Court Opinion

ID: 3258734
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:31:10.931561+00
Date Added: 2024-06-11T13:47:28.248594
License: Public Domain

The Honorable J.L. "Jim" Shaver State Representative P.O. Box 592 Wynne, Arkansas 72396-0592
Dear Representative Shaver:
This is in response to your request for an opinion on the following question:
  Can Cross County "levy a one cent sales and use tax under the provisions of A.C.A. § 26-73-113 [Adv. Code Serv. 1992], part of the proceeds of which would be used for the repayment of bonds issued for acquisition and construction and the remainder of which would be used for maintenance and operation of the following:
1) a county cultural center;
2) a county sports complex;
3) an industrial park;
4) county municipal fire stations; and
5) the county library.
It is my opinion that the answer to your question is generally "yes," as long as the bonds which would be repaid with the tax are issued under A.C.A. §§ 14-164-301—339.
Section 26-73-113, as amended by Act 40 of the First Extraordinary Session of 1992, authorizes cities and counties to levy either a one-fourth, one-half, three-fourths, or one percent sales and use tax. The section states that the proceeds of the tax may be used: 1) to finance the operation or maintenance of capital improvements, or a solid waste management system or part thereof or both; 2) to secure the repayment of bonds issued under §§ 14-164-301—339; 3) to acquire or construct capital improvements of a public nature for not more than twenty-four months; or 4) any or all of the above.
It appears therefore that the tax proceeds generated under A.C.A. § 26-73-113 can be used to secure the repayment of bonds, as your question suggests, as long as the bonds are issued under §§14-164-301—339 (§ 26-73-113(a)(2)(B)), and can be used as well to operate and maintain "capital improvements." A.C.A. §26-73-113(a)(2)(A).1 Subsection (a)(2)(D) authorizes expenditures for "any or all" of the authorized uses of the proceeds. Thus, the proceeds of the tax may go to fund more than one of the authorized uses set out above.
It is clear, however, that only a total of one percent sales and use tax is authorized between §§ 14-164-327 (Cum. Supp. 1991) and26-73-113. To the extent a city or county levies a fraction of one percent under A.C.A. § 26-73-113, it loses its authority to levy that fraction under § 14-164-327. The statute states that cities and counties may levy the tax "in lieu of using [their] authority to levy a sales and use tax solely to pay bonded debt under A.C.A. § 14-164-327. . . ." A.C.A. § 26-73-113 (a)(1). (Emphasis added.) The statute also provides that by levying the tax authorized at § 26-73-113, cities and counties "shall lose [their] authority to levy up to a one percent (1%) sales and use tax under § 14-164-327 solely to pay bonded debt only to theextent of the tax levied hereunder." A.C.A. § 26-73-113(a)(1). (Emphasis added).
Thus, if a city or county levies, for example, a one-fourth of one percent tax under A.C.A. § 26-73-113, it retains its authority to levy only a three-fourths percent tax to retire bonded debt under A.C.A. § 14-164-327.
It appears from the wording of your question, however, that the proposal you outline would levy only a total of one percent sales and use tax under these two provisions. It is therefore my opinion that the answer to your question, assuming there are no other relevant facts of which we are not aware, is "yes."
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana C. Wills.
Sincerely,
WINSTON BRYANT Attorney General
1 The statute, at § 26-73-113 (a)(2)(A), authorizes the tax proceeds to be used to finance the operation or maintenance of "capital improvements." This term is not defined by the section, but is defined at many other places in the Arkansas Code. See,e.g., A.C.A. § 14-164-303. Although the issue may depend to some extent upon factual considerations, it appears that the facilities you mention would generally fall under the definition of "capital improvements."