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FAME v. Town of Caribou
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:  1997 ME 95
Docket: KEN-96-656
Argued March 5, 1997
Decided   May 5, 1997




	[¶1]  The City of Caribou ("the City") appeals from a judgment entered
in the Superior Court (Kennebec County, Alexander J.)  vacating a decision
of the State Board of Property Tax Review ("the Board").  The Board denied
a request for a tax abatement filed by the Finance Authority of Maine
("FAME").{1} The taxes in question were assessed in 1989 before FAME
acquired the subject property.  On appeal, the City argues that the taxable
status of the property for the 1989 tax year was fixed on April 1, 1989, and
that the court erred in ruling that the property became tax exempt as of July
17, l989, the date on which FAME acquired the property.  We agree and
vacate the judgment.
	[¶2]  The facts presented to the Board are undisputed and may be
summarized as follows:  The property consists of real and personal property
located on the Washburn Road in Caribou.  On April 1, 1989, it was owned by
L & S Sales, Inc. (L & S), a potato processing company.  The property was
subject to a mortgage held by Key Bank of Maine securing a loan insured by
FAME.  L & S defaulted on the loan, Key Bank foreclosed, and FAME bought
the property at a public auction.   FAME took title to the property on July
17, 1989.  Key Bank paid the City a pro rata share of the 1989 outstanding
property tax based on the period of April 1, 1989 until July 17, 1989.  The
balance of the 1989 tax bill remains unpaid.  In May of 1990, the City filed a
tax lien certificate against the real property asserting its claim for the
unpaid real property taxes. 
	[¶3]  FAME applied to the City for an abatement of the unpaid real and
personal property taxes asserting a statutory exemption from all property
taxes pursuant to 10 M.R.S.A. § 980(3)(1977).  The application was denied
and FAME filed a petition for assessment review before the Board.  After a
1991 hearing, the Board denied the petition in a written decision issued in
February, 1996.  FAME filed a petition for review of final agency action in the
Superior Court pursuant to M.R. Civ. P. Rule 80C, and the court vacated the
Board's decision.  The City now appeals.
	[¶4]  Because the Superior Court acted as an appellate tribunal, we
review directly the decision of the State Board of Property Tax Review.  At
issue is the Board's construction of the tax law and FAME's exemption
therefrom, and we review for an error of law.  American Republic Ins. Co., v.
Superintendent of Insurance, 647 A.2d 1195, 1197 (Me. 1994).
	[¶5]  The Board denied the requested abatement because it
determined that FAME's tax-exempt status with respect to the subject
property did not become operative until the next annual tax was assessed on
April 1, 1990.  The Board based this determination on its interpretation of
section 502 that provides in part:

All real estate within the State, . . . is subject to taxation on the
first day of each April as provided;  and the status of all taxpayers
and of such taxable property shall be fixed as of that date. 

36 M.R.S.A. § 502 (1990).  Long ago, we held that the liability of persons and
property to municipal taxation is fixed on the first day of April, and that a 
"subsequent change of residence or ownership the law takes no note of until
the regular periodical time of making a new assessment."  Inhabitants of
Bucksport v. Woodman, 68 Me. 33 (1877).  By focusing on a date certain, the
first day of April, section 502 establishes an orderly tax assessment scheme
that provides the certainty that municipalities require to fund their budgets.

The assessment statutes focus, as a group, on April 1st as the
'doom day' to which both the taxpayer and the municipality can
look for determination of the status of all property subject to

Connecticut Bank & Trust Co., N.A. v. City of Westbrook, 477 A.2d 269, 272
(Me. 1984).
	[¶6]  The Finance Authority of Maine Act, 10 M.R.S.A. § 961 et seq.
(1997), creates FAME and provides a tax exemption for its property in the
following terms:

Property acquired, held or transferred by the authority shall be
exempt from all taxes and from betterments and special
assessments of the city, town, county, State or any political
subdivision thereof.  The authority may agree to make payments
in lieu of taxes to the applicable political subdivisions.

