Leverett v. Jasper County Bd. of Tax Assessors, A98A0243.

• Decision Date: 16 July 1998
• Docket Number: No. A98A0243.,A98A0243.
• Parties: LEVERETT et al. v. JASPER COUNTY BOARD OF TAX ASSESSORS.
• Court: Georgia Court of Appeals

504 S.E.2d 559

233 Ga. App. 470

LEVERETT et al. v. JASPER COUNTY BOARD OF TAX ASSESSORS.

No. A98A0243.

Court of Appeals of Georgia.

July 16, 1998.

Jay S. Ricketts, Atlanta, for appellants.

W. Dan Roberts, Monticello, for appellee.

ELDRIDGE, Judge.

The trial court in this bench trial committed legal error in entering a judgment for the Jasper County Board of Tax Assessors ("Assessors") for two reasons that caused the assessments to lack uniformity: (1) in failing to follow the mandate of OCGA § 48-5-2(3)(B)(ii) and (iv) "[e]xisting use of [the] property" and "[a]ny other factors deemed pertinent in arriving at fair market value"; and (2) in failing to exempt from taxation standing timber under the uniformity mandate of OCGA §§ 48-5-7.1(a)(1) and 48-5-7.5 as set forth in Art. VII, Sec. I, Par. III(e)(2), Ga. Const. of 1983 (Ga. L.1990, pp. 2437, 2438, § 2), "standing timber shall be assessed only once, and such assessment shall be made following its harvest or sale and on the basis of its fair market value at the time of harvest or sale." These errors resulted from following the erroneous appraisal methods used by the Assessors in which growing, but not yet marketable, timber is treated as adding no value to the land and in which stump land and scrub timberland are treated as having substantially the same value as cleared cultivatable land, pasture land, or growing timberland.

1. The Assessors failed to follow the mandate of OCGA § 48-5-2(3)(B)(ii) and (iv) when they refused to consider "[e]xisting use of the property" both as to the comparables and as to the subject property. This made their method of arriving at evidence of comparable value an error of law. Inland Container Corp. v. Paulding County Bd. of Tax Assessors, 220 Ga.App. 878, 470 S.E.2d 702 (1996). "Under that statute, the tax assessor must consider, inter alia, the existing use of property and `any other factors deemed pertinent in arriving at fair market value.' OCGA § 48-5-2(3)(B)(ii) and (iv)." Id. at 879(1) . Thus, the trial court, in relying upon a valuation conducted in violation of OCGA § 48-5-2(3)(B)(ii) and (iv), committed a plain legal error in thus ruling for the Assessors and against the taxpayers, Cason and Leverett.

Further, such failure to follow statutory mandate is reviewed by "the customary `plain error' standard of appellate review." Harper v. Landers, 180 Ga.App. 154, 157, 348 S.E.2d 698 (1986). This is not an analysis under the "any evidence" standard, which deals with errors of law based upon the factual predicate. Hawkins v. Grady County Bd. of Tax Assessors, 180 Ga.App. 834, 835(3), 350 S.E.2d 790 (1986).¹ The recitation of the evidence in the record is only to show how the refusal to obey the statutory mandate led the Assessors and the trial court into reversible legal error.

(a) The General Assembly in 1991 exempted standing timber, both growing and marketable, from ad valorem taxation until the standing timber is sold unharvested or after harvest, whichever first occurs. See Ga. L.1991, pp.1903, 1907, 1919-1924, §§ 2, 6; OCGA §§ 48-5-7(b); 48-5-7.1(a)(1); 48-5-7.5 (unamended). Such Act was passed under the uniformity requirement of Art. VII, Sec. I, Par. III(e)(2), Ga. Const. of 1983 that permits only one assessment of standing timber, either on sale or harvest.

This annual tax exemption caused a major problem for Jasper County because $20,000,000 of standing timber, representing 51,000 acres of timberland, suddenly was removed from the county tax digest. The Jasper County Board of Tax Assessors ("Assessors") was in the middle of a reappraisal of the timberland and suddenly had to change the method of their appraisals of timberland. Both appellants' tracts were timberland.

