No. 1.3221
I N THE SUPREME COURT OF THE STATE OF MONTANA
SLCURIcIY BANK AND TRUST C M A Y e t a l . ,
O PN
P l a i n t i f f and Respondent,
-vs -
HOLLIS G. CONNORS, a s Montana S t a t e T r e a s u r e r ,
dnd KEITH L. COLBO, a s D i r e c t o r of Montana
Uepartment o f Revenue,
Defendants and A p p e l l a n t s ,
......................
FIRST NATIONAL BANK AND TRUST C M A Y OF HELENA e t a l . ,
O PN
Intervenor,
-vs -
SbCUKLTY BANK AND TRUST COMPANY, a Montana banking
C o r p o r a t i o n , H o l l i s G. Connors, a s Montana S t a t e T r e a s u r e r ,
(3nd K e i t h L. Colbo a s D i r e c t o r of Montana Department
of Revenue,
Defendants.
&Ippeal from: D i s t r i c t Court o f t h e F i r s t J u d i c i a l D i s t r i c t ,
Honorable Gordon R. B e n n e t t , Judge p r e s i d i n g .
Courlsel of Record:
For Appellants :
Hon. R o b e r t L. Woodahl, A t t o r n e y G e n e r a l , Helena,
Montana
J o s e p h R. Massman a r g u e d , Helena, Montana
c o r Respondent:
Cough, Booth, Shanahan and Johnson, Helena, Montana
Ronald F. Waterman argued and Ward A. Shanahan
a p p e a r e d , Helena, Montana
Morrow, Nash and Sedivy, Bozeman, Montana
Rdmund P. Sedivy a r g u e d , Bozeman, Montana
'rowe, Neely and B a l l , B i l l i n g s , Montana
Submitted: A p r i l 21, 1976
Decided ?"
Filed :
M r . J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court.
Defendants a p p e a l through t h e Department of Revenue from
a summary judgment i n t h e d i s t r i c t c o u r t o r d e r i n g t h e s t a t e t r e a s -
u r e r t o refund t o p l a i n t i f f S e c u r i t y Bank and T r u s t Company t h e
c o r p o r a t i o n l i c e n s e t a x f o r t h e y e a r 1972 paid by p l a i n t i f f under
protest. Appeal i s a l s o taken from t h e d i s t r i c t c o u r t ' s d e c r e e on
behalf of i n t e r v e n o r F i r s t National Bank and T r u s t Company of Helena,
t h a t t h e Department may n o t levy and c o l l e c t a c o r p o r a t i o n l i c e n s e
t a x a g a i n s t i n t e r v e n o r , a f e d e r a l l y c h a r t e r e d n a t i o n a l bank, f o r t h e
year 1972.
The c o n t r o v e r s y a r i s e s a s a r e s u l t of t h e passage by t h e
United S t a t e s Congress i n 1969 and l a t e r , of amendments t o t h e s t a t e
t a x a t i o n of n a t i o n a l banks p r o v i s i o n , United S t a t e s Revised S t a t u t e s
$5219, 12 U.S.C. $548, and c e r t a i n Montana l e g i s l a t i v e enactments
pursuant t h e r e t o . The only i s s u e i s whether t h e s t a t e of Montana i s
permitted t o levy and c o l l e c t a c o r p o r a t i o n l i c e n s e t a x from e i t h e r
s t a t e c h a r t e r e d o r f e d e r a l l y c h a r t e r e d banks doing b u s i n e s s i n Montana
f o r t h e t a x y e a r beginning January 1, 1972.
The f a c t s upon which t h e d i s t r i c t c o u r t based i t s summary
judgment were s t i p u l a t e d i n two s e p a r a t e documents between t h e p a r t i e s ,
and a r e summarized h e r e i n .
S e c u r i t y Bank i s a Montana banking c o r p o r a t i o n duly
a u t h o r i z e d and l i c e n s e d under Montana law t o engage i n commercial
banking, w i t h i t s p r i n c i p a l o f f i c e i n Bozeman, Montana. Defendant and
a p p e l l a n t Connors was t h e t r e a s u r e r of Montana; defendant and a p p e l l a n t
Colbo was t h e d i r e c t o r of t h e Department of Revenue.
