ORDERS:
ORDER
I. Statement of the Case
This contested case brought by Claudia and Sinkler Warley (taxpayers) against the Orangeburg
County Assessor (assessor) concerns the classification of property for agricultural purposes for
property tax year 1996. The assessor denied agricultural use classification on several tracts of land.
The taxpayers exhausted the prehearing remedies with the assessor and the Orangeburg County
Board of Assessment Appeals and are now seeking a contested case hearing before the
Administrative Law Judge Division (ALJD). Section 12-60-2540(A) grants jurisdiction to the ALJD
with this matter heard on August 5, 1997. Under the facts of this case, the taxpayers' property
qualifies for agricultural use for the 1996 tax year.
II. Issues
Are the taxpayers' properties entitled to agricultural use classification for the tax year 1996?
III. Analysis
1. Positions of Parties:
The taxpayers assert their property should remain in an agricultural classification. They argue the
property has been applied to the agricultural use of timber farming. The assessor argues the acreage
has been changed to lots and that the lots have been platted so as to deny the use of an agricultural
classification.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. The taxpayers are the owners of Lot 13B and Lots 21C-28C located in Orangeburg County,
which lots front on Warley Road.
2. Lot 13B is identified as Tax Parcel Number 0190-00-01-025, and Lots 21C-28C are
identified as Tax Parcel Number 0190-00-01-026.
3. Lot 13B does not qualify for a septic tank permit.
4. Lots 21C-28C do not qualify for septic tank permits.
5. Prospective buyers have declined further investigation of Lot 13B and Lots 21C-28C upon
learning no septic tank permits were available.
6. The rear of Lot 13B and Lots 21C-28C are contiguous to a tract of land owned by the
taxpayers consisting of 15.6 acres of timberland containing pine trees and hardwoods.
7 The taxpayers own approximately 60 acres of timberland across Warley Road.
8. Upchurch Timber Company has purchased pine and hardwood cut from Lot 13B, Lots 21C-28C, from the 15.6 acres contiguous with Lots 13B and 21C-28C, and from the
approximately 60 acres of timberland across Warley Road.
9 Timber sales in 1995 were $12,823.30 and in 1996 were $6,064.20.
10. Taxpayers contacted a forester in the past to develop a tree planting plan but did not
implement a plan.
11. In July of 1997, the taxpayers obtained a forestry plan from the South Carolina Forestry
Commission for Lot 13B, Lots 21C-28C, the 15.6 acres contiguous with these lots, and the
60 acres across Warley Road.
3. Discussion
A. Applicable Law
Two statutes and a regulation primarily control the granting of agricultural use: S.C. Code Ann. §
12-43-220(d) (Supp. 1996), § 12-43-232 (Supp. 1996) and Regs. 117-114. Section 12-43-220(d)
grants a use value to agricultural real property "actually used for agricultural purposes." 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 animals useful to man. S.C. Code Ann. §
12-43-230 (a) (Supp. 1996). To prevent agricultural use for any real property not used for a bona
fide agricultural purpose, DOR was directed to promulgate a regulation addressing "bona fide
agricultural purpose."
To decide if property is used for a "bona fide agricultural purpose," S.C. Code Regs. 117-114 (1976)
expresses several factors for examination. These factors include 1) the nature of the terrain, 2) the
density of the marketable product (timber, etc.) on the land, 3) the past usage of the land, 4) the
economic merchantability of the agricultural product, 5) the use or not of recognized care,
cultivation, harvesting and like practices applicable to the product involved, and any implemented
plans thereof, and 6) the business or occupation of the landowner.
Finally, under § 12-43-232 (Supp. 1996), if the tract is used for timberland, not only must the
timberland be devoted actively to growing trees for commercial use but also the size of the tract is
a significant factor. In general the tract must be at least five acres in size. An exception, however,
permits agricultural use on a tract less than five acres where the "too small" tract is contiguous to
or are under the same management system as a tract of timberland which is five acres or more.
B. Law Applied To Facts
1. Active Agricultural Use
Here, a consideration of the relevant factors shows the property is actively used for growing timber.
