Should state pesticide licenses remain free for South Dakota counties and municipalities?

Capitol News Bureau
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PIERRE, S.D. (KELO) — State lawmakers took a pause Thursday on the Noem administration’s plan to raise prices for pesticide makers and applicators in South Dakota.

A key piece of SB 24 would remove the licensing exemption for governments. Thousands of people could be affected.

Lobbyists for Pennington County, the South Dakota Association of County Commissioners and the South Dakota Municipal League want it to stay.

Senator Gary Cammack, a Union Center Republican, put the bill on hold until Tuesday. He chairs the Senate Agriculture and Natural Resources Committee that is considering the bill.

The state Department of Agriculture’s budget director, Chris Petersen, said the difference would be in the range of $40,000 to $50,000.

The department considers the change a necessary part of updated training for license holders.

Petersen said the pesticide regulatory fund was running at a loss, as a result of more drift complaints the past two years, and the pesticide recycling fund has used up nearly of its surplus.

Petersen said the two funds don’t have other sources of revenue: “They cannot be used by the Department of Agriculture for any other purposes.” He said the department manages “dozens of funds” the same way.  

Senator Deb Soholt, a Sioux Falls Republican, said the exemption should remain. She offered an amendment to keep it.

Governor Kristi Noem, who served eight years as South Dakota’s one member in the U.S. House of Representatives, and state Agriculture Secretary Kim Vanneman are former legislators from rural counties with small populations. Soholt lives in the city with the most people in South Dakota.

South Dakota had an estimated 884,659 people on July 1, 2019, according to the U.S. Census Bureau. There wasn’t a 2019 estimate shown for Sioux Falls; the city’s estimated population July 1, 2018, was 181,883.

“This is a cost shift to another governmental agency,” Soholt explained about why she didn’t want the government-exemption repealed.

Soholt said the department could capture the money elsewhere in the program’s administration. Without the exemption, Soholt said she couldn’t support the bill. 

The exemption reads, “The secretary of agriculture shall issue an applicator license to government employees without a license fee. The fee exempt license is valid only when the applicator is applying pesticides in the course of employment for the governmental entity.”

Senator Bob Ewing, a Spearfish Republican who’s running for the Lawrence County Commission, backed her opposition to making governments pay.

“I too do have heartburn with it,” Ewing said “I can support the bill if we can do this amendment. Otherwise I’d probably be a no on the bill.”

Here’s a snapshot of fee increases proposed in SB 24:

Pesticide registration would go up $40, from $120 to $160 per year for each pesticide. The increase would be evenly split between the two funds. There are about 11,000 pesticides registered in South Dakota.

A private-applicator certification would go up to a maximum of $25. The fee currently is capped at $5, but the department doesn’t charge it. Taya Runyan, director of agricultural services, said the federal Environmental Protection Agency is working on requirements and the state department wants to see what its costs will be. Then the department will propose a rule on the amount, Runyan said. The certificate would be valid for three years; currently it covers five years.

A commercial-applicator license would go up $10, from $25 to $35. This is the group that currently receives the government exemption.

A pesticide-dealer license would go up $25, from $50 to $75.

Here are the annual revenues and expenses for the two funds during the past four fiscal years. Note that ending equity — the reserves — fell each year for each:

Pesticide regulatory fund

2016: Licenses, permits and fees $414,893.62. Expenses $431,475.72. Ending equity $342,544.79.

2017: Licenses, permits and fees $342,052.58. Expenses $342,052.58. Ending equity $282,243.86.

2018: Licenses, permits and fees $381,086.07. Expenses $401,954.13. Ending equity $271,414.73.

2019: Licenses, permits and fee $240,280.02. Expenses $523,349.13. Ending equity $(1,840.72).

Pesticide recycling and disposal fund

2016: Licenses, permits and fees $302,663.10. Expenses $342,127.56. Ending equity $393,849.34.

2017: Licenses, permits and fees $263,234.46. Expenses $317,759.76. Ending equity $380,902.23.

2018: Licenses, permits and fees $273,782.99. Expenses $345,646.34. Ending equity $369,460.37.

2019: Licenses, permits and fees $148,330.71. Expenses $421,019.06. Ending equity $96,772.02.

Source: Report to Legislative Research Council on Agriculture Department special revenue.

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