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SD lawmakers approve livestock inspection fees

Chet Brokaw, Associated Press

PIERRE, S.D. (AP) -- Despite opposition by a major livestock owners group, a legislative panel on Tuesday approved the state Brand Board's decision to increase the fee for livestock inspections designed to prevent the theft of cattle, horses and mules in western South Dakota.

The unanimous vote by the Rules Review Committee allows the Brand Board to go ahead with its plan to boost the inspection fee from 90 cents a head to $1, the second increase in a year. The increase, expected to take effect July 1, is aimed at keeping the inspection program running in the black for the next few years.

Larry Stearns, the board's director, said it decided last month to raise the inspection fee to cover the rising costs of the inspections required when livestock are sold, slaughtered or moved out of the inspection area west of the Missouri River. Farmers and ranchers have been reducing their cow herds because of the persistent drought, which means fewer calves will be produced, sold and inspected in the next few years, he said.

"Cows are the factories when you get in the livestock business. With these cows already leaving the country, our future inspections for the next couple of years are going to be reduced considerably," Stearns told the legislative panel.

Jeremiah M. Murphy, a lobbyist for the South Dakota Stockgrowers Association, said the group agrees the inspection fee should be raised, but only by a nickel to 95 cents a head. A 95-cents-a-head fee would allow the Brand Board to end its budget year in the black in the next few years, but the $1 fee would let the board build up an unneeded cash cushion, he said.

"Money that is stockpiled, money in a bank account, doesn't go to the ongoing operation of the Brand Board," Murphy said.

But Stearns said the board needs a cash cushion at the end of each budget year in June to pay for operations in July through September, months when few cattle are sold and few inspection fees are collected.

The program has been inspecting about 1.5 million head of cattle a year, but that is likely to drop to 1.2 million head this year because of the drought, Stearns said.

Murphy had asked the legislative panel to require the Brand Board to take another look at the issue.

But Sen. Mike Vehle, R-Mitchell, said he supports the 10-cents-a-head increase because it shows the board is planning ahead to make sure the inspection program is properly funded.

"I feel they are acting in a prudent manner," Vehle said.

Rep. Timothy Johns, R-Lead, said the Brand Board met all legal requirements when it proposed the increase, held a public hearing and approved the new fee. He said the committee had no reason to block the fee increase.

Nathan Sanderson, a policy adviser to Gov. Dennis Daugaard, said the governor supports the Brand Board's decision because the extra money will be used only to support the inspection program.

Even though the Stockgrowers Association opposed the 10-cents-a-head increase, the South Dakota Cattlemens Association supported it.

The Brand Board a year ago raised the inspection fee from 80 cents to 90 cents with the expectation that an extra fee could be charged to those who have small numbers of cattle inspected at their farms and ranches. After this year's Legislature rejected that extra fee, the board last month decided to seek the $1 fee for all inspections.