*1 concerning exemption personal amendment taxation and property, although emphatic amendment does not contain language by really the voters —“and this time we mean it!” many might hoped While have that amendment would be the legal labyrinth turmoil, last turn in reality today’s of tax yet decision marks the entrance into another tax maze. As a consequence judicial insight explanation, of the lack of many questions today crucial that should have been answered subjects Although remain unanswered as for future lawsuits. Benjamin nothing Franklin believed that “in this world ” today but certain death and if he were alive in Nebraska likely litigation.” he would “with add confusion and One has to policy wonder poltergeists, whether the tax believed to have may yet been exorcised amendment haunt this court’s tax decisions. Bahensky, plaintiff, et al.,
Melvin v. State of Nebraska
defendants. 486 N.W.2d883 July 24, 1992. Filed No. S-91-846.
John W. DeCamp, of DeCamp Legal Services, plaintiff. Stenberg, Attorney General,
Don Jay and L. Bartel for defendants. Huck, Kasher,
Robert J. James F. and David G. Wilwerding, Croker, Huck, Kasher, Lanphier, Anderson, P.C., DeWitt & *2 Metropolitan for amicus curiae Omaha Builders Association. Boslaugh, White, Caporale, Shanahan, Grant, and JJ., D.J., Fahrnbruch, Colwell, and Retired.
Per Curiam. action, original an pursuant This is stipulated set of facts, seeking declaratory judgment constitutionality as to the Laws, 829, 20, of 1991 Neb. L.B. which bill the § passed clause, emergency with an signed and the Governor into 10, law on June Named as defendants were the State of Nebraska, Nelson, Benjamin Secretary Governor E. of State Beermann, Allen J. Breslow, Auditor of Public John Accounts State Treasurer Rockey, Dawn Tax Commissioner M. Berri Balka, Attorney and Stenberg. General Donald stipulated
The plaintiff, facts reveal that Melvin Bahensky, is a taxpayer. Nebraska resident and He owns a farm business, rental in connection with purchased which he irrigation pipe copying and a machine. In computing his federal income the plaintiff past years has in taken a deduction recovery regarding for cost irrigation pipe copying and machine. The amount of this deduction upon is based depreciation of according as calculated to the 167, 168, Internal Revenue 169, Code. See 26 U.S.C. and (1988 Supp. 179 & II 1990). plaintiff planned The to take a similar year. deduction for the 1991 year 829,
For tax
only,
(codified
L.B.
at Neb. Rev.
(Supp.
Stat.
77-2716.02
1991)), imposes
“a
of two
percent
depreciation.”
of all
“Depreciation” is defined in 20§
“any
as
recovery
deduction for cost
allowable under section
167, 168, 169,
1986,
or 179 of the Internal Revenue Code of
as
amended,
tangible property
used in a trade or business or
income____”
tangible property
production
held for the
Const,
plaintiff’s
It
contention that
20 violates Neb.
VIII,
1A,
art.
prohibits
which
“levying
the State from
purposes,”
tax for
as
as Neb.
state
well
1,
VIII,
requires uniformity
in the
proportionality
which
tangible
franchises,
with certain
taxation
all
companion case Jaksha
to our decision
Due
exceptions.
however, it is
State,
106,
(1992),
p.
In we that uniformity Nebraska clause of the year, violates the case, VIII, Constitution, in that 1. As we noted article part of an act is held unconstitutional generally, “when fail, unless the unconstitutional must likewise remainder Jaksha, ante remaining portions.” portion is severable from 873, citing Fitzgerald Kuppinger, v. at 486 N.W.2d at (1956). N.W.2d 547 We also identified several severability factors courts must consider in whether, namely, (1) absent provision: an unconstitutional remains; portion, plan (2) whether the valid invalid workable enforceable; invalid portions independently (3) are whether the parts was valid that the valid portion such an inducement part; (4) the invalid parts passed would not have without *3 the will do violence to the intent of whether severance separability Legislature; of (5) and whether declaration indicating Legislature have the bill that the would enacted Jaksha, portion supra, absent the invalid included in act. Strawberries, Inc., 1, 473 Spire v. citing State ex rel. 428 (1991). (codified 829 at Neb. Rev. Stat. Section 7 of L.B. 77-202(12) virtually all (Supp. 1991)) purported exempt § year personal rolls tax property from tax 77-27,138.01 26 act Neb. Rev. (codified Section of the at Stat. § (Supp. 1991)) provides for the reimbursement of the State’s political for revenues lost due to the additional subdivisions already exempt exemption personal property of which was not 829, 7 it was passed. During when floor debate on L.B. was § remaining of of exemption personal estimated that this sliver $95 property would result in a million shortfall to the counties. Debate, 92dLeg., (May 14,1991). IstSess. Floor 5090-93 concerning upon Much of the debate L.B. 829 centered contemplated sources from which the reimbursement in 26 of [150] ultimately
