Document: 480 U.S. 123 107 S.Ct. 1038 94 L.Ed.2d 112 WESTERN AIR LINES, INC., et al., Appellants,v.BOARD OF EQUALIZATION the State of SOUTH DAKOTA, al. No. 85-732. Argued Nov. 3, 1986. Decided Feb. 24, 1987. Syllabus A provision Airport and Airway Improvement Act 1982, 49 U.S.C. § 1513(d)(1), prohibits imposition discriminatory state or local property taxes on air carriers. However, 1513(d)(3) provides that prohibition does not apply to any "in lieu tax which is wholly utilized for airport aeronautical purposes." The South Dakota Airline Flight Property Tax, enacted in 1961, imposed carriers basis value their aircraft allocation airports used by carriers, use exclusively purposes. This tax, centrally assessed, was an exception from general scheme assessment at county level. In 1978 exempted ad valorem taxation all personal locally rather than assessed. Appellant airline companies paid flight 1983 under protest, unsuccessfully sought refunds appropriate authorities, ultimately relief appeals a Circuit Court ground that, because subject while most other exempt, violated 1513(d)(1). court consolidated actions held permitted 1513(d)(3). Although disagreeing with holding, Supreme affirmed alternative based its interpretation provisions 1513(d). Held: purposes" 1513(d)(3), thus violate antidiscrimination question whether tax" one federal law, purpose effect must be examined light policy embodied law. Section 1513(d)(3)'s requirement "wholly reflects preventing governments excessively taxing nonvoting, nonresident businesses order subsidize welfare services residents. phrase restricts 1513(d)(3)' protection applied exclusion property—that is, possible tax—and reinforces reflected phrase. Tax establishes method particular type property. It therefore stands generally applicable had been assessed commercial industrial time established. necessary take place another historically Pp. 129-134. 372 N.W.2d 106 (S.D.1985), affirmed. O'CONNOR, J., delivered opinion unanimous Court. WHITE, filed concurring opinion, post, p. ---. Raymond J. Rasenberger, Washington, D.C., appellants. Mark V. Meierhenry, Sioux Falls, S.D., appellees. Justice O'CONNOR 1 this case we consider S.D. Codified Laws, ch. 10-29 (1982), violates App. We conclude purposes," 2 * issue part series congressional dedicated improving Nation's transportation system. Aloha Airlines, Inc. v. Director Taxation, 464 7, 8-10, 104 291, 292-293, 78 10 (1983). 1970, following findings "substantial expansion improvement airway system [sic] required meet demands interstate commerce, postal service, national defense," H.R.Conf.Rep. 91-1074, 29 (1970), U.S.Code Cong. & Admin.News pp. 3047, 3101, Congress Secretary Transportation prepare plan development public airports, authorized make grants States localities development. Development Pub.L. 91-258, 84 Stat. 219. also established Trust Fund, maintained aviation taxes, finance projects. 208, 250. Soon afterward, acted limit transportation. Concluding passenger placed "an unnecessary burden commerce," "a stifling transportation," H.R.Rep. 93-157, 4 (1973), prohibited such Acceleration 1973, 93-44, 7(a), 87 90. 3 96 701, added 7(d) prohibiting That prohibition, as codified U.S.C.App. 1513(d), reads: "(d) Acts unreasonably discriminate against commerce; definitions 5 "(1) acts commerce State, subdivision authority acting may do them: 6 "(A) assess carrier has higher ratio true market same jurisdiction property; "(B) levy collect made subparagraph (A) paragraph; 7 "(C) rate exceeds jurisdiction. 8 "(2) subsection— 9 "(D) 'commercial property' means property, land primarily agricultural purposes timber growing, devoted levy; . 11 12 "(3) subsection shall 13 appellants allege 1961. defined "all fully equipped ready commerce." S.D.Codified Laws 10-29-1(4) (1982). portion tonnage, time, revenue ton miles, 10-29-10, taxed "average mill rate," 10-29-14. statute "[t]he chapter allocated secretary where airlines regularly scheduled landings ." 10-29-15. 14 "[f]light operating department otherwise," 10-29-2. specific categories are taxation. (The certain railroads, private car-line companies, express telephone telegraph electric, heating, water gas rural electric supply pipeline companies. See chs. 10-28 through 10-37.) Each these 10-3-16 1978, 10-4-6.1. 15 May 1983, appellants, four Dakota, first six months protest. Appellants then sued treasurers refund. alleged 1513(d)(1)(A) (C). each answered "utilized [App. §] 1513(d)(3)." 10-11. Following unsuccessful request seven boards commissioners abate refund after effective date commissions abatement 17. Finally, appealed Board Equalization. Equalization unanimously denied appeal, holding "the totally purposes, therefore, conformity [1513](d)(3), lawful violation Federal law." Id., 31. All lawsuits described above were Sixth Judicial Hughes County, Dakota. agreed counties Juris. Statement 19a-21a. 16 On disagreed conclusion (1985). tax," reasoned, substitute "In bar, however, tax. fact property." 