Passamaquoddy Water Dist. v. City & Town
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 94
Docket:	Was-97-602
Argued:	April 7, 1998
Decided:	April 30, 1998

Panel:		WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN, LIPEZ, and SAUFLEY, JJ.

PASSAMAQUODDY WATER DISTRICT

v.

CITY OF EASTPORT and TOWN OF PERRY

RUDMAN, J.

	[¶1]  The Passamaquoddy Water District appeals from a summary
judgment entered in the Superior Court (Washington County, Alexander J.)
in favor of the City of Eastport and the Town of Perry.  The Water District
contends that it is entitled to the tax exemption set forth in 36 M.R.S.A. §
651(1)(E) (1990).  We disagree and affirm the summary judgment. 

I.

	[¶2]  The Eastport Water Company was a privately-owned water
company that the Passamaquoddy Indian Tribe sought to purchase.  The City
of Eastport and the Town of Perry both opposed a legislative charter that
would have rendered the property of the proposed Passamaquoddy Water
District tax-exempt.  The Legislature enacted the Water District's charter as
Chapter 25 of the Private and Special Laws of 1983.  Pursuant to section 1 of
its charter, the Water District is a nonprofit public municipal corporation,
consisting of "the inhabitants and territory within the Passamaquoddy
Indian Reservation," created to supply water to "the inhabitants of that
district and of the City of Eastport and the Town of Perry and others . . . ." 
Pursuant to section 15 of its charter, "[t]he property of the district shall not
be exempt from all taxation in the City of Eastport and the Town of Perry or
in any other city or town where any part of its plant may be located."
	[¶3]  The City of Eastport and the Town of Perry both impose a
property tax on those items of the Water District's infrastructure that are
located within their respective municipal limits.  The Water District
initiated this action pursuant to the Uniform Declaratory Judgments Act, 14
M.R.S.A. §§ 5951-5963 (1980), seeking a judgment declaring:  that the
municipal defendants' taxation of the Water District's infrastructure violates
article IX, section 8 of the Maine Constitution; and that the Water District's
charter does not permit the municipal defendants to tax the Water District's
infrastructure.  Both parties moved for a summary judgment.
	[¶4]  The Superior Court concluded that section 15 of the Water
District's charter "creates an exception allowing taxation of properties that
would otherwise be exempt pursuant to 36 M.R.S.A. § 651(1)(E)" and
determined that the Water District lacked standing to raise a constitutional
challenge to its charter.  From this grant of a summary judgment to the
municipal defendants, the Water District appeals.

II.

	[¶5]  We reject the Water District's challenge to the court's
determination that section 15 of the Water District's charter excepts it from
the tax exemption to which it is otherwise entitled pursuant to 36 M.R.S.A.
§ 651(1)(E).  Statutory interpretation is a question of law that we review de
novo.  See Estate of Spear, 1997 ME 15, ¶ 6, 689 A.2d 590, 591.  We accord
the words of a statute "their plain ordinary meaning" and, if that meaning is
clear, do not "look beyond the words, unless the result is illogical or
absurd."  Id. at ¶ 7, 689 A.2d at 591-92 (citations omitted).  We adhere to
the interpretive principle that "[n]othing in a statute may be treated as
surplusage if a reasonable construction supplying meaning and force is
otherwise possible."  Labbe v. Nissen Corp., 404 A.2d 564, 567 (Me. 1979).
	[¶6]  The Legislature has exempted from taxation certain property
owned by public water districts.  Pursuant to Section 651(1) of Title 36:

The following public property is exempt from taxation:

	. . . . 

D.  The property of any public municipal corporation of
this State appropriated to public uses, if located within the
corporate limits and confines of such public municipal
corporation.

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.

36 M.R.S.A. § 651(1)(D)-(E).  As a public municipal corporation, the Water
District ordinarily would qualify for both of these exemptions.  Section 15 of
the Water District's charter, however, provides that "[t]he property of the
district shall not be exempt from all taxation in the City of Eastport and the
Town of Perry or in any other city or town where any part of its plant may be
located."  
	[¶7]  The Water District argues that section 15 of its charter does not
preclude it from enjoying the exemption set forth in section 651(1)(E) of
Title 36 because the plain meaning of "'shall not be exempt from all
taxation'" is that it "may be exempt from some taxation."  Assuming
arguendo that the Water District is exempt from some taxation,{1} we cannot
conclude that the Water District is exempt from taxation by the municipal
defendants without rendering section 15 of its charter surplusage.  If the
Legislature had intended the exemption set forth in section 651(1)(E) of
Title 36 to apply to the Water District, it need not have included section 15
in the Water District's charter.  To give effect to section 15, we must
conclude that it excepts the Water District from a tax exemption to which it
is otherwise entitled. 

III.

