How do property owners remove a board member from an Arkansas Municipal Property Owner's Improvement District, and what 'assessed value' counts toward the two-thirds petition requirement?

Plain-English summary

State Representative Julie Mayberry asked AG Leslie Rutledge a series of questions about MPOIDs 53 and 54 in Shannon Hills. The questions covered how the Municipal Property Owner's Improvement District Law interacts with the older general municipal-improvement-district law, how to remove an MPOID board member, what petition procedures govern removal, and how to determine "assessed value" for the two-thirds petition threshold.

The AG's answers establish a clean framework for MPOID administration:

• The MPOID law (§ 14-94-101 et seq.) is self-contained. The general municipal-improvement-district law (§ 14-88-101 et seq.) does not apply, even though Chapter 88 is titled "Municipal Improvement Districts Generally." Section 14-94-104 declares Chapter 94 "the sole authority necessary" for MPOID matters.
• Board removal goes only through § 14-94-108. No alternative removal statute applies. The procedure: owners of two-thirds in assessed value of district property file a removal petition with the city council, which then sets a hearing.
• Petition format is open. The statutes do not prescribe any particular petition format, signature-collection method, signature-window, or who may circulate. Digital petitions printed and physically signed are permitted. The petition needs only the signer's name, date, and signature (no parcel number, address, or DOB required by statute).
• Both owners must sign for co-owned parcels. A single signature does not count when a parcel is jointly owned.
• "Assessed value" means county assessment records at the time of city council action. Section 14-94-115's pre/post-improvement assessment scheme is unrelated; that statute concerns assessment of benefits/damages from improvements, not the petition threshold.

Currency note

This opinion was issued in 2017. 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.

Why the two improvement-district statutes don't overlap

Section 14-94-104 is direct: "[T]his chapter shall be the sole authority necessary to accomplish its purposes. To this end, it shall not be necessary to comply with the requirements of other laws including, without limitation, those pertaining to notice, consent, and like requirements in acting pursuant to this chapter to accomplish its purposes."

The chapter heading "Municipal Improvement Districts Generally" in Title 14, Chapter 88 might suggest Chapter 88 covers all municipal improvement districts. But Ark. Code Ann. § 1-2-115(a) explicitly says chapter headings are "for the purpose of convenient reference and orderly arrangement, and no implication, inference, or presumption of a legislative construction shall be drawn therefrom."

The AG also noted that an earlier opinion (2008-029) had once referred to an MPOID as a "municipal improvement district" in passing while reviewing an interlocal agreement. That stray reference was not a holding and does not change the analysis.

How a removal petition works mechanically

Section 14-94-108(a) is the operative text:

When the owners of two-thirds (2/3) in assessed value of the real property located within any district shall sign a petition stating that the petitioners believe it to be in the best interest of the district that the board, or any member thereof, be removed and shall file the petition with the governing body, the governing body shall set a date for a hearing on the petition.

Practical steps:

1. Property owners draft a petition stating that removal is in the district's best interest.
2. They collect signatures from owners representing two-thirds in assessed value of district property.
3. The petition is filed with the city council (or other governing body that authorized the district).
4. The council sets a hearing.
5. After the hearing, the council acts on the petition.

The "assessed value" threshold is measured at the time the council acts, not at petition-circulation time, applying the logic of Appleby Road Street Imp. Dist. v. Powell, 282 Ark. 398 (1984).

Why the AG read "assessed value" against county records

For petitions to form a district under § 14-88-207, the threshold is "a majority in assessed value of the property owners," and § 14-88-207(d) explicitly defines that as "the value placed upon the property as shown by the last county assessment on file in the county clerk's office."

Section 14-94-108's parallel two-thirds threshold uses similar language. The AG applied Stribling v. United States, 419 F.2d 1350 (8th Cir. 1969), which holds that statutes employing similar language and applying to cognate relationships may control by analogy when the statute at issue is unclear. The county assessment records are the natural reference point, given that:

• Other improvement-district statutes use the same definition.
• District 54 had never reassessed properties, so internal district valuation might not exist for many parcels.
• Subdivided parcels would have updated county valuations even if the district's records lagged.

