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Town of Embden v. Madison Water District
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 154
Docket:	Ken-97-734
Argued:	May 6, 1998
Decided:	June 17, 1998




	[¶1]  The Town of Embden appeals from the judgment entered in the
Superior Court (Kennebec County, Alexander, J.) affirming a decision of the
State Board of Property Tax Review that the Madison and Anson Water
Districts' treatment facilities located in Embden are public property entitled
to a tax exemption.  We affirm the judgment.
	[¶2]  The Madison Water District and the Anson Water District jointly
own two parcels of land in Embden totalling approximately eleven acres.  In
August 1995, the Town asked the Districts to provide a copious amount of
information and documentation regarding a recently built filtration plant and
other water treatment facilities located in the Town in order to assist it in
making an assessment of the property.  The request was purportedly made
pursuant to 36 M.R.S.A. § 706 (1990),{1} but sought significantly more
information than that provided for in section 706.  The Districts responded
by asserting that all of their property in Embden was tax-exempt pursuant to
36 M.R.S.A. § 651(E) (1990),{2} and that they therefore were not required to
provide a list of property according to the terms of section 706.  The Town
served the Districts with two supplemental tax bills for the properties,
assessing the filtration plant at $2,000,000 and the other facilities at $3950. 
The Town's Assessors denied the Districts' subsequent request for an
abatement, and the Districts appealed to the State Board of Property Tax
	[¶3]  The Town filed a motion to dismiss the Districts' appeal for
failure to comply with its section 706 request.  The Board concluded that
the Districts' response to the request was adequate and that the Districts'
filtration, fluoridation, and chlorination facilities were exempt pursuant to
36 M.R.S.A. § 651(E).  The Superior Court upheld the Board's decision, and
this appeal followed.
	[¶4]  When the Superior Court acts in its appellate capacity "we review
directly the decision of the Board for abuse of discretion, error of law or
findings unsupported by substantial evidence in the record."  City of
Lewiston v. The Salvation Army, 1998 ME 98, ¶ 5, __ A.2d __ (quotation
	[¶5]  The Town first contends that the Districts are barred from
seeking an abatement because of their failure to adequately respond to the
Town's section 706 request.  Section 706 provides that if a "taxpayer does
not furnish the list [of non-exempt property], he is barred of his right to
make application to the assessor . . . or any appeal therefrom for any
abatement of his taxes . . . ."  The facts presented here are strikingly similar
to those presented in our opinion in Champion Int'l Corp. v. Town of
Bucksport, 667 A.2d 1376, 1377 (Me. 1995), in which we determined that
pursuant to section 706, a request for a true and perfect list of the
taxpayer's taxable property was a necessary prerequisite to a request for
detailed information regarding the property.  We held that in the absence of
such a preliminary request, the taxpayer was not precluded from seeking an
abatement.  Id.  Similarly, the Districts were never asked to provide a true
and perfect list of their property prior to being served with a request for
extensive and detailed information regarding their property and operations. 
Furthermore, the Districts responded to the Town's request by asserting a
good faith belief that the subject property was tax exempt, and thus they
were relieved of the necessity of filing a list before seeking an abatement. 
See Howard D. Johnson Co. v. King, 351 A.2d 524, 526-27 (Me. 1976);
Depositors Trust Co. v. City of Belfast, 295 A.2d 28, 29-30 (Me. 1972).
	[¶6]  Turning to the merits of the parties' contentions regarding tax-
exemption, the Board determined that section 651(E) "on its face focuses
on property that was a necessary component of a safe water system in
1911," the year in which the language now found in section 651(E) was
enacted by the Legislature.  It reasoned that a modern interpretation of the
statute "would bring a fluoridation, chlorination and/or filtration plant
within a reasonable interpretation of [the section] in that today such plant
components are necessary for the operation of a safe water system."  We
agree with the Board's interpretation of the law.
	[¶7]  "Statutory interpretation is a question for the court, the purpose
of which is to discern the legislative intent behind the statute."  Bakala v.
Town of Stonington, 647 A.2d 85, 87 (Me. 1994).  "Reasoning and
judgment, not the mere bald literalness of statutory phrasing, must guide
and control research for a judicial legislative design."  Inhabitants of Whiting
v. Inhabitants of Lubec, 121 Me. 121, 126, 115 A. 896, 899 (1922).  When
interpreting the statute at issue before us, it must also be kept in mind that
taxation of public property is generally disfavored.  "[I]n the absence of
legislation to the contrary, the property of a municipal corporation used for
the public benefit is free from taxation, whether it be within or without the
territory of the municipality by which it is owned."  Id. at 122-23, 115 A. at
897-98 (emphasis added).
	[¶8]  The presumptive tax-exempt status of all property owned by
municipal corporations such as the Water Districts was explicitly recognized
in our statutes prior to 1911.  See R.S. ch. 9, § 6 (1903) ("[T]he property of
any public municipal corporation of this state, appropriated to public uses"
is exempt from taxation.).  See also City of Augusta v. Augusta Water District,
101 Me. 148, 150, 63 A. 663, 664 (1906).  In 1911 the Legislature
amended R.S. ch. 9, § 6 to limit the tax exemption for property owned by
public municipal corporations by adding the language now found in
paragraphs D and E of section 651.  P.L. 1911, ch. 120.  The effect of the
amendment was to make public municipal corporations responsible for the
property tax on land owned outside of its corporate limits, while retaining
the tax-exempt status of components of the corporation's facilities used to
provide valuable public services such as the delivery of water, power, and
light.  We conclude, as did the Board, that the language of section 651(E),
when viewed in the light of the statute's purpose when originally enacted,
encompasses modern water treatment facilities such as filtration,
chlorination, and fluoridation plants that were not contemplated in 1911 but
are now necessary for the provision of safe water.{3}
	The entry is:
					Judgment affirmed.

Attorney for plaintiff: Peter M. Beckerman, Esq., (orally) 9 Getchell Avenue Waterville, ME 04901 Attorney for defendants: Neal C. Corson, Esq., (orally) P O Box 250 Madison, ME 04950
FOOTNOTES******************************** {1}. 36 M.R.S.A. § 706 (1990) provides in pertinent part: Before making an assessment, the assessor . . . may give seasonable notice in writing to all persons liable to taxation in the municipality . . . to furnish to the assessor . . . true and perfect lists of all their estates, not by law exempt from taxation, of which they were possessed on the first day of April of the same year. {2}. 36 M.R.S.A. § 651 (1990) provides in pertinent part: The following public property is exempt from taxation: . . . . E. The pipes, fixtures, hydrants, conduits, gatehouses, pumping stations, reservoirs and dams, used only for reservoir purposes, of public municipal corporations engaged in supplying water, power or light, if located outside of the limits of such public municipal corporation. {3}. Because of the failure of the Town to comply with 36 M.R.S.A. § 706 (1990) we are not presented with an argument that some unspecified portion of the District's facilities do not qualify for the exemption pursuant to 36 M.R.S.A. § 651(E) (1990).