1. The generation of electricity from water power and the
transmission of the electricity over wires from the generator to
consumers in another state are, from the practical standpoint of
taxation, distinct processes, the one local, the other interstate,
like the making and shipping of goods to order, although the
generation and transmission are apparently simultaneous, and both
respond instantaneously to the turning of a consumer's switch. P.
286 U. S.
177.
2. Therefore, a state license tax on the electricity produced at
a plant within the state is valid under the commerce clause as
applied to that which is transmitted therefrom and sold to
consumers in another state. P.
286 U. S.
181.
3. In deciding whether a part of a statute is separable, the
fact that the bill was passed after a bill like it but lacking the
part in question had been withdrawn by unanimous consent does not
justify the inference that the legislature would not have passed
the statute if that part had been omitted. P.
286 U. S.
183.
4. A clause in a statute declaring that an adjudication that any
of its provisions is unconstitutional shall not affect the validity
of the Act as a whole, or any other of its provisions or sections,
has the effect of reversing the common law presumption that the
legislature intends an act to be effective as an entirety, by
putting in its place the opposite presumption of divisibility. P.
286 U. S.
184.
5. This presumption of divisibility must prevail unless the
inseparability of the provisions be evident or there be a clear
probability that the legislature would not have been satisfied with
the statute without the invalid part.
Id.
6. The primary object of the Idaho statute here involved (Laws
1931, Ex.Sess., c. 3) is to raise revenue by taxing production of
electricity. Section 5, which provides an exemption as to
electricity
Page 286 U. S. 166
used for pumping water for irrigating land in Idaho, is
secondary in purpose, and its validity may be considered apart. P.
286 U. S.
185.
7. In the Idaho law taxing electricity produced for sale, the
exemption of that used for irrigating lands, inserted for the
benefit of those so using it, is consistent with the equal
protection clause of the Fourteenth Amendment, because, in the arid
region, the irrigation of even private lands is a matter of public
concern. P.
286 U. S.
185.
8. The question whether a state taxing statute will operate
unconstitutionally to take the money of one person to give to
another will not be decided here when the construction of the
statute is involved and has not been determined by the state
supreme court, and when it does not appear that the party
complaining is presently in danger of such an application of it. P.
286 U. S.
186.
9. This Court cannot assume in advance that a state court will
so construe or apply a state statute as to render it obnoxious to
the Federal Constitution.
Id.
10. To warrant holding a statute invalid under a constitutional
requirement that "every act shall embrace but one subject and
matters properly connected therewith, which subject shall be
expressed in the title," the violation must be substantial and
plain. P.
286 U. S.
187.
11. The Idaho statute,
supra, complies in this respect
with § 16, Art. III, of the Idaho constitution.
Id.
12. The statute is to be construed as laying the tax only on the
electricity produced for barter, sale, or exchange, to be
determined by deducting from the production of the generator the
amounts disposed of otherwise, including the part used by the
producer, or consumed in effecting transmission. P.
286 U. S.
188.
13. Neither the validity of the tax nor its certainty is
affected because it may be necessary to ascertain, as an element in
the computation, the amounts delivered in another jurisdiction. P.
286 U. S.
190.
14. In the administration of a revenue act involving complicated
measurements and computations, fair and reasonable approximations
must suffice where absolute precision is impracticable.
Id.
54 F.2d 803 affirmed.
Appeal from the final decree in a suit to enjoin the enforcement
of a law taxing production of electrical power. The decree
dissolved an interlocutory injunction and required the petitioner
corporation to pay the tax, with interest, but without penalties
accrued during the pendency of the suit.
Page 286 U. S. 175
MR. JUSTICE SUTHERLAND delivered the opinion of the court.
The Utah Power & Light Company is a Maine corporation doing
business in the States of Idaho, Utah, and Wyoming, under the laws
of those states. The corporation is a public utility engaged in
generating, transmitting, and distributing electric power and
energy for barter, sale, and exchange to consumers in each of these
three states, and in interstate commerce among them. The present
suit was brought to enjoin the enforcement of an act of the Idaho
Legislature levying a license tax on the manufacture, generation,
or production, within the state, for barter, sale, or exchange, of
electricity and electrical energy. Laws of Idaho 1931
(Extraordinary session), c. 3.
