In Arkansas, can a city council force the city's Advertising and Promotion Commission to keep funding the convention center, or does the commission have sole authority over how A&P tax dollars are spent?
Plain-English summary
Arkansas's Advertising and Promotion Commission Act, A.C.A. §§ 26-75-601 to -619, lets cities collect a hotel and prepared-food tax (commonly called the A&P tax) and spend it through a city-level Advertising and Promotion Commission. Pine Bluff's representative asked who actually decides how A&P dollars get spent. Specifically, can the commission decide to stop funding the city's convention center, and can the mayor or city council force the commission to keep funding it?
The AG's three-part answer:
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The A&P Commission is not legally obligated to fund the convention center. The statute lists several permissible uses for A&P revenue, including operating a convention center, but the language is permissive ("may") not mandatory. The commission can choose among any of the listed uses or decline to fund a particular one.
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The mayor and city council cannot pass an ordinance forcing the commission to fund the convention center. The statute gives the A&P Commission sole authority to determine the use of A&P funds. Accountability comes through commission appointments: two of the seven members are city council members, four others are appointed by the council, and the seventh is appointed by the city's chief administrator with council approval.
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The commissioners have exclusive authority over A&P fund use, subject to the statutory list. A&P funds cannot be spent on (a) general capital improvements for the city or county, (b) general operating costs for the city or county, or (c) general funding for the chamber of commerce or any civic group.
What this means for you
City council members and mayors
You do not have direct authority to dictate how the A&P Commission spends its money. An ordinance purporting to mandate that the commission fund a particular facility (convention center, arena, museum) is not legally enforceable against the commission. If you disagree with the commission's spending priorities, your tools are political and structural, not legislative.
The structural tool is appointment. Six of the seven commission seats run through the council. Two seats are reserved for sitting council members (which you can fill or not), four seats are appointed directly by the council, and the seventh is appointed by the chief administrator with council approval. If you want a commission that will spend differently, work the appointments. The 4-2-1 structure means a council majority that wants to redirect A&P spending has the votes to install a sympathetic commission over time.
The political tool is publicity. The commission's expenditures are public records. If a commission majority is making spending choices that you believe do not serve the city's tourism economy, hold a hearing, request a public accounting, and let voters and the hospitality industry weigh in.
Advertising and Promotion commissioners
You have meaningful discretion. The seven options in A.C.A. § 26-75-606 (advertising, convention centers, tourist promotion, personnel, the arts, tourist-oriented facilities like theme parks, parks and recreation, and bond payments tied to those purposes) are alternatives, not a sequence to step through. You can mix and match.
Three things you cannot do, even with a unanimous vote: fund general capital improvements for the city or county, cover general operating costs of city or county government, or write general checks to the chamber of commerce or any civic group. If a project comes to you described as one of the permitted uses but functionally serves a general municipal purpose, look closely. The statute is asking you to fund tourism-driving and arts/recreation activities, not to backfill the city's general fund.
Document your decisions in your minutes. If a city council later challenges a decision (or threatens an ordinance you should not honor), the record of your deliberation and the connection to a permitted statutory use is your defense.
Convention center managers and tourism stakeholders
If your funding from the A&P Commission gets cut, the legal path forward is narrow. The commission has sole statutory discretion. You cannot force a city council ordinance to override that, and you do not have a private right of action under the A&P Act to compel funding. Your real options are political: build relationships with current commissioners, recruit candidates for upcoming council and commission appointments, and document the economic value the convention center generates to make the case publicly.
Hospitality businesses paying A&P tax
You are paying into a fund whose use is controlled by a seven-member commission with significant discretion among the statutory categories. If you think the spending priorities are wrong, the four levers are: (1) testify at A&P Commission meetings, (2) lobby council members on appointments, (3) elect council members aligned with your priorities, and (4) request public records on commission expenditures.
Common questions
Can a city council pass an ordinance directing how A&P funds are spent?
No. The commission has sole statutory authority under § 26-75-606(a)(2)(A). An ordinance purporting to override that is unenforceable. The council's use is appointments, not direct legislation.
What can A&P money fund?
Per § 26-75-606: advertising and promoting the city, building and operating a convention center, operating a tourist-promotion facility for the convention center, personnel and admin costs of the commission, funding the arts, operating tourist-oriented facilities like theme parks, building and operating city parks or public recreation facilities, and paying principal and interest on bonds for any of those purposes.
What cannot it fund?
General capital improvements for the city or county (unless they fit a permitted category like a park), general operating costs of city or county government, and general funding for the chamber of commerce or any civic group.
Can the commission give money to the chamber of commerce for a specific tourism event?
The statute prohibits "general funding for the chamber of commerce or any civic group." An event-specific grant for an advertising or tourism-promotion purpose under § 26-75-606(a)(1)(A) is not the same as general operating support. The line is fact-intensive. Document the specific purpose, deliverables, and connection to a statutory use.
How are A&P commissioners chosen and removed?
Two are sitting members of the city council. Four are appointed by the city council. One is appointed by the chief administrator (mayor in most cities) with council approval. Removal procedures depend on the appointing authority and the city's ordinances. Term lengths and qualifications are in § 26-75-605.
Can the commission change priorities mid-year?
Yes. The commission has ongoing discretion. A budget adopted at the start of the year can be amended by the commission consistent with the statutory list. Existing contractual commitments still have to be honored, of course, so the commission cannot use a budget amendment to escape a binding obligation.
Does this opinion apply to county A&P commissions or only city ones?
The statute (§§ 26-75-601 to -619) is structured around city A&P commissions. Counties do not have an equivalent statutory commission under this chapter. If your jurisdiction is a county, this opinion's holdings are of limited direct applicability.
