No. 1.3221 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

SLCURIcIY BANK AND TRUST COMPANY et al., 

Plaintiff and Respondent, 

-vs - 

HOLLIS G. CONNORS, as Montana State Treasurer, 

dnd KEITH L. COLBO, as Director of Montana 

Uepartment of Revenue, 

Defendants and Appellants, ...................... 

FIRST NATIONAL BANK AND TRUST COMPANY OF HELENA et al., 

Intervenor, 

-vs - 

SbCUKLTY BANK AND TRUST COMPANY, a Montana banking 

Corporation, Hollis G. Connors, as Montana State Treasurer, 

(3nd Keith L. Colbo as Director of Montana Department 

of Revenue, 

Defendants. 

&Ippeal from: District Court of the First Judicial District, 

Honorable Gordon R. Bennett, Judge presiding. 

Courlsel of Record: 

For Appellants : 

Hon. Robert L. Woodahl, Attorney General, Helena, 

Montana 

Joseph R. Massman argued, Helena, Montana 

cor Respondent: 

Cough, Booth, Shanahan and Johnson, Helena, Montana 

Ronald F. Waterman argued and Ward A. Shanahan 

appeared, Helena, Montana 

Morrow, Nash and Sedivy, Bozeman, Montana 

Rdmund P. Sedivy argued, Bozeman, Montana 

'rowe, Neely and Ball, Billings, Montana 

Submitted: April 21, 1976 

Decided ?" 

Filed : 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

Defendants appeal through the Department of Revenue from 

a summary judgment in the district court ordering the state treasurer to refund to plaintiff Security Bank and Trust Company the 

corporation license tax for the year 1972 paid by plaintiff under 

protest. Appeal is also taken from the district court's decree on 

behalf of intervenor First National Bank and Trust Company of Helena, 

that the Department may not levy and collect a corporation license 

tax against intervenor, a federally chartered national bank, for the 

year 1972. 

The controversy arises as a result of the passage by the 

United States Congress in 1969 and later, of amendments to the state 

taxation of national banks provision, United States Revised Statutes 

$5219, 12 U.S.C. $548, and certain Montana legislative enactments 

pursuant thereto. The only issue is whether the state of Montana is 

permitted to levy and collect a corporation license tax from either 

state chartered or federally chartered banks doing business in Montana 

for the tax year beginning January 1, 1972. 

The facts upon which the district court based its summary 

judgment were stipulated in two separate documents between the parties, 

and are summarized herein. 

Security Bank is a Montana banking corporation duly 

authorized and licensed under Montana law to engage in commercial 

banking, with its principal office in Bozeman, Montana. Defendant and 

appellant Connors was the treasurer of Montana; defendant and appellant 

Colbo was the director of the Department of Revenue. 

Security Bank paid its corporation license tax for the 

year 1972, under protest, to defendant state treasurer in the sum of 

$31,752.38; the payment was received by the Department and deposited 

with defendant treasurer. Security Bank filed a complaint to recover 

the payment in the district court within the time prescribed by law. 
In the immediate bank trade territory of Bozeman, there 

were at the time of suit three named and several other national banks 

with banking charters from the United States government under the 

National Banking Act; all these banks were in competition with 

Security Bank. 

The tax paid by Security Bank was a tax levied by the 

state of Montana on all nonexempt corporations licensed to do business in Montana under section 84-1501 et,seq., R.C.M. 1947; and for 

the year 1972 the state of Montana did not require any national bank 

to pay a tax based upon its net income as required by section 84- 

1501 et-seq., R.C.M. 1947, or any similar statute, and no such tax 

was paid by any national bank. The tax paid by Security Bank was 

computed on the basis of its net income and imposed on Security Bank 

under penalty of law. 

The power of the state of Montana to tax national banks - 

located in Montana is set forth in 12 U.8.C. $548, as amended by 

Public Law 91-156. For the year 1972, the state of Montana did authorize the levy and assessment of a tax on national banks by assessing 

shares of stock of national banks under section 84-4601 et seq., R,C. 

M. 1947. In the same year the state taxed state chartered banks by 

assessing shares of stock of state banks under the same statutory 

authority. The method of assessment of shares of stock and the rate of 

tax was identical for national and state banks. 

The national banks in the trade area of Bozeman provided 

substantially the same commercial banking services and functions as 

provided by Security Bank and other state banks in the Bozeman trade 

area. However, national banks are regulated by federal law while state 

banks are regulated by state law. The different sources of their 

charters do not affect their classification. 

