All Roll Calls
Yes: 105 • No: 3
ArkansasSB3612025 Regular SessionSenate
TO CREATE THE INDUSTRIAL DEVELOPMENT AUTHORITIES EXPANSION ACT; AND TO PROVIDE FOR THE CREATION OF INDUSTRIAL DEVELOPMENT AUTHORITIES TO SECURE AND DEVELOP INDUSTRY AND FOSTER ECONOMIC DEVELOPMENT.
Sponsored By: Howard M. Beaty, Jr. (Republican), Tyler Dees (Republican)
Enacted
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Bill Overview
Analyzed Economic Effects
10 provisions identified: 5 benefits, 0 costs, 5 mixed.
Investors get tax-exempt authority bonds
Bonds issued under this law are exempt from state, county, and city taxes, including income, inheritance, and estate taxes. This exemption is not a federal tax exemption. The bonds can also secure public deposits and serve as legal investments for banks, insurance companies, and retirement funds.
Development authorities can run railroads
Authorities can acquire, build, equip, maintain, and operate railroads and related equipment. They can carry freight and passengers as common carriers and make wage and working-condition agreements with railroad workers. Connecting to or crossing another railroad requires just compensation. State parks and tourism agencies can give or contract to transfer track materials to authorities for railroad use. Authorities also qualify for transfers of specified surplus track materials partly bought with federal transportation funds, without the usual referenced procedures.
Local governments can create development authorities
Arkansas counties and cities can create public-benefit authorities to support industry and economic development. Cities must approve an ordinance, counties must approve an order, and a circuit court must establish each authority. Boards must have an odd number of members, population-based representation, and at least one representative per participating government. Directors serve three-year terms, may be reappointed, and must be qualified voters in the areas they represent. Local governments fill vacancies; after 90 days, remaining directors can fill them by majority vote. Authorities can hire staff, pay operating costs, and adopt rules consistent with the law. Entities created under this law also count as districts under the Joint County Municipal Solid Waste Disposal Act.
Authority bonds do not bind governments
Authority bonds and obligations are not debts of Arkansas, cities, counties, or other local governments. They do not pledge state or local government revenues for repayment. Board members are not personally liable for bonds or related contract and construction damages unless they act with corrupt intent.
Qualifying industrial facilities escape property taxes
Industrial facilities are exempt from property taxes when an authority owns them and finances them with bonds under this law. A lessee's or purchaser's interest in those facilities is also exempt. The law treats that interest as intangible personal property for property-tax purposes. Separate substitute-payment rules govern covered private industry agreements.
Development authorities can build and charge
Authorities can build, own, improve, operate, lease, sell, or mortgage property for industry and business. Projects include business parks, research and technology facilities, job training, air cargo, military depots, rail facilities, and related infrastructure. They can accept funds, work with public agencies, and set or change charges for facilities and services. The law sets no fee amount and does not require fees. Before new leases or operating commercial or industrial facilities, authorities must publicly request proposals on usual commercial terms. Accepted proposals must be commercially reasonable and serve the authority's best interest.
Governments can fund authority development projects
Local governments can provide available revenues to authorities through donations, loans, or other means. They can also provide bond proceeds authorized by Arkansas Constitution Amendment 62 or its predecessors. Those proceeds must follow constitutional rules, and the contributing government must have board representation. Authorities can transfer or donate property to federal agencies and provide money for related acquisition or condemnation costs. Federal transfers cannot break debt agreements or cause a default.
Authorities gain borrowing and refinancing powers
Authorities can borrow and issue bonds lasting up to 35 years without separate approval from governments represented on their boards. Bond proceeds can cover facilities, issuance costs, reserves, and debt payments until project revenues become available. Bonds can be backed by project revenues, other pledged authority revenues, investment contracts, and mortgages on financed facilities. Financed investment contracts must generate enough interest to cover bond principal, any premium, and interest when due. Authorities can refinance earlier bonds, including through escrow arrangements, while preserving their lien priority. Bondholders or trustees can enforce debt agreements and mortgage liens; after missed principal or interest payments, courts can appoint receivers. Receivers operate facilities and collect revenues until the default is cured.
Authorities gain property-taking powers with limits
Authorities can obtain property and rights-of-way through gifts, purchases, negotiations, or eminent domain—the legal power to take property. Property must be needed or desirable for the authority's lawful purposes, and takings must follow required legal procedures. Authorities can also exchange acquired property for property needed for those purposes. They cannot condemn a regulated utility's plant or distribution system, including any part, to operate it themselves. Bond money cannot fund that prohibited taking.
Industrial deals require substitute tax payments
Covered industrial leases and sale contracts with private for-profit businesses must provide payments in place of property taxes. This covers property provided by development authorities, cities, counties, or the Arkansas Development Finance Authority. Total payments during the initial term must reach at least 35% of the property taxes otherwise due. The Arkansas Economic Development Commission director and the state's Chief Fiscal Officer can jointly approve a lower minimum. Calculations use starting tax and assessment rates, projected installed property costs, and personal-property depreciation guidelines. Payments must be adjusted to actual installed costs at contract execution or project completion, whichever is later. Finance Authority property requires a separate agreement with the business, county, and any municipality. For agreements entered on or after September 1, 2023, businesses must send the county assessor the agreement and property description. Protected trade secrets and proprietary information need not be disclosed. Before approval meetings, affected school superintendents and designated state and county fiscal officials must receive at least 10 days' notice. County collectors bill and distribute payments on the property-tax schedule. Recipients share payments by their property-tax rates unless all affected local governments agree to another split. Exceptions cover pre-July 1, 2001 agreements, later agreements tied to earlier approvals, specified incentive projects, and existing-payment bond reissues or refinancings. Qualifying steel-manufacturer agreements entered before June 30, 2009, are also excepted.
Sponsors & Cosponsors
Sponsors
Howard M. Beaty, Jr.
Republican • House
Tyler Dees
Republican • Senate
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 4/7/2025
House Vote - Monday, April 7, 2025 8:22:40 PM
Yes: 75 • No: 3 • Other: 15
Senate vote • 3/12/2025
Senate Vote - Wednesday, March 12, 2025 3:31:58 PM
Yes: 30 • No: 0 • Other: 3
Actions Timeline
Notification that SB361 is now Act 576
4/14/2025SenateDELIVERED TO GOVERNOR.
4/9/2025SenateReported correctly enrolled and ordered delivered to the Governor.
4/9/2025SenateORDERED ENROLLED
4/8/2025SenateReturned from the House as passed.
4/8/2025SenateReturned to the Senate as passed.
4/8/2025HouseRead the third time and passed and ordered transmitted to the Senate.
4/7/2025HouseReturned by the Committee Do Pass
4/2/2025HouseRead the first time, rules suspended, read the second time and referred to the Committee on AGRICULTURE, FORESTRY & ECONOMIC DEVELOPMENT- HOUSE
3/12/2025HouseRECEIVED FROM THE SENATE
3/12/2025HouseOrdered immediately transmitted to the House.
3/12/2025SenateRead the third time and passed.
3/12/2025SenateReturned by the Committee, with the recommendation that it Do Pass
3/11/2025SenateRead first time, rules suspended, read second time, referred to AGRICULTURE, FORESTRY & ECONOMIC DEVELOPMENT - SENATE
3/3/2025SenateFiled
3/3/2025Senate
Bill Text
SB361 - Introduced
3/3/2025
Act Version
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