DeKalb County v. State, S98A1338.

• Decision Date: 22 February 1999
• Docket Number: No. S98A1338.,S98A1338.
• Citation: 270 Ga. 776,512 S.E.2d 284
• Parties: DeKALB COUNTY et al. v. STATE of Georgia et al.
• Court: Georgia Supreme Court

512 S.E.2d 284

270 Ga. 776

DeKALB COUNTY et al. v. STATE of Georgia et al.

No. S98A1338.

Supreme Court of Georgia.

February 22, 1999.

Reconsideration Denied April 2, 1999.

Harvey S. Gray, Matthew Lincoln Hilt, Smith, Howard & Ajax, LLP, Atlanta, Jonathan A. Weintraub, County Attorney, Joan F. Roach, Chief Assistant County Attorney, DeKalb County Law Department, Decatur, for DeKalb County et al.

Thurbert E. Baker, Atty. Gen., Harold David Melton, Stefan Ernst Ritter, Asst. Attys. Gen., Daniel M. Formby, Warren R. Calvert, Senior Asst. Attys. Gen., Department of Law, Atlanta, for State of Georgia et al.

THOMPSON, Justice.

The issues for decision in this appeal are (1) whether OCGA § 48-8-67 is unconstitutional, either as a retrospective application of law which alters appellants' vested rights, or as a breach of an implied contract between DeKalb County and the State of Georgia; and (2) whether the trial court erred in dismissing appellants' claim for an accounting. We hold that the statute is constitutional on both bases; however, we remand the claim for an accounting to the trial court for further consideration.

The Homestead Option Sales and Use Tax Act, OCGA § 48-8-100 et seq., enacted by 1995 Ga. Laws 655, authorizes county governments to levy a homestead options sales and use tax (HOST Tax) in the amount of one percent of sales and use revenue generated. The Act requires the Commissioner of Revenue (Commissioner) to collect the tax on behalf of a county, retain one percent of the amount collected to defray administrative costs, and remit the remainder to that county. To facilitate proper collection and dissemination of the taxes, vendors are required to submit to the Commissioner a sales and use tax return that identifies the location from which the sales and use taxes were collected. Pursuant to a referendum passed by DeKalb County voters, DeKalb County implemented the HOST tax effective July 1, 1997.

Because of problems resulting from the revision of its sales and use tax report form and the implementation of a new computer system, the Department of Revenue had a $150 million backlog of undistributed and unidentifiable local option sales tax proceeds which were reported and collected prior to the enactment of OCGA § 48-8-67. Although DeKalb County is the only jurisdiction that has adopted the HOST tax, the backlog of unidentifiable proceeds also included other local option sales taxes imposed by other jurisdictions that the Commissioner is authorized by law to collect and distribute.

The provision under consideration, OCGA § 48-8-67, went into effect on April 6, 1998. It directs the Commissioner, after making "reasonable efforts to obtain the information needed to make a distribution of those proceeds," to "allocate unidentifiable proceeds among the authorized recipients in the same proportion as" identified proceeds.

DeKalb County filed suit in the Superior Court of Fulton County asserting that OCGA § 48-8-67 is unconstitutional because it applied retrospectively to DeKalb County's right to proceeds which had accrued prior to the enactment of OCGA § 48-8-67, under OCGA § 48-8-100 et seq., and breached an implied contract between the State of Georgia and DeKalb County. DeKalb County also sought mandamus, accounting, injunction, and other relief. The superior court granted the State's motion to dismiss, holding that the statute was not unconstitutional, and that the remaining claims were, therefore, subject to dismissal. DeKalb County appeals. We affirm in part and remand in part.

1. "Laws prescribe ... for the future; they cannot impair the obligation of contracts, nor, ordinarily, have a retrospective operation." OCGA § 1-3-5. Further, "[a] constitutional act of the legislature has been found to be the equivalent of a contract and the rights created thereby may not be impaired by subsequent legislation." Enger v. Erwin, 245 Ga. 753, 754, 267 S.E.2d 25 (1980).

But, a statute does not operate retrospectively in its legal sense simply "`because it relates to antecedent facts, ... it [must be] intended to affect transactions which occurred or rights which accrued before it became operative as such, and which ascribe to them essentially different effects, in view of the law at the time of their occurrence.' " Appalachee Enterprises v. Walker, 266 Ga. 35(2), 463 S.E.2d 896 (1995) (quoting Ross v. Lettice, 134 Ga. 866, 868, 68 S.E. 734 (1910)). That is, retrospective operation "`takes away or impairs vested rights acquired under existing laws or creates a new obligation, imposes a new duty, or attaches a new liability in respect to transactions or considerations already past.'" Appalachee Enterprises, supra at 37, 463 S.E.2d 896 (quoting Ross, supra). See also Coastal Georgia Regional Development Center v. Higdon, 263 Ga. 827, 830(2), 439 S.E.2d 902 (1994). But where the statute merely cures defects, enforces existing obligations, or confirms existing rights, it does not impair the substantive rights of the party and is not void. Seaboard Air-Line R. Co. v. Benton, 175 Ga. 491, 498(3), 165 S.E. 593 (1932); Byers v. Black Motor Co., 65 Ga.App. 773, 779, 16 S.E.2d 478 (1941). Thus, a statute that is procedural or remedial in nature may operate retrospectively so long as it does not impair vested rights. Enger, supra at 754, 267 S.E.2d 25; Seaboard Air-Line R. Co., supra at 499(3), 165 S.E. 593.

Once DeKalb County met the statutory requirements and implemented the HOST tax in July 1997, OCGA § 48-8-100 et seq. conferred on DeKalb County a substantive right to the tax proceeds collected by the Commissioner. Although the statute requires that the sales and use tax returns identify the location from which the tax is collected in order to facilitate the Commissioner's proper distribution of the tax proceeds, it is silent on the Commissioner's obligations should a tax return omit the identifying information.

OCGA § 48-8-67 provides direction to the Commissioner regarding the distribution of collected tax proceeds that are unidentifiable. It requires that the Commissioner first make a reasonable effort to identify the proceeds, then distribute unidentifiable proceeds to authorized recipients in the same proportion as identified proceeds. Prior to the enactment of OCGA § 48-8-67, to the extent that the Commissioner could identify tax proceeds as belonging to DeKalb County, he was required to remit them. It is not logical that DeKalb County has a vested right in tax proceeds that were not identifiable as belonging to it. Since there was no statutory directive regarding the disbursement of unidentifiable proceeds, the Commissioner was left to his discretion in dealing with them. An act of discretion does not give rise to a vested right; DeKalb County's right to the tax proceeds extended no further than the HOST statute granted. See Matheson v. DeKalb County, 257 Ga. 48(3)(5), 354 S.E.2d 121 (1987).

After the enactment of OCGA § 48-8-67, DeKalb County was still entitled to HOST tax proceeds that could be identified as belonging to it. OCGA § 48-8-67 did not take away or impair any...