In his State of the State address, Gov. Larry Rhoden said he hoped the bill allowing the state to move forward with the Rural Health Transformation Program would be the first to cross his desk.
Thursday, he got his wish.
Rhoden signed HB 1044, which appropriates funding for the program. It's the first bill the governor signed into law in the 2026 legislative session.
The Rural Health Transformation Program is a five-year federal initiative funded by President Donald Trump’s "One Big Beautiful Bill." Advocates say it is designed to strengthen health care systems in rural communities.
“This is a big win for rural South Dakota. This may be the most significant investment in rural health care in South Dakota’s history, and it will strengthen our state for our kids and grandkids,” Rhoden said. “By recruiting healthcare professionals, modernizing rural facilities, and expanding access to care, we will ensure South Dakotans in every corner of the state can stay healthy and strong.”
Now that the bill is signed, the Department of Health and other partners will move forward with the initial $189 million dollar award for this fiscal year. Additional federal funds over the five-year program window will depend on this year’s progress.
While the bill flew through the legislative process, it still faced questions from lawmakers along the way. Some fiscal conservatives voiced concerns over the program's contribution to the federal budget deficit. Others were concerned about sustainability. While the money is spread over five years, it is still considered one-time funding. The same federal legislation that created the program also cut funding to Medicaid, which supports rural health care systems. That combination has some lawmakers questioning the long-term impacts.
But throughout the process, proponents had a common response: whatever broader concerns there are, this is not the bill to address them. They argued future Rural Health Transformation Program dollars depend on how well — and quickly — states move in enacting the program.
“If we want to talk about deficits and things like that, let’s go for it. This is not that bill," Rep. Drew Peterson said during debate on the House floor. "Whether we spend this money in South Dakota or California or Texas, this money’s getting spent. We can serve our communities with these dollars. We can help keep these facilities open in our communities so we can continue to allow people to live in rural communities with a high quality of life.”
The bill included an emergency clause, meaning it took effect as soon as the governor signed it.
The RFP process for local providers to take part in the Rural Health Transformation Program is expected to begin in the next few months.
