PIERRE — One of the last, yet most-talked-about carbon pipeline bills of South Dakota’s 99th Legislative Session has officially entered the fray at the State Capitol.
A heavily-amended version of Senate Bill 201, touted as a compromise measure between eminent domain-averse landowners and pipeline advocates, cleared the Senate Commerce and Energy Committee with a 7-2 vote.
In its current form, the proposal being pushed by Majority Leaders Sen. Casey Crabtree, R- Madison, and Rep. Will Mortenson, R-Pierre, would allow counties to implement a surcharge of $1 per foot of pipeline that is within the county’s borders. That’s one of the main selling points of the bill that also includes protections for landowners in exchange for preemption of any restrictive county zoning regulations targeting carbon pipelines.
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According to Crabtree, the counties being able to tax linear pipeline feet could lead to an extra $3.5 million a year flowing into their coffers.
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“This bill does not erode landowner rights or local control,” Crabtree said. “It sets standards in state law for linear utility projects to abide by, specifically CO2 pipelines.”
Though the bill has support from business groups and lobbyists representing ethanol plants who champion it as a compromise measure, the meeting room was packed Thursday morning with familiar opponents, reminiscent of combative pipeline debates of years past.
That sentiment was no different for Summit Carbon Solutions, either. Brett Koenecke, a lobbyist for Summit, testified in favor of the bill despite heartburn about the potential county pipeline tax.
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“This project can’t move forward with local government discretion,” Koenecke argued. “There is no pathway for this project that involves discretion at the county level, they never had this discretion either… It didn’t seem fair to get up as an opponent and take their time, but I sure thought about it.”
Pipeline and eminent domain opponents remain unswayed.
“This is not something we want to invite into the state of South Dakota,” said Amanda Radke, a landowner rights advocate. “The devil is in the details on this… This strips away local control and governance. This isn’t about a project or opportunities in agriculture.”
The topic of local control and the status of federal litigation dominated the conversation — while supporters of preempting counties argued that it was coming regardless because of federal guidance, opponents suggested that isn’t as clear cut.
In Iowa, a federal judge recently barred two counties there from enforcing local ordinances that sought to restrict the placement of pipelines. That case is pending appeal with the Eighth Circuit Court. A decision would be binding in South Dakota, but could end up being appealed to the U.S. Supreme Court.
“I’m not a lawyer, but I can count,” said Jeremiah M. Murphy, lobbying on behalf of landowners for eminent domain reform. “By my count, there has been one federal district court decision that supports the proponents’ views that the counties have no role in this… This is hardly settled law.”
But arguments about the urgency of giving the pipeline project regulatory certainty won the day. Representatives from the ethanol industry suggested they would look at making a move out-of-state should they not be provided clarity on the topic this legislative session.
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“There is a timeliness issue with addressing this,” said Sen. Lee Schoenbeck, R-Watertown, after motioning to move the bill to the Senate floor with a do-pass recommendation. “I think this is about trying to bring order to projects like this in South Dakota.”
SB 201 includes an emergency clause that would require two-thirds approval from each legislative chamber.
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Brent “B.R.” Hoffman, R-Hartford, and Sen. David Johnson, R-Rapid City, cast the only votes against advancing the bill.
Schoenbeck and Crabtree were joined by Sen. Steve Kolbeck, R-Brandon; Jim Stalzer, R-Sioux Falls; Sen. Arch Beal, R-Sioux Falls; Sen. Reynold Nesiba, D-Sioux Falls; and Sen. David Wheeler, R-Huron; in voting yes.