DLN Issues : Civil Rights

MINUTES

EXECUTIVE BOARD

The three hundred second meeting of the Legislative Research Council Executive Board was called to order by Chair Senator Arnold M. Brown at 8:37 a.m. (CT), November 28, 2001, in LCR 1 of the State Capitol, Pierre, South Dakota.

A quorum was determined with the following members answering the roll call: Senators Kenneth D. Albers, Don Brosz, Arnold M. Brown, Dennis Daugaard, H. Paul Dennert, Robert Duxbury, and Royal "Mac" McCracken; and Representatives Quinten Burg, Michael Derby, Scott Eccarius, Phyllis Heineman, Claire Konold, Gordon Pederson, and Orville Smidt. Representative Gerald Lange was unable to attend the meeting.

Staff members present included James Fry, Director; and Teri Retrum, Senior Legislative Secretary.

(NOTE: For sake of continuity, the following minutes are not necessarily in chronological order. Also, all referenced documents are on file with the Master Minutes.)

(Clarification: Voice votes that prevail with all members present voting "aye" will carry the disposition language "prevailed unanimously." Voice votes that prevail with a majority of all members present voting "aye" will carry the disposition language "prevailed." Voice votes that prevail without all members present voting "aye" will list those members casting "nay" votes if so requested by the dissenting voter.)

Chair Brown stated that he would have some items to be added to the agenda for discussion purposes; however, he would present them as time permitted. The agenda was accepted with that caveat.

Legislative Research Council (LRC) Director James Fry reviewed the FY 2002 financial statement for the period ending October 31, 2001 (Document #1). He reported that, due to the cancellation of several conferences, the budget has a few more dollars than expected. Mr. Fry said that, overall, the budget is in excellent shape and on track.

Mr. Fry reviewed the membership dues that the Legislature pays to national organizations as follows:

National Conference of State Legislatures (NCSL) $84,802

Council of State Governments (CSG) $67,352

Education Commission of the States (ECS) $15,134

Responding to Senator Royal "Mac" McCracken, Mr. Fry said that the $15,134 figure for membership in the ECS represents the Legislature's one-third share. He commented that the ECS has been quick to respond to requests from the Legislature and staff; however, there is a possibility that the information needed from the ECS also can be received from one of the other organizations. Chair Arnold Brown announced his intention to revisit the necessity and benefit of all memberships. He said that perhaps, after review, the Legislature will discern that the services are duplicated and that the Legislature can forego some of the memberships. Mr. Fry said that the dues are not paid until spring, so there is time to make a decision regarding the dues paid to those organizations. Responding to Senator Kenneth Albers, Mr. Fry said that membership in the Uniform Laws Commission (ULC) provides the Legislature access to uniform laws and allows the Legislature input into those uniform laws. Representative Phyllis Heineman posed the question: "Do we have a way of tracking requests made to and responses received from NCSL and CSG to see if the services of both are worth the expense?" Chair Brown said that the Legislature and staff have always received excellent service from each organization. He said the Legislature will not be making a decision regarding dues this year; however, Chair Brown said that he is interested in discussing the matter in the future. Senator Robert Duxbury commented that NCSL is the best-known of the organizations and is very beneficial to the Legislature and staff. Mr. Fry said that CSG deals with a broader spectrum of government and that NCSL, legislatively, is probably the stronger of the two organizations. Senator Don Brosz said that the Four-State Conference, with Wyoming inactive, is not well attended and expressed his opinion that those conferences relate to issues concerning South Dakota perhaps more than those issues addressed at national conventions. Mr. Fry said that he made the decision not to send staff to the Four-State Conference this year because it was his understanding that the conference topics were geared more toward legislator's interests; however, Mr. Fry said that he would certainly follow any guidelines that the Executive Board would deem advisable. Representative Orville Smidt informed the Board that a resolution was passed at the Four-State Conference of State Legislatures to request CSG to revisit the state membership in the Four-State Conference and to perhaps add more states and two provinces in Canada.

Mr. Fry said that "We the People" requested that the fee also be waived for use of the legislative conference rooms.

At the request of the Board, Mr. Fry provided information on the "We the People" Conference. Mr. Fry said that "We the People" is a group of high school students that studies the U.S. Constitution and the Bill of Rights. There is a textbook for the study, and the final activity is to take a test on the U.S. Constitution and to participate in a simulated congressional hearing. Ms. Joyce Hazeltine, Secretary of State, and personnel from the Attorney General's office serve as judges for the event.

