Henry Carlson, the head of Henry Carlson Construction Co. of Sioux Falls, is scheduled to be at the Capitol for a meeting today with the Senate committee on taxation. The 87-year-old served two terms as a Republican senator from Sioux Falls in 1977-78 and 1983-84.

He is credited with designing South Dakota’s contractor excise tax that charges 2 percent on the gross receipts of all prime contractors engaged in real estate improvements. The tax took effect in 1979.

As lawmakers consider possible economic development incentives, the tax is seen by some as a possible target for relief. Last year, South Dakota voters rejected the governor’s plan to divert 22 percent of the tax receipts into a fund for grants to be made by the state Board of Economic Development as incentives for large projects.

The tax brought in nearly $65.7 million in fiscal 2011 and nearly $83 million in fiscal 2012. It is forecast to generate nearly $84.6 million in the current 2013 fiscal year that ends June 30. It is the third-largest source of state general-fund revenue after the state sales and use tax and video lottery.

It turns out that Gov. Dennis Daugaard promised tax refunds last year to Bel for the Brookings cheese plant project and to a filter-making company in Yankton, totaling an estimated $5 million. In Section 138 of House Bill 1060 this year, there is an amendment to the current year’s budget. It tells the state treasurer to transfer $5 million into the state’s Future Fund, which the governor controls for economic development-related grants.

The House committee on education, meanwhile, will be hosting state Education Secretary Melody Schopp for a presentation on her department. Returning as committee chairwoman is Jacqueline Sly, R-Rapid City. Her vice chairwoman is Jenna Haggar, R-Sioux Falls. They have nine freshman legislators on the panel.

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