This article summarizes reporting by Dakota News Now.

South Dakota Governor Pre-Files SB 76 to Fund Major Airport Expansions

South Dakota Governor Larry Rhoden has officially pre-filed Senate Bill 76 (SB 76), legislation aimed at injecting capital into the state’s two largest commercial aviation hubs. According to reporting by Dakota News Now, the bill proposes utilizing state funds to issue zero-interest loans for critical infrastructure projects at Sioux Falls Regional Airport (FSD) and Rapid City Regional Airport (RAP).

The announcement, made on January 9, 2026, marks a strategic pivot in how the state approaches infrastructure financing. Rather than offering direct grants, the Rhoden administration is seeking to leverage the Revolving Economic Development and Initiative (REDI) Fund to support airport modernization. This move comes in response to record-breaking passenger growth and the urgent need for expanded terminal capacity in both East and West River regions.

Governor Rhoden, who assumed office following the resignation of former Governor Kristi Noem, has framed the legislation as a fiscally responsible method to support economic development. By utilizing a loan structure, the administration argues that the funds will eventually return to the state for future use, addressing concerns raised by fiscal conservatives during previous legislative sessions.

Legislative Framework and Funding Mechanics

Senate Bill 76 outlines a specific mechanism to transfer unobligated capital from the Housing Infrastructure Fund to the REDI Fund. According to the legislative text summarized in recent reports, the total allocation is capped at $30 million.

Loan Structure and Distribution

The bill designates an equal split of the available resources between the state’s two primary airports. Under the proposed terms:

• Sioux Falls Regional Airport is eligible for up to $15 million.
• Rapid City Regional Airport is eligible for up to $15 million.

Crucially, these funds are structured as 0% interest loans rather than grants. This distinction is intended to make the bill more palatable to lawmakers who previously opposed direct spending on specific airport projects. As noted in the research surrounding the bill, the repayments will flow back into the REDI Fund, allowing the capital to be “recycled” for other economic development initiatives across South Dakota.

Scope of Infrastructure Projects

Both airports have reported double-digit percentage increases in passenger traffic since 2019, pushing current facilities to their operational limits. The funding from SB 76 is intended to accelerate multi-million dollar expansion plans that are already in development.

Sioux Falls Regional Airport (FSD)

Officials at Sioux Falls Regional Airport, also known as Joe Foss Field, have outlined a comprehensive master plan to address congestion. The proposed expansion includes the construction of a new concourse connection and significant terminal upgrades. Key elements of the project include:

• The addition of 5 new aircraft gates, bringing the total gate count to approximately 12.
• 57,000 square feet of new space dedicated to passenger seating and circulation.
• Enhanced baggage claim and security checkpoint facilities.

According to project estimates, the total cost for the FSD expansion is projected between $130 million and $140 million, with a target completion date around 2027. The airport is a major economic engine for the region, generating an estimated $400 million in annual economic activity.

Rapid City Regional Airport (RAP)

Rapid City Regional Airport is facing similar pressures driven by high tourism demand for the Black Hills and Mount Rushmore. Passenger traffic at RAP has surged by approximately 30% since 2019. The proposed funding would support a multi-year terminal expansion and renovation, including:

• Modernization of the TSA security checkpoint.
• Expansion of ticketing and baggage claim areas.
• Upgrades to mechanical systems and infrastructure, portions of which date back to 1985.

Political Context and Stakeholder Reactions

The introduction of SB 76 occurs as Governor Rhoden prepares for the 2026 election. The administration has positioned the bill as a “win-win,” balancing the need for infrastructure growth with fiscal prudence. In a statement regarding the initiative, Governor Rhoden emphasized the necessity of the project:

“South Dakota continues to grow, and we need infrastructure that can grow with us. We’re putting existing dollars to work in a smart, responsible way.”

, Governor Larry Rhoden (via official press remarks)

However, the bill may face debate in the upcoming legislative session. Critics, including some conservative lawmakers, have previously argued that surplus funds should be prioritized for property tax relief rather than targeted loans. Additionally, there is occasional friction regarding the concentration of state resources in Sioux Falls and Rapid City, though proponents argue that these airports serve as the primary gateways for the entire state.

AirPro News Analysis

The shift from grants to zero-interest loans represents a significant tactical adjustment by the Rhoden administration. By utilizing the REDI Fund, the state is effectively treating airport infrastructure as a renewable economic investment rather than a sunk cost. This approach may serve as a model for other states looking to fund aviation infrastructure without permanently depleting general funds, particularly in an era where federal funding can be unpredictable. If successful, this model could accelerate the timeline for regional airports to modernize, ensuring they can accommodate the next generation of commercial aircraft and passenger volumes.

Sources

Sources: Dakota News Now