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House approves bill to prevent noncompete deals for former nursing homes

File photo of an exterior sign at the Good Samaritan Society facility in Clear Lake, S.D., in 2022.
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When a nursing home closes in South Dakota, the former owner often puts restrictions on how the building can be used in the future. House Bill 1105 looks to prohibit that practice in medically underserved areas.

Proponents say it gives small towns the chance to preserve local long-term care options when larger corporations pull out.

But the state's three major health systems say it encroaches on private property rights. Representatives for Sanford, Avera, and Monument Health spoke against the bill in committee Wednesday.

Assistant House Majority Leader Marty Overweg is the bill's prime sponsor. He said this bill doesn't take anything from anyone.

"It doesn't force you to sell. It doesn't tell you what price you have to sell it for, and it doesn't tell you who you can sell it to," he said on the House floor. "In fact, the only thing it tells you you can't do is to hang that noncompete on a small community, 600-800 people, and take and push their elderly people 60-70 miles away, and probably 80, to a facility they don't know."

The House passed the bill by a vote of 45 to 20. It moves next to a committee hearing in the Senate.

The bill's advancement marks a bipartisan response after the Good Samaritan Society facility in Corsica announced plans to close last fall. Most residents are transferring to a facility in Wager, about 30 miles away.

Jackie Hendry is a special correspondent with SDPB based in Sioux Falls. Her coverage interests include the many ways public policy impacts child welfare, elder care, health and education.

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