Robinson v. Villines
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Cite as 2009 Ark. 632
SUPREME COURT OF ARKANSAS
No.
09-671
Opinion Delivered December 17, 2009
J.B. ROBINSON ET AL.,
APPELLANTS,
VS.
FLOYD G. “BUDDY” VILLINES ET AL.,
APPELLEES,
APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT,
NO. CV-08-5203,
HON. TIMOTHY D. FOX, JUDGE,
REVERSED AND REMANDED ON
DIRECT APPEAL; AFFIRMED ON
CROSS APPEAL.
JIM GUNTER, Associate Justice
This case involves a complaint filed by a group of individuals paying personal and real
property taxes in the City of Little Rock who were subject to an increase in library millage
rates for the tax year 2007. On appeal, the taxpayer-appellants claim that the circuit court
erred in applying Ark. Code Ann. § 14-14-904(b)(3) (Supp. 2009) to the facts of this case and
that the appellees failed to adhere to the clear requirements of the statute. On cross-appeal,
the City of Little Rock and Pulaski County assert that the circuit court did not have subjectmatter jurisdiction to hear the case and that it erred in denying their motion to dismiss on
those grounds. Because this case involves the construction and interpretation of the Arkansas
Constitution and the interpretation of our statutes as they pertain to an illegal exaction, our
jurisdiction is pursuant to Rule 1-2(a)(1) of the Rules of the Arkansas Supreme Court.
The facts of this case were stipulated by all parties below and are not in dispute. During
Cite as 2009 Ark. 632
the summer of 2007, the Central Arkansas Library System (CALS) Board of Trustees
requested a taxpayer vote to increase the millage rates for public libraries within the city limits
of Little Rock. On September 18, 2007, the City of Little Rock Board of Directors enacted
Ordinance Nos. 19,827 and 19,828 setting a special election for November 13, 2007. Later,
on October 2, 2007, the board enacted companion ordinances Nos. 19,829 and 19,830
amending the date of the special election to December 11, 2007. Thereafter, it enacted
Ordinance No. 19,854 on November 6, 2007, establishing the ad valorem tax rates for 2007
at 2.8 mills for operating and maintaining the city’s libraries and 1.0 mill for funding the
repayment of capital-improvement bonds. Pursuant to Ark. Code Ann. § 14-14-904, the
Pulaski County Quorum Court enacted Ordinance No. 07-OR-84 on November 27, 2007,
levying the ad valorem library taxes as 2.8 mills and 1.0 mill. On December 11, 2007, voters
in the special election approved a library millage increase from 2.8 to 3.3 mills for
maintenance and operation and from 1 mill to 2 mills for bond indebtedness. No challenge
to the election results was filed within the period provided for by law.
On January 8, 2008, the city board enacted Ordinance No. 19,903 amending
Ordinance No. 19,854 to reflect the millage increases as approved by the voters. Thereafter,
on January 11, 2008, Pulaski County Judge Villines signed Order No. 08-010 finding that
pursuant to Ark. Code Ann. § 14-14-904, he had jurisdiction to correct clerical errors,
scrivener’s errors, or failure of a taxing entity to report correct millage rates to the quorum
court. The order set the correct library millage rate as 4.3 mills. However, three days later,
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an employee of the Pulaski County Treasurer’s Office noticed that the millage rate on the
court order was incorrect, and Judge Villines entered Order No. 08-013 on January 14, 2008,
indicating that the library millage rate was 3.3 mills for maintenance and operation and the
capital-improvements millage rate was 2.0 mills. Following entry of that order, Pulaski
County Treasurer Debra Buckner computed the 2007 ad valorem library taxes imposed on all
nonexempt real and personal property located within the City of Little Rock as 3.3 and 2.0
mills.
On May 14, 2008, the taxpayers filed an illegal-exaction complaint in Pulaski County
Circuit Court against County Judge Floyd G. “Buddy” Villines; Tax Assessor Janet Troutman
Ward; Treasurer Debra Buckner; Pulaski County, Arkansas; the City of Little Rock; Little
Rock Mayor Mark Stodola; CALS; and CALS director Bobby Roberts in Pulaski County
Circuit Court asserting that the millage rate increase benefitting CALS approved by voters in
December 2007 was retroactively applied to ad valorem taxes for 2007 in violation of Ark.
