Did Act 573 of 2015 actually change how Arkansas counties value off-premises billboards for property tax, and could the rest of the Act survive if one section is struck?

Plain-English summary

A state senator asked four linked questions about Act 573 of 2015, which dealt with the valuation of off-premises advertising signs (billboards) for property tax purposes. The first three asked whether the Act established valuation methods, whether it complied with Article 16, § 5(a) of the Arkansas Constitution (which requires a three-fourths vote in each house of the General Assembly to "establish the methods and procedures for valuation of property for taxation purposes"), and whether the Act was binding if it violated that vote requirement. Act 573 had passed with 18 yea votes in the Senate and 67 in the House, short of three-fourths in both chambers.

The AG declined to opine on the first three questions because tax-assessment-statute interpretation is the statutory job of the Arkansas Assessment Coordination Department, not the AG. The ACD has general supervision and control over property valuation, assessment, and equalization under Ark. Code Ann. § 26-24-102 and -105, and its decisions about administering tax laws bind county assessors under § 26-24-106(b). While the AG is an advisor to the ACD, the office is not otherwise charged with answering tax-assessment questions.

The AG did answer the severability question. An Arkansas act may be unconstitutional in part and valid as to the rest, even without a severability clause. The test is whether the provisions are so connected in meaning that the legislature would not have passed one without the other. If the unconstitutional portion can be excised and what remains is complete in itself and capable of being executed in accordance with the apparent legislative intent, the rest will be sustained.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Article 16, § 5(a) of the Arkansas Constitution requires a three-fourths vote in each house of the General Assembly to establish "methods and procedures for valuation of property for taxation purposes." The senator's questions raised the procedural question whether Act 573 cleared that bar.

The Arkansas Assessment Coordination Department was created by Act 436 of 1997, which transferred the Assessment Coordination Division of the Public Service Commission to the ACD by Type 2 transfer (§§ 25-28-101 and -102). The older statutes cited in this area sometimes refer to the PSC, but those references are now properly read as ACD references. Under § 26-24-106(a), the ACD has general supervision and control over valuation, assessment, and equalization of property under the revenue laws. Section 26-24-106(b) provides that the ACD answers questions in accordance with the AG's advice and that its opinions, rules, and orders bind public officers until reversed by a court of competent jurisdiction. The Arkansas Supreme Court has repeatedly endorsed this allocation (Potlatch v. Arkansas City Sch. Dist.; Tuthill v. Arkansas County Equalization Board).

The AG's severability discussion drew on a line of cases. Smith v. Bentley and Faubus v. Kinney articulated the test of whether parts are so connected in meaning that one would not have passed without the other. Borchert v. Scott confirmed that a remainder will be sustained if it is complete in itself and capable of being executed consistently with apparent legislative intent, even without a severability clause. McGhee v. Arkansas State Bd. of Collection Agencies (citing City of North Little Rock v. Pulaski County) added the modern formulation: courts look to whether a single purpose is meant to be accomplished and whether the sections of the act are interrelated and dependent. The presence of a severability clause is a factor but is not alone determinative.

Common questions

Why didn't the AG just say whether Act 573 set valuation methods?

Because that question is the ACD's responsibility under § 26-24-106(b). The AG only opines on tax assessment questions when the ACD asks, and the AG is the advisor to that agency. If a senator wants a direct interpretation of the Act for assessors, that channel runs through the ACD.

The Act passed with 18 yea votes in the Senate, less than three-fourths. Doesn't Article 16, § 5(a) make it unconstitutional?

The AG did not answer that. The constitutional question turned on whether Act 573 actually "established the methods and procedures for valuation of property for taxation purposes," which the AG identified as a tax-assessment question for the ACD.

Does an Arkansas statute need a severability clause to survive partial unconstitutionality?

No. The opinion makes clear that the absence of a severability clause is not fatal. The test is whether the remaining provisions can stand independently and accomplish the legislature's apparent purpose. A severability clause is a factor courts consider, but it is not the deciding fact.

What questions are within the AG's authority on Act 573?

Procedural and constitutional analyses that do not depend on interpreting the substantive valuation methodology. The AG could address severability because that is a general legal doctrine, not a tax-assessment-statute interpretation question. Direct application of the Act to billboards would require going through the ACD.

