In the matter of the petition of Missouri-American Water Company for approval to change its infrastructure system replacement surcharge (ISRS), Missouri Public Service Commission v. Office of Public Counsel ( 2016 )

In the
Missouri Court of Appeals
Western District
IN THE MATTER OF THE )
PETITION OF MISSOURI- )
AMERICAN WATER COMPANY ) WD78792
FOR APPROVAL TO CHANGE ITS )
INFRASTRUCTURE SYSTEM ) OPINION FILED: March 8, 2016
REPLACEMENT SURCHARGE )
(ISRS), and MISSOURI PUBLIC )
SERVICE COMMISSION, )
)
Respondents, )
)
v. )
)
OFFICE OF PUBLIC COUNSEL, )
)
Appellant. )
Appeal from the Public Service Commission
Before Division One: Lisa White Hardwick, Presiding Judge, Victor C. Howard, Judge
and Gary D. Witt, Judge
The Office of Public Counsel ("OPC") appeals the Missouri Public Service
Commission's ("Commission" or "PSC") order approving the petition of Missouri-
American Water Company ("MAWC") to change its "Infrastructure System Replacement
Surcharge" ("ISRS"). The OPC contends that the Commission's order was unlawful
because it approved an ISRS for St. Louis County ("County") even though the County
lacked one million inhabitants at the time of the last census, as is required by the ISRS
statute. The OPC further argues that the Commission's order was unlawful because it set
an ISRS recovery above the ten-percent limit set by the ISRS statute. We reverse and
remand.
Factual and Procedural Background
In 2003, the Missouri Legislature enacted legislation to create an ISRS giving
water corporations a method, outside of a formal rate case, to charge additional customer
rates to recoup the cost of infrastructure improvements. §§393.1000-393.1006.1 It is
undisputed that MAWC is a "water corporation," a "sewer corporation," and a "public
utility" as those terms are defined in §386.020. It is further undisputed that MAWC is
subject to the jurisdiction and supervision of the Commission.2
On February 27, 2015, pursuant to the ISRS statutes, MAWC filed an application
with the Commission to increase its ISRS ("Petition"). The Petition sought rate recovery
for costs incurred replacing infrastructure in St. Louis County for the period October 1,
2014, through January, 2015. The ISRS was established effective September 25, 2012,
and had been changed effective June 21, 2013, December 14, 2013, May 30, 2014, and
December 31, 2014. The Petition stated that MAWC was entitled to an additional
$1,919,991 in revenue to be produced by the ISRS.
The Staff of the Public Service Commission ("Staff") filed a Recommendation to
Reject Tariff and Proposed Increase to the Infrastructure Replacement Charge. The Staff
1
All statutory references are to RSMo 2000 cumulative as currently supplemented unless otherwise noted.
2
Both MWAC and the Commission filed briefs as respondents. Because they raise substantially similar
arguments and, ultimately, it is the interests of MWAC which are being adjudicated, we will attribute arguments
raised by both MWAC and the Commission to MWAC.
2
contended that the Petition impermissibly asked the Commission to provide for recovery
of ISRS costs in excess of the ten-percent cap established by §393.1003.1.
The undisputed base level of revenue approved by the Commission in MAWC's
most recent general rate proceeding was $258,926,618, which sets the ten-percent
revenue cap for MAWC's ISRS at $25,892,662. The Commission provided for the
annual recovery, in four prior ISRS cases, of up to $25,637,873. But, because the billing
determinates set in MAWC's previous general rate case forecast more customer usage
than actually occurred, the ISRS produced less revenue than was anticipated. As of
September, 2014, despite providing for up to $25.6 million in revenue, MAWC's ISRS
actually produced only $23,972,670 or $1,665,203 less than the maximum recovery.
MAWC's Petition sought to carry forward this $1.6 million deficit and combine it with
$254,789 in new ISRS expenditures, to set rate recovery at $27,557,864.
The OPC contended that this carry forward method results in an ISRS above the
ten-percent statutory cap and is thus unlawful. In an effort to comply with the statutory
cap but also grant MAWC full recovery, the Commission ordered the ISRS rate be set to
recover the full $27,557,864 but "no later than 60 days before MAWC expects to reach
the maximum revenue amount of $25,892,662, MAWC must file a new tariff designed to
discontinue all ISRS charges associated with the revenues resulting from this order." By
this, the Commission sought to allow MAWC to fully recover the entire ten-percent
maximum allowed under the statute and reduce the risk that it would have another ISRS
that did not fully recover funds. In effect, the Commission sought to take into account
3
the disparity between projected usage as determined by MAWC's last rate case and actual
usage shown by the lack of recovery in its last ISRS by front loading the ISRS recovery.
