2013 ANNUAL LEGISLATIVE REPORT ON CONSTRUCTION RELATED LEGISLATION

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1 2013 ANNUAL LEGISLATIVE REPORT ON CONSTRUCTION RELATED LEGISLATION Introduction The Associated General Contractors of South Dakota, Inc., Highway-Heavy-Utilities Chapter (AGC) again had a full-time presence at the state capitol for the 2013 Legislative Session. AGC lobbyist, Deb Mortenson read each of the 652 bills and resolutions introduced this session. Bills of interest to the construction industry were referred to the AGC Government Affairs Committee and the Board of Directors with the pros and cons of the bill summarized, and a link to the full bill included. Bills were also discussed each Monday during the regular legislative telephone call. Input from members helped shape AGC s stance on each piece of legislation of interest to the construction industry. So while AGC has a full-time lobbyist, we also need to include thanks to our lobbying team, which includes the Board of Directors, the Government Affairs Committee and the membership. As you can see in the following report, AGC had a busy year with a full bill list that covered topics including highway funding, economic development, general business, unemployment insurance, immigration, taxation and mining. Be assured that the legislative session is covered thoroughly for the construction industry. Opportunities were rare to discuss increased highway funding, one of AGC s ongoing legislative goals. But when the opportunities arose, AGC was there in committee or on the floor, spreading the story of the need to be proactive about funding infrastructure in South Dakota. Mining has not been discussed by the legislature for many years. But with the activity surrounding the development of uranium mining in the southern Black Hills, there were a handful of bills regarding mining. Two bills aimed at either uranium or gold mining inadvertently included gravel, aggregate, gypsum, limestone quartzite and other rock mining in their language. AGC circulated one of these bills to the MSHA alliance for their input. The alliance provided some valuable insight and encouraged defeat of the bill, which AGC helped to do in committee. So we welcome the MSHA alliance to our lobbying team. The 88 th Legislature also proved to be interested in preserving the rights of businesses in the state. They listened to AGC and the rest of the business lobby when debating issues like guns on the premises and immigration control, and moved to defeat these measures. The following report is synopsis of AGC bills of interest for To access the full AGC Bill Log, go to 1

2 Highway Funding The following are the highway funding bills of interest the AGC monitored this year. SB 43 - An Act to revise certain provisions regarding the crossing of a railroad and to revise the penalty for certain railroad crossing violations by the driver of a commercial motor vehicle. This bill brought South Dakota into compliance with federal motor carrier guidelines by clarifying that failure to comply with driving laws around railroad crossings is a serious driving offence. Penalties for noncompliance are the disqualification from driving a commercial vehicle for 120 days if convicted of two serious driving offences in three years. Three such convictions in a three year period net you disqualification for one year. Had South Dakota not passed this bill, funding for the motor carrier inspection program would be cut, and the federal highway funding for the state will be reduced by $11.8 million dollars. AGC supported the bill and it was signed by Governor Daugaard. SB 44 - An Act to allow disqualification of commercial driver licenses for violations of federal, state, or local texting bans while driving a commercial vehicle to comply with federal regulations and requirements. Last year, federal motor carrier rules added texting while driving to the list of serious traffic violations nationwide. To comply, each state had to add texting while driving to their list of serious traffic violations, hence SB 44. The bill applies to a person with a CDL driving a vehicle that travels out-ofstate, and is over 10,000 pounds gross vehicle weight rating, or is over 26,000 pounds gross vehicle weight rating and have four or more axles. If convicted of two or more of these serious driving offenses in a three year period, including texting while driving, you would lose your commercial driver s license for 60 days. If South Dakota did not pass this bill, funding for the motor carrier inspection program would be cut, and the federal highway funding for the state would be reduced by $11.8 million dollars. AGC supported SB 44, and it was signed by Governor Daugaard. SB An Act to establish a local government road improvement grant fund for the purpose of serving new agricultural facilities and to make an appropriation therefor. The bill sought a one-time appropriation of $5 million from the state general fund to establish a grant program to construct or reconstruct roads and bridges owned by a local government that serves a new agricultural facility. The fund and grant program would be overseen by the State Transportation Commission. The concept of the bill was included in SB 235, the omnibus economic development bill, so a conference committee appointed to reconcile this bill did not concur and the bill died. AGC supported the bill. HB An Act to authorize the South Dakota Building Authority to finance the construction of a sanitary sewer system at Angostura Recreation Area near Hot Springs for the Department of Game, Fish and Parks and to declare an emergency. AGC monitors bills that call for the expenditure of public funds for construction projects as a benefit to members. The bill was amended in committee to add a project at Cedar Shores including engineering and bonding services, site preparation, and construction of improvements. Governor Daugaard has signed the bill. 2

