Amicus Curiae Brief — Hooper v. Bernalillo County Assessor

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

ALVIN D. HOOPER and MARY N. HOOPER,

Appellants,

Vv.

BERNALILLO COUNTY ASSESSOR,

Appellee.

On Appeal from the Court of Appeals of the

State of New Mexico

BRIEF OF THE STATE OF NEW MEXICO

AS AMICUS CURIAE IN SUPPORT

OF THE BERNALILLO COUNTY ASSESSOR

PAUL BARDACKE

Attorney General

BRIDGET A. JACOBER

(Counsel of Record)

Special Assistant Attorney General

Taxation and Revenue Department

Post Office Box 630

Santa Fe, New Mexico 87509-0630

(505) 988-2290

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WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. D.C. 20001

TABLE OF CONTENTS

INTEREST OF AMICUS CURIA .000..---cccccccccceessssses---

SUMMARY OF ARGUMENT. q..n--cccccccccccccccseccccccessceseu

POINT I

THE STATUTORY DEFINITION OF VETERAN

MEETS EQUAL PROTECTION STANDARDS

BECAUSE REWARDING A STATE’S OWN

VETERANS IS A RATIONAL PURPOSE ..........

A. The validity of the definition of veteran is to be

determined under the rational basis standard....

B. Section 7-37-5 NMSA 1978 has a rational basis..

POINT II

THE DEFINITION OF VETERAN CANNOT

BE SEVERED FROM THE STATUTE BE-

CAUSE IT IS INTEGRAL TO THE GRANT OF

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TABLE OF AUTHORITIES

CASES Page

August v. Bronstein, 369 F.Supp. 190 (S.D.N.Y.

1974), aff'd, 417 U.S. 901 (1974)..8.....0 5

Dunn v. Blumstein, 405 U.S. 330 (1972) 0.000... 3,4

Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1933) __.... 7

Flaska v. State, 51 N.M. 13, 177 P.2d 174 (1946).. 9

Hooper v. Bernalillo County Assessor, 101 N.M.

172, 679 P.2d 840 (Ct. App. 1984), cert. denied,

101 N.M. 77, 678 P.2d 705 (1984) ....00 0... 2

Independent Warehouses, Inc. v. Scheele, 331 U.S.

70 (1947) _... i FLARE a One Ee a 3

Lambert v. Wentworth, 423 A.2d 527 (Me. 1980).. 6

Langston v. Levitt, 425 F.Supp. 642 (S.D.N.Y.

EE EIS Sie RF Bene aM ee Ae MOBS SW 5, 6

McClanahan v. State Tax Commission of Arizona,

@° SF) RSC eneeee Peis eR ha 8,9

Memorial Hospital vy. Maricopa County, 415 U.S.

fA REECE AES. “SARA 3,4

Miller v. Board of County Commissioners of the

County of Natrona, 337 P.2d 262 (Wyo. 1959).. 6

Murphy v. Taxation and Revenue Department, 94

N.M. 90, 607 P.2d 628 (Ct. App. 1979) .......... 5

Rios v. Dillman, 499 F.2d 329 (5th Cir. 1974) ....... 6

Shapiro v. Thompson, 394 U.S. 618 (1969)... 3,4

Safewuy *-‘ores v. Vigil, 40 N.M. 190, 56 P.2d 287

ini a a ss 8

Starns . ..alkerson, 401 U.S. 985 (1971), affirm-

ing 326 F.Supp. 234 (D. Minn. 1970)... 4

State v. Spearman, 84 N.M. 366, 503 P.2d 649 (Ct.

I Tanith ccicta th cocatininainaiuibiebiadeinihaihiamemeiponstits 8

Zobel v. Williams, 457 U.S. 55 (1982) —....... 6,7

NEW MEXICO STATUTES

ff SS a ae eee ieeeaaibeiaes 1

TTI TE AR Siete nea 1

§ 7-37-56 NMSA 1978 ................................... ak ne ae 5,9

EY CIID TRIED cnccscninscninsdnicsciacongensuiipennennstintnaiad 2, 5, 8,9

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

No. 84-231

ALVIN D. HooPER and MARY N. HOOPER,

Appellants,

Vv.

BERNALILLO COUNTY ASSESSOR,

Appellee.

Appeal from the Court of Appeals of the

State of New Mexico

BRIEF OF THE STATE OF NEW MEXICO

AS AMICUS CURIAE IN SUPPORT

OF THE BERNALILLO COUNTY ASSESSOR

INTEREST OF AMICUS CURIAE

The State of New Mexico (state), on behalf of the

Taxation and Revenue Department (department) joins

in this appeal as amicus curiae to support the position

of appellee, the Bernalillo County Assessor (assessor).