On motion for rehearing, OPC brought two issues before the Commission. In the
first, OPC contended that, as of the effective date of the results of the 2010 U.S. Census,
St. Louis County did not meet the population requirements established for application of
the ISRS statutes. As such, the Commission lacked authority to grant the relief MAWC
requested. Second, OPC contended that the inclusion of the prior deficit to set recovery
amounts resulted in rates that were impermissibly above the ten-percent cap provided for
by the statute. The Commission found in favor of MAWC on both issues. This appeal
followed.
Standard of Review
"Appellate review of PSC decisions and orders is governed by section 386.510."
In re KCP&L Greater Mo. Operations Co., 408 S.W.3d 175, 182 (Mo. App. W.D. 2013).
[R]eview of a PSC order is two-pronged: first, to determine whether the
PSC's order is lawful; and second, to determine whether the PSC's order is
reasonable. The appellant bears the burden of proof to demonstrate that the
PSC's order is unlawful or unreasonable. The lawfulness of the PSC's order
is determined by whether statutory authority for its issuance exists, and all
legal issues are reviewed de novo. This Court need not reach the issue of
the reasonableness of the PSC's order if it finds the order unlawful.
In Matter of Verified Application & Petition of Liberty Energy (Midstates) Corp., 464
S.W.3d 520, 524 (Mo. banc 2015) ("Liberty Energy") (internal citations and quotation
marks omitted). "[T]he interpretation and construction of a statute by an agency charged
with its administration is entitled to great weight." State ex rel. Sprint Mo., Inc. v. Pub.
Serv. Comm'n of State, 165 S.W.3d 160, 164 (Mo. banc 2005) (internal quotation marks
4
omitted). Nevertheless, "[w]hen determining whether the PSC's order is lawful, the
appellate courts exercise unrestricted, independent judgment and must correct erroneous
interpretations of the law." State ex rel. Mobile Home Estates, Inc. v. Pub. Serv. Comm'n
of Mo., 921 S.W.2d 5, 9 (Mo. App. W.D. 1996). "The PSC's order is determined to be
reasonable when the order is supported by substantial, competent evidence on the whole
record; the decision is not arbitrary or capricious; or where the PSC has not abused its
discretion." Liberty Energy, 464 S.W.3d at 524 (internal quotation marks omitted).
I.
OPC's first point on appeal alleges that the Commission erred in considering and
granting MAWC's water ISRS petition because the ISRS in this case was not authorized
by section 386.510.
Section 393.1003.1 states:
Notwithstanding any provisions of chapter 386 and this chapter to the
contrary, as of August 28, 2003, a water corporation providing water
service in a county with a charter form of government and with more than
one million inhabitants may file a petition and proposed rate schedules with
the commission to establish or change ISRS rate schedules . . . .
It is undisputed that MAWC operates within St. Louis County and that St. Louis County
has a charter form of government. See, generally, Missouri Bankers' Assoc. v. St. Louis
Co., 448 S.W.3d 267, 268 (Mo. banc 2014) (noting St. Louis County operates under a
charter form of government). The courts of Missouri take judicial notice of the
population of counties as determined by the United States Census. State v. Van Black,
715 S.W.2d 568, 571 n. 1 (Mo. App. S.D. 1986) (citing State ex re. Alton R. Co. v. Pub.
Serv. Comm'n, 70 S.W.2d 52, 54 (Mo. 1934)). In 2000, the U.S. Census found the
5
population of St. Louis County to exceed one million inhabitants. In 2003, the General
Assembly enacted the current water ISRS scheme. That scheme, as quoted above, allows
for a utility to use an ISRS ratemaking mechanism in a charter county with more than one
million in habitants. However, after the law was passed, the 2010 U.S. Census found that
the population of St. Louis County had dropped just below one million to 998,954.
OPC claims that, because in the most recent census St. Louis County had less than
one million inhabitants, MAWC could not file an ISRS petition, because they were no
longer subject to the provision of 393.1003.1. MAWC first argues that this issue was not
properly preserved for appeal. Section 386.500 governs rehearing and appeal of a PSC
order. MWAC argues that section 386.500.1 prohibits the appeal of an issue not decided
by the Commission in its original hearing. Section 386.500.1 states that a party has a
right to request rehearing "in respect to any matter determined therein." By necessity, to
issue an ISRS, the Commission had to find that the MAWC fell within the provisions of
the statute. Without this finding, the Commission had no authority to issue its ISRS. "As
a basic tenet of administrative law, an administrative agency has only such jurisdiction as
may be granted by the legislature." Tetzner v. Dept. of Soc. Servs., 446 S.W.3d 689, 692
(Mo. App. W.D. 2014). "If the agency lacks statutory authority to consider a matter, it is
without subject matter jurisdiction." Id. Without a finding that the MAWC's current
ISRS petition met the requirements of the statute, the Commission would not have had
authority to act. "The agency's subject matter jurisdiction cannot be enlarged or
conferred by consent or agreement of the parties." Livingston Manor, Inc. v. Dep't of
6
Soc. Servs., 809 S.W.3d 153, 156 (Mo. App. W.D. 1991). Thus, the application of the
statute to MAWC's current ISRS petition is not an issue which may be waived by OPC.
