Committee on Appropriations A/V — 2019

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Mr. Travis Dovre, Finance Officer, Office of the Governor, presented FY20 Budget as recommended by the Governor00:06:17
The Office of the Governor FY20 Budget Request is as follows: $2,394,457 in general funds for the Office of the Governor, $75,000 in general funds for the Governor's Contingency Fund, and $35,808 in general funds for the Lt. Governor, $0 in federal fund authority, and $0 in other funds totaling $2,505,265 and includes 22.0 FTE - Page 2.00:06:30
Prior and Current Year Budget Recap - There were 3.8 unutilized FTE and $88,457 in personal services reverted to the general fund. Several personnel found other employment since Governor Daugaard's term was about to end.00:08:14
Senator Cronin - question - do you have an indication how many staff will be employed at Governor Noem's Office and will the number of FTE change00:09:05
Representative Howard - question - did the transfer of $88,026 settle all debts owed to the Federal Department of Health and Human Services00:09:55
Representative Hunhoff - question - what is the history of the $88,026 transfer, who conducted the audit that caught this error, and requested additional information from Mr. Dovre00:10:47
Commissioner Gary Hanson, Public Utilities Commission (PUC), introduced PUC members, staff and made the FY20 Budget Request as recommended by the Governor.00:12:55
The PUC Commission made a FY20 Budget Request of $583,641 in general funds, $242,996 in federal fund expenditure authority, and $3,992,797 in other funds totaling $4,819,364 and includes 31.2 FTE.00:13:37
Commissioner Hanson, PUC, gave a general overview to the Committee on Joint Appropriations.00:14:23
The PUC regulates electric, natural gas, telecommunication companies, grain warehouses, grain dealers, public storage warehouses, intrastate pipeline safety, excavation activities, and represents the state at large.00:15:42
South Dakota One Call - This is a division run by the Governor appointed board and is a central notification center for 811 phone calls. The PUC provides legal assistance for the One Call Division.00:20:35
The PUC will host a legislative meeting on January 16, 2019 at 4PM to explain what the agency does.00:22:09
Public Utilities Commission Budget Request - Legislative Research Council Budget Brief- The PUC requested an additional $9,354 from the previous year. - Page 200:22:47
Different Types of PUC Revenue- The largest revenue source for the PUC is from gross receipts tax. Other revenue sources include the filing fee fund, pipeline safety fees, grain warehouse fees, and telephone solicitation fees. 00:23:10
Public Utilities Commission Graph - Legislative Research Council Budget Brief - Sources of Funds are general funds 12%, Federal Funds 5%, and Other Funds are 83%. Commissioner Hanson previously explained what constitutes other funds. - Page 100:24:57
Legislative Research Council Budget Brief - The net general fund budget request of $9,354 is for the One Call Program. - Page 200:26:40
Senator Cronin - question - how does the One Call Fund work and how does is it generate revenue00:27:48
Mr. Larry Janes, Executive Director of One Call, explained how the One-Call Center works and if a 811 location request is made, the PUC charges $1.05 to the local utility company.00:28:24
Senator Cronin - question - how is the estimated $1,000,000 One Call Center funding used00:29:01
Senator Cronin - requested more detailed budget information for the One Call Program 00:30:21
Representative Hunhoff - question - how do you evaluate if the One Call Program is working and how do you track information when One Call was not contacted resulting in a utility problem00:31:25
Representative Hunhoff - requested additional information how many times One Call wasn't contacted and when there was a subsequent utility problem00:33:25
Representative Post - question - do you track whether a utility company marked the ground after making a request 00:34:35
Senator Wiik - question - is there any way to reach out to people who don't have access to an excavation company00:35:10
Senator Nesiba - question - are you having any trouble retaining employees in the PUC00:37:05
Commissioner Hanson explained the PUC has the lowest number of FTE than any other state except one in the nation. The South Dakota PUC also regulates grain warehouses. The South Dakota PUC has difficulty competing with the private sector to retain employees.00:37:42
Representative Howard - question - why did the PUC have 31.2 FTE and are all these FTE utilized including the .2FTE00:39:40
Senator Cronin - question - what year was grain bin legislation passed or policy changed and what has happened since these policy changes00:40:46
Senator Cronin expressed concern if enough grain inspections are occuring and requested an update00:43:14
Representative Hunhoff - question - why has there been an increase in personal services and benefits in the grain warehouse fund00:45:43
