Louisiana Chemical Ass'n v. State, Louisiana Department of Revenue
217 So. 3d 455
La. Ct. App.2017Background
- Plaintiffs (Louisiana Chemical Assn. and several energy/chemical companies) sued state officials and legislative officers seeking a declaratory judgment that HCR 8 (2015) is ineffective, void, or unconstitutional. HCR 8 suspends certain state sales-tax exemptions for business utilities from July 1, 2015 through 60 days after adjournment of the 2016 Regular Session.
- Plaintiffs argued HCR 8 (1) violated constitutional procedural requirements for suspending laws and for repealing or changing tax exemptions, (2) conflicted with Acts 2004, No. 4, § 3, and (3) was unconstitutionally vague/ambiguous.
- Defendants moved for summary judgment, contending HCR 8 was a valid suspensive resolution, presumed constitutional, and that no material facts were in dispute; plaintiffs moved cross-summary judgment.
- The district court denied plaintiffs’ motion, granted defendants’ motion, and dismissed the case with prejudice; plaintiffs appealed.
- On de novo review the appellate court affirmed, holding HCR 8 is a permissible suspensive resolution, not equivalent to repeal or a revenue bill, and not unconstitutionally vague.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether HCR 8 is inconsistent with/superseded by Acts 2004, No. 4, § 3 | HCR 8 fails because it does not expressly suspend the earlier Act and thus conflicts with § 3 | HCR 8 is a later expression of legislative will suspending exemptions; prior temporary inoperability ended in 2010 so no conflict exists | Court: No conflict; HCR 8 controls as later legislative expression |
| 2. Whether HCR 8 violates constitutional procedures (Arts. III §§14,15,16,18,20; Art. VII §2) | Suspension of tax exemptions requires two-thirds vote under Art. VII §2 and other bill-formalities; HCR 8 effectively raises revenue | HCR 8 is a suspensive resolution (temporary suspension), not a repeal or a revenue-raising bill; suspension requires the same vote as enactment (majority) under Art. III §15(G) | Court: HCR 8 valid; does not require two-thirds vote or bill procedures; not a revenue bill |
| 3. Whether HCR 8 is unconstitutionally vague/ambiguous | HCR 8 is vague: fails to reference La. R.S. 51:1286, lacks cross-references, and uses undefined term “business utilities” | HCR 8 clearly suspends exemptions from R.S. 47:331 for steam, water, electric power or energy, and natural gas; language is definite for business regulation purposes | Court: Not unconstitutionally vague; language sufficiently clear |
Key Cases Cited
- Louisiana Hosp. Ass’n v. State, 168 So.3d 676 (La. Ct. App.) (standards for de novo review of legal questions)
- Metro Riverboat Associates, Inc. v. Louisiana Gaming Control Board, 797 So.2d 656 (La. 2001) (statutory interpretation favors constitutional construction)
- McLane Southern, Inc. v. Bridges, 84 So.3d 479 (La. 2012) (later legislative expressions control earlier conflicting enactments)
- BP Oil Co. v. Plaquemines Parish Gov’t, 651 So.2d 1322 (La. 1994) (discussing suspensions of exemptions and scope of uniformity issues)
- Harrah’s Bossier City Inv. Co., LLC v. Bridges, 41 So.3d 438 (La. 2010) (definition and nature of tax exemptions vs. exclusions)
- Sherwood Forest Country Club v. Litchfield, 998 So.2d 56 (La. 2008) (exemptions strictly construed against taxpayer)
- Louisiana Federation of Teachers v. State, 118 So.3d 1033 (La. 2013) (substance-over-form test for legislative instruments that have effect of law)
- Med Exp. Ambulance Serv., Inc. v. Evangeline Par. Police Jury, 684 So.2d 359 (La. 1996) (vagueness standard for business regulations)