “apply” for “qualify” in (a)(1); in (a)(2), inserted “required under subdivision (a)(1) of this section”, and inserted “by the Executive Director of the Arkansas Economic Development Commission”; in the introductory language of (b)(1), substituted “If an application for a rebate is approved under subsection (a) of this section, the production company and the executive director” for “After each production company submits an application, the commission”, and deleted “with each eligible production company that qualifies under this subchapter and is approved by the commission” following “agreement” at the end; substituted “incentives” for “benefits” in the introductory language of (b)(2)(A); inserted “financial incentive” in (b)(2)(B)(i) and (ii); substituted “executive director” for “Executive Director of the Arkansas Economic Development Commission” in (b)(2)(A)(ii); substituted “may” for “shall” in (e)(2), (i), and (k); added “If approved by the executive director” in the introductory language of (h)(1) and (i); inserted “allowed as” in (l)(2)(B); substituted “commission” for “Film Office” in (n)(3); and made stylistic changes.

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b)(2)(B)(ii).

15-4-2008. Disbursement of rebate incentive.

1. The Revenue Division of the Department of Finance and Administration shall upon receipt of an application for a rebate, including a proof of performance expenditure report from the Film Office:
   1. Calculate the total expenditures of the relevant production company for which there are documented receipts for funds expended in the state;
   2. Calculate the incentive benefit to which the applicant is entitled, subject to any conditions of the approved financial incentive agreement; and
   3. Provide certification to the Secretary of the Department of Finance and Administration specifying the amount to be remitted to the production company within one hundred twenty (120) days after the final expenditure report has been submitted.
2. The secretary, within ten (10) working days after the receipt of the certification from the division, shall remit the rebate to:
   1. The production company; or
   2. At the option of the production company, the full amount or a specified amount noted by the production company to the:
      1. National Film Preservation Foundation;
      2. Motion Picture Retirement Fund; or
      3. Digital Product and Motion Picture Office Fund.
3. 1. The amount of the rebate is limited to the amount specified in the approved financial incentive agreement.
   2. The rebate shall be awarded on a first-come, first-served basis.
   3. Rebates to be awarded from the Digital Product and Motion Picture Office Fund may be payable from any source of funds allocated for the rebates.

History. Acts 1997, No. 919, § 7; 2009, No. 816, § 1; 2013, No. 496, § 7; 2019, No. 367, §§ 8, 9; 2019, No. 910, §§ 3398, 3399.

Amendments. The 2013 amendment rewrote the introductory language of (a); substituted “one hundred twenty (120) days” for “ninety (90) days” in (a)(3); deleted “fifteen-percent” preceding “rebate” in the introductory language of (b); and added (c)(3).

The 2019 amendment by No. 367 inserted “subject to any conditions of the approved financial incentive agreement” in (a)(2); and rewrote (c)(1).

The 2019 amendment by No. 910 substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration” in (a)(3); and substituted “secretary” for “director” in (b).

Cross References. Digital Product and Motion Picture Office Fund, § 19-6-814.

15-4-2009. Penalties.

1. A production company that intends to apply for the rebate and does not register as required by § 15-4-2004 may be enjoined from engaging in production activities in the state by any court of competent jurisdiction until the production company has registered.
2. A production company that intends to apply for the rebate incentives and fails to comply with this subchapter may be denied future participation in this incentive program and shall be subject to penalty in accordance with applicable state or federal law.

History. Acts 1997, No. 919, § 8; 2009, No. 816, § 1.

15-4-2010. Rules.

The Arkansas Economic Development Commission shall promulgate appropriate rules to carry out the intent and purposes of this subchapter and to prevent abuse.

History. Acts 1997, No. 919, § 12; 2009, No. 816, § 1.

15-4-2011. Sunset.

The opportunity for a rebate provided by this subchapter shall expire on June 30, 2029.

History. Acts 1997, No. 919, § 11; 2009, No. 816, § 1; 2019, No. 367, § 10.

Amendments. The 2019 amendment substituted “2029” for “2019”.

Subchapter 21 — Arkansas Emerging Technology Development Act of 1999

15-4-2101 — 15-4-2107. [Repealed.]

Publisher's Notes. This subchapter concerning the Arkansas Emerging Technology Act of 1999 was repealed by Acts 2009, No. 716, § 2. The subchapter was derived from the following sources:

15-4-2101. Acts 1999, No. 976, § 1; 2001, No. 1284, § 1.

15-4-2102. Acts 1999, No. 976, § 2; 2001, No. 1284, § 2.

15-4-2103. Acts 1999, No. 976, § 3; 2001, No. 1284, § 3.

15-4-2104. Acts 1999, No. 976, § 4; 2001, No. 1284, § 4.

15-4-2105. Acts 1999, No. 976, § 5; 2001, No. 1284, § 5.

15-4-2106. Acts 1999, No. 976, § 6.

15-4-2107. Acts 1999, No. 976, § 7.

Subchapter 22 — Arkansas Workforce Investment Act

15-4-2201 — 15-4-2212. [Repealed.]

A.C.R.C. Notes. Section 15-4-2204 was amended by Acts 2015, No. 1100, § 12. However, § 15-4-2204 was specifically repealed by Acts 2015, No. 907, § 4.

Publisher's Notes. This subchapter, concerning the Arkansas Workforce Investment Act, was repealed by Acts 2015, No. 907, § 4. The sections were derived from the following sources:

15-4-2201. Acts 1999, No. 1125, § 1.

15-4-2202. Acts 1999, No. 1125, § 2.

15-4-2203. Acts 1999, No. 1125, § 3.

15-4-2204. Acts 1999, No. 1125, § 4; 2001, No. 1650, § 6; 2003, No. 1758, § 1; 2009, No. 1487, § 2; 2015, No. 1100, § 12.

15-4-2205. Acts 1999, No. 1125, § 5; 2005, No. 1171, § 1; 2005, No. 1962, § 60; 2007, No. 827, § 131; 2011, No. 818, § 1.

15-4-2206. Acts 1999, No. 1125, § 6; 2013, No. 1149, § 1.

15-4-2207. Acts 1999, No. 1125, § 7.

15-4-2208. Acts 1999, No. 1125, § 8; 2005, No. 1962, § 61.

15-4-2209. Acts 1999, No. 1125, § 9; 2003, No. 1758, § 2; 2011, No. 818, § 2.

15-4-2210. Acts 1999, No. 1125, § 10.

15-4-2211. Acts 1999, No. 1125, § 11; 2011, No. 818, § 3.

15-4-2212. Acts 1999, No. 1125, § 12.

For current law, see the Arkansas Workforce Innovation and Opportunity Act, § 15-4-3701 et seq.

Subchapter 23 — Arkansas Public Roads Improvements Credit Act

Effective Dates. Acts 1999, No. 1347, § 5: Apr. 12, 1999. Emergency clause provided: “It is hereby found and determined by the Eighty-second General Assembly that the State's program for capital improvements for public roads and financing thereof is inadequate, that the economic and other benefits to the state and its people resulting from capital improvements are essential to the people of Arkansas, and that providing tax credits to taxpayers for contributions in aid of construction of public roads will encourage public and private participation and thereby promote the economic welfare of this state and its people and the public interest. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-2301. Title.

This subchapter may be referred to and cited as the “Arkansas Public Roads Improvements Credit Act”.

History. Acts 1999, No. 1347, § 1.

15-4-2302. Legislative intent.

The General Assembly finds and declares that:

1. The state's program for capital improvements for public roads projects and the financing of those projects is inadequate;
2. The economic and other benefits to the state and its people resulting from capital improvements for public roads projects are essential to the public health, safety, and welfare of the people of Arkansas; and
3. Providing tax credits to taxpayers for contributions in aid of construction of capital improvements for public roads projects will encourage public and private participation in these capital improvement projects, will promote the economic welfare of this state and its people, and is in the public interest.

History. Acts 1999, No. 1347, § 1.

15-4-2303. Definitions.

As used in this subchapter:

1. “Capital improvements” means capital improvements for public roads;
2. “Commission” means the Arkansas Economic Development Commission;
3. “Contribution” means a contribution in aid of construction of a public roads project made by a taxpayer to the Public Roads Incentive Fund;
4. “Council” means the Arkansas Economic Development Council;
5. “County” means any county in the State of Arkansas;
6. [Repealed.]
7. “Fund” means the Public Roads Incentive Fund;
8. “Governing authority” means the quorum court of a county, the governing body of a municipality, and the State Highway Commission;
9. “Municipality” means any city or incorporated town in the State of Arkansas;
10. “Project” means all, any combination, or any part of the capital improvements for public roads which are authorized by a governing authority and approved by the Director of the Arkansas Economic Development Commission;
11. “Public roads” means roads maintained by a governing authority; and
12. “Taxpayer” includes any individual, fiduciary, or corporation subject to Arkansas state income tax.

History. Acts 1999, No. 1347, § 1; 2019, No. 910, §§ 384, 385.

Amendments. The 2019 amendment repealed (6); and substituted “Director of the Arkansas Economic Development Commission” for “executive director” in (10).

15-4-2304. Approval of projects.

Governing authorities may apply to the Director of the Arkansas Economic Development Commission for funding assistance for capital improvement projects for public roads as provided by this subchapter. The director is authorized to approve capital improvements for funding assistance upon a finding that a project is in the public interest.

History. Acts 1999, No. 1347, § 1; 2019, No. 910, § 386.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the first sentence; and deleted “executive” preceding “director” in the second sentence.

15-4-2305. Public Roads Incentive Fund.

1. There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Public Roads Incentive Fund” of the Arkansas Economic Development Council.
2. The fund shall consist of contributions made by taxpayers for public roads projects approved by the Director of the Arkansas Economic Development Commission and any other funds as are designated or deposited to the fund by law.
3. 1. A separate account shall be established for each project, and contributions for a project shall be applied to provide funding assistance for such a project.
   2. Any contributions which remain in the fund when a project is completed or terminated shall be held and applied to other public roads projects in such manner as the director shall direct.

History. Acts 1999, No. 1347, § 1; 2019, No. 910, §§ 387, 388.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b); and deleted “executive” preceding “director” in (c)(2).

Cross References. Public Roads Incentive Fund, § 19-5-1097.

15-4-2306. Tax credit.

1. A taxpayer shall be entitled to a credit against any Arkansas income tax liability which may be imposed on the taxpayer for any tax year commencing on or after January 1, 1999, for contributions transmitted to the Treasurer of State pursuant to this subchapter.
2. The credit shall be determined in the following manner:
   1. The credit is limited to an amount not to exceed thirty-three percent (33%) of the taxpayer's contribution;
   2. In any one (1) tax year, the credit allowed by this section shall not exceed fifty percent (50%) of the net Arkansas state income tax liability of the taxpayer after all other credits and reductions in tax have been calculated; and
   3. Any credit in excess of the amount allowed by subdivision (b)(2) of this section for any one (1) tax year may be carried forward and applied against any Arkansas state income tax liability for the next-succeeding tax year and annually thereafter for a total period of three (3) years next succeeding the year in which the credit arose, subject to the provisions of subdivision (b)(2) of this section or until the credit is exhausted, whichever occurs first.

History. Acts 1999, No. 1347, § 1.

15-4-2307. Powers and duties of the Arkansas Economic Development Commission.

The Arkansas Economic Development Commission shall administer the provisions of this subchapter and shall have the following powers and duties, in addition to those mentioned in this subchapter and in other laws of this state:

1. To monitor the implementation and operation of this subchapter and to conduct a continuing evaluation of the progress made;
2. To assist the governing authority in obtaining assistance from any other department of state government;
3. To submit an annual written report evaluating the effectiveness of the program and presenting any suggestions for improving the program, to be submitted to the Governor no later than March 1 of each year; and
4. To promulgate rules in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., necessary to carry out the provisions of this subchapter.

History. Acts 1999, No. 1347, § 1; 2019, No. 315, § 1070.

Amendments. The 2019 amendment deleted “and regulations” following “rules” in (4).

Subchapter 24 — Steel Manufacturers' Tax Exemptions and Credits

Cross References. Steel Mill Tax Incentives, § 26-52-901 et seq.

Effective Dates. Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-2401. Definitions.

As used in this subchapter:

1. “Invested” includes, but is not limited to, expenditures made from the proceeds of bonds, including interim notes or other evidence of indebtedness, issued by a municipality, county, or an agency or instrumentality of a municipality, county, or the State of Arkansas, if the obligation to repay the bonds, including interest thereon, is a legally binding obligation, directly or indirectly, of the taxpayer;
2. “Production, processing, and testing equipment” includes machinery and equipment essential for the receiving, storing, processing, and testing of raw materials and the production, storage, testing, and shipping of finished products, and facilities for the production of steam, electricity, chemicals, and other materials that are essential to the manufacturing process but which are consumed in the manufacturing process and do not become essential components of the finished product; and
3. “Qualified manufacturer of steel” means any natural person, company, or corporation engaged in the manufacture, refinement, or processing of steel whenever more than fifty percent (50%) of the electricity or more than fifty percent (50%) of the natural gas consumed in the manufacture, refinement, or processing of steel is used to power an electric arc furnace or furnaces, continuous casting equipment, or rail steel mill equipment in connection with the melting, continuous casting, or rolling of steel or in the preheating of steel for processing through a rail steel mill.

History. Acts 2001, No. 541, § 1.

15-4-2402. Certification required.

To claim the benefits of this subchapter, a taxpayer must obtain a certification prior to December 31, 2006, from the Executive Director of the Arkansas Economic Development Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer:

1. Is a qualified manufacturer of steel;
2. Operates a steel mill in Arkansas which began production after January 1, 2001; and
3. Has invested after January 1, 2001, and prior to December 31, 2006, more than two hundred million dollars ($200,000,000) in a steel mill, and the investment expenditure is for one (1) or more of the following:
   1. Property purchased for use in the construction of a building or buildings or any addition or improvement thereon to house the steel mill;
   2. 1. Machinery and equipment to be located in or in connection with the steel mill.
      2. Motor vehicles of a type subject to registration shall not be considered as machinery and equipment; and
   3. Project planning costs or construction labor costs, including:
      1. On-site direct labor and supervision, whether employed by a contractor or the project owner;
      2. Architectural fees or engineering fees, or both;
      3. Right-of-way purchases;
      4. Utility extensions;
      5. Site preparation;
      6. Parking lots;
      7. Disposal or containment systems;
      8. Water and sewer treatment systems;
      9. Rail spurs;
      10. Streets and roads;
      11. Purchase of mineral rights;
      12. Land;
      13. Buildings;
      14. Building renovation;
      15. Production, processing, and testing equipment;
      16. Drainage systems;
      17. Water tanks and reservoirs;
      18. Storage facilities;
      19. Equipment rental;
      20. Contractor's cost-plus fees;
      21. Builders' risk insurance;
      22. Original spare parts;
      23. Job administrative expenses;
      24. Office furnishings and equipment;
      25. Rolling stock; and
      26. Capitalized start-up costs related to the construction.

History. Acts 2001, No. 541, § 2.

15-4-2403. Exemption from taxes.

Sales of natural gas and electricity to taxpayers qualified to receive the benefits of this subchapter for use in connection with the steel mill shall be exempt from the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and any other state or local tax administered under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.

History. Acts 2001, No. 541, § 3.

15-4-2404. Net operating loss deduction — Carry forward.

1. Taxpayers qualified for the benefits of this subchapter and entitled to a net operating loss deduction as provided in § 26-51-427 may carry forward that deduction to the next-succeeding taxable year following the year of the net operating loss and annually thereafter for a total period of ten (10) years or until the net operating loss has been exhausted, whichever is earlier.
2. The net operating loss deduction must be carried forward in the order named in subsection (a) of this section.

History. Acts 2001, No. 541, § 4.

15-4-2405. Extension of recycling tax credit — Postconsumer waste.

1. 1. A qualified manufacturer of steel which has been certified by the Executive Director of the Arkansas Economic Development Commission after January 1, 2001, and prior to December 31, 2006, as qualifying for the benefits of this subchapter and has qualified for the income tax credit for the purchase of waste reduction, reuse, or recycling equipment provided by § 26-51-506, may carry forward any unused income tax credit earned under § 26-51-506 for a period of fourteen (14) consecutive years following the taxable year in which the credit originated.
   2. Income tax credits which would otherwise expire during that period shall first be used.
2. In the case of a qualified manufacturer of steel as described in subsection (a) of this section:
   1. The term “waste reduction, reuse, or recycling equipment” as defined in § 26-51-506 shall include production, processing, and testing equipment used to manufacture products containing recovered materials; and
   2. 1. The provisions of § 26-51-506(d)(4) shall not apply.
      2. However, the qualified manufacturer of steel shall make a good faith effort to use recovered materials containing Arkansas post-consumer waste as a part of the materials used.

History. Acts 2001, No. 541, § 5.

15-4-2406. Refund of recycling tax credit.

1. 1. In the case of a qualified manufacturer of steel as described in § 15-4-2405(a), the provisions of § 26-51-506(f) shall not apply.
   2. However, the qualified manufacturer of steel shall refund the amount of the tax credit provided by subsection (b) of this section if within three (3) years of the taxable year in which the credit originated:
      1. 1. The waste reduction, reuse, or recycling equipment is removed from Arkansas, disposed of, or transferred to another person, or the qualified manufacturer of steel otherwise ceases to use the required materials or operate in accordance with § 26-51-506.
         2. However, reorganization transactions, changes of ownership and control, and sales and transfers of waste reduction, reuse, or recycling equipment among affiliates which do not constitute sales or transfers to a third-party purchaser shall not be considered disposals, transfers, or cessations of use for purposes of § 26-51-506; or
      2. The Director of the Division of Environmental Quality finds that the qualified manufacturer of steel has operated the waste reduction, reuse, or recycling equipment in a manner which demonstrates a pattern of intentional failure to comply with final administrative or judicial orders which clearly indicates a disregard for environmental regulation.
2. If the provisions of subsection (a) of this section apply, the qualified manufacturer of steel shall refund the amount of the tax credit which was deducted from income tax liability which exceeds the following amounts:
   1. Within the first year, zero dollars ($0.00);
   2. Within the second year, an amount equal to thirty-three percent (33%) of the amount of credit allowed; and
   3. Within the third year, an amount equal to sixty-seven percent (67%) of the credit allowed.
3. Any refund required by subdivision (a)(2)(A) of this section shall apply only to the credit given for the particular waste reduction, reuse, or recycling equipment to which subdivision (a)(2)(A) of this section applies.
4. Any taxpayer who is required to refund part of a credit pursuant to this section shall no longer be eligible to carry forward any amount of that credit which had not been used as of the date the refund is required.
5. Any person or legal entity aggrieved by a decision of the director under this section may appeal to the Arkansas Pollution Control and Ecology Commission through administrative procedures adopted by the commission and to the courts in the manner provided in §§ 8-4-222 — 8-4-229.

History. Acts 2001, No. 541, § 6; 2019, No. 910, § 3042.

Amendments. The 2019 amendment substituted “Division of Environmental Quality” for “Arkansas Department of Environmental Quality” in (a)(2)(B).

15-4-2407. Apportionment of credit amount.

In the case of a qualified manufacturer of steel as described in § 15-4-2405(a) which is:

1. A proprietorship, partnership, or other business organization treated as a proprietorship or partnership for tax purposes, the amount of the credit determined under this subchapter for any taxable year shall be apportioned to each proprietor, partner, member, or other owner in proportion to the amount of income from the entity which the proprietor, partner, member, or other owner is required to include in gross income;
2. A Subchapter S corporation, the amount of credit determined shall be apportioned to each Subchapter S corporation shareholder in proportion to the amount of income from the entity which the Subchapter S corporation shareholder is required to include as gross income; or
3. An estate or trust:
   1. The amount of the credit determined for any taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each; and
   2. Any beneficiary to whom any amount has been apportioned under this subchapter shall be allowed, subject to the limitations contained in this subchapter, a credit under this subchapter for that amount.

History. Acts 2001, No. 541, § 7.

A.C.R.C. Notes. The reference to Subchapter S in this section is a reference to Subchapter S of the Internal Revenue Code, codified at 26 U.S.C. § 1361 et seq.

Subchapter 25 — Small Business Loan Collaboration Program

A.C.R.C. Notes. Acts 2001, No. 913, § 1, provided:

“Nothing in this act shall be construed to terminate or in any way interfere with the continuing operations of the program established under Act 448 of 1999 before the effective date of this act.”

Effective Dates. Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-2501. Definitions.

As used in this subchapter:

1. “Commission” means the Arkansas Economic Development Commission;
2. “Community lender” means any organization that is involved in making loans to small businesses within this state;
3. “Council” means the Arkansas Economic Development Council;
4. [Repealed.]
5. 1. “High unemployment” means an unemployment rate equal to or greater than one hundred fifty percent (150%) of the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the Division of Workforce Services, when the state's annual average unemployment is six percent (6%) or lower.
   2. However, when the state's unemployment rate is above six percent (6%), “high unemployment” means unemployment equal to or greater than three percent (3%) above the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the division;
6. “Small business” means business enterprises with fewer than fifty (50) full-time employees and less than one million dollars ($1,000,000) in annual gross sales or receipts; and
7. “Small-business person” means an individual, firm, partnership, limited liability company, corporation, or any other business entity in any form that owns and operates a small business.

History. Acts 2001, No. 913, § 2; 2005, No. 892, § 1; 2019, No. 910, §§ 389, 390.

Amendments. The 2005 amendment deleted “not for profit or governmental” following “means any” in (2).

The 2019 amendment repealed (4); and substituted “Division of Workforce Services” for “Department of Workforce Services” in (5)(A).

15-4-2502. Fifty-percent loan subsidy program.

1. The Arkansas Economic Development Commission shall institute a program to make participation loans that are originated by approved community lenders for small businesses in this state.
2. The commission's participating share of any qualified loan shall not exceed fifty percent (50%) of the total loan amount, and the commission's share shall be in an amount not less than two thousand five hundred dollars ($2,500) and not more than forty thousand dollars ($40,000).
3. The commission shall share on a pari passu basis with the originating community lender all collateral, guarantees, repayments, and recoveries on loans made in this program.
4. The commission shall give preference to high-unemployment counties.

History. Acts 2001, No. 913, § 3.

15-4-2503. Lender application — Approval.

1. Any community lender that desires to seek participating loans from the Arkansas Economic Development Commission pursuant to the program authorized by this subchapter shall make application to the commission.
2. Approval of any participating community lender shall be done by action of the Arkansas Economic Development Council.

History. Acts 2001, No. 913, § 4.

15-4-2504. Supporting documents.

Each community lender requesting a participating loan shall submit to the Arkansas Economic Development Commission an application, supporting documents, and instruments as may be required by the rules promulgated by the commission.

History. Acts 2001, No. 913, § 5; 2019, No. 315, § 1071.

Amendments. The 2019 amendment substituted “rules” for “regulations”.

15-4-2505. Duty to seek collaboration.

The Arkansas Economic Development Commission shall:

1. Actively seek support from and collaboration with statewide financial institutions, the Arkansas Credit Union League, United States Small Business Administration, Arkansas Bankers Association, Arkansas Development Finance Authority, and other agencies interested in supporting small business efforts in the state; and
2. Provide small business persons with:
   1. Assistance and resources for preparation of business plans available through the commission and other agencies;
   2. Information about services available through the commission;
   3. Information about financial institutions and agencies that have agreed to support and collaborate with the program authorized by this subchapter;
   4. Continuing assistance after a loan is made; and
   5. Information on training programs or technical assistance to include instructions on the importance of establishing and maintaining credit, seeking and obtaining state licenses and contracts, and business planning and management.

History. Acts 2001, No. 913, § 6.

15-4-2506. Rules.

The Arkansas Economic Development Commission shall promulgate rules to implement this subchapter.

History. Acts 2001, No. 913, § 7; 2019, No. 315, § 1072.

Amendments. The 2019 amendment substituted “Rules” for “Regulations” in the section heading and substituted “rules” for “regulations” in the text.

Subchapter 26 — Arkansas Delta Development Commission

15-4-2601 — 15-4-2608. [Repealed.]

Publisher's Notes. This subchapter concerning the Arkansas Delta Development Commission was repealed by Acts 2009, No. 1484, § 4. The subchapter was derived from the following sources:

15-4-2601. Acts 2001, No. 1601, § 1.

15-4-2602. Acts 2001, No. 1601, §§ 2, 3.

15-4-2603. Acts 2001, No. 1601, § 4.

15-4-2604. Acts 2001, No. 1601, § 5.

15-4-2605. Acts 2001, No. 1601, § 6.

15-4-2606. Acts 2001, No. 1601, § 7.

15-4-2607. Acts 2001, No. 1601, § 8.

15-4-2608. Acts 2001, No. 1601, § 9.

Subchapter 27 — Consolidated Incentive Act of 2003

Effective Dates. Acts 2003, No. 182, § 2: Mar. 3, 2003. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Constitution of the State of Arkansas prohibits the appropriation of funds for more than a two (2) year period; that the effectiveness of this act on July 1, 2003, is essential to the economic incentives of the Department of Economic Development provided in this act, and that in the event of an extension of the regular session, the delay in the effective date of this act beyond July 1, 2003, could work irreparable harm upon the proper administration and provision of essential governmental programs. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on March 3, 2003.”

Acts 2005, No. 1296, § 11: July 1, 2005. Emergency clause provided: “It is found and determined by the General Assembly that this act is designed to bring new jobs to this state; that current financial conditions dictate that unless industries can take advantage of the provisions of this act they may be forced to locate in another state; that unless this bill takes effect on the prescribed date significant numbers of jobs will be lost to this state. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2005.”

Acts 2005, No. 1296, § 14, provided: “Effective Date. The benefits afforded by this act shall only apply to the qualified businesses approved by the Department of Economic Development with a signed financial incentive agreement dated on or after July 1, 2005.”

Acts 2007, No. 1596, § 6, provided: “The provisions of this act shall not be effective until the Chief Fiscal Officer of the State certifies that additional funding has been provided to state general revenues from other funding sources and is available for use during fiscal year 2008 and fiscal year 2009 in an amount sufficient to replace the general revenue reduction for each of the fiscal years 2008 and 2009 that would result from the adoption of this act.”

Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

Acts 2017, No. 465, § 8: Mar. 13, 2017. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that most states exempt from sales and use tax the sale of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment; that other states apply a reduced tax rate to the sale of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment; that Arkansas taxes the sale of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment at a tax rate of four and seven-eighths percent (4.875%) after application of the refund of tax paid for property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment; that the Arkansas Business and Economic Development Incentives Study conducted by Fluor Global Location Strategies and presented to the Bureau of Legislative Research in 2006 classified Arkansas as the worst of the twelve states in the southeast region on the taxation of sales of industrial materials used in manufacturing; that Alabama, Mississippi, North Carolina, and other states have phased in exemptions for sales of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment over time; that under the Streamlined Sales and Use Tax Agreement to which Arkansas is a party, reductions in sales and use tax must be implemented through a refund or rebate mechanism until a complete exemption is achieved; and that this act is immediately necessary because Arkansas, in imposing an effective tax rate of four and seven-eighths percent (4.875%) after application of the refund of tax paid for property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment, is not competitive with surrounding states and states in the southeast region, which costs the state present and future jobs. Therefore, an emergency is declared to exist, and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-2701. Legislative intent.

1. The General Assembly recognizes that job creation and capital investment in Arkansas are dependent upon being competitive with other states for business locations and expansions.
2. Acts 2001, No. 757, authorized the Bureau of Legislative Research to conduct a study of business development incentives in Arkansas and in states with which Arkansas frequently competes for business locations.
3. This subchapter incorporates many of the findings of that study in an effort to make our state more competitive for the creation of new and better jobs for the citizens of Arkansas.

History. Acts 2003, No. 182, § 1.

15-4-2702. Title.

This subchapter shall be known and may be cited as the “Consolidated Incentive Act of 2003”.

History. Acts 2003, No. 182, § 1.

15-4-2703. Definitions.

