Klamath Irrigation District v. Employment Division

LEE, J.,

dissenting.

The central issue in this case is whether peti*71tioner is entitled to an exemption under ORS 657.045(1) and (2)(c) from payments in lieu of taxes required by ORS 657.505(6) of the Employment Division Law.

For exemption, petitioner relies solely on ORS 657.045(1) and (2) (c) which exempts services performed

“* * * in connection with the operation or maintenance of ditches, canals, reservoirs or waterways not owned or operated for profit used exclusively for supplying and storing water for farming purposes.” (Emphasis supplied.)

Two questions arise: First, what does “exclusively” mean? Second, does petitioner meet the requirement of “used exclusively * * * for farming purposes”?

The majority, in answer to the first question, has equated “exclusively” with “primarily” or “principally” or “in large part.” The difficulty with that equation is that the legislature gave no indication that such latitude was intended. I dissent because I believe that when the legislature said “exclusively” it meant exactly that and no more.

It is fundamental that unless violative of the constitution, we are bound by legislative enactments. Rockhill v. Benson, 97 Or 176, 182, 191 P 497 (1920); Latourette v. Clackamas Co. Et Al., 131 Or 168, 170, 281 P 182 (1929). The word “exclusively” is not a technical, legal term or “word of art.” It is very much in the public domain and is subject to the mandate of ORS 174.010 which provides:

“In the construction of a statute, the office of the judge is simply to ascertain and declare what is, in terms or in substance, contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars such construction is, if *72possible, to be adopted as will give effect to all.”

(Emphasis supplied.)

Webster’s New Twentieth Century Dictionary 638 (unabridged, Second Edition, 1964) defines “exclusive” as

“1. excluding all others; shutting out other considerations, happenings, existences, occupations, etc., * * *
ÍÍ# # # # #

“4. not shared or divided; sole; single; * * *” Therefore, it is fair to say that in common usage “exclusively” means solely, only, admitting of no exceptions — a concept substantially different from “primarily,” “principally,” or “in large part” to which terms the majority has resorted.

Our Supreme Court has held:

“* * * In the absence of a clear legislative intent to the contrary, this court is bound to give to the words of a statute their natural and ordinary meaning. * * *” (Emphasis supplied.) Wimer v. Miller, 235 Or 25, 30, 383 P2d 1005, 1007 (1963).

Similarly, the Supreme Court has said:

“* # * If the language used in the statute is plain and understandable, then legislative intent must be gathered from the language used and there is no need to resort to rules of statutory construction. * * *” (Emphasis supplied.) State ex rel Appling v. Chase, 224 Or 112, 116, 355 P2d 631, 633 (1960).

In Franklin v. State Ind. Acc. Com., 202 Or 237, 241, 274 P2d 279, 281 (1954), we find the rule that:

“* * * It is elementary that when the legislature, in enacting a law, makes use of plain, urn-ambiguous, and understandable language, it is presumed to have intended precisely what its words imply. There is no occasion to go beyond those words and their plain meaning to ascertain by ap*73plication of rules of statutory construction the legislative purpose.” (Emphasis supplied.)

To the same effect are State of Oregon v. Buck, 200 Or 87, 93, 262 P2d 495 (1953); Boling v. Nork, 232 Or 461, 465, 375 P2d 548 (1962); Gary v. Metropolitan Ins. Co., 141 Or 388, 392, 17 P2d 1111 (1933); Varrelman v. Flora Logging Co., 133 Or 541, 548, 277 P 97, 286 P 541, 290 P 751 (1930); Blalock v. City of Portland et al, 206 Or 74, 80-81, 291 P2d 218 (1955).

In the instant case, the legislature employed a term with a plain understandable meaning which the majority declines to follow.

In circumventing the plain understandable meaning of “exclusively”, the majority has turned to cases in Idaho, New York, and Puerto Eico, some of which involve exemptions to other than the unemployment law. More relevant guidance has been supplied by our Supreme Court.

In Puget Sound B. & D. Co. v. S.U.C.C., 168 Or 614, 620-21, 126 P2d 37, 40 (1942), our Supreme Court had before it a claim for exemption under the statutory precursor of ch 657 and held that:

“* * * It is clear that this remedial legislation should be liberally construed to the end that employees receive the benefits intended and thereby effectuate the purpose of the act. * * *

Unemployment legislation is just as much remedial today as it was in 1942. In Puget Sound, the court gave another reason for finding coverage:

“* * * Where exemption from a general tax is claimed, the statute should be strictly construed against the party asserting such exemption

Eelying on Puget Sound, we have but recently reiterated the same two principles in Holmes v. Mor*74gan, 10 Or App 242, 247, 498 P2d 830, Sup Ct review denied (1972). In Holmes, the employer was also claiming a ch 657 agricultural labor exemption, based on OES 657.045(2) (d). This court denied the exemption and said:

“* * * [T]he Unemployment Compensation Law is remedial legislation and is to be liberally construed to the end that employes receive the benefits intended and thereby effectuate the purpose of the act. Where exemption from unemployment tax is claimed, the statute should be strictly construed against the party asserting such exemption.”

If, then, there is any doubt about what “exclusively” means, the foregoing rules drawn from Oregon cases dealing with the unemployment Act compel me to dissent.

Nor does examination of the legislative history of OES 657.045(1) and (2) (c) lend any support to the majority position — if anything, the opposite is the case.

