Pascagoula Sch. Dist. v. Tucker

• Decision Date: 19 July 2012
• Docket Number: No. 2010–CA–00955–SCT.,2010–CA–00955–SCT.
• Parties: PASCAGOULA SCHOOL DISTRICT, City of Pascagoula, Mississippi, Daniel J. Marks, Sr., Individually and as a Taxpayer of the PSD, and Katherine Laird Mitchell, A Minor, by and Through her Father and Natural Guardian, Randall L. Mitchell v. Joe TUCKER, Tax Collector, Jackson County, Mississippi, Benny Goff, Tax Assessor, Jackson County Mississippi, The Board of Supervisors of Jackson County, Mississippi, and the State of Mississippi, and Defendants–Intervenors Jackson County School District, Moss Point School District and Ocean Springs School District.
• Court: Mississippi Supreme Court

91 So.3d 598

282 Ed. Law Rep. 733

PASCAGOULA SCHOOL DISTRICT, City of Pascagoula, Mississippi, Daniel J. Marks, Sr., Individually and as a Taxpayer of the PSD, and Katherine Laird Mitchell, A Minor, by and Through her Father and Natural Guardian, Randall L. Mitchell

v.Joe TUCKER, Tax Collector, Jackson County, Mississippi, Benny Goff, Tax Assessor, Jackson County Mississippi, The Board of Supervisors of Jackson County, Mississippi, and the State of Mississippi, and Defendants–Intervenors Jackson County School District, Moss Point School District and Ocean Springs School District.

No. 2010–CA–00955–SCT.

Supreme Court of Mississippi.

April 12, 2012.

Rehearing Denied July 19, 2012.

Held Unconstitutional

Section 19–9–171Luther T. Munford, Fred L. Banks, Jr., R. Gregg Mayer, A. Kelly Sessoms, III, James L. Robertson, Eddie C. Williams, for appellants.

James H. Heidelberg, Jessica M. Dupont, Office of Attorney General By Harold E. Pizzetta, III, T. Hunt Cole, Jr., Caroline M. Upchurch, Jack C. Pickett, Henry P. Pate, III, Alwyn H. Luckey, for appellees.

EN BANC.

LAMAR, Justice, for the Court:

¶ 1. The Mississippi Legislature passed a law mandating that the revenue the Pascagoula School District (“PSD”) collected from ad valorem taxes levied on liquified natural gas terminals and crude oil refineries be distributed to all school districts in the county where the terminals and refineries are located. The Pascagoula School District—which contains a Chevron crude oil refinery and a Gulf liquified natural gas terminal—brought suit, seeking a declaration that the new law was unconstitutional and requesting injunctive relief. All parties filed for summary judgment. After a hearing, the trial judge ruled that the law was constitutional, and the plaintiffs appeal that decision. Because we find the contested statute violates the constitutional mandate that a school district's taxes be used to maintain “its schools,” we reverse and remand for proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶ 2. Jackson County has four school districts-the Jackson County School District (which educates about 37% of the county's total students), the PSD (28.5%), the Ocean Springs School District (22%), and the Moss Point School District (12.5%). The PSD's method ¹ for collecting and distributing ad valorem tax revenue to its schools is based on statutory law and an “interlocal agreement” ² and includes the following steps:

1. The County assesses the value of “all of the taxable property” within the school district.

2. The school district sets its budget for the coming school year. SeeMiss Code Ann. § 37–57–104(1) (Rev. 2007).

3. The City of Pascagoula, as the levying authority for the PSD, divides the budget by the value of “all of the taxable property” to yield a millage rate which, when applied to the assessed value, yields an amount “equal to the dollar amount” requested by the school district. SeeMiss.Code Ann. §§ 37–57–1 and 37–57–104(1) (Rev. 2007).

4. The County uses the millage rate to levy school taxes, collects them, and forwards the school tax money to the City for deposit into the “district maintenance fund of the school district.” SeeMiss.Code Ann. § 37–57–1 (Rev. 2007).

The PSD's ad valorem tax base includes both a Chevron crude oil refinery and a Gulf liquified natural gas terminal.³

¶ 3. In 2007, the Mississippi Legislature passed Senate Bill 2403. Section 2 of SB 2403 was later codified as Mississippi Code Section 19–9–171, and states:

The revenue from ad valorem taxes for school district purposes that are levied upon liquefied natural gas terminals or improvements thereto constructed after July 1, 2007, crude oil refineries constructed after July 1, 2007, and expansions or improvements to existing crude oil refineries constructed after July 1, 2007, shall be distributed to all public school districts in the county in which the facilities are located in the proportion that the average daily attendance of each school district bears to the total average daily attendance of all school districts in the county. The county or municipal tax collector, as the case may be, shall pay such tax collections, except for taxes collected for the payment of the principal of and interest on school bonds or notes and except for taxes collected to defray collection costs, into the appropriate school depository and report to the school board of the appropriate school district at the same time and in the same manner as the tax collector makes his payments and reports of other taxes collected by him.

