A Generational IMPACT in Arkansas

Over the past several months, the Arkansas General Assembly has been in session, discussing legislation that will affect Arkansans across the state – from amending existing laws to proposing new bills. The Arkansas Department of Commerce has worked under the leadership of Governor Sarah Huckabee Sanders and the General Assembly on a series of bills that we call IMPACT.

IMPACT stands for Improving Markets, Promoting Arkansas Commerce and Trade.

With this legislative package, we aimed to make Arkansas more economically competitive, reduce regulatory burdens, and increase efficiencies in our state government. The IMPACT package covers the whole of the Commerce Department, including economic development, securities, banking, and more.

Without a doubt, IMPACT is the most significant economic development legislation passed in Arkansas in the past 25 years. It will have a generational effect on our state, its citizens, and our companies that will move Arkansas forward, creating wealth and new opportunities in the Natural State.

It’s been a busy session for the Commerce team, and I’m proud of the work that has been put in to make this a successful session. IMPACT would not have been possible without the efforts of our colleagues at the Arkansas Department of Finance and Administration and all of our economic developers from across the state. I would especially like to thank the members of the statewide incentive working group who put in countless hours on some of these programs. Finally, I thank our bill sponsors for supporting IMPACT and shepherding the bills through the legislative process.

With Governor Sanders’ leadership and the efforts of the Arkansas General Assembly, we have arrived at the finish line of the session – but now the real work of putting this legislation into action, making a difference for Arkansans and businesses around the state.

Here is a brief outline of the bills that make up IMPACT:

Arkansas Development Finance Authority (ADFA)

Act 944 – The Arkansas Development Finance Authority will become a corporate instrumentality of the state, enabling it to operate more flexibly in response to the private sector and allow it to grow and reach its full potential, for example increasing its access to capital for Arkansas housing projects.

Data Center Incentive

Act 548 – This legislation will revise the current data center incentive program, expanding the definition the data center equipment and including maintenance as an eligible cost. It clarifies the timing of benefits, investment and payroll thresholds, program administration, data center site restrictions, and allows for multi-site, large data center projects.

Industrial Development Authority

Act 576 – With this legislation, we are updating existing law to include industrial parks and projects not located on or near navigable waterways as part of industrial development authorities.

Lithium Industry Incentive

Act 1012 – This will establish a comprehensive lithium and grid storage incentive program to encourage the growth of this industry in Arkansas – from in-state processing, refining, manufacturing, and recycling.

Modernization and Automation Incentives

Act 882 – Supporting Arkansas manufacturing is critical, and this incentive program will encourage Arkansas businesses to make large capital investments focused on modernizing and automating existing operations within our state.

Small Business Innovation Research Reforms

Act 440 – Entrepreneurship, small business, and innovation are important parts of our state’s economy, and these reforms will help drive increased innovation in Arkansas. Act 440 will reform the Arkansas SBIR Matching Grant Program to include STTR programs, in addition to removing a lifetime awards cap and streamlining administrative burdens.

Corporate Headquarters Relocation

Act 881 – To encourage corporate headquarter relocations, this legislation would create a state corporate income tax exemption for companies that have relocated their headquarters to Arkansas. The exemption would be based on the level of payroll over a period of 10 years.

Economic Development Districts

SJR 15 – This constitutional amendment would help attract and retain investment in Arkansas by enabling the creation of economic development districts within cities, counties, or cooperative areas. These districts would allow for direct local incentives and self-supporting bonds backed by future project revenues, which is intended to increase competitiveness and grow jobs in Arkansas.

Unemployment Insurance Adjustment

Act 740 – The Unemployment Insurance adjustment would decrease the employer base contribution rate and increase the administrate assessment rate, increasing funding for Arkansas skilled workforce – without increasing employer costs.

Securities Act Exemption

Act 236 – Under this legislation, the state would update securities exemptions with the goal of encouraging Arkansas businesses to make in-state investments.

Generating Arkansas Jobs of 2025

Act 373 – The Generating Arkansas Jobs Act is a landmark legislation that will empower utility companies to make strategic infrastructure investments to ensure Arkansas has adequate generation capacity, can support growth, replace retiring infrastructure, and more. The act will ensure that Arkansas has the electrical generation and natural gas transmission to meet our power needs – both for today and tomorrow.

All of these legislative acts make up IMPACT. Combined, they will keep our economic momentum moving forward and encouraging even more growth and investment in Arkansas.

Our work is just starting, and the Arkansas Department of Commerce team is ready to play its role in helping build a brighter future in the Natural State.

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This article was originally published by Secretary of Commerce Hugh McDonald via LinkedIn - view here.