Tax definition of agricultural property to be unchanged by lawmakers this session

Farm Forum

PIERRE – On Jan. 28, Legislators agreed that another year of work is needed toward rewriting the definition of agricultural land in South Dakota’s property-tax laws.

The Senate Taxation Committee set aside the latest proposal with the understanding the Legislature’s task force on agricultural assessments would take up the issue again.

A group of Pennington County landowners and officials brought a plan to the 2014 legislative session intended to help small agricultural producers and timberland owners.

Their goal is change the definition of agricultural property so their parcels can qualify for the lower tax rates on agricultural land.

The 2014 proposal had flaws that led to its defeat by the state House of Representatives.

The Legislature’s agricultural-assessments task force took up the matter next. But the task force’s proposal would have affected many hundreds of property owners in other parts of South Dakota and some county directors of equalization cautioned it is too broad.

Sen. Billie Sutton, one of the task force’s members, asked Wednesday that the Senate committee halt further consideration of the measure, Senate Bill 44, and let the task force spend time on it later this year.

“I don’t think it’s good that we pass legislation that is not in the form most of us agree on,” Sutton said.

Pennington County Commission member Nancy Trautman thanked Sutton as she testified to the committee. She said the Pennington County group has been trying hard to develop an acceptable plan.

“We want to get it right. We’ve spent hours and hours,” Trautman said.

South Dakota’s current laws on agricultural property lack definitions in some instances and need improvements, according to Jay Alderman, a deputy state’s attorney for Pennington County.

“We need some better direction for timber,” Alderman said. “It has an entirely different management plan that fits what you’re trying to produce on the ground.”

He added, “So consistency across the state is something I would think we all would want and all be for.”

Mike Held, representing South Dakota Farm Bureau, said the Legislature’s agricultural-assessments task force was focused on other topics during 2014 and agricultural-definition issue was laid aside until the final meeting.

“Unfortunately the proposal brought forward has some unintended consequences,” Held said.

Sutton agreed with Held’s portrayal.

Sutton said he remains highly interested in crafting state laws to fit small producers on less than 20 acres. He said it’s unfortunate that many of those people can’t have their land classified as agricultural for property-tax purposes.

“I promise you we will work our hardest to come out with a bill that satisfies all parties involved,” Sutton said.

Sen. Jim Peterson, D-Revillo, has served on the task force since its start in 2008. He said the task force would spend the time this year needed for the agricultural-definition issue.

“We need to hear from some of the other directors (of equalization) and figure out a way that it doesn’t impact other counties,” Peterson said.

Sen. Gary Cammack, R-Union Center, said he has spoken at length with Meade County director of equalization Kirk Chafee, who serves on the task force. Cammack said Chafee advised him the task force was “85 percent of the way there” but needed to keep working on the last 15 percent.

Sen. Brock Greenfield, R-Clark, said two people approached him at the Aberdeen cracker-barrel last weekend and said something needs to be done on timber.

“We’re moving in the right direction. We have consensus east and west river,” Greenfield said.

The committee then voted 7-0 to kill SB 44.