CLIFFORD AND KLAASHIA BLANCHARD,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-42500
	)
IVAN FRIEDEN, ASSESSOR,	)
BARTON COUNTY, MISSOURI,	)
	)
Respondent.	)

 DECISION AND ORDER

The most persuasive evidence on the record supports the values underlying the current assessments and an increase in the value of the subject farmhouse from $7,770 to $10,870. Accordingly, the value for assessment purposes is modified from $76,050 to $79,150 ($10,530 assessed).

Where a claim of overvaluation is made, the issue that must be answered from the evidence submitted is: What was the market value of the subject property as of January 1, 2003?

The subject property in this appeal consists of a 159 acre parcel improved with a farmhouse, 2 residential utility buildings, 1 agricultural utility building, and 4 barns. The residence was built in 1900 and contains approximately 720 square feet of living area. The subject parcel is identified by parcel locator number 07-1.0-11-000-000-002.00. It is located at 663 Northwest 30th Rd., Lamar, Missouri. Respondent originally appraised the parcel for the 2003 tax year as follows:

The corresponding residential assessment was $2,220, and the corresponding agricultural assessed value was $7,720, for a total assessed value of $9,940. The Board of Equalization affirmed the original valuation. Complainants appeal the assessment on the grounds of overvaluation and exemption and propose a residential market value of $11,105 ($2,110 assessed) and an agricultural productive and appraised value of $56,250 ($6,750, assessed). Tr., at 2 - 3. Respondent presented appraisal evidence in support of an increase in the residential appraised value to$14,790, and maintaining the values determined on the agricultural property.

Complainant, Mrs. Klaashia Blanchard, presented testimony and exhibits in support of her positions. Complainants= Exhibit 3, succinctly lays out her four arguments in support of her appeal as follows:

#1: Sec. 137.073 says: AThe inflation growth factor shall be limited to the actual assessment growth in the aggregate for the political subdivision (exclusive of new construction and improvements) but not to exceed the consumer price index of 5%, whichever is less@.

[The increase in the] index seems like Ataxation without representation@ to me. I didn=t vote for it and don=t wish to be compared with city of Lamar houses.

Houses in Liberal (exclusive of new construction) do not sell for more.

Lamar artificially inflated prices by the school paying $360,000 (6,000 per acre) for land valued at $23,000 when purchased in 1977. Then the city paid $5,000 for 30 acres?

#2: I paid $10.00 at auction for the toy house I am taxed on. It is made of 9 - 10 pieces of plywood period. There is a hole in the roof and I don=t know how long it has been there. Toy house not used since Dakota=s death (4 years ago).

What happened to not taxing buildings without a foundation. I want [the] statute: I have looked.

The drive by assessment isn=t getting it!

#3: My house is over 100 years old. While I like it, most would tear it down. How much longer do I need to live in it before taxes depreciate to zero? The state has all the money they need off of my house. There are new ones built every day.

[Sampling of assessments omitted. See, Complainants= Exhibit 3 for detail.].

I do not want to pay for other people=s expensive new homes.

#4: [The] shed is not done. Simply a roof. It is valued at $13,000. We only paid $7,172.35. I do not want to pay taxes on my labor. [Listing of out-of-pocket costs for the shed totaling $7,172.35 omitted. See, Complainants= Exhibit 3 for detail.].

Complainants offered 4 exhibits into evidence:

Complainants= Exhibit 1, is two photographs of the toy house;

Complainants= Exhibit 2, is three photographs showing some condition issues on the subject residence;

Complainants= Exhibit 3 is a 5 page document reflecting CPI data for July 2003 from the State of Missouri Web page and four pages outlining her grounds for appeal;

Complainants= Exhibit 4 is a photocopy of the side of the subject residence showing the condition of the siding.

Complainants= Exhibit 5 is a property record card on property owned by Billy Ray Bryant and Nancy Ann Benton.

Complainants= Exhibit 1 was later withdrawn after it was confirmed by Respondent that the toy house was not valued in the residential assessment. Complainants= Exhibits 2, 4, and 5 (for admission of Exhibit 5, see Tr. 54 - 55) were received into evidence. Complainants= Exhibit 3 was objected to by Respondent and its admission was taken under advisement. After consideration of Respondent=s objections, Complainants= Exhibit 3 is received into evidence.

