
FILED: NOVEMBER 24, 2000
IN THE SUPREME COURT OF THE STATE OF OREGON
WILLAMETTE EGG FARMS, INC.,an Oregon corporation,
	Appellant,
	v.
DEPARTMENT OF REVENUE,State of Oregon,
	Respondent.
(OTC 4134; SC S45877)
	On appeal from the Oregon Tax Court.*
	Carl N. Byers, Judge.
	Argued and submitted November 10, 1999.
	Michael E. Farnell, Hagen, Dye, Hirschy & DiLorenzo, P.C.,
Portland, argued the cause and filed the briefs for appellant. 
With him on the brief was Joseph T. Hagen.
	James C. Wallace, Assistant Attorney General, Salem, argued
the cause and filed the brief for respondent.  With him on the
brief was Hardy Myers, Attorney General.
	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
Durham, Leeson, and Riggs, Justices.**
	RIGGS, J.
	The judgment of the Tax Court is affirmed.
	*14 OTR 337 (1998)
	**Kulongoski, J., did not participate in the consideration
or decision of this case.
		RIGGS, J. 
		This case is before the court on direct appeal from a
judgment of the Oregon Tax Court.  Willamette Egg Farms, Inc.
(taxpayer) appeals the denial of a property tax exemption under
ORS 307.400(5)(e) (set out below) for tangible property used in
its egg-production facility.  The Tax Court concluded that
equipment used to raise egg-laying chicks to maturity is not
"directly related" to the production of eggs.  Willamette Egg
Farms, Inc. v. Dept. of Rev., 14 OTR 337, 343 (1998). 
Consequently, the Tax Court granted summary judgment in favor of
the Department of Revenue (department).  For the reasons that
follow, we affirm the judgment of the Tax Court.
		We take the following undisputed facts from the Tax
Court's opinion:
		"Plaintiff is a large producer, processor, and
marketer of fresh shell eggs and maintains
approximately 1.3 million laying hens.  It is a
vertically integrated business, which means that it
buys approximately 700,000 to 800,000 day-old chicks
per year, raises them in brooder houses until they are
mature (about 18 weeks old), and then transfers them to
laying houses where they produce eggs until they are
approximately two years old.  Plaintiff cleans, grades,
packages, and markets the eggs.


		"The specific equipment in question consists of an
extensive cage system with automatic feeding, watering,
and ventilation systems.  This equipment houses the
young chickens or 'pullets,' until they mature and
become laying hens.  The cages are like those used for
laying hens, except for features related to the
gathering of eggs such as sloped floors and egg
conveyors.  One purpose in having similar cages is to
reduce stress when the pullets are moved from the
brooder house to the laying house." 

Id. at 338-39 (footnote omitted).
		The Jackson County Department of Assessment denied
taxpayer's claim of exemption for the machinery and equipment
used in taxpayer's brooder house.  Taxpayer appealed that denial
to the department, claiming that the property was "directly
related and reasonably necessary" to the production of fresh
shell eggs and, therefore, was exempt under ORS 307.400(5)(e).		The department issued an order upholding the county's
denial of the exemption:
		"There is no question that the production of young
fowl are directly related to the production of eggs. 
In fact, it is those young fowl which will, after the
passage of 17 weeks, become layers and move into the
actual production phase of the subject itself, the egg.


	"But is this brooder house directly related and
reasonably necessary for the production of eggs?
	"Even though the health concerns are important to
these young fowl, it appears from the evidence
presented there are other ways to obtain healthy layer
chickens."

