State Tax Commission v. Preece

Decision Date03 February 1954
Docket NumberNo. 8138,8138
Citation1 Utah 2d 337,266 P.2d 757
CourtUtah Supreme Court

C. Preston Allen, Salt Lake City, John R. Rampton, Jr., Bountiful, Adam M. Duncan, Salt Lake City, for plaintiff.

E. Richard Callister, Jr., Atty. Gen., Ken Chamberlain and H. R. Waldo, Jr., Salt Lake City, for defendant.

CROCKETT, Justice.

We are asked to determine the constitutionality of a statute enacted by the 1953 Special Session of the Utah Legislature which raised the excise tax on cigarettes from 2cents to 4cents per pack and allocated the revenue derived therefrom to the Uniform School Fund. 1

Pursuant to its duty of collecting such taxes, the Tax Commission requisitioned necessary stamps. The defendant, Sherman J. Preece, State Auditor, upon the advice of the Attorney General, wilfully refused to comply with the requisition. He contends that the act referred to was not within the purview of the agenda of the Special Session as presented by the Governor. This action was brought to compel the Auditor to comply with the plaintiff's request.

It is not open to question that unless such act was included within the subject matter presented to the Special Session by the Governor it would be invalid. 2 In support of his position that although the Governor recommended the adoption of a school financing program which would entail increased costs, that this neither expressly nor by necessary implication embraced the imposition of a tax on cigarettes, the Attorney General makes two contentions: First, that other means of meeting such costs were available without the imposition of any new taxes by the State; and second, that any increased taxes resulting from the new financing program would be a property tax.

The parties hereto cite authorities representing widely divergent views: From the extreme on the one hand, that the subject matter must be restricted very narrowly within the confines of the Governor's words; to the opposite, that anything reasonably incidental to, or even apparently within the scope of the subject would be within the Governor's call. Exemplary of the first class of cases, which are relied on by the defendant, are: Smith v. Curran, 3 which held unconstitutional an act validating bonds not covered by sufficient popular vote, which had been enacted by a special session called by a message which included 'validation of bonds issued by a municipality under sufficient popular vote'. The Michigan Court, in the above case, said: 'While the Governor, within the range of a 'subject,' may not restrict the Legislature, he has the authority to limit the subject according to his conception of the need for legislation.' In State ex rel. National Conservation Exposition Co. v. Woollen 4 the Governor's call stated '* * * appropriations of the public monies as may be deemed necessary and proper to maintain the state's institutions, offices and departments.' The court struck down a legislative appropriation to a corporation for the purpose of presenting an exposition, on the grounds that the corporation was not a State Department or office and therefore not within the subject matter before the Special Session, the court observing: 'The Governor has power, under the Constitution, to limit the subjects which they may consider, and in order to do this he may define the subject so as to make it broad or narrow, according to his conception of his public duty.'

Another case of similar import which defendants point to as controlling in principle, is Sims v. Weldon, 5 wherein the basic facts, except the substance of the Governor's call, further detail of which will hereinafter be given, are very similar to those of our case. The Governor's proclamation made reference to the fact that 'the financial distress of the public schools of the state has compelled me to convene you * * *.' and expressly directed attention to income taxes and a severance tax. A tax imposed upon cigarettes and cigars was held not within the call.

Doubt is cast upon the soundness of the ruling in the Sims case just referred to by reason of the fact that the same jurisdiction in the later case of McCarroll v. Clyde Collins Liquors 6 went about as far to the opposite extreme of giving a liberal interpretation to the language of the message as any we have found. However, it should be noted that the call there referred to no specific tax, it simply stated the purpose of providing 'additional facilities for tubercular patients * * * and to provide funds therefor'; an act levying excise taxes on liquor was upheld as within the call, under the broad rule that 'the General Assembly may consider not only the legislation specifically mentioned * * * but such other legislation as may necessarily or incidentally arise out of that call * * *.'

