### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE O ct obe r 14, 200 5 S es sio n SA TUR N C ORP ORA TION v. R UTH JOHNS ON, CO MM ISSION ER OF

REV ENU E, STA TE OF TEN NES SEE Appeal f romthe Chancer y Court for Davidson Cou nty No. 02-2684-II Car ol McCoy, C hancellor

No. M2004- 02067-COA-R 3-CV - F iled April 18, 2006

Saturn Corporation appe als the Chance ry Court’s entry

of summa

r y ju d g me n t in the Commissioner’s favor . Saturn filed its action in Chance ry Court seeking a re fund of a perc entag e of fra nchise a nd e xcis e ta xes pa id i n f

isc a l y e ar 1 99 9- 20 00 . In th is de novo revie w of the tria l court’s judg ment, we hold that the exemption claimed does not apply to the t axpay er, that the ex emption as applied doe s not violate the equa l protection provisions of state and fede ral c ons t i t u t i ons, and af firm the trial c ou rt ’s jud g me nt i n a ll r e sp e c ts.

Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court Affi rm ed
W I L L I AM B. C A IN , J ., delivere d the opi nion of t he court, in which P ATR I C I A J. C O T T RE LL and F R ANK G. C L EME NT , J R ., J J ., joined.
Fr ank N. Stockdale Carney , Katharine A. Jungkind, Memphis, Tenne ssee; Paul D. Krivacka , Nashville, Tenne ssee, f

or the a ppellant, Saturn Corporation.
Paul G . Su mme rs , A tto rn e y Ge ne ra l a ndRe po rt e r; Jonathan N. Wi ke , A ssi stant A tto rn e y Ge ne ra l; for the a ppellee, Rule Johnson, Com missioner of Revenue , State of Tenne ssee. OP IN ION This appea l orig inated as an action for refu n d o f fr an chise a nd excise tax es paid by the taxpay er, Saturn Corpor ation (“Saturn” ). Saturn urg ed in its Complaint that, pur suant to Tennesse e Code Annotated se ction 56-4-217( b), it wa s entitled to the cre dit pr ovided there by . The Te nnessee State Commi ssioner of Revenue (“Commissioner”) responded urg ing that the prope r interpr etation of the statute did not entitle Saturn to the cr edit it c laimed. I nstead, subsection (b) a nd (c) of sec tion 21 7 w e re int e nd e d b y

the le g isl a tur e to ap ply on ly to i ns ur a nc e c omp a nie s a s th a t te rm is d e fi ne d in Tenne ssee Code A nnotated sec tion 56-4-201. The c ontroversy being one solelyof statutory c on str uc tio n, bo th p art ie s f

ile d c ro ss- mot ion s f

or su mma ry jud g me nt. Up on c on sid e ratio n o f tho se-2-

motions, t he trial c ourt enter ed judgme nt in favor of the Commi ssioner, and Saturn a ppeale d. The statut e up on wh ic h Saturn r e lie s c on ta ins thefo llo wi ng pr ov isi on s: § 56-4-217. Cr edit against f ranchise and excise taxe s (a) The a mount of the premium taxes collected unde r the provisions of §§ 56-4-201- - 56-4-214 sha ll be a sing le cr edit ag ainst the sum total of the t ax es imposed by the Fr anchise Tax L aw, c ompiled in tit le 67, cha pter 4, pa rt 21, and by

the Excise Tax L aw, c ompiled in tit le 67, cha pter 4, pa rt 20. (b) To the extent any franchise or excise tax liability rema ins after application of the c re dit se t f orth i n s ub se c tio n ( a ), su c h tax liabil ity sh a ll be re du c e d b y the app lic able pe rc e nta g e a s f

oll ow s: (1) F or tax y ear s beg inning on or afte r Dec ember 15, 1998, but not after D ece mber 14, 1999, the re maining liability afte r applicatio n o f t h e credit shall be reduc ed by twenty perc ent (20%)

. (2) F or tax y ear s beg inning on or af ter De cembe r 15, 1999, but not after Dec ember 14, 2000, th e re m ai n i n g liabilityafte r application of the cre dit shall be reduc ed by forty perc ent (40%)

