78th Legislative Session _ 2003

Committee: House State Affairs
Friday, February 07, 2003

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
    Frost
    Garnos
P    Hanson
P    Hargens
P    Hunhoff
P    Madsen
P    Michels
P    Nesselhuf
P    Olson (Mel)
P    Teupel
P    Wick
P    Rhoden, Vice-Chair
P    Peterson (Bill), Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Vice Chair Larry Rhoden

MOTION:     TO APPROVE THE MINUTES OF WEDNESDAY, FEBRUARY 5, 2003

Moved by:    Hunhoff
Second by:    Wick
Action:    Prevailed by voice vote.

         HJR 1005:  Proposing and submitting to the electors at the next general election amendments to Article XIV of the Constitution of the State of South Dakota to create a South Dakota university system under the control of the Board of Regents.

Presented By:    Representative Ron Williamson (handout 1)


MOTION:     DEFER HJR 1005 TO THE 41ST LEGISLATIVE DAY

Moved by:    Madsen
Second by:    Garnos
Action:    Prevailed by roll call vote.(11-0-2-0)

Voting Yes:    Frost, Garnos, Hanson, Hargens, Hunhoff, Madsen, Michels, Nesselhuf, Olson (Mel), Wick, Rhoden

Excused:    Teupel, Peterson (Bill)

         HB 1266: allow public contracts and bids to be awarded to any responsible bidder.

Presented By:    Representative Cooper Garnos
Opponents:    Steve Stonebeck, Bureau of Administration
        James Keyes, Associated General Contractors of SD

MOTION:     DEFER HB 1266 TO THE 41ST LEGISLATIVE DAY

Moved by:    Michels
Second by:    Hanson
Action:    Prevailed by roll call vote.(11-0-2-0)

Voting Yes:    Frost, Garnos, Hanson, Hargens, Hunhoff, Madsen, Michels, Nesselhuf, Olson (Mel), Wick, Rhoden

Excused:    Teupel, Peterson (Bill)

         HJR 1002: Proposing and submitting to the electors at the next general election a new section to Article XI of the Constitution of the State of South Dakota, relating to the imposition of a corporate income tax.

Presented By:    Representative Gerald Lange (handouts 2, 3, 4)
Opponents:    Dan Nelson, Sioux Falls Area Chamber Of Commerce
        Bob Riter Jr., National Federation of Independent Business

MOTION:     DEFER HJR 1002 TO THE 41ST LEGISLATIVE DAY

Moved by:    Peterson (Bill)
Second by:    Frost
Action:    Prevailed by roll call vote.(9-3-1-0)

Voting Yes:    Frost, Garnos, Hunhoff, Madsen, Michels, Olson (Mel), Wick, Rhoden, Peterson (Bill)

Voting No:    Hanson, Hargens, Nesselhuf

Excused:    Teupel

Chair Peterson assumed the chair.

         HJR 1003: Proposing and submitting to the electors at the next general election an amendment to Article V, section 7 of the Constitution of the State of South Dakota, providing for the merit selection of circuit court judges.

Presented By:    Representative Matthew Michels
Proponents:    Steve Zinter, Supreme Court Judge
        Curt Jones, Judicial Qualifications Committee, Britton
        Mike Braley, Judicial Qualifications Committee, Parkston
        Brent Wilbur, Governor's Office
        Thomas Barnett Jr., State Bar Of SD

MOTION:     DO PASS HJR 1003

Moved by:    Hanson
Second by:    Wick
Action:    Prevailed by roll call vote.(10-0-3-0)

Voting Yes:    Frost, Garnos, Hanson, Hargens, Hunhoff, Michels, Nesselhuf, Wick, Rhoden, Peterson (Bill)

Excused:    Madsen, Olson (Mel), Teupel

Vice Chair Larry Rhoden assumed the chair.

         HB 1135: establish the jump start South Dakota subfund and to provide for its funding and disbursement.

Presented By:    Representative Matt McCaulley (handout 5)
Proponents:    Representative Joel Dykstra
Opponents:    Marty Davis, Office of Economic Development

MOTION:     DO PASS HB 1135


Moved by:    Wick
Action:    Was not acted on.

MOTION:     SUBSTITUTE MOTION AMEND HB 1135

1135fb
     On the printed bill, delete everything after the enacting clause and insert:

"      Section 1. That chapter 1-16G be amended by adding thereto a NEW SECTION to read as follows:

     There is hereby created within the revolving economic development and initiative fund, created in §  1-16G-3, the jump start South Dakota subfund. The purpose of the subfund is to make forgivable loans to start-up businesses to stimulate employment and business growth.

     Section 2. That chapter 1-16G be amended by adding thereto a NEW SECTION to read as follows:

     For purposes of this Act, the term, start-up business, means any new business venture in the technology, communications, service, or manufacturing sector.

     Section 3. That chapter 1-16G be amended by adding thereto a NEW SECTION to read as follows:

     The Board of Economic Development shall designate five million dollars of the money in the revolving economic development and initiative fund for the purposes of the jump start South Dakota subfund. Application for a loan from the subfund shall be submitted to the Board of Economic Development by September 1, 2003, and awards shall be announced by the Board of Economic Development on or before December 15, 2003. If the total request for funding by qualified applicants is less than five million dollars, all qualified applications shall be approved by the Board of Economic Development and the balance of the fund shall be carried over to the subsequent calendar year and offered in a second round. The applications for the second round shall be submitted to the Board of Economic Development by March 1, 2004, and awards shall be announced on or before June 15, 2004. If the total request for funding by qualified applicants exceeds five million dollars, the Board of Economic Development shall prioritize the applications and fund the applications with the highest priority.

     Section 4. That chapter 1-16G be amended by adding thereto a NEW SECTION to read as follows:

     The Board of Economic Development shall administer the jump start South Dakota subfund and make loans under the following terms:

             (1)    No loan may exceed eighty percent of the funds required to complete the business plan. No less than twenty percent of the funds required to complete the business plan shall be verified owner equity, not to include any in-kind services;

             (2)    The minimum loan amount that may be applied for is fifty thousand dollars;

             (3)    Each loan shall be made on an unsecured basis for an initial period of five years interest free; and

             (4)    Following the initial five-year period the applicant business shall be adjudged to be successful or failed:

             (a)    If the applicant's business fails, the loan shall be converted to a grant and no repayment is due; and

             (b)    If the applicant's business succeeds, the loan shall be set up for repayment on a twenty-year amortization at three percent interest with a ten-year balloon payment.

     Section 5. That chapter 1-16G be amended by adding thereto a NEW SECTION to read as follows:
    
     The jump start South Dakota subfund shall be used to develop and promote new start-up business activity and create employment in South Dakota. The Board of Economic Development shall recognize that each venture is inherently high risk, and give priority to business concepts that demonstrate significant growth potential or potential to generate substantial returns, or both, if successful. An applicant for funds shall meet the following criteria:

             (1)    An innovative business concept with a reasonable probability of creating a new market or filling an existing market need; and

             (2)    A five-year strategic plan for developing the business, creating jobs, and sourcing qualified employees to execute the plan with sufficient justification to support the amount of the request.

     Section 6. That chapter 1-16G be amended by adding thereto a NEW SECTION to read as follows:

     In connection with the administration of the jump start South Dakota subfund, the Board of Economic Development may, pursuant to chapter 1-26, promulgate rules to:

             (1)    Set the application procedures for those who apply for loans from the jump start South Dakota subfund;

             (2)    Establish criteria to determine how loan funds shall be awarded and distributed to applicants;

             (3)    Govern the use of proceeds of such loans; and

             (4)    Establish criteria for the terms and conditions upon which such loans shall be made, including the basis for giving consideration to geographic diversity among the approved applications.

     Section 7. That § 1-16G-24 be amended to read as follows:

     1-16G-24.   Earnings on the revolving economic development and initiative fund , the jump start South Dakota subfund, and the value added agriculture subfund may be used for the administrative costs of the Division of Finance of the Governor's Office of Economic Development. Such earnings shall be expended in accordance with the provisions of Title 4 on warrants drawn by the state auditor on vouchers approved by the commissioner of the Governor's Office of Economic Development. Eligible expenses may not exceed total interest earnings during the previous fiscal year prior to the deduction of loan losses for the same fiscal year. "


Moved by:    Wick
Second by:    Hunhoff
Action:    Prevailed by voice vote.

MOTION:     DO PASS HB 1135 AS AMENDED

Moved by:    Frost
Second by:    Teupel
Action:    Prevailed by roll call vote.(7-3-3-0)

Voting Yes:    Frost, Garnos, Hanson, Hunhoff, Teupel, Wick, Rhoden

Voting No:    Hargens, Madsen, Nesselhuf

Excused:    Michels, Olson (Mel), Peterson (Bill)

         HB 1229: authorize a South Dakota Statuary Commission.

Presented By:    Representative Orville Smidt
Proponents:    Dan Nelson, Sioux Falls Area Chamber Of Commerce

MOTION:     DO PASS HB 1229



Moved by:    Wick
Second by:    Madsen
Action:    Prevailed by roll call vote.(7-2-3-0)

Voting Yes:    Hanson, Hunhoff, Madsen, Nesselhuf, Teupel, Wick, Rhoden

Voting No:    Frost, Hargens

Excused:    Michels, Olson (Mel), Peterson (Bill)

MOTION:     ADJOURN

Moved by:    Nesselhuf
Second by:    Wick
Action:    Prevailed by voice vote.

Clara Shelbourn

____________________________

Committee Secretary
Bill Peterson, Chair


../02071000.HST
Page 1