ORDERS:
ORDER
I. Statement of the Case
This matter is a contested case brought by Richard L. Murphy (taxpayer) against the Orangeburg
County Assessor (assessor) concerning the classification of property for agricultural purposes for
property tax years 1995 and 1996. For the 1995 and 1996 tax years, the assessor denied agricultural
use classification on 46 acres of property identified as Tax Map No. 0133-00-00-051 located in
Orangeburg County, Orangeburg, South Carolina. For the 1995 tax year, but not the 1996 tax year,
the assessor denied agricultural use classification on eleven acres identified as Tax Map No. 0132-00-00-003 also in Orangeburg County. The taxpayers exhausted the prehearing remedies with the
assessor and the Orangeburg County Board of Assessment Appeals (County Board). The County
Board held the denials were proper. The taxpayer now seeks a contested case hearing before the
Administrative Law Judge Division (ALJD). This matter was heard on August 5, 1997. I conclude
no jurisdiction exits to hear the taxpayer's challenge to the 1995 denial of agricultural use on either
tract but that the 1996 denial of Tax Map No. 0133-00-00-051 must be modified to allow agricultural
use on 28 acres.
II. Issues
1. Did the taxpayers timely challenge the assessor's denial of agricultural use for tax year 1995
so as to invoke the jurisdiction of the ALJD?
2. Was agricultural use classification properly denied on the 46 acre tract for tax year 1996?
III. Analysis
A. Timely Protest of Tax Year 1995
1. Positions of Parties:
The taxpayer asserts he timely filed his applications for tax year 1995 and was not notified that the
applications were denied. Thus, the taxpayer asserts, the applications were approved. The assessor,
on the other hand, argues denial notices were sent to the taxpayer's normal mailing address, the
letters were not returned as undelivered mail, and no timely challenge was made by the taxpayer to
the denials. Since, in the assessor's view, the taxpayer did not challenge the denials within the
applicable thirty day time period, the lack of a protest denies jurisdiction over the 1995 tax year.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. On both the 11 acre and 46 acre tracts, with the exception of a twelve acre area on the 46 acre
tract used for a mobile home park, the taxpayer received agricultural use valuation for
property tax purposes for prior years through 1994.
2. The taxpayer applied for agricultural use classification on both properties for the 1995 tax
year on April 28, 1995.
3. On October 9, 1995, the assessor denied the agricultural use classification for the 1995
applications.
4. On October 9, 1995, letters to the taxpayer denying the agricultural use classification were
placed in the United States mail in an envelope addressed to the taxpayer at 658 Zion Church
Road, Orangeburg, South Carolina 29115.
5. The taxpayer's residence is 658 Zion Church Road, Orangeburg, South Carolina, and is the
address used by the taxpayer to receive mail.
6. The letters to the taxpayer were not returned to the assessor as undelivered letters.
7. The taxpayer received the assessor's denials of the agricultural use classification.
8. The taxpayer did not provide a written protest to the denials of agricultural use within thirty
days of the October 9, 1995 mailing date of the assessor's denial letter.
3. Discussion
A. Introduction
A hearing body always has the duty to determine whether it has jurisdiction of a matter. Bridges v.
Wyandotte Worsted Co., 243 S.C. 1, 132 S.E.2d 18 (1963). In general, subject matter jurisdiction
is met if the case is brought in the court which has the authority and power to determine the type of
action at issue. See Dove v. Gold Kist, Inc., 314 S.C. 235, 442 S.E.2d 598 (1994). However, even
where the hearing body has the general authority and power to hear the type of action at issue, the
General Assembly can choose to limit the specific authority of the hearing body to entertain that
matter. See McDonald v. Womack, 293 S.C. 61, 358 S.E.2d 705 (1987) (motion to dismiss for lack
of subject matter jurisdiction pursuant to Rule 12(b)(1), SCRCP granted where statute required the
disputed tax to be paid under protest before the court had the authority to hear the matter.) Thus,
while the ALJD has general subject matter jurisdiction over contested cases involving property tax
(see § 1-23-600 which places contested cases before the ALJD and § 12-60-20(4) which defines
contested case to include challenges of decisions from county boards of assessments), jurisdiction
vests in the ALJD only where the statutory authority permitting the hearing of those cases is
satisfied.
