Appropriations panel backs modest fee hikes to fund Secretary of State software upgrade

Senate Appropriations on crossover day gave House Bill 10‑24 a due‑pass recommendation after Secretary of State officials said the bill would finance an upgraded business‑filing platform and a small additional FTE.

"This bill is necessary to support the development implementation of a new business platform," Secretary of State Monet Johnson told the committee, saying the changes would make filings faster and more resilient for South Dakota businesses.

Deputy Secretary of State Tom Diedrich said the platform upgrade carries an initial vendor cost of $2,250,000 and a yearly maintenance fee of about $435,000, and that the implementation could be completed in roughly 60 weeks. "The upgraded platform has an initial cost of $2,250,000 and a yearly maintenance fee of 435,000," Diedrich said. He told lawmakers the initial procurement would be paid from an existing IT modernization fund in the Bureau of Information and Telecommunications, while the bill would direct fee increases to the filing fee fund to cover ongoing maintenance and roughly $60,000 for an additional FTE.

Under the bill, the annual report fee for corporations and LLCs would rise by $5, from $50 to $55, and co‑operatives would move from $30 to $55, aligning co‑ops with corporations and LLCs. The financing‑statement/annual‑report filing fee portion would increase from $1 to $6. Diedrich said the statutes governing the filing fee fund (cited in testimony as 57‑9‑527) create a continuously appropriated fund used to operate business filing systems, and that the proposed changes funnel all fee increases into that fund.

Committee questions focused on current revenues and the need for the change. Diedrich testified fees collected today generate about $800,000 annually for the filing fee fund and that the bill is projected to raise about $500,000 more. Senator Vilhauer asked whether the $800,000 figure represented existing annual receipts; Diedrich confirmed it did and reiterated the roughly $500,000 estimate for the proposal.

Supporters emphasized modernization and speed of changes under the new low‑code platform; Diedrich said the state’s present vendor platform is increasingly difficult to maintain and that a widely used, continuously developed system would reduce the likelihood that a small change "breaks another part of the program." He also noted nonprofits were not included in the fee increases and that annual report amendments would increase by about 20 percent under the bill.

On a procedural motion, Senator Miskiszewski moved a due‑pass recommendation; the committee roll call returned eight yeas and one excused. HB 10‑24 now heads to the Senate floor.

Votes at a glance: HB 10‑24 — motion to give a due‑pass recommendation: mover Senator Miskiszewski; seconder Senator Zickman; tally 8 yeas, 0 nays, 1 excused; outcome: due pass (to the floor).