Respondent, Ivan Frieden, offered the appraisal testimony and a summary report. Mr. Frieden researched the market place to find sales of comparable properties. Tr. 27. He specifically looked for sales of houses A...of the 1900 vintage.@ Id. He was able to find three sales of houses built between 1900 and 1920. The properties compared as follows:

Mr. Frieden testified to having familiarity with the comparable sale properties and the subject property. The percent good noted above on the condition line were the amounts used in the mass appraisal for 2003. In Mr. Frieden=s judgment, the comparables are more similar in condition to the subject than those variances would indicate. Tr. 31. He judged that the subject property=s depreciation should be decreased such that it is considered 35 percent good. After reviewing the sales information gathered, Mr. Frieden concluded that the improvement value for the house should be increased from $7,770 to $10, 870 as a result of the proposed change in allowed depreciation.

Respondent offered 10 exhibits into evidence:

State=s Exhibit A is the property record card on the subject property;

State=s Exhibit B is the property record card on the Harris property;

State=s Exhibit C is the property record card on the Oglesby property;

State=s Exhibit D is the property record card on the Kochersperger property;

State=s Exhibit E is the breakdown of the existing assessment on the subject property;

State=s Exhibit F is the Summary of the Comparable Sales;

State=s Exhibit G is the Assessor=s Recommendation for Modification of the Current Assessment;

State=s Exhibit H and I are photographs of two of the comparable sale properties;

State=s Exhibit J is a photograph of the subject property.

Respondent=s Exhibits were received into evidence.

1. Jurisdiction over this appeal is proper. Complainants timely appealed to the State Tax Commission from the decision of the Barton County Board of Equalization.

2. Complainants did not present any evidence which would establish that any portion of the subject property was entitled to a property tax exemption.

3. Complainant understood from an assessing official performing field work that her portable shed previously used as a toy house was measured for the purpose of adding it as a structure on her assessment. Complainant challenged that this simple structure, purchased years ago at auction for $10.00, added any value to her property. Upon study of the property record card listing the residential structures included in the 2003 assessment, it became clear that the toy house structure was not included in the current assessment.

4. The market data shows a range of value from $37,000 to $57,000 for comparable properties of similar age and condition. Each of the comparables are located in rural Barton County. Comparables 2 and 3 did not include the sale of a significant amount of acreage, so the sales price is appropriately reflective of a residential site and house.

5. Comparison of the sale properties to the subject property, specifically noting the observed condition, supports a modification to the physical condition of the subject property from 25% good to 35% good.

6. The most persuasive evidence on the record supports a residential value of $14,790, and an agricultural value of $64,360, for a modified total value of $79,150 ($10,530, assessed) for 2003.

1. Complainants have the burden of presenting substantial and persuasive evidence that their proposed value is indicative of the market value of the subject property on January 1, 2003, in order to have that value accepted. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.

2. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

3. Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

4. As long as property can command a value in the market place, it has a taxable value for property tax purposes. Assessments on property will not Adepreciate to zero@ as long as there are informed buyers willing to purchase the property at a positive value.

5. The formula for property taxes in Missouri is: Assessed Value x Tax Rate = Tax. The State Tax Commission has been given authority under the law to correct assessments. Challenges to the tax rate levied on the assessments are beyond the jurisdiction of the State Tax Commission. Complainant references the limitation to the inflationary growth factor found at Section 137.073.2, RSMo. This mechanism has impact on the tax rate or levy and does not alter the assessment side of the tax formula. Further, the section provides the exclusive remedy for complaints concerning compliance which requires filing a formal complaint with the prosecuting attorney and if the prosecuting attorney fails to bring action within 10 days of the complaint filing, the taxpayer has discretion to bring a civil action in circuit court. Section 137.073.8, RSMo. The State Tax Commission does not have jurisdiction to adjudicate a levy issue.

Complainants appeal their assessment on the grounds of overvaluation and exemption.

Where a claim of overvaluation is made, the issue that must be answered from the evidence submitted is: What was the market value of the subject property as of January 1, 2003?