Representative Hunhoff - question - do you operate like other agencies in providing state benefits to employees00:46:50
Senator Greenfield - question - how does the Do Not Call Program work in the State of South Dakota and are there state expenditures in this area00:47:08
Ms. Cindy Kemnitz, Finance Manager, PUC, responded and explained the states charges fees from telephone solicitors and can use these funds for the Do Not Call Program00:48:45
Senator White - question - was there an unusual amount of oil that spilled near Amherst, South Dakota, was there compensation made, and how was the spill detected00:49:33
Senator White - question - was there a detection device in the pipeline system and is it the State of South Dakota's or federal government's responsibility to monitor these detection systems00:51:45
Senator White - question - does the State of South Dakota need to regulate these pipelines or is it a federal responsibility. Senator White stated a large amount of oil came from this break.00:52:45
Senator Nesiba - question - what is the timeline to implement the Keystone Pipeline and are there controls in place to prevent future oil spills00:54:00
Senator Nesiba - question - what controls are in place to prevent future oil pipeline leaks and what is the policy to deal with these spills00:55:08
Representative Karr - question - referring to Pages 5 & 6 of the Legislative Research Council Document - PUC - Other Funding Sources - Budgeted, Grain and Warehouse Fund, Gross Receipts Tax Fund, Pipeline Safety Account, One-Call Notification Fund, and PUC Regulatory Assessment Fee Fund00:57:50
Representative Karr - question - how many oil spills have occurred in the past two years and what is the industry standard to be expected01:01:03
Commissioner Hanson, PUC, responded that there are average of two oil spills over ten to fifteen years and the two oil spills in the past year were two too many01:01:25
Ms. Kristen Edwards, Legal Services Staff Attorney for PUC, will provide additional information to Representative Karr at the Legislative meeting with the PUC at 4PM. on January 16, 2019.01:02:40
Representative Howard - question - would you explain the federal fund and other fund reversion authority for FY18 on Page 6 of the PUC Budget Brief01:03:12
Senator Cronin - question - are the FY18 funds that were reverted an actual check written to the federal government or was this just federal fund reversion authority and requested additional information01:05:32
Commissioner Hanson explained Page 9 - Performance Indicators - Dockets Opened and Closed, Grain Warehouse Licenses and Inspections, and Pipeline Safety Inspection data, and One Call incoming and outgoing notifications processed.01:07:22
Commissioner Hanson stated that the Public Utilities Commission reviews their agency to maximize cost savings and for FY20 only needed an additional net $9,354 in federal fund expenditure authority.01:09:22
Commissioner Ryan Brunner, School and Public Lands, presented the FY20 budget as recommended by the Governor01:10:44
Commissioner Brunner, School and Public Lands, introduced staff and gave an overview to the Joint Committee on Appropriations.01:10:52
The School and Public Lands Budget request for FY20 is $563,210 in general funds, $0 in federal fund expenditure authority, and $325,295 in other fund expenditure authority and includes 6.0 FTE. This has not changed from FY19.01:12:40
School and Public Lands Office History - Page 201:14:38
Over 2,800 leases and 764,664.361 acres of land are managed by School and Public Lands01:16:28
Surface Division - Surface Revenue by Land Class - Total Revenue $8,140,863.62 - Page 301:17:14
Representative Hunhoff - question - please give an update if the Star Academy and Plankinton facilities have been sold and what were the terms. Commissioner Brunner would provide additional information.01:22:00
Senator Maher - question - does the surface division include mineral rights and was all the Plankinton land sold01:23:27
Representative Post - question - are all land leases renewed annually or are they on a revolving rotation01:24:33
Surface Division Highlights - Graph-Record year for surface revenue of $8.14 million dollars up from $6.65 million dollars - Page 401:25:35
Surface Division Continued - Animal Unit Month (AUM) - List - Year 2018 - $19.38 up from the Year 2011 - $11.07 - Page 501:26:45
Commissioner Brunner indicated the AUM rate will change in 2019 and would provide the committee the new AUM once it has been determined01:28:00
Commissioner Brunner indicated SB 33 is being introduced to sell School and Public Lands that don't have public or water access and purchase other land.01:29:40
Senator Maher - question - if a rancher has a bidding war during an auction how long does the highest AUM rate last01:30:30
Commissioner Brunner says the State of South Dakota has royalties on 65 oil wells in northwest South Dakota01:31:23
