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Legislature Ends 2014 Session

Date: April 14, 2014

State Director Lindsey Riter-Rapp Reports

The 2014 session of the South Dakota Legislature ended March 31, 2014, with the Gov. Dennis Daugaard issuing only one veto. The following are issues that NFIB followed closely. 

Unemployment Insurance

The primary bill NFIB focused our efforts on during this year’s session was House Bill 1045. This measure extends an employer’s current unemployment insurance contribution rates through December 31, 2014, and then reduces the contribution rates for calendar year 2015 and thereafter. 

The reductions arose following the work of an unemployment advisory task force. This task force was appointed after the Department of Labor and Regulation predicted the trust fund was projected to reach $89.3 million in 2015. The Department stated its intention to maintain a target trust fund balance of $78 million, which is one year of payments. 

NFIB testified in support of this bill, which was unanimously approved by the House of Representatives. The Senate also passed the bill without opposition, and the governor signed it on March 31. 

Another bill of significance was House Bill 1143. This bill repeals certain provisions regarding the unemployment insurance benefit eligibility of workers attending approved training.  In 2013, the benefits awarded totaled $45,000. NFIB followed the discussion closely. The governor signed this bill on March 31. 

Balanced Budget

Efforts to balance the federal government’s budget are an issue of national importance to NFIB and its members. We offered a letter in support of Rep. Hal Wick’s effort to pass House Joint Resolution 1004. This measure was part of a nationwide effort to use the Article V process outlined in the U.S. Constitution to move Congress toward adopting a Balanced Budget Amendment. 

NFIB is supportive of this effort, and recognizes that small-business owners are frustrated with the federal government’s failure to address the budgeting that every citizen and small business must adhere to in their daily activities. HJR 1004 was approved by the House State Affairs Committee by a vote of 7 to 4, but was defeated on the House floor. NFIB will continue to monitor this discussion closely, as it will likely arise again in the near future.

Medicaid Expansion

NFIB also closely monitored the issue of Medicaid expansion, which was raised this year in several measures. 

  • House Bill 1210 would have expanded Medicaid services to include individuals with income up to 138 percent of the federal poverty level plus 5 percent for the applicable family size. House State Affairs deferred this bill to the 41st legislative day, effectively killing it for the year. 

  • House Bill 1239 was the Democrat’s bill on Medicaid eligibility expansion. This bill increased the eligibility level to 138 percent of the federal poverty level. It was deferred to the 41st legislative day by the House Health and Human Services Committee. 

  • House Joint Resolution 1007 attempted to submit the question of expanding Medicaid eligibility to the electors of the state. The resolution was also deferred to the 41st legislative day by the House State Affairs Committee. Senate Joint Resolution 3 was the Senate version of this resolution. It was deferred to the 41st legislative day by the Senate State Affairs Committee.

  • House Bill 1244 set out to create a South Dakota health insurance assistance fund, to be administered by the Department of Social Services, to assist in defraying the cost of health insurance coverage for a qualified employee. A qualified employee is someone who does not have insurance through an employer plan, is not eligible for Medicaid, Medicare, or IHS, and whose income level is below 100 percent of the federal poverty level. The fund was set to receive $7 million from the building South Dakota fund for state fiscal year 2015 and each fiscal year thereafter. The Act would be repealed if Medicaid eligibility is expanded. This bill failed in the House of Representatives by a vote of 24 to 45. 

The governor has sought a partial waiver from the federal government on the issue of Medicaid expansion. It appears that until such request is granted, he will continue to resist efforts to expand Medicaid. NFIB recognizes that this discussion will continue into the future, and has a strong possibility of arising once again next year.

Minimum Wage

The Legislature did not consider any measures that would have increased the minimum wage during the 2014 legislative session. However, NFIB continued to meet with other small-business groups to build a coalition against the 2014 fall ballot measure that ties any increase in the state minimum wage to the Consumer Price Index, allowing automatic wage increases annually. Our members indicated they were overwhelmingly opposed to this type of increase, and we are prepared to continue our efforts to defeat such a measure. 

Taxes

House Bill 1149 would have lowered the state sales and use tax on certain food items and increased the rate of taxation for the sales-and-use tax on certain goods and services. Under this bill, food items would not include alcoholic beverages, dietary supplements, food sold through a vending machine, or tobacco. Services with an increased rate of taxation included utilities, telecommunications, transportation, and amusement or athletic tickets. The House Taxation Committee deferred this bill to the 41st legislative day.  

Unemployment Compensation

Finally, Senate Bill 69 revised the provisions regarding good cause for voluntarily leaving employment and adds an additional provision concerning any employee who is an officer who exercises substantial control in decisions to take or not to take action on behalf of a corporation and has no other alternative than to leave employment with that corporation. This does not preclude a corporate officer who does not exercise substantial control in any decision to take or not take action on behalf of a corporation from being found to have good cause to leave employment under the other circumstances outlined in SDCDL 61-6-9.1. The bill was signed by the governor on March 14. 

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This measure extends an employer’s current unemployment insurance contribution rates through December 31, 2014, and then reduces the contribution rates for calendar year 2015 and thereafter. 

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