10 M.R.S.A. § 980)(3) (1997).  The Act provides that subsection 980(3) is to
be liberally construed and prevails over conflicting provisions of law.  See 10
M.R.S.A. §§ 976, 980.
	[¶7]  FAME argues that from the moment of acquisition subsection
980(3) exempts property owned by FAME from all taxation or any action
that is tantamount to taxation, such as the recordation or enforcement of a
lien for unpaid taxes.  They argue, and the court held, that subsection
980(3) conflicts with the general law of taxation and, therefore, FAME's tax
exempt status prevails.  The argument is flawed.  FAME interprets the
phrase "exempt from all taxes" in subsection 980(3) as mandating
exemption from the payment of any tax under any circumstance.  Subsection
980(3) does not, however, retroactively invalidate unpaid taxes legally
assessed before FAME's acquisition.  Neither does it invalidate tax liens that
encumber the property for taxes previously imposed.{2}  With respect to real
property, a tax lien operates as an encumbrance on the land itself and not on
the interest of the person assessed.  Cassidy v. Aroostook Hotels, 134 Me.
341, 186 A. 665 (1936). 
	[¶8]  Subsection 980(3) exempts FAME from all taxes assessed after
the date of acquisition.  The Legislature has expressed no intention to
disrupt the orderly tax assessment scheme established by section 502 of the
general tax law.  Although our prior cases have involved a strict construction
of the applicable exemption statute, see American Martial Arts Found. v. City
of Portland, 635 A.2d 962 (1993);  and  Connecticut Bank & Trust Co., N.A.
v. City of Westbrook, 477 A.2d 269 (Me. 1984), our opinions have always
emphasized the need to give effect to section 502 and the overall statutory

In sum, we have a general directive to construe tax exemption
statutes strictly, a statutory scheme fixing April 1st as the date
on which assessments are to be made, and interpretations by
this court of the statutes' purpose as fixing a date on which tax
obligations may be known with certainty.  In the face of this we
cannot say the Review Board committed an error of law . . . .

Connecticut Bank, 477 A.2d at 272.
	[¶9]  When interpreting statutory language that forms a part of a larger
statutory scheme, we consider the whole scheme "so that a harmonious
result, presumably the intent of the Legislature, may be achieved."  Lucas v.
E.A. Buschmann, Inc., 656 A.2d 1193, 1195 (Me. 1995) (citations omitted).
It is our duty to view as one piece of legislation the several
statutes governing a particular subject matter . . . and, when
there is need for construction, to favor such an interpretation as
will, as nearly as possible, make the particular statutes a
consistent and harmonious part of a single legislative chart. 

Delano v. City of South Portland, 405 A.2d 222, 227 (Me. 1979). 
	[¶10]  Subsection 980(3) and section 502 can be read together
without conflict, even when giving effect to the important policies
underlying them both.  Subsection 980(3) establishes the tax exempt status
of property held by FAME, and section 502 defines taxation as an act that
occurs on the first day of April.  In the present case, the property acquired
by FAME has not been taxed.  Rather, FAME has acquired property that is
encumbered by taxes previously assessed.
	[¶11]  The Board did not err in declining to abate taxes imposed on
the subject property before the date of FAME's acquisition.
	The entry is:
Judgment vacated.  Remanded to the Superior Court
with instructions to enter a judgment affirming the
decision of the State Board of Property Tax Review.

Attorneys for plaintiff: Elizabeth L. Bordowitz, Esq. (orally) Katryn A. Gabrielson, Esq. Finance Authority of Maine P O Box 949 Augusta, ME 04332-0949 Attorney for defendant: Richard D. Solman, Esq, (orally) Solman & Hunter, P.A. P O Box 665 Caribou, ME 04736 Attorney for amicus curiae: Ellerbe P. Cole, Esq. Maine Municipal Association 60 Community Drive Augusta, ME 04330-9486
FOOTNOTES******************************** {1} FAME is a body corporate and politic and a public instrumentality of the State. 10 M.R.S.A. § 964(1) (1977). {2} There shall be a lien to secure the payment of all taxes legally assessed on real estate as defined in section 551, provided in the inventory and valuation upon which the assessment is made there shall be a description of the real estate taxed sufficiently accurate to identify it. Such lien shall take precedence over all other claims on said real estate and shall continue in force until the taxes are paid or until said lien is otherwise terminated by law. 36 M.R.S.A. § 552 (1990).