The Legislative/Governmental Affairs Committee meets Tuesday afternoons at 4:00pm on a weekly basis while the South Dakota Legislature is in session. Bills of interest to the commercial construction industry are discussed with our Lobbyist and recommendations for action are made.
A link to the bills being considered in this legislative session can be found on the following link:
http://legis.state.sd.us/sessions/2012/billlist.aspx
Today is the last day of the main run of the 2012 Legislative Session. Legislators have been considering at least fifty amendments to the general budget bill, and will make those final budget decisions today. Legislators will return to the Capitol on Monday, March 19 to consider any vetoes issued by Governor Daugaard.
AGC's last bill of interest has passed both houses and is on the way to the Governor's desk for his consideration.
Late last week, AGC was part of a coalition that hog housed a bill and inserted language that sought to take the large construction project tax rebate program off the November ballot by repealing the law that was referred after the 2011 Legislative Session. The hog house language also put back into law a restructured version of the large construction project tax rebate program. Even though the hog housed bill, SB 170, easily passed committee, it faced a lot of resistance on the floor. Both Democrats and Governor Daugaard opposed this bill, saying it disrespected the state's referendum process. But many legislators supported the proposal, especially provisions giving tax rebates to wind power construction and power plants like the Big Stone plant in northeast South Dakota.
The coalition of lobbyists working to keep a construction rebate program in law created compromise language that satisfied most opponents. A hog house of HB 1228 included tax rebate proposals for some projects without canceling this fall's referendum.
HB 1228 will give rebates on the state's contractor's excise tax of around 50 percent to large wind projects and environmental upgrades at power plants. The projects have to be worth at least $50 million to qualify, and the rebates are only given after all taxes on the construction have been paid in full.
Mere seconds after the Senate adopted HB 1228 on an 18-15 vote, the House killed SB 170.
The median size of the 11 wind projects in South Dakota is 51 megawatts, or 51,000 kilowatts. If the bill passed Thursday becomes law, a project of this size - which could cost $100 million or more to build - would receive $2.3 million in rebates.
HB 1228 also would refund half of the construction taxes paid on a $489 million project to upgrade the emissions equipment at the 475-megawatt Big Stone coal-fired power plant in northeast South Dakota. The upgrades will allow the 36-year-old plant to comply with new federal regulations limiting smog and mercury emissions.
The compromise language in HB 1228 does not continue tax rebates for projects smaller than $50 million, and excludes other previously funded projects like agricultural processing facilities, manufacturing facilities and ethanol plants.
If Governor Daugaard signs HB 1228, these types of projects may not receive the same economic boost that a construction tax rebate program provides. And the voters of South Dakota will still be asked to decide the fate of our previous construction tax rebate program in November.
AGC has already been invited to the table by the folks working to defeat Referred Law 14, and keep the large construction project tax refund law on the books in South Dakota. Members will receive more information on that topic as it developes.
After the 2012 Legislative Session has officially ended, AGC members will receive a final printed report on this year's session.
2/3/12
At nearly the half-way point of the 2012 Legislative Session, we have dealt with many of the business-adverse issues to which AGC was opposed, but have not get begun on some business development opportunities that may arise.AGC was concerned about six bills that would have increased health care costs and complicated the hiring process. Three of these bills, which were backed by unions, had their hearing this week in House Judiciary. This package (HB 1067, HB 1068 and HJR 1003) would have removed an employer's ability to control health care costs by allowing employees to seek treatment with any doctor of their choosing and sought to change the state's constitution to reflect that language as well. These bills were defeated after the business community, including AGC, testified against them.
Another package of bills that AGC felt was bad for business dealt with immigration. Two of these bills (HB 1139 and HB 1238) in various ways tried to shift the burden of enforcement of illegal immigration on to local law enforcement and spelled out administrative burdens and monetary penalties to employers who, while following established hiring procedures, inadvertently hired illegal aliens. These immigration bills had their hearing this week in House Commerce. AGC, along with many other business groups, testified against passage of these bills, and they were defeated. HB 1238 was tabled on a 7-5 vote. Because it was a close vote, and a tabled bill can be lifted off the table, I will keep a watch on this bill. The third bill in the immigration package has not been scheduled for a hearing yet, but AGC will testify in opposition to that bill, as it unfairly penalizes employers.
Two other bills left on the AGC bill list. One is HB 1057, which proposes to lift the wheel tax from trailers. This is a clumsy attempt to entice counties without a wheel tax to adopt one, by eliminating trailers from the wheel tax. Unfortunately, AGC is the only entity opposed to this bill, and it has passed its house of origin. A Legislative Alert was posted seeking help from members in stopping this bill. Hopefully, we will get a good response from that, Click Here to send a letter to your legislator!
HB 1250 will be heard next week. This is a Democratic-sponsored bill that would allow counties the option to impose a property tax levy in increase road fund money. AGC supports the bill, while recognizing it will have a hard time gaining enough support to pass.
And finally, there may be some attempts to fix a problem with a bill that passed in 2011 but has been referred to a vote of the people. Last session, Governor Daugaard passed a bill (HB 1230) that restructured the way tax rebates are given to companies coming in state to build wind energy facilities, agricultural processing plants, and to a much lesser extent, ethanol plants. The Democratic Party gathered enough petitions to refer the law, and it is on the ballot in November 2012. A coalition of business groups have formed to keep the large project bill on the books, and AGC has joined them to turn back the constitutional amendment this fall. There may be some attempts at a legislative fix to this referred law, since there was a sunset on HB 1230 that would expire at the end of 2012. As these legislative attempts to salvage HB 1230 coalesce, I will keep an eye on them and report to the membership.
Deb Mortenson, Lobbyist
AGC of South Dakota