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Daugaard sees potential in aviation manufacturing as one new step in economic development
January 12, 2011
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  • By Bob Mercer

    January 12, 2011

    PIERRE – Gov. Dennis Daugaard said Tuesday he wants to provide airplane manufacturers who build aircraft and parts in South Dakota with more protection against product liability lawsuits.

    He said there already is a small aircraft industry in South Dakota and the presence of Ellsworth Air Force Base near Rapid City is an opportunity to be a catalyst for more development.

    As lieutenant governor, Daugaard served on the Ellsworth Development Authority that was established by the Legislature in 2009, in part at his urging, to work on issues affecting the base’s long-range use and to encourage development that complements the base.

    “Aviation is an industry that would fit well near Ellsworth, and I will be proposing legislation that will make South Dakota more attractive to the aviation industry,” he told members of the Legislature in his State of the State speech.

    “Just as we acted in the past to attract the financial services industry, we can change this law to give the aviation industry a reason to look at South Dakota,” he said, referring to the bank laws that were passed 30 years ago that helped bring Citibank and other credit-card companies.

    The concept is to protect manufacturers from claims arising years after an aircraft is manufactured. Speaking later with reporters, he said the additional protection would become available 10 years after the manufacturing date. He said the South Dakota legislation would be based on a similar but broader law in Kansas, whose aircraft manufacturers include Boeing.

    The proposed legislation was one new high point in the economic development Daugaard outlined for lawmakers in his speech Tuesday. One other wrinkle calls for restructuring state government’s existing program that provides subsidies to ethanol production plants.

    His plan would pay less annually to the ethanol producers but stretch the payments over a longer period. That would allow $2 million annually to be shifted instead into state government’s REDI program that provides low-interest loans to new and expanding businesses.

    In addition to making $10 million available for loans, $3.5 million would be given back to the ethanol industry to install more fuel-blender pumps at service stations across South Dakota to encourage more use of flex fuels by motorists.

    The state’s MicroLoan program for small businesses will be restructured to be more available for people to purchase existing businesses in small towns, Daugaard said. He explained that banks can be hesitant to finance deals because small town businesses often have high inventory, and aging owners shut down because they can’t find buyers to take over.

    Daugaard pledged to keep working toward a solution on the federal-funding impasse that unexpectedly put the Homestake underground science laboratory into an uncertain status recently.

    As expected, he announced the breakup of the state Department of Tourism and State Development. The mega-agency will be split into three Cabinet-level agencies headed by a commissioner of economic development, a secretary of tourism and a secretary of tribal relations.

    Daugaard said he wants to establish one-to-one relationships with leaders from each of the nine tribal governments in South Dakota. He also announced a special initiative to reduce infant mortality throughout the state, including in reservation areas.

    “Our reservations are integral parts of our state, and I do not view any challenges they face as solely tribal problems,” he said.

    THE DAILY REPUBLIC2011-01-12false