Legislative will was not aligned with a bill intended to strengthen property rights for South Dakota landowners at the detriment of utility companies across the state.

The House Commerce and Energy Committee voted 8-4 on Friday to defer House Bill 1079, a bill that would have required pipeline and utility companies to obtain written consent from South Dakota property owners to access their lands for siting purposes, to the 41st legislative day, effectively killing it.

The bill was brought by Rep. Scott Moore at the request of rural landowners actively opposing a 2,000-mile, $5.5 billion pipeline being proposed by Summit Carbon Solutions, an Iowa carbon capture company. More than 400 miles of the five-state transmission pipe is planned to run through eastern and northeastern South Dakota if the project is completed.

Currently, persons or organizations with eminent domain authority are able to access private property to conduct land surveys or examinations with or without permission if certain criteria are met.

This includes:

• having an active siting application with the South Dakota Public Utilities Commission;
• providing 30-day written notice, including the filing and expected dates of entry, to the owner and any tenant in possession of the private property;
• and making a payment to the property owner, or provide sufficient security for the payment, for any actual damage done to the property by the entry.

But, under the proposed amendment, energy groups would have also needed to obtain written consent from landowners permitting access to their property at the scheduled date and time.

If all four criteria were not met, the PUC would have had to approve the energy project’s permit application for surveys to take place.

Pipeline and similar companies use the results from surveys and examinations to determine whether the lands along their transmission project’s route can safely and adequately host new infrastructure.

Proponents say bill offers a ‘common sense’ approach to survey access. Opponents argue amended law would have ‘chilling effect’ on utilities

The legislation had been touted as a necessary fix to South Dakota’s survey access laws by property rights advocates and landowners. It was also one of the first bills introduced this session that was created in response to Summit Carbon Solutions’ controversial surveys within the state for its carbon dioxide sequestration project.

“There’s still a pathway they can get there. Right now, it’s pretty much you can just show up. That ain’t the way to do business, but that’s virtually the way it works. It’s the way it’s been working for the past year or so,” Moore said, alluding to Summit Carbon’s surveys. “The property owners felt like they’ve lost all their rights and they stood and watched drilling rigs drill on their property with no easements. They want that right back.”

Mitch Richter, a lobbyist for South Dakota Farmers Union, urged the committee to support the bill. He argued other states already require companies to obtain written landowner consent to perform surveys, and the proposed legislation

“Nobody said [utility companies] couldn’t get a survey,” Richter said. “What [opponents are] saying is, ‘We’re going to have to jump through another hoop to do this.’ That hoop is letting the land owner or the tenant know that we’re going to be there in 30 days or 20 days, and that they’re responsible financially if something happens while they’re there. This is a common sense approach to fixing a problem that we have right now in South Dakota.”

The bill’s opponents, which largely consisted of utility companies currently operating in the state, took issue with the “chicken and the egg” situation they argued Moore’s legislation would present.

Darla Rogers, a lobbyist for South Dakota Rural Electric Association, told the committee the bill would convolute the process to build an energy facility in the state.

This, Rogers explained, is because if a landowner denies an energy cooperative’s request to access their land for surveys, the company would need to obtain a siting permit from the state PUC to examine the property. However, without the results of a route survey to provide to the regulatory body, the company would not be able to determine whether any issues exist with their proposed route in the first place.

This type of conundrum could have “a chilling effect on projects,” Rogers added.

Sam Nelson, a lobbyist for Missouri River Energy Services, levied an array of critiques at Moore’s bill, which he described as “too problematic to pass.”

Part of his comment to the committee centered on a section of the bill, which is already implemented in state law, that requires companies to provide a 30-day written notice to both the owners and tenants of the private property.

Under the amended law, Nelson said project developers would have a harder time communicating with property owners, who — barring a siting permit — could block survey crews from accessing their land outright.

This could then prevent the developers from identifying tenants along the route, given many farm leases between landowners and tenants “are not recorded,” Nelson claimed.

“The only way that I can find out who your tenant is, is by talking to you,” Nelson said. “When we provide notice or try to have dialogue with you, there are some folks that don’t want to talk to people who are doing surveys. I understand that. But it is a little bit impractical to try to make me try to find out who your tenant is when the only way that I may be able to find out is talking to you, the landowner.”

In a brief statement of opposition to the bill, Summit Carbon lawyer and lobbyist Justin Bell said the legislation would be a “kill shot” to projects in the state where siting surveys are required. He also said the proposed amendment would “adversely affect” his company’s pipeline.

Why was HB 1079 introduced?

HB 1079 was spurred by lawsuits filed by landowners in Brown, Edmunds, McPherson and Spink counties in 2022. The landowners sued Summit Carbon to prevent the Iowa company from accessing their property to conduct surveys to route their pipeline.

In May and June, Summit Carbon drew the ire of pipeline critics and some legislators after the company conducted surveys on lands belonging to rural South Dakotans without the property owners’ permission. This came after a South Dakota judge affirmed the company’s right to access in an April court order.

Landowners have since appealed the decision to the South Dakota Supreme Court. It remains to be decided whether the judicial tribunal will pick up the case, as Summit Carbon initiated a motion in December to have the case dismissed.

Bruce Rastetter, CEO of Summit Ag Group, Summit Carbon’s parent company, told Bloomberg in October the project would be delayed until early 2026. This news came a little more than a month after the South Dakota Public Utilities Commission unanimously denied the company’s permit application for their Midwest Carbon Express pipeline.