As used in this subchapter:

1. “Applied research” means any activity that applies the findings of basic research or other existing knowledge toward discovering new scientific knowledge that has specific commercial objectives with respect to new products, services, processes, or methods;
2. 1. “Average hourly wage” means the amount obtained when payroll, as defined in this section, is divided by the number of hours worked to earn the payroll.
   2. For the purpose of subdivision (2)(A) of this section, forty (40) hours per week shall be used as the number of hours worked for a salaried employee;
3. “Basic research” means the pursuit of new scientific knowledge or understanding that does not have specific immediate commercial objectives, although the pursuit may be in fields of present or potential commercial interest;
4. “Contractual employee” means an employee who:
   1. May be included in the payroll calculations of a qualified business under this subchapter and is under the direct supervision of the qualified business receiving incentives under this subchapter, but is an employee of a business other than the one receiving incentives under this subchapter;
   2. Otherwise meets the requirements of a new full-time permanent employee of the qualified business receiving incentives under this subchapter; and
   3. Receives a benefits package comparable to direct employees of the qualified business receiving incentives under this subchapter;
5. 1. “Corporate headquarters” means a facility or portion of a facility where the majority of an eligible business's financial, human resources, engineering, legal, strategic planning, information technology, corporate communications, marketing, or other headquarters-related functions are effectuated on either a regional basis or a national basis under the direction of principal executive officers, including without limitation chief executive officers, chief operating officers, chief financial officers, or other senior-level officers based at the facility.
   2. A corporate headquarters shall be either a regional corporate headquarters or a national corporate headquarters.
   3. The Director of the Arkansas Economic Development Commission, with advice from the Secretary of the Department of Finance and Administration, may determine eligibility for a corporate headquarters facility if a difference exists between a business's disclosed corporate headquarters functions and its North American Industry Classification System primary business activity code;
6. 1. “County or state average hourly wage” means the weighted average weekly earnings for Arkansans in all industries, both statewide and countywide, as calculated by the Division of Workforce Services in its most recent Annual Covered Employment and Earnings publication, divided by forty (40).
   2. The average hourly wage threshold determined at the approval date of the financial incentive agreement is the threshold for the term of the financial incentive agreement;
7. “Distribution center” means a facility for the reception, storage, and shipping of:
   1. A business's own products or products that the business wholesales to retail businesses or ships to its own retail outlets if seventy-five percent (75%) of the sales revenue is from out-of-state customers;
   2. Products owned by other companies with which the business has contracts for storage and shipping if seventy-five percent (75%) of the sales revenue of the product owner is from out-of-state customers; or
   3. Products for sale to the general public if seventy-five percent (75%) of the sales revenue is from out-of-state customers;
8. “Eligible businesses” means nonretail businesses engaged in commerce for profit that meet the eligibility requirements for the applicable incentive offered by this subchapter and fall into one (1) or more of the following categories:
   1. Manufacturers classified in sectors 31-33 in the North American Industry Classification System, as in effect January 1, 2017;
   2. 1. Businesses primarily engaged in the design and development of software, digital content production and preservation, computer processing and data preparation services, or information retrieval services.
      2. All businesses in this group shall derive at least fifty-one percent (51%) of their sales revenue from out of state.
      3. The average hourly wage paid by businesses in this group to employees whose payroll is subject to incentives under this subchapter shall exceed one hundred twenty-five percent (125%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands;
   3. 1. Businesses primarily engaged in film and digital product productions and postproductions.
      2. All businesses in this group shall derive at least fifty-one percent (51%) of their sales revenue from out of state.
      3. The average hourly wage paid by businesses in this group to employees whose payroll is subject to incentives under this subchapter shall exceed one hundred twenty-five percent (125%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands;
   4. Distribution centers or intermodal facilities;
   5. Office sector businesses;
   6. National or regional corporate headquarters, as classified by the North American Industry Classification System Code 551114, as in effect January 1, 2017, or as determined by the Director of the Arkansas Economic Development Commission under subdivision (5)(C) of this section;
   7. Businesses primarily engaged in research and development in the physical, engineering, and life sciences, as classified in the North American Industry Classification System Codes 541713, 541714, and 541715, as in effect January 1, 2017;
   8. 1. Scientific and technical services businesses.
      2. 1. All businesses in this group shall derive at least fifty-one percent (51%) of their sales revenue from out of state.
         2. The average hourly wage paid by businesses in this group to employees whose payroll is subject to incentives under this subchapter shall exceed one hundred fifty percent (150%) of the lesser of the county or state average hourly wage for the county in which the business locates or expands;
   9. The Director of the Arkansas Economic Development Commission may classify a nonretail business as an eligible business if the following conditions exist:
      1. The business receives at least fifty-one percent (51%) of its sales revenue from out of state; and
      2. The average hourly wage paid by the business to employees whose payroll is subject to incentives under this subchapter shall exceed one hundred twenty-five percent (125%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands;
   10. 1. Businesses primarily engaged in other support activities for air transportation, as classified in the North American Industry Classification System Code 488190, as in effect on January 1, 2017.
       2. All businesses in this group shall derive at least seventy-five percent (75%) of their sales revenue from out of state; and
   11. 1. Businesses primarily engaged in support activities for rail transportation, as classified in the North American Industry Classification System Code 488210, as in effect on January 1, 2017.
       2. All businesses in this group shall derive at least seventy-five percent (75%) of their sales revenue from out of state;
9. “Equity investment” means capital invested in common or preferred stock, royalty or intellectual property rights, limited partnership interests, limited liability company interests, and any other securities or rights that evidence ownership in private businesses, including a federal agency's award of a Small Business Innovation Research grant or a Small Business Technology Transfer grant;
10. 1. “Existing employees” means those employees hired by a business before the date the financial incentive agreement was approved.
    2. Existing employees may be considered new full-time permanent employees only if:
       1. The position or job filled by the existing employee was created in accordance with the approved financial incentive agreement; and
       2. The position vacated by the existing employee was either filled by a subsequent employee or no subsequent employee will be hired because the business no longer conducts the particular business activity requiring that classification.
    3. If the Director of the Arkansas Economic Development Commission and the secretary find that a significant impairment of Arkansas job opportunities for existing employees will otherwise occur, they may jointly authorize the counting of existing employees as new full-time permanent employees;
11. “Facility” means a single physical location, which may consist of multiple structures of an eligible business that are conducting similar or complementary activities located on noncontiguous property within the same county, at which the eligible business is conducting its operations;
12. “Film and digital product” means video images and other visual media entertainment content in digital format, film, or videotape, if the video images and other visual media entertainment content meet all the underlying criteria of a qualified production under the Digital Product and Motion Picture Industry Development Act of 2009, § 15-4-2001 et seq., including without limitation:
    1. A motion picture;
    2. A documentary;
    3. A long-form program;
    4. A special;
    5. A mini-series;
    6. A series;
    7. A music video;
    8. Television programming;
    9. Interactive television;
    10. An interactive game;
    11. A video game;
    12. A commercial;
    13. Digital media for distribution or exhibition to the general public; and
    14. A trailer, pilot, video teaser, or demo created primarily to stimulate the sale, marketing, promotion, or exploitation of future investment;
13. “Financial incentive agreement” means an agreement entered into by an eligible business and the Arkansas Economic Development Commission to provide the business an incentive to locate a new business or to expand or retain an existing business in Arkansas;
14. “Governing authority” means the quorum court of a county or the governing body of a municipality;
15. 1. 1. “In-house research” means applied research supported by the business through the payment of wages and usual fringe benefits specific to research activities of employees of the business or for wages and usual fringe benefits paid through contractual agreements, approved in writing by the Director of the Arkansas Economic Development Commission, with an Arkansas state college, an Arkansas state university, or other Arkansas-based research organization to perform research for a targeted business.
       2. “In-house research” includes experimental, clinical, or laboratory activity to develop new products, improve existing products, or develop new uses of products, but only to the extent that activity is conducted in Arkansas.
    2. “In-house research” does not include tests or inspections of materials or products for quality control, efficiency surveys, management studies, other market research, supplies, the purchase of land, the purchase or rehabilitation of production machinery and equipment, the construction or renovation of buildings, or any other ordinary and necessary expenses of conducting business;
16. “Intellectual property” means an invention, discovery, or new idea that the legal entity responsible for commercialization has legally protected for possible commercial gain, based on the disclosure of the creator;
17. “Intermodal facility” means a facility with more than one (1) mode of interconnected movement of freight or commerce;
18. “Investment threshold” means the minimum amount of investment in project costs that must be incurred to qualify for eligibility;
19. “Invests” or “investment” means money expended by or on behalf of a qualified business that seeks to begin or expand operations in Arkansas, and without this infusion of capital, the location or expansion may not take place;
20. “Lease” means a right to possession of real property for a specific term in return for consideration, as determined in a lease agreement by both parties;
21. 1. “Modernization” means an increase in efficiency or productivity of a business through investment in machinery or equipment, or both.
    2. “Modernization” does not include costs for routine maintenance or the installation of equipment that does not improve efficiency or productivity, except for expenditures for pollution control equipment mandated by state laws or rules, or federal laws or regulations;
22. “National corporate headquarters” means the sole corporate headquarters in the nation that handles headquarters-related functions on a national basis;
23. 1. 1. “New full-time permanent employee” means a position or job that was created pursuant to an approved financial incentive agreement and that is filled by one (1) or more employees or contractual employees who:
          1. Were Arkansas taxpayers during the year in which the tax credits or incentives were earned;
          2. 1. Work at the facility identified in the financial incentive agreement.
             2. New employees who do not work at the facility may be counted if they:
          3. Are not existing employees, except as allowed under subdivision (10) of this section.
       2. The position or job held by the employee or employees shall have been filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours per week.
    2. However, to qualify under this subchapter, a contractual employee shall be offered a benefits package comparable to a direct employee of the business seeking incentives under this subchapter;
24. “Nonretail business” means a business that is not classified in North American Industry Classification System sectors 44-45, as in effect on January 1, 2017;
25. 1. “Office sector business” means business operations that support primary business needs, including without limitation customer service, credit accounting, telemarketing, claims processing, and other administrative functions.
    2. All businesses in this group shall be nonretail businesses and derive at least seventy-five percent (75%) of their sales revenue from out of state;
26. “Payroll” means the total taxable wages, including overtime and bonuses, paid during the preceding tax year of the eligible business to new full-time permanent employees hired after the date of the approved financial incentive agreement;
27. 1. “Person” means an individual, trust, estate, fiduciary, firm, joint venture, proprietorship, partnership, limited liability company, or corporation.
    2. “Person” includes:
       1. The directors, officers, agents, and employees of any person;
       2. Beneficiaries, members, managers, and partners; and
       3. Any county or municipal subdivision of the state;
28. “Preconstruction costs” means the costs of eligible items incurred before the start of construction, including:
    1. Project planning costs;
    2. Architectural and engineering fees;
    3. Right-of-way purchases;
    4. Utility extensions;
    5. Site preparations;
    6. Purchase of mineral rights;
    7. Building demolition;
    8. Builders risk insurance;
    9. Capitalized start-up costs;
    10. Deposits and process payments on eligible machinery and equipment; and
    11. Other costs necessary to prepare for the start of construction;
29. 1. “Project costs” means costs associated with the:
       1. Construction of a new plant or facility, including without limitation land, building, machinery and equipment, or support infrastructure;
       2. Expansion of an established plant or facility by adding to the building, machinery and equipment, or support infrastructure; or
       3. Modernization of an established plant or facility through the replacement of machinery and equipment or support infrastructure that improves efficiency or productivity.
    2. “Project costs” does not include:
       1. Expenditures for routine repair and maintenance that do not result in new construction, expansion, or modernization;
       2. Routine operating expenditures;
       3. Expenditures incurred at multiple facilities; or
       4. The purchase or acquisition of an existing business unless:
          1. There is sufficient documentation that the existing business was closed or will close; and
          2. The purchase of the existing business will result in the retention of jobs that would have been lost due to the closure.
    3. Eligible project costs must be incurred within four (4) years from the date a financial incentive agreement was approved by the commission;
30. “Project plan” means a plan submitted to the commission containing the information required by the Director of the Arkansas Economic Development Commission to determine eligibility for incentives under this subchapter;
31. “Qualified business” means an eligible business that:
    1. Has met the qualifications for one (1) or more economic development incentives authorized by this subchapter; and
    2. Has signed a financial incentive agreement that has been approved by the commission;
32. “Qualified research expenditures” means the sum of any amounts that are paid or incurred by an Arkansas taxpayer during the taxable year in funding a qualified research program that has been approved for tax credit treatment under rules promulgated by the commission;
33. “Region” or “regional” means a geographic area comprised of two (2) or more states, including this state and at least one (1) state that is contiguous to this state;
34. 1. “Regional corporate headquarters” means a facility or portion of the facility in which the majority of an eligible business's financial, human resources, engineering, legal, strategic planning, information technology, corporate communications, marketing, or other headquarters-related functions are effectuated on a regional basis under the direction of principal executive officers, including without limitation chief executive officers, chief operating officers, chief financial officers, or other senior-level officers based at the facility.
    2. However, a function on a regional basis does not include a function involving manufacturing, processing, warehousing, distributing, or wholesaling activities or the operation of a call center;
35. “Scientific and technical services business” means a business:
    1. Primarily engaged in performing scientific and technical activities for others, including:
       1. Architectural and engineering design;
       2. Computer programming and computer systems design; and
       3. Scientific research and development in the physical, biological, and engineering sciences;
    2. Deriving at least fifty-one percent (51%) of its sales revenue from out of state; and
    3. Paying employees whose payroll is subject to incentives under this subchapter average hourly wages exceeding one hundred fifty percent (150%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands;
36. “Start of construction” means any activity that causes a physical change to the building or property, or both, identified as the site of the approved project, but excluding preconstruction costs;
37. “Strategic research” means research that has strategic economic or long-term commercial value to the state and that is identified in the research and development plan approved by the Director of the Arkansas Economic Development Commission with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission;
38. “Support infrastructure” means physical assets necessary for the business to operate, including without limitation water systems, wastewater systems, gas and electric utilities, roads, bridges, parking lots, and communications infrastructure;
39. “Targeted businesses” means a grouping of growing business sectors, not to exceed six (6), that include the following:
    1. Advanced materials and manufacturing systems;
    2. Agriculture, food, and environmental sciences;
    3. Biotechnology, bioengineering, and life sciences;
    4. Information technology;
    5. Transportation logistics; and
    6. Bio-based products; and
40. “Tiers” means the ranking of the seventy-five (75) counties of Arkansas into four (4) divisions that delineate the economic prosperity of the counties and allow for different levels of incentives under this subchapter.

1. Otherwise meet the definition of “new full-time permanent employee”;
2. Are subject to the Arkansas Income Tax Withholding Act of 1965, § 26-51-901 et seq.; and
3. Meet an average hourly wage threshold equal to or greater than the state average hourly wage for the preceding calendar year; and

History. Acts 2003, No. 182, § 1; 2005, No. 1296, § 1; 2007, No. 1596, § 1; 2009, No. 716, §§ 3-5; 2011, No. 1197, § 1; 2015 (1st Ex. Sess.), No. 7, §§ 92-97; 2015 (1st Ex. Sess.), No. 8, §§ 92-97; 2019, No. 315, §§ 1073, 1074; 2019, No. 327, § 1; 2019, No. 910, §§ 391-397.

A.C.R.C. Notes. Acts 2019, No. 910, § 395, deleted “Executive” in former subdivision (17)(A)(ii) (b) of this section. However, Acts 2019, No. 327, § 1, specifically repealed this subdivision.

Amendments. The 2005 amendment inserted “divided by the number of new full-time permanent employees” in (2); added (6); substituted “and shipping” for “or shipping” in (9); substituted “sales revenue from out of state” for “revenue from out-of-state sales” in (10)(B)(ii), (10)(C)(ii), (10)(H)(i) (a) and present (27)(B) and (39)(D); inserted “or intermodal facilities” in (10)(D); added “North American Industry … January 11, 2005” in (10)(F); substituted “Code 541710, as in effect January 1, 2005” for “as in effect January 1, 2003; and” in (10)(G); substituted “sales revenue from out of state” for “revenue from out-of-state sales” in (10)(H)(ii) (a) ; added (10)(H)(ii) (b)(2) ; deleted former (25); inserted (10)(I) and present (13), (19)-(22), (30) and (31) and redesignated the remaining subdivisions accordingly; added present (25)(A)(i) (a) - (c) ; deleted former (25); and substituted “building, property” for “building or property” in present (40).

The 2007 amendment added “if seventy-five percent (75%) of the sales revenues are from out-of-state customers” in (9)(A); inserted “hourly” in (10)(I)(ii) and (43)(B)(ii); added (12)(C); and made related changes.

The 2009 amendment, in (17)(A)(ii), inserted (17)(A)(ii) (b) , redesignated the remaining text accordingly, and made related changes; and rewrote (36).

The 2011 amendment inserted (25)(A)(i) (b)(2)

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (8) (now (11)), (10)(I) (now (9)(I)), (12)(C), and (32)(A), inserted “Executive” preceding “Director of the Arkansas Economic Development Commission”; and substituted “Executive Director of the Arkansas Economic Development Commission with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission” for “President of the Arkansas Science and Technology Authority” in (17)(A)(ii) (b) and for “Board of Directors of the Arkansas Science and Technology Authority” in (41).

The 2019 amendment by No. 315 inserted “laws or rules” in (23)(B) (now (21)(B)); and deleted “and regulations” following “rules” in (34) (now (32)).

The 2019 amendment by No. 327 rewrote the section.

The 2019 amendment by No. 910, throughout the section, substituted “Division of Workforce Services” for “Department of Workforce Services” and substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission”; repealed the definition for “executive director”; and substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration” in (12)(C) (now (10)(C)).

15-4-2704. Tier system.

1. The Arkansas Economic Development Commission shall establish a tier system that shall rank all seventy-five (75) counties of this state into four (4) divisions on the basis of economic prosperity.
2. Tier 4 shall be the least prosperous division and tier 1 shall be the most prosperous division.
3. The assignment of a county to a tier shall be based on a ranking of:
   1. Unemployment rate;
   2. Poverty rate;
   3. Per capita personal income; and
   4. Population change.
4. The commission shall:
   1. Update ranking statistics annually; and
   2. Place counties into tiers based on the updated statistics.
5. 1. A county that has experienced a sudden and severe period of economic distress caused by a closure of one (1) or more businesses or a mass layoff at one (1) or more businesses, or both, as documented by notice provided under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq., as it existed on January 1, 2019, that results in the loss of a minimum of five percent (5%) of the county's employed labor force may be moved down one (1) tier upon written request by the county judge of the affected county and approval by the Director of the Arkansas Economic Development Commission.
   2. The five-percent threshold stated in subdivision (e)(1) of this section shall be evidenced by calculating the highest percentage difference in employment between the county's:
      1. Current monthly, not seasonally, adjusted total employed labor force; and
      2. Each of the following:
         1. The previous monthly, not seasonally, adjusted total employed labor force;
         2. The most recent annually, not seasonally, adjusted total employed labor force; or
         3. The monthly, not seasonally, adjusted total employed labor force for the same month of the previous year.
   3. If the director approves a county's move to a higher tier, a qualified business that has signed a financial incentive agreement with the commission dated before the director's action shall receive the incentives that were assigned to the county to which it located at the time the financial incentive agreement was signed, regardless of any subsequent change to the tier.
   4. A tier increase approved under this subsection remains in effect until the annual tier rankings are updated under subsection (d) of this section.

History. Acts 2003, No. 182, § 1; 2005, No. 1296, § 2; 2019, No. 327, § 1; 2019, No. 910, § 398.

A.C.R.C. Notes. Acts 2019, No. 910, § 398, replaced “Department” with “Division” before “of Workforce Services” in subdivision (e)(1) of this section. However, Acts 2019, No. 327, § 1, specifically repealed this reference.

Amendments. The 2005 amendment deleted former (e); and redesignated former (f) as present (e).

The 2019 amendment by No. 327 substituted “shall” for “will” twice in (b); inserted “personal” in (c)(3); substituted “change” for “growth” in (c)(4); and rewrote (e).

The 2019 amendment by No. 910 substituted “Division of Workforce Services” for “Department of Workforce Services” in (e)(1).

15-4-2705. Job-creation tax credit.

1. There is established a job-creation tax credit to encourage:
   1. The creation of new jobs; and
   2. Business growth and expansion.
2. An application for the income tax credit under this section shall be submitted to the Arkansas Economic Development Commission.
3. To receive this credit, a qualified business shall meet minimum annual payroll thresholds for new full-time permanent employees for the county tier in which the project is located, as follows:
   1. For tier 1 counties, the annual payroll threshold is at least one hundred twenty-five thousand dollars ($125,000);
   2. For tier 2 counties, the annual payroll threshold is at least one hundred thousand dollars ($100,000);
   3. For tier 3 counties, the annual payroll threshold is at least seventy-five thousand dollars ($75,000); and
   4. For tier 4 counties, the annual payroll threshold is at least fifty thousand dollars ($50,000).
4. 1. The credit earned under this section is a percentage of the payroll of the new full-time permanent employees hired following the date of the approved financial incentive agreement.
   2. The percentage shall be determined by the county tier in which the project is located, as follows:
      1. For tier 1 counties, the credit is one percent (1%) of the payroll for the new full-time permanent employees of the business;
      2. For tier 2 counties, the credit is two percent (2%) of the payroll for the new full-time permanent employees of the business;
      3. For tier 3 counties, the credit is three percent (3%) of the payroll for the new full-time permanent employees of the business; and
      4. For tier 4 counties, the credit is four percent (4%) of the payroll for the new full-time permanent employees of the business.
   3. To qualify for a credit under this subsection, the average hourly wage paid to employees whose payroll is subject to incentives under this subchapter shall be at least equal to the greater of the lowest county average hourly wage as calculated by the commission based on the most recent calendar year data published by the Division of Workforce Services, or twelve dollars and fifty cents ($12.50).
   4. A qualified business shall receive an additional tax credit of one percent (1%) of the payroll of new full-time permanent employees if the average hourly wage paid to employees subject to incentives under this subchapter exceeds one hundred twenty-five percent (125%) of the lesser of the county or state average hourly wage for the county in which the qualified business locates or expands.
5. The term of the financial incentive agreement shall be for a period of five (5) years, beginning on the date of the approved financial incentive agreement.
6. 1. After receiving an approved financial incentive agreement from the commission, a qualified business shall certify to the Department of Finance and Administration the payroll of the new full-time permanent employees annually at the end of each tax year during the term of the financial incentive agreement.
   2. Upon verification of the reported payroll amounts, the department shall authorize the appropriate income tax credit.
7. 1. The tax credits earned under this section may offset up to fifty percent (50%) of the business's tax liability annually.
   2. Any unused tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until exhausted, whichever occurs first.
8. 1. If a qualified business fails to meet the payroll threshold within two (2) years after the date of the approved financial incentive agreement or within the time period established by an extension approved by the Secretary of the Department of Finance and Administration and the Director of the Arkansas Economic Development Commission, the qualified business is liable for repayment of all incentives previously received under § 15-4-2706(d) that were conditioned on an approved financial incentive agreement under this section for which the payroll threshold has not been met.
   2. If a qualified business fails to reach the payroll threshold of this section in a timely manner, the department shall have two (2) years to collect incentives previously received by the qualified business or file a lawsuit to enforce the repayment provisions.

History. Acts 2003, No. 182, § 1; 2005, No. 1296, § 3; 2009, No. 716, § 6; 2019, No. 327, § 1; 2019, No. 910, §§ 399, 400.

Amendments. The 2005 amendment rewrote (b); inserted present (c)-(g); and redesignated former (c) as present (h).

The 2009 amendment inserted (d)(3).

The 2019 amendment by No. 327 rewrote (c); rewrote (d)(3); added (d)(4); substituted “five (5) years” for “sixty (60) months” in (e); and rewrote (f) through (h).

The 2019 amendment by No. 910 substituted “Division of Workforce Services” for “Department of Workforce Services” in (d)(3); and, in (h)(1), substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration” and “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission”.

15-4-2706. Investment tax incentives.

1. There are established investment tax incentives to:
   1. Encourage capital investment for the long-term viability of businesses in the state; and
   2. Create new jobs.
2. 1. The award of incentives under this section are at the discretion of the Director of the Arkansas Economic Development Commission.
   2. If offered, an application for an income tax credit under this section shall be submitted to the Arkansas Economic Development Commission.
   3. Eligibility for incentives under this section is dependent upon the tier in which the project is located, as follows:
      1. For tier 1 counties, the business shall invest five million dollars ($5,000,000) or more and have an annual payroll for new full-time permanent employees in excess of two million dollars ($2,000,000);
      2. For tier 2 counties, the business shall invest three million seven hundred fifty thousand dollars ($3,750,000) or more and have an annual payroll for new full-time permanent employees in excess of one million five hundred thousand dollars ($1,500,000);
      3. For tier 3 counties, the business shall invest three million dollars ($3,000,000) or more and have an annual payroll for new full-time permanent employees in excess of one million two hundred thousand dollars ($1,200,000); and
      4. For tier 4 counties, the business shall invest two million dollars ($2,000,000) or more and have an annual payroll for new full-time permanent employees in excess of eight hundred thousand dollars ($800,000).
   4. An approved financial incentive agreement shall be transmitted to the qualified business and the Department of Finance and Administration.
   5. A qualified business shall reach the investment threshold within four (4) years from the date of the approved financial incentive agreement, except for lease payments authorized by subdivision (b)(6)(D) of this section or subdivision (c)(6) of this section.
   6. 1. 1. After receiving an approved financial incentive agreement from the commission, a qualified business shall certify to the department the eligible project costs annually at the end of each calendar year for the term of the financial incentive agreement.
         2. The department shall authorize an income tax credit of ten percent (10%) of total audited eligible project costs.
      2. The amount of income tax credit authorized under subdivision (a)(6)(A)(ii) of this section may offset up to fifty percent (50%) of a qualified business's income tax liability annually.
      3. Unused tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until the tax credits are exhausted, whichever occurs first.
      4. A qualified business that enters into a lease for a building or equipment for a period of at least five (5) years may count the lease payments for the first five (5) years as a qualifying expenditure for the investment threshold required for this investment incentive.
   7. Technology-based enterprises, as defined by § 14-164-203, may earn, at the discretion of the director, an income tax credit or sales and use tax credit based on new investment, provided that the technology-based enterprise:
      1. Creates a new payroll of at least two hundred fifty thousand dollars ($250,000); and
      2. Pays an average hourly wage that is at least one hundred fifty percent (150%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands.
   8. 1. The income tax credit or sales and use tax credit that may be earned by a technology-based enterprise is based on the amount of investment as follows:
         1. The income tax credit or sales and use tax credit is equal to two percent (2%) of the investment for an investment that is between two hundred fifty thousand dollars ($250,000) and five hundred thousand dollars ($500,000);
         2. The income tax credit or sales and use tax credit is equal to four percent (4%) of the investment for that part of the investment that is over five hundred thousand dollars ($500,000) and less than one million dollars ($1,000,000);
         3. The income tax credit or sales and use tax credit is equal to six percent (6%) of the investment for that part of the investment that is over one million dollars ($1,000,000) and less than two million dollars ($2,000,000); and
         4. The income tax credit or sales and use tax credit is equal to eight percent (8%) of the investment for that part of the investment that is over two million dollars ($2,000,000).
      2. The amount of credit earned is determined based upon the amount invested, as verified by an audit by the department.
   9. All investments by a technology-based enterprise shall be made within four (4) years of the date of the approved financial incentive agreement.
   10. Prior to commission approval of a financial incentive agreement, the business shall elect to receive the tax credits as either:
       1. A sales and use tax credit; or
       2. An income tax credit.
   11. The income tax credit or sales and use tax credit earned by a technology-based enterprise may offset income tax liabilities or sales and use tax liabilities as follows:
       1. A technology-based enterprise that pays at least one hundred fifty percent (150%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands may offset up to fifty percent (50%) of its income tax liability or sales and use tax liability annually;
       2. A technology-based enterprise that pays at least one hundred seventy-five percent (175%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands may offset up to seventy-five percent (75%) of its income tax liability or sales and use tax liability annually; and
       3. A technology-based enterprise that pays at least two hundred percent (200%) of the lesser of the state or county average hourly wage for the county in which the business locates or expands may offset up to one hundred percent (100%) of its income tax liability or sales and use tax liability annually.
   12. After receiving an approved financial incentive agreement from the commission, a qualified business shall certify to the department the eligible project costs and average hourly wages annually at the end of each tax year for the term of the financial incentive agreement.
   13. Unused income tax credits or sales and use tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until the tax credits are exhausted, whichever occurs first.
3. 1. 1. An application for a retention tax credit under this subsection shall be submitted to the commission.
      2. 1. The application shall be submitted to the commission before incurring any project costs.
         2. With the exception of preconstruction costs, only those costs incurred after the commission's approval are eligible for the tax credit.
   2. The tax credit against the qualified business's sales and use tax liability is available only to Arkansas businesses that:
      1. Have been in continuous operation in the state for at least two (2) years;
      2. Invest a minimum of five million dollars ($5,000,000) in a project, including land, buildings, and equipment used in the construction, expansion, or modernization; and
      3. Hold a direct-pay sales and use tax permit from the department before submitting an application for incentives.
   3. 1. If allowed, the credit shall be a percentage of the eligible project costs.
      2. The amount of the credit shall be five-tenths percent (0.5%) above the state sales and use tax rate in effect at the time a financial incentive agreement is signed with the commission.
      3. In any one (1) year following the year of the expenditures, credits taken cannot exceed fifty percent (50%) of the direct pay sales and use tax liability of the qualified business for taxable purchases.
      4. Unused credits may be carried forward for a period of up to five (5) years beyond the year in which the credit was first earned.
   4. 1. Upon determination by the director that the project qualifies for credit under this subsection, the director shall certify to the Secretary of the Department of Finance and Administration that the project qualifies and shall transmit with his or her certification the documents or copies of the documents upon which the certification was based.
      2. The secretary shall provide forms to the qualified business on which to claim the credit.
      3. At the end of the calendar year in which the application is made and at the end of each calendar year thereafter until the project is completed, the qualified business shall certify on the form provided by the secretary the amount of expenditures on the project during the preceding calendar year.
      4. Upon receipt of the form certifying expenditures, the secretary shall determine the amount due as a credit for the preceding calendar year and issue a memorandum of credit to the qualified business.
      5. The credit against the qualified business's sales and use tax liability shall be a percentage of the eligible project costs equal to five-tenths percent (0.5%) above the state sales and use tax rate in effect at the time the financial incentive agreement was approved by the commission.
   5. If a business plans to apply for incentives under this subsection and also plans to apply for incentives under § 15-4-2705, the financial incentive agreement under § 15-4-2705 shall be approved within two (2) years after signing the financial incentive agreement under this subsection.
   6. A qualified business that enters into a lease for a building or equipment for a period of at least five (5) years may count the lease payments for the first five (5) years as a qualifying expenditure for the investment threshold required for this investment incentive.
   7. 1. A business may apply for the retention tax credit under this subsection through June 30, 2017.
      2. 1. An application for the retention tax credit under this subsection shall not be accepted on or after July 1, 2017.
         2. However, projects that qualify for a retention tax credit based on an application filed through June 30, 2017, shall continue to earn credits as provided in this section.
         3. Retention tax credits issued on a project that qualifies for retention tax credits based on an application filed through June 30, 2017, shall remain in effect and shall be taken and carried forward as otherwise provided in this section.
4. 1. 1. An application for a state and local sales and use tax refund for a new or expanding business shall be filed with the commission contingent upon the approval of an endorsement resolution from the governing authority of a municipality or county, or both, in whose jurisdiction the business will be located.
      2. The resolution shall:
         1. Endorse the business's participation in this sales and use tax refund program; and
         2. Specify that the department is authorized to refund local sales taxes to the qualified business.
      3. To qualify for a refund under this subsection, a qualified business shall meet the minimum investment thresholds for the tier in which the qualified business expands or locates, as follows:
         1. For tier 1 counties, the minimum investment threshold is at least five hundred thousand dollars ($500,000);
         2. For tier 2 counties, the minimum investment threshold is at least four hundred thousand dollars ($400,000);
         3. For tier 3 counties, the minimum investment threshold is at least three hundred thousand dollars ($300,000); and
         4. For tier 4 counties, the minimum investment threshold is at least two hundred thousand dollars ($200,000).
   2. 1. 1. The secretary shall authorize a sales and use tax refund of state and local sales and use taxes, excepting the sales and use taxes dedicated to the Educational Adequacy Fund and the Conservation Tax Fund on the purchases of the material used in the construction of a building or buildings or any addition, modernization, or improvement thereon for housing any new or expanding qualified business and machinery and equipment to be located in or in connection with such a building.
         2. The local sales and use tax may be refunded only from the municipality or county, or both, in which the qualified business is located.
      2. A refund shall not be authorized for:
         1. Routine operating expenditures; or
         2. The purchase of replacement items previously purchased as part of a project under this subsection unless the items previously purchased are necessary for the implementation or completion of the project.
   3. 1. Subject to the approval of the commission, a qualified business may make changes to a project by written amendment to the project plan filed with the commission.
      2. The commission shall not approve an amendment under subdivision (d)(3)(A) of this section that results in a cost increase of more than twenty-five percent (25%) of the initial project plan.
   4. All claims for sales and use tax refunds under this subsection shall be denied unless they are filed with the department within three (3) years from the date of the qualified purchase or purchases.
   5. 1. 1. To be eligible for the incentives under this subsection, a qualified business shall meet all payroll creation requirements of its approved financial incentive agreement under § 15-4-2705 or § 15-4-2707.
         2. However, a business may apply for incentives under this subsection if:
            1. The business has an existing financial incentive agreement approved under this subdivision (d)(5)(A) and the provisions of subdivision (d)(5)(B) of this section have been met within the previous four (4) years; or
            2. The business has signed a financial incentive agreement approved under § 15-4-2705 or § 15-4-2707 within the previous four (4) years.
      2. The financial incentive agreement under § 15-4-2705 or § 15-4-2707 shall be approved within two (2) years after the financial incentive agreement under this subsection is approved.
5. 1. A targeted business may be eligible for a refund of state and local sales and use taxes for qualified expenditures at the discretion of the director if:
      1. 1. The annual payroll of the targeted business for Arkansas taxpayers is greater than one hundred thousand dollars ($100,000) and less than one million dollars ($1,000,000).
         2. The payroll requirement in subdivision (e)(1)(A)(i) of this section applies only to the initial eligibility determination and does not preclude a qualified business from receiving incentives if, at any time after the financial incentive agreement is approved, actual payroll does not satisfy the requirements in subdivision (e)(1)(A)(i) of this section; and
      2. The targeted business shows proof of an equity investment of at least two hundred fifty thousand dollars ($250,000).
   2. 1. An application for the targeted business state and local sales and use tax refund program for a new or expanding targeted business shall be filed with the commission contingent upon the approval of an endorsement resolution from the governing authority of a municipality or county, or both, in whose jurisdiction the targeted business will be located.
      2. The resolution shall:
         1. Endorse the business's participation in this sales and use tax refund program; and
         2. Specify that the department is authorized to refund local sales and use taxes to the targeted business.
   3. An approved financial incentive agreement and any other pertinent documentation shall be forwarded to the secretary.
   4. 1. 1. The secretary shall authorize a sales and use tax refund of state and local sales and use taxes, excepting the sales and use taxes dedicated to the Educational Adequacy Fund and the Conservation Tax Fund on the purchases of the material used in the construction of a building or buildings or any addition, modernization, or improvement thereon for housing any new or expanding qualified business and machinery and equipment to be located in or in connection with such a building.
         2. The local sales and use tax may be refunded only from the municipality or county, or both, in which the qualified business is located.
      2. A refund shall not be authorized for:
         1. Routine operating expenditures; or
         2. The purchase of replacement items previously purchased as part of a project under this subsection unless the items previously purchased are necessary for the implementation or completion of the project.
   5. 1. Subject to the approval of the commission, a qualified business may make changes to a project by written amendment to the project plan filed with the commission.
      2. The commission shall not approve an amendment under subdivision (e)(5)(A) of this section that results in a cost increase of more than twenty-five percent (25%) of the initial project plan.
   6. All claims for sales and use tax refunds under this subsection shall be denied unless they are filed with the department within three (3) years after the date of the qualified purchase or purchases.
   7. If a targeted business plans to apply for benefits under this subsection and also plans to apply for benefits under § 15-4-2709, the financial incentive agreement under § 15-4-2709 must be signed within twenty-four (24) months of signing the financial incentive agreement under this subsection and comply with the eligibility requirements of the financial incentive agreements.
   8. To be eligible for the incentives under this subsection, a targeted business shall meet all payroll creation requirements of an approved financial incentive agreement under § 15-4-2707 or § 15-4-2709 within two (2) years of the date of the approved financial incentive agreement under this subsection or other subsequent date if approved by the director.

