“The rule is well settled that a general statute must yield when there is a more specific statute involving the particular matter."
How later courts described this case
- “The rule is well settled that a general statute must yield when there is a more specific statute involving the particular matter."
- “The rule is well settled that a general statute must yield when there is a specific statute involving the particular matter.”
- a general statute must yield when there is a specific statute involving the particular matter
Written by the judges who cited it.
The opinion
Ray Thornton, Justice, dissenting. The majority upholds the decision of the Arkansas Public Service Commission finding that a payment of $20.8 million dollars by customers of Ozark to get out of a contract for fifty percent of Ozark’s pipeline capacity should be considered as part of Ozark’s property actually used or employed in its public utility business. This penalty to escape from a contract to use or pay for fifty percent of Ozark’s pipeline capacity in future years is referred to as an “exit fee.” I cannot agree that such an exit fee to avoid future purchases is property that is currently employed in Ozark’s public utility business, and I respectfully dissent.
There are two reasons why these exit fees should not be assessed as property used for public utility business. First, it should be noted that Ark. Code Ann. § 26-3-302 , adopted in 1977, exempts all intangible property from ad valorem taxation. The statute reads as follows:
(a) All intangible personal property in this state shall be exempt from all ad valorem tax levies of counties, cities, and school districts in the state.
(b) The exemption provided in this section shall be applicable with respect to the assessment and taxation of intangible personal property on and after January 1, 1976, and no ad valorem taxes shall be assessed or collected on such property for any period after January 1, 1976.
Id.
In my view, this provision should determine the outcome of this case. Arkansas Code Annotated § 26-3-302 is both later and is more specific than other statutes suggesting that all property, both real and personal, tangible and intangible, are properly considered in assessing the value of property used or employed in Ozark’s public utility business. The majority interprets these statutes as allowing intangible property to be taxable when it belongs to a public utility. I cannot agree.
More significantly, even accepting the majority’s interpretation that the specific exemption of Ark. Code Ann. § 26-3-302 does not apply to property that is owned by a utility, the Commission’s conclusion that exit fees are used or employed in Ozark’s public utility business is untenable. The statutory framework upon which the majority relies to allow intangible property to be assessed has not been followed in this case. Arkansas Code Annotated § 26-26-1611 clearly and specifically prohibits the assessment of any property, real or personal, tangible or intangible, that is not used or employed in Ozark’s public utility business. That statute states:
The Tax Division of the Arkansas Public Service Commission shall assign or apportion the assessed value of the property of all persons, firms, companies, copartnerships, associations, and corporations which it is required to assess in the following manner:
(1) There shall be deducted from the true market or actual value of the entire property, tangible and intangible, ascertained as provided in this subchapter, the true market or actual value as ascertained from the information furnished by report or otherwise of all real and personal property of the company not used, in its business as a public utility, and the remainder shall be treated as the true market or actual value of all its property, tangible or intangible, actually used or employed in its public utility business;
Ark. Code Ann. § 26-26-1611 (emphasis added). There is no showing that the revenues received as exit fees are used or employed in the business of providing utility services. The true market value of Ozark’s property, real and personal, tangible and intangible, used or employed in its public utility business was established by an arm’s length purchase and sale of property. The administrative law judge described the transaction in its order, and found that:
By late 1993 the owner-partners wished to sell the pipeline and in 1994 solicited bids therefor from prospective purchasers. Four bids were received, ranging in price from $23.5 million to $26 million. When the latter bid was hampered by lack of financing, the bid of NGC Energy Resources, a limited partnership, was accepted at $24 million.
Each of the four owner-partners had the right to match the winning bid, but none chose to exercise this option.
On February 10, 1995, NGC and the owner-partners signed an instrument entitled, stock and interest purchase and sale agreement, which, among other things, identified the tangible pipeline assets as having a value of $24 million.
Ultimately, the parties apportioned the value of the assets involved in this transaction as follows:
Transmission Facilities $14,400,000
Truck Lines, Other $9,600,000
Fixed Assets
Exit Fees $20,841,750.
This allocation was the result of parties’ commitment in the agreement to negotiate in good faith on asset allocation, pursuant to section 338(h)(1) of the Internal Revenue Code and to make appropriate filings with the Internal Revenue Service.
The exit fees were not contemplated in the bids as submitted by the prospective buyers and arose as an issue after the parties had reached agreement on NGC’s bid of $24 million.
It seems clear that the exit fees were not part of the real and personal, tangible or intangible, property used or employed by Ozark in its public utility business, and I would reverse the Commission’s decision which is grounded upon the untenable conclusion to include exit fees.
I respectfully dissent.