Continuing with the director's report, Mr. Fry briefly discussed the reluctance to submit the state's redistricting plan to the United States Department of Justice. He said that the department turned down a prior request from the interim Legislative Redistricting Committee for preclearance of the committee's configuration of Shannon, Todd, and Bennett Counties, stating that the department would not act on the issue until the plan was voted on by the Legislature as a whole. Mr. Fry said that the Legislature maintained the configuration of Shannon, Todd, and Bennett Counties, which was the preference of most individuals involved. He said that the Legislature passed the redistricting plan, and the Governor signed the bill. He said that it is LRC staff's opinion that if the American Civil Liberties Union or the Department of Justice has any issues with the plan, those entities can address them.

Mr. Fry also informed the Board that the LRC staff has provided redistricting assistance to eleven counties to date. He said that it has gone very well, and the counties have been appreciative of the assistance.

At this time, Chair Brown asked Senator Brosz to report on a meeting he attended regarding dental care in South Dakota. Senator Brosz reported that the meeting was held at the Wahpeton Science School in Wahpeton, North Dakota. He said that the meeting addressed the dwindling numbers of dentists and dental professionals in North Dakota and South Dakota. Senator Brosz informed the Board that the University of Minnesota Dental School has proposed that portable dental clinics be established and staffed by advanced dental students, hygienists, and assistants—Senator Brosz said that this opportunity was viewed very favorably by the dental profession. He said that costs could be minimized if the states would participate and maintain the portable clinics, rather than the University of Minnesota maintaining the sites. Senator Brosz said that the goal of the University is to assist North Dakota and South Dakota in taking care of clientele and recruiting those who want to enter the profession to practice in the two states. Chair Brown suggested that the chairs of the Senate and House Health and Human Services Committees monitor this proposed program.

Senator Paul Symens addressed the Board regarding a Wind Energy Conference held in Pierre. He told the Board that Mr. Randy Udall spoke about all sources of energy across the United States. Although he was unable to attend Mr. Udall's presentation, Senator Symens said that Mr. Udall's remarks received very positive comments from those in attendance. Senator Symens asked the Board to consider inviting Mr. Udall to speak, perhaps in a seminar format, to Legislators on one of the first couple of days of the 2002 Legislative Session. Representative Quinten Burg said that he did hear Mr. Udall speak and stated: "Mr. Udall showed us the broad picture regarding energy throughout the world." Senator Brosz asked about Mr. Udall's expertise in energy matters and his speaking fee. Chair Brown said that the issue is very timely and said that he believes it would be a good idea to hear Mr. Udall. Chair Brown asked Board members whether they wanted to impose a cap on how much it was willing to spend to acquire the speaking services of Mr. Udall. Representative Claire Konold said that he checked Mr. Udall's Web site and, in his opinion, Mr. Udall is biased toward wind energy; and stated: "To me, this is a proposal for wind energy." Senator Dennis Daugaard expressed support for Representative Konold's comments. Chair Brown stated: "I was going to support it if it was on all energy and not geared toward one source." Senator Michael Derby expressed favor for trying to acquire Mr. Udall to speak on wind energy. He said that he does not have much exposure to the topic, and he would like to learn more about it. Representative Phyllis Heineman suggested that perhaps the Board needs to review and develop a standard policy for acquiring speakers.

Chair Brown declared the motion failed due to lack of a second.

(Document #2 is a compilation of the draft final reports for the Legislature's 2001 interim committees listed below.)

Appropriations Committee—Dale Bertsch, Chief of Fiscal Analysis and Budget Analysis, addressed the Board regarding expenditure authority grants, and Reed Holwegner, Senior Fiscal Analyst, addressed the Board regarding adjustment training centers, community mental health centers, and the state's salary structure.

Senator Brosz asked how the figures presented concerning the adjustment training centers compare with the figures given to the Appropriations Committee at the end of session. Senator Brosz commented on the dissatisfaction expressed to him by individuals from one of the Adjustment Training Centers on how the center was treated in the numbers. Mr. Holwegner responded that the Appropriations Committee and staff were not provided those figures.

Senator Dennert stated that the Appropriations Committee was considering allocating more money to the Adjustment Training Centers but was led to believe that they had plenty of money.

Code Commission—Doug Decker, Code Counsel, reported that the Code Commission identified Volumes 5, 10B, and 12B to be reprinted for the upcoming year. He also said that the publishing contract for the South Dakota Code will expire on June 30, 2002, and the Commission is currently reviewing the process to either renew the publishing contract for the South Dakota Code or open the contract to bids from other publishers.

