Could the Arkansas Economic Development Commission make Minority Business Loan Mobilization Fund loans to women-owned businesses before the legislature formally amended the loan-fund statute?

Plain-English summary

Mike Preston, Director of the Arkansas Economic Development Commission (AEDC), asked the AG whether AEDC could lend Minority Business Loan Mobilization Revolving Fund money to women-owned businesses before the legislature formally amended the loan-fund statute. The 2017 General Assembly had passed Act 1080, which renamed the underlying program from the "Minority Business Economic Development Act" to the "Minority and Women-Owned Business Economic Development Act" and expanded eligibility for various AEDC programs to include women-owned businesses. But Act 1080 did not amend the separate statute that created and limited the use of the loan fund (Ark. Code Ann. § 19-5-1240). AEDC was looking at whether it could use the fund for women-owned businesses anyway, given the broader policy direction of Act 1080.

AG Leslie Rutledge said no. The cardinal rule of statutory interpretation in Arkansas is to construe a statute just as it reads. Section 19-5-1240 says the fund "shall be used to promote the development of minority business enterprises," and the statutory definition of "minority business enterprise" in Ark. Code Ann. § 15-4-303 does not include women-owned businesses (which is a separately defined category). The 2017 reappropriation act (Act 715) tracked the same "minority business enterprises" language. Reading "minority business enterprise" to include women-owned businesses would require a strained construction. The legislature's decision to expand other parts of the statute but leave § 19-5-1240 alone has to be honored as a deliberate choice.

The opinion notes that Preston had referenced an anticipated "technical correction" to be made in the 2019 legislative session. Until that happened, AEDC would have to limit the fund's use to minority business enterprises as defined in the existing statute.

Currency note

This opinion was issued in 2018 (covering a 2017 opinion request). 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.

The "technical correction" the AG referenced was anticipated in the 2019 session. Whether and how it ultimately happened, and what the current scope of the loan fund is in Arkansas Code, should be verified against the present version of Ark. Code Ann. § 19-5-1240, not assumed from this 2018 opinion.

Common questions

Why didn't Act 1080 just fix everything in one shot?

It is a common drafting issue: the lead committee or sponsor may know to update the substantive program statute (here, Ark. Code Ann. § 15-4-301 et seq.) but miss the related fiscal/appropriation statute on a different code chapter. The expansion was effective for substantive eligibility but not for the loan fund's permitted uses, because the fiscal statute used a defined term (minority business enterprise) that was not redefined in Act 1080.

Why does AEDC have to wait for an amendment? Can't the AG just read it broadly?

Because Arkansas's "plain meaning" rule of statutory interpretation does not let an agency expand the use of a fund beyond what the statute authorizes. The AG can interpret ambiguous text. Where text is plain (as here, "minority business enterprise" with a fixed statutory definition that does not include women-owned businesses), the AG cannot supply a meaning the legislature did not include.

What is a "minority business enterprise" under Arkansas law?

Under Ark. Code Ann. § 15-4-303(3), a minority business enterprise is a business at least 51% owned by one or more minority persons. "Minority" is then statutorily defined (subsection (2)) to mean a lawful permanent resident of Arkansas who is African American, Hispanic American, American Indian, Asian American, Pacific Islander American, or a service-disabled veteran. Women are not on that list; women-owned businesses get their own definition in subsection (9).

Why are women-owned businesses defined separately from minority-owned?

Federal and state procurement programs have historically treated women-owned business enterprises (WBEs) and minority business enterprises (MBEs) as overlapping but distinct categories. A woman who is also a member of a defined minority group qualifies under both. A woman who is not a member of a defined minority group qualifies as a WBE only. Keeping the categories distinct lets agencies track each program's outcomes separately.

What practical advice did this give AEDC?

Hold off. Use the existing fund only for minority business enterprises until the legislature amends the loan-fund statute. The opinion does not bar AEDC from supporting women-owned businesses through other programs that Act 1080 properly expanded; it just bars use of the specific loan fund for that purpose.

Background and statutory framework

The dispute turns on two adjacent statutory frameworks that need to be read together:

• Ark. Code Ann. § 19-5-1240: establishes the Minority Business Loan Mobilization Revolving Fund, authorizes its use only for "minority business enterprises."
• Ark. Code Ann. § 15-4-301 to -315: the substantive Minority and Women-Owned Business Economic Development Act, which defines both "minority business enterprise" and "women-owned business enterprise" and lays out eligibility for various AEDC programs.

