Arkansas1 Code § 19-5-406 is amended to read as follows:originally introduced:

19-5-406.Page 24, line 29, delete "51-201(d)." and substitute the following:

Transfer"51-201(d). of remaining revenues.

(a) After making the maximum annual allocation as provided for in § 19-5-402:, (1) The the first two hundred million dollars ($200,000,000) shall be distributed as follows:

(A)(1) Seventy-five percent (75%) of the remaining general revenues available for distribution during each fiscal year shall be transferred on the last day of business in each calendar month to the General Revenue Allotment Reserve Fund, there to be used for the respective purposes as provided by law as stated under subsection (b) of this section;

and (B)(2) Twenty-five percent (25%) of the remaining general revenues available for distribution during each fiscal year, but not to exceed fifty million dollars ($50,000,000) each fiscal year, shall be transferred on the last day of business in each calendar month to the State Highway and Transportation Department Fund;

and.

(b)(1) The Chief Fiscal Officer of the State shall determine whether the balance of the Catastrophic Reserve Fund is twenty percent (20%) of the total amount of general revenue funds last distributed under § 19-5-402.

(2) If the Chief Fiscal Officer of the State determines that the balance of the Catastrophic Reserve Fund is less than twenty percent (20%) of the total amount of general revenue funds last distributed under § 19-5-402, then after the distributions under subsection (a) of this section, any additional revenue, including the distributions under subdivision (a)(1) of this section and any additional revenues in excess of those distributed under subsection (a), shall be transferred to the Catastrophic Reserve Fund to ensure that the Catastrophic Reserve Fund balance equals but does not exceed twenty percent (20%) of the total amount of general revenue funds last distributed under § 19-5-402.

(3) If it is determined that the balance of the Catastrophic Reserve Fund exceeds twenty percent (20%) of the total amount of general revenue funds last distributed under § 19-5-402, the amount in excess shall remain in the Catastrophic Reserve Fund unless the General Assembly directs 12/3/2021 5:17:56 PM RWO211 SB1 otherwise.

(2)(c) Any additional revenues available after the distributions in subdivision (1) subsection (b) of this section shall be transferred on the last day of business in each calendar month to the General Revenue Allotment Reserve Fund, there to be used for the respective purposes as provided by law.

8 SECTION 2.

Arkansas Code § 19-5-905(a)(12), concerning the uses of funds in the Securities Reserve Fund, is amended to read as follows:

(12) After all distributions and transfers under this section, less one hundred thousand dollars ($100,000) under § 19-3-521(a)(2), for a transfer by the Chief Fiscal Officer of the State on the last business day of the fiscal year of the fund balance to the Long Term Catastrophic Reserve Fund.

SECTION 3.

Arkansas Code § 19-6-486 is amended to read as follows:

19-6-486.

Long Term Catastrophic Reserve Fund.

(a) There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a special revenue fund to be known as the “Long Term Catastrophic Reserve Fund”.

(b) The Long Term Catastrophic Reserve Fund shall consist of such funds as may be provided by the General Assembly.

(c) The Long Term Catastrophic Reserve Fund shall be used to distribute moneys to one (1) or more funds or fund accounts in the Revenue Stabilization Law, § 19-5-101 et seq.

(d)(1) After determining the estimated amount of general revenue that will be available for allocation to the state agencies under the Revenue Stabilization Law, § 19-5-101 et seq., and after making the determination required by § 19-5-1227(c) and prior to making any transfers deemed necessary by the Chief Fiscal Officer of the State in § 19-5-1227(d), the Chief Fiscal Officer of the State may transfer funds from the Long Term Catastrophic Reserve Fund in the event a “revenue shortfall” exists to meet the state's financial obligation to provide an adequate educational system for the state and to provide for the effective operation of state government.

In the event the Chief Fiscal Officer of the State determines that a “revenue shortfall” exists as defined as a circumstance when the official forecast of gross 12/3/2021 5:17:56 PM RWO211 SB1 general revenue certified by the Chief Fiscal Officer of the State is projected to increase less than three percent (3%) over and above the gross general revenue collections of the previous fiscal year due to changes in economic conditions, he or she the Chief Fiscal Officer of the State may then transfer funds from the Long Term Catastrophic Reserve Fund, as approved by a vote of at least two-thirds (⅔) of the members of the Legislative Council or at least two-thirds (⅔) of the members of the Joint Budget Committee, to various funds and fund accounts, as deemed necessary, in the Revenue Stabilization Law, § 19-5-101 et seq., for the purpose of meeting unanticipated shortfalls in state general revenue.