Mineral Division - Mineral, Oil, and Gas Revenue - $1,443,850.35 - Page 601:31:37
Commissioner Brunner will be introducing House Bill 1030 to have oil and gas auctions online and indicated this would result in an increase of revenue since big corporations would find these opportunities on The State of South Dakota will potentially raise more mineral, oil, and gas revenue.01:34:00
Commissioner Brunner said oil and gas royalties are cyclical.01:36:08
The Permanent Trust Fund is managed by the State Investment Council.01:36:49
Oil and Gas Royalty - Graph - Year 2018 generated $1,396,563 which is down from Year 2014 revenue totaling $3,897,065 - Page 701:37:06
Permanent Trust Fund - The constitutional amendment from the year 2000 allowed School and Public Lands Office to adjust for inflation and invest in stocks through the South Dakota Investment Council - Page 801:38:00
FY18 the Permanent Trust Fund is $302.2M01:38:09
Asset Growth - Permanent Trust Fund - Chart - Page 901:38:45
Representative Karr - question - would you explain the growth of the Permanent Trust Fund and how has inflationary adjustment impact this fund01:39:52
Representative Hunhoff - question - where do the Human Services Center funds originate01:42:26
Dollars to Education - K-12 Schools in FY19 - Total Revenue earned through School and Public Lands - $12,112,217.21 - Page 1001:43:17
Commissioner Brunner commented a bill will be introduced to House, Commerce, and Energy to conduct wind and solar leases on school and public lands01:44:26
Senator Greenfield - question - how much income will be generated from wind energy and how will this revenue be distributed to state government01:46:09
Dollars Returned to Universities - $1,822,734.11 - Page 1101:48:04
Dollars Returned to Endowed Institutions - $818,938.88 - Page 1201:48:40
Senator Greenfield - question - what is the difference between SDSU Experimental Station and SDSU Experimental Station In-Kind Use of Land (referring to list on Page 12).01:50:20
FY18-19 School and Public Lands Revenue Outlook - Total K-12 and Endowed FY17 $12,606,478.75 and FY18 $13,924,120.15 - Page 1301:53:01
State Owned Dams - 99 State Owned Dams fall under School and Public Lands - Page 1401:54:56
Commissioner Brunner says the State of South Dakota manages the maintenance and repair for these 99 dams01:55:45
Commissioner Brunner says Bednar Dam, Campbell Dam, Elm Lake Dam, and Richmond Dam are high risk or Category 1 dams and referred to other dams in communities such as Leola and Oseola. - Pages 15-2001:58:39
Commissioner Brunner, School and Public Lands, responded by referring to the list of 99 dams of which 15 are high or medium risk which require additional attention.01:58:46
Representative Karr - question - what constitutes a Category 1, 2, or 3 Dam01:59:43
Elm Lake - Senate Bill 34 - There wil be a special appropriation to replace this dam which is estimated to cost $1,521,403. The cost to the State of South Dakota will be $521,403 and all other costs will be shared with City of Aberdeen and other funding partners - Page 2102:01:30
FY18-19 School and Public Lands Recap - Summary - Page 2202:02:45
Land Sale Update - Historical Society Property, Hot Springs/State Vets Home, Plankinton Hayfield, Huron Exchange Part Two, and Western Dakota -Tech/Ellsworth Transfer - SB 40 - Land Acquisition - Gildt Edge Mine - Page 102:03:30
Representative Howard - question - were there any other additional bids for the Gildt Edge Mine in Lawrence County02:09:15
Commissioner Brunner indicated there were a couple of additional bids to bump up the sale from $904,000 to $916,00002:09:28
Commissioner Brunner gave updates on Land Sale Bills Pending Legislative Approval02:09:29
Land Sales Update (Continued) - Mead Building, Hot Springs - State Veterans Home Surplus Land, Board of Regents, School for the Deaf, Watertown Railroad Property, South Dakota State University Brookings Land, Former South Dakota State University West River Agriculture Center - Page 202:10:36
2018-2019 Land Sale Bills Pending Legislative Approval - Senate Bill 44 -SDSU Volga Appraised Value - $1,532,000, SDSU Highmore Appraised Value - $400,500, and SDSU Box Elder- Appraised Value - $260,000 - Page 2 02:14:18
Commissioner Brunner indicated the Department of Environment and Natural Resources will be able to answer this question02:16:13
Senator Maher - question - how much does the bankrupt company Spyglass owe the State of South Dakota for past production since the company went bankrupt02:16:29
Senator Maher - question - does the State of South Dakota have the responsibility to clean up public land used by the company Spyglass02:17:25
Representative Karr - commended Commissioner Brunner for his work with School and Public Lands02:20:20
Announcements - Senator Wiik indicated the PUC made comments that were incorrect about oil spills and would provide additional information 02:23:03
Adjourn - White/Kolbeck02:23:57

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