Southern Valley Grain Dealers Ass'n v. Board of County Com'rs of Richland County

• Decision Date: 18 August 1977
• Docket Number: No. 9321,9321
• Citation: 257 N.W.2d 425
• Parties: SOUTHERN VALLEY GRAIN DEALERS ASSN., a North Dakota Unincorporated Association, Petitioner (Appellant below) and Appellant, v. BOARD OF COUNTY COMMISSIONERS OF RICHLAND COUNTY, North Dakota, Respondent (Appellee below) and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 425

257 N.W.2d 425

SOUTHERN VALLEY GRAIN DEALERS ASSN., a North Dakota Unincorporated Association, Petitioner (Appellant below) and Appellant, v. BOARD OF COUNTY COMMISSIONERS OF RICHLAND COUNTY, North

Dakota, Respondent (Appellee below) and Appellee.

Civ. No. 9321.

Supreme Court of North Dakota.

Aug. 18, 1977.

Stephen W. Plambeck, of Nilles, Hansen, Selbo, Magill & Davies, Fargo, for petitioner (appellant below) and appellant.

Colin A. Bailey, of Bailey & Lies, Wahpeton, and Christian M. Anderson, State's Atty., Wahpeton, for respondent (appellee below) and appellee.

VOGEL, Justice.

This appeal involves the interpretation and constitutionality of Chapter 40-57.1, North Dakota Century Code, entitled "Tax Exemptions for New Industries." We affirm the judgment of the district court holding the chapter constitutional and upholding an exemption granted under the statute.

Froedtert Malt Division of Farmers Union Grain Terminal Association made an application for exemption from ad valorem taxation on property to be used in the operation of a project to be constructed in Richland County. Since the location was outside any incorporated municipality, the application was made, as required by Section 40-57.1-03, N.D.C.C., to the Board of County Commissioners of Richland County. The project to be constructed consisted of a grain elevator, equipped with complex machinery designed to clean, grade for malting purposes, prepare for malting, and store barley exclusively. The applicant has further plans to construct a malting plant in the same general location, but has not yet applied for tax exemption for that plant.

The appellant is an unincorporated association of grain dealers (elevator operators) in approximately the southeastern quarter of this State. Members of the association appeared at meetings of the Richland Board of County Commissioners in opposition to the granting of the tax exemption, and, when the exemption had been granted, appealed, as permitted by Section 11-11-42, N.D.C.C., to the district court of Richland County. That court, as required by Section 11-11-43, N.D.C.C., heard the matter de novo and affirmed the action of the Board of County Commissioners in granting the tax exemption. This appeal followed.

The appeal in this court raises three principal issues.

The first issue is whether the proceedings before the Board of County Commissioners are void and of no effect for want of due process of law. As subsidiary issues under this point, the appellant asserts: (a) that failure to publish a notice to competitors prescribed by Section 40-57.1-03, N.D.C.C., giving notice as to meetings subsequent to the meeting of November 19, 1974, at which the application was considered, violated due process; (b) that even if the statutory notice requirements were satisfied, failure to direct notice to competitors violated due process; (c) that due process was violated because the attorney for Froedtert Malt was also an Assistant State's Attorney and that the consequent conflict of interest vitiated the proceedings; (d) that ex parte communications between the attorney for Froedtert Malt and the Board of County Commissioners violated due process and the open-meetings statutes of this State and vitiated the proceedings; and (e) that the action of the Board of County Commissioners in first granting a five-year tax exemption, then revoking such action and granting a three-year tax exemption, and then revoking such proceedings and granting a five-year tax exemption, violated due process.

The second principal allegation of the appellant is that Froedtert Malt Division of Farmers Union Grain Terminal Association is not entitled to an exemption from ad valorem taxation of property under Chapter 40-57.1, N.D.C.C.

The third principal contention is that Chapter 40-57.1 is unconstitutional.

We will discuss these contentions in the order stated. Before discussing them, a further statement of facts is advisable.

On October 11 and 18, 1974, a notice was published in the Richland County official newspaper by Froedtert Malt advising potential competitors and any other persons interested that a meeting of the Board of County Commissioners would be held on November 19, 1974, at a specified time, to consider the application of Froedtert Malt for tax exemption. Apparently it is conceded that this notice complied with the requirements of Section 40-57.1-03, N.D.C.C., so far as the meeting of November 19, 1974, was concerned.

