The bill seeks to strengthen legislative oversight of rulemaking in South Dakota by introducing new definitions and requirements for agencies. A significant change is the definition of a "major rule," which is now identified as any proposed rule that may incur over $3,000,000 in implementation and compliance costs. Agencies are required to conduct a regulatory impact analysis for all proposed permanent rules, which must include the rule's necessity, legal basis, alternative options, and a cost-benefit evaluation, all signed by the agency's chief officer to ensure accountability. The bill also establishes procedures for the Interim Rules Review Committee to review major rules, allowing for the possibility of reverting rules to earlier stages in the adoption process or recommending them for future legislative consideration.

Additionally, the bill modifies existing legal language regarding agency involvement in legal actions concerning rule validity, mandating that agencies be made parties to such actions and allowing for declaratory judgments regardless of prior requests for rule assessment. It also requires a de novo review by the court to determine if a rule qualifies as a major rule. New provisions clarify that legislation directing the promulgation of a major rule does not grant or modify statutory authority for rulemaking and does not affect claims regarding alleged defects in a rule. Notably, the bill repeals a previous requirement for agencies to prepare detailed impact statements for proposed rules affecting small businesses, which included specific requirements and definitions.

Statutes affected:
Introduced, 01/26/2026: 1-26-1, 1-26-1.2, 1-26-4, 1-26-5, 1-26-6, 1-26-14
Senate State Affairs Engrossed, 02/20/2026: 1-26-1, 1-26-1.2, 1-26-4, 1-26-4.2, 1-26-6, 1-26-14, 1-26-2.1