South Dakota needs to slow the growth of taxes paid by the state’s electric cooperatives, lawmakers said Friday. The South Dakota House of Representatives overwhelmingly voted to change the way power cooperatives are taxed, shifting from a gross receipts tax to a charge per unit of power sold.

Senate Bill 123 affects revenue received by schools outside of the state’s education funding formula. As approved, the measure would allow tax revenue collected from cooperatives to grow at about 4 percent per year, down from the 10 percent annual increases allowed by current law. Backers argue the change benefits consumers and will allow the cooperatives to compete on a level playing field with investor-owned utilities.

The bill now moves to back to the Senate, where lawmakers must vote on changes made in the House. The proposal was altered last week to include a provision that cooperative lobbyists said would hold schools harmless from the change while providing a one-year boost to schools as the state shifts to the new taxation policy.

ASBSD opposes the legislation, and is unable to obtain the information necessary to validate the impact of the policy.