IN THE MATTER OF:
APPEAL OF CHARLES
H. TAYLOR/TRANSYLVANIA From the North Carolina
TREE FARMS from the Property Tax Commission
denial of present-use No. 00 PTC 244
value classification
by the Jackson County
Board of Equalization
and Review for tax year
2000.
Long, Parker, Warren & Jones, P.A., by Robert B. Long, Jr.,
for taxpayer-appellant.
W. Paul Holt, Jr., P.A., by W. Paul Holt, Jr., and Holt York
McDarris & High L.L.P., by Jeffrey P. Gray, for appellee
Jackson County.
ELMORE, Judge.
Charles H. Taylor (Taylor) and Transylvania Tree Farms
(collectively, taxpayers) appeal from the Property Tax Commission's
(the Commission) decision denying present-use value classification
for tax year 2000 on their six tracts of forested land located in
Jackson County, North Carolina (the subject properties). For the
reasons discussed herein, we affirm.
The facts pertinent to this appeal, as set forth by the
parties in a post-hearing stipulation filed while the Commission
held this matter under advisement, are as follows: . . . .
The entity known as Transylvania Tree Farms is a
partnership organized under the laws of the State of
North Carolina and is owned by Charles H. Taylor and his
wife Elizabeth Taylor.
From at least January, 1984, and continuing until
July, 1999, all of the real property that is the subject
of this appeal was classified and assessed as land that
was part of a forest unit that was actively engaged in
the commercial growing of trees under a sound management
program such as to qualify its property for appraisal at
its present-use value, a value lower than the market
value established through lawful schedules established by
the Jackson County Board of County Commissioners . . . .
. . . .
Because of the pending appeals concerning [certain
other, unrelated real property located in Jackson County,
which the Commission concluded should not receive
present-use value classification for tax year 1997],
Cecil Dills, the Tax Assessor for Jackson County, sent a
letter to all of the owners of real property in Jackson
County . . . with property then in the present-use
classification. The letter to “Property Owner[s]”
without specific reference to the taxpayers herein, was
dated January 2, 1998 and was mailed, as is relevant to
this pending appeal, to taxpayers herein.
. . . .
The January 2, 1998 letter of the Tax Assessor
informed property owners and taxpayers of the review of
all properties then assessed at present-use value under
the requirements of N.C. Gen. Stat. § 105-296(j) in order
to verify that property in the classification continued
to meet the requirements for eligibility. The letter
further stated that the Tax Assessor did not have a
“forest management plan” for the property or that the
plan was not current. . . .
. . . .
The letter requested a copy of any plan then in
effect and informed the property owner that they [sic]
must be in compliance with the plan. . . . The letter
set a deadline of March 15, 1998 for submission of a
current, new, or updated plan. The letter further
informed the property owner that the failure to provide
the plan in a timely manner would result in the propertylosing its eligibility [for present-use value
classification] and that the deferred taxes would become
immediately due.
No notice of the statutory procedures for review and
the other remedies available to the taxpayers as to the
requirement of a “forest management plan” imposed by the
Tax Assessor and the consequences for failure to comply
was given to the taxpayers by the Tax Assessor and the
taxpayers did not request any review or remedy at that
time. The taxpayers did not request a review by the
Jackson County Board of Equalization and Review regarding
the present[-]use [] value [sic] classification of their
property in the year 1998. The taxpayers did not request
a review of the January 2, 1998, letters of the Tax
Assessor by the governing body of the taxing unit of the
County of Jackson, i.e., the Jackson County Board of
Commissioners, in the year 1998.
No further action was taken by the Tax Assessor or
the taxpayers until April 6, 1999, when a letter of same
date from the Tax Assessor was directed to the taxpayers,
with reference to the January, 1998 letter[], and once
again requesting a copy of the current forest management
plan and that it be provided within 30 day[]s of the date
of the letter. The letter further stated the
taxpayers['] failure to comply or submit a plan would
result in loss of eligibility and a roll back of deferred
taxes for the previous three years.
The taxpayers responded by letter dated May 12, 1999
. . . [which] stated that “a forester is currently in the
process of drafting a Forest Management Plan” with regard
to the property in question which would be submitted to
the Tax Assessor's office “no later than June 1, 1999.”
. . .
