Shown verbatim: the complete text as captured from the official PDF posted by the Arkansas General Assembly, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
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1 State of Arkansas As Engrossed: H3/12/25 H3/17/25 S4/1/25
2 95th General Assembly A Bill
3 Regular Session, 2025 HOUSE BILL 1303
4
5 By: Representatives Jean, Achor, F. Allen, Andrews, Barker, Beaty Jr., Beck, Bentley, S. Berry, Breaux,
6 K. Brown, M. Brown, Joey Carr, Cavenaugh, Childress, Cozart, Dalby, Eaves, Eubanks, Evans, K.
7 Ferguson, Gonzales, Henley, Holcomb, Hollowell, L. Johnson, Lynch, Maddox, Magie, M. McElroy,
8 McNair, Milligan, J. Moore, K. Moore, Painter, Pearce, Perry, Puryear, J. Richardson, Richmond, Rye,
9 Schulz, M. Shepherd, Springer, Steimel, Tosh, Unger, Vaught, Walker, Wardlaw, Warren, D. Whitaker,
10 Wooldridge, Wooten
11 By: Senators Stone, J. Boyd, Crowell, B. Davis, Dees, Flippo, Gilmore, K. Hammer, Hester, M. McKee
12
13 For An Act To Be Entitled
14 AN ACT TO CREATE TAX INCENTIVES RELATED TO
15 SUSTAINABLE AVIATION FUEL; TO CREATE THE SUSTAINABLE
16 AVIATION FUEL INCENTIVE ACT; TO CREATE AN INCOME TAX
17 CREDIT RELATED TO SUSTAINABLE AVIATION FUEL; AND FOR
18
19
20 Subtitle
21 TO CREATE THE SUSTAINABLE AVIATION FUEL
22 INCENTIVE ACT; AND TO CREATE AN INCOME
23 TAX CREDIT RELATED TO SUSTAINABLE
24 AVIATION FUEL.
25
26 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
27
28 SECTION 1. Arkansas Code Title 26, Chapter 51, is amended to add an
29 additional subchapter to read as follows:
30 Subchapter 29 -- Sustainable Aviation Fuel Incentive Act
31
32 26-51-2901. Title.
33 This subchapter shall be known and may be cited as the "Sustainable
34 Aviation Fuel Incentive Act".
35
36 26-51-2902. Definitions.
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As Engrossed: H3/12/25 H3/17/25 S4/1/25 HB1303
1 As used in this subchapter:
2 (1) "Incentive agreement" means an agreement entered into by a
3 business and the Arkansas Economic Development Commission to provide the
4 business an incentive to locate a new qualified sustainable aviation fuel
5 project in the state;
6 (2)(A) "New full-time permanent employee" means a position or
7 job that:
8 (i) Is created pursuant to an executed incentive
9 agreement;
10 (ii) Is filled by one (1) or more employees or
11 contractual employees who:
12 (a) Were Arkansas taxpayers during the year in
13 which the tax credits or incentives were earned;
14 (b)(1) Work at or fill a position dedicated to
15 the qualified sustainable aviation fuel project identified in the incentive
16 agreement.
17 (2) A new employee of the business that
18 enters into the incentive agreement under this subchapter who does not work
19 at the qualified sustainable aviation fuel project may be counted if the new
20 employee:
21 (A) Otherwise meets the definition
22 of a new full-time permanent employee;
23 (B) Is subject to the Arkansas
24 Income Tax Withholding Act of 1965, � 26-51-901 et seq.;
25 (C) Is paid an average annual
26 salary of at least one hundred thousand dollars ($100,000); and
27 (D) Is verified by reports and methods established
28 as required by the incentive agreement; and
29 (c)(1) Are not employees hired by a qualified
30 manufacturer of sustainable aviation fuel before the date the incentive
31 agreement was executed unless:
32 (A) The position or job filled by
33 the existing employee was created in accordance with the incentive agreement;
34 and
35 (B) The position vacated by the
36 existing employee was either filled by a subsequent employee or no subsequent
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1 employee will be hired because the qualified manufacturer of sustainable
2 aviation fuel no longer conducts the particular business activity requiring
3 that classification.
