50 Fed. Cl. 24 | Fed. Cl. | 2001
OPINION
For most of the period from 1962 through 1985, a taxpayer who acquired qualifying machinery and equipment for use in its trade or business was allowed an “investment tax credit” as a dollar-for-dollar offset against its income tax liability, in an amount equal to a specified percentage of its investment. The Tax Reform Act of 1986 (the Reform Act), Pub.L. No. 99-514, 100 Stat. 2085, generally
I. FACTS
Neither party disputes the facts at issue here, which are as follows:
Plaintiff, National Data Corporation and Subsidiaries (NDC or plaintiff), is a Georgia corporation that provides electronic information services for financial, retail, health care and communications markets. On April 21, 1973, plaintiff entered into an agreement to be the original lessee of a building located at One NDC Plaza in Atlanta, once the first floor of that newly-constructed building could be occupied. The commencement date for the lease was not specified in the initial agreement, but was settled upon in a First Amendment to the Lease Agreement, which set April 27,1973 as the lease initiation date. Under the provisions of the original agreement, as first amended, the term of the lease was 240 months, or until April 27, 1993. On September 24, 1991, however, the lease was extended to April 30, 2003, with an additional renewal term of 10 years at the option of NDC. The One NDC Plaza serves as NDC’s corporate headquarters and the hub for all of its worldwide operations. From 1987 to 1990 (the four taxable years at issue here), plaintiff had other corporate offices located throughout the United States, as well as offices and computer centers throughout Western Europe, Japan, and Canada.
NDC’s taxable year ran from June 1 to May 31. In its taxable year 1987, plaintiff placed approximately $6.5 million in leasehold improvements, equipment, furniture, and fixtures in service at the One NDC Plaza. In taxable year 1988, plaintiff placed an additional $17 million in improvements in service at the building, followed by an additional $5.5 million in improvements in taxable year 1989, and an additional $5.8 million in improvements in taxable year 1990. For each of the taxable years in question, plaintiff timely filed corporate income tax returns, but did not claim thereon investment credits for the aforementioned property. On August 8, 1994, however, plaintiff filed claims for refunds, asserting that it was entitled to investment tax credits for leasehold improvements, furnishings, and equipment placed in service at One NDC Plaza, during the four taxable years at issue. Plaintiff claimed approximately $2.1 million in tax credits, for a total refund claim of approximately $1.7 million. On September 5, 1996, the Appeals Office of the Internal Revenue Service denied plaintiffs refund claims for taxable years 1987-89, and, on August 12, 1997, it denied plaintiffs refund claim for taxable year 1990.
On January 14, 1997 and August 25, 1997, plaintiff commenced the instant consolidated suit, seeking a refund of $1,687,192, corresponding to the amounts it previously claimed on account of the investment tax credit. As noted above, this matter is before the court on the parties’ cross-motions for summary judgment. The case was transferred to the undersigned judge on February 8, 2001. Oral argument was heard in this case on April 18, 2001.
II. DISCUSSION
Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. RCFC 56;
Before the enactment of the Tax Reform Act of 1986 (the Reform Act), Pub.L. No. 99-514, 100 Stat. 2085, section 38 of the Internal Revenue Code of 1954
Section 211(a) of the Reform Act eliminated this investment tax credit by making the “regular percentage” specified in section 46(a)(1) of the Code inapplicable to “any property placed in service after December 31, 1985.” § 211, 100 Stat. at 2167-68. See also Telecom USA Inc. v. United States, 192 F.3d 1068, 1070 (D.C.Cir.1999), cert. denied, 529 U.S. 1123, 120 S.Ct. 1995, 146 L.Ed.2d 820 (2000); S.Rep. No. 99-313, at 96 (1986), U.S.Code Cong. & Admin News, 1986, 4075, 4184. However, Congress “softened the blow slightly by providing transitional rules to ameliorate the loss of’ the investment tax credit, United States v. Commonwealth Energy Sys., 235 F.3d 11, 15 (1st Cir.2000), among them, a limited exception to the repeal for certain types of “transition property,” including property falling within a “world headquarters” exception. See Pub.L. No. 99-514, § 204(a)(7), 100 Stat. 2155. The latter exception provided, in pertinent part:
Certain leasehold improvements. — The [repeal of the investment tax credit] shall not apply to any reasonable leasehold improvements, equipment and furnishings placed in service by a lessee ... if -
(A) the lessee ... is the original lessee of each building in which such property is to be used,
(B) such lessee is obligated to lease the building under an agreement to lease entered into before September 26, 1985, and such property is provided for such building, and
(C) such buildings are to serve as world headquarters of the lessee....
