Business district tax credit bill clears House vote; Senate vote next

A bill that would create 20% tax credit for new construction and renovation in a central business improvement district was approved Thursday by the Arkansas House of Representatives.

HB 1060, sponsored by Rep. Tracy Pennartz, D-Fort Smith, would create an investment tax credit for renovation and development in central business improvement districts in Arkansas. The investment tax credit would be equal to 20% of the first $1 million of qualified rehabilitation or development expenditures incurred for a qualified project. The bill allows for up to $10 million in tax credits to be allowed annually.

Of the 100 House members, 94 voted in favor of the bill. The heads and members of more than 60 chamber, city and trade associations are  record supporting HB 1060.

But Pennartz and Senate sponsor, Sen. Gilbert Baker, R-Conway, have two major obstacles to getting a Senate vote and a Governor’s signature.

The first obstacle is that Gov. Mike Beebe is opposed to the bill because of the $10 million potential hit on state revenue.

Another problem is that the Senate schedule — the session ends April 9 —might not allow HB 1060 time to make it through the Senate committee process. However, the bill is scheduled for an April 6 hearing in the Senate Revenue and Tax Committee.

“I am moving forward as if I will be able to move it out of here tomorrow and then move it to the Senate committee on Revenue and Taxation,” Pennartz explained Wednesday. “I can’t predict what they (Senate leadership) will do, but we are trying to work all the right pressure points to do that … and get this legislation into the form of an Act before we leave here.”