Court Opinion

ID: 3264585
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:34:09.852465+00
Date Added: 2024-06-11T13:10:37.037059
License: Public Domain

The Honorable James Scott State Senator Route 1, Box 82-A Warren, AR  71671-9705
Dear Senator Scott:
This is in response to your request for an opinion on the following question concerning the proposed construction of a recreational lake in Bradley County:
   If we build [the lake] and we fund 75% of the cost of the project through the Arkansas Game and Fish Commission, utilizing the Dingle Johnson Funds, and the remaining 25% of the cost would be provided by Bradley County, utilizing a county-wide 1 cent sales tax to raise our 25% matching funds and the title to the property where the lake would be located excluding the dam site would be retained in Bradley County's name, would this project be considered legally as a capital improvement project for Bradley County, thereby allowing us to utilize the 1¢ sales tax for this purpose?
As noted previously in Opinion No. 89-321, issued to you on December 19, 1989, language in the relevant sales and use tax Code sections appears to envision the financing of capital improvements to be acquired by the county.  See A.C.A. 26-74-201, 26-74-203,26-74-301, 26-74-303.  Thus, the application of a 1% sales tax to a capital improvement that would be obtained by some entity other than the county could, in my opinion, form the basis for a legal challenge.  See Opinion No. 89-321.
Your current request suggests that the sales tax revenues would fund the County's acquisition of the lake.  Assuming that the county-wide sales tax is properly levied and collected, use of the tax for the acquisition or construction of the lake would appear to be proper.  Use of the tax revenues for the overall "project," including the dam site, could, however, be problematic based upon the reasoning in Opinion No. 89-321 if the county does not retain title.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.