UNITED ILLUMINATING CO. v. GROPPO

14321

220 Conn. 749 (1992) | Cited 66 times | Supreme Court of Connecticut | January 7, 1992

The dispositive issue in this tax appeal iswhether the trial court properly held that certainmachinery and equipment at three electricity generatingplants owned and operated by the plaintiff, UnitedIlluminating Company (taxpayer), constitute "machineryand production equipment" at an "industrial plant"within the meaning of 12-426-26 (d) of the Regulationsof Connecticut State Agencies, and therebyqualify for an exemption from the sales tax imposedon services to "industrial, commercial or income-producing

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     real property" pursuant to General Statutes12-407 (2)(i)(I).1 After a determination by the defendant,the commissioner of revenue services (commissioner),that the taxpayer was liable for a deficiencyassessment for the period from January 1, 1983,through December 31, 1985, the taxpayer appealed tothe Superior Court pursuant to General Statutes12-422.2 The court concluded that the taxpayer hadestablished that the subject property was exempt fromGeneral Statutes 12-407 (2)(i)(I) pursuant to12-426-26 (d) of the Regulations of Connecticut StateAgencies.3 The commissioner appealed and the taxpayercross appealed. We transferred the appeal fromthe Appellate Court in accordance with Practice Book4023. We reverse.

The trial court found the following facts, which areundisputed. The taxpayer is a public utility companythat generates electricity for distribution to consumersin south central Connecticut. The taxpayer has threeplants in Bridgeport and New Haven, each of which

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     consists of an integrated system of water pipes, steamducts, boilers, pumps, heaters, baffles, condensers, turbines,generators, transformers, smokestacks andassorted parts and connections. This integrated systemheats water to steam and brings the steam to superhigh temperatures. The resulting heat energy turns theturbines, which use mechanical energy to turn thegenerators, which generate electricity. The transformerschange the electricity from high current to highvoltage, which is then fed by transmission lines to consumers.The component parts of the system requireperiodic maintenance, which is performed by thirdparty contractors. The commissioner assessed a salestax upon the cost of these services pursuant to GeneralStatutes 12-407 (2)(i)(I).

In reviewing a decision of the trial court sustaininga taxpayer's appeal from a deficiency assessment, thiscourt must determine whether the trial court's factualfindings are clearly erroneous, or whether the decisionis otherwise legally erroneous. See Practice Book4061; Zachs v. Groppo, 207 Conn. 683, 689,542 A.2d 1145 (1988). When a party has challenged the legal conclusionsof the trial court, as the commissioner has here,we must determine whether these conclusions arelegally and logically correct and find support in the factsset out in the court's memorandum of decision. Zachsv. Groppo, supra; see also Pandolphe's Auto Parts, Inc.v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24(1980).

We note at the outset the principles of statutory constructionthat govern the applicability of a tax exemption."First, statutes that provide exemptions fromtaxation are a matter of legislative grace that must bestrictly construed against the taxpayer. Second, anyambiguity in the statutory formulation of an exemptionmust be resolved against the taxpayer. Third, thetaxpayer must bear the burden of proving the error in

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     an adverse assessment concerning an exemption."Plastic Tooling Aids Laboratory, Inc. v. Commissionerof Revenue Services, 213 Conn. 365, 369, 567 A.2d 1218(1990). Applying these principles to the present case,we conclude that the trial court incorrectly held thatthe taxpayer had sustained its burden of proving eligibilityfor the exemption from 12-407 (2)(i)(I) for servicesto "machinery and production equipment" at an"industrial plant" pursuant to 12-426-26 (d) of theregulations.

The purchase by a taxpayer of services for themaintenance of industrial, commercial or income-producingreal property is subject to the sales tax under12-407 (2)(i)(I) unless the transaction qualifies foran exemption pursuant to another section of the Salesand Use Tax Act or regulations promulgated thereunder.The commissioner contends that the variouscomponents of the taxpayer's electric generating plantsthat are the subject of this appeal are commercial realproperty and are thus subject to the tax. The taxpayerargues first that these components are personal property,but that, even if they are deemed to be fixtures,the services rendered to them qualify for an exemptionunder 12-426-26 (d) of the regulations, as servicesto "machinery and production equipment" at an "industrialplant." We agree with the commissioner that thetaxpayer does not qualify for the exemption.4

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The taxpayer claims an exemption pursuant to12-426-26 (d) of the regulations, which provides inpertinent part: "`Industrial property' shall mean andinclude an `industrial plant' as defined in Section12-426-11b of the Regulations of Connecticut StateAgencies and all real estate with structures thereon,if any, used in support of the industrial plant. . . . Servicesrendered to machinery and production equipmentare not taxable even though such machinery or equipmentis considered to be a fixture under Connecticut realproperty law." (Emphasis added.) Section 12-426-11b (7)of the regulations defines an "industrial plant" as a"manufacturing facility at which a manufacturingproduction process is occurring." The regulationsdefine both "manufacturing"5 and "manufacturingproduction process"6 as activities that "shall occursolely at an industrial plant." The taxpayer contendsthat services rendered to the components of its electricity

[220 Conn. 755]

     generating facilities are exempt from the salestax because the generation of electricity is "manufacturing."

Whether the generation of electricity constitutesmanufacturing for the purposes of a sales tax exemptionis a question of first impression in this state. Indetermining this question, we need not undertake ascientific discussion of the nature of electricity or itsgeneration by mechanical means. See, e.g., FrederickElectric Light & Power Co. v. Frederick, 84 Md. 599,600-602, 36 A. 362 (1897). Rather, we rely on the legislativehistory and construction of the Sales and Use TaxAct as a whole for our conclusion that electricity generationis not manufacturing.7 While the generation ofelectricity may in some sense be a "manufacturing"process, we conclude that the legislature did not intendto exempt businesses engaged in the generation of electricityfor public consumption from the tax on servicesrendered to machinery and production equipment under12-407 (2)(i)(I).

In construing any statute, we seek to ascertain andgive effect to the apparent intent of the legislature. Texaco

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     Refining & Marketing Co. v. Commissioner,202 Conn. 583, 589, 522 A.2d 771 (1987). "In seeking todiscern that intent, we look to the words of the statuteitself, to the legislative history and circumstancessurrounding its enactment, to the legislative policy itwas designed to implement, and to its relationship toexisting legislation and common law principles governingthe same general subject matter." Id.

Starting with the language of the statute itself, aswe must; see, e.g., Lundy Electronics & Systems, Inc.v. Tax Commissioner, 189 Conn. 690, 695,458 A.2d 387 (1983); we note that 12-407 (2)(i)(I) refers to"commercial, industrial and income-producing realproperty." The legislative history of No. 75-213 of the1975 Public Acts, which enacted the provision, does notclarify the meaning of the term "industrial real property."The regulations define "industrial real property"as an "industrial plant"; Regs., Conn. State Agencies12-426-26 (d); which is in turn defined as a "manufacturingfacility at which a manufacturing production processis occurring." Regs., Conn. State Agencies12-426-11b (7). The regulatory definition of "manufacturing"is ambiguous as to whether the generation ofelectricity is included. See footnote 5, supra.

Where particular words or sections of a statute,considered separately, are imprecise, we may look to theexpressed intent of the statute as a whole. State v. Burney,189 Conn. 321, 326, 455 A.2d 1335 (1983); see also Ruskewichv. Commissioner of Revenue Services, 213 Conn. 19, 25,566 A.2d 658 (1989). Thus, in construing the terms "industrialreal property," as used in 12-407 (2)(i)(I), and"manufacturing," as referred to in the regulations promulgatedthereunder, we consider other sections of the Sales and UseTax Act which contain similar language.

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The Sales and Use Tax Act was enacted in 1947 and1948.8 The act singled out the furnishing of electricityfor special treatment in several places. First, the actexempted from taxation the sales, furnishing or serviceof electricity, and gas, water, telephone and telegraph,"when delivered to consumers through mains,lines or pipes."9 General Statutes (1947 Rev.) 334i (c).In addition, the act separately exempted materials,tools and fuel used in the generation of gas, water,steam or electricity for distribution to consumers, andmaterials, tools and fuel used in "an industrial plantin the process of the manufacture of tangible personalproperty."10 General Statutes (1949 Rev.) 2096(r).

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The special treatment of electric companies and otherpublic utilities suggests that the act's drafters consideredsuch industries to be distinct from manufacturingconcerns. In addition, such separate treatmentimplies a legislative intent not to exempt public utilitiesfrom other sections of the act unless expresslyexempted.11 Finally, the separation of the "furnishingof electricity" from the "manufacture of tangible personalproperty" in the second provision supports aninference that the term, "industrial plant," excludesfacilities devoted to the generation of electricity forpublic consumption.12

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Machinery was expressly excluded from the originalexemption for materials, tools and fuel. See footnote10, supra. In 1978, the legislature deleted the languageexcluding machinery and added a new subsection, nowcodified as 12-412 (34), which exempted "machineryused directly in a manufacturing production process."13"[A] legislative act must be read as a wholeand construed to give effect and to harmonize all ofits parts . . . ." Eighth Utilities District v. Manchester,176 Conn. 43, 50, 404 A.2d 898 (1978). Thelegislative history of 12-412 (34) therefore guides usin determining what constitutes "manufacturing" forthe purposes of the exemption from 12-407 (2)(i)(I)claimed by the taxpayer.

Senator Audrey P. Beck, the sponsor of the bill toeliminate the sales tax on machinery and equipment,gave the following two reasons in support of the legislation:"The first is that in the judgment of the Committee,the sector of the business community having thegreatest difficulties is the manufacturing sector and,therefore, by eliminating the sales tax on machinery andequipment, we feel that we will be stimulating the

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     manufacturing sector to modernize, to improve, toremain efficient and competitive and, secondly, in termsof the sales by those companies, which are selling suchequipment, we feel that by completely eliminating thistax, we will also stimulate their own sales of thatequipment."14 (Emphasis added.) During House debate onthe bill, the House Chairman of the Joint Committeeon Finance, Representative Gardner E. Wright, Jr.,referred to the elimination of the tax as "an encouragementand an inducement for manufacturers in the stateof Connecticut," citing United Technologies as thelargest manufacturer in the state.15

The legislative intent is further illuminated by commentsmade by Representative Wright at public hearingsof the Joint Standing Committee on Finance.16 Inresponse to a question about the meaning of "manufacturing"under the act,17 Representative Wright stated:"Let me try to explain a little bit of the rationale aboutwhat we did. We had limited number of dollars to workwith and we felt that it was our purpose and our intentionto put those tax incentives where we thought they

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     would do the most good in the expansion of jobs in thestate of Connecticut, and we felt the manufacturingindustry where we produced goods for sale outside ofthe state of Connecticut or even to other manufacturingindustries or concerns within the state, it would provideus with the greatest return, and that if we wereto encourage expansion and development in the truemanufacturing industries, we would encourage expansionof jobs in Connecticut, and that's why." (Emphasisadded.) Conn. Joint Standing Committee Hearings,Finance, Pt. 2, 1978 Sess., p. 549. He suggested thatproposed new plants for J.C. Penney and Union Carbidewould provide "true manufacturing jobs." Id., 551.

The legislative history of 12-412 (34) demonstratesthat the elimination of the sales tax on machinery andequipment was intended to encourage the growth anddevelopment of "true" manufacturing industries inConnecticut. See Phelps Dodge Copper Products Co. v.Groppo, 204 Conn. 122, 135, 527 A.2d 672 (1987). Weconclude that the exemption claimed by the taxpayerpursuant to 12-426-26 (d) of the Regulations of ConnecticutState Agencies, for services rendered tomachinery and equipment at an industrial plant, wasmotivated by the same concerns.18 "[W]ould the term

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     `manufacturing industries' strike the mind of the averageman, when used in the above connection as includingan electric light plant?" Frederick Electric Light& Power Co. v. Frederick, 84 Md. 599, 601, 36 A. 362(1897). "In the ordinary popular meaning of the word,a corporation which operates gas or electric works isnot a `manufacturer,' and is not so styled, though, scientificallyspeaking, gas or electricity may be a productof manufacture." State v. New Orleans Ry. & Light Co.,116 La. 144, 149, 40 So. 597 (1906). The history of12-412 (34) makes clear that the "manufacturingindustries" exempted from taxes on the purchase ofmachinery and equipment and services renderedthereto were "intended to be such as might go elsewhere";Frederick Electric Light & Power Co. v.Frederick, supra, 602; not those, like a public powerutility, that would ordinarily be expected to remain inthis state. The inducements provided by the exemptionsin 12-412 (34) and 12-426-26 (d) of the regulationstherefore do not apply to businesses engaged in thegeneration of electricity. See id., 602-603. We concludethat the legislative purpose is not served by exemptingsuch businesses from the tax on services renderedto machinery and production equipment.

The case law in other jurisdictions supports our conclusionthat machinery and equipment used for thegeneration of electricity is not "machinery and productionequipment" at an "industrial plant" pursuant to12-426-26 (d) of the Regulations of Connecticut StateAgencies because the generation of electricity is not"manufacturing" within the meaning of the Sales andUse Tax Act.19 The commissioner properly calls our

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     attention to a decision of the Pennsylvania CommonwealthCourt; Potomac Edison Co. v. Commonwealth,50 Pa. Commw. 1, 411 A.2d 1287, aff'd, 491 Pa. 432,421 A.2d 214 (1980), appeal dismissed, 451 U.S. 901,101 S.Ct. 1965, 68 L.Ed.2d 289 (1981); for the propositionthat the generation of electricity is not manufacturing.In Potomac Edison, the court renewed thetaxpayer's appeal from an adverse administrative decision.In the absence of a statutory definition, the courtdefined "manufacturing" as "the application of laboror skill to material whereby the original article ischanged into a new, different and useful article . . . ."

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     (Internal quotation marks omitted.) Potomac EdisonCo. v. Commonwealth, supra, 411 A.2d 1290. The courtstated that the legal concept of "manufacturing"requires both a "substantial" change and the continuedexistence of the original, tangible material in the finishedproduct. Id. Relying on this definition, the courtconcluded that the process of electricity generation wasnot manufacturing because "no molecules of the originalraw material survive in the final product." Id., 1291.

The taxpayer refers us, however, to a decision of theSupreme Court of Minnesota which held that electricityis a "manufactured, marketable product" for thepurposes of a property tax exemption. In re Answerof Minnesota Power & Light Co., 289 Minn. 64, 75,182 N.W.2d 685 (1970). The Minnesota law at issueexempted "[t]ools and machinery which by law is consideredas personal property used or usable in . . .the manufacture, processing, production, sale or distributionof marketable products . . . ." (Internal quotationmarks omitted.) Id., 67. In dicta, the courtreviewed with approval earlier Minnesota decisions anddecisions from other jurisdictions which held that electricitygeneration is manufacturing. Id., 72-73. Theholding in In re Answer of Minnesota Power & LightCo., however, turned on the question of whether electricityis a "marketable product" within the meaningof the statutory exemption. Id. 73-75.

The definition of manufacturing in Potomac EdisonCo. v. Commonwealth, supra, is substantially similarto the definition set forth in 12-426-11b (10) of theRegulations of Connecticut State Agencies. See footnote5, supra. Nevertheless, we reject as unnecessarilytechnical the reasoning of the Pennsylvania courtin that case. The holding of In re Answer of MinnesotaPower & Light Co., supra, is inapplicable because it didnot depend, as does the exemption claimed by the taxpayer

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     in the present case, upon a determination ofwhether electricity generation constitutes manufacturing.

The taxpayer bears the burden of proving the errorin an adverse assessment concerning an exemption.Plastic Tooling Aids Laboratory, Inc. v. Commissionerof Revenue Services, supra, 369. Where there is anyambiguity in the applicability of an exemption, we mustuphold the assessment of the commissioner. Id. The taxpayerin the present appeal has not sustained its burden.We therefore reverse the decision of the trial courtin favor of the taxpayer. We agree with the taxpayer,however, that a remand to the trial court is necessaryfor a factual determination of the nature of the subjectproperty. See footnote 4, supra.

The judgment is reversed and the case is remandedfor further proceedings.

In this opinion the other justices concurred.

1. General Statutes 12-407 (2)(i)(I) provides in relevant part:"DEFINITIONS. Whenever used in this chapter . . . (2) `Sale' and `selling'mean and include . . . (i) the rendering of certain services for aconsideration exclusive of such services rendered by an employee for hisemployer, as follows . . . (I) services to industrial, commercial orincome-producing real property, including but not limited to, suchservices as management, [maintenance, janitorial, electrical, plumbing,painting and carpentry . . . ." Public Acts 1989, No. 89-251, which becameeffective after the tax period relevant to this appeal, deleted thebracketed words.

2. General Statutes 12-422 provides in relevant part as follows:"Sec. 12-422. APPEAL. Any taxpayer aggrieved because of any order, decisiondetermination or disallowance of the commissioner of revenue services undersection 12-418, 12-421 or 12-425 may, within one month after service uponthe taxpayer of notice of such order, decision, determination ordisallowance, take an appeal therefrom to the superior court for thejudicial district of Hartford-New Britain . . . ."

3. The trial court found that smokestacks at the taxpayer's plantsdid not qualify as machinery and production equipment within the meaningof the regulation and, thus, were taxable under General Statutes 12-407 (2)(i)(I). The taxpayer has not appealed that ruling.

4. Because the trial court found that the subject propertyqualified as machinery and production equipment at an industrial plant,the court did not determine whether it was real or personal property. Thetrial court stated: "If the issue was whether or not the equipmentmaintained were fixtures according to Connecticut law, an inquiry wouldhave to be made whether or not each component was attached to the realtyand intended to be permanently so attached. Waterbury Petroleum Products,Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208, 215-16 [477 A.2d 988] (1984).However, 12-426-26 (d) of Conn. Agencies Regulations, adopted by theDepartment of Revenue Services obviates such an inquiry." We agree with thetaxpayer, therefore, that our reversal necessitates a remand to the trialcourt to determine whether the component parts of the taxpayer's facilitiesare real or personal property.

5. Section 12-426-11b (10) of the Regulations of Connecticut StateAgencies defines "manufacturing" as follows: "`Manufacturing' shall mean theperformance as a business of an integrated series of operations which placespersonal property in a form, composition or character different from thatin which it was acquired for sale in the regular course of business by themanufacturer. The change in form, composition, or character must be asubstantial change, and it must result in a transformation of property intoa different product having a distinctive name, nature and use. Operationssuch as compounding or fabricating are illustrative of the types ofoperation which may result in such a change. `Manufacturing' is anactivity which shall occur solely at an industrial plant."

6. Section 12-426-11b (11) of the Regulations of Connecticut StateAgencies provides: "`Manufacturing production process' shall mean any oneof a series of production activities, beginning with the movement of the rawmaterials after their receipt, inspection and storage, to the firstproduction machine and ending with the completion of the finished product,including any packaging operations, for its sale to the ultimate consumer.`Manufacturing production process' shall not include any activities priorto the first production stage (such as collecting, weighing and storing rawmaterials) or any activities following the last production stage (such ascasing, loading or delivering to the consumer). `Manufacturing productionprocess' shall occur solely at an industrial plant."

7. Other jurisdictions have relied on legislative intent to holdthat the generation of electricity is not manufacturing for the purpose ofa tax exemption. See State v. New Orleans Ry. & Light Co., 116 La. 144,150, 40 So. 597 (1906); Frederick Electric Light & Power Co. v. Frederick,84 Md. 599, 600-603, 36 A. 362 (1897); Commonwealth v. Northern ElectricLight & Power Co., 145 Pa. 105, 118-21, 22 A. 839 (1891). As the courtstated in Frederick Electric Light & Power Co. v. Frederick, supra,600-602: "In determining [the question of whether an electric lightcompany is a manufacturing industry], we do not deem it necessary toattempt a scientific discussion of what electricity is. . . . Whether anelectric light company can properly be said to `manufacture' electricity orwhether it simply brings into action that which is already made, we neednot determine. The Mayor and Aldermen of Frederick have . . . undertakento exempt certain property from municipal taxation and we are simply todetermine whether the appellant can reasonably be said to be within themeaning and intention of this legislation."

8. Public Acts 1947, No. 228; Public Acts, Spec. Sess., February,1948, No. 1, 5, 6, 7. The original enactment contained no provision for thetax on services at issue in this appeal.

9. Public Acts 1947, No. 228, 7. In 1989, this section was amendedto exempt, among other things, electricity used directly in an "industrialmanufacturing plant." Public Acts 1989, No. 89-251, 12. During the Housedebate, Representative David Lavine, who introduced a successful amendmentto revise the method of determining eligibility for the exemption,stated that the commissioner would use "SIC codes" to determine whethera given taxpayer qualified as an "industrial manufacturing plant." 32 H.R.Proc., Pt. 29, 1989 Sess., pp. 10, 159-60. "SIC codes" refers to thecategories set forth in the Standard Industrial Classification Manualperiodically published by the United States Office of Management andBudget. Reliance on the SIC codes would exclude public utilities engaged inthe generation of electricity from the term, "industrial manufacturingplant," as the SIC Manual (1972 and 1987 Eds.) separates manufacturingindustries (Codes 2011 to 3999) from public utilities, including"[e]stablishments engaged in the generation, transmission, and/ordistribution of electric energy for sale" (Code 4911).See also General Statutes 12-412d, added by Public Acts 1986, No.86-397, which refers the commissioner to code classifications 3000 to 3999inclusive, of the Standard Industrial Classification (SIC) Manual (1972 Ed.)to determine whether a taxpayer qualifies for a refund for repair andreplacement parts to be used in machinery used directly in a "manufacturingproduction process."

10. General Statutes (1949 Rev.) 2096(r), enacted by Public Acts,Spec. Sess., February, 1948, No. 1, 7, provided in relevant part:"PRODUCTION MATERIALS. Sales of and the storage, use or other consumptionof materials, tools and fuel or any substitute therefor, but excludingmachinery or replacement parts thereof used in production . . . which areconsumed and used directly in . . . an industrial plant in the process ofthe manufacture of tangible personal property to be sold. Sales of and thestorage, use or other consumption of materials, tools and fuel or anysubstitute therefor, but excluding machinery or replacement parts thereofused in production, when such products are used and consumed directly inthe furnishing of power to an industrial manufacturing plant or in thefurnishing of . . . electricity when delivered to consumers through mains,lines or pipes." (Emphasis added.) This provision of the act is nowcodified as General Statutes 12-412 (18).

11. This court construed the original provision exempting the saleof public utilities to consumers as follows: "The exemption is of `thesales, furnishing, or service of, gas, water, electricity, telephone andtelegraph,' and it is, therefore, an exemption only from the sales tax.It does not, however, exempt such companies generally from that tax butonly as regards service delivered to customers `through mains, lines orpipes.' The careful delineation of the bounds of this exemption givesunusual force to the principle that the express mention in a statute ofone exemption precludes reading others into it. . . . The provisionunmistakably shows a legislative intent that, as to sales other than thosespecified, public utility companies should be subject to the sales tax,and shows that there was no intent to exempt them generally from thattax." (Emphasis added.) Connecticut Light & Power Co. v. Walsh,134 Conn. 295, 301, 57 A.2d 128 (1948).

12. The minimal legislative history available on the exemptionfor materials, tools and fuel supports such an interpretation. At a hearingon the sales tax bill, state tax commissioner Walter W. Walsh explainedthe exemption for materials, tools and fuel as follows: "If the articlepurchased is for tangible property to be produced for sale, assembling orprocessing or whatever is consumed in such cases and no tax should be onthe material. A purchase of oil which is going into a machine making upthings is not taxed. Parts making up things eventually used for resale, notax. Many parts incorporated into the same for parts to be sold, notax." Conn. Joint Standing Committee Hearings, Finance, 1947 Sess., p. 46.The statute as revised exempts materials used "in the actual fabrication ofthe finished product to be sold" rather than "in the manufacture oftangible personal property to be sold." General Statutes 12-412 (18).Nevertheless, the commissioner's references to the production of "tangibleproperty" and "things" as manufacturing suggests that the drafters did notintend the generation of electricity, which was separately exempted, toconstitute manufacturing at an industrial plant.

13. No. 78-71, 4, of the 1978 Public Acts added the followingsubsection to the Sales and Use Tax Act: "(gg) Sales of and the storage,use or other consumption of machinery used directly in a manufacturing oragricultural production process. The word `machinery' as used in thissubsection means the basic machine itself, including all of its componentparts and contrivances, such as belts, pulleys, shafts, moving parts,operating structures and all equipment or devices used or required tocontrol, regulate or operate the machinery, but excluding office equipmentor data processing equipment other than numerically controlled machineryused directly in the manufacturing process."

14. 21 S. Proc., Pt. 3, 1978 Sess., p. 1151. This court hasrecognized that the statement of the legislator who reported the bill outof committee is entitled to particular weight and careful consideration indiscerning legislative intent. Robinson v. Unemployment Security Board ofReview, 181 Conn. 1, 15 n. 4, 434 A.2d 293 (1980).

15. 21 H.R. Proc., Pt. 5, 1978 Sess., pp. 1948-49. RepresentativeArthur Della Vecchia also expressed support for the bill, noting that"presently the tax discourages the expansion of industry in our State."He commended the Joint Committee on Finance for being "aware of theproblems facing the manufacturers in our State" and "acting constructivelyto create a better climate for business and industry." Id., pp. 1963-64.

16. While we generally review a statute's legislative history basedon the Senate and House debates, we may also consider discussions before ajoint standing committee when discerning legislative intent. North Haven v.Planning & Zoning Commission, 220 Conn. 556, 564 n. 11,600 A.2d 1004 (1991).

17. Statement of Warren Seder, president of the ConnecticutDispensing Company and member of the board of directors of the ConnecticutAutomatic Merchandising Council. Conn. Joint Standing Committee Hearings,Finance, Pt. 2, 1978 Sess., pp. 547-49.

18. We reach this conclusion in part because 12-426-26 (d),as well as the other regulations relevant to this appeal, took effect onApril 7, 1980, only two years after 12-412 (34) was enacted. Moreover,the definitions set forth in 12-426-11b of the regulations, including thedefinition of "manufacturing," apply to both 12-412 (34) and 12-407(2)(i)(I). We also find support in the administrative interpretation of12-412 (34) by the commissioner. "This

19. See State v. New Orleans Ry. & Light Co., 116 La. 144,40 So. 597 (1906) (electric company not a "manufacturer" withinmeaning of clause in state constitution exempting manufacturers fromlicense taxes); Frederick Electric Light & Power Co. v. Frederick,84 Md. 599, 36 A. 362 (1897) (electric lightcompany is not "manufacturing industry" within meaning of exemption frommunicipal taxation); Commonwealth v. Northern Electric Light & Power Co.,145 Pa. 105, 22 A. 839 (1891) (company thatgenerates electricity is not "manufacturing company" within meaning ofstatutory exemption for capital stock of manufacturing companies); PotomacEdison Co. v. Commonwealth, 50 Pa. Commw. 1,411 A.2d 1287, aff'd,491 Pa. 432, 421 A.2d 214 (1980), appeal dismissed,451 U.S. 901, 101 S.Ct. 1965, 68 L.Ed.2d 289 (1981) (electric companyis not entitled to manufacturing exemption from franchise tax). But see Curry v. Alabama Power Co., 243 Ala. 53, 8 So.2d 521 (1942)(corporation engaged in generation and distribution of electricity is a"manufacturing corporation" within meaning of use tax act provisionexempting machines used in manufacturing tangible personal property);Morley v. Brown & Root, Inc., 219 Ark. 82, 239 S.W.2d 1012 (1951) (damto be used for generation of electricity is "manufacturing facility" withinmeaning of use tax act exemption); Kentucky Electric Co. v. Buechel,146 Ky. 660, 143 S.W. 58 (1912) (electric company was "manufacturingestablishment" within meaning of city ordinance exempting suchestablishments from taxation); In re Answer of Minnesota Power & Light Co.,289 Minn. 64, 182 N.W.2d 685 (1970) (electricity is "manufactured,marketable product" within meaning of property tax exemption for tools andmachinery used in the manufacture of "marketable products"); Department ofRevenue v. Puget Sound Power & Light Co., 179 Mont. 255, 587 P.2d 1282(1978) (electricity generation is "manufacturing process" and, therefore,generating complex is "new industrial property" within meaning of statuteproviding special property tax treatment); People ex rel. Brush ElectricMfg. Co. v. Wemple, 129 N.Y. 543, 29 N.E. 808 (1892) (electric company was"manufacturing company" within statutory exemption from corporationtaxes).

The dispositive issue in this tax appeal iswhether the trial court properly held that certainmachinery and equipment at three electricity generatingplants owned and operated by the plaintiff, UnitedIlluminating Company (taxpayer), constitute "machineryand production equipment" at an "industrial plant"within the meaning of 12-426-26 (d) of the Regulationsof Connecticut State Agencies, and therebyqualify for an exemption from the sales tax imposedon services to "industrial, commercial or income-producing

[220 Conn. 751]

     real property" pursuant to General Statutes12-407 (2)(i)(I).1 After a determination by the defendant,the commissioner of revenue services (commissioner),that the taxpayer was liable for a deficiencyassessment for the period from January 1, 1983,through December 31, 1985, the taxpayer appealed tothe Superior Court pursuant to General Statutes12-422.2 The court concluded that the taxpayer hadestablished that the subject property was exempt fromGeneral Statutes 12-407 (2)(i)(I) pursuant to12-426-26 (d) of the Regulations of Connecticut StateAgencies.3 The commissioner appealed and the taxpayercross appealed. We transferred the appeal fromthe Appellate Court in accordance with Practice Book4023. We reverse.

The trial court found the following facts, which areundisputed. The taxpayer is a public utility companythat generates electricity for distribution to consumersin south central Connecticut. The taxpayer has threeplants in Bridgeport and New Haven, each of which

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     consists of an integrated system of water pipes, steamducts, boilers, pumps, heaters, baffles, condensers, turbines,generators, transformers, smokestacks andassorted parts and connections. This integrated systemheats water to steam and brings the steam to superhigh temperatures. The resulting heat energy turns theturbines, which use mechanical energy to turn thegenerators, which generate electricity. The transformerschange the electricity from high current to highvoltage, which is then fed by transmission lines to consumers.The component parts of the system requireperiodic maintenance, which is performed by thirdparty contractors. The commissioner assessed a salestax upon the cost of these services pursuant to GeneralStatutes 12-407 (2)(i)(I).

In reviewing a decision of the trial court sustaininga taxpayer's appeal from a deficiency assessment, thiscourt must determine whether the trial court's factualfindings are clearly erroneous, or whether the decisionis otherwise legally erroneous. See Practice Book4061; Zachs v. Groppo, 207 Conn. 683, 689,542 A.2d 1145 (1988). When a party has challenged the legal conclusionsof the trial court, as the commissioner has here,we must determine whether these conclusions arelegally and logically correct and find support in the factsset out in the court's memorandum of decision. Zachsv. Groppo, supra; see also Pandolphe's Auto Parts, Inc.v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24(1980).

We note at the outset the principles of statutory constructionthat govern the applicability of a tax exemption."First, statutes that provide exemptions fromtaxation are a matter of legislative grace that must bestrictly construed against the taxpayer. Second, anyambiguity in the statutory formulation of an exemptionmust be resolved against the taxpayer. Third, thetaxpayer must bear the burden of proving the error in

[220 Conn. 753]

     an adverse assessment concerning an exemption."Plastic Tooling Aids Laboratory, Inc. v. Commissionerof Revenue Services, 213 Conn. 365, 369, 567 A.2d 1218(1990). Applying these principles to the present case,we conclude that the trial court incorrectly held thatthe taxpayer had sustained its burden of proving eligibilityfor the exemption from 12-407 (2)(i)(I) for servicesto "machinery and production equipment" at an"industrial plant" pursuant to 12-426-26 (d) of theregulations.

The purchase by a taxpayer of services for themaintenance of industrial, commercial or income-producingreal property is subject to the sales tax under12-407 (2)(i)(I) unless the transaction qualifies foran exemption pursuant to another section of the Salesand Use Tax Act or regulations promulgated thereunder.The commissioner contends that the variouscomponents of the taxpayer's electric generating plantsthat are the subject of this appeal are commercial realproperty and are thus subject to the tax. The taxpayerargues first that these components are personal property,but that, even if they are deemed to be fixtures,the services rendered to them qualify for an exemptionunder 12-426-26 (d) of the regulations, as servicesto "machinery and production equipment" at an "industrialplant." We agree with the commissioner that thetaxpayer does not qualify for the exemption.4

[220 Conn. 754]

The taxpayer claims an exemption pursuant to12-426-26 (d) of the regulations, which provides inpertinent part: "`Industrial property' shall mean andinclude an `industrial plant' as defined in Section12-426-11b of the Regulations of Connecticut StateAgencies and all real estate with structures thereon,if any, used in support of the industrial plant. . . . Servicesrendered to machinery and production equipmentare not taxable even though such machinery or equipmentis considered to be a fixture under Connecticut realproperty law." (Emphasis added.) Section 12-426-11b (7)of the regulations defines an "industrial plant" as a"manufacturing facility at which a manufacturingproduction process is occurring." The regulationsdefine both "manufacturing"5 and "manufacturingproduction process"6 as activities that "shall occursolely at an industrial plant." The taxpayer contendsthat services rendered to the components of its electricity

[220 Conn. 755]

     generating facilities are exempt from the salestax because the generation of electricity is "manufacturing."

Whether the generation of electricity constitutesmanufacturing for the purposes of a sales tax exemptionis a question of first impression in this state. Indetermining this question, we need not undertake ascientific discussion of the nature of electricity or itsgeneration by mechanical means. See, e.g., FrederickElectric Light & Power Co. v. Frederick, 84 Md. 599,600-602, 36 A. 362 (1897). Rather, we rely on the legislativehistory and construction of the Sales and Use TaxAct as a whole for our conclusion that electricity generationis not manufacturing.7 While the generation ofelectricity may in some sense be a "manufacturing"process, we conclude that the legislature did not intendto exempt businesses engaged in the generation of electricityfor public consumption from the tax on servicesrendered to machinery and production equipment under12-407 (2)(i)(I).

In construing any statute, we seek to ascertain andgive effect to the apparent intent of the legislature. Texaco

[220 Conn. 756]

     Refining & Marketing Co. v. Commissioner,202 Conn. 583, 589, 522 A.2d 771 (1987). "In seeking todiscern that intent, we look to the words of the statuteitself, to the legislative history and circumstancessurrounding its enactment, to the legislative policy itwas designed to implement, and to its relationship toexisting legislation and common law principles governingthe same general subject matter." Id.

Starting with the language of the statute itself, aswe must; see, e.g., Lundy Electronics & Systems, Inc.v. Tax Commissioner, 189 Conn. 690, 695,458 A.2d 387 (1983); we note that 12-407 (2)(i)(I) refers to"commercial, industrial and income-producing realproperty." The legislative history of No. 75-213 of the1975 Public Acts, which enacted the provision, does notclarify the meaning of the term "industrial real property."The regulations define "industrial real property"as an "industrial plant"; Regs., Conn. State Agencies12-426-26 (d); which is in turn defined as a "manufacturingfacility at which a manufacturing production processis occurring." Regs., Conn. State Agencies12-426-11b (7). The regulatory definition of "manufacturing"is ambiguous as to whether the generation ofelectricity is included. See footnote 5, supra.

Where particular words or sections of a statute,considered separately, are imprecise, we may look to theexpressed intent of the statute as a whole. State v. Burney,189 Conn. 321, 326, 455 A.2d 1335 (1983); see also Ruskewichv. Commissioner of Revenue Services, 213 Conn. 19, 25,566 A.2d 658 (1989). Thus, in construing the terms "industrialreal property," as used in 12-407 (2)(i)(I), and"manufacturing," as referred to in the regulations promulgatedthereunder, we consider other sections of the Sales and UseTax Act which contain similar language.

[220 Conn. 757]

The Sales and Use Tax Act was enacted in 1947 and1948.8 The act singled out the furnishing of electricityfor special treatment in several places. First, the actexempted from taxation the sales, furnishing or serviceof electricity, and gas, water, telephone and telegraph,"when delivered to consumers through mains,lines or pipes."9 General Statutes (1947 Rev.) 334i (c).In addition, the act separately exempted materials,tools and fuel used in the generation of gas, water,steam or electricity for distribution to consumers, andmaterials, tools and fuel used in "an industrial plantin the process of the manufacture of tangible personalproperty."10 General Statutes (1949 Rev.) 2096(r).

[220 Conn. 758]

The special treatment of electric companies and otherpublic utilities suggests that the act's drafters consideredsuch industries to be distinct from manufacturingconcerns. In addition, such separate treatmentimplies a legislative intent not to exempt public utilitiesfrom other sections of the act unless expresslyexempted.11 Finally, the separation of the "furnishingof electricity" from the "manufacture of tangible personalproperty" in the second provision supports aninference that the term, "industrial plant," excludesfacilities devoted to the generation of electricity forpublic consumption.12

[220 Conn. 759]

Machinery was expressly excluded from the originalexemption for materials, tools and fuel. See footnote10, supra. In 1978, the legislature deleted the languageexcluding machinery and added a new subsection, nowcodified as 12-412 (34), which exempted "machineryused directly in a manufacturing production process."13"[A] legislative act must be read as a wholeand construed to give effect and to harmonize all ofits parts . . . ." Eighth Utilities District v. Manchester,176 Conn. 43, 50, 404 A.2d 898 (1978). Thelegislative history of 12-412 (34) therefore guides usin determining what constitutes "manufacturing" forthe purposes of the exemption from 12-407 (2)(i)(I)claimed by the taxpayer.

Senator Audrey P. Beck, the sponsor of the bill toeliminate the sales tax on machinery and equipment,gave the following two reasons in support of the legislation:"The first is that in the judgment of the Committee,the sector of the business community having thegreatest difficulties is the manufacturing sector and,therefore, by eliminating the sales tax on machinery andequipment, we feel that we will be stimulating the

[220 Conn. 760]

     manufacturing sector to modernize, to improve, toremain efficient and competitive and, secondly, in termsof the sales by those companies, which are selling suchequipment, we feel that by completely eliminating thistax, we will also stimulate their own sales of thatequipment."14 (Emphasis added.) During House debate onthe bill, the House Chairman of the Joint Committeeon Finance, Representative Gardner E. Wright, Jr.,referred to the elimination of the tax as "an encouragementand an inducement for manufacturers in the stateof Connecticut," citing United Technologies as thelargest manufacturer in the state.15

The legislative intent is further illuminated by commentsmade by Representative Wright at public hearingsof the Joint Standing Committee on Finance.16 Inresponse to a question about the meaning of "manufacturing"under the act,17 Representative Wright stated:"Let me try to explain a little bit of the rationale aboutwhat we did. We had limited number of dollars to workwith and we felt that it was our purpose and our intentionto put those tax incentives where we thought they

[220 Conn. 761]

     would do the most good in the expansion of jobs in thestate of Connecticut, and we felt the manufacturingindustry where we produced goods for sale outside ofthe state of Connecticut or even to other manufacturingindustries or concerns within the state, it would provideus with the greatest return, and that if we wereto encourage expansion and development in the truemanufacturing industries, we would encourage expansionof jobs in Connecticut, and that's why." (Emphasisadded.) Conn. Joint Standing Committee Hearings,Finance, Pt. 2, 1978 Sess., p. 549. He suggested thatproposed new plants for J.C. Penney and Union Carbidewould provide "true manufacturing jobs." Id., 551.

The legislative history of 12-412 (34) demonstratesthat the elimination of the sales tax on machinery andequipment was intended to encourage the growth anddevelopment of "true" manufacturing industries inConnecticut. See Phelps Dodge Copper Products Co. v.Groppo, 204 Conn. 122, 135, 527 A.2d 672 (1987). Weconclude that the exemption claimed by the taxpayerpursuant to 12-426-26 (d) of the Regulations of ConnecticutState Agencies, for services rendered tomachinery and equipment at an industrial plant, wasmotivated by the same concerns.18 "[W]ould the term

[220 Conn. 762]

     `manufacturing industries' strike the mind of the averageman, when used in the above connection as includingan electric light plant?" Frederick Electric Light& Power Co. v. Frederick, 84 Md. 599, 601, 36 A. 362(1897). "In the ordinary popular meaning of the word,a corporation which operates gas or electric works isnot a `manufacturer,' and is not so styled, though, scientificallyspeaking, gas or electricity may be a productof manufacture." State v. New Orleans Ry. & Light Co.,116 La. 144, 149, 40 So. 597 (1906). The history of12-412 (34) makes clear that the "manufacturingindustries" exempted from taxes on the purchase ofmachinery and equipment and services renderedthereto were "intended to be such as might go elsewhere";Frederick Electric Light & Power Co. v.Frederick, supra, 602; not those, like a public powerutility, that would ordinarily be expected to remain inthis state. The inducements provided by the exemptionsin 12-412 (34) and 12-426-26 (d) of the regulationstherefore do not apply to businesses engaged in thegeneration of electricity. See id., 602-603. We concludethat the legislative purpose is not served by exemptingsuch businesses from the tax on services renderedto machinery and production equipment.

The case law in other jurisdictions supports our conclusionthat machinery and equipment used for thegeneration of electricity is not "machinery and productionequipment" at an "industrial plant" pursuant to12-426-26 (d) of the Regulations of Connecticut StateAgencies because the generation of electricity is not"manufacturing" within the meaning of the Sales andUse Tax Act.19 The commissioner properly calls our

[220 Conn. 763]

     attention to a decision of the Pennsylvania CommonwealthCourt; Potomac Edison Co. v. Commonwealth,50 Pa. Commw. 1, 411 A.2d 1287, aff'd, 491 Pa. 432,421 A.2d 214 (1980), appeal dismissed, 451 U.S. 901,101 S.Ct. 1965, 68 L.Ed.2d 289 (1981); for the propositionthat the generation of electricity is not manufacturing.In Potomac Edison, the court renewed thetaxpayer's appeal from an adverse administrative decision.In the absence of a statutory definition, the courtdefined "manufacturing" as "the application of laboror skill to material whereby the original article ischanged into a new, different and useful article . . . ."

[220 Conn. 764]

     (Internal quotation marks omitted.) Potomac EdisonCo. v. Commonwealth, supra, 411 A.2d 1290. The courtstated that the legal concept of "manufacturing"requires both a "substantial" change and the continuedexistence of the original, tangible material in the finishedproduct. Id. Relying on this definition, the courtconcluded that the process of electricity generation wasnot manufacturing because "no molecules of the originalraw material survive in the final product." Id., 1291.

The taxpayer refers us, however, to a decision of theSupreme Court of Minnesota which held that electricityis a "manufactured, marketable product" for thepurposes of a property tax exemption. In re Answerof Minnesota Power & Light Co., 289 Minn. 64, 75,182 N.W.2d 685 (1970). The Minnesota law at issueexempted "[t]ools and machinery which by law is consideredas personal property used or usable in . . .the manufacture, processing, production, sale or distributionof marketable products . . . ." (Internal quotationmarks omitted.) Id., 67. In dicta, the courtreviewed with approval earlier Minnesota decisions anddecisions from other jurisdictions which held that electricitygeneration is manufacturing. Id., 72-73. Theholding in In re Answer of Minnesota Power & LightCo., however, turned on the question of whether electricityis a "marketable product" within the meaningof the statutory exemption. Id. 73-75.

The definition of manufacturing in Potomac EdisonCo. v. Commonwealth, supra, is substantially similarto the definition set forth in 12-426-11b (10) of theRegulations of Connecticut State Agencies. See footnote5, supra. Nevertheless, we reject as unnecessarilytechnical the reasoning of the Pennsylvania courtin that case. The holding of In re Answer of MinnesotaPower & Light Co., supra, is inapplicable because it didnot depend, as does the exemption claimed by the taxpayer

[220 Conn. 765]

     in the present case, upon a determination ofwhether electricity generation constitutes manufacturing.

The taxpayer bears the burden of proving the errorin an adverse assessment concerning an exemption.Plastic Tooling Aids Laboratory, Inc. v. Commissionerof Revenue Services, supra, 369. Where there is anyambiguity in the applicability of an exemption, we mustuphold the assessment of the commissioner. Id. The taxpayerin the present appeal has not sustained its burden.We therefore reverse the decision of the trial courtin favor of the taxpayer. We agree with the taxpayer,however, that a remand to the trial court is necessaryfor a factual determination of the nature of the subjectproperty. See footnote 4, supra.

The judgment is reversed and the case is remandedfor further proceedings.

In this opinion the other justices concurred.

1. General Statutes 12-407 (2)(i)(I) provides in relevant part:"DEFINITIONS. Whenever used in this chapter . . . (2) `Sale' and `selling'mean and include . . . (i) the rendering of certain services for aconsideration exclusive of such services rendered by an employee for hisemployer, as follows . . . (I) services to industrial, commercial orincome-producing real property, including but not limited to, suchservices as management, [maintenance, janitorial, electrical, plumbing,painting and carpentry . . . ." Public Acts 1989, No. 89-251, which becameeffective after the tax period relevant to this appeal, deleted thebracketed words.

2. General Statutes 12-422 provides in relevant part as follows:"Sec. 12-422. APPEAL. Any taxpayer aggrieved because of any order, decisiondetermination or disallowance of the commissioner of revenue services undersection 12-418, 12-421 or 12-425 may, within one month after service uponthe taxpayer of notice of such order, decision, determination ordisallowance, take an appeal therefrom to the superior court for thejudicial district of Hartford-New Britain . . . ."

3. The trial court found that smokestacks at the taxpayer's plantsdid not qualify as machinery and production equipment within the meaningof the regulation and, thus, were taxable under General Statutes 12-407 (2)(i)(I). The taxpayer has not appealed that ruling.

4. Because the trial court found that the subject propertyqualified as machinery and production equipment at an industrial plant,the court did not determine whether it was real or personal property. Thetrial court stated: "If the issue was whether or not the equipmentmaintained were fixtures according to Connecticut law, an inquiry wouldhave to be made whether or not each component was attached to the realtyand intended to be permanently so attached. Waterbury Petroleum Products,Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208, 215-16 [477 A.2d 988] (1984).However, 12-426-26 (d) of Conn. Agencies Regulations, adopted by theDepartment of Revenue Services obviates such an inquiry." We agree with thetaxpayer, therefore, that our reversal necessitates a remand to the trialcourt to determine whether the component parts of the taxpayer's facilitiesare real or personal property.

5. Section 12-426-11b (10) of the Regulations of Connecticut StateAgencies defines "manufacturing" as follows: "`Manufacturing' shall mean theperformance as a business of an integrated series of operations which placespersonal property in a form, composition or character different from thatin which it was acquired for sale in the regular course of business by themanufacturer. The change in form, composition, or character must be asubstantial change, and it must result in a transformation of property intoa different product having a distinctive name, nature and use. Operationssuch as compounding or fabricating are illustrative of the types ofoperation which may result in such a change. `Manufacturing' is anactivity which shall occur solely at an industrial plant."

6. Section 12-426-11b (11) of the Regulations of Connecticut StateAgencies provides: "`Manufacturing production process' shall mean any oneof a series of production activities, beginning with the movement of the rawmaterials after their receipt, inspection and storage, to the firstproduction machine and ending with the completion of the finished product,including any packaging operations, for its sale to the ultimate consumer.`Manufacturing production process' shall not include any activities priorto the first production stage (such as collecting, weighing and storing rawmaterials) or any activities following the last production stage (such ascasing, loading or delivering to the consumer). `Manufacturing productionprocess' shall occur solely at an industrial plant."

7. Other jurisdictions have relied on legislative intent to holdthat the generation of electricity is not manufacturing for the purpose ofa tax exemption. See State v. New Orleans Ry. & Light Co., 116 La. 144,150, 40 So. 597 (1906); Frederick Electric Light & Power Co. v. Frederick,84 Md. 599, 600-603, 36 A. 362 (1897); Commonwealth v. Northern ElectricLight & Power Co., 145 Pa. 105, 118-21, 22 A. 839 (1891). As the courtstated in Frederick Electric Light & Power Co. v. Frederick, supra,600-602: "In determining [the question of whether an electric lightcompany is a manufacturing industry], we do not deem it necessary toattempt a scientific discussion of what electricity is. . . . Whether anelectric light company can properly be said to `manufacture' electricity orwhether it simply brings into action that which is already made, we neednot determine. The Mayor and Aldermen of Frederick have . . . undertakento exempt certain property from municipal taxation and we are simply todetermine whether the appellant can reasonably be said to be within themeaning and intention of this legislation."

8. Public Acts 1947, No. 228; Public Acts, Spec. Sess., February,1948, No. 1, 5, 6, 7. The original enactment contained no provision for thetax on services at issue in this appeal.

9. Public Acts 1947, No. 228, 7. In 1989, this section was amendedto exempt, among other things, electricity used directly in an "industrialmanufacturing plant." Public Acts 1989, No. 89-251, 12. During the Housedebate, Representative David Lavine, who introduced a successful amendmentto revise the method of determining eligibility for the exemption,stated that the commissioner would use "SIC codes" to determine whethera given taxpayer qualified as an "industrial manufacturing plant." 32 H.R.Proc., Pt. 29, 1989 Sess., pp. 10, 159-60. "SIC codes" refers to thecategories set forth in the Standard Industrial Classification Manualperiodically published by the United States Office of Management andBudget. Reliance on the SIC codes would exclude public utilities engaged inthe generation of electricity from the term, "industrial manufacturingplant," as the SIC Manual (1972 and 1987 Eds.) separates manufacturingindustries (Codes 2011 to 3999) from public utilities, including"[e]stablishments engaged in the generation, transmission, and/ordistribution of electric energy for sale" (Code 4911).See also General Statutes 12-412d, added by Public Acts 1986, No.86-397, which refers the commissioner to code classifications 3000 to 3999inclusive, of the Standard Industrial Classification (SIC) Manual (1972 Ed.)to determine whether a taxpayer qualifies for a refund for repair andreplacement parts to be used in machinery used directly in a "manufacturingproduction process."

10. General Statutes (1949 Rev.) 2096(r), enacted by Public Acts,Spec. Sess., February, 1948, No. 1, 7, provided in relevant part:"PRODUCTION MATERIALS. Sales of and the storage, use or other consumptionof materials, tools and fuel or any substitute therefor, but excludingmachinery or replacement parts thereof used in production . . . which areconsumed and used directly in . . . an industrial plant in the process ofthe manufacture of tangible personal property to be sold. Sales of and thestorage, use or other consumption of materials, tools and fuel or anysubstitute therefor, but excluding machinery or replacement parts thereofused in production, when such products are used and consumed directly inthe furnishing of power to an industrial manufacturing plant or in thefurnishing of . . . electricity when delivered to consumers through mains,lines or pipes." (Emphasis added.) This provision of the act is nowcodified as General Statutes 12-412 (18).

11. This court construed the original provision exempting the saleof public utilities to consumers as follows: "The exemption is of `thesales, furnishing, or service of, gas, water, electricity, telephone andtelegraph,' and it is, therefore, an exemption only from the sales tax.It does not, however, exempt such companies generally from that tax butonly as regards service delivered to customers `through mains, lines orpipes.' The careful delineation of the bounds of this exemption givesunusual force to the principle that the express mention in a statute ofone exemption precludes reading others into it. . . . The provisionunmistakably shows a legislative intent that, as to sales other than thosespecified, public utility companies should be subject to the sales tax,and shows that there was no intent to exempt them generally from thattax." (Emphasis added.) Connecticut Light & Power Co. v. Walsh,134 Conn. 295, 301, 57 A.2d 128 (1948).

12. The minimal legislative history available on the exemptionfor materials, tools and fuel supports such an interpretation. At a hearingon the sales tax bill, state tax commissioner Walter W. Walsh explainedthe exemption for materials, tools and fuel as follows: "If the articlepurchased is for tangible property to be produced for sale, assembling orprocessing or whatever is consumed in such cases and no tax should be onthe material. A purchase of oil which is going into a machine making upthings is not taxed. Parts making up things eventually used for resale, notax. Many parts incorporated into the same for parts to be sold, notax." Conn. Joint Standing Committee Hearings, Finance, 1947 Sess., p. 46.The statute as revised exempts materials used "in the actual fabrication ofthe finished product to be sold" rather than "in the manufacture oftangible personal property to be sold." General Statutes 12-412 (18).Nevertheless, the commissioner's references to the production of "tangibleproperty" and "things" as manufacturing suggests that the drafters did notintend the generation of electricity, which was separately exempted, toconstitute manufacturing at an industrial plant.

13. No. 78-71, 4, of the 1978 Public Acts added the followingsubsection to the Sales and Use Tax Act: "(gg) Sales of and the storage,use or other consumption of machinery used directly in a manufacturing oragricultural production process. The word `machinery' as used in thissubsection means the basic machine itself, including all of its componentparts and contrivances, such as belts, pulleys, shafts, moving parts,operating structures and all equipment or devices used or required tocontrol, regulate or operate the machinery, but excluding office equipmentor data processing equipment other than numerically controlled machineryused directly in the manufacturing process."

14. 21 S. Proc., Pt. 3, 1978 Sess., p. 1151. This court hasrecognized that the statement of the legislator who reported the bill outof committee is entitled to particular weight and careful consideration indiscerning legislative intent. Robinson v. Unemployment Security Board ofReview, 181 Conn. 1, 15 n. 4, 434 A.2d 293 (1980).

15. 21 H.R. Proc., Pt. 5, 1978 Sess., pp. 1948-49. RepresentativeArthur Della Vecchia also expressed support for the bill, noting that"presently the tax discourages the expansion of industry in our State."He commended the Joint Committee on Finance for being "aware of theproblems facing the manufacturers in our State" and "acting constructivelyto create a better climate for business and industry." Id., pp. 1963-64.

16. While we generally review a statute's legislative history basedon the Senate and House debates, we may also consider discussions before ajoint standing committee when discerning legislative intent. North Haven v.Planning & Zoning Commission, 220 Conn. 556, 564 n. 11,600 A.2d 1004 (1991).

17. Statement of Warren Seder, president of the ConnecticutDispensing Company and member of the board of directors of the ConnecticutAutomatic Merchandising Council. Conn. Joint Standing Committee Hearings,Finance, Pt. 2, 1978 Sess., pp. 547-49.

18. We reach this conclusion in part because 12-426-26 (d),as well as the other regulations relevant to this appeal, took effect onApril 7, 1980, only two years after 12-412 (34) was enacted. Moreover,the definitions set forth in 12-426-11b of the regulations, including thedefinition of "manufacturing," apply to both 12-412 (34) and 12-407(2)(i)(I). We also find support in the administrative interpretation of12-412 (34) by the commissioner. "This

19. See State v. New Orleans Ry. & Light Co., 116 La. 144,40 So. 597 (1906) (electric company not a "manufacturer" withinmeaning of clause in state constitution exempting manufacturers fromlicense taxes); Frederick Electric Light & Power Co. v. Frederick,84 Md. 599, 36 A. 362 (1897) (electric lightcompany is not "manufacturing industry" within meaning of exemption frommunicipal taxation); Commonwealth v. Northern Electric Light & Power Co.,145 Pa. 105, 22 A. 839 (1891) (company thatgenerates electricity is not "manufacturing company" within meaning ofstatutory exemption for capital stock of manufacturing companies); PotomacEdison Co. v. Commonwealth, 50 Pa. Commw. 1,411 A.2d 1287, aff'd,491 Pa. 432, 421 A.2d 214 (1980), appeal dismissed,451 U.S. 901, 101 S.Ct. 1965, 68 L.Ed.2d 289 (1981) (electric companyis not entitled to manufacturing exemption from franchise tax). But see Curry v. Alabama Power Co., 243 Ala. 53, 8 So.2d 521 (1942)(corporation engaged in generation and distribution of electricity is a"manufacturing corporation" within meaning of use tax act provisionexempting machines used in manufacturing tangible personal property);Morley v. Brown & Root, Inc., 219 Ark. 82, 239 S.W.2d 1012 (1951) (damto be used for generation of electricity is "manufacturing facility" withinmeaning of use tax act exemption); Kentucky Electric Co. v. Buechel,146 Ky. 660, 143 S.W. 58 (1912) (electric company was "manufacturingestablishment" within meaning of city ordinance exempting suchestablishments from taxation); In re Answer of Minnesota Power & Light Co.,289 Minn. 64, 182 N.W.2d 685 (1970) (electricity is "manufactured,marketable product" within meaning of property tax exemption for tools andmachinery used in the manufacture of "marketable products"); Department ofRevenue v. Puget Sound Power & Light Co., 179 Mont. 255, 587 P.2d 1282(1978) (electricity generation is "manufacturing process" and, therefore,generating complex is "new industrial property" within meaning of statuteproviding special property tax treatment); People ex rel. Brush ElectricMfg. Co. v. Wemple, 129 N.Y. 543, 29 N.E. 808 (1892) (electric company was"manufacturing company" within statutory exemption from corporationtaxes).

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