Section 1 of the act provides that any individual, corporation,
etc., engaged in the generation, manufacture, or production of
electricity and electrical energy, by any means, for barter, sale,
or exchange shall, at a specified time, render a statement to the
commissioner of law enforcement of all electricity and electrical
energy generated, manufactured, or produced by him or it in the
state during the preceding month, and pay thereon a license tax of
one-half mill per kilowatt hour, "measured at the place of
production." Sections 2, 3, and 4 provide for the time and method
of payment of the tax, and the furnishing of appropriate
information. Section 4 further requires the producer to maintain at
the point or points of production suitable instruments for
measuring the electricity or electrical energy produced. Section 5,
which is the subject of a distinct attack, provides:
"All electricity and electrical energy used for pumping water
for irrigation purposes to be used on lands in the State of Idaho
is exempt from the provisions of this Act, except in cases where
the water so pumped is sold or rented
Page 286 U. S. 176
to such irrigated lands.
Provided, the exemption here
given shall accrue to the benefit of the consumer of such
electricity or electrical energy.
Provided further that
the full amount of such license tax which would have been due from
such producers of electricity and electrical energy, if such
exemptions had not been made, shall be credited annually for the
year in which the exemptions are made on the power bill to the
consumer by the producer of such electricity and electrical energy,
furnishing such power, and such producer shall include a statement
of the amount of electricity and electrical energy exempted by this
section, furnished by it for the purpose of pumping water for
irrigation purposes on lands in the State of Idaho, to the
Commissioner of Law Enforcement of the State of Idaho as a part of
the statement required by Section 1 of this Act, together with a
statement of the credits made on the power bills to the consumers
of such electricity and electrical energy for the pumping of water
for irrigation to be used on lands in the State of Idaho."
Section 8 imposes a penalty for any violation of the act, or
failure to pay the license tax provided for therein when due, in
the sum of three times the amount of the unpaid or delinquent tax,
to be recovered by civil action. Section 11 provides that, if any
section or provision of the act be adjudged unconstitutional or
invalid, such adjudication shall not affect the validity of the act
as a whole, or of any section or provision thereof not specifically
so adjudged unconstitutional or invalid.
After the filing of the complaint, an interlocutory injunction
was granted,
52 F.2d
226, and, thereafter, appellees answered. Upon the evidence
reported by a master, to whom the case had been referred, the court
below (composed of three judges, as required by law) made findings
of fact and conclusions of law and entered a final decree
dissolving the interlocutory injunction and
Page 286 U. S. 177
requiring appellant to pay the tax in question with interest,
but without any penalties which might have accrued during the
pendency of the suit., 54 F.2d 803. This appeal followed.
The validity of the act under the federal and state
constitutions is assailed upon four grounds: (1) that it imposes a
direct burden on interstate commerce in violation of clause 3, § 8,
Art. I of the Federal Constitution; (2) that it denies appellant
the equal protection of the laws and deprives it of property
without due process of law in violation of the Fourteenth Amendment
and of a corresponding provision of the state constitution in that
§ 5 of the act compels the appropriation and payment of money by
appellant for the benefit of private individuals, and that, § 5
being unconstitutional, the act as a whole must fall; (3) that the
act violates § 16, Art. 3 of the state constitution, which provides
that every act shall embrace but one subject and matters properly
connected therewith, which subject shall be expressed in the title;
(4) that the act is so uncertain and ambiguous in specified
particulars that its enforcement is left to arbitrary
administrative action without a legislative standard, and thus
violates the due process of law clause of the Fourteenth
Amendment.
First. Appellant contends that the tax is not one on
manufacture or production or on the extraction of a product of
nature, but on the transfer or conveyance of energy in nature from
its source to its place of use; that, in part, appellant's system
consists of generating stations in Idaho and transmission lines
across the boundary into Utah, and thence to various consumers, the
combined action to which constitutes an operation in interstate
commerce; that the energy is brought to the consumers in Utah
directly from its source in the water fall; that thus the generator
is an instrumentality of interstate commerce; that the process of
generation is simultaneous and interdependent with
Page 286 U. S. 178
that of transmission and use, and, because of their
inseparability, the whole is interstate commerce; that, since the
intent of the act is to tax the whole business, and no provision is
made for the separate determination of interstate and intrastate
business, the act, in burdening interstate commerce, is void in its
entirety.
