Magee v. Boyd

• Decision Date: 02 March 2015
• Docket Number: 1131020,1131021,1130987
• Parties: Julie P. Magee and Thomas L. White, Jr., in their official capacities as Commissioner of Revenue and Comptroller of the State of Alabama, respectively v. Daniel Boyd et al. Rachell Prince et al. v. Daniel Boyd et al. Tequila Rogers et al. v. Daniel Boyd et al.
• Court: Alabama Supreme Court

Julie P. Magee and Thomas L. White, Jr.,

in their official capacities as Commissioner of

Revenue and Comptroller of the State of Alabama, respectively v. Daniel Boyd et al.

Rachell Prince et al. v. Daniel Boyd et al.

Tequila Rogers et al. v. Daniel Boyd et al.

1130987

1131020

1131021

SUPREME COURT OF ALABAMA

OCTOBER TERM, 2014-2015

March 2, 2015

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

Appeals from Montgomery Circuit Court

(CV-13-901470)

BOLIN, Justice.

The three appeals in this case involve issues of first impression regarding the Alabama Accountability Act (hereinafter "the AAA"), codified at § 16-6D-1 et seq., Ala. Code 1975.

Facts

The Alabama House of Representatives approved House Bill 84 ("HB 84"), a bill relating to education, and the bill, then known as the "Local Control School Flexibility Act of 2013," was sent to the Senate, where the Education Committee gave it a favorable report. (A copy of HB 84 is attached to this opinion as appendix A.) At that time, HB 84 authorized the establishment of innovative schools and school systems by allowing the State Board of Education ("the State BOE") toenter into a "flexibility" contract with the school or school system that would allow for program flexibility and/or budgetary flexibility within the school or school system. The purpose of the flexibility contracts was to "advance the benefits of local school and school systems autonomy in innovation and creativity," HB 84, Section 2(b), by exempting the schools from certain state laws, including State BOE rules, regulations, and policies, in exchange for academic and associated goals for students that improve academic outcomes and close a deficient achievement gap. HB 84 would require a local school to submit a proposed innovation plan that had been recommended by the local superintendent of education and approved by the local board of education to the State Superintendent of Education in order to qualify for "innovation" status. HB 84 authorized the State BOE to promulgate any necessary rules and regulations for implementation.

On February 28, 2013, during the third reading of HB 84 on the floor of the Senate, an amendment, which made minor changes, was proposed and approved, and HB 84 was passed by the Senate. The amended version of HB 84 was then sent to theHouse, but the House voted to "nonconcur," and HB 84 was sent to a conference committee of representatives and senators.

Notice was issued announcing that the conference committee would meet at 3:15 p.m. The meeting was called to order, but was immediately recessed to reconvene at 4:15 p.m. However, the meeting did not reconvene until 5:00 p.m., at which time a "substitute" version was distributed. The substitute version was 21 pages longer than the original; the name had been changed to the "Alabama Accountability Act of 2013"; and multiple new provisions had been added, including two provisions allowing for tax-credit programs. (A copy of the substitute version of HB 84 is attached to this opinion as Appendix B.) Specifically, Section 8 of HB 84 provided for a tax credit for parents of students who are zoned for a "failing school" and who choose to send their children to a nonpublic school or a nonfailing public school. The tax credits were to be paid out of the Education Trust Fund ("the ETF").¹ Section 9 provided for a tax credit that could beclaimed by individuals or corporations who make contributions to "scholarship-granting organizations" for educational scholarships for students who would otherwise be attending a failing school so that the student could attend a nonpublic or nonfailing public school.

A majority of the conference committee voted in favor of the substitute version of HB 84. Subsequently, HB 84, as substituted, was sent to the House and the Senate for approval. The House and the Senate adopted the substitute version of HB 84 on February 28, 2013, the same day the substitute version was introduced. On March 14, 2013, the governor signed HB 84. On May 20, 2013, the legislature passed House Bill 658 ("HB 658"), which amended portions of the AAA. (A copy of HB 658 is attached to this opinion as Appendix C.) The amendments set out in HB 658 prohibited a public or nonpublic school from being required to enroll aparticular student. The amendments also opened the scholarship program to low-income students, even if those students did not attend or were not zoned to attend a failing school. Although the amendments in HB 658 allowed low-income students in nonfailing schools to apply for scholarships, low-income students in failing schools or zoned for failing schools were given priority for the scholarships.

