City of Quincy v. Commissioner of Revenue (November 14, 2007)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


CITY OF QUINCY				v.	COMMISSIONER OF REVENUE


Docket No.  C282413				Promulgated:
		  					November 14, 2007


	This is an appeal under the formal procedure pursuant to G.L. c. 58, § 14 and c. 58A, § 7, from valuations made by the Commissioner of Revenue ("Commissioner"), under G.L. c. 58, §§ 13-17, of land located in the City of Quincy that is owned by the Commonwealth of Massachusetts ("Commonwealth") and is part of the Blue Hills Reservation.  The purpose of the valuation was to determine the payment in lieu of taxes due to the City of Quincy by the Commonwealth under G.L. c. 58, § 13.  The Commissioner's valuation was made as of January 1, 2005.
	Commissioner Rose heard the appeal and was joined by Commissioners Scharaffa, Gorton, and Egan in a decision for the appellee.  Chairman Hammond took no part in the deliberation or decision of this appeal.
	These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.  

Robert Quinn, Esq., for the appellant.

	Thomas W. Hammond, Jr., Esq., Mirielle T. Eastman, Esq. and Andrew P. O'Meara, Esq. for the appellee.  



FINDINGS OF FACT AND REPORT

On the basis of a Statement of Agreed Facts and accompanying Exhibits, the Appellate Tax Board ("Board") made the following findings of fact.
	In 1893, the Metropolitan Parks Commission acquired, on behalf of the Commonwealth, the majority of the land that makes up the Blue Hills Reservation in the City of Quincy.  The Commonwealth, through a series of state agencies, has maintained ownership of the land.  The Commonwealth has also, from time to time, added parcels to the Blue Hills Reservation.  The Blue Hills Reservation currently consists of property in Quincy and the Towns of Milton, Braintree, Randolph and Canton ("Blue Hills Communities").  
In accordance with G. L. c. 58, § 13, the Commissioner of Revenue ("Commissioner") is required to determine the fair cash value of certain state owned land ("SOL") every four years.  The Commissioner's valuation is used to determine the Commonwealth's payments in lieu of taxes to municipalities in which SOL is located.  As a result of special legislation, Acts and Resolves of 2004, c. 352, § 23, the Commissioner was required to include the Blue Hills Reservation in SOL eligible for reimbursement, beginning with the valuation made as of January 1, 2005.  It is this valuation which is the subject of the present appeal.
By notice dated September 27, 2004, the Commissioner's Bureau of Local Assessment ("BLA") notified the assessors' offices of the Blue Hills Communities, including the Assessors of Quincy ("Quincy"), that it needed certain data and documentation to determine the communities' eligibility for reimbursement.  Specifically, the BLA requested the following information for the Blue Hills Reservation properties:  1) the current fiscal year property record cards for the properties; 2) deeds or Orders of Taking by which the Commonwealth acquired the properties; 3) a copy of the commitment book entries for the last year that the properties were taxed; and, 4) the assessors' maps marked with the location of the properties.  
On October 18, 2004, the BLA sent a notice to Quincy and the assessors of the other Blue Hills Communities that reiterated the need for the information requested in the September 27, 2004 notice and informed the Blue Hills Communities that the deadline for data submission was April 1, 2005.  Subsequently, the BLA extended the deadline for data submission to May 1, 2005.  
By notice dated May 17, 2005, the BLA informed Quincy that it had not yet received any of the requested documentation concerning the Blue Hills Reservation property in Quincy.  On June 1, 2005, the Commissioner notified Quincy of his proposed valuation for the Blue Hills Reservation property in Quincy as of January 1, 2005, which the Commissioner later revised by notice dated July 19, 2005.  On August 9, 2005, Quincy timely filed an appeal from the Commissioner's July 19, 2005 determination pursuant to G.L. c. 58, § 14.  Based on these facts, the Board found and ruled that it had jurisdiction over this appeal.
	In accordance with the SOL program for 2005, the BLA determined the value of SOL in 293 communities across the Commonwealth, including Quincy.  Pursuant to the Commissioner's guidelines, "land will be valued as vacant based on the requirements of local zoning laws of the municipality, predominant land use in the absence of zoning laws or on commonly accepted based lots in the community."  See Guidelines for Development of a Minimum Reassessment Program (revised January 2005), p. 11.  On the basis of local zoning requirements or predominant land use, each SOL site was categorized and valued as follows:  primary front lots (also referred to as "prime lots"), which are readily developable; rear/excess land, which is potentially developable; and undevelopable/wet land, which is unbuildable due to physical condition or governmental restrictions and land that is a "water body," such as lakes and ponds.  Id. at p. 12.  Primary lots are valued and reimbursed to the communities at a higher rate than land categorized as rear/excess land or undevelopable wetland.
