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

Plain-English summary

Representative Kim Hendren asked whether Northwest Arkansas Community College (NWACC) could use local property-tax millage to build and operate an instructional center outside its taxing district. Attorney General Leslie Rutledge answered generally yes, as long as the facility was within NWACC's service area and no applicable restriction barred the use of those funds.

The opinion distinguishes a college's taxing district from its service area. Arkansas law contemplates additional community-college facilities within the service area even when they lie outside the district. A statute forbids use of district millage for a satellite campus by a college district formed through conversion of a technical college or a two-year branch campus. Rutledge said she had no facts showing NWACC was such a district and assumed it was not. On that assumption, the restriction did not apply. She advised NWACC to have local counsel assess any particular project.

Currency note

This opinion was issued in 2017. Check current law, NWACC's formation history, and the specific project before relying on its conditional conclusion.

Common questions

Q: May a community college serve people outside its taxing district?
A: Yes. The opinion explains that a college's state-assigned service area may extend beyond its district and that Arkansas law recognizes facilities in a service area outside district boundaries.

Q: Does the opinion establish how NWACC was formed?
A: No. Rutledge said the request provided no facts showing whether NWACC had been formed through a technical-college or branch-campus conversion. She assumed it had not for purposes of her answer.

Q: Why does the college's formation matter?
A: The opinion identifies a millage restriction for certain converted college districts. If that classification applied to NWACC, the assumption underlying Rutledge's conclusion would need to be revisited.

Q: Did the AG approve any particular facility or spending plan?
A: No. She said the answer could depend on surrounding facts and that NWACC should consult local counsel before deciding how to use its tax revenues.

Q: Did she identify legislation NWACC would need?
A: No. Because she answered the first question generally yes, she called the follow-up question about enabling legislation moot.

Background and statutory framework

Amendment 52 allows Arkansas to establish community-college districts and authorize property taxes for college facilities. The opinion reads the amendment and implementing law as requiring a principal site within the district while allowing additional facilities within the broader service area. Rutledge found no general restriction on using millage for those additional facilities, but expressly conditioned her analysis of NWACC on its assumed status outside the converted-college category.

Citations

• Ark. Const. amend. 52

Source

• Arkansas Attorney General opinions search: 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