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Only one of three vetoes were overturned by the SD legislature

April 1, 2015 Comments off

On Monday, March 30, the SD legislature held the final day of the 2015 session. The whole purpose of this final day was to consider any gubernatorial vetoes. I’ve blogged about the three bills vetoed before (and a cliff note version here). SB 136 was the only bill of the three to have the veto overturned. SB 100 and SB 159 both had the veto sustained.

Here are the three bills that were considered for a veto override and how they ended up:

SD SenateSB 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. Sen Peters pushed hard on the Senate floor to override the governor’s veto of SB 100. She framed it as a way to look at whether government is getting in the way of affordable housing. She also noted that SB 100 doesn’t actually change the tax rate for leased residential property in its current form. That would have to be a discussion for a future legislature once enough data was collected from this new classification. Most of the opposition to this bill seemed to stem from a belief that property tax savings would not be passed on to tenants, thus it wouldn’t do anything for affordable housing anyhow.

The Senate failed to override the governor’s veto. 24 yes votes were needed and the final roll call vote ended up 22-10. Personally I was happy to see this one fail. Yes this was being touted as a way to possibly decrease taxes on leased residential property. But other states have taken such moves and actually implemented systems that do the opposite. Plus, in order for this bill to work it would have required all of the landlords across the state to change the classification of their property just so the state could collect data. I find it quite unlikely that would happen.

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. SB 136 is an odd bill to talk about. It has to do with how taxes are applied to certain electric cooperatives and certain municipalities. Sen Brown didn’t really spend too much time talking about the bill. It had passed overwhelmingly the first time through the Senate, and there was nobody speaking on the governors behalf to sustain the veto. The Senate voted 31-1 to overturn the governor’s veto.

On the House side it was up to Rep Novstrup to push for the veto override. He pushed the fact that the Revenue Department was imposing a tax on a tax. There weren’t any Representatives that stood to speak on behalf of sustaining the governor’s veto. The veto override passed through the House by a vote of 63-1. That made SB 136 the only successful veto override of the 2015 legislative session.

Sen Tidemann asking Sen Greenfield a question about SB 159. Photo by Ashton Santema 03/30/15.

Sen Tidemann asking Sen Greenfield a question about SB 159. Photo by Ken Santema 03/30/15.

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. I thought Sen Greenfield made a pretty good case as to why the veto should be overridden. He noted it was through a reinterpretation of tax law by bureaucrats that these coaches suddenly were subject to sales tax. It was also noted that the only amateur coaches impacted by this bill would be for the American Legion and VFW leagues. Greenfield noted it has been harder and harder for these organizations to find coaches, and that between self-employment taxes and sales taxes it is getting even harder. Many of the other Senators speaking on behalf of the bill focused on the good that baseball programs do for the youth in SD.

The Senate vote for the veto override of SB 159 was 21-11. That was three short of the 24 votes needed for a veto override. I will admit I didn’t really care one way or the other about the bill. But I think in Greenfield’s final push to override the veto he made a good case and that this veto probably should have been overridden.

SD Senate and House have three veto’s to consider on Mon March 30

March 29, 2015 2 comments
SD State capital. Photo by Ken Santema 02/11/15.

SD State capital. Photo by Ken Santema 02/11/15.

Monday, March 30, is the final legislative day in 2015. Both the House and Senate will convene at 10:00 AM to consider whether to override Governor Daugaard’s veto of three bills. I‘ve blogged about the three vetoes before. Here is the cliff note version of each bill:

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 creates 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 would 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. In a state where there are few sources of revenue, this bill could open a Pandora’s box of new revenue enhancements.

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 would prevent a tax from being taxed. I really don’t understand the Governor’s veto of the bill. It just doesn’t align with how I am reading the bill. Perhaps I just haven’t studied this particular bill enough.

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 is actually pretty simple. It exempts amateur baseball coaches from Sales and Use Tax if the team is a 501(c)(19) non-profit. I believe it may have been harder for Daugaard to veto if it hadn’t been specific to one certain type of amateur coach.

3 bills vetoed by Governor Daugaard on March 20

March 20, 2015 5 comments
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.

House Taxation committee has 3 bills on Tues Mar 3

March 2, 2015 1 comment
My son Lawson playing baseball. Photo by Ken Santema summer 2014.

