Can a veterans nonprofit accept a donated state correction center under Act 160 of 2019, then sell or lease back the buildings as condos?

Plain-English summary

Veterans Village of America, Inc. (V2A) is an Arkansas-based nonprofit that wanted to acquire the former site of the Southeast Arkansas Community Correction Center in Pine Bluff (52 acres, ~30 buildings, being shuttered by the Department of Community Correction). V2A's plan was to develop the buildings into condominium and accessory-dwelling units to house and provide services to veterans reentering civilian life. Act 160 of 2019, an uncodified temporary act, authorized the Department of Community Correction (with the consent of the Board of Corrections and the Governor) to donate the facility to "an Arkansas-based nonprofit organization serving veterans of the United States Armed Forces" if the proposed use included services approved by the Board of Corrections for veterans released from incarceration.

State Representative LeAnne Burch, on V2A's behalf, asked AG Leslie Rutledge four questions about how V2A could structure its proposed use:

1. Could V2A receive the property as a donation and then sell or lease it back from a third party?
2. Could V2A rent and designate each building as a condominium and manage them?
3. Could V2A assess and collect fees from owners to maintain the property?
4. Did Act 160 require reversionary language in the deed?

The AG declined Q1, Q2, and Q3. Each one asked her to speculate about whether prospective V2A actions would still satisfy the Act's "proposed use" requirement, which is a factual judgment she does not make in the context of issuing official opinions (Op. Att'y Gen. 2019-029). She also noted that the discretion under Act 160 ultimately belongs to the Department of Community Correction, the Board of Corrections, and the Governor, who together decide whether to donate the facility. Whether a particular V2A plan satisfies the Board's "approved services" criterion is for those entities to assess.

On Q4 (reversionary language), the AG gave a substantive answer. Act 160 does not require any reversionary clause in the deed. However, because the Act conditions the donation on the nonprofit's use of the property for approved veteran services, including a reversionary clause in the deed would not be barred. The implication: the Department of Community Correction, the Board of Corrections, and the Governor could insist on a reversionary clause as protection if the donation conditions were ever breached, but the Act itself does not mandate one.

Currency note

This opinion was issued in 2020. 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

Why did the AG decline three of the four questions?
Because they asked her to predict whether hypothetical future V2A arrangements (sell-back to a third party, condominium designation, fee assessments) would satisfy Act 160's "proposed use" requirement. That requires factual judgment about the use plan and its alignment with what the Board of Corrections approves. The AG's office has long declined to make factual determinations in opinions (Op. Att'y Gen. 2019-029).

Who actually decides whether V2A's plan satisfies Act 160?
The Department of Community Correction, the Board of Corrections, and the Governor, together. Act 160 conditions the donation on those officials' consent and on Board approval of the proposed services for released veterans. Their judgment, not the AG's, is dispositive.

What is a "reversionary clause"?
A deed provision that the property reverts (returns) to the original grantor if a specified condition is breached. Here, a reversionary clause could say that the Pine Bluff property reverts to the State if V2A stops using it for approved veteran services. Act 160 does not require such a clause but does not bar one either.

Why might it be wise to include a reversionary clause anyway?
Because Act 160's donation is conditional on the nonprofit's use of the property for approved services. Without a reversionary clause, the State's enforcement options if V2A later stops providing those services would be limited to whatever ordinary contract or property law allows. A reversionary clause makes the conditionality self-executing.

Was the AG endorsing the V2A plan?
No. She offered no view on the merits of any specific arrangement. The donation decision is bounded by Act 160's terms and the discretion of the named state officials.

Background and statutory framework

Act 160 of 2019 is uncodified, temporary legislation directed at a single property: the former site of the Southeast Arkansas Community Correction Center in Pine Bluff. It authorizes (it does not compel) the Department of Community Correction to donate the property to an Arkansas-based veterans nonprofit, subject to consent of the Board of Corrections and the Governor and to a Board-approved scope of services for released veterans.

The AG's role in opinions like this is bounded by Op. Att'y Gen. 2019-029 (declining factual determinations) and the long-standing principle that prospective hypotheticals about use plans are for the executive officials with discretion under the underlying statute, not for the AG.

Citations

• Act 160 of 2019 (uncodified, regular session) (donation of former Southeast Arkansas Community Correction Center)

Prior opinions referenced:

• Op. Att'y Gen. 2019-029 (this office's policy of declining factual determinations in official opinions)

Source

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

Original opinion text

STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE

Opinion No. 2019-077
March 4, 2020

The Honorable LeAnne Burch
State Representative
P.O. Box 222
Monticello, AR 71657-0222

Dear Representative Burch:

This is in response to your request, on behalf of Veterans Village of America, Inc. (V2A), a nonprofit organization, for an opinion concerning Act 160 of 2019, which addresses the disposition of certain state-owned property. As background for your questions, you state that V2A is "negotiating with the State on the wording of a Quitclaim deed for a 52 acre state owned minimum security facility in Pine Bluff with approximately thirty buildings that are being shuttered by the Department of Community Corrections." You further explain that V2A "want[s] to obtain this facility to develop condominiums and accessory dwelling units to house and service ... veterans [who are reentering civilian life]." In this regard, you describe a specific proposed condominium ownership structure and a related proposed process for a condominium development.

Against this background, you ask:

1) Under the provisions of Act 160 of the 2019 Regular Session, may V2A receive the property herein mentioned as a donation from the State and then sell/lease it back from a third party purchaser?

2) Under the provisions of Act 160 of the 2019 Regular Session, may V2A rent and designate each building, acquired from the State, as a condominium and manage and supervise them accordingly?

3) Under the provisions of Act 160 of the 2019 Regular Session, may V2A assess and collect fees from the owners of the buildings/condos to maintain and upkeep the property?

4) Under the provisions of Act 160 of the 2019 Regular Session, does a conveyance from the State require any reversionary language to be included in the deed that conveys said property to V2A?

RESPONSE

I cannot opine on your first three questions because they call for speculation and require factual determinations that are outside the scope of an opinion from this office. The answer to your fourth question is "no," Act 160 does not require reversionary language. However, I see no bar to including a reversionary clause in the deed.

DISCUSSION

I take it from the background for your questions that the property you mention is the former site of the Southeast Arkansas Community Correction Center in Pine Bluff, which is the subject of Act 160 of 2019. This uncodified, temporary legislation provides as follows regarding the disposition of this facility:

The Department of Community Correction may, with the consent of the Board of Corrections and the Governor, donate the former site of the Southeast Arkansas Community Correction Center in Pine Bluff to an Arkansas-based nonprofit organization serving veterans of the United States Armed Forces if the proposed use by the nonprofit organization includes services approved by the Board of Corrections for veterans released from incarceration.

Your first three questions ask how some prospective actions by V2A could affect V2A's ability to obtain the state-owned facility pursuant to Act 160. I cannot opine on these questions because they call for speculation and require factual determinations that are outside the scope of an opinion from this office. Moreover, the effect or relevance of V2A's actions would have to be assessed by the Department of Community Correction, the Board of Corrections, and the Governor, the entities and officials with apparent discretion under Act 160 to decide whether to donate the facility.

The answer to your fourth question is "no," Act 160 does not require reversionary language. However, given that Act 160 makes donation conditional upon the nonprofit organization's use of the property, I see no bar to including a reversionary clause in the deed.

Sincerely,

LESLIE RUTLEDGE
Attorney General