Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 394 3
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By: Senators J. Bryant, Hester, Dees 5
By: Representatives McAlindon, B. McKenzie, R. Burkes, Underwood, R. Scott Richardson, McCollum, 6
John Carr, Duke, Torres 7
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For An Act To Be Entitled 9
AN ACT TO AMEND THE LAW CONCERNING COUNTY SALES AND 10
USE TAXES FOR CAPITAL IMPROVEMENTS; TO ALLOW A COUNTY 11
TO REFER TO THE VOTERS A CHANGE IN THE ALLOCATION OR 12
DISTRIBUTION OF REVENUES FROM A COUNTY SALES AND USE 13
TAX FOR CAPITAL IMPROVEMENTS; TO PROHIBIT A 14
MUNICIPALITY FROM PLEDGING REVENUES FROM A COUNTY 15
SALES AND USE TAX FOR CAPITAL IMPROVEMENTS TO REPAY 16
BONDS; AND FOR OTHER PURPOSES. 17
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Subtitle 20
TO AMEND THE LAW CONCERNING THE 21
ALLOCATION, DISTRIBUTION, AND USE OF 22
REVENUES DERIVED FROM A COUNTY SALES AND 23
USE TAXES FOR CAPITAL IMPROVEMENTS. 24
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 26
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SECTION 1. Arkansas Code § 14 -164-337(a), concerning the pledge of 28
preexisting sales and use tax under the Local Government Bond Act of 1985, is 29
amended to read as follows: 30
(a) In Except as provided in § 26 -74-214(c)(1)(B), in any municipality 31
or county which has in effect the levy of a local sales and use tax, the 32
legislative body may, by ordinance, pledge all or a specified portion of the 33
existing tax to retire its bonds as provided in this subchapter. 34
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SECTION 2. Arkansas Code § 26 -74-208(c), concerning the form of the 36 SB394
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ballot for a county sales and use tax for capital improvements, is amended to 1
read as follows: 2
(c)(1)(A) The ballot may also indicate designated uses of the revenues 3
derived from the sales and use tax or the allocation or distribution of 4
revenues, or both, and if the tax is approved, the proceeds shall only be 5
used for the designated purposes and distributed in the manner set forth in 6
the ballot. 7
(B) The county's share of the proceeds may be used for 8
other designated purposes if the electors approve a change in the designated 9
use of the revenues by vote under this subsection. 10
(2)(A) The quorum court of a county may refer to the vote of the 11
people a change in the indicated use of revenues derived from a sales and use 12
tax levied by the county that was approved by the voters , but a change shall 13
not alter the allocation of tax collections among the county and 14
municipalities within the county or a change in the allocation or 15
distribution of revenues among the county and the municipalities within the 16
county. 17
(B) If the quorum court of a county refers to the vote of 18
the people a change in the indicated use of revenues derived from a sales and 19
use tax or a change in the allocation of tax collections among the county and 20
the municipalities within the county, or both , the quorum court shall: 21
(i) Notify the county board of election 22
commissioners that the measure has been referred to the vote of the people; 23
and 24
(ii) Submit a copy of the ballot title to the county 25
board of election commissioners. 26
(C)(i) An election to change the indicated use of revenues 27
derived from a sales and use tax or to change the allocation or distribution 28
of revenues among the county and the municipalities within the county, or 29
both, shall be conducted in the manner provided by law for all other county 30
elections. 31
(ii) The results of an election under this 32
subsection shall be certified, proclaimed, and subject to challenge under the 33
procedures stated in § 26 -74-209. 34
(3)(A) If the voters approve a change in the indicated use of 35
revenues derived from a sales and use tax, the change in the indicated use 36 SB394
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shall apply to all revenues collected on the first day of the calendar month 1
following the expiration of the thirty -day challenge period under § 26 -74-2
209. 3
(B) If the voters approve a change in the allocation or 4
distribution of revenues among the county and the municipalities within the 5
county, the county shall notify the Treasurer of State of the new allocation 6
or distribution of revenues among the county and the municipalities within 7
the county that was approved by the voters after publication of the 8
proclamation has occurred and at least ninety (90) days before the new 9
allocation or distribution becomes effective. 10
(4)(A) If the voters do not approve a change in the indicated 11
use of revenues derived from a sales and use tax, the tax shall continue to 12
be collected and the revenues derived from the tax shall continue to be used 13
for the purposes indicated in the ballot for the tax. 14
(B) If the voters do not approve a change in the 15
allocation or distribution of revenues among the county and the 16
municipalities within the county: 17
(i) The tax shall continue to be collected; and 18
(ii) There shall be no change in the allocation or 19
distribution of the revenues derived from the tax. 20
(C) An election to change the indicated use of revenues 21
derived from a sales and use tax or to change the allocation or distribution 22
of revenues among the county and municipalities, or both, shall not 23
constitute an election on the levy of the tax. 24
(5) Notwithstanding anything in this subchapter to the contrary, 25
in any county that a local sales and use tax has been adopted in the manner 26
provided for in this subchapter and a portion of the revenues derived from 27
the tax has been pledged to secure lease rentals or bonds, the purpose for 28
the tax may not be changed to reduce the pledge in favor of the lease or 29
bonds. 30
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SECTION 3. Arkansas Code § 26 -74-214(c)(1), concerning the disposition 32
of funds received from a county sales and use tax for capital improvements, 33
is amended to read as follows: 34
(c)(1)(A) Funds Except as provided in subdivision (c)(1)(B) of this 35
section, funds received by the counties and municipalities pursuant to the 36 SB394
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provisions of this subchapter may be used by the counties and municipalities 1
for any purpose for which the county general funds or the city general funds 2
may be used, subject to designations set forth in the ballot, if any. 3
(B) A municipality shall not pledge revenues from a tax 4
levied under this subchapter for the repayment of bonds. 5
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