State Ex Rel. Kornmann v. Larson

ROBERTS, P. J.

Charles Kornmann, as relator, filed his petition in this court asking a writ of mandamus to require Alma .Larson, as Secretary of State, to accept and file a petition for the referendum of Chapter 296, Laws 1965. Relator claims that the imposition under this statute of an excise tax upon certain services and professions is not necessary for the support of the state government and its existing institutions within the meaning of the constitution excepting certain legislative enactments from the power of referral and is therefore subject to the referendum.

Section 1 of the act under consideration imposes "a tax at the same rate as that imposed upon sales of tangible personal property in this state upon the gross receipts of any person from the engaging or continuing in the practice of any profession or of any business in which the service rendered is of a professional, technical or scientific nature and is paid for on a fee basis, or *544by a consideration in the nature of a retainer". Section 2 imposes a tax at the same rate "upon the gross receipts of any person from engaging or continuing in any of the following businesses or services in this state: Abstractors; accountants; architects; barbers; beauty shops; blacksmith shops; car washing; dry cleaning; dyeing; exterminators; garage and service stations; garment alteration, cleaning and pressing; janitorial services; laundry and laundromats; linen and towel supply; photography; photo developing and enlarging; tire recapping; welding and all repair services."

The amendment to Section 1, Article III, of the State Constitution in 1898 reserving to the people the power of referendum excepts therefrom "* * * such laws as may be necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions." Section 22 of the same article relating to emergency acts becoming effective upon passage and approval is not applicable unless an act is within the classes of laws excepted from the referendum. State ex rel. Richards v. Whisman, 36 S. D. 260, 154 N.W. 707, L.R.A.1917B, 1, writ of error dismissed, 241 U.S. 643, 36 S.Ct. 449, 60 L.Ed. 1218.

The word "immediate" qualifies only the words "preservation of the public peace, health or safety." It then follows as pointed out in Hodges v. Snyder, 43 S.D. 166, 178 N.W. 575, that the "exception found in section 1 of article 3, names two classes of laws that are not subject to the referendum: First, such laws as are declared by the act itself to be necessary for the immediate preservation of the public peace, health, or safety of the state; and, second, such laws as are necessary for the support of the government and its existing public institutions. A law may be necessary for the preservation of the public peace, health, or safety, and still be subject to the referendum, unless the Legislature declares it necessary for the immediate preservation of the public peace, health, or safety. * * * But a [aw that ts necessary for the support of the state government or its existing institutions is not subject to the referendum in any event."

In its decisions, this court has held that a legislative declaration of an emergency is a nullity where the act could *545not by any fair inference be said to be in the exercise of the police power nor in support of the state government and its existing institutions. State ex rel. Loe v. Davis, 41 S.D. 327, 170 N.W. 519; Warwick v. Bliss, 45 S.D. 388, 187 N.W. 715; State ex rel. Kleppe v. Steensland, 46 S.D. 342, 192 N.W. 749; Johnson v. Jones, 48 S.D. 260, 204 N.W. 15; State ex rel. Driscoll v. Smith, 49 S.D. 106, 206 N.W. 233; Engelcke v. Farmers' State Bank of Canistota, 61 S.D. 92, 246 N.W. 288; State ex rel. Parker v. Youngquist, 69 S.D. 423, 11 NW.2d 84; In re Opinion of the Judges, 58 S.D. 72, 234 N.W. 671. Chapter 296, Laws 1965, is a tax measure and the additional revenue from the tax goes into the general fund of the state. It is obviously a law for the support of the state government. The question then is whether this law is necessary for that purpose. As this court said in State ex rel. Wegner v. Pyle, 55 S.D. 269, 226 N.W. 280, the effect of the provisions excepting from the referendum laws "necessary for the support of the state government and its existing public institutions" is not to except from the referendum all laws for such support, but only those as are necessary for that support. This court in determining whether a law is necessary for the support of the state government and its existing institutions will consider the effect upon such support of delay incident to referral and the consequences if the law is defeated. If the efficient operation of the state government would be unaffected by the delay or possible defeat, the law in such instance cannot be said to be necessary so as to prevent a referral.

While this court must give to the action of the legislature every favorable presumption, the mere fact that a statute is for the support of the state government will not preclude judicial review of the question whether the act is "necessary" for such support. This court, however, will not enter upon an ascertainment of facts through formal proof by sworn witnesses and authenticated documents to determine necessity of a statute for the support of the state government. The scope of the review is limited to what appears upon the face of the act and facts within the court's judicial knowledge. State ex rel. Shade v. Coyne, 58 S.D. 493, 237 N.W. 733; State ex rel. Botkin v. Morrison, 61 S.D. 344, 249 N.W. 563; City of Pierre v. Siewert, 63 S.D. 485, 261 N.W. 42; see also annotation in 100 A.L.R.2d 304.

