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SC Administrative Law Court Decisions

CAPTION:
Lexington County Assessor vs. Mary M. Hendrix

AGENCY:
Lexington County Assessor

PARTIES:
Petitioners:
Leslie Smith, Lexington County Assessor

Respondents:
Mary M. Hendrix
 
DOCKET NUMBER:
97-ALJ-17-0660-CC

APPEARANCES:
For the Petitioner: Jeff M. Anderson, Esquire

For the Respondent: Gene W. Hendrix (POA)
 

ORDERS:

FINAL DECISION

STATEMENT OF THE CASE


This is a case brought by the Lexington County Assessor (Assessor) against Mary M. Hendrix concerning whether the Respondent's property should be classified as agricultural for the property tax year 1997. The Respondent applied for and was denied agricultural assessment by the Assessor's Office. Afterwards, the Lexington County Board of Assessment Appeals granted the agricultural assessment. The Assessor is now seeking a hearing before the Administrative Law Judge Division. The parties requested that the decision in this matter be rendered solely upon the written materials submitted by the parties. In an Order dated January 26, 1998 I granted that request and issue this Final Decision based on the written evidence submitted by the parties.

ISSUE


Do the provisions of S.C. Code Ann. § 12-43-232(1)(a) (Supp. 1997) require the Assessor to classify any of the Respondent's property as agricultural?

DISCUSSION


The Respondent asserts that 1.39 acres of her 3.39 acre tract meet all of the requirements of the referenced Code section. More specifically, the Respondent claims that although the subject property does not meet the minimum acreage requirement of 12-43-232(1)(a), it nevertheless qualifies under the provision which allows for tracts of timberland of less than five acres which are under the same management system as a tract of timberland which meets the minimum acres requirement to be treated as part of the qualifying tract.



FINDINGS OF FACT


Based upon the written evidence submitted by the parties, and taking into consideration the burden of persuasion, I make the following Findings of Fact by a preponderance of evidence:

1. The parties requested that the decision in this matter be rendered solely upon the written materials submitted by the parties.

2. The property is located in Lexington County, South Carolina, and is identified on the Lexington County Tax Map as Tax Map Number 4496-02-030.

3. The Respondent timely filed an application for agricultural assessment. The Assessor thereafter disapproved the agricultural use classification.

4. The Respondent filed a written objection with the Assessor and appealed the matter to the Lexington County Board of Assessment Appeals. The Assessment Appeals Board heard this matter and concluded that the 1.39 acres of the subject property should be classified as agricultural.

5. The Assessor has appealed the decision of the Lexington County Board of Assessment Appeals.

6. The Respondent is the owner of a parcel of real estate consisting of 3.39 acres. Located on the 3.39 acres is a portion of the property classified as legal residence and two mobile homes which are presently classified as rental properties.

7. The subject property has a residence, two mobile homes, and some standing timber. The area with timber consists of 1.39 acres of land. The Respondent's son, Gene W. Hendrix, owns property in the surrounding area, approximately 1,000 feet from the Respondent's property, which is classified as agricultural property. However, Mr. Hendrix's property is not contiguous to the Respondent's property.

8. The Petitioner introduced a "Timber Management Agreement" (TMA) signed by the three sons of Respondent (of whom Gene Hendrix is acting in Respondent's capacity with a Power-of-Attorney). However, the timber management plan of Mr. Hendrix was not submitted into evidence.

9. The Petitioner also introduced a bid for timber on the approximately 4 acres of the Respondent's property from Corley & Sons, a forestry company, in the amount of $3,800.00. He also submitted a checkbook record that indicates a payment for trees. However, that record does not establish what trees were taken or from what property the trees were taken.

CONCLUSIONS OF LAW


Based upon the above findings of fact, I conclude as a matter of law the following:

1. S.C. Code Ann. § 12-60-2540 (Supp. 1997) authorizes the Division to hear this contested case pursuant to Chapter 23 of Title I of the 1976 Code of Laws, as amended.

2. The Respondent's contention is that the property is agricultural property pursuant to S.C. Code Ann. Regs.117-114 (1982) and S.C. Code Ann. § 12-43-232(1)(a) (Supp. 1997).

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. 1997). Furthermore, S.C. Code Ann. Regs. 117-114 (1982) sets forth that "in no event shall real property be classified as agricultural real property when such property is not used for bona fide agricultural purposes. . . ."

4. 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, including the preparation of the products raised thereon for man's use and disposed of by marketing or other means." S.C. Code Ann. § 12-43-230(a) (Supp. 1997).

5. In 1979, the General Assembly directed the South Carolina Department of Revenue and Taxation (Department) to promulgate a regulation designed to provide a more detailed definition of "agriculture real property" and 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. 1997).

6. Pursuant to that mandate, Regulation 117-114 was promulgated. Regulation 117-114 provides that 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. Real property is not used for agricultural purposes unless the owner or lessee thereof has, in good faith, committed the property to that use. Real property which is ostensibly used for agricultural purposes, and which is, in reality, used for other purposes, is not agricultural real property. The agricultural use of the property must be genuine in nature as opposed to a sham or deception. S.C. Code Ann. Regs. 117-114 (1982).

