Mountain States Tel. and Tel. Co. v. Garfield County, 880435

• Decision Date: 01 May 1991
• Docket Number: No. 880435,880435
• Citation: 811 P.2d 184
• Parties: MOUNTAIN STATES TELEPHONE AND TELEGRAPH CO., Plaintiff and Appellant, v. GARFIELD COUNTY; The Garfield County Board of County Commissioners; Thomas Hatch, Sherrell Ott and Louis Liston, County Commissioners; Judy Henrie, County Treasurer; Tom Simkins, County Assessor; The Utah State Tax Commission; R.H. "Hal" Hansen, Roger O. Tew, G. Blaine Davis and Joe B. Pacheco, Utah State Tax Commissioners; Tom L. Allen, Utah State Auditor; Edward T. Alter, Utah State Treasurer, Defendants and Appellees.
• Court: Utah Supreme Court

Page 184

811 P.2d 184

MOUNTAIN STATES TELEPHONE AND TELEGRAPH CO., Plaintiff and Appellant, v. GARFIELD COUNTY; The Garfield County Board of County Commissioners; Thomas Hatch, Sherrell Ott and Louis Liston County Commissioners; Judy Henrie, County Treasurer; Tom Simkins, County Assessor; The Utah State Tax Commission R.H. "Hal" Hansen, Roger O. Tew, G. Blaine Davis and Joe B Pacheco, Utah State Tax Commissioners; Tom L. Allen, Utah State Auditor; Edward T. Alter, Utah State Treasurer Defendants and Appellees.

No. 880435.

Supreme Court of Utah.

May 1, 1991.

Mark K. Buchi, Lee R. Curtis, Jr., Richard G. Wilkins, Richie D. Haddock, Salt Lake City, for plaintiff and appellant.

Patrick Nolan, Panguitch, County atty., Bill Thomas Peters and Karl Hendrickson, Salt Lake City, for Garfield County.

R. Paul Van Dam, Ralph Finlayson, Salt Lake City, for State Tax Com'n, State Auditor, and State Treasurer.

HOWE, Associate Chief Justice:

This is an appeal by plaintiff Mountain States Telephone and Telegraph Company from a decision and summary judgment upholding the constitutionality of Utah Code Ann. § 17-19-15 (Supp.1987), which requires the imposition of a statewide uniform levy upon real property to fund local property tax assessment, collection, and distribution costs. ¹

I. FACTS

Prior to the adoption of the statute in 1986, each county funded its own costs incurred in the imposition and collection of ad valorem property taxes. Each county included the projected amount of such costs in its annual budget and set its levy at a level sufficient to generate revenues to cover all budgeted county costs. The state participated in neither the process of establishing a budget for county assessment and collection costs nor the levying of taxes to fund these costs; these responsibilities were left totally to the counties.

Under the statute, the governing body of each county determines the county's cost of "assessment, collection, and distribution of property taxes and related appraisal programs." § 17-19-15(1). That cost determination is submitted to the state auditor, who is required to establish "categories of allowable costs" for tax collection budgets throughout the state. The auditor reviews each county budget as it is submitted and certifies that it complies "with approved categories" of cost. § 17-19-15(2).

Following certification and review by the state auditor, all approved county budgets are "transmitted to the State Tax Commission for determination of a mandatory statewide tax rate sufficient to meet those expenditures," provided the tax rate does not exceed a maximum of .0005 of assessed valuation. § 17-19-15(3), (4). This statewide tax rate is included on tax notices in each county as "a separately listed and identified local levy." § 17-19-15(3) (emphasis added). It is questionable whether the counties have any discretion to alter or reject the levy certified to them by the state tax commission or whether the state auditor has the power to disapprove a figure and require it to be revised.

Any revenue collected by a county under the local levy in excess of its approved budget does not remain with that county. Rather, the money is "transmitted to the state treasurer" and is redistributed to counties having tax collection budget shortfalls "in accordance with the certified [tax collection] budgets." § 17-19-15(6).

Pursuant to the statute, defendants Garfield County and its officers levied a separate tax of $2,692.21 on Mountain States' 1987 property tax notice. Mountain States paid the tax under protest and then filed this action for declaratory relief and recovery of the taxes. County defendants moved for summary judgment. Mountain States opposed the county's motion and filed its own cross-motion for summary judgment on its facial challenges to the Act. Further, it requested the trial court to postpone ruling on the county's motion until completion of requested discovery pursuant to rule 56(f), Utah Rules of Civil Procedure.

