2010 Arkansas Code
Title 14 - Local Government
Subtitle 10 - Economic Development And Tourism Generally
Chapter 164 - Industrial Development Bonds
Subchapter 3 - Local Government Bond Act
§ 14-164-337 - Pledge of preexisting sales and use tax.

14-164-337. Pledge of preexisting sales and use tax.

(a) In any municipality or county which has in effect the levy of a local sales and use tax, the legislative body may, by ordinance, pledge all or a specified portion of the existing tax to retire its bonds as provided in this subchapter.

(b) (1) No pledge of an existing local sales and use tax levy shall be effective unless the issuance of bonds has been approved by the voters of the municipality or county issuing the bonds at an election as provided in 14-164-328.

(2) (A) The ballot form in an election to issue bonds secured by the pledge of an existing local sales and use tax levy shall be limited to the question or questions concerning the proposed bonds and shall not resubmit the levy of the tax.

(B) The ballot shall contain a statement that the existing sales and use tax shall be pledged to the retirement of the bonds.

(c) (1) In any county which has in effect a county local sales and use tax, a municipality therein may, by ordinance, pledge all or any portion of such tax to which the municipality is entitled to receive to retire bonds of the municipality issued under this subchapter.

(2) As long as any bonds so authorized and issued are outstanding, the local sales and use tax shall continue to be levied and collected in such municipality until the bonds are retired, notwithstanding the repeal or abolishment of such countywide tax.

(d) (1) In any county which has in effect a county local sales and use tax, a municipality therein may, by ordinance, pledge all or a portion of its share of the county tax to retire bonds of the county issued under this subchapter.

(2) All such amounts pledged shall be used by the county as its funds to the extent necessary to pay debt service on such bonds and, if not so necessary, shall be transferred by or on behalf of the county to the municipality.

(e) In any municipality or county in which an existing local sales and use tax is pledged to secure the payment of bonds authorized by this subchapter, that portion of the tax pledged to secure the payment of bonds shall not be repealed, abolished, or reduced so long as any of such bonds are outstanding.

(f) (1) Any moneys collected which, as indicated by a certified copy of an ordinance of the municipality or county previously filed with the director and the Treasurer of State, are pledged, under the provisions of any act, to secure the retirement of bonds authorized by this subchapter, shall be transmitted by the director to the Treasurer of State.

(2) The Treasurer of State shall not deposit any such moneys into the State Treasury or into general revenues, but shall hold such moneys apart, in trust, and shall deposit such moneys as cash funds into the Local Sales and Use Tax Trust Fund established by this subchapter.

(3) The Treasurer of State shall transmit monthly to the treasurer of the municipality or county, as the case may be, or, in the alternative, to a bank or other depository designated by the municipality or county, the moneys of the municipality or county held in the Local Sales and Use Tax Trust Fund established by this subchapter, subject to the charges payable and retainage authorized by 26-74-201 -- 26-74-219, 26-74-221, 26-74-315 -- 26-74-317, 26-75-201 -- 26-75-221, 26-75-223, 26-75-317, and 26-75-318.

(4) (A) Upon receipt of a written statement signed by the trustee for the bondholders that the trustee has or will have set aside sufficient funds to pay when due at maturity or at redemption prior to maturity the principal of and interest on the bonds to which such tax has been pledged; or

(B) If no trustee is serving in such capacity, a written statement signed by the municipality or county pledging the tax or by the municipality or county issuing the bonds, or both, to the effect that the bonds to which the tax is pledged have been fully paid and are no longer outstanding, the Treasurer of State shall make payments directly to the treasurer of the municipality or county and the pledge of the tax shall cease.