The interest of the state in this case derives from the

department’s responsibility to uphold the New Mexico

Property Tax Code (Code). Sections 7-35-1 and 7-35-3

NMSA 1978.

- a

The state joins in this case, as it participated as amicus

curiae in the New Mexico Court of Appeals, in support

of the statutory definition of veteran found in § 7-37-5(C)

NMSA 1978. Hooper v. Bernalillo County Assessor, 101

N.M. 172, 679 P.2d 840 (Ct.App. 1984), cert. denied,

101 N.M. 77, 678 P.2d 705 (1984). The state asserts

that this statute is a constitutional method of rewarding

New Mexico war veterans and that the challenged por-

tion of the definition of veteran cannot be severed from

the exemption as a whole. ™ ‘

SUMMARY OF ARGUMENT

The definition of veteran in the veteran property tax

exemption, § 7-37-5(C) NMSA 1978, does not substan-

tially interfere with the right to travel and therefore

is constitutional because there is a rational basis for the

different treatment accorded to the persons affected by

the statute. New Mexico’s veteran property tax exemp-

tion is a reasonable method for rewarding New Mexico

residents who served this country during times of armed

conflict.

If this Court finds that the exemption does not meet

equal protection standards, the case should be remanded

to the state court to determine if the offending portion

of the statute is severable. In the alternative, if this

Court reaches the severability issue, the entire statutory

exemption must be invalidated. State law precludes

broadening the application of the tax exemption, which

would be the effect of severing the definition from the

statute as a whole.

POINT I

THE STATUTORY DEFINITION OF VETERAN

MEETS EQUAL PROTECTION STANDARDS BE-

CAUSE REWARDING A STATE’S OWN VETERANS

IS A RATIONAL PURPOSE.

Appellant property owner argues that the statutory

definition of veteran violates the equal protection pro-

vision of the federal constitution. This definition limits

the grant of the exemption to those veterans who were

residents prior to induction, who became residents after

induction but before active tour of duty or who became

residents within an established period following the ces-

sation of conflict. While the statute does create two

classes of persons accorded different treatment, this clas-

sification is reasonable and therefore is not a denial of

equal protection. Independent Warehouses v. Scheele, 331

U.S. 70 (1947).

A. The validity of the definition of veteran is to be deter-

mined under the rational basis standard.

Determination of the constitutionality of the veteran

tax exemption requires a two step analysis: first, what

standard is to be applied to determine if equal protection

has been denied and, second, whether that standard has

been transgressed. Dunn v. Blumstein, 405 U.S. 330

(1972).

As this Court has held, a statute imposing a resi-

dency requirement will be examined under the strict scru-

tiny test only if it impairs a person’s ability to function

and thus substantially interferes with the right to travel;

otherwise it will be judged by the rational basis standard.

Shapiro v. Thompson, 394 U.S. 618 (1969). All resi-

dency requirements may interfere to some degree with

migration. Dunn v. Blumstein, 405 U.S. at 342, n. 13

(1972). But not every statute which has an adverse

impact on a person who has exercised the right to travel

is subject to strict scrutiny.

The amount of impact required to give rise to the

compelling-state-interest test was not made clear [in

Shapiro v. Thompson]. The Court spoke of the req-

uisite impact in two ways. First, we considered

whether the waiting period would deter migration

. . . . Seeond, the Court considered the extent to

which the residence requirement served to penalize

the exercise of the right to travel.

Memorial Hospital v. Maricopa County, 415 U.S. 250,

256-57 (1974) (emphasis in original).

A finding that the fundamental right to travel had

been violated invoked the strict scrutiny standard in

Shapiro, Dunn and Memorial Hospital because of the

severity of the penalty intrinsic to the operation of the

residency requirement. In each of those cases the ap-

plication of the residency requirement resulted in a de-

nial of benefits which were essential to a resident’s ability

to function as a citizen—welfare benefits, the right to

vote and medical assistance for an indigent. This com-

bination of a residency requirement and the denial of a

benefit of vital importance triggered the finding that the

fundamental right to travel was infringed; the residency

requirement alone did not constitute the prohibited

infringement.

In contrast, the rational basis test applies when the

residency requirement affects a benefit that does not sub-

stantially impair a new resident’s ability to function as

a citizen. See Memorial Hospital v. Maricopa County,

supra. This Court has endorsed the application of the

rational basis standard to residency requirements which

may inconvenience but do not deprive a citizen of a sig-

nificant state benefit. Starns v. Malkerson, 401 U.S. 985

(1971), affirming 326 F.Supp. 234 (D.Minn. 1970).

