Lawmakers had approved legislation on Thursday reforming South Dakota's program of construction-tax refunds for large business projects and agriculture processing projects. That legislation included a $500 million limit on the project costs that could qualify for the refunds. But there were second thoughts overnight that the cap might send the wrong message to companies considering developing wind projects in South Dakota, according to Rep. Val Rausch, R-Big Stone City.
Lawmakers had approved legislation on Thursday reforming South Dakota's program of construction-tax refunds for large business projects and agriculture processing projects. That legislation included a $500 million limit on the project costs that could qualify for the refunds. But there were second thoughts overnight that the cap might send the wrong message to companies considering developing wind projects in South Dakota, according to Rep. Val Rausch, R-Big Stone City.
Lawmakers extend special treatment to construction projects
PIERRE - The Legislature decided Friday that construction of large wind farms, electricity transmission lines and related facilities in South Dakota should receive additional eligibility for tax breaks after all.
Lawmakers had approved legislation on Thursday reforming South Dakota's program of construction-tax refunds for large business projects and agriculture processing projects. That legislation included a $500 million limit on the project costs that could qualify for the refunds.
But there were second thoughts overnight that the cap might send the wrong message to companies considering developing wind projects in South Dakota, according to Rep. Val Rausch, R-Big Stone …
... more [truncated due to possible copyright]Lawmakers extend special treatment to construction projects
PIERRE - The Legislature decided Friday that construction of large wind farms, electricity transmission lines and related facilities in South Dakota should receive additional eligibility for tax breaks after all.
Lawmakers had approved legislation on Thursday reforming South Dakota's program of construction-tax refunds for large business projects and agriculture processing projects. That legislation included a $500 million limit on the project costs that could qualify for the refunds.
But there were second thoughts overnight that the cap might send the wrong message to companies considering developing wind projects in South Dakota, according to Rep. Val Rausch, R-Big Stone City.
That led to Friday's action. The Senate voted 28-2 and the House of Representatives agreed 59-10 to take off the cap for wind farms and related development.
Those include electricity transmission lines and facilities used for manufacturing, assembling or distributing wind or transmission components.
"Our revenues off these wind farms are real," Sen. Bob Gray, R-Pierre, said. "Creating economic activity and jobs is a good thing. Getting cash into farmers' hands is a good thing."
The result is an unlimited amount of construction costs for wind projects could become eligible for 55 percent refunds of the state sales and use taxes and contractor excise taxes paid on them.
"This is an important addition to the discussion we had (Thursday)," Senate Democratic leader Scott Heidepriem of Sioux Falls said. "This proposal sends that message loud and clear, I hope, that South Dakota is open for business for wind."
What Gov. Mike Rounds will do with the measure, HB1060, is unclear.
The legislation began life as his modest attempt to scale down and simplify the construction-tax refund program. It now deals exclusively with wind projects.
Neil Fulton, the governor's chief of staff, testified Friday against giving the special treatment to wind projects after the main legislation reforming the construction-tax refunds, SB195, had already been passed.
Fulton said a key premise in SB195 was that all projects be treated equally with a $500 million cap. He suggested the wind issue be discussed over the summer for possible action next year.
"I'm not sure this is the right time in the session to carve that out," Fulton told the conference committee of three House and three Senate negotiators.
Gray, who was the original sponsor of SB195, led the move to grant more favorable treatment to wind projects Friday.
"I'd like to take one more run at taking the cap off wind," he said at the start of the conference hearing.
Gray carries considerable clout in the Legislature. He is state Republican Party chairman and is Senate president pro tem, the highest ranking member of the Senate. But there clearly was widespread and bipartisan support to giving better treatment to wind projects, and more so than to other projects such as crude-oil pipelines.
Testifying in favor of the change for wind were Bill Van Camp, a Pierre lawyer who represents wind-developer Nextera Energy Resources; Julie Johnson from the Absolutely! Aberdeen organization, which helped bring a major manufacturer of wind blades to the city; Darla Rogers, a Pierre lawyer representing the South Dakota Rural Electric Association; Steve Tomak, representing Bismarck-based Basin Electric; and Brett Koenecke, a Pierre lawyer representing several wind power companies.
"I think it sends a great message to the wind industry in the country," Van Camp testified. He said large wind projects increasingly exceed $500 million in costs.