S e c u r i t y Bank paid i t s c o r p o r a t i o n l i c e n s e t a x f o r t h e
y e a r 1972, under p r o t e s t , t o defendant s t a t e t r e a s u r e r i n t h e sum of
$31,752.38; t h e payment was r e c e i v e d by t h e Department and d e p o s i t e d
w i t h defendant t r e a s u r e r . S e c u r i t y Bank f i l e d a complaint t o r e c o v e r
t h e payment i n t h e d i s t r i c t c o u r t w i t h i n t h e time p r e s c r i b e d by law.
I n t h e immediate bank t r a d e t e r r i t o r y of Bozeman, t h e r e
were a t t h e time of s u i t t h r e e named and s e v e r a l o t h e r n a t i o n a l banks
w i t h banking c h a r t e r s from t h e United S t a t e s government under t h e
National Banking Act; a l l t h e s e banks were i n competition w i t h
S e c u r i t y Bank.
The t a x p a i d by S e c u r i t y Bank was a t a x l e v i e d by t h e
s t a t e of Montana on a l l nonexempt c o r p o r a t i o n s l i c e n s e d t o do b u s i -
n e s s i n Montana under s e c t i o n 84-1501 e t , s e q . , R.C.M. 1947; and f o r
t h e year 1972 t h e s t a t e of Montana d i d n o t r e q u i r e any n a t i o n a l bank
t o pay a t a x based upon i t s n e t income a s r e q u i r e d by s e c t i o n 84-
1501 e t - s e q . , R.C.M. 1947, o r any s i m i l a r s t a t u t e , and no such t a x
was paid by any n a t i o n a l bank. The t a x paid by S e c u r i t y Bank was
computed on t h e b a s i s of i t s n e t income and imposed on S e c u r i t y Bank
under p e n a l t y of law.
The power of t h e s t a t e of Montana t o t a x n a t i o n a l banks -
l o c a t e d i n Montana i s s e t f o r t h i n 12 U . 8 . C . $548, a s amended by
Public Law 91-156. For t h e y e a r 1972, t h e s t a t e of Montana d i d autho-
r i z e t h e l e v y and assessment of a t a x on n a t i o n a l banks by a s s e s s i n g
s h a r e s of s t o c k of n a t i o n a l banks under s e c t i o n 84-4601 e t s e q . , R,C.
M. 1947. I n t h e same y e a r t h e s t a t e taxed s t a t e c h a r t e r e d banks by
a s s e s s i n g s h a r e s of s t o c k of s t a t e banks under t h e same s t a t u t o r y
authority. The method of assessment of s h a r e s of s t o c k and t h e r a t e o f
t a x was i d e n t i c a l f o r n a t i o n a l and s t a t e banks.
The n a t i o n a l banks i n t h e t r a d e a r e a of Bozeman provided
s u b s t a n t i a l l y t h e same commercial banking s e r v i c e s and f u n c t i o n s a s
provided by S e c u r i t y Bank and o t h e r s t a t e banks i n t h e Bozeman t r a d e
area. However, n a t i o n a l banks a r e r e g u l a t e d by f e d e r a l law w h i l e s t a t e
banks a r e r e g u l a t e d by s t a t e law. The d i f f e r e n t sources of t h e i r
c h a r t e r s do n o t a f f e c t t h e i r c l a s s i f i c a t i o n .
I n t e r v e n o r F i r s t National i s a n a t i o n a l banking a s s o c i a t i o n
i n commercial banking, l o c a t e d i n Helena, Montana. F i r s t National
paid a t a x on s h a r e s of s t o c k f o r t h e y e a r s 1971 and 1972 a s r e q u i r e d
by Montana law; but F i r s t N a t i o n a l was n o t r e q u i r e d by t h e Department
t o , n o r d i d i t pay, any c o r p o r a t i o n l i c e n s e t a x t o t h e t r e a s u r e r of
Montana f o r t h e same y e a r s , a s none had been l e v i e d .
Before d e t a i l i n g t h e proceedings i n t h e d i s t r i c t c o u r t ,
a review of t h e sequence and substance of t h e p e r t i n e n t s t a t u t o r y
enactments i s i n o r d e r .
