ORDERS:
FINAL DECISION
STATEMENT OF THE CASE
This matter came before me upon request of Petitioner,
the Charleston County Assessor ("Assessor"), pursuant to S.C.
Code 12-60-2540(a) contesting the decision of the Charleston
County Board of Assessment Appeals ("Board"), classifying certain
real property identified as PID#s 195-00-00-011, 018, 020 through
025, 027 and 028, as agricultural use property for the tax year
1995. John S. Templeton, Charles M. Huff and R. Thomas Savage,
Jr. ("Taxpayers"), contested the assessment by the Assessor to
the Board. After the Board held a hearing and made its
determination in favor of the Taxpayers, the Assessor sought a
contested case hearing before the Administrative Law Judge
Division ("Division"). A contested case hearing was conducted
on June 26, 1996, at the Division's offices in Columbia, South
Carolina.
ISSUE
The sole issue in dispute is whether Taxpayers' properties
are entitled to an agricultural use classification, valuation,
and assessment for the tax year 1995.
POSITIONS OF THE PARTIES
The properties in question are lots or parcels of land
("parcels") located within the Ravens Bluff Plantation
subdivision ("subdivision"), owned individually by the
Taxpayers. The subdivision, owned and developed by Ravens Point
Plantation Partnership, a South Carolina general partnership
("Partnership"), was subjected to restrictive covenants and a
conservation easement dated June 10, 1993. S.C. Code Ann.
12-43-232, as amended in May, 1994, provides that unimproved
real property subject to a perpetual conservation easement, as
provided in Chapter 8 of Title 27, must be classified as
agricultural real property. The Assessor argues that the
property at issue has been improved and therefore this statutory
provision is inapplicable. The Taxpayers argue that their
parcels of land are unimproved and must be assigned the
agricultural use assessment ratio.
I conclude that the properties should not be classified as
agricultural real property for the tax year 1995.
FINDINGS OF FACT
Based upon the evidence presented, I make the following
findings of fact, taking into consideration the burden of the
parties to establish their respective cases by a preponderance of
the evidence and taking into account the credibility of the
witnesses:
1. This Division has personal and subject matter
jurisdiction.
2. Notice of the date, time, place and nature of the
hearing was timely given to all parties.
3. Ravens Bluff Plantation subdivision, located on Johns
Island in Charleston County, South Carolina, consists of 153.607
acres and is a part of the property formerly known as Tracts B
and C of Ravens Point Plantation. It consists of twenty-one (21)
tracts or parcels. The restrictive covenants and the final
survey authorize the construction of one single family residence
together with reasonable appurtenances and improvements of a
residential or agricultural nature on parcels 1 through 20;
however, parcel 21, which contains 57.466 acres (of which 30.996
acres is freshwater wetlands), is restricted for agricultural use
only and is utilized as a nature preserve.
4. There are no paved roads, curb cuts, water lines, or
sewer lines within the subdivision. Electric and telephone lines
have been installed along the buffer zones.
5. Taxpayers are the owners of ten parcels located within
the subdivision. They are as follows:
a. Lot 2 containing 13.24 acres of which 8.22 acres is
highlands and 5.02 acres is saltwater and freshwater wetlands.
The tax map number assigned is 195-00-00-011. The owners are
John S. Templeton and Charles M. Huff.
b. Lot D7 containing 3.8 acres of which the entire sum
is highlands. The tax map number assigned is 195-00-00-018. The
owner is John S. Templeton.
c. Lot 1 containing 7.118 acres of which 5.2 acres is
highlands and 0.918 acres is saltwater and freshwater wetlands.
The tax map number assigned is 195-00-00-020. The owner is John
S. Templeton.
d. Lot 3 containing 7.864 acres of which the entire
sum is highlands. The tax map number assigned is 195-00-00-021.
The owners are John S. Templeton and Charles M. Huff.
e. Lot 4 containing 5.636 acres of which the entire
sum is highlands. The tax map number assigned is 195-00-00-022.
