No. 85-150 

IN THE SUPREME COURT OF THE STATE OF MOTJTANA 

1985 

DARBY SPAR, LTD., 

Petitioner and Appellant, 

DEPARTMENT OF REVENUE OF THE 

STATE OF MONTANA, 

Respondent and Respondent. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Ravalli, 

The Honorable Douglas Harkin, Judge presiding. 

COUNSEL OF =CORD: 

For Appellant: 

Garlington, Lohn & Robinson, Missoula, Xontana 

For Respondent: 

Paul Van Tricht, Dept. of Revenue, Helena, Montana 

Submitted on Briefs: June 28, 1985 

Decided: August 22, 1985 

Filed: 

4bb L 1985 

Clerk 
Mr. Justice John C. Sheehy delivered. the Opinion of the 

Court. 

Darby Spar, the taxpayer, sought a determination from 

the Montana Department of Revenue of the application of the 

mine net proceeds tax, S 15-23-501 through § 15-23-523, to 

its operation. The Department of Revenue determined that 

Darby Spar was subject to the mine net proceeds tax for 

yields from dumps and tailings. Darby Spar appealed to the 

State Tax Appeals Board (STAB) which also determined the tax 

applied. Darby Spar then filed for judicial. review in the 

District Court which affirmed the STAR decision. 

Darby Spar now appeals to this Court. We affirm the 

order of the District Court. 

The facts in this case are undisputed. The tax year in 

question is 1980. Darby Spar's predecessors removed ore from 

a mine and transported it to another site. Residue from the 

mining and processing of the ore, "tailings," were dumped on 

land in Ravalli County that Darby Spar purchased. Darby Spar 

sells fluorspar. Fluorspar is a mineral, calcium fluoride, 

contained in the tailings, and used in a number of commercial 

processes. 

The issue is whether the net proceeds tax applies to 

fluorspar removed by Darby Spar from the tailings of a prior 

mining operation. 

Section 15-6-101(2), MCA, states "For the purpose of 

taxation, the taxable property in the state shall be 

classified in accordance with 15-6-131 through 15-6-141." 

Darby Spar's argument is based on the absence of the phrase 

"dump or tailings" in § 15-6-131. 

Section 15-6-131, MCA, states: 
" (1) Class one property includes the annual net 

proceeds of all mines and mining claims except coal 

and metal mines. 

" (2) Class one property is taxed at 100% of its 

annual net proceeds after deducting the expenses 

specified and allowed by 15-23-503." 

Section 15-23-502, MCA, states: 

"Every person engaged in mining, extracting, or 

produci.ng from any quartz vein or lode, placer 

claim, dump or tailings, or other place or source 

whatever precious stones or gems, vermiculite, 

bentonite, or other valuable mineral, except coal 

and metals, must on or before March 31 each year 

make out a statement of the gross yield and value 

of the above-named metals or minerals from each 

mine owned or worked by such person during the year 

preceding January 1 of the year in which such 

statement is made . . ." 

Section 15-6-131, MCA, unlike § 15-23-502, MCA, does not 

mention dumps or tailings. The reason for this discrepancy 

in the statutes is found in a 1945 case, Foreman v. 

Beaverhead County (1945), 1.17 Mont. 557, 161 ~.2d 524. he 

issue in that case was whether the net proceeds from the 

treatment of tailings constituted net proceeds of a mine. 

This Court held that the tailings were personal property, not 

a mine, and the production of minerals from the tailings 

could not be considered the proceeds of a mine. This 

conclusion was based on the wording of statutes that used the 

phrases "mining claims" or "mines" and did not use "tailings" 

or "dumps." The Court stated "The legislature could have 

specifically extended the net proceeds tax to valuable 

minerals recovered from tailings dumps but has not done so. 

The Court must construe the statutes as it find them." 

At the next session, 1947, the legislature overturned 

Foreman by amending the statute that is now codified as § 

15-23-502 to include tailings and. dumps by adding the 

underlined words: 
"Every person, . . . engaged in mining, extracting 

- or producing from any quartz vein or lode, placer 

claim, dump or tailings, or other place - or sources 

whatever, precious stones-or - gems . . . or other 

valuable minerals, must . . ." 

For almost 40 years this language has been relied on to 

impose the net proceeds tax on the yield from tailings and 

dumpings. Administra.tive rules were drafted to this effect 

and the legislature acquiesced in this construction of the 

statute. 

Darby Spar argues that § 15-23-502, MCA, requires that a 

taxpayer report the yield from the dumps and tailings on a 

statement of yield but that the omission in § 15-6-131, MCA, 

precludes imposition of the net proceeds tax on the yield 

from disposed tailings. Although we are impressed by the 

ingenuity of the argument we do not agree. 

construing statutes this Court's role to let the 

intent of the legislature control if possible. Baker Nat. 

Ins. Agency v. DOR (1977), 75 Mont. 9, 571 P.2d 1199. The 

legislative response to Foreman made it clear it was the 

legislature's intent to tax the net yield from dumps and 

tailings. Further evidence of the legislative intent to tax 

the yield from dumps and tailings is its acquiescence for 40 

years to administrative rules adopted by the Department of 

Revenue to impose the tax. Forty years is adequate time for 

the legislature to become aware of how the legislation it 

drafted is being interpreted and enforced. The legislature's 

inaction is a strong indication that the intent of §§ 

15-6-131 and 15-23-502 is to impose a net proceeds tax 

regarding yield from dumps and tailings. 

Statutes should not be construed absurdly when 

reasonable construction can avoid it. McClanathan v. Smith 

(1980), 186 Mont. 56, 606 P.2d 507. Darby Spar is asking us 
to construe 15-23-502 and 15-6-131 to mean that the 

legislature intended taxpayers to report the minimal yield 

from tailings but did not intend to impose a tax on the 

yield. It would be an absurd, meaningless act to require the 

reporting of yields but to assess no tax against them. 

In construing statutes this Court must give effect to 

all provisions of statutes if possible. Continental Oil Co. 

v. Board of Labor Appeals (1978), 178 Mont. 143, 582 P.2d 

1236. The statutes must be read as a whole, not in 

isolation. When § 15-6-131, MCA, is read in conjunction with 

§ 15-23-502, MCA, it is clear to any reasonable reader that 

the net proceeds tax applies to the yield from tailings and 

dumps. 

Darby Spar's entire argument hinges on. a 1945 reading of 

the phrases "mines" and "mining claims" in Foreman. In light 

of the legislative history after 1945 and the collection of 

the tax for 40 years, the narrow interpretation of the word 

"mines" in Foreman no longer applies. The District Court 

order is affirmed. 

We Concur: