126 A. 7 | N.H. | 1924
"Property held by a city, town or precinct in another city or town for the purpose of a water supply, if yielding no rent, shall not be liable to taxation therein, but the city, town or precinct so holding it shall annually pay to the city or town in which such property lies an amount equal to that which such place would receive for taxes upon the average of the assessed value of such land without buildings or other structures for the three years last preceding the acquisition thereof, the valuation for each year being reduced by all abatements thereon; but any part of such land or buildings from which any revenue in the nature of rent is received shall be subject to taxation." Laws 1911, c. 40.
The defendant contends that this statute is unconstitutional. Conceding that the legislature has power to grant exemptions from taxation, it is urged that the exemption here provided for is so connected with and dependent upon the imposition of an unauthorized tax that the whole statute is void, and the property is taxable under the rule laid down in Newport v. Unity,
Upon a reconsideration of the subject, it seems to us that the views then expressed by the chief justice embody a correct statement *334 of the law. The subject was considered in great detail, and it is superfluous to restate the argument here. It is sufficient to call attention to the following propositions. Towns as such have no constitutional rights in matters of taxation. No tax can be laid except by authority of the legislature; and the legislature may grant exemptions, either in express terms or by omitting certain property from the catalogue of taxable estate. It follows that the act in question violates no constitutional right of Roxbury, since it has no such right. Canaan v. District, supra, 517, 535-537.
It was urged at the argument that the principle relied upon applies as between superior and inferior governmental agencies, but not as between two of equal rank. A case involving taxation of property in one state, held for public uses in another state, is cited to sustain the contention. State v. Holcomb,
It is further contended that the assessment provided for violates the rights of other taxpayers in Roxbury. Conceding for the purpose of the argument that this objection is open to the defendant, the question of the nature of this charge against towns and cities is presented. The argument for the defendant is based upon the contentions that the charge upon Keene is a tax upon its property in Roxbury, and as it is not laid upon the value of the property on the taxing date it is unequal and therefore unauthorized. The claim that the charge is a Roxbury tax, and comes within the constitutional restriction, is based upon the theory that it could not be laid other than as such tax. There are two sufficient answers to this position. The grantor of a privilege may annex conditions to its acceptance, and the legislature may provide that one division of the state shall contribute to the expenses of another division, when such expense is in some degree for the benefit of the former.
Holding real estate in another town for water works purposes is not a matter of municipal right. It may be granted or withheld as the legislature sees fit. The list of acts cited in Canaan v. District, *335
This is what was done in the present instance. The property was exempted from taxation, and the right to hold and use it for the specified purpose was made subject to certain contributions to the town where the property was situated. As the legislature could have withheld the grant of the right, it could impose terms when conferring it. The burden imposed might have been made twice or half that of a taxpayer, or it might have been fixed without any reference to the subject of taxation.
Taking this statute as a whole the legislative purpose is not doubtful. The law was enacted shortly after the decision of Canaan v. District, supra, and quite evidently with the views there expressed clearly in mind. The act is a copy of Massachusetts Laws, 1893, c. 352, s. 1, and the court had there held (1906) that the charge was not a tax. Milford Water Co. v. Hopkinton,
The charge laid is also sustainable under the power to determine the apportionment of public burdens between municipalities. That this power is not limited by municipal boundaries is shown by the statute requiring towns to contribute to the construction or maintenance of highways in other towns. P.S., c. 69, s. 11; Webster v. Alton,
In this case it appeared desirable to the legislature that towns and cities should be permitted to exercise certain functions upon territory not within their municipal boundaries. It was thought reasonable that property so held should be exempt from taxation, and it was so enacted. It also seemed just that the town or city so holding property should contribute to the municipal burdens of the servient town, from whose local government the contributor presumably receives some benefit. As against the plaintiff the statute is sustainable upon the ground of special benefit received, as well as upon the theory that it has accepted the grant of a power and must take it with the conditions imposed with the grant.
As against the taxpayers of Roxbury, the statute is valid, because it does not touch any right they possess. If there had been no provision for any payment by the plaintiff to the defendant, they would have had no ground for complaint. The property was exempt from taxation. The question what, if any, contribution Keene should make to Roxbury under the circumstances was not one involving the judicial ascertainment of each taxpayer's individual share, but of what was a just and equitable division of public expense as between certain bodies of taxpayers. It was for the legislature to decide. In fixing the division of the burden between the two groups, there is no constitutional provision requiring that it shall be so established that taxpayers in both groups shall pay an equal share in proportion to their taxable estate in their group. It is not required that they be treated as one group. From the nature of the question involved, any such limitation would often lead to an inequality greater than that sought to be rectified.
While the ascertainment of the validity of the assignment of the public burden, and the determination of the individual taxpayer's share therein, are judicial proceedings (Boody v. Watson,
The fact that in making the decision as to the division of burden in the present instance, the legislature adopted the current tax rate in Roxbury as one of the elements to be used in fixing the amount of the contribution, does not alter the nature of the charge imposed. As the defendant urged in argument, the question is not one of terminology, but of the substance of the enactment.
Legislative action looking to the ultimate imposition of a tax burden consists of several steps. The group which shall constitute the taxing district is to be determined. Allen v. Bidwell,
This question of equality is a practical one. As was said in the consideration of the constitutionality of the statute compelling towns to contribute to the construction or maintenance of highways in another town: "No doubt there may be individuals in every town concerning whom it would be difficult to discover wherein they are benefited by some roads made therein. Still it would be utterly impracticable to draw the line and say who should be taxed and who should not, for such purposes." Webster v. Alton,
The charge here laid upon Keene is not a tax in Roxbury, but an expense which must be met by taxation in Keene. It is the result of an apportionment of public duty, and is authorized so long as it "does substantial justice." Gooch v. Exeter,
The claim that if the act is sustained many kinds of unequal taxation will be permitted is based upon a misapprehension of the grounds upon which the validity of the act rests. It is true that the land in question could not be taxed except at its value on the taxing date. It is not now held to be taxable otherwise. The legislative power under which the present charge upon Keene is sustained is not one that can be used to vary the rights of individual taxpayers, as between themselves. It touches their rights only in a larger and general way, and as to a subject upon which a reasonable discretion has been given to the legislature.
The argument that the charge imposed is to be treated as a tax upon Keene's property in Roxbury because the act was adopted as an amendment to Public Statutes, chapter 55, relating to taxation, *339 has little weight. The act of 1911 contains certain provisions for exemption from taxation and others for taxation, as well as the: provision under consideration. Because of this, it was properly termed an act relating to taxation, although a part of its provisions might be more properly classified under a different title, if the charge laid were sustained only upon the first ground stated herein.
Questions are also presented as to the meaning of the act of. 1911. In order for property to be exempt from taxation under this statute, two requirements must be met. It must be held for the purposes of a water supply, and it must not yield rent, or revenue in the nature of rent. The argument here has been largely upon the latter proposition. It is urged in behalf of the defendant that the purchase price of timber sold to be cut, water rates collected in Keene and charges for water in Roxbury are all to be classed as revenue in the nature of rent, and that therefore all the plaintiff's property is taxable. It is a matter of common knowledge that every water company makes some kind of a charge for water furnished to consumers. If the statute were to be construed as the defendant contends, it would defeat itself. There would be no town or city that would not be excluded from its benefits. It is manifest that the legislature did not contemplate such a result, or use the language in the sense claimed.
The nature of the transaction involved in supplying water negatives any idea of the relation of landlord and tenant, or the payment by one for the temporary use of property, the general title to which remained in the other. The water is sold, not rented. The claim that the purchase price of the timber sold is revenue in the nature of rent, stands no better. The payment was not for the use of property, but for a transfer of the general title thereto.
But while none of this property is taxable because rented, a portion of it is within the exceptions in the statute, because it has not been held for the purposes of a water supply. The land was held for that purpose, but the timber thereon was held for its value to grow and sell. The situation is much like that in Young Men's Christian Association v. Keene,
So here, the growing of timber, or retaining it upon the land, has no part in promoting the water works enterprise. The timber *340 is grown because Keene elects to put its land held for water works purposes to other and profitable use. And as such use produces tangible property, not used for the water works, it follows that such property is not within the exemption provided by the statute. The same reasoning applies to purchases of property covered with a stand of matured timber. The city may be obliged to buy the timber, in order to get the land; but the timber is not held for the specified use.
The purpose the legislature had in mind was to exempt everything used for the water works, and leave the rest of the holdings subject to taxation. There is no substantial reason why the city should be enabled to engage in the enterprise of growing timber under a tax exemption not applying to private parties. There is nothing in the statute to warrant the conclusion that the legislature intended any such discrimination.
There may be situations where the growth upon the land is promoted or retained to conserve the water supply. When this situation exists the growth is exempt, because it is held for the specified purpose. In the present case, it is evident that the large tract of timber sold in 1922 cannot be treated as theretofore exempt on this ground. Whether any of the other growth still owned by the city is so held, is a question of fact, to be settled in the superior court.
The question whether the charges imposed under the act are properly levied and collected in the same manner as taxes has not been raised by the parties, and does not appear to be material to the merits of the present controversy. Although the payments were not taxes, and technically could not be so treated, yet justice does not require that they be abated and the defendant put to the trouble and expense of collecting them again in some other proceeding. The plaintiff does not seek any abatement on this ground. It concedes its liability to pay according to the terms of the statute, and makes no question as to the method employed in fixing the amount.
It was suggested in argument that this statute affords no authority for taxing the land owned by Keene and not held for the specified purpose. This is true, but it does not aid the plaintiff. Such land is taxable under other statutory provisions. Whitefield v. Dalton,
The value of the growth within the watershed, and not held for water works purposes, should be added to the amount for which the plaintiff was found taxable. The amount upon which it is chargeable under the act of 1911 should be reduced by the amount of the value of the growth, which entered into the original computation of that amount, so far as such growth shall be found to be taxable. The amounts of overpayments found in conformity with these views will be the principal sums for which abatements should be ordered.
Case discharged.
All concurred.