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Bitcoin, gas and dams discussed by Appropriations

PIERRE, S.D. (KELO) — The South Dakota Legislature’s Joint Appropriations Committee met Wednesday morning, holding budget hearings with the Office of School and Public Lands (SPL), as well as the Public Utilities Commission (PUC).

SPL was represented at the hearing by Commissioner Brock Greenfield, Deputy Justin Nagel and other officials.

The SPL officials worked through a presentation outlining the revenues earned by the office, an explanation of payouts, and a breakdown of funds returned as compared to funds received.

On this note, the final slide of the presentation noted that in 2022, SPL returned $20.08 for every dollar of general funds received.

While questions for the SPL from the committee ranged, two primary topics stood out. The first was the issue of dams overseen by the SPL. Officials discussed the damage and subsequent repairs made to the Elk Lake Spillway after flooding in 2021, as well as the Richmond Dam.

In highlighting these dams, SPL also pointed out additional dams that are at risk, including the Wagner Dam and the Bednar Dam, both of which they asked the committee to keep in mind in the event that one-time funds should be allocated.

Sen. Bolin (R-Canton) noted that many of the dams in the state had been built in the 1930s, and questioned whether any were under SPL management which could be removed.

Mike Cornelius, a land agent for SPL, attempted to answer Bolin’s question, noting that in certain instances dams can and have been transferred to ownership by communities or property owners who would then be responsible for upkeep, but that ownership of high-hazard dams cannot be transferred.

Next came a discussion of the status of a crypto-currency mining operation set up in Harding County, where a Bitcoin ‘mining’ company took up leases on natural gas wells previously operated by Spyglass, which the company used to power the computers they use to produce Bitcoin.

Troubles were noted, however, due to the fact that the new operator of the wells owes back taxes to Harding County, which have not yet been paid. This fact prompted the Harding County auditor to text a member of the committee during the hearing to tell him not to allow gas leases to be reassigned until the back taxes have been paid.

Another issue with the gas wells in Harding County is that some have not been operated in five years, meaning that under state law, they must be capped. Several wells are still uncapped, and Greenfield was asked who was responsible for making sure they are closed.

Greenfield began by stating that the state Department of Agriculture and Natural Resources (DANR) is responsible for actually capping the wells, but also claimed responsibility for the process himself.

Sen. Jean Hunhoff (R-Yankton), the appropriations co-chair, asked staffers to ensure that DANR be made aware that they should be prepared to answer questions on the gas wells at a later hearing.

The hearing for the PUC went by quickly. Chair Kristie Fiegen represented the commission, which did not request a change in funding. In her presentation, she outlined staffing numbers, openings and retention, as well as the duties of the commission and the challenges they face, such as the rising cost to review filings.

Within the PUC testimony was a portion dedicated to SD811, which falls under the umbrella of the PUC, but is not controlled by the PUC. SD811 Executive Director Codi Gregg spoke for the organization.

The largest takeaway from the SD811 portion of the hearing is a desire from the group to move from the status of independent contractors to full-time employees. Such a change would likely result in those employees receiving full state benefits.

Another side-effect of such a move could be the relocation of SD811 from the PUC to another department, though it was unclear to Gregg or the committee members whether this could be accomplished with budgeting, or whether it would require a bill.

The committee recessed shortly after 11 a.m. and is set to reconvene Wednesday afternoon, at which point budget hearings for the Bureau of Finance and Management, the Governor’s Office, and the State Treasurer will be held.

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