In 1983 South Dakota, when a school district crossed county lines and property in one county had been pushed to a higher adjusted taxable value than adjacent property in the lead county, could the county commission of the higher-valued side lower the taxable percentage to bring the values back together?
Plain-English summary
South Dakota school districts often cross county lines (a "joint district"). In the early 1980s, the legislature wanted property in a joint district to be taxed at equivalent rates regardless of which county a parcel sat in. Chapter 77 of the 1980 Laws (codified as SDCL 10-12-31.1) had set up an equalization mechanism: the director of equalization had to adjust the level of assessment and the county auditor had to adjust the taxable percentages so they were equal in the lead county (the "county of jurisdiction") and in the overlapping county. Assessments counted as "equal" if the assessment-to-sales ratio on non-ag property and the assessment-to-full-ag-value ratio on ag property differed by less than 5 percentage points. Taxable percentages counted as "equal" if they differed by less than 1 percentage point.
Even with that mechanism running, gaps remained. After all the factors were applied, property in the overlapping county might still have an adjusted taxable value that was more than 5% above adjacent property in the lead county. Chapter 73 of the 1983 Laws added a relief valve: the county commission of the overlapping county could lower the taxable percentage on property in the joint district, for school-district purposes only, to bring the adjusted taxable values back within the 5% band.
The AG illustrated with a hypothetical. County A is the lead county, County B is overlapping. Both assess at 45% of full and true value under SDCL 10-6-33. Agricultural land in the joint district near the county line is assessed at $225 per acre, but after the SDCL 10-12-31.1 factors are applied, County B's land is bumped to $250 per acre, more than 5% above the County A side. Under Chapter 73 of 1983, County B's commissioners could drop the 45% taxable percentage to 42% on the joint-district property, bringing the result within 5% of County A.
The opinion also flagged Chapter 71 of the 1983 Laws, which added procedures for property owners aggrieved by assessor or board-of-equalization actions under SDCL 10-12-31.1. Those owner-side remedies were separate from the county-commission relief valve.
Currency note
This opinion was issued in 1983. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. SDCL 10-12-31.1 has been amended multiple times since 1983; the modern statute and the related equalization procedures should be checked against current text before applying this analysis.
What the opinion meant at the time
The opinion clarified a fairly mechanical but politically consequential question. Joint school districts depend on a uniform tax base across the participating counties. If the assessment-and-percentage equalization produces unequal results, the burden falls disproportionately on whichever county the equalization factors push higher. That creates within-district inequities and gives the higher-burdened county's residents a grievance.
Chapter 73 of the 1983 Laws gave the overlapping county a way to relieve the inequity by lowering its taxable percentage for school purposes. The mechanism was discretionary ("may" lower) rather than mandatory, so the county had to choose to act. The AG's hypothetical confirmed the math worked: a 3-percentage-point reduction (from 45% to 42%) was enough to close a $25 gap on $225-225-base ag land.
The carve-out to school-district purposes only was important. Lowering the taxable percentage for all purposes would shift property-tax revenues for county roads, county services, and other levies. Limiting the reduction to school purposes confined the trade-off to the joint-district context.
Common questions
Q: Is this opinion still good law?
A: SDCL 10-12-31.1 has been amended several times since 1983. The general framework of equalization in joint districts persists in current SD tax law, but the specific 5% and 1% thresholds, the carve-out language, and the relief valve mechanics should be verified against current text.
Q: Why does the lead county get to set the baseline?
A: The "county of jurisdiction" is statutorily designated. In a joint district, that designation determines which county's assessment-and-percentage profile is the comparator. The legislature picked the lead-county model rather than negotiating an averaged baseline.
Q: What if the overlapping county refuses to lower its taxable percentage?
A: The 1983 amendment phrased the relief valve permissively ("shall adjust" in some readings, but the AG used "may" in describing the discretionary trigger). The opinion does not address remedies if the county commission declines to act. Aggrieved property owners would presumably pursue the procedures Chapter 71 of 1983 added under SDCL 10-12-31.1.
Q: Did this only apply to ag land or to all property in joint districts?
A: The mechanism applied to "all property in the joint district for school purposes only" once triggered. The example used ag land but the relief valve was not limited to ag land. The triggering test (adjusted taxable value more than 5% above the comparator) applies separately for ag and non-ag categories.
Background and statutory framework
South Dakota property tax operates through a layered system. Each county's director of equalization sets assessment levels; the county auditor applies a taxable percentage to arrive at the taxable value used for levy calculations. The state Department of Revenue oversees the framework. Joint school districts that cross county lines create a coordination problem: two sets of county officials produce two sets of numbers for parcels that belong to one school district.
Chapter 77 of the 1980 Laws (SDCL 10-12-31.1) set up the basic equalization mechanism. Assessment levels were to be equal within a 5-percentage-point band; taxable percentages within a 1-point band. Both sides of a joint district were supposed to land within those tolerances after the equalization process ran.
Chapter 73 of the 1983 Laws filled the gap when the equalization process did not produce sufficiently tight numbers. The 5% threshold for triggering the county-commission relief valve aligned with the assessment-level tolerance and gave the system a second-stage correction. Chapter 71 of the 1983 Laws added owner-side procedures to challenge equalization decisions, which the AG flagged but did not analyze in this opinion.
The opinion's hypothetical worked through the numbers concretely. The drafting style was characteristic of South Dakota AG opinions in the era, with statutory text quoted in full, a numerical example, and a short concluding sentence.
Citations and references
Statutes:
- SDCL 10-12-31.1 (joint-district equalization; originally Ch. 77, S.L. 1980; amended by Ch. 73, S.L. 1983)
- SDCL 10-6-33 (45% assessment ratio at the time)
- Chapter 71, Laws of 1983 (owner-side equalization procedures)
- Chapter 73, Laws of 1983 (county-commission relief valve)
- Chapter 77, Laws of 1980 (original joint-district equalization)
Cases: None cited.
Source
Original opinion text
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