Section 14-94-115's "before improvement" and "after improvement" assessments are a separate, district-internal valuation process used to calculate benefits and damages. That's irrelevant to determining whether two-thirds of property owners support removal.

Common questions

Why does this matter for the property owners in Shannon Hills? Because they were apparently considering or contesting a board removal effort. The AG's opinion confirms the procedure is the only route, and that the relevant value baseline is the county tax records (which simplifies the petition arithmetic).

Can a co-owner who can't reach the other co-owner work around the joint-signature rule? Not under the AG's reading. A co-owner who can't get the other co-owner's signature would have to find enough other property-owner signatures to clear the two-thirds threshold without that parcel.

What information must appear on the petition?
Per the AG, just the signer's name, date, and signature. No parcel number, address, or date of birth is required by statute. (City council practice may set internal validation procedures, but those wouldn't be statutorily mandated.)

Can someone outside the district circulate a petition? Yes. The statutes don't restrict who may collect signatures.

Is there a deadline once collection starts?
No. The statutes don't impose a signature-window time limit. Practical considerations (e.g., property ownership changes during a long collection period) might affect the math, but no deadline cuts off the petition.

Could the legislature override this opinion?
Yes. Many of the AG's "no" answers are based on statutory silence. The legislature could amend § 14-94-108 to add format requirements, time limits, or alternate removal procedures.

Background and statutory framework

MPOIDs are formed under Ark. Code Ann. § 14-94-101 et seq. by unanimous approval of district property owners. First Ark. Bank & Trust v. Gill Elrod Ragon Owen & Sherman, P.A., 2013 Ark. 159, confirms the formation procedure. Section 14-94-104's "sole authority" language is unusually direct and serves to insulate the MPOID framework from default municipal-improvement-district rules.

Section 14-94-115's pre/post-improvement assessment process is the mechanism for assessing benefits and damages to fund the improvement project. The assessed-value figures from § 14-94-115 govern who pays what for the improvement, not who can vote on board removal.

Citations

• Ark. Code Ann. § 1-2-115(a) (chapter headings have no legal effect)
• Ark. Code Ann. § 14-88-207 (formation petition for general municipal improvement districts; uses county assessment records)
• Ark. Code Ann. § 14-94-101 et seq. (MPOID law)
• Ark. Code Ann. § 14-94-102 (formation by unanimous owner approval)
• Ark. Code Ann. § 14-94-104 ("sole authority" provision)
• Ark. Code Ann. § 14-94-108 (board member removal procedure)
• Ark. Code Ann. § 14-94-115 (assessment of benefits/damages from improvement)
• First Ark. Bank & Trust v. Gill Elrod Ragon Owen & Sherman, P.A., 2013 Ark. 159, 427 S.W.3d 47
• MacSteel Div. of Quanex v. Arkansas Okla. Gas Corp., 363 Ark. 22, 210 S.W.3d 878 (2005)
• Stribling v. United States, 419 F.2d 1350 (8th Cir. 1969)
• Appleby Road Street Imp. Dist. v. Powell, 282 Ark. 398, 669 S.W.2d 3 (1984)
• Op. Att'y Gen. 2008-029 (passing reference to MPOID)

Source

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

Original opinion text

STATE OF ARKANSAS
ATTORNEY GENERAL
LESUE RUTLEDGE
Opinion No. 2016-113
January 4, 2017
The Honorable Julie Mayberry
State Representative
3 022 East Woodson Lateral Road
Hensley, AR 72065-9169
Dear Representative Mayberry:
This is in response to your request for my opinion on several questions concerning the Municipal Property Owner's Improvement District Law (Ark. Code Ann. § 14- 94-10 I et seq.). The background provided in your correspondence indicates that your request relates to Municipal Property Owner's Improvement Districts (MPOID) 53 and 54 located within the City of Shannon Hills, Arkansas. Your specific questions are as follows:

