Court Opinion

ID: 9782160
Source: CourtListenerOpinion
Date Created: 2023-08-30 18:03:47.453476+00
Date Added: 2024-06-11T07:34:50.275967
License: Public Domain

Davis, J.,
dissenting: I respectfully dissent from the majority decision and conclude that the Board of Tax Appeals (BOTA) had no jurisdiction to make findings of fact regarding the constitutionality of K.S.A. 79-5a01.
BOTA is a specialized agency that exists to decide taxation issues. While assessment is a question of taxation, discriminatory assessment is not a tax question but rather a constitutional question. BOTA does not have the authority to decide the constitutionality of a statute. Zarda v. State, 250 Kan. 364, Syl. ¶ 3, 826 P.2d 1365, cert. denied 504 U.S. 973 (1992).
There was no disagreement between the parties on the valuation of taxpayer’s property. Taxpayer contested the Department of Revenue’s Director’s assessment of its property but only insofar as its claim that the assessment under K.S.A. 79-5a01 was discriminatory and thus unconstitutional. After a lengthy hearing on the constitutional question, BOTA entered its findings of fact and conclusions of law regarding the constitutionality of K.S.A. 79-5a01and related statutes. However, BOTA then concluded in a short sentence: “[T]he Board must conclude that the Department’s valuation and assessment on the Taxpayer’s property in Kansas should be sustained in its entirety for all the years at issue herein.” BOTA entered this conclusion for the stated reason that it had no jurisdiction over the constitutional question.
CIG successfully attacked the constitutionality of K.S.A. 79-5a01 before BOTA and this court, thereby obtaining a substantial refund for the years in question. BOTA identified the following issue to be resolved by its extensive proceedings:
“The issue before the Board is whether the valuation method and assessment rate as applied to the Taxpayer’s Kansas cross county and interstate natural gas gathering properties under K.S.A. 79-5a01, when read in conjunction with K.S.A. *88179-1439 and Article 11, Section 1 of the Kansas Constitution, result in discriminatory taxation of such properties vis-a-vis single county natural gas gathering system properties in violation of the Commerce Clause of the United States Constitution and the Equal Protection Clauses of the United States and Kansas Constitutions.”
BOTA is to presume tire constitutionality of all statutes involved in this controversy. That presumption in this case required BOTA to affirm the Department’s assessment against the Taxpayer. Nevertheless, BOTA devoted the entire proceeding to a determination of whether the statute violated tire United States and Kansas Constitutions. The entire proceeding before BOTA runs counter to the dictates of Zarda:
“Where there are no issues raised which lend themselves to administrative determination and the only issues present either require judicial determination or are subject to judicial de novo review, it follows that plaintiffs should be permitted to seek court relief without first presenting the case to the administrative agency.” Zarda, 250 Kan. at 368-69.
The taxpayer attacked the constitutionality of the statutes in question. BOTA entertained the question. The record demonstrates from the prehearings through the final hearing and the findings of fact and conclusions of law that the purpose of the hearing was to determine whether the statutes involved discriminated against CIG with the result that the statutes violated the United States and Kansas Constitutions. In Felten Truck Line v. State Board of Tax Appeals, 183 Kan 287, 327 P.2d 836 (1958), this court said:
“The commission [BOTA] is not set up as a court to review the constitutionality of legislative enactments. It is an administrative body. It is the commission’s duty to presume that the statutes are constitutional and valid. The plaintiffs had a right to seek court relief on the question of the constitutionaliiy of the statute without first presenting the question to the commission for review.”
BOTA did not presume the constitutionaliiy of the taxing statute in question but allowed the parties to submit evidence on the discriminatory aspects of the statute as well as other constitutional issues. BOTA, recognizing its limitations, stopping short of declaring the statute unconstitutional, made the necessary findings of fact and conclusions of law that support the majority’s determination *882that the statute is unconstitutional. The entire constitutional question should have been submitted to and determined by the only body uniquely suited to initially determine constitutional questions — a court of law. I would therefore affirm BOTA’s determination that the Director’s valuation and assessment of CIG’s property be sustained but otherwise dismiss, allowing CIG to pursue its question before a district court.
The majority notes that BOTA has no jurisdiction “to decide the constitutionality of a statute.” In more recent cases where tire constitutionality of a statute was before BOTA, there was a separate issue or issues giving BOTA jurisdiction. See, e.g., In re Tax Appeal Sprint Communications Co., 278 Kan. 690, 101 P.3d 1239 (2004); In re Tax Appeal of ANR Pipeline Co., 276 Kan. 702, 79 P.3d 751 (2003); In re Tax Appeal of Colorado Interstate Gas Co., 276 Kan. 672, 79 P.3d 770 (2003); In re Tax Appeal of Lietz Constr. Co., 273 Kan. 890, 47 P.3d 1275 (2002); In re Tax Appeal of Barton-Dobenin, 269 Kan. 851, 9 P.3d 9 (2000); In re Tax Appeal of Alsop Sand Co., 265 Kan. 510, 962 P.2d 435 (1998). In these cases, with the exception of one, our court has acknowledged that BOTA is without authority' or jurisdiction to address constitutional questions. In each case, the constitutional question was not decided by BOTA and was resolved by this court as a matter of law. See also In re Tax Appeal of Colorado Interstate Gas Co., 270 Kan. 303, 304-05, 14 P.3d 1099 (2000) (constitutional issues raised before BOTA were not ripe for determination by this court on appeal where BOTA had no authority over these issues).
In this case, BOTA addressed the sole question presented — the constitutionality of K.S.A. 79-5a01. BOTA found facts supporting the conclusion that the statute was unconstitutional instead of presuming the constitutionality of the statute. Without the facts and conclusions by BOTA, this court would not have been able to resolve the constitutional question as a matter of law. Without BOTA’s findings and conclusions, the question of the constitutionality of K.S.A. 79-5a01 and related statutes involved mixed questions of fact and law, which are to be resolved by a district court.
In Sprint Communications, BOTA determined that while it did not have authority to declare a statute unconstitutional, it did have *883authority to determine whether the Department’s application of a statute was unconstitutional. Since this was not an issue in the case, we did not comment on BOTA’s statement. I would submit that no Kansas case supports BOTA’s assertion of jurisdiction. BOTA is an administrative agency without jurisdiction to consider the constitutionality of a statute. The conclusion that it may consider the application of the statue and determine its constitutionality as to the taxpayer is contraiy to well-established law. BOTA must presume the constitutionality of the statute when it applies to the taxpayer.
For all the reasons set forth, the constitutionality of the statute in this case was a mixed question of fact and law. This court is not in a position to determine facts relating to the constitutionality of a statute. BOTA had no jurisdiction to consider the constitutionality of the statute. Thus, its findings and conclusions have no force or effect. I would therefore affirm BOTA’s assessment and dismiss the remainder of the appeal so that the mixed questions of fact and law relating to the constitutionality of K.S.A. 79-5a01 and related statutes may be resolved by a court of competent jurisdiction — a district court.
Allegrucci, J., joins in the foregoing dissenting opinion.