Can Northwest Arkansas Community College use its local property tax millage to build and run a campus outside its taxing district?

Plain-English summary

Senator Kim Hendren asked, on behalf of Northwest Arkansas Community College (NWACC), whether the college could use property-tax millage collected from voters in Benton County (NWACC's "district") to build and operate an instructional center outside that district but within NWACC's assigned "service area" (Benton plus Washington Counties).

The AG said yes, with two important conditions:

1. The facility must be inside NWACC's service area. Amendment 52 to the Arkansas Constitution and its implementing legislation contemplate that community colleges serve "the postsecondary educational needs of [the] district and the state." Each college is assigned a service area by the State Community College Board, and that area can extend beyond the taxing district. Arkansas law explicitly recognizes "satellite campuses" outside a college's district but within its service area (Ark. Code Ann. § 6-53-103(9)).

2. The statutory restriction on satellite-campus millage does not apply to NWACC. Sections 6-53-403(h) and 6-53-404(e) prohibit a community college district from using its local millage tax for capital outlay or operating expenses of a satellite campus. But that prohibition is limited to community colleges that were created through conversion of a technical college or a two-year branch campus of a four-year institution. NWACC predates the 1991 Two-Year Postsecondary Education Reorganization Act and was established directly under Amendment 52. So the prohibition does not reach NWACC's millage.

The AG closed with a strong cautionary note: this kind of question is fact-intensive, and NWACC should consult its own counsel before committing millage funds to any specific project. The AG's role is to interpret state law, not to evaluate particular fact patterns.

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.

Background and statutory framework

Amendment 52. The constitutional source for Arkansas community colleges is Amendment 52 (1965), which authorizes the General Assembly to "provide for the establishment of districts for the purpose of providing community college instruction and technical training" and to "authorize the levy of a tax upon the taxable property in such districts" for facilities.

District vs. service area. The implementing legislation distinguishes two geographies:

• A community college "district" is "the geographic area ... participating in or intending to participate in the establishment and maintenance of a community college" (Ark. Code Ann. § 6-61-501(3)). The district votes to create the college and pays the millage.
• A community college "service area" is the geographic area assigned by the State Community College Board (the Arkansas Higher Education Coordinating Board) "containing all counties within the state" and designating which two-year institution is responsible for serving the area (§ 6-53-203(a)(2); § 6-53-103(10)(A)). Service areas can extend beyond district borders.

Satellite campuses. The statute defines a "satellite campus" as "an institution or off-campus facility of a community college located within a service area of a ... community college but not located within a community college district" (§ 6-53-103(9)). The very existence of this definition reflects the legislative expectation that some facilities will be outside the district.

The satellite-millage ban. Sections 6-53-403(h) and 6-53-404(e) say:

No millage tax of the community college district shall be used for capital outlay expense or operating expense of a satellite campus.

This applies to community college districts formed through the technical college or four-year-branch conversion processes set out in §§ 6-53-403 and -404. It does not apply to community college districts created directly under Amendment 52 and § 6-61-101 et seq.

NWACC's history. NWACC was established in 1989 under Amendment 52, by ballot measure of voters in portions of the Rogers and Bentonville School Districts in Benton County. Its current service area, set by the State Community College Board, includes both Benton and Washington counties.

The AG's reasoning

Plain meaning of Amendment 52. Amendment 52 contemplates the creation of taxing districts to finance community colleges "for the purpose of providing community college instruction and technical training." The college's "principal site" must be within the district. But neither Amendment 52 nor its implementing legislation imposes the same locational constraint on additional or satellite facilities.

Service area extends beyond the district. Section 6-61-501(2) defines a community college as "an educational institution ... offering a comprehensive program designed to serve the postsecondary educational needs of its district and the state." The "and the state" part captures the broader mission. Section 6-61-601(c)(2) requires a college's recommended budget to "be sufficient to provide an adequate comprehensive educational program [that] services the needs of the state and the community college's service area." The Code presumes the service area is what the college serves, not just the taxing district.

Broad property authority. Section 6-61-521(10) gives community college boards broad authority to "acquire, own, lease, use, and operate property, whether real, personal, or mixed, which is necessary for purposes of the community college." There is no geographic limit in this provision.

