CIBA GEIGY CORPORATION ICI v. TOWN OF ST GABRIEL GRACE (1999)

This suit arises out of the approval of a 1% sales-and-use tax in a special election by the registered voters of the town of St. Gabriel in Iberville Parish.   The passage of this tax brought the aggregate local sales-and-use tax within the incorporated limits of St. Gabriel to 4-2/3%, and appellants contend the 1996 tax violates the statutory 4% maximum imposed on sales-and-use taxes.

Prior to the passage of the 1996 tax, Iberville Parish adopted a 2% sales-and-use tax ¹ and the School Board adopted a 1-2/3% sales-and-use tax.²  Therefore, the aggregate sales-and-use tax being collected by Iberville Parish and School Board prior to 1996 was 3-2/3%.   In 1994, St. Gabriel became an incorporated municipality of Iberville Parish.   On July 20, 1996, the special election in question was held by St. Gabriel to pass a 1% sales-and-use tax under the authority of article 6, section 29(B), of the Louisiana Constitution and Louisiana Revised Statute 33:2711.   The municipal tax passed and was to become effective on October 1, 1996.   On September 26, 1996, nine chemical/industrial companies that operate in the municipal limits of St. Gabriel (plaintiffs) ³ filed a petition for declaratory judgment against the Town of St. Gabriel (defendant),⁴ the Parish of Iberville,⁵ and the Iberville Parish School Board.⁶  Plaintiffs contend the 1996 tax caused the aggregate tax within the incorporated limits of St. Gabriel to be 4-2/3%, which violates the statutory limits of 4%. Plaintiffs and all the defendants filed cross-motions for summary judgment.   On December 11, 1997, the trial court granted defendants' motions for summary judgment, finding the 1996 tax was lawful under the constitution and the applicable statute.⁷  Plaintiffs have appealed.

Plaintiffs assert five assignments of error, stating the trial court erred:  1) by holding Revised Statute 33:2711(A)(2) authorizes defendant to levy and collect a sales-and-use tax, the rate of which, when combined with all other parish taxes, exceeds 4%  exclusive of state taxes;  2) by failing to find that 33:2721.6(A)(2) prohibits the levy of sales-and-use taxes when they are combined with the rates of all other sales-and-use taxes charged within any parish or municipality would exceed 4%;  3) by failing to interpret 33:2711(A)(2), 33:2721.6, and Constitution articles 29(A) and 29(B) in a light favorable to the taxpayers for the language, read in pari materia, provides a 4% limitation on sales-and-use taxes levied by all political subdivisions within plaintiffs' incorporated area;  4) by granting municipalities greater taxing authority than that enjoyed by local political subdivisions;  and 5) by failing to give effect to certain words and phrases in sections 33:2711(A)(2) and 33:2721.6 that limit the combined rate levied within St. Gabriel to 4%.

ARGUMENT

 The sole issue before us is whether there is a statutory 4% aggregate limit on the amount of sales-and-use taxes a local political subdivision can levy, exclusive of state taxes, absent legislative approval.   Plaintiffs contend the 1996 municipal tax approved by the residents of St. Gabriel, which increased the aggregate sales-and-use tax to 4-2/3%, is unconstitutional because it exceeds 4%.

Article 6, section 29(A), of the Louisiana Constitution authorizes local governmental subdivisions and school boards to levy sales-and-use taxes.⁸  Section 29(A) states the authorized taxes “shall not exceed three percent.”   However, under section 29(B) additional sales taxes may be authorized with approval by the legislature and a majority of the electors voting.⁹  Then, in 1981, the legislature authorized any municipality to levy an additional 1% sales-and-use tax when it amended Revised Statute 33:2711.¹⁰  In 1984, the legislature authorized parishes and school boards to  levy an additional sales-and-use tax under 33:2721.6(A)(1).¹¹  Revised Statute 33:2721.6(A)(2) limited the authorized sales-and-use taxes a parish, municipality, or school board could levy to a maximum of 4%.¹²

 This action came before the trial court by cross-motions for summary judgment.   Appellate courts are to review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate.  Louisiana Code of Civil Procedure article 966 provides in pertinent part:

A. (2) The summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of every action, except those disallowed by Article 969.   The procedure is favored and shall be construed to accomplish these ends.

B. The motion for summary judgment and supporting affidavits shall be served at least ten days before the time specified for the hearing.  ․ The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.

