S. Dakota lawmakers approve lab update funding

Photo courtesy South Dakota Animal Disease Research and Diagnostic Laboratory

The South Dakota state legislature has approved funding proposals to enhance and update the Animal Disease Research & Diagnostic Laboratory (ADRDL).

The state’s only animal health laboratory was built in 1967 and updated in 1993; however, new upgrades and expansions are desperately needed in order to meet today’s animal health, biosafety and environmental safety needs.

The South Dakota House of Representatives voted 60-6 for HB 1157, which establishes a specific fund to pay for the lab and other future ag development needs within the regental system or the state’s technical institutes. Meanwhile, the South Dakota Senate approved SB 172 (29-6), which authorizes expenditures from the fund to pay for the ADRDL. At press time, the bills were headed to Governor Daugaard’s desk for a signature.

“Given the recent outbreak of tuberculosis in a beef cattle herd in the state, there is a sense of urgency to update the lab to improve the safety for the workers and enhance the technician’s abilities to handle these emergencies as they arise,” said Jason Frerichs, Minority Whip. Party Democrat Term Incumbent District 01 and farmer/rancher from Wilmot, S.D. “Using property tax relief dollars, it amounts to less than 20 cents per acre.”

“Given the recent outbreak of tuberculosis in a beef cattle herd in the state, there is a sense of urgency to update the lab to improve the safety for the workers and enhance the technician’s abilities to handle these emergencies as they arise.” Jason Frerichs, minority whip

The ADRDL upgrade is supported by several agricultural groups including the South Dakota Pork Producers Council, South Dakota Farm Bureau, South Dakota Cattlemen’s Association (SDCA), South Dakota Association of Cooperatives, South Dakota Dairy Producers, South Dakota Poultry Industries Association, South Dakota Conservation Districts, South Dakota Soybean Association, South Dakota Grain & Feed Association, South Dakota Veterinary Medical Association and South Dakota Auction Markets Association.

“Finding a path forward for the proposed upgrades and expansion of the ADRDL has been SDCA’s top legislative priority for 2017,” said Jodie Anderson, SDCA executive director. “In these last days of session, it appears we have found a funding mechanism to keep the project moving forward to provide state of the art research and diagnostic capabilities for our state’s livestock industry, which has an economic impact of more than $8.5 billion in South Dakota. Having this lab modernized so it can continue to serve not only the livestock industry, but also wildlife and domestic animals, is key to ensuring the health and welfare of our animals and also providing human health assurances.”

The anticipated cost of the project is $58,639,637 and includes two phases. Phase one will add 80,763 square feet of laboratory space, including 3,762 square feet of biosafety level 3 space and biosafety level 2 enhanced necropsy space with equipment, containment technology, decontamination areas, airlocks and sterilization areas to safety and rapidly test samples which may contain highly contagious pathogens. Phase two will renovate the existing laboratory space to accommodate research needs.

The ADRDL project will be funded through multiple streams including: a one-time funding of $6,000,000 from SDSU and ADRDL; a one-time funding equaling equaling $2,600,000 from the Livestock Disease Emergency Fund and Animal Remedy Fund; and a $50.1 million bond set for 25 years at 4.0 percent interest, including 3 percent authority fee, with $3,303,209 per year needed to pay off the bond.

The state’s elected officials voted and approved another funding source in the way of redirecting agricultural property tax relief from the half-cent sales tax increase from 2016. The agricultural property tax offset will equate to $3,350,000 per year and will serve as revenue for the bond payment.

While many agricultural groups are on board with this funding plan, there are some that question why the state’s producers should be the ones footing the bill.

“I’m not opposed to expanding and modernizing the lab, but I think the money should come from the state instead of agriculture,” said Bill Kluck, South Dakota Stockgrowers Association president. “Agriculture is largely paying for the lab, and if we look at the uses for the lab, it applies to much more than livestock. The lab is used for both human and animal health, including things like avian influenza and rabies testing. Other states have funded their animal health labs entirely out of their state’s budget. I feel South Dakota is asking too much of the state’s farmers and ranchers, especially considering that agriculture markets are in the tank right now. As an organization, we have supported the lab, and we have even supported the funding through the property tax; however, we do not feel it should be an ongoing thing that could be used for other facilities down the road.”

While South Dakota isn’t the primary funding source for the proposed laboratory updates, the facility does receive ongoing support from the state.

“As for state support, ADRDL currently gets more than $1.7 million annually in state general fund support,” said Nathan Sanderson, Policy and Operations director for Governor Daugaard. “Further, state general funds paid for most of the annual bond payments that just ended from the 1993 update/expansion. The state also contributes additional funds for operations and maintenance. Very often, the cost to construct a facility pales in comparison to the cost of operating and maintaining it. Building and maintaining this important facility is a team effort,

and I am optimistic that we can find a way to update and expand ADRDL.”

“South Dakota is in a budget year, still $25 million short,” added Frerichs. “If we want this library expansion and update to happen, as an industry, we had to take action. I give a lot of credit to the lab and South Dakota State University for managing the lab and carefully putting money aside from fees that will go straight back into this project.”

The state is also currently evaluating proposals for ongoing ADRDL operations funding, which would total $779,100 per year. This funding would come from commercial pet food fees, speciality pet food fees, animal remedy exemption repeal, and animal remedy fees.