286 U.S. 165 (1932), 722, Utah Power & Light Co. v. Pfost

Docket Nº:No. 722
Citation:286 U.S. 165, 52 S.Ct. 548, 76 L.Ed. 1038
Party Name:Utah Power & Light Co. v. Pfost
Case Date:May 16, 1932
Court:United States Supreme Court
 
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Page 165

286 U.S. 165 (1932)

52 S.Ct. 548, 76 L.Ed. 1038

Utah Power & Light Co.

v.

Pfost

No. 722

United States Supreme Court

May 16, 1932

Argued April 13, 1932

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE DISTRICT OF IDAHO

Syllabus

1. The generation of electricity from water power and the transmission of the electricity over wires from the generator to consumers in another state are, from the practical standpoint of taxation, distinct processes, the one local, the other interstate, like the making and shipping of goods to order, although the generation and transmission are apparently simultaneous, and both respond instantaneously to the turning of a consumer's switch. P. 177.

2. Therefore, a state license tax on the electricity produced at a plant within the state is valid under the commerce clause as applied to that which is transmitted therefrom and sold to consumers in another state. P. 181.

3. In deciding whether a part of a statute is separable, the fact that the bill was passed after a bill like it but lacking the part in question had been withdrawn by unanimous consent does not justify the inference that the legislature would not have passed the statute if that part had been omitted. P. 183.

4. A clause in a statute declaring that an adjudication that any of its provisions is unconstitutional shall not affect the validity of the Act as a whole, or any other of its provisions or sections, has the effect of reversing the common law presumption that the legislature intends an act to be effective as an entirety, by putting in its place the opposite presumption of divisibility. P. 184.

5. This presumption of divisibility must prevail unless the inseparability of the provisions be evident or there be a clear probability that the legislature would not have been satisfied with the statute without the invalid part. Id.

6. The primary object of the Idaho statute here involved (Laws 1931, Ex.Sess., c. 3) is to raise revenue by taxing production of electricity. Section 5, which provides an exemption as to electricity

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used for pumping water for irrigating land in Idaho, is secondary in purpose, and its validity may be considered apart. P. 185.

7. In the Idaho law taxing electricity produced for sale, the exemption of that used for irrigating lands, inserted for the benefit of those so using it, is consistent with the equal protection clause of the Fourteenth Amendment, because, in the arid region, the irrigation of even private lands is a matter of public concern. P. 185.

8. The question whether a state taxing statute will operate unconstitutionally to take the money of one person to give to another will not be decided here when the construction of the statute is involved and has not been determined by the state supreme court, and when it does not appear that the party complaining is presently in danger of such an application of it. P. 186.

9. This Court cannot assume in advance that a state court will so construe or apply a state statute as to render it obnoxious to the Federal Constitution. Id.

10. To warrant holding a statute invalid under a constitutional requirement that "every act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title," the violation must be substantial and plain. P. 187.

11. The Idaho statute, supra, complies in this respect with § 16, Art. III, of the Idaho constitution. Id.

12. The statute is to be construed as laying the tax only on the electricity produced for barter, sale, or exchange, to be determined by deducting from the production of the generator the amounts disposed of otherwise, including the part used by the producer, or consumed in effecting transmission. P. 188.

13. Neither the validity of the tax nor its certainty is affected because it may be necessary to ascertain, as an element in the computation, the amounts delivered in another jurisdiction. P. 190.

14. In the administration of a revenue act involving complicated measurements and computations, fair and reasonable approximations must suffice where absolute precision is impracticable. Id.

54 F.2d 803 affirmed.

Appeal from the final decree in a suit to enjoin the enforcement of a law taxing production of electrical power. The decree dissolved an interlocutory injunction and required the petitioner corporation to pay the tax, with interest, but without penalties accrued during the pendency of the suit.

Page 175

SUTHERLAND, J., lead opinion

MR. JUSTICE SUTHERLAND delivered the opinion of the court.

The Utah Power & Light Company is a Maine corporation doing business in the States of Idaho, Utah, and Wyoming, under the laws of those states. The corporation is a public utility engaged in generating, transmitting, and distributing electric power and energy for barter, sale, and exchange to consumers in each of these three states, and in interstate commerce among them. The present suit was brought to enjoin the enforcement of an act of the Idaho Legislature levying a license tax on the manufacture, generation, or production, within the state, for barter, sale, or exchange, of electricity and electrical energy. Laws of Idaho 1931 (Extraordinary session), c. 3.

Section 1 of the act provides that any individual, corporation, etc., engaged in the generation, manufacture, or production of electricity and electrical energy, by any means, for barter, sale, or exchange shall, at a specified time, render a statement to the commissioner of law enforcement of all electricity and electrical energy generated, manufactured, or produced by him or it in the state during the preceding month, and pay thereon a license tax of one-half mill per kilowatt hour, "measured at the place of production." Sections 2, 3, and 4 provide for the time and method of payment of the tax, and the furnishing of appropriate information. Section 4 further requires the producer to maintain at the point or points of production suitable instruments for measuring the electricity or electrical energy produced. Section 5, which is the subject of a distinct attack, provides:

All electricity and electrical energy used for pumping water for irrigation purposes to be used on lands in the State of Idaho is exempt from the provisions of this Act, except in cases where the water so pumped is sold or rented

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to such irrigated lands. Provided, the exemption here given shall accrue to the benefit of the consumer of such electricity or electrical energy. Provided further that the full amount of such license tax which would have been due from such producers of electricity and electrical energy, if such exemptions had not been made, shall be credited annually for the year in which the exemptions are made on the power bill to the consumer by the producer of such electricity and electrical energy, furnishing such power, and such producer shall include a statement of the amount of electricity and electrical energy exempted by this section, furnished by it for the purpose of pumping water for irrigation purposes on lands in the State of Idaho, to the Commissioner of Law Enforcement of the State of Idaho as a part of the statement required by Section 1 of this Act, together with a statement of the credits made on the power bills to the consumers of such electricity and electrical energy for the pumping of water for irrigation to be used on lands in the State of Idaho.

Section 8 imposes a penalty for any violation of the act, or failure to pay the license tax provided for therein when due, in the sum of three times the amount of the unpaid or delinquent tax, to be recovered by civil action. Section 11 provides that, if any section or provision of the act be adjudged unconstitutional or invalid, such adjudication shall not affect the validity of the act as a whole, or of any section or provision thereof not specifically so adjudged unconstitutional or invalid.

After the filing of the complaint, an interlocutory injunction was granted, 52 F.2d 226, and, thereafter, appellees answered. Upon the evidence reported by a master, to whom the case had been referred, the court below (composed of three judges, as required by law) made findings of fact and conclusions of law and entered a final decree dissolving the interlocutory injunction and

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requiring appellant to pay the tax in question with interest, but without any penalties which might have accrued during the pendency of the suit., 54 F.2d 803. This appeal followed.

The validity of the act under the federal...

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