The concept of harnessing the wind to create energy may finally blow into South Dakota with more regularity after the Legislature on Wednesday passed a taxation plan favorable to wind farm projects.
New wind-power projects in South Dakota would pay lower taxes than before under the plan that received final legislative approval Wednesday.
“We’ll be competitive with North Dakota. We’ll be right there with Minnesota,” said Rep. Roger Solum, R-Watertown.
The measure didn’t attract much attention, but ranks as one of the significant economic-development accomplishments of the 2015 legislative session.
Wind projects in South Dakota reportedly are paying about $5 million more in taxes over their lifespans than they would in neighboring states, according to various legislators and several representatives of wind-power companies.
Solum was at the center of much of the work in the state House of Representatives during the past week that produced the final version of Senate Bill 180.
He served as chairman of a legislative study in 2011 that analyzed South Dakota’s competitiveness for wind energy projects, and this year he is chairman of the House Taxation Committee, where the final version came together.
The Senate voted 32-1 Wednesday to agree with that House version of the package, which now goes to Gov. Dennis Daugaard for his review.
Various provisions in the legislation allow county governments to continue receiving their current amounts of taxes on existing wind projects, while reducing the production tax for new projects that begin producing electricity April 1 and after.
The legislation also repeals South Dakota’s tax-rebate program for electricity transmission lines and collector systems at generation sites.
Senate Republican leader Tim Rave of Baltic praised House members for their work.
“Over there a good compromise was brought by folks from North Dakota. It makes us more competitive,” Rave said.
He was referring to officials for Basin Electric, which provides power to many South Dakota rural cooperatives.
Repealing the rebate program will allow the state treasury to keep more money, according to Sen. Scott Parsley, D-Madison, while holding counties unharmed and offering a more attractive tax structure to prospective projects.
“There is a lot of wins, and winds, in that,” said Parsley, who was a long-time executive at East River cooperative that carries power from Basin to many rural electric cooperatives.
The House gave its approval to the package Tuesday 64-4.
Rave is the bill’s prime sponsor while Solum is its lead sponsor in the House.
Their co-sponsors are senators Jason Frerichs, D-Wilmot; Brock Greenfield, R-Clark; and Jim Peterson, D-Revillo; and representatives Fred Deutsch, R-Florence; John Wiik, R-Big Stone City; Patrick Kirschman, D-Sioux Falls; House Democratic leader Spencer Hawley of Brookings.
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