No further action was taken by the taxpayer[s] or
the Tax Assessor by July 1, 1999. On July 1, 1999 the
Tax Assessor made his determination the property had lost
its eligibility for present-use classification and
calculated the 1999 and deferred taxes owed. . . . By
letter dated July 2, 1999, the Tax Assessor informed the
taxpayers of his determination of loss of eligibility
[for present-use value classification] and the amount of
taxes due by reason thereof. . . .
Notice of the statutory procedures for review and
the other remedies available to the taxpayers for the
loss of eligibility determination and assessment of the
deferred taxes was not given to the taxpayers by the Tax
Assessor prior to or at the time of his actionshereinbefore set out. . . . The Jackson County Board of
Equalization and Review had convened on April 7, 1999 and
adjourned on May 11, 1999. Notices of the first meeting
and the adjournment date were published in the local
newspaper. . . .
The Jackson County Board of Commissioners by
Resolution dated March 4, 1999, delegated to the Board of
Equalization and Review, the authority to continue to
function following the formal adjournment of the County
Board each year for the purpose of exercising the
authority granted to the Board of Commissioners under
N.C. Gen. Stat. § 105-325 and amendments thereto. . . .
The taxpayers did not request a review by the
Jackson County Board of Equalization and Review regarding
the letter of loss of eligibility determination and
assessment of deferred taxes with regard to their
property in the year 1999. . . .
No new application was filed by the taxpayers for
[present] use value application of their property for the
tax year 2000 after the letter of the Tax Assessor on
July 2, 1999 stating their properties had lost
eligibility for [present] use value classification.
No further action was taken by the taxpayer until
April 3, 2000 when a fax from [taxpayers' counsel] was
sent to the Tax Assessor containing language that could
be part of a written forest management plan and which
referenced Charles H. Taylor, Registered Forester # 320,
and Member of Society of American Foresters. . . .
A Request for Hearing and Appeal to the Jackson
County Board of Equalization and Review, dated April 27,
2000, was made through [taxpayers' counsel] . . .
requesting that [the] removal of the property [from] the
present-use value classification in the year 1999 and the
process by which it was removed be reviewed and
overturned.
. . . .
A Supplemental Request for Hearing and Appeal before
the Board of Equalization and Review, dated June 15,
2000, was made through [taxpayers' counsel] . . .
requesting that the eligibility [for present-use value
classification] of the property under appeal be
determined for the year 2000, as well as for the years
1996-1999.
. . . .
A hearing was set and conducted by the Board of
Equalization and Review on July 10, 2000. During the
hearing, Forest Management Plans prepared by John
Rutland, III were presented. Mr. Rutland testified that
he was hired in April 2000, the plan was dated May 10,
2000, and that he finished it on or about the first of
May (2000). . . .
The Jackson County Board of Equalization and Review
issued a decision by Notice dated August 14, which denied
the taxpayers the present-use value classification on the
properties that are the subject of this appeal for the
year 2000 on the basis of the previous loss of
eligibility [for present-use value classification] and
the failure to file a new application and a timely forest
management plan. . . . The Board refused to consider the
actions taken by the Jackson County Tax Assessor in the
year 1999.
Notice of Appeal from the decision of the Jackson
County Board of Equalization and Review was filed with
the North Carolina Property Tax Commission by the
taxpayers through their counsel . . . on September 11,
2000 . . . .
Application, accompanied by the above-mentioned
Forest Management Plan prepared by John Rutland, III was
presented to the Tax Assessor for the year 2001 by the
taxpayers for the properties that are the subject of this
appeal and the properties were granted present-use value
classification beginning in the year 2001.
. . . .
By its final decision entered 5 June 2002, which contained
findings of fact consistent with the foregoing, the Commission
affirmed the 14 August 2000 decision of the Jackson County Board of
Equalization and Review (the County Board), in which the County
Board (1) refused to consider taxpayers' request for a hearing
regarding the removal of the subject properties from present-use
value classification for tax year 1999, and (2) denied present-use
value classification to the subject properties for tax year 2000. In so ruling, the Commission concluded as a matter of law, in
pertinent part, as follows:
. . . .
4. The County Assessor requested the Taxpayers to
provide written forest management plans to verify that
the properties continue to meet the sound management
requirement for present-use value taxation under the
forestland classification. The County Assessor correctly
deemed this information necessary in order to comply with
G.S. 105-296(j), and relevant to the definition of
forestland set forth in G.S. 105-277.2(2) and the
requirement for sound management set forth in G.S. 105-
277.2(6).
5. The County Assessor properly removed the subject
properties from present-use value assessment, forestry
classification, when the Taxpayers did not provide
information to show that the subject properties were part
of a forest unit actively engaged in the commercial
growing of trees under a sound management program for tax
year 1999.
6. The County Board properly denied Taxpayer's
[sic] request for present-use value assessment, forestry
classification, regarding the subject properties for tax
year 2000 since the properties previously lost
eligibility due to Taxpayers['] failure to submit timely
forest management plans and failure of the Taxpayers to
file new applications. The Taxpayers failed to provide
the necessary information to show that the subject
properties were part of a forest unit that is actively
engaged in the commercial growing of trees under a sound
management program as required by statute.
7. For tax year 1999, the 2000 County Board did not
have jurisdiction to consider Taxpayers' hearing and
appeal request since the request was not timely filed.
G.S. 105-322 directs that the county board of
equalization and review shall examine and review the
current year tax lists and the board shall hear
taxpayer's request to review the listing or appraisal of
the subject property for the current year.
. . . .
Taxpayers appeal from the Commission's final decision,
asserting that by allowing the county tax assessor to remove thesubject properties from present-use value classification for tax
year 1999 after taxpayers failed to timely submit the requested
written forest management plans, the Commission erroneously allowed
removal of the subject properties without proper notice and a
hearing, in violation of the North Carolina Machinery Act (N.C.
Gen. Stat. §§ 105-271 et. seq.) and the due process clauses of the
federal and state constitutions. Taxpayers further assign error to
the Commission's conclusion that taxpayers' failure to timely
submit a new application for present-use value classification
precluded consideration of the subject properties for present-use
value classification for tax year 2000. We disagree with each of
taxpayers' assertions.
At the outset, we note that under the standard of appellate
review of the Commission's decisions as set forth in N.C. Gen.
Stat. § 105-345.2(b), this Court “shall decide all relevant
questions of law, interpret constitutional and statutory
provisions, and determine the meaning and applicability of the
terms of any Commission action.” N.C. Gen. Stat. § 105-345.2(b)
(2001). This Court may affirm, reverse, declare void, remand, or
modify any Commission decision which is:
(1) In violation of constitutional provisions; or
(2) In excess of statutory authority or jurisdiction of
the Commission; or
(3) Made upon unlawful proceedings; or
(4) Affected by other errors of law; or
(5) Unsupported by competent, material and substantial
evidence in view of the entire record submitted; or
(6) Arbitrary or capricious.
Id. In making the foregoing determinations, we must review the
whole record. N.C. Gen. Stat. § 105-345.2(c) (2001). We arerequired under the whole record test to determine whether the
Commission's decision is supported by substantial evidence, and we
must review all questions of law de novo. In re Univ. for the
Study of Human Goodness & Creative Group Work, __ N.C. App. __, __,
582 S.E.2d 645, __ (2003). Because there is no factual dispute
between the parties here, our review of the instant appeal is
limited to the questions of law raised by taxpayer-appellants.
By their first assignment of error, taxpayers except to the
timing of the Jackson County tax assessor's removal of the subject
properties from present-use value classification, asserting that,
where the evidence shows the County Board adjourned on 11 May 1999,
the tax assessor was not authorized by statute to take this action
on 1 July 1999. In their brief, taxpayers argue that “while
N.C.G.S. [§] 105-296(j) requires review of parcels classified at
present-use value to verify the qualification for the
classification and allows the Assessor to 'require the owner of
classified property to submit any information needed by the
Assessor to verify that the property continues to qualify for
present-use value taxation', nothing in the General Statutes
purports to give the County Assessor the authority to remove
properties from the present-use value classification at the time he
purported to do so.”
Taxpayers correctly note that N.C. Gen. Stat. § 105-325(a)
provides in pertinent part:
(a) After the board of equalization and review has
finished its work and the changes it effected or ordered
have been entered on the abstracts and tax records . . .
the board of county commissioners shall not authorize anychanges to be made on the abstracts and tax records
except as follows:
. . . .
(6) Subject to the provisions of subdivisions (a)(6)a,
. . . to appraise or reappraise property when the
assessor reports to the board that, since
adjournment of the board of equalization and
review, facts have come to his attention that
render it advisable to raise or lower the appraisal
of some particular property of a given taxpayer in
the then current calendar year.
a. The power granted by this subdivision (a)(6)
shall not authorize appraisal or reappraisal
because of events or circumstances that have
taken place or arisen since the day as of
which property is to be listed.
. . . .
(b) The board of county commissioners may give the
assessor general authority to make any changes authorized
by subsection (a), above, except those permitted under
subdivision (a)(6), above.
. . . .
N.C. Gen. Stat. § 105-325(a) - (b) (2001) (emphasis added). In
their brief, taxpayers argue that “no change in the tax records
could be made with regard to the [subject properties] after the
completion of the [County Board's work] and its adjournment unless
done strictly in accordance with N.C.G.S. [§] 105-325,” and that
the tax assessor's removal of the subject properties from present-
use value classification after the County Board adjourned was not
in accordance with the statute.
Taxpayers also point out that the statute governing the tax
assessor's powers and duties provides that “[p]rior to the first
meeting of the board of equalization and review, the assessor may,
for good cause, change the appraisal of any property subject toassessment for the current year.” N.C. Gen. Stat. § 105-296(i)
(2001) (emphasis added). Taxpayers maintain that this statute did
not confer upon the tax assessor authority to remove the subject
properties from present-use value classification after adjournment
of the County Board.
We find no merit in taxpayers' assertions that the tax
assessor's removal of the subject properties from present-use value
classification on 1 July 1999 was prohibited by either N.C. Gen.
Stat. § 105-325 or N.C. Gen. Stat. § 105-296(i), because we
conclude from the statutes' plain language that each applies only
to limit the time in which a tax assessor may change the appraisal,
as opposed to classification, of real property. It is a well-
settled principle of statutory construction that “[w]ords in a
statute must be construed in accordance with their plain meaning
unless the statute provides an alternative meaning.” Kirkpatrick
v. Village Council, 138 N.C. App. 79, 86, 530 S.E.2d 338, 343
(2000). N.C. Gen. Stat. § 105-273(2) (2001) defines “appraisal” as
“both the true value of property and the process by which true
value is ascertained.” (emphasis added).
The tax assessor in the instant case did not change the
subject properties' true value for purposes of determining the
taxes owed thereon; he merely reclassified the subject properties
by removing them from the special present-use value classification
provided for forestland under N.C. Gen. Stat. §§ 105-277.2(2) and
-277.4(b) (2001). The tax assessor's action here did not in any
way raise or lower the subject properties' true value for taxpurposes, as evidenced by the deferred taxes _ representing the
“difference between the taxes due on the present-use basis and the
taxes . . . payable in the absence of this classification” _ which
became “immediately due and payable” upon this change in the
subject properties' classification. N.C. Gen. Stat. § 105-277.4(c)
(2001). Because the tax assessor's reclassification of the subject
properties on 1 July 1999 did not change the subject properties'
appraisal, we hold that neither N.C. Gen. Stat. § 105-325(a) nor §
105-296(i) precluded the tax assessor from properly removing the
subject properties from present-use value classification at that
time.
Taxpayers' reliance on Wolfenden v. Commissioners, 152 N.C.
81, 67 S.E. 319 (1910), in support of their argument here is
misplaced. Our Supreme Court in Wolfenden held that “the county
commissioners have no authority to raise the appraised value of
specific listed property after final adjournment of the county
board of equalization and review and the assessment and payment of
the taxes thereon.” In re Tire Service, 281 N.C. 293, 297, 188
S.E.2d 306, 309 (1972) (emphasis added). This holding is
inapposite to the instant case, which involves a reclassification
of real property from present-use value to fair market value
classification, rather than, as in Wolfenden, a change in the
subject properties' appraised fair market value.
Taxpayers' first assignment of error is overruled.
By their next assignment of error, taxpayers contend the
Commission erred by concluding that (1) removal of the subjectproperties from present-use value classification in 1999 without
proper notice and a hearing was proper under the applicable
statutes, and (2) taxpayers were required to submit a new
application for the subject properties to be considered for
present-use value classification in 2000. This assignment of error
is without merit.
