Stricken language would be deleted from and underlined language would be added to present law.
Act 127 of the Regular Session
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State of Arkansas As Engrossed: H1/31/23 1
94th General Assembly A Bill 2
Regular Session, 2023 HOUSE BILL 1031 3
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By: Representative L. Fite 5
By: Senator K. Hammer 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE ARKANSAS HIGHWAY REV ENUE 9
DISTRIBUTION LAW CON CERNING DISTRIBUTION S TO COUNTY 10
AID FUNDS AND MUNICI PAL AID FUNDS; AND F OR OTHER 11
PURPOSES. 12
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Subtitle 15
TO AMEND THE ARKANSAS HIGHWAY REVENUE 16
DISTRIBUTION LAW CONCERNING DISTRIBUTIONS 17
TO COUNTY AID FUNDS AND MUNICIPAL AID 18
FUNDS. 19
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 22
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SECTION 1. Arkansas Code § 27 -70-207(b) and (c), concerning 24
distributions to county and city funds, are amended to read as follows: 25
(b)(1)(A) With the exception of those revenues transferred pursuant to 26
Section 2 of the Highway Improvement Revenue Act of 2007, all All highway 27
revenues transferred to the County Aid Fund under this subchapter shall be 28
paid over by the Treasurer of State to the treasurers of the respective 29
counties of this state for credit to the county highway fund, there to be 30
used for transportation projects as deemed beneficial by the county to 31
include without limitation: 32
(i) The maintenance, construction, and 33
reconstruction of roads and bridges in the county highway system and for 34
other surface transportation; 35
(ii) Public transportation; or 36 As Engrossed: H1/31/23 HB1031
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(iii) Any other transportation system improvement or 1
service within the political subdivision, including without limitation those 2
projects defined as a transportation system under § 27 -76-103 regardless of 3
whether or not the political subdivision is a member of a regional mobility 4
authority. 5
(B) A county may also use these funds to construct and 6
maintain parking for county courthouses, county administration buildings, 7
county health units, and county parks and to construct and maint ain sidewalks 8
that serve county courthouses, county administration buildings, county health 9
units, county parks, public schools, and other publicly owned property. 10
(C) A county may use these funds to pay for local projects 11
eligible for funding under st ate programs of the Arkansas Department of 12
Transportation and the State Highway Commission and under federal programs of 13
the Federal Highway Administration and the Federal Transit Administration. 14
(D) Furthermore, the funds may be used to install and 15
maintain traffic signals where needed to preserve public health, safety, and 16
welfare. 17
(E) A county may provide these funds to a regional 18
mobility authority to match federal transportation funds for the financing of 19
surface transportation system improveme nts on state highways, county roads, 20
and city streets. 21
(2)(A) Funds disbursed to the County Aid Fund pursuant to 22
Section 2 of the Highway Improvement Revenue Act of 2007 may be expended by 23
the counties on any legitimate county purpose and are not limite d to the uses 24
set forth in subdivision (b)(1) of this section. 25
(B) Funds disbursed to the County Aid Fund pursuant to 26
Section 2 of the Highway Improvement Revenue Act of 2007 shall be distributed 27
to the various counties as are other funds contained in the County Aid Fund 28
pursuant to subdivision (b)(3) of this section. 29
(3)(2) The Treasurer of State shall on or before the tenth day 30
next following the last day of each calendar month make distribution of the 31
revenues on the following basis: 32
(A) Thirty-one percent (31%) of the amount according to 33
area, with each county to receive the proportion that its area bears to the 34
area of the state; 35
(B) Seventeen and one -half percent (17.5%) of the amount 36 As Engrossed: H1/31/23 HB1031
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according to the amount of state motor vehicle licens e fees collected in the 1
calendar year next preceding any distribution as certified to the Treasurer 2
of State by the Secretary of the Department of Finance and Administration, 3
with each county to receive the proportion that the total of fees collected 4
from the county bears to the total of fees collected in the state; 5
(C) Seventeen and one -half percent (17.5%) of the amount 6
according to population based upon the most recent federal decennial census, 7
with each county to receive the proportion that its popu lation bears to the 8
population of the state; 9
(D) Thirteen and one -half percent (13.5%) of the amount 10
according to rural population based upon the most recent federal decennial 11
census, with each county to receive the proportion that its rural population 12
bears to the rural population of the state; and 13
(E) Twenty and one-half percent (20.5%) of the amount 14
shall be divided equally among the seventy -five (75) counties. 15
(c)(1)(A) With the exception of those revenues transferred pursuant to 16
Section 2 of the Highway Improvement Revenue Act of 2007, all All highway 17
revenues transferred to the Municipal Aid Fund under this subchapter shall be 18
paid over by the Treasurer of State by direct deposit to the treasurers of 19
the respective cities of the first class, cities of the second class, and 20
incorporated towns f or credit to the street fund, there to be used for 21
transportation projects as deemed beneficial by the governing body of the 22
political subdivision to include without limitation: 23
(i) The maintenance, construction, and 24
reconstruction of streets that are not continuations of state highways and 25
