2013 Capitol-ism - February 8

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

February 8, 2013

Review of Items Moving Through the Session

Serious issues are now a daily event as the 2013 Session is moving along at a fast clip.  The major issues of economic development, whether or not the state will expand Medicaid and, of course, the budget, are being processed by legislators and worked on in committees. 

Each session is unique and all sessions get described as "weird".  This session is much like previous ones, odd in its own way.  One distinguishing feature of this session is the amount of "work" being done by legislators and leadership working together in small groups without seeking to engage outside experts or agencies.  What's wrong with that?  Well, it's a bit rough on lobbyists but finding someone to worry about that is a tall order.

It will be interesting to see if the compromises that are forged in the heat and pressures of the political, philosophical, and policy furnaces will find acceptance among the citizens and special interests that are most affected by the policies.  There is still plenty of time in this session but the later that proposed solutions are brought out for full discussion, the more "colorful" those discussions might be.

To catch Chamber members up on items that are moving through the session, here is a list of bills that have seen action over the past week.

SB 44 - This is a texting ban on CDL (commercial) drivers.  It is being encouraged (read forced) by the Federal Government.  Update - This bill was sent to the Transportation Committee where it passed and is now on the way to a vote on the Senate floor.

SB 142 - Statewide texting ban - Sen Vehle (R-Mitchell)  This bill would ban "operating a motor vehicle on a highway while using a handheld electronic wireless communication device to write, send, or read a text-based communication.  This section does not apply to a person who is using a handheld electronic wireless communication device:

(1)  While the vehicle is lawfully parked;
(2)  To contact an emergency response vehicle;
(3)  To write, read, select, or enter a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call; or

(4)  When using voice operated or hands free technology".
SB 142 would supersede all local ordinances, such as the one passed in Sioux Falls last year which has accomplished two things - a reduction in "visible" texting and an increase in traffic on back streets.

SB 91 - Phase out of the contractors' excise tax - Sen Begalka (R-Clear Lake).  The Chamber opposed this bill because it did not replace the estimated $60 million dollars that would be lost to the general fund.  Regardless of what readers might think about the amount of money the state spends, this list of replacement taxes for this huge hit is short and has business community written all over it.  Update:  Bill was tabled in Senate Appropriations on a unanimous vote.

HB 1175 - Immigration - Rep. Nelson (R-Fulton).  The South Dakota Chamber of Commerce and Industry understands that employing people who are not in this country legally is a growing problem and one that is a high priority for border states.  The Chamber is simply not convinced that it is a problem in South Dakota that warrants an enormous investment in law enforcement or that justifies the penalties against employers that are outlined in this bill.

This bill prohibits employers from "knowingly and intentionally" hiring unauthorized aliens (not a new idea, it's already against federal law).  Update - Bill was deferred to the 41st legislative day on a vote of 7-6.  This close vote may suggested the sponsor will attempt a "smoke-out".  Julie Johnson reported that no smoke-out was attempted yesterday.

S 51 - Sales tax allowance.  This was introduced at the request of the Department of Revenue.  This bill reinstates a collection allowance and allows businesses that collect and remit sales taxes to receive a fee for that work.  There are over 60,000 licenses issued to businesses that collect and remit sales/use taxes.

That fact creates an interesting (well, moderately interesting) question about the size of the "revenue" department.  Either South Dakota has one of the smallest revenue collecting staffs, if measured by paid employees, or has a massive army of tax collectors that is 60,000 deep!  Given the fact that none of the 60,000 has received a dime for a decade or so for collecting taxes, it seems the former claim will prevail.  Come to think about it, there was nothing even remotely interesting about that.

There are 31,000 businesses with employees (covered by Unemployment Insurance) so about half of the sales tax licensees are home-based or single person businesses, many of whom are selling products like Mary Kay or World Book Encyclopedias (if you have never heard of World Book, look them up on Wikipedia).  Of these 31,000 businesses, approximately 4,000 are classified as "retail" and the rest are restaurants, gas stations and businesses offering professional services such as attorneys and accountants.  SB 51 will impact many businesses.

Each business will be allowed to have a "credit" of 1.5% of the tax collected up to $70/month.  Total impact on the state budget will be $6 million a year to pay this fee.  The Chamber is proud to support SB 51 in an effort being spearheaded by the South Dakota Retailers Association.  Update: Heard this morning in Senate Appropriations and held by the chair until a future meeting.

Economic Development - The discussions continue behind the scenes with very little leakage.  Here is a list of the most discussed bills offering ideas on economic development.  These are the bills of substance; there are also a number of bills that are just titles and placeholders. 

HB 1161 - Establishes a local tax refund that an be matched by the state.  It faces unknown budget limitations and requires an extensive economic review by local economic development groups that may be a challenge for smaller communities.

HB 1196 - Would use some state money to help local economic development efforts.  Again there are budget tradeoffs that could hinder this idea.

SB 92 - Is the Chamber's placeholder bill that was created in case other ideas fail.  It will allow us to use language already prepared that will reinstate the law that was in effect last year.

SB 195 - Is a wind energy bill that offers a tax refund on approximately 50% of the taxes for any wind farm.  It is written for wind farms only and does not include the wind manufacturing industries, such as the blade manufacturing plant in Aberdeen.

SB 155 - Creates a local government road improvement grant fund to serve new ag facilities.  This would help build better roads for multiple dairy operations that will be needed to keep supplying in-state cheese processors, including a new plant to be built by Bel Brands (of Laughing Cow fame).

HB 1218 - Exemption from sales/use tax for data centers that are purchasing at least $2 million dollars of servers and programs and creating at least 20 jobs.

HB 1241 - Require food packaging to be labeled if the packaging contains bisphenol A. - Feinstein (D - Sioux Falls)

This is an interesting bill for the business community to watch as it truly represents a modern debate.  In this case, the point of  contention is whether or not a chemical known as bisphenol A has never been shown to be harmful.  The Food and Drug Administration, the federal agency directly responsible for food safety has concluded that bisphenol A is safe and has not required any labeling at the national level.

What is that stuff anyway?  Bisphenol A is used to make plastic more rigid and clearer so containers are stuff and can hold stuff that everyone can see.  One of its most common uses is in the thing plastic film that lines canned food.  Without it the food would start eating the can before  consumers could eat the food.

What does HB 1241 do?  It is a bill that would require food that is packaged in containers that contain bisphenol A to be labeled as such in South Dakota.

The problem?  There are several, starting with South Dakota's lack of dominance in the national marketing of food.  Most major food processors and distributors don't know if they market to South Dakota and when they find out that they do sell here . . . many wonder why.  It is not that they don't like people in South Dakota - or that people here don't eat enough - there is just an overwhelming lack of numbers.  There just aren't enough of us.  If the biggest awareness of South Dakota comes from a regulation requiring labels for products to be sold here, we are more likely to see a reduction in highway traffic as trucks simply stop being sent here than we are to see any warning labels.

As noted above, if there was a case to be made about harm, there are many systems set up to enforce stronger remedies.  This is a safe product that doesn't need a warning label anywhere, much less needing one in a rural state, acting on its own.

REMINDER:  Business Day at the Legislature is Thursday, February 21, 2013.  Click here for details:  http://sdchamber.biz/chambernews/businessdayatthelegislature/

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


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