Section 386.500.2 specifically governs the issues which may be appealed and
states an appellant "shall not in any court urge or rely on any ground not . . . set forth in
its application for rehearing." See State ex rel. Office of Pub. Counsel v. Pub. Serv.
Comm'n, 236 S.W.3d 632, 636 (Mo. banc 2007) (any issue not raised in an application
for rehearing is not preserved for review by the PSC or a subsequent appeal). A review
of OPC's Application for Rehearing shows that its first argument was that "St. Louis
County's Population is Less Than One Million Inhabitants." While the matter may have
been determined in the hearing without much discussion, it was a necessary
determination to issue the ISRS. Further, OPC's concerns regarding population were
discussed, and rejected, by the Commission in its Order Denying Rehearing--the decision
which OPC now appeals.
MWAC seeks to align this case with In re KCP&L Greater Mo. Operations Co. in
which this Court dismissed certain issues raised on appeal because they were not properly
raised before the Commission. 408 S.W.3d 175 (Mo. App. W.D. 2013). In In re
KCP&L, the Commission had issued a number of orders and decisions relating to
different aspects of a tariff approval. Id. at 188. The utility sought to challenge the
rulings of a report and order from which it filed no application for rehearing. Id. This
Court properly held that the utility was limited to challenging matters determined only in
the order from which it had timely filed an application for rehearing and then properly
appealed. Id. at 189.
7
In this case, the Commission only issued one order from which OPC timely filed a
motion for rehearing, raising the population challenge, and subsequently timely filed an
appeal of the Commission's denial. There is no issue, as there was in In re KCP&L, with
OPC seeking to review a Commission decision that was not timely appealed by filing a
challenge to a related but entirely different order. As such, the issue in this case is
properly before this Court on appeal.
A.
The Commission and MAWC allege that there are three reasons as to why §
393.1003.1 continues to apply to St. Louis County and MAWC, despite the County's dip
in population below one million people. The first is the plain language of 393.1003.1
which states:
Notwithstanding any provisions of chapter 386 and this chapter to the
contrary, as of August 28, 2003, a water corporation providing water
service in the county with a charter form of government and with more than
one million inhabitants may file a petition and proposed rate schedules with
the commission to establish or change ISRS rate schedules that will allow
for the adjustment of the water corporation's rates and charges to provide
for the recovery of costs for eligible infrastructure system replacements
made in such county with a charter form of government and with more than
one million in habitants . . . .
§393.1003.1. Section 393.1003.2 continues that "[t]he commission shall not approve an
ISRS for a water corporation in a county with a charter form of government and with
more than one million inhabitants that has not had a general rate proceeding . . . within
the past three years . . . ." MWAC argued, and the Commission found, that the phrase "as
of August 28, 2003" creates a "snapshot" test that determines application of the statute as
of that date. They argue that because the County had a population of over one million
8
inhabitants on August 28, 2003, section 393.1003.1 will always apply to the County. Not
only would such an interpretation require a tortured reading of the statute, it would
potentially render the statute unconstitutional.
Missouri's constitution prohibits "special legislation." See Treadway v. State, 988
S.W.2d 508, 511 (Mo. banc 1999). Generally, a statute is "special legislation" if it only
applies to one person or entity. Id. A statute may apply to a particular class of political
subdivisions even if at the time of the statute's passage only one subdivision meets the
statutory definition. Id. This is permissible because other subdivisions may join the class
if they later meet the requirements and leave the class if the requirements are no longer
met and therefore it is not considered "special legislation." Id. ("The fact that currently
the statute applies only to the St. Louis metropolitan region does not necessarily make the
act a special law because the act can apply to other counties that attain the same statutory
criteria in the future.") If, however, we accept MWAC's "snapshot test" then 393.1003.1
could only ever apply to St. Louis County and just as St. Louis County could never fall
out of the statute, no other entity could later meet the qualifications. The charter and
population requirements for a political subdivision would be fixed on August 28, 2003,
never to change. "A law based on close-ended (non-changing) characteristics, such as
historical or physical geography or constitutional status, is facially special because others
cannot come into the group nor can its members leave the group." City of DeSoto v.
