Archive

Archive for January, 2016

House Commerce has 3 bills on Weds Feb 3

January 31, 2016 Comments off

Updated: Note added to HB 1067.

On Wednesday, February 3, at 10:00 AM the SD House Commerce and Energy committee will take on 3 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

These bills are completely out of the range my experience/interest. But the final bill looking to overturn IM  17 from the 2014 election is worth paying attention to.

HB 1090 (SoDakLiberty Posts) – Require certain statements and audits concerning insurance pooling arrangements to be filed with the Department of Legislative Audit.

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Dan Dryden (R, Dist 34) and Sen David Novstrup (R, Dist 3) are the prime sponsors.

I’ll have to listen to this bills testimony to comment on it. Here is the entire bill:

 Section 1. That chapter 1-24 be amended by adding a NEW SECTION to read:
    Each pool arrangement, as defined in § 1-24-11, shall have an annual audit of its financial statements conducted in accordance with generally accepted government auditing standards. A copy of the audited financial statements shall be filed with the Department of Legislative Audit within twelve months of the close of the previous fiscal year for the pool arrangement. The department shall make audited financial statements filed pursuant to this section available to the public on the department’s website. The auditor-general may examine all financial records, related to funds provided by the state or its political subdivisions, of any pool arrangement if deemed necessary and in the public interest by the auditor-general.

HB 1122 (SoDakLiberty Posts) – Establish procedures for payment of insurance claims by credit card or electronic funds transfer to health care professionals.

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Jim Stalzer (R, Dist 11) and Sen Blake Curd (R, Dist 12) are the prime sponsors.

I don’t understand why this needs to be done in codified law. Another bill to listen to.

HB 1067 (SoDakLiberty Posts) – Promote quality, competition, and freedom of choice in the health insurance market place.s

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Tim Rounds (R, Dist 24) and Sen Deb Peters (R, Dist 9) are the prime sponsors.

This is a hot one. This appears to be an attempt to overturn IM 17, which was passed by the voters in 2014. At that time I thought IM 17 was a bad law, and still do. But I do question whether it is reasonable to mandate a change to an IM that was used as a mandate to overrule other mandates. That is just a nightmare situation. Over at Dakota War College there are some posts on this subject from Pat Powers.

At this time I’m leaning against this bill. But I’ll have to listen to testimony.

There is a note at the bottom of the agenda which states:

Committee will hear initial testimony on HB1067. Final committee action will take place on February 10 at 3:45 pm or 15 minutes after session in Room 414.

That is an odd move…

Senate Health has 2 bills on Weds Feb 3

January 31, 2016 Comments off

9842638On Wednesday, February 3, at 10:00 AM the SD Senate Health and Human Services committee will take on 2 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

Both of these are department bills that flew through the House.

HB 1025 (SoDakLiberty Posts) – Place certain substances on the controlled substances schedule and to declare an emergency.

SoDakLiberty Stance: Opposed
Prime Sponsors: The Committee on Health and Human Services is the prime sponsor at the request of the Department of Health.

This bill went through the House with no opposition. I only oppose this bill because it is done to comply with bad War on Drugs policies of the DEA.

HB 1027 (SoDakLiberty Posts) – Revise certain provisions regarding licensure of massage therapists.

SoDakLiberty Stance: Not Opposed
Prime Sponsors: The Committee on Health and Human Services is the prime sponsor at the request of the Board of Massage Therapy.

This bill updates the practice Act dealing with the licensure of massage therapists. It was slightly amended in House Health.

Personally I think the underlying law is protectionism to keep competition out. But there doesn’t seem to be anything nefarious in this bill, so I am not opposed to the bill itself.

House Judiciary has 3 bills on Weds Feb 3, asset forfeiture bills and the Nonprofit Act

January 31, 2016 Comments off

21198854On Wednesday, February 3, at 10:00 AM the SD House Judiciary committee will take on 3 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

This is a BIG meeting. There are two bills relating to civil forfeitures, and one HUGE act to reform Nonprofits in South Dakota.

HB 1085 (SoDakLiberty Posts) – Provide for the forfeiture of any vehicle used by a person convicted of a third offense for driving under the influence.

SoDakLiberty Stance: Opposed
Prime Sponsors: Rep Don Haggar (R, Dist 10) and Sen Jenna Haggar (R, Dist 10) are the prime sponsors.