. (3) F or t ax y ear s beg inning on or after Dece mber 15, 2000, but not after Dec ember 14, 2001, the re maining liability afte r application of the cr ed i t s h all be re duced by six ty perc ent (60%)

. (4) F or tax y ear s beg inning on or afte r De cembe r 15, 2001, but not after D ece mber 14, 2002, the re maini n g l i ab i l i ty afte r application of the cre dit shall be reduc ed by eig hty perc ent (80%)

. (c) For tax y ear s beg inning on or afte r De cembe r 15, 2002 , the excise tax i mposed by titl e 67, chapte r 4, part 20, and the fr anchisetax i mposed by title 67, chapter

4, part 21, shall no long er be applicable to insurance companies, a s defined in § 56- 1- 102(2). 1945 Pub.Acts, c. 3, § 4; 1947 Pub.Acts, c. 201, § 1; 1997 Pub.Acts, c. 508, § 1, eff

. J une 13, 1997. Tenn.Code Ann. § 56- 4-217(2005 supp.).
Saturn claims the cr edits for tax y ear s 1999 and 2000, urg ing that, since subsection (a) of the statute allows credit forp re m i u mt ax es p ai d b y wo rk er s ’ c o m p en s at i o n s el f- i n s u re rs u n d erT en nessee Cod e An no ta te d s e c tio n 56- 4- 20 6, the po rt ion of the statut e app e ari ng a s su bp ara g ra ph (b ), dir e c tly-3-

applies to self insure rs as well. To the contra ry , the Commiss ioner a

rg ues that, since subpa

rag raph (b) wa s added to sec tion 217 in conjunction with subparag raph ( c), w h i ch s p ecifically ref ere nces insurancecompanies a s defined in se ction 56-1-102( 2), the credit described in subpara g raph ( b) does not apply to Saturn as a wor

kers’ compensation self-insurer . The first para g raph clearly does re fer to al l ta xpa y e rs re fe re nc e d inse c tio ns 56 -4 -2 01 thr ou g h s e c tio n 5 6- 4- 21 4. Sub se c tio n ( c ) c le arl y ref ere nces only

insurance companies a s defined in se ction 56-1-102. I nasmuch as our resolution of the issues on appe al dea ls so l el y wi th the question of the construc tion of this st atute to the undisputed fac ts on cross-motions for summary judgme nt, we review the finding of t he trial court de novo with no presumption of corr ectne ss. See Tenn.R.Civ.P. 13. Se e als o T en n.R.App.P. 56; By rd v . H all , 847 S.W .2d 208, 210 (Tenn.1993)

. Th is C ou rt

ha s se t f orth the sta

rt ing po int

in o ur a na ly sis : We beg in our ana ly sis of these issues with the we ll-established rule that c o u r t s m u s tc o n s t ru e t a x s t a t u t e s l i b e r a l l y i n f a v o r o f t h e t a x p a ye r

a n d , c o n v e r s e l y, strict l y aga i n st the tax ing a uthority

. See W

hite v. Rode n Elec. Supply Co. , 536 S.W. 2d34 6, 34 8 ( Te nn .1 97 6) ; Mem phis St. Ry. v. Crenshaw , 165 Tenn. 536, 55 S.W .2d 758, 759 (Tenn.1933)

. Where any doubt e x ists as to the meaning of a taxing statute, courts must resolve this doubt in favor of t h e t axpay er. Se e Me mp his Peabody Corp. v. MacFarland , 2 11 Te nn. 38 4, 36 5 S. W.2 d 4 0, 42 (1 96 3) ; ac c or d Car l Clear Coal C orp. v. Huddleston , 850 S.W .2d 140, 147 (Tenn.Ct.App.1992). Courts may

not ext end by i m p l i ca t ion the rig ht to collect a tax “bey ond the clea r import of t he statute by

which it is levied.” Boggs v. Crenshaw , 157 Tenn. 261, 7 S.W. 2d99 4, 99 5 (1 92 8). By the sa me tok e n, c ou rt s mu st g ive e ff e c t to the “ plain imp ort of the la ng ua g e of

