Opinion
No. 75-579
Decided March 24, 1976.
Taxation — Real estate assessment — Schoolhouse — Duties of county auditor — Properly performed, when — State Board of Education — School foundation program — Calculation of payments — Certification of tax duplicate by Board of Tax Appeals — Properly performed, when — R.C. 3317.10.
APPEAL from the Court of Appeals for Mahoning County.
On June 5, 1969, defendant Board of Education of the Mahoning County Joint Vocational School District (hereinafter "Mahoning") purchased 158.05 acres of Mahoning County real estate located in the taxing district of Canfield Village for the construction of a joint vocational school.
On November 23, 1970, Mahoning applied to the Board of Tax Appeals, appellant herein, pursuant to R.C. 5713.081 , to have its "property removed from the tax list and duplicate and placed on the tax exempt list for the tax year 1970 and thereafter." The printed application form contains the following pertinent entries:
R.C. 5713.081 reads:
"On and after January 1, 1969, no application for real property tax exemption and tax remission shall be filed with, or considered by, the Board of Tax Appeals wherein, tax remission is requested for more than one tax year, and the Board of Tax Appeals shall have no authority to remit more than one year's delinquent taxes, penalties, and interest.
"On and after January 1, 1969, all taxes, penalties, and interest, that are more than one year delinquent, appearing on the general tax list and duplicate of real property which have been levied and assessed against parcels of real property owned by the state, any political subdivision, or any other entity whose ownership of real property would constitute public ownership thereof, shall be collected by the county auditor of the county where the real property is located. Such official shall deduct from each distribution made by him, the amount necessary to pay the tax delinquency from any revenues or funds to the credit of the state, any political subdivision, or any other entity whose ownership of real property would constitute public ownership thereof, passing under his control, or which come into his possession, and such deductions shall be made on a continuing basis until all delinquent taxes, penalties, and interest noted in this section have been paid.
"As used in this section, 'political subdivision' includes townships, municipalities, counties, school districts, boards of education, all state and municipal universities, park boards, and any other entity whose ownership of real property would constitute public ownership thereof."
Language which has been "filled-in" on the printed forms herein is designated by italics.
"How is this property now being used? * * * Building site for joint vocational school — Utility extensions (sewer and water line) has been constructed onto site[.] Building construction is about to begin."
"Give the dimensions of each structure or building on the premises, the number of stories each contains and the material of which each is constructed. Pole building — metal sides[.] 30 ft. wide by 60 ft. long[.]"
A printed journal entry, dated December 4, 1970, reads: "The Board of Tax Appeals * * * consents to the exemption prayed for and orders that the property above described be entered upon the list of property in said county which is exempt from taxation for the tax year 1970."
That description lists the parcels of real estate which comprise the 158.05 acre tract, and contains the notation "vocational school."
Robert P. Shreve, Superintendent of Schools for Mahoning County, executed an affidavit on November 12, 1974, which states, in pertinent part:
"2. * * * At the time the application was filed [November 23, 1970] all construction drawings were completed and preparations were underway for the immediate construction of a school building on the property. Water and sewer lines had been extended to the site and other building plans were under way. Groundbreaking was in November 1970. The application filed with the board fully disclosed the status and purpose of the construction. * * *
"* * *
"4. During January, 1973 the school building constructed by the Mahoning County Joint Vocational School District was completed at a total cost of $4,674,593.34 and the Mahoning County auditor valued the building at $2,746,090.00 for calendar year 1973. That value was erroneously included on the auditor's list of taxable property within the Canfield Local School District for 1973 and so certified to the Board of Tax Appeals and subsequently to the Ohio Department of Education.
"* * *
"Affiant says that at all times, he believed that the exemption granted by the Board of Tax Appeals in December 1970 was and continued to be an exemption of all property and improvements of the Mahoning County joint vocational school."
James Watkins, Superintendent of the Canfield Local School District, states in his affidavit, executed November 11, 1974:
"2. Affiant has been advised by the Ohio Department of Education that foundation payments to be paid to Canfield Local School District during the fiscal year 1975 will be based upon an aggregate value of taxable real and personal property within the school district (as of December 31, 1973) of $44,599,124.00.
"3. The Ohio Department of Education is calculating and will calculate foundation payments to the Canfield Local School District upon an overstated valuation of taxable real and personal property which erroneously includes the sum of $2,746,090.00 which represents the value of tax exempt property owned by the Mahoning County Joint Vocational School District.
"4. The Canfield Local School District will receive during fiscal year 1975 approximately $70,000.00 less than it would receive if foundation payments were calculated by using the correct value of taxable real and personal property in the Canfield Local School District."
Affiants' references to placing school property on the tax list refer to the actions of appellee Stephen R. Olenick, Auditor of Mahoning County, who, in 1973, valued the newly completed joint vocational school facility at $2,746,090, and included that value in the aggregate value of taxable (instead of exempt) property on his tax list and duplicate. That tax list and duplicate was certified to the Board of Tax Appeals, as of December 31, 1973, which caused the board's records to reflect a value of taxable real property in the Canfield Local School District which included the $2,746,090 sum.
The appellee Board of Education of the Canfield Local School District (hereinafter "Canfield") attempted to have the sum removed from the tax list, asserting that under R.C. Chapter 3317 (the School Foundation Program) the amount of state funds to be received by school districts is determined by the Ohio Department of Education, a defendant herein, on the basis of a formula which provides state funds to districts in inverse proportion to the quantum of taxable property within that district. In this case, Canfield urges that its allocation of state funds will be reduced by $70,000 because the value of its school facility was entered on the list of taxable, rather than exempt, property.
On April 15, 1974, Mahoning filed applications with the Board of Tax Appeals for exemption of the school facility from taxes "for the tax year 1973 and thereafter" and for remission of taxes and penalties for the tax year 1973.
A printed journal entry, dated April 24, 1974, reads: "The Board of Tax Appeals * * * consents to the exemption prayed for and orders that the property above described be entered upon the list of property in said county which is exempt from taxation for the tax year 1974.
"The board further finds that the property was used for the tax exempt purpose during the tax year 19 73, and it is ordered that all UNPAID taxes, penalties and interest which accrued during that year be, and the same hereby are, remitted under authority of Section 5713.08, Revised Code."
Despite the action of the Board of Tax Appeals, Canfield allegedly was subsequently advised by the Department of Education that school foundation funds for fiscal year 1975 would be computed without deletion of the theretofore listed and certified sum of $2,746,090, and this action followed.
On June 18, 1974, Canfield filed a complaint in the Court of Common Pleas of Mahoning County, which requests a declaration that Canfield "is entitled to receive state foundation payments during fiscal year 1975 calculated upon an aggregate value of taxable real and personal property within the district during calendar year 1973 which does not include the value of the Mahoning County Joint Vocational School District Property * * * [and a] mandatory injunction requiring the Ohio Department of Education to calculate and pay school foundation payments to plaintiff school district for fiscal year 1975 based upon an aggregate value of taxable real and personal property within the district in 1973 which does not include the value of the property belonging to the Mahoning County Joint Vocational School District."
Upon motions for summary judgment filed by Canfield and the Board of Tax Appeals, the court sustained Canfield's motion and ordered the Board of Tax Appeals "to correct its records to show that the aggregate value of taxable real and personal property on the Canfield Local School District as of December 31, 1973 is $41,853,034.00 and to certify that value to the Ohio Department of Education." The court further ordered the Department of Education "to compute and cause payment of school foundation payments to Canfield Local School District for the fiscal year beginning July 1, 1974 through June 30, 1975 based upon an aggregate value of taxable real and personal property within the district as of December 31, 1973 of $41,853,034.00."
The Court of Appeals affirmed the judgment and modified the foregoing order to read as follows:
"The Board of Tax Appeals is hereby ordered to correct its records to show that the aggregate value of taxable real and personal property on the Canfield Local School District as of December 31, 1973, is $41,853,034.00 and to certify that value to the Ohio Department of Education pursuant to R.C. 3317.10 (A).
"Upon receipt of the corrected amount of the tax duplicate of the Canfield Local School District as of December 31, 1973, from the Board of Tax Appeals, the Ohio Department of Education is hereby ordered to compute payment of school foundation payments to the Canfield Local School District for the fiscal year from July 1, 1974, through June 30, 1975, based upon the corrected aggregate value of taxable real and personal property within such district as of December 31, 1973, and to cause payment of the school foundation payments on the basis of the corrected figures with the approval of the controlling board pursuant to R.C. 3317.01."
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Means, Bichimer, Burkholder Baker Co., L.P.A., Mr. John C. Burkholder and Mr. Nicholas A. Pittner, for appellee.
Mr. William J. Brown, attorney general, and Mr. Ronald B. Noga, for appellant.
County auditors are required to value, assess, and list land and structures within their county (R.C. 5713.01 and 5715.01), and to annually "* * * make out and transmit to the Board of Tax Appeals an abstract" which reflects that data. R.C. 5715.23.
