The Arkanas Senate Committee on State Agencies and Governmental Affairs last week endorsed a bill that would allow cities and counties to issue bonds for development districts, with the debt supported by state sales tax revenue generated within the districts.
The proposal was sent to a joint House-Senate committee that will select the three constitutional amendments the General Assembly can put on the November 2012 general election ballot.
Lawmakers have filed 25 proposed amendments.
Sen. Jake Files, R-Fort Smith, said Senate Joint Resolution 5 would require approval from an appropriate state agency before the local development bonds could be issued.
Files said the bonds would allow Arkansas to compete with other states that allow sales-tax bond financing for local economic development efforts. He said the so-called STAR bonds could finance the infrastructure needed by large retail developments.
Files’ proposal would also allow city and county governments, with voter approval, to issue sales-tax bonds to cover the unfunded liabilities of local fire and police pension plans.