Modify the blight requirements for purposes of creating a tax increment financing district.
Summary
SB 192 revises South Dakota’s tax increment financing (TIF) laws by changing the blight threshold used to create a TIF district. Under current law, at least 25% of the area in a proposed district must be blighted; the bill would raise that requirement to 50% of the district area, while also preserving the alternative finding that the district will stimulate and develop the state’s economic welfare through industrial, commercial, manufacturing, agricultural, or natural resources development. The bill also keeps the requirement that the improvement is likely to significantly enhance the value of substantially all other real property in the district.
The bill further updates the statutory definition of “blighted area” by making mostly technical and clarifying edits, such as changing “insanitary” to “unsanitary,” adjusting wording around tax delinquency, and refining descriptions of deteriorated land, structures, and other conditions that can qualify an area as blighted. It also retains the rule that counties may not create a district located in whole or in part within a municipality unless the municipality consents by resolution.
Impact
If enacted, SB 192 would make it harder to establish a TIF district based on blight by increasing the minimum blighted-area percentage from 25% to 50% of the district area. That change would likely narrow the set of projects eligible for TIF creation under the blight standard and could affect counties, municipalities, developers, and property owners involved in redevelopment projects. The bill amends South Dakota Codified Laws §§ 11-9-8 and 11-9-10, which govern findings required for TIF district creation and define what qualifies as a blighted area.
Sentiment
The available voting history suggests limited support or at least limited debate at the recorded stage, with the bill being tabled on a 4-0 vote. No committee transcript is available, so there is no recorded floor or committee discussion to indicate broader support or opposition. Based on the text alone, the bill appears to be a targeted policy change focused on tightening TIF eligibility rather than a broad overhaul of redevelopment law.
Contention
The main point of contention is likely the higher blight threshold for TIF districts. Supporters may view the change as a way to ensure TIF is used only in areas with more substantial blight and to prevent overuse of tax incentives, while opponents may argue it would make redevelopment financing harder to use and could limit local economic development tools. A secondary issue is the balance of authority between counties and municipalities, since the bill preserves municipal consent for county-created districts within municipal boundaries.
Reduce a limit on the annual increases of property tax revenues payable to certain taxing districts, and to subject school districts to a limit on property taxes collected in a year.
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.