                                         No.     13170

          I N THE SUPREME COURT OF THE STATE OF M N A A
                                                 OTN

                                              1975



FIRST NATIONAL BANK OF
LEWISTOWN, M N A A e t a l . ,
            OTN

                                         Petitioners,
          -vs   -
DEPARTMENT OF REVENUE OF
THE STATE O MONTANA,
           F

                                         Respondent.



OKIGINAL PROCEEDING:

     Counsel of Record :

                For P e t i t i o n e r s :

                          Gough, Booth, Shanahan and Johnson, Helena,
                           Montana
                          Ronald F. Waterman a r g u e d , Helena, Montana
                          Luxan, Murf i t t and Davis, Helena, Montana
                          Howard J o Luxan J r . a r g u e d , Helena, Montana

                For Respondent:

                          Joseph R o Massman a r g u e d , Helena, Montana



                                                     Submitted :       October 1 7 , 1975
                                                                   +
                                                                   1
                                                                       C
                                                                            ,   .
                                                       Decided :
                 :'   1


Filed :
M r . J u s t i c e C a s t l e s d e l i v e r e d t h e Opinion o f t h e Court.

              This i s an a c t i o n brought under t h e Uniform D e c l a r a t o r y
Judgments Act, s e c t i o n 93-8901, e t seq., R.C.M.                      1947, and r e q u e s t s
t h i s Court t o assume o r i g i n a l j u r i s d i c t i o n .     Both s i d e s a g r e e
t h e r e a r e no f a c t s i n d i s p u t e .   T h i s Court agreed t o a c c e p t j u r i s -
diction.
              This a c t i o n a r i s e s out of a d i s p u t e between t h e v a r i o u s
banks involved i n t h i s l i t i g a t i o n and t h e Department o f Revenue
a s t o t h e i n t e r p r e t a t i o n of one s t a t u t e , s e c t i o n 84-308, R,C.M,
1947.
              Each y e a r banks doing b u s i n e s s i n t h e s t a t e of Montana
a r e r e q u i r e d t o complete a " ~ a n kStatement f o r Assessment" showing
a l l t h e r e s o u r c e s and l i a b i l i t i e s o f t h a t bank a s d i s c l o s e d by i t s
books, a t twelve o ' c l o c k noon on t h e f i r s t Monday of March.                          Each
of t h e banks involved i n t h i s a c t i o n complied w i t h t h a t requirement.
Each e n t e r e d on t h e Bank Statement f o r Assessment, t h e d o l l a r amount
o f t h e c a p i t a l s t o c k a s shown on t h e books of t h e bank and i n s e r t e d
a s s u r p l u s t h e d o l l a r amount of t h e s u r p l u s a s shown on t h e books
of t h e bank.           F u r t h e r , each bank s e t f o r t h on t h e statement t h e
amount of undivided p r o f i t s and o t h e r r e s e r v e s a s shown on t h e
books of t h e bank.             I n each i n s t a n c e , each o f t h e f i g u r e s s u p p l i e d
t o t h e Department of Revenue by t h e i n d i v i d u a l banks was t h e
f i g u r e shown on t h e books of each bank, a s r e q u i r e d by s t a t u t e and
regulation.
              Also, pursuant t o t h e Department's r e g u l a t i o n MAC
42-2.22      (20)    -    S22410, each bank had i t s bond p o r t f o l i o valued
w i t h i n t h e time designated by r e g u l a t i o n .
              The banks and t h e Department do n o t d i s a g r e e a s t o t h e
amounts e n t e r e d on each of t h e banks' Bank Statement f o r Assessment.
Nor i s t h e r e a q u e s t i o n a s t o any o t h e r i s s u e involved i n r e a c h i n g
t h e v a l u a t i o n of s t o c k t o b e a s s e s s e d t o t h e s t o c k h o l d e r s of each
bank.
               From t h e assessment statement f i l e d by each bank, t h e
Department made v a r i o u s c a l c u l a t i o n s a p p o r t i o n i n g t h e v a l u e of
s t o c k a s s e s s e d t o t h e s t o c k h o l d e r s a s shown on each bank a s s e s s -
ment s t a t e m e n t , between t h e 7% and 30% c a t e g o r i e s a s r e q u i r e d
by s e c t i o n 84-308.         The c a l c u l a t i o n s were based upon adjustments
made by t h e Department t o t h e amount of s u r p l u s a s shown on
t h e books of each bank.                 The Department took t h e d e p r e c i a t e d o r
a p p r e c i a t e d v a l u e of t h e bond p o r t f o l i o , a p p l i e d t h a t . f i g u r e
a g a i n s t t h e amount of undivided p r o f i t as shown on t h e books o f
t h e bank; i f t h e r e s u l t of t h o s e c a l c u l a t i o n s was a n e g a t i v e
undivided p r o f i t f i g u r e , t h e Department then a d j u s t e d t h e s u r p l u s
o f each bank by deducting from t h e s u r p l u s f i g u r e a s shown on t h e
books of t h e bank, t h e n e g a t i v e undivided p r o f i t f i g u r e and used
t h i s a d j u s t e d s u r p l u s f i g u r e , r a t h e r than t h e amount of s u r p l u s
a s shown on t h e books o f each bank.                       The Department then determined
what p r o p o r t i o n of t h e v a l u e of s t o c k a s s e s s e d t o t h e s t o c k h o l d e r
was t o be c l a s s i f i e d w i t h i n t h e 7% c l a s s i f i c a t i o n and what propor-
t i o n was t o b e c l a s s i f i e d w i t h i n t h e 30% c l a s s i f i c a t i o n .
               The banks involved i n t h i s l i t i g a t i o n a l l e g e t h a t t h e
above adjustment of t h e amount of s u r p l u s a s shown on t h e books
of each bank by n e g l a t i v e undivided p r o f i t s f o r u s e i n a p p o r t i o n i n g
t h e v a l u e of s t o c k t o be a s s e s s e d t o t h e s t o c k h o l d e r between t h e
7% and 30% c l a s s i f i c a t i o n was i n c o r r e c t , i l l e g a l and c o n t r a r y t o
s t a t u t e and i l l e g a l l y i n c r e a s e d t h e t a x a b l e v a l u e of each bank.
               Each bank appealed t h e c l a s s i f i c a t i o n and t a x a b l e v a l u e a s
determined by t h e Department t o t h e a p p r o p r i a t e county t a x appeal
board i n each o f t h e c o u n t i e s where t h e i n d i v i d u a l banks t r a n s a c t
business.         The d e c i s i o n s of t h e county t a x a p p e a l boards were then
appealed t o t h e S t a t e Tax Appeal Board where they were pending upon
t h i s C o u r t ' s acceptance o f j u r i s d i c t i o n .
               The s o l e i s s u e i s whether o r n o t t h e Department may make
adjustment i n t h e f i g u r e s shown on t h e books o f t h e v a r i o u s banks
involved i n t h i s l i t i g a t i o n i n determining what p r o p o r t i o n
of t h e v a l u e of s t o c k a s s e s s e d t o t h e stockholder i s t o be
c l a s s i f i e d w i t h i n t h e 7% c l a s s i f i c a t i o n and what p r o p o r t i o n i s
t o be c l a s s i f i e d w i t h i n t h e 30% c l a s s i f i c a t i o n .
              The p e r t i n e n t p o r t i o n of s e c t i o n 84-308, R.C.M.              1947,
which t h i s Court f i n d s t o be c o n t r o l l i n g provides:
              "Moneyed c a p i t a l and s h a r e s of banks, both
              n a t i o n a l and s t a t e , t h i r t y p e r centum (30%)
              of t r u e and f u l l v a l u e on t h a t p o r t i o n of t h e
              t r u e and f u l l v a l u e n o t r e p r e s e n t e d by s u r p l u s ,
              a s shown on t h e books of t h e bank^ seven p e r
                            . .
              centurn (7%) on t h a t c or ti on of t h e t r u e and f u l l
              v a l u e r e p r e s e n t e d byLs u r p l u s a s shown on t h e books
              of t h e bank; provided t h a t on t h a t p o r t i o n of any
              such s u r ~ l u s     which i s over and above t h e amount
              represenked by s t a t e d c a p i t a l of a bank, t h e excess
              s h a l l be s u b j e c t t o t h i r t y p e r centum (30%) of
              t r u e and f u l l value. " (Emphasis added. )
              W f i n d t h e quoted s t a t u t e ' s meaning t o be c l e a r and
               e
unambiguous.           There a r e no t e c h n i c a l words and a common under-
s t a n d i n g of t h e s t a t u t e i s c l e a r from i t s reading.            The d r a f t e r s
of t h e l e g i s l a t i o n obviously intended t h e r e should be no
accounting adjustments made t o t h e f i g u r e shown on t h e books of
t h e bank when a p p o r t i o n i n g t h e amounts between t h e 7% and 30%
classifications.
              I n Morrison v. Farmers & ~ r a d e r s ' S t a t e Bank, 70 Mont.
146, 150, 225 P. 1 2 3 , t h i s Court recognized:
              "*   +
                   :   *   The i n t e n t i o n of t h e l e g i s l a t u r e i n e n a c t i n g
              t h e s t a t u t e i s t h e c o n s i d e r a t i o n which must c o n t r o l
              i n i t s construction            ***           and t o a s c e r t a i n t h a t i n -
              t e n t i o n r e c o u r s e must be had, f i r s t , t o t h e language
              employed 9: 9~        *     i n d u l g i n g t h e presumption t h a t t h e terms
              used were intended t o be understood i n t h e i r o r d i n a r y
              s e n s e , u n l e s s i t i s made apparent from t h e c o n t e x t t h a t
              t h e y i n t e n d e d t o be given a d i f f e r e n t meaning.            *      f; *I'

               (Emphasis added.)
              W e t h e r e f o r e f i n d t h e Department cannot t a k e t h e d e p r e c i a t e d

o r a p p r e c i a t e d value of t h e bond p o r t f o l i o , and apply t h o s e f i g u r e s
a g a i n s t t h e amount of undivided p r o f i t a s shown on t h e books of t h e
bank, and a d j u s t t h e s u r p l u s f i g u r e a s shown on t h e books of t h e bank,
t o a r r i v e a t t h e bank's a s s e s s e d v a l u e .        It must u s e only t h o s e
f i g u r e s shown on t h e books of t h e bank, a s r e q u i r e d by s t a t u t e .
                 The Department argues t h a t i t does n o t know what t o do
w i t h t h e newly c r e a t e d bond assessment t h a t i s r e q u i r e d by
MAC 4 2 - 2 . 2 2 ( 2 0 ) - S 2 2 4 1 0 .   That r e g u l a t i o n was adopted by t h e
Department when i t was determined by t h e Department t h a t t h e
p r e s e n t assessment system d i d n o t a c c u r a t e l y p o r t r a y t h e t r u e
p i c t u r e of t h e bank's property.               This Court can sympathize w i t h
t h e ~ e ~ a r t m e n t ps s i t i o n ; however, we must p o i n t o u t t h a t t h e
                          ' o
s o l u t i o n t o t h a t problem l i e s with t h e l e g i s l a t u r e , and cannot
be solved by d r a f t i n g assessment r e g u l a t i o n s and u s i n g them f o r
c l a s s i f i c a t i o n purposes.
                 This Opinion s h a l l c o n s t i t u t e a d e c l a r a t o r y judgment.
