Press "Enter" to skip to content

First Bills! House Dabbles with Booze and Bait; Senate Tackles Road Taxes and Drainage

On the eleventh day of Christmas, my true love gave to me—bills!

The first bills filed for the 2015 South Dakota Legislature don't necessarily predict how the Session will go any more than the first two tiny precincts that report their ballot count dictate how the election will turn out. But the first nine bills in the hamper show an interesting difference between the House and the Senate.

The House's first bills deal with the pressing need to sell more alcohol in South Dakota. House Bills 1001 through 1004 come from the Interim Alcoholic Beverage Shipping and Distribution Committee (yes, this issue needed a committee). HB 1001 lets us order hooch at home by FedEx. HB 1004 lets brewers sell their brew to retailers and wholesalers.

In other hoochie-coochie, HB 1002 spends $100,000 right now! to implement electronic reporting and submission of alcohol taxes. HB 1003 gets rid of a 2% wholesale tax on alcoholic beverages but raises the occupational tax on everything stronger than beer by 25%. It also cuts the municipalities' share of the state alcohol tax from 25% to 20% (hey! shout the munis).

To round out the House's first urgent offerings, HB 1005 removes language about the defunct foundation program fund, and Rep. Dick Werner (R-22/Huron) introduces HB 1006 to allow the use of bullhead and fish guts as bait.

Meanwhile, the Senate earns its title as the upper chamber by focusing on two far more significant (and somewhat related!) statewide issues: roads and drainage. Senate Bill 1 is the monster we knew was coming, Senator Mike Vehle's (R-20/Mitchell) latest swing at getting the state to pay for road repairs. SB 1 will...

  1. raise the motor vehicle excise tax from 3% to 4%;
  2. raise the motor fuel excise tax in ten annual steps, starting July 1, 2016, from 22 cents now to 28.16 cents per gallon on July 1, 2025;
  3. tax ethanol at ten cents per gallon starting July 1, 2015, and bump that tax up two cents each year until July 1, 2021, when it reaches 22 cents;
  4. tax dyed special fuel at seven cents per gallon;
  5. tack a 3%-of-wholesale tax—7.5 cents to start with and as an ongoing minimum—on all fuel except aviation and jet fuel (Mike Rounds is our U.S. Senator now);
  6. moves 50% of the funds from petroleum release compensation and tank inspection fees to the highway construction fund starting July 1, 2020;
  7. moves a little bit of money from the petroleum release compensation fund to the state capital construction fund (wait a minute: with Keystone XL and Dakota Access pipelines maybe coming, is it a good idea to put less money away for oil spills?);
  8. raises motor vehicle license fees ten percent (for a small car, the plates price rises from $30 to $33);
  9. imposes a new license fee of $80 on all-electric vehicles and $40 on hybrids (8o bucks?! That's the tax you'd pay now on 364 gallons of gas, or just over 10,000 miles of travel in a conventional 30-mpg vehicle);
  10. leaves the cap on county wheel taxes at $4 per wheel, but raises the cap on total per-vehicle wheel tax from $16 to $48 (Doug Wiken! That's your idea, isn't it?); and,
  11. creates funds to help local governments fix their roads and bridges.

Senate Bill 1 by itself probably fills the stepping-in-it quota for the Senate. But then comes the Regional Watershed Advisory Task Force shaking our trees with two bills on drainage. Senate Bill 2 would create "river basin natural resource districts," new governmental entities with the power to tax and regulate to protect their watersheds. SB 2 also repeals some current drainage statutes that could get in the way of the work of the new river basin districts.

Senate Bill 3 would create a new statewide mediation program to help resolve disputes over drainage. However, it places that program under the Department of Agriculture, not the Department of Environment and Natural Resources. Hmm... the fatal flaw in that bill seems clear from the get-go.

The first six offerings from the House should not raise much ire, other than that sneaky HB 1003 business of cutting the municipalities' piece of the action. The first three Senate Bills, however, may bring storms of debate and lobbying, as they all three deal with issues of major import for numerous groups in South Dakota.


  1. Tim 2015.01.05

    I don't have a problem with SB1, roads need work.

  2. grudznick 2015.01.05

    It almost seems as if you may have even more time on your hands to do analysis of all the things the legislatures are doing, Mr. H. I look forward to seeing the contrasts between your math and the legislatures and Mr. Sibby's from now until April. You should keep some running lists for all of us.

  3. Owen 2015.01.05

    I guess I don't have a problem with SB1 either (except it hurts the people that can least afford it).
    But if a Democrat would have sponsored the Republicans would have gone nuts.

  4. Roger Cornelius 2015.01.05

    What is it with these tax happy Republicans, no new taxes must just be catch phrase.
    Oh well, Republicans have been raising taxes on South Dakotans for the past 40 years.

  5. Francis Schaffer 2015.01.05

    Ag drainage is already provided for in the SD Constitution with taxing authority given to counties and townships. I hope they don't thing they can trump the Constitution just because it is inconvenient.