History. Acts 2003, No. 182, § 1; 2005, No. 1296, § 4; 2007, No. 1596, § 2; 2009, No. 716, §§ 7, 8; 2017, No. 465, § 1; 2019, No. 327, § 1; 2019, No. 910, §§ 401-407.

A.C.R.C. Notes. Acts 2019, No. 910, §§ 402-407, deleted “Executive” in subdivision (b)(4) of this section, replaced “Director” with “Secretary” in subdivision (d)(2)(A)(i) of this section, deleted “Director” and replaced “Director” with “Secretary” in subdivision (e)(3) of this section, and replaced “Director” with “Secretary” in subdivision (e)(4) (A)(i) of this section. However, Acts 2019, No. 327, § 1, specifically repealed all of these references.

Amendments. The 2005 amendment rewrote this section.

The 2007 amendment added (b)(7) — (13).

The 2009 amendment, in (d)(5)(A), inserted (d)(5)(A)(ii), redesignated the remaining subdivision accordingly, deleted “or subsection (b) of this section” following “15-4-2707” in (d)(5)(A)(i) and (d)(5)(B), and made related changes; and substituted “two hundred fifty thousand dollars ($250,000)” for “four hundred thousand dollars ($400,000)” in (e)(1)(B).

The 2017 amendment added (c)(7).

The 2019 amendment by No. 327 rewrote the section.

The 2019 amendment by No. 910, throughout the section, substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” and substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration”.

15-4-2707. Economic Development Incentive Fund — Payroll rebate.

1. There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Economic Development Incentive Fund” of the Arkansas Economic Development Commission.
2. The fund shall consist of revenues designated for this fund by the Department of Finance and Administration pursuant to approved financial incentive agreements entered into by the commission with qualified businesses.
3. After the department has received and verified the certification of the payrolls of the qualified businesses for the payroll rebate authorized by this section, the department shall transfer the appropriate amount of money designated by the financial incentive agreements out of general revenues into a special account designated as special revenue for the fund.
4. 1. The award of this incentive is at the discretion of the Director of the Arkansas Economic Development Commission and may be offered for a period of up to ten (10) years.
   2. 1. To receive an incentive under this section, a qualified business shall meet minimum annual payroll thresholds for new full-time permanent employees for the county tier in which the project is located, as follows:
         1. For tier 1 counties, the annual payroll threshold is at least two million dollars ($2,000,000);
         2. For tier 2 counties, the annual payroll threshold is at least one million seven hundred fifty thousand dollars ($1,750,000);
         3. For tier 3 counties, the annual payroll threshold is at least one million five hundred thousand dollars ($1,500,000); and
         4. For tier 4 counties, the annual payroll threshold is at least one million two hundred fifty thousand dollars ($1,250,000).
      2. A qualified business approved for an incentive under this subsection shall certify or recertify payroll annually by filing the appropriate documents with the department.
      3. The qualified business claiming incentives under this subsection shall claim the rebate payment on an annual basis by certifying or recertifying payroll figures meeting the requisite threshold by filing the appropriate claim forms with the department.
      4. Failure to certify or recertify payroll figures and claim the earned rebate payment annually shall result in:
         1. A ten-percent reduction of the earned rebate if not claimed within twelve (12) months from the end of the tax year in which the rebate was earned;
         2. A one hundred-percent forfeiture of the earned rebate if not claimed within twenty-four (24) months from the end of the tax year in which the rebate was earned; or
         3. Termination of the financial incentive agreement if an initial certification has not been filed with the department within four (4) years after the date of the approved financial incentive agreement, unless the date has been extended by the director.
   3. Payments are subject to the following conditions:
      1. For tier 1 counties, the incentive is three and nine-tenths percent (3.9%) of the annual payroll of new full-time permanent employees;
      2. For tier 2 counties, the incentive is four and twenty-five-hundredths percent (4.25%) of the annual payroll of new full-time permanent employees;
      3. For tier 3 counties, the incentive is four and five-tenths percent (4.5%) of the annual payroll of new full-time permanent employees;
      4. For tier 4 counties, the incentive is five percent (5%) of the annual payroll of new full-time permanent employees; and
      5. The director may authorize an enhanced incentive to a prospective eligible business of up to five percent (5%) of the payroll of new full-time permanent employees if the following conditions exist:
         1. The prospective eligible business is considering a location in another state;
         2. The prospective eligible business receives at least fifty-one percent (51%) of its sales revenue from out of state; and
         3. The prospective eligible business is proposing to pay wages in excess of one hundred percent (100%) of the county average hourly wage of the county in which it locates.
   4. To qualify for an incentive under this subsection, except for the enhanced incentive in subdivision (d)(3)(E) of this section, the average hourly wage paid to employees whose payroll is subject to incentives shall be at least equal to the greater of the lowest county average hourly wage as calculated by the commission based on the most recent calendar year data published by the Division of Workforce Services, or twelve dollars and fifty cents ($12.50).
   5. A qualified business shall receive an additional incentive of one percent (1%) of the payroll of new full-time permanent employees if the average hourly wage paid to employees subject to incentives exceeds the lesser of one hundred twenty-five percent (125%) of the county or state average hourly wage for the county in which the business locates or expands.
5. 1. Technology-based enterprises, as defined in § 14-164-203, may earn, at the discretion of the director, a payroll rebate equal to five percent (5%) of the payroll for new full-time permanent employees for a period not to exceed ten (10) years.
   2. To qualify for the payroll rebate:
      1. The average hourly wage of the payroll for new full-time permanent employees must be at least one hundred fifty percent (150%) of the lesser of the state or county average hourly wage for the county in which the technology-based enterprise locates or expands;
      2. The payroll for new full-time permanent employees must exceed two hundred fifty thousand dollars ($250,000); and
      3. The payroll rebate authorized by this subsection shall not be used in combination with the income tax credit based on payroll authorized by § 15-4-2709.

History. Acts 2003, No. 182, § 1; 2005, No. 1296, § 5; 2007, No. 1596, § 3; 2009, No. 625, § 1; 2019, No. 327, § 1; 2019, No. 910, §§ 408-410.

Amendments. The 2005 amendment inserted “and may be offered … years” in (d)(1); in (d)(2), inserted “with an annual … ($2,000,000)” and substituted “threshold has” for “thresholds have”; rewrote (d)(3)(A)-(D); and added (d)(3)(E).

The 2007 amendment inserted (d)(2)(B) and (C) and made related changes; inserted “hourly” in (d)(3)(E)(iii); and added (e).

The 2009 amendment rewrote (d)(2)(C).

The 2019 amendment by No. 327 rewrote the section.

The 2019 amendment by No. 910, throughout this section, substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission”, and deleted “executive” preceding “director”.

Cross References. Economic Development Incentive Fund, § 15-4-1603.

Economic Development Incentive Fund, payroll rebate, § 15-4-3106.

Economic Development Incentive Fund, special revenues, § 19-6-479.

15-4-2708. Research and development tax credits.

1. 1. 1. Eligible businesses that have not previously been approved for incentives under this subsection and that conduct in-house research that has been approved for federal research and development tax credits may qualify, at the discretion of the Director of the Arkansas Economic Development Commission, for an income tax credit of up to twenty percent (20%) of the incremental amount spent on in-house research that exceeds the baseline established in the preceding year, for a period of five (5) years, subject to extension at the discretion of the director.
      2. The initial baseline for a qualified business new to the incentives offered under this subsection is the amount of research conducted in the state as claimed for federal research and development tax credits during the most recent year.
      3. Tax credits for the first year shall be calculated based on the incremental eligible expenditures for research and development at the end of the first year minus the research and development expenditures as reported by the qualified business for research and development tax credits under subdivision (a)(1)(B) of this section.
      4. Tax credits for succeeding years shall be calculated as the difference between the current year's research conducted in the state and the previous year's research conducted in the state.
   2. The income tax credit may be used to offset up to one hundred percent (100%) of a qualified business's annual income tax liability.
   3. Unused tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until the tax credits are exhausted, whichever occurs first.
   4. A qualified business claiming tax credits earned under this subsection shall not receive the credit granted by § 26-51-1102(b) for the same expenditures.
   5. 1. The term of the financial incentive agreement for in-house research authorized by this subsection is for a period not to exceed five (5) years.
      2. The financial incentive agreement may be renewed for additional five-year periods upon the submittal to and approval of the director of a new application and project plan for incentives under this subsection.
      3. The qualified business claiming a tax credit under this subsection shall certify annually to the Arkansas Economic Development Commission the amount expended on in-house research.
2. 1. Targeted businesses may qualify for an income tax credit equal to thirty-three percent (33%) of the amount spent on in-house research per year for the first five (5) tax years following the targeted business's signing a financial incentive agreement with the commission.
   2. The credits earned by targeted businesses may be sold as authorized in § 15-4-2709.
3. 1. An Arkansas taxpayer may be offered, at the discretion of the director, an income tax credit equal to thirty-three percent (33%) of the amount spent on the research for the first five (5) tax years following the business's signing a financial incentive agreement with the commission, subject to the limitations established under § 26-51-1103 if the taxpayer invests in:
      1. In-house research in a strategic research area; or
      2. Projects under the research and development programs of the Division of Science and Technology of the Arkansas Economic Development Commission when the projects directly involve an Arkansas business and are approved by the director with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission under rules promulgated by the commission for those programs.
   2. However, the maximum tax credit for a qualified business engaged in a research area of strategic value or involved in research and development programs sponsored by the division shall not exceed fifty thousand dollars ($50,000) per year.
   3. A qualified business claiming tax credits earned under this subsection shall not receive the credit granted by § 26-51-1102(b) for the same expenditures.
   4. 1. A qualified business claiming tax credits earned under this subsection may offset up to one hundred percent (100%) of the business's Arkansas income tax liability annually.
      2. Any unused income tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until exhausted, whichever occurs first.
4. To claim the credit granted under subsections (a)-(c) of this section, the taxpayer shall file with his or her return, as an attachment to the form prescribed by the Secretary of the Department of Finance and Administration, copies of documentation to show that the commission has approved the research expenditure as a part of a qualified in-house research program or under the research and development programs of the division.

History. Acts 2003, No. 182, § 1; 2005, No. 1232, § 3; 2005, No. 1296, § 6; 2007, No. 1596, §§ 4, 6; 2009, No. 716, § 9; 2015 (1st Ex. Sess.), No. 7, § 98; 2015 (1st Ex. Sess.), No. 8, § 98; 2019, No. 327, § 1; 2019, No. 910, §§ 411, 412.

A.C.R.C. Notes. Acts 2019, No. 910, § 412, deleted “Executive” in subsection (e) of this section. However, Acts 2019, No. 327, § 1, specifically repealed that reference.

Publisher's Notes. Acts 2005, No. 1232, § 1, provided:

“Legislative intent.

“(a) Accelerate Arkansas, a statewide group of volunteers whose mission is to foster economic growth in Arkansas by raising the average Arkansas wage to the level of the national average wage by using the essential building blocks of the knowledge-based economy to create an environment supporting entrepreneurship and continuous innovation, developed its five-point strategy to increase per capita income:

“(1) Support research and development that creates jobs;

“(2) Provide incentives that make risk capital available in the funding gap;

“(3) Encourage entrepreneurship and new enterprise development;

“(4) Sustain successful existing companies; and

“(5) Increase achievement in science, technology, engineering, and mathematics education.

“(b) These core strategies focus on the economic building blocks of research, entrepreneurship, risk capital, and the science and engineering workforce.

“(c) These core strategies are consistent with and supported by the findings in:

“(1) The Department of Economic Development's Report of the Task Force for the Creation of Knowledge-Based Jobs;

“(2) The Winthrop Rockefeller Foundation's Entrepreneurial Arkansas: Connecting the Dots; and

“(3) ‘Arkansas' Position in the Knowledge-Based Economy’, a report prepared by the Milken Institute and the Center for Business and Economic Research at the University of Arkansas.”

Amendments. The 2005 amendment by No. 1232 inserted “or applied” in (a); added (b)(4); substituted “§ 15-4-709(d)(2) ” for “§ 26-51-1103 ” in (c)(2); substituted “a qualified business” for “businesses” in (d)(2); and added (d)(4).

The 2005 amendment by No. 1296 inserted “or applied” in (a); added (b)(4); substituted “§ 15-4-2709(d)(3) ” for “§ 26-51-1103 ” in (c)(1); inserted “(a) and (c)” in (d)(1); substituted “a qualified business” for “businesses” in (d)(2); and added (d)(4).

The 2007 amendment rewrote (b).

The 2009 amendment, in (d), substituted “§ 26-52-1103” for “§ 26-52-1103(a) and (c)” in (d)(1), and substituted “one hundred percent (100%)” for “fifty percent (50%)” in (d)(4)(A).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (d)(1)(B), substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” twice and inserted “Executive Director of the Arkansas Economic Development Commission with the advice of the”; and substituted “division” for “authority” in (d)(1)(B) and (d)(2).

The 2019 amendment by No. 327 rewrote the section

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (d)(1)(B) and (e); and substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration” in (e).

15-4-2709. Targeted business special incentive.

1. A special incentive based on the payroll of targeted businesses in the state may be offered, at the discretion of the Director of the Arkansas Economic Development Commission, to:
   1. Encourage the development of jobs that pay significantly more than the average hourly wage in the county in which the targeted business locates or the state average hourly wage if the state average hourly wage is less than the county average hourly wage; and
   2. Provide an incentive to assist with the start-up of businesses targeted for growth.
2. To qualify for the special incentive provided by subsection (c) of this section, a business shall:
   1. Be identified by the Arkansas Economic Development Commission as being one of those business sectors targeted for growth under § 15-4-2703;
   2. 1. Have an annual payroll of the business for Arkansas taxpayers of not less than one hundred thousand dollars ($100,000) or more than one million dollars ($1,000,000).
      2. The payroll requirement under subdivision (b)(2)(A) of this section applies only to the initial eligibility determination and does not preclude qualified businesses from receiving incentives if, at any time after the financial incentive agreement has been approved, actual payroll does not satisfy the requirements in subdivision (b)(2)(A) of this section;
   3. Show proof of an equity investment of two hundred fifty thousand dollars ($250,000) or more; and
   4. Pay average hourly wages in excess of the lesser of one hundred fifty percent (150%) of the county or state average hourly wage for the county in which the targeted business locates or expands.
3. 1. A targeted business may earn an income tax credit equal to ten percent (10%) of its annual payroll, with the maximum payroll credit not to exceed one hundred thousand dollars ($100,000) in any year during the term of the financial incentive agreement.
   2. 1. The term of the financial incentive agreement shall be established by the director for a period not to exceed five (5) years.
      2. The term of the financial incentive agreement for targeted businesses earning a tax credit under this subsection shall begin on January 1 of the year following the year in which the financial incentive agreement was approved.
      3. The director may allow a qualified targeted business to sell any income tax credits earned through one (1) or more incentives authorized by this subchapter.
4. 1. To sell income tax credits earned through incentives authorized by this subchapter, the targeted business shall apply to the commission and furnish information necessary to facilitate the sale of income tax credits.
   2. 1. Any unused tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until exhausted, whichever occurs first.
      2. Taxpayers purchasing tax credits under this subsection shall be subject to the same carry-forward provisions as the targeted business that earned the credits.
      3. The purchase of the tax credits does not establish a new carry-forward period for the ultimate recipient.
5. A targeted business claiming or selling tax credits earned under this section or § 15-4-2708 shall not receive the credit granted by § 26-51-1102(b) for the same expenditures.

History. Acts 2003, No. 182, § 1; 2005, No. 1232, § 2; 2005, No. 1296, §§ 7, 8; 2007, No. 1596, § 5; 2009, No. 716, § 10; 2019, No. 327, § 1; 2019, No. 910, §§ 413, 414.

A.C.R.C. Notes. The amendment of subsection (d) of this section by Acts 2005, No. 1232, conflicted with the amendment of subsection (d) of this section by Acts 2005, No. 1296. The A.C.R.C. could not reconcile the conflicting amendments in the codification of subsection (d) of this section. Pursuant to § 1-2-207, the amendment of subsection (d) of this section by Act 1296 prevails over the amendment of subsection (d) of this section by Act 1232, with the exception of the repeal of former subdivision (d)(2) of this section by Act 1232. Pursuant to Arkansas Constitution, Article 5, § 23, the A.C.R.C. does not construe the subsequent amendment of former subdivision (d)(2) of this section by Act 1296 as a reenactment of that subdivision. Accordingly, subsection (d) of this section as set out above reflects the application by the A.C.R.C. of the relevant statutory and constitutional provisions. Subsection (d) of this section was amended by Acts 2005, No. 1232 to read as follows:

“(d)(1) In order to sell income tax credits earned through incentives authorized by this subchapter, the new targeted business must apply to the department and furnish information necessary to facilitate the sale of income tax credits.

“(2)(A) Credits maintained for use by the targeted business may be carried forward for a period not to exceed nine (9) years beyond the date of issuance.

“(B) The ultimate recipient of the tax credits shall be subject to the same provisions for carry forward as the targeted business that earned the credits.

“(C) The purchase of the tax credits will not establish a new carry forward period for the ultimate recipient.”

Publisher's Notes. Acts 2005, No. 1232, § 1, provided:

“Legislative intent.

“(a) Accelerate Arkansas, a statewide group of volunteers whose mission is to foster economic growth in Arkansas by raising the average Arkansas wage to the level of the national average wage by using the essential building blocks of the knowledge-based economy to create an environment supporting entrepreneurship and continuous innovation, developed its five-point strategy to increase per capita income:

“(1) Support research and development that creates jobs;

“(2) Provide incentives that make risk capital available in the funding gap;

“(3) Encourage entrepreneurship and new enterprise development;

“(4) Sustain successful existing companies; and

“(5) Increase achievement in science, technology, engineering, and mathematics education.

“(b) These core strategies focus on the economic building blocks of research, entrepreneurship, risk capital, and the science and engineering workforce.

“(c) These core strategies are consistent with and supported by the findings in:

“(1) The Department of Economic Development's Report of the Task Force for the Creation of Knowledge-Based Jobs;

“(2) The Winthrop Rockefeller Foundation's Entrepreneurial Arkansas: Connecting the Dots; and

“(3) ‘Arkansas' Position in the Knowledge-Based Economy’, a report prepared by the Milken Institute and the Center for Business and Economic Research at the University of Arkansas.”

Amendments. The 2005 amendment by No. 1232 substituted “based on the payroll of the” for “for job creation by” in (a); substituted “one hundred thousand dollars ($100,000)” for “two hundred thousand dollars ($200,000)” in (b)(2); substituted “four hundred thousand dollars ($400,000)” for “five hundred thousand dollars ($500,000)” in (b)(3); substituted “in excess of … whichever is less” for “as follows” in (b)(4); deleted former (b)(4)(A)-(D), (d)(2) and (d)(3)(A); inserted present (d)(2)(A); and redesignated former (d)(3)(B) and (C) as present (d)(2)(B) and (C).

The 2005 amendment by No. 1296 substituted “based on the payroll of the” for “for job creation by” in (a); substituted “one hundred thousand dollars ($100,000)” for “two hundred thousand dollars ($200,000)” in (b)(2); substituted “four hundred thousand dollars ($400,000)” for “five hundred thousand dollars ($500,000)” in (b)(3); substituted “in excess of … is less” for “as follows” in (b)(4); deleted former (b)(4)(A)-(D); deleted former (d)(2); rewrote present (d)(2)(A); substituted “carry-forward provisions” for “provisions for carry forward” in present (d)(2)(B); and substituted “carry-forward” for “carry forward” in present (d)(2)(C).

The 2007 amendment inserted “hourly” in four places in (a)(1); inserted (c)(2)(B), and redesignated former (c)(2)(B) as present (c)(2)(C); and added (f).

The 2009 amendment substituted “two hundred fifty thousand dollars ($250,000)” for “four hundred thousand dollars ($400,000)” in (b)(3).

The 2019 amendment by No. 327, in the introductory language of (a), deleted “the new” preceding “targeted” and substituted “may be offered, at the discretion of the Executive Director of the Arkansas Economic Development Commission” for “is established”; deleted “county” preceding the first occurrence of “average” in (a)(1); in the introductory language of (b), deleted “new” preceding “business”; redesignated former (b)(2) as (b)(2)(A); added (b)(2)(B); in (b)(4), inserted “the lesser of” and substituted “for the county in which the targeted business locates or expands” for “whichever is less”; deleted “new” preceding “targeted” in (c)(1) and (d)(1); in (c)(2)(B), deleted “or under § 15-4-2708(c)” following “subsection”, inserted “following the year”, and substituted “approved” for “signed”; inserted “up to” in (d)(2)(A); substituted “Taxpayers purchasing tax credits under this subsection” for “The ultimate recipient of the tax credits” in (d)(2)(B); substituted “shall not receive the credit” for “shall be prohibited from receiving the credit” in (e); deleted (f); and made stylistic changes.

The 2019 amendment by No. 910 substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (c)(2)(A); and deleted “executive” preceding “director” in (c)(2)(C).

Cross References. Innovate Arkansas Fund, § 19-5-1237.

15-4-2710. Powers and duties of the Arkansas Economic Development Commission.

The Arkansas Economic Development Commission shall administer this subchapter and in addition to powers and duties mentioned in other laws may:

1. Promulgate rules in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., necessary to carry out the provisions of this subchapter;
2. Provide the Department of Finance and Administration with a copy of each financial incentive agreement entered into by the commission with each qualified business;
3. Assist the governing authority in obtaining assistance from any other agency of state government, including assistance to new businesses and industries;
4. Assist any employer or prospective employer with a qualifying project in obtaining the benefits of any incentive or inducement program authorized by state law;
5. Act as a liaison between other state agencies and businesses and industries to ensure that both the spirit and intent of this subchapter are met;
6. Make disbursements from the Economic Development Incentive Fund to qualified businesses as authorized in § 15-4-2707; and
7. Negotiate proposals on behalf of the state with prospective businesses that are considering locating new facilities or expanding existing facilities that would seek the incentives of the discretionary programs under this subchapter.

History. Acts 2003, No. 182, § 1; 2009, No. 716, § 11; 2019, No. 315, § 1075; 2019, No. 327, § 1.

Amendments. The 2009 amendment substituted “Arkansas Economic Development Commission” for “Department of Economic Development.”

The 2019 amendment by No. 315 deleted “and regulations” following “rules” in (1).

The 2019 amendment by No. 327 deleted “and regulations” following “rules” in (1); substituted “qualified” for “qualifying” in (2); and, in (7), substituted “incentives” for “benefits” and substituted “the discretionary programs under this subchapter” for “§ 15-4-2706(b), § 15-4-2706(e), § 15-4-2707, § 15-4-2708(c), or § 15-4-2709”.

15-4-2711. Administration.