the act ” a ndmus t no t us e thestric t c on str uc tio n r ule to thwart “ the leg islative intent to tax .” In te rn ati on al Ha rv e ste r Co . v . Ca rr , 225 Tenn. 24 4, 46 6 S. W.2 d 2 07 , 2 14 (1 97 1) ; se e als o B e rg e da v . S tate , 1 7 9 Tenn. 460, 167 S.W .2d 338, 340 (1943) ( indicating that courts “must g iv e fu l l scope to the le g isl a tiv e int e nt andapp ly a ru le of c on str uc tio n th a t w ill no t de fe a t th e plain purposes of the act” ).
American A irlines, Inc. v. J ohnson , 56 S.W .3d 502, 504 (Tenn.Ct.App.2000).
Where no a mbiguity

in the act e x ists, comments of leg islators or eve n sponsors of the leg islation before its passag e cannot be ef fec tive to chang e the c lear meaning of the a ct. See A .T.S. Southeast, Inc. v . Carrier Corp. , 18 S.W .3d 626 (Tenn.2000) . L eg is l at o rs are presume d to have knowledg e of the ir prior e nactments a nd to know the state of the law at t h e t i m e new leg islation passes. See Lavin v . Jordan , 16 S.W .3d 362 (Tenn.2000) . Howeve r, whe n the plain lang uag e of a statute is rea sonably

capa ble of c onveying mor e than one meaning, the leg islative history , financ e sheets and c omments app ea ring in the leg islative debate s may be examined to determine the rea sonable intent of the le g islature. In te rn ati on al H ar v e ste r Co

. v . Ca rr , 225 Tenn.244, 466 S.W.2d 207, 214 (1971). The t h reshold question to be a nswere d, there fore , is whether, T ennesse e Code-4-

Annotated se ction 56-4 -217 is susceptible to two re asonable interpre tations. TennesseeCode An no ta te d s e c tio n 5 6- 4- 20 1 d e fi ne s th e te rm “ ins ur a nc e c omp a nie s:”-5- § 56-4-201. Com pani es Sub jec t to Tax; “insurance com pany” d efin ed ( a ) E v e r y d o m e s t i c o r f

o r e i g n i n s u r a n c e c o m p a n y w r i t i n g l i f e , f i r e , m ar i n e , f

i d e l i t y, surety , casua lty , liability , or other f orms of insuranc e shall p ay direc tly to the c omm iss ion e r the ta xes a s p ro vid e d f or in this pa rt

. (b) “Insuranc e company ,” as g ener ally define d for the pur pose of this part, means any i n s u r a n c e , f

i d e l i t y o r s u r e t y c o m p a n y, i n c l u d i n g a n y c o rp o r a t i o n , c o m p a n y, partne rship , as s o ciation, society , order , fraterna l or otherwise , individual or ag g reg ation of i ndividuals eng ag ing in, or proposing or attempting to eng ag e in, any kind of in s u ra n ce or surety business, including the exchang ing of rec iproca l or int e ri ns ur a nc e c on tr a c ts b e tw e e n in div idu a ls, pa rt ne rs hip s a ndc or

po ratio ns
. Tenne ssee Code A nnotated sec tion 56-4-205 sets out the tax o n gro s s premiums owed by these insura nce c ompanies and e x cl u d es fr om the application of that section insurers unde r the Tenne ssee wor

kers’ compensation statutes and worke rs’ compensation self-insure rs. Section 206 define s the tax on worke rs’ compensation insurance companies, and section 207 addresses the ta x o we d b y s el f- i n s u re rs
. T h atl at t ers t at u t e s et s fo rt h t h e f o l l o wi n g: § 56-4-207. Self-insu red em ployers (a) I f any employ er c overe d b y p ro v i s i o n s of title 50, chapte r 6, known a s the Workers’ Compensation L aw, or any amendatory

acts ther eto, s h al l car

ry its own insurance as provided by that chapte r, such employ er shall pay to the commissioner fo ur pe rc e nt (4 %) on thepr e miu m w hic h th e e mpl oy e r w ou ld b e re qu ir e d to pay if the employ er c arried the full cove rag e insuranc e ca lled for with license d insurance c omp a nie s; p ro vid e d, that th e ta x so p a id b y a ny e mpl oy e r sha ll in no in stanc e be le ss than five dollar s ($5.00), a nd a surc harg e of f our tenths of one perc ent (.4%) on such premium the empl o y er woul d have be en re quired to pay , such surc harg e to be e arm ark e d f

