Justice of the Peace FAQs
On what property can a county levy taxes? Is there a maximum amount of tax that a county can levy? Do the registered voters of a county have to approve the tax levy? Is any property exempt from property taxes?
According to Article 16, Section 5 of the Arkansas Constitution, both real and personal property is taxable. Section 17 of Arkansas Constitution Amendment 59 repealed the original Article 16, Section 5 and substituted the current wording which, in part, says: “all real and tangible personal property subject to taxation shall be taxed according to its value, that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State.” Amendment 71 of the Arkansas Constitution, adopted at the 1992 general election, delineates what personal property is exempt from ad valorem taxes and what personal property is taxable.
Counties in Arkansas can levy up to 21 mills of property tax. The maximum rates that can be levied on real and personal property by the county for county use are:
5 Mills – County general government [Arkansas Constitution, Article 16, § 9 and A.C.A. § 26-25-101]. Quorum Court can levy without a vote of the electorate.
5 Mills – County bonded indebtedness [Arkansas Constitution, Amendment 62]. Requires a vote of the electorate.
5 Mills – County Library maintenance and operation [Amendment 38 as amended by Amendments 72 and 89]. Requires a vote of the electorate to lower, raise or abolish the millage.
3 Mills – County Library capital improvements and construction – [Amendment 38 as amended by Amendments 72 and 89]. Requires a vote of the electorate to lower, raise, or abolish the millage.
3 Mills – County Road – [Amendment 61 and § 26-79-101]. Quorum Court can levy without a vote of the electorate.
Note 1: Amendment 61 was approved at the general election of 1982. Prior to the enactment of Amendment 61 the road millage was governed by Amendment 3 which required that the road millage be on the ballot at each general election in each county.
Note 2: 1 mill = a tenth of 1%
The county quorum court is required to levy ad valorem tax rates at its regular meeting in November or December of each year for collection the following year [A.C.A. 14-14-904(b)(1)(A)(i)]. The quorum court must levy not only the county property taxes but municipal taxes and school taxes. The Director of the Assessment Coordination Department may authorize an extension of up to 60 days of the date for levy of taxes if there is good cause shown resulting from reappraisal or rollback of taxes. The application for extension must be filed by the County Judge and County Clerk.
The electorate does not have to approve the levy of general and road taxes for the county. The county is given the authority to levy up to 5 mills for general purposes in Article 16, Section 9 of the Arkansas Constitution – “No county shall levy a tax to exceed one-half of one per cent (5 mills) for all purposes…..” [Also see § 26-25-101]. Amendment 61 to the state constitution says, “County quorum courts may annually levy a county road tax not to exceed three (3) mills on the dollar on all taxable real and personal property within their respective counties.....” Amendment 61 repealed Arkansas Constitution, Amendment 3, which also allowed a maximum 3 mill road tax, but under Amendment 3 the tax had to appear on the ballot every general election. Every November the quorum court has the authority to levy a county general tax up to 5 mills and a road tax up to 3 mills.
A county is also authorized to levy a county library tax by Amendment 38 of the Arkansas Constitution (amended by Amendment 72 and incorporated into Amendment 38 by amending Sections 1 and 3 and adding Section 5). However, this tax must be voted on by the electors of the county and the tax rate cannot exceed five (5) mills on the dollar for maintenance and operation of the library (Amendment 38, Section 1). The maintenance and operation of the library is defined in A.C.A. 13-2-405(2). Once the rate is established by the electorate, the quorum court will levy the established rate each year until there is another election to change the rate. Amendment 38, Section 3 of the state constitution requires an election to raise, reduce or abolish the library tax.
Section 5 of Amendment 38 (added by Amendment 72) provides for an election for a special library tax, in addition to the maintenance and operation tax, to pay bonded indebtedness to finance capital improvements to or construction of a county library or county library service or system. Upon retirement of the bonded indebtedness, any surplus tax collections, which may have accumulated, shall be transferred to the general funds of the county, and shall be used for maintenance of the county library.
County government is also allowed to levy 5 general mills for bonded indebtedness in accordance with Amendment 62 of the Arkansas Constitution. However, since the 1980’s most bonded indebtedness of counties has been funded with a dedicated sales tax rather than a tax levy on real and personal property.
Property tax is a very important source of revenue for local governments and is protected by government leaders. The Arkansas Constitution, Article 16, §5 provides an exemption from taxation on only a few types of property, including:
- (1) public property used exclusively for public purposes;
- (2) churches used as such;
- (3) cemeteries used exclusively as such;
- (4) school buildings and apparatus;
- (5) libraries and grounds used exclusively for school purposes; and
- (6) buildings, grounds & materials used exclusively for public charity.
Article 16, § 6 says, “All laws exempting property from taxation, other than as provided in this Constitution shall be void.”
Is it correct that a county can only appropriate 90% of the anticipated revenues of the county each year – and, if so, why? What happens to the 10% of the revenue that is not appropriated?
Counties of Arkansas have operated under the “90% Rule” since 1879 as outlined in Arkansas Code Annotated § 14-20-103. A few exceptions to the 90% limitation have been adopted over the years.
The crux of § 14-20-103 states, “the county quorum court shall specify the amount of appropriations for each purpose in dollars and cents,…..the total amount of appropriations for all county purposes for any one (1) year shall not exceed ninety percent (90%) of the anticipated revenues for that year…..”. The few exceptions to the 90% rule that have been added to the code over the years are:
- A county can appropriate 100% of a federal or state grant. However, a county must be able to demonstrate that the state or federal agency issuing the funding characterized the revenues as a grant.
- Any county that is declared a disaster area by the Governor or the U.S. government may appropriate in excess of the 90% anticipated revenues – only as long as the amount in excess of 90% is used for “street cleanup and repair; collection, transportation and disposal of debris; repair or replacement of county facilities and equipment; and other projects or costs directly related to or resulting from the natural disaster.”
- Any county that has a dedicated sales tax – one that is dedicated by ballot title – may appropriate up to 100% of that dedicated sales tax. [This exception does not apply to dedicated revenues that have been pledged for bonds; or general sales and use tax revenues.]
- A county quorum court that deems it necessary may appropriate for any one (1) year in excess of 90% of the commissions and tax revenues anticipated for that year for the general fund operation of the offices of assessor, collector, and treasurer.
- A county quorum court may appropriate up to 100% of anticipated revenues in the form of “federal financial assistance” defined as a transfer from a federal agency to a nonfederal entity as a tool of the United States Government to serve public purposes as defined by the United States Congress. Federal financial assistance could be a direct appropriation and deposit to the county or pass-through assistance from the State of Arkansas.
- A county quorum court may appropriate up to 100% of any reimbursement made to the county. A reimbursement is defined as a refund to the county of all or part of a payment made by the county.
In accordance with AG Opinion No. 1986-51, carryover/carryforward balances are subject to the 90% Rule contained in § 14-20-103. It is an old opinion but it has never been refuted by a later AG opinion or turned over in a court of law.
The reasoning behind the original law (and the exceptions are not a part of the original law) is at least two-fold: (1) the projected revenues are just that – projected – a calculated estimate based on past and present financial data and trends. The 90% rule allows for some margin of error; and (2) a large percentage of county government revenue is received in the final half of the year. Using the 90% rule allows for a carry-over cash balance which provides cash flow in the first part of the year when actual (current year) revenue received is less.
The “10% set-aside” is not set-aside forever. It does get used. For most counties, the carry-over cash balance of any account becomes a part of the projected revenues for the following year. The carry-over cash balance includes the 10% set-aside, revenues in excess of projections, and revenues remaining from unspent appropriations. Of course, the ideal operation would not even depend on the 10% set-aside for budgeting and actually set those amounts aside as a “reserve” for emergencies and moved into the budget by appropriation when needed.
A.C.A. § 14-20-103 is a law that has worked very well for county government since 1879. The law has been modified a few times, allowing for the exceptions to the rule. But, when used properly this law has allowed county government to operate responsibly and with financial integrity.
Can a Justice of the Peace be paid a monthly salary for serving the county as a district official? In addition to serving as a Justice of the Peace, can a Justice be paid for serving as an employee of the county or for any other service performed for the county?
Justices of the Peace cannot be paid a per month salary. Arkansas law § 14-14-1205 requires that the compensation of justices of the peace be per diem; as does Amendment 55, § 5 of the Arkansas Constitution. The term per diem literally means “by the day” [Latin]. In the case of per diem compensation for justices of the peace it means “a monetary daily allowance or a daily fee” [Black’s Law Dictionary and § 14-14-1205(a)(2)(A)] for attending a meeting.
The law specifically says, “The per diem compensation for justices of the peace attending any official, regular, special, or committee meeting of a quorum court shall be fixed by ordinance in each county [Reference: § 14-14-1205(a)(1)(A)]. The minimum and maximum amounts of per diem allowed justices are set forth in § 14-14-1205(B)(i)(ii)(iii). The minimum per diem for a regular meeting is $125. There is no established minimum for special meetings or committee meetings. Special meetings and committee meetings could technically be set at “zero”.
The maximum amounts of per diem compensation per calendar year are set according to the size of the county. The maximum per diem allowed for a justice of the peace is adjusted upward by 3% each year as a cost of living adjustment. The minimum per diem of $125 for a regular meeting is not adjusted.
Until a revision of the law in the late 90s a justice of the peace had to attend the meeting – whether it was a regular, special or committee meeting – in order to receive the per diem compensation. That is still the case except for one exception. A.C.A. § 14-14-1205(a)(2)(B) [added by Act 749 of 1999] allows a justice of the peace to “receive per diem compensation for one (1) meeting per year for which the member is absent due to an emergency or for personal reasons.” Justices of the Peace are not to be paid for more than one missed meeting per year.
