Welby Gardens v. Adams County Bd. of Equalization

• Citation: 71 P.3d 992
• Decision Date: 23 June 2003
• Docket Number: No. 02SC415.,02SC415.
• Parties: WELBY GARDENS, Petitioner, v. ADAMS COUNTY BOARD OF EQUALIZATION; Board of Assessment Appeals, State of Colorado, Respondents.
• Court: Colorado Supreme Court

71 P.3d 992

WELBY GARDENS, Petitioner, v. ADAMS COUNTY BOARD OF EQUALIZATION; Board of Assessment Appeals, State of Colorado, Respondents.

No. 02SC415.

Supreme Court of Colorado, En Banc.

June 23, 2003.

William A. McLain, Denver, Colorado, Attorney for Petitioner.

James D. Robinson, Adams County Attorney, Jennifer Wascak Leslie, Assistant County Attorney, Brighton, Colorado, Attorneys for Respondent Adams County Board of Equalization.

Ken Salazar, Attorney General, John D. Baird, First Assistant Attorney General, State Services Section, Denver, Colorado, Attorneys for Respondent Board of Assessment Appeals.

Justice RICE delivered the Opinion of the Court.

Petitioner, Welby Gardens, appeals the court of appeals reversal of the Board of Assessment Appeals (BAA) classification of its greenhouse properties. Welby Gardens Co. v. Adams County Bd. of Equalization, 56 P.3d 1121 (Colo.App.2002). The BAA concluded that Petitioner's greenhouse met the statutory definition of a "farm" and therefore should be classified as agricultural land. The court of appeals reversed, concluding that the definition had not been satisfied and therefore Petitioner's land should not be classified as agricultural. We granted certiorari and now hold that Petitioner's greenhouse properties do not meet the statutory definition of a "farm." The court of appeals opinion is affirmed.

I. FACTS AND PROCEDURAL HISTORY

Petitioner, Welby Gardens, disputes the 1999 property tax classification of its greenhouse properties. The issue for our review is whether the property, which has been classified as "all other agricultural" property, should have been classified as agricultural land.¹

There are three parcels of land at issue. Two parcels and a portion of the third are covered by numerous greenhouse buildings. The greenhouses provide a fully-enclosed, climate-controlled environment for the cultivation of various vegetables, flowers, and fruiting plant starts. None of the plants are grown in the soil of the land itself, but rather are grown in containers which sit on top of the ground. Typically, the soil in the containers is purchased from outside sources; it is not derived from the property. In fact, Petitioner concedes that the growth of the plants does not in any way depend on the location of the greenhouses on that particular piece of property. All the factors which typically affect the productivity of agricultural land, including temperature, humidity, and soil quality, are completely regulated and controlled in the greenhouse environment.

For tax year 1999, the Adams County assessor classified the three parcels of land as residential and "all other agricultural property." Petitioner, arguing that the land should have been classified as agricultural, appealed to the Adams County Board of Equalization. The Board affirmed the assessor's determination. Next, Petitioner appealed to the state Board of Assessment Appeals. The BAA disagreed with the county's position and held that the land located under the greenhouses should be classified as agricultural.² On appeal, the court of appeals reversed the BAA and held that the greenhouse land was properly classified as "all other agricultural property." We granted certiorari to resolve the question of whether greenhouse property may be classified as agricultural land.

II. ANALYSIS

In Colorado, owners of agricultural land receive favorable tax treatment. While other types of land are valued using one of three appraisal methods, the cost approach, the market approach, and the income approach, the value of agricultural land is determined "solely by consideration of the earning or productive capacity" of the land. Colo. Const. art X, § 3(1)(a). In addition, agricultural equipment, at least to the extent it is classified as personal property and not fixtures, is exempt from taxation. Colo. Const. art X, § 3(1)(c); see also Del Mesa Farms v. Bd. of Equalization, 956 P.2d 661 (Colo.App. 1998)

(discussing the distinction between agricultural personal property and fixtures). Thus, the combination of these two provisions—the favorable valuation on the land itself and the tax exempt status of agricultural equipment—results in a far lower tax burden on owners of agricultural land.

The question before this court is whether Petitioner's land should be classified as agricultural. "Agricultural land" is defined, in relevant part, as a "parcel of land ... that was used the previous two years and presently is used as a farm or ranch ...." § 39-1-102(1.6)(a)(I), 11 C.R.S. (2002). A "farm," in turn, is defined as a "parcel of land which is used to produce agricultural products that originate from the land's productivity for the primary purpose of obtaining a monetary profit." § 39-1-102(3.5) 11 C.R.S. (2002). Hence, our task is to determine whether Petitioner's property qualifies as a "farm."

There is no dispute that Petitioner's property meets at least part of the definition of a farm. First, Petitioner's products are undoubtedly "agricultural products" as that term is defined in the statute. See § 39-1-102(1.1), 11 C.R.S. (2002) (agricultural products include, among other things, plant products in a "raw or unprocessed state" produced through the science of horticulture). In addition, the primary purpose of the greenhouse facility is to obtain a monetary profit. Therefore, only one phrase of the "farm" definition requires our attention: whether the plants produced in the greenhouse "originate from the land's productivity." § 39-1-102(3.5), 11 C.R.S. (2002).

Petitioner argues that the phrase, "originate from the land's productivity" should be construed broadly. Because the land provides a location for the greenhouse buildings, the products grown within the buildings "originate from the land's productivity." On the other hand, Respondent contends that a plain language interpretation of the phrase, "originate from the land's productivity," requires some connection or nexus between the agricultural products grown at the site and the soil itself.

We hold that the plain language of the statute requires some nexus between the agricultural product produced on the land and the land itself. The mere placement of a building on the land is not a sufficient connection to satisfy this statutory mandate. To inform our opinion, we first consider the plain language of the statute and hold that the phrase, "originate from the land's productivity," requires some connection, or nexus, between the agricultural product and the land such that the agricultural product arises from the land's productivity. The placement of a building on the land, by itself, is insufficient to furnish this connection. We further explore the substantial legislative history regarding the passage of this statute but uncover nothing which compels us to deviate from the plain language of the statute. Finally, we decline Petitioner's invitation to infer intent based on legislative inaction. The court of appeals' decision is affirmed.³

A. Plain Language

In any statutory interpretation, our task is to determine and give effect to the intent of the General Assembly. James E. Freemyer, P.C. v. Indus. Claim Appeals Office, 32 P.3d 564 (Colo.App.2000). A tax statute is no different than any other statute; it must be construed as a whole in order to give consistent, harmonious, and sensible effect to all of its parts. Bell & Pollock, P.C. v. City of Littleton, 910 P.2d 69 (Colo.App. 1995). In construing a statute, interpretations that render statutory provisions superfluous should be avoided. Indus. Claim Appeals Office v. Orth, 965 P.2d 1246, 1254 (Colo.1998).

The statutory language "originate from the land's productivity" is clear and unambiguous. In order to qualify as a farm, there must be some connection between the agricultural product and the productivity of the land which is being valued. Specifically, the connection is that the agricultural product must "originate" from the land's productivity. "Originate" has a commonly understood definition, namely, to "give rise to." Websters Third New International Dictionary 1592 (1986). Thus, the land's productivity must give rise to the agricultural product.

The question, therefore, is whether the placement of a building on the land, by itself, provides a sufficient connection such that the land may be said to have "given rise to" the plants grown within the building. We believe it does not. Were we to hold that the placement of a building is sufficient connection, the phrase "originate from the land's productivity" would have essentially no meaning. If these plants—which are grown in a fully enclosed, climate-controlled building and never touch the soil of the subject land satisfy this requirement, we cannot envision any plant product that would not.

We need not, however, attempt to decipher the meaning of the phrase, "originate from the land's productivity," in all possible circumstances. The facts which are necessary to satisfy this statutory requirement will inevitably fluctuate based upon the specific type of agricultural operation at issue. This case requires nothing more than to determine whether a building, by itself, provides sufficient connection to the land to satisfy the statute. We conclude it does not. We leave the precise contours of the phrase open to future interpretation by the Division of Property Taxation, the courts, and perhaps, to further guidance from the legislature.

Since the General Assembly included the requirement that the products must "originate from the land's productivity," the phrase must have some meaning. We hold that the phrase, "originate from the land's productivity," requires some connection, or nexus, between the agricultural product and the land such that the agricultural product arises from the land's productivity. This nexus must be more substantial than merely providing a location for the placement of a structure in which agricultural products are produced.

B...