The owners are John S. Templeton and Charles M. Huff.
f. Lot 5 containing 3.765 acres of which the entire
sum is highlands. The tax map number assigned is 195-00-00-023.
The owners are John S. Templeton and Charles M. Huff.
g. Lot 6 containing 5.673 acres of which 0.621 acres
is freshwater wetlands. The remainder is highlands. The tax map
number assigned is 195-00-00-024. The owner is Charles M. Huff.
h. Lot 7 containing 4.336 acres of which 3.005 acres
is highlands and 1.331 acres is saltwater and freshwater
wetlands. The tax map number assigned is 195-00-00-025. The
owner is Charles M. Huff.
i. Lot 9 containing 1.672 acres of which the entire
sum is highlands. The tax map number assigned is 195-00-00-027.
The owner is R. Thomas Savage, Jr.
j. Lot 10 containing 2.101 acres of which 0.076 acres
is freshwater wetlands and the remainder is highlands. The tax
map number assigned is 195-00-00-028. The owner is R. Thomas
Savage, Jr.
6. None of the parcels owned by the Taxpayers have any
structures in the form of houses, barns or other buildings
constructed thereon.
7. On May 18, 1993, Charleston County Council ("Council")
granted conditional approval of a plat and survey of the Ravens
Bluff Plantation subdivision. Council, as a part of its action
on that date, also granted certain variances to roads and for
water drainage in the subdivision. Conditions for the approval
were that the roads and drainage system must be constructed in
accordance with those variances and plans which had been
previously approved by the Charleston County Department of Public
Works ("Department"). An additional condition by Council was
that the roads must be privately maintained by the subdivision's
Homeowners Association ("Association"). A letter from Council to
the Partnership, advising of the conditional approval, further
stated that it was Council's understanding that the subdivision
owners would grant to the Low Country Open Land Trust, Inc.
("Trust") a conservation easement on all parcels of land and the
road system located within the subdivision.
8. On October 5, 1993, Council granted final plat approval
of the subdivision. By letter dated October 8, 1993, Council
noted that the roads and drainage system had been constructed in
accordance with the approved variances and that they would be
privately owned and maintained by the Association. The approval
of the plat included stipulations that parcels 2 through 6, 10
through 13, 16 and 18 through 20 met minimum health department
standards for modified conventional subsurface disposal systems
only. Further, parcel 21 could not be used as a building lot.
9. Restrictive covenants dated June 10, 1993 were placed
upon the parcels in the subdivision through their recordation on
June 11, 1993 in Book C-228 at page 559 at the Charleston County
Register of Mesne Conveyance office. On the same date and in the
same instrument, the Partnership granted the conservation
easement to the Trust.
10. The conservation easement was granted pursuant to the
provisions of S.C. Code Ann. 27-8-10 et seq. Also,
approximately fifty-seven and one-half acres were set aside as a
nature preserve for agricultural use where residential use was
prohibited. Further, the conservation easement provided for
selective cutting of vegetation thereon to ensure the
preservation of the vistas and the natural conditions within the
preserve area. However, the Partnership reserved for itself and
future owners, including the Association, the right to own and
manage any portion of the reserve property, the right to
construct water and/or sewer lines or the right to grant
easements for their construction and maintenance over, under or
across the conservation easement property provided. Any such
improvements would be located and constructed within the
property subject to the easement granted to the Berkeley Electric
Cooperative ("Cooperative"). The twenty (20) residential parcels
are surrounded by vegetative buffer zones of fifty (50), seventy-five (75) and two-hundred (200) feet in width.
11. The Partnership proceeded with the construction of two
extensions of the old dirt road, each approximately seven hundred
(700) feet. These extensions lead to lots which are suitable for
construction of residences. The entire roadways, including two-thousand, two-hundred (2,200) feet of the old dirt roadbed and
the two seven hundred (700) feet extensions, were leveled and
graded with crushed limestone rock, called ROC. Also, the
drainage system was installed. Electrical and telephone service
lines were laid underground within the easement granted to the
Cooperative.