The assessor argues the ALJD has no subject matter jurisdiction since the taxpayer failed to timely
challenge the assessor's denial of the 1995 application as required by S.C. Code Ann. §§ 12-43-300
and 12-60-2510 (Supp. 1995). Thus, the issue requires a three-fold inquiry: first, what is the time
period in which to challenge the denial; second, did the taxpayer fail to meet that requirement; and
third, does a failure to meet such a requirement deny jurisdiction to the ALJD.
B. Procedure For Challenge To Agricultural Use Denial
For property tax purposes, all real property is separated into classifications, one of which is
agricultural real property. S.C Const. art. X, § 1(4). To obtain the agricultural use classification, a
taxpayer must file an application. § 12-43-220(d)(3). Even where a previous application has been
filed and approved in prior years, for the 1995 tax year, anyone who owned property that received
agricultural use classification for the 1994 tax year was required to "reapply to the . . . assessor to
maintain agricultural use classification." 1994 Act 406, § 6. Thus, where property was previously
classed as agricultural, a denial of continued agricultural use for the 1995 tax year constitutes a
change in classification. A taxpayer aggrieved by an assessor's change in classification must follow
the appeal procedures governing valuation disputes. Regs. 117-118. A taxpayer challenging a
valuation, and correspondingly a taxpayer disputing a denial of agricultural use, must give the
assessor written notice of the taxpayer's objection within thirty days after the assessor mails the
property tax assessment notice. §§ 12-43-300 and 12-60-2510.
C. Application Of LawTo Facts
Here, the most persuasive evidence establishes that on October 9, 1995, the assessor denied the
applications and mailed the denials to the taxpayer using the taxpayer's normal mailing address. The
testimony establishes that the assessor's office used a batch processing method of identifying non-qualifying taxpayers and for placing a large number of the denial letters in the mail. The assessor's
office established that it treated the taxpayer in the same manner as it did numerous other taxpayers'
denials. The evidence is persuasive that the denials used the taxpayer's correct address and that the
denial letters were not returned to the assessor's office undelivered. The evidence is sufficiently
persuasive to conclude the taxpayer received the notices of denial. See Noisette v. Ismail 299 S.C.
243, 384 S.E.2d 310 (S.C.App. 1989) rev'd on other grounds, 304 S.C. 56, 403 S.E.2d 122 (1991)
(notice of cancellation proven by insurer's evidence that insured's name appeared on a
computer-generated list of names of insureds whose policies were being canceled for non-payment
of premiums and that, under its normal internal procedures, everyone whose name appeared on the
list would be mailed a computer-generated notice of cancellation).
Accordingly, the taxpayer had thirty days from October 9, 1995 in which to make a written challenge
to the assessor's denial of agricultural use. Under the facts here, the taxpayer did not protest the
assessor's decision within thirty days. Rather the taxpayer did not seek to challenge the decision until
receiving his tax bills in the later part of the year after the thirty days had expired. Accordingly, the
taxpayer failed to timely challenge the assessor's decision.
D. Impact of Failure To Timely Challenge Assessor's Denial
A failure to satisfy the time-to-appeal requirements is fatal since an untimely appeal prohibits the
hearing body from deciding the matter. Mears v. Mears, 287 S.C. 168, 337 S.E.2d 206 (1985);
Burnett v. S.C. Highway Dep't, 252 S.C. 568, 167 S.E.2d 571 (1969); Stroup v. Duke Power Co.,
216 S.C. 79, 56 S.E.2d 745 (1949). See Lindsey v. South Carolina Tax Comm'n, ___ S.C. ___, 448
S.E.2d 577 (Ct. App. 1994) (in an appeal to a County Board, a timely appeal is required but may be
met by serving the objection either in person or by mail). Thus, the late appeal by the taxpayer in
this matter prevents the ALJD from hearing the taxpayer's challenge to the 1995 tax year.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:
1. A hearing body has the duty to determine whether it has jurisdiction of a matter. Bridges v.
Wyandotte Worsted Co., 243 S.C. 1, 132 S.E.2d 18 (1963).
2. Subject matter jurisdiction is met if the case is brought in the court which has the authority
and power to determine the type of action at issue. See Dove v. Gold Kist, Inc., 314 S.C.