1. Do any subchapters of [the] "Municipal Improvement Districts
   Generally" law, codified at Ark. Code Ann. § 14-88-101 et seq., apply to [an] MPOID formed under [the] Municipal Property Owner's Improvement District Law, codified at Ark. Code Ann.
   § 14-94-101 et seq.? The subchapters of particular interest are § § 14-88-304, 14-88-305, and 14-88-401.
2. If a board member of [an] MPOID no longer owns property
   within the district or if a board member is in noncompliance with state law or local ordinance, are there any provisions under the Arkansas Code for property owners or the city council to act to remove that board member other than the procedure outlined in § 14-94-108?
3. Does the Arkansas Code give any requirements for the format or
   procedures used to collect the signatures required for the petition 323 CENTER STREET, SUITE 200 · LITTLE ROCK, ARKANSAS 72201 TELEPHONE (501) 682-2007 · FAX (501) 682-8084 ARKANSASAG.GOV The Honorable Julie Mayberry State Representative Opinion No. 2016-113 Page 2 to remove a member of the board as outlined within § 14-94- 108? a. Is any information about a property owner (i.e., parcel #, address, date of birth) required on the petition other than their name, date, and signature? b. Are there any restrictions for the time period allowed to collect signatures? c. Are there any restrictions for who can collect signatures? d. Can a petition be circulated in a digital format to be printed and signed by property owners? e. If a parcel of land has two owners, is a signature required from both owners or is a signature from only one owner sufficient?
4. How is the assessed value of real property located in the district
   determined for the 2/3 majority requirement of§ 14-94-108(a)? a. Is it the assessed value of real property before improvement or after improvement as outlined within § 14-94-115? b. District 54 only collects assessments from part of the real property within the district. District 54 has never reassessed the real property in the district. Since the District 54 was formed, several larger parcels with no collected assessments have been subdivided. How is the assessed value of those subdivided parcels determined since the district never assessed their value? RESPONSE It is my opinion that the answer to Question 1 is "no." I believe the Municipal Property Owner's Improvement District Law stands on its own, and that districts formed thereunder are subject to that body of law and not Ark. Code Ann. § 14- 88-101 et seq. The answer to Question 2 is also "no," in my opinion. The removal procedure is governed by Ark. Code Ann. § 14-94-108 and no other statute. With regard to Question 3, the applicable statutes do not prescribe any formatting or procedural requirements for a removal petition. It is therefore my opinion that the answer to each of the first three subparts of this question is "no" and the answer to the fourth, subpart (d), is "yes." As for subpart (e) of Question 3, it is my opinion that the signature of both owners is required. It is my opinion in response to Question 4 that the "assessed value" is determined by the value The Honorable Julie Mayberry State Representative Opinion No. 2016-113 Page 3 shown on the county assessment records at the time the governing body acts on the removal petition. DISCUSSION Question 1: Do any subchapters of /the] "Municipal Improvement Districts Generally" law, codified at Ark. Code Ann. § 14-88-101 et seq., apply to fan] MPOID formed under {the] Municipal Property Owner's Improvement District Law, codified at Ark. Code Ann. § 14-94-101 et seq.? The subchapters of particular interest are§§ 14-88-304, 14-88-305, and 14-88-401. In my opinion, Ark. Code Ann. § 14-88-101 et seq. does not apply to a district formed under the Municipal Property Owner's Improvement District Law (Ark. Code Ann.§ 14-94-101 et seq. (Repl. 1998 and Supp. 2015)).1 This latter body of law provides that it "is the sole authority necessary" to be complied with: The provisions of this chapter shall be liberally construed to accomplish the purposes of this chapter, and this chapter shall be the sole authority necessary to accomplish its purposes. To this end, it shall not be necessary to comply with the requirements of other laws including, without limitation, those pertaining to notice, consent, and like requirements in acting pursuant to this chapter to accomplish its purposes.2 It is clear from this directive that Arkansas Code Title 14, Chapter 94, is complete in itself. I believe it reasonably follows that an MPOID formed thereunder is distinct from a "municipal improvement district" formed under Ark. Code Ann. § 14-88-101 etseq.3 1 Pursuant to this law, a Municipal Property Owner's Improvement District (MPOID) may be formed by unanimous approval of owners of real property located in the territory to be included in the district. Ark. Code Ann. § 14-94-102 (Supp. 2015). See First Ark. Bank & Trust v. Gill Elrod Ragon Owen & Sherman, P.A., 2013 Ark. 159, 427 S.W.3d 47. 