This is bad. It would allow more asset forfeiture by the state. Here is the complete bill:

Any person who is convicted of a third offense violation of § 32-23-1 may forfeit to the state the person’s interest in the vehicle used in the commission of the violation. The state shall process the forfeiture pursuant to the proceedings of § 34-20B-71 to § 34-20B-80, inclusive, and § 34-20B-85 to § 34-20B-88, inclusive. No vehicle may be forfeited pursuant to this section if a co-owner of the vehicle is an innocent party and the forfeiture would create undue hardship on the co-owner.

Yes, DUI’s are bad. Nobody should be driving under the influence. I cannot see any good reason to expand forfeiture to this area. If the legislators think there should be more of a penalty, then go ahead and try to pass a law calling for a greater penalty than currently prescribed by law.

And as to the exception. Who determine if the forfeiture would “create undue hardship to the co-owner”? This is a bad bill that will hopefully be killed by Judiciary.

It is also worth considering what I had to say about another forfeiture bill this year SB 25 (SoDakLiberty Posts):

According to a report from the Institute for Justice South Dakota already has poor forfeiture protections in place, getting a D- on the scorecard. Part of the reason for that bad score is how easy it is for law enforcement to take property in South Dakota. But another part, and a part I am truly worried about, is explained by this paragraph in the report:

Compounding those problems, South Dakota law does not require law enforcement agencies to track or report their forfeitures. By filing a South Dakota Open Records Law request, the Institute for Justice was able to obtain records of forfeiture proceeds from the South Dakota Office of the Attorney General, which prosecuted almost $4.1 million in forfeitures between 2010 and 2013, or over $1 million per fiscal year. These figures represent all drug-related civil forfeitures conducted in South Dakota during this time.

What is happening with all of this forfeited property and money? Do we really want to expand a program without actually knowing what is going on currently?

HB 1088 (SoDakLiberty Posts) – Revise and consolidate certain civil forfeiture provisions.

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Don Haggar (R, Dist 10) and Sen Corey Brown (R, Dist 23) are the prime sponsors.

This is a large Act that I’ll wait until hearing testimony to comment on. There is simply too much going on.

HB 1068 (SoDakLiberty Posts) – Adopt the South Dakota Nonprofit Corporation Act.

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Mike Stevens (R, Dist 18) and Sen Arthur Rusch (R, Dist 17) are the prime sponsors.

This is a VERY long bill. A version of this bill was brought forth last year, HB 1078 (SoDakLiberty Posts). But the Act wasn’t quite ready for prime time and was tabled by the committee.

This bill was hoghoused last week. That hoghouse fixed a numbering issue with the bill as drafted.

There has been some testimony on the bill so far. It is also a bill I have been in communication with some lawyers about who work with non-profits. They are keenly interesting in this Act because it has some long-reaching implications that could be good for non-profits that want to move to South Dakota. I know of a few non-profits that would love to move to South Dakota, but cannot because the current laws governing non-profits are lacking.

I hope to blog more about this as I learn more about the act. In the meantime a good amount of information about the Act is available on the State Bar of South Dakota website.

Senate State Affairs has 2 bills on Weds Feb 3, A look at proposed Internet Sales Tax

January 31, 2016 2 comments

20073209

Updated: SB 45 has been taken off the agenda. That is probably for the best. It leaves more time to focus on the Internet Tax.

On Wednesday, February 3, at 10:00 AM the SD Senate State Affairs committee will take on 2 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

Most of this post will look at the proposed Internet Sales Tax. It is maybe not fair calling it that, because it looks to apply to all goods that are sold to and shipped into SD.

SB 45 (SoDakLiberty Posts) – Revise certain provisions of the building South Dakota fund programs.

SoDakLiberty Stance: Undecided
Prime Sponsors: The Committee on State Affairs is the prime sponsor at the request of the Governor’s Office of Economic Development.

This bill is on my watchlist. Here is what I said when the bill was prefiled:

The Building South Dakota fund was created via SB 235 in 2013 with the goal “of building and reinvesting in South Dakota’s economy and to create high quality jobs”. Personally I’ve seen it more as a slush fund for the legislative branch to interfere in the market… but I digress.

