How does an Arkansas county close out a leftover school district account decades after the district was dissolved, and how is the money divided among successor districts?

Plain-English summary

Clark County held an interest-bearing account of about $8,715.63 for the Okolona School District, which dissolved in 1987. Prosecuting Attorney C.A. Blake Batson asked how to calculate shares for the districts now serving the former Okolona area and how the county could disburse the money.

The AG said the substantive law in force when the district dissolved most likely governed ownership of the account. Under Ark. Stat. Ann. §§ 80-422 and 80-423, she expected each successor district's share to reflect the 1987 assessed value of real estate annexed to that district divided by the 1987 assessed value of real estate in the entire former district. For payment, she identified the county-claims process and a circuit-court interpleader as possible procedures. She did not choose a route for the parties.

This was a qualified answer. The AG did not know the precise district boundaries, whether the dissolution involved an agreement or court supervision, or where the account money originally came from. She said any of those facts could matter. The opinion therefore does not decide a specific dollar amount owed to each district.

Currency note

The opinion was issued in 2018 about a district dissolved in 1987. It explains the AG's view of the law applicable to that dissolution. A county addressing a different account must establish its own governing documents, boundaries and funds before applying any formula.

Why the 1987 law matters

The AG distinguished ownership from payment procedure. She said the current school-district consolidation statutes could not be applied retroactively to change property rights created when Okolona dissolved. The statutes then in force included Ark. Stat. Ann. §§ 80-422 and 80-423. The Arkansas Supreme Court had upheld an assessed-value division of a dissolved district's cash in School Dist. No. 5 of Independence Cnty. v. School Dist. No. 3 of Independence Cnty.

The opinion says a successor's share should be based on real-estate values as of January 1, 1987: the assessed value of territory it received over the assessed value of the entire former Okolona district. A footnote says assigning interests by assessed-value ratio also ensures compliance with Ark. Const. art. 14, § 3, which restricts appropriating a district's tax funds to another district. The opinion does not use that clause to answer a separate question about paying all funds to one school.

How the county could distribute the account

County claims. Ark. Code Ann. § 14-23-101 et seq. allows a claimant to present a demand to the county court with supporting documentation. The court can investigate, including examining parties and requiring relevant records. If satisfied that a claim should be paid, it can order payment. The AG did not decide which interested party should file which claim or what evidence would establish a particular share.

Circuit-court interpleader. Ark. R. Civ. P. 22 allows a stakeholder facing multiple claims to seek a court resolution. The AG said the Clark County Treasurer would likely be the plaintiff because the treasurer held the account, and the successor districts would likely be defendants. She left the identity of the actual parties, claims and defenses to the stakeholders and the court.

The AG regarded both as viable possibilities. Selecting a procedure and resolving the underlying facts required the interested parties to consult counsel; she did not make that strategy decision.

Common questions

Can the county calculate the shares using today's assessed values?

The AG's view was that the relevant values were those for the annexed territory and the former district on January 1, 1987, when Okolona dissolved. She still needed the boundaries and other facts before any final allocation.

Could the county give the account to one school serving former Okolona students?

The opinion does not decide that scenario. It identifies the assessed-value ratio as the likely rule for successor districts and notes that an agreement, court order, boundaries or the funds' original source could affect the disposition. It does not treat where former students attend today as the allocation formula.

Does the opinion choose county claims over interpleader?

No. It describes both as possible procedures and leaves the choice to the interested parties and their counsel.

What records should the parties look for?

The opinion points to the 1987 real-estate assessments, the boundaries of Okolona and the successor districts, any dissolution agreement or court order, and the original sources of the account funds. The AG said these unanswered facts might affect the result.

Source

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

Original opinion text

STAT E O F ARKAN SAS
ATTO RNEY G EN ERAL
LE SLI E RUTL EDG E

Opinion No. 2017-107

January 17, 2018

The Honorable C.A. Blake Batson
Prosecuting Attorney
Ninth-East Judicial District
414 Court Street
Arkadelphia, AR 71923

Dear Mr. Batson:

I am responding to your request for an opinion as to what steps may be taken to close an account maintained by the Clark County Treasurer on behalf of the Okolona School District, which was dissolved in 1987. You explain that students in the area formerly assigned to the Okolona School District now attend schools in the Gurdon, Arkadelphia, Centerpoint, and South Pike County School Districts. Since dissolution of the Okolona School District in 1987 (and presumably prior to that time), the Clark County Treasurer has held an interest-bearing account for the Okolona School District. The current account balance is approximately $8,715.63. In light of this background, you ask two questions, which I will address in reverse order:

1. How should the County calculate the amount of money to transfer from this account to various school districts which now serve the area formerly within the Okolona School District?

2. What is the procedure for the County to close this account?

RESPONSE

Factual variations (any one of which could be outcome-determinative) prevent me from definitively answering your questions. However, I can identify the controlling law and describe what I believe to be its most likely application. E lecting how then to proceed is beyond the scope of my authority when providing

323 CENTER STREET. Sum: 200 . LITTLE ROC K. A RKAN SAS 7220 1 TELE PH ONE (50 1) 682-2007 · FAX (50 1) 682-8084 ARKAN SASAG.GOV

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 2

an opinion. 1 Rather, that is a matter to be weighed by the interested stakeholders in consultation with legal counsel. 2

The substantive statutes that governed school-district dissolution in 1987 will, in my opinion, determine the property interests of the Gurdon, Arkadelphia, Centerpoint, and South Pike County School Districts ("successor districts") in the Okolona School District account. And those statutes create property interests in proportion to the tax bases that were annexed from the Okolona School District. Specifically, the successor districts will have shares in the Okolona School District account equal to the "assessed valuation of the real estate in that part of the territory" annexed to each district, divided by the "assessed valuation of the real estate in the entire district from which such property was taken. " 3

Once these shares have been calculated, one procedural option for distributing the funds held by the Clark County Treasurer is the county-claims process. 4 If the Clark County Court determined claims for the funds were properly supported, the court could order the county treasurer to remit payment to each successor district. 5 Another procedure for distributing the funds is an interpleader action in which the successor districts, "having claims against the [Clark County Treasurer,] may be joined as defendants" 6 in circuit court. But again, I cannot opine as to which of these options should be pursued as a matter of legal strategy.

1
See Ark. Code Ann. § 25-16-706(a)(l) (Repl. 2014) (The Attorney General "shall give his or her opinion to the prosecuting attorney of any district upon any legal question that concerns the financial interests of ... any county .... ") (emphasis added). 2 Cf id. at § 25-16-701 (Supp. 2015) ("During his or her term of office, the Attorney General shall not engage in the private practice of Jaw .... "). 3 Ark. Stat. Ann. § 80-423 ("Assumption of property, debts, and contracts of dissolved or annexed districts.") (Repl. 1980). 4 See Ark. Code Ann.§ 14-23-101 et seq.
5
See id. at §§ 14-23-103 ("Investigation") (Rep I. 2013), 105 ("Supporting Documentation, Requirements, Preservation") (Repl. 2013). 6 Ark. R. Civ. P. 22(a).

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 3

DISCUSSION

Question 1: How should the County calculate the amount of money to transfer from this account to various school districts which now serve the area formerly within the Okolona School District?

The threshold question with respect to how the Okolona School District's funds should be divided is which body of law governs the district's dissolution. It has long been held that the "power of the Legislature in enacting laws for the formation or dissolution of school districts is plenary," 7 so the relevant law will be statutory. But which statutes apply? To be sure, there is a current framework of statutes pertaining to the consolidation and dissolution of school districts. 8 These statutes must be applied prospectively, however, and not to the decades-old dissolution of entities like the Okolona School District.

First, the current statutes confer substantive rights on the districts that are formed, consolidated, and dissolved under their authority. 9 And because later legislation cannot "divest ... rights previously vested" 10 by a substantive statute, the current statutes "cannot be constitutionally applied retroactively." 11 Second, the current consolidation statutes do not indicate they should be applied retrospectively. 12 As a result, the property rights of the successors to the Okolona School District will be "determined according to statutes which were in force when the rights accrued "13

7
Special Sch. Dist. No. 60 v. Special Sch. Dist. No. 2, 181 Ark. 253, 25 S. W.2d 443, 445 ( 1930).
8
See Ark. Code Ann. §§ 6-13-1401 et seq. ("District Formation, Consolidation, and Annexation"), 1601 et seq. ("Administrative Consolidation"). 9 English, 2014 Ark. at 7-8, 452 S.W.3d at 571-72 ("A law is substantive when it ... creates, defines, and regulates the rights, duties, and powers of parties.") (internal quotation omitted). 10 Gillioz v. Kincannon, 213 Ark. 1010, 1018, 214 S.W.2d 212, 216 (1948) (quoting Coco v. Miller, 193 Ark. 999, 104 S.W.2d 209, 211 (1937)). 11 English, 2014 Ark. at 7, 452 S.W.3d at 571.
12
See English v. Robbins, 2014 Ark. 511 at 7, 452 S.W.3d 566, 571 ("Unless it expressly states otherwise, this court presumes the legislature intends for its laws to apply only prospectively.") (internal quotations omitted). 13 Gillioz, 213 Ark. at 1018, 214 S.W.2d at 216 (internal quotation omitted).

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 4

According to the background information you provided, the Okolona School District was consolidated in 1987. Thus, the consolidation statutes "in force" in 1987 will govern the division of the Okolona School District account among the successor districts. In my opinion, these consolidation statutes are found primarily at Ark. Stat. Ann. §§ 80-422 ("Division of property, debts, and contracts of dissolved districts") and 80-423 ("Assumption of property, debts, and contracts of dissolved or annexed districts"). 14

The substantive property right recognized in sections 80-422 and 80-423 is that "[a]ny new district that is created, or district to which new property is annexed, shall succeed to the property of the district dissolved .... " 15 And if a district annexes less than all of the dissolved district's territory, then the dissolved district's property is divided according to the following ratio:

[T]he district to which such property is annexed shall be entitled to the proportionate part of the personal property . . . ascertained on the basis . . . that the tax assessed valuation of the real estate in that part of the territory so taken bears to the tax assessed valuation of the real estate in the entire district from which such property was tak en . . . . 16

In a case applying the act later codified at section 80-423, the Arkansas Supreme Court upheld the division of a defunct school district's cash in proportion to the "assessed valuation" of its real estate. 17 A local board of education had "voted to

14
See Arkansas Statutes Annotated (Rep!. 1980). Sections 80-422 and 80-423 were repealed in 1993. They are codifications of Act 169 of 193 1, which remained the operative law for school- district consolidation and dissolution in 1987. Copies of sections 80-422 and 80-423, as well as other sections of the Arkansas Statutes Annotated discussed in this opinion, are enclosed for your reference. 15 Section 80-423 is materially identical to section 80-422, including the provision that surviving districts "shall succeed to all of the property of the district or districts dissolved .... " Ark. Stat. Ann. § 80-423. 16 Id. at § 80-423.
17
School Dist. No. 5 of Independence Cnty. v. School Dist. No. 3 of Independence Cnty., 214 Ark. 514, 216 S.W.2d 882 (1949).

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 5

dissolve [a] district and to divide its territory into two new districts." 18 The Court reviewed on appeal the board's order that assets of the dissolved district "be apportioned according to the ratio of the assessed value of real estate in each new district." 19 Noting that the "disagreement involve[ d] the division of moneys on hand" once the district dissolved, the Court found the governing statute compelled "division according to assessed values when part of a district is annexed .... "20 Consequently, the board was correct to assign the defunct district's funds to the successor districts according to a tax-assessment ratio. 21

I believe the successors to the Okolona School District are entitled to similar proportionate shares of the Okolona account. That is, each of the four successor districts will have a percentage-interest in the account equal to the "tax assessed valuation of the real estate" annexed to a given successor district, divided by "tax assessed valuation of the real estate in the entire [Okolona] district .... " 22 And in my opinion, the "assessed valuation" setting the ratio for each successor district derives from the real-estate tax basis as it existed in 1987, when the Okolona School District dissolved. Like school-district dissolution, taxation is a matter of statute 23 and generally governed by legislation "in force when the rights accrued 24
•••• " Moreover, the relevant assessment statutes provide that taxable value is

18
Id. at 515, 216 S.W.2d at 883.
19 Id.

20 Id.

21 Id. Assigning prope11y interests to successor districts according to an assessed-valuation ratio also ensures compliance with the constitutional mandate that school-district funds not be "appropriated to any other district than that for which [the tax] is levied." Ark. Const. ai1. 14, § 3. See, e.g., Op. Att'y Gen. 94-087 (considering the proper method of dividing a defunct district's tax revenues "among ... five annexing districts," and opining that "a significant constitutional issue would be raised ... if the distribution would result in monies from one district's annexed territory being transferred to a district from which the monies did not arise."). 22 Ark. Stat. Ann. § 80-423 (emphasis added).

23 See Ark. Const. ai1. 16 § 5(a) ("All real ... prope11y 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."). 24 Gillioz, 213 Ark. at 1018, 214 S.W.2d at 216 (internal quotation omitted). Although the "power of the General Assembly to pass a tax act retroactive in character is not questioned," a tax statute is applied prospectively "unless its terms show clearly a legislative intention that it should

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 6

fixed on the first day of the year of assessment. 25 Interests in the Okolona account must therefore be calculated based on the assessed value of the real property annexed to each successor district (as of January 1, 1987) compared to the assessed value of all real property in the former Okolona School District (as of January 1, 1987).

It is my opinion that the statutes governing property succession for dissolved school districts in 1987, together with the rules of real-estate assessment then in effect, are the substantive law applicable to your question about how the Okolona account should be divided. But there are a number of outstanding factual issues that prevent a more detailed answer. For example, it is unknown whether the Okolona School District was annexed according to a specific agreement among the successor districts, and unknown whether the process involved court supervision. 26 The precise physical boundaries of the successor districts relative to the footprint of the Okolona School District are unclear. And I am not aware of the original source, or sources, of the funds comprising the $8, 715 .63 in question. Investigating these fact-intensive issues (all potentially important to the disposition of the account) is outside the scope of an opinion from my office. 27

operate retrospectively." Du Laney v. Cont'! Life Ins. Co., 185 Ark. 517, 47 S.W.2d 1082, 1083 ( 1932). There is no such intent evidenced in the present-day assessment statutes. See, e.g., Ark. Code Ann. § 26-26-1101 (Rep I. 2012) ("Each year the county assessor shall, between the first Monday in January and July 1, appraise and assess all real property situated within the boundaries of the county."). 25 See Ark. Stat. Ann. § 84-426 (Rep!. 1980) ("All property in this State shall be assessed by the duly authorized authorities according to its value on the first day of January."); Ark. Stat. Ann. § 84-103( c) (Repl. 1980) (obligating the Public Service Commission to "file with the county judge
... not later than ten ( 10) days before the time for the beginning of the assessment of property ... a certificate showing the per centum of full and true market or actual value that it ... will use in valuing for taxation for that year .... "). 26 Cf Op. Att'y Gen. 2000-141 ("I have not been provided with any of the documentation reflecting the consolidation agreement between the . . . school districts, or any court order concerning the consolidation."). 27 See Op. Att'y Gen. 2017-028 ("I am unable to opine ... , as the level of fact-finding ... is beyond the scope of an Attorney General's opinion. A county's attorney or other local counsel should be consulted in such cases.").

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 7

Question 2: What is the procedure for the County to close this account?

You state in your opinion request that the Clark County Treasurer maintains the Okolona account. I take the reference to a count~ treasurer to mean there is no school-district treasurer responsible for the funds. 2 Thus, the question is how the Clark County Treasurer can disburse the shares (determined according to each successor district's assessed-valuation ratio) of the Okolona account. 29

This question focuses not on substantive rights, but on procedure. 30 And current procedural law regarding division of property at the municipal level may be applied retroactively to the Okolona account, which has existed since at least 1987. 31 In my opinion, the procedure most directly applicable is either the county- claims process 32 or a circuit-court interpleader of funds. 33 But as noted above, there are a number of unknown and possibly determinative facts. Gathering those facts and deciding how best to proceed are beyond the scope of my statutory authority. 34

The county-claims process allows "[a]ll persons having demands against any county [to] present them ... to the county court of the county for allowance or rejection." 35 The county court may "examine all the parties and witnesses" having an interest in the claim, and may "compel the production of all books, accounts,

28
Cf Ark. Code Ann. § 6-13-70l(a) (Repl. 2013) ("The board of directors of any school district in Arkansas is authorized to appoint a treasurer to handle the funds of the school district."). 29 See Op. Att'y Gen. 86-350 ("If the school does not have a district treasurer, the funds are retained by the County Treasurer, who disburses the funds in accordance with State law."). 30 See Summerville v. Thrower, 369 Ark. 231, 237, 253 S.W.3d 415, 420 (2007) ("Procedural law
... prescribe[s] the steps for having a right or duty judicially enforced, as opposed to the law that defines the specific rights or duties themselves."). 31 Gillioz, 213 Ark. at 1018, 214 S.W.2d at 216 ("The rule appears to be well settled generally that retrospective laws ... are valid only when they affect remedies or procedure."). 32 See Ark. Code Ann. § 14-23-101 et seq. ("Claims Against Counties").
33
See Ark. R. Civ. P. 22.
34
See Op. Att'y Gen. 2010-113 at 1 ("[P]roviding an answer may be tantamount to giving private legal advice, which I am specifically prohibited by statute from doing."). 35 Ark. Code Ann.§ 14-23-lOl(a).

Hon. C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 8

papers, or documents which may be necessary in [its] investigation .... " 36 If the county court is satisfied that a claim should be paid, the court is authorized to order payment by the county clerk. 37 And there is an option for appeal "from the order ... concerning any claim ... in the manner provided by law for appeals from orders of the county court. " 38

Pursuant to these statutes, a claim could be asserted against the $8, 715 .63 held by the Clark County Treasurer on behalf of the defunct Okolona School District. A county treasurer is certainly authorized as a general matter to release funds in response to an order from the county court to pay a valid debt. 39 I cannot opine on the county-claims process as it would apply to the Okolona account in practice, however. The interested parties would first have to determine who should assert the claims established under the substantive law. 40 And once demands are made to the Clark County Court, it will be incumbent on the parties to offer what "books, accounts, papers, or documents ... may be necessary" 41 to justify their particular claim. These and similar matters must be explored in consultation with private legal counsel.

An interpleader in circuit court is also a viable option for distributing the Okolona account, but it too involves contingencies that are beyond my authority to address. Interpleaders are governed by Rule 22 of the Arkansas Rules of Civil Procedure, which authorizes a party "who disclaims any interest in the money or property that is the subject of the interpleader" to deposit the funds in the court registry and

36
Id. at§ 14-23-103; see also Ark. Code Ann.§ 14-23-lOS(a)(l)(A) (Repl. 2013) (stating that the claimant must "attach to the county claim for payment an itemized listing or numbered invoice which may be designated as suppo11ing documentation."). 37 See Ark. Code Ann. § 14-23-207(b) (Rep!. 2013) (providing for "warrants or checks issued by the county clerk ... on order of the county court for the payment of any claim."). 38 Ark. Code Ann.§ 14-23-206(c) (Rep!. 2013).
39
See Ark. Code Ann.§ 14-15-805(a) (Rep!. 2013) ("It shall be the duty of each county treasurer to receive and give receipt for all moneys payable into the county treasury and to pay and disburse the moneys on warrants or checks drawn by order of the county court."). 40 Based on the background information provided, it appears the interested parties are the Clark County Treasurer along with the Gurdon, Arkadelphia, Centerpoint, and South Pike County School Districts. 41 See note 36 and accompanying text, supra.

Hon . C.A. Blake Batson
Pros. Att'y, Ninth-East Jud. Dist.
Opinion No. 2017-107
Page 9

thereafter be "discharged from all liability. " 42 Essentially, an interpleader is a civil action by which "[p ]ersons having claims ... may be joined as defendants ... when their claims are such that the plaintiff is or may be exposed to double or multiple liability." 43 With respect to the Okolona account, the interpleader plaintiff would likely be the Clark County Treasurer, given that the treasurer's office maintains the account funds. And the defendants would likely be the successor districts, each of which may claim a share of the account. But the real parties in interest (as well as the claims or defenses they might assert) are matters for the stakeholders, and ultimately the circuit court, to consider.

Sincerely,

___:;;; · => ~
LESLIE RUTLEDGE
Attorney General

Enclosures

42
Ark. R. Civ. P. 22(b).

43
Id. at 22(a).

ARKANSAS
STATUTES
1947
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1980 Replacement

Comprising Statutes of a General and Permanent Nature Including Those Enacted by the First
i I Extraordinary Session of the Seventy-Second
General Assembly, 1980
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Compiled Under the Supervision of the
Arkansas Statute Revision Commission

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Milt Copeland
A. D. McAllister, Jr.
W. H. Sutton
Thomas Harper, Sr.
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Robert K. Walsh
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    82      83                                  SCHOOL DISTRICTS                                    80-423

~it is in
NOTES TO DECISIONS
ference
.1ere an· Appeal from Refusal to Act. § 80-428 annexing certain territory to
County board of education has 60 days after another district, ·appeal from such order ~o. 279, filing of petition for consolidation to act on within the 30 day period provided in § 80-428 petition and after expiration of such period but after time for appeal from refusal to act on there is a 30 day period under§ 80-236 within original petitions (as required by this section) which an appeal from such refusal to act may had expired, was unavailing, where the
ory in a
evidence and argument on appeal related to
be taken. County Bd. of Educ. v. Norfork
solidation
the adequacy of the original petitions, and
School Dist. No. 61, 216 Ark. 934, 228 S.W.2d
that this 468 (1950).
purpose of appeal was to require action on
to protect
original petition. County Bd. of El:luc. v.
Where petitions for consolidation were
and it is
Norfork School Dist. No. 61, 216 Ark. 934, 228
published under § 80-408 and county board of lared that education failed to act on such petitions, but S.W.2d 468 (1950). r, and it is thereafter acted under the provisions of 1hall take after its
March 26, 80-422. Division of property, debts and contracts of dissolved districts.

• Any new district which is created, or district to which new territory is annexed shall succeed to the property of the district dissolved, and become liable for its contracts and debts, and may sue and be sued therefor, and : that the where territory less than the entire district is annexed to a district, the
  ing school district to which territory is annexed shall take such property of the district lde to the from which such territory was taken as the county board of education shall
  .on. Acklin
  ~Ark. 422, deem proper, and shall be liable for that part of all indebtedness of the district from which such territory was taken as shall be assigned to them by the county board of education. The part to be assigned to the new district ;he county shall be determined by the ratio that the assessed valuation of the real estate olve school in that part of the territory so taken is to the assessed valuation of real estate ' § 80-415. CountyBd. in the entire district from which the territory was taken. All taxes voted in l 64 (1942). such districts from which territory is taken, together with any that may be voted in the district to which it was attached, shall be used to discharge such indebtedness, and the district to which such territory is added, shall be subject to suit for such indebtedness. [Acts 1931, No. 169, § 46, p. 476; Pope's -On all Dig., § 11479.] with the
  .ion must Compiler's Notes. Sections 45, 47 of Acts is denied 1931, No. 169 are compiled as §§ 80-406, l petition 80-407, respectively.
  >peal the
  loriginal 80-423. Assumption of property, debts and contracts of dissolved or annexed districts. - Any school district to which there is annexed hereafter all the territory of an entire district, or created by a consolidation of is act being districts, or created out of the same territory of a preexisting district, shall 1ervation of succeed to all of the property of the district or districts dissolved, and become ',Shall be in liable for all its or their contracts and debts, and may sue and be sued · its passage
  28, 1947. therefor. Where territory less than an entire district is brought into a district, the district to which such territory is annexed shall be entitled to the proportionate part of the personal property, and shall be liable for the proportionate part of the indebtedness of the district from which such territory was taken, ascertained on the basis [ratio] that the tax assessed valuation of the real estate in that part of the territory so taken bears to the

80-424 EDUCATION 84

tax assessed valuation of the real estate in the entire district from which such territory was taken, and all school taxes previously voted in such district from which such territory is taken applicable to the land constituting such annexed territory and the personal property thereon, together with any that may be :voted on that territory in the district to which it is attached, and the proportionate part of allotments from State funds and all other resources of the new district, such proportion to be ascertained on the basis [ratio] that the assessed value of the land in the annexed territory bears to such assessed value of all the land in the new district', ~hall be used to discharge such indebtedness, and the district to which such territory is. added shall be subject to suit for such indebtedness. [Acts 1931, No. 169,
§ 80, p. 476; Pope's Dig., § 11516.]

Compiler's Notes. The bracketed word
Sections 79, 83 of Acts 1931, No. 169 are
"ratio" in the second sentence was inserted by compiled as §§ 80-313, 80-314, respectively. the compiler in both instances.

NOTES TO DECISIONS

ANALYSIS
district must pay every outstanding warrant
Division of district.
issued by its predecessors, regardless of
Liability of consolidated district.
validity. Heskett v. McRee, 215 Ark. 328, 220
Parties to actions.
S.W.2d 422 (1949).

Division of District.
Parties to Actions.
Where consolidated district was divided
Court could not by mandamus proceeding
into two districts, action of the board in compel county . treasurer to pay warrant dividing funds of district on basis of assessed issued by school district which was thereafter values was proper. School Dist. No. 5 v. School consolidated, since the consolidated district Dist. No. 3, 214 Ark. 514, 216 S.W.2d 882 was a necessary party to the action. Heskett
(1949).
v. McRee, 215 Ark. 328, 220 S.W.2d 422 (1949).

Liability of Consolidated District.
This section does not mean that the new

80-424. Defects of previous consolidation or changes validated. - The formation, consolidation, change of boundary lines, and any other alteration of school districts by the action of the county board of education of any county prior to the passage and approval of this act [March 26, 1951] are hereby made valid and any error, omission or defect in the procedure of creating, consolidating or altering school districts is hereby cured, and the action heretofore taken in creating, consolidating or altering school districts is hereby ratified. Provided this act shall not be construed as validating any action of a county board of education concerning which a suit in a court of competent jurisdiction is now pending, nor in a ca8e where a court of competent jurisdiction has determined that a district was illegally formed or consolidated with another district. [Acts 1951, No. 403, § 6, p. 965.]

Compiler's Notes. Sections 5, 7 of Acts 1951,
No. 403 are compiled as a note to§ 80-320 and
as§ 80-607, respectively.

          6    7                        PROPERTY AND PRIVILEGE TAX LAWS                                84-103

every suc;:h incorporated or not incorporated, also to all blocks, or lots, or parts thereof,
.i.m oflegal assessed for taxation as such, whether the same is situated in an such debts incorporated city or town, or not. [Act Mar. 31, 1883, No. 114, § 75, p. 199; 11y mutual C. & M. Dig., § 9939; Pope's Dig., § 13723.) tock of any scientific, Compiler's Notes. For sections in which superseded. Section 85 is compiled as t of any "this act" is compiled, see compiler's notes to §§ 84-402 - 84-404.
~eived, and
§ 84-101.
Section 74 of Acts 1883, No. 114 is compiled be a full as § 84-811. Sections 76-84 have been de for the
x:ation; nor
NOTES TO DECISIONS
the person
:h surety is Incorporation. city under this act. Southeast Ark. Levee Dist.
Whether a community is incorporated or v. Turner, 184 Ark. 1147, 45 S.W.2d 512 not is not the test as to whether it is town or (1932).
(salaries or
meaning of
792; Pope's 84-103. Administration of tax laws - Authority of public service commission. - The [Arkansas Public Service] Commission shall have full power and authority in the administration of the tax laws of this State now 02, 84-1405 - in force or such as may hereafter be enacted:
-1444, 84-1501 · {a) General supervision. To have and exercise general and complete
&-1615.
supervision and control over the valuation, assessment and equalization of
14 is compiled all property, privileges and franchises; the collection of taxes and s, § 76-701 et enforcement of the tax laws of the State, and over the several county assessors, county boards ofreview and equalization, tax collectors and other
J-606.
officers charged with the assessment or equalization of property or the
· public school
licensing fees, collection of taxes throughout the State, to the end that all assessments on property, privileges and franchises in this State shall be made in relative l - Property ll or Personal proportion to the just and true value thereof, in substantial compliance with law.
'exarkana, 182 (b) Assessment of utility property. To have the exclusive power oforiginal DJ; Baldwin v. assessment of the property, both real and personal, used in the operating of 7 S.W.2d 668 carrier pipeline, railroad, street railroad, express, sleeping car and intercounty bus line companies, and all telegraph, telephone, electric power, cable television, heating, gas, water, water transportation, toll bridge or ferry, interurban or other similar companies, associations or corporations
s. commonly known as utilities doing business or owning property in this
ies in another State.
..
.terest in real
s state. Greene {c) Basis of valuation. To file with the county judge, county clerk and ' 228 s.w. 738 county assessor of each county not later than ten [10) days b~fore the time for the beginning of the assessment of property by the tax assessors a certificate showing the per centum of true and full market or actual value dures situated that it has used, or will use, in valuing for taxation for that year the property o the lessee are i Compress Co. the Commission is required to assess; and it shall be the duty of the assessors 52 (1897). and boards of review or equalization and county judges to adopt the same basis of valuation of property in their county for the purpose of taxation as this act the that so certified by the Commission. ies or towns

62
63 ASSESSMENT OF TAXES 84-426
lOnds or other
l shall hold or Corporations, in returning capital stock for not taxable until maturity. McConnell v.
taxation, cannot deduct investments of
Sebastian County, 144 Ark. 394, 222 S.W. 707
is property, he surplus in shares of stock ofother corporation. (1920). other property State ex rel. Attorney Gen. v. Ft. Smith
Lumber Co., 131Ark.40, 198 S.W. 702 (1917). Collateral References. Shares owned by a
of said person,
resident in a foreign corporation as subject of
bonds or other Rental Note. property tax. 43 A.L.R. 686.
in making up Notes under contract in the form of a lease· Margin tax on stock or securities or
with option to purchase are r.ental notes and commodities purchased on. 71 A.L.R. 1225.
Mar. 28, 1887,
>4.]
84-425. Information required by assessor. - The Tax Commission ond or warrant of
[Arkansas Public Service Commission], the Tax Assessor, or any one of them as subject of who may be required under the law to make assessment rolls, shall in 5 A.L.R. 547; 44 addition to their duties as now required by law, specifically inquire of the maker of each list, the following:
(a) The number, kind and value of each automobile they own.
(b) The cash or funds on hand, and money on time deposit or otherwise in any depository, in or out of the State.
ro person shall (c) The taxable securities of every kind, and their value, in or out of the elieves will be State, they may own.
>ligation given (d) What stock, bonds or mortgages owned, and their value, in or out of
tat shall have the State.
time oflisting; (e) What leases, or mineral deeds are owned, and the value of same that iS a part of the are contemplated in section 9856, C. & M. Digest [§ 84-203].
:ks, joint stock (f) What timber, deeds or contracts contemplated by section 9855, C. & M. are or portion Digest [§ 84-204], they own, and the value of same .
.tion, which is (g) Any other property of any kind whatsoever that has a value about l in this State. which questions have not been asked. 2; Pope's Dig., The taxpayer shall then be required to assess the properties disclosed by
investigation. [Acts 1929, No. 111, § 2, p. 557; Pope's Dig., § 13626.]

tk v. Board of Compiler's Notes. The bracketed words Sections 1, 3 of Acts 1929, No. 111 are
!28.W. 988(1909); "Arkansas Public Service Commission" were compiled as §§ 84-419, 84-405 respectively.
•. Bodcaw Lumber inserted by the compiler. See compiler's note Legal Periodicals. Acts Affecting Property
92 (1917); Pulaski to§ 84-103.
Taxation, 5 Ark. L. Rev. 365.
on v. American
3 Ark. 124, 342
84-426. Date of valuation. - All property in this State shall be assessed by the duly authorized authorities according to its value on the first day of January. Proviqed, stocks of merchants and manufacturers shall be assessed at the value of the average stock in possession or under control during the year immediately preceding the first day of January of the yel:lr in which assessment is required. [Acts 1929, No. 172, § 1, p. 841; Pope's Dig.,§ 13680.] mestic insurance
ist such stock for Section to Section References. This section Cited: Arkansas Tax Comm'n v. Ashby, 217 mks, 87 Ark. 484, is referred to in § 84-438. Ark. 759, 233 S.W.2d 361 (1950).

sed by another
. the hands of the
the capital stock
vested in another
s County v. Home
' 133 s.w. 1113