Such lessee shall include a securities firm that meets the requirements of subpara-graph (A), except the lessee is obligated to lease the building under a lease entered into on June 18,1986.
Id. See Kimberly-Clark Tissue Co. v. United States, 38 F.Supp.2d 1028, 1031 (E.D.Wis.1999). As noted by the Tax Court, “[t]he requirements of the world headquarters rule are cumulative,” and a taxpayer “must prove that it meets all the requirements of subparagraphs (A), (B), and (C) in order to qualify for an investment tax credit under this transitional rule.” Payless Cashways, Inc., v. Commissioner, 114 T.C. 72, 77, 2000 WL 177458 (2000). Pursuant to section 203(b) of the Reform Act, property subject to this exception was eligible for the credit provided
Plaintiff argues, and defendant concedes (at least for purposes of the cross-motions), that plaintiff met two prongs of section 204(a)(7)’s requirements — that is, it was the “original lessee” of the One NDC Plaza for purposes of subparagraph (A), and its building qualified as a “world headquarters” for purposes of subparagraph (C). However, the parties disagree as to whether NDC qualified under subparagraph (B), which requires that the “lessee is obligated to lease the building under an agreement to lease entered into before September 26,1985.” § 204,100 Stat. at 2155. Defendant asserts that this language does not apply to a taxpayer, such as NDC, who, prior to September 26, 1985, had already signed a lease and occupied its world headquarters. It is to that issue that the court now turns.
In construing the “world headquarters” exception, the court must first look to whether the statutory language is plain and unambiguous. See United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989); Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In performing this task, it is guided by certain principles of interpretation.
Applying these familiar canons to the language of section 204(a)(7), the court first trains its eye on that portion of subpara-graph (B) which states “[s]uch lessee is obligated to lease the building under an agreement to lease entered into before September
For many reasons, section 204(a)(7)(B) will not bear plaintiffs interpretation. The key phrase in that statute, “agreement to lease,” is neither defined in Webster’s Dictionary nor Black’s Law Dictionary. Nonetheless, both familiar lexicons define the term “lease” as constituting an “agreement” or a “contract” — Webster’s defines that phrase as “a contract by which one conveys lands, tenements, or hereditaments for lie, for terms of year, or at will,” Webster’s Third New International Dictionary 1286 (1993), while Black’s similarly describes it as “any agreement which gives rise to relationship of landlord and tenant,” Black’s Law Dictionary 889 (6th ed.1990). These definitions suggest that in common usage, a layperson would not employ the phrase “agreement to lease” or “contract to lease” to refer simply to a “lease,” as the word “agreement” or “contract” is implied and subsumed within the latter concept. This observation, though a splinter of logic in the first instance, takes on sturdier proportions when buttressed by the common law understanding of the phrase “agreement to lease,” or its equivalent, “contract to lease,” which, although subject to some local variation, is a familiar denizen of landlord and tenant law.
As noted in a leading treatise in this area, “[a] lease is said to convey a present estate in distinction to a contract to lease, which is to provide for the creation in the future.” 3 Milton R. Friedman, Friedman on Leases § 34.1 (4th ed.1997) [hereinafter Friedman on Leases ]. Burnishing this explanation, another treatise indicates:
it is important to distinguish leases from nonpossessory interests because important consequences depend on the distinction. For the same reason, a lease must also be distinguished from a contract to make a lease. The distinction is that a lease is a transaction that is already partially executed, while a contract to lease creates obligations that are purely executory.... A contract to lease is an agreement that contemplates the future execution of a formal lease giving the prospective tenant the right to possession; the contract to lease is purely executory, and does not itself transfer a right to possession to the prospective tenant.
