AR HB2135

Creates income tax exemption for qualified lignite-to-syncrude manufacturers, with exemption duration calculated using a formula based on proposed payroll and investment amounts, capped at a maximum of 20 years.

Requires qualified manufacturers to invest at least $20 million in a new or expanded lignite-to-syncrude facility, create at least 100 new jobs, and locate the facility in Arkansas between January 1, 2013 and June 30, 2023.

Defines "lignite-to-syncrude" as synthetic crude oil made from lignite that serves as a substitute for and is completely interchangeable with conventional petroleum-based crude oil.

Requires manufacturers that are subsidiaries of existing Arkansas companies to establish the new or expanded lignite-to-syncrude facility as a separate legal entity and mandates a financial incentive agreement with the Arkansas Economic Development Commission.

Exemption qualification eligibility expires June 30, 2023, and the act is effective for tax years beginning January 1, 2013.