Lamar v. Board of Ed. of Hancock County School Dist.

• Decision Date: 14 May 1971
• Citation: 467 S.W.2d 143
• Parties: Leroy LAMAR, Hawesville, Kentucky, Individually, etc., et al., Appellants, v. BOARD OF EDUCATION OF the HANCOCK COUNTY SCHOOL DISTRICT and Fiscal Court of Hancock County, Kentucky, Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 143

467 S.W.2d 143

Leroy LAMAR, Hawesville, Kentucky, Individually, etc., et al., Appellants, v. BOARD OF EDUCATION OF the HANCOCK COUNTY SCHOOL DISTRICT and Fiscal Court of Hancock County, Kentucky, Appellees.

Court of Appeals of Kentucky.

May 14, 1971.

Joseph R. Rubin, John S. Smith, Rubin & Trautwein, Louisville, for appellants.

Harold Wayne Newton, Paul L. Madden, Hancock County Atty., Hawesville, for appellees.

H. Hamilton Rice, Jr., Sandidge, Holbrook, Craig & Hager, Owensboro, for intervening plaintiffs.

Ben B. Fowler, Dailey & Fowler, Frankfort, for Kentucky School Boards Assn., amicus curiae.

STEINFELD, Judge.

This litigation involves the validity of legislation which authorizes the respective counties acting on the initiative of the school boards located therein to levy a tax for school purposes of three percent of the gross receipts derived from furnishing utility services within the county. KRS 160.613. In a class action (CR 23) the parties to this appeal submitted to the trial court certain questions in a proceeding authorized by KRS 418.020, a part of the Declaratory Judgment Act. They sought to obtain an adjudication of a controversy as to the constitutionality of House Bill 471 of the 1966 General Assembly, Part III, the Utility Gross Receipts License Tax for Schools codified as KRS 160.593 through 160.648, and the validity of its levy in Hancock County, Kentucky. The court made findings of fact and conclusions of law pursuant to CR 52.01 and adjudged among other things, 'That the License Tax is a valid and constitutional tax and has been and is being levied and collected * * * in a valid and constitutional manner.' The appeal is from that judgment. We affirm.

Twelve days after the action was filed Southwire Company, National Southwire Aluminum Corporation, National Aluminum Corporation and Big Rivers Rural Electric Cooperative Corporation moved to be excluded from the class. The motion was sustained and they, excepting Big Rivers, with the permission of the court intervened making many of the contentions presented by appellant, Lamar, whom the court authorized to represent the class. The complaint of the intervenors raised two special issues which were:

'1. Whether or not representation by Leroy Lamar will fairly and adequately protect the class and all members thereof.

2. Whether or not the School District had, by 1965, availed itself of all possible sources of revenue.'

In its conclusions of law the court answered both of these issues in the affirmative. The intervenors have not appealed, but appellant, Lamar, continues to challenge the above-stated second issue and to attack other conclusions of law reached by the trial court. However, the litigants before us agree that the subject matter of this action is proper for submission under KRS 418.020, that Lamar is a proper class plaintiff and that he has fairly and adequately protected the interests of the members of the class which he represents.

The controversial statutes authorize the respective fiscal courts, on request of 'One or more boards of education of school districts which contain at least ninety percent of the county's inhabitants * * *' to levy one of three types of school taxes. KRS 160.593. The one adopted in Hancock County is entitled 'Utility Gross Receipts License Tax for Schools'. KRS 160.613. The request was made and the fiscal court levied that tax at the rate of 3% of the gross receipts from all nonexempt utility users in that county beginning January 1, 1970. As authorized by the act the utility companies passed the charge on to the customers. KRS 160.617.

Appellant claims that the title of the act does not comply with § 51 of the Kentucky Constitution which provides, 'No law enacted by the general assembly shall relate to more than one subject, and that shall be expressed in the title, * * *.' The House Bill was designated 'An act relating to education, and the financing thereof' and was composed of five parts. Part I amends KRS 157.390 and 157.420 and provides a method by which the Super-intendent of Public Instruction and State Board of Education can classify teachers as to rank and it fixes a salary schedule for the teachers. Part II amends KRS 141.042 and 141.044 and provides for certain corporations to file a Declaration of Estimated Taxes. Part III authorizes three optional school taxes and specifies the conditions for their levy. Part IV creates a commission to help education and Part V states that if any provision of the act is invalid such invalidity shall not affect the remaining portions of the act.

Section 51 of the Constitution requires that the title of an act be '* * * fairly expressive of the context of the bill * * *'. Commonwealth v. Barney, 115 Ky. 475, 74 S.W. 181, 24 K.L.R. 2352 (1903). It is necessary, however, that each provision '* * * be germane and not foreign to the title.' Duke v. Boyd County, 225 Ky. 112, 7 S.W.2d 839 (1928). We stated in Engle v. Bonnie, 305 Ky. 850, 204 S.W.2d 963 (1947), that among the purposes of § 51 were '* * * to prevent surprise or fraud, and the enactment of vicious legislation under an innocent and misleading title.' It is our opinion that the title was sufficient to put the members of the General Assembly and the public on notice that a tax might be authorized to finance education, therefore, it met constitutional requirements. Miller v. City of Louisville, Ky., 321 S.W.2d 237 (1959).

The appellant claims that the tax is really an excise tax and that it is impermissible for the county to make such a levy. Reliance is on § 181 of the Kentucky Constitution which, in pertinent part, provides:

'The General Assembly may, by general laws only, provide for the payment of license fees on franchises, stock used for breeding purposes, the various trades, occupations and professions, or a special or excise tax: and may, by general laws, delegate the power to counties, towns, cities and other municipal corporations, to impose and collect license fees on stock used for breeding purposes, on franchises, trades, occupations and profession. * * *.'

He cites Driver v. Sawyer, Ky., 392 S.W.2d 52 (1965), in which we considered an act which imposed a tax on each conviction in a criminal case with the proceeds establishing a county jail building fund. We said:

'If this tax is to be considered as one imposed by county, it violates Section 181 of the Kentucky Constitution because it is not a kind of tax that a county may levy. Ad valorem taxes and license taxes are the only kinds of taxes that a county may levy. Wiedemann Brewing Co. v. City of Newport, Ky., 321 S.W.2d 404.

If, on the other hand, the tax is to be considered a tax imposed by the state for county purposes, it runs squarely into the opening words of Section 181: 'The General Assembly shall not impose taxes for the purposes of any county * * *'.'

In declaring the taxing statute questioned in Sawyer to be invalid we said:

'There remains only the possibility that the tax could be considered as one imposed by the state for state purposes; this being on the theory that a county jail is a matter of general statewide concern. But the tax cannot be sustained even under this view because by the clear mandate of Section 171 of the Kentucky Constitution a state tax must be imposed on a statewide basis. Here the tax is imposed only in one county.'

Driver may be distinguished on the basis that the act we now are considering applies to all counties.

We find it unnecessary to classify the tax as excise or license because either type may be levied for state purposes and it was for state purposes that the levy being attacked was made.

In City of Louisville v. Board of Education of City of Louisville, 154 Ky. 316, 157 S.W. 379 (1913), we said:

'We have several times written, in substance and effect, that every common school in the state, whether it be located in a populous city or in a sparsely settled rural district, is a state institution, protected, controlled, and regulated by the state, and that the fact that the state has appointed agencies such as fiscal courts, school trustees, and municipal bodies to aid it in the collection of taxes for the maintenance of these schools does not deprive them of their state character. * * *. Therefore, when a municipal body, or a county, or a school district, levies taxes for school purposes, the tax so levied is a state, and not a municipal, county, or district tax, although it be levied and collected by municipal or county or district officers.'

We wrote in Cullinan v. Jefferson County, Ky., 418 S.W.2d 407 (1967), that:

'A board of education in Kentucky is performing a function of the state in operating the public schools as state institutions. City of Louisville v. Board of Education, 154 Ky. 316, 157 S.W. 379. 'Public education has always been regarded as a matter of state concern * * *.' Commonwealth ex rel. Baxter v. Burnett, 237 Ky. 473, 35 S.W.2d 857.

School taxes are classified as state and not local taxes. Commonwealth by Board v. Louisville Nat. Bank, 220 Ky. 89, 294 S.W. 815. Members of county boards of education are state and not municipal officers. Middleton v. Middleton, 239 Ky. 759, 40 S.W.2d 311. Local school boards fulfill a governmental function of state government by providing public education within a particular geographical area. Board of Education of Louisville v. Society of Alumni of L.M.H.S., Ky., 239 S.W.2d 931.'

We pointed out in Board of Education of Louisville v. Board of Education of Jefferson County, Ky., 458 S.W.2d 6 (1970), that '* * * a school district is * * * an agency of the state subject to the will of the legislature and existing for one public purpose only--to locally administer the common schools within a particular area subject to the paramount interest of the state.' We held that the tax there being considered '* * * is used only for school purposes * * * is of statewide concern (and) * * * is one the county is authorized...