August 25, 1983

Mr. Alan R. Hatzenbeller, CAA 
Davison County Director of Equalization 
Courthouse 
Mitchell, South Dakota 57301

Official Opinion No. 83-27

Adjustment of Taxable Values in Overlapping School Districts

Dear Mr. Hatzenbeller:

You have requested my official opinion on the effect of Chapter 73, Laws of 1983.  That Act amended SDCL 10-12-31.1 which was originally enacted as Chapter 77, Laws of 1980.  As such, it is entitled An Act to provide  equalization of property assessments and taxable percentages in overlapping school districts.  It requires the director of equalization to adjust the level of assessments and the county auditor to adjust the taxable percentages of agricultural and non-agricultural property so that the level of assessment and the taxable percentages are equal in the county of jurisdiction and in the overlapped portion of the joint district. Assessments are considered equal if the assessment to sales ratio on non-agricultural property and the assessment to full agricultural land value ratio on agricultural property of the district differs less than five percentage points from the respective ratios in the county of jurisdiction.  The taxable percentages are considered equal if they are less than one percentage point different.  When these factors are applied an adjusted taxable value is arrived at.

The 1983 Act, Chapter 73, is entitled An Act to allow the taxable percentages of counties in joint districts to be lowered under certain conditions.  So far as applicable here that amendment is as follows: 

However, if the adjusted taxable value of property in a county in a joint district differs from the taxable value of property immediately adjacent to it in the county of jurisdiction by more than five percent, that county commission for the county property immediately adjacent to the county of jurisdiction shall adjust the taxable percentage applied to all property in the joint district for school purposes only so that such taxable values are  equal.

This merely means that after the factors are applied to property in the overlapped district as required by Chapter 77, Laws of 1980, and it is found that there is a variance of more than five percent in the adjusted taxable value of the property compared with the property immediately adjacent in the county of jurisdiction the county commissioners of the overlapped county may lower the taxable percentage applied to property in the district so that the taxable values are equal.

For example, let us suppose that County A is the county of jurisdiction and County B is the overlapped county.  Both counties are assessing at 45 percent of full and true value pursuant to SDCL 10-6-33.  Let us further assume that agricultural land in the joint district immediately adjacent to the county line is assessed at $225.00 an acre, however, with the application of the factors prescribed by SDCL 10-11-31 the property in County B is raised to $250.00 an acre which would be more than 5 percent above the value of the adjacent property in County A.  Under the provisions of Chapter 73, Laws of 1983, the county commissioners of County B would be empowered to reduce the taxable percentage of the property in the overlapped district so that it was no more than 5 percent above the similar property in County A.  In this case then the result could be achieved by reducing the taxable percentage of 45 percent to a taxable percent of 42 percent which would bring the property within the 5  percent permissible range.

There are, of course, additional procedures for equalizing and adjusting the assessed valuation established by Chapter 71, Laws of 1983, which cover the property of a person aggrieved by actions of assessors or boards of equalization under SDCL 10-12-31.1.

Respectfully submitted,

Mark V. Meierhenry
Attorney General