Constitution of Arkansas (2025 publisher edition) — Article 12

Publisher edition notice: This collection preserves the complete constitutional appendix of the Secretary of State’s 2025 Election Laws and Constitution compilation: its preamble, twenty original articles, schedule and 104 published amendments, including annotations and explicit repealed notices. Repealed notices remain historical publisher context. Later amendments have not been independently verified.

Article 12

ARTICLE 12
M UNICIPAL AND PRIVATE C ORPORATIONS
SECTION .
1. Revocation of certain charters.
2. Special acts prohibited — Exception.
3. Cities and towns — Organization under general laws.
4. Limitation on legislative and taxing power — Local
bond issues.
5. Political subdivisions not to become stockholders in or
lend credit to private corporations — Exceptions.
6. General incorporation laws — Charters — Revoca-
tion.
SECTION.
7. State not to be stockholder.
8. Private corporations — Issuance of stocks or bonds —
Conditions and restrictions.
9. Taking of property by corporation — Compensation.
10. Issue of circulating paper.
11. Foreign corporations doing business in state.
12. State not to assume liabilities of political subdivisions
or private corporations — Indebtedness to state —
Release.
§ 1. Revocation of certain charters.
All existing charters or grants of special or exclusive privileges, under a bona fide organization
shall not have taken place, and business been commenced in good faith, at the time of the
adoption of this Constitution, shall thereafter have no validity.
§ 2. Special acts prohibited — Exception.
The General Assembly shall pass no special act conferring corporate powers, except for
charitable, educational, penal or reformatory purposes, where the corporations created are to be
and remain under the patronage and control of the state.
§ 3. Cities and towns — Organization under general laws.
The General Assembly shall provide, by general laws, for the organization of cities (which may
be classified) and incorporated towns; and restrict their power of taxation, assessment, borrowing
money and contracting debts, so as to prevent the abuse of such power.
§ 4. Limitation on legislative and taxing power — Local bond issues.
No municipal corporation shall be authorized to pass any laws contrary to the general laws of
the state; nor levy any tax on real or personal property to a greater extent, in one year, than five
mills on the dollar of the assessed value of the same; Provided: That, to pay indebtedness existing
at the time of the adoption of this Constitution, an additional tax of not more than five mills on
the dollar, may be levied.
The fiscal affairs of counties, cities and incorporated towns shall be conducted on a sound
financial basis, and no county court or levying board or agent of any county shall make or
authorize any contract or make any allowance for any purpose whatsoever in excess of the
revenue from all sources for the fiscal year in which said contract or allowance is made; nor shall
any county judge, county clerk, or other county officer, sign or issue any scrip warrant or make
any allowance in excess of the revenue from all sources for the current fiscal year; nor shall any
city council, board of aldermen, board of public affairs, or commissioners, of any city of the first
or second class, or any incorporated town, enter into any contract or make any allowance for any
purpose whatsoever, or authorize the issuance of any contract or warrants, scrip or other
evidences of indebtedness in excess of the revenue for such city or town for the current fiscal year;
nor shall any mayor, city clerk, or recorder, or any other officer or officers, however designated,
of any city of the first or second class or incorporated town sign or issue scrip, warrant or other
certificate of indebtedness of excess of the revenue from all sources for the current fiscal year.
Provided, however, to secure funds to pay indebtedness outstanding at the time of the adoption
of this amendment, counties, cities, and incorporated towns may issue interest bearing certifi-
cates of indebtedness or bonds with interest coupons for the payment of which a county or city
tax, in addition to that now authorized, not exceeding three mills may be levied for the time as
provided by law until such indebtedness is paid.
620 Art. 12, § 1 CONSTITUTION OF ARKANSAS

