Jefferson Cnty. v. Taxpayers & Citizens of Jefferson Cnty., 1150326

CourtSupreme Court of Alabama
Writing for the CourtPER CURIAM.
Citation232 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
Decision Date17 March 2017
Docket Number1150327,1150326

232 So.3d 845

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

1150326
1150327

Supreme Court of Alabama.

March 17, 2017


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.

PER CURIAM.

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

232 So.3d 848

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).

I. Factual Background and Procedural History

Section 40–12–4(a), Ala. Code 1975, provides, in pertinent part:

"In order to provide funds for public school purposes, the governing body of each of the several counties in this state is hereby authorized by ordinance to levy and provide for the assessment and collection of franchise, excise and privilege license taxes with respect to privileges or receipts from privileges exercised in such county, which shall be in addition to any and all other county taxes heretofore or hereafter authorized by law in such county.... All the proceeds from any tax levied pursuant to this section less the cost of collection thereof shall be used exclusively for public school purposes, including specifically and without limitation capital improvements and the payment of debt service on obligations issued therefor."

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").

232 So.3d 849

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:

"ENROLLED, An Act,

"Relating to Jefferson County; to authorize the Jefferson County Commission to levy and assess, subject to the limitations set forth herein, a privilege or license tax against retail sales of tangible personal property and amusements (a ‘sales tax’) and an excise tax on the storage, use, or consumption of tangible personal property (a ‘use tax’); to make legislative findings; to provide for definitions; to provide that the rate of sales and use taxes authorized by this act shall not exceed one percent; to require the simultaneous cancellation of a certain existing sales and use tax levy in the county if the taxes authorized by this act are levied by the county; to provide additional restrictions; to provide that the provisions of the state sales and use tax laws and regulations which are not inconsistent with this act shall be applicable with respect to the taxes authorized by this act; to provide for the continued levy of the taxes authorized herein following the repeal of either or both of the state sales tax or the state use tax; to provide for the collection and enforcement of the taxes authorized by this act; to require the sales taxes authorized by this act to be collected at the point of sale; to provide for the promulgation of rules and procedures; to provide for distribution of the proceeds of the taxes authorized herein first to debt service and other amounts due with respect to certain warrants issued for certain designated public school purposes, second to the general fund of the county, third to the Jefferson County 2015 Sales Tax Fund, fourth to the Jefferson County Community Service Fund, fifth to the Birmingham–Jefferson County Transit Authority, sixth to the Birmingham Zoo, Inc., and seventh to the general fund of the county; to create and provide for the Jefferson County 2015 Sales Tax Fund; to provide for distributions from the Jefferson County 2015 Sales Tax Fund to schools serving county residents; to create and provide for the Jefferson County Community Service Committee; to create and provide for the Jefferson County Community Service Fund; to provide for the expenditure of amounts deposited in the Jefferson County Community Service Fund by the Jefferson County Community Service Committee upon recommendations from members of the Jefferson County Legislative Delegation; to provide for the termination of the taxes authorized by this act upon the defeasance or other
232 So.3d 850
full payment of refunding school warrants provided for herein; to provide that the provisions of this act are severable; and to provide for an effective date.

"BE IT ENACTED BY THE
...

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4 practice notes
  • Glass v. City of Montgomery, 1200240
    • United States
    • Supreme Court of Alabama
    • February 11, 2022
    ...of Birmingham v. City of Vestavia Hills, 654 So.2d 532 (Ala. 1995), and Jefferson County v. Taxpayers & Citizens of Jefferson County, 232 So.3d 845 (Ala. 2017) (plurality opinion), dictate a holding that the Act does not address a "case which is provided for by a general law." As previously......
  • Burnett v. Chilton Cnty. Health Care Auth., 1160958
    • United States
    • Supreme Court of Alabama
    • August 31, 2018
    ...filed a motion to stay the action pending a ruling from this Court in Jefferson County v. Taxpayers & Citizens of Jefferson County, 232 So.3d 845, 848 (Ala. 2017), because of similar arguments in that case concerning alleged violations of Art. IV, § 71.01(C), Ala. Const. 1901.On March 17, 2......
  • Barnett v. Jones, 1190470
    • United States
    • Supreme Court of Alabama
    • May 14, 2021
    ...Cnty. v. Allen, 775 So. 2d 808, 812 (Ala. 2000); Bharat, 931 So. 2d at 702; Jefferson Cnty. v. Taxpayers & Citizens of Jefferson Cnty., 232 So. 3d 845, 864 (Ala. 2017) (plurality opinion). Like the old "substantial difference" test, the "variance" test is an incomplete mode of analysis. Whi......
  • City of Birmingham Ret. & Relief Sys. v. McGough, 1150997
    • United States
    • Supreme Court of Alabama
    • March 17, 2017
    ...this letter was an exhibit admitted during the course of the bench trial. McGough has not directed this Court's attention to anything 232 So.3d 845in the record indicating that he objected to the admission of this evidence at trial. Nor does McGough argue that this Court should not consider......
4 cases
  • Glass v. City of Montgomery, 1200240
    • United States
    • Supreme Court of Alabama
    • February 11, 2022
    ...of Birmingham v. City of Vestavia Hills, 654 So.2d 532 (Ala. 1995), and Jefferson County v. Taxpayers & Citizens of Jefferson County, 232 So.3d 845 (Ala. 2017) (plurality opinion), dictate a holding that the Act does not address a "case which is provided for by a general law." As previously......
  • Burnett v. Chilton Cnty. Health Care Auth., 1160958
    • United States
    • Supreme Court of Alabama
    • August 31, 2018
    ...filed a motion to stay the action pending a ruling from this Court in Jefferson County v. Taxpayers & Citizens of Jefferson County, 232 So.3d 845, 848 (Ala. 2017), because of similar arguments in that case concerning alleged violations of Art. IV, § 71.01(C), Ala. Const. 1901.On March 17, 2......
  • Barnett v. Jones, 1190470
    • United States
    • Supreme Court of Alabama
    • May 14, 2021
    ...Cnty. v. Allen, 775 So. 2d 808, 812 (Ala. 2000); Bharat, 931 So. 2d at 702; Jefferson Cnty. v. Taxpayers & Citizens of Jefferson Cnty., 232 So. 3d 845, 864 (Ala. 2017) (plurality opinion). Like the old "substantial difference" test, the "variance" test is an incomplete mode of analysis. Whi......
  • City of Birmingham Ret. & Relief Sys. v. McGough, 1150997
    • United States
    • Supreme Court of Alabama
    • March 17, 2017
    ...this letter was an exhibit admitted during the course of the bench trial. McGough has not directed this Court's attention to anything 232 So.3d 845in the record indicating that he objected to the admission of this evidence at trial. Nor does McGough argue that this Court should not consider......

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