Telluride Co. v. San Miguel County Board of Equalization

Opinion by Judge NEY. In this property tax case, we are required to determine if a taxpayer protest of a valuation by an assessor authorizes the assessor, and thus the Board of Assessment Appeals (BAA), to raise, as well as maintain or lower, the original valuation. We conclude that a taxpayer protest does not grant such authority and therefore reverse the order entered by the BAA. Petitioner, the Telluride Company (taxpayer), appeals from that portion of an order of •the BAA which denied its challenge to the valuation for the 1994 tax year of 645.20 acres of property designated as open space. The following facts are not in dispute. Taxpayer is the owner of 24 noncontiguous parcels of property, totalling approximately 800 acres, within the Telluride Mountain Village Planned Unit Development. For tax year 1993, a percentage of this property, unplatted and designated as open [1360] space, was valued by the San Miguel County Assessor (assessor) at $35,000 per acre. The taxpayer protested this valuation. Prior to January 1, 1994, portions of the property subject to the 1993 valuation protest and additional property owned by taxpayer, all of which are the subject of this appeal, were platted in accordance with a development plan and designated as either “active” or “passive” open space. Active open space is property that may be developed for uses compatible with the resort nature of the mountain community, such as golfing and skiing. Passive open space is property that is limited to activities which are compatible with maintaining the property in its natural state, such as hiking and nature trails. In May 1994, the assessor mailed taxpayer a notice of valuation for the tax year 1994 indicating that all of the property had been valued at $345 per acre. Taxpayer again protested the valuation. While the protest of the 1994 valuation was pending before the assessor, the BAA issued an order concerning taxpayer’s 1993 appeal (the 1993 decision) which directed the assessor to reduce the valuation of all property subject to that appeal from $35,000 to $17,-500 per acre. On June 27, 1994, the assessor mailed taxpayer a notice of determination for the 1994 tax year for the 24 parcels at issue here, assigning a value of $17,500 per acre for the 1994 tax year based upon the BAA’s 1993 decision. Taxpayer appealed this increase in valuation to the County Board of Equalization (County) and, upon its denial, sought due novo review before the BAA The BAA concluded that the taxpayer had presented sufficient evidence to prove that the property had been incorrectly valued. It also concluded, however, that there was evidence to support a difference in values for property dedicated to active and passive open space. Thus, the BAA affirmed the $17,500 per acre value assigned by the assessor to the 645.20 acres dedicated to active open space. As to the portion dedicated to passive open space, it ordered the value reduced to the previous assessed valuation of $345 per acre. I. Taxpayer contends that the BAA erred, as a matter of law, in the manner in which it valued taxpayer’s property dedicated to active open space. We agree. The essence of taxpayer’s argument is that the assessor erred in raising the 1994 valuation of its property after mailing a notice of valuation and during the protest period set forth in § 39-5-122, C.R.S. (1994 Repl.Vol. 16B). Hence, the BAA’s valuation, inasmuch as it reflects this improper increase, is also erroneous. Both parties rely on the statutory procedure set forth in § 39-5-122(2), C.R.S. (1994 Repl.Vol. 16B) which provides,' in pertinent part: If any person is of the opinion that his property has been valued too high, or has been twice valued, or is exempt by law from taxation, or that property has been erroneously assessed to him, he may appear before the assessor and object.... If the assessor finds any valuation to be erroneous or to be otherwise improper, he shall correct such error, but if he declines to change any valuation which he has determined, he shall state his reasons in writing .... (emphasis added) Taxpayer argues that the basis for initiating a protest under this section is a taxpayer’s belief that his or her property assessment is excessive, or that the property has been overvalued for any of the reasons set forth in the statute. Thus, the taxpayer construes the statute to mean that, in correcting erroneous or otherwise improper valuations asserted in a protest, the assessor may either affirm or lower the valuation of [1361] the property if, after considering the merits of the taxpayer’s protest, the assessor agrees that the property has been overvalued. In contrast, the County argues that the assessor’s authority under the statute is independent of the asserted basis of the taxpayer’ protest under § 39-5-122(2), and that the filing of a protest authorizes the assessor either to raise or lower the valuation. We conclude that, in the context of the entire tax scheme, the phrase “if the assessor finds any valuation to be erroneous or otherwise improper, he shall correct such error” is subject to more than one interpretation. If the language of a statute is unclear, a court’s primary task is to ascertain and give effect to the object and purpose the General Assembly sought to obtain by its enactment. State Engineer v. Castle Meadows, Inc., 856 P.2d 496 (Colo.1993). If, as here, the enactment is part of a comprehensive legislative program, it is essential that in ascertaining the General Assembly’s purpose, all enactments relating to the same subject matter be considered. Danielson v. Castle Meadows, Inc., 791 P.2d 1106 (Colo.1990). Section 39-5-122(2) describes the first step in a series generally referred to as the “protest and adjustment” procedures. Board of Assessment Appeals v. Benbrook, 735 P.2d 860 (Colo.1987). Under these procedures, a taxpayer whose protest is refused or denied by the assessor may petition the County Board of Equalization for further review. Section 39-5-122(3), C.R.S. (1994 Repl.Vol. 16B). The County Board of Equalization may either grant or deny the petition in whole or in part. Section 39-8-107(1), C.R.S. (1994 Repl.Vol. 16B). If the County Board of Equalization grants the petition, the assessor must adjust the valuation of the taxpayer’s property, but if the petition is granted only in part or is denied, the taxpayer may seek de novo review of the County Board of Equalization’s decision before the BAA, the district court, or an arbitrator. Sections 39-8-107 through 39-8-108.5, C.R.S. (1994 Repl. Vol. 16B). If the taxpayer prevails, the County Treasurer must pay him or her the appropriate refund. Section 39-8-109, C.R.S. (1994 Repl. Vol. 16B). If the taxpayer does not prevail, the valuation of the property cannot be adjusted higher than that set by the County. Section 39-8-108(5)(a), C.R.S. (1994 ReplVol. 