Was the Arkansas Lottery Commission exempt from the statewide mileage reimbursement cap before it was abolished in 2015, and could it claw back over-cap amounts it had already paid employees?
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This page answers the general question as of 2015. Ezel answers yours: what it means for your facts, under current Arkansas law, with citations.
Plain-English summary
In 2014 the Arkansas Lottery Commission decided to reimburse its employees for using their personal cars on state business at $0.56 per mile, the IRS standard mileage rate at the time. The State of Arkansas Travel Regulations issued by the Chief Fiscal Officer (the director of the Department of Finance and Administration) capped reimbursement at $0.42 per mile for all state officers and employees not otherwise expressly exempt. The Commission's rate was 14 cents per mile higher than the cap.
Bishop Woosley, the Commission's director, asked AG Leslie Rutledge two questions. First, was the Commission exempt from the travel regulation? Second, if not, should the Commission try to claw back the over-cap amounts from the employees who received them?
AG Rutledge said the Commission was not exempt. The travel regulation, on its face, applied to "all officers and employees of state government" except those expressly exempted by law. Constitutional and elective officials and their employees were exempt under A.C.A. § 19-4-904(a)(1). The Commission was not in that group, and no other express exemption applied. The Commission did have express exemptions in A.C.A. § 23-115-211 from "certain laws," including several that make state agencies subject to DF&A authority, but the travel regulation statute (A.C.A. § 19-4-901 et seq.) was not among the laws listed.
Two structural pieces of statutory context reinforced that conclusion. First, the Commission's own enabling act in A.C.A. § 23-115-202(f) authorized expense reimbursement for Commission members under the general state board and commission reimbursement law, A.C.A. §§ 25-16-901 to -908. Section 25-16-902(b) caps reimbursement to state board members at "the rate established for state employees by state travel regulations." If Commission members had to follow the travel-regulation cap, it would have been odd to read the statute as exempting Commission employees from the same cap. Second, the law providing for state travel regulations and the procurement law the Commission was expressly exempted from both came from the same legislative act, Act 876 of 1973 (the General Accounting and Budgetary Procedures Law). The General Assembly knew how to write an exemption from a Title 19 provision; the absence of an exemption from the travel rule, where there was an express exemption from a neighboring procurement rule, suggested the legislature did not mean to grant one.
The AG declined to answer the second question. Whether the Commission should pursue clawback was a fact-specific decision (the employees' individual circumstances, possible defenses, the cost of recovery, the policy question of how to treat employees who relied in good faith on the higher rate). The opinion noted in any event that the Commission no longer existed: Act 218 of 2015 had abolished it and transferred its powers and duties to the Office of the Arkansas Lottery within DF&A's Management Services Division. The Office, the successor, would have to make its own decision about whether to chase the prior Commission's overpayments.
Currency note
This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Background and statutory framework
A.C.A. § 19-4-901 directs the state's Chief Fiscal Officer to "promulgate . . . regulations with respect to travel and travel allowances . . . for all officers and employees of the state government." The CFO is the director of DF&A under A.C.A. § 19-1-201. A.C.A. § 19-4-903(c) authorizes the implementing regulations. A.C.A. § 19-4-904(a)(1) creates an express exemption for constitutional and elective officials, their employees, and official state guests. The State Travel Regulations (Rule 2, "Standard Reimbursements for State Employees and Officials") set the per-mile reimbursement at $0.42 when this opinion issued (effective Oct. 9, 2014).
The Arkansas Lottery Commission was created by the Scholarship Lottery Act of 2009. A.C.A. § 23-115-211 expressly exempted the Commission from a list of state laws, including A.C.A. § 19-4-1802 and several other DF&A authority provisions. The travel-regulation statutes in §§ 19-4-901 to -904 were not on the exempt list.
Act 218 of 2015 (with an emergency clause) abolished the Commission and transferred its functions to the Office of the Arkansas Lottery within DF&A's Management Services Division. The opinion notes that this opinion addresses only the now-defunct Commission, not the successor Office.
The AG's reluctance to opine on the clawback question reflects a standing practice. The formal opinion process answers questions of law; decisions that turn on facts the AG cannot independently develop (and on policy and discretion within an agency) fall outside its scope. Op. Att'y Gen. 2003-194 (refusing legal advice) and Op. Att'y Gen. 96-014 (refusing fact-specific second-question advice) are the cited precedents.
Common questions
What was the Arkansas Lottery Commission, and why was it abolished?
The Arkansas Lottery Commission was created in 2009 to run the state's scholarship lottery after Arkansas voters approved the lottery by constitutional amendment. By 2014, the Commission's structure was widely criticized as ineffective. Act 218 of 2015, with an emergency clause that put it into immediate effect, abolished the Commission and rolled its operations into DF&A's Management Services Division as the Office of the Arkansas Lottery. This opinion was issued about a month after the abolition.
Why does the IRS standard mileage rate matter here?
It doesn't, directly. The IRS standard mileage rate (the rate the federal government uses to value mileage for tax purposes) is a benchmark many private and public employers follow because it tracks the actual cost of vehicle operation. In 2014 it was $0.56 per mile. Arkansas, however, sets its own reimbursement cap for state employees through the CFO's travel regulations. The Arkansas cap was $0.42 per mile, well below the IRS rate. The Lottery Commission paid the IRS rate, not the Arkansas cap, and that is what triggered the question.
What does "in part" exempt from DF&A authority mean?