2 Richard R. Powell, Powell on Real Property § 16.02[4] (Michael Allan Wolf ed., 2001) [hereinafter Powell]. See also 51C C.J.S. Landlord & Tenant § 185a (1968) (“There is a distinction between a present lease and an executory contract to enter into a lease in that the latter vests no estate in the proposed lessee, while the former conveys an estate.”). The principal raison d’etre of this distinction lies in the fact that a lease, unlike an agreement to lease, gives a right to possession, which, in turn, defines the relief available upon its breach — for a breach of a lease, the landlord’s remedy is for accrued or accruing rent; while, for breach of an “agreement to lease,” a landlord may expect only ordinary contract damages (with a corresponding duty to mitigate). Friedman on Leases, §§ 34.1, 34.5.
Under the statutory canons outlined above, this court must presume that Congress was aware of this common law distinction in enacting the Reform Act. But, in fact, there is evidence that Congress actually appreciated this distinction — evidence that is found, interestingly enough, in the text of two prior acts that phased out the investment tax credit for a time. In 1966, for example, Congress suspended the credit for “suspension period property,” but excluded from that category property acquired “pursuant to a binding lease or contract to a binding lease or contract in effect on October 9, 1966.” Tax Reform Act of 1966, 26 U.S.C. § 48(h)(8) (1966) (emphasis added). Similarly, in 1969, when it terminated the credit (only to reenact it three years later), Congress continued the credit for “pre-termination property,” defined as property acquired “pursuant to a binding lease or contract to lease in effect on April 18, 1969.” Tax Reform Act of 1969, 26 U.S.C. § 49(b)(6) (1969) (emphasis added). The language and structure of these provisions belie any notion that Congress believed either that the phrases “leases” and “contract to lease” were synonymous or that the latter phrase somehow incorporated the former. Rather, when, in 1966 and 1969, Congress wanted to include both concepts in a transitional provision, it did so quite explicitly and alternatively. To conclude, as plaintiff does, that the phrase “contract to lease” covers a “lease” is blithely to assume that Congress’ use of the latter term in these earlier provisions was gratuitous. Such a conclusion, however, would violate the canon, highlighted above, that “a legislature is presumed to have used no superfluous words.” Platt v. Union Pacific R.R. Co., 99 U.S. 48, 52, 25
To be sure, “[c]anons of constructions need not be conclusive,” the Supreme Court recently stated, “and are often countered ... by some maxim pointing in a different direction.” Circuit City Stores, Inc. v. Adams, 532 U.S. 105, -, 121 S.Ct. 1302, 1309, 149 L.Ed.2d 234 (2001). Yet, here, not only do all the canons harken to the same conclusion, but there is further indication in section 204(a)(7) itself that Congress understood the distinction between a lease and an agreement to lease. Thus, while, as discussed above, in subparagraph (B), the “world headquarters” exception applied to “an agreement to lease entered into before September 26, 1985,” the statute also indicated, in the last sentence of paragraph (7), that the same exception would apply where “the lessee is obligated to lease under a lease entered into on June 18,1986.” § 204, 100 Stat. at 2155 (emphasis added). If, as plaintiff claims, a “lease” is an “agreement to lease” then why, in a single statutory paragraph, did Congress employ both phrases? Were plaintiff correct, Congress presumably would have used one phrase or the other in both places, paralleling the language in section 204(a)(7)(B) with that in the last sentence of paragraph (7). But it did not, choosing instead to employ different language and bringing into play yet another rule of statutory construction, to wit, that when different words are used in the same provision they are presumed to have a different meaning. See Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983).
House Resolution 3838, which contained the original draft of what ultimately became section 204(A)(7), was passed by the House of Representatives on December 16, 1985. On December 9, 1985, prior to passage, Representative Newt Gingrich from Georgia spoke on the floor of the House, railing against the “giveaways” created by the transitional rules and specifically citing Merrill Lynch as the intended beneficiary of the transitional rule applicable to the world headquarters exception. See 131 Cong. Rec. 35,-285 (1985). Subsequent to its passage by the House, H.R. 3838 was referred to the Senate Finance Committee on May 29, 1986. On June 10, 1986, the Committee published in the Congressional Record the identities of the intended beneficiaries of the various transitional rules relating to the repeal of the investment tax credit, indicating therein, again, that Merrill Lynch was the sole intended beneficiary of the world headquarters transitional rule. See 132 Cong. Rec. 13,090 (1986). On June 17, 1986, the proposed investment credit transitional rules were assailed again, this time by Senator Howard Metzenbaum from Ohio, who, in successfully moving an amendment to limit the transition rules, again identified Merrill Lynch as the beneficiary of the provision in question. See 132 Cong. Rec. 14,113 (1986). Finally, on September 27, 1986, after the Senate had passed its version of the Reform Act, and the Conference Committee had issued its report modifying the bill, the Senate, at Senator Metzenbaum’s behest, entered into the Congressional Record the intended beneficiaries of the transitional rules cross-referenced to the page of the Conference Report on which the particular rule was listed. Two entries in this listing reflect that Merrill Lynch was the intended beneficiary of section 204(a)(7)(A)-(C), and Drexel Burnham Lambert the beneficiary of the flush language in section 204(a)(7) added by the Conference Committee. 132 Cong. Rec. 26,638-40 (1986).
While, as Mr. Justice McReynolds once stated, “[l]ogic and taxation are not always the best of friends,” Sonneborn Bros. v. Cureton, 262 U.S. 506, 522, 43 S.Ct. 643, 67 L.Ed. 1095 (1923), this court is loathe to attribute to Congress such an anomalous, yet sweeping, approach, without the flimsiest of textual support, and especially in the face of a contrary conference report, which clearly indicates that the “special transitional rules” are “of limited application.” H.R. Conf. Rep. No. 99-841, at 11-62 (1986), reprinted in 1986 U.S.C.C.A.N. 4075, 4150.
To be sure, this conclusion — that the transition rule applies only to parties obligated to lease under an “agreement to lease,” but not a “lease” — has received a mix reception in the courts, with one prior decision supporting this court’s view, see United States v. Kjellstrom, 916 F.Supp. 902 (W.D.Wis.1996), aff'd on other grounds, 100 F.3d 482 (7th Cir. 1996), and two others, including one by the Ninth Circuit, rejecting that conclusion, see Airborne Freight Corp. v. United States, 153 F.3d 967 (9th Cir.1998); Kimberly-Clark Tissue Co. v. United States, 38 F.Supp.2d 1028 (E.D.Wis.1999). In the Ninth Circuit case, the defendant apparently argued, as it did here, that:
the exception should apply to taxpayers who were obligated to lease the building before September 26, 1985, but had not leased the building by that date. It also argued that, to qualify, the taxpayer must have agreed to lease the entire building. If these narrow constructions are not adopted, according to the government, the purpose of the exception will be frustrated: taxpayers who agreed to lease and leased buildings decades before the repeal of the investment credit will be entitled to avail themselves of the transitional exception.
Airborne Freight, 153 F.3d at 970 (emphasis in original). The Ninth Circuit, however, made short shrift of this argument, stating:
The difficulty with the government’s argument is that none of the words italicized in the previous paragraph were written into § 204(a)(7). There is no disqualification of those who executed leases before September 26, 1985, and the government offers no reason why the execution of a lease creates a relevantly different condition from that which existed under an agreement to lease____ We decline therefore to write the government’s additional proposed restrictions into the statute in order to confine the exception virtually to a class of one.
Id. Notwithstanding these comments, the court found that the statute incorporated a “reasonable expectation” test, indicating that “[w]e have no quarrel with the government’s argument that, in light of its purpose, the exception should be available only to those whose expectations at the time they undertook their obligations would otherwise be defeated by the repeal of the investment credit.” Id. The Ninth Circuit found-that while Airborne “qualifies ... under such a guiding principle,” “other companies that leased their world headquarters decades
With all due respect, this court finds Ninth Circuit’s reasoning faulty on several counts.
