Eagerton v. Williams

• Decision Date: 08 April 1983
• Citation: 433 So.2d 436
• Parties: Ralph P. EAGERTON, Jr., as Commissioner of Revenue, State of Alabama; Annie Laurie Gunter, as Treasurer, State of Alabama; Mack McWhorter, as Chairman of the Montgomery County Commission; William H. Lyerly, as Tax Collector for Montgomery County; Marvin Driver, as Tax Assessor for Montgomery County; Tommy Miller, as Chief Appraiser for Montgomery County v. James Harmon WILLIAMS, et al. 81-344.
• Court: Alabama Supreme Court

Page 436

433 So.2d 436

Ralph P. EAGERTON, Jr., as Commissioner of Revenue, State of Alabama; Annie Laurie Gunter, as Treasurer, State of Alabama; Mack McWhorter, as Chairman of the Montgomery County Commission; William H. Lyerly, as Tax Collector for Montgomery County; Marvin Driver, as Tax Assessor for Montgomery County; Tommy Miller, as Chief Appraiser for Montgomery County v. James Harmon WILLIAMS, et al.

81-344.

Supreme Court of Alabama.

April 8, 1983.

Rehearing Denied June 3, 1983.

J. Knox Argo, of Argo & Enslen and James W. Webb of Webb, Crumpton & McGregor, Montgomery, and Charles A. Graddick, Atty. Gen., and Ron Bowden, Asst. Atty. Gen., for appellants.

Morris S. Dees, and David B. Byrne, Jr. and John M. Bolton, III of Robison & Belser and Walter B. Chandler, III of Chandler & Pool, Montgomery, for appellees.

Thomas W. Thagard, Jr. and William P. Cobb, II of Smith, Bowman, Thagard, Crook & Culpepper, Montgomery, for amici curiae Montgomery County Bd. of Educ. and Alabama Ass'n of School Bds.

Edward Still, Birmingham, for amici curiae Alabama Educ. Ass'n, Inc., and "Weissinger Plaintiff Class."

M.P. Ames of Reeves & Stewart, Selma, for amici curiae R.W. Buchanan, R.W. Buchanan, Jr., Wallace A. Buchanan, William G. Buchanan, A.F. Caley, Jr. and wife, Mae M. Caley, Kaye C. Plummer and husband, James Floyd Plummer, Fred Holladay, Jr., L.Y. Sadler, Jr., First Nat. Bank of Mobile as trustee, and R.W. Buchanan, Wallace A. Buchanan, Richard W. Buchanan, Jr., William G. Buchanan as trustees, intervening appellees.

Drayton N. Hamilton, Montgomery, for amicus curiae Alabama League of Municipalities.

ALMON, Justice.

This case involves a class action suit brought by certain rural land owners in Montgomery County challenging the method used by the county tax assessor to determine current use valuation of land for ad valorem tax purposes as being contrary to the provisions of Amendment No. 373, Constitution of Alabama (1901) and Act No. 135, Acts of Alabama, 2nd Special Session 1978. ¹ We affirm the trial court's holding that the Montgomery County Tax Assessor assessed plaintiffs' land at fair market value instead of current use value and thus did not comply with Act No. 135, but we reverse in part and remand on other grounds.

To convey a fuller understanding of this case, we shall recount the recent history of ad valorem taxes in Alabama in general and in Montgomery County in particular. In Weissinger v. Boswell, 330 F.Supp. 615 (M.D.Ala.1971), a three-judge federal panel held that the lack of uniformity in ad valorem taxes across Alabama violated the federal and state constitutions. The court concluded,

"The Court is aware of the impact of the present decision upon the tax structure of the state and its subdivisions, since the type of discriminatory treatment here involved is deep-seated and of long standing. For these reasons, the Court will give defendant [commissioner of revenue] a reasonable period of time, up to one year from the date of this opinion and order, to bring assessments throughout the state into conformity with the mandate of this opinion. It is so ordered."

Id., at 625.

The Court below described the efforts of the Montgomery County Tax Assessor to comply with the order in Weissinger, supra, as follows:

"... Montgomery County contracted with Cole Layer-Trumble, hereinafter referred to as 'CLT', in 1975 to provide property maps for Montgomery County and to reappraise all real property. By statute, the assessed value placed on this real property was its 'fair and reasonable market value'. 5

"CLT established a Rural Land Schedule for Montgomery which reflected three basic types of soil, designated A, B and C. These three types were further broken down into three subgroups each, i.e., A-1, A-2, A-3, etc. Further classifications were defined according to the location in the county and the type of road access to the property. By examining actual individual sales in each category, CLT determined the fair market value of the property in each corresponding category and listed them in a schedule. The dollar amounts were determined according to the testimony of Montgomery County appraiser Tommy Miller,6 by what a willing buyer would pay a willing seller. He testified that the value sought was the fair and reasonable market value and that CLT inserted dollar values as reflected by actual sales in the market. This was unquestionably as required by the statute in effect at that time, § 40-7-15, supra, and the court finds that the Rural Land Schedule developed by CLT was based on fair market value.7

The trial court then set out the Rural Land Schedule, but we reserve it for a more pertinent point in the opinion, infra.

