State v. Wakefield Fisheries, Inc.

RABINOWITZ, Justice

(dissenting in part, concurring in part).

I find I am unable to agree with the majority’s construction of the statutes establishing the tax rate applicable to commercial crab fisheries for the tax period subsequent to 1955. In my opinion the commercial crab processing operations of ap-pellees were taxable at the rate of four percent of the value of the crab meat processed during the tax period in question.1 Consideration of the historical development of this statute, together with an analysis of the text, leads me to conclude that in regard to subsections (1) and (2) as AS 43.75.060 the legislature intended to distinguish between floating and shore based commercial crab fishing operations.

The critical problem raised in this appeal is whether floating crab processing ships fall within the class “Freezer ships and other floating cold storages” drawn by AS 43.75.060(2). The record adequately supports the trial court’s finding that “freezer ship” is, and was at the time of enactment, a term which had acquired a “peculiar and appropriate meaning” within the fishing industry. However, “other floating cold storages” was not shown at trial to have any such peculiar meaning in the industry. Thus in the context of this litigation, this term, and its applicability to appellees’ commercial crab fishing operations, required judicial construction. The basic rules of statutory construction are found in AS 01.-10.040 where it is provided that common words are to be interpreted according to common usage and usual rules of grammar, and in AS 01.10.020 which mandates that all rules of construction are subordinate to the primary objective of effectuating legislative intent.2 Also of significance is the rule of statutory construction this court recently employed in Laborers and Hod Carriers Union, Local No. 341 v. Groothius, Opinion No. 773, 494 P.2d 808 (Alaska, 1972). There we said:

Although there may be a presumption that an amendment is intended to change legal rights rather than to interpret the preexisting law, the fact of amendment itself does not indicate whether the change is one of substance or form. Since the amendment was enacted during the controversy which arose as to the interpretation of the original act, it is just as logical to regard the amendment as a *174legislative clarification of the original language and not as a substantial change, (footnotes omitted)

With these rules of construction in mind, reference to the historical development of the legislation in question is appropriate. In 1949 the territorial legislature provided for license taxes on salmon, crab, and clam canneries. This 1949 act provided, in relevant part, for a license tax for “crab canneries, both shore based and floating. . . . ”3 The 1949 territorial legislature also enacted the first statute licensing and taxing other fish processors.4 In this latter legislation, which was the predecessor of the present AS 43.75.060, the taxed class was defined as “Cold storage and other fish processors.” The wording of the statute suggests that “cold storages” were engaged in what could be termed processing. This is further borne out by the provision for calculating the tax applicable to cold stor-ages which was geared to the amount of fishing resource bought or otherwise obtained for processing through “freezing, salting, or other method.” 5

In 1951, “Freezer ships and other floating cold storages” were first singled out for a higher tax.6 Subsection (a) of Section 1, Chapter 116 [1951] SLA referred to “Shore based cold storages and all other fish processors, except salmon canneries, herring processing plants, crab canneries and clam canneries.” The 1 percent tax for such businesses was to be levied on the basis of “fishing resource[s] bought or otherwise obtained for processing through freezing, salting or other method.” Subsection (b) of Section 1, Chapter 116 [1951] SLA provided for a tax equal to 4 percent on “Freezer ships and other floating cold storages” and was based on “fishing resource[s] bought or otherwise obtained for processing through freezing.” Thus the 1951 act seems to have created an artificial distinction between floating freezers and whatever other fishing processing might happen to occur afloat. Such a distinction would be understandable and reasonable only if no other processes then took place afloat and none were envisioned.

In 1955 the legislature further amended the statute in question by eliminating this apparent distinction between floating freezers and other floating cold storages, or floating processors. This was accomplished by the legislature’s providing that the 4 percent tax was applicable to “Freezer ships and other floating cold storages” based on the value of the “fishing resource bought or otherwise obtained for processing through freezing, salting or other method, or the taking of crab for export without such processing.” 7

In my view the legislative intent here was to further broaden that class encompassed by “freezer ships and other cold storages” to include all processing taking place afloat, whether or not then a common practice or one the legislature specificially foresaw. Once the language of what is now AS 43.-75.060(1), pertaining to shore based cold storages and all other fish processors engaged in freezing, salting, or other methods of fish processing, was repeated in the 1955 amendment, the only way to avoid over*175lap between AS 43.75.060(1) and AS 43.-75.060(2), relating to freezer ships and other floating cold storages engaged in freezing, salting, or other methods of fish processing, and to give effect to each section would be to make the dividing line between the two classes whether the fish processing facilities were afloat or ashore.

In 1966 during the controversy which arose as to the interpretation of AS 43.75.-060(1) and (2), the legislature amended AS 43.75.060 by providing that

‘shore-based cold storages and other fish processors’ mean those cold storages and processing plants which are permanently attached to the land or have remained in the same location for a period of not less than one calendar year.8

The 1966 amendment further provided that cold storages and fish processing plants which are not shore based under the above definition are floating cold storages under AS 43.75.060(2).

Thus it seems to me that the 1955 amendment, as further clarified by the 1966 amendment, broadened the scope of the class “Freezer ships and other floating cold storages” to include within its ambit the processing operations conducted aboard appellees’ vessels.9 Once the processing distinction between AS 43.75.060(1) and AS 43.75.060(2) was eliminated by the 1955 amendment, any attempt to maintain a distinction on processing lines becomes manifestly unmanageable and in conflict with the legislature’s intent. Since the tax period in question did not begin until well after the 1955 amendment, the appellee crab processors should have been taxed in accord with the legislative intent that had by that time been demonstrated to classify fish processors on location criteria.

I am in agreement with the majority’s disposition of the declaratory judgment and procedural tax issues which were presented in this appeal.

. In this regard I am of the further view that the first letter of notice to Pan Alaska from an official of the Department of Revenue, imposing the lower rate of one percent, was sufficient to constitute an administrative ruling which could not be changed retroactively or applied inconsistently.

. Sherman v. Holiday Constr. Co., 435 P. 2d 16 (Alaska 1967) ; Gordon v. Burgess Constr. Co., 425 P.2d 602 (Alaska 1967).

.Ch. 82, § 3, [1949] SLA, now codified as AS 43.75.010. This section provided as to crab canneries, both shore based and floating, the following:

An annual license tax equal to two percent of the value of the raw crabs. The raw crab value for the purpose of this license shall be the actual price paid for the same either by cash or its equivalent according to the provisions above set forth for herring processing plants.

Under the subsection relating to herring processing plants, the statutorily fixed criteria for determination of value of the raw material was made applicable to herring caught in company owner or subsidized boats operated by employees of the processor or under lease or other agreement.

. Ch. 97 [1949] SLA.

. Note ch. 97 [1949] SLA did not then distinguish complete processing from incomplete. It should also be noted that this act explicitly recognized and treated alike resources obtained from company owned boats and from independent ones.

. Ch. 116 [1951] SLA.

. Ch. 102, § 1(b), [1955] SLA.

. Ch. 88, § 1, [1966] SLA.

. See Laborers and Hod Carriers v. Groothius, Opinion No. 773, 494 P.2d 808 (Alaska, 1972).