My son Lawson playing baseball. Photo by Ken Santema summer 2014.

On Tuesday, March 3rd, at 7:45 AM the SD House Commerce and Energy committee will take on 3 bills.

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. 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.

SB 182 – SoDakLiberty Posts – Revise the rate of interest for late payment of certain taxes.

Sen Larry Tidemann (R, Dist 7) and Rep Scott Munsterman (R, Dist 7) are the prime sponsors. This would revise the interest that people or entities are late on paying certain taxes. This bill was amended in Senate tax to change the interest rates from the original lower rates in the bill. Currently law has this interest rate for late taxes set to 1.25% or five dollars, which ever is greater, for the first month; then 1.25% for each month afterwards. The amended form of this bill changes the interest rate down to 1%. The amended bill also changes the maximum interest rate to 24% (currently at 30%) upon delinquent taxes if the secretary determines that the delinquent payment was caused by a mistake of law and was not caused by an intent to evade the tax. After being amended the bill passed Senate Tax  and the Senate floor with no opposition.

Part of me wonders how this will bill will tie in with the collection agency the legislature is trying to enact via HB 1228 (SoDakLiberty Posts). The lower interest rates won’t mean much when a 20% collection fee is added on by the debt collectors.

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

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. Basically this looks like a good bill. It prevents a tax from being taxed. The re-hoghoused bill passed the Senate floor 32-0.

Senate Transportation committee has 2 bills on Weds Feb 25

February 24, 2015 1 comment

Rfc1394-2-BarricadesOn Wednesday, February 25th, at 8:30 AM the SD Senate Transportation committee will take on 2 bills.

HB 1121 – SoDakLiberty PostsAuthorize township boards to establish speed zones on township roads.

Rep Tona Rozum (R, Dist 20) and Sen Mike Vehle (R, Dist 20) are the prime sponsors. This bill passed through the House with no opposition. Current law states no person can go faster than 55 on township roads. What is odd to me is that townships can’t set speed limits on the roads they are responsible for. This bill aims to change that.

HB 1122  – SoDakLiberty PostsAuthorize township boards to designate certain roads as no maintenance roads.

Rep Tona Rozum (R, Dist 20) and Sen Mike Vehle (R, Dist 20) are the prime sponsors. This bill passed House Local Government 11-1. It was amended on the House floor and passed with a vote of 61-6. This bill allows township designate roads as no maintenance. Here again this is something I though townships should already have been able to do with their roads. I can name quite a few township roads in the NE part of the state that should be closed.

House Local Government has four bills on Thurs Feb 5

February 4, 2015 1 comment

Speed-Limit-55-signOn Thursday, February 5th, at 10:00 AM the SD House Local Government committee will take on 4 bills.

HB 1121 – SoDakLiberty PostsAuthorize township boards to establish speed zones on township roads.

Rep Tona Rozum (R, Dist 20) and Sen Mike Vehle (R, Dist 20) are the prime sponsors. Current law states no person can go faster than 55 on township roads. What is odd to me is that townships can’t set speed limits on the roads they are responsible for. This bill aims to change that.

HB 1122 – SoDakLiberty PostsAuthorize township boards to designate certain roads as no maintenance roads.

Rep Tona Rozum (R, Dist 20) and Sen Mike Vehle (R, Dist 20) are the prime sponsors. This bill allows township to abandon roads and designate them as no maintenance. Here again this is something I though townships should already have been able to do with their roads.

HB 1135 – SoDakLiberty PostsExpand certain bonding provisions regarding local government officials and employees.

Rep David Anderson (R, Dist 16) and Sen Deb Peters (R, Dist 9) are the prime sponsors. This would allow the governing board of any political subdivision of this state to purchase “a blanket bond, blanket crime coverage, an insurance policy, or an individual bond” to cover everyone within that group. Technically that may be much cheaper than individual bonds. It also states the blanket must meet the required minimums to be used in place of the bonds required already.

HB 1136 – SoDakLiberty PostsRevise certain provisions concerning the administration of unlocatable mineral, leasehold, or royalty interests.

Rep Sam Marty (R, Dist 28B) and Sen Betty Olson (R, Dist 28) are the prime sponsors. This changes giving money for administrative costs into the county where the minerals are located; current law says where the trustee is located.

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