Were Baxter State Park's user fees and timber sale revenues protected from Maine's 0.9% General Fund sweep, even though they sat in a dedicated revenue account rather than a formal trust account?

Plain-English summary

This is an internal memo from Assistant Attorney General Paul Stern to Deputy Attorney General Crombie Garrett, dated May 29, 1992. It deals with a budget question on the edges of the AG's broader 1992 Part KKK trust-funds analysis.

Background: Part KKK of the budget bill directed a sweep of money from state accounts into the General Fund. The memo records that Jim Clair of the Office of Legislative Analysis already agreed Part KKK did not apply to trust fund monies. The open question was a narrower one: Jack Nicholas was, in Stern's words, "fishing about" for an opinion contrary to the office's, and Clair had asserted that Part KKK did apply to a special dedicated account holding user fees and timber sale revenues from Baxter State Park, which is operated separately from the original trust accounts.

Stern told Clair that Part KKK did not reach that dedicated account either. The reason is a basic doctrine of trust law: the trust follows the trust property and attaches to any products of that property. Any property belonging to the trust, however altered, and all the fruits of that property, continue to be subject to the trust. The memo cites 90 C.J.S., Trusts § 437 and Bogert, Trust & Trustees (2nd ed. rev.) § 866.

Governor Baxter's conditions on the Park land, that it be used for recreational purposes only, apply to the products of that land too. The user fees and timber sale revenues are products of the trust property, so the trust restrictions attach to them and Part KKK cannot transfer them to the General Fund.

The memo says Clair seemed to agree once Stern explained the analysis, and that Nicholas would be calling Garrett the following Monday. Stern wrote up the short memo so it could help Garrett's discussions or serve as the basis for a memo from Garrett to Nicholas.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Who was Percival Baxter?

A former Governor of Maine who gave the land that became Baxter State Park to the State. The memo's analysis turns on the condition he attached to that gift: the land was to be used for recreational purposes only. That condition is what makes the Park land, and its products, trust property.

What does "trust follows trust property" mean?

If property is held in trust, any new property the trustee gets in exchange for or as a product of the trust property is also subject to the trust. If you sell trust timber, the cash you get is trust cash. If you collect user fees on trust land, those fees are trust fees. The trustee cannot escape the trust by converting the form of the property.

Why was the State trying to sweep these specific accounts?

Because Baxter Park has a separately operated revenue account, distinct from its original trust accounts, that holds the day-to-day operating money from camper fees, timber sales, and other Park operations. From a budget officer's view, that account looks like an ordinary "dedicated revenue" account, the kind Part KKK could reach. The AG's analysis explained why it was not, in fact, ordinary.

What was the bottom line of the memo?

That Part KKK could not reach the Baxter Park dedicated account holding user fees and timber sale revenues, just as it could not reach the original Baxter trust accounts. The memo reports that Clair seemed to agree once the trust-property analysis was explained.

Background and statutory framework

The applicable trust-property doctrine is general American trust law: the trust follows the trust property. The two treatise citations the memo uses are:

• 90 C.J.S., Trusts § 437
• Bogert, Trust & Trustees (2nd ed. rev.), § 866

Both stand for the proposition that all property of the trust, however altered, and all fruits of that property, continue to be subject to the trust.

The memo applies that doctrine to Baxter State Park: because Governor Baxter gave the land on the condition that it be used for recreational purposes only, the revenues the Park generates (user fees and timber sales) are products of the trust property and carry the same restriction. The budget provision at issue was Part KKK of the budget bill (P.L. 1991, ch. 780).

Source

• Landing page: https://www.maine.gov/legis/lawlib/lldl/agops/agops.htm
• Original PDF: https://lldc.mainelegislature.org/Open/AG/Opinions/1992/ag_19920529.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.

State of Maine
DEPARTMENT OF ATTORNEY GENERAL
MEMORANDUM

To: Crombie Garrett, Deputy Attorney General
From: Paul Stern, Assistant Attorney General
Date: May 29, 1992
Subject: Baxter Park

I have discussed the issue of the effect of Part KKK of the Budget Bill on Baxter Park funds with Jim Clair of the Office of Legislative Analysis. Clair has become involved because Jack Nicholas appears to be fishing about for an opinion contrary to that of this office. Clair indicated that he agreed that Part KKK did not apply to trust fund monies but asserted it did apply to a special dedicated account that consisted primarily of user fees and the sale of timber from Baxter State Park.

Following some legal research, I told Clair that Part KKK also does not apply to the special dedicated account. The reason I gave is the generally accepted proposition that the trust follows the trust property, and attaches to any products of that trust property. 90 CJS, Trusts § 437. In effect, all property belonging to the trust, however it may be changed or altered, and all the fruits of such property, continues to be subject to or affected by the trust. Bogert, Trust & Trustees [2nd ed. rev.], § 866. The monies in the special dedicated account all arise from or are products of Baxter State Park itself. As such, Governor Baxter's conditions on Park-land itself, i.e. to be used for recreational purposes only, apply to these products as well. Therefore, Part KKK cannot cause the transfer of portions of these funds over to the General Fund.

Upon explaining this to Clair, he seemed to agree. He indicated that Jack Nicholas would be calling you on Monday. I am providing this short memo to you in the hopes that it may be helpful in your discussions, or may form the basis of a memo from you to Nicholas to resolve these issues. If I can be of any further assistance, please call on me.