Under the statute, the Assessors could no longer value timber on the land as part of the fair market value of the land for assessment purposes. Therefore, they made the decision to ignore and treat growing timber of less than six inches in diameter under the assumption that it had zero value as nonmerchantable. They assumed that merchantable timber is "[t]imber that you can sell on the market if there's a market for it." They assumed that the minimum size pine tree to qualify as pulpwood would be a tree with a six-inch diameter or greater. They made another assumption that all rural land, i.e., cleared land, stump land, and non-merchantable timberland, was of comparable value except where there is "merchantable timberland." Stump land is land where the trees have been harvested, and the stumps, brush, and debris remain on the land.

However, the Chief Assessor admitted in judicio that cleared land and stump land had a substantial difference in value, because it cost approximately $400 per acre to clear the land, i.e., grub out the stumps, clear the land, and burn the debris. Therefore, stump land versus cleared land, i.e., pasture, agriculture fields, and even cleared and replanted pine land, have a substantially different value based upon cost to improve alone; thus, improved land has a higher acreage fair market value which reflects the cost of clearing and replanting pines or of fencing.

Thus, under the Assessors' methodology, previously harvested timberland that had been replanted and contained replanted standing timber less than six inches in diameter was treated as having no value added to the land price because the timber is non-merchantable in that tax year, although the timber would have value upon maturity. The record contained expert witness testimony which demonstrated that clearing and replanting pines can cost up to $400 per acre. If the land reassessed had standing timber, then the Assessors sought to determine the stump value of the land under the standing timber without calculating the value of the timber.

The Assessors decided that the way to determine the value of timberland, without determining the value of the standing timber and subtracting such value from the overall value of the timberland, was to determine the value of rural land alone without regard to timber. This would save them labor, even though the pre-1992 reappraisal provided the data for such calculations as part of the Assessors' records. Further, in the individual property reappraisals they made no adjustment for timber on the land to prevent taxing the timber. In fact, the Assessors ignored the value of standing timber on the land. However, using such comparable sales, the Assessors also made no adjustment to fair market value for the comparable sales or tracts reassessed for standing timber, i.e., growing or merchantable. On all of the comparable sales the tax records indicate that there was some timber on the land, but the timber was treated as having no value. Therefore, the timber value was reflected in the price of the land, because the value of the timber alone was not removed.

Had the Assessors calculated the value of the growing timber, i.e., seedling to pre-marketable timber, for each comparable tract sold, subtracted out such growing timber value, and then calculated the sales ratio from the remaining values, such method could then be used as a comparable for stump land to determine the fair market value of the land with timber being reassessed without calculating the value of the timber. In short, had the Assessors, in arriving at their 19 comparables for the sales ratio, accounted for the value that growing timber added to the land and subtracted out such value to arrive at the fair market value for the stump land alone, then those 19 calculations of growing timber value subtracted out of the comparables would allow them to have a sales ratio for stump land that would allow them to ignore the standing timber on each reassessment, because the fair market value of the comparables thus determined would reflect only the value of stump land and not have land and growing timber mixed together to form the fair market value.

(b) In the initial nineteen large acreage tracts the Assessors had as part of the sales ratio and as having no merchantable timber to form the comparables the following is shown by the record: seventeen had been partially cut over to form stump land or had some scrub timber; eight had significant natural regeneration of pines; eight had wellstocked, natural regeneration of pines; one had pine trees less than twenty feet tall and four inches in diameter; two had pines taller than twenty feet and more than four inches in diameter; and the two Greer tracts, upon belated visual inspection, had merchantable standing timber. Of the comparables, eleven were sales of less than fifty acres, and only seven were sales of one hundred acres or more. All of the comparables were classified as primarily woodland with no merchantable standing timber, although two were later determined to have significant merchantable timber. While none was classified as being cultivated open land, seven had some pasture land between three and 25.82 acres, with the remaining acreage primarily woodland; however, one one hundred six-acre parcel had sixty-eight acres of pasture. Two had ponds: one was an eight-acre pond, and the other was a one-acre pond.

The flaw in the methodology used by the Assessors in relation to the property described above is that the Assessors ignored the mandate of OCGA § 48-5-2(3)(B)(ii) and (iv) requiring the consideration of the "[e]xisting use of property" and "[a]ny other factors deemed pertinent in arriving at fair market value," i.e., OCGA § 48-5-7.4(a)(1) and (2). They ignored the existing use of the comparable sales of woodland, as well as the appellants' timberland, by ascribing no value to the growing trees. They recognized that the value of mature trees influenced the value of the land; however, they refused to recognize that stump land had a different value from pasture with fencing or fields, because of land preparation and clearing costs.

In their tax records, the Assessors already had...