P r i o r t o 1969, 12 U.S.C. 5548, provided i n p e r t i n e n t p a r t
t o t h i s appeal:
"5548. S t a t e Taxation
h he l e g i s l a t u r e of each S t a t e may determine
and d i r e c t , s u b j e c t t o t h e p r o v i s i o n s of t h i s s e c t i o n ,
t h e manner and p l a c e of t a x i n g a l l t h e s h a r e s of t h e
n a t i o n a l banking a s s o c i a t i o n s l o c a t e d w i t h i n i t s l i m i t s .
The s e v e r a l S t a t e s may (1) t a x s a i d s h a r e s , o r (2)
i n c l u d e i i v i d e n d s d e r i v e d therefrom i n t h e t a x a b l e
income o f an owner o r h o l d e r t h e r e o f , o r (3) t a x such
a s s o c i a t i o n s on t h e i r n e t income, o r (4) according t o
o r measured by t h e i r n e t income, provided t h e following
c o n d i t i o n s a r e complied w i t h :
"1. ( a ) The imposition @'i
any S t a t e of any one of
t h e above f o u r forms of t a x a t i o n s h a l l be i n l i e u o f t h e
others * * *."
This s e c t i o n w i l l h e r e i n a f t e r be r e f e r r e d t o a s t h e "old 5548".
P r i o r t o 1969 t h e s t a t e of Montana e l e c t e d t h e a l t e r n a t i v e
of t a x i n g t h e s h a r e s of n a t i o n a l banks i n Montana. The s t a t e a l s o
taxed t h e s h a r e s of s t a t e banks and, u n t i l 1967, a d d i t i o n a l l y imposed
t h e c o r p o r a t i o n l i c e n s e t a x on s t a t e banks only.
Uniformity of t a x a t i o n between s t a t e and n a t i o n a l banks
'
was e s t a b l i s h e d i n 1967 by t h e enactment of s e c t i o n 84-1501.4, R.C.M.
" S t a t e banks organized under t h e Montana Bank Act s h a l l
n o t be r e q u i r e d t o pay t h e Montana c o r p o r a t i o n l i c e n s e
t a x provided f o r under c h a p t e r 15 of t i t l e 84 of t h e
Revised Codes of Montana, 1947, u n t i l and u n l e s s t h e . s a i d
t a x i s r e q u i r e d t o be paid by n a t i o n a l banks organized
under t h e laws of t h e United s t a t e s . "
I '
I n 1969 Congress undertook t h e a b o l i t i o n of n a t i o n a l bank
s t a t e t a x immunity. Public Law 91-156 added t h i s s e c t i o n t o o l d -
$548, a s a temporary amendment:
5 ( a ) I n a d d i t i o n t o t h e o t h e r methods of t a x a t i o n
a u t h o r i z e d by t h e foregoing p r o v i s i o n s of t h i s s e c t i o n
and s u b j e c t t o t h e l i m i t a t i o n s and r e s t r i c t i o n s s p e c i -
f i c a l l y s e t f o r t h i n such p r o v i s i o n s , a S t a t e o r p o l i t i c a l
s u b d i v i s i o n t h e r e o f may impose any t a x which i s
imposed g e n e r a l l y on a non-discriminatory b a s i s
throughout t h e j u r i s d i c t i o n of such S t a t e o r
p o l i t i c a l s u b d i v i s i o n ( o t h e r than a t a x on i n -
t a n g i b l e p e r s o n a l p r o p e r t y ) on a n a t i o n a l bank
M n g i t s p r i n c i p a l o f f i c e w i t h i n such S t a t e i n t h e
same .manner and t o t h e same e x t e n t a s such t a x i s
imposed on a bank organized and e x i s t i n g under t h e
laws of such S t a t e . "
This p r o v i s i o n i s h e r e i n a f t e r r e f e r r e d t o as t h e "temporary amend-
men t !':'
Public Law 91-156 a l s o contained a "permanent amendment" t o
t a k e e f f e c t January 1, 1972, a t which time t h e e n t i r e o l d $548 and
.
-
t h e temporary amendment were r e p e a l e d a u t o m a t i c a l l y . The permanent
amendment i n e f f e c t and h e r e i n a f t e r r e f e r r e d t o a s t h e "new $548",
states i n its entirety:
"For t h e purpose of any t a x law enacted under
a u t h o r i t y o f t h e United S t a t e s o r any S t a t e , a .
n a t i o n a l bank s h a l l be t r e a t e i l a s a bank organized
and e x i s t i n g under t h e laws of t h e S t a t e o r o t h e r
j u r i s d i c t i o n w i t h i n which i t s p r i n c i p a l o f f i c e i s
located. II
Pursuant t o t h i s new t a x i n g a u t h o r i t y granted by Congress
t o t h e s t a t e s under t h e temporary amendment and new $548, t h e Montana
l e g i s l a t u r e i n 1971, enacted s e c t i o n s 84-1501.6 and 84.1501.7, R.C.M.