	According to Quincy's zoning by-laws, a majority of the SOL in Blue Hills Reservation was zoned "Open Space."  Open Space zoning in Quincy is defined as "[t]hose areas dedicated or used for public or semipublic uses such as parks and recreation areas, cemeteries and open-space reservations."  Specifically prohibited uses of Open Space land in Quincy include residential, institutional, educational, governmental, business or industrial uses.  Therefore, the Commissioner determined that the Blue Hills Reservation SOL in Quincy was undevelopable and not entitled to primary lot classification.
	At the same time, the Commissioner granted primary front-lot status to land zoned open space in several other communities.  Quincy argued that there is no justifiable reason for the Commissioner to treat open space zoning in one community differently from open space zoning in another community.   Accordingly, Quincy argued that the Commissioner's valuation methodology was arbitrary and capricious.  
The fundamental flaw with Quincy's argument, however, is that it assumes that the zoning by-laws are the same in all communities.  The Board found, however, that local zoning is not uniform among the Blue Hills Reservation communities.  For example, in the towns of Braintree and Canton, the Commissioner granted primary front-lot status to SOL zoned "Open Space and Conservancy District" and "Parkland, Recreation, and Open Space," respectively.  Review of the respective town's zoning by-laws showed that development, albeit limited, is allowed in these areas.  In contrast, Quincy's by-laws specifically preclude any development on "open-space" zoned land.  Therefore, the Board found that Quincy's argument was unsupported and flawed.  
Quincy also argued that the Commissioner's methodology is arbitrary and capricious because it ignores the impact of constitutional and statutory provisions that regulate the use of its SOL.  Pursuant to Article 97 of the Article of Amendments to the Massachusetts Constitution ("Article 97"), SOL acquired for use as parklands and open space may not be used for other purposes or disposed of unless authorized by the Legislature.  Therefore, Quincy argued that Blue Hills Reservation land in other municipalities should not have been afforded prime front-lot status.  Quincy also noted that G.L. c. 40A, § 3, prohibits municipalities from regulating certain uses, including child-care facilities.  Therefore, Quincy argued that when the provisions of Article 97 and G.L. c. 40A, § 3 are considered, Quincy's Open Space development restrictions are substantially similar to Open Space restrictions in other Blue Hills Reservation communities.
However, as the Commissioner argued, the SOL program is designed to provide an approximation of the value of SOL in 293 communities across the Commonwealth.  It is designed to provide uniformity and consistency in the context of a mass appraisal approach to value.  The Commissioner's valuation methodology valued land as if there were no state restrictions on, or regulation of, development and looked exclusively to local zoning regulations.  This approach allowed communities to exercise discretion in local zoning matters and maximized potential reimbursement from the Commonwealth, while affording a workable standard by which the Commissioner could value SOL in all affected communities.  
Based on the evidence presented in this appeal, the Board found that the Commissioner's methodology of basing valuation on each municipality's local zoning can be applied equally to each town with eligible SOL and will produce values reasonably approximate to fair cash value.  Accordingly, the Board found and ruled that the Commissioner's valuation procedure was reasonably designed to achieve the purposes of G.L. c. 58, § 13 and was not arbitrary or capricious.  The Board further found and ruled that the Commissioner properly implemented this method in valuing eligible SOL in Quincy at issue in this appeal.  Accordingly, the Board found and ruled that Quincy failed to meet its burden of proving that the Commissioner's valuation of Quincy's SOL for the year at issue did not comply with § 13.
For these reasons, the Board issued a decision for the appellee in this appeal.

