Changes to Existing Law

HB1155 — Permit the state to invest in Bitcoin.

2 sections modified+2027-88

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§ 4-5

New Section

+1694

NEW SECTION added to Chapter 4-5

Terms used in sections to 5, inclusive, of this Act mean: (1) "Bitcoin," a digital asset that: (a) Is native to the decentralized peer-to-peer blockchain network that originates from the genesis block created on January 3, 2009; and (b) Maintains an unbroken chain of blocks from the genesis block through the chain recognized by the network of independent nodes as having the greatest cumulative proof of work; (2) "Digital asset," virtual currency, cryptocurrencies, natively electronic assets, and other digital-only assets that confer economic, proprietary, or access rights or powers; (3) "Exchange-traded product," any financial instrument that: (a) Is approved by the Securities and Exchange Commission, the United States Commodity Futures Trading Commission, or the Division of Banking; (b) Is traded on a United States regulated exchange; and (c) Derives value from an underlying pool of assets; (4) "Private key," a unique element of cryptographic data used for signing transactions on a blockchain and known only by the owner; (5) "Qualified custodian," any federal or state-chartered bank, trust company, or 31 special purpose depository institution or company regulated by the Division of 32 Banking, which is authorized to maintain custody of digital assets; 33 (6) "Registered investment company," a financial services company regulated by the United States Securities and Exchange Commission and registered under U.S.C. §§ 77a to 77aa, inclusive (January 1, 2026), and U.S.C. §§ 80a-1 to 80a-64, inclusive (January 1, 2026); and (7) "Secure custody solution," a technological product or blended product and service that meets the requirements set forth in section of this Act. 6

§ 4-5-26

Amended

+333-88

Section 4-5-26 — AMENDED

~~Classes of investments approved.~~ 4-5-26. State public funds moneys made available for investment may be invested in the following classes of securities and investments and, except as provided by § ~~3-12C-223;~~ 3-12C-5 223; chapter 3-13; chapter 13-63; the permanent school and other educational and charitable trust funds as provided in S.D. Const., Art. VIII, §§ 2 and 7; the permanent trust fund containing the net proceeds from the sale of state cement enterprises as provided in S.D. Const., Art. XIII, § 20; the health care trust fund as provided in S.D. Const., Art. XII, § 5; and the education enhancement trust fund as provided in S.D. Const., Art. XII, § 6; not otherwise: (1) Direct and indirect obligations of the United States government; (2) Agencies and instrumentalities of the United States government; (3) Mortgage-backed securities of United States government-sponsored enterprises; (4) Direct obligations of the State of South Dakota this state and any of its political subdivisions; (5) Obligations consisting of notes, bonds, debentures, and ~~certificates~~ certificates, which are direct obligations of a solvent corporation or trust existing under the laws of the United States or any state thereof, if such the investments are rated in the four highest classifications established by at least two standard rating services at the time of purchase; (6) Savings accounts, share accounts, and certificates of deposit of banks, savings and loan associations, and building and loan associations, and bankers' acceptances; (7) Repurchase agreements fully collateralized by securities described in this section; (8) Shares in exchange-traded funds and open-end, no-load funds that are administered by an investment company registered under the Federal Investment Company Act of 1940, U.S.C. §§ 80a-1 to 80a-64, inclusive (January 1, 2026), whose shares are registered under the Federal Securities Act of ~~1933~~ 1933, U.S.C. §§ 77a to 77aa, inclusive (January 1, 2026), and investments are predominantly in securities described in this section; or and (9) Bitcoin that meet the requirements of sections to 5, inclusive, of this Act. In addition to the investments authorized by subdivisions (1) to (8) of this ~~section, inclusive,~~ section,inclusive, the investment council the State Investment Council may also allocate a sum certain of state public funds moneys for investment in the accounts and certificates of South Dakota banks and associations. This sum shall must initially be offered to South Dakota banks and associations, and if not initially fully subscribed, the investment officer shall must immediately reoffer the unsubscribed sum to other qualified public depositories defined by subdivision ~~4-6A-1(7).~~ 4-6A-1(7) in § 4-6A-1. 12

Section 4-5-26 — AMENDED