Nixon, SC94746 at *7 (Mo. banc filed Jan. 12, 2016). A "snapshot test" would render the
statute "special legislation" because it would only ever apply, and would always only
ever apply, to St. Louis County. Absent substantial justification for having "special
9
legislation" the legislation would be unconstitutional. See, generally, Jefferson Cty. Fire
Prot. Dists. Ass'n v. Blunt, 205 S.W.3d 866, 870 (Mo. banc 2006).
MWAC argues that its snapshot in time argument would not render section
393.1003 special legislation because, although the statute would forever apply to St.
Louis County because the "snapshot" test determined to whom the statute applied as of
August 28, 2003, the general population provision of section 1.100.2, discussed infra,
would allow other counties that later acquired the requisite population to also fall under
the statute. This interpretation, however, flies in the face of interpreting "August 28,
2003" as a "snapshot." It would unnecessarily read section 393.1003 to appear on its face
to be unconstitutional, requiring the saving of section 1.100.2 to effectively read away the
"snapshot" test for all but St. Louis County.
Instead, we find the phrase "as of August 28, 2003" more appropriately acts as an
effective date.3 "Absent a statutory definition, words used in statutes are given their plain
and ordinary meaning with help, as needed, from the dictionary." In Matter of Verified
Application & Petition of Liberty Energy (Midstates) Corp., 464 S.W.3d 520, 525 (Mo.
banc 2015). "[T]he mere fact that the litigants disagree over the meaning of [a statutory
term or phrase] does not render the statute ambiguous." J.B. Vending Co. v. Dir. of
Revenue, 54 S.W.3d 183, 188 (Mo. banc 2001). The phrase "as of August 28, 2003"
3
Laws passed by the general assembly take effect 90 days after adjournment of the session unless a later
effective date is stated there in or a shorter time is designated and the shorter time ("emergency clause") is approved
by a two-thirds vote of each house. MO. CONST. art. III, § 29; Section 1.130 RSMo. Dykes v. Gentry Cty., 193
S.W.3d 293, 294 (Mo. App. W.D. 2006). The general assembly adjourns on May 30th of each year. Mo. Const.
Art. III, Section 20(a). Therefore unless a different date is legally established for a particular provision of a bill,
legislation goes into effect on August 28 of the year that it is passed by the general assembly.
10
establishes the effective date of the statute. "[T]he phrase [as of] frequently signifies the
effective date of a document . . . . When such a nuance is not intended, as of is the wrong
phrase." BRYAN A. GARNER, A DICTIONARY OF MODERN AMERICAN USAGE 68 (3d ed.
2009). MWAC asks that we ignore the common and correct use of the term "as of" and
instead read it as a date intended to modify "more than one million inhabitants."
We recognize that expressly setting an effective date of August 28, seems at first
to be superfluous because effective dates are generally statutorily and constitutionally
established. Section 1.130; MO. CONST., art. III, § 29. This seemingly redundant
inclusion is, however, explained because section 393.1003.1 applies to the operations of
an administrative agency. Administrative agencies are permitted to draft regulatory rules
and procedures necessary to implement statutes. The implementation date of a statute
may be delayed while an agency drafts and debates regulations. Placing the effective
date in the language of the statute prevents the effective date or implementation date from
being delayed due to rule making. In fact, this conclusion is supported by the language of
section 393.1006.10, which gives the Commission authority to promulgate rules to
implement the ISRS mechanism "but only to the extent such rules are consistent with,
and do not delay the implementation of, the provisions of sections 393.1000 to
393.1006." (emphasis added). By this language the legislature wanted to make clear the
ISRS provisions would be available on August 28, 2003, with no delay.
Further, we find that, were the phrase "as of" intended to modify the inhabitant
requirement it would have been properly placed next to that condition. Had the
legislature intended to create a "snap shot test" under which the population would be
11
judged only as of August 28, 2003, the date would have been properly placed directly
following the population. Under the rule of last antecedent, "relative and qualifying
words, phrases or clauses are to be applied to the words or phrase immediately preceding
and are not to be construed as extending to or including others more remote." Elliott v.
James Patrick Hauling, Inc., 490 S.W.2d 284, 287 (Mo. App. 1973); Paroline v. United
States, 134 S. Ct. 1710, 1720-21 (2014). The rule "is not inflexible and it has not been . . .
adhered to where extension to a more remote antecedent is clearly required by
consideration of the entire act. Elliott, 490 S.W.2d at 287. (internal quotation marks
omitted). "[T]he safest and surest test to determine whether the general rule of the last
antecedent or the exception thereto is to be applied is . . . (a) common-sense interpretation
. . . bearing always in mind the mischiefs to be remedied and the benefits to be secured by
the law." Id. (internal quotation marks omitted). Here, to modify "more than one million
inhabitants," "August 28, 2003" should have been placed immediately after the
qualification--more than one million inhabitants as of August 28, 2003. As constructed,
the date more properly reads as an effective date under its plain and ordinary meaning.
