Idaho Telephone Co. v. Baird

• Decision Date: 02 February 1967
• Docket Number: No. 9909,9909
• Parties: IDAHO TELEPHONE COMPANY et al., Plaintiffs-Appellants, v. E. D. BAIRD, Charles E. Gossett, T. Hedley Dingle, and T. C. Waddoups, as members of and constituting the Idaho State Tax Commission, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 337

423 P.2d 337

91 Idaho 425

IDAHO TELEPHONE COMPANY et al., Plaintiffs-Appellants, v. E. D. BAIRD, Charles E. Gossett, T. Hedley Dingle, and T. C. Waddoups, as members of and constituting the Idaho State Tax Commission, Defendants-Respondents.

No. 9909.

Supreme Court of Idaho.

Feb. 2, 1967.

Marcus, Leggat & Marcus, Boise, for appellants.

Allan G. Shepard, Atty. Gen., and Larry D. Ripley, Asst. Atty. Gen., and Givens, Givens & Manweiler, Boise, for respondents.

SMITH, Justice.

Appellants, public utility corporations owning property within the State of Idaho, brought this action pursuant to Idaho Code, Title 10, chap. 312, for a declaratory judgment. In their complaint appellants alleged that specific provisions of Idaho Session Laws 1965, chap. 312, now incorporated in Idaho Code, Title 63, relating to revenue and taxation, are violative of Idaho's Constitution, as well as the due process and equal protection clauses of the United States Constitution. Appellants further alleged that respondents lack authority to assess appellants' property at a higher ratio of full cash value than applies to other taxable property within the State. Upon the filing of respondents' answer, both appellants and respondents moved for judgment on the pleadings. Certain affidavits having been filed, the trial court considered the motions as motions for summary judgment, I.R.C.P. 12(c), and thereupon entered judgment in favor of respondents. Appellants have appealed from the judgment.

Chapter 312 of the 1965 Session Laws effected a general revision of the ad valorem property tax laws. The purpose of the revision, according to the declaration of legislative intent, was to equalize assessed valuations among the counties, and not to raise additional revenue. I.C. § 63-100. To this end, chapter 312 added I.C. § 63-101A, which provides as follows:

'All property within the jurisdiction of this state for the purpose of assessment and taxation is hereby classified as follows:

Class 1. Real Property,

Class 2. Personal Property, and

Class 3. Operating Property.'

Operating property is defined by I.C. § 63-113 as amended by chapter 312, to include:

'* * * all franchises, rights of way, roadbeds, tracks, pipe lines, terminals, rolling stock, equipment, power stations, power sites, lands, reservoirs, generating plants and substations, all immovable or movable property operated in connection with any public utility or car company, including the operating property of all railroads, telegraph, telephone, electric current transmission and distribution lines, pipe lines for the transportation of commodities, including water under the jurisdiction of the Idaho Public Utilities Commission, wholly or partly within this state, and reasonably necessary to the maintenance and operation of such road or line, or in conducting its business, and shall include all title and interest in such property, as owner, lessee or otherwise.' I.C. § 63-101B, incorporated into the code by chapter 312, imposes different ratios of assessment against appellants' operating property than prevails in the assessment of Class 1, Real Property, or Class 2, Personal Property. I.C. § 63-101B reads:

'The term 'assessed value' as used in this title shall mean a percentage of 'full cash value' as the latter term is hereinafter defined.

'Class 1, real property, as in this chapter defined, shall be assessed at twenty per cent (20%) of its full cash value.

'Class 2, personal property, as in this chapter defined, shall be assessed at twenty per cent (20%) of its full cash value.

'Class 3, operating property, as in this chapter defined, shall be assessed at forty per cent (40%) of its full cash value.'

I.C. §§ 63-100 and 63-2217, also are new enactments by the 1965 legislature contained in chapter 312. I.C. § 63-100 declares the legislative intent underlying the enactment of the chapter. I.C. § 63-2217 provides for adjustment of property tax levies during a two-year transition period, so that property tax revenues shall remain constant during the tax years 1966 and 1967.

Appellants' assignments of error present the issues:

1. Whether I.C. §§ 63-101A and 63-101B as enacted, and 63-113 as amended, by the 1965 legislature, are violative of Idaho Constitution, Art. VII, §§ 2, 3 and 5.

2. Whether I.C. §§ 63-100 and 63-2217, enacted by the 1965 legislature, are violative of Idaho Constitution, Art. VII, § 6.

3. Whether such sections of the statute are violative of the due process and equal protection clauses of the United States Constitution. 4. Whether the classification of operating property of public utility corporations, under I.C. §§ 63-101A, 63-101B and 63-113, is just and reasonable.

Idaho Constitution, Art. VII, § 2, reads as follows:

'Revenue to be provided by taxation.-The legislature shall provide such revenue as may be needful, by levying a tax by valuation, so that every person or corporation shall pay a tax in proportion to the value of his, her, or its property, except as in this article hereinafter otherwise provided. The legislature may also impose a license tax, both upon natural persons and upon corporations, other than municipal, doing business in this state; also a per capita tax: provided, the legislature may exempt a limited amount of improvements upon land from taxation.'

