Case Title: Adams v. Testa

Citation: 2017-Ohio-8854

Docket Number: 2016-0510

State: ohio

Court: Ohio Supreme Court

Date: 2017-12-07T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Adams v. Testa, Slip Opinion No. 2017-Ohio-8854.] 
 
 
 
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-8854 
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-8854.] 
Taxation—Real-property valuation—R.C. 5703.14—Board of Tax Appeals had 
jurisdiction over landowners’ challenge to journal entries incorporating 
current agricultural-use values and to the rules providing for entries’ 
issuance—Board of Tax Appeals did not err in concluding that landowners 
failed to assert any grounds for concluding that challenged rules are 
unreasonable—Decision affirmed. 
(No. 2016-0510—Submitted June 6, 2017—Decided December 7, 2017.) 
APPEAL from the Board of Tax Appeals, No. 2015-2244. 
_________________ 
DEWINE, J. 
{¶ 1} This is a companion case to Adams v. Testa, __ Ohio St.3d ___, 2017-
Ohio-8853, __ N.E.3d ___ (“Adams I”), also decided today.  At issue in both cases 
are the journal entries that set forth current agricultural-use values (“CAUVs”), 
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which county auditors use to value farmland for tax purposes.  Here, we consider 
an appeal under R.C. 5703.14, which authorizes an injured party to challenge a rule 
issued by the tax commissioner on the basis that it is unreasonable.  A group of 
landowners appealed to the Board of Tax Appeals (“BTA”), claiming that their 
farmland is being overvalued because the CAUV journal entries and the rules 
providing for the entries’ issuance are unreasonable. 
{¶ 2} The BTA determined that it did not have jurisdiction over the appeal 
and dismissed it.  We disagree with the BTA regarding its jurisdiction.  But because 
the landowners did not make any showing that the rules are unreasonable, it was 
still proper for the BTA to dismiss their appeal.  We affirm the BTA’s decision. 
I.  Background 
{¶ 3} In Adams I, we explained CAUVs in some detail; we provide a brief 
overview here.  R.C. 5715.01(A) requires that the tax commissioner determine 
CAUVs, which are used by county auditors to establish the taxable value of 
agricultural property.  Ohio Adm.Code 5703-25-30 through 5703-25-36 set forth 
the rules for determining CAUVs.  Once a year, the tax commissioner adopts a 
journal entry that incorporates a table of CAUVs.  Ohio Adm.Code 5703-25-31(D).  
Included in the CAUVs are the values of woodland that is adjacent to or part of 
farmland.  The woodland value is determined by subtracting a clearing cost from 
the cropland value.  Ohio Adm.Code 5703-25-33(M)(4).  It is the woodland-
clearing cost that is at the heart of both this appeal and Adams I. 
{¶ 4} In 2013 and 2014, the tax commissioner released CAUV tables that 
used a clearing cost of $500 per acre.  In 2015, that amount was increased to $1,000 
per acre.  In the journal entry adopted in 2015, the tax commissioner ordered that 
the 2015 values were to be used by the 24 counties in which the county auditor was 
required to perform a sexennial reappraisal or triennial update for 2015.  The other 
64 counties were instructed to continue using the values established in 2013 and 
2014, which had used the clearing cost of $500 per acre. 
January Term, 2017 
 
