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Burnett v. Chilton County Health Care Authority

Supreme Court of Alabama

January 11, 2019

Roy Burnett
v.
Chilton County Health Care Authority and Chilton County

          REL: January 11, 2019 As modified on denial of rehearing by substitution of page 35.

          Appeal from Chilton Circuit Court (CV-16-900112)

          PER CURIAM

         Roy Burnett appeals from an order of the Chilton Circuit Court granting a motion for a judgment on the pleadings filed by the defendants, Chilton County and the Chilton County Health Care Authority (hereinafter referred to collectively as "the Chilton defendants"), in his action seeking a judgment declaring that Act No. 2014-422, Ala. Acts 2014, violates the Alabama Constitution and requesting an injunction against enforcement of that act. We reverse the judgment of the trial court.

         I. Facts

         On January 21, 2014, House Bill 331 ("H.B. 331") was introduced in the Alabama House of Representatives. The stated purpose of H.B. 331 was

"to authorize the [Chilton] county commission to levy an additional one cent sales tax which shall be used exclusively for the construction, maintenance, and operation of a hospital in Chilton County; to provide for an expiration date for the tax; and to provide for a referendum and subsequent referendums."

H.B. 331 was subsequently approved by both the House of Representatives and the Alabama Senate. Then Governor Robert Bentley signed the bill on March 13, 2014, and it was designated Act No. 2014-162.

         On February 16, February 23, March 2, and March 9, 2014, notices had been placed in the Clanton Advertiser containing the full text of a second bill, which was introduced in the Senate as Senate Bill 462 ("S.B. 462"). The stated purpose of S.B. 462 was

"to levy additional sales and use taxes to be used for the construction, maintenance, and operation of hospital facilities in Chilton County; to provide for certain matters relating to the administration, collection, and enforcement of such taxes; to provide for the effective date and termination of such taxes; to provide for an advisory referendum regarding the levy of the taxes; to provide that such taxes may not be abated pursuant to Chapter 9B, Title 40, Code of Alabama 1975, or otherwise; and to authorize the pledge of such taxes by Chilton County or a public corporation acting as its agent to secure indebtedness issued for the purposes for which the taxes are authorized."

S.B. 462 was approved by the House of Representatives and the Senate, and it was forwarded to Governor Bentley. Governor Bentley declined to sign the bill. Instead, on April 1, 2014, he sent the legislature a letter, which stated, in part:

"I received Senate Bill No. 462 and, at the request of the bill sponsor, believe the bill should be amended to repeal a duplicative Act, passed earlier this legislative session.
"For these reasons, I am returning to you, the body in which it originated, Senate Bill No. 462 without my signature and with the below Executive Amendment for your consideration."

         The executive amendment proposed inserting as "Section 14" of S.B. 462 the following: "Section 14. Act No. 2014-162 is hereby repealed." The amendment proposed renumbering the remaining sections accordingly.

         On April 2, 2014, the House of Representatives and the Senate adopted the executive amendment, approving an amended version of S.B. 462 that contained the new Section 14. Governor Bentley signed the bill on April 10, 2014, and it was designated Act No. 2014-422. It is undisputed that no notice of Act No. 2014-422 as amended by the addition of the new Section 14 -- the repealer provision -- was ever published to the people of Chilton County.

         On June 3, 2014, an advisory referendum was held in Chilton County in accordance with Section 7 of Act No. 2014-422, which asked "whether or not the qualified electors of the county support or oppose the [Chilton County Commission's] levying the additional sales and use taxes authorized in [Act No. 2014-422]." The votes in favor of supporting the taxes numbered 7, 853; the votes in opposition numbered 2, 012.

         On June 4, 2014, the Chilton County Commission ("the Commission") held a special meeting in which it voted unanimously to approve a resolution to levy the $0.01 sales tax authorized by Act No. 2014-422 "to be used for the construction, maintenance, and operation of hospital facilities in Chilton County, as well as for all other uses and purposes authorized in [Act No. 2014-422]." The resolution set August 1, 2014, as the effective date to begin collecting the taxes.