N.C. Gen. Stat. §§ 105-277.2 through -277.7 set forth the
procedure by which a taxpayer may obtain present-use value
classification for certain types of real property. Pursuant to
N.C. Gen. Stat. § 105-277.4, real property which meets the
statutory definition of forestland “shall be eligible for taxation
on the basis of the value of the property in its present use if a
timely and proper application is filed with the assessor of the
county in which the property is located.” N.C. Gen. Stat. § 105-
277.4(a) (2001). The application shall contain any “relevant
information required by the assessor to properly appraise the
property at its present-use value.” Id. After the initial
application is filed, no new application is needed “unless the
property is transferred or becomes ineligible for use-value
appraisal because of a change in use or acreage.” Id.
Our General Assembly has defined “forestland” as “[l]and that
is a part of a forest unit that is actively engaged in the
commercial growing of trees under a sound management program. . .
. A forest unit may consist of more than one tract of forestland,
but . . . each tract must be under a sound management program.”
N.C. Gen. Stat. § 105-277.2(2) (2001). A “sound managementprogram” is “[a] program of production designed to obtain the
greatest net return from the land consistent with its conservation
and long-term improvement.” N.C. Gen. Stat. § 105-277.2(6) (2001).
Under the version of the statute in effect at the times
pertinent to this appeal, the county tax assessor must periodically
review parcels receiving present-use value classification, such
that the assessor “shall review the eligibility of all parcels
classified for taxation at present-use value in an eight-year
period.” N.C. Gen. Stat. § 105-296(j) (1999). In reviewing a
parcel's eligibility, the assessor “may require the owner of
classified property to submit any information needed by the
assessor to verify that the property continues to qualify for
present-use value taxation.” Id.
(See footnote 1)
“Written notice of a change in
assessment shall be given to the taxpayer at his last known address
prior to the first meeting of the board of equalization and
review.” N.C. Gen. Stat. § 105-296(i) (2001).
Taxpayers assert in their brief that they “believe that the
North Carolina Statutes should be construed to require notice andan opportunity to be heard” before the tax assessor could properly
remove the subject properties from present-use value
classification. After reviewing the whole record, we conclude that
taxpayers received sufficient notice of the assessor's intent to
reclassify the subject properties in 1999 if taxpayers did not
submit the requested forest management plan. The parties
stipulated that the initial applications for present-use value
classification for the subject properties, filed in 1984, did not
include forest management plans. It appears from the record that
the subject properties' eligibility was never reviewed by the tax
assessor between 1984 and 1998. By letter dated 2 January 1998,
the tax assessor notified taxpayers that (1) the subject
properties' eligibility for present-use value classification was
being reviewed; (2) the tax assessor did not have forest management
plans for the subject properties; and (3) “[i]f no [forest
management plans are] submitted by [15 March 1998], your
propert[ies] will lose eligibility and will result in the deferred
taxes becoming due immediately for the previous three years.” When
taxpayers failed to either provide the requested forest management
plans or request a hearing before the 1998 County Board, the tax
assessor took no further action until 6 April 1999, when, by letter
addressed to taxpayer Taylor one day prior to the first meeting of
the 1999 County Board, the assessor stated “we have not received a
Forest Management Plan on your property and therefore assume you do
not wish to continue in the present use value program. . . . If
you have an updated management plan, you need to send us a Copywithin thirty days . . . . Failure to comply with the statutes
concerning use value assessment will result in losing eligibility
and a roll back of deferred taxes for the past three years.”
Taxpayers responded by letter dated 12 May 1999 stating that a
forest management plan was being prepared and would be provided to
the tax assessor “no later than June 1, 1999,” but none had been
provided as of 2 July 1999, when the tax assessor removed the
subject properties from present-use value classification.
We hold that these two letters from the tax assessor
constituted sufficient notice that the subject properties were
being reviewed, and that in order to retain their present-use value
classification, taxpayers needed to submit a forest management plan
for each. Taxpayers were obviously aware of both the review and
the necessity of providing forest management plans, as evidenced by
their 12 May 1999 letter to the tax assessor promising that forest
management plans would be submitted no later than 1 June 1999.
Taxpayers can point to no provision in Chapter 105 of our General
Statutes requiring notice in a different form or fashion.
