West Two Rivers Ranch v. Pennington County, Nos. 19142

• Court: Supreme Court of South Dakota
• Writing for the Court: GILBERTSON; MILLER
• Citation: 1996 SD 70,549 N.W.2d 683
• Decision Date: 29 November 1995
• Docket Number: 19230,Nos. 19142
• Parties: WEST TWO RIVERS RANCH, Appellant, v. PENNINGTON COUNTY, South Dakota, Appellee. WEST TWO RIVERS RANCH, Appellant, v. MEADE COUNTY, South Dakota, Appellee. . Considered on Briefs

Page 683

549 N.W.2d 683 1996 SD 70 WEST TWO RIVERS RANCH, Appellant,
v.
PENNINGTON COUNTY, South Dakota, Appellee.
WEST TWO RIVERS RANCH, Appellant,
v.
MEADE COUNTY, South Dakota, Appellee. Nos. 19142, 19230. Supreme Court of South Dakota. Considered on Briefs Nov. 29, 1995.
Decided June 12, 1996.

Bruce A. Hubbard, Hansen and Hubbard, Sturgis, for appellant.

Ronald D. Buskerud, Pennington County Deputy State's Atty., Rapid City, for appellee Pennington County.

Michael A. Jackley, Meade County State's Atty., Strugis, for appellee Meade County.

GILBERTSON, Justice.

¶1 Taxpayer appeals the valuation for tax purposes of his ranch which lies across two counties. We consolidated the appeals which arose out of Pennington and Meade County circuit courts' affirmances of administrative law judges' decisions. We affirm the decision of the Meade County Circuit Court. We reverse and remand the Pennington County action to the circuit court of the Seventh Judicial Circuit.

FACTS AND PROCEDURE

¶2 West Two Rivers Ranch (Ranch) encompasses approximately 30,000 acres. Portions of the ranch are located in Meade and Pennington counties. The county boundary separating the Ranch is the Cheyenne River. ¹

¶3 The portion of the Ranch within Meade County, 19,356.58 acres, was assessed in 1994 by Meade County Director of Equalization, Kirk Chaffee, as having a true and full value of $41.25 per acre. The Director used a formula utilizing cash rent values, soil surveys, and comparable sales to arrive at this valuation. The Director compared Ranch with six sales of property with similar soil ratings as Ranch's. These sales occurred in 1992 and 1993 and had an average selling price of $57.66 per acre.

¶4 A portion of the Ranch within Pennington County, approximately 2,500 acres, was assessed in 1994 by David Potts, a certified appraiser from the Pennington County Director of Equalization Office, as having a true and full value of $85.00 per acre. The assessor used a similar method as was employed in Meade County, that is, a comparison of the subject property with soil surveys and comparable sales. County presented evidence of twenty sales occurring in 1992 and 1993, with an average selling price of $164.10 per acre, which were used as comparable sales in valuing the Ranch. Based on its finding that seven percent of the land, while tillable, could not be accessed with farm equipment, the administrative hearing officer reduced County's assessment to $83.00 per acre.

¶5 Ranch appealed these valuations in each county to the county's board of equalization, the Office of Administrative Hearings, and the circuit court. The valuations were affirmed at each step of the appeals process, with the exception of the $2.00 per acre downward adjustment made by the administrative law judge sitting in Pennington County. The ALJ sitting in Meade County found, and Ranch conceded in its brief to the circuit court, that the extreme isolation and inaccessibility of the property were considered in the Meade County valuation.

STANDARD OF REVIEW

¶6 "Value is a question of fact and the trial court's determination will only be overturned if it is clearly erroneous." Lincoln Twp. v. S.D. Bd. of Equalization, 1996 SD 13, p 24, 543 N.W.2d 256, 259. The construction of a statute and its application to particular facts present a question of law, reviewed de novo. Johnson v. Rapid City

Page 686

Softball Ass'n, 514 N.W.2d 693, 695 (S.D.1994). ANALYSIS AND DECISION

¶7 All real property in South Dakota is to be assessed for tax purposes at its true and full value. SDCL 10-6-33. The assessor's valuation is presumed to be correct, and the taxpayer bears the burden to overcome this presumption. Roseland v. Faulk County Bd. of Equalization, 474 N.W.2d 273, 275 (S.D.1991); Mortenson v. Stanley County, 303 N.W.2d 107, 110 (S.D.1981). See also Lincoln Twp., 1996 SD 13, p 5, 543 N.W.2d at 257. Apart from the statutes governing assessment of property for taxation purposes, the following constitutional provisions must be complied with:

(1) the burden of taxation of all property is to be equitable, S.D. Const. art. XI, § 2, (2) agricultural and nonagricultural property may be separated into distinct classes for tax purposes, S.D. Const. art. VIII, § 15, (3) valuation of property is not to exceed its actual value, S.D. Const. art. XI, § 2, and (4) taxation is to be uniform on all property in the same class. S.D. Const. art. VIII, § 15; S.D. Const. art. XI, § 2.

Codington County Bd. of Comm'rs v. Bd. of Equalization, 433 N.W.2d 555, 557 (S.D.1988).

¶8 Agricultural land is assessed pursuant to SDCL 10-6-33.1 which provides:

The true and full value in money of agricultural land, as defined by § 10-6-31, which has been in primarily agricultural use for at least five successive years immediately preceding the tax year for which assessment is to be made shall be the market value as determined for each county through the use of all comparable sales of agricultural land based on consideration of the following factors:

(1) The capacity of the land to produce agricultural products as defined in § 10-6-33.2; and

(2) The soil, terrain and topographical condition of the property including but not limited to capability, the land's use, climate, accessibility and surface obstructions which can be documented through an analysis of land selling prices;

The comparable sales that are used shall be evidenced by an instrument recorded with the register of deeds of the county in which the land is located, if the date of such instrument and the recording date is not more than two years prior to the assessment year.

The ALJ reviewing the Meade County appeal found the soil survey used by the Director in valuing Ranch's soil considered the factors listed in the statute. The Pennington County valuation was also calculated using the soil survey classification. See Mortenson, 303 N.W.2d at 112.

A. MEADE COUNTY ASSESSMENT

¶10 Ranch appeals from the Meade County assessment raising two issues: 1) whether it was error to assess the property separately by county rather than as a whole unit; and 2) whether the statutes governing assessment of the property are constitutional.

I. Whether Ranch's entire tract of land, overlapping two counties, must be assessed as a whole?

¶12 Ranch argues the entire 30,000 acre tract of property must be assessed as one unit. However, Ranch admits in its brief to this Court that "the present agricultural valuation statutes neither require such consideration nor, perhaps, even permit it.... Appellant is unable to locate either statutes or cases upon the point...." Our search also fails to yield any law which supports Ranch's contention that its property should be valued as one unit rather than separately by each county in which it lies. SDCL 10-3-16 supports the separate assessment by county as it provides, in relevant part, that "[e]ach county in this state is an assessment district."

¶13 Ranch offers two cases to support its argument: Wiggins v. Shewmake, 374 N.W.2d 111 (S.D.1985), and Brockel v. Lewton, 319...