Government Operations and Audit Committee—Annie Mertz, Senior Fiscal Analyst, reported on the corrections issues assigned to the committee, and Rich Hornak, Legislative Audit, reviewed the process relating to the operations and fiscal affairs of state government.

Ms. Mertz responded to Board questions concerning the report from the Juvenile Corrections Monitor. She said that the monitor is required by law to provide an annual report of his activities.

After brief discussion, REPRESENTATIVE SMIDT MOVED, SECONDED BY REPRESENTATIVE KONOLD, TO REQUEST THE JUVENILE CORRECTIONS MONITOR TO PROVIDE A MONTHLY REPORT ON THE NUMBERS OF COMPLAINTS RECEIVED. THE MOTION PREVAILED UNANIMOUSLY ON A VOICE VOTE.

Legislative Redistricting Committee—Reuben D. Bezpaletz, Chief Analyst/Research and Legal Services, reported that he was well satisfied with the AutoBound technology purchased to assist the Legislature and staff in redistricting. From a legal standpoint, Mr. Bezpaletz said that in his opinion the Legislature is in a better position to withstand a court challenge to its redistricting plan than ten years ago.

The Executive Board adjourned at 10:17 a.m. and reconvened at 1:40 p.m.

Upon consensus of the Board, Chair Brown directed staff to send a letter to the family expressing condolences upon the death of Dr. Hilton Briggs, former President of South Dakota State University.

Mr. Rich Lauer, Chair, Investment Council, and Mr. Steve Myers, State Investment Officer, presented the Council's Annual Report (Document #3). Mr. Myers said that the Investment Council experienced a –2.88% negative return for FY 2001; however, the investment performance generated an additional 125 million dollars. Mr. Myers commended the superior performance of the investment team. He said that South Dakota ranks in the top one percent in trade transactions. Mr. Myers urged the Board to look at the long-term performance rather than the short-term performance.

Mr. Lauer said that South Dakota is unique in the cooperation experienced between the Legislature and the Investment Council. He said that the Council is very protective of its upstanding reputation.

Responding to Representative Derby, Mr. Myers said that the Investment Council is not statutorily permitted to invest in venture capital funds. He said that he has broached the possibility of making it a legal investment category for the Council, to no avail.

Mr. Myers briefly discussed the Dakota Cement Trust and said that he fully expected to "get the twelve million dollars income."

Mr. Lauer informed the Board that on November 7, 2001, the Investment Council passed a unanimous motion to recommend a bonus of $64,719 to Mr. Myers according to the current incentive plan.

The Board went into executive session at 2:50 p.m. and came out of executive session at 3:08 p.m.

Reporting that the subcommittee is recommending a bonus to Mr. Myers based on the current formula, REPRESENTATIVE ECCARIUS MOVED, SECONDED BY REPRESENTATIVE DERBY, THAT THE EXECUTIVE BOARD APPROVE THE AWARDING OF A BONUS OF $64,719 TO THE STATE INVESTMENT OFFICER FOR THE TWO-YEAR PERIOD ENDING JUNE 30, 2001.

Section 1. Definitions.

(1) "performance period" is the two fiscal years prior to the year in which the bonus is to be awarded.

(2) "incentive maximum" is one-half of the investment officer’s salary during the second year of the performance period.

(3) "Investment Council capital market benchmark" is return of a portfolio mix determined by the South Dakota Investment Council during the performance period.

Section 2. Calculation of the bonus.

I. multiply the incentive maximum by 0.3, and multiply that product by:

(a) zero if performance during the performance period versus the large plan universe does not reach the 40th percentile;

(b) 0.2 if performance during the performance period versus the large plan universe reaches the 40th percentile;

(c) 0.5 if performance during the performance period versus the large plan universe reaches the 33rd percentile;

(d) 1.0 if performance during the performance period versus the large plan universe reaches the 25th percentile.

II. multiply the incentive maximum by 0.3, and multiply that product by:

(a) zero if performance during the performance period does not exceed the Investment Council capital market benchmark by 0.25%;

(b) 0.2 if performance during the performance period exceeds the Investment Council capital market benchmark by at least 0.25%;

(c) 0.4 if performance during the performance period exceeds the Investment Council capital market benchmark by at least 0.50%;

(d) 0.6 if performance during the performance period exceeds the Investment Council capital market benchmark by at least 0.75%;

(e) 0.8 if performance during the performance period exceeds the Investment Council capital market benchmark by at least 1.00%;

(f) 1.0 if performance during the performance period exceeds the Investment Council capital market benchmark by at least 1.25%.

III. multiply the incentive maximum by 0.4, and multiply that product by the quotient of the aggregate bonus earned by portfolio managers in the South Dakota Investment Council divided by the aggregate potential bonus of portfolio managers in the South Dakota Investment Council for the performance period.

4. The bonus is the sum of the results of steps I, II, and III.

At the request of the Chair, Mr. Curt Everson, Commissioner, Bureau of Finance and Management, addressed the Board concerning the Cement Trust Fund. He said that it is the only fund not requiring legislative action. The Health Care Trust Fund and the Education Enhancement Trust Fund are not yet defined for calculation of distribution. All the trust money is accounted for in the state treasury.

Discussion ensued. Responding to Representative Heineman, Senator Daugaard said that it is the intent that trust fund distribution defines the investment policy. Senator Daugaard also responded to a question posed by Senator Brosz regarding the Education Enhancement Funds by stating that it is not the intent that those funds replace other state aid funds.

Chair Brown suggested that perhaps after the Governor's budget message leadership would be able to meet with Mr. Everson to address concerns regarding defining calculation of distribution for the Health Care Trust Fund and the Education Enhancement Trust Fund.

Prescription Drug Issues Committee—Jacquelyn Storm, Principal Staff Attorney, stated that committee members focused on educating themselves on the issues. The committee also reviewed the status of prescription drug issues on the federal level.

Retirement Laws Committee—Annie Mertz said that the committee was told that the reserve fund can absorb a one-year loss of ten percent and that the retirement fund is still healthy.

Rules Review Committee—Doug Decker said that the committee reviewed 79 sets of rules.

State-Tribal Relations Committee—Tom Magedanz, Principal Research Analyst, reported that those in attendance at the committee's third meeting held at Agency Village, headquarters of the Sisseton-Wahpeton Sioux Tribe, in the Tribal Council Chambers, were very appreciative of the presentations, testimony, and the tours of the Dakota Western plant, an economic development project at the Long Hollow District, and the Dakota Magic Casino, one of the tribe's three casinos.

Streamlined Sales Tax Project Task Force—Jim Fry discussed the requirements that are among issues for South Dakota regarding a streamlined sales tax.

Teacher Credentialing and Compensation Committee—Mark Zickrick, Principal Fiscal Analyst, said that, among other topics discussed, the committee heard testimony regarding the state's teacher certification process and what is perceived by those testifying on the subject to be a very cumbersome procedure.

Wind Power Generation Committee, David Becker, Senior Fiscal Analyst, reviewed legislation adopted by the committee and reviewed other committee activities, including a tour of the wind turbines on the Buffalo Ridge near Lake Benton, Minnesota.

Ms. Storm informed the Board that the Supreme Court Opinions Subcommittee reviewed two court cases; one involved a dog bite case, the other involved confidentiality of records maintained by court services officers. Senator Albers stated that the subcommittee does not support nor disagree with either of the cases but decided that the issues involved should be addressed by the full Legislature.

Mr. David Ortbahn, Principal Research Analyst, LRC, distributed a summary of intern applications from 1990 to 2002 and a breakdown of 2002 legislative intern applications by school and party affiliation (Document #4). Mr. Ortbahn commented on the high caliber and qualifications of the 2002 interns. He urged the Board to consider increasing the per diem for interns by ten dollars. Mr. Ortbahn said that the competition will reach a higher level in the upcoming election year due to college students accepting intern positions with political campaigns.

On behalf of the Children's Home Society, Senator Daugaard requested permission for the Society to use the Senate Chamber for the Children's Home Society Annual Meeting on April 24, 2002, and to waive the fee.

Mr. Fry informed the Board that the Legislature leased seventy-five computers which may become available next November for buy-back by interested legislators.

Board members discussed legislative parking during session. Chair Brown suggested requesting an additional five spaces for legislative parking during session. Mr. Fry said that currently the Legislature has ninety-one reserved spaces, including one for the doctor of the day. Senator Dennert said that he supports reserving enough parking spaces for each interested legislator in that legislator's name. Senator Duxbury said that he prefers adding a few more parking spaces to the current reserved legislative parking space block.

The Executive Board adjourned at 5:10 p.m.