Intervenor First National is a national banking association 

in commercial banking, located in Helena, Montana. First National 

paid a tax on shares of stock for the years 1971 and 1972 as required 

by Montana law; but First National was not required by the Department 
to, nor did it pay, any corporation license tax to the treasurer of 

Montana for the same years, as none had been levied. 

Before detailing the proceedings in the district court, 

a review of the sequence and substance of the pertinent statutory 

enactments is in order. 

Prior to 1969, 12 U.S.C. 5548, provided in pertinent part 

to this appeal: 

"5548. State Taxation 

 h he legislature of each State may determine 

and direct, subject to the provisions of this section, 

the manner and place of taxing all the shares of the 

national banking associations located within its limits. 

The several States may (1) tax said shares, or (2) 

include iividends derived therefrom in the taxable 

income of an owner or holder thereof, or (3) tax such 

associations on their net income, or (4) according to 

or measured by their net income, provided the following 

conditions are complied with: 

"1. (a) The imposition @'i any State of any one of 

the above four forms of taxation shall be in lieu of the 

others * * *." 

This section will hereinafter be referred to as the "old 5548". 

Prior to 1969 the state of Montana elected the alternative 

of taxing the shares of national banks in Montana. The state also 

taxed the shares of state banks and, until 1967, additionally imposed 

the corporation license tax on state banks only. 

Uniformity of taxation between state and national banks 

was established in 1967 by the enactment of section 84-1501.4, R.C.M. ' 

"State banks organized under the Montana Bank Act shall 

not be required to pay the Montana corporation license 

tax provided for under chapter 15 of title 84 of the 

Revised Codes of Montana, 1947, until and unless the.said 

tax is required to be paid by national banks organized 

under the laws of the United states." I' 

In 1969 Congress undertook the abolition of national bank 

state tax immunity. Public Law 91-156 added this section to old - 

$548, as a temporary amendment: 

5 (a) In addition to the other methods of taxation 

authorized by the foregoing provisions of this section 

and subject to the limitations and restrictions specifically set forth in such provisions, a State or political 
subdivision thereof may impose any tax which is 

imposed generally on a non-discriminatory basis 

throughout the jurisdiction of such State or 

political subdivision (other than a tax on intangible personal property) on a national bank 

Mng its principal office within such State in the 

same .manner and to the same extent as such tax is 

imposed on a bank organized and existing under the 

laws of such State." 

This provision is hereinafter referred to as the "temporary amendmen t !':' 

Public Law 91-156 also contained a "permanent amendment" to 

take effect January 1, 1972, .- at which time the entire old $548 and 

the temporary amendment were repealed automatically. The permanent 

amendment in effect and hereinafter referred to as the "new $548", 

states in its entirety: 

"For the purpose of any tax law enacted under 

authority of the United States or any State, a. 

national bank shall be treateil as a bank organized 

and existing under the laws of the State or other 

jurisdiction within which its principal office is 

located. I I 

Pursuant to this new taxing authority granted by Congress 

to the states under the temporary amendment and new $548, the Montana 

legislature in 1971, enacted sections 84-1501.6 and 84.1501.7, R.C.M. 

"84-1501.6. State and national banks --. subject to tax. -- Effective with taxable years beginning on or after 

January 1, 1971, every bank organized under the laws of 

the state of Montana or of any other state and every 

national bank organized under the laws of the United 

States are subject to the Montana corporation license 

tax provided for under Title 84, chapter 15, R.C.M. 1947. 11 

"84-1501.7. Effective da tes. For the taxable year 

beginning on and after January 1, 1971, section 1 

[84-1501.61 of this act is effecive in accordance with 

Public Law 91-156, section 1 (12 U.S.C. 548(5).) For 

taxable years beginning on and after January 1, 1972, 

section 1 [84-1501.61 of this act is effective in accordance with Public Law 91-156, section 2 (12 U.S.C. 548)." 

An additional section of this 1971 act repealed section 84-1501.4, 

R.C.M. 1947, as state bank immunity from the corporation license tax 

was no longer necessary when national banks were subject to the same 

tax. 
Finally, about ten months after the enactment by the 

Montana legislature of the above act, the Congress amended Public Law 

91-156 with Public Law 92-213 which extended the life of the temporary 

amendment and old 5548, and delayed the effective date of new 5548 

for one year, until January 1, 1973. 

