South Dakota Legislative Update - March 8, 2022

Senate Bill (SB) 36 – Support: Brought at the request of the South Dakota Public Utilities Commission, the bill would require financial security for the decommissioning of solar facilities.

SB 36 adds the term “solar energy facilities” to an existing statute allowing the Public Utilities Commission to require financial security for wind turbine decommissioning. These financial securities are held by the Commission to ensure that the costs of decommissioning are covered by the project owner and not the landowners.

SB 36 was heard in the Senate Commerce and Energy Committee on Jan. 18. There was no opposition testimony. After being amended for technical language, the bill passed 9-0. It was placed on the Senate consent calendar and passed on Jan. 20. On Jan. 26 it was approved by the House Commerce and Energy Committee unopposed, and passed the House floor 64-0 on Jan. 31. It was signed by the governor on Feb. 9.

SB 80 – Support: This bill, introduced by Sen. Casey Crabtree, exempts the provision of electricity through electric vehicle charging stations from the definition of electric utility. Current law prohibits anyone from selling electricity unless they are a utility. SB 36 exempts electric vehicle charging stations from the definition of utility, allowing owners of electric vehicle charging stations to resell electricity as long as they have purchased it from a utility that is engaging in the retail sale of electricity within the utility's assigned service area. This will simplify the process of building out electric vehicle charging station infrastructure in the state.

SB 80 was heard by the Senate Commerce and Energy Committee on Jan. 20 and numerous proponents testified in favor of the bill, including the Public Utilities Commission. There was no opponent testimony. The bill was amended for clarification and passed 9-0. It was placed on the Senate consent calendar and passed on Jan. 24. It passed the House Commerce and Energy Committee 10-0 on Jan. 31, and passed the House floor 65-1 on Feb. 1. It was signed by the governor on Feb. 9.

House Bill (HB) 1081 – Support: This bill, introduced by Rep. Tim Goodwin, adds solar energy tax revenue to the calculation of local effort for state aid to school districts. HB 1081 inserts solar energy into the existing statute governing how wind tax revenue is apportioned to school districts, meaning both wind and solar tax revenue would be treated the same. South Dakota’s solar industry is expected to grow significantly in the near future, with the state’s first two utility-scale projects slated for completion in the next year. These projects are expected to increase the state’s solar capacity from 1.8 megawatts to more than 200 megawatts.

HB 1081 was heard in the House Taxation Committee on Jan. 27. Proponents spoke to the financial impact solar tax revenue would have on the school districts located near the development, and argued that because solar and wind are regulated the same in most ways, it makes sense their tax revenue be treated the same. Opponents argued that original negotiations that allowed wind tax revenue to be retained by the schools did not include solar. A do pass motion on the bill failed 6-7. The bill was then voted on again and was sent to the 41st legislative day (killed) on a vote of  8-4, with 1 excused.

HB 1093 – Oppose: This bill, introduced by Rep. Mark Willadsen, would increase the annual fee for certain electric motor vehicles from $50 to $250. HB 1093 amends a law passed in 2021 that created an annual fee for electric motor vehicles. This electric vehicle fee offsets the lost funds that are normally generated through the gas tax, collected in the state’s highway maintenance fund, and used for construction and maintenance of roads and bridges.

According to the Federal Highway Administration, the average American drives 13,500 miles per year. For a vehicle with a fuel economy of 25 mpg, that equates to purchasing 540 gallons of gasoline on average per year. The state gas tax is 28 cents/gallon, which means that a South Dakotan purchasing an average of 540 gallons of gas per year contributes $151.20 annually in gas taxes, which is $100 less than the proposed fee on electric vehicles.

HB 1093 was heard by the House Commerce and Energy Committee on Jan. 26. The sponsor acknowledged he was unsure if $250 was the appropriate increase and referenced nearby states’ electric vehicle fees, which ranged from $75-$130. It was noted in discussion that the fee on electric vehicle owners only applies to South Dakota residents and does not capture non-resident vehicles traveling through the state. The Department of Revenue testified in opposition, saying the $50 fee hasn’t had a full year to run its course yet, and that a 400% fee increase is premature. Ultimately, the committee voted to send the bill to the 41st day (killed) on a vote of 12-1.