(2) Or the Chief Fiscal Officer of the State may transfer funds from the Long Term Catastrophic Reserve Fund to the Economic Development Superprojects Project Fund for projects authorized under Arkansas Constitution, Amendment 82, as approved by the Governor and at least two- thirds (⅔) of the members of the Legislative Council or at least two-thirds (⅔) of the members of the Joint Budget Committee.

(e)(1) Upon recommendation by the Chief Fiscal Officer of the State, the Governor may determine that circumstances exist that meet the requirements for the utilization of the Long Term Catastrophic Reserve Fund as set out in this section, and the procedures set out herein under this section shall apply.

(2) When the Governor determines there is a need requiring transfer from the Long Term Catastrophic Reserve Fund, he or she shall instruct the Chief Fiscal Officer of the State to prepare and submit written documentation to the Legislative Council or the Joint Budget Committee.

Such documentation shall include:

(A) Sufficient financial data that will enable the verification of the existence of an emergency and the amount necessary to address the need for long term reserve funds from the Catastrophic Reserve Fund;

(B) A proposed distribution of moneys from the Long Term Catastrophic Reserve Fund to one (1) or more funds or fund accounts in the Revenue Stabilization Law, § 19-5-101 et seq., or to the Economic Development Superprojects Project Fund, or both;

and (C) A statement certifying that no other funds are available that could be transferred in lieu of the funds in the Long Term 12/3/2021 5:17:56 PM RWO211 SB1 Catastrophic Reserve Fund.

(3) Such documentation Documentation under subdivision (e)(2) of this section shall be submitted to the Legislative Council or Joint Budget Committee for approval prior to before the implementation of the proposed distribution.

(4)(A) The Chief Fiscal Officer of the State, after having sought and received prior approval of at least two-thirds (⅔) of the members of the Legislative Council or at least two-thirds (⅔) of the members of the Joint Budget Committee, shall cause the required transfers to be made on his or her books and on the books of the Treasurer of State and the Auditor of State from the Long Term Catastrophic Reserve Fund to the appropriate funds and fund accounts in the Revenue Stabilization Law, § 19-5-101 et seq., or to the Economic Development Superprojects Project Fund, or both.

(B) In no event shall the amounts transferred in any fiscal year to the funds and fund accounts in the Revenue Stabilization Law, § 19-5-101 et seq., by this section cause the general revenues to exceed the maximum allocations authorized in the Revenue Stabilization Law, § 19-5-101 et seq.

(f) Determining the maximum amount of appropriation and general revenue funding for a state agency each fiscal year is the prerogative of the General Assembly.

This is usually accomplished by delineating such maximums in the appropriation acts for a state agency and the general revenue allocations authorized for each fund and fund account by amendment to the Revenue Stabilization Law, § 19-5-101 et seq.

Further, the General Assembly has determined that creating the Long Term Catastrophic Reserve Fund and establishing the procedures for the transfer of funds to various funds and fund accounts in the Revenue Stabilization Law, § 19-5-101 et seq., or to the Economic Development Superprojects Project Fund, or both, provides for the efficient and effective operation of state government if a revenue shortfall is determined to exist.

Therefore, it is both necessary and appropriate that the General Assembly maintain oversight by requiring prior approval of the Legislative Council or Joint Budget Committee as provided by this section.

The requirement of approval by the Legislative Council or Joint Budget Committee is not a severable part of this section.

If the requirement of approval by the Legislative Council or Joint Budget Committee is ruled unconstitutional by a court of competent jurisdiction, this entire section is 12/3/2021 5:17:56 PM RWO211 SB1 void.

(g) During each fiscal year, after the provisions of § 19-5-1004(b)(2) are complied with, the Chief Fiscal Officer of the State shall replenish the Long Term Reserve Fund by transferring no more than fifty percent (50%) of the balance in the General Revenue Allotment Reserve Fund or an amount equal to all transfers made under this section during the fiscal year immediately preceding the fiscal year in which such replenishment is made under this section, whichever is less, to the Long Term Reserve Fund.

SECTION 4.

Arkansas Code § 26-26-310(b)(2)(D)(iii)(b), concerning the certification of the amount of property tax reduction, is amended to read as follows:

(b) Except as provided in subdivision (b)(2)(D)(iii)(a) of this section, the revenues credited to the Property Tax Relief Trust Fund in excess of the amount determined under subdivision (b)(2)(D)(ii) of this section shall be transferred from the Property Tax Relief Trust Fund to the Long Term Catastrophic Reserve Fund.

