BECKY FURNAS, Individually and as a Representative of all similarly situated Taxpayers who Pay Ad Valorem School Taxes for the Support of the Fountain Lake School District; FOUNTAIN LAKE SCHOOL DISTRICT; AL LARSON, individually and as a Representative of all similarly situated Taxpayers who Pay Ad Valorem School Taxes for the Support of the Eureka Springs School District; and EUREKA SPRINGS SCHOOL DISTRICT APPELLANTS
THOMAS W. KIMBRELL, Commissioner of the Arkansas Department of Education, in his official capacity only; ARKANSAS DEPARTMENT OF EDUCATION; CHARLES ROBINSON, Treasurer of the State of Arkansas, in his official capacity only APPELLEES
This opinion is uncorrected and subject to revision before publication in the printed official reporter.
APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT. NO. CV-2011-2321. HONORABLE TIMOTHY DAVIS FOX, JUDGE.
Hatfield, Sayre & Brockett, by: Eugene G. Sayre and Christopher D. Brockett, for appellants.
Dustin McDaniel, Att'y Gen., by: Scott P. Richardson, Sr. Ass't Att'y Gen., for appellee.
JOSEPHINE LINKER HART, Associate Justice.
The appellees (the School Districts) in Kimbrell v. McCleskey, 2012 Ark. 443, 424 S.W.3d 844 (the first appeal), are now before this court as appellants seeking to reverse an adverse order of the circuit court following our opinion and mandate in the first appeal. On appeal, the School Districts argue: (1) the circuit court erred, on remand, in determining that it lacked subject-matter jurisdiction to entertain and grant the post-remand mandatory injunctive relief sought by the School Districts in the form of ordering the Arkansas Department of Education (ADE) to release to the School Districts $615,439 in appropriated 98% guaranteed Uniform Rate of Tax (URT) adjustment funds that had been released by the ADE in all prior school years and which the ADE had illegally " set off" against what the ADE computed as " excess URT funds" in the 2010--2011/2011--2012 school years; (2) the circuit court erred in its July 29, 2013 order on remand and the subsequent rehearing order that was deemed denied because it did not fulfill the letter and the spirit of the mandate and opinion of this court in the first appeal by failing to grant the specific post-remand relief requested by the School Districts, based on what the circuit court referred to as the law of the case; (3) on April 2, 2013, the General Assembly substantially amended Arkansas Code Annotated section 6-20-2305 by passage of Act
557 of 2013, but such legislative action did not negate the legal obligation of the ADE to release the appropriated funds owed to the School Districts for the school years 2010-2011 and 2011-2012; (4) the issue of the School Districts' claims for 98% guaranteed URT adjustment funds was argued before both the circuit court and the supreme court in the first appeal, as shown by documentary evidence, oral testimony, and briefs filed by both parties in both courts and, accordingly, this issue was not waived by the School Districts. We affirm.
A. Procedural History Prior to the First Appeal
This case began when the ADE attempted to recover $1,387,367 from the Fountain Lake School District and $824,916 from the Eureka Springs School District, believing that these sums were an overpayment of state funds. The ADE proceeded on the assumption that the URT levy was a state tax and that the URT levy was enacted to provide the bulk of the revenue for " foundation funding," a statutorily imposed, minimum-per-student income stream that was guaranteed to each school district. The ADE believed that any amount of the URT revenue collected in a school district that exceeded the foundation-funding amount could be recouped and redistributed to fund other school districts.
The School Districts disagreed and filed suit against the ADE, seeking declaratory and injunctive relief. In part, their complaint asked for a mandatory injunction requiring the ADE to release all federal and state funds that they were due. The ADE responded by filing a motion to dismiss, which was denied, and the circuit court granted partial summary judgment in favor of the School Districts. In pertinent part, the circuit court made the following findings of fact:
9. Pursuant to A.C.A. § 6-20-2305(a)(1)(A), the State provides " foundation funding aid" to the public school districts. Such section provides:
For each school year, each school district shall receive state foundation funding aid computed as the difference between the foundation funding amount pursuant to subdivision (a)(2) of this section and the sum of ninety-eight percent (98%) of the uniform rate of tax multiplied by the property assessment of the school district plus the miscellaneous funds of the school district.
10. A.C.A. § 6-20-2306, enacted in 2003 states:
(a) If the Department of Education determines that an overpayment has been made to a school district under any appropriation authorized by this subchapter, the department is authorized to:
(1) Withhold the overpayment from subsequent state funding;
(2) Transfer the amount withheld for the overpayment to the line item appropriation from which the ...