June 15, 1977

Mr. John Schaeffer 
City Attorney 
Flandreau, South Dakota 57028

Official Opinion No. 77-53

Municipal authority to grant partial tax relief under SDCL 10-6-35.1

Dear Mr. Schaeffer:

You have requested an opinion from this office based upon the following factual situation:

FACTS: 

I am herewith requesting your official opinion related to SDCL 1967 10-6-35, and in particular SDCL 1967 10-6-35.1, 10-6-35.2, and 10-6-35.4.
    
The governing board of the City of Flandreau desires to pass a Resolution under SDCL 10-6-35.4 giving a tax break to various industrial property in Flandreau.  However, the City does not particularly desire to give the same tax break to commercial property, in particular apartment houses.  With respect, I refer you to the Declaratory Ruling 76-3 issued by Lyle Wendell, Secretary of Revenue, on December 21, 1976, to Mr. John F. Cunningham, City Assessor of Watertown, South Dakota.  In that Declaratory Ruling, Mr. Wendell states that apartment houses of all sizes would be classified as commercial property and must be given the same consideration and tax break as other industrial, commercial and nonresidential agricultural structures under the existing statutes.

Based on the above facts you ask the following questions:

QUESTIONS: 

1.  May the governing board of a municipality exclude apartment houses in a resolution that is passed under SDCL 10-6-35.4 if a resolution is passed which exempts “all new industrial, commercial and nonresidential agricultural structures”?
    
2.  May the governing board of a municipality exclude apartment houses and all other commercial property and only include industrial property in such a resolution under SDCL 1967 10-6-35.4?

IN RE QUESTION NO. 1:

In my opinion, the answer to your first question is no; the language of  SDCL 10-6-35.1 indicates to me that all such property is thereby specially classified and consequently all eligible to be treated equally under the discretionary formula discussed in SDCL 10-6-35.2 and SDCL 10-6-35.4.  I do not read these statutes as allowing county commissioners or governing boards of municipalities to accept or apply the special tax benefits to commercial buildings (excluding apartments) or just industrial buildings or structures, without including all of the structures fitting within the purview of SDCL 10-6-35.1.

IN RE QUESTION NO. 2:

The answer to your second question is also no.  In my opinion, there is no authority for the City of Flandreau to decide to specially classify one of the categories enumerated in SDCL 10-6-35.1, but not other categories or structures included therein.

Respectfully submitted,

William J. Janklow
Attorney General

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