Hartford Elec. Light Co. v. Sullivan

• Decision Date: 27 April 1971
• Citation: 161 Conn. 145,285 A.2d 352
• Court: Connecticut Supreme Court
• Parties: HARTFORD ELECTRIC LIGHT COMPANY v. John L. SULLIVAN, Tax Commissioner (F. George Brown, Tax Commissioner, Substituted Defendant).

Page 352

285 A.2d 352

161 Conn. 145

HARTFORD ELECTRIC LIGHT COMPANY v. John L. SULLIVAN, Tax Commissioner (F. George Brown, Tax Commissioner, Substituted Defendant).

Supreme Court of Connecticut.

April 27, 1971.

William G. DeLana Hartford, with whom, on the brief, were C. Duane Blinn, J. Danford Anthony, Jr., and Walter H. Mayo, Hartford, for plaintiff.

Ralph G. Murphy, Asst. Atty. Gen., with whom, on the brief, was Robert K. Killian, Atty. Gen., for defendant.

Before ALCORN, C.J., and HOUSE, THIM, RYAN and SHAPIRO, JJ.

THIM, Associate Justice.

This case is before us on a reservation from the Superior Court in Hartford County, to which it came on appeal pursuant to General Statutes, chapter 212A. The appeal concerns the assessment, by the defendant, of additional taxes plus interest as against the plaintiff, and also the defendant's refusal to allow certain refunds or offset credits. For the reservation to this court the parties have provided a stipulation of facts, and have proffered seven questions to which they request answers. ¹

The plaintiff is, and long has been, a public utility. As such, it is subject to a tax upon its gross earnings as prescribed by §§ 12-264 and 12-265 of chapter 212 of the General Statutes. The plaintiff is subject to accounting regulation by the public utilities commission. According regulations are prescribed in the uniform system of accounts, referred to herein as the uniform system. In 1962, uniform systems were in effect for both electric and gas utilities, and each was dated January 1, 1941. In 1963 and 1964 the uniform systems in effect for both electric and gas utilities were those of January 1, 1963. There are separate uniform systems for electric utilities and gas utilities. The portions of both uniform systems which are pertinent to our consideration are basically identical. Citations to the uniform systems will be by section number and will refer to the electric regulations, since the specific issues here involved relate to electric company accounts.

In the years 1962, 1963 and 1964, the plaintiff duly reported its gross earnings taxes and paid them in full. On March 28, 1966, after an audit by the defendant, the plaintiff was notified of the assessment of additional gross earnings taxes for the years 1962, 1963 and 1964. The plaintiff filed a timely request for a hearing on the assessment pursuant to General Statutes § 12-268i, which was granted. On April 3, 1967, after a hearing on May 12, 1966, the plaintiff received a second notice of assessment for the years 1962, 1963 and 1964 in lesser amounts thna the original assessment, and which superseded the original assessment. Pursuant to § 12-268l the plaintiff next filed an appeal with the Superior Court in Hartford County, appealing from the April 3 assessment. The defendant filed an answer to the plaintiff's petition. The case thereafter came to this court on a reservation, with the questions as already noted.

The basic issue with which we are faced concerns General Statutes § 12-264, and the term therein 'gross earnings.' We must determine whether contributions in aid of construction, transmission receipts and transmission credits are included within that term. ² Thus, in order to answer the questions proffered, we must determine the meaning of 'gross earnings' as employed in § 12-264.

I

Section 12-264, whose predecessor was amended in 1945 (Cum.Sup.1945, § 298h), states: 'Gross earnings * * * shall include all income classified as operating revenues by the public utilities commission in the uniform systems of accounts prescribed by said commission * * *, all income classified in said uniform systems of accounts as income from merchandising, jobbing and contract work, income from nonutility operations and revenues from lease of physical property not devoted to utility operation, and receipts from the sale of residuals and other by-products obtained in connection with the production of gas, electricity or steam.' The initial question with which we are faced is the interpretation of the term 'shall include.' The plaintiff argues that the term is one of limitation, that the items which follow it are the only items which may be included in taxable gross earnings. The defendant argues, to the contrary, that 'gross earnings' merely includes the items stated and that other items may be prescribed by the commission.

