Home > 2015 SD Legislative Session > 3 bills vetoed by Governor Daugaard on March 20

3 bills vetoed by Governor Daugaard on March 20

March 20, 2015
Sen Brock Greenfield speaking on the SD Senate floor. Photo by Ken Santema 02/16/15.

Sen Brock Greenfield speaking on the SD Senate floor. Photo by Ken Santema 02/16/15.

Today, March 20, Governor Daugaard finally decided which bills he felt were worthy of a veto. He sent out releases about his veto of SB 100, veto of SB 136, and veto of SB 159.

None of these are the bills was I was truly hoping would be vetoed (although I am happy to see SB 100 get a veto). It almost seems like Daugaard looks for bills to veto that most people really don’t care about…

SB 100 – SoDakLiberty Posts – Create a leased residential property classification.

Sen Deb Peters (R, Dist 9) and Rep Don Haggar (R, Dist 10) are the prime sponsors. This bill passed Senate Taxation 4-3. It was amended on the Senate floor to remove the new levy for this classification. The amended version of the bill passed 25-8. The bill had a slight amendment in House Taxation and passed that committee 10-5 and the House floor 40-27. The Senate concurred 25-8 to the changes made in the House.

This bill would have created a new property tax classification of leased residential property. Technically the bill in its current form is a way for the state to collect data about how many leased residential properties there are in the state so that data can be used to push for a new tax levy in the future. This would theoretically allow for lower property taxes that can be passed on to families struggling to pay their rent. That is what proponents of the bill were saying. Personally I believe the bill have done the opposite long-term. Long-term I believe this classification change would open up the door to property taxes per unit when dealing with rental situations. That could end up being one heck of a large tax increase. It has happened in other states

Additionally I don’t think enough property owners would go down to the County office and change the classification of their property just so the state can collect data. In its current form, this bill really doesn’t incentive property owners into going through the trouble of changing their property tax classification.

This is a bill I am more than happy to see the Governor veto. He did it more for the reasons stated in his release:

Senate Bill 100 is a first step toward a different property tax levy for leased residential property – a change that will shift the property tax burden onto agricultural, nonagricultural, and owner-occupied property taxpayers, without any guarantee of savings for residents of leased properties.  For that reason, I oppose this bill and I ask that you sustain my veto.

He is correct, if fully implemented in the future this bill would shift tax burden. I just don’t think it would have stayed beneficial. I don’t see the legislature overriding this veto.

SB 136 – SoDakLiberty Posts – Exclude certain municipal taxes from the gross receipts used to determine the tax liability for customers served by electric cooperatives and electric utilities.

Sen Corey Brown (R, Dist 23) and Rep Al Novstrup (R, Dist 3) are the prime sponsors. This bill was gutted by Senate Tax. It passed the committee 6-1 after being hoghoused. The new bill seems to do about the same thing, just in a different way. It was then gutted again on the Senate floor, and language similar to the original bill was hoghoused into it. The re-hoghoused bill passed the Senate floor 32-0. It had a couple of amendments in House Tax and passed that committee 12-0. It then had a title amendment on the House floor to reflect the changes made in House Tax and passed 67-1. The Senate concurred with the House changes 34-0.

Basically this looks like a good bill. It prevents a tax from being taxed. The Governor gave this reason for his veto:

Senate Bill 136 would create a special exemption for rural electric companies that no other South Dakota business is given.  It would allow a rural electric company to deduct its payment in lieu of property taxes from its gross receipts before paying state and municipal sales tax.

Creating this special dispensation is contrary to the broad based sales tax principles that are the foundation of South Dakota’s sales tax, the primary source of state government funds, and could easily lead to other businesses requesting similar exemptions in future years.

South Dakota should not create a special tax calculation rule for rural electric companies that no other South Dakota business is given.  I oppose this bill and I ask that you sustain my veto.

I am going to have to research this bill a little bit more. Perhaps my understanding of this particular piece of legislation is wrong. It doesn’t match up with Daugaard’s assessment. The bill passed through both chambers strong enough that a veto override is possible. The question is whether the legislators actually have the guts to do so.

SB 159 – SoDakLiberty Posts – Exempt certain amateur sports coaches from sales and use tax.

Sen Brock Greenfield  (R, Dist 2) and Rep Tona Rozum (R, Dist 20) are the prime sponsors. This bill had a bit of a journey in the Senate. It originally failed a Do Pass vote in Senate Taxation 3-3, after another member came back to the committee it passed Senate Taxation 4-3. It then failed on the Senate floor 17-15. At the time the prime sponsor Sen Greenfield was out with an injury. Then came a vote to reconsider, which passed 28-3. Finally with Sen Greenfield back it passed the Senate floor 22-13. When it hit House Taxation it passed 10-2 and the House floor passed it 63-5.

This bill is actually pretty simple. It exempts amateur baseball coaches from Sales and Use Tax if the team is a 501(c)(19) non-profit.

Here is part of the reason given by Daugaard for the veto:

Exemptions to the sales tax base, such as Senate Bill 159, erode the sales tax base and diminish a steady, reliable source of revenue for our State.  Senate Bill 159’s exemption benefits a select group and could lead to additional exemption requests in the future.  We must resist any attempt to erode the sales tax base and must work to keep the sales tax base as broad, and therefore as stable, as possible.

In addition, Senate Bill 159’s exemption creates a privilege to the amateur baseball teams sponsored by select organizations, specifically American Legion and VFW organizations. While I admire these organizations and appreciate the work they do, it is bad tax policy to exempt coaches in these organizations, while continuing to tax other amateur baseball coaches

I must say I really never cared one way or the other about this bill. Personally I think the legislature should just let this veto stand. Let Sen Greenfield come back next year with a less specific coach exemption. There will still likely be resistance to the bill from the Governor, but at least he won’t be able to say it was because only a certain type of coach was targeted.

  1. Richard Winger
    March 20, 2015 at 4:05 pm

    Are there still bills that he hasn’t acted on?  I looked on his web page and can’t tell. And the legislature’s web page doesn’t even have the vetoes that we already know about, so it isn’t up to date.  Richard Winger 415-922-9779 PO Box 470296, San Francisco Ca 94147 From: SoDakLiberty To: richardwinger@yahoo.com Sent: Friday, March 20, 2015 1:07 PM Subject: [New post] 3 bills vetoed by Governor Daugaard on March 20 #yiv4832173708 a:hover {color:red;}#yiv4832173708 a {text-decoration:none;color:#0088cc;}#yiv4832173708 a.yiv4832173708primaryactionlink:link, #yiv4832173708 a.yiv4832173708primaryactionlink:visited {background-color:#2585B2;color:#fff;}#yiv4832173708 a.yiv4832173708primaryactionlink:hover, #yiv4832173708 a.yiv4832173708primaryactionlink:active {background-color:#11729E;color:#fff;}#yiv4832173708 WordPress.com | Ken Santema posted: “Today, March 20, Governor Daugaard finally decided which bills he felt were worthy of a veto. He sent out releases about his veto of SB 100, veto of SB 136, and veto of SB 159.None of these are the bills was I was truly hoping would be vetoed (alt” | |

    • March 20, 2015 at 4:07 pm

      Just five, and they all passed. I’m finishing the blog post about it now. SB 67 and SB 69 are two of the bills Daugaard decided to sign into law.

  1. March 20, 2015 at 4:15 pm
  2. April 1, 2015 at 6:00 am
  3. April 1, 2015 at 8:26 am
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