The Arkansas rule on statutory interpretation:

• Construe statutes just as they read (Weiss v. McFadden).
• Do not adopt strained constructions to expand or restrict meaning (Thompson v. Younts).
• Read related statutes in pari materia (City of Ft. Smith v. Tate).
• When meaning is plain, do not resort to construction rules (Brock v. Townsell).

Citations

• Ark. Code Ann. § 19-5-1240 (Minority Business Loan Mobilization Revolving Fund)
• Ark. Code Ann. § 15-4-301 et seq. (Minority and Women-Owned Business Economic Development Act)
• Ark. Code Ann. § 15-4-303 (definitions, including § 15-4-303(2), (3), (9))
• Ark. Code Ann. § 15-4-306 (uses similar to § 19-5-1240)
• Acts 2017, No. 1080 (renaming and expansion of program)
• Acts 2017, No. 715 (reappropriation tracking minority enterprise language)
• Weiss v. McFadden, 353 Ark. 868, 120 S.W.3d 545 (2003)
• Thompson v. Younts, 282 Ark. 524, 669 S.W.2d 471 (1984)
• City of Ft. Smith v. Tate, 311 Ark. 405, 844 S.W.2d 356 (1993)
• Green v. Mills, 339 Ark. 200, 4 S.W.3d 493 (1999)
• Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179
• Op. Att'y Gen. 2016-040 (statutes read in context)

Source

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

Original opinion text

Opinion No. 2017-131
March 27, 2018
Mike Preston, Director
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
Arkansas Economic Development Commission
900 West Capitol Avenue, Suite 400
Little Rock, AR 72201
Dear Mr. Preston:
This is in response to your request for my opm10n concerning the Minority Business Loan Mobilization Revolving Fund ("the Fund"). As background for your question, you note that Ark. Code Ann. § 19-5-1240 established the Fund 1 to be used for "minority business enterprises. "2 You also note that Act 1080 of 2017 amended the Minority Business Economic Development Act (Ark. Code Ann. § 15-4-301 - 315) to expand eligibility for programs and services to include women- owned businesses. 3 However, the statute that established the Fund was not similarly amended. Against this background, you ask: Can AEDC use funds out of [the Fund] for women-owned businesses prior to the technical correction to Ark. Code Ann. § 19- 5-1240, which is scheduled to be made in the 2019 Legislative Session? 1 Ark. Code Ann.§ 19-5-1240(a) (Repl. 2016) (creating on the books of the State Treasurer, State Auditor, and State Chief Fiscal Officer "a miscellaneous fund to be known as the 'Minority Business Loan Mobilization Revolving Fund."'). 2 Id. at § 19-5-1240( d). 3 The Act is now known as the "Minority and Women-Owned Business Economic Development Act." Ark. Code Ann. § 15-4-301 (Rep I. 2017). 323 CENTER STREET. SU ITE 200 · LITTLE ROCK. ARKANSAS 7220 1 TELEPHONE (501) 682-2007 · FAX (501) 682-8084 ARKANSASAG.GOV Mike Preston, Director, AEDC Opinion No. 2017-131 Page 2 RESPONSE The answer to this question is "no." DISCUSSION Your question is one of statutory interpretation. The cardinal rule of statutory interpretation is to construe a statute just as it reads, giving its words their ordinary and usually accepted meaning in common language.4 Courts will not resort to a strained construction of statutory language for the purpose of restricting or expanding a statute's plain meaning.5 The statute must be "read in a harmonious manner[,] if possible," with other statutes covering the same subject matter.6 To the extent the statute "conveys a clear and definite meaning, there is no need to resort to the rules of statutory construction. "7 The relevant statute in this case, Ark. Code Ann.§ 19-5-1240, provides as follows regarding the use of the Fund: The Minority Business Loan Mobilization Revolving Fund shall be used to promote the development of minority business enterprises in the state, increase the ability of minority business enterprises to compete for state contracts, and sustain the economic growth of minority business enterprises in the state.8 4 See Weiss v. McFadden, 353 Ark. 868, 120 S.W.3d 545 (2003). 5 Thompson v. Younts, 282 Ark. 524, 669 S.W.2d 471 (1984). 6 City of Ft. Smith v. Tate, 311 Ark. 405, 409-10, 844 S.W.2d 356, 359 (1993) ("All statutes on the same subject are in pari materia and must be ... made to stand if capable of being reconciled."). See also Green v. Mills, 339 Ark. 200, 205, 4 S.W.3d 493, 496 (1999) (internal citations omitted); accord Op. Att'y Gen. 2016-040 (noting that it is "well established that statutes must be read in context."). 7 Brock v. Townsell, 2009 Ark. 224 at 9, 309 S.W.3d 179, 186. 8 Ark. Code Ann. § 19-5-1240( d) (emphases added). The Fund consists of "the unexpended fund balances remaining in the Small Business Loan Fund Account of the 82nd Session General Improvement Fund as of the close of business on June 30, 2009, and such other funds as may be authorized by law." Id. at § l 9-5-l 240(b ). Mike Preston, Director, AEDC Opinion No. 2017-131 Page 3 Consistent with this statute, Act 715 of 2017 re-appropriates Fund balances to the Arkansas Economic Development Commission ("AEDC") for "minority business enterprises": There is hereby appropriated, to [AEDC], to be payable from [the Fund], for [ AEDC] the following: (A) Effective July 1, 2017, the balance of the appropriation provided in Item (A) Section 8 of Act 221 of 2016, for promoting the development of minority business enterprises in the State, increasing the ability of minority business enterprises to compete for state contracts, and sustaining the economic growth of minority business enterprises in the State, in a sum not to exceed ...
$293,694.9
Arkansas Code Annotated § 19-5-1240 does not contain a definition of "minority business enterprise." However, that definition is found in Ark. Code Ann. § 15-4- 303, which was adopted in 1977 as part of the Minority Business Economic Development Act: 'Minority business enterprise' means a business that is at least fifty- one percent ( 51 % ) owned by one (1) or more minority persons as defined in this section[.]10 And "minority" is defined as:
[A] lawful permanent resident of this state who is: (A) African American; (B) Hispanic American; (C) American Indian; (D) Asian American; (E) Pacific Islander American; or (F) A service-disabled veteran as designated by the United States Department of Veterans Affairs[.]11 9 Acts 2017, No. 715, § 8 (emphases added). 10 Ark. Code Ann.§ 15-4-303(3) (Supp. 2017). 11 Id. at § 15-4-303(2). Mike Preston, Director, AEDC Opinion No. 2017-131 Page 4 Of particular significance for purposes of your question, the term "minority business enterprise" under the Minority Business Economic Development Act does not include women-owned businesses. 12 I believe it is clear, based on the above rules of interpretation, that these definitions of "minority" and "minority business enterprise" apply in the context of section 19-5-1240-regarding the Fund-and AEDC's re-appropriation act. The Fund balances are appropriated to AEDC for the use of "minority business enterprises." And section l 9-5-1240's prescribed uses of the Fund (to promote development, increase ability to compete for state contracts, and sustain economic growth) are mirrored in the Minority Business Economic Development Act. 13 Given that women-owned businesses do not appear in the Minority Business Economic Development Act's definition of "minority business enterprise," it would require a strained construction to conclude that section 19-15-1240 currently authorizes the use of the Fund for women-owned businesses. It is true that Act 1080 of 201 7 added women-owned businesses to the types of entities that may be eligible for certain economic benefits. And it is true that AEDC oversees these programs. But the 2017 act specifically did not add women-owned businesses to section 19-5-1240 regarding the loan fund. If the General Assembly had intended to include such businesses under that statute, it could easily have done so. And it may of course in the future decide to make that change in the law governing the fund. I am constrained to interpret a statute just as it reads. And that reading allows for only one conclusion here- that the Fund is to be used for minority business enterprises as defined by the Minority Business Economic Development Act. I believe an amendment to section 19-15-1240 will be necessary to authorize the Fund's use for women-owned business enterprises. Sincerely, c=:== ==:> /~ LESLIE RUTLEDG{~ Attorney General 12 "Women-owned business enterprise" is separately defined as " ... a business that is at least fifty-one percent (51%) owned by one(!) or more women who are lawful permanent residents of this state. Id. at§ 15-4-303(9). 13 See Ark. Code Ann. § 15-4-306 (Supp. 2017).