Opinion ID: 2621258
Heading Depth: 2
Heading Rank: 2

Heading: Scope of Article IV, Section 32

Text: {11} This Court has had several occasions to consider the constitutionality of legislation in light of Article IV, Section 32. In Board of Education v. McRae, 29 N.M. 85, 88, 218 P. 346, 347 (1923), this Court held that the repeal of a law under which a poll tax assessment had already been made could not affect liability for such assessment, because such interpretation would run afoul of Article IV, Section 32. Similarly, in Asplund, 29 N.M. at 138, 219 P. at 789, we held that a property tax once duly assessed was an obligation or liability as could not be released or amended. In State v. Montoya, 32 N.M. 314, 255 P. 634 (1927) we stated: We hold only that [the statute at issue], in its purpose and effect, is void, in so far as it attempts to prevent recovery by the state of personal judgments for taxes previously assessed, and therefore possessing the quality of obligations or liabilities of a person, association, or corporation held or owned by the state. Id. at 318, 255 P. at 635; see also Gutierrez v. Gutierrez, 99 N.M. 333, 335, 657 P.2d 1182, 1184 (1983) (holding that Article IV, Section 32 prohibits a public hospital from accepting payment of less than the full amount of an undisputed legal obligation as a satisfaction.). Thus, Article IV, Section 32 clearly prohibits the release or diminishment, by statute or otherwise, of those obligations or liabilities [2] already accrued except by the payment thereof into the proper treasury, or by proper proceeding in court. {12} The limit of the general rule set forth above was illustrated in a case decided by the Supreme Court of Montana in Jones v. Burns, 138 Mont. 268, 357 P.2d 22 (1960). In Jones, the plaintiff brought a declaratory action to determine the constitutionality of a statute providing for reimbursement by the state to utility companies of seventy-five percent of all costs associated with the relocation of their facilities upon public highways whenever the state commission determined such relocation was necessary. Id. at 25-26. The plaintiff-appellant contended that the statute authorizing reimbursement violated Montana Constitution, Article V, Section 39, which states: Except as hereinafter provided, no obligation or liability of any person, association or corporation, held or owned by the state, or any municipal corporation therein, shall ever be exchanged, transferred, remitted, released or postponed, or in any way diminished by the legislative assembly; nor shall such liability or obligation be extinguished, except by the payment thereof into the proper treasury. Id. at 35-36. {13} Initially, the Supreme Court of Montana stated that implicit in the plaintiff-appellant's argument was that utility companies have a common-law duty to relocate their facilities at their own expense, which constitutes an obligation or liability within the meaning of the constitutional provision. Id. at 36. However, at the time the statute at issue in Jones was passed, [t]he commonlaw duty of the utility companies arose only when and if the existing facilities interfered with the rearrangement of a highway; it was only a contingent obligation to change the location of their facilities. Id. Relying in part on the precedent cited in its opinion [3] , the Court concluded that the statute at issue was constitutional because the Montana Constitution applied only to  fixed and liquidated claims owed to the state. [4] Id. (emphasis added). {14} Similarly, the Supreme Court of Alabama in Alabama Education Ass'n v. Grayson, 382 So.2d 501 (Ala.1980) examined the constitutionality of a statute providing that net operating loss was to be a carryback to each of the three taxable years preceding the taxable year of the loss. The Court held that an Alabama constitutional provision nearly identical to New Mexico's Article IV, Section 32 has no application to conditional obligations, but proscribes only the release of fixed obligations. Id. at 503. As a result, the Court concluded that the statute at issue was constitutional, because, under Alabama law, a tax obligation in Alabama did not become fixed until three years after the filing of the initial return or until it was otherwise finally assessed by the Department of Revenue. Id. at 504. {15} Jones and Alabama Education Ass'n are in accord with our interpretation of the plain language of Article IV, Section 32, which uses the verbs owned, held, and owing in the past tense [5] as applied to those obligations or liabilities that the legislature may not release or otherwise diminish. That is, the use of these terms in the past tense clearly indicates an intent that the constitutional provision apply only to fixed, rather than contingent or uncertain, obligations or liabilities owed to the state. Any other interpretation would render these terms of the constitutional provision superfluous. See Denish v. Johnson, 1996-NMSC-005, ¶ 37, 121 N.M. 280, 910 P.2d 914 ([U]nder basic rules of construction, no part of a constitutional provision should be interpreted so that it is rendered meaningless or superfluous.). {16} Next, Lawrence argues that the New Mexico cases cited above, together with the use of the verbs owned, held, and owing in the past tense, stand for the proposition that Article IV, Section 32 only forbids the legislature from releasing obligations and liabilities in existence when a statute purporting to release them is enacted. We disagree. As the Court of Appeals recognized below, Article IV, Section 32 provides that no obligation or liability to which the provision applies shall ever be exchanged, transferred, remitted, released, postponed or in any way diminished by the legislature. [6] N.M. Const. art. IV, § 32 (emphasis added); Longacre, 2001-NMCA-076, ¶ 19, 131 N.M. 156, 33 P.3d 906. {17} Although the adverb ever does not in any way speak to the attributes of those obligations or liabilities the release of which by the legislature is forbidden by Article IV, Section 32 ( i.e. those that are owned, held, and owing to the state), it does modify the phrase be exchanged, transferred, remitted, released, postponed or in any way diminished by the legislature. N.M. Const. art. IV, § 32. Thus, when the language of Article IV, Section 32 is construed in its entirety, it becomes evident that a given statute must be analyzed in light of Article IV, Section 32 from the moment a fixed liability or obligation may be released or diminished by the statute, rather than from the date of its enactment as Lawrence contends. [7] {18} Under our interpretation of Article IV, Section 32, clearly the legislature may eliminate or reduce a tax, as long as it only changes the tax structure prospectively. Longacre, 2001-NMCA-076, ¶ 16, 131 N.M. 156, 33 P.3d 906. Such a statute would define the nature of a future obligation or liability itself. On the other hand, Article IV, Section 32 would prohibit a statute that has the effect of eliminating or reducing a liability already incurred, even if the liability has not yet been incurred on the date that such statute is enacted.