The burden of proof is upon the mover for summary judgment to show that no genuine issue of material fact exists, and only when reasonable minds must inevitably conclude that mover is entitled to judgment as a matter of law is summary judgment warranted.¹³

The trial court found the 1996 tax was lawful under the Louisiana Constitution and the applicable Louisiana statutes as a matter of law.   Defendant contends while 33:2721.6 sets a 4% limit, by its own terms, it applies only to parishes and school  boards, “In addition to any other authority granted by ․ the governing authority of any parish or school board may levy and collect an additional tax ․,” and that 33:2721.6 does not apply to municipalities.   Further, defendant maintains 33:2721.6 does not allow additional taxes under its authority if a parish or municipality has already exceeded the 4% limit;  however, it does not require parishes or school boards to reduce levies because another taxing entity adopts a tax under some separate legislative authority.

Revised Statute 33:2721.6(A)(2) explicitly states:  “The [sales-and-use-tax] rate thereof, when combined with the rate of all other sales and use taxes ․ within any parish or municipality, shall not exceed four percent.”   (Emphasis added.)  Article 6, section 29(B) of the Louisiana Constitution provides a solution for those political subdivisions that desire to have their taxes exceed the authorized limitation, which is to obtain legislative consent.¹⁴  Defendant presented evidence showing several municipalities' taxes are in excess of the 4% limitation and many have not acquired legislative approval.   While this argument is interesting, we are bound by the express provisions of the law as dictated by the legislature, which does not allow for sales-and-use taxes in excess of 4%. Therefore, the municipal tax created by the July 20, 1996, special election is unlawful since it exceeds the maximum limit for sales-and-use taxes set by the provisions of Revised Statute 33:2721.6.

For the foregoing reasons, the judgment of the trial court, granting summary judgment in favor of defendant and dismissing plaintiffs' suit, is hereby reversed, and the matter is remanded for further proceedings consistent with this opinion.   Costs of this appeal are assessed to defendant.

REVERSED AND REMANDED.

I respectfully disagree with the majority opinion and submit that the decision of the trial court should be affirmed.

LSA-Const. Art. 6, § 29 allows the legislature to authorize the imposition of sales and use taxes by local government subdivisions (if approved by a majority of the electors voting thereon).

LSA-R.S. 33:2711 clearly authorizes municipalities (except in certain parishes) to authorize an additional one percent sales or use tax pursuant to Art. 6 § 29B of the Louisiana Constitution.   The act clearly provides that this sales and use tax shall be in addition to all other sales and use taxes that the municipality is authorized to levy.

I believe that LSA-R.S. 33:2721.6 limits the authority of parish government bodies and school boards, but not municipalities.   The provision of Section A(2) “within any parish or municipality, shall not exceed four percent,” in my opinion, is not a limit on municipalities, but is only a limit on a parish governing body or school board.   This is further demonstrated by the following language of the statute which provides, “Any parish or school board levying or presently authorized to levy an additional sales and use tax which exceeds the four percent level described above shall not be authorized by this Section to levy an additional sales tax.”   Clearly, municipalities are not prevented from exceeding the four percent level.

The majority finds ambiguity when I respectfully submit that there is none.   LSA-R.S. 33:2711 is clear as written and allows the assessment of the one percent sales tax by the municipality.  LSA-R.S. 33:2721.6 limits the authority of parish government bodies and school boards (but not municipalities) to a sales and use tax of a combined total of four percent.

I respectfully concur in the result reached by the majority, add these observations and assign additional reasons.

The concept of separation of powers provides that each branch of government has certain powers and duties.   Elementary civics lessons teach that our system of government is divided into three branches-the executive branch which enforces the law, the legislative branch which enacts the law, and the judicial branch which interprets the law.

The Louisiana Constitution recognizes the concept of separation of powers:

The powers of government of the state are divided into three separate branches:  legislative, executive, and judicial.  La. Const. art. II, § 1.

Except as otherwise provided by this constitution, no one of these branches, nor any person holding office in one of them, shall exercise power belonging to either of the others.  La. Const. art. II, § 2.

The judicial power is vested in a supreme court, courts of appeal, district courts and other courts authorized by this Article.  La. Const. art. V, § 1.

