Can the Arkansas Department of Education force the Pine Bluff School District (or any state-controlled district) to sell or lease unused buildings to a charter or private school?

Plain-English summary

Representative Kenneth Ferguson asked three related questions about the Arkansas Department of Education's authority over school facilities. The context: the Pine Bluff School District began operating under state control in 2018 and annexed the Dollarway School District in 2021, which left it with surplus buildings. As the district transitions back to local control, his constituents wanted to know whether ADE could direct or block the sale or lease of those buildings.

The AG's answers follow the structure of three Arkansas regimes: the unused-or-underutilized designation system, the Arkansas Educational Support and Accountability Act (AESAA), and the powers of a school district board.

Question 1: Can ADE declare facilities unused or underutilized? Yes. The Division of Public School Academic Facilities and Transportation has authority to designate facilities as "unused or underutilized" using a three-part test: (1) a significant portion is not being used for education, extracurriculars, or administration; (2) the nonuse threatens the building's purpose; and (3) the facility is not subject to a third-party lease or executed offer to purchase as of August 1, 2017. A district that disagrees can appeal to the Commission for Arkansas Public School Academic Facilities and Transportation.

A facility is not "underutilized" if the district lacks other available space to reasonably satisfy the educational, academic, extracurricular, or administrative activities it conducts there.

Question 2: While the district is in state control, can ADE sell or lease facilities to a charter or private school? It depends on what State Board action has been taken. Under AESAA, when a district is at Level 5: Intensive support, the State Board may take various remedial steps:

• Removing or suspending the superintendent, board, or both.
• Allowing the board to continue operating under Commissioner direction.
• Operating the district through the superintendent or an appointed panel.
• Having the Commissioner assume some or all board authority.

Whoever holds the board's authority gets the buy/sell/lease power that A.C.A. § 6-13-620(6)(E) normally vests in the district board. So in a Pine Bluff scenario, the answer depends on whether the State Board removed the local board, the Commissioner assumed its powers, or some other configuration is in place.

Question 3: After returning to local control, can ADE direct facility sales? No. Once the State Board votes to return full local control, the district board regains its facility-disposition authority. ADE cannot direct or dictate sales or leases. But the district is still subject to the standing statutory mandate at A.C.A. § 6-21-815(c)(1): unused or underutilized public school facilities must be made available for lease or purchase (at no more than fair market value) to any public charter school located within the district's boundaries. The mandate applies to public charter schools only, not private schools.

If the district disputes ADE's "unused or underutilized" designation, it can appeal to the Commission. If the district and a charter school cannot agree on lease terms, the charter school can petition the Commission to direct the lease. The Commission may deny the petition if the district shows it needs the property for future growth or if the charter use would negatively impact the campus's educational environment.

What this means for you

School district administrators

You retain board control over sales and leases once you are out of state control. But you do not regain control over the "unused or underutilized" determination, and you remain subject to the statutory access requirement for public charter schools.

If a charter school wants to lease an unused facility, you cannot simply refuse. You can negotiate terms (the statute caps price at fair market value) and you can defend a refusal on growth or educational-impact grounds in front of the Commission, but you cannot block access wholesale.

If you disagree with an ADE designation, the appeal to the Commission for Arkansas Public School Academic Facilities and Transportation is your remedy. Document your reasons (specifically, that the building is being used for an educational, academic, extracurricular, or administrative purpose, or that you have no alternative space).

School board members

While your district is in Level 5, Intensive support, your authority over facility transactions depends on what specific State Board action was taken. Read the State Board's most recent order on your district to understand exactly which powers were removed and which remain.

When local control is restored, your facility-disposition authority returns. But the access requirement for public charter schools is statutory and operates regardless of state-control status.

Charter school operators

Within a school district's boundaries, you have a statutory right to lease or purchase unused or underutilized public school facilities at no more than fair market value. That right runs against the district itself once it is back in local control.

If the district refuses to identify a facility you believe is unused, you can notify the Division. If you believe a designated facility is being improperly withheld, you can petition the Commission to direct the district to lease it.

