82nd Legislative Session _ 2007

Committee: Senate Taxation
Wednesday, February 14, 2007

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P    Duenwald
P    Garnos
P    Hansen (Tom)
P    Jerstad
P    Koetzle
P    Lintz, Vice-Chair
P    Peterson (Jim)
P    Turbak
P    McNenny, Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Chair McNenny

MOTION:     TO APPROVE THE MINUTES OF FRIDAY, FEBRUARY, 9, 2007

Moved by:    Hansen (Tom)
Second by:    Garnos
Action:    Prevailed by voice vote.

          SB 182: provide for incentives for the development of certain power production facilities utilizing renewable resources.

         Gavel was turned over to Vice-Chair

Presented by:    Senator Jim Peterson
Proponents:    Dustin Johnson, Public Utilities Commission
        Bill Even, Governor's Office of Economic Development
        Mike DeMesserman, Black Hills Corp.
        Matt McLarty, South Dakota Farmers Union

        \
 MOTION:     AMEND SB 182

182ta
     On the printed bill, delete everything after the enacting clause and insert:

"
     Section 1. That § 49-34A-8 be amended to read as follows:

     49-34A-8.   The Public Utilities Commission commission , in the exercise of its power under this chapter to determine just and reasonable rates for public utilities, shall give due consideration to the public need for adequate, efficient , economical, and reasonable service and to the need of the public utility for revenues sufficient to enable it to meet its total current cost of furnishing such service, including taxes and interest, and including adequate provision for depreciation of its utility property used and necessary in rendering service to the public, and to earn a fair and reasonable return upon the value of its property.

     Section 2. That chapter 49-34A be amended by adding thereto a NEW SECTION to read as follows:

     The burden is on the public utility to establish that the underlying costs of any rates, charges, or automatic adjustment charges filed under this chapter are prudent, efficient, and economical and are reasonable and necessary to provide service to the public utility's customers in this state."

Moved by:    Peterson (Jim)
Second by:    Garnos
Action:    Prevailed by voice vote.

        Gavel was returned to the chair

MOTION:     DO PASS SB 182 AS AMENDED

Moved by:    Peterson (Jim)
Second by:    Jerstad
Action:    Prevailed by roll call vote.(9-0-0-0)

Voting Yes:    Duenwald, Garnos, Hansen (Tom), Jerstad, Koetzle, Lintz, Peterson (Jim), Turbak, McNenny

 MOTION:     TO AMEND TITLE OF SB 182


182tta
     On page 1, line 1 of the printed bill, delete everything after " Act to " and insert "revise and establish certain provisions regarding the setting of rates for public utilities.".

     On page 1 , delete line 2 .

Moved by:    Garnos
Second by:    Peterson (Jim)
Action:    Prevailed by voice vote.

 MOTION:     PLACE SB 182 ON CONSENT CALENDAR

Moved by:    Hansen (Tom)
Second by:    Peterson (Jim)
Action:    Prevailed by voice vote.

          SB 40: revise the distribution process for the bank franchise tax. determine the deferred value and taxes of agricultural land that is changed to another classification of property.

        See previous testimony of February 9, 2007
        
Presented by:    Senator Jim Lintz
        Dean Krogman, South Dakota Association of Realtors
        David Owen, South Daktoa Chamber of Commerce & Industry
        Dick Gregerson, Sioux Falls Chamber

MOTION:     AMEND SB 40

40fa
     On the printed bill, delete everything after the enacting clause and insert:

"      Section 1. That chapter 10-6 be amended by adding thereto a NEW SECTION to read as follows:

     If agricultural land is changed to another classification of property, the director of equalization shall determine its deferred value for the previous three years. The deferred value of the property is the difference between the market value of the property, assessed according to its new use, and the assessed value of the property. The director of equalization shall provide these values to the county auditor. The county auditor shall determine the deferred taxes on the property by applying the total property tax levies imposed on the new classification of property for each of the previous three years. The owner of the property at the time the change in property classification occurs shall pay to the

county treasurer the deferred taxes on the property. The county auditor shall notify the property owner in writing of the deferred value and the deferred taxes of the property. The owner shall pay the deferred taxes within thirty days of receiving the notice required by this section or before transferring the property, whichever occurs first.

     Section 2. That chapter 10-21 be amended by adding thereto a NEW SECTION to read as follows:

     The county may file a lien with the register of deeds on the property for any deferred taxes owed to the county pursuant to section 1 of this Act. No property on which the county has filed a lien on pursuant to this section may be transferred unless the property taxes are paid in full.

     Section 3. That chapter 10-21 be amended by adding thereto a NEW SECTION to read as follows:

     The owner of the property may appeal the deferred value assigned to the property to the board of county commissioners within thirty days of receiving the notice required by section 1 of this Act.

     Section 4. That chapter 10-21 be amended by adding thereto a NEW SECTION to read as follows:

     Any revenue received by the county from the payment of deferred property taxes pursuant to section 1 of this Act shall be deposited in the county general fund. The county treasurer shall, upon receipt of the revenue, apportion and distribute the revenue among the taxing districts that levied a tax on the property for which the deferred taxes were paid, including the county, based upon the taxing district's percentage of the total property taxes collected on such property."

Moved by:    Lintz
Second by:    Hansen (Tom)
Action:    Prevailed by voice vote.

