Opinion ID: 2103158
Heading Depth: 1
Heading Rank: 1

Heading: The Board's Standard of Review

Text: In its written decision, the Board stated that the determination of the municipal assessors enjoys the presumption of validity which CMP could overcome only by proving that the challenged valuation was manifestly wrong. CMP's contention is that the Board erred as a matter of law by improperly deferring to the municipal assessors and by not reviewing the assessment de novo. The Town maintains that the burden of proof was properly allocated to CMP at the Board level. When a taxpayer challenges the assessment of nonresidential property with a municipal valuation exceeding $500,000, appeal from the municipal determination is to the Board of Property Tax Review. 36 M.R.S.A. §§ 843(1-A), 844(2) (Supp.1993). As with other modes of administrative review of municipal assessment, the taxpayer must receive a reasonable abatement if the Board thinks that the owner is over-assessed. §§ 843(1-A), 844(2); see also 36 M.R.S.A. § 843(1) (Supp.1993) (governing appeals to municipal boards of assessment review); 36 M.R.S.A. § 843(2) (Supp.1993) (governing appeals to State Board of Property Tax Review of municipal determinations in primary assessing areas); 36 M.R.S.A. § 844(1) (Supp. 1993) (governing appeals to county commissioners). Unique to the provision governing nonresidential property valued at $500,000 or greater, however, is the requirement that [t]he board shall hold a hearing de novo. Id. § 843(1-A). We cannot agree with CMP that the language mandating a hearing de novo requires the Board to accord no deference to the determination of the municipal assessors. In the context of sales taxes, we have previously drawn a distinction between a de novo hearing and a de novo determination, noting that the issues to be considered in a de novo hearing may be limited and may involve some degree of deference to the previous determination. See Jackson Advertising Corp. v. State Tax Assessor, 551 A.2d 1365, 1366 (Me.1988). A review of the legislative record demonstrates that the intent of section 843(1-A) is to require a de novo hearing before the Board without mandating a de novo determination. The Legislature created the present Board in 1986, see P.L.1985, ch. 764, §§ 2, 8, 17, and charged it with the same standard of review that applies when a local board of assessment review or county commissioners review a decision of the assessors, i.e., the reviewing agency shall grant a reasonable abatement if the agency thinks that the owner [or applicant] is over-assessed. Id. §§ 17, 18; 36 M.R.S.A. §§ 843(1), (1-A), 844. The Statement of Fact accompanying this legislation makes clear that the reference to de novo review in section 843(1-A) goes not to the standard of the Board's review, but rather to the legislature's intention that the Board not rely on the record as developed by a local board of assessment review if such a local board has reviewed the assessment. See L.D. 2364, Statement of Fact (112th Legis.1986) (when Board hears appeal of assessment that has already been reviewed by local board of assessment review, Board shall hold de novo hearing and determine the matter in the same manner as if the appeal had been taken directly from the assessors' decision or municipal officers' decision on the abatement application to the state board). Thus, we conclude that the legislature did not intend the language in section 843(1-A) to alter the previously existing law governing the standard of review to be applied when a reviewing agency thinks that the owner is overassessed. [4] We have repeatedly stated that a taxpayer seeking to challenge a property tax assessment has the burden of proving that: (1) The judgment of the assessors was irrational or so unreasonable in light of the circumstances that the property is substantially overvalued and an injustice results; (2) There was unjust discrimination; or (3) The assessment was fraudulent, dishonest, or illegal. Kokernak, 612 A.2d at 872 (citing Moser v. Town of Phippsburg, 553 A.2d 1249 (Me. 1989); Shawmut Inn v. Town of Kennebunkport, 428 A.2d 384, 393 (Me.1981); Delta Chemicals, Inc. v. Town of Searsport, 438 A.2d 483 (Me.1981)). In arguing that the Board applied the wrong standard of review in this case, CMP relies on our observation elsewhere in Kokernak, and in Dodge v. Town of Norridgewock, 577 A.2d 346 (Me. 1990), that when county commissioners act as an appeals board for a municipal tax assessment, the statute requires that the commissioners give no deference to the decision of the tax assessors. Kokernak, 612 A.2d at 873 (citing Dodge, 577 A.2d at 347). In neither case, however, were we squarely presented with the question of what burden the taxpayer bears in appealing a property tax assessment to an agency empowered to grant an abatement if the agency thinks that the owner is over-assessed. In Kokernak we held that the Superior Court erred by ignoring the determination of the county commissioners and reviewing the assessors' decision directly. Kokernak, 612 A.2d at 872-73. In Dodge, administrative review was not an issue. We found no abuse of the Superior Court's discretion in refusing to issue a declaratory judgment to the effect that a municipality should give written reasons for denying an abatement; dispositive was the fact that, at the time of the Superior Court decision, the abatement request was then on appeal to the county commissioners, who had the authority to make their own determination. Dodge, 577 A.2d at 347. Thus, neither the holding in Dodge nor in Kokernak alter the principle that a taxpayer who pursues an administrative appeal of a municipal tax assessment carries the burden of proof before the appellate agency. In its written decision, the Board properly relied on our holding in Delta Chemicals, that a taxpayer meets this burden by proving that the assessed valuation of the property, in relation to its just value, is manifestly wrong. Delta Chemicals, 438 A.2d at 484. CMP contends that this is an outdated standard because we articulated it at a time when a taxpayer was required to seek abatements before the courts rather than an administrative tribunal. The notion that municipal assessments must stand unless manifestly wrong first appears in Shawmut Mfg. Co. v. Town of Benton, 123 Me. 121, 131, 122 A. 49 (1923), in which a municipal assessment was reviewed first by the county commissioners, id. at 122, 122 A. 49, and then by the Law Court following testimony apparently taken by a single justice. See id. at 131, 122 A. 49. We subsequently charged taxpayers with the same burden of proof in cases when there had been no intermediate agency review. See Spear v. City of Bath, 125 Me. 27, 29-30, 130 A. 507 (1925); Sweet v. City of Auburn, 134 Me. 28, 33, 180 A. 803 (1935); Sears, Roebuck & Co. v. City of Presque Isle, 150 Me. 181, 186, 107 A.2d 475 (1954); Delta Chemicals, 438 A.2d at 484. The Board properly allocated to CMP the burden of proving that the Town had over-assessed the Wyman project.