2 Ark. Code Ann. § 14-94-104 (Rep I. 1998) (emphasis added). 3 In presenting your questions, you have noted that Op. Att'y Gen. 2008-029 referred to an MPOID as a "municipal improvement district." But the reference was only in passing, by way of recognizing the Municipal Property Owner's Improvement District Law in the course of reviewing an interlocal agreement-a matter entirely unrelated to the question you have presented regarding the applicability of Ark. Code Ann. § 14-88-101 et seq. to an MPOID formed under The Honorable Julie Mayberry State Representative Opinion No. 2016-113 Page 4 Question 2: If a board member of [an] MPOID no longer owns property within the district or if a board member is in noncompliance with state law or local ordinance, are there any provisions under the Arkansas Code for property owners or the city council to act to remove that board member other than the procedure outlined in§ 14-94-108? Section 14-94-108 is the only statute, in my opinion, governing the removal of members of the board of commissioners of an MPOID. It provides for removal upon the petition of property owners, based upon the petitioners' belief that removal is "in the best interest of the district": When the owners of two-thirds (2/3) in assessed value of the real property located within any district shall sign a petition stating that the petitioners believe it to be in the best interest of the district that the board, or any member thereof, be removed and shall file the petition with the governing body, the governing body shall set a date for a hearing on the petition .... 4 My research has disclosed no other procedure for the removal of MPOID comm1ss1oners. Question 3: Does the Arkansas Code give any requirements for the format or procedures used to collect the signatures required for the petition to remove a member of the board as outlined within§ 14-94-108? Section 14-94-108 does not prescribe any particular format or signature collection procedure in connection with a removal petition. Accordingly, the answer to this question is "no," in my opinion. Ark. Code Ann. § 14-94-101 et seq. You have also reasoned that it follows from the word "generally" in Title 14, Chapter 88's chapter heading-"Municipal Improvement Districts Generally"-that some subchapters of Chapter 88 apply to MPOIDs. However, the descriptive heading of a chapter of the Code "is made for the purpose of convenient reference and orderly arrangement, and no implication, inference, or presumption of a legislative construction shall be drawn therefrom." Ark. Code Ann.§ 1-2-1 lS(a) (Rep!. 2008). 4 Ark. Code Ann. § 14-94-108(a) (Rep!. 1998). The Honorable Julie Mayberry State Representative Opinion No. 2016-113 Page 5 Question 3a: Is any information about a property owner (i.e., parcel#, address, date of birth) required on the petition other than their name, date, and signature? The answer to this question is "no," under Ark. Code Ann.§ 14-94-108. Question 3b: Are there any restrictions for the time period allowed to collect signatures? No. Question 3c: Are there any restrictions for who can collect signatures? No. Question 3d: Can a petition be circulated in a digital format to be printed and signed by property owners? Yes, given the absence of any prescribed format or signature collection procedure in connection with a removal petition, as noted in response to Question 3 above. Question 3e: If a parcel of land has two owners, is a signature required from both owners or is a signature from only one owner sufficient? In my opinion, a signature of one owner would not suffice under section 14-94- 108, which requires a hearing on a removal petition signed by "at least two-thirds (2/3) in assessed value of the real property owners in tlhe district."5 A co-owner of a parcel of land is a "property owner." I therefore conclude based on a plain reading of section 14-94-108 that the signature of both owners of a parcel is required for purposes of determining whether the requisite percentage has been obtained.6 Question 4: How is the assessed value of real property located in the district determined/or the 213 majority requirement of§ 14-94-JOB(a)? 5 Id. at§ 14-94-108(c) (emphasis added). 