WeVote
Log In

Bill

Bill

HB 1657

TO AMEND THE ARKANSAS WOOD ENERGY PRODUCTS AND FOREST MAINTENANCE INCOME TAX CREDIT.

2025 Regular Session Introduced by Brandon Achor and 52 co-sponsors

HB 1657 boosts Arkansas' timber industry by raising investment to $1 billion, creating 400 jobs, and expanding tax credits for wood energy projects starting in 2026.

Notification that HB1657 is now Act 709
0
WeVote Research Nonpartisan
Bill Summary · HB 1657

Summary of HB 1657: Amendment to the Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit

Bill Overview

Bill Number: HB 1657
Title: To Amend the Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit
Status: Now Act 709
Introduced: March 04, 2025
Effective Date: Tax years beginning on or after January 1, 2026

Purpose and Intent

HB 1657 aims to amend the existing Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit, originally established by Act 594 of 2021. The intent of this amendment is to enhance the use of wood byproducts, including bark, in energy production, thereby supporting the Arkansas timber industry, promoting job creation, and encouraging significant capital investment in the state.

Key Provisions

The bill introduces several significant changes to the existing tax credit framework:

  1. Expanded Definition of Qualified Projects:

    • The definition of a "qualified wood energy products and forest maintenance project" is broadened to include facilities that utilize wood byproducts to produce energy.

  2. Increased Investment Requirement:

    • The minimum investment required for a project is raised from $50 million to $1 billion, allowing projected investments to qualify.

  3. Job Creation Mandate:

    • The minimum job creation requirement is increased from 100 to 400 new full-time permanent employees.

  4. Extended Project Closing Date:

    • The deadline for project completion is extended from December 31, 2023, to June 30, 2028.

  5. Reduced Tax Credit Rate:

    • The tax credit percentage is decreased from 30% to 20% of the costs associated with wood energy products equipment.

  6. Carry Forward and Transferability:

    • The credits can still be carried forward indefinitely until utilized and may be sold by the taxpayer.

Fiscal Impact

The fiscal impact of HB 1657 is reported to be revenue neutral. Taxpayers may claim a 20% tax credit for qualifying wood energy products equipment purchased for use in Arkansas, subject to the new provisions outlined in the bill.

Affected Parties

  • Taxpayers: Businesses involved in the timber industry and energy production using wood byproducts will be directly impacted by the changes in tax credit eligibility and requirements.
  • State Agencies: The Arkansas Department of Finance and Administration (DFA) and the Arkansas Economic Development Commission (AEDC) will play key roles in administering the tax credits and ensuring compliance with the new provisions.

Implementation Timeline

  • The changes introduced by HB 1657 will take effect for tax years beginning on or after January 1, 2026. Adequate time is provided for implementation, including necessary updates to tax forms and systems.

Conclusion

HB 1657 represents a significant shift in the Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit program, aimed at fostering greater investment and job creation in the timber and energy sectors. By expanding eligibility and adjusting requirements, the bill seeks to enhance the state's economic development efforts in sustainable energy production.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.