Rep. Aaron Aylward, R-Harrisburg, speaks in the South Dakota House of Representatives on Feb. 12, 2026. Aylward was the prime sponsor of a bill that would’ve made it easier to refer decisions by local governments to voters. An amended version of the bill had the support of Gov. Larry Rhoden, but the House voted to defeat it. (Makenzie Huber/South Dakota Searchlight)
The South Dakota House of Representatives said no to another of the five bills in a property tax reduction package announced last week by Gov. Larry Rhoden and legislative leaders.
House Bill 1323 would have made it easier for citizens to refer local government decisions that could increase property taxes to a public vote. Its 40-27 defeat in the House on Tuesday came one day after the state Senate defeated another bill in the package, House Bill 1253. That one sought to limit growth in the home valuations that drive property taxes to 5% a year with a reset to market values every five years. The Senate nixed it 24-9 Monday afternoon.
More legislative news
See all of Searchlight’s coverage of the 2026 legislative session.
Lawmakers have two more days in the regular legislative session to decide on two of the three remaining bills in the compromise property tax package, endorsed by both Rhoden and Republican Speaker of the House Jon Hansen. Hansen and Rhoden are running for the GOP nomination for governor in the June 3 primary, as are U.S. Rep. Dusty Johnson and Aberdeen businessman Toby Doeden.
Senate Bill 245 passed the House 42-27 on Monday. That bill, which awaits a vote in the Senate, would put the extra money collected after next year’s scheduled 4.2% to 4.5% sales tax increase into a property tax relief fund for homeowners and seed the fund with a one-time infusion of nearly $56 million.
House Bill 1051, which would lower the maximum property tax levies for school districts, awaits a hearing in the Joint Appropriations Committee.
Senate Bill 96, which would let county governments impose a half-percent sales tax and use the money for homeowner property tax credits, has passed both chambers and awaits Rhoden’s signature. That bill was proposed by the governor.
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