"84-1501.6. S t a t e and n a t i o n a l banks --. u b j -- t t o t a x .
s ec
E f f e c t i v e with t a x a b l e y e a r s beginning on o r a f t e r
January 1, 1971, every bank organized under t h e laws of
t h e s t a t e of Montana o r of any o t h e r s t a t e and every
n a t i o n a l bank organized under t h e laws of t h e United
S t a t e s a r e s u b j e c t t o t h e Montana c o r p o r a t i o n l i c e n s e
t a x provided f o r under T i t l e 84, c h a p t e r 1 5 , R.C.M. 1947. 11
"84-1501.7. E f f e c t i v e da tes. For t h e t a x a b l e y e a r
beginning on and a f t e r January 1, 1971, s e c t i o n 1
[84-1501.61 of t h i s a c t i s e f f e c i v e i n accordance w i t h
Public Law 91-156, s e c t i o n 1 (12 U.S.C. 548(5).) For
t a x a b l e y e a r s beginning on and a f t e r January 1, 1972,
s e c t i o n 1 [84-1501.61 of t h i s a c t i s e f f e c t i v e i n accord-
ance w i t h Public Law 91-156, s e c t i o n 2 (12 U.S.C. 548)."
A a d d i t i o n a l s e c t i o n of t h i s 1971 a c t r e p e a l e d s e c t i o n 84-1501.4,
n
R.C.M. 1947, a s s t a t e bank immunity from t h e c o r p o r a t i o n l i c e n s e t a x
was no l o n g e r necessary when n a t i o n a l banks were s u b j e c t t o t h e same
tax.
F i n a l l y , about t e n months a f t e r t h e enactment by t h e
Montana l e g i s l a t u r e of t h e above a c t , t h e Congress amended Public Law
91-156 w i t h Public Law 92-213 which extended t h e l i f e of t h e temporary
amendment and o l d 5548, and delayed t h e e f f e c t i v e d a t e of new 5548
f o r one y e a r , u n t i l January 1, 1973.
With t h e foregoing background i n mind, S e c u r i t y Bank sued
f o r refund of i t s 1972 c o r p o r a t i o n l i c e n s e t a x on t h e ground i t was
an u n c o n s t i t u t i o n a l d e p r i v a t i o n of p r o p e r t y t o impose t h e t a x on
s t a t e banks b u t n o t on n a t i o n a l banks. O r i g i n a l l y , t h e only p a r t i e s
t o t h i s a c t i o n were S e c u r i t y Bank, and t h e defendants r e p r e s e n t e d
by t h e Department. O t h e f i r s t s t i p u l a t i o n of f a c t s t h e d i s t r i c t
n
c o u r t e n t e r e d c o n c l u s i o n s of law on November 19, 1974, which
e s s e n t i a l l y h e l d : (1) t h e Department was a u t h o r i z e d by s e c t i o n 84-
1501.6, R.C.M. 1947, and o l d $548, 12 U,S.C. w i t h t h e temporary amend-
ment, t o s u b j e c t n a t i o n a l banks t o t h e c o r p o r a t i o n l i c e n s e t a x i n
1972, t h e r e f o r e t h e c o l l e c t i o n of a c o r p o r a t i o n l i c e n s e t a x from
s t a t e banks was n o t i n and o f i t s e l f v i o l a t i v e of s t a t e o r f e d e r a l
c o n s t i t u t i o n a l r i g h t s of S e c u r i t y Bank; (2) however, i f t h e Department
f a i l e d t o e i t h e r refund t o S e c u r i t y Bank i t s 1972 c o r p o r a t i o n l i c e n s e
t a x o r a s s e s s and c o l l e c t s a i d t a x a s a d e f i c i e n c y from n a t i o n a l banks,
then t h e payment of t h e t a x by S e c u r i t y Bank would be a v i o l a t i o n of
i t s due process r i g h t s under A r t . 111, 5 5 3 and 27, 1889 Montana
C o n s t i t u t i o n and t h e Fourteenth Amendment, United S t a t e s C o n s t i t u t i o n .
