The opinion
Dissenting Opinion
Mr. Justice Humphreys.
In an opinion written for the Court in this case, the pleadings, the facts and the issues have been stated and summarized, so that it will not be necessary to do that again in this opinion. It is sufficient to say that in Metro’s suit for a declaratory judgment, against certain selected property owners who were in process of making permanent improvements to their property, Metro contended Chapter 325 of the Public Acts of Tennessee (1967) repealed by implication Chapter 312, Public Acts of Tennessee (1967); or, alternatively that Chapter 312 violates Article 2, Section 28 of the Constitution by creating a class of exempt property contrary to that article and section.
That opinion holds that Chapter 312 was not repealed by implication. It also holds that Chapter 312 does not violate Article 2, Section 28 by creating a class of exempt property. But the opinion does hold that Chapter 312 violates this article and section, in that it results in the *446 taxation of the particular kind of property dealt with by the amended Code section at less than value, contrary to the ad valorem provisions of the Tennessee Constitution.
The correctness of the holding against repeal of Chapter 312 by implication, and against the contention Chapter 312 creates a class of exempt property, cannot be questioned. However, issue is taken with the conclusion Chapter 312 violates the ad valorem tax provisions of Article 2, Section 28.
Metro selected as defendants certain taxpayers who were in process of improving their property by erecting thereon shopping centers, consisting of a number of different buildings; apartment buildings and office buildings, all in various stages of completion. In each instance the bill alleged the estimated value of the improvements in their incomplete state. But in no instance did Metro allege the value of the property on the basis of its value for purposes of sale between a willing seller and a willing buyer, without undue consideration of speculative values, as provided in Chapter 325.
It was Metro’s contention that Chapter 312 prevented the assessment of any of the property being improved until full completion of all planned improvements, or the lapse of eighteen months. With the result, that even admittedly completed and occupied buildings in the shopping center, and obviously occupiable and usable apartments and offices in the other improvements would not be subject to assessment.
This construction of the act is accepted by the opinion mentioned, and upon this construction the conclusion is reached that the act unconstitutionally results in the taxation of property at less than value.
*447 It would Rave to be conceded that Chapter 312 would be unconstitutional if it were subject only to the construction contended for by Metro and adopted by the first opinion. However, the act, both on the basis of its own language, and by reason of well settled rules of construction, is subject to a construction which saves it from unconstitutionality.
In brief, this construction is that under the express terms of the act, improvements are assessable without regard to the state of completion of the particular improvement, or the improvements as a whole, where any improvement is occiopied, or where it has been sold; which necessarily implies the right to so tax it when it is oc-cupiable, or fairly and reasonably salable as improved property. Also, since a lease is a sale of an interest in property, the provision for assessment on sale would include the right to assess on lease, or upon the property being in a leasable condition. T.C.A. sec. 67-602 as amended by Chapter 312, reads as follows:
“Reassessment of real estate to include improvements. — It shall be the duty of the assessor each year to ascertain whether or not any permanent improvements have been placed upon any real estate previously assessed, so as to increase the value thereof to the amount of two hundred dollars ($200) or more, and in such case he shall reassess such real estate, taking into consideration the value thereof resulting from permanent improvements, which assessments shall in all eases be made as of the tenth day of January of the year of which the assessment is made, provided, however, no property shall be reassessed until the improvements therein have been completed or until eighteen (18) months have passed following the commencement of the *448 construction of the improvement, whichever first shall occur; at which time the owner thereof shall notify the local county and/or city property assessor stating the date said improvements have been completed, occupied or sold. The failure by the owner to comply with the above provisions shall constitute a misdemeanor punishable as in all other cases of misdemeanor.”
The construction above arrived at is supported by the provision of the act that “the owner thereof shall notify the local county and/or city property assessor statmg the date said improvements have been completed, occupied or sold.” Since these three conditions are clearly stated in the alternative, it is evident the property is assessable upon the fulfillment of any one of them.
