Maine’s Highest Court Recognizes Many Public Benefits of Conservation
Maine’s highest court issued a striking endorsement of land conservation organizations’ many contributions to the cultural, health, societal, economic and environmental public good—contributions that benefit all citizens of Maine and, by implication, our entire country. The court followed the equally strong Massachusetts highest court decision issued in May and the earlier cases in New Mexico, Florida, and New York to establish a solid national precedent that conservation activities benefit the public and relieve the burdens of government.
Maine's highest court, the Supreme Judicial Court (SJC), ruled Thursday that the Francis Small Heritage Trust’s (FSHT) preservation of forest and other land qualifies as a charitable purpose under state law, and that Maine’s Open Space Tax Law (similar to the current-use and other tax abatement statutes around the country) did not supplant the property tax exemption and that FSHT’s conservation parcels are eligible for exemption from local property taxes. The Maine SJC reviewed the few cases in appellate courts in other states mentioned above and the Massachusetts SJC ruling from May noting that they all “concluded that land conservation is a charitable purpose …” Francis Small Heritage Trust Inc. v. Town of Limington, Law Docket No. YOR-13-511 (August 7, 2014).
Conservation Benefits Everyone
As the Massachusetts SJC wrote, “[W]e are not alone in recognizing conservation organizations as serving a traditionally charitable purpose by lessening the burdens of government.” New England Forestry Foundation v. Hawley, SJC-11432 ( May 15, 2014).
The Maine SJC opinion further stated that their “… opinion gives us the opportunity to review the real estate tax status of land fully devoted to conservation and free public access. …There can be little doubt that the Legislature has enunciated a strong public policy in favor of the protection and conservation of the natural resources and scenic beauty of Maine. …The Trust’s purpose is to conserve natural resources for the benefit of the public. The Trust has opened its properties to the public year-round, free of charge, and permits school field trips, hunting, fishing, hiking, cross-country skiing, and snowmobiling. As the Superior Court determined, the Trust essentially operates its properties in the manner of a state park in the Sawyer Mountain region. In doing so, the Trust assists the state in achieving its conservation goals …. An educational program on sustainable forestry is consistent with the Trust’s charitable purposes. … We therefore hold that, under the circumstances of this case, the Trust is organized and conducted for benevolent and charitable purposes within the meaning of section 652(1)(C)(1).”
The Maine SJC further noted that part of the rationale for granting exemption for charitable institutions is that their charitable activities relieve the government of part of its burden because of the public benefits the charity confers. So the property tax exemption is in exchange for their services in providing something which otherwise the government would have to provide. The court noted that providing opportunities for even “casual and limited group recreational and relaxation activities” can constitute an exchange because it “provid[es] something that government would otherwise provide, through the government system of parks, public lands, and recreational facilities”.
Rob Levin and Karin Marchetti Ponte co-authored the joint brief of the Maine Coast Heritage Trust and the Land Trust Alliance in the Maine case. Rob also authored the joint brief with the Massachusetts Land Trust coalition and the Land Trust Alliance brief in the Hawley case. See the appellate decision here and the Maine SJC opinion here.
Francis Small Heritage Trust Background
Francis Small Heritage Trust (FSHT) is a land trust that owns several contiguous parcels of land comprising the Sawyer Mountain Highlands Preserve in the Town of Limington. All of the parcels were open to the general public for a variety of recreational uses, and FSHT held occasional educational events on the parcels. FSHT acquired the parcels at different times, and enrolled some of the parcels in the current use Tree Growth program, while enrolling others in the current use Open Space program, both of which reduced property taxes. After the Town dramatically increased the tax assessment in 2009 (FSHT’s annual property tax assessment for these parcels was doubled to $6,000) FSHT applied for outright exemption and was denied by the Town. FSHT then petitioned the Maine Board of Property Tax Review, and eventually appealed in court.
The Town argued that the Open Space property tax program was intended by the Legislature to pre-empt exemption for land conservation properties. Also at issue was whether land conservation in and of itself is a charitable use within the meaning of Maine’s property tax exemption statute. Finally, FSHT claimed federal civil rights violations based on evidence that the Town had denied the exemption application because FSHT had successfully brought a lawsuit against the Town relating to an abutter’s subdivision application.
One of the reasons cited by the Town in denying FSHT’s application was a lengthy purpose statement in its Articles of Incorporation that included “protecting appropriate uses such as logging, farming and other compatible commercial activities.” The Town and subsequent local and state administrative bodies ruled that this language meant that FSHT was not organized for exclusively charitable purposes because it could engage in commercial activities on its properties. Also at issue was whether land conservation in and of itself is a charitable use within the meaning of Maine’s property tax exemption statute.
Trial Court Decision
The trial court held for FSHT on the exemption issue, finding in very forceful language that land conservation is charitable. As the court wrote: “The direct and indirect value of open space preservation particularly when, in appropriate cases, it is coupled with access for a wide variety of recreational activity is within any modern definition of a charitable institution. In addition to the ecological and environmental benefit of land preservation there are numerous physical, psychological and, for some, even spiritual benefits to having access to undeveloped land.”
Furthermore, the court rejected the Town’s interpretation of the purpose language in the Articles, noting that this provision permits the "protection" of logging, farming and other compatible commercial activities, but does not directly authorize or require such activities be conducted by FSHT. The court noted that no such commercial activities had taken place on the disputed parcels, and even if it had, limited commercial activities would likely be incidental and therefore not disqualifying of exemption. Finally, the court found that the Open Space statute did not pre-empt the property tax exemption statute.
Superior Court Decision
The Town appealed the trial court decision. Superior Court (Justice Fritzsche) held for FSHT on the exemption issue, finding in very forceful language that land conservation is charitable. In its key paragraph, the Court wrote: "It is time to directly declare that a legitimate land trust, such as this one, which meets the statutory and case law requirements, is a benevolent and charitable institution exempt from local property taxes. The direct and indirect value of open space preservation particularly when, in appropriate cases, it is coupled with access for a wide variety of recreational activity is within any modern definition of a charitable institution. In addition to the ecological and environmental benefit of land preservation there are numerous physical, psychological and, for some, even spiritual benefits to having access to undeveloped land."
Massachusetts Parallel Case Decided for Land Trust in May
Massachusetts' highest court, the Supreme Judicial Court (Mass SJC), ruled in May that the New England Forestry Foundation’s (NEFF) preservation of forest land qualifies as a charitable purpose under state law and that NEFF’s conservation parcels can be exempt from local property taxes. As the SJC wrote, “[W]e are not alone in recognizing conservation organizations as serving a traditionally charitable purpose by lessening the burdens of government.” New England Forestry Foundation v. Hawley, SJC-11432 ( May 15, 2014).
Notably, the Mass SJC found that conservation land could be exempt even if no public access is permitted: “As the science of conservation has advanced, it has become more apparent that properly preserved and managed conservation land can provide a tangible benefit to a community even if few people enter the land.” The SJC, however, did articulate a careful standard that if a charitable organization actively excludes the public, it faces a heightened burden to show that exclusion is necessary to achieve its public purpose. See the “tests” discussion for those details.
The NEFF and the FSHT cases represented an opportunity to establish the many benefits and public good that land trusts and their supporters provide. The Land Trust Alliance is pleased that the Massachusetts Supreme Judicial Court and the Maine Supreme Judicial Court recognized the innumerable public benefits from conserved land in the culture, economy, health, climate, land, water, nature and community of everyone in the America thereby lessening the burdens of government and making public tax dollars go further, especially as towns and cities continue to have budget deficits that affect their ability to provide all necessary services.
If all land trusts – and other charities- had been forced to begin to pay property taxes for the land they hold, there would have been significant adverse consequences to all people as well as the lands we cherish, and the land trusts that protect these lands for the public good. In keeping conserved places, we nurture that which defines us and contributes in countless ways to a better life for all.
As an organization that focuses on potential effects of land conservation nationwide, the Alliance collaborated with the Massachusetts Land Trust Coalition and the Maine Land Trust Network to file a joint amicus brief and followed these cases closely. The Massachusetts Audubon Society, The Nature Conservancy, The Trustees of Reservations, and many other Massachusetts conservation organizations worked in partnership with the New England Forestry Foundation and the Land Trust Alliance on the NEFF case.
The briefs on NEFF v Hawley and in Francis Small Heritage Trust Inc. v. Town of Limington are in the collection on property tax exemption cases in The Learning Center.
See the media coverage on the related New York attempts to strip property tax exemptions gained from prior court rulings:
Read a primer on property tax exemption for Maine »