25.902.13 100th Legislative Session 216
2025 South Dakota Legislature
Senate Bill 216
ENROLLED
AN ACT
ENTITLED An Act to reduce the growth in the assessed value of owner -occupied
property, limit increases in certain property tax revenues, revise provisions
regarding school district excess tax levies, and revise eligibility requirements
for a property tax assessment freeze.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That a NEW SECTION be added to chapter 10-6:
For taxes payable in 2027, 2028, 2029, 2030, and 2031, the total assessed value
of all property in a county with an owner-occupied single-family dwelling classification, as
defined in § 10-13-39, may not increase more than three percent over the total assessed
value of all property in the county with an owner -occupied single-family dwelling
classification in the prior year, except as otherwise provided in this section.
A county may further increase the total assessed value of all property with an
owner-occupied single-family dwelling classification by an amount equal to the assessed
value of all new improvements made to owner -occupied single-family dwellings or
property reclassified to the owner-occupied single-family dwelling classification in the
county in the prior year.
Notwithstanding the provisions of this section, a county must adjust the total
assessed value of all property with an owner-occupied single-family dwelling classification
pursuant to § 10-6-121.
Section 2. That § 10-13-35 be AMENDED:
10-13-35. This section does not apply to school districts. The total amount of
revenue payable from taxes on real property within a taxing district, excluding the levy
pursuant to § 10-13-36, may increase no more than the lesser of three percent or the
index factor, as defined in § 10-13-38, over the amount of revenue payable from taxes 25.902.13 2 216
SB216 ENROLLED
on real property in the preceding year, excluding the amount of taxes levied pursuant to
§ 10-13-36.
After applying the index factor, a taxing district may increase the revenue payable
from taxes on real property above the limitations provided by this section by the
percentage increase of value resulting from any improvements or change in use of real
property, annexation, minor boundary changes, and any adjustments in taxation of
property separately classified and subject to statutory adjustments and reductions under
chapters 10-4, 10-6, 10-6A, and 10-6B, except § 10-6-113, only if assessed the same as
property of equal value. For taxes payable in 2027, 2028, 2029, 2030, and 2031, an
increase in revenue payable to a taxing district allowed under this paragraph may not
exceed three percent.
A taxing district may increase the revenue it receives from taxes on real property
above the limit provided by this section for taxes levied to pay the principal, interest, and
redemption charges on any bonds which are subject to referendum, scheduled paym ent
increases on bonds, for a levy directed by the order of a court for the purpose of paying a
judgment against the taxing district, upon the termination of a tax increment financing
district pursuant to § 11-9-46, or upon the application of any discretionary formula to real
property pursuant to § 10-6-137. Any taxing district created after the effective date of
this section is exempt from the limitation provided by this section for a period of two years
immediately following its creation.
For purposes of this section, an increase in value resulting from an improvement
made to an owner -occupied single-family dwelling does not include additions to, or
improvements of, existing structures affixed to land that result in an increase in value of
forty percent or less to the owner-occupied single-family dwelling.
Section 3. That § 13-16-7 be AMENDED:
13-16-7. The school board of any school district of this state may at the board's
discretion authorize an annual levy of a tax not to exceed three dollars per thousand
dollars of taxable valuation on the taxable valuation of the district for the capital outlay
fund for assets as defined by § 13-16-6 or for the district's obligations under a resolution,
lease-purchase agreement, capital outlay certificate, or other arrangement with the Health
and Educational Facilities Authority. Taxes collected pursuant to the levy may be
irrevocably pledged by the school board to the payment of principal of and interest on
installment purchase contracts or capital outlay certificates entered into or issued pursuant
to § 13-16-6 or 13-16-6.2 or lease-purchase agreements or other arrangement with the 25.902.13 3 216
SB216 ENROLLED
Health and Educational Facilities Authority and, so long as any capital outlay certificates
are outstanding, installment agreement payments, lease-purchase agreements, or other
arrangements are unpaid, the school board of any district may be compelled by mandamus
or other appropriate remedy to levy an annual tax sufficient to pay principal and interest
thereon, but not to exceed the three dollars per thousand dollars of taxable valuation in
any year authorized to be levied hereby.
The total amount of revenue payable from the levy provided in this section may
not increase annually by more than the lesser of three percent or the index factor, as
defined in § 10-13-38, over the maximum amount of revenue that could have been
generated from the taxes payable in 2016. Starting with taxes payable in 2021, the total
amount of revenue payable from the levy provided in this section may not increase
annually by more than three percent over the amount of revenue that could have been
raised in the prior year.
After applying three percent, a school district may increase the revenue payable
from taxes on real property above the limitations provided by this section by the
percentage increase of value resulting from any improvements or change in use of real
property, annexation, minor boundary changes, and any adjustments in taxation of real
property separately classified and subject to statutory adjustments and reductions under
chapters 10-4, 10-6, 10-6A, and 10-6B, except § 10-6-113, only if assessed the same as
property of equal value. For taxes payable in 2027, 2028, 2029, 2030, and 2031, an
increase in revenue payable to a school district allowed under this paragraph may not
exceed three percent.