 Subsequent to the lodging of the appeal in this matter, two identical simple resolutions ² were passed-one by the House of Representatives and the other by the Senate.   These simple resolutions address the legislative intent relative to the statutory provisions at issue in this appeal-LSA-R.S. 33:2711(A)(2) and 33:2721.6.³

At oral argument, counsel for the plaintiffs/appellants acknowledged these resolutions were enacted at the request of the plaintiffs and also acknowledged his firm consulted with those who prepared the resolutions.   Plaintiffs' counsel argued in supplemental brief that these simple resolutions “provide evidence of the Legislature's intent when enacting LSA-R.S. 33:2711(A)(2) and LSA-R.S. 33:2721.6.”

Counsel for the Town of St. Gabriel asserted, at oral argument, the town had no knowledge the resolutions were being introduced and argued in brief the resolutions were “solicited by Appellants at the eleventh hour of the 1998 Legislature for the sole purpose of influencing the outcome of this litigation.”

The existence of these resolutions cannot be ignored and the impact of these resolutions on this court's decision must be addressed.

In State Licensing Board of Contractors v. State Civil Service Commission, 110 So.2d 847 (La.App. 1 Cir.1959), affirmed, 240 La. 331, 123 So.2d 76 (1960), the court addressed a concurrent resolution, adopted by both chambers of the legislature in 1958, with full knowledge of pending litigation, declaring the legislative  intent as to a 1956 Act. With Judge, later Justice, Albert Tate, Jr. as the author of the opinion, the court commented that the concurrent resolution was unconstitutional as an encroachment upon the constitutional power of the judiciary to construe and interpret existing legislation.   The court specifically stated:  “[I]t is not within the constitutional province of the legislature thuswise to construe earlier enactments involved in litigation.”  Id. at 850.

The term “judicial power” used in Article V, § 1, of the Louisiana Constitution is not defined.⁴  Clearly, judicial power includes the power to interpret the law.   See Marbury v. Madison, 1 Cranch 137, 5 U.S. 137, 2 L.Ed. 60 (1803).   See State v. Peart, 621 So.2d 780, 790 (La.1993), citing St. Paul Fire & Marine Insurance Company v. Smith, 609 So.2d 809, 822 (La.1992) (Dennis, J. concurring), which stated by virtue of the courts' constitutional position, the courts are the “final arbiter of the meaning of the state constitution and laws.”   See also State, Department of Highways v. Constant, 359 So.2d 666, 671 (La.App. 1 Cir.1978), amended and affirmed on other grounds, 369 So.2d 699 (1979).

Allowing a simple resolution regarding legislative intent to influence pending litigation would establish a dangerous precedent.   Should one who can influence the legislature to enact a resolution which favors his position prevail in on-going litigation?   Enacting resolutions to define the legislative intent is problematic.   Should not legislation be written with sufficient clarity that citizens can manage their endeavors without resort to considering subsequent resolutions which advise what was intended?

The Civil Code provides that “[t]he sources of law are legislation and custom.”  LSA-C.C. art. 1. “Legislation is the solemn expression of legislative will.”  LSA-C.C. art. 2. When there is no rule for a particular situation to be derived from legislation or custom, a court is bound to proceed according to equity which means to resort to justice, reason, and prevailing usages.  LSA-C.C. art. 4. The legislature has enacted  provisions which provide the courts with guidance in interpretation of laws.   See Chapter 2 of Preliminary Title of the Louisiana Civil Code titled “Interpretation of Laws” and Chapter 1 of Title 1 of the Revised Statutes titled “Interpretation of Revised Statutes.”

Louisiana Civil Code art. 9 states:

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 intent of the legislature.

Louisiana Revised Statutes 1:4 states:

When the wording of a Section is clear and free of ambiguity, the letter of it shall not be disregarded under the pretext of pursuing its spirit.

Thus, the legislative branch has enacted laws which provide that legislative intent should not be considered if the law is clear and unambiguous and does not lead to absurd consequences.

The courts should make every effort to apply the law as enacted.   When appropriate, legislative intent should be considered.   See LSA-C.C. art. 9 and LSA-R.S. 1:4.   Certainly, a resolution enacted by the legislature regarding intent can be persuasive in the appropriate circumstances.⁵  It is not the function of the judiciary to legislate.⁶  Conversely, it is not the role of the legislature to pass resolutions which are  then used to influence pending litigation.⁷

In sum, these simple resolutions, which by definition do not have the effect of law, were enacted at the request of those attempting to influence pending litigation and should not be considered.   To consider these resolutions would offend the constitutional concept of separation of powers.   To consider these resolutions would be unfair to all parties to this litigation.