On the other hand, appellees say that the tax is laid upon the
generation of electrical energy as a distinct act of production,
and without regard to its subsequent transmission; that the process
of generation is one of converting mechanical energy into
electrical form; that the resulting change is substantial, and is a
change in the physical characteristics of the energy in respect to
voltage, current, and character as alternating or direct current,
according to the design of the mechanical generating devices; that
the process of conversion is completed before the pulses of energy
leave the generator in their flow to the transformer; that the tax
is measured by the amount of electrical energy generated, without
regard to its subsequent transmission; that such transmission is
subsequent to, and separable from, generation, and, in effect,
corresponds to the transportation of goods after their manufacture;
that the generation of the electrical energy is local, and only its
transmission is in interstate commerce; that, since the tax is
imposed in respect of generation, it is not invalidated by reason
of any intent on the part of the producer to transport across state
lines.
In the light of what follows, we find it unnecessary to state or
consider the claims of the parties as to the effect of the
interposition of the transformer between the generator and the
places of consumption.
From the foregoing greatly abbreviated, but, for present
purposes, we think sufficient, statement of the views of the
respective parties, it is apparent that, in the last analysis, the
question we are called upon to solve is this: upon the facts of the
present case, is the generation of electrical energy, like
manufacture or production generally,
Page 286 U. S. 179
a process essentially local in character and complete in itself,
or is it so linked with the transmission as to make it an
inseparable part of a transaction in interstate commerce? From the
strictly scientific point of view, the subject is highly technical,
but, in considering the case, we must not lose sight of the fact
that taxation is a practical matter, and that what constitutes
commerce, manufacture, or production is to be determined upon
practical considerations.
Electrical energy has characteristics clearly differentiating it
from the various other forms of energy, such as chemical energy,
heat energy, and the energy of falling water. Appellant here, by
means of what are called generators, converts the mechanical energy
of falling water into electrical energy. Thus, by the application
of human skill, a distinct product is brought into being and
transmitted to the places of use. The result is not merely
transmission; nor is it transmission of the mechanical energy of
falling water to the places of consumption; but it is, first,
conversion of that form of energy into something else, and, second,
the transmission of that something else to the consumers. While
conversion and transmission are substantially instantaneous, they
are, we are convinced, essentially separable and distinct
operations. The fact that, to ordinary observation, there is no
appreciable lapse of time between the generation of the product and
its transmission does not forbid the conclusion that they are,
nevertheless, successive, and not simultaneous, acts.
The point is stressed that, in appellant's system, electricity
is not stored in advance, but produced as called for. The consumer
in Utah, it is said, by merely turning a switch, draws directly
from the water fall in Idaho, through the generating devices,
electrical energy which appears instantaneously at the place of
consumption. But this is not precisely what happens. The effect of
turning the switch in Utah is not to draw electrical energy
directly
Page 286 U. S. 180
from the water fall, where it does not exist except as a
potentiality, but to set in operation the generating appliances in
Idaho, which thereupon receive power from the falling water and
transform it into electrical energy. In response to what in effect
is an order, there is production as well as transmission of a
definite supply of an article of trade. The manufacture to order of
goods and their immediate shipment to the purchaser furnishes a
helpful analogy, notwithstanding the fact that, there, the
successive steps from order to delivery are open to physical
observation, while here, the succession of events is chiefly a
matter of inference, although inference which seems unavoidable.
The process by which the mechanical energy of falling water is
converted into electrical energy, despite its hidden character, is
no less real than the conversion of wheat into flour at the
mill.
The apparent difficulty in perceiving the analogy arises
principally from the fact that electrical energy is not a
substance, at least in common meaning. It cannot be bought and sold
as so many ounces or pounds, or so many quarts or gallons. It has
neither length, breadth, nor thickness. But that it has actual
content of some kind is clear, since it is susceptible of
mechanical measurement with the necessary certainty to permit
quantitative units to be fixed for purposes of barter, sale, and
exchange. However lacking it may be in body or substance,
electrical energy nevertheless possesses many of the ordinary
tokens of materiality. It is subject to known laws, manifests
definite and predictable characteristics, may be transmitted from
the place of production to the point of use, and there made to
serve many of the practical needs of life.