4 (2) If the Director of the Arkansas Economic Development
5 Commission and the Secretary of the Department of Finance and Administration
6 find that a significant impairment of Arkansas job opportunities for existing
7 employees will otherwise occur, they may jointly authorize the counting of
8 existing employees as new full-time permanent employees; and
9 (iii) Has been filled for at least twenty-six (26)
10 consecutive weeks with an average of at least thirty (30) hours worked per
11 week.
12 (B) "New full-time permanent employee" includes a
13 contractual employee who works at the qualified sustainable aviation fuel
14 project identified in the incentive agreement only if the contractual
15 employee is offered a benefits package comparable to a direct employee of the
16 qualified manufacturer of sustainable aviation fuel seeking incentives under
17 this subchapter;
18 (3) "Qualified manufacturer of sustainable aviation fuel" means
19 a taxpayer who:
20 (A) Is a natural person, a company, or a corporation that
21 is engaged in the manufacture, refinement, or processing of sustainable
22 aviation fuel in this state;
23 (B) Uses more than eighty percent (80%) of the electricity
24 and natural gas consumed in the manufacture, refinement, or processing of
25 sustainable aviation fuel to provide power for reactors, distillation
26 columns, heaters, pumps, compressors, coolers, and other sustainable aviation
27 fuel production and processing equipment; and
28 (C) Has an incentive agreement;
29 (4) "Qualified sustainable aviation fuel project" means a
30 facility located in the state that:
31 (A) Manufactures sustainable aviation fuel;
32 (B) Has an installed facility cost of more than two
33 billion dollars ($2,000,000,000), as verified by the commission;
34 (C) Will employ seventy-five (75) or more new full-time
35 permanent employees; and
36 (D) Begins construction on or before December 31, 2027;
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1 (5) "Sustainable aviation fuel" means kerosene-type jet fuel
2 derived from wood biomass; and
3 (6)(A) "Sustainable aviation fuel production and processing
4 equipment" means machinery and equipment that are essential for the
5 receiving, storing, processing, and testing of raw materials used in
6 producing or processing sustainable aviation fuel or the production, storage,
7 testing, and shipping of a finished product of a qualified sustainable
8 aviation fuel project, or both.
9 (B) "Sustainable aviation fuel production and processing
10 equipment" does not include a motor vehicle.
11
12 26-51-2903. Qualified manufacturer of sustainable aviation fuel
13 credit.
14 (a)(1) There is allowed an income tax credit against the income tax
15 imposed by this chapter in an amount equal to thirty percent (30%) of the
16 cost of sustainable aviation fuel production and processing equipment
17 purchased for use in the state by a qualified manufacturer of sustainable
18 aviation fuel that has:
19 (A) Obtained a certification from the Director of the
20 Arkansas Economic Development Commission certifying to the Department of
21 Finance and Administration that the qualified manufacturer of sustainable
22 aviation fuel:
23 (i) Operates a qualified sustainable aviation fuel
24 project or has a qualified sustainable aviation fuel project in production;
25 and
26 (ii) Has invested more than two billion dollars
27 ($2,000,000,000) after the effective date of this act in a qualified
28 sustainable aviation fuel project for:
29 (a) Property purchased for use in the
30 construction of one (1) or more buildings or an addition or improvement to a
31 building to be used for producing sustainable aviation fuel;
32 (b) Machinery and equipment located in or used
33 in connection with the qualified sustainable aviation fuel project, excluding
34 motor vehicles that are subject to registration; or
35 (c) Project planning costs or construction
36 labor costs, including without limitation:
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1 (1) On-site direct labor and supervision
2 whether employed by a contractor or the owner of the qualified sustainable
3 aviation fuel project;
4 (2) Architectural fees or engineering
5 fees, or both;
6 (3) Right-of-way purchases;
7 (4) Utility extensions;
8 (5) Site preparation;
9 (6) Parking lots;
10 (7) Disposal or containment systems;
11 (8) Water and sewer treatment systems;
12 (9) Rail spurs;
13 (10) Streets and roads;
14 (11) Purchase of mineral rights;
15 (12) Land;
16 (13) Buildings;
17 (14) Building renovation and demolition;
18 (15) Production, processing, and testing
19 equipment;
