C. The County Commission is Authorized Pursuant to Section 40-12-4 to Levy the Tax

1. Section 40-12-4 authorizes the County Commission to levy a privilege license tax for public school purposes. Section 40-12-4(a) clearly grants the County Commission the authority to enact the Tax Ordinance that levies the Tax. The granting language of Section 40-12-4(a) states:

In order to provide funds for public school purposes, the governing body of each of the several counties in this state is hereby authorized by ordinance to levy and provide for the assessment and collection of franchise, excise, and privilege license taxes with respect to privileges or receipts from privileges exercised in such county, which shall be in addition to any and all other county taxes heretofore or hereafter authorized by law in such county... .Ala. Code Section 40- 12-4(a).

2. The Taxpayers failed to prove that the County Commission lacked authority to levy the Tax pursuant to Section 40-12-4. Section 40-12-4(b) recites certain limitations on a county commission's authority to tax pursuant to Section 40-12-4(a). Section 40-12-4(b) provides that the governing body of the county shall not levy any tax "measured by gross receipts, except a sales or use tax which parallels, except for the rate of tax, that imposed by the State under [Title 40]."

Section 40-12-4(b) also provides that no governing body "shall levy 28 any tax upon the privilege of engaging in any business or profession unless such tax is levied uniformly and at the same rate against every person engaged in the pursuit of any business or profession within the county....." The Taxpayers erroneously maintain that the Tax Ordinance runs afoul of those two provisions.

As noted above, the Taxpayers bear the burden of establishing that the Tax is invalid because of one of the enumerated limitations recited in Section 40-12-4(b). Further, the presumption is that the Tax Ordinance is reasonable and valid, and the burden is on the Taxpayers to clearly show its invalidity. See Jefferson County v. Richards, 805 So. 2d at 706. The Taxpayers have failed to meet their burden of proof. The enactment of Section 40-12-31 effectively removed any limitations on an occupational tax found in Section 40-12-4. On May 4,2001, Section 40-12-31 became effective and removed any conceivable limitations on an occupational tax found in Section 40-12- 4(b). Section 40-12-31 states as follows:

"No provision or provisions in this chapter shall prevent the Alabama Legislature from enacting, imposing, and establishing occupational taxes, which are to be paid to the county or otherwise, and are imposed on an individual's engaging in any occupation, business, or profession without any 29 regard to whether he or she has a license to, or pays a license tax or fee in order to, carry on that occupation, business, or profession."

The Legislature's purpose in enacting Section 40-12-31 was to provide and clarify that no provisions in Chapter 12 of Title 40 of the Alabama Code limit the Legislature's authority to enact, impose, and establish an occupational tax. Since any conceivable limitations, as they may relate to occupational taxes, have been effectively removed by the enactment of Section 40-12-31.

Thus, to the extent there may have been any prohibition that occupational taxes enacted under Section 40-12-4 not be "measured by gross receipts" or that such taxes must be levied uniformly, that prohibition has been removed by Section 40-12-31. The Taxpayers argue that Section 40-12-31 has no application to the "Tax" because that section states that it applies only to removing barriers which would prevent the Alabama Legislature from "enacting, imposing, and establishing" occupational taxes, and would not apply to the "Tax" because it was levied by the County Commission.

Such an argument would misconstrue not only the difference between "levying" a tax and "enacting, imposing, and establishing" a tax, but would also fail to appreciate the constitutional powers of the Legislature and the county commissions, "counties have no inherent power of taxation." Newton v. City of Tuscaloosa, 251 Ala. 209, 36 So. 2d 30 487, 492 (1948).

"[T]he authority of the county to tax is one derived from the Legislature, and may be withheld, withdrawn or modified." Id. Thus, it is clear under Alabama law that the sole authority to "enact, impose, and establish" a tax rests solely with the Legislature. Once a tax is "enacted, imposed, and established" by the Legislature, the Legislature is authorized to delegate to a county the authority to levy such tax. Opinion of the Justices No. 168,270 Ala. 42,115 So.2d 475 (1959).

In the present case, the Legislature "enacted, imposed, and established" the franchise, excise and privilege license taxes found in Section 40-12-4. Thus, clearly, the "Tax", although levied by the County Commission, was "enacted, imposed, and established" by the Alabama Legislature when it enacted Section 40-12-4. The Taxpayers argue that Section 40-12-31 (which was enacted in 2001) could not have retroactive application to Section 40-12-4, which was originally enacted in 1969. That argument would likewise be without merit.

The Alabama Supreme Court recently stated that "[r]etrospective application of an act is disfavored unless (1) the act expressly states that it is to be applied retrospectively; (2) the legislature clearly intended the act to have a retrospective application; or (3) the act is of a remedial nature." Exparte East Alabama Health Care Authority, 814 So. 2d 260,262 (Ala. 2001).

Pursuant to this standard. Section 40-12-31 must have retrospective 31 application. First, the preamble to Section 40-12-31 indicates that it is to have retroactive application. The preamble states, in part, as follows: " To add a new Section 40-12-31.. .to provide and clarify that no provision or provisions in Chapter 12 of Title 40 of the Code of Alabama 1975, shall prevent the Alabama Legislature from enacting, imposing, and establishing occupational taxes....." (Emphasis added.) By stating that Section 40-12-31 was meant to "clarify" the law, it necessarily follows that Section 40-12-31 was meant to have retroactive application (i.e., only existing laws can be clarified).

Second, Section 40-12-31 is a "remedial" or "curative" statue, which, by law, has retroactive application. Exparte East Alabama Health Care Authority, 814 So. 2d at 262. The Court in Exparte East Alabama Health Care Authority stated that, "this Court has held that "[remedial statutes - those which do not create, enlarge, diminish, or destroy vested rights - are favored by the courts and their retrospective operation is not obnoxious to the spirit and policy of the law." Id.

Indeed, several jurisdictions have expressly held that a statute, like Section 40-12-31, which only "clarifies" existing law, must have retrospective application. See H.D. Tomilinson v. dark, 825 P. 2d 706, 713 (Wash. 1992) ("When an amendment clarifies existing law and where that amendment does not contravene previous constructions of the law, the amendment may be deemed 32 curative, remedial and retroactive.

This is particularly so where an amendment is enacted during a controversy regarding the meaning of the law."); Thompson Plumbing Co. v. McGlynn Co., 486 N.W. 2d 781 (Minn. App. 1992) (Acts that merely clarify, rather than modify, an existing law may be applied retroactively.); Pacific Coast Medical Enterprises. V. Dept. of Benefit Payments, 140 Cal. App. 3d 197, 204 (Cal. App. 2d Dist, 1983) ("Where an amendment to a statute is remedial in nature and merely serves to clarify the existing law, the legislature's intent that it be applied retroactively may be inferred."); 82 C.J.S. Statutes s 411 (1999) ("Because it does not change, but merely clarifies, pre-existing law, as a general rule, an act declaring the proper construction of a former statute is given a retroactive operation, so as to determine the meaning of the earlier statutes from its enactment...").

Clearly, Section 40-12-31, which according to its preamble expressly is intended to clarify existing law, must be given retroactive application to apply to Section 40-12-4. Finally, the Taxpayers may argue that, because Section 40-12-31 only removes limitations against the establishment of "occupational taxes," it has no effect on Section 40-12-4 because that section only speaks of a "privilege license tax."

However, under Alabama law a "privilege license tax" is synonymous with an "occupational tax." In the numerous cases addressing 33 Jefferson County Ordinance N. 1120, the Alabama Supreme Court, Eleventh Circuit Court of Appeals, and the United States Supreme Court have referred to the Jefferson County "privilege license tax" as an occupational tax.

See, e.g., Jefferson County v. Acker, 527 U.S. 423, 427-28 (1999) ("Jefferson County, Alabama, imposes an occupation tax on persons working within the county.... Pursuant to Alabama's authorization, Jefferson County, in 1987, enacted Ordinance Number 1120, 'establishjmg] a license or privilege tax....."); Jefferson County v. Acker, 210 F.3d 1317, 1318 (11th Cir. 2000) ("For more than seven years the validity of the occupational tax imposed by Jefferson County, Alabama Ordinance 1120....has been litigated in federal court."); Jefferson County, 805 So. 2d at 693 ([T]he primary issue presented is whether the exemptions from Jefferson County's occupational tax...."); Parker v. Jefferson County, 796 So. 2d at 1074("Applying Alabama law, this Court has upheld ordinances similar to the ordinance at issue in this case as imposing permissible 'occupational' or 'privilege' taxes or 'licensing fees' rather than impermissible 'income taxes.') ; Bedingfield v. Jefferson County, 527 So 2d 1270 (Ala. 1988) ("This is an appeal... from a judgment upholding a Jefferson County ordinance, specifically Ordinance No. 1120, establishing an occupational tax... Ordinance No. 1120 levies a license or privilege 34 tax..."). The local act that authorized Ordinance No. 1120 refers to a license or privilege tax and not to an occupational tax. 1967 Ala. Acts 406 Section 3.