The state House of Representatives gave final legislative approval today to significant tax reductions for wind energy projects and environmental upgrades at large electricity plants in South Dakota.
The vote on House Bill 1228 was 52-16. The legislation now goes to Gov. Dennis Daugaard for his decision whether to sign the measure into law. It would provide 50 percent rebates on the sales and use taxes and the contractor excise taxes paid.
Rep. Roger Solum, R-Watertown, led the argument in favor of the refunds. He chaired a special study panel last year for the Legislature on South Dakota’s competitiveness for wind projects.
Solum said businesses take taxes into consideration and having an attractive supply of wind isn’t a guarantee they will come to South Dakota.
He said the tax break for environmental upgrades is intended for the Big Stone power plant, which faces expenses of “just under a half a billion dollars” to meet air-quality regulations.
Rep. Steve Street, D-Revillo, said the power plant is 15 miles north of his farm and the upgrade is “a huge, huge project” for the area. He spoke in support of the tax reductions.
“I think it falls under the realm of economic development,” Street said, adding that the owners of the plant serve 30 percent of the electricity customers in South Dakota.
House Democratic leader Bernie Hunhoff of Yankton said he doesn’t want to oppose “three great American companies” who operate the plant, but he argued against the bill’s passage.
Hunhoff wondered why South Dakota taxpayers should bear the loss of tax revenue from the rebates, while NorthWestern Energy, Montana-Dakota Utilities and Otter Tail Power have many customers in multiple states.
“Ten, fifteen, twenty million dollars, that’s real money to the taxpayers of South Dakota,” Hunhoff said about the possible financial impact of the Big Stone break. “We didn’t put the environmental regulations in place, the federal government did.”
But Rep. Mark Willadsen, R-Siuox Falls, disagreed with Hunhoff. Willadsen said the owners of Big Stone plant will pass the tax costs along to its customers including those in South Dakota.