SB 173 revise certain provisions concerning the...
State of South Dakota
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EIGHTY-SECOND SESSION
LEGISLATIVE ASSEMBLY,
2007
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555N0581
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HOUSE TAXATION COMMITTEE ENGROSSED
NO.
SB 173
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03/01/2007
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Introduced by:
Senators Knudson, Abdallah, Dempster, Garnos, Gray, Hansen (Tom),
Hanson (Gary), Lintz, McCracken, McNenny, Olson (Ed), and Smidt
(Orville) and Representatives Rhoden, Brunner, DeVries, Dykstra, Halverson,
Hargens, Jerke, Lucas, Noem, Pederson (Gordon), Pitts, Rave, Tidemann,
Turbiville, and Vanneman
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FOR AN ACT ENTITLED, An Act to
revise certain provisions concerning the assessment of
real property, to revise certain tax levy limitations for schools, to revise certain provisions
regarding property tax levies for school districts, and to repeal the nonagricultural acreage
classification.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section
1.
That chapter
10-6
be amended by adding thereto a NEW SECTION to read as
follows:
Notwithstanding § 10-6-74, for the taxes payable in 2009, 2010, 2011, 2012, and 2013, the
sales of property on or after November 1, 2006, where the property sells for more than one
hundred fifty percent of its assessed value shall be used to value other real property. However,
for the taxes payable in 2009, 2010, 2011, 2012, and 2013, no property's valuation may increase
more than five percent per year because of these sales. Any such sales shall be used in a sales
ratio study only as allowed in this section.
Section
2.
Section 1 of this Act and
§
10-6-74
are repealed on July 1, 2013.
Section
3.
That
§
10-6-33.24
be amended to read as follows:
10-6-33.24.
Notwithstanding the provisions of chapter 10-6, agricultural land
may
shall
be
assessed based on its agricultural income value
if there are less than fifteen arms-length
transactions of agricultural land during the three preceding assessment years
. The agricultural
income value of agricultural land shall be determined on the basis of the
capitalized
annual cash
rent of the agricultural land. The
capitalized
annual cash rent shall be based on data collected
and analyzed pursuant to § 10-6-33.25.
For the purposes of this section, arms-length transactions
do not include any agricultural land sales subject to the provisions of § 10-6-33.14, 10-6-33.20,
or 10-6-74.
Section
4.
That
§
10-6-33.25
be amended to read as follows:
10-6-33.25.
For the purposes of § 10-6-33.24, the agricultural income value shall be
determined using
capitalized
annual cash rent. The annual cash rent is the annual cash rent,
excluding the
average
per acre tax on agricultural land, determined
through an analysis of arms-
length rental agreements collected within the county in the three years prior to the year for which
the agricultural income value is being determined
using cash rent information collected pursuant
to
§
10-6-33.16
. The agricultural income value of cropland shall be based on average rents over
a three-year period for cropland under natural conditions. The agricultural income value of
noncropland shall be based on average rents over a three-year period for noncropland under
natural conditions.
However, no arms-length rental agreements for irrigated land may be used
to determine the annual cash rent pursuant to this section.
The annual cash rent shall be
capitalized at seven and three-fourths
divided by the adjustment factor of six and sixteen
hundredths
percent.
The secretary of revenue and regulation may enter into a contract for the collection of cash
rent information by county. Cash rent information shall be adjusted by soil survey statistics, if
available, and pursuant to § 10-6-33.26.
However, for the taxes payable in 2009, 2010, and 2011, the total value of agricultural land
within any county may not increase more than fifteen percent in any year.
Section
5.
That
§
10-6-33.16
be amended to read as follows:
10-6-33.16.
The secretary of revenue and regulation shall specify the cash rent used to
determine the agricultural income value of agricultural land.
The secretary of revenue and
regulation may enter into a contract for the collection of cash rent information by county. Cash
rent information shall be adjusted by soil survey statistics if available.
Section
6.
That
§
10-6-33.26
be amended to read as follows:
10-6-33.26.
The director of equalization shall annually determine the assessed value of
agricultural land as defined by § 10-6-31.3.
Any
The assessed valued of
agricultural land
assessed based on its agricultural income value pursuant to § 10-6-33.24 and 10-6-33.25
may
be
value
adjusted by the following factors:
(1)
The capacity of the land to produce agricultural products as defined in § 10-6-33.2;
and
(2)
The location, size, soil survey statistics, terrain, and topographical condition of the
land including the climate, accessibility, and surface obstructions which can be
documented.
