              IN THE SUPREME COURT OF IOWA
                              No. 09–0161

                        Filed December 3, 2010


JAMES NAUMANN,

      Appellant,

vs.

IOWA PROPERTY ASSESSMENT APPEAL BOARD,

      Appellee.


      Appeal from the Iowa District Court for Adair County, David L.

Christensen, Judge.



      Property owner appeals from the district court‘s judicial review of

the decision of the Iowa Property Assessment Appeal Board. AFFIRMED.



      Mark L. Smith of Jordan, Oliver & Walters, P.C., Winterset, for

appellant.



      Jessica Braunschweig-Norris and Curtis Swain, Des Moines, for

appellee.

      James E. Brick and James E. Nervig of Brick Gentry P.C., Des

Moines, intervenor-appellee Adair County Board of Review.



      Thomas J. Miller, Attorney General, Donald D. Stanley, Jr., Special

Assistant Attorney General, and James D. Miller, Assistant Attorney

General for amicus curiae, the Director of the Iowa Department of

Revenue.
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HECHT, Justice.

      An owner of agricultural property in Madison and Adair Counties

contests the valuation of his property in Adair County, contending it

violates Iowa Code section 441.21(1)(d) (2007), because the valuation of

his Adair County agricultural land exceeds by more than five percent the

valuation of his adjacent agricultural land in Madison County. Because

we conclude section 441.21(1)(d) does not apply to agricultural property,

we affirm.

      I. Background Facts and Proceedings.
      James Naumann owns approximately nine hundred acres of

agricultural property spanning the Adair-Madison County line.        After

receiving January 1, 2007, property assessments from both counties,

Naumann filed a petition to the Adair County Board of Review for each of

his thirteen parcels of land located in Adair County, asserting his

property was assessed for more than was authorized by law. The board

of review denied each of his petitions, concluding Naumann had not

provided ―sufficient [evidence] to prove the assessment was excessive.‖

      Naumann appealed to the Iowa Property Assessment Appeal Board

(IPAAB), contending his Adair County property was assessed at a value

more than five percent higher than his adjacent Madison County

property in violation of Iowa Code section 441.21(1)(d).         After an

evidentiary hearing, the IPAAB concluded the Adair County Assessor

properly assessed the value of Naumann‘s land and the assessments

were neither excessive nor done in error.

      Naumann petitioned for judicial review of the IPAAB‘s decision.

The district court allowed the Adair County Board of Review to intervene.

Following oral arguments, the district court affirmed the IPAAB‘s

decision.
                                    3

      Naumann appeals, contending the IPAAB erred in failing to adjust

downward the valuation of his Adair County real estate under section

441.21(1)(d) and asserting the district court erred in overruling his offer

of new evidence supporting his theory of valuation.

      II. Scope of Review.

      In reviewing an agency decision on judicial review, we will apply

the standards of chapter 17A to determine if we reach the same results

as the district court. Renda v. Iowa Civil Rights Comm’n, 784 N.W.2d 8,

10 (Iowa 2010).    If the agency‘s action was based on an erroneous
interpretation of a provision of law whose interpretation has not been

clearly vested in the agency, we shall reverse, modify or grant other

appropriate relief from the agency action.    Iowa Code § 17A.19(10)(c).

The IPAAB was created ―for the purpose of establishing a consistent, fair,

and equitable [statewide] property assessment appeal process.‖          Id.

§ 421.1A(1). The IPAAB has been delegated the authority to adopt rules

―for the administration and implementation of its powers‖ and rules

―necessary for the preservation of order and the regulation of proceedings

before the board.‖ Id. § 421.1A(4)(e), (f). However section 421.1A does

not give explicit authority to the IPAAB to interpret section 441.21(1)(d).

Neither party contends, and we do not conclude, the IPAAB has implicitly

been granted authority to interpret section 441.21(1)(d). Accordingly, we

will not give deference to the interpretation applied by the IPAAB and will

substitute our own judgment for that of the IPAAB if we conclude it made

an error of law. Id. § 17A.19(10)(c); see also Renda, 784 N.W.2d at 14–

15.