3 HB An Act to permit counties and townships to levy a capital improvement property tax for highways, secondary roads, bridges, and culverts. A similar bill was introduced in HB 1189 sought to give counties and townships the flexibility to authorize an annual property tax levy not to exceed one dollar per thousand dollars of the taxable valuation of the county. Proceeds of the levy would revert to local road funds. Counties were amended out in committee, and the bill died on the Senate floor on a19-15 vote. AGC supported the bill. Economic Development AGC watched a handful of economic development bills introduced as placed holders while the details of a plan to replace the tax rebate program for construction projects was hammered out. The following are the bills of interest that the AGC monitored this year. SB An Act to create the Building South Dakota Fund, to deposit certain money into the Building South Dakota Fund, to create certain programs and funds to enhance economic development, to make continuous appropriations to these funds, to provide certain reinvestment payments to stimulate economic development and investment, to revise the state aid to general education formula by including an adjustment for students with limited English proficiency, and to declare an emergency. This new economic development package does a lot of things. Projects to be built after April 2013 of $20 million or larger could apply for "reinvestment" of most of the sales and use tax. All of the contractors' excise tax on an approved project would go to the Building South Dakota Fund, along with revenue from the state's unclaimed property fund. Money from the Building South Dakota Fund would provide funding for workforce education, housing, infrastructure, local development partnerships and REDI reinvestments. So in addition to the reinvestment," projects could also benefit from the Building South Dakota Fund projects. The bill was further amended to include a $7 million general appropriation for seed money in the first year, and also added a "trigger" so that Build South Dakota Funding shuts down if revenue is not sufficient to cover state aid to education and Medicaid provider payments. AGC supported the bill. SB 235 was signed into law by Governor Daugaard and is in effect, due to an emergency clause in the bill. General Business AGC watched a handful of general business bills this year. HB An Act to increase the bonding limit for the four technical institutes. HB 1098 would allow the four technical schools a one-time increase in their bonding levels, to be offset by increased student fees. Programs that would be enhanced by the increased bonding levels include diesel programs. AGC often monitors tech school bonding bills since they add to the qualified employee pool. HB 1098 was signed by the Governor. HB An Act to prohibit businesses and employers from establishing certain policies against the ability of an invitee or employee to store firearms and ammunition in a locked motor vehicle parked on the premises. 3

