The Honorable Frank J. Willems State Representative Route 3 Paris, AR 71855
Dear Representative Willems:
This is in response to your request for an opinion concerning Act 171 of 1989 and Amendment 59 to the Arkansas Constitution. Specifically, you note that Act 171 authorizes school districts, with voter approval, to collect a tax restricted for capital outlay on real and personal property. You then note that in Clark v. Union Pacific Railroad Company, 294 Ark. 586, 745 S.W.2d 600 (1988), the Supreme Court held that personal property must be exempted from new school district levies until such time as the real and personal property rates are "equalized" under Amendment 59. Your questions, relative to these facts, are as follows:
1. If the voters of a school district approve a capital outlay millage as provided by Act 171 of 1989, should the millage be levied against real property, personal property, or both?
2. If the voters of a school district approve a capital outlay millage for real and personal property, and the answer to No. 1 is that the capital outlay millage should only be applied to real property, should the quorum court levy the capital outlay millage only on real property?
In response to your first question, it is clear, in my opinion, under the Clark decision, that up until the point at which the rates in a county are "equalized," any new school district levies must be applied only to real property. Act 171 authorizes the imposition of a millage of up to two mills.* If the current disparity in real and personal property rates is more than two mills, that is, the personal property millage is two mills or greater than the real property millage, then the new levy should be collected only against real property. If the current disparity is less than two mills (i.e., one mill), then one mill of the new levy should be collected against real property only and the remaining mill should be collected equally upon real and personal property. If the rates have already equalized in the county, then the entire millage is to be applied equally against the real and personal property. ___________. * The act authorizes the imposition of "a tax not to exceed three percent (3%) of a school district's current expenses or two (2) mills whichever is less." ___________.
In response to your second question (whether after approval of the Act 171 real and personal property millage by the voters, the quorum court should only levy the millage against real property), it is my opinion that the quorum court may make this decision with the advice of the counsel to whom it ordinarily looks for legal advice. The quorum court is free to levy the millage against real and personal property, but if the rates have not equalized, under Clark, it may only be COLLECTED against real property.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana L. Cunningham.