14 N.W.2d 202 | Neb. | 1944
Lead Opinion
The action was brought by the Platte Valley Public Power and Irrigation District, as plaintiff and appellant herein, in the district court for Lincoln county, against the county of Lincoln and the members of its board of county commissioners, its county clerk, its county treasurer, and its county sheriff, defendants and appellees herein, to enjoin the levy and enforcement of a distress warrant issued for the purpose of collecting personal taxes levied and assessed against
By stipulation of the parties, the appellant being referred to herein as the district and the appellees as the county, it is agreed that the district is a public corporation organized under and by virtue of Senate File No. 310, as now amended, being section 70-701 to section 70-719, inclusive, Comp. St. Supp. 1941; that the district is engaged in the operation, management and maintenance of a system of diversion works, inlet and outlet canals, reservoirs, powerhouse, transmission lines, and other necessary works and equipment for the diversion and storage of waters from the North Platte River and the release of said stored waters for the purpose of the generation of electric current and the transmission and sale thereof for commercial purposes, and the sale, transportation, and delivery of said released waters for irrigation purposes; that the district in the years 1939 and 1940 owned certain automobiles and trucks which were necessary and being used by it in the operation of its irrigation and power system, upon which the county, by its proper officers, levied and assessed state, county, city and school district taxes for the year 1939 in the total sum of $159.38 for which there was issued and delivered to the sheriff of said county a distress warrant upon which the sheriff made demand of the district for payment. The question presented by this appeal is- whether or not the property of the district is, under the Constitution and statutes of the state, subject to taxation.
Two questions are presented by this appeal. The first is whether or not the district’s property is exempt from taxation under the provisions of section 2, art. VIII of the Constitution, as amended in 1920, which is in part as follows: “The property of the state and its governmental subdivisions shall be exempt from taxation” because the district is a governmental subdivision of the state; and second, whether the property owned by the district is held by it in trust
The question of whether or not the district in the use of its property used the same in a private or public capacity, often referred to as in a proprietary or governmental use, is not material here. Under section 2, art. IX of the Constitution of 1875, which was in force until the adoption of the amendment thereto in 1920, the provision with reference to tax exemption was in part as follows: “The property of the state, counties, and municipal corporations, both real and personal shall be exempt from taxation * * * .” Under this section in the case of City of Omaha v. Douglas County, 96 Neb. 865, 148 N. W. 938, we held ownership to be the sole basis of tax exemption. Quoting from the foregoing opinion : “Under the Constitution of this state rightful ownership of property by a municipal corporation such as the city of Omaha is all that is required or necessary to extend to such property complete exemption and: immunity from assessment and taxation, whether located within the city or without.” Under the provisions of section 2, art. VIII of the Constitution, as amended in 1920, which reads in part as follows: “The property of the state and its governmental subdivisions shall be exempt from taxation” and section 77-202, Comp. St. 1929, which reads in part the same, oionership and not use of the property is the basis of exemption. While the logic of requiring public agencies engaging in functions, of a private nature for a public purpose to pay taxes the same as private persons and corporations engaged therein may appeal to many, however, until the people of the state change the Constitution to make the use thereof rather than the ownership the basis of exemption we must follow the language of the Constitution, for as stated in Elmen v. State Board of Equalization and Assessment, 120 Neb. 141, 231 N. W. 772: “The words and terms of a constitutional provision are to be interpreted and understood in their most natural and obvious meaning, unless the subject indicates or the text suggests that they have been used in a technical sense, and while the Constitution, as amended, must be construed as a whole, still where the words em
Cases are cited from this jurisdiction involving the question of tort liability, Henry v. City of Lincoln, 93 Neb. 331, 140 N. W. 664; Cook v. City of Beatrice, 114 Neb. 305, 207 N. W. 518; of immunity from suit, Crete Mills v. Nebraska State Board, of Agriculture, 132 Neb. 244, 271 N. W. 684; of liability for goods purchased, Sorensen v, Chimney Rock Public Power District, 138 Neb. 350, 293 N. W. 121; and the sale of appliances, Neison-Johnston & Doudna v. Metropolitan Utilities District, 137 Neb. 871, 291 N. W. 558, wherein the general rule is. announced as stated in Sorensen v. Chimney Rock Public Poiver District, supra: “ * * * that, when a state, by itself or through its corporate creations, embarks in an enterprise, especially when commercial in character or which is usually carried on by individuals or private companies, its sovereign character is ordinarily waived, and it is subject to like regulations with