The bill amends South Dakota law regarding tax increment financing (TIF) districts, focusing on property assessment and valuation within these districts. It allows county commissioners to adopt a discretionary formula for assessing property values, but this formula cannot be applied to properties within a TIF district. The bill clarifies the types of properties eligible for tax classification, including new industrial, commercial, and affordable housing structures, and establishes specific valuation thresholds for these classifications. Additionally, it mandates an independent fiscal feasibility review for any TIF district project plan established after July 1, 2026, ensuring a thorough evaluation of financial implications.

Moreover, the bill outlines the process for creating TIF districts, requiring consent from municipal governing bodies if the district is within a municipality. It details conditions for district termination and mandates notification to the Department of Revenue. The newly introduced section to chapter 11-9 specifies the requirements for the fiscal feasibility review, which must include a comprehensive project description, estimated costs, and an analysis of projected tax increment revenue. This review is advisory and must be completed and made public at least fourteen days before the governing body considers establishing the district, enhancing transparency and accountability in TIF district management.

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
Senate Taxation Engrossed, 02/20/2026: 10-6-137, 10-12-44, 11-9-1, 11-9-4, 11-9-5, 11-9-6, 11-9-8, 11-9-10, 11-9-14, 11-9-15, 11-9-23, 11-9-32, 11-9-46
Enrolled, 03/05/2026: 10-6-137, 10-12-44, 11-9-1, 11-9-4, 11-9-5, 11-9-6, 11-9-8, 11-9-10, 11-9-14, 11-9-15, 11-9-23, 11-9-32, 11-9-46