EMERSON COLLEGE vs. CITY OF BOSTON & others. [Note 1]

ABRAMS, J. In 1982, the Legislature conferred authority on the city of Boston to impose a charge for fire protection against the owners of certain buildings that "by reason of their size, type of construction, use and other relevant factors . . . require[] the city to employ additional firefighters, deploy additional equipment and purchase equipment different in kind from that required to provide fire protection for the majority of structures." St. 1982, c. 190, Section 30. [Note 2] Under the statute, the city "is authorized to impose a fee for augmented fire services availability pursuant to [St. 1982, c. 190, Section 30] or pursuant to an ordinance enacted by the city of Boston not inconsistent with [St. 1982, c. 190, Section 30]."

On February 16, 1983, after the plaintiff's suit was initiated, the Boston city council, acting pursuant to the statute, promulgated an ordinance establishing augmented fire services availability (AFSA). The plaintiff's motion for a preliminary injunction against imposition of the AFSA charge was denied on February 24, 1983. On the same date, the mayor of Boston approved the AFSA ordinance. City of Boston Code, Ordinances, Title 14, Section 459, as amended February 24, 1983. [Note 3]

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The plaintiff, a tax exempt educational institution, owns fourteen buildings in the city, containing classrooms, administrative offices and dormitories. These buildings were inspected by the fire department in December, 1982, to determine whether they were subject to the charge. On January 27, 1983, the plaintiff brought an action pursuant to G. L. c. 231A, Section 1, requesting a declaratory judgment and injunctive relief. The plaintiff's complaint alleged that the AFSA charge is in effect a tax on real property from which Emerson is exempt under G. L. c. 59, Section 5. The plaintiff also alleged that the AFSA charge violates the constitutional requirement that property taxes be "proportional and reasonable," Part II, c. 1, Section 1, art. 4, of the Massachusetts Constitution, and that computation of the charge by the fire commissioner constitutes an unconstitutional delegation of taxing authority to an administrative official. On March 1, 1983, the city mailed bills totaling $12,029 for AFSA charges assessed against three of the plaintiff's buildings. [Note 4]

After the denial of a second motion for a preliminary injunction, the case was heard on March 28 and 29, 1983. On April 1, 1983, the judge issued a memorandum and order declaring the statute and the ordinance invalid as applied to the plaintiff and facially unconstitutional, and enjoined their enforcement. The judge found that the statute permits the city to exact a charge

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"based on a complex, sophisticated but not scientifically proven or generally accepted formula, which attempts to assess costs of providing life safety services in terms of gallons per minute." The judge found that "[t]he buildings against which the charge (tax) [was] levied [were] not uniformly selected nor assessed." He determined that the AFSA charge was not a fee because "[a] fee is based on services performed or delivered and not on anticipatory expenses for services which may never be needed . . . ." Quoting Williams College v. Williamstown, 219 Mass. 46, 48 (1914), he concluded, "Protection from fires always has been treated as a general function of government."

The judge declared "that the money sought to be collected by the city under sec. 30 of Chapter 190 of the Acts of 1982 and/or Title 14, sec. 459 of the Ordinances of the City of Boston, approved by the Mayor on February 24, 1983 is a tax and not a fee." He noted that the plaintiff is a tax exempt institution. He then declared that the money "sought to be raised [was] a real estate tax and not an excise tax," and, further, that the tax was not "proportional and reasonable." See Part II, c. 1, Section 1, art. 4, of the Massachusetts Constitution. [Note 5] The judge reported his

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decision to the Appeals Court. We granted the parties' joint application for direct appellate review. [Note 6] We conclude that the AFSA charge is a chimera, bearing features of both a fee and a tax, but not valid in either form. Therefore, we affirm the judgment invalidating the statute and the ordinance.

We summarize the relevant provisions of the AFSA statute and ordinance, as well as pertinent testimony presented at the Superior Court hearing. The proclaimed purpose of the statute "is to assure the city's continued ability to provide the availability of fire fighting services in excess of the degree of such services provided to the general public by imposing the cost of making available such extra services on those to whom such extra services are made available." St. 1982, c. 190, Section 30 (2). The statute thus distinguishes two classes of building owners. In one class are owners of buildings who are deemed members of the "general public," to whom fire protection services are made available without any charge beyond the annual property tax. In a distinct class are building owners who, by implication, are not considered members of the "general" public, and who, in addition to the property tax, if any, assessed against them, [Note 7] must pay an AFSA charge for the availability of fire protection. A building-owner is subject to the AFSA charge if the "total fire fighting capacity . . . necessary to extinguish a fully involved fire" in the building exceeds 3,500 "gallons per minute." St. 1982, c. 190, Section 30 (3) (i), (ii).

The statutory scheme is based on a legislative determination that a disproportionate percentage of the city of Boston's firefighting budget is consumed by expenses related to the maintenance of equipment and personnel capable of protecting buildings with

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physical characteristics requiring, in the event of a fire, the presence of more than fourteen fire companies. The fire commissioner said that 3,500 gallons per minute is the functional equivalent of fourteen fire companies, [Note 8] the personnel and equipment necessary to combat a three-alarm fire.

There are currently fifty-six and one-half fire companies [Note 9] in Boston. Of that number, forty-eight companies would suffice to combat simultaneously one 3,500 gallon per minute fire and one smaller, 2,000 gallon per minute fire, while maintaining four companies available for discretionary use as well as one fire engine and one truck on standby in each of the city's eleven fire districts. The remaining eight and one-half companies are maintained to guard against the potential occurrence of a fire exceeding the 3,500 gallon per minute category. The parties stipulated that the Boston fire department's costs for fiscal year 1983 would be $76,877,152. According to the director of the city's office of fiscal affairs (OFA), $10,114,502 of that sum is allocable to the personnel, equipment, and overhead costs of providing AFSA. [Note 10] Over 13% of the Boston fire department's costs for fiscal year 1983 can thus be traced to AFSA. [Note 11] After applying a statutory formula, which we discuss

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infra, to data collected through inspections of approximately 5,000 buildings, [Note 12] the fire commissioner determined that, in 1983, some 2,000 buildings, or 2% of the buildings in Boston, necessitate AFSA.

The statute requires that, prior to March 1 of each year, the fire commissioner determine not only which buildings in Boston are subject to the AFSA charge, but also the amount of the charge to be assessed each such building. A formula set forth in the statute establishes three principal factors to be considered by the fire commissioner in establishing whether, in the event of fire, a building would require more than 3,500 gallons per minute of fire fighting capacity.

One factor, the "needed fire flow" (NFF), measures the personnel and equipment necessary to extinguish a fire in the building. The NFF is determined by reference to various subfactors: the building's construction type, including the fire resistance of its constituent materials; the effective area of the building in square footage; the use of the building, including the combustibility of its contents; and "exposure" and "connecting passage-ways" subfactors, which measure the risk that a fire would spread to adjacent buildings. St. 1982, c. 190, Section 30 (3) (iii).

The second factor, the "life risk factor" (LRF), measures the personnel and equipment necessary to ensure the safety of the occupants of the burning building. The LRF takes into account the building's density of occupancy, hours of occupancy, number of stories, and whether the building contains smoke removal equipment. St. 1982, c. 190, Section 30 (3) (v).

The third factor is a "suppression credit" (S), which operates to reduce the gallons per minute computation by an amount that reflects a building's existing fire suppression and detection equipment.

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St. 1982, c. 190, Section 30(3)(iv). The department's consultant indicated that a suppression credit is granted for smoke and heat detectors connected to an alarm at the fire department. A larger suppression credit may be obtained if a building has standpipes with outlets to which fire hoses can be connected. A building's sprinkler systems also reduce the total gallons per minute computation. [Note 13]

The three factors, as incorporated in the statutory formula, yield a "total fire flow" (TFF) computation expressed in gallons per minute. St. 1982, c. 190, Section 30 (3) (ii). If a building's TFF exceeds 3,500, it is subject to the AFSA charge. Every gallon per minute in excess of 3,500 is considered an AFSA "unit." The OFA director testified that the total number of AFSA units for fiscal year 1983, as determined by the fire commissioner's application of the formula to data collected through building inspections, is 4,624,828. The $10,114,502 in costs attributable to AFSA protection was divided by 4,624,828 to yield a cost per AFSA unit of $2.187.

After inspecting the plaintiff's buildings, the fire commissioner determined that three of the buildings had AFSA requirements measured, respectively, at 1,250, 2,500, and 1,750 AFSA units. Accordingly, the plaintiff received bills of $2,734, $5,468, and $3,827 for the three buildings.

Because the AFSA charges are based on the availability of fire protection, the plaintiff, and other owners of AFSA structures, must pay the charges irrespective whether the fire department's services are actually utilized to battle fires in the specific buildings for which the charges are imposed. Charges are payable in two instalments. On payment of the first instalment, the owner paying an AFSA charge may appeal the correctness of the assessment to the commissioner. No further review, either administrative or judicial, is authorized by the statute. [Note 14] The statute directs that "[r]evenues received

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[from AFSA charges] shall be used to restore and maintain adequate public safety forces in the city of Boston which shall be defined as police and fire services." St. 1982, c. 190, Section 30 (4). [Note 15]

1. Our initial inquiry pertains to the nature of the monetary exaction imposed by the AFSA statute. The city argues that the judge erred in rejecting the statutory characterization of the charge

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as a fee, and in holding that the charge is a property tax. Consequently, the city alleges, the judge's conclusion that the plaintiff is insulated from paying the charge by the G. L. c. 59, Section 5, property tax exemption was erroneous, as was the judge's determination that the statute is facially inconsistent with constitutional limitation on the taxing power.

In reviewing the statute, we are bound, as was the judge, to treat with deference the classification of the charge as a fee. "In any doubtful case, the intention of the Legislature, as it may be expressed in part through its characterization [of the charge] . . . deserves judicial respect, and especially so where the constitutionality of the exaction depends on its proper characterization" (footnote omitted). Associated Indus. of Mass., Inc. v. Commissioner of Revenue, 378 Mass. 657, 667-668 (1979). See Opinion of the Justices, 250 Mass. 591, 597 (1924). Ultimately, however, the nature of a monetary exaction "must be determined by its operation rather than its specially descriptive phrase." Thomson Elec. Welding Co. v. Commonwealth, 275 Mass. 426, 429 (1931). Accord Eaton, Crane & Pike Co. v. Commonwealth, 237 Mass. 523, 528 (1921). See Dawson v. Kentucky Distilleries & Warehouse Co., 255 U.S. 288, 292 (1921); Gunby v. Yates, 214 Ga. 17, 19 (1958).

With these considerations in mind, we turn to the question whether the AFSA charge is a fee. Fees imposed by a governmental entity tend to fall into one of two principal categories: user fees, based on the rights of the entity as proprietor of the instrumentalities used, Opinion of the Justices, 250 Mass. 591, 597 (1924), or regulatory fees (including licensing and inspection fees), founded on the police power to regulate particular businesses or activities, id. at 602. See Boston v. Schaffer, 9 Pick. 415, 419 (1830); P. Nichols, Taxation in Massachusetts 6-9 (3d ed. 1938). Such fees share common traits that distinguish them from taxes: they are charged in exchange for a particular governmental service which benefits the party paying the fee in a manner "not shared by other members of society," National Cable Television Ass'n v. United States, 415 U.S. 336, 341 (1974); they are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and

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thereby avoiding the charge, Vanceburg v. FERC, 571 F.2d at 630, 644 n.48 (D.C. Cir. 1977), cert. denied, 439 U.S. 818 (1978), and the charges are collected not to raise revenues but to compensate the governmental entity providing the services for its expenses. [Note 16]

The city emphasizes that the factors used to determine the amount of each AFSA assessment are related to the city's costs in providing AFSA protection and urges that, on this basis alone, the charge be characterized a fee. We agree that, in its correlation to the costs of funding the personnel and equipment constituting eight and one-half of Boston's fire companies, the AFSA charges bears some similarity to a user fee.

