2022 law effectively reduced South Dakota farmland valuations by a total of $120.5 million

South Dakota Law Reduces Farmland Valuations by $120.5 Million

Introduction

A South Dakota law, SDCL 10-6-130, has successfully reduced farmland valuations by $120.5 million by allowing counties to re-designate land from crop-land to non-crop land. This law has sparked a discussion among lawmakers and stakeholders about its effectiveness in achieving its intended goals. The implementation of this law has significant implications for the valuation of farmland based on soil quality across the state.

Background

Last year, Majority Whip Rep. Kirk Chaffee introduced HB 1325, which revised the classification of agricultural land based on soil type. The law allows counties in South Dakota with Class 4 soil type to change the designation of their lands from crop land to non-crop land, or vice versa. Cropland refers to land capable of producing a crop, while non-cropland has limitations that make it unsuitable for crop production.

Implementation and Impact

Prior to the enactment of this law, adjustments to individual parcels could be made by some counties. However, this process was time-consuming and inefficient. With the new law in place, counties can now re-designate all Class IV soils in their jurisdiction, making the adjustment process easier and more efficient. Counties are permitted to re-designate up to 20% of their crop land to non-crop land.

Since the passage of the law, over 365,000 acres of land in South Dakota have changed categories, resulting in a statewide reduction in land value of $120.5 million. This reduction in farmland valuations helps to keep agricultural land values in check and prevents them from skyrocketing.

Discussion and Future Steps

The Agricultural Land Assessment Task Force, comprised of legislators, agribusiness owners, and agribusiness lobbyists, met to discuss the implications of the law and its impact on the tax system. There was a consensus among the task force members that the law is functioning as intended and is not overly burdensome administratively. However, there were concerns about ensuring that the adjustments are made in good faith and that the tax system remains fair.

Looking ahead, Rep. Chaffee expressed his hope that the Department of Revenue (DOR) will continue to refine its soil rating system. He also emphasized the importance of collaborating with entities such as South Dakota State University (SDSU) to gather accurate information for the valuation process. The task force concluded that this meeting was the first and only one for the summer, but they remain open to new legislation and ideas to further improve the system.

Conclusion

The South Dakota law allowing counties to re-designate land from crop-land to non-crop land has successfully reduced farmland valuations by $120.5 million. This law has been deemed effective in keeping agricultural land values in check and preventing excessive increases. The task force responsible for assessing the law’s implementation has expressed satisfaction with its functionality and administrative ease. Moving forward, there is a commitment to refining the soil rating system and collaborating with relevant entities to ensure accurate valuations.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 2: Zero Hunger
• SDG 11: Sustainable Cities and Communities
• SDG 15: Life on Land

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 2.4: By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters, and that progressively improve land and soil quality.
• SDG 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management in all countries.
• SDG 15.3: By 2030, combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degradation-neutral world.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for SDG 2.4: Proportion of agricultural area under productive and sustainable agriculture.
• Indicator for SDG 11.3: Proportion of cities with a direct participation structure of civil society in urban planning and management that operate regularly and democratically.
• Indicator for SDG 15.3: Proportion of land that is degraded over total land area.

Table: SDGs, Targets, and Indicators

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Source: mitchellrepublic.com

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