The 2024 South Dakota legislative session addressed a number of items and issues, with much time focusing on budgets and pipeline concerns. However, the legislature each year considers many bills, most of which do not make the headlines but do affect bankers and their clients.

On July 1, 2024, most non-emergency legislation passed by the South Dakota legislature and signed into law by the Governor take effect. Some that may be of interest to banking clients are discussed below.

One potentially significant bill which updates the Uniform Commercial Code to provide modernized procedures to transfer digital assets and secure loans with digital assets was HB 1163, which addressed emerging technologies and provided updated rules for commercial transactions involving virtual currencies, distributed ledger technologies (including blockchain), artificial intelligence, and other technological developments. Twenty-one states have enacted the UCC amendments thus far, including North Dakota, Minnesota, Iowa and Nebraska of our surrounding states. A corresponding bill which will also go into effect prohibits South Dakota from accepting a central bank digital currency as a form of payment and a concurrent legislative resolution was also passed which urged Congress to reject any central bank digital currency.

Another Bill which may affect our clients increased the amount which a business may assess against returned checks from $40 to $60. Also, taking effect on July 1, 2024, is HB 1231 which restricts defined foreign entities from owning or leasing agricultural land in SD and limits the use by other foreign ownership to 160 acres ownership (with an exception for land held as security for indebtedness). The defined entities that are prohibited from any ownership or leasing include any foreign entity, foreign government, or foreign person from China, Cuba, Iran, North Korea, Russia and Venezuela.

Finally, legislation was passed which updates the South Dakota notarization laws to allow electronic signatures executed and acknowledged in certain specific defined requirements. If you have questions on any of this legislation, contact a Davenport Evans Lawyer.

Additional Resources:

Keith A. Gauer, Uniform Commercial Code Amendments: Correcting Misconceptions, March 17, 2023, https://dehs.com/uniform-commercial-code-amendments-correcting-misconceptions/

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Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the state’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit www.dehs.com