HB 1318

 26.803.10  101st Legislative Session  1318
                                       2026 South Dakota Legislature
                                                House Bill 1318
 Introduced by: Representative Auch
1 An Act to prohibit natural asset companies.
2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
3 Section 1. That a NEW SECTION be added to a NEW CHAPTER in title 5:
4Terms in this chapter mean:
5    (1)      "Natural asset," arable soil, air quality, biodiversity, drainage management,
6extractive resources, natural disaster resilience, pollution sinks, and water quality;
7and
8    (2)      "Natural asset company," a corporation, limited liability company, or any other
9entity or affiliate of an entity that:
10(a)    Holds the rights to any measurable ecological outcome of a defined area
11and has the authority to manage the area for conservation, restoration, or
12sustainable management;
13(b)    Has a primary purpose of actively growing, maintaining, managing, or
14restoring the value of natural assets; and
15(c)    Is listed by the Securities and Exchange Commission as a natural asset
16company, regardless of legal form, but not including any nonprofit
17organization, privately held farm, or company that contracts with
18government entities to actively manage ecosystem health by providing
19physical services.
20 Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 5:
21The state may not engage in business, whether directly or indirectly, with a natural
22    asset company in a way that would grant the natural asset company a direct or indirect
23    interest in, or right to, public land or state resources.
24 Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 5:
                                                                                Underscores indicate new language.
                                                                              Overstrikes indicate deleted language.
 26.803.10  2  1318
1The investment of any state moneys in a natural asset company is prohibited. Any
2    money allocated to, controlled by, or managed by the state may not be invested in:
3    (1)      Securities or other interests of a natural asset company;
4    (2)      Mutual funds or other funds invested in a natural asset company; or
5    (3)      Private placements, partnerships, or other investments in a natural asset company.
6The state may not approve, guarantee, issue, sponsor, or otherwise engage with
7    any bond offering involving a natural asset company or any project in which a natural
8    asset company holds an interest or exercises control.
9Any person overseeing investment or bonding activities in violation of this chapter
10    shall immediately arrange for the disposition of any prohibited investment or use of
11    moneys.
12 Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 5:
13A natural asset company may not operate, conduct business, or acquire assets,
14    easements, or other interests in this state.
15A   natural   asset,   including   real       property   and   any   associated  easement,
16    encumbrance, lien, or other interest or right, may not be used for the benefit of,
17    transferred or promised to, or created for later transfer to or use by, a natural asset
18    company.
19If a natural asset company acquires an ownership interest in a natural asset,
20    ownership of the natural asset must revert to the prior owner and any associated
21    easement, encumbrance, or lien is void and unenforceable.
22 Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 5:
23Any state agency, political subdivision, or private citizen, who is adversely affected
24    by a violation of this chapter, may file an action in the circuit court in the county in which
25    the affected natural asset is located.
26If the court finds a violation of this chapter has occurred, the court may award
27    attorney fees and costs to the plaintiff.
28 Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 5:
29The secretary of state shall rescind authority to transact business in this state from
30    any entity that becomes a natural asset company.
                                                                                       Underscores indicate new language.
                                                                                     Overstrikes indicate deleted language.
 26.803.10  3  1318
1The secretary of state shall revoke any certificate of authority already issued to a
2    foreign natural asset company.
3The secretary of state may not:
4    (1)      Accept for filing any articles of incorporation or other organizational documents of
5a natural asset company;
6    (2)      Grant authority to a natural asset company to transact business in this state;
7    (3)      Accept any amendment of an existing entity's articles of incorporation or other
8organizational documents for the purpose of converting the existing company into
9a natural asset company;
10    (4)      Accept filing fees from a natural asset company;
11    (5)      Permit a natural asset company to enjoy good standing, transact business, or
12otherwise operate in this state; or
13    (6)      Issue a certificate of authority to a foreign natural asset company.
14 Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 5:
15Any contract with a natural asset company entered into on or after July 1, 2026,
16    by the state or by any other entity in violation of the provisions of this chapter is void and
17    unenforceable.
18 Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 5:
19The provisions of this chapter do not apply to the South Dakota Retirement System,
20    the State Investment Council, or any assets managed by the State Investment Council.
                                                                               Underscores indicate new language.
                                                                             Overstrikes indicate deleted language.