Opinion
No Number in Original
May 5, 1959, Decided
HOUSE ORDER PROPOUNDING QUESTIONS
STATE OF MAINE
HOUSE OF REPRESENTATIVES
99th LEGISLATURE
WHEREAS, a bill entitled "An Act Providing for Severance Taxation of Certain Natural Resources," (House Paper 902, Legislative Document 1271) is pending before the 99th Legislature and it is important that the Legislature be informed as to the constitutionality of the proposed bill; and
WHEREAS, it appears to the members of the House of the 99th Legislature that certain provisions of the bill present important questions of law and the occasion is a solemn one;
NOW, THEREFORE, Be it Ordered, that in accordance with the provisions of the Constitution of the State, the Justices of the Supreme Judicial Court are hereby respectfully requested to give this Legislature their opinion on the following questions:
1.
Do any of the provisions of section 12 of Legislative Document 1271 assess a tax upon real or personal estates without regard to apportionment according to the just value of such real or personal estate in violation of section 8 of Article IX of the Constitution of Maine?
2.
Do any of the provisions of section 5 of Legislative Document 1271 assess a tax upon real or personal estates without regard to apportionment according to the just value of such real or personal estate in violation of Section 8 of Article IX of the Constitution of Maine?
3.
Do any of the provisions of Sections 2, 4 and 5 of Legislative Document 1271 amount to a suspension of the sovereign power to tax in violation of Section 9 of Article IX of the Constitution of Maine?
4.
Do the provisions of Section 4 of Legislative Document 1271 delegate legislative power to the Commissioner of Inland Fisheries and Game in violation of Section 1 of Part First of Article IV of the Constitution of Maine?
5.
Would House Paper 902, Legislative Document 1271 "An Act Providing for Severance Taxation of Certain Natural Resources," if enacted by the Legislature, be constitutional?
HOUSE OF REPRESENTATIVES
Speaker laid before the House and on Motion of Mr. Maxwell of Jay
Apr 17, 1959 passed.
Harvey R. Pease
Clerk
HOUSE OF REPRESENTATIVES
Read and On Motion of Mr. Maxwell Of Jay
APR. 16, 1959
Tabled Pending passage. Tomorrow assigned.
Harvey R. Pease
Clerk
Name: Maxwell
Town: Jay
Reproduced and distributed under the direction of the Clerk of the House.
A true copy. Attest: HARVEY R. PEASE
Clerk of the House
Transmitted by Director of Legislative Research pursuant to joint order.
NINETY-NINTH LEGISLATURE
Legislative Document No. 1271
H. P. 902 House of Representatives, March 17, 1959
Referred to the Committee on Taxation. Sent up for concurrence and 1,000 copies ordered printed.
HARVEY R. PEASE, Clerk
Presented by Mr. Maxwell of Jay.
STATE OF MAINE IN THE YEAR OF OUR LORD NINETEEN HUNDRED FIFTY-NINE
AN ACT Providing for Severance Taxation of Certain Natural Resources.
Be it enacted by the People of the State of Maine, as follows:
Sec. 1. R. S., c. 16-A, additional. The Revised Statutes are amended by adding a new chapter to be numbered 16-A, to read as follows:
Chapter 16-A.
Severance Taxation of Natural Resources.
Sec. 1. Purpose. It is the intent of this chapter to provide equitable taxation of the natural resources of the State, utilizing tax measures consistent with conservation of such resources, to the end that the lands in the State shall continue to furnish increasing natural resource products, and the towns in which such lands lie shall receive just tax revenues from such lands.
Sec. 2. Property exempt from taxation. All real property taxed under the provisions of section 5 shall be exempt from taxes imposed under chapter 91-A, except as to such taxes as may have been previously levied.
Sec. 3. Forest crop land determined.
II. Upon the filing of such petition the commissioner shall set the matter for public hearing at such time and place as he may determine, but not later than one year from the date of such filing. Notice of the time and place of the hearing and a description, as the commissioner deems advisable, of the property requested to be approved as "Forest Crop Land" shall be given to the owner of such land and to the assessor of the municipality in which it is situated, by mail at least 30 days before the day of hearing. In addition, a copy of such notice shall be published once a week for 3 consecutive weeks in such newspapers as the commissioner shall deem appropriate, the first publication to be at least 30 days before the day of hearing. The hearing may be adjourned from time to time and no notice of the time and place of the adjourned hearing need be given, except an announcement thereof by the presiding officer at the hearing at which the adjournment is had.
