Court Opinion

ID: 9759143
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:07:04.546296+00
Date Added: 2024-06-11T07:28:59.744469
License: Public Domain

DONNELLY, Judge,
dissenting.
It is imperative that the constitutionality of § 137.016.1(1)1 be resolved only after a close examination of the history of property classification in Missouri. As this Court recently noted in Metal Form Corp. v. Leachman, 599 S.W.2d 922, 925 (Mo. banc 1980),
[T]here was no right to classify property for tax purposes before adoption of the 1945 Constitution. Art. X, § 4 of the 1875 Constitution provided that “[A]ll property subject to taxation shall be taxed in proportion to its value.” That provision was interpreted in several cases by this court to place all taxable property into a single class and to prohibit the legislature from dividing the property into different classes for purposes of taxation, [citations omitted]
Missouri was one of the last states to adopt some form of property classification when it added art. X, § 4(a) to the Constitution in 1945. Art. X, § 4(a)2, permitted classification for tax purposes as follows:
All taxable property shall be classified for tax purposes as follows: class 1, real property; class 2, tangible personal property; class 3, intangible personal property. The general assembly, by general law, may provide for further classification within classes 2 and 3, based solely on the nature and characteristics of the property, and not on the nature, residence or business of the owner, or the amount owned.... [emphasis added]
Furthermore, § 4(b) of the 1945 Constitution provided:
Property in classes 1 and 2 and subclasses of class 2 shall be assessed for tax purposes at its value or such percentage of its value as may be fixed by law for each class and for each subclass of class
*9232. Property in class 3 and its subclasses shall be taxed only to the extent authorized and at the rate fixed by law for each class and subclass, and the tax shall be based on the annual yield and shall not exceed eight per cent thereof.
In 1982, § 4(b) was amended in a special election by adding the following:
Property in class 1 shall be subclassed in the following classifications:
(1) Residential property;
(2) Agricultural and horticultural property;
(3) Utility, industrial, commercial, railroad, and all other property not included in subclasses (1) and (2) of class 1.
Property in the subclasses of class 1 may be defined by law, however subclasses (1), (2), and (3) shall not be further divided, provided, land in subclass (2) may by general law be assessed for tax purposes on its productive capability....
Article X, § 4, by the use of a classification scheme, was the culmination of many years of effort to achieve equality in taxation among the various types of property. This section was thought of as “the most important section” of Article X because of the prior inequities in the Missouri tax system. Transcript of the Debates of the Missouri Constitution 1945, p. 7471 (hereinafter Debates). Before the adoption of § 4(a), the burden of financing local governments in this State fell squarely on the shoulders of real property owners. The importance of this section was also exemplified by the separate consideration and lengthy discussion it was given in the constitutional convention. However, a statement of the ultimate goal of the framers does not provide any answers to the questions raised by the legislature’s attempt to statutorily distinguish between residential and commercial property as is suggested by the principal opinion.
It is a well-established rule that constitutional provisions must be construed as a whole so as not to destroy the general intent and purpose of the framers. State at the Information of Martin v. City of Independence, 518 S.W.2d 63, 66 (Mo.1974). In doing so, it is permissible to consult the proceedings and debates of the framers. Leachman, supra, at p. 926. Moreover, this Court must give due regard to the primary objectives of the provision under scrutiny as viewed in harmony with all related provisions, considered as a whole, Roberts v. McNary, 636 S.W.2d 332, 335 (Mo. banc 1982). Thus § 4(b) must be harmonized consistent with § 4 as a whole.
In the 1943-44 constitutional convention, the debate over property classification centered on this question: To which classes of property would certain restrictive language in § 4(a) apply? This language was commonly referred to as the “Shepley Amendment.” 3 Essentially, it provides that legislative classification of tangible and intangible personal property is limited to the “nature and characteristics of the property," and does not extend to the incidents of ownership.
The original committee report expressly applied the restrictions to all three classes of property, but later the restrictions were removed as to class 1. The framers gave several reasons for not expressly applying the restrictions of § 4(a) to the real property class. Perhaps the most important reason was an explicit fear that if real property classification was attempted by the legislature, there would be an “internal war” and particular properties would be singled out for inequitable treatment as a consequence. For example, “the brewer was afraid they would pick out the brewers’ real estate. The railroad was afraid [they] would pick out the railroads’ real estate. Some apartment owners were afraid [they] would pick out apartment build-ings_” (Emphasis added.) Debates, p. 6305-06.
Another reason, as expressed by the author of the amendment, was that there was really no need for real property subclassifi-
*924cation in Missouri as evidenced by the experiences of other states which had adopted similar classification systems. Mr. Shepley stated:
[W]e could find in Missouri, no other state where the subclassification of real estate has amounted to very much. There doesn’t seem to be very much justification for it because all real estate is dependent upon the services of local government. That varies with personal properly depending upon the type of personal property and there is justification for distinguishing between those that require more than those that require the less service.
Debates, p. 6309.
The final reason given was that it was unnecessary to further apply the restrictions of § 4(a) because it was believed that the courts of this State would never “permit a classification to be based upon ownership or owned property.” Debates, p. 6311.
The principal opinion does not, and cannot, deny that art. X, § 4(b) contains no basis for “defining by law” which property falls within the subclasses of class 1. The only baseline is contained in art. X, § 4(a): “The general assembly, by general law, may provide for further classifications ... based solely on the nature and characteristics of the property, and not on the nature, residence or business of the owner, or the amount owned.” Id. The constitutional debates are unequivocal reference whether this standard would have applied to class 1 property. Debates, pp. 6305-06. Constitutional provisions speaking to the same subject, here classifications for tax assessment, must be construed as a whole. What the principal opinion holds, essentially, is that the legislature of this State may accomplish by referendum what is prohibited by the product of constitutional convention.
In my view, only agricultural and horticultural property in subclass (2) may be assessed on its productive capability under § 4(b). The principal opinion misconstrues § 4(b) and holds, in effect, that residential property in subclass (1) “may by general law be assessed for tax purposes on its productive capability.”
Those provisions of § 137.016.1 which define the type of real property at issue in terms of the owner’s business and the amount owned are unconstitutional and should be excised.
I respectfully dissent.

. As used in § 4(b) of art. X of the Missouri Constitution, the following terms mean:
(1) “Residential property,” all real property improved by a structure which is used or intended to be used for residential living by human occupants and which contains not more than four dwelling units or which contains single dwelling units owned as a condominium or in a cooperative housing association.

. Art. X, § 4(a) remains unchanged today.

. “The general assembly by general law, may provide for further classification within classes 2 and 3, based solely on the nature and characteristics of the property, and not on the nature, residence or business of the owner, or the amount owned_”