House Bill 1183 – An extension of an economic development grant

An Act to extend by two years the date on which moneys appropriated to the Governor’s Office of Economic Development in 2021 for marketing, route restoration, business development, and air service marketing will revert to the general fund.

The bill was delivered to the Governor on March 3, 2025, after successfully passing both the House and Senate.

A sincere thank you to everyone who supported the legislation, with special appreciation to sponsors Steve Duffy, Eric Emery, David Kull, Matt Roby, Helene Duhamel, and Carl Perry.

In 2021, the South Dakota Legislature passed SB162, originally allocating $4,400,000 in general funds to support air service recovery and development across the state. $3,800,000 of these funds were distributed between Rapid City Regional Airport (RAP) and Sioux Falls Regional Airport (FSD) and are designated for marketing, route restoration, business development, and air service promotion. 600,000 was allocated to essential air service airports – Watertown, Pierre and Aberdeen for marketing.

Why?

The COVID-19 pandemic caused unprecedented disruptions to the aviation industry, leading to widespread route suspensions, staffing shortages, and supply chain challenges that delayed aircraft deliveries. Even as travel demand rebounded, these issues created significant hurdles for restoring pre-pandemic air service levels. Smaller markets like those in South Dakota faced additional challenges due to limited airline resources and shifting carrier priorities toward larger, more profitable markets.

To counter these challenges, South Dakota has taken a proactive approach, engaging with air carriers multiple times a year to advocate for the restoration of lost routes and the introduction of new ones. The state’s investment through SB162 is a critical part of this strategy, helping to mitigate financial risks for airlines and incentivize new route development.

Impact of SB162 Funding

At Rapid City Regional Airport, these funds have been instrumental in securing new routes and supporting existing services. Specifically:

• New Route Development: Funding supported the launch of seasonal flights to Orlando Sanford International Airport (SFB) and Los Angeles International Airport (LAX), expanding access to key leisure and business markets.
• Grant Matching for Federal Programs: Some of the funds are earmarked to match grants from the Small Community Air Service Development Program (SCASDP). This federal program helps small communities address air service deficiencies by providing financial assistance that can be used for revenue guarantees, marketing, and studies to support sustainable air service.

At Sioux Falls Regional Airport, similar initiatives have been undertaken to restore and expand air service, focusing on both leisure and business destinations.

Representatives who supported this airport bill:

Arlint, Bahmuller, Bathke, DeGroot, Derby, Duffy, Emery, Fitzgerald, Goodwin, Greenfield, Halverson, Healy, Heermann, Heinemann, Jamison, Jorgenson, Kassin, Kolbeck (Jack), Kull, Ladner, Massie, May, Moore, Mortenson, Muckey, Mulder, Novstrup, Odenbach, Peterson (Drew), Pourier, Rehfeldt, Reimer, Reisch, Roby, Roe, Shorma, Sjaarda, Stevens, Uhre-Balk, Van Diepen, Vasgaard, Walburg, Weems, Weisgram, Wittman, Crabtree, Davis, Deibert, Duhamel, Foster, Grove, Hohn, Hulse, Jensen (Kevin), Kolbeck (Steve), Larson, Mehlhaff, Miskimins, Otten, Perry, Peterson (Sue), Reed, Rohl, Sauder, Schoenfish, Smith, Vilhauer, Wheeler, Zikmund

Representatives who did not support this airport bill:

Andera, Auch, Aylward, Baxter, Garcia, Gosch, Hughes, Hunt, Ismay, Jensen (Phil), Jordan, Kayser, Lems, Manhart, Mulally, Nolz, Overweg, Randolph, Reder, Rice, Schaefbauer, Schwans, Soye, Hansen, Beal, Blanc, Carley, Howard, Karr, Lapka, Marty, Nelson, Pischke, Voight, Voita