Can an Arkansas suburban improvement district issue building permits, enforce zoning, or fight nuisances like a city or county can?

Plain-English summary

State Senator Bill Sample, whose district included Hot Springs Village, asked whether a suburban improvement district (SID) could promulgate rules, impose penalties, take legal action, or otherwise officially regulate (a) residential or commercial building permits, (b) structural inspections, (c) nuisance abatement (trash, property appearance, improper vehicle storage), and (d) planning and zoning. He also asked whether SID funds could be spent on those activities.

Attorney General Leslie Rutledge said no on both counts. She reaffirmed and incorporated her predecessor's Opinion No. 2005-132 (issued by Mike Beebe) and concluded that the relevant law had not materially changed. The conclusion rested on a clean doctrinal split: SIDs are not municipal corporations. They are taxing-and-improvement districts with strictly delegated powers. They lack the "police power" that allows cities and counties to regulate health, safety, building standards, nuisance, and zoning. Without that base of authority, neither the rule-making nor the enforcement nor the spending was permissible.

Currency note

This opinion was issued in 2019. 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.

The Hot Springs Village SID has been the focus of legislative and litigation attention multiple times since 2019. Subchapter 2 of chapter 92 of title 14 has been amended periodically, and the Arkansas General Assembly may have expanded specific SID powers in particular categories (for example, nuisance abatement related to facilities the SID itself maintains). Anyone relying on this opinion's broad "no police power" rule should verify the current text of §§ 14-92-201 through -240 and check for any newer Arkansas Supreme Court guidance.

Historical context

What the SID wanted to do, and why the AG said it could not (as of 2019)

Hot Springs Village and other large SIDs sometimes look municipal in character. They have boards, they collect assessments, they maintain roads and facilities, and residents experience them as the local governing body. But under Arkansas law as the AG described it, that resemblance is not enough.

The 2005 Beebe opinion (incorporated into this 2019 reaffirmation) walked through the constitutional and statutory geography:

SIDs are taxing districts, not municipal corporations. Quoting Quapaw Central Business Improvement District v. Bond-Kinman, Inc., 315 Ark. 703, 706, 870 S.W.2d 390 (1994):

Improvement districts are agents of the state and derive their limited powers and duties of a public nature by legislative delegation through the taxing power of the state, and "constitute a separate and distinct species of taxing districts as contradistinguished from counties, municipal corporations and school districts."

SIDs are "inferior" to municipal corporations. Per Memphis Trust Co. v. St. Francis Levee Dist., 69 Ark. 284, 286 (1901), and Nakdimen v. Bridge District, 115 Ark. 119, 121 (1914), improvement districts "lack the broad legislative, judicial, and political powers that are essential to administering local government."

Police power is the missing ingredient. Police power, the sovereign right to secure public health and safety, is codified for cities at Ark. Code Ann. § 14-55-102 and supplemented by specific planning-and-zoning authority at § 14-56-401 et seq. Counties get parallel authority under §§ 14-14-801 (peace and order, freedom from dangerous activities), 14-14-802(b)(2)(B)(iv), 14-14-807(4), 14-17-203, and 14-17-209. SIDs have none of those.

SID enabling statutes do not confer police power. Subchapter 2 of chapter 92 of title 14, §§ 14-92-201 through 14-92-240, gives SIDs broad authority to "preserve, operate and maintain their improvements and facilities." See §§ 14-92-210, -220, and -239. But, per Page v. Highway 10, Water Pipe Line Improvement District No. 1, 201 Ark. 512, 515, 145 S.W.2d 344 (1940), an improvement district can exercise only those powers "authorized by statute" or "necessarily or fairly implied" from express grants. The AG concluded that the gap between "operate and maintain your improvements" and "regulate your residents' building, zoning, and nuisance behavior" is too wide to be implied.

The audience the AG was writing for

This opinion lands hardest on residents of large SIDs that function semi-governmentally. In a SID like Hot Springs Village (specifically referenced by Senator Sample's district), residents may want the district to enforce building codes or stop nuisance behavior. Under the AG's reading, the district board could not adopt enforceable rules, impose penalties, or sue to enforce. Those tools belong to the county or to a city.

What the AG did not say

The AG did not say a SID is powerless. SIDs may, under § 14-92-219 (Acts 2005, No. 927), provide waterworks, sewage systems, solid-waste management, streets and roads, recreational facilities, sidewalks, gas pipelines, telephone lines, rural fire departments, hospitals and ambulance services, and libraries. The AG's "no" was specifically about police-power activities (rules-with-penalties, building-permit issuance, nuisance abatement, and zoning), not about improvement-district function generally.

What private deed restrictions can still do

Many SIDs have associated property owners' associations (POAs) with deed-based covenants. The AG opinion did not address POA enforcement of deed restrictions. Restrictive covenants are private contractual rights enforceable by the POA or by individual property owners through ordinary civil litigation. They do not depend on the SID having police power.

Common questions

Q: Why can't a SID issue building permits if the residents want it to?
A: According to the AG, because the legislature did not give SIDs the police power that supports building-permit regimes. The Arkansas Supreme Court has repeatedly drawn a sharp doctrinal line between municipal corporations (which have plenary police power under § 14-55-102) and improvement districts (which exercise only the powers explicitly delegated). Without an explicit grant of building-permit authority in §§ 14-92-201 through -240, the AG read the SID as without that tool.

Q: Can a SID at least sue residents for trash or unsightly property?
A: Per the AG, no, not as a regulatory matter. The SID does not have authority to define a nuisance, set penalties, or sue to enforce. Residents who want nuisance abatement would have to look to the county under § 14-14-801 or, if the property is inside a city, to the city.

Q: What about zoning?
A: The AG concluded SIDs have no general zoning authority. Counties have planning and zoning power under §§ 14-14-802(b)(2)(B)(iv), 14-14-807(4), 14-17-203, and 14-17-209. Cities have it under § 14-56-401 et seq. SIDs have neither.

Q: Could the SID spend its assessment money on hiring a code-enforcement officer?
A: Per the AG, no. Even if the SID had the cash, it would lack the legal authority to do the underlying activity, so spending district funds on it would not be a proper district purpose. The AG explicitly answered "no" to the spending question.

Q: Does this mean the SID is powerless?
A: No. SIDs have broad authority to maintain the facilities they were formed to provide: water, sewer, roads, recreation, libraries, fire service, and so on (per § 14-92-219). What they do not have is the police power that lets cities and counties regulate residents' behavior.

Q: What about deed restrictions in places like Hot Springs Village?
A: The opinion did not address private covenants. Deed restrictions and POA rules are creatures of private contract; they are typically enforced by the POA or by individual lot owners in civil court, not by the SID.

Background and statutory framework

Arkansas suburban improvement districts are organized under subchapter 2 of chapter 92 of title 14, specifically Ark. Code Ann. §§ 14-92-201 through 14-92-240. The enabling statutes give SIDs the power to provide and maintain a range of physical improvements, listed in § 14-92-219:

Such districts may be organized to provide waterworks systems, sewage systems, solid waste management system, streets and roads, recreational facilities, sidewalks, gas pipelines, telephone lines, rural fire departments, hospitals and ambulance services and libraries.

The general operational and maintenance authority is found in §§ 14-92-210, -220, and -239.

What the SID statutes do not include is any analogue to the city police-power statute, Ark. Code Ann. § 14-55-102, which states:

Municipal corporations shall have power to make and publish bylaws and ordinances, not inconsistent with the laws of this state, which, as to them, shall seem necessary to provide for the safety, preserve the health, promote the prosperity, and improve the morals, order, comfort, and convenience of such corporations and the inhabitants thereof.

Cities also have specific planning-and-zoning authority under Ark. Code Ann. § 14-56-401 et seq. Counties have parallel police and planning-and-zoning authority under §§ 14-14-801, 14-14-802(b)(2)(B)(iv), 14-14-807(4), 14-17-203, and 14-17-209.

The Arkansas Supreme Court has stated repeatedly that improvement districts are taxing creatures only and lack the legislative, judicial, and political powers of municipal corporations. See Quapaw Central Business Improvement District v. Bond-Kinman, Inc., 315 Ark. 703, 870 S.W.2d 390 (1994); Memphis Trust Co. v. St. Francis Levee Dist., 69 Ark. 284, 62 S.W. 902 (1901); Nakdimen v. Bridge District, 115 Ark. 119, 172 S.W. 272 (1914). The basic rule on implied powers is in Page v. Highway 10, Water Pipe Line Improvement District No. 1, 201 Ark. 512, 145 S.W.2d 344 (1940): an improvement district has only those powers expressly granted by statute or "necessarily or fairly implied" from express grants.

The AG's 2018-144 opinion was a one-page reaffirmation that attached and incorporated the 2005-132 opinion. Beebe's 2005 analysis remained the operative reasoning in 2019.