16B). Moreover, the taxpayer may appeal the BAA or district court decision. Sections 39-8-108(2) and 39-8-108(3), C.R.S. (1994 ReplVol. 16B). These enactments, we conclude, unmistakably reveal that the purpose of the protest and adjustment procedures is to establish a just and fair method by which a taxpayer may correct a valuation believed, for any number of reasons, to be excessive. In particular, the language in §§ 39-5-122(2) and 39-5-122(3) restricting the assessor’s decision against a taxpayer to the denial of the protest indicates legislative intent to limit the assessor’s authority to affirming or reducing the valuation, as framed by the protest. See generally Black’s Law Dictionary 436 (6th ed.1990) (to deny means to refuse to grant, to give a negative answer or reply to). This construction is reinforced by a similar limitation on the County, see § 39-8-108(1), C.R.S. (1994 ReplVol. 16B), and by a restriction on both the BAA and the district court not to value the property higher than determined by the County. See § 39-8-108(5)(a). These provisions reveal a statutory scheme designed to create a taxpayer’s right to challenge an overvaluation and to receive a review that is responsive to such a challenge. Having determined that the purpose of the protest and adjustment procedures is to provide the taxpayer with a just and fair remedy to correct a perceived overvaluation, we conclude that, under § 39-5-122(2), the assessor is authorized to correct erroneous or otherwise improper valuations by considering only errors in valuation raised in the taxpayer’s protest, and under such circumstances, the assessor is authorized to lower, but not to raise, the valuation. We are aware that the County’s construction of the ambiguous phrase reflects [1362] the position taken by the Property Tax Administrator. See 2 Assessors Reference Library § V at 5.4 (rev.8-95). However, reviewing courts are not bound to follow the statutory interpretations of the Property Tax Administrator if, as here, the interpretation is inconsistent with the overall legislative scheme and the matter does not call for the exercise of the administrator’s technical expertise. Huddleston v. Grand County Board of Equalization, 913 P.2d 15 (Colo. 1996); Board of Equalization v. M.D.C. Construction Co., 830 P.2d 975 (Colo.1992). We also reject the county’s remaining arguments concerning the assessor’s alleged authority to increase the valuation of property during the protest period. The County asserts that the lack of a designated ceiling on the adjusted value such as that imposed on the BAA, the district court, or this court pursuant to § 39-8-108(5)(a) indicates that the General Assembly did not intend to limit the assessor solely to lower valuations. However, this argument is inconsistent with the restrictive language contained in §§ 39-5-122(2), 39-5-122(3), and 39-5-122(5) (repeated use of the word “deny” or “decline” in reference to assessor’s action taken with regard to a protest or objection). Furthermore, we conclude that the County’s reliance on § 39-8-102(1), C.R.S. (1994 RepLVol. 16B) is misplaced because that statute, which addresses the County’s authority in performing its equalization function, is distinct from § 39-5-122(2), which involves the county’s assessment function. See Wenner v. Board of Assessment Appeals, 866 P.2d 172 (Colo.App.1993). Relying upon Modular Communities, Inc. v. McKnight, 191 Colo. 101, 550 P.2d 866 (1976) and Wenner v. Board of Assessment Appeals, supra, the County further argues that the assessor’s decision to increase the valuation of the taxpayer’s property during the protest period was not prejudicial because the taxpayer was able to appeal the valuation to the County and the BAA. The County does not allege that the increases in the valuations here were corrections of clerical errors; therefore, the technical and procedural irregularities presented in the Modular Communities and Wenner cases are distinguishable from the substantive issue presented by the assessor’s action here. The County also argues that because the assessor’s decision relates to the valuation of property during an intervening tax year, such change in valuation is authorized by § 39-1-103(15), C.R.S. (1994 Repl.Vol. 16B). Again, we disagree. Section 39-1-103(15) provides, in pertinent part, that the assessor shall consider the value assigned the first year of the reassessment cycle, as adjusted after protests and appeals, if any, prior to the assessment date. We conclude, however, that this argument fails based upon the time limitation imposed by the assessment date. Pursuant to § 39-1-105, C.R.S. (1994 RepLVol. 16B), the assessment date is January 1 of the taxable year. Thus, the 1993 decision, issued in June 1994, was untimely in terms of the valuation of taxpayer’s property for tax year 1994. Based on our conclusion that § 39-5-122(2) does not authorize an assessor to raise the valuation of a taxpayer’s property during the protest period, we further conclude that the $17,500 per acre valuation was. error. And, inasmuch as the BAA’s valuation of taxpayer’s active open space property reflects this improper valuation, it too is error as a matter of law. II. In light of our construction of § 39-5-122(2), we need not address taxpayer’s contention that the BAA erred as a matter of law in relying on the assessor’s 1993 decision in valuing the property for tax year 1994. The order of the BAA is reversed, and the cause is remanded to the BAA with directions to reduce the valuation of the 645.20 acres of property designated as active open space to $345 per acre for tax year 1994. PLANK, J., concurs. ROY, J., dissents.