6 The first rule in considering the meaning of a statute is to construe it just as it reads, giving the words their ordinary meaning and usually accepted meaning in common language. MacSteel Div. of Quanex v. Arkansas Okla. Gas Corp., 363 Ark. 22, 210 S.W.3d 878 (2005). The Honorable Julie Mayberry State Representative Opinion No. 2016-113 Page 6 Question 4a: Is it the assessed value of real property be/ ore improvement or after improvement as outlined within§ 14-94-115? Question 4b: District 54 only collects assessments from part of the real property within the district. District 54 has never reassessed the real property in the district. Since the District 54 was for med, several larger parcels with no collected assessments have been subdivided. How is the assessed value of those subdivided parcels determined since the district never assessed their value? I have grouped these questions together because they appear to reflect an assumption that Ark. Code Ann. § 14-94-115 is relevant to determining the "assessed value of the real property" under Ark. Code Ann. § 14-94-1087 (regarding the removal of board members). In my opinion, that assumption is mistaken. Section 14-94-115 addresses the "assessment of benefits or damages" accruing to each piece of property in the district as a result of the improvement. 8 Under this statute, the person appointed as assessor by the district board is charged with determining the value of each parcel before and after the improvement. 9 The statute refers to these valuations as "Assessed Value of Real Property Prior to Improvement" and "Assessed Value of Real Property After Improvement."10 These references to "assessed value" may have generated the assumption that the assessment process under section 14-94-115 is relevant to the determination whether a removal petition under section 14-94-108 is signed by "the owners of two-thirds (2/3) in assessed value of the real property located within [the] district."11 But in my opinion, the two statutes are not related. Section 14-94-108 refers to "assessed value" in the singular, without reference to any improvement, whereas section 14-94-115 involves two assessments made in relation to the 7 Ark. Code Ann.§ 14-94-108(a) and (c). 8 Ark. Code Ann.§ 14-94-115(b)(2)(B) (Repl. 1998). 9 See id. at§ 14-94-115(a)(2) ("The assessor [appointed by the board] shall take an oath that he will well and truly assess all benefits that will accrue to the landowners of the district by reason of the improvement."). 10 Id. at§ 14-94-1 IS(b)(l). 11 Ark. Code Ann.§ 14-94-108(a). The Honorable Julie Mayberry State Representative Opinion No. 2016-113 Page 7 contemplated improvement. These two statutes clearly refer to different assessments. In my opinion, section 14-94-108 is properly interpreted to mean the assessed value as shown on the county assessment records. This interpretation is consistent with another statute that similarly provides for the formation of local improvement districts. Pursuant to Ark. Code Ann. § 14-88-207, a district may be formed upon petition signed by "a majority in assessed value of the property owners."12 This language is very similar to section 14-94-108's requirement of signatures of "at least two-thirds (2/3) in assessed value of the real property owners .... " There is no question under section 14-88-207 that this refers to the county assessment because the statute specifies that the majority in value requirement is based on "the value placed upon the property as shown by the last county assessment on file in the county clerk's office."1 Given the similarity in subject matter, and to the extent the interpretation of section 14-94-108 is in doubt, I believe a court faced with the question would say that section 14-94-108' s reference to "assessed value" also means the value shown on the county assessment records.14 Additionally, in my opinion, the "assessed value" as referenced in section 14-94- 108 is determined by the value shown on the county assessment records at the time the governing body acts on the removal petition.15 Sincerely, ~
   ~~
   Attorney General
   12 Ark. Code Ann. § 14-88-207(a)(l) (Repl. 1998).
   13 Id. at§ 14-88-207(d).
   14 See Stribling v. United States, 419 F.2d 1350, 1352-53 (8th Cir. 1969) ("[W]here the interpretation of a particular statute at issue is in doubt, the express language and legislative construction of another statute not strictly in pari materia but employing similar language and applying to similar persons, things, or cognate relationships may control by force of analogy" (citing, inter alia, III Sutherland, Statutes and Statutory Construction § 6102, at 159 (3d ed. 1943)). 15 Cf Appleby Road Street Imp. Dist. v. Powell, 282 Ark. 398, 669 S.W.2d 3 (1984) (reasoning that the question whether there was a majority of signers to form the district, as required by Ark. Code Ann. § 14-88-207, was determined at the time city council passed on the question because the district was to be established by proceedings before the council.").