No. 86-289
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
LEWIS & CLARK COUNTY,
Plaintiff and Respondent,
STATE OF MONTANA, DEPARTMENT OF
COMMERCE and STATE OF MONTANA,
DEPARTMENT OF REVENUE,
Defendants and Appellants.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Robert Holter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
R. Bruce McGinnis, Dept. of Revenue, Helena, Montana
Richard M. Weddle, Dept. of Commerce, Helena, Montana
For Respondent :
Mike McGrath, County Attorney, Helena, Montana
Submitted on Briefs: Sept. 18, 1986
Decided: December 10, 1986
Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
The Department of Commerce and Department of Revenue
appeal a Lewis and Clark County District Court judgment in
favor of Lewis and Clark County.
Two issues are presented on appeal:
(1) Whether the District Court erred in determining
that under $ 61-3-536, MCA, the State must reimburse the
County for revenue lost by the County's erroneous calculation
under the statute?
(2) Whether the District Court erred in granting the
County's request for a declaratory judgment?
We affirm.
In 1981, the Montana Legislature changed the law for
taxing automobiles and light trucks from a property tax
system to a flat fee system. The fees to be paid upon each
licensed vehicle did not equal the amount of revenue
previously raised by the property tax. The legislature
appropriated $3,000,000 from the general fund to make up for
this shortfall. In essence, the State was agreeing to
reimburse the county governments on a dollar for dollar basis
for revenues lost by repeal of the property tax system. In
1983, the legislature transferred the method of funding the
reimbursement to the local government unit by creating the
Local Government Block Grant Program. The legislature
appropriated $3,000,000 from the general fund and earmarked
one-third of the oil severance tax for the program.
The formula for reimbursing the counties was codified
into §
, 61-3-536, MCA, which reads as follows:
61-3-536. State aid for local
government. (1) Each county treasurer
shall compute:
(a) the total amount received during the
period from January 1, 1981, to December
31, 1981, for property taxes on
automobiles and trucks having a rated
capacity of three-quarters of a ton or
less, denoted CT;
(b) the total amount that would have
been received during the same period if
the license fee system, excluding the
block grant fee allocated to local
governments under 61-3-509(3), had been
in effect, denoted CF; and
(c) the number of light vehicles
registered in the county on December 31,
1981, denoted NC.
(2) The three quantities, CT, CF, and
NC, shall be certified to the department
of revenue by February 1, 1982. The
department shall compute for each county
a quantity called county revenue loss,
denoted CRL, and county loss per vehicle,
denoted CLV, and defined as follows:
(a) CRL = larger of:
(i) 0; or
(ii) CT - CF;
(b) CLV = CRL/NC.
(3) In order to be eligible for
reimbursement payment, a light vehicle
must be such that it would have been
subject to ad valorem tax if it had been
registered prior to January 1, 1982.
(4) Prior to February 1 of year denoted
Y, the county treasurer shall determine
and certify to the department the number
of eligible light vehicles registered in
the county on December 31 of the prior
year, denoted NC(Y). Prior to March 1 of
year Y, the department of revenue shall
transmit to the department of commerce
the amount of CLV x NC IY) for each
county.
(5) On March 1 of year Y, the department
of commerce shall transmit to each county
treasurer a warrant in the amount of
CLV x NC (Y) .
(6) Upon receipt of the payment provided
for in subsection (5), the county
treasurer shall credit the payment to a
motor vehicle suspense fund and, at some
time between March 15 and March 30, shall
distribute the payment in the same manner
as funds are distributed to the taxing
jurisdictions as provided in 61-3-509.
The counties were responsible for three figures: (1) the
amount of money received by the county from the property tax
on automobiles and light trucks in 1981; (2) the amount of
money the county would have collected had the fee system been
in effect in 1981; and (3) the number of registered
automobiles and light trucks in 1981. The three figures were
then certified to the Department of Revenue which arrived at
the loss per vehicle by plugging the figures into the formula
described in the statute. The loss per vehicle figure would
remain constant; in future years the counties were only
required to submit the number of registered vehicles to the
State to become eligible for reimbursement.
The Lewis and Clark County Treasurer, pursuant to
subsection (l)(b) of $ 61-3-536, MCA, miscalculated the
amount the County would have received in 1981 if the fee
system had been in effect at that time. The Treasurer
estimated that the County would have received $1,827,219
under the fee system in 1981, rather than $1,370,988, the
correct figure. Because the County submitted an incorrect
figure, the loss per vehicle figure calculated by the State
came to $30.21, instead of the accurate result of $39.91.
The County discovered its mistake in 1983 and certified the
correct figure to the State. The State refused to allow the
County to submit the new figure, arguing that under
S 61-3-536 it could not authorize a change in the figures.
The County filed suit on January 22, 1985, claiming damages
of $1,016,957 for the years 1982 and 1983. It alleges in its
brief that when the shortfalls of 1984 and 1985 are included,
it has been damaged to the amount of $1,814,821.50
The District Court entered judgment in favor of the
County for $1,016,957 and declared the loss per vehicle
figure for Lewis and Clark County to be $39.91.
The standard of review was stated in Lima School Dist.
