Case Name: STATE TAX COMMISSION v. PREECE
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1954-02-03
Citations: 1 Utah 2d 337
Docket Number: No. 8138
Parties: STATE TAX COMMISSION v. PREECE.
Judges: McDonough, j., and norseth, District Judge, concur.
Reporter: Utah Reports, Second Series
Volume: 1
Pages: 337–350

Head Matter:
266 P.2d 757
STATE TAX COMMISSION v. PREECE.
No. 8138.
Supreme Court of Utah.
Feb. 3, 1954.
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.
. State v. Scott, 105 Utah 31, 140 P.2d 929; State v. Tweed, 63 Utah 176, 224 P. 443.
. Chap. 34, 1st Sp.Session 1953 — Amend. 59-18-4 and 10, U.C.A.1953.

Opinion:
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 2‡ to 4‡ per pack and allocated the revenue derived therefrom to the Uniform School Fund.
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. 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, 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 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, tQ 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, 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 i^pson of the fact that the same jurisdiction in the later case of McCarroll v. Clyde Collins Liquors 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 pi'ovide 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 of incidentally arise out of that call ."
The rule just stated is urged by plaintiff in support of their argument that the Governor opened up the subject of school finance and methods of raising funds which includes taxation. Other cases cited by them are: Baldwin v. State : 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: 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 in which the call related to rectifying difficulties encountered by Federal Loan Agencies in financing installment mortgages on livestock and produce which the Legislatu^ 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; 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 extraordinai-y occasions, the Goveimor may convene the Legislature by proclamation, in which shall be stated the purpose for which the Legislature is to be convened, axid 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 legisla tive 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.
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 school districts."
He also recommended the adoption of legislation by which the local districts would levy higher taxes resulting in more funds coming into the State Uniform School Fund; and further to a plan to allocate such funds to the districts on the basis of the increase of current year's enrollment over that of the previous year, with respect to which he stated: "A bill has been prepared based on these factors which will provide an additional $935,000 to eligible school districts for this year."
It seems clear that the Governor's objective was to avoid the imposition of any new state tax and to see that the added expense of the new program was supported from other sources, primarily by the local districts, as these comments show: "There are certain requisites to a changed financing law that will be met in my proposal including better equalization among the districts and greater local responsibility and control. It is essential that we increase local board responsibilities , if we are ever to bring-taxing and spending into line. Those who decide on expenditure policies should bear the political responsibility for raising the necessary funds."
The Governor's suggestions as to the ways and means of handling the added cost of financing the schools may have been helpful and even desirable. However, we are in no wise concerned with the wisdom thereof, nor of the legislation which was actually passed, but only with whether the legislature acted within its constitutional powers in imposing a tax on cigarettes.
It cannot be disputed that the principal purpose of the Special Session was to relieve the condition of financial distress existing in our public school system. In attempting to do so, the Legislature, for the most part, adopted the proposals of the Legislative Council, which were also recommended by the Governor. However, they did not "borrow" the $935,000 from the school building reserve fund as he suggested; but rather took the sum of $1,525,000 from the mine occupation tax reserve fund. There is no suggestion that this deviation from the Governor's suggestion rendered that act invalid. And in order to provide additional needed funds, they passed the cigarette tax, which is here challenged.
We do not regard the question herein presented as being whether the Governor may limit the subject matter of his call by specifying a particular portion within a general subject without opening the entire subject to litigation. We do not disagree with the Attorney General's contention that he may do so, if he does so expressly, and if it does not result in infringing upon the legislative prerogatives by attempting to dictate policy to them.
We believe that the message here was of sufficient breadth that it presented the problem of school financing and the providing of funds therefor. Normally it is both the duty and responsibility of the Legislature to determine how this shall be done. We are then confronted with the question whether the Governor can call a Special Session to deal with the subject of financing our public schools, and by limiting the agenda to definite proposals as to how it shall be handled, formulate the policy with respect thereto. The answer to this proposition is found in the quite universally accepted rule, hereinbefore stated, which we approve: That while the Governor may limit the legislative agenda as to the purpose or subject matter to be considered, he cannot restrict it as to the means it pursues in solving a problem presented as a subject for legislative action. It is true, of course, that the Governor may make such recommendations as he sees fit, but these are not binding on the Legislature; they may exercise their discretion in following the recommendations or seek alternative methods in dealing with the "subject" presented.
In further support of the conclusion reached herein it is pertinent to observe that the authorities on statutory construction, without exception, hold that if any doubt exists as to the constitutionality of a statute, such doubt should be resolved in favor of the act of the Legislature. Sutherland, in speaking of the constitutionality of measures passed by special sessions under constitutional provisions similar to our own says: "In determining whether the legislative action conforms to the Governor's call, the constitutional provisions should be strictly construed in favor of the legislative power, and a statute enacted during an extraordinary session should be presumed to be constitutional." In State ex rel. National Conservation Exposition Co. v. Woollen the court said: "It is agreed that the presumption is always in favor of the constitutionality of an act, and that any piece of legislation so under consideration should be within the call, if it can be done by any reasonable construction."
We hold that passing the cigarette tax was within the purview of the subject matter presented to the Legislature by the Governor. The writ directing the auditor to have prepared and delivered the stamps requisitioned by the Tax Commission is granted.
McDonough, j., and norseth, District Judge, concur.
WOLFE, C. J., being disqualified, did not participate herein.
. State v. Scott, 105 Utah 31, 140 P.2d 929.
. 268 Mich. 366, 256 N.W. 453, 454.
. 128 Tenn. 456, 161 S.W. 1006, 1015.
. 165 Ark. 13, 263 S.W. 42, 46.
. 198 Ark. 896, 132 S.W.2d 19, 22.
. 21 Tex.App. 591, 3 S.W. 109.
. 308 Pa. 35, 161 A. 697.
. D.C., 13 F.Supp. 666, 668.
. State v. Curran, see note 3, supra.
. State v. Tweed, 63 Utah 176, 224 P. 443.
. Commonwealth ex rel. Schnader v. Liveright, see note 8, supra.
. See note 10, supra.
. Sutherland, Statutory Construction, 3d Ed., p. 118, Vol. 1.
. See note 4, supra.