Court Opinion

ID: 9796703
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:03:08.809522+00
Date Added: 2024-06-11T08:51:02.799412
License: Public Domain

MINZNER, Justice (dissenting). {44} I respectfully dissent. The statutory analysis on which the opinion depends seems to me to give too little weight to the text of NMSA 1978, Section 7-36-20 (1997) and too much weight to Alexander v. Anderson, 1999-NMCA-021, 126 N.M. 632, 973 P.2d 884, in which the Court of Appeals construed and applied Section 7-36-20(A) as it read prior to the 1997 amendment. I would affirm the opinion of the Court of Appeals on the following basis. {45} The prior statute read as follows: A. The value of land used primarily for agricultural purposes shall be determined on the basis of the land’s capacity to produce agricultural products. The burden of demonstrating primary agricultural use is on the owner of the land, and he must produce objective evidence of bona fide agricultural use for the year preceding the year’ in which application is made for his land to be valued under this section. The fact that land was devoted to agricultural use in the preceding year is not of itself sufficient evidence to support a finding of bona fide primary agricultural use when there is evidence that the agricultural use was subordinate to another use or purpose of the owner, such as holding for speculative land subdivision and sale, commercial use of a nonagricultural character, recreational use or other nonagricultural purpose. 1975 N.M. Laws, ch. 165, § 3. {46} The existing statute reads as follows: A. The value of land used primarily for agricultural purposes shall be determined on the basis of the land’s capacity to produce agricultural products. Evidence of bona fide primary agricultural use of land for the tax year preceding the year for which determination is made of eligibility for the land to be valued under this section creates a presumption that the land is used primarily for agricultural purposes during the tax year in which the determination is made. If the land was valued under this section in one or more of the three tax years preceding the year in which the determination is made and the use of the land has not changed since the most recent valuation under this section, a presumption is created that the land continues to be entitled to that valuation. § 7-36-20(A). {47} The prior statute contained neither of the two presumptions the present statute contains. The prior statute placed the burden of demonstrating “primary agricultural use” on the owner wishing to take advantage of Section 7-36-20(A) and required “objective evidence of bona fide agricultural use for the year preceding the year in which application is made.” The existing statute first creates a presumption “that the land is used primarily for agricultural purposes during the tax year in which the determination is made” if there is “[ejvidence of bona fide primary agricultural use of land for the tax year preceding the year for which determination is made.” The existing statute creates a second presumption; the existing statute creates a presumption “that the land continues to be entitled” to valuation under Section 7-36-20(A) “[i]f the land was valued under this section in one or more of the three tax years preceding the year in which the determination is made.” {48} These differences between the two statutes suggest that the Legislature was trying to simplify proof for the taxpayer and give greater weight to a prior determination of agricultural use. Further, the rules of construction the Legislature have provided, see generally NMSA 1978, § 12-2A-10(A) (1997), indicate that to the extent there is a conflict between or among statutes, the later, as well as the more specific, controls. {49} I recognize that Section 12-2A-10(A) provides that “[i]f statutes appear to conflict, they must be construed, if possible, to give effect to each.” As the majority indicates, the Board attempted to construe Section 7-36-20(A) and NMSA 1978, Section 7-38-6 (1981) to give effect to both by placing the initial burden of persuasion on the Assessor and then, after determining that the Assessor had produced sufficient evidence to rebut the presumption provided by Section 7-36-20(A), affording the Assessor’s determination the presumption provided by Section 7-38-6. See Maj. Op. ¶ 12. I agree with the majority that the 1981 amendment to Section 7-38-6 calls into question the analysis of that section contained in Black v. Bernalillo County Valuation Protests Bd., 95 N.M. 136, 141, 619 P.2d 581, 586 (Ct.App.1980). In Black, the Court of Appeals reasoned that because Section 7-38-6 referred to “[vjalues” as presumptively correct and the facts presented raised an issue of entitlement “to the special method of valuation provided for in § 7-36-20,” the presumption provided for in Section 7-38-6 did not apply. 