HARMON HOLDINGS II, INC., )
v. ) Appeal Number 00-33025
EUGENE ZIMMERMAN, ASSESSOR, )
ST. CHARLES COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Charles County Board of Equalization denying exemption of the subject property for January 1, 2000, is AFFIRMED, Commission renders no decision on value to be placed on subject property for purpose of assessment as of January 1, 2000.
Complainant appeared by Counsels, Mary M. Bonacorsi and Matthew S. Darrough, St. Louis, Missouri.
Respondent appeared by Counsel, Lisa Leslie, Assistant County Counselor, St. Charles, Missouri.
Case decided by Commission
The Commission takes this appeal to determine the issue of whether the subject property is exempt from taxation for tax year 2000. The Commission does not reach the issue of true value in money but retains jurisdiction on that issue, pending judicial review of this decision.
Complainant appeal the decision of the St. Charles County Board of Equalization which increased the valuation of the subject property from 1999 to 2000. Counsel for Complainant set out in their Brief Uncontested Facts. (Complainant’s Brief, pp. 1-5). Counsel for Respondent did not file a stipulation to the Uncontested Facts, nor objected to any of them. Complainant filed a Brief and Reply Brief. Respondent file a Brief in Nike et al v. Zimmerman, STC Appeals 00-33002, et al, that Brief is considered as Respondent’s Brief for this appeal. Complainant’s Reply Brief was received by the Commission on November 5, 2001.
The issue of the true value in money of the subject property as of January 1, 2000, as non-exempt property, is not addressed in this decision.
The Commission, after consideration of the Uncontested Facts set forth by Counsel for Complainant and all the arguments advanced by the briefs of the parties, enters the following Decision and Order.
FINDINGS OF FACT
Uncontested and Stipulated Findings of Fact
Uncontested Facts submitted by Counsel for Complainant, in their Brief and not objected to by Counsel for Respondent, adopted by the Commission as Findings of Facts for this appeal furthermore, facts stipulated to by Respondent in the Nike appeal, to the extent applicable to this appeal, are also adopted by the Commission as Findings of Facts. The Commission sets forth the Uncontested and Stipulated Facts as follows:
1. Complainant is the lessee of a certain lot of real property (Subject Property) located in St. Charles County that is the subject of the appeal. The address and parcel identification number for the Subject Property is 3 Missouri Research Park Boulevard; Parcel ID #3-160-1769-00-Boll.3.
2. At all times relevant to these appeals, the owner of the fee simple interest in the Subject Properties has been the University of Missouri.
3. Complainant constructed certain improvements on the Subject Property.
4. The Subject Property is part of a research park known as the Missouri Research Park.
5. The Missouri Research Park was created pursuant to R.S.Mo. Sec. 172.273 (1986), which provides, in part, that utilization of the Subject Properties is deemed to be a public purpose and in furtherance of the purposes of the University. Property owned by the University of Missouri is exempt from taxation pursuant to, inter alia, Mo. Const., Art. X, Sec. 6 and R.S.Mo. Sec. 137.100. Pursuant to R.S.Mo. Sec. 172.273.3, no leasehold or other interest in the Subject Property, by whomever held, may be separately assessed or taxed, and such real property as a whole was deemed to be the property of the University and exempt from all forms of property tax.
6. R.S.Mo. Sec. 172.273 was amended in 1988 and again in 1996. These amendments are not relevant to this appeal.
7. In 1996, the St. Charles County Board of Equalization (the BOE) brought an action questioning the constitutionality of R.S.Mo. Sec. 172.273.3. In Missouri Bluffs Golf Joint Venture v. St. Charles Board of Equalization, 943 S.W.2d 752 (Mo. Ct. App. 1997), the Court of Appeals held that the BOE lacked authority to consider the constitutionality of the statute, and further, stated that Section 172.273.3 is unambiguous and clearly provides an exemption.
8. Notwithstanding the existence of R.S.Mo. Sec. 172.273.3 and the 1997 decision in Missouri Bluffs, Respondent has assessed the Subject Property in various years since 1994. In all years in which Respondent has assessed the Subject Property, Complainant has appealed to the Board of Equalization for St. Charles County (the BOE) and, when necessary, to this Commission. In each case, the property was determined to be tax-exempt and not subject to assessment, resulting in an assessed value of $0.00.
