LITTLE ROCK – Officials who recruit industry to Arkansas are saying that the 2025 legislative may turn out to be the most significant of the past 25 years.
The legislature approved a package of laws designed to boost energy production, simplify regulations and create well paid jobs.
Act 373, also known as the Generating Arkansas Jobs Act, will allow electric utilities to finance new construction projects that enable them to meet increased demands for power.
The Secretary of the Arkansas Department of Commerce called Act 373 “landmark legislation.” Data centers and computer facilities that use artificial intelligence require large amounts of reliable energy. Economic development officials in Conway and Little Rock have been working to attract investments in new data centers.
Act 548 expands an existing tax incentive program for data centers to include large facilities that may be located at more than one site. It also updates the kind of equipment and services that qualify for tax exemptions.
Act 576 is the Industrial Development Authorities Expansion Act. It allows cities, counties or a group of local governments to create a regional organization for economic development.
The local economic development authorities can build, create and acquire industrial parks, research facilities, job training programs and transportation infrastructure. They can issue bonds and they can contract with cities and counties to receive revenue from bonds issued by the local government entity. They can negotiate agreements with businesses to accept payments in lieu of property taxes.
The legislature voted to place on next year’s general election ballot a proposed constitutional amendment that would further expand the authority of local economic development agencies.
Act 882 updates a current incentive program to encourage businesses already in Arkansas to modernize and automate. The incentives are tax credits. Act 881 creates tax credits for companies that locate their corporate headquarters in Arkansas.
Act 719 changes the formula by which the state collects corporate income taxes on services, bringing us in line with 34 other states. According to the Department of Finance and Administration, Arkansas tax law required multi-state corporations to rely on an “outdated method” of calculating the proportion of income they derived from the states in which they operate. The change is expected to encourage companies to locate in Arkansas.
Act 1012 creates a package of incentives to promote the growth of the lithium industry in south Arkansas. Traditional tax incentives promote the extraction of minerals, which in the past would be shipped to other states for processing and adding value.
Also, Act 1012 creates incentives to promote industries that refine lithium and use it in manufacturing and processing into batteries and other products. Those industries will create well paid jobs in the processing of lithium, in addition to the jobs that are created in its extraction.
Act 740 lowers the contribution rate for unemployment insurance paid by businesses. It also increases funding for skilled workforce training by repealing the cap of $2.5 million that used to limit how much would be deposited annually into a training fund.
