332
OCTOBER TERM, 1993
Syllabus
certiorari to the united states court of appeals for the ninth circuit
No. 92-74. Argued November 8, 1993—Decided January 24, 1994
The Railroad Revitalization and Regulatory Reform Act of 1976, in relevant part, forbids States to impose (1) higher property tax rates and assessment ratios upon "rail transportation property" than upon "other commercial and industrial property," 49 U. S. C. §§ 11503(b)(1)-(3), and (2) "another tax that discriminates against a rail carrier providing transportation," § 11503(b)(4). Oregon exempts from its ad valorem property tax various classes of business personal property, but not railroad cars owned by respondent companies. They filed suit in the District Court, alleging that the tax violates § 11503(b)(4) because it exempts certain classes of commercial property from taxation while taxing railroad cars in full. Both the District Court and the Court of Appeals agreed that discriminatory property tax exemptions may be challenged under subsection (b)(4). However, the Court of Appeals reversed the lower court's finding that Oregon's tax complied with the provision, holding instead that respondents were entitled to the same exemption enjoyed by preferred property owners.
Held: Section 11503 does not limit the States' discretion to exempt non-railroad property, but not railroad property, from generally applicable ad valorem property taxes. Pp. 338-348. (a) Respondents' position that "another tax that discriminates against a rail carrier" is a residual category designed to reach any discriminatory state tax, including property taxes, not covered by subsections (b)(1)-(3) is plausible only if subsection (b)(4) is read in isolation. However, the structure of § 11503 as a whole supports the view that subsection (b)(4) does not speak to property tax exemptions. "[C]ommercial and industrial property," which serves as the comparison class for measuring property tax discrimination under subsections (b)(1)-(3), is defined in subsection (a)(4) as "property, other than transportation property and land used primarily for agricultural purposes or timber growing, devoted to commercial or industrial use and subject to a property tax levy." The interplay between subsections (b)(1)-(3) and this definition is central to subsection (b)(4)'s interpretation. For example, Congress' exclusion of agricultural land from the definition demonstrates its intent to permit the States to tax railroad property at a higher rate than agricultural land, notwithstanding subsection (b)(3)'s
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