dissenting. I agree with the majority except to the extent that they conclude that the street-state-line classification is rationally related to the purpose of Act 48. For this reason alone, I must respectfully dissent.
As the majority correctly acknowledges, when deciding whether an act is special or local legislation we must first determine whether the mechanics of the act are rationally related to its purpose. In this respect, the majority concludes that the income-tax exclusion contained in Act 48 is rationally related to the purpose of protecting “the border city by removing the inducement for that city to settle across the state line.” I agree.
The majority, however, loses sight of the second and more important requirement that there must also be a rational basis for the classifications that limit the application of the act to only one area of the state. McCutchen v. Huckabee, 328 Ark. 202, 943 S.W.2d 225 (1997); Foster v. Jefferson County Bd. of Election Comm’rs, 328 Ark. 223, 944 S.W.2d 93 (1997); Board of Trustees v. City of Little Rock, 295 Ark. 585, 750 S.W.2d 950 (1988). As recognized by the United States Supreme Court in F.C.C. v. Beach Communications, Inc., 508 U.S. 307 (1993), the heart of the constitutional challenge is that when the legislature draws lines, as it inevitably must, those lines must not be drawn arbitrarily, but instead their placement must be rationally related to the purpose of the Act.
In passing Act 48, the General Assembly chose to draw a line between border cities that were separated by a street-state line (admittedly only Texarkana), and those that were not. I can find no rational basis for this distinction. The majority claims that the street-state-line classification limits the application of Act 48 to border cities that are “inextricably intertwined with their out-of-state counterparts while excluding border cities that are not as closely related.” I disagree.
The explanation offered by the majority ignores the fact that other border cites could merge, just as Texarkana has, but not have a street that runs down the state line. Instead, there could be an alley, or a fence, or some other physical dividing point, or nothing at all that marks the border dividing otherwise “inextricably intertwined” cities. It is equally plausible that two integrated cities may be separated by a state border that meanders, thus making it impractical to place “a street” on the state line.
The majority contends that this is mere “speculation.” Speculation, however, is the heart of a rational-basis analysis, for we have been consistently reminded by the United States Supreme Court to look for “plausible” or “conceivable,” but not actual, reasons for the classifications that limit an act to only one area or group of people. See, e.g., F.C.C. v. Beach, supra; Sullivan v. Stroop, 496 U.S. 478 (1990); United States R.R. Retirement Bd. v. Fritz, 449 U.S. 166 (1980). Likewise, in Streight v. Ragland, 280 Ark. 206, 655 S.W.2d 459 (1983), we said that when performing the rational-basis analysis, “the judiciary is allowed to hypothesize.”
Finally, the majority mentions cases where we have reviewed acts that created exemptions for border cities. In none of these cases, however, were the statutory exemptions extended only to border cities that were separated by a street-state line. Lockwood v. State, 249 Ark. 941, 462 S.W.2d 465 (1971); Hardin v. Croom, 203 Ark. 519, 157 S.W.2d 520 (1942); Wiseman v. Phillips, 191 Ark. 63, 84 S.W.2d 91 (1935), Bollinger v. Watson, 187 Ark. 1044, 63 S.W.2d 642 (1933).
In sum, I agree with the majority that the tax-equalizing purposes of Act 48 are rational, and perhaps laudable. I, however, cannot agree that only a border city that has a street running down the state line will be faced with the problem that this act was intended to alleviate. The street-state-line classification contained in Act 48 is arbitrary, and accordingly I would hold it unconstitutional. For this reason, I must respectfully dissent.
Newbern, J., joins this dissent.