PIERRE | State government owns hundreds of thousands of acres of rural land across South Dakota, especially in the northwest, that are leased to ranchers and farmers.
But many of the fences, watering systems and other improvements that are on the state acreages were put in place by many of those private renters.
When leases change hands, one particular question sometimes comes up: How much should the new tenant pay the previous tenant for those privately made improvements?
South Dakota right now doesn’t have an exact process in state law.
Instead, the state’s commissioners of school and public lands had relied, for at least the past century, on official opinions from state attorneys general when setting their policies.
The first opinion was written in 1919. The most recent came in 1985.
South Dakota voters elected Ryan Brunner as commissioner in 2014. Last year he decided it was time to pull those seven opinions together and propose one new state law.
The result this session is SB 39. The state Senate on Jan. 17 supported Brunner’s plan 35-0. The state House of Representatives voted for it 68-0 Wednesday afternoon, in what might be final legislative approval.
Now SB 39 is on the way to Gov. Dennis Daugaard for a decision whether it becomes state law or has some problem so serious to warrant his veto.
Existing law says a board decides the value of an improvement. The board has one representative apiece for the new leaseholder and the old leaseholder. They would select the board’s third member.
That part of the law won’t change. Brunner’s proposal would require that only improvements permitted by the commissioner’s office would be eligible for compensation.
It also would add language requiring the commissioner to provide to the board an itemized list showing each improvement that was officially permitted. The board would still decide how much each improvement is worth.
Brunner’s language specifies the appraised value would be based on the improvement’s original cost, minus the actual out-of-pocket expenses paid by the previous leaseholder.
His change also would clarify the appraised value can’t reflect any grant, subsidy or contribution that came from another source toward the expense of the improvement.
Brunner said the intent is to try to reduce confusion by bringing together the seven official opinions from past attorneys general into a new state law.