CHECK BOUNCES
JUNKYARD AND AUTOMOBILE GRAVEYARD LAW
CAMP NEWFOUND
DECIDED
(from Maine
Townsman, "Legal Notes," March 1995)
This Maine Municipal Association publication is presented for "Classroom Use Only." Its intended use is to stimulate and aid in discussion and role playing within a classroom setting.
CHECK BOUNCES
Question: Our treasurer received a personal check from a taxpayer for the full amount of an outstanding real estate tax. Treasurer immediately prepared and recorded a discharge at the Registry of Deeds for a tax lien which had previously been recorded to cover this tax. After the date on which the lien would have automatically foreclosed, the treasurer received notice from the bank that the check did not clear. What should she do?
Answer: The courts considered a personal check as only a conditional payment. Since the check "bounced," the tax legally was never paid so the lien automatically foreclosed. However, this would not be apparent to anyone searching the title to this property at The Registry since the discharge is still on record. There is no way that the treasurer can remove or expunge the discharge from the Registry without a court order. We recommend that the treasurer prepare and record an affidavit outlining what happened and stating that the treasurer considers this parcel of land as still being subject to the tax lien in question. A sample form for such an affidavit is provided on page 33. (By R.W.S./E.P.C.)
JUNKYARD AND AUTOMOBILE GRAVEYARD LAW
Question: A landowner has a large collection of materials on his property which the selectmen believe constitutes "junk" or an "automobile graveyard" as defined in 30-A M.R.S.A. § 3752. The materials include loose boards, iron, barrels, truck bodies, tires and wheels, buckets, cloths, tarps, pipes, tanks, a skidder, a van, two trucks, a camper body, a planer on an open trailer, wheelbarrows, and other unidentifiable objects. The vehicles are in pieces or stored on blocks. The landowner claims that all of these items are his personal property, not "junk" or an "auto graveyard" and that he has plans to use it all at some point. Therefore, he says that he does not need a license and does not need a fence around it. The town would like to prosecute the landowner for a violation of 30-A M.R.S.A. §3751 et seq. (Automobile Graveyard and Junkyard Law). Does this situation violate the law?
Answer: The Maine Supreme Court reviewed a similar situation in Town of Pownal v. Emerson, 639 A.2d 619 (Me. 1994) and held that there was a violation of the State law. In that case, the court concluded that most of the materials in question constituted "junk" as defined in the statute. The landowner's intent to use them in the future was irrelevant where the material being stored "meets the objective definition of the statute."
With regard to the vehicles and miscellaneous parts, the court noted that the statute regulates the use of land to store 3 or more "unserviceable . . . motor vehicles." Relying on the common dictionary definition of the word "serviceable," the court found that an "unserviceable" vehicle is "one not ready for use or not presently usable." The vehicle does not have to qualify as being incapable of service to be "unserviceable." The Supreme Court agreed with the District Court that the vehicles in question were a violation of the statute because they were not presently useable and therefore needed to be licensed an automobile graveyard. (By R.W.S.)
CAMP NEWFOUND DECIDED
In the February Maine Townsman there appeared an article concerning the tax exemption statute governing charitable institutions and three court cases on that subject, one decided and two being considered by the Maine Supreme Judicial Court.
A decision on one of those cases has been handed down. In the case of Camps Newfound/Owatonna, Inc. v. Town of Harrison, Law Court Docket # CUM-94-336, the Court unanimously decided that the summer camp was not eligible or a charitable exemption. William Plouffe, Esq., of the firm Drummond Woodsum, Plimpton & MacMahon of Portland, represented the Town.
The case involved two summer camps under the same ownership that are operated for children of the Christian Science faith. During the tax years in question, 95% of the campers were not residents of Maine and most of the campers paid a weekly fee averaging $400. Maine tax law does not exempt charitable institutions operated principally for persons who are not residents of Maine when the weekly charge exceeds $30. For that reason the town found the camps to be ineligible for exempt status.
The camps appealed and the Superior Court declared the statute's discrimination between charitable institutions serving Maine residents and those serving non-residents to be in violation of the Commerce Clause of the U.S. Constitution. The Commerce Clause grants authority only to Congress to regulate business activity between and among the states, so violations of the Commerce Clause are found when state or local law not expressly authorized by federal law effectively interferes with interstate commerce by providing local advantage to the disadvantage of out-of-state commercial activity.
Maine's Law Court disagreed with the Superior Court after applying the two-tier discrimination test that has been developed by Commerce Clause case law.
The first test is the so-called "per-se rule of invalidity," where the challenged law or ordinance is reviewed on its face to determine if it directly discriminates against interstate commerce or effectively favors local business. The Law Court found that rather than favoring in-state institutions over out-of-state institutions, the charitable exemption statute favored institutions that provide services principally to Maine residents from among the pool of in-state institutions. "The exemption statute treats all Maine charities alike," the Court wrote. "They all have the opportunity to qualify for an exemption by choosing to dispense the majority of their charity locally."
Having passed the "per-se" test, the Law Court then applied the "flexible approach." The flexible approach is used when the challenged law or ordinance only indirectly affects interstate commerce and otherwise regulates evenhandedly. The test under the flexible approach is "whether the state's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits." The Court very easily found that the state's interest in easing the financial burden on charities that principally help Maine people is a legitimate state interest. Just as easily the Court found that the burden on interstate commerce did not clearly outweigh the state's legitimate interest. In fact, the Court suggested that the record showed no evidence of unfair competition or illegal impediments to interstate travel.
The Camp Newfound decision shores up and preserves a component of the charitable exemption statute that had been under attack. It is likely that another component of that statute - the meaning of the word "charitable" - will be clarified in the decision of the Episcopal Camp Foundation, Inc. v. Town of Hope case (Law Court Docket No. KNO-94- 812), which is still forthcoming.
In the meanwhile, the teaching of the Camp Newfound case is that local assessors should continue to investigate interstate travel, both the ratio of out-of-state to in-state campers and the average weekly cost of attendance at camp. It should be remembered, too, that the residence test and the weekly cost test apply to all charitable institutions, not just to summer camps.