State ex rel. Angel Fire Home and Land Owners Ass'n, Inc. v. South Cent. Colfax County Special Hosp. Dist.
| Decision Date | 21 June 1990 |
| Docket Number | No. 10945,10945 |
| Citation | 1990 NMCA 72,797 P.2d 285,110 N.M. 496 |
| Parties | STATE of New Mexico, ex rel. ANGEL FIRE HOME AND LAND OWNERS ASSOCIATION, INC., a New Mexico Not-for-Profit Corporation; Herbert B. Steves and Jose C. Torres, Real Parties in Interest, Petitioners-Appellees, v. SOUTH CENTRAL COLFAX COUNTY SPECIAL HOSPITAL DISTRICT, a New Mexico Special Hospital District, et al., Respondents-Appellants, and Nor-Lea Hospital District, Intervenor-Appellant. |
| Court | Court of Appeals of New Mexico |
The South Central Colfax County Special Hospital District (the "hospital district") and other appellants seek reversal of the district court's ruling that the New Mexico Special Hospital District Act, NMSA 1978, Sections 4-48A-1 to -18 (Repl.Pamp.1984 & Cum.Supp.1989) (the "SHDA") is unconstitutional. The district court held that the SHDA unconstitutionally delegates legislative powers to private persons. In seeking to uphold the district court's decision, the Angel Fire Home and Land Owners Association, Inc. and other appellees (the "Land Owners") contend that the SHDA is unconstitutional on its face because (1) it does not appropriately limit the discretion of private persons to determine the boundaries of special hospital districts, thereby impermissibly delegating the legislative power of the state; (2) it allows private persons arbitrarily to include property in a special hospital district even though the property and its inhabitants will not be benefited by inclusion; (3) it does not require district boundaries to be rationally related to creation of a reasonable special hospital district; and (4) it contains no mechanism by which a property owner whose property is not benefited by inclusion within the special hospital district can request an independent tribunal to remove the land from the proposed special hospital district. We reverse.
The SHDA authorizes creation of special hospital districts for "constructing, acquiring, operating and maintaining one or more public hospital facilities for the benefit of the inhabitants of the district." Sec. 4-48A-3(A). If the district is composed of portions of more than one county, the portion in each county is called a "subdistrict." Sec. 4-48A-2(E). When a petition for creation of a district is signed by enough registered voters in each subdistrict (ten percent of the votes cast for governor in the subdistrict at the last general election, Sec. 4-48A-4(B)), the issue is submitted to a vote of the registered voters residing in the proposed district. Sec. 4-48A-5. The district must be approved by a majority vote in each subdistrict. Sec. 4-48A-5(F). The governing body of the district is a board of trustees consisting of at least five members--one elected by each subdistrict and the remainder elected at large. Sec. 4-48A-6. To supplement income from hospital facilities, the district may raise money through assessment of ad valorem taxes to finance general obligation bonds, Sec. 4-48A-14, or to pay for the operation and maintenance of hospitals and the operational costs of the district. Sec. 4-48A-16. General obligation bonds (which are for such purposes as the purchase, construction or renovation of a hospital facility, Sec. 4-48A-12) may be issued only after approval in a district-wide election. Sec. 4-48A-12. Ad valorem taxes for operational and maintenance expenses can be imposed only with the approval of the voters in each subdistrict within the district. Sec. 4-48A-16.
The territorial area to be included in the district must be designated in the petition seeking creation of the district. Sec. 4-48A-4(A). The boundaries must satisfy the requirements of Section 4-48A-2(C), which reads:
"[S]pecial hospital district" means a district wherein a public hospital is located or is proposed to be created, and which:
(1) is composed of contiguous and compact territory lying wholly within a single county; or
(2) is composed of contiguous and compact territory which includes all or a portion of two or more counties or any combination thereof; and
(3) contains within its boundaries one or more incorporated municipalities; or whose boundaries coincide and are concurrent with the territorial areas of one or more political subdivisions within such county or counties[.]
