Garner v. Polk County Assessor ( 2012 )

IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
LAREN H. GARNER )
and PATRICIA D. GARNER, )
)
Plaintiffs, ) TC-MD 111166N
)
v. )
)
POLK COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiffs appeal the disqualification of 17.00 acres of property identified as Account
306887 (subject property) from small tract forestland special assessment for the 2011-12 tax
year. A trial was held in the Tax Courtroom, Salem, Oregon on March 7, 2012. Plaintiff
Patricia D. Garner (Garner) appeared and testified on behalf of Plaintiffs. Douglas Schmidt
(Schmidt), Polk County Assessor, appeared and testified on behalf of Defendant. Plaintiff‟s
Exhibits I through IX were offered and received without objection. Defendant‟s Exhibits A1
through A29 and B1 through B9 were offered and received without objection.
I. STATEMENT OF FACTS
Garner and Schmidt both testified that Plaintiffs initially applied for and were granted
forestland special assessment for the subject property in 2002. (See Def‟s Ex A at 5-11.)
Schmidt testified that Plaintiffs included a written forest management plan with their application
for forestland special assessment in 2002. (See id. at 8-9.) The “Forest land Management Plan”
states that “Doug Fir [would be planted] in higher elevation[s] with good drainage. Valley pine
to be planted in the lower, wetter areas.” (Id. at 9.) The “[p]lanting completion date” is stated as
“01-2003.” (Id.) Garner testified that Plaintiffs do not have a forest management plan.
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DECISION TC-MD 111166N 1
Garner testified that, in 2003, Plaintiffs planted Doug Fir on approximately four to five
acres of the subject property. She testified that, at that time, Plaintiffs observed that a 10 to 12-
acre field portion of the subject property had poor drainage and held water for about seven
months of the year. Garner testified that Douglas Fir trees planted in that area were not able to
survive due to the excessive water. On March 30, 2004, Plaintiffs filed for Small Tract
Forestland special assessment for the subject property and an adjacent 4.85-acre parcel identified
as Account 565616. (Def‟s Ex A at 12.)
On May 14, 2004, Defendant sent a letter to Plaintiffs stating that the subject property
“failed to meet the requirements for Forestland Deferral[,]” citing specifically, “a burned stand of
pines and dead and dying noble fir trees dispersed throughout the forested area.” (Def‟s Ex A at
13.) Schmidt testified that, in response to Defendant‟s May 14, 2004, letter, Plaintiffs indicated
that they would be contacting the Oregon Department of Fish and Wildlife (ODFW) regarding
the possibility of special assessment for wildlife habitat conservation. (See id. at 1, 14.) Garner
testified that, in 2004, Plaintiffs contacted ODWF regarding the “WHIP (Wildlife Habitat
Incentive Program).” (See Ptfs‟ Ltr at 1, Feb 22, 2012.) She testified that Nancy Taylor
(Taylor), ODFW, visited the subject property, provided Plaintiffs with additional paperwork, and
told Plaintiffs that the subject property appeared to qualify for “WHIP.” Garner testified that
Taylor had agreed to contact Defendant and report that the subject property qualified for the
program. Garner and Schmidt both testified that Defendant was never contacted by Taylor or
ODFW and agreed that ODWF, apparently, “dropped the ball.”1
Garner testified that, in 2006, Plaintiffs began an inquiry into whether the subject
property might qualify for the Conservation Reserve Enhancement Program (CREP) with the
1
Schmidt reported that Defendant “contact[ed] ODFW in 2005, 2006, 2007 about acceptance into WLH
and [did] not get[] any answer from ODFW[.]” (Def‟s Ex A-1.)
DECISION TC-MD 111166N 2
Farm Service Agency (FSA) and Natural Resource Conservation Service (NRCS), US
Department of Agriculture. She testified that Plaintiffs began working with Michael Ahr (Ahr)
of NRCS and were “told not to plant anything in the area because this may not go alon[g] with
their planting plan.” (See Ptfs‟ Ltr at 1, Feb 22, 2012.) Garner testified that a wetland
determination was completed for the subject property in 2007. (See Ptfs‟ Ex I.) Schmidt noted
that, of the inventoried portions of the subject property, none were classified as “wetlands”;
rather, the inventoried portions were classified as “Non-Wetland,” “Farmed Wetlands Pasture,”
and “Prior Converted cropland.” (See id.) Schmidt testified that each of those classifications
allow farming. (See id.) He testified that there are species of trees that can be planted in wet
areas and that Defendant previously recommended Plaintiffs contact the Oregon Department of
Forestry.