or thea dmi nis tr a tio n o f the Te nn e sse e Oc c up a tio na l Sa fe ty a ndHe a lth Act, compiled in title 50, chapte r 3. The tax shall be paid by such self- insurers to the comm i s sioner on or be fore J une 30 of e ach y ear . Any company or cor poration elec ting to oper ate a s a self- insurer and having bee n d u l y q ualified a s such subsequent to June 30 of any y ear shall pay the tax based on the estimated payroll for the balanc e of the y ear

when the pe rmit is is sued; provided, that the sur char g e of f our te nth s of on e pe rc e nt (. 4% ) on the ta x o n wo rk e rs ’ c omp e ns a tio n ins ur a nc e pr e miu ms l e v i e d b y t h e p r o v i s i o n s o f t h i s s e c t i o n s h a l l n o t ap p l y t o a n y e m p l o ye r w h o e m p l o ys ten (10) or

less employ ees unle ss such employ er is in the business of construc tion or m an u fa ct u ri n g. (b) The provisions of this se ct ion shall not apply to county

or municipal g ov e rn me nts

.-6-

Tenn.Code Ann. § 56- 4-207. Two plausible interpr etations exist as to the overa ll meaning of Tenne ssee Code A nnotated section 56-4-217. Considering subsections (a) and (b) without r eg ard to subse ction (c ), t he interpr eta ti on by

Sa turn is pla

us ibl e . Su bs e c tio n ( a ) i s in c lus ive of se lf -i ns ur e rs by

its te rm s. Sub se c tio n ( b) wo uldse e min g ly be app lic able to se lf

-i ns ur e rs sin c e it i s b a se d u po n matte rs se t f orth in subsection (a)

. When subsection (c) is considere d, howeve r, the construc tion sought by the Commiss ioner is p laus ibl e . Su bs e c tio n ( b) pr ov ide s fo r g ra du a te d pe rc e nta g e s of re du c tio n infr a nc his e a nde xcis e tax l iabilityover a

period of f

our y ear s. After

that, subsection (c ) bec omes eff ective and bring s an end to franchise a nd excise tax es, but by its terms is applicable only to “insuranc e compa nies.” The statute in its entirety

thus becomes ambiguous within the rules of statutory construction. I t is lon g se ttl e d th a t:

We e mph a size that th e ro le of thi s Co urt in c on str

uin g statut e s is to a sc e rt a in and g ive ef

fec t to legislative intent. Se e Cro nin v . H owe , 906 S.W .2d 910, 912 (T e nn .1 99 5)

. Whe n th e la ng ua g e of a statut e is u na mbi g uo us , le g isl a tiv e int e nt i s to be asc erta ined from the plain and ordinary meaning of t he st atutory

lang uag e used. See Carson Creek Vacation Resorts, Inc. v. State, Dep’ t. of Re venue , 865 S.W .2d 1, 2 (Tenn.1993)

. Where as here , the parties leg itimately have dif fer ent interpre tations of the same s t atut ory

lang uag e, an ambiguity exis ts, and we may

consider the le g is lati v e h is to r y a n d th e e n ti r e s tatu to r y s c h e me f o r in te rp r e ti v e g u id a n ce. See Car te r v . S tate , 9 52 S.W. 2d41 7, 41 9 ( Te nn .1 99 7) ; Ow e ns v . S tate , 908 S.W .2d 923, 92 6 ( Te nn .1 99 5) ; Lyons v. Rasar , 872 S.W .2d 895, 897 (Tenn.1994)

. McCoy v . T.T.C ., Illinois Inc. , 14 S.W .3d 734, 738 (Tenn.2000)

. F a c e d w itha

sim ila r d isp utere g ard ing theme a nin g of a le g isl a tiv e e na c tme nt and the too ls available to the court in dete rmining that meaning , the Supreme Court he ld:

“[T] he most basic principle of st atutory construction is to asce rtain and give eff ect to the leg islative int ent without unduly restric ting or

expanding a

statute’s cover ag e bey ond its intended scope .” W orley v. W eigels, Inc , 919 S.W .2d 589, 593 (Tenn.1996) ( qu oti ng Ow e ns v . S tate , 9 08 S.W. 2d92 3, 92 6 ( Te nn .1 99 5) ); State v. Sliger , 846 S