1. A person claiming credit under § 15-4-2706(c) is a “taxpayer” within the meaning of § 26-18-104(16) and is subject to all applicable provisions of that section.
2. Administration of § 15-4-2706(c) shall be under the Arkansas Tax Procedure Act, § 26-18-101 et seq.
3. 1. All claims for sales and use tax refunds under § 15-4-2706(d) and (e) shall be filed annually with the Department of Finance and Administration within three (3) years from the date of the qualified purchase or purchases.
   2. Claims filed after three (3) years from the date of the qualified purchase or purchases shall be denied.
4. 1. The time limitation for § 15-4-2706(d) and (e) for filing claims shall be tolled if:
      1. A qualified business fails to pay sales tax on an item that was taxable; and
      2. The applicable tax is subsequently assessed as a result of an audit by the department.
   2. All claims for sales and use tax refunds relating to an audited purchase are entitled to a refund of interest paid on the amount of tax assessed on the audited purchase if a refund is approved for the purchase.
5. A qualified business shall reach the investment thresholds under § 15-4-2706 within four (4) years from the date of the approved financial incentive agreement.
6. 1. All claims for payroll rebate payments under § 15-4-2707 shall be certified to the department and shall be recertified annually thereafter during the term of the financial incentive agreement.
   2. Failure to annually certify or recertify payroll figures and claim the rebate payment shall result in:
      1. A ten-percent reduction of the earned rebate if not claimed within one (1) year from the end of the tax year in which the rebate was earned;
      2. A one hundred percent (100%) forfeiture of the earned rebate if not claimed within two (2) years from the end of the tax year in which the rebate was earned; or
      3. Termination of the financial incentive agreement if an initial certification has not been filed with the department within four (4) years after the date of the approved financial incentive agreement, unless the date has been extended by the Director of the Arkansas Economic Development Commission.
7. 1. If the annual payroll of the business applying for incentives under this subchapter is not met within two (2) years after signing the financial incentive agreement, the business may request in writing an extension of time to reach the required payroll threshold.
   2. 1. If the director and the Secretary of the Department of Finance and Administration find that the qualified business has presented compelling reasons for an extension of time, the director may grant an extension of time not to exceed four (4) years from the effective date of the financial incentive agreement.
      2. However, the extension on projects applying for incentives under § 15-4-2705 is limited to a two-year extension.
   3. 1. If a qualified business fails to reach the annual payroll threshold required under the approved financial incentive agreement, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met.
      2. If a qualified business fails to reach the annual payroll threshold required under an approved financial incentive agreement, the department has two (2) years to collect incentives previously received by the qualified business or file a lawsuit to enforce the repayment provisions.
8. 1. If a qualified business fails to reach the investment threshold before the expiration of the four-year time limit, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the investment threshold was not met.
   2. If a qualified business fails to reach the investment threshold of this subchapter under an approved financial incentive agreement, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the investment threshold has not been met or file a lawsuit to enforce the repayment provisions.
9. 1. If the annual payroll of a qualified business receiving incentives under this subchapter falls below the payroll threshold for qualification in a year subsequent to the year in which it initially qualified for the incentive, the incentives outlined in the financial incentive agreement shall be terminated unless a written application for an extension of incentives explaining why the payroll has fallen below the level required for qualification has been filed with and approved by the commission.
   2. The director and the secretary may approve the request for extension of time, not to exceed two (2) years, for the qualified business to bring the payroll back up to the requisite threshold amount and may approve the continuation of incentives during the period the extension is granted.
   3. 1. If a qualified business fails to reach the payroll threshold before the expiration of the two (2) years or the time period established by a subsequent extension of time, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met.
      2. If a qualified business fails to reach the payroll threshold required under an approved financial incentive agreement, the department has two (2) years to collect incentives previously received by the qualified business or file a lawsuit to enforce the repayment provisions.
10. 1. If a qualified business fails to reach the average hourly wage threshold for incentives under this subchapter as specified in an approved financial incentive agreement, the qualified business is liable for the repayment of all incentives previously received by the qualified business for which the average hourly wage threshold has not been met.
    2. If a qualified business fails to meet the hourly wage threshold, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the average hourly wage threshold has not been met or file a lawsuit to enforce the repayment provisions.
11. 1. Eligible businesses whose qualification depends on receiving either fifty-one percent (51%) or seventy-five percent (75%) of their sales revenue from out-of-state customers shall meet this requirement within three (3) years from the approval date of their financial incentive agreement.
    2. 1. If the requirement under subdivision (k)(1) of this section is not met within three (3) years of the approved financial incentive agreement, the qualified business may request in writing an extension of time to reach the required sales threshold.
       2. If the director finds that the qualified business has presented compelling reasons for an extension of time, the director may grant an extension of time not to exceed an additional two (2) years.
12. 1. If a qualified business fails to meet the out-of-state revenue requirements of this subchapter under the specified deadlines in the approved financial incentive agreement, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the sales threshold has not been met.
    2. If a qualified business fails to meet the out-of-state revenue requirements, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the sales threshold has not been met or file a lawsuit to enforce the repayment provisions.
13. 1. If a qualified business fails to notify the department that the annual payroll of the qualified business has fallen below the payroll threshold for qualification for and retention of any incentive authorized by this subchapter, the qualified business is liable for the repayment of all incentives that were paid to the qualified business and that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met after it no longer qualified for the incentives.
    2. If a qualified business fails to notify the department that the qualified business has fallen below the payroll threshold, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met or file a lawsuit to enforce the repayment provisions.
    3. Interest shall also be due at the rate of ten percent (10%) per annum.
14. 1. For a qualified business taking advantage of one (1) or more of the investment incentives offered in § 15-4-2706, if the project costs exceed the initial project cost estimate included in the approved financial incentive agreement, the qualified business shall submit an amended project plan to include updated cost figures as soon as the cost overrun is recognized.
    2. 1. An amendment that exceeds twenty-five percent (25%) of the original financial incentive agreement estimate shall not be approved and shall be submitted as a new project.
       2. An amendment shall not change the start date of the original project.
15. 1. The department may obtain whatever information is necessary from a qualified business and from the Division of Workforce Services to verify that a qualified business is complying with the terms of the financial incentive agreements and reporting accurate information concerning investments, payrolls, wages, and out-of-state revenues to the department.
    2. The department shall provide the information obtained under subdivision (o)(1) of this section to the director upon request by the director.
16. The department may file a lawsuit in the Pulaski County Circuit Court or the circuit court in any county where a qualified business is located to enforce the repayment provisions of this subchapter.
17. 1. If a qualified business fails to satisfy or maintain any other requirement or threshold of this subchapter, the qualified business is liable for the repayment of all incentives that were paid to the qualified business after it no longer qualified.
    2. If a qualified business fails to comply with the requirements or thresholds of this subchapter, the department has two (2) years to collect incentives previously received by the qualified business for noncompliant financial incentive agreements or file a lawsuit to enforce the repayment provisions.
18. If a repayment is required as a result of not complying with the requirements or thresholds of this subchapter, interest shall be due at the rate of ten percent (10%) per annum.

History. Acts 2003, No. 182, § 1; 2005, No. 1296, §§ 9-12; 2009, No. 625, § 2; 2009, No. 716, § 12; 2019, No. 327, § 1; 2019, No. 910, §§ 415-417.

Amendments. The 2005 amendment, in (g)(1), substituted “is not met” for “does not reach the payroll threshold necessary to qualify for benefits authorized under this subchapter” and “business may request in writing for” for “applicant may request in writing”; substituted “approved” for “applicant's” in (g)(2)(A); inserted “annual” in (g)(3)(A) and (g)(3)(B); inserted “payroll” preceding “threshold” in (i)(1) and (n)(1); substituted “time, not to exceed … is granted” for “benefits not to exceed twenty-four (24) months, and may authorize an extension of time for the business to meet the payroll requirements of the incentive received” in (i)(2); added (i)(3); inserted “sales” in (l)(1); substituted “business” for “applicant” in (l)(2)(A); deleted “applicant” preceding “business” in (l)(2)(B); and substituted “that were paid to the business after it no longer qualified” for “previously received by the business” in (r)(1).

The 2009 amendment by No. 625 rewrote (f)(2).

The 2009 amendment by No. 716 inserted “within twenty-four (24) months of the effective date of the financial incentive agreement” in (j)(1).

The 2019 amendment by No. 327 rewrote the section.

The 2019 amendment by No. 910, throughout the section, substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” and substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration”.

15-4-2712. Restrictions.

1. Except as provided in subsection (b) of this section, the incentives established by this subchapter may be combined.
2. 1. The investment tax credit authorized in § 15-4-2706(c) shall not be combined with the sales and use tax refund authorized in § 15-4-2706(d) for the same project.
   2. The following incentives for targeted businesses may be combined with each other for the same project as long as multiple incentives are not claimed for the same expenditures but shall not be combined with any other incentives authorized in this subchapter during the period in which the qualified business receives incentives under this subchapter:
      1. The investment tax credit authorized under § 15-4-2706(b)(7) may be combined with:
         1. The research and development income tax credits authorized under § 15-4-2708(b); and
         2. Either the:
            1. Payroll rebate program authorized under § 15-4-2707(e); or
            2. Payroll tax credit program authorized under § 15-4-2709;
      2. The sales and use tax refund authorized under § 15-4-2706(e) may be combined with:
         1. The research and development income tax credits authorized under § 15-4-2708(b); and
         2. Either the:
            1. Payroll rebate program authorized under § 15-4-2707(e); or
            2. Payroll tax credit program authorized under § 15-4-2709;
      3. The payroll rebate program authorized under § 15-4-2707(e) may be combined with:
         1. The research and development income tax credits authorized under § 15-4-2708(b); and
         2. Either the:
            1. Investment tax credit program authorized under § 15-4-2706(b)(7); or
            2. Sales and use tax refund program authorized under § 15-4-2706(e);
      4. The payroll income tax credit authorized under § 15-4-2709 may be combined with:
         1. The research and development income tax credits authorized under § 15-4-2708(b); and
         2. Either the:
            1. Investment tax credit authorized under § 15-4-2706(b)(7); or
            2. Sales and use tax refund program authorized under § 15-4-2706(e); and
      5. The research and development income tax credits authorized under § 15-4-2708(b) may be combined with:
         1. Either the:
            1. Payroll rebate program authorized under § 15-4-2707(e); or
            2. Payroll tax credit program authorized under § 15-4-2709; and
         2. Either the:
            1. Investment tax credit program authorized under § 15-4-2706(b)(7); or
            2. Sales and use tax refund program authorized under § 15-4-2706(e).
   3. The investment tax credit authorized in § 15-4-2706(b) shall not be combined with the sales and use tax credit authorized in § 15-4-2706(e) for the same project.
   4. The job-creation tax credit authorized in § 15-4-2705 shall not be combined with the payroll rebate program authorized in § 15-4-2707.
   5. The investment tax credit authorized in § 15-4-2706(b) shall not be combined with the sales and use tax refund authorized in § 15-4-2706(d) for the same project.
   6. The investment tax credit authorized under § 15-4-2706(b) shall not be combined with the sales and use tax credit authorized under § 15-4-2706(c) for the same project.
3. The following are discretionary incentives and are not available unless offered by the Arkansas Economic Development Commission:
   1. The payroll rebate program authorized in § 15-4-2707;
   2. The job-creation tax credit authorized in § 15-4-2709;
   3. The investment tax credit authorized in § 15-4-2706(b);
   4. The sales and use tax refund authorized in § 15-4-2706(e); and
   5. The research and development tax credits authorized in § 15-4-2708(a)-(c).

History. Acts 2003, No. 182, § 1; 2009, No. 716, § 13; 2019, No. 327, § 1.

Amendments. The 2009 amendment, in (b), inserted “for the same project” in (b)(1), inserted (b)(4) and (b)(5), and made a minor stylistic change; and substituted “Arkansas Economic Development Commission” for “Department of Economic Development” in (c).

The 2019 amendment rewrote (b)(2) through (b)(5); added (b)(6); and substituted “tax credits authorized in § 15-4-2708(a)-(c)” for “tax credit authorized in § 15-4-2708(c)” in (c)(5).

15-4-2713. [Repealed.]

Publisher's Notes. This section, concerning industrial development compacts, was repealed by Acts 2005, No. 1296, § 13. The section was derived from Acts 2003, No. 182, § 1.

15-4-2714. [Repealed.]

Publisher's Notes. This section, concerning coordination with other economic development programs, was repealed by Acts 2019, No. 327, § 2, effective July 24, 2019. The section was derived from Acts 2003, No. 182, § 1; 2005, No. 1962, § 62; 2017, No. 374, § 9.

Subchapter 28 — Biodiesel Incentive Act

Effective Dates. Acts 2003, No. 1287, § 2: effective for tax years beginning on or after January 1, 2003.

Acts 2005, No. 2223, § 3: July 1, 2005. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that petroleum is a nonrenewable energy source; that encouraging the use of nonpetroleum-based fuel is vital for the future of the environment and the economy; that this act promotes the use of other fuels; and that it is necessary that this act become effective on July 1, 2005, for the effective administration of the benefits provided in this act. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2005.”

Acts 2006 (1st Ex. Sess.), No. 10, § 2: Apr. 10, 2006. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that petroleum is a nonrenewable energy source; that encouraging the use of nonpetroleum-based fuel is vital for the future of the environment and the economy; that Arkansas Code § 15-4-2803 provided tax incentives for suppliers of biodiesel fuel; that the criteria for receiving the incentives has been interpreted in a restrictive way and therefore the incentive program has not had the impact intended; that this act corrects deficiencies in the incentive program; and that this act is immediately necessary in order for the incentive program to be effective. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

15-4-2801. Title.

This subchapter shall be known and may be cited as the “Biodiesel Incentive Act”.

History. Acts 2003, No. 1287, § 1.

15-4-2802. Definitions.

As used in this subchapter:

1. “Biodiesel fuel” means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established under the Energy Policy Act of 1992, 42 U.S.C. §§ 13211—13219, as in effect on January 1, 2005;
2. “Biodiesel mixture” means a mixture of biodiesel fuel and undyed, clear distillate special fuel that is suitable for use in motor vehicles on Arkansas highways and determined without regard to any use of kerosene that is:
   1. Sold by the supplier producing biodiesel mixture to any person for use as a fuel; or
   2. Used as a fuel by the supplier producing the biodiesel mixture;
3. “Biodiesel producer” means a business located in the State of Arkansas that uses agricultural crops, agricultural residues, or waste products, excluding recycled oils, to manufacture biodiesel fuel; and
4. “Supplier” means any person who:
   1. Is customarily in the wholesale business of offering distillate special fuels or liquefied gas special fuels for resale or use to any person in this state; and
   2. Makes bulk sales of fuel.

History. Acts 2003, No. 1287, § 1; 2005, No. 2223, § 1; 2015, No. 1149, § 1.

Amendments. The 2005 amendment substituted “diesel fuel substitute … January 1, 2005” for “renewable, biodegradable, mono alkyl ester combustible liquid fuel derived from agricultural plant oils or animal fats that meet the American Society for Testing and Material Specification D6751-02 for biodiesel fuel, or B100, blend stock fro distillate fuels, as in effect on February 1, 2003” in (1); added (2); and redesignated former (2) — (4) as present (3) — (5).

The 2015 amendment repealed former (4).

15-4-2803. Tax credit for biodiesel suppliers.

1. There shall be allowed a credit against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in an amount as determined in subsection (b) of this section to a biodiesel supplier for the cost of the facilities and equipment used directly in the wholesale or retail distribution of biodiesel fuels.
2. The amount of the credit allowed shall be equal to five percent (5%) of the cost of the facilities and equipment.
3. The costs of service contracts, sales tax, or acquisition of undeveloped land shall not be included in determining the amount of the credit.
4. 1. No income tax credit shall be claimed by a supplier for any facility or equipment that is in use on or before the certification of the company for tax credits or for which a tax credit was previously claimed by a supplier for any other tax year.
   2. The provisions of this subsection shall not apply if any entity is sold and the entity is entitled to an income tax credit under this subchapter.
   3. The tax credit provided in subsection (b) of this section may be carried forward for a period not to exceed three (3) years.

History. Acts 2003, No. 1287, § 1; 2005, No. 2223, § 2; 2006 (1st Ex. Sess.), No. 10, § 1; 2013, No. 1149, § 2.

Amendments. The 2005 amendment added (e).

The 2006 (1st Ex. Sess.) amendment deleted “that contains not more than two percent (2%) biodiesel and that is” following “mixture” in present (e)(2)(A); and added (e)(2)(B).

The 2013 amendment repealed former (e).

15-4-2804. [Repealed.]

Publisher's Notes. This section, concerning incentives for biodiesel producers, was repealed by Acts 2015, No. 1149, § 2. The section was derived from Acts 2003, No. 1287, § 1.

15-4-2805. [Repealed.]

Publisher's Notes. This section, concerning Alternative Fuels Commission rules and regulations, was repealed by Acts 2015, No. 1149, § 3. The section was derived from Acts 2003, No. 1287, § 1.

Subchapter 29 — Arkansas Workforce Investment Board and Adult Education Study Committee

15-4-2901, 15-4-2902. [Repealed.]

Publisher's Notes. This subchapter, concerning the Arkansas Workforce Investment Board and Adult Education Study Committee, was repealed by Acts 2017, No. 374, § 10. The subchapter was derived from the following sources:

15-4-2901. Acts 2003, No. 1204, § 1; 2015, No. 1115, § 24.

15-4-2902. Acts 2003, No. 1204, § 2.

Subchapter 30 — Arkansas General Obligation Economic Development Superprojects Bond and Project Funding Act

Effective Dates. Acts 2003, No. 1751, § 24, provided: “This act becomes effective on the first day of the calendar month following the ninetieth (90th) day after the sine die adjournment of this session or the first (1st) day of the calendar month following the ninetieth (90th) day after a recess or adjournment for a period longer than ninety (90) days.”

Acts 2003, No. 1751, § 25: July 1, 2003. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that there is an immediate need to begin funding the Economic Development Superproject Project Fund created by this act in order to improve the state's competitive position in the recruitment of large economic development projects, and that in the event of an extension of the Regular Session, the delay in the effective date of this act beyond July 1, 2003 could work harm upon the economic condition of the state. Therefore, an emergency is declared to exist and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2003.”

Sections 24 and 25 of Acts 2003, No. 1751, contain conflicting effective date provisions.

Acts 2009, No. 1480, § 117: Apr. 10, 2009. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act makes various revisions to Arkansas election laws that are designed to improve the administration of elections and special elections and that these revisions should be implemented as soon as possible so that the citizens of this state may benefit from improved election procedures. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-3001. Title.

This subchapter may be referred to and cited as the “Arkansas General Obligation Economic Development Superprojects Bond and Project Funding Act”.

History. Acts 2003, No. 1751, § 1.

15-4-3002. Legislative findings.

The General Assembly finds that:

1. Independent studies have confirmed that the State of Arkansas and its people have not been able to participate in and enjoy the economic development benefits to be gained from the location in Arkansas of a superproject, as have many other southern states, resulting in a loss of opportunity for our citizens and a further loss for economic expansion in Arkansas;
2. The government of the state must take bold steps to establish an adequate program for funding and financing superprojects;
3. The location in Arkansas of superprojects will help alleviate severe economic instability and economic distress among the citizens of Arkansas; and
4. A superprojects program will provide means for accelerated progress in the economic development of the state, thereby providing increased payrolls, job opportunities, and tax income to support the public services of this state.

History. Acts 2003, No. 1751, § 3.

15-4-3003. Definitions.

As used in this subchapter:

1. “Authority” means the Arkansas Development Finance Authority and any successor agency or department;
2. “Bonds” means bonds issued under this subchapter;
3. “Commission” means the Arkansas Economic Development Commission;
4. “Debt service” means principal, interest, redemption premiums, if any, and trustees', paying agents', dissemination agents', and like servicing fees relative to the bonds;
5. “Develop” means to plan, design, construct, acquire by purchase or by eminent domain, own, operate, rehabilitate, lease as lessor or lessee, enter into lease-purchase agreements with respect to, lend, make grants in respect of, or install or equip any lands, buildings, improvements, machinery, equipment, or other properties of whatever nature, real, personal, or mixed;
6. “Federal Deposit Insurance Corporation” means the federal agency by that name or any successor agency that insures deposits of commercial banks;
7. “General revenues” means the revenues described and enumerated in § 19-6-201 et seq., or in any successor law;
8. “Infrastructure of a superproject” means:
   1. Land acquisition;
   2. Site preparation;
   3. Road and highway improvements;
   4. Rail spur construction;
   5. Water service;
   6. Wastewater treatment;
   7. Employee training, which may include equipment used for the training;
   8. Environmental mitigation; and
   9. Training and research facilities and the necessary equipment for the facilities;
9. “Investment” means money expended by the sponsor on capital assets directly related to the superproject and does not include amounts expended in aid of the superproject by the state pursuant to this subchapter, or otherwise, or amounts expended in aid of the superproject by a local entity, however financed;
10. “Local entity” means any nonprofit corporation, county, city of the first class, city of the second class, incorporated town, improvement district, or school district in the state or any agency or instrumentality thereof, including the authority and the commission;
11. “Nationally recognized rating agency” means Moody's Investors Service, Inc., Standard & Poor's Ratings Group, or any other nationally recognized rating agency approved by the Treasurer of State;
12. 1. “New full-time permanent employee” means a position or job that was created pursuant to a signed incentive plan between the sponsor and the commission and that is filled by one (1) or more employees or contractual employees who are Arkansas taxpayers. The position or job held by the employee or employees must have been filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours' work per week.
    2. A contractual employee must be offered a benefits package comparable to a direct employee of the sponsor;
13. “New job” means a position for a new full-time permanent employee created at a superproject in this state but does not include a job created when an employee is shifted from an existing location in this state to a new or expanded facility if the transferred job is from or to a superproject of the sponsor or a related person;
14. “Person” means any local entity or any individual, corporation, trust, limited liability company, or partnership;
15. “Project costs” means:
    1. All or any part of the costs of developing a superproject and costs incidental or appropriate to the superproject, including without limitation, all costs to the commission associated with the development or operation of a superproject in a supervisory capacity; and
    2. Costs incidental or appropriate to the financing of the superproject, including without limitation, capitalized interest, costs of issuance of and appropriate reserves for the bonds, loan or commitment fees, loan or grant administration fees, and costs for engineering, legal, and other administrative and consultant services;
16. “Project fund” means the Economic Development Superprojects Project Fund created by this subchapter;
17. “Related person” means any entity or person that bears a relationship to the sponsor as described in 26 U.S.C. § 267, as it existed on February 1, 2003;
18. “Sponsor” means a sole proprietor, partnership, corporation, limited liability company, or association taxable as a business entity or any combination of these entities;
19. “State” means the State of Arkansas;
20. “State Apportionment Fund” means the fund by that name created by § 19-5-201 or any successor law; and
21. “Superproject” means infrastructure, land, buildings, and other improvements on the land and all other machinery, apparatus, equipment, office facilities, and furnishings that are necessary, suitable, or useful by a sponsor and in which a total of at least four hundred million dollars ($400,000,000) is invested by the sponsor and at least four hundred (400) new jobs are created at the project by the sponsor.

History. Acts 2003, No. 1751, § 2.

15-4-3004. Authority to issue bonds.

1. 1. The Arkansas Development Finance Authority, exercising an essential public function as the State of Arkansas's bond-issuing authority, is authorized by this subchapter to issue bonds to fund superprojects.
   2. The authority shall be responsible for developing the bond financing portion of the plan required by § 15-4-3005.
2. 1. As the lead economic development agency for the State of Arkansas, the Arkansas Economic Development Commission is authorized to utilize the superproject funding in attracting superprojects to Arkansas.
   2. The commission shall:
      1. Utilize economic impact and cost-benefit analysis to evaluate proposed superprojects;
      2. Be responsible for developing the portion of the plan concerning the selection and funding of the superprojects; and
      3. Be responsible for monitoring and reporting to the authority, the Governor, and the Legislative Council on the ongoing economic impact of the superproject and the sponsor's progress in meeting the requirement for their economic development investment.

History. Acts 2003, No. 1751, § 4.

15-4-3005. State of Arkansas Economic Development General Obligation Bonds.

1. The Arkansas Development Finance Authority may issue bonds of the State of Arkansas, to be known as “State of Arkansas Economic Development General Obligation Bonds”, in total principal amount not to exceed four hundred million dollars ($400,000,000) for the purposes authorized in this subchapter.
2. The bonds may be issued in one (1) or more series, as required, subject to the conditions and in compliance with the procedures provided by this subchapter.
3. The total principal amount of bonds to be issued during any fiscal biennium shall not exceed sixty million dollars ($60,000,000) unless the General Assembly shall have authorized by law a greater principal amount to be issued during a fiscal biennium.
4. Before any bonds may be issued during any fiscal biennium, the Arkansas Economic Development Commission and the authority shall submit the plan to the Legislative Council and the Governor.
5. 1. Upon receipt of the plan, the Governor shall confer with the Chief Fiscal Officer of the State concerning whether, after utilization of the balance in the Economic Development Superprojects Project Fund, any amount of general revenues will be required to be set aside for payment of debt service requirements in connection with the bonds during either year of the fiscal biennium in which the bonds are to be issued and, if any general funds are required to be used, whether such a use would cause an undue hardship upon any agency or program supported from the general revenues under the Revenue Stabilization Law, § 19-5-101 et seq.
   2. The commission's written plan shall set forth:
      1. A description of the project or projects to be financed with the proceeds derived from the sale of the bonds;
      2. A description of the economic impact and cost benefit of the proposed project or projects;
      3. The amount of bonds necessary to be issued to defray project costs and a budget of those project costs;
      4. A certification by the Director of the Arkansas Economic Development Commission that each project to benefit from the expenditure of the proceeds of the bonds consists of an investment in the state of not less than four hundred million dollars ($400,000,000) and the creation of no fewer than four hundred (400) new permanent full-time jobs; and
      5. A tentative time schedule setting forth the period of time during which the sum requested is to be expended.
   3. The authority's written plan shall set forth:
      1. A debt service table showing the annual principal and interest requirements for any bonds outstanding and to be issued; and
      2. A recommended plan of marketing for the bonds and proposed schedule of issuance dates based on the commission's proposed spending schedule.
6. 1. Upon the conclusion of the conference and after obtaining the advice of the Legislative Council, the Governor may by proclamation authorize the authority to proceed with the issuance of the bonds, in one (1) or more series, up to the maximum principal amount approved by the Governor for the fiscal biennium.
   2. If the Legislative Council fails to advise the Governor within thirty (30) calendar days after receipt of the request for advice, the Governor may proceed to issue the proclamation.
7. 1. If the Governor declines or refuses to give his or her approval for the issuance of the bonds, the Governor shall promptly notify the authority in writing, and the bonds shall not be issued.
   2. The authority may resubmit a request to the Governor for the approval of the issuance of the bonds.
   3. The issue as resubmitted to the Governor shall be dealt with in the same manner as provided for the initial request to issue the bonds.

History. Acts 2003, No. 1751, § 5; 2019, No. 910, § 418.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (e)(2)(D).

Cross References. Economic Development Superprojects Project Fund, § 19-5-1130.

15-4-3006. Qualification as a superproject.

1. 1. To qualify as a superproject, the investment and job creation requirements must be attained no later than the eighth year after the project first begins operations unless the eight-year period is extended by the Arkansas Economic Development Commission.
   2. The commission may extend the eight-year deadline for a reasonable period of time, taking into consideration general economic conditions.
2. If the investment and job creation requirements are not attained within the eight-year deadline or the extended deadline as prescribed by the commission, the sponsor shall refund to the Arkansas Development Finance Authority any funds the sponsor received under this subchapter.

History. Acts 2003, No. 1751, § 6.

15-4-3007. Series of bonds.

1. The bonds shall be issued in series in amounts sufficient to finance or refinance all or any part of a superproject's costs, with the respective series to be designated in alphabetical order or by the year in which issued, or both.
2. Each series of bonds shall have such date as the Arkansas Development Finance Authority shall determine and shall mature or be subject to mandatory sinking fund redemption as determined by the authority over a period ending not later than thirty (30) years after the date of issuing the bonds of each series.
3. Pending the issuance of bonds, the authority may issue temporary notes maturing not more than five (5) years after the date of issuance, to be exchanged for or paid from the proceeds of bonds at such time as the bonds may be issued.
4. 1. Each series of the bonds shall bear interest at the rate or rates accepted by the authority.
   2. Interest shall be payable at such times as the authority shall determine.
5. The bonds may:
   1. Be issued in the form;
   2. Be in the denominations;
   3. Be made exchangeable for bonds of another form or denomination bearing the same rate of interest and date of maturity;
   4. Be made payable at the places within or without the state;
   5. Be made subject to redemption prior to maturity in the manner and for redemption prices; and
   6. Contain other terms and conditions,
6. The bonds shall have all of the qualities of negotiable instruments or securities under the laws of this state, subject to the provision for registration of ownership.

as the authority shall determine.

History. Acts 2003, No. 1751, § 7.

Cross References. Negotiable instruments, § 4-3-101 et seq.

15-4-3008. Purpose of bonds.

1. Bonds shall be issued for the purpose of financing superprojects.
2. The proceeds of the bonds shall be applied:
   1. To the payment of project costs and the costs and expenses of issuance of the bonds;
   2. In connection with a superproject refinancing, to the repayment of indebtedness incurred to pay project costs; or
   3. For refunding of bonds as provided in this subchapter.

History. Acts 2003, No. 1751, § 8.

15-4-3009. Authorization of bonds.

1. 1. The bonds shall be authorized by resolution of the Arkansas Development Finance Authority.
   2. Each resolution shall contain terms, covenants, and conditions as deemed desirable, including without limitation, those pertaining to:
      1. The establishment and maintenance of funds and accounts;
      2. The deposit and investment of revenues and of bond proceeds; and
      3. The rights and obligations of the state, its officers and officials, the authority, and the registered owners of the bonds.
   3. 1. The resolution of the authority may provide for the execution and delivery by the authority of a trust indenture or indentures with one (1) or more banks or trust companies located within or without the state, containing any of the terms, covenants, and conditions referred to in this subchapter.
      2. The trust indenture or indentures shall be binding upon the state and its agencies, officers, and officials to the extent set forth in this subchapter.
2. Any resolution or trust indenture adopted or executed under this section shall provide that power is reserved:
   1. To apply to the payment of debt service on the bonds issued or secured under this subchapter all or any part of the revenues that may be derived from any superproject financed by the bonds or financed by the authority in some other manner; and
   2. To the extent of the revenues that the authority elects to apply to debt service, to release from any requirement of the resolution or trust indenture other revenues and resources of the state, including without limitation, the Economic Development Superprojects Project Fund revenues or other revenues required to be transferred under this subchapter.

History. Acts 2003, No. 1751, § 9.

Cross References. Economic Development Superprojects Project Fund, § 19-5-1130.

15-4-3010. Form and delivery of bonds.

1. Each bond shall:
   1. Be signed with the manual or facsimile signatures of the Governor, the Chair of the Board of Directors of the Arkansas Development Finance Authority, and the Treasurer of State; and
   2. Have affixed, imprinted, or lithographed on the bond the Great Seal of the State of Arkansas.
2. Interest coupons attached to the bonds, if any, shall be signed with the facsimile signature of the Treasurer of State.
3. Delivery of the bonds and coupons shall be valid notwithstanding any change in persons holding such offices occurring after the bonds have been executed.

History. Acts 2003, No. 1751, § 10.

15-4-3011. Sale and price of bonds.

1. The bonds may be sold in the manner, either at public or private sale, and upon terms as determined by the Arkansas Development Finance Authority to be reasonable and expedient for effectuating the purposes of this subchapter.
2. The bonds may be sold at the price the authority determines acceptable, including sale at a discount.
3. The authority may employ administrative agents, fiscal agents, underwriters, architects, accountants, engineers, and legal counsel and may pay them reasonable compensation from the proceeds of the bonds.
4. The proceeds from the sale of the bonds may be used to pay:
   1. The fees of any trustee or paying agent;
   2. The costs of publication of notices;
   3. The costs of publication of the printing of the bonds;
   4. The costs of publication of official statements and other documents relating to the sale of the bonds;
   5. The fees of any rating agency; and
   6. Other reasonable costs incurred by the authority for issuing and selling the bonds.

History. Acts 2003, No. 1751, § 11.

15-4-3012. Deposit of bond proceeds.

1. The proceeds from the sale of the bonds, together with all revenues derived by the Arkansas Development Finance Authority from any superproject financed or refinanced under this subchapter shall be deposited by the recipient, as received, into trust funds either established in the State Treasury or into accounts established outside the State Treasury in the name of the authority to accomplish the purposes of this subchapter, in amounts or portions as set forth in the resolution or trust indenture authorizing or securing the bonds issued to finance or refinance the superproject.
2. There is created as a trust fund in the State Treasury an account designated as the “Economic Development Superprojects Project Fund” to provide for payment of all or a part of debt service on bonds issued under this subchapter and to directly fund superprojects on a pay-as-you-go basis should bonds neither be approved nor issued.
3. 1. The Treasurer of State shall establish separate accounts and subaccounts within the fund to correspond to the applicable series of bonds.
   2. In addition, there may be created in the State Treasury other funds, accounts, or subaccounts as the authority may determine to be necessary to accomplish the purposes of this subchapter.
4. All procedures and methods for application of proceeds of any series of bonds to the financing or refinancing of project costs shall be developed in consultation with and approved by the Arkansas Economic Development Commission and shall be set forth in writings and shall be maintained as part of the records of the authority.
5. Any arrangements undertaken pursuant to subsection (b) of this section whereby a local entity will administer funds composed in whole or in part of proceeds of bonds or disbursements from the fund shall include provision for the auditing of the funds no less frequently than annually.
6. The proceeds from the sale of the bonds together with all revenues derived by the authority from any superproject financed or refinanced under this subchapter may be invested and reinvested by the Treasurer of State in any of the following:
   1. Direct obligations of the United States, including obligations issued or held in book entry form on the books of the United States Department of the Treasury or obligations the principal of and interest on which are unconditionally guaranteed by the United States;
   2. Bonds, debentures, notes, or other evidences of indebtedness issued or guaranteed by any United States Government agency if the obligations are backed by the full faith and credit of the United States;
   3. Non-full faith and credit senior debt obligations issued or guaranteed by United States Government agencies;
   4. Money market funds investing exclusively in the investments described in subdivisions (f)(1)-(3) of this section;
   5. 1. Certificates of deposit providing for deposits secured at all times by collateral described in subdivisions (f)(1)-(3) of this section.
      2. The certificates must be issued by commercial banks whose deposits are insured by the Federal Deposit Insurance Corporation and whose collateral must be held by a third party.
      3. The Treasurer of State, or assigns, must have a perfected first security interest in the collateral;
   6. Certificates of deposit, savings accounts, deposit accounts, or money market deposits, all of which are fully insured by the Federal Deposit Insurance Corporation;
   7. Bonds or notes issued by this state or any municipality, county, or school district in this state, or any agency or instrumentality thereof;
   8. Investment agreements with financial institutions or insurance companies that are rated in one (1) of the two (2) highest rating categories of a nationally recognized rating agency;
   9. Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm to the Treasurer of State, and the transfer of cash from the Treasurer of State to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Treasurer of State in exchange for the securities at a specified date. Repurchase agreements must satisfy the following criteria:
      1. Repurchase agreements must be between the Treasurer of State and a dealer bank or securities firm described as follows:
         1. Dealers with at least one hundred million dollars ($100,000,000) in capital; or
         2. Banks whose deposits are insured by the Federal Deposit Insurance Corporation; and
      2. The written repurchase agreement contract must include the following:
         1. Securities that are acceptable for transfer are those listed in subdivisions (f)(1)-(3) of this section;
         2. The term of the repurchase agreement may not exceed thirty (30) calendar days;
         3. The collateral must be delivered to the Treasurer of State, a trustee if a trustee is not supplying the collateral, or a third party acting as agent for the trustee if the trustee is supplying the collateral before or simultaneous with payment; and
         4. 1. The securities must be valued weekly, marked-to-market at current market price plus accrued interest.
            2. 1. The value of collateral must be equal to one hundred three percent (103%) of the amount of cash transferred by the Treasurer of State to the dealer bank or security firm under the repurchase agreement plus accrued interest.
               2. If the value of securities held as collateral declines below one hundred three percent (103%) of the value of the cash transferred by the Treasurer of State, then additional cash or acceptable securities, or both, must be transferred and held by the Treasurer of State; and
   10. Any other investment authorized by state law.

History. Acts 2003, No. 1751, § 12.

Cross References. Economic Development Superprojects Project Fund, § 19-5-1130.

15-4-3013. Powers of the Arkansas Economic Development Commission.

In addition to powers conferred under other laws, the Arkansas Economic Development Commission may take any action necessary to carry out the purposes of this subchapter, including the power to:

1. Provide loans and grants from bond proceeds or project revenues to local entities and to authorize local entities to make loans to other persons for financing superprojects;
2. Cause the Arkansas Development Finance Authority to purchase with bond proceeds or project revenues, bonds or notes from a local entity in order to provide funds for financing superprojects and to enter into note and bond purchase agreements in connection with those purchases;
3. Fix, regulate, and collect rates, fees, rents, or other charges for making any loan or commitment under this subchapter and for performing accounting and loan servicing duties relating to the loans;
4. Require audits of all accounts related to construction, operation, or maintenance of any superproject funded by this subchapter;
5. Take reasonable actions necessary to ensure that debt service requirements are met;
6. Refinance loans made by the authority from whatever source to local entities in order to develop a superproject;
7. Provide loans from bond proceeds or project revenues to local entities for the purpose of refinancing indebtedness of the local entity incurred for the purpose of financing a superproject; and
8. Take any other action necessary to accomplish the purposes of this subchapter.

History. Acts 2003, No. 1751, § 13.

15-4-3014. General obligations bonds.

1. The bonds shall be direct general obligations of the state for the payment of debt service on which the full faith and credit of the state are irrevocably pledged so long as any of the bonds are outstanding.
2. The bonds shall be payable from the Economic Development Superprojects Project Fund and, if necessary, from general revenues, and such amount of general revenues as may be necessary is pledged to the payment of debt service on the bonds and shall be and remain pledged for those purposes.

History. Acts 2003, No. 1751, § 14.

Cross References. Economic Development Superprojects Project Fund, § 19-5-1130.

15-4-3015. Annual determination of moneys required for bond repayment.

1. 1. On or before commencement of each fiscal year, the Chief Fiscal Officer of the State shall determine the estimated amount required for payment of all or a part of the debt service on the bonds issued during the fiscal year and deduct therefrom the estimated moneys to be available to the Arkansas Development Finance Authority from other sources and the amount available in the Economic Development Superprojects Project Fund to determine what amount of general revenues, if any, will be required.
   2. The Chief Fiscal Officer of the State shall certify the estimated amount to the Treasurer of State.
   3. The Treasurer of State shall then make monthly transfers from the Economic Development Superprojects Project Fund and, if necessary, from the State Apportionment Fund to the bond fund of the amount of general revenues as shall be required to pay the maturing debt service on the bonds.
2. 1. The obligation to make monthly transfers of general revenues from the State Apportionment Fund to the bond fund shall constitute a first charge against the general revenues prior to all other uses to which the general revenues are devoted, either under present law or under any laws that may be enacted in the future.
   2. To the extent other general obligation bonds of the state may have been issued or may subsequently be issued, they shall rank on a parity of security with respect to payment from general revenues.
3. 1. Moneys credited to the Economic Development Superprojects Project Fund shall be used for the purposes identified in § 15-4-3012(b), and for those purposes the Treasurer of State is designated as the disbursing officer to administer those funds in accordance with this subchapter.
   2. If no bonds are issued, upon the request of the Arkansas Economic Development Commission and with the approval of the Governor, moneys in the Economic Development Superprojects Project Fund may be used on a pay-as-you-go basis as commission grants to local entities for infrastructure project costs.
4. Moneys in the bond fund over and above the amount necessary to ensure the prompt payment of debt service on the bonds and the establishment and maintenance of a reserve fund, if any, may be used for the redemption of bonds prior to maturity in the manner and in accordance with the provisions pertaining to redemption prior to maturity as set forth in the resolution or trust indenture authorizing or securing the bonds.

History. Acts 2003, No. 1751, § 15.

Cross References. Economic Development Superprojects Project Fund, § 19-5-1130.

State Apportionment Fund, § 19-5-201.

15-4-3016. Exemption from taxes.

1. All bonds issued under this subchapter and interest on the bonds are exempt from all state and local taxes.
2. The bonds shall be eligible to secure deposits of all public funds and shall be legal for investment of bank, fiduciary, insurance company, trust, and public funds.

History. Acts 2003, No. 1751, § 16.

15-4-3017. Refunding bonds.

1. 1. Bonds may be issued under this subchapter for the purpose of refunding any outstanding bonds issued pursuant to this subchapter.
   2. The Arkansas Development Finance Authority shall not be required to include bonds issued pursuant to this section in any written plan submitted to the Governor under § 15-4-3005, and the bonds shall not be subject to the requirements for the approval and proclamation of the Governor as set forth in § 15-4-3005.
2. 1. The refunding bonds may be either sold for cash or delivered in exchange for the outstanding obligations.
   2. If sold for cash, the proceeds may be either applied to the payment of the obligations refunded or deposited into an irrevocable trust for the retirement thereof either at maturity or on an authorized redemption date.
3. 1. Refunding bonds shall in all respects be authorized, issued, and secured in the manner provided for the bonds being refunded and shall have all the attributes of the refunded bonds.
   2. To the extent that the refunding bonds are not in a greater principal amount than the outstanding principal amount of the bonds being refunded, the principal amount of the refunding bonds shall not be subject to the limit of four hundred million dollars ($400,000,000) set forth in § 15-4-3005(a) or the limit of sixty million dollars ($60,000,000) set forth in § 15-4-3005(c).
4. The resolution or trust indenture under which the refunding bonds are issued shall provide that any refunding bonds shall have the same priority of payment as was enjoyed by the obligations refunded.

History. Acts 2003, No. 1751, § 17.

15-4-3018. Contractual obligations of state — Enforcement.

1. This subchapter shall constitute a contract between the state and the registered owners of all bonds issued under this subchapter that shall never be impaired, and any violation of its terms, whether under purported legislative authority or otherwise, shall be enjoined by the courts at the suit of any bondholder or any taxpayer.
2. 1. In like suit against the Arkansas Development Finance Authority, the Treasurer of State, or other appropriate agency, officer, or official of the state, the courts shall prevent a diversion of any revenues pledged and shall compel the restoration of diverted revenues by injunction or mandamus.
   2. Without limitation as to any other appropriate remedy at law or in equity, any bondholder, by an appropriate action, including without limitation, injunction or mandamus, may compel the performance under this subchapter of all covenants and obligations of the state and its officers and officials.

History. Acts 2003, No. 1751, § 18.

15-4-3019. No rights until first series of bonds sold and delivered — Outstanding bonds unaffected.

1. This subchapter shall not create any right of any character, and no right of any character shall arise under it unless and until the first series of bonds authorized by this subchapter are sold and delivered.
2. The issuance of bonds authorized by this subchapter shall not impair or affect any outstanding bonds of the Arkansas Development Finance Authority issued under prior acts.

History. Acts 2003, No. 1751, § 19.

15-4-3020. Consent by qualified electors to issue bonds.

1. No bonds shall be issued under this subchapter except by and with the consent of a majority of the qualified electors of the state voting on the question in substantially the form described in this section at a special election called by proclamation of the Governor.
2. The proclamation shall be issued in accordance with § 7-11-201 et seq., and notice of the special election shall be given by publication of the proclamation by one (1) insertion in one (1) newspaper of general circulation published in each county in the state not less than thirty (30) calendar days prior to the date of the election.
3. If there is no newspaper regularly published in a county, the proclamation may be published in any newspaper having a general circulation in the county.
4. In the case of the notice or proclamation for the election, it is not necessary to publish this subchapter in its entirety, but the notice or proclamation shall state that it is issued for the purpose of submitting to the people the following question:
5. The title of this subchapter shall be the ballot title, and there shall be printed on the ballot the proposition stated in subsection (d) of this section, and the following:
6. 1. The county boards of election commissioners of the several counties of the state shall conduct the election.
   2. Each board shall take action with respect to the appointment of election officials and other matters as the law requires.
   3. The vote shall be canvassed and the result declared in each county by the several boards.
   4. The results shall be certified within ten (10) calendar days after the date of the election by the boards to the Secretary of State, who shall tabulate all returns so received and certify to the Governor the total vote for and against the proposition.
   5. The result of the election shall be proclaimed by the Governor by publication one (1) time in a newspaper published in the City of Little Rock, and the results as proclaimed shall be conclusive unless attacked in the courts within thirty (30) calendar days after the date of the publication.

“Shall the Arkansas Development Finance Authority be authorized to issue general obligation bonds under the authority of the Arkansas General Obligation Economic Development Superprojects Bond and Project Funding Act in total principal amount not to exceed four hundred million dollars ($400,000,000), in series from time to time in principal amounts not to exceed, without prior approval of the General Assembly, sixty million dollars ($60,000,000) in any fiscal biennium, for the financing and refinancing of superprojects as defined in the Arkansas General Obligation Economic Development Superprojects Bond and Project Funding Act, which bonds shall be secured by a pledge of the full faith and credit of the State of Arkansas?”

“FOR Issuance of State of Arkansas Economic Development Superprojects General Obligation Bonds

“AGAINST Issuance of State of Arkansas Economic Development Superprojects General Obligation Bonds

History. Acts 2003, No. 1751, § 20; 2005, No. 2145, § 58; 2007, No. 1049, § 80; 2009, No. 1480, § 98.

Amendments. The 2005 amendment added (b)(2).

The 2007 amendment rewrote (b).

The 2009 amendment substituted “§ 7-11-201 et seq.” for “§ 7-5-103(b)” in (b).

15-4-3021. Vote on issuance of bonds by qualified electors.

1. If a majority of the qualified electors voting on the question vote for the issuance of the bonds, the Arkansas Development Finance Authority shall proceed with the sale and the issuance of the bonds as provided in this subchapter.
2. If a majority of the qualified electors voting on the question vote against the issuance of the bonds, none of the bonds authorized by this subchapter shall ever be sold or issued.

History. Acts 2003, No. 1751, § 21.

15-4-3022. Legal actions heard as preferred cause — Appeals.

Any case involving the validity of this subchapter or involving the bonds issued under this subchapter shall be deemed of public interest and shall be advanced by all courts and heard as a preferred cause, and all appeals from judgments or decrees rendered in the cases must be taken within thirty (30) calendar days after rendition of the judgment or decree.

History. Acts 2003, No. 1751, § 22.

15-4-3023. Construction.

This subchapter shall:

1. Be liberally construed to accomplish its purposes;
2. Constitute the sole authority necessary to accomplish its purposes; and
3. 1. Be interpreted to supplement existing laws conferring rights and powers upon the Arkansas Development Finance Authority.
   2. The rights and powers under this subchapter shall be regarded as alternate methods for the accomplishment of the purposes of this subchapter.

History. Acts 2003, No. 1751, § 23.

Subchapter 31 — Nonprofit Incentive Act of 2005

15-4-3101 — 15-4-3107. [Repealed.]

Publisher's Notes. This subchapter, concerning the Nonprofit Incentive Act of 2005, was repealed by Acts 2017, No. 208, § 1. The subchapter was derived from the following sources:

15-4-3101. Acts 2005, No. 1277, § 1.

15-4-3102. Acts 2005, No. 1277, § 1.

15-4-3103. Acts 2005, No. 1277, § 1; 2009, No. 795, § 1.

15-4-3104. Acts 2005, No. 1277, § 1; 2009, No. 795, § 2.

15-4-3105. Acts 2005, No. 1277, § 1; 2009, No. 795, § 3.

15-4-3106. Acts 2005, No. 1277, § 1; 2009, No. 795, § 4.

15-4-3107. Acts 2005, No. 1277, § 1.

Subchapter 32 — Arkansas Amendment 82 Implementation Act

Effective Dates. Acts 2005, No. 1981, § 4: Apr. 11, 2005. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the State of Arkansas has been disadvantaged in its ability to effectively compete for large economic development projects due to its inability to quickly raise revenues through the issuance of general obligation bonds; that attracting a project would significantly benefit the economic development of the state by providing increased payrolls, job opportunities, and tax income; that the citizens of the State of Arkansas recognized the missed opportunities caused by this competitive disadvantage through their overwhelming approval of Amendment 82; and that this act is immediately necessary in order to effectuate the will of the people and position the State of Arkansas to act expeditiously in securing a project in the state. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-3201. Title.

This subchapter shall be known and may be cited as the “Arkansas Amendment 82 Implementation Act”.

History. Acts 2005, No. 1981, § 1.

15-4-3202. Definitions.

As used in this subchapter:

1. “Amendment 82 agreement” means a contract between the state and a sponsor under which the state is to provide Amendment 82 bond financing in exchange for the sponsor's agreeing to make an investment and to locate a new business or substantially expand an existing business in the State of Arkansas in accordance with the requirements of Arkansas Constitution, Amendment 82, and this subchapter. At a minimum, the agreement shall contain the following provisions:
   1. The infrastructure needs or other needs, or both, to be provided by the state in support of the qualified Amendment 82 project and financed under Arkansas Constitution, Amendment 82, and this subchapter;
   2. A description of all other economic incentives to be provided by the state in connection with the qualified Amendment 82 project;
   3. The commitments of the sponsor, if any, with regard to investment and job creation associated with the qualified Amendment 82 project, including timetables for meeting and maintaining any investment and job creation requirements;
   4. The agreement of the sponsor to make all specified records pertaining to the sponsor's commitments available for annual audit by the Chief Fiscal Officer of the State and, upon request, but no more often than annually, by the Office of Economic and Tax Policy of the Bureau of Legislative Research or a person or entity retained by the office;
   5. Performance benchmarks and economic goals of the qualified Amendment 82 project; and
   6. The penalties to be applied if the sponsor does not satisfy its commitments under the Amendment 82 agreement;
2. “Average hourly wage” means the weekly earnings, excluding overtime, bonuses, and company-paid benefits, of all new full-time permanent employees hired after the execution date of the Amendment 82 agreement divided by forty (40) and then divided by the number of new full-time permanent employees;
3. “Bonds” means general obligation bonds issued under Arkansas Constitution, Amendment 82, and this subchapter;
4. “Chief Fiscal Officer of the State” means the Chief Fiscal Officer of the State of Arkansas, who is also the Secretary of the Department of Finance and Administration;
5. “Contractual employee” means an employee who:
   1. May be included in the payroll calculations of a sponsor qualifying for bond financing under Arkansas Constitution, Amendment 82, and this subchapter and is under the direct supervision of the sponsor receiving benefits under Arkansas Constitution, Amendment 82, and this subchapter, but is an employee of a business other than the one receiving benefits under Arkansas Constitution, Amendment 82, and this subchapter;
   2. Otherwise meets the requirements of a new full-time permanent employee of the sponsor receiving benefits under Arkansas Constitution, Amendment 82, and this subchapter;
   3. Receives an average hourly wage that exceeds the lesser of:
      1. The county average hourly wage for the county in which the position or job is located; or
      2. The state average hourly wage; and
   4. Receives a benefits package, including, without limitation, health and retirement benefits comparable to direct employees of the sponsor receiving benefits under Arkansas Constitution, Amendment 82, and this subchapter;
6. “County average hourly wage” means the weighted average weekly earnings for Arkansas residents in all industries countywide as calculated by the Division of Workforce Services in its most recent Annual Covered Employment and Earnings publication, divided by forty (40);
7. “Debt service” means principal, interest, redemption premiums, if any, and servicing fees relative to the bonds, including without limitation:
   1. Trustees' fees;
   2. Paying agents' fees;
   3. Dissemination agents' fees;
   4. Administrative fees;
   5. Issuer's fees;
   6. Guarantee fees;
   7. Counsel fees; and
   8. Fees related to arbitrage compliance or rebate calculations;
8. 1. “Existing employee” means an employee hired by a sponsor before the date the Amendment 82 agreement was executed.
   2. An existing employee may be considered a new full-time permanent employee for purposes of Arkansas Constitution, Amendment 82, and this subchapter only if:
      1. The position or job filled by the existing employee was created in accordance with the Amendment 82 agreement; and
      2. The position vacated by the existing employee was filled by a subsequent employee who was not an existing employee, or no subsequent employee will be hired because the sponsor no longer conducts the particular business activity requiring that employee;
9. “Federal Deposit Insurance Corporation” means the federal agency by that name or any successor agency that insures deposits of commercial banks;
10. “General revenues” means the revenues of the state described and enumerated in § 19-6-201 or in any successor law;
11. “Infrastructure needs” means:
    1. Land acquisition;
    2. Site preparation;
    3. Road and highway improvements;
    4. Rail spur, railroad, and railport construction;
    5. Water service;
    6. Wastewater treatment;
    7. Employee training, which may include equipment used for the training;
    8. Environmental mitigation or reclamation;
    9. Training and research facilities and the necessary equipment for the facilities; or
    10. Any other facility, activity, or infrastructure determined by the General Assembly to fall within the parameters of Arkansas Constitution, Amendment 82;
12. 1. “Investment” means money expended by the sponsor on capital assets physically located within the state and directly related to the qualified Amendment 82 project, but which are not required to be owned by the sponsor.
    2. “Investment” shall not include amounts expended in aid of the qualified Amendment 82 project by the state under Arkansas Constitution, Amendment 82, and this subchapter, or otherwise, or amounts expended in aid of the qualified Amendment 82 project by a local entity, however financed, which are not required to be repaid by the sponsor;
13. “Letter of commitment” means a binding agreement signed by a sponsor and the Arkansas Economic Development Commission that at a minimum contains the following provisions:
    1. A determination by the commission that the sponsor has the financial capability, business history, and corporate intent to implement and maintain a qualified Amendment 82 project;
    2. A commitment by the sponsor that the sponsor intends to locate a new business or substantially expand an existing business in the State of Arkansas and a description of any other commitments made by the sponsor;
    3. A tentative timetable for development of the proposed project;
    4. The consequences if the sponsor does not satisfy its obligations under the letter of commitment; and
    5. A statement from the commission that its obligation under the letter of commitment is limited to presenting the letter of commitment and supporting documentation to the Governor, who may or may not elect to present the proposal to the General Assembly for its consideration;
14. “Local entity” means any nonprofit corporation, county, city of the first class, city of the second class, incorporated town, improvement district, school district, or any agency or instrumentality of the state, including the Arkansas Development Finance Authority and the commission;
15. “Nationally recognized rating agency” means Moody's Investors Service, Inc., Standard & Poor's Ratings Services, Fitch Ratings, Inc., or any other nationally recognized rating agency approved by the Treasurer of State;
16. “New full-time permanent employee” means a position or job that is created under an Amendment 82 agreement and that is filled by one (1) employee or contractual employee who is an Arkansas taxpayer. In order to count toward the job creation requirements of Arkansas Constitution, Amendment 82, and this subchapter:
    1. The position or job held by the employee must be filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours' work per week;
    2. The employee must receive an average hourly wage that exceeds the lesser of:
       1. The county average hourly wage for the county in which the position or job is located; or
       2. The state average hourly wage;
    3. The employee must receive a benefits package, including without limitation, health and retirement benefits; and
    4. The employee is not an existing employee;
17. 1. “New job” means a position for a new full-time permanent employee created at a qualified Amendment 82 project in the state.
    2. “New job” shall not include a job filled by an existing employee;
18. “Other needs” means financial or other noninfrastructure incentives that are approved by the General Assembly as part of a qualified Amendment 82 project and may include, without limitation, transactions that include loans, grants, or lease arrangements;
19. “Outstanding bonded indebtedness” means the principal balance of all bonds issued under Arkansas Constitution, Amendment 82, and this subchapter;
20. “Project costs” means:
    1. All or any part of the costs of infrastructure needs or other needs for a proposed or qualified Amendment 82 project and costs incidental or appropriate to the proposed or qualified Amendment 82 project, including without limitation:
       1. All costs incurred by the sponsor in developing a proposed project or qualified Amendment 82 project, whether before or after the Amendment 82 agreement has been executed and bonds have been issued under this subchapter; and
       2. All costs to the commission associated with the development or operation of a qualified Amendment 82 project in a supervisory capacity; and
    2. Costs incidental or appropriate to the financing of the proposed or qualified Amendment 82 project, including without limitation:
       1. Capitalized interest;
       2. Costs of issuance;
       3. Funding of appropriate reserves for the bonds;
       4. Loan fees;
       5. Guarantee fees;
       6. Commitment fees;
       7. Grant administration fees;
       8. Surety bond premiums;
       9. Bond insurance;
       10. Credit enhancement;
       11. Fees of nationally recognized rating agencies;
       12. Liquidity facilities fees; and
       13. Costs for engineering, legal, and other administrative and consultant services;
21. “Proposed project” means a project which if developed as proposed would meet the criteria for a qualified Amendment 82 project and is therefore properly considered under Arkansas Constitution, Amendment 82, and this subchapter;
22. “Qualified Amendment 82 project” means a proposed project that has satisfied the requirements of Arkansas Constitution, Amendment 82, and this subchapter with respect to which the General Assembly has approved the issuance of bonds under Arkansas Constitution, Amendment 82, and this subchapter;
23. “Related entity” means any entity or person that bears a relationship to the sponsor as described in 26 U.S.C. § 267, as in existence on January 1, 2005;
24. “Sponsor” means a sole proprietor, partnership, corporation, limited liability company, joint venture, or association taxable as a business entity, or any combination of these entities, that qualifies as an eligible business under the Consolidated Incentive Act of 2003, § 15-4-2701 et seq.; and
25. “State average hourly wage” means the weighted average weekly earnings for Arkansas residents in all industries statewide as calculated by the Division of Workforce Services in its most recent Annual Covered Employment and Earnings publication, divided by forty (40).

History. Acts 2005, No. 1981, § 1; 2011, No. 1047, §§ 1, 2; 2015, No. 593, §§ 1-4; 2017, No. 685, § 2; 2019, No. 910, §§ 419-421.

Amendments. The 2011 amendment inserted “if any” in (1)(C); substituted “the sponsor's commitments” for “investment and job creation requirements under Arkansas Constitution, Amendment 82” in (1)(D); and substituted “and a description of any other commitments made by the sponsor” for “that will require an investment by the sponsor of more than five hundred million dollars ($500,000,000) and will create more than five hundred (500) new jobs” in (13)(B).

The 2015 amendment inserted “or other needs, or both” in (1)(A); in (10), substituted “General” for “Gross general” and inserted “of the state”; deleted (16); substituted “infrastructure needs or other needs for” for “developing” in present (20)(A); inserted (20)(A)(i) and inserted the (20)(A)(ii) designation.

The 2017 amendment inserted “railroad, and railport” in (11)(D); and added “or reclamation” in (11)(H).

The 2019 amendment substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration” in (4); and substituted “Division of Workforce Services” for “Department of Workforce Services” in (6) and (25).

15-4-3203. Amendment 82 project qualification.

1. 1. 1. In exercising its responsibilities under Arkansas Constitution, Amendment 82, § 1, the General Assembly delegates, authorizes, and directs the Arkansas Economic Development Commission, the Arkansas Development Finance Authority, and the Chief Fiscal Officer of the State to undertake a review of all proposed projects following the procedures described in this section.
      2. In order to be considered for qualification, a sponsor must fall within the definition of an “eligible business”, as defined in § 15-4-2703.
   2. If the Governor refers a proposed project to the General Assembly under subsection (h) of this section, the commission and the authority shall prepare and provide to each member of the General Assembly the reports described in subsection (i) of this section, after which the General Assembly shall make the final and definitive decisions concerning the proposed project as set forth in subsection (j) of this section.
2. 1. As the lead economic development agency for the State of Arkansas, the commission may propose the use of Amendment 82 bonds to finance infrastructure and other needs in any combination in order to attract proposed projects to the State of Arkansas.
   2. In addition to powers conferred under other laws, the commission may take any reasonable action necessary to carry out the purposes of Arkansas Constitution, Amendment 82, and this subchapter.
   3. The proposed use of Amendment 82 financing by the commission shall not prohibit the commission, the state, or any local entity from using any other available economic incentives in connection with a proposed project.
3. The commission shall initiate the process of selecting a proposed project for referral to the General Assembly by performing an economic impact and cost-benefit analysis to evaluate the capability of a sponsor and the feasibility of a proposed project and to determine if the proposed project has the potential to be a qualified Amendment 82 project. The economic impact and cost-benefit analysis shall include all other economic incentives offered by the state in connection with the proposed project.
4. If the commission determines that a proposed project has the potential to become a qualified Amendment 82 project, the commission shall refer the proposal and the commission's findings to the authority so that the authority may perform an initial assessment of the feasibility and impact of issuing Amendment 82 bonds in connection with the proposed project, including the state's ability to cover projected debt service obligations and the impact on the overall rating of the state's general obligation bonded indebtedness, including without limitation, bonds issued under Arkansas Constitution, Amendment 82, and this subchapter.
5. If the authority's initial assessment is that Amendment 82 bond financing for the proposed project is feasible, the authority shall notify the commission, and the commission shall refer the proposal and the findings of the commission and the authority to the Chief Fiscal Officer of the State for review of the impact of the proposed Amendment 82 bond financing on any agency or program supported from the general revenues under the Revenue Stabilization Law, § 19-5-101 et seq.
6. If the Chief Fiscal Officer of the State's initial assessment is that the proposed Amendment 82 financing will not have a substantially negative impact on any agency or program supported from general revenues, then:
   1. The Chief Fiscal Officer of the State shall notify the commission; and
   2. The commission shall make a formal proposal to the sponsor detailing the state's proposed offer with respect to Amendment 82 financing and all other economic incentives offered by the state in connection with the proposed project.
7. 1. If the sponsor of a proposed project determines to accept Amendment 82 financing, then the sponsor and the commission, on behalf of the state, shall sign a letter of commitment.
   2. The commission shall forward the letter of commitment and the findings and recommendations of the commission, the authority, and the Chief Fiscal Officer of the State to the Governor for review.
   3. 1. The commission shall also forward the letter of commitment, the findings and recommendations of the commission, the authority, and the Chief Fiscal Officer of the State, and all supporting documentation to the Office of Economic and Tax Policy of the Bureau of Legislative Research on behalf of the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
      2. 1. At the direction of the President Pro Tempore of the Senate or the Speaker of the House of Representatives, the office shall arrange for an independent confirmation of the economic impact and cost-benefit analysis performed by the commission or an independent economic impact and cost-benefit analysis of the proposed project to be completed within twenty (20) working days after the receipt of the letter of commitment.
         2. All information forwarded to the President Pro Tempore of the Senate and the Speaker of the House of Representatives by the commission and any resulting information related to the confirmation of the commission's economic impact and cost-benefit analysis or independent economic impact and cost-benefit analysis:
            1. Shall be considered working papers of the President Pro Tempore of the Senate and the Speaker of the House of Representatives under § 25-19-105(b)(7) and shall not be open to inspection and copying by any citizen of the State of Arkansas; and
            2. Is specifically exempt from the requirements of § 25-19-105(a).
8. If the Governor determines that it is in the best interest of the state to pursue Amendment 82 financing for the proposed project, the Governor shall refer the proposed project to the General Assembly in regular session, fiscal session, or extraordinary session in order for the General Assembly to consider whether to approve the issuance of bonds under Arkansas Constitution, Amendment 82, and this subchapter.
9. 1. In order to expedite review by the General Assembly, the commission and the authority shall prepare and provide to each member of the General Assembly the reports described in subdivisions (i)(2) and (3) of this section.
   2. The commission's report shall include:
      1. A description of the proposed project;
      2. 1. An itemization of the proposed infrastructure needs and other needs to be financed with the proceeds derived from the sale of Amendment 82 bonds.
         2. The itemization shall include estimated costs and details to the maximum extent available at the time of the report;
      3. A description of all other economic incentives to be provided by the state in connection with the proposed project;
      4. A description of the economic impact and cost-benefit analyses of the proposed project for a period of at least ten (10) years that includes:
         1. The annual projected benefit to the state from increased sales and use tax and income tax revenue;
         2. The annual projected cost to the state for each economic incentive offered to the sponsor in connection with the proposed project; and
         3. The overall net present value benefit-to-cost ratio for the period of at least ten (10) years;
      5. The amount of bonds necessary to be issued to defray project costs and a budget of the project costs;
      6. A tentative time schedule setting forth the period of time during which the proceeds of the Amendment 82 bonds are to be expended;
      7. A statement by the Director of the Arkansas Economic Development Commission based on and outlining the:
         1. Terms of the letter of the commitment;
         2. Estimated dollar amount of investment in the state from the proposed project; and
         3. Estimated number of new jobs to be created by the proposed project;
      8. A copy of the signed letter of commitment for the proposed project; and
      9. A copy of the unexecuted Amendment 82 agreement for the proposed project.
   3. The authority's report shall include:
      1. A schedule of projected debt service, including all fees, showing the annual principal and interest requirements for any Amendment 82 bonds outstanding, if applicable, and the projected debt service for the Amendment 82 bonds proposed to be issued for the proposed project;
      2. A projected schedule of revenues, if any, to be received by the state from the sponsor in connection with its use of the infrastructure needs and other needs associated with the proposed project;
      3. An initial plan of marketing for the bonds and a proposed schedule of issuance dates, including without limitation, the number of series to be issued and an estimated timeline for the series based on the commission's proposed spending schedule; and
      4. A preliminary and estimated sources and uses table.
10. If the General Assembly determines that the proposed project is of the nature intended by the electors of the state to be financed with Amendment 82 bonds and approves the Amendment 82 agreement, it shall take appropriate legislative action to:
    1. Declare the proposed project a qualified Amendment 82 project;
    2. Establish any additional parameters deemed necessary by the General Assembly for the general structure of the qualified Amendment 82 project, including without limitation, penalty provisions;
    3. Authorize the execution of the Amendment 82 agreement in substantially the same form as presented to the General Assembly; and
    4. Authorize the issuance of Amendment 82 bonds.

History. Acts 2005, No. 1981, § 1; 2009, No. 962, § 31; 2011, No. 1047, §§ 3, 4; 2015, No. 593, § 5; 2019, No. 910, § 422.

Amendments. The 2009 amendment, in (h), inserted “session, fiscal session” preceding “or special session” and made a minor punctuation change.

The 2011 amendment added (a)(1)(B); and rewrote (i)(2)(G).

The 2015 amendment deleted “gross” preceding “general revenues” in (e) and (f).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in the introductory language of (i)(2)(G).

15-4-3204. Amendment 82 agreement.

As soon as practicable after the General Assembly's approval of the issuance of bonds and before the Arkansas Development Finance Authority issues bonds, the Governor, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the Director of the Arkansas Economic Development Commission, the President of the Arkansas Development Finance Authority, and the Chief Fiscal Officer of the State, all on behalf of the state, and the sponsor of the qualified Amendment 82 project shall execute the Amendment 82 agreement in substantially the same form as approved by the General Assembly.

History. Acts 2005, No. 1981, § 1; 2019, No. 910, § 423.

Amendments. The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission”.

15-4-3205. Penalties.

The sponsor shall be subject to specific penalties set forth in the Amendment 82 agreement and enacted in related legislation under § 15-4-3203(j) if the sponsor:

1. Does not satisfy the minimum job creation and investment requirements specified in the Amendment 82 agreement within the time period specified in the Amendment 82 agreement;
2. Does not maintain the job creation requirements specified in the Amendment 82 agreement for the period of time specified in the Amendment 82 agreement; or
3. Fails to satisfy other terms of the Amendment 82 agreement.

History. Acts 2005, No. 1981, § 1.

15-4-3206. Compliance time period — Audit requirements.

1. 1. The Amendment 82 agreement shall specify a time period in which the sponsor must comply with the terms and conditions specified in the Amendment 82 agreement.
   2. Except as provided in subsection (b) of this section, the time period shall not exceed four (4) years from the date of enactment of related legislation under § 15-4-3203(j).
   3. If the sponsor does not comply with the applicable time period, then the penalty provisions set forth in the Amendment 82 agreement and under § 15-4-3203(j) shall apply.
2. 1. 1. The sponsor may request a one-year extension of the time period specified in the Amendment 82 agreement by submitting to the Director of the Arkansas Economic Development Commission a written request with an explanation as to why the extension is necessary.
      2. The request shall be submitted at least ninety (90) days before the expiration of the time period specified in the Amendment 82 agreement.
   2. 1. Upon receipt of a request to extend the applicable time period, the director shall immediately notify the Secretary of the Department of Commerce, the Chief Fiscal Officer of the State, and the Governor.
      2. The director, the Secretary of the Department of Commerce, and the Chief Fiscal Officer of the State may approve a request for a one-year extension upon a determination that there is a valid economic reason for granting the extension.
   3. The sponsor shall be granted not more than three (3) one-year extensions of the applicable time period.
3. 1. The sponsor shall maintain and make available records pertaining to items contained in the terms and agreements of the Amendment 82 agreement for annual audit by the Chief Fiscal Officer of the State and upon request no more often than annually by the Office of Economic and Tax Policy of the Bureau of Legislative Research or a person or entity retained by the office.
   2. The Arkansas Tax Procedure Act, § 26-18-101 et seq., shall apply to records maintained under this subsection and any audits conducted of the records, including any audit conducted through the office.
   3. 1. Records obtained or reviewed by the office under this section:
         1. Shall be considered working papers of the President Pro Tempore of the Senate and the Speaker of the House of Representatives under § 25-19-105(b)(7) and shall not be open to inspection and copying by any citizen of the State of Arkansas; and
         2. Are specifically exempt from the requirements of § 25-19-105(a).
      2. However, a report of the audit shall be presented to the Legislative Council with respect to the status of the applicable qualified Amendment 82 project that details the sponsor's compliance with the provisions of the Amendment 82 agreement.

History. Acts 2005, No. 1981, § 1; 2011, No. 1047, § 5; 2019, No. 910, § 424.

Amendments. The 2011 amendment redesignated former (a) as present (a)(1); substituted “terms and conditions” for “investment and job creation thresholds” in (a)(1); added the (a)(2) and (3) designations; in (a)(3), deleted “Arkansas Constitution, Amendment 82” following “set forth in the” and deleted “enacted in related legislation” preceding “under § 15-4-3203(j)”; redesignated former (b)(1) as present (b)(1)(A) and added the (b)(1)(B) designation; added the (b)(2)(A) and (B) designations; and substituted “items contained in the terms and agreements of the Amendment 82 agreement” for “investment and job creation requirements” in (c)(1).

The 2019 amendment, in (b)(2)(A), substituted “Director of the Arkansas Economic Development Commission” for “executive director” and “Secretary of the Department of Commerce” for “President of the Arkansas Development Finance Authority”; and, in (b)(2)(B), deleted “executive” preceding “director” and substituted “Secretary of the Department of Commerce” for “the president”.

15-4-3207. Bond principal.

Amendment 82 bonds may be issued to:

1. Finance project costs in an aggregate principal amount approved by the General Assembly without regard to any debt limitation; and
2. Refund outstanding Amendment 82 bonds in an aggregate principal amount approved by the Arkansas Development Finance Authority without regard to any debt limitation.

History. Acts 2005, No. 1981, § 1; 2015, No. 593, § 6; 2017, No. 685, § 3.

Amendments. The 2015 amendment, throughout the section, deleted “net” preceding “general revenues” and substituted “collected during” for “for” following “general revenues”; and, in (b), substituted “is not” for “shall not be” and substituted “and does not” for “or”.

The 2017 amendment substituted “Bond” for “Maximum ceiling on bond” in the section heading; and rewrote the section.

15-4-3208. Amendment 82 bonds.

1. After the General Assembly's approval in regular session, fiscal session, or extraordinary session and the execution of the Amendment 82 agreement, the Arkansas Development Finance Authority, on behalf of the state, may issue bonds under Arkansas Constitution, Amendment 82, and this subchapter, to be known as “Amendment 82 Bonds” in one (1) or more series up to the maximum principal amount approved by the General Assembly.
2. 1. Bonds shall be issued for the purpose of financing infrastructure needs and other needs to support a qualified Amendment 82 project.
   2. The proceeds of the Amendment 82 bonds shall be applied:
      1. To the payment of project costs and the costs and expenses of issuance of the Amendment 82 bonds; or
      2. In connection with a qualified Amendment 82 project refinancing, to the repayment of indebtedness incurred to pay project costs and the costs and expenses of issuance of the Amendment 82 bonds.

History. Acts 2005, No. 1981, § 1; 2009, No. 962, § 32.

Amendments. The 2009 amendment, in (a), inserted “session, fiscal session” preceding “or special session” and made a minor punctuation change.

15-4-3209. Series of bonds.

1. The bonds shall be issued, whether or not the interest on the bonds is subject to federal taxation, in series in amounts sufficient to finance or refinance all or any part of a qualified Amendment 82 project's costs, with the respective series to be designated by the year in which issued, and if more than one (1) series is to be issued in a particular year, by alphabetical designation.
2. Each series of bonds shall have such date as the Arkansas Development Finance Authority shall determine and shall mature or be subject to mandatory sinking-fund redemption as determined by the authority over a period ending not later than thirty (30) years after the date of issuing the bonds of each series.
3. Pending the issuance of bonds, the authority may issue temporary notes maturing not more than five (5) years after the date of issuance to be exchanged for or paid from the proceeds of bonds at such time as the bonds may be issued.
4. 1. Each series of the bonds shall bear interest at the rate or rates accepted by the authority. The bonds may bear interest at either a fixed or variable rate or may be convertible from one (1) interest-rate mode to another.
   2. Interest shall be payable at such times as the authority shall determine, including the use of zero-coupon or capital appreciation bonds.
5. As determined by the authority, the bonds may:
   1. Be issued in the form of a bond registered as to principal and interest without coupons;
   2. Be in denominations;
   3. Be made exchangeable for bonds of another form or denomination bearing the same rate of interest and date of maturity;
   4. Be made payable at the places within or without the state;
   5. Be made subject to redemption prior to maturity in the manner and for redemption prices; and
   6. Contain other terms and conditions.
6. The bonds shall have all of the qualities of negotiable instruments or securities under the laws of this state, subject to the provision for registration of ownership.

History. Acts 2005, No. 1981, § 1.

Cross References. Negotiable instruments, § 4-3-101 et seq.

15-4-3210. Authorization of bonds.

1. 1. Prior to the issuance of any series of bonds, the Arkansas Development Finance Authority shall adopt a resolution authorizing the issuance of the bonds.
   2. Each resolution may contain terms, covenants, and conditions as deemed desirable, including, without limitation, those pertaining to:
      1. The establishment and maintenance of funds and accounts;
      2. The deposit and investment of revenues and of bond proceeds; and
      3. The rights and obligations of the state, its officers and officials, the authority, and the registered owners of the bonds.
   3. 1. The resolution of the authority may provide for the execution and delivery by the authority of a trust indenture or indentures, which may be a master trust indenture, series indenture, supplemental indenture, or any other form of indenture deemed necessary by the authority, with one (1) or more banks or trust companies located within or without the state, containing any of the terms, covenants, and conditions referred to in this subchapter or as otherwise authorized by law.
      2. The trust indenture or indentures shall be binding upon the state and its agencies, officers, and officials to the extent set forth in this subchapter or as otherwise authorized by law.
2. Any resolution or trust indenture adopted or executed under this section shall provide that power is reserved:
   1. To apply to the payment of debt service on the bonds issued or secured under Arkansas Constitution, Amendment 82, and this subchapter all, any part, or none of the revenues that may be derived from any qualified Amendment 82 project financed by the bonds or financed by the authority in some other manner; and
   2. At the option of the authority and to the extent of the revenues that the authority elects to apply to debt service, to release from any requirement of the resolution or trust indenture other revenues and resources of the state.
3. Any resolution or trust indenture adopted or executed under this section may provide for the retirement and defeasance of the bonds by the depositing of cash or investments in trust to be maintained for the purpose of retirement and defeasance of the bonds. When the provisions of the resolution or trust indenture are complied with, the bonds being defeased shall not be deemed to be outstanding bonded indebtedness for the purposes of this subchapter.

History. Acts 2005, No. 1981, § 1.

15-4-3211. Form and delivery of bonds.

1. Each bond shall:
   1. Be signed with the manual or facsimile signatures of the Governor, the Chair of the Board of Directors of the Arkansas Development Finance Authority, and the Treasurer of State; and
   2. Have affixed, imprinted, or lithographed on the bond the Great Seal of the State of Arkansas.
2. Delivery of the bonds shall be valid notwithstanding any change in persons holding such offices occurring after the bonds have been executed.

History. Acts 2005, No. 1981, § 1.

15-4-3212. Sale and price of bonds.

1. The bonds may be sold in the manner, either at public or private sale, and upon terms determined by the Arkansas Development Finance Authority to be reasonable and expedient for effectuating the purposes of Arkansas Constitution, Amendment 82, and this subchapter.
2. The bonds may be sold at the price the authority determines acceptable, including sale at a discount or a premium.
3. 1. If the bonds are to be sold at public sale, the authority shall give notice of the offering of the bonds in a manner reasonably designed to notify participants in the public finance industry that the offering is being made.
   2. The authority shall set the terms and conditions of bidding, including the basis on which the winning bid will be selected.
4. The authority may employ administrative agents, fiscal agents, underwriters, architects, accountants, engineers, and legal counsel and may pay them reasonable compensation from the proceeds of the bonds.
5. 1. The authority may structure the sale of bonds using financing techniques recommended by its underwriters or other professional advisors in order to take advantage of market conditions and obtain the most favorable interest rates consistent with the purposes of Arkansas Constitution, Amendment 82, and this subchapter.
   2. 1. In furtherance of this authorization, the authority may enter into ancillary agreements in connection with the sale of the bonds as it deems necessary and advisable.
      2. Ancillary agreements may include, without limitation:
         1. Bond purchase agreements;
         2. Remarketing agreements;
         3. Letters of credit; or
         4. Reimbursement agreements.
   3. The authority may also enter into interest rate exchange agreements or similar agreements or contracts with any person on a competitive or negotiated basis under terms or conditions determined by the authority, but in compliance with § 15-5-317.
6. After funding any necessary reserve or reserves, the proceeds from the sale of the bonds may be used to pay:
   1. The fees of any trustee or paying agent;
   2. The costs of publication of notices;
   3. The costs of printing the bonds;
   4. The costs of publication and printing of official statements and other documents relating to the sale of the bonds;
   5. The fees of any nationally recognized rating agency;
   6. The fees of the issuer;
   7. The fees of the guarantor;
   8. Project costs; and
   9. Other reasonable costs incurred by the authority for issuing and selling the bonds.

History. Acts 2005, No. 1981, § 1.

15-4-3213. Deposit of bond proceeds.

1. The proceeds from the sale of the bonds, together with any revenues derived by the Arkansas Development Finance Authority from a qualified Amendment 82 project financed or refinanced under Arkansas Constitution, Amendment 82, and this subchapter, that are required to be so deposited under the resolution or trust indenture authorizing or securing the bonds shall be deposited by the recipient, as received, into trust funds in the name of the authority under the resolution or trust indenture authorizing or securing the bonds to accomplish the purposes of Arkansas Constitution, Amendment 82, and this subchapter in amounts or portions as set forth in the resolution or trust indenture authorizing or securing the bonds issued to finance or refinance the qualified Amendment 82 project.
2. 1. The holder of the trust funds shall establish separate accounts and subaccounts within the applicable fund to correspond to the applicable series of bonds.
   2. In addition and under the resolution or trust indenture authorizing or securing the bonds, there may be created other funds, accounts, or subaccounts as the authority may determine to be necessary or desirable to accomplish the purposes of Arkansas Constitution, Amendment 82, and this subchapter.
3. All procedures and methods for application of proceeds of any series of bonds to the financing or refinancing of project costs shall be:
   1. Developed in consultation with the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State;
   2. Set forth in the resolution or trust indenture authorizing or securing the bonds; and
   3. Maintained as part of the records of the authority.
4. The holder and administrator of funds composed, in whole or in part, of proceeds of bonds or disbursements from funds established under this subchapter shall be required by appropriate provision of the resolution or trust indenture authorizing or securing the bonds issued to audit funds no less frequently than annually and to assist the authority in preparing any report related to the bonds that may be required by this subchapter or other applicable federal or state law.
5. The proceeds from the sale of the bonds, together with any revenues derived by the authority from any qualified Amendment 82 project financed or refinanced under Arkansas Constitution, Amendment 82, and this subchapter that are required to be so deposited under the resolution or trust indenture authorizing or securing the bonds and any money held in any funds created under or authorized by Arkansas Constitution, Amendment 82, or this subchapter, may be invested and reinvested in accordance with the resolution or trust indenture authorizing or securing the bonds issued and shall be invested by the authority to the fullest extent practicable pending disbursement for the purposes intended in any of the following:
   1. Direct obligations of the United States, including obligations issued or held in book entry form on the books of the United States Department of the Treasury or obligations the principal of and interest on which are unconditionally guaranteed by the United States;
   2. Bonds, debentures, notes, or other evidences of indebtedness issued or guaranteed by any United States Government agency if the obligations are backed by the full faith and credit of the United States;
   3. Nonfull faith and credit senior debt obligations issued or guaranteed by United States Government agencies;
   4. Money market funds investing exclusively in the investments described in subdivisions (e)(1)-(3) of this section;
   5. 1. Certificates of deposit providing for deposits secured at all times by collateral described in subdivisions (e)(1)-(3) of this section.
      2. The certificates must be issued by commercial banks, deposits of which are insured by the Federal Deposit Insurance Corporation and collateral of which must be held by a third party.
      3. The holder of the trust funds must have a perfected first security interest in the collateral;
   6. Certificates of deposit, savings accounts, deposit accounts, or money market deposits, all of which are fully insured by the Federal Deposit Insurance Corporation;
   7. Bonds or notes issued by this state, any municipality, county, or school district in this state, or by any agency or instrumentality thereof;
   8. Investment agreements with financial institutions or insurance companies that are rated in one (1) of the two (2) highest rating categories of a nationally recognized rating agency;
   9. Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm to the holder of the trust funds and the transfer of cash from the holder of the trust funds to the dealer bank or securities firm, with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the holder of the trust funds in exchange for the securities at a specified date. Repurchase agreements must satisfy the following criteria:
      1. Repurchase agreements must be between the holder of the trust funds and a dealer bank or securities firm described as follows:
         1. Dealers with at least one hundred million dollars ($100,000,000) in capital; or
         2. Banks whose deposits are insured by the Federal Deposit Insurance Corporation; and
      2. The written repurchase agreement contract must include the following:
         1. Securities that are acceptable for transfer are those listed in subdivisions (e)(1)-(3) of this section;
         2. The term of the repurchase agreement may not exceed thirty (30) calendar days;
         3. The collateral must be delivered to the holder of the trust funds, a trustee if a trustee is not supplying the collateral, or a third party acting as agent for the trustee if the trustee is supplying the collateral before or simultaneously with payment; and
         4. 1. The securities must be valued weekly, marked-to-market at current market price plus accrued interest.
            2. 1. The value of collateral must be equal to one hundred three percent (103%) of the amount of cash transferred by the holder of the trust funds to the dealer bank or security firm under the repurchase agreement plus accrued interest.
               2. If the value of securities held as collateral declines below one hundred three percent (103%) of the value of the cash transferred by the holder of the trust funds, then additional cash or acceptable securities, or both, must be transferred and held by the holder of the trust funds; and
   10. Any other investment authorized by state law.

History. Acts 2005, No. 1981, § 1.

15-4-3214. General obligation bonds.

1. The bonds shall be direct general obligations of the state for the payment of debt service on which the full faith and credit of the state are irrevocably pledged so long as any of the bonds are outstanding.
2. 1. The bonds shall be payable from general revenues or special revenues, which shall be appropriated by the General Assembly for that purpose, and the amount of general revenues or, if applicable, special revenues as may be necessary are pledged to the payment of debt service on the bonds and shall be and remain pledged for those purposes.
   2. In addition, each authorizing resolution or trust indenture may pledge all, a portion, or none of the revenues generated by any qualified Amendment 82 project as additional security for the bonds.

History. Acts 2005, No. 1981, § 1; 2015, No. 593, § 7.

Amendments. The 2015 amendment deleted “gross” preceding “general revenues” twice in (b)(1).

15-4-3215. Annual determination of moneys required for bond repayment.

1. 1. On or before commencement of each fiscal year, the Chief Fiscal Officer of the State shall determine the estimated amount required for payment of all or a part of the debt service on the outstanding bonded indebtedness during the fiscal year and deduct therefrom the estimated moneys to be available from special revenues or to the Arkansas Development Finance Authority from other sources related to the qualified Amendment 82 project to determine what amount of general revenues, if any, will be required.
   2. The Chief Fiscal Officer of the State shall certify the estimated amount to the Treasurer of State.
   3. The Treasurer of State shall then make monthly transfers from the State Apportionment Fund to the appropriate trust fund of the amount of general revenues or, if applicable, special revenues required to pay the maturing debt service on the outstanding bonded indebtedness.
2. 1. The obligation to make monthly transfers of general revenues from the State Apportionment Fund to the appropriate trust fund shall constitute a first charge against the general revenues prior to all other uses to which the general revenues are devoted, either under present law or under any laws that may be enacted in the future.
   2. To the extent other general obligation bonds of the state may have been issued or may subsequently be issued, the bonds shall rank on a parity of security with respect to payment from general revenues.
3. The resolution or trust indenture authorizing or securing the bonds issued shall identify the fund to which moneys shall be credited and used for the purposes identified in § 15-4-3208(b), and for those purposes, the holder of the trust funds is designated as the disbursing officer to administer those funds in accordance with Arkansas Constitution, Amendment 82, and this subchapter.
4. Moneys held in trust funds in excess of the amount necessary to ensure the prompt payment of debt service on the bonds and the establishment and maintenance of reserve funds, if any, may be used for the redemption of bonds prior to maturity in the manner and in accordance with the provisions pertaining to redemption prior to maturity as set forth in the resolution or trust indenture authorizing or securing the bonds.

History. Acts 2005, No. 1981, § 1; 2015, No. 593, § 8.

Amendments. The 2015 amendment deleted “gross” preceding “general revenues” throughout the section; and deleted “as shall be” preceding “required to pay” in (a)(3).

15-4-3216. Exemption from taxes — Eligible to secure deposits — Legal for investment.

1. All bonds issued under Arkansas Constitution, Amendment 82, and this subchapter and interest on the bonds are exempt from all state and local taxes.
2. The bonds shall be eligible to secure deposits of all public funds and shall be legal for investment of bank, fiduciary, insurance company, trust, and public funds.

History. Acts 2005, No. 1981, § 1.

15-4-3217. Refunding bonds.

1. After bonds have been issued under Arkansas Constitution, Amendment 82, and this subchapter, the Arkansas Development Finance Authority may issue bonds for the purpose of refunding any outstanding bonds issued under Arkansas Constitution, Amendment 82, and this subchapter.
2. The refunding bonds shall be general obligations of the state and shall be secured and sold in accordance with the provisions of this subchapter.
3. The proceeds of the refunding bonds either may be applied to the payment of the bonds being refunded or deposited in trust and there maintained in cash or investments for the retirement of the bonds being refunded as shall be specified by the authority in the resolution or trust indenture authorizing or securing the refunding bonds.
4. The resolution or trust indenture under which the refunding bonds are issued may provide that any refunding bonds shall have the same security for payment as provided for the bonds being refunded. Other than approval of the resolution or trust indenture under which refunding bonds are issued by appropriate action of the authority, no additional action or approval for the issuance of refunding bonds shall be required to be taken by the General Assembly, the Arkansas Economic Development Commission, or the Chief Fiscal Officer of the State under this subchapter or as otherwise may be provided by other law.

History. Acts 2005, No. 1981, § 1.

15-4-3218. Contractual obligations of state — Enforcement.

1. This subchapter shall constitute a contract between the state and the registered owners of all bonds issued under Arkansas Constitution, Amendment 82, and this subchapter that shall never be impaired, and any violation of its terms, whether under purported legislative authority or otherwise, shall be enjoined by the courts at the suit of any bondholder or any taxpayer.
2. 1. In any suit for impairment or violation of contract with regard to bonds issued under Arkansas Constitution, Amendment 82, and this subchapter brought against the Arkansas Development Finance Authority, the Treasurer of State, or other appropriate agency, officer, or official of the state, the courts shall prevent a diversion of any revenues pledged and shall compel the restoration of diverted revenues by injunction or mandamus.
   2. Without limitation as to any other appropriate remedy at law or in equity, any bondholder, by an appropriate action, including, without limitation, injunction or mandamus, may compel the performance under this subchapter of all covenants and obligations of the state and its officers and officials.

History. Acts 2005, No. 1981, § 1.

15-4-3219. No rights until first series of bonds sold and delivered — Outstanding bonds unaffected.

1. This subchapter shall not create any right of any character, and no right of any character shall arise under it unless and until the first series of bonds authorized by this subchapter are sold and delivered.
2. The issuance of bonds authorized by this subchapter shall not impair or affect any outstanding bonds of the Arkansas Development Finance Authority issued under prior acts.

History. Acts 2005, No. 1981, § 1.

15-4-3220. Legal actions heard as preferred cause — Appeals.

Any case involving the validity of this subchapter or involving the bonds issued under Arkansas Constitution, Amendment 82, and this subchapter shall be deemed of public interest and shall be advanced by all courts and heard as a preferred cause, and all appeals from judgments or decrees rendered in the cases must be taken within thirty (30) calendar days after rendition of the judgment or decree.

History. Acts 2005, No. 1981, § 1.

15-4-3221. Monitoring and reporting.

1. The Arkansas Economic Development Commission shall require audits of all accounts related to construction, operation, or maintenance of any qualified Amendment 82 project funded by this subchapter.
2. The Arkansas Economic Development Commission is responsible for monitoring and reporting to the Arkansas Development Finance Authority, the Governor, and the General Assembly on the ongoing economic impact of the project and the sponsor's progress in meeting the terms and conditions under the Amendment 82 agreement and this subchapter.
3. The Arkansas Economic Development Commission and the authority, as applicable, shall require the sponsor to comply with all reporting and auditing requirements of the United States Securities and Exchange Commission or other state or federal regulatory agency that may have jurisdiction over the sponsor.

History. Acts 2005, No. 1981, § 1; 2011, No. 1047, § 6.

Amendments. The 2011 amendment substituted “the terms and conditions under the Amendment 82 agreement” for “economic development investment requirements under Arkansas Constitution, Amendment 82” in (b).

15-4-3222. Release of information.

1. 1. Except as otherwise required to be disclosed under this subchapter, all information of the type identified in § 25-19-105(b)(9)(A) and related to a proposed project or a qualified Amendment 82 project that is provided to, compiled by or for, or developed by or for the Arkansas Economic Development Commission, the Arkansas Development Finance Authority, the Chief Fiscal Officer of the State, a local entity, the Governor, or the Office of Economic and Tax Policy of the Bureau of Legislative Research in furtherance of their powers, duties, and obligations under this subchapter is awarded the privileges and entitled to the exclusions set forth in subsection (b) of this section.
   2. Subdivision (a)(1) of this section shall not apply to information that is:
      1. Generated, compiled, or developed by a local entity that is not an agency or instrumentality of the state;
      2. Noncompetitive and nonproprietary; and
      3. Not provided to the commission under its powers, duties, and obligations set forth in this subchapter.
2. The information described in subdivision (a)(1) of this section is not open to inspection and copying by any citizen of the State of Arkansas and is specifically exempt from the requirements of § 25-19-105(a) regardless of whether such information is in the custody of the commission, the authority, the Chief Fiscal Officer of the State, a local entity, or the Governor.

History. Acts 2005, No. 1981, § 1.

15-4-3223. Power and duties of the Arkansas Economic Development Commission and the Arkansas Development Finance Authority.

1. In connection with their duties and powers under this subchapter, the Arkansas Economic Development Commission and the Arkansas Development Finance Authority, acting independently or jointly, shall have the following powers and duties, in addition to and not in replacement or limitation of powers conferred under other laws, to:
   1. Provide loans to a sponsor for payment of project costs;
   2. Develop or cause to be developed with proceeds of the Amendment 82 bonds, leases as lessee or lessor, in any manner acquire, own, hold, maintain, operate, sell, dispose of, exchange, mortgage, or lend, on behalf of the state, with respect to all or any part of any qualified Amendment 82 project;
   3. In any manner acquire, own, hold, use, exercise, sell, mortgage, pledge, hypothecate, or dispose of franchises, rights, privileges, licenses, rights-of-way, and easements that are necessary, useful, or appropriate for the exercise of the powers or implementation of the purposes set forth in Arkansas Constitution, Amendment 82, and this subchapter;
   4. Sell, convey, mortgage, pledge, lease as lessor, or otherwise dispose of all or any part of any qualified Amendment 82 project or other properties that it owns or leases, tangible or intangible, including, without limitation, franchises, rights, privileges, licenses, rights-of-way, and easements;
   5. Have and exercise the right of eminent domain for the purpose of acquiring lands, the fee title thereto, or any easement, right-of-way, or other interest or estate therein for a qualified Amendment 82 project, the infrastructure needs, or other needs therefor or portions thereof by the procedure now provided for condemnation by railroads in § 18-15-1201 et seq.;
   6. Make or accept gifts or grants of moneys, services, franchises, rights, privileges, licenses, rights-of-way, easements, or other property, real or personal or mixed;
   7. Enter into any contract necessary or convenient for the exercise of the powers or implementation of the purposes set forth in Arkansas Constitution, Amendment 82, and this subchapter;
   8. Fix, regulate, and collect rates, fees, rents, or other charges for the use of any properties or services furnished or delivered by the commission and the authority;
   9. Require audits or other periodic reports of any or all accounts related to construction, operation, or maintenance of any infrastructure or other needs funded by Arkansas Constitution, Amendment 82, and this subchapter;
   10. Take reasonable actions to ensure that debt service requirements are met; and
   11. Take such other action as may be appropriate to accomplish the purpose of Arkansas Constitution, Amendment 82, and this subchapter.
2. The commission and the authority may promulgate rules with respect to their powers and duties under Arkansas Constitution, Amendment 82, and this subchapter.
3. No member, officer, director, or employee of the commission or the authority shall be liable personally for any reason arising from the issuance of bonds under Arkansas Constitution, Amendment 82, and this subchapter unless the person acted with corrupt intent.

History. Acts 2005, No. 1981, § 1.

15-4-3224. Public reporting requirements.

1. The reports delivered to the General Assembly under § 15-4-3203(i)(2) and (3) shall be available to the general public under the same policies and procedures that generally apply with respect to reports to the General Assembly.
2. 1. During the term of an Amendment 82 agreement, the Arkansas Economic Development Commission shall provide a report to the Legislative Council no less frequently than annually with respect to the status of the applicable qualified Amendment 82 project which details the sponsor's compliance with the provisions of the Amendment 82 agreement.
   2. At a minimum, the commission's report shall address:
      1. A description of the infrastructure needs and other needs provided by the state under Arkansas Constitution, Amendment 82, and this subchapter and costs associated with each item;
      2. A description of how the sponsor has satisfied the investment and job creation requirements of the Amendment 82 agreement, including performance benchmarks and economic goals as specifically defined in the Amendment 82 agreement;
      3. The number of jobs created by each qualified Amendment 82 project and average hourly wages for each project;
      4. A description of the benefits package, including, without limitation, health and retirement benefits received by hourly employees;
      5. A comparison of the total number of new jobs and annual payroll by the sponsor pertaining to the qualified Amendment 82 project on the date the Amendment 82 agreement was executed and the end date of the calendar year before the filing of this report; and
      6. The application of any penalties for failure of the sponsor to satisfy its commitments under an Amendment 82 agreement.
3. At the end of a ten-year period following the beginning of operation of the Amendment 82 project, the General Assembly may request a third party cost-benefit analysis to accurately determine the total project costs and the total benefits received by the state from the qualified Amendment 82 project.
4. While Amendment 82 bonds are outstanding, the Arkansas Development Finance Authority shall provide a report to the Legislative Council, no less frequently than annually, with respect to the status of the Amendment 82 bonds. The report shall contain the information required by § 19-9-502.
5. During the term of an Amendment 82 agreement, the Chief Fiscal Officer of the State shall provide a report to the Legislative Council, no less frequently than annually, with respect to the dates and costs of all economic incentives received by each qualified Amendment 82 project except as restricted by law.

History. Acts 2005, No. 1981, § 1.

Subchapter 33 — Equity Investment Incentive Act of 2007

Effective Dates. Acts 2007, No. 566, § 4: Mar. 28, 2007. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the flow of development capital funds into and within the state continues to be insufficient to support the growth of businesses that will bring higher-paying jobs to inhabitants of the state; that as a result of the lack of available capital sources the state has suffered economic losses because of the inability to compete with other states in providing capital resources for high-wage businesses; that this legislation will stimulate the flow of private capital vital to the attraction, growth, and modernization of targeted businesses and allow the coordination by state agencies of tax credits with other economic development tools; that unless such a program of tax credits is undertaken, the state will suffer further irreparable loss as a result of the continued inability to attract and support business development and from lost opportunities for economic expansion. Therefore, an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 153: July 1, 2015. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that the Arkansas Building Authority, the Arkansas Science and Technology Authority, the Department of Rural Services, and the Division of Land Surveys of the Arkansas Agriculture Department are inefficiently structured; that this inefficient structuring causes an excessive and unnecessary cost to the taxpayers of the this state; and that this act is essential to alleviating that financial burden. Therefore, an emergency is declared to exist, and this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2015.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-3301. Title.

This subchapter shall be known and may be cited as the “Equity Investment Incentive Act of 2007”.

History. Acts 2007, No. 566, § 1.

15-4-3302. Equity investment incentives — Creation — Purpose — Tax credit.

1. Equity investment incentives in the form of tax credits to persons or companies investing in certain types of eligible businesses are created.
2. The equity investment incentives shall:
   1. Encourage capital investment in certain types of businesses including:
      1. Early-stage businesses and start-up businesses in this state;
      2. Businesses paying wages in excess of prevailing wages in the state or the county where the company is located; and
      3. Businesses that are invested in by venture capital funds and regional or community-based alliance funds; and
   2. Create new jobs.
3. 1. An equity investment incentive tax credit is created that shall be equal to thirty-three and one-third percent (331/3%) of the approved amount invested by an investor in an eligible business, as identified in § 15-4-3303(a).
   2. The tax credit, if awarded, is available to the investor.

History. Acts 2007, No. 566, § 1.

15-4-3303. Eligibility for equity investment incentive.

1. Eligibility for the equity investment incentive tax credit under this subchapter is limited to investments in:
   1. Targeted businesses as defined in § 15-4-2703(43); or
   2. A business that receives assistance in the form of equity investments from capital investment funds that target early-stage businesses and start-up businesses, if the business:
      1. Pays not less than one hundred fifty percent (150%) of the lesser of the county average wage or the state average wage; and
      2. Meets at least two (2) of the following conditions:
         1. The business is in one (1) of the business sectors set forth in § 15-4-2703(43)(A)(i)-(vi);
         2. The business is identified in a local or regional economic development plan as the type of business targeted for recruitment or growth within the community or region;
         3. The business is supported by a resolution of the city council or quorum court in the municipality or county in which the business is located or plans to locate;
         4. The business is supported by business incubators certified under § 26-51-815(d);
         5. The business is supported by federal small business innovation research grants; or
         6. The business is supported by technology development or seed capital investments made by instrumentalities of the state.
2. 1. The award of the equity investment incentive tax credit to a qualified business under subsection (a) of this section shall be determined jointly at the discretion of the Director of the Arkansas Economic Development Commission with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission and the President of the Arkansas Development Finance Authority.
   2. Only cash investments shall qualify for the equity investment incentive tax credit under this subchapter, including without limitation the initial principal amount of a qualifying convertible financing structure if the convertible financing structure is required to be converted to equity by the business receiving the investment no later than five (5) years from the date the convertible financing structure was consummated.
   3. A business that seeks eligibility for an equity investment incentive tax credit under this subchapter shall sign an equity investment incentive agreement with the Arkansas Economic Development Commission.

History. Acts 2007, No. 566, § 1; 2011, No. 829, § 1; 2015, No. 164, § 1; 2015 (1st Ex. Sess.), No. 7, § 99; 2015 (1st Ex. Sess.), No. 8, § 99; 2019, No. 910, § 425.

Amendments. The 2011 amendment, in (b)(1), inserted “determined jointly” and added “the President of the Arkansas Development Finance Authority, and the President of the Arkansas Science and Technology Authority” at the end.

The 2015 amendment by No. 164 added “including without limitation the initial principal amount of a qualifying convertible financing structure if the convertible financing structure is required to be converted to equity by the business receiving the investment no later than five (5) years from the date the convertible financing structure was consummated” to the end of (b)(2).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (b)(1), inserted “Executive” and “with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission and” and deleted “and the President of the Arkansas Science and Technology Authority” at the end.

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b)(1).

15-4-3304. Application for an equity investment incentive tax credit.

1. A business that seeks eligibility for an equity investment incentive tax credit under this subchapter shall file an application with the Arkansas Economic Development Commission.
2. The application shall include:
   1. A business plan describing the proposed business for which an equity investment incentive tax credit is sought;
   2. A projection of the amount of capital being sought for the proposed business;
   3. If the application proposes to use a convertible financing structure, a clear statement concerning the timing and conditions under which the convertible financing structure converts into equity; and
   4. Other information requested jointly by the Director of the Arkansas Economic Development Commission and the President of the Arkansas Development Finance Authority.
3. 1. The commission shall gather information necessary to determine the eligibility of a business that seeks an equity investment incentive tax credit and process the application.
   2. The commission shall share the application and all information concerning the business with the Arkansas Development Finance Authority and the Division of Science and Technology of the Arkansas Economic Development Commission for review and concurrence on whether or not an equity investment incentive is offered to the business.
4. 1. If a business is notified of approval of an application for an equity investment incentive tax credit, the business shall sign an equity investment incentive agreement with the commission.
   2. After the equity investment incentive agreement has been signed by the business and the commission, the business may solicit investors and offer the equity investment incentive tax credit to the investors.
5. For the equity investment tax credit to be awarded to an investor, the eligible business shall verify that all conditions to the award of an equity investment incentive tax credit stated in the equity investment incentive agreement have been met within the time set forth in the agreement.

History. Acts 2007, No. 566, § 1; 2011, No. 829, § 2; 2015, No. 164, § 2; 2015 (1st Ex. Sess.), No. 7, § 100; 2015 (1st Ex. Sess.), No. 8, § 100; 2019, No. 910, § 426.

Publisher's Notes. Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, § 100 specifically amended this section as amended by Acts 2015, No. 164, § 2.

Amendments. The 2011 amendment, in (b)(3) (now (b)(4)), inserted “jointly” and added “the President of the Arkansas Development Finance Authority, and the President of the Arkansas Science and Technology Authority” at the end; added “for review and concurrence on whether or not an equity investment incentive is offered to the business” at the end of present (c)(2); and deleted former (c)(2)(B).

The 2015 amendment by No. 164 inserted (b)(3), and redesignated former (b)(3) as (b)(4).

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8, in (b)(4), inserted “Executive” preceding “Director” and “and” preceding “the President of the Arkansas Development Finance Authority” and deleted “and the President of the Arkansas Science and Technology Authority” at the end; and substituted “Division of Science and Technology of the Arkansas Economic Development Commission” for “Arkansas Science and Technology Authority” in (c)(2).

The 2019 amendment substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” in (b)(4).

15-4-3305. Award of an equity investment incentive tax credit.

1. A person or company that purchases an equity interest in a qualified business under § 15-4-3303(a) in any of the calendar years 2007 — 2028 is entitled to a credit against any state income tax liability that may be imposed on the person or company for any tax year, beginning in the tax year in which the equity interest was purchased and for a period not to exceed nine (9) years beyond the tax year in which the equity interest was purchased.
2. The credit against state income tax liability shall be determined in the following manner:
   1. The credit shall not exceed thirty-three and one-third percent (33 1/3%) of the actual purchase price paid for the equity interest to the business, less any fees or commissions to underwriters or sales agents paid by the business;
   2. In any one (1) tax year, the credit allowed by this section shall not exceed fifty percent (50%) of the net Arkansas state income tax liability or premium tax liability of the taxpayer:
      1. After all other credits and reductions in tax have been calculated; and
      2. Before the credit allowed by this section is applied;
   3. 1. Any credit in excess of the amount allowed by subdivision (b)(2) of this section for any one (1) tax year may be carried forward and applied against Arkansas state income tax for the next-succeeding tax year and annually thereafter for a total period of nine (9) years next succeeding the year in which the equity interest in a business was purchased, subject to the provisions of subdivision (b)(2) of this section or until the credit is exhausted, whichever occurs first.
      2. The credit allowed by this section shall not be allowed for a tax year ending after December 31, 2037;
   4. If the total amount of credits applied for under this subchapter for the year exceed the cap stated in subsection (f) of this section, the Arkansas Economic Development Commission, when allocating credits under this subchapter for the particular applications that would exceed that cap and in order to not exceed the cap, shall first award credits to investors taking an equity interest through an equity purchase before credits may be allocated to investors that use a convertible financing structure for the investment; and
   5. An original purchaser of equity interests who seeks to qualify for the income tax credit or premium tax credit provided in this section shall obtain and attach to the income tax return or premium tax return for the years the credit is claimed a certified statement from the business stating:
      1. The name and address of the original purchaser;
      2. The tax identification number of the person entitled to the credit;
      3. The original date of purchase of the equity interest;
      4. The number and type of equity interests purchased;
      5. The amount paid by the original purchaser for the equity interest;
      6. The amount of the tax credit associated with the purchase of the equity interest; and
      7. The amount of dividends and distributions previously paid by the business to the purchaser.
3. 1. A transferee from an original purchaser is entitled to the tax credit described in this section only to the extent the credit is still available to and has not previously been used by the transferor.
   2. A transferee of equity interests or tax credits who seeks to qualify for the income tax credit or premium tax credit provided in this section shall obtain and attach to the income tax return or premium tax return for the years the credit is claimed a certified statement from the business stating:
      1. The name and address of the original purchaser and all transferees;
      2. The tax identification number of all persons entitled to any portion of the original tax credit;
      3. The original date the equity interest was purchased;
      4. The number and type of equity interests purchased;
      5. The amount paid by the original purchaser for the equity interest;
      6. The amount of the tax credit associated with the purchase of the equity interest;
      7. The amount of the tax credit associated with the original purchase used by all previous owners of the equity interest or tax credit and the remaining amount of the tax credit available for use by the transferee; and
      8. The amount of dividends and distributions previously paid by the business to the original purchaser and all transferees.
4. 1. If the owner of an equity interest in or a tax credit issued by a company is a pass-through entity for tax purposes, such as a limited liability company or a partnership, then the owner of the pass-through entity is entitled to the tax credit described in this section.
   2. If a pass-through entity entitled to a tax credit under subdivision (d)(1) of this section is owned by two (2) or more persons, then the tax credit may be allocated among the pass-through entity owners in the method selected by the owners as described in the governing documents of the pass-through entity or by other written agreement among the owners.
5. 1. For the purpose of ascertaining the gain or loss from the sale or other disposition of an equity interest in a business, the owner of the equity interest shall reduce the owner's basis in the equity interest by the amount of cash received from selling the tax credits and the tax credits previously deducted under this section.
   2. However, sale or other disposition under subdivision (e)(1) of this section does not include a transfer from the holder of an equity interest to the business in liquidation of the equity interest.
   3. This reduced basis shall be used by the original purchaser or transferee when calculating tax due under the Income Tax Act of 1929, § 26-51-101 et seq.
6. The total cumulative amount of tax credits available to all purchasers of equity interest in qualified businesses under this section in any calendar year shall not exceed six million two hundred fifty thousand dollars ($6,250,000).
7. The original investor earning tax credits under this section may sell its tax credits:
   1. Only one (1) time, in whole or in part, the balance of which shall be used by the original investor within the time frame allowed under this subchapter; and
   2. At any time before the tax credits are exhausted or expire.

History. Acts 2007, No. 566, § 1; 2009, No. 481, §§ 2, 3; 2011, No. 829, § 3; 2015, No. 164, §§ 3-5; 2017, No. 426, § 5; 2019, No. 537, § 1.

Amendments. The 2009 amendment, in (a), inserted “or company” twice; and made minor stylistic changes in (a) and (e)(1).

The 2011 amendment substituted “beginning in the tax year ... equity interest was purchased” for “commencing on or after the date of purchase” in (a).

The 2015 amendment substituted “2007 — 2028” for “2007 — 2019” in (a); in (b)(2), inserted the (b)(2)(A) designation and added (b)(2)(B); in (b)(3)(B), deleted “In no event may” from the beginning, inserted “shall not”, and substituted “2037” for “2028”; added (b)(4) and redesignated former (b)(4) as (b)(5); inserted “cash received from selling the tax credits and” to (e)(1); and added (g).

The 2017 amendment deleted “and under § 15-4-1026” following “section” in (f).

The 2019 amendment added the (g)(1) designation; and added (g)(2).

15-4-3306. Rules.

The Arkansas Economic Development Commission and the Arkansas Development Finance Authority shall promulgate jointly rules to implement this subchapter.

History. Acts 2007, No. 566, § 1; 2011, No. 829, § 4; 2015 (1st Ex. Sess.), No. 7, § 101; 2015 (1st Ex. Sess.), No. 8, § 101.

Amendments. The 2011 amendment inserted “Arkansas Development Finance Authority, and Arkansas Science and Technology Authority” and “jointly”.

The 2015 amendment by Acts 2015 (1st Ex. Sess.), Nos. 7 and 8 substituted “and the Arkansas Development Finance Authority” for “Arkansas Development Finance Authority, and Arkansas Science and Technology Authority”.

15-4-3307. Definition.

As used in this subchapter, “convertible financing structure” means an investment mechanism that converts into equity at a subsequent event, including without limitation convertible debt, convertible equity, and a convertible note.

History. Acts 2015, No. 164, § 6.

Subchapter 34 — Regional Economic Development Partnership Act

15-4-3401. Title.

This subchapter shall be known and may be cited as the “Regional Economic Development Partnership Act”.

History. Acts 2011, No. 895, § 1.

15-4-3402. Legislative intent.

The General Assembly finds that:

1. The support of regional economic development efforts is vital to the economic health and vitality of the state;
2. In order to increase the income of Arkansans at a growth pace greater than the national average and to compete more effectively in the global marketplace for new business and jobs, the state must invest in innovative economic development strategies;
3. The economy of the state varies significantly, and effective policies and programs must be customized to take advantage of resources and strengths within a particular region;
4. New economic development strategies will meet the special needs and take advantage of the extraordinary assets of particular regions of the state instead of relying on a single approach;
5. When economically feasible, the state should assist regional public and private efforts to promote economic development by providing state funds to share the cost of eligible marketing and promotional expenses associated with implementing a regional strategic plan; and
6. The Governor's Strategic Plan for Economic Development is focused on increasing the capacity of a region of Arkansas to participate in economic development.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 1.

Amendments. The 2013 amendment added (6).

15-4-3403. Definitions.

As used in this subchapter:

1. “Economic development region” means a group of municipalities or counties that:
   1. Includes at least two (2) counties; and
   2. Has formed a regional economic development partnership;
2. “In-kind contributions” means items given to a regional economic development partnership, including without limitation donated office space, equipment, staff, and other items specifically approved by the Arkansas Economic Development Commission; and
3. “Regional economic development partnership” means an organization whose mission is to promote specific regions within the state in accordance with the intent described under § 15-4-3402.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, §§ 2, 3.

Amendments. The 2013 amendment, in (1)(B), substituted “Has formed” for “Is willing to form” and deleted “for the purposes of regional economic development” following “partnership”; and substituted “in accordance with the intent described under § 15-4-3402” for “for business, retail, nonprofit, and industrial location, relocation, and expansion” in (3).

15-4-3404. Regional economic development partnerships — Board of directors.

1. A regional economic development partnership shall satisfy the following requirements:
   1. The economic development region includes the active participation of at least two (2) contiguous counties;
   2. The economic development region is of adequate size in population to:
      1. Effectively undertake economic development activities while remaining a distinct and viable region for attracting new investment; and
      2. Generate adequate regional resources to provide matching funds; and
   3. The economic development region is economically integrated as determined by:
      1. Commuting patterns;
      2. Economic base;
      3. Major employers;
      4. Membership in a defined metropolitan or micropolitan statistical area; or
      5. Other indicators determined by the Arkansas Economic Development Commission.
2. 1. After a regional economic development partnership has been formed, a county may elect to join the regional economic development partnership by adopting an ordinance to that effect.
   2. However, a county that adopts an ordinance under subdivision (b)(1) of this section shall become a member of the regional economic development partnership only upon a majority vote of the members of the board of directors of the regional economic development partnership that are residents of Arkansas.
3. 1. A regional economic development partnership formed on or after January 1, 2013, shall be governed by a board of directors that shall operate, manage, and control the regional economic development partnership in all respects.
   2. If a regional economic development partnership is formed on or after January 1, 2013:
      1. The board of directors shall contain at least one (1) representative from each county that is a member of the regional economic development partnership;
      2. The governing body of each county that is a member of the regional economic development partnership shall appoint members of the board of directors; and
      3. A person appointed to the board of directors may be a representative of either a public entity or a private entity.
   3. Each member of the board of directors shall serve for a term as provided under the bylaws of the regional economic development partnership.
   4. The commission may allow an existing entity that applies to be a regional economic development partnership to maintain the entity's existing rules regarding the membership, terms, and duties of the board of directors.
   5. If a regional economic development partnership includes a territory located in another state, regional funding provided under this subchapter shall only be provided to a county in Arkansas.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 4.

Amendments. The 2013 amendment rewrote the section.

15-4-3405. Application.

1. An entity shall not be recognized as a regional economic development partnership under this subchapter unless the board of directors of the entity submits an application and is approved under this section.
2. An entity applying for approval as a regional economic development partnership shall submit an application to the Arkansas Economic Development Commission that includes the following information:
   1. At least a three-year strategic plan that is consistent with the Governor's Strategic Plan for Economic Development and includes the following:
      1. The proposed activities of the regional economic development partnership; and
      2. 1. A budget for the next calendar year.
         2. The budget should clearly identify the proposed expenditures for which the grant funds are requested;
   2. Proof of organization;
   3. A copy of the entity's:
      1. Governing documents approved by the entity's governing board;
      2. Bylaws; or
      3. Articles of incorporation;
   4. A map of the economic development region and the population served by the regional economic development partnership based on the latest decennial census;
   5. The identity of each public organization and private organization within the economic development region that is active in economic development and a description of the role each organization will undertake in the regional economic development partnership;
   6. A list of the current members of the board of directors and the entity each member represents; and
   7. 1. 1. Evidence of:
            1. The staff dedicated to the regional economic development partnership; or
            2. The staff dedicated to program management of the regional economic development partnership.
         2. The staff identified under subdivision (b)(7)(A)(i) of this section may be employed by an entity other than the regional economic development partnership.
      2. The primary responsibility of the staff members described in subdivision (b)(7)(A) of this section is to:
         1. Market and promote the economic development region to site selectors and business prospects; and
         2. Accomplish the goals and objectives of the strategic plan required under subdivision (b)(1) of this section.
3. The commission shall review each application submitted under this section and shall certify that:
   1. The applicant satisfies the requirements of § 15-4-3404; and
   2. The application submitted under this section includes the information required under subsection (b) of this section.
4. The commission shall notify unsuccessful applicants in writing of the deficiencies of the applicant.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 5.

Amendments. The 2013 amendment rewrote the section.

15-4-3406. Termination.

1. A board of directors of a regional economic development partnership may terminate the regional economic development partnership upon a majority vote of the board of directors.
2. Notice of the intent to terminate a regional economic development partnership shall be sent to the Arkansas Economic Development Commission at least thirty (30) days before a board of directors votes on the termination of a regional economic development partnership.
3. Upon the termination of a regional economic development partnership, the board of directors of the regional economic development partnership shall remit any unspent state funds to the commission within sixty (60) days of the notice to terminate the regional economic development partnership.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 6.

Amendments. The 2013 amendment, in (c), deleted “promptly” following “partnership shall” and added “within sixty (60) days of the notice to terminate the regional economic development partnership”.

15-4-3407. State funding.

1. 1. Each regional economic development partnership shall enter into an agreement with the Arkansas Economic Development Commission to receive state funds, if available.
   2. The agreement under subdivision (a)(1) of this section shall:
      1. Be for a term of not longer than one (1) year; and
      2. Identify the eligible expenses for which the regional economic development partnership intends to use state funds under § 15-4-3409.
   3. 1. The commission and the regional economic development partnership may enter into subsequent one-year agreements under this section following the commission's review of the annual report required under § 15-4-3411.
      2. If a regional economic development partnership was initially approved as a multiyear project, a one-year renewal may be granted by the commission without the regional economic development partnership submitting an annual application.
2. 1. Each year, the commission shall allocate funds specifically appropriated by the General Assembly or the commission for regional economic development.
   2. 1. The funds shall be distributed equally to the qualifying regional economic development partnerships that meet the matching fund requirements under § 15-4-3408.
      2. Funds that are not disbursed under this section during a fiscal year may be distributed in a subsequent fiscal year.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 7.