III. After hearing all the evidence offered at the hearing and after making such independent investigation as he sees fit, the Forest Commissioner shall make a finding of fact and make and enter an order accordingly. If the Commissioner finds that the facts give reasonable assurance that a stand of merchantable
of the county in which the land is located, whose estimate shall be final, and the cost of the estimate shall be borne jointly by the Forest Commissioner and the owner. The owner upon the completion of the estimate shall pay the severance tax on the stumpage in the same manner as if the stumpage had been cut. The owners by such contact consent that the public may hunt and fish on such lands subject to such regulations as the Commissioner of Inland Fisheries and Game may prescribe.
Sec. 5. Taxation.
I. The assessor of each municipality on making up the tax list each year shall enter as to each forest crop land description the words "Forest Crop Land" which shall be a sufficient designation that the land described is subject to this chapter. Such land shall thereafter be assessed as provided. No tax shall be levied on forest crop land except the taxes provided in this chapter, except that any buildings located on forest crop land shall be assessed as personal property, subject to all laws and regulations for the assessment and taxation of such property.
II. Any owner shall be liable for and pay to the treasurer of the municipality on or before January 31st of each year on each such description a sum called the "acreage share" computed at the rate of 10 cents per acre on all lands. If such acreage share shall not be paid by January 31st to the treasurer of the municipality, it shall be subject to interest at the rate of 1% per month or fraction thereof from January 1st preceding. Taxes levied under this chapter shall be collected in the same manner as are municipal taxes on real estate under chapter 91-A.
of such land as forest crop land.
Sec. 6. Forestation.
II. Within 30 days after completion of cutting on any land description, but not more than one year after filing of the notice of intention to cut,
Sec. 7. Withdrawal of forest crop land.
I. The Forest Commissioner shall once in 5 years, or on application of the owner of any forest crop land or the officers of the municipality in which the land is located, or on his own motion at any time cause an investigation to be made and a hearing had as to whether any forest crop land shall continue under this chapter. If on such hearing after due notice and opportunity to be heard by the municipality and the owner, the commissioner shall find that the land does not meet the requirements of section 3, the entry of such land shall be cancelled and copies of the order of withdrawal specifying the description shall be filed with the commissioner, the State Tax Assessor, the clerk of the municipality and the register of deeds of the county in which the land lies, and none of the provisions of this chapter relating to forest crop land shall thereafter apply except so far as may be necessary to collect any previously levied severance tax.
II. If at any time the owner shall make use of the land for anything other than forestry, the commissioner shall issue an order of withdrawal and the owner shall be liable for the tax provided in subsection IV.
purchaser of forest crop land declines to certify his intention to continue the practice of forestry thereon, such action shall constitute a cause for cancellation of the order of entry.
Sec. 8. Taxation after withdrawal. When any land ceases to be forest crop land, by virtue of an order of withdrawal issued by the Forest Commissioner, taxes thereafter levied thereon are payable and collectible in the same manner as similar land not governed by this chapter.
Sec. 10. Forest crop land information. The Forest Commissioner shall annually publish and distribute information concerning the practice of forestry on forest crop land and the method of taxation of forest crop land provided in this chapter.
Sec. 11. Forest crop land not in a municipality. With respect to forest crop land not located in a municipality the State Tax Assessor shall exercise the authority and perform the duties of those municipal officers herein specified, except that the State Tax Assessor shall enforce the collection of delinquent taxes under this chapter in accordance with his authority for the collection of delinquent taxes provided under chapter 16.
Sec. 12. Severance tax on resource products. Taxes levied for the privilege of severing the resource products specified under this chapter from the soil of this State are predicated on the quantity of product severed, and shall be paid at the rates provided in this section. The word "severed" shall mean the taking from the soil of this State any of the products specified in this chapter in any manner whatsoever.
SCHEDULE OF TAX RATES
On sand, gravel or stone
1c per ton
On pulpwood
50c per cord
On soft or hardwood lumber
$ 1 per thousand board feet
All metallic or non-metallic minerals, or other
natural resources except sand, gravel, stone,
pulpwood and soft or hardwood lumber 3c per ton
If any person for any tax under this section shall ship or transport resource products, or any part thereof, out of the State, without making a sale then the measurement thereof in the condition or form in which they existed immediately at the point of severance, shall be the basis for the assessment of the tax imposed by this section.
Sec. 13. Owner primarily liable for tax. The tax hereby levied is primarily assessed against the owner of resource products or against the owner of the land from which such products were severed.