To read "as of August 28, 2003" as creating a "snapshot" of the population strains
sentence construction because it is placed as far from the words MWAC argues it should
modify. This can be seen when read together with subsection 393.1003.2 which includes
the inhabitant requirement but contains no date qualifier. Common-sense dictates then
that the population requirement is not to be applied to that term else we are left to
conclude that the legislature erred in omitting it from subsection 393.1003.2.
12
MWAC argues that "as of August 28, 2003" cannot be intended to act as an
effective date because the language does not match that used in another ISRS statue.
Section 393.1012.1 provides that the natural gas ISRS is available "beginning August 28,
2003." We certainly recognize that use of the term "beginning" signifies that the statute
"commences" or "starts" on the date given. BRYAN A. GARNER, A DICTIONARY OF
MODERN AMERICAN USAGE 93 (3d ed. 2009). But, we do not believe that the use of a
different term in section 393.1012.1 alters or changes the usual definition or use of a term
in a different subsection. Both terms create an effective date or start date by which the
terms of the statute take effect regardless of hindrances to the statutes application--such
as promulgation of regulatory rules.
MWAC argues that a similar phrase was interpreted as a grandfather clause by this
Court in City of Harrisonville, Mo. v. Pub. Water Supply Dist. No. 9, 129 S.W.3d 37 (Mo.
App. W.D. 2004). In City of Harrisonville, the court was to determine the effective date
of a statute. Id. at 38-39. The statute stated that it applied to political subdivisions that
had a specified population and assessed value "which thereafter acquire such population
or assessed valuation as well as those in the category at the time the law was passed." Id.
at 39. The city contended that the statute was applicable because the effective date was
the date the bill was signed by the governor while the water district argued the effective
date was the date the General Assembly passed the law. Id. This Court determined that
the plain meaning of "at the time the law passed" meant that the statute applied to
political subdivisions meeting the statutory requirements on the date the law was passed
by the General Assembly or those later acquiring such requirements. Id. at 40-41. We
13
made no finding that the phrase "at the time the law passed" should be interpreted to
grandfather in a political subdivision that later loses population or valuation
requirements. The court was only tasked with determining the meaning of the word
"passed" as it appeared in the statute.
As with City of Harrisonville, the legislature set an effective date by which the law
would become effective of August 28, 2003. As of that date, the ISRS rate scheme
became available to a water utility operating in a county with a charter form of
government and more than one million inhabitants. The statute, however, has no
provision that states once a county has met the requirements of being a charter form of
government and having one million inhabitants its classification can never change. Had
the legislature intended to grandfather a county into the ISRS statute, it certainly could
have written the legislation to say so. See, e.g., § 67.1846(2) (defining a "grandfathered
political subdivision" for the purposes of right-of-ways laws as a political subdivision
which met certain criteria "prior to May 1, 2001"); § 311.090.1 (statute controlling sale of
liquor in cities of a certain size notes "once such licenses are issued . . . any subsequent
loss of population shall not require [voter approval] prior to the issuance or renewal of
such licenses"); § 304.190 (establishing commercial zone of a city for traffic regulations
noting in subsection 4: "[i]n no case shall the commercial zone of a city be reduced due to
a loss of population"); §§72.040, 72.050 (governing classification of fourth class cities
and villages stating that "notwithstanding the population requirements . . . [an entity]
shall retain such classification at its option"). Instead, the plain language of the statute,
14
the language relied up on by MAWC and the Commission, is merely an effective date of
the statute.
We believe that the OPC presents a more common-sense and logical reading of "as
of" as an effective date. It is included to effect the legislative intent that, regardless of
any regulatory rules that needed to be promulgated or procedures that needed to be
implemented by the Commission for the ISRS scheme, as of August 28, 2003, water
utilities would be able to apply for an ISRS to recoup costs of infrastructure replacement.
As such, it does not act as a grandfathering clause forever allowing ISRSs to be collected
by MAWC in St. Louis County.
B.
MWAC's second argument contends that, in the event that section 393.1003 is not
found to have a "snapshot test," the County should still be grandfathered into the statute
by application of section 1.100. Section 1.100 is a general statute governing
determination of population to be applied by other statutory provisions. Section 1.100.1
provides, in pertinent part:
The population of any political subdivision of the state for the
purpose of representation or other matters . . . is determined on the
basis of the last previous decennial census of the United States. For
the purposes of this section the effective date of . . . each succeeding
decennial census of the United States is July first of each tenth year
after 1961.
