Present: All the Justices
J. CHRIS ALDERSON, ET AL.
OPINION BY
v. Record No. 022578 JUSTICE DONALD W. LEMONS
September 12, 2003
COUNTY OF ALLEGHANY
FROM THE CIRCUIT COURT OF ALLEGHANY COUNTY
Duncan M. Byrd, Jr., Judge
In this appeal, we consider whether a special legislative
enactment regarding property taxes violates the Constitution
of Virginia. Effective July 1, 2001 the City of Clifton Forge
reverted to town status. Upon reversion, the residents of the
former City of Clifton Forge became residents of Alleghany
County and the new town of Clifton Forge. This reversion was
accomplished by agreement pursuant to Code § 15.2-3400 and was
approved by the Virginia Commission on Local Government and a
three-judge court pursuant to §§ 15.2-2907 and 15.2-3000.
Left unresolved, however, was the issue of personal property
assessment and levy upon citizens of the former City of
Clifton Forge.
The 2002 Session of the General Assembly, by vote of 40 –
0 in the Senate and 99 – 0 in the House, passed Senate Bill
246 providing for Chapter 78 of the 2002 Acts of Assembly
(“Chapter 78”). The Bill provided that “an emergency exists
and this act is in force from its passage.” The Governor
signed the Bill on March 6, 2002.
Chapter 78 provided that:
1. § 1. Notwithstanding any other
provision of law, any assessment of
tangible personal property as of January
1, 2001, for tangible personal property
located in the Town of Clifton Forge, with
such assessment being made by the
commissioner of the revenue of Alleghany
County, shall be valid, regardless that
residents of the Town of Clifton Forge
were residents of an independent city, the
City of Clifton Forge, on January 1, 2001.
In addition, the levy or imposition of
tangible personal property taxes for the
entire 2001 tax year based upon such
assessments shall also be valid subject to
the following:
1. Such assessments upon the
residents of the Town of Clifton Forge
shall be deemed to have been assessments
made to levy all tangible personal
property taxes upon such persons for a
period covering two separate tax years,
the first beginning January 1, 2001,
through 12:00 p.m. on June 30, 2001, and
the second beginning July 1, 2001, through
12:00 p.m. on December 31, 2001;
2. The tangible personal property
assessments by the county commissioner of
the revenue on the residents of the Town
of Clifton Forge applicable to the tax
year beginning January 1, 2001, through
12:00 p.m. on June 30, 2001, shall be
deemed to have been assessments made by
the commissioner of the revenue of the
City of Clifton Forge for such short tax
year. The tangible personal property
taxes imposed by the City of Clifton Forge
based upon such assessments shall have met
the requirement of Article X, Section 1 of
the Constitution of Virginia that all
property, except as provided in the
Constitution, shall be taxed. In
2
addition, such tangible personal property
taxes applicable to the tax year beginning
January 1, 2001, through 12:00 p.m. on
June 30, 2001, shall be levied at the
tangible personal property tax rates in
effect in the City of Clifton Forge as of
January 1, 2001, but the amount of tax due
shall be reduced by one-half to reflect
the short tax year beginning January 1,
2001, through 12:00 p.m. on June 30, 2001;
and
3. The tangible personal property
assessments by the county commissioner of
the revenue on the residents of the Town
of Clifton Forge applicable to the tax
year beginning July 1, 2001, through 12:00
p.m. on December 31, 2001, shall be deemed
to have been assessments made by the
county commissioner of the revenue on the
residents of the Town of Clifton Forge who
also became residents of the county on
July 1, 2001. The tangible personal
property taxes levied by Alleghany County
based upon such assessments shall be
levied at the tangible personal property
tax rates in effect in Alleghany County as
of January 1, 2001, but the amount of tax
due shall be reduced by one-half to
reflect the short tax year beginning July
1, 2001, through 12:00 p.m. on December
31, 2001.
§ 2. Any tangible personal property
taxes levied by the Town of Clifton Forge
upon town residents for the tax year
beginning July 1, 2001, through 12:00 p.m.
on December 31, 2001, shall be valid.
However, the amount of tax due shall be
determined using tangible personal
property tax rates in effect in the town
as of July 1, 2001, and the amount of tax
due shall be reduced by one-half to
reflect a short tax year beginning July 1,
2001, through 12:00 p.m. on December 31,
2001.
3
2. That an emergency exists and this act
is in force from its passage.