SECTION 5.

Arkansas Code § 26-51-201(a), concerning the rate of tax levied on the income of individuals, trusts, and estates, is amended to read as follows:

(a) For tax years beginning on and after January 1, 2014, a A tax is imposed upon, and with respect to, the entire income of every resident, individual, trust, or estate.

The tax shall be levied, collected, and paid annually upon the entire net income as defined and computed in this chapter at the following rates, giving effect to the tax credits provided hereafter, in the manner set forth:

(1) On the first four thousand two hundred ninety-nine dollars ($4,299) of net income or any part thereof, nine-tenths percent (0.9%);

(2) On the next four thousand one hundred dollars ($4,100) of net income or any part thereof, two and five-tenths percent (2.5%);

(3) On the next four thousand two hundred dollars ($4,200) of net income or any part thereof, three and five-tenths percent (3.5%);

(4) On the next eight thousand four hundred dollars ($8,400) of net income or any part thereof, four and five-tenths percent (4.5%);

(5) On the next fourteen thousand one hundred dollars ($14,100) 12/3/2021 5:17:56 PM RWO211 SB1 of net income or any part thereof, six percent (6%);

(6) On net income of thirty-five thousand one hundred dollars ($35,100) and above, seven percent (7%);

(7) Every resident, individual, trust, or estate having net income greater than or equal to twenty-two thousand two hundred dollars ($22,200), but less than or equal to seventy-nine thousand three hundred dollars ($79,300), shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,499 0.75% $4,500 $8,899 2.5% $8,900 $13,399 3.5% $13,400 $22,199 4.5% $22,200 $37,199 5% $37,200 $79,300 5.9% (8) Every resident, individual, trust, or estate having net income of less than twenty-two thousand two hundred dollars ($22,200) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,499 0% $4,500 $8,899 2% $8,900 $13,399 3% $13,400 $22,199 3.4% (9)(A) For the tax year beginning January 1, 2020, every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,000 2% 12/3/2021 5:17:56 PM RWO211 SB1 $4,001 $8,000 4% $8,001 $79,300 5.9% $79,301 and above 6.6% 5 (B) For tax years beginning on and after January 1, 2021, every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,000 2% $4,001 $8,000 4% $8,001 and above 5.9% (10) Every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300), but not more than eighty-four thousand six hundred dollars ($84,600), shall reduce the amount of income tax due as determined under subdivision (a)(9) of this section by deducting a bracket adjustment amount in accordance with the table set forth below:

From Less Than or Equal To Bracket Adjustment Amount $79,301 $80,300 $440 $80,301 $81,300 $340 $81,301 $82,500 $240 $82,501 $83,600 $140 $83,601 $84,600 $40 $84,601 and above $0 (1)(A) On and after January 1, 2022, every resident, individual, trust, or estate having net income less than or equal to eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

12/3/2021 5:17:56 PM RWO211 SB1 From Less Than or Equal To Rate 3 $0 $4,999 0% $5,000 $9,999 2% $10,000 $14,299 3% $14,300 $23,599 3.4% $23,600 $39,699 5% $39,700 $84,500 5.5% (B) On and after January 1, 2022, every resident, individual, trust, or estate having net income greater than eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,300 2% $4,301 $8,500 4% $8,501 and above 5.5% (C) For tax years beginning on or after January 1, 2022, every resident, individual, trust, or estate having net income greater than or equal to eighty-four thousand five hundred one dollars ($84,501) but not greater than ninety thousand six hundred dollars ($90,600) shall reduce the amount of income tax due as determined under subdivision (a)(1)(B) of this section by deducting a bracket adjustment amount in accordance with the table set forth below:

