{ "id": 243471, "name": "Charles MAAS v. CITY of MOUNTAIN HOME", "name_abbreviation": "Maas v. City of Mountain Home", "decision_date": "1999-06-17", "docket_number": "98-1337", "first_page": "202", "last_page": "208", "citations": [ { "type": "official", "cite": "338 Ark. 202" }, { "type": "parallel", "cite": "992 S.W.2d 105" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "328 Ark. 296", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 50268 ], "weight": 2, "year": 1997, "opinion_index": 0, "case_paths": [ "/ark/328/0296-01" ] }, { "cite": "214 Ark. 649", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8724486 ], "weight": 2, "year": 1949, "opinion_index": 0, "case_paths": [ "/ark/214/0649-01" ] }, { "cite": "332 Ark. 489", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 377652 ], "weight": 3, "year": 1998, "pin_cites": [ { "page": "500" } ], "opinion_index": 0, "case_paths": [ "/ark/332/0489-01" ] }, { "cite": "Ark. Code Ann. \u00a7\u00a7 26-75-307", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "opinion_index": 0 }, { "cite": "308 Ark. 357", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1904339 ], "weight": 2, "year": 1992, "opinion_index": 0, "case_paths": [ "/ark/308/0357-01" ] }, { "cite": "332 Ark. 214", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 377694 ], "weight": 2, "year": 1998, "opinion_index": 0, "case_paths": [ "/ark/332/0214-01" ] } ], "analysis": { "cardinality": 533, "char_count": 10555, "ocr_confidence": 0.724, "pagerank": { "raw": 9.040569086499682e-08, "percentile": 0.5042651135259237 }, "sha256": "f45975ebbb34b7149708f796632051af5a3433daa2458d384cda5e83c3a55cfc", "simhash": "1:57e4b067f4a2b7f2", "word_count": 1763 }, "last_updated": "2023-07-14T15:43:54.470477+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Charles MAAS v. CITY of MOUNTAIN HOME" ], "opinions": [ { "text": "Lavenski R. Smith, Justice.\nThis is an illegal-exaction case. Appellants, Citizens of Mountain Home, Arkansas, contend Mountain Home (\u201cThe City\u201d), appellees herein, violated Article 16, Section 11, of the Arkansas Constitution by using sales-tax proceeds contrary to exclusive uses contained in City Ordinance No. 646. We agree and reverse.\nOn April 9, 1981, the City passed Ordinance No. 646, which levied a one-cent sales tax. The following month, the City conducted a special election wherein the voters could approve or reject the proposed tax. Prior to the election, on April 23, 1981, the City published the full text of Ordinance 646 in the Baxter Bulletin, the newspaper of record for Baxter County. The ordinance contained the following title:\nOrdinance 646\nAn ordinance levying a local sales (gross receipts) tax; calling of a special election on the question of levying such tax; designating a ballot title for use at such election; specifying the use of proceeds of such tax, providing for rebate; and for other purposes.\nIn addition to its prefatory clauses, the ordinance contained twelve numbered sections detailing its provisions. Sections two, five, and seven are the focus of this appeal. They provided as follows:\nSection 2. Tax Imposed \u2014 Rate\nThere is hereby levied a local sales (gross receipts) and use tax at the rate of one (1%) percent of the receipt from the sale at retail within the City of all items which are subject to taxation under the Arkansas Gross Receipts Tax Act of 1941, Act 386 of the 1941 Acts of Arkansas, as said Act has been heretofore or may be hereinafter amended, and under the Arkansas Compensating Tax Act of 1949, Act 487 of the 1949 Acts of Arkansas, as said Act has been heretofore amended, and by Act 990 of 1975 as amended by Act 133 of 1981.\nSection 5. Ballot Presentation and Ballot Form\nThe ballot presentation and title shall be in the following form:\n\u201cShall there be levied a local sales (gross receipts) and use tax at the rate of one percent (1%) on the receipt from the sale at retail within the corporate limits of the City of Mountain Home of all items which are subject to taxation under the Arkansas Sales Tax Act; (Arkansas Gross Receipts Tax Act of 1941, Act 386 of the 1941 Acts of Arkansas), as said Act has been heretofore or may be hereinafter amended, and under the Arkansas Use Tax Act (Arkansas Compensating Tax Act of 1949, Act 487 of the 1949 Acts of Arkansas), and pursuant to Act 990 of 1975 as amended by Act 133 of 1981, as said Acts have been heretofore or may be hereinafter amended?