CITY OF BARBOURVILLE v. KNOX COUNTY FISCAL COURT
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RENDERED:
JUNE 29, 2001; 2:00 p.m.
TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO. 2000-CA-001220-MR
CITY OF BARBOURVILLE
v.
APPELLANT
APPEAL FROM KNOX CIRCUIT COURT
HONORABLE DANIEL J. VENTERS, JUDGE
CIVIL ACTION NO. 99-CI-00472
KNOX COUNTY FISCAL COURT
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
BARBER, GUIDUGLI and HUDDLESTON, Judges.
HUDDLESTON, Judge: The sole question in this appeal is the correct
method that is to be used in determining a county’s population
under Kentucky Revised Statute (KRS) 68.197, which provides that
in counties having a population of 30,000 or more, persons who pay
both a county license fee and a city license fee must be allowed to
credit their city license fee against their county license fee.
On October 5, 1999, the City of Barbourville approved and
adopted an occupational tax ordinance that imposed a one-percent
occupational license tax on trades, occupations and professions
located and operating in the City of Barbourville.1
On October 8,
1999, the Knox County Fiscal Court met and heard a second reading
of a proposed one-percent occupational license tax on trades,
occupations and professions in Knox County, which the Fiscal Court
adopted that same day.2
Barbourville is a city located within Knox County.
This
dispute arose because the Fiscal Court refused to allow taxpayers
in the City to credit their city license tax against the county
license tax, an action the City contends is mandated under KRS
68.197(4).
The City filed a complaint on October 29, 1999,
petitioning the circuit court for a declaration of rights, pursuant
to KRS 418.445, and seeking an injunction enjoining the enforcement
of the County’s license tax.
Then, on December 22, 1999, the City
moved for a temporary injunction, or in the alternative, a writ of
mandamus, to enjoin the County from collecting its license fee
against city taxpayers or, in the alternative, to compel the County
to grant credit to city taxpayers.
motion
on
January
21,
2000,
The County responded to this
asserting
that
the
elements
for
injunctive relief were not met and that the population of Knox
1
This tax was adopted pursuant to Ky. Rev. Stat. (KRS)
92.280, which provides that “[t]he legislative body of each city of
the second to sixth class may impose license fees . . . on
franchises, trades, occupations and professions, and may provide
for the collection of such fees.”
2
The Fiscal Court approved a first reading of the tax
ordinance on September 28, 1999. The County adopted the ordinance
pursuant to KRS 67.083, which provides that the fiscal court of any
county is “authorized to levy all taxes not in conflict with the
Constitution and statutes of [Kentucky] now or hereafter enacted,”
and Section 181 of the Constitution, which provides, in pertinent
part, that the “General Assembly . . . may, by general laws, confer
on the proper authorities [of any county] the power to assess and
collect such taxes.”
-2-
County did not exceed 30,000, based upon the 1990 federal decennial
census, which had established the population of Knox County to be
29,676.
The County is not required to allow a credit to the city
taxpayers, pursuant to KRS 68.197(4), if this census number is the
only evidence utilized in determining the population of Knox County
under KRS 68.197.
A hearing was held on January 20, 2000, to consider the
City’s motion and to ascertain the proper method for determining
population as KRS 68.197 is silent on the issue.
During the
hearing the City put on evidence that the population of Knox County
is over 30,000 and argued that the 1990 federal decennial census is
not conclusive of the population.
The County asserted that the
most recent federal decennial census is the appropriate method to
determine population under KRS 68.197.
an
order
on
January
24,
2000,
The circuit court entered
stating
that
the
population
requirement of KRS 68.197 was to be determined “by the most recent
federal decennial census.” The court denied the City’s motions for
injunctive relief and request for a writ of mandamus and dismissed
the City’s complaint, holding that KRS 68.197 was inapplicable to
the case.
The City appeals from that order.3
The City argues on appeal that the circuit court erred in
its holding that the federal decennial census is the required
method of determining population and that the United States Bureau
3
On February 3, 2000, the City filed a motion to alter or
amend the court’s findings of fact, conclusions of law and order
because the order mistakenly stated that the County had adopted
its license tax before the City adopted its tax. An agreed order
was entered on May 2, 2000, amending the court’s January 24, 2000,
order to reflect that the City adopted its license fee first in
time.
