The bill amends existing laws regarding the creation and management of tax increment financing (TIF) districts in South Dakota. Key changes include the introduction of new definitions such as "financing plan," which outlines the methods and revenue sources for project costs, and "governing body," which specifies the entities responsible for TIF district creation. The bill also modifies the requirements for establishing a TIF district, reducing the maximum assessed value of taxable property allowed from ten percent to five percent of the total assessed value in the political subdivision. Additionally, it mandates that if the tax increment base of a proposed district exceeds one-half percent of the total assessed value, a special election must be held to determine the establishment of the district.

Further amendments include the requirement for a cost-benefit analysis by an independent accountant or economist before a project plan is submitted, ensuring that the social or economic benefits of the project outweigh its costs. The bill also clarifies that no county may create a district within a municipality without the municipality's consent, and vice versa. Other changes involve adjustments to the definitions of "blighted area" and "project costs," as well as stipulations regarding the termination of a district and the conditions under which project costs can be funded. Overall, the bill aims to enhance the transparency and accountability of TIF districts while ensuring that local governments have a say in their establishment.

Statutes affected:
Introduced, 02/04/2026: 11-9-1, 11-9-5, 11-9-8, 11-9-10, 11-9-14, 11-9-15, 11-9-20, 11-9-23, 11-9-32, 11-9-46