A discretionary preservation easement pursuant to RSA Chapter 79-D permits municipalities to reduce the assessed value of structures that are both historical and agricultural in return for the owner’s promise to maintain and preserve the structure. The intent of the legislature in enacting RSA Chapter 79-D was to preserve historical agricultural structures to benefit the public interest. If the governing body agrees that preservation of a particular barn or other agricultural structure would benefit the public interest, the property owner must agree to grant a discretionary preservation easement to the municipality for a term of 10 years or more.
In this case, the property owners and the town entered into a discretionary preservation easement in May 2003. The agreement called for the town to assess two historical agricultural buildings for 25 percent less than their full market value as of a certain date. The parties also agreed that the assessment would not increase as a result of repairs or improvements made in accordance with the agreement. The property owners agreed to maintain their two historical agricultural buildings and grant a preservation easement to the town. The agreement also provided: “The parties make no agreement at this time regarding the interpretation of RSA 79-D as to how [s]tructures shall be assessed if the [t]own undergoes a general revaluation.”
Subsequent to the agreement, the property owners repaired their two historical structures. In the summer of 2004 the town conducted a general revaluation of all properties and increased the value of the historical buildings covered by the easement from $8,407 to $50,527. After attempts to lower the assessment failed, the property owners sued the town in superior court.
The property owners argue that the increased assessment violated both the agreement and RSA 79-D, but did not argue that they were unable to pay the higher taxes levied by the town, nor that the town assessed them disproportionately. They asked the trial court to resolve the issue of their property rights, for specific performance of the agreement and mandamus (to compel a government officer to perform mandatory or purely ministerial duties correctly) relief against the town. The town moved to dismiss, arguing that the property owners were essentially asking for tax abatement, but had failed to follow the statutorily prescribed procedure for tax abatements in that they did not first apply to the selectmen or assessors before petitioning the superior court. The trial court agreed, and finding that it lacked subject matter jurisdiction to hear the case because the property owners did not follow the statutorily prescribed procedure in RSA 76:17, dismissed the case.
The property owners appealed, arguing that their suit did not seek a tax abatement but rather a legal interpretation of RSA 79-D and the preservation easement agreement they entered into with the town, making the issue a question of law, not a claim for abatement.
The Court said that a plaintiff raising a question of law is not necessarily required to follow the statutorily prescribed abatement procedure. In this case, the property owners argue issues of contractual (the violation of the agreement) and statutory (the misinterpretation of RSA 79-D) law. Finding that these are issues of law that pose threshold questions as to the legality of the assessment, not issues of proportionality or inability to pay the taxes levied, the Court held that the property owners are not required to follow the statutorily prescribed abatement procedure. The Court reversed the trial court’s dismissal of the case and remanded it to the superior court.