Constitutional amendments, referred law on ’98 ballot

Constitutional amendments, referred law on '98 ballot Editor's Note: South Dakota voters will be considering eight constitutional amendments and one referred law on the ballot Nov. 3. The Plain Talk has printed several ballot issues in the past weeks. Here are pros and cons of the final ballot questions and the Attorney General's official explanations. The pros and cons are written by proponents and opponents of the ballot questions. The information is from a pamphlet prepared by the Office of Secretary of State.

Referred Law 2

Title: An act to transfer the unclaimed property office from the State Treasurer's Office to the Secretary of Revenue.

Attorney General

Explanation

Under current law, the State Treasurer administers the unclaimed property laws. The 1997 Legislature transferred this responsibility to the Secretary of Revenue.

A vote "Yes" will transfer the unclaimed property office to the Secretary of Revenue.

A vote "No" will leave the unclaimed property office with the State Treasurer.

Pro — Referred Law 2

Savings to taxpayers and increasing the amount of unclaimed property to be found and returned to South Dakotans are the reasons this proposal should become Law.

Testimony presented before the Legislature by the Department of Revenue estimates initial savings of $100,000 per year in administrative costs. This can be achieved by the economies of scale that the Department of Revenue can provide, i.e., by allowing 42 existing revenue auditors plus support staff to include the search for unclaimed property within their regular audit activities. Since the Department of Revenue already has contact with businesses responsible for the collection of sales taxes, or the payment of other taxes to the State, it can very effectively absorb the search for unclaimed property with minimal expense.

Since 42 auditors would make more contact with the business community, additional unclaimed property could be discovered…making the cost of recovery even more efficient than is currently possible.

Finally, the Department of Revenue can use the same strong relationships it must maintain with other states for effective tax administration to promote strong cooperative efforts in interstate search for unclaimed property and the rightful owners of that property.

More efficiency, effective use of existing manpower, and strong interstate cooperation make this proposal a very good idea worthy of becoming Law.

Submitted by: Sen. Mike Rounds, 806 Cherry Dr., Pierre, SD 57501. Senator Rounds represents legislative District 24.

Con — Referred Law 2

Four years ago South Dakotans elected Dick Butler as their new State Treasurer after he campaigned on a promise to clean up the office and improve collections and management of unclaimed property such as abandoned bank accounts, insurance policies, and securities.

State Treasurer Butler kept his promise — collecting record-breaking millions from banks and corporations and faithfully returning these monies to rightful owners. Treasurer Butler controlled costs while depositing record amounts to the general fund after expenses and paid claims. He brought to the office a new responsive attitude of processing claims with a desire to pay rather than deny. Preferential treatment for certain powerful banks was stopped in its tracks.

In response, the legislature and Governor retaliated with legislation to take the Unclaimed Property Division away from State Treasurer Butler and move it to the revenue department, the tax-collecting agency under the governor's office.

South Dakota citizens reacted by collecting 22,000 signatures referring this bad law to a vote — a law the Sioux Falls Argus Leader labeled a "power grab, pure and simple."

In defense, the bill's sponsors suggested it might save money. However, comparisons show Treasurer Butler's office is already among the most efficient in the nation. A majority of states entrust unclaimed property to their State Treasurer. Few place it in the hands of tax collectors as the Governor and legislature seek to do because unclaimed property is private property, not tax revenues.

We believe it perilous to put these duties under the governor's office. The time will come when our governor is cozy with a big city bank or even a small country bank and helps them avoid collections. Under the current system and as the 1994 election for State Treasurer demonstrated, the elected State Treasurer remains accountable to the people — not to powerful financial institutions.

To keep authority with your elected State Treasurer — Vote No on Referred Law 2.

Submitted by: Sen. Bernie Hunhoff (District 18), PO Box 175, Yankton, SD 57078; Sen. Rebecca Dunn (District 15), 320 N Summit Ave., Sioux Falls, SD 57104; Rep. Pat Haley (District 21), 766 Utah Avenue SE, Huron, SD 57350; Rep. Larry Lucas (District 27) PO Box 182, Mission, SD 57555. These egislators were the sponsors of the referendum petition on this law.

Constitutional

Amendment G

Title: An Amendment to Article VIII of the South Dakota Constitution, permitting the investment of permanent school funds in certain stocks, bonds, mutual funds, and other financial instruments.

Attorney General

Explanation

The S.D. Investment Council manages and invests the state permanent school fund, and other educational or charitable funds. The Investment Council may not buy stocks, mutual funds or similar investments with this money. Additionally, if any of these funds lose money, the Legislature must reimburse all losses.

Amendment G would allow the Investment Council to purchase stocks and similar investments. If these investments lose money, the Legislature would only be required to reimburse if the loss was caused by imprudence or other unconstitutional acts.

A vote "Yes" will allow these state funds to be invested in stocks and similar investments, and limit the reimbursement requirements.

