Court Opinion

ID: 3265321
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:34:27.475646+00
Date Added: 2024-06-11T13:04:07.549016
License: Public Domain

The Honorable Shane Broadway State Senator 201 Southeast Second Street Bryant, AR 72022
Dear Senator Broadway:
I am writing in response to your request for an opinion on the following two questions:
  1. Can an agency of the state liquidate or sell an asset to a private entity and then lease back that asset from the entity who purchased it?
  2. Assuming that agency of the state can legally liquidate or sell assets, what legislative or regulatory requirements apply to vendors who may seek to acquire and manage the existing asset and lease services back to the state and/or other parties if excess exists?
RESPONSE
I cannot provide a general answer to these questions that would apply to every state agency and every transaction. Resolution of the issue with regard to any particular agency will depend upon the applicable statutes or other law governing it, and all the surrounding facts and circumstances of the transaction. Different statutory provisions may govern different agencies.
For example, certain universities are authorized to enter into what are commonly known as sale "lease-back" transactions. Section 6-62-601 to -613 of the Arkansas Code grants this authority to the boards of the University of Arkansas, Arkansas State University, University of Central Arkansas, Henderson State University, Arkansas Tech University and Southern Arkansas University. The subchapter sets out the requirements and procedures applicable when these entities enter into this type of transaction.
I have not found any other statute specifically authorizing sale "lease-back" transactions. This is not to say that other state agencies are prohibited from undertaking such transactions. In order to answer the question as to other state agencies, however, reference must be had to the particular statutes empowering and governing those agencies, and all the facts and circumstances surrounding the transaction. I cannot opine generally as to the legality of such transactions as to all state agencies.
Deputy Attorney General Elana C. Wills prepared the foregoing opinion, which I hereby approve.
Sincerely,
MIKE BEEBE Attorney General
MB:ECW/cyh