  6. Owen 2015.01.05

    As long as Republicans raise taxes I guess its ok Roger. Although some right wingers will say Republicans are the same

  7. Tim 2015.01.05

    Owen, all taxes are going to have that effect, we know they won't close any of those 600 million worth of business tax loopholes to pay for it and the roads do need fixed. The one thing that worries me, SB1 won't look anything like it does now when it comes out of committee, that could be scary.

  8. Owen 2015.01.05

    I realize that Tim and I'm not against paying for our roads. But we should get Federal help on this as well.
    You're absolutely right that SB1 might look totally different when it comes out of committee.

  9. Richard Schriever 2015.01.05

    If the alcohol tax is going up 25% - then reducing the muni's take by 5% simply makes it a wash for them, while the state gets all the additional revenue (20%).

    SB2 seems like it could have come out of an expansion of some of the work that was done in SF Tomorrow development last year, regarding setting up a Skunk Creek Basin Authority to address water quality in the Big Sioux as it flows through SF. That was a "local government" issue I worked on as part of that stakeholder group.

  10. Roger Cornelius 2015.01.05

    Owen, you may get your wish about federal government help to fix our highways, remember that John Thune additional fuel tax are not off the table with this new Republican congress.
    With these new tax increases and leveraging of others, what guarantee is there that they will be used for intended purposes or will they just go into a Republican slush fund?
    We've had taxes collected for years for new roads and road improvement, where and how were those funds actually used, or did they go into that bloated reserve fund?

  11. John 2015.01.05

    I am so excited about bullheads for bait, no joke, catfish love them, I do not, really pokey are Bullheads. There will be a few less felons if this law passes. It's win, win, unless you are a Bullhead..............or a catfish.

  12. jerry 2015.01.05

    Before any new taxes are imposed, how about looking hard at existing tax exemptions that drain millions each year. Can't South Dakota run itself like we do around the kitchen table to balance our books. I heard that someplace not so long ago from republicans, so I will now ask republicans, can't we solve this like we at home do around the kitchen table?

  13. Donald Pay 2015.01.05

    SB 2 looks very interesting. The bill just creates a roadmap toward potentially creating a more realistic watershed approach to some of these water management issues. It's something that some of us have thought about over the years, but couldn't figure out how to do politically. It seems that there are still lots of questions to be answered, which is why there is a fairly long-term approach to setting up the system.

    The drawback that I see is creating another level of government, but not folding other units into it. Maybe that can be looked into. Still, it's worth pursuing to see if it can work.

  14. Moses 2015.01.05

    Thune raise taxes fiscal not,amazing dems wanted to do this republicans say no to taxes for interstrucure now ok.I am fiscal by name only.

  15. Kurt Evans 2015.01.05

    Cory Heidelberger wrote:
    >"On the eleventh day of Christmas, my true love gave to me—bills!"

    A very small number of Western Christians regard the evening of December 25 as the beginning of Christmas and December 26 as the first of the twelve days. A much larger number regard December 25 as the first day and January 5 (today) as the twelfth.

    But Cory's an atheist, and I'm a libertarian, and the twelve days of Christmas aren't even in the Bible, so maybe I should let him number them any way he likes. :)

  16. John 2015.01.05

    What a hoot, the 'tax and spend' republicans; the 'create more government' republicans. What a pack of leftists.

    SB 1: The folks who damage the roads escape responsibility from paying their proportional fair share of the road damage they cause. Heavy vehicles cause exponentially greater road damage and should pay exponentially more for vehicle registration - as a civic and personal responsibility. Across-the-board tax/registration raises are a cop-out that subsidizes the heavy truck road damagers. Light vehicles cause negligible road damage and should be proportionally taxed as such. Scientific road and economic studies document the above; ah, but we're anti-science when it's convenient to so be.

    SB 2&3: More local government in the already vastly over locally governed South Dakota? Where's the take-back? Reduce the counties by 10 to 20% in conjunction with creating these new statewide watershed governments. to reduce the likelihood that local government taxes may increase by 5 to 15% or more. And really, asking the SD Ag Dept to regulate waters when 95% of the state's substandard waters are in that condition because of agricultural runoff - Fox, guard the chicken coop!

  17. Ryan Gaddy 2015.01.06

    Mmj bill coming soon. Billboards up in sioux falls already :)

  18. caheidelberger Post author | 2015.01.06

    Tim, do you have any estimate of how much the increased gas taxes would add to your annual operating expenses as you travel the state for work? And is there any way to calculate how much fixing the roads will save you in wear and tear on your vehicles?

  19. caheidelberger Post author | 2015.01.06

    Ryan, a medical marijuana bill? Who's carrying it for you? Who bought the billboards? Send us bill text and a billboard picture!

  20. caheidelberger Post author | 2015.01.06

    On SB2: As Donald notes, there is some logic to having a governing body that deals with the entire watershed instead of having authority along the same river piecemealed across county lines. But John's point is worth consideration: do we really need to set up another layer of government to handle this problem? Why haven't we been able to forge inter-country cooperation on this issue? Doesn't the logic of SB 2 indicate that we're still piecemealing the issue and demand that we form interstate watershed management districts with Minnesota, Nebraska, Iowa, and Wyoming? Could we achieve the goals of SB 2 better by folding all drainage questions into a single statewide board under the DENR?

