The Rural Lobbyist: Actual Use vs. Highest and Best, the Debate Continues.

February 17, 2017 – By #South Dakota Farmer Union

 Taxation is always a topic of discussion during the legislative session and this session was no different. A debate has been taking place within the agricultural community about the best way to tax property. That discussion was at the forefront with Senate Bill 142. SB 142 was one of three bills SDFU was tracking during the 10:00 a.m. session on Wednesday; the other being Senate Bill 135 and Senate Bill 145. This particular bill in its original form would have replaced the model we currently use for taxing agricultural land. The current model in question is often referred to as the highest and best use model. In this case the name really says it all as the model suggests land be taxed based on its potential rather than on its actual usage. The new model would do the latter, tax land on its actual use rather than the land’s perceived highest and best use. SDFU has long been in support of this issue and was ready to testify in support of similar legislation last year that was ultimately tabled at the request of bill sponsor Senator Jim Peterson. If you recall, the bill was tabled because of HB 1007 that appropriated money to SDSU to update the soil tables across all counties in South Dakota. It was estimated to be a two year project and would provide us with the data to debate the merits of “actual use” vs. “highest and best”. Unfortunately, it was known going into the committee that there wasn’t much palatability for actual use legislation this session among legislators as they were awaiting the results of the two year study that will be completed next year. That’s not to say there wasn’t a reason to keep the conversation going and that is exactly what SB 142 did. With that being said the bill was ultimately amended, as was expected, to simply codify the timeline of the study appropriated for in last year’s HB 1007. It is important to note that there were Senators still in strong support of the measure regardless of timing and palatability as Senators Frerichs and Russell resisted the amendment in favor of the bill in its original form. It will most certainly be a topic of discussion for the Ag Land Taskforce and an issue of priority for SDFU heading into the 2018 legislative session. The bill in its amended form passed out of committee 6-1.

Last Modified: 02/17/2017 7:57:11 pm MST