Citations and references

Statutes:

• Ark. Code Ann. §§ 14-92-201 to -240 (suburban improvement districts)
• Ark. Code Ann. § 14-92-210 (district powers, generally)
• Ark. Code Ann. § 14-92-219 (permitted improvements)
• Ark. Code Ann. § 14-92-220 (district powers, operations)
• Ark. Code Ann. § 14-92-239 (district powers, maintenance)
• Ark. Code Ann. § 14-55-102 (municipal police power)
• Ark. Code Ann. § 14-56-401 et seq. (municipal planning and zoning)
• Ark. Code Ann. § 14-14-801 (county powers, peace and order)
• Ark. Code Ann. § 14-14-802(b)(2)(B)(iv), 14-14-807(4) (county planning)
• Ark. Code Ann. §§ 14-17-203, 14-17-209 (county zoning)

Cases:

• Quapaw Central Business Improvement District v. Bond-Kinman, Inc., 315 Ark. 703, 870 S.W.2d 390 (1994), Ark. Supreme Court, improvement districts as separate taxing species
• Memphis Trust Co. v. St. Francis Levee Dist., 69 Ark. 284, 62 S.W. 902 (1901), Ark. Supreme Court, improvement districts inferior to municipal corporations
• Nakdimen v. Bridge District, 115 Ark. 119, 172 S.W. 272 (1914), Ark. Supreme Court, improvement districts lack municipal scope
• Page v. Highway 10, Water Pipe Line Improvement District No. 1, 201 Ark. 512, 145 S.W.2d 344 (1940), Ark. Supreme Court, only statutorily authorized powers
• Smith v. City of Arkadelphia, 336 Ark. 42, 984 S.W.2d 392 (1999), Ark. Supreme Court, municipal police power
• Phillips v. Town of Oak Grove, 333 Ark. 183, 968 S.W.2d 600 (1998), Ark. Supreme Court, plenary municipal police power
• Osborne v. City of Camden, 301 Ark. 420, 784 S.W.2d 596 (1990), Ark. Supreme Court, municipal zoning authority

Related AG opinions:

• Op. Att'y Gen. 2005-132 (Beebe), reaffirmed and incorporated by reference
• Op. Att'y Gen. 2001-179 (operational authority of SIDs)

Source

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

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

Opinion No. 2018-144
April 2, 2019

The Honorable Bill Sample
State Senator
2340 North Highway 7
Hot Springs Village, AR 71909

Dear Senator Sample:

This is in response to your request for an opinion on the following questions:

1) Does a suburban improvement district have the authority to promulgate rules and regulations, impose penalties, enter into litigation or otherwise take official action with respect to:
a. residential or commercial building permits;
b. inspection of residential and commercial structures for the purpose of ascertaining whether building standards have been met;
c. eliminating or otherwise acting against residential or commercial nuisance, such as trash, appearance of property or improper storage of vehicles;
d. development or enforcement of community standards for planning and/or zoning?

2) Can funds collected to accomplish the regular business of a suburban improvement district be legally expended for any of these purposes?

RESPONSE

The answer to both questions is "no."

Please note that I have enclosed a copy of Attorney General Opinion 2005-132, which was issued by one of my predecessors in response to these same questions. I concur with this opinion. According to my review, the relevant law on the subject has not changed materially. I will not repeat the opinion herein, but instead refer you to the enclosure for the analysis and conclusions.

Sincerely,

Leslie Rutledge
Attorney General

Enclosure: Opinion No. 2005-132

Enclosure: Opinion No. 2005-132 (Beebe), August 22, 2005

The Honorable Randy Laverty
State Senator
Post Office Box 303
Jasper, AR 72641-0303

Dear Senator Laverty:

I am writing in response to your request for my opinion concerning the authority granted to suburban improvement districts. You have asked:

1. Does a suburban improvement district have the authority to promulgate rules and regulations, impose penalties, enter into litigation or otherwise take official action with respect to: Residential or commercial building permits; Inspection of residential and commercial structures for the purpose of ascertaining whether building standards have been met; Eliminating or otherwise acting against residential or commercial nuisance, such as trash, appearance of property or improper storage of vehicles; Development or enforcement of community standards for planning and/or zoning[?]

2. Can funds collected to accomplish the regular business of a suburban improvement district be legally expended for any of these purposes?

RESPONSE

It is my opinion that the answer to both of these questions is generally "no" regarding rules and regulations and penalties in connection with the matters enumerated under your first question. Similarly, with respect to "litigation" or other "official action," the answer to both questions is generally "no" in my opinion as regards litigation or other action to enforce any such rules and regulations or penalties purportedly promulgated or imposed by a suburban improvement district.

These conclusions are compelled, in my opinion, by the fact that a suburban improvement district lacks the so-called "police powers" that would enable it to adopt rules and regulations, set penalties, institute litigation, and take other official action with respect to building permits and inspections, nuisance abatement, and planning and zoning.

The Arkansas Supreme Court has stated the following in addressing the status of improvement districts:

Improvement districts are agents of the state and derive their limited powers and duties of a public nature by legislative delegation through the taxing power of the state, and "constitute a separate and distinct species of taxing districts as contradistinguished from counties, municipal corporations and school districts."

Quapaw Central Business Improvement District v. Bond-Kinman, Inc., 315 Ark. 703, 706, 870 S.W.2d 390 (1994) (citation omitted).

The court has further described improvement districts as "inferior" to "municipal corporations" because they "lack the broad legislative, judicial, and political powers that are essential to administering local government." Memphis Trust Co. v. St. Francis Levee Dist., 69 Ark. 284, 286, 62 S.W. 902 (1901). See also Nakdimen v. Bridge District, 115 Ark. 119, 121, 172 S.W. 272 (1914) (stating that an improvement district is not a municipality and its powers cannot be likened to those of municipal corporations).

It is my opinion that this distinction between improvement districts and municipal corporations is determinative for purposes of your questions. The matters proposed under your first question for action by a suburban improvement district involve the exercise of the government's sovereign right to secure the public health and safety, often referred to as the "police power." See, e.g., Smith v. City of Arkadelphia, 336 Ark. 42, 46-47, 984 S.W.2d 392 (1999); Phillips v. Town of Oak Grove, 333 Ark. 183, 189, 968 S.W.2d 600 (1998). The police power of cities is founded, generally, upon Ark. Code Ann. § 14-55-102, which provides:

Municipal corporations shall have power to make and publish bylaws and ordinances, not inconsistent with the laws of this state, which, as to them, shall seem necessary to provide for the safety, preserve the health, promote the prosperity, and improve the morals, order, comfort, and convenience of such corporations and the inhabitants thereof.

Additionally, a city has specific planning and zoning authority pursuant to Ark. Code Ann. § 14-56-401 et seq.

Counties are similarly authorized by statute to "[p]reserve peace and order and secure freedom from dangerous or noxious activities." Ark. Code Ann. § 14-14-801(3). Additionally, they may initiate their own planning and zoning laws. See Ark. Code Ann. §§ 14-14-802(b)(2)(B)(iv) and -807(4), and 14-17-203(f) and -209.

Unlike cities and counties, however, suburban improvement districts have no general police powers. Such powers are conferred solely by state enabling legislation. Cf. Osborne v. City of Camden, 301 Ark. 420, 421, 784 S.W.2d 596 (1990) (regarding municipal zoning authority). The body of the law under which a suburban improvement district may be organized (Ark. Code Ann. §§ 14-92-201 to -240) includes no provision similar to those cited above giving cities and counties the power to secure the health and safety of their residents. Nor is there any specific grant of authority to engage in planning and zoning. It is well-established, moreover, that an improvement district's powers are limited to those that are statutorily authorized:

This court has repeatedly held that an improvement district can exercise only such powers as it is authorized by statute to exercise; that is, those necessarily or fairly implied, or incident to the powers expressly granted.

Page v. Highway 10, Water Pipe Line Improvement District No. 1, 201 Ark. 512, 515, 145 S.W.2d 344 (1940).

I recognize in this regard that suburban improvement districts have been given broad authority to preserve, operate and maintain their improvements and facilities. See Ark. Code Ann. §§ 14-92-210, -220, and -239. See also generally Op. Att'y Gen. 2001-179. I believe it is clear, however, that their powers are not so extensive as to include those necessary to regulate in the areas you have identified. To conclude otherwise would, in essence, liken a suburban improvement district's powers to those of a city or county, contrary to the judicially recognized distinction between these entities.

In conclusion, therefore, because there is no statutory foundation for a suburban improvement district's exercise of general police power or specific planning and/or zoning authority, the answer to both of your questions is "no" in my opinion.

Sincerely,

Mike Beebe
Attorney General