CARBON CAPTURE PIPELINE COULD BE DELAYED FOLLOWING EMINENT DOMAIN BAN IN SOUTH DAKOTA

SIOUX FALLS, S.D. (AP) – The company behind an $8.9 billion carbon-capture pipeline proposed for five Midwestern states said Wednesday it wants to indefinitely delay its plans after South Dakota passed a law limiting its ability to acquire land for the project.

But even as it filed a motion to suspend its pipeline permit application timeline with the South Dakota Public Utilities Commission, the Iowa-based Summit Carbon Solutions said it remains committed to the pipeline.

Summit attorney Brett Koenecke said the action was needed because the legislation approved by South Dakota lawmakers and quickly signed into law by the governor changed the company’s ability to survey the route.

“The resulting delays in obtaining the surveys mean that the timelines involved in Commission action on this application are unrealistic,” Koenecke wrote in the motion. If the commission approves the motion, they can set a new deadline for the permit application.

The proposed 2,500-mile pipeline would carry carbon emissions from ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota to be stored underground permanently in North Dakota. By lowering carbon emissions from the plants, the pipeline would lower their carbon intensity scores and make them more competitive in the renewable fuels market.

The project had approvals in Iowa, Minnesota and North Dakota. But in South Dakota, a new law banned the use of eminent domain — the government seizure of private property with compensation — specifically for carbon-capture projects.

The eminent domain bill sponsor Republican Rep. Karla Lems said Summit is “trying to get their feet back under them” after the eminent domain ban.

Summit’s move was “generally good news” for Frank James, director of advocacy group Dakota Rural Action, which opposed allowing eminent domain for the project.

“It means the work that we did at the legislature with our allies was impactful,” he said. “It clearly shows the citizens of South Dakota really question these false solutions to climate change.”

Tad Hepner, vice president of strategy and innovation at the Renewable Fuels Association, disagreed, saying stopping Summit in South Dakota would put ethanol producers in the state at a competitive disadvantage to out-of-state plants connected to the pipeline.

“We don’t want to see haves and have-nots,” he said. “We want as many ethanol producers to be able to sequester their CO2 as possible.”

North Dakota Gov. Kelly Armstrong said Tuesday he doesn’t know how Summit will get its pipeline into North Dakota given South Dakota’s eminent domain ban.

Armstrong said he is concerned because officials and industry leaders were hopeful of eventually using carbon dioxide to extract oil. North Dakota is the No. 3 oil-producing state in the country, producing about 1.2 million barrels of oil per month.

Summit has already spent more than $1 billion on the project, Summit spokesperson Sabrina Zenor said. Despite the South Dakota suspension, “all options” are still on the table, the company said.

“Summit Carbon Solutions remains committed to working through this process and advancing the project in states that support energy and innovation,” the company said in a statement.

 

GOVERNOR RHODEN’S NEWS CONFERENCE FOCUSES ON PROPERTY TAX RELIEF

PIERRE, S.D. (SDBA) — Gov. Larry Rhoden outlined his approach to property tax relief Thursday after signing Senate Bill 216.

He said the measure is “a huge win for South Dakota homeowners” and promised more substantial relief in the future.

Rhoden explained that his administration is developing a property tax relief proposal to present to the legislative task force created during the 100th legislative session.

“We need to deliver meaningful property tax relief and actual property tax cuts for South Dakotans, and we need to find a way to do it without making the state or counties or school districts go broke,” Rhoden said.

The governor provided a primer on South Dakota’s property tax system, emphasizing that no property tax dollars go to the state government.

“Zero dollars and zero cents of property tax go to the state,” Rhoden said. “State government does not collect a penny in taxes.”

Rhoden recalled a conversation with a business leader who was unfamiliar with this fact.

“I was talking to a fellow, he was the president of one of the major trade organizations in South Dakota, and he was talking about the issues of property tax,” Rhoden said. “I asked him that and he made a guess. I said look zero dollars. Nothing goes to the state.”

Rhoden added that the business leader referred to a certain animal waste in response.

Rhoden explained that more than half of property tax revenue funds schools, with counties receiving 27 percent and cities 13 percent.

The governor outlined three primary ways to reduce property taxes: cutting spending on schools or local services, shifting the burden to another property class, or locating alternative funding sources.

Rhoden said his forthcoming plan would focus on the third option.

“It would be the third option to find an alternative funding source and something that’s viable, something that goes to the heart of the need in the areas,” Rhoden said.

When asked about the timeline for revealing his property tax plan, Rhoden said it would be “days, not weeks” before announcing details.

Rhoden wants to offer counties options under his proposal rather than a statewide mandate.

“I think we want to present a bill that gives individual counties options, and that’s what’s important,” Rhoden said. “If you believe in local control and especially if you can come up with a concept and then lay it out for people as an option.”

The legislature’s property tax task force will work on the issue throughout the summer.

 

SOUTH DAKOTA LEGISLATURE APPROACHED FINAL DAY WITH BUDGET, PROPERTY TAX DECISIONS

PIERRE, S.D. (SDBA) – Republican and Democratic legislative leaders offered contrasting perspectives on South Dakota’s budget and property tax relief as lawmakers completed the main run of the 100th legislative session Thursday.