In sum, the text of the Reform Act, as illuminated by the statute’s legislative history, the various statutory canons of construction, and common law, forecloses the construction of section 204(a)(7) urged by NDC. As such, this court concludes that, with respect to the taxable years in question, NDC did not meet section 204(a)(7)(B)’s requirement that a taxpayer “is obligated to lease the building under an agreement to lease entered into before September 26, 1985.” § 204, 100 Stat. at 2155. Therefore, it is not entitled to the transition rule exception from the general repeal of the investment tax credit.
III. Conclusion
For the foregoing reasons, the court concludes that plaintiff is not entitled to the claimed investment tax credits. Accordingly, the defendant’s motion for summary judgment is GRANTED, and the plaintiffs cross-
. Because the court concludes that plaintiff is allowed no credit, it does not reach issues raised by the parties' briefs regarding the application of Section 203 of the Reform Act and the amount of credit potentially owed plaintiff.
. Section 2 of the Reform Act redesignated the “Internal Revenue Code of 1954” "as heretofore, hereby or hereafter amended” the "Internal Revenue Code of 1986.” § 2, 100 Stat. at 2095. However, references to the operative Internal Revenue Code provisions at issue here will be to Internal Revenue Code of 1954 (26 U.S.C.), unless otherwise indicated.
. See N.L.R.B. v. United Food & Commercial Workers Union, Local 23, 484 U.S. 112, 123, 108 S.Ct. 413, 98 L.Ed.2d 429 (1987) ("On a pure question of statutory construction, our first job is to try to determine congressional intent, using 'traditional tools of statutory construction.' ").
. This rule has specifically been applied in construing the investment tax credit transition rules under the Tax Reform Act. See Commonwealth Energy Sys., 235 F.3d at 15; Bell Atlantic Corp. v. United States, 224 F.3d 220, 224 (3d Cir.2000).
. See also United States v. Shabani, 513 U.S. 10, 13, 115 S.Ct. 382, 130 L.Ed.2d 225 (1994) (stating that it is a settled principal of statutory construction that "absent contrary indications, Congress intends to adopt the common law definition of statutory terms”); 2B Norman J. Singer, Sutherland Statutory Construction § 50.04 (6th ed.2000) [hereinafter Sutherland Statutory Construction ] (emphasizing "utility of examining a federal statute with reference to the common law of the various states as it existed at the time the statute was enacted”).
. See also Commissioner v. Jacobson, 336 U.S. 28, 49, 69 S.Ct. 358, 93 L.Ed. 477 (1949) (exemptions "are specifically stated and should be construed with restraint” in light of the purpose of taxing income comprehensively); Espenshade v. United States, 173 Ct.Cl. 828, 354 F.2d 332, 336 (1965).
. See also Roger A. Cunningham, William B. Stoebuck & Dale A. Whitman, The Law of Property 263 (2d ed.1993) (measure of damages is the "major consequence” of the distinction); J.A.
. See, e.g., Dan Cohen Realty Co. v. National Sav. & Trust Co., 125 F.2d 288, 289 (6th Cir.1942) ("There is a sharp and generally recognized distinction between the rights and liabilities created by an executed lease on the one hand and an executory contract to lease on the other.”); Sands v. United States, 198 F.Supp. 880, 883 (W.D.Wash.1960), aff'd sub nom. First Federal Sav. & Loan Ass’n of Bremerton v. United States, 295 F.2d 481 (9th Cir.1961) (drawing distinction between "agreement to lease” and "lease”); Feeley v. Michigan Ave. Nat’l Bank, 141 Ill.App.3d 187, 95 Ill.Dec. 542, 490 N.E.2d 15, 18 (1986) ("An agreement to lease is a contract to formally execute a contract in the future for exclusive possession of lands or tenements for a determinate period.... A lease is generally defined as a contract for exclusive possession of lands, tene-merits or hereditaments for life, for a term of years, or at will, or for any interest less them that of the lessor, usually for a specified rent of compensation.”); Byrd Cos., Inc. v. Birmingham Trust Nat’l Bank, 482 So.2d 247, 253 (Ala.1985) (drawing distinction between “lease" and "agreement to lease” in applying recording statute); Target Stores, Inc. v. Twin Plaza Co., 277 Minn. 481, 153 N.W.2d 832, 840 (1967) (drawing the same distinction and indicating that “[t]he fact that a document covers a building yet to be constructed implies that the transaction is at most an agreement to lease rather than a lease”); Motels of Maryland, Inc. v. Baltimore County, 244 Md. 306, 223 A.2d 609, 612 (1966) (distinguishing between a "contract to lease” and "lease”); Zook v. Zook, 11 Pa. D. & C. 203 (1928) (citing cases from the 1800s and noting that a lack of "present words of demise” distinguishes a lease from "merely an agreement to lease"). Plaintiff notes that a few treatises and cases use the phrase “agreement for lease,” rather than "agreement to lease,” suggesting thereby that the phrase "agreement to lease” is not a well-accepted term of art. See, e.g., John N. Taylor. The American Law of Landlord and Tenant 81 (1879) (referring to an "agreement for a lease"). In the court's view, however, the numerous treatises and cases cited above demonstrate to the contrary. Moreover, it is telling that plaintiff has not cited a single case at common law in which a court has construed any of the relevant phrases— "agreement to lease,” "contract to lease” and "agreement for lease” — to be synonymous with the term "lease.”
. Such a conclusion also would be inconsistent with the legislative histoiy of the 1969 act, which again evidenced an understanding of the distinction between a "contract to lease” and a "lease.” Thus, for example, in explaining the types of "pre-termination property” that would not be subject to the credit repeal, the accompanying Senate Report indicated that "neither the lessor nor the lessee may receive any investment credit with respect to property” where "property is leased after April 18, 1969 (other than pursuant to a binding contract to lease entered into before April 19, 1969).” S.Rep. No. 91-552, at 246 (1969), reprinted in 1969 U.S.C.C.A.N. 2282. In recognizing that leases entered into after the effective date could qualify for the credit if the lease derived from an agreement to lease entered into before that date, the quoted language indicates that Congress not only understood the common law distinction between a "lease” and a "contract to lease,” but also knew that the former type of agreement could spring from the latter.
. Both tax-writing committees, in 1986, certainly were aware that Congress had phased out the credit on two prior occasions. Hearing testimony before those committees, leading up to the passage of the 1986 Code, indeed, highlighted this fact. See Tax Reform Proposals — VII: Hearing before Comm, on Finance, United States Senate, 99th Cong. 120 (1985) (statement of Robert Mercer, Chairman and Chief Executive Officer, Goodyear Tire & Rubber Co.) (discussing the earlier phaseouts); Comprehensive Tax Reform, Part VI: Hearings before House Comm, on Ways and Means, 99th Cong. 5390, 5407-08 (1985) (statement of David I. Margolis, Chairman of the Board, Colt Industries, Inc.) (same). See also Congressional Budget Office, Congress of the United States, Revising the Corporate Income Tax 19-21 (1985) (report to Congress discussing the history of the investment credit, including the two phaseouts).
. See also Hecht Co. v. Bowles, 321 U.S. 321, 326-27, 64 S.Ct. 587, 88 L.Ed. 754 (1944); Lindsey v. Tacoma-Pierce County Health Dep't, 195 F.3d 1065, 1074 (9th Cir.1999); United States v. Maria, 186 F.3d 65, 71 (2d Cir.1999). See generally 2A Sutherland Statutory Construction § 46.06 ("[Wjhen the legislature uses certain language in one part of the statute and different language in another, the court assumes different meanings were intended.”).
. Notably, as originally introduced, section 204(a)(7) used the term "lease" and only later was amended to substitute the phrase "agreement to lease.” Compare H.R. 3838, 99th Cong., 1st Sess. (1985) ("such lessee is obligated to lease the building under a lease entered into before September 26, 1985 ...”) (emphasis added); H.R. 3838, 99th Cong., 2d Sess. (1986) (same) with the Reform Act ("such lessee is obligated to lease the building under an agreement to lease entered into before September 26, 1985 ...”) (emphasis added). Such an amendment, of course, would have been unnecessary had Congress viewed the terms "agreement to lease” and "lease” as interchangeable. Indeed, other lan
. To reach this conclusion requires a bit of deductive logic. As recounted in Kjellstrom, 916 F.Supp. at 905-06, the Congressional Record, in a list entitled "ACRS/ ITC: RULES IN HOUSE BILL AND HOUSE AND SENATE BILLS,” indicates that Merrill Lynch, Sonat Offshore Drilling, Kern River Pipeline and Tri-Cities Sewage were the beneficiaries of the rules listed on page 1-75 of the conference report. 132 Cong. Rec. 26,-638-39 (1986). Four transitional rules were quoted on page 1-75 — the world headquarters
. To be sure, the Supreme Court has "eschewed reliance on the passing comments of one Member ... and casual statements from the floor debates.” Garcia v. United States, 469 U.S. 70, 76, 105 S.Ct. 479, 83 L.Ed.2d 472 (1984) (citations omitted). Here, however, we are faced not with a single, idle statement, but rather a pattern of statements — and one that is consistent not only with the Conference Committee Report’s emphasis on the narrow scope of the transition rules, but also the statute's language itself. Accordingly, in this court’s view, these statements of individual members are an accurate gauge of Congressional intent. See Grove City College v. Bell, 465 U.S. 555, 566-67, 104 S.Ct. 1211, 79 L.Ed.2d 516 (1984); Kjellstrom, 916 F.Supp. at 906. See also 2A Sutherland Statutory Construction, § 48.13 ("The statements of individual legislators ... can be given effect if they are consistent with statutory language and other legislative history which justifies reliance upon them as evidence of legislative intent.”).
. At oral argument, the court posed to plaintiff's counsel a series of hypotheticals, asking whether, under plaintiff's theory, the exception would apply to leases executed in the years indicated in the text (i.e., 1969, 1959 and 1899). In each instance, plaintiff's counsel unabashedly answered that it would.
. Striving for evidence to support its claim that Congress used the terms "lease” and "agreement to lease” interchangeably, plaintiff latches onto a portion of the legislative history of section 204(a)(3) of the Reform Act, which provision, like section 204(a)(7), discussed above, provided investment credit transitional relief to a taxpayer subject to "an agreement to lease.” § 204, 100
The bill provides transitional relief for certain situations where written binding contracts require the construction or acquisition of property, but the contract is not between the person who will own the property and the person who will construct or supply the property. This rule applies to written service or supply contracts and agreements to lease entered into before March 2, 1986 (January 1, 1986, in the case of the investment tax credit). An example of a case to which this rule would apply would be lease agreements under which a grantor trust is obligated to provide property under a finance lease (to the extent continued under the bill).
Id. This passage makes apparent not only that the report’s reference to "lease agreements” is to an "agreement to lease,” but also that Congress used the term "agreement to lease” in section 204(a)(3) in a factual setting typical for that term — that is, where an individual agrees to lease in the future a building that has yet been constructed or acquired. Accordingly, far from supporting plaintiff's position, this snippet from the legislative history of the Reform Act actually constitutes further evidence that there is a real and meaningful distinction between a "lease” and an "agreement to lease.”
. The district court decision in Kimberly-Clark Tissue Co., supra, essentially adopted the same reasoning as the Ninth Circuit and, in this court's view, suffers from the same flaws.
. To be sure, in drafting the transition rules, Congress did focus on taxpayers who had made economic decisions relying upon the existence of the investment tax credit. But, it effectuated that intent not directly, by imposing a separate reliance requirement in the statute, but indirectly, by drafting eligibility requirements that logically could be met only by taxpayers who had reasonably relied upon the existence of the credit. In contrast, having construed that statutory language broadly in a way that clearly defeated Congress’ intent, the Ninth Circuit then proceeded to reintroduce the reliance concept as a separate and distinct nonstatutory gloss on its otherwise broad interpretation.
. On this point (and others), the court agrees with the district court in Kjellstrom, which stated:
Nothing in the legislative history indicates that Congress intended to provide an exemption for all taxpayers who had leased world headquarters buildings prior to 1985 and as early as 1974. To read the statute this broadly would undermine Congress's intent as it is evidenced in the legislative history to the Tax Reform Act.
916 F.Supp. at 907.