In addition to the per diem compensation for attending meetings of the quorum court or a committee thereof a justice of the peace may receive expense reimbursement or expense allowances provided members of the quorum court through the auspices of § 14-14-1203(a)(b)(c). Also, counties are allowed to provide medical insurance coverage for members of the quorum court. The allowance of medical insurance coverage became legal with the passage of Act 363 of 1997 which added (a)(3) to § 14-14-1205.
A justice of the peace cannot be paid as a county employee. A.C.A. § 14-14-1205(c) states, “No justice of the peace shall receive compensation as a county employee or deputy, nor shall any justice receive compensation or expenses from funds appropriated by the quorum court for any services performed within the county, other than as provided by this subchapter.” This statute would then prohibit a quorum court member from receiving compensation as a county employee. Dual service would thus be prohibited - unless it was purely volunteer service by the quorum court member or, in other words – an employee without pay. And even then, with some county positions you would run into problems with the common law doctrine of incompatibility or a conflict of interest for “incompatibility” purposes.*
*Note: There are at least three good Attorney General Opinions on this matter. They are AG Opinion Numbers 1992-110; 1996-077; and 1997-143.
What does Arkansas law say about the establishment and use of the County Clerk’s Cost Fund?
The County Clerk’s Cost Fund, established by Act 1765 of 2003, has not been the topic of as much discussion as other cost funds or automation funds – because as a general rule the County Clerk’s office does not generate as much revenue. No Attorney General Opinions have been issued concerning the County Clerk Cost Fund – and there have been no court cases involving this fund as of late 2022.
Here is what the law says concerning the County Clerk’s Cost Fund. Fees collected by the County Clerk pursuant to §§§ 21-6-413, 21-6-415 and 16-20-407 are to be paid into the county treasury to the credit of the “county clerk’s cost fund”. In strict accordance with the law 100% of these fees are to be credited to the fund – even though only 35% of the fees are restricted and considered “special revenues”.
Many counties probably credit 35% of the fees to the County Clerk’s Cost Fund and 65% of the fees to County General. To be in full compliance with the law 100% of the fees should be credited to the County Clerk’s Cost Fund with 65% then transferred to County General as an appropriated transfer or the 65% can actually be appropriated and expended from the County Clerk’s Cost Fund for “any legitimate county purpose.”
A.C.A. § 21-6-413(e)(1)(A) says that the county clerk fees “shall be paid into the county treasury to the credit of the fund to be known as the county clerk’s cost fund.” The law goes on to say in subsection (e)(1)(B) that “with the exception of those funds referred to in subdivision (e)(2) of this section, all funds deposited into the county clerk’s cost fund are general revenues of the county and may be used for any legitimate county purpose.”
The funds referred to in subdivision (e)(2) are the 35% “special revenue” funds. These funds, in accordance with § 21-6-413(e)(2)(A)(B) “shall be used to purchase, maintain, and operate an automated records system. The acquisition and update of software for the automated records system shall be a permitted use of these funds.”
Normally “special revenues” or “restricted funds” are just that – they can be used only for the purposes set out in law…..unless there is an exception laid out in the law. In this case the exception is espoused in § 21-6-413(e)(2)(C) which says, “Funds set aside for automation may be allowed to accumulate from year to year or at the discretion of the clerk may be transferred to the county general fund by a budgeted appropriated transfer.
Special Notes concerning the County Clerk’s Cost Fund:
- In those counties having combined offices of county clerk and circuit clerk/recorder or in those counties having combined offices of county clerk and recorder, the clerk must decide to utilize the county clerk’s cost fund as authorized by § 21-6-413 or the county recorder’s cost fund as established by § 21-6-306.
- The clerk’s decision must be made in writing and filed in the office of the circuit clerk.
- The clerk is not allowed to use both funds – except for the revenue generated under § 16-20-407(b). [The $2.00 kept locally from a $13.00 additional marriage license fee.]
- In the case of a dual clerk who has chosen the County Recorder’s Cost Fund as their “automation fund” of choice – he or she will still have a County Clerk’s Cost Fund specifically and only for the $2.00 they retain from the $13.00 additional marriage license fee levied under § 16-20-407. This money (the $2.00 retained from the $13.00 additional marriage license fee) MUST be appropriated and expended exclusively for the operation of the office of county clerk [§ 16-20-407(b)(1)].
What is the proper procedure for the establishment and use of the County Collector’s Automation Fund?
The Collector’s Automation Fund is funded with a portion of the collector’s commission. In accordance with Arkansas Code Annotated § 21-6-305(c)(2)(A), “The county collector may set aside up to ten percent (10%) of the gross commissions collected annually to be credited to the county collector’s automation fund”.
