(a) (1) (A) In lieu of using all or a portion of its authority to levy a sales and use tax solely to pay bonded debt under § 14-164-327, the governing body of any municipality or county may adopt an ordinance levying a tax in the amount of one-fourth of one percent (0.25%), one-half of one percent (0.5%), three-fourths of one percent (0.75%), or one percent (1%) upon all taxable sales of property and services subject to the tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and upon the privilege of storing, using, distributing, or consuming within this state any tangible personal property which is subject to the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq. The ordinance or ordinances must specify that the tax is being levied under this law.

(B) By levying a tax under this section, the municipality or county levying a tax hereunder shall lose its authority to levy up to a one percent (1%) sales and use tax under § 14-164-327 solely to pay bonded debt only to the extent of the tax levied hereunder.

(2) The proceeds of a tax levied under this section may be used for one (1) or more of the following:

(A) With respect to a capital improvement, solid waste management system as defined in § 8-6-203, part of a solid waste management system as defined in § 8-6-203, or any combination of a capital improvement, solid waste management system as defined in § 8-6-203, or part of a solid waste management system as defined in § 8-6-203, financing of one (1) or more of the following:

(i) Operation;

(ii) Maintenance; or

(iii) Rental expense;

(B) Securing the repayment of bonds by the municipality or county issued under §§ 14-164-301 -- 14-164-339; or

(C) Acquiring or constructing capital improvements of a public nature for no more than twenty-four (24) months.

(b) To the extent permitted by this section, a governing body levying a tax under this section shall follow the procedures prescribed by the Local Government Bond Act of 1985, § 14-164-301 et seq., and the tax shall be collected, reported, and remitted in the same manner and at the same time as a tax levied under the Local Government Bond Act of 1985, § 14-164-301 et seq.

(c) (1) (A) A municipality or county levying a sales and use tax under this section may abolish the tax or both abolish the tax and levy a new sales and use tax at a lower rate after an election called in the same manner as provided in the Local Government Bond Act of 1985, § 14-164-301 et seq., or by a petition of the qualified voters of the municipality or county which levied the tax. As to a petition of the qualified voters, the provisions of Arkansas Constitution, Amendment 7 shall govern.

(B) A new sales and use tax levied under this subsection shall be at a rate authorized by subsection (a) of this section.

(2) This section shall also apply to any tax levied by ordinance adopted prior to February 28, 1992, so long as:

(A) The ordinance levying the tax recited that the tax was being levied under this section; and

(B) The tax was approved at a general or special election for one (1) or more of the uses set forth in subdivision (a)(2) of this section. The effect of this provision is for such a tax to be levied for the approved uses, whether or not the ordinance levying the tax was adopted and the election held prior to February 28, 1992, from and after the date a sales and use tax would otherwise become effective under the Local Government Bond Act of 1985, § 14-164-301 et seq.

(3) This section does not prohibit or affect the ability of a municipality or county from levying a sales and use tax under § 26-74-201 et seq., § 26-74-301 et seq., § 26-75-201 et seq., § 26-75-301 et seq., and the Local Government Bond Act of 1985, § 14-164-301 et seq., and using all or a portion of the proceeds of the sales and use tax to do one (1) or more of the following with respect to a capital improvement of a public nature:

(A) Operate;

(B) Maintain; or

(C) Finance.

(4) In any municipality or county in which a local sales and use tax has been adopted under this section, and all or a portion of the tax is pledged to secure the payment of bonds, that portion of the tax pledged to retire the bonds shall not be repealed, abolished, or reduced so long as the bonds are outstanding.

(5)

(A) If no election challenge is filed within thirty (30) days of the date of the publication of the proclamation of the results of the election under this subsection, the abolition of the tax and the levy of a new tax, if any, shall become effective on the first day of the first month of the calendar quarter subsequent to the expiration of the thirty-day period for challenge in § 14-164-329.

(B)

(i) In the event of an election contest, the tax shall be collected as prescribed in this subsection unless enjoined by court order.

(ii) Hearings of such matters of litigation shall be advanced on the docket of the courts and disposed of at the earliest practicable time.

(d) Nothing herein shall be construed to expand or limit the aggregate rate at which a sales and use tax may be levied by municipalities and counties under laws in effect on January 1, 1992.