9. On August 13, 1996, Respondent and St. Charles County filed a Petition in the Circuit Court of St. Charles County in the matter styled St. Charles County, Missouri, et al. v. Curators of the University of Missouri, et al., Cause No. CV196-5177. Plaintiffs sought a declaration the R.S.Mo. Sec. 172.273.3 violates, inter alia, Mo. Const., Art. X, Sec. 6. Certain of the Complainants, as tenants of Missouri Research
10. The parties filed cross motions for summary judgment. By Order and Judgment dated September 7, 1999, the Circuit Court found in defendant’s favor, holding that R.S.Mo. Sec. 172.273.3 is constitutional and does not unconstitutionally exempt from real estate taxation the leasehold interests of Defendants in Missouri Research Park. Respondent was ordered to strike [the tenants’]leaseholds from the tax rolls and refrain from assessing such interests.
11. On September 24, 1999, Respondent and St. Charles County appealed the Circuit Court’s decision to the Missouri Supreme Court.
12. As of January 1, 1999, and January 1, 2000, the assessed value of the Subject Property was $0.00.
13. By notice dated March 31, 2000, Complainant was informed by Respondent that the Subject Property was being assessed for the year 2000. The assessed value was $1,162,000.
14. The assessed value of the Subject Property was included in the assessment rolls as a result of the decision of Respondent.
15. Generally, all parcels of land within St. Charles County are placed upon the tax rolls each year. All parcels of land are retained within the database of property records. Pursuant to a review conducted by the Special Assessment Division, certain properties are determined to be exempt and the assessed value of such properties is removed from the tax rolls each year. There is no separate tax roll for exempt property. Rather, where appropriate, certain properties are identified with codes denoting exemption and then the assessed values of such properties are removed automatically. This coding causes the property value to be disregarded with respect to transferring value to the tax rolls. The property itself is not deleted from the records. In the case of the Subject Property, no code had been entered denoting automatic exemption. The property and its value was included in Respondent’s certified rolls in previous years and, because it was not coded with an automatic exemption code, its value was also included in the year 2000 tax rolls. The Subject Property itself was never deleted from the assessor’s records.
16. Subsequently, by notice dated May 18, 2000, the assessed value of the Subject Property was reduced to $0.00. Legal counsel for St. Charles County advised Respondent that the Subject Property could not be assessed for the current tax year pursuant to the order entered by the Circuit Court of St. Charles County in Cause No. CV196-5177CC. At the direction of Respondent, the assessed value of the Subject Property was removed from the tax rolls subsequent to taxpayer notification and prior to the May 15, 2000, certification date.
17. On August 1, 2000, the Missouri Supreme Court issued its opinion in St. Charles County et al. v. Curators of the University of Missouri, et al., Case No. SC82038, holding that R.S.Mo. Sec. 172.273.3 violates Mo. Const., Art. X, Sec. 6.
18. Following the ruling by the Missouri Supreme Court, Respondent requested the BOE to add the assessed value of the Subject Property back onto the 2000 property tax record and to notify the owner and/or lessee. By notice dated August 29, 2000, the St. Charles Board of Equalization increased the assessed valuation of the Subject Property from $0.00 to $1,267,230. At the direction of Respondent, the leasehold interest in the land was added to the leasehold interest in the buildings, thus increasing the assessed value from the amount stated in the previously mailed notice of chance. This information was presented to the BOE on an Excel spreadsheet at the same time that the BOE was petitioned to add the Subject Properties to the tax rolls.
19. Section 120.210 of the Charter of St. Charles County provides, in relevant part, as follows:
The County Board of Equalization shall meet at least once a month for the purpose of hearing allegations of erroneous assessments, double assessments and clerical errors. Between the first (1st) Monday in June of each year and the last Saturday of July of that year, the Board shall meet in regular session and as often as necessary to timely hear and consider any appeal or complaint resulting from an evaluation made during a general assessment of all taxable real property and possessory interests in St. Charles County. Such hearings must be concluded on the last Saturday in July of each year; provided, that the estimated true value of personal property as shown on any itemized personal property return shall not be conclusive on the Assessor or prevent the Assessor from increasing such valuation.
20. Section 120.220.2 of the Charter of St. Charles County provides, in relevant part, as follows:
Assess omitted property. The Board shall assess and equalize the value of any property that may have been omitted from the Assessor’s books and records then under examination by them and adjust and correct the books and records accordingly;
a. If the Board shall add any property to the Assessor’s books and records or increase the assessment, the Board shall cause notice in writing to be served upon the person owning or controlling the property affected, his agent or representative, by personal notice, by mail, or if the address of the person, agent, or representative is unknown, then by publication in one(1) issue of at least two (2) daily newspapers published within the County. The notice shall state the kind and class of property and the value fixed thereon and name the time and place, not less than five (5) days thereafter, when and where such owner may appear before the Board and show cause why said assessment should not be made;
b. At the time fixed, the Board shall again meet and give opportunity to the taxpayer to be heard in regard to his assessment, and may change or alter the same upon being shown by the owner that the assessment was erroneous or improperly made; otherwise, the property and the valuation, as fixed by the Board, shall be extended upon the Assessor’s books and records, as in the case of other property.
