Opinion ID: 1828536
Heading Depth: 1
Heading Rank: 4

Heading: Diversion of Dedicated and Special Taxes

Text: In ruling on the constitutionality of LSA-R.S. 11:1481, as amended by Act 860, the district court found that to the extent the statute allows for the diversion of taxes already dedicated to other purposes, the statute violates La. Const. art. VI, §§ 26(B) and 32. This finding addresses itself to the aspects of LSA-R.S. 11:1481 that seek to provide a method of financing the Fund through ad valorem taxes. Pursuant to LSA-R.S. 11:1481, each sheriff and ex officio tax collector, or other official responsible for tax collection, is required to deduct one-fourth of one percent of taxes shown to be collectible by the tax rolls, including that shown on the tax rolls to be exempted by virtue of the homestead exemptions and to remit that sum to the Fund in a lump sum from first tax collections each year or periodically at the same time said sheriff and tax collector shall disburse funds to the tax recipient bodies. LSA-R.S. 11:1481(1)(a)(i). In support of its motion for partial summary judgment, the City produced the legislative auditor's report demonstrating how the City's alleged liability to the Fund for the 2005 tax year was calculated. That report illustrates that the dollar amount of funds deposited into the registry of the court was based on the applicable percentage of all ad valorem taxes collectible by the City, including taxes dedicated for specific purposes. The district court ruled that to the extent the language of LSA-R.S. 11:1481 requires the deduction and remittance of a percentage of all ad valorem taxes shown to be collectible on the tax rolls, including those millages dedicated to specific purposes, the statutory language results in the diversion of dedicated or special taxes to purposes other than those for which they were designated, in violation of the Louisiana Constitution. For the following reasons, we find the district court erred in its conclusion that LSA-R.S. 11:1481 allows and/or requires the diversion of dedicated or special taxes. The focal issue before us is a narrow one. The question presented to, and ruled on, by the district court was whether dedicated taxes can be used to finance the Fund. In resolving the City's challenge to the constitutionality of the statute, we must constrain our analysis to the issue before us: whether LSA-R.S. 11:1481 is unconstitutional because it allows the Fund to divert dedicated taxes to a purpose other than that for which they were designated. The diversion of taxes dedicated to a specific purpose is expressly prohibited by La. Const. art. VI, §§ 26(B) and 32, which provide as follows: La. Const. Art. VI, § 26. Parish Ad Valorem Tax (B) Millage Increase Not for General Purposes. When the millage increase is for other than general purposes, the proposition shall state the specific purpose or purposes for which the tax is to be levied and the length of time the tax is to remain in effect. All proceeds of the tax shall be used solely for the purpose or purposes set forth in the proposition. [Emphasis added.] La. Const. Art. VI, § 32. Special Taxes; Authorization Section 32. For the purpose of acquiring, constructing, improving, maintaining, or operating any work of public improvement, a political subdivision may levy special taxes when authorized by a majority of the electors in the political subdivision who vote thereon in an election held for that purpose. This court has consistently interpreted the constitution to prohibit the use of dedicated and special taxes for purposes other than those for which they were levied. For example, in Orleans Parish School Board v. City of New Orleans, 238 La. 738, 116 So.2d 505 (La.1959), the Orleans Parish School Board challenged the constitutionality of LSA-R.S. 47:1910, which required the Department of Finance for the City of New Orleans to deduct from taxes collected for the school board a proportionate share of the City's contribution to the expense fund of the Board of Assessors for the Parish of Orleans. The district court granted an injunction and ordered the City to pay to the school board, without any deductions, all of the money collected from a tax levied by the Board. This court affirmed, holding that the challenged statute was unconstitutional insofar as it authorized a deduction from the funds payable to the school board because the legislature has no power to divert to others proceeds the constitution requires be paid daily to said board. See also, Orleans Parish School Board v. City of New Orleans, 198 La. 483, 3 So.2d 745 (1941) (City could not deduct from school board's tax revenues cost of collecting tax as the constitution requires that the entire amount