in the circuit court of pulaski county, arkansas civil ... › wp-c… · the individual plaintiff,...

1

IN THE CIRCUIT COURT OF PULASKI COUNTY, ARKANSAS CIVIL DIVISION

THE LITTLE ROCK DOWNTOWN NEIGHBORHOOD ASSOCIATION, INC., THE PETTAWAY NEIGHBORHOOD ASSOCIATION, THE HANGER HILL NEIGHBORHOOD ASSOCIATION, THE FOREST HILLS NEIGHBORHOOD ASSOCIATION, INC., THE COALITION OF LITTLE ROCK NEIGHBORHOODS, INC., ARKANSAS COMMUNITIES ORGANIZATION, INC., JOSHUA SILVERSTEIN, DALE PEKAR, JOHN HEDRICK, DENISE ENNETT, ROHN MUSE, BARBARA BARROWS and KATHY WELLS PLAINTIFFS Vs. Case No. 60CV-20-6460 ARKANSAS DEPARTMENT OF TRANSPORTATION and LORIE TUDOR, Director, Arkansas Department Of Transportation; ROBERT MOORE, ALEC FARMER, PHILIP TALDO, KEITH GIBSON AND MARIE HOLDER, Members Of The Arkansas Highway Commission; DENNIS MILLIGAN, Arkansas State Treasurer; ANDREA LEA, Arkansas State Auditor; LARRY W. WALTHER, Director, Arkansas Department Of Finance & Administration and Chief Fiscal Officer of The State of Arkansas; and ASA HUTCHINSON, Governor of the State of Arkansas DEFENDANTS

FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT, ACCOUNTING AND INJUNCTION

Come the Plaintiffs, The Little Rock Downtown Neighborhood Association, Inc., The

Pettaway Neighborhood Association, The Hanger Hill Neighborhood Association, The Forest

Hills Neighborhood Association, Inc., The Coalition of Little Rock Neighborhoods, Inc.,

2

Arkansas Communities Organization, Inc., Joshua Silverstein, Dale Pekar, John Hedrick, Denise

Ennett, Rohn Muse, Barbara Barrows and Kathy Wells, and for their First Amended Complaint

for Declaratory Judgment, Accounting and Injunction against the Defendants, the Arkansas

Department of Transportation, Lorie Tudor, Director, Arkansas Department of Transportation,

Robert Moore, Alec Farmer, Philip Taldo, Keith Gibson and Marie Holder, Members of the

Arkansas Highway Commission; Dennis Milligan, Arkansas State Treasurer; Andrea Lea,

Arkansas State Auditor; Larry W. Walther, Director of the Arkansas Department of Finance &

Administration and Chief Fiscal Officer of the State Of Arkansas; and Asa Hutchinson,

Governor of the State of Arkansas, state:

PLAINTIFFS

1. The organizational Plaintiff, Little Rock Downtown Neighborhood Association, Inc.

(“DNA”), is a not-for-profit corporation organized and existing under the laws of the State of

Arkansas. The geographic area covered by the DNA includes an area of Little Rock bounded on

the east by South Louisiana Street, on the north by the Arkansas River, on the west by Dr. Martin

Luther King, Jr., Dr., and on the south by West Roosevelt Road. Among the purposes of the

DNA are to preserve and protect the environment of the area and its historic character and

values, and to represent its members in matters affecting the Neighborhood and its residents.

2. The organizational Plaintiff, The Pettaway Neighborhood Association, Inc., (“PNA”), is a

not-for-profit corporation organized and existing under the laws of the State of Arkansas. The

geographic area covered by the PNA includes an area bounded on the east by I-30, on the north

by I-630, on the west by Main Street and on the south by west Roosevelt Road. Among the

purposes of the PNA are to preserve and protect the environment of the area and its historic

character and values, and to represent its members in matters affecting the Neighborhood.

3

3. The organizational Plaintiff, The Hanger Hill Neighborhood Association, Inc.

(“HHNA”), is a not-for-profit corporation organized and existing under the laws of the State of

Arkansas. The geographic area covered by the HHNA includes the area bounded by I-30 on the

west, East 6th Street on the north, rail lines on the east, and East 17th Street on the south. Among

the purposes of the HHNA are to preserve and protect the environment of the area and its historic

character and values and to represent its members in matters affecting the Neighborhood and its

members.

4. The organizational Plaintiff, Forest Hills Neighborhood Association (“FHNA”), is a not-

for profit corporation organized and existing under the laws of the State of Arkansas. The

geographic area covered by the FHNA including I-630 on the north, South Pine Street on the

east, West 12th Street on the south, and Jonesboro Drive on the west. Among the purposes of the

FHNA are to preserve and protect the environment of the area and its historic character and

values and to represent its members in matters affecting the Neighborhood.

5. The organizational Plaintiff, The Coalition of Little Rock Neighborhoods, Inc. (“the

Coalition”), is a not-for-profit corporation organized and existing under the laws of the State of

Arkansas. Among the purposes of the Coalition are to assist in, coordinate and promote the

development, maintenance and activities of the various neighborhood associations in the City of

Little Rock; to assist in the distribution of information among such organizations for their mutual

benefit; to promote quality residential life in Little Rock as a vital part of maintaining a healthy

city economy; and to provide a voice for the neighborhood associations of the City with local

and state government.

6. The organizational Plaintiff, the Arkansas Communities Organization, Inc. (ACO) is an

Arkansas non-profit corporation dedicated to bringing low-income and working Arkansans together for

4

change to improve the health, income and opportunities for people in our communities; guarantee a

brighter future for our children; and give ordinary Arkansans a voice in major policy decisions in both

government and private business.

7. The individual Plaintiff, Joshua Silverstein, is a resident, citizen and taxpayer of

Little Rock, Pulaski County, Arkansas. Mr.Silverstein resides in a condominium building

immediately adjacent to and overlooking the intersection of I-30 and Highway 10 (aka Cantrell

Road/LaHarpe Boulevard). He is a professor of law at the University of Arkansas at Little Rock,

William H. Bowen School of Law in Little Rock which is located in the northwest corner of the

intersection of I-30 and I-630, although he brings this action in his individual capacity and not on

behalf of the University of Arkansas or any subdivision thereof.

8. The individual Plaintiff, Dale Pekar, is a resident, citizen and taxpayer of Little Rock,

Pulaski County, Arkansas. He resides on Rock Street, a residential area in the City of Little Rock

immediately west of I-30. Mr. Pekar was formerly an economist and a supervisory planning team

leader with the US Army Corps of Engineers, the U.S. Forest Service and the Natural Resources

Conservation Service of the USDA (US Department of Agriculture) in conducting environmental

analyses pursuant to the provisions of the National Environmental Policy Act.

9. The individual Plaintiff, John Hedrick, is a resident, citizen and taxpayer of Little Rock,

Pulaski County, Arkansas. Mr. Hedrick resides on East 15th Street in Little Rock south of I-630

and immediately west of the I-30 Corridor Project area. He has had many years of experience in

managing, operating and overseeing transportation authorities and systems, including highways,

light rail, railroads and bus transportation.

10. The individual Plaintiff, Denise Ennett, is a resident, citizen and taxpayer of the City of

5

Little Rock, Pulaski County, Arkansas, residing at the intersection of I-30 with I-630. She is the

immediate past president of the Plaintiff, Little Rock Downtown Neighborhood Association, Inc.

(“DNA”), and is currently a member of the Arkansas House of Representatives.

11. The individual Plaintiff, Rohn Muse, is a resident, citizen and taxpayer of the City of

Little Rock, residing at in an area immediately south of I-630. He is the immediate past president

of the Plaintiff, Forest Hills Neighborhood Association, Inc. (“FHNA”).

12. The individual Plaintiff, Barbara Barrows, is a resident, citizen and taxpayer of the City

of Little Rock, Pulaski County, Arkansas, residing at the intersection of I-30 with I-630. She is

the immediate past president of the Plaintiff, Hanger Hill Neighborhood Association, Inc.

(“HHNA”).

13. The individual Plaintiff, Kathy Wells, is a resident, citizen and taxpayer of the City of

Little Rock, Pulaski County, Arkansas, residing in the historic neighborhood in downtown Little

Rock. She is the president of the Plaintiff organization, Coalition of Little Rock Neighborhoods

(CLRN), and has long been an activist for neighborhood associations and civic causes in the City

of Little Rock. She has resided for many years in the area immediately west of I-30 and north of

I-630.

14. All Plaintiffs are either individual residents, citizens and taxpayers of the State of

Arkansas or are organizations formed and existing under the laws of the State of Arkansas, with

their principal offices in Arkansas. They are all persons or organizations who have paid and

continue to pay tax on the sale of goods and services purchased by them that are subject to the

sales tax levied by Amendment 91.

15. Plaintiffs have standing to maintain this action to:

6

(i) challenge the continued illegal exaction and expenditure of revenues derived from

the sales tax levied by Amendment 91 on highway projects of greater than four

(4) lanes (i.e., more than two travel lanes in each direction);

(ii) request this Court to render a declaratory judgment on whether Defendants may

use Amendment 91 funds on expanding highways of four lanes or less to

highways of more than four lanes;

(iii) move the Court to issue an order or mandamus to the Defendants requiring them

to repay to the Arkansas Four-Lane Highway Construction and Improvement

Bond Account of any funds derived from Amendment 91 that have been

expended on expanding highways of four lanes or less to highways of more than

four lanes; and

(iv) request that this Court render a declaratory judgment on whether Issue 1, enacted

in the general election held in the State of Arkansas on November 3, 2020, allows

the use of funds derived from the extension of the sales tax assessed under

Amendment 91 to construct highways of more than four lanes, or expand existing

highways of four lanes or less to highways of more than four lanes.

DEFENDANTS

16. The Defendant, Arkansas State Department of Transportation (formerly named Arkansas

State Highway and Transportation Department) (“ArDOT”) is an agency of the State of

Arkansas with its principal offices in Pulaski County, Arkansas. Subject to the control, direction,

and oversight of the Arkansas Highway Commission, ArDOT has the responsibility, among

others, to plan, design, construct and maintain highways and roads in the State of Arkansas; to

enter into agreements with the Federal Highway Administration and other Federal agencies

7

regarding Federal funding for highway construction; to coordination with other agencies of the

state and Federal government and with counties and cities of the State having transportation

responsibilities (Ark. Code Ann. § 27-1-102); and to enter into contracts with construction

companies for the construction of highways and other highway components, and oversee such

construction. The Department has constructed and continues to construct highway projects

utilizing funds derived from the sales tax levied by Amendment 91, and will continue to perform

such construction utilizing funds derived from the continuation of the Amendment 91 tax

pursuant to Issue 1 adopted by the voters of Arkansas on November 3, 2020.

17. The Defendant, Lori Tudor, is the current Director of the Arkansas Department of

Transportation. As such, she is responsible for implementing and overseeing the performance of

all of the functions and responsibilities of the Arkansas Department of Transportation in the State

of Arkansas, which has duties and responsibilities under Amendment 91. Defendant Tudor is

joined as a Defendant in her representative capacity as such Director.

18. Defendant, Robert S. Moore, Jr., is a citizen and resident of Arkansas County, Arkansas,

and is a member and current Chairman of the Arkansas State Highway Commission. He is sued

herein in his official and representative capacity as such Commissioner. The Commission has

specified duties and obligations relative to the use and management of funds derived from the tax

levied on sales and services in the State of Arkansas by Amendment 91 to the Constitution of

Arkansas, and by the tax to be levied on such sales and services by Issue 1 adopted by the voters

of the State of Arkansas in the general election on November 3, 2020.

19. Defendant, Alec Farmer, is a citizen and resident of Arkansas, and is a member and

current Vice-Chairman of the Arkansas State Highway Commission. He is sued herein in his

official and representative capacity as such Commissioner. The Commission has specified duties

and obligations relative to the use and management of funds derived from the tax levied on sales

8

and services in the State of Arkansas by Amendment 91 to the Constitution of Arkansas, and by

the tax to be levied on such sales and services by Issue 1 adopted by the voters of the State of

Arkansas in the general election on November 3, 2020.

20. Defendant, Philip Taldo, is a citizen and resident of Arkansas, and is a member of the

Arkansas State Highway Commission. He is sued herein in his official and representative

capacity as such Commissioner. The Commission has specified duties and obligations relative to

the use and management of funds derived from the tax levied on sales and services in the State of

Arkansas by Amendment 91 to the Constitution of Arkansas, and by the tax to be levied on such

sales and services by Issue 1 adopted by the voters of the State of Arkansas in the general

election on November 3, 2020.

21. Defendant, Keith Gibson, is a citizen and resident of Arkansas, and is a member of the

Arkansas State Highway Commission. He is sued herein in his official and representative






22. Defendant, Marie Holder, is a citizen and resident of Arkansas, and is a member of the

Arkansas State Highway Commission. She is sued herein in her official and representative






9

23. Defendant, Dennis Milligan, is a citizen and resident of Arkansas, and is the duly elected

and serving Treasurer of the State of Arkansas), with duties and responsibilities under

Amendment 91. His official office is located in Pulaski County, Arkansas. Mr. Milligan is sued

herein in his official and representative capacity. Mr. Milligan has specified duties and

obligations relative to the use and management of funds derived from the tax levied on sales and

services in the State of Arkansas by Amendment 91 to the Constitution of Arkansas, and by the

tax to be levied on such sales and services by Issue 1 adopted by the voters of the State of

Arkansas in the general election on November 3, 2020.

24. Defendant, Andrea Lee, is a citizen and resident of Arkansas, and is the duly elected and

serving Auditor of the State of Arkansas, with duties and responsibilities under Amendment 91.

Her official office is located in Pulaski County, Arkansas. Ms. Lee is sued herein in her official

and representative capacity. Ms. Lee has specified duties and obligations relative to the use and

management of funds derived from the tax levied on sales and services in the State of Arkansas

by Amendment 91 to the Constitution of Arkansas, and by the tax to be levied on such sales and

services by Issue 1 adopted by the voters of the State of Arkansas in the general election on

November 3, 2020.

25. Defendant, Larry W. Walther, is a citizen and resident of Arkansas, and is the duly

appointed and serving Director of the Arkansas Department of Finance and Administration, with

his official office in Pulaski County, Arkansas. As such, he is also the Chief Fiscal Officer of the

State of Arkansas. He is sued herein in his official and representative capacity. Mr. Walther has





10

26. Defendant, Asa Hutchinson, is a citizen and resident of the State of Arkansas, and is the

duly elected and serving Governor of the State of Arkansas, with duties and responsibilities

under Amendment 91. His official office is located in Pulaski County, Arkansas. Governor

Hutchinson is sued herein in his official and representative capacity. Gov. Hutchinson has





FACTUAL BACKGROUND

Amendment 91

27. Amendment 91 to the Constitution of Arkansas was adopted by the voters of Arkansas in

the November 6, 2012 general election. Under Amendment 91, a temporary sales-and-use tax of

one-half cent was levied on the sales of property (except food and food ingredients) and services

subject to taxation in the State. Seventy percent (70%) of the Amendment 91 tax revenue was

earmarked to secure State of Arkansas General Obligation Four-Lane Highway Construction and

Improvement Bonds in the total principal amount not to exceed $1,300,000,000 for the purpose

of constructing and improving four-lane highways in the State of Arkansas. A copy of

Amendment 91 to the Arkansas Constitution is attached hereto as Exhibit No. 1.

28. After the adoption of Amendment 91, the Defendant, Arkansas Department of

Transportation (ArDOT) (including its predecessor agency) commenced using the Amendment

91 tax funds to construct highway projects in the State under a program named by ArDOT as

“the Connecting Arkansas Program” (“CAP”).

11

29. The CAP included projects for widening of existing interstate highways from four lanes

(two lanes in each direction) to five, six, eight or more lanes. The state share of the cost of such

projects included in the CAP was and is derived primarily of funds generated by the Amendment

91 tax.

30. The CAP includes at least eleven (11) projects to widen highways in Arkansas from their

existing four lanes or less to five, six or more lanes. Those projects include:

CONNECTING ARKANSAS PROGRAM PROJECTS EXCEEDING FOUR LANES

1. ArDOT Job No. CA0602 (30 Crossing Project – Little Rock-North Little Rock)

2. ArDOT Job No. CA0601 (Highway 70 – Sevier Street Project - Jacksonville)

3. ArDOT Job No. CA0609 (Highway 365 – Interstate 430 and Interstate 430 Interchange

Modification Project – North Little Rock/Pulaski County)

4. ArDOT Job No. CA0608 (Baptist Hospital – University Avenue Project - Little Rock)

5. ArDOT Job No. CA0604 (Main Street – Vandenberg Boulevard Project - Jacksonville)

6. ArDOT Joe No. CA0605 (Vandenberg Boulevard – Highway 5 Project - Jacksonville - Cabot)

7. ArDOT Job No. CA0401 (Highway 71B – Highway 412 Project— Washington – Benton Counties)

8. ArDOT Job No. CA1101 (Highway 412 – Wagon Wheel Road Project –

Washington – Benton Counties )

9. ArDOT Job No. CA0901 (Highway 264 – New Hope Road Project – Washington – Benton Counties)

10. ArDOT Job No. CA0902 (Highway 62/102 – Highway 72 Project –

Washington – Benton Counties)

11. ArDOT Job No. CA0610 (Hot Springs – Interstate 30 Project)

12

The Arkansas Supreme Court Decision In Buonauito, et al v. Gibson, et al.

On October 29, 2020, the Supreme Court of Arkansas rendered an opinion in the case of

Buonauito, et al v. Gibson et al, 2020 Ark. 352, 609 S.W.3d 381 (2020), holding that funds

derived from the sales tax assessed by Amendment 91 could not be expended on expansion of

highways of more than four lanes. The Court’s Opinion specifically stated that ArDOT lacked

authority under Amendment 91 to expend such funds “for major improvements to six-lane

interstate highways, such as projects CA0602 [The “30 Corridor Project”] and CA0608 [The “I-

630 Widening Project”] … .” (Supreme Court Opinion, pp. 7-8) A copy of the Supreme Court’s

opinion is attached hereto as Exhibit No 2.

31. The Supreme Court’s interpretation of Amendment 91 becomes part of that Amendment just

as if it had been so written by the legislature or the drafters of the Amendment. See, e.g., Burns v.

Burns,312 Ark. 61, 847 S.W.2d 23 (1993); Gibson v. Gibson, 264 Ark. 418, 572 S.W.2d 146

(1978); E.C. Barton v. Neal, 263 Ark. 40, 562 S.W.2d 294 (1978); Merchants' Transfer &

Warehouse Co. v. Gates, 180 Ark. 96, 21 S.W.2d 406 (1929)

32. Pursuant to that decision of the Arkansas Supreme Court, ArDOT has no authority to

expend any amount of funds attributable to the taxes levied by Amendment 91 on the highway

expansion projects listed in Paragraph No. 30, above.

Adoption of Issue 1 of 2020 (Amendment 101)

33. On November 3, 2020, the citizens of the State of Arkansas voting in the

general election in Arkansas adopted Issue 1. Issue 1 relates to the continuation of the sales and

use tax that was initially levied under Amendment 91, and, by adoption, has become Amendment

13

101 to the Constitution of Arkansas. Issue 1 of 2020 will be referred to herein as Amendment

101, and that Amendment is attached hereto as Exhibit No. 3.

34. The intent of Amendment 101 is stated in Section 1 of the Amendment as follows:

§1. Intent of Amendment.

(a) Arkansas Constitution Amendment 91, levies a one-half percent sales and use tax to provide additional funding for the state’s four-lane highway system, county roads, and city streets.

(b) The one-half percent sales and use tax under Arkansas Constitution, Amendment 91, shall be abolished when there are no bonds outstanding to which tax collections are pledged as provided in this amendment.

(c) Notwithstanding Arkansas Constitution, Amendment 91, § 8, it is the intent of this amendment that the sales and use tax levied under Arkansas Constitution, Amendment 91, continue after the retirement of the bonds authorized in Arkansas Constitution, Amendment 91, to provide special revenue for use of maintaining, repairing, and improving the state’s system of highways, county roads, and city streets. (Emphasis added)

35. The purpose of the tax levies under Amendment 91 was to provide additional funding for

The State’s four-lane highway system, county roads, and city streets, and in Buonauito, et al v.

Gibson et al, such funding was limited to highways of not more than four lanes. That purpose is

specifically continued in Amendment 101. While specific changes are made to portions of

Amendment 91, such as modification to Section 8 thereof (relating to the termination of the tax

levied under Amendment 91), there is no provision in Amendment 101 that refers to highways of

any size other than four-lane highways.

36. Further, as the Supreme Court’s decision in Buonauito, et al v. Gibson et al became a part

of Amendment 91, the restriction on the use of the revenues derived from the sales tax for

construction or expansion of highways of more than four lanes continues in Amendment 101.

36. It is well-established in the law of Arkansas that an existing law is not presumed to be

14

changed further than is declared in the amendatory act, the presumption being that the drafters or

voters (in the case of constitutional amendments) intended no changes other than those clearly

expressed in the amendments. Hendricks v. Hodges, 122 Ark. 82, 182 S.W. 538. Where an

amendment leaves certain portions of the original act unchanged, such portions are continued in

force, with the same meaning and effect they had before the amendment. Peterson Produce Co.

v. Cheney, 237 Ark. 600, 374 S.W.2d 809 (1964).

Illegal Exaction Claim

(i) The Continued Use Of The Sales Tax Levied By Amendment 91 On Highway Projects Of Greater Than Four (4) Lanes Constitutes An Illegal Exaction And Expenditure Of Revenues Derived From Amendment 91

37. Plaintiffs hereby ratify, affirm and reallege the preceding allegations of this Amended

Complaint.

38. The highway expansion projects listed in Paragraph 30, above, have been completed or

are being constructed in significant part by use of CAP funds. On information and belief,

Plaintiffs state and allege that, at a minimum, approximately the following amounts of CAP

funds have been expended on those projects as of September 30, 2020, by ArDOT and the other

Defendants, or pursuant to their authorization:

ArDOT Job No. CA0602 (30 Crossing Project) $452,472,390

ArDOT Job No. CA0601 (Highway 70 – Sevier Street Project) $58,368,275

ArDOT Job No. CA0609 (Highway 365 – Interstate 430/ Interstate 430 Interchange Modification Project) $8,583,953 ArDOT Job No. CA0608 (Baptist Hospital – University Avenue Project) $68,875,800

ArDOT Job No. CA0604 (Main Street – Vandenberg Boulevard Project) $5,427,861

15

ArDOT Joe No. CA0605 (Vandenberg Boulevard – Highway 5 Project) $56,000,000 ArDOT Job No. CA0401 (Highway 71B – Highway 412 Project) $31,781,154

ArDOT Job No. CA1101 (Highway 412 – Wagon Wheel Road Project) $15,120,000 ArDOT Job No. CA0901 (Highway 264 – New Hope Road Project) $27,000,000

ArDOT Job No. CA0902 (Highway 62/102 – Highway 72 Project) $19,390,000

ArDOT Job No. CA0610 (Hot Springs – Interstate 30 Project) $37,411,607 Total $780,431,040

39. The Defendants wrongfully expended and diverted those and other CAP funds on the

projects described above and on any other highway projects to expand highways to more than

four lanes that were constructed with CAP funds.

40. Section 15 of Amendment 91 provides in relevant part:

(b)(2) The court shall, in any suit against the commission, the Treasurer of State, or other officer or official of the state prevent a diversion of any funds pledged under this amendment and shall compel the restoration of diverted funds, by injunction or mandamus.

41. Further, Article 16, Section 13 of the Constitution of Arkansas provides:

Any citizen of any county, city or town may institute suit, in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever.

42. An “illegal exaction” is defined as any exaction that either is not authorized by law or is

contrary to law. Sullins v. Central Arkansas Water, 2015 Ark. 29, 454 S.W.3d 727. There are

two types of illegal-exaction cases, specifically, illegal-tax cases and public-funds cases; a

public-funds case is one in which the taxes are being misapplied or illegally spent, and an illegal-

tax case involves a tax that is itself illegal. Brown v. Mortgage Electronic Registration Systems,

16

Inc., 2013, 738 F.3d 926. This case is of the “public-funds” variety in that the Defendants

authorized for expenditure and/or expended, misapplied and illegally spent the CAP funds for

purposes and projects not authorized by and in violation of Amendment 91.

43. Pursuant to the authority of Article 16, Section 13 of the Constitution of Arkansas and

Section 15(b)(2) of Amendment 91, the Court should issue a mandamus to and against the

Defendants directing them to account for, reimburse and repay all sums authorized by them to be

expended and actually expended by them upon the above-named Projects and any other Projects

undertaken by Defendants with use of Amendment 91 funds for widening of highways from four

lanes or less to more than four lanes that are not included in the above-named Projects.

44. Any funds reimbursed and repaid by the Defendants, or any of them, as requested above,

should be paid to and deposited in the Arkansas Four-Lane Highway Construction and

Improvement Bond Account established by the Treasurer of the State of Arkansas in accordance

with Section 15(b)(2) of Amendment 91, and thereafter used only for the purposes set forth in

Amendment 91, and in accordance with the procedures set forth in Amendment 91.

Declaratory Judgment Claims


Complaint.

46. Defendants continue to contend that projects on which Amendment 91 (CAP) tax

revenues were spent or are currently being spent that involve the widening of a previously-

existing four-lane highway, including an interstate highway) to more than four lanes is not

included within the scope of the Supreme Court’s Buonauito v. Gibson decision. See

Defendants’ Brief in Support of Motion to Dismiss, p. 6-7, in which Defendants state:

17

The Interstate 30 widening project in Saline County is improving a four-lane highway, which is permissible under Section 4(a) of Amendment 91. It is improving an existing four-lane roadway to six-lanes. The project coincides exactly with the plain language of Amendment 91, and it is permissible under Buonauito.” (Defendants’ Brief, p. 6-7).

However, Defendants do not cite the “plain language” of Amendment 91 that supports

their position.

47. Section 4(a) of Amendment 91 explicitly specifies that the proceeds of the Amendment

91 tax may be spent as follows:

(1) Accelerating four-lane highway improvements in progress or scheduled as of January 1, 2011;

(2) Funding new four-lane highway improvements not in progress or scheduled as of January 1, 2011;

(3) Providing matching funds in connection with federal highway programs for

four-lane highway improvements; and

(4) Paying the costs of issuance of the bonds.

In its Opinion in Gibson, the Supreme Court reviewed the intent of Amendment 91 as

specifically-expressed therein to be “[t]o provide additional funding for the state’s four-lane

highway system, county roads and city streets,” and noted that “four-lane highways” were

mentioned more than 30 times in Amendment 91. The Court then unanimously held that “The

phrase [4-lane highway] is given a specific meaning that is plain and ambiguous.” (2020 Ark.

352 at p. 7), and added:

The repeated reference to “four-lane highways” and the lack of a specific reference to six-lane interstate highways means the Amendment 91 funds cannot be used for the latter.” (2020 Ark. 352 at page 8) (Emphasis added).

48. The Defendants have in the past and currently continue to use Amendment 91 (CAP)

funds to finance the expansion of highways of four lanes or less (including but not limited to

interstate highways) to five, six or more lanes, and thereby have violated and continue to violate

the Supreme Court’s ruling in Gibson.

18

49. The Court should, pursuant to Amendment 91, Section 15 (b)(2), and Article 16, Section

13 of the Constitution of Arkansas, prevent further diversion of funds derived from the tax

assessed and collected pursuant to Amendment 91 by the widening of highways of four lanes or

less to five, six or more lanes by:

(i) enjoining the Defendants, or one or more of them, to cease use of Amendment 91

(CAP) funds for any part of such highway project; and

(ii) ordering and mandating the Defendants to repay and reimburse the amount of

CAP funds spent by them on such projects to the Arkansas Four-Lane Highway

Construction and Improvement Bond Account established by the Treasurer of the

State of Arkansas, in accordance with Sections 5 and 15(b)(2) of Amendment 91.

Declaratory Judgment on Interpretation of Issue 1 (Amendment 101)


Complaint.

51. The intent of Amendment 91 is expressly contained in Section 1 of the Amendment,

as being to provide additional funding for the state's four-lane highway system, county roads, and

city streets. Section 2 of Amendment 91 defines “Four-lane highway improvements” as meaning

construction of and improvements to “Four-lane roadways,” and the maintenance of four-lane

highway improvements.

52. The “purposes” of Amendment 91 were expressly stated in Section 4 of the Amendment

to be:

(i) accelerating four-lane highway improvements in progress or scheduled as of January 1, 2011;

19

(ii) funding new four-lane highway improvements not in progress or scheduled as of January 1, 2011;

(iii) providing matching funds in connection with federal highway programs for four-lane highway improvements; and (iv) paying the costs of issuance of the Bonds.

53. In Gibson, the Arkansas Supreme Court held that the state’s share of Amendment 91

funds were to be used only on highways of four-lanes, noting that “the term ‘four-lane highways’

appears more than thirty times in Amendment 91,” and that “[t]he phrase is given a specific

meaning that is plain and unambiguous.” (2020 Ark. 352 at p. 7) In concluding its Opinion, the

Court specifically stated:

The repeated reference to “four-lane highways” and the lack of a specific reference to six-lane interstate highways means the Amendment 91 funds cannot be used for the latter.” (2020 Ark. 352 at page 8) (Emphasis added).

54. Section 1(a) of Issue 1/Amendment 101 expressly acknowledges that “Amendment 91

levies a one-half percent sales and use tax to provide additional funding for the state’s four-lane

highway system, county roads, and city streets.”

55. Pursuant to Section 1(c) of Issue 1/Amendment 101, the stated purpose and intent of

Issue 1/Amendment 101 is “that the sales and use tax levied under Amendment 91 continue … to

provide special revenue for use of maintaining, repairing and improving the state’s system of

highways … .” Nothing contained in Amendment 101 indicates that that Amendment changes

the purposes of the tax from that of Amendment 91.

56. By referring to the sales tax levied by Amendment 91 as providing funding for the state’s

four-lane highway system, and by continuing that sales tax without further provision regarding

any additional or other uses to which Issue 1 funds could be applied, Issue 1/Amendment 101 did

20

not change any the restriction of Amendment 91 to use of such funds for construction and

maintenance projects for 4-lane highways only.

58. The Defendants, or one or more of them, have made public declarations that it is the

State’s intention to use Issue 1/Amendment 101 funds for construction, expansion, maintenance

and operation of highways in the State of Arkansas of more than four lanes, and that they

interpret Issue 1/Amendment 101 as not containing the same restrictions as Amendment 91 on

use of the tax funds for highways of no greater size than four lanes.

59. The Court should declare that use of Issue 1/Amendment 101 funds for construction,

expansion, maintenance and operation of highways in the State of Arkansas of more than four

lanes would be contrary to the intent and purpose of Issue 1/Amendment 101, and would be

unconstitutional.

WHEREFORE, Plaintiffs should be awarded the following relief:

1. pursuant to Amendment 91, Section 15 (b)(2), and Article 16, Section 13 of the

Constitution of Arkansas, prevent further diversion of funds derived from the tax

assessed and collected pursuant to Amendment 91 through the widening of highways of

four lanes or less to five, six or more lanes by:

(i) enjoining the Defendants, or any one or more of them, to cease use or

authorization of use of Amendment 91 (CAP) funds for any part of such

highway project; and

(ii) issuing a mandamus to and against the Defendants directing them to

reimburse and repay all sums authorized by them to be expended and

actually expended by them upon the above-named Projects, and any other

21

Projects undertaken by Defendants with use of Amendment 91 funds for

widening of highways from four lanes or less to more than four lanes that

are not included in the above-named Projects.

2. declare that use of funds, directly or indirectly, derived from the sales tax authorized by

Issue 1 of 2020/Amendment 101 for construction, expansion, maintenance and operation

of highways in the State of Arkansas of more than four lanes would be unconstitutional.

3. award to Plaintiffs an attorney fee and their reasonable costs and expenses.

Respectfully submitted,

RICHARD MAYS LAW FIRM PLLC

/s/ Richard H. Mays Richard H. Mays AR Bar # 61043 2226 Cottondale Lane – Suite 100 Little Rock, AR 72202 (501) 891-6116 [email protected] [email protected]

CERTIFICATE OF SERVICE

I hereby certify that on the date set forth below, I transmitted a copy of this First Amended Complaint via electronic mail and also United States Postal Service, postage prepaid, to:

Rita S. Looney, Esq. Chief Legal Counsel Mark Umeda, Esq. Staff Attorney Arkansas Department of Transportation P.O. Box 2261 Little Rock, AR 72203-2261 [email protected] [email protected]

Dated: January ___, 2021. ___________________________

Richard H. Mays

in the circuit court of pulaski county, arkansas civil ... › wp-c… · the individual plaintiff,...

Documents