House Bill 1109 could change some taxes for business improvement districts.
These districts are areas businesses pay an additional local tax to fund projects like convention centers or developments within district boundaries.
Rep. Becky Drury is a sponsor of the bill. The Rapid City Republican said the proposal would give communities the option to raise taxes.
“For 17 years these lodging facilities have been capped at two dollars (tax) per room," Drury said. "This is permissive language, it allows them to go up to four dollars or four percent – whichever the local entities decide to do. So, it’s not something we’re really setting, and we still have a cap.”
Speaking in support of the bill, Republican Rep. Greg Jamison of Sioux Falls said South Dakota needs to keep up with neighboring states.
“The competitive nature of getting some of these conventions to come to our community, and to others, the costs involved have raised tremendously, so subsidies and other investments need to be made to lure these events into our communities," Jamison said. "Not every bid district will go to the four percent because there’s still a competitiveness about it.”
Critics raised concerns over transparency and tax burdens. Voting no was Democratic Rep. Peri Pourier of Rapid City.
“The other part of this is the transparency and accountability that brings hesitation to me. I can’t find any minutes," Pourier said. "I had an intern say, ‘let’s look at all the bids, let’s look at the minutes, let’s see what they’re doing.’ There was 13 improvement districts that were researched, and eight of them had no agenda or minutes posted.”
Ultimately, HB 1109 passed the House 45-23 with two members excused. It will next need to pass in the Senate before it can be signed into law.