Independent Community Bankers Ass'n of South Dakota, Inc. v. State By and Through Meierhenry

• Decision Date: 27 April 1984
• Docket Number: No. 14288,14288
• Citation: 346 N.W.2d 737
• Parties: INDEPENDENT COMMUNITY BANKERS ASSOCIATION OF SOUTH DAKOTA, INC.; Professional Insurance Agents of South Dakota; South Dakota Association of Life Underwriters; and the Independent Insurance Agents of South Dakota, Inc., Plaintiffs and Applicants, v. STATE of South Dakota; By and Through its Attorney General, Honorable Mark V. MEIERHENRY, Defendant and Respondent.
• Court: South Dakota Supreme Court

Page 737

346 N.W.2d 737

INDEPENDENT COMMUNITY BANKERS ASSOCIATION OF SOUTH DAKOTA INC.; Professional Insurance Agents of South Dakota; South Dakota Association of Life Underwriters; and the Independent Insurance Agents of South Dakota, Inc. Plaintiffs and Applicants, v. STATE of South Dakota; By and Through its Attorney General Honorable Mark V. MEIERHENRY, Defendant and Respondent.

No. 14288.

Supreme Court of South Dakota.

Argued Jan. 16, 1984.

Decided March 28, 1984.

Rehearing Denied April 27, 1984.

Ronald G. Schmidt of Schmidt, Schroyer, Colwill & Zinter, Pierre, for plaintiffs and applicants.

Mark A. Moreno, Asst. Atty. Gen., Pierre, for defendant and respondent; Mark V. Meierhenry, Atty. Gen., Pierre, on brief.

MORGAN, Justice.

This is an original proceeding under SDCL ch. 15-25 wherein Independent Community Bankers Association of South Dakota, Inc.; Professional Insurance Agents of South Dakota; South Dakota Association of Life Underwriters; and the Independent Insurance Agents of South Dakota, Inc. (plaintiffs) challenge the constitutionality of SB 256/1983 (afterwards enrolled as Chapter 356 of the 1983 Session Laws), hereinafter referred to as SB 256 or as the bill, as violative of four requirements of the South Dakota Constitution: (1) that no law shall embrace more than one subject which shall be expressed in its title; (2) that every bill shall be read twice by number and title, once when introduced and once upon final passage; (3) that the legislature may not improperly delegate its authority nor pass vague or uncertain laws; and (4) that the legislature must comply with due process requirements of the South Dakota Bill of Rights when enacting laws. We disagree and conclude that the legislature did not violate the constitution or laws of South Dakota in the enactment of SB 256.

We note first the brief history of the enactment of SB 256. The Senate convened on Friday, March 4, 1983, and a motion was made to suspend the rules for the purpose of introducing and placing SB 256 on the Senate calendar for that day under Second Reading of Senate Bills. The motion carried by two-thirds of the elected members. SB 256 was then introduced and read for the first time. Later that day, the bill was read a second time, and voted upon. The bill did not receive an affirmative vote from two-thirds of the members-elect, and thus failed to pass. A motion to reconsider SB 256 later that day prevailed however, and upon reconsideration, the bill passed and the title was agreed to.

The House received SB 256 the same day the bill passed in the Senate and a motion was made to suspend the rules for introduction, first reading, referral to committee and placement of SB 256 on the day's calendar. The motion likewise carried by two-thirds of the elected members. The bill was later read by number and title "the second time" (House Journal, page 1205), voted upon and passed by two-thirds majority of the House members-elect.

Both houses of the legislature found the bill properly enrolled and the Speaker of the House and the President of the Senate each read the bill publicly and signed it before their respective chambers. The Senate delivered the bill to the Governor at 5:47 o'clock p.m. on March 4, 1983, the day it was first introduced. The Governor signed the bill at that time and it went into effect immediately as a result of the emergency clause incorporated therein. ¹

Any legislative act is accorded a presumption in favor of constitutionality and that presumption is not overcome until the unconstitutionality of the act is clearly and unmistakenly shown and there is no reasonable doubt that it violates fundamental constitutional principles. South Dakota Ass'n, Etc. v. State, Etc., 280 N.W.2d 662 (S.D.1979). Legislative action is also accorded a presumption in favor of validity and propriety and no statute should be held unconstitutional by any court unless its infringement of constitutional restrictions is so plain and palpable as to admit of no reasonable doubt. Clem v. City of Yankton, 83 S.D. 386, 160 N.W.2d 125 (1968).

