Opinion
Questions Propounded by the House in an Order Dated March 14, 1975.
Answered March 28, 1975.
Appeal from the House of Representatives to the Justices of the Supreme Judicial Court.
ARMAND A. DUFRESNE, Jr. RANDOLPH A. WEATHERBEE CHARLES A. POMEROY SIDNEY W. WERNICK JAMES P. ARCHIBALD THOMAS E. DELAHANTY
HOUSE ORDER PROPOUNDING QUESTIONS State of Maine In House March 13, 1975.
Whereas, it appears to the House of Representatives of the 107th Legislature that the following are important questions of law and that the occasion is a solemn one; and
Whereas, it is the desire of the 107th Legislature to enact legislation to fund a Spruce Budworm Control Program for the calendar year 1975; and
Whereas, there is pending before the House of Representatives of the 107th Legislature a bill entitled "AN ACT Appropriating Funds for the State Share of the Spruce Budworm Control Program and Imposing a Tax on Forest Lands for Spruce Budworm Control," House Paper No. 560, Legislative Document No. 689, as amended by Committee Amendment "A" of the Committee on Appropriations and Financial Affairs (Filing No. H-62), which Committee Amendment has been adopted by the House; and
Whereas, Article IX, Section 8 of the Constitution of the State of Maine requires that taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally according to the just value thereof; (except that certain specified types of real estate may be valued as to current use and in accordance with legislative conditions); and
Whereas, the constitutionality of the proposed bill as amended or in the alternative without the Committee Amendment has been questioned as it relates to that Section of the Constitution; and
Whereas, it is important that the Legislature be informed as to the answers to the important and serious legal questions hereinafter raised; now, therefore, be it
Ordered, that the Justices of the Supreme Judicial Court are hereby respectfully requested to give to the House, according to the provisions of the Constitution on its behalf, their opinion upon the following questions, to wit:
Question No. 1: Would the provisions of Legislative Document No. 689 (Exhibit A) as amended by Committee Amendment "A" (Exhibit B) an Act now pending before the House of Representatives of the 107th Legislature if enacted into law unconstitutionally apportion and assess a tax upon real estate in violation of Article IX, Section 8 of the Constitution of the State of Maine?
Question No. 2: If the answer to the first question is in the affirmative, would the provisions of Legislative Document No. 689 (Exhibit A), if enacted into law without Committee Amendment "A" (Exhibit B), unconstitutionally apportion and assess a tax upon real estate in violation of Article IX, Section 8 of the Constitution of the State of Maine?
Question No. 3: If the provisions of Legislative Document No. 689 (Exhibit A) with or without Committee Amendment "A" (Exhibit B) do not violate Article IX, Section 8 of the Constitution of the State of Maine is the classification of persons subject to the tax in violation of the Constitution of the State of Maine?
EXHIBIT A (EMERGENCY) ONE HUNDRED AND SEVENTH LEGISLATURE
Legislative Document No. 689
H.P. 560 House of Representatives, February 18, 1975
On Motion of Mr. Peterson of Windham, referred to the Committee on Appropriations and Financial Affairs. Sent up for concurrence and ordered printed.
EDWIN H. PERT, Clerk
Presented by Mr. McBreairty of Perham.
Cosponsors: Mr. Garsoe of Cumberland and Mr. Powell of Wallagrass Plantation.
STATE OF MAINE IN THE YEAR OF OUR LORD NINETEEN HUNDRED SEVENTY-FIVE AN ACT Appropriating Funds for the State Share of the Spruce Budworm Control Program and Imposing a Tax on Forest Lands for Spruce Budworm Control.Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, a severe outbreak of spruce budworm has developed in the forests of Maine, threatening the destruction of one of Maine's outstanding natural resources, threatening further destruction by fire and damage to wildlife and other environmental damage, and threatening the economy and employment of the State; and
Whereas, the following legislation is vitally necessary to control this outbreak so as to save the 3,500,000 acres of Maine forest to be sprayed and the other Maine forest lands which are vulnerable to the spread of this infestation; and
Whereas, in the judgment of this Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine, as follows:
Sec. I. 36 M.R.S.A. c. 365 is enacted to read:
CHAPTER 365 FOREST LANDS
§ 2701. Excise tax
The owners of parcels consisting of more than 500 acres of forest land, including timber and grass rights in public reserved lots, within the State, which are subject to mandatory classification as forest land pursuant to chapter 105, subchapter 11-A, the Tree Growth Tax Law, shall be subject to an excise tax on such parcels of forest land for the year 1975 only. The tax rate per acre shall be determined by dividing the sum of $3,331,581 by the number of acres of such forest land on April 1, 1975. In cases of divided ownership of such forest land, the owner or owners of timber and grass rights, or of timber rights, shall be subject to such tax. The proceeds of such tax shall be used by the Bureau of Forestry for spruce budworm control and associated research.