. W

. 2 d 262, 263 (Tenn.1993) . L eg islative intent and purpose is to be asce rtained primarily

from the natural and or dinary meaning of the lang uag e used, without a forc ed or subltle c onstruction that would limit or extend the meaning of the lang uag e. Tuggle v. Allright Parking Sys., Inc. , 922 S.W .2d 105, 107 (Tenn.1996) ; Nat ion al Gas Di str ib. , I

nc . v . S tate , 8 0 4 S

. W

. 2 d 6 6 (T en n
. 1 9 9 1 ). W h en t h e l an gu age is ambiguous a nd does not y ield a c l ea r interpre tation, the court may consult the leg islative history for additional interpre tive g uidance

. Sto rey v . B ra dfo rd Fu rn itu re-7-

Co. , 9 10 S.W. 2d85 7, 85 9 ( Te nn .1 99 5) ; se e als o Car r v . F or d , 833 S.W .2d 68, 69-70 (Tenn.1992)

. We find the lang uag e of the enabling provision ambiguous. The meaning of the ph ra se “ any

pe rs on ha vin g a

g ro un d f or re lie f r e c og nize d u nd e r this a c t” is uncertain. The interpre tation proffe red by the petitioner is that the phra se mea ns any person a lleg ing a

constitutional de fe ct i n the conviction or se ntence , reg ardle ss of wh e the r the c la im w ou ld h a ve be e n b arr e d u nd e r the pr e vio us statut e of lim itatio ns
. As the State points out, howe ver, the phrase is just as susceptible of being interpre ted to mean any

person ha ving a

cog ni z ab l e ground f

or re lief that is not barre d by the pr e vio us statut e of

lim itatio ns . T he me refact that th is p hr a se is r e a so na bly int e rp re te d e ith e r w a y

make s it a mbi g uo us
. Whe re thela ng ua ge o f a le g isl a tiv e pr ov isi on in u nc le ar, the Cou rt sh ou ld loo k b e hin d th e fa c e of

the statut e to de te rm ine the le g isl a tur e ’s int e nt. F ir st, we no te that th e c ha ng e s to the po st- c on vic tio n s ta tut e s, in eve ry ins ta nc e , li mit e d th e tim e and oppo rt u nity

to file petitions for re lief. Ac cording to Represe ntative J ere Ha rg ro ve , th e sp on so r o f the pr op os e d b ill , th e le g isl a tio n w a s w ri tte n to a dd re ss c on sti tue nts ’ c on c e rn s a bo ut the ino rd inate a mou nt o f t ime a llo we d inpo stconviction proceeding s. He ex plicitly stated t hat t he purpose of the bill was to put time co n s t raints on the “interminable duration of criminal appe als.” Te nnessee Gene ral Asse mbly , House T ape N o. 59, 99 G.A., 1st Sess. (April 19, 1995) th (statement of

Represe ntative Har g rove)

. Car te r v . S tate , 952 S.W .2d 417, 419 (Tenn.1997)

. Whil e subsec tion (a) of

Tenne ssee Code A nnotated sec tion 56-4-21 7 has bee n part of the Tenne ssee Code since 1945, the provisions of subsection (b) a nd (c) wer e ena cted a s part of Chapte r 508 of the Public Acts of 1997. It is t he 1997 Ac t that introduces the c ontroversy betwee n the p ar t i es
. T h e l egi s l at i v e h i s t o ryo f C h ap t er5 0 8 o f t h e P u b l i c A ct s o f 1 9 9 7 i s en l i gh t en i n g.
Be fore the May 27, 1997, House Finance , Way s and Means Commi ttee meeting, Rep. Kisber e xpla ine d th e bil l a s f

oll ow s:
Ho us e B ill 17 59 is a bil l that a dd re sse s the re ta liatory fe a tur e s o f the fr a nc his e /e xcis e ta x a s a pp lie d to do me sti c a lly

do mic ile d in su ranc e c omp a nie s. Th is b ill wo uldph a se ou t th a t ta x pro vis ionbe g inn ing wi th re turns fi le d a ft e r D e c e mbe r 1 5, 19 98 . It w ou ld be phase d in over a period of time that would fully be implemented in the y ear 2000- -- f iscal y ear 2002-2003.
Te nn e sse e Ge ne ra l A sse mbl y , H ou se F inanc e , Wa y s a nd Me a ns Com mitte e Ta pe #1 , 1 00 th G .A . 1 st sess. (May