A special hospital district cannot include territory already included within another special hospital district. Sec. 4-48A-3(B).
The core of the Land Owners' arguments is that the SHDA does not preclude proponents of a special hospital district from drawing the boundaries of a district so as to impose a substantial portion of the tax burden upon areas that do not materially benefit from the district. They cite their own situation as an example of such impropriety. The area of the hospital district coincides with the area of three contiguous school districts within Colfax County. The Land Owners assert that the Moreno Valley (where the Land Owners reside) contains only one-fourth of the electorate but one-half of the property tax base for the hospital district. They contend that the Moreno Valley will not benefit from the district, because the only hospital presently within the boundaries of the district is significantly farther away from the valley than the hospital in Taos, which is thirty miles from Angel Fire, within an adjacent county. Thus, in their view, they will not receive any benefit from the district but were included within the district only because its proponents, who reside in other portions of the district, wanted the Moreno Valley residents to pay half the costs of the district.
The Land Owners' various arguments can be placed in proper perspective by first addressing their second argument--that the SHDA allows private persons arbitrarily to include property in a special hospital district even though the property and its inhabitants will not be benefited by inclusion.
This contention finds some support in Myles Salt Co. v. Board of Commissioners of the Iberia & St. Mary Drainage District, 239 U.S. 478, 36 S.Ct. 204, 60 L.Ed. 392 (1916). The salt company had alleged in its pleading that its land had been included within a drainage district "[s]olely with the view of deriving revenues from the assessment of [the land] * * * and only for the benefit of the other properties and not upon the theory that a general scheme of drainage would inure to the benefit of all of the property therein, even indirectly * * *." Id. at 482, 36 S.Ct. at 205. The company further alleged that the district's drainage scheme was not intended to confer any benefit on the company's land and that the scheme could not possibly confer any benefit. The Supreme Court stated that a "drainage district has the special purpose of the improvement of particular property." Id. at 485, 36 S.Ct. at 206. Therefore, to include the company's property solely to pay for benefits to other property, when the company's property cannot be benefited, even indirectly, constitutes a deprivation of property without due process of law.
Myles Salt, however, presents a rare, if not unique, factual situation. Because the company's suit had been dismissed for failure to state a cause of action, the Court had to accept the assertion that the company could not possibly benefit from the special district. Proof of such a claim would ordinarily be extremely difficult. Thus it is not surprising that F. Michelman & T. Sandalow, Materials on Government in Urban Areas: Cases--Comments--Questions Ch. 3, at 524 (1970). Accord Furey v. City of Sacramento, 780 F.2d 1448, 1454 n. 5 (9th Cir.1986) ().
Rather than expanding upon Myles Salt, courts have been more impressed with the sentiment expressed in Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 522-23, 57 S.Ct. 868, 878-79, 81 L.Ed. 1245 (1937) (), in which the United States Supreme Court wrote:
A tax is not an assessment of benefits. * * * The only benefit to which the tax payer is constitutionally entitled is that derived from his enjoyment of the privileges of living in an organized society, established and safeguarded by the devotion of taxes to public purposes. Any other view would preclude the levying of taxes except as they are used to compensate for the burden on those who pay them, and would involve the abandonment of the most fundamental principle of government--that it exists primarily to provide for the common good. A corporation cannot object to the use of the taxes which it pays for the maintenance of schools because it has no children. This Court has repudiated the suggestion, whenever made, that the Constitution requires the benefits derived from the expenditure of public moneys to be apportioned to the burdens of the taxpayer, or that he can resist the payment of the tax because it is not expended for purposes which are peculiarly beneficial to him. [Citations & footnote omitted.]
Accord Gomillion v. Lightfoot, 364 U.S. 339, 343, 81 S.Ct. 125, 128, 5 L.Ed.2d 110 (1960) (). New Mexico has followed this reasoning in Lung v. O'Chesky, 94 N.M. 802, 617 P.2d 1317 (1980) (...
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