Can an Arkansas county solid waste authority donate a building it bought with sales tax money to another local government entity?

Plain-English summary

The Hot Spring County Solid Waste Authority Board had bought an administration building with funds generated by a one-percent county sales tax voters approved in 1990. The Board was relocating and wanted to donate the old building, worth $70,000, to another county entity, specifically the Hot Spring County Election Commission. A state senator asked the AG whether the donation was allowed.

The AG gave a partial answer. As a general matter, an Arkansas solid waste authority has broad statutory authority to "own, acquire, construct, reconstruct, extend, equip, improve, operate, maintain, sell, lease, contract concerning, or otherwise deal in or dispose of" its property. The authority can take any action that is "necessary, convenient, or desirable" to carry out its statutory purpose.

But the AG could not say whether donating this particular building to a county election commission counted as a permissible disposition. That depended on fact-finding the AG could not do: whether the donation was actually necessary, convenient, or desirable for the SWA's solid-waste-disposal mission. The AG flagged that Article 12, section 5 of the Arkansas Constitution, which prohibits donations to private entities, might also apply depending on the facts. The opinion noted that retaining the building might be a financial drain on the SWA, but selling or leasing it could yield revenue, and these tradeoffs were properly weighed by the Board with local counsel.

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

The Joint County and Municipal Solid Waste Disposal Act, codified at Ark. Code Ann. § 14-233-101 et seq., creates solid waste districts ("sanitation authorities") as public bodies politic that can be composed of counties, cities, and suburban improvement districts.

Like other political subdivisions of the state, a solid waste authority is a creature of the legislature and has only the powers the legislature has given it. The AG cited a line of Arkansas cases for that proposition, including Stilley v. Henson, Quapaw Central Business Impr. Dist. v. Bond-Kinman, and Page v. Highway 10, Water Pipe Line Improvement District No. 1.

Among the powers the General Assembly granted to sanitation authorities are:

• § 14-233-107(3): maintain an office where it chooses;
• § 14-233-107(5): make and execute contracts and other instruments necessary or convenient in the exercise of authority;
• § 14-233-107(12): do any and all other acts necessary, convenient, or desirable to carry out the statutory purpose; and
• § 14-233-104(b)(1): own, acquire, sell, lease, contract concerning, or otherwise deal in or dispose of a "project."

A "project" under § 14-233-102(11)(A) is broadly defined as any real, personal, or mixed property that can be used or will be useful in controlling, collecting, storing, removing, handling, reducing, disposing of, treating, or otherwise dealing with solid waste, plus property useful in extracting energy from solid waste or in handling wastewater.

The Act expressly instructs that its provisions be liberally construed to effect the statutory purposes. § 14-233-103(c). The AG read this in conjunction with the "necessary, convenient, or desirable" clause to conclude that the Board could decide how to dispose of its property within the limits of its statutory purpose.

The AG also flagged that disposal of property may be constrained by Article 12, section 5 of the Arkansas Constitution, which prohibits the General Assembly from authorizing political subdivisions to make donations to private entities. The opinion noted that a donation to an election commission, a public entity, raises different constitutional questions than a donation to a private person.

Common questions

Did the AG say the SWA could donate the building?

Not exactly. The AG said the SWA's enabling statute is broad enough that a disposition (including a donation) is within its power, provided the disposition serves the statute's purposes. The AG declined to bless this specific donation because that would require evaluating facts like whether the building was actually surplus, what its market value would yield, and what alternatives were available.

What does "dispose of" mean here?

The AG borrowed from the New Oxford American Dictionary: "get rid of by throwing away or giving or selling to someone else." That definition is broad enough to include donations.

Does Article 12, section 5 bar this kind of donation?

It depends on the recipient. Article 12, section 5 prohibits donations to private entities. A county election commission is a public entity, so the same constitutional concern is not automatically triggered. But the AG raised the article as a general guardrail rather than ruling it out for the specific facts.

Who should make the final call?

The AG suggested the Board itself, working with local counsel, who is in the best position to weigh the financial tradeoffs (proceeds from a sale or lease versus carrying costs of holding the building) and any specific legal constraints.

Citations

• Ark. Code Ann. § 14-233-101 et seq. (Joint County and Municipal Solid Waste Disposal Act)
• Ark. Code Ann. § 14-233-102(11)(A), -102(12) (definitions of project and sanitation authority)
• Ark. Code Ann. § 14-233-103(c) (liberal construction)
• Ark. Code Ann. § 14-233-104(b)(1) (powers over property)
• Ark. Code Ann. § 14-233-107(3), (5), (12) (specific enumerated powers)
• Ark. Code Ann. § 14-233-108 (board composition)
• Ark. Code Ann. § 14-233-121(b) (dissolution and property vesting)
• Arkansas Constitution Article 12, Section 5 (prohibition on donations to private entities)
• Stilley v. Henson, 342 Ark. 346, 28 S.W.3d 274 (2000)
• Quapaw Central Business Impr. Dist. v. Bond-Kinman, Inc., 315 Ark. 703, 870 S.W.2d 390 (1994)
• Page v. Highway 10, Water Pipe Line Improvement District No. 1, 201 Ark. 512, 145 S.W.2d 344 (1940)
• Edwards v. State, 347 Ark. 364, 64 S.W.3d 706 (2002)
• Chism v. Phelps, 228 Ark. 936, 311 S.W.2d 297 (1958)
• Berry v. Sale, 184 Ark. 655, 43 S.W.2d 225 (1931)
• Weiss v. McFadden, 353 Ark. 868, 120 S.W.3d 545 (2003)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2015-096
November 30, 2015
The Honorable Alan Clark
State Senator
P. O. Box 211
Lonsdale, AR 72087
Dear Senator Clark:
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
I am writing in response to your request for an opinion regarding the disposition of a building acquired using funds generated by a one-percent (1%) sales tax. You relate the following background information for your particular question:

