STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KINGS POINT HOUSING CORP. )

and K. D. EATMON, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1331

) STATE OF FLORIDA, DEPARTMENT ) OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, at 10:30

A.M. on November 14, 1975, in Room 113 of the Collins Building, Tallahassee, Florida.

APPEARANCES

For Petitioner, Robert M. Schwartz Kings Point 7000 Atlantic Avenue

Housing Corp.: Delray Beach, Florida 33446

For Petitioner, William C. Sprott

K. D. Eatmon: 315 Third Street, Suite 101

West Palm Beach, Florida

For Respondent, Robert Lee Shapiro

Palm Beach Levy, Plisco, Perry, Reiter County Property & Shapiro, P. A. Appraiser: 120 North Country Road

Palm Beach, Florida 33480

For Respondent, Stephen E. Mitchell Department of Assistant Attorney General Revenue: Department of Legal Affairs

The Capitol

Tallahassee, Florida 32304

The issue in this cause is whether petitioners are entitled for the tax year 1974. More specifically, the issue is whether the change made by the Palm Beach County Board of Tax Adjustment (BTA) is the property appraiser's denial of petitioners' application for agricultural classification lacked legal sufficiency or whether the evidence presented to the BTA was insufficient to overcome the appraiser's presumption of correctness. In accordance with Florida Statute 193.122(1) and the case of Hollywood Jaycees v. State Department of Revenue, 306 So. 2d 109 (Florida 1975), the evidence adduced at the hearing was limited to the scope of the record established before the BTA.

FINDINGS OF FACT

Upon consideration of the pleadings and the evidence adduced at the hearing, the following pertinent facts are found:

1. Prior to 1974, the subject land, consisting of approximately 150 acres, was zoned and classified as agricultural land and the agricultural assessment was about $300.00 per acre.

   
   

2. In November of 1973, petitioner Kings Point Housing Corp. purchased the land for $7,125.00 per acre. This land is located immediately adjacent to acreage upon which Kings Point operates a large housing development.

   
   

3. At the time of this purchase and for some years prior to that time, the land in question had been under lease and used for cattle grazing. The present lessee was petitioner K. D. Eatmon. The lease was entered into in February of 1971 for the purpose of cattle grazing and provided for a term of five years, with either party having the option to terminate the lease upon ninety days prior written notice.

   
   

4. For at least the previous twenty years, the land had never been used for anything other than a cattle ranch.

   
   

5. On January 1, 1974, the land was being used for agricultural purposes; to wit: cattle grazing.

   
   

6. At some time during 1974, petitioner Kings Point petitioned for a zoning change of the subject land. This petition was denied.

   
   

7. Petitioners timely filed their application for agricultural classification of the land for purposes of ad valorem taxation.

   
   

8. The property appraiser of Palm Beach County denied the application on the ground that the land had been purchased by Kings Point at a price three or more times the agricultural assessment placed on the land.

   
   

9. Petitioners appealed this denial to the BTA. After a hearing, the BTA found that the appraiser's presumption of correctness had been overcome and that petitioners were entitled to an agricultural classification of the property. As grounds for this decision, the BTA recited the facts that "petitioner is currently using and was using on January 1, 1974, the subject property for bona fide agricultural purposes" and the "property by mandate of the Board of County Commissioners for Palm Beach County can be used for nothing other than agricultural purposes for a minimum of one year."

   
   

10. The BTA notified the respondent Department of Revenue of the change in classification and assessment pursuant to Florida Status 193.122. The respondent's staff recommended that the BTA's action be invalidated on the ground that the evidence presented was insufficient to overcome the property appraiser's presumption of correctness.

    
    

11. The petitioners requested a hearing to review the staff recommendation, the Executive Director of the Department of Revenue requested the Division of Administrative Hearings to conduct the hearing and the undersigned was assigned as the hearing officer. The property appraiser of Palm Beach County was joined as a party-respondent. Due to the fact that a court reporter was not present

    at the hearing, the parties stipulated that their respective legal positions would be reduced to writing by the submission of memoranda to the hearing officer. To date, no such memorandum has been received from petitioners.

    
    

    CONCLUSIONS OF LAW

    
    

12. Subject to certain restrictions, property used primarily for bona fide agricultural purposes is to be classified as agricultural property, and is assessed at a lower value than nonagricultural lands. Florida Statue 193.461(3) (b). In making their determinations to whether property qualifies as agricultural for purposes of the lower ad valorem tax assessment, property appraisers are to be guided by the seven criteria set forth in Florida Statues 193.461(3) (b). Even when the property is once classified as agricultural, the appraiser must reclassify the land as nonagricultural when certain conditions occur, Florida Statues 193.461(4) (a), and he may reclassify when certain other conditions occur, Florida Statues 193.461(4) (b) and (c). One such condition which creates a red flag for the appraiser to look anew at the agricultural classification status of land is when the land has been sold for a purchase price which is three or more times the agricultural assessment placed on the land. When this occurs, a presumption is created that the land is not used primarily for bona fide agricultural purposes. This presumption may be rebutted by the landowner by a showing of special circumstances demonstrating that the land is to be continued in bona fide agriculture. Florida Statues 193.461(4) (c). This statutory presumption has recently been upheld by the Florida Supreme Court in the case of J. E. Straughn, et al v. K & K Land Management, Inc., Case No. 46,397, Op. filed January 14, 1976.

    
    

13. In that case, it was the unanimous opinion of the Court that the rebuttal statutory presumption of Florida Statues 193.411(4) (c) must be read in pari materia with Florida Statue 193.461(3) (b). Since "purchase price paid" is one of the seven criteria to be considered in determining whether property qualifies as agricultural, the "special circumstances" required to be shown to overcome the statutory presumption should conform to the other six statutory considerations. These include the factors of length of time the land has been utilized, whether the use has been continuous, size as it relates to specific agricultural use whether an effort has been made to sufficiently and adequately care for the land in accordance with accepted commercial agricultural practices, whether the land is under lease and the length, terms and conditions of the lease, and finally, other factors as may from time to time become applicable. Thus, when land is purchased at a price which is three or more times the agricultural assessment placed on the land, a red flag is raised. It then becomes the burden of the taxpayer to come forward with evidence of "special circumstances" with the framework of Florida Statues 193.461(3) (b) demonstrating that the agricultural use will be continued. As stated by the Court in the K & K Land Management case, "in this effort, the six other statutory considerations set forth in Section 193.461(3) (b). . .will be most significant." The Court further concluded that the phrase "to be continued" in Florida Statues 193.461(4) (c):

    
    

    "simply requires the landowner who rebuts the presumption to demonstrate that he has not abandonded a bona fide agricultural use as of January 1 of the year in question."

    
    

14. Applying these principals to the facts of this case, it is the conclusion of the hearing officer that the evidence presented before the BTA was sufficient to overcome the appraiser's presumption of correctness. The BTA has

    before it evidence of at least five of the six factors to be considered in determining whether the use of the land for agricultural purposes is bona fide. It was established that the land, a 150-acre tract, had been continuously utilized as a cattle ranch for at least the previous twenty years. It was further established that the land was under a five year lease for cattle grazing purposes. The property appraiser admitted that as of January 1, 1974, which is the crucial date in determining the classification of land, the property was being used as a ranch and thus its use was agricultural. While not solely dispositive of the issue, the BTA also had before it the fact that a request for change of agricultural zoning of his land had been denied and that the property would remain zoned agricultural for a minimum of one year. The fact that the purchaser may have intended to build on this land at some time in the future does not defeat the fact that on January 1, 1974, the land was used primarily for bona fide agricultural purposes, as measured by the criteria set forth in Florida Statues 193.461(3) (b).

    
    

15. In summary, it is concluded that the petitioners herein effectively overcame the presumption created by Florida Statues 193.461(4) (c) by showing that the land was to be continued in bona fide agricultural use, and that the evidence presented to the BTA was sufficient to overcome the appraiser's presumption of correctness.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited above, it is recommended that the action of the Palm Beach County Board of Tax Adjustment in granting petitioners' land an agricultural classification for the tax year 1974 be validated and upheld.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 12th day of March 1976.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 12th day of March 1976.

COPIES FURNISHED:

Mr. J. Ed Straughn Executive Director Department of Revenue The Capitol

Tallahassee, Florida 32304

Robert M. Schwartz, Esquire 7000 Atlantic Avenue

Delray Beach, Florida 33446

William C. Sprott

315 Third Street, Suite 101 West Palm Beach, Florida

Robert Lee Shapiro Levy, Plisco, Perry,

Reiter and Shapiro, P.A.

120 North Country Road Palm Beach, Florida 33480

Docket for Case No: 75-001331

Orders for Case No: 75-001331