Arkansas Blog

QUESTION: Is the use of Arkansas Game and Fish Commission land for the drilling of gas wells on that  land consistent with its mandate under Amendment 35 to manage, restore, conserve, and regulate the birds, fish, game and wildlife resources of the State?  Q2) Does public property  retain its tax exemption under art. 16, sec. 5(b) of the Arkansas Constitution if the state agency or commission that owns the land uses the property for a state purpose as well as to generate a profit for itself by leasing the land to a non-public entity?  Q3) Is land that is leased from a state agency to a commercial enterprise subject to property tax under art. 16, sec. 5(a) of the Arkansas Constitution?  Q4) Is the language of A.C.A. 26-3-301(4) that exempts all state property, whether real or personal, consistent with art. 16, sec. 5(b) that exempts public property only if it is used exclusively for public purposes?  Q5) While the Arkansas Game and Fish Commission holds title to various parcels of real property, do the people of the State of Arkansas retain the beneficial interest in the real property with the Arkansas Game and Fish Commission holding the property in trust for the people? 

 RESPONSE:  Q1)  It is impossible to answer this question definitively without full development of the facts and circumstances surrounding this particular use of Commission land.  See Opinion for general discussion.  Q2 &3)  These questions require factual determinations by the assessor. See  A.C.A. 26-27-317 and 26-27-318.  Generally, the assessor will not consider any individual parcel of land leased to a private entity to be tax-exempt.   The question of whether an entire larger tract, containing some parcels which are leased and others which are devoted to public use, will lose its tax emption under Ark. Const. article 16, section 5 due to the presence of the leased parcels will depend upon the predominant or primary use of that larger tract.  Q4)  A court would read this statute in light of the constitution, as also requiring an exclusive public use. Q5)  The court has identified the Commission as "trustee for the people."  Farris v. Ark. State Game & Fish Comm'n, 228 Ark. 776, 782, 310 S.W.2d 231 (1958).  But the term "beneficial interest" would not appear to applyin the context of Amendment 35.