S.D. Codified Laws § 49-39-4
A resolution or agreement pursuant to § 49-39-2 may further provide for the refunding of any revenue debentures, notes, warrants, bonds or other evidences of indebtedness through the issuance of other revenue debentures, notes, warrants, bonds or other evidences of indebtedness. The resolution may provide that holders are entitled to rights and priorities similar in all respects to those held by the revenue debentures, notes, warrants, bonds or other evidences of indebtedness that are refunded, and for the issuance of the refunding revenue debentures, notes, warrants, bonds or other evidences of indebtedness, either in exchange for revenue debentures, notes, warrants, bonds or other evidences of indebtedness then outstanding, or the sale thereof. The proceeds may be applied, in addition to any other authorized purposes, to the purchase, redemption or payment of the revenue debentures, notes, warrants, bonds or other evidences of indebtedness, then outstanding. Pending application of the proceeds of any refunding revenue debentures, notes, warrants, bonds or other evidences of indebtedness being refunded, if so provided or permitted in the resolution or agreement providing for the issuance of the refunding revenue debentures, notes, warrants, bonds or other evidences of indebtedness, to the payment of any interest on the refunding revenue debentures, notes, warrants, bonds or other evidences of indebtedness and any expenses in connection with the refunding, the proceeds may be invested in direct obligations of, or obligations the principal and interest of which are unconditionally guaranteed by the United States, or such other obligations as shall be provided or permitted by the resolution or agreement providing for the issuance of the revenue debentures, notes, warrants, bonds or other evidence of indebtedness being refunded, and which mature or are subject to redemption by the holders thereof at the option of the holders not later than the respective dates when the proceeds, together with the interest occurring thereof, will be required for the purposes intended.
SDCL 49-39-4