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Noem and Jackley race to solve online sales-tax problem

The president has made a commitment to U.S. Rep. Kristi Noem that her bill requiring online sellers to collect sales taxes will be passed into law this year, Noem said Wednesday in Rapid City.

Meanwhile, one of Noem’s opponents in this year’s gubernatorial race, fellow Republican and Attorney General Marty Jackley, is seeking a U.S. Supreme Court decision that would achieve the same goal.

Whichever candidate succeeds first could receive credit for helping to capture millions of dollars in lost revenue for the state and for city governments. But if either or both fail, they could suffer blame for failing to deliver.

Noem, R-S.D., said she received a commitment from President Donald Trump during a recent meeting at the White House. She said the meeting also included Vice President Mike Pence, Treasury Secretary Steven Mnuchin and White House staffers Rick Dearborn and Marc Short.

“They all committed to me that we were going to get my bill passed in ’18 here,” Noem said. “I told them that I would remind them of that daily.”

Noem’s comments came during a meeting with about a dozen community leaders at Black Hills Bagels, one of two gatherings she organized in Rapid City to talk about the tax-reform legislation that she recently helped pass into law.

The focus during the Black Hills Bagels meeting turned to sales taxes when newly appointed state Rep. Michael Diedrich, R-Rapid City, asked Noem what she is doing at the federal level to help collect sales taxes from online retailers.

South Dakota depends on sales taxes to fund much of its budget for state government. But as sales have migrated from local stores to the internet, some online sellers who are based outside of the state have refused to collect sales taxes. The exact amount of the revenue lost annually by the state and cities is unknown, but Gov. Dennis Daugaard mentioned one estimate of $50 million last month during his budget address to legislators.

Legislators passed and Daugaard signed a law in 2016 that would require online sellers to collect sales tax, and litigation ensued with online retailers Wayfair Inc., and Newegg Inc. The state of South Dakota has asked the U.S. Supreme Court to consider the case.

Noem said Wednesday that she hopes to pass her bill, H.R. 2193, the Remote Transactions Parity Act, before the Supreme Court decides whether to intervene.

“If that gets taken up by the Supreme Court, we could be in a situation where people will say, ‘Well, we shouldn’t act on this while the Supreme Court’s deciding,’ and that does put us months into delay,” Noem said.

Jackley is representing the state in the court case. Like Noem, he was in Rapid City on Wednesday, where he met with local law enforcement officials and the media at the Public Safety Building to talk about his package of bills for the 2018 legislative session.

In a Journal interview, Jackley said Congress could have resolved the sales-tax issue with legislation anytime since at least 1992, when a U.S. Supreme Court decision stymied North Dakota’s attempt to collect sales tax from an out-of-state retailer. Jackley said he welcomes Noem’s effort to solve the problem legislatively, even as he attempts to solve it in the courts.

“I am supportive of that,” Jackley said of the legislation, “but again, I recognize that they’ve been talking about this since 1992, and we would need something to actually pass.”

Jackley also noted that Noem signed a legal brief, along with one other U.S. representative and four U.S. senators, that was submitted in November in support of the state’s petition to the Supreme Court.

Gov. Dennis Daugaard, who is term-limited after this year, is supportive of any solution that would require out-of-state online sellers to collect sales taxes. That’s according to Tony Venhuizen, the governor’s chief of staff, who spoke to the Journal by phone Wednesday.

“The governor just wants to see this fixed,” Venhuizen said. “If Congress is able to fix this, that would be great, and if the Supreme Court takes action to fix this, that would be great.”

Jackley said he could know as soon as next week whether the Supreme Court will take up the sales-tax court case. If the court accepts the case, Jackley said, he would hope to argue the case in April and receive a decision before the court’s summer break.

Noem said her bill has been blocked so far by Rep. Bob Goodlatte, R-Va., who has not allowed the bill to pass out of the House Judiciary Committee that he chairs. Noem said she is considering “nuclear options,” such as a maneuver known as a discharge petition, to force the bill onto the House floor.

“I think with the president’s help and the vice president’s help, we won’t have to utilize that, but that’s always on the table,” Noem said, “and I’ve informed all of my leadership and the White House that those are all options I’m looking at.”

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Giving Christmas trees new life

The holidays are over, and now it's time to take down the decorative lights and toss out the Christmas tree. 

If you're still looking for a place to dispose of your tree, consider recycling it. The Rapid City Solid Waste Division is collecting Christmas trees through Jan. 19. Residents are asked to deliver the trees without plastic bags, ornaments or lights to one of the satellite drop-off sites at West Boulevard North and Fitzgerald Stadium.

There is also a new Citizen Campus 24-hour lighted and secured drop-off location at the entrance to the landfill on S.D. Highway 79 South. For more information, call 355-3496.

The trees are ground up and turned into compost, which is used in gardens, lawns and on the sides of hills. The compost is sold to the public year-round, according to Beth-Anne Ferley, sustainability coordinator for the Solid Waste Division. 

"All of our compost is good quality," she said. 

Christmas lights can also be recycled. Each year, the city usually collects between 10,000 and 11,000 pounds of lights after the holidays, Ferley said.

Discarded lights can be placed in designated Christmas light recycling containers at the following locations through the end of January:

• Ace Hardware: 1602 East St. Patrick St., 320 West Boulevard, and 1724 W. Main St.

• Family Fare Stores: 1516 East St. Patrick St. and 751 Mountain View Road

• Boyd’s: Baken Park 

• Rapid City Library: 610 Quincy St.

• CSAC Building: 300 Sixth St.

