10-28-1
Secretary to assess operating property.
10-28-2
Assets included in operating property.
10-28-3
Annual statement required of railroad company--Date of filing--Contents.
10-28-4
Annual statement of railroad property occupied by warehousemen and others.
10-28-5
Addition to assessment value on failure of railroad to make statements.
10-28-6
Annual list of warehousemen and other occupants of railroad property--Contents.
10-28-7
Time of annual assessment of operating property--Separation of main lines, branches
and sidetracks.
10-28-8
Capital stock and other property included--Nonoperating property excepted.
10-28-9
Allocation of valuation for railroad operating partly without state.
10-28-10
Local assessment of nonoperating property permitted.
10-28-11
Nonoperating property defined--Rules.
10-28-12
Unit valuation of railroad operating property.
10-28-13
Cost approach, market approach and income approach considered in determination
of value of railroad company property.
10-28-14
Department of Transportation to assist in valuation.
10-28-15
Notice to railroad of assessment--Hearing--Notice of equalized assessment.
10-28-16
Notice to county auditors of railroad mileage and assessments--Distribution.
10-28-17
Repealed.
10-28-18
Determination by county commissioners of railroad valuations in taxing districts--Entry in assessment records--Notice to taxing districts.
10-28-19
Railroad map filed with county auditor--Exemption of operating property from local
assessment.
10-28-20
Notice to county auditor of deeds to railroads--Entry on railroad map.
10-28-21
Application of tax levies against railroad property--Extension in railroad tax book.
10-28-21.1
Repealed.
10-28-21.2
Tax credit for expenses of a capital nature incurred by public railroad or railway
corporation--Application of credit.
10-28-21.3
Expenses of a capital nature defined.
10-28-21.4
Capital improvement plan required to claim tax credit.
10-28-21.5
Notification of completion of capital project--Inspection and audit--Eligibility for
credit--Administrative hearing.
10-28-21.6
Promulgation of rules on capital expense tax credits.
10-28-22
Duplicate railroad tax book delivered to county treasurer--Collection and distribution
of railroad taxes.
10-28-23
Collection of delinquent railroad taxes.
10-28-24
Exemption of railroad companies operating over state-owned rail lines.
10-28-25
Promulgation of rules concerning leased property.
10-28-1. Secretary to assess operating property.
All property, real and personal, belonging to any railroad company in this state actually and necessarily used in the operation of its line or lines of railway in this state shall be considered as "operating property," and shall be assessed for the purposes of taxation by the secretary of revenue, and not otherwise.
Source: SDC 1939, § 57.1301; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-2. Assets included in operating property.
The term "operating property" shall mean and include all tracks and right-of-way, station grounds, all structures, and improvements on such right-of-way or station grounds, all rights and franchises, all rolling stock and car equipment, and all other property, real or personal, tangible or intangible, connected with or used in the operation of the railroad, including real estate contiguous to railroad right-of-way or station grounds held for reasonable expansion or future development.
Source: SL 1915, ch 100, § 5; RC 1919, § 6600; SL 1923, ch 112; SDC 1939, § 57.1301.
10-28-3. Annual statement required of railroad company--Date of filing--Contents.
