Opinion No. ( 1999 )

Oscar Stilley Attorney at Law Central Mall Plaza Suite 516 5111 Rogers Avenue Fort Smith, AR 72903-2041

Dear Mr. Stilley:

This is in response to your request for certification, pursuant to A.C.A. § 7-9-107 (Repl. 1993), of the following popular name and ballot title for a proposed amendment to the Arkansas Constitution:¹

POPULAR NAME

AN AMENDMENT TO ABOLISH THE ARKANSAS STATE TAX UPON PERSONAL AND CORPORATE INCOMES, OR, ALTERNATIVELY, TO AUTHORIZE THE PHASE OUT OF THE ARKANSAS INCOME TAX GRADUALLY, ON CONDITION THAT THE STATE FULLY PROTECT THE DUE PROCESS RIGHTS OF THE PAYERS OF CERTAIN TAXES, AND FOR OTHER PURPOSES

BALLOT TITLE

AN AMENDMENT TO THE ARKANSAS CONSTITUTION TO ABOLISH THE STATE TAX ON PERSONAL AND CORPORATE INCOMES; TO AUTHORIZE THE ARKANSAS GENERAL ASSEMBLY TO PHASE OUT THE TAXES ON PERSONAL AND CORPORATE INCOME ON CONDITION THAT THE GENERAL ASSEMBLY PROTECT ALL ARKANSAS CITIZENS AND LAWFUL RESIDENTS FROM THE COLLECTION OF ANY DIRECT TAX BY LIEN, LEVY, OR OTHER DISTRAINT UPON THE WAGES, BANK ACCOUNTS, OR OTHER PROPERTY OF THE TAXPAYER, BY ANY GOVERNMENTAL AGENCY WHATEVER, WITHOUT THE CONSENT OF THE TAXPAYER OR AN ORDER OF A DULY CONSTITUTED COURT OF COMPETENT JURISDICTION, TAKEN AND ENTERED AFTER THE TAXPAYER HAS BEEN GIVEN NOTICE AND OPPORTUNITY TO DEFEND, WITH THE RIGHT TO JURY TRIAL AND ALL OTHER US CONSTITUTIONAL GUARANTEES, 1) BY ENFORCED DIRECT LEGISLATIVE PROHIBITION, OR, 2) BY REPAYING THE CITIZEN THE MONEY TAKEN, OR THE REASONABLE VALUE OF THE PROPERTY TAKEN, WITHIN 30 DAYS OF NOTIFICATION OF AN OFFICER LEGISLATIVELY DESIGNATED FOR THAT PURPOSE, OR, 3) BY PAYMENT OF THREE TIMES THE WHOLE AMOUNT OF TAX SET FORTH IN THE PERTINENT LIEN, LEVY OR OTHER SUMMARY COLLECTION DOCUMENT, PRIOR TO ASSESSING OR COLLECTING ANY STATE INCOME TAX FOR THE YEAR IN WHICH THE LIEN OR LEVY WAS FILED OR EXECUTED; TO PROVIDE THAT LIABILITY FOR DAMAGES TO BE PAID BY THE STATE PURSUANT TO THIS AMENDMENT OR IMPLEMENTING LEGISLATION SHALL BE DEEMED A PENALTY FOR CAUSING OR FAILING TO PREVENT THE VIOLATION OF PROCEDURAL DUE PROCESS, AND SHALL NOT BE AFFECTED BY ANY LATER ADJUDICATION OF THE UNDERLYING TAX LIABILITY; PROVIDING THAT THE TERM "DIRECT TAXES" FOR PURPOSES OF THIS AMENDMENT MEANS TAXES UPON THE EARNING, PAYMENT, OR RECEIPT OF WAGES, SALARY, OR OTHER INCOME, AND TAXES UPON ESTATES, INHERITANCES, AND GIFTS; PROVIDING THAT IF THE STATE OF ARKANSAS FULLY OBEYS AND ENFORCES THE PROCEDURAL DUE PROCESS PROVISIONS SET FORTH IN THIS AMENDMENT, AND IN ANY IMPLEMENTING LEGISLATION, WHICH MUST BE MADE EFFECTIVE NO LATER THAN JULY 1, 2001, THE STATE MAY FOR THE TAXABLE YEAR 2001, AND ALL SUBSEQUENT YEARS, COLLECT INCOME TAXES IN AN AMOUNT NO GREATER THAN THAT WHICH, TOGETHER WITH STATE SALES AND USE TAX REVENUES, IS NECESSARY TO GENERATE NET REVENUE EQUAL TO THE NET REVENUE FROM INCOME TAXES AND STATE SALES AND USE TAXES FOR THE PREVIOUS YEAR, AS NEAR AS PRACTICABLE; PROVIDING THAT IN CASE OF PHASE OUT OF THE INCOME TAX, ANY STATE INCOME TAX REVENUES NOT REQUIRED TO PROVIDE THE STATE OF ARKANSAS WITH ANNUAL REVENUES EQUAL TO THE STATE INCOME TAXES FOR THE TAXABLE YEAR 2000 COLLECTED IN THE FOLLOWING YEAR, PLUS THE NET REVENUE OF ARKANSAS STATE SALES AND USE TAXES FOR THE CALENDAR YEAR 2000 COLLECTED NO LATER THAN DECEMBER, 2001, SHALL AS SOON AS REASONABLY PRACTICABLE BE DIVIDED AMONG AND REFUNDED TO ALL PERSONAL AND CORPORATE INCOME TAX PAYERS IN THE STATE OF ARKANSAS, PRO RATA ACCORDING TO THEIR RESPECTIVE TAX PAYMENTS FOR THE YEAR WITH RESPECT TO WHICH THE REFUND IS BEING MADE; PROVIDING THAT THE GENERAL ASSEMBLY SHALL MAKE ANY AND ALL LAWS WHICH MAY BE NECESSARY FOR THE IMPLEMENTATION OF THESE TAX REFUNDS; PROVIDING THAT IN CASE OF PHASE OUT OF THE INCOME TAX, THAT AFTER THE LAST YEAR IN WHICH INCOME TAX IS NECESSARY TO SUPPLY THE STATE WITH NET REVENUE EQUAL TO THE NET REVENUE FROM INCOME TAXES AND STATE SALES AND USE TAXES FOR THE PREVIOUS YEAR, THE INCOME TAX SHALL BE FOREVER PROHIBITED UNLESS AND UNTIL REAUTHORIZED BY CONSTITUTIONAL AMENDMENT; PROVIDING THAT THE TERM "STATE SALES AND USE TAX" SHALL NOT INCLUDE SALES AND USE TAX EARMARKED EXCLUSIVELY FOR COUNTY AND MUNICIPAL GOVERNMENTS; PROVIDING THAT IF ANY PARTICULAR CLASS OF GOODS OR SERVICES IS EXEMPTED FROM SALES AND USE TAX, AFTER THE DATE OF THIS AMENDMENT, WHETHER BY THE GENERAL ASSEMBLY OR BY THE INITIATIVE PROCESS, THE PHASE OUT OF THE INCOME TAX SHALL BE CALCULATED AND IMPLEMENTED AS IF SUCH SALES AND USE TAX EXEMPTION HAS NOT BEEN GRANTED; PROVIDING THAT IF THE RATE OF THE STATE SALES AND USE TAX RATE IS REDUCED, THE PHASE-OUT OF THE INCOME TAX SHALL BE CALCULATED AND IMPLEMENTED AS IF THE RATE OF THE STATE SALES AND USE TAX HAD NOT BEEN REDUCED; PROVIDING THAT IF THE STATE SALES AND USE TAX RATE IS INCREASED, THE PHASEOUT SHALL BE CALCULATED INCLUDING THE ADDITIONAL REVENUE AS STATE SALES AND USE TAX REVENUES, UNLESS OTHERWISE SPECIFICALLY AUTHORIZED BY APPROVAL OF A MAJORITY OF THE QUALIFIED ELECTORS VOTING ON THE ISSUE AT A REGULARLY SCHEDULED STATEWIDE ELECTION; PROVIDING THAT THE COLLECTION OF INCOME TAX WHILE FAILING TO COMPLY WITH THE PHASE-OUT REQUIREMENTS SET FORTH IN THIS AMENDMENT, OR ITS IMPLEMENTING LEGISLATION, SHALL CONSTITUTE AN ILLEGAL EXACTION; PROVIDING THAT NOTHING HEREIN SHALL BE CONSTRUED TO AUTHORIZE THE INCREASE OF ANY OF THE RATES OF THE ARKANSAS STATE INCOME TAX, ON PERSONAL OR CORPORATE INCOMES, ABOVE THOSE EXISTING ON THE EFFECTIVE DATE OF THIS AMENDMENT, REGARDLESS OF THE AMOUNT OF ACTUAL OR PROJECTED TAX COLLECTIONS IN ANY GIVEN YEAR; PROVIDING THAT NOTHING HEREIN SHALL BE CONSTRUED TO LIMIT THE AMOUNT OF SALES AND USE TAX WHICH MAY BE COLLECTED BY THE STATE OF ARKANSAS IN ANY GIVEN YEAR; PROVIDING FOR LIBERAL CONSTRUCTION IN FAVOR OF THE TAXPAYER, SEVERABILITY, AND GENERAL REPEALER OF CONFLICTING PROVISIONS; PROVIDING THAT THE AMENDMENT IS SELF-EXECUTING AND SHALL TAKE EFFECT JANUARY 1, 2001, EXCEPT AS OTHERWISE PROVIDED; PROVIDING THAT THE GENERAL ASSEMBLY IS AUTHORIZED TO ENACT LEGISLATION DEEMED PROPER FOR THE ORDERLY IMPLEMENTATION OF THE PROVISIONS OF THIS AMENDMENT; AND FOR OTHER PURPOSES.

The Attorney General is required, pursuant to A.C.A. § 7-9-107, to certify the popular name and ballot title of all proposed initiative and referendum acts or amendments before the petitions are circulated for signature. The law provides that the Attorney General may substitute and certify a more suitable and correct popular name and ballot title, or if the proposed popular name and ballot title are sufficiently misleading, may reject the entire petition.

A.C.A. § 7-9-107 neither requires nor authorizes this office to make legal determinations concerning the merits of the act or amendment, or concerning the likelihood that it will accomplish its stated objective. Consequently, this review has been limited to a determination, pursuant to the guidelines that have been set forth by the Arkansas Supreme Court, discussed below, of whether the proposed popular name and ballot title accurately and impartially summarize the provisions of your proposed amendment.

The purpose of my review and certification is to ensure that the popular name and ballot title honestly, intelligibly, and fairly set forth the purpose of the proposed amendment. See Arkansas Women's Political Caucusv. Riviere, 282 Ark. 463, 466, 677 S.W.2d 846 (1984).

The popular name is primarily a useful legislative device. Pafford v.Hall, 217 Ark. 734, 233 S.W.2d 72 (1950). It need not contain detailed information or include exceptions that might be required of a ballot title, but it must not be misleading or give partisan coloring to the merit of the proposal. Chaney v. Bryant, 259 Ark. 294, 532 S.W.2d 741 (1976); Moore v. Hall, 229 Ark. 411, 316 S.W.2d 207 (1958). The popular name is to be considered together with the ballot title in determining the ballot title's sufficiency. Id.

The ballot title must include an impartial summary of the proposed amendment that will give the voter a fair understanding of the issues presented. Hoban v. Hall, 229 Ark. 416, 417, 316 S.W.2d 185 (1958); Beckerv. Riviere, 270 Ark. 219, 223, 226, 604 S.W.2d 555 (1980). According to the court, if information omitted from the ballot title is an "essential fact which would give the voter serious ground for reflection, it must be disclosed." Bailey v. McCuen, 318 Ark. 277, 285, 884 S.W.2d 938 (1994), citing Finn v. McCuen, 303 Ark. 418, 798 S.W.2d 34 (1990); Gaines v.McCuen, 296 Ark. 513, 758 S.W.2d 403 (1988); Hoban v. Hall, supra; andWalton v. McDonald, 192 Ark. 1155, 97 S.W.2d 81 (1936). At the same time, however, a ballot title must be brief and concise (see A.C.A. §7-9-107(b)); otherwise voters could run afoul of A.C.A. § 7-5-522's five minute limit in voting booths when other voters are waiting in line.Bailey v. McCuen, supra. The ballot title is not required to be perfect, nor is it reasonable to expect the title to cover or anticipate every possible legal argument the proposed measure might evoke. Plugge v.McCuen, 310 Ark. 654, 841 S.W.2d 139 (1992). The title, however, must be free from any misleading tendency, whether by amplification, omission, or fallacy; it must not be tinged with partisan coloring. Id. A ballot title must convey an intelligible idea of the scope and significance of a proposed change in the law. Christian Civic Action Committee v. McCuen,318 Ark. 241, 884 S.W.2d 605 (1994). It has been stated that the ballot title must be: 1) intelligible, 2) honest, and 3) impartial. Becker v.McCuen, 303 Ark. 482, 798 S.W.2d 71 (1990), citing Leigh v. Hall,232 Ark. 558, 339 S.W.2d 104 (1960).

Having analyzed your proposed amendment as well as your proposed popular name and ballot title under the above precepts, it is my conclusion that I must reject both your proposed popular name and ballot title due to an ambiguity in the text of your measure. Several additions or changes to your popular name and ballot title are in my view necessary in order to more fully and correctly summarize your proposal. I cannot, however, at this time, substitute and certify a popular name and ballot title (see A.C.A. § 7-9-107(b)) due to the textual ambiguity. Resolution of this ambiguity is necessary before I can exercise my statutory authority under § 7-9-107(b).

Section 4 of your proposed amendment is entitled "Method of Phase Out of Income Tax." Subsection (a) of this section states that:

the State may . . . collect and retain state income taxes which together with state sales and use taxes will generate net revenue equal to the net revenue from income taxes and state sales and use taxes collected for the year 2000 (hereinafter sometimes base year revenue).

It appears, based upon this language, that the year 2000 is the operative year for purposes of calculating the income taxes that the State may continue to collect following adoption of the amendment. Subsection (c) of Section 4 states, however, in part, as follows:

After the last year in which income tax is necessary to supply the state with revenue equal to the net revenue from income taxes and state sales and use taxes for the preceding year, the state income tax . . . shall be forever prohibited unless and until reauthorized by amendment to this constitution. [Emphasis added.]

If, in fact, the intent is calculate the authorized income tax collections based upon the preceding year's revenues, then in my judgment this should be more clearly stated for proper summarization in the ballot title. It is my opinion that the proposed amendment as currently drafted leaves room for doubt in this regard. I understand that Section 4 imposes a refund requirement which is tied to net revenues for the year 2000. However, subsection (a) of Section 4 (quoted above) does not appear to be limited to the refund requirement. A potential conflict thus arises between subsections (a) and (c) of Section 4. Because the information regarding the phase out calculation would certainly be considered material and essential, it must be fully and accurately reflected in the ballot title. I cannot, however, interject my own interpretation into the ballot title.

My office, in the certification of ballot titles and popular names, does not concern itself with the merits, philosophy, or ideology of proposed measures. I have no constitutional role in the shaping or drafting of such measures. My statutory mandate is embodied only in A.C.A. § 7-9-107 and my duty is to the electorate. I am not your counsel in this matter and cannot advise you as to the substance of your proposal. At the same time, however, the Arkansas Supreme Court, through its decisions, has placed a practical duty on the Attorney General, in exercising his statutory duty, to include language in a ballot title about the effects of a proposed measure on current law. See, e.g., Finn v. McCuen,303 Ark. 418, 793 S.W.2d 34 (1990). Where the effects of a proposed measure on current law are unclear or ambiguous, it is impossible for me to perform my statutory duty to the satisfaction of the Arkansas Supreme Court without clarification of the ambiguities.

My statutory duty, under these circumstances, is to reject your proposed ballot title, stating my reasons therefor, and to instruct you to "redesign" the proposed measure and ballot title. See A.C.A. §7-9-107(c). You may, after clarification of the issue discussed above, resubmit your proposed amendment, along with a new proposed popular name and ballot title, at your convenience. I anticipate, as noted above, that some changes or additions to your submitted popular name and ballot title may be necessary. I will be pleased to perform my statutory duties in this regard in a timely manner after resubmission.

Sincerely,

MARK PRYOR Attorney General

¹ I have rejected your previous two submissions with respect to this proposed constitutional amendment. See Attorney General Opinion Numbers 99-261 and 99-200. You have made changes to the text of your proposed measure, and have now resubmitted this initiative with a revised ballot title.