Editor's note: This Speakout was submitted by David Ganje, a practicing attorney who specializes in natural resource and environmental law.

The South Dakota Legislature recently considered, and perhaps will soon refile, a proposed new law addressing CO2 pipelines. That unsuccessful bill, or a similar bill, will undoubtedly be refiled.

I will review the bill which passed one house of the legislature but not the other house. I do not here advocate for the merits or demerits of modern CO2 pipeline projects; nor do I discuss its effects on the economy and on property rights. I have commented on rights of way and eminent domain in other articles and blogs. Rather, here, I look directly at the Legislature’s proposed language found in House Bill 1133, a CO2 bill killed during the most recent legislative session.

It is said that good law is law that is necessary, clear, coherent, effective and accessible. With this legal mantra in the back of my somewhat vacuous mind, let us look at some issues with the bill.

South Dakota maintains a “bill drafting manual’ for writing new legislation. It appears writers of the bill I now review took the approach I use when reading my several motorcycle safety manuals. The manuals made an inadequate impression on me. I have had two significant accidents in my motorcycle career. The results of accidents don’t make for fun.

In writing legislation, statutory terms should be defined to assure clarity and precision of meaning. And further, if a term is intended as a part of new substantive law, it should be defined within the body of the legislative language. The bill intends to exclude CO2 projects from PUC permitting laws. The bill does not address what laws would then apply, nor does the bill discuss eminent domain procedures or property rights. The bill would not affect pending CO2 permit applications.

An alternative use in CO2 gas collection is its employment for industrial purposes. The bill addresses geological storage of CO2 but does not cover CO2 uses for industrial purposes. This is puzzling because now pending before the state PUC is an application for a CO2 pipeline.

While the pending application would not be affected by the bill, the application states the developer will use CO2 for creating (1) a permanent and secure underground sequestration site (geological storage) and/or (2) a terminal for distribution to industrial users.

The application indicates the product will be potentially distributed to industrial users. If a pipeline developer will have multiple uses for a CO2 pipeline, is the project excluded from the bill’s purpose? Was it the intent of the drafters to give a pass to a developer who uses the product for industrial uses?

The bill also courageously piggybacks with the federal tax code. The bill excludes from the PUC permitting process a pipeline developer if the developer might have the right to a federal tax credit or a direct federal payment. A so-called 45Q tax credit is an incentive tax credit introduced in the US by The Internal Revenue Service in October 2008. The federal law provides a monetary credit.

The bill’s language does not require that a developer obtain the tax credit but only that the developer might be able to. This bill marries itself to the ever-changing world of federal tax law. When one government writes a law linked to the malleable laws of another government, the first government must buckle up and take a good amount of Dramamine for a long rough ride.

David Ganje is an attorney who practices natural resources, environmental and commercial law. The website is lexenergy.net.