PIERRE, SD (AP)--South Dakota should test a new way to determine the taxable value of farm and ranch land, the state House decided Feb. 11.
HB1005 sets out an assessment method that would calculate the taxable value of farm and ranch land by looking at its ability to produce agricultural income.
The measure originally sought to put the new assessment method into effect as a pilot study that would have set the actual taxable value of agricultural property in some counties.
The bill's main sponsor, Rep. Jim Lintz, R-Hermosa, got the House to change the measure so the new method will be tested for a year or two in nine counties, even though it will not be used to set the actual taxable value of land during the test. The Legislature will evaluate the test and decide whether to put the new method into use.
he taxable value of agricultural land is now generally set by considering the selling price of comparable land in each county. But assessments can be skewed when some land is sold at high prices for housing or business development, recreation or other uses.
The proposed new method seeks to assess land based on its value when used for agricultural purposes.
Lintz said previous attempts to limit drastic increases in taxable value for agricultural land were just temporary fixes.
"This can be a permanent fix for the problem of agricultural valuation," he said.
The bill would determine the income-producing ability of land on the basis of how much it yields and the selling price of crops and livestock, averaged over a period of years. The income capacity then would be used to determine what land is worth when used for agricultural production in each county.
Surveys of soil types would be used to adjust the taxable value for different land in each county.
A pilot study on the new assessment method would be done in Brown, Clark, Corson, Custer, Hyde, Lyman, Meade, Moody and Turner counties.
A task force would look at the results of the study and make recommendations by October 2001 to the governor and the Legislature.
The House voted 58 to 9 to approve the bill, which next goes to the Senate.