the act agreed plan should derive. The senators on a following: impose surcharge which would (1) do on tax property, of business which is deductions taken for challenged by plaintiff; (2) decrease the fee provision by tax on retailers of the sales and use allowed for collection 829, (codified, 21 and 23 tangible personal property, L.B. §§ 77-2703(2)(d) Rev. Stat. respectively, at Neb. impose utility energy 77-2708(l)(d) (Supp. 1991)); (3) tax on electricity, manufacturing, generation in in of used 829, hospitals, (codified L.B. at Neb. Rev. Stat. (Supp. 1991)); (4) impose a 77-2704(l)(j)(ii) $200,000, corporations earning in excess of income tax rate for 829, (Supp. 77-2734.17 (codified L.B. at Neb. Rev. Stat. § $150 (5) require payment a one-time fee of 1991)); and state, 829, (codified at Neb. corporations most in the L.B. 25§ (Supp. 1991)). Rev. Stat. 21-330 debate, According in the floor to comments made funding just generate would mechanisms described $97 approximately implemented. million in funds if Floor state Debate, 829, 3, 1991). In Leg., (June L.B. 92d 1st Sess. 6942 7 in provisions contrast to the deemed severable from § designed supra, provisions specifically each of the here was only year. Arguing support appropriation last bill for 829, Will Senator Eric summarized the intent of the right appropriation measure: “The bill now authorizes an monies, simply $97 million General Fund and that reflects estimating the amount that we are local subdivisions will lose personal property from the tax rolls for the from the removal of Debate, Leg., (May year.” 92d 1st Sess. 6360 ’91 Floor 1991). through clearly part
Sections 20 25 of L.B. 829 are of a designed needed to package to raise the revenues reimburse moneys political State’s subdivisions for lost due to effect of year. passage 7 in the Without additional revenue lacked reason to enact these measures *4 undoubtedly would not have done so. We conclude that 7 specific passage inducement of L.B. 829 was of §§20 through 25 and that enforcement of the latter in the absence of exemptions the contained in the former would do violence to result, hereby we declare Legislature. intent of the As virtue our of through 25 L.B. 829 unconstitutional of §§ Jaksha, supra. in decision Judgment plaintiff. Shanahan, J., dissenting. court, relying majority’s opinion
Because this in State, p. Jaksha v. (1992), ante strikes depreciation surcharge down the authorized Laws, 829, 20, certainly disagree majority’s I with the case, only decision in this decision which exacerbates the by requiring state’s tax woes refund of all taxes pursuant collected to 20.§
Furthermore, disagree I with the court’s that 20 is assertion admits, from L.B. only inseverable 7. As the court one of the inseverability present numerous factors to achieve is in Bahensky’s case, namely, 7 passage as an inducement to of Moreover, in view of the result in court’s protestations unwillingness of to “do violence to the of intent Legislature” ring have a hollow and cannot be taken seriously. Also, nothing there is in 7 and 20 of L.B. 829 to §§ they intertwined, indicate that inextricably are nor is there Therefore, apparent ambiguity statutory in language. provisions of 7 and be 20 should construed in terms of the statutory plain language appearing on the face of the legislation. exchanges Senatorial verbal on the floor of the Legislature have no role in constitutionality legislation presently judicial under single examination. To out a senator’s in legislative statement chamber and then transform that statement into the collective voice of the Legislature unquestionably Moreover, is day farfetched. expression that an on the floor of the determines constitutionality of day a statute will be sad for the separation powers judicial authority constitutional day apparently today. construe That sad statutes. has arrived Finally, only presented issue appeal, this the issue ignored by majority, this court’s 2 percent whether the surcharge imposed exercise federal deduction is a violation Neb.
VIII, A, prohibits levying 1 which of a tax for state *5 tax, directly an indirect one not An excise tax is
purposes.
omitted], and is
property
imposed upon persons or
[citation
act,
engaging
an
performance of
‘imposed
that
one
is
”
enjoyment
privilege.’
New
occupation,
or
[of]
opposed taxes, designated privilege or referred to as statute ” taxes, taxes.’ occupation and business license [Citation omitted.] similarly a number of occasions this court has
On doing act imposed upon that of an is recognized a tax an tax and tax. excise not L.B. 829 depreciation The under is voluntary asserting privilege imposed taxpayer’s act of to claim as a tax deduction allowed liability income under the federal Internal Revenue Code. Therefore, depreciation surcharge a constitutional excise tax, VIII, prohibited not Neb. Hence, 1A. 20 of L.B. 829 is constitutional. Complaint Against Judge Staley,
In re William D. Separate Sarpy County, Juvenile Court Nebraska. State of ex rel. Commission on Judicial Nebraska respondent. v. William D. relator, Staley, Qualifications,