Miss.Code Ann. § 19–9–171 (Supp.2011) (emphasis added). Concerned that it would lose a portion of the ad valorem tax revenue generated by the tax levy, the PSD, along with the City of Pascagoula, Daniel Marks (an individual taxpayer within the district) and Katherine Mitchell (a minor who attended school in the district) filed a Petition for Declaratory Judgment and Injunctive Relief in the Jackson County Chancery Court. The plaintiffs named as defendants Joe Tucker (Jackson County Tax Collector), Benny Goff (Jackson County Tax Assessor), the Board of Supervisors of Jackson County and the State of Mississippi.⁴

¶ 4. The plaintiffs asserted that Section 19–9–171 violates Article 4, Section 112 of the Mississippi Constitution,⁵ because it prohibits the PSD from receiving the full ad valorem tax revenue amount from the oil refinery and the gas terminal, thereby “denying [the PSD] the right to levy” on that property in the same way as it would on all other property in the district. The plaintiffs also asserted that Section 19–9–171 was invalid because it directly conflicts with Sections 37–57–1(2)⁶ and 37–57–105(1), ⁷ which state that the county tax collector is to deposit all school taxes into the district's maintenance and depository funds.⁸ The plaintiffs requested a declaration that Section 19–9–171 is unconstitutional and a permanent injunction prohibiting the defendants from “enforcing, assessing, levying and re-distributing any future ad valorem taxes levied by or on behalf of the [PSD] to other school districts....”

¶ 5. After all named defendants filed their answers, the other three Jackson County school districts filed a motion to intervene as defendants, which the special chancellor granted.⁹ After some discovery, the Jackson County Board of Supervisors, along with Goff and Tucker, jointly filed a motion for summary judgment, which the intervening school districts joined. The intervening school districts, the State of Mississippi, and the plaintiffs also filed motions for summary judgment. After responses were filed, the chancellor held a hearing on the motions. After hearing arguments from all parties, the chancellor found that the plaintiffs had not proven beyond a reasonable doubt that Section 19–9–171 is unconstitutional. He subsequently issued an order denying the plaintiffs' motion for summary judgment and granting all of the defendants' motions for summary judgment.

¶ 6. The plaintiffs filed a notice of appeal. A couple of months later, the plaintiffs filed a motion to stay in the chancery court, arguing for the first time that Section 19–9–171 violates Article 8, Section 206 ¹⁰ of the Mississippi Constitution. The plaintiffs sought an order directing the Jackson County Tax Collector to distribute the disputed funds ¹¹ to the City of Pascagoula, to be kept in a separate, interest-bearing account. After the chancellor denied their motion to stay, the plaintiffs filed a motion to reconsider, which the chancellor also denied. The plaintiffs then filed a motion to stay with their initial brief to this Court, which this Court also denied.

¶ 7. On appeal, the plaintiffs argue that Section 19–9–171 violates Article 8, Section 206 and Article 4, Section 112 of the Mississippi Constitution. Specifically, the plaintiffs ask:

1. When Section 206 of the Mississippi Constitution says the purpose of a local school district tax is to maintain “its schools,” can the Legislature force a district to divide its maintenance tax levy with other districts?

2. When Section 112 of the Mississippi Constitution says a taxing authority shall not be denied the right to levy an ad valorem tax on “all property” in the same manner, can the Legislature force a city to exclude $46.8 million in property value from its tax base when it calculates the school maintenance levy so that [that] value can be taxed for the benefit of other districts? ¹²

Because we find that Section 19–9–171 violates Article 8, Section 206, we decline to address whether it also violates Article 4, Section 112.

ANALYSIS

¶ 8. This Court conducts a de novo review when deciding whether the trial court properly granted a motion for summary judgment. Conrod v. Holder, 825 So.2d 16, 18 (Miss.2002). Likewise, this Court applies de novo review to questions of law, including the constitutionality of a statute. Wells by Wells v. Panola County Bd. of Educ., 645 So.2d 883, 888 (Miss.1994).

¶ 9. A party seeking to have a statute declared unconstitutional in Mississippi has a heavy burden: he must prove that the statute is unconstitutional “beyond a reasonable doubt.” Cities of Oxford, Carthage, Louisville, Starkville, & Tupelo v. Northeast Mississippi Elec. Power Ass'n, 704 So.2d 59, 65 (Miss.1997). “ ‘In determining whether an act of the Legislature violates the Constitution, the courts are without the right to substitute their judgment for that of the Legislature as to the wisdom and policy of the act and must enforce it, unless it appears beyond all reasonable doubt to violate the Constitution.’ ” State v. Bd. of Levee Comm'rs, 932 So.2d 12, 19 (Miss.2006) (citations omitted). “[T]o state that there is doubt regarding the constitutionality of an act is to essentially declare it constitutionally valid.” Moore v. Bd. of Supervisors of Hinds County, 658 So.2d 883, 887 (Miss.1995). “Nonetheless, ‘no citation of authority is needed for the universally accepted principle that if...