derived from the tax be paid to the board.); Ziemer v. City of New Orleans, 195 La. 1054, 1067, 197 So. 754, 759 (1940) (Where [tax] funds are dedicated to a certain purpose they cannot be intermingled with other funds and used indiscriminately, but must be applied as dedicated.). Indeed, this principle was recently confirmed by this court in Denham Springs Economic Development District v. All Taxpayers, Property Owners, 04-1674 (La.2/4/05), 894 So.2d 325, wherein, in interpreting a tax increment financing statute, we recognized that the statute prohibited dedicated taxes from being used for purposes other than their dedicated purpose. In the instant case, the City argues that with the exception of a General Municipal Purposes tax, every tax on which the legislative auditor based his assessment of the City's alleged liability to the Fund for the 2005 tax year is dedicated by the constitution, by statute, and/or by the electorate for a specific purpose and that, to the extent that the language of LSA-R.S. 11:1481 requiring the deduction of a percentage of taxes shown to be collectible by the tax rolls, including that shown on the tax rolls to be exempted by virtue of the homestead exemptions includes a percentage of taxes levied or dedicated for special purposes, the statutory language violates the prohibition of La. Const. art. VI, §§ 26(B) and 32. The Fund responds to the City's assertion with a two-pronged argument. First, the Fund argues that La. Const. art. X, § 29(E)(3) creates an exception to the prohibition in La. Const. art. VI, §§ 26(B) and 32 against diverting special and dedicated taxes to a purpose other than that for which they were levied. According to the Fund, La. Const. art. X, § 29(E)(3), as the more recent and specific constitutional provision, authorizes the use of existing dedicated taxes to attain and maintain the actuarial soundness of state-wide public retirement systems, in effect overriding the prohibitions in La. Const. art. VI, §§ 26(B) and 32. Louisiana Const. art. X, § 29(E)(3) provides, in pertinent part: For statewide public retirement systems not covered by Paragraphs (A) and (B) of this Section, the legislature shall determine all required contributions to be made by members, contributions to be made by employers, and dedicated taxes required for the sound actuarial maintenance of the systems. At issue is the meaning of the reference in La. Const. art. X, § 29(E)(3) to dedicated taxes. The Fund argues that because this more recently enacted constitutional provision lists dedicated taxes as one of the types of contributions that may be used to achieve the actuarial soundness of statewide retirement systems, taxes dedicated to purposes other than the funding of retirement systems can be used for that purpose. The error in this argument of the Fund is that it would require an interpretation of this constitutional provision that would place it in direct conflict with other provisions of the constitution, i.e., La. Const. art. VI, §§ 26(B) and 32, resulting in a negation of the protections provided by those constitutional provisions. This result we cannot sanction for the following reasons. As a general rule, articles of the constitution are to be construed and interpreted using the same canons of interpretation applicable to statutes and written instruments. State v. Expunged Record No. 249,044, 03-1940, p. 4 (La.7/2/04), 881 So.2d 104, 107; Louisiana Department of Agriculture and Forestry v. Sumrall, 98-1587, p. 4 (La.3/2/99), 728 So.2d 1254, 1258. Under our well-settled rules of statutory construction, where it is possible, courts have a duty in the interpretation of a statute (or by analogy, constitutional provision) to adopt a construction which harmonizes and reconciles it with other provisions dealing with the same subject matter. LSA-C.C. art. 13; Louisiana Municipal Association, 04-0227 at 36, 893 So.2d at 837; Hollingsworth v. City of Minden, 01-2658, p. 4 (La.6/21/02), 828 So.2d 514, 517. Further, while LSA-C.C. art. 8 [8] provides that laws may be repealed either entirely or partially by other laws, and that such a repeal can either be express or implied, it is well-settled in the jurisprudence that repeals by implication are not favored and that a repeal by implication will be found only when there is an irreconcilable conflict between two statutes (or constitutional provisions) and where there exists no possible construction that could give both provisions effect. Jordan v. Louisiana Gaming Control Board, 98-1122, 98-1133, 98-1134, p. 9 (La.5/15/98), 712 So.2d 74, 80-81; State v. Craig, 93-2515, 93-2654, 93-2589, p. 7 (La.5/23/94), 637 So.2d 437, 443; State v. Standard Oil Co. of Louisiana, 188 La. 978, 178 So. 601, 626 (1937). Applying