Tri-County Public Airport Authority v. Morris County Bd. of County Com'rs, TRI-COUNTY

• Decision Date: 15 July 1983
• Docket Number: No. 55284,TRI-COUNTY,55284
• Citation: 233 Kan. 960,666 P.2d 698
• Parties: PUBLIC AIRPORT AUTHORITY, A Public Corporation, Plaintiff/Appellee, v. MORRIS COUNTY BOARD OF COUNTY COMMISSIONERS, and Morris County Treasurer, Defendants/Appellants.
• Court: Kansas Supreme Court

Page 698

666 P.2d 698

233 Kan. 960

TRI-COUNTY PUBLIC AIRPORT AUTHORITY, A Public Corporation Plaintiff/Appellee, v. MORRIS COUNTY BOARD OF COUNTY COMMISSIONERS, and Morris County Treasurer, Defendants/Appellants.

No. 55284.

Supreme Court of Kansas.

July 15, 1983.

Syllabus by the Court

1. Where a full and adequate administrative remedy is provided in tax matters by statute, such remedy must ordinarily be exhausted before a litigant may resort to the courts.

2. The Kansas legislature, by the enactment of K.S.A.1982 Supp. 79-2005, K.S.A. 74-2426 (Ensley), and K.S.A.1982 Supp. 79-213, established a full and adequate administrative remedy for the determination of the tax-exempt status of property. Any property owner, including cities and other political subdivisions, must exhaust this administrative remedy before resorting to the courts.

David H. Heilman, Council Grove, argued the cause and was on the brief for appellant.

Robert C. Johnson, Herington, argued the cause and was on the brief for appellee.

PRAGER, Justice:

This is an action in mandamus brought by the Tri-County Public Airport Authority against the Board of County Commissioners of Morris County to determine the tax-exempt status of certain real property owned by the plaintiff and for recovery of real estate taxes paid on the land for the years 1977 through 1980.

The facts are not in dispute and essentially are as follows: The city of Herington acquired 1,720.5 acres of real estate on September 24, 1948, by a deed from the United States government. The United States previously had used the land during World War II as the "Delevan Army Air Base." On December 4, 1979, the city of Herington conveyed the land to the Tri-County Public Airport Authority (Tri-County). The taxes for 1977-78 were paid by the city but not under protest. The 1980 property taxes were not due and had not been paid at the time of the filing of the action on July 18, 1980. Tri-County was created by the city of Herington to operate an airport and came into existence on July 6, 1978. Only a portion of the 1,720.5 acres of land was actually used for a runway for the airport. Portions of the land were rented to private citizens under contract, providing for rental payments for use of portions of the land for a feed lot, private aviation activities, and other business purposes. The State Board of Tax Appeals, by an order dated February 16, 1971, had previously ordered and determined that the property was subject to taxation and was not exempt.

In its answer to Tri-County's petition, the defendant County filed an answer challenging the jurisdiction of the district court to consider the action. The trial court ruled that it had jurisdiction and proceeded to determine the question whether the airport property rented to others was exempt from ad valorem taxation. The district court held that the land was exempt from taxation under the provisions of K.S.A.1980 Supp. 79-201a. The defendant County appealed to this court.

At the outset, we are faced with the question of jurisdiction originally raised in the trial court. The district court made no specific finding as to the basis for its jurisdiction, simply holding that it had authority to decide the case. The jurisdictional issue presented must be considered and determined in the light of the Kansas statutes as they existed on July 18, 1980, when the action was filed in the district court. It is important to note that, after the ruling of the Board of Tax Appeals on February 16, 1971, holding that the property was not exempt, the city of Herington, which owned the property at that time, did not attempt to appeal the ruling and paid ad valorem taxes through 1979. Tri-County made no effort to obtain an up-to-date ruling from the Board of Tax Appeals (BOTA) on the tax-exempt status of the land in 1980. It simply filed a mandamus action against the County without attempting to exhaust its administrative remedies. The basic issue presented is whether the district court lacked jurisdiction of the mandamus action because of the failure of Tri-County to avail itself of the administrative remedies provided by the Kansas statutes.

Throughout our judicial history, mandamus has been utilized by taxpayers as a remedy in tax cases where other legal remedies provided at the time were deemed not to be an adequate remedy. In Robinson v Jones, 119 Kan. 609, 240 Pac. 957 (1925), mandamus was held to be a remedy available to an aggrieved taxpayer where a board of county commissioners had refused to comply with an order of the tax commission to refund taxes. In Kittredge v. Boyd, 136 Kan. 691, 18 P.2d 563 (1933), mandamus was held to be a proper remedy to require the state treasurer to repay money paid under protest. It was pointed out in the opinion that the plaintiff had no other plain and adequate remedy at law. State, ex rel., v. Williams, 139 Kan. 599, 32 P.2d 481 (1934), involved a dispute between a railroad company and two school districts as to who was entitled to certain tax money. It was not a simple exemption case where other remedies were available. Under the circumstances, mandamus was held to be a proper remedy in the case.

In State, ex rel., v. Davis, 144 Kan. 708, 62 P.2d 893 (1936), it was held that an order of the state tax commission that certain property be taken from the assessment roll as exempt could be reviewed in an action brought by the state on the relation of the county attorney. In that action, the State sought an injunction to enjoin the county treasurer and county clerk from complying with an order of the state tax commission granting an exemption. At that time, no direct appeal was provided to the district court from an order of the state tax commission. Since no other remedy was available, it was held that the State, as an aggrieved party, could maintain an action, using injunction, mandamus, or quo warranto as was best suited to the circumstances. The extraordinary remedy of injunction was available to the aggrieved party on the theory that no other adequate remedy was available.

The 1941 legislature enacted G.S.1935, 79-2005 (1941 Supp.) which is the forerunner of what is now K.S.A.1982 Supp. 79-2005. The new statute for the first time gave a taxpayer protesting the payment of taxes the right to bring an action, within thirty days after the filing of his tax protest, in a court of competent jurisdiction or, in the alternative, the right to file an application with the state commission of revenue and taxation (now the state board of tax appeals). 79-2005 thus provided an alternative judicial remedy to an aggrieved taxpayer after paying his taxes under protest. The thirty day limitation for filing the action in the district court was strictly enforced by the courts. Failure of the taxpayer to commence an action in district court to recover taxes paid under protest within thirty days after filing his protest deprived the district court of jurisdiction. Williams v. Board of County Commissioners, 192 Kan. 548, 389 P.2d 795 (1964).

The cases following the adoption of 79-2005 have consistently held that the remedies provided in that statute were cumulative, so that a taxpayer could pay his taxes under protest and either present his tax grievance to the administrative board provided for in the statute or file an action in district court within the time period allowed after protest. Addington v. Board of County Commissioners, 191 Kan. 528, 533, 382 P.2d 315 (1963); Board of Park Commissioners v. Board of County Commissioners, 206 Kan. 438, 480 P.2d 81 (1971).

Unfortunately, the various Kansas statutes pertaining to procedure in the area of taxation, including appeals, were not organized into a complete, rational scheme. K.S.A. 74-2426 permitted an appeal from the state board of tax appeals in most cases, but there were limitations on the right of a taxpayer to appeal to district court under that statute. In the case of In re Lakeview Gardens, Inc., 227 Kan. 161, 605 P.2d 576 (1980), it was held that the tax grievance statutes, Article 17 of Chapter 79 of the Kansas Statutes Annotated, contained no provision for a right of appeal to the courts from orders of BOTA correcting or refusing to correct irregularities. The court held specifically that K.S.A.1979 Supp. 74-2426, governing appeals from orders of BOTA was inapplicable to original applications for relief from tax grievances before BOTA under K.S.A. 79-1702. That case followed a prior decision, City of Kansas City v. Jones & Laughlin Steel Corp., 187 Kan. 701, 704, 360 P.2d 29 (1961), which limited appeals to the courts under 74-2426 to such cases as are appealed from the directors of revenue and property valuation as distinguished from original applications. It held that, there being no statutory provision for appellate review, relief could be found in such equitable remedies as quo warranto, mandamus, or injunction.

In the 1980 legislative session, the House Committee on Assessment and Taxation considered the confusion in the procedural aspects of the Kansas taxing law. It introduced comprehensive legislation which sought to achieve a number of specific objectives: (1) The elimination of direct actions filed in the district court in tax grievance cases and the requirement in all tax protest cases of a hearing before the board of tax appeals, with right of appeal to the district court; (2) a codification of the tax exemption procedure in Chapter 79, Article 2, with provision for judicial review of tax exemption matters under an omnibus appeals procedure statute, covering every type of order of the board of tax appeals. Such omnibus procedure statute was to include protests, exemptions, and equalization...