Providence Water Supply Board v. Beattie, C.A. No. 02-5166 (RI 2/3/2006)
Decision Date | 03 February 2006 |
Docket Number | C.A. No. 05-1148 (consolidated),C.A. No. 02-5166,C.A. No. 04-0442,C.A. No. 03-2052 |
Parties | PROVIDENCE WATER SUPPLY BOARD v. KAREN S. BEATTIE, Assessor of Taxes of the Town of Scituate, and GUY B. ANGELL, LEONARD GUGLIELMI, and WARNER F. DAUPHINEE, Members of the Town of Scituate Board of Assessment Review. |
Court | United States State Supreme Court of Rhode Island |
In these consolidated cases, the Providence Water Supply Board ("PWSB" or "Plaintiff") appeals from four decisions of the Board of Assessment Review ("Board") rejecting its application for forest land tax classification. Jurisdiction is pursuant to G.L. 1956 § 27-44-6.
For the reasons set forth below, the Court reverses the decisions of the Board and finds as follows: Plaintiff's application for classification as forest land was timely; Plaintiff's appeal is not barred by the doctrine of administrative finality; and Defendant, Karen Beattie, Assessor of Taxes of the Town of Scituate ("Beattie," "assessor," "Scituate," or "town"), erred when she rejected the forest land designation. She exceeded her powers when she substituted her opinion for that of the Director of the Department of Environmental Management ("DEM"). The tax assessor and the Board violated well-established rules of statutory construction when they attempted to determine the legislative intent of a clear and unambiguous statute.
Plaintiff is a non-profit quasi-municipal entity which operates the water utility for the City of Providence and other areas within its jurisdiction. See P.L. 1915, ch. 1278, § 1 ( ); see generally Joslin Mfg. Co. v. City of Providence, 262 U.S. 668 (1923) ( ). PWSB obtains its water supply from a number of surface water reservoirs positioned throughout the central region of the state, including one located in the Town of Scituate. See P.L. 1915, ch. 1278, § 5 ( ). The forest area maintained around the reservoir, as well as a sand filter filtration plant, provides the necessary treatment for the water. (2/21/02 Hearing Tr. at 110.) Plaintiff then transmits the water through a retail and wholesale distribution system. See id. at 74 ( ); see also PWSB, http://www.provwater.com (expounding upon nature of Plaintiff's operations). In 1915, the General Assembly enacted a statute permitting the City of Providence to condemn certain properties in Scituate in order to build a reservoir and watershed surrounding that reservoir. See P.L. 1915, ch. 1278. Section 4 of that Act establishes the PWSB with the following mandate:
"[F]or protecting and preserving the waters in such reservoir or reservoirs and the waters of said river and its tributaries flowing thereto, from pollution, and from the deposit therein of any matters which would reduce the quality or value of any such waters as a potable water supply and for filtration and other works for treating such water supply." Id. at § 4.
PWSB functions like a commercial enterprise. See P.L. 1915, ch. 1278, § 1 ( ). Yet, since its creation, nearly all of its operations have been governed in some fashion by either municipal, state, or federal regulations. See, e.g., Providence City Code, Art. III, § 21-65 ( ); PWSB, http://www.provwater.com (itemizing various municipal and governmental bodies authorized to control aspects of the Plaintiff's business). Because only a small percentage of the land owned by PWSB is actually made up of the reservoir, the Plaintiff created a Forest Management Program devoted to sustaining the forestry resources on the property.1
Since its inception, PWSB has been at odds with the Town of Scituate relative to the issue of property taxation. In 1926, it sued the tax assessor for alleged excessive taxation. See Providence v. Hall, 49 R.I. 230, 142 A. 156 (1928). The issue in that case was certified to the Rhode Island Supreme Court as follows: "Is real estate and improvements thereon belonging to the City of Providence located in the Town of Scituate liable to taxation by the Town of Scituate." Id. The Court rejected PWSB's appeal, alluding to Article I, Section 2 of the Rhode Island Constitution, which provides that "[t]he burdens of the state ought to be fairly distributed among its citizens." The Court found that it "ought not to assume that no consideration was given to the rights of the town, and that property within its limits was deliberately removed from taxation with no compensating advantage." Id. Following the Court's decision in Hall, PWSB paid its Scituate property taxes without protest for approximately sixty years.
