I am convinced that the 10 per cent exaction which the majority opinion deems a penalty is not a penalty. Neither of the parties to this cause regard the 10 per cent charge as a penalty. The case was submitted to us by the parties upon the premise that the 10 per cent exaction is non-penal in character. The Attorney General's brief, referring to the 10 per cent charge, says:
"The use of the word penalty is obviously a misnomer or an unwise selection of a word, for wherein is the 10 per cent any more of a penalty than the other fees or charges imposed under the act?"
The Attorney General regards the 10 per cent charge as the same in character as the charge of five cents per acre made by the State Forester for providing fire protection. I shall shortly quote his reasons. The respondents, of course, do not deem the charge a penalty. They regard it as a tax. In view of the *Page 29 fact that the Attorney General conceded that it was not a penalty, and the respondents regarded it as a tax, the decision that it is a penalty has not been preceded by any argument upon that phase of the case. The trial judge, in a memorandum opinion, said: "The so-called 10 per cent is not a penalty." The majority, without assigning any reason for their interpretation of the nature of the charge, hold that it is a penalty. I do not concur in that view.
As I shall later show, the nature of the 10 per cent charge is important. There are three possibilities: (1) it is a tax, as the respondents contend; (2) it is a penalty, as the majority hold; or (3) it is a charge for service rendered by the State Forester. There are many instances of charges made by the governmental bodies for advantages which they bestow upon the citizen; for instance, a sawmill proprietor who buys timber from the state pays for it; a rancher who is permitted to pasture livestock in a forest preserve pays for the privilege. No one deems those payments as penalties.
If the 10 per cent charge is a penalty, the legislature, in writing the act before us (chapter 356 of 1935 Oregon Laws, now § 107-243, O.C.L.A.), certainly chose a most illogical part of the act in which to insert the provision about the penalty. Generally, statutes which impose penalties place the latter in the same sentence or paragraph which delineates the forbidden act or conduct; that is, generally, penal statutes, after prohibiting a specific course of conduct, say that any one who violates the prohibition shall be penalized with the penalty which the next part of the act sets forth. This act does nothing of that kind. Its forerunner (1913 Oregon Laws, chapter 247) authorized the State *Page 30 Forester to provide fire protection for timberland at a cost of not to exceed five cents per acre and said:
"Any amount so paid or contracted to be paid by the state forester, shall be a lien upon the property, and shall be reported by the state forester to the county court of the county in which such lands are situated, and shall by such court be levied and collected with the next taxes on such lands * * *."
The part of the 1935 act which the majority say added a penalty to that statute inserted after the words "Any amount so paid or contracted to be paid by the state forester" the following: "together with a penalty of ten (10) per cent thereof." No other part of the act says anything about a penalty; nor does any part of the act mention any wrong for which a penalty is imposed. In other words, the purported penalty is set forth in this statute in the part which makes provision for the collection of the forester's charges for fire protection. The very fact that it would be novel to insert in that place a provision for a penalty is a strong indication that the exaction is not a penalty.
The only reason which can be given, so I believe, for saying that the 10 per cent exaction is a penalty is that the statute uses that word. But the instances are legion in which courts declined to place upon words their normal meaning or disregarded a word. The rule is stated in Fox v. Galloway, 174 Or. 339,148 P.2d 922, and State v. Gates, 104 Or. 112, 206 P. 863. The following is taken from Cooley on Taxation, 4th ed., § 37:
"Whether an imposition is a tax cannot be determined by the name given it by the statute creating the imposition, although such name is entitled to some weight, it would seem, in determining the intention of the legislature. In other words, an imposition *Page 31 is not a tax merely because the statute providing therefor calls it a tax. On the other hand an imposition may be a tax although the statute creating it refers to it as something else."
If the words "a penalty of" upon which the majority depend are disregarded, the act will remain complete. As I shall presently show, those three words are unnecessary and are out of harmony with the purpose of the act. They should be disregarded.
Let us take note of the reasons given by the Attorney General for his belief that the 10 per cent exaction is not a penalty. That official has an intimate knowledge of legislative history. He announced his interpretation three years before this matter became involved in controversy. In May of 1944 the Attorney General was requested by the Interim Committee on Tithing for an opinion concerning the validity of the very act and charge now before us. He responded to the committee's request with a carefully prepared opinion, from which I now quote:
"The use of the word `penalty' in the amendatory act is a misnomer, for the 10% increase is payable without regard to delinquency in the payment of assessments and partakes no more of the nature of a penalty than the assessments collected to meet the direct costs of fire protection under Article II, chapter 2, Title 107, O.C.L.A. In reality, the so-called penalty effected simply a blanket increase in the amount of the assessments. * * *
"The assessments rest upon the theory that a benefit is conferred upon the affected property. * * *
"There remains the question of whether the blanket 10% increase in the assessments * * * gives the law the character of a revenue rather than a police measure, * * *.
