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Bill

HB 1089

modify the distributions of revenues collected from severance taxation on new permits.

2026 Regular Session Introduced by Randy Deibert and 3 co-sponsors

South Dakota bill restructures how severance tax revenue from new resource extraction permits gets distributed among state funds and programs.

Signed by the Governor on 2026-03-30 H.J. 578
#minerals #taxation
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Bill Summary · HB 1089

Legislative bill overview

HB 1089 modifies how South Dakota distributes revenue collected from severance taxes on new permits. Severance taxes are fees imposed on the extraction of natural resources like minerals, oil, and gas. The bill changes the allocation formula for these tax revenues among state funds and potentially local governments.

Why is this important

Severance tax distribution directly affects state budget priorities and regional economies in extraction-heavy areas. How these revenues are split between general funds, education, infrastructure, and local communities shapes economic development policy and determines which programs receive dedicated resource-extraction-related funding.

Potential points of contention

  • Revenue allocation priorities: Different stakeholders (education advocates, local governments, general fund supporters) may compete for larger shares of severance tax revenue
  • Impact on extractive industries: Changes to tax distribution structures could affect permitting costs or competitiveness of South Dakota's resource extraction sector
  • Local versus state control: Disputes may arise over whether revenues should primarily benefit extraction-area communities or fund statewide programs

Compiled from official sources — confirm details with the bill’s official record.

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