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—tasked with approving or rejecting ordinances related to the imposition of a gross receipts tax. The bill allows municipalities to impose this tax, with a maximum rate of one percent, to fund capital improvements, provided that the governing body specifies the tax's purpose and minimum revenue in the ordinance. The ordinance must be approved by the capital improvement board and subsequently submitted to voters, requiring at least sixty percent approval for the tax to be enacted.

Additionally, the bill outlines the administration of the tax and stipulates that all funds collected must 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. The ordinance remains effective until certain conditions are met, including a maximum duration of sixty months or until the municipality collects the specified minimum amount. Importantly, municipalities are prohibited from imposing this tax if they have collected funds from it in the previous twenty-four months.