(C) South Dakota Searchlight
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House restores ‘loan loophole’ bill back to original form • South Dakota Searchlight [1]
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Date: 2025-02-05
A bill that would close a campaign finance loophole allowing unlimited funds into a campaign is headed to the governor’s desk.
“If you believe that restoring reasonable limits to South Dakota’s political process is what our citizens expect of us, please vote green,” said Rep. Tim Reisch, R-Howard.
The state House of Representatives passed the bill 38-29 on Wednesday at the Capitol in Pierre. It would prevent the ability to make unlimited campaign donations as long as the donation is categorized as a loan.
Reisch is the bill’s House sponsor. First, he successfully persuaded fellow lawmakers to strike an amendment added during the bill’s recent House committee hearing. It would have imposed a $10,000 cap on federal campaign transfers to state political committees. That amendment, introduced by Rep. Spencer Gosch, R-Glenham, was reintroduced by Reisch as a standalone bill.
Reisch said it was necessary to strip Gosch’s amendment because it might violate South Dakota’s single-subject rule for legislation.
“It’s better to be on the safe side than to risk having the entire bill thrown out,” Reisch said.
Gosch, however, said the amendment was a natural extension of the bill’s purpose: closing campaign finance loopholes.
“I would argue this is good,” Gosch said. “I would urge you to turn down this motion.”
Reisch’s proposed reversion passed 34-33.
A tense turn
The debate took a tense turn when Rep. Brandei Schaefbauer, R-Aberdeen, accused the bill’s sponsors of using it as a tool to target Aberdeen businessman Toby Doeden.
Doeden’s actions did shine a light on the loophole. In the most recent election cycle, he reported a $100,000 contribution to his own Dakota First Action committee. The contribution exceeded the state’s $10,000 limit on individual contributions to political action committees.
Doeden later amended the report, reclassifying the contribution as a loan. Current state law allows loans to be forgiven, effectively providing a way to nullify contribution limits.
“This bill was brought to the State Affairs Committee to specifically weaponize government against political opponents,” Schaefbauer said. She donated $750 to Doeden’s PAC ahead of the recent general election.
Reisch said the vote tests whether lawmakers believe in unlimited campaign contributions.
The bill now heads to Gov. Larry Rhoden for final consideration.
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