John Cave, Executor of the Estate of Ann Krochmal v. Board of Assessors of the Town of Wilmington (December 14, 2015)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


JOHN CAVE, EXECUTOR OF THE	  v.		BOARD OF ASSESSORS OF
ESTATE OF ANN KROCHMAL				THE TOWN OF WILMINGTON     

Docket Nos.: F314665 				Promulgated:
		   F314927				December 14, 2015


These are appeals under the formal procedure pursuant to G.L. c. 61A, § 19 from the refusal of the Board of Assessors of the Town of Wilmington ("assessors" or "appellee") to accept or allow G.L. c. 61A ("Chapter 61A") applications for agricultural land classification for certain real estate in the Town of Wilmington assessed to John Cave, Executor of the Estate of Ann Krochmal ("appellant") for fiscal year 2013.
Chairman Hammond heard these appeals and was joined in the revised decision for the appellant by Commissioners Scharaffa, Rose, Chmielinski and Good. The revised decision is issued simultaneously with these findings of fact and report which are made pursuant to requests by the appellant and the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.
Rosemary Crowley, Esq. for the appellant.
John R. Hucksam, Jr., Esq. for the appellee.
FINDINGS OF FACT AND REPORT
The appellant presented his case largely through the testimony of three individuals including himself, Mr. Gerard Kennedy, Director of the Division of Agriculture Conservation and Technical Services ("ACTS") for the Massachusetts Department of Agricultural Resources ("MDAR"), and Mr. Richard Corsetti, President of BMC Corporation. The assessors presented no witnesses. 
Based on the testimony presented by the appellant, which was unrebutted and which the Appellate Tax Board ("Board") found credible in its entirety, as well as exhibits entered into evidence by both parties at the hearing of these appeals, the Board made the following findings of fact.
Factual Background
	The property at issue in these appeals (the "Farm") is a modestly improved 69.36-acre parcel of land located in Wilmington. The Farm, which is part of a larger farm that includes land in adjacent Tewksbury, has been actively farmed since the 1800s. The Wilmington and Tewksbury land together are known as Krochmal Farms. The appellant has worked on Krochmal Farms since the age of ten, assuming increasing responsibility for its operations with the passing years. Eventually, the appellant built a home for himself and his family on the Tewksbury portion of Krochmal Farms and he oversees and participates in all of the farm's operations, assisted by his sons who also work the farm. 
The Farm is used to produce crops, including corn and pumpkins, and to raise cattle. The Tewksbury portion of Krochmal Farms also produces crops and is used to raise pigs. The Farm has various fenced perimeters constructed to contain the cattle. The innermost fenced area forms a pen that contains a shelter in which the cattle sleep. There is a second fence around the pen that allows the cattle additional freedom of movement. Finally, there is a perimeter fence that encompasses approximately 35 acres and extends to the woods. This fence prevents the escape of cattle that have broken free of the inner fenced areas and surrounds the acreage on which the Farm's crops are grown and its composting operation is located. The appellant maintains the perimeter fence with the exception of small sections that have repeatedly been breached by neighborhood youths. The Farm's contiguous acreage outside the perimeter fence is not productive. 
The Farm, as is typical for farms on which cattle are raised, generates a significant amount of manure, which is composted rather than removed for disposal. Agricultural composting is time and labor intensive, and the appellant does not have the labor, equipment or knowledge to manage the Farm's composting operation. Consequently, Krochmal Farms engaged BMC Corporation ("BMC") approximately nineteen years prior to the hearing of these appeals, and BMC has served as the Farm's compost manager since that time. 
The Farm is certified for agricultural composting by the MDAR. This certification, which Krochmal Farms has held every year for almost two decades, requires annual filings with and inspection by the MDAR. Mr. Kennedy testified that agricultural composting, as practiced on the Farm and throughout the Commonwealth, transforms manure into fertilizer, in the process stabilizing nutrients and reducing odor problems, pathogens, and weed seeds. Mr. Kennedy stated that the MDAR encourages agricultural composting because it is environmentally beneficial and because it can make small-scale farming more feasible. He noted that given the time and labor requirements of composting, farmers often enter into agreements with outside entities for compost management, and that the appellant's arrangement with BMC was typical of such agreements, which are useful and at times critical to farming operations. Indeed, the testimony was clear that the appellant could not have continued to farm without BMC's composting and removal of the Farm's manure.
