Court Opinion

ID: 9669747
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:08:52.16465+00
Date Added: 2024-06-11T18:16:00.075249
License: Public Domain

SNELL, Justice
(dissenting).
I respectfully dissent.
Section 12, Senate File 2370, Laws of the Seventy-Sixth General Assembly, is unconstitutional under the Iowa Constitution. I believe that the intent of section 12 is not to promote energy efficiency but rather is to bar rate-regulated gas and electric public utilities from providing nonutility services to their customers, which had meant a cost savings to their customers. The effect of this legislation is not to provide a level playing field for businesses in the appliance repair and service industry but to eliminate the competition of regulated public utilities.
I. Background Facts and Procedures
UtiliCorp United, Inc., plaintiff, d/b/a Peoples Natural Gas, provides numerous Iowa customers, primarily in small municipalities, with utility services. In addition, UtiliCorp offers its utility customers nonutility services in the form of an appliance repair arid protection plan called Service Guard. UtiliCorp uses its employees and equipment to perform these nonutility services.
On May 20, 1996, Governor Terry Bran-stad signed into law, effective July 1, 1996, Senate File 2370 entitled, “An Act relating to energy efficiency programs, electric and gas public utility energy efficiency mandates, and the Iowa energy center and the center for global and regional environmental re-search_” 1996 Iowa Acts ch. 1196. At issue is section 12 of the Act which amends Iowa Code section 476.78 entitled, “Cross-subsidization prohibited.” Prior to the amendment, the section provided, “A rate-regulated gas or electric public utility shall *457not directly or indirectly include any costs or expenses attributable to providing nonutility service in regulated rates or charges.” Iowa Code § 476.78 (1995). Section 12 adds, in part:
Except for contracts existing as of July 1, 1996, a rate-regulated gas or electric public utility or its affiliates shall not use vehicles, service tools and instruments, or employees, the costs, salaries, or benefits of which are recoverable in the regulated rates for electric service or gas service to install, service, or repair residential or commercial gas or electric heating, ventilating, or air conditioning systems, or interior lighting systems and fixtures....
Id. § 476.78 (1997).
On June 7, 1996, UtiliCorp filed a complaint in the United States District Court for the Southern District of Iowa seeking a declaratory judgment, a preliminary injunction, and other relief, naming Governor Branstad and the Iowa Utilities Board (IUB) as defendants. UtiliCorp sought, among other things, a declaration that section 12 is unconstitutional under various provisions of the United States and Iowa Constitutions. Subsequent to certification to this court, Utili-Corp dismissed Governor Branstad as a defendant. Upon the request of both parties, Judge Harold Vietor certified the following three questions on July 31,1996:
(1) Does Section 12 of Senate File 2370 violate the single-subject and title requirement of Article III, Section 29 of the Iowa Constitution?;
(2) Do the classifications contained in Section 12 of Senate File 2370 violate the privileges and immunities clause of Article I, Section 6 of the Iowa Constitution?; and
(3) Does Section 12 of Senate File 2370 constitute a “special law” in violation of Article III, Section 30 of the Iowa Constitution?
UtiliCorp argues section 12 violates (1) the single-subject requirement because it is unrelated to the remainder of the Act, which concerns energy efficiency, the Iowa Energy Center, and the Center for Global and Regional Environmental Research, and (2) the title requirement because the Act’s title does not give fair notice that it implicates the ability of gas or electric public utilities “to install, service, or repair residential or commercial gas or electric” systems. UtiliCorp further argues section 12 violates the privileges and immunities clause because it classifies utilities supplying gas and electricity from those that do not, and this classification is not rationally related to the stated purpose of the Act, ie., to improve energy efficiency. Additionally, because this classification is not rationally related to energy efficiency, Utili-Corp argues section 12 constitutes a “local or special law.”
The IUB contends that the alleged benefits of the Service Guard program and any alleged hardship imposed upon UtiliCorp and its customers by restricting the Service Guard program are irrelevant to the constitutionality of section 12. The IUB argues the single-subject and title requirements are not violated because the limitations imposed on the involvement of public utilities in the sale, service, repair, or installation of heating, cooling, and lighting systems are the “cornerstone of energy efficiency.” It further asserts the privileges and immunities clause is not violated and section 12 does not constitute a special law because limitations on rate-regulated gas and electric utilities promote a legitimate state interest, and section 12 only adds additional limitations to the classification previously established in section 476.78.
In its amicus curiae brief, the attorney general reiterates and joins in many of the arguments set forth by the IUB. The attorney general points out that Senate File 2370 amends only chapter 476, which regulates public utilities, and no other chapters of the Iowa Code. The brief also tracks the Act through the legislative process to illustrate that section 12 was not “slipped into” the bill unbeknownst to legislators.
II. Single-Subject Requirement
Article III, section 29 of the Iowa Constitution states:
Every act shall embrace but one subject, and matters properly connected therewith; which subject shall be expressed in the title. But if any subject shall be embraced *458in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be expressed in the title.
Iowa Const, art. Ill, § 29.
This provision has two distinct components: the single-subject requirement and the title requirement. In Western International v. Kirkpatrick, 396 N.W.2d 359 (Iowa 1986), we set forth the principles and underlying cases that are instructive in applying this constitutional provision. We said:
General rules for analyzing whether an enactment relates-to more than one subject can be found in Long v. Board of Supervisors, 258 Iowa 1278, 142 N.W.2d 378 (1966). Two subjects may not be covered by one act unless the subjects can be considered related to or connected with one another. Id. at 1283, 142 N.W.2d at 381. The constitutional provision is to be given a liberal construction. Id. It is unimportant that matters within the single subject might more logically be classified as separate subjects if they are nevertheless germane to a single subject. Id. The “one subject” rule is in place to prevent logrolling and to facilitate orderly legislative procedure. Id.; see Green v. City of Cascade, 231 N.W.2d 882, 886 (1975).
Western Int’l, 396 N.W.2d at 364.
The single-subject provision requires a showing that all subjects within the act relate to a single purpose. Miller v. Bair, 444 N.W.2d 487, 489 (Iowa 1989). This provision keeps legislators informed of pending bills and alerts citizens as to the subjects under consideration by the legislature. See Giles v. State, 511 N.W.2d 622, 625 (Iowa 1994) (stating that the purpose of the single-subject requirement is to provide reasonable notice to lawmakers and the public to prevent fraud and surprise); State v. Mabry, 460 N.W.2d 472, 473 (Iowa 1990) (noting the threefold purpose of the single-subject requirement: to prevent logrolling, to adequately inform legislators of pending legislation, and to fairly inform citizens of subjects the legislature is considering).
To pass constitutional muster, all matters contained in the act must be germane. To be germane, “ ‘all matters treated [within the act] should fall under some one general idea and be so connected with or related to each other, either logically or in popular understanding, as to be part of ... one general subject.’ ” Mabry, 460 N.W.2d at 474 (quoting Long, 258 Iowa at 1283, 142 N.W.2d at 381).
Section 12 of Senate File 2370 amended Iowa Code section 476.78, a section in Iowa Code chapter 476, which addresses public utility regulation. UtiliCorp argues that the language in section 12, under the heading “Cross-subsidization prohibited,” is entirely unrelated to the energy efficiency subjects found in the remainder of the Act and referenced in the title. The other sections of the Act concern energy efficiency, the Iowa Energy Center and the Center for Global and Regional Environmental Research, as the title suggests.
UtiliCorp argues that section 12, in contrast, relates only to the ability of gas and electric public utilities to install, service, and repair gas and electric heating, ventilating, and air conditioning systems, and interior lighting systems and fixtures. It asserts that the subject of competition is not germane and bears no reasonable connection or relation to the purpose or ultimate objective of the Act, promoting energy efficiency. UtiliCorp claims that section 12 is in reality an anti-competition law that would effectively impede energy efficiency rather than promote it.
The IUB argues that the sale, installation, and repair of heating, cooling, and air conditioning equipment are logically and popularly understood as relating to energy efficiency. Left unanswered by the IUB, however, is how the restrictions on the provision of those services to consumers by regulated gas and electric public utilities promote energy efficiency.