235, 442 S.E.2d 598 (1994).
3. The ALJD has general subject matter jurisdiction over contested cases involving property tax
since contested cases are heard by the ALJD, and challenges to decisions made by county
boards of assessments are contested cases. S.C. Code Ann. §§ 1-23-600 and 12-60-20(4)
(Supp. 1996).
4. Even where the hearing body has the general authority and power to hear the type of action
at issue, the General Assembly can choose to limit the specific authority of the hearing body
to entertain that matter. See McDonald v. Womack, 293 S.C. 61, 358 S.E.2d 705 (1987)
5. Jurisdiction vests where the statutory appeal requirements are satisfied. S.C. Code Ann. §§
12-43-300 and 12-60-2510 (Supp. 1996).
6. A failure to satisfy the time limits for appeal is fatal since an untimely appeal prohibits the
hearing body from deciding the matter. Mears v. Mears, 287 S.C. 168, 337 S.E.2d 206
(1985); Burnett v. S.C. Highway Dep't, 252 S.C. 568, 167 S.E.2d 571 (1969); Stroup v.
Duke Power Co., 216 S.C. 79, 56 S.E.2d 745 (1949); See Lindsey v. South Carolina Tax
Comm'n, ___ S.C. ___, 448 S.E.2d 577 (Ct. App. 1994).
7. The ALJD lacks subject matter jurisdiction since the taxpayer failed to appeal the 1995
denial of agricultural use within thirty days of October 9, 1995. S.C. Code Ann. §§ 12-43-300 and 12-60-2510 (Supp. 1996).
B. Agricultural Use For Tax Year 1996(1)
1. Positions of Parties:
The taxpayer asserts he is actively farming the 46 acre tract such that the denial of agricultural use
is improper. The assessor argues the property is producing rental income from a mobile home park
to such a degree that an agricultural use is not the predominate use of the property.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. The taxpayer is the owner of forty-six (46) acres of land in Orangeburg County, South
Carolina, identified as Tax Parcel Number 0133-00-00-551.
2. Taxpayer farmed the forty-six (46) acres until the early 1980's.
3. Subsequent to the early 1980's, he planted portions of his farm in pine trees.
4. About 1990, eight acres of the forty-six (46) acres were used to create a mobile home park.
5. In 1994, four additional acres were added to the mobile home park for a total of twelve (12)
acres.
6. After excluding the twelve acre mobile home park, 34 acres of the total 46 acre tract remain
for classification.
7. Of the 34 acres, 6 acres is a pond, 18 acres are planted in trees, 6 acres are fields for future
tree planting, and 4 acres are used for power line rights-of-way.
8. The taxpayer notified the assessor that the taxpayer's property had rights-of-way within the
property and informed the assessor of the acreage and the location.
3. Discussion
The assessor is not denying the agricultural use of the taxpayer's property for a failure to demonstrate
an active agricultural use. Rather, while the assessor agrees "farming" is occurring, he argues the
predominate use of the property is not farming. Instead, in the assessor's view, the predominate use
is the production of rental income. After considering the law and the facts of this case, the taxpayer
is entitled to agricultural use on 28 acres of the 46 acre property.
A. General Rule of Multiple Use Property
The use of property for an agricultural use along with other uses creates a classification problem.
The general rule is that "if a particular piece of property is used for more than one purpose, then the
value of the total piece of property must be allocated on some equitable basis." Regs. 117-124.8
(1976). For example, a duplex with one side rented and the other side as the landlord's residence
gives 6% "other use" and 4% residential use with the square footage used to allocate the portions to
each classification. Regs. 117-124.8 (1976). The general rule, however, is not applicable to multiple
use property seeking agricultural classification.
B. Rule for Multiple Use of Agricultural Property
The applicable rule for classification of multiple use agricultural property depends upon the
expansiveness of the non-agricultural use. The expansiveness issue falls in two categories: a co-extensive use and a segregated use.
When the agricultural use and the "other use" encompass the entire property so as to be co-extensive
(e.g. raising timber and operating a hunting preserve both on the full extent of the land), the entire
property will receive agricultural use classification so long as the agricultural use is the most
significant use; if not the most significant use, none of the property will qualify as agricultural use.
