Letter from concerned Appropriators sent to caucus leaders about impact of House Bill 1281

A letter just went out this afternoon from several concerned members of the House & Senate with regards to the impact and implications of House Bill 1281, which refers a number of day to day decisions on federal spending which have been done within expenditure guidelines set by the budget, and puts it on a far tighter rein, and might require Appropriators to spend a lot more time in Pierre:

Dear Caucus Leaders:

It is no secret that we believe HB 1281, which was reincarnated as the “budget deal Federal spending framework”, was the wrong direction for South Dakota. We ask the Leadership of both Chambers to consider the issues we raise below and acknowledge the need for a Legislative fix to the problems we created.  The House majority spoke when House Bills 1333, 1334, 1335, 1336, and 1339 were defeated and the Senate spoke with one unanimous voice on SR701, yet somehow, we’re living with the reality of HB 1281 and we have many questions that we cannot find answers for.  We’ve developed a short list of the most obvious questions/concerns we’ve arrived at thus far.

1. 1. As appropriators or former appropriators, we are aware that there are agencies not explicitly referenced in HB 1281 which may receive funding from the federal legislation referenced in the bill. We believe that there is confusion regarding what process those agencies should follow under this new legislation. Should they follow the new budget unit process, or should they simply continue conducting business as usual?
   2. What constitutes a “change in policy” as referenced in section 10 of HB 1281? If a department must alter a program to match shifting federal guidance, would that constitute a “change in policy?” For instance, theSouth Dakota Department of Transportation frequently has to adjust to revised rules and criteria for various federal funds, yet all funds would still be used for roads and bridges.  Who is the arbiter of the “change in policy”?  Does the Transportation Commission have authority to accept grants with changing parameters or have we destroyed that Commission and must now legislate which highways are repaired or not?  Is the STIP now worthless or at best subject to legislative approval? 
   3. Do discretionary, competitive grants – like local law enforcement grants – constitute new programs? This same situation repeats time and time again across state government.
   4. Section 10 also states that an agency may not expend federal funds for these new programs (again, unclear on what constitutes a new program) “until the special committee… releases the appropriated money.” What process and timeline does the committee intend to follow for releasing that money? Does the Joint Appropriations Committee have authority over these grants during session, or is it only the “Special Committee”?
   5. For the remaining federal fund authority in the base budgets of various agencies impacted by HB 1281, would they need to transfer that money to the new budget units as identified in section 1, and then transfer the money back to the previous budget unit?
   6. Many sections of the Consolidated Appropriations Act, 2021, Pub. L. 116-260, as is shown in HB 1281, appear to be replaced by Public Law 117-43. What impact does that have on the provisions of HB 1281?
   7. For projects that span multiple fiscal years (whether state or federal), would agencies need to request a separate release of expenditures only for work to be performed in state FY 2023? This seems like it could overcomplicate planning for the type of major construction projects that our legislature has approved in the past two years.
   8. What kind of time commitment is anticipated from current appropriators until the next legislative session? How much additional work do you expect HB 1281 will create? If our Legislative Branch wants to be in “control” of the budget shouldn’t it be the responsibility of the Legislative Research Council fiscal staff to do the research to identify the agency budgets impacted and subject to HB 1281? How many additional staff will we need and what will be the cost to our citizens to do all this analysis, when in the end we can only do what was already authorized by the U.S. Congress?

There are many additional questions that we could ask as to how agencies accounting processes should work. As legislators, we should clarify our intent so that the administration can move forward with a workable process – if that is even possible given the vagueness of this legislation.

This is a legislative problem created by our haste to “get out of town” on the last day of session.  We have analyzed HB 1340, the G-Bill.  There are no ill effects if HB 1281 is disposed of.   We need to stand up and acknowledge our error and find a Legislative solution or ask the Governor to veto this bill and then work to sustain her veto.

Respectfully,

The undersigned members:

Senators:
John Wiik  
David Johnson                                                                     

Representatives:
David Anderson
Larry Tidemann
Hugh Bartels
Lance Koth
Mike Derby

What are your thoughts?