The attorney general filed an amicus curiae brief for the reason that our interpretation of the single-subject provision in the Iowa Constitution may affect other acts passed by the General Assembly and is therefore of general concern to the state. Joining the arguments of the IUB, the attorney general claims that the single-subject *459provision is not violated because the general subject of Senate File 2370 is the regulation of public utilities and the prohibition in section 12 is connected with that general subject. Reliance is placed on our decision in Miller v. Bair, in which we rejected a single-subject challenge to a mammoth bill containing wide-ranging provisions. Miller, 444 N.W.2d at 489-90. We rejected the argument that each matter in a bill must be similar and clearly related to the other matters contained within the bill. A bill can contain separate subjects if they are germane to a single subject or relate to a single purpose. The attorney general also cites State v. Iowa District Court, 410 N.W.2d 684, 687 (Iowa 1987), which stated that we will look behind specific provisions of the act to find a general subject. The attorney general claims that because every section of Senate File 2370 relates to the regulation of utilities, the single-subject requirement is satisfied.
UtiliCorp challenges the broad brush strokes painted on the single-subject provision by the IUB and the attorney general. It argues the subject of the bill is energy efficiency, not energy or utilities or regulation of utilities. Renaming the title, Utili-Corp argues, does not satisfy the Constitution.
Both the IUB and the attorney general admit that section 12 restricts competition by placing restrictions on rate-regulated gas and electric utilities in order to level the playing field with other Iowa contractors. Without these restrictions, they argue, these utilities would take advantage of the energy efficiency programs offered to their customers and would lure appliance business away from their competitors. This convoluted argument appears to suggest that the single-subject requirement is met in this case by the restriction of competition in a bill that on its face relates to energy efficiency.
I do not believe the constitutional provision limiting legislative enactments to a single subject admits of the breadth of construction urged by the IUB and the attorney general. Were the provision that loose, little imagination would be required to fit any legislation under such a big tent. The function of the single-subject requirement would be swept away by general terms and uninformative language. Nor can the crafting of a warehouse label of ill-defined scope be excused by our principle of liberal construction for a statute that violates the Iowa Constitution’s single-subject requirement.
Article III, section 29 of the Iowa Constitution is violated if all provisions of the statute do not relate to the subject addressed in the title. We said in Lee Enterprises, Inc. v. Iowa State Tax Commission, 162 N.W.2d 730 (Iowa 1968):
It is sufficient if all the provisions relate to the one subject indicated in the title and are parts of it or incidental to it or reasonably connected with it or in some reasonable sense auxiliary to the subject of the statute.
Lee Enters., 162 N.W.2d at 737 (quoting State v. Talerico, 227 Iowa 1315, 1322, 290 N.W. 660, 663 (1940)).
The subject which can be gleaned from the title of Senate File 2370 is the promotion of energy efficiency and the reduction of demand for nonrenewable energy resources. The subject of section 12, however, is the elimination of competition by rate-regulated gas and electric utilities. This subject is not connected with the subject indicated by the title of Senate File 2370. The IUB and the State suggest the subject indicated by the title is the regulation of public utilities. The title, however, does not include any words ■regarding public utility regulation. Thus, there are no words' in the title indicating so broad a subject. The State and the IUB attempt to derive the subject from the provisions of the Act. This is not the method indicated by our prior cases. Furthermore, allowing such a method to be utilized would allow the State to craft a subject in hindsight tailored to the matter being litigated. Such leeway in interpretation would eviscerate the single-subject requirement and is contrary to our prior holdings. I believe that section 12 of Senate File 2370 is void as a violation of the single-subject requirement of the Iowa Constitution articleTII, section 29.
III. Title Requirement
In addition to the single-subject requirement, article III, section 29 commands that *460the subject of the act be embraced in the title. While legislation is given a presumption of constitutionality, the purpose of the title requirement must not be frustrated. State v. Nickelson, 169 N.W.2d 832, 834, 837 (Iowa 1969). In Western International v. Kirkpatrick, we outlined the law on this provision as follows:
• While this legislation is given the benefit of a presumption of constitutionality, State v. Nickelson, 169 N.W.2d 832, 834 (Iowa 1969), we must insure the purpose of the title requirement is not frustrated. The purpose of the requirement is to guarantee that reasonable notice is given to legislators and the public of the inclusion of provisions in a proposed bill; thus it is said to prevent surprise and fraud. Long v. Board of Supervisors, 258 Iowa at 1284, 142 N.W.2d at 381....