S h o r t l y t h e r e a f t e r , F i r s t N a t i o n a l was granted l e a v e t o
intervene. The d i s t r i c t c o u r t vacated i t s November 19 r u l i n g . First
~ a t i o n a l ' si n t e r v e n t i o n was p r e c i p i t a t e d by t h e expressed i n t e n t i o n of
t h e Department t o comply w i t h t h e November 19 r u l i n g by c o l l e c t i n g a
d e f i c i e n c y c o r p o r a t i o n l i c e n s e t a x f o r 1972 from n a t i o n a l banks i n
Montana.
The i s s u e was submitted on b r i e f s , and on September 22,
1975, t h e d i s t r i c t c o u r t e n t e r e d summary judgment o r d e r i n g defendant
Montana t r e a s u r e r t o refund t o S e c u r i t y Bank t h e 1972 c o r p o r a t i o n l i c e n s e
t a x paid under p r o t e s t . I n i t s opinion t h e d i s t r i c t c o u r t h e l d ,
c o n t r a r y t o i t s November 19 c o n c l u s i o n s , t h e Department could n o t
levy and c o l l e c t a c o r p o r a t i o n l i c e n s e t a x from e i t h e r s t a t e o r
f e d e r a l l y c h a r t e r e d banks i n 1972. O October 14, 1975, t h e d i s t r i c t
n
c o u r t e n t e r e d judgment a g a i n s t d e f e n d a n t s , ordered t h e Montana s t a t e
t r e a s u r e r t o refund t o S e c u r i t y Bank $31,752.38, and decreed t h a t
defendants have no a u t h o r i t y t o impose upon o r c o l l e c t a c o r p o r a t i o n
l i c e n s e t a x from i n t e r v e n o r F i r s t National f o r any t a x y e a r p r i o r t o
January 1, 1973.
The i s s u e s on a p p e a l a r e :
1. Did t h e d i s t r i c t c o u r t e r r i n r u l i n g t h a t t h e s t a t e ,
through t h e Department of Revenue, cannot levy and c o l l e c t a c o r p o r a t i o n
l i c e n s e t a x from f e d e r a l l y c h a r t e r e d banks doing b u s i n e s s i n Montana
f o r t h e t a x y e a r 1972?
2. Did t h e d i s t r i c t c o u r t e r r i n r u l i n g t h a t t h e s t a t e ,
through t h e Department of Revenue, cannot l e v y and c o l l e c t a corpora-
t i o n l i c e n s e t a x from s t a t e c h a r t e r e d banks f o r t h e t a x y e a r 1972?
Resolution of t h e f i r s t i s s u e depends upon t h e p r e c i s e
meaning of o l d $548 a s amended by t h e temporary amendment and Public
Law 92-213. The p a r t i e s p r o p e r l y s t i p u l a t e d t h a t s t a t e t a x a t i o n of
n a t i o n a l banks i s c o n t r o l l e d by Congressional a u t h o r i z a t i o n , i . e . ,
12 U.S.C. 5548 i n i t s v a r i o u s forms. See: F i r s t A g r i c u l t u r a l
National Bank v. S t a t e Tax Commissioner, 392 U.S. 339, 88 S.Ct.
2173, 20 L ed 2d 1138. A t t h e o u t s e t , we n o t e t h e r u l e s of s t a t u t o r y
c o n s t r u c t i o n long adhered t o by t h i s Court. I n construing a s t a t u t e ,
t h e i n t e n t of t h e l e g i s l a t u r e i s c o n t r o l l i n g . Such i n t e n t i o n must
f i r s t b e determined from t h e p l a i n meaning of t h e words used, and
i f i n t e r p r e t a t i o n of t h e s t a t u t e can be so determined, t h e c o u r t s may
n o t go f u r t h e r and apply any o t h e r means of i n t e r p r e t a t i o n . Where
t h e language of a s t a t u t e i s p l a i n , unambiguous, d i r e c t and c e r t a i n ,
t h e s t a t u t e speaks f o r i t s e l f and t h e r e i s n o t h i n g l e f t f o r t h e Court
t o construe. The f u n c t i o n o f t h e Court i s simply t o a s c e r t a i n and
d e c l a r e what i n terms o r i n substance i s contained i n t h e s t a t u t e
and n o t i n s e r t what has been omitted. Dunphy v. Anaconda Co., 151
Mont. 76, 438 P.2d 660, and c a s e s c i t e d t h e r e i n ; S e c t i o n s 93-401-15
and 93-401-16, R.C.M. 1947.
