Does an Arkansas city violate the constitutional 'lending of credit' clause when it abates a nuisance, files a lien, and waits years to collect?

Plain-English summary

Senator Eddie Joe Williams asked whether Article 12 § 5 of the Arkansas Constitution (the "lending of credit" clause) was triggered when a city used its police power to clean up overgrown weed lots, hired a lawn company, filed a statutory lien against the property under Ark. Code Ann. § 14-54-901 et seq., and then waited up to three years to actually collect.

Attorney General Leslie Rutledge concluded that no conflict existed. Article 12 § 5 prohibits any "county, city, town or other municipal corporation" from "loan[ing] its credit to" any private entity. The Arkansas Supreme Court has read that clause as a limit on municipal debt incurrence, not on every transaction in which a city advances services and bills later. The grass-cutting statute is the latter. The Court in Tucker v. Holt held that § 14-54-903 "authorizes the imposition of a lien in order for a municipality to recover a fee for the cost of providing services that the property owner refuses to perform." The city is not assuming a financial obligation. The owner is, by failing to comply with the order to cut, mow, or remove the nuisance.

The three-year collection window therefore does not create indebtedness on the city's side. The lien is a remedy, not a loan. Once filed, the city can either foreclose in circuit court within ten years or certify the lien to the county tax collector for collection as a tax delinquency.

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.

Common questions

Q: What is a "grass-cutting lien"?
A: It is a statutory municipal lien created by Ark. Code Ann. § 14-54-903. After a city orders a property owner under § 14-54-901 to cut weeds, remove garbage, drain stagnant water, or otherwise abate a nuisance, and the owner fails to act within seven days, the city can do the work itself and assess the cost (plus administrative and collection costs) against the owner. The unpaid charges become a lien on the property.

Q: Does Article 12 § 5 prohibit cities from spending money on private property at all? A: No. The clause prohibits "loan[ing] its credit to" or "obtain[ing] or appropriat[ing] money for" private entities. The Arkansas Supreme Court has interpreted this as a debt-incurrence restriction. Ordinary municipal services (police, fire, code enforcement, abatement of nuisances) are not loans of credit. The city is exercising its police power for the public welfare, even when the work happens on private property.

Q: Why doesn't the three-year collection delay create credit? A: Because the city is not borrowing or obligating itself. It is waiting for payment of a fee owed to it. The cash flowed out (paying the lawn company) and is being recovered. The legal relationship is creditor-debtor, with the property owner as the debtor and the city as the creditor. Article 12 § 5 is concerned with the city as debtor, not as creditor.

Q: How does the city actually collect the lien? A: Two routes. The city can sue to foreclose in circuit court at any time within ten years. Alternatively, the city can certify the lien to the county tax collector, who then collects the amount due as a delinquent property tax. The Arkansas Court of Appeals confirmed the tax-collector route in Taylor v. City of Fort Smith (2014).

Q: What costs are included in the lien?
A: All costs of the abatement work plus "all administrative and collection costs." The lien must be filed within 120 days after the city completes the cleanup work.

Q: What is the historical purpose of Article 12 § 5? A: The Arkansas Supreme Court explained in Bank of Commerce v. Huddleston (1927) that the clause was adopted to settle a 19th-century controversy about whether municipalities could subscribe for or lend their credit to railroad companies. The framers wanted to prevent cities from "engaging in enterprises foreign to the purpose for which they were organized and assuming liabilities not within the compass of the usual and necessary powers of cities and towns." A grass-cutting lien is a long way from a railroad bond.

Background and statutory framework

Arkansas's nuisance-abatement framework gives cities a self-help remedy. Section 14-54-901 enumerates the conditions a city can order owners to fix: overgrown weeds, garbage, debris, stagnant water, and similar health hazards. Section 14-54-903 authorizes the city to do the work itself if the owner does not comply within seven days, charge the cost, and impose a lien. Section 14-54-904 provides for enforcement either through circuit-court foreclosure or by certification to the county tax collector.

Article 12 § 5's "lending of credit" clause has been the subject of relatively few Arkansas cases, but the leading case (Bank of Commerce v. Huddleston) frames the clause as a limit on municipal debt for private benefit. The Arkansas Supreme Court has confirmed in Tucker v. Holt that the grass-cutting lien is a fee-for-services remedy, not a credit transaction. The AG's analysis here follows that line directly.