§ 2702. Determination of tax; notice to owners
The Director of Property Taxation on or before the first day of August, 1975, shall determine the amount of such tax on the owner or owners of each such parcel of forest land, based on the status of the land on April 1, 1975, and shall give notice thereof to the owner or owners upon which the tax is levied or to their authorized agents.
§ 2703. Due date; payment to Director of Property Taxation
This tax shall be payable on or before September 30, 1975, to the State Director of Property Taxation, who shall pay over all receipts from such tax to the General Fund.
§ 2704. Abatement
Any owner or owners aggrieved by the action of the State Director of Property Taxation in determining the tax on owners of such forest lands, through error or mistake in calculating the same, may apply for abatement of any such excessive tax within 60 days of the date of notice of such tax, and if, upon rehearing and reexamination, the tax appears to be excessive through such error or mistake, the said Director of Property Taxation may thereupon abate such excess.
§ 2705. Payment
Whenever any owner or owners of such forest land shall fail to pay any tax due under this chapter within the time limited, the Attorney General shall enforce payment of such tax by civil action against the owner or owners for the amount of such tax in either the Superior Court in Kennebec County or in the District Court in the division in which such owner or owners has his residence or established place of business.
§ 2706. Condition of commitment of federal funds
The appropriation and tax levied herein shall be conditioned upon receipt of the commitment of the U.S. Government, on or before May 1, 1975, to contribute $6,562,500 to this program.
Sec. 2. Appropriation. There is hereby appropriated from the General Fund the sum of $6,663,162 to be expended by the Director of the Bureau of Forestry, or his agents, for spruce budworm control and associated research. The rest of the funds are to be supplied from the balance of funds in the spruce budworm account and from the Federal Government. Any unexpended balances of this appropriation and funds appropriated by the private and special laws of 1973, chapter 194, shall not lapse, but shall remain a continuing carrying account until June 30, 1976.
Emergency clause. In view of the emergency cited in the preamble, this Act shall take effect when approved.
FISCAL NOTE
The appropriation of $6,663,162 set forth in section 2 will be offset by the $3,331,581 proceeds of the tax on forest landowners set forth in section 1. Therefore, the net revenue effect will be $3,331,581.
STATEMENT OF FACT
The purpose of this Bill is to fund the spruce budworm control program for the calendar year 1975. Funding is 50% Federal (except for certain research expenses) and the balance divided equally between the State and forest landowners of parcels of forest land in excess of 500 acres as classified under the Tree Growth Tax Law. This Bill presents the only available course to deal with a critical and immediate threat to the forests of Maine and to the reliance of the economy of Maine on this resource.
EXHIBIT B STATE OF MAINE HOUSE OF REPRESENTATIVES 107TH LEGISLATURE
COMMITTEE AMENDMENT "A" to H.P. 560, L.D. 689, Bill, "AN ACT Appropriating Funds for the State Share of the Spruce Budworm Control Program and Imposing a Tax on Forest Lands for Spruce Budworm Control."
Amend said Bill in section 1 by striking out all of that part designated "§ 2701." and inserting in place thereof the following:
`§ 2701. Excise tax The owners of parcels consisting of more than 500 acres of forest land, including timber and grass rights in public reserved lots, within the State, which are classified as forest land pursuant to chapter 105, sub-chapter II-A, the Tree Growth Tax Law, shall be subject to an excise tax on such parcels of forest land for the year 1975 only. The tax rate shall be 30¢ per acre. In cases of divided ownership of such forest land, the owner or owners of timber and grass rights, or timber rights, shall be subject to such tax. The proceeds of such tax shall be used by the Bureau of Forestry for spruce budworm control and associated research.
§ 2701-A. Municipal assessors certification to State Tax Assessor The assessors of each municipality shall, on or before the first day of September, 1975, certify to the Director of Property Taxation the name and address of each owner of a parcel of forest land within said town, based on its April 1, 1975 status, consisting of more than 500 forest land acres and classified as forest land pursuant to the Tree Growth Tax Law and the forest land acreage of each such parcel.'
Further amend said Bill in section 1 by striking out in the 3rd line (2nd and 3rd lines of L.D.) of that part designated "§ 2702." the underlined date "August, 1975" and inserting in place thereof the following `June, 1975 with respect to the unorganized territory, and the first day of November, 1975 with respect to municipalities.'
Further amend said Bill in section 1 by striking out in the 2nd line (same in L.D.) of that part designated "§ 2703." the underlined date "September 30, 1975" and inserting in place thereof the following `July 31, 1975 with respect to the unorganized territory, and December 31, 1975 with respect to municipalities'
Further amend said Bill in section 1 by striking out in the 7th line (6th line in L.D.) of that part designated "§ 2704." the underlined words "rehearing and"
Further amend said Bill in section 1 by inserting after that part designated "§ 2704." the following:
`§ 2704-A. Interest and penalty Any such tax which is not paid when due shall accrue interest at the rate of 8% per year on the unpaid balance from time to time until paid and the person or persons subject to such tax, if not paid within 30 days of the due date, shall be liable for a penalty of $25 or 5% of the unpaid tax, whichever is greater.'
