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State eyes tax protection for grasslands

By Bob Mercer

Capitol Correspondent

PIERRE — Grasslands growing on crop-rated soils would get favorable tax treatment under a plan endorsed Tuesday by the state task force on agricultural land assessments.

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The proposal calls for grasslands to be valued for property taxes as though they were on non-crop soils.

Up to 4.8 million acres could be affected statewide, according to an estimate by the state Department of Revenue.

The change calls for assessors to consider actual use in determining the taxable value of a parcel of agricultural land.

Next step is consideration by the Legislature in the 2014 session that opens in January.

The idea came from rancher Lyle Perman, of Lowry. He is a task force member.

“Maybe I know best what I use my land for,” Perman said. “The reason we’re seeing the demise of our grasslands is economics. Many of these grasslands might never be restored.”

The South Dakota Corn Growers oppose the change, while the South Dakota Cattlemen’s Association supports it.

The proposal would require landowners starting July 1, 2015, to notify their county directors of equalization if cropland has been converted to non-cropland or non-cropland has been changed to cropland.

The task force is established in state law to oversee implementation of the soil- and productivity-based valuation system. The task force has a mix of legislators and citizens with interest in ag-land values.

Some legislators have searched for years for ways to encourage protection of grasslands. One such bill was brought in 2010 by now-U.S. Rep. Kristi Noem, R-Castlewood, while she was a state legislator, and then-Sen. Jim Peterson, D-Revillo.

It would have allowed grasslands that had been in place at least 10 years to be valued as non-cropland regardless of the underlying soil types.

The legislation won approval 48-21 in the House of Representatives but, according to Peterson, was scrapped in the Senate because the Department of Revenue wanted to work on a solution.

Peterson, now a member of the House, serves on the task force and voted Tuesday to endorse Perman’s proposal.

“I don’t know if this bill can get anywhere in the House or the Senate. But I think it deserves discussion in the taxation committee, so all parties can testify on the bill,” Peterson said.

He explained that the 10-year qualifying period in the Noem bill was based on federal Conservation Reserve Program contracts that paid farmers to idle land in grass.

“We wanted the landowner to have a chance, that if he wanted to leave it in grass, it would be taxed as grass,” Peterson said.