ENTITLED An Act to revise and reorganize certain provisions regarding the assessment of property for the purposes of taxation.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That 10-6-1 be AMENDED:
10-6-1. Definition of terms.
Terms used in this chapter mean:
(1) "Department," the Department of Revenue;
(2) "Director," a county's director of equalization;
(3) "Tract," "lot," "piece," or "parcel," any contiguous quantity of land that is possessed by, owned by, or recorded in the name of the same person.
Section 2. That 10-6-1.4 be REPEALED.
10-6-1.4. "Arms length transaction" defined.
Section 3. That 10-6-3.1 be REPEALED.
10-6-3.1. Assessment date for leased school and endowment lands--Valuation date.
Section 4. That 10-6-4 be REPEALED.
10-6-4. Information as to land becoming taxable for first time--Transmittal to county officials.
Section 5. That 10-6-8 be AMENDED:
10-6-8. Statement of real property required of taxpayers.
The director may require each person subject to this chapter to furnish to the director a statement under oath setting forth specifically all real property that is either owned by or under the control of the person on the statutory assessment day.
Section 6. That 10-3-27 be AMENDED:
10-3-27. Valuation of property on neglect or refusal by owner to comply with requirements--Notation of neglect or refusal.
The director of equalization shall make an estimate of the value of property if any person, after demand by the director, neglects or refuses to comply with the requirements of this chapter or chapter 10-6. The director shall note the neglect or refusal on the assessment roll opposite the name of any such person.
Section 7. That 10-6-10 be REPEALED.
10-6-10. Statement forms to be furnished by county commissioners--Affidavit requirements.
Section 8. That 10-6-20 to 10-6-22 be REPEALED.
Section 9. That 10-6-25 be AMENDED:
10-6-25. Viewing of property--Inspection of records--Recording assessed value.
For the purpose of making an assessment of a tract listed for taxation, the director or the director's deputy shall inspect and examine the property. The director may, without charge, inspect any book, paper, or public record that relates to the property.
For each tract of real property assessed, the director shall record the property's assessed value without improvements or structures, the value of all improvements or structures on the property, and the property's total assessed value.
Section 10. That 10-6-31 be AMENDED:
10-6-31. Classification of property--Notation by director.
For the purposes of taxation, all property is hereby classified into the following classes:
(1) Agricultural property;
(2) Nonagricultural property; and
(3) Owner-occupied single-family dwellings.
Agricultural property includes any land classified as agricultural land pursuant to 10-6-31.3 and any improvements on the agricultural land used exclusively for agricultural purposes. However, agricultural property does not include any normally occupied dwelling or automobile garage or portion of a building used for that purpose by the occupant of such dwelling. Owner-occupied single-family dwellings include all property classified pursuant to 10-13-39.
Nonagricultural property includes all other property not otherwise classified.
The director, in listing and assessing all property to which this section applies, shall designate opposite each description the class to which the property belongs.
Section 11. That 10-6-31.1 be AMENDED:
10-6-31.1. Agricultural land taxed without regard to zoning.
Any land classified as agricultural land pursuant to 10-6-31.3 shall be taxed as agricultural land without regard to its zoning classification. If any portion of the land is sold or otherwise converted to a principal use other than agricultural, then it shall be classified and taxed accordingly.
Section 12. That 10-6-31.2 be AMENDED:
10-6-31.2. Leased school lands classified separately--Assessment date and valuation date--Assessment, equalization, and taxation of school and endowment lands.
Leased school and endowment lands, as provided in chapter 5-11, are hereby separately classified for the purpose of taxation. Leased school and endowment lands shall be listed and assessed annually pursuant to 10-6-2. The assessment, equalization, and taxation of school and endowment lands that satisfy the criteria for classification of land as agricultural shall be at the same level and on the same basis as land assessed and equalized according to 10-6-33.28 to 10-6-33.33, inclusive.
Section 13. That 10-6-31.3 be AMENDED:
10-6-31.3. Criteria for classification of land as agricultural.
