Jefferson Cnty. v. Taxpayers & Citizens of Jefferson Cnty.
Decision Date | 17 March 2017 |
Docket Number | 1150327,1150326 |
Citation | 232 So.3d 845 |
Parties | JEFFERSON COUNTY and Jefferson County Commission v. TAXPAYERS AND CITIZENS OF JEFFERSON COUNTY Andrew Bennett, Mary Moore, John Rogers, and William Muhammad v. Jefferson County and Jefferson County Commission |
Court | Alabama Supreme Court |
J. Foster Clark, J. Russell Campbell, Ed R. Haden, and Jason B. Tompkins of Balch & Bingham LLP, Birmingham, for the appellants/cross-appellees Jefferson County and Jefferson County Commission.
David A. Sullivan, Birmingham; and Calvin B. Grigsby, Danville, California, for appellees/cross-appellants Taxpayers and Citizens of Jefferson County, Mary Moore, John Rogers, William Muhammad, and Andrew Bennett.
Wilson F. Green of Fleenor & Green LLP, Tuscaloosa; and E. Clayton Lowe, Jr., of The Lowe Law Firm, LLC, Birmingham, for appellee Taxpayer Keith Shannon.
J. Gorman Houston, Jr., of Lightfoot, Franklin & White, LLC, Birmingham, for amici curiae Boards of Education of Jefferson County, City of Tarrant, City of Fairfield, City of Midfield, City of Birmingham, and City of Trussville, in support of the appellants Jefferson County and Jefferson County Commission.
Thomas A. Woodall of Sirote & Permutt, PC, Birmingham; and R. Bernard Harwood, Jr., of Rosen Harwood, P.A., Tuscaloosa, for amici curiae Speaker of the Alabama House of Representatives and President Pro Tempore of the Alabama Senate, in support of the appellants Jefferson County and Jefferson County Commission.
Thomas L. Stewart and Wayne Morse, Jr., of Waldrep Stewart & Kendrick, LLC, Birmingham, for amicus curiae Birmingham Jefferson County Civic Center Authority, in support of the appellants Jefferson County and Jefferson County Commission.
Edward A. Hosp and Prim Formby Escalona of Maynard, Cooper & Gale, P.C., Birmingham, for amicus curiae Association of County Commissions of Alabama, in support of the appellants Jefferson County and Jefferson County Commission.
Jeffrey M. Anderson and S. Roderick Kanter of Bradley Arant Boult Cummings LLP, Birmingham; and W. Stanley Gregory of Bradley Arant Boult Cummings LLP, Montgomery, for amicus curiae Alabama League of Municipalities, in support of the appellants Jefferson County and Jefferson County Commission.
Jefferson County and the Jefferson County Commission (hereinafter referred to collectively as "the County parties") appeal from the judgment of the Jefferson Circuit Court ("the trial court") denying a petition for validation of the warrants filed by the County parties, pursuant to § 6–6–750 et seq., Ala. Code 1975, and opposed by the taxpayers and citizens of Jefferson County.1 Andrew Bennett, Mary Moore, John Rogers, and William Muhammad cross-appeal from the portion of the trial court's judgment declining to address alternative arguments they raised. As to the County parties' appeal (no. 1150326), we reverse. We dismiss the cross-appeal (no. 1150327).
Section 40–12–4(a), Ala. Code 1975, provides, in pertinent part:
In 2004 and 2005, Jefferson County issued warrants to raise funds to make certain grants to local boards of education to construct school buildings and to retire other debt.2 Those warrants are currently outstanding. All the revenue from Jefferson County's existing 1% education sales and use taxes levied under § 40–12–4, Ala. Code 1975, is pledged and required to pay the debt service on the outstanding warrants and certain related costs.
Jefferson County has experienced severe financial difficulties in recent years that eventually resulted in the County's filing a petition in bankruptcy. In 2009, this Court held that Jefferson County's occupational tax, imposed since 1987, was unconstitutional. Jefferson Cty. Comm'n v. Edwards, 32 So.3d 572 (Ala. 2009). Even though the legislature attempted to pass a new occupational tax, that effort did not survive judicial scrutiny. Jefferson Cty. v. Weissman, 69 So.3d 827 (Ala. 2011). In 2015, Jefferson County and its legislative delegation proposed local legislation in an effort to bolster the County's finances without an occupational tax. Jefferson County proposed a new 1% sales tax and a 1% use tax to replace its existing 1% education sales and use taxes, the purpose of which was to fund new warrants at a lower interest rate and a lower required debt service that would allow the County to retire its existing warrants. Jefferson County intended to use the replacement taxes to pay the reduced debt service on the new warrants and to use any excess for other purposes stated in the legislation, including additional school funding and its general fund. The replacement sales and use taxes for Jefferson County were proposed as House Bill 573 ("H.B. 573").
Section 71.01(C), Ala. Const. of 1901, prevents a house of the legislature from voting on a non-appropriations bill in a session until that house passes the basic annual appropriations bills. Section 71.01(C) also provides, however, that a house of the legislature may vote on a non-appropriations bill before the basic annual appropriations bills if that house takes an extra procedural step of passing a budget isolation resolution ("BIR") by "three-fifths of a quorum present." Section 71.01(C) does not specify whether "present" means present and voting or only present—whether voting or not. House Rule 36 interprets this constitutional provision to require three-fifths of the members "present and voting" to pass a BIR. Before voting on H.B. 573, the House of Representatives passed a BIR on May 21, 2015, with 13 yes votes and 3 no votes from the Jefferson County delegation. The remaining members of the House either abstained or did not vote. The House passed H.B. 573 on May 21. The Senate then passed the bill, the Governor signed it, and on May 27, 2015, H.B. 573 became Act No. 2015–226, levying the local sales and use taxes at issue in this case. Act No. 2015–226 provides:
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