An act TO AMEND THE INCOME TAX LAWS, the official text

Stricken language would be deleted from and underlined language would be added to present law.

1 State of Arkansas                A Bill
2 95th General Assembly

3 Regular Session, 2025                                             SENATE BILL 73

4

5 By: Senator B. Johnson

6 By: Representative Beaty Jr.

7

8                               For An Act To Be Entitled

9   AN ACT TO AMEND THE INCOME TAX LAWS; TO PROVIDE FOR

10  INCOME TAX DEDUCTIONS FOR CERTAIN FINANCIAL

11  INSTITUTIONS; TO CREATE THE ACCESS TO CREDIT FOR OUR

12  RURAL ECONOMY (ACRE) ACT; TO PROVIDE AN INCOME TAX

13  DEDUCTION FOR CERTAIN AGRICULTURAL LOANS; AND FOR

14  OTHER PURPOSES.

15

16

17                                 Subtitle

18                        TO CREATE THE ACCESS TO CREDIT FOR OUR

19                        RURAL ECONOMY (ACRE) ACT; AND TO PROVIDE

20                        AN INCOME TAX DEDUCTION FOR CERTAIN

21                        AGRICULTURAL LOANS.

22

23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

24

25  SECTION 1. DO NOT CODIFY. Title.

26  This act shall be known and may be cited as the "Access to Credit for

27 Our Rural Economy (ACRE) Act".

28

29  SECTION 2. Arkansas Code Title 26, Chapter 51, Subchapter 4, is

30 amended to add an additional section to read as follows:

31  26-51-462. Deduction -- Qualified agricultural loans -- Definitions.

32  (a) As used in this section:

33  (1) "Eligible lending institution" means a:

34                        (A) National banking association;

35                        (B) State bank and a registered out-of-state bank, as

36 those terms are defined in � 23-45-102;

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1              (C) State trust company, as defined in � 23-51-102; or

2              (D) Federal savings bank;

3              (2) "Interest" means interest on indebtedness attributed to the

4 state and incurred in the ordinary course of the active conduct of any

5 business;

6              (3) "Net interest income received from qualified agricultural

7 loans" means the product of the ratio of the interest income earned on

8 qualified agricultural loans over total interest income earned, in relation

9 to the adjusted gross income of the eligible lending institution without

10 regard to the deduction allowed under this section; and

11             (4) "Qualified agricultural loan" means a loan that:

12             (A) Is made on personal property used for an agricultural

13 purpose, including without limitation equipment and machinery, livestock, and

14 crops; or

15             (B) Has the following characteristics:

16             (i) Is made on real property that is substantially

17 used for the production of one (1) or more agricultural products;

18             (ii) Is secured by a:

19             (a) First lien interest in real property; or

20             (b) Second lien interest in the real property;

21 and

22             (iii) Has an outstanding loan balance that is:

23             (a) Less than eighty-five percent (85%) of the

24 appraised value of the real estate; or

25             (b) More than eighty-five percent (85%) of the

26 appraised value of the real estate if the loan balance in excess of eighty-

27 five percent (85%) of the appraised value is insured by private mortgage

28 insurance.

29      (b) In computing net income for the purposes of this chapter, there is

30 allowed as a deduction in addition to all other deductions allowed by law for

31 the net interest income received from qualified agricultural loans that is

32 received by an eligible lending institution.

33

34      SECTION 3. EFFECTIVE DATE. Section 2 of this act is effective for tax

35 years beginning on or after January 1, 2025.

36

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