Summary
In Renner v. Tuscarawas County Board of Revision et al. (1991), 59 Ohio St.3d 142, 572, N.E.2d 56, the Ohio Supreme Court explained the CAUV program.
Summary of this case from Salamon v. RylandOpinion
No. 90-973
Submitted January 23, 1991 —
Decided May 1, 1991.
Taxation — Real property valuation — Current agricultural use valuation — Portion of parcels leased for strip mining — Removal of parcels from "CAUV" program by auditor and placement of recoupment charge on tax bill — Right to reduction of assessed recoupment charge on balance of parcel not leased for strip mining not established, when.
APPEAL from the Board of Tax Appeals, No. 89-A-311.
Dalton W. Renner and Cynthia A. Renner, appellees, own three parcels of real estate in Tuscarawas County, which they farm. This property had qualified for the current agricultural use valuation ("CAUV") program. Under this program, the auditor disregards the highest and best use of the property and values the property according to its current agricultural use. This usually results in a lower valuation and a lower real property tax.
The Renners leased portions of two parcels for strip mining, which began on the designated property in October or November 1987. This lease expires in 1991. The balance of the parcels, however, remains qualified for CAUV.
For tax year 1988, the Renners filed an application to renew CAUV treatment for this property. In it, they stated that the previously qualified parcels were still exclusively devoted to agricultural purposes in 1987.
The Tuscarawas County Auditor, appellee, learned about the mining in 1988. This occurred when his senior staff appraiser located a mining permit for the subject property upon inspecting mining permits on file with the Department of Natural Resources. The auditor then removed the two affected parcels entirely from the CAUV program and, under R.C. 5713.34, placed a recoupment charge of $2,767.96 on the Renners' 1988 tax bill.
The Renners filed a complaint with the Tuscarawas County Board of Revision ("board"), seeking return to the CAUV program of the qualified agricultural acreage and a corresponding reduction of the recoupment charge. At the board hearing, the Renners presented a surveyor's letter. This letter stated the amount of acreage being mined but did not identify which acreage. However, the board affirmed the auditor's action.
The Renners then appealed to the Board of Tax Appeals ("BTA"). The copy of the notice of appeal filed with the board did not contain a page two, which had been filed with the BTA. Page two identifies the tax year, taxing district, and parcel numbers of the property. It also states the relief sought. The copy filed with the board did, however, contain a copy of the addendum to the notice of appeal filed with the BTA and the board's decision. The addendum, in more detail, specified the relief sought; the decision set forth the board case number and the parcel numbers. In any event, the board moved to dismiss the appeal because the Renners had not filed a complete copy of the notice with it. The BTA, however, denied this motion.
Dalton Renner testified at the BTA hearing that he had informed the auditor's assistants about the mining and had asked them what to do about the valuation of it. He also testified that he had asked a surveyor to inform the auditor what portion of the land was being mined. Nevertheless, the auditor's senior staff appraiser testified that he could not recall talking with Mr. Renner prior to discovering the mining permit or receiving any papers from a surveyor.
Furthermore, the Renners produced a survey delineating the mined acreage. However, the BTA refused to admit it because the surveyor was not present to explain a discrepancy in its date.
In deciding the merits, the BTA read the phrase "devoted exclusively to agricultural use" in R.C. 5713.30 and 5713.31 to mean "devoted primarily to agricultural use." The BTA split the parcels for valuation under R.C. 5713.04. It ordered the Renners to assist the auditor in identifying the location of the converted portion of each parcel and the auditor to limit the recoupment charge to the mined property.
This cause is before the court upon an appeal as of right.
Wesp Osterkamp Co., L.P.A., and E. Joel Wesp, for appellees.
Teaford, Rich, Belskis, Coffman Wheeler and Jeffrey A. Rich, for appellants.
First, as to the jurisdictional question, the board argues that an appellant must file a complete copy of the notice of appeal with it to vest the BTA with jurisdiction. The Renners respond that the documents they filed with the board sufficiently advised the board of the nature and substance of the appeal. We agree with the Renners.
In Akron Standard Div. v. Lindley (1984), 11 Ohio St.3d 10, 11 OBR 9, 462 N.E.2d 419, we applied a substantial compliance test to determine whether to dismiss an appeal for failure to comply with an appellate procedure statute. If the omitted requirement runs to the core of procedural efficiency, then the requirement is essential, the omission is not substantial compliance with the statute, and the appeal is to be dismissed. In Akron Standard Div., we held that the statutory requirement to verify a use tax assessment petition was not jurisdictional.
Here, the supplemental documents informed the board of the name and address of the appellants, the parcel numbers, the taxing district (contained in the transcript of the hearing before the board), the exact nature of the appeal, and the relief requested. These documents supplied the same information as page two of the notice form. Thus, under Akron Standard Div., the omission of page two did not run to the core of procedural efficiency, the Renners substantially complied with the filing requirements of R.C. 5717.01, and their appeal may be heard.
