GLEN OAK INVESTMENT COMPANY, )
v. ) Appeal Number 02-10123
PHILIP A. MUEHLHEAUSLER, )
ACTING ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the change in classification made by the Assessor, SET ASIDE. Hearing Officer finds the assessed value for the subject property for tax year 2002 to be $1,123,260.
Complainants appeared by Counsel, William J. Bruin, Jr., St. Louis, Missouri.
Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.
Case submitted on briefs and decided by Chief Hearing Officer, W. B. Tichenor.
The Commission takes this appeal to determine whether the Assessor of St. Louis County has the authority under Section 137.115, RSMo to change the classification on real property in an even-numbered year, thereby changing the assessed value, in the absence of new construction or property improvements to the affected real property.
Complainant appeals the decision of the St. Louis County Board of Equalization which sustained the action of the Assessor in changing the classification and thereby increasing the assessed value of the subject property.
Evidentiary hearing was waived and the legal issue was submitted on briefs. Counsel for Complainant filed his Brief on January 22, 2003, and his reply brief on April 3, 2003. Counsel for Respondent filed her Brief with the Commission on March 18, 2003.
The Hearing Officer, having considered the arguments and points of law set forth in the Briefs and Reply Briefs enters the following Decision and Order.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2. The subject property is located at 631 S. Berry Road, St. Louis, Missouri. It is identified by locator number 23L120012. It is generally known as Westborough Country Club.
3. No evidence was proffered by Respondent, nor was any claim made by Respondent, that there had been new construction and improvement to the subject property during tax year 2001 upon which a change in assessed valuation would be warranted.
4. There is no dispute as to the fair market value of the subject property, which was determined by the Assessor to be $5,911,900.
5. The assessed value of the subject property for tax year 2001 was $1,123,260. The assessor changed the assessed value to $1,383,100.
CONCLUSIONS OF LAW
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.
Two-Year Assessment Cycle
The Assessor shall annually assess all real property in the following manner: new assessed values shall be determined as of January first of each odd-numbered year and shall be entered in the assessor’s books; those same assessed values shall apply in the following even-numbered year, except for new construction and property improvements which shall be valued as though they had been completed as of January first of the preceding odd-numbered year. Section 137.115.1, RSMo.
Statutes Given Effect As Written
Statutes are to be given effect as written and there is no need for construction of a statute which is clear on its face. The plain language of the statue is to be given effect. State Bd. of Registration for Healing Arts v. Boston, 72 S.W.3d 260 (Mo. App. W.D. 2002); Bright v. Bright, 989 S.W.2d 196 (Mo. App. S.D. 1999); McDermott v. Carnahan, 934 S.W.2d 285 (Mo. 1996).
The answer to the issue presented in this case is answered by the clear and unequivocal language of the controlling statute, Section 137.115.1, RSMo. See, Two-Year Assessment Cycle, supra.
Because the word “shall” is used throughout the statute, the assessor is mandated to use the same assessment in the even-numbered year as was used in the preceding odd-numbered year with the sole exception being where there has been new construction and property improvements. In the present case, the qualify condition of new construction or property improvements does not exist. There was no new construction or property improvements to the subject during the year 2001. The plain language of the statute must be given effect. See, Statutes Given Effect As Written, supra. The compulsory language of the statute mandates the rejection of the assessment made by the Respondent on the subject property for the year 2002.
The Commission has twice held that Section 137.115.1 deprives an Assessor of the ability to increase the assessed value of real property in even-numbered years. In Ostrander v. Zimmerman, STC No. 96-32502, March 13, 1997, the taxpayer moved into his newly constructed house on the day before Thanksgiving, 1995. From December 1, 1995, through December 31, 1995, the property was assessed as an improved parcel at an appraised value of $159,075. For 1996, the Assessor sought to increase the assessed value of the property utilizing a Certificate of Value showing that the taxpayer had actually paid $181,725 for the property. The taxpayer argued that the assessor was bound by the assessed value established for 1995, the odd-numbered year. The Commission agreed, holding that the post-occupancy valuation for 1995 “must be carried forward for the 1996 assessment of the property.”
