Opinion ID: 880679
Heading Depth: 1
Heading Rank: 4

Heading: the power of stab and the right of appeal

Text: The DOR contends two issues arise in this case relating to STAB. The DOR contends that STAB has no power to ignore the administrative rules which are adopted in accordance with § 15-7-111, MCA, nor to declare a statute is unconstitutional. However, the record shows that STAB skirted the constitutional issue by declaring its belief that a court, if asked, would determine the assessment ratio studies and the application thereof unconstitutional. As to the administrative rules, § 15-2-301(4), MCA, provides that the state tax appeal board must give an administrative rule full effect unless the board finds any such rule arbitrary, capricious or otherwise unlawful. STAB in its response contended that this Court should throw out the amendments adopted by the legislature in 1987 and 1989 because of the provision in § 15-7-102(6), MCA, to the effect that the property owner may not appeal the yearly percentage adjustments that are specified in 15-7-111, and that may be made as a result of the sales assessment ratio study, the stratum, or area designations as specified in 15-7-111. Article VIII, § 7, of the Montana Constitution, provides: Tax appeals. The legislature shall provide independent appeal procedures for taxpayer grievances about appraisals, assessments, equalization, and taxes. The legislature shall include a review procedure at the local government unit level. Section 15-7-111(4), MCA, provides: (4) For the taxable year beginning January 1, 1990, and for every taxable year thereafter, the department shall conduct a stratified sales assessment ratio study of all residential land and improvements, agricultural 1-acre homesites and improvements, and commercial land and improvements. The sales assessment ratio based on property sales finalized and recorded by no later than November 1 must be used to determine appraisals for the immediately succeeding tax year. Section 15-7-102(6), MCA, provides: (6) ... The property owner may not appeal the yearly percentage adjustments that are specified in 15-7-111 and that may be made as a result of the sales assessment ratio study, the stratum, or area designations as specified in 15-7-111. Clearly, Art. VIII, § 7, Montana Constitution, guarantees the constitutional right of appeal procedures for a taxpayer concerning appraisals and assessments. It is also equally clear that § 15-7-111(4), MCA, required the DOR to conduct an annual stratified sales assessment ratio study beginning January 1, 1990, and for every taxable year thereafter and that the sales assessment ratio derived therefrom must be used to determine appraisals for the immediate succeeding tax year, and § 15-7-102(6) provides that the property owner may not appeal as a result of the sales assessment ratio study. Therefore, the provision of § 15-7-102(6), providing [t]he property owner may not appeal the yearly percentage adjustments that are specified in 15-7-111 and that may be made as a result of the sales assessment ratio study, the stratum, or area designations as specified in 15-7-111, is unconstitutional as a violation of Art. VIII, § 7, of the Montana Constitution. Notwithstanding that the non-appeal provision of § 15-7-102(6), MCA, may not be essential to our decision in this case, we believe it is important that the DOR and the legislature be made fully aware of the requirements of Art. VIII, § 7, with regard to any future legislation or rule-making.