27, 1997) (Statement of

Rep. Matt Kisber)

.-8-

L ikewise, on May

28, 1997, Rep. Kisber g ave the following explanation:
T h an k y o u , Mr. Speake r. . . . House B ill 1759 is a bill that addre sses a situation of d o u b l e t a x a t i o n o n i n s u r a n c e c o m p a n i e s i n T e n n e s s e e
. T e n n e s s e e i s o n e o f o n l y a few states that impose the fr anchise and ex ci s e tax as well as the pre mium tax on i n s u ra nce c ompanies. This double taxation results also in a punitive nature in that other states ba se their tax on the domicile state of the insuranc e co m p an ywhich cause s a re taliatory

feature for

those companie s who are domiciled or hea dquarte rd in T e n n e s s e e th a t d o b u s in e s s in o th e r s tate s
. T h e n e t e f f e c t o f th is a c cording to a study done by

the Univer sityof Tenne ssee, Dr . Bill Fox, upon whom we re ly for quite a bit of our f

inancial information within st ate gov er n ment, conclude d that insurance companies pay a much highe r perc entag e of their prof its in Tennessee than do oth e r b us ine sse s th a t do bu sin e ss i n T e nn e sse e be c aus e of thi s p ro vis ion . T his provision neg ates a dvantag es that co u ld otherwise attract more companies headqua rtere d in, to headquarter in Tenne ssee due to the fact that we have many of t h e i n c e n t i v e s i n t e r m s o f

a p r o
- b u s i n e s s s t a t e g o v e r n m e n t , h i g h w o rk e r p r o d u c t i v i t y, a nda so ph ist ic a te d sy ste m of te le c ommun ic a tio ns
. Th is b ill wo uldph a se in, wo uld ph a se in the re du c tio n on thefr a nc his e /e xcis e ta x be g inn ing in 1 99 8- ‘9 9 a ndwo uld conclude it in the y ear 2002-2003 in orde r that it would not adverse ly impact a nythi ng that’ s p la nn e d intheState of Te nn e sse e c ur

re ntl y . Pe nd ing a ny

qu e sti on s, I would move passag e of H ouse B ill 1759 on thi rd and f inal consideration.
Tenne ssee Ge nera l Assembly , House See sion Tape #H- 95, 100th G.A. 1 s t sess. (May 28, 1998) (Statement of Rep. Matt Kisber).
After the bill passed the House on the same day , the Senate sponsor, Sen. Roche lle, made the following statements bef

ore the Senate F inance , Way s and Means Commi ttee meeting on April 1, 1997:
This is the ex cise/fr anchise tax on i nsuranc e companies. This is the one whe re w e’r e fac ing r etaliation from other states; they make our companies pay those in addition to their locals, and this is some t hing that is really neede d. I t is phased in . I t’s not in the next budget y ear , I

don’t believe , but it is phased in ove r a pe riod of time.
Tenne ssee Ge nera l Assembly , S enate Financ e, Way s and Means Commi ttee Ta pe #2, 100th G.A. 1st sess. (Apr. 1, 1997) (Statement of Senator Bob Roc helle). During a May

26, 1997, meeting of the same committee, Sen. Rochelle state d:
This is on tax ation of insuranc e companies. You may have se en the article in the Banner this afternoon endor sing this. This is the retaliatory tax; I think Senator Henry has spoken in favor of this iss ue in the past. I ’d move to re commend passa g e.-9-

Tennes s ee Gener al Assembly , Senate F inance , Way s and Means Commi ttee Ta pe #5, (May

26, 1997) (Statement of

Sen. Bob Roche lle).
J ust before the S en at e p as sed the bill during the Senate se ssion on May 30, 1997, Sen. Rochelle stated:
This addre sses the re taliatory tax s ituation on insurance c ompanies, and I hope that e ve ry bo dy ’s ha d a n o pp ortun ity to h a ve a dis c us sio n o n it

