Opinion ID: 2484756
Heading Depth: 1
Heading Rank: 1

Heading: Historical Considerations

Text: The history of the litigation involving Jefferson County's occupational taxes is largely set out in this Court's two opinions involving plaintiff Jessica Edwards: Jefferson County Commission v. Edwards, 32 So.3d 572 (Ala.2009) ( Edwards I ), and Jefferson County Commission v. Edwards, 49 So.3d 685 (Ala.2010) ( Edwards II ). The case underlying this appeal continues the exquisitely complex sequence of legislative enactments and related litigation, Edwards I, 32 So.3d at 575, that was addressed in those opinions. In summary, Edwards I and Edwards II dealt with the application of Act No. 406, Ala. Acts 1967 (the 1967 Act), which authorized the County to levy license or privilege taxes upon persons for engaging in businesses but exempted from its provisions licensed professionals who were required to obtain licenses from the State under Ala.Code 1975, § 40-12-1 et seq. Thereafter, under the authority of the 1967 Act, the County imposed a business-license tax on businesses and an occupational tax on individuals. Edwards I and Edwards II were appeals from judgments in the plaintiffs' class action contending that the 1967 Act had been repealed by the enactment of Act No. 99-669, Ala. Acts 1999 (the 1999 repeal Act); the trial court agreed, finding that a retroactive refund was not warranted but that collections under the 1967 Act were enjoined prospectively in January 2009. The County asserted that it required immediate enactment of an act to restore comparable taxing authority in order for the County to remain fiscally solvent; the trial court stayed application of the injunction until the end of the regular legislative session in May 2009. However, the legislature failed to pass any legislation during the regular session restoring the County's taxing authority. The County's fiscal position deteriorated rapidly, and it soon began restricting usual services. The summer months saw increasing political pressure for State government to address the situation, and numerous notices regarding proposed local laws were published in local and statewide news media. After the County's legislative delegation reached agreements as to the details of a proposed replacement-taxing plan, Governor Riley, acting pursuant to Ala. Const. 1901, Art. V, § 122, [6] called the legislature into an extraordinary session to address the situation. The 2009 Act was subsequently enacted during that session. Among other things, the 2009 Act purports to reenact the 1967 Act without the original exemptions, to repeal the 1999 repeal Act, and essentially to reinstate and approve the County's tax collections as they were conducted under the 1967 Act. In addition, the 2009 Act provided for a referendum to be held in June 2012 allowing the voters to approve or to reject the authorization to continue levying the tax. Section 10 of the 2009 Act also provides for the severability of any portion of the 2009 Act found invalid without invalidating the remainder of the 2009 Act. Soon after the 2009 Act was enacted, this Court in Edwards I affirmed the trial court's judgment holding that the 1999 repeal Act had repealed the 1967 Act. The Court took judicial notice of the passage of the 2009 Act but noted that its validity was not then before the Court. 32 So.3d at 580 n. 5. In Edwards II, the Court did address various aspects of the application of the 2009 Act: After our affirmance of the trial court's judgment in [ Edwards I ], the taxpayers, in light of the retroactivity provisions in Act No. 2009-811, filed a motion to release the tax proceeds that had been placed in the escrow fund to a court-appointed settlement administrator for the calculation of refunds due. The County filed a motion to dissolve the injunction, to vacate the escrow order, and to release the escrowed taxes to Jefferson County. The taxpayers then filed a motion to enforce the January 12, 2009, order;[ [7] ] the County filed a motion to clarify the escrow period. On December 23, 2009, the trial court entered an order denying the County's motion to dissolve the injunction, holding that Act No. 2009-811 violates § 95 of the Alabama Constitution of 1901 prohibiting the enactment of legislation taking away a cause of action after a suit based on that cause of action has been filed. 49 So.3d at 688. With respect to a violation of Ala. Const. 1901, Art. IV, § 95, the Court determined that there remains a problem with a portion of the [2009 Act]. Section 7 of the act `ratified, validated, and confirmed' the collection of the taxes determined to be illegal and, therefore, is the equivalent of an impermissible legislative determination that there could be no recovery of these illegally collected taxes, contrary to the prohibition against taking away a cause of action in § 95. 49 So.3d at 693. After a painstaking analysis, the Court in Edwards II concluded: We reverse that aspect of the December 23, 2009, judgment in which the trial court declared the retroactivity of tax collection pursuant to Act No. 2009-811 to be unconstitutional, but, because we strike that portion of Section 7 of Act No. 2009-811 ratifying, validating, and confirming the collection of the illegal tax, we affirm that aspect of the judgment in which the trial court ordered the transfer of the escrowed funds to a special master. We reverse the January 15, 2010, order in which the trial court ordered the County to pay postjudgment interest. In further proceedings on remand, consistent with the determination that Act No. 2009-811 is not unconstitutional [with respect to § 95], the trial court, whether or not it uses the services of a master to assist it in the distribution of the escrowed funds, shall compute the County's liability exclusive of taxes collected after January 12, 2009, but levied prior thereto, and without the obligation to pay interest pursuant to § 8-8-10, Ala.Code 1975. 49 So.3d at 697. Of course, during the litigation in Edwards I and Edwards II, the litigation in the instant case was proceeding through the trial court, hence this appeal. Because the trial court in the instant case determined that the publication notice for the 2009 Act violated the requirements of § 106 and that the 2009 Act was therefore unconstitutional, we first consider the County's arguments with respect to the application of § 106. In that respect, the County asserts (1) that § 106 does not apply because the 2009 Act was enacted under the Governor's authority to call the legislature into special session pursuant to § 122; (2) whether the notice under § 106 was adequate in the context of this case was a nonjusticiable political question; (3) the notice published for the 2009 Act was constitutionally sufficient under § 106.