Section
7.
That chapter
10-6
be amended by adding thereto a NEW SECTION to read as
follows:
Buildings and structures, other than normally occupied dwellings on agricultural land and
automobile garages or portions of buildings used as automobile garages, which are used
exclusively for agricultural purposes and situated on agricultural land, are hereby specifically
classified for tax purposes as agricultural property and shall be assessed as similar
nonagricultural property.
Section
8.
That chapter
10-6
be amended by adding thereto a NEW SECTION to read as
follows:
The agricultural income value for agricultural land as determined
§
10-6-33.24 represents
one hundred percent of the market value and that value shall be adjusted to where the median
level of assessment represents eighty-five percent of the market value pursuant to
§
§
10-3-41,
10-12-42, and 10-13-37.
Section
9.
That
§
10-6-33.13
be amended to read as follows:
10-6-33.13.
The secretary of revenue and regulation may promulgate rules pursuant to
chapter 1-26 concerning the:
(1)
Collection and tabulation of information required to determine median appraisal or
sales assessment ratio, and coefficient of dispersion;
(2)
Criteria to be included in a compliance audit of assessment practices;
and
(3)
Conditions under which a certificate of compliance may be issued to a county
;
(4) Procedures for determining the valuation of agricultural buildings and structures;
(5) Procedures for determining the valuation of dwellings on agricultural land and
automobile garages or portions of buildings used as automobile garages;
(6) Application of cropland and noncropland income values;
(7) Soil classification standards; and
(8) Procedures for making adjustments to the value of agricultural land pursuant to
§§ 10-6-33.26 and 10-6-33.27
.
Section
10.
That
§
13-16-7
be amended to read as follows:
13-16-7.
The school board of any school district of this state may at its discretion authorize
an annual levy of a tax not to exceed three dollars per thousand dollars of taxable valuation on
the taxable valuation of the district for the capital outlay fund for assets as defined by § 13-16-6
or for its obligations under a resolution, lease-purchase agreement, capital outlay certificate, or
other arrangement with the Health and Educational Facilities Authority. Taxes collected
pursuant to such levy may be irrevocably pledged by the school board to the payment of
principal of and interest on installment purchase contracts or capital outlay certificates entered
into or issued pursuant to § 13-16-6 or 13-16-6.2 or lease-purchase agreements or other
arrangement with the Health and Educational Facilities Authority and, so long as any capital
outlay certificates are outstanding, installment agreement payments, lease-purchase agreements,
or other arrangements are unpaid, the school board of any district may be compelled by
mandamus or other appropriate remedy to levy an annual tax sufficient to pay principal and
interest thereon, but not to exceed the three dollars per thousand dollars of taxable valuation in
any year authorized to be levied hereby.
For taxes payable in 2009, the total amount of revenue payable from the levy provided in
this section may not increase more than the lesser of three percent or the index factor, as defined
in § 10-13-38, over the maximum amount of revenue that could have been generated for the
taxes payable in 2008. After applying the index factor, a school district may increase the revenue
payable from taxes on real property above the limitations provided by this section by the
percentage increase of value resulting from any improvements or change in use of real property,
annexation, minor boundary changes, and any adjustments in taxation of real property separately
classified and subject to statutory adjustments and reductions under chapters 10-4, 10-6, 10-6A,
and 10-6B, except § 10-6-31.4, only if assessed the same as property of equal value. A school
district may increase the revenue it receives from taxes on real property above the limit provided
by this section for taxes levied to pay the principal, interest, and redemption charges on any
bonds issued after January 1, 2007, which are subject to referendum, scheduled payment
increases on bonds and for a levy directed by the order of a court for the purpose of paying a
judgment against such school district. Any school district created or reorganized after January 1,
2007, is exempt from the limitation provided by this section for a period of two years
immediately following its creation.