It shall be the duty of the duly authorized officer of any railroad company owning, leasing, or operating any railroad within this state, to furnish the Department of Revenue on or before May first each year a statement signed and sworn to by such officer. Such statement shall be made as of the thirty-first day of the preceding December, according to the instructions and on the forms prescribed by the Department of Revenue, which shall embrace and show:
(1) The whole number of miles of main line or lines and branches thereof owned, operated, or leased in the state by the railroad company making the return, and the present true cash value thereof per mile;
(2) The number of miles of main line or lines and branches thereof owned, operated, or leased by such company, the number of miles of sidetrack and the present true cash value thereof per mile, the quantity of land actually used for gravel or sand beds or for snow protection, and the number and character of buildings and present cash value thereof, the width of right-of-way, the width and length of warehouse lots located in each county in the state, and the value thereof;
(3) The number of miles of main line and the number of miles of sidetrack and passing tracks and value thereof, the width and length of right-of-way, the number and size of warehouse lots upon or contiguous to the right-of-way, the size, cost, and character of the passenger depot, freight depot, warehouse or warehouses, shops, turntables, roundhouses, engine stables, coal houses, stockyards, and of all other buildings; the amount of ground used for yards in addition to ground already specified, and the quantity of unplatted land held or actually and necessarily used exclusively for railway purposes, owned by such company and situated within the limits of each municipality, and the value thereof, and of any terminals therein owned by such company;
(4) The number of engines, passenger, mail, express, baggage, freight, and other cars owned by such company and used in operating such railroad in this state, and on roads having various lines and branches within the state the statement shall show the actual amount of rolling stock owned by the company, in use on each of such lines and branches within this state during the year for which the report is made;
(5) The total gross earnings of the company for the year for which the report is made, the amount paid out for operating expenses, taxes, interest on bonds, and permanent improvements;
(6) The total net earnings of the company for the year for which the report is made, and the total number of miles owned and operated;
(7) The total gross earnings of the various lines and branches owned and operated by the company within this state during the year for which the report is made, the amount paid out of the same for operating expenses incurred in operating such lines and branches, the total amount of taxes levied upon such property for such year, the amount paid out for interest on bonds issued upon the lines and branches in the state, the amount of such bonds per mile and the interest which they bear, and the amount paid out for permanent improvements upon the lines and branches within the state during such year;
(8) The percent paid to the stockholders of such company during such year as dividends, upon both common and preferred stock, and the surplus representing undivided profits on hand at the time of making such statement;
(9) Such other information and statistics as the Department of Revenue may require.
Source: SDC 1939, § 57.1302; SL 1992, ch 60, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-4. Annual statement of railroad property occupied by warehousemen and others.
It shall be the duty of each and every railroad company operating in this state, on or before May first of each year, to furnish the Department of Revenue a statement in addition to that required by § 10-28-3, which statement shall describe each site occupied by any public warehouse, retail coal dealer, lumber dealer, or other occupant, upon the right-of-way, depot grounds, or warehouse lots of said railroad company. Such statement shall contain the name of the carrier, name of each individual lessee of such site, size of leased site, and value thereof.
Source: SDC 1939, §§ 57.1303, 60.0503; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-5. Addition to assessment value on failure of railroad to make statements.
In case the proper officer of any railroad company shall fail to make the statement under oath required by §§ 10-28-3 and 10-28-4, at the time therein provided, the Department of Revenue may, in its discretion, add twenty-five percent to the assessable value of the property of such company.
Source: SDC 1939, § 57.1304; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-6. Annual list of warehousemen and other occupants of railroad property--Contents.
The Department of Revenue is required, on or before the first day of July of each year, to make a list of all public warehouses, retail coal dealers, lumber dealers, or other occupant of sites upon the right-of-way, depot grounds, or warehouse lots of any railroad company in this state, which list so certified shall show the name of the railroad company, the municipality where such sites are located, the description and area of each individual site, also the value thereof as returned by the railroad company upon whose right-of-way such site is located.
Source: SDC 1939, §§ 57.1303, 60.0503; SL 1992, ch 60, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-7. Time of annual assessment of operating property--Separation of main lines, branches and sidetracks.
The secretary of revenue shall assess the operating property of railroads on the seventh day of July and if the seventh day of July falls on Sunday or on a legal holiday, then the following day, each year. The ownership and valuation of the assessment shall be as of January first each year, and shall be made upon the main line or lines and branches thereof and all sidetracks outside the limits of cities and incorporated towns within the state, separately.
Source: SDC 1939, § 57.1305; SL 1992, ch 60, § 2; SL 1996, ch 77, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-8. Capital stock and other property included--Nonoperating property excepted.
The assessment by the secretary of revenue shall include capital stock and all other property of railroad companies, except such property as is found by the secretary of revenue to be nonoperating property as defined in §§ 10-28-10 and 10-28-11.
Source: SDC 1939, § 57.1305; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-9. Allocation of valuation for railroad operating partly without state.
If any railroad company owns or uses operating property partly within and partly without this state, the secretary of revenue shall determine the value of the entire operating property of such railroad and shall allocate or assign a part of said value to this state by the use of such factors or methods as are reasonable and equitable.
