Costs still unknown for buffer strips tax break

PIERRE -- One of the arguments used back on March 29 to sustain the governor's veto of the buffer strips tax break for farmers and ranchers during the 2016 legislative session was its unknown cost.

PIERRE - One of the arguments used back on March 29 to sustain the governor's veto of the buffer strips tax break for farmers and ranchers during the 2016 legislative session was its unknown cost.

Now five-plus months later, Gov. Dennis Daugaard is throwing the full weight of his administration - four different departments and one of his top aides-behind his own buffer strips plan.

And, surprisingly, the estimated cost still remains unknown.

A legislative task force received an explanation Monday of the governor's plan. The chairman of that task force is State Sen. Jim Peterson, D-Revillo, whose buffer strip legislation was blocked by Daugaard's veto.

The senator, who isn't seeking re-election, was gracious in his remarks.


"I really like the governor's version of the buffer strip bill," Peterson said. "A lot of what he did was very good to improve that bill."

Peterson said he would have tried to introduce a more detailed version for the 2016 legislative session but waited until the final deadline for filing new bills.

The purpose is to encourage wider use of grass strips along waterways as a management tool to reduce agricultural pollution.

The governor's version would grant a 40 percent reduction in the land's tax assessment whether the property has crop-rated or pasture-rated soils.

In return for the tax break, the grassy strip would need to be 50 to 120 feet wide and along a state-recognized water body such as a lake, stream or river.

Its perennial vegetation couldn't be mowed or harvested before July 10 and couldn't be grazed May through September.

The landowner would need to apply each year no later than Oct. 15 with the county director of equalization.

Michael Houdyshell, director for the state Division of Property and Special Taxes, said the governor hasn't decided whether the legislation would be offered in the 2017 session by one of his state departments.


Houdyshell said the task force could be an option too.

The task force didn't take any action Monday toward endorsing the legislation. Peterson said it could be discussed at the panel's meeting next month.

Peterson said he could see allowing the ground to be mowed or hayed once every three years. He didn't like the provision that would allow mowing or harvesting if at least six inches of vegetation cover remained.

"It's really hard to go out and mow at a six-inch height. That's the only hiccup I see in the bill," he said.

The senator's legislation would have covered up to 50 feet and would have provided a tax break only on ground that had crop-rated soils. The incentive under Peterson's plan was to assess the ground as though it had pasture-rated soils.

Sen. Larry Tidemann, R-Brookings, said he liked the governor's bill better "at first blush" than the bill the governor vetoed.

Houdyshell said personnel from the governor's office and the departments of Game, Fish and Parks; Revenue; Agriculture; and Environment and Natural Resources worked on drafting the new legislation.

Houdyshell said he's working on cost estimates for the counties of Lincoln, Minnehaha, Pennington and Perkins for 50 feet and 120 feet. "We haven't completed our analysis," he said.


For Lincoln County, there would be 400 acres of crop-rated soils and 473 acres of grazing-rated soil. Strips 50 feet wide would reduce taxes by more than $4,000 and strips at the full 120 feet would run an estimated $11,838 in reduced taxes.

Houdyshell said he would bring more detailed analysis on the potential cost to the October meeting of the task force.

He said the strips would qualify for assessment reductions only if they were along water bodies identified for a beneficial use by the state Department of Environment and Natural Resources.

One of the panel's citizen members, rancher Lyle Perman from the Lowry area, praised the concept.

"This is a good bill and it does send a good message," Perman said. "But he added the tax incentive probably wouldn't attract any new participants 'without the right incentives.' "

Peterson's measure, SB 136, originally passed the Senate 25-0 and the House of Representatives 54-9.

The task force members took varying positions during the legislative battle.

For example, Tidemann voted aye for the bill and for the veto override. Rep. Mary Duvall, R-Pierre, voted against the bill and voted to uphold the governor's veto in the House. And Rep. Lee Qualm, R-Platte, voted for the bill originally but then voted to uphold the governor's veto.

The Senate voted 32-1 to override the veto. The House voted 37-28 for the override but fell short of the two-thirds majority of 47 needed.

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