for other surface transportation; 26
(ii) Public transportation; or 27
(iii) Any other transportation system improvement or 28
service within the political subdivision, including without limitation those 29
projects defined as a transportation system under § 27 -76-103, regardless of 30
whether or not the political subdivision is a member of a regional mobility 31
authority. 32
(B) A city may provide these funds to a regional mobility 33
authority to match federal transportation funds for the financing of surface 34
transportation system improvements on state highways, county roads, and city 35
streets. 36 As Engrossed: H1/31/23 HB1031
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(C) A city may use these funds to construct and maintain 1
parking for city administration buildings, city recreation buildings, and 2
city parks, and to construct and maintain sidewalks that serve city 3
administration buildings, city recreational buildings, city -owned parking 4
lots, city-owned parking decks, and city parks. 5
(2)(A) The Treasurer of State shall on or before the tenth day 6
next following the last day of each calendar month make distribution of the 7
funds on the basis of population according to the most recent federal census, 8
with the amount to be paid over to each city or incorporated town in the 9
proportion that its population bears to the total population of all cities 10
and towns. 11
(B) If a municipality incorporates during a year in which 12
a federal decennial census is conducted, then for purposes of this section 13
and until data from a federal decennial or spec ial census is made available 14
to the municipality, the population of the municipality shall be based on the 15
most recent federal decennial census as calculated by the Arkansas Geographic 16
Information Systems Office. 17
(3)(A)(i) As used in this subdivision (c )(3), "general revenue" 18
means any revenue deposited into a general fund account that is not: 19
(a) Restricted by the source of that revenue; 20
or 21
(b) Transferred from another municipal fund 22
account. 23
(ii) Beginning on July 28, 2021, if a cit y or 24
incorporated town has spent funds credited to the street fund in a manner 25
inconsistent with the purposes required by subdivision (c)(1) of this 26
section, the city or incorporated town shall repay the funds that were not 27
used in accordance with subdivis ion (c)(1) of this section to the street fund 28
from the city's or incorporated town's general revenue by the end of the 29
following fiscal year. 30
(B) A city or incorporated town is not eligible to receive 31
highway revenues under subdivision (c)(1) of this s ection until the city or 32
incorporated town: 33
(i) Repays the entirety of the funds owed to the 34
street fund, including any funds owed prior to July 28, 2021, as required 35
under subdivision (c)(3)(A) of this section; or 36 As Engrossed: H1/31/23 HB1031
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(ii) Passes an ordinance or a r esolution committing 1
to pay and pays ten percent (10%) of the city's or incorporated town's 2
general revenue to the street fund each year until the funds owed are repaid. 3
(C) However, if a city or incorporated town is unable to 4
repay the funds owed as r equired by subdivision (c)(3)(B) of this section, 5
the city or incorporated town may request the approval of the Legislative 6
Joint Auditing Committee to pass an ordinance or resolution committing to pay 7
a percentage less than ten percent (10%) of the city's or incorporated town's 8
general revenue to the street fund each year until the funds owed are repaid. 9
(4)(A) If the Legislative Joint Auditing Committee is presented 10
with a finding that a city or incorporated town spent funds credited to the 11
street fund in a manner inconsistent with the purposes specified in 12
subdivision (c)(1) of this section or that the city or incorporated town 13
failed to make a repayment owed under subdivision (c)(3)(B)(ii) or 14
subdivision (c)(3)(C) of this section, the Legislative Join t Auditing 15
Committee may provide notice of the finding to the: 16
(i) Treasurer of State; and 17
(ii) The city's or incorporated town's officials or 18
employees authorized to prevent or correct the inconsistent spending. 19
(B) Upon notice of a finding from the Legislative Joint 20
Auditing Committee under subdivision (c)(4)(A) of this section, the Treasurer 21
of State shall: 22
(i) Confirm with Arkansas Legislative Audit within 23
thirty (30) days of being notified by the Legislative Joint Auditing 24
Committee that a city or incorporated town spent funds credited to the street 25
fund in a manner inconsistent with the purposes required by subdivision 26
(c)(1) of this section or failed to make a repayment owed under subdivision 27
(c)(3)(B)(ii) or subdivision (c)(3)(C) o f this section; and 28
(ii) Withhold highway revenues under subdivision 29
(c)(1) of this section until the entirety of the funds owed are repaid by the 30
city or incorporated town to the street fund. 31
(5)(A) Funds disbursed to the Municipal Aid Fund pursua nt to 32
Section 2 of the Highway Improvement Revenue Act of 2007 may be expended by 33
the cities on any legitimate municipal purpose and are not limited to the 34
uses set forth in subdivision (c)(1) of this section. 35
(B) Funds disbursed to the Municipal Aid F und pursuant to 36 As Engrossed: H1/31/23 HB1031
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Section 2 of the Highway Improvement Revenue Act of 2007 shall be distributed 1
to the various cities as are other funds contained in the Municipal Aid Fund 2
pursuant to subdivision (c)(2) of this section. 3
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/s/L. Fite 5
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APPROVED: 2/24/23 8
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