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City of Phoenix v. Kelly

Supreme Court of Arizona

November 22, 1961

CITY OF PHOENIX, a municipal corporation; the City of Tempe, a municipal corporation, and the City of Tucson, a municipal corporation, Petitioners,
v.
J. W. KELLY, State Treasurer of the State of Arizona, Respondent.

In Banc.

John R. Franks, City Atty., Phoenix, William G. Barnes, City Atty., Tempe, H. Earl Rogge, Jr., City Atty., Tucson, for petitioners.

Robert W. Pickrell, Atty. Gen., William Clark Kennedy, Chief Asst. Atty. Gen., [90 Ariz. 117] Philip M. Haggerty, Asst. Atty. Gen., for respondent.

J. LaMar Shelley, Mesa, for amici curiae, League of Arizona Cities and Towns and its Member Municipalities.

UDALL, Justice.

This is an original proceeding in which petitioners, City of Phoenix, a municipal corporation, city of Tempe, a municipal corporation and City of Tucson, a municipal corporation, seek by mandamus to compel J. W. Kelly, Treasurer of the state of Arizona, to pay petitioners certain moneys as directed by A.R.S. § 42-1341, subd. D (Supp.1961). An alternative writ was granted on July 26, 1961 commanding the Treasurer to so distribute the moneys or show cause why he had not paid petitioners 25% instead of 10% of funds on hand after July 1, 1961.

Section 42-1341 formerly read as follows:

' § 42-1341. Special privilege tax account; license fee and privilege tax administration fund; appropriation to welfare department and municipalities

'A. The commission shall each day remit all revenues collected under this article to the state treasurer, through the state auditor, and the state treasurer shall credit the payments to a fund designated as the special privilege tax account.

'B. For the purpose of enforcing the provisions of this article, there is appropriated to the commission from taxes collected under this article four per cent of the taxes collected each month which shall be credited by the state treasurer to the license fee and privilege tax administration fund. The fund shall be disbursed only in the manner and in amounts as provided by the legislature in the general appropriation bill, and any amount remaining unexpended in the special fund at the end of the fiscal year shall revert to the general fund.

Page 471

'C. Ther is appropriated to the state board of social security and welfare from the taxes collected under this article fifteen per cent of the taxes collected each month to be used for the purposes set forth in chapter 1 of title 46.

'D. The state treasurer shall pay ten per cent of the tax collected under this article to the various municipalities of the state in proportion to their population, as shown by the most recent federal census, to be used by the municipalities for any municipal purpose.'

In the regular general election on November 8, 1960 this section was amended in accordance with the proposal in an initiative petition filed July 7, 1960. Only subsection[90 Ariz. 118] D was changed; it now provides in pertinent part:

'D. The state treasurer shall pay twenty-five (25) per cent of the tax collected under this article to the various municipalities of the state * * *.'

The initiative measure provided that this amendment should become effective on July 1, 1961.

As of June 30, 1961 the Treasurer had received from the Tax Commission all of the Transaction Privilege Tax receipts for that month. At that time the necessary computations were made respecting the allocations (on the 10% basis) for each of some sixty municipalities. But, owing to time consuming administrative and clerical procedures, the checks were not actually sent to the various municipalities until on or about July 15, 1961.

Petitioners contend the statutory directive is clear that the Treasurer 'shall pay' at the rate of 'twenty-five (25) per cent of the tax collected' after July 1, 1961 regardless of when the tax collections were received by the Treasurer. On the other hand, the Treasurer argues that the effective date of the amendment, July ...


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