Next, in the first proposition of law, the board argues that the Renners disqualified the entire numbered permanent parcels from the CAUV program when they converted a portion of them from agricultural use. The board regards the numbered parcel as the only unit for valuation. The Renners, on the other hand, maintain that the unmined portions of the numbered parcels were used exclusively for agricultural purposes. They then argue for application of R.C. 5713.04, which allows for splitting parcels into exempt and non-exempt uses, to split their property into agricultural and nonagricultural valuations.
In Park Ridge Co. v. Franklin Cty. Bd. of Revision (1987), 29 Ohio St.3d 12, 29 OBR 231, 504 N.E.2d 116, we acknowledged that the numbered permanent parcel is an important unit in the auditor's assessing taxes against real estate. Nevertheless, in paragraph two of the syllabus, we stated:
"The true value for real property may well depend on its potential use as an economic unit. That unit may include multiple parcels, or it may be part of a larger parcel, on the auditor's records. The boundaries of that unit may change with time and circumstances. Thus, a separate tract for valuation purposes, need not correspond with a numbered parcel. For tax valuation purposes, property with a single owner, for which the highest and best use is a single unit, constitutes a tract, lot or parcel."
Therefore, the auditor can divide the numbered parcel into the economic units contained within a parcel's borders and value each segment individually. This result also comports with R.C. 5713.34. This statute provides:
"Upon the conversion of all or any portion of a tract, lot, or parcel of land devoted exclusively to agricultural use a portion of the tax savings upon such converted land shall be recouped as provided for by Section 36, Article II of the Ohio Constitution by levying a charge on such land in an amount equal to the amount of the tax savings on the converted land during the four years immediately preceding the year in which the conversion occurs. * * *" (Emphasis added.)
By assessing the recoupment charge on "such converted land" the General Assembly applies this charge only to "all or any portion of a tract, lot, or parcel" that is converted.
Moreover, Ohio Adm. Code 5705-5-01(B)(25) defines "tracts, lots, or parcels" as:
"* * * [A]ll distinct portions or pieces of land (not necessarily contiguous) where the title is held by one owner, as listed on the tax list and duplicate of the county, which are actively farmed as a unit if together the total acreage meets the requirement of division (A)(1) or (2) of Section 5713.30 of the Revised Code. The terms `tracts,' `lots' or `parcels' may be used interchangeably."
This definition does not restrict "tracts, lots, or parcels" to the numbered parcels which the auditor employs in his assessment functions. This definition joins together all distinct portions or pieces of land that are actively farmed as a unit, even if not contiguous, as land to which the CAUV program applies. The definition ignores the boundaries of numbered parcels and recognizes the economic units described in Park Ridge Co.
Finally, in its second proposition of law, the board argues that the Renners did not sustain their burden to prove what part was converted to mining and what part continues to qualify for CAUV. The Renners contend that the board has a duty to investigate their complaint under Bd. of Edn. of Cleveland City School Dist. v. Cuyahoga Cty. Bd. of Revision (1973), 34 Ohio St.2d 231, 63 O.O. 2d 380, 298 N.E.2d 125, paragraph one of the syllabus, and that they need only assist the board in locating the agricultural acreage as ordered by the BTA decision. We agree with the board and hold that the Renners have not proven their right to a reduction in the recoupment charge.
To value land at its current agricultural use, the auditor reviews county survey maps and determines the land's soil type and its consequent land capability class from the classes listed in Ohio Adm. Code 5705-5-04(F). Ohio Adm. Code 5705-5-05(D). The auditor then learns the unit value per acre for the property from the "current agricultural use value of land table or tables" prescribed by the Tax Commissioner for the given tax year, pursuant to Ohio Adm. Code 5705-5-04.
The commissioner compiles this table by first calculating the typical net income from agricultural products for each soil type. For this task he assumes typical management, cropping, land use patterns, and yields. Next, the commissioner capitalizes the incomes expected to be derived from each soil type by a rate that he has previously determined. Finally, he lists the unit values per acre so determined in the table and distributes the table to the auditors.
After extracting the unit value per acre from this table, the auditor multiplies it by the acreage stated on the application, deducts and lists separately the value of any residential acreage, and enters the result as the agricultural use land value. Ohio Adm. Code 5705-5-05(K). Thus, the auditor must know which acreage is farmed and its underlying soil type to calculate the land's value.
A taxpayer, moreover, has the duty to prove his right to a reduction in value. R.R.Z. Associates v. Cuyahoga Cty. Bd. of Revision (1988), 38 Ohio St.3d 198, 527 N.E.2d 874. We reject and, consequently, overrule, as contrary to this well-established principle, paragraph one of the syllabus of Bd. of Edn. of Cleveland City School Dist. v. Cuyahoga Cty. Bd. of Revision, supra, which obliged boards of revision to investigate independently a valuation complaint.
In the instant case, the Renners did not provide the exact boundaries of the property that qualifies for current agricultural use valuation. Since this value depends so intimately on the exact land under review, the Renners did not establish their right to reduction and, consequently, may not receive a reduction from the assessed recoupment charge.
Accordingly, we reverse the BTA's decision.
Decision reversed.
MOYER, C.J., SWEENEY, DOUGLAS, WRIGHT, H. BROWN and RESNICK, JJ., concur.
HOLMES, J., dissents.
I dissent. I would affirm the Board of Tax Appeals in all respects.