We first examine plaintiffs' contention that SB 256 violates Art. III, Sec. 21, of the South Dakota Constitution which provides in essence that "[n]o bill shall embrace more than one subject, which shall be expressed in the title." The title of SB 256 reads:

"AN ACT to revise the provisions for ownership, powers, operation and taxation of certain banks and their subsidiaries and to declare an emergency."

This court reviewed the application of Art. III, Sec. 21, in McMacken v. State, 320 N.W.2d 131, rehearing 325 N.W.2d 60 (S.D.1982), and reiterated the court's holding in State v. Morgan, 2 S.D. 32, 48 N.W. 314 (1891). The court looked at the purpose for the constitutional provision as it was presented in Morgan:

(1) prevent combining into one bill several diverse measures which have no common basis except, perhaps, their separate inability to receive a favorable vote on their own merits; (2) prevent the unintentional and unknowing passage of provisions inserted in a bill of which the title gives no intimation; and (3) fairly apprise the public of matters which are contained in the various bills and to prevent fraud or deception of the public as to matters being considered by the legislature.

320 N.W.2d at 138. The first purpose given for this constitutional provision is the basis for the one-subject requirement. The second and third stated purposes for the provision are grounds for the second requirement of Art. III, Sec. 21; the one subject embraced within every law shall be expressed in its title. S.D.Const. art. III, Sec. 21.

Plaintiffs first contend that the bill violates the requirement that it shall not embrace more than one subject, inasmuch as SB 256 refers only to "banks" while the eight sections of the bill deal with a variety of subjects, including bank holding companies, insurance, taxation of insurance companies, the sale of banks, and a filing fee. Plaintiffs point to the fact that the bill amends at least six different sections of the South Dakota Codified Laws as evidence that the bill encompasses more than one subject.

We disagree, however, inasmuch as each section of SB 256 is easily subsumed within the general subject of the bill, which is the regulation of "certain banks and their subsidiaries." The subject of a law is "the public or private concern for which the law is enacted, and all provisions of the Act must relate directly to the same subject, have a natural connection, and not be foreign to the subject as stated in the title." McMacken, 320 N.W.2d at 138. The concern for which SB 256 was enacted was the regulation, e.g., "ownership, powers, operation and taxation" of banks and their subsidiaries, e.g., insurance companies, and each section of the bill relates directly to that concern.

Section one is an emergency clause which presents the economic conditions which spawned the bill and outlines the bill's anticipated effect on the state's economy. Section two allows out-of-state bank holding companies to more readily acquire greater interests in South Dakota banks and thus regulates the ownership of banks. Section three prohibits banks acquired pursuant to section two from operating to the detriment of existing banks or insurance companies and subjects banks and their subsidiary insurance companies to the laws and regulations that govern the traditional insurance industry. This section goes to the "powers" and "operation" of banks which enter the insurance business under section five. Section four revised two of the four criteria upon which acquisition and formation of banks, pursuant to section two, will be permitted and imposed a fee upon those acquisitions and formations. This section deals directly with the ownership and taxation of banks and is clearly embraced within the subject of the title. Section five empowers banks, including banks acquired or formed under section two, to participate, either directly or through subsidiaries, in the insurance business. This section amends the statutory powers and permissible operations of banks and their subsidiaries. Bank powers and operations fall directly under the regulation of banks and their subsidiaries, the clearly stated general subject of SB 256. Sections six and seven, respectively, subject banks and insurance companies to both the retail occupational sales tax and the use tax on tangible personal property. The title affords notice that SB 256 revises provisions for the taxation of banks and their subsidiaries and these sections are embraced by the general subject of the bill in that taxation is part of the regulation of banks and their subsidiaries. Section eight is another emergency clause and gave the bill force and effect upon approval.

This court stated in State v. Youngquist, 69 S.D. 592, 594, 13 N.W.2d 296, 297 (1944), that the subject of a statute "is singular when a number of things constituting a group or class are treated as a unit for general legislation." Each of the eight sections of SB 256 has a natural connection with the regulation of banks in the insurance business and no section of the bill is foreign to that subject as it is stated in the title. See State v. Morgan, supra. In a line of cases led by Morgan, supra, ² this court held that while the subject must be single, provisions to accomplish the objective of an act may be multifarious. State v. Morgan, supra. Art. III, Sec. 21 of our Constitution controls only the subject of an act, limiting all acts to one subject expressed in the title. Art. III, Sec. 21, does not require that the title index the contents of an act. Clem v. City of Yankton, supra. There is no restriction on the scope of a single subject provided it is encompassed by the title. State v. Morgan, infra. "The provisions of the act must all relate directly to the same subject, have a natural connection, and not be foreign to the subject as stated in the title." 2...