Governor Dennis Daugaard has asked the South Dakota Supreme Court to render advisory opinions on two bills awaiting his signature: Senate Bill 136, the tax incentive for restoring grassy buffer strips along streams and lakes, and Senate Bill 159, the insurers’ tax credit for private school scholarships.
Article V, section 5 of the South Dakota Constitution authorizes the Governor “to require opinions of the Supreme Court upon important questions of law involved in the exercise of his executive power.”
“Questions about the constitutionality of each of these bills were raised during the legislative debates,” said Gov. Daugaard. “My request for advisory opinions will allow these questions to be resolved before I decide whether to sign or veto these bills” [Governor’s Office, press release, 2016.03.14].
First off—holy cow! Read Article 5, Section 5: “The Governor has authority to require opinions of the Supreme Court upon important questions of law involved in the exercise of his executive power and upon solemn occasions.” If we regular slobs have constitutional concerns about some Legislative monstrosity, we have to let the beast become law, find someone with standing, lawyer up, go to circuit court, wrassle with the Attorney General (submit your Cory/Marty fanfic on Larry’s blog), and maybe someday a year or three from now get to argue our case in front of Chief Justice Gilbertson and colleagues. The Governor cocks an eyebrow at a bill, sends a note down the hall, and the Justices whip up an opinion by a week from Saturday? That’s awesome! That’s microwave popcorn! I want that power! I would run for Governor just to have that power! Every day in my administration would be a “solemn occasion.” Whoo-hoo!
O.K., I recognize the Justices probably don’t want the Governor interrupting their work flow with weekly requests for advisory opinions. Plus, these advisory opinions are hypothetical, nonbinding, and nonprecedential. Still, with every Session generating some bill or bills that raise constitutional questions (sometimes deliberately), I’m surprised our Governors don’t avail themselves of the Court’s advice more often.
The Governor’s request on SB 159 is the easier to explain. Senator Phyllis Heineman’s ALEC-flavored stealth vouchers bill gives tax credits to subsidize church-school tuition, which, as I pointed out last week, appears to pretty clearly violate Article 8, Section 16 of the state constitution, which says, “No appropriation of lands, money or other property or credits to aid any sectarian school shall ever be made by the state….” The Governor asks the Court to clarify SB 159 in the context of exactly that constitutional provision.
The Governor’s request for an advisory opinion on SB 136 puzzles me. SB 136 allows farmers who seed cropland back to grass in fifty-foot-wide strips along lakes and streams to have that land taxed at lower noncropland values. The Governor asks the Court to determine whether that assessment scheme violates Article 11 Section 2. Let’s work through that section line by line:
To the end that the burden of taxation may be equitable upon all property, and in order that no property which is made subject to taxation shall escape, the Legislature is empowered to divide all property including moneys and credits as well as physical property into classes and to determine what class or classes of property shall be subject to taxation and what property, if any, shall not be subject to taxation.
No property escapes taxation under SB 136, so, so far, so good.
Taxes shall be uniform on all property of the same class, and shall be levied and collected for public purposes only.
Hmmm… does classifying riparian buffer strips as noncropland make the taxes on agricultural property non-uniform? SB 136 opponent Rep. Mary Duvall (R-24/Pierre) argued in the House that land management decisions are not taxable events, yet that doesn’t stop us from taxing land differently when a farmer makes the land management decision to take land out of production completely and turn it into a housing development. Besides, distinguishing cropland from grassy buffer strips seems no more drastic than the wild patchwork of distinctions we make between current cropland and grazing land and all the gradations of value based on soil type and historical crop values. Shall we throw out the entire ag assessment scheme and start over?
Taxes may be imposed upon any and all property including privileges, franchises and licenses to do business in the state. Gross earnings and net incomes may be considered in taxing any and all property, and the valuation of property for taxation purposes shall never exceed the actual value thereof. The Legislature is empowered to impose taxes upon incomes and occupations, and taxes upon incomes may be graduated and progressive and reasonable exemptions may be provided.
If assessing ag land based on actual use (crops, grazing, riparian buffer zones to protect the Big Sioux from all of Mark Mickelson’s CAFO crap), Article 11 Section 2 authorizes the perfect solution: a nice progressive income tax with reasonable exemptions. But there’s no SB 136 violation in this passage.
The Governor’s decisions on SB 136 and SB 159 are due Saturday, March 26. The Supreme Court has nine business days to study these two bills and offer their advisory opinions.
Minor Historical Notes: If I’d been paying attention, I’d have noticed that Governors Mickelson, Janklow, and Rounds used this Article 5 Section 5 power. We are one of only ten states whose Supreme Courts issue such advisory opinions. According to a footnote in this Fordham Law Review article, an inadvertent amendment in 1972 directs the Governor’s request to the Court rather than to the Justices.