21. No new construction or improvements was added to the Subject Property during the years 1999 or 2000.
22. Complainant timely appealed the August 29, 2000, notice of increase in the assessed value to the BOE.
23. By notice dated November 2, 2000, the BOE denied Complainant’s appeal.
24. Complainant timely appealed such denial to the Commission.
Special Findings of Fact
25. Complainant asserted the following issues: Complaint for Review of Assessment; Complainant’s Brief, p. 6.
A. Complainant asserted as a ground for appeal in its Complaint for Review of Assessment the ground of overvaluation. The Commission does not reach that issue in this decision, as the evidentiary hearing to consider said issue will not be scheduled until judicial review of this decision and order.
B. Whether the Board of Equalization had authority to change (increase) an assessment of Complainant’s leasehold interest in the Missouri Research Park on August 29, 2000, where no new construction and improvement had been added to the subject tract of land because RSMo 137.115 only authorizes the assessment of real property, including improvements, during odd numbered years;
C. Whether the Board of Equalization had authority to place the August 29, 2000, assessment on Complainant’s leasehold interests in the Missouri Research Park in that Complainant’s leasehold interests in the Missouri Research Park were not subject to taxation on January 1, 1999, or January 1, 2000;
D. Whether the Board of Equalization had authority to change (increase) an assessment of Complainant’s leasehold interests in the Missouri Research Park on August 29, 2000 because even assuming, arguendo, that Complainant’s leasehold interests were omitted property, the Board is only authorized to assess such real property, including improvements, during its regular session; and
26. Counsel for Respondent asserted the following issues: Respondent’s Brief, p. 4.
A. Is the property at issue in this case omitted property?
B. Can property that was previously assigned a $0 value be added to the tax rolls on August 29, 2000?
C. Can property that was treated as tax exempt because of a statute which was later declared unconstitutional be assessed taxes for the entire tax year in which the previously relied-on statute was declared unconstitutional?
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, 138.460(2) RSMo. It is the duty of the Commission to cause to be placed upon the assessment rolls at any time during the year property which may be discovered to have, for any reason, escaped taxation. Section 138.380 RSMo. All statutory references are to the Revised Statutes of Missouri 1986, as amended, unless otherwise noted.
The only issue which the Commission must reach in order to render its decision is the matter of the exemption granted the subject property under Section 172.273.3. On August 1, 2000, the Supreme Court of Missouri found that Section 172.273.3 violated Article X, Section 6 of the Missouri Constitution. Accordingly, the subject property was not exempt, but was subject to ad valorem taxation. It is the responsibility of the Commission when hearing appeals to insure that property is lawfully assessed. The Commission is bound by the determination of the Supreme Court. The subject property must be placed on the assessment roll for tax year 2000 as taxable property as was done by the Board of Equalization.
The issue of the true value in money of the subject property, as of January 2000, is not reached in this decision. Once judicial review is had, or the time for same as expired without Complainant seeking judicial review, then it will be necessary for the Commission to hear evidence on the issue of the fair market value of the subject property as of January 1, 1999, in order to make a valuation of the properties under Section 137.115 for tax year 2000.
The decision of the Missouri Supreme Court in the St. Charles County et al. v. Curators of the University of Missouri, et al., case is controlling. The statute which granted the subject property exempt status was not constitutional, accordingly, the property was not exempt on January 1, 2000.
This decision is a final decision as to the legal issue addressed herein for purposes of seeking judicial review. Accordingly, the Commission retains jurisdiction for the purpose of determining true value in money, pending Complainant’s seeking judicial review.
The determination by the Board of Equalization for St. Charles County for the subject tax day (January 1, 2000) that the subject property is not exempt is AFFIRMED.
Judicial review of this Decision may be had in the manner provided in Sections 138.470 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Decision.
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 February 5, 2002.
STATE TAX COMMISSION OF MISSOURI
Sam D. Leake, Chairman
Bruce E. Davis, Commissioner
Jennifer Tidwell, Commissioner