Court Opinion

ID: 5156817
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:23:34.121532+00
Date Added: 2024-06-11T08:22:37.699297
License: Public Domain

Chief Justice DURHAM,
concurring:
1 39 The majority is correct that "we must determine only whether the district court erred in concluding that ATK's use of NI-ROP did not qualify under" Utah Code seetion 59-4-101(8)(e) (the Exemption). Supra I also agree with the majority that "[blecause the pairing of the[ ] terms [used in the Exemption] cannot be reconciled, the legislature must have intended for either 'permit' and 'easement' to be read outside their ordinary definition or for 'excelusive possession' to have a different meaning." Supra ¶ 22; see also Olsen v. Eagle Mountain City, 2011 UT 10, ¶ 20, 248 P.3d 465 ("Ultimately, then, this is a case where no interpretation preserves reasonable meaning for all provisions of the statutory scheme. ..."). Unlike the majority, however, I believe that the better interpretation of the statute is that the legislature did not intend "exclusive possession" to have its ordinary and accepted meaning.
140 As the majority correctly notes, we must "read the text of a statute as a whole and interpret its provisions in harmony with other subsections." Supra ¶ 21 (citing Harold Selman, Inc. v. Box Elder Cnty., 2011 UT 18, ¶ 18, 251 P.8d 804). Here, I find it significant that the majority considers only the first sentence of the Exemption. The Exemption actually contains two sentences:
*454A tax is not imposed ... on ... the use or possession of any lease, permit, or easement unless the lease, permit, or easement entitles the lessee or permittee to exclusive possession of the premises to which the lease, permit, or easement relates. Every lessee, permittee, or other holder of a right to remove or extract the mineral covered by the holder's lease, right, permit, or easement except from brines of the Great Salt Lake, is considered to be in possession of the premises, notwithstanding the fact that other parties may have a similar right to remove or extract another mineral from the same lands or estates[.]
Utax Cope § 59-4-101(8)(e). By ignoring the second sentence, the majority's approach fails to account for another important rule of statutory interpretation. Specifically, "[uln-der our rules of statutory construction, we must give effect to every provision of a statute and avoid an interpretation that will render portions of a statute inoperative." Warne v. Warne, 2011 UT 69, ¶ 36, - P.3d -.
T41 In my view, the second sentence evinces the legislature's intent to treat possession as having a special meaning in this Exemption. The term "possession" is susceptible of many interpretations. Indeed, "both in common speech and in legal terminology, there is no word more ambiguous in its meaning than possession." Nat'l Safe Deposit Co. v. Stead, 232 U.S. 58, 67, 34 S.Ct. 209, 58 L.Ed. 504 (1914). The second sentence of the Exemption indicates that-at least with respect to mineral extraction-the term "possession" has a special meaning. Specifically, the Exemption sets up an evaluation of possession for each distinct mineral: multiple mineral rights holders may operate on the same land, but each may have possession with respect to the mineral covered by that right holder's lease, permit, or easement.
[ 42 Under the majority's interpretation of the Exemption, however, this second sentence would be superfluous. The majority reads the first sentence of the Exemption to require "'exelusive possession' to be read according to its ordinary and accepted meaning." Supra ¶ 23. With this interpretation, however, mineral rights holders could never be subjected to taxation under section 59-4-101, for two reasons. First, a mineral rights holder necessarily will never have a property right "akin to an owner" of property that provides "exclusivity against all parties, including the landowner." Supra 124. Second, the second sentence of the Exemption contemplates multiple mineral rights holders operating on the same property, which inherently eliminates any possibility of a mineral rights holder enjoying "exclusivity against all parties."
4 43 I would therefore read the Exemption differently so as to preserve the meaning of its second sentence. In light of what I see as the clear legislative intent to read "possession" as having a special meaning within the Exemption, I would not seek to give "exclusive possession" its ordinary and accepted meaning under our case law. See supra 1 24 (citing Osputhorpe v. Wolf Mountain Resorts, L.C., 2010 UT 29, ¶ 25, 232 P.3d 999). Nor could I give "permit" or "easement" their ordinary meanings, because-as the majority correctly notes-'"we have consistently recognized that permits and easements do not convey any possessory interest in property, much less an exclusive possesso-ry interest." Supra 122. Thus I see only one way to read the Exemption in harmony with section 59-4-101 while avoiding an interpretation that would render the second sentence of the Exemption inoperative. I believe that the legislature intended taxation to hinge on whether the lease, permit, or easement provided exclusivity with respect to use of the property, as expressed in the terms of that grant of rights. Such a reading preserves the ordinary meanings for the terms lease, permit, and easement, while recognizing the clear legislative intent in the Exemption to give the term "possession" a special meaning.
