COLORADO ARLBERG CLUB, Petitioner-Appellant, v. BOARD OF ASSESSMENT APPEALS of the State of Colorado, Property Tax Administrator of the State of Colorado, and Grand County Board of Equalization, Respondents-Appellees.
No. 84CA1184.
Colorado Court of Appeals, Div. I.
March 13, 1986.
Rehearing Denied April 24, 1986.
719 P.2d 371
As Modified on Denial of Rehearing March 27, 1986. Certiorari Granted (Board) July 14, 1986.
Salt River‘s final argument is that the trial court erred in ruling that the assessment did not violate the Commerce Clause of the United States Constitution. We disagree.
The Commerce Clause of the United States Constitution does not relieve those engaged in interstate commerce from their just share of the state tax burden. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823 (1938). A state may tax interstate commerce if the tax: (1) has a substantial nexus with the state; (2) is fairly apportioned; (3) does not discriminate against interstate commerce; and (4) is fairly related to the services provided by the state. Maryland v. Louisiana, 451 U.S. 725, 101 S.Ct. 2114, 68 L.Ed.2d 576 (1981).
We disagree with Salt River‘s claim that the third requirement was not met in this case. So long as the assessment does not favor local interests, and is computed uniformly, then there is no differential tax treatment of interstate and intrastate commerce. See Commonwealth Edison Co. v. Montana, 453 U.S. 609, 101 S.Ct. 2946, 69 L.Ed.2d 884 (1981).
Here, the method of assessment was the same for all public utilities in Salt River‘s class, and intrastate companies were not favored. The fact that Salt River‘s co-owner may have paid less tax because its revenues were smaller does not justify a charge of discrimination by a non-regulated foreign utility. Salt River‘s property was valued in relation to the income which it generated, and intrastate public utilities were valued in the same manner. We therefore conclude that the assessment did not violate the Commerce Clause of the United States Constitution. See Commonwealth Edison Co. v. Montana, supra.
Judgment affirmed.
SMITH and STERNBERG, JJ., concur.
Sherman & Howard, Karen M. Zulauf, Raymond J. Turner, Denver, for petitioner-appellant.
Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Larry A. Williams, Asst. Atty. Gen., Denver, for respondents-appellees Board of Assessment Appeals and Property Tax Administrator.
Anthony J. DiCola, Grand Co. Atty., Hot Sulphur Springs, for respondent-appellee Grand County Bd. of Equalization.
Petitioner, the Colorado Arlberg Club, appeals the tax assessment placed upon its land as adjusted by the Grand County assessor and the Board of Equalization (the Board), and as affirmed by the Colorado Board of Assessment Appeals and the district court. We reverse and remand with instructions for a reassessment.
In 1982, the Arlberg Club‘s land was assessed $95,630 for its 125-acre property. In 1983, the Club was assessed $533,770 for the same property. That assessment was based on 29% of an actual value established to be $1,840,585 for the Club‘s property. The Club, a non-profit corporation, maintains club facilities on approximately 18 of the acres, leases 28 of the acres to the Winter Park Recreation Association, and retains the remainder in its natural, wooded, mountainous condition. The assessment with respect to the leased 28 acres is not disputed.
The Arlberg property is contained within a “final P.U.D. plan” which was approved by resolution in 1980, and is treated as a
I.
The Arlberg Club argues that the Board‘s assessment as to the two parcels in question is not supported by substantial evidence, and it further argues that in determining actual value the Board failed to consider the restrictive zoning in that it failed to find that the land designated as open space is not developable under the P.U.D. We agree.
The taxation statute provides that the “actual value” shall be determined by “appropriate consideration of the cost approach, the market approach, and the income approach to appraisal.”
Respondents cite to State Department of Highways v. Ogden, 638 P.2d 832 (Colo. App.1981), which relies in turn on Stark v. Poudre School District R1-1, 192 Colo. 396, 560 P.2d 77 (1977). Both of these cases are condemnation cases concerned with the taking of a property pursuant to the power of eminent domain. In sui generis condemnation proceedings equity entitles the owner to have considered the most advantageous future use to which the land may be reasonably applied. Stark v. Poudre School District R1-1, supra; Wassenich v. Denver, 67 Colo. 456, 186 P. 533 (1919). However, the tax assessor does not suffer a taking of property, and therefore, equity does not afford him the same entitlements as it does an owner of condemned property.
The valuation placed upon a property in a condemnation proceeding represents the highest and best compensation that an owner would receive upon sale of the property. Such is not the situation with valuation of a property for taxation purposes. The tax assessor can periodically reassess the tax on a property, based on changes in the property‘s use, on new improvements, or on changes in present market value. Therefore, equity dictates that the principles of the law of eminent domain not be transferred to tax assessment situations. Accordingly, an owner may be taxed based only upon the present use of his property, and the resultant present market value, without consideration of future uses.
Here, the Board relied upon testimony which stated that the Arlberg Club property was “two-thirds developable,” that the property “could” support a significant number of condominium units, and that the P.U.D. plan “could probably” be amended to allow additional development on the land. These considerations not only reflect improper attention to future uses of the property, but are also highly speculative and are not supported by substantial evidence in the record.
The P.U.D. plan designated for development only the 18 acres on which the clubhouse facilities are located. It further designated a density of 1.7 units per acre for those 18 acres, which amounts to only 31 units that can be built on the land in question. The remaining acreage, according to the final P.U.D. plan, was to be retained as open space. The evidence showed that during the tax year of 1983, the designated open space was used as open space. Thus, the Board improperly relied on appraisals which valued the property on bases of greater development than is possible under the governing P.U.D. plan and on bases of possible amendments to the P.U.D. It
Respondents also argue that because the open space within the Arlberg property is not dedicated for public use, it is not restricted. Such an interpretation of open space is not supported by either the commonly understood meaning of the term, nor by the P.U.D. plan. According to the plan, development in the open space included within the Arlberg property is “limited to trails and utility lines.”
Respondents’ arguments also imply that the Arlberg Club agreed that its open space would be taxed as non-open space. The resolution to which they point, however, establishes only that the Arlberg property shall be “subject to taxation.” Thus, the open space must be taxed, but on the basis of its character as open space.
II.
The Arlberg Club next objects to the Board‘s classification of the 18 acres as commercial, rather than residential, thus applying a 29% tax rate rather than 21%. We find no error in this classification.
The commercial classification includes “hotels and motels” which are defined as “establishments ... primarily engaged in providing lodging, camping, or personal care ... and which are predominantly used on an overnight or weekly basis.”
III.
Because we are remanding for reassessment based on the record, we address the Arlberg Club‘s contention of error that the Board improperly refused to accept one of its witnesses as an expert witness. We conclude that the witness should have been accepted as an expert.
Because the Board is governed by the rules of evidence, it has wide discretion in determining whether the requirements of CRE 702 are met.
A witness may properly be qualified as an expert witness by virtue of any one or more of the five factors specified in CRE 702: “special knowledge, skill, experience, training, or education.” (emphasis added) Here, the witness in question was a part-owner of an appraisal business with seven years of experience which included appraisals in Grand County. Based on these qualifications, the Arlberg Club properly sought to qualify this witness as an expert in the appraisal business.
The witness’ qualifications were not refuted except to the extent that he was asked if he was “an M.I.A. appraiser,” to which he replied that he was “working toward the designation.” Thereupon, one of the Board‘s members stated: “He is not M.I.A. and so I would say that he is not qualified as an expert witness.” Accordingly, the chairman of the Board ruled that: “The witness will not be accepted ... as an expert witness; however, we certainly will accept his testimony.”
Although the Board properly allowed the witness to give his opinion as to the value of the Arlberg property, see Denver v. Hinsey, 177 Colo. 178, 493 P.2d 348 (1972), it improperly refused to accept him as an expert witness. CRE 702 does not require specific degrees, certificates of training, certain designations, or membership in a professional organization. See White v. People, 175 Colo. 119, 486 P.2d 4 (1971). Therefore, here, the witness’ lack of an “M.I.A.” designation should not have precluded his qualifying as an expert witness. Based on the witness’ unrefuted experience as well as apparent skill and special knowledge, the Board erred in not accepting him
The judgment is reversed and the cause is remanded with directions to remand the matter to the Board of Assessment Appeals for it to reassess the Arlberg property based on the existing record and in compliance with the rulings set forth herein.
BERMAN, J., concurs.
TURSI, J., dissents.
TURSI, Judge, dissenting.
I respectfully dissent.
In the first instance, I would hold that it was improper to assess the subject property at the commercial rate rather than the residential rate.
The Colorado Arlberg Club (club) is a nonprofit Colorado corporation dedicated to the furtherance of the sport of skiing. The land and the facilities involved in this dispute are operated solely for the recreational use of its members, and no use by the general public is permitted. The user fees assessed by the club are not to generate profit by the use of this facility but rather to recoup the cost of providing its use to the members.
Implicit in a holding that a facility is a commercial hotel or a motel is the right to use the facilities by any person in the general public. See
Here, utilization of the facilities of the club house is akin to the use of and interest in private residential vacation homes at a resort area.
Certainly the joint ownership of the facilities by the members of the nonprofit corporation and the use made by them of their facility is less commercial than the timeshare condominiums or investment condominiums in resort areas which are taxed as residential rather than commercial property. See
However, I would adopt the respondents’ contention that, in arriving at actual value pursuant to
I would, therefore, reverse the judgment of the district court and remand the cause to it with directions to set aside the order of the Board of Assessment Appeals and to remand to the Board to conduct another hearing consistent with the views expressed in this dissent.