AMERICAN LINEN SUPPLY CO v DEPT
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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: Decided: Filed: P 3 rsee September 11, 1980 $EP 3 0 1980 J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. Mr. American Linen Supply C o . a p p e a l e d i t s t a x a s s e s s m e n t 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 847526, R.C.M. 1947, e n t i t l e d i t t o c e r t a i n t a x r e l i e f bene- f i t s p r o v i d e d f o r i n T i t l e 84, C h a p t e r 75, b e t t e r known a s t h e Montana Economic Land Development A c t ( h e r e i n a f t e r MELDA). The Tax Appeal Board g r a n t e d a h e a r i n g and u l t i - m a t e l y r u l e d a g a i n s t American Linen. American in en ap- p e a l e d t o t h e Yellowstone County D i s t r i c t C o u r t f o r r e v i e w . The D i s t r i c t C o u r t e n t e r e d judgment r e v e r s i n g t h e Tax Appeal Board and awarding b e n e f i t s t o American Linen under MELDA. From t h e D i s t r i c t C o u r t judgment, t h e Department of Revenue (DOR) a p p e a l s . American Linen Supply Co. i s a Delaware c o r p o r a t i o n , d o i n g b u s i n e s s and owning r e a l p r o p e r t y i n B i l l i n g s , Montana. American L i n e n ' s p r o p e r t y i s l o c a t e d i n a n area c l a s s i f i e d a s t h e c e n t r a l b u s i n e s s 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 f o u r t e e n - s t o r y o f f i c e b u i l d i n g c o n s t r u c t e d on t h e site. I n J u l y 1977 American Linen a p p l i e d t o DOR f o r t a x b e n e f i t s p r o v i d e d f o r under MELDA. t i o n f o r t a x reduction. DOR d e n i e d t h e a p p l i c a - American Linen a p p e a l e d t o t h e Montana S t a t e Tax Appeal Board, which, a f t e r h e a r i n g , 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 o f MELDA. The Board found t h a t b e f o r e MELDA may be used t o r e d u c e t h e t a x on p r e v i o u s l y zoned p r o p e r t y , a l o c a l government body w i t h zoning a u t h o r i t y must f i r s t d e t e r m i n e whether M L A was ED c o n s i s t e n t w i t h t h e e x i s t i n g zoning p l a n s o t h a t t h e MELDA land u s e c a t e g o r i e s might apply. I f t h e zoning p l a n was c o n s i s t e n t w i t h MELDA, t h e p r e v i o u s l y zoned p r o p e r t y owners who o t h e r w i s e q u a l i f i e d c o u l d t a k e a d v a n t a g e of t h e reduced property t a x schedule. I n t h i s c a s e , American L i n e n ' s p r o p e r t y had been p r e v i o u s l y 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 C o u n c i l , had f a i l e d t o d e t e r m i n e t h a t t h e zoning p l a n was c o n s i s t e n t w i t h t h e M L A program. ED The Tax Appeal Board d e t e r m i n e d 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 L 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 ED 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 B o a r d ' s d e c i s i o n was t h e w e l l - e s t a b l i s h e d r u l e of s t a t u t o r y c o n s t r u c t i o n which demands t h a t t a x exemption i s s u e s be r e s o l v e d , whene v e r t h e r e i s a m b i g u i t y , i n f a v o r of t h e t a x i n g a u t h o r i t y . The Board d e n i e d American L i n e n ' s a p p e a l , and t h e company i n s t i t u t e d a n a p p e a l i n Yellowstone County D i s t r i c t C o u r t . The D i s t r i c t C o u r t r e v e r s e d t h e B o a r d ' s d e c i s i o n and o r d e r e d t h e M L A b e n e f i t s g r a n t e d t o American Linen. ED The c o u r t found t h a t t h e r e w a s no a m b i g u i t y i n t h e s t a t u t e and t h a t M L A b e n e f i t s w e r e c l e a r l y i n t e n d e d t o be awarded t o ED p r o p e r t y owners who had been c l a s s i f i e d a s of J a n u a r y 1, 1976. The D i s t r i c t C o u r t c o n c l u d e d , ". . . t h a t t h e Legis- l a t u r e had some p u r p o s e i n e n a c t i n g 84-7526 i n t h e terms s p e c i f i e d and t h a t i t i n t e n d e d t h a t it b e f u n c t i o n a l and n o t j u s t decorative. . ." DOR a p p e a l s t h e D i s t r i c t C o u r t o r d e r . W e affirm. The s o l e i s s u e b e f o r e t h i s C o u r t i s whether t h e D i s t r i c t C o u r t 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 ) , a p p l i e d t o p r e v i o u s l y zoned a r e a s w i t h o u t 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 cons i s t e n t w i t h t h e e x i s t i n g zoning p l a n . S e c t i o n 84-7526, R.C.M. 1947, p r o v i d e d 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 p r o v i s i o n s of s e c t i o n 84-7505 have been m e t e x c e p t f o r t h o s e p o r t i o n s of l a n d c l a s s i f i e d under t h e p r o v i s i o n s of T i t l e 11, c h a p t e r 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 w i t h t h e p r o v i s i o n s of t h i s a c t , and a s t o t h o s e p o r t i o n s of l a n d t h i s a c t s h a l l be e f f e c t i v e on J a n u a r y 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 p u r s u a n t t o t h e p r o v i s i o n s of t h i s a c t . " T h i s C o u r t f i n d s t h a t t h e p u r p o s e of M L A w a s t o proED v i d e t a x i n c e n t i v e s which would e n c o u r a g e a n inward growth p a t t e r n i n urban a r e a s , t h u s f o r e s t a l l i n g t h e s p r e a d of urban s p r a w l . The l a n g u a g e of M L A r e g a r d i n g i t s p u r p o s e , ED s e c t i o n 84-7503, R.C.M. "Specific goals a r e 1947, i s u n q u e s t i o n a b l y c l e a r : ... ( 2 ) t o encourage u r b a n growth i n a n inward p a t t e r n , r a t h e r t h a n s p r a w l development, y e t t h r o u g h t h e u s e o f open s p a c e p r o v i d e a g r e a t e r p e r c e n t a g e of open l a n d and a h i g h e r d e n s i t y on d e v e l o p e d l a n d w i t h i n t h e urban a r e a . . ." Recognizing t h a t t h e p r i m a r y and o v e r r i d i n g p u r p o s e of t h e A c t was t o e n c o u r a g e c e n t e r c i t y development, we a r e o b l i g a t e d t o r e s p e c t t h a t p u r p o s e . It h a s been t h i s C o u r t ' s l o n g s t a n d i n g 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 s u c h a manner a s t o d e f e a t t h e i r purpose. Doull v. Wohlschlager ( 1 9 6 3 ) , 1 4 1 Mont. 354, 377 P.2d 758, c i t i n g w i t h a p p r o v a l S t a t e e x r e l . Boone v . T u l l o c k ( 1 9 2 5 ) , 72 Mont. 482, 234 P . 277, and Wilkinson v . La Combe ( 1 9 2 1 ) , 59 Mont. 518, 197 P. 836. The o b j e c t s o u g h t t o b e a c h i e v e d by t h i s l e g i s l a t i o n i s a primary c o n s i d e r a t i o n i n o u r i n t e r p r e t a t i o n of it. v . Bieswanger ( 1 9 5 2 ) , 126 Mont. 337, 251 P.2d 232. Corwin For t h i s C o u r t t o c o n c l u d e 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 b o t h i n s u b s t a n c e and i n purpose. If the legislature did n o t intend f o r t h e r e t o be an exception t o t h e procedural r e q u i r e m e n t s of t h e A c t , i t would n o t have d r a f t e d l a n g u a g e c r e a t i n g a n exception. useless acts. The l e g i s l a t u r e d o e s n o t p e r f o r m S e c t i o n 1-3-223, MCA. An 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 p r e f e r r e d o v e r a n 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 v o i d o r t r e a t s t h e s t a t u t e a s mere s u r plusage. S e c t i o n 1-3-232, This Court agrees with t h e MCA. r u l i n g of t h e D i s t r i c t C o u r t when i t found t h a t t h e s t a t u t e w a s " f u n c t i o n a l and n o t j u s t d e c o r a t i v e . " The d e c i s i o n o f t h e Tax Appeal Board d o e s n o t r e c o n c i l e t h e p r o v i s i o n s of M L A i n such a manner a s t o honor t h e ED l e g i s l a t i v e p u r p o s e behind it. Such a f i n d i n g i s t h e e x c l u - s i v e p r o v i n c e 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 C o u r t i s a f f i r m e d . Linen i s awarded t h e r e l i e f American 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
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