In re McLamb
| Decision Date | 07 February 2012 |
| Docket Number | No. COA11–1007.,COA11–1007. |
| Court | North Carolina Court of Appeals |
| Parties | In the Matter of Appeal of: Joshua McLAMB from the Order of the Sampson County Board of Commissioners adopting the schedule of values, standards and rules for the 2011 general reappraisal. |
OPINION TEXT STARTS HERE
Appeal by petitioner Joshua McLamb from final decision entered 25 February 2011 by the North Carolina Property Tax Commission. Heard in the Court of Appeals 14 December 2011.
Everett Gaskins & Hancock, LLP, by E.D. Gaskins, Jr. and The Wooten Law Firm, by Louis E. Wooten, III, Raleigh, for petitioner-appellant Joshua McLamb.
Daughtry, Woodard, Lawrence & Starling, LLP, Clinton, by Annette C. Chancy and William Joel Starling, Jr., for respondent-appellee Sampson County.
Joshua McLamb (“petitioner”) appeals from the decision of the Property Tax Commission sitting as the State Board of Equalization and Review confirming Sampson County's (“respondent”) present-use schedule of values for the 2011 general reappraisal. For the following reasons, we affirm the Commission's decision.
On 15 November 2010, the Sampson County Board of Commissioners adopted the 2011 Sampson County Schedule of Values for qualified present-use agricultural and forestry land (referred to herein as the “present-use SOV”). The present-use SOV set the agricultural land values for major land resource areas 133A and 153A at $657.00 and $630.00 per acre, respectively; for forestry land, the County's present-use SOV set a value of $382.00 per acre for both major land resource areas 133A and 153A. Petitioner filed a notice of appeal with the North Carolina Property Tax Commission (“the Commission”) pursuant to N.C. Gen.Stat. § 105–290(c) on 13 December 2010. The Tax Commission heard petitioner's appeal on 27 January 2011. The Tax Commission issued its final decision on 25 February 2011, confirming the County's present-use SOV. Petitioner timely appealed to this Court pursuant to N.C. Gen.Stat. § 105–345.
On appeal, petitioner contends that the Commission erred in its decision, as the 2011 Sampson County present-use SOV (1) did not consider soil quality of each parcel in determining the present-use value of agricultural and forestry property, in violation of N.C. Gen.Stat. §§ 105–317(a) and 105–277.7; (2) is arbitrary and capricious because it is not supported by evidence in the record; (3) does not achieve fairness with the “corrective procedure[;]” and (4) does not “value present use land as far as practical[,]” in violation of N.C. Gen.Stat. § 105–283. Petitioner also contends that the Commission's decision to exclude his expert witness and the USDA soil maps was an abuse of discretion and resulted in substantial prejudice to his case.
In reviewing an appeal from the North Carolina Property Tax Commission, this Court
may affirm or reverse the decision of the Commission, declare the same null and void, or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the appellants have been prejudiced because the Commission's findings, inferences, conclusions or decisions are:
(1) In violation of constitutional provisions; or
(2) In excess of statutory authority or jurisdiction of the Commission; or
(3) Made upon unlawful proceedings; or
(4) Affected by other errors of law; or
(5) Unsupported by competent, material and substantial evidence in view of the entire record as submitted; or
(6) Arbitrary or capricious.
N.C. Gen.Stat. § 105–345.2(b) (2009). “Questions of law receive de novo review, while issues such as sufficiency of the evidence to support the Commission's decision are reviewed under the whole-record test.” In re Murray, 179 N.C.App. 780, 783, 635 S.E.2d 477, 479 (2006) (citation and quotation marks omitted). Further,
[i]n evaluating whether the record supports the Commission's decision, “this Court must evaluate whether the decision is supported by substantial evidence, and if it is, the decision cannot be overturned.” In re Appeal of Interstate Income Fund I, 126 N.C.App. 162, 165, 484 S.E.2d 450, 452 (1997) (citing In re Appeal of Perry–Griffin Found., 108 N.C.App. 383, 394, 424 S.E.2d 212, 218 (1993)). “Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” State ex rel. Comm'r of Ins. v. N.C. Fire Ins. Rating Bureau, 292 N.C. 70, 80, 231 S.E.2d 882, 888 (1977).