Further amend said Bill in section 1 by striking out all of that part designated "§ 2705." and inserting in place thereof the following:
`§ 2705. Payment Whenever any owner or owners of such forest land shall fail to pay any tax, interest and penalty due under this chapter within the time limited, the Attorney General shall enforce payment of such amount by civil action against the owner or owners for the amount of such tax in either the Superior Court in Kennebec County or in the District Court in the division in which such owner or owners has his residence or established place of business.'
Further amend said Bill in section 1 by striking out in the last line (same in L.D.) of that part designated "§ 2706." the amount "$6,562,500" and inserting in place thereof the following`$3,750,000'
Further amend said Bill in section 2 by striking out in the 2nd line (same in L.D.) the following underlined figure "$6,663,162" and inserting in place thereof the following `$3,850,000'
Further amend said Bill in section 2 by striking out in the last and next to the last lines (last line in L.D.) the following word and dates "until June 30, 1976" and inserting in place thereof the following for these purposes'
Further amend said Bill by inserting after section 2 the following:
`Sec. 3. Appropriation. There is appropriated from the General Fund to the Bureau of Property Taxation the sum of $6,350 to administer the excise tax. The breakdown shall be as follows:
1974-75 1975-76 PROPERTY TAXATION, BUREAU OF Personal Services $2,425 $2,425 All Other 500 1,000 $2,925 $3,425'
Further amend said Bill by striking out all of the Fiscal Note and inserting in place thereof the following"
`Fiscal Note
The appropriation of $3,856,350 set forth in section 2 and section 3 will be offset by the $2,850,000 proceeds of the tax on forest landowners set forth in section 1, therefore the net cost to the General Fund will be $1,006,350.'
Statement of Fact
The purpose of this amendment is to include technical amendments requested by the Bureau of Forestry and the Bureau of Property Taxation. The following is a list of their proposed amendments:
The first amendment relates the tax to classified land as determined by the municipalities.
The 2nd amendment states the 30¢ per acre tax rate so as to be more specific.
The 3rd amendment provides for the town assessors to certify to the State Tax Assessor the information necessary for application of the tax.
The 4th amendment changes the date for the determination of the tax to provide time to administer this program.
The 5th amendment changes the payment dates to provide the time to administer this program.
The 6th amendment eliminates language which is not applicable.
The 7th amendment provides for interest and penalty for nonpayment.
The 8th amendment changes the wording to include interest and penalties.
The 9th amendment adjusts the amount of the federal commitment to match the state program which has been reduced because of the limited availability of chemicals.
The 10th amendment makes the corresponding change to the state appropriation.
The 11th amendment provides that this appropriation shall remain a continuing carrying account.
The 12th amendment adds an appropriation to cover the funds for administrative expense by the Bureau of Property Taxation.
The last amendment amends the fiscal note consistent with the reduction of the program in light of the limited availability of chemicals and funds.
Reported by the Committee on Appropriations and Financial Affairs.
Reproduced and distributed under the direction of the Clerk of the House. 3/11/75
(Filing No. H-62) ANSWERS OF THE JUSTICES
To the Honorable House of Representatives of the State of Maine:
In compliance with the provisions of Section 3 of Article VI of the Constitution of Maine, we, the undersigned Justices of the Supreme Judicial Court, have the honor to submit the following answers to the questions propounded on March 14, 1975.
QUESTION NO. 1: Would the provisions of Legislative Document No. 689 (Exhibit A) as amended by Committee Amendment "A" (Exhibit B) an Act now pending before the House of Representatives of the 107th Legislature if enacted into law unconstitutionally apportion and assess a tax upon real estate in violation of Article IX, Section 8 of the Constitution of the State of Maine?
ANSWER: We answer in the negative.
If enacted into law, Legislative Document No. 689, as amended by Committee Amendment "A", would not violate the provisions of Article IX, Section 8 of the Constitution of Maine. It imposes an excise tax rather than a property tax upon real estate; therefore, Article IX, Section 8, which prescribes limitations only as to "taxes upon real and personal estate" is inapplicable. State v. F.H. Vahlsing, Inc., 147 Me. 417, 88 A.2d 144 (1952); see: Opinion of the Justices, 155 Me. 30, 46, 152 A.2d 81 (1959).