95 N.M. at 140-41, 619 P.2d at 585-86. In 1981, the Legislature added the term “classification” to the list of “determinations” that were presumed correct. The amendment raises a question of construction: whether, by adding the term “classification” to the list of determinations of value that are presumed correct, the Legislature intended to change the result in Black. {50} The facts that Black was decided in 1980 and the amendment was enacted in 1981 seem to me to raise the question, rather than answer it. The majority reasons that the amended statute indicates an intent to overrule Black. I am not certain that the analysis in Black depended on the list of determinations the Legislature had provided prior to 1981, rather than the difference between the purposes of Section 7-38-6 and Section 7-36-20(A). I understand Black to have reasoned that Section 7-36-20(A) was a more specific statute, one which provided a method of valuation to which a taxpayer was entitled if the statutory requirements were met. The 1981 amendment to Section 7-38-6 makes the Legislature’s intent less clear, but the 1997 amendment to Section 7-36-20(A) seems to me to be more consistent with the continued validity of Black than with a construction of its having been overruled. {51} If there is ambiguity, and I am not persuaded there is, the more general rule of construction I would apply favors the taxpayer. “Where there is reasonable doubt of the meaning of a revenue statute, the doubt is resolved in favor of those taxed.” 3A Norman J. Singer, Statutes and Statutory Construction § 66:1, at 3 (6th ed.2003). Professor Singer notes that there are several theories that have been advanced in support of the principle, including that the principle is “a desirable way to secure equality and uniformity in the imposition of the tax burden.” Id. at 13. As the majority notes, the Court of Appeals accepted certification in part to secure a “uniform application of the Property Tax Code.” See Maj. Op. ¶ 27 n. 1. I believe trying to use the presumption provided in Section 7-38-6 as well as the presumption provided in Section 7-36-20(A) probably will result in less uniformity, because there will be two evidentiary determinations. The first determination will be whether the Assessor has rebutted the taxpayer’s showing; the second will be whether the taxpayer has rebutted the Assessor’s showing. I have difficulty believing the Legislature contemplated such a process when it amended Section 7-36-20(A). The Legislature easily could have included a cross-reference to Section 7-38-6 within Section 7-36-20(A), and the fact that it did not makes me think the two sections should be construed independently, as the Court of Appeals did in Black. {52} Section 7-36-20(C) takes on added meaning following the 1997 amendment to Section 7-36-20(A). Section 7-36-20(0 provides now, as it did when the prior version of Section 7-36-20(A) was in effect, that “[t]he department shall adopt regulations for determining whether or not land is used primarily for agricultural purposes.” It may have been intended to clarify, under the prior version of the statute, what a taxpayer claiming “the special method of valuation provided for in [Section] 7-36-20,” Black, 95 N.M. at 141, 619 P.2d at 586, needs to show to satisfy the burden of production imposed by the prior version of Section 7-36-20(A). Nevertheless, if the regulations are, as I believe they are, the significant source of guidance in determining when “land is used primarily for agricultural purposes,” then I also believe the majority gives too little weight to the regulation apparently adopted in response to Section 7-36-20CA). {53} In response to Section 7-36-20(C), as the majority notes in paragraph 38, the Department has provided that the taxpayer cannot meet the burden of demonstrating that the use of land is primarily agricultural “without submitting objective evidence that ... the use of the land met the requirements for payment or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government.” Special Method of Valuation — Land Used Primarily for Agricultural Purposes, 3.6.5.27(A)(1)(b) NMAC (4/30/2001). The majority reasons that the listed use is a necessary, but not a sufficient, showing that the taxpayer is entitled to the benefits of Section 7-36-20. Maj. Op. ¶ 39. The Court of Appeals reasoned that having shown a valid Soil Conservation Agreement, the taxpayer had made a showing the Assessor failed to rebut. I agree. {54} The existence of a valid Soil Conservation Agreement stands alone as justifying a classification of land as agricultural under the statute. The taxpayer was entitled to the benefit of the presumption provided in Section 7-36-20(A). The Assessor was required to rebut that presumption. The Assessor offered evidence to support a finding of fact or conclusion that land covered by the agreement was used to create a habitat for elk. The regulation does not limit the availability of agricultural classification to particular uses under an agreement, but rather refers only to “the requirements for payment or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government.” 