Can a county rural development authority in Arkansas own or operate a hospital?
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This page answers the general question as of 2019. Ezel answers yours: what it means for your facts, under current Arkansas law, with citations.
Plain-English summary
Representative DeAnn Vaught asked, on behalf of the Sevier County Judge, whether the Sevier County Rural Development Authority could acquire, own, or operate the DeQueen Medical Center, including holding a critical access hospital license. Before April 9, 2019, the answer would have been "no." On that date, Act 830 of 2019 took effect with an emergency clause and expanded what counts as a "rural development project" under Ark. Code Ann. § 14-188-103(7). The amended statute now includes the "acquisition, construction, operation, maintenance, and improvement of healthcare facilities," and a new subsection (9) was added defining "healthcare facilities."
The AG concluded the answer to Representative Vaught's question was "yes" because of Act 830.
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.
Common questions
Q: What is a Rural Development Authority?
A: A Rural Development Authority (RDA) is a public body created under Ark. Code Ann. § 14-188-101 et seq. The Rural Development Authority Act, originally enacted in 1963, lets counties form RDAs to fund and operate projects intended to address chronic unemployment, lack of economic development, and inadequate infrastructure in rural areas. The 2019 amendment was a major scope expansion.
Q: Why couldn't an RDA hold a hospital license before 2019?
A: The RDA Act's definition of "rural development project" did not list healthcare facilities. Ark. Code Ann. § 14-188-103(7) had a long list (recreational facilities, soil and water conservation, utility facilities, housing) but no explicit healthcare item. RDAs are creatures of statute, so they can only do what the statute authorizes.
Q: Did Act 830 say anything about how RDAs operate hospitals?
A: Not in detail. The 2019 amendment expanded the definition of an authorized project and added a new statutory definition of "healthcare facilities." The structural rules about RDA governance, bonded indebtedness, and compensation were not changed by Act 830.
Q: When did Act 830 take effect?
A: April 9, 2019. The act contained an emergency clause, which under Arkansas law lets a statute become effective on the Governor's signature rather than waiting the default 90 days after the legislative session adjourns.
Q: Did this opinion address whether the Sevier County RDA was properly formed?
A: No. The AG was answering a single question about statutory authority. Whether any specific RDA met the formation requirements of Ark. Code Ann. § 14-188-101 et seq. is a fact-bound question outside the scope of an AG opinion.
Background and statutory framework
The Rural Development Authority Act, Ark. Code Ann. §§ 14-188-101 et seq., was enacted in 1963 to address conditions the General Assembly identified as chronic in rural Arkansas: unemployment, underemployment, soil erosion, water management problems, and economic underdevelopment. Section 14-188-102(1) recites those legislative findings, and § 14-188-102(4) declares it in the public interest to commence rural development projects to alleviate those conditions.
Section 14-188-103 defines the terms used throughout the act. Subsection (7), the "rural development project" definition, originally enumerated recreational facilities, land acquisition for various agricultural and conservation purposes, road and utility construction, water management infrastructure, anti-pollution measures, and housing projects. Healthcare facilities were not listed.
Act 830 of 2019 amended § 14-188-103(7) to include the "acquisition, construction, operation, maintenance, and improvement of healthcare facilities" and added a new subsection (9) defining "healthcare facilities." Because Act 830 carried an emergency clause, it became law on the Governor's approval date of April 9, 2019, rather than on the standard post-session effective date.
Once "healthcare facilities" became a permitted project category, the AG's analysis was straightforward: an RDA may pursue any defined project, the new definition includes hospitals, and the statute does not separately exclude hospital ownership.
Citations
- Ark. Code Ann. §§ 14-188-101 et seq. (Rural Development Authority Act)
- Ark. Code Ann. § 14-188-102(1), (4) (legislative findings and intent)
- Ark. Code Ann. § 14-188-103 (definitions)
- Ark. Code Ann. § 14-188-103(7) (definition of "rural development project")
- Acts 2019, No. 1077, § 6 (the bill discussed in opinion 2019-032; Act 830 of 2019 is the operative bill here)
Source
Original opinion text
Opinion No. 2019-002
July 5, 2019
The Honorable DeAnn Vaught
State Representative
266 Dairy Road
Horatio, AR 71842-8904
Dear Representative Vaught:
This is in response to your request for an opinion, on behalf of Sevier County Judge Greg Ray, regarding the DeQueen Medical Center and Ark. Code Ann. §§ 14-188-101 et seq. In this regard, you have posed the following question:
Regarding and pursuant to [the above-referenced statute], may the Sevier County Rural Development Authority, duly authorized and organized under this statute, acquire, own, operate or possess a hospital or critical access hospital license?
RESPONSE
In light of the passage of Act 830 of 2019 during the 92nd General Assembly, the answer to your question is "yes."
DISCUSSION
The Rural Development Authority Act (the act) was enacted in 1963. The act authorized rural development authorities (RDAs) and public funding of RDAs for projects in order to revitalize economically struggling rural areas in the state. In passing the act, the General Assembly declared that:
Many rural areas of Arkansas suffer from chronic unemployment and underemployment, lack of economic development, and patterns of land use which contribute to soil erosion, undue depletion of soil fertility resulting in inadequate income to support the farm family, and inadequate control of surface waters for flood prevention or drainage and for the maximum conservation and multiple utilization of water resources[.]
In light of this finding, the legislature further declared:
It is in the public interest that such rural development projects be commenced as soon as possible in order to alleviate these conditions of chronic unemployment, underemployment, and economic underdevelopment of rural areas….
Although the act has a number of sections, mostly dealing with the RDAs' organization, duties, and powers (such as, to name one example, the ability to incur bonded indebtedness), the answer to your question can be found in reviewing the act's definitional section. Specifically, we must look at the definition of a "rural development project" (also referred to in the act as a "development project" or simply a "project").
Prior to the enactment of Act 830 of 2019, section 14-188-103(7) defined a "rural development project" as "works or undertakings" that include:
- Developing recreational facilities;
- Acquiring submarginal or low-yielding land in order to convert it to conservation, grazing, forestry, fish and wildlife propagation, or recreation or desirable long-range economic uses; or acquiring land suitable for cultivation that could either be (1) consolidated with other similar tracts to establish adequate farming units or (2) consolidated with land devoted to uses other than crop production; or acquiring suitable consolidated farming land that could be divided to multiple owners (upon the death or retirement of the original owner) for farming; or otherwise acquiring other land that could be used for soil and water conservation, flood prevention, watershed protection, drainage, water storage and use, anti-pollution or sanitation uses and other public services or facilities, or necessary rights-of-way and access roads; or
- Building or improving utility facilities, roads, parks, conservation practices and measures, flood control and drainage structures and facilities, dams, wells, and reservoirs, pipelines, waterworks, and other devices for the development, storage, and utilization of water for agricultural, domestic, industrial, and community purposes, the development or improvement of sanitation measures, including sewage and sewage disposal facilities and anti-pollution measures, and the construction, operation, maintenance, and repair of any housing project.
Act 830, however, expanded the definition of a "rural development project" under section 14-188-103(7) specifically to include the "acquisition, construction, operation, maintenance, and improvement of healthcare facilities." Furthermore, Act 830 added a new subdivision (9) to section 14-188-103 to define "healthcare facilities."
It is, therefore, my opinion that the enactment of Act 830 of 2019 means the answer to your question is "yes."
Sincerely,
LESLIE RUTLEDGE
Attorney General
(Act 830 contained an emergency clause, meaning the act went into effect upon the Governor's approval on April 9, 2019.)
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