November 9, 1983
Mr. Roger Tellinghuisen
Lawrence County State's Attorney
78-80 Sherman Street
Deadwood, South Dakota 57732
Official Opinion No. 83-42
Requirement as to Notice of Assessment
Dear Mr. Tellinghuisen:
You have requested an official opinion from this office in regard to the following factual situation:
FACTS:
Owner A owns a piece of real property in Lawrence County which in the year of 1981 was assessed at $10,000. On January 1, 1982, owner A is still listed as the record owner. In February of 1982, the property is sold to owner B who enters into possession and owns the property up until the present time. The property is reassessed in 1982 at $20,000 and a notice of such reassessment is sent to owner A who appears as the owner of record as of January 1, 1982. On January 1, 1983, the owner of record appears as owner B. In 1983 the assessment notice, still assessing the property at $20,000 is received by owner B who appears before the Board of Equalization and receives a reduction in the assessment back to the $10,000 assessment of 1981. In 1983, owner B receives a tax statement for the taxes for the year 1982 and discover that also during 1982 the property was assessed at $20,000. They then appear before the Lawrence County Board of County Commissioners in October of 1983, requesting a reduction of the 1982 assessment claiming that they, owner B, did not receive the 1982 assessment notice because it was sent to the original owner A and therefore they should not be penalized for not having appeared before the Board of Equalization in 1982.
Based on the above facts, you have asked the following questions:
QUESTIONS:
1. To whom is a county legally responsible to give notice when the assessment on a particular piece of property changes?
2. Is there any other procedure or authority which would allow the Commissioners, even in light of owner B's failure to appear before the 1982 Board of Equalization, which would give the County Commissioners the authority to adjust the assessment of owner B's property?
Although a Director of Equalization is required to enter upon the property for the purpose of valuing it, SDCL 10-6-25, and assessing all property subject to taxation, SDCL 10-3-16, the requirement for giving notice is not entirely clear cut. SDCL 10-3-17, after discussing the procedure with respect to the now repealed personal property tax says concerning notification, the assessor shall '. . . deliver to the person . . . either in person or by mail . . . (a form) including therein . . . the description and assessed valuation of all real property taxable in the county to said person, and shall notify him that if he feels aggrieved he may appear before the board of equalization and show cause why such assessment should not be made, . . .'.
While property is assessed annually during the first six months of the year the value of the property is to be determined according to its value on the first day of January preceding the assessment, SDCL 10-6-2. Obviously notice of this assessment must be given prior to the time the first local board of equalization meets on the second Monday of April, SDCL 10-11-13, in order to fulfill the requirements of SDCL 10-3-17 i.e., to advise any person aggrieved that he may appear before the local board of equalization.
The law provides a separate procedure for the recording of property transfers and the updating of the assessment rolls. SDCL 7-9-10 requires the Register of Deeds to make a monthly report to, among other people, the county director of equalization, of all property transfers during each calendar month. This is certified on the last working day of the month. The director is required by SDCL 10-3-31 to examine these conveyances and by SDCL 10-3-32 to check the assessment rolls of real estate for the present year and to change upon the assessment roll the assessment of the property to the true owner as shown by the list certified by the Register of Deeds. Although no time frame is spelled out in those statutes, common sense would direct that since a Register of Deeds is required to make a monthly certification of transfers, the Director of Equalization should likewise make a monthly update of the assessment lists particularly where due process is involved in the tax procedure.
IN RE QUESTION NO. 1:
It is my opinion that the Director of Equalization must given notice to the current owner of the property if the Director has received the certified list from the Register of Deeds prior to the giving of notice. In the instance you relate, the property was transferred in February of 1982. Unless the deed was not recorded the Director would have received the list from the Register of Deeds showing a new owner immediately following February 28. If the valuation notices did not go out until for example, April or May of 1982, the Director should have made the change and notified the proper person.
This holding does not conflict with the position consistently taken by this office that property is to be assessed as to its value and ownership on the assessment day. See 1949-50 AGR 432. The tax statutes require that a particular point in time be fixed in order to determine value as well as the taxability or exempt status of property. The statutes relating to the changing of the assessment list to reflect the current owner are procedural matters which assure that correct notice is given to the proper owner of the property.
Due process is involved in taxation as much as in any other area of the law where personal or property rights are concerned. In a case somewhat in point, our Supreme Court held that due process requires after an assessment has been made by an assessor, that the assessment cannot be increased by a reviewing board without notice to the taxpayer or opportunity to be heard and that a statute giving power to equalize and assess was unconstitutional insofar as there was an attempt to give anyone the power to increase individual assessments without providing for some notice to the individual other than fixing of the time for the meeting of the appeals board. Beveridge v. Baer, 241 N.W. 727 (1932). In another case the South Dakota Supreme Court said where an increase of the assessment affects a taxpayer only as an individual as distinguished from a member of a class the taxpayer must have notice other than that fixing the time of the meeting of the board. Common Council of Watertown v. Department of Finance, 241 N.W. 731 (1932).
The County Director of Equalization receiving the certified list of transfers from the Register of Deeds and having the statutory duty to post changes to the assessment lists so that the property will be assessed to the correct individual has a duty to notify the individual to whom transfer of the property is made of the assessment and the right to appeal that assessment.
The United States Supreme Court in the case of Mullane v. Central Hanover Bank and Trust Company, 339 U.S. 306, 314 (1950) recognized that prior to an action that will effect an interest to life, liberty, or property protected by the due process clause of the Fourteenth Amendment, a state must provide, 'notice reasonably calculated under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'
In the recently decided case of Mennonite Board of Missions v. Adams No. 82-11 decided in June, 1983, 103 S. Ct. 2706, 51 L.W. 4872, it was held that unless notice given actually apprises an individual of pending tax proceedings it does not satisfy the due process requirement of the Constitution.
It is my opinion that the failure of the assessor to send the statutory notice to the taxpayer violated the due process requirements of the State and Federal Constitutions and that therefore the right of the property owner to appeal to the county board of equalization was not cut off and remains as an on-going remedy to which the taxpayers in question here may avail themselves.
IN RE QUESTION NO. 2:
Although the answer to Question No. 1 makes unnecessary a response to Question 2, I should point out to you the general provisions of law with respect to abatement of taxes as contained in SDCL 10-18 and the opinion relating to the time for making such adjustments in AGR 72-32; as well as the adjustment of the valuations by boards of county commissioners pursuant to SDCL 10-11-32 which is more fully explored in Official Opinion 79-14.
Respectfully submitted,
Mark V. Meierhenry
Attorney General
