The Honorable Bill Walters State Senator P.O. Box 280 Greenwood, Arkansas 72936
Dear Senator Walters:
This is in response to your request for an opinion on whether the Soil and Water Conservation Commission has the authority to issue bonds to provide financing for a nonprofit corporation to purchase a for-profit water distribution company. You indicate that two of your constituents own a for-profit water company and wish to sell the assets to the nonprofit corporation. You state, however, that the "double taxation" which would result from this asset sale is so substantial that the deal cannot be made unless such taxation can be avoided. You therefore inquire as to whether the Soil and Water Conservation Commission could legally issue bonds in order to provide financing for the purchase, with the stock of the corporation being transferred to Soil and Water as collateral for the loan. You also inquire as to whether after such a transaction takes place, it would be legal to merge the two corporations.
It is my opinion that your questions involve too many factual determinations to be resolved in an official Attorney General opinion. These questions are ones which should be resolved through the attorneys for the respective parties involved. If the Soil and Water Conservation Commission should require the advice of this office, that advice will be provided upon request in a representative capacity. Additionally, it appears that your question may be in the nature of a request for a bond opinion. This office does not render such opinions.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana C. Wills.
Sincerely,
WINSTON BRYANT Attorney General
WB:cyh