The Lottery Commission had a long list of express statutory exemptions in A.C.A. § 23-115-211 from specific DF&A oversight provisions. Those carve-outs were policy choices the legislature made when standing up the Commission: it would have authority to set its own procurement procedures, hire and fire on its own terms, and so on. The AG read the list literally. If a particular DF&A authority statute was not in the exempt list, the Commission was subject to it. The travel-regulation statute was not in the list, so the Commission was subject to it.
Why didn't the AG just tell the Commission to claw back overpayments?
The opinion explains that the second question turned on factors beyond the legal validity of any individual claim. Each potentially affected employee would have a different set of circumstances: how much they were overpaid, what they relied on, whether they would contest the claim. Some might have a contract or estoppel defense based on the Commission's published reimbursement rate. The cost of pursuing recovery might exceed the recovered amounts. Those are management calls, not legal opinions, and the AG declined to substitute her judgment for the agency's. The Commission's successor (the Office of the Arkansas Lottery) would have to decide.
Was the AG saying the employees did something wrong?
No. The opinion does not suggest the employees acted improperly. They were reimbursed at the rate the Commission had set, which they presumably reasonably believed was lawful. The legal problem was at the institutional level: the Commission as an agency should not have paid above the statewide cap. That is a different question from whether individual employees have to give the difference back.
Could the same situation happen with a different state board?
In principle yes. Any state agency that pays above the cap exposes itself to the same issue, unless the agency has an express statutory exemption. State boards and commissions in particular should look at A.C.A. § 25-16-902(b), which expressly ties board-member reimbursement to the travel-regulation cap, before paying any rate higher than the published state rate.
Citations
Core statutes: A.C.A. § 19-4-901 (CFO travel regulation authority); A.C.A. § 19-1-201 (CFO is DF&A director); A.C.A. § 19-4-903(c) (implementing regulations); A.C.A. § 19-4-904(a)(1) (exemption for constitutional and elective officials); A.C.A. § 23-115-202(f) (Commission member reimbursement); A.C.A. § 23-115-211 (Commission's express exemptions from listed statutes); A.C.A. §§ 25-16-901 to -908 (state board and commission reimbursement); A.C.A. § 25-16-902(b) (cap tied to state travel regulations); A.C.A. § 19-4-1802 (one of the laws the Commission was exempted from).
Authority: Acts 1973, No. 876 (General Accounting and Budgetary Procedures Law, which originated both the travel-regulation and procurement provisions); Acts 2015, No. 218 (abolished the Commission); State of Arkansas Travel Regulations (Oct. 9, 2014, Rule 2, "Standard Reimbursements for State Employees and Officials").
Prior AG opinions: 2003-194 (AG opinion process is not for legal advice); 96-014 (decline of fact-specific second-question advice).
Source
Original opinion text
STATE OF ARKANSAS
THE ATTORNEY GENERAL
LESLIE RUTLEDGE
Opinion No. 2015-015
March 26, 2015
Bishop Woosley, Director
Arkansas Lottery Commission
Post Office Box 3238
Little Rock, Arkansas 72203-3238
Dear Mr. Woosley:
You asked my opinion whether the Arkansas Lottery Commission is exempt from
a state travel regulation and, if not, whether it should seek the return of money it
paid its employees over what the regulation permits.
The regulation provides that state employees may be reimbursed $0.42 a mile for
using their own cars for state business travel. After January 15, 2014, the
Commission reimbursed its employees $0.56 a mile.
RESPONSE
In my opinion, the Commission was subject to the regulation. I respectfully
decline to state an opinion on your second question.
DISCUSSION
A statute requires the state's Chief Fiscal Officer to "promulgate . . . regulations
with respect to travel and travel allowances . . . for all officers and employees of
the state government. . . ." The law generally exempts constitutional and elective
officials, their employees, and official state guests, but does not expressly exempt
anyone else.
The CFO's regulations apply on their face to "all officers and employees of state
government" except those, mentioned above, who are exempt by law.
It is not clear precisely how the Commission might have been exempt. It is true
that a statute exempted the Commission from certain laws, including several that
make state agencies subject in certain respects to the authority of the Department
of Finance and Administration. But the law relating to travel regulations was not
among those; and express Commission exemption from some laws giving DF&A
authority over state agencies does not, in my view, imply the Commission was
exempt from similar laws notwithstanding the absence of express exemption.
At least two aspects of law suggest that the Commission was indeed subject to the
regulation.
First, Commission members were authorized to receive expense reimbursement
under a separate law applying generally to members of state boards and
commissions. The latter provides that expense reimbursement to state board
members "shall not exceed the rate established for state employees by state travel
regulations." It seems unlikely that the General Assembly intended only
Commission employees, not Commission members, to be exempt from the
reimbursement limit.
Second, both a law from which the Commission was expressly exempt and the
law providing for travel regulations originated in the same legislative act. That
the General Assembly expressly exempted the Commission from one provision of
Act 876 but not another suggests it did not intend such an exemption from the
other.
There is nothing at all in the travel regulations themselves implying that the CFO
intended to exempt the Commission.
I conclude that the Commission was subject to the travel regulation at issue.
The second question you have raised, whether the Commission should seek
return of money it paid, requires the giving of legal advice based on particular
factual circumstances, and as such falls outside the ordinary scope of an official
opinion from this office. Even were the Commission still in existence, deciding
whether to make any particular claim may involve factors other than simply the
claim's legal validity. Prospective defendants' circumstances will differ, as may
their potential defenses. The opinions process is ill-suited to giving advice on such
matters. I consequently must respectfully decline to opine on your second
question.
Assistant Attorney General J.M. Barker prepared this opinion, which I approve.
Sincerely,
Attorney General
LR/JMB:cyh
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