Housing

This bill proposes a constitutional amendment that would prohibit South Dakota governments from using eminent domain to transfer private property to private companies or non-governmental entities solely for economic development or increased tax revenue. It would require any property transfer to serve a clear public purpose, such as infrastructure or public services, rather than benefiting private interests. The amendment would apply to all state and local government actions involving property takings and must be approved by voters at the next general election. If adopted, it would change how governments can acquire property for development projects.

HB 1289 modifies South Dakota's rules for creating tax increment financing (TIF) districts, which local governments use to fund development projects by capturing future tax growth in designated areas. The bill changes the requirement that a district's assessed value plus existing TIF districts cannot exceed 10.5% (previously 50%) of a political subdivision's total taxable property value. It also revises the criteria for designating a TIF district, requiring that either 25% of the district's area be blighted or 50% must stimulate economic development, and adds new consent rules: counties need municipal approval to create a TIF within city limits, and cities need county approval for TIFs spanning county areas. These changes directly affect counties and municipalities seeking to establish TIF districts for economic development projects.

HB 1186 requires South Dakota municipalities to obtain written approval from county commissioners before creating a tax increment financing district. This directly affects municipalities seeking to establish such districts and the counties where those districts would be located. The key provision mandates that county boards of commissioners must approve the district's creation through a formal resolution, either for the entire county or the portion within the county. The bill changes the process by adding county consent as a mandatory step, ensuring local county input before municipal tax district development begins.