persons engaged in the same calling.” These cases do not involve the question of tax exemption nor are they applicable thereto. This rule applies generally to municipalities as well as to public corporations created by the state to carry on functions for a public purpose and if applied to the matter of tax exemption would create a different basis for tax exemption than provided in our Constitution and as stated in Elmen v. State Board of Equalization and Assessment, supra: “Courts' may not supply what they deem unwise omissions, nor add words which substantially add to or take from the Constitution as framed.” Nor do- these corporations thereby lose the character of their corporate entity, for as stated in 1 McQuillin, Municipal Corporations (Rev. 2d ed.) 314: “And though a municipal corporation, in supplying public utilities, as water, light, power and heat, and acting generally as a private corporation, and competing with private corporations and individuals for gain and
While many jurisdictions, including those cited by the county, base the tax exemption of property owned by the public upon its use as being either private or public, often referred to as proprietary or governmental, however, these decisions are generally based upon the provisions in their Constitutions, or statutes, or both, making this classifica? tion. But until the people of this state change the basis of tax exemption of property owned by the state or its governmental subdivisions from that of ownership to one of use, we are not authorized or empowered to do so.
A public purpose has for its objective the promotion of the public health, safety, morals, security, prosperity, contentment, and the general welfare of all the inhabitants. That the purpose- for which the district has been created, being for irrigation and the development of power for the generation of electricity and its transmission, distribution and sale, is for a public purpose has already been determined by this court and is without question. Neal v. Van-sickle, 72 Neb. 105, 100 N. W. 200; Elliott v. Wide, 112 Neb. 86, 200 N. W. 347; State ex rel. Loseke v. Fricke, 126 Neb. 736, 254 N. W. 409. As stated in State ex rel. Loseke v.. Fricke, swpra: “Generally speaking-, it relates to the preservation and utilization, for the public welfare, of one of the natural resources of the state, to wit, the waters of its streams and rivers. This is a broad subject and includes
For many years the proper taxing authorities did not levy or attempt to levy taxes upon the property of irrigation districts or other property owned by the public for a public purpose, either private or public, and this was true when the Constitutional Convention met and the amendments were drafted and adopted in 1920. At this convention, and in the amendments submitted and adopted, the provisions of the Constitution of 1875 as to section 2, art. IX, which read in part as follows: “The property of the state, counties, and municipal corporations, both real and personal shall be exempt from taxation * * * ” were not limited, but, as shown by the records of the convention and from the language used, were broadened to read,-section 2, art. VIII of the Constitution, as amended in 1920: “The property of the state and its governmental subdivisions shall be exempt from taxation.” (Italics ours.) Therefore, in construing this section of the Constitution we should not overlook the following rules as announced in Laub v. Furnas County, 104 Neb. 402, 177 N. W. 749: “Long-continued practical construction of a statute by the officers charged by law with its enforcement is entitled to considerable weight in interpreting that law.” And in Elmen v. State Board of Equalization and Assessment, supra: “Legislative construction of a constitutional provision, although not necessarily conclusive upon the judicial department, is entitled to great weight when deliberately given, and especially when adhered to consistently for a considerable period of time, and this is particularly true when an identical construction has also been placed thereon for a like period of time by the highest officers of the executive department of the government and by the administrative officers who may be affected thereby.”
In a similar situation in the case of Lennox v. Housing Authority of City of Omaha, 137 Neb. 582, 290 N. W. 451, wherein the Housing Authority of the City of Omaha, created by an ordinance of the city but which authority was separate from the city and whose functions were for a public purpose, we held: “Public funds of the city may, with legislative sanction, be used to aid in the establishment of a housing authority, it being a governmental subdivision organized- for a public purpose.” And further: “We are obliged to hold that a housing authority, created and operated under the legislation before us, is a governmental subdivision within the purview of the Constitution, and consequently its property and bonds are legally exempted from taxation.” (Italics ours.)
When the state*, through its legislature, provides by statutory enactment the manner in which districts, such as the appellant, may be organized and operated for the purpose of using the waters of our natural streams for irrigation and the development of power for public use and such district is formed and part of the state’s waters dedicated to its use for such public purposes, then the district is in fact a governmental subdivision under our Constitution. Therefore, all the district’s property, both real and personal, is exempt from taxation.
For the reasons stated, the judgment of the lower court is reversed with directions to enter judgment for the district permanently enjoining the county and all of its officers from enforcing the distress warrant.
Reversed.
Concurrence Opinion
concurring.
The question here presented is whether or not personal property of the plaintiff used in the conduct of its business is exempt from taxation.
Several applicable sections in article XV of the Constitution answer that question. “The necessity of water for domestic use and for irrigation purposes in the State of Nebraska is hereby declared to be a natural want.” Sec. 4. “The use of the water of every natural stream within the State of Nebraska is hereby dedicated to the people of the state for beneficial purposes, subject to the provisions of the following section.” Sec. 5. “The right to divert unappropriated waters of every natural stream for beneficial use shall never be denied except when such denial is demanded by the public interest. Priority of appropriation shall give the better right as between those using the water for the same purpose, but when the waters of any natural stream are not sufficient for the use of all those desiring to use the same, those using the water for domestic purposes shall have preference over those claiming it for any other purpose, and those using the water for agricultural purposes shall have the preference over those using the same for manufacturing purposes. Provided, no inferior right to the use of the waters of this state shall be acquired by a superior right without just compensation therefor to the inferior user.” Sec. 6. “The use of the waters of the state for power purposes shall be deemed a public use and shall never be alienated, but may be leased or otherwise developed as by law prescribed.” Sec. 7.
Sections 4, 5 and 6 were, in their principal provisions, a
It is a sound rule of constitutional construction that where the inquiry is directed to determining the purpose sought to be accomplished by a particular provision, resort may be had to the proceedings of the convention which framed the language, and where the proceedings clearly point out the purpose of a provision, the aid will be valuable and satisfactory. 1 Cooley, Constitutional Limitations (8th ed.) 142; 12 C. J. 711; 16 C. J. S. 69.
It is clear from a reading of the debates of the constitutional convention that it was the purpose of the framers of these constitutional provisions (secs. 4, 5, 6, supra) to make the use of the waters a paramount concern of the state and to place these legislative provisions, so far as incorporated in the Constitution, beyond the power of the legislature to change. (See the debates on Proposal 129, Proceedings of the Constitutional Convention, 1919-1920.) The convention, in an “official statement” issued to the people so that they might “have full information of the nature and purpose of the proposed amendments,” gave the following “explanatory” statement: “The purpose of these new provisions in the Constitution is to define the use of water and place the same under constitutional protection, to which, owing to its importance in the development of the agricultural interests of the state, it is entitled.” (Proposed Amendments to the Constitution of the State of Nebraska as adopted by the Constitutional Convention 1919-1920, p. 37.)
The constitutional convention also submitted a provision which was adopted and became section 7, supra, regarding the use of the waters of the state for power purposes and providing that such use “shall be deemed a public use and
These constitutional provisions express, the will of the people and are the basic law in this state. By adopting these provisions, the people, through the Constitution, have made certain uses of the waters of this state the fundamental law of this state, untouchable by the legislature, and binding upon the courts.
By section 7, supra,, the people have provided that the development of the waters of the state for power purposes may be provided for by law as a public use, a use never to be alienated. The power to provide for that development has been placed in the legislature. It, from its very nature, is a governmental power, made so by inclusion in the Constitution of the state as one of the purposes and functions of the state, which the legislature is authorized to make effective. On this basis, I am of the opinion that a district, created under the legislative act here considered to develop
It may be advanced that section 7, supra, authorizes the development of the use of the waters for power purposes and does not include the creation of agencies of the state for the development for irrigation uses, and that this plaintiff is engaged in both power and irrigation development. However, that beneficial use is recognized by section 6, supra. It has long been the experience in this state, and in other states, and was so- stated in the debates of the constitutional convention, that water may be more advantageously used where one agency combines both water-power and irrigation development in one system of works. It is in full accord with the purposes of this provision to hold that development of the use for irrigation may be included in the development of the use for power purposes, and as a necessary part of that full development for which the legislature is authorized to provide. Mr. Abbott, the member of the convention who proposed this amendment, in discussing section 7 in connection with sections 4, 5 and 6, said: “One supplements the other, and both together constitute a complete scheme for the utilization of water of this state * * * .” (Proceedings of the Constitutional Convention 1919-1920, p. 1810.)