-3-
of
the
Census’s
annual
estimates
are
more
appropriate means of determining population.
accurate
and
the
KRS 68.197 provides
that:
(1) The fiscal court of each county having a population
of thirty thousand (30,000) or more may by ordinance
impose license fees on franchises, provide for licensing
any business, trade, occupation, or profession . . . .
License fees on such business, trade, occupation, or
profession for revenue purposes, except those of the
common schools, may be imposed at a percentage rate not
to exceed one percent (1%) of:
(a) Salaries, wages, commissions, and other compensation
earned by persons within the county for work done and
services performed or rendered in the county;
(b)
The
net
partnerships,
profits
of
self-employed
professional
associations,
individuals,
or
joint
ventures resulting from trades, professions, occupations,
businesses, or activities conducted in the county; and
(c)
The
trades,
net
profits
of
professions,
corporations
occupations,
resulting
businesses,
from
or
activities conducted in the county. . . .
(4) [E]ffective with license fees imposed under the
provisions of subsection (1) of this section on or after
July 15, 1986, persons who pay a county license fee and
a license fee to a city contained in the county shall be
-4-
allowed to credit their city license fee against their
county license fee.4
Obviously, the statute is silent as to the method to be used in
determining a county’s population.
As the issue in this case is one of first impression, the
City and the County have carefully crafted arguments using case law
of Kentucky and other jurisdictions and other Kentucky statutes to
support their positions.
The City first directs this Court to the
case of Gross v. Ross5 for
the proposition that the federal
decennial census figures are to be treated only as evidence of
population of which the court may take judicial knowledge.
In
Gross the plaintiffs alleged that Harlan County had a population
over 75,000 people, as evidenced by a certificate of the Commerce
Bureau of Census filed with the Kentucky Secretary of State.
If
the population was 75,000 or more the circuit and county clerks
were to receive a minimum salary of $5,000.00.
The appellees
alleged that the census enumeration was fraudulent and that the
population was actually below 75,000.
The evidence purportedly
showed that several hundred people were counted twice and that
several people counted were not county residents.
In addressing
the weight to be given to the federal decennial census, Kentucky’s
highest court said that:
4
For a review of the legislative history of Ky. Rev. Stat.
(KRS) 68.197, see Preston v. Johnson County Fiscal Court, Ky., 27
S.W.3d 790, 792-94 (2000).
5
299 Ky. 383, 185 S.W.2d 547 (1945).
-5-
Our observation leads us to the conclusion that there is
nothing in the Act of Congress [relating to the taking of
the decennial census] which lends to the certification of
the Federal Supervisor any higher dignity than is given
by statutes or decisions of courts to other public
documents.
We find very few cases dealing with the
question as relating to the taking of a census by the
National Government, but see no reason why the same
general rules should not apply. The certification of the
census by the National Supervisor is evidence of the
population, and of which the courts may take judicial
knowledge.
It
is
prima
facie,
evidence
cases
where
the
in
or
merely
statutes
the
make
the
best
act
performed to depend upon the last decennial Government
census.
However,
our
statutes
with
regard
to
the
classification of officers here involved, do not make the
national census the criterion.
It follows, therefore,
that the certificate of the National Supervisor of census
is to all intents and purposes only prima facie, or in
cases where it is the basis for an act, the best evidence
of the fact, which may be overcome by direct or positive
evidence of fraud when attacked on that ground.6
The Court in Gross indicated that when a statute is silent as to
the method to be used in determining population, the federal
decennial census is only the best evidence of population, which may
6
Id. at 549 (citations omitted) (emphasis supplied).
-6-
be overcome by other extrinsic evidence.
Although Gross involved
allegations of fraud, we find this reasoning to be applicable to
the facts of this case.
The City offered the testimony of Dr. Michael Price,
director
of
University
the
of
Kentucky
Louisville
Population
Urban
Research
Studies
program
Institute,
at
the
during
the
January 20, 2000, hearing, to establish that the population in Knox
County as of 1998 was over 30,000.7
Dr. Price testified that, in
his opinion, the population of Knox County exceeded 30,000.
His
estimate was based on two criteria: the difference between births
and deaths in Knox County since the 1990 federal decennial census
and the county’s net migration from 1990 to 1998.
Using data
compiled from the Kentucky Cabinet for Health Services and the
National
Center
of
Health
Statistics
—
data
which
Dr.