Regs 117-114. On the other hand when the "other use" is a use segregated from the agricultural use,
so long as "at least fifty percent of a real property tract shall qualify as 'agricultural real property,'
the entire tract shall be so classified provided no other business for profit is being operated
thereon." (emphasis added) 12-43-230(a). When a business is operated for profit on the property,
the part that is agriculture receives agricultural use while the non-agricultural use is classified
according to the requirements of S.C. Const. art. X. Thus, 100% of the property cannot receive
agricultural use classification but only that portion actually used for agricultural use can receive
agricultural classification. For example, "if a farmer uses eighty percent of his land for agricultural
purposes and twenty percent for vacant land, his entire tract would qualify for agricultural use
provided no other business for profit is operated on the twenty percent vacant land. If the twenty
percent vacant land were used for business for profit, the entire tract would not qualify but only the
eighty percent actually used agriculturally." Jasper County Tax Assessor v. Westvaco Corp., 305
S.C. 346, 409 S.E.2d 333 (1991).
C. Application To Facts
Here, the taxpayer's tract is 46 acres. The application seeks agricultural use on the entire 46 acres.
The tract is a multiple use property with at least two uses: tree farming and business income from
a mobile home park. Since the property seeks agricultural use and since one of the uses is for tree
farming, the general rule of Regs. 117-124.8 does not apply. Rather the agricultural rule of Regs.
117-114 applies.
1. Co-extensive Use
Applying the rule of Regs. 117-114, the evidence shows the uses (tree farming and mobile home
park) are not co-extensive in that the entire property is not used for both uses. Accordingly, the co-extensive rule will not allow agricultural use classification for 100% of the property.
Correspondingly, the decision of whether the agricultural use is the predominate use is not relevant.
Regs 117-114.
2. Segregated Use
A 100% agricultural use classification could still be a possibility since the evidence establishes the
uses of the property are segregated: 12 acre mobile home park on one end and the remaining 34 acres
on the other. However, to obtain a 100% agricultural classification, at least fifty percent of the
property must be used as 'agricultural real property,' and no business can be operated for profit on
the property. Here, a business is operated for profit (mobile home park), and thus the tract of 46
acres cannot qualify for 100% agricultural use.
Having established that a 100% agricultural use is not allowed, the next step is determining if a
portion of the property qualifies. Here, obviously, the 12 acre mobile home park is not used for
agricultural use and cannot qualify. Other property, however, may qualify.
The 34 acres that remain consists of 4 acres for power line rights-of-way, 6 acres in fields for future
tree planting, a pond of 6 acres, and 18 acres planted in trees. In deciding whether any or all of these
34 acres qualify for agricultural use, the assessor has not denied the application on the basis the
taxpayer is not actively engaged in agricultural use. Instead, the assessor argues the 4 acres of power
line rights-of-way are dormant and thus not in agricultural use and the 6 acres for future planting
were likewise not in agricultural use for 1996. Further, the assessor argues the 6 acre pond and the
18 acres of planted trees "are only a portion of the entire tract and do not qualify." Petitioner's Exh.
1, Letter of assessor to taxpayer.
In this case the 4 acres of power line rights-of-way qualify for agricultural use. Agricultural use
covers rights-of-way within lands used for agricultural purposes where the agricultural use is applied
for by the taxpayer and supported by documentation of existence, location, and acreage of the rights-of-way. § 12-43-220, final proviso (Supp. 1996). Here, the taxpayer notified the assessor that the
taxpayer's property had rights-of-way within the property and informed the assessor of the acreage
and the location. Thus, the 4 acres qualify for agricultural use.
As for the 6 acre pond and the 18 acres of trees, the assessor's basis for denial is that they "are only
a portion of the entire tract and do not qualify." As previously examined, the size of the portion
relative to the total 46 acres is not the deciding factor. In the absence of any other basis for denying
these 24 acres, such qualify for agricultural use.
The 6 acres in fields for future planting of trees, however, do not qualify for agricultural use.
Agricultural use must be a use in progress and not a planned or expected use.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:
1. In general "if a particular piece of property is used for more than one purpose, then the value
of the total piece of property must be allocated on some equitable basis." Regs. 117-124.8
(1976).
2. The general rule, however, is not applicable to multiple use property seeking agricultural
classification. Regs 117-114.