Chapter 78 validates the assessment of the County
Commissioner of Revenue upon property located in the former
City of Clifton Forge on January 1, 2001 and validates the
levy of taxes by the County for the year 2001 on the following
basis:
a. for Town residents the tax year is divided into two
“short tax years” representing the first half of the
calendar year and the second half of the calendar year;
b. assessments by the County are “deemed” to be
assessments by the City in the first short tax year and
are levied upon at the tax rate in effect in the City
on January 1, 2001 and thereafter reduced by one-half
to reflect the shortened period;
c. for the second short tax year, residents of the Town
are subject to levy at tax rates in effect in the
County as of January 1, 2001 and thereafter reduced by
one-half to reflect the shortened period. 1
Upon assessment and levy by the Commissioner of the
Revenue of Alleghany County for personal property taxes for
the calendar year 2001, J. Chris Alderson and other citizens
of the former City of Clifton Forge (“Taxpayers”), fully paid
their property taxes due on a timely basis. Thereafter,
pursuant to Code § 58.1-3984, they brought suit in the Circuit
Court of Alleghany County “for correction and invalidation of
1
Additionally, Chapter 78 validated any separate taxation
imposed by the Town for the tax year 2001 at tax rates in
effect as of July 1, 2001 in the Town and thereafter reduced
by one-half to reflect the shortened period of town status
during 2001. Taxes levied by the new Town of Clifton Forge
are not the subject of this appeal.
4
taxes on tangible personal property” and seeking a refund of
taxes paid. In their suit, Taxpayers did not mention Chapter
78; nonetheless, Taxpayers asserted that “[b]etween January 1,
2001 and December 31, 2001 (or July 1, 2001), the County of
Alleghany had no authority, whether by statute, ordinance, or
the Constitution of Virginia to tax any personal property
physically located and normally garaged in the City of Clifton
Forge, Virginia.”
Alleghany County demurred and maintained that Chapter 78
authorized the Commissioner of the Revenue of Alleghany County
to assess and levy upon personal property garaged in the City
of Clifton Forge on January 1, 2001. After a hearing upon the
demurrer, the trial court entered an order declaring that “the
Amended Petition should be and it is hereby deemed to allege
that said Chapter 78 of the Acts of Assembly (Senate Bill 246)
is unconstitutional.” The order further recited that the
demurrer remained under advisement. After submission of
briefs and argument of counsel, the trial court issued a
letter opinion which was incorporated by reference into the
final order. The letter opinion recited in part that:
“Counsel for the petitioner concedes that if Senate Bill 246
is constitutional, then their case becomes moot and the
demurrer should be sustained and the petition dismissed.” The
final order of the trial court held that Chapter 78 did not
5
violate the Constitution of Virginia, sustained the demurrer,
and dismissed the petition. Taxpayers appeal the adverse
judgment of the trial court.
ANALYSIS
The only question before the Court on appeal is whether
Chapter 78 violates the Constitution of Virginia. Chapter 78
was enacted in response to the unique circumstances arising
from the reversion of the City of Clifton Forge to town
status. The Act references Article X, § 1 of the Constitution
of Virginia requiring uniformity of property taxation. “The
dominant purpose of [this constitutional provision] is to
distribute the burden of taxation, so far as is practical,
evenly and equitably.” Board of Supervisors v.
Telecommunications Indus., 246 Va. 472, 477, 436 S.E.2d 442,
445 (1993) (quoting R. Cross, Inc. v. City of Newport News,
217 Va. 202, 207, 228 S.E.2d 113, 117 (1976)). Because “tax
day” for the purpose of assessment of personal property in
Alleghany County was January 1, 2001 (Code § 58.1-3515), and
reversion from status as an independent city to that of a town
within Alleghany County was effective July 1, 2001, without
the provisions of Chapter 78, Taxpayers would be free from any
personal property taxes for the calendar year 2001. Chapter
78 sought to remedy this potential non-uniformity in the
assessment and levy upon personal property. This isolated
6
remedy provides a solution to a nonrecurring problem.
Irrespective of the General Assembly’s motivation, the
question remains whether Chapter 78 violates the Constitution
of Virginia.
Taxpayers’ assignments of error are somewhat overlapping
and duplicative in nature; however, their challenge to the
constitutionality of Chapter 78 is fairly stated and discussed
herein. 2 Of course, we must consider these questions with a
presumption of validity which attaches to every enactment of
the General Assembly. Pulliam v. Coastal Emergency Servs.,
257 Va. 1, 9, 509 S.E.2d 307, 311 (1999).
I.