We think, therefore, it is wholly inaccurate to say that
appellant's entire system is purely a transferring device. On the
contrary, the generator and the transmission lines perform
different functions, with a result comparable, so
Page 286 U. S. 181
far as the question here under consideration is concerned, to
the manufacture of physical articles of trade and their subsequent
shipment and transportation in commerce. Appellant's chief
engineer, although testifying that generation is a part of the
process of transferring energy, said on cross-examination that, in
the process of generation, there is a
"conversion of the mechanical energy in the turbine shaft into a
different form of energy -- that is, electrical energy. It must be
converted into electrical energy before it can be transmitted. . .
. This process of transformation is complete at the generator, and
you have a greater amount of energy there, capable of doing a
greater amount of mechanical work at the generator than you do
after transmitting it into Utah."
The evidence amply sustains the conclusion that this
transformation must take place as a prerequisite to the use of the
electrical product, and that the process of transferring, as
distinguished from that of producing, the electrical energy, begins
not at the water fall, but definitely at the generator, at which
point measuring appliances can be placed and the quantum of
electrical energy ascertained with practical accuracy.
The various specific objections to the findings made below, and
the failure to adopt others suggested by appellant, become
immaterial in view of our conclusions. We are satisfied, upon a
consideration of the whole case, that the process of generation is
as essentially local as though electrical energy were a physical
thing, and to that situation we must apply, as controlling, the
general rule that commerce does not begin until manufacture is
finished, and hence the commerce clause of the Constitution does
not prevent the state from exercising exclusive control over the
manufacture.
Cornell v. Coyne, 192 U.
S. 418,
192 U. S.
428-429. "Commerce succeeds to manufacture, and is not a
part of it."
United states v. E. C. Knight Co.,
156 U. S. 1,
156 U. S. 12.
Page 286 U. S. 182
Without regard to the apparent continuity of the movement,
appellant, in effect, is engaged in two activities, not in one
only. So far as it produces electrical energy in Idaho, its
business is purely intrastate, subject to state taxation and
control. In transmitting the product across the state line into
Utah, appellant is engaged in interstate commerce, and state
legislation in respect thereof is subject to the paramount
authority of the commerce clause of the Federal Constitution. The
situation does not differ in principle from that considered by this
Court in
Oliver Iron Mining Co. v. Lord, 262 U.
S. 172. There, the State of Minnesota had imposed an
occupation tax on the business of mining ores. The tax was assailed
as being in conflict with the commerce clause. It appeared that
substantially all the ores there in question were mined for
delivery to consumers outside the state, and that the ores passed
practically at once after extraction into the channels of
interstate commerce. The greater part of the ores came from open
pit mines, to which empty cars were run and there loaded, the ores
being severed from their natural bed by means of steam shovels and
lifted directly into the cars. When loaded, these cars were
promptly returned to the railroad yards from which they came, and
were there put into trains and continued their interstate journey.
The several steps follows in such succession that there was
practical continuity of movement from the severance of the ores to
the end of their journey in another state. Upon these facts, the
Court held that the commerce clause was not infringed.
"The ore does not enter interstate commerce," it was said, p.
262 U. S.
179,
"until after the mining is done, and the tax is imposed only in
respect of the mining. No discrimination against interstate
commerce is involved. The tax may indirectly and incidentally
affect such commerce,
Page 286 U. S. 183
just as any taxation of railroad and telegraph lines does, but
this is not a forbidden burden or interference."
In
Hope Natural Gas Co. v. Hall, 274 U.
S. 284, this Court considered an act of the State of
West Virginia imposing a tax upon the production, among other
things, of natural gas. The chief business of the Hope Gas Company
was the production and purchase of natural gas in West Virginia,
and the continuous and uninterrupted transportation of it through
pipelines into adjoining states, where it was sold, delivered, and
consumed. Most of it passed into interstate commerce by continuous
movement from the wells where it originated. Interpreting and
following the decision of the state court, it was held that the tax
was to be computed upon the value of the gas at the well, and that,
if, thereafter, executive officers should fix values upon an
improper basis, appropriate relief would be afforded by the courts.
The tax was sustained as not involving an infringement of the
commerce clause of the Constitution.
In the light of what we have said respect of the character of
the product here involved, the manner of its production, and the
relation of such production to its interstate transmission, these
cases in principle clearly control the present case, and render
further discussion or citation of authorities unnecessary.