On November 19, 1974, the Board of County Commissioners met and heard statements from Froedtert Malt and from opponents, including representatives of the appellant. No decision was made on that day, although apparently there was some indication that a decision would be forthcoming promptly. The minutes say only that "No action was taken at this meeting." We are not advised as to what meetings, if any, were held between November 19, 1974, and February 4, 1975.

On February 4, 1975, the Board of County Commissioners met again. This was a regular, or routine, meeting and no specific notice was given under Section 40-57.1.-03. The meeting was recessed until February 5, and on that day the Board of County Commissioners voted to grant to Froedtert Malt a five-year tax exemption. Froedtert Malt then made application to the State Board of Equalization for approval of the five-year tax exemption. On April 18, 1975, the State Board of Equalization returned the application to the County. The letter of transmittal suggested some doubt as to the sufficiency of notice to competitors and indicated concern over a possible court test of validity of the proceedings by which the exemption was granted. The State Board of Equalization also added a requirement that Froedtert Malt buy barley only through commercial outlets and not by direct purchase from farmers.

On April 28, 1975, the Board of County Commissioners had a special meeting, called by the chairman, but without published notice to competitors, and voted to grant a three-year tax exemption with a restriction to the effect that Froedtert Malt would not purchase barley direct from farmers, but would purchase it only from other elevators. The application was then forwarded to the State Board of Equalization, which scheduled a meeting for May 21, 1975, but returned the application to the Board of County Commissioners prior to that date for reasons which do not clearly appear. During the interim there were news stories from which it appeared that Froedtert Malt was reconsidering the building of the project because of the lessened incentive of a three-year tax exemption as compared to a five-year exemption.

On May 27, 1975, the Board of County Commissioners held another hearing, again without the publication referred to in Section 40-57.1-03 (but one notice, not complying with the statute, was published), and notice by mail to all competitors and opponents of the tax exemption who had appeared at previous meetings was given. At the meeting on May 27, the Board of County Commissioners voted to grant a five-year tax exemption to Froedtert Malt.

This exemption was approved on May 29, 1975, by the North Dakota State Board of Equalization, and on June 3, 1975, the Board of County Commissioners took final action granting a five-year ad valorem tax exemption.

I

(a) Publication of notice of only one meeting:

It is conceded that the publications of October 11 and 18 gave the notice required by statute to be given prior to the meeting of November 19, 1974. At that meeting all parties who appeared in response to the statutory notice were heard. No decision was made. Since no decision was made at that meeting, all persons interested should have realized that the decision must necessarily be made at a subsequent meeting open to the public since (1) Section 44-04-19, N.D.C.C., requires all meetings of public bodies to be open to the public; (2) Section 11-11-06, N.D.C.C., provides that all meetings of the Board of County Commissioners shall be open to the public; and Section 11-11-06 also provides:

". . . All matters pertaining to the affairs of the county shall be considered by the board in session only, but it may continue any business from a regular session to a day between regular sessions."

We hold that there was no violation of due process in the granting of a tax exemption at the meeting on February 5, 1975, which meeting was a continuation, pursuant to statute, of a meeting and hearing held on November 19, 1974, statutory notice of which was given. We therefore hold that the five-year tax exemption was approved at the meeting of February 5, 1975. So long as no decision was made, reasonable postponements of consideration of a matter as to which statutory notice has been given do not preclude action on the later date. See State v. Risty, 51 S.D. 336, 213 N.W. 952 (1927).

Thereafter, the State Board of Equalization expressed some doubt as to the sufficiency of notice to competitors. This apparently was due to the fact that some elevator operators in Richland County had not received personal notice. However, personal notice is not required by statute. The statute in effect in 1974 (Sec. 40-57.1-03, 1971 Supplement, enacted as Chap. 424, 1971 S.L.) required that the potential project operator

". . . shall publish two notices, the form of which shall be prescribed by the state board of equalization, to competitors of such application for tax exemption in the official newspaper of the municipality at least one week apart. Such publications shall be completed not less than thirty nor more than forty-five days before the governing body of the municipality is to consider such application." ¹

Since this statutory provision had been complied with, the State Board of Equalization could have acted on the application at its meeting of April 18, 1975. Instead of doing so, however, the State Board of Equalization referred the matter back to the County Commissioners, who held...