Because the law concerning the establishment of a County Collector’s Automation Fund is permissive in nature – the collector may choose whether or not to establish the fund and whether or not to keep funding it. If the collector decides to establish the fund, any percentage of annual gross commissions may be set aside in the County Collector’s Automation Fund – up to a maximum of 10%. And, that percentage can change annually at the call of the collector.
The revenue credited to the Collector’s Automation Fund is not subject to the excess commission rule and may accumulate from year to year [Subdivisions (c)(3) and (d)]. The funds are to be appropriated by the quorum court at the direction of the collector for the uses designated in § 21-6-305(c)(2)(A)(i)(ii)(iii)(B).
The original uses of the fund were to “purchase, maintain, and operate an automated record-keeping system.” The acquisition and update of software for the automated accounting and record-keeping system was a permitted use of the original law for this automation fund.
Like other county automation and cost funds, the uses of the County Collector’s Automation Fund were liberalized in 2003. The Arkansas Legislature through Act 847 of 2003 added the terms “to operate the office of county collector” and “for administrative costs” to § 21-6-305. The new language of this law is very broad in nature. Black’s Law Dictionary defines “administrative expenses” or costs as “overhead” which would cover a multitude of expenditures. The language “to operate the office of the county collector” is even broader terminology. No doubt the real focus of the fund should still be “computerization” or “automation” of the collector’s office as the moniker of the fund would indicate. But, with the 2003 amendment to the law, the fund can now be spent on virtually any legal expenditure of the collector’s office [AG Opinion No. 2009-192].
Unlike other “automation funds” or “cost funds” where the officials have the discretion to transfer to the county general fund any moneys they deem excess and not needed for the intended purpose or purposes of the Automation Fund or Cost Fund – that is NOT so with the Collector’s Automation Fund. Any use of the money in the Collector’s Automation Fund, since it is collector commission, taken from local tax entities, must be used solely for the expenses of the County Collector’s office. This logic is based on Attorney General Opinion No. 78-112 which cites several court cases and constitutional law, including Article 16, Section 11 – “no moneys arising from a tax levied for any purpose shall be used for any other purpose.”
Is it a requirement of law for a county to fund a county jail operation and what are some of the main sources of revenue for county jail operations?
Arkansas Code Annotated § 12-41-502 says, “The county sheriff of each county in this state shall have the custody, rule, and charge of the jail within his or her county and all prisoners committed in his or her county,…..”. Also, § 14-14-802(a)(2) requires, “A county government, acting through the county quorum court, shall provide, through ordinance, for……..law enforcement protection services and the custody of persons accused or convicted of crimes”. There are other state laws and court case decisions that indicate that a county government should not only have a county jail, but should properly fund the jail operation.
County jail operations are one of the largest financial burdens on county governments in Arkansas – but, there are several revenue sources for the operation of a county jail that can be secured. The two largest and most common revenue sources are a dedicated sales tax (must be approved by a vote of the electorate) and general funds of the county. Other sources of jail revenue include housing fees for housing prisoners of other government jurisdictions, including state prisoners and 309’s and contracts for housing federal prisoners; and pay-for-stay fees.
The sheriff must also allocate a percentage, up to 75%, of the commissions from prisoner telephone services and profits from inmate commissary services for the maintenance and operation of the county jail in accordance with § 12-41-105(b)(2). These revenues are credited to the Sheriff’s Communications Facility and Equipment Fund – but some percentage [up to 75%] must be allocated to jail operations.
Two other sources of revenue for jail operations are the $40 booking and administrations fee and the local fine that can be levied by the quorum court to help defray the cost of incarcerating prisoners.
Let’s take a closer look at those last two sources of jail revenue mentioned and the laws that regulate them –
Booking fee - Act 117 of 2007 amended § 12-41-505 [Expense and support of the jail] to add a booking and administration fee of $20 to anyone convicted of a felony or a Class A misdemeanor. The booking fee was increased to $40 by Act 372 of 2019. The fee is assessed in one of two ways. It is assessed upon the conviction of a person and included in the judgment entered by the court – or if the court suspends imposition of a sentence on the person or places the person on probation and does not enter a judgment of conviction, the court is to impose the booking and administration fee as a cost.
Disposition of the booking fee is addressed in § 12-41-505(b)(3). Ninety percent (90%) of the booking fee is to be used exclusively for the maintenance, operation, and capital expenditures of a county jail or regional detention center or for certificate pay for law enforcement and jailer personnel. The 90% funding should be credited to a fund called the County Detention Facility Fund [Fund #3018] or if the county already has a special revenue fund for jail operations the booking fee may be credited to that fund as one of that fund’s revenue sources. A.C.A. § 12-41-505 simply says that the funds “shall be credited to a special revenue fund and used for the maintenance, operation, capital expenditures of a county jail…..”.
