JEFFERSON COUNTY COM'N v. Edwards

• Decision Date: 18 September 2009
• Docket Number: 1080496.
• Citation: 32 So.3d 572
• Parties: JEFFERSON COUNTY COMMISSION et al. v. Jessica EDWARDS et al.
• Court: Alabama Supreme Court

32 So.3d 572

JEFFERSON COUNTY COMMISSION et al. v. Jessica EDWARDS et al.

1080496.

Supreme Court of Alabama.

August 25, 2009.

Opinion Overruling Rehearing September 18, 2009.

COPYRIGHT MATERIAL OMITTED

William M. Slaughter, Mark D. Hess, and James W. Porter III of Haskell Slaughter Young & Rediker, LLC, Birmingham; and R. Bernard Harwood and Jane Laird Calamusa of Rosen Harwood, PA, Tuscaloosa, for appellants.

Samuel M. Hill of Hill Turner, LLC, Birmingham; James H. McFerrin of McFerrin Law Office, Birmingham; and E. Allen Dodd, Jr., of Scruggs, Dodd & Dodd, Fort Payne, for appellees.

Thomas L. Stewart and Robert M. Rosenberg of Waldrep, Stewart & Kendrick, LLC, Birmingham, for amicus curiae Birmingham-Jefferson Civic Center Authority, in support of the appellants.

LYONS, Justice.

The Jefferson County Commission and other defendants in a declaratory-judgment action appeal from a judgment of the Jefferson Circuit Court that effectively held that by an enactment in 1999 the Alabama Legislature repealed Jefferson County's authority to impose an occupational tax. This Court expedited the proceedings and heard oral arguments from the parties on August 18, 2009. We affirm.

I. Statutory and Decisional-Law Context

This case arises from an exquisitely complex sequence of legislative enactments and related litigation; the facts and procedural history are best understood against that background. In 1967, the Alabama Legislature enacted Act No. 406, which authorized Jefferson County to impose business-license and occupational taxes upon any person engaging in a business for which he or she was not then required to pay a license or privilege tax to either the State of Alabama or Jefferson County. In 1968, Jefferson County enacted a general business-license code, Ordinance No. 1172; however, no occupational tax was imposed at that time.¹ In 1987, Jefferson County enacted Ordinance No. 1120 which, for the first time, imposed an occupational tax. Consistent with Act No. 406, that ordinance exempted from the tax persons who paid license or privilege taxes to the State or Jefferson County.

A class action styled Richards v. Jefferson County was filed in 1992, in which the plaintiffs sought a judgment declaring Jefferson County's occupational tax unconstitutional; the case was assigned to Judge John E. Rochester. Judge Rochester entered an order in that action on June 17, 1999, which this Court described in a subsequent appeal, stating:

"Judge John E. Rochester entered a judgment on November 12, 1998, holding that the exemptions required by § 4 of Act 406 and allowed by Section 1(B) of Ordinance No. 1120 violated the Equal Protection Clause. On June 17, 1999, Judge Rochester entered an order enjoining the County from continuing to collect the occupational tax from the members of the Richards class unless it also collected the tax from persons who were exempt under the terms of § 4 of Act No. 406 and by Section 1(B) of Ordinance No. 1120. Pursuant to that order, Jefferson County began collecting the tax from the allegedly exempt taxpayers; also pursuant to Judge Rochester's order, the County placed those newly collected funds in a special escrow account. Jefferson County appealed from this order."

Jefferson County v. Richards, 805 So.2d 690, 694 (Ala.2001) ("Richards").

After Jefferson County had begun collecting the occupational tax from the exempt taxpayers pursuant to Judge Rochester's order, Phillip Triantos, a Birmingham physician, commenced a separate class action against Jefferson County.

"Triantos sought a judgment declaring that Jefferson County had no authority to impose the occupational tax on the exempt taxpayers and an injunction prohibiting Jefferson County from collecting the occupational tax from the exempt taxpayers; he also sought a refund of all occupational taxes that had been collected from the exempt taxpayers."

Richards, 805 So.2d at 694 (footnote omitted). The members of the Triantos class were persons allegedly exempt from payment of the occupational tax. On January 12, 2000, then Judge Thomas Woodall (who is now a Justice on this Court) "issued the requested declaratory judgment and the requested injunction, finding no lawful basis under which Jefferson County could impose the occupational tax on the members of the Triantos class because the 1967 Act Act No. 406 conferred no such taxing authority on Jefferson County." Id.² Jefferson County appealed from this injunction.

The two appeals were consolidated and resolved in Richards, 805 So.2d at 690. This Court affirmed Judge Woodall's decision in the Triantos action and reversed Judge Rochester's decision in the Richards action. Specifically, this Court held that the Equal Protection Clause of the United States Constitution was not violated by the legislature's recognition in Act No. 406 of exemptions for taxpayers already subject to state licensing taxes. 805 So.2d at 704.

While the Richards litigation and the Triantos litigation, which eventuated in the consolidated appeals in Richards, were pending in the trial court, the legislature, at its 1999 Regular Session, passed Act No. 99-406, which was to be effective as of June 9, 1999, a little more than a week before Judge Rochester struck down Act No. 406 on equal-protection grounds. Act No. 99-406 authorized Jefferson County to levy a business-license tax, § 4, and an occupational tax, § 6, and made 144 line-item appropriations from the proceeds of the taxes so levied and collected, § 21. Act No. 99-406 did not contain any provisions for the repeal of Act No. 406, enacted in 1967. Rather, it gave the Jefferson County Commission the option to elect to come under the new provisions of Act No. 99-406 pursuant to its own plan and schedule. However, the exercise of such an election, when it occurred, would be irrevocable, and the provisions of Act No. 99-406 would then supplant the provisions of Act No. 406. Act No. 99-406 further provided:

"If any occupational tax imposed hereunder shall be invalidated by a court of competent jurisdiction from which no further appeal can be taken, then the superseded Act 406 (1967) occupational tax shall be fully reinstated and Act 406 (1967) shall be given uninterrupted full force and effect with respect to the levy and collection of such Act 406 occupational tax as if the invalidated occupational tax had never been levied. . . ."

Act No. 99-406, § 7(b). Jefferson County never collected taxes pursuant to Act No. 99-406 and, at all times relevant to this action, was acting pursuant to Act No. 406 enacted in 1967.

In Richards, this Court stated: "In 1999, the Legislature purported to repeal Act No. 406 (1967) by adopting Act No. 99-406 and Act No. 99-669. However, Act No. 99-406 was declared unconstitutional by Judge Woodall in Triantos v. Jefferson County." 805 So.2d at 694 n. 2. Judge Woodall determined that Act No. 99-406 was unconstitutional because the requirements for publication and proof of notice of Art. 4, § 106, Ala. Const.1901, were not met in connection with its enactment.

On November 15, 1999, during the 1999 Second Special Session of the Alabama Legislature and while the Triantos litigation was pending, but prior to Judge Woodall's entry of an injunction on January 12, 2000, enjoining enforcement of Act No. 99-406, Rep. Arthur Payne introduced House Bill 29, which, by its terms, expressly repealed "Act 406 of the 1967 Regular Session." (Emphasis added.) A "Fiscal Note" appended to House Bill 29, pursuant to § 29-5-12, Ala.Code 1975, and then current House and Senate rules, estimated that if Jefferson County chose "to collect the occupational tax under Act 99-406 upon the repeal of the old law i.e., Act No. 406 (1967)," an additional $8,000,000 in occupational-tax receipts would be realized in each subsequent fiscal year. House Bill 29 was enacted by the legislature on November 23, 1999, approved by the Governor on November 29, 1999, and designated as Act No. 99-669. The act, by its terms, was to become effective April 1, 2000.

The Jefferson County Employees' Association and others promptly sued Jefferson County, seeking a determination of the invalidity of Act No. 99-669. In that action (hereinafter "the JCEA action"), the Jefferson Circuit Court, Judge William A. Jackson, entered an order on March 8, 2000, finding Act No. 99-669 unconstitutional. Among other things, the court found (1) that Act No. 99-669 was passed during a special session; (2) that the subject matter of the act was not included in the Governor's proclamation declaring a special session; (3) that, because the subject matter of the act was not mentioned in the proclamation, under Ala. Const.1901, § 76, a minimum of two-thirds of the 53 members of the House of Representatives (36 votes) and two thirds of a quorum of 18 members of the Senate (12 votes) was needed for the act to pass; and (4) that the act received only 14 votes in the House and 11 votes in the Senate. Accordingly, the circuit court held that Act No. 99-669 was unconstitutional and that its repeal of Act No. 406 (1967) was void. No party appealed the circuit court's decision.

In Richards, this Court stated: "Act No. 99-669 was declared invalid in Jefferson County Employees' Association et al. v. Jefferson County, Alabama et al. (CV-00-0297), by Circuit Judge William A. Jackson." 805 So.2d at 694 n. 2. With respect to the validity of both Act No. 99-406, declared unconstitutional by Judge Woodall, and Act No. 99-669, this Court concluded: "These issues are not before this Court in these appeals." Id. (emphasis added).

On March 21, 2000, during the 2000 Regular Session and almost two weeks after the circuit court's order in the JCEA action, the legislature passed Act No. 2000-215, which had also been introduced and sponsored in the Alabama House of Representatives by Rep. Payne. By Act No. 2000-215, the legislature directly "imposed an occupational tax to replace any existing occupational tax" levied by...