Submitted: February 23, 2005
Filed: April 28, 2005
| Darrell V. McGraw, Jr. Attorney General Stephen Stockton Senior Assistant Attorney General Charleston, West Virginia Attorneys for the Appellant |
David K. Higgins Paul G. Papadopoulos Robinson & McElwee, PLLC Charleston, West Virginia Monica Taylor Monday |
The Opinion of the Court was delivered PER CURIAM.
JUSTICE BENJAMIN, deeming himself disqualified, did not participate in the
decision of this case.
JUDGE WILSON, sitting by temporary assignment.
1. “Interpreting
a statute or an administrative rule or regulation presents a purely legal question
subject to de novo review.” Syllabus point 1, Appalachian Power
Co. v. State Tax Department of West Virginia, 195 W. Va. 573, 466 S.E.2d
424 (1995).
2. “The
primary object in construing a statute is to ascertain and give effect to the
intent of the Legislature.” Syllabus point 1, Smith v. State Workmen's
Compensation Commissioner, 159 W. Va. 108, 219 S.E.2d 361 (1975).
3. “A
statutory provision which is clear and unambiguous and plainly expresses the
legislative intent will not be interpreted by the courts but will be given full
force and effect.” Syllabus point 2, State v. Epperly, 135 W. Va.
877, 65 S.E.2d 488 (1951).
4. “It
is well established that the word 'shall,' in the absence of language in the
statute showing a contrary intent on the part of the Legislature, should be afforded
a mandatory connotation.” Syllabus point 1, Nelson v. West Virginia Public
Employees Insurance Board, 171 W. Va. 445, 300 S.E.2d 86 (1982).
Per Curiam:
The appellant herein and respondent below,
Virgil T. Helton, (See footnote
1) Acting State Tax Commissioner of the State of West Virginia (hereinafter
referred to as the “Tax Commissioner”), appeals from an order entered
by the Circuit Court of Kanawha County on January 21, 2004. By that order, the
circuit court determined that the Tax Commissioner was not permitted to appeal
from the administrative decision finding that the appellees herein and petitioners
below, Concept Mining, Inc., and The Ridge Land Company, Inc. (hereinafter collectively
referred to as “Concept Mining” or “the Taxpayers”), were
entitled to a refund of severance taxes they previously had paid to the Tax Commissioner.
On appeal to this Court, the Tax Commissioner asserts that the circuit court
erred by so ruling. Upon a review of the parties' arguments, the record designated
for appellate review, and the pertinent authorities, we affirm the circuit court's
decision.
The facts underlying the instant appeal are
not in dispute. On June 5, 2002, Concept Mining and The Ridge Land Company separately
filed petitions in the Tax Commissioner's Office of Hearings and Appeals seeking
refunds of severance taxes they had paid in tax years 1998 and 1999. Thereafter,
the parties' separate petitions were consolidated for consideration and decision
by the Office of Hearings and Appeals. A hearing was then held on October 30,
2002, with final briefs of the parties due on January 31, 2003, and the case
being submitted for final decision on that date.
In the meantime, legislative changes resulted
in the creation of a successor tribunal to the Tax Commissioner's Office of Hearings
and Appeals: the Office of Tax Appeals. To effectuate a transition from the Office
of Hearings and Appeals to the Office of Tax Appeals, the Legislature enacted
W. Va. Code § 11-10-9 (2002) (Repl. Vol. 2003), which provides,
in pertinent part, that
(b)
All petitions which are on the tax commissioner's docket on the thirty-first
day of December, two thousand two, for which no administrative hearing has been
held, shall be transferred by the tax commissioner to the office of tax appeals
no later than the thirty-first day of January, two thousand three; and thereafter,
the petition shall, for all purposes except timeliness of filing, be treated
as if it had been filed with the office of tax appeals.
(c)
All petitions which are on the tax commissioner's docket on the thirty-first
day of December, two thousand two,
for which an administrative hearing has been held prior to that date, shall
remain on the tax commissioner's docket and the tax commissioner shall issue
an administrative decision no later than the thirty-first day of March, two
thousand three.
For purposes of the instant proceeding, the
primary result of this change in tax decision tribunals concerns the ability
of the Tax Commissioner to appeal the administrative decision to the circuit
court. Under the former system, the Tax Commissioner could not appeal decisions
rendered by the Tax Commissioner's Office of Hearings and Appeals because the
decisions were rendered by the Commissioner him/herself. See W. Va.
Code § 11-10-10(a)(1) (2002) (Repl. Vol. 2003) (“A taxpayer may
appeal the administrative decision of the tax commissioner issued under section
nine or fourteen [§ 11-10-9 or § 11-10-14] of this article,
by taking an appeal to the circuit courts of this state within sixty days after
being served with notice of the administrative decision.”). By contrast,
under the current system, the Tax Commissioner is permitted to appeal decisions
issued by the newly-formulated Office of Tax Appeals. See W. Va.
Code § 11-10A-19(a) (2002) (Repl. Vol. 2003) (“Either the taxpayer
or the commissioner, or both, may appeal the final decision or order of the office
of tax appeals[.]”). Cf. W. Va. Code § 11-10-10(a)(2)
(“A taxpayer may appeal the administrative decision of the office of tax
appeals in accordance with the provisions of section nineteen [§ 11-10A-19],
article ten-a of this chapter.”).
Following the implementation of these statutory
amendments, a final decision was rendered in the case sub judice on July
9, 2003, by the same administrative law judge who had conducted the aforementioned
administrative hearing in this case on October 30, 2002, and who, at that time,
was a hearing examiner for the Tax Commissioner's Office of Hearings and Appeals.
At the time of the final decision on July 9, 2003, however, this presiding hearing
examiner was an administrative law judge for the Office of Tax Appeals and, consequently,
issued his decision on that tribunal's letterhead. In any event, the final decision
ruled in favor of the Taxpayers and found them to be entitled to a refund of
severance taxes they had paid because the imposition of such taxes on their mining
activities violated their constitutional rights under the Import-Export Clause. (See
footnote 2)
Because the final decision was presumably
rendered by the Office of Tax Appeals, the Tax Commissioner appealed the unfavorable
ruling to the Circuit Court of
Kanawha County. By order entered January 21, 2004, the circuit court found
and concluded that
(A)
The Tax Commissioner appointed R. Michael Reed, Administrative Law Judge of the
Office of Hearings and Appeals, to hear and decide this matter at the administrative
level.
(B)
The administrative hearing was held in this matter on October 30, 2002, with
Judge Reed serving as the Hearing Examiner.
(C)
With this matter having been placed on the docket of the Tax Commissioner's Office
of Hearings and Appeals prior to December 31, 2002 and the administrative hearing
having been held prior to December 31, 2002, W. Va. Code § 11-10-9(c)
required that this matter not be transferred to the Office of Tax Appeals but
be resolved at the administrative level by the issuance of an administrative
decision pursuant to W. Va. Code § 11-10-9(a) by the Tax
Commissioner or an Administrative Law Judge designated by [him].
(D)
The Final Decision issued by Judge Reed on July 9, 2003, despite purporting to
be issued under the Office of Tax Appeals, is as a matter of law an administrative
decision issued pursuant to W. Va. Code § 11-10-9(a). To
hold otherwise would be to elevate form over substance which this Court is not
inclined to do.
(E)
Administrative decisions issued pursuant to W. Va. Code § 11-10-9(a)
by the Tax Commissioner or an Administrative Law Judge designated by [him] may
not be appealed by the Tax Commissioner to the Circuit Courts of this State. W. Va.
Code § 11-10-10. Only taxpayers are entitled to appeal such administrative
decisions.
(F)
The Final Decision issued by Judge Reed on July 9, 2003, can not properly be
appealed by the Tax Commissioner to this Court and, as such, is final, conclusive
and not subject to either administrative or judicial review. From this adverse
ruling of the circuit court, the Tax Commissioner appeals to this Court.
The sole issue presented for our consideration
by this appeal concerns whether an administrative decision was rendered by the
Tax Commissioner's Office of Hearings and Appeals or by the successor thereto,
the Office of Tax Appeals. To resolve this issue, we must review and consider
the governing statutory law. We previously have held that a lower court's interpretation
of a statute is, as a question of law, subject to de novo review. “Interpreting
a statute or an administrative rule or regulation presents a purely legal question
subject to de novo review.” Syl. pt. 1, Appalachian Power Co.
v. State Tax Dep't of West Virginia, 195 W. Va. 573, 466 S.E.2d 424
(1995). Accord Syl. pt. 1, Chrystal R.M. v. Charlie A.L., 194 W. Va.
138, 459 S.E.2d 415 (1995) (“Where the issue on an appeal from the circuit
court is clearly a question of law or involving an interpretation of a statute,
we apply a de novo standard of review.”). Mindful of this standard,
we proceed to consider the parties' arguments.
On appeal to this Court, the Tax Commissioner
complains that the circuit court erroneously determined that the administrative
decision rendered below in favor of Concept Mining was issued by the Tax Commissioner's
Office of Hearings and Appeals despite the fact that the decision was issued
by an Office of Tax Appeals administrative law judge on that tribunal's letterhead. (See
footnote 3) As a result, the Commissioner argues that he should be
permitted to appeal, on the merits, from the final decision rendered by the Office
of Tax Appeals in accordance with W. Va. Code § 11-10A-19(a) (2002)
(Repl. Vol. 2003), which permits “[e]ither the taxpayer or the commissioner,
or both, may appeal the final decision or order of the office of tax appeals[.]”
By contrast, Concept Mining asserts that
the circuit court committed no reversible error in holding that the administrative
decision was issued by the Commissioner in accordance with the mandates of the
transition statute, W. Va. Code § 11-10-9(c). In this regard,
Concept Mining argues that the Tax Commissioner may not appeal the July 9, 2003,
administrative decision because it was not officially rendered by the Office
of Tax Appeals. Despite the appearance of the July 9, 2003, ruling on the
official letterhead of the Office of Tax Appeals, Concept Mining contends that
that decision was required to be rendered by the Tax Commissioner in accordance
with the plain language of W. Va. Code § 11-10-9(c). As such,
only a taxpayer may appeal a final decision rendered by the Tax Commissioner. Citing W. Va.
Code § 11-10-10(a)(1).
At issue in this proceeding is the construction
and application of W. Va. Code § 11-10-9 (2002) (Repl. Vol. 2003)
to the Taxpayers' petitions for refunds of taxes paid that were pending at the
time the Legislature dissolved the Office of Hearings and Appeals and created
the Office of Tax Appeals. In relevant part, W. Va. Code § 11-10-9
directs that
(b)
All petitions which are on the tax commissioner's docket on the thirty-first
day of December, two thousand two, for which no administrative hearing has been
held, shall be transferred by the tax commissioner to the office of tax appeals
no later than the thirty-first day of January, two thousand three; and thereafter,
the petition shall, for all purposes except timeliness of filing, be treated
as if it had been filed with the office of tax appeals.
(c)
All petitions which are on the tax commissioner's docket on the thirty-first
day of December, two thousand two, for which an administrative hearing has been
held prior to that date, shall remain on the tax commissioner's docket and the
tax commissioner shall issue an administrative decision no later than the thirty-first
day of March, two thousand three.
Before we may consider whether the circuit court correctly interpreted this language, however, we must first ascertain the meaning of this statute.
On prior occasions when we have determined
matters involving statutory language, we have initially looked to the legislative
intent underlying the enactment: “The primary object in construing a statute
is to ascertain and give effect to the intent of the Legislature.” Syl.
pt. 1, Smith v. State Workmen's Comp. Comm'r, 159 W. Va. 108, 219
S.E.2d 361 (1975). “Once the legislative intent underlying a particular
statute has been ascertained, we proceed to consider the precise language thereof.” State
ex rel. McGraw v. Combs Servs., 206 W. Va. 512, 518, 526 S.E.2d 34,
40 (1999). When the statutory language under consideration is plain, we apply,
rather than construe, the enactment. “A statutory provision which is clear
and unambiguous and plainly expresses the legislative intent will not be interpreted
by the courts but will be given full force and effect.” Syl. pt. 2, State
v. Epperly, 135 W. Va. 877, 65 S.E.2d 488 (1951). Accord DeVane
v. Kennedy, 205 W. Va. 519, 529, 519 S.E.2d 622, 632 (1999) (“Where
the language of a statutory provision is plain, its terms should be applied as
written and not construed.” (citations omitted)).
Applying these tenets to the case sub
judice, we first find that, in enacting W. Va. Code § 11-10-9,
the Legislature intended to effectuate an orderly transition from the former
Office of Hearings and Appeals to the newly-created Office of Tax Appeals. To
accomplish this end, the Legislature clearly delineated by whom cases pending
at the time of this transition are to be decided. Pursuant to the plain language
of W. Va. Code § 11-10-9(b), all cases in which no administrative
hearing has been held by December 31, 2002, “shall be transferred by the tax commissioner to the office
of tax appeals.” (Emphasis added). By contrast, all cases in which an
administrative hearing has been held by December 31, 2002, “shall remain
on the tax commissioner's docket and the tax commissioner shall issue
an administrative decision no later than” March 31, 2003. W. Va.
Code § 11-10-9(c) (emphasis added).
We previously have found that the word “shall” is
to be afforded a mandatory connotation. “It is well established that the
word 'shall,' in the absence of language in the statute showing a contrary intent
on the part of the Legislature, should be afforded a mandatory connotation.” Syl.
pt. 1, Nelson v. West Virginia Pub. Employees Ins. Bd., 171 W. Va.
445, 300 S.E.2d 86 (1982). Accord State v. Allen, 208 W. Va.
144, 153, 539 S.E.2d 87, 96 (1999) (“Generally, 'shall' commands a mandatory
connotation and denotes that the described behavior is directory, rather than
discretionary.” (citations omitted)). Thus, the requirements of the aforementioned
statutes are obligatory and not optional. In short, if a hearing has been held
by December 31, 2002, the Commissioner is required to rule on the matter, W. Va.
Code § 11-10-9(c), and if no hearing has been held by December 31,
2002, the Commissioner is required to transfer the case for disposition by the
Office of Tax Appeals, W. Va. Code § 11-10-9(b).
Under the facts presently before us, an administrative
hearing was held in this matter on October 30, 2002. The Commissioner argues,
however, that the October
30, 2002, hearing held herein does not satisfy the “administrative hearing” requirement
referenced in W. Va. Code §§ 11-10-9(b-c) because, according
to the Commissioner, this language contemplates that the administrative hearing
includes the culmination of the parties' briefing schedule, which date would,
essentially, be the determinative date as to whether a hearing had been held
by December 31, 2002. We reject the Commissioner's argument because we simply
can find no support for this contention. Rather, the pertinent statutory language
plainly references “an administrative hearing” without qualification.
W. Va. Code §§ 11-10-9(b-c) (emphasis added). “Typically,
. . . 'an' is construed as making general, rather than specific,
references to its words of modification.” Maupin v. Sidiropolis,
215 W. Va. 492, 497, 600 S.E.2d 204, 209 (2004) (per curiam) (citations
omitted). In other words, “[t]he indefinite article ['an'] may some times
mean one, where only one is intended, or it may mean one of a number, depending
upon the context.” Deutsch v. Mortgage Secs. Co., 96 W. Va.
676, 681, 123 S.E. 793, 795 (1924) (citation omitted). Absent a contrary indication
of legislative intent, it may be presumed that so long as any hearing
of an administrative nature was held in a particular case by December 31, 2002,
such case would then be governed by the procedures set forth in W. Va.
Code § 11-10-9(c). Thus, given that such a hearing was held on October
30, 2002, well before the December 31, 2002, transitional date, it is clear
that “an administrative hearing has been held” in the underlying
case so as to render W. Va. Code § 11-10-9(c) dispositive of
this matter. (Emphasis added).
Pursuant to the plain language of W. Va.
Code § 11-10-9(c), “the tax commissioner shall issue an administrative
decision no later than the thirty-first day of March, two thousand three.” Thus,
in the proceedings underlying the instant appeal, the Commissioner was required
both to render a decision on the Taxpayers' refund requests and to render his
ruling by March 31, 2003. Technically, neither of these requirements was satisfied
insofar as the decision was ostensibly issued by the Office of Tax Appeals on
July 9, 2003. Nevertheless, we agree with the circuit court that the administrative
order at issue herein should be deemed to be one rendered by the Commissioner
because the Commissioner failed to comply with the plain statutory directives
he was charged to execute and should not now be rewarded for his dilatoriness
with the opportunity to appeal the adverse ruling on the merits. Although the
Commissioner complains that the upholding of the July 9, 2003, decision, which
found the severance taxes assessed to the Taxpayers to be unconstitutional under
the Import-Export Clause, U.S. Const. art. I, § 10, cl. 2, sets bad
precedent because it is contrary to his decision of other, similar cases, we
are not persuaded by his arguments. Simply stated, if the Commissioner wanted
to ensure that all cases involving that issue would be decided consistently,
then, to the extent that he was required to rule upon such cases pursuant to
W. Va. Code § 11-10-9(c), his failure to do so should not now
inure to his benefit to give him an opportunity to attempt to correct what he
perceives to be an incorrect decision by the Office of Tax Appeals.
Therefore, insofar as an administrative decision
was rendered on July 9,
2003, it will be presumed to be one issued by the Commissioner in accordance
with the clear mandates of W. Va. Code § 11-10-9(c). Accordingly,
the circuit court's decision so finding is affirmed.
For the foregoing reasons, the January 21,
2004, order of the Circuit Court of Kanawha County is hereby affirmed.