	[¶8]  The Superior Court determined that the Water District, "a public
body, created by the Legislature, lacks standing to challenge, on equal
protection like grounds, the enabling legislation which created it . . . ."  This
conclusion was erroneous.  Pursuant to the Uniform Declaratory Judgments
Act, "[a]ny person  . . . whose rights . . . are affected by a statute . . . may have
determined any question of construction or validity arising under the . . .
statute . . . and obtain a declaration of rights . . . thereunder."  14 M.R.S.A. §
5954 (1980).  We require a party to assert "a claim of right, buttressed by a
sufficiently substantial interest to warrant judicial intervention," to maintain
a declaratory judgment action.  Annable v. Board of Envtl. Protection, 507
A.2d 592, 595 (Me. 1986) (quotations and citations omitted).  If a party
asserts a "disagreement over an official interpretation of a statute" that
involves "presently existing and specific facts, as opposed to hypothetical or
uncertain facts," that party has standing.  Id.  
	[¶9]  In this case, the Water District challenges the validity of a
provision of its enabling legislation.  See id., 507 A.2d at 595.  The Water
District contends that the municipal defendants' taxation of property
devoted to public uses that, but for section 15 of its charter, would be tax-
exempt violates its rights pursuant to article IX, section 8 of the Maine
Constitution.{2}  We conclude that the Water District has standing to seek a
judgment declaring that the municipal defendants' taxation of its property is
unconstitutional.  Cf. Town of Acton v. McGary, 356 A.2d 700, 706 n.10 (Me.
1976) (suggesting that municipal plaintiffs would have standing to challenge
imposition of taxes "upon property owned by the municipalities and not
devoted to public uses, thus to be outside the exemption from taxation
established by 36 M.R.S.A. § 651"). 

IV.

	[¶10]  We reject, however, the Water District's argument that section
15 of its charter violates article IX, section 8 of the Maine Constitution.{3} 
"'Legislative enactments are presumed constitutional, and the party
challenging a statute's constitutionality bears the burden of proof to the
contrary.'"  McBreairty v. Commissioner of Admin. and Fin. Serv., 663 A.2d
50, 52 (Me. 1995) (quoting American Republic Ins. Co. v. Superintendent of
Ins., 647 A.2d 1195, 1197 (Me. 1994)).  The party asserting a statute's
unconstitutionality must demonstrate a constitutional infirmity "by strong
and convincing reasons."  Id. (quotations and citations omitted).  The Water
District has not carried its burden.
	[¶11]  Article IX, section 8 states in relevant part:  "[a]ll taxes upon
real and personal estate, assessed by authority of this State, shall be
apportioned and assessed equally according to the just value thereof."  Me.
Const. art IX, § 8.  We have interpreted this clause to require "that property
taxes assessed by the State 'be assessed on all of the property in the State on
an equal basis.'"  McBreairty, 663 A.2d at 54 (quoting Opinion of the
Justices, 146 Me. 239, 248, 80 A.2d 421, 425 (1951)).  During assessment,
"the only criterion to be applied[] is the 'just value' of the land wherever
situated.  The only permissible variation of the amount of the tax is that
resulting from the difference in value."  Maine Consol. Power Co. v. Town of
Farmington, 219 A.2d 748, 750 (Me. 1966) (quotations and citations
omitted). 
 	[¶12]  In City of Portland v. Portland Water Co., 67 Me. 135, 136
(1877), a water company's legislative charter contained a provision that the
city could "'by vote, exempt any property of said corporation, not now in
existence, from taxation for the term of six years.'"  Although the city voted
in 1870 to confer a tax exemption on the company for five years, in 1874
the city assessed a tax upon the company's property.  See id.  The city then
sued to collect the tax, contending that the Legislature was not empowered
to include the exemption provision in the company's charter.  See id.  We
rejected the city's argument, stating:  

The view taken by the plaintiffs is, we think, an imperfect
interpretation of the constitutional clause quoted.  The requirement
is, not that all real estate shall be assessed, but that whatever is
assessed shall be apportioned and assessed equally.  The plaintiffs
argue that a law which exempts water works in Portland from taxation,
operates unequally, if it does not at the same time exempt all water
works in the state from taxation.  . . .  We are not satisfied that the
legislature cannot, by charter or contract, in any case and under any
circumstances, for sufficient considerations, release one corporation
from taxation, merely because it does not include in its exclusion from
taxation all similar corporations in the state.

Id. at 136-37 (emphasis added).
	[¶13]  The Water District has not argued that the taxes imposed on its
property by the municipal defendants fail to reflect the "just value" of that
property, nor is it arguing that an improper tax rate was applied.  Rather,
the Water District challenges the validity of section 15 of its charter solely
because that section denies it a tax exemption, enjoyed by other water
districts, to which it is otherwise entitled.  Our decision in Portland Water
Company rejected a contention that the Legislature cannot constitutionally
confer a tax exemption on one water company if other water companies in
the state are not similarly exempt.  See id. at 136-37.  Conversely, we now
conclude that the Legislature does not violate section 8 of article IX by
excepting one water district from a tax exemption that other water districts
enjoy.
	The entry is:
Judgment affirmed.
                                                                        
Attorney for plaintiff:

George C. Schelling, Esq., (orally)
Gross, Minsky, Mogul & Singal, P.A.
P O Box 917
Bangor, ME 04402-0917

Attorneys for defendants:

Rebecca S.K. Webber, Esq., (orally)
Curtis Webber, Esq.
Linnell, Choate & Webber, LLP
P O Box 190
Auburn, ME 04212-0190

FOOTNOTES******************************** {1} There appears to be no dispute that the Water District is entitled to, and receives, the exemption set forth in section 651(1)(D) of Title 36. {2} "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." Me. Const. art IX, § 8. {3} The municipal defendants urge us to find that the Water District is estopped from challenging the constitutionality of its charter. We decline to do so on these specific facts. We previously have expressed support for "the modern trend urging courts to be circumspect in applying the estoppel principle." See Begin v. Town of Sabattus, 409 A.2d 1269, 1274 (Me. 1979). A balance of the equities in this case militates against denying the Water District an opportunity to assert its constitutional rights.