the foregoing principles in the instant case, we find no conflict between La. Const. art. VI, §§ 26(B) and 32 and Article X, § 29(E)(3) such as would authorize, in section 29(E)(3), what is prohibited elsewhere: the use of dedicated taxes for purposes other than those for which the taxes were levied. To the contrary, the constitutional provisions can easily be construed to harmonize with each other in a manner that gives full effect to each of them. A plain reading of its language demonstrates that the clear intent of La. Const. art. X, § 29(E)(3) was to authorize the legislature to use contributions from three sources to attain and maintain actuarial soundness, including among those sources dedicated taxes which the legislature adopts and dedicates to funding retirement systems. In other words, the dedicated taxes authorized by section 29(E)(3) as one method for attaining actuarial soundness refers to taxes the legislature may levy and dedicate for the purpose of funding statewide retirement systems, not to taxes dedicated by the constitution or by voters to other purposes. Viewed in this light, the constitutional provisions complement, rather than conflict with, each other. A dedicated tax is, quite simply, a tax that is dedicated for a specific purpose. Under the constitution, taxes dedicated to a specific purpose cannot be used for another purpose. Should the legislature elect to levy a dedicated tax to fund the Fund, as authorized by Article X, § 29(E)(3), then Article VI, §§ 26(B) and 32 would protect that dedicated tax and prevent the diversion of its proceeds to other purposes. As we recognized in Denham Springs Economic Development District, 04-1674 at 14, 894 So.2d at 335, when citizens are presented with a proposition that would impose a special tax for a specific purpose, and they approve the imposition of that tax, a covenant is created which must be respected and upheld. Once citizens vote for a tax dedicated to one purpose, the tax cannot be used for a purpose other than that approved by the citizens. Any alteration of a prior dedication must be by vote of the people. The constitution, at Article VI, §§ 26(B) and 32, respects and upholds this most basic proposition. The language of Article X, § 29(E)(3) does not authorize the diverting of taxes dedicated by voters for one purpose to another purpose, in contravention of Article VI, §§ 26(B) and 32. Rather, section 29(E)(3) is simply an acknowledgment that taxes dedicated to the financing of statewide public retirement systems are one of the funding mechanisms of such retirement systems. Article X, § 29(E)(3) does not constitute an exception to Article VI, §§ 26(B) and 32 that would permit the financing of the Fund through the diversion of taxes dedicated to other purposes. Perhaps anticipating this conclusion, the Fund argues secondly, and in the alternative, that LSA-R.S. 11:1481(1)(a)(i) does not require the use of special or dedicated taxes to fund the retirement system. Rather, the Fund argues that the statute merely establishes a method of calculating the amount of each governmental entity's required contribution to the Fund, leaving it to the discretion of the local governmental entity to determine the source of the money to be remitted to the Fund. Because not all of the taxes shown to be collectible by the City's tax rolls are dedicated taxes, the Fund argues that the City could meet its obligations under the statute without using any portion of dedicated taxes. In other words, the Fund maintains that the statute is not unconstitutional on its face and that its language can be construed in such a manner as to uphold its constitutionality. The Fund's argument in this regard is primarily one of statutory interpretation. In evaluating that argument, certain principles of statutory construction apply. First and foremost is the rule that legislation is the solemn expression of the legislative will and, therefore, the interpretation of a law primarily involves the search for the legislature's intent. Louisiana Municipal Association, 04-0227, p. 35, 893 So.2d at 836; Detillier v. Kenner Regional Medical Center, 03-3259, p. 3 (La.7/6/04), 877 So.2d 100, 103; Sultana Corporation v. Jewelers Mutual Insurance Company, 03-0360, p. 3 (La.12/3/03), 860 So.2d 1112, 1115. The starting point in ascertaining that legislative intent is the language of the statute itself. Moss v. State, 05-1963, p. 16 (La.4/4/06), 925 So.2d 1185, 1197; Touchard v. Williams, 617 So.2d 885, 888 (La.1993). In examining that language, words and phrases are to be read in their context and to be accorded their generally prevailing meaning. LSA-C.C. art. 11; LSA-R.S. 1:3. It is presumed that every word, sentence, or provision in a law was intended to serve some useful purpose, that some effect is to be given to each such provision, and that no unnecessary words or provisions were employed. Moss, 05-1963 at 15, 925 So.2d at 1196; Sultana Corporation, 03-0360 at 9, 860 So.2d at 1119. As a result, courts are bound, if possible, to give effect to all parts of a statute and to construe no sentence, clause, or word as meaningless and surplusage if a construction giving force to, and preserving, all words can legitimately be found. Moss, 05-1963 at 15, 925 So.2d at 1196; St. Martin Parish Police Jury v. Iberville Parish Police Jury, 212 La. 886, 33 So.2d 671, 676 (1947). When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written, and no further interpretation may be made in search of the legislature's intent. LSA-C.C. art. 9; LSA-R.S. 1:4. When the language of a law is susceptible of different meanings, it must be interpreted as having the meaning that best conforms to the purpose of the law. LSA-C.C. art. 10. Finally, when the words of a law are ambiguous, their meaning must be sought by examining the context in which they occur and the text of the law as a whole. LSA-C.C. art. 12. At issue here is the interpretation to be accorded LSA-R.S. 11:1481(1)(a)(i) which provides: Each sheriff and ex officio tax collector for the state of Louisiana, or other official responsible for such tax collection, is hereby authorized and required to deduct one-fourth of one percent of taxes shown to be collectible by the tax rolls, including that shown on the tax rolls to be exempted by virtue of the homestead exemptions of each respective parish, and the city tax collector for the city of New Orleans, or other official responsible for such tax collection, is hereby authorized and required to deduct one-fourth of one percent of taxes shown to be collectible by the tax rolls, including that shown on the tax roll to be exempted by virtue of homestead exemptions, for the city of New Orleans and the parish of Orleans which money each respective sheriff, tax collector, or any other person performing said duties shall remit to the Assessors' Retirement Fund in a lump sum from first tax collections each year or periodically at the same time said sheriff and tax collector shall disburse funds to the tax recipient bodies of his respective parish. The amount remitted to the Assessors' Retirement Fund shall be based on the total amount of taxes shown to be collectible on the roll, including that shown on the tax roll to be exempted by virtue of homestead exemption, on the date the tax roll is filed for collection. As enacted, the first sentence of this provision authorizes and requires the official responsible for tax collection in each respective jurisdiction to deduct one-fourth of one percent of taxes shown to be collectible by the tax rolls, including that shown on the tax rolls to be exempted by virtue of the homestead exemptions, which money each tax collector is directed to remit to the Fund in a lump sum from first tax collections each year or periodically at the same time said sheriff and tax collector shall disburse funds to the tax recipient bodies of his respective parish. Read in insolation, the instruction to deduct one-fourth of one percent of all taxes shown to be collectible by the tax rolls could be construed to require the tax collector to deduct one-fourth of one percent from the amount due each tax recipient agency, including those that receive only dedicated taxes, and then remit that sum to the Fund. Such a requirement, to the extent that it would result in every tax recipient body, including those that rely on special and dedicated taxes, being deprived of one-fourth of one percent of taxes otherwise due, would violate the constitutional prohibitions against diversion of dedicated taxes, and render the statute unconstitutional. However, this phrase cannot, consistent with well-settled rules of statutory interpretation, be read in isolation. A statute cannot be interpreted by review of select portions of the statutory scheme. All the words must be read together. As we have repeatedly cautioned, the meaning and intent of a law must be determined by a consideration of the law in its entirety. Moss, 05-1963 at 15, 925 So.2d at 1196; Sultana Corporation, 03-0360 at 4; 860 So.2d at 1116; Succession of Boyter, 99-0761, p. 9 (La.1/7/00), 756 So.2d 1122, 1129. Moreover, in construing statutes, courts must endeavor to give an interpretation that will give them effectiveness and purpose, rather than one which makes them meaningless. State v. Cunningham, 04-2200, pp. 8-9 (La.6/13/05), 903 So.2d 1110, 1116; State v. Union Tank Car Company, 439 So.2d 377, 382 (La.1983). Thus, if there are two ways to interpret a statute, courts are to interpret the statute in such a manner as to uphold its constitutionality. Cunningham, 04-2200 at 9, 903 So.2d at 1116. In this case, the sentence which immediately follows the first one elucidates and clarifies the intent of the provision. That sentence explains that [t]he amount remitted to the Assessors' Retirement Fund shall be based on the total amount of taxes shown to be collectible on the roll, including that shown on the tax roll to be exempted by virtue of homestead exemption.  (Emphasis supplied.) A plain reading of this sentence, in conjunction with the previous one, demonstrates that the intent of the statute is simply to provide direction as to the method of calculating the amount of each governmental entity's obligation to the Fund. The statute does not direct, require, or identify from which source the funds to pay this amount are to be deducted prior to being remitted. To interpret the statute otherwise would lead to absurd consequences. This is because the statute clearly includes in the amounts from which the deduction is to be made those taxes shown to be collectible ( i.e., taxes which could have been collected as opposed to taxes actually collected), including that shown on the tax roll to be exempted by virtue of homestead exemption. Because a tax collector cannot deduct and remit from taxes he or she does not collect, it is apparent that the statute does not attempt to identify the source of the monies to be remitted to the Fund; it specifies only the method of identifying and calculating the amount due. This interpretation of the statute is bolstered by the fact that nowhere in the language of the statute is there a directive that the amount required to be remitted to the Fund be paid from dedicated or special taxes. Nor is there a directive that the person responsible for tax collection in each respective jurisdiction deliver less than that full amount of dedicated revenues to the tax recipient body that is the beneficiary of dedicated or special taxes. The reason for such an omission is obvious: the use of dedicated or special taxes for any purpose other than that for which they are designated is specifically prohibited by the constitution. La. Const. art. VI, §§ 26(B) and 32. These constitutional provisions mandate that each recipient fund receive the full measure of what is due from dedicated funds. To successfully challenge a legislative act as unconstitutional on its face, the challenger must establish that no circumstances exist under which the act would be valid. AFSCME, Council # 17 v. State, Department of Health and Hospitals, 01-0422, p. 8 (La.6/29/01), 789 So.2d 1263, 1269; State v. Powdrill, 95-2307, p. 9 (La. 11/25/96), 684 So.2d 350, 357. As demonstrated above, it is possible to achieve a construction of the statute that renders it constitutional. [9] As we explained in Louisiana Municipal Association v. State , The legislative power includes `absolute control over the finances of the state, except as limited by constitutional provisions.' Id., 04-0227 at 46, 893 So.2d at 843, quoting Louisiana Public Facilities Authority v. Foster, 01-0009, p. 18 (La.9/18/01), 795 So.2d 288, 301. It is the legislature's particular province to determine how the departments of government shall be funded from the public fisc. Id. The Louisiana constitution mandates in Article X, § 29(E) that the legislature attain and maintain actuarial soundness in the state and statewide public retirement systems. The constitution does not dictate how that actuarial soundness is to be accomplished. Instead, the mechanism by which actuarial soundness is achieved is left to the discretion of the legislature. Louisiana Municipal Association, 04-0227 at 58, 893 So.2d at 850-851. In this case, in enacting LSA-R.S. 11:1481, the legislature has endeavored to set forth the manner in which the statewide Assessors' Retirement Fund is to be financed and its actuarial soundness achieved. A plain reading of the statute reveals that Section (1)(a)(i)of the statute instructs as to the proper method of calculating the amount of each governmental entity's required contribution to the Fund so that an appropriate amount can be deducted and then remitted to the Fund. Contrary to the conclusion of the district court, its language does not direct or dictate that the required contribution be paid from special or dedicated taxes. Because we find that the statute can be interpreted in such a manner as to render it consistent, and not in conflict, with the constitutional prohibitions against the diversion of dedicated or special taxes, we reverse the district court's ruling declaring LSA-R.S. 11:1481, as amended by Act 860, unconstitutional as violating La. Const. art. VI, §§ 26(B) and 32.