Id. Additionally, “[i]t is the responsibility of the Commission to determine the weight and credibility of the evidence presented.” In re Appeal of Owens, 144 N.C.App. 349, 352, 547 S.E.2d 827, 829 (emphasis in original), appeal dismissed and disc. rev. denied, 354 N.C. 361, 556 S.E.2d 575 (2001). Additionally, in appeals from a Tax Commission's decision regarding the validity of a county's present-use value schedule, “the good faith of tax assessors and the validity of their actions are presumed [.]”
In re McElwee, 304 N.C. 68, 75, 283 S.E.2d 115, 120 (1981) (citing In re Appeal of AMP, Inc., 287 N.C. 547, 562, 215 S.E.2d 752, 761–62 (1975)); In re Appeal of Parker, 191 N.C.App. 313, 316, 664 S.E.2d 1, 3 (2008).
[I]n order for the taxpayer to rebut the presumption he must produce “competent, material and substantial” evidence that tends to show that: (1) Either the county tax supervisor used an arbitrary method of valuation; or (2) the county tax supervisor used an illegal method of valuation; AND (3) the assessment substantially exceeded the true value in money of the property.
AMP, 287 N.C. at 563, 215 S.E.2d at 762 (emphasis in original). As petitioner's first and fourth arguments present questions of law, we apply a de novo review of those issues. See Murray, 179 N.C.App. at 783, 635 S.E.2d at 479. We have noted that “[i]n determining whether the Commission's decision is supported by competent, material and substantial evidence or arbitrary or capricious, we review the whole record.” In re Blue Ridge Mall LLC, –––N.C.App. ––––, ––––, 713 S.E.2d 779, 787 (2011). Therefore, we will apply the whole record test to petitioner's second and third arguments. We first address petitioner's first and fourth arguments.
Petitioner argues that Sampson County's present-use SOV “is illegal because it disregards the statutorily mandated critical factor: soil quality of each parcel is different and must be considered.” Specifically, petitioner argues that the present-use SOV is illegal because it does not follow statutory mandates in N.C. Gen.Stat. § 105–317(a) and 105–277.7 and does not permit each parcel to carry its proportional share of the tax burden. Respondent counters that “there is no statutory obligation for the Commissioners to use soil quality to determine present-use value of land in its [present-use values.]”
N.C. Gen.Stat. § 105–283 (2009) mandates that “[a]ll property, real and personal, shall as far as practicable be appraised or valued at its true value in money[,]” and defines “true value” as the
market value, that is, the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used....
(Emphasis added.) However, N.C. Gen.Stat. § 105–277.4(a) (2009) permits qualifying agricultural or forestland to be taxed “on the basis of the value of the property in its present use[.]” 1 N.C. Gen.Stat. § 105–277.2(5) (2009) defines “[p]resent-use value” as “[t]he value of land in its current use as agricultural land, horticultural land, or forestland, based solely on its ability to produce income and assuming an average level of management....” 2
A. N.C. Gen.Stat. § 105–317(a) requirements
Specifically, petitioner argues that the County's present-use SOV is illegal because it disregards N.C. Gen.Stat. § 105–317(a)'s mandate that the County must consider the “quality of soil” in making its assessment. Respondent argues that the County's present-use value meets the appraisal standards established by N.C. Gen.Stat. §§ 105–277.2(5) and 105–317(b), as it was based in part on the “2009 Cash Rent Study” contained in the “2011 Use–Value Manual for Agricultural, Horticultural and Forest Land” (“the manual”) and in part on comments from the public regarding the economic climate. N.C. Gen.Stat. § 105–317(a) lists factors to consider in valuing land including
“quality of soil [.]” 3 Yet the factors listed in N.C. Gen.Stat. § 105–317(a) do not address “present-use value[,]” but address only determinations as to “true value of land[.]” As noted above, present-use valuation operates as an exception to the requirement that real property “shall as far as practicable be appraised or valued at its true value in money.” See N.C. Gen.Stat. § 105–283. In fact, “[t]he statutory scheme for taxation of property qualifying for present use value treatment as defined in G.S. 105–277.2 and 277.3 is a tax deferment.” In re Appeal of Parker, 76 N.C.App. 447, 450, 333 S.E.2d 749, 752 (1985). See N.C. Gen.Stat. § 105–277.4(c) (). “Present use value” is often less than the “true value” of real property. See In re Appeal of Parker, 191 N.C.App. 313, 317, 664 S.E.2d 1, 4 (2008) ...
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