      To the extent a challenge to a district court ruling on the

admissibility of evidence requires the interpretation of a statute, our
                                    4

review is for errors at law. See State v. Stone, 764 N.W.2d 545, 548 (Iowa

2009).

      III. Discussion.

      The IPAAB concluded section 441.21(1)(e) and (f) provided the

basis for determining the value of the agricultural property in Iowa,

implicitly rejecting Naumann‘s argument that the limitations on property

valuation found in section 441.21(1)(d) also applied to agricultural

property.    The IPAAB then concluded Naumann‘s property had been

correctly valued pursuant to section 441.21(1)(e) and (f).      Naumann
contends the IPAAB erred in concluding section 441.21(1)(d) does not

apply to agricultural land.

      To assess Naumann‘s claim, we begin with a review of section

441.21(1), describing how taxable property is to be valued in Iowa.
         a. All property subject to taxation shall be valued at its
      actual value . . . and, except as otherwise provided in this
      section, shall be assessed at one hundred percent of its
      actual value . . . .

         b. The actual value of all property subject to assessment
      and taxation shall be the fair and reasonable market value of
      such property except as otherwise provided in this section.

      ....

         d. Actual value of property in one assessing jurisdiction
      shall be equalized as compared with actual value of property
      in an adjoining assessing jurisdiction. If a variation of five
      percent or more exists between the actual values of similar,
      closely adjacent property in adjoining assessing jurisdictions
      in Iowa, the assessors thereof shall determine whether
      adequate reasons exist for such variation.         If no such
      reasons exist, the assessors shall make adjustments in such
      actual values to reduce the variation to five percent or less.

         e. The actual value of agricultural property shall be
      determined on the basis of productivity and net earning
      capacity of the property determined on the basis of its use
      for agricultural purposes capitalized at a rate of seven
      percent and applied uniformly among counties and among
      classes of property. Any formula or method employed to
                                         5
       determine productivity and net earning capacity of property
       shall be adopted in full by rule.

          f. In counties or townships in which field work on a
       modern soil survey has been completed since January 1,
       1949, the assessor shall place emphasis upon the results of
       the survey in spreading the valuation among individual
       parcels of such agricultural property.

          g. Notwithstanding any other provision of this section,
       the actual value of any property shall not exceed its fair and
       reasonable market value, except agricultural property which
       shall be valued exclusively as provided in paragraph ―e‖ of
       this subsection.

Iowa Code § 441.21(1).
       Naumann asserts that because the plain language of section

441.21(1)(d) applies the five percent variance limitation to ―property‖

without excluding agricultural property, the valuation of his agricultural

property in Adair County must be adjusted so it does not exceed by more

than five percent the valuation of his adjacent property in Madison

County. Because he claims the variance between the Adair and Madison

County valuations is thirty-six percent, he seeks to have the actual value

of his property in Adair County reduced.1

       The IPAAB contends the five percent variance limitation in

paragraph (d) is inapplicable to agricultural land valuations.                  This

contention relies on paragraph (g) providing agricultural property shall

be valued ―exclusively as provided in‖ paragraph (e) on the basis of

productivity and net-earning capacity.

       A statute is ambiguous when reasonable persons could disagree as

to its meaning. IBP, Inc. v. Harker, 633 N.W.2d 322, 325 (Iowa 2001).

       1Naumann‘s  computation of the variance in assessed valuations is based upon
his own calculations of the value of his property. The appellants dispute Naumann‘s
methods for calculating the variance.       However, because we conclude section
441.21(1)(d) does not apply to agricultural land, we need not determine whether
Naumann‘s methods accurately establish a thirty-six percent variance in values, as he
claims.
                                      6

―Ambiguity may arise from specific language used in a statute or when

the provision at issue is considered in the context of the entire statute or

related statutes.‖ Midwest Auto. III, LLC v. Iowa Dep’t of Transp., 646

N.W.2d 417, 425 (Iowa 2002).        ―Ambiguity arises in two ways—either

from the meaning of specific words or ‗from the general scope and

meaning of the statute when all of its provisions are examined.‘ ‖ State v.

