(a) A special incentive based on the payroll of the new targeted businesses in the state is established to:

(1) Encourage the development of jobs that pay significantly more than the county average hourly wage in the county in which the targeted business locates or the state average hourly wage if the state average hourly wage is less than the county average hourly wage; and

(2) Provide an incentive to assist with the start-up of businesses targeted for growth.

(b) In order to qualify for the special incentive provided by subsection (c) of this section, a new business shall:

(1) Be identified by the Arkansas Economic Development Commission as being one of those business sectors targeted for growth under § 15-4-2703;

(2) Have an annual payroll of the business for Arkansas taxpayers of not less than one hundred thousand dollars ($100,000) or more than one million dollars ($1,000,000);

(3) Show proof of an equity investment of two hundred fifty thousand dollars ($250,000) or more; and

(4) Pay average hourly wages in excess of one hundred fifty percent (150%) of the county or state average hourly wage, whichever is less.

(c)

(1) A new targeted business may earn an income tax credit equal to ten percent (10%) of its annual payroll, with the maximum payroll credit not to exceed one hundred thousand dollars ($100,000) in any year during the term of the financial incentive agreement.

(2)

(A) The term of the financial incentive agreement shall be established by the Executive Director of the Arkansas Economic Development Commission for a period not to exceed five (5) years.

(B) The term of the financial incentive agreement for new targeted businesses earning a tax credit under this subsection or under § 15-4-2708(c) shall begin on January 1 of the year in which the financial incentive agreement was signed.

(C) The executive director may allow a qualified targeted business to sell any income tax credits earned through one (1) or more incentives authorized by this subchapter.

(d)

(1) In order to sell income tax credits earned through incentives authorized by this subchapter, the new targeted business must apply to the commission and furnish information necessary to facilitate the sale of income tax credits.

(2)

(A) Any unused tax credits may be carried forward for nine (9) years after the year in which the credit was first earned or until exhausted, whichever occurs first.

(B) The ultimate recipient of the tax credits shall be subject to the same carry-forward provisions as the targeted business that earned the credits.

(C) The purchase of the tax credits will not establish a new carry-forward period for the ultimate recipient.

(e) A targeted business claiming or selling tax credits earned under this section or § 15-4-2708 shall be prohibited from receiving the credit granted by § 26-51-1102(b) for the same expenditures.

(f)

(1) There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the "Innovate Arkansas Fund" for the support of a contract to provide support and assistance to the development and growth of knowledge-based and technology-based companies in the State of Arkansas.

(2) This fund shall be for the sole support of a contract between the commission and the entity selected to provide direct support and assistance to knowledge-based companies in the State of Arkansas.

(3) Moneys deposited into the fund by the General Assembly shall be used only through a contractual relationship between the commission and the entity selected to provide needed services to knowledge-based companies.