Court Opinion

ID: 9709347
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:45:35.079938+00
Date Added: 2024-06-11T18:22:47.940160
License: Public Domain

RUDOLPH, J.
This is an original proceeding in certiorari to review the action of the State Board of Equalization.
It appears that at the 1956 meeting of the State Board of Equalization the valuation of all classes of property as returned to the State Board by the counties in the state was increased from approximately $1,800,000,000 to $2,500,000,000 This increase in valuations as made by the State Board is the basis of relators’ claim that the State Board exceeded its jurisdiction and that its action is void in its entirety.
The relators make three principal contentions. First, that the State Board of Equalization is prohibited by SDC 57.0415 from in any way raising the total valuation of property in the state as returned to the State Board by the several counties. Second, that the State Board is without power to increase valuation apart from the prohibition contained in SDC 57.0415. Third, that by increasing the total valuations from $1,800,000,000 to $2,500,000,000 the State Board acted arbitrarily and capriciously and in excess of its jurisdiction.
We briefly consider first the function of this court in this proceeding. Obviously, we are not sitting as a State Board of Equalization nor are we in this proceeding permitted to review mere errors or irregularities, if any, committed by the State Board. Our only function is to inquire into and determine whether the State Board acted without jurisdiction or in excess of the jurisdiction conferred by law. State ex rel. American Express Company v. State Board of Assessment and Equalization, 3 S.D. 338, 53 N.W. 192.
We think it essential to preface our subsequent holding with a brief history of the duties and function of the State Board of Equalization. Ch. 28, Laws of 1897, § 44, prescribed the duties and powers of the State Board of Equalization as follows:
*441“It shall be the duty of said board to examine and compare the returns of the assessment of the property of the several counties of the state, and proceed to equalize the same, so that all the taxable property in the state shall be assessed at its true and proportionate value; but said board shall not reduce the aggregate assessed valuation in the state, but may increase said aggregate valuation in such an amount as may be reasonably necessary to obtain a just and true value and equalization of all the property in the state.”
Sec. 45 of the same Act provides:
“Said board has the power and shall:
“First. Equalize the assessment of land by adding to the aggregate assessed value thereof, in every county in which said board may believe the value to be too low, such rate per centum as will raise the same to its proper proportionate value and by deducting from the aggregate assessed value thereof, in every county in which said board may believe the valuation to be too high such per centum as will reduce the same to its proper (proportionate) value. Town and city lots (shall be equalized in the same manner as herein provided for) equalizing lands, and, at the option of said board may be combined and equalized with lands.”
The second paragraph of Section 45 provides for the equalization of the assessment of personal property in substantially the same manner as provided for the equalization of land and the third paragraph of this section provides:
“Said board, in making such equalization, may add to or deduct from the aggregate assessed valution of lands, town or city lots or any other class of personal property throughout the state, such per centum as may (be) deemed by the board to be equitable and just, but in all cases of addition to or deduction from the assessed valuation of any class of property in the several counties, or throughout the state, the rate per cent of addition or deduction shall be even and not fractional.”
The provisions of Sec. 45 of the 1897 Act above quoted and referred to have remained in our law practically unchanged until the present time and are now found as part of SDC 57.0420. We think it clear that in 1897 wherein it was *442provided in Sec. 45 that if the Board “believed the valuation to be too low” the basis upon which such belief was to be founded was provided in Sec. 44 of that Act by the following language: “* * * but may increase said aggregate valuation in such an amount as may be reasonably necessary to obtain a just and true value and equalization of all the property in the state.” In other words, it appears that at that time the basis on which the State Board was to make its determination was the “just and true value” of the property.
The provisions of the 1897 law were modified by Sec. 2, Ch. 44, Laws of 1901. The duties of the State Board were therein prescribed as follows:
“It shall be the duty of said board to examine and compare the returns of the assessment of the property of the several counties of the state, and proceed to equalize the same so that the taxable property of the several counties shall be assessed at its proportionate value, but said board shall not increase the aggregate assessed valuation in the state as equalized by the boards of county commissioners by more than three million dollars, * * *”.
