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Statutory interpretation refers to the process by which a court looks at a statute and determines what it means. A statute, which is a bill or law passed by the legislature, imposes obligations and rules on the people. Statutes, however, although they make the law, may be open to interpretation and have ambiguities. Statutory interpretation is the process of resolving those ambiguities and deciding how a particular bill or law will apply in a particular case.
Assume, for example, that a statute mandates that all vehicles must be registered with the department of motor vehicles. If the statute does not define vehicles, then it will have to be interpreted if questions arise. A person driving a motorcycle might be pulled over and the police may try to fine him if his motorcycle is not registered with the DMV. If that individual argued to the court that a motorcycle is not a "vehicle," then the court would have to interpret the statute to determine what the legislature meant by vehicle and whether the motorcycle fell within that definition and was covered by the statute.
There are numerous rules of statutory interpretation. The first rule and most important rule is the rule dealing with the statute's plain language. This rule essentially states that the statute means what it says. If, for example, the statute says "vehicles," then the court is going to assume it means vehicles and not "planes" or something else.
Other rules of statutory interpretation dictate that the court first look within the "four walls" of the statute to interpret it. This means that if it didn't define vehicle in the particular sentence, but it defined it four sentences up or on a different paragraph or page in the statute, then the court will apply the meaning that it used elsewhere. In other words, the language used is assumed to mean the same thing throughout the whole piece of legislation.
Other rules also apply to guide the court in statutory interpretation. For example, the court will use generally accepted definitions, so if every other statute the legislature has ever written defines vehicle one way, the new statute will also define vehicle in that same way. The court will also look to the legislative history — the discussion surrounding the passage of the bill or law — to determine meaning. In general, this and all other steps of the process of interpreting a statute are designed to ensure that the statute is enforced and applied in the way in which the legislature intended.