This bill changes how the 25% that goes to the South Dakota housing opportunity fund is handled. It also makes some other changes I would rather not comment on until I hear testimony during the committee meeting. At this time I have a feeling some of the proposed changes gives the GOED office even more flexibility, something that doesn’t seem to be a problem…

SB 106 (SoDakLiberty Posts) – Provide for the collection of sales taxes from certain remote sellers, to establish certain Legislative findings, and to declare an emergency.

SoDakLiberty Stance: Opposed
Prime Sponsors: Sen Deb Peters (R, Dist 9) and Rep Roger Hunt (R, Dist 25) are the prime sponsors.

The state going after more sales tax revenue.

Section 1

Section 1 of the bill is worth looking at:

    Notwithstanding any other provision of law, any seller selling tangible personal property, products transferred electronically, or services for delivery into South Dakota, shall be subject to chapters 10-45 and 10-52, and the seller shall collect and remit the sales tax. The seller shall follow all applicable procedures and requirements of law as if the seller had a physical presence in the state, if the seller meets either of the following criteria:
            (1)    The seller’s gross revenue from delivery of tangible personal property, any product transferred electronically, or services into South Dakota in the previous calendar year or current calendar year exceeds one hundred thousand dollars; or

            (2)    The seller sold tangible personal property, any product transferred electronically, or services for delivery into South Dakota in two hundred or more separate transactionsin the previous calendar year or the current calendar year.

So this would impose sales tax on goods being shipped to SD. It would only apply if that seller has over $100,000 in sales or 200 or more transactions in a calendar year.

Section 2

Section 2 of the bill would allow the DOR to go after people they think are breaking this law:

Section 2. That the code be amended by adding a NEW SECTION to read:

    Notwithstanding any other provision of law, and whether or not the state initiates an audit or other tax collection procedure, the state may bring a declaratory judgment action under § 21-24-1 in any circuit court against any person the state believes meets the criteria of section 1 of this Act to establish that the collection obligation is applicable and valid under state and federal law. The circuit court shall act on this declaratory judgment action as expeditiously as possible and the circuit court shall proceed with priority over any other action presenting the same question in any other venue.

I’ve said before that internet sales tax won’t work because it would allow the state to go outside of its taxing jurisdiction. The state is trying to give itself that power here….

Section 3

Section 3 acknowledges that even the authors of this Act realize this might not be constitutional:

   Section 3. That the code be amended by adding a NEW SECTION to read:
    During a pending action provided in section 2 of this Act, and upon determining that a question is presented regarding the constitutionality of this law the court shall on the state’s motion or the court’s own initiative enjoin the state from enforcing the obligation in section 1 of this Act against any taxpayer who does not affirmatively consent or otherwise collect the tax on a voluntary basis. The injunction does not apply if there is a previous judgment from a court establishing the validity of the obligation in section 1 of this Act with respect to the particular taxpayer.

If a law appears to have constitutional issues, it might be a good idea to kill it…

Section 4

Section 4 is trying to say that only the SD Supreme Court can handle any appeals:

Section 4. That the code be amended by adding a NEW SECTION to read:
    Any appeal from the decision with respect to the cause of action established by this Act may only be made to the State Supreme Court. The appeal shall be heard as expeditiously as possible.

But what if it is brought as a federal case?

Section 5

Section 5 seems OK.

 Section 5. That the code be amended by adding a NEW SECTION to read:
    No obligation to collect and remit the sales tax required by this Act may be applied retroactively.

Does that mean they won’t go after people who shipped things to SD before the enactment of this bill?

Section 6
   Section 6. That the code be amended by adding a NEW SECTION to read:
    If an injunction provided by this Act is lifted, the state shall assess and apply the collection obligation only from that date forward with respect to any taxpayer covered by the injunction.

The state is going to be nice when there was an injunction.

