State v. Lincoln County Power Dist. No. 1

• Citation: 111 P.2d 528,60 Nev. 401
• Decision Date: 21 March 1941
• Docket Number: 3313.
• Parties: STATE v. LINCOLN COUNTY POWER DIST. NO. 1.
• Court: Supreme Court of Nevada

111 P.2d 528

60 Nev. 401

STATE v. LINCOLN COUNTY POWER DIST. NO. 1.

No. 3313.

Supreme Court of Nevada

March 21, 1941

Appeal from Eighth Judicial District Court, Clark County; Wm. D Hatton, Judge.

Action by Lincoln County Power District No. 1 against the State of Nevada and others for a judgment that plaintiff's property is exempt from taxation and enjoining defendants from attempting to collect taxes thereon. From a judgment for the plaintiff, the defendants appeal.

Judgment affirmed.

Gray Mashburn, Atty. Gen., W. T. Mathews and Alan Bible, Deputy Attys. Gen., and Roland H. Wiley, Dist. Atty., and Paul Ralli, Deputy Dist. Atty., both of Las Vegas, for appellants.

H. Van Dam, Jr., of Salt Lake City, Utah, and Harold M. Morse, of Las Vegas, for respondent.

Ham & Taylor, of Las Vegas, Amici Curiae.

HAWKINS District Judge.

Appellant Clark County is a duly constituted political subdivision of the State of Nevada; the individual appellants are officials of said county as designated in the title; and appellant Nevada Tax Commission is an agency of appellant State of Nevada.

Respondent Lincoln County Power District No. 1 is a corporation organized and existing under Chapter 72, Laws of Nevada 1935, with its office at Pioche, Lincoln County, Nevada, is now and at all times since September 1st, 1937, has been the owner of valuable property located in said Clark County and the adjoining County of Lincoln, consisting mainly of an electric power transmission line extending from Boulder Dam across Clark County to the Pioche mining district in Lincoln County, Nevada; engaged in distributing, through the medium of said transmission line, hydroelectric energy, at cost, to said mining district and elsewhere in said Lincoln County.

On October 25th, 1937, appellant DeVinney, as directed by appellant Nevada Tax Commission, levied an assessment on respondent's property in Clark County for taxes for the year 1937, on an assessed valuation of $40,000, in the amount of $1,362.79, and demanded payment of said tax. Instead of paying the tax respondent brought an action in the District Court of said Clark County against appellants, praying for a judgment that its property is exempt from taxation and appellants be enjoined from attempting to collect taxes thereon.

Issues were joined in the action, a trial was had thereof and the court rendered judgment that the property of the power district is exempt from taxation, and enjoined appellants from seeking to collect any taxes thereon. From that judgment appellants have appealed, and assign as errors committed by the trial court:

1. That the opinion and decision is contrary to and against law.

2. That the judgment is contrary to and against law.

3. That finding of fact No. 1 is contrary to and against fact and law.

4. That finding of fact No. 3 that plaintiff "is in fact a municipal corporation" is contrary to and against fact and law.

5. That conclusion of law No. 1 is contrary to and against law; and

6. That conclusion of law No. 3 is contrary to and against law.

There is only one question presented to the court for determination by the assignments of error; namely, Is the property of respondent exempt from taxation? Although appellants claim two issues were raised by the pleadings: one, whether Chapter 72, Laws of 1935, provides for the creation of municipal corporations; and two, if so, is the property of such corporations exempt from taxation? In their argument appellants contend such statute is unconstitutional, being obnoxious to Article IV Section 17 of the Constitution of Nevada, in that two separate and distinct matters, not germane to each other, are included in the act, and that the title of the act fails to disclose an intent to provide for the creation of municipal corporations.

Section 17 provides: "Each law enacted by the legislature shall embrace but one subject, and matters properly connected therewith, which subject shall be briefly expressed in the title ***."

Every presumption is in favor of the validity of a statute, Ex parte Goddard, 44 Nev. 128, 190 P. 916, and a statute will always be sustained if there be any reasonable doubt of its unconstitutionality. State v. Westerfield, 24 Nev 29, 49 P. 554.

In State v. Ruhe, 24 Nev. 251, 52 P. 274; In re Walker River Irr. Dist., 44 Nev. 321, 195 P. 327; and Tonopah & Goldfield R. R. Co. v. Nevada-California Trans. Co., 58 Nev. 234, 75 P.2d 727, this court considered at length Article IV, Section 17 and statutes alleged to violate its provisions. We see no reason to review the authorities cited in those cases, or restate the conclusions reached therein, and are content to say that upon the reasoning and authority of those cases we hold Chapter 72, Laws of 1935, is constitutional.