OPINION
	Pursuant to G.L. c. 58, § 13, "the Commissioner shall . . . determine as of January first the fair cash value as hereinafter provided of all land in every town owned by the commonwealth" for payments in lieu of taxes in accordance with G.L. c. 58, §§ 13-17.  In Board of Assessors of Sandwich v. Commissioner of Revenue, 393 Mass. 580 (1984) ("Sandwich I"), the Supreme Judicial Court held that the Board's scope of review of the Commissioner's valuations under G.L. c. 58, § 13 is narrower than taxpayer appeals of property tax assessments.  Unlike the typical property tax appeal to this Board, where the Board "hears testimony from all parties and forms an independent judgment of value based on all the evidence received," the court held that under § 13, the Board "should perform a more traditional appellate function."  Id. at 586.  In Sandwich I, the court held that the Board's role is restricted to "determin[ing] whether the method used by the Commissioner is reasonably designed to achieve the statute's objectives, and whether the method was properly implemented in the particular case."  Id. at 588.  Further, "[i]n determining whether the Commissioner complied with the statute, the board's task is not to substitute its own judgment as to the most appropriate method of valuation."  Id.  
The objective of § 13, to reimburse municipalities with SOL for lost tax revenues, does not require the Commissioner to develop a methodology by which fair cash values are precisely determined; rather, § 13 is intended to "provide [] towns with only an approximate reimbursement of lost taxes."  Id.  Accordingly, § 13 provides that the Commissioner's determination of value "shall be in such detail as to lots, subdivisions or acreage as the Commissioner may deem necessary," underscoring that, under § 13, "'full and fair cash values can only be approximated.'"  Id. at 587 (quoting Macioci v. Commissioner of Revenue, 386 Mass. 752, 761 (1982)).  Further, "in the context of a Statewide valuation program, in light of the limited resources of the Commissioner, it may be necessary to 'conced[e] perfection in result, in favor of a process which is orderly, expeditious, and reliable.'"  Id. at 588 (quoting Newton v. Commissioner of Revenue, 384 Mass. 115, 122 (1981)).  
Because the court recognized that § 13 is meant to provide municipalities with an approximate reimbursement of lost taxes through an expeditious, albeit imperfect, procedure, the court specified that "the board should determine whether the Commissioner has adopted a procedure which (1) can be applied equally to each town where there are eligible State owned lands and (2) will produce values reasonably approximate to fair cash value."  Sandwich I, 388 Mass. at 588.  "If the procedure adopted by the Commissioner is not arbitrary or capricious, it should be upheld" by the Board.  Id.  If the procedure is upheld, the Board must then determine if the Commissioner properly applied his methodology to Quincy.  Id. at 588-89.  
The burden of proof is upon the appellant to show that the Commissioner's valuation methodology was arbitrary and capricious and/or that the Commissioner did not properly apply the methodology to the eligible state-owned land in Quincy.  Commissioner of Revenue v. Board of Assessors of Sandwich, 405 Mass. 307, 312 (1989) ("Sandwich II"); see Sandwich I, 393 Mass. at 588; Schlaiker v. Board of Assessors of Great Barrington, 365 Mass. 243, 245 (1974).  The venerable and "fundamental rule as to burden of proof is, that whenever the existence of any fact is necessary in order that a party may make out [its] case . . . , the burden is on such party to show the existence of such fact."  Willet v. Rich, 142 Mass. 356, 357 (1886); Town of Boylston v. Commissioner of Revenue and others, Mass. ATB Findings of Fact 2004-278, 313.  
On the basis of the evidence of record in this appeal, the Board ruled that Quincy failed to meet its burden.  Pursuant to § 13, the Commissioner is required to value all SOL within the Commonwealth every four years.  To accomplish this substantial task, the Commissioner has issued guidelines which clearly delineate how such land will be valued.  The value classifications are based primarily on consistency in application, while still affording cities and towns the opportunity to classify land as they so choose.  Pursuant to the Commissioner's guidelines, land is valued according to each community's zoning provisions.  Because local zoning ordinances differ, property zoned as "Open Space" in Quincy is subject to different, in this case more stringent, development restrictions than property zoned "Open Space" in other communities.  It is the restrictions contained in the community's zoning ordinance, and not the title of the particular zoning classification, that formed the basis of the Commissioner's valuation
Based on these findings of facts, the Board found and ruled that the Commissioner's valuation procedure could be applied equally to each town where there are eligible state-owned lands and that the procedure produced values reasonably approximate to fair cash value.  Accordingly, the Board found and ruled that the Commissioner's valuation procedure was reasonable designed to achieve the purposes of § 13 and was not arbitrary or capricious.   Further, the Board found and ruled that Quincy did not meet its burden of proving that the Commissioner failed to follow his own valuation methodology.  
The Board, therefore, ruled that Quincy failed to meet its burden of proving that the Commissioner's valuation of Quincy's SOL, which is the subject of this appeal, did not comply with § 13. 
On this basis, the Board decided this appeal for the appellee.

						APPELLATE TAX BOARD



					By:_______________________________
				 	          James D. Rose, Commissioner

A true copy,

Attest:					____
 		Clerk of the Board

ATB 2007-1244