AMarket value@ is defined as A...[t]he most probable price which a property would bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised, and acting in what they consider their best interests;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Federal Register, vol. 55, no. 163, August 22, 1990, pages 34228 and 34229; also quoted in the Definitions section of the Uniform Standards of Professional Appraisal Practice, 1996 ed.

Accordingly, the best evidence of market value is open market sales activity of the subject property or comparable properties. Alternatively, the cost approach to value is a valid valuation tool.

In evaluating the value of the residential portion of the subject property, the most compelling evidence would be to review sales of comparable farm houses with outbuildings that are located in the same or a similar rural area. Given the age and general condition of the subject property, it will be important to look for sales of farm houses of similar age and condition. The sales data and subsequent actions on the part of buyers should also reveal whether such comparable properties are being purchased solely for the value of the residential lot with the aged farmhouse structure being torn down.

Complainants did not present any sales information that would establish the market value of their residential property. While Mrs. Blanchard opined that most people would tear down the house, she also conceded that she could realistically expect someone to pay $15,000, maybe $20,000 for the one acre and residential improvements. Tr. 20.

Respondent was able to find and present sales of three comparable farmhouses, all located in rural Barton County and built between 1890 and 1920. These comparables sold for $37,000, $57,000, and $43,000. Comparables 2 and 3 did not include the sale of a significant amount of acreage, so the sales price is appropriately reflective of the residential site and house. Regarding his review of the subject and comparable sales properties, Mr. Frieden testified that (1) the comparable sales properties and the subject property were of comparable condition; (2) the depreciation applied to the subject property in the 2003 mass appraisal was overstated; (3) the subject property=s depreciation would more appropriately be in the neighborhood of 65%, reflecting 35%good, similar to the depreciation used for the comparable sales properties; (4) the comparable sales reflect that the assessments on the comparables are low, but the subject assessment is significantly lower. Tr. 53; (5) he concluded that an increase to the indicated value of the subject farmhouse was warranted.

This Hearing Officer is persuaded that the market value of the residential portion of the subject property was $14,790 ($7,780, assessed).

Complainants= challenge to the agricultural assessment was limited to challenging the value of the old barn and the incomplete 2002 barn. Mrs. Blanchard had the opinion that the old barn added no value to the property due to its condition and offered a picture reflecting its condition. She also argued that, if taxable (see, discussion below at Exemption), the value of the incomplete 2002 barn should be limited to their out of pocket costs and should not include their labor. As discussed below, the law requires assessing officials to locate property and improvements and determine the probable value that would be exchanged for such property in the marketplace as of the tax date. In a typical market, a seller would not sell and a prospective buyer would not expect to be able to purchase an improvement for only the cost of the materials.

Complainants did not provide sufficient evidence to establish that a modification to the value of the agricultural improvements was warranted.

Complainants did not make a claim or present any evidence to establish that the subject property should be entitled to a property tax exemption under Section 137.100, RSMo, rather they claim the 2002 barn is simply a supported roof and is not a completed structure and therefore should not yet be added to the tax rolls. Section 137.115, RSMo, directs that real property, including new construction and improvements, is to be annually assessed at its true value in money (i.e. market value). The section directs that the assessor is to locate and value new construction and improvements to the real property that are present on January 1 of each tax year. It does not direct that the new construction and improvements are to be assessed upon completion. The Commission addressed this issue in its decision in Robert and Eugenia Moser v. Mike Sutherland, STC Appeal No. 98-91000, (issued on June 14, 1999). In relevant part, it stated:

The Hearing Officer has considered the arguments advanced by Complainants in their Brief and Reply Brief. The arguments are not persuasive. This case is really quite simple. The Assessor is mandated by law to assess all real property. Section 137.115.1, RSMo. Real property consists of land, buildings, structures and improvements. Section 137.010(3), RSMo. The fact that the subject building, parking lot, and other improvements were not in a completed state on January 1, 1998, so that Complainants could operate a grocery store is not the determinative factor in this case.

The Assessor must value what is in place. Even thought not totally completed, the building under construction on the subject land added value to the real property. The Commission must view the valuation of this property as what a willing buyer and seller would have agreed to as a purchase price for the property in the condition which it existed on January 1, 1998. A knowledgeable buyer and seller would place some value on the unfinished building and improvements. An informed seller would not sell the subject 6.97 acres improved as it was on January 1, 1998, just for the cost he had in the land. An informed buyer would not expect to be able to purchase the property only for the cost the seller had in the land. The unfinished building and improvements added value to the real property. This value is required to be assessed for ad valorem tax purposes. The Assessor considered and allowed for the fact that the subject building and improvements were not fully completed. The Assessor=s value recognizes there was still some work to be done to complete the building.

Complainants attempt to demonstrate payments on the subject building during 1998 falls far short of establishing that the unfinished building and improvements in place on January 1, 1998, should not be given any value....

Complainants failed to met their burden of proof that an unfinished building, structure or improvement is to be given no value for purposes of ad valorem taxation. Accordingly, the valuation made by the Board of Equalization must stand.

Proceedings and Decisions of the State Tax Commission of Missouri, Fifty Fourth Annual Report, at 376 - 377.

Complainant also made vague reference to a statutory 5-year grace period before assessment on new construction. Presumably, this was a reference to Sections 137.112 through 137.114, RSMo, which provided for tax relief to encourage the renovation of obsolete residential properties. The referenced five-year assessment deferment was only applicable to the renovation of deferred maintenance, as defined at Section 137.112.2, RSMo, on residential unit(s) that began during the period of January 1, 1978 through December 31, 1988. Section 137.113, RSMo. These statutory provisions are not applicable to the facts established in this appeal.

The 2003 assessed valuation for the subject property as determined by the assessor and affirmed by the Barton County Board of Equalization is modified as follows:

A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision. The application shall contain specific detailed grounds upon which it is claimed the decision is erroneous.

If an application for review of a hearing officer decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Barton County as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED January 16, 2004.

STATE TAX COMMISSION OF MISSOURI

Aimee Smashey

Hearing Officer

ORDER

On January 16, 2004, Hearing Officer Aimee L. Smashey, entered her Decision and Order (Decision) setting aside the assessment by the Barton County Board of Equalization, which had sustained the valuation established by the Assessor, and raised the value of the subject property.

Complainants timely filed (February 17, 2004) their Application for Review of the Decision.

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert=s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen=s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

The Commission will not lightly interfere with the Hearing Officer=s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact. Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com=n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).

Complainants set forth nine arguments in their Application for Review. However, none of the arguments addressed how the Hearing Officer had erred in applying the applicable law to the facts in this appeal. Some of Complainants= arguments sought to introduce new information or evidence into the proceeding. The case must be decided upon the evidence presented at the evidentiary hearing. Neither party can, after the evidentiary hearing, bring into the record information which they have later determined might be relevant or appropriate in deciding the appeal.

One point which was raised by Complainants relates to the application of Section 137.073 in the present appeal. The Hearing Officer addressed this in the Decision. See, Decision, p. 8. Complainants also assert they did not know that there might be a raise in their taxes as a result of the Decision. The Order (September 9, 2003) setting the appeal for evidentiary hearing clearly stated that the Aassessment might remain the same, be lowered, or raised.@ A raise in the assessment would naturally result in an increase in the taxes on the property. The other arguments raised by Complainants were either arguments based upon an attempt to offer new evidence that was not a part of the record, or simply disagreements with the Hearing Officer=s conclusions and determinations.

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused her discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

Complainants= letter setting forth their Application for Review was essentially an arguing the conclusions reached by the Hearing Officer. Complainants failed to set forth any legal claim or basis as a ground to find the Hearing Officer had abused her discretion or acted in an arbitrary or capricious manner. Complainants simply had an opinion as to the fair market value of the property different from that determined by the Hearing Officer. In other words, Complainants failed to state specific grounds upon which it was claimed the decision was erroneous. In the absence of specific facts of error or specific errors in applying the law, the Application for Review must be summarily denied.

The Hearing Officer did not err in her determinations as challenged by Complainants.

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

SO ORDERED April 20, 2004.

STATE TAX COMMISSION OF MISSOURI

Sam D. Leake, Chairman

Bruce E. Davis, Commissioner

Jennifer Tidwell, Commissioner