7. "In interpreting a statute, this Court's primary function is to ascertain the intent of the legislature." Whitner v. South Carolina, 1997 WL 680091, at *2 (S.C. 1997). "The interpretation of a term set forth in a statute should support the statute and should not lead to an absurd result. . . . Further, in interpreting a statute, one does not look merely at a particular clause in which a word may be used, but rather looks at the word and its meaning in conjunction with the purpose of the whole statute, and in light of the object and policy of the law." South Carolina Coastal Council v. South Carolina State Ethics Comm'n, 306 S.C. 41, 45-46, 410 S.E.2d 245 (1991). "The cardinal rule of statutory construction is to ascertain and effectuate the legislative intent whenever possible. [citations omitted]. All rules of statutory construction are subservient to the one that legislative intent must prevail if it reasonably can be discovered in the language used, and that language must be construed in the light of the intended purpose of the statute. Kiriakides v. United Artists Communications, Inc., 312 S.C. 271, 440 S.E.2d 364 (1994)." City of Camden v. Brassell, ___ S.C. ___, 486 S.E.2d 494, 495 (Ct. App. 1997).

8. The Respondent seeks to prove the "economic merchantability" of her property by the timber bid of Corley & Sons. Furthermore, she submits a checkbook receipt showing a possible harvesting in 1978 reflecting the past use of the land for growing and harvesting timber. Finally, she produced a "Timber Management Agreement" as evidence that she is actually engaged in the business of harvesting timber upon this property.

The property is located in a residential/commercial area and is adjacent to Respondent's residence and two mobile homes. Respondent states in a correspondence dated July 27, 1997 to the Lexington County Board of Assessment Appeals that the County "should . . . recognize a TREE IS A TREE AND $3,800 WORTH MAKE [sic] A FOREST ON 1.39 ACRES." This statement illustrates the crux of the problem. Apparently, Respondent's baseline assumption is that a tree is a commercial timber in and of itself. The law favors the agricultural use classification upon 5 acres or more of timberland, with exceptions for some smaller properties. The subject property in dispute is 1.39 acres of a 3.39 acre tract. It is clear that the location and size of Petitioner's acreage is not indicative of the bona fide use of the property for the production of timber. Simply put, the "economic utility of harvesting such a small tract is minimal." See Shah v. Lexington County Assessor, 95-ALJ-17-0296-CC. Furthermore, the landowner is an elderly woman who does not actively engage in business transactions in the timber industry. The son, acting on behalf of his mother and the owner of the 6.67 acre tract with whom the TMA purportedly manages, is a resident of Virginia, and engages in business in South Carolina on behalf of family members.

Finally, S.C. Code Ann. § 12-43-232(1)(a) states:

If the tract is used to grow timber, the tract must be five acres or more. Tracts of timberland of less than five acres which are contiguous to or are under the same management system as a tract of timberland which meets the minimum acreage requirement are treated as part of the qualifying tract. Tracts of timberland less than five acres are eligible to be agricultural real property when they are owned in combination with other tracts of nontimberland agricultural real property that qualify as agricultural real property. For the purposes of this item, tracts of timberland must be devoted actively to growing trees for commercial use.

The issue here is whether tracts under the same management plan may be joined to obtain the agricultural use classification. Respondent is correct in stating the law does not explicitly require common ownership of tracts under a management plan. However, it can be inferred that the intent of the legislature was not to allow every citizen with a tract of property that has a tree to join a management system and gain agricultural use property classification. Whole communities could join a plan to establish a timber management system for their yards, and obtain agricultural use classification. If such a practice were allowed, almost every tract of property could be classified as agricultural. This is not to say that if a property obtains agricultural use status and then joins in a management plan with another property by a different owner it would be wrong. However, each property must be able to obtain the classification on its own ground and merits, rather than bootstrapping properties into the agricultural use classification on the bona fide establishment of one property's assessment.

The TMA fails to present any evidence of a deliberate harvesting or planting on the property, nor of any real intent to cultivate, harvest or plant in the future. It refers to a management plan for another property, but that other plan has not been submitted as evidence. The bid for timber and the checkbook record do not establish what trees were taken or from where the trees were taken. Assuming arguendo that the payment was for trees from the subject property, Petitioner asks this Court to hold that a single timber sale in the past 20 years qualifies a property for an agricultural use classification forever.

In this case, the trees are growing of their own volition and no evidence has been presented to show they have been "managed" or "cared for" in any way other than a normal individual would care for a yard. Consideration of the above factors establishes that the Respondent's property is not used in actively growing timber as required by S.C. Code Ann. § 12-43-232(1)(a) and is not under a proper management system. Accordingly, the property does not qualify for the agricultural use classification.

ORDER


Based upon the Findings of Fact and Conclusions of Law, it is hereby:

ORDERED AND ADJUDGED that the disputed 1.39 acres of land of the Respondent's property designated as Tax Map Number 4496-02-030 shall not receive agricultural real property classification for the tax year 1997.

AND IT IS SO ORDERED.

__________________________________

Ralph King Anderson, III

Administrative Law Judge

Columbia, South Carolina

April 14, 1998


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