The bill establishes the South Dakota school construction loan fund, which will be managed by the Department of Education. This fund is intended to provide loans to school districts for the construction or expansion of school buildings, with loans capped at 40% of the total project cost and offered at a zero percent interest rate. The bill outlines that any interest earned and repayments will remain in the fund for future loans, and it specifies the loan repayment terms, which will be structured over a 20-year period. Additionally, the bill allocates 30% of the fund for districts with 4,000 or more students and 70% for smaller districts.

Eligibility criteria for loans are also defined, excluding districts that qualify for other loans, are located near other districts, or have fewer than 200 students unless designated as sparse. The School Finance Accountability Board is tasked with creating rules for the loan application process, including the necessary information districts must provide. Furthermore, the Department of Education is required to report annually on the loans issued from the fund. The bill includes a nominal appropriation of $1 from the general fund to kickstart the school construction fund, with the act set to take effect on June 30, 2026.