Dolan v. Land

GANT, Justice,

dissenting.

In order to properly evaluate this case, we must carefully examine two factors. First, we must look at the constitutional provisions relating to the tax assessment and the statutes enacted pursuant thereto. Second, we must scrutinize the method of appraisal utilized herein by the Fayette County Property Evaluation Administrator.

The basic sections of the Constitution of Kentucky relating to property taxes have always been § 171, § 172, and § 174. In 1969, the voters ratified § 172A, which mandated that the General Assembly shall provide for the assessment of agricultural and horticultural land according to its value for such use. No specific formula for such assessment was included in the amendment, but left to the General Assembly. Following its constitutional direction, the General Assembly enacted, among other statutes, KRS 132.010(9), (10), and KRS 132.450(2)(a). KRS 132.010(9) defined agricultural land as any tract of land containing ten or more contiguous acres which was used for farming, livestock or poultry, or which was under any state or federal agricultural program, with a prescribed income formula. Horticultural land was defined in KRS 132.010(10) as a tract of land of five or more contiguous acres used in the production of fruits, nuts, vegetables, flowers or ornamental plants, which produce a specified annual gross or per-acre income. Both these sections excluded from the assessment the residences on the land.

*689KRS 132.450(2)(a) related further to the residential exception from assessment for agricultural and horticultural purposes, providing that the land used by the residence, lawns, driveways, flower gardens, swimming pools, etc. should be excluded when assessing farm land; and that the acreage underlying farm buildings, greenhouses, ponds, lakes, streams, irrigation systems, etc. should be included when assessing the land.

We next turn to the method of assessment utilized by Michael Dolan, Fayette County PVA, who is acknowledged as an expert in his field of appraisal and who is personally familiar with each farm in Fa-yette County. Mr. Dolan first obtained the Fayette soil survey maps and books from the U.S. Soil Conservation Service (SCS). These contain a complete analysis of every farm in the county according to soil type and slope. The information, in actuality, relates to which crops can be best planted in each area and the suggested rotation in planting of these crops on each farm, or the rotation between crops and pasture. From the College of Agriculture at the University of Kentucky, Dolan obtained all pertinent data relating to crops grown in Fayette County and the type of soil and slope best suited for each. These records included cost of planting and return, or yield, on each crop.

Armed with this information, with the plats, photographs and data in his own office, Dolan dispatched field appraisers, who personally viewed each tract in the county. They verified the accuracy of the SCS surveys on each farm and measured and appraised each residence separately.

Again utilizing the combined data thus gleaned and relying upon his own expertise, Dolan divided all the farms in the county into four general categories and, utilizing a formula based upon a capitalization of 10½% expected return on investment, arrived at a per-acre evaluation on each farm. To that valuation, he added the value of tobacco for each farm to which a tobacco base had been allotted, if any, and the value of any residence and any appurtenances thereto, and arrived at an assessed value for each farm in Fayette County.

When the method utilized in Fayette County is thoughtfully compared with that in other counties, it is clear that it is an excellent analysis and far exceeds the windshield type which has been approved in many instances. The only failure encountered in the method utilized herein was the failure to separately appraise such improvements as tobacco barns, stables, horse barns, silos, hay barns, equipment housing, etc. Although the statutes relating to the assessment required that the land occupied by such improvements be included in the acreage, it did not mandate exclusion of the improvements themselves. It is obvious that farm land with improvements is more valuable than farm land without. I would affirm that portion of the lower court, and no other.

The obvious purpose of section 172A is to encourage perpetuation of property used for agricultural and horticultural purposes and to provide that it be so assessed, and not valued at some speculative future potential use for commercial or subdivision purposes. That this was accomplished herein was clearly verified by one of the appellees who testified that his farm 10 or 12 miles out of town was assessed at the same value as one adjoining the developed area. This equality was a reason for complimenting the PVA, not for chastising him, as it is exactly what section 172A is all about.

The lower court, in declaring KRS 132-010(9), (10) and KRS 132.450(2)(a) to be unconstitutional, stated that section 172A was self-executing. This is erroneous. Although it is self-executing substantively, it is not so procedurally. Indeed, by its very wording, the procedural aspects are vested in the General Assembly. See Kentucky Board of Tax Appeals v. Gess, Ky., 534 S.W.2d 247, 250 (1976); Miller v. Robertson, 306 Ky. 653, 208 S.W.2d 977 (1948); Shipp v. Rodes, 196 Ky. 523, 245 S.W. 157 (1922); Gay v. Brent, 166 Ky. 833, 179 S.W. 1051 (1915).

*690The lower court and majority opinion offer no remedy to their imagined inequities, but merely cast the PVAs adrift on the sea of quandary, without rudder or helmsmen. I would affirm the lower court in its finding that the agricultural and horticultural improvements must be included in the assessment, but would reverse on all other issues. I would remand for an adjustment which would include these improvements and, once made, utilize the adjusted assessment for the year 1981, and not the assessment for 1980 as mandated by the lower court and the majority opinion.

AKER, J., joins in this dissent.