• Education Center: Rapid City Landfill, 5535 S.D. Highway 79 South

Residents who are unable to take their lights to one of the specific sites can place them in their blue recycling containers.

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Funding restored for stream gauges

Two stream gauges in the Black Hills that were controversially shut down in November following a decision by the West Dakota Water Development District to discontinue their funding will be back in operation in the coming months.

At the Pennington County Board of Commissioners meeting Tuesday morning, the board approved allocating $8,137 from its contingency fund to pay for the continuous operation of the gauge at Castle Creek and the operation of the gauge at Rhoads Fork during the “non-ice season.”

The approval came after a 4-1 vote, with Commissioner George Ferebee voting in opposition.

In a Journal interview Wednesday, Pennington County Emergency Management Director Dustin Willet estimated the gauges could be back in operation within 60 days once a contract between the county and the U.S. Geological Service is finalized. The "non-ice season" constituted about three months of the year, he added.

In the past, USGS and the water development district have partnered to fund the operation and maintenance of the two gauges, with the USGS shouldering $11,725 of the annual burden and the water development district contributing $14,785, for a total budget of $26,510. The cost-sharing model is standard practice for the USGS, which partners with various private and public partners at the local, regional and state levels to operate gauges across the nation. USGS staff is responsible for the gauge’s routine operation and maintenance.

But beginning in May last year, the water development district began considering cutting their funding, eventually deciding in a fourth and final vote in October to cease its annual contribution for the gauges’ operation. In November, the gauges were shut down.

On Wednesday, Richard Bell, chairman of the Black Hills chapter of Dakota Rural Action, pleaded with commissioners to pick up the slack.

“We’re out begging,” Bell said. “We’re going to talk to the city next. We’re going to talk to as many people as we can to try to get this funding back, because we think it’s important for the public to have the data available.”

Both gauges record stream-flow data as part of a broader network of dozens of gauges in the Black Hills. The data produced by the network is used for purposes including the management of water flows and the detection of potential floods.

Located just west of Deerfield Lake, the Castle Creek gauge has been in operation for more than 69 years while the Rhoads Fork gauge, which rests on a tributary above Pactola Reservoir, has been in operation for the past 36 years.

The gauges consist of underwater equipment that feeds data to a small shack and then to a satellite. The data is then used for a variety of purposes by Pennington County Emergency Management, the National Weather Service, the South Dakota Department of Environment and Natural Resources, the city of Rapid City, fly-fishing groups, the South Dakota School of Mines & Technology, the Rapid Valley Irrigation District and others.

Ferebee, who has been accused by critics of working to stack the water district’s nine-member board with conservative political allies in an effort to insert politics into a board intended to protect and manage the area’s water resources, offered no comment during the item’s discussion.

But Commissioner Deb Hadcock did, expressing disappointment that the county had to step into a matter that the water development district was created to address.

Commissioner Ron Buskerud, who originally requested information on the gauges at a Nov. 21 board meeting that led to the discussion and decision at Wednesday’s meeting, said his support for funding the gauges was based on Willet's and other experts' opinions on the issue.

“You never know you need it,” he said, “until it’s too late.”


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Ferebee appeals septic system conviction, gets new trial

A Pennington County commissioner convicted of violating a county zoning ordinance has been granted a new trial in May following his appeal.

George Ferebee, 77, a commissioner from rural Hill City, was found guilty in September of maintaining at his property a septic system that lacked an operating permit. The zoning ordinance states that on-site wastewater treatment systems need to be pumped, inspected and issued permits regularly.

Retired 4th Circuit Judge Warren Johnson, who tried the case, ordered Ferebee to pay a $200 fine at the end of a daylong trial on Sept. 25. The court earlier decided not to impose a jail sentence.

The following month, Ferebee paid the fine. He also appealed the 7th Magistrate Court conviction in circuit court.

His lawyer, Shawn Tornow, cited “errors of law that were committed prior to and/or at his trial in this matter,” according to Ferebee’s notice of appeal on Oct. 20.

Ferebee has since been scheduled a circuit court trial on May 16 and 17 at the Pennington County Courthouse, according to court records.

In cases involving the alleged violation of a county ordinance, South Dakota law gives defendants the right to appeal a magistrate court verdict in circuit court, as well as the right to a new trial in circuit court.

It's not yet been settled if it will be a jury trial or another bench trial, said Assistant Attorney General Robert Haivala, who is prosecuting the case. 

John Bastian, a retired judge of the 4th Circuit Court, was assigned to handle the appeal. Jerome Eckrich, a retired judge from the same circuit, was initially appointed but Ferebee’s lawyer requested a change of judge, saying he believes Ferebee cannot have a fair and impartial hearing under Eckrich. No reason was provided in Tornow’s Nov. 14 sworn statement.

Ferebee was charged in October 2015. He has asserted that he is exempt from the septic system ordinance because his land holdings total 250 acres — more than the 40 acres that qualifies for exemption. Ferebee says he has never subdivided the property since purchasing it 30 years ago.

The state argues that Ferebee's property is legally made up of four lots and that the septic system is on a 12.22-acre lot.  

During his sentencing, Ferebee said he believes the zoning ordinance is unconstitutional and that it retroactively changes the legal consequences of actions that were committed before the law was enacted. 

Ferebee is due back in court for a hearing on Feb. 27.

His term as county commissioner for District 1 ends Dec. 31, and he hasn't publicly announced whether he's going to run again. Ron Rossknecht, a real-estate appraiser and resort executive, declared in November that he is running for the District 1 commissioner seat in this year's election.

Journal file