Board of Assessors of Sandwich v. Commissioner of Revenue

• Decision Date: 20 December 1984
• Citation: Board of Assessors of Sandwich v. Commissioner of Revenue, 472 N.E.2d 658, 393 Mass. 580 (Mass. 1984)
• Parties: BOARD OF ASSESSORS OF SANDWICH v. COMMISSIONER OF REVENUE.
• Court: Supreme Judicial Court of Massachusetts

Page 658

472 N.E.2d 658

393 Mass. 580

BOARD OF ASSESSORS OF SANDWICH v.COMMISSIONER OF REVENUE.

Supreme Judicial Court of Massachusetts Suffolk.

Argued Oct. 5, 1984.

Decided Dec. 20, 1984.

H. Reed Witherby, Asst. Atty. Gen., for the Commissioner of revenue.

Alan A. Green, Town Counsel, Hyannis (Mark D. Carchidi, Pocasset, with him), for plaintiff.

Before HENNESSEY, C.J., and WILKINS, ABRAMS, NOLAN and O'CONNOR, JJ.

O'CONNOR, Justice.

This is an appeal by the Commissioner of Revenue (Commissioner) from a decision of the Appellate Tax Board(board) holding that the Commissioner failed to comply with G.L. c. 58, § 13, in valuing State owned lands in the town of Sandwich.The board of assessors of Sandwich (assessors) had appealed to the board from the Commissioner's determination that the value of State owned lands located in Sandwich as of January 1, 1980, was $12,433,000.The board found that the value of the lands was $29,208,000.We reverse the board's decision modifying the Commissioner's determination of valuation, and remand the case for further proceedings consistent with this opinion.

General Laws c. 58, § 13, as amended through St.1978, c. 514, §§ 43, 44, provides that in 1975, and every fifth year thereafter, "the commissioner shall, on or before June first, determine as of January first the fair cash value as hereinafter provided of all land in every town owned by the commonwealth and used for [specified] purposes....As used in this section, 'land' shall not include buildings, structures, improvements or other things erected thereon or affixed thereto."The values determined by the Commissioner under this section are used to calculate the amount of reimbursement in lieu of taxes each municipality receives annually from the Commonwealth under G.L. c. 58, § 17.We are informed by the Commissioner that, since 1980, the Legislature has not appropriated sufficient funds to reimburse municipalities at the rate required by the statute.SeeG.L. c. 63, § 58.Instead, the appropriation has been prorated among the municipalities with State owned lands, and the amount of each municipality's reimbursement depends upon the proportionate value of its State owned lands.

In 1980, pursuant to the statute, the Commissioner undertook a valuation of all State owned lands in the Commonwealth.In the spring of that year, the Commissioner notified the assessors that the State owned lands in Sandwich had been valued under § 13 at $12,433,000.The assessors filed an "application for a correction" with the board under G.L. c. 58, § 14, as amended bySt.1978, c. 514, § 45, which provides in part: "[The] board shall, upon the basis of such application, or after giving [the] assessors a hearing, as the board may determine, make a finding whether the commissioner acted in accordance with section thirteen.If the board finds that the commissioner failed so to act, it shall thereupon make a determination of value in accordance with section thirteen ... and its decision shall be conclusive."The assessors failed to file their application for a correction within the statutory period allowing for such an appeal, ¹ however, and the board dismissed the appeal for lack of jurisdiction.This court affirmed that decision.Assessors of Sandwich v. Commissioner of Revenue, 382 Mass. 689, 414 N.E.2d 1004(1981).

Subsequently, the Legislature enacted St.1981, c. 351, § 131, which provides: "Notwithstanding the provisions of [G.L. c. 58, § 14] relative to the time for appeal from determination made pursuant to [c. 58, § 13], the town of Washington and the town of Sandwich shall have ninety days from the effective date of this act[July 1, 1981] to file such an appeal and proceed in accordance with said section fourteen as if such period had not expired."During this renewed appeal period, the assessors again filed an appeal with the board.²

At the hearing before the board, each party presented an expert witness who testified as to the methods used in valuing State owned lands in Sandwich.We summarize the testimony.The Commissioner's expert described in general terms the procedures used to value lands statewide.The Commissioner used a market data approach to valuation, which involved analyzing sales of comparable lots to determine a base value for land in the town.Most of the information on comparable sales was obtained from forms that local boards of assessors are required to file with the Commissioner for equalized valuation purposes (3-S reports).SeeG.L. c. 58, §§ 10, 13.The base land value was then adjusted for each site to account for topography and soil conditions at the site, the neighborhood surrounding the site, the zoning or development restrictions in the community, and the availability of public utilities.This information was obtained through site inspections by field appraisers, from government survey maps, and from the local communities themselves.The Commissioner did not consider the effect of internal roads on any of the sites, on the ground that such roads are "improvements," and not to be considered in the valuation process.

