Opinion ID: 2570076
Heading Depth: 1
Heading Rank: 4

Heading: Bakst controls the outcome of these cases

Text: The Taxpayers argue that to develop their properties' values for 2004-2005, the Assessor used the same methods that we declared unconstitutional in Bakst. The State and County appellants assert, however, that the Taxpayers' properties' 2004-2005 valuations were developed by factoringa purportedly distinct and statutorily approved method for assessing property. Despite the Taxpayers' challenges to the methods used to value their properties, the State Board failed to make findings or otherwise develop a record that clearly set forth the valuation methodologies used by the Assessor. In these cases, the record arguably reflects either the use of the unconstitutional methods or factoring. Regardless, we conclude that neither approach supports the State Board's conclusion that the Taxpayers' properties' valuations were just and equitable. To the extent that the Assessor developed the Taxpayers' properties' 2004-2005 values by using the same methods that we declared unconstitutional in Bakst, [20] clearly, the Bakst analysis controls the outcome of these cases. Nonetheless, the State and County appellants attempt to distinguish these cases from Bakst, arguing that two distinctions exist: (1) the Tax Commission's temporary regulations, filed in December 2002, justified the Assessor's reappraisal methodologies; and (2) the permanent regulations adopted by the Tax Commission in August 2004 validated those methodologies. With respect to the State and County appellants' first argument, this court generally will not consider arguments that a party raises for the first time on appeal. [21] We have not previously determined, however, whether this rule applies to issues raised for the first time in the district court in a petition for judicial review of an administrative decision. [22] Because judicial review of administrative decisions is limited to the record before the administrative body, [23] we conclude that a party waives an argument made for the first time to the district court on judicial review. Since the record here is devoid of evidence that the temporary regulations were addressed or considered in the State Board proceedings, that argument was waived. [24] Regarding the State and County appellants' second argument, that the 2004 regulations validated the methods used to develop the 2004-2005 values, we note that the State Board found below, based on arguments from the Assessor and the Department, that the permanent regulations were irrelevant to these cases because they were not retroactive. While we may judicially estop a party from asserting two conflicting positions to attain an unfair result in abuse of the legal system, given the widespread importance of this case, we decline to do so here. [25] Nonetheless, we agree with the State Board's determination that the regulations were not retroactive. Under NRS 361.300(6), the Assessor was required to notify taxpayers of their assessments for 2004-2005 by December 18, 2003. The 2004 permanent regulations did not become effective, however, until almost eight months later. [26] Regulations, like statutes, operate prospectively, unless an intent to apply them retroactively is clearly manifested. [27] The 2004 permanent regulations do not provide for retroactive application. [28] Because the regulations became effective after the Assessor determined the Taxpayers' properties' 2004-2005 values and did not apply retroactively, they do not provide a basis for distinguishing the case from Bakst. [29] Because the State and County appellants have failed to distinguish this case from Bakst, insofar as the Assessor used the same, unconstitutional methods to develop the Taxpayers' properties' 2004-2005 taxable values, these cases are controlled by the analysis in Bakst. The State and County appellants argue, however, that the Assessor did not use the same methods in 2004-2005 as he used in 2003-2004. Instead, they assert that by using the factoring method to develop the Taxpayers' properties' 2004-2005 values, any constitutional defect from 2003-2004 was cured. [30] We reject this argument on two grounds. First, the record does not explain the use of the factoring method, and second, the factoring method itself, as described by the Assessor, merely extends the application of the prior year's assessed value as part of the calculus to determine the current year's assessed value. The record contains no explanation of the factoring method, how the 2004-2005 factors were developed, or how those factors were applied, as purported, to remedy the prior valuations' infirmities. Presumably, the Assessor presented no argument or evidence regarding factoring below because the Taxpayers' arguments were identical to those made in Bakst and had been previously rejected by both the County and State Boards. But this court's review is generally confined to the record before the State Board, [31] rendering full consideration of this issue unavailable. Even so, on appeal, the Assessor has represented that the factors were used to adjust the previous year's assessed values based upon any changes in the housing market. The Assessor argues that, because factoring is a statutorily approved method of determining a property's assessed value in a year in which the property is not reappraised, the 2004-2005 assessments are valid. By the Assessor's own description, however, factoring does not independently assess any particular property's taxable value, but rather merely adjusts the prior year's assessed values en mass by a certain percentage, purportedly reflecting current market conditions. [32] According to the Assessor, he develops the land factor by looking at all land sales in the area since the last physical reappraisal and comparing the sales prices to the prior assessments. Then, based on the median ratio of those properties' assessed values to sales prices, the Assessor develops the factor and multiplies the prior year's assessed values for all properties in the area by it. Thus, based on this description, it appears that the factoring method does not independently address an individual property's taxable value; rather, it simply adjusts the previous year's assessed value based on a mathematical analysis of the general market trend. We determined in Bakst that the methods used by the Assessor to determine the 2003-2004 property valuations were unconstitutional, and therefore, the assessments based on those valuations were null and void. [33] In each of these cases, the Taxpayers' properties' 2003-2004 assessed values were developed using methods that we declared unconstitutional in Bakst; therefore, each of the Taxpayers' 2003-2004 values were null and void. Because null and void values could not be validly adjusted, and because the adjustment of those unconstitutional values by applying the same factors to each property in 2004-2005 did not address or remedy the 2003-2004 values' unjustness and inequity, the use of factoring does not materially distinguish this case from Bakst. Thus, even if we were able to review the Assessor's use of factoring, it appears that the resulting 2004-2005 values were affected by the same unconstitutional infirmities as the 2003-2004 values and, like those values, are unjust and inequitable.