Taxpayers note that tangible personal property is subject
to “local taxation only, and shall be assessed for local
taxation in such manner and at such times as the General
Assembly may prescribe by general law.” Va. Const. Art. X,
§ 4. Situs for assessment and taxation of Taxpayers’ tangible
personal property is the City of Clifton Forge on “tax day,”
January 1, 2001. Code §§ 58.1-3511, 58.1-3515; Shelor Motor
Co. v. Miller, 261 Va. 473, 476, 544 S.E.2d 345, 346 (2001).
2
Taxpayers assert that they did not have the opportunity
to vote for any public officials of Alleghany County who
imposed personal property taxes upon them for 2001; however,
Taxpayers make no legal argument to support their contention
that such circumstances render Chapter 78 unconstitutional.
Accordingly, we will not consider this issue. Rule 5:17.
7
Article X, § 1 of the Constitution of Virginia provides in
part that “All property, except as hereinafter provided, shall
be taxed. All taxes shall be levied and collected under
general laws and shall be uniform upon the same class of
subjects within the territorial limits of the authority
levying the tax . . . .” Because Taxpayers were residents of
the City on January 1, 2001, they argue that they were not
“within the territorial limits” of Alleghany County and cannot
be subject to taxation by the County.
Article X, § 4 provides that tangible personal property
may be made subject to local taxation “in such manner and at
such times as the General Assembly may prescribe by general
law.” It is clear that the determination of situs and “tax
day” is within the power of the General Assembly. It has done
so with general laws in Code §§ 58.1-3511 and 58.1-3515. But,
Article IV, § 14 provides in part that “[t]he General Assembly
shall not enact any local, special, or private law” in cases
involving “the assessment and collection of taxes.”
The Constitution of Virginia also provides for special
acts concerning local government. Article VII, § 2 provides
in pertinent part: “The General Assembly may also provide by
special act for the organization, government, and powers of
any county, city, town, or regional government, including such
powers of legislation, taxation, and assessment as the General
8
Assembly may determine . . . .” Under the provisions of Art.
VII, § 1, such a special act is defined as “a law applicable
to a county, city, town, or regional government and for
enactment shall require an affirmative vote of two-thirds of
the members elected to each house of the General Assembly.”
At first glance, the provisions of Art. IV, § 14 appear
in conflict with Art. VII, § 2. But, this is not our first
glance at these provisions of the Constitution. Sections 63
and 64 of the 1902 Constitution of Virginia are essentially
the same as Article IV, §§ 14 and 15 of the 1971 Constitution.
Additionally, § 117 of the 1902 Constitution is essentially
the same as Art. VII, § 2 of the 1971 Constitution.
Considering the potential conflict between these provisions
under the 1902 Constitution, we held:
sections 63 and 64 must be read in connection
with section 117, [which] was designed to
enable municipal corporations, because of their
peculiar problems, ‘to care for their special
interests,’ and that, ‘Usually this could be
done by general laws . . . but the Convention
realized that there might be cases where it
would be desirable to confer special powers, or
special privileges . . . .’
Fallon Florist v. City of Roanoke, 190 Va. 564, 573, 58 S.E.2d
316, 320 (1950) (quoting City of Portsmouth v. Weiss, 145 Va.
94, 106, 133 S.E. 781, 784 (1926)). Also, in Pierce v.
Dennis, 205 Va. 478, 485, 138 S.E.2d 6, 12 (1964), we held
that the more specific authorization in § 117 controls over
9
the general restrictions in §§ 63 and 64 and we further stated
that “[l]aws for the organization and government of cities and
towns were specially provided for in § 117, and that section,
and not § 64, must be looked to when the validity of such laws
is questioned.” This understanding of the interplay between
these two provisions in the Constitution has continued after
adoption of the 1971 Constitution. Infants v. Virginia Hous.
Dev. Auth., 221 Va. 659, 675, 272 S.E.2d 649, 658-59 (1980).
When an act of assembly involves “the organization,
government, and powers of any county, city, town or regional
government, including such powers of legislation, taxation,
and assessment” the authorization found in Art. VII, §§ 1 and
2 prevails over the restrictions found in Art. IV, § 14.