 MOTION:     DO PASS SB 40 AS AMENDED

Moved by:    Lintz
Second by:    Duenwald
Action:    Failed by roll call vote.(3-6-0-0)

Voting Yes:    Duenwald, Lintz, McNenny

Voting No:    Garnos, Hansen (Tom), Jerstad, Koetzle, Peterson (Jim), Turbak

MOTION:     DEFER SB 40 TO THE 41ST LEGISLATIVE DAY

Moved by:    Duenwald
Second by:    Peterson (Jim)
Action:    Prevailed by roll call vote.(8-1-0-0)

Voting Yes:    Duenwald, Garnos, Hansen (Tom), Jerstad, Koetzle, Peterson (Jim), Turbak, McNenny

Voting No:    Lintz

          SB 205: provide for incentives for the development of certain power production facilities utilizing renewable resources.

         See previous testimony of February 9, 2007

Presented by:    Senator Frank Kloucek
Opponents:    Jan Talley, South Dakota Dept of Revenue and Regulation
        Bill Van Camp, Acciona Wind Energy
        Bob Miller, South Dakota Electric Utilities

MOTION:     DEFER SB 205 TO THE 41ST LEGISLATIVE DAY

Moved by:    Hansen (Tom)
Second by:    Lintz
Action:    Prevailed by roll call vote.(7-1-1-0)

Voting Yes:    Garnos, Hansen (Tom), Jerstad, Lintz, Peterson (Jim), Turbak, McNenny

Voting No:    Koetzle

Excused:    Duenwald

         SB 164: permit certain taxing districts to revise the amount of revenue payable from property taxes.

Presented by:    Senator Brock Greenfield
Proponents:    Michael Kenyon, Department of Revenue and Regulation
        Yvonne Taylor, South Dakota Municipal League

MOTION:     AMEND SB 164
164ff
     On the printed bill, delete everything after the enacting clause and insert:

"
     Section 1. That chapter 10-13 be amended by adding thereto a NEW SECTION to read as follows:

     Any taxing district that did not levy a property tax for general fund purposes in any year since 1996 is exempt from the provisions of §  10-13-35 if the taxing district establishes the amount of revenue payable from taxes on real property for general fund purposes pursuant to section 2 of this Act. Each year thereafter such taxing district may increase the amount of revenue payable from property taxes by applying the growth and the index factor pursuant to §  10-13-35. Any excess levy imposed on property pursuant to §  10-13-36 terminates when a general fund levy is imposed by such taxing district pursuant to section 2 of this Act.

     Section 2. That chapter 10-13 be amended by adding thereto a NEW SECTION to read as follows:

     The governing body of a taxing district may, by resolution, impose the levy provided in section 1 of this Act with an affirmative two-thirds vote of the governing body on or before July fifteenth. The decision of the governing body to impose the levy shall be published within ten days of the decision as follows:

             (1)      Publication shall be made at least twice in the legal newspaper designated by the governing body pursuant to law, with no fewer than five days between publication dates, before the tax imposition takes effect;
             (2)      The announcement shall be at least three newspaper columns in width and four inches in length or at least one-sixth of a page in size, whichever size is greater;
             (3)      The announcement shall be headed with the following statement in a typeface no less than eighteen point type: "ATTENTION TAXPAYERS: NOTICE OF PROPERTY TAX IMPOSED OF $(fill in amount)." The remainder of the announcement shall consist of a reproduction of the resolution including the amount that property taxes will be imposed and a statement of the right to refer the decision of the board to a vote of the people as provided in this section. The secretary of revenue and regulation, in rules promulgated pursuant to chapter 1-26, shall prescribe a uniform form to be used by the taxing district for notification of taxpayers as required by this section.

             However, the requirements of subdivisions (2) and (3) are waived if:
             (a)      The property tax imposed is for less than fifteen thousand dollars; or
             (b)      A copy of the resolution is mailed to every property taxpayer in the local governmental unit, by first class mail or bulk mail, within twenty days of the decision; and
             ©)      A copy of the resolution is printed in each official newspaper in the local governmental unit's boundaries.

     For the purposes of subsections (a),(b),and©), the first publication is not deemed to have occurred until three days after the mailing is sent or the resolution is delivered to the official newspaper.

     The governing body's decision may be referred to a vote of the people upon a resolution of the governing body of the taxing district or by a petition signed by at least five percent of the registered voters in the taxing district and filed with the respective governing body within twenty days of the first publication of the decision. The referendum election shall be held on or before October first preceding the year the taxes are payable."

Moved by:    Lintz
Second by:    Turbak
Action:    Prevailed by voice vote.

 MOTION:     AMEND SB 164

164fg
     On the previously adopted amendment (164ff) in section 2, subsection (b), delete "local governmental unit" and insert "taxing district"

     In section 2, subsection (c), delete "official" and insert "legal"

     In section 2, subsection (c), delete "local governmental unit's" and insert "taxing district's"

     In section 2, in the paragraph after subsection (c), delete "official" and insert "legal"

Moved by:    Turbak
Second by:    Hansen (Tom)
Action:    Prevailed by voice vote.

 MOTION:     DO PASS SB 164 AS AMENDED

Moved by:    Turbak
Second by:    Hansen (Tom)
Action:    Prevailed by roll call vote.(7-0-2-0)

Voting Yes:    Garnos, Hansen (Tom), Koetzle, Lintz, Peterson (Jim), Turbak, McNenny


Excused:    Duenwald, Jerstad

 MOTION:     PLACE SB 164 ON CONSENT CALENDAR

Moved by:    Peterson (Jim)
Second by:    Hansen (Tom)
Action:    Prevailed by voice vote.

Lois Henry

____________________________

Committee Secretary
Kenneth McNenny, Chair