This construction cannot be avoided because of the preceding statement that “no property shall be reassessed until the improvements therein have been completed or eighteen (18) months have passed following the commencement of the construction of the improvement.” This for the reason the words “completed, occupied or sold,” are definitive of the state of completion of the improvement which will permit taxation, and are obviously intended to limit this term “completed”. However, under the most elementary rules of statute construction, even if these last provisions did result in ambiguity, it is our bounden duty to adopt the construction which is constitutional.
First, it is settled that we must give this statute a construction in harmony with the Constitution, although this construction may not be the most obvious or natural one. Cumberland Telephone é Telegraph Co. v. Hartley, 127 Tenn. 184 , 154 S.W. 531 ; Palmer v. Southern Express *449 Co., 129 Tenn. 116 , 165 S.W. 236 ; Bird v. State, 131 Tenn. 518 , 175 S.W. 554 .
Yet another rule is that, if the statute, even by a strained construction would be constitutional, we must give it that construction. In other words, every reasonable intendment that can be legally indulged, must be made in favor of the constitutionality of the statute. Memphis Street Railway Co. v. Byrne, 119 Tenn. 278 , 104 S.W. 460 ; Kirk v. State, 126 Tenn. 7 , 150 S.W. 83 ; Garvin v. State, 81 Tenn. 162 ; Gole Mfg. Co. v. Falls, 90 Tenn. 466 , 16 S.W. 1045 ; Henley v. State, 98 Tenn. 665 , 41 S.W. 352 , 39 L.R.A. 126 ; State ex rel. v. Nashville Baseball Club, 127 Tenn. 292 , 154 S.W. 1151 .
Cumberland Telephone, Palmer and Bird, also declare that we must construe the act in harmony with the constitution, although the construction is not the most obvious or natural one.
In view of these rules, there is no valid reason for. reading this statute as prohibiting the horizontal or vertical taxation of improvements to real property where the same are in whole or in part occupiable or salable or leasable, simply because the whole proposed plan of improvement has not been carried out by assessment day, or within eighteen months. To deny such construction and, to the contrary, to fasten on a construction which requires that the whole program of improvements be treated as a unit, would not only be a denial of these accepted and professed rules of construction, but would leave without any evident meaning the unequivocal statute provisions mentioned.
There is another reason why the act cannot be construed as preventing assessment until the completion of *450 the plan or program of construction. That is, that there is nothing in the entire assessment law, with which Chapter 312 must be construed in pari materia, which either contemplates or requires the assessor to assess in its totality, as a unit, a tract of land as reflected in the owner’s deed or deeds. Under this general assessment act, the assessor may regard as an appropriate assessment unit a functional portion of either a tract or a building, as fair and realistic assessment practice requires. This is settled by City of Nashville v. State Board of Equalisation (1961), 210 Tenn. 587 , 360 S.W.2d 458 , where a small part of a large building, otherwise exempt because used for religious purposes, was held to be taxable because used commercially.
Yet another reason for this construction is to be found in the nature of the amendment made by Chapter 312. The amendment is made by way of a proviso to an existing Code section. As a proviso, it is our duty to construe it so as not to impinge upon or limit the provisions of the preceding part of the statute more than absolutely necessary. American Can Co. v. McCanless, 183 Tenn. 491 , 193 S.W.2d 86 ; State ex rel. Cope v. Davidson County, 198 Tenn. 24 , 277 S.W.2d 396 .
Since the part of sec. 67-602 to which the proviso was added provides in express language for the assessment of improvements made to land between assessment days, and the only limitation upon this is by way of the proviso, the first provision should be allowed the fullest possible operation, and the proviso to the contrary should be allowed the least possible operation.
When such a strict construction is given to the amendment, and it is taken into account that the amendment *451 refers in one place to “improvements”, in the plural, and in another place to “improvement”, in the singular, and this is followed by a requirement that the owner thereof shall notify the assessor stating the date said improvements have been “completed, occupied or sold”, the construction here given the act is inescapable.