A title is sufficient, even though it is broad, if it gives fair notice of a provision in the body of an act. [Chicago, Rock Island & Pac. R.R. Co. v. Streepy, 207 Iowa 851, 856, 224 N.W. 41, 43 (1929).] The enactment is constitutionally valid as to the title unless matter utterly incongruous to the general subject of the statute is buried in the act. Witmer v. Polk County, 222 Iowa 1075, 1085, 270 N.W. 323, 328 (1936). In State v. Talerico, 227 Iowa 1315, 1322, 290 N.W. 660, 663 (1940), we stated, “[T]he title need not be an index or epitome of the act or its details. The subject of the bill need not be specifically and exactly expressed in the title.” The title must, however, give fair notice of the act’s subject and it must not deceive its reader. See State v. Nickelson, 169 N.W.2d at 834; N. Singer, Sutherland Statutory Construction § 18.10 (C. Sands 4th ed. 1985) (Generality of the title is not reason enough, to strike the act unless the title is misleading or deceptive.). “In determining the sufficiency of a title, courts examine whether anyone reading the title of an act could reasonably assume that the reader would be apprised of all of its material provisions.” 1984 Op. Iowa Att’y Gen. 173.
Western Int’l, 396 N.W.2d at 365.
The IUB and the attorney general argue the statute should be upheld, stating that the title does not have to be an index of the bill. See Green v. City of Mt. Pleasant, 256 Iowa 1184, 1199, 131 N.W.2d 5, 15 (1964) (stating that it is not necessary for the title of an act to function as an index of the details of the act). They point to the dates of March 27, 1996, when the language in section 12 was filed, and May 1, 1996, when the bill passed both houses, to show the bill was not log-rolled or slipped through at the last minute. With the history of the bill and its numerous amendments as support, the IUB and the attorney general claim the legislators were not deceived or misled by the bill’s title. They argue the subject matter of section 12 is not “utterly incongruous” as related to the subject of energy efficiency and energy efficiency mandates. Finally, they claim that the title requirement is merely procedural; it does not protect substantive rights of citizens versus government.
I believe that the subject matter of section 12 is clearly the prohibition of competition by regulated gas and electric companies in the area of appliance service and repair. Section 12 may be deemed to be fairly well buried in the Act. But of greater moment is that this subject matter is utterly incongruous to the general subject matter of energy efficiency found in the title of Senate File 2370. The title contains no words or statement regarding public utility regulation. Nothing in the title gives the reader fair notice that the bill includes an anti-competition section. Without fair notice, the reader is deceived by the title as to the contents of the bill. Nothing in the title remotely apprises the reader to expect the inclusion of an anti-competition provision.
Through its Service Guard program, Utili-Corp provides repair and protection for a customer’s furnace, water heater, stove, clothes dryer, and other appliances. The customer pays a monthly fee for these services. UtiliCorp is able to provide these services during its downtime, when it is not doing utility work that is rate regulated. UtiliCorp is not permitted under the law prior to the passage of section 12 to pass on to its customers the costs attributed to pro*461viding nonutility services in its regulated rates or charges. Iowa Code § 476.78.
Section 12 that amends Iowa Code section 476.78 now prevents UtiliCorp and other rate-regulated gas and electric public utilities from using their vehicles, equipment, and employees to provide nonutility services to their customers. The obvious result is that section 12 eliminates these public utilities as an economic competitor for this work. Nothing in the title of Senate File 2370 suggests this legislative result.
The constitutional restriction regarding titles is not satisfied by a showing that some legislators knew of the provision or that the time between introduction of the bill and passage was reasonably long. Nor is the constitutional requirement fulfilled by showing that legislators were not misled. The true standard is objective — whether, from the title, the content of the legislation is indicated, so that a reasonable person, legislator or nonlegislator, reading the title, would anticipate that the questioned legislation is included. See National Benefit Accident Ass’n v. Murphy, 222 Iowa 98, 105-06, 269 N.W. 15, 19 (1936).
In applying the criteria set forth in our prior cases for determining the constitutional sufficiency of the title of legislation, I conclude that section 12 fails to pass each of the aforementioned tests. Section 12 of Senate File 2370 should be held to be void as being unconstitutional legislation by reason of violating the title requirement of article III, section 29 of the Iowa Constitution.
IV. Given my views that the single-subject requirement and the title requirement of the Iowa Constitution have been violated by section 12, Senate File 2370, additional constitutional challenges by UtiliCorp need not be addressed.
CARTER and LAVORATO, JJ., join this dissent.
TERNUS, J., joins in Division III of this dissent.