(a) There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Economic Development Incentive Fund” of the Arkansas Economic Development Commission.
(b) The fund shall consist of revenues designated for this fund by the Department of Finance and Administration pursuant to approved financial incentive agreements entered into by the commission with qualified businesses.
(c) After the department has received and verified the certification of the payrolls of the qualified businesses for the payroll rebate authorized by this section, the department shall transfer the appropriate amount of money designated by the financial incentive agreements out of general revenues into a special account designated as special revenue for the fund.
(d)
(1) The award of this incentive is at the discretion of the Director of the Arkansas Economic Development Commission and may be offered for a period of up to ten (10) years.
(2)
(A) To receive an incentive under this section, a qualified business shall meet minimum annual payroll thresholds for new full-time permanent employees for the county tier in which the project is located, as follows:
(i) For tier 1 counties, the annual payroll threshold is at least two million dollars ($2,000,000);
(ii) For tier 2 counties, the annual payroll threshold is at least one million seven hundred fifty thousand dollars ($1,750,000);
(iii) For tier 3 counties, the annual payroll threshold is at least one million five hundred thousand dollars ($1,500,000); and
(iv) For tier 4 counties, the annual payroll threshold is at least one million two hundred fifty thousand dollars ($1,250,000).
(B) A qualified business approved for an incentive under this subsection shall certify or recertify payroll annually by filing the appropriate documents with the department.
(C) The qualified business claiming incentives under this subsection shall claim the rebate payment on an annual basis by certifying or recertifying payroll figures meeting the requisite threshold by filing the appropriate claim forms with the department.
(D) Failure to certify or recertify payroll figures and claim the earned rebate payment annually shall result in:
(i) A ten-percent reduction of the earned rebate if not claimed within twelve (12) months from the end of the tax year in which the rebate was earned;
(ii) A one hundred-percent forfeiture of the earned rebate if not claimed within twenty-four (24) months from the end of the tax year in which the rebate was earned; or
(iii) Termination of the financial incentive agreement if an initial certification has not been filed with the department within four (4) years after the date of the approved financial incentive agreement, unless the date has been extended by the director.
(3) Payments are subject to the following conditions:
(A) For tier 1 counties, the incentive is three and nine-tenths percent (3.9%) of the annual payroll of new full-time permanent employees;
(B) For tier 2 counties, the incentive is four and twenty-five-hundredths percent (4.25%) of the annual payroll of new full-time permanent employees;
(C) For tier 3 counties, the incentive is four and five-tenths percent (4.5%) of the annual payroll of new full-time permanent employees;
(D) For tier 4 counties, the incentive is five percent (5%) of the annual payroll of new full-time permanent employees; and
(E) The director may authorize an enhanced incentive to a prospective eligible business of up to five percent (5%) of the payroll of new full-time permanent employees if the following conditions exist:
(i) The prospective eligible business is considering a location in another state;
(ii) The prospective eligible business receives at least fifty-one percent (51%) of its sales revenue from out of state; and
(iii) The prospective eligible business is proposing to pay wages in excess of one hundred percent (100%) of the county average hourly wage of the county in which it locates.
(4) To qualify for an incentive under this subsection, except for the enhanced incentive in subdivision (d)(3)(E) of this section, the average hourly wage paid to employees whose payroll is subject to incentives shall be at least equal to the greater of the lowest county average hourly wage as calculated by the commission based on the most recent calendar year data published by the Division of Workforce Services, or twelve dollars and fifty cents ($12.50).
(5) A qualified business shall receive an additional incentive of one percent (1%) of the payroll of new full-time permanent employees if the average hourly wage paid to employees subject to incentives exceeds the lesser of one hundred twenty-five percent (125%) of the county or state average hourly wage for the county in which the business locates or expands.
(e)
(1) Technology-based enterprises, as defined in § 14-164-203, may earn, at the discretion of the director, a payroll rebate equal to five percent (5%) of the payroll for new full-time permanent employees for a period not to exceed ten (10) years.
(2) To qualify for the payroll rebate:
(A) The average hourly wage of the payroll for new full-time permanent employees must be at least one hundred fifty percent (150%) of the lesser of the state or county average hourly wage for the county in which the technology-based enterprise locates or expands;
(B) The payroll for new full-time permanent employees must exceed two hundred fifty thousand dollars ($250,000); and
(C) The payroll rebate authorized by this subsection shall not be used in combination with the income tax credit based on payroll authorized by § 15-4-2709.