(a) Since the Arkansas Constitution prohibits the issuance by a municipal corporation of any interest-bearing evidence of indebtedness for the purpose mentioned in this subchapter, no evidence of indebtedness bearing interest is authorized by this subchapter.(b)(1) Since the Arkansas Constitution further provides that municipal corporation warrants may be used in payment of municipal taxes, the assignment of taxes provided for in this subchapter shall be without prejudice to the rights of warrant holders to use municipal warrants in payment of municipal taxes.(2)(A) Unless this provision is held unconstitutional by the courts, the written assignment of taxes provided for in this subchapter may stipulate that the city will use the funds so borrowed for operating expenses and that no warrant will be thereafter issued by the city in excess of an aggregate amount capable of being paid out of the funds so borrowed and out of revenues of the city arising from some other source than the general municipal property tax until the borrowed moneys secured by the assignment have been repaid in full, to the end that, after making the assignment, no new city warrants capable of being used in eneral municipal property tax until the borrowed moneys secured by the assignment have been repaid in full, to the end that, after making the assignment, no new city warrants capable of being used in payment of the municipal property tax shall come into existence until the indebtedness has been paid.(B) The city may contract as to right of priority or payment when more than one (1) assignment of the taxes is made.Acts 1931, No. 233, § 3; Pope's Dig., § 9822; A.S.A. 1947, § 19-4408.
Arkansas Legal Code