An Act to increase the number of years the discretionary formula may be applied to a structure, and to allow for the individual application of the discretionary formula for a structure.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That 10-6-137 be AMENDED:
10-6-137.
Any structure
classified pursuant to this section, must, following construction, be
valued for taxation purposes in the usual manner. The board of county
commissioners of the county in which the structure is located, may
adopt a formula for assessed value to be used for tax purposes.
Except as otherwise provided in 10-6-137.1,
the formula may include, for any or all of the
five
ten tax years
following construction, all, any portion, or none of the assessed
value for tax purposes. Any formula adopted must be equally applied
to specifically classified properties within a tax increment finance
district.
The board of county commissioners
of the county in which the structure is located may, if requested by
the owner of the structure, fully assess the structure without
application of the formula. In waiving the formula for the structure
of one owner, the board of county commissioners is not prohibited
from applying the formula for subsequent new structures. The assessed
value during any of the
five
ten years may
not be less than the assessed value of the property in the year
preceding the first year of the tax years following construction.
Any structure that is partially constructed on the assessment date may be valued for tax purposes, pursuant to this section, and the value may not be less than the assessed value of the property in the year preceding the beginning of construction. The period that the property is valued for tax purposes under this section may include the years when the property is partially constructed.
Following the
five-year
ten-year period
under this section, the property must be assessed at the same
percentage as all other property for tax purposes, except as
otherwise provided in 10-6-137.1
or section 3 of this Act.
Any of the following types of real property may be specifically classified for the purpose of taxation pursuant to this section:
(1) Any new industrial or
commercial structure, or any addition, renovation, or reconstruction
to an existing structure,
located within a designated urban renewal area as defined in
11-8-4,
if the new structure, addition, renovation, or reconstruction has a
full and true value of thirty thousand dollars or more;
(2) Any new industrial structure, including a power generation facility, or an addition to an existing structure, if the new structure or addition has a full and true value of thirty thousand dollars or more;
(3) Any new nonresidential agricultural structure, or any addition to an existing structure, if the new structure or addition has a full and true value of ten thousand dollars or more;
(4) Any new commercial structure, or any addition to an existing structure, except a commercial residential structure as described in subdivision (5), if the new structure or addition has a full and true value of thirty thousand dollars or more;
(5) Any new commercial residential structure, or addition to an existing structure, containing four or more units, if the new structure or addition has a full and true value of thirty thousand dollars or more;
(6) Any new affordable housing structure containing four or more units, with a monthly rental rate of the units at or below the annually calculated rent for the state's sixty percent area median income being used by the South Dakota Housing Development Authority for a minimum of ten years following the date of first occupancy, if the structure has a full and true value of thirty thousand dollars or more;
(7) Any new residential structure, or addition to or renovation of an existing structure, located within a redevelopment neighborhood established pursuant to 10-6-141, if the new structure, addition, or renovation has a full and true value of five thousand dollars or more. The structure must be located in an area defined and designated as a redevelopment neighborhood based on conditions provided in 11-7-2 or 11-7-3; or
(8) Any commercial, industrial, or nonresidential agricultural property that increases more than ten thousand dollars in full and true value, as a result of demolition, reconstruction, or renovation of the structure.
Section 2. That 10-6-137.1 be AMENDED:
10-6-137.1. For any real property specifically classified under subdivisions 10-6-137(5), (6), and (7), or for any real property approved by the board of county commissioners pursuant to section 3 of this Act, the formula adopted by the board of county commissioners must include:
(1) No more than twenty-five percent of the increased assessed value in the first or second year following the completion of construction;
(2) No more than fifty percent of the increased assessed value in the third or fourth year following the completion of construction;
(3) No more than seventy-five percent of the increased assessed value in the fifth or sixth year following the completion of construction; and
(4) One hundred percent of the increased assessed value in the seventh year following the completion of construction and each year thereafter.
During construction, the assessed value of the property may not exceed the assessed value of the property in the year preceding the beginning of construction.
The percentages stated in this section are limited to that portion of the assessed value that exceeds the property's assessed value in the year preceding the start of construction.
Any real property receiving the benefit of a discretionary formula prior to July 1, 2022, must continue to be assessed and taxed in the manner provided for in any county or municipal resolution adopted pursuant to this chapter and in effect prior to July 1, 2022, and must continue to be subject to the provisions of 10-12-44, 11-9-20, and 13-13-20.4.
Section 3. That a NEW SECTION be added to chapter 10-6:
The board of county commissioners may, by a two-thirds vote of the board of county commissioners, adopt the formula provided by 10-6-137.1, for any individual structure that meets the criteria of any class provided under subdivisions 10-6-137(1) to (6), inclusive, if:
(1) The structure is in a blighted area, as defined by 11-8-3;
(2) The structure is determined by the board of county commissioners to be abandoned or vacant for at least three years; or
(3) The ownership of the structure has changed during the period the structure has been assessed for taxation purposes under 10-6-137.1.
Section 4. That 10-6-138 be AMENDED:
10-6-138.
If the board of
county commissioners has not adopted a formula pursuant to
10-6-137,
or
10-6-137.1,
or section 3 of this Act,
the governing board of a municipality in which the structures or
property are located, or within three miles of the corporate limits
of the municipality, may adopt a formula for assessed value pursuant
to 10-6-137,
or
10-6-137.1,
or section 3 of this Act.
In the case of residential
structures described in
subdivisions 10-6-137(5),
(6), and (7), the governing board of a municipality may adopt a
formula that differs from any formula adopted by the board of county
commissioners, provided the formula complies with 10-6-137.1.