The terrain is such that timber is removable from the property and the timber density supports a
commercial offering. By way of contrast, at least for the 1996 tax year, the property was incapable
of use for residential purposes since no septic tanks permits were possible due to soil texture and
wetness, and no public sewage system was available.
Additionally, the past usage of the land demonstrates an active timber use. For example, Upchurch
Timber Company purchased pine and hardwood cut from Lot 13B, from Lots 21C-28C, from the
15.6 acres contiguous with Lots 13B and 21C-28C, and from the approximately 60 acres of
timberland across Warley Road. Timber sales in 1995 were $12,823.30 and in 1996 were $6,064.20.
Such sales establish the economic merchantability of the timber.
Finally, the taxpayer has demonstrated the use of recognized care, cultivation, and harvesting
practices since he has contacted a forester in the past to develop a tree planting plan and has obtained
a forestry plan from the South Carolina Forestry Commission for Lot 13B, Lots 21C-28C, the 15.6
acres contiguous with these lots, and the 60 acres across Warley Road. Considering all factors, the
property is in active use as agricultural property used to grow timber.
2. Property Contiguous With Larger Tract
Not only is an active use present but also the property meets the size requirement for timber property.
While, in general, a timber tract must be at least five acres, a smaller tract will qualify if the less than
five acre tract is contiguous to or under the same management system as a tract of timberland which
is five acres or more. § 12-43-232(1)(a). Here, Lot 13B and Lots 21C-28C are contiguous to a 15.6
tract of timberland containing pine trees and hardwoods. The 15.6 acre tract is actively used for
timber production and has been harvested in the past. Thus, the actively used timber properties of
Lots 13B and Lots 21C-28C satisfy the size requirements of § 12-43-232.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:
1. The assessor is authorized to grant or deny requests for agricultural use classifications. S.C.
Code Ann. § 12-43-220(d)(3) (Supp. 1996).
2. The assessor is authorized to remove the agricultural status of a property since, in the absence
of a prohibiting statute, the authority to grant a status carries with it the authority to remove
that status. See 53 C.J.S. Licenses § 51 (1987); See S.C. Code Ann. § 12-37-90(g)(Supp.
1996).
3. Agricultural use value is granted to agricultural real property "actually used for agricultural
purposes." S.C. Code Ann. § 12-43-220(d) (Supp. 1996).
4. Agricultural real property "actually used for agricultural purposes" 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 animals useful to man. S.C. Code Ann. § 12-43-230 (a)
(Supp. 1996).
5. DOR was directed by the General Assembly to promulgate a regulation designed to exclude
from the use assessment any real property not used for a bona fide agricultural purpose. S.C.
Code Ann. § 12-43-230 (a) (Supp. 1996).
6. While no single factor is controlling in determining if real property is used for a bona fide
agricultural purpose, consideration may be given to the nature of the terrain, the density of
the marketable product (timber, etc.) on the land, the past usage of the land, the economic
merchantability of the agricultural product, the use or not of recognized care, cultivation,
harvesting and like practices applicable to the product involved, and any implemented plans
thereof, and the business or occupation of the landowner. S.C. Code Regs. 117-114 (1976).
7. While, in general, a timber tract must be at least five acres, a smaller tract will qualify if the
less than five acre tract is contiguous to or under the same management system as a tract of
timberland which is five acres or more. S.C. Code Ann. § 12-43-232(1)(a) (Supp. 1996).
8. Since Lot 13B and Lots 21C-28C are actively used for timber production and the lots are
contiguous to a 15.6 acre tract of timberland of pine trees and hardwoods, the lots qualify for
agricultural use for the 1996 tax year. S.C. Code Ann. §§ 12-43-220 and 12-43-232 (Supp.
1996).
IV. ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, the following ORDER is issued:
The assessor is directed to grant agricultural use classification for the taxpayers' Lot 13B and Lots
21C-28C for the 1996 tax year.
IT IS SO ORDERED.
RAY N. STEVENS
Administrative Law Judge
This 2nd day of September, 1997 |