PIERRE, S.D. (SDBA) — Left for dead after its first vote, Senate Bill 216 sprang back to life Monday, passing the South Dakota House 53-16 and giving property owners their only hope for tax relief this session.
The bill, backed by Gov. Larry Rhoden, passed with one member excused after lawmakers reconsidered their initial rejection. The legislation returns to the Senate for consideration of House amendments.
SB 216 aims to reduce growth in property tax assessments on owner-occupied homes by capping total assessed value increases at 3 percent annually for tax years 2027 through 2031.
“I think you need to at least look at section 1 which sets a limit of 3% annual growth on each county’s total assessment for owner-occupied,” said Rep. Leslie Heinemann, R-Flandreau. “I visited with my assessor at length at last Friday, and they could implement this, but this would be a way to restrict growth.”
The legislation also limits property tax revenue increases for taxing districts to 3 percent during the same period and significantly changes the property tax assessment freeze program for elderly and disabled residents.
“The other thing I think you don’t want to overlook is sections 4 & 5, and that’s increasing the eligibility for the existing property tax freeze program,” added Heinemann. “Most of the people there’s 33,000 people that are eligible for it now based on this income restriction and this would open up another 11,000 people to be eligible for that.”
The property tax freeze program changes increase income thresholds from $35,000 to $55,000 for single-member households and from $45,000 to $65,000 for multiple-member households. The bill also raises the maximum home value eligible for the program from $350,000 to $500,000.
Rep. Liz May, R-Kyle, criticized the limited scope of the legislation.
“Rifle shot? Rifle shot for who?” asked May. “So, for all our constituents listening out there, yeah, we’re gonna give you a bill. Does it do anything? No, not really. It’s a rifle shot. We’re gonna study it again this summer.”
Rep. Greg Jamison, R-Sioux Falls, who initially opposed the measure, acknowledged that improvements were made through compromise.
“This amendment addition does lighten the load of the blunt that these growing communities and counties will receive with this bill, and that was that was appreciated by the governor and his staff to make an adjustment,” said Jamison.
Rep. Heinemann characterized the bill as a beginning step toward addressing property tax concerns.
“It is a shot over the bow. It’s to say we, including the counties, the cities, the schools, need to reduce their spending. That’s clear to me,” Heinemann explained.
The Senate must now decide whether to concur with House amendments or request a conference committee to resolve differences between the versions passed by each chamber.
Earlier in the afternoon, the House killed two other property tax reduction measures, SB 169 and SB 191.
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