In this рroperty tax case, Adams County Board of County Commissioners (the county) appeals the State Board of Assessment Appeals' (BAA) order requiring the county to reclassify as agricultural 14 real property parcels, totaling approximately 220 acres, in Commerce City (the property) bеlonging to Aberdeen Investors, Inc. (taxpayer). We affirm.
I. Background
Taxpayer purchased the property on March 19, 2004. No farming or grazing activities occurred on it in 2004. On July 1, 2005, taxpayer leased the property to a cattle company. The company immediately commenced grazing cattle оn the property and continued doing so throughout the remaining 2005 grazing season. It also grazed cattle on the property during the 2006 and 2007 grazing seasons and used it for supplemental feeding outside those seasons.
The Adams County assessor classified the property as vacant land for tax year 2007. Taxрayer challenged that classification and appealed to the BAA. In its order, the BAA concluded that grazing and feeding cattle on the property from July 1, 2005 through 2007 constituted agricultural usage for the previous two years under section 39-1-102(1L.6)(a)(I), C.R.S.2009, and therefore ordered the county to reclassify thе property as agricultural for tax year 2007. |
II. Standard of Review
A reviewing court must give appropriate deference to the BAA's interpretation of property tax statutes unless those interpretations are clearly erroneous. E.R. Southtech, Ltd. v. Arapahoe County Bd. of Equalization,
Because appropriately classifying property for tax purposes involves mixed legal and factual issues, the BAA's classification order must be sustained if it has a reasonable basis in law and is supportеd by substantial evidence in the record as a whole. E.R. Southtech,
TII Analysis
The county contends the BAA erred in ordering it to reclassify the property as agricultural. We disagree.
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To qualify as "agricultural land" under section 89-1-102(1.6), C.R.S.2009, the land must (1) be presently used as а farm or ranch; (2) have been so used during the two-year period prior to the assessment; (8) have been classified or eligible for classification as agricultural land during the ten years preceding the assessment year; and (4) continue to have actual agricultural use. M.D.C. Constr. Co.,
The parties do not dispute that taxpayer satisfied the first, second, and fourth elements. Thus, the only issue here is whether taxpayer satisfied the statutory requirement that the property be "usеd the previous two years ... as a farm or ranch." § 39-1-102(1.6)(a)(I).
When interpreting statutes, we seek to give effect to legislative intent by affording statutory terminology its commonly accepted meaning. M.D.C. Constr Co.,
The county argues that section 39-1-102(1.6)(a)(I) requires land be used continuously as a farm or ranch for at least two years preceding a January 1 assessment date to bе classified as agricultural land. We disagree.
To classify land as agricultural, section 39-1-102(1.6)(a)(I) requires that the land "was used the previous two years and presently is used as a farm or ranch." As the BAA noted, there is no statutory requirement that the property be used throughout the previous two years as a farm оr ranch. The BAA also observed that agricultural classification is unique in property taxation because using a property as a farm or ranch seldom occurs on January 1. A county agricultural appraiser testified that growing seasons vary throughout the counties and each year has its own grаzing and growing season. Moreover, the legislature recognized that portions of a ranch may not be used for grazing in a particular year. See Douglas County Bd. of Equalization v. Clarke,
The county's proposеd interpretation also conflicts with existing case law. In Clarke, our supreme court held that "for a piece of land to be classified as agricultural land for ... tax purposes, section 89-1-102(1.6)(a)(I) . requires that it be a parcel of land ... used as a farm or ranch ... in both the prior two tax years and the tax year at issue."
The county's reliance on Von Hagen v. Board of Equalization,
If subsection (1.6) required the land to have been "used during the previous two years ... as a farm or ranch," we would interpret it to mean that land had to be usеd for farm or ranch purposes at some time during the preceding two years, but not nee-essarily during each of the preceding two years. See id. Accordingly, we reject the county's argument and agree with the BAA's conclusion that section 89-1-102(1.6)(a)(I) requires that property be used as a farm or ranсh during each of the preceding two years and the present tax year. See Clarke,
The county further argues that an agricultural use which commences mid-year cannot count as the first year of the two-year requirement under section 39-1-102(1.6)(a)(I). We disagree.
The county maintains that the Assessor's Reference Iibrary (ARL) supports its position. According to the ARL, a property's classification is determined by its use on the assessment dаte. 2 ARL: Administrative and Assessment Procedures § 1.1 (rev.Apr. 2006). "When the use of a property changes after January 1, the assessment date, the classification assigned to the property as of January 1 remains in place until the following January. This includes a class or subclass change mid-year." Id. at § 6.6 (emphasis added).
However, as the BAA pointed out, that same chapter contains a specific "Agrieultural Property" section, which provides that to be clasgified as agricultural, land must be used as a farm or ranch pursuant to section 39-1-102(8.5) and (18.5), and "[the use must have been the same for at least the two prior years." Id. at § 6.30 (now § 6.33, as revised Oct. 2009). Because the property was used as a ranch for the two preceding tax years and in 2007, the ARL supports the BAA's order to reclassify the property as agrieultural.
The county also argues that Johnston v. Park County Board of Equalization,
The county's reliance on Johnston does not acknowledge the distinction between "use" and "classification." The proper inquiry under subsection (1.6) is the property's use during the preceding two tax years, and agricultural use commenced in July 2005. Although January 1 is the relеvant date for classification purposes, the property was still used for agricultural purposes in 2005. Moreover, as the BAA pointed out, if the legislature intended qualifying agricultural uses to be in place by January 1 for each of the two preceding years, it could have so stated. Because section 39-1-102(1.6) requires two years of agricultural "use," we agree with the BAA's conclusion that 2005 qualified as the first year of agricultural use.
Next, the county contends that the BAA erred in not giving appropriate deference to the Property Tax Administrator's interpretation of section 89-1-102(1.6)'s two-year requirement. We are not persuaded.
The Property Tax Administrator (PTA) issued a memorandum to the Adams County Assessor and distributed it to the Adams County Attorney. The memorandum con *403 cluded that under section 39-1-102(1.6)(a)(I) "land does not qualify for its first year of eligibility for agricultural classification until January 1st of the year that the actual use is occurring." According to this interpretation, the first year of agricultural use for classification purposes here would be 2006, and if the property continued to be used as a farm or ranch, it would be classified as agricultural in 2008.
When construing a statute, courts defer to the statutory interpretation provided by the officer or agency charged with its administration. El Paso County Bd. of Equalization v. Craddock,
Here, the BAA's and the PTA's interpretations of subsection (1.6) conflict. For the reasons discussed above, we are persuaded that the BAA's interpretation is correct.
The county maintains that we should defer to the PTA's interpretation. However, in the cases cited by the county, reviewing courts deferred to the PTA's interpretations embodied in the ARL manuals. Huddleston,
The BAA gave "little weight" to the PTA's memorandum because it was not published in the ARL. For interpretations to be published in the ARL, and therefore binding оn all counties, a position is drafted, sent to the Statutory Advisory Committee for approval, and then sent to Legislative Legal Services, as required by statute. § 89-2-109(1)(e), CRS 2009 ("the administrator shall have and exercise authority to ... prepare and publish from time to time manuals, appraisal procedurеs, and instructions, after consultation with the advisory committee to the property tax administrator and the approval of the state board of equalization, concerning methods of appraising and valuing land, improvements, personal property, and mobile homes and to require their utilizаtion by assessors in valuing and assessing taxable property").
Here, the PTA's position appeared in a memorandum issued to Adams County without undergoing the review process detailed in section 39-2-109(1)(e). Because the PTA's interpretation was not embodied in the ARL, the BAA did not err in declining to defer to it. Cf Craddock,
While the PT'A's interpretation did not undergo the statutory review process required for publication in the ARL, the BAA's order reflected its interpretation of subsection (1.6) embodied in its other opinions. The BAA's order states, "Thе Board historically has looked to agricultural activity during the previous two tax years when addressing whether a property should be classified as agricultural, with no mention of January 1 two years prior to the assessment date." Thus, the BAA's interpretation embodied its consistent application of subsection (1.6) in opinions; in contrast, the PTA's position appeared in a memorandum issued to the county without undergoing the statutory review process required for appearing in the ARL According ly, we conclude that the BAA's interpretation is entitled to greater deference.
Moreover, for the reаsons discussed, the PTA's and county's interpretation is inconsistent with the statutory text. See M.D. C. Constr.,
The order is affirmed.