The f i r s t paragraph and subparagraph l . ( a ) of o l d $548,
i n e f f e c t d u r i n g 1972, p r o v i d H f o r f o u r d i f f e r e n t methods of permitted
t a x a t i o n of n a t i o n a l banks by t h e s t a t e s , and unequivocably s t a t e
the 'I* ** imposition by any S t a t e of any one of t h e above f o u r
forms of t a x a t i o n s h a l l be i n l i e u o f t h e o t h e r s * * *." (Emphasis
supplied.) The temporary amendment reemphasized t h i s language by
s t a t i n g t h a t t h e temporary amendment i s " s u b j e c t t o t h e l i m i t a t i o n s
and r e s t r i c t i o n s s p e c i f i c a l l y s e t f o r t h " i n t h e e x i s t i n g s e c t i o n s .
Thus, i n 1972, t h e s t a t e s could n o t impose on n a t i o n a l banks any more
t h a t one of t h e f o u r enumerated methods of t a x a t i o n . This position
was, i n f a c t , taken by t h e Department i t s e l f from 1971 u n t i l F i r s t
National i n t e r v e n e d i n t h i s l i t i g a t i o n i n November 1974. CCH S t a t e
Tax Reporter -- - Montana, Paragraph 200-033, p. 10,035.
It i s undisputed t h a t F i r s t N a t i o n a l p a i d , and t h e
Department c o l l e c t e d , a t a x upon s h a r e s of s t o c k of F i r s t N a t i o n a l
f o r 1972. Such i s one of t h e f o u r methods of t a x a t i o n p e r m i t t e d
by o l d $548. It i s a l s o p l a i n t h e corporation l i c e n s e t a x i s a t a x
on n e t income ( s e c t i o n 84-1501,R.C.M. 1947), a n o t h e r one o f t h e f o u r
permitted methods o f t a x a t i o n . It follows t h a t having c o l l e c t e d
under one of t h e methods of t a x a t i o n , t h e Department i s p r o h i b i t e d
by o l d 5548 from imposing a c o r p o r a t i o n l i c e n s e t a x on n a t i o n a l
banks b e f o r e 1973, when new $548 became e f f e c t i v e .
T h e r e f o r e , we a f f i r m t h e d i s t r i c t c o u r t on t h e f i r s t i s s u e .
The d i s t r i c t judge p r o p e r l y r e j e c t e d t h e Department's a t t e m p t t o seek
s t a t u t o r y c o n s t r u c t i o n through t h e u s e of e x t r i n s i x s o u r c e s , a s t h e
words of t h e s t a t u t e i n q u e s t i o n and i t s amendments speak f o r them-
selves. W a r e a l s o n o t impressed w i t h t h e Department's s t r a i n e d
e
d i s t i n c t i o n between o l d 5548, subparagraph 1. ( a ) a s a "condition"
Il
and t h e remaining paragraphs a s l i m i t a t i o n s and r e s t r i c t i o n s " .
The second issue involves the corporation license tax
paid by Security Bank under protest in 1972. It appears this dispute
arises because of the fortuitous circumstance that Congress enacted
Public Law 92-213 (making new 5548 effective January 1, 1973) after
the Montana legislature enacted sections 84-1501.6 and 84-1501.7,
R.C.M. 1947, in reliance on the timetable set out in the temporary
amendment, Public Law 91-156 (making new 5548 effective January 1,
1972).
In 1967, section 84-1501.4 was enacted to provide that
state and national banks be taxed equally with respect to the
corporation license tax. This was in recognition of the fact that
state and national banks in Montana perform virtually the same func-
tions and services and that dual taxation of state banks in the face
of national bank immunity from such dual taxation placed state banks
in an inferior competitive position. This parity provision was
repealed by the 1971 enactment permitting corporation license taxa-
tion of national banks because parity was thought to be provided by
Congress. However, when Congress extended the life of the temporary
amendment and old $548, the Department continued to levy the tax on
shares of - banks and felt it was not authorized to impose the
all
corporation license tax on national banks. By imposing the corporation
license tax on state banks only, the Department was doing what section
84-1501.4 prohibited from 1967 to its repeal. The question then is:
Was the corporation license taxation of state banks in 1972 permissible?