Construing sec. 67-602 under the rules mentioned, and taking into account its own provisions, it authorizes the assessment of all improvements made to property after assessment day, on a horizontal as well as a vertical basis, without regard to plan or program or building permit, where the particular improvement, or part of a total improvement, has progressed to such state of completion as that it is (1) completed; (2) is occupied or subject to occupancy and use in whole or in part; or has been sold or is reasonably salable as an improvement; treating the provision for sale as including a lease. The state of completion of the improvement does not operate to prevent assessment of the property, unless it is such that none of these conditions applies.
Additionally, upon a pari materia construction, bearing in mind the limited purpose of the proviso, it could not possibly have the effect of preventing an increased assessment of the real property on account of an increase in its value, brought about by changed circumstances or conditions in the locality.
"When so construed, the act simply does not violate the ad valorem tax clauses of Article 2, Section 28 in any such substantial manner as requires its interdiction.
Although the constitution requires the taxation of all property at value, equally, without regard to specie, it does not say when, where or how this shall be done. The *452 constitution expressly confers discretion with respect to this on the legislature. Providing, that value for taxation, shall “be ascertained in such a manner as the legislature shall direct, ’ ’.
In addition to this express vesting of discretion, the legislature, as the agency designated by the constitution to exercise the power of taxation inherent in the state as a sovereign, with plenary power in this regard except as limited by the express terms of the constitution, has full authority without regard to this provision to prescribe a method for assessing property. Vertrees v. State Board of Elections (1919), 141 Tenn. 645 , 214 S.W. 737 ; Jenkins v. Ewin (1872), 55 Tenn. 456 ; Knoxville & O. R. Co. v. Harris (1897), 99 Tenn. 684 , 43 S.W. 115 , 53 L.R.A. 921 ; State ex rel. Bloomstein v. Sneed (1876), 68 Term. 472, 473.
While the latter aspect of this double authorization is not noted therein, the cases annotated in Note 10, under Article 2, Section 28 of the Constitution, as carried in Tennessee Code Annotated, stand for the proposition that the. legislature is the only part of the state government with any discretion with respect to the subject of assessment of property.
It is also settled law that a just and perfect system of assessment is not indispensable to the validity of the assessment procedures as prescribed by the legislature. Louisville & N. R. Co. v. State (1874) 55 Tenn. 663 . This case recognizes, as do all others on this subject, that, assessment procedures at best result in some approximations,. and varying of lack of uniformity; and, on occasion, in some injustice. Yet, as this case holds, while a just and perfect system of assessment is to be sought *453 after, it is not indispensable to tbe validity of the assessment procedures prescribed.
McCord v. Nashville, C. & St. L. R. Co., 187 Tenn. 277 , 213 S.W.2d 196 , is illustrative of the length to 'which this Court has always gone to leave to the legislature the power to provide procedures for the assessment of property. The assessment law there involved provided for valuation of localized property by local tax assessors, and for valuation of distributable railroad property by the Railroad and Public Utilities Commission. The admitted effect of this arrangement was that localized utility property was valued at from ten per cent to fifty per cent of value, while property assessed by the Commission was valued at 100%.
The railroad contended this arrangement, resulting in this admitted discrimination, was invalid. It contended all property should be assessed by a single assessing authority, on the same basis as to value. This contention was disposed of by this Court holding that, where property is sui generis and there is no market overt for it, so that the general standard of fair market value, that is, the price such property would command at a fair, voluntary sale, would have no relevancy, the general assembly would not be precluded from prescribing a standard for that type of property different from that for other property.
It can hardly be denied, that hitherto vacant lands on which construction has been commenced is a character of property which is sui generis, and without a market in the usual sense so that the general assembly should be free to prescribe a procedure for its assessment.