"It is recognized that any governmental activity, to some extent enhances the general expenses of *Page 32 government. The exact amount of the added burden is, I assume, not susceptible to exact computation, but the principle is well settled that the legislature is not required to compute such matters with mathematical certainty. It would be presumed that the 10% payable to the general fund is reasonably proportionate to the increase in general expenses resulting from the fire protection program." Opinions of the Attorney General, 1942-1944, page 457.
As is indicated by the language just quoted, the Forester has not charged the owner of timberland the entire cost to the state of the fire protection which he furnishes when he has charged for only the out-of-pocket disbursements which he made in providing the protection. The Forester maintains lookout stations; he possesses fire-fighting equipment and maintains roads and trails. Implements and facilities of that kind entail investments and are subject to depreciation. Further, the Forester has an office force and over the Forester are superior officials. All of the foregoing enters into the cost of service rendered by the Forester. Let us resort to an example: If the Forester's charge is not paid and it is necessary to foreclose a certificate of delinquency, the district attorney performs that service with a resulting benefit in the long run to all owners of timberlands. It is reasonable that a fair part of this overhead should be deemed by the legislature a part of the cost of fire protection. In short, the Forester's out-of-pocket disbursements do not constitute the sole expense to the state for providing fire protection.
The opinion of the Attorney General from which I quoted gave a good explanation of why it was necessary in 1935 to increase the income of the State Forester by adding to the existing charge of five cents *Page 33 per acre 10 per cent for overhead. I continue the quotation:
"Although the 10% increase is not earmarked for payment to the general fund I assume it was added to meet the tithe required by section 92-211 and thereby avoid impairment of the funds available for fire protection. The statute requires that the assessments be based upon actual cost of the service rendered and any diversion of the proceeds would be inconsistent with this statutory formula for determining the amount of the assessments. Consequently, the legislature avoided such an inconsistency by providing additional revenue with which to pay the tithe. The simultaneous enactment of chapters 355 and 356, Oregon Laws, 1935, fortifies this conclusion."
Section 92-211, O.C.L.A., to which reference is made in the quoted language is chapter 355 of 1935 Oregon Laws. It is the Tithing Law. Chapter 356 of 1935 Oregon Laws, to which the quotation also refers, is the very act we are now construing — it adds to the Forester's charge for fire protection ten per cent thereof.
The explanation just quoted shows why the 10 per cent exaction was added to the charge already authorized of five cents per acre. It shows clearly that the additional charge was not intended to be a penalty. The addition was made because (1) the charge of five cents per acre brought to the Forester a return of only the out-of-pocket disbursements which he made in providing fire protection; (2) the cost to the state of the fire protection was more than five cents per acre; and (3) the tithe levied by 1935 Oregon Laws, chapter 355 (§ 92-211, O.C.L.A.) took from the Forester 10 per cent of his charge of five cents per acre and, therefore, would have left him with only $.045 per *Page 34 acre — less than his actual disbursements, had not chapter 356 been simultaneously enacted.
As the Attorney General shows in the language above quoted, the Tithing Act (1935 Oregon Laws, chapter 355) which takes out of the Forester's receipts 10 per cent of their total, and the act which we are now construing (1935 Oregon Laws, chapter 356) which increased the Forester's charge 10 per cent, were passed on the same day. They were companion measures. It seems obvious that the legislature, after taking from the Forester for the benefit of the state's general fund 10 per cent of his charges for fire protection, wished to restore his funds to solvency and therefore authorized him to make a blanket increase of 10 per cent of his charges. Obviously, the purpose was not to penalize anyone. The sole purpose was to balance the Forester's accounts.
The decisions uniformly ascribe weight and cogency to the interpretation placed by executive officials upon statutes entrusted to their enforcement. For instance, as long ago as 1827 the Federal Supreme Court said:
"In the construction of a doubtful and ambiguous law, the contemporaneous construction of those who were called upon to act under the law, and were appointed to carry its provisions into effect, is entitled to very great respect." Edwards v. Darby, 25 U.S. 206. See also 42 Am. Jur., Public Administrative Law, §§ 77-85.
The reasons why contemporaneous administrative interpretation is entitled to respect are several in number. Generally, such officials as the attorney general and the administrative officers are intimately familiar with the problems to which the statute which they construed is applicable. Not infrequently those officials themselves drafted the measure and, therefore, *Page 35 knew its purpose. Those who deal with the state, its officials and agencies, regard as authoritative interpretations placed by the officials upon the statutes which they administer. In the present instance, since the interpretation which is before us was announced by the attorney general after a careful analysis by him of the act and the circumstances under which it was enacted, it should not be disregarded except for urgent reasons. None whatever have been called to this court's attention.
Notwithstanding all of the foregoing, the majority deem the 10 per cent exaction as a penalty. Normally, no one is penalized unless he has done a wrong. Let us see whether the act before us regards it as a wrong for an owner of timberland to look to the Forester for fire protection.
Section 107-241, O.C.L.A., which is a part of the legislation containing the 10 per cent phrase, says:
"Every owner of timberland in the state of Oregon shall furnish or provide therefor, * * * adequate protection against the starting or spread of fire thereon or therefrom which shall meet with the approval of the state board of forestry."
Section 107-243 says:
"In case any owner or owners shall fail or neglect to provide such protection against the starting or spreading of fire, then the state forester * * * shall provide the same at a cost of not to exceed five cents (5¢) per acre * * *."
That statute permits the owner to provide the fire protection himself or have the Forester provide it for him. Carter v. LaDeeLogging Co., 142 Or. 439, 18 P.2d 234, 20 P.2d 1086. The decision in that case, after setting forth the part of § 107-241, O.C.L.A., just quoted, expressly mentioned the part of § 107-243, above *Page 36 quoted, which provides that in the event the owner does not himself provide the fire protection, the State Forester shall do so. The opinion then said that the timberland owner (Union Lumber Company, Ltd.) which the plaintiff claimed had failed to provide fire protection, had, in fact, paid the Forester for the protection which he had furnished for many years. The decision held:
"Therefore, no liability would attach to the Union Lumber Company, Ltd., by virtue of § 42-406, Oregon Code 1930, as such lands were, within the meaning of the statute, adequately protected."
Section 42-406, Oregon Code 1930, which is now § 107-208, O.C.L.A., renders inadequately protected forest land covered by inflammable debris a nuisance. It is clear from that decision that an owner who secures protection from the Forester has omitted nothing demanded of him. Upon accepting and paying for the fire protection afforded by the Forester he has met all requirements. After he has done so, there can be no basis for assessing a penalty against him. There is no more reason for assessing a penalty against him than there was in the Carter case for declaring his land to be a nuisance.
The precurser of the 1935 act was 1913 Oregon Laws, chapter 247. The latter did not include the 10 per cent clause and limited the charge to five cents an acre. No one deemed the latter charge a penalty. In First State Bank v. Kendall LumberCo., 107 Or. 1, 213 P. 142, which sustained the validity of the 1913 act, the charge was termed "an indebtedness imposed under the police power" and its size was held to be "the expense of the State Forester in patrolling" the land. Clearly, such a charge, based upon a quid pro quo, can not be a penalty. The 1913 act remained *Page 37 unchanged for 24 years, and then came the 1935 amendment. The sole addition made to the existing law by the 1935 amendment is the following: "together with a penalty of ten per cent thereof." For emphasis, I state that the 1935 amendment made no other change whatever. The amendment certainly delineates no wrong. If the 10 per cent exaction is the imposition of a penalty for a wrong, it is impossible to know what statute created the wrong. To make matters clear, attention is directed to the fact that the 10 per cent exaction is not assessed against only those timberland owners who fail to pay the five cents an acre, but it, like the five cents per acre charge, is exacted of every owner of timberland who does not himself provide fire protection. SinceCarter v. LaDee Logging Co., supra, holds that an owner who accepted and paid for fire protection furnished by the Forester has met all of the requirements of the act, there can be no basis for penalizing him. The act does not render it wrong for an owner to accept fire protection furnished by the Forester.
Surely the majority do not intend to hold that in order to enrich the general fund a person who has done no wrong and who is not delinquent in meeting any demand made of him by the state, can be penalized.
A determination of the true character of the 10 per cent charge is important. In the first place, the majority employ the penalty conception as the basis for sustaining the charge. I shall now proceed to show other reasons. In the year which ended June 30, 1947, the State Forester paid into the general fund $34,813.12 as tithes. That is a substantial amount of money. Its size may cause someone to propose additional legislation, based upon the clause which is the crux of this case, and seek thereby to increase the state's revenue. They may infer that there is magic in the use of the *Page 38 word "penalty" and employ it as the basis for new exactions.
If the sum paid by a state agency as a tithe can be deemed a contribution to overhead, it can be sustained, I assume, if reasonable in amount. If the purpose of the tithe is to make a fair contribution to overhead, reason becomes the gauge which determines the amount, and reason thereupon protects the citizen from being compelled to make an unreasonable contribution towards the total taken by the tithe. But, if the majority are right, and if the exaction in the instant case is a penalty, who can say that an exaction required by other legislation will be illegal if it is, say, $1.00 or $5.00 an acre? In other words, if a timber owner, who avails himself of the privilege afforded by the statute of having the State Forester provide fire protection for his land, can be assessed a penalty of 10 per cent, I know of no reason why he can not be penalized a much larger amount. Penalties imposed by legislative mandate normally are not subject to judicial review.
I deem it unnecessary to set forth my views upon other phases of this appeal.
I dissent. *Page 39