(emphasis added). Counties are political subdivisions of the State. Mo. Const. art. VI §
1. When the General Assembly passed section 393.1003.1, St. Louis County met all the
statutory requirements but, as a result of the 2010 U.S. Census, the County's population
15
dropped below one million. To determine the effect, if any, of the population loss on the
availability of the water ISRS to MAWC, the Respondent's direct us to section 1.100.2.
Section 1.100.2 states:
Any law which is limited in its operation to counties, cities or other
political subdivisions having a specified population or a specified assessed
valuation shall be deemed to include all counties, cities or political
subdivisions which thereafter acquire such population or assessed valuation
as well as those in that category at the time the law passed. Once a city not
located in a county has come under the operation of such a law a
subsequent loss of population shall not remove that city from the operation
of that law.
MWAC and the Commission allege that the phrase "as well as those in that category at
the time the law passed" at the end of the first sentence acts as a grandfathering clause
creating a "once in, always in" rule. Effectively, if a political subdivision meets a
population requirement at the time a statute is enacted, that statute will always apply to
that subdivision no matter the subdivision's population.
OPC contends that, plainly on its face, the statement "as well as those in that
category at the time the law passed" is not a grandfathering clause but merely states that,
at the time a law is passed, all political subdivisions that meet the population
requirements are automatically included, as well as those that later meet the requirements.
The language does not touch on what happens with a population loss or state that
application of a law will not change. Its inclusion is merely to clarify that those political
subdivisions that meet the population qualifications at the time a law is passed will be
included, lest parties argue that a law only applies prospectively--to political subdivisions
"which thereafter acquire such population." This is made clear when read in conjunction
16
with the second sentence which specifically addresses a decrease in population. When
faced with a decrease in population the legislature saw fit to create a grandfathering
clause for "a city not located in a county" but did not include any other political
subdivision.
Our primary rule of statutory interpretation is to "effectuate legislative intent
through reference to the plain and ordinary meaning of the statutory language." In Matter
of Verified Application & Petition of Liberty Energy (Midstates) Corp. v. Office of Pub.
Counsel, 464 S.W.3d 520, 524 (Mo. banc 2015). "This Court must presume every word,
sentence or clause in a statute has effect, and the legislature did not insert superfluous
language." Id. at 524-25 "In determining whether the language is clear and
unambiguous, the standard is whether the statute's terms are plain and clear to one of
ordinary intelligence." Clanton v. Teledyne Neosho, 960 S.W.2d 532, 534 (Mo. App.
S.D. 1998). "We are not bound by the Commission's determination of ambiguity." In re
Laclede Gas Co., 417 S.W.3d 815, 820 (Mo. App. W.D. 2014). "When there is doubt
and ambiguity as to the meaning of a statute, the courts give consideration to the practical
construction placed upon the act by the agency charged with its administration, although
such construction is not binding on the judiciary." State ex rel. Competitive Telecomms.
v. Mo. Pub. Serv. Comm'n, 886 S.W.2d 34, 39 (Mo. App. W.D. 1994). "When 'the intent
of the legislature is clear and unambiguous' by giving the statutory language its plain and
ordinary meaning, both [the Missouri Supreme Court] and the court of appeals are bound
by that language and cannot resort to statutory interpretation." Simpson v. Simpson, 352
S.W.3d 362, 365 (Mo. banc 2011).
17
To read the first sentence of section 1.100.2 to have a grandfathering clause would
strip the second sentence of any meaning. "The issue is not whether a particular word in
a statute, considered in isolation, is ambiguous, but whether the statute itself is
ambiguous." Cook v. Newman, 142 S.W.3d 880, 886 (Mo. App. W.D. 2004) (en banc).
"Thus, the meaning of a particular word in a statute must be considered in the context of
the entire statute in which it appears." Id. We find that the statute is clear and
unambiguous that only a city not within a county remains under the governance of a
statute despite a loss in population. As to all other political subdivisions of the state,
section 1.100 does not speak to a loss in population. Although one could possibly argue
that the phrase "as well as those in that category at the time the law was passed" is
ambiguous in isolation, its placement within the entire statute which otherwise creates a
grandfathering provision based on loss of population for one particular type of political
subdivision clarifies its intent.
Although we recognize that we do not resort to statutory interpretation where the
language is plain and unambiguous, we find that the legislative history of section 1.100
supports and bolsters our finding as to the plain meaning of the statutory language. "To
discern legislative intent, the Court may review the earlier versions of the law, or
examine the whole act to discern its evident purpose, or consider the problem the statute
was enacted to remedy." United Pharm. Co. of Mo., Inc. v. Mo. Bd. Of Pharmacy, 208
S.W.3d 907, 911-12 (Mo. banc 2006) (internal quotation marks omitted). "Statutory
construction should not be hyper technical but instead should be reasonable, logical, and
should give meaning to the statutes." Id. at 912.
