The Judiciary Committee voted 9-3 to reject the measure after even its main sponsor said the issue needs more study before state law is changed.
Hunt said Monday's hearing demonstrated that South Dakota must eventually adopt laws to regulate surrogacy, particularly cases involving commercial arrangements that pay a lot of money to women who carry other people's babies.
"It's coming. This is going to be a big business. We're going to have to deal with the situation where it's for money," Hunt said.
Surrogacy is an arrangement in which a woman carries someone else's child. If often involves an implanted embryo provided by a couple who cannot give birth themselves.
The bill would have made any surrogacy arrangement or contract unenforceable. It would have kept parental rights with the woman who gives birth to a child, even if she was not the genetic mother.
People involved in such surrogacy agreements could have faced civil penalties and criminal charges.
Hunt said he wants to focus on preventing commercial surrogacy arrangements where women are paid a lot of money to carry other people's children.
"Do we have a problem in South Dakota?" Hunt said. I can't tell you of a particular case in South Dakota, but obviously it's happening in other states."
However, Tom Barnett, director of the South Dakota State Bar, said the measure would likely have prevented all surrogacy births. He said the State Bar, doctors and others could work on a model law that would regulate surrogacy arrangements but not prevent them.
"Surrogacy arrangements are a legitimate method for a loving couple to have their own child. What can be wrong with that?" Barnett said.
Eric Odenbach, a farmer from Eureka, testified against the bill while holding his infant daughter Georgia in his arms. He said his wife could not carry a child because she is a cancer survivor, a health problem that also made it impossible for the couple to adopt a baby. Odenbach and his wife decided to have a child with a surrogate mother.
"The surrogacy thing is a very viable option, and it was a really good experience," Odenbach said while his daughter grabbed for the microphone. "There has never been a child born that has been wanted more than this child."
Several women also testified that they carried children for other couples. They said they did it for love, not money.
Kristi Moen, of Sioux Falls, said she is now carrying a second child for a couple who cannot have children themselves, and the two families have become close.
The bill would interfere when a surrogate mother wants to help others have children, Moen said. "It would give the government dictatorship over who can and cannot be parents."
Harold Cassid,y of Shrewsbury, N.J., a lawyer who has worked on surrogacy disputes, said surrogate mothers often develop deep ties with a fetus. Surrogacy contracts determine child custody without any consideration of a child's best interests, he said.
Brokers are now inducing women to be surrogate mothers in exchange for money, Cassidy said.
"It calls for a breeding class of women who are to be discarded," Cassidy said.