A school district may increase the revenue the district receives from taxes on real
property above the limit provided by this section for taxes levied to pay the principal,
interest, and redemption charges on any bonds issued after January 1, 2009, which a re
subject to referendum, scheduled payment increases on bonds, for a levy directed by the
order of a court for the purpose of paying a judgment against the school district, upon the
termination of a tax increment financing district pursuant to § 11-9-46, or upon the
application of any discretionary formula to real property pursuant to § 10-6-137. Any
school district created or reorganized after January 1, 2016, is exempt from the limitation
provided by this section for a period of two years immediately following the district's
creation.
In no year may the annual tax levy provided in this section exceed three dollars
per thousand dollars of taxable valuation of the school district for the current year. 25.902.13 4 216
SB216 ENROLLED
For purposes of this section, an increase in value resulting from an improvement
made to an owner -occupied single-family dwelling does not include additions to, or
improvements of, existing structures affixed to land that result in an increase in value of
forty percent or less to the owner-occupied single-family dwelling.
Section 4. That § 10-6A-2 be AMENDED:
10-6A-2. Any person making an application under the provisions of this chapter is
entitled to a real property tax assessment freeze upon the person's single-family dwelling
if the person:
(1) Has a household income of less than fifty-five thousand dollars if the household is
a single-member household or the person has a household income of less than
sixty-five thousand dollars if the household is a multiple-member household;
(2) Has been an owner of an owner-occupied single-family dwelling and a resident of
South Dakota for at least five years, unless the person has received the assessment
freeze in the previous year;
(3) Has resided for at least two hundred days of the previous calendar year in the
single-family dwelling; and
(4) Has established a base year.
The surviving spouse of a person who has previously qualified is entitled to the real
property tax assessment freeze if the surviving spouse meets the other conditions of this
chapter.
Beginning on January 1, 2026, the household income listed in subdivision (1) of
this section must increase annually by the index factor. The index factor is the annual
percentage change in the consumer price index for urban wage earners and clerical
workers as computed by the Bureau of Labor Statistics of the United States Department
of Labor for the year before the year immediately preceding the year of adjustment or the
annual percentage change in federal social security payments for the preceding year,
whichever is greater.
Section 5. That § 10-6A-3 be AMENDED:
10-6A-3. This chapter does not apply to a single-family dwelling with a full and
true market value of five hundred thousand dollars or more unless the applicant has
received the freeze on assessments in a preceding year on the single -family dwelling.
Beginning on January 1, 2026, the eligibility qualification value of the single-family
dwelling provided in this section shall be annually increased by an index factor. The index 25.902.13 5 216
SB216 ENROLLED
factor is the annual percentage change in the consumer price index for urban wage earners
and clerical workers as computed by the Bureau of Labor Statistics of the United States
Department of Labor for the year before the year immediately preceding the yea r of
adjustment or the annual percentage change in federal social security payments for the
preceding year, whichever is greater.
Section 6. That § 10-12-43.1 be AMENDED:
10-12-43.1. A school district may raise additional revenues for capital outlay fund
purposes through the imposition of an excess tax levy. A school district seeking to impose
an excess tax levy pursuant to this section is subject to the same opt out procedures and
requirements as provided in § 10-12-43. The opt out decision may be referred to a vote
of the people in the same manner as provided in § 10-12-43.
A school district imposing an excess tax levy pursuant to this section shall exclude
any additional revenue generated by the excess tax levy from the total tax revenues
deposited in the capital outlay fund when calculating the maximum allowable transfer to
the school district's general fund authorized under § 13-16-6. Any additional revenue
generated by the excess tax levy may only be used for capital outlay fund purposes
pursuant to § 13-16-6.
In no year may the annual tax levy for capital outlay fund purposes exceed the
levy authorized under § 13-16-7. 25.902.13 6 216
SB216 ENROLLED
An Act to reduce the growth in the assessed value of owner-occupied property, limit increases
in certain property tax revenues, revise provisions regarding school district excess tax levies,
and revise eligibility requirements for a property tax assessment freeze.
I certify that the attached Act originated in
the:
Senate as Bill No. 216
Secretary of the Senate
President of the Senate
Attest:
Secretary of the Senate
Speaker of the House
Attest:
Chief Clerk
Senate Bill No. 216
File No. ____
Chapter No. ______
Received at this Executive Office
this _____ day of _____________,
2025 at ____________M.
By
for the Governor
The attached Act is hereby
approved this ________ day of
______________, A.D., 2025
Governor
STATE OF SOUTH DAKOTA ,
ss.
Office of the Secretary of State
Filed ____________, 2025
at _________ o'clock __M.
Secretary of State
By
Asst. Secretary of State