This bill authorizes municipalities in South Dakota to impose a gross receipts tax to fund capital improvement projects. The tax rate cannot exceed one percent on the gross receipts of taxable sales and services within the municipality. To implement this tax, the governing body must specify its purpose and the minimum amount to be generated, and the proposal must be approved by at least sixty percent of voters during an annual election. The funds collected from this tax will be deposited into a special capital outlay fund, which can only be used for specific purposes such as acquiring property or constructing and renovating municipal facilities.

Additionally, the bill establishes a capital improvement board within each municipality to oversee the approval of tax ordinances. This board will consist of five members, including one member from the governing body and four residents of the municipality. The terms for board members will last three years, with provisions for filling vacancies. The bill also stipulates that a municipality cannot impose this tax if it has collected funds from it in the past twenty-four months, and it sets a time limit for the tax's effectiveness, which is either sixty months or until the specified amount is collected, whichever comes first.