109. Court, ground. Under §§ (C), nature ratios rates determined comparison "commercial "Commercial property" "property, levy." 1513(d)(2)(D) (emphasis supplied). Because levy, concluded "cannot included either" N.W.2d, 110. appellants' claims 1513(d) between no longer rejected. 17 Henderson concurred court's provision, but dissented " property.' observed, 'greater discrimination when [commercial industrial] completely exempt it taxed, lower rate.' 112, quoting Northwest Airlines Equalization, 358 515, 517 (N.D.1984). Such unreasonable, concluded. "Since level zero, airlines' reduced zero." 112. 18 jurisdictional statement challenged Dakota's Appellees defended judgment reasoning noted probable jurisdiction, 475 1008, 1180, 89 297 (1986). oral argument, requested supplemental briefing parties, called views United States, questions: (1) Is If law governs 'in tax' 1513(d)(3)?" 479 958, 451, 93 399 our conclusions two questions resolve case, reach II 19 parties agree principle absent clear indication contrary, meaning words especial force eliminate treatment commerce. Indeed, U.S., 13-14, S.Ct., 294-295, legislature's characterization could shield application 1513. present supra, examine "purpose effect" provision. 20 given us little material interpret exception. conference, there legislative history specifically discussing it.* language itself, policies lead exempts restrictions 21 uses characteristics identify group First, perhaps important, fall modeled similar 4-R Motor Carrier 1980. 11503, 11503a. demonstrates Congress' awareness "are easy prey assessors" they "nonvoting, often nonresident, targets taxation," who cannot easily remove themselves locality. S.Rep. 91-630, (1969). Department observed "[s]tate derive substantial revenues owned common carriers." 4. temptation residents legislation area necessary. ability levied spending exist, course, proceeds directly entirely benefit carrier. Not only possibility benefits eliminated, specter burdens avoided recycling into facilities 22 Second, words, collected pursuant those whom collected, then, explained above, discriminatorily some others. subjected expenditures, potential abuse remains. Two individually nondiscriminatory taxes—a meets industry collected—obviously can become burdensome combined. 23 levies 10-29-15 quoted 126. logic falls exemption. 24 argue, alone sufficient advocate position taken immaterial, assert, unless past actually replaced always form tax." 25 Admittedly open interpretation. illogical results applying interpretation, argue strongly intended drafted 26 advocate, would would, best, turn historical fortuity. identical utilizes if Thus, gone expenditures airlines, exempted. chosen devote solely exempted, according Why consistently should penalized consistency unexplained. 27 At worst, more meaningless hurdle before legislatures seeking conform requirements closer examination how proposed replacement operate practice illustrates point. suggest—and have upon suggest—that replace another, time. Moreover, condition coverage met exemption all; simply add restriction spent corresponding latitude collected. Ultimately, satisfy amending code so took form, session substituting exercise replacing contributing somewhat workload, contribute nothing Act. 28 sum, glance ambiguous, interpreted manner comports 1513(d)(1) fits description, For reason, Affirmed. concurring. 30 Neither responding nor brief merits did appellees defend in-lieu tax; my dissenting vote indicated, I thought inappropriate call further sua sponte pose address what plainly improvident sustained But Court's action surely within power, raised decided courts. now us, having correctly it, join opinion. directed attention 1975 Report House Committee Interstate Foreign Commerce H.R. 10979, Railroad Revitalization Regulatory Reform 1976 (4-R Act). As note infra, 131, describe special differently schemes. 94-725, 77, (1975). seems broad range taxes. sliver supports phrase, see 131-132. submit affidavit John L. Zorack, attorney "represent[s] clients variety matters Congress." Supplemental Brief 14560 (Supp.Ct.S.D.) B-1, B-2. Affiant Zorack states he "involved"—in unexplained capacity—in passage became According affiant lieu" "was ensure invalidate legitimate effort comparable incongruous justification since threatened Mr. adds inserted care Minnesota's objection earlier version." "To knowledge representation wished protected provision," concludes. B-2, B-3. affidavit, covered resemble Minnesota airflight previously airlines. note, 133, admittedly one. Appellants' attempt creation post hoc statements interested onlookers entitled weight, however.

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