{44 The interpretation of the term "possession" in this Exemption as "use" comports with a generally accepted meaning of the term, the text of the Exemption, and the Privilege Tax Statute as a whole. First, possession generally may refer to concepts of ownership, control, or use. See Buack's Law Dictionary 1281 (Oth ed. 2009). In particu*455lar, possession can be used to mean "the continuing exercise of a claim to the exclusive wse of" property. Id. (emphasis added). Indeed, the concept of "possession" as "use" reflects the rights flowing from an easement. See, e.g., Ouk Lane Homeowners Ass'n v. Griffin, 2011 UT 25, ¶¶ 10, 14, 255 P.3d 677. Second, the interpretation of "possession" as "use" still allows "exelusive" to have its ordinary meaning of "not divided or shared with others." Supra 124 (internal quotation marks omitted). To determine whether taxation is appropriate, the taxing entity can evaluate whether the rights holder is the sole user with respect to the rights laid out in the lease, permit, or easement at issue.1 Third, treating "possession" as "use" mirrors the Privilege Tax Statute's conflation of the two terms. In subsection (1), for example, the statute provides that "a [privilege] tax is imposed on the possession or other beneficial use" of property. Utax Cope § 59-4-101(1)(a) (emphasis added). The term "possession" is paired with "use" throughout seetion 59--4-101.
4 45 This interpretation is more "consistent with the stated legislative purpose in enacting the Privilege Tax Statute." Supra T 26. The majority correctly notes that "in codifying the Statute, the legislature intended to 'close any gaps in the tax laws between those who possess or use exempt property for a profit and those who possess or use nonexempt property for a profit"" Supra ¶ 26 (quoting ABCO Enters. v. Utah State Tax Comm'n, 2009 UT 36, ¶ 23, 211 P.3d 382). The majority's interpretation, however, would render this basis for taxation largely inapplicable, as all non-lease arrangements would remain exempt from taxation. Under my interpretation, the legislature would more likely succeed in "eliminat{ing] any incentive for businesses to 'use exempt property in connection with a for-profit business [to] pay less tax than an owner of nonexempt property'" Supra ¶ 26 (quoting ABCO Enters., 2009 UT 36, ¶ 26, 211 P.3d 382). The majority's interpretation "would lead to a gap in the tax scheme" because it "would establish an incentive for an owner of exempt property to" provide permits and easements, "and thus lower tax liabilityl,] and for businesses to [pay for rights] from exempt over nonexempt property owners." ABCO Enters., 2009 UT 36, ¶ 26, 211 P.3d 382. "Indeed, such a gap would create a potential competitive disadvantage for businesses that [secure permits or easements] from private property owners. These are the sort of gaps that the legislature sought to avoid." Id. This is particularly true because tax exemptions "are matters of legislative grace and should be construed in favor of the taxing entity where legislative intent is not clear." Ivory Homes, Ltd. v. Utah State Tax Comm'n, 2011 UT 54, ¶ 31, 266 P.3d 751.
I 46 Finally, I note that my interpretation is equally consistent "with constitutional principles that 'a use tax may be valid only to the extent that it reaches the contractor's interest'" Supra ¶ 27 (quoting United States v. New Mexico, 455 U.S. 720, 741 n. 14, 102 S.Ct. 1373, 71 L.Ed.2d 580 (1982)). Under my interpretation, the privilege tax still extends only to the extent of the contractor's interest, as expressed in the lease, permit, or easement authorizing use of the property. The Exemption still requires a showing of exclusivity in order to tax otherwise exempt leases, permits, or easements; the inquiry merely focuses on whether the lease, permit, or easement provides for exclusive use of the property to which the lease, permit, or easement relates, as defined by the extent of that grant of rights.
T 47 Under either interpretation, however, I agree with the majority that summary judgment was inappropriate in this case. See supro 132. Genuine issues of material fact exist regarding ATK's use of NIROP, akin to the issues involving ATK's control of NIROP. See supra ¶ 33.

. I thus agree with the majority that the exclusivity referred to in this Exemption means "exclusive as against all parties, including the property owner," supra 124, and that the district court erred in this respect, supra 1 30.