12. The Partnership sold the parcels of land for prices
ranging from $40,000 to $120,000 each. It does not provide water
or sewerage service to any of the parcels. Further, public
sewerage is not available to the parcels in the subdivision.
13. On June 17, 1994, Randolph W. Cooper, Esquire,
representing the Partnership, requested that the Assessor's
office calculate the agricultural roll back taxes for the
subdivision, advising that parcels were being sold and this
calculation and information was needed as soon as possible.
14. On August 15, 1994, the Assessor notified the Auditor
of the roll back, proceeded with the roll back calculation and
simultaneously advised the Partnership that its request for the
roll back in property taxes had been accepted.
15. On March 31, 1995, Taxpayers applied for a reversion to
the previous agricultural use assessment. This request by the
Taxpayers for a reversion was subsequently denied by the Assessor
and the Taxpayers appealed to the Board, alleging that their
"unimproved" parcels were subject to the conservation easement
and must be given the agricultural use assessment.
16. On April 12, 1996, the Board concluded that Taxpayer's
parcels were entitled to the agricultural use assessment for
the year tax 1995 pursuant to the provisions of S. C. Code 12-43-232(3)(d).
17. The Partnership expended some $75,000 for construction
and improvements to the roadbeds and approximately $65,000 for
surveys and engineering.
18. The value of the subdivision and the parcels located
therein were increased as a result of their platting and
surveying, the extension and reconstruction of the roads, the
construction of a drainage system and the installation of
electrical and phone service systems. The parcels were placed on
the market by the Partnership and sold for prices from $40,000.00
to $120,000.00 each.
DISCUSSION
The issue in dispute is whether the amendment to 12-43-232(3)(d) requires the assessment of the parcels at issue as
agricultural since it states that "unimproved real property
subject to a perpetual conservation easement *** must be
classified as agricultural real property." Taxpayers argue that
their parcels are "unimproved" within the meaning of this statute
until buildings are constructed on them. The Assessor, however,
contends that all property within the subdivision was "improved"
upon completion of surveying and platting of the subdivision and
the recordation of the survey, the reconstruction and additions
to its roads, the construction of the drainage system and the
installation of underground electrical and telephone services.
Further, the Assessor argues that such "improvements" add to the
value of each parcel within the subdivision.
The primary rule of statutory construction is to ascertain
and give effect to the intent of the legislature. Gilstrap v.
South Carolina Budget and Control Board, 310 S.C. 210, 423 S.E.2d
101 (1992); Mid-State Auto Auction of Lexington, Inc. v. Carl
Altman d/b/a Altman Auto Sales and Western Surety Company,
Opinion 24490, filed September 3, 1996, Advance Sheet 24. This
rule derives from the doctrine of separation of powers and the
powers in the legislature to make laws. Courts are not to
speculate on legislative intent since to do so would be an
assumption of legislative power. Independence Insurance Company
v. Independent Life and Accident Insurance Company, 218 S.C. 22,
61 S.E.2d 399 (1950). Further, if a statute's terms are clear
and unambiguous, they must be taken and understood in their
plain, ordinary and popular sense unless it fairly appears from
the context that the Legislature intended to use such terms in a
technical or peculiar sense. Etiwan Fertilizer Company v. S.C.
Tax Commission, 217 S.C. 354, 60 S.E.2d 682 (1951); Greenville
Enterprise v. Jennings, 210 S.C. 163, 41 S.E.2d 868 (1947).
Further, unless there is something in the statute requiring a
different interpretation, the words used in a statute must be
given their ordinary meaning. Hughes v. Edwards, 265 S.C. 529,
220 S.E.2d 231 (1975).
In construing a statute, its words must be given their plain
and ordinary meaning without resorting to subtle or forced
construction to limit or expand the statute's operation. First
Baptist Church of Malden v. City of Malden, 308 S.C. 226, 417
S.E.2d 592 (1992). It is never to be supposed that a single word
was inserted in a statute without the intention thereby of
conveying some meaning. Davenport v. City of Rock Hill, S.C.
, 432 S.E.2d 451 (1993).
