Frank v. Barker

RAY Thornton, Justice.

Appellants are members of the stice. Lake School District, the County Clerk of Saline County, the County Collector of Saline County, and the County Assessor of Saline County. James Christopher, a taxpayer in the Fountain Lake School District, and a resident of Garland County, is also an appellant seeking intervention for himself and all others similarly situated. Appellees, taxpayers in the Fountain Lake School District, reside in Saline County and in the Fountain Lake School District, which includes part of Saline County and part of Garland County.

On November 28, 1994, appellees filed a complaint against the Fountain Lake School District and Saline County officials alleging that in July 1993, the State Assessment Coordination Division advised the Saline County Judge that the preliminary ratio of the assessed value of real property to actual value of the real property had fallen below eighteen percent and that the state turnback funds to the county were in jeopardy. To cure this problem, reappraisal of land located in Saline County was suggested, and a reappraisal was done. In August 1994, the Saline County Equalization Board received the results of the reappraisal of property in Saline County, which showed that the aggregate value of such taxable real property within the school district for 1994 had increased 28.8 percent over that in 1993.

At the core of appellees’ complaint is their assertion that the collection of the 1994 school district tax constitutes an illegal exaction because the school district stands to receive revenues exceeding by more than ten percent those received in 1993. Appellees assert that the school district must roll back its rate of taxation under Amendment 59 to prevent tax revenues from increasing more than ten percent above the base year and that if such rollback does not occur, the tax is an illegal exaction. Appellees further complain that a number of statutory tasks related to the reassessment of property have not been performed by the school district and by Saline County public officials.

The complaint sought a writ of mandamus (1) to the Saline County Clerk, requiring him to perform his duties, and (2) to the school district to complete the rollback form and roll back its tax rate pursuant to Amendment 59. Appellees further sought a writ of prohibition to prevent the collection of 1994 real property taxes in violation of Amendment 59. Next, appellees prayed for judgment declaring the collection of 1994 real property taxes in the school district without a rollback would constitute an illegal exaction under Amendment 59 in that revenue collected in 1994 would be more than ten percent above revenues collected in 1993. Finally, they sought to enjoin appellees from further violations of Amendment 59.

The school district moved to dismiss appellees’ complaint for lack of subject-matter jurisdiction. The Saline County Clerk and Collector made similar motions, and asserted that the appellees’ claims were required to be brought in county court because they involved county taxes. Appellees replied that the taxes at issue were school district taxes as opposed to county taxes, and that the circuit court was the appropriate forum. They further referred to their prayers for mandamus and prohibition, remedies that typically lie in circuit court.

After a hearing on the motions to dismiss, the trial court found that the school district tax was a county tax, and that under Foster v. Jefferson County Quorum Court, 321 Ark. 105, 901 S.W.2d 809 (1995), supp. op. granting reh’g, 321 Ark. 116-A, 901 S.W.2d 815 (1995), jurisdiction was vested exclusively in county court. The trial court also concluded that the matters more appropriately lie in chancery court as opposed to circuit court because injunctive relief was sought. The trial court finally stated that it would dismiss the case without prejudice so that appellees could file in either chancery or county court, or appeal the matter. An order of dismissal was entered.

The case was appealed to us, and we issued an opinion on March 17, 19971. On appeal, we reversed the trial court and held that school district taxes are not county taxes, and, for that reason, exclusive jurisdiction does not lie in county court. We further held that appellee had asserted a valid claim for an illegal exaction pursuant to Ark. Const, art. 16, § 13. The case was reversed and remanded.

On remand, appellees amended their complaint to include tax years after 1994 and requested that the defined class of taxpayers be restricted to only those taxpayers of the school district who reside in Saline County. The school district appellants contended that the class must include all taxpayers residing-in the school district and on January 6, 1999, a hearing was held on the matter. On February 5, 1999, James Christopher, a taxpayer resident of the Fountain Lake School District who resides in Garland County filed a motion to intervene. Following a hearing, the trial court issued an order certifying a class action and restricting the members of the class to those school district taxpayers with real property in Saline County. This order was entered on February 18, 1999. In an order entered March 3, 1999, James Christopher’s motion to intervene was denied.

On appeal, the trial court’s class-certification order is challenged as well as the denial of appellant James Christopher’s motion to intervene. We reverse and remand.

At the outset, we note that this case involves a class action resulting from Ark. Const, art. 16, § 13, which states:

Any citizen of any county, city or town may institute suit in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever.

Id.

In their point on appeal, appellants contend that the trial court erred when it failed to include within the class the school district taxpayers who reside in Garland County. Appellees respond to this contention by arguing that, because Garland County has not conducted a reappraisal, Amendment 59’s rollback provisions are not triggered and therefore the school district taxpayers who reside in Garland County have not been subjected to an illegal exaction and are not entitled to membership in the class.

We have recognized that our common law makes an illegal-exaction suit under Article 16, section 13, of the Arkansas Constitution a class action as a matter of law. Carson v. Weiss, 333 Ark. 561, 972 S.W.2d 933 (1998). We have also held that Rule 23 of the Arkansas Rules of Civil Procedure does not govern the class action brought into existence by the constitutional illegal-exaction provision; rather, it may serve as a rule of procedure in a class-action case of this nature. Id.