Background and statutory framework
The A&P tax. A.C.A. § 26-75-601 et seq. authorizes cities to levy a tax (typically 1-3%) on hotel rooms and, in some cities, prepared food. Revenue funds an Advertising and Promotion Commission.
Commission structure. A.C.A. § 26-75-605:
- (a)(1): Four members appointed by the city council, drawn from the hospitality industry where possible.
- (a)(2): Two members are sitting members of the city council.
- (b)(2): One member appointed by the city's chief administrative officer, with council approval.
Total: seven members.
Permitted uses of A&P funds. A.C.A. § 26-75-606(a)(1)(A) lists permitted uses joined by the conjunction "or": advertising, convention center construction/operation, tourist-promotion facility, personnel/admin, arts funding, tourist-oriented facilities like theme parks, parks/recreation, and bond payments. The Arkansas Supreme Court in Webb v. State, 327 Ark. 51 (1997), held that "or" connects alternatives. Subsequent provisions use "may," which Ark. Elec. Co-op. Corp. v. Ark. Pub. Serv. Comm'n, 307 Ark. 171 (1991), confirmed is permissive.
Exclusive commission authority. § 26-75-606(a)(2)(A) provides the commission "is the body that determines the use of the city's [A&P funds]." No mayor, council, or other body can override that.
Prohibited uses. § 26-75-606(c)(2) bars three categories: general capital improvements for city or county, general operating costs for city or county, and general funding for the chamber of commerce or any civic group.
Citations
- A.C.A. § 26-75-601 (A&P Act, defining scope)
- A.C.A. § 26-75-605(a)(1) (four council-appointed members)
- A.C.A. § 26-75-605(a)(2) (two council-member commissioners)
- A.C.A. § 26-75-605(b)(2) (chief administrator's appointee)
- A.C.A. § 26-75-606(a) (commission discretion over A&P funds)
- A.C.A. § 26-75-606(a)(1)(A) (permitted uses, joined by "or")
- A.C.A. § 26-75-606(a)(1)(B) and (b)(2) ("may" use language)
- A.C.A. § 26-75-606(a)(2)(A) (commission as sole determiner of use)
- A.C.A. § 26-75-606(c)(2) (prohibited uses: city capital improvements, general operating costs, chamber/civic group general funding)
- Webb v. State, 327 Ark. 51, 938 S.W.2d 806 (1997) ("or" as connector of alternatives)
- Ark. Elec. Co-op. Corp. v. Ark. Pub. Serv. Comm'n, 307 Ark. 171, 818 S.W.2d 935 (1991) ("may" as permissive)
Source
Original opinion text
Opinion No. 2024-002
March 26, 2024
The Honorable Kenneth B. Ferguson
State Representative
Post Office Box 5661
Pine Bluff, Arkansas 71611
Dear Representative Ferguson:
You have requested my opinion regarding the following three questions about the Advertising and Promotion Commission Act (the "Act") and funding by the Pine Bluff Advertising and Promotion Commission (the "A&P Commission") of the Pine Bluff Convention Center.
Question 1: Pursuant to the Act, is the A&P Commission legally obligated to fund the Pine Bluff Convention Center?
The A&P Commission is not legally obligated to fund the Pine Bluff Convention Center, even though it can use funds collected under the Act ("A&P funds") to operate and maintain the convention center. Instead, the A&P Commission has multiple options for A&P funds under A.C.A. § 26-75-606:
- Advertising and promoting the city and its surrounding areas;
- Constructing, reconstructing, equipping, and operating a convention center, as well as any expenses for expanding, repairing, or improving the convention center;
- Operating a tourist promotion facility for the convention center;
- Personnel, agencies, or administrative costs "necessary to conduct [the] business" of the commission;
- Funding of the arts;
- Operating tourist-oriented facilities, such as theme parks or family entertainment facilities;
- Constructing, reconstructing, equipping, and operating city parks or public recreation facilities, as well as any expenses for expanding, repairing, or improving the city parks or public recreation facilities; or
- Payments of principal, interest, fees, or expenses for bonds for these items.
The A&P Commission can legally refuse to fund the Pine Bluff Convention Center for two reasons. First, A.C.A. § 26-75-606(a) gives the A&P Commission sole discretion to determine the use of A&P funds and the necessity of the purpose for which the funds are used.
Second, all the options listed in A.C.A. § 26-75-606 are discretionary. In listing the potential uses of A&P funds in A.C.A. § 26-75-606(a)(1)(A), the General Assembly used the conjunction "or," which made each use optional. Similarly, A.C.A. §§ 26-75-606(a)(1)(B) to -606(b)(2) state that the A&P Commission "may" use A&P funds for those purposes. By using "may," the General Assembly made those uses permissive instead of mandatory.
Question 2: Can the mayor and/or city council enact an ordinance mandating that the A&P Commission fund the Pine Bluff Convention Center with A&P funds?
They cannot mandate the use of the A&P funds. Section 26-75-606(a)(2)(A) states that the A&P Commission "is the body that determines the use of the city's [A&P funds]." While nothing in the Act provides any explicit authority for the mayor or city council to direct how A&P funds are used, accountability measures are built into the Act. Two of the seven members of the A&P Commission are members of the city council, and four members are selected by the city council. The city's chief administrator appoints the final member of the A&P Commission, with approval by the city council.
Question 3: Do the commissioners of the A&P Commission have sole authority to determine the use of A&P funds, as long as the use of funds does not violate A.C.A. § 26-75-606?
The A&P Commission has the exclusive authority to determine the use of A&P funds. Those funds have to be used for one of the options discussed in response to your first question. Section 26-75-606 further specifies that the A&P funds cannot be used for (1) general capital improvements for the city or county, (2) general operating costs for the city or county, or (3) general funding for the chamber of commerce or any civic group.
Assistant Attorney General Jodie Keener prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General