Secretary of State proposes fee hikes to fund new business platform; committee approves fee bill 9‑0

Secretary of State Monet Johnson and her senior staff appeared before the House Appropriations Committee to present the office’s FY2026 budget and to introduce House Bill 10‑24, a package of fee changes intended to finance a new business filing platform and add an additional staff position.

Johnson said the office operates three divisions — general services, business services and elections — and is asking statutory changes that would raise selected business filing fees so that ongoing hosting and maintenance for an upgraded business platform are covered by the filing fee fund rather than the general fund. The committee voted to give House Bill 10‑24 a due pass on a 9‑0 recorded vote.

Key details presented to the committee: - Platform upgrade and maintenance: The office cited an estimated $2,250,000 initial cost to move the current business filing platform (Tecuity version 2) to a modern “version 5” platform, with ongoing annual maintenance estimated at about $435,000 (licensing, hosting and support). The initial upgrade cost was described as payable from BIT’s IT modernization fund. - Fee changes: HB 10‑24 proposed a $5 increase in the annual report fee for corporations and LLCs (from $50 to $55), raising the co‑op fee (from $30 to $55) to align it with corporations, and an increase to the financing‑statement/annual‑report filing fee from $1 to $6. The bill also changes the reversion threshold in the filing fee fund from $25,000 to $50,000. Officials said those increases would generate roughly $500,000 a year to pay the maintenance and staff costs. - Staffing requests: The Secretary of State asked for an additional FTE for business services (recommended in the governor’s budget as an other‑fund FTE) to handle sharply increased filing and customer service volume; staff cited substantial increases in filings and inquiries in recent years. - Relationship to existing third‑party system: Deputy Secretary Tom Dietrich said the office currently uses Tecuity and that version 2 is not widely used by other states; the proposed move is to a widely used version 5 that several other states employ. The office argued that low‑code functionality in the new platform reduces vendor turnaround time for form and process changes.

Committee members questioned how the fee revenue will be used, whether the BIT fund would cover the initial upgrade, and how proposed changes would affect nonprofits (they were not included). Johnson and deputy staff said the initial upgrade payment is expected from BIT’s IT modernization fund; the fee increases are intended to carry ongoing maintenance and support and to cover an added FTE.

Representative Kobach moved a due‑pass recommendation for HB 10‑24; Representative Cassin seconded. The secretary’s office said the fee schedule had not been updated since 2009 and noted that incremental increases were intended to keep South Dakota competitive for online filers and reduce reliance on vendor development hours.

The presentation also covered election matters handled by the office: an SDVotes upgrade expected to go live in September 2025 (funded in part by prior HAVA allocations), post‑election audits and HAVA grant balances, and a request for an elections communications/voter education FTE tied to a federal election security grant match.