Chapter 78 most assuredly is special legislation. It was
passed by unanimous vote of both houses of the General
Assembly. It was enacted in the context and aftermath of a
reorganization of governmental units, most particularly the
dissolution of an independent city and its reversion to the
status of a town. Furthermore, Chapter 78 clearly involves
powers of taxation and assessment specifically referenced in
Art. VII, § 2. Chapter 78 does not determine assessments nor
does it establish tax rates. Rather, it creates two short tax
years compatible with the date of reversion to town status,
validates the assessment of the County and the tax rate of the
10
City for the first short tax year, and validates the
assessment of the County and the tax rate of the County for
the second short tax year. Chapter 78 has the effect of
adjusting the situs requirements provided under general law to
adjust for the special and non-recurring circumstances
presented in 2001 involving the reversion of the City of
Clifton Forge to town status. Chapter 78 had the additional
effect of achieving uniformity required by Art. X, § 1 with
respect to the citizens of the County. Chapter 78 is not an
unconstitutional violation of Art. IV, § 14 because it is
specifically authorized by Art. VII, § 2.
II.
Taxpayers argue that Chapter 78 violates the uniformity
requirement of Art. X, § 1 in its imposition of taxes by the
County upon former city residents for the second short tax
year. They assert that persons moving into the County after
January 1, 2001 are not subject to personal property taxes by
the County for the year 2001 because there is no proration of
personal property taxes. Taxpayers maintain that by reversion
to town status, they “moved” into the County effective July 1,
2001. They argue that subjecting them to taxation by the
County for the second short tax year while other persons who
physically moved into the County after January 1, 2001 are not
subject to taxation, results in lack of uniformity.
11
As previously discussed in section I above, the General
Assembly, by the enactment of Chapter 78, in effect, adjusted
the general situs and tax day provisions Code §§ 58.1-3511 and
58.1-3515 to meet the special and non-recurring circumstances
presented by reversion to town status. Taxpayers did not
“move” as they suggest. The structure of government
applicable to them changed. The General Assembly was
authorized by the provisions of Art. VII, § 2 to address these
unique circumstances. Contrary to Taxpayers’ argument,
Chapter 78 provides greater uniformity in tax burdens than
would the situation in which taxpayers would be free from all
personal property taxation by the County.
III.
Taxpayers contend that the retroactivity of Chapter 78
violates the ex post facto prohibition found in Art. I, § 9 of
the Constitution of Virginia. The constitutional prohibition
against ex post facto laws applies only to criminal
proceedings. Huffman v. Commonwealth, 210 Va. 530, 532, 172
S.E.2d 788, 789 (1970).
Additionally, Taxpayers appear to argue that retroactive
application of Chapter 78 is unconstitutional because “it
attempts to validate the unconstitutional acts of the County,”
and it violates the rights of Taxpayers “to be free of County
taxation of their tangible personal property until next tax
12
year.” The General Assembly has the power to enact curative
acts with retroactive application provided that such acts are
not arbitrary and do not disturb vested rights, impair
contractual obligations, or violate due process. Colonial
Pipeline Co. v. Commonwealth, 206 Va. 517, 521, 145 S.E.2d
227, 231 (1965). “No one has the vested right to be free of
taxation, nor does he have the constitutional right to know
that a tax will be levied in such a manner that he may avoid
it.” Id. Taxpayers do not assert any vested rights that have
been disturbed or any contractual obligations that have been
impaired. Furthermore, as previously discussed in section I
above, the General Assembly did not act arbitrarily or without
authority in the enactment of Chapter 78.
IV.
Finally, Taxpayers argue that Art. VII, § 7 provides that
“[n]o ordinance or resolution appropriating money exceeding
the sum of five hundred dollars, imposing taxes, or
authorizing the borrowing of money shall be passed except by a
recorded affirmative vote of a majority of all members elected
to the governing body.” Taxpayers appear to assert that this
constitutional provision “trumps” the authority granted by
Art. VII, § 2 and because Chapter 78 is not a local ordinance,
the imposition of taxes is unconstitutional. Taxpayers
misconstrue the effect of Chapter 78. Chapter 78 does not
13
enact any ordinance, impose any tax, or set any tax rate.
Rather, Chapter 78 validates the assessment and levy of taxes
under existing ordinances and establishes two short tax years
to accommodate the change in government structure. It does so
by special act adjusting general situs and tax day provisions
in this unique and non-recurring situation.
CONCLUSION
We hold that Chapter 78 does not violate the Constitution
of Virginia. Accordingly, the judgment of the trial court
will be affirmed.
Affirmed.
14