No act authorized by the Constitution can be said to be against the public policy of the state. State v. Preble, 18 Nev. 251, 2 P. 754; the legislature possesses the whole legislative powers of the people, except so far as its power is limited by the Constitution. State v. Williams, 46 Nev. 263, 210 P. 995; and it has plenary power to legislate upon every subject unless there is a denial of that right by Constitution. Moore v. Humboldt County, 48 Nev. 397, 232 P. 1078.

There is no constitutional limitation on the power of the Legislature of Nevada to create municipal corporations and confer on them such functions it considers necessary or expedient. Harris v. William R. Compton Bond & Mortgage Co., 244 Mo. 664, 149 S.W. 603; Gaynor v. Marohn, 268 N.Y. 417, 198 N.E. 13; Wertz v. City of Ottumwa, 201 Iowa 947, 208 N.W. 511; State v. Town of Boynton Beach, 116 Fla. 534, 156 So. 539; Wilson v. Board of Trustees of Sanitary Dist., 133 Ill. 443, 27 N.E. 203; In re Tillamook People's Utility Dist., 160 Or. 530, 86 P.2d 460.

Therefore, power districts created pursuant to the provisions of Chapter 72, Laws of 1935, are municipal corporations. However, the act contains no provisions exempting, or providing for the taxation of, the property of such power districts, and whether such property is exempt from taxation is governed by the general laws of the state on taxation.

Section 6418, N.C.L., as amended, so far as applicable reads:

"All property of every kind and nature whatsoever within this state shall be subject to taxation except:

First--All lands and other property owned by the state, or by the United States, or by any county, incorporated farm bureau, municipal corporation, irrigation, drainage or reclamation district, town or village in this state, and all public school houses, with lots appurtenant thereto, owned by any legally created school district within the state; also, nonprofit private schools, with lots appurtenant thereto, and furniture and equipment."

Article VIII, Section 2, and Article X, Section 1, of the Constitution provide what property shall be taxed and what may be exempted by law from taxation. Said Section 2 of Article VIII provides: "All real property and possessory rights to the same, as well as personal property in this state, belonging to corporations now existing or hereafter created, shall be subject to taxation the same as property of individuals; provided, that the property of corporations formed for municipal, charitable, religious, or educational purposes may be exempted by law."

Section 1 of Article X is: "The legislature shall provide by law for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal and possessory, except *** and, also excepting such property as may be exempted by law for municipal, educational, literary, scientific or other charitable purposes."

In 61 C.J. taxation, page 366, section 359, it is stated to be the general rule that while in the absence of any constitutional prohibition the state may tax its own property, the presumption is always against an intention to do so, and such property is impliedly immune from taxation unless an intention to include it is clearly manifested; which immunity rests upon public policy and the fundamental principles of government.

"Some things are always presumptively exempted from the operation of general tax laws because it is reasonable to suppose they were not within the intent of the legislature in adopting them. Such is the case with property belonging to the state and its municipalities, and which is held by them for public purposes." Cooley on Taxation, 4th Ed. Vol. 2, § 621.

The words "all property" as used in Article XI, Section 13, Constitution of California, wherein it is provided: "All property in this State shall be taxed in proportion to its value ***" were construed in People v. McCreery, 34 Cal. 432, and it was said: "The meaning of taxation must be kept in view, and that is: a charge levied by the sovereign power upon the property of its subject. It is not a charge upon its own property, nor upon property over which it has no dominion."

It was held in People v. Doe G. 1,034, 36 Cal. 220, that the constitution and laws on the subject of taxing property refer to private property and persons, not public property of the state, or any subordinate part of the state government such as counties, towns, and municipal corporations. The cases of Penick v. Foster, 129 Ga. 217, 58 S.E. 773, 12 L.R.A.,N.S., 1159, 12 Ann. Cas. 346, and Foster v. Duluth, 120 Minn. 484, 140 N.W. 129, 48 L.R.A.,N.S., 707, are to the same effect.

When public property is involved, exemption is the rule and taxation the exception. National Surety Co. v. Starkey, 41 S.D. 356, 170 N.W. 582; Egan School Dist. v. Minnehaha County, 65 S.D. 32, 270 N.W. 527, 108 A.L.R. 572; State v. Snohomish County, 71 Wash. 320, 128 P. 667.

Appellants contend ...