Require the director of equalization to adjust certain agricultural land values.
HB1246 would change South Dakota’s agricultural land assessment rules by requiring county directors of equalization to make value adjustments when certain factors affect the productivity of farm land. The bill amends existing law governing how agricultural land is classified and valued, including soil class designations, and it directs the Department of Revenue and county officials to use soil ratings and other data to determine assessed value. It also preserves the ability to classify some class I, II, or III soils as noncropland when productivity is reduced by listed factors and the land’s practical highest sustainable use is not crop production.
The bill also expands and clarifies the adjustment process for agricultural land assessments. It requires the director to consider factors such as location, size, soil survey statistics, terrain, topography, climate, accessibility, and surface obstructions, including shelterbelts. It requires documentation of any adjustment using reasonably related data, allows comparable sales data to support productivity adjustments, and requires records of adjustment evidence to be kept for the life of the adjustment. Property owners may request an examination if actual use differs from the soil classification or if productivity factors are present.
In practical terms, HB1246 would affect county equalization offices, the Department of Revenue, and agricultural landowners by making assessment adjustments more explicit and potentially more accessible when land conditions reduce productive value. It would not create a new tax, but it could change taxable assessed values for certain parcels of agricultural land, which may lower or otherwise alter property tax burdens depending on the facts of each parcel.
The general sentiment reflected in the voting history appears mixed to negative in committee, with one vote failing on a 3-8 do pass recommendation and a separate 8-3 vote to defer the bill to the 41st legislative day. That pattern suggests the proposal had some support but also significant hesitation or opposition. No committee transcript is available, so the specific arguments are not recorded here.
The main point of contention appears to be whether the bill would appropriately standardize and require value adjustments for agricultural land, or whether it would add complexity and discretion to the assessment process. Likely concerns include the administrative burden on county directors, the reliability of comparable sales and other data for productivity adjustments, and the potential revenue impact on local taxing jurisdictions if more land is assessed at lower values.
HB1246 would amend South Dakota Codified Laws §§ 10-6-130 and 10-6-131, changing how agricultural land is classified and how assessed value adjustments are made. It would require county directors of equalization to use soil ratings and specified productivity factors when valuing agricultural land, require documentation of adjustments, and preserve property-owner requests for review. The bill could affect assessed values for agricultural parcels and therefore influence property tax liabilities and local tax base calculations.
The available voting history suggests the bill was controversial or at least not broadly supported in committee. A do pass motion failed 3-8, while a motion to defer the bill to the 41st legislative day passed 8-3, indicating reluctance to advance the measure in its current form. With no transcript available, the record shows procedural resistance more than clear substantive consensus.
The likely areas of contention are the mandatory nature of assessment adjustments, the scope of factors county officials must consider, and the evidentiary standards for documenting productivity changes. Supporters likely view the bill as a way to ensure agricultural land is assessed more accurately when terrain, access, shelterbelts, or other conditions reduce productivity. Opponents may worry about inconsistent application across counties, increased administrative workload, and reduced property tax revenue for local governments and schools.