McCullah, 787 N.W.2d 90, 94 (Iowa 2010) (quoting Carolan v. Hill, 553

N.W.2d 882, 887 (Iowa 1996)).             ―Even when a statute appears

unambiguous on its face it can be rendered ambiguous by its interaction
with and its relation to other statutes.‖     2A Norman J. Singer & J.D.

Shambie Singer, Statutes and Statutory Construction § 46:4, at 188–89

(7th ed. 2007).

        We conclude section 441.21(1) is ambiguous. Reasonable minds

could disagree as to whether section 441.21(1)(d) applies to all land,

including agricultural land, or whether section 441.21(1)(e), (f), and (g)

together preclude the application of section 441.21(1)(d) to agricultural

land.    Because the statute is ambiguous, we will apply our rules of

statutory construction to ascertain the intent of the legislature.        Am.

Home Prods. Corp. v. Iowa State Bd. of Tax Review, 302 N.W.2d 140, 142

(Iowa 1981). We will avoid ―strained, impractical or absurd results.‖ Id.

We will generally give the language its usual and ordinary meaning, but

―the manifest intent of the legislature will prevail over the literal import of

the words used.‖       Id. at 142–43.      We consider the object to be

accomplished by the statute as well as the evils to be remedied in

reaching a ―reasonable or liberal construction which will best effect its

purpose rather than one which will defeat it,‖ considering all parts of the

statute together without giving undue importance to any single or
                                     7

isolated portion. Id. at 143. Finally, when construing tax statutes, we

will resolve doubt in favor of the taxpayer. Id.

      Reviewing the statute with these considerations in mind, we

conclude section 441.21(1)(d) does not apply to agricultural property.

Paragraph (a) provides that all property shall be assessed at its actual

value. While property‘s actual value is generally its fair and reasonable

market value as determined in paragraph (b), agricultural land is valued

differently. The actual value of agricultural land is determined ―on the

basis of productivity and net earning capacity‖ capitalized at seven
percent and applied uniformly among counties and classes of property.

Iowa Code § 441.21(1)(e).       Paragraph (g) provides that agricultural

property shall only be valued as provided in paragraph (e).             Id.

§ 441.21(1)(g).

      The IPAAB contends, and we agree, the harm intended to be

addressed by section 441.21(1)(d) is the potential that two similar non-

agricultural properties lying on different sides of a jurisdictional

boundary will be valued substantially differently. This is likely to happen

when the properties are being valued based on fair and reasonable

market value. The determination by a county assessor of a property‘s

fair and reasonable market value is ―far from being an exact science. . . .

[V]aluation, for assessment purposes, is in the realm of opinion and

there is no absolute standard.‖ Bankers Life Co. v. Zirbel, 239 Iowa 275,

287, 31 N.W.2d 368, 374–75 (1948).         The methods, such as market

comparables, used by assessors to determine the fair and reasonable

market value necessarily involve some degree of subjectivity. In theory,

similar adjacent properties should not have widely varying valuations

merely because they are valued by different assessors on opposite sides

of a jurisdictional boundary. Thus, it makes sense to provide a method
                                           8

of adjusting the values of adjacent, similar properties on different sides of

a jurisdictional boundary if they vary significantly without good reason,

as paragraph (d) provides.

       The IPAAB asserts the risk of unfair subjective valuations does not

exist when agricultural property is valued based on the objective factors

required by section 441.21(1)(e)—productivity and net-earning capacity.

These objective criteria for assessing the value of agricultural property

are mandated by section 441.21(1)(e) and implemented by Iowa

Administrative Code rule 701—71.12(1),2 and they leave no room for
subjective assessment of a property‘s value. Instead, the actual value of

agricultural property is determined by using an average of five years of

actual county productivity data for various crops to determine an

aggregate land value for each assessing jurisdiction. Iowa Admin. Code

r. 701—71.12(1)(a).          This aggregate land value is spread among

individual parcels in a jurisdiction utilizing corn suitability ratings

(CSRs) derived from the modern soil survey,3 as required by section

441.21(1)(f). Id. The use of this agricultural property valuation formula

which takes into account the property‘s specific CSR removes the need

for subjective determinations by the assessor.4 We conclude the purpose

       2We   previously approved this formula as a ―reasonable application of the
productivity, net-earning capacity, and seven-percent capitalization criteria established
by section 441.21(1)(e).‖ H & R P’ship v. Davis County Bd. of Review, 654 N.W.2d 521,
526 (Iowa 2002).
       3The modern soil survey provides detailed mapping and soil identification for

each parcel of property within a county and identifies all soil types and terrain
contained in a parcel. Each individual parcel within an assessing jurisdiction has a
CSR assigned to it by a modern soil survey map, and this number remains constant
from year to year. The CSR is the measure of the potential bushel per acre of corn that
can be grown on that acre.
        4Naumann does not contend that the county assessors did not follow

established rules for the assessment of agricultural property. And aside from the
failure to take into account paragraph (d), Naumann does not contend the current
methods of assessing agricultural property are unlawful.
                                           9

of paragraph (d)—to make adjustments where the inherently subjective

fair market analysis results in substantial valuation disparities between

adjacent non-agricultural properties in different counties—is not served

by applying it to agricultural land which is valued according to a formula

based on objective criteria.

       Our conclusion that the legislature did not intend section

441.21(1)(d) to apply in the valuation of agricultural property is

strengthened by the paragraph‘s incompatibility with the section

441.21(1)(g) directive that agricultural property be valued exclusively on
the basis of its productivity and net-earning capacity.                  The current

formula for calculating the value of individual parcels of agricultural

property begins with a determination by the department of revenue of the

total aggregate value of all agricultural property in each county.5

Because this aggregate valuation is not subject to change by county

assessors, any downward adjustment of the value of Naumann‘s

agricultural property in Adair County by the assessors of Adair and

Madison Counties under section 441.21(1)(d) would necessarily result in

an increase in the value of other agricultural property in Adair County.

Both the decrease in value of Naumann‘s land and the resulting increase

in the value of the other property in Adair County, if section 441.21(1)(d)

were to apply, would not be driven by the productivity and net-earning

capacity of Naumann‘s property in Adair County, as required by section

441.21(1)(e) and (g), but rather by a comparison with the valuation

assigned to adjacent property in a different county. The inconsistency

between the effect of section 441.21(1)(d) and the objective formula for

       5The formula for calculating the value of agricultural property, in its simplest

form (and not taking into account buildings on the property) is the aggregate land value
of the county divided by the total CSRs for the county times the CSR attributable to
each parcel.
                                           10

determining the value of specific agricultural land leads us to conclude

section 441.21(1)(d) has no application in the valuation of agricultural

land. Accordingly, we affirm the decision of the IPAAB.
       Naumann also argues the district court erred in refusing an offer of
new evidence. In particular, he contends a journal article addressing the
role of CSRs in agricultural land valuation was admissible under section
441.38 in the judicial review proceeding to prove his entitlement to a
downward adjustment of the valuation of the Adair County property
under section 441.21(1)(d).6             Because we have concluded section
441.21(1)(d) has no application in this case, and Naumann makes no
argument that the new evidence was probative on any issue other than
whether the valuation of his Adair County property exceeded by more
than five percent the valuation of his adjacent property in Madison
County, the district court‘s evidentiary ruling resulted in no prejudice
requiring reversal. See State v. Sullivan, 679 N.W.2d 19, 29 (Iowa 2004)
(noting that error may not be predicated on a ruling admitting or
excluding evidence unless a substantial right of the party is affected).
       IV. Conclusion.
       Iowa Code section 441.21(1)(d) does not apply to agricultural
property. We affirm the decision of the Iowa Property Assessment Appeal
Board concluding Naumann‘s agricultural property in Adair county was
valued correctly.       Because we find no reversible error in the district
court‘s evidentiary ruling, that ruling does not provide a basis for
reversal.
       AFFIRMED.


       6The  version of section 441.38 in effect at the time of the district court‘s ruling
authorized the introduction of new evidence in the district court on judicial review of
IPAAB decisions. Iowa Code § 441.38(1) (2007). However, the statute has since been
amended to provide ―no new evidence . . . may be introduced in an appeal from the
[IPAAB] to the district court.‖ Id. § 441.38(1) (2009).