(Italicized emphasis in original; underlined emphasis added.)
	Taxpayer filed a complaint with the Tax Court
requesting relief from the order.  Taxpayer then moved for
summary judgment, arguing that its brooder house equipment was
"reasonably necessary" to the production of eggs.  Accordingly,
taxpayer argued, that equipment was exempt.  In response, the
department conceded that raising chickens "is essential to egg
production," but argued that the brooder house equipment is not
"directly related" to egg production.  After oral argument, the
Tax Court denied taxpayer's motion, concluding that the subject
equipment is not exempt under ORS 307.400(5)(e), because,
although the equipment is "reasonably necessary" to producing
eggs, it is not "directly related" to that purpose.  Willamette
Egg Farms, 14 OTR 342-43.  The department then moved for summary
judgment, which the Tax Court granted. 
 Taxpayer appealed to this court, ORS 305.445, assigning
as errors the Tax Court's denial of its motion for summary
judgment and that court's grant of the department's motion for
summary judgment.  Because taxpayer filed its complaint before
the effective date of the 1995 amendments to ORS 305.445, which
sets out the appropriate standard of review, we review de novo. 
See Delta Air Lines, Inc. v. Dept. of Rev., 328 Or 596, 603, 984
P2d 836 (1999) (holding that 1995 amendments to ORS 305.445
affect only cases filed in Tax Court on or after September 1,
1997). (1)
	Taxpayer first argues that the department is bound by
its administrative finding, contained in its order, that
taxpayer's brooder house equipment is "directly related" to the
production of eggs.  Alternatively, taxpayer argues that the Tax
Court erred in concluding that the brooder house equipment is not
"directly related" to the production of eggs.  According to
taxpayer, equipment used by egg producers to raise pullets is
"directly related" to the production of eggs, because pullets
become layer hens that produce eggs.
	The department disagrees that it is bound by its
finding in its order.  Second, the department argues that,
because taxpayer's brooder house equipment is separated in space
-- pullets are housed separately from layer hens -- and time --
pullets take approximately 18 weeks to grow into layer chickens -- from egg production, the equipment is not "directly related"
to egg production.  The department distinguishes the equipment
used to raise pullets from the activity of raising pullets.  The
department appears to concede that the latter is "directly
related" to egg production, but argues that only the former is
relevant here, and the former is not "directly related" to egg
production.  The Tax Court agreed with the department and
concluded that "the subject equipment results in chickens, not
eggs."  Willamette Egg Farms, 14 OTR at 342. For the reasons
explained below, we hold that taxpayer's brooder house equipment
is not exempt under ORS 307.400(5)(e). (2)  Accordingly, we affirm
the decision of the Tax Court. 
 	We have considered each of taxpayer's three arguments
in support of its position that the department is bound by the
administrative finding contained in its order.  We conclude that
none is well taken or merits discussion.
	We turn to the merits.  ORS 307.400(5)(e) grants an
exemption from ad valorem taxation for:
"Equipment used for the fresh shell egg industry
that is directly related and reasonably necessary to
produce, prepare, package and ship fresh shell eggs
from the place of origin to market, whether bolted to
the floor, wired or plumbed to interconnected
equipment, including, but not limited to, grain bins,
conveyors for transporting grain, grain grinding
machinery, feed storage hoppers, cages, egg collection
conveyors and equipment for washing, drying, candling,
grading, packaging and shipping fresh shell eggs."

(Emphasis added.)  We interpret that statute by analyzing its
text and context.  PGE v. Bureau of Labor and Industries, 317 Or
606, 610, 859 P2d 1143 (1993).  We begin with the text, giving
words of common usage their plain, natural, and ordinary meaning. 
Id.
	ORS 307.400 does not define the wording "directly
related," but those terms are ones of common usage.  The plain,
natural, and ordinary meaning of "directly" is "without any
intervening space or time."  Webster's Third New Int'l
Dictionary, 641 (unabridged ed 1993).  The plain, natural, and
ordinary meaning of "related" is "connected by reason of an
established or discoverable relation."  Id. at 1916.  Based on
the plain meanings of the words "directly" and "related," we
infer generally that equipment that is "directly related" to the
production of fresh shell eggs is equipment that reasonably is
connected to the production of fresh shell eggs without any
intervening space or time.  From text alone, we cannot say with
certainty which of the parties' competing readings captures
legislative intent.
		The context of the statute, however, eliminates doubt. 
Other subsections of ORS 307.400, which provide tax exemptions
for different kinds of farm machinery and equipment, do not
contain the phrase "directly related."  See, e.g., ORS
307.400(3)(b) (exempting farm machinery and equipment "used
primarily for the purpose of feeding, breeding, management and
sale of, or the produce of, livestock, poultry, fur-bearing
animals or bees or for dairying and the sale of dairy products"). 
Thus, the legislature's insertion of the phrase "directly
related" into ORS 307.400(5)(e), when it clearly could have
chosen to omit the phrase, leads us to conclude that the
legislature intended to limit the scope of the exemption.
		Taxpayer argues that the equipment listed as exempt in
ORS 307.400(5)(e) is automatically exempt, as long as the
equipment is "used for the fresh shell egg industry." 
Accordingly, taxpayer argues, its brooder house equipment, some
of which is listed in the statute, must be exempt.  Taxpayer's
argument renders meaningless the qualifying phrase "directly
related."  Only equipment (1) used for the fresh shell egg
industry that is (2) directly related and (3) reasonably
necessary to produce eggs is exempt.  The types of equipment
listed in ORS 307.400(5)(3) are merely examples of equipment that
is exempt, as long as the equipment meets the other statutory
tests.  
	We summarize our interpretation of ORS 307.400(5)(e) as
it relates to the facts of this case in this way:  The process of
raising chickens that might, in time, lay eggs is not the same as
the process of maintaining chickens that are laying eggs.  That
is, the maturation process, and the equipment used to facilitate
that process, is not the same as the production of eggs. 
Consequently, we agree with the Tax Court that the equipment in
question is subject to taxation.  We hold that taxpayer's brooder
house equipment is not exempt under ORS 307.400(5)(e). 
	The judgment of the Tax Court is affirmed.




1. 	All statutory citations in this opinion are to the
statutes in effect before the effective date of the 1995
amendments.

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2. 	The department has not challenged the Tax Court's
ruling that the brooder house equipment is "reasonably necessary"
under ORS 307.400(5)(e).  Thus, the only issue before this court
is the statutory interpretation of "directly related."
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