. Tenne ssee Ge nera l Assembly , Senat e Session Tape S-111, 100th G.A., 1st sess. (May 30, 1997) (Statement of Sen. B ob Rochelle).
Whe n th e le g isl a tiv e his tory of Cha pte r 5 08 of

the Pub lic Ac ts o f 1 99 7 i s con sid e re d, it become s clea

r t hat t he legislative int ent restricted subs ection (b) to “insuranc e companies, as def ined in section 56-1-102( 2),” just as that lang uag e appe ars in subsec tion (c).
As state d b y

Chi e f Jus tic e Gr a ft on Gr e e n f or the Sup re me Cou rt :
Howeve r, we are relieve d of all diffic ulty on this point , beca

use cha pter 2 and chapte r 3 wer e companion acts passed at the same session of the L eg islature and on the same subject — compulsory leg alized primaries. The rule of c onstruing statutes in pari materia is of pec uliar for ce w hen such statutes are enac ted at the sa me session of the L e g isl a tur e . “ Th is b e ing so , an d th e statut e s h a vin g be e n p a sse d at th e sa me s e s s io n o f th e L e g is latu r e , th e y s h o u ld b e c o n s tr u e d a s o n e ac t.” Hill v . R ob e rts , 14 2 T e nn . 2 15 , 2 17 S.W. 82 6, 82 8; Bi rd v. S ta te , 131 Tenn. 518, 175 S.W. 554, Ann.Cas. 1917A, 634.
We c a n lo ok , th e re fo re , to on e a c t to su pp ly a ny de fi c ie nc ie s o r o mis sio ns in the other. This is common pra ctice in statutory construction.
“Where two ac t s i n pari mate ria a re c onstrued tog ether , and one c ontains provisions omit ted from the othe r, the omitted provis i o n s wi l l be applied in the pr oc e e din g un de r the a c t no t c on ta ini ng su c h pr ov isi on s, wh e reno t in c on sis te nt w ith the purpose of

the ac t.” 59 C.J . 1050. Gates v. Long , 113 S.W .2d 388, 392 (Tenn.1938)

. The rule relative to pa ri m ate ria c on str uc tio n a pp lie s n ot o nly

to s e pa rate statut e s b ut a lso with equal for ce to se parate provisions within a single statute. Town of Mt. Ca rme l v. C ity of Kin gs po rt , 397 S.W .2d 379, 382 (Tenn.1965)

. See 73 Am.J ur. 2d, Statutes, § 105 (2005).
Th us , th e pr ov isi on in sub pa ra g ra ph (c ) r e stric tin g its app lic a tio n to “ ins ur a nc e c omp a nie s” is applicable a like to subsection (b).-10-

The manife st intention of t he leg islature in ena cting Chapter 508 of the Public Acts of 1997 wa s to re stric t it s a

pp lic a tio n to ins ur a nc e c omp a nie s.
I t is a g e n era lly

acc epted principle of statutory construction, that in construing a statute, a ll its sections ar e to be c onstrued toget h er i n t he lig ht of the g ener al purpose and plan, t he evil intended to be remedied, and the object to be obta ined, and if thela ng ua g e is s us c e pti bleto m or e than o ne c on str uc tio n, the statut e sh ou ld rec eive the c onstruction that will effe ct its purpose rather than de feat it. Va nd e rg rif f v. S eebe r , 1 87 Te nn . 5 61 , 2 16 S.W. 2d31 1; McG ill & Daugherty v . Kefauver , 175 Te nn . 6 67 , 1 37 S.W. 2d27 9; Cum mi ng s v . Sha rp , 173 Tenn. 637, 122 S.W.2d 423; State v. Dy er , 171 Tenn. 66, 100 S.W .2d 653; 50 Am.J ur., Statutes, Sec. 306 et seq

. Tucker v . McD ell’s, Inc

. , 359 S.W .2d 597, 599-600 (Te nn.1962). When construing all provisions of Tenne ssee Code A nnotated section 56-4- 217 under the app licab le ru le s o f s ta tut ory c on str uc tio n a s in te g ra l pa

rt s o f the sta

tut ory sc he me , th e pla

us ibi lit y of the position taken by

Saturn bec omes hig hly

questionable. Under

such construc tion, self-insurer s under subsect i on (b) would ha ve four y ear s of continuing perc entag e re duction in franc hise and e xcis e ta xes w hic h r e du c tio ns wo uldte rm inate a t th e e ndof the fo urth y e ar andse lf

-i ns ur e rs wo uld reve rt bac k to full liabili ty for f ranc hise and e x cise taxes applicable t o t h em afte r deduc ting the premium tax cre dit set forth in subsection (a ). While such a construc tion is certainly possible when subsections (a) and (b) are considere d in isolation of subsection (c), suc h result will not withst and critica l analy sis under the rule s g overning statutory construction.
On t he other hand, the construction soug ht by the Commiss ioner, whic h is clearly evidenc ed by the leg islative history , is simply to phase out fra nchise and excise taxes on insurancecompanies over a five-y ear period.
The “ equal pr otection” constitutional que stions asse rted by Saturn are without merit. J ustice Henry laid out for the Supre me Court the rules by which we are g overne d:
The test to be a

pplied has bee n set forth in num erous c ases. The classification must rest upon a re asonable basis. I f it has a re as o n ab l e basis, it is not un c on sti tut ion a l me re ly

be c ause i t r e su lts in s omeine qu a lit y . Re a so na ble ne ss de pe nd s up on thefa c ts o f the c a se a ndno g e ne ral rule c a n b e fo rmulate d f or its determination. Es tri n v . M os s , 2 21 Ten n. 657, 43 0 S. W.2 d 3 45 (1 96 8) ; Motlow v. Sta te , 125 Tenn. 547, 145 S.W. 177 (1912).
Th e bu rd e n o f s ho wi ng that a cla ssi fi c a tio n is unr e a so na ble a nd arb itr ary

is place d upon the individual challeng ing the s t atute; and if any state of f

acts c an rea sonably

be conc eived to justify

the classific ation or if the r easona bleness of the class is f airly debata ble, the statute must be upheld. Swa in v . S tate , 527 S.W .2d 119 (T e nn .1 97 5) ; Es tri n, su

pr a; Ph ill ips v . S tate , 202 Tenn. 402, 304 S.W.2d 614 (1957).-11- B e f o r e t h e c l a s s i f

i c a t i o n w i l l b e h e l d t o v i o l a t e t h e e q u a l p r o t e c t i o n g u ar a n t y, it must be sh o wn t h at it has no rea sonable or natural re lation to the leg islative objective. City of Cha tta no og a, su pr a; Ph ill ips , s up ra . I n ad dit ion , th e statut e mus t ap p ly a li k e to a ll w h o f

a ll w ith in , o r

c a n r e a s o n ab ly

b e b r o u g h t w ith inthe classification. Massachusetts Mutual Life Insuranc e Co

. v . V o g u e I n c. , 54 Tenn.App. 624, 393 S.W .2d 164 (1965).
Harrison v. Schrader , 569 S.W .2d 822, 825-26 (Te nn.1978).
Sa turn is a

ma nu fa c tur e r o f a

uto mob ile s th a t c ho os e s to be se lf -i ns ur e d f

or wo rk e rs ’ compensation purposes. An insuranc e company , on the other hand, is in the business, not of building automobiles but of selling insurance

. Alleviating the ef fec ts of reta liatory

taxation byother states to the dis a dv a nta g e of Te nn e sse e ’s do me sti c ins ur a nc e c omp a nie s st a nd ing a lon e is a su ff ic ie nt b a sis to withstand equal protec tion scrutiny . That such wa s the primary motivating fa ctor in the e nactment of Cha pte r 5 08 of

thePub lic Ac ts o f 1 99 7 is c le arl y dis c los e d by

the le g isl a tiv e his tory

of the a c t.
Th e jud g me nt o f the tr ia l c ou rt is i n a ll r e sp e c ts a ff

ir me d w ithc os ts a sse sse d to Ap pe lla nt. T h e c a s e i s r e m a n d e d f

o r s u c h f u r t h e r p r o c e e d i n g s a s m a y b e n e c e s s ar y.

___________________________________ WI LL I AM B. CAIN, J UDGE