The same convention that submitted to the people of this state for adoption the constitutional provisions above quoted, also submitted the proposal which became a part of section 2, art. VIII that “The property of the state and its governmental subdivisions- shall be exempt from taxation.” The debates do not indicate that the framers of these provisions considered the immediate problem here presented. The language used is broad enough, and must necessarily be held, to include these state agencies created to develop the waters of the state for power purposes. They, being governmental agencies carrying out governmental purposes, are in my opinion governmental subdivisions, and their property exempt from taxation under the provisions of section 2, supra.
My disagreement with the majority goes to statements made in the opinion other than the determination that the plaintiff is a governmental subdivision under the constitutional provisions which I have discussed.
Particularly, I disagree with the inference,-that may follow from the discussion, that a public corporation organized for a public purpose is ipso facto a governmental subdivision of the state. The majority do' not undertake to define a “governmental subdivision.” There is a vast difference between corporations, described either by the legislature or the courts as “public corporations,” and “governmental subdivisions.” The term “public corporation” is a g-eneral, all-inclusive term, applied loosely by courts, and legislatures to all corporations that are not private corporations. A governmental subdivision is one created for the purpose of aiding- in the administration of the law, and through which the state exercises some of its governmental functions and powers by a delegation of a part of its sovereignty. Not all subdivisions of the state are exempt from taxation under section 2, supra. It is only those that are “governmental” in character. A “governmental subdivision” falls within a far more restricted classification than a “public corporation.” This distinction has been heretofore recognized by this court in State ex rel. Metropolitan Utilities District v. City of Omaha, 112 Neb. 694, 200 N. W. 871. See, also, 43 C. J. 69, 70, 182, 183; 1 Fletcher, Corporations (Perm, ed.) 207; 6 McQuillin, Municipal Corporations (Rev. 2d ed.) 1057; Griffith v. City of Butte, 72 Mont. 552, 234 Pac. 829; City of High Point v. Duke Power Co., 120 Fed. 2d 866; Vilas v. City of Manila, 220 U. S. 345, 31 S. Ct. 416.
If the majority opinion is to be so. construed, and it should not be, as to exempt all corporations as “governmental subdivisions” which either the legislature or this court has heretofore or may hereafter label public corporations, or
The majority state that they can see no¡ difference between irrigation districts organized under the act of 1895 and the plaintiff district, and argue that, because irrigation districts have not been taxed, the plaintiff district’s property is not taxable. Whether or not irrigation districts are or are not taxable is not an issue in this case. Using language taken from the McNeal opinion cited by the majority, 60 Neb. 613, 83 N. W. 847: “Resort must be had to the statute providing for the organization and government of an irrigation district to determine the power and scope of authority” of the district. The majority do not resort to the statute to determine that difference: The two districts are organized under different statutory provisions with distinctly different grants of power. One marked difference is the power of taxation which was. given to the irrigation districts. See Laws 1895, ch. 70, sec. 15. That power is denied the plaintiff district. ‘ See Comp. St. Supp. 1941, sec. 70-708. This court in Fontenelle Forest Assn. v. Sarpy County, 118 Neb. 725, 226 N. W. 327, has indicated the answer to that contention and that, is, for the state to. authorize the taxation of irrigation districts would “involve other taxation for the payment of the taxes soi laid” and for that reason the inference is that the legislature did not intend to require an agency having the power of taxation to levy taxes to pay taxes.
Finally, the majority discuss and appear to rely upon two statements in Lennox v. Housing Authority of City of Oma
For the reasons herein expressed, I concur in the result reached by the majority that the plaintiff’s property, which the defendant seeks to tax, is exempt from taxation.
Concurrence Opinion
concurring- in the result.
I am convinced that the majority opinion announces a correct decision of the question of whether or not the plaintiff district is exempt from taxation but I think that since, as pointed out by the opinion, a constitutional ground exists for holding that a public power district organized pursuant to statute to engage in the production and distribution of electric current and in irrigation is exempt from taxation, that the decision and the ground therefor should be so limited.
To go beyond that is not only unnecessary but, as I see the situation, goes too. far toward determination of the matter of taxation of property of other and different corporations organized under and authorized by Senate File No. 310 for the performance of purposes not contemplated by the constitutional provisions mentioned in the opinion.