Opinion ID: 2452678
Heading Depth: 1
Heading Rank: 2

Heading: Hancock Amendment

Text: The trial court upheld the plaintiffs' assertion that there was a violation of Art. X, § 22(a) of the Missouri Constitution, finding that the payments in lieu of franchise tax came within the language tax, license, or fees. The pertinent provisions are as follows: Counties and other political subdivisions are hereby prohibited from levying any tax, license or fees, not authorized by law, charter or self-enforcing provisions of the constitution when this section is adopted or from increasing the current levy of an existing tax, license or fees, above that current levy authorized by law or charter when this section is adopted without the approval of the required majority of the qualified voters of that county or other political subdivision voting thereon. If the definition of the base of an existing tax, license or fees, is broadened, the maximum authorized current levy of taxation on the new base in each county or other political subdivision shall be reduced to yield the same estimated gross revenue as on the prior base. If the assessed valuation of property as finally equalized, excluding the value of new construction and improvements, increases by a larger percentage than the increase in the general price level from the previous year, the maximum authorized current levy applied thereto in each county or other political subdivision shall be reduced to yield the same gross revenue from existing property, adjusted for changes in the general price level, as could have been collected at the existing authorized levy on the prior assessed value. The plaintiffs place strong reliance on Roberts v. McNary, 636 S.W.2d 332 (Mo. banc 1982), for the proposition that the in lieu of franchise tax payment is a tax within the meaning of Art. X, § 22(a) because it is paid into the general revenue fund of the city. Roberts specifically involved fees charged by St. Louis County for numerous county services, such as parks and building inspection. This case held that all charges to the public for governmental services were within the provisions of the amendment, whether or not paid into a general revenue fund, and could not be increased without a vote of the people. We found that this conclusion flowed from the plain language of the amendment. Citing dictionary definitions of tax license and fee, the Court declined to narrow these words so as to apply only to those levies which seek to raise general revenue. The Hancock Amendment requires voter approval for increases in taxes, licenses or fees, with the purpose of reining increases in governmental revenue and expenditures. Roberts, supra at 336, Buchanan v. Kirkpatrick, 615 S.W.2d 6, 14 (Mo.banc 1981). So far as this record shows the payments in lieu of franchise tax were not imposed by statute, charter or ordinance, but represented voluntary payments by the board into the city's general revenue fund. There is no similarity to the user fees considered in Roberts because the 5½ percent factor is not charged against the users. They pay the increased rates, to which the percentage factor is then applied. Thus the application of a preexisting 5½ percent factor to the rate increase simply does not amount to the imposition of a tax, license or fee in the sense of Art. X, § 22(a). To hold that the payments in lieu of franchise tax are covered by the Hancock Amendment would enlarge upon its plain language, contrary to the teaching of Roberts v. McNary, supra . We do not understand the plaintiffs to claim that they should be entitled to partial relief on the ground that the payments in lieu of franchise taxes were invalid. The plaintiffs concede that if a franchise tax were levied against a private utility, based on a percentage of gross receipts, and if the utility's rates were then lawfully increased, the Hancock Amendment would not require a rollback. They likewise concede that the rate of a municipal sales tax would not have to be adjusted simply because the tax were found to generate more revenue than in past years. The purpose which appears in the whole plan of utility operations is to place municipal utilities on the same basis as investor-owned utilities. A public utility, whether investor or publicly owned, requires a franchise to operate. Franchises, in addition to awarding monopoly, also regularly permit the use of public property, including streets, for the location, maintenance and repair of the utility's distribution facilities. A franchise tax is designed, in part at least, to repay the municipality for inconvenience and expense attending the use of public property. [14] It is fairly inferable that the payments made by the Hannibal Board of Public Utilities were designed to make similar compensation to the city. Were it not for the payments in lieu of franchise tax it would be appropriate for the city to levy a charge against the Board of Public Utilities for the fair value of the use of public property, including provision for maintenance and repair on account of wear, tear and damage attributable to the utility. Inasmuch as the payments do not fall within the compass of tax, license or fees, there is no ground for applying the rollback provisions triggered by a broadening of the base for a tax, license, or fees. Here too the language of the amendment simply does not fit the facts before us. There is absolutely no showing that the basic rate increase was occasioned by anything other than a good faith determination by the board that the increase was necessary to a sound operation. The utility operation, the setting of rates by the board, and the payments in lieu of franchise tax, are all long established and should not be lightly disturbed. We need not speculate further except to say that the situation shown by this record simply does not fit Art. X, § 22(a) of the Missouri Constitution. The judgment finding violation of Art. X, § 22(a) is reversed. This reversal destroys the basis for fees and so that portion of the judgment allowing fees is likewise reversed. The balance of the judgment is affirmed. RENDLEN, C.J., and WELLIVER, HIGGINS, GUNN and DONNELLY, JJ., concur. BILLINGS, J., dissents in separate opinion filed. BILLINGS, Judge, dissenting. The principal opinion squarely recognizes there is a question of jurisdiction for this Court to entertain this appeal under Art. V, § 3, of the Missouri Constitution, but, nevertheless, concludes that because the parties have come here in good faith to brief and argue the case, we elect to assume jurisdiction, relying upon Foremost-McKesson, Inc. v. Davis, 488 S.W.2d 193 (Mo. banc 1972). The jurisdiction of this Court is carefully delineated to certain specifically described classes of cases and the instant appeal falls beyond the narrow scope of our jurisdiction as found in the Constitution. Consequently, jurisdiction of this appeal is in the court of appeals and we should not, under the guise of the general interest and importance rubric found in Foremost-McKesson, reach out to take or elect to assume jurisdiction of appeals which the Constitution directs elsewhere. To do so, in my view, flies in the face of the clear provisions of the Constitution we are charged with following. The fact that we are the court of last resort does not and should not give us that license. I would transfer the appeal to the court of appeals as provided by Art. V, § 11, Mo.Const.