The last time this court considered § 12-264 was in Bridgeport Hydraulic Co. v Sullivan, 152 Conn. 671, 211 A.2d 697 which dealt with revenues from nonutility sources. In the Superior Court memorandum, the court considered the meaning of the term 'shall include.' It first noted the dictionary definition of 'include,' and found it to be a term of enlargement, and not to be ambiguous. A-444 Rec. & Briefs, pp. 64, back of 65. We have also turned to the dictionary. We have found, however, that 'include' is primarily defined as a term of limitation. See Webster, Third New International Dictionary; Random House Dictionary. The legal dictionaries also consider the term to be one of limitation, while indicating that 'including' can be a term of enlargement. See Black, Law Dictionary (4th Ed.); Bouvier, Law Dictionary (1934 Rev.); Ballentine, Law Dictionary (3d Ed.). The definition employed in the Superior Court memorandum appears to be the secondary definition in Webster's dictionary. It thus appears that, although the most likely common use of the term 'shall include' would be one of limitation, we cannot say, with certainty, that it must be so employed. We thus find the term 'shall include' as used in § 12-264, to be ambiguous.

Where the meaning of a statute is ambiguous, the history and policy underlying it may be considered. State v. Moreno, 156 Conn. 233, 239, 240 A.2d 871; Rivera v. I. S. Spencer's Sons, Inc., 154 Conn. 162, 164-165, 223 A.2d 808; Lee v. Lee, 145 Conn. 355, 358, 143 A.2d 154. In 1944 we held, in Hartford Electric Light Co. v. McLaughlin, 131 Conn. 1, 6, 37 A.2d 361, that the statute, as it then read, included all earnings of a utility. ³ It is significant that the statute was amended in the next legislative session. Clearly, without an amendment, the statute included all income. The only reason for the legislature to act on that statute would be to clarify it, and since this court had already clarified the fact that the old statute contemplated all income, it is only logical to infer that the legislature intended to restrict that definition. Were that not the intent, the legislation would have accomplished no purpose, and we may not presume that the legislature has enacted futile or meaningless legislation. In re Application of Plantamura, 149 Conn. 111, 114, 176 A.2d 61, cert. denied, 369 U.S. 872, 82 S.Ct. 1141, 8 L.Ed.2d 275; Brown v. Cato, 147 Conn. 418, 421, 162 A.2d 175. We note further that the stated purpose of 1945 Public Act 279, was to 'clarify the meaning of the words 'gross earnings from operations." If the only effect of that act had been to specify what might be part of 'gross earnings from operations,' then the amendment would not have clarified the statute as interpreted by Hartford Electric Light Co. v. McLaughlin, supra, but rather, it would have confused the items to be included within the term 'gross earnings from operations.'

The bill originally introduced to amend what is now § 12-264 was phrased: 'Gross earnings from operations are defined as . . .' H.B. 683, 1945 Sess. The definition included all receipts classified in the uniform system as operating revenues, and all receipts from the sale or rental of specific types of appliances. Sometime thereafter, however, a substitute bill replaced House Bill 683, and that bill was eventually passed. Sup.1945, § 298h. The substitute bill changed 'are defined' to 'shall include' and added all income classified as income from merchandising, jobbing and contract work, income from nonutility operations and revenues from lease of other physical property not devoted to utility operation, and receipts from the sale of residuals and other by-products obtained in connection with the production of gas or electricity. It is argued that the change from 'define' to 'include' demonstrates that the legislature did not intend to define and thus limit, but rather, intended to exemplify. Had the only change been that term, the argument might be convincing. As demonstrated, however, the change was far more comprehensive. Several items were included in the revised bill which had not been included in the original bill, thus extending the income stated to be taxable thereunder. Recalling that the term 'include' is more generally used as a term of limitation, we have concluded that the use of 'include' instead of 'define' was precipitated by the addition of the several items noted, which created a comprehensive list rather than a compact definition.

One last portion of legislative history convinces us that the result which we have reached is correct. In 1961, § 12-264 was repealed, and then reenacted as § 14 of 1961 Public Act 604. In the new statute, municipal utilities were added, but the portion of the statute which included operating revenues as gross earnings was left basically unchanged. Immediately thereafter, however, and preceding the rest of the categories of included revenue, the phrase 'and, with respect to each such company' was added, replacing 'for such companies.' Were we to adopt the defendant's interpretation of the statute, then the 1961 phrasing would be for naught, since the items stated in the statute would not be inclusive. Thus, municipal utilities could be taxed on the same income as could other utility companies. The only other approach to sustain the defendant's interpretation, in keeping with what seems to be an obvious intent to restrict the tax liability of municipal utilities, would be to find that the single use of 'shall include' in the statute was intended to be a term of limitation as...