         On August 26, 2014, the Commission amended the resolution it had adopted on June 4, 2014, levying new taxes under the authority of Act No. 2014-422, including a "privilege or license tax" on businesses in Chilton County and "excise taxes on storage, use or other consumption of property in the County." The amended resolution reiterated that "[t]he proceeds of the taxes levied ... shall be used only for the purpose of providing funds to pay the costs of construction, maintenance, and operation of hospital facilities in [Chilton] County." In the amended resolution, the Commission designated the Chilton County Health Care Authority as the entity that would oversee the construction, maintenance, and operation of new hospital facilities.

         On June 9, 2016, Burnett, a resident of and taxpayer in Chilton County, filed a complaint on behalf of himself and a putative class of "all persons and/or entities that have paid or are subject to the sales and use tax levied by [the Commission] pursuant to Alabama Act [No.] 2014-422 from August 1, 2014, to the present" against the Chilton defendants in Chilton Circuit Court. Burnett sought a judgment declaring that Act No. 2014-422 violated Art. IV, §§ 70 and 71.01(C), Ala. Const. 1901, and he sought an injunction against the collection of the taxes levied pursuant to Act No. 2014-422. Burnett filed a notice of his constitutional challenge with the Alabama Attorney General pursuant to § 6-6-227, Ala. Code 1975.[1] Burnett subsequently amended the complaint to add claims that Act No. 2014-422 violated Art. IV, § 106, Ala. Const. 1901, and Art. IV, § 107, Ala. Const. 1901.

         On July 29, 2016, the Chilton Health Care Authority filed a motion to dismiss Burnett's amended complaint. Subsequently, however, the Chilton defendants filed a motion to stay the action pending a ruling from this Court in Jefferson County v. Taxpayers & Citizens of Jefferson County, 232 So.3d 845, 848 (Ala. 2017), because of similar arguments in that case concerning alleged violations of Art. IV, § 71.01(C), Ala. Const. 1901.

         On March 17, 2017, this Court issued its opinion in Jefferson County in which it concluded that constitutional deficiencies in a legislative act signed into law on May 27, 2015, created by Art. IV, § 71.01(C), were cured by Art. IV, § 71.01(G), which was added by a constitutional amendment adopted in November 2016. The stay in this case was lifted, and the Chilton defendants argued that Burnett's claims relying on Art. IV, § 71.01(C), were due to be dismissed. Burnett agreed, and accordingly, on April 26, 2017, the count of Burnett's second amendment to the complaint alleging a violation of § 71.01(C) was dismissed.

         The Chilton Health Care Authority then renewed its motion to dismiss the action. Both Chilton County and Burnett filed motions for a judgment on the pleadings. The trial court held a hearing on those motions on June 19, 2017.

         On June 19, 2017, the trial court entered an order granting the motion for a judgment on the pleadings in favor of the Chilton defendants. The trial court first addressed Burnett's contention that Act No. 2014-422 violated Art. IV, § 70, Ala. Const. 1901, because S.B. 462 was a bill to "rais[e] revenue" and it did not originate in the House of Representatives:

"Since Article IV, Sec. 70, of the Alabama Constitution does not apply to bills that do not in and of themselves levy a tax, but authorize a county commission to do so in the future, the first claim fails and judgment is rendered in favor of [Chilton] Defendants on that claim."

         Next, the trial court addressed Burnett's contentions that Act No. 2014-422 violated Art. IV, §§ 106 and 107, because public notice associated with it failed to include the repealer provision that stated that Act No. 2014-422 repealed Act No. 2014-162.

"When Act [No.] 2014-422 was advertised, it covered the whole subject matter that had previously been contained in Act [No.] 2014-162. It specifically rewrote the provisions of Act [No.] 2014-162 and enacted provisions directly in conflict with it. Although, not declared by a Court prior to the passage of Act [No.] 2014-422, it is undisputed that Act [No.] 2014-162 was unconstitutional on its face. An unconstitutional Act is void.
"When an Act covers the whole subject matter of the former Act, rewrites the entire law of the subject, and enacts provisions directly in conflict with the former touching the same matter, the later provisions, if valid, must of necessity, repeal the former. Fidelity & Deposit Co. of Maryland v. Farmers' Hardware Co. et al., 223 Ala. 477, 136 So. 824');">136 So. 824(1931).
"That being the case here, Sec. 14 of Act [No.] 2014-422 (the repealer provision) was not necessary and is hereby stricken and severed from the Act as mere surplusage.
"Accordingly, the Court finds Act [No.] 2014-422, with the deletion of Sec. 14, valid and entitled to its full force and effect."

         Because the order addressed all of Burnett's remaining claims, it constituted a final judgment, and Burnett filed a timely appeal.

         II. Standard of Review

         "Our review of constitutional challenges to legislative enactments is de novo. See Jefferson County v. Richards, 805 So.2d 690 (Ala. 2001)." Richards v. Izzi, 819 So.2d 25, 29 n.3 (Ala. 2001). See also Scott Bridge Co. v. Wright, 883 So.2d 1221, 1223 (Ala. 2003) ("This Court reviews de novo a trial court's interpretation of a statute, because only a question of law is presented.").

         III. Analysis

         A. Whether Act No. 2014-422 Violates Art. IV, § 70, Ala. Const. 1901.

         Burnett argues that the trial court erred in concluding that Act No. 2014-422 did not violate the requirement of § 70 that "[a]ll bills for raising revenue shall originate in the house of representatives." Burnett contends that the trial court "manufacture[d] a distinction without a difference between the levy and imposition of a tax." Burnett's appellate brief, p. 21.

         In Houston County v. Covington, 233 Ala. 606, 607, 172 So. 882, 882 (1937), this Court addressed a constitutional challenge to a local act that "authorized the Board of Revenue of Houston County, Alabama, to impose an excise tax of one cent per gallon on all gasoline or other motor fuels sold or delivered in Houston County." 233 Ala. at 607, 172 So. at 882. Concerning the plaintiff's contention that the act violated § 70 because it had originated in the Alabama Senate, this Court explained:

"The act was not for the raising of revenue within the requirements of section 70 of the Constitution. It merely dealt with municipal power to enact an ordinance dealing with the conduct of the business of selling and delivering 'gasoline, naptha, and other liquid motor fuels or any device or substitute therefor, commonly used in internal combustion engines,' the proceeds therefrom to be used by the county 'exclusively for the purpose of constructing and maintaining public roads, streets, bridges and ferries,' etc., as required by the act. Local Acts Extra Session 1936, pp. 97, 98; In re Opinions of the Justices, 223 Ala. 369, 136 So. 589');">136 So. 589 [(1931)]; Kennamer v. State, 150 Ala. 74, 43 So. 482');">43 So. 482 [(1907)]."

233 Ala. at 609, 172 So. at 884.

         Similarly, in Yancey & Yancey Construction Co. v. DeKalb County Commission, 361 So.2d 4 (Ala. 1978), this Court addressed, among other issues, whether a local act that "permit[ted] the County Commission of DeKalb County to levy a tax on the privilege of severing coal in DeKalb County" violated § 70. 361 So.2d at 4.

"[The plaintiff] contends that [local Act No. 667, Acts of Alabama 1976], which originated in the Senate, is repugnant to the constitutional requirements that 'All bills for raising revenue shall originate in the house of representatives. ...' Article IV, Section 70, Constitution 1901. This court has held that that provision of the Constitution refers to bills which levy a tax as a means of collecting revenue. Opinion of the Justices, 259 Ala. 514, 66 So.2d 921 (1953). Act No. 667 does not levy a tax; it merely ...

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