Chamber Advocate: Jan. 27, 2023

The 98^th Legislative Session is underway, and the legislature has completed 12 days of the 38 legislative day session. The South Dakota State Constitution specifies the length of annual legislative sessions to be a maximum of 40 legislative days beginning on the second Tuesday of January. The last day of the “main run” will be March 9. Veto day is scheduled for March 27.

Nearly 300 bills have dropped thus far, we expect the flow of bills for next week will lessen as this Thursday was the deadline for unlimited bills and joint resolutions. This first deadline allowed every legislator to drop as many bills as they desire. The next significant bill deadline, February 1, relates to each legislator having a limit of three additional bills.

Here are the bills that the Chamber has been active on thus far.

SB 41 to establish a program for housing infrastructure loans and grants, make an appropriation therefor, and to declare an emergency.

SB 41 is the bill to redo the $200 million set for workforce housing during last year’s session. The funds were placed in the “Housing Opportunity Fund” (HOF) which is run by the South Dakota Housing Development Authority.

The Governor withheld the funds believing the statutes that control the Housing Opportunity Fund did not allow the income levels that are needed for the workforce housing money because the Authority and the (HOF) were created to deal with low-income housing.

SB 41 will create a new fund also to be administered by the Housing Development Authority that will not have income restrictions and will provide $50 million in grants and $150 million in loans. Both the money for grants and the money for the loans are to be distributed with 30% of each fund going to communities with populations exceeding 50,000 (Sioux Falls/Rapid City) and the rest of the funds reserved for all other communities.

The money must be used for infrastructure to help facilitate housing projects by helping to build water/sewer lines, pave streets and install lighting.

This bill has passed the Senate and the House of Representatives and will move to Governor Noem’s desk for signature. (Governor Noem’s staff provided testimony in support of the bill.) The Chamber supports the bill.

HB 1011 – The Commerce Committee sponsored bill from the Department of Labor and Regulation.

This bill will reduce employer unemployment rates by creating a new rate schedule for employer contributions to the Unemployment Insurance Trust Fund. This new rate schedule has lower rates than the two current rate structures.

Unemployment Insurance (now known as Reemployment Assistance to the department staff and other policy nerds like the lobbyist for the Chamber) contribution rates are determined by the past experiences of each business regarding whether or not they have employees that left the business for reasons other being fired (otherwise known as leaving through ‘no fault of their own) and have filed claims.

The contribution rate is a percentage of each employee’s wages up to the “Wage Base” which is currently set at $15,000. The percentages start at 0.05% ($7.50/employee) and have a maximum rate of 9.3% ($1,395/Employee). The new schedule will decrease the maximum rate to 8.80% ($1,320).

South Dakota is one of the very few states that allow a business to earn a rate of “zero” which means exactly what it says. Businesses with sufficient reserves in their RA accounts earn a rate of zero and do not need to pay any additional funds into the system. With this new rate schedule, more businesses will earn a rate of zero.

This bill also addresses changes in the UI surcharge system by having future surcharges kick in at a higher level of UI the Trust Fund Balance but with a lower rate and allowing the surcharge payments to be credited to an employer’s account. Currently, the surcharges kick in when the trust fund level falls to $11 million and are not allowed to be credited to an individual employer’s account.

The end-of-year for projected balance for the calendar year 2022 in the Reemployment Assistance Trust Fund is $195.8 million. The largest payout for benefits from the RA Trust Fund was during the Pandemic and that totaled $98.5 million (2020). The fund was replenished when Governor Noem decided to move $88.6 million dollars of Federal CARES Act Funds into the RA trust fund in order to make sure it remained solvent. (Bill analysis provided by the SD Chamber of Commerce.)

The bill has passed the House of Representatives and the Senate. The bill will be transferred to Governor Noem for her consideration and signature. The Chamber supports this bill.

HB 1055 An Act to increase the dollar amount of South Dakota opportunity scholarships.

The bill raises the opportunity scholarship from $6,500 over four years to $7,500. This is a merit-based scholarship given to high-performing students who stay in South Dakota for college/technical schools. The scholarship hasn’t been increased in eight years, and this increase of 15% is on track with the Board of Regent increases in tuition and fees during that time.

The scholarship is paid out annually to eligible South Dakota students: $1,300 for the first three years and $2,600 for the fourth year.

Fun fact: SD Opportunity Scholarship recipients TOP 10 Major/Graduates:

• Nursing
• Biology
• Mechanical Engineering
• Psychology
• Pharmaceutical Sciences
• Elementary Education
• Computer Science
• Mathematics
• Civil Engineering
• Economics

The bill has passed the House Education Committee and will be sent to the House Committee on Appropriations for their consideration. The Chamber supports this bill.

HB 1039 to revise certain provisions regarding the payment of tuition for members of the South Dakota National Guard. This bill will allow any member of the S.D. National Guard who is a resident of the state be eligible for 100% of their tuitition to be paid for or otherwise credited by the Board of Regents. This bill has passed the House Military and Veterans Affairs Committee with an 8/4 vote. The Chamber supports this bill.

HB 1046 to provide free tuition at Board of Technical Education institutions for children or spouses of members of the South Dakota National Guard disabled or deceased in the line of duty. The bill passed the House Military and Veterans Affairs Committee 12/0.

The Chamber has actively supported the following:

• HB 1056 An Act to modify the limit of consecutive terms for members of the Board of Technical Education.
• SB 13 To authorize the construction of an addition to the BG Dean Mann Readiness Center in Sioux Falls, to make an appropriation therefor, and to declare an emergency.
• SB 14 An Act to revise the legal description for the construction of a National Guard Readiness Center in Sioux Falls, make an additional appropriation therefor, and to declare an emergency.