Parents in state-controlled districts

While your district is in Level 5, Intensive support, decisions about your school buildings may be made by the State Board, the Commissioner, or an appointed panel rather than your local elected board. The specific configuration depends on the State Board's order. Once your district returns to local control, decisions return to your school board, but the statutory charter-access mandate continues.

Pine Bluff residents specifically

If your district has been classified as Level 5, Intensive support, the entity controlling facility decisions is whoever the State Board has designated. Once the State Board votes to return full local control (Level 4: Direct support or lower), your school board regains authority over sales and leases. But the surplus buildings inherited from the Dollarway annexation that meet the unused-or-underutilized criteria are subject to the standing statutory access requirement for in-boundary public charter schools.

State legislators

The current statutory architecture creates a clear divide: ADE controls the designation process; the operating board (whoever it is) controls the disposition. If you want to change either piece, the relevant statutes are A.C.A. § 6-21-815 (designation, lease/purchase mandate) and A.C.A. § 6-15-2916 (Level 5 remedial actions).

Facilities directors

Maintain accurate records of what each facility is used for and the alternative space available in your district. The "underutilized" determination turns heavily on whether you have alternative space to reasonably satisfy the activities currently being conducted in the building. Your records of capacity utilization across the district are the evidence base for an appeal.

Common questions

What is "Level 5: Intensive support"?
The highest level of state support under the Arkansas Educational Support and Accountability Act. When a district is classified at Level 5, the State Board can remove the local board, install Commissioner control, or take various other remedial actions. AESAA gives the state a graduated escalation to ensure equal education opportunity (see Lake View v. Huckabee).

What is "unused or underutilized"?
A three-part test under Commission rules: a significant portion of the facility is not being used for education, extracurriculars, or administration; the nonuse threatens the facility's purpose; and the facility is not subject to a pre-August 1, 2017 third-party lease or executed offer to purchase. Plus a safe harbor: not "underutilized" if the district lacks other space to reasonably accommodate what is being done there.

Why is there a statutory mandate to lease to charter schools?
The General Assembly directed it (A.C.A. § 6-21-815(c)(1)) as part of public school choice policy. Charter schools are public schools. Public school facilities serving the district's geographic area are a state asset that the legislature decided should be available to all publicly chartered schools within the boundary.

What about private schools?
Private schools are not in the mandate. The AG opinion explicitly notes that the requirement at A.C.A. § 6-21-815(c)(1) covers public charter schools, not private schools.

Can the district set the price?
Sales and leases are at no more than fair market value. The district can negotiate within that ceiling.

What if the district and the charter school disagree on terms?
The charter school can petition the Commission for Arkansas Public School Academic Facilities and Transportation. The Commission can direct a lease, or deny the petition if the district demonstrates either future growth need or negative educational impact.

Does this opinion address private investor purchases?
No. The opinion is about public charter and private school access. Sales to private parties (developers, investors) are governed by general school district property rules and are within the board's authority, subject to standard statutory requirements.

Background and statutory framework

A.C.A. §§ 6-21-114, 6-21-804(b), 6-21-815, 6-21-815(g), 6-21-816, 6-21-816(i). Authorize the Commission for Arkansas Public School Academic Facilities and Transportation to promulgate rules.

A.C.A. § 6-21-815(c)(1). Statutory mandate that districts make unused or underutilized facilities available to in-boundary public charter schools at no more than fair market value.

A.C.A. § 6-21-815(c)(3)(A) and (c)(4). Procedures for charter petitions and Commission denial grounds (future growth need or negative educational impact).

A.C.A. § 6-15-2902(2). AESAA's purpose statement, citing Lake View v. Huckabee on substantially equal educational opportunity.

A.C.A. § 6-15-2916(2). Lists State Board remedial actions for Level 5: Intensive support districts.

A.C.A. § 6-15-2917(b)(3). Procedures for returning a district to local control.

A.C.A. § 6-13-620(6)(E) and (7)(B). Powers and duties of a normal school district board, including buying, selling, renting, and leasing real and personal property, and managing district properties for the district's benefit.

Commission Rules. Define "unused or underutilized public school facility" (Rule 2.15 and 2.15.4) and govern designation, appeals, and lease/sale procedures (Rules 3.01 to 3.03).

