ADAMS ET AL., APPELLANTS, v. TESTA, TAX COMMR., APPELLEE.
No. 2016-0256
Supreme Court of Ohio
December 7, 2017
2017-Ohio-8853
DEWINE, J.
Submitted June 6, 2017. APPEAL from the Board of Tax Appeals, No. 2015-1090.
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2017-OHIO-8853
ADAMS ET AL., APPELLANTS, v. TESTA, TAX COMMR., APPELLEE.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Adams v. Testa, Slip Opinion No. 2017-Ohio-8853.]
Taxation—Real-property valuation—
(No. 2016-0256—Submitted June 6, 2017—Decided December 7, 2017.)
APPEAL from the Board of Tax Appeals, No. 2015-1090.
DEWINE, J.
{¶ 1} Each year, to enable county auditors to determine the value of farmland for tax purposes, the Ohio Tax Commissioner adopts a journal entry that sets forth a table assigning per-acre values—current agricultural-use values
{¶ 2} A group of landowners who believe that some of their land is being overvalued sought to challenge the tax commissioner‘s journal entry in a proceeding before the Board of Tax Appeals (“BTA“). The BTA dismissed the appeal, concluding that it did not have jurisdiction under
{¶ 3} The landowners appealed the BTA‘s decision to this court. We agree with the BTA that the journal entry is not a rule and thus not subject to challenge under statutory provisions dealing with rulemaking. But we conclude that the journal entry is a “final determination,” which the BTA has jurisdiction to review. Thus, we reinstate the appeal.
I. Current agricultural-use values (CAUVs)
{¶ 4} In 1974, the
{¶ 5} Pursuant to this directive, the tax commissioner adopted rules setting forth a method by which the commissioner, in consultation with an agricultural advisory committee, sets CAUVs on an annual basis. See
{¶ 6} Included in the definition of agricultural land is land upon which timber is grown that is part of or next to farmland.
{¶ 7} The CAUVs are set forth in a table that is promulgated by the tax commissioner each year.
II. The proceedings below
{¶ 8} In August 2015, the landowners appealed the tax commissioner‘s CAUV journal entry to the BTA. Their principal complaint was that when the commissioner set the $1,000-per-acre woodland-clearing cost for 2015 and maintained the 2013 and 2014 $500-per-acre cost, he ignored evidence showing that the clearing cost for woodland averaged $3,350 per acre. Thus, the landowners claimed that their woodland was being overvalued. The landowners later filed an amended notice of appeal, alleging that the entry is a rule. The amended notice
{¶ 9} The proceedings before the BTA were somewhat convoluted. The BTA issued five separate orders that culminated with a February 1, 2016 order dismissing the case. Because one of the issues raised by the tax commissioner in the matter before us is the timeliness of the landowners’ appeal to this court, we discuss each of the BTA‘s orders.
{¶ 10} In the first decision issued by the BTA—dated November 9, 2015—a BTA hearing examiner concluded that the BTA did not have jurisdiction over the appeal of the CAUV journal entry. The hearing examiner reasoned that
{¶ 11} The landowners sought to amend their notice of appeal a second time, again challenging the woodland-clearing costs used by the tax commissioner in the CAUV journal entry. In an order issued December 11, 2015, the BTA denied the motion to amend, reiterating its prior holding that the BTA lacked jurisdiction to consider a challenge to the administrative journal entry issued by the tax commissioner.
{¶ 12} The landowners filed a second motion for leave to amend their notice of appeal. The landowners noted that they were dropping their
{¶ 13} In response to the show-cause order, the landowners acknowledged that they were not pursuing the rule review allowed by the BTA but maintained that the BTA had jurisdiction under
{¶ 14} The landowners—on February 17, 2016—filed a notice of appeal in this court from the five orders issued by the BTA. They challenge the BTA‘s conclusions that it did not have jurisdiction under
III. The landowners’ appeal of the BTA decision was timely
{¶ 15} As an initial matter, the tax commissioner challenges the timeliness of the landowners’ appeal to this court.
{¶ 16} The problem with the tax commissioner‘s argument is that the December 9 order (and the other three orders issued prior to February 1, 2016) were not final, appealable orders because the orders did not resolve all the landowners’
IV. The BTA‘s jurisdiction to hear an appeal under R.C. 5717.02(A)
{¶ 17} The BTA dismissed the landowners’ appeal of the CAUV journal entry, because it concluded that the entry was not a “final determination” under
Except as otherwise provided by law, appeals from final determinations by the tax commissioner of any preliminary, amended, or final tax assessments, reassessments, valuations, determinations, findings, computations, or orders made by the commissioner may be taken to the board of tax appeals by the taxpayer, by the person to whom notice of the tax assessment, reassessment, valuation, determination, finding, computation, or order by the commissioner is required by law to be given, by the director of budget and management if the revenues affected by that decision would accrue primarily to the state treasury, or by the county auditors of the counties to the undivided general tax funds of which the revenues affected by that decision would primarily accrue.
{¶ 18} Thus, to be appealable under
A. The CAUV journal entry is a determination made by the tax commissioner
{¶ 19} There can be little dispute that the CAUV journal entry is a “determination[] * * * made by the commissioner.”
(A) An agricultural advisory committee shall be created to annually advise the tax commissioner on economic, technological and other current developments that might be considered in the determination of agricultural land values as defined in these rules.
* * *
* * *
(C) The commissioner may consider such recommendations in making the annual determination.
(Emphasis added.)
B. The determination made in the CAUV journal entry is a final determination
{¶ 21} Rather than challenge whether the CAUV journal entry is a determination, the tax commissioner focuses his argument on whether it is a “final determination.” The BTA premised its dismissal of the landowners’ appeal on the tax commissioner‘s assertion that he had ” ‘not issued a final determination’ with regard to the appellant taxpayers.” BTA No. 2015-1090, 2015 Ohio Tax LEXIS 4018, *1 (Nov. 9, 2015).
{¶ 22} On its face, there seems little question that the determination made in the CAUV journal entry is final. There are two senses in which the word “final” is commonly used. The first is “coming at the end“—for example, “the Reds were down to their final at-bat.” See Webster‘s Third New International Dictionary 851 (2002). The second is “not subject to revision“—for example, “that‘s my decision, and it is final.” See id. The tax commissioner‘s journal entry qualifies as final in both senses of the word.
{¶ 23} Pursuant to the administrative rules, the tax commissioner annually consults with the agricultural advisory committee and then adopts a “proposed entry setting forth the necessary modifications and values to be used in establishing the current agricultural value of land.”
{¶ 25} It follows, then, that under any plain reading of the English language, the tax commissioner made a final determination. The CAUV journal entry is a determination, and that determination is final.
{¶ 26} The tax commissioner urges us to look beyond the ordinary meaning of “final determination“; he advocates that the phrase is a term of art that describes the result of an adjudicative review. In support, he points to cases in which we determined that there was no final determination under
{¶ 27} For example, in Makowski v. Limbach, 62 Ohio St.3d 412, 583 N.E.2d 1302 (1992), a county auditor appealed the tax commissioner‘s certification of estimated library-fund payments due to the county. We concluded that the certification was not a final determination from which an appeal could be taken under
{¶ 28} The tax commissioner argues that similar to the certification at issue in Makowski, the CAUV journal entry is not appealable because it was “merely the ministerial act of publishing the CAUV table in [the] journal.” But this argument
{¶ 29} The tax commissioner relies upon two other cases in support of his argument that a “final determination” must be an adjudicative decision. In Cooke v. Kinney, 65 Ohio St.2d 7, 417 N.E.2d 106 (1981), the Independence City Council attempted to appeal the tax commissioner‘s review of the Cuyahoga County auditor‘s triennial real-property assessment. The statute at issue,
{¶ 30} Contrary to the tax commissioner‘s suggestion, Cooke and Michelin Tire do not stand for the proposition that a final determination may exist only when “contested adjudicative action” has taken place. Rather, the two decisions are in accord with the ordinary meaning of the word “final.” In both cases, the tax commissioner‘s decision was not final because there were other steps that had yet to be taken or that could have been taken—in Cooke, the calculation of tax rates and valuations and the
{¶ 31} In this case, unlike Cooke and Michelin Tire, no other review of the CAUV determination was available to the landowners. Once a public hearing is held on the tax commissioner‘s proposed entry setting forth the CAUV values, he adopts it for the county auditors’ use.
{¶ 32} We conclude that nothing in the plain language of the statute or in our case law limits “final determination[s]” to those acts resulting from an adjudication. The determination of CAUVs is final when, pursuant to rule, the tax commissioner adopts the journal entry. Thus, the CAUV journal entry is a final determination subject to review under
C. The landowners have standing to challenge the CAUV journal entry
{¶ 33} The tax commissioner also argues that because he was not required to give notice of the CAUV journal entry to the landowners, they are not included in the group of parties that are permitted to challenge it. But this argument ignores the plain terms of the statute. Under
{¶ 34} We therefore conclude that the BTA erred when it dismissed the landowners’ complaint for lack of jurisdiction under
V. The CAUV journal entry is not a rule
{¶ 35} The landowners also challenge the BTA‘s conclusion that the CAUV journal entry is not a rule that needed to be promulgated pursuant to
{¶ 36} The definition of “rule” set forth by the statute is of only limited help in deciding whether the journal entry here is a rule. “Rule” is circularly defined as “any rule, regulation, or standard, having a general and uniform operation, adopted, promulgated, and enforced by any agency under the authority of the laws governing such agency, and includes any appendix to a rule.”
{¶ 37} In applying this definition, we have drawn a distinction between an administrative action that establishes a policy or standard as opposed to an action that is merely the implementation or interpretation of a rule already in existence.
{¶ 38} For example, in Ohio Nurses Assn., Inc. v. State Bd. of Nursing Edn. & Nurse Registration, 44 Ohio St.3d 73, 540 N.E.2d 1354 (1989), we determined that a position paper adopted by the State Board of Nursing Education and Nurse Registration that permitted licensed practical nurses to administer intravenous fluids constituted a rule that had to be promulgated according to
{¶ 39} Likewise, in Progressive Plastics, Inc. v. Testa, 133 Ohio St.3d 490, 2012-Ohio-4759, 979 N.E.2d 280, we concluded that the tax commissioner‘s decision to value inventory by a different accounting method—first-in-first-out, as opposed to last-in-last-out—was a rule that needed to be adopted according to the requirements of
{¶ 40} In contrast, in State ex rel. Saunders v. Indus. Comm., 101 Ohio St.3d 125, 2004-Ohio-339, 802 N.E.2d 650, we concluded that a memo contained within a worker‘s compensation hearing-officer manual was not a rule. We identified “[t]he pivotal issue” in the determination as whether the memo “enlarges the scope of the rule or statute from which it derives rather than simply interprets it.” Id. at ¶ 27. Because the memo simply interpreted existing statutes and case law, it did not constitute a rule. Id. at ¶ 42.
{¶ 41} The journal entry here establishes no new standard or method. Instead, the CAUVs incorporated by the journal entry result from the application of already promulgated rules—
VI. Conclusion
{¶ 42} Under the plain language of
Decision vacated and cause remanded.
O‘CONNOR, C.J., and O‘DONNELL, KENNEDY, FRENCH, and O‘NEILL, JJ., concur.
FISCHER, J., concurs in judgment only.
Van Kley & Walker, L.L.C., and Jack A. Van Kley, for appellants.
Michael DeWine, Attorney General, and Daniel W. Fausey and Daniel G. Kim, Assistant Attorneys General, for appellee.
Chad A. Endsley, Leah F. Curtis, and Amy M. Milam, urging reversal for amicus curiae, Ohio Farm Bureau Federation.