Arkansas Code § 26-78-116 - Obligation of Bonds -- Payment

(a) Revenue bonds issued under this chapter shall not be general obligations of the county or of the municipality but shall be special obligations, and in no event shall the revenue bonds issued under this chapter constitute an indebtedness of the county or the municipality within the meaning of any constitutional or statutory limitation. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this chapter and that it does not constitute an indebtedness of the county or municipality within any constitutional or statutory limitation.

(b) The principal of and interest on the revenue bonds shall be payable from the net revenues derived from collections of the County and Municipality Vehicle Tax. Net revenues are defined as the revenues which are available to the county treasurer and the municipal treasurer after payment of the cost of duplicate receipts, windshield stickers, or other types of identification attached to vehicles as required under this chapter, and payment of collector's commissions, all as specified in this chapter. In this regard, provision may be made for the depositing of the net revenues into a special trust fund to be used for no other purpose than that specified in the authorizing order of the county court or the authorizing ordinance of the municipality.

(c) Provision may be made in the authorizing order or the authorizing ordinance, or in any indenture provided for therein, for the pledging of all or a specified portion of the proceeds of the net revenues to a particular bond issue, with or without provision for subsequent issues payable from the net revenues on such terms and pursuant to such conditions as may be specified, or a specified portion of the net revenues may be set aside for a particular bond issue, with that bond issue having no call or pledge on the remaining portion of the net revenues which shall then be available for the purposes authorized by this chapter or for the pledging to subsequent bond issues.

(d) (1) Once any bonds are issued by a county or by a municipality, then the tax, the net revenues of which are pledged to the bonds, shall constitute and be deemed to be a continuing annual tax which shall not and cannot be made to terminate and which must be collected each year thereafter, without the necessity for any further or additional action by the levying body, for as long as shall be necessary to pay in full the entire principal of and interest on all revenue bonds issued under this chapter to the payment of which the revenues are pledged.

(2) In this regard, however, if a municipality has issued bonds and pledged thereto the revenues received by it under ยง 26-78-108(a)(1), the vehicle tax levied by the county shall be a continuing annual tax only in the municipalities that have pledged the revenues to bonds to the extent of the pledge. If the county quorum court does not levy the county tax for any year thereafter, the continuing annual tax applicable to a municipality shall by that fact become a municipal tax to be collected and handled under the applicable provisions of this chapter as though levied by the municipality under this chapter.

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Last modified: November 15, 2016