South Dakota 2025 Regular Session

South Dakota House Bill HB1202 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	25.771.15 100th Legislative Session 1202
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4	4	2025 South Dakota Legislature
5	5	House Bill 1202
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12	12	Introduced by: Representative Manhart
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14	14	Underscores indicate new language.
15	15	Overstrikes indicate deleted language.
16	16	An Act to permit the state to invest in Bitcoin. 1
17	17	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2
18	18	Section 1. That § 4-5-26 be AMENDED: 3
19	19	4-5-26. State public funds made available for investment may be invested in the 4
20	20	following classes of securities and investments and, except as provided by § 3-12C-223; 5
21	21	chapter 3-13; chapter 13-63; the permanent school and other educational and charitable 6
22	22	trust funds as provided in S.D. Const., Art. VIII, §§ 2 and 7; the permanent trust fund 7
23	23	containing the net proceeds from the sale of state cement enterprises as provided in S.D. 8
24	24	Const., Art. XIII, § 20; the health care trust fund as provided in S.D. Const., Art. XII, § 5; 9
25	25	and the education enhancement trust fund as provided in S.D. Const., Art. XII, § 6; not 10
26	26	otherwise: 11
27	27	(1) Direct and indirect obligations of the United States government; 12
28	28	(2) Agencies and instrumentalities of the United States government; 13
29	29	(3) Mortgage-backed securities of United States government-sponsored enterprises; 14
30	30	(4) Direct obligations of the State of South Dakota this state and any of its political 15
31	31	subdivisions; 16
32	32	(5) Obligations consisting of notes, bonds, debentures, and certificates, which are direct 17
33	33	obligations of a solvent corporation or trust existing under the laws of the United 18
34	34	States or any state thereof, if such the investments are rated in the four highest 19
35	35	classifications established by at least two standard rating services at the time of 20
36	36	purchase; 21
37	37	(6) Savings accounts, share accounts, certificates of deposit of banks, savings and loan 22
38	38	associations, building and loan associations, and bankers' acceptances; 23
39	39	(7) Repurchase agreements fully collateralized by securities described in this section; 24
40	40	(8) Shares in exchange -traded funds and open -end, no-load funds that are 25
41	41	administered by an investment company registered under the Federal Investment 26 25.771.15 2 1202
42	42	Underscores indicate new language.
43	43	Overstrikes indicate deleted language.
44	44	Company Act of 1940, 15 U.S.C. §§ 80a-1 to 80a-64, inclusive (January 1, 2025), 1
45	45	whose shares are registered under the Federal Securities Act of 1933, 15 U.S.C. 2
46	46	§§ 77a to 77aa, inclusive (January 1, 2025), and investments are predominantly 3
47	47	in securities described in this section; or 4
48	48	(9) Bitcoin that meet the requirements of sections 2 to 5, inclusive, of this Act; and 5
49	49	(10) In addition to the investments authorized by subdivisions (1) to (8) (9) of this 6
50	50	section, inclusive, the investment council State Investment Council may also 7
51	51	allocate a sum certain of state public funds for investment in the accounts and 8
52	52	certificates of South Dakota banks and associations. This sum shall must initially 9
53	53	be offered to South Dakota banks and associations, and if not initially fully 10
54	54	subscribed, the investment officer shall immediately reoffer the unsubscribed sum 11
55	55	to other qualified public depositories defined by subdivision 4-6A-1(7). 12
56	56	Section 2. That a NEW SECTION be added to chapter 4-5: 13
57	57	Terms used in sections 2 to 5, inclusive, of this Act mean: 14
58	58	(1) "Bitcoin," the digital asset that is the basis of the Bicoin exchange-traded product 15
59	59	regulated by the federal Securities and Exchange Commission; 16
60	60	(2) "Digital asset," virtual currency, cryptocurrencies, natively electronic assets, and 17
61	61	other digital-only assets that confer economic, proprietary, or access rights or 18
62	62	powers; 19
63	63	(3) "Exchange-traded product," any financial instrument that is approved by the 20
64	64	federal Securities and Exchange Commission, the federal Commodity Futures 21
65	65	Trading Commission, or the Division of Banking, which is traded on a United States 22
66	66	regulated exchange and derives value from an underlying pool of assets; 23
67	67	(4) "Private key," a unique element of cryptographic data used for signing transactions 24
68	68	on a blockchain and known only by the owner; 25
69	69	(5) "Qualified custodian," any federal or state-chartered bank, trust company, or 26
70	70	special purpose depository institution or company regulated by the Division of 27
71	71	Banking that holds a digital asset for an approved exchange-traded product; and 28
72	72	(6) "Secure custody solution," a technological product or blended product and service 29
73	73	that meets the requirements set forth in section 5 of this Act. 30
74	74	Section 3. That a NEW SECTION be added to chapter 4-5: 31
75	75	The amount of state moneys that the State Investment Council may invest in 32
76	76	Bitcoin may not exceed ten percent of the state moneys made available for investment. 33 25.771.15 3 1202
77	77	Underscores indicate new language.
78	78	Overstrikes indicate deleted language.
79	79	Section 4. That a NEW SECTION be added to chapter 4-5: 1
80	80	Any Bitcoin acquired as an investment must be held: 2
81	81	(1) Directly by the State Investment Council through the use of a secure custody 3
82	82	solution; 4
83	83	(2) On behalf of the State Investment Council by a qualified custodian; or 5
84	84	(3) In the form of an exchange-traded product issued by a registered investment 6
85	85	company. 7
86	86	Section 5. That a NEW SECTION be added to chapter 4-5: 8
87	87	A secure custody solution must have the following characteristics: 9
88	88	(1) The private key is exclusively known by and accessible by the government entity; 10
89	89	(2) The private key is exclusively contained within an encrypted environment and 11
90	90	accessible only via end-to-end encrypted channels; 12
91	91	(3) The private key is never contained by, accessible by, or controllable via a 13
92	92	smartphone; 14
93	93	(4) Any hardware that contains the private key is maintained in at least two 15
94	94	geographically diversified, specially designated secure data centers; 16
95	95	(5) The secure custody solution enforces a multi -party governance structure for 17
96	96	authorizing transactions, enforces user access controls, and logs all user-initiated 18
97	97	actions; 19
98	98	(6) The provider of the secure control solution has implemented a disaster recovery 20
99	99	protocol that ensures customer access to assets in the event the provider becomes 21
100	100	unavailable; and 22
101	101	(7) The secure custody solution undergoes regular code audits and penetration testing 23
102	102	from audit firms, and any identified vulnerabilities are promptly remedied. 24