No. 12 v. Simonsen (Mont. 1984), 683 P.2d 471, 476, 41
In reviewing findings of fact in a civil
action tried without a jury, this Court
may not substitute its judgment in place
of the trier of facts. Our function is
confined to determining whether there is
substantial credible evidence to support
the court ' s findings. We view the
evidence "in a light most favorable to
the prevailing party, recognizing that
substantial evidence may be weak or
conflicting with other evidence yet still
support the findings. " Lacey v. Herndon
(Mont. 1983), 668 P.2d 251, 255, 40
St.Rep. 1375, 1380.
The judicial function in construing and applying
statutes is to effect the intention of the legislature. In
determining legislative intent, the Court looks first to the
plain meaning of the words used in the statute. If intent
cannot be determined from the context of the statute, we
examine the legislative history. Thiel v. Taurus Drilling
~ t d .1980-11 (Mont. 1985), 710 P.2d 33, 35, 42 St.Rep. 1520,
1522; Dorn v. Bd of Trust. of Billings Sch. Dist. (Mont.
further fundamental rule of statutory construction that the
unreasonableness of the result produced by one interpretation
is reason for rejecting it in favor of another that would
produce a reasonable result. Johnson v. Marias River Elec.
Co-op., Inc. (Mont. 1984), 687 P.2d 668, 671, 41 St.Rep.
Upon review of the statute in question, we are unable
to ascertain a definitive legislative intent. Therefore an
examination of the legislative history will be necessary.
The statement of intent to S 61-3-536, MCA, provides in
pertinent part:
It is the purpose of this act to replace
the present property tax on automobiles
and light trucks (3/4 ton capacity or
less) by a license fee based on the age
and weight of the vehicle. It is intended
that this system commence with
registra.tion of vehicles on January 1,
1982.
The financial aid provisions of the bill
are designed to provide a mechanism to
give financial relief to local
governments due to the loss of revenue
from automobile and light truck property
tax.
In addition, the minutes of the February 16, 1981,
meeting of the Senate Taxation Committee reflect a
legislative intent to reimburse the counties "dollar for
dollar for what they lose" by repeal of the property tax
system. (Taxation Committee, Montana State Senate, February
16, 1981, at 2.) The minutes of the April 9, 1981 meeting of
the House Taxation Committee express a similar intent. In
that meeting, Terry Cohea, the management and budget analyst,
commented that "the point of the bill was to reimburse local
governments for every dollar they would lose" by the chanue
to a flat fee system. (Taxation Committee, Montana State
House, April 9, 1981, at 11-12.) This implies that accurate
figures would be certified to the State and would become part
of the fixed formula to be used in all succeeding years to
determine the amount of reimbursement for a particular
county. One can imagine the economic consequences to a
county submitting inaccurate figures to the State. In this
case, the loss per vehicle figure was off by $9.70 in favor
of the State. When that figure was used in the statutory
formula the County realized a significant revenue loss for
the year 1982. Since then the County's revenue loss has
increased by $9.70 for every additional vehicle registered in
the County.
A statute will not be interpreted to defeat its evident
object or purpose; the objects sought to be achieved by the
legislation are prime consideration in interpreting statutes.
Montana Wildlife Federation v. Sager (Mont. 1980), 620 P.2d
1189, 1199, 37 St.Rep. 1897, 1907.
From our reading of the legislative history of
5 61-3-536, MCA, it is clear that the law was intended as a
tax relief measure for owners of automobiles and light trucks
and that the counties were not supposed to lose any revenue
from implementation of the law. The predicament in which the
County now finds itself was not envisioned; to leave the
situation as it stands would defeat the obvious purpose of
5 61-3-536, MCA.
The State argues that under S 61-3-536 it need only
receive the data certified to it as being correct and
manipulate that data to come up with a reimbursement figure,
believing that it is powerless to authorize any corrections
to the certified figures. In answering this argument, we
refer to Bay v. State, Dept. of ~dmin. (~ont.1984), 688 ~ . 2 d
[Allthough we give deference to the
interpretation given a statute by the
officers or agency charged with its
administration, Dept. of Rev. v. Puget
Sound Power and Light Company (1978), 179
Mont. 255, 587 P.2d 1282, this does not
mean that courts must rubberstamp any
interpretation the agencies may give a
statute.
We conclude that there is substantial credible evidence
to support the lower court's findings. The District Court
did not err in determining that under § 61-3-536, MCA, the
State must reimburse the County for revenue lost by the
County's erroneous calculation under the statute.
As to whether the District Court erred in granting the
County's request for a declaratory judgment, a discussion of
the Uniform Declaratory Judgments Act is appropriate.
Section 27-8-102, MCA, delineates the purpose and object of a
declaratory judgment:
This chapter is declared to be remedial;
its purpose is to settle and to afford
relief from uncertainty and insecurity
with respect to rights, status, and other
legal relations; and it is to be
liberally construed and administered.
Section 27-8-202 provides as follows:
Any person interested under a deed, will,
written contract, or other writings
constituting a contract or whose rights,
status, or other legal relations are
affected by a statute, municipal
ordinance, contract, or franchise may
have determined any question of
construction or validity arising under
the instrument, statute, ordinance,
contract, or franchise and obtain a
declaration of rights, status, or other
legal relations thereunder.
The County had the right to have the District Court
construe S 61-3-536, MCA, and thereby determine the correct
loss per vehicle figure to be used by the State. The lower
court ruled that the correct loss per vehicle was $39.91.
The judgment of $1,016,957 and the determination of the
correct loss per vehicle figure of $39.91 is affirmed.
,/,r
I
Justice'
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