- Associated Press - Friday, March 1, 2019

PIERRE, S.D. (AP) - South Dakota Gov. Kristi Noem said Friday that a bill to legalize industrial hemp still “gravely concerns” her, but she stopped short of threatening to veto the proposal that’s one step from her desk.

The Republican governor said she’s apprehensive that the bill approved Thursday by a Senate panel would make enforcement difficult. Noem echoed concerns raised by her administration at the panel hearing, saying she’s worried because drug detection dogs flag hemp, just like marijuana, and that the plants look alike.

The 2018 federal farm bill legalized cultivation of industrial hemp nationally, but the governor has asked state lawmakers not to pass the bill this year.

Supporters contend planting hemp wouldn’t even happen until 2020 under the bill, which defines industrial hemp as containing no more than 0.3 percent THC. They said there’s an industry ready in South Dakota to start processing hemp products.

If the measure passes the full Senate without changes, it would head to Noem’s desk. The governor said there’s an amendment that may be proposed in the Senate that would win her support, but she declined to describe the proposed changes.

Noem also took issue with two proposals legislators are discussing this year after the state won the ability to collect sales taxes from out-of-state internet retailers. Lawmakers are debating the changes because of ambiguity in a 2016 law that sought to require that a half-cent sales tax hike be phased out if the state was ever allowed to impose the online sales taxes.

Under existing law, the 4.5 percent tax rate is to be rolled back by one-tenth of a percent for every additional $20 million in online sales tax revenue collected, with a floor of 4 percent. But officials have said new legislation would be required for the envisioned reductions to occur.

A bill that would have instead allowed the Legislature’s budget-writing committee to propose reductions each year that online sales tax revenue grew by $20 million was changed this week to target cutting the sales tax on food, rather than the overall rate. Noem said she’s concerned the plan goes against the original intent of the previous legislation.

The governor also said she disagrees with a bill that would encompass overall sales tax revenues. It would automatically trigger a one-tenth of a percent rate reduction each budget year that sales tax collection growth exceeds cost-of-living plus $20 million, also setting the floor at 4 percent.

Following a recent trip to Washington, D.C., Noem told reporters in Pierre that she had several discussions with President Donald Trump about trade disputes. Noem spoke last Friday at a conference sponsored by Politico alongside a National Governors Association meeting, saying trade wars with countries like China have “devastated” South Dakota .

Trump was in discussions with China over the weekend while she was there, and Noem said the president wanted her to know that he’s continuing to work for more fair agreements for South Dakota farmers.

“He wanted me to know that he knows we’re concerned,” Noem said. “He said, ‘I know my farmers need better markets. I know they need more access, and that’s what I’m working for.’”

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