From Less Than or Equal To Bracket Adjustment Amount $84,501 $84,600 $610 $84,601 $84,700 $600 $84,701 $84,800 $590 $84,801 $84,900 $580 $84,901 $85,000 $570 $85,001 $85,100 $560 12/3/2021 5:17:56 PM RWO211 SB1 $85,101 $85,200 $550 $85,201 $85,300 $540 $85,301 $85,400 $530 $85,401 $85,500 $520 $85,501 $85,600 $510 $85,601 $85,700 $500 $85,701 $85,800 $490 $85,801 $85,900 $480 $85,901 $86,000 $470 $86,001 $86,100 $460 $86,101 $86,200 $450 $86,201 $86,300 $440 $86,301 $86,400 $430 $86,401 $86,500 $420 $86,501 $86,600 $410 $86,601 $86,700 $400 $86,701 $86,800 $390 $86,801 $86,900 $380 $86,901 $87,000 $370 $87,001 $87,100 $360 $87,101 $87,200 $350 $87,201 $87,300 $340 $87,301 $87,400 $330 $87,401 $87,500 $320 $87,501 $87,600 $310 $87,601 $87,700 $300 $87,701 $87,800 $290 $87,801 $87,900 $280 $87,901 $88,000 $270 $88,001 $88,100 $260 $88,101 $88,200 $250 $88,201 $88,300 $240 $88,301 $88,400 $230 $88,401 $88,500 $220 $88,501 $88,600 $210 $88,601 $88,700 $200 12/3/2021 5:17:56 PM RWO211 SB1 $88,701 $88,800 $190 $88,801 $88,900 $180 $88,901 $89,000 $170 $89,001 $89,100 $160 $89,101 $89,200 $150 $89,201 $89,300 $140 $89,301 $89,400 $130 $89,401 $89,500 $120 $89,501 $89,600 $110 $89,601 $89,700 $100 $89,701 $89,800 $90 $89,801 $89,900 $80 $89,901 $90,000 $70 $90,001 $90,100 $60 $90,101 $90,200 $50 $90,201 $90,300 $40 $90,301 $90,400 $30 $90,401 $90,500 $20 $90,501 $90,600 $10 $90,601 and up $0 (2)(A) On and after January 1, 2023, every resident, individual, trust, or estate having net income less than or equal to eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,999 0% $5,000 $9,999 2% $10,000 $14,299 3% $14,300 $23,599 3.4% $23,600 $39,699 5% $39,700 $84,500 5.3% (B) On and after January 1, 2023, every resident, individual, trust, or estate having net income greater than eighty-four 12/3/2021 5:17:56 PM RWO211 SB1 thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate 5 $0 $4,300 2% $4,301 $8,500 4% $8,501 and above 5.3% 9 (C) For tax years beginning on or after January 1, 2023, every resident, individual, trust, or estate having net income greater than or equal to eighty-four thousand five hundred one dollars ($84,501) but not greater than ninety thousand dollars ($90,000) shall reduce the amount of income tax due as determined under subdivision (a)(2)(B) of this section by deducting a bracket adjustment amount in accordance with the table set forth below:

From Less Than or Equal To Bracket Adjustment Amount $84,501 $84,600 $548 $84,601 $84,700 $538 $84,701 $84,800 $528 $84,801 $84,900 $518 $84,901 $85,000 $508 $85,001 $85,100 $498 $85,101 $85,200 $488 $85,201 $85,300 $478 $85,301 $85,400 $468 $85,401 $85,500 $458 $85,501 $85,600 $448 $85,601 $85,700 $438 $85,701 $85,800 $428 $85,801 $85,900 $418 $85,901 $86,000 $408 $85,001 $86,100 $398 $86,101 $86,200 $388 12/3/2021 5:17:56 PM RWO211 SB1 $86,201 $86,300 $378 $86,301 $86,400 $368 $86,401 $86,500 $358 $86,501 $86,600 $348 $86,601 $86,700 $338 $86,701 $86,800 $328 $86,801 $86,900 $318 $86,901 $87,000 $308 $87,001 $87,100 $298 $87,101 $87,200 $288 $87,201 $87,300 $278 $87,301 $87,400 $268 $87,401 $87,500 $258 $87,501 $87,600 $248 $87,601 $87,700 $238 $87,701 $87,800 $228 $87,801 $87,900 $218 $87,901 $88,000 $208 $88,001 $88,100 $198 $88,101 $88,200 $188 $88,201 $88,300 $178 $88,301 $88,400 $168 $88,401 $88,500 $158 $88,501 $88,600 $148 $88,601 $88,700 $138 $88,701 $88,800 $128 $88,801 $88,900 $118 $88,901 $89,000 $108 $89,001 $89,100 $98 $89,101 $89,200 $88 $89,201 $89,300 $78 $89,301 $89,400 $68 $89,401 $89,500 $58 $89,501 $89,600 $48 $89,601 $89,700 $38 $89,701 $89,800 $28 12/3/2021 5:17:56 PM RWO211 SB1 $89,801 $89,900 $18 $89,901 $90,000 $8 $90,001 and up $0 5 (3)(A) On and after January 1, 2024, every resident, individual, trust, or estate having net income less than or equal to eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,999 0% $5,000 $9,999 2% $10,000 $14,299 3% $14,300 $23,599 3.4% $23,600 $39,699 5% $39,700 $84,500 5.1% (B) On and after January 1, 2024, every resident, individual, trust, or estate having net income greater than eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,300 2% $4,301 $8,500 4% $8,501 and above 5.1% (C) For tax years beginning on or after January 1, 2024, every resident, individual, trust, or estate having net income greater than or equal to eighty-four thousand five hundred one dollars ($84,501) but not greater than eighty-nine thousand four hundred dollars ($89,400) shall reduce the amount of income tax due as determined under subdivision (a)(3)(B) of this section by deducting a bracket adjustment amount in accordance with the table set forth below:

