South Dakota lawmakers split on data center controls as compromise bills advance

Pierre — State lawmakers spent part of the week debating how much oversight and protection to require for large data-center projects, highlighting competing priorities between economic development and local stewardship.

At issue were several measures introduced this session after public concern about land use, water consumption and electricity demand. An unnamed House minority leader from District 10 said a short moratorium bill (House Bill "13 01") did not clear committee but was intended as a pause to allow study of long-term impacts. "It's about understanding large, and long term impacts to our power grid, our water usage, land and local taxpayers," the representative said.

Senate and House members acknowledged the economic case for data centers while pressing for safeguards. Senator Jamie Smith (District 15) and other lawmakers said they support projects that help small communities but want guardrails. Senate leaders reported two bills survived an early cutoff: a GOED reinvestment/contract certainty bill (cited in the briefing as "SB 3 29") and a separate measure described as a "data center bill of rights" (cited as "Senate Bill 1 35"), which was scheduled on the calendar.

Supporters of compromise bills say they aim to let communities benefit from jobs and tax base growth while giving developers predictable terms before they commit large investments. "Before they come and invest $10,000,000,000 they need to know what the playing field is going to look like," a Senate official said.

Opponents and some grassroots organizers have pushed for stronger restrictions or a moratorium, citing county-level gaps in zoning and worries about decommissioning costs. The House minority leader argued developers should be required to cover decommissioning and any costs if projects shut down, and said electricity is a cross-county issue that justifies state attention: "Electricity travels across the grid. It travels across county lines and I think that makes it a state issue."

Lawmakers also warned about duplicating or conflicting authority with agencies. Senator Malhoff (as referenced in the briefing) and others suggested the Public Utilities Commission already has processes — such as letters of credit — to ensure that large new customers contribute to infrastructure costs and that the Legislature should be careful not to supplant agency roles.

The bills face additional hurdles. Some members predicted a possible veto from Gov. Roden on measures they consider too restrictive or too generous with incentives; override prospects depend on whether two-thirds support can be found. Committee hearings and floor action scheduled in the coming days will determine whether the compromise path holds or further amendments are required.

Next steps: the GOED reinvestment measure and the Senate data-center bill remained on the legislative calendar; lawmakers said they will continue negotiating guardrails and agency roles as hearings proceed.