Future bleak for downtown development bill

A bill promoting development in downtown districts appears headed for another defeat in the Arkansas Senate.

Rep. Tracy Pennartz, D-Fort Smith, filed HB 1118 on Jan. 12, with the bill almost a mirror of the bill (HB 1060) she unsuccessfully pushed in the 2009 Arkansas General Assembly. HB 1060 passed a house vote with 94 members voting in favor of the bill. The heads and members of more than 60 chamber, city and trade associations were on record supporting HB 1060. The bill stalled in the Senate during the 2009 session.

HB 1118 received a 93-0 vote of approval in early March. However, the bill failed to be included in a package of tax cut deals agreed to by the House and Senate leadership and Gov. Mike Beebe.

The perceived hit to tax income was the reason the 2009 bill eventually failed and it is likely what will kill the bill in this session. The bill has already failed one attempt to pass out of the Senate Revenue and Tax Committee.

The investment tax credit would be equal to 25% of up to the first $500,000 of qualified rehabilitation or development expenditures incurred for a qualified project. The bill would cap tax credits at $4 million a year, although Pennartz plans to amend the amount down to $2 million annually.

“I feel very good about the bill. I’m not giving up, because I’ve talked to too many people across the state who want it,” Pennartz said.

She said 59 development and community groups around the state have helped lobby for the bill.

Pennartz is frustrated that the bill was not included in the tax cut package because “unlike other tax cuts that were given that have no bearing on the impact of job creation, this bill holds the real promise of being a job creator.”

Sen. Jake Files, R-Fort Smith, agreed to help Pennartz push the bill in the Senate. Files, who sits on the Senate Revenue and Tax Committee, is not as optimistic as Pennartz— especially given that the General Assembly is scheduled to adjourn April 1 (Friday).

“HB1118, while being a great bill and great idea, was not in the agreed to tax cut package deal. We have been working hard, and Rep. Pennartz has done a great deal of searching, to find a funding source for this bill. In this time of tight budgets and modest or no increases, it has been difficult to find a revenue stream to make this tax credit a reality,” Files said. “Obviously, we still have a few days to pass this legislation, but with each passing day, the chances of the bill’s success decreases.”