Second. The attack upon § 5 of the act, which is copied
on a preceding page, is based upon the contention that it does not
grant an exemption, but has the effect of laying a tax for the
benefit of favored consumers -- that is to say, of selected private
persons, and that the enforcement of the section in respect of
allowances of credits by the producer to the favored consumers will
result in taking the money of the former and giving it to the
latter. A further contention is that § 5 is an inseparable part of
the act, and, being unconstitutional, and entire act must fall
Page 286 U. S. 184
with it. In support of the latter point, the grounds stated are
that the legislative history discloses as a matter of fact that the
act would not have been passed had § 5 not been included, and that
it is apparent on the face of the act itself that the provisions of
the section are essential and inseparable parts of the act as an
entirety. It will shorten our consideration of the first point if
we begin by disposing of the second point as to the question of
separability.
The claim that the legislative history discloses that the act
would not have passed without § 5 seems to rest entirely upon the
fact that a bill for a similar act, but which did not contain the
challenged section, failed of passage, but that, upon § 5's being
included, the act thereafter was passed. The bill first introduced
did not come to a vote, but was withdrawn from consideration by
unanimous consent. That it would have been rejected if put to a
vote rests upon mere supposition. There is no real ground for an
opinion one way or the other. Courts are not justified in resting
judgment upon a basis so lacking in substance.
Nor do we think the inseparability of the section from the rest
of the act appears from the face of the legislation. The act itself
(§ 11) provides that an adjudication that any provision of the act
is unconstitutional shall not affect the validity of the act as a
whole, or of any other provision or section thereof. While this
declaration is but an aid to interpretation, and not an inexorable
command (
Dorchy v. Kansas, 264 U.
S. 286,
264 U. S.
290), it has the effect of reversing the common law
presumption, that the legislature intends an act to be effective as
an entirety, by putting in its place the opposite presumption of
divisibility, and this presumption must be overcome by
considerations that make evident the inseparability of the
provisions or the clear probability that the legislature would not
have been satisfied with the statute unless it
Page 286 U. S. 185
had included the invalid part.
Williams v. Standard Oil
Co., 278 U. S. 235,
278 U. S.
241-242.
It fairly may be assumed that the Idaho Legislature, in making
this declaration, had in mind every provision of the act, including
§ 5. The primary object of the statute under review plainly is to
raise revenue. The exemption made by § 5 and the provisions for
carrying that exemption into effect are secondary. We find no
warrant for concluding that the legislature would have been content
to sacrifice an important revenue statute in the event that relief
from its burdens in respect of particular individuals should become
ineffective. On the contrary, it seems entirely reasonable to
suppose that, if the legislature had expressed itself specifically
in respect of the matter, it would have declared that the tax,
being the vital aim of the act, was to be preserved even though the
specified exemptions should fall for lack of validity.
Field v.
Clark, 143 U. S. 649,
143 U. S.
696-697;
People ex rel. Alpha P. C. Co. v.
Knapp, 230 N.Y. 48, 60-63, 129 N.E. 202.
In the light of these conclusions, § 5, in respect of the
constitutional question, stands apart from the remainder of the
act, and is to be considered accordingly. The court below followed
the decision of the state supreme court (
Williams v.
Baldridge, 48 Idaho, 618, 284 P. 203), in holding that § 5
granted an exemption ultimately for the benefit of the consumers of
electrical power for irrigation purposes on lands within the state.
It seems to us plain that the purpose of the act was to relieve the
producer from liability for the tax
pro tanto, and to pass
on to the irrigation consumers the benefit thereof to the extent,
and only to the extent, of the savings effected through the
exemption. There is nothing to suggest that the legislature
intended to cast any additional burden upon the producer or require
him to yield to the irrigation consumers anything beyond the
equivalent of the exemption. The irrigation of even private lands
in the arid region is a matter of public concern (
Clark v.
Nash, 198 U. S.
361),
Page 286 U. S. 186
and we are of opinion that an exemption of the character here
involved is not precluded by the equal protection clause of the
Fourteenth Amendment.
Compare Louisville Gas & Electric Co.
v. Coleman, 277 U. S. 32,
277 U. S.
40.
