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South DakotaHB 1245101st South Dakota Legislature (2026)HouseWALLET

authorize municipalities to establish a local funding mechanism for capital improvement projects.

Sponsored By: Jamison, Greg (Republican)

Signed by Governor

Ballot MeasuresBoards and CommissionsFundMunicipal GovernmentRetail Sales and Service TaxTaxation

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 1 costs, 0 mixed.

South Dakota towns can add project taxes

South Dakota municipalities can add a gross receipts tax of up to 1% to fund capital improvements. State gross receipts tax rules apply, except for the rate. The local ordinance must state the tax's purpose and the minimum amount to raise. A majority of the capital improvement board must approve it before the next regular or special municipal election. The election must follow state bond-election rules, and at least 60% of voters voting on the question must approve. After notice to the state revenue secretary, the ordinance remains effective through a calendar quarter ending at least 90 days later. It must end no later than the earlier cutoff: 60 months after enactment, or the applicable June 30 or December 31 in the year the minimum is collected. A municipality cannot impose this tax if it collected money from an earlier tax under this law during the past 24 months.

Local residents help review project taxes

Each municipality must appoint a five-member board to review capital improvement tax ordinances. The mayor appoints one governing body member and four local residents who are not governing body members. The governing body must approve the appointments. Members serve three-year terms starting on the next January 1 or July 1, whichever comes first. Vacancies are filled through the same appointment process for the rest of the term.

Local project tax money stays restricted

Municipalities must put all distributed project-tax money into a special capital outlay fund. Money can only buy or lease land, buildings, plant assets, or equipment, or pay for qualifying construction, repairs, or renovations. Construction, repairs, and renovations must involve property owned by the municipality alone or jointly with other South Dakota local governments. After completion, project property, plant assets, or equipment can be transferred only to a county or school district. The municipality must be located at least partly within that county or school district.

Sponsors & Cosponsors

Sponsor

  • Jamison, Greg

    Republican • House

Cosponsors

  • Reed, Tim S.

    Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 140 • No: 110

Senate vote • 3/5/2026

Do Pass Amended

Yes: 19 • No: 15

Senate vote • 3/4/2026

Do Pass

Yes: 5 • No: 2

House vote • 2/10/2026

Reconsidered

Yes: 37 • No: 29

House vote • 2/10/2026

Do Pass Amended

Yes: 36 • No: 30

House vote • 2/9/2026

Do Pass Amended

Yes: 35 • No: 30

House vote • 2/5/2026

Do Pass Amended

Yes: 8 • No: 4

Actions Timeline

  1. Signed by the Governor

    3/30/2026House

  2. Delivered to the Governor

    3/11/2026House

  3. Signed by the President

    3/10/2026Senate

  4. Signed by the Speaker

    3/9/2026House

  5. Senate Do Pass Amended, Passed, YEAS 19, NAYS 15

    3/5/2026Senate

  6. Senate Local Government Do Pass, Passed, YEAS 5, NAYS 2

    3/4/2026Senate

  7. Scheduled for hearing

    3/4/2026Senate

  8. First read in Senate and referred to Senate Local Government

    2/11/2026Senate

  9. House of Representatives Do Pass Amended, Passed, YEAS 36, NAYS 30

    2/10/2026House

  10. House of Representatives Reconsidered, Passed, YEAS 37, NAYS 29

    2/10/2026House

  11. Intent to reconsider

    2/9/2026House

  12. House of Representatives Do Pass Amended, Failed, YEAS 35, NAYS 30

    2/9/2026House

  13. House of Representatives Motion to amend, Passed

    2/9/2026House

  14. House Local Government Do Pass Amended, Passed, YEAS 8, NAYS 4

    2/5/2026House

  15. House Local Government Motion to amend, Passed

    2/5/2026House

  16. Scheduled for hearing

    2/5/2026House

  17. First read in House and referred to House Local Government

    2/2/2026House

Bill Text

  • Introduced

    1/30/2026

    PDF

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