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Financial Opportunities for Acreage Owners Mindy Hubert

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Presentation on theme: "Financial Opportunities for Acreage Owners Mindy Hubert"— Presentation transcript:

1 Financial Opportunities for Acreage Owners Mindy Hubert

2 Income Opportunities Ag Status (tax savings) Grants Other programs

3 Benefit of “Ag Status” Can help lower property taxes, sometimes very significantly – Depends on your county tax levy – Example: $14 tax/$1000 assessed for ag land vs. $16 tax /1000 assessed value for non-ag

4 Benefit of “Ag Status” More significantly, depends on how your property is assessed: – Non-ag (owner-occupied) vs. ag property

5 Benefit of “Ag Status” Non-ag property is assessed at market value Ag property is assessed based on a productivity formula – Almost always significantly less than Market Value most notable on properties valued high (Black Hills)

6 Example Property Description AssessmentTax Wall or Black Hills, 100ac ag land @ $200/ac$200*100ac=$20,000*.014 (levy rate) =$280 Wall, 100acnon-ag @ $1000/ac $1000*100ac=$100,000 *.016 (levy rate) =$1600 Black Hills, 100acnon-ag @ $5000/ac $5000*100ac=$500,000 *.016 (levy rate) =$8000

7 Qualifying for Ag Status SDCL 10-6-31.3 Two of three following criteria must be met: 1.(State Requirement) Minimum of 20 acres owned Counties can require up to 160 total acres

8 Minimum Acreage Size CountyMinimum Size (ac) Butte145 Lawrence41 Pennington40 Meade73 Custer40 Fall River160 Harding160 Jackson70

9 Criteria-continued 2.33.3% of total family gross income is ag 3.Acreage is devoted to: Raising crops, timber or fruit trees Rearing, feeding, and management of farm livestock, poultry, fish, or nursery stock Production of bees and apiary products, or horticulture Horses generally not considered Ag (thought of as a tool to conduct ranch work)…like a ranch truck or border collie

10 Criteria Hobby Ag vs. Production Ag: o Principal use of the property is ag production with “Intent to produce income” o A 40 acre property with a home, garage, and 20 sheep does not meet this criteria. o A 40 acre property with a home, garage, and 200 head feedlot does.

11 Directors of Equalization: Shannon Rittberger, Pennington 505 Kansas City Street Rapid City, SD 57701 (605) 394-2175 Kirk Chaffee, Meade 1300 Sherman St., Suite 222 Sturgis, SD 57785 (605) 347-3818 Allison Jensen, Custer 420 Mt Rushmore Rd Custer, SD 57730 (605) 673-8170 Polly Odle, Butte 839 5th Ave. Belle Fourche, SD 57717 (605) 892-3950

12 Directors of Equalization Terri Halls, Fall River 906 N. River St. Hot Springs, SD 57747 (605) 745-5136 Tim Hodson, Lawrence 90 Sherman Street Deadwood, SD 57732 (605)-578-3680 Kyle Helseth, Minnehaha equalization@minnehahacounty. org 415 N. Dakota Ave. Sioux Falls, SD 57104 (605) 367-4228 Directors of Equalization:

13 May Help Qualify for Ag Status (Pennington, Fall River, Custer) Tree Farm System http://www.treefarmsystem.org 105 certified American Tree Farms in SD Must have an approved Management Plan for property Inspections every 5 years Can help prove Principal Use of acreage is Timber John Hinners, South Dakota Department of Agriculture P.O. Box 940 Huron, SD

14 Grant Opportunities for Acreage Owners Ag-related grants generally fund: o Sustainability projects (water, land, etc.) o Income-based operations o Demonstrations/feasibility studies o Outreach/Education projects o Marketing Strategies

15 Federal Grants Primary source of most grants Very competitive Specific goals or priorities you need to address

16 Federal Grants: USDA SARE o SARE “Sustainable Agriculture Research & Education” o o Four Programs: o Research & Education o Professional Development o Youth/Educator o Farmer/Rancher Grants

17 Federal Grants: USDA Rural Develop. Value-Added Producer Grants (VAPG) o Eligible: independent producers, farmer/rancher cooperatives & producer groups & businesses o Funds: o Planning grant ($100,000) o Working capital ($300,000) o Belle Fourche: Jackson Winery and Vineyards, LLC $300,000 o Rapid City: Wild Idea Buffalo Company $17,500

18 Federal Grants: USDA Rural Develop. Rural Energy for America Program (REAP) o Financial assistance to agriculture producers & rural small businesses for purchasing, installing and constructing renewable energy systems (windmills, etc.) o An agricultural producer is directly engaged in the production of agricultural products whereby 50 percent or greater of their gross income is derived from the operations.

19 Federal Grants: USDA Rural Development Rural Energy for America Program (REAP) o Grants available up to 25% of total project cost up to $500,000 o Loan Guarantees up to 75% total project cost of $2500-$25M

20 Natural Resource Conservation Service (NRCS) Various conservation programs offered Signup is continuous for many programs Limited resource farmers/ranchers, beginning farmers/ranchers, socially disadvantaged producers, and Tribes may be eligible for a higher payment rates No acreage limits for most programs; preference given to largest impact producers

21 Natural Resource Conservation Service (NRCS) 2011: 3,700 conservation plans implemented in SD; positively affecting 1.6 million acres (430 acres on average)

22 State Grants Dept. of Ag: o Specialty Crop Block Grant (SCBG) o Purpose: solely enhance the competitiveness of specialty crops (fruits, vegetables, tree nuts, dried fruits, horticulture, and nursery crops [including floriculture]).“ o Due April 2 nd 2012 o Range of awards $2100-$35,000

23 Private Industry Grant Links

24 Producer Participation Opportunities: Spring Creek Watershed Partnership o For landowners in the Upper Spring Creek Watershed (above Sheridan Lake) o Cost share opportunity to improve water resources o Belle Fourche River Watershed Partnership o funding available to convert flood irrigation to center pivots and to convert open ditches to pipelines in flood irrigation systems. o o Contact local NRCS office for more info

25 Links from this Training – Real estate tab ACRE exam Upcoming Continuing Education events Presentations posted from training – ACRE designees listed – Extension Field Staff – Livestock & Small acreage tabs

26 Links from this Training SDSU Regional Extension Center – 605-394-1722 Denise Miller, GIS Specialist NRCS - Rapid City FSO 605.343.1643 ext. 134

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