Whatever effect on the right to travel the New Mexico

veteran exemption may have, it does not rise to the level

of a penalty. Comparing Shapiro, Dunn, and Memorial

Hospital to the facts of this case, it is clear that the prop-

erty owner is not deprived of a life sustaining or other

vital benefit by having established New Mexico residence

after May 8, 1976. An exemption from taxation of a maxi-

mum of $2,000 of property is more closely analogous to

the benefit of in-state tuition, Starns v. Malkerson, supra,

than to welfare benefits, medical assistance or voting

rights. The grant or denial of the property tax exemp-

tion has little financial impact on a veteran moving to

New Mexico.' To qualify for the exemption a veteran

must own real property. Persons with the financial ca-

pability to purchase real property are not likely to be

substantially penalized by the denial of this property tax

exemption.

Finally, the challenged statute is a tax exemption—a

legislative gratuity in which no rights vest. Murphy v.

Taxation and Revenue Department, 94 N.M. 90, 607 P.2d

628 (Ct.App. 1979). As such it could be reversed or.

withdrawn at any time. Therefore, in deciding whether to

travel or not to travel, any reliance on the grant of the

exemption would be misplaced. Because the fundamental

right to travel is not substantially infringed by the resi-

dency requirement in § 7-37-5(C) NMSA 1978, the stand-

ard by which to judge the statute is whether a rational

basis exists for the creation of two classes.

B. Section 7-37-5 NMSA 1978 has a rational basis.

New Mexico’s veteran tax exemption meets the ra-

tional basis standard because the statute serves a legiti-

mate governmental goal. The intent of § 7-37-5(C) is to

reward persons who served in periods of armed conflict

as residents of New Mexico or who established residency

in New Mexico shortly thereafter.

The contributions which New Mexico recognizes through

its veteran tax exemption are actual, tangible contribu-

tions of wartime military service. Though this Court has

not yet ruled on the point, goals similar to New Mexico’s

have been found to have a rational relation to veteran

preference statutes by various other courts. Langston v.

Levitt, 425 F.Supp. 642 (S.D.N.Y. 1977). As explained

in the lower court’s opinion in August v. Bronstein, 369

F.Supp. 190 (S.D.N.Y.), aff'd, 417 U.S. 901 (1974):

1 Translated into cash value the veteran exemption is worth a

maximum of $106 per year to a property owner when the tax rate

of .053 is multiplied by the exemption amount of $2,000.

The preference is a token of gratitude conferred by

New York upon its sons who enter their country’s

service in time of war, and perhaps an encourage-

ment to return to the service of the state there-

after. ...

Clearly, the modest veterans’ preference at issue here

is substantially related to the purposes of the state.

369 F.Supp. at 193. Accord Rios v. Dillman, 499 F.2d

329 (5th Cir. 1974); Lambert v. Wentworth, 423 A.2d

527 (Me. 1980); Miller v. Board of County Commis-

sioners of Natrona County, 337 P.2d 262° (Wyo. 1959).

Appellant contends that Zobel v. Williams, 457 USS.

55 (1982), controls this case. The reason for rewarding

New Mexico resident veterans is not the same as the

purpose of the Alaskan benefit which was found invalid

in Zobel. New Mexico rewards its veterans for actual,

positive contributions to the military effort; service dur-

ing periods of conflict and an honorable discharge are

necessary to qualify for the exemption. These services

differ drastically from the undefined, intangible and per-

haps nonexistent contributions made by Alaska’s citizens

through their mere presence in the state.

Like the statutes at issue in the above cited cases, the

veteran tax exemption is basically restricted to persons

who were residents of New Mexico while serving in the

military. The statute includes an additional period to

allow individuals to claim the exemption when residency

is established within a short period following the con-

flict for which the veteran’s status is claimed. As ex-

plained in detail in appellee Bernalillo County Assessor’s

Reply Brief, the statute has a rational basis. Amicus

adopts and will not repeat that argument.

In summary, the residency requirement of the veteran

tax exemption does not have an impact on the right to

travel by impairing a citizen’s access to life-sustaining

or other necessities. Because the infringement is not crit-

ical, the statute is to be judged by the rational basis

standard. The veteran’s tax exemption meets this test

by devising a reasonable method of rewarding New Mex-

ico’s veterans.

POINT II

THE DEFINITION OF VETERAN CANNOT BE

SEVERED FROM THE STATUTE BECAUSE IT IS

INTEGRAL TO THE GRANT OF THE EXEMPTION.

The appellant has requested this Court to rule that the

portion of the statute which requires a veteran to estab-

lish residency by a given date can be severed from the

statute so that the exemption continues with a broadened

scope. The state asserts that this result is not supported

by law.