SB 55 – Support: Brought at the request of the Governor’s Office of Economic Development (GOED), SB 55 appropriates $50 million dollars in federal fund expenditure to be used for grants for the continued expansion of broadband infrastructure and to declare an emergency. In 2021 the State’s Chief Information Security Officer testified that 135,000 South Dakotans, or 1 in 6 South Dakotans, lack broadband access, making this program an important investment.

SB 55 was heard in the Senate Commerce and Energy Committee on Feb. 10. The Center submitted a written comment in support of the bill. The Governor’s Office of Economic Development stated that appropriating these federal funds for broadband infrastructure buildout will allow the state to replace and recover a large portion of the $75 million that was allocated from general funds last year for broadband infrastructure. Proponents of the bill included the South Dakota Telecommunications Association, Midcontinent Communications, South Dakota Farm Bureau, the South Dakota Association of Cooperatives, and others. There was no opponent testimony and the bill passed 8-0. Since then, the bill has passed the Senate Committee on Appropriations, the Senate floor, and the House Committee on Appropriations unanimously. It passed the House floor on March 3 on a vote of 65-4. 

SB 135 – Support: This bill, introduced by Sen. John Wiik, revises provisions regarding agritourism liability. SB 35 amends current liability statute related to participation in outdoor recreation and agritourism activities to provide additional protections for operators. It defines the “inherent risk” related to participation in activities on land that is used for agricultural purposes, and requires agritourism operators to post signage stating that owners are not liable for injuries or death resulting from an inherent risk of the agritourism activity.

SB 135 was heard on Feb. 3 by the Senate Judiciary Committee. It was noted in testimony that the bill was crafted through the efforts of a summer task force that included agritourism operators, governmental departments, and other groups. Numerous proponents spoke in favor of the bill, including the Department of Agriculture and Natural Resources and the Department of Tourism. It was also noted that 39 states have enacted similar legislation and that this bill does not provide immunity for operators but protects them from accidents related to known and obvious risks associated with agritourism activities. The South Dakota Trial Lawyers Association was the only opponent to speak against the bill. SB 35 passed committee on a vote of 5-1. It was heard on the Senate floor on Feb. 7 and passed 31-4. On Feb. 24 the bill was heard in the House Agriculture and Natural Resources Committee and passed unanimously. It cleared the House floor on Feb. 25 with a vote of 64-2 and was signed by the governor on Mar. 3.

HB 1322 - Support: This bill, introduced by Rep. Marli Wiese, provides for the sale of certain home-produced or home-processed foods and food products. HB 1322 amends the state’s “home processed foods law,” which allows for the sale of shelf-stable baked and canned goods without a license. Among other changes, the bill would allow for a broader range of products to be sold under the law and provide a low-cost food safety training that allows for producers to sell the full range of products allowed under the bill.

HB 1322 was heard in the House Commerce and Energy Committee on Feb. 14. The Center testified as a proponent of the bill, as did Dakota Rural Action, Americans for Prosperity, and the Institute for Justice. Several food producers also testified in support of the bill. The South Dakota Retailers Association was the only opponent, but they suggested several amendments which would remove their opposition. The committee requested that the parties work together on the amendments and deferred the bill to Feb. 16. On that date an amended bill was offered which clarified that all foods sold under the exemption must be prepared in a home kitchen, and that the point of sale must be the seller's residence, a farmers market, roadside stand, or other temporary venue, or personally delivered to the buyer by the someone residing at the seller’s home. The amended bill passed 10-0. It then passed the House floor on Feb. 23 with a vote of 70-0. It was heard in the Senate Commerce and Energy Committee on March 3 and the Center again testified as a proponent. It passed 7-0, and then cleared the Senate floor on a vote of 34-0. It now awaits the governor’s signature.