20 (16) Freight charges;
21 (17) Material handling equipment;
22 (18) Drainage systems;
23 (19) Water tanks and reservoirs;
24 (20) Storage facilities;
25 (21) Equipment rental;
26 (22) Contractors' cost plus fees;
27 (23) Builders' risk insurance;
28 (24) Original spare parts;
29 (25) Job administrative expenses;
30 (26) Office furnishings and equipment;
31 (27) Rolling stock;
32 (28) Capitalized start-up costs as
33 recognized by generally accepted accounting principles; and
34 (29) Other costs related to the
35 construction of the qualified sustainable aviation fuel project;
36 (B) Obtained a certification from the Secretary of the
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1 Department of Energy and Environment certifying to the Department of Finance
2 and Administration that:
3 (i) The qualified manufacturer of sustainable
4 aviation fuel is engaged in the business of manufacturing, producing,
5 refining, or processing sustainable aviation fuel; and
6 (ii) The machinery and equipment purchased are
7 sustainable aviation fuel production and processing equipment;
8 (C) Received a positive cost-benefit analysis, including
9 without limitation an analysis of other incentives offered by the State of
10 Arkansas with respect to the qualified sustainable aviation fuel project
11 subject to the income tax credit, as certified by the Director of the
12 Arkansas Economic Development Commission in consultation with the Chief
13 Fiscal Officer of the State; and
14 (D) An incentive agreement with performance criteria and
15 claw-back provisions as required under subsection (c) of this section.
16 (2) The income tax credit allowed for a qualified manufacturer
17 of sustainable aviation fuel under this section shall not exceed the lesser
18 of the amount:
19 (A) Certified by the Department of Energy and Environment
20 under subdivision (a)(1)(B) of this section; or
21 (B) Provided in the incentive agreement for the qualified
22 sustainable aviation fuel project.
23 (3) The amount of the income tax credit under this section that
24 may be claimed by the taxpayer in a tax year shall not exceed the amount of
25 income tax due by the taxpayer.
26 (b) Any unused income tax credit under this section that cannot be
27 claimed in a tax year may be carried forward indefinitely.
28 (c) The issuance of an income tax credit allowed under this section is
29 subject to an incentive agreement with performance criteria and claw-back
30 provisions between a taxpayer and the Arkansas Economic Development
31 Commission that:
32 (1)(A) Is subject to the approval of the Chief Fiscal Officer of
33 the State to ensure that the cost-benefit analysis required under subdivision
34 (a)(1)(C) of this section is met and maintained for a test period that is the
35 longer of the life of the income tax credits or twelve (12) years, subject to
36 the limitation stated in subdivision (c)(1)(B) of this section.
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1 (B) The test period described in subdivision (c)(1)(A) of
2 this section shall not be longer than fifteen (15) years; and
3 (2) Includes without limitation the:
4 (A) Capital investment for the qualified sustainable
5 aviation fuel project;
6 (B) New full-time permanent employee positions created by
7 the qualified sustainable aviation fuel project;
8 (C) Annual salary requirements for the new full-time
9 permanent employee positions created by the qualified sustainable aviation
10 fuel project;
11 (D) Timeline for fulfilling the investment and job
12 creation targets stated in the performance criteria and claw-back agreement
13 for the qualified sustainable aviation fuel project; and
14 (E) Conditions for the claw-back provisions, which are
15 triggered if, during the test period stated in subdivision (c)(1) of this
16 section, the taxpayer:
17 (i) Does not meet the required targets of the
18 qualified sustainable aviation fuel project related to capital investment,
19 job creation, timeline, or annual salary amounts; or
20 (ii) Fails to maintain a positive cost-benefit
21 analysis.
22
23 26-51-2904. Rules.
24 The Secretary of the Department of Finance and Administration, the
25 Secretary of the Department of Commerce, and the Secretary of the Department
26 of Energy and Environment may promulgate rules to implement and administer
27 this subchapter.
28
29 SECTION 2. EFFECTIVE DATE. Section 1 of this act is effective for tax
30 years beginning on or after January 1, 2025.
31
32 /s/Jean
33
34
35
36
7 04-01-2025 10:54:12 CEB021Every fact on this page links to its source, starting with the official bill record.