4 This bill has been brought to the legislature at least six times in the past by pro-gun groups, and has been rejected each time. The bill pits the issue of property rights vs. gun rights. Right now, businesses and employers are free to establish their own policies about guns on their premises. They can allow employees and customers to have guns locked in their vehicles if they so choose. This bill would have taken away the right for a business to make their own decision, and said the state is better equipped to make one-size-fits-all policy decisions for all businesses. And, the bill allowed the business to be sued for dictating gun policy on their property. AGC, along with more than a dozen other business groups testified against this bill. It was deferred to the 41st legislative day on an 8-4 vote by House Commerce. A smoke out attempt failed on the floor of the House. HB An Act to allow municipalities, counties, and school districts to post certain information on the Internet in addition to or in lieu of certain publication requirements. HB was an attempt to offer public notices via the Internet. These bills surface periodically in an attempt to save money for local governmental entities while still meeting notice requirements. The bill specifies that a city, county or school district that is required by law to post notices, minutes, bids or other documents can designate an official website and may, in addition or in lieu of publication in newspapers, post the information on the official web site. While AGC supported the bill, apparently it's time has not yet come. House Local Government killed the bill SB An Act to provide for a uniform county drainage permit application form and to remove the maximum limit for drainage permit fees. SB 179 was an attempt to streamline county drainage permits. The bill required that a professional engineer be involved in the permit granting process. There was a concern that requiring an engineer s involvement with each permit may slow down the process and increase the cost. AGC monitored the bill. SB 179 was deferred to the 41st Legislative day by Senate Local Government on a 6-1 vote. SB An Act to prohibit the use of certain handheld electronic wireless devices for electronic messaging while driving and to prohibit conflicting municipal regulations. SB 142 was an attempt to create a state wide texting ban for drivers of motor vehicles by banning the use of handheld electronic wireless communication devices to write, send or read a text-based communication. The bill had exemptions for use while parked, contacting emergency assistance, and did not apply to making or receiving phone calls or using hands-free technology. SB 142 passed the Senate. Despite proponent testimony from AGC and many other groups, House Judiciary sent SB 142 to the 41st Legislative Day on an 8-5 vote. Unemployment Insurance AGC monitored one bill introduced on Unemployment Insurance. The following is a description & summary of that bill. HB An Act to revise certain provisions regarding unemployment insurance employer charges and claimant misrepresentation regarding benefit overpayments and to correct references to certain provisions pertaining to unemployment insurance. 4

5 Passage of this bill will bring South Dakota in compliance with national law regarding UI fraud. Under this bill, UI claimants filing fraudulent claims would be subject to penalties totaling 50 percent of the benefits obtained for the first offense and 100 percent of benefits obtained for each subsequent offense. Employers are required to report rehired employees to the National Directory of New Hires. (South Dakota has required this for years. Not a change for SD employers.) The bill also prohibits employers from relieving charges to an employer account if an overpayment was due to failure of an employer or its agent to respond to an agency (SD Unemployment Insurance Division) request and the employer or agent has established a pattern of failing to respond or of providing inadequate information. (SD UI now sends a letter to employers requesting information, and follows up with a phone call.) AGC supported the bill. HB 1055 was signed by Governor Daugaard. Immigration Two bills were introduced this session that sought to revise provisions relating to identity theft and establish sanctions to hiring illegal aliens. HB An Act to revise certain provisions relating to identity theft and employment. HB 1159 tried to add language to the site in state law governing identity theft that expanded the definition to include an employer who accepts any personal information of another person from an individual, knowing that the individual is not the actual person identified that information. And it makes that knowing acceptance a Class 6 felony. Federal law already addresses and enforces immigration. AGC and more than a dozen other groups testified against this bill in committee, where it was sent to the 41st Legislative Day on an 8-4 vote. HB An Act to establish sanctions relating to the hiring of illegal aliens. This is the companion bill to HB This bill shifted the responsibility of policing and punishment of employers hiring illegal aliens from the federal government to the South Dakota Attorney General and county state attorneys. The bill encouraged people to turn in employers whom they believe have hired illegal aliens. A first finding of a violation of this bill would result in a probationary period for the employer, where they have to file quarterly reports on each new employee hired. A second violation would result in the loss of all licenses held by the employer specific to the business location where the unauthorized alien performed work for ten business days. A pending overhaul of federal immigration laws further negates the purpose of this bill. AGC and more than a dozen groups testified against this bill in committee. It was defeated on a very narrow 7-6 margin. An attempt to smoke out this bill on the floor of the House failed by a wide margin. Taxation Bills AGC monitored one bill introduced on Taxation, more specifically an act to reduce the rate for contractor s excises tax. 5