\u201d\n\u201cFor adoption of a one percent (1%) local sales and use tax within the City. . . ( )\u201d\n\u201cAgainst adoption of a one percent (1%) local sales and use tax within the City . . . . ( )\u201d\nSection 7. Designation of Receipts\nRevenues received from the collection of such tax in the 1981 calendar year shall be used exclusively for streets.\nRevenues received from the collection of such tax after January 1, 1982, shall be distributed as follows:\n(I) 47.00% not to exceed THREE HUNDRED AND FIFTY THOUSAND DOLLARS per annum shah be deposited in a special fund to be used exclusively for water and sewer improvements; and\n(II) 8.00% not to exceed SIXTY THOUSAND DOLLARS per annum shall be deposited in a special fund to be used exclusively for payment upon bonds to be issued for a new swimming pool; and\n(III) 45.00% or the balance shall be deposited in a special fund to be used exclusively for streets and drainage.\nThe voters approved the tax on May 5, 1981. Following the election, the city council spent the tax proceeds in accordance with Section 7 in succeeding years until 1987. Beginning that year and each subsequent year, the council voted to amend section 7 of the ordinance and use the proceeds for purposes other than originally designated.\nAppellants filed suit on January 10, 1996, contending the City had misapplied public funds in violation of Art. 16, \u00a7 13, of the Arkansas Constitution. The City answered on January 26, 1996, denying that any illegal exaction occurred. Following discovery, class certification, and various amended pleadings, the parties filed stipulations of fact on July 8, 1998. They mutually submitted the matter to the court for summary judgment on the issue of liability. The trial court granted appellee\u2019s summary-judgment motion on August 3, 1998. In its order, the court found that the ballot title in the 1981 election contained no specified uses for funds collected by the tax. Thus, upon voter approval, the measure created a general sales and use tax which could be used for general purposes. The City\u2019s subsequent use of revenue for purposes other than as specified in Section 7 were deemed permissible resulting in no illegal exaction.\nStandard of Review\nThe trial court used summary judgment to resolve this case in that the parties filed with the court stipulated facts thereby leaving no issues of fact for trial. Motions for summary judgment are governed by Ark. R. Civ. P. 56, which provides that a party may move with or without supporting affidavits for a summary judgment upon all or any part of a claim. A summary judgment should be granted only when it is clear that there is no issue of fact to be litigated. Ragar v. Brown, 332 Ark. 214, 964 S.W.2d 372 (1998); Dillard v. Resolution Trust Corp., 308 Ark. 357, 824 S.W.2d 387 (1992). There are no facts in dispute.\nIllegal Exaction\nThe gravaman of appellant\u2019s appeal is his contention that the City\u2019s shifting of tax revenue to uses other than those specified in Section 7 of its levying ordinance constitutes an illegal exaction in violation of Article 16, \u00a7 11, of the Arkansas Constitution. Article 16, \u00a7 11, provides:\nNo tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same; and no monies arising from a tax levied for one purpose shall be used for any other purpose.\nIn support of this contention, Maas relies upon Ark. Code Ann. \u00a7\u00a7 26-75-307 \u2014 26-75-309 (1975), which requires voter approval for the implementation of a local sales and use tax. Appellant also relies upon our recent holding in Daniel v. Jones, 332 Ark. 489, 966 S.W.2d 226 (1998).\nIn Daniel, we dealt with a very similar argument with'respect to a county\u2019s obligation to apply sales-tax proceeds consistent with the purposes stated on the election ballot voters used to approve the tax. We held that \u201cthe voters of White County were entitled to rely upon the information provided to them in the levying ordinance and the ballot when casting their votes; hence, any use of the revenues for purposes other than those provided constitutes an illegal exaction.