Title: AMERICAN LINEN SUPPLY CO v DEPT
Citation: N/A
Docket Number: 80-016
State: Montana
Issuer: Montana Supreme Court
Date: September 30, 1980

No. 80-16 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 AMERICAN LINEN SUPPLY CO., A DELAWARE CORPORATION, Plaintiff and Respondent, THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA; STATE TAX APPEAL BOARD OF THE STATE OF MONTANA; and MAY S. JENKINS, COUNTY TREASURER OF YELLOWSTONE COUNTY, MONTANA, Defendants and Appellants. Appeal from: District Court of the Thirteenth Judicial, In and for the County of Yellowstone. Honorable Charles Luedke, Judge presiding. Counsel of Record: For Appellants: R. Bruce McGinnis, Dept. of Revenue, argued, Helena, ' ~Montana For Respondents: Hendrickson and Bishop, Billings, Montana Robert E. Hendrickson argued and Mark E. Noenning argued, Billings, Montana Submitted: September 11, 1980 Decided: $EP 3 0 1980 Filed: P 3 rsee M r . J u s t i c e John Conway Harrison delivered t h e Opinion of the Court. American Linen Supply Co. appealed i t s t a x assessment t o t h e S t a t e Tax Appeal Board on t h e ground t h a t s e c t i o n 84- 7526, R.C.M. 1947, e n t i t l e d it t o c e r t a i n t a x r e l i e f bene- f i t s provided f o r i n T i t l e 84, Chapter 75, b e t t e r known a s t h e Montana Economic Land Development Act ( h e r e i n a f t e r MELDA). The Tax Appeal Board granted a hearing and u l t i - mately r u l e d a g a i n s t American Linen. American in en ap- pealed t o t h e Yellowstone County D i s t r i c t Court f o r review. The D i s t r i c t Court entered judgment reversing t h e Tax Appeal Board and awarding b e n e f i t s t o American Linen under M E L D A . From t h e D i s t r i c t Court judgment, t h e Department of Revenue (DOR) appeals. American Linen Supply Co. i s a Delaware corporation, doing business and owning r e a l property i n B i l l i n g s , Montana. American Linen's property i s located i n an area c l a s s i f i e d as t h e c e n t r a l business d i s t r i c t of B i l l i n g s . I n 1976 t h e r e was a fourteen-story o f f i c e building constructed on t h e site. I n J u l y 1977 American Linen applied t o DOR f o r t a x b e n e f i t s provided f o r under MELDA. DOR denied t h e applica- t i o n f o r t a x reduction. American Linen appealed t o t h e Montana S t a t e Tax Appeal Board, which, a f t e r hearing, r u l e d t h a t t h e company w a s n o t e n t i t l e d t o t h e b e n e f i t s of M E L D A . The Board found t h a t before MELDA may be used t o reduce t h e t a x on previously zoned property, a l o c a l government body with zoning a u t h o r i t y must f i r s t determine whether M E L D A was c o n s i s t e n t with t h e e x i s t i n g zoning plan so t h a t t h e MELDA land use c a t e g o r i e s might apply. I f t h e zoning plan was c o n s i s t e n t with M E L D A , t h e previously zoned property owners who otherwise q u a l i f i e d could take advantage of t h e reduced property t a x schedule. I n t h i s case, American Linen's property had been previ- ously zoned and t h e l o c a l zoning a u t h o r i t y , t h e B i l l i n g s C i t y Council, had f a i l e d t o determine t h a t t h e zoning p l a n was c o n s i s t e n t with t h e M E L D A program. The Tax Appeal Board determined t h a t t h e C i t y of B i l l i n g s had n o t implemented M E L D A and t h a t DOR was under no o b l i g a t i o n t o g r a n t American Linen t a x r e l i e f . The l e g a l b a s i s f o r t h e Board's d e c i s i o n was t h e well-established r u l e of s t a t u t o r y construction which demands t h a t t a x exemption i s s u e s be resolved, when- ever t h e r e i s ambiguity, i n favor of t h e taxing a u t h o r i t y . The Board denied American Linen's appeal, and t h e company i n s t i t u t e d an appeal i n Yellowstone County District Court. The D i s t r i c t Court reversed t h e Board's d e c i s i o n and ordered t h e M E L D A b e n e f i t s granted t o American Linen. The c o u r t found t h a t t h e r e w a s no ambiguity i n t h e s t a t u t e and t h a t M E L D A b e n e f i t s w e r e c l e a r l y intended t o be awarded t o property owners who had been c l a s s i f i e d a s of January 1, 1976. The D i s t r i c t Court concluded, ". . . t h a t t h e Legis- l a t u r e had some purpose i n enacting 84-7526 i n t h e terms s p e c i f i e d and t h a t it intended t h a t it be f u n c t i o n a l and n o t j u s t decorative. . ." DOR appeals t h e D i s t r i c t Court order. W e affirm. The s o l e i s s u e before t h i s Court is whether t h e D i s - t r i c t Court e r r e d i n f i n d i n g t h a t section 84-7526, R.C.M. 1947 (now r e p e a l e d ) , applied t o previously zoned a r e a s without any a f f i r m a t i v e a c t i o n on t h e p a r t of t h e l o c a l zoning a u t h o r i t y t o e s t a b l i s h t h a t t h e program was con- s i s t e n t with t h e e x i s t i n g zoning plan. Section 84-7526, R.C.M. 1947, provided t h a t : "No p o r t i o n of t h i s a c t s h a l l become e f f e c t i v e u n t i l t h e provisions of s e c t i o n 84-7505 have been m e t except f o r those p o r t i o n s of land c l a s s i f i e d under t h e provisions of T i t l e 11, chapter 27, R.C.M. 1947, i n t o c a t e g o r i e s which a r e c o n s i s t e n t with t h e provisions of t h i s a c t , and a s t o those p o r t i o n s of land t h i s a c t s h a l l be e f f e c t i v e on January 1, 1976. A l l a p p r a i s a l s and c l a s s i f i c a t i o n s made t h e r e a f t e r s h a l l be made pursuant t o t h e provisions of t h i s a c t . " This Court f i n d s t h a t t h e purpose of M E L D A w a s t o pro- v i d e t a x i n c e n t i v e s which would encourage an inward growth p a t t e r n i n urban a r e a s , thus f o r e s t a l l i n g t h e spread of urban sprawl. The language of M E L D A regarding its purpose, s e c t i o n 84-7503, R.C.M. 1947, is unquestionably c l e a r : " S p e c i f i c goals a r e . . . ( 2 ) t o encourage urban growth i n an inward p a t t e r n , r a t h e r than sprawl development, y e t through t h e use of open space provide a g r e a t e r percentage of open land and a higher d e n s i t y on developed land within t h e urban a r e a . . ." Recognizing t h a t t h e primary and overriding purpose of t h e A c t was t o encourage c e n t e r c i t y development, we a r e obligated t o r e s p e c t t h a t purpose. I t has been t h i s C o u r t ' s longstanding p r a c t i c e t o r e f r a i n from i n t e r p r e t i n g s t a t u t e s i n such a manner a s t o d e f e a t t h e i r purpose. Doull v. Wohlschlager (1963), 1 4 1 Mont. 354, 377 P.2d 758, c i t i n g with approval S t a t e ex rel. Boone v. Tullock (1925), 72 Mont. 482, 234 P. 277, and Wilkinson v . La Combe (1921), 59 Mont. 518, 197 P. 836. The o b j e c t sought t o be achieved by t h i s l e g i s l a t i o n is a primary consideration i n our i n t e r p r e t a t i o n of it. Corwin v. Bieswanger (1952), 126 Mont. 337, 251 P.2d 232. For t h i s Court t o conclude t h a t American Linen i s n o t e n t i t l e d t o t h e t a x b e n e f i t s of MELDA would be t o make t h e A c t a n u l l i t y both i n substance and i n purpose. I f t h e l e g i s l a t u r e d i d n o t intend f o r t h e r e t o be an exception t o t h e procedural requirements of t h e Act, it would n o t have d r a f t e d language c r e a t i n g a n exception. The l e g i s l a t u r e does n o t perform u s e l e s s a c t s . Section 1-3-223, MCA. A n i n t e r p r e t a t i o n t h a t g i v e s e f f e c t i s always preferred over an i n t e r p r e t a t i o n t h a t makes t h e s t a t u t e void o r treats t h e s t a t u t e as mere sur- plusage. Section 1-3-232, MCA. This Court agrees with t h e r u l i n g of t h e D i s t r i c t Court when it found t h a t t h e s t a t u t e w a s "functional and n o t j u s t decorative." The d e c i s i o n of t h e Tax Appeal Board does not r e c o n c i l e t h e provisions of M E L D A i n such a manner a s t o honor t h e l e g i s l a t i v e purpose behind it. Such a finding is t h e exclu- s i v e province of t h e l e g i s l a t u r e . The d e c i s i o n of t h e D i s t r i c t Court i s affirmed. American Linen i s awarded t h e r e l i e f yed f o r under s e c t i o n 84-7513 ( 4 ) , D R.C.M. 1947. W e concur: Chief J u s t i c e