3. When the agricultural use and the "other use" encompass the entire property so as to be co-extensive (e.g. raising timber and operating a hunting preserve both on the full extent of the
land), the entire property will receive agricultural use classification so long as the agricultural
use is the most significant use and if not the most significant use, none of the property will
qualify as agricultural use. Regs 117-114.
4. When the "other use" is a use segregated from the agricultural use, so long as "at least fifty
percent of a real property tract shall qualify as 'agricultural real property,' the entire tract shall
be so classified provided no other business for profit is being operated thereon."
(emphasis added) § 12-43-230(a).
5. When a business is operated for profit on the property, 100% of the property cannot receive
agricultural use classification, but the part that is agriculture receives agricultural use and the
part that is non-agricultural use is classified according to the requirements of S.C. Const. art.
X. Jasper County Tax Assessor v. Westvaco Corp., 305 S.C. 346, 409 S.E.2d 333 (1991).
6. The taxpayer's tract of 46 acres seeks agricultural use for a multiple use property for which
the general rule for allocation does not apply but for which the agricultural rules apply. Regs.
117-124.8 and Regs. 117-114.
7. Since the uses of the property for tree farming and rental income from a mobile home park
are not co-extensive uses of the 46 acre tract, the co-extensive rule will not allow agricultural
use classification for 100% of the property. Regs. 117-114 and Jasper County Tax Assessor
v. Westvaco Corp., 305 S.C. 346, 409 S.E.2d 333 (1991).
8. The decision of whether the agricultural use is the predominate use is not a relevant inquiry
for a property whose uses are not co-extensive. Regs 117-114 and Jasper County Tax
Assessor v. Westvaco Corp., 305 S.C. 346, 409 S.E.2d 333 (1991).
9. Even though the uses on the 46 acre tract are segregated, agricultural use classification is not
allowed for 100% of the tract since a for profit business of operating a mobile home park is
conducted on the property. Jasper County Tax Assessor v. Westvaco Corp., 305 S.C. 346,
409 S.E.2d 333 (1991).
10. The 12 acre mobile home park is not used for agricultural use and cannot qualify for
agricultural classification.
11. The 4 acres of power line rights-of-way qualify for agricultural use since the taxpayer applied
for agricultural use on the rights-of-way within lands used for agricultural purposes and since
the taxpayer supported the rights-of-way by documentation of existence, location, and
acreage. § 12-43-220, final proviso (Supp. 1996).
12. Since the uses of the 46 acre tract are segregated uses, denying agricultural use to the 6 acre
pond and the 18 acres of trees is erroneous when such denial is based on the assertion that
they "are only a portion of the entire tract and do not qualify." Jasper County Tax Assessor
v. Westvaco Corp., 305 S.C. 346, 409 S.E.2d 333 (1991).
13. The 6 acres of fields being held for future planting of trees does not qualify for agricultural
use since agricultural use must be a use in progress and not a planned or intended future use.
Regs. 117-114.
IV. ORDER
Based upon the foregoing Discussion, Findings of Fact, and Conclusions of Law, the following
ORDER is issued:
The taxpayer's challenge to the assessor's denial of agricultural use for the 1995 tax year of 46 acres
identified as Tax Map No. 0133-00-00-051 located in Orangeburg County, Orangeburg, South
Carolina and of eleven acres identified as Tax Map No. 0132-00-00-003, is dismissed for lack of
subject matter jurisdiction. The taxpayer's challenge to the assessor's denial of agricultural use for
the 1996 tax year of 46 acres identified as Tax Map No. 0133-00-00-051 is modified to allow
agricultural use on 28 acres consisting of 6 acres of pond, 4 acres of rights-of-way and 18 acres of
standing trees.
IT IS SO ORDERED.
RAY N. STEVENS
Administrative Law Judge
This 2nd day of September, 1997.
Columbia, South Carolina
1. The assessor's Prehearing Statement seems to assert no jurisdiction exists for tax year 1996
due to the taxpayer's failure to present a timely written challenge to the assessor's denial. However,
the assessor's denial for 1996 is dated October 4, 1996. The taxpayer's protest was received by the
assessor on October 31, 1996. Accordingly, the thirty day requirement is satisfied and jurisdiction
is available. §§ 12-43-300 and 12-60-2510. |