The rule just stated is urged by plaintiff in support of their argument that the Gevernor opened up the subject of school finance and methods of raising funds which includes taxation. Other cases cited by them are: Baldwin v. State: 7 The purpose stated was to reduce taxes, but instead the Legislature increased taxes; the act was upheld as within the purpose; Commonwealth ex rel. Schnader v. Liveright: 8 The message specified the enactment of unemployment relief, a bill granting relief to the poor was upheld as not outside the proclamation; and Timmer v. Talbot 9 in which the call related to rectifying difficulties encountered by Federal Loan Agencies in financing installment mortgages on livestock and produce which the Legislature used as a basis of a bill covering all mortgages of goods and chattels. In holding the bill within the purview of the proclamation the court said: 'The guiding principle in sustaining legislation of a special session is that it be germane to, or within, the apparent scope of the subjects which have been designated as proper fields for legislation.'

Perusal of the authorities touching upon the legislative prerogative under calls to special session leads to the conclusion that although the extreme cases either way seem to be irreconcilable, there is no disagreement as to the proposition that while the Legislature must confine itself to the subject matter submitted, it is not required to follow the views of the Governor as to the means it uses to accomplish the objectives stated in the subject set before them; 10 the conflict is not so much in the statement of the rule as it is as to whether a narrow or a broad interpretation will be given to the terms 'subject matter' or 'purpose' for which the special session is called.

The language of our constitutional provision is explicit--Sec. 6, Art. VII provides:

'On extraordinary occasions, the Governor may convene the Legislature by proclamation, in which shall be stated the purpose for which the Legislature is to be convened, and it shall transact no legislative business except that for which it was especially convened, or such other legislative business as the Governor may call to its attention while in session. * * *'

The interdiction 'shall transact no legislative business except * * *' plainly evidences the intent that legislation should, in the main, be done at regular sessions and that special sessions are to be called only when there is some special need therefor and that matters considered should be limited to the essentials designated by the Governor. The reasons underlying such restriction undoubtedly were conservation of the time and effort of legislators and other state officials, considerations of economy, and that the public have notice of the legislation to be considered. 11

In considering what was the purpose the Governor called to the attention of the Legislature, we must look to the entire context of his message, notwithstanding the fact that he expressly denied any desire that the State impose any new or higher taxes. In his letter announcing his intention to deliver it, he characterized the message as being '* * * on the subject of school retirement and finance'; and similarly in its first paragraph as 'a message on the all important subjects of school retirement, finance and taxation'; and proceeding to the 'specific proposals I have to make * * *', he recommended the enactment of certain previously prepared measures which would put into effect a program devised by the Legislative Council which increased the funds available under the state supported school finance plan. The detail is immaterial here except that under the prior law the amount ranged from a minimum of $3,300 to a maximum of $4,290 per classroom unit, which was increased under the new law from minimum $3,450 to $4,530 maximum, depending on the amount provided by the districts. It is estimated that about one and one-half million dollars per annum will be needed from the State Uniform School Fund to meet the increase.

Realization by the Governor that it was up to the Legislature to find the means of providing this money seems clearly manifest. He not only called the subject to their attention but he made suggestions to them as how they should handle it as evidenced by the following expressions:

'Any discussion of further increase in finances, however, must be related to our present tax burden and what we can afford.'

'The only way the increased levy on property can be postponed or avoided is to provide more money in the uniform school fund from other sources.'

'As to the source of the funds, I recommend that they be obtained by borrowing from the appropriation of $2,157,000 that was made in the regular session to the school building fund. * * * The borrowing of $935,000 from the school building fund would not be out of order.'

'The new plan proposes a ten mill local levy for a $3,450 per unit program graduated up to a 12 mill local levy for a $4,050 program. This plan provides that any tax yield in excess of the minimum program for any district would revert to the [state] Uniform School Fund for distribution to the remaining...

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  • Advisory Opinion to the Governor, In re
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    ...or agenda for a special session may not restrict the manner, method or means of legislative action pursuant thereto. State Tax Comm. v. Preece, 1 Utah 2d 337, 266 P.2d 757; Commonwealth ex rel. Schnader v. Liveright, 308 Pa. 35, 161 A. 697; State Road Comm. of W. Va. v. W. Va. Bridge Comm.,......

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