State-wide, the reappraisals ordered by the Weissinger court took considerably longer to complete than the one year contemplated by the federal court. ² It became clear that many Alabama landowners' property taxes would increase significantly. In 1978, the Governor called the legislature into special session to avert the substantial increases in ad valorem taxes imminent under the new appraisals. ³

Included in the governor's tax relief package was a proposed amendment to Section 217 of the Constitution of Alabama of 1901. It passed the legislature, was ratified by the people, and is now Amendment No. 373 to the Constitution of 1901. In pertinent part, it reads:

"(a) On and after October 1, 1978, all taxable property within this state, not exempt by law, shall be divided into the following classes for the purposes of ad valorem taxation:

"Class I. All property of utilities used in the business of such utilities.

"Class II. All property not otherwise classified.

"Class III. All agricultural, forest and single-family owner-occupied residential property, and historic buildings and sites.

"Class IV. All private passenger automobiles and motor trucks of the type commonly known as 'pickups' or 'pickup trucks' owned and operated by an individual for personal or private use and not for hire, rent or compensation.

"(b) With respect to ad valorem taxes levied by the state, all taxable property shall be forever taxed at the same rate. On and after October 1, 1978, such property shall be assessed for ad valorem tax purposes according to the classes thereof as herein defined at the following ratios of assessed value to the fair and reasonable market value (except as otherwise provided in subsection (j) hereof) of such property:

"Class I. 30 per centum.

"Class II. 20 per centum.

"Class III. 10 per centum.

"Class IV. 15 per centum.

"...

"(j) Notwithstanding any other provision of this section, on and after October 1, 1978, taxable property defined in subsection (a) hereof as Class III property shall, upon application by the owner of such property, be assessed at the ratio of assessed value to the current use value of such taxable property and not the fair and reasonable market value of such property. The legislature may enact laws uniformly applicable to the state and all counties, municipalities and other taxing authorities establishing criteria and procedures for the determination of the current use value of any eligible taxable property and procedures for qualifying such property for assessment at its current use value...." (Emphasis added.)

To implement this constitutional amendment, the legislature passed Act No. 135 ⁴ in the above-mentioned special session. Act No. 135, set out in pertinent part below, provided for the appraisal of Class III property at current use value upon application by the property owner:

"Section 4. Current use value. For ad valorem tax years beginning on and after October 1, 1978, with respect to taxable property defined ... as Class III property and upon request by the owner of such property as hereinafter provided, the assessor shall base his appraisal of the value of such property on its current use on October 1 in any taxable year and not on its fair and reasonable market value. As used in this Act, 'current use value' shall be deemed to be the value of eligible taxable property based on the use being made of that property on October 1 of any taxable year; provided, that no consideration shall be taken of the prospective value such property might have if it were put to some other possible use. In determining the current use value of eligible taxable property, the assessor shall presume that there is no possibility of the property being used for any other purpose, as if there were a legal prohibition against its use for any other purpose. In determining the current use value for real property classified as agricultural or forest property, the tax assessor shall consider farm income, soil productivity or fertility, topography, susceptibility to flooding, rental value, replaceability as agricultural property for the production of food and fiber, and other factors which may serve to determine value for agricultural or timber production purposes, including any such factors that the department of revenue shall by regulation specify. The department of revenue shall, prior to May 1, 1979, prescribe all needful rules and regulations for the enforcement and implementation of this Section by the department and by the several county tax assessors and all other persons listed in Section 40-2-11(1), Code of Alabama 1975, as being charged with any duty in the enforcement of tax laws.

"Section 5. Qualification procedure.

"(a) Any owner of eligible taxable property described in Section 4 of this Act may apply to have such property assessed for purposes of ad valorem taxation at the appropriate ratio of assessed value to the current use value of such property by filing a written application, in form as prescribed by the department of revenue, with the tax assessor of the county in which such property is located, on and after October 1 but not later than January 1 in any taxable year.

"(b) The application form for qualification of real property as...