Art. VII, § 3, provides:

'Property to be defined and classified.-The word 'property' as herein used shall be defined and classified by law.'

Finally, Art. VII, § 5, reads:

'Taxes to be uniform-Exemptions.-- All taxes shall be uniform upon the same class of subjects within the territorial limits, of the authority levying the tax, and shall be levied and collected under general laws, which shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal: provided, that the legislature may allow such exemptions from taxation from time to time as shall seem necessary and just, and all existing exemptions provided by the laws of the territory, shall continue until changed by the legislature of the state: provided further, that duplicate taxation of property for the same purpose during the same year, is hereby prohibited.'

In considering the question of the constitutionality of an enactment, certain fundamental rules must be borne in mind. The burden of showing the unconstitutionality of a statute is upon the party asserting it, and invalidity must be clearly shown. Caesar v. Williams, 84 Idaho 254, 371 P.2d 241 (1962); Rich v. Williams, 81 Idaho 311, 341 P.2d 432 (1959); Eberle v. Nielson, 78 Idaho 572, 306 P.2d 1083 (1957).

This court is without power to invalidate or nullify an enactment of the legislature unless the legislation clearly violates the constitution. Caesar v. Williams, supra; Padgett v. Williams, 82 Idaho 114, 350 P.2d 353 (1960).

Every reasonable presumption must be indulged in favor of the constitutionality of an enactment of the legislature. Caesar v. Williams, supra; Idaho Gold Dredging Co. v. Balderston, 58 Idaho 692, 78 P.2d 105 (1938); Robinson v. Enking, 58 Idaho 24, 69 P.2d 603 (1937).

It must be kept in mind that the Constitution of the State of Idaho is not a delegation of power to the legislature but is a limitation on the power it may exercise, and that the legislature has plenary power in all matters for legislation except those prohibited by the constitution. Caesar v. Williams, supra; State ex rel. Rich v. Idaho Power Company, 81 Idaho 487, 346 P.2d 596 (1959); Rich v. Williams, supra; Utah Oil Refining Co. v. Hendrix, 72 Idaho 407, 242 P.2d 124 (1952); Boughton v. Price, 70 Idaho 243, 215 P.2d 286 (1950); McGoldrick Lbr. Co. v. Benewah Co., 54 Idaho 704, 35 P.2d 659 (1934); Koelsch v. Girard, 54 Idaho 452, 33 P.2d 816 (1934); Lloyd Corporation v. Bannock County, 53 Idaho 478, 25 P.2d 217 (1933); State ex rel. Macey v. Johnson, 50 Idaho 363, 296 P. 588 (1931); State v. Nelson, 36 Idaho 713, 213 P. 358 (1923); Achenbach v. Kincaid, 25 Idaho 768, 140 P. 529 (1914); St. Joe Improvement Co. v. Laumierster, 19 Idaho 66, 112 P. 683 (1910).

'A statute cannot declare a public policy contrary to the Constitution.' Boise-Payette Lumber Co. v. Challis Independent School Dist. No. 1, 46 Idaho 403, 408, 268 P. 26, 27 (1928). Any such declaration of policy is restricted by the limitations of the constitution. State Highway Commission v. Southern Union Gas Co., 65 N.M. 84, 332 P.2d 1007, 1016, 75 A.L.R.2d 408 (1958). See also State ex rel. Rich v. Idaho Power Co., supra.

The court must identify a specific prohibition in the constitution before it may justifiably declare a legislative enactment unconstitutional. Independent School Dist., etc. v. Pfost, 51 Idaho 240, 4 P.2d 893, 84 A.L.R. 820 (1931); Idaho Power & Light Company v. Blomquist, 26 Idaho 222, 141 P. 1083 (1914); Achenbach v. Kincaid, supra.

In determining the constitutionality of a statute, the court may properly consider the proceedings of the Constitutional Convention so as to interpret the applicable provisions of the Constitution as nearly as possible in a manner consonant with the objects and purposes contemplated by the framers of the Constitution at the time of its adoption. Oneida County Fair Board v. Smylie, 86 Idaho 341, 386 P.2d 374 (1963); see also State v. Village of Garden City, 74 Idaho 513, 265 P.2d 328 (1953); Higer v. Hansen, 67 Idaho 45, 170 P.2d 411 (1946); Wright v. Callahan, 61 Idaho 167, 99 P.2d 961 (1940); Williams v. Baldridge, 48 Idaho 618, 284 P. 203 (1930); Fralick v. Guyer, 36 Idaho 648, 213 P. 337 (1923).

Idaho Constitution, Art. VII, §§ 2, 3 and 5, inasmuch as they relate to the same matter or subject, i.e., revenue and taxation, must be construed in pari materia.

Appellants' principal argument is that the Idaho Constitution, Art. VII, relating to finance and revenue, dictates a uniform rule for property taxation within jurisdictions levying the tax.

A constitutional rule of uniform ad valorem taxation forbids...