Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1657 3
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By: Representative Beck 5
By: Senator B. Davis 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE ARKANSAS WOOD ENERGY PRODUCTS AND 9
FOREST MAINTENANCE INCOME TAX CREDIT; AND FOR OTHER 10
PURPOSES. 11
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Subtitle 14
TO AMEND THE ARKANSAS WOOD ENERGY 15
PRODUCTS AND FOREST MAINTENANCE INCOME 16
TAX CREDIT. 17
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 19
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SECTION 1. Uncodified Acts 2021, No. 594, § 2(7), concerning the 21
legislative findings for Acts 2021, No. 594, is amended to read as follows: 22
(7) In order to attract and maintain industry to use the 23
available fiber resources, support healthy timberland, encourage capital 24
investment in the Arkansas timber industry, and provide well-paying jobs, and 25
use wood byproducts for the production of energy, the creation of a logging 26
and wood fiber transportation job creation income tax credit should be 27
established. 28
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SECTION 2. Arkansas Code § 26 -51-2702 is amended to read as follows: 30
26-51-2702. Legislative purpose and intent. 31
The purpose and intent of this subchapter is to increase capacity in 32
the state for the use of sawmill mill residuals, including sawdust and wood 33
chips, wood byproducts, including bark, and thinnings to maintain a healthy 34
forest, unwanted treetops, and damaged or diseased trees not wanted by 35
sawmills. 36 HB1657
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1
SECTION 3. Arkansas Code § 26 -51-2703(6) and (7), concerning the 2
definitions to be used under the Arkansas Wood Energy Products and Forest 3
Maintenance Income Tax Credit, are amended to read as follows: 4
(6) “Qualified wood energy products and forest maintenance 5
project” means a project specified in the incentive agreement to include one 6
(1) or more Arkansas facilities in the same ownership group: 7
(A) For which the taxpayer commenced construction by the 8
date specified in the incentive agreement, but no earlier than January 1, 9
2020; 10
(B) That supports the Arkansas timber industry by using 11
low-value wood, including without limitation sawmill mill residuals, forest 12
thinnings, unwanted treetops, and damaged or diseased trees , and wood 13
byproducts, including bark , to produce high-efficiency, high-energy wood 14
energy products; 15
(C) In which the taxpayer has a total projected investment 16
in excess of fifty million dollars ($50,000,000) one billion dollars 17
($1,000,000,000); 18
(D) That is undertaken by a taxpayer who has entered into 19
an incentive agreement with the State of Arkansas in which the taxpayer 20
commits to creating at least one hundred (100) four hundred (400) net new 21
full-time permanent employees with an average annual wage of at least sixty 22
thousand dollars ($60,000); 23
(E) That will provide a positive cost -benefit analysis to 24
the state as determined by the commission and the Office of Economic Analysis 25
and Tax Research; 26
(F) That is certified as having a closing date before 27
December 31, 2023 June 30, 2028, for all facilities, by which the taxpayer 28
has certified and the state has verified that necessary capital acquisition 29
and borrowing for the facilities has occurred to ensure that funds will be 30
available to: 31
(i) Secure a site for the facilities; 32
(ii) Obtain engineering services for the facilities; 33
(iii) Purchase equipment for the facilities; and 34
(iv) Commence construction on the facilities; and 35
(G) That is undertaken by a taxpayer that has elected by 36 HB1657
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agreement with the State of Arkansas for the taxpayer's facilities to be 1
classified as a qualified wood energy products and forest maintenance 2
project; and 3
(7)(A) “Wood energy products equipment” means: 4
(i) New or used machinery or equipment located in 5
Arkansas on the last day of the taxable year that is operated or used 6
exclusively in Arkansas to collect, separate, treat, pulverize, dry, modify, 7
or convert wood fiber and wood byproducts, including bark, so the resulting 8
product may be used as a raw material, for productive energy use, or to 9
manufacture other materials; 10
(ii) Devices that are directly connected with or are 11
an integral and necessary part of machinery or equipment operated or used 12
exclusively in Arkansas to collect, separate, treat, pulverize, dry, modify, 13
or convert wood fiber and wood byproducts, including bark, and are necessary 14
for the collection, separation, treatment, pulverization, drying, 15
modification, or manufacturing of wood fiber; 16
(iii) Equipment that produces energy with wood 17
power; and 18
(iv) A device that is directly connected with or is 19
an integral and necessary part of machinery or equipment operated or used 20
exclusively in Arkansas to produce energy with wood power. 21
(B) “Wood energy products equipment” does not include a 22
vehicle or trailer that is licensed or that normally would be licensed for 23
use on highways in Arkansas. 24
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SECTION 4. Arkansas Code § 26 -51-2704(a), concerning the Arkansas Wood 26
Energy Products and Forest Maintenance Income Tax Credit, is amended to read 27
as follows: 28
(a) There is allowed a tax credit against the tax imposed by this 29
chapter in an amount equal to thirty percent (30%) twenty percent (20%) of 30
the costs of wood energy products equipment purchased for use in Arkansas 31
after the date specified in the incentive agreement by a taxpayer that: 32
(1) Is engaged in the business of collecting, separating, 33
treating, pulverizing, drying, modifying, or manufacturing wood energy 34
products and wood byproducts, including bark ; and 35
(2) Has been certified as owning a qualified wood energy 36 HB1657
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products and forest maintenance project or a qualified wood energy products 1
and forest maintenance expansion project. 2
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SECTION 5. Arkansas Code § 26 -51-2704(b)(2)(B), concerning the 4
Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit, is 5
amended to read as follows: 6
(B) Beginning July 1, 2021 2026, and by July 15 of each 7
subsequent year, a taxpayer shall provide notice to the Department of Finance 8
and Administration of the amount of tax credits, including without limitation 9
tax credits the taxpayer expects will receive certification during the fiscal 10
year by the Department of Energy and Environment, subject to the limitation 11
in subdivision (b)(1) of this section, that will be sold or transferred for 12
value. 13
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SECTION 6. Arkansas Code § 26 -51-2704(c)(7), concerning the Arkansas 15
Wood Energy Products and Forest Maintenance Income Tax Credit, is amended to 16
read as follows: 17
(7) Beginning July 1, 2021 2026, by July 15 of each year, a 18
public retirement system with possession and control of tax credits under 19
this subsection shall provide notice to the Department of Finance and 20
Administration of the amount of tax credits, including without limitation tax 21
credits the public retirement system expects will receive certification 22
during the fiscal year by the Department of Energy and Environment, subject 23
to the limitations in subdivisions (c)(4) and (c)(5) of this section, to be 24
sold or transferred for value. 25
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SECTION 7. EFFECTIVE DATE. Sections 1 -6 of this act are effective for 27
tax years beginning on or after January 1, 2026. 28
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