  21. caheidelberger Post author | 2015.01.06

    On SB 3, I'm totally with John. First amendment I want is to strike "Department of Agriculture" and insert "Department of Environment and Natural Resources." To let one industry-captured department run mediation of drainage disputes is nuts. DENR can be pretty industry-friendly, but they are more likely to give broader concerns a fair hearing than the Ag Department, whose very mission statement of promoting agriculture makes it impossible for them to act as an honest broker. (I'd link to Ag's website, but their server is broken this morning.)

  22. caheidelberger Post author | 2015.01.06

    Kurt—sorry! I was counting backwards from Epiphany/Orthodox Christmas, which our Russian friends are celebrating today. Madville Times Bill 2047: exempt home Christmas lights from electric bills from Thanksgiving to Epiphany. ;-)

  23. Tim 2015.01.06

    I would have to try to figure how much I spent on fuel while driving 70k miles last year. My problem is where do I figure, fuel costs at the beginning of last year were much higher than they are now, and fuel costs continue to fall. (Not complaining) As far as maintenance costs go, to be honest, for the most part I find the major roads and interstate to be in pretty good shape, potholes, rough railroad crossings and crumbling roads are mostly in towns and cities. Now, once you get off the pavement and onto gravel then you are talking a different game.

  24. Tim 2015.01.06

    Personally, if the legislature is going to raise fuel taxes, I prefer they do it all at once now while fuel prices are still falling. By the time fuel prices start back up the tax increase will already be factored in and not much impact. I understand the impact will be more on individuals and low income folks but, if you drive, then road maintenance repair cost is something you should be prepared to pay.

  25. Wayne B. 2015.01.06

    Well, this will definitely change buying habits. If I have to pay an extra percent to the state to buy a vehicle, I can afford less vehicle.

    Why cap wheel tax at 8? Why are we giving semis a break? We know they're the big offenders. Heck, drive along Hwy 50, 281, 212, etc. and see where they patched the road in long parallel lines that remarkably match the wheel base of a tractor trailer...

  26. Wayne B. 2015.01.06

    Nevermind re: wheel tax cap... it'd be 12 wheels max, and since trailers are separate from the semi tractors, both would get taxed separately.

    I'll be interested to hear how much this is projected to raise, and how much more we'll need... Right now there looks to be a lot of pain spread out to light vehicles...

  27. caheidelberger Post author | 2015.01.06

    Tim, if you use consistent amounts of gasoline, you can calculate your tax: notice that the at-the-pump tax is strictly per-gallon, not keyed to prices. The wholesale tax is fixed at 7.5 cents for the first year, then is 3% of the average yearly wholesale price after that.

    You do make an interesting point about timing: low fuel prices could give the Legislature an opportunity to move Vehle's slow-and-easy schedule up considerably and capture revenue now while the capturing is good. If gasoline consumption is dropping, Vehle's per-gallon increases over the coming ten years may not stop revenue from falling. Should we amend that schedule to increase the per-gallon at-the-pump tax 6.16 cents (or more) right now?

  28. caheidelberger Post author | 2015.01.06

    Wayne B., I agree we should listen hard to the fiscal impact numbers that should come up in committee. I'd also like to consider weighting the tax burden on the weightiest, most damaging vehicles.

  29. caheidelberger Post author | 2015.01.06

    Jerry, your link does bring up an interesting bill idea: we should get some legislation in the chute to create our own insurance exchange to ensure that South Dakotans can still keep their premium tax credit, just in case the Supreme Court goes crazy.

    I'm uneasy with the legal reasoning of the link you provide... because it's not legal reasoning, but policymaking from the bench. The Supreme Court should decide King v. Burwell based on the law and precedent, not on policy implications.

  30. jerry 2015.01.06

    Policymaking from the bench is exactly what the Roberts Court has done. Citizens United is not legal reasoning, but policymaking from the most politicized Court ever. Daugaard should be put on record exactly his intent is if the subsidies should suddenly be switched back to the state for action.

  31. Kurt Evans 2015.01.06

    Cory Heidelberger wrote:
    >"Kurt—sorry! I was counting backwards from Epiphany ..."

    No apology is necessary, Cory. That's an easy computational error. Epiphany even came to be known colloquially as "Twelfth Day" in Britain, despite the Church of England's clear designation of December 25 through January 5 as the twelve days of Christmas.

    Cory wrote:
    >"... Epiphany/Orthodox Christmas, which our Russian friends are celebrating today."

    That looks like another fairly common misunderstanding. I'm pretty sure Orthodox Christmas is December 25 on the Julian calendar, which is tomorrow, and its proximity to Epiphany on the Gregorian calendar is basically a coincidence.

    Cory wrote:
    >"Madville Times Bill 2047: exempt home Christmas lights from electric bills from Thanksgiving to Epiphany."

    You're apparently trying to set up the ACLU for an easy kill (ha ha).

Comments are closed.