With the foregoing background in mind, Security Bank sued 

for refund of its 1972 corporation license tax on the ground it was 

an unconstitutional deprivation of property to impose the tax on 

state banks but not on national banks. Originally, the only parties 

to this action were Security Bank, and the defendants represented 

by the Department. On the first stipulation of facts the district 

court entered conclusions of law on November 19, 1974, which 

essentially held: (1) the Department was authorized by section 84- 

1501.6, R.C.M. 1947, and old $548, 12 U,S.C. with the temporary amendment, to subject national banks to the corporation license tax in 

1972, therefore the collection of a corporation license tax from 

state banks was not in and of itself violative of state or federal 

constitutional rights of Security Bank; (2) however, if the Department 

failed to either refund to Security Bank its 1972 corporation license 

tax or assess and collect said tax as a deficiency from national banks, 

then the payment of the tax by Security Bank would be a violation of 

its due process rights under Art. 111, 55 3 and 27, 1889 Montana 

Constitution and the Fourteenth Amendment, United States Constitution. 

Shortly thereafter, First National was granted leave to 

intervene. The district court vacated its November 19 ruling. First 

~ational's intervention was precipitated by the expressed intention of 

the Department to comply with the November 19 ruling by collecting a 

deficiency corporation license tax for 1972 from national banks in 

Montana. 

The issue was submitted on briefs, and on September 22, 

1975, the district court entered summary judgment ordering defendant 

Montana treasurer to refund to Security Bank the 1972 corporation license 
tax paid under protest. In its opinion the district court held, 

contrary to its November 19 conclusions, the Department could not 

levy and collect a corporation license tax from either state or 

federally chartered banks in 1972. On October 14, 1975, the district 

court entered judgment against defendants, ordered the Montana state 

treasurer to refund to Security Bank $31,752.38, and decreed that 

defendants have no authority to impose upon or collect a corporation 

license tax from intervenor First National for any tax year prior to 

January 1, 1973. 

The issues on appeal are: 

1. Did the district court err in ruling that the state, 

through the Department of Revenue, cannot levy and collect a corporation 

license tax from federally chartered banks doing business in Montana 

for the tax year 1972? 

2. Did the district court err in ruling that the state, 

through the Department of Revenue, cannot levy and collect a corporation license tax from state chartered banks for the tax year 1972? 

Resolution of the first issue depends upon the precise 

meaning of old $548 as amended by the temporary amendment and Public 

Law 92-213. The parties properly stipulated that state taxation of 

national banks is controlled by Congressional authorization, i.e., 

12 U.S.C. 5548 in its various forms. See: First Agricultural 

National Bank v. State Tax Commissioner, 392 U.S. 339, 88 S.Ct. 

2173, 20 L ed 2d 1138. At the outset, we note the rules of statutory 

construction long adhered to by this Court. In construing a statute, 

the intent of the legislature is controlling. Such intention must 

first be determined from the plain meaning of the words used, and 

if interpretation of the statute can be so determined, the courts may 

not go further and apply any other means of interpretation. Where 

the language of a statute is plain, unambiguous, direct and certain, 

the statute speaks for itself and there is nothing left for the Court 

to construe. The function of the Court is simply to ascertain and 

declare what in terms or in substance is contained in the statute 
and not insert what has been omitted. Dunphy v. Anaconda Co., 151 

Mont. 76, 438 P.2d 660, and cases cited therein; Sections 93-401-15 

and 93-401-16, R.C.M. 1947. 

The first paragraph and subparagraph l.(a) of old $548, 

in effect during 1972, providH for four different methods of permitted 

taxation of national banks by the states, and unequivocably state 

the 'I* * * imposition by any State of any one of the above four 

forms of taxation shall be in lieu of the others * * *." (Emphasis 

supplied.) The temporary amendment reemphasized this language by 

stating that the temporary amendment is "subject to the limitations 

and restrictions specifically set forth" in the existing sections. 

Thus, in 1972, the states could not impose on national banks any more 

that one of the four enumerated methods of taxation. This position 

was, in fact, taken by the Department itself from 1971 until First 

National intervened in this litigation in November 1974. CCH State 

Tax Reporter -- - Montana, Paragraph 200-033, p. 10,035. 

It is undisputed that First National paid, and the 

Department collected, a tax upon shares of stock of First National 

for 1972. Such is one of the four methods of taxation permitted 

by old $548. It is also plain the corporation license tax is a tax 

on net income (section 84-1501,R.C.M. 1947), another one of the four 

permitted methods of taxation. It follows that having collected 

under one of the methods of taxation, the Department is prohibited 

by old 5548 from imposing a corporation license tax on national 

banks before 1973, when new $548 became effective. 