If this Court finds that the residency requirement of

the veteran property tax exemption is unconstitutional,

this case should be remanded to the New Mexico Court

of Appeals to determine whether the residency require-

ment can be severed from the statute as a whole. Zobel

v. Williams, 457 U.S. 55 (1982). The issue of the sever-

ability of the statute hinges on state created rights, and

therefore is a state law question. Cf. Erie R.R. Co. v.

Tompkins, 304 U.S. 64 (1933).

If the Court decides to resolve the severability issue

itself it should rule against severability. Under ap-

plicable New Mexico legal precedent, because the defini-

tion of veteran which contains the residency requirement

is integral te the exemption, it cannot be separated from

the statute. New Mexico law provides a three-pronged

test for determining if an act is severable. That test is:

First, the invalid portion must be able to be sepa-

rated from the other portions without impairing their

effect. Second, the legislative purpose expressed in

the valid portion of the act must be able to be given

effect without the invalid portion. And, thirdly, it

cannot be said, on a consideration of the whole act,

that the legislature would not have passed the valid

part if it had known that the objectionable part was

invalid.

State v. Spearman, 84 N.M. 366, 368, 503 P.2d 649

(Ct.App. 1972). The veteran property tax exemption

does not survive this test—-severance would undermine

the operation and be inconsistent with the legislative

purpose of the statute. ;

The requirement th~t residency be established by the

dates designated in the statute cannot be separated from

the exemption as a whole because such severance would

judicially expand the grant of the exemption to a broader

class of persons. The purpose of an exemption is to

grant a benefit to a special group of persons; essential to

the operation of an exemption are the parameters of the

class of recipients. See McClanahan v. State Tax Com-

mission of Arizona, 411 U.S. 164 (1973). Because the

grant of the exemption is integrally connected to the

factors which determine those eligible for it, the defini-

tion of the class cannot be separated from the exemption

as a whole without substantially changing the effect of

the statute.

This conclusion is supported by Safeway Stores v.

Vigil, 40 N.M. 190, 57 P.2d 287 (1936), where the

portion of a tax statute which defined the class of tax-

payers was found unconstitutional. The New Mexico

Supreme Court in Safeway Stores found that the statu-

tory definition of retail dealer was arbitrary in that it

resulted in taxing only merchants who sold goods in small

parcels and exempted those whose merchandise was not

so contained. The operation of the tax statute was de-

termined to be dependent on the meaning of retail dealer.

Therefore the whole act was found invalid when the

court found that the definition violated equal protection

standards.

In this case, the challenged portion of § 7-37-5(C)

NMSA 1978 has the effect of limiting the class of per-

sons eligible for the veteran exemption. Therefore, the

intent of the legislature, as determined from the lan-

guage of the statute, is to confine the grant of the exemp-

tion to persons who were residents of New Mexico at a

time closely associated with their military service during

war. If this Court were to delete the contested language

from the statute, the result would be that persons who

the legislature specifically excluded from the grant of

the exemption would receive such benefits. This would

be contrary to the express legislative intent and would

impair the budgets of county governments by creating a

tax exemption substantially beyond the scope anticipated

by the legislature.

Severability is also unwarranted because the full text

of § 7-37-5 NMSA 1978 reveals no support for an asser-

tion that the legislature would have enacted the veteran

exemption without the challenged residency requirement.

The text of the veteran exemption very clearly designates

the dates by which a person claiming the exemption must

have established residency in New Mexico. There is

nothing in the statute which suggests that this require-

ment is dispensable. To the contrary, since 1933 the

statutory amendments evidence inclusion of this or a

similar residency requirement. Flaska v. State, 51 N.M.

13, 177 P.2d 174 (1946). Coupled with these facts is the

consistent legal authority stating that legislative intent

to create a tax exemption is never presumed but must

be expressed in clear and unambiguous language. Mc-

Clanahan v. State Tax Commission of Arizona, supra. No

grounds exist to presume that the legislature would be

willing to exempt from taxation the property of persons

other than those specified in the statute.

In conclusion, if this Court finds a denial of equal

protection, this case should be remanded to the state court

to apply the appropriate remedy. Even if the Court does

not remand the case, it should rule against severability.

New Mexico laws would, under these circumstances, in-

validate the entire veteran exemption. Any other result

would have the effect of a legislative act since a group of

persons previously denied an exemption by the legislature

would henceforth be entitled to one.

CONCLUSION

The state asserts that the definition of veteran found

in § 7-37-5(C) is a rational method of rewarding per-

sons who served this country on behalf of New Mexico.

If this Court finds that the criteria for qualifying for

the veteran tax exemption is unconstitutional, the case

should be remanded to the state court or the exemption

should be ordered invalid in its entirety.

Respectfully submitted,