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26.232.18 101st Legislative Session 1204
2026 South Dakota Legislature
House Bill 1204
Introduced by: Representative Uhre‑Balk
Underscores indicate new language.
Overstrikes indicate deleted language.
An Act to create the South Dakota school construction fund, provide for the transfer 1
of moneys to the fund, and make an appropriation therefor. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3
Section 1. That a NEW SECTION be added to chapter 13-24: 4
There is created the South Dakota school construction loan fund, to be 5
administered by the Department of Education, for the purpose of making loans to school 6
districts to construct or expand a school building, as provided in section 2 of this Act. 7
Any interest earned on moneys in the fund must remain in the fund. Any repayment 8
of the principal amount of a loan must be deposited into the fund and used for making 9
new loans. Money in the fund designated for loans is continuously appropriated for the 10
purposes provided in section 2 of this Act. 11
The secretary of the department shall approve vouchers, and the state auditor shall 12
draw warrants to pay expenditures authorized from this fund. 13
Section 2. That a NEW SECTION be added to chapter 13-24: 14
The Department of Education may make loans from the South Dakota school 15
construction fund, created in section 1 of this Act, to a school district for the purpose of 16
constructing or expanding a school building. The amount of the loan may not exceed forty 17
percent of the total cost of the construction or expansion project. The department may 18
use up to one percent of the principal amount of a loan to offset the department's expenses 19
in administering the loan. 20
Any loan made by the department must be provided to the district at an interest 21
rate of zero percent. The terms of the loan may not require collateral from the district. 22
The terms of the loan must require that the payments be based on a straight and 23
level amortization of twenty years and be made annually over a term of twenty years, 24
with the first payment due one year from the date of the funding of the loan. 25
26.232.18 2 1204
Underscores indicate new language.
Overstrikes indicate deleted language.
The department shall make available moneys from the South Dakota school 1
construction fund, created in section 1 of this Act, as follows: 2
(1) Thirty percent for the construction or expansion of a school building in a school 3
district that has four thousand or more students; and 4
(2) Seventy percent for the construction or expansion of a school building in all other 5
school districts. 6
For purposes of this section, a "school building" is a structure that houses the 7
academic instruction, extracurricular activities, and other functions of a kindergarten 8
through twelfth grade educational program. 9
Section 3. That a NEW SECTION be added to chapter 13-24: 10
A school district is not eligible for a loan under section 2 of this Act if: 11
(1) The school district is eligible for a loan under § 11-15-8; 12
(2) The municipality in which the district is headquartered is less than ten miles from 13
a municipality in which another school district is headquartered; or 14
(3) The school district has a fall enrollment of fewer than two hundred students and is 15
not designated as a sparse school district, as defined in § 13-13-78. 16
Section 4. That a NEW SECTION be added to chapter 13-24: 17
The School Finance Accountability Board within the Department of Education shall 18
promulgate rules, pursuant to chapter 1-26, specifying: 19
(1) The process by which: 20
(a) A school district applies for a loan; 21
(b) The department reviews, assesses, and approves a school district's 22
application; and 23
(c) The department disburses a loan to a school district; and 24
(2) The information a school district must provide when applying for a loan pursuant 25
to section 2 of this Act, including: 26
(a) The amount of money currently in the district's capital outlay fund; 27
(b) The amount of money the district has transferred and the number of 28
transfers the district has made from the capital outlay fund, pursuant to 29
§ 13-16-6 during the previous ten years; 30
(c) The district's current levy for the capital outlay fund; 31
(d) The district's fall enrollment for the current fiscal year; and 32
(e) The enrollment trends of the district during the previous ten years; and 33
26.232.18 3 1204
Underscores indicate new language.
Overstrikes indicate deleted language.
(3) The criteria by which the department assesses a school district's application for a 1
loan in accordance with section 2 of this Act, including: 2
(a) The minimum amount of money, in proportion to the district's fall 3
enrollment, that must currently be in a district's capital outlay fund; 4
(b) The maximum amount of money a district may have transferred from the 5
capital outlay fund, pursuant to § 13-16-6 during the previous ten years; 6
(c) The maximum levy a district may currently have set for the district's capital 7
outlay fund; and 8
(d) The minimum increase necessary in the district's capital outlay levy to be 9
sufficient for the district to repay the loan. 10
Section 5. That a NEW SECTION be added to chapter 13-24: 11
On or before August first of each year, the Department of Education shall submit 12
a report to the special committee, created in § 4-8A-2, detailing the number, amounts, 13
and recipients of loans provided by the South Dakota school construction fund created in 14
section 1 of this Act, and other relevant information pertaining to the fund or program, as 15
requested by the committee. 16
Section 6. The state treasurer shall transfer $1 from the general fund to the South Dakota 17
school construction fund created in section 1 of this Act. The amount transferred in this section 18
is appropriated to the Department of Education for the purpose described in section 2 of this 19
Act. 20
Section 7. This Act is effective beginning June 30, 2026. 21