Herein, the auditor valued, assessed, and listed the schoolhouse in the year of its completion, 1973, and so notified the Board of Tax Appeals.
The question presented is whether the auditor erred by entering the schoolhouse upon the tax list and duplicate as taxable, rather than exempt, property.
Canfield premises its case upon the following assertion:
"The chain of circumstances culminating in incorrect payment of school foundation monies to the Canfield Local School District began with the county auditor's erroneous inclusion of the value of tax exempt property in his abstract of taxable property." (Emphasis original.)
Canfield contends, in effect, that the December 4, 1970, order of the Board of Tax Appeals served to exempt thereafter its land and the subsequently completed school house, and that the auditor's incluson of the structure on the non-exempt property list for 1973 was, therefore, erroneous.
See Canfield's November 23, 1970, application, supra.
Appellant, Board of Tax Appeals, contends "* * * that under the statutory provisions which govern the exemption of real property the school building could not be classified as exempt as of December 31, 1973, and that the Board of Tax Appeals properly included the value of that building in the certification it made to the Department of Education for the Canfield Local School District as of that date."
It is urged that pursuant to R.C. 3313.44, 5709.07 and 5713.07, the schoolhouse was being used for a tax exempt purpose during 1973 and that the auditor, therefore, should have listed the property as exempt. However, those statutes, and Section 2 of Article XII of the Ohio Constitution ("general laws may be passed to exempt * * * public schoolhouses" from taxation), are not self-executing. Although property is clearly exemptible, it may not be exempted until the Board of Tax Appeals consents thereto.
R.C. 5713.08 reads, as follows:
"The county auditor shall make a list of all real and personal property in his county, * * * which is exempted from taxation under Sections * * * 3313.44 * * * and 5709.07 to 5709.18 of the Revised Code. Such list * * * shall be corrected annually by adding thereto the items of property which have been exempted during the year, and by striking therefrom the items which have lost their right of exemption and which have been reentered on the taxable list. No additions shall be made to such exempt lists nor additional items of property exempted under such sections without the consent of the Board of Tax Appeals, but when any personal property or endowment fund of an institution has once been held by the board to be properly exempt from taxation, it is not necessary to obtain the board's consent to the exemption of additional property or investments of the same kind belonging to the same institution, but such property shall appear on the abstract filed annually with the board. * * * The auditor shall follow the orders of the board given under this section * * *."
That section, R.C. 5713.08, vests the Board of Tax Appeals with exclusive authority to determine whether property is exempt from taxation ( State, ex rel. Methodist Book Concern, v. Guckenberger, 133 Ohio St. 27, 30), and a county auditor has no power to declare real property exempt ( State, ex rel. Sister Superior, v. Bd. of Commrs., 31 Ohio St. 271), but must follow the orders of the Board of Tax Appeals.
However, Canfield urges, and the Court of Appeals held, that the Board of Tax Appeals consented to the exemption of the schoolhouse in its journal entry of December 4, 1970. A precis of appellant's syllogistic response is that property cannot be exempted from taxation until it is taxable, and it cannot be taxable until it exists. Despite the merits of that argument, we need only note that although Canfield requested relief for " 1970 and thereafter," the board's 1970 order did not purport to exempt any property beyond "the tax year 1970."
In addition, although the Board of Tax Appeals was requested to consent to the exemption of the schoolhouse "for the tax year 1973 and thereafter," the board's order merely remitted taxes accrued during 1973, and consented to exemption only for the tax year 1974.
This court holds that the Mahoning County auditor properly performed the duties enjoined upon him by law, in listing the schoolhouse on the taxable property list and certifying that fact to the Board of Tax Appeals pursuant to R.C. 5713.01, 5715.01 and 5715.23. The Board of Tax Appeals, in turn, properly carried out its duty under R.C. 3317.10(A) by certifying to the Board of Education the amount of the tax duplicate of the subject school district. The Board of Education performed its duty by using the amounts so certified in the calculation of the distribution of monies provided in R.C. 3317.02. (R.C. 3317.10.)
Accordingly, the complaint filed by Canfield fails to state a claim upon which relief can be granted, and the action must be dismissed. Civ. R. 12(B)(6).
The judgment of the Court of Appeals is, therefore, reversed and the cause is remanded to the trial court with instructions to dismiss the complaint.
Judgment reversed.
O'NEILL, C.J., CORRIGAN, STERN, CELEBREZZE, W. BROWN and P. BROWN, JJ., concur.
HERBERT, J., dissents.