On April 8, 2014, the legislature passed Act No. 2014-346, its annual recodification bill, which adopts and incorporates into the Code of Alabama 1975 those general and permanent laws of the State enacted during the 2013 Regular Session as contained in the 2013 Cumulative Supplement to certain volumes of the Code and additions or deletions made by the Code commissioner for editorial purposes. (A copy of Act No. 2014-346 is attached to this opinion as Appendix D.) The AAA is now set out in § 16-6D-1 et seq.

Procedural History

On August 26, 2013, Daniel Boyd, Anita Gibson, and Senator Quinton Ross, Jr. (hereinafter collectively referred toas "the plaintiffs"),² sued Julie P. Magee, in her official capacity as the Commissioner of Revenue, and Thomas L. White, Jr., in his official capacity as Comptroller of the State of Alabama (hereinafter collectively referred to as "the State defendants"). The plaintiffs challenged the constitutionality of the AAA under certain provisions of the Alabama Constitution of 1901 as follows:

Count I alleged that the substitute version of HB 84, which added the tax-credit programs to pay for the education of Alabama schoolchildren in nonpublic schools, altered the original purpose of HB 84, in violation of Art. IV, § 61 ("[N]o bill shall be so altered or amended on its passage through either house as to change its original purpose.");

Count II alleged that, because the original version of HB 84 differed substantially in form and substance from the substitute version of HB 84, the substitute version had not been read on three days in each house, in violation of Art. IV, § 63 ("Every bill shall be read on three different days in each house ....");

Counts III-V alleged that the AAA contained two separate and distinct subjects in that Sections 5-7 authorized flexibility contracts with the State BOE and Sections 8 and 9 created a tax-credit program to pay for the education of Alabama schoolchildren in

nonpublic schools, Section 8 repealed an earmark on funds dedicated to the ETF while also making a new appropriation of those funds to pay for tax credits, and Section 9 repealed an earmark on funds dedicated to the ETF while also making a new appropriation of those funds to pay for tax credits for donations to scholarship- granting organizations, all in violation of Art. IV, §§ 45 and 71 (§ 45 -- "Each law shall contain but one subject, which shall be clearly expressed in its title, except general appropriation bills, general revenue bills, and bills adopting a code, digest, or revision of statutes..."; § 71 all appropriations other than those contained in the general appropriation bill "shall be made by separate bills, each embracing but one subject.");

Count VI alleged that the AAA appropriated funds from the ETF to finance tax-credit programs that reimburse tuition and fees to nonpublic schools not under the absolute control of the State, in violation of Art. IV, § 73 ("No appropriation shall be made to any charitable or educational institution not under the absolute control of the state, other than normal schools established by law for the professional training of teachers for the public schools of the state, except by a vote of two-thirds of all the members elected to each house.");

Count VII alleged that Section 9 of the AAA provides a 100% tax credit to be funded by revenue that would otherwise be deposited in the ETF, in violation of Art. XI, § 211.02 (Off. Recomp.)(income taxes shall be earmarked for placement in the ETF and are "to be used for the payment of public school teachers' salaries only");

Count VIII alleged that the AAA created a new debt in that the AAA pledges funds from existing revenue streams to pay taxpayers in the form of refunds, rebates, or tax credits in violation of Art. XI, § 213, ("Any act creating or incurring any new debtagainst the state, except as herein provided for, shall be absolutely void.");

Count IX alleged that the AAA diverts money from the ETF that is raised for the support of public schools and appropriates and uses that money to support sectarian and denominational schools, in violation of Art. XIV, § 263 ("No money raised for the support of the public schools shall be appropriated to or used for the support of any sectarian or denominational school."); and

Count X alleged that the AAA diverts taxpayer funds to religious schools through tax credits that pay for some of or all the cost of attending such schools, which are places of worship and ministries of the churches or other religious organizations that own, operate, sponsor, or control them, in violation of Art. I, § 3 ("[N]o one shall be compelled by law to attend any place of worship; nor to pay any tithes, taxes, or other rate for building or repairing any place of worship, or for maintaining any minister or ministry ....").

On October 9, 2013, the State defendants filed a motion to dismiss the case for failure to state a claim upon which relief could be granted, pursuant to Rule 12(b)...