We hold that it was not.
Security ~ a n k s principal argument is that such taxation
'
violates due process rights guaranteed under Art.111, $ 9 3 and 7,
1889 Montana Constitution, because the imposition of the tax on it
in 1972 was not uniform, was discriminatory and was based upon an
arbitrary classification. Security Bank relies on Garrett Freightlines,
Inc. v. The Montana ~.~.Comm'n, Mont. 482, 507 P.2d 1040. However,
161
the issue can be decided on nonconstitutional grounds. Taylor v.
Taylor, - Mon t
- . , 537 P.2d 483, 32 St.Rep.575; Montana State
U n i v e r s i t y v. Ransier, Mon t .--, 536 P.2d 187, 32 St.Rep.
569, and c a s e s c i t e d t h e r e i n .
The d i s t r i c t c o u r t h e l d t h a t because t h e Department
decided i n 1971 t h a t i t could n o t e n f o r c e c o l l e c t i o n of a c o r p o r a t i o n
l i c e n s e t a x from n a t i o n a l banks i n Montana d u r i n g t h e l i f e of t h e
temporary amendment, i t had i n v a l i d a t e d s e c t i o n 84-1501.6 i n s o f a r
a s i t a p p l i e s t o n a t i o n a l banks; and because s e c t i o n 84-1501.6 con-
t a i n s no s a v i n g s c l a u s e , t h e i n v a l i d a t i o n of one p o r t i o n d e s t r o y s t h e
whole. I n l i g h t of t h e l e g i s l a t i v e p o l i c y expressed i n r e p e a l e d
s e c t i o n 84-1501.4, t h e b a s i s of i t s r e p e a l , t h e continued l e g i s l a t i v e
p o l i c y of t a x i n g s t a t e and n a t i o n a l banks e q u a l l y throughout t h e
period o f 1967 t o t h e p r e s e n t , and t h e unavoidable confusion which
r e s u l t e d from t h e Congressional postponement of t h e e f f e c t i v e d a t e of
new $548 t o 1973, we a g r e e w i t h t h e d i s t r i c t c o u r t t h a t when t h e
s t a t e , through t h e Department, p r o h i b i t e d t h e c o r p o r a t i o n l i c e n s e
t a x a t i o n of n a t i o n a l banks, i t was s i m i l a r l y p r o h i b i t e d from c o l l e c t i n g
t h e t a x from s t a t e c h a r t e r e d banks. I n o t h e r words, i t i s obvious
from t h e sequence of e v e n t s t h a t t h e l e g i s l a t u r e d i d n o t i n t e n d
t o a u t h o r i z e t h e Department t o e x a c t t h e c o r p o r a t i o n l i c e n s e t a x from
s t a t e banks and simultaneously r e t u r n t o t h e p o l i c y of n a t i o n a l bank
immunity from t h e same t a x .
W a r e mindful of t h e t r e n d i n f a v o r of implied s e p a r a b i l i t y
e
a s pointed o u t by t h e Department. S t a t e ex r e l . Evans v. F i r e
Department R e l i e f Ass'n, 138 Mont. 172, 355 P.2d 670. However, t h e
f a c t s of t h i s c a s e compel t h e c o n c l u s i o n , i n t h e absence of a savings
c l a u s e , t h e Department cannot t r e a t s e c t i o n 84-1501.6 a s p a r t i a l l y
i n v a l i d and p a r t i a l l y v a l i d . The statement o f t h i s Court i n S t a t e
v . Holmes, 100 Mont. 256, 291, 47 P.2d 624, p a r t i c u l a r l y a p p l i e s :
If* ** I n t h e absence of such a [ s a v i n g s ] p r o v i s i o n t h e
presumption i s a g a i n s t t h e m u t i l a t i o n of a s t a t u t e ,
and t h a t t h e l e g i s l a t u r e would n o t have enacted i t ex-
cept i n i t s entirety. **
+<."
The judgment of the district court is affirmed.
Z&,g -
Justice
We Concur*
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