Talking Points: Why South Dakota Needs a Law Allowing Agricultural Property to Withdraw from Road Districts

Current Law is Unfair and Outdated

South Dakota law (SDCL 31-12A-10) gives agricultural landowners only a one-time 60-day window to opt out when a road district is first formed. After that, there is no practical way for a farm, ranch, or nursery to leave the district — even if the land has been in legitimate agricultural use for decades. This is unreasonable.

2. Road Districts Have Limited Statutory Powers

Under SDCL 31-12A-21, road districts only have authority to impose ad valorem tax levies (based on property value) or special assessments (based on actual benefit received). Agricultural land often receives significantly less direct benefit from district roads compared to residential properties. Yet once formed, districts have no reasonable mechanism to release ag land.

3. Boards Have a Built-in Conflict of Interest

Road district boards have a strong financial incentive to keep agricultural property in the district so they can continue collecting revenue. They are effectively acting as both tax collector and judge when deciding whether a farm or nursery can exit. This lack of neutral oversight is unfair to landowners.

4. The Proposed Solution is Reasonable and Balanced

The bill would:

• Give agricultural landowners a continuing right to petition for withdrawal at any time.
• Make approval automatic unless the board objects and goes to circuit court.
• Require a neutral judge to decide, using a high “clear and convincing evidence” standard.
• Allow denial only if the property receives substantial and unique direct benefit from the district’s road maintenance that is materially greater than typical agricultural operations in the region.

This protects working farms while still giving road districts a fair opportunity to object in court.

5. This is Pro-Agriculture, Pro-Family Farm Policy

South Dakota’s economy depends on agriculture. We should not trap legitimate farms, ranches, and nurseries inside road districts indefinitely when the original law recognized that ag land is different. Giving agricultural property owners a fair way to withdraw supports our state’s #1 industry.

6. It’s a Targeted, Limited Fix

This legislation does not eliminate or weaken road districts. It simply corrects an obvious flaw in the current system and provides basic fairness and due process for agricultural landowners.

Proposed Bill-

AN ACT
Entitled, An Act to authorize the withdrawal of agricultural property from an existing road district.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

Section 1. That chapter 31-12A be amended by adding a new section to read as follows:

31-12A-__. Withdrawal of agricultural property from existing road district.

Any owner of land classified as agricultural property for purposes of taxation under chapter 10-6 may petition to withdraw that land from an existing road district organized under this chapter. The petition shall be filed with the board of trustees of the road district and the county auditor.

The withdrawal shall be approved unless the board of trustees, within sixty days of receiving the petition, files an objection in the circuit court in the county where the property is located.

If the board files an objection, the circuit court shall hold a hearing. The court may deny the withdrawal only if it finds by clear and convincing evidence that:

(1) The property receives substantial and unique direct benefit from the road district’s maintenance activities; and

(2) The level of road use generated by the property is materially greater than typical agricultural operations of similar size and type in the region.

For purposes of this section, “typical agricultural operations” includes crop farming, livestock production, horticulture, and nursery stock production.

If the petition is approved, the board shall:

(1) Update the district’s official survey and map to reflect the withdrawal; and
(2) File the updated map with the county auditor and the county register of deeds.

The withdrawal shall become effective on the first day of the following calendar year for purposes of any district charges or assessments.

Section 2. Nothing in this Act shall be interpreted to limit the ability of a road district and a landowner to reach a mutual agreement for the withdrawal of property.