Great Northern Ry. Co. v. Flaten

• Decision Date: 30 December 1974
• Docket Number: No. 9013,9013
• Citation: 225 N.W.2d 75
• Parties: GREAT NORTHERN RAILWAY COMPANY, a corporation, Plaintiff-Appellant, v. Mabel FLATEN, as County Treasurer of Grand Forks County, North Dakota, and her successor in office, Defendant-Appellee. Civ.
• Court: North Dakota Supreme Court

Page 75

225 N.W.2d 75

GREAT NORTHERN RAILWAY COMPANY, a corporation Plaintiff-Appellant, v. Mabel FLATEN, as County Treasurer of Grand Forks County North Dakota, and her successor in office Defendant-Appellee.

Civ. No. 9013.

Supreme Court of North Dakota.

Dec. 30, 1974.

Syllabus by the Court

1. Where legislative intention is doubtful with respect to the meaning of statutes granting taxing authority, the doubt must be resolved against the government and in favor of the taxpayer. This rule has particular application to statutes governing excess levies, tax authority which is in excess of that deemed necessary for ordinary circumstances by the Legislature.

2. Where Section 57--1512(3) Revised Code of 1943, 1953 Supp., contained an ambiguity concerning the effective term for which an excess levy would be authorized, such authority will be construed as effective for one year only.

Nilles, Hansen, Selbo, Magill & Davies, Ltd., Fargo, for plaintiff-appellant.

Shaft, Shaft, McConn & Fisher, and Thomas B. Jelliff, State's Atty., Grand Forks, for defendant-appellee.

JOHNSON, Judge, on reassignment.

This case raises issues relating to the statutory authority of park districts to levy real estate taxes in excess of the ordinary limits. The appellant, Great Northern Railway Company, has, since the commencement of this action, consummated a corporate merger and is presently known as Burlington Northern, Inc. We will refer to the appellant hereinafter as the taxpayer. The case below was largely handled by stipulation between the parties and involves taxes paid under protest for the year 1967 in the amount of $313.71. Also incident to this action are taxes paid under protest for all other years between 1961 and 1970. The statute in question was amended in 1971 and subsequent years are not in issue. The Grand Forks County District Court upheld the validity of the excess levy of the Grand Forks Park District.

The taxpayer contends that the Grand Forks Park District's excess levy was invalid for the years in question on three grounds:

(1) Section 57--15--12(3) of the North Dakota Century Code (the then North Dakota Revised Code of 1943) ¹ required an annual election for excess levies by park districts.

(2) The excess levy election of the Grand Forks Park District, as held on April 2, 1956, did not provide authorization for an excess levy beyond one year.

(3) The excess levy election was void because the ballot failed to state the specific dollar amount of money raised by such taxes.

We may examine grounds 1 and 2 together as their impact is similar. The basic park district real estate tax limit was, and remains, at four mills on each dollar of assessed valuation within the district. Section 57--15--12(1), N.D.C.C. However, there was authority for excess tax levies under Section 57--1512(3), Revised Code of 1943, 1953 Supp.:

'Whenever the board of park commissioners deem it advisable to raise moneys by taxes in excess of the levy herein provided, for any purposes for which the park district is authorized to expend moneys raised by taxes, such board of park commissioners may increase the levy as herein provided in any amount not to exceed ten (10) mills on the dollar of the net taxable assessed valuation of the district when authorized by a majority of the qualified electors of the park district voting at any regular election in which the question has been submitted.'

As of 1971, this section was amended by addition of the following language:

'Such excess levy may be continued from year to year by action of the park board except that if a petition containing the signatures of not less than ten percent of the electors of the park district, as determined by the city auditor of the municipality in which the park district is situated, is presented to the park board requesting an election on the question of continuing the excess levy, such question shall be submitted to the electors of the park district at the next regular park district election. If the majority of the voters at such election determine not to continue the excess levy, no further excess levy shall be made except that such election shall not affect the tax levy in the calendar year in which the election is held.' Chapter 541, 1971 Session Laws.

The ballots submitted to the Grand Forks Park District voters on April 2, 1956, read:

'To vote mark an X in the after the question Shall the Park District of the City of Grand Forks increase the levy from the amount now produced by 4 mills on the dollar of the net taxable assessed valuation of the Park District to an amount that will be produced by 8 mills on the dollar of the net taxable assessed valuation of the Park District for the current year?

Yes

No '

This question was carried by a majority of the participating voters. There were no subsequent elections regarding the excess levy, but the park district board continued to budget and levy taxes based upon an eight mill limit.

We hold that the election was effective to authorize an excess levy for one year only. While we would ordinarily ignore minor irregularities and defects in tax proceedings, there are too many problems with this tax levy to stamp it with our approval. We are dealing here with an 'excess levy', a tax authority granted to a local unit of government which is beyond that tax authority deemed necessary for ordinary circumstances by the Legislature. In dealing with similar problems in the past, this court has noted that:

'It appears to us that the great care taken by the Legislature to give the electors a complete picture of the effect of an excess levy upon the tax structure of the district indicates that it did not look upon excess levies with favor and intended that they should be approved only if absolutely necessary.' Great Northern Railway Co. v. Severson, 78 N.D. 610, 50 N.W.2d 889, 892 (1952).

The statute itself makes no reference to the effective period for such excess taxing authority. The language does appear to indicate that the board is to make a judgment as to need based upon programs and objectives for the immediate future. The statutes authorizing excess levies for other governmental units--school districts, cities, counties--provided without exception for a specific term during which the excess levy was authorized. See §§ 57--1604 and 57--1702, Revised Code of 1943. See also, § 57--15--20.1, N.D.C.C. (adopted 1971). Such authority is ordinarily limited to a period of from one to five years. The best that can be said of this statute is that it contains an ambiguity on the question of the term for which the excess levy is authorized. Where legislative intention is doubtful with respect to the meaning of the statutes granting taxing authority, the doubt must be resolved against the government and in favor of the taxpayer. See Goldberg v. Gray, 70 N.D. 663, 297 N.W. 124 (1941); Great Northern Railway Co. v. Severson, Supra; Standard Oil Co. of Indiana v. State Tax Com'r, 71 N.D. 146, 299 N.W. 447 (1941). ² The power to impose taxes should not be extended beyond the clear meaning of the statutes.

The park district argues that the election authorized an excess levy for the indefinite future. Under their interpretation of the statute the voters approved giving the park district increased tax authority for as long as the board wished to exercise it. It does not appear that a reasonably well-informed voter would necessarily draw such a conclusion from the ballot. The ballot question makes no specific mention of an effective term for such authority. The ballot question ends with the phrase, 'for the current year.' Counsel for the taxpayer argues that the ballot question relates only to the 'current year.' We need not go so far, but may conclude that the voter was not being presented with a clear indication that his vote would approve excess levies for the indefinite future. ³ This is particularly true where excess levy elections for other governmental units would ordinarily be for fixed, short-term periods. A proper concern for protecting the ballot requires that the voter be informed as to the choice being made, or, at an absolute minimum, that he not be misinformed by the official ballot. Insofar as the ballot may be unintelligible, the electoral process is subverted.

There is an alternate ground upon which the excess levies are questioned in this case. This contention would affect all years of the excess levy. While the section of the Code relating to excess levies for park districts (Section...