Case Title: Burton v. Town of Salisbury

Citation: 173 Vt. 177, 790 A.2d 394

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2001-12-21T00:00:00Z

Document:
Burton v. Town of Salisbury  (99-559); 173 Vt. 177; 790 A.2d 394

[21-Dec-2001]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of  Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.

                        Nos. 99-559, 99-560, & 99-561

Robert Burton	                              Supreme Court

  v.                                          On Appeal from
                                              Property Valuation and Review
Town of Salisbury                             Division

                                              January Term, 2001
George McDonough

     v.

Town of Salisbury

 
David Sidoti

     v.

Town of Salisbury

Rexford E. Roberts, State Appraiser

John F. Evers and Kevin E. Brown of Langrock Sperry & Wool, LLP,
  Middlebury, for  Plaintiffs-Appellants.

Donald R. Powers of Powers, English, Carroll & Ritter, Ltd.,
  Middlebury, for Defendant-Appellee.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       JOHNSON, J.   Taxpayers appeal a decision by the state appraiser
  ruling that he did not  have authority to rule on the constitutionality of
  an amendment to 32 V.S.A. § 4404(c), and that  taxpayers are not entitled
  to a refund of property taxes paid in the years 1992-1996.  The amendment 

 

  imposed a retroactive change in § 4404(c) that voided a previous order of
  this Court.  We reverse  because the legislature's enactment violates the
  separation of powers mandated by the Vermont  Constitution. 

       This case arose from a town-wide reappraisal of the Town of Salisbury
  that took effect in the  1991 tax year.  Taxpayers Robert Burton, George
  McDonough, David Sidoti and forty other property  owners located on Lake
  Dunmore, in Salisbury, Vermont appealed the listed value of their property 
  to the Board of Civil Authority (BCA) pursuant to 32 V.S.A. § 4404.  When
  the BCA failed to  comply with the procedures of § 4404(c), taxpayers took
  their appeal to the State Board of  Appraisers (Board). (FN1)  In 1994, the
  board found that the BCA did not comply with the time  requirements of §
  4404(c), which outlines specific deadlines for various stages of the
  appeal.  It also  found that because taxpayers did not waive compliance
  with § 4404(c), they were entitled to the  rollback penalty.  32 V.S.A. §
  4404(c) provided:

       If the board does not substantially comply with the
       requirements of  this subsection and if the appeal is not
       withdrawn . . . , the grand list  of the appellant for the
       year for which appeal is being made shall  remain at the
       amount set before the appealed change was made by the 
       listers; except, if there has been a complete reappraisal,
       the grand list  of the appellant shall be set at a value
       which will produce a tax  liability equal to the tax
       liability for the preceding year.

  Id. (emphasis added).  Because taxpayers had not waived compliance with §
  4404(c), the board  applied the rollback penalty applicable under the
  exception for complete reappraisals to the 1991 tax  year and did not
  proceed with a determination of the merits of taxpayers' appeal. 
 
 

       Taxpayers appealed the board's 1994 decision to this Court.  In that
  appeal, taxpayers  claimed that they had a right to elect between the
  rollback penalty in § 4404(c) and an appeal on the  merits of the BCA's
  valuation to the board.  Principally, taxpayers argued that an appeal on
  the merits  might afford them a three year remedy under 32 V.S.A. § 4468. 
  That section provides that a  determination by the board of the value of
  the property, "shall become the basis for the grand list of  the taxpayer
  for the year in which the appeal is taken and, if the appraisal relates to
  real property, for  the two next ensuing years."  Id. 

       The appeal of the 1991 appraisals was heard by a panel of three
  justices in January 1996, and  a final decision was issued by the panel in
  March 1996. (FN2)  The panel concluded that it need not  reach taxpayers'
  contention about the election of remedies.  Rather, the Court distinguished
  between  two types of penalties within § 4404(c).  The first, not
  applicable in this case, provides for a one-year  rollback in most
  appraisal appeals.  See 32 V.S.A. § 4404(c).  The second, applicable here,
  provides  for a rollback when there has been a complete reappraisal but
  does limit its duration to one year.  See  id.  The Court interpreted this
  latter provision of § 4404(c) to mean that there is no time limit for the 
  rollback penalty.  The panel held that "[i]n this case there was a
  complete, or town-wide, reappraisal;  consequently, the exception in §
  4404(c) applies, and there is no time limit to the rollback penalty.  
  Accordingly, the Town must act to alter the 1990 tax liability imposed
  under § 4404(c)."

       Shortly after the March 1996 decision was issued, a bill was
  introduced in the Vermont  House of Representatives entitled "An Act
  Relating to Miscellaneous Tax Changes."  Amid the  voluminous and random
  changes to various parts of the tax code, section 12 sought to amend 32 
  V.S.A. § 4404(c).  The amendment added the language "for the year for which
  appeal is being made" 

 

  to the description of the rollback penalty applicable when there has been a
  complete reappraisal.  1995, No. 169 (Adj. Sess.), § 12.  In other words,
  the amendment reversed this Court's interpretation  of § 4404(c) in the
  1996 decision.  The other relevant part of the House bill was section 27,
  which  specified that section 12 would apply retroactively to January 1,
  1991.  Id. § 27.  Thus, as amended, §  4404(c) would have limited
  taxpayers' 1991 appeal remedies to a single year.  The bill passed the 
  General Assembly and was signed into law in May 1996.

       While the 1991 appeal was working through the hearing process,
  taxpayers filed another  appeal, this time contesting their 1994
  valuations, and raising the same issues as in the 1991 appeal.   Again, the
  BCA failed to comply with the procedural requirements of § 4404(c).  As a
  result of the  identity of the issues, the Town and taxpayers agreed to a
  stipulation that incorporated the BCA's  record, including its findings and
  conclusions from the 1991 appeal.  The taxpayers then brought this  appeal
  to the next tier of review, which had become the state appraiser.  In
  September 1997, most of  the other property owners who had appealed with
  taxpayers settled the 1994 appeal with the Town.   The Town and taxpayers,
  however, were unable to reach an agreement.  On appeal to the state 
  appraiser, the parties agreed that the issues in dispute could be settled
  on summary judgment.  The  main issue before the appraiser was the effect
  of Public Act No. 169 on taxpayers' claim for  repayment of taxes from 1992
  to 1996.

       In November 1999, the state appraiser issued a decision in taxpayers'
  1994 appeal.  In that  decision, the appraiser held that he did not have
  authority to rule on the validity of Public Act No.  169, and thus he must
  assume that the rollback penalty could apply for only one year.  The
  appraiser  further ruled that because taxpayers did not appeal their
  assessments in 1992 and 1993,  he did not 

 

  have jurisdiction over those years.  Finally, the appraiser declined to
  reach the merits of taxpayers'  1994 appeal because the record on summary
  judgment was insufficient to rule.

       It is the decision of the state appraiser in 1999 that is now before
  us.  Taxpayers argue that the  retroactive clause of the legislature's
  amendment to § 4404(c) violates the separation of powers  required by
  Chapter II, Section 5 of the Vermont Constitution, as well as other state
  and federal  constitutional principles.  Because, according to taxpayers,
  limiting the rollback penalty to 1991 is  unconstitutional, their tax
  liability is governed by our 1996 three justice panel decision.  They 
  contend that this Court's 1996 decision entitles them to repayment of taxes
  paid in excess of the  rollback amount of 1991 for the years 1992 to 1996,
  and they were not required to file separate  appeals for the years 1992,
  1993, 1995 and 1996.

       The Town counters that the retroactive element of the amended statute
  is constitutional  because it is justified by a rational legislative
  purpose.  The limitation on the rollback penalty is  necessary to prevent
  windfalls to taxpayers when the Town conducts a complete reappraisal. 
  Thus,  the Town argues, the rollback penalty should apply only to the year
  in which the appeal was filed, i.e.  1991.  Additionally, the Town urges
  this Court to overrule our decision in 1996 as inconsistent with  earlier
  precedent.  Finally, according to the Town, because taxpayers did not file
  subsequent appeals  each year after 1991, their tax liability should remain
  at the assessed values.

       There are two provisions of the 1996 Act that affect the tax statute
  at issue in this case.  The  first is § 12 that changes the relevant
  language of § 4404(c) to clarify that the rollback penalty, even  in the
  event of a complete reappraisal, shall apply only for one year-the year in
  which the appeal was  filed.  This legislative pronouncement expressly
  contradicts our interpretation of the same statute in  our 1996 panel
  decision.  Such an action, however, is entirely within the bounds of the
  power of the 

 

  legislature.  See Vt. Const. ch. II, § 6 (legislative power over revenue
  bills); Barnes v. Hall, 55 Vt.  420, 421 (1883) (taxation and collection
  are purely statutory powers).  Our paramount goal in  statutory
  construction is to give effect to the legislature's intent.  Burlington
  Elec. Dep't v. Vt. Dep't  of Taxes, 154 Vt. 332, 335, 576 A.2d 450, 452
  (1990).  If the legislature disagrees with our reading  of its intent, it
  is free to amend the statute to clarify the issue.  Compare State v.
  Madison, 163 Vt.  360,