House lawmakers are passing a bill that designates grassland above a certain elevation as non-cropland, regardless of soil type.
Critics worry about shifting the tax base in some counties.
The bill states that ag land may be categorized as non-cropland, regardless of the soil classification, if the elevation is at least 1,950 feet above sea level.
The non-cropland must be either native grassland or seeded with perennial vegetation for at least 20 years.
New soil reclassifications from a few years ago designated some grassland as cropland, raising taxes on ranchers West River.
Representative Trish Ladner is bringing the bill. The Republican from Hot Springs says some ranchers were hit hard by the change.
“Our ranchers—and growers—are the backbone of our state. The largest industry—it way tops our tourism. If we don’t safeguard that, these ranchers are being approached by developers every day to sell out," Ladner says. "Do we want South Dakota to become strip malls and subdivisions? There’s going to be some of that. I don’t want that for South Dakota. Ranchers don’t want that for South Dakota.”
A fiscal impact note says the impact on counties, cities and schools would be zero, but the tax burden would shift. If all eligible acres were designated as non-cropland, it would reduce the projected tax dollars levied on those acres by $12.5 million, but those taxes would be shifted to other taxpayers.
Representative Larry Tidemann sat on the tax force that moved ag taxes from market-based to productivity.
The Republican from Brookings says the bill is not needed because assessors can already change parcels to non-cropland.
“It’s already in statute,” Tidemann says. “The other thing I want to bring forward is this bill does not fix it. Property taxes go to schools, county, city and water districts. That’s where it goes. If you don’t pay the tax on your land, others will have to pick up the difference, because counties are not going to decrease what they need to run their budget.”
The bill passed 38 to 30. It now heads to the Senate.