Mr. Kennedy was quite familiar with the Farm's agricultural composting operation, having visited and inspected Krochmal Farms on numerous occasions since 2008 when there were reports of objectionable odors emanating from Krochmal Farms. He and the appellant described the composting activities on the Farm in great detail. Manure piles from the Farm's cattle shelter and surrounding areas are brought to the 4.5-acre composting area and are mixed with soiled cattle bedding that has been removed from the cattle shelter. The cattle bedding is made up of leaves and wood chips. Leaves and tree stumps are brought from off premises and BMC grinds the tree stumps into the wood chips that are used for cattle bedding. The amount of leaves and tree stumps brought to the Farm are proportionate to the Farm's bedding needs and the manure generated by the Farm.  
The manure and used cattle bedding are combined in windrows. These windrows are approximately 20 feet wide, 100 feet long and 12 feet high. There are several windrows in the Farm's composting area, the composition of which varies primarily in the degree to which the composting materials have decomposed. BMC must use heavy machinery to turn and shift the materials in and among the windrows throughout the composting process to facilitate the materials' decomposition. When the manure and bedding materials have been fully composted, they are mechanically screened, yielding compost and loam, which BMC sells on its own behalf. As part of its arrangement with Krochmal Farms, BMC also receives a tipping fee for leaves and tree stumps brought to the Farm and pays a monthly fee to Krochmal Farms for the right to remove and sell the compost and loam. 
Based on the foregoing, the Board found and ruled that the appellant's activities on the Farm, including growing crops, raising cattle, and agricultural composting, qualified as agricultural and horticultural activities within the meaning of Chapter 61A, §§ 1 and 2.
Procedural Background
Krochmal Farms first applied for Chapter 61A agricultural land classification of the Farm for fiscal year 1988. The application was approved and the assessors recorded a lien against the property on May 20, 1987. The lien remained in place as of the date of the hearing of these appeals. 
On May 2, 2011, the appellant timely submitted an Application for Agricultural or Horticultural Land Classification pursuant to Chapter 61A ("Agricultural Application") for fiscal year 2013. The appellant provided responses in all relevant sections of the Agricultural Application. By letter dated July 27, 2011, the assessors notified the appellant that they had refused to accept the Agricultural Application for filing based on their assertion that the Agricultural Application was not complete. The letter also stated that the Agricultural Application was denied "to the extent, if any, that [it was] deemed to have been effectively filed." On August 25, 2011, the appellant timely submitted an Application to Modify a Decision ("Modification Application"), seeking reconsideration of the assessors' determinations. The assessors did not act on or respond to the Modification Application.  On November 25, 2011, the appellant timely filed a Petition Under Formal Procedure with the Board, which was assigned Docket number F314665. 
On the same day he submitted the Modification Application, the appellant timely submitted a second Agricultural Application, seeking to clarify any misunderstanding that may have been associated with the first Agricultural Application. By letter dated November 22, 2011, the assessors notified the appellant that they had refused to accept the second Agricultural Application for filing because, like the first application, they had concluded that the second was not complete. Also like the first Agricultural Application, the assessors alternatively denied the second to the extent it was deemed complete. On December 15, 2011, the appellant timely submitted a second Modification Application, seeking reconsideration of the assessors' more recent determinations. The assessors did not act on or respond to the second Modification Application. On March 14, 2012, the appellant timely filed a second Petition Under Formal Procedure with the Board, which was assigned Docket number F314927.
The appellant was assessed $19,592.57 in real estate tax for fiscal year 2013, all of which was allocated to the Farm's land except for $190.96, which was associated with the cattle shelter. The appellant paid the tax in full without incurring interest.
Throughout the appellant's agricultural application process, the assessors knew of the longstanding and extensive operations on the Farm, which included growing crops, raising cattle, and agricultural composting. Regardless, the assessors chose to assert that the appellant's Agricultural Applications were so deficient as to warrant their outright denial. In a Motion to Dismiss considered and denied by the Board, the assessors renewed their assertion that the Agricultural Applications were incomplete and fatally flawed, thereby depriving the Board of jurisdiction over the appeals. In particular, the assessors asserted that the Agricultural Applications lacked a complete statement of sales from agricultural or horticultural activities and a full statement of sales made by BMC. The assessors also asserted that the appellant did not identify the land in agricultural use and improperly failed to complete the lessee certification section of the first Agricultural Application, notwithstanding the fact that no part of the Farm was leased. The Board found the assessors' assertions that the Agricultural Applications were incomplete and fatally flawed without foundation in law or fact. Therefore, and based on the record before it, the Board found and ruled that it had jurisdiction to hear and decide these appeals.

Valuation
	Having concluded that land on the Farm qualified for agricultural land classification, the Board applied Farm Valuation Advisory Commission ("FVAC") recommended values for fiscal year 2013 to derive the value of the land for agricultural or horticultural purposes. In particular, based on the appellant's credible description of the land and its use, the Board employed FVAC "Above Average" values to the Farm's acreage. Thus, the Board valued the Farm's land as follows for fiscal year 2013:

Land Category   Acres	  FVAC Value	  FVAC Value
  					  	  Per Acre

Cropland  
Harvested,Veg:	  13		  $963		  $12,519

Cropland 
Harvested,Beef:  10		  $216		  $ 2,160

Nonproductive:   28.86	  $ 40		  $ 1,154

Necessary and
Related Land:	  17.5	  $160		  $ 2,800	

Total:		 69.36 				  $18,633	

Summary
Based on the evidence presented and the reasonable inferences drawn therefrom, the Board found and ruled that: it had jurisdiction to hear and decide these appeals; the appellant's activities on the Farm, including growing crops, raising cattle, and agricultural composting, qualified as agricultural or horticultural activities within the meaning of Chapter 61A, §§ 1 and 2; the appellant was entitled to agricultural land classification for the Farm pursuant to Chapter 61A for fiscal year 2013; and the Farm's agricultural and horticultural land value for fiscal year 2013 was $18,633.	
Accordingly, the Board ordered an abatement in the amount of $18,804.29. 

OPINION
Agricultural Land Classification
Chapter 61A, generally, provides for valuation, assessment and taxation of agricultural and horticultural land. Chapter 61A, § 4 specifies minimum acreage and use criteria as follows:
For general property tax purposes, the value of land, not less than five acres in area, which is actively devoted to agricultural, horticultural or agricultural and horticultural uses during the tax year in issue and has been so devoted for at least the two immediately preceding tax years, shall, upon application of the owner of such land and approval thereof, be that value which such land has for agricultural or horticultural purposes. For the said tax purposes, land so devoted shall be deemed to include such contiguous land under the same ownership as is not committed to residential, industrial or commercial use . . .

Pursuant to Chapter 61A, § 1, land is in agricultural use:
when primarily and directly used in raising . . . beef cattle for the purpose of selling such animals or a product derived from such animals in the regular course of business; or when primarily and directly used in a related manner which is incidental thereto and represents a customary and necessary use in raising such animals and preparing them or the products derived therefrom for market. 

With regard to "horticultural use," Chapter 61A, § 2 provides, in pertinent part: 

Land shall be considered to be in horticultural use when primarily and directly used in raising fruits, vegetables, berries, nuts and other foods for human consumption, feed for animals, tobacco, flower, sod, trees, nursery or greenhouse products, and ornamental plants and shrubs for the purpose of selling these products in the regular course of business 


As it applies to properties larger than 5 acres, Chapter 61A requires gross sales from agricultural or horticultural products in excess of $500 increased by "five dollars per acre except in the case of woodland or wetland for which such increase shall be at the rate of fifty cents per acre." G.L. c. 61A, § 3.
There is no dispute that well in excess of five acres of the Farm were used to grow crops and to raise cattle and that this land was therefore actively devoted to agricultural and horticultural use for many years prior to and during the fiscal year at issue. Pursuant to Chapter 61A, § 4, this land should be deemed to include the Farm's contiguous acreage, which is not developed or used for industrial or commercial purposes. Further, there is no dispute that agricultural composting qualifies as an agricultural use as contemplated by Chapter 61A, § 1. Finally, the appellant's reported gross receipts of $105,000 vastly exceeded the gross sales requirement of Chapter 61A, § 3. In sum, the Farm qualified for agricultural land classification under Chapter 61A. 
The assessors knew of the Farm's longstanding agricultural activities before, during and after the appellant's compliance with Chapter 61A's annual application requirement for agricultural land valuation for fiscal year 2013. See G.L. c. 61A, §6. In particular, the appellant filed two Agricultural Applications, each of which was responsive to the assessors' inquiries, as well as two Modification Applications. Nonetheless, the assessors chose simply to reject the appellant's filings in their entirety based on their cursory assertion that the Agricultural Applications were so incomplete as to render them unsuitable for consideration. This assertion forms the core of the assessors' primary argument in these appeals, which is that the Agricultural Applications were fatally flawed and that the appeals should therefore be dismissed for lack of jurisdiction. The assessors claimed deficiencies in the first Agricultural Application including: lack of a complete statement of sales from agricultural or horticultural activities; lack of a full statement of sales made by BMC, the appellant's "lessee"; the appellant's failure to identify land in agricultural use; and the absence of a signature in the lessee certification section of the Agricultural Application. The assessors took similar issue with the second Agricultural Application, except with respect to provision of a signature in its lessee certification section.
The Board found that the assessors' claims regarding the Agricultural Applications' flaws were specious and either factually inaccurate or of no legal consequence. As previously noted, the appellant provided substantive responses in relevant sections of the Agricultural Applications. These responses, contrary to the assessors' assertions, included a detailed breakdown of the Farm's acreage and the uses to which the land was put. The appellant also stated gross sales of $100,000 in the first Agricultural Application and $105,000 in the second. While these figures may not have been precise, the sales easily exceeded the minimum gross sales requirement provided by Chapter 61A, § 3.
The assessors' complaint that the Agricultural Applications lacked a full statement of BMC's sales was based on their assertion that such a statement was required by statute and necessary to a determination of whether land purportedly leased to BMC was not committed to industrial or commercial use. The Board found this argument unavailing. Whether the appellant should have reported BMC's gross sales of compost and loam generated by the Farm's agricultural composting operation was not dispositive. These sales would have had no effect on an agricultural land determination because the Farm's gross sales requirement had already been met. Moreover, given the Board's finding that BMC's activities on the Farm were limited to agricultural composting, BMC's other sales were irrelevant. Finally, there is no requirement, in the Agricultural Applications or elsewhere, that all of BMC's sales be reported to the assessors.  
The appellant left the lessee certification section of the first Agricultural Application blank because there was no lessee. The assessors' assertions to the contrary were just that, and were not supported by probative evidence. Further, the appellant and Mr. Corsetti gave credible and unrebutted testimony regarding the relationship between BMC and Krochmal Farms as that between a farm and its composting manager, a relationship Mr. Kennedy described as typical and supportive of agricultural composting in the Commonwealth. The appellant and Mr. Corsetti also credibly testified that no portion of the Farm was leased to BMC.
For purposes of the Board's jurisdiction, the Supreme Judicial Court has held that, in the context of an application for abatement of real estate taxes, an abatement application will be considered incomplete only if it lacks information required by statute. See MacDonald v. Board of Assessors, 381 Mass. 724, 726 (1980). Assuming that this standard applies to Agricultural Applications, the assessors can identify no such omissions. Indeed, as the preceding discussion illustrates, the appellant on more than one occasion provided ample responses to inquiries posed in the Agricultural Applications. Thus, the Board found the assessors' argument that the Agricultural Applications were fatally flawed entirely without merit.
The assessors also made specific allegations regarding the use of the 4.5 acres of the Farm that the appellant stated were dedicated to agricultural composting. In particular, the assessors asserted that this area served as a commercial facility leased to and used by BMC as a base for operation of its business, which was dedicated primarily to brush mowing, land clearing, and heavy equipment storage and sales. Once again, the assessors failed to offer probative evidence in support of their assertions. Moreover, the appellant and Mr. Kennedy, who was quite familiar with the Farm's composting operation and agricultural composting in general, described in detail the extensive agricultural composting operation at the Farm. This operation involved use of heavy machinery to move massive quantities of manure and soiled cattle bedding to and among a series of windrows, piles of materials some 20 feet wide, 100 feet long and 12 feet high. Ultimately, fully-composted materials were screened with machinery to yield saleable compost and loam. Only the assessors' bald assertions were offered to demonstrate that the composting area was used for any other purpose. The Board therefore rejected these assertions.   
Valuation
Pursuant to Chapter 61A, § 11, before January 1st of each year, the FVAC determines "a range of values on a per acre basis for each of the several classifications of land in agricultural or horticultural [use]," which is applied during the following tax year. These values are used for land that qualifies for agricultural or horticultural classification under Chapter 61A. Having considered the appellant's detailed and credible description of the manner in which the Farm's acreage was used, the Board applied relevant fiscal year 2013 FVAC values to the various categories of the Farm's land. In this manner, the Board found and ruled that the land's agricultural land valuation was $18,633 for fiscal year 2013. 
Having recognized the rapid decrease in the number of farms in the Commonwealth, the Legislature granted benefits to taxpayers under Chapter 61A that serve the important public policy interest of "preserv[ing] and protecting the Commonwealth's remaining farmland." Town of Sudbury v. Scott, 439 Mass. 288, 299-300 (2003). Further, "'[r]emedial statutes such as G.L. c. 61A are to be liberally construed to effectuate their goals.'" Adams v. Assessors of Westport, 76 Mass. App. Ct. 180, 185 (2010)(quoting Franklin v. Wyllie, 443 Mass. 187, 196 (2005)). Mindful of these principles and given facts that were clearly established in these appeals, the Board found and ruled that the Farm qualified for Chapter 61A agricultural or horticultural land classification for fiscal year 2013. Accordingly, the Board ordered an abatement in the amount of $18,804.29. 
 				 	THE APPELLATE TAX BOARD



    By:  __________________________________
    Thomas W. Hammond, Jr., Chairman



A true copy,


Attest: ______________________________
  	        Assistant Clerk of the Board

 The Board consolidated the appeals, both of which, as discussed below, relate to the same issues and the same fiscal year.



 The Tewksbury acreage has been afforded agricultural land classification under G.L. c. 61A.    
  BMC has never leased any portion of Krochmal Farms, nor has it had any rights in the land.
 The individual responsible for inspection of the Farm's composting operations and issuance of its agricultural composting certificate is Mr. William Blanchard, who reports directly to Mr. Kennedy.
 BMC, whose office is located in Billerica, engages in a variety of commercial activities unrelated to agricultural composting, including brush mowing and snow plowing for various municipalities. However, BMC only engages in activities related to agricultural composting on the Farm.  
 These responses included a detailed breakdown of the Farm's acreage and the uses to which the acreage was put. The appellant also indicated estimated gross sales of $100,000 from agricultural and horticultural activities. The section of the application entitled "Lessee Certification" was left blank, as no portion of the Farm had been leased to a third party.  
 The second Agricultural Application differed from the first in two respects. First, appellant listed an additional $5000 of gross receipts, which were attributable to sales of pumpkins. Mr. Corsetti, as president of BMC, signed the application's lessee certification section to indicate that BMC served as the "compost operator" on the 4.5-acre composting area of the Farm. Mr. Corsetti credibly testified that by signing the Agricultural Application, he did not intend to convey the impression that BMC had leased any portion of the Farm.  
  The Board did not disturb the assessors' $14,000 valuation of the cattle shelter located in the cattle pen, which was not in dispute.
  This sum includes the 4.5 acres used for agricultural composting.

ATB 2015-594