Remaining mindful of this principle, we turn to the case now on review. In this case, the taxpayers in the Fountain Lake School District claim an illegal exaction pursuant to Amendment 59. Amendment 59 in part states:

(a) Whenever a county wide reappraisal or reassessment of property subject to ad valorem taxes made in accordance with procedures established by the General Assembly shall result in an increase in the aggregate value of taxable real and personal property in any taxing unit in this State of ten percent (10%) or more over the previous year the rate of city or town, county, school district, and community college district taxes levied against the taxable real and personal property of each such taxing unit shall, upon completion of such reappraisal or reassessment, be adjusted or rolled back, by the governing body of the taxing unit, for the year for which levied as provided below. . .

Ark. Const, art. 16, § 14 (emphasis added).

To determine whether the trial court erred in excluding school district taxpayers residing in Garland County from the class it is necessary to interpret Amendment 59. As we interpret a provision of the Arkansas Constitution, we have said that when the language of a provision is plain and unambiguous, each word must be given its obvious and common meaning, and neither rules of construction nor rules of interpretation may be used to defeat the clear and certain meaning of a constitutional provision. Hoyle v. Faucher, 334 Ark. 529, 975 S.W.2d 843 (1998).

Looking to the plain language of Amendment 59, it is clear that a “taxing unit,” as it is used in the amendment, and as it applies to this case, refers to the “school district.” We note that long before Amendment 59 was adopted school districts were formed that included parts of more than one county. To facilitate the formation of such school districts, and for other purposes, the people of the State of Arkansas adopted Initiated Act Number 1 of 1948. In light of the existence of districts spanning two or more counties, it is instructive that the drafters of Amendment 59 did not choose to differentiate between a school district located in only one county from a school district spanning two or more counties. The amendment did not provide a different treatment for such “fringe districts,” but without exception it referred to all school districts, including those in more than one county, as “taxing units.”

Based on the plain meaning of the language in Amendment 59, we conclude that the Fountain Lake School District includes all taxpayers in the district, whether they reside in Saline County or Garland County. We note that in order to determine whether a rollback is required in the “taxing unit” it is necessary to include “all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever.” The phrase “all others interested” certainly includes all taxpayers within the school district which is the “taxing unit.”

Additionally, we note that the plain language of the amendment, when referring to the rollback, which the taxpayers in the taxing unit may be entitled to, refers to “the rate” of school district taxes levied against the taxable real and personal property in the school district being adjusted or rolled back. This language from the amendment does not grant any authority for a single taxing unit to impose various taxing rates. Instead it allows for a rollback when the whole taxing unit has been subjected to a ten percent increase in taxable real and personal property in a single year. Furthermore, the rollback of “the rate” is done by the “governing body of the taxing unit;” that is, by the board of the school district. We also note that any rollback of the rate of taxation must be uniform. The Arkansas Constitution in article 16, § 5 provides in part:

all real and tangible personal property subject to taxation shall be taxed according to its value, that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State. No one species of property for which a tax may be collected shall be taxed higher than another species of property of equal value. ...

Id. Pursuant to this constitutional language, it is clear that one uniform rate of taxation must be applied to property of equal value throughout the school district, which is the taxing unit. Additionally, we note that all members of the class share a common interest in the fair and uniform distribution of any rollback by a uniform reduction in the rate of taxation throughout the taxing unit. The dissent urges that the constitutional requirement of a uniform rate of taxation within a taxing unit has been overturned by the legislative enactment of Act 848 of 1981 partially codified at Ark. Code Ann. § 26-26-408 (Repl. 1997). However, we find no authority to support the proposition that a statutory provision overrides a constitutional principle.

Accordingly, we hold that the trial court’s order, which excluded taxpayers in Fountain Lake School District residing in Garland County from the class action, was erroneous. Therefore, we reverse the trial court’s order and remand the case to allow the trial court to include the Garland County residents of the Fountain Lake School District as members of the class arising as a matter of law from the illegal-exaction suit.

Appellant James Christopher, a taxpayer and resident of Fountain Lake School District, who resides in Garland County, in his separate point on appeal, argues that the trial court erred when it denied his motion to intervene. In response, appellees argue that Mr. Christopher’s motion to intervene was not filed in a timely manner. Because we have concluded that all taxpayers residing in the school district are included in the class arising as a matter of law from the illegal-exaction suit, it appears that Mr. Christopher and others similarly situated are members of the constitutionally established class. Because the attorneys for those taxpayers who reside in Saline County have vigorously argued that the taxpayers of the Fountain Lake School District that reside in Garland County should not be included in the class, we note that it may be appropriate for the trial court to appoint another attorney to ensure that the interests of those taxpayers are adequately protected.

Reversed and remanded.

GLAZE, J., not participating. Special Associate Justice Kelvin Wyrick joins. Corbin and Brown, JJ., dissent.

See Barker v. Frank, 327 Ark. 589, 939 S.W.2d 837 (1997)