Source: SDC 1939, § 57.1305; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-10. Local assessment of nonoperating property permitted.
All property of such railroad company, both real and personal, not actually and necessarily used in the operation of its line or lines of railway in this state shall be considered as "nonoperating property," and nothing in this chapter shall be so construed as to prevent the local assessment and taxation of said "nonoperating property."
Source: SL 1897, ch 28, § 48; RPolC 1903, § 2113; SL 1907, ch 64, § 1; re-en SL 1913, ch 347, § 1; SL 1915, ch 100, § 1; RC 1919, § 6596; SDC 1939, § 57.1301.
10-28-11. Nonoperating property defined--Rules.
The term "nonoperating property" means all land and improvements on such land, not situated on the right-of-way or station grounds of the railroad and not used as "operating property" within the meaning of the definition set out in §§ 10-28-1 and 10-28-2. The secretary of revenue may promulgate rules pursuant to chapter 1-26 to define "nonoperating property."
Source: SDC 1939, § 57.1301; SL 1987, ch 82, § 7; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-12. Unit valuation of railroad operating property.
The secretary of revenue shall, in determining the fair market value of the property, value all the property of any railroad company as a unit, but shall make due allowance for any nonoperating property.
Source: SDC 1939, § 57.1305; SL 1997, ch 61, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-13. Cost approach, market approach and income approach considered in determination of value of railroad company property.
For the purpose of determining the fair market value of the property of any railroad company, the secretary of revenue shall take into consideration the cost approach, the market approach, and the income approach to appraisal. In the market approach, the secretary shall consider the actual or market value of the shares of stock outstanding, the actual or market value of all bonds outstanding and all other indebtedness as may be applicable, for operating the road. In the income approach, the secretary may consider the company's growth rate and the rate of inflation in determining the capitalization rate. The secretary of revenue may take into consideration any other information or data of any kind or nature which the secretary deems material in arriving at the fair market value of the property.
Source: SDC 1939, § 57.1305; SL 1996, ch 77, § 6; SL 1997, ch 61, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-14. Department of Transportation to assist in valuation.
The secretary of revenue, as an aid to this determination of value as provided by this chapter, may call upon the Department of Transportation for any information and facts which the department may have concerning the property of any railroad company in this state. The Department of Transportation shall furnish the information upon request.
Source: SDC 1939, § 57.1305; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2005, ch 64, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-15. Notice to railroad of assessment--Hearing--Notice of equalized assessment.
The Department of Revenue shall give notice by registered or certified mail to the officer of any railroad company making a return of property, of the assessment and equalization made by it, and such notice shall fix a time not less than ten days after the mailing thereof, when such railroad company may appear before the secretary of revenue and be heard upon all matters relating to such assessment. The secretary of revenue may promulgate rules pursuant to chapter 1-26 concerning the conduct of such hearings.
Source: SDC 1939, § 57.1306; SL 1987, ch 82, § 8; SL 1994, ch 73, § 31; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-16. Notice to county auditors of railroad mileage and assessments--Distribution.
The Department of Revenue shall, on or before the fourth Monday in August, each year, transmit to the county auditor of each county through which any railroad runs, a statement showing the length of main track, of main line or lines, and the branches thereof and sidetracks within such county, and the assessed value based on a statewide formula that weights traffic (ton miles) fifty percent and miles of track in the county by fifty percent. The county auditor shall then distribute the value to each taxing district where the line runs on a per mile basis within the county.
Source: SDC 1939, § 57.1307; SL 1992, ch 60, § 2; SL 1996, ch 78, § 1; SL 1999, ch 222, § 8; SL 2003, ch 57, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-18. Determination by county commissioners of railroad valuations in taxing districts--Entry in assessment records--Notice to taxing districts.
It shall be the duty of the county auditor, after receiving such statement from the Department of Revenue, to turn such statement over to the board of county commissioners, who, at its first meeting after receiving such statement, shall make and enter in the proper record an order stating and declaring the length of the main track of road, branches, and sidetracks and assessed valuation of such road, branches, and sidetracks lying within each township and lesser taxing district in the county through or into which such road or branches thereof run as fixed by the rate of assessment per mile as made by the Department of Revenue; and shall also enter in the proper record the assessment made by the Department of Revenue of the railroad property in such county located within the limits of each municipality transmitted to the city auditor or town clerk thereof, and the amounts so entered of record shall constitute the taxable value of such property for all taxable purposes. They shall transmit a copy of such order and record to the city auditor of each first or second class municipality, the clerk of each third class municipality or civil township, and the proper officer of each lesser taxing district and also to such railroad company.
Source: SDC 1939, § 57.1308; SL 1992, ch 60, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-19. Railroad map filed with county auditor--Exemption of operating property from local assessment.
Every railroad company shall keep on file, with the county auditor of each county through or into which its line or lines of railroad run, a map showing correctly the right-of-way, length of sidetracks outside the corporate limits of municipalities, depot grounds, yard room, gravel or sand beds, and lands for snow protection, and lands otherwise actually and necessarily used by it in the maintenance and operation of its railway at the date of filing such map showing lots or parts of lots and blocks in municipalities and the number of acres in each government subdivision, and it shall be the duty of the county auditor to provide for the exception from assessment by the director of equalization of all such right-of-way, depot grounds, yard room, gravel or sand beds, and lands for snow protection, or land otherwise actually and necessarily used in the operation of its railway.
Source: SL 1915, ch 100, § 12; RC 1919, § 6607; SL 1923, ch 112; SDC 1939, § 57.1309; SL 1989, ch 82, § 41; SL 1992, ch 60, § 2.
10-28-20. Notice to county auditor of deeds to railroads--Entry on railroad map.
It shall be the duty of the register of deeds of the county to notify the county auditor of any deed to any railroad company for the right-of-way, depot grounds, yard room, gravel or sand beds, or lands for snow protection, that may be filed in his office for record so that the same may be entered by such county auditor on such map for the purposes mentioned in § 10-28-19.
Source: SL 1915, ch 100, § 12; RC 1919, § 6607; SL 1923, ch 112; SDC 1939, § 57.1309.
10-28-21. Application of tax levies against railroad property--Extension in railroad tax book.
All railroad property assessed by the Department of Revenue shall be taxable upon such assessment at the same rates and for the same purposes as the property of individuals within such counties, municipalities, civil townships, and lesser taxing districts. The proper officer of each taxing district shall certify to the county auditor the several amounts to be levied in such district, and the county auditor shall extend the taxes against such assessment in a book to be called the "railroad tax book," and shall transmit a copy of the taxes so extended to each railroad company.
Source: SDC 1939, § 57.1310; SL 1992, ch 60, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-28-21.2. Tax credit for expenses of a capital nature incurred by public railroad or railway corporation--Application of credit.
Any publicly operated railroad or railway corporation operating over rail lines owned by the publicly operated railroad or railway corporation located within this state may claim a credit against the tax levied on the rail lines for amounts that the railroad or railway corporation has certified as having been expended in the replacement, improvement, and repair of the rail lines. Only those expenses of a capital nature may be certified as an expense eligible for a credit pursuant to this section. The certification required by this section shall be on forms provided by the Department of Revenue. The labor and material expenses certified pursuant to this section shall be itemized separately by rail line and mile post locations. The credit provided in this section shall be applied proportionally across the railroad's entire mainline within this state, excluding any portion of the mainline that goes over ten million gross ton miles of revenue freight per mile annually in a calendar year. The credit shall be applied to tax liability over a three-year period in an amount equal to thirty-three and one-third percent the first year following certification; thirty-three and one-third percent of such an amount shall carry forward into the second year following certification; and thirty-three and one-third percent shall carry forward into the third year following certification. Each year's carryover shall be accumulated as a tax credit with other years' annual tax credits. No credit may be given for:
(1) The repair or replacement of railway line necessitated by washout, fire, or train derailment;
(2) Any portion of a project that is funded with state or federal grant funds or paid for by any third party; or
(3) Any expenses of a capital nature that are made on a segment of the rail line that exceeds ten million gross ton miles of revenue freight per mile in the previous calendar year.
Source: SL 2003, ch 57, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2004, ch 88, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2014, ch 58, § 1.
