Board of Trustees v. City of Little Rock

David Newbern, Justice. The Board of Trustees for the City of Little Rock Police Pension and Relief Fund and individual members of the board sued the City of Little Rock, contending that the city had not made certain contributions to the police pension fund required by law. The city agreed with respect to some of the funds sought and made the appropriate contributions. However, the city claimed, with respect to a percentage of the fines collected from violators of municipal ordinances, that it was exempted by law from having to make those contributions. The circuit court agreed with the city, and the board has brought this appeal, contending that: (1) the legislation by which the city claims exemption was special legislation prohibited by Amendment 14 to the Arkansas Constitution; (2) the exempting legislation was repealed by a subsequent act; (3) the court erred in not allowing testimony about the intent of the legislature in passing the exemption on which the city relies; and (4) the court should have granted a new trial on the basis of newly discovered evidence. We hold that the exempting legislation was not repealed and could have had a rational basis, and thus it was not in violation of the Constitution. We also hold that the proffered testimony was inadmissible and that a new trial on the basis of newly discovered evidence was not justified. We therefore affirm the judgment of the trial court. Act 250 of 1937 set up police pension and relief funds for cities of over 16,000 population. Act 206 of 1959 dealt with police pension and relief funds for cities of 75,000 or more. It referred to Act 250 of 1937 for the basic procedures, but added that cities with more than $80,000,000 property valuation were exempt from the provision requiring the cities to contribute to the fund 10% of fines for violations of municipal ordinances, and it left in place the requirement that those cities contribute to the fund money saved as a result of suspensions of police officers without pay and a fixed part of property taxes. The exempting language of Act 206 of 1959 was codified as Ark. Stat. Ann. § 19-1802.1 (Repl. 1980). It was thereafter amended on several occasions to raise the exemption ultimately, in 1977, to cities having an assessed valuation of $200,000,000, or more, and then Act 690 of 1987 repealed the exemption altogether. At the time it was raised to $200,000,000, only the City of Little Rock qualified for the exemption. Prior to the repeal of the exemption, however, several other cities qualified. At a circuit court hearing, the board contended the city should have paid into its fund 10% of the fines levied for municipal ordinance violations for the years 1983, 1984, and 1985. The city claimed the exemption for those years. In support of its contention that the exemption violated the constitution the board offered the testimony of a former state senator who had introduced the legislation increasing the level of exemption from time to time. He would have testified the exemption was modified with the intention, in part, of keeping Little Rock from having to make the contributions. The board also proffered the testimony of the state administrator of the funds who would have testified that the Little Rock fund was actuarily unsound in comparison with the funds of other cities. The court refused to admit the testimony of these witnesses. 1. Repeal The board contends that the legislation creating the exemption based on property valuation and each of the subsequent acts increasing the amount for exemption were amendments of Section 2 of Act 250 of 1937. Section 2 of Act 486 of 1981 began as follows: “Section 2 of Act 250 of 1937, as amended, the same being Arkansas Statute 19-1802, is hereby amended to read as follows . . . .” What followed was a revision of that section with no mention of exemption based on property valuation. The board contends the exemption was thus repealed because it had been created and changed from time to time by amending section 2 of Act 250 of 1937. Act 206 of 1959, which created the initial exemption, did not purport to amend Act 250 of 1937. As mentioned above, it dealt with police pension and relief funds for cities of over 75,000 population and referred to Act 250 of 1937 for the basic procedures and then created the exemption. It was codified as Ark. Stat. Ann. § 19-1802.1. Each of the subsequent acts raising the property valuation level for exemption amended § 19-1802.1, not § 19-1802. The general assembly showed that it did not regard the exempting legislation as having been previously repealed when it specifically repealed it by Act 690 of 1987. See N. Singer, Sutherland Statutory Construction, § 23.11 (4th Ed. 1985). In view of this history of the legislation, we conclude the exemption was in effect during the period in question. 2. Special legislation Statutes are presumed not to be unconstitutional, and they will not be struck down unless they conflict with the Constitution “clearly and unmistakably.” Board of Trustees of Municipal Judges and Clerks Fund, City of Little Rock v. Beard, 273 Ark. 423, 620 S.W.2d 295 (1981); Buzbee v. Hutton, 186 Ark. 134, 52 S.W.2d 647 (1932). Amendment 14 prohibits the general assembly from passing local or special acts. An act is special if by some inherent limitation it arbitrarily separates some person, place, or thing from those upon which, but for such separation, it would operate. A local act is one that applies to any division or subdivision of the state less than the whole. Board of Trustees of Municipal Judges and Clerks Fund, City of Little Rock v. Beard, supra; Thomas v. Foust, 245 Ark. 948, 435 S.W.2d 793 (1969). When the exemption was made to apply to cities with over $200,000,000 property valuation, it applied only to Little Rock. Classification among geographical or political subdivisions is permitted if the general assembly could have had a rational basis for it, Lovell v. Democratic Central Committee, 230 Ark. 811, 327 S.W.2d 387 (1959); Knowlton v. Walton, 189 Ark. 901, 75 S.W.2d 811 (1934), and the fact that the classification includes only one city does not necessarily mean that it is “local” in the constitutional sense. See Mankin v. Dean, 228 Ark. 752, 310 S.W.2d 477 (1958). The fund is supported by percentages of fines collected and may also be supported by a tax on all taxable property in a city having a fund. Ark. Code Ann. §§ 24-11-403 and 24-11-404 (1987). We agree with the city’s argument that the general assembly could have concluded that a city or cities with the highest amount or amounts of taxable property could contribute enough from that source to make contribution from municipal fines unnecessary. 3. The testimony The testimony of the former state legislator with respect to his intent in introducing the exempting legislation was clearly inadmissible. Atkinson v. Board of Trustees of the University of Arkansas, 262 Ark. 552, 559 S.W.2d 473 (1977); Wiseman v. Madison Cadillac Co., 191 Ark. 1021, 88 S.W.2d 1007 (1935). The board cites Webb v. Adams, 180 Ark. 713, 23 S.W.2d 617 (1929), for the proposition that we look to the practical effect of legislation in making our determination whether it is special or local in nature. That is exactly correct. The board argues that the testimony of the fund administrator should have been admitted as it would have shown that the practical operation of the legislation was to set Little Rock apart, and thus the testimony was relevant. The exclusion of the evidence was correct for two reasons. First, no one contends that the legislation in question is not local or special in the sense that when it was passed it affected only Little Rock, and more recently has affected only Little Rock and a few other cities. The question, rather, as noted above, is whether the general assembly could have had a rational basis for making the classification. The testimony of the administrator had no bearing on that issue. Second, it is impossible to tell from the proffered testimony whether the Little Rock fund suffers in terms of soundness because of the exemption. The witness refers to one biennial evaluation done in 1984 from which she concluded that more contributions were needed. She did not, however, reach any conclusion whether the fund would have been sound in 1984 had the city contributed the percentage of municipal fines sought by the board, nor did she say how the soundness would be affected by the city’s agreement to pay the 10% of fines collected for violations of state laws and for disciplinary suspensions. 4. Newly discovered evidence The board moved for a new trial contending that the general assembly’s repeal of the exemption was newly discovered evidence showing that the law violated the Constitution. Act 690 of 1987 was signed into law on April 7, 1987. While we have strong doubt that this act shows the exemption legislation to have been unconstitutional, it clearly could have been discovered before the judgment in this case was entered on June 19, 1987. Ark. R. Civ. P. 59(a)(7). Big Rock, Inc. v. Missouri Pacific Ry., 295 Ark. 495, 749 S.W.2d 675 (1988); Liggett v. Church of Nazarene, 291 Ark. 298, 724 S.W.2d 170 (1987). Affirmed. Hickman and Purtle, JJ., dissent.