Despite Governor Noem signaling cooperation, industrial hemp legislation faces a steep climb

Capitol News Bureau
Governor Noem 1, Industrial Hemp 0: Senate Falls Short Trying To Overcome Her Veto

PIERRE, S.D. (KELO) — The legislation pre-filed Friday to decriminalize industrial hemp in South Dakota carries an emergency clause, meaning it would become law as soon as the governor signs it, rather than the traditional starting date of July 1 for new laws.

But even if HB 1008 gets the necessary two-thirds majority in each chamber to meet the threshold, a lot of hurried work in Pierre and in Washington, D.C., needs to get done for South Dakota farmers to be able to plant industrial-hemp seed into their fields this year.

The potential snag is Governor Kristi Noem says the program must pay for itself. Noem stopped the 2019 version of the legislation with a veto. But she said earlier this week, in her “Four Guardrails” announcement, she is now willing to let the legislation go through if it meets her conditions — and one is that it be self-supporting.

The 2020 legislative session opens Tuesday. House Republican leader Lee Qualm of Platte, who rode the Noem campaign bus during her final push past Democrat Billie Sutton in the 2018 election, is prime sponsor of the 2020 legislation. The current bill came from an interim committee that Qualm chaired.

It sets maximum fees of $350 for a license and $250 for an inspection. But in its current form, it assigns authority to the state Agriculture Department to establish the actual amounts. That means the department would have to hold a public hearing after the legislation becomes law.

Whatever state Agriculture Secretary Kim Vanneman decides would then go to the Legislature’s Rules Review Committee for clearance. The six lawmakers on the review panel don’t normally make decisions on proposed rules until after the legislative session ends. The final day of session this year is March 30.

The legislation also calls for the state department to prepare and submit a plan to the U.S. Department of Agriculture for approval. It’s not clear whether the fee-setting at the state level could occur before or after the South Dakota plan gets the federal government’s OK.

There is a possibility the Legislature could directly set the fee amounts, through an amendment covering the first year, and give the department rule-making authority for future years.

The governor distributed to lawmakers this week a worksheet showing her administration’s latest estimates on the costs to get the program going and to keep it running. They aren’t cheap.

The first-year costs call for $742,286 in general funds and $1,157,517 in other funds, mostly for adding new equipment, in the state Department of Agriculture, the state Department of Public Safety and the state Department of Health.

The ongoing costs are estimated at $349,697 in general funds and $1,243,084, mostly for 15 new positions. They include a program manager, a program assistant and one support person in Agriculture; two chemists in Health; and four Highway Patrol troopers, four port-of-entry employees, one evidence technician and nine seasonal inspectors in Public Safety.

That’s lower than numbers the governor previously talked about. But scratch-sheet math suggests South Dakota would need, to break even on the ongoing costs, some 4,000 to 6,000 license holders at $350 apiece, with the number of $250 inspections being the other variable.

There’s also a significant difference between the legislation and the governor on at least one other key point. The legislation calls for the Department of Agriculture to handle all regulations. Noem however said she wants the Department of Public Safety conducting field and roadside inspections.

They’ll have 37 days of session to work it all out.

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