2005 State-Owned Land Valuation by Marilyn H
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A Publication of the Department of Revenue’s Division of Local Services Cityand Alan LeBovidge Commissioner Gerard D. Perry Deputy Commissioner Town Volume 18, No. 4 April 2005 2005 State-Owned Land Valuation by Marilyn H. Browne The Commissioner of Revenue deter- cepted street lists and valued the prop- tional mail of its availability. This data mines the fair cash value of certain erties without input from the local asses- was put forth for assessors to reconcile state-owned lands (SOL) pursuant to sors. It was clear after the 2000 SOL their data with ours to eliminate uncer- M.G.L. Ch. 58 Secs. 13–17 and Ch. 59 valuation that many local assessors tainties about what land is eligible for Sec. 5G. Cities and towns are reim- did not know what land in their com- reimbursement in advance of the 2005 bursed for loss of local tax revenue on munities was reimbursable. We believe SOL valuation. In a letter dated Febru- the Cherry Sheet’s Payment-in-Lieu-of- that was due to the fact that assessors ary 27, 2004, communities were in- Tax, or by MWRA through the Depart- change frequently, non-taxable proper- formed that the Water Supply Protec- ment of Conservation and Recreation’s ties are not typically where assessors tion Land data (Ch. 59 Sec. 5G), was Division of Water Supply Protection invest their time and scarce resources posted to the Internet and they were (formerly MDC Watershed Land). and because BLA, not assessors, val- expected to have it reconciled by June ued the reimbursable SOL land. 30, 2004. The 2005 certification com- Background and Valuation Modification munities were expected to have all SOL After a great deal of deliberation over Beginning after the 2005 SOL valuation, work, regardless of the reimbursement several years BLA developed a pro- the program will be conducted once program, completed by the time they posed new valuation approach. The every four years (previously it was once received preliminary certification. Rec- approach would make use of existing every five years) thereby making SOL onciliation was also needed because state-owned land data and existing val- values more reflective of the real estate only land that was taxable before it uation programs such as recently certi- market. This, and other changes affect- was acquired by the state is eligible for fied local land values, biennial equal- ing SOL are the result of Chapter 262 reimbursement. This often makes SOL ized valuation (EQV) percentages and of the Acts of 2004 that was approved parcels look like jigsaw puzzles with interim year adjustment reports. This on August 9, 2004. This legislative missing pieces when the non-reim- plan would also eliminate the need for change and the modifications in valua- bursable portions are removed and as- expensive consultants. tion methodology are the culmination sessors frequently did not have records of work done by the Bureau of Local To facilitate the new valuation method- of these ineligible sections. At the time Assessment (BLA) in conjunction with ology, three-digit property classification this article was written 95 percent of the Massachusetts Association of As- use codes were developed and pub- continued on page eight sessing Officers. The former methodol- lished in December 2002 to allow for ogy was time consuming, cost prohibi- easy electronic identification by asses- Inside This Issue tive and in need of updating to make sors. On April 23, 2003, BLA posted the the valuation transparent to local as- M.G.L. Ch. 58 Secs. 13–17 state-owned From the Deputy Commissioner . 2 sessors. Previously the BLA collected land database to the Internet and noti- Legal land sales information, zoning data, ac- fied communities by e-mail and tradi- Sewer Assessment Bylaw Upheld. 2 Focus M.G.L. Ch. 58 Secs. 13–17, State-Owned Land Timetable — 2005 Employee Health Insurance in Massachusetts: Condition Serious. 3 January 1, 2005 Valuation date Course 101 DVDs. 5 June 1, 2005 BLA Mails proposed SOL values Library Funding Update . 5 June 10, 2005 BLA Hearings held DLS Update July 20, 2005 BLA Issues revisions of values Foley Appointed to Appellate Tax Board . 6 New Officials Finance Forum . 6 August 10, 2005 Assessors Appeals of SOL values to ATB Governor Unveils New Transportation Plan . 6 January 20, 2006 ATB Acts conclusively on appeals What is a Gubernatorial State of Emergency? 7 Table 1 DLS Profile . 9 City & Town April 2005 Division of Local Services 2 From the Deputy Commissioner On March 3, 2005, in Our Opinion Lieutenant Governor Legal Kerry Healey chaired a seminar Sewer Assessment adopted a sewer assessment bylaw in on “Understanding 1998 that was further amended in 1999. the Tax Foreclosure Bylaw Upheld As set forth in M.G.L. Ch. 40 Sec. 32, Process” at the State House. Pan- the Attorney General reviewed and ap- by James Crowley elists included officials from the pub- proved the bylaw and the amendment. lic and private sector. The Town of Acton approved a major The Acton bylaw authorized the uniform sewer project and its method of appor- unit method of assessment. In another A tax taking is a mechanism whereby tioning the costs became the subject action, the town also adopted M.G.L. a community perfects a lien to assure of a lawsuit. A large property owner, Ch. 83 Sec. 15B, which permits esti- payment of outstanding taxes. The W.R. Grace & Co. (Grace), received a mated sewer assessments provided tax title process actually begins when $2.2 million estimated sewer assess- they do not exceed one-half of the mu- property tax bills issued by the col- ment in 2001 since final construction nicipality’s liability under the sewer lector become delinquent. An official costs had not yet been determined. In construction contract. In fact, Acton’s from the Massachusetts Association accordance with special legislation (Ch. estimated assessments were less than of Assessing Officers discussed ex- 340 of the Acts of 2000) Grace chose one-half of the total construction cost. emptions and tax deferrals, which en- to apportion costs by making quarterly able elderly taxpayers to reduce or payments over a 30-year period, rather In this case, the taxpayer contended postpone payment of their local tax than the conventional 20-year time that Acton’s uniform unit method bylaw obligations and avoid delinquencies. frame. Grace also brought suit in Supe- exceeded the town’s authority under the Two officials from the Massachusetts rior Court to challenge the validity of the Home Rule Amendment (Art. 89 Sec. 6 Collectors & Treasurers Association Acton sewer bylaw as well as the town’s of the Amendments to the Mass. Con- explained that a valid lien is essential calculation of the assessment. The stitution). Secondly, Grace argued that for a proper tax taking. A parcel must lower court judge dismissed the claims its assessment was improperly calcu- be properly described on the tax bill and an appeal was made to the Ap- lated. The Appeals Court, however, held and the assessors’ maps are essen- peals Court. The Appeals Court upheld that the bylaw was valid, and any claim tial to proper assessment. the actions taken by the town. This re- of over assessment was premature. According to the Appeals Court, the Two attorneys from the Land Court cent decision is W.R. Grace & Co.- Legislature did not intend to preempt explained the process of tax title fore- Conn. v. Town of Acton, 62 Mass. App. local action since M.G.L. Ch. 83 Sec. closures. The Land Court recorder Ct. 462 (2004). 15 explicitly authorized municipalities outlined new procedures and new Under M.G.L. Ch. 83 Sec. 15 munici- to apportion costs through ordinances technology to expedite tax foreclosure palities can opt to apportion sewer con- and bylaws. Acton’s bylaw established cases. The procedure essentially bal- struction costs by a “fixed uniform rate” how residential equivalent assessment ances the 14th Amendment Due Proc- or a “uniform unit method.” M.G.L. Ch. units would be determined for multi- ess rights of the taxpayer with the 83 Sec. 15 defines the uniform rate as family residential and commercial prop- community’s interest in obtaining tax being based upon frontage or area or erties. Under Acton’s formula, a three revenue. In the event of a foreclosure, according to both frontage and area. bedroom single family residence was the parcel becomes a “tax posses- Alternatively, communities can divide projected to use 300 gallons per day, sion” property and can be disposed the project costs among the total num- which would be measured as one of by the community. ber of existing and potential sewer sewer unit. With regard to commercial We wish to thank all those who partici- units to be served. M.G.L. Ch. 83 Sec. property, residential equivalency was pated in this informative and success- 15 provides in pertinent part that “Each based on the size of the structure and ful meeting. sewer unit shall be equal to a single the lot. The Acton bylaw set 75 gallons family residence. Potential sewer units per day per 1,000 square feet as the shall be calculated on the basis of zon- flow rate for commercial property. Under ing then in effect. Existing and potential its formula, Acton would attribute one multifamily, commercial, industrial and sewer unit for every 4,000 square feet semipublic uses shall be converted of floor space. In the Appeals Court’s Gerard D. Perry into sewer units on the basis of residen- Deputy Commissioner continued on page nine tial equivalents.” The Town of Acton City & Town April 2005 Division of Local Services 3 Focus on Municipal Finance a role, the escalating cost of health in- the structure of health insurance ar- Employee Health surance for employees is the fastest rangements, which insulate consumers Insurance in growing cost center in most municipal- from the real cost of their health care ities.