Opinion ID: 1760281
Heading Depth: 1
Heading Rank: 1

Heading: Declaratory-Judgment Relief

Text: Before addressing the City's first point, we consider the question of whether declaratory-judgment relief is proper in this case. According to the City, it is proper because the subject matter of this case is justiciable, in part because financing for TIF districts is a matter of significant public interest, which affects not only the City's project but multiple proposed redevelopment districts across the state. At issue is the disputed allocation of millions of dollars of TIF funds and what funds can be used to back bonds sold to implement the redevelopment project. At issue also is the potential for an illegal-exaction suit and resulting attorney fees if taxes levied for one purpose were unconstitutionally diverted for a different purpose by a different governmental entity in violation of Article 16, § 11 of the Arkansas Constitution. Specifically, the City contends that Amendment 78 repeals Amendment 74 in part. Notwithstanding the fact that the bonds have been approved and sold for the redevelopment district using an applicable ad valorem rate of 3.16 mills, the City wants the applicable ad valorem rate to include the disputed 4.5 mills discussed below and the uniform rate of 25 mills dedicated to school maintenance and operation under Amendment 74, in order to pay off the bonds more quickly. By Quorum Court Ordinance No. 2004-68 passed in 2004, the debt service millage for the schools was changed by the Quorum Court to reflect 19.2 mills, which is the millage rate the City maintains is correct. [4] Hence, the issues that persist are, first, whether the applicable ad valorem rate of 3.16 mills is correct for purposes of the preexisting bond indebtedness authorized by City Ordinance No. 4683 on March 15, 2005, or whether the applicable ad valorem rate should include 4.5 mills for purposes of those bonds. The second issue that persists is whether Amendment 74's 25 mills should also be included in the applicable ad valorem rate for purposes of paying off these bonds. The City asked for declaratory relief in this case. The statute pertaining to declaratory judgments reads: Any person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder. Ark.Code Ann. § 16-111-104 (Repl.2006). This court has said the following with regard to declaratory judgments: [D]eclaratory relief will lie where (1) there is a justiciable controversy; (2) it exists between parties with adverse interests; (3) those seeking relief have a legal interest in the controversy; and (4) the issues involved are ripe for decision. We have further stated: The courts do not construe acts similar to said Act 274 [of 1953, known as the Declaratory Judgment Act,] to require actual litigation as a prerequisite to asking for a declaratory judgment, but they do state, as a general rule, that litigation must be pending or threatened. Jegley v. Picado, 349 Ark. 600, 613, 80 S.W.3d 332, 337 (2002) (internal citations and quotations omitted). The appellees do not contest that this is an appropriate matter for declaratory judgment. We agree with the City. Surely these questions that directly affect an existing bond issue present a justiciable issue for the circuit court and this court to decide. We hold that the City is correct and that the four criteria set out in Jegley are met. Accordingly, we agree that an action for declaratory judgment lies.