In Marks v. Raines, STC No. 98-73000, November 25, 1998, the Assessor sought to increase the assessed value of the taxpayers’ residence for 1998 based upon improvements to the property including a concrete driveway, retaining sea wall and boat dock. Taxpayers introduced evidence showing that such improvements had been placed on the property prior to January 1, 1997, and had apparently not been reflected on the assessor’s records for 1997. The Commission found for the taxpayer, holding that there was no new construction or improvements during 1997 which would trigger a new assessed value for 1998 under Section 137.115. The Hearing Officer found against the Assessor “as a matter of law, that since no new construction and improvements had taken place during 1997, he has no legal authority to change the assessment for 1998.”
The underlying principle involved in both Ostrander and Marks are applicable and controlling in the present case. There was no new construction or property improvements on the subject property during 2001. Therefore, under the plain language of the statute, Respondent has no legal authority to change the assessment for 2002.
Respondent’s reliance on Nike IHM, Inc., et al. v. Zimmerman, STC Nos. 00-33023 through 00-33028, February 5, 2002, is unfounded. Nike involved the issue of exemption pursuant to Section 172.273, RSMo 1986 as amended, which was held by the Missouri Supreme Court to be unconstitutional on August 1, 2000. Nike and other tenants had, for a period of years, been deemed exempt pursuant to such statute. The Assessor filed suit challenging the constitutionality of the statute and, on January 1, 2000, the case was pending before the Supreme Court of Missouri. In 2000, the Assessor initially assessed the properties involved, but withdrew the assessments upon direction of legal counsel, thereby continuing to treat the properties in the Research Park as exempt. On August 1, 2000, the Missouri Supreme Court issued its opinion declaring Section 172.273 unconstitutional. The Assessor immediately reacted to such decision and, through the St. Charles County Board of Equalization, assessed the properties at issue for 2000. The tenants appealed to the Commission.
The case was presented to the Commission on stipulated facts. The issue before the Commission was whether the Assessor, and the county Board of Equalization, were authorized to assess the properties under the circumstances involved. In its decision, the Commission never reached the issue of whether the assessments violated the two-year assessment cycle. Rather, the Commission held that it was its duty, pursuant to Section 138.380, to place upon the assessment rolls any property which, during the year involved, may be discovered to have, for any reason, escaped taxation. The Commission held that it was bound by the decision of the Supreme Court of Missouri and that, accordingly, the properties involved were not exempt on January 1, 2000. Therefore, the Commission treated the properties involved as omitted property. (Nike decision is on appeal to the Missouri Court of Appeals, Eastern District).
The present case is not a case of “omitted” property, or, for that matter, property which has escaped taxation for some reason. Rather, it is a case in which Respondent has simply increased the assessed value of the subject property based upon an appellate decision involving different properties in another county. The increase in assessed value by the Respondent did not come about as a result of new construction or improvements. Section 137.115.1, as construed by the prior decisions of this Commission, clearly states that an assessor is bound by the assessed value established in the prior odd-numbered year in the succeeding even-numbered year “except for new construction and property improvements.” Because there is no new construction to the subject, Respondent was not authorized to raise the assessed value of the subject property for 2002 and such assessed value must be returned to the 2001 value.
Respondent’s argument that he did not increase the value of the subject property in the second year of the assessment cycle misses the mark. The mandate of the controlling statute is that the assessed value cannot be increase in the absence of new construction and improvements. There are two ways in which the assessed value can be increase, one of which is to increase the value in true money. The other means of changing the assessed value is by changing the classification. The change in classification in the present case wrongfully breached the statutory line. It increased the assessed value. This is exactly what the plain language of the statute does not authorize.
The language of the St. Louis Court of Appeals (now the Eastern District) in the case of Hannibal ex rel. Bassen v. Bowman, et al., 71 S.W. 1122, 1123, is especially applicable to the present case. The Bowman court, in an assessment case, stated:
“He (the assessor) can only proceed at the time and in the manner pointed out by statute, and, to justify the assessment, he must be able to put his finger on the statute which gives him the authority to make it.”
In the present case, Respondent has not and cannot “put his finger” on a statute giving him authority to change the assessment on the subject property in an even-numbered year. The hand of Complainant rests squarely on the plain language of the controlling statute which bars the change in classification which the Respondent made. The action of the Respondent must be reversed. The subject must be assessed at its 2001 assessed value.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2002 is set at $1,123,260.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED April 22, 2003.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Chief Hearing Officer