The provisions in respect of the allowance of credits to the
consumers by the producer present a question of more difficulty. If
these provisions embody nothing more than a method of accounting to
make sure that the irrigation consumers shall not bear, in whole or
in part, the burden of the tax from which the producer is exempt,
they would seem to be without fault. If, by construction or in
application, they result in taking from the producer more than the
sum of the exemption, a different question would arise. The Supreme
Court of Idaho thus far has not construed § 5 in respect of the
provisions now under consideration. The point was presented but
reserved in
Williams v. Baldridge, supra, p. 631. It does
not appear that appellant is presently in any such danger of an
unconstitutional application of these provisions of the statute as
to entitle it to invoke a decision here upon the question, and the
rule is well settled that "a litigant can be heard to question a
statute's validity only when and so far as it is being or is about
to be applied to his disadvantage."
Dahnke-Walker Milling Co.
v. Bondurant, 257 U. S. 282,
257 U. S. 289;
Oliver Iron Mining Co. v. Lord, supra, pp.
180 U. S. 180-181;
Jeffrey Mfg. Co. v. Blagg, 235 U.
S. 571,
235 U. S. 576;
Gorieb v. Fox, 274 U. S. 603,
274 U. S. 606.
Primarily, the construction of these provisions of the statute is
for the state supreme court, and we cannot assume in advance that
such a construction will be adopted, or such an application made of
the provisions, as to render them obnoxious to the Federal
Constitution. In
Plymouth Coal Co. v. Pennsylvania,
232 U. S. 531,
232 U. S.
544-546, Mr. Justice Pitney pointed out that:
". . . In cases other than such as arise under the contract
clause of the Constitution, it is the appropriate
Page 286 U. S. 187
function of the court of last resort of a state to determine the
meaning of the local statutes. And, in exercising the jurisdiction
conferred by § 237, Judicial Code, it is proper for this Court
rather to wait until the state court has adopted a construction of
the statute under attack than to assume in advance that a
construction will be adopted such as to render the law obnoxious to
the Federal Constitution."
This was said in a case brought for review from the supreme
court of a state, but the same doctrine was recognized in
Arizona Employers' Liability Cases, 250 U.
S. 400,
250 U. S. 430,
which came here on error to a federal district court.
Third. Section 16, Art. III, of the Idaho Constitution
provides: "Every act shall embrace but one subject and matters
properly connected therewith, which subject shall be expressed in
the title." Appellant contends that the act now under review
contains two subjects: (a) the levy of a license tax on electrical
energy generated in the state, and (b) a subsidy (§ 5) in favor of
irrigation pumping users. The purpose of the constitutional
provision, as this Court said in
Posados v. Warner, B. &
Co., 279 U. S. 340,
279 U. S.
344,
"is to prevent the inclusion of incongruous and unrelated
matters in the same measure and to guard against inadvertence,
stealth and fraud in legislation. . . . The courts disregard mere
verbal inaccuracies, resolve doubts in favor of validity, and hold
that, in order to warrant the setting aside of enactments for
failure to comply with the rule, the violation must be substantial
and plain."
We cannot agree with the claim that the violation here is
substantial and plain. The statute levies a license tax and creates
an exemption therefrom in specified cases. This exemption, although
it inures to the benefit of third persons, and whether it be
constitutional or not, is obviously a matter properly connected
with the subject matter of the act. It is nothing more than a
limitation upon the generality of the tax. The Supreme Court of
Page 286 U. S. 188
Idaho has laid down the proper rule in
Pioneer Irrigation
Dist. v. Bradley, 8 Idaho, 310, 68 P. 295, to the effect that
the purpose of the constitutional provision is to prevent the
inclusion in title and act of two or more subjects diverse in their
nature and having no necessary connection, but that, if the
provisions relate directly or indirectly to the same subject, have
a natural connection therewith, and are not foreign to the subject
expressed in the title, they may be united. Following this rule, we
are of opinion that the objection is untenable.
It is further said that the subject of the act is not expressed
in the title, since the title purports to levy a license tax on
electricity and electrical energy generated, etc., for barter,
sale, or exchange, while the act requires payment of a tax upon
such electricity and electrical energy generated, etc., in the
State of Idaho for any purpose and measured at the place of
production. The point made is that a tax on energy generated
specifically for barter, sale, or exchange, and a tax on all energy
generated or produced in the state, are entirely different things.
The force of the contention depends upon the construction of the
act. We are of opinion, as will appear more fully under the next
heading, that the act, in harmony with the title, imposes a tax
only upon the energy which is generated for barter, sale, or
exchange.
