South Dakota Constitution Article 13 - Public Indebtedness.
South Dakota Constitution – Article XIII: Public Indebtedness
Article XIII of the South Dakota Constitution governs the incurring of public debt by the state and its political subdivisions. Here's a structured summary of its key provisions:
🔑 Purpose
To establish limits and procedures for how the State of South Dakota and its local governments (e.g., counties, cities, school districts) may borrow money or incur debt.
📜 Main Provisions
Section 1 – State Debt Limit
The state cannot contract debt exceeding $100,000, except:
To repel invasion
Suppress insurrection
Defend the state in war
This establishes a strict limit on regular borrowing to maintain fiscal discipline.
Section 2 – Creation of Debt by Law
Any law creating state debt (beyond emergencies listed in Section 1) must:
Specify the purpose of the debt
Create a tax sufficient to pay interest and retire the principal within 20 years
Be submitted to voters at a general election and approved by a majority.
Section 3 – Local Government Debt Limit
Local governments cannot incur debt over 5% of the assessed value of taxable property within the jurisdiction.
Exceptions:
For building and equipping public schools
If approved by a 60% majority vote of qualified voters
Section 4 – Sinking Fund Requirement
When debt is created, a sinking fund must be established to:
Ensure future payment of principal and interest
Provide long-term financial planning
Section 5 – State Bonding
The legislature may authorize the state to issue bonds for:
Refinancing existing debt
Specific capital improvements
Subject to voter approval, unless tied to emergency powers
Section 6 – Veterans’ Bonus Bonds
Permits the issuance of bonds to pay bonuses to military veterans (e.g., WWII veterans), approved via constitutional amendment.
Section 7 and Beyond – Specific Authorizations
Additional sections added by amendments (e.g., for building infrastructure, energy projects, or water development) authorize the issuance of bonds for specific purposes, subject to voter approval and repayment mechanisms.
✅ Key Principles
Fiscal restraint through debt limits
Voter oversight for large or long-term obligations
Protection of creditworthiness and taxpayer interests
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