SB 209

 26.436.9  101st Legislative Session  209
                                       2026 South Dakota Legislature
                                                 Senate Bill 209
 Introduced by: Senator Smith
1 An Act to authorize the creation of land banks.
2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
3 Section 1. That a NEW SECTION be added to a NEW CHAPTER in title 11:
4Terms used in this chapter mean:
5     (1)     "Board," the board of directors of a land bank;
6     (2)     "District," a specific geographic area that:
7(a)     Is established by ordinance of the governing body of a political subdivision
8in which the area is located; and
9(b)     Is comprised solely of the real property held or to be held by the land bank
10created for the district;
11     (3)     "Land bank," a nonprofit corporate entity that:
12(a)     Is created by ordinance of the governing body of a political subdivision; and
13(b)     Acquires, conveys, holds, or manages real property for the purpose of
14returning abandoned, blighted, delinquent, or vacant property to productive
15use; and
16     (4)     "Political subdivision," a county, municipality, school district, or any other local
17governmental body having the power to levy taxes on real property located within
18a district.
19 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 11:
20A governing body may elect to establish a district and create a land bank for the
21     district by an ordinance that:
22     (1)     Describes the boundaries of the district;
23     (2)     Assigns a name to the land bank;
24     (3)     Sets the number of members of the board, consisting of an odd number not less
25than five and not exceeding eleven members;
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1    (4)     Appoints the initial members of the board;
2    (5)     Establishes the manner of appointment or selection, qualification, and terms of
3members; and
4    (6)     Provides authority for incorporation of the land bank.
5A land bank created pursuant to this chapter must be a duly formed nonprofit
6    corporation of this state, with permanent and perpetual duration unless terminated and
7    dissolved in accordance with the provisions of section 10 of this Act.
8 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 11:
9At the first meeting of a board, the board shall adopt bylaws for:
10    (1)     Adopting, amending, and repealing the bylaws, as necessary for conducting
11business and regulating the land bank's affairs;
12    (2)     The board's annual selection, from among its members, of a chairperson, vice
13chairperson, secretary, treasurer, and any other officer as the board may
14determine;
15    (3)     Establishing the duties of the board's officers;
16    (4)     The   appointment,   attendance,    compensation,   disqualification,       participation,
17quorum, reimbursement, removal, and voting of board members;
18    (5)     Filling vacancies on the board;
19    (6)     Reporting and record-keeping requirements; and
20    (7)     Inventorying the real property of the land bank and making the inventory available
21for public review and inspection.
22A public officer is eligible to serve as a board member, and the acceptance of the
23    appointment does not impair the public office, subject to the provisions concerning
24    conflicts of interest set forth in chapters 3-23 and 6-1.
25For purposes of this section, "public officer" means an individual who is elected to
26    an office, including the governing body of a political subdivision or an employee of a
27    political subdivision.
