Telkamp v. South Dakota State Bd. of Equalization, No. 18035

• Court: Supreme Court of South Dakota
• Writing for the Court: HENDERSON; MILLER, C.J., and AMUNDSON; SABERS; WUEST
• Citation: 515 N.W.2d 689
• Parties: Harold TELKAMP and Edward Telkamp, Trustee, Appellees, v. SOUTH DAKOTA STATE BOARD OF EQUALIZATION, Appellant.
• Docket Number: No. 18035
• Decision Date: 25 May 1994

Page 689

515 N.W.2d 689 Harold TELKAMP and Edward Telkamp, Trustee, Appellees,
v.
SOUTH DAKOTA STATE BOARD OF EQUALIZATION, Appellant. No. 18035. Supreme Court of South Dakota. Argued Feb. 9, 1993.
Decided April 27, 1994.
Rehearing Denied May 25, 1994.

Mark Barnett, Atty. Gen., David D. Wiest, Asst. Atty. Gen., Pierre, for appellant.

Alan F. Glover of Denholm and Glover, Brookings, for appellees.

HENDERSON, Justice.

PROCEDURAL HISTORY/ISSUE

Following a July 18, 1991, hearing regarding the valuation of two parcels of property owned by Appellees (Telkamps), the South Dakota State Board of Equalization (Board) upheld the assessment calculations of Beryle Sessions, Director of Equalization, Brookings County. On review, the circuit court reversed the assessment. Board appeals asking if the State Constitution and statutes of the State of South Dakota allow preferential treatment of agricultural land. On de novo review, we find the assessment statutorily permissible and reverse the circuit court, remanding for reinstatement of the Board's decision.

FACTS

The Telkamp family initially owned in excess of a quarter section of land in Brookings County. In recent years, large portions of this agricultural property have been sold to commercial developers, leaving Harold Telkamp with 3.844 acres and Edward Telkamp as trustee for 88.18 acres located in the city of Brookings, Brookings County, South Dakota. In 1991, the Board assessed Harold's land at $3,285 per acre and Edward's land at $2,875 per acre. ¹ Prior to this assessment, both parcels were assessed below $400 per acre. Because of recent high dollar commercial sales of agricultural land within the city of Brookings, ranging from $1,314 to $9,325 per acre, the Board elevated the values of agricultural property within the city limits of Brookings which could be sold for commercial, residential, or industrial purposes.

Both the Telkamps and the Board have stipulated that the land in question is agricultural and has been for at least five years. They agree that the highest and best use for the land would be commercial, industrial, or residential and that the land will eventually be sold for that purpose, rather than for agricultural use. However, if the Board's decision was reversed, parties agreed that the land would be assessed at $500 per acre. Such reversal did occur via the circuit court's ruling, namely, the Board considered factors beyond the statutory directives for assessing the property. Board appeals.

DECISION

Inasmuch as the circuit court ruled the Board was not in compliance with legislative directives, we ordinarily would ascertain if that decision was clearly erroneous. Kindsfater v. Butte County, 458 N.W.2d 347 (S.D.1990). As the gist of this matter concerns the interpretation of the assessment statutes and State Constitution, a question of law, fully reviewable by this Court, must be decided.

Page 691

Matter of SDDS, Inc., 472 N.W.2d 502, 507 (S.D.1991).

On January 18, 1992, Telkamps and Board stipulated to the following pertinent facts:

5. That all of [Telkamps'] property described in this case was property classified as agricultural property on January 1, 1991, pursuant to SDCL 10-6-31.3.

10. That the highest and best use of the subject properties is for commercial, industrial, or residential development.

12. That the highest and best use of the subject property is not an agricultural use of that property.

15. That the subject property will never again be sold for agricultural purposes.

18. That the values placed upon the subject properties by the South Dakota Board of Equalization is [sic] an accurate representation of what the subject properties would sell for commercial, industrial, or residential purposes.

These written and signed stipulations are binding. In re Estate of Eberle, 505 N.W.2d 767 (S.D.1993). Prior to the stipulation date, most of the Telkamp property had been sold for commercial development. Wal-Mart, for example, purchased 9.6 acres at $21,562 per acre. Although the Telkamps continued to use the remaining acres for farmland, the Board assessed the acreage, due to its highest and best use, at a rate higher than other farmland in Brookings County. SDCL 10-6-33.6 provides authority for this differentiation in assessment:

If the median value per acre in an identifiable region within a county deviates by more than ten percent from the county average, the county director of equalization may establish a separate market value per acre for the land defined by the director of equalization within that region. (Emphasis added.)

Finding the sales of Telkamp land to be well above the ten percent deviation from the county average, the Board established a separate market value...