ELR Citation: ELR 20254
No(s). 84-4014 (6th Cir. Jan 10, 1986)

The court rules that a reclamation performance bond required as a condition of obtaining an Ohio strip mining permit is not an excise tax entitled to priority treatment under the Bankruptcy Code. The court first holds that the bankruptcy and district courts below correctly ruled that the requirement of former Bankruptcy Rule 302(c) that claims based on writings be accompanied by the writings is inapplicable to claims based on statutes. The court then holds that though validly presented, Ohio's claim is not an excise tax entitled to priority, reversing the courts below. In a parallel case under the federal Surface Mining Control and Reclamation Act, this court has held that charges levied to fund future reclamation activities, which benefit the public and not the individual payer, are excise taxes entitled to priority treatment in bankruptcy. Charges levied on individuals as a condition of obtaining the benefit of a required governmental approval, however, are fees not entitled to priority in bankruptcy. The performance bond required by Ohio in the instant case is a requisite for permit issuance. Although part of the money pays for operation of the state permitting agency, this does not render the payment one for public benefit, since this is a characteristic of all permit fees. Precedent relied on by the state includes a bankruptcy definition of "taxes" that seems helpful to the state, but the court in that case was not required to make the distinction between government fees and taxes.

Counsel for Plaintiff-Appellant
Raymond J. Pikna Jr.
Knepper, White, Arter & Hadden
180 E. Broad St., 4th Fl., Columbus OH 43215
(614) 221-3155

Counsel for Defendant-Appellee
Edda Sarah Post, Ass't Attorney General
30 E. Broad St., 17th Fl., Columbus OH 43215
(614) 466-3376

Before: LIVELY, Chief Judge; CONTIE, Circuit Judge; and BROWN, Senior Circuit Judge.