However, in 1985, PWSB once again attempted to limit its taxation liability. Then, as in the instant matter, PWSB tried to get its property classified as "forest land" under G.L. 1956 § 44-27-1 et seq., the Taxation of Farm, Forest and Open Space Land Act ("Open Space Act" or "Act"). The Open Space Act "provides for use value assessment of land to encourage the maintenance of Rhode Island's productive agriculture and forest land."2 At the beginning of title 44, chapter 27, the General Assembly delineates its policy objectives behind implementation of the Act as follows:
"(1) That it is in the public interest to encourage the preservation of farm, forest, and open space land in order to maintain a readily available source of food and farm products close to the metropolitan areas of the state, to conserve the state's natural resources, and to provide for the welfare and happiness of the inhabitants of the state.
(2) That it is in the public interest to prevent the forced conversion of farm, forest, and open space land to more intensive uses as the result of economic pressures caused by the assessment for purposes of property taxation at values incompatible with their preservation as farm, forest, and open space land.
(3) That the necessity in the public interest of the enactment of the provisions of this chapter is a matter of legislative determination." Section 44-27-1.
The Act provides a mechanism to achieve these policy goals whereby landowners can apply for certification as farmland, forest land, or open space. See §§ 44-27-3, 44-27-4, 44-27-5. For receipt of a forest land certificate, landowners must apply to the DEM. See § 44-27-4. The statute defines "forest land" as follows:
"Any tract or contiguous tracts of land, ten (10) acres or larger bearing a dense growth of trees, including any underbrush, and having either the quality of self perpetuation, or being dependent upon its development by the planting and replanting of trees in stands of closely growing timber, actively managed under a forest management plan approved by the director of environmental management." Section 44-27-2(2).
Upon receipt of a forest land certificate, the landowner then may apply for tax classification as such, and the tax assessor "shall classify the land as forest land and include the land as forest land on the assessment list." Id. (emphasis added). Should the assessor see fit to deny the forest land classification, the Act permits an aggrieved landowner to appeal the denial to the Board. Id.
In 1985—as in the instant matter—Plaintiff received a forest land certificate from the DEM; the tax assessor denied the classification; and, after a full hearing on the merits, the denial was upheld by the Board. (See 2/4/85 Letter from Donald T. Gould, Tax Assessor to PWSB; see generally, 4/24/85 Hearing Tr.; 4/25/85 Decision.) PWSB did not appeal the 1985 decision, and the Board's decision became final without review. Thereafter, in 1990, PWSB and Scituate negotiated an agreement to freeze the property value of the 9088 acres for ten years at $8600 per acre. (12/12/01 Hearing Tr. at 48.)
On January 1, 1999, the legislature created the Rhode Island Farm, Forest and Open Space Land Value Subcommittee "to recommend the methodology and values for the assessment of land for property taxation on the basis of current use for farm, forest, and open space lands, as established by chapter 27 of title 44 and § 44-5-12." G.L. 1956 § 2-4-3.1. On September 11, 2000, the subcommittee recommended a maximum assessed value of $100 per acre for forest land. This value was derived largely from evaluation of tree size and stumpage prices. (See 5/8/00 Memorandum from Christopher F. Modisette to Thomas A. Dupree, Chair of the Open Space Act Subcommittee) (setting forth procedures and reference materials utilized in computing the value.)
On November 21, 2000, following the implementation of the new $100 maximum, PWSB once again applied for, and received, a forest land certificate in connection with its 9088 acres from the Forest Environment Division of the DEM. (12/12/01 Hearing Tr. at 11-12.) At that same time, Scituate was engaged in a town-wide real estate revaluation, thereby affecting the amount of taxes to be assessed. (1/22/02 Hearing Tr. at 51.) To accomplish this task, the town contracted with Neal Dupuis ("Dupuis"), a certified real estate appraiser, to appraise various properties, including PWSB's land. (1/29/02 Hearing Tr. at 73-74.)
On or about January 1, 2001, Beattie mailed notices to all Scituate property owners, except PWSB, affected by the revaluation. (12/12/01 Hearing Tr. at 78.) These communications notified the taxpayers of their respective evaluation and advised them of their right to appeal the assessment. (12/12/01 Hearing Tr. at 79-81.) The town and PWSB were then engaged in negotiations to attempt to reach a new, agreed-upon value for PWSB's Scituate property, as the existing ten-year agreement was set to expire in 2001. Beattie did...
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