The satellite-millage ban is targeted, not general. The AG read § 6-53-403(h) carefully. The prohibition appears only in the chapter governing technical colleges' conversion to community colleges. NWACC was not created through conversion. Citing MacSteel Div. of Quanex v. Arkansas Okla. Gas Corp., 363 Ark. 22 (2005), the AG declined to read the prohibition into other provisions: courts "will not read into a statute a provision that simply was not included by the General Assembly."

The legislature knew how to restrict. When the General Assembly wanted to limit a college's use of local millage on out-of-district facilities, it did so explicitly. Its silence with respect to NWACC and similarly-situated districts is meaningful. Had the legislature intended a similar restriction, the AG observed, "it could have easily done so."

Caveat about facts. The AG closed by emphasizing that an opinion cannot evaluate every conceivable fact pattern. NWACC's counsel should weigh the specific project against: (1) the limit of the assigned service area, (2) the statutory authority cited, and (3) Amendment 52's underlying purpose of serving educational needs.

Common questions

What is the difference between a "district" and a "service area"?
The district is who pays the millage and originally voted to create the college. The service area is who the college is officially responsible for serving, as assigned by the state Higher Education Coordinating Board. The service area can be larger than the district.

Can NWACC build a campus in a county that is not in its assigned service area?
The AG did not directly answer that question. The answer in this opinion was tied to facilities within the service area. A facility outside the service area would raise different issues, including overlap with another college's territory.

Why does this matter to taxpayers?
Because Benton County voters approved millage to support NWACC. If those funds are spent on a Washington County campus that primarily serves Washington County students, Benton County voters effectively subsidize their neighboring county's higher-education infrastructure. The AG's opinion holds that the state legislature has authorized this arrangement (within service-area boundaries), but reasonable people may differ on whether it is wise policy.

What about the satellite-campus restriction?
It exists, but it applies only to community colleges formed through technical-college or branch-campus conversion. Two-year colleges established directly under Amendment 52 (like NWACC) are not subject to it.

Does the College Board need to approve the new facility?
The opinion does not address internal approval procedures. Generally, a community college's local board (under § 6-61-521) and the State Community College Board (under § 6-61-601 and § 6-53-203) both have roles in service-area planning and operations.

Source

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

Original opinion text

Opinion No. 2017-022
July 11, 2017

The Honorable Kim Hendren
State Representative
1501 Hwy. 72 Southeast
Gravette, AR 72736-9438

Dear Representative Hendren:

I am writing in response to your request, on behalf of Northwest Arkansas Community College (NWACC), for my opinion on the following questions:

Question 1: Can a state-operated public community college supported by a local property tax millage and state revenue use that local millage to construct and operate an instructional center outside its taxing district?

Question 2: If not, what legislation would the college need to enable it to use [its] local [tax] millage on an out of district project?

RESPONSE

In my opinion, the answer to your first question is generally "yes" as to NWACC, as long as the facility is located within NWACC's service area. Arkansas law plainly contemplates that a community college may locate additional facilities within its service area, but outside its district, in order to serve the educational needs of the state and its district. And there is no clear constitutional or statutory restriction or limitation that would prevent a community college such as NWACC from using its local millage funds to construct and operate such facilities. Accordingly, your second question is moot.

I must emphasize, however, that NWACC's legal counsel should be consulted when considering the proposed use of the community college's tax revenues. The question will depend to some degree on the particular surrounding facts and circumstances and it is difficult to reach any generally applicable conclusions that will fit every conceivable fact pattern. Requests for legal advice as to the best course of conduct regarding any particular use of NWACC's millage revenues should be directed to private counsel.

DISCUSSION

Question 1: Can a state-operated public community college supported by a local property-tax millage and state revenue use that local millage to construct and operate an instructional center outside its taxing district?

The General Assembly is authorized under Amendment 52 to the Arkansas Constitution to provide for the establishment of community college districts:

The General Assembly may by law provide for the establishment of districts for the purpose of providing community college instruction and technical training. The General Assembly shall prescribe the method of financing such community college and technical institutes, and may authorize the levy of a tax upon the taxable property in such districts for the acquisition, construction, reconstruction, repair, expansion, operation, and maintenance of facilities therefor.

Constitutional and statutory provisions are interpreted in the same manner. The intent of the people is ordinarily determined by reference to the plain meaning of the words used. When the language of a constitutional provision is plain and unambiguous, each word must be given its obvious and common meaning. Neither rules of construction nor rules of interpretation may be used to defeat the clear and certain meaning of a constitutional provision.

Amendment 52 contemplates the creation of taxing districts to finance community colleges and technical institutes "for the purpose of providing community college instruction and technical training." It is clear from Amendment 52 and its implementing legislation that a community college is established primarily to serve its district and that property in the district may be taxed in order to finance facilities for the college. I believe it is equally clear that the college must have its principal site within the district.

In my opinion, however, Amendment 52 and its implementing legislation do not place the same locational requirement upon additional facilities constructed for and operated by a community college. In fact, the General Assembly proposes a mandate for a community college to serve citizens beyond the borders of its established district, defining a "community college" as:

... [A]n educational institution established or to be established by one (1) or more counties or cities of this state offering a comprehensive program designed to serve the postsecondary educational needs of its district and the state....

Further evidence of a community college's directive and mission to serve those beyond the college proper is the fact that each college is assigned a "service area." A "service area" is defined as the "geographic area ... served by the institution located within its borders." A college's "service area" may extend outside the official borders of the community college "district." This is evidenced by the General Assembly's establishment and definition of a community college "satellite campus":

[A]n institution or off-campus facility of a community college located within a service area of a ... community college but not located within a community college district.

This definition plainly distinguishes between a college's "service area" and its "district," and reflects the fact that some areas served by a community college may be within the college's "service area," but not within the college's "district." The notion that a community college may serve an area beyond its "district" is further reinforced by the requirement that a community college's recommended budget for general operation must "be sufficient to provide an adequate comprehensive educational program [that] services the needs of the state and the community college's service area as determined by the [State Community College Board]."

It reasonably follows that the location of a facility in a college's "service area" does not necessitate the facility's simultaneous location in the college's "district." Community colleges can have additional facilities outside of their district borders but within their service areas in order to accommodate the colleges' evolving needs.

Although you do not indicate that NWACC intends to construct a "satellite campus," the salient point for purposes of your question is that the law plainly contemplates a community college facility being situated not only away from the college's primary site, but also outside the college's district.

In terms of funding the construction of out-of-district facilities, there is no clear restriction or limitation in either Amendment 52 or its implementing legislation that would prevent a community college district such as NWACC from using its millage funds for that purpose. The General Assembly has demonstrated that it is well aware of how to restrict a college's use of local millage funds on out-of-district facilities. But the restriction does not apply in this instance.

The Arkansas Code provides that "[n]o millage tax of the community college district shall be used for capital outlay expense or operating expense of a satellite campus." This restriction is limited to a community college district formed pursuant to that particular Code subsection, that is, one formed following the conversion of a technical college or a two-year branch campus of a four-year institution to a community college. You have provided no facts to indicate that NWACC is such a district. Assuming it is not, this prohibition on the use of local millage funds does not apply to NWACC.

While the General Assembly has explicitly limited the use of a college's millage funds on out-of-district facilities in the preceding circumstances, it has not provided a similar limitation that affects NWACC district's use of its local millage funds. Had the General Assembly intended to apply a similar restriction to an existing community college district such as NWACC, it could have easily done so.

Consequently, because the law contemplates that a community college facility may be located within the college's service area and outside its district, and because the General Assembly has not identified a limitation on the use of local millage funds for out-of-district facilities that applies to districts such as NWACC, it is my opinion that NWACC may use local millage funds to construct and operate a facility outside of its taxing district but within its service area. Constructing and operating additional facilities for the community college is conditioned, of course, on the requirement that the community college must continually serve the educational needs of its district and the state.

Lastly, again, I must emphasize that NWACC's legal counsel should be consulted when considering the proposed use of the community college's tax revenues. Additionally, the question will depend to some degree on the particular surrounding facts and circumstances, and it is difficult to reach any generally applicable conclusions that will fit every conceivable fact pattern. Because I am not NWACC's counsel in such matters, I strongly suggest that NWACC seek the advice of local counsel in determining how best to proceed under the specific circumstances.

Question 2: If not, what legislation would the college need to enable it to use [its] local [tax] millage on an out of district project?

This question is moot in light of my response to your first question.

Sincerely,

LESLIE RUTLEDGE
Attorney General