Citations

• Ark. Code Ann. § 26-24-102 (general powers of ACD)
• Ark. Code Ann. § 26-24-105 (supervisory powers)
• Ark. Code Ann. § 26-24-106(a) (general supervision and control over property valuation)
• Ark. Code Ann. § 26-24-106(b) (binding effect of ACD interpretations)
• Ark. Code Ann. §§ 25-28-101 to -102 (Type 2 transfer creating ACD)
• Act 573 of 2015 (off-premises advertising sign valuation)
• Act 436 of 1997 (ACD creation)
• Arkansas Constitution Article 16, § 5(a) (three-fourths vote for valuation methods)
• Potlatch v. Arkansas City Sch. Dist., 311 Ark. 145, 842 S.W.2d 32 (1992)
• Tuthill v. Arkansas County Equalization Board, 303 Ark. 387, 797 S.W.2d 439 (1990)
• Smith v. Bentley, 493 F. Supp. 916 (D.C. Ark. 1980) (severability test)
• Faubus v. Kinney, 239 Ark. 443, 389 S.W.2d 887 (1965) (severability test)
• Borchert v. Scott, 248 Ark. 1041, 460 S.W.2d 28 (1970) (severability without clause)
• McGhee v. Arkansas State Bd. of Collection Agencies, 375 Ark. 52, 289 S.W.3d 18 (2008)
• City of North Little Rock v. Pulaski County, 332 Ark. 578, 968 S.W.2d 582 (1998)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2015-085
November 12, 2015
The Honorable Joyce Elliott
State Senator
P. O. Box 4248
Little Rock, AR 72214
Dear Senator Elliott:
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
This is in response to your request for an opinion on the following questions concerning Act 573 of 2015:

1. Does Act 573 of 2015, especially Section 2, establish the methods and procedures for valuation of off-premise advertising signs for taxation purposes?
2. Is Act 573 of 2015, especially Section 2, in compliance with the Arkansas Constitution, Article 16, § 5(a), when:
   a. Article 16, § 5(a) requires a vote of not less than three-fourths of the members of each house in the General Assembly in order to "establish the methods and procedures for valuation of property for taxation purposes," and
   b. Act 573 of 2015 received 18 yea votes in the Senate and 67 yea votes in the House?
3. If the answer to question 2 is "no," then is Act 573 of 2015 binding regarding the methods and procedures set forth in the Act for valuation of off-premises advertising signs?
4. If the answer to question 2 is "no," and Section 2 is unconstitutional, and the Act lacks a severability clause, is the entire Act void due to its unconstitutionality?

RESPONSE

Questions that arise in construing statutes affecting the assessment of taxes are within the purview of the Arkansas Assessment Coordination Department ("ACD"). The ACD advises and instructs county assessors in the process of exercising its general supervision and control over the valuation, assessment, and equalization of property under the revenue laws. The ACD's decisions concerning the administration of the state's tax laws are binding upon the county assessors. While the Attorney General is an advisor to the ACD in this regard, the Attorney General is not otherwise charged with providing opinions on tax assessment questions.

I must therefore respectfully decline to opine on the above questions concerning property valuation under Act 573 of 2015. I will note in closing, however, as to your last question regarding severability, that an act may be unconstitutional in part and be valid as to the remainder, notwithstanding the absence of a severability clause. The test for determining whether the provisions of a legislative enactment are severable is whether the provisions are so connected together in meaning that it cannot be presumed that the legislature would pass one without the other. If, when the unconstitutional portion of the act is stricken, that which remains is complete in itself and capable of being executed in accordance with the apparent legislative intent, independent of that which is invalid, it will be sustained.

Sincerely,
Attorney General

(Footnote 1: Ark. Code Ann. § 26-24-106(a) (Repl. 2012). This statute and the other statutes cited below refer to the power and authority of the "Arkansas Public Service Commission." This is properly interpreted as a reference to the ACD following the enactment of Act 436 of 1997, which created the ACD and transferred the Assessment Coordination Division of the Arkansas Public Service Commission to the ACD by a Type 2 transfer. See Ark. Code Ann. §§ 25-28-101 & -102 (Repl. 2014).)

(Footnote 2: See also Ark. Code Ann. §§ 26-24-102 & -105 (Repl. 2012); Potlatch v. Arkansas City Sch. Dist., 311 Ark. 145, 842 S.W.2d 32 (1992); Tuthill v. Arkansas County Equalization Board, 303 Ark. 387, 797 S.W.2d 439 (1990).)

(Footnote 3: Ark. Code Ann. § 26-24-106(b).)

(Footnote 4: Id. (authorizing the ACD to answer questions "in accordance with the advice and opinion of the Attorney General" and providing that "[s]uch opinions and rules, regulations, orders, and instructions of the [ACD] prescribed and issued in conformity therewith shall be binding upon all officers ... until they are reversed, annulled, or modified by a court of competent jurisdiction.").)

(Footnote 5: Smith v. Bentley, 493 F. Supp. 916 (D.C. Ark. 1980); Faubus v. Kinney, 239 Ark. 443, 389 S.W.2d 887 (1965).)

(Footnote 6: Borchert v. Scott, 248 Ark. 1041, 460 S.W.2d 28 (1970). See also McGhee v. Arkansas State Bd. of Collection Agencies, 375 Ark. 52, 63-64, 289 S.W.3d 18 (2008) ("To determine whether the invalidity of part of an act is fatal to the entire legislation, we look to: (1) whether a single purpose is meant to be accomplished by the act, and (2) whether the sections of the act are interrelated and dependent upon each other. See City of North Little Rock v. Pulaski County, 332 Ark. 578, 968 S.W.2d 582 (1998). The mere fact that an act contains a severability clause is to be considered, but is not alone determinative. See id.").)