Fourth. Appellant contends that the act is so uncertain
and ambiguous as to require arbitrary administrative action without
a legislative standard, and thus take appellant's property without
due process of law. The uncertainties said to exist are: (1) that
it cannot be determined whether the tax is levied on all electrical
energy generated or produced, or only on such as is generated or
produced for barter, sale or exchange, and (2) that, if the latter
be the true construction, the act affords no guide for the
determination of what electrical energy in fact is generated for
barter, sale, or exchange, but, by fixing the
Page 286 U. S. 189
place and method of measurement, it excludes the possibility of
a determination of that matter. The same uncertainties are said to
exist in respect of § 5.
We think the act is reasonably open to the construction that the
tax is to be measured by the kilowatt hours generated or produced
for barter, sale, or exchange. The purpose, as manifested by the
title, is to levy a tax "on electricity and electrical energy
generated, manufactured or produced in the Idaho for barter, sale
or exchange." The act itself in terms applies to those engaged in
the production of electricity and electrical energy in the State of
Idaho "for barter, sale or exchange." The producer is required to
render a statement and pay a license "on all such electricity and
electrical energy so generated, manufactured, or produced, measured
at the place of production." Considering these provisions and, in
connection therewith, the title and the general scope and purpose
of the act, the intent to impose the tax only in respect of energy
generated for barter, sale, or exchange is sufficiently clear.
The limitation of the tax to electrical energy generated only
for barter, sale, or exchange obviously requires that, in
determining the amount so generated, there be excluded from the
computation all electrical energy generated for other purposes. In
other words, the intent of the act being to levy a tax only in
respect of electrical energy generated for the purposes named, it
becomes necessary, in order to effectuate the intention, to deduct
from the amount produced and measured at the generator such amounts
as are generated for appellant's own use, or otherwise than for the
specified purposes. We think this view is not precluded by the
provision in § 1 of the act that the tax is levied in respect of
the electrical energy generated, "measured at the place of
production," nor by the further provision in § 4 that the producer
shall maintain at the point of production suitable appliances
Page 286 U. S. 190
for measuring the electrical energy produced. Since the tax
applies not to all electrical energy generated, and therefore not
to all measured at the point of production, but only to such as is
produced for barter, sale, or exchange, it necessarily follows that
other factors than the basic measurement at the generator must be
taken into consideration. That is, to put the matter concretely,
the amount of the initial production must first be ascertained by
measurement at the place of production, and from that there must be
taken amounts used by the producer or consumed in effecting
transmission (including so-called line or system losses), or
disposed of otherwise than by barter, sale, or exchange, the
remainder only being subject to the tax. The record shows that the
ascertainment of these necessary factors is practicable, testimony
being to the effect that the flow of energy passing any point in
the transmission system, as well as the amount delivered at any
point on the system, can be measured with fair accuracy if proper
instruments be attached. Neither the validity of the tax nor its
certainty is affected, because it may be necessary to ascertain, as
an element in the computation, the amounts delivered in another
jurisdiction.
See American Mfg. Co. v. St. Louis,
250 U. S. 459,
250 U. S. 463;
Hope Natural Gas Co. v. Hall, supra.
It is said that the Commissioner, who administers the act, has
not provided for these deductions or the means for determining
them. But the Commissioner must administer the act as it is
construed, and it is not to be supposed that he will not now
properly do so. Undoubtedly, the administration of an act like this
one is attended with some difficulty. Measurements and calculations
are more or less complicated. Absolute precision in either probably
cannot be attained, but that is so to a greater or less degree in
respect of most taxing laws. If, for example, absolute exactness of
determination in respect of net income, deductions, valuation,
losses, obsolescence,
Page 286 U. S. 191
depreciation, etc., were required in cases arising under the
federal income tax law, it is safe to say that the revenue from
that source would be much curtailed. The law, which is said not to
require impossibilities, must be satisfied, in many of its
applications, with fair and reasonable approximations.
Compare
Smith v. Illinois Bell Tel. Co., 282 U.
S. 133,
282 U. S. 150;
Story Parchment Co. v. Paterson Parchment Paper Co.,
282 U. S. 555,
282 U. S.
563-566;
Commonwealth v. People's Five Cents Savings
Bank, 87 Mass. 428, 436.
Decree affirmed.