Code Ann. § 14-14-904(b). The taxpayers alleged that any attempt to levy and collect an
increase in library taxes imposed for the 2007 tax year constituted an illegal exaction. They
requested a declaratory judgment, reimbursement, and injunctive relief.
The Pulaski County defendants filed a motion to dismiss arguing that the circuit court
lacked subject-matter jurisdiction because the taxpayers failed to appeal from the county court
order within the thirty-day time limit required by District Court Rule 9.1 Prior to a hearing
The City of Little Rock defendants incorporated and adopted the Pulaski County
defendants’ arguments.
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on February 24, 2009, the circuit court denied the motion to dismiss on jurisdictional
grounds. The parties agreed to and submitted stipulated facts and documents, including the
following: the taxpayers were not challenging the validity of the 2008 ad valorem library taxes
but only the taxes for 2007 to be collected in 2008; there was no challenge to the validity of
the special election held in December 2007; the taxpayers were not challenging that the taxes
at issue had been used for any purpose not approved by the voters; and all parties agreed that
ordinances 19,829 and 19,830 were “referred” to the voters in December 2007 and that the
voters “repealed” the previous millage rates.2
In an order entered on February 26, 2009, the circuit court found that it had subjectmatter jurisdiction pursuant to article 16, section 13 of the Arkansas Constitution (illegal
exaction) and granted judgment in favor of defendants. The circuit court determined that §
14-14-904(b)(3) was discretionary not mandatory, and that regardless, the quorum court’s
actions were only ministerial. The circuit court found that the assessment and collection of
an increased library millage for the 2007 tax year was not unconstitutional, unauthorized, or
prohibited by law. The taxpayers filed a timely notice of appeal from the judgment. The City
of Little Rock and Pulaski County litigants filed notices of cross appeal from the judgment
asserting that the circuit court lacked subject-matter jurisdiction.
As a threshold matter, the county and city cross-appellants claim that the circuit court
erred in denying their motion to dismiss on jurisdictional grounds. They assert that the circuit
We do not address the issue of whether the levy was repealed by referendum
because the parties stipulated to that fact and do not address it on appeal.
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court lacked subject-matter jurisdiction because the taxpayers did not appeal from Pulaski
County Court Order 08-013 within thirty days as required by District Court Rule 9(e)
(2009)—instead filing a new action in circuit court—and because the taxpayers did not state
a valid claim for illegal exaction allowing their case to be brought for the first time in circuit
court. In their response, the taxpayers maintain that they are not appealing the county court
order, but rather they are asserting that any attempt to collect taxes based on the increased
millage rate for 2007 is an illegal exaction because the city and county did not adhere to the
requirements of Ark. Code Ann. § 14-14-904.
Pursuant to the Arkansas Constitution, article 7, section 33, all judgments of county
courts are appealable to circuit court under such restrictions and regulations as prescribed by
law. District Court Rule 9(e) provides that
a party may take an appeal from the final judgment of a county court by filing a notice
of appeal with the clerk of the circuit court having jurisdiction over the matter within
thirty (30) days from the date that the county court filed its order with the county
clerk.
See also Pike Ave. Dev. Co. v. Pulaski County, 343 Ark. 338, 37 S.W.3d 177 (2001). As the
taxpayers did not timely appeal from the county court order, jurisdiction in both the circuit
court and this court rests on whether they properly stated a cause of action in illegal exaction.
A suit to prevent the collection of an illegal or unauthorized tax is an illegal exaction
suit, and subject-matter jurisdiction is concurrently in circuit court.3 Hoyle v. Faucher, 334 Ark.
Prior to the passage of Amendment 80, jurisdiction was concurrent with chancery
courts. Amendment 80 merged courts of law and equity. See Edwards v. Nelson, 372 Ark.
300, 275 S.W.3d 158 (2008).
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529, 975 S.W.2d 843 (1998) (quoting Foster v. Jefferson Co. Quorum Ct., 321 Ark. 105, 901
S.W.2d 809(1995) (Foster I), supp. op. granting reh’g, 321 Ark. 116-A, 901 S.W.2d 809 (1995)
(Foster II) (rehearing granted on other grounds)). Article 16, section 13 of the Arkansas
Constitution grants the citizens of Arkansas standing to pursue an illegal-exaction claim. An
illegal exaction is defined as any exaction that either is not authorized by law or is contrary
to law. White v. Ark. Capital Corp./Diamond State Ventures, 365 Ark. 200, 226 S.W.3d 825
(2006). There are two types of illegal-exaction cases: “public funds” cases, where the plaintiff
contends that public funds generated from tax dollars are being misapplied or illegally spent
and “illegal-tax” cases, where the plaintiff asserts that the tax itself is illegal. Id. This court has
strictly adhered to the rule that, if the taxes complained of are not themselves illegal, a suit for
illegal exaction will not lie. Hambay v. Williams, 373 Ark. 532, 285 S.W.3d 239 (2008) (citing
Pockrus v. Bella Vista Village Prop. Owners Ass’n, 316 Ark. 468, 872 S.W.2d 416 (1994)). A
flaw in the assessment or collection procedure, no matter how serious from the taxpayer’s
point of view, does not make the exaction itself illegal. Id.
The substance of the taxpayers’ claim is that the neither the county judge nor the city
had authority to impose the increase in millage retroactively to 2007 taxes. We have held that
the definition of an illegal exaction is any exaction that is not authorized by or is contrary to
law. Here, the taxpayers filed a complaint alleging that the county and city did not correctly
follow the statutory levy procedures to authorize the imposition of the tax increase for 2007.
The taxpayers assert that any application of the 1.5 mills increase to 2007 ad valorem taxes was
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unauthorized by law and improper. Consequently, we are satisfied that the taxpayers stated
a claim for illegal exaction based on a lack of authority to levy an increase in tax and properly
filed their complaint in circuit court.
We now turn to the merits of the taxpayers’ illegal-exaction claim, in which they
maintain that the circuit court incorrectly applied the rules of statutory construction and
interpretation to Ark. Code Ann. § 14-14-904 and that the city and county failed to adhere
to the requirements of the statute. The standard of review on appeal from a bench trial is
whether the circuit court’s findings were clearly erroneous or clearly against the
preponderance of the evidence. Helena-West Helena Sch. Dist. v. Fluker, 371 Ark. 574, 268
S.W.3d 879 (2007). A finding is clearly erroneous when, although there is evidence to
support it, the reviewing court, when considering all of the evidence, is left with a definite
and firm conviction that a mistake has been committed. Id. However, a circuit court’s
conclusion on a question of law is reviewed de novo and is given no deference on appeal. Id.
Therefore, we review Judge Fox’s factual findings for clear error and his interpretation of the
law de novo.
Amendment 30, section 1 specifically authorizes elections for ad valorem taxes to
support public municipal libraries. Amendment 30, section 2 requires that once lowered or
raised, the revised tax is to be thereafter “continually levied and collected as other general taxes
of such city are levied and collected.” (Emphasis added.) Section 3 of the amendment requires
that any increase, reduction, or abolishment of the library tax must be submitted to the voters.
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That section provides that once the results of the election are certified, they are conclusive
unless attacked in court within thirty days. Arkansas Code Annotated section 26-73-202
(Repl. 2008) provides:
The council of any municipal corporation on or before the time fixed by law for
levying county taxes may make out and certify to the county clerk the rate of taxation
levied by the municipal corporation on the real and personal property within the city
or town. The amount so certified shall be placed upon the tax book by the county
clerk of the county and collected in the same manner that state and county taxes are
collected.
Arkansas Code Annotated section 14-14-904(b(1)(A)(i) (Supp. 2009) states that the “quorum
court at its regular meeting in November of each year shall levy the county taxes, municipal
taxes, and school taxes for the current year.” The powers of the quorum court are limited;
it does not have the power to challenge millage rates voted by city councils and school
districts; its duty is simply to levy without change such millage rates as are voted and it may
not levy millage on any basis other than the assessment of the assessor, as equalized and
adjusted by equalization board. Layne v. Strode, 229 Ark. 513, 317 S.W.2d 6 (1958).
Furthermore, Ark. Code Ann. § 14-14-904(b)(3) states that “[i]f the levy of taxes is repealed
by referendum, the county may adopt a new ordinance levying taxes within thirty (30) days
after the referendum vote is certified.” A county ordinance is defined in Ark. Code Ann. §
14-14-904(i) as “an enactment of compulsory law for a quorum court.” In addition, Ark.
Code Ann. § 14-14-904(b)(4) provides that
[i]f a county court determines that the levy of taxes by the quorum court is incorrect
due to clerical errors, scrivener’s errors, or failure of a taxing entity to report the
correct millage rate to the quorum court, the county court shall issue an order
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directing the county clerk to correct the error in order to correct the millage levy.
The cardinal rule in construing tax legislation is that a tax cannot be imposed except by
express words indicating that purpose, and where there is ambiguity or doubt it must be
resolved in favor of the taxpayer. Russellville Police Pension & Ret. Bd. v. Johnson, 365 Ark. 99,
225 S.W.3d 357 (2006); see also Wilson v. Wayne Farms LLC, 368 Ark. 93, 243 S.W.3d 316
(2006).
On appeal, the taxpayers ask this court to strictly interpret § 14-14-904(b)(1)(A)(i) and
hold that the November 2007 levy was the only levy allowed for the year 2007. The
taxpayers cite Russellville Police Pension & Retirement Bd. for the proposition that only the
county quorum court has authority to enact an ordinance levying new taxes after a repeal by
referendum. Because the quorum court did not meet and enact a new ordinance levying an
increase in taxes within thirty days of the certification of the special-election results, the
taxpayers claim that the millage-rate increase could not be applied until 2008 taxes were
levied.
In their response brief, CALS argues that nothing in Amendment 30 sets forth a
procedure for the imposition of a millage increase once the quorum court has levied the tax
and that nothing in the city’s ordinances calling for a special election or in the language of the
ballot approved by the voters stated when the increase in millage would take place. CALS
contends that County Judge Villines’s court order was merely entered to reflect the wishes
of the voters and that no constitutional or statutory provision prevents such an act.
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We reverse the judgment of the circuit court because County Judge Villines did not
have statutory or constitutional authority to retroactively apply the millage-rate increase to
2007 library taxes after the special election. Once the City of Little Rock issued Ordinance
19,854 authorizing the ad valorem tax rates for 2007, the quorum court had authority pursuant
to Ark. Code Ann. § 14-14-904(b)(1)(A)(i) to levy taxes for the current year—2007—in its
November meeting. The levy by the quorum court is an integral and essential requirement
before a tax can be collected. The levying of a tax is not identical to its collection.
Amendment 30, section 2 is consistent in that it notes that once revised, a tax shall be
continually “levied and collected.” Arkansas Code Annotated section 14-14-904 only
provides for two options for changing the 2007 tax rates that had been levied in
November—(1) the quorum court could meet within thirty days of the certification of the
December 11 vote and adopt a new ordinance levying the increased tax rate or (2) the county
judge could issue an order correcting the millage amounts where there was a clerical error,
scrivener’s error, or a failure by the taxing entity to report the correct millage to the quorum
court.
Here, after the special election in December, the city board enacted Ordinance 19,903
revising the library millage rates to reflect the increases passed by voters. Despite this action
by the board, Ordinance 19,903 did not operate to levy an increase in millage rates for 2007
taxes. The quorum court did not meet after the December election to issue a new levying
ordinance, therefore, § 14-14-904(b)(3) was not satisfied. Furthermore, Judge Villines’s order
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had to be a proper exercise of his authority pursuant to Ark. Code Ann. § 14-14-904(b)(4)
for any change in the millage rates to apply to 2007. There is no evidence in this case that a
clerical or scrivener’s error existed. Furthermore, there was no failure to report the correct
millage. The city board reported, in November 2007, what was then the correct millage to
the quorum court. Although the vote of the people in December approved an increase in
millage rates for library purposes, the Ark. Code Ann. § 14-14-904 provides two specific
processes for the correction or alteration of a previously levied tax, neither of which where
followed here. Thus, the circuit court clearly erred in finding that the levy and collection of
the voter-approved 1.5 mills increase for 2007 library taxes was not unconstitutional,
unauthorized, or prohibited by law. The assessment and collection of the increase was not
authorized by law in these circumstances because the quorum court did not act within its
discretionary authority under the statute to issue a new levying ordinance.4 Moreover, the
county judge was without authority to correct the quorum court’s November 2007 levy
because there was no evidence of a scrivener’s error, clerical error, or failure to report the
correct millage rate.
We remand the case for the circuit court to ascertain a remedy consistent with our
opinion. See Weiss v. McFadden, 356 Ark. 123, 148 S.W.3d 248 (2004).
Judge Fox correctly held that § 14-14-904(b)(3) is discretionary and that after a
repeal by referendum, the quorum court was not required to adopt a new levying
ordinance. However, the fact that the quorum court did not meet and enact a new levying
ordinance means that the 2007 ad valorem library taxes could not be collected at the
increased millage rates.
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Reversed and remanded.
Imber, J., not participating.
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