2016 - February 1 Capitol-ism

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South Dakota Chamber Of Commerce - Capitol-ism E-Newsletter

February 1, 2016

Flashbacks can wake someone out of sound sleep leaving them drenched with night sweats and a pounding in their chest as their heart races from distinctly unnerving memories. 

HB 1142 - The “guns in trunks” bill is back

HB 1142 – Which is titled “Prohibit businesses and employers from establishing certain policies against the ability of an employee or invitee to store firearms and ammunition in a locked motor vehicle parked on the premises,” has been introduced again this year.  This year’s version has as its prime sponsors Representative John Wiik (R-Big Stone City) and Senator Brock Greenfield (R-Clark).

The bill prohibits businesses or public/private employers from enforcing any policy that prohibits someone from storing a firearm or ammunition in the parking lot, if that person is in compliance with all applicable state laws and if the firearm/ammunition is locked out of sight in a motor vehicle.

This bill has been brought forward a number of times and is a classic battle between what some claim is a Second Amendment right to bear arms against a property owner’s right to control what is placed on their property.  The Chamber is unhesitant in opposing this bill.

Most businesses don’t want guns on their property . . . period.  This policy isn’t because they are anti-gun rights or certainly not anti-hunting.  Most businesses are responsible for the safety of employees and customers and understand that people can get very upset during the work day, particularly when they have just been told it is their last day at work, and having firearms readily available just might lead to a catastrophe that no one wants. 

HB 1142 doesn’t just prevent the policy against having firearms in trunks it also creates a right for people to file lawsuits seeking: Reinstatement to job, payback of lost compensation, and attorney fees.

Many businesses are doing work under the provisions of contracts that set out conditions that must be followed by all businesses operating as sub-contractors.  This is especially true of federal contracts.  If this law is viewed as overriding the company policy, they may have trouble keeping contracts or renewing them.

HB 1142 has been referred to House Commerce Committee but no date has been set for a hearing on the bill.  It would be most helpful if members of the Chamber would contacts members of the House Commerce and Energy Committee and urge them to defeat HB 1142.  Here are the members of that committee:

Name Chair/Vice
Beal, Arch
Harrison, Michele
Hawley, Spencer
Kirschman, Patrick
Novstrup, Al
Rounds, Tim Chair
Schoenbeck, Lee Vice Chair
Stalzer, Jim
Steinhauer, Wayne
Wiik, John
Willadsen, Mark
Wollmann, Mathew
Zikmund, Larry
  

HB 1086 - Another blast from the recent past

Creation of property classification for “leased residential property”

This bill will create a separate classification of property for apartment buildings, duplexes, and four-plexes.  There are currently four classifications of property in South Dakota: agriculture, owner occupied, commercial (or “other), and centrally assessed.  This bill will add one for residential property that is leased.

How property is classified is important because the state's Constitution says that all property within the same classification must be treated the same.  It also says that different classes of property can be taxed at different rates.  Currently in South Dakota, the only tax that uses different tax rates for different classes of property is the mil levy rate for school districts’ general funds where agriculture pays a mil levy of less than $2; owner occupied pays a levy of around $4 and commercial pays a levy of just under $9/$1,000 of taxable value.

HB 1086 does not specify what the school general fund levy should be for leased residential property and advocates point out that the current rate (which is commercial) will not change unless the legislature makes that change.  The bill clearly separates leased residential property from all other categories which sets the stage for the creation of a lower tax rate for rental housing.  This, of course, would shift those taxes to other classes of property.

Proponents claim that having this property in a separate classification will allow better analysis of how many units there are in each county and city and thereby will facilitate additional investment in leased residential housing making it more affordable. 

The bottom line for the Chamber’s Board of Directors is that owning apartments is an investment and remains a commercial enterprise that should remain taxed as commercial property.  Leased residential property as a commercial endeavor has an entire set of unique market forces to be sure and those forces can be as brutal as any, but if you want to experience picky market forces, try selling mops . . . or making hit movies about people who sell mops.   

The bill had a hearing last Thursday morning and passed out of committee on a vote of 12–3.  It is not scheduled for a floor vote on Tuesday but should be debated by the entire House of Representatives on Wednesday.

Here is the committee vote on HB 1086

HB 1086, House Taxation, Do Pass Amended

Bartling

Nay

Beal

Yea

Duvall

Yea

Haggar (Don)

Yea

Killer

Yea

Kirschman

Yea

Latterell

Yea

May

Nay

Novstrup (Al)

Yea

Rasmussen

Nay

Russell

Yea

Wiik

Yea

Willadsen

Yea

Rozum

Yea

Solum

Yea

 

Ayes

12

Nays

3

Excused

0

Absent

0

 

HB 1084 - Work Comp Bill Advances  

Wage benefits for people working at multiple jobs is defined in law

Last May, the South Dakota Supreme Court held that South Dakota’s workers’ compensation laws, the statutes that define employment and what it means to be working for someone were ambiguous – which is to say “iffy” and, as such, should be interpreted to mean when someone is working for multiple employers and gets hurt badly enough that they can’t work at all, then the wage benefits from workers’ compensation insurance should cover the income from all of the jobs.  To quote Dorothy, “We aren’t in Kansas anymore.”

Up until last May, the Workers’ Compensation system and the circuit courts had awarded lost time benefits for only the job where the injury took place, figuring that the insurance company and the employer where the injury took place couldn’t possibly know about other jobs to calculate premiums.  If it hasn’t been mentioned before . . . the court decision was unanimous; five to zero, not close.

After a great deal of anxiety on behalf of the business community, the issues began to settle down and get sorted out and solutions began to emerge.  It’s a bit like watching flood waters recede and seeing one massive mess only to get down to dealing with it by finding a mop.  One of the first pieces of information that helped bring some calmness to the table was the fact that 39 other states already add up multiple employer wages in a process known as “aggregation”.

Another ameliorating factor is that only 9% of workers in South Dakota work multiple jobs.  That’s enough to make our state #1 for people having multiple jobs but is still a rather modest number of people.  The third fact is that total benefit payout for workers’ compensation is mostly medical.  Wage loss payments are about 26% of the total benefits each year. 

HB 1084 sponsored by Representative Anderson (R-Hudson) and Senator Shorma (R-North Sioux City) settles most of the questions left unanswered by the court ruling known as the Wheeler Decision.

First, it states clearly that cases settled before the Wheeler Decision would continue to use the system that was in place at the time of those injuries (May 6th, 2015 is the date).  Cases that are filed subsequent to that date would follow the wage aggregation system found in the new law.

In drafting language to establish an aggregation system for workers holding multiple jobs, there was a need to make sure that employment at seasonal jobs or jobs that a person might have worked at previously but are not currently were not included in the wage calculations.  This is how the bill will keep aggregated wages limited to jobs people are actually working at when they are injured at one of those jobs:

An employee's earnings from concurrent employment are aggregated only if the injury occurred when the employee was actively working in the concurrent employment and when the injury prevents the employee from performing the employee's duties at the employee's other concurrent employment.

Remember the old saying about not seeing the making of sausage or law?

HB 1084 was approved by House Commerce and Energy Committee on a vote 13 to 0. 

 

Thank you for supporting the South Dakota Chamber of Commerce and Industry

 

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