The "plain meaning rule" has a corollary and is subject to
an exception. The corollary is that when a statute is ambiguous,
or is not plain, such as in this case, the court can resort to
other evidences of legislative intent. The court must go beyond
the borders of the statute.
Generally, usual rules of statutory construction apply to
the interpretation of statutes relating to taxation. A tax
statute should be construed with the view to ascertaining and
giving effect to the intent of the legislature. Meredith v.
Elliot, 247 S.C. 335, 147 S.E.2d 244 (1966).
Agricultural real property, as the term is used in the
statute, means a tract of real property which is used for
agricultural purposes. It is real property on which products are
grown or raised and prepared for man's use for disposal of them
by marketing or other means. The purpose of a conservation
easement, among other things, is to retain or protect the
natural scenic or open-space aspect of real property. S.C. Code
Ann. 27-8-20(a).
Taxpayers assert that the term "unimproved" in 12-43-232(3)(d) simply means property such as that in question, which
does not have any structures, such as houses or barns,
constructed on it. On the other hand, the Assessor urges a
broader reading of the term "unimproved," in which "improvements"
refer not only to structures, but also to any measures taken to
increase the value of the property, such as the building of roads
and the installation of electric lines.
There have been a number of cases in other jurisdictions
which interpret the word "unimproved" in connection with
property. In University of Alaska v. Shanti, 835 P.2d 1225
(Alaska 1992), the court had before it the issue whether a
sledding accident occurring on a hill was on property which was
unimproved land so as to exempt the University from tort
liability. The court held:
"The adjective `improved' when used to describe real
estate generally denotes land containing man-made
additions, usually of a permanent nature, which tend to
increase the value of the property. Black's Law
Dictionary, 6th Edition (1990) defines `improved land'
as `real estate whose value has been increased by
landscaping and addition of sewers, roads, utilities
and the like.' Conversely, `unimproved land' is
defined as `lands, once improved, that have reverted to
a state of nature, as well as lands that have never
been improved.'"
835 P.2d at 1230.
In the case of Commonwealth of Pennsylvania v. Safeguard
Mutual Insurance Company, 478 Pa. 592, 387 A.2d 647 (1978), where
the contention of the State was the same as the Taxpayers here,
the court had before it the issue whether an insurance company
could invest in certain property. The statute involved
prohibited such investment unless the property was "improved".
The court found that the property was improved even though it had
no structures thereon, stating:
"The Department argues that the tract is unimproved
because there is no structure on it. That is not
required. The tract has electricity and water and
sewer service are readily available. The land has been
cleared for development. *** [T]he property can be
considered improved for purpose of the Act, since it is
readily marketable at an ascertained value."
387 A.2d at 652. See also Builders Land Co. v. Martens, 122
N.W.2d 189 (Iowa 1963) (laying out of streets and other changes
in property incidental to the development of a subdivision
constituted "improvements" for tax assessment purposes); Billman
v. Crown-Trygg Corp., 205 Ill. App.3d 916, 563 N.E.2d 903 (See
App. 1 Dist. 1990) ("improvements" need not only enhance the
value of property, but may also enhance the beauty or utility of
property or adapt it to different or further purposes); Watson
Bros. Realty Co. v. Douglas County, 149 Neb. 799, 32 N.W.2d 7631
(1948) ("improvements" include not only buildings and fixtures,
but also many other things which are not buildings or fixtures).
Taxpayers cite three cases from Words and Phrases: Coles v.
Coles, 37 A. 1025 (N.J. 1897), Robb v. Robb, 34 A. 237 (Pa.
1896), and Stearling-Nash Corporation v. Combes, 122 N.Y.S.2d 413
(N.Y. App. Div. 1953).
The latter case deals with zoning for business and simply
holds that a lot which has been leveled and paved with retaining
walls would not remove the lot from the "unimproved category" so
as to take it out of the jurisdiction of the Zoning Board of
Appeals. Coles deals with the intent of a testatrix and use of
the word "unimproved" in a will. In Robb the Pennsylvania court
also looked to the intent of a will's drafter in construing its
language and further held that "in the open country mere fencing
and cultivation are sufficient to constitute improved lands."
