Herzog v. McKean County Board of Assessment Appeals
14 A.3d 193
| Pa. Commw. Ct. | 2011Background
- Herzogs owned two forest reserve parcels in McKean County totaling about 1,021.91 acres, eligible for preferential assessments under the Clean and Green Act for 2000 and 2002.
- McKean County Assessor used the Commonwealth's forest reserve use values ($186/acre in 2000 and $244/acre in 2002) to calculate preferential assessments totaling $60,820 (2000) and $187,440 (2002).
- After applying the county’s predetermined tax ratio, real estate taxes were assessed as $10,563 (2000) and $46,863 (2002).
- Herzogs appealed, challenging the Commonwealth use values as improper and arguing for alternative use-value methodologies (notably Zapel’s discounted cash flow approach).
- The Board and trial court credited the Commonwealth-based use values and the income-capitalization approach proposed by the Commonwealth’s witnesses, rejecting Zapel and Lombardo’s alternatives.
- The appellate court affirmed, holding county assessors may rely on Commonwealth use values or establish uniform lower values, and that the income-capitalization method complies with the Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly weighed expert testimony | Herzogs argue Zapel’s testimony should be credited as uncontradicted. | McKean County supported McDill; Zapel lacked Clean and Green experience. | No reversible error; trial court credited McDill and rejected Zapel. |
| Whether use values in forest reserves must be Commonwealth-derived | County assessors may justify using non-Commonwealth values and must reflect parcel-specific timber value. | Act allows use of Commonwealth values or lower uniform county values without further justification. | Use of Commonwealth use values or uniform lower values is permissible. |
| Whether the income-capitalization approach is allowed for forest reserves | Use values should reflect current timber value of each parcel. | Income-capitalization yields stable, countywide use values aligned with Act. | Income-capitalization methodology is permitted and appropriate for forest reserves. |
| Whether Way v. Berks or Independent Oil & Gas impede the result | Way limits applicability of income approach. | Way is inapplicable; Independent Oil & Gas does not control forest-reserve taxes. | Way and Independent Oil & Gas do not defeat the use of Commonwealth values or income approach here. |
| Whether the uniformity requirement is satisfied | Zap el’s parcel-specific values would violate uniformity. | Uniform countywide application is maintained when using Commonwealth or uniform lower values. | Uniformity is satisfied under the Act; county-wide use values are preserved. |
Key Cases Cited
- Deitch Co. v. Board of Property Assessment, Appeals and Review of Allegheny County, 417 Pa. 213 (Pa. 1965) (tax assessment burden-shifting framework)
- Green v. Schuylkill County Board of Assessment Appeals, 565 Pa. 185 (Pa. 2001) (trial court findings affirmed with substantial evidence standard)
- Way v. Berks County Board of Assessment, 990 A.2d 1191 (Pa.Cmwlth. 2010) (limits of income approach; agricultural context; not forest reserves)
- Independent Oil and Gas Association of Pennsylvania v. Board of Assessment Appeals of Fayette County, 814 A.2d 180 (Pa. 2002) (statutory taxation authority distinctions; oil and gas context)
- Feick v. Berks County Board of Assessment Appeals, 720 A.2d 504 (Pa.Cmwlth. 1998) (uniformity and preferential assessment principles)