Citations

• A.C.A. §§ 6-21-114, 6-21-804(b), 6-21-815 to 6-21-816 (school facilities and lease/sale to charter schools)
• A.C.A. §§ 6-15-2902, 6-15-2916, 6-15-2917 (AESAA framework)
• A.C.A. § 6-13-620 (school board powers)
• Commission for Arkansas Public School Academic Facilities and Transportation Rules
• Lake View School District No. 25 v. Huckabee, 351 Ark. 31, 91 S.W.3d 472 (2002)

Source

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

Original opinion text

Opinion No. 2023-067
November 20, 2023
The Honorable Kenneth B. Ferguson
State Representative
Post Office Box 5661
Pine Bluff, Arkansas 71611

Dear Representative Ferguson:

I am writing in response to your request for my opinion on three questions relating to the Arkansas Department of Education's authority to sell or lease school district facilities or property.

Your correspondence explains that the Pine Bluff School District, which began operating under state control in 2018, annexed the Dollarway School District in 2021. As a result of this annexation, the Pine Bluff School District now has extra buildings and facilities. Because the Pine Bluff School District is shifting from state control back to local control, your constituents have concerns about the potential sale and lease of this excess property.

Against this background, you ask the following questions:

1. Pursuant to Arkansas law, can the Arkansas Department of Education deem or declare any school district facilities or property as unused or underutilized?

Brief answer: Yes, the Arkansas Department of Education's Division of Public School Academic Facilities and Transportation has authority to determine whether certain property meets the definition of an "unused or underutilized public school facility." If a school district disagrees, it may appeal that determination to the Commission for Arkansas Public School Academic Facilities and Transportation.

2. Pursuant to Arkansas law, can the Arkansas Department of Education, while in control of the school district, sell or lease any school district facilities or property deemed unused or underutilized to a public charter or private school?

Brief answer: The answer to this question depends on whether the State Board of Education has suspended or removed the public school district's board of directors, who has assumed the school board's authority, and the extent to which the State Board may have temporarily removed the school board's powers and duties.

3. Pursuant to Arkansas law, can the Arkansas Department of Education, after the school district has exited state control and is governed again by a duly elected school board, direct or dictate that any school district facilities or property be sold or leased to a public charter or private school?

Brief answer: No, the Arkansas Department of Education lacks the authority to direct or dictate the sale of school district facilities or property after the State Board has voted to return full local control to the district and the district has been removed from Level 5 — Intensive support.

DISCUSSION

Question 1: Pursuant to Arkansas law, can the Arkansas Department of Education deem or declare any school district facilities or property as unused or underutilized?

The Arkansas Department of Education defines an "unused or underutilized public school facility" as "a public school facility or other real property owned by a public school" that meets the following criteria:

• The whole facility or a significant portion of it is not being used for a public education, academic, extracurricular, or administrative purpose;
• The nonuse or underutilization of the facility threatens its integrity or purpose as an educational facility; and
• The facility is not, as of August 1, 2017, subject to a third party lease or executed offer to purchase by a third party.

A public school facility is not considered "underutilized" if the district lacks other available space to "reasonably satisfy the educational, academic, extracurricular, or administrative activities being conducted in the facility."

Each year, school districts must submit a report to the Division of Public School Academic Facilities and Transportation identifying (1) all unused or underutilized public school facilities in the district and (2) any such facilities that are designated in the district's facilities master plan to be reused, renovated, or demolished as part of a specific project. If a public charter school suspects that a particular public school facility is unused or underutilized, the charter school may notify the Division. The Division then publishes an online list of the facilities it has identified as "unused or underutilized" after notifying the affected districts. A school district that disagrees with the Division's designation of a facility as "unused or underutilized" may appeal the designation to the Commission for Arkansas Public School Academic Facilities and Transportation.

Therefore, the answer to your question is "yes." The Division has authority to determine whether certain property meets the definition of an "unused or underutilized public school facility." If a school district disagrees, it may appeal that determination to the Commission.

Question 2: Pursuant to Arkansas law, can the Arkansas Department of Education, while in control of the school district, sell or lease any school district facilities or property deemed unused or underutilized to a public charter or private school?