Garner testified that, in 2008, Plaintiffs spoke with another ODFW biologist, Ann
Kreager, who outlined additional requirements that Plaintiffs would have to meet in order to
qualify for WHIP. Garner testified that it would be very costly to meet the requirements and, as
a result, Plaintiffs elected not to pursue participation in WHIP; Plaintiffs notified Defendant of
that decision. (Def‟s Ex A at 16.) On November 20, 2008, Defendant sent a letter to Plaintiffs
referencing an agreement between the parties that Plaintiffs would “be planting trees on part of
the property this winter [2008,]” and that Defendant would inspect the subject property the
following year, at which time the parties would “agree to a 2 to 3 year plan to have the whole
property planted in trees.” (Id.) Defendant‟s November 20, 2008, letter warned that, “[i]f the
[subject] property does not meet the proper stocking requirements of the new plan, the special
assessment could be removed and back taxes collected.” (Id.) Garner testified that, in 2009,
Plaintiffs “planted a three acre parcel [of the subject property] and planted fill in trees in the
DECISION TC-MD 111166N 3
previous planting as well.” (Ptfs‟ Ltr at 1, Feb 22, 2012.) She testified that, in 2009, Laren
Garner became ill, so Plaintiffs‟ son helped complete the 2009 planting. (See Ptfs‟ Ex IX.)
Defendant inspected the subject property again in July 2010, and determined that
Plaintiffs “failed to meet the requirements for Forestland and Small Tract Forestland Special
Assessment.” (Def‟s Ex A at 18.) At that time, Schmidt stated he would “re-inspect [the
subject] property in 2011. If the planting, or replanting has not occurred, the acreage involved of
approximately 25 acres will be disqualified from Forestland Special Assessment and Small Tract
Forestland Special Assessment and the back taxes will be added to the next tax roll.” (Id.)
Garner testified that, on September 8, 2010, Plaintiffs received notification “that the FSA
had determined [Plaintiffs‟] eligibility for the CREP program.” (See Ptfs‟ Ltr at 2, Feb 22, 2012;
Ptfs‟ Ex II.) On October 1, 2010, Plaintiffs “signed a CRP-2C offering 10.0 acres [of the subject
property] for signup in CREP under the conservation practice CP-30, Marginal Pastureland
Wetland Buffer.” (Ptfs‟ Ex II.) Subsequently, Plaintiffs waited for a “conservation plan and
planting specifications” from the NRCS. (See id.) Garner testified that, in July 2011, Defendant
contacted Plaintiffs to inquire whether the conservation plan had been provided by the NRCS; it
had not. (See Ptfs‟ Ltr at 2, Feb 22, 2012.) On August 2, 2011, Defendant disqualified 17 acres
of the subject property from Small Tract Forestland special assessment. (Id.; Def‟s Ex A at 24.)
As of the date of trial, Plaintiffs had received the CREP requirements and planting plan,
which stated a “Project Start” of March 2012. (See Ptfs‟ Ex VII.) Garner testified that the
planting plan includes many trees. Schmidt testified that CREP is a separate program from
forestland special assessment. He testified that the purpose of CREP is soil stabilization and
habitat enhancement. Schmidt testified that the subject property may qualify for forestland
special assessment in future tax years under Plaintiffs‟ CREP plan, but that is not yet clear.
DECISION TC-MD 111166N 4
Garner testified that she spoke with Schmidt in December 2011, regarding the possibility
of qualifying the subject property for the farm use special assessment program. (See Ptfs‟ Ltr at
3, Feb 22, 2012.) She testified that, based on that conversation, she understood that, to qualify
for farm use special assessment, Plaintiffs would need “15 cows or 75 goats on 15 acres to
qualify for farm deferral.” (See id.) Garner testified that it was too costly for Plaintiffs to
comply with those requirements. She testified that she did not understand that Plaintiffs could
avoid paying back taxes if they qualified for a different special assessment program within 30
days of the disqualification; Plaintiffs would have tried to establish goat farming on the subject
property. Schmidt testified that the subject property is located within the exclusive farm use
zone and, to qualify for farm use special assessment, need only meet the requirement of “farm
use.”2
Schmidt testified that it has previously been Defendant‟s policy not to disqualify
properties that do not meet the requirements of farm or forestland special assessment while the
property owner is seeking to qualify for a different special assessment program. He testified
that, with respect to the subject property, Defendant has waited for ten years as Plaintiffs have
sought to qualify for various special assessment programs and, on several occasions, agreed to
plant trees in compliance with forestland special assessment requirements. Schmidt testified
that, despite Plaintiffs‟ numerous agreements with Defendant to either meet the requirements of
forestland special assessment or to qualify for a different special assessment program, neither
had occurred as of August 2011, so Defendant disqualified the subject property. Garner testified
that Plaintiffs have been working for ten years to “get something going” on the subject property
2
Garner testified that she read a statute indicating that the subject property was required to meet income
requirements for five years prior to qualifying for farm use special assessment. Schmidt testified that the income
requirement is applicable to properties located in non-exclusive farm use zones, not the subject property.
DECISION TC-MD 111166N 5
and that she regrets that it has taken so long. She testified that, although the disqualified portion
of the subject property is not planted with trees, Plaintiffs‟ request relief from the back taxes
imposed because of the hardship that back taxes would impose on Plaintiffs.
II. ANALYSIS
“ „Forestland‟ means land in western Oregon that is being held or used for the
predominant purpose of growing and harvesting trees of a marketable species and
has been designated as forestland or land in western Oregon, the highest and best
use of which is the growing and harvesting of such trees.”
ORS 321.257(2); see ORS 321.700(6).3 “The county assessor shall disqualify land as small tract
forestland upon: * * * [d]iscovery by the assessor that the land is no longer forestland[.]”
ORS 321.716(1)(b). Following disqualification from Western Oregon forestland special
assessment, “an additional tax shall be added to the tax extended against the land on the next
assessment and tax roll[.]” ORS 308A.703(2); see ORS 308A.703(1)(c).
Plaintiffs appeal Defendant‟s disqualification of the subject property from forestland
special assessment for the 2011-12 tax year. Based upon personal hardship, Plaintiffs also
contest the imposition of back taxes associated with disqualification. Plaintiffs have the burden
of proof and must establish their case by a preponderance of the evidence. ORS 305.427. A
“[p]reponderance of the evidence means the greater weight of evidence, the more convincing
evidence.” Feves v. Dept. of Revenue, 4 OTR 302, 312 (1971).
A. Disqualification
In order to qualify for forestland special assessment, the property must meet minimum
stocking and acreage requirements, established by the state forester. OAR 150-321.358(4)(1).
Even if the property does not meet the minimum stocking and acreage requirements, it may still
3
Unless otherwise noted, all references to the Oregon Revised Statutes (ORS) and the Oregon
Administrative Rules (OAR) are to 2009.
DECISION TC-MD 111166N 6
qualify as forestland if the property owner “give[s] the assessor a written management plan for
establishing trees to meet the minimum stocking requirements.” OAR 150-321.358(4)(2); see
also Hoversland v. Washington County Assessor, TC-MD No 031070B, 2005 WL 1083700 at *2
(Jan 27, 2005.) In addition to submitting a written management plan, the property owner‟s must
meet the timeline requirements for planting set forth in OAR 150-321.358(4)(2)(d):
“At least 20 percent, but not less than two acres, of the area in the plan must be
planted by December 31 of the first assessment year that the land is designated as
forestland. Each additional year thereafter, a minimum of 20 percent of the area
must be planted. At the end of the fifth year after the assessor approves the
designation, 100 percent of the area in the plan must be planted. The assessor
may grant extensions to fulfilling planting requirements if a loss of planted stock
occurs due to conditions beyond the control of the landowner.”
See also Dunahoo v. Dept. of Rev., 13 OTR 352, 355-56 (1995) (“the basic test is whether the
land is used for growing trees * * *[i]f trees are not growing, it is not forestland”).
The subject property originally qualified for forestland special assessment in 2002 and
Plaintiffs submitted a management plan to Defendant at that time. Plaintiffs did not meet the
requisite timeline for planting under OAR 150-321.358(4)(2)(d), which requires “100 percent of
the area in the plan” to be planted within five years. Extensions are allowed at the discretion of
the county assessor and Defendant granted extensions in 2004, 2008, and 2010. As of 2011,
Plaintiffs had yet not planted trees on the subject property in accordance with their written
management plan and have, instead, focused their energy and resources on qualifying the subject
property for various other programs. For the 2011-12 tax year, the subject property does not
meet the requirements of OAR 150-321.358(4) and disqualification was appropriate.
B. Imposition of additional tax following disqualification
Plaintiffs request relief from the additional tax imposed under ORS 308A.703(2) based
on financial hardship. ORS 308A.703(2) states that “an additional tax shall be added * * *.”
DECISION TC-MD 111166N 7
(Emphasis added.) “Use of the word „shall‟ makes clear that the addition of the taxes is
mandatory.” Michel v. Jackson County Assessor, TC-MD No 070674C, WL 4224968 at *2
(Nov 19, 2007). The court is not aware of any exception to imposition of the additional tax, for
hardship or otherwise. The additional tax was lawfully imposed under ORS 308A.703(2) and
Plaintiffs‟ request for relief from that tax must be denied.
III. CONCLUSION
The subject property does not meet the minimum stocking requirements under OAR 150-
321.358(4) and Plaintiffs have not complied with the mandatory timeline for planting set forth
under OAR 150-321.358(4)(2)(d), despite several extensions granted by Defendant.
Accordingly, Defendant‟s disqualification of the subject property from forestland special
assessment must be upheld. The additional tax imposed under ORS 308A.708 is mandatory and
the court is not aware of any exception, for hardship or otherwise. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiffs‟ appeal is denied.
Dated this day of July 2012.
ALLISON R. BOOMER
MAGISTRATE
If you want to appeal this Decision, file a Complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your Complaint must be submitted within 60 days after the date of the Decision
or this Decision becomes final and cannot be changed.
This document was signed by Magistrate Allison R. Boomer on July 17, 2012.
The Court filed and entered this document on July 17, 2012.
DECISION TC-MD 111166N 8