18
Prior to 1971, section 1.100.2 was limited to the first sentence. §1.100.2 (1969).
The second sentence was not added until 1971.4 Prior to 1971, section 1.100.2 read:
Any law which is limited in its operation to counties, cities or other
political subdivisions having a specified population or a specified assessed
valuation shall be deemed to include all counties, cities or political
subdivisions which thereafter acquire such population or assessed valuation
as well as those in that category at the time the law was passed.
§1.100.2 (1969). Section 1.100 was amended in 1971 by HB 154 to address concerns
that St. Louis City would fall below its prior population numbers in the 1970 census.
Because of the population shifts in this state as indicated by the 1970
census there will be no statutes to govern certain political subdivisions of
the state, therefore this act is deemed necessary for the immediate
preservation of the public health, welfare, peace and safety, and is hereby
declared to be an emergency act within the meaning of the constitution, and
this act shall be in full force and effect upon its passage and approval.
H.B. 154 (introduced January 7, 1971). The only reasonable explanation for the
amendment was that the legislature recognized that political subdivisions could fall out of
laws and enacted an emergency statute to address the issue for St. Louis City. The
legislature had the opportunity to address the issue for all political subdivisions and chose
not to do so. The rule of statutory construction expressio unius est exclusion alterius
mans "the express mention of one thing implies the exclusion of another." Disalvo
Props., LLC v. Bluff View Commercial, LLC, 464 S.W.3d 243, 245 (Mo. App. E.D.
2015). Although the rule should be used with great caution, it allows an inference that
4
Section 1.100.2 was amended by H.B. 154. Although we find that a review of legislative history is not
warranted given the plan language of the section, we find it interesting to note that the original version of the bill
used broad savings language: "Once a political subdivision has come under the operation of such a law a subsequent
loss of population shall not remove that political subdivision from the operation of that law." Yet, once assigned to
committee, the language was tailored to only apply to a "city not located in a county." Journal of the House, 76th
Gen. Ass., 1st Reg. Sess., Eighteenth Day, p. 343 (Mo. Feb. 10, 1971).
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obvious omissions by the legislature are generally presumed to be intentional exclusions.
Id. Here, the legislature was aware of the possibility that political subdivisions could fall
out of the provisions of a statute if they lost population. To remedy this problem they
crafted a protection for one, and only one, subdivision. A review of the legislative
history reveals that they edited boarder language that would have offered a universal
protection to language protecting only one type of subdivision. As such, we find that
applying the rule of expressio unius est exclusion alterius is warranted in this case.
When the legislature expressly stated that it was amending section 1.100 to address the
fear that St. Louis City would fall out of the control of statutes in the event that it lost
population, it is clear that the legislature did not believe the language "as well as those in
that category at the time the law was passed" already grandfathered political subdivisions.
This Court is to presume the legislature did not insert superfluous language and
there is no reasonable explanation for the legislature amending section 1.100.2 to
expressly provide for population grandfathering in St. Louis City if it was already
provided for by the first sentence. We find that section 1.100 does not grandfather
political subdivisions into statutory provisions except to the extent expressly provided.
C.
The third and final argument for application of §393.1003.1, despite the County's
stated population of 998,954, asks this Court to reconsider how population is calculated
in this State. MWAC contends that although the 2010 U.S. Census found only 998,954
inhabitants, this did not account for military and civilian federal personnel living abroad.
The U.S. Census does not break up personnel living abroad by county, merely finding
20
that, in 2010, 22,551 military and civilian personnel living abroad claimed residence in
Missouri. The Commission and MWAC request that we proportionately allocate these
22,551 individuals by county. In 2010, St. Louis County had 16.68% of the population
and thus, would receive an allocation of an additional 3,762 inhabitants, bringing the
population of the County above one million.
As noted above, section 1.100.1 requires that the federal census be used to
determine population of a political subdivision. Section 1.100.1 requires that population
be "determined on the basis of the last previous decennial census of the United States"
but, as MWAC points out, does not reference whether to include persons counted in the
census as Missourians but not allocated to a specific county. MWAC notes that the U.S.
Census did not include persons living abroad until 1970 so it is reasonable that the statute
does not include reference to how to allocate their numbers. We note, however, that this
also demonstrates that, in the nearly 45 years since the census started including persons
living abroad, Missouri has not found it necessary to amend section 1.100.1 to
specifically include them in a determination of population.
