Victories for small business include unemployment insurance tax relief, defeat of paid leave mandates
NFIB/South Dakota State Director Lindsey Riter-Rapp reports from Pierre on the small-business agenda at the end of the legislative session.
Unlike the last two years. there were no successful efforts by the 92nd South Dakota Legislature to increase taxes during its 2017 session, which officially ended March 27, thirty-eight legislative days after it started.
There was an effort to lower the sales tax on certain food items and to increase the rate on other goods and services, but this attempt to shift the tax burden was met with early defeat.
There were several efforts that were opposed by NFIB and defeated by the Legislature to impose certain employment mandates upon employers. These included:
Paid Sick Leave
NFIB teamed up with other small business groups to defeat Senate Bill 96, which would have required that all employers provide paid sick leave to an employee after 90 days of employment. It also specified the nature and amount of the paid leave required.
Paid Parental Leave
Senate Bill 150 was similarly focused. It would have also compelled employers to provide up to four weeks of paid parental leave for the purpose of giving birth or adoption placement of a child. That leave would have been required once an employee had been employed for a full year. It would have placed no limits on the term of the leave. Hence, an employee could have been required to hold a position open indefinitely. Further, the measure did not include any eligibility requirements like the FMLA so it could have been extended to full, part-time, or probationary employees.
Expanded Accommodations
House Bill 1120 would have mandated certain protections and accommodations for pregnant and breastfeeding mothers in their places of employment. Both SB 150 and HB 1120 were defeated with strong opposition from NFIB. However, this is an area that will likely continue to be promoted in future legislative sessions. NFIB will continue to resist any such efforts to impose burdensome mandates on small businesses.
Unemployment Insurance
As reported last year, South Dakota’s unemployment insurance trust fund has recovered since the recession and is on the rise. At the close of 2016, the trust fund reached an estimated $109 million. The Unemployment Insurance Advisory Task Force studied this issue to determine how much is necessary to ensure there is a healthy trust fund balance and if and when lower UI tax rates might be warranted for South Dakota employers. After much study, the Department of Labor brought forward a comprehensive proposal during the 2017 legislative session.
The proposal became House Bill 1097, which was passed by the Legislature and signed by Gov. Dennis Daugaard with NFIB’s support. This bill ensures that there is an adequate trust fund balance but also provides tax relief to employers. It permanently lowers the current tax rates by .05 percent effective January 1, 2018, and thereafter. UI tax rates are then reduced by another 0.1 percent when the trust fund balance reaches a certain level. In exchange for these lower rates, employers had to accept a .02 percent administrative fee that the Department of Revenue said was necessary to continue to administer the program. The maximum amount an employer would pay per covered employee would be $3.
Workers’ Compensation
House Bill 1049 was brought up by the Department of Labor. For the purposes of workers’ compensation, an employee under current law can voluntarily leave employment if continued employment presents a hazard to the employee’s health. In such a case, the employee must be examined by a doctor. This bill allows the examination to also be completed by a nurse practitioner or a physician assistant. This will enable these services to extend further into rural areas where such professionals play a more active role in the delivery of medicine. The bill was signed by the governor February 9.
Landowner Liability
House Bill 1068 is a measure that revises certain provisions concerning landowner liability for certain injuries suffered. It states that a landowner owes no duty of care to keep an unimproved section line safe for entry or use by an uninvited person for an outdoor recreational or tourism activity. This bill will ensure that landowners are adequately protected against uninvited people that participate in recreational activities on or near their land. The bill was signed by the governor March 7.
State Budget
South Dakota balances its budget every year, and the Legislature overcame disappointing revenue numbers to pass a structurally balanced budget of $4.55 billion dollars again this year. Legislators were able to offer small 30 percent inflationary increases to K-12 schools and Medicaid providers below the mid-point. Revenue projections were front and center as online sales continue to impact sales tax revenues and the farm economy remains sluggish. Revenue reports from the Capitol since the Legislature adjourned confirm the need for the state to remain vigilant regarding expenditures to remain in proper balance with the disappointing income revenues.