From Less Than or Equal To Bracket Adjustment 12/3/2021 5:17:56 PM RWO211 SB1 Amount 3 $84,501 $84,600 $485 $84,601 $84,700 $475 $84,701 $84,800 $465 $84,801 $84,900 $455 $84,901 $85,000 $445 $85,001 $85,100 $435 $85,101 $85,200 $425 $85,201 $85,300 $415 $85,301 $85,400 $405 $85,401 $85,500 $395 $85,501 $85,600 $385 $85,601 $85,700 $375 $85,701 $85,800 $365 $85,801 $85,900 $355 $85,901 $86,000 $345 $86,001 $86,100 $335 $86,101 $86,200 $325 $86,201 $86,300 $315 $86,301 $86,400 $305 $86,401 $86,500 $295 $86,501 $86,600 $285 $86,601 $86,700 $275 $86,701 $86,800 $265 $86,801 $86,900 $255 $86,901 $87,000 $245 $87,001 $87,100 $235 $87,101 $87,200 $225 $87,201 $87,300 $215 $87,301 $87,400 $205 $87,401 $87,500 $195 $87,501 $87,600 $185 $87,601 $87,700 $175 $87,701 $87,800 $165 $87,801 $87,900 $155 12/3/2021 5:17:56 PM RWO211 SB1 $87,901 $88,000 $145 $88,001 $88,100 $135 $88,101 $88,200 $125 $88,201 $88,300 $115 $88,301 $88,400 $105 $88,401 $88,500 $95 $88,501 $88,600 $85 $88,601 $88,700 $75 $88,701 $88,800 $65 $88,801 $88,900 $55 $88,901 $89,000 $45 $89,001 $89,100 $35 $89,101 $89,200 $25 $89,201 $89,300 $15 $89,301 $89,400 $5 $89,401 and up $0 (D) If, on or after July 1, 2022, but before January 1, 2024, funds are transferred from the Catastrophic Reserve Fund, then:

(i) Subdivisions (a)(3)(A)-(C) and (a)(4)(A)-(C) of this section shall not take effect;

and (ii) For tax years beginning on and after January 1, 2024, every resident, individual, trust, or estate shall determine the amount of income tax due under this subsection in accordance with the tables set forth in subdivision (a)(2) of this section.

(4)(A) On and after January 1, 2025, every resident, individual, trust, or estate having net income less than or equal to eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate $0 $4,999 0% $5,000 $9,999 2% $10,000 $14,299 3% $14,300 $23,599 3.4% $23,600 $84,500 4.9% 12/3/2021 5:17:56 PM RWO211 SB1 2 (B) On and after January 1, 2025, every resident, individual, trust, or estate having net income greater than eighty-four thousand five hundred dollars ($84,500) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:

From Less Than or Equal To Rate 8 $0 $4,300 2% $4,301 $8,500 4% $8,501 and above 4.9% (C) For tax years beginning on or after January 1, 2025, every resident, individual, trust, or estate having net income greater than or equal to eighty-four thousand five hundred one dollars ($84,501) but not greater than eighty-eight thousand nine hundred dollars ($88,900) shall reduce the amount of income tax due as determined under subdivision (a)(5)(B) of this section by deducting a bracket adjustment amount in accordance with the table set forth below:

