South Dakota legislation provides economic development opportunities
With a comprehensive economic development package signed into law March 25, the South Dakota legislature sent a strong message to the wind energy industry that it values wind development, according to a news release from the South Dakota Wind Energy Association (SDWEA). The new legislation, the group said, "combines an enhanced business environment with South Dakota’s premier wind regime, low taxes, quality work force and wind project 'buildability.'"
“Building South Dakota” is the name of the "historic, bipartisan package," SDWEA said, adding that it took effect April 1 to position the industry to take advantage of the construction season and the extension of the Production Tax Credit.
The broad-based package of economic and community development tools is intended to be of benefit to all corners of South Dakota, rural and urban. Wind energy in particular is an industry sector that is positioned to take advantage of the provisions of SB 235. Projects of over $20 million will be eligible for “reinvestment payments” that can equal up to the 4 percent state sales and use tax paid on project costs.
“The ‘reinvestment payment’ process was updated and made more effective for investments that might not otherwise have happened in South Dakota, but for the reinvestment payment,” said SDWEA Executive Director Ron Rebenitsch. “This mechanism takes out the one 'sting' from South Dakota’s otherwise business-friendly tax climate, which does not tax corporate or personal income and provides more business certainty early in the decision process of project development.”
Some of the other highlights of the plan include:
– Tools to support expansion of current businesses within South Dakota
– A Housing Opportunity Fund, which is designed to provide additional financial mechanisms to assist communities with affordable housing development across the state
– Investments in workforce education programs, such as Limited English Proficiency for K-12 students, and secondary career and technical education
Overall, SDWEA said, the package will be very beneficial to communities of all sizes, as well as industries of all kinds, including wind, alternative energy, biotechnology, data centers, manufacturing, energy production and transmission, value-added agriculture and other industries targeted by the State.
Because of the historic, bi-partisan legislative leadership role in shaping this package, a special appropriation of $7 million in one-time funding was made available to Building South Dakota to “prime the pump” and get the system working across the state as soon as possible.
Effective April 1, state agencies, including the Governor’s Office of Economic Development, Department of Education, and South Dakota Housing Development Authority, were charged with implementation of various parts of the package.