Compiled by the Office of Secretary of State Joyce Hazeltine
SDCL 12-13-23 requires the Office of the
Secretary of State to prepare and distribute public information
concerning constitutional amendments, initiatives and referred
measures. This pamphlet is prepared by soliciting statements from
the proponents and opponents of amendments and measures.
The title, explanation and effect of a vote for each ballot question were provided by the Attorney General. No other statements on this pamphlet reflect the opinion of the State or the Attorney General.
The information was compiled by the Secretary of State as supplied by the writers, was not verified by the Secretary of State and does not reflect the position of the State regarding the legality or effect of the amendments or measures. The Secretary of State does not guarantee the accuracy of any claims made by the proponent or opponent writers in this brochure.
Constitutional Amendment F
Title: An amendment to Article VIII of the South Dakota Constitution, concerning the classification of property for purposes of taxation.
Attorney General Explanation
The Constitution permits the Legislature to classify real property for school taxation purposes, but limits agricultural property to a single class.
Amendment F would permit an unlimited number of classes of agricultural property for school taxation purposes. The number of classes and the tax rate for each class would be set by the Legislature. All property would still be assessed at or in equal proportion to its fair market value.
Amendment F may conflict with Amendment A. If both constitutional amendments pass and are found to conflict with each other, one or both could be declared void.
A vote "Yes" will allow any number of classes of agricultural property for school taxation purposes.
A vote "No" will leave the Constitution as it is.
Pro - Constitutional Amendment F
This proposed amendment to our State’s
Constitution would make it possible to have more than one class of
Agricultural Property for tax purposes.
The present constitutional language permits, but doesn’t require, an agricultural class of property. The Supreme court, in a recent decision, ruled that although the language is permissive, it is still restrictive in that we can only have one class of Agricultural Property. By this interpretation, they struck down a law that placed land which sold for a very high price in a separate class called non-typical agriculture.
These high priced sales usually take place in areas where there is urban development, recreational opportunities, aesthetic values, or other things that have no relationship to the land’s ability to generate agricultural income.
In some counties by including all these high sales in the market ratio analysis, it will drastically increase valuations and cause taxes on land to become so high it will force the owners to sell the land rather than leave it in agriculture. A worse case example would be no pastures or hay meadows in the Black Hills.
Several states have laws, which allow land to be taxed at it’s actual use, rather than it’s highest and best use. If the land is sold and a change in use results, e.g. housing or commercial where it was agricultural, then the property is revalued. This type of law would probably be unconstitutional under our present wording but would be permissible with this proposed amendment.
A problem with the current property valuation and taxation procedure is that it’s built on averaging; thus, some properties are over valued and over taxed while others are under valued and under taxed. In order to have equity, we must allow for more than one class of Agricultural property which will minimize the problem of averaging. As our state’s economy continues to change, it is imperative that the Legislature be permitted to properly classify all property.
Submitted by: Rep. Larry Gabriel, HC 84 Box 22, Cottonwood, SD 57775. Rep. Gabriel is a rancher from Haakon County and represents legislative district 26.
Con - Constitutional Amendment F
This amendment would create another class of agricultural land for
tax purposes called non-agricultural acreage, by creating two
classes of agricultural property, one that’s sold for less than 150
percent of its agricultural income value and one that sold for more
than 150 percent of its agricultural income value.
The County assessor’s tell me it would be very difficult to implement, and since it was judged to be unconstitutional by the Supreme Court in 1997, this would seem to be a wasted effort.
Amendment F is another attempt to allow agricultural property to be split into two different classes, which in effect creates the tax increase on those who paid too much for their property, the courts determined that valuing property solely on its sales price and not accounting for any agricultural factors such as type of soil, terrain, climate, productivity, etc.. Was unconstitutional. The court rejected the idea that the property had to be economically self-sufficient and determined the property should not be separately classified simply because the owner may have paid too much.
This amendment if passed, will end up in front of the Supreme Court again, costing the taxpayers more money.
I would recommend a no vote on amendment F.
Submitted by: Rep. Doug Johnson, RR 1 Box 49, Elkton, SD 57026. Rep. Johnson represents legislative district 8.