“There’s heartburn for some people in this budget. I’ve got quite a few things in it I don’t like, but some of the lot of things I do like,” said House Majority Leader Marty Overweg, R-New Holland, during Thursday’s Republican leadership press conference.

The $7.3 billion budget includes a 1.25% increase for state employees, education, and community service providers and additional funding for Community Support Providers to address their reimbursement methodology.

Both parties celebrated the restoration of South Dakota Public Broadcasting funding.

“That was a key priority, a vital service that’s statewide. It’s more than just providing educational programming, news, TV, radio, but also our emergency alert system for the state of South Dakota,” said Joint Appropriations Committee member, Rep. Eric Muckey, D-Sioux Falls.

Property tax relief emerged as a significant focus, with Senate Bill 216 being the only successful measure. During the interim, the legislature approved a property tax task force to examine comprehensive solutions.

“The funding formula is complicated, but the parts of it that clearly are affecting landowners is what the local effort is,” explained Senate Majority Leader Jim Mehlhaff, R-Pierre. “Places that have seen these exponential increases in land valuations, their local effort is going up exponentially right along with their land values, and as that does, the state aid formula goes down.”

Speaker Pro Tempore Karla Lems, R-Canton, emphasized the need for comprehensive review.

“This task force better look at everything. There can be nothing that’s not on the table. And the way we fund education and special education in this state is a mess,” Lems said.

Mehlhaff added, “Obviously, we had Senate Bill 216 that passed. That was something. But, is it enough? No, I don’t think it’s enough.”

House Minority Leader Erin Healy, D-Sioux Falls, expressed concern about the task force’s direction.

“I’m very concerned that their solution with this task force, even though I supported the task force, is to cut spending and to look into our funding sources and how we fund our schools,” Healy said.

“They have been cut so much,” she added. “How can we potentially cut them even more without fully bringing them back to where they should be?”

Economic challenges loom over the legislature’s work. February sales and use tax receipts were down 0.9%, raising questions about future budget shortfalls.

The Republican leaders suggested the need for a new revenue source but did not offer any ideas for solving the property tax dilemma.

The legislature will convene a special session on July 22 to address the state’s prison system. The prison reset task force will hold its first meetings in Sioux Falls on April 2-3.

“It’s a two-day meeting down in Sioux Falls to kick off that very important work, and hopefully get prepared to have a decision in hand for a special session on July 22nd. So it doesn’t seem like it ever ends,” said Assistant Senate Majority Leader Carl Perry, R-Aberdeen.

Governor Larry Rhoden’s veto of House Bill 1132, a childcare assistance program, drew sharp criticism from House Minority Leader Healy.

“This bill would have helped incentivize a workforce in order to get empty classrooms full of children, and now we know that we’re probably going to see more closures,” Healy said.

The veto day for the 100th legislative session—the last and 38th legislative day- is March 31.

 

HOUSE OF REPRESENTATIVES FAILS TO OVERRIDE GOVERNOR’S VETO OF CHILDCARE ASSISTANCE BILL

PIERRE, S.D. (SDBA) – South Dakota House members failed to override Gov. Larry Rhoden’s veto of a childcare assistance bill today (Thursday), with the vote falling short of the required two-thirds majority.

The House voted 27-43 against the override during the 37th legislative day of the 100th legislative session, sustaining the governor’s veto of House Bill 1132.

The bill would have expanded childcare assistance eligibility for workers at licensed childcare facilities with incomes up to 300 percent of the federal poverty level, compared to 209 percent for other applicants.

House Minority Leader Erin Healy, D-Sioux Falls, urged colleagues to override the veto.

“I rise in support of overriding Governor Rhoden’s veto on House Bill 1132 because South Dakota families, businesses, and childcare workers cannot afford for us to let this bill die,” Healy said.

Healy emphasized empty classrooms result from staffing shortages.

“We have empty classrooms because we don’t have enough staff to open them,” she said. “Those staff already can’t afford childcare, and that’s why we’re here trying to help them.”

Rep. John Hughes, R-Sioux Falls, opposed the override.

“If we override the governor’s veto, in my opinion, we’re setting a really really bad precedent,” Hughes said. “When we start carving out and subsidizing individual sectors of the economy, it’ll never be enough.”

Rep. William Shorma, R-Dakota Dunes, supported the measure, citing economic development needs.

“I’ve got a company with 60 employees in a small community of 800 and there’s no childcare available,” Shorma said. “There needs to be something to make that happen.”

Rep. Jack Kolbeck, R-Sioux Falls, outlined specific financial concerns about expanding the program without additional funding.

“The bill expands the program by increasing income guidelines specifically for applicants working in a childcare setting,” Kolbeck said. “Creating a unique qualifying criteria based on where an applicant is employed creates equity issues with other employers.”

The bill would have allowed a family of four earning up to $93,600 annually to qualify for assistance, compared to $67,000 under current guidelines.

Rhoden’s veto message claimed the bill shifted the program from its core mission and could jeopardize assistance for currently eligible families.

Veto Day is scheduled for March 31.