\u201d Id. at 500. The instant case differs from Daniel in that while the levying ordinance (646) contained specific restrictions on permissible uses, the ballot title contained none.\nAppellee contends that the absence of specific restrictions in the ballot title made the sales tax a general-purpose tax that could be used for any legitimate government purpose regardless of the restrictions contained in the levying ordinance. Appellee cites language in Daniel and Arkansas-Missouri Power Corp. v. City of Rector, 214 Ark. 649, 217 S.W.2d 335 (1949), to the effect that the ballot title is the final word of information and warning to which the electors had the right to look.\nAdditionally, appellees construe the case of Oldner v. Villines, 328 Ark. 296, 943 S.W.2d 574 (1997), to say that the ballot question alone controls the authorized purpose of the tax, and that only an unauthorized purpose is forbidden by the Constitution. They argue since the ballot itself contained no specific purpose the revenues generated by the tax were thus general-purpose revenues and susceptible to discretionary spending by the council. The trial court accepted appellee\u2019s argument and ruled accordingly.\nA careful review of Daniel, Oldner, the applicable statutes, and the constitution compel us to a contrary conclusion. We disagree with appellee\u2019s characterization of our holdings in Oldner and Daniel. In Oldner, neither the ballot title nor the levying ordinance stated the purpose of the tax. This case differs significandy in that the levying ordinance in Section 7 contains very specific and exclusive purposes for the tax revenue.\nLikewise, this case also differs from Daniel in that while specific restrictions were in the levying ordinance, none were on the ballot. In Daniel, the purposes were stated in both the ordinance and on the ballot. The instant case presents us with the new question of whether specific, exclusive purposes stated within the levying ordinance are sufficient to prohibit contrary uses in the absence of any specific limitation stated on the ballot. We hold, consistent with our rulings in Oldner and Daniel, that the voter is entitled to rely upon both the levying ordinance and the ballot title. Publication of the ordinance in its entirety informed the city\u2019s electorate about each and every provision contained within it. In circumstances such as here, where the city\u2019s citizens voted approving a levying ordinance containing specific, exclusive purposes, the absence of those exclusive purposes from the ballot did not transform the levying ordinance into a general-purpose sales tax. The ballot is the \u201cfinal word\u201d to the voters only in the sense that it is the last source of information, not in the sense that it is conclusive of the measure\u2019s effects. It must be read in conjunction with the levying ordinance.\nAppellees argue that only Section 2 of the ordinance levied the tax. They also argue that Section 3 of the ordinance, which called for the election, referenced only Section 2 and contained no use limitation; nor did the ballot presentation and ballot form found in Section 5 contain the limitations. However, appellee fails to read the ordinance as a whole, which would require it to read Section 7 and its exclusive-use provisions as an integral part of the levying ordinance.\nTherefore, we hold the trial court erred in finding that the City\u2019s use of sales-tax revenue for purposes other than those specified in Section 7 of the levying ordinance was not an illegal exaction. We reverse and remand for the trial court to address the issue of damages.\nReversed and remanded.", "type": "majority", "author": "Lavenski R. Smith, Justice." } ], "attorneys": [ "Nichols & Campbell, P.A., by: H. Gregory Campbell; and Richard S. Paden, for appellants.", "Johnson, Sanders & Morgan, by: Roger L. Morgan, for appellees." ], "corrections": "", "head_matter": "Charles MAAS v. CITY of MOUNTAIN HOME\n98-1337\n992 S.W.2d 105\nSupreme Court of Arkansas\nOpinion delivered June 17, 1999\nNichols & Campbell, P.A., by: H. Gregory Campbell; and Richard S. Paden, for appellants.\nJohnson, Sanders & Morgan, by: Roger L. Morgan, for appellees." }, "file_name": "0202-01", "first_page_order": 230, "last_page_order": 236 }