Legislative Update - Week #5
Action on legislation continues at a brisk pace as we round off week 5 of the 2022 Legislative Session. There have been beginning conversations of cutting sales tax in South Dakota on goods and services, due to increases of on-going revenues. There was also discussion of who has authorization to spend federal grant dollars.
In one of my committees, the House Commerce and Energy Committee, we heard testimony on HB 1331, which intended to “clarify the description of common carrier pipelines”. Pipelines are seemingly in the local and national news often, with most of headlines garnering a number of negative conversations and concerns for leaks, emissions, destruction of vegetation, harmful to wildlife, etc. However, some claim that pipelines are a reliable way to move commodities, are much safer, and more efficient than trucking the commodity on public highways. You probably are familiar with the proposed Summit Carbon Solutions. It is a pipeline that is intended to move carbon dioxide, generated from ethanol plants in South Dakota, and will send the product (commodity) to an underground storage facility in North Dakota. I think the intention of HB 1331 was to open the discussion of whether carbon dioxide was a hazardous byproduct or a commodity that can be moved by a pipeline through the common carrier status. To me, the testimony of the bill sponsor and of the opponent, was both informative and fascinating. It also sparked more questions than answers. Ultimately, the bill did not pass, due to the possible unintended consequences that were unclear. I have received a number of emails this week regarding the carbon carrying pipeline. I am eager to further understand the concerns of landowners and citizens during several upcoming scheduled conversations.
Early conversations about decreasing the state’s sales tax have resulted into HB 1327, which will be introduced through the Joint Committee on Appropriations. As I ponder the legislation, I don’t yet have enough information to take a position. Yes, revenues are unprecedented and general growth of our state is promising. Yet, as a seasoned businessman, I would like to see sustainability of the tax revenues before making any kind of decision. Whether you agree with all the stimulus that the federal government has favored the national economy, it has had an effect of inflating revenues, and I think the call for the sales tax cut may be premature. I don’t disagree with the premise of returning revenue to our taxpayers, however, I am leery of doing something too quick. If Medicaid expansion passes in November, there will be an additional burden on our budget. Furthermore, I continue to hear that we will need a substantial investment in facilities at the State Prison in Sioux Falls. More to come on this and I welcome any thoughts you may have on the topic.
The question of whether the Joint Committee on Appropriations or the Governor, has authority to spend federal grant dollars was a topic in our chamber this week. Seemingly, the House Committee on Appropriations has done its due diligence and has determined the Governor alone does not have authority and needs theirs as well. Normally, this is not in question as the legislature gives spending authority (state general and federal funds) through the general appropriations bill each year. To me, the general appropriations bill, last year SB 195, gives the Governor spending authority until the next general appropriations bill is passed. This has been a confusing issue and unfortunately, the difference in opinion caused some delays in getting payments to authorized grant recipients. Normally, I am proud of the way the legislature works with executive branch, this week I wasn’t.
Thank you for the opportunity to be of service and I look forward to your contacts. mw