Arkansas Code of 1987 (2023) › Title 14 - LOCAL GOVERNMENT (§§ 14-1-101 — 14-387-706) › Subtitle 10 - ECONOMIC DEVELOPMENT AND TOURISM GENERALLY (§§ 14-163-201 — 14-176-113) › Chapter 164 - INDUSTRIAL DEVELOPMENT BONDS (§§ 14-164-201 — 14-164-821) › Subchapter 7 - EXEMPTIONS FROM AD VALOREM TAXATION (§§ 14-164-701 — 14-164-704) › Section 14-164-704 - Sale of property

(a)
(1)
(A)
When the Arkansas Development Finance Authority or a municipality or county in the state enters into a lease of property owned by the authority, a municipality, or a county or enters into a contract for sale of property by the authority, a municipality, or a county to a private for-profit entity under this subchapter or any other law or the Arkansas Constitution for the purpose of securing and developing industry, the lease or contract for sale shall, except as otherwise provided in this section, include an obligation that the lessee or purchaser make payments in lieu of property taxes in an amount as negotiated between the parties except the aggregate amount of the payments during the initial term of the lease or contract for sale shall be not less than thirty-five percent (35%) of the aggregate amount of ad valorem taxes that would be paid if the property were on the tax rolls, unless the Director of the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State approve a lesser amount.
(B)
If the authority is the owner of the property, there shall be a separate agreement for payment in lieu of taxes among the authority, the lessee or purchaser, the county in which the industrial facilities are located, and, if applicable, the municipality in which the industrial facilities are located.
(2)
(A)
The aggregate amount of ad valorem taxes that would be paid if the property were on the tax rolls during the initial term of the lease or contract for sale may be determined based on:
(i)
The millage and assessment rates in effect at the time the obligation to make payments in lieu of property taxes is entered into;
(ii)
The projected installed costs of the taxable real and personal property subject to or to be subject to the lease or contract for sale, which may be evidenced by an affidavit of an authorized officer of the private for-profit entity; and
(iii)
Depreciation guidelines for personal property published by the Assessment Coordination Division.
(B)
The aggregate amount determined under this subdivision (a)(2) shall be adjusted based on the actual installed costs of the taxable real and personal property at the time the lease or contract for sale is entered into or the time of completion of the project subject to the lease or contract for sale, whichever is later.
(3)
In cases in which the municipality or county is the lessor or seller, the obligation may be contained in a separate agreement at the option of the parties to the lease or contract for sale.
(4)
(A)
(i)
For agreements entered into on or after September 1, 2023, the lessee or purchaser shall provide a copy of the agreement for payment in lieu of taxes under this subsection to the county assessor, including a description of all real and personal property that is subject to the agreement for payment in lieu of taxes.
(ii)
This section does not require a lessee or purchaser to provide any information that the lessee or purchaser in good faith considers to be a trade secret, proprietary information, or other information that, if disclosed, would give an advantage to competitors.
(B)
(i)
Payments in lieu of ad valorem taxes under this subsection shall be billed by the county collector to the lessee or purchaser or their respective designees.
(ii)
Payments made to the county collector for disbursement by the county treasurer shall be distributed to the respective taxing entities at the same time and in the same manner that ad valorem taxes are disbursed as provided by law.
(b)
Before a meeting of municipal officials or county officials or officials of the authority in which action may be taken regarding approval of in-lieu-of-tax payments, the authority, municipality, or county shall give at least ten (10) days' notice of the date, time, and place of the meeting to the:
(1)
Superintendent of each school district in which all or any part of the property that is subject to the lease or contract of sale is located;
(2)
Chief Fiscal Officer of the State; and
(3)
County assessor, county tax collector, and county treasurer of the county in which the property is located.
(c)
Subsections (a) and (b) of this section do not apply to:
(1)
An agreement existing before July 1, 2001;
(2)
An agreement entered into on or after July 1, 2001, under a memorandum of intent or agreement to issue bonds authorized by a municipality or county before July 1, 2001;
(3)
An agreement entered into on or after July 1, 2001, related to a project covered by a financial incentive proposal from the Arkansas Economic Development Commission, or by resolution of the governing body of a municipality or a county designating the project by name for the purposes of this exemption, dated before July 1, 2001;
(4)
A reissue or refinancing of bonds that are subject to an existing in-lieu-of-tax agreement; and
(5)
A lease or contract for sale with a qualified manufacturer of steel as defined in §
26-52-901
or in Acts 2001, No. 541, entered into before June 30, 2009.
Amended by Act 2023, No. 524,§ 1, eff. 8/1/2023.
Amended by Act 2019, No. 289,§ 1, eff. 7/24/2019.
Amended by Act 2019, No. 910,§ 329, eff. 7/1/2019.
Acts 2003, No. 1289, § 2; 2011, No. 813, § 1.