From Less Than or Equal To Bracket Adjustment Amount $84,501 $84,600 $439 $84,601 $84,700 $429 $84,701 $84,800 $419 $84,801 $84,900 $409 $84,901 $85,000 $399 $85,001 $85,100 $389 $85,101 $85,200 $379 $85,201 $85,300 $369 $85,301 $85,400 $359 $85,401 $85,500 $349 $85,501 $85,600 $339 $85,601 $85,700 $329 $85,701 $85,800 $319 $85,801 $85,900 $309 12/3/2021 5:17:56 PM RWO211 SB1 $85,901 $86,000 $299 $86,001 $86,100 $289 $86,101 $86,200 $279 $86,201 $86,300 $269 $86,301 $86,400 $259 $86,401 $86,500 $249 $86,501 $86,600 $239 $86,601 $86,700 $229 $86,701 $86,800 $219 $86,801 $86,900 $209 $86,901 $87,000 $199 $87,001 $87,100 $189 $87,101 $87,200 $179 $87,201 $87,300 $169 $87,301 $87,400 $159 $87,401 $87,500 $149 $87,501 $87,600 $139 $87,601 $87,700 $129 $87,701 $87,800 $119 $87,801 $87,900 $109 $87,901 $88,000 $99 $88,001 $88,100 $89 $88,101 $88,200 $79 $88,201 $88,300 $69 $88,301 $88,400 $59 $88,401 $88,500 $49 $88,501 $88,600 $39 $88,601 $88,700 $29 $88,701 $88,800 $19 $88,801 $88,900 $9 $88,901 and up $0 (D) If, during the 2024 calendar year, funds are transferred from the Catastrophic Reserve Fund, then:

(i) Subdivisions (a)(4)(A)-(C) of this section shall not take effect;

and 12/3/2021 5:17:56 PM RWO211 SB1 (ii) For tax years beginning on and after January 1, 2025, every resident, individual, trust, or estate shall determine the amount of income tax due under this subsection in accordance with the tables set forth in subdivision (a)(3) of this section.

(11)(5) The tables set forth in subdivisions (a)(1)-(10)(4) of this section shall be adjusted annually in accordance with the method set forth in subsection (d) of this section.

9 SECTION 6.

Arkansas Code § 26-51-205(a), concerning the rate of tax levied on corporations organized under the laws of this state, is amended to add additional subdivisions to read as follows:

(4) For tax years beginning on or after January 1, 2023, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:

(A) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);

(B) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);

(C) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);

(D) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);

and (E) On net income exceeding twenty-five thousand dollars ($25,000), five and seven-tenths percent (5.7%).

(5)(A) Except as provided in subdivision (a)(5)(B) of this section, for tax years beginning on or after January 1, 2024, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:

(i) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);

(ii) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);

12/3/2021 5:17:56 PM RWO211 SB1 (iii) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);

(iv) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);

and (v) On net income exceeding twenty-five thousand dollars ($25,000), five and five-tenths percent (5.5%).

(B) If, on or after July 1, 2022, but before January 1, 2024, funds are transferred from the Catastrophic Reserve Fund, then:

(i) Subdivisions (a)(5)(A) and (a)(6)(A) of this section shall not take effect;

and (ii) For tax years beginning on and after January 1, 2024, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year as provided under subdivision (a)(4) of this section.

(6)(A) Except as provided in subdivisions (a)(5)(B) and (a)(6)(B) of this section, for tax years beginning on or after January 1, 2025, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:

(i) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);

(ii) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);

(iii) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);

(iv) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);

and (v) On net income exceeding twenty-five thousand dollars ($25,000), five and three-tenths percent (5.3%).

(B) If subdivision (a)(5)(A) of this section takes effect and funds are transferred from the Catastrophic Reserve Fund during calendar year 2024, then:

12/3/2021 5:17:56 PM RWO211 SB1 (i) Subdivision (a)(6)(A) of this section shall not take effect;

and (ii) For tax years beginning on and after January 1, 2025, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state received by the corporation during the income year as provided under subdivision (a)(5) of this section.

SECTION 7.

Arkansas Code § 26-51-205(b), concerning the rate of tax levied on foreign corporations doing business in this state, is amended to add additional subdivisions to read as follows:

(4) For tax years beginning on or after January 1, 2023, every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income as now defined by the income tax laws of this state, on the following basis:

(i) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);

(ii) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);

(iii) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);

(iv) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);

and (v) On net income exceeding twenty-five thousand dollars ($25,000), five and seven-tenths percent (5.7%).

(5)(A) Except as provided in subdivision (b)(5)(B) of this section, for tax years beginning on or after January 1, 2024, every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income, as now defined by the income tax laws of this state, on the following basis:

(i) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);

(ii) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);

(iii) On the next five thousand dollars ($5,000) of 12/3/2021 5:17:56 PM RWO211 SB1 net income or any part thereof, three percent (3%);

(iv) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);

and (v) On net income exceeding twenty-five thousand dollars ($25,000), five and five-tenths percent (5.5%).

(B) If, on or after July 1, 2022, but before January 1, 2024, funds are transferred from the Catastrophic Reserve Fund, then:

(i) Subdivisions (a)(5)(A) and (a)(6)(A) of this section shall not take effect;

and (ii) For tax years beginning on and after January 1, 2024, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year as provided under subdivision (a)(4) of this section.

