Georgetown selectmen to investigate potential Tree Growth Tax fraud

By Darren Fishell, Times Record
Posted Feb. 16, 2012, at 10:34 p.m.

GEORGETOWN, Maine — Amid local complaints that State Treasurer Bruce Poliquin inappropriately enrolled 10 acres of his Georgetown property in a land use program to receive a lower tax rate, town officials say singling the state official out would be unfair.

In total, there are 10 properties in Georgetown enrolled in the state’s Tree Growth program. Statewide, there are around 11 million acres and over 20,000 separate lots in the program, according to David Ledoux, director of the Maine Revenue Service’s property tax division.

The program allows enrolled lots to have property tax assessments based on the productivity value of the forest rather than the fair market value of the land.

In general, especially for valuable coastal property, the program allows forested land to be placed into a lower property tax bracket, based on the wood type of the lot, if that land is managed for commercial tree harvests.

At a meeting Thursday night, Georgetown resident Myrick “Rick” Freeman called Poliquin’s enrollment in the program “abuse,” based on deed restrictions on Poliquin’s property that prohibit commercial timber harvesting.

Those deed restrictions from the Nature Conservancy existed on the property before Poliquin’s purchase in 2001, specifying that “trees may be thinned only for purposes of view, and the environment shall be completely protected at all times from the excessive cutting of trees.”

Kate Dempsey, a senior policy adviser with the Nature Conservancy, said Thursday that there have been no violations of that agreement.

“He’s not cutting down trees,” Dempsey said. “We walk the land each year and there are no violations to his deed.”

That information, for activists from the nonprofit group Maine’s Majority and for Freeman, raises an apparent contradiction.

“If he knew about the [deed restriction] — and he must have — he knew that he could not harvest trees,” Freeman told the Georgetown Board of Selectmen on Thursday night, “yet he did apply for the Tree Growth program.”

But full-scale logging operations are not required by the program — in fact, no timber harvesting is required at all, according to Ledoux.

By law, qualifying land could include any forested land over 10 acres on which “forest products that have commercial value” are harvested or could be harvested.

In a Maine Revenue Service bulletin on the tax law, those forest products are identified as: “logs, pulpwood, veneer, bolt wood, wood chips, stud wood, poles, pilings, biomass, fuel wood, Christmas trees, maple syrup, nursery products used for ornamental purposes, wreaths, bough material or cones or other seed products.”

And that list is not all-inclusive, Ledoux said.

As for production, Ledoux said there is no requirement or minimum that a given Tree Growth area meet any level of production in terms of raw materials or dollars.

“There’s nothing in the rules that says you have to harvest a certain amount of trees,” Ledoux said. “It comes down to the management plan done with the forester to manage productivity.”

Typically, Ledoux said, the plans for lots included in the program do not involve full-scale commercial timber harvests.

“Most Tree Growth parcels are owned by individuals and not those that you would consider in the wood business,” Ledoux said.

Management plans, Ledoux said, can also be tailored not only to a variety of forest products but also to future harvests.

If, for instance, a wood lot over 10 acres were to be used to produce maple syrup, Ledoux said, the management plan reviewed by a professional forester would be geared toward the sustainable production of that resource but would not necessarily include plans to harvest that resource.

While Nature Conservancy officials confirmed that Poliquin has not been cutting trees on his property, the specific details of the tree growth management plan on the property are unknown.

Ledoux said those documents are considered private by the Maine Forest Service.

Those documents became a political issue on Feb. 2 when state Sen. Troy Jackson, D-Allagash, requested a copy of that plan from the Maine Forest Service.

Since these allegations and others related to a beach club Poliquin owns in Phippsburg emerged, the state official has been silent.

Poliquin did not respond to requests for comment made Thursday to his home and mobile number.

In an investigation into Poliquin’s enrollment in the program, the activist group Maine’s Majority alleges that the move reduced the taxable value of the treasurer’s property by over $1 million, sheltering an estimated $5,000 in property taxes to the town.

Maine’s Majority spokeswoman Matthea Daughtry said Thursday night in Georgetown that the value was calculated by comparing tax returns from 2004 — before Poliquin enrolled his property in the Tree Growth program — to years after Poliquin enrolled in the program.

At Thursday’s meeting in Georgetown, Freeman asked the three-member board of selectmen if there might be any way to recover that estimated property tax loss to the town.

“There are options for rectifying that, but it’s not a simple process or an easy issue,” said chairman Geoffrey Birdsall.

At the state level, a bill recently proposed by Senate President Kevin Raye, R-Perry, calls for an annual random survey of properties in the Tree

Growth program to check for compliance. Another bill presented by Rep. Gary Knight, R-Livemore Falls, would allow local assessors to levy a $100 administrative penalty on landowners for not filing a forest management plan within certain deadlines.

For property that is withdrawn from the program voluntarily or for not complying with the law, there are penalties assessed on the land unless it fits parameters for one of the state’s two other land use tax programs for either farm land or open space.

Knight’s proposal would also make easier the transfer of property between those programs, according to the bill summary, by removing a 15,000-acre cap on land enrolled in the state’s Farm Land or Open Space tax law program.

Locally, Birdsall said the wave of attention on the Tree Growth program “has indicated that it might behoove the town to evaluate all of the lots that are currently in the Tree Growth program to see if compliance is occurring.”

Selectwoman Dolores Pinette agreed.

“To be fair and consistent, we need to check them all,” Pinette said.

Selectman Bill Plummer said he was on the board in 2004 when Poliquin’s property was enrolled in the Tree Growth program, though he said he had no specific recollection of Poliquin’s application and did not know about the deed restrictions prohibiting tree harvesting on the property.

Birdsall said the board would discuss the matter, which was not included on Thursday’s agenda, at a coming meeting.

“He could very well be on the up and up,” Plummer said, “but we don’t know.”

“We’ll find out though,” Birdsall said.

To see more from The Times Record, visit timesrecord.com.

To view Poliquin’s deed, click here.

http://bangordailynews.com/2012/02/16/news/midcoast/georgetown-selectmen-to-investigate-potential-tree-growth-tax-fraud/ printed on July 30, 2014