The remaining 10% of the booking fee is to be credited to the County Sheriff’s Office Fund as described in § 12-41-105 and then transferred by check on a monthly basis to the Treasurer of State for the Law Enforcement Training Fund. The check is to be remitted using a uniform remittance form provided by the Treasurer of State.
Local Jail Fine - Act 209 of 2009 amended § 16-17-129 so that a city and/or county could, by ordinance, levy an additional fine not to exceed $20 to be collected from defendants in District Court to be used to defray jail expenses.
A.C.A. § 16-17-129, as amended, reads in part:
(a)(1)(A) In addition to all fines now or as may hereafter be provided by law, the governing body of each town or city in which a district court is located may by ordinance levy and collect an additional fine not to exceed twenty dollars ($20.00) from each defendant upon each conviction, each plea of guilty or nolo contendere, or each bond forfeiture in all cases in the first class of accounting records as described in § 16-17-707.
(b)(1) In addition to all fines now or as may hereafter be provided by law, the quorum court of each county may by ordinance levy an additional fine not to exceed twenty dollars ($20.00) to be collected from each defendant upon each conviction, each plea of guilty or nolo contendere, or each bond forfeiture in all cases in the first and second class of accounting records as described in § 16-17-707. A county ordinance enacted under this subdivision (b)(1) applies to all district courts in the county.
As a result of this amended state law, cities may collect up to $20.00 in fine money on accounting one records, and counties may collect up to $20.00 in fine money on accounting one and two records. Accounting one records are “city cases” and accounting two records are “county cases”. Counties should assess this fine in district court on both city and county cases. However, it can only be assessed by the passage of an ordinance to levy the fine. If both the municipality and the county have an ordinance levying the additional $20.00 fine – the defendant in a municipal case would pay an additional $40 fine dedicated to the uses of this fine as outlined in the law.
The revenue collected by the assessment of this fine can be used for: (1) the construction, maintenance, and operation of the city, county, or regional jail; (2) deferring the costs of incarcerating county prisoners held by a county, a city, or any entity; (3) the transportation and incarceration of city or county prisoners; (4) the purchase and maintenance of equipment for the city, county, or regional jail; and (5) training, salaries, and certificate pay for jailers and deputy sheriff’s. The only exception to these uses is that sums collected from this fine on “city cases” cannot be used for training, salaries or certificate pay for deputy sheriffs.
As an additional note, this additional fine allowed under § 16-17-129 to be used to help defray jail expenses applies also to a seatbelt conviction in accordance with § 27-37-706. However, a seatbelt fine cannot exceed $45.00 - $25.00 for not wearing a seatbelt and the $20.00 assessed under a local ordinance pursuant to § 16-17-129 to help defray the cost of operating a jail.
Real property reappraisals are required to be conducted on a cyclical basis by county governments in Arkansas. What is the history of these reappraisals and how are the reappraisals paid for under current law?
The beginning of ad valorem taxation in Arkansas starts with the Arkansas Constitution of 1874. Article 16, Section 5 of the Constitution, as amended, provides that: “All real and tangible personal property subject to taxation shall be taxed according to its value, that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State.”
Laws on property taxation in Arkansas have been in constant change throughout the years. Because of a court case in the late 1970’s that ruled that ad valorem taxation in Arkansas was not “equal and uniform throughout the State” the court ordered reassessment of all real estate in Arkansas. Amendment 59 to the Constitution was passed by the electorate in 1980 due to the court-ordered reassessment to keep real property taxes from rising exorbitantly. Act 848 of 1981 [§ 26-26-401 et. seq.] was adopted by the Arkansas legislature as the enabling legislation for Amendment 59.
Every county in the State of Arkansas is now responsible for a cyclical county-wide reappraisal. Each county is required to appraise all market value real estate normally assessed by the county assessor at its full and fair market value in accordance with Arkansas Code Annotated 26-26-1902. Depending on the real property value growth – a county is either on a 3 year or a 5 year cycle for a complete reappraisal of real property.
The reappraisal is paid for from the Arkansas Real Property Reappraisal Fund – established by Act 1185 of 1999 and codified as§ 26-26-1907. The proceeds of the fund are used to pay counties and professional reappraisal companies for the reappraisal of real property in lieu of real property reappraisal funding by the local taxing units in each county of the state.
In reality the tax entities are still paying for nearly all of the reappraisal since the funding source of $14,250,000 of the cost is withheld from state funds that would otherwise flow to schools, counties and cities. The State Treasurer withholds 76% of the amount from the Department of Education Public School Fund Account; 16% of the amount from the County Aid Fund; and 8% of the amount from the Municipal Aid Fund and credits the amounts to the Arkansas Real Property Reappraisal Fund [Part of the Arkansas Assessment Coordination Department budget act each year]. The other $1.5 million of the annual appropriation of $15,750,000 for Real Property Reappraisal comes from the State of Arkansas Miscellaneous Agencies Fund.
Funding to any county for property reappraisal is for actual appraisal cost, up to a maximum of $7 per parcel, per year. Counties must use other taxing unit sources of revenue to provide for the cost of real property reappraisals if the cost exceeds $7 per parcel.
There is nothing in the law to prohibit a county from charging each tax entity their proportionate share of the cost exceeding $7 per parcel on a monthly basis in order to keep the County Property Reappraisal Fund from running a negative balance. There is no need for the county to suffer the burden of paying the excess cost of reappraisal until the “final tax settlement” is made in December. Charge each entity their share on a monthly basis.
What sources of revenue are produced by the Sheriff and identify any Special Revenue Funds that are used for the Sheriff’s operation and how the revenue is generated for these “special revenue funds”?
The County Sheriff’s office budget is probably the largest office budget of the county constitutional officers. Although the Sheriff’s office has the ability to generate quite a bit of revenue it will not be enough to cover the cost of running the office in the vast majority of counties.
The County Sheriff may be the county official designated in your county by the quorum court to collect fines [§ 16-13-709 Responsibility for collection]. Of course, many circuit and district court fines remain at the local level and are remitted to the general fund.
The County Sheriff has several “Special Revenue” funds – such as the Communications Facility and Equipment Fund [§ 21-6-307]; the Boating Safety Enforcement Fund or Emergency Rescue Fund [§ 27-101-111]; the Drug Enforcement Fund [§ 14-21-201 through 14-21-203]; the Drug Control Fund [§ 5-64-505]; and possibly others that may have been established by county ordinance.
In addition to the special revenue funds mentioned, there is also a fund called the County Sheriff’s Office Fund as established by § 12-41-105. The county sheriff’s office fund is an agency fund, defined as a fund used to account for funds held by the county treasurer as an agent for a governmental unit until transferred by check or county court order to the county sheriff or other governmental unit for the intended uses of the fund.
Fees to be charged by the County Sheriff are set forth in § 21-6-307. The Sheriff fees are divided 75% to County General and 25% to the Communications Facility and Equipment Fund. The fees listed in § 21-6-307 are the only fees charged by the Sheriff that are subject to the 75% - 25% split.
The 25% amount of sheriff fees pursuant to § 21-6-307(a)(1)-(17) do not have to be remitted to the county treasury – and can be retained by the Sheriff for the Communications Facility and Equipment Fund. In accordance with the law, the Sheriff maintains this money and fund and it is not subject to appropriation by the quorum court [AG Opinion No. 2002-008 and AG Opinion No. 2003-074]. The funds are subject to audit by the Arkansas Legislative Audit Department. All money paid into this fund from the 25% source of sheriff fees are restricted in use for the following: (1) train operations staff; (2) operate, equip, repair, or replace existing communications equipment; (3) purchase additional communications equipment; (4) otherwise improve a communications facility or system for the sheriff’s department; or (5) purchase vehicles, weapons, or other equipment for the sheriff’s department.
However, in many counties the Communication Facility and Equipment Fund is on the books of the County Treasurer. When the Communications Facility and Equipment Fund first became a part of the law in the 1980’s [first called the Sheriff’s Radio and Equipment Repair and Replacement Fund – changed to current name by Act 662 of 1995] the Arkansas Legislative Audit did not believe it was proper county procedure for the Sheriff to maintain control of the fund and suggested that they remit it to the County Treasurer. This audit division suggestion was before Enron and when they made those types of suggestions to county government officials. There were Sheriffs also that thought it was not a good idea for them to maintain this money in their office. Therefore, in several counties – contrary to what the law says – the Communications Facility and Equipment Fund is on the books of the County Treasurer. In such case, the fund is a part of the county treasury and is subject to quorum court appropriation [A.C.A. 14-14-1102(b)(2)(C)(i) and Arkansas Constitution, Article 16, Section 12].
At the discretion of the Sheriff, any funds in the Communications Facility and Equipment Fund not needed by the Sheriff may be transferred to the county general fund.
The 25% cut of Sheriff fees is not the only source of revenue for the Communications Facility and Equipment Fund. The commissions derived from prisoner telephone services provided in the county jail and the profits from inmate commissary services end up in the Communications Facility and Equipment Fund pursuant to § 12-41-105.
Commissions on prisoner telephone services and profits on inmate commissary services must be deposited with the county treasurer on a monthly basis through the monthly financial settlements with the treasurer. The county treasurer credits these funds to the County Sheriff’s Office Fund, an agency fund on the county’s books.
The Treasurer commissions these funds [per AG Opinion No. 2015-147] and remits 100% of the net amount to the Communications Facility and Equipment Fund. If the Communications Fund is on the books of the county the Treasurer transfers the commissions and profits from the County Sheriff’s Office Fund to the Communications Facility and Equipment Fund as an interfund transfer. However, if the Communications Fund is on the books of the Sheriff the Treasurer must issue a “treasurer’s check” to the Sheriff for deposit to the Communications Fund.
Since the County Sheriff’s Office Fund is an agency fund – the movement of this money from the sheriff’s office fund to the Communications Fund, regardless of who holds the fund, does not require an appropriation.
The Sheriff must allocate a percentage of the commissions deposited to the fund for the maintenance and operation of the county jail. A specific percentage is not required but some percentage up to 75% must be allocated for jail operations. [Note: Commissions from prisoner telephone services and profits from commissary services addressed in § 12-41-105 and the provisions of that code do not apply to Benton, Pulaski and Washington counties – the three counties in Arkansas with populations in excess of 175,000.]
Another source of “special revenue” for the County Sheriff comes from boat registration fees. A percentage of those fees are credited to the County Aid Fund and remitted to the County Treasurers in the proportions thereof as between the respective counties that the total of the fees produced from each county bears to the total of the fees produced from all counties. [§ 27-101-111]
Upon receipt of these funds the County Treasurer credits the funds to the Boating Safety and Enforcement Fund – if the Sheriff has established a patrol on the waterways within the county. Otherwise, the funds are credited to the County Emergency Rescue Fund for use exclusively by either the county or the cities within the county, or both, for operating and maintaining emergency rescue services.
If neither the county nor any of the cities within the county operate emergency rescue services the fees should be deposited into the Game Protection Fund for use by the Arkansas State Game and Fish Commission.
Drug Enforcement Fund - A county may provide the Sheriff with another Special Revenue Fund – a Drug Enforcement Fund. For this fund to be established the quorum court must pass an ordinance establishing the fund and set a maximum balance for the fund – not to exceed $50,000 [amended from $10,000 by Act 154 of 2013].
There are restrictions on how the fund can be used. The law allows for these funds to be used only for direct expenses associated with the investigation of the criminal drug laws, including (1) the purchase of evidence; (2) the payment of information; (3) the relocation or security of witnesses, or both; (4) emergency supply purchases; and (5) emergency travel expenses. The funds cannot be used for (1) administrative costs associated with the sheriff’s office; or (2) equipment purchases or leasing, salaries or wages, professional services, training, or any other purpose not directly related to a criminal drug investigation.
After the quorum court has approved an ordinance establishing a Drug Enforcement Fund, set the maximum amount of the fund within the maximum threshold set by state law, and appropriated money for the fund, the county judge may approve a county claim for the initial establishment of the Drug Enforcement Fund on the books of the County Sheriff. If adequate appropriations and funds are available, the Drug Enforcement Fund may be replenished upon presentation and approval of a county claim. The total Drug Enforcement Fund dollars [both bank account and cash funds] must never exceed the maximum established by the quorum court.
Accounting records must be maintained by the sheriff’s office for the receipt, disbursement, accounting, and documentation of funds pursuant to the written procedures established by the Division of Legislative Audit. [As with the Communications Facility and Equipment Fund – this fund is on the books of the Treasurer in some counties rather than on the books of the Sheriff.]
Everything there is to know about the Drug Enforcement Fund is in Act 362 of 1997, amended for the first time by Act 154 of 2013, and codified in A.C.A. §§ 14-21-201 through 14-21-204. No AG Opinions or case law exist on these laws governing the Drug Enforcement Fund.
Drug Control Fund - Another Special Revenue Fund for use by the County Sheriff is the Drug Control Fund. Information concerning the Drug Control Fund is found in the rather extensive “Property Subject to Forfeiture” law which is codified as A.C.A. 5-64-505. Subdivision (i)(2) lays out the creation of the Drug Control Fund on the books of law enforcement agencies and prosecuting attorneys. The Drug Control Fund moneys come from the disposition of moneys in the Prosecutor’s Asset Forfeiture Fund as outlined in subdivision (i)(1).
Moneys in the Drug Control Fund shall be used only “for law enforcement and prosecutorial purposes” – which is a rather broad definition of what the moneys can be used for. The term “prosecutorial purposes” is not in itself a legal term that is defined. The definition of “prosecutorial” is relating to, or being a prosecutor or prosecution. It would appear then that “drug control funds” could be used generally for law enforcement purposes and for any legitimate expense of the prosecutor or his/her team in the process of conducting the prosecution of a defendant.
There are several Attorney General Opinions dealing with the Drug Control Fund.
In connection with the Drug Control Fund as established under A.C.A. 5-64-505 – at least one other code is worth mentioning. It is:
A.C.A. 12-17-105 – This code allows the use of Drug Control Funds to meet the local match for a grant to a multi-jurisdictional drug crime task force receiving a grant award from the State Drug Crime Enforcement and Prosecution Grant Fund.
Does the Quorum Court have any authority to add extra duties to the established duties of county constitutional officers and if so, is there any limitation on that authority?