In 1990, the Hot Spring County Quorum Court passed Ordinance 9025 authorizing an election to pass a one-percent (1%) sales tax primarily to fund the cost of operating and maintaining the Hot Spring County Solid Waste Authority ("SWA"). The electors of Hot Spring County approved the one-percent (1%) sales tax, which remains in effect. The Hot Spring County Solid Waste Authority Board ("Board") purchased a building with funds generated by the tax. The Hot Spring County Solid Waste Authority will be moving to another building and would like to donate the former building, which is currently valued at $70,000.

Against these background facts, you ask:

Can the Board donate the former building to another entity, for example, the Hot Spring County Election Commission?

RESPONSE

I cannot definitively answer your question as it relates broadly to "another entity" without considering the specific factual context underpinning your question. Nor can I answer your question with respect to the named entity in your request, the Hot Spring County Election Commission, as it requires factual determinations that I am not authorized to make. But as a general matter, it is my opinion that the SWA has the statutory authority to take such actions, including disposal of its property, that are necessary, convenient, or desirable to carry out the SWA's statutory purpose.

DISCUSSION

The state statute under which the Hot Spring County Solid Waste Authority (SWA) was created, the Joint County and Municipal Solid Waste Disposal Act, Ark. Code Ann. § 14-233-101 et seq., expressly grants such solid waste districts certain powers. It is well established in Arkansas law that political subdivisions of the state, like a joint county and municipal solid waste district, an improvement district, or other similar entity, are creatures of the legislature and have only the powers bestowed upon them by statute. A statute is construed just as it reads, giving the words their ordinary and usually accepted meaning in common language. Each section of a statute is to be read in the light of every other section. If the statute is ambiguous, resort may be had to the object to be accomplished and the purpose to be served to aid in interpreting the statute.

Sanitation authorities, as they are referred to in the Act, may be composed of counties, cities, and suburban improvement districts, representatives of which comprise the authority's board of directors. The General Assembly has granted a sanitation authority broad powers as a public body politic to accomplish the statute's purposes. Among those powers are to "maintain an office at such places as it may determine;" to "make and execute contracts and other instruments necessary or convenient in the exercise of the ... authority" of the Act; and to do "any and all other acts ... necessary, convenient, or desirable" to carry out the statutory purpose.

With respect to issues of property, the primary power such a district has is to "own, acquire, construct, reconstruct, extend, equip, improve, operate, maintain, sell, lease, contract concerning, or otherwise deal in or dispose of a project." The Act defines a "project" as any real property, personal property, or mixed property of any kind that can be used or will be useful in controlling, collecting, storing, removing, handling, reducing, disposing of, treating, and otherwise dealing in and concerning solid waste, including without limitation, property that can be used or that will be useful in extracting, converting to steam, including the acquisition, handling, storage, and utilization of coal, lignite, or other fuel of any kind, or water that can be used or will be useful in converting solid waste to steam, and distributing the steam to users thereof, or otherwise separating and preparing solid waste for reuse, or that can be used or will be useful in generating electric energy by the use of solid waste as a source of generating power and distributing the electric energy to purchasers or users thereof in accordance with the general laws of the state; or in collecting, pumping, disposing of, treating, or otherwise dealing in wastewater, sludge, or treated effluent.

An office building used for the SWA's administration is not specifically listed among those things that constitute a "project" under the Act. But, it is not a stretch to see that such a facility "can be used" or would "be useful in" achieving the SWA's purpose. Considering a sanitation authority's broad powers under the Act, I believe it reasonably follows that the Board can decide how to dispose of its own property as long as the disposition comports with the overall statutory purpose.

The question then arises whether donating a building, even for an ostensible public purpose such as the county's Election Commission, is an act "necessary, convenient, or desirable to carry out the purposes and to exercise the powers granted to" the SWA by the Act. I am unable to answer this question, as it would require me to make determinations of fact that I am neither authorized nor equipped to undertake.

You stated in your request letter that the building is valued at $70,000. On the one hand, one would think that the proceeds from a fair-market sale or lease of the building would be beneficial to the SWA. On the other hand, it may be that the SWA would have to incur substantial costs before the building could be sold or let, or that retaining the building would otherwise constitute a continuing financial drain on the SWA. These determinations and decisions should be made by the Board, ideally with the advice of local counsel, who will be in a better position to evaluate the proposed donation.

Sincerely,
Attorney General