This bill authorizes municipalities in South Dakota to establish a local funding mechanism specifically for capital improvement projects. It mandates the appointment of a capital improvement board, consisting of five members—one from the governing body and four residents—who will approve or reject ordinances related to the funding mechanism. The bill also stipulates that the term for each board member is three years, with provisions for filling vacancies. Additionally, municipalities are allowed to impose a gross receipts tax, not exceeding one percent, on taxable sales to generate funds for these projects, provided that the tax is approved by at least sixty percent of voters in a municipal election.

The bill outlines the process for imposing the tax, requiring the governing body to specify the purpose and minimum amount to be generated, and to submit the ordinance to the capital improvement board for approval. Funds collected from this tax must be deposited into a special capital outlay fund, which can only be used for specific purposes such as acquiring property or constructing municipal facilities. The ordinance and tax rate will remain effective for a maximum of sixty months or until the municipality collects the specified minimum amount, whichever comes first. Furthermore, municipalities are prohibited from imposing this tax if they have collected funds from it in the past twenty-four months.