3.6.5.27(A)(1)(b) NMAC. That language exactly tracks the language of Section 7-36-20(B). The majority appropriately emphasizes that the statute indicates the Legislature intended the special method of valuation for land used “primarily for agricultural purposes.” See Maj. Op. ¶ 37. I disagree that the Board was entitled to conclude “that the Lodge’s [S]oil [Conservation [Ajgreement did not satisfy Section 7-36-20 because the primary purpose of the uses described in the agreement was to provide suitable habitat for elk, not to conserve soil.” See Maj. Op. ¶ 37. {55} After the 1997 amendment to Section 7-36-20(A), the Legislature seems to have entrusted to the Department the responsibility for providing guidance on “determining whether or not land is used primarily for agricultural purposes.” § 7-36-20(C). After the 1997 amendment, Section 7-36-20(A) no longer provides much guidance on how a taxpayer initially shows land is used primarily for agricultural purposes. Section 7-36-20(C) continues to provide, however, that the Department is to issue appropriate regulations. The regulation the Department has provided does not require more of the taxpayer than did the Legislature in enacting Section 7-36-20(B). To add, as did the Board, the requirement that the taxpayer must demonstrate the use was to conserve soil or the limitation that providing a suitable habitat for elk is not agricultural seems to rewrite both the statute and the regulation. Adding or limiting the availability of the special method seems to me to be the work of the Legislature or the Department. {56} One of the purposes of strict construction of a tax statute is to provide notice. “[A] rigid application of revenue measures is for the protection of citizens by informing them in unambiguous terms as to the amount and nature of their duty to pay taxes.” 3A Singer, supra § 66.1, at 13. In suggesting that the Legislature could not have meant to grant land subject to a valid Soil Conservation Agreement the benefit of Section 7-36-20(A) if the use was non-agricultural, see Maj. Op. ¶ 37, the majority seems, to me to overlook the fact that the Legislature has defined use pursuant to a Soil Conservation Agreement as agricultural. See § 7-36-20(B). Further, the majority has left open to a variety of interpretations a term the Legislature has entrusted the Department to interpret by regulation. See Section 7-36-20(C). {57} Because the Soil Conservation Agreement covers most of the acreage in dispute, the Board may have erred in addressing separately the acreage occupied by the private herd. Cf. 3.6.5.8(B) NMAC (governing classification of multiple-use properties, those which contain both residential and non-residential components) (“If it is not feasible to separate a multiple-use property into discreet entities, then that property shall be classified according to the predominant use of the property”). The private herd seems to occupy only about six thousand of the twenty-seven thousand acres at issue. Perhaps the predominant use of the property should be measured by the number of acres devoted to a use. The Board’s determination that the predominant use 'of the land was to provide a suitable habitat for elk seems to have been a determination that affected its determination as to all twenty-seven thousand aeres. I question whether the appeal actually presents two different questions. The assessment made, however, as well as the stipulations seem to have distinguished the acreage devoted to the public herd from the acreage devoted to the private herd. {58} If it is necessary to address separately the acreage devoted to the private herd, then I believe the focus on whether elk are appropriately considered livestock or not is misplaced. The Board concluded that providing a habitat for elk was a non-agricultural use and that there was evidence the owner intended to make “recreational and other non-agricultural uses” primary. The Board relied on Alexander in concluding that an applicant was required to demonstrate an objective intent. The Board’s analysis seems more consistent with the prior version of Section 7-36-20(A), which described evidence of use in a prior year as being insufficient “objective evidence” when “there is evidence that the