Section 7

Section 7 of the bill is basically a resolution to be placed into codified law:

Section 7. That the code be amended by adding a NEW SECTION to read:
    The Legislature finds that:
            (1)    The inability to effectively collect the sales or use tax from remote sellers who deliver tangible personal property, any product transferred electronically, or services directly to the citizens of South Dakota is seriously eroding the sales tax base of this state, causing revenue losses and imminent harm to this state through the loss of critical funding for state and local services;
            (2)    The harms from the revenue losses are especially serious in South Dakota because the state has no income tax, and sales and use tax revenues are essential in funding state and local services;
            (3)    Despite the fact that a use tax is owed on tangible personal property, any product transferred electronically, or services delivered for use in this state, many remote sellers actively market sales as tax free or no sales tax transactions;
            (4)    The structural advantages of remote sellers, including the absence of point-of-sale tax collection, along with the general growth of online retail, make clear that further erosion of this state’s sales tax base is likely in the near future;
            (5)    Remote sellers who make a substantial number of deliveries into or have large gross revenues from South Dakota benefit extensively from this state’s market, including the economy generally, as well as state infrastructure;

            (6)    In contrast with the expanding harms caused to the state from this exemption of sales tax collection duties for remote sellers, the costs of that collection have fallen. Givenmodern computing and software options, it is neither unusually difficult nor burdensome for remote sellers to collect and remit sales taxes associated with sales into South Dakota;

            (7)    As Justice Kennedy recently recognized in his concurrence in Direct Marketing Association v. Brohl, the Supreme Court of the United States should reconsider its doctrine that prevents states from requiring remote sellers to collect sales tax, and as the foregoing findings make clear, this argument has grown stronger, and the cause more urgent, with time;
            (8)    Given the urgent need for the Supreme Court of the United States to reconsider this doctrine, it is necessary for this state to pass this law clarifying its immediate intent to require collection of sales taxes by remote sellers, and permitting the most expeditious possible review of the constitutionality of this law;
            (9)    Expeditious review is necessary and appropriate because, while it may be reasonable notwithstanding this law for remote sellers to continue to refuse to collect the sales tax in light of existing federal constitutional doctrine, any such refusal causes imminent harm to this state;
            (10)    At the same time, the Legislature recognizes that the enactment of this law places remote sellers in a complicated position, precisely because existing constitutional doctrine calls this law into question. Accordingly, the Legislature intends to clarify that the obligations created by this law would be appropriately stayed by the courts until the constitutionality of this law has been clearly established by a binding judgment, including, for example, a decision from the Supreme Court of the United States abrogating its existing doctrine, or a final judgment applicable to a particular taxpayer; and            (11)    It is the intent of the Legislature to apply South Dakota’s sales and use tax obligations to the limit of federal and state constitutional doctrines, and to thereby clarify that South Dakota law permits the state to immediately argue in any litigation that such constitutional doctrine should be changed to permit the collection obligations of this Act.

OK….

Section 8

Finally, Section 8 of the bill would declare an “emergency” so the DOR can start going after people on April 1:

Section 8. Whereas, this Act is necessary for the support of the state government and its existing public institutions, an emergency is hereby declared to exist, and this Act shall be in full force and effect on and after April 1, 2016.

Conclusion

This is a bad bill, and not just because of the constitutional issues. I’ll wait and see if this bill makes it through committee to do a post explaining why I think it is bad. Hopefully State Affairs kills it!

Senate Tax has 2 bills on Weds Feb 3

January 31, 2016 1 comment

9749720On Wednesday, February 3, at 10:00 AM the SD Senate Taxation committee will take on 2 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

HB 1049 (SoDakLiberty Posts) – Revise certain provisions regarding references to the Internal Revenue Code.

SoDakLiberty Stance: Not Opposed
Prime Sponsors: The Committee on Taxation is the prime sponsor at the request of the Department of Revenue.

This bill passed through the House without opposition. Here is what I said when the bill was prefiled:

A bill that has to be passed each year updating references to federal IRS code. This year the DOR is getting a bit more efficient. They are placing all of these references in one section of code, and pointing all the references to IRS code to that section. That should make it easier to make this change each year (which will still need to be done legislatively).

HB 1050 (SoDakLiberty Posts) – Repeal certain obsolete mini-storage tax refund provisions.

SoDakLiberty Stance: Not Opposed
Prime Sponsors: The Committee on Taxation is the prime sponsor at the request of the Department of Revenue.

This bill had no opposition going through the House. This is basically a cleanup bill. Here is what I said when the bill was prefiled:

The two statutes this bill repeals to statutes that were enacted as a response to the South Dakota Supreme Court’s decision in In the Matter of the Sales Tax Liability of James Pirmantgen & Patricia Carlson, 2008 SD 127 (December 23, 2008). For anyone interested the opinion from that case can be read on the Court Listener website.