10-28-21.3. Expenses of a capital nature defined.
Expenses of a capital nature contained in § 10-28-21.2 are as defined in CFR 49 Parts 1200 through 1219 Subpart A Uniform Systems of Accounts for Railroad Companies, as amended through January 1, 2014, for Class 1 railroads or as defined in accordance with generally accepted accounting principles for regulated industries for Class 2 and Class 3 railroads.
Source: SL 2004, ch 88, § 2; SL 2014, ch 58, § 2.
10-28-21.4. Capital improvement plan required to claim tax credit.
Each year the railroad or railroad corporation requesting tax credits shall prepare a capital improvement plan detailing the proposed mainline and secondary line capital improvement projects including the project scope, estimated value, approximate scheduling of the projects, and the current category of the line on the railroad's system diagram map as provided in 49 CFR § 1152.10 as of January 1, 2014. The plan shall be presented to the Department of Transportation by March first of each year for any capital improvement project for which a tax credit will be requested.
Source: SL 2004, ch 88, § 3; SL 2014, ch 58, § 3.
10-28-21.5. Notification of completion of capital project--Inspection and audit--Eligibility for credit--Administrative hearing.
The railroad shall annually notify the Department of Transportation of completion of any capital project. However, if the cost of the capital project exceeds three hundred thousand dollars, the railroad shall notify the department immediately upon completion. The department may conduct a verification inspection of capital improvement project completion and may audit the capital improvement project according to South Dakota Department of Transportation Audit guidelines and the Federal-Aid Policy Guide 23 CFR Chapter 1, Subchapter B, Part 140, Subpart 1, as amended through January 1, 2014, to determine project value. The department shall report its findings to each county where the railroad has requested a tax credit. Only those capital expenses that have been claimed on the railroad's certification and verified by the department are eligible for a credit pursuant to § 10-28-21.2. Any railroad aggrieved by the decision of the department concerning the eligibility of a claimed capital expenditure for the tax credit authorized by § 10-28-21.2 is entitled to an administrative hearing conducted in accordance with the provisions of chapter 1-26.
Source: SL 2004, ch 88, § 4; SL 2014, ch 58, § 4.
10-28-21.6. Promulgation of rules on capital expense tax credits.
The State Railroad Board shall, in accordance with chapter 1-26, promulgate rules establishing the form upon which a railroad shall submit verification information for capital expenses being claimed as tax credits authorized by § 10-28-21.2, when the information is to be submitted, and the manner in which the certification is submitted.
Source: SL 2004, ch 88, § 5.
10-28-22. Duplicate railroad tax book delivered to county treasurer--Collection and distribution of railroad taxes.
The county auditor shall make and deliver a duplicate of such railroad tax book to the county treasurer, and the county treasurer shall be charged with the collection of such railroad taxes; and the amount due each municipality, civil township, or lesser taxing district shall be paid over when collected by the county treasurer to such municipality, township, or lesser taxing district.
Source: SL 1915, ch 100, § 10; RC 1919, § 6605; SDC 1939, § 57.1310; SL 1992, ch 60, § 2.
10-28-23. Collection of delinquent railroad taxes.
All laws relating to the enforcement of the payment of delinquent taxes shall be applicable to all taxes levied under the provisions of this chapter, and whenever any taxes levied under the provisions of this chapter shall become delinquent, the county treasurer having control of such delinquent taxes may proceed to collect the same in the same manner and with the same right and power as a sheriff under execution, except that no process shall be necessary to authorize him to sell engines, cars, or any rolling stock for collection of such taxes.
Source: SL 1915, ch 100, § 11; RC 1919, § 6606; SDC 1939, § 57.1311.
10-28-24. Exemption of railroad companies operating over state-owned rail lines.
Any railroad company operating over state-owned rail lines while under contract to the state is exempt from the provisions of chapter 10-28 only for purposes of assessment and taxation of railroad property.
Source: SL 1981, ch 331, § 13.
10-28-25. Promulgation of rules concerning leased property.
The secretary of revenue may promulgate rules pursuant to chapter 1-26 concerning the assessment and reporting of leased property.
Source: SL 1995, ch 53, § 7; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