As Mr. Justice McAllister pointed out, in Roberts v. State Unemployment Comp. Com., 215 Or 100, 103, 332 P2d 1067 (1958), the Oregon definition of “agricultural labor” was taken verbatim from the Social Security Amendments of 1939, Pub L No 379, 53 Stat 1360 (Codified as Int Eev Code of 1954, § 3306(k) (3)). That federal statute incorporated into the definition of “agricultural labor” the language:

“* * * or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways used exclusively for supplying and storing water for farming purposes;”

which, in turn, our legislature adopted by Oregon Laws 1941, ch 443, § 1, p 776. In Congress that language had been added to HE 6635 by the Senate Committee on Finance. The full Senate adopted the amend*75ment with no record of debate; the House concurred in like manner. The Senate Finance Committee explained the additional language as follows:

“* * * Service performed in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways used exclusively for supplying and storing water for farming purposes will also be excepted under this paragraph. Thus, all service performed in the employ of an organization operating exclusively for the purpose of supplying water to farms would be exempt. Most of such organizations are exempt under the present law as governmental agencies. The others are usually nonprofit companies formed by the farmers who use the water.” (Emphasis supplied.) Committee on Finance, S Rep No 734, 76th Cong, 1st Sess 63 (1939).

There is nothing in the report to relax the term “exclusively”; indeed, the word was used twice — both times without modifiers. We are therefore obliged to construe the term with the full impact of its meaning.

With regard to legislative intent, it is noteworthy that the Senate Finance Committee in 1939 took cognizance of the exemption of “governmental agencies” which are the same as the “political subdivisions” whose exemption was withdrawn by Oregon Laws 1973, ch 715, § 1, pp 1650-51, (codified as ORS 657.020(1)). That leaves only the other “nonprofit companies” for whom this ORS 657.045(1) and (2) (c) exemption is intended.

The majority’s mention of Mult. School of Bible v. Mult. Co. et al, 218 Or 19, 343 P2d 893 (1959), bears closer scrutiny. In that case the court was faced with the question whether a noncampus building housing a school’s superintendent of buildings and his wife and the dining hall supervisor was “exclusively used” for the exempt purposes of the school. In addition, the court was also confronted with the question of *76whether a bookstore located several miles from the campus operated by the same school with store profits used exclusively for exempt purposes was exempt. The court held that the residence to be exempt and the bookstore to be nonexempt. In the course of its discussion, the court spoke of the incidental-use test urged by petitioner as follows:

“If the incidental use (in the case at bar, the residential use by essential employees of plaintiff) does not interrupt the exclusive occupation of the buildings for school purposes, but dovetails into or rounds out those purposes, then there can fairly be said to be left an exclusive use in the school on which the law lays hold for purposes of tax exemption * * *.
ÍÍ* # * # *
“* # * A given facility does not have to satisfy the test of ‘absolute indispensability’ to the purposes of the institution in order to enjoy tax exemptions. It is enough if it can be said to be incidental to the prime purposes of the institution and reasonably necessary to the accomplishment of that purpose * * (Emphasis supplied.) Mult. School of Bible v. Mult. Co. et al, supra, 218 Or at 30-31.

It is’ thus evident from Mult. School that for an exemption to be based on incidental use, such use must be reasonably necessary to the primary use. There has been no showing in the instant case that the nonfarming uses of petitioner are “reasonably necessary to the accomplishment of” the exempt farming use.

Similarly, the majority’s reliance on Just-A-Mere Farm v. Feet, 247 Or 413, 419, 430 P2d 987 (1967), seems misplaced. That case dealt with a claim of exemption based on plaintiff’s “* * * tree growing enterprise * # *” including * * preparation and cultivation of the soil, suppression of grass, plant*77ing of seedling trees, spraying, and maintaining machinery used in such operations # The court held that plaintiff’s activities were insufficiently related to farming in its “traditional sense” to qualify for an exemption under ORS 657.045.

It appears to me that the uses of the water admitted by petitioner in the instant case for watering lawns and family gardens are as much, or more, removed from farming in its “traditional sense” as the growing of tree crops. While it is true that the language in Just-A-Mere Farm was not addressed specifically to ORS 657.045(2) (c), I consider it to be controlling because it did relate to the scope of “agricultural labor” as used in ORS 657.045(2).

I find no reason, in logic, public policy, case law, or in ORS 657.045 itself, that would permit a more liberal interpretation of “farming purposes,” as used in ORS 657.045(2) (c), than the interpretation given by Mr. Justice O’Connell, speaking for our Supreme Court in Just-A-Mere Farm, to the words “agricultural labor” in the generic sense.

In S. W. Or. Dairy Herd Ass’n v. Morgan, 17 Or App 300, 521 P2d 1308 (1974), this court dealt with an exemption claimed under ORS 657.045(2) (d) relating to a dairy testing service and applied the language and reasoning of Just-A-Mere Farm in denying exemption from the Oregon Unemployment Compensation Law. We should do likewise in the instant case.

The majority concedes that about 4 per cent of petitioner’s water goes to “esthetic and gardening purposes.” “Exclusively,” however, does not mean 96 per cent. Whether one turns to (1) common usage, (2) the dictionary, (3) legislative history and intent, (4) remedial public need, or (5) the clear implications of our own Oregon decisions, petitioner’s asserted exemption from the Unemployment Compensation Law should be denied.

*78Finally, there remains the scope of de minimis variances from the OES 657.045(2) (c) exemption. I would not hold that the words “used exclusively” proscribe a farmer from using such water to fill the radiator of his urban friend’s car or other similar use. Such use is clearly within the de minimis rule. I also recognize that it would be unreasonable to require petitioner to continuously monitor the ultimate use made of the water delivered for “farming purposes.” But, the case at bar is of a quite different character. The petitioner is knowingly supplying water to users who are not using it for “farming purposes” in the “traditional sense.” Consequently, petitioner clearly fails to qualify for the OES 657.045(2) (c) exemption.

For the foregoing reasons, I respectfully dissent.