Senate Transportation has 2 bills on Weds Feb 3

January 31, 2016 Comments off

On Wednesday, February 3, at 8:00 AM the SD Senate Transportation committee will take on 2 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

SB 7 (SoDakLiberty Posts) – Revise the composition of the state trunk highway system.

SoDakLiberty Stance: Undecided
Prime Sponsors: The Committee on Transportation is the prime sponsor at the request of the Department of Transportation.

Here is what I said about the bill when it was prefiled:

Screenshot of DOT functional classification map.

Screenshot of DOT functional classification map.

This bill would modify the legal description for where State Highway 17. This applies to the stretch between State Highway 44 to State Highway 42 in Minnehaha and Lincoln counties. I’m guessing this is being changed to reflect construction changes made during the last year.

SB 59 (SoDakLiberty Posts) – Revise certain provisions regarding the application of the special annual road funding levy.

SoDakLiberty Stance: Undecided
Prime Sponsors: Sen Mike Vehle (R, Dist 20) and Rep Mary Duvall (R, Dist 24) are the prime sponsors.

I’ll have to listen to testimony on the bill. But it would appear to be aimed at slowing down the growth of the levy.

House Education has 3 bills on Weds Feb 3, standardized testing opt-out and SDHSAA oversight.

January 31, 2016 2 comments

20797209On Wednesday, February 3, at 7:45 AM the SD House Education committee will take on 3 bills. This is compiled using the agenda at the time of composing this post. Agendas can and do change!

This meeting has a couple of big bills. One would allow parents to keep their children out of state mandated assessments. This is a big bill for those fighting against Common Core and standardized testing. Another bill would provide legislative oversight of the SDHSAA. This is a meeting to watch!

HB 1061 (SoDakLiberty Posts) – Provide a tuition benefit to certain teachers who enroll in courses under the management and control of the Board of Regents that are not subsidized by the general fund.

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Mike Stevens (R, Dist 18) and Sen Arthur Rusch (R, Dist 17) are the prime sponsors.

Currently certain teachers that have to take certain classes as part of their job can get 50% of their tuition reimbursed. This would appear to extend that to distance education classes, and not just apply to physical classes. This might be a good expansion of the program, if I am reading the bill correctly that is. Testimony will have to be listened to.

HB 1096 (SoDakLiberty Posts) – Provide for the exemption of certain students from the requirement to take certain academic assessment tests.

SoDakLiberty Stance: Support
Prime Sponsors: Rep Jim Bolin (R, Dist 16) and Sen Jenna Haggar (R, Dist 10) are the prime sponsors.

This bill would modify the statute dealing with mandated academic achievement tests per § 13-3-55. Currently it is mandated that children going to a public school have to take certain assessment tests, tests that have no direct impact upon the student. HB 1096 would provide an avenue for parents that don’t believe their children should be taken these tests.

Personally I love this bill. The assessments in question are an archaic part of the current outcome-based education system. It is time to get away from standardized testing and start trying to find ways to get the greatest potential out of each student.

HB 1111 (SoDakLiberty Posts) – Require the high school interscholastic activities association to promulgate major policy statements under the procedures of the administrative rules process.

SoDakLiberty Stance: Undecided
Prime Sponsors: Rep Roger Hunt (R, Dist 25) and Sen Brock Greenfield  (R, Dist 2) are the prime sponsors.

This is an interesting bill aimed at the South Dakota High School Activities Association (SDHSAA). Some of the bill is language cleanup. But the more interesting part is this addition to the end of § 13-36-4:

However any rule or policy statement of the association which concerns or deals with major and significant social policy involving the exercise of judgment related to students participating in the activities shall be promulgated pursuant to chapter 1-26.

I like this change. I’ve often said the State should either get the SDHSAA completely out of State codified law, or actually provide some oversight. This bill would provide that oversight. Making the SDHSAA comply with Chapter 1-26 would mean rule changes would have to be submitted to the Interim Rules Review Committee just like state agencies have to. With or without the current transgender policy debate going on, I think this is a good policy change that should create more transparency within the SDHSAA.

%d bloggers like this: