May Act 372 of l983 be applied retroactively to cases in which the debt arose prior to the Act's effective date? If so, would the statute of limitations still have effect? Does the Arkansas State Claims Commission have jurisdiction when a "debtor" under this Act seeks a judgment for monies "set-o

STATE OF ARKANSAS OFFICE OF THE ATTORNEY GENERAL JUSTICE BUILDING, LITTLE ROCK 72201 STEVE CLARK (501) 371-2007 ATTORNEY GENERAL OPINION NO. 85-117 May 28, 1985 ao Ry Mr. Norman L. Hodges, Jr. Director Arkansas State Claims Commission . State Capitol Building Little Rock, AR 72201 RE: Act 372 of 1983. Dear Mr. Hodges: . “ On April 19, 1985, you requested an advisory opinion regarding the interpretation of Act 273 of 1983. I have paraphrased your questions as follows: 1. May Act 372 be applied to cases where the debt arose prior to the Act's effective date? 26 If so, would the Statute of Limitations still have effect? 3. Does the Arkansas State Claims Commission have jurisdiction where a "debtor" under this Act seeks a judgment for monies "set-off" for debts he was owing prior to the effective date of the Act? In short, Act 372 of 1983 may be applied to cases where the debt arose prior to its effective date. In spite of such operation, the Statute of Limitations is still with effect. The Arkansas State Claims Commission does not have jurisdiction where a "debtor" seeks a judgment for monies improperly “set-off" pursuant to this Act. ‘ACT 372 OF 1983 IS APPLICABLE TO DEBTS QUTISTANDING PRIOR TO ITS JULY 1, 1983 EFFECTIVE DATE. , There may be a sementical dispute as to whether such -......-...0peration constitutes “retroactive" application. Bowles v. Strickland, 151 F.2d 419 (5th Cir. 1959). United States v. Hidges ‘Opinion Page 2 Village Corp., 298 F.2d 816 (4th Cir. 1962). However, there is no disagreement that where, as here, a statute does not affect substantive rights, but relates only to the pro- cedural machinery provided to enforce such rights, that it may have application even though the requsites upon which the subsequent action depends are drawn from a time antecen- dent to its enactment. Sutherland Statutory Ganstruction, Vol. 2, §41.09 (4th edition, 1973); Village Corp., supra. Act 372 of 1983 is titled: AN ACT to Provide for the Collection of Debts Owed to the State by Set-Off of Such Debts Against Certain Income Tax Refunds; to Provide for Hearings and Appeals in Contested Cases; and for Other Purposes. (Emphasis added). If the legislature had intended Act 372 to be inapplicable to debts owed to the State which arose prior to the Act's _ effective date, it would have so stated. The unmistakable . purpose of this Act is to provide the State with a more effective means of collecting debts certified as due and owing. Wo substantive rights are affected, only the pro- cedure allowed to enforce existing obligations is expanded. §3 titled, “ADDITIONAL REMEDY", illustrates this Act is strictly procedural or remedial and alters no vested rights. The Arkansas Supreme Court has held the rule that statutes are to be construed to operate vorospectively does not apply to procedural or remedial legislation. Harrison v. Mathews, 235 Ark. 915, 362 S.W.2d 704 (1962). In Harrison, supra the court stated at pg. 705: The rule by which statutes are construed to operate prospectively does not ordinarily apply to procedural or remedial legislation. "The strict rule of construction contended for does not apply to remedial statutes which do not disturb vested rights, or create new obligations, but only supply a new or more appropriate remedy to enforce an existing right or obligation. These should receive a more liberal construction, and should be given a retrospective effect whenever such seems to have been the intention of the Legislature." State ex rel. Moose v. Kansas City & M. Ry. * B. Co., 117 Ark. 606, 174 S.W. 248. ‘Hodges Opinion Way 28, 1985 Page 3 §1 of the Act provides in pertinent part: Furthermore, it is the legislative intent that this Act be liberally construed so as to effectuate these purposes as far as Tegally amg practically possible. “eee It is apparent the legislature passed this Act in an attempt to alleviate some of the difficulty the State had in collecting debts. The difficulty the State had in collecting those debts owing on March 8, 1983, the date of the Acts' approval, is the reason this legislation was deemed necessary. If this Act is to liberally construed to fulfill its obvious purpose, as §1 directs, it should be applicable to aid in collecting those debts which spurred its enactment. . Arguably, §21 of Act 372 would prohibit retroactive | application as it provides: This Act shall be effective on and after July 1, 1983. However, to further the Acts purpose, this section should be interpreted as providing a date by which the procedures within (see §§'s 6, 7, 8, 9, 10, 11, 13, 14, 16, and 17) first became effective. It is significant that §21 specifically provides July 1, 1983 as the Acts effective date. Without §21, this Act would have been effective on June 6, 1983, ninety(90) days after its approval. It must be presumed the legislature choose July 1, 1983, the begin- ing of the fiscal year, as the Acts effective date for good reason. The begining of the fiscal year is the appropriate time the Department of Revenues could initiate these pro~ cedures to collect debts owed the State. It is difficult to understand why the legislature would choose July 1, 1983 as the date by which the debt must not have yet become owing in order for this Act to apply. THIS STATUTE MAY NOT ACT TO REVIVE A CAUSE OF ACTION ALREADY BARRED BY THE STATUTE OF LIMITATIONS. Althougil this Act may apply to debts arising before its July 1, 1983 effective date, it will not revive a cause of ‘action already barred by the Statute of Limitations. Sutherland Statutory Construction, §41.09; Lundquist v. Coddington Bros., Inc., 202 F.Supp. 19 (W.D. Wis. 1962). ' “Hodges Opinion May 28, 1985 Page 4 THE ARKANSAS CLAIMS COMMISSION HAS NO JURISDICTION WHERE A "DEBTOR" UNDER THIS ACT SEEKS A JUDGMENT FOR MONIES IMPROPERLY "SET-OFF". of course, the Arkansas Claims Commissi@fi's juris~ Giction is limited to claims against the State. Ark. Stat. Ann. §13-1401 et seq (Repl. 1979). A "debtor" under Act 372 whose income tax refund has been wrongfully "set-off" under §8 is limited to the remedy provided in §9 of the Act. (i.e. follow procedures of the Administrative Procedures Act). By seeking relief for an improper §8 "set-off", the "debtor" is not making a claim against the State, but rather seeking to void or reverse the decision that the State's claimed sum was due and owing. Since the "debtor" here is not making a claim against the State, the Arkansas Claims Commission has no jurisdiction. ‘ ary The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General David S. Mitchell. Sincerely, s Attorhey General SC/DSM/14jm