SB 216 — limit annual valuation increases on owner-occupied single-family dwellings and provide an exception for mill rate limitations on taxing districts.

216A26.933.14 101st Legislative Session 216 South Dakota Legislature Senate Bill 216 AMENDMENT 216A FOR THE INTRODUCED BILL Introduced by:

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An Act to limit annual valuation increases on owner-occupied single-family dwellings and provide an exception for mill rate limitations on taxing districtsprovide a use for moneys deposited into the homeowner tax reduction fund.

ThatThe aLegislature NEWfinds SECTIONthat bethe addedprinciples toestablished chapterin 10-13:Nordlinger v.

TheHahn, moneys505 inU.S. the homeowner tax reduction fund, as created in Senate Bill 125, and enacted by the One Hundred First Legislature, must be used to reduce the maximum mill levies imposed on owner-occupied single-family dwellings for school district general fund and special education fund levies.

1 (1992), affirm the constitutionality of basing property tax assessments on the purchase price of property rather than current market value, for the purpose of protecting homeowners from unexpected hikes and escalating real estate values impacting the reliance interests in their homes.

This Act is intended to stabilize property taxes for homeowners of this state, while ensuring compliance with equal protection guarantees under the United States Constitution.

Section 2.

That § 10-6-105 be AMENDED:

10-6-105.

All real property subject to taxation shall must be listed and assessed annually, but the value of such the property is to be determined according to its value on the first day of November preceding the assessment, while the value of any owner- occupied single-family dwelling is subject to the value limitations provided in sections 3 and 4 of this Act.

Section 3.

That a NEW SECTION be added to chapter 10-6:

For purposes of the annual assessment required by § 10-6-105, the assessed value of an owner-occupied single-family dwelling may not increase more than three percent annually, beginning with the base amount as determined for assessment year 2026, or any subsequent base year as provided in this section, whichever is later.

When a change in ownership of an owner-occupied single-family dwelling occurs, the property must be reassessed at its fair market value, to determine the property's base Overstrikes indicate deleted language.

26.933.14 2 216 amount.

When an owner-occupied single-family dwelling is sold between a willing seller and a willing buyer, with no coercion or advantage taken by either party, the property's base amount may not exceed the sales price of the property.

For purposes of this section, "base amount" means:

(1) The fair market value of any owner-occupied single-family dwelling, on November 1, 2020, increased by no more than three percent annually for each assessment required by § 10-6-105, which was completed in 2021, 2022, 2023, 2024, and 2025;

(2) Where a change in ownership of an owner-occupied single-family dwelling has occurred between November 2, 2020, and October 31, 2026, inclusive, the fair market value of the property on the date of transfer or purchase, increased by no more than three percent annually for any assessment required by § 10-6-105, which was completed after the transfer or purchase in any year between 2021 and 2025, inclusive;

or (3) Where a change in ownership of an owner-occupied single-family dwelling occurs on November 1, 2026, or later, the fair market value of the property.

Section 4.

That a NEW SECTION be added to chapter 10-6:

The base amount of any owner-occupied single-family dwelling may be further increased above the limitations provided by section 3 of this Act, if there is a change in the use or classification of the property, or to account for any addition to, or expansion of, the property.

An addition to, or expansion of, the property may result in an increase in the assessed value above the limitations provided by section 3 of this Act, only by the difference between the real property with the addition or expansion and the real property as if no addition or expansion was made.

For purposes of this section, the increase in taxable value from improvements to an owner-occupied single-family dwelling does not include additions to, or improvements of, existing structures affixed to the land if the improvements result in an increased valuation of forty percent or less of the current valuation.

Section 5.

That a NEW SECTION be added to chapter 10-12:

Notwithstanding any other provision of law, if the limitation provided by § 10-13- 35 constitutes a mill rate for a taxing district greater than a mill rate limitation provided by law for the district, the district may impose a tax levy resulting in a mill rate greater Overstrikes indicate deleted language.

26.933.14 3 216 than the limitation set forth in law, to the extent that the revenue payable from real property taxation in the district does not exceed the amount of revenue payable from real property taxation in the 2026 tax year, increased annually by:

(1) The lesser of three percent or the index factor, as defined in § 10-13-38;

and (2) The percentage of growth in value resulting from:

(a) Improvements or changes in use of the real property within the district;

(b) Annexation or minor boundary changes of the district;

and (c) Adjustments in taxation or classification of property within the district.

Underscores indicate new language.