Sec. 14. Out-of-state transportation of resource products. If any person liable for any tax under this chapter shall transport such resource products or any part thereof, out-of-state, without making a sale, then the quantity in the condition or form in which they existed immediately before transportation out-of-state shall be the basis for the assessment of the tax imposed.
Sec. 15. Liability for tax on resource products. Liability for the tax imposed shall apply to any person who shall sever any natural resource products from government or privately owned land. All taxes levied shall be collected by the State Tax Assessor. The State Tax Assessor shall pay all of such collections into the State Treasury to be credited to the general fund.
Sec. 16. Title to resource products in dispute. When the title to any resource products being produced or severed from the soil is in dispute or whenever the purchaser of such products, or any person engaged in the producing or severing of resource products, from the soil, shall be withholding payments on account of litigation or for any other reason such purchaser of such products, or person actually engaged in producing or severing such products, is hereby authorized, empowered and required to deduct from the gross amount thus held the amount of the tax levied, and to make remittance to the State Tax Assessor, as provided by this chapter.
thereto as the State Tax Assessor may require for the proper enforcement of the provisions of this chapter.
All persons engaged in the business of purchasing or manufacturing, in whole or in part, any resource products in this State, shall make and keep for a period of 3 years, a complete and accurate record showing the gross quantity of products purchased, the value thereof, the names of the persons from whom purchased, the time of the purchase, the county in which severed and any other information which the State Tax Assessor may require. Any person failing to make the report required by this section shall be guilty of a misdemeanor and be punished by a fine of not less than $ 100 nor more than $ 500 for each offense.
Sec. 18. Removal of resource products from state. When requested by the State Tax Assessor, all transporters of resource products which are subject to the tax imposed, out of, within or across the State of Maine, shall be required to furnish the State Tax Assessor such information relative to the transportation of such products as may be necessary to carry out the provisions of this chapter.
The State Tax Assessor shall have the authority to inspect
The State Tax Assessor, or his duly authorized agent, shall have the right and authority to assess and collect any severance tax found to be due and unpaid, at the point of removal from the State, upon all resource products found being removed from the State and shall assess, in addition to the tax found due, interest at the rate of 6% per annum, together with damages and penalties in an amount not to exceed $ 500, and not to be less than $ 100, upon any severer, producer, owner, purchaser or transporter, except interstate commerce carriers, found to be removing such products from the State.
In cases of interstate commerce carriers, duly qualified as such and having a permit to conduct such operations, using bills of lading or waybills prescribed or approved by the Interstate Commerce Commission, such common carriers shall all be required to keep the usual records at offices in this State where such records are usually kept.
purpose of assessing the tax; and to that end, shall have the power to examine witnesses, and if any such witness shall fail or refuse to appear at the request of the State Tax Assessor, or refuse access to books, records, letters, papers, documents and files, said State Tax Assessor shall have the power and authority to proceed as provided by chapter 17.
Sec. 20. Taxes due and payable. The taxes levied shall be due and payable in monthly installments, on or before the 15th day of the month next succeeding the month in which the tax accrues. The person liable for the tax shall, on or before the 15th day of the month make out a return on the form prescribed, showing the amount of the tax for which he is liable for the preceding month, and shall mail or send the same, together with a remittance for the amount of the tax, to the State Tax Assessor. When the total tax for which any person is liable under this chapter does not exceed the sum of $ 10 for any month, a quarterly return and remittance, in lieu of the monthly return may not be made on or before the 15th day of the month next succeeding the end of the quarter for which the tax is due. Such return shall be signed by the taxpayer or a duly authorized agent of the taxpayer.
Sec. 21. Reports. If any person shall fail to remit to the State Tax Assessor, as required, the tax imposed by this chapter for the reason that the owner of such resource products is paying the tax direct to the State Tax Assessor, then such person shall report to the State Tax Assessor, on forms prescribed by him, the kinds and quantities of such products upon which the tax was not paid. Such reports shall be made at the end of each calendar month.
Sec. 2. Effective date. The provisions of this act shall become effective January 1, 1960.
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 April 17, 1959.
QUESTION (1): Do any of the provisions of section 12 of Legislative Document 1271 assess a tax upon real or personal estates without regard to apportionment according to the just value of such real or personal estate in violation of section 8 of Article IX of the Constitution of Maine?
ANSWER: We answer in the negative.
Section 12 concerns itself not with assessment of a tax upon real or personal estate, but with
" a tax imposed upon the performance of an act, the engaging in an occupation or the enjoyment of a privilege.' . . . But our Constitution contains no provision limiting the legislative imposition of excise taxes or, to use the language of the Court: Our Constitution imposes no restriction upon the Legislature in imposing taxes upon business.' State v. Telegraph Co., 73 Me. 518, 531." Opinion of Justices, 123 Me. 573, 577, 578, 121 A. 902. See also State v. Vahlsing, 147 Me. 417, 88 A.2d 144.
QUESTION (2): Do any of the provisions of section 5 of Legislative Document 1271 assess a tax upon real or personal estates without regard to apportionment according to the just value of such real or personal estate in violation of Section 8 of Article IX of the Constitution of Maine?
ANSWER: We answer in the affirmative.
Section 5 does assess a tax upon real estate. Article IX, Section 8 of the Constitution of Maine reads:
"All taxes upon real and personal estate, assessed by authority of this state, shall be apportioned and assessed equally, according to the just value thereof; but the legislature shall have power to levy a tax upon intangible personal property at such rate as it deems wise and equitable without regard to the rate applied to other classes of property."
The purpose of Article IX, Section 8 is to equalize public burdens so that the taxpayer shall contribute to the entire tax burden in proportion to his property. While the Legislature in its wisdom has the authority to exempt from taxation by uniform laws any particular class of property, it does not have the authority, except in the case of intangible personal property, to provide for one mode of assessment as to one class of property and another mode as to another class.
Section 5 of the proposed Act provides for an " acreage share' computed at the rate of 10 cents per acre on all lands" designated as "Forest Crop Land" under the provisions of the Act. This is palpably a tax on real estate and is so designated in Section 5 II. As such it is not assessed according to the just value of the property. Such provision is a violation of the limitation imposed by Article IX, Section 8.
QUESTION (3): Do any of the provisions of Sections 2, 4 and 5 of Legislative Document 1271 amount to a suspension of the sovereign power to tax in violation of Section 9 of Article IX of the Constitution of Maine?
ANSWER: We answer in the affirmative.
Article IX, Section 9 of the Constitution of Maine reads:
"The legislature shall never, in any manner, suspend or surrender the power of taxation."
The Legislature has the ". . . power to determine what kinds and classes of property shall be taxed and what kinds and classes shall be exempt from taxation." Opinion of Justices, 141 Me. 442, 447, 42 A.2d 47, and cases cited.
"No matter what words the Legislature uses, or what attempts it makes to pass an exemption statute without the right to change or repeal it, it cannot bind itself so as to prevent a future change or repeal. The Constitution would make the part which attempts the prevention of a change or repeal, a nullity." (Italics supplied.) Greaves v. Houlton Water Co., 143 Me. 207, 213, 59 A.2d 217.
Section 2, 4 and 5 cannot well be treated separately or apart from the remaining provisions. The Act purports first, to immunize "Forest Crop Land" from legislative power ever to change or repeal its tax status or liability by the device of an asserted contract between the State and the owner through a period of fifty years, unless sooner terminated, and second, to set for the life of such contract a tax, designated "acreage share," on the land without regard to just value. The Legislature cannot so suspend or surrender its power to tax under the Constitution.
QUESTION (4): Do the provisions of Section 4 of Legislative Document 1271 delegate legislative power to the Commissioner of Inland Fisheries and Game in violation of Section 1 of Part First of Article IV of the Constitution of Maine?
ANSWER: We answer in the affirmative.
No reference is made to the existing fish or game laws or administrative standards. No general policy of regulation or control is set forth in the document as to hunting or fishing on the lands concerned. There appears no legislative direction ascertaining or determining the duties imposed by the document upon the Commissioner of Inland Fisheries and Game or what ministerial acts are authorized and necessary for the performance of such duties. McKenney v. Farnsworth, 121 Me. 450, 118 A. 237.
QUESTION (5): Would House Paper 902, Legislative Document 1271 "An Act Providing for Severance Taxation of Certain Natural Resources," if enacted by the Legislature, be constitutional?
ANSWER: We believe our answers to the foregoing specific questions will be sufficient for the purposes of your inquiry. We cannot well anticipate all of the questions that could arise under the Act in its present form.
Dated at Augusta, Maine, this 5th day of May, 1959.
Respectfully submitted:
ROBERT B. WILLIAMSON
DONALD W. WEBBER
WALTER M. TAPLEY, JR.
FRANCIS W. SULLIVAN
F. HAROLD DUBORD
CECIL J. SIDDALL