No. 13170 INTHE SUPREME COURT OF THE STATE OF MONTANA 1975

FIRST NATIONAL 

### BANK OF LEWISTOWN, MONTANA et al., Petitioners, -vs

# - DEPARTMENT OF REVENUE OF THE STATE OF MONTANA, Respondent.

OKIGINAL PROCEEDING: Counsel of Record : For Petitioners: Gough, Booth, Shanahan and Johnson, Helena,

Montana Ronald F. Waterman argued, Helena, Montana Luxan, Murfitt and Davis, Helena, Montana Howard JoLuxan 

### Jr. argued, Helena, Montana For Respondent: Joseph RoMassman argued, Helena, Montana

Submitted: October 

### 17, 1975

+ C 1 , . Decided: :' 1 Filed:Mr. Justice Castles delivered the Opinion of the Court.

This isan action brought under the Uniform Declaratory Judgments Act, section 93-8901, et seq., R.C.M. 1947, and requests this Court to assume originaljurisdiction. Both sides agree there areno facts in dispute. This Court agreed toacceptjurisdiction. This action arises out of 

### a disputebetween the various banks involved in this litigation and the Department of Revenue

as to the interpretation of one statute, section 84-308, R,C.M, 1947. Each year banks doing business in the stateof Montana

arerequired tocomplete 

### a "~ank Statement forAssessment" showing allthe resources and liabilities of that bank as disclosed by its books, at twelve o'clock noon on the firstMonday of March. Each of thebanks involved in this action complied with that requirement. Each entered on the Bank Statement forAssessment, the dollar amount of the capital stock as shown on the books of the bank and inserted

as surplus the dollar amount of the surplus as shown on thebooks of thebank. Further, each bank set forth on the statement the amount of undivided profits and other reserves as shown on the books of the bank. In each instance, each of the figures supplied to the Department of Revenue by the individual banks was the figure shown on thebooks of each bank, asrequired by statuteand regulation. Also, pursuant to the Department's regulation MAC 42-2.22 (20)

# - S22410, each bank had itsbond portfolio valued within the time designated by regulation. The banks and the Department do not disagree as to the amounts entered on each of thebanks' Bank Statement forAssessment. Nor 

### is there a question astoany other issue involved inreaching the valuation of stock tobe assessed to the stockholders of each bank.From the assessment statement filedby each bank, the Department made various calculations apportioning the value of stock assessed tothe stockholders as shown on each bank assessment statement, between the 

### 7%and 30%categories asrequired by section 84-308. The calculations were based upon adjustments made by the Department to the amount of surplus as shown on thebooks of eachbank. The Department took the depreciated or appreciated value of thebond portfolio, applied that.figure against the amount of undivided profit 

### as shown on thebooks of thebank; if the result of those calculations was a negative undivided profit figure, the Department then adjusted the surplus of each bank by deducting from the surplus figure as shown on the books of the bank, the negative undivided profit figure and used this adjusted surplus figure, rather than the amount of surplus

as shown on thebooks of each bank. The Department then determined what proportion of the value of stock assessed to the stockholder

was tobe classifiedwithin the 7%classification and what proportion was tobe classifiedwithin the 30%classification. The banks involved in this litigationallege that the above adjustment of the amount of surplus as shown on the books of eachbank by neglative undivided profits foruse inapportioning the value of stock tobe assessed to the stockholderbetween the 7%and 30%classificationwas incorrect, illegal and contrary to statute and illegally increased the taxable value of each bank. Each bank appealed the classification and taxable value as determined by the Department tothe appropriate county tax appeal board in each of the counties where the individual banks transact business. The decisions of the county tax appeal boards were then appealed to the StateTax Appeal Board where they were pending upon this Court's acceptance of jurisdiction. The sole issue

### iswhether ornot the Department may make adjustment inthe figures shown on thebooks of the various banksinvolved in this litigation in determining what proportion of the value of stock assessed to the stockholder 

### is tobe classifiedwithin the 

### 7% classification and what proportion is tobe classifiedwithin the 30%classification. The pertinent portion of section 84-308, R.C.M. 1947, which this Court finds tobe controlling provides: "Moneyed capital and shares of banks, both national and state, thirty per centum (30%) of true and fullvalue on that portion of the true and fullvalue not represented by surplus, as shown on thebooks of the

## bank^ seven per centurn 

### (7%) on that c or ti on of the true and full



## . 

# . value represented byL surplus as shown on thebooks of thebank; provided that on that portion of any such sur~lus which 

### is over and above the amount represenked by stated capital of a bank, the excess shallbe subject to thirty per centum (30%) of true and fullvalue. " (Emphasis added.) We find the quoted statute's meaning tobe clear and unambiguous. There areno technical words and a common understanding of the statute isclear from 

### its reading. The drafters of the legislation obviously intended there should be no accounting adjustments made to the figure shown on the books of the bank when apportioning the amounts between the 

### 7% and 30% classifications. In Morrison v. Farmers & ~raders' StateBank, 70 Mont. 146, 150, 225 P. 

### 123, this Court recognized: 

### "* +: 

# * The intention of the legislature inenacting the statute 

### is the consideration which must control in 

### its construction

# ** * and to ascertain that intention recourse must be had, first, to the language employed 9: 9~

# * indulging the presumption that the terms used were intended tobe understood in their ordinary sense, unless it is made apparent from the context that theyintended tobe given a different meaning. 

# * f; *I' (Emphasis added.) We therefore find the Department cannot take the depreciated

or appreciated value of thebond portfolio, and apply those figures against the amount of undivided profit as shown on the books of the bank, and adjust the surplus figure as shown on the books of the bank, to arrive atthe bank's assessed value. It must use only those figures shown on the books of thebank, asrequired by statute.The Department argues that it does not know what to do with thenewly created bond assessment that 

### isrequired by MAC 42-2.22(20)-S22410. That regulation was adopted by the Department when itwas determined by the Department that the present assessment system did not accurately portray the true picture of thebank's property. This Court can sympathize with the ~e~artment's position; however, we must point out that the solution to that problem lieswith the legislature, and cannot be solved by drafting assessment regulations and using them for classification purposes. This Opinion shall constitute a declaratoryjudgment.