An Act to establish timberland as a separate classification of property for tax purposes, define the criteria for timberland classification, and set the tax parameters for property classified as timberland.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That 10-6-31 be AMENDED.
10-6-31. Classification of property--Notation by director of equalization.
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; and
(4) Timberland.
Agricultural property includes
all
property and any
land used
exclusively for classified
as agricultural
purposes,
both tilled and untilled, land
pursuant to 10-6-31.3
and the
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.
Timberland includes all land classified pursuant to
10-6-31.10.
Nonagricultural property includes all other property not otherwise classified.
The director of equalization in listing and assessing all property to which this section applies shall designate opposite each description the class to which the property belongs.
Section 2. That 10-12-42 be AMENDED.
10-12-42. General fund of a school district--Annual levy.
For taxes payable in 2021
2022
and each year
thereafter, the levy for the general fund of a school district shall
be as follows:
(1) The maximum tax levy shall be
six dollars and sixty-eight and two-tenths cents per thousand dollars
of taxable valuation subject to the limitations on agricultural
property as provided in subdivision (2) of this section
and ,
owner-occupied
property as provided in subdivision (3) of this section,
and timberland as provided in subdivision (4) of this section;
(2) The maximum tax levy on
agricultural property for the school district shall be one dollar and
forty-four and three-tenths cents per thousand dollars of taxable
valuation. If the district's levies are less than the maximum levies
as stated in this section, the levies shall maintain the same
proportion to each other as represented in the mathematical
relationship at the maximum levies; and
(3) The maximum tax levy for an owner-occupied single-family dwelling as defined in 10-13-40 for the school district shall be three dollars and twenty-two and nine-tenths cents per thousand dollars of taxable valuation. If the district's levies are less than the maximum levies as stated in this section, the levies shall maintain the same proportion to each other as represented in the mathematical relationship at the maximum levies; and
(4) The maximum tax levy for timberland as defined in 10-6-31.10 for the school district shall be one dollar and forty-four and three-tenths cents per thousand dollars of taxable valuation. If the district's levies are less than the maximum levies as stated in this section, the levies shall maintain the same proportion to each other as represented in the mathematical relationship at the maximum levies.
A levy
on timberland in this section shall be imposed on valuations where
the median level of assessment represents fifty percent of market
value as determined by the Department of Revenue. All
other
levies in this
section shall be imposed on valuations where the median level of
assessment represents eighty-five percent of market value as
determined by the
Department of Revenue
department.
These valuations shall be used for all school funding purposes. If
the district has imposed an excess levy pursuant to 10-12-43,
the levies shall maintain the same proportion to each other as
represented in the mathematical relationship at the maximum levies in
this section. The school district may elect to tax at less than the
maximum amounts set forth in this section.
Section 3. That 10-3-41 be AMENDED.
10-3-41. Median level of assessment to represent eighty-five percent of market value.
The director of equalization shall make the necessary adjustments to the valuations before the notice of assessment pursuant to 10-6-50, so that the median level of assessment on property other than timberland represents at least eighty-five percent of market value as determined by the Department of Revenue, and that the median level of assessment on timberland represents at least fifty percent of market value as determined by the department.
Section 4. That 10-12-31.1 be AMENDED.
10-12-31.1. Adjusting level of assessment for school districts.
Notwithstanding other provision
of law, when applying the levies for school purposes, the county
director of equalization of each county shall adjust the level of
assessment in that district on
property other than timberland, so
that the level of assessment,
as indicated by the most recent assessment to sales ratio as provided
for in 10-11-55
and the most recent agricultural income value as provided for in
10-6-33.28
to 10-6-33.33,
inclusive, in that district
are,
is equal to
eighty-five percent of market value or agricultural income value,
and adjust the level of assessment in that district on timberland, so
that the level of assessment, as indicated by the most recent
assessment to sales ratio as provided for in 10-11-55 in that
district, is equal to fifty percent of market value.
The Department of Revenue shall provide the director of equalization
of each county all of the factors of adjustment necessary for the
computations required in this section.
Section 5. That 10-6-33.8 be AMENDED.
10-6-33.8. Minimum and maximum median sales to assessment ratio.
The median sales to assessment ratio of all real property, except timberland, may not be less than eighty five percent or more than one hundred percent. The median sales to assessment ratio of timberland may not be less than fifty percent or more than one hundred percent.
Section 6. That 10-6-31.3 be AMENDED.
10-6-31.3. Classification of agricultural land--Criteria.
For tax purposes, land is
agricultural land if its
the
land's principal
use is devoted to the raising and harvesting of crops
or timber
or fruit trees, tree
farms, 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
real estate
land also
includes woodland, wasteland, and pasture land, but only if the land
is held and operated in conjunction with agricultural real
estate as defined land
and it
is under
the same ownership.
In addition, to be classified as
agricultural land for tax purposes, the land shall
must
meet one of the
following criteria:
(1) In three of the previous five
years, a
an
annual gross
income of
at least two thousand five hundred dollars 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 shall 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
Subject
to the board of county commissioners increasing the minimum acre
requirements, the land
consists
of not less than is
at least twenty
acres of
unplatted land or
is a part of a management unit of not
less than at
least eighty
acres
of unplatted land. The same acreage specifications apply to platted
land, excluding land platted as a subdivision, which is in an
unincorporated area. However, the.
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 of equalization, the owner shall provide supporting documentation of the land contained in the management unit.
Section 7. That a NEW SECTION be added:
10-6-31.10. Classification of timberland--Criteria.
Subject to the provisions of 10-6-31.11, land is timberland for tax purposes if:
(1) The land's principal use is devoted to the raising and harvesting of timber for profit; and
(2) The land is part of a management unit of not less than one hundred sixty acres of land.
Timberland also includes woodland, wasteland, and pastureland, but only if the land is held and operated in conjunction with timberland and is under the same ownership.
For the purposes of this section, the term, management unit, means any two or more parcels of land, whether adjoining or not, located within this state and managed and operated as a unit for the raising and harvesting of timber. 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 of equalization, the owner shall provide supporting documentation of the land contained in the management unit.
Section 8. That a NEW SECTION be added:
10-6-31.11. Land prevented from classification as agricultural or timberland--Criteria.
Notwithstanding 10-6-31.1, 10-6-31.3, and 10-6-31.10, land may not be classified as agricultural land or timberland for tax purposes and any such classification shall be removed if the land meets at least two of the following criteria: