March 25, 2024

Session’s Work Ends | No Vetoes

Governor Noem has signed all the bills that were sent to her desk, ending the work done by the 2024 Legislative Session. Technically, the session will not conclude until Tuesday when they meet after a “storm day” to officially adjourn “Sine Die” which is Latin for “without a future date” or “without tomorrow”.

A session without a single veto has not happened in approximately 30 years according to records kept by Capitol-ism’s author and as shown on this spreadsheet. Dakota Scout reports the last session without any vetoes was 1955.

Three Kinds of Vetoes a Governor May Issue  

• A General Veto which rejects the legislation for reasons listed in a letter. A general veto can be overridden with a 2/3rds vote of both the House of Representatives (47 of 70 votes) and the Senate (24 of 35 votes). 
• A Style and Form veto in which the Governor offers specific language to change a bill. It takes a majority vote to agree with a style and form veto. If the changes are not agreed to, the bill is sent back to the governor to be certified or to be returned as vetoed, then a vote is taken to override the veto which takes a 2/3rds vote.  
• A Line-Item veto which the Governor chooses specific parts of the budget bill to reject. Restoring the items that are struck also takes a 2/3rds vote to override.

Veto History. Here is a history of the total number of vetoes issued by each governor since 1997, which is the first year records are available on the Legislative Research Council’s website.

     - Governor Noem (7 sessions) = 18
     - Governor Daugaard (8 sessions) = 35
     - Governor Rounds (8 sessions) = 61
     - Governor Janklow (6 sessions) = 74  

The Economic Realities of CO2 Pipelines | Driven by Regulations | Decisions Made to Reduce CO2 Emissions

This legislative session spent many hours debating CO2 pipelines and the rights of the people that own the land that those pipelines would travel across. 

Why?

Was this a debate about economic development, about a corporate bully pushing around innocent landowners or was it about people who refuse to comply with the common good or perhaps were using the legislature to leverage more money from a company. Answer: both, and neither.

From the start. To understanding how the pipeline makes economic sense it is necessary to accept the fact that the United States has decided that CO2 is icky and it should NOT be put into the air.

That decision has been made. Period. The Chamber understands that most people in South Dakota don’t like that decision.  Most legislators don’t like it either. That doesn't matter. The policy is here, most likely to stay, and it has a real impact on the future of the ethanol market.

The new rules are designed to create incentives for putting CO2 anywhere other than in the air. 

The rules create credits that affect the price of ethanol, especially in the western United States where people like these kinds of regulations.  If South Dakota ethanol plants can properly deal with CO2, then these credits mean they continue to be competitive in national markets.  These credits are significant enough that ethanol plants and other CO2 producing industries can pay someone like Summit to take their carbon dioxide and remain profitable.

Remember, these credits exist even if no one in South Dakota likes them.

A full appreciation of the economics of ethanol must include a reminder that more than 50% of the corn grown in South Dakota is sold to ethanol plants.  As goes ethanol, so goes corn prices.

Landowners deserve respect. A minority of the landowners affected by the pipeline brought a dozen bills that sought to change the rules for CO2 pipelines and change things such as the company’s ability to access to the courts for eminent domain, changing procedures for accessing land to survey routes and test soil and other changes. Many of these bills were designed to block the project altogether and some sought to force the project to comply with overly complex regulations. Several counties had passed rules that didn’t leave a viable route through their county.

After many hours of discussions, and several melt downs, three bills emerged that struck a balance between the parties involved. Much credit goes to Senator Crabtree and Representative Mortenson for putting together the bills that struck a balance between landowners’ concerns and the needs of the pipeline owners. These bills (HB 1185, HB 1186 & SB 201) articulated a “bill of rights” for landowners, gave stronger rules for surveying the routes and specified that easements must end after 99 years. They even created a fee of $1 per linear foot to be paid by the company to landowners and to county governments. This fee is in addition to considerable property taxes that each county will receive.

CO2 pipelines are critical to the economic future of the state. The 2024 legislative session deserves credit for keeping that option viable while addressing the landowners ‘concerns. This is how things are supposed to work . .  . and that, to quote Martha Stewart, is a good thing.

The main event for each legislative session is the passage of the FY2024 (SB 52) State Budget and the FY2023 (HB 1259) supplemental budget. This is accomplished by the Appropriations Committee who meet daily during session. 

FY2024 Revised Supplemental Budget Summary (SB 52)

SB 52 includes a 4% inflationary increase for K12 schools, Medicaid providers, and state employee salaries; a third year of a tuition freeze for the state universities and tech colleges; targeted increases for certain Medicaid providers including nursing homes, assisted living centers, and community support providers.

In addition, SB 52 funded additional FTEs for the State Public Defender's office to take some of this burden off of counties and pre-funding of additional costs the state will need to absorb next year due to Medicaid Expansion. Because the second circuit caseload has grown 60% since 2000, SB 52 also added a circuit judge and three new court staff for the 2nd Circuit Court in Sioux Falls. (Note: Governor Noem had already proposed adding one new judge. The legislature added a position for a total of two).

Noteworthy among these items were funding for the new men's and women's prisons, $10M for airport improvements, $6M for the new LifeScape hospital in Sioux Falls, $3M for a new Quantum Computing center at Dakota State University, $7M to help cities and counties with cybersecurity, $16M for maintenance and repair of state university buildings, and $4.8M for equipment upgrades at the tech colleges.

SB 52 General Appropriations Act for Fiscal Year 2024 (Budget Detail)

SB52 made changes to the current budget year and finalizes the budget. Overall, SB 52 includes a net decrease in general fund expenses of $93.5 million. Budget revisions to revenue allowed additional flexibility for one-time budget investments in this bill that include:

• $16.8M for M&R at our BOR campuses
• $4.8M for Technical Colleges Equipment, with a $2.4M match from the Technical Colleges
• $4.5M for the Hughes County Jail Contract to address the overcrowded women’s prison until our new facility is constructed in Rapid City.
• $1.0M for start-up costs related to the Bioproducts Center at SDSU
• $0.8M for State Veterans’ Home Contract Medical Staff
• $0.6M for Juvenile Community Placements
• Additional one-time funding was provided for:

SB 52 also makes necessary adjustments to the current fiscal year to finish out normal operations. SB 52 is a balanced budget that uses one-time funding for one-time expenses and ongoing funding for ongoing expenses. This is a budget that invests in the people of South Dakota that will have a positive impact for generations.

The key priorities funded through this bill include:

• 4.0% increase for K-12 and technical colleges.
• This inflationary amount of 4.0% exceeds the amount required by statute. This is our way of giving a pat on the back to our educators for a job well done.
• 4.0% increase for healthcare providers who take care of the most vulnerable among us.
• This bill increases funding to raise reimbursement rates for community-based providers, nursing homes, assisted living, hospitals and all of our providers that take care of those in need.
• 4.0% increase for our state employee workforce, which is any organization’s most valuable resource.
• This increase for executive agencies and targeted increases in Constitutional Offices will allow state employees a strong cost of living increase to help with inflation we have all experienced.
• Funding a tuition increase for the Board of Regents schools and at our Technical Colleges.
• Funding the Office of Indigent Legal Services which will help consolidate these services and be more efficient as a state while taking some of the burden off of the counties.
• Funding additional targeted provider payments beyond the Governor’s recommendation to get to at least 98% of cost methodology for our providers.
• Funding over $20 million in additional funds to plan for the full cost of Medicaid expansion that will impact the FY2026 state budget.

· Increase of $135.0 million in general funds
· Decrease of $250.8 million in federal fund expenditure authority
· Increase of $45.6 million in other fund expenditure authority
· Decrease of $70.2 million in total funds

· $2.4 billion in general funds
· $3.2 billion in federal fund expenditure authority
· $1.7 billion in other fund expenditure authority
· $7.3 billion in total funds
· 14,071.7 FTE

Black Hills Energy | Christiansen Land & Cattle Ltd | Dacotah Bank | First PREMIER Bank/PREMIER Bankcard | KELOLAND Media Group | MidAmerican Energy | NorthWestern Energy | Valley Queen Cheese | Wheeler Manufacturing 

Student competition sponsors are Citi and SD EPSCoR. Matching funds for both competitions are provided by Governor Noem's Office of Economic Development.

For reception registration information, visit https:/bit.ly/3wvJvEL.