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Legislative panel breaks ‘piggy bank’ plan for water projects • South Dakota Searchlight [1]
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Date: 2025-03-04
A state House panel shut down a bill that would have created a place to set aside cash for water projects across South Dakota.
The bill earned the support of the state Senate, but floundered in front of the House Committee on Agriculture and Natural Resources on Tuesday at the Capitol in Pierre. It failed 10-3.
Senate Bill 202 would’ve created a water infrastructure development fund, but wouldn’t have put any money in it.
Several committee members worried aloud that simply creating a fund presents a risk of its use as an excuse to plan for projects before those projects earn the support of lawmakers.
Some committee members referenced the incarceration construction fund to make their point. That fund, set up three years ago and now worth more than $600 million, was created to fund a new prison. This year, lawmakers rejected the state’s plans to open up the fund for use in building an $825 million men’s facility in a controversial Lincoln County location.
Rep. Richard Vasgaard, R-Centerville, said he’s no longer certain that taxpayers trust the value of specialty savings accounts.
New Holland Republican and Committee Chair Marty Overweg, meanwhile, said previous legislatures had “built governmental monsters” by setting up such accounts.
“Now we’re having to feed them,” Overweg said.
Backer: We need a piggy bank
Sen. Helene Duhamel, R-Rapid City, did indeed bring Senate Bill 202 in hopes that future legislatures would feed it.
Her take, however, is that doing so would be a smart way to leverage federal dollars and protect South Dakotans’ access to clean drinking water. As envisioned, water infrastructure project managers would be able to request grants worth up to 10% and loans worth up to 50% of a project’s cost.
The idea would be for the fund – if lawmakers chose to put money in it – to earn interest and be large enough to match any federal dollars that might come available. With talk from the Trump administration of bumping up state and local governments’ share of funding in a range of areas, the state could benefit from such a setup, Duhamel said.
“We may, as a state and as local governments, need to come up with more money for these projects in the future,” she said, referencing changes at the federal level without mentioning Trump by name.
The state Department of Agriculture and Natural Resources opposed the idea from the start, though. The Board of Water and Natural Resources, which would distribute dollars from the fund, already has a process for requesting water project funding.
The bill creates a “carve-out” for projects to go around “an established process,” according to the department’s Andy Bruels.
Bruels told lawmakers the department oversees the disbursement of around $180 million in water funding through various channels each year. Federal COVID-19 pandemic relief added around $700 billion to those typical dollar amounts in recent years.
But Duhamel has argued that the rapid gobble-up of federal COVID relief dollars for water projects across the state over the past few years is proof that the state needs a “piggy bank” for water.
“Every year, everything we have is spent,” Duhamel said.
The bill’s supporters included an economic development lobbyist from Rapid City and a representative from Black Hills Energy.
Western Dakota project earns committee backing
Duhamel had pointed to large-scale water projects for South Dakota as proof of the need for a fund. Just after shooting down that idea on Tuesday, the ag committee endorsed one of those projects.
Senate Joint Resolution 501 asks lawmakers to agree with a decision by the state’s Water Resources Board to grant the Western Dakota Regional Water System’s permit for the use of Missouri River water in its pipeline plans.
The water allotment in the system’s pipeline application is large enough to trigger a clause in state law requiring legislative approval. The system wants to reserve 20,765 acre-feet of Missouri River water annually for use in 19 western South Dakota counties – nearly 7 billion gallons per year.
The system will take decades and significant federal investment to complete, ag committee members heard Tuesday morning, but all of it would hinge on SJR 501.
The committee sent the resolution to the House floor with a “do pass” recommendation on an 11-2 vote.
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