Cost of remediation appropriate to consider when determining value of contaminated property for ad valorem purposes.In a case of first impression in that state, the Colorado Court of Appeals ruled that a valuation of contaminated property for ad valorem According to value. The term ad valorem is derived from the Latin ad valentiam, meaning "to the value." It is commonly applied to a tax imposed on the value of property. purposes that factored in the government-mandated cost to remediate the property conformed with constitutional and statutory requirements. The Douglas County Board of Equalization In communications, techniques used to reduce distortion and compensate for signal loss (attenuation) over long distances. (Board) determined that on January 1, 2001, the market value of property owned by DuPont de Nemours & Company (DuPont) was $2,000,386. The property consists of 849.713 acres adjacent to the town of Louviers, Colorado. DuPont manufactured explosives on the property from 1908 until 1989, and the manufacturing operation contaminated portions of the property. This contamination resulted in a governmental compliance order requiring DuPont to clean and remediate the property. Evidence established that the environmental remediation would cost between $4 million and $32 million. DuPont's experts claimed that the market value of the property was only $315,000 based on its current earnings and the use of portions of the property as grazing land. The Board of Assessment Appeals (BAA) resolved the dispute in favor of DuPont. The Board of Equalization appealed. The appellate court said that the question of whether the cost to cure, when mandated by a governmental entity, should be deducted from the property value used for ad valorem tax Ad Valorem Tax A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments. purposes had not been determined by Colorado courts. The court concluded that deducting the cost to cure required by a governmental remediation order is the better approach to determining the value of a parcel when it is clear that, even by conservative estimates, the cost of remediation is greater than the value of the property if it were in a clean condition. Thus, the court agreed with the BAA that the DuPont property was, for all practical purposes, valueless at this time. The order of the BAA was affirmed. E.L DuPont de Nemours v. Douglas County Board of Equalization Colorado Court of Appeals January 2, 2003 Certiorari certiorari In law, a writ issued by a superior court for the reexamination of an action of a lower court. The writ of certiorari was originally a writ from England's Court of Queen's (King's) Bench to the judges of an inferior court; it was later expanded to include writs Denied August 25, 2003 (AJ/08/Spg.04-$10) |
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