*454 A realistic statement of the problem songbt to be met by Chapter 312, which demonstrates its fairness when construed in accordance with this opinion, is made in the Attorney General’s brief supporting the constitutionality of the act, as follows:
“The assessing of property in the course of improvement is a task which has always presented unique difficulty for the assessor. While there is a ready market for vacant or unimproved land, and a similar market for land upon which improvements are complete, and the price therefor which a willing buyer would pay a willing seller is usually readily ascertainable, such is not the case with real estate which is in the course of improvement. Few, if any, persons would be interested in purchasing a piece of land upon which a building was one-fourth, or one-half, or three-fourths completed. The designed specifications for a building in such state would be unlikely to appeal to a purchaser who might be interested in the location for the purpose of improving it according to his own needs and desires. Indeed it is more than conceivable that such purchaser would be willing to pay more for the land in a vacant state than with a fractionally completed structure thereon. He would have to reckon with the cost either at removing the semi-erected building or of altering the design thereof to the extent possible to conform to his own needs.
“The General Assembly has never seen fit to prescribe any formula to be used by the assessor in evaluating real estate in the course of improvement. Very obviously, for the reasons noted above, it cannot be said that the tax assessor could determine market value by simply adding together the market value *455 of the vacant land and the material and labor costs incurred by the owner in bringing the structure to such state of semi-eonpletion as might exist on tax day. An assessment level less than such figure would have to rest in the unbridled judgment of the tax assessor. This result was very obviously what the 1967 General Assembly wanted to forestall.”
Commencing in 1907, when the sum of $200.00 was not insignificant, the assessment law expressly provided for ignoring permanent improvements to land between assessment days which did not increase the value of the property by $200.00. Even more significantly, prior to the act of 1907 there was no provision for revaluation on account of improvements from one biennial tax day until the next, resulting in a two-year period of non-assessment of improvements after a tax day. Acts of 1903, Ch. 258, sec. 3.
Yet, even though Article 2, Section 28 commences with the statement that all property shall be taxed, recognizing that the Article does not provide when or how property shall be taxed, whether annually, biennially, or otherwise, and in recognition of the express grant to the legislature of all power to determine all of this, that arrangement was accepted as constitutional. This fact of legislative history calls into play another settled rule of construction : that a construction of the constitution long adhered to (in this case that reassessment of improvements between assessment days was not required by the constitution) will not be disturbed unless so clearly and plainly wrong as to require it.
In LaFever v. Ware, 211 Tenn. 393 , 365 S.W.2d 44 , this rule was recognized and restated: that a construction of *456 the constitution adopted by the legislative department and long accepted and acquiesced in by tbe people is entitled to great weight, and in tbe absence of some palpable error, is to be accepted as a correct interpretation. Tbis proposition was again reconsidered, and restated, in Williams v. Carr, 218 Tenn. 564 , 404 S.W.2d 522 .
Repeating: If it was constitutionally permissible under tbe ad valorem provision of Article 2, Section 28, to forego altogether tbe assessment of completed improvements to property between biennial assessment days, then sec. 67-602, as amended by Chapter 312, which does not go tbis far, but simply recognizes that tbe bare cost of building materials in an incomplete improvement cannot fairly be said to increase the fair market value of tbe real estate by that cost, is certainly a permissible exercise of tbe legislative discretion to deal with special situations in a reasonable way.
It is permissible to observe in concluding tbis opinion, that this Court, as is true of every state court of last resort, functions in a governmental society of growing complexity. A state society whose legal problems are complicated, as never in tbe past, by tbe threat of federal judicial intervention in its affairs by the application of such equal protection and due process notions as fertile federal omnipotence can hardly wait to announce. In tbis plight, bard and fast attitudes and positions with respect to assessment powers should not be adopted where not absolutely required by express or necessarily implied state constitutional provisions. Tbe legislature should be allowed tbe broadest possible latitude in providing for tbe assessment of property. First, because tbis is what tbe Constitution authorizes in clear *457 terms; and second, because the fair use of tbis power may be, as never in tbe past, indispensable to a workable, equitable- system of taxation in tbis state.
As herein construed, T.C.A. sec. 67-602 is constitutional.
BuRnett, Chief Justice, concurs.