NO. 93-407
IN THE SUPREME COURT OF THE STATE OF MONTANA
LODGE GRASS HIGH SCHOOL DISTRICT NO. 2,
Petitioner and Appellant,
v.
LORRAINE HAMILTON, TREASURER, BIG
HORN COUNTY,
Respondent and Respondent,
and
BIG HORN COUNTY HIGH SCHOOL DISTRICT NO. 1,
Respondent and Intervenor.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Big Horn,
The Honorable G. Todd Raugh , Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James L. Vogel, Attorney at Law, Hardin,
Montana
For Respondent:
Natasha J. Morton, Attorney at Law, Hardin,
Montana (Hamilton)
Laurence R. Martin, Michael K. Rapkoch: Felt, Martin
& Frazies, Billings, Montana (Intervenor)
IW? % 4 1994 submitted on Briefs: January 13, 1994
Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from the Thirteenth Judicial District Court,
Big Horn County. Lodge Grass High School District No. 2 (Lodge
Grass) appeals that court's order distributing coal tax revenues
from mines within the Decker Elementary School District (Decker
District) to Big Horn County High School District No. 1 (Hardin).
We affirm.
On June 15, 1992, Lodge Grass sought declaratory relief by
requesting judicial interpretation of 5 15-23-703(4), MCA (1991).
Lodge Grass alleged that the Big Horn County treasurer was
improperly distributing Decker District's gross proceeds coal tax
revenue to Hardin in conflict with 5 15-23-703(4), MCA (1991).
Lodge Grass argued that 15-23-703(4), MCA (1991), compelled the
treasurer to distribute the Decker District's gross proceeds coal
tax revenue to Lodge Grass.
The court allowed Hardin to intervene in the matter. Hardin
and Lodge Grass were the only active parties at the District Court
level.
Both parties agreed that there were only five high school aged
children in the Decker District and the arrangement for years had
been to send the students to school in Wyoming. Previously, in
January 1990, a group of electors in the Decker District filed a
petition with the Big Horn County Superintendent of Schools (County
Superintendent). The petition sought a transfer of the Decker
District territory from Lodge Grass to Hardin. The County
superintendent held a hearing and subsequently transferred the
Decker District territory to Hardin.
Lodge Grass appealed the decision to the State Superintendent
of Public Instruction, who, on October 26, 1990, affirmed the
County Superintendent's decision to transfer the Decker District.
On December 24, 1990, Lodge Grass petitioned for judicial review of
that decision. District Court Judge Holmstrom dismissed the
petition as untimely and we upheld his decision in Pretty On Top v.
Snively, Cause No. 93-289 (decided March 22, 1994). In February
1991, the County Superintendent issued an order transferring the
Decker District to Hardin.
Since 1991, the gross proceeds coal tax revenue from mines in
the Decker District have been distributed to both Hardin and Lodge
Grass. The Big Horn County treasurer has distributed a portion of
the tax to Lodge Grass to cover bonded indebtedness, which Lodge
Grass incurred while serving the Decker District.
Because no factual issues existed, the parties filed cross-
motions for summary judgment. The District Court granted summary
judgment in favor of Hardin, concluding that 5 15-23-703(4), MCA
(1991), required that the coal tax revenues be distributed to
Hardin. Lodge Grass appeals and presents one issue:
Did the District Court err by concluding that 5 15-23-703(4),
MCA (1991), compelled the distribution of the Decker District's
gross proceeds coal tax revenues to Hardin?
Our standard of review on a grant of summary judgment is
identical to that of the trial court. McNeil v. Currie (1992), 253
Mont. 9, 14, 830 P.2d 1241, 1244. Summary judgment is proper when
no genuine issues of material fact exist and the moving party is
entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.
If no disputed factual issues exist, then we examine whether the
court correctly interpreted the law. See McNeil, 830 P.2d at 1244;
see also Andrews v. Ford Construction (1990), 241 Mont. 203, 205,
786 P.2d 18, 19.
Here, after a careful review of the record we conclude that no
disputed issues of material fact exist. Thus, we must review
whether the law was interpreted correctly.
It is well established that this Court, in construing a
statute, will effectuate the statute's legislative intent. State
ex rel. Neuhausen v. Nachtsheim (1992), 253 Mont. 296, 299, 833
P.2d 201, 204. We first look to the plain meaning of the statute
to determine legislative intent. Holly Sugar v. Dep't of Revenue
(1992), 252 Mont. 407, 412, 830 P.2d 76, 79. If the plain meaning
of the statute is clear from the language, we apply the law as
written by the legislature and look no further to determine the
legislature's intent. Neuhausen, 833 P.2d at 204.
Section 15-23-703(4), MCA (1991), provides in pertinent part:
Except as provided in subsections (5), ( 6 ) , and (8), the
county treasurer shall credit the amount determined under
subsection (3) and the amounts received under 15-23-706:
. . .
(b) to school districts in the county that either levied
mills in school fiscal year 1990 against 1988 production
or used nontax revenue, such as Public Law 81-874 money,
in lieu of levying mills against production, in the same
manner that property taxes collected or property taxes
that would have been collected would have been
distributed in the 1990 school fiscal year in the school
district.
