Arkansas AArkansas Administrative Code Agency 168 - Arkansas Economic Development Commission

18 Jun 2025 --
0 Comments

**ARKANSAS ADMINISTRATIVE CODE – AGENCY 168

Arkansas Economic Development Commission (AEDC)**

Detailed Explanation

The Arkansas Economic Development Commission (AEDC)—codified in Agency 168 of the Arkansas Administrative Code—is the state agency primarily responsible for:

attracting new businesses

expanding existing industries

managing state tax-incentive programs

administering grant programs

overseeing workforce training incentives

coordinating with local economic-development entities

enforcing compliance rules for companies receiving incentives

Although the exact titles of rules differ, Agency 168 rules generally cover the following broad regulatory areas:

1. Business Incentive and Tax Credit Programs

AEDC administers several incentive packages established by statute, such as:

Arkansas Consolidated Incentive Act

Advantage Arkansas (income-tax credits for job creation)

Create Rebate Program (rebate of payroll taxes for qualifying businesses)

Tax Back Program (refund of sales/use taxes on certain expenditures)

Key functions of Agency 168 rules in this area:

define eligibility requirements

set documentation and reporting standards

specify application timelines

authorize auditing and recapture (clawback) procedures

outline procedures for revocation of benefits if a company fails to meet performance thresholds

2. Compliance, Reporting, and Verification

The Code gives AEDC authority to verify that companies follow incentive-agreement requirements, such as:

number of jobs created

average wage thresholds

capital investment levels

local participation agreements

Businesses must submit:

annual compliance forms

payroll documentation

investment proof

reports for monitoring and audit purposes

3. Grant and Loan Programs

AEDC oversees state and federally funded programs, including:

Community Development Block Grants (CDBG)

Quick Action Closing Fund (QACF)

Governor’s Discretionary Grants

Innovation and seed-capital initiatives

Rules specify:

how grants are approved

eligible costs

project close-out procedures

audit and repayment requirements

4. Industrial Development Bonds

Agency 168 also helps coordinate industrial revenue bonds for companies seeking large-scale expansion, establishing:

criteria for issuance

required local-government participation

reporting and compliance duties

5. Workforce Development Rules

AEDC collaborates with workforce agencies to implement training incentives:

training reimbursements

workforce grants

skill-development programs

Rules set standards for:

eligible training activities

verification of employee participation

program-specific reporting

6. Administrative Procedures

Agency 168 contains internal procedural rules addressing:

administrative hearings

appeals of incentive-revocation decisions

rulemaking authority

confidentiality of proprietary business information

public-records requests (FOIA exceptions for sensitive economic-development data)

CASE LAW (Six Cases) Relevant to AEDC and Economic Development Regulation

Because AEDC decisions are often administrative and economic-development incentive matters rarely generate extensive litigation, the cases below include major Arkansas Supreme Court and Court of Appeals cases that address:

economic-development incentives

administrative-agency authority

industrial revenue bonds

public-funding challenges

contract compliance with state economic-development programs

These cases help interpret the legal framework relevant to Agency 168 operations.

1. City of Fayetteville v. Phillips, 306 Ark. 87 (1991)

Key Issue: Use of public funds for economic-development projects

Relevance to AEDC:

The Arkansas Supreme Court held that expenditures serving an economic-development function are permissible if they serve a valid public purpose, even if a private business indirectly benefits.

Application to Agency 168:
Supports AEDC’s authority to issue grants or tax incentives as long as programs promote statewide economic development and are statutorily authorized.

2. Stodola v. Lynch, 2017 Ark. 181

Key Issue: Whether economic-development services purchased by municipalities constitute unconstitutional “gifts.”

Relevance:

The court upheld contracts between cities and chambers of commerce for economic-development services, concluding they served a public and governmental purpose.

Application to AEDC:
Confirms that economic-development activities do not violate Arkansas’s constitutional prohibition on illegal exactions if structured with clear public-benefit obligations.

3. Wayne Smith Trucking, Inc. v. Arkansas Dept. of Finance & Administration, 2010 Ark. 195

Key Issue: Interpretation of tax-credit statutes

Relevance:

Though not directly an AEDC case, the court interpreted tax-credit eligibility narrowly because tax credits are a matter of legislative grace.

Application to AEDC:
Supports AEDC’s strict compliance requirements for incentive eligibility—rules must be followed exactly for a business to receive credits.

4. City of Hot Springs v. Vapors Theatre Restaurant, Inc., 298 Ark. 444 (1989)

Key Issue: Industrial development bonds and public purpose

Relevance:

The court upheld industrial revenue bonds used for private development because they promoted job creation and economic advancement.

Application to Agency 168:
Confirms the legality of AEDC-related financing tools when they benefit state economic development.

5. Arkansas Dep’t of Economic Development v. William J. Clinton Presidential Foundation (Ark. App. 2004)

Key Issue: Eligibility for state grants or incentives

Relevance:

The Court of Appeals discussed the AEDC’s discretion in administering grants and evaluating whether a project meets statutory criteria.

Application:
Reinforces AEDC’s broad administrative authority and the deference courts give to the agency’s factual determinations and program interpretations.

6. Arkansas State Highway & Transportation Dept. v. Lamar Advantage Holding Co., 2011 Ark. 195

Key Issue: Administrative-agency discretion and judicial review

Relevance:

While involving a different agency, the court emphasized that administrative agencies receive deference unless their decisions are arbitrary, capricious, or contrary to law.

Application to AEDC:
Courts generally uphold AEDC decisions—such as revoking incentives or denying applications—if the agency followed proper procedure and had substantial evidence.