STATE EX REL. SHELL WESTERN v. Chavez
Decision Date | 21 November 2001 |
Docket Number | No. 21,225.,21,225. |
Citation | 38 P.3d 886,131 N.M. 445,2002 NMCA 5 |
Court | Court of Appeals of New Mexico |
Parties | STATE of New Mexico ex rel. SHELL WESTERN E & P, INC., Petitioners-Appellants, v. John J. CHAVEZ, Secretary of the Department of Taxation and Revenue, Respondent-Appellee. |
Harold L. Hensley, Jr., Richard E. Olson, Andrew J. Cloutier, Joel M. Carson, III, Hinkle, Hensley, Shanor & Martin, L.L.P., Roswell, NM, for Appellants.
Patricia A. Madrid, Attorney General, Gail MacQuesten, Special Assistant Attorney General, Santa Fe, NM, for Appellee.
Certiorari Denied, No. 27,262, January 9, 2002.
{1} Shell Western E & P, Inc. (Shell) appeals from the order of the district court quashing an alternative writ of mandamus. The question before us is whether the Secretary of the Department of Taxation and Revenue properly excluded Shell from participation in a tax amnesty program enacted by the legislature. We hold that Shell should have been allowed to participate in the program and therefore reverse.
{2} Shell explores for and produces crude oil, natural gas, and natural gas condensate in New Mexico. Late in 1998 the Department of Taxation and Revenue (the Department) determined that Shell had underpaid severance taxes by undervaluing its crude oil and natural gas condensate, and assessed it tax of $989,778.40 and interest then accrued of $660,052.56. Believing that Shell had deliberately undervalued these products, the Department also assessed a civil fraud penalty of $498,406.79, pursuant to NMSA 1978, § 7-1-69(C) (2001). Shell filed a formal protest with the Department.
{3} During the pendency of the protest, the legislature passed the Amnesty Act (the Act), providing for a temporary amnesty for certain taxpayers. 1999 N.M. Laws, ch. 10. We set forth the full text of the Act since it does not appear in the New Mexico Statutes Annotated:
{4} After the Governor signed the legislation, the Secretary announced that a tax amnesty program would be in effect from August 16, 1999, through November 12, 1999. The Secretary then issued guidelines for the program which included certain eligibility requirements eliminating participation by taxpayers who had been assessed a civil fraud penalty or who had "formally filed a protest" but did not withdraw "the protest during the tax amnesty period."
{5} Shell disagreed with the Secretary's interpretation of the Act allowing him to limit eligibility. Accordingly, on November 11, 1999, Shell delivered a check to the Department in the amount of $989,778.40, the full principal assessment against it. Shell admitted no fraud or wrongdoing, but offered to dismiss its protest if the Department accepted its payment and accorded its participation in the amnesty program. On December 1, 1999, the Department returned Shell's check and stated that Shell did not qualify for amnesty.
{6} Shell sought an alternative writ of mandamus in the district court compelling the Secretary to accept its tender under the amnesty program. The district court granted the writ, ordering the Secretary to grant amnesty or to show cause why he should not do so. After considering the Secretary's answer to the writ and briefs filed by both parties, and after a hearing, the court quashed the alternative writ and dismissed the proceedings. Shell appeals.
{7} The interpretation of a statute is a question of law which an appellate court reviews de novo. State v. Cleve, 1999-NMSC-017, ¶ 7, 127 N.M. 240, 980 P.2d 23. Our primary concern is to implement the intent of the legislature. Unisys Corp. v. N.M. Taxation & Revenue Dep't, 117 N.M. 609, 611, 874 P.2d 1273, 1275 (Ct.App.1994). "In determining this intent, we look primarily to the language of the act and the meaning of the words, and when they are free from ambiguity, we will not resort to any other means of interpretation." Sec. Escrow Corp. v. State Taxation & Revenue Dep't, 107 N.M. 540, 543, 760 P.2d 1306, 1309 (Ct.App.1988).
{8} We must first determine whether the legislature gave the Secretary discretion to determine which classes of tax-payers were eligible for the program. "Mandamus is a drastic remedy to be invoked only in extraordinary circumstances." Brantley Farms v. Carlsbad Irrigation Dist., 1998-NMCA-023, ¶ 12, 124 N.M. 698, 954 P.2d 763. It "lies only to force a clear legal right against one having a clear legal duty to perform an act and where there is no other plain, speedy and adequate remedy in the ordinary course of law." Id. ¶ 16. The issue before us is whether the Secretary had a statutory duty to include Shell in the amnesty program. "Mandamus is appropriate to compel the performance of a statutory duty only when that duty is clear and indisputable." Id. If the legislature gave the Secretary the discretion to further define taxpayer eligibility or the power to choose between alternatives, mandamus will not lie. See Perea v. Baca, 94 N.M. 624, 626-27, 614 P.2d 541, 543-44 (1980)
( ) El Dorado at Santa Fe, Inc. v. Bd. of County Comm'rs, 89 N.M. 313, 317, 551 P.2d 1360, 1364 (1976) ( ). To make this determination, we must construe the meaning of the statute.
{9} According to Section 1(B) of the Act, once the tax amnesty program is established, the Secretary is given discretion to decide how long the amnesty program would be in effect. He is "authorized to declare an amnesty period of no more than ninety days, provided that any amnesty period occur within fiscal year 2000." 1999 N.M. Law ch. 10-1(B). Clearly this language gave the Secretary the power to choose how long the program lasted, so long as it did not exceed ninety days. See Unisys Corp., 117 N.M. at 612, 874 P.2d at 1276 ( ).
{10} Similarly, the Act gives the Secretary authority to waive, during the amnesty period only, the interest and penalty provisions under NMSA 1978, §§ 7-1-67 and 69 (2001). Section 7-1-67 sets the rate of interest to be charged on taxes imposed and not paid. Section 7-1-69 relates to the imposition of civil penalties for failure to pay taxes or file a return. Section 7-1-69(C) assesses a civil fraud penalty and states as follows:
C. In the case of failure, with willful intent to evade or defeat a tax, to pay when due the amount of tax required to be paid, there shall be added to the amount fifty percent of the tax or a minimum of twenty-five dollars ($25.00), whichever is greater, as penalty.
The Secretary's eligibility guidelines prohibited persons or businesses that had been assessed a civil fraud penalty as per Section 7-1-69(C) from participating in the program. The Secretary is not, however, given...
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