*546The Constitution of the State of Washington, like ours, excepts from referendum provisions "such laws as may be necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions." It is the settled rule in that state that in determining the necessity for an enactment for the support of the state government the court as stated in State ex rel. Pennock v. Reeves, 27 Wash.2d 739, 179 P.2d 961, "will enter upon no inquiry as to the facts, but must consider the question from what appears upon the face of the act, aided by the court's judicial knowledge". In State ex rel. Hoppe v. Meyers, 58 Wash.2d 320, 363 P.2d 121, 100 A.L.R.2d 304, a mandamus proceeding to compel submission of a portion of an act increasing a motor fuel and use fuel tax to referendum the court adhering to prior holdings stated:

"It is therefore clear that the law, a portion of which the relator desires to have submitted to referendum, is a law directed to the support of an existing institution of the state government. But, as we have already noted, the relator contends that the law is not necessary, because it does not direct nor require a refunding of the outstanding bonds. Our inquiry into this question must be limited to an examination of the act and to matters of which we can take judicial notice, bearing in mind that it must be presumed that facts existed which justified the legislative determination that the law was necessary."

It was held in State ex rel. Wegner v. Pyle, supra, that a statute levying a registry tax on automobiles and providing that the levy against real and personal property be reduced in proportion to the amount of taxes collected under the act would not increase the revenue already provided for in existing statutes and was therefore subject to the referendum. In State ex rel. Botkin v. Morrison, supra, wherein the statutes involved also contained a replacement provision, we disapproved of the declaration in the Pyle case to the effect that such provision in a revenue measure establishes the fact that the act merely provides for a shift of the tax burden and that the support of the state govern*547ment is unaffected. This court observed that it must be presumed that the legislature availed itself of the opportunity to determine the facts and that necessity may not have consisted in securing additional revenue, but in maintaining existing amounts and because of the then economic situation preventing a shriveling of present sources of revenue.

A statute requiring the transfer of ten percent of the gross receipts of eighteen boards and commissions to the state's general fund was held in State ex rel. Parker v. Youngquist, supra, not to be excepted from the referendum because it neither levied nor increased any tax and appropriated no money, but from what appeared upon the face of the statute merely effected a diversion of taxes from special purposes to the general fund, not from necessity, but because it was equitable to do so. Insofar as the holding in that case is concerned it does not sustain contention of relator. In the present case the statute levies an additional tax and does not merely provide for an equitable diversion of revenue.

Judicial notice is the taking cognizance by courts of those facts "capable of immediate and accurate demonstration by resort to easily accessible sources of indisputable accuracy." McCormick, Evidence, § 325. "Most matters which the court may notice fall into one of two classes, those which come to the knowledge of men generally in the course of the ordinary experience of life, and are therefore in the mind of the trier, or those which are generally accepted by mankind as true and are capable of ready demonstration by means commonly recognized as authoritative." 31 C.J.S. Evidence § 7. The doctrine does not require actual present knowledge on the part of the court. It, may make investigation of "sources of indisputed accuracy" to ascertain facts of which judicial notice may be taken. Judicial notice may be taken of public or official records of general public interest such as bills introduced in the legislature and legislative journals. Elfring v. Paterson, 66 S.D. 458, 285 N.W. 443; Barnsdall Refining Corporation v. Welsh, 64 S.D. 647, 269 N.W. 853. In the case last cited legislative journals were noticed in determining whether a statute was passed in accordance with constitutional requirements. A statute is ordinarily tested as to *548its validity by its language in the light of those matters of which the court takes judicial notice. In Home Owners' Loan Corp. v. Oleson, 68 S.D. 435, 3 N.W.2d 880, this court took judicial notice that a temporary economic condition which furnished occasion for exercise of power to enact a mortgage moratorium statute had ceased to exist in this state. This court therein noticed the existence and contents of reports of the South Dakota Department of Agriculture and of the Superintendent of Banks.

In holding a certain matter not the subject of judicial notice, this court in Soyland v. Farmers Mut. Fire Ins. Co., 71 S.D. 522, 26 N.W.2d 696, 173 A.L.R. 1202, stated that it is not permissible for the court to take judicial notice of a fact that may be disputed by competent evidence. But there is a conflict of opinion as to whether judicial notice is limited to facts that are certain and indisputable. See Annotations in 45 A.L.R.2d 1169. Professor McCormick advocates a broad concept of judicial notice for legislative facts as distinguished from adjudicative facts. McCormick, Evidence, § 329. In order that this court may be justified in declaring that the act in question is not necessary for the support of the state government and its existing institutions and therefore subject to referendum it must at least appear from facts of which we may judicially notice that the conclusion is not reasonably disputable. In Ritholz v. Johnson, 244 Wis. 494, 12 N.W.2d 738, the court said: "When it appears from the information at hand that the facts are such as to render the conclusion to be drawn therefrom fairly debatable, the matter is for the determination of the Legislature and the court may not set up its judgment against a legislative determination."

Before proceeding further, we will consider and determine the scope of our inquiry. As we have indicated, we are concerned with the action of the legislature. We must give to the legislative determination that the law in question is necessary every favorable presumption. As ordinarily considered the existence of a rational basis for a legislative judgment of necessity is dependent upon facts within the sphere of judicial notice at the time of enactment. There is here involved a consideration of the relevancy of certain information brought to the attention of the court after hearing and submission.

