PIERRE, S.D. (KELO) — Changes made to a South Dakota law earlier this year are forcing huge reductions in environmental reclamation bonds for some limestone mining businesses and in the process are causing heartburn among some members of the state board that regulates them.
On Thursday the South Dakota Minerals and Environment Board followed those revisions to state law and released a handful of large bonds that had been posted by two Rapid City companies. They totaled $294,500 for Pete Lien & Sons and $1,563,300 for Simon Contractors of South Dakota.
The companies mine limestone for use in concrete and other purposes. Their statewide bond amounts will now drop to $20,000 apiece until mid-2025 as a result of what the Legislature did.
Republican Sen. Randy Deibert introduced SB111. His original version called for bonds on any existing operations that mine sand, gravel, rock, pegmatite, limestone, iron ore or gypsum, shale, pozzolan or other materials used in the process of making cement or lime to be a maximum of $20,000 and then jump to a maximum of $500,000 on July 1, 2026.
The maneuvering quickly began. Deibert’s bill was amended in a Senate committee, then amended again on the floor of the House of Representatives. House members voted 62-3 on February 23 for what became the final version, and the Senate agreed 30-3 on February 27. Governor Kristi Noem then signed it into law on March 15 and the changes took effect on July 1.
The changes drop the current base amount to $20,000 for a statewide bond on those materials. The statewide bond will then increase to $100,000 on July 1, 2026, then rise again to $200,000 on July 1, 2027, and ultimately reach $300,000 on July 1, 2029.
Those changes also made clear that a limestone mine would now be considered the same as a rock, gravel or sand mining operation for state permitting purposes. That caused discussion among Mineral and Environment Board members on Thursday when the Pete Lien and Simon bond releases came up .
“It sounds like the Legislature backed us into a corner,” board member Doyle Karpen of Jefferson said about the Pete Lien releases. “Over a quarter million dollars less surety.”
The board’s chair, Glenn Blumhardt of Bowdle, agreed. “It does give me a lot of angst to give up that much bonding,” he said.
After state minerals and mining administrator Mike Lees explained what led to the reductions, Blumhardt said, “It bothers me a little we’re giving up all that bonding right now and we’re going to be a little short for a few years.”
Karpen said that Pete Lien and Simon are solid companies with good financial reputations. “But it’s a precedent the Legislature is setting,” he said, and the Legislature would be responsible if a reclamation problem develops as a result.
Board member Rex Hagg of Rapid City served 10 years in the Legislature during the late 1980s and most of the ’90s. He said the board has been trying to raise the amounts of surety bonds in recent years because they weren’t adequate. “In the short term, this is disturbing,” he said about the changes.
Board member Bob Morris of Belle Fourche described the situation as “clearly an example of an unintended consequence.” About the two companies, Morris, a lawyer, said, “They’re taking advantage of the law. I can’t blame them.”
The vote was 8-0 to release the Pete Lien bonds. The board then considered the Simon bonds.
“The way I understand this, we’re kind of backed into a corner,” Blumhardt said. “We’re going to do what the Legislature put out there for us to do.”
Hagg agreed but said what’s happened was “a little drastic, a little too drastic.”
Blumhardt added, “We all definitely have the feeling we’re giving up a lot for very little.”
Karpen said he wouldn’t oppose the Simon releases. “And I’ll be plugging my nose as I vote yes.”