As to the merits, in agreeing with the majority opinion, I am further influenced by the fact La. Const. art. VI, § 29(A) provides a three percent cap on sales and use taxes.  Section 29(B) allows exceeding the three percent tax cap provided there is legislative authorization and voter approval.   Taxing statutes must be construed strictly against the taxing authority.  Collector of Revenue v. Wells Fargo Leasing Corporation, 393 So.2d 1244, 1246 (La.1981).   Because Section 29(A) provides a three percent cap, any enactment which exceeds the three percent cap should be strictly construed.

FOOTNOTES

1.   The 2% parish police-jury tax includes a 1% tax pursuant to Louisiana Revised Statute 33:2721 passed in 1980;  a 1/3% tax pursuant to Constitution article 6, section 29(A) passed in 1985;  and a 2/3% tax pursuant to article 6, section 29(B) and Revised Statute 33:2721.6 in 1991.

2.   The 1-2/3% school board tax includes a 1% tax pursuant to Revised Statute 33:2737 in 1966, and a 2/3% tax pursuant to Revised Statute 33:2721.6 in 1991.

3.   The companies that brought the suit are Ciba-Geigy Corporation, Union Texas Products Corporation, Zeneca, Inc., The Iberville Group, L.L.C., Pioneer Chlor Alkali Company, Inc., ICI Americas, Inc., Air Products and Chemicals, Inc., Arcadian Fertilizer, L.P. and Fina Oil and Chemical Company.

4.   Through its mayor, George L. Grace.

5.   Through its police-jury president, Aldrich “Tudy” Dupree.

6.   Through its superintendent, Charles P. Bujol.

7.   The trial court also sustained the Parish's and the School Board's exceptions of no cause of action and prescription and dismissed these defendants with prejudice.

8.   Article 6, section 29(A), provides:Except as otherwise authorized in a home rule charter as provided for in Section 4 of this Article, the governing authority of any local governmental subdivision or school board may levy and collect a tax upon the sale at retail, the use, the lease or rental, the consumption, and the storage for use or consumption, of tangible personal property and on sales of services as defined by law, if approved by a majority of the electors voting thereon in an election held for that purpose.   The rate thereof, when combined with the rate of all other sales and use taxes, exclusive of state sales and use taxes, levied and collected within any local governmental subdivision, shall not exceed three percent.

9.   Section 29(B) provides:However, the legislature, by general or by local or special law, may authorize the imposition of additional sales and use taxes by local governmental subdivisions or school boards, if approved by a majority of the electors voting thereon in an election held for that purpose.

10.   Revised Statute 33:2711(A) provides:A.  Any incorporated municipality of the state is hereby authorized to levy and collect a sales and use tax not in excess of two and one-half percent as hereinafter set forth:(1) One and one-half percent as authorized by Act ․;(2) Except in those municipalities in [certain specified parishes not relevant to this proceeding] an additional one-percent sales and use tax, authorized by Article VI, Section 29(B) of the Constitution of Louisiana, which one-percent sales and use tax shall be in addition to all other sales-and-use taxes which any incorporated municipality is authorized to levy as of the effective date of this Act.

11.   Revised Statute 33:2721.6(A)(1) provides:In addition to any other authority granted by a home rule charter or otherwise, the governing authority of any parish or school board may levy and collect an additional tax upon the sale at retail, the use, the lease or rental, the consumption, and the storage for use or consumption of tangible personal property and on sales of services as defined by law if approved by a majority of electors voting therein in an election held for that purpose.

12.   Revised Statute 33:2721.6(A)(2) provides:The rate thereof, when combined with the rate of all other sales and use taxes, exclusive of state sales and use taxes levied and collected within any parish or municipality, shall not exceed four percent.   Any parish or school board levying or presently authorized to levy an additional sales and use tax which exceeds the four percent level described above shall not be authorized by this Section to levy an additional sales tax.

13.   La. C.C.P. art. 966(C)(2);  Allain-Lebreton Co. v. Exxon Corp., 95-1576, p. 8 (La.App. 1st Cir. 4/4/96), 694 So.2d 296, 301.

14.   The court takes note that several parishes, municipalities, and school boards have sought and received such approval.

2.   A simple resolution is defined by the Senate Desk Handbook as expressing “the will of one house of the Legislature only.   Does not require the Governor's signature and does not have the effect of law .”

3.   See Senate Resolution No. 42 of the 1998 Regular Session, adopted June 8, 1998, which states in part:“THEREFORE, BE IT RESOLVED that the Senate of the Legislature of Louisiana hereby expresses that its intent in enacting R.S. 33:2711(A)(2) was that the rate of the sales and use tax authorized by the cited provision when combined with the rate of all other sales and use taxes, exclusive of state and law enforcement district sales and use taxes, levied and collected within any parish or municipality shall not exceed four percent unless authorized by special legislative enactment.“BE IT FURTHER RESOLVED that this Resolution is not intended so as to affect any tax authorized by R.S. 33:2711(A)(2) which is conclusively presumed to be valid under Article VI, Section 29 of the Constitution of Louisiana.”See also House Resolution No. 58 of the 1998 Regular Session, which was adopted June 8, 1998, and contains virtually the same language.The official journals of the House of Representatives and the Senate indicate that on June 8, 1998, the rules were suspended and the resolutions were introduced and adopted.   The House Resolution was reported enrolled and signed by the Speaker of the House on June 9, 1998.   The Senate Resolution was reported enrolled and signed by the President of the Senate on June 10, 1998.   The legislative session adjourned June 10, 1998.

4.   See Keith Werhan, Normalizing the Separation of Powers, 70 Tul. L.Rev. 2681, 2684 (1995-1996).   Professor Werhan writes relative to the federal concept of separation of powers:  “The constitutional text usually is indeterminate with respect to important separation-of-powers disputes.   Notwithstanding (or perhaps because of) the multiple meanings of the separation-of-powers extant during the founding era, the Framers made no attempt to adopt a fixed, constitutional definition of the concept.   Nor did they define the terms ‘executive,’ ‘legislature,’ or ‘judicial’ when vesting those powers in the three branches of the national government.”

5.   See McNamara v. Central Marine Service, Inc., 507 So.2d 207, 210 (La.1987), where the court addressed a 1982 House Concurrent Resolution, passed by the Legislature, which indicated the intent of a 1959 Act. The court stated that while the resolution “is not controlling, for it is not for the Legislature to interpret or express an earlier Legislature's intent, it is persuasive.”

6.   See LaBauve v. Louisiana Wildlife and Fisheries Commission, 289 So.2d 150, 151 (La.1974), wherein the court wrote:  “Ever present as a basic precept of the judicial function is the elementary and fundamental proposition that the government of Louisiana is constituted as a tripartite system involving three coordinate branches or departments:  the executive, legislative and judicial.   Each branch to subserve the ends for which it is instituted must be separate, free and independent of the other.   The judicial department, therefore, does not, except for most weighty or grave reasons, interfere in the administration of the executive or legislative branches.   Abuse of these fundamental tenets is more likely to arise by judicial usurpation of the executive or legislative functions.   The design of government permits the judiciary to check the abuse of power by the executive or legislative branches.   However, no provision of the organic law enables other departments to limit the authority of the judiciary.   The sole limitation on the authority of the judiciary is the restraint its judges impose upon themselves.”  (Citations omitted.);   See also Konrad v. Jefferson Parish Council, 520 So.2d 393, 397 (La.1988), where the court stated:  “Because there is some inevitable overlap of the functions, each branch of government must strive to maintain the separation of powers by not encroaching upon the power of the others.   Consequently, the inherent powers of the judiciary should be used sparingly and only to the extent necessary to insure judicial independence and integrity.”  (Citation omitted.)   See also State v. Rome, 96-0991, p. 3 (La. 7/1/97), 696 So.2d 976, 978.

7.   State Licensing Board of Contractors v. State Civil Service Commission, supra;  See also City of New Orleans v. Louisiana Mutual Insurance Company, 1874, 26 La. Ann. 499 stating:  “To interpret laws is not within the powers of the General Assembly;  it is not a legislative, but a judicial function.”   See also Lanier v. Gallatas, 1858, 13 La.Ann. 175, 176, wherein the court encountered “a special act of the Legislature” purporting to impact a case pending before the Supreme Court.   The court diplomatically stated the following:The case had been submitted to us before the passage of the Act, and was beyond the legislative control.   Our respect for the General Assembly and the Executive forbids the inference that they intended to instruct this court what to do or not to do, whilst passing upon the legal rights of parties in a special case already under advisement.

 SHORTESS, J.

CARTER, C.J., dissents with reasons assigned. WEIMER, J., concurs and assigns additional reasons. SHORTESS, J., specially concurring.   I concur in that portion of Judge WEIMER'S concurrence which addresses the separation of power issues which he raised. FOIL, J., dissents for reasons assigned by CARTER, C.J.