28 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 11:
29A land bank may:
30    (1)     Sue and be sued in its own name and plead in any civil action;
31    (2)     Employ personnel as necessary to carry out the provisions of this chapter;
32    (3)     Borrow from public or private lenders, as necessary to carry out the provisions of
33this chapter;
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1    (4)     Issue bonds pursuant to section 7 of this Act;
2    (5)     Procure insurance or guarantees from the state or federal government for the
3payment of any debt incurred by the land bank, and pay any associated premium;
4    (6)     Procure insurance against losses in connection with the assets or activities of the
5land bank;
6    (7)     Enter into contracts and other instruments necessary to carry out the provisions of
7this chapter;
8    (8)     Invest moneys, at the discretion of the board, in instruments, obligations, property,
9or securities;
10    (9)     Enter into agreements for the management of, the collection of rent from the lease
11of, or the sale of the real property of the land bank;
12    (10)    Construct, demolish, design, develop, reconstruct, rehabilitate, relocate, renovate,
13and otherwise improve the real property of the land bank;
14    (11)    Collect, receive, and retain payment for:
15(a)    Services rendered;
16(b)    Rents and lease income;
17(c)    Disposition of real and personal property;
18(d)    Proceeds of insurance coverage for losses incurred;
19(e)    Income from investments; and
20(f)    Any other asset and activity permitted to a land bank pursuant to this
21chapter and other applicable law;
22    (12)    Convey, demise, exchange, grant, hypothecate, pledge, release, sell, or transfer
23the real property of the land bank;
24    (13)    Grant or acquire an easement, lease, license, or option with respect to real property
25of the land bank;
26    (14)    Enter into a collaborative relationship, including a joint venture or partnership, with
27another political subdivision or a public or private entity for the development,
28disposition, management, or ownership of real property;
29    (15)    Address abandoned, blighted, delinquent, and vacant real property within the
30political subdivision that created the land bank by:
31(a)    Participating in foreclosures, including bulk foreclosures, tax certificate
32sales, and the tax deed process; and
33(b)    Extinguishing delinquent taxes on the property; and
34    (16)    Do all other things necessary to ensure the productive use of the real property
35within the district.
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1 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 11:
2A land bank may acquire real property by:
3    (1)     Auction;
4    (2)     Devise;
5    (3)     Donation;
6    (4)     Exchange;
7    (5)     Foreclosure;
8    (6)     Gift;
9    (7)     Purchase, including through lease-purchase agreements, contracts-for-deed, and
10other installment sales;
11    (8)     Tax sale;
12    (9)     Transfer; and
13    (10)    Any other lawful means permitted in this state.
14Except as otherwise provided, a district may be expanded only if the land bank
15    acquires additional real property located within the same political subdivision that created
16    the land bank and outside of any other district.
17The governing bodies of two or more political subdivisions may elect to establish a
18    combined district and create a single land bank by entering into an intergovernmental
19    agreement, pursuant to chapter 1-24, in addition to the requirements set forth in section
20    2 of this Act.
21 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 11:
22A land bank may not possess or exercise the power of eminent domain.
23 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 11:
24A land bank may receive moneys through grants and loans from the political
25    subdivision that created the land bank, another political subdivision, the state, the federal
26    government, or any other public or private source.
27The land bank may issue bonds to finance the acquisition and redevelopment of
28    real property, with principal and interest payable from the land bank's general revenue.
29A bond issued pursuant to this section:
30    (1)     Must be authorized by a resolution of the board that:
31(a)      Establishes the terms for the delivery, issuance, and sale of the bond;
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1(b)    Provides for the denomination, execution, form, interest, and maturity of
2the bond;
3(c)    Is published in a newspaper of general circulation within the district; and
4(d)    Sets forth whether the bond is subject to redemption and the manner of the
5redemption;
6    (2)     May be secured by a pledge of any revenues, including grants or contributions from
7the state, the federal government, any agency or instrumentality of the state or
8federal government, or by a mortgage of any real property of the land bank;
9    (3)     Is a negotiable instrument under the laws of this state;
10    (4)     Together with any income from the bond, is not subject to taxation by the state or
11a political subdivision;
12    (5)     Is a limited obligation of the land bank, with the principal and interest, costs of
13issuance, and other incidental costs payable solely from the income and revenue
14derived from the sale, lease, or other disposition of the assets of the land bank;
15    (6)     In the discretion of the land bank, may be secured by mortgage or other security
16interest on the real property or assets that generate the pledged revenue;
17    (7)     May be sold at a public or private sale for a price determined by the board to be in
18the best interest of the land bank; and
19    (8)     Must state, on its face, that:
20(a)    The land bank and its agents or officers are not liable for a bond by reason
21of the issuance thereof; and
22(b)    The bond is not a debt of the state or any political subdivision of the state.
23 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 11:
24The real property of a land bank and the land bank's income and operations are
25    exempt from all taxation by the state and any political subdivision of the state.
26 Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 11:
27All real property of a land bank must be held in the name of the land bank.
28The board shall determine the consideration to be received by the land bank for
29    the transfer of real property, which may take the form of moneys and secured financial
30    obligations, covenants and conditions related to the present and future use of the
31    property, contractual commitments of the transferee, and any other form of consideration
32    as determined by the board to be in the best interest of the political subdivision that
33    created the land bank.
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1An ordinance creating a land bank pursuant to section 2 of this Act or an
2    intergovernmental agreement, in the case of multiple districts with a single land bank,
3    may:
4    (1)     Establish a hierarchical ranking of priorities for the use of real property conveyed
5by the land bank for:
6(a)    Public spaces;
7(b)    Affordable housing;
8(c)    Commercial, industrial, and retail activities; and
9(d)    Wildlife conservation areas; and
10    (2)     Require that any disposition of real property located within a specified jurisdiction
11be subject to voting and approval requirements of the board.
12Except as otherwise provided, the board may delegate, to any agent or officer of
13    the land bank or any other person as determined appropriate by the board, the authority
14    to enter into and execute agreements, instruments of conveyance, and all other related
15    documents pertaining to the conveyance of real property by the land bank.
16 Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 11:
17A land bank is dissolved sixty calendar days after a resolution for dissolution is
18    approved by two-thirds of the membership of the board.
19The board shall provide sixty calendar days' advance written notice of consideration
20    of a resolution of dissolution:
21    (1)     To any political subdivision in which the district is located;
22    (2)     By publication of the notice in a local newspaper of general circulation in any
23political subdivision in which the district is located; and
24    (3)     By certified mail to the trustee of any outstanding bonds of the land bank.
25Upon dissolution of the land bank, all real property, personal property, and other
26    assets of the land bank must become the assets of the political subdivision that created
27    the land bank.
28If two or more political subdivisions combine districts with a single land bank
29    pursuant to section 5 of this Act, the withdrawal of one or more political subdivisions does
30    not result in the dissolution of the land bank, unless the intergovernmental agreement
31    provides otherwise and no remaining political subdivision elects to continue the existence
32    of the land bank.
33 Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 11:
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1A land bank has standing to file an action, pursuant to chapter 21-41 or 21-42, as
2    applicable, to quiet title to any real property in which the land bank has an interest.
3Prior to filing the action, the board must conduct an examination of title to
4    determine the identity of any person possessing a claim to or interest in the real property.
5 Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 11:
6In the event of a natural disaster that causes widespread damage to or destruction
7    of real property and improvements, and dislocation of residents, the Governor may,
8    following issuance of a declaration of emergency, establish an emergency district and
9    create a temporary land bank in accordance with the provisions of this section.
10Following consultation with the governing body of each political subdivision
11    containing all or a portion of the geographic area that is subject to the declaration of
12    emergency, the Governor may issue an executive order that:
13    (1)     Provides for the immediate establishment of an emergency district comprising the
14affected geographic area of any political subdivision; and
15    (2)     Contains the provisions required to be set forth in an ordinance for creation of a
16land bank pursuant to section 2 of this Act.
17Except as otherwise provided, a temporary land bank created pursuant to this
18    section has all powers of a land bank created pursuant to section 2 of this Act.
19A governing body may convert a temporary land bank into a land bank, as though
20    created pursuant to section 2 of this Act, by ordinance, provided that the district
21    established in the ordinance comprises only the affected geographic area within the
22    political subdivision controlled by the governing body.
23An intergovernmental agreement, pursuant to chapter 1-24, is also required if the
24    emergency district for which the temporary land bank was created comprises a geographic
25    area located in more than one political subdivision and the governing bodies of those
26    political subdivisions elect to convert the emergency district into a combined district
27    pursuant to section 5 of this Act.
28If a temporary land bank is not converted within twelve months of the Governor’s
29    executive order, the temporary land bank must be dissolved as set forth in section 10 of
30    this Act.
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