MWAC notes that the United States Supreme Court had recognized that
"inhabitant" includes "persons absent occasionally for a considerable period of time on
public or private business." Franklin v. Massachusetts, 505 U.S. 788, 805 (1992). While
generally the term "inhabitant" might have such a broad inclusion, we find that the term
"population" as used in section 393.1003 has a clear definition provided by section
1.100.1. While section 1.100.1 does not specifically exclude Missourians living abroad it
fails to provide for a clear way to include them. We can find no indication that
21
Missourians living abroad have ever been included in population determinations under
section 1.100.1.5 Such an inclusion would necessitate taking a clear and bright line
determination--population as determined by the U.S. Census--and introduce speculation
as to how many of the Missourians living abroad should be allocated to a specific
subdivision.6 We will not introduce such confusion into a clear test when there is no
indication that such is the intent of the legislature. Had the legislature intended to include
in a subdivision's population Missourians living abroad it certainly could have amended
§1.100.1 at some juncture in the last 45 years.
The Commission is a creature of statute and its powers are limited to those
conferred by statute, either expressly, or by clear implication, as necessary
to carry out the powers specifically granted. If a power is not granted to the
Commission by statute, then the Commission does not have that power.
In re Laclede Gas Co., 417 S.W.3d 815, 819-20 (Mo. App. W.D. 2014) (internal citation
and quotation marks omitted).
The County filed an amicus brief in support of the Commission and MAWC. The
County noted that, as of the 2000 U.S. Census, St. Louis County had a population of
1,016,300. It was the only Missouri county with more than one million inhabitants.
During the period between 2000 and 2010, the legislature enacted many statutes referring
to a charter county with more than one million inhabitants--effectively passing legislation
5
See, generally, Johnston v. Livingston Cty. Comm'n, 462 S.W.3d 859, 867 (Mo. App. W.D. 2015)
(applying §1.100.1 noting that Livingston County's population in 2010 was 15,195--the actual population recorded
by the census, not the population as recorded by the census plus a proportional allocation of Missouri residents
living abroad).
6
The application of Respondent's argument is even more difficult if applied to the almost 1,000 separate
cities and the thousands of other political subdivisions (school districts, fire districts, water districts, etc.) in the
State.
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directed at St. Louis County. According to the 2010 U.S. Census, St. Louis County lost
1.7 percent of its inhabitants, now having a population of 998,954.
If we determine, as we did above, that the County no longer meets the population
requirements of these statutes, the County loses the benefit of those statutes enacted by
the legislature with St. Louis County specifically in mind. While we agree this is the
case, we find that the legislature was aware of the risk of population decline when it
enacted these statutory provisions. "An appellate court 'must enforce statutes as they are
written, not as they might have been written.'" Disalvo Props., LLC v. Bluff View
Commercial, LLC, 464 S.W.3d 243, 249 (Mo. App. E.D. 2015) (quoting Smith v.
McAdams, 454 S.W.3d 418, 421 (Mo. App. W.D. 2015)). If the legislature had wanted to
grandfather St. Louis County into any statute with a population requirement it could have
done so in section 1.100.2.7 St. Louis City is grandfathered into statutes with population
requirements by section 1.100.2's clear statement: "Once a city not located in a county
has come under the operation of such a law a subsequent loss of population shall not
remove the city from the operation of that law." Had the legislature intended the same
treatment for all counties it could have easily adopted a broad grandfathering clause. It
did not. Instead, after considering a broad grandfathering clause, the Legislature adopted
a clause limited and specific to the City of St. Louis. Further, as can be seen from the
statutes quoted above, the legislature felt it necessary to create specific grandfathering
language and provisions in a number of other statutory sections demonstrating that, a
7
We do not opine, as it is not before us, whether to do so would violate the special laws provision of our
Constitution discussed above. See, City of DeSoto v. Nixon, SC94746 (Mo. banc submitted Jan. 12, 2016).
23
general grandfathering provision is most certainly not in section 1.100.2. Had the
legislature intended narrow grandfathering of counties just into the ISRS statutes, the
statute could have and should have been drafted as such. See, e.g., § 67.1846(2) §
311.090.1; § 304.190; §§72.040, 72.050.
Although we accept that this ruling has wide reaching consequence for the
County, it is an undisputed fact that--according to the 2010 U.S. Census--the County no
longer has one million inhabitants. If the legislature intends for those statutes to continue
to apply to the County, amendment is needed, a power limited to the legislative branch of
our government.
Conclusion
We find that there was no statutory authority under which the Commission could
grant ISRS to MWAC because St. Louis County does not have at least one million
inhabitants as required by the statute. As such, the Commission erred in granting
MWAC's petition. This issue is dispositive and we need not address OPC's second issue
on appeal. We remand with instruction to the Commission to dismiss the petition.
__________________________________
Gary D. Witt, Judge
All concur
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