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II.  The proceedings below 
{¶ 5} The landowners challenged the tax commissioner’s 2015 CAUV 
journal entry in two appeals before the BTA.  In the first appeal, which is the subject 
of Adams I, they argued that the woodland had been overvalued because the 
commissioner had ignored evidence demonstrating that the woodland-clearing 
costs used in 2013, 2014, and 2015 were too low.  In that proceeding, the 
landowners sought to appeal directly from the tax commissioner’s 2015 journal 
entry under R.C. 5717.02.  They also pursued two rule-based challenges: that the 
rules for establishing the CAUVs are unreasonable under R.C. 5703.14 and that the 
journal entry constitutes a rule that had been issued in violation of the rulemaking 
requirements of R.C. Chapter 119.  The landowners later dropped their R.C. 
5703.14 rule-review claims in Adams I because they were pursuing those claims in 
this separate appeal.  The BTA ultimately dismissed the first appeal, concluding 
that the journal entry is not a “final determination” under R.C. 5717.02 and that the 
BTA therefore did not have jurisdiction to hear an appeal of the entry.  The BTA 
also determined that the entry is not a rule so the requirements of R.C. Chapter 119 
did not apply.  In Adams I, we reversed the BTA’s decision in part; we held that the 
CAUV journal entry is a final determination under R.C. 5717.02 but that it is not a 
rule. 
{¶ 6} In their second appeal to the BTA, the landowners sought review of 
Ohio Adm.Code 5703-25-06 and 5703-25-30 through 5703-25-36 and of the 2013, 
2014, and 2015 CAUV journal entries.  They also again raised their argument that 
the CAUV journal entries are rules subject to the rulemaking requirements of R.C. 
Chapter 119.  The BTA dismissed the appeal, explaining that the landowners had 
not stated how the administrative rules are unreasonable.  The BTA also reiterated 
its conclusion that the CAUV journal entries are not rules.  It is this second appeal 
that is before us now. 
 
 
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III.  The BTA had jurisdiction 
{¶ 7} In dismissing the landowners’ rule-review appeal, the BTA stated that 
it did not have jurisdiction over the appeal.  Clearly, this was incorrect.  R.C. 
5703.02(A)(5) gives the BTA jurisdiction over appeals from the “[a]doption and 
promulgation of rules of the tax commissioner.”  R.C. 5703.14 plainly provides that 
“[a]pplications for review of any rule adopted and promulgated by the tax 
commissioner may be filed with the board of tax appeals by any person who has 
been or may be injured by the operation of the rule.”  Under the statute, the burden 
was on the landowners to “show that the rule is unreasonable.”  Id. 
{¶ 8} Despite its statement that it lacked jurisdiction over the landowners’ 
rule-review appeal, the BTA’s decision makes clear that it did consider whether the 
landowners had met their burden to show that the challenged rules are 
unreasonable.  In its decision, the BTA noted that “it is incumbent upon [the 
landowners], through the rule review challenge, to allege how the procedures for 
the Commissioner’s determination of CAUV values, as set forth in the rules, are 
unreasonable.”  BTA No. 2015-2244, 2016 Ohio Tax LEXIS 642, *6 (Mar. 31, 
2016).  The BTA concluded that the landowners had not met their burden because 
they had not addressed the reasonableness of the rules.  We review this conclusion 
to determine whether it is “reasonable and lawful.”  R.C. 5717.04. 
A.  The journal entries setting CAUVs are not rules 
{¶ 9} We can quickly dispose of part of the landowners’ claims.  The 
landowners argue, as they did in Adams I, that the CAUV journal entries are rules 
subject to the rulemaking requirements of R.C. Chapter 119.  The landowners 
further contend that Ohio Adm.Code 5703-25-30 through 5703-25-36 are 
unreasonable because they allow the tax commissioner to issue the entries without 
first complying with R.C. Chapter 119.  As we concluded in Adams I, the journal 
entries are not rules.  The BTA correctly dismissed this part of their appeal. 
 
 
January Term, 2017 
 
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B.  The landowners did not meet their burden 
{¶ 10} We consider the landowners’ remaining challenges to Ohio Adm. 
Code 5703-25-06 and 5703-25-30 through 5703-25-36.  Under R.C. 5703.14, the 
landowners were required to “allege that the rule[s] complained of [are] 
unreasonable and [to] state the grounds upon which the allegation is based.”  The 
problem is that they did not provide any grounds for concluding that the challenged 
rules are unreasonable. 
{¶ 11} The focus of the landowners’ appeal before the BTA was that the 
woodland-clearing costs used in the CAUVs are too low and that there is a lack of 
uniformity between the newly issued 2015 values and the 2013 and 2014 values 
still being used by 64 counties.  They pointed to Ohio Adm.Code 5703-25-33(B), 
which provides that “[t]he use of the income approach to develop annual ‘Current 
Agricultural Use Value of Land Table Or Tables’ that are accurate, reliable and 
practical requires that careful attention be given to the many principles and 
techniques involved.”  Among those techniques is obtaining information “from 
such agencies as cooperative extension service, college of agriculture, the Ohio 
[S]tate [U]niversity; Ohio agricultural research and development center; national 
resources conservation services, U.S.D.A.; forest service, U.S.D.A.; national 
agricultural statistical service, U.S.D.A.; department of agriculture of Ohio; 
department of natural resources of Ohio, federal land bank and other reliable 
sources.”  Ohio Adm.Code 5703-25-33(D).  As the landowners see it, Ohio 
Adm.Code 5703-25-30 through 5703-25-36 are unreasonable because the tax 
commissioner either failed to obtain necessary information about woodland-
clearing costs or ignored evidence of the higher clearing costs.  But their allegation 
does not provide a ground for finding the rules themselves unreasonable; at best, it 
suggests that the commissioner failed to follow the applicable rules. 
{¶ 12} The landowners’ claim regarding Ohio Adm.Code 5703-25-06 is 
equally groundless.  That rule requires that consistent with R.C. 5713.01, county 
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auditors perform sexennial reappraisals and triennial updates of the value of real 
property.  The landowners argued in their appeal before the BTA that to the extent 
that the tax commissioner asserts that Ohio Adm.Code 5703-25-06 prohibits him 
from changing the 2013 and 2014 CAUVs, the rule is unconstitutional.  But the tax 
commissioner has made no such assertion, and nothing in the rule required the tax 
commissioner to maintain the 2013 and 2014 values for those counties already 
using them.  Again, the landowners are not actually challenging the reasonableness 
of the rules.  Instead, they are speculating about the commissioner’s reasons for 
applying the rules as he did. 
{¶ 13} The landowners’ appeal boils down to a challenge to the tax 
commissioner’s application of the rules, rather than a challenge to the 
reasonableness of the rules themselves.  Their quarrel is with the CAUVs, not the 
rules.  Their rule-review challenge is without merit, but as we held in Adams I, they 
may challenge the CAUVs through an appeal under R.C. 5717.02. 
IV.  Conclusion 
{¶ 14} Although the BTA was incorrect when it determined that it did not 
have jurisdiction over the landowners’ rule-review appeal, it correctly concluded 
that the landowners had failed to put forth any grounds for concluding that the rules 
they challenged are unreasonable.  We therefore affirm the decision of the BTA. 
Decision affirmed. 
O’CONNOR, C.J., and KENNEDY, FRENCH, and O’NEILL, JJ., concur. 
O’DONNELL, J., dissents, with an opinion joined by FISCHER, J. 
_________________ 
O’DONNELL, J., dissenting. 
{¶ 15} Respectfully, I dissent. 
{¶ 16} I would reverse the decision of the Board of Tax Appeals.  In my 
view, the landowners did evidence that the CAUV journal entries are unreasonable 
because the tax commissioner failed to follow the rules in promulgating them, and 
January Term, 2017 
 
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the majority acknowledges that the landowners’ allegation “suggests that the 
commissioner failed to follow the applicable rules,” majority opinion at ¶ 11. 
FISCHER, J., concurs in the foregoing opinion. 
_________________ 
 
Van Kley & Walker, L.L.C., and Jack A. Van Kley, for appellants. 
 
Michael DeWine, Attorney General, and Daniel W. Fausey, Daniel G. Kim, 
and Kody R. Teaford, Assistant Attorneys General, for appellee. 
Chad A. Endsley, Leah F. Curtis, and Amy M. Milam, urging reversal for 
amicus curiae, Ohio Farm Bureau Federation. 
_________________