Court of Appeals of Arizona, First Division, Department C
AMERICAN ESTATE LIFE INSURANCE COMPANY, an Arizona Corporation, Carefree Life Insurance Corporation of America, an Arizona Corporation, Modern Pioneers Life Insurance Company, an Arizona Corporation, and Sun Life Insurance Company, an Arizona Corporation, Appellants,
STATE of Arizona, DEPARTMENT OF INSURANCE and T. Millard Humphrey, as Director of Insurance, State of Arizona, Appellees.
[116 Ariz. 241] Stockton & Hing by Robert Ong Hing, Phoenix, for appellants.
Bruce E. Babbitt, Atty. Gen. by Mary Z. Chandler, Frank L. Migray, Asst. Attys. Gen., Phoenix, for appellees.
This appeal is from the granting of appellees' motion for summary judgment and the denial of appellants' motion for summary judgment. The pivotal issue concerns the questioned legality of a tax imposed by the appellees (State) upon the appellants (Insurance Companies).
The Insurance Companies contend that the statutory authority relied upon by the State to impose such a tax is unconstitutional because Law 1973, Ch. 160, § 6 amending ARS § 20-224(B) did not reasonably and fairly express the tax subject matter in the title of the legislative act. Specifically, it is alleged that there is a constitutional violation because the title to the act fails to fairly inform the legislature and the public that § 6 of the act would impose additional premium taxes on the appellant Insurance Companies.
ARS Const. Art. 4, pt. 2 § 13 relied upon by the Insurance Companies reads:
Every Act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title; but if any subject shall be embraced in an Act which shall not be expressed in the title, such Act shall be void only as to so much thereof as shall not be embraced in the title.
The purpose of this constitutional provision was expressed in State v. Espinosa, 101 Ariz. 474, 421 P.2d 322 (1966):
The purpose of the constitutional provision is to prevent the surprise and evils of omnibus bills and surreptitious legislation by requiring the title of an act to generally inform the public of the act's contents.
Id. at 476, 421 P.2d at 324. See also In re Dos Cabezas Power District, 17 Ariz.App. 414, 498 P.2d 488 (1972).
In re Lewkowitz, 70 Ariz. 325, 220 P.2d 229 (1950), expressed the test to determine the sufficiency of a title as follows:
[116 Ariz. 242]
'It has therefore been held that the title is sufficient if it is not productive of surprise and fraud, and is not calculated to mislead the legislature or the people, but is of such character as fairly to apprise legislators, and the public in general, of the subject matter of the legislation, and of the interests that are or may be affected thereby, and to put anyone having an interest in the subject matter on inquiry.' 50 Am.Jur., Statutes, § 167. Id. at 331, 332, 220 P.2d at 233. (Emphasis in original.)
The title to the act questioned in this appeal reads:
House Bill 2027 An Act Relating to Insurance; Providing for Conservatorship. For Certain Insurance Companies; Prescribing Surplus to be Maintained by Insurance Companies; Prescribing Deposit Requirements; Prescribing Expiration Date for Insurance Companies' Certificates of Authority; Prescribing Date for Paying Premium Taxes ; Prescribing Penalty for Failure to File Annual Statement; Prescribing Dates for Payment of Certain Taxes and Penalties for Failure to Pay Such Taxes; Amending Title 20, Chapter 1, Article 2, Arizona Revised Statutes, by adding Sections 20-169, 20-170, and 20-171, ...