Answering your second question requires a discussion of three separate points of law: (1) the right of public charter schools to access unused or underutilized public school facilities, (2) the Arkansas Educational Support and Accountability Act (AESAA), and (3) the powers and duties of a public school district's board of directors.

1. Public charter schools' right to access unused or underutilized public school facilities. The General Assembly has directed public school districts to "make unused or underutilized public school facilities available for lease or purchase for no more than fair market value to any public charter school located within the geographical boundaries of the school district." The procedures governing the lease or sale of public school facilities to public charter schools are set forth in statute and rule.

2. The AESAA. Through the AESAA, the General Assembly has also established a system by which the state can provide increasing levels of support to local public school district boards of directors, helping them provide all public school children with "a substantially equal opportunity for an adequate education." If a public school district is classified as needing the highest level of support (Level 5 — Intensive), the State Board of Education may assume authority of the district and take a number of remedial actions. These actions may include removing, reassigning, or suspending the superintendent; removing or suspending some or all of the school district board of directors; or temporarily removing some or all of the school board's powers and duties, but allowing the board to continue to operate under the direction and approval of the Commissioner of Elementary and Secondary Education.

If the State Board removes or suspends the school district's board of directors, new directors may be elected. Or the State Board may require the district to operate without a board and under the direction of the superintendent, another individual, or a panel appointed by the Commissioner. Alternatively, the Commissioner may assume some or all authority of the district board of directors. If the State Board temporarily removes some or all of the school board's powers and duties, those duties and powers transfer to the Commissioner, with the school board acting in an advisory capacity.

3. Duties and powers of a public school district board of directors. A public school district's board of directors normally has the power to buy, sell, rent, and lease real and personal property on behalf of the school district. It also has the duty to ensure that the school district's properties are managed and maintained for the district's benefit. Thus, if a public school district has been classified as in need of Level 5 — Intensive support under the AESAA, either the school board, the Commissioner, or some other entity that has assumed the school board's authority will have the power to sell or lease district facilities or property.

4. Analysis. Reading the above statutes together, it becomes clear that the answer to your second question depends on the remedial action taken by the State Board. When a school district has been classified as needing Level 5 — Intensive support, either the public school district's board of directors or another entity, like the Commissioner or an appointed panel, will hold the authority to sell or lease school district facilities. And whether any particular facility is deemed "unused or underutilized," thus making it subject to lease or purchase by a public charter school, is addressed in my response to your first question.

Question 3: Pursuant to Arkansas law, can the Arkansas Department of Education, after the school district has exited state control and is governed again by a duly elected school board, direct or dictate that any school district facilities or property be sold or leased to a public charter or private school?

When the State Board begins the process of returning a public school district to local control, it may do so "through the appointment or election of a newly elected board of directors upon the recommendation of the Commissioner." But the State Board may also limit the new local board's powers and duties, permitting the board to operate under the direction and approval of the Commissioner. I understand your question to be about the state's authority after the State Board has voted to return full local control to the district and to remove the district from Level 5 — Intensive support (presumably reclassifying the district as in need of Level 4 — Direct support). In that case, the answer is "no." Once the state has fully returned control of the school district to the district's board of directors, the board will regain whatever authority had previously been stripped from it, including the authority to buy, sell, rent, and lease real and personal property on behalf of the school district.

But even after the school district reclaims this authority, it will still be bound by the statutory directive to make unused or underutilized public school facilities available for lease or purchase to public charter schools located within the district's boundaries. (You also mention private schools, but they are not included in the mandate.) If the school district board of directors disagrees with the Division's designation of certain facilities as "unused or underutilized," it may appeal to the Commission for Arkansas Public School Academic Facilities and Transportation. And if the school district and an interested public charter school are unable to agree on the terms of a sale or lease, the charter school may petition the Commission to direct the school district to lease the facility to the charter school. The Commission may deny the petition if the school district shows that (1) the school district will need the facility or property to accommodate future growth or (2) use of the facility or property by the charter school would negatively impact the educational environment of the campus.

Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.

Sincerely,
TIM GRIFFIN
Attorney General