Price
maintained was quite accurate — Dr. Price opined that there was a
natural increase of 1,294 persons in Knox County since 1990, a
figure arrived at by subtracting the number of deaths in Knox
County since 1990 (2,577) from the number of births in Knox County
since 1990 (3,871).
Further, Dr. Price testified that the Census
Bureau estimated that the net migration in Knox County, which is
the number of persons who moved into and out of Knox County from
1990 to 1998, resulted in a positive gain of 997 persons.
This
figure was arrived at by using data from the Internal Revenue
7
Dr. Price’s qualifications included being a research
scientist at the University of Louisville’s Urban Studies
Institute, being Director of the Kentucky Population Research
program since 1981, being the State Demographer representing the
Commonwealth of Kentucky in U.S. Bureau of Census federal-state
cooperative programs, and being responsible for Kentucky’s official
demographic forecasts.
-7-
Service, the Immigration and Naturalization Service, and the Social
Security Administration.
Finally, Dr. Price opined that as of
midyear 1998 the population in Knox County had increased to well
over 30,000 citing as support for his opinion the fact that the
1990 decennial census determined that the population in Knox County
was only 324 persons below 30,000 and that any estimation error
would most likely be associated with migration, would likely be
small and would still result in a positive number for migration.8
The evidence presented by Dr. Price is certainly the type of
evidence
that
could
be
analyzed
when
offered
to
rebut
the
presumption of population established by the federal decennial
census.
Population is a factor that governs application of several
other statutes contained within the Kentucky Revised Statutes.
The
difference between KRS 68.197 and other statutes is that several
other statutes contain language that promulgates the method to be
used in determining population.
The General Assembly has chosen the
federal decennial census to be the standard in some statutes,9 while
the Bureau of the Census’s annual estimates was chosen in others.10
Here, because the statute is silent as to the standard to be used
in determining the population of a county, we must look to the
traditional rules of statutory construction in an attempt to discover
8
The results of the federal 2000 decennial census shows the
population of Knox County in the year 2000 to be 31,795, an
increase of 2,119 people.
9
See KRS 15.755, KRS 64.347, KRS 154.23-015, KRS 164.475,
KRS 177.360, KRS 177.366, KRS 281.012 and, KRS 281.607.
10
See KRS 64.5275, KRS 67C.103 and KRS 70.045.
-8-
its intent.
When determining the application of a statute, the
intention of the legislature should be ascertained and given effect.11
“All statutes of this state shall be liberally construed with a view
to promote their objects and carry out the intent of the legislature
. . . .”12
The obvious effect of KRS 68.197(4) is to benefit city
taxpayers who pay both a city occupational license tax and a county
occupational license tax in counties with populations of 30,000 or
more by allowing the city’s taxpayers to credit their city tax
against the county tax.
The County primarily argues that the
legislature could not have intended to allow for county populations
to be challenged on a yearly basis under KRS 68.197 as would a rule
that sets the census estimates as the standard for determining
population.
However, in light of the fact that the legislature did
provide that the census bureau’s annual estimates are to be the basis
for the determination of population under several statutes, we do not
agree with the rationale of that argument.
Nor do we agree that city
taxpayers who may be entitled to a credit for their city occupational
tax
must
wait
until
the
federal
decennial
census
results
are
certified in order to be able to receive the credit.
It has been stated that in statutes such as this, if the
decennial census is the conclusive factor in determining population,
the statutes could lie dormant and remain a “dead letter” for a
11
See
Fiscal
Court
Comm’rs
v.
Jefferson
Judge/Executive, Ky. App., 614 S.W.2d 954, 957 (1981).
12
KRS 446.080(1).
-9-
County
period of nine or more years.13
We do not believe this was the
intention of the legislature in enacting KRS 68.197.
The County
directs us to decisions of other jurisdictions that have discussed
the proper method of determining population when the statute in
question does not designate the method to be utilized.
case law cited by the County is inapposite.
The Missouri
As the Supreme Court of
Missouri pointed out in Hardin v. Jefferson County,14 “[the Missouri
legislature] provided no special statutory method to determine the
population of a county under [Missouri Statutes Annotated] Sec. 7892.
Absent such a method, the question of population is fixed by the last
decennial census . . . .”15
The Court then cited to section 654 of
the Revised Statutes of Missouri 1939.16
Missouri’s legislature had
enacted a provision that the last decennial census was the default
method for determining population when the statute in question is
silent as to the standard to be used in determining population.
The
Missouri cases are not persuasive because Kentucky has no such
“default” provision.
The County cites to State v. Prevo,17 a North Carolina
Supreme Court case involving the imposition of a license tax, the
amount of which was determined by the number of inhabitants of each
13
See McFarlain v. Town of Jennings, 31 So. 62, 63 (La.
1901); see also Ryan v. Mayor of City of Tuscaloosa, 46 So. 638,
641 (Ala. 1908).
14
347 Mo. 410, 147 S.W.2d 643 (1941)
15
Id. at 644.
16
See also Union Elec. Co. v. Cuivre River Elec. Coop., 571
S.W.2d 790 (Mo. Ct. App. 1978) citing Reals v. Courson, 349 Mo.
1193, 164 S.W.2d 306 (1942).
17
101 S.E. 370 (N.C. 1919).
-10-
town.
The Court stated that “the [population] classification [of
statutes
of
this
type],
unless
otherwise
specified,
is
to
be
determined by some ‘official enumeration, officially promulgated,’
and, in the absence of a state statute appertaining to the subject
or some authoritative municipal regulation, the federal census is
usually adopted and allowed as controlling.”18 This authority is not,
of course, controlling.
In any event, the U.S. Census Bureau’s
annual estimates of population are trustworthy and may be relied
upon.
As the County has cited to additional authority that
supports the use of the federal decennial census to
determine
population when a statute is silent as to the method to be used, we
note that jurisdictions have held differently on this issue.
The
City as well has directed us to numerous cases to support the use of
the annual estimates for determining population under KRS 68.197.19
The most obvious rationale for using the federal decennial
census is that it provides a “definite period” to be used in
determining the population.20
Conversely, the use of the annual
estimates allows for a more accurate, up to date reading of the
population.
Although the federal decennial census is ordinarily an
accurate measure of the population of a county, the census is not the
18
Id. at 371 [emphasis supplied].
19
See Toth v. Board of Liquor Control, 84 N.E.2d 256 (1948);
Polk v. Oklahoma Alcoholic Beverage Control Bd., 420 P.2d 520
(Okla. 1966); Ryan v. Mayor of City of Tuscaloosa, supra, n. 11;
McFarlain v. Town of Jennings, supra, n. 11; State ex rel. Smith v.
Neal, 65 P. 188 (Wash. 1901).
20
See Commonwealth ex rel. Woodring v. Walter, 274 Pa. 553,
118 A. 510, 512 (Pa. 1922).
-11-
only evidence to be considered when determining population pursuant
to KRS 68.197.
We join the Court in Gross v. Ross in holding that
the federal decennial census is only the best evidence to be used in
determining population under KRS 68.197.
Further, we conclude that
the testimony offered by Dr. Price and the annual estimates of
population conducted by the U.S. Census Bureau are the types of
evidence that may be considered in rebutting the presumption created
by the federal decennial census.
The circuit court erred in dismissing the City’s complaint
requesting injunctive relief and a writ of mandamus.
We hold that,
in considering the population of a county pursuant to KRS 68.197, the
federal decennial census is only the best evidence of the population
and supplies presumption that may be rebutted by competent evidence,
which is to be determined by the trier of fact.
The judgment is
reversed and this case is remanded to Knox Circuit Court with
directions to reinstate the City’s complaint and to consider the
evidence offered by the City as to the population of Knox County in
1998.
ALL CONCUR.
-12-
BRIEF AND ORAL ARGUMENT
FOR APPELLANT:
BRIEF AND ORAL ARGUMENT
FOR APPELLEE:
Douglas L. McSwain
STURGILL, TURNER, BARKER &
MOLONEY, P.L.L.C.
Lexington, Kentucky
Brent L. Caldwell
McBRAYER, McGINNIS, LESLIE &
KIRKLAND, P.L.L.C
Lexington, Kentucky
ON BRIEF:
ON BRIEF:
Tammy S. Meade
Douglas L. McSwain
STURGILL, TURNER, BARKER &
MOLONEY, P.L.L.C.
Lexington, Kentucky
Jaron P. Blandford
McBRAYER, McGINNIS, LESLIE &
KIRKLAND, P.L.L.C
Lexington, Kentucky
David B. Jorjani
Barbourville, Kentucky
Kenneth M. Boggs
Barbourville, Kentucky
-13-
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