Maine Consol. Power Co. v. Inhabitants of Town of Farmington

Citation219 A.2d 748
PartiesMAINE CONSOLIDATED POWER COMPANY, a Maine Corporation with its principal place of business in Farmington, County of Franklin, State of Maine, Plaintiff, v. The INHABITANTS OF the TOWN OF FARMINGTON and Raymon J. Magno, Sr., Milford E. Beal, B. A. Etzel, John R. Pillsbury and Linwood J. York, as the Assessors for the Town of Farmington, Defendants.
Decision Date18 May 1966
CourtSupreme Judicial Court of Maine (US)

Skelton, Taintor & Abbott, by Frederick G. Taintor, Lewiston, for plaintiff.

Peter Mills, Farmington, for defendants.

Before WILLIAMSON, C. J., and WEBBER, TAPLEY, SULLIVAN and MARDEN, JJ.

RESCRIPT

TAPLEY, Justice.

On report. Case is submitted upon complaint (less Exhibit A attached thereto), answer and agreed statmeent of facts.

This case is an appeal from the decision of the Assessors of the Town of Farmington denying a petition for abatment of 1964 taxes assessed against Maine Consolidated Power Company, a public utility. The pertinent portion of the agreed statement states:

'The plaintiff-appellant contends that the valuation of its property for the purpose of municipal taxation is limited to the cost of the property when first devoted to public use, less depreciation thereon, the question of 'prudent acquisition cost' not being involved insofar as its properties in Farmington are concerned.

'The Town and its Assessors contend that other factors, such as replacement cost, may be considered in reaching the valuation for the purpose of municipal taxation.

'At pre-trial it was established that the plaintiff-appellant's proposed exhibits and testimony would be limited to the single aspect of valuation indicated above.

'If it should be determined that factors other than the cost of property when first devoted to public use, less depreciation, may be considered, the appeal should be dismissed. If the plaintiff-appellant's contention should be sustained, the parties are prepared to agree upon the dollar amount of the cost of the property when first devoted to public use, less depreciation.'

The plaintiff-appellant (hereinafter referred to as Company) contends that tax value is determined for property of a public utility by the 'original costs, less depreciation' formula as a result of the 1957 Amendment to R.S.1954, Chap. 44, Sec. 18 (35 M.R.S.A. Sec. 52).

The 1957 Amendment struck from Sec. 18 the words, 'current value thereof' and added thereto the words, 'but such other factors shall not include current value,' so that Sec. 18, after the Amendment, reads in part:

'* * * In fixing such reasonable value, the Commission shall give due consideration to evidence of the cost of the property when first devoted to public use, prudent acquisition cost to the utility, less depreciation on each, and any other factors or evidence material and relevant thereto but such other factors shall not include current value. In making such valuation, the Commission may avail itself of any reports, records or other information available to it in the office of any state officer or board.'

The question of 'prudent acquisition cost' is not involved insofar as the Company's properties in Farmington are concerned.

The Company further says that the result of applying the 1957 Amendment artificially creates a 'market value' for utility properties; that it establishes a meansure of capacity of the property to earn money for its owner.

'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; * * *.' Article IX, Sec. 8, Constitution of the State of Maine.

'The burden is on the petitioner to show that the valuation is unjust, not on the assessors to establish that their figures are correct. The presumption is that the assessment is valid.' Sweet v. City of Auburn, 134 Me. 28, 32, 33, 180 A. 803, 805, 104 A.L.R. 784.

The idea of taxation implies an equal apportionment and assessment upon all property according to its just value. Brewer Brick Company v. Inhabitants of Brewer, 62 Me. 62.

'The apportionment and assessment each must be equal throughout the whole state. The criterion established, and hence 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.' Opinion of the Justices, 97 Me. 595, 597, 55 A. 827.

In 1953 this Court, in New England Tel. & Tel. Co. v. Public Utilities Commission, 148 Me. 374, on page 388, 94 A.2d 801, on page 808, in interpreting the then existing rate fixing statute (R.S.1944, Chap. 40, Sec. 17) said in part:

'The evidence of reproduction cost less depreciation is one of the major factors which must be considered by the commission reaching its conclusion.'

In the case of Central Maine Power Co. v. Public Utilities Commission, 150 Me. 257, 109 A.2d 512 (1954) this Court found that the Amendment of 1953 made no change in the substantive law but was only an attempt at clarification of procedural requirements for the determination of current value. This case, on pages 261, 262, 109 A.2d on page 514, states:

'The first task of the Commission in any rate case is to determine a rate base, that is to say, the fair value for rate making purposes upon which the Company is entitled to earn a fair rate of return. This fair value is quite distinguishable from a fair value as a basis of purchase. It is in effect a composite ascertained and fixed by giving 'due consideration to evidence' of certain factors.' (emphasis supplied).

'Since 1957 current value consideration estimated by many to be impracticable as a factor has been deleted by the Legislature. P.L.1957, c. 400, § 2.' Central Maine Power Co. v. Public Utilities Commission, et al., 156 Me. 295, 315, 163 A.2d 762, 774.

By consent of the parties the Court is presented with a very simple issue. Are the assessors confined to basing their assessment on the cost of the property first devoted to public use less depreciation without consideration of any other factors?

The assessors are charged by statute with ascertaining the nature, amount and value of real and personal property subject to tax.

'The assessors shall ascertain as nearly as may be the nature, amount and value as of the first day of each April of the real estte and personal property subject to be taxed, and shall...

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8 cases
  • Consumers Power Co. v. Big Prairie Tp., Newaygo County
    • United States
    • Court of Appeal of Michigan (US)
    • 6 Febrero 1978
    ...232, 348 A.2d 641 (1974); Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 137 N.E.2d 462 (1956); Maine Consolidated Power Co. v. Town of Farmington, 219 A.2d 748 (Me., 1966); People ex rel. Lehigh Valley R. Co. v. Harris, 168 Misc. 685, 6 N.Y.S.2d 794 (1938), aff'd, 281 N.Y. 786, 24 N......
  • Berry v. Daigle
    • United States
    • Supreme Judicial Court of Maine (US)
    • 12 Julio 1974
    ...294 (1953); see Kittery Electric Light Co. v. Assessors of Town of Kittery, Me., 219 A.2d 728 (1966); Maine Consolidated Power Co. v. Inhabitants of Town of Farmington, 219 A.2d 748 (1966); Inhabitants of Bucksport v. Swazey, 132 Me. 36, 165 A. 164 (1933); Cumberland County Power and Light ......
  • Boston Edison Co. v. Board of Assessors of Watertown
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    • United States State Supreme Judicial Court of Massachusetts
    • 27 Agosto 1982
    ...New Haven Water Co. v. Board of Tax Review of New Haven, 166 Conn. 232, 238-239, 348 A.2d 641 (1974); Maine Consol. Power Co. v. Inhabitants of Farmington, 219 A.2d 748, 751 (Maine 1966); Consumers Power Co. v. Port Sheldon Township, 91 Mich.App. 180, 187-188, 283 N.W.2d 680 (1979) (relying......
  • Ariz. Dep't of Revenue v. Improvement
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    • 19 Enero 2006
    ...Michigan, and Kansas in arguing that there is no connection between rate-making and tax rules. See Maine Consol. Power Co. v. Inhabitants of Farmington, 219 A.2d 748, 750-51 (Me. 1966); Consumers Power Co. v. Big Prairie Twp., 265 N.W.2d 182, 191 (Mich. Ct. App. 1978), superseded by statute......
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