A review of the foregoing authorities supports the
Assessor's contention that "improvements" include not only
structures, but also any man-made additions to the land which
tend to increase its value. The real estate here at issue, which
has had additions of roads, a drainage system, underground
electricity and phone service, as well as being staked and
platted and which is available for sale and further development
has had its value increased. It is "improved" within the terms
and intent of the Statute at issue.
CONCLUSIONS OF LAW
Based upon the foregoing findings of fact, I conclude, as a
matter of law, the following:
1. S.C. Code Ann. 12-60-2540 (Supp. 1995) authorizes the
South Carolina Administrative Law Judge Division to hear
contested cases pursuant to Chapter 23 of Title 1 of the 1976
Code, as amended.
2. Agricultural real property is any tract of real
property which is used to raise, harvest or store crops, feed,
breed or manage livestock, or to produce plants, trees, fowl or
other animals useful to man. S.C. Code Ann. 12-43-230(a) (Supp.
1995).
3. An agricultural use classification is granted to
agricultural real property "actually used for agricultural
purposes." S. C. Code Ann. 12-43-220(d) (Supp. 1995).
4. Conservation easements are recognized in South
Carolina pursuant to S. C. Code Ann. 27-8-10 et. seq.
Unimproved real property subject to a perpetual conservation
easement as provided in Chapter 8 of Title 27 must be classified
as agricultural real property. S.C. Code Ann. 12-43-232(3)(d)(Supp. 1995).
5. In construing a statute, its words must be given their
plain and ordinary meaning without resorting to subtle or forced
construction to limit or expand the statute's operation. First
Baptist Church of Malden v. City of Malden, 308 S.C. 226, 417
S.E.2d 592 (1992). Statutory construction is within the province
of the courts. Johnson v. Pratt, 200 S.C. 314, 20 S.E.2d 865
(1942). The cardinal rule of statutory construction is that a
court is to ascertain and effectuate the actual intent of the
Legislature; to ascertain this intent, statutes which are part
of the same act must be read together. Burns v. State Farm Mutual
Automobile Ins. Co., 297 S.C. 520, 377 S.E.2d 569 (1989). When
interpreting a statute, legislative intent must prevail if it can
be reasonably discovered in the language used, which must be
construed in light of the intended purpose of the statutes.
Gambrell v. Travelers Insurance Company, 280 S.C. 69, 310 S.E.2d
814 (1983).
6. The term "improved," when used to describe real
property, generally denotes land containing manmade additions,
usually of a permanent nature, which tend to increase the value
of the property. Black's Law Dictionary, Abridged Sixth Edition
(1991) defines "improved land" as "real estate whose value has
been increased by landscaping and addition of sewers, roads,
utilities and the like." Conversely, "unimproved land" is
defined as including "lands, once improved, that have reverted to
a state of nature, as well as lands that have never been
improved." University of Alaska v. Shanti, 835 P.2d 1225 (Alaska
1992). The word "improve" is defined as "to make better, to
increase the productivity or value of land, to make beneficial
additions or changes and to become better." The American
Heritage College Dictionary, Third Edition (1993).
7. Raw property or property lying in its natural state
which has been platted, staked, divided into lots and had roads
built leading to the lots therein and wherein underground
electrical and phone services hare been made available, is
transformed into improved realty .
8. The addition or construction of a structure on real
property is not essential for real property to be converted into
"improved property".
9. The Taxpayers' lots are "improved" within the meaning
of S.C. Code Ann. 12-43-232(3)(d) and therefore do not qualify
as agricultural property.
ORDER
Based upon the foregoing findings of fact and conclusions of
law, it is hereby,
ORDERED that the Taxpayers' properties, identified as PID#s
195-00-00-011, 018, 020 through 025, 027 and 028 are not
qualified for agricultural use classification, valuation or
assessment for the tax year 1995.
AND IT IS SO ORDERED.
______________________________MARVIN F. KITTRELL
CHIEF JUDGE
Columbia, South Carolina
October 16, 1996
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