6 SB 91- An Act to reduce the rate for the contractor's excise tax over a period of time and to repeal the contractor's excise tax in three years. SB 91 sought to repeal the contractors excise tax. South Dakota is one of two states who impose a contractors excise tax. In South Dakota, the contractors excise tax is paid by project owners and generates around $80 million each year for the state general fund. It would have taken a tax increase equivalent to a ½ penny sales tax to replace the lost revenue in this bill. Contractors, who are currently only collecting and remitting the contractors excise tax, would then have to pay the additional sales tax on all purchases for ever. Since replacement revenue was not included in the bill, Senate Appropriations tabled the bill on an 8-0 vote. AGC monitored the bill. Mining Bills AGC monitored two bills related to mining. SB An Act to revise certain financial assurance provisions relating to mining. This bill tried to double the amount of surety bonds required to ensure mine site cleanup. While aimed at gold and uranium mining, it also affected sand, gravel, aggregate, gypsum, quartzite and other rock products. AGC asked the bill sponsor to offer an amendment to exclude those entities. They were successfully amended out of the bill, which subsequently died in committee. SB An Act to revise certain provisions relating to violations found through environmental audits. SB 149 was an attempt to allow the Department of Environment and Natural Resources to punish uranium mining in the Black Hills for not reporting violations. But what the bill really did was to take away the right to perform voluntary environmental self-audits and allow the DENR to assess civil or criminal penalties and shut down mining operations if violations were found. In addition to uranium mining, the bill was written so that it also impacted gravel, sand, aggregate, limestone, gypsum and quartz mining operations by taking away the ability to perform environmental self-audits. AGC asked the MSHA Alliance for input on this bill. They recommended it be killed so they could retain the right to perform self-audits. AGC testified against SB 149 in committee. It was sent to the 41st Legislative Day on a 7-2 vote. Conclusion AGC continues to increase its areas of interest, during session and also during the rest of the year, to better serve the interests of the construction industry. This is emphasized by the broad list of topics on the 2013 bill list. In addition to our ever-increasing list of interests, AGC is also constantly working to increase our grass roots legislative involvement. 6

7 CONPAC of South Dakota Organizations Can Now Contribute Too! The Contractors Political Action Committee, or CONPAC, is gearing up for the 2014 election cycle. Please note that you have a new CONPAC contribution option the ability to contribute via an organization. We hope that you enjoy the flexibility in giving and contribute generously to CONPAC on an annual basis. Please remember that when you contribute to CONPAC, you are also a member of CONPAC. When you are a CONPAC member, your voice is heard when decisions need to be made about contributions, bylaws, or policies. CONPAC is also seeking a few good board members. If you would like to lend your expertise to this board, please info@sdagc.org. AGC of America Political Action Committee While CONPAC of South Dakota gives to candidates in South Dakota, the AGC of America Political Action Committee was established in AGC PAC is the non-partisan, federal political action committee of the Associated General Contractors of America. Its mission is to build a better Congress for AGC members. AGC PAC works to accomplish this through electing candidates for federal office who support the national legislative priorities of AGC. Through its efforts, AGC PAC encourages the political engagement of all AGC contractors to help shape a construction-friendly, federal legislative and regulatory environment. Investing in transportation infrastructure is an investment in our community. It will help put many of those unemployed men and women back to work NOW while giving our American businesses a decades-long advantage over our global economic competitors. And, with construction material prices consistently on the rise, taxpayers return on transportation investment TODAY will be greater than if Congress pushes it back until tomorrow. Your contribution to the AGC PAC will ensure our message to Congress to Make Transportation Job #1 and invest in our communities, our people and our transportation infrastructure. For information on contributing to AGC PAC, log onto or Jeff Shoaf at shoafj@agc.org or Be A Politically Active Contractor. Support CONPAC and AGCA PAC. 7

8 AGC of South Dakota 300 East Capitol Ave., Ste. 1 Pierre, SD Address Service Requested Indicia Mark Your Calendars! 2013 AGC Summer Meeting June 24-26, 2013 Pierre, SD 8