Appeal by petitioner from Lewis, Judge. Judgment entered 14 July 1978 in Superior Court, Buncombe County. Heard in the Court of Appeals 21 August 1978.
Martin (Robert M.), Judge. Judges Parker and Webb concur.
Respondent Blue Ridge Broadcasting Corporation operates radio stations WFGW-AM and WMIT-FM. In 1967 respondent was notified by petitioner that, because it was a non-profit corporation exempt from federal income taxation under § 501(c)(3) of the Internal Revenue Code, it was exempt from the application of the North Carolina Employment Security Act. At the time respondent received this notice, it had an employer's account with petitioner in the amount of $5,006.19, and was entitled to a cumulative experience rating of .9%. By action of the 1971 General Assembly, respondent's exemption was terminated as of 1 January 1972. Respondent, for reasons unknown, did not receive notification or otherwise become aware of the termination of its exemption until petitioner made an administrative determination of that fact and served a notice of demand and payment upon respondent. At this time, respondent's prior credit balance with petitioner was disregarded and respondent was assigned the highest assignment rate for contributions under the Act, a rate of 2.7%, three times higher than its prior rating of .9%. Respondent, while conceding that it was properly liable for assessments for contributions after 1 January 1972, contended to petitioner that it should have both its prior credit balance and its previous experience rating taken into consideration in determining the rate of contribution to be assessed after the termination of its exemption.
Petitioner disagreed, and on appeal from the ruling of the full Commission to the Superior Court, the Superior Court ruled in favor of respondent and remanded the cause to petitioner for further proceedings consistent with its ruling. Petitioner appealed to this Court, arguing that strict construction of the admittedly complex statutory provisions pertinent to the question before us compels the result reached by the Commission.
The question posed for our resolution is, therefore, whether respondent, solely by reason of its exercising the statutory exemption from the North Carolina Employment Security Act for the period 1 September 1967 through 31 December 1971, ceased to be an employer for the purpose of the Act, requiring petitioner to disregard its prior credit balance and experience rating, even though the business and employing acts of respondent continued without interruption during the period of exemption. We conclude that petitioner is in error, and affirm the ruling of the Superior Court. The answer to this question lies in a careful reading of the applicable statutes.
N.C. Gen. Stats. § 96-8(4) (as in effect prior to 1 January 1972) defined an "employing unit" as any individual or organization (including a broad list of categories) which had in its employ one or more individuals performing services for it within this State. N.C. Gen. Stats. § 96-8(5) (as in effect prior to 1 January 1972) defined an "employer" as being any employing unit which, within a current or preceding calendar year and which in each of 20 different weeks within such calendar year (whether or not the weeks were consecutive) had in employment four or more individuals. Employment is defined in N.C. Gen. Stats. § 96-8(6) (a through g), where lists of activities are characterized either as being included in (N.C. Gen. Stats. § 96-8(6)(a-f)) or excluded from (N.C. Gen. Stats. § 96-8(6)(g)) the term "employment." All activities included as "employment" require the existence of "the legal relationship of employer and employee" between an employing unit and the individual performing services for that employing unit (N.C. Gen. Stats. § 96-8(6)(a)). N.C. Gen. Stats. §§ 96-9(a)(1) and 96-9(b)(1) provide that contributions are due from employers with respect for wages paid for employment. N.C. Gen. Stats. § 96-8 provides initially that the defined terms in that section are used in that meaning unless the context clearly requires otherwise. Therefore, by reading N.C. Gen. Stats. §§ 96-8(4),
96-8(5), 96-8(6), 96-9(a)(1) and 96-9(b)(1) together, it may be deduced that (for the purposes of the statute prior to 1 January 1972) when an employing unit has four or more individuals in its employ, and the services performed by those individuals constituted employment as defined by the Chapter, the employing unit became an employer and thus becomes subject to the provisions of the Chapter.
N.C. Gen. Stats. § 96-9(c)(5) provides that if an employer subject to Chapter 96 "ceases to be such an employer," his account shall be closed and that account "shall not be used in any future computation of such employer's rate." An employer ceases to be an "employer subject to this Chapter" when that employer "has not had any individuals [four or more prior to 1 January 1972] in employment for a period of two consecutive calendar years," N.C. Gen. Stats. § 96-11(d).
As stated above, the term "employer" by its definition and use in Chapter 96 means an "employing unit" which is subject to the provisions of the Chapter. Yet, N.C. Gen. Stats. §§ 96-9(c)(5) and 96-11(d) both employ the phrase "employer subject to this Chapter" as if there were another type of "employer." To use the defined term "employer" (as contemplated by N.C. Gen. Stats. § 96-8) in the context of these two provisions leads to redundant and ambiguous expressions. Additionally, N.C. Gen. Stats. § 96-11(d), when it uses the term "employment," refers in one place specifically to the statutory definition, but is silent as to whether the other uses of the term are to be made with reference to the definition. Either usage yields an intelligible meaning, but under the circumstances (some specific references to defined terms as defined by statute and some uses of the same terms without such references in the same section) we cannot say which meaning is intended for which particular term in the absence of specific references. Arguably, "context clearly requires" the interpretation of a term in its common sense where, in a given section, some uses of that term specifically refer to the statutory definition and some do not. There is no clear line of demarcation between the use of the defined terms and the use of general terms in the statute.
Petitioner has argued that the difficulty in interpreting this statute derives from its technical nature; we are of the opinion that the difficulty ...