Mr. Chris Burrow Director, Arkansas State Building Services 1515 Building, Suite 700 1515 West 7th Street Little Rock, AR 72201
Dear Mr. Burrow:
This is in response to your request for an opinion regarding funding of State building energy efficiency improvement construction projects. You state that there are numerous energy-saving revisions which need to be implemented in State-owned buildings, but that finding money to pay for these projects is often, if not always, a problem due to lack of State revenues. You have asked the following question in this regard:
Do the laws prohibit the funding of energy efficiency improvement construction projects through lease-purchase agreements, bond programs, utility company financing, or other available third-party financing options?
The general nature of this question precludes a conclusive response. While my research has yielded no general prohibition against financing this type of project, the substance of each transaction must be considered in order to fully assess the existence of any legal impediment(s). Particular consideration must be given to the exact nature of the State's obligation. It must be noted in this regard that except as authorized in Amendment 65 to the Arkansas Constitution with regard to "revenue bonds" as defined therein, the State is prohibited from issuing ". . . bonds or other evidence of indebtedness pledging the faith and credit of the State or any of its revenues for any purpose whatsoever, except by and with the consent of the majority of the qualified electors of the State voting on the question at a general election or at a special election called for that purpose." Ark. Const. amend. 20. The specific source of revenues for servicing any debt obligation and the security for the indebtedness are thus important factors when viewing a particular proposal of this nature.
Information concerning the particular agency or institution involved, including its current appropriation(s) and any relevant statutory provisions, would also be necessary in order to thoroughly consider this matter.
I thus lack sufficient information to address your question. It is my opinion that this question can only be fully addressed with reference to a particular proposal or transaction. While I cannot, in the context of an Attorney General opinion, construe the particular terms of any agreement due to the factual nature of such an inquiry, I will provide a more thorough review of the applicable legal principles in the context of a specific proposal.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.
Sincerely,
WINSTON BRYANT Attorney General
WB:cyh