Senate panel backs higher CAFO fees to cover permitting costs; industry largely supports bill

The Senate Appropriations Committee on Wednesday voted to give House Bill 10 21 a "do pass" recommendation after the Department of Agriculture and Natural Resources told lawmakers that existing fees cover only a fraction of the CAFO permitting program's costs.

Kent Woodmancy, director of the Division of Agriculture and Environmental Services at the Department of Agriculture and Natural Resources, told the committee the CAFO fee structure has not changed since the permitting program began in 1997 and now covers “approximately 5% of program costs.” He said the department has shifted staff and that recent budget reductions removed about $350,000 in general funds from the livestock services program.

"If this bill does not pass, the program will have to make cuts that will impact services to CAFO producers," Woodmancy said, explaining that the department conducts permit reviews, construction and compliance inspections, and complaint investigations and would like to increase on-site visits beyond the current three-year minimum.

The bill would update annual fees based on animal type and the maximum permitted number of animals, establish a $600 application fee for certain permit changes (with one free land-application addition per calendar year), and reestablish an administrative subfund to support permitting technology and program operations. Woodmancy said the changes were developed in discussions with producer groups and legislators and are intended to fund staff salaries and technology upgrades needed for permitting and data management.

Industry representatives who testified in favor described the fee increase as unwelcome but preferable to deeper cuts or federal oversight. Rob Schonsberg, a registered lobbyist for the South Dakota Pork Producers, said the group reluctantly supports the fee update and urged lawmakers to avoid shifting the program to federal control: "This is an industry fee. We're not particularly excited about it, but we really don't want the program to go away or, worst of all, be sent to the federal government."

Tayah Runyon, registered lobbyist for the South Dakota Cattlemen's Association, Matthew Bogridge for the South Dakota Farm Bureau, Brenda Forman for South Dakota dairy producers, and Angela Ehlers representing conservation districts all testified in support, saying the program helps protect water quality and that the department has worked with producers on the proposal.

Committee members questioned details including the frequency of inspections, why an annual fee rather than a one-time license, and whether smaller operations that sometimes trigger complaints would pay more under the new structure. Woodmancy said the department aims to inspect operations at least once every three years (the rules were set to require more frequent inspections than the federal five-year minimum) and that larger operations require more staff time and more complex nutrient-management reviews.

Senator Miss Gibbons moved a "do pass" recommendation; the motion carried on a roll call with six ayes and three nays. The bill will go to the full Senate with a do-pass recommendation.

Votes at a glance: HB 10 21 — Motion: "Do pass"; Mover: Senator Miss Gibbons; Second: Senator Zickmund; Vote tally: 6 yes, 3 no (Ms. Skimmons — Aye; Bill Howard — Aye; Carly — No; Boyda — Aye; Howard — Aye; Foster — Aye; Zickmund — Aye; Lapke — No; Otten — Aye).