As a general rule we think of the duties and responsibilities of the county constitutional officers [county elected officials] being set forth by the Arkansas Constitution and state law as enacted by the state legislature. However, Amendment 55 to the Arkansas Constitution gave some latitude in that area to the quorum court – the legislative body of county government.
Amendment 55, Section 1(a), states that “a county acting through its Quorum Court may exercise local legislative authority not denied by the Constitution or by law.” The enabling legislation of Amendment 55, Act 742 of 1977, sheds quite a bit of light on the question of the authority of a quorum court to add extra duties to an elected official.
Section 69 of Act 742 of 1977, codified as § 14-14-801, simply restated Amendment 55, Section 1(a) saying that “county government acting through its county quorum court, may exercise local legislative authority not expressly prohibited by the Arkansas Constitution or by law for the affairs of the county.”
There is not a state law or constitutional provision expressly prohibiting a quorum court from prescribing additional duties of elected county officials. Arkansas Code § 14-14-801(b)(10) and (13) go on to say, respectively that the quorum court’s legislative authority includes the power to “provide for any service or performance of any function relating to county affairs;” and to “exercise other powers, not inconsistent with law, necessary for effective administration of authorized services and functions.”
The authority of a quorum court to add or assign duties to an elected official is more clearly delineated in a couple of other codes – which were also a part of the enabling legislation of Amendment 55. Section 108 of Act 742 of 1977, provisions pertaining to the compensation of elected county officers state that the annual salary includes compensation “for all other services performed as provided by the Arkansas Constitution, by law, or by county ordinances.” And plainly, under § 14-14-702(2) [Act 742 of 1977, Section 100] “any function or duty assigned by statute may be reassigned by ordinance.”
How far can a quorum court go in reassigning or adding duties to an elected official? Each case would require consideration of the office and additional duties assigned. There are a couple of things in particular to be concerned about. First, a county quorum court cannot completely reorganize county government by simply reassigning duties. Although Amendment 55, Section 2(b) allows for the reorganization of county government, there is a procedure to follow as set out in Arkansas Code Annotated, Title 14, Chapter 14, and Subchapter 6. Secondly, there would be a limitation based upon the separation of powers doctrine. The Quorum Court is the legislative branch of county government – and as such cannot micro-manage or significantly interfere with executive powers.
Can a quorum court set salaries of elected county officials as long as the salary is between the minimum and maximum set by the legislature even if they choose to decrease the salaries?
The answer to the question is answered by Section 5 of Amendment 55 which provides that “compensation of each county officer shall be fixed by the Quorum Court within a minimum and maximum to be determined by law. Compensation may not be decreased during a current term……”
The minimums and maximums have been established by the legislature in Arkansas Code § 14-14-1204 for the following county constitutional officers: (1) county judge; (2) sheriff and ex officio collector of taxes; (3) collector of taxes, where established by law; (4) circuit clerk; (5) county clerk, where established by law; (6) assessor; (7) treasurer; (8) coroner; and (9) surveyor. Also, § 14-14-1210 enacted by Act 320 of 2009 provides for a cost-of-living adjustment to be added to the minimums and maximums.
This COLA became effective with the 2011 county budget year and does NOT automatically require an increase in salary. The provisions of § 14-14-1210 simply provide a process for adjusting or indexing the minimum and maximum salaries to be paid to county officials.
The quorum court has the authority to set salaries of the elected county constitutional officials anywhere from the minimum to maximum established by law for each office and county size classification. However, under the language of Amendment 55 those salaries may not be decreased during a current term. A.C.A. § 14-14-1203(d) provides for the implementation of a legal decrease in salary stating, “Any decrease in the annual salary or compensation of a county officer shall not become effective until January 1 following a general election held after such decrease shall have been fixed by the quorum court of the county.”
Since Justices of the Peace are paid a “per diem” is the payment exempt from taxes?
Per Diem is Latin for “by the day” or “for each day”. In modern terminology the term has mainly been used to refer to a monetary daily allowance or a daily fee – usually to cover expenses but not always.
In the case of compensation for Justices of the Peace per diem is a “daily fee” established by county ordinance for attending a meeting of the quorum court – whether it be the regular monthly meeting, special meeting, or committee meeting. Arkansas Code Annotated § 14-14-1205 establishes the perimeters for the per diem compensation for Justices of the Peace.
There are a number of things that are involved in making the decision of whether or not “per diem” is taxable. But, in the case of Justices of the Peace the per diem compensation is not a payment to cover expenses…it is a payment for attending a meeting. The payment is taxable income.
Per Diem payments are taxable when any of these situations are true:
- No expense report is filed with the employer.
- The expense report filed does not include the date, time, place, amount, and business purpose of the expense.
- A flat amount is given to the employee/official and no expense report is required, or
- Per Diem is paid in excess of the allowable standard federal rate.