For taxes payable in 2010, 2011, 2012, and 2013, the total amount of revenue payable from
the levy provided in this section may not increase more than the lesser of three percent or the
index factor, as defined in § 10-13-38, over the maximum amount of revenue that could have
been generated for the taxes payable in 2008 plus any unused index factor from the previous
years. After applying the index factor, a school district may increase the revenue payable from
taxes on real property above the limitations provided by this section by the percentage increase
of value resulting from any improvements or change in use of real property, annexation, minor
boundary changes, and any adjustments in taxation of real property separately classified and
subject to statutory adjustments and reductions under chapters 10-4, 10-6, 10-6A, and 10-6B,
except § 10-6-31.4, only if assessed the same as property of equal value. A school district may
increase the revenue it receives from taxes on real property above the limit provided by this
section for taxes levied to pay the principal, interest, and redemption charges on any bonds
issued after January 1, 2007, which are subject to referendum, scheduled payment increases on
bonds and for a levy directed by the order of a court for the purpose of paying a judgment
against such school district. Any school district created or reorganized after January 1, 2007, is
exempt from the limitation provided by this section for a period of two years immediately
following its creation.
For taxes payable in 2009, 2010, 2011, 2012, and 2013, the levy limitation of three dollars
per thousand dollars of taxable valuation does not apply to any school district.
Section
11.
That
§
10-12-31.1
be amended to read as follows:
10-12-31.1.
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 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
assessment to full agricultural land value
ratio
agricultural income value
as provided for in
§ 10-11-57
§
10-6-33.24
in that district are
equal to eighty-five percent of market value
or agricultural income value
. The Department of
Revenue and Regulation shall provide the director of equalization of each county all of the
factors of adjustment necessary for the computations required in this section.
Section
12.
That
§
10-6-31.3
be amended to read as follows:
10-6-31.3.
For tax purposes, land is agricultural land if it meets two of the following three
criteria:
(1)
At least thirty-three and one-third percent of the total family gross income of the
owner is derived from the pursuit of agriculture as defined in subdivision (2) of this
section or it is a state-owned public shooting area or a state-owned game production
area as identified in § 41-4-8 and it is owned and managed by the Department of
Game, Fish and Parks;
(2)
Its 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 pursuant to subdivision (1) of this section. Agricultural real estate also
includes woodland, wasteland, and pasture land, but only if the land is held and
operated in conjunction with agricultural real estate as defined and it is under the
same ownership;
(3)
It consists of not less than twenty acres of unplatted land or is a part of a contiguous
ownership of not less than 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 board of county commissioners may
increase the minimum acre requirement up to one hundred sixty acres.
However, for tax purposes, land is not agricultural land if the land is classified pursuant to
§ 10-6-33.14 as a nonagricultural acreage.
Section
13.
That
§
10-6-33.3
be amended to read as follows:
10-6-33.3.
Land or improvement on land within an operating unit which is not used incident
to an agricultural pursuit shall be separately listed and assessed
and the income therefrom shall
not be used in determining the values for the purposes of §§ 10-6-33.1 and 10-6-33.2
.
Section
14.
That
§
10-6-33.5
be amended to read as follows:
10-6-33.5.
The assessment, valuation, equalization, and taxation of school and endowment
lands shall be at the same level and on the same basis as lands assessed, valued, and equalized
according to
§§ 10-6-33.1 to 10-6-33.4
§
§
10-6-33.24 to 10-6-33.27
, inclusive.
Section
15.
That
§
10-6-33.7
be amended to read as follows:
10-6-33.7.
Agricultural land in each county shall be divided into the eight classes defined
by the United States Department of Agriculture's soil conservation service as published in its
soil survey for each county. The county director of equalization shall, based on the agricultural
lands soil survey classification, determine a value for each soil type.
The value for each soil type
shall be determined from sales of similar land based upon its soil survey classification, and as
adjusted for the factors contained in subdivision 10-6-33.1(2). The sales used shall be sales of
agricultural land that are sold for agricultural purposes.
Section
16.
That
§
§
10-6-33.1, 10-6-33.4, 10-6-33.6, 10-6-33.14, 10-6-33.15, 10-6-33.17,
10-6-33.18, 10-6-33.19, 10-6-33.20, and 10-6-33.23 be repealed.
Section
17.
That
§
13-13-72.1
be amended to read as follows:
13-13-72.1.
Any adjustments in the levies specified in
subdivision 13-13-10.1(6)
§
10-12-42
made pursuant to §§ 13-13-71 and 13-13-72 shall be based on maintaining the relationship
between statewide local effort as a percentage of statewide local need in the fiscal year
succeeding the fiscal year in which the adjustment is made.
In addition to the adjustments in the
levies provided by this section, the levies for nonagricultural property and owner-occupied
single-family dwellings shall also be adjusted as necessary to account for the additional increase
in the total assessed value for nonagricultural property and owner-occupied single-family
dwellings pursuant to section 1 of this Act.
Section
18.