It should be noted, however, that although the duties of the State Board were changed somewhat the provisions of the above quoted Sec. 45 of the 1897 Act remained. In 1903, Laws 1903, c. 65, the $3,000,000 limitation was changed to $100,000,000 so under this 1903 Act the State Board could increase the aggregate assessed valuation as returned by the counties to the extent of $100,000,000 and at a time when the total assessed valuation of the state was only $186,973,276. See Thirtieth Annual Report,- Department of Finance, page 129. In other words, following the 1903 amendment which increased the limitation from $3,000,000 to $100,000,000 the State Board of Equalization was permitted to increase the aggregate assessed valuation of the state by something more than 50%. It should be noted also that this 1903 Act empowered the State Board to not only equalize the valuations but to “assess if necessary.”
This 1903 law further provided, “Any board of assessment and of equalization of state, county, city or township shall have power, and is hereby required to equalize and to *443assess if necessary the property of any individual, association or corporation so that it shall be assessed as required by law.” This provision of the 1903 law has been carried in our law until the present time, and is now found among the powers of the State Board contained in SDC 57.0420 wherein it is provided, “It [State Board] shall have the power and is required to equalize and to assess, if necessary, the property of any person, partnership, association, company or corporation so that it shall be assessed as required by law.”
Ch. 352, Laws of 1913, created the State Tax Commission and transferred to such commission the powers and duties of the State Board of Equalization. Sec. 10 of that Act, among other things, provided that the Tax Commission »* * * haye power to equalize the assessment of all property in this state between persons, firms or corporations of the same assessment-district, between cities and townships of the same county and between different counties of the state, and the property assessed by said commission in the first instance; such powers to be possessed by said commission regardless of any limitation now fixed by law in regard to the increase of the aggregate valuation which may be made by said board, * *
It appears, therefore, that in 1913 all limitation upon the action of the State Board of Equalization in increasing aggregate valuations as returned by the counties was removed and there is at present no limitation upon the State Board in this respect unless such limitation be found in SDC 57.0415, which will be hereinafter discussed. Ch. 186, Laws of 1933 transferred the power to equalize the assessment of the property in the state from -the Tax Commission to the State Board of Equalization. Presently the powers, duties and jurisdiction of the State Board of Equalization are found in SDC 57.0419 and SDC 57.0420, the material parts of which we quote.
“57.0419. State Board of Equalization: general jurisdiction; notice required for increase of individual assessment. The State Board of Equalization shall have power to equalize the assessment of all property in the state between persons of -the same assessment district, between cities, towns, and townships of the same county and between different *444counties of the state and the property assessed by the State Board of Equalization in the first instance.
“In equalizing the assessment between persons of the same assessment district no increase of any individual assessment shall be made without notice to the person in whose name the property is assessed,which notice shall specify a time and place of hearing on the proposed increase in assessment and may be given by personal service thereof or by registered mail.
“57.0420. Meeting date of State Board: specific powers and duties; methods prescribed for equalization. The State Board of Equalization shall sit as such commencing on the first Monday of August in each year and shall continue until its duties are completed. A majority of the Board shall constitute a quorum and may act for the Board. It may adjourn from time to time by public announcement at time of the. adjournment. It shall keep and file a record of its proceedings in duplicate, one with the State Auditor and one with the Secretary of Finance, either of which records shall at all times be open to public inspection.
“It shall have power and is required to equalize and to assess, if necessary, the property of any person, partnership, association, company, or corporation so that it shall be assessed as required by law.
“In connection with its general and specific powers and duties, among other things it shall:
“(1) Equalize the assessment of land and structures thereon, separately, by adding to the aggregate value thereof, in every county in which the board may believe the valuation to be too low, such rate per cent as will raise the same to its proper proportionate value, and by deducting from the aggregate assessed value thereof, in every county in which the Board may believe the value to be too high, such per cent as will reduce the same to its proper proportionate value. Town and city lots shall be equalized in the same manner as herein provided for equalizing lands;
“(2) Equalize the assessment of personal property by adding to the aggregate assessed value of any class of personal property of every county in which it believes such valuation to be too low, such *445rate per cent as will raise the same to its proper proportionate value, and by deducting from the aggregate assessed value of any class of personal property, in every county in which the Board may believe the valuation to be too high, such per cent as will reduce the same to its proper proportionate value;
“(3) Such Board, in making such equalization, may add to or deduct from the aggregate assessed valuation of lands, town, or city lots, and structures thereon, separately, or any class of personal property throughout the state, such per cent as may be deemed by the Board to be equitable and just, but in all cases of addition to or deduction from the assessed valuation of any class of property in the several counties, or throughout the state, the rate per cent of addition or deduction shall be even and not fractional.”
We consider now SDC 57.0415 which has been referred to above. The protesting taxpayers argue strenuously that the clause in this section of our law which states “* * * thg state Board of Equalization shall not in any way raise the total valuation of such property within the state” places a limitation upon the State Board which it has exceeded in this instance. This section of our Code came into our law as a part of Ch. 255, Laws of 1931. This 1931 Act is entitled “An Act for the Classification and Evaluation of Land in the Counties, and Providing Procedure Therefor.” This Act provides for a petition signed by at least 20% of the resident freeholder electors of the county, action on this petition by the Board of County Commissioners and certification of such action to the Director of Taxation. Thereafter the Director of Taxation is directed to appoint some person competent to classify the lands in the county subject to taxation. The procedure is rather detailed, and it is only with reference to land classified and valued under the provisions of the 1931 Act, which has been carried over into our Code commencing with SDC 57.0412, that the limitation with reference to raising values by the State Board applies. It appears that no' land has been classified or valued under the provisions of this 1931 Act either before or after the adoption of our Code and it seems clear to us, therefore, that this limitation has no application whatsoever *446in this present proceeding. As stated, the limitation relates to lands valued and classified in a particular manner and there are no such lands so classified or valued in this state at the present time.
We are convinced that when the Legislature in 1913 abolished all limitation in regard to the increase of the aggregate valuation of property in the state by the State Board it intended to do exactly what it said and not having subsequently provided any limitation upon the State Board with regard to increasing valuations there is no' such limitation now existing and the matter is left entirely to the discretion of the State Board of Equalization subject only to constitutional limitations.
It is important to note, we believe, that the statute, SDC 57.0420, provides no method which the State Board shall adopt in equalizing property values. The statute simply provides that if the Board “believe the valuation to be too low” or “believe the valuation to be too high”. Certainly this broad language leaves the State Board with a wide discretion upon which to base its judgment in the process of equalization. The contention is made that the statute wherein it provides that after a determination that the valuation is too low or too high, the Board shall raise or lower “the same to its proper proportionate value” provides a basis upon which to equalize the assessments. But it seems to us that the phrase “raise the same to its proper proportionate value” has no meaning standing alone. It is only after determining whether the “valuation to be too low”, that the phrase assumes a meaning. To be proportionate it must be proportionate to something. It seems to us that to give effect to the whole section the Board must first determine a standard upon which to determine whether the valuation be too high or too low, and then raise or lower according to that standard so that the property in one county will bear a proper proportionate value to the property in other counties.
Throughout the history of our tax laws it has always been contemplated that property in this state should be valued for the purposes of taxation at its true and full value as provided presently in SDC 57.0334. This is the standard *447which our law has fixed for the purposes of taxation and when the law provides that if the State Board “believe the valuation to be too low”, true and full value is the only-standard the Legislature has provided upon which the Board might base such belief. Unless the State Board has used as a method or basis for equalizing property a standard in excess of true value, we are convinced that there is no basis for complaint in this case. As stated above, the Board is vested with a wide discretion and any reasonable method may be used to accomplish its purpose provided true and full value is not exceeded. As stated in Cooley on Taxation, Vol. 3, Fourth Edition, § 1196, “Where a statute empowers a State Board to equalize valuations for taxation, but does not point out the mode, any reasonable and efficient mode may be adopted. Such boards may take as a standard the particular assessment roll which, in its judgment, most nearly represents a true valuation, and conform the others to it.”
At the outset of its proceedings the State Board adopted a resolution as follows:
“Whereas, it is impossible to determine from the county assessment records what percentage of full and true value their assessments represent; and
“Whereas, dependable ratio studies have been made from official records in the various counties; and
“Whereas, such studies disclose in some instances that the assessments exceed the true and full value,
“Now, Therefore, Be It Resolved that it is the adopted policy of the South Dakota State Board of Equalization to
“(A) By comparison with full and true values as shown by the aforementioned ration studies, determine during the course of the equalization the mean or average percentage of full and true value at which a representative number of those counties nearest approaching the full and true value have been assessed as required by the South Dakota statutes; and
“(B) Use this percentage as a standard factor or coefficient.
*448“(C) Equalize assessments between counties by applying this factor throughout the State to arrive at the equalization contemplated by the law.
“(D) that all official meetings of the State Board of Equalization shall be open tO' the public, and the Press be invited.”
It is contended that the policy as expressed in this resolution by the State Board is not a reasonable and efficient mode or method on which to arrive at the equalization of property in this state. It appears from the resolution that the Board in the exercise of its judgment concluded that the ratio studies before it were “dependable”. It was the Board’s function to determine from the best information available and in the exercise of its own judgment whether the valuations as returned by the assessors were too low or too high. In its determination it was imperative that the Board have some standard upon which to operate and as appears from the resolution it selected as this basis or standard the “average percentage of full and true value at which a representative number of those counties nearest approaching the full and true value have been assessed as required by the South Dakota statutes, * * We believe the action of the Board was entirely justified. It recognized the true and full value was the goal but it also recognized the realities and in recognizing those realities, selected a representative number of counties which nearest approached the statutory requirement of true and full value and by this means obtained a factor or standard to form the basis of its action in the process of equalization. We find nothing arbitrary, unreasonable or capricious in the method thus adopted.
Our statutes vest in the State Board a wide range of entities among which values are to be equalized. We have read a large number of cases and considered many statutes of various jurisdictions and have found no statute which permits the State Board to equalize on such a broad scale as do the statutes of this state. SDC 57.0419 provides:
“The State Board of Equalization shall have power to equalize the assessment of all property in the state between persons of the same assessment district, between cities, towns, and townships of the *449same county and between different counties of the state and the property assessed by the State Board of Equalization in the first instance.”
SDC 57.0420 further defining the powers of the State Board provides:
“It shall have power and is required to equalize and to assess, if necessary, the property of any person, partnership, association, company, or corporation so that it shall be assessed as required by law.”
As we read these statutory provisions the jurisdiction of the State Board is practically without limitation other than constitutional limitations and the statutory requirement of notice. It is directed to equalize the assessment of property between individuals of the same assessment district, between the assessment districts in the same county and between the different counties of the state and also between the property assessed by the State Board or Commissioner of Revenue in the first instance. It appears, therefore, that the process of equalization by the State Board is a complicated one and a process which the law contemplates should be left exclusively to that body and no one else.
The action of the Board considered in the light of its broad and comprehensive powers cannot be held to be in excess of its jurisdiction.
We have considered other questions raised by relators and have concluded that none of these questions defeat the jurisdiction of the State Board.
The writ of certiorari is dismissed.
ROBERTS, P. J., and RENTTO, J., concur.
HANSON, J., and BAKEWELL, Circuit Judge, sitting for SMITH, J., dissent.