Lodge Grass contends that since the Decker ~istrictwas within the
Lodge Grass district in 1990, Hardin could not levy against Decker
District mines in that year. Therefore, since Hardin did not levy
against Decker District mines in 1990, 15-23-703(4)(b), MCA
(1991), precludes Hardin from ever receiving Decker District tax
revenues. Lodge Grass argues that it is the only district entitled
to receive coal taxes from the Decker District. This argument
lacks merit.
A plain reading of the statute reveals that a school district
only had to levy against 1988 production in 1990. We will not
insert omitted terms into a statute. Neuhausen, 833 P.2d at 204.
Section 15-23-703(4) (b), MCA (1991), did not require a school
district in 1990 to levy against a specific territory in order to
receive tax revenues fromthat territory. However, the statute did
provide that if a school district levied against any mine in 1990,
then that district was entitled to receive coal tax revenues.
Here, it is undisputed that Hardin levied against 1988
production in 1990 in the Hardin district. Although Hardin did not
levy against Decker District mines in 1990, the plain language of
5 15-23-703(4)(b), MCA (1991), confirms that Hardin was not
required to levy against the specific Decker District mines in
1990. Instead, Hardin only had to levy against 1988 production in
1990. Since Hardin levied against 1988 production in 1990, we
conclude Hardin was entitled to tax revenues from the Decker
District. We now turn our attention to whether Hardin was entitled
to the distribution of the Decker District coal tax revenues under
5 15-23-703 (4)(b), MCA (1991).
Section 15-23-703(4) (b), MCA (1991), provides that coal tax
revenues are to be distributed the same as property tax revenues
were distributed in 1990. Lodge Grass argues that this sentence
should be interpreted to mean that Lodge Grass has a "grandfathered
right" to the coal tax revenues from the Decker District.
According to Lodge Grass, since it received the coal tax revenues
from the Decker District in 1990, it has a "grandfathered right" to
continue receiving this revenue from that territory even though the
Decker District was subsequently transferred to Hardin.
When a territory is transferred from one district to another,
§ 15-23-703(4)(b), MCA (1991), is not clear on its face as to the
coal tax distribution scheme. However, it is well established
"[ilf intent cannot be determined from the content of the statute,
we examine the legislative history." State ex rel. Roberts v.
Public Service Commission (1990), 242 Mont. 242, 246, 790 P.2d 489,
492.
In 1989, the legislature restructured both state and local
property taxes in response to this Court's ruling in Helena
Elementary Sch. Dist. No. 1 v. State (l989), 236 Mont. 44, 769 P.2d
684, which declaredthe State's system for funding public education
unconstitutional. The legislature was concerned that the increase
in mills from 45 to 55 would drastically affect coal producers.
Thus, the State's old method of taxing coal gross proceeds with a
property tax was replaced with a "flat tax" of five percent on
production. 1989 Mont. Laws Ch. 11, Section 77. After that law
became effective, school districts were prohibited from levying a
property tax against coal production. Instead, the school
districts received the five percent "flat tax" revenues which were
collected from the coal mines. In short, the "flat taxw replaced
the property tax on coal production.
Hardin argues, and we agree, that the final clause of 5 15-23-
703(4) (b), MCA (1991), directs that the "flat tax" be distributed
just as if a property tax on coal had been collected and in
accordance with the property tax distribution schemes of 1990.
Since S 15-23-703(4) (b), MCA (1991), refers directly to the 1990
property tax distribution scheme, we must examine the 1990 statutes
which distributed property taxes. See Matter of W.J.H. (1987), 226
Mont. 479, 483-84, 736 P.2d 484, 486-87. Property taxes were
distributed in 1990 by 5 20-6-412, MCA (1989), which states:
The property tax valuation used under the provisions of
20-9-142 for the purposes of fixing the tax levies,
except the debt service fund tax levy, for a district
that has had a boundary change at any time before the
second Monday in August shall include the property tax
valuation of any territory added to the district by such
boundary chanqe or exclude the property tax valuation of
any territory detached from the district by such boundary
chancre.
(Emphasis added.)
In this case, Hardin's boundary changed when the Decker
District was transferred to it. Thus, under the 1990 property tax
scheme, Hardin would have been entitled to the property tax revenue
from the Decker District after that territory was transferred to
Hardin. See 5 20-6-412, MCA (1989).
The "flat tax," is distributed "in the same manner that
property taxes collected or property taxes that would have been
collected would have been distributed in . . . 1990 . . . .
II
Section 15-23-703 (4)(b), MCA (1991), (emphasis added) . Since
Hardin would have been entitled to the Decker District coal
property tax under the 1990 distribution scheme, 5 15-23-703 (4)(b),
MCA (1991), distributes the 1991 "flat taxw against the Decker
District mines to Hardin. We conclude that § 15-23-703(4)(b), MCA
(1991), and 5 20-6-412, MCA (1989), when read in conjunction,
compel this Court to hold that Hardin was entitled to the
distribution of the Decker District coal tax revenues in 1991.
Af finned.