That
§
13-37-16
be amended to read as follows:
13-37-16.
For taxes payable in 1997, and each year thereafter, the school board shall levy
no more than one dollar and forty cents per thousand dollars of taxable valuation, as a special
levy in addition to all other levies authorized by law for the amount so determined to be
necessary, and such levy shall be spread against all of the taxable property of the district. The
proceeds derived from such levy shall constitute a school district special education fund of the
district for the payment of costs for the special education of all children in need of special
education or special education and related services who reside within the district pursuant to the
provisions of §§ 13-37-8.2 to 13-37-8.10, inclusive. The levy in this section shall be based on
valuations such that the median level of assessment represents 85% of market value as
determined by the Department of Revenue and Regulation. The total amount of taxes that would
be generated at the levy pursuant to this section shall be considered local effort. Money in the
special education fund may be expended for the purchase or lease of any assistive technology
that is directly related to special education and specified in a student's individualized education
plan. This section does not apply to real property improvements.
For taxes payable in 2009, the total amount of revenue payable from the levy provided in
this section may not increase more than the lesser of three percent or the index factor, as defined
in
§
10-13-38, over the maximum amount of revenue that could have been generated for the
taxes payable in 2008. After applying the index factor, a school district may increase the revenue
payable from taxes on real property above the limitations provided by this section by the
percentage increase of value resulting from any improvements or change in use of real property,
annexation, minor boundary changes, and any adjustments in taxation of real property separately
classified and subject to statutory adjustments and reductions under chapters 10-4, 10-6, 10-6A,
and 10-6B, except
§
10-6-31.4, only if assessed the same as property of equal value.
Any school district created or reorganized after January 1, 2007, is exempt from the
limitation provided by this section for a period of two years immediately following its creation.
For taxes payable in 2010, 2011, 2012, and 2013, the total amount of revenue payable from
the levy provided in this section may not increase more than the lesser of three percent or the
index factor, as defined in
§
10-13-38, over the maximum amount of revenue that could have
been generated for the taxes payable in 2008 plus any unused index factor from the previous
years. After applying the index factor, a school district may increase the revenue payable from
taxes on real property above the limitations provided by this section by the percentage increase
of value resulting from any improvements or change in use of real property, annexation, minor
boundary changes, and any adjustments in taxation of real property separately classified and
subject to statutory adjustments and reductions under chapters 10-4, 10-6, 10-6A, and 10-6B,
except
§
10-6-31.4, only if assessed the same as property of equal value.
For taxes payable in 2009, 2010, 2011, 2012, and 2013, the levy limitation of one dollar and
forty cents per thousand dollars of taxable valuation does not apply to any school district.
Section
19.
That
§
13-37-35.1
be amended to read as follows:
13-37-35.1.
Terms used in chapter 13-37 mean:
(1)
"Level one disability," a mild disability;
(2)
"Level two disability," a mental retardation or emotional disorder;
(3)
"Level three disability," hearing impairment, deafness, visual impairment, deaf-
blindness, orthopedic impairment, or traumatic brain injury;
(4)
"Level four disability," autism;
(5)
"Level five disability," multiple disabilities;
(5A)
"Level six disability," prolonged assistance;
(6)
"Index factor," is the annual percentage change in the consumer price index for urban
wage earners and clerical workers as computed by the Bureau of Labor Statistics of
the United States Department of Labor for the year before the year immediately
preceding the year of adjustment or three percent, whichever is less;
(7)
"Local effort," shall be calculated for taxes payable in
2006 and thereafter using a
special education levy of one dollar and twenty cents per one thousand dollars of
valuation
2009 shall be the amount of revenue that could have been generated for the
taxes payable in 2008 using a special education levy of one dollar and twenty cents
per one thousand dollars of valuation increased by the lesser of three percent or the
index factor, as defined in § 10-13-38, plus a percentage increase of value resulting
from any improvements or change in use of real property, annexation, minor
boundary changes, and any adjustments in taxation of real property separately
classified and subject to statutory adjustments and reductions under chapters 10-4,
10-6, 10-6A, and 10-6B, except § 10-6-31.4, only if assessed the same as property
of equal value.
For taxes payable in 2010, 2011, 2012, and 2013, the total amount of local effort
shall be increased by the lesser of three percent or the index factor, established
pursuant to § 10-13-38 plus a percentage increase of value resulting from any
improvements or change in use of real property, annexation, minor boundary
changes, and any adjustments in taxation of real property separately classified and
subject to statutory adjustments and reductions under chapters 10-4, 10-6, 10-6A, and
10-6B, except § 10-6-31.4, only if assessed the same as property of equal value.
;
(8)
"Allocation for a student with a level one disability," for the school fiscal year
beginning July 1, 2004, is $ 3,533.13. For each school year thereafter, the allocation
for a student with a level one disability shall be the previous fiscal year's allocation
for such child increased by the lesser of the index factor or three percent;
(9)
"Allocation for a student with a level two disability," for the school fiscal year
beginning July 1, 2004, is $ 8,277.21. For each school year thereafter, the allocation
for a student with a level two disability shall be the previous fiscal year's allocation
for such child increased by the lesser of the index factor or three percent;
(10)
"Allocation for a student with a level three disability," for the school fiscal year
beginning July 1, 2004, is $ 12, 580.73. For each school year thereafter, the allocation
for a student with a level three disability shall be the previous fiscal year's allocation
for such child increased by the lesser of the index factor or three percent;
(11)
"Allocation for a student with a level four disability," for the school fiscal year
beginning July 1, 2004, is $ 12, 001.80. For each school year thereafter, the allocation
for a student with a level four disability shall be the previous fiscal year's allocation
for such child increased by the lesser of the index factor or three percent;
(12)
"Allocation for a student with a level five disability," for the school fiscal year
beginning July 1, 2004, is $ 15, 882.21. For each school year thereafter, the allocation
for a student with a level five disability shall be the previous fiscal year's allocation
for such child increased by the lesser of the index factor or three percent;
(12A)
"Allocation for a student with a level six disability," for the school fiscal year
beginning July 2004, is $8,122.23. For each school year thereafter, the allocation for
a student with a level six disability shall be the previous fiscal year's allocation for
such child increased by the lesser of the index factor or three percent;
(13)
"Child count," is the number of students in need of special education or special
education and related services according to criteria set forth in rules promulgated
pursuant to §§ 13-37-1.1 and 13-37-46 submitted to the Department of Education in
accordance with rules promulgated pursuant to § 13-37-1.1;
(14)
"Average daily membership," the average number of kindergarten through twelfth
grade pupils enrolled in all schools operated by the school district during the previous
regular school year plus the average number of pupils for whom the district pays
tuition;
(15)
"Nonpublic school," a sectarian organization or entity which is accredited by the
secretary of education for the purpose of instructing children of compulsory school
age. This definition excludes any school that receives a majority of its revenues from
public funds;
(16)
"Nonpublic average daily membership," the average number of children under age
sixteen who are approved for alternative instruction pursuant to § 13-27-2 during the
previous school year plus:
(a)
For nonpublic schools located within the boundaries of a public school district
with an average daily membership of six hundred or more during the previous
school year, the average number of kindergarten through twelfth grade pupils
enrolled during the previous regular school year in all nonpublic schools
located within the boundaries of the public school district;
(b)
For nonpublic schools located within the boundaries of a public school district
with an average daily membership of less than six hundred during the previous
school year, the average number of resident kindergarten through twelfth grade
pupils enrolled during the previous school year in all nonpublic schools
located within the State of South Dakota;
(17)
"Special education average daily membership," average daily membership plus
nonpublic average daily membership;
(18)
"Local need," an amount to be determined as follows:
(a)
Multiply the special education average daily membership by 0.1013 and
multiply the result by the allocation for a student with a level one disability;
(b)
Multiply the number of students having a level two disability as reported on
the child count for the previous school fiscal year by the allocation for a
student with a level two disability;
(c)
Multiply the number of students having a level three disability as reported on
the child count for the previous school fiscal year by the allocation for a
student with a level three disability;
(d)
Multiply the number of students having a level four disability as reported on
the child count for the previous school fiscal year by the allocation for a
student with a level four disability;
(e)
Multiply the number of students having a level five disability as reported on
the child count for the previous school fiscal year by the allocation for a
student with a level five disability;
(f)
Multiply the number of students having a level six disability as reported on the
child count for the previous school fiscal year by the allocation for a student
with a level six disability;
(g)
Sum the results of (a) through (f);
(19)
"Effort factor,"
the school district's special education tax levy in dollars per thousand
divided by $1.20
for taxes payable 2009, 2010, 2011, 2012, and 2013 shall be the
amount of taxes payable for the year divided by the amount of local effort as
calculated in subdivision (7)
. The maximum effort factor is 1.0.