House approves mandatory-reporting bill for supervisors after amendment narrows penalty

The South Dakota House on March 3 passed Senate Bill 62 after debate and floor amendment. The bill requires state supervisors who, in the regular course of duties, have reasonable cause to suspect improper governmental conduct or criminal activity by state employees to report that information to the Attorney General and the Auditor General. Failure to report was originally proposed as a class 6 felony; the House adopted amendment 62H to change the penalty to a class 1 misdemeanor.

Representative Lambs presented the bill and described high-profile cases of alleged misuse of taxpayer dollars as part of the rationale for criminal reporting requirements. "This has got to stop because we're talking about again, it's South Dakota taxpayer dollars," Lambs said on the House floor.

Representative Reich moved amendment 62H, which the House approved 38–31. Reich said the amendment applied "similar logic" used recently in debate about penalties and argued a misdemeanor carries serious consequences while avoiding creating a felony that could unduly penalize supervisors who made judgments about noncriminal or ambiguous conduct.

Opponents of the amendment, including Representative Odenbach and Representative Lembs, urged defeat of 62H and argued the higher penalty was necessary to provide a deterrent, citing the Attorney General's position and recent prosecutions like charges involving the Department of Social Services. Representative Odenbach said the amendment "kinda guts the purpose of the bill" and urged members to resist the change.

Floor debate included questions about the definitions in the bill (for example, supervisory authority), the mens rea standard ("knowingly"), and the practical effects of attaching felony status to failure to report improper governmental conduct. Representative Mortensen and others argued the misdemeanor amendment would still create substantial deterrence, while Representative Stevens and others raised concerns about ambiguous language and the consequences of felony convictions for supervisors.

After adoption of amendment 62H, the House proceeded to final passage and the clerk reported final vote tallies of 66 ayes, 3 nays, 1 excused.

The bill as amended requires agencies to adopt implementing policies and directs the Attorney General to report information to the Government Oversight and Audit Committee (GOAC). It also directs a form for supervisor reports to be prescribed by the Attorney General.