Each year there are a few issues that headline the legislative session. Without question, how we fund the Animal Disease Research and Diagnostic Lab (ADRDL) will be one of those headlines. At the present there is still roughly $58 million yet to be funded to complete the ADRDL project. There are currently three different proposals to reach that funding target for the ADRDL.
These bills are:
House Bill 1157- Sponsors: Representatives Qualm and Haggar. Senator Greenfield (Brock)
Senate Bill 162 was the first of the three to be heard before committee in Joint Appropriations on Thursday. The funding method provided in SB 162 (in its current form) takes monies only from existing funds. It WOULD NOT raise the taxes and fees included in the proposal from the Governor's Office.
The funding break down in SB 162 would be as follows:
60% of the remaining costs from the Revolving Economic Development Initiative (REDI) fund. Roughly $35 million
The remaining 40% would be bonded over 25 years and paid by applying 10% of the farm machinery excise tax to the ADRDL fund. Roughly $25 million
Why 10% of the farm machinery excise tax? This was a proposal by SDFU in testimony on Senate Bill 105. See that post here. That number is equivalent to (actually slightly less than) the .5% increase that was applied to the tax last session to increase teacher pay. Keep in mind that this WOULD NOT take away from the teacher pay increase. Revenue collected from Amazon should offset the funds drawn from the machinery tax. However a property tax relief offset was also built into the teacher pay funding bill last year where commercial and residential properties received over $30 million in tax relief combined, while ag received $5 million in tax relief.
At the beginning of the committee hearing a manager's amendment was proposed to include the funding methods listed above. The committee accepted the amendment unanimously.
Senators Frerichs and Nelson testified in favor of SB 162, as well as South Dakota Farmers Union and South Dakota Stockgrowers. The Governors Office was the only opponent to the legislation, though the Board of Regents did clarify that they were originally opponents but their concerns were erased with the accepted amendment. All other ag groups were silent on SB 162.
The committee did not take immediate action on the bill. Instead the committee will hear testimony on all funding proposals and compare before they make their final vote. Stay tuned for more information.
For more information on the bill click the link below: