All Quiet on the Western Front . . .

Things have been rather quiet these past several weeks in legislative process.  Just as all parents can tell you, when it gets too quiet, it’s time to worry.  Below you will find several updates on items mentioned in previous issues of Capitol-ism and several other issues of general interest to our members.

First, follow through on Business Caucus.  Business Day at the Legislature was held 10 days ago and was a tremendous success.  The Chamber conducted the 10^th annual Business Caucus during which attendees (a.k.a. members) answered questions being debated during the session.  With nearly 100 attendees, this year the results have been of great interest to legislators.  You can find the results for Business Caucus with this link:

2014 Business Caucus Results

As a reminder, the Chamber’s official positions on legislative issues and ballot measures are determined by the Board of Directors.  The Business Caucus results reflect the opinions of attendees at the moment of the caucus which makes it a valuable “focus group”  but can, at times, be different than the official positions of the South Dakota Chamber of Commerce and Industry.

There has been a longer than usual gap between publications of Capitol-ism.  Here are several bills that saw final action during the past 10 days.  These bills were on the Chamber’s list of bills for action and these summaries are provided as a way to keep members up to date on legislative actions of the South Dakota Chamber of Commerce and Industry. 

SB 136 – Ensure available replacement parts and services for consumers of manufactured goods.

This bill would have the state controlling the relationship between manufacturers of electronics and businesses that want to repair those electronics.  The bill would force electronic manufacturers to make proprietary information available to independent repair shops and to keep spare parts available for seven years, regardless of the length of warranties. 

While there are laws that govern the relationship between manufacturers and dealerships with automobiles, construction equipment and, to a lessor extent, small engines, those laws are carefully balanced and express obligations on both the manufacturers and the dealerships.  None of these carefully balanced elements were part of SB 136.   With no criteria for the relationship between manufacturers and independent repair shops, SB 136 would be like an old country arranged marriage  . . . one agreed to by a father who hated you.

To make matters worse, the definition of “electronics” was so broad that it would have included the massive scoreboard produced by Daktronics and the computer controlled systems developed and manufactured by Raven Industries.  All of the examples used during the hearing were consumer electronics, which makes the written definitions in the bill all the more troublesome.   

Several manufacturers and equipment and dealership organizations were on hand to oppose the bill including, your South Dakota Chamber of Commerce, South Dakota Automobile Dealers Association, National Equipment Manufacturers Association, John Deere Corporation and Caterpillar/Butler Dealerships, to name a few. 

The bill died in committee, where the motion is “defer to the 41^st day, which does not exist.  The vote was 5 to 2 and here is the committee vote (yea votes support the Chamber position).

SB 136, Senate Commerce and Energy, Deferred to the 41st legislative day

Who should be able to tell what, to whom, and when.

HB 1207 – An Act to repeal certain provisions, commonly known as the gag law, prohibiting certain disclosures by a state agency of information concerning a private entity.

Born of a controversy between a former state treasurer and a prominent financial institution, this law was put in place to keep public agencies from seeking publicity during the course of an investigation or even a routine audit.  HB 1207 sought to repeal this law under the guise of open government but have also made it possible for businesses to have necessary trade secrets exposed.

While the Chamber supports openness in government, especially when the government is making decisions that impact ability of business to succeed in South Dakota, divulging information that is from a routine audit or worse, that involves proprietary information and trade secrets, is harmful to anyone’s ability to do business here. 

HB 1207 was not a surgical attempt to take a step toward more openness or even advance any discussion about the public’s need to be aware of selective enforcement actions.  It was a wholesale repeal of this law that would have opened up business information that is never considered to be included in sunshine laws.  It wasn’t just a step too far, it was a leap in the wrong direction. 

Capitol-ism is pleased to report that HB 1207 was defeated by a committee vote of 10 to 3.  The motion was to “defer to the 41^st legislative day” which does not exist thereby killing the bill.

Here is that vote (a vote of “yea” is a vote to support the Chamber’s position):

HB 1207, House Judiciary, Deferred to the 41st legislative day

Update on Common Core bills

There are billions of people on this planet who wake up every day and head to work full of confidence that they are going to prevail in the global marketplace.  They are not aiming for second place because they do not assume that the United States will be the leading producer of goods and services.

