2010 Arkansas Code
Title 14 - Local Government
Subtitle 10 - Economic Development And Tourism Generally
Chapter 164 - Industrial Development Bonds
Subchapter 7 - Exemptions From Ad Valorem Taxation
§ 14-164-704 - Sale of city or county property.

14-164-704. Sale of city or county property.

(a) (1) When any city or county enters into a lease of city or county property or enters into a contract for sale of city or county property to a private for-profit entity under this subchapter or any other provision of law or the Constitution of Arkansas for the purpose of securing and developing industry, the lease or contract for sale shall include an obligation that the lessee or purchaser make payments in lieu of property taxes in an amount as negotiated between the parties except the aggregate amount of the payments during the initial term of the lease or contract for sale shall be not less than thirty-five percent (35%) of the aggregate amount of ad valorem taxes that would be paid if the property were on the tax rolls, unless the Director of the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State approve a lesser amount.

(2) (A) The aggregate amount of ad valorem taxes that would be paid if the property were on the tax rolls during the initial term of the lease or contract for sale may be determined based on:

(i) The millage and assessment rates in effect at the time the obligation to make payments in lieu of property taxes is entered into;

(ii) The projected installed costs of the taxable real and personal property subject to or to be subject to the lease or contract for sale, which may be evidenced by an affidavit of a duly authorized officer of the private for-profit entity; and

(iii) Depreciation guidelines for personal property published by the Arkansas Assessement Coordination Department.

(B) The aggregate amount determined under subdivision (a)(2) of this section shall be adjusted based on the actual installed costs of the taxable real and personal property at the time the lease or contract for sale is entered into or the time of completion of the project subject to the lease or contract for sale, whichever is later.

(3) The obligation may be contained in a separate agreement at the option of the parties to the lease or contract for sale.

(b) Prior to a meeting of city or county officials where action might be taken regarding approval of in-lieu-of-tax payments, the city or county shall give at least ten (10) days' notice to the superintendent of each school district in which all or any part of the property that is subject to the lease or contract of sale is located, and to the Chief Fiscal Officer of the State as to the date, time, and place of the meeting.

(c) Subsections (a) and (b) of this section shall not apply to:

(1) Any agreement existing prior to July 1, 2001;

(2) Any agreement entered into on or after July 1, 2001, pursuant to a memorandum of intent or agreement to issue bonds authorized by any city or county before July 1, 2001;

(3) Any agreement entered into on or after July 1, 2001, related to a project covered by a financial incentive proposal from the Arkansas Economic Development Commission, or by resolution of the governing body of a city or a county designating the project by name for the purposes of this exemption, dated before July 1, 2001;

(4) Any reissue or refinancing of bonds that are subject to an existing in-lieu-of-tax agreement; and

(5) Any lease or contract for sale with a qualified manufacturer of steel as defined in 26-52-901 or in Act 541 of 2001 entered into before June 30, 2009.