agricultural use was subordinate to another use or purpose of the owner, such as ... recreational use or other nonagricultural purpose.” See Alexander, 1999-NMCA-021, ¶ 9, 126 N.M. 632, 973 P.2d 884. The Board’s reliance on Alexander and the analysis therefore seem erroneous as a matter of law. {59} The Board also relied on the evidence of income, the Bureau of Indian Affairs Letter Statement of Intent, and the fact that “[a] significant portion of the subject property is used for the production of private elk, and the grazing of public elk, both of which are used in the big game hunting business.” The Board noted that timber income, which is recognized as a bona fide agricultural use, “averaged between 10% and 30% of the total income for the property for the four years given.” The Board appears to have concluded that timber production was a secondary use. Having concluded that providing a suitable habitat for elk was a non-agricultural use, I think the Board must have thought the Legislature did not, or perhaps could not, have intended to encompass such use under Section 7-36-20. That is a thoughtful construction of the statutes, but not, I think, what we should conclude the Legislature intended after the 1997 amendment to Section 7-36-20(A). {60} Based on the evidence produced, the most appropriate result seems to turn on who had the burden of proof on any question or questions of fact and then what law controls the conclusion to be drawn. If I am right to think that the taxpayer was entitled to rely on the presumption provided in the last sentence of Section 7-36-20(A), then the question is whether or not the Assessor provided enough to rebut that presumption. The Court of Appeals did not think that the absence of the term “elk” in P.T.D. 99-25 was enough, and I think that the recitation of other statutes both in the Court of Appeals opinion and the Majority Opinion is an indication of ambiguity within and among the statutes as a whole, rather than proof that the absence of the term within the division’s order is an indication of direction from the Department. I am not convinced the ultimate question is factual. Even if all the questions were factual, however, the indica of domestication to which the majority refers in paragraph 28, when taken together with the statutory presumption provided by the third sentence in the present Section 7-36-20(A), seem circumstances that compel a different result. {61} The majority affirms the Board in part on the basis of the Department’s regulation creating a presumption “that land is not used primarily for agricultural purposes if income from nonagricultural use of the land exceeds the income from agricultural use of the land.” Maj. Op. ¶¶ 17, 19 (quoting & discussing 3.6.5.27(A)(2) NMAC). The Court of Appeals reasoned that this presumption was not relevant because the Board did not rely on it. The majority believes the Board did rely on it, see Maj. Op. ¶ 19, but indicates agreement with the Court of Appeals that “when the parties dispute whether a given use is agricultural, this analysis is of limited utility.” See Maj. Op. ¶ 20. I agree that the regulation does not resolve the issue presented on appeal. {62} The Legislature probably ought to say something more about multiple uses, or pursuant to Section 7-36-20(0, the Department ought to say something more definitive about proof of primary use in light of Sections 7-36-20(A) and (C). Separating classification of land from a taxation scheme based on its generation of revenue as a measure of value might also be worthy of consideration. Until one or the other acts more definitively, I would conclude we ought to affirm the Court of Appeals. {63} The issue of uniformity is an important one, and I appreciate that the majority tries to reach a decision that promotes uniformity. I think the Court of Appeals tried to do the same thing. What seems to me to be a deciding factor is that the Board appears to have had to reach a conclusion that the Legislature must make, whether or not providing habitat for elk is a non-agricultural use, because unless it is not, the taxpayer seems to be entitled to rely on the presumption the Legislature has provided. The Court of Appeals tried to work with the statutes as written, however ambiguous they seemed. The Board on the other hand, particularly with respect to the Soil Conservation Agreement, appears to have had to limit the statute the Legislature has written in order to reach its determinations. On balance, I believe the Court of Appeals opinion contains the more appropriate analysis. {64} The majority would reverse the Court of Appeals on the basis the Board reached the right result. For the foregoing reasons, I respectfully dissent. I CONCUR: RODERICK T. KENNEDY, Judge.