A vote "No" will leave the Constitution as it is.

Pro — Constitutional Amendment G

In 1998 South Dakota legislature passed a joint resolution placing Amendment G on the ballot. If approved, the $130 million permanent school and other education funds would be allowed to invest in "stocks, bonds, mutual funds, and other financial instruments as provided by law" by the South Dakota Investment Council. Any loss occurring through an unconstitutional act shall be made good through a special appropriation. The Amendment would allow more investment flexibility to maintain the fund against inflation and to generate higher future income.

The members of the South Dakota Investment Council are professionals responsible for investing over $4.8 billion of state funds. The Commissioner of School and Public Lands is a member of the council. The Council has an exceptional investment record over the past 25 years.

Amendment G would maintain the purchasing power of the school funds for future generations of school children. This would be done with professional management and more diversification of the funds. A yes vote would allow the school funds to be invested similar to the state retirement systems.

Amendment G means preservation for the future of our schools. Vote "YES".

Submitted by: Curt Johnson, PO Box 852, Ft. Pierre, SD 57532. Johnson is the Commissioner of School and Public Lands.

Con — Constitutional Amendment G

Our founding fathers were concerned about funding the education of our children when they established the permanent education fund. This was a solid, low-risk investment of revenues from land and other sources to help fund education into the future.

This proposed amendment asks us to allow the state to invest these funds in higher-risk stocks, bonds, etc. instead of the current conservative, low-risk investments? Before you decide, consider the following five points:

(1). We had a similar issue in 1994 and again in 1996. How many times do we have to say, "NO"?

(2). The state investment council has enjoyed great success in investing other state dollars. However, higher risk investments potentially earn more dollars, but they also potentially lose more dollars. Our founding fathers intended this fund to be a conservative fund, lasting through the ages.

(3). We are constantly told that our teachers are the lowest paid in the country. If we hit a down market, what risk does that place on our teachers?

(4). What happens if there is a loss? This amendment makes the state liable for all "losses that may occur through any unconstitutional act…" What is unconstitutional? It usually takes a judge to decide. However, win or lose, we, the people, make up the state. Thus, we, the people, would pay for their risky investment with higher taxes. This was not the intent of the permanent school fund.

(5). Finally, this is a constitutional amendment. History shows that markets go up and down. What happens if the market crashes like it did in the '30s? Our constitution is not only for today.

Submitted by: Sen. Bob Drake, PO Box 92, Bowdle, SD 57428. Senator Drake represents legislative District 23.

Constitutional

Amendment H

Title: Amendments to Article III, Section 3 of the South Dakota Constitution, relating to age qualifications for legislative office, and to Article IV, Section 2 of the South Dakota Constitution, relating to the age qualifications for Governor and lieutenant governor.

Attorney General

Explanation

The Constitution requires that state senators and representatives be 25 years of age or older, and that the Governor and lieutenant governor be 18 years of age or older. Amendment H would lower the age qualification for state senators and representatives from 25 to 21, and would raise the age qualification for the Governor and lieutenant governor from 18 to�21.

A vote "Yes" will establish the minimum age requirements for state legislators, the Governor, and the lieutenant governor, at 21 years old.

A vote "No" will leave the Constitution as it is.

Pro — Constitutional Amendment H

Every state in our country has a minimum age to seek elected office. South Dakota is no different. Our constitution presently requires a person to be of voting age (18 years old) to run for governor and (25 years old) to run for the legislature.

Amendment H will change the South Dakota Constitution, so the age to seek the governor's office, and to run for the state legislature, will be the same, 21 years of age.

The 1998 South Dakota legislature recently passed this ballot measure with overwhelming support for changing the age to 21. Many legislators felt 18 years of age was too young to seek office, as most people have just completed high school. Other legislators felt 25 years old was denying our younger citizens the right to seek legislative office. The consensus was, 21 years of age was considered a reasonable age for those wishing to seek office, as this age also coincides with our laws allowing the consumption of alcohol.

Amendment H will correct a long standing inequity concerning the citizens of our state. That inequity is equal rights. The strongest message our government can send is, We Are All Created Equal. Our constitution and our daily lives are deeply rooted in equal rights. South Dakota's constitution requiring two different age requirements to seek office for two separate, but equal branches of government, is in conflict with the very spirit of our constitution.

It's the duty of our legislative government to make these elected offices available to all on an equal basis. We must take issue with any law, ordinance or rule that separates people by age, color, race, or creed. No one knows the perfect age to be qualified to seek elective office, but our present constitution absolutely separates people by age when seeking public office. That's why a vote YES on Amendment H is so important, it will restore equality to our constitution.

Submitted by: Rep. Bill Napoli, 6180 S Highway 79, Rapid City, SD 57701. Rep. Napoli represents legislative District 35.

Con — Constitutional Amendment H

Constitutional Amendment H proposes to lower the minimum age for legislators from 25 to 21 and to establish the same age restriction for Governor and Lieutenant Governor.

HJR1002 as originally introduced in the 1998 legislative session would have left the minimum age for legislators at 25 and established a minimum age of 25 to hold the office of Governor and Lieutenant Governor. I could have supported that proposal.

My opposition to Amendment H has more to do with the minimum age for Governor at 21. But my arguments will also apply to the minimum age for legislators.

There is no question in my mind that we need to address the age issue for Governor. In all due respect to my colleagues in the Legislature, I don't believe Amendment H does that in a responsible manner.

Most young people, although book smart and educated by the time they turn 21, still require a period of years to mature mentally, emotionally, morally and socially. The argument that an 18 year old may vote and may join the military or that a 21 year old may buy alcoholic beverages is not a valid argument. These arguments make for interesting comparisons, but it appears that we are comparing apples to oranges. When joining the military we serve in a regimented environment where leaders prepare a plan of the day and control our every move. When elected Governor you become the leader and the demands of that office requires experience and wisdom beyond 21 years.

At 21 we are normally completing our formal education and going into the workplace where we will learn by experience and by facing adversities that make us grow in wisdom. The office of Governor and representing the citizens of South Dakota in the Legislature is not the proper setting to gain that experience and wisdom.

It is for the above reasons that I urge a NO vote on Constitutional Amendment H.

Submitted by: Rep. Mike Broderick, 902 E. Lynn Ave., Canton, SD 57013. Rep. Broderick represents legislative District 16.

Constitutional

Amendment F

Title: An amendment to Article VIII of the South Dakota Constitution, concerning the classification of property for purposes of taxation.

Attorney General

Explanation

The Constitution permits the Legislature to classify real property for school taxation purposes, but limits agricultural property to a single class.

Amendment F would permit an unlimited number of classes of agricultural property for school taxation purposes. The number of classes and the tax rate for each class would be set by the Legislature. All property would still be assessed at or in equal proportion to its fair market value.

Amendment F may conflict with Amendment�A. If both constitutional amendments pass and are found to conflict with each other, one or both could be declared void.

A vote "Yes" will allow any number of classes of agricultural property for school taxation purposes.

A vote "No" will leave the Constitution as it is.

Pro — Constitutional Amendment F

This proposed amendment to our State's Constitution would make it possible to have more than one class of Agricultural Property for tax purposes.

The present constitutional language permits, but doesn't require, an agricultural class of property. The Supreme court, in a recent decision, ruled that although the language is permissive, it is still restrictive in that we can only have one class of agricultural property. By this interpretation, they struck down a law that placed land which sold for a very high price in a separate class called non-typical agriculture.

These high priced sales usually take place in areas where there is urban development, recreational opportunities, aesthetic values, or other things that have no relationship to the land's ability to generate agricultural income.

In some counties by including all these high sales in the market ratio analysis, it will drastically increase valuations and cause taxes on land to become so high it will force the owners to sell the land rather than leave it in agriculture. A worse case example would be no pastures or hay meadows in the Black Hills.

Several states have laws, which allow land to be taxed at its actual use, rather than its highest and best use. If the land is sold and a change in use results, e.g. housing or commercial where it was agricultural, then the property is revalued. This type of law would probably be unconstitutional under our present wording but would be permissible with this proposed amendment.

A problem with the current property valuation and taxation procedure is that it's built on averaging; thus, some properties are over valued and over taxed while others are under valued and under taxed. In order to have equity, we must allow for more than one class of agricultural property which will minimize the problem of averaging. As our state's economy continues to change, it is imperative that the Legislature be permitted to properly classify all property.

Submitted by: Rep. Larry Gabriel, HC 84 Box 22, Cottonwood, SD 57775. Rep. Gabriel is a rancher from Haakon County and represents legislative District 26.

Con — Constitutional Amendment F

This amendment would create another class of agricultural land for tax purposes called non-agricultural acreage, by creating two classes of agricultural property, one that's sold for less than 150 percent of its agricultural income value and one that sold for more than 150 percent of its agricultural income value.

The County assessors tell me it would be very difficult to implement, and since it was judged to be unconstitutional by the Supreme Court in 1997, this would seem to be a wasted effort.

Amendment F is another attempt to allow agricultural property to be split into two different classes, which in effect creates the tax increase on those who paid too much for their property. The courts determined that valuing property solely on its sales price and not accounting for any agricultural factors such as type of soil, terrain, climate, productivity, etc., was unconstitutional.

The court rejected the idea that the property had to be economically self-sufficient and determined the property should not be separately classified simply because the owner may have paid too much.

This amendment if passed, will end up in front of the Supreme Court again, costing the taxpayers more money. I would recommend a no vote on Amendment F.

Submitted by: Rep. Doug Johnson, RR 1 Box 49, Elkton, SD 57026. Rep. Johnson represents legislative District 8.

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