Appropriations committee advances bill to fund airport terminal improvements statewide

The House Committee on Appropriations voted 7–2 to send Senate Bill 127 to the full House, advancing a proposal to appropriate state money for grants supporting airport terminal improvements and expansions.

Sponsors and airport officials said the money would help smaller and regional airports leverage federal funding and respond to rising travel demand. “Airports are economic machines,” Representative Steve Duffy said in committee, pointing to state and local benefits. Rapid City Regional Airport Executive Director Patrick Dame described a three‑phase terminal expansion with phase 1 at $83 million and said the airport had assembled roughly $40 million in federal funding for that phase but still needed state or local contributions to complete work such as replacing TSA equipment and improving baggage handling. Dan Lettler, airport director in Sioux Falls, said Sioux Falls handled a record 2.4 million passengers last year and warned that if facilities are not expanded, fares could rise as travelers use out‑of‑state airports.

The bill drew support from chambers of commerce, municipal leaders and construction trade representatives, who framed the grants as economic and infrastructure investments that would benefit communities across the state. Katie Seiverting of the Sioux Falls Airport Authority said the $10 million the Legislature approved last year was distributed to eight projects and that the original request for 2024 had been $90 million.

Brandy Meissner of the Bureau of Finance and Management opposed the bill’s approach, telling the committee that state aeronautics policy historically capped terminal funding and focused state support on safety‑related projects such as runways and lighting. Meissner said terminal projects have a separate aeronautics commission cap of $200,000 per project under current policy and that funding terminals at higher levels would be a significant change in how the state has traditionally supported airports.

Representative Kolbeck, sponsor on the House side, argued the federal funding environment has shifted and that matching state funds help leverage federal dollars. After debate, Kolbeck moved the bill to the House floor; the committee approved the motion 7–2. The roll call on the motion recorded Aye votes from Kassen, Kulbeck, Muckee, Moore, Jorgensen, Northrop and Burby and No votes from May and Sharda.

If enacted, the bill would direct general funds to grants for airport terminal work and direct the Aeronautics Commission and local airports to apply state funds alongside federal Airport Improvement Program and Passenger Facility Charge resources. The bill language and a letter of intent distributed last year would guide how grants are allocated; proponents said a similar letter of intent would likely accompany implementation to specify distribution criteria.

The committee record shows proponents highlighted several figures offered in testimony: Rapid City described a roughly $222 million total terminal program with phase 1 estimated at $83 million; the city reported roughly $20 million in congressional directed spending and about $40 million in federal funds for phase 1 at the time of testimony. Witnesses also described passenger facility charges (PFCs) and federal AIP funding as constrained — PFCs were cited at about $4.50 per passenger and AIP at roughly $3.2 billion nationwide annually — and argued state seed money would help secure federal matches.

The bill now moves to the House floor for further consideration.