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HOUSE BILL 366, MORE PRETENDED LEGISLATION

 

By Idaho State Rep., Phil Hart
March 7, 2012

NewsWithViews.com

“He has combined with others to subject us to a jurisdiction foreign to our Constitution, and unacknowledged by our laws; giving his assent to their acts of pretended legislation.” -Declaration of Independence.

In early February of this year the House Revenue and Taxation Committee passed House Bill 366 which is entitled, “AGREEMENT WITH OTHER STATES FOR OFFSET OF REFUNDS”. At the moment, the bill is not moving forward as its passage by the whole body is uncertain.

What HB366 would do is to authorize the State Tax Commission to enter into an agreement with another state to administratively seize the tax refund due to a citizen of another state if that person owes money to the state of Idaho. It constitutes allowing our State Tax Commission to collect taxes outside of our state boarders, a power traditionally possessed by the federal government.

There is a provision in the United States Constitution that requires congressional approval before any state can enter into an agreement with another state. It is called the ‘compact clause” and it reads: “No state shall, without the consent of congress, enter into any agreement or compact with another state.” U.S. Const. Article I, section 10, clause 3. Clearly HB366 relates to an “agreement with another state.”

Over the years the Supreme Court has reasoned that it was not every agreement between states that needed to have congressional approval. The boundary line that appears to be set by the Court is where those agreements that encroach on federal power need congressional approval. If the agreement does not encroach on federal power, then the Court says no agreement is needed.

In reading the case United States Steel Corp. v. Multistate Tax Commission 434 US 452 (1978) we find language in the case that I think allows us to conclude that HB366 needs congressional approval before it would be allowed.

The U.S. Steel Corp. Case sets up criteria from Virginia v. Tennessee 148 US 503 which stated

"Looking at the clause in which the terms “compact” or “agreement” appear, it is evident that the prohibition is directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States."

In the United States Steel Corp. v. Multistate Tax Commission, the court quoted a Justice Field from Virginia v. Tennessee again where he said:

"Looking at the clause in which the terms 'compact' or 'agreement' appear, it is evident that the prohibition is directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States." Id. At 519.

"The terms 'agreement' or 'compact' taken by themselves are sufficiently comprehensive to embrace all forms of stipulation, written or verbal, and relating to all kinds of subjects; to those to which the United States can have no possible objection or have any interest in interfering with, as well as to those which may tend to increase and build up the political influence of the contracting States, so as to encroach upon or impair the supremacy of the United States or interfere with their rightful management of particular subjects placed under their entire control." Id. At 517-8.

Referring to the Judicial Article of the United States Constitution, we find in section 2, clause 1 that the Federal Courts have exclusive jurisdiction in controversies “between a state and citizens of another state.”

That is exactly what is being targeted by House Bill 366. House Bill 366 sets up a summary procedure for our state to seize the property of a citizen of another state without having gone to either a court in the other state, or to federal court.

House Bill 366 would increase the power of our state in an area where the federal government has exclusive jurisdiction, that being the judicial jurisdiction between a state and a citizen of another state. Therefore, according to the logic of United States Steel Corp. vs. Multistate Tax Commission, it is my view we need congressional approval before we can implement House Bill 366. Without the passage of HB366, any tax collecting agency can always go to court in the state where they hope to collect. Similarly, the states had to get congressional approval with regard to child support payments in order to collect such payments across state lines.

That was the easy answer. Yet, there is a whole additional issue which needs to be argued. That is the relative power of an individual citizen vs. the state. If our state government messes with one of our citizens, that citizen can complain to the governor’s office or to their legislator. This is part of the natural relationship between a citizen and their government in a representative form of government.

Under the scenario of House Bill 366, it is a foreign state that will seize the property of our citizens. Or it will be our state that will seize the property of a citizen of a foreign state. So who is this citizen going to complain to? These individuals will have no political connection with the government who is seizing their property.

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It is a “due process” issue. And “due process” has no precise definition. What is or is not “reasonable” ends up being the criteria we use to determine what is either adequate or inadequate “due process” . I think having a foreign state seize the property of a citizen in our state without going through some sort of judicial process is unreasonable. And the Fourteenth Amendment says, “Nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

I believe House Bill 366 would be found to be unconstitutional if challenged in court. Whether HB366 is a good idea or a bad idea is debatable. But one thing is certain, HB366 needs congressional approval before it can be implemented. Therefore, should the Idaho Legislature decide to pass HB366, I believe it would constitute “pretended legislation”, a term Thomas Jefferson coined when he wrote the Declaration of Independence.

2012 Phil Hart - All Rights Reserved

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Phil received a bachelor's degree in Civil Engineering from the University of Utah and a master's degree in Business Administration from the Wharton School at the University of Pennsylvania.

In 2004, Phil Hart was elected by the Citizens of North Idaho to represent District 3 in the Idaho Legislature. District 3 encompasses the northern part of Kootenai County. Phil Hart is actively seeking re-election for the 2008 legislative term.

Phil has dedicated a significant amount of personal time for the past ten years in trying to resolve the constitutionality Income Tax. His efforts have resulted in the publication of his book Constitutional Income, which is in its third edition. His book has been steadily covering ground across the United States. He also litigated the issue with the IRS and petitioned the Supreme Court.

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E-mail:philhart@constitutionalincome.com


 

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What HB366 would do is to authorize the State Tax Commission to enter into an agreement with another state to administratively seize the tax refund due to a citizen of another state if that person owes money to the state of Idaho.