For tax purposes, land is agricultural land if the land's principal use is devoted to the raising and harvesting of crops or timber or fruit trees, the rearing, feeding, and management of farm livestock, poultry, fish, or nursery stock, the production of bees and apiary products, or horticulture, all for intended profit. Agricultural land also includes woodland, wasteland, and pasture land, but only if the land is held and operated in conjunction with agricultural land and is under the same ownership.
In addition, to be classified as agricultural land for tax purposes, the land must meet one of the following criteria:
(1) In three of the previous five years, a gross income is derived from the pursuit of agriculture from the land that is at least ten percent of the taxable valuation of the bare land assessed as agricultural property, excluding any improvements. If there is a crop share arrangement or cash rent agreement, the gross income from the land of both the landlord and tenant must be combined and used to meet this requirement. Alternatively, at least two thousand five hundred dollars of the owner's gross income is annually derived from the pursuit of agriculture; or
(2) The land consists of not less than twenty acres of unplatted land or is a part of a management unit of not less than eighty acres of unplatted land. The same acreage specifications apply to platted land, excluding land platted as a subdivision, that is in an unincorporated area. However, the board of county commissioners may increase the minimum acre requirement up to one hundred sixty acres.
For the purposes of this section, the term, management unit, means any two or more parcels of land, whether adjoining or not, under common ownership located within this state and managed and operated as a unit for one or more of the principal uses listed in this section. No parcel of land within a management unit may be more than twenty air miles from the nearest other parcel within the management unit. If requested by the director, the owner shall provide supporting documentation of the land contained in the management unit.
Section 14. That 10-6-31.8 be AMENDED.
10-6-31.8. Criteria for classification of agricultural land as riparian buffer strip.
Agricultural land shall be classified as a riparian buffer strip pursuant to 10-6-31.7, if it meets the following criteria:
(1) The agricultural land consists of existing or planted perennial vegetation;
(2) The riparian buffer strip is a minimum of fifty feet in width along an eligible river, stream, or lake, and extends up to a maximum of one hundred twenty feet in width along an eligible river, stream, or lake. For the purposes of this section, the measurement along a river or stream begins at the top of the bank or where the upland or terrestrial vegetation begins, whichever is closer to the water channel, and extends landward from the beginning measuring point. The measurement along a lake begins where upland or terrestrial vegetation begins and extends landward from the beginning measuring point. A riparian buffer strip may vary along the riparian area if the strip is at least fifty to one hundred twenty feet in width and is mapped to calculate the taxable area involved;
(3) The perennial vegetation is not harvested or mowed before July tenth. However, a minimum of four inches of vegetative cover shall be maintained at all times;
(4) The perennial vegetation is not grazed during the months of May to September, inclusive; and
(5) The landowner files a verified application with the director of equalization of the county where the agricultural property is located, verifying that the criteria of this section has been met.
The landowner shall include in the application a legal description of the parcel where the riparian buffer strip is located, all necessary documentation including maps and acre totals, and any other information required by the director to determine eligibility. The application must be filed annually with the director before October sixteenth. If the director determines that the agricultural land meets the criteria provided by this section, the land must be assessed pursuant to 10-6-31.7 on November first. The application must be in a form as prescribed by the secretary of revenue.
Section 15. That 10-6-33 be AMENDED:
10-6-33. Basis for determining valuation for tax purposes--Cost, market and income approaches to appraisal considered.
The director shall individually assess each tract of real property at its fair market value. In determining the fair market value of property, the director may not adopt a lower or different standard of value because it is to serve as a basis of taxation. The director may not adopt as a criterion of value the price for which a tract of real property would sell at a forced sale, or in the aggregate with all other tracts of real property in the county. The director shall determine the fair market value by appropriate consideration of the cost approach, the market approach, and the income approach to appraisal. The director shall consider and document all elements of such approaches that are applicable prior to a determination of fair market value.
Section 16. That 10-6-33.2 be REPEALED.
10-6-33.2. Determination of capacity to produce agricultural products--Sources of information.
Section 17. That 10-6-33.3 be AMENDED.