Therefore, we affirm the district court on the first issue. 

The district judge properly rejected the Department's attempt to seek 

statutory construction through the use of extrinsix sources, as the 

words of the statute in question and its amendments speak for themselves. We are also not impressed with the Department's strained 

distinction between old 5548, subparagraph 1. (a) as a "condition" 

I l and the remaining paragraphs as limitations and restrictions". 
The second issue involves the corporation license tax 

paid by Security Bank under protest in 1972. It appears this dispute 

arises because of the fortuitous circumstance that Congress enacted 

Public Law 92-213 (making new 5548 effective January 1, 1973) after 

the Montana legislature enacted sections 84-1501.6 and 84-1501.7, 

R.C.M. 1947, in reliance on the timetable set out in the temporary 

amendment, Public Law 91-156 (making new 5548 effective January 1, 

1972). 

In 1967, section 84-1501.4 was enacted to provide that 

state and national banks be taxed equally with respect to the 

corporation license tax. This was in recognition of the fact that 

state and national banks in Montana perform virtually the same functions and services and that dual taxation of state banks in the face 

of national bank immunity from such dual taxation placed state banks 

in an inferior competitive position. This parity provision was 

repealed by the 1971 enactment permitting corporation license taxation of national banks because parity was thought to be provided by 

Congress. However, when Congress extended the life of the temporary 

amendment and old $548, the Department continued to levy the tax on 

shares of - all banks and felt it was not authorized to impose the 

corporation license tax on national banks. By imposing the corporation 

license tax on state banks only, the Department was doing what section 

84-1501.4 prohibited from 1967 to its repeal. The question then is: 

Was the corporation license taxation of state banks in 1972 permissible? 

We hold that it was not. 

Security ~ank' s principal argument is that such taxation 

violates due process rights guaranteed under Art.111, $9 3 and 7, 

1889 Montana Constitution, because the imposition of the tax on it 

in 1972 was not uniform, was discriminatory and was based upon an 

arbitrary classification. Security Bank relies on Garrett Freightlines, 

Inc. v. The Montana ~.~.Comm'n, 161 Mont. 482, 507 P.2d 1040. However, 

the issue can be decided on nonconstitutional grounds. Taylor v. 

Taylor, -- Mon t . , 537 P.2d 483, 32 St.Rep.575; Montana State 
University v. Ransier, Mon t . --, 536 P.2d 187, 32 St.Rep. 

569, and cases cited therein. 

The district court held that because the Department 

decided in 1971 that it could not enforce collection of a corporation 

license tax from national banks in Montana during the life of the 

temporary amendment, it had invalidated section 84-1501.6 insofar 

as it applies to national banks; and because section 84-1501.6 contains no savings clause, the invalidation of one portion destroys the 

whole. In light of the legislative policy expressed in repealed 

section 84-1501.4, the basis of its repeal, the continued legislative 

policy of taxing state and national banks equally throughout the 

period of 1967 to the present, and the unavoidable confusion which 

resulted from the Congressional postponement of the effective date of 

new $548 to 1973, we agree with the district court that when the 

state, through the Department, prohibited the corporation license 

taxation of national banks, it was similarly prohibited from collecting 

the tax from state chartered banks. In other words, it is obvious 

from the sequence of events that the legislature did not intend 

to authorize the Department to exact the corporation license tax from 

state banks and simultaneously return to the policy of national bank 

immunity from the same tax. 

We are mindful of the trend in favor of implied separability 

as pointed out by the Department. State ex rel. Evans v. Fire 

Department Relief Ass'n, 138 Mont. 172, 355 P.2d 670. However, the 

facts of this case compel the conclusion, in the absence of a savings 

clause, the Department cannot treat section 84-1501.6 as partially 

invalid and partially valid. The statement of this Court in State 

v. Holmes, 100 Mont. 256, 291, 47 P.2d 624, particularly applies: 

If* * * In the absence of such a [savings] provision the 

presumption is against the mutilation of a statute, 

and that the legislature would not have enacted it except in its entirety. * * +<." 
The judgment of the district court is affirmed. 

Z&,g - 

Justice 

We Concur* ,. 4 

-udge, itt'ng for-chief Justice 

dames (--Ha& son.