Moreover, we conclude that taxpayers, given sufficient notice
of the subject properties' review by the tax assessor, had ample
opportunity, as required by statute, to request a hearing before
reclassification of the subject properties in 1999. N.C. Gen.
Stat. § 105-322(g)(2) provides in pertinent part as follows:
On request, the board of equalization and review shall
hear any taxpayer who owns or controls property taxable
in the county with respect to the listing or appraisal of
the taxpayer's property or the property of others.
a. A request for a hearing under this subdivision (g)(2)
shall be made in writing to or by personal appearance
before the board prior to its adjournment. . . .
b. Taxpayers may file separate or joint requests for
hearings under the provisions of this subdivision (g)(2)
at their election.
. . . .
N.C. Gen. Stat. § 105-322(g)(2) (2001) (emphasis added). In the
instant case, the 1999 county board of equalization and review
first met on 7 April 1999, and notice of same was properly
published in the local newspaper. However, taxpayers never
requested a hearing before the County Board until 27 April 2000,
over a year after they were notified of the subject properties'
pending removal from present-use value classification and almost
ten months after the subject properties were reclassified. While
appellee Jackson County concedes that the tax assessor never gave
taxpayers notice of the statutory procedures for review provided in
Chapter 105, taxpayers have failed to persuade this Court that the
statutory scheme required the tax assessor to do so absent a timely
request by taxpayers. Taxpayers' reliance on In re Appeal of
Whiteside Estates, Inc., 136 N.C. App. 360, 525 S.E.2d 196, cert.
denied, 351 N.C. 473, 543 S.E.2d 511 (2000), for this proposition
is misplaced, as the taxpayer in Whiteside Estates received a
hearing before the board of equalization and review upon his timely
request of same. Taxpayers in our case made no such request for a
hearing prior to reclassification of the subject properties in
1999, despite ample opportunity to do so. Having concluded that the Commission did not err in affirming
the tax assessor's removal of the subject properties from present-
use value classification in 1999, we further hold that the
Commission correctly concluded taxpayers were required, pursuant to
N.C. Gen. Stat. § 105-277.4(a), to submit a new application if they
wished the subject properties to be considered for present-use
value classification in 2000. Taxpayers' failure to timely submit
the requested forest management plans frustrated the tax assessor's
ability to determine whether the subject properties were being
managed under a “sound management program,” which our Legislature
has required in order to “disqualify [] weekend or hobby farmer[s']
or speculator[s']” land from present-use value classification. W.
R. Co. v. Property Tax Comm., 48 N.C. App. 245, 257, 269 S.E.2d
636, 643 (1980), disc. review denied, 301 N.C. 727, 276 S.E.2d 287-
88 (1981). We conclude that, in the absence of a forest management
plan, the tax assessor could reasonably conclude that a “change in
use” under N.C. Gen. Stat. § 105-277.4(a) had occurred, thus
requiring taxpayers to submit a new application before the subject
properties could be considered for reinstatement into the present-
use value classification in 2000.
Taxpayers' second assignment of error is overruled.
By their final assignment of error, taxpayers assert the
Commission erred in failing to determine that removal of the
subject properties from present-use value classification for 1999
and 2000 deprived taxpayers of due process of law in violation of
the federal and state constitutions. “The fundamental premise ofprocedural due process protection is notice and the opportunity to
be heard.” Peace v. Employment Sec. Comm'n, 349 N.C. 315, 322, 507
S.E.2d 272, 278 (1998); see also Cleveland Bd. of Educ. v
Loudermill, 470 U.S. 532, 542, 84 L. Ed. 2d 494, 503, 105 S. Ct.
1487 (1985). In light of our conclusions above that (1) taxpayers
received sufficient notice that the subject properties would be
removed from present-use value classification absent submission of
forest management plans, and (2) taxpayers had ample opportunity,
pursuant to the relevant provisions of Chapter 105 of our General
Statutes, to have their objections heard by the County Board or the
Board of Commissioners had they requested such a hearing, we hold
that taxpayers have suffered no deprivation of their due process
rights, under either our state or federal constitutions, by the
subject properties' reclassification for tax years 1999 and 2000.
Affirmed.
Judges TIMMONS-GOODSON and STEELMAN concur.
Report per Rule 30(e).
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