Citations and references

Constitution and statutes:

• Ark. Const. art. 12 § 5
• Ark. Code Ann. § 14-54-901 (weed and nuisance ordinance authority)
• Ark. Code Ann. § 14-54-903 (city abatement, costs, and lien)
• Ark. Code Ann. § 14-54-904 (foreclosure or tax-collector enforcement)
• Ark. Code Ann. § 14-55-102 (general welfare clause)

Cases:

• City of Fort Smith v. Van Zandt, 197 Ark. 91, 122 S.W.2d 187 (1938) (Ark. Supreme Court, general welfare clause)
• Tucker v. Holt, 343 Ark. 216, 33 S.W.3d 110 (2000) (Ark. Supreme Court, grass-cutting lien is fee for services)
• Bank of Commerce v. Huddleston, 172 Ark. 999, 291 S.W. 422 (1927) (Ark. Supreme Court, purpose of credit clause)
• Taylor v. City of Fort Smith, 2014 Ark. App. 450, 441 S.W.3d 36 (Arkansas Court of Appeals, tax-collector enforcement)

Original opinion text

Opinion No. 2017-005
April 5, 2017
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
The Honorable Eddie Joe Williams
State Senator
401 Cobblestone Drive
Cabot, AR 72023
Dear Senator Williams:
This is in response to your request for my opinion concerning a city's exercise of its police power to eliminate conditions that are in violation of a city ordinance. You state that the matter in question "concerns a potential conflict" between Article 12, Section 5 of the Arkansas Constitution, which forbids any municipal corporation to "loan its credit to" any individual, and Ark. Code Ann. § 14-55- 102, which authorizes municipalities to legislate under the police power. As background for your specific question, you state: A municipality has exercised its police power under Ark. Code Ann.
§ 14-55-102 to pass an ordinance on overgrown weed lots. Following the procedure of the ordinance, the municipality hires a lawn company to take care of the property and clean it up. The municipality then obtained a lien on the property for the outlay of municipal funds to manage the property by authority of Ark. Code Ann. § 14-54-901 et seq. It takes three (3) years for the municipality to receive the funds. You state that "[t]his arguably could be viewed as the municipality loaning/extending its credit to a private entity" and you ask, specifically: Is this municipal exercise of police power in conflict with the prohibition on a municipality extending credit? 323 CENTER STREET, SUITE 200 ' LITTLE ROCK, ARKANSAS 72201 TELEPHONE (501) 682-2007 · FAX (501) 682-8084 ARKANSASAG.GOV The Honorable Eddie Joe Williams State Senator Opinion No. 2017-005 Page2 RESPONSE The answer to your question is "no," in my opinion. I see no conflict between Ark. Const. art. 12, § 5 and Ark. Code Ann. §§ 14-54-901-904. DISCUSSION Section 14-55-102 defines the general scope of municipal police powers and is also popularly termed the "general welfare clause."1 More specific to your particular question, sections 14-54-901 through 904 authorize a municipality to enforce and collect a so-called "grass-cutting lien."2 Section 14-54-901 empowers incorporated towns and cities of the first and second class to order the owners of lots within their towns or cities to cut weeds on their property "after the town or city has provided therefore by an ordinance to that effect."3 Section 14-54-903 authorizes the city or town to correct the condition and charge the costs to the owner: If the owner or lienholder of any lot or other real property within an incorporated town or city shall neglect or refuse to remove, abate, or eliminate any condition as may be provided for under an ordinance passed by the city or town as provided for in § 14-54-901, after . having been given seven (7) days' notice in writing to do so, then the town or city is authorized to do whatever is necessary to correct the 1 CityofFortSmithv. Van Zandt, 197 Ark. 91, 94, 122S.W.2d187, 188 (1938). 2 See Tucker v. Holt, 343 Ark. 216, 222, 33 S.W.3d 110, 114 (2000) (discussed infra. 3 Ark. Code Ann. § 14-54-901 (Repl. 1998). This Code section provides in full: Incorporated towns and cities of the first and second class are empowered to order the owner of lots and other real property within their towns or cities to cut weeds; to remove garbage, rubbish, and other unsightly and unsanitary articles and things upon the property; and to eliminate, fill up, or remove stagnant pools of water or any other unsanitary thing, place, or condition which might become a breeding place for mosquitoes, flies, and germs harmful to the health of the community, after the town or city has provided therefor by an ordinance to that effect. The Honorable Eddie Joe Williams State Senator Opinion No. 2017-005 Page 3 condition and to charge the cost thereof to the owner of the lots or other real property. 4 Section 14-54-903 also provides the town or city with "a lien against the property for the costs."5 The lien can be enforced through a foreclosure action in circuit court at any time within ten years. 6 Alternatively, the city or town can certify the lien to the county tax collector, who will collect the amount due as a tax delinquency. 7 I see no conflict between this statutory scheme and Ark. Const. art. 12, § 5. Article 12, Section 5 forbids any municipal corporation from "loan[ing] its credit to any corporation, association, institution[,] or individual."8 There are few Arkansas cases addressing this particular prohibition, but the majority view of similar so-called "credit clauses" is that they limit or prohibit the government's authority to incur public debt.9 This view is reflected in the following passage from one of the few Arkansas Supreme Court cases discussing Article 12, Section S's credit clause: Municipal corporations may not become stockholders or furnish money or credit for the benefit of private enterprises. The object of the provision in the Constitution was to prevent municipal corporations from engaging in enterprises foreign to the purpose for 4 Ark. Code Ann. § 14-54-903(b) (Supp. 2015). The lien includes "all administrative and collection costs" and it must be filed within 120 days after the town or city completes the clean- up work. Id. at§ 14-54-903(c)(l) and (2). 5 Id. at§ 14-54-903(c)(l). The lien includes "all administrative and collection costs" and it must be filed within 120 days after the town or city completes the clean-up work. Id. at § 14-54- 903(c)(l) and (2). 6 Ark. Code Ann. § 14-54-904(a)(l) (Supp. 2015). 7 Id. at§ 14-54-904(a)(2); see Taylor v. City of Fort Smith, 2014 Ark. App. 450, 441 S.W.3d 36. 8 Article 12, section 5 states in full that "[n]o county, city, town or other municipal corporation shall become a stockholder in any company, association or corporation; or obtain or appropriate money for, or loan its credit to, any corporation, association, institution or individual." 9 See Op. Att'y Gen. 2012-150 (noting that "other courts have held that in order to have a loan of public credit, the public must be either directly or contingently liable to pay something to someone."). The Honorable Eddie Joe Williams State Senator Opinion No. 2017-005 Page 4 which they were organized and assuming liabilities not within the compass of the usual and necessary powers of cities and towns. The question of the power of municipal corporations to subscribe for or to loan its credit in the form of bonds in aid of railroad companies had been the subject of much litigation in other States, and the framers of the Constitution enacted the section in question for the purpose of settling the question. 10 In my opinion, Article 12, Section 5 's credit clause is not implicated when a city or town obtains a lien under sections 14-54-903 through 904 and either forecloses or collects the amount owing through the tax collector three years after the lien is filed. This lien "relates to a fee for services that is imposed in the government's exercise of its police power."11 As stated by the Arkansas Supreme Court, "Ark. Code Ann. § 14-54-903 authorizes the imposition of a lien in order for a municipality to recover a fee for the cost of providing services that the property owner refuses to perform."12 A city or town that avails itself of these procedures does not "loan its credit," in my opinion. The city or town does not assume any financial obligation or otherwise become indebted to anyone under sections 14-54- 903 through 904. To the contrary, the property owner who fails to comply with the grass-cutting order is liable to the city or town for the clean-up costs. Nor is any indebtedness on the part of the city or town created as a consequence of a three- year period for collection of the costs. It is therefore my opinion in response to your question that there is no conflict between the exercise of municipal police power under Ark. Code Ann. §§ 14-54- 901-904 and Article 12, Section S's prohibition on the lending of credit. 10 Bank of Commerce v. Huddleston, 172 Ark. 999, 1003-04, 291S.W.422, 424 (1927). 11 Tucker, 343 Ark. at 221, 33 S.W.3d at 114. 12 Id., at 222, 114.