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Where the annual report of any city or county in the State of Arkansas shows that scrip,
warrants or other certificate of indebtedness had been issued in excess of the total revenue for
that year, the officer or officers of the county or city or incorporated town who authorized, signed
or issued such scrip, warrants or other certificates of indebtedness shall be deemed guilty of a
misdemeanor and upon conviction thereof, shall be fined in any sum not less than five hundred
dollars nor more than ten thousand dollars, and shall be removed from office. [As amended by
Const. Amend. 10.]
Publisher’s Notes. Ark. Const. Amend. 10 added the
last three paragraphs.
§ 5. Political subdivisions not to become stockholders in or lend credit to private
corporations — Exceptions.
(a) No county, city, town or other municipal corporation, shall become a stockholder in any
company, association, or corporation; or obtain or appropriate money for, or loan its credit to, any
corporation, association, institution or individual.
(b) However, a county, city, town, or other municipal corporation may obtain or appropriate
money for a corporation, association, institution, or individual to:
(1) Finance economic development projects; or
(2) Provide economic development services.
(c) As used in this section:
(1) “Economic development projects” means the land, buildings, furnishings, equipment,
facilities, infrastructure, and improvements that are required or suitable for the development,
retention, or expansion of:
(A) Manufacturing, production, and industrial facilities;
(B) Research, technology, and development facilities;
(C) Recycling facilities;
(D) Distribution centers;
(E) Call centers;
(F) Warehouse facilities;
(G) Job training facilities;
(H) Regional or national corporate headquarters facilities; and
(I) Sports complexes designed to host local, state, regional, and national competitions,
including without limitation baseball, softball, and other sports tournaments;
(2) “Economic development services” means:
(A) Planning, marketing, and strategic advice and counsel regarding job recruitment, job
development, job retention, and job expansion;
(B) Supervision and operation of industrial parks or other such properties; and
(C) Negotiation of contracts for the sale or lease of industrial parks or other such
properties; and
(3) “Infrastructure” means:
(A) Land acquisition;
(B) Site preparation;
(C) Road and highway improvements;
(D) Rail spur, railroad, and railport construction;
(E) Water service;
(F) Wastewater treatment;
(G) Employee training which may include equipment for such purpose; and
(H) Environmental mitigation or reclamation.
(d) The General Assembly, by a three-fourths vote of each house, may amend the provisions of
subsections (b) and (c) of this section so long as the amendments are germane to this section and
consistent with its policy and purposes. [As amended by Const. Amend. 97; Acts 2019, No. 1072,
§ 1.]
621 Art. 12, § 5 MUNICIPAL AND PRIVATE CORPORATIONS

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Publisher’s Notes. Ark. Const. Amend. 97, which
amended this section, was proposed by S.J.R. 16 during the
2015 Regular Session and adopted at the November 2016
general election by a vote of 689,980 for and 366,020
against. The amendment added (b) through (d), and was
effective thirty days after the election pursuant to § 7-9-
119.
Amend. 97, § 1, provided: “INTENT. The intent of this
amendment to the Arkansas Constitution is to encourage
job creation, job expansion, and economic development.”
§ 6. General incorporation laws — Charters — Revocation.
Corporations may be formed under general laws; which laws may, from time to time, be altered
or repealed. The General Assembly shall have the power to alter, revoke or annul any charter of
incorporation now existing and revocable at the adoption of this Constitution, or any that may
hereafter be created, whenever, in their opinion, it may be injurious to the citizens of this State;
in such manner, however, that no injustice shall be done to the corporators.
§ 7. State not to be stockholder.
Except as herein provided, the State shall never become a stockholder in, or subscribe to, or be
interested in the stock of any corporation or association.
§ 8. Private corporations — Issuance of stocks or bonds — Conditions and restrictions.
No private corporation shall issue stocks or bonds, except for money or property actually
received, or labor done; and all fictitious increase of stock or indebtedness shall be void; nor shall
the stock or bonded indebtedness of any private corporation be increased, except in pursuance of
general laws; nor until the consent of the persons holding the larger amount, in value, of stock,
shall be obtained at a meeting held after notice given, for a period not less than sixty days, in
pursuance of law.
§ 9. Taking of property by corporation — Compensation.
No property, nor right of way, shall be appropriated to the use of any corporation, until full
compensation therefor shall be first made to the owner, in money; or first secured to him by a
deposit of money; which compensation, irrespective of any benefit from any improvement
proposed by such corporation, shall be ascertained by a jury of twelve men, in a court of
competent jurisdiction, as shall be prescribed by law.
§ 10. Issue of circulating paper.
No act of the General Assembly shall be passed authorizing the issue of bills, notes, or other
paper which may circulate as money.
§ 11. Foreign corporations doing business in state.
Foreign corporations may be authorized to do business in this State, under such limitations
and restrictions as may be prescribed by law; Provided: That no such corporation shall do any
business in this State, except while it maintains therein one or more known places of business,
and an authorized agent or agents in the same, upon whom process may be served; and, as to
contracts made or business done in this State, they shall be subject to the same regulations,
limitations and liabilities as like corporations of this State; and shall exercise no other or greater
powers, privileges or franchises than may be exercised by like corporations of this State; nor shall
they have power to condemn or appropriate private property.
§ 12. State not to assume liabilities of political subdivisions or private corporations —
Indebtedness to state — Release.
Except as herein otherwise provided, the State shall never assume, or pay the debt or liability
of any county, town, city or other corporation whatever; or any part thereof; unless such debt or
liability shall have been created to repel invasion, suppress insurrection, or to provide for the
622 Art. 12, § 6 CONSTITUTION OF ARKANSAS

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public welfare and defense. Nor shall the indebtedness of any corporation to the State, ever be
released, or in any manner discharged, save by payment into the public treasury.