Amendments. The 2013 amendment inserted “if available” in (a)(1); redesignated former (a)(3) as present (a)(3)(A); added (a)(3)(B); and rewrote (b)(2)(A) and (b)(2)(B).

15-4-3408. Matching funds.

1. A regional economic development partnership shall match the state funds allocated to the regional economic development partnership on the basis of at least one dollar ($1.00) of local matching funds for every one dollar ($1.00) of state funds.
2. If a regional economic development partnership does not provide proof of sufficient matching funds before the release of state funds, the Arkansas Economic Development Commission shall reduce the award of state funds in the amount necessary to adhere to the required one-to-one ratio of local matching dollars to state dollars.
3. Local matching funds may be:
   1. Provided by public sources, private sources, or a combination of public sources and private sources; and
   2. 1. Received in the form of cash, in-kind contributions, or a combination of cash and in-kind contributions.
      2. In-kind contributions shall not be more than forty percent (40%) of the regional economic development partnership's total matching funds.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 8.

Amendments. The 2013 amendment substituted “one dollar ($1.00) of local matching funds for every one dollar ($1.00)” for “two dollars ($2.00) of nonstate funds for every one dollar ($1.00)” in (a); in (b), deleted “nonstate” following “sufficient” and substituted “one-to-one” for “two-to-one” and “local matching” for “nonstate”; and substituted “Local” for “Nonstate” in (c).

15-4-3409. Eligible uses of state funds.

State funds under this subchapter shall be used only for marketing, advertising, promoting, and other activities related to implementing the Governor's Strategic Plan for Economic Development required under § 15-4-3405.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 9.

Amendments. The 2013 amendment deleted the former (a) designation; deleted former (b)(1) and (2); and inserted “under this subchapter”.

15-4-3410. Ineligible uses of state funds.

1. State funds under this subchapter shall not be used for administrative costs.
2. Ineligible uses of state funds include without limitation payment for the following expenses:
   1. Administrative salaries, benefits, general administrative costs, and salaries and benefits related to economic development;
   2. Overhead expenses, including without limitation postage, shipping, rent, subscriptions, equipment, furniture, fixtures, telephone, and utilities;
   3. Travel and conference expenses within the state;
   4. Local promotions or sponsorships;
   5. Stationery, paper, pens, and general office supplies;
   6. Construction and infrastructure costs;
   7. Membership dues;
   8. Alcoholic beverages; and
   9. Gratuity on meals, including meals related to activities described in § 15-4-3409.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 10.

Amendments. The 2013 amendment, in (a), substituted “State” for “Except as provided in § 15-4-3409, state” and inserted “under this subchapter”.

15-4-3411. Annual reports.

1. A regional economic development partnership that receives state funding under this subchapter shall submit an annual report to the Arkansas Economic Development Commission.
2. The annual report required under subsection (a) of this section shall include the following:
   1. A description of the economic development activities and organizational activities of the regional economic development partnership in the preceding twelve (12) months;
   2. A detailed financial report;
   3. A detailed budget for the next twelve (12) months; and
   4. A description of the prioritized activities of the regional economic development partnership for the next twelve (12) months for which state funding under this subchapter is being requested.

History. Acts 2011, No. 895, § 1; 2013, No. 1112, § 11.

Amendments. The 2013 amendment redesignated former (a)(1) as present (a); inserted “under this subchapter” in present (a); deleted (a)(2) and (b)(4) through (b)(7); and added present (b)(4).

15-4-3412. Administration — Rules.

The Arkansas Economic Development Commission shall administer this subchapter and may adopt any rules necessary to implement this subchapter.

History. Acts 2011, No. 895, § 1.

Subchapter 35 — Incentives for Major Maintenance and Improvement Projects

Effective Dates. Acts 2013, No. 1404, § 4: July 1, 2014, by its own terms.

Acts 2017, No. 465, § 8: Mar. 13, 2017. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that most states exempt from sales and use tax the sale of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment; that other states apply a reduced tax rate to the sale of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment; that Arkansas taxes the sale of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment at a tax rate of four and seven-eighths percent (4.875%) after application of the refund of tax paid for property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment; that the Arkansas Business and Economic Development Incentives Study conducted by Fluor Global Location Strategies and presented to the Bureau of Legislative Research in 2006 classified Arkansas as the worst of the twelve states in the southeast region on the taxation of sales of industrial materials used in manufacturing; that Alabama, Mississippi, North Carolina, and other states have phased in exemptions for sales of property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment over time; that under the Streamlined Sales and Use Tax Agreement to which Arkansas is a party, reductions in sales and use tax must be implemented through a refund or rebate mechanism until a complete exemption is achieved; and that this act is immediately necessary because Arkansas, in imposing an effective tax rate of four and seven-eighths percent (4.875%) after application of the refund of tax paid for property and labor associated with the modification, partial replacement, and repair of manufacturing machinery and equipment, is not competitive with surrounding states and states in the southeast region, which costs the state present and future jobs. Therefore, an emergency is declared to exist, and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

Acts 2019, No. 910, § 6346(b): July 1, 2019. Emergency clause provided: “It is found and determined by the General Assembly of the State of Arkansas that this act revises the duties of certain state entities; that this act establishes new departments of the state; that these revisions impact the expenses and operations of state government; and that the sections of this act other than the two uncodified sections of this act preceding the emergency clause titled ‘Funding and classification of cabinet-level department secretaries’ and ‘Transformation and Efficiencies Act transition team’ should become effective at the beginning of the fiscal year to allow for implementation of the new provisions at the beginning of the fiscal year. Therefore, an emergency is declared to exist, and Sections 1 through 6343 of this act being necessary for the preservation of the public peace, health, and safety shall become effective on July 1, 2019”.

15-4-3501. Increased tax refund for major maintenance and improvement projects.

1. A taxpayer that is eligible for a refund of excise taxes under § 26-52-447 or § 26-53-149 is eligible for a refund of one hundred percent (100%) of the sales and use taxes levied in §§ 26-52-301, 26-52-302, 26-53-106, and 26-53-107 on the tangible personal property and services subject to §§ 26-52-447 and 26-53-149 for projects that meet the following requirements:
   1. The taxpayer has entered into a financial incentive agreement with the Arkansas Economic Development Commission for the project; and
   2. The taxpayer expends at least three million dollars ($3,000,000) on an approved project that includes the purchase of tangible personal property and services that are either exempt or subject to a partial refund of tax under § 26-52-402, § 26-52-447, § 26-53-114, or § 26-53-149.
2. A taxpayer shall file with the commission an application for the increased refund for major maintenance and improvement projects provided in this section.
3. The increased refund of sales and use taxes for major maintenance and improvement projects provided in this section is a discretionary incentive and is not available unless offered by the Director of the Arkansas Economic Development Commission.
4. The director shall forward the taxpayer's application, financial incentive agreement, any other pertinent documentation, and a written copy of the determination under this subsection to the Secretary of the Department of Finance and Administration if the director:
   1. Determines that the taxpayer is eligible for the increased refund for major maintenance and improvement projects provided for in this section;
   2. Determines that the taxpayer has provided reasonable proof that there will be a positive return on the taxpayer's investment in the major maintenance and improvement project that is sufficient to offset the taxes refunded under this section;
   3. Determines that the taxpayer has provided a defined scope, beginning date, and ending date for the major maintenance and improvement project;
   4. Determines that the refund is reasonably necessary for the taxpayer to remain competitive and preserve Arkansas jobs; and
   5. Agrees to provide the incentive under this section.
5. A taxpayer that has been approved for the increased refund for major maintenance and improvement projects provided for in this section may make changes in a major maintenance and improvement project by written amendment to the project plan filed with the commission as part of the financial incentive agreement required under this section.
6. Except as otherwise provided in this section, a refund under this section is subject to the Arkansas Tax Procedure Act, § 26-18-101 et seq., in the same manner as other refunds permitted under § 26-18-507.
7. An expenditure shall not qualify for both the increased refund for major maintenance and improvement projects under this section and the retention tax credit provided for in § 15-4-2706(c).
8. The director and the secretary may promulgate rules necessary to implement this section.
9. 1. A taxpayer may apply for an increased refund for major maintenance and improvement projects under this section through June 30, 2022.
   2. An application for an increased refund for major maintenance and improvement projects under this section shall not be accepted on or after July 1, 2022.

History. Acts 2013, No. 1404, § 3; 2017, No. 465, § 2; 2019, No. 910, §§ 427, 428.

Amendments. The 2017 amendment added (i).

The 2019 amendment, in (c), in the introductory language of (d), and (h), substituted “Director of the Arkansas Economic Development Commission” for “Executive Director of the Arkansas Economic Development Commission” and substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration”.

Subchapter 36 — New Markets Jobs Act of 2013

A.C.R.C. Notes. Acts 2013, No. 1474, § 3 provided: “Applicability. This act applies only to a return or report originally due on or after the effective date of this act.”

Effective Dates. Acts 2013, No. 1474, § 4: Apr. 22, 2013. Emergency clause provided: It is found and determined by the General Assembly of the State of Arkansas that the unemployment rate in Arkansas is high; that the high rate of unemployment in this state hinders Arkansas's economic recovery; that there is an urgent need to create jobs in this state; and that this act is immediately necessary to encourage the creation of additional jobs for Arkansans and to support Arkansas's continual economic recovery. Therefore, an emergency is declared to exist, and this act being immediately necessary for the preservation of the public peace, health, and safety shall become effective on: (1) The date of its approval by the Governor; (2) If the bill is neither approved nor vetoed by the Governor, the expiration of the period of time during which the Governor may veto the bill; or (3) If the bill is vetoed by the Governor and the veto is overridden, the date the last house overrides the veto.”

15-4-3601. Title.

This subchapter shall be known and may be cited as the “New Markets Jobs Act of 2013”.

History. Acts 2013, No. 1474, § 1.

15-4-3602. Definitions.

As used in this subchapter:

1. “Applicable percentage” means:
   1. Zero percent (0%) for the first two (2) credit allowance dates;
   2. Twelve percent (12%) for the third, fourth, and fifth credit allowance dates; and
   3. Eleven percent (11%) for the sixth and seventh credit allowance dates;
2. “Credit allowance date” means with respect to a qualified equity investment:
   1. The date on which the qualified equity investment is initially made; and
   2. Each of the subsequent six (6) anniversary dates of the date on which the qualified equity investment was initially made;
3. “Letter ruling” means a written interpretation of law to a specific set of facts provided by an applicant requesting the written interpretation from the Arkansas Economic Development Commission;
4. “Long-term debt security” means a debt instrument issued by a qualified community development entity, at par value or a premium, with an original maturity date of at least seven (7) years from the date of its issuance without acceleration of repayment, amortization, or prepayment features before its original maturity date;
5. “Purchase price” means the amount paid to the issuer of a qualified equity investment for a qualified equity investment;
6. 1. “Qualified active low-income community business” means the same as defined in 26 U.S.C. § 45D and 26 C.F.R. § 1.45D-1, as they existed on January 1, 2013, if:
      1. At the time of the qualified community development entity's investment in or loan to the corporation, limited liability company, association, partnership, or other business entity, the corporation, limited liability company, association, partnership, or other business entity meets the United States Small Business Administration size eligibility standards established in 13 C.F.R. § 121.101-201, as it existed on January 1, 2013; and
      2. 1. The corporation, limited liability company, association, partnership, or other business entity agrees to retain or create jobs that pay an average wage of at least one hundred fifteen percent (115%) of the federal poverty income guidelines for a family of four (4) for the census tract.
         2. The commission may waive the requirement stated in subdivision (6)(A)(ii)(a ) of this section if the commission determines that an investment in the proposed active qualified low-income community business will have a positive impact on the community.
   2. A corporation, limited liability company, association, partnership, or other business entity will be considered a qualified low-income community business for the duration of the qualified community development entity's investment in or loan to the corporation, limited liability company, association, partnership, or other business entity if the relevant qualified community development entity reasonably expects, at the time it makes an investment or loan, that the corporation, limited liability company, association, partnership, or other business entity will continue to satisfy the requirements for being a qualified active low-income community business other than the requirements stated in subdivision (6)(A)(i) of this section throughout the entire period of the investment or loan.
   3. “Qualified active low-income community business” does not include the following:
      1. 1. A corporation, limited liability company, association, partnership, or other business entity that is the beneficiary of an incentive under § 15-4-2705, § 15-4-2706(b), or § 15-4-2706(c)(2).
         2. However, the commission may waive the requirement stated in subdivision (6)(C)(i)(a ) of this section if the commission determines that an investment in the proposed active qualified low-income community business will have a positive impact on the community;
      2. 1. Any industry excluded under a rule of the commission.
         2. However, the commission may waive the requirement stated in subdivision (6)(C)(ii)(a ) of this section if the commission determines that an investment in the proposed active qualified low-income community business will have a positive impact on the community; or
      3. 1. A corporation, limited liability company, association, partnership, or other business entity that derives or projects to derive at least fifteen percent (15%) of its annual revenue from the rental or sale of real estate.
         2. However, the restriction in subdivision (6)(C)(iii)(a ) of this section does not apply to a corporation, limited liability company, association, partnership, or other business entity that is controlled by or under common control with another corporation, limited liability company, association, partnership, or other business entity that:
            1. Does not derive or project to derive at least fifteen percent (15%) of its annual revenue from the rental or sale of real estate; and
            2. Is the primary tenant of the real estate leased from the corporation, limited liability company, association, partnership, or other business entity;
               1. Tax liability incurred by a corporation, limited liability company, association, partnership, or other business entity under §§ 23-63-102 and 26-57-601 — 26-57-605, excluding any liability for taxes on a health insurance premium; or
               2. If the tax liability under subdivision (10)(A) of this section is eliminated or reduced, any tax liability imposed on an insurance company or other person that had premium tax liability under the laws of the state.
7. 1. “Qualified community development entity” means the same as defined in 26 U.S.C. § 45D, as it existed on January 1, 2013, if the corporation, limited liability company, association, partnership, or other business entity has entered into, for the current year or any prior year, an allocation agreement with the Community Development Financial Institutions Fund of the United States Department of the Treasury with respect to credits authorized under 26 U.S.C. § 45D that includes Arkansas within the service area stated in the allocation agreement.
   2. “Qualified community development entity” includes a qualified community development entity that is controlled by or under common control with a qualified community development entity described in this subdivision (7);
8. 1. “Qualified equity investment” means an equity investment in or a long-term debt security issued by a qualified community development entity that:
      1. Is acquired after April 22, 2013, at its original issue solely in exchange for cash;
      2. Has at least eighty-five percent (85%) of its cash purchase price used by the issuer to make qualified low-income community investments in qualified active low-income community businesses located in Arkansas by the first anniversary of the initial credit allowance date; and
      3. Is designated by the issuer as a qualified equity investment under this subdivision (8) and is certified by the commission as not exceeding the limitation stated in § 15-4-3605(d).
   2. “Qualified equity investment” includes an investment that does not meet the requirements of subdivision (8)(A)(i) of this section if the investment was a qualified equity investment in the hands of a previous holder;
9. “Qualified low-income community investment” means a capital or equity investment in or loan to a qualified active low-income community business; and
10. “State premium tax liability” means:

History. Acts 2013, No. 1474, § 1.

15-4-3603. New market tax credit.

1. A corporation, limited liability company, association, partnership, or other business entity that makes a qualified equity investment earns a vested right to a tax credit against state premium tax liability.
2. The tax credit established under subsection (a) of this section may be utilized as follows:
   1. On each credit allowance date of the qualified equity investment, the corporation, limited liability company, association, partnership, or other business entity or the subsequent holder of the qualified equity investment may utilize a portion of the tax credit during the taxable year that includes the credit allowance date;
   2. The tax credit amount shall be equal to the applicable percentage for the credit allowance date multiplied by the purchase price paid to the issuer of the qualified equity investment;
   3. The amount of the tax credit claimed by a corporation, limited liability company, association, partnership, or other business entity shall not exceed the state premium tax liability owed by the taxpayer that files the premium tax report for the tax year for which the tax credit is claimed; and
   4. The tax credit is payable only from the general revenues derived from the nonallocated portion of the state premium tax liability funds as described in § 26-57-611.
3. Any unused portion of a tax credit established under this section may be carried forward for nine (9) consecutive tax years.

History. Acts 2013, No. 1474, § 1.

15-4-3604. Transferability.

1. A tax credit claimed under this subchapter shall not be refundable or saleable on the open market.
2. 1. A tax credit earned by a corporation, limited liability company, association, partnership, or other business entity may be allocated to the partners, members, or shareholders of the corporation, limited liability company, association, partnership, or other business entity for their direct use in accordance with any agreement among the partners, members, or shareholders.
   2. An allocation under subdivision (b)(1) of this section:
      1. May occur after the issuance of a qualified equity investment; and
      2. Is not a sale for purposes of this subchapter.

History. Acts 2013, No. 1474, § 1.

15-4-3605. Certification of qualified equity investments.

1. 1. 1. 1. A qualified community development entity that seeks to have an equity investment or a long-term debt security designated as a qualified equity investment eligible for a tax credit under this subchapter shall apply to the Arkansas Economic Development Commission.
         2. The commission shall begin accepting applications on July 15, 2013.
      2. 1. If the qualified community development entity seeks to have a long-term debt security designated as a qualified equity investment under this section, the qualified community development entity shall not make cash interest payments on the long-term debt security during the period beginning on the date of issuance and ending on the final credit allowance date in an amount that exceeds the cumulative operating income, as determined under 26 C.F.R. § 1.45D-1, as it existed on January 1, 2013, of the qualified community development entity for that period before giving effect to interest expense on the long-term debt security.
         2. However, the holder's ability to accelerate payments on the long-term debt security instrument in situations in which the issuer has defaulted on covenants designed to ensure compliance with this subchapter or 26 U.S.C. § 45D, as it existed on January 1, 2013, shall not be affected by this subchapter.
   2. 1. A qualified community development entity seeking certification of a qualified equity investment shall submit an application to the commission.
      2. The application submitted under subdivision (a)(2)(A) of this section shall include the following:
         1. Evidence of the applicant's certification as a qualified community development entity, including evidence that the service area of the applicant includes Arkansas;
         2. A copy of an allocation agreement executed by the applicant, or its controlling entity, and the Community Development Financial Institutions Fund;
         3. A certificate executed by an executive officer of the applicant:
            1. Attesting that the allocation agreement remains in effect and has not been revoked or cancelled by the Community Development Financial Institutions Fund; and
            2. Stating the cumulative amount of allocations awarded to the applicant by the Community Development Financial Institutions Fund;
         4. A description of the proposed amount, structure, and purchaser of the qualified equity investment;
         5. If known at the time of application, identifying information for each corporation, limited liability company, association, partnership, or other business entity that will utilize the tax credits earned from the issuance of the qualified equity investment;
         6. 1. Examples of the types of qualified active low-income businesses in which the applicant, its controlling entity, or affiliates of its controlling entity have invested under the federal New Markets Tax Credit Program, if any.
            2. An applicant shall not be required to identify qualified active low-income community businesses in which the applicant will invest when submitting an application;
         7. A nonrefundable application fee of five thousand dollars ($5,000); and
         8. The refundable performance fee required under § 15-4-3609.
2. 1. Within thirty (30) days after receipt of a completed application, the commission shall grant or deny the application in full or in part.
   2. 1. If the commission denies any part of an application, the commission shall inform the qualified community development entity of the grounds for the denial.
      2. 1. If an application is denied as incomplete and the qualified community development entity provides the additional information or documentation required by the commission or otherwise completes its application within fifteen (15) days of the notice of denial, the application shall be considered completed as of the original date of submission.
         2. If the qualified community development entity fails to provide the information or complete its application within the fifteen-day period, the application remains denied and must be resubmitted in full with a new submission date.
   3. 1. If the application is complete and meets the requirements of this subchapter, the commission shall certify the proposed equity investment or long-term debt security as a qualified equity investment that is eligible for a tax credit under this subchapter, subject to the limitations contained in subsection (d) of this section.
      2. 1. The commission shall provide written notice of the certification to the qualified community development entity.
         2. The written notice shall include the name, if known, of each corporation, limited liability company, association, partnership, or other business entity that will earn the tax credit and the respective tax credit amount.
         3. If the name of a corporation, limited liability company, association, partnership, or other business entity that is eligible to use the tax credit changes as the result of a transfer of a qualified equity investment or an allocation under § 15-4-3604(b), the qualified community development entity shall notify the commission of the change.
3. 1. The commission shall certify qualified equity investments in the order the applications are received by the commission.
   2. 1. Applications received on the same day shall be deemed to have been received simultaneously.
      2. For applications that are complete and meet the requirements of this subchapter and are received on the same day, the commission shall certify, consistent with the remaining qualified equity investment capacity, the qualified equity investments in proportionate percentages based on the ratio of the amount of qualified equity investment requested in an application to the total amount of qualified equity investments requested in all applications received on the same day.
4. 1. The commission shall certify up to one hundred sixty-six million dollars ($166,000,000) in qualified equity investments.
   2. If a pending request cannot be fully certified because of the limitation stated in subdivision (d)(1) of this section, the commission shall certify the portion that may be certified unless the qualified community development entity elects to withdraw its request rather than receive partial certification.
5. An approved applicant may transfer all or part of the applicant's certified qualified equity investment authority to the applicant's controlling entity or any qualified community development entity controlled by or under common control with the applicant if the approved applicant:
   1. Provides the information required in the application with respect to the transferee; and
   2. Notifies the commission of the transfer by providing evidence of the receipt of the cash investment as required under subdivision (f)(2) of this section.
6. 1. Within thirty (30) days of the applicant receiving notice of certification, the qualified community development entity or any transferee under subsection (e) of this section shall issue the qualified equity investment and receive cash in the amount of the certified amount.
   2. The qualified community development entity or transferee under subsection (e) of this section must provide the commission with evidence of the receipt of the cash investment within ten (10) business days after receipt.
   3. 1. If the qualified community development entity or a transferee under subsection (e) of this section does not receive the cash investment and issue the qualified equity investment within thirty (30) days following receipt of the certification notice, the certification shall lapse, and the corporation, limited liability company, association, partnership, or other business entity may not issue the qualified equity investment without reapplying to the commission for certification.
      2. A lapsed certification reverts back to the commission and shall be reissued:
         1. First, pro rata to any other applicants whose qualified equity investment allocations were reduced under subsection (d) of this section; and
         2. Second, in accordance with the application process.

History. Acts 2013, No. 1474, § 1; 2015, No. 1149, § 4.

Amendments. The 2015 amendment inserted “if the approved applicant” in (e).

15-4-3606. Letter rulings.

1. Subject to the requirements and limitations of this section, the Arkansas Economic Development Commission shall issue letter rulings regarding the tax credit program authorized under this subchapter.
2. 1. The commission shall respond to a request for a letter ruling within sixty (60) days of receiving the request.
   2. 1. However, the commission may deny a request for a letter ruling for good cause.
      2. If the commission denies a request for a letter ruling for good cause, it shall list the specific reasons for refusing to issue the letter ruling.
      3. Good cause for denying a request for a letter ruling under this subsection includes without limitation the following:
         1. The applicant requests the commission to determine whether a statute is constitutional or a rule is lawful;
         2. The request involves a hypothetical situation or alternative plans;
         3. The facts or issues presented in the request are unclear, overbroad, insufficient, or otherwise inappropriate as a basis upon which to issue a letter ruling; and
         4. The issue is currently being considered in a rulemaking procedure, contested case, or other agency or judicial proceeding that may resolve the issue.
   3. In rendering letter rulings under this subchapter, the commission shall look for guidance to 26 U.S.C. § 45D and 26 C.F.R. § 1.45D-1, as they existed on January 1, 2013, and to the extent they are applicable.
3. An applicant may:
   1. Provide a draft letter ruling for the commission's consideration; and
   2. Withdraw a request for a letter ruling, in writing, before the issuance of the letter ruling.
4. Letter rulings bind all state agencies, including the commission and the commission's agents and successors until the qualified community development entity or its shareholders, members, or partners claim all of the applicable tax credits under this subchapter on a Arkansas tax return or report.
5. 1. A letter ruling issued under this section applies only to the applicant that requested the letter ruling.
   2. However, a taxpayer identified in a letter ruling may rely on the letter ruling to the extent the letter ruling applies to the taxpayer.

History. Acts 2013, No. 1474, § 1; 2019, No. 315, § 1076.

Amendments. The 2019 amendment substituted “rule” for “regulation” in (b)(2)(C)(i).

15-4-3607. Recapture.

The Arkansas Economic Development Commission shall recapture the tax credit allowed under this subchapter from the taxpayer that claimed the tax credit if:

1. 1. Any amount of a federal tax credit available with respect to a qualified equity investment that is eligible for a tax credit under this subchapter is recaptured under 26 U.S.C. § 45D, as it existed on January 1, 2013.
   2. If a recapture occurs under subdivision (1)(A) of this section, the commission's recapture shall be proportionate to the federal recapture with respect to the qualified equity investment;
2. 1. The issuer redeems or makes principal repayment with respect to a qualified equity investment before the seventh anniversary of the issuance of the qualified equity investment.
   2. If a recapture occurs under subdivision (2)(A) of this section, the commission's recapture shall be proportionate to the amount of the redemption or repayment with respect to the qualified equity investment;
3. 1. The issuer fails to:
      1. Invest an amount equal to eighty-five percent (85%) of the purchase price of the qualified equity investment in qualified low-income community investments in Arkansas within twelve (12) months of the issuance of the qualified equity investment; and
      2. Maintain the minimum investment level required under subdivision (3)(A)(i) of this section until the last credit allowance date for the qualified equity investment.
   2. 1. A qualified equity investment shall be considered held by an issuer even if a qualified low-income community investment has been sold or repaid if the issuer reinvests an amount equal to the capital returned to or recovered by the issuer from the original qualified low-income community investment, exclusive of any profits realized, in another qualified low-income community investment within twelve (12) months of the receipt of such returned capital.
      2. Periodic amounts received during a calendar year as repayment of principal on a loan that is a qualified low-income community investment shall be treated as continuously invested in a qualified low-income community investment if the amounts are reinvested in one (1) or more qualified low-income community investments by the end of the following year.
   3. An issuer shall not be required to reinvest capital returned from a qualified low-income community investment, and the qualified low-income community investment shall be considered held by the issuer through the seventh anniversary of the qualified equity investment's issuance after the earlier of:
      1. The sixth anniversary of the credit allowance date of the qualified equity investment, the proceeds of which were used to make the qualified low-income community investment; or
      2. The date by which a qualified community development entity has made qualified low-income community investments with the proceeds of such qualified equity investment on a cumulative basis equal to at least one hundred fifty percent (150%) of such proceeds; or
4. At any time before the final credit allowance date of a qualified equity investment, the issuer uses the cash proceeds of the qualified equity investment to make qualified low-income community investments in any one (1) or more qualified active low-income community businesses, including without limitation affiliated qualified active low-income community businesses and excluding reinvestments of capital returned or repaid with respect to earlier qualified equity investments in the qualified active low-income community business and its affiliates in excess of twenty-five percent (25%) of the cash proceeds of all qualified equity investments issued by the issuer under this section.

History. Acts 2013, No. 1474, § 1.

15-4-3608. Cure period — Notice of noncompliance.

1. Enforcement of each of the recapture provisions under § 15-4-3607 is subject to a six-month cure period.
2. Recapture shall not occur until the Arkansas Economic Development Commission has given the qualified community development entity written notice of its noncompliance and has afforded the qualified community development entity six (6) months from the date of the notice to cure the noncompliance.

History. Acts 2013, No. 1474, § 1.

15-4-3609. Refundable performance fee.

1. A qualified community development entity that seeks to have an equity investment or long-term debt security designated as a qualified equity investment eligible for a tax credit under this subchapter shall pay a fee in the amount one-half of one percent (0.5%) of the amount of the equity investment or long-term debt security requested to be designated as a qualified equity investment to the Arkansas Economic Development Commission for deposit into the New Markets Performance Guarantee Fund, § 19-5-1254.
2. The qualified community development entity shall forfeit the fee required under this section if:
   1. The qualified community development entity and its subsidiary qualified community development entities fail to:
      1. Issue the total amount of qualified equity investments certified by the commission; and
      2. Receive cash in the total amount certified under and within the time period stated in § 15-4-3605; or
   2. 1. The qualified community development entity or any subsidiary qualified community development entity that issues a qualified equity investment certified under this subchapter fails to meet the investment requirement under § 15-4-3607(3) by the second credit allowance date of the qualified equity investment.
      2. Forfeiture of the fee under subdivision (b)(2)(A) of this section shall be subject to the six-month cure period established under § 15-4-3608.
3. 1. The fee required under subsection (a) of this section shall be held in the fund until compliance with the requirements of this section is established.
   2. 1. A qualified community development entity may request a refund of the fee from the commission no sooner than thirty (30) days after having met all the requirements of this section.
      2. The Treasurer of State shall comply with a request under subdivision (c)(2)(A) of this section or give notice of noncompliance within thirty (30) days of receiving the request.