(6)(A) Except as provided in subdivisions (a)(5)(B) and (a)(6)(B) of this section, for tax years beginning on or after January 1, 2025, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:

(i) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);

(ii) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);

(iii) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);

(iv) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);

and (v) On net income exceeding twenty-five thousand dollars ($25,000), five and three-tenths percent (5.3%).

(B) If subdivision (a)(5)(A) of this section takes effect and funds are transferred during calendar year 2024 from the Catastrophic Reserve Fund, then:

(i) Subdivision (a)(6)(A) of this section shall not 12/3/2021 5:17:56 PM RWO211 SB1 take effect;

and (ii) For tax years beginning on and after January 1, 2025, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year as provided under subdivision (a)(5) of this section.

9 SECTION 8.

Arkansas Code § 26-51-404(b)(34)(A), concerning exclusions from gross income, is amended to read as follows:

(34)(A) Payments received under the Coronavirus Food Assistance Program 1 or Coronavirus Food Assistance Program 2, described in 7 C.F.R.

Part 9, as it existed on January 19, 2021, or under any successor program or programs.

SECTION 9.

Arkansas Code § 26-51-430, concerning the standard income tax deduction, is amended to add an additional subsection to read as follows:

(c)(1) The Secretary of the Department of Finance and Administration shall increase annually the standard deduction provided under subsection (b) of this section by the cost-of-living adjustment for the current calendar year, rounding the amount to the nearest ten dollars ($10.00).

(2)(A)(i) For purposes of subdivision (c)(1) of this section, the cost-of-living adjustment for a calendar year is the percentage, if any, by which the Consumer Price Index for the current calendar year exceeds the Consumer Price Index for the preceding calendar year, not to exceed three percent (3%).

(ii) If the Consumer Price Index for the current calendar year does not exceed the Consumer Price Index for the preceding calendar year, the standard deduction shall not be adjusted under this subsection for that year.

(B) The Consumer Price Index for a calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of that calendar year.

(C) As used in this subsection, "Consumer Price Index" means the most recent Consumer Price Index for all Urban Consumers published by the United States Department of Labor.

12/3/2021 5:17:56 PM RWO211 SB1 2 SECTION 10.

Arkansas Code § 26-51-501(a), concerning personal tax credits, is amended to add an additional subdivision to read as follows:

(6)(A) An individual taxpayer having net income up to twenty- four thousand seven hundred dollars ($24,700) who timely files a tax return is allowed an income tax credit against the income tax imposed by this chapter in accordance with the table set forth below:

From Less Than or Equal To Credit Amount $0 $23,600 $60 $23,601 $23,700 $55 $23,701 $23,800 $50 $23,801 $23,900 $45 $23,901 $24,000 $40 $24,001 $24,100 $35 $24,101 $24,200 $30 $24,201 $24,300 $25 $24,301 $24,400 $20 $24,401 $24,500 $15 $24,501 $24,600 $10 $24,601 $24,700 $5 $24,701 and up $0 (B) The amount of the income tax credit under subdivision (a)(6)(A) of this section that may be claimed by the taxpayer in a tax year shall not exceed the amount of income tax due by the taxpayer.

(C) The table in subdivision (a)(6)(A) of this section shall be adjusted annually in accordance with the method set forth in § 26- 51-201(d).

Arkansas Code §Title 26-65-103(b)(1)(A),26, concerningChapter income51, taxSubchapter due5, underis theamended Electiveto Pass-Throughadd Entityan Taxadditional Actsection effective on January 1, 2022, is amended to read as follows:

(b)(1)(A)26-51-517. Except as provided in subdivision (b)(1)(B) of this section, a tax of five and nine-tenths percent (5.9%) equal to the top marginal income-tax rate under § 26-51-201(a) is levied on the net taxable income of 12/3/2021 5:17:56 PM RWO211 SB1 an affected business entity, as determined under Chapter 51 of this title, including any applicable basis adjustments, to the extent that the income is reported to the secretary as business income derived from the affected business entity.

6Full-time SECTIONlaw 12.enforcement officer tax credit.

DO(a) NOTAs CODIFYused —in TEMPORARYthis LANGUAGE.section:

(a)(1) By“Full-time Januarylaw 5,enforcement 2024,officer” themeans Secretarya oflaw theenforcement Departmentofficer ofwho: Finance and Administration shall notify the public and the Bureau of Legislative Research about whether or not the following have taken effect:

(1)(A) SectionIs 26-51-201(a)(3);employed by and receives a salary authorized by a law enforcement agency;

(2)(B) SectionHas 26-51-205(a)(5);the statutory authority to enforce the criminal, traffic, or highway laws of the state or of the federal government;

and (3)(C) SectionHas 26-51-205(b)(5).worked for a law enforcement agency for at least twenty-five (25) hours per week for at least eleven (11) months of the calendar year for which the tax credit under subsection (b) of this section is being claimed;

(b) By January 5, 2025, the Secretary of the Department of Finance and Administration(2) shall“Law notifyenforcement theagency” publicmeans: and the Bureau of Legislative Research about whether or not the following have taken effect:

(1)(A) SectionA 26-51-201(a)(4);municipal police department;

(2)(B) SectionA 26-51-205(a)(6);county sheriff’s office;

and(C) (3)A Sectionlaw 26-51-205(b)(6).enforcement entity of the State of Arkansas, including without limitation:

(c)(i) SectionThe 5Division of thisArkansas actState doesPolice; not affect any taxpayer's obligations under § 26-51-201 that were incurred before January 1, 2022.

SECTION*.RWO215* 13.RWO215 - 12-06-2021 13:44:32 Page 1 of 3 (ii) The Arkansas Highway Police Division of the Arkansas Department of Transportation;

EFFECTIVE(iii) DATE.The State Capitol Police;

Sectionsand 5,(iv) 6,A 7,police 9,department 10,that andis 11part of thisa actpublic arecollege effective for tax years beginning on or afteruniversity; January 1, 2022.

SECTION(D) 14.An airport authority;

EMERGENCYor CLAUSE.(E) A federal law enforcement entity.

It(b)(1) There is foundallowed andan determinedincome bytax credit against the Generalincome Assemblytax ofimposed by this chapter in the Stateamount of Arkansasthree thatthousand thisdollars act($3,000) wouldfor createa significanttaxpayer changeswho toobtains theverification state'sas incomestated taxin laws;subsection (c) of this section.

that(2) If the amount of the income tax credit allowed under this actsection wouldexceeds createthe significanttaxpayer's changesincome totax liability, the fiscalexcess policyshall ofbe refunded to the state;taxpayer.

that(c) taxpayersA andtaxpayer employersmay planreceive tothe meetcredit theirunder obligationssubsection on(b) aof calendar-yearthis basis;section if the taxpayer obtains verification as follows:

and(1) thatIf thisthe acttaxpayer is immediatelythe necessarychief tolaw ensureenforcement theofficer financial stability of thea state,law toenforcement allowagency, taxpayersthe andtaxpayer employersshall timeobtain bothwritten toverification planon fora andform toapproved implement the changes in law created by this act, and to ensure that the Department of Finance and Administration hasthat: sufficient time to update its forms and software and train its personnel in accordance with this act.

Therefore,(A) anStates emergencythat is declared to exist, and this act being immediately necessary for the preservationtaxpayer ofis thea publicfull-time peace,law health,enforcement andofficer; safety shall 12/3/2021 5:17:56 PM RWO211 SB1 become effective on:

(1)and The(B) dateIs ofsigned itsby approvalthe bysecond most senior law enforcement officer and the Governor;payroll clerk of the law enforcement agency;

and (2) If the billtaxpayer is neithernot approvedthe norchief vetoedlaw byenforcement theofficer Governor,of the expirationlaw ofenforcement agency, the periodtaxpayer ofshall timeobtain duringwritten whichverification theon Governora mayform vetoapproved by the bill;Department of Finance and Administration that:

or(A) (3)States Ifthat the billtaxpayer is vetoeda byfull-time thelaw Governorenforcement andofficer; the veto is overridden, the date the last house overrides the veto.

9and 26(B) 12/3/2021Is 5:17:56signed PMby RWO211the taxpayer's immediate supervisor and the chief law enforcement officer of the law enforcement agency." AND Appropriately renumber the sections of the bill AND Page 25, line 22, delete "10, and 11" and substitute "10, 11, and 12" RWO215 - 12-06-2021 13:44:32 Amendment No.

1 to Senate Bill 1 Page 2 of 3 The Amendment was read the first time, rules suspended and read the second time and _______________________ By:

Senator Rapert RWO/RWO - 12-06-2021 13:44:32 _________________________ RWO215 Secretary RWO215 - 12-06-2021 13:44:32 Amendment No.

1 to Senate Bill 1 Page 3 of 3