Mountain States contended that article XIII, section 5 of the Utah Constitution had been violated. That section provides:

The Legislature shall not impose taxes for the purpose of any county, city, town or other municipal corporation, but may, by law, vest in the corporate authorities thereof, respectively, the power to assess and collect taxes for all purposes of such corporation. Notwithstanding anything to the contrary contained in this Constitution, political subdivisions may share their tax and other revenues with other political subdivisions as provided by statute. ²

Mountain States argued that the statute impermissibly imposed a tax for county purposes in violation of the first sentence of section 5 and mandated horizontal revenue sharing, which the second sentence prohibits. It also requested the trial court to postpone ruling on the county's motion until completion of requested discovery.

The court granted summary judgment in favor of Garfield County. It found that the "funding mechanism" established by the statute "address[es] a matter of state-wide concern ... including the accurate, equitable and fair assessment of locally assessed residential, commercial and industrial properties, and the effective, efficient collection of ad valorem property tax revenues." The court held that equalized and efficient property tax assessment and collection was a statewide purpose. It also addressed the revenue sharing aspects of Mountain States' article XIII, section 5 challenge by concluding summarily that the revenue sharing aspects of the statute were valid under this court's rulings in Tribe v. Salt Lake City Corp., 540 P.2d 499 (Utah 1975), and Salt Lake County v. Murray City Redevelopment, 598 P.2d 1339 (Utah 1979). The court further held that Garfield County had consented to the revenue sharing aspects of the statute by adopting its assessment and collection budget. With respect to Mountain States' fourth through eighth claims for relief, which raised due process, equal protection, and the taking of private property arguments, the court concluded that because the local levy is a "tax" and not a "fee," each of those causes of action "[is] inappropriate and accordingly must be dismissed." A catch-all ruling was made that the act "is constitutional in all respects." The court ordered Mountain States' complaint dismissed with prejudice.

Mountain States appeals, assailing section 17-19-15 on several constitutional grounds. It also contends that summary judgment was improper because its discovery was incomplete and that further discovery was needed to develop its objections to the statute. We shall separately consider these assignments of error.

II. STANDARD OF REVIEW

We apply a presumption of validity to legislative enactments when attacked on constitutional grounds. City of West Jordan v. Utah State Retirement Bd., 767 P.2d 530, 532 (Utah 1988). The burden is on the petitioner to demonstrate the unconstitutionality of the statute. Amax Magnesium Corp. v. Utah State Tax Comm'n, 796 P.2d 1256 (Utah 1990); Rio Algom Corp. v. San Juan County, 681 P.2d 184, 191 (Utah 1984); Lehi City v. Meiling, 87 Utah 237, 48 P.2d 530, 535 (1935). Further, this court will construe a statute to be constitutional where such construction is reasonable:

[W]e must be mindful of the rule that an act of the Legislature will not be declared unconstitutional if it can reasonably be construed to be constitutional. Where the language of a statute is equally susceptible to two constructions, one rendering it valid and the other invalid, the court must adopt the one which renders the statute valid.

Best Foods, Inc. v. Christensen, 75 Utah 392, 285 P. 1001, 1004 (1930) (citations omitted).

III. STATE v. LOCAL PURPOSE

We have long recognized that the purpose of the first sentence of article XIII, section 5 was to ensure the right of the people of Utah to local self-government. "It was to preserve local self-government free from needless legislative interference that the power to levy taxes for local purposes was by the state constitution vested exclusively in the proper authority of counties, cities, towns, and other municipal corporations." Best Foods, 285 P. at 1003. Section 5 has been said to complement other sections of our constitution which provide for the establishment of a system of uniform county governments, article XI, section 4; which recognize the existence of the several counties as legal subdivisions of the state, article XI, section 1; which prohibit the legislature from changing county lines without a vote of the electors of the counties involved, article XI, section 3; and which prohibit the state from assuming the debt of any county, article XIV, section 6. State ex rel. Wright v. Standford, 24 Utah 148, 66 P. 1061 (1901). We observed in Wright:

An examination into its early history will show the existence of a system of territorial subdivisions of the state into counties when the present constitution was adopted. At this early date the system of local self-government existed under the general laws of the territory, and there is no provision in the constitution which can be construed as impairing that right.... The constitution was doubtless framed and adopted with the purpose to protect the local self-governments which had existed of a practically uniform character from the early settlement of the country, since which they have remained undisturbed, the continued existence of which is therein assumed, and from which the liberty of the people spring and depend.

66 P. at 1062.

On another occasion, this court remarked that section 5 indicates "an intention to have local business transacted and local affairs managed and controlled by local authorities." State ex rel. Salt Lake City v. Eldredge, 27 Utah 477, 76 P. 337, 340 (1904).

In the first decade of our statehood, this court on two occasions found that acts of the legislature contravened section 5. In State ex rel. Wright v....