February 2, 2015 Capitol-ism

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

February 2, 2015

If the session seemed a bit lethargic a week ago, that condition is certainly changing.  The bills being submitted by legislators themselves are starting to enter the system which, to this point, has been focused mostly on bills submitted by the various agencies.  The variety of topics is always fascinating as evidenced this year by SB 86 which would place term limits on the office of Poet Laureate.  Whether or not SB 86 becomes law, it has enhanced the public good by making more people aware that the state even has a Poet Laureate . . . and if you know WHO the Poet Laureate might be, count yourself among the truly erudite.

Highway Funding – In the last issue, the Chamber offered members an opportunity to express their opinion on the tax increases that will provide additional funding for roads, bridges and highways.  If you haven’t filled out the survey, you can still have your voice heard (well, more accurately, have your click seen).  Simply click here to take the survey

SB 59 – To create the state debt collection office - State government has taken an assessment of the money owed to the state and is facing the fact that they don’t have a very good system for collecting debt.  Currently, each department handles its own debt directly with the people who owe the department money.  When put under scrutiny, this system looks a bit like a car full of teenagers conducting a Chinese fire drill at a busy intersection.  And why shouldn’t it, there isn’t a single state employee who has ever been asked about their experience collecting debt when they were hired. 

How much is on the table?  The consultants hired by the state to evaluate the debt collection systems within state government estimate that there is as much as $59 million owed to various state agencies.  While these funds are certainly not all collectable and trying to decipher the exact nature of the debt, is akin to developing the machine that deciphered the German’s “Enigma” Code, (i.e., how much of the money owed to the United Judicial System is restitution or fines?) it seems certain that there is enough to be deemed significant.   

To improve their skills as debt collectors and to get money for the government to operate, the state drops in SB 59, a bill to create a centralized office for debt collection.   The bill outlines the powers to be granted to this new office, including the ability to contract with third party consultants/service providers, and establishes a set of rules that outline the powers of the new office.  And, that is where the fertilizer found the fan.

The Chamber has expressed support for the idea of a centralized collection office within state government staffed by people who might have experience in that field and perhaps might have been asked about it during the hiring process.  At this point, the Chamber thinks the bill still overreaches giving the state a stronger hand in collecting debt than is available to others and therefore putting them at the front of line for resolution with debtors.

The problems recognized were in new powers that the office would be granted and how the system is being designed.  Because the Department has reached out to the business community and the bill is undergoing changes, Capitol-ism is not going to do a detailed review of the difficulties with SB 59.  Capitol-ism will provide several areas of concern so that Chamber members might have insights to this issue’s related concept (like touring a sausage plant . . . “right this way to see the guts of the matter”).

One specific issue that worries the Chamber - SB 59 has defined “employee and employer” in a way that is not found anywhere else in the law, as far as the Chamber knows.  The definitions follow:

(4)    "Employee," any person or entity that performs services for another and includes a debtor acting as a contractor, subcontractor, distributor, agent, or in any representative capacity in which the debtor receives any form of consideration;

(5)    "Employer," any person or entity that pays an employee to do a specific task or tasks;

The Chamber is nervous about defining relationships such as “contractor, subcontractor, distributor, agent, or in any representative capacity” as employees might gain in popularity and spread like the plague.  These are relationships that many businesses create because they specifically don’t hire a plumber or an exterminator as employee.  The Department of Revenue says this definition of employee is being broadened so that the language setting wage garnishment can be used to intercept money between a business and distributor.  That makes sense for the Department but doesn’t address the Chamber’s concern.

The other bothersome notion is the state’s contemplation of withholding hunting/fishing licenses or privileges granted by the state until the debt is resolved (which might include an acceptable payment plan).  This puts the state as “first among equals”, if not simply ahead of the other businesses trying to collect money from the same people.  The bill is up for hearing on Tuesday February 3rd.

The Chamber would like to thank the Department of Revenue, Attorney General’s Office and Bureau of Finance and Management for meeting with the business community and listening to our concerns.

Signatures on Ballot Measures

SB 166 - An Act to revise the method used to calculate the petition signatures to place initiated measures on the ballot and to declare an emergency.  

Count on one thing, if your industry is the subject of ballot measure being circulated by a special interest group, there is a 95% chance they aren’t looking to make you the “humanitarian of the year”.   

South Dakota was the first state to give citizens the right to put a new law up for a vote of the people or give the ability to put laws passed by the legislature up for a vote as well.  This right was granted in the election of 1898 after being placed on the ballot by the progressives in the legislature. 

The question in play is how many signatures it should take to put an issue on the ballot.  The current law says the number needed is based on “total number of votes cast for Governor at the last preceding gubernatorial election.”

The Constitution says “Not more than five percent of the qualified electors of the state shall be required to invoke either the initiative or the referendum.”  The constitution does not define the term “qualified elector” in the section regarding initiatives.  In last year’s gubernatorial election, approximately 54% of the voters turned out which will actually reduce the number of signatures required to place a new law before the people. 

SB 166 would shift the number of signatures needed to be 5% of the number of total registered voters.  Since the turnout was about half of the voters, the impact of the change would be to double the number of required signatures.  There were 277,403 votes cast in the last gubernatorial election.  Taking five percent of this vote sets a signature requirement of 13,867 to qualify a proposal for the ballot for the next four years.  It will take 27,740 to put a constitutional amendment on the ballot.

If SB 166 becomes law, it would move the signature requirement to 5% of registered voters at the time of the last gubernatorial election.  There were 521,017 registered voters on November 4th last year, which would mean under SB 166 it would take 26,050 to place a regular initiative on the ballot.

The Constitution is more specific about the signature requirement for amending the Constitution.  “An amendment proposed by initiative shall require a petition signed by qualified voters equal in number to at least ten percent of the total votes cast for Governor in the last gubernatorial election.”  Since there is a long tradition of having to collect twice as many signatures for a constitutional amendment as a regular statute, proponents face an uphill battle.

The South Dakota Chamber of Commerce and Industry has played a leadership role in ballot question campaigns during each of the last six elections.  Given the nature of most proposals that emerge on the ballot, it can be easily stated that when your industry faces a ballot measure, it’s like having a 60 Minutes van waiting for you at the office.

Ballot campaigns are a right of the people.  They are also expensive and occasionally come close to placing unconstitutional laws before the people.  It is fair question to ask about the rigor that should be required to place measures on the ballot and the Chamber will monitor this issue with great interest.

Thank you for your support of the South Dakota Chamber of Commerce and Industry!




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