In Sandwich, the Commissioner grouped State owned lands into eight parcels, the most significant of which was the military reservation (Otis Air Force Base and Camp Edwards).Other parcels included State forest land, a fish hatchery, and a game farm.With the exception of the military reservation, the Commissioner used comparable sales data taken from the town's 3-S reports for 1978 and 1979.Based on these sales, the land was valued at $4,200 per acre for tracts of less than forty acres, and $3,300 per acre for tracts of more than forty acres.A different approach was used for parcels of land which were too large to permit valuation based on comparable sales.Those parcels were valued by distinguishing between lots fronting on external roads and back land.Based on the 3-S reports, lots fronting on external roads were valued at $15,000 per acre, and back land was valued separately for each site depending on its shape and topography.Still another approach was used in regard to the 8,600 ³ acre military reservation.The Commissioner determined that, because of the size of the parcel, there were no comparable sales from which a value for the back land could be calculated.Therefore, the lots fronting on external roads were valued at $15,000 per acre, while the back land was valued using the town's own assessed value for the land.The Commissioner justified using the assessed value on the ground that all the land in the town is assessed at 100% of fair cash value.The Commissioner concluded that the fair cash value of State owned lands in Sandwich as of January 1, 1980, was $12,433,160.

The expert witness for the assessors had conducted an independent valuation of State owned lands in the town.Like the Commissioner, he employed a market data approach to valuation, using twenty comparable sales to determine land value.He personally reviewed and examined each parcel of State owned land, and the details of each parcel considered as a comparable sale.His report included aerial photographs of the appraised property, maps, deeds, and other photographs.The assessors' expert apparently considered the existence of frontage on internal roads in determining the value of the land.He concluded that the fair cash value of State owned lands in Sandwich was $36,500,000, approximately treble the value assigned by the Commissioner.

After hearing the testimony of both witnesses, and after taking a view of the State owned lands in Sandwich, the board issued its decision and findings of fact.The board found that the Commissioner had failed to act in accordance with § 13.It based that conclusion on the following findings of fact: the assessors' expert had personally viewed each parcel, while the Commissioner's expert had not viewed any of the land and had relied on information furnished by others; the Commissioner's method of assigning a higher value to land fronting on external roads than to back land did not value the land at fair cash value according to its highest and best use; the Commissioner's expert had admitted that the assessors' appraisal report stated the correct size of each parcel; the Commissioner's figures for the size of some of the parcels were incorrect; the Commissioner had failed to follow the procedure he had established for valuing land statewide; and the Commissioner relied on 3-S reports rather than personal inspection of parcels considered as comparable sales.The board also apparently misconstrued a statement in the Commissioner's posttrial brief which discussed the lack of sufficient appropriations to reimburse towns fully.The board treated the statement as an admission that the Commissioner did not value the land at fair cash value as required by the statute.The board concluded that the fair cash value of the State owned lands was $29,208,000.

On appeal, the Commissioner argues that the board's conclusions were based on an erroneous interpretation of the legal standards established by G.L. c. 58, § 13.He also argues that the board's findings of fact were not supported by the evidence.The assessors argue that the board's findings of fact and determination of value are conclusive, and that this court's review should be limited to determining whether the board's findings were supported by substantial evidence.The crucial issue in determining the amount of deference we give the board's conclusions is whether the board properly construed its role under G.L. c. 58, § 14, and the scope of its review of the Commissioner's determination of value.

The Appellate Tax Board is established and defined in G.L. c. 58A.Section 6 sets forth the board's jurisdiction to decide appeals.Sections 7 through 10 set forth the procedures for filing petitions, service of process, obtaining discovery and conducting hearings.Section 11 authorizes the board to administer...