*549Section 22, Article III, State Constitution, provides:

"No act shall take effect until ninety days after the adjournment of the session at which it passed, unless in case of emergency, to be expressed in the preamble or body of the act, the legislature shall by a vote of two-thirds of all the members elected of each house, otherwise direct."

This section and Section 1 of the same article expressly reserving to the people "the right to require that any laws which the legislature may have enacted shall be submitted to a vote of the electors of the state before going into effect" excepting laws which are necessary for the immediate preservation of the public peace, health, or safety or which are necessary for the support of the state government and its existing institutions are to be construed together "as if forming different parts of but one section." State ex rel. Lavin v. Bacon, 14 S.D. 394, 85 N.W. 605; State ex rel. Richards v. Whisman, supra. This court has held that an act passed at a regular session that is necessary for the support of the state government and its existing institutions and therefore not 'subject to the referendum goes into effect on the firsl day of July after its passage in accordance with the provisions of SDC 55.0607 unless the legislature declares the existence of an emergency under Section 22, above quoted, in which event the act goes into immediate effect or at 'such time as the legislature may fix. Hodges v. Snyder, supra. If Chapter 296, Laws 1965, is within the excepted class of laws which are necessary for the support of the state government it became effective on the first day of last July and its operation could not be suspended nor postponed by filing of the referendum petition. Whether the act became effective and not subject to referendum depends upon the state of facts existing on that date and subsequent to its enactment. It would be incongruous to hold that facts existing on July first have ceased to exist and subsequent events and circumstances, as for example, that no state levy as evidenced by proceedings of the State Board of Equalization in August of this year is required or that the need of state revenues has been lessened because certain appropriations have been declared invalid for the rea*550son that they were unconstitutionally included in the General Appropriation Act (State ex rel. Oster v. Jorgenson, 81 S.D. 447, 136 N.W.2d 870), now show that the act in question is not necessary for the support of the state government.

This conclusion makes it unnecessary for us to consider whether the parties should be given an opportunity to supplement or rebut the information brought to the attention of the court since submission.1 The proceedings of the State Board of Equalization in August, 1965, and other information obtained by independent investigation are not within the scope of our inquiry and have no bearing on the merits.

It is well known that the legislature was confronted with mounting need of additional revenues for the 1965-1967 biennium to finance rising expenditures and increased state aid to local governments. Additional educational costs are predominant in the upward trend in present and projected expenditures. The budget report submitted to the legislature stressed the need of maintaining or increasing the quality of education and emphasized increased enrollments in state universities and colleges and increased needs both as to faculties and facilities. Recommended amounts to finance governmental functions in other areas were also higher than in the preceding fiscal period. Revenue measures including the broadening of the sales tax base were enacted to meet the additional appropriation requirements. The wisdom of the means is not ours to review.

Counsel set forth in their briefs data and information contained in the records of the State Auditor. They are records of which this court may take judicial notice. It appears that the general fund appropriations for the current biennium, including continuing appropriations, amount to $109 million. The unobligated general fund balance on June 30, 1965 was approx*551imately $8.7 million. The balance in 1964 was $8 million and in 1963 $6.8 million. Relator asserts that the general fund surplus has reached an unreasonably high level. He estimates that no revenue from the broadened sales tax is needed to maintain a substantial general fund balance during the current biennium and that since such revenue is not required for the support of the state government, the electorate has a constitutional right to approve or reject the act here under consideration at the polls.

We have consistently held that a law providing for the support of the state government and its existing institutions is not subject to referendum even if the legislature makes no declaration of emergency. The expediency or wisdom of an enactment is legislative and not justiciable. We reiterate that this court must presume that facts existed which justified the legislative determination that the act in question was necessary. Unless we can say that the act is, in fact, not necessary for such support relator is not entitled to the writ prayed for. We may too accept relator's theory that a general fund surplus may be so "unreasonably and unnecessarily high" as to sustain a conclusion that additional revenues are not necessary.

The estimates and computations upon which relator relies with reference to state financing and the general fund surplus throughout the present biennium are highly uncertain and without the restricted doctrine of judicial notice. We too are not prepared to say that the general fund surplus when compared to projected expenditures during the present biennium is unreasonably large. The legislative judgment is thus drawn in question and hence this court will not weigh its judgment against that of the legislature when the matter is at least debatable and not without support in reason.

Writ denied.

RENTTO and HOMEYER, JJ„ concur. HANSON, J., concurs in result. BIEGELMEIER, J., dissents.

. See Appraisal of Techniques for Presenting Social and Economic Pacts to Courts, 61 Harv.L.Rev. 692; Appellate Courts Use of Pacts Outside of the Record by Resort to Judicial Notice and Independent Investigation, 1960 Wis.L.Rev. 39; American Law Institute, Model Code of Evidence, Rule 804(1) providing: “The judge shall inform the parties of the tenor of any matter to be judicially noticed by him and afford each of them reasonable opportunity to present to him information relevant to the propriety of taking such judicial notice or to the tenor of the matter to be noticed.”