The AFSA charge fails, however, to comply with another essential characteristic of a fee. Fees are legitimate to the extent that the services for which they are imposed are sufficiently particularized as to justify distribution of the costs among a limited group (the "users," or beneficiaries, of the services), rather than the general public. The benefits of "augmented" fire protection are not limited to the owners of AFSA buildings. The capacity to extinguish a fire in any particular building safeguards not only the private property interests of the owner, but also the safety of the building's occupants

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as well as that of surrounding buildings and their occupants. In more sparsely populated areas, it may be possible to isolate private property interests in fire suppression from the property and safety interests of the public at large. In a large, densely populated city like Boston, "the prevention of damage to buildings by fire is an object which affects the interest of all the inhabitants and relieves them from a common burden and danger." Fisher v. Boston, 104 Mass. 87, 93 (1870). See Williams College v. Williamstown, 219 Mass. 46, 48 (1914).

That a particular building requires "augmented" rather than regular fire protection does not change the nature of the benefit conferred by the suppression of a fire in that building from one that is public to one that is limited to the owner of the building. The statutory formula controlling the assessment and computation of AFSA charges illustrates this by factoring in not only the fire fighting capacity necessary to preserve a particular structure in the event of fire, but also the personnel and equipment necessary to safeguard the building's occupants and to prevent the spread of fire to adjacent buildings.

Further confirmation of the public nature of the benefit conferred by AFSA services may be derived from the fact that "use" of AFSA protection is compelled. Fees generally are charged for services voluntarily requested. See National Cable Television Ass'n v. United States, 415 U.S. 336, 340 (1974). If the benefits for which AFSA charges are imposed were limited to the owners of AFSA structures, rather than being essential to the public welfare, there would be no reason to depart from the optional character of a traditional fee. [Note 17]

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Although we need go no further to sustain the judge's conclusion that the AFSA charge is not a fee, we note additionally that, by statutory command, the amounts collected through AFSA assessments are targeted not for the maintenance of the eight and one-half fire companies attributed to AFSA protection but to general "police and fire services." St. 1982, c. 190, Section 30 (4). That revenue obtained from a particular charge is not used exclusively to meet expenses incurred in providing the service but is destined instead for a broader range of services or for the general fund, "while not decisive, is of weight in indicating that the charge is a tax." P. Nichols, supra at 7. Opinion of the Justices, 250 Mass. at 597. The statutory earmarking of proceeds for non-AFSA services is more consistent with a revenue raising purpose than with an intent to recover AFSA-related expenditures. The AFSA charge thus resembles not a fee, but a tax, which has been defined as "an enforced contribution to provide for the support of government." United States v. Tax Comm'n, 421 U.S. 599, 606 (1975), quoting United States v. LaFranca, 282 U.S. 568, 572 (1931). [Note 18]

2. The city contends that even if St. 1982, c. 190, Section 30, imposes a tax rather than a fee, the judge erred in holding that the charge is a disproportionate real property tax instead of a valid excise tax. The Legislature is constitutionally authorized to levy excises "upon any produce, goods, wares, merchandise and commodities." Part II, c. 1, Section 1, art. 4, of the Massachusetts Constitution. The term "commodities" encompasses "convenience, privilege, profit, and gains." Minot v. Winthrop, 162 Mass. 113, 120 (1894). The city suggests that the AFSA charge qualifies as an excise on the "privilege" of receiving an extra

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level of fire protection. It is well-established, however, that the obligation to pay an excise tax "is based upon the voluntary act of the person taxed in . . . enjoying the privilege . . . which is the subject of the excise" and that an excise may be imposed only where "the element of absolute and unavoidable demand is lacking." P. Nichols, supra at 16. Owners of AFSA structures are not at liberty to reject AFSA services. To the extent that payment of AFSA charges may be avoided by relinquishing ownership of buildings subject to AFSA assessments, the charges tax the privilege of owning certain improved property. "The mere right to hold and own . . . property cannot be made the subject of an excise." Opinion of the Justices, 220 Mass. 613, 626 (1915). The judge correctly concluded that the statute does not impose a valid excise tax. [Note 19]

The AFSA charge does not conform to any constitutionally permissible form of monetary exaction. The judgment of the Superior Court, declaring St. 1982, c. 190, Section 30, and City of Boston Code, Ordinances, Title 14, Section 459, as amended February 24, 1983, invalid, is affirmed.

So ordered.