In Orange County Assessor v. Stout, Cause No. 49T10-1112-TA-94 (October 2, 2013), the Indiana Tax Court faced two issues, one procedural and one substantive. First, the Court held that Indiana’s burden-shifting statute applied to this March 1, 2009, assessment appeal of nine acres of land, of which eight acres had been reclassified from “agricultural” to “excess residential,” increasing the land’s vlaue from $8,000 to $45,600. (Excess residential land is “dedicated to a non-agricultural use” that is “normally associated with the homesite”; here, Owner didn’t dispute the values assigned to his one acre of residential homesite land, his residence, and two utility buildings on the property, see Slip op. at 2 n.1 and 8 n.8.) Second, the Court concluded that the Assessor submitted no evidence showing that Owner was not using his eight acres for an agricultural purpose.
Assessor had the burden of proof. The Court discussed the brief legislative history of the burden-shifting statute, which was initially passed in 2009 and revised and placed into different code sections in 2011 and 2012. The heart of the provision has remained the same – if a property’s assessed value increases by 5% or more from one assessment date to the next, the assessor has the burden of proof on appeal. The current version, as confided at Ind. Code 6-1.1-15-17.2, provides:
This section applies to any review or appeal of an assessment under this chapter if the assessment that is the subject of the review or appeal increased the assessed value of the assessed property by more than five percent (5%) over the assessed value determined by the county assessor or township assessor (if any) for the immediately preceding assessment date for the same property. The county assessor or township assessor making the assessment has the burden of proving that the assessment is correct in any review or appeal under this chapter and in any appeals taken to the Indiana board of tax review or to the Indiana tax court.
The Court rejected the Assessor’s contention that the Indiana Board of Tax Review had impermissibly applied the “new” 2011 burden-shifting statute retroactively to the Owner’s March 1, 2009 assessment appeal. The statute was not “new” in 2011, as the legislature had revised the 2009 version to clarify its original intent that the 5% burden-shifting rule should apply “throughout the entire appeals process,” the Court observed. Slip op. at 5. The Court also dismissed the Assessor’s argument that both the assessment date and the assessment appeal must occur after the statute’s effective date – a position unsupported by the plain language of either the 2009 or the 2011 versions of the statute. Slip op. at 7. The Court concluded: “This shift in the burden of proof applies to the process and procedure of appeals alone, not to the mechanics of valuing property as of a certain assessment date. Accordingly, the statutes apply to all pending appeals regardless of assessment dates.” Id. (emphasis added).
Assessor failed to show land was not used for agricultural purposes. To be classified agricultural, land must be devoted to an agricultural use. “Woodland” is one agricultural classification; it is defined as:
land supporting trees capable of producing timber or other wood products. This land has 50% or more canopy cover or is a permanently planted reforested area. This land use type includes land accepted and certified by the Indiana Department of Natural Resources as forest plantation under guidelines established to minimize soil erosion.
Slip op. at 8 (ciation omitted). An aerial map showed that Owner’s tree canopy exceeded 50% and was similar to neighboring properties classified as “agricultural.” The Assessor admitted that she changed the classification of Owner’s property solely because she didn’t have a forest management plan or a timber harvesting plan for the property. The Court found that “a reasonable mind would not accept the lack of a forest management plan or a timber harvesting plan alone as adequate support for the conclusion that [Owner’s] property was not being used for agricultural purposes.” Slip op. at 9. A forest management plan is not required for property that is – like the land at issue – less than ten acres. Moreover, that the Assessor didn’t possess a timber management plan “does not mean that one does not exist” or that Owner “has not harvested, or is harvesting, timber from the property.” Slip op. at 10. Based on the evidence in the record, the Court could not conclude that the Indiana Board’s final determination was erroneous. Id.