Nevada County Picayune and Gurdon Times Newspaper Archive

Legality Of District Giving Property Away Questioned

If the Gurdon School Board goes through with giving an acre of land to Crossroads Baptist Church, it could be committing a criminal offense.

According to Suzanne Antley, with the opinion's division of the Arkansas Attorney General's Office, such a move could constitute illegal exaction as the transfer of property wouldn't include any compensation by the recipient.

Antley said the land is, in effect, owned by the taxpayers and there are provisions in the Arkansas Constitution which will be violated by the giving of the property away.

Under opinion 96-169, rendered June 20, 1996, it was asked if a school district could convey real property to a city or town for an amount less than an appraised value, i.e., one dollar to $100 per parcel.

This, the opinion states, could involve fraud unless a sale without consideration or with only a nominal consideration would be considered per se fraudulent.

It further states the sale of school property for less than adequate consideration might run afoul of Arkansas Constitution articles 14  2, 3, which generally prohibit school funds from being used for other than school purposes.

Donations by school districts to nonprofit entities would be unconstitutional.

"Any disposition of school property must be for the benefit of the school district and not a gift to other persons. So a disposition of school property must be consistent with good business judgement and sound business principles, and the board may not convey such property without consideration."

However, the compensation for the land, under the opinion, need not be monetary, but could be "of sufficient non-monetary consideration."

Under Attorney General's opinion 93-057 of 1993, it was written the determination of conveyance should be made in light of all surrounding circumstances.

Articles 14  2, 3, of the Arkansas Constitution clearly state, "No money or property belonging to the public school fund or to this State for the benefit of schools or universities shall ever be used for any other than the respective purposes to which it belongs."

This wording clearly shows it would be a violation of the Constitution if the district simply gave the property to the church.

If further states, "Any disposition of school property must be for the benefit of the school district and not a gift to other persons."

The law doesn't get any more clear.

In addition, the Arkansas Supreme Court has ruled, under Constitution Articles 16 and 13, an illegal exaction, which is what such a transfer would be considered, can take two forms  a misapplication of public resources and, a wrongful taxation.

The giving of land to a church could be considered an illegal exaction through the misapplication of public resources.

From opinion 98-190, it is written, "No principle of constitutional law is more fundamental or more firmly established that the State cannot, within the limits of due process, appropriate public funds to a private purpose."

It further states such arrangements run afoul of the illegal exaction prohibition because the use of public resources is involved.

Opinion 1999-417 concurs with the aforementioned opinions stating, "It is clear that a school board may not authorize a use of school property under factual circumstances that would render the transaction an illegal exaction ... nor may it do so in any other manner that would violate the law."

Antley reiterated these opinions saying no public agency is allowed to use public property for non-public actions and the school board could be sued as giving the land away would constitute an illegal exaction.