2026 Session Bills

Greetings, District 4,

We are preparing for the 2026 South Dakota legislative session. It begins with the Governor’s State of the State at 1:00 p.m. on January 13.

District 4 has had an active off-season. Applied Digital is proceeding with a data center near Astoria/Toronto. The company and others have conducted meetings nearly continuously since April, including site tours. I have attended or hosted over 17 public meetings on this topic. Your involvement is key to shaping our future-despite busy schedules, let's seize this chance to build prosperity. I grew up on a dairy farm and understand the demands of daily life.

As prime sponsor, I am introducing two bills that will drive real progress for our communities.

HB 1026 is a consumer protection measure. It establishes qualifications for "property data collectors," a new role in real estate and banking that is currently unregulated. Licensed professionals such as realtors, appraisers, and home inspectors have state requirements for insurance, education, and qualifications. Fannie and Freddie recognize property data collectors, but no public database exists for them. This bill provides basic oversight to ensure consumer trust and safeguard your homes and businesses. The bill text is available here: https://sdlegislature.gov/Session/Bill/26562/292106

HB 1005 is a tax bill that aligns South Dakota with over 35 states benefiting from the data center industry. I have collaborated with stakeholders from local residents to Google, investing over 300 hours in research. This is our opportunity to attract high-tech growth and create lasting economic strength. Data centers are integral to daily activities, including precision farming, bill payments, education, social media, and internet searches-we can't afford to fall behind.

Data centers and AI are established technologies powering the future. In 1976 at Hazel Elementary School, I used a terminal connected to a mainframe in Watertown, an early example of data center use. The industry has developed over decades, contrary to claims that it is new or unnecessary. Embracing it now will position South Dakota as a leader.

Meta, Facebook's parent company, plans to invest $600 billion over the next three years. Applied Digital has tenants prepared for additional projects. OpenAI and Microsoft's Stargate project is projected to cost over $500 billion for AI supercomputing infrastructure, with discussions of space-based data centers. With investments exceeding trillions from leading companies, the industry's viability is clear-let's harness this momentum for our state's advantage.

Concerns about electricity and water are valid, but solutions exist. Water usage in this region is minimal due to closed-loop cooling systems suited to the climate. It is limited to employee facilities and janitorial needs, less than an average household. Electricity consumption is high, but providers like Basin Electric have dedicated teams for data centers. All providers emphasize that the cost causer pays, similar to charges for new residential service. Data centers are familiar to utilities, and addressing these proactively ensures sustainable growth.

Applied Digital's project in Deuel County will add approximately $400 million to the assessed value, increasing the current $1 billion total without displacement. The projected property tax is $5.5 million annually. (Contact me for details from Deuel County's Director of Equalization and Vanguard.) This revenue enters the funding formula, with 58% allocated to public schools for teacher salaries, improvements, and student programs. (South Dakota's formula directs significant property taxes to education; the 58% may vary by district or year.) Imagine the impact: better schools, higher wages, and vibrant communities.

The state will collect sales tax on electricity sold to Applied Digital, estimated at $10 million per year initially and increasing over time. Much of this electricity is currently exported tax-free. Additional taxes will benefit counties and the state, fueling further investment.

The project will create 1,000 construction jobs and 200 permanent positions, which may present challenges but offer tremendous rewards. U.S. Census data shows Deuel County's 2023 payroll at $54 million. The 200 jobs average $65,000 annually, adding $13 million-a 24% increase. This excludes secondary economic effects. In a county with population decline from over 8,000 to under 4,500, this addresses opportunity shortages and reverses the trend-let's bring people back with jobs and hope.

HB 1005 is expected in the House Taxation Committee. The text is at https://sdlegislature.gov/Session/Bill/26317/291571. This bill affects the entire state and unlocks our potential. Contact me with questions or to show your support-together, we can make South Dakota thrive.

In the interest of full disclosure, I used my knowledge and more than a few data centers writing this.