STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

August 30, 1966

Robert Hofer
Hughes County State’s Attorney
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 67-68 pg. 25

Taxation. Should County Auditors include structures, etc. on land for tax purposes.

Your request for an official opinion from this office presents the following factual situation:

"Chapter 213 of S. L. 1964, is the current statute covering the levy limits for the school general fund on agricultural lands as defined by law. Said limit to be 12 mills, if the average assessed valuation is $19.00 per acre or more.

"Chapter 210 of S. L. 1964 (which is our current statute pending approval of the constitutional amendment this fall & resulting effectiveness of Chapter 282 S. L. 1965) defines agricultural lands as to include all real estate, etc.

"SDC 57.0312 defines real property to include the land, 'buildings, structures and improvements', etc."

You have asked the following specific questions:

"1. Should the county auditors include the structures, etc. on the land in the determination of the average value per acre for the purpose intended?

"2. On what figure should the average value be determined the full and true value or the 60 percent assessed value called the taxable value?"

As to the first question, SDC 57.0312 provides that:

"Real property, for the purpose of taxation, shall be construed to include the land itself... and all buildings structures and improvements, trees or other fixtures."

SDC 57.0514 as amended by Chapter 213 of the Session Laws of 1964 provides that:

"The mill levy for the general fund of a school district shall be the same on agricultural lands, as defined by law, as on personal property and other real estate except that the mill levy on agricultural lands of a school district containing an incorporated town shall not exceed a maximum of twelve mills "where the average assessed valuation of the agricultural lands of the school district in any year is nineteen dollars per acre or more.'

Chapter 210 of the Session Laws of 1964 provides that:

"Classification and assessment of real estate for school taxation…For the purposes of school taxation, real property within school districts is hereby classified into two separate classes, to wit: (1) Agricultural lands; (2) other real estate.

"Agricultural lands within school districts include all real estate, used or occupied exclusively for agricultural purposes. . .”

Further the statute provides that:

"It shall be the duty of the county auditor. . . (to) show the number of acres of agricultural lands within such school district and the average assessed valuation per acre, including improvements thereon…

It is a well known rule of construction that words will be interpreted in their ordinary meaning unless a statute refers to a technical matter. (SDC 65.0202) Further where there is a general definition given to define a certain thing (here, real property) and the language is not specifically redefined, then the general definition will apply. Here the term real property has not been specifically limited to raw land so that the general definition is applicable.

Consequently, it is our opinion that the answer to the first question must be that the structures on the land must be included in the assessment.

As to the second question, SDC 1960 Supp. 57.0334 provides that:

"All property shall be assessed at its true and full value in money, but only 60 percent of such assessed value shall be taken and considered as the taxable value."

Previous to this time land was in theory taxed at its true and full value. Consequently, it is clearly the intention of the Legislature to change this and make the taxable increment 60 percent of the value of the land.

Consequently, the intent is clear; land in our opinion must be assessed at its true and full value. but the taxable basis may be only 60 percent of its true and full value. The language here is very clear and not subject to controversy. In the latest case, Chicago Northwestern Railway v. Gillis 80 SD 617, 122 NW 2d 532, the court was very explicit in its language, in effect, stating that 60 percent was the most that could be taxed of the true and full value.

The answer to your second question is that the land should be evaluated at its true and full value but only 60 percent of this is taxable and consequently, mill levy limitation, the maximum that can be levied on certain properties (i. e.) agricultural land under SDC 1960 Supp. 57.0514 as amended relates to the value on which the taxes are levied (viz) taxable value. It was not until 1957 by the enactment of Chapter 459 that the Legislature decreed that any basis other than true and full value should be used in the computation of taxes.

Clear is the intent of the Legislature to base limitations on the tax list value and not on the true and full value. (SDC 1960 Supp. 57.0334)