South Dakota Lawmakers Advance Bills to Tighten Controls on Economic Development Board and Fund

Proposed legislation aims to address conflict-of-interest concerns and increase transparency around state economic development initiatives.

Feb. 23, 2026 at 4:07pm

Got story updates? Submit your updates here. ›

The South Dakota legislature is considering two bills that would impose stricter regulations on the state's economic development board and the governor-controlled Future Fund. One bill would prohibit board members from serving on the boards of companies that receive state funding, while the other would clarify the allowable uses of the Future Fund and require more detailed reporting on how the money is spent.

Why it matters

These proposed reforms come in response to recent controversies surrounding the state's economic development efforts, including allegations of potential conflicts of interest and questions about the use of the Future Fund for non-economic development purposes. The bills aim to shore up public trust and ensure greater accountability in how South Dakota allocates resources for business growth and attraction.

The details

The bill dealing with the Board of Economic Development would prohibit board members from serving on the boards of companies that receive state funding or having an ownership stake in such companies. Supporters say this would prevent self-dealing and the appearance of impropriety, while opponents argue it could make it difficult to recruit qualified board members. The Future Fund bill would clarify the allowable uses of the fund, limiting it to grants for industry research, workforce development, business recruitment and retention, and infrastructure projects. It would also require more detailed reporting and reimbursement procedures for large awards from the fund.

  • The Board of Economic Development bill cleared the House State Affairs Committee on February 18, 2026.
  • The Future Fund bill passed the South Dakota House 63-4 on February 18, 2026 and now heads to the Senate.

The players

Karla Lems

A Republican state representative who introduced the bill to tighten conflict-of-interest rules for the Board of Economic Development.

Bill Even

The commissioner of the Governor's Office of Economic Development, who testified against the Board of Economic Development bill, arguing it could make it difficult to recruit qualified board members.

Marty Overweg

A Republican state representative who introduced the bipartisan bill to impose more controls on the governor's Future Fund for economic development.

Got photos? Submit your photos here. ›

What they’re saying

“This is about shoring up public trust. We have seen in recent years how the absence of guardrails leads to controversy.”

— Karla Lems, State Representative

“This bill replaces accountability with a purity test. This is an extreme step that will harm our state's business climate.”

— Ryan Budmayr, President and CEO, South Dakota Chamber of Commerce and Industry

“We had the opportunity to sit down and really be palms up around what the governor's office was looking for, and the governor, and GOED, as well as what the legislature was looking for. And through that process, we were able to work on this draft.”

— Bill Even, Commissioner, Governor's Office of Economic Development

What’s next

The Board of Economic Development bill now heads to the full South Dakota House for consideration, while the Future Fund bill moves to a Senate committee.

The takeaway

These proposed reforms aim to increase transparency and accountability in South Dakota's economic development efforts, addressing concerns about potential conflicts of interest and the appropriate use of state funds. The bills reflect an effort to strike a balance between maintaining an effective business climate and upholding public trust in government.