There is ambiguity in the legislative document under study insofar as it contains express language having both excise and property tax connotations and omits express language delineating substantive elements more suggestive of intention to impose an excise, rather than a property, tax. Concretely, although in express language the tax is labelled an "excise" tax, other language states expressly that the tax is imposed "on . . . parcels of . . . land." Further, there is a failure to specify in express terms that the tax is imposed on the
"performance of an act, the engaging in an occupation or the enjoyment of a privilege" —
these being the types of subject-matter upon which an excise tax is normally imposed. See: State v. Western Union Telegraph Co., 73 Me. 518, 531 (1882); Opinion of the Justices, 123 Me. 573, 577, 578, 121 A. 902 (1923); Opinion of the Justices, 155 Me. 30, 46, 152 A.2d 81 (1959). Hence, notwithstanding the "excise" label, the textual language delineates substantive matters indicative of a property tax on real estate rather than an excise tax on activity, or the engaging in an occupation or the enjoyment of a privilege.
Despite these deficiencies of draftsmanship we are satisfied that Legislative Document No. 689, as amended, manifests legislative intention to impose, and may reasonably be interpreted to embody substantive provisions adequate to effectuate the imposition of, an excise tax.
The "Statement of Fact" explicitly refers to the "forests of Maine" as a "resource" important to the "economy" of the State. Throughout the proposed legislation the references to "forests" as an important "economic resource" of Maine are linked with the Tree Growth Tax Law — 36 M.R.S.A. Chapter 105, subchapter II-A — which defines "forest land" as
"land used primarily for growth of trees and forest products"
and excludes as "forest land" that which is "unsuitable for growing a forest type" — i.e.,
". . . a stand of trees characterized by the predominance of one or more groups of key species which make up 75% or more of the sawlog volume of sawlog stands, or cordwood in poletimber stands, or of the number of trees in seedling and sapling stands."
In this manner, the legislative document focuses, albeit implicitly, upon the commercial activity of producing trees and forest products.
We recognize that the basic subject-matter of the Tree Growth Tax Law relates to property, rather than excise, taxation insofar as that law "implements the 1970 amendment of Section 8 of Article IX of the Maine Constitution providing for valuation of timberland and woodlands according to their current use . . ."
The Tree Growth Tax Law, however, makes abundantly clear that in many of its provisions it is concerned with the "operation" of forest lands "on a sustained yield basis" and seeks to "promote better forest management" as well as the "planting, cultural and continuous growth of forest products" in relation to the "potential for annual wood production . . . ." See: 36 M.R.S.A. § 572.
Our present interest is in these aspects of the Tree Growth Tax Law highlighting that the enterprise of commercial forestry, as conducted in Maine, is a "unique economic . . . resource" of this State.
The references in the instant legislative document to the Tree Growth Tax Law, as that law treats with forestry as a commercial venture, have the legal effect of assisting in identifying the activity of commercial forestry as the subject-matter upon which the tax, expressly designated an "excise" tax, is intended to be imposed.
Such concentration upon commercial forestry activity combined with the express identification of the tax as an "excise" tax is sufficient in our view to establish that the tax imposed is an excise tax on the commercial activity of using land for the production of trees and forest products.
That the rate of the proposed excise tax is specified by reference to land acreage does not destroy the "excise" nature of the tax. Land acreage has rational relationship to the activity on which the excise tax is imposed since, first, land as such is inextricably involved in the production of forest products, and, second, a tax-rate determination in terms of acres of land, in light of pecularities inherent in commercial forestry, facilitates efficient administration of the tax.
QUESTION NO. 2: If the answer to the first question is in the affirmative, would the provisions of Legislative Document No. 689 (Exhibit A), if enacted into law without Committee Amendment "A" (Exhibit B), unconstitutionally apportion and assess a tax upon real estate in violation of Article IX, Section 8 of the Constitution of the State of Maine?
ANSWER: Since our answer to Question No. 1 is in the negative, the question is inapplicable.
QUESTION NO. 3: If the provisions of Legislative Document No. 689 (Exhibit A) with or without Committee Amendment "A" (Exhibit B) do not violate Article IX, Section 8 of the Constitution of the State of Maine is the classification of persons subject to the tax in violation of the Constitution of the State of Maine?
ANSWER: We answer in the negative.
We interpret this question to be directed to whether limiting the class of persons subject to the proposed tax to owners of "parcels consisting of more than 500 acres of forest land", insofar as said land is
"subject to mandatory classification as forest land pursuant to . . . the Tree Growth Tax Law",
is an invidious discrimination contravening the "equal protection of the laws" clause of Article I, Section 6-A of the Constitution of Maine.
We find no such invidious discrimination. The classification bears a rational relationship to a primary purpose of the tax, achieving manageable harvesting of the spruce-fir forests as necessary for the forest industry, and, in addition, is designed to facilitate efficient administration of the tax by avoiding the gross burdens which would result if every owner of a small tract of land used primarily for the growth of trees were made subject to the tax.
Dated at Portland, Maine, this twenty-eight day of March, 1975.
Respectfully submitted: