STATE OF MINNESOTATAX COURT
TENTH JUDICIAL DISTRICT
COUNTY OF WASHINGTONREGULAR DIVISION
Robert L. Brackey,Petitioner, / ORDER AMENDING FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER FOR JUDGMENT
vs. / File No. / C4-06-7837
County of Washington,
Dated: June 23, 2008
Respondent.
The Honorable Sheryl A. Ramstad, Judge of the Minnesota Tax Court, heard Petitioner’s Motion for Amended Findings of Fact, Conclusions of Law, Rehearing and New Trialon June 4, 2008, at the Washington County Courthouse, 14900 61st Street North, Stillwater, Minnesota.
Amy Grady and Robert A. Hill,Attorneys at Law, as substituted counsel for Fred A. Kueppers, Jr., represented the Petitioner.
Richard Hodsdon, Assistant Washington County Attorney, represented the Respondent.
The Court, having heard and considered Petitioner’s Motion, and upon all of the files, records and proceedings herein, now amends the Findings of Fact, Conclusions of Law, and Memorandum in its Order dated May 6, 2008, as follows:
ORDER
- Finding of Fact No. 2 shall be amended to read as follows:
The subject property consists of 17 acres of land situated in the City of Oak Park Heights, Washington County, Minnesota (“Subject Property”).[1] The only improvement on the Subject Property is a 30 x 50 foot shed used to store a mower and various watering, weeding, spraying, and fertilizing equipment to service the growing of trees and non-seasonal storage of Petitioner’s pontoon boat.
- Conclusion of Law No. 1 shall be amended to read as follows:
The assessor’s classification of the Subject Property as of January 2, 2006, shall be changed on the books and records of WashingtonCounty from commercial to agricultural; the Subject Property qualifies for Green Acres treatment under Minn. Stat.
§ 271.111.
- Conclusion of Law No. 2 shall be amended to read as follows:
Real estate taxes due and payable in 2007 shall be recomputed accordingly and refunds, if any, paid to Petitioner as required by such computations, together with interest from the original date of payment.
LET JUDGMENT BE ENTERED ACCORDINGLY. A STAY OF FIFTEEN DAYS IS HEREBY ORDERED. THIS IS A FINAL ORDER.
/ BY THE COURT,Sheryl A. Ramstad, Judge
MINNESOTA TAX COURT
DATED: June 23, 2008
Memorandum
Background
1
Robert L. Brackey (“Petitioner”) filed this Motion for a New Trial pursuant to Minn. R. Civ. P. 59.01(f) and (g) and/or for Amended Findings of Fact, Conclusions of Law, and Order for Judgment pursuant to Minn. R. Civ. P. 53.02.
This case comes before the Court over a dispute as to whether the Subject Property should be classified as Green Acres under Minn. Stat. § 273.111, subd. 3 and 6 as of the January 2,2006 assessment date for taxes payable in 2007.
Petitioner filed his petition with this Court after the Subject Property, which had carried the agricultural classification and the Green Acres tax benefit since some time prior to 1994, was reclassified as commercial for real estate purposes. Trial was held on April 3, 2008.
The Tax Court issued its Decision on May 6, 2008, finding that Petitioner had not met his burden of rebutting the Washington County Assessor’s determination that the Subject Property should be classified commercial as of the January 2, 2006 assessment date. The Court also found that the Subject Property does not qualify for Green Acres valuation and tax deferment and affirmed the Washington County Assessor’s classification.
At the June 4, 2008 hearing on Petitioner’s Motion, new counsel appeared on behalf of Petitioner, raising arguments and relying upon authority that had not been presented prior to the Court rendering its May 6, 2008 Decision. In short, Petitioner contends the Washington County Assessor’s classification of the Subject Property as of January 2, 2006, should be changed from commercial to agricultural and that the Subject Property qualifies for green acres treatment. We agree and change our earlier decision for the reasons set forth below.
Discussion
Zoning Code
First, Petitioner contends that the Subject Property cannot be classified as commercial because the zoning of the Subject Property does not legally allow a commercial use; and second, Petitioner claims that even if there is no identifiable current use of the Subject Property, it must be classified according to the highest and best use permitted under the local zoning ordinance so that it cannot be considered commercial.WashingtonCounty (“Respondent”) argues that Open Space zoning does not preclude commercial use since StillwaterHigh School and the Oak ParkHeights prison are located on land that is zoned Open Space.
The Subject Property is currently zoned (O), Open Space Conservation, under the Oak ParkHeights city zoning ordinance. The Court, however, does not find zoning to be determinative as to classification of the Subject Property in this case. We find no authority, and Petitioner cites none, that zoning and classification are interchangeable. Moreover, the authority upon which Petitioner relies is inapposite. Minnesota StatuteSection 273.13, subd. 33 (2006), relates to the classification of unimproved property[2]but there is a shed on the Subject Property so it does not constitute “real property that is not improved with a structure.”
Agricultural Classification
Rather, the Court’s determination of classification is controlled by the property tax classification statute, Minn. Stat. § 273.13, which reads in relevant part as follows:
Agricultural land…means contiguous acreage of ten
acres or more, used during the preceding year for
agricultural purposes. “Agricultural purposes” as used
in this section means the raising or cultivation of agri-
cultural products….
Contiguous acreage on the same parcel, or contiguous
acreage on an immediately adjacent parcel under the
same ownership, may also qualify as agricultural land,
but only if it is pasture, timber, waste, unusable wild
land, or land included in state or federal farm programs.[3]
Subdivision 23(e)(7) of this statute defines “agricultural products” as, among other things, “trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood products.” [4]
We must first determine if the Subject Property should be classified as agricultural or commercial. Respondent’s position is that the Subject Property was not being used for agricultural purposes as defined by statute, but being held for future development. Respondent also claims that only 4.23 acres were being used for the growing of evergreen trees so that agricultural activity did not take place on ten contiguous acres during 2005. Petitioner argues that there is no special tax classification for “future development” and that land actually being used for growing trees should be classified as agricultural land, whatever its potential or future intended use may be. With respect to the acreage upon which trees were grown, Petitioner contends that trees are located in every area of the Subject Property except for the 4-acre pond. Since the statute does not specify the density of trees that must be grown to satisfy the statute and Petitioner used the Subject Property during 2005 for the purpose of growing trees, as well as weeding, mowing, spraying, and overall maintenance of it for agricultural use, Petitioner urges the Court to classify it as agricultural.
Since purchasing the Subject Property in 1994, Petitioner had consistently mowed, weeded, and sprayed the entire parcel, except for the 4-acre pond, so as to maintain it for agricultural use. Although he had not planted new trees or moved trees from another location onto the Subject Property during 2005,there remained approximately 55 evergreens on the Subject Property as of January 2, 2006.In Holt v. County of Chisago[5] this Court held that land need not be composed of a consistent agricultural make-up in order to be classified as agricultural. There, the property consisted of four and a half to five acres that were tilled, three acres that could be tilled or used as hay land, and four acres of unusable wild land. Using Minn. Stat. § 273.13, subd. 23 (c), we found that since all the land qualified as agricultural in its own respect, the land could be counted together to meet the ten acre required minimum. Similarly, the entire Subject Property, except for the 4 acre pond, has been maintained so that it could be used for growing trees. Although it appears that trees were only grown on portions of it, more than ten contiguous acres of the Subject Property were mowed, sprayed, and maintained for agricultural use. Unlike the situation in Schmieg v. County of Chisago[6]where only a portion of the property was used for bees and part of it was used commercially to maintain a billboard, here the entire Subject Property was maintained as agricultural land and there was no commercial use of it.
We, therefore, find that the Subject Property had contiguous acreage of ten acres or more used during 2005 for agricultural purposes.
Next, we must determine whether the Subject Property was used for agricultural purposes. Since “the raising or cultivation of agricultural products” constitutes an agricultural purpose under Minn. Stat. § 273.13, subd. 23 (c), and trees grown for sale fit within the definition of “agricultural products” under subd. 23 (e) (7), we find the Subject Property was used for agricultural purposes. Moreover, under Minn. Stat. § 273.13, subd. 23 (c), waste qualifies as agricultural land. Although “waste” is not defined in the statute, the dictionary defines it as “barren or uncultivated land.” [7]Except for the pond, the area surrounding the approximately 55 trees located on the Subject Property was barren or uncultivated with simply a shed that housed tree-maintaining equipment, an occasional car, and non-commercial recreational equipment in it. Thus, the “[c]ontiguous acreage on the same parcel…qualify[ies] as agricultural land” under (c) because it is wasteland.
This Court previously determined that the Subject Property’s agricultural use was incidental to Petitioner holding it for sale for commercial use. Petitioner’s counsel acknowledged this may well be the case at oral argument. However, two classification cases previously decided by this Court have held that property apparently being held for future development should continue to be classified as agricultural even though the agricultural use of it was minimal. In Buzick v. County of Anoka,[8] for example, the taxpayer challenged the assessor’s decision to change the property classification from agricultural to vacant. The property owner grew hay on part of the land; the rest of the parcel was unproductive watershed. There was no residential, industrial or commercial use of the property. Deciding that the land should continue to hold the agricultural classification, this Court found that while the long-term, future use of the land may be commercial or residential, its present use must control classification for property tax purposes. The Court noted that “there is no special tax classification for ‘future development’ or ‘speculation’ and required the assessor to change the classification to agricultural.
Similarly, the assessor in Thorfinnson v. County of Hennepin[9] had changed the classification of previously classified agricultural/green acres property to “vacant land commercial” since there was very little agricultural activity on the property, which was in an industrial park. The property was also for sale, presumably for commercial use. Finding that because limited agricultural use of the property existed, namely cutting hay, the property’s tax classification must remain agricultural, the Thorfinnson court stated:
Obviously the subject property is not intensely farmed and
the income from these acres alone would not support an
individual farmer. We do not read the classification sta-
tutes to require intensive agricultural activities…[M]erely
conducting the very minimum of farming-like activities to
keep an agricultural classification and eligibility for green
acres until…receiv[ing] the right offer to sell the property
as commercial property…minimally meet[s] the criteria
for agricultural classification.[10]
Respondent contends that by maintaining a pylon Menards sign on an 800 square foot easement of the Subject Property and by actively advertising the land for sale, Petitioner is putting the Subject Property to a commercial, rather than an agricultural, use. The Washington County City Administrator testified, however, that the signage does not affect land classification[11] and Petitioner is not compensated for the sign.[12] Moreover, as we stated in Buzick, “there is no special tax classification for ‘future development.” [13]Despite the likelihood that the Subject Property will someday be sold for commercial use, it remains agricultural so long as it meets the requirements of Minn. Stat. § 273.13, subd. 23 (c). Here, we find the Subject Property qualifies for the agricultural classification because it is contiguous acreage of ten acres or more, used during the preceding year for agricultural purposes.
Green Acres Treatment
Once land is classified agricultural, there are additional factors that must be met to qualify the property for Green Acres treatment under Minn. Stat.
§ 273.111. Specifically, Petitioner must establish that the land (1) consists of ten acres or more; (2) is primarily devoted to agricultural use; (3) has an annual total production from the property of $300 plus $10 per tillable acre; and (4) has been in the possession of the owner for at least 7 years.
It is undisputed that the Subject Property satisfies factors one, three, and four. That is, it consists of more than ten acres, the annual production from the property was $1,500, and Petitioner has held the property since 1994. Factor two requires that the Subject Property be “primarily devoted to agricultural use.” Respondent argues that the Subject Property does not qualify for Green Acres treatment because it is held for commercial development and its agricultural use is minimal. Petitioner argues that as of January 2, 2006, the Subject Property was not used for commercial purposes and was primarily devoted to agricultural use as defined in Minn. Stat. § 273.13, subd. 23(e)(7). We agree.
The Green Acres statute does not provide guidance as to what qualifies land as being “devoted” to the production and sale of agricultural goods. Moreover, it does not list a threshold amount of production, only that the income requirement is met. “Devote” is defined as “to give over or direct (as time, money, or effort) to a cause, enterprise, or activity.”[14] We find that factor two is met because all but approximately four acres have been used or maintained to grow trees during the year preceding the assessment date. Thus, we find the Subject Property was primarily devoted to agricultural use.
Respondent relies upon Jackim v. County of Otter Tail[15]to support its position that the Subject Property is not primarily devoted to agricultural use. In Jackim, the issue was whether the 28 lots could be classified as “seasonal recreational residential” or “timber.” The Court determined that the current and intended use for the land was for development and sale because of the owner’s sales efforts. In order for the land to be classified “timber,” however, it must be “used exclusively for growing trees for timber.” Respondent has failed to offer support as to why “used exclusively” and “primarily devoted” are synonymous.
In summary, the Green Acres statute does not mandate that every piece of the land needs to be actively farmed and utilized for agricultural products. Since Petitioner spends time and money growing and selling evergreen trees on the Subject Property and maintains all but the 4-acre pond by mowing, spraying, and weeding it, it is primarily devoted to agricultural use. Inasmuch as the Subject Property bears no other competing use, we find that it qualifies for Green Acres treatment.
Conclusion
The Subject Property qualifies for agricultural classification as of the January 2, 2006 assessment date because it was comprised of ten or more contiguous acres used for an agricultural purpose during the preceding year. The record supports, and we find, the Subject Property qualifies as agricultural land under Minn. Stat. § 273.13, subd. 23 (c). It also meets the additional requirements to qualify for Green Acres treatment under Minn. Stat. § 173.111.
Based upon the foregoing, we amend Finding Number 2 and Conclusions of Law Numbers 1 and 2in our May 6, 2008 Decision to reflect a change in classification of the Subject Property for January 2, 2006, from commercial to agricultural and that the Subject Property qualifies for Green Acres treatment.
S.A.R.
1
[1] PID #s 05.029.20.22.0015 and 05.029.20.22.0014.
[2] Minnesota Statute Section 273.13, subd. 33 (2006) provides as follows: “(a) All real property that is not improved with a structure must be classified according to its current use. (b) Real property that is not improved with a structure and for which there is no identifiable current use must be classified according to its highest and best use permitted under the local zoning ordinance.”
[3] Minn. Stat. § 273.13, subd. 23 (c); Minn. Stat. § 273.13, subd. 23(e)(1) and (7).
[4] Minn. Stat. § 273.13, subd. 23(e)(7).
[5] File No. C5-04-559 (Minn. Tax Ct.Mar. 2, 2005).
[6] 740 N.W.2d 770 (Minn. 2007).
[7]
[8] File No. C7-91-4974 (Minn. Tax Ct. Jan. 7, 1992).
[9] File No. TC-23450 (Minn. Tax Ct.Aug. 15, 1996).
[10] Id.
[11] Tr. at 183-84].
[12] Tr. at 15.
[13]Buzick, supra at 10.
[14]
[15] File No. C3-93-1562 (Minn. Tax Ct. Dec. 2, 1940).