Board members of the South Dakota Chamber of Commerce and Industry compete in this global marketplace and they have guided the Chamber’s support of rigorous educational standards and have embraced a clear message “being the best in the US is not enough to assure success.”  The kind of standards that are most needed can be found in the Common Core standards and have not been found in any other proposed standards. 

In fact, there have not been any alternative standards offered during the legislative session.  There have only been objections to the Common Core Standards on the basis of how they were adopted, or that they have not been proven to be effective, and that they will lead to our schools being hijacked by the Federal Government. There has been very little direct criticism of the standards themselves. 

Several bills have been introduced to derail the Common Core Standards and the Chamber has joined forces with the education groups and the Governor’s office to oppose those bills.  SB 129 and HB 1243 would have “supplanted” the Common Core Standards and both of those bills were killed in committee.  SB 129 was defeated on February 18^th, on a committee vote of 5 to 2 in favor of defeating the bill.  HB 1243 was defeated on February 24^th on a very close vote of 8 to 7 in favor of defeating the bill. 

On January 29^th a vote was taken by the entire House of Representatives on House Concurrent Resolution 1008 which was a non-binding statement that the state should stop implementing Common Core.  The Resolution failed on a vote of 31 yea votes to 35 nays.

On February 25^th the House once again debated a non-binding concurrent resolution expressing opposition to the Common Core Standards.  This time the margin of support for the Common Core Standards (or perhaps the opposition to more debate on a topic that was becoming tedious) was even greater as the measure failed on a vote of 24 yeas and 45 nays.

Of eight bills listed in the “Common Core” subject heading on the Legislative Research Council’s website, only two have been approved.  Both of those bills deal with time frames and hearing procedures for adopting educational standards.  Neither of them will impede Common Core Standards.  With no replacement in sight for these standards the South Dakota Chamber of Commerce thanks the legislature, the Governor’s office and particularly Education Secretary Melody Schopp for keeping the state focused on what the future will demand of South Dakota’s citizens if they are to have the level of success in the future that has been achieved in the past.

Unemployment Insurance payments make benefits possible – even for officers.

As reported previously in Capitol-ism, SB 69 is designed to fix a rather odd situation in the Unemployment Insurance system.  Under current rules, business officers and owners are required to pay UI taxes but cannot receive benefits if they leave (or are tossed) from the company.  Taking money from people and putting it into a system that won’t let them collect is the kind of operation that put Bernie Madoff behind bars for life.

The bill is sponsored by Senator Deb Peters (R-Hartford) whose consulting and accounting practice puts her in touch with many businesses facing this conundrum.  Her first approach was to simply excuse officers and owners from having to pay the UI taxes since they don’t collect benefits.  Turns out this irritates the federal unemployment system which expects everyone to pay something to someone and if South Dakota business owners weren’t going to pay the state . . . they would pay the federal government instead.

Not to be deterred, Senator Peters turned to the staff at the Department of Labor, who in turn turned to an unheralded source for an answer . . . North Dakota.  After making so many jokes at North Dakota’s expense and having decided to show them some level of respect now that they are rich, the legislature is embracing the language below as a means of allowing officers to claim UI benefits, if they fit the overall criteria of being separated from the business “through no fault of their own.”  Here is the language being added to South Dakota’s UI statutes:

The employee is an officer who exercises substantial control in decisions to take or

not to take action on behalf of a corporation and has no other alternative than to leave

employment with that corporation. This does not preclude a corporate officer who

does not exercise substantial control in any decision to take or not take action on

behalf of a corporation from being found to have good cause to leave employment

under the circumstances set out in subdivisions (1) to (7), inclusive.

The South Dakota Chamber of Commerce and Industry supports this new approach, thanks Senator Peters and House Majority Leader David Lust (R-Rapid City), who is the prime sponsor in the House.  The Chamber also tips its hat to North Dakota for having found an answer to this dilemma.  Although if given a choice between adopting legislative ideas from North Dakota or getting some their oil . . . we’re slick enough to take the oil.