TO CREATE A MODERNIZATION AND AUTOMATION TAX CREDIT TO ENCOURAGE INVESTMENT BY EXISTING BUSINESSES WITHIN THE STATE.

Fiscal Impact Statement Bill: HB1935 Bill Subtitle: TO CREATE A MODERNIZATION AND AUTOMATION TAX CREDIT TO ENCOURAGE INVESTMENT BY EXISTING BUSINESSES WITHIN THE STATE. --------------------------------------------------------------------------------------------------------------------------------------- Sponsors: Rep. Eaves and Sen. Gilmore Basic Change: HB1935 amends the Consolidated Incentive Act of 2003 to create a "modernization and automation tax credit." A business seeking to qualify for this credit must: • Execute a financial incentive agreement for the project with the Arkansas Economic Development Commission (Commission) before incurring any project costs; • Complete the project within six years of executing the agreement; • Maintain the current average level of payroll and employment during the project and for at least 24 months after the project ends; and • Be required to return any credits claimed if the business breaches the agreement. To qualify for the credit, a business must: • Have been in continuous operation in the state for at least two years; • Incur at least $5,000,000 in project costs; and • Hold a direct pay sales and use tax permit. A credit of up to 5% of

Fiscal Impact Statement Bill: HB1935 Amendment Number: H1 Bill Subtitle: TO CREATE A MODERNIZATION AND AUTOMATION TAX CREDIT TO ENCOURAGE INVESTMENT BY EXISTING BUSINESSES WITHIN THE STATE. --------------------------------------------------------------------------------------------------------------------------------------- Sponsors: Rep. Eaves and Sen. Gilmore Basic Change: House Amendment No. 1 --- HB1935-H1 (engrossed 04/08/25) increases the minimum requirements for a business to qualify for the modernization and automation tax credit. Specifically, HB1935-H1: • Increases the minimum investment from $5,000,000 to $25,000,000; and • Requires a positive cost-benefit analysis from the Arkansas Economic Development Commission. Original Bill --- HB1935 amends the Consolidated Incentive Act of 2003 to create a "modernization and automation tax credit." A business seeking to qualify for this credit must: • Execute a financial incentive agreement for the project with the Arkansas Economic Development Commission (Commission) before incurring any project costs; • Complete the project within six years of executing the agreement; • Maintain the current average level of payroll and employmen