80th Legislative Session _ 2005

Committee: Senate Commerce
Thursday, February 10, 2005

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P    Abdallah
P    Kelly
P    Koetzle
P    Schoenbeck
P    Sutton (Dan)
P    Broderick, Vice-Chair
P    McCracken, Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Senator McCracken, Chair

MOTION:     TO APPROVE THE MINUTES OF FEBRUARY 8, 2005.

Moved by:    Koetzle
Second by:    Broderick
Action:    Prevailed by voice vote.

         SB 182: provide for a commercial real estate broker lien.

Presented by:    Senator Dick Kelly
Proponents:    Michael Bender, self, Sioux Falls
        Representative Joel Dykstra
Opponents:    Bob Riter Jr., Nat'l Federation of Independent Business

MOTION:     AMEND SB 182

182ja
     On the printed bill, delete everything after the enacting clause and insert:
"      Section 1. Terms used in this Act mean:

             (1)    "Broker," as defined in §  36-21A-6;

             (2)    "Commercial real estate," any real estate other than:

             (a)    Real estate containing one to four residential units; or

             (b)    Real estate on which no buildings or structures are located and which is zoned for single-family residential use.

                 Commercial real estate does not include single family residential units such as condominiums, townhouses, or homes in a subdivision when sold, leased, or otherwise conveyed on a unit by unit basis, even though these units may be a part of a larger building or parcel or real estate containing more than four residential units;

             (3)    "Commission," any compensation that may be due a broker for the performance of licensed services;

             (4)    "Real estate," as defined in §  36-21A-11.

     Section 2. Any licensed broker shall have a lien upon commercial real estate or any interest in that commercial real estate that is the subject of a purchase, lease, or other conveyance to a buyer or tenant of an interest in the commercial real estate, in the amount that the broker is due for licensed services, which shall include brokerage fees, consulting fees, and management fees:

             (1)    Under a written instrument signed either by the owner of an interest in the commercial real estate or by the owner's duly authorized agent; or

             (2)    Under a written instrument signed by a prospective buyer or prospective tenant or the buyer's or tenant's respective duly authorized agent.

     The lien shall be available to the broker named in the instrument signed by the owner, buyer, or tenant and not to an employee or independent contractor of the broker.

     Section 3. The lien provided for pursuant to this Act shall attach to the commercial real estate or any interest in the commercial real estate upon:

             (1)    The broker being otherwise entitled to a fee or commission under a written instrument signed by the owner, buyer, tenant, or their respective duly authorized agent, as applicable; and
             (2)    Except as provided in section 4, 5, 6, or 7 of this Act, the broker recording a notice of lien in the register of deeds office of the county in which the real property or any interest in the real property is located, prior to the actual conveyance or transfer of the commercial real estate against which the broker is claiming a lien. The lien shall attach as of the date of the recording of the notice of lien and does not relate back to the date of the written instrument.

     Section 4. Except as provided in sections 5, 6, or 7 of this Act, when payment to a broker is due in installments, a portion of which is due only after the conveyance or transfer of the commercial real estate, any notice of lien for those payments due after the transfer or conveyance may be recorded at any time which is subsequent to the transfer or conveyance of the commercial real estate and which time is within one hundred twenty days of the date on which the payment is due. However, such notice of lien is only effective as a lien against the transferor's interest in the commercial real estate to the extent moneys are still owed to the transferor by the transferee; but the lien is effective as a lien against the transferee's interest without the limitations in this section. A single claim for lien recorded prior to transfer or conveyance of the commercial real estate claiming all moneys due under an installment payment agreement is valid and enforceable as it pertains to payments due after the transfer or conveyance. However, as payments or partial payments of commission are received, the broker shall provide partial releases therefor, thereby reducing the amount due the broker under its notice of lien.

     Section 5. In the case of a lease, a sublease, or assignment of lease, the notice of lien shall be recorded not later than one hundred twenty days after the tenant takes possession of the leased premises. However, if the transferor personally serves written notice of the intended execution of the lease on the broker entitled to claim a lien at least ten days prior to the date of the intended execution of the lease, the notice of lien shall be recorded before the date indicated in such notice for the execution of the lease. The lien shall attach as of the recording of the notice of lien and does not relate back to the date of the written instrument.

     Section 6. If a broker is due additional commission either as a result of future actions, including the exercise of an option to expand the leased premises, to renew or extend a lease, or to purchase the property, or otherwise, pursuant to a written instrument signed by the then owner or tenant, collectively, future commissions, the broker may record its notice of lien at any time after execution of the lease or other written instrument that contains any such option but not later than ninety days after the event or occurrence on which the future commission is claimed occurs. Notwithstanding section 10 of this Act, an action to foreclose a lien to collect future commissions must be commenced within two years of the occurrence or transaction on which the future commission is claimed.

     Section 7. In the event that the property is sold or otherwise conveyed prior to the date on which a future commission is due, if the broker has filed a valid notice of lien prior to the sale or other conveyance of the property, the purchaser or transferee is deemed to have notice of and shall take title to the property subject to the notice of lien. However, if a broker claiming a future commission fails to record its notice of lien for future commission prior to the recording of a deed conveying legal title to the property to the purchaser or transferee, the broker may not claim a lien on the property. This section does not limit or otherwise affect claims or defenses a broker or owner or any other party may have on any other basis, in law or in equity.

     Section 8. If a broker has a written agreement with a prospective buyer or tenant as described in subdivision (2) of section 2 of this Act, the lien shall attach upon the prospective buyer or tenant purchasing or otherwise accepting a conveyance or transfer of an interest in the commercial real estate and the recording of a notice of lien by the broker in the register of deeds office of the county in which the real property, or any interest in the real property is located, within ninety days after the purchase or other conveyance or transfer to the buyer or tenant. The lien shall attach as of the date of the recording of the notice of lien and does not relate back to the date of the written instrument.

     Section 9. The broker shall, within ten days of recording its notice of lien, either mail a copy of the notice of lien to the owner of record of the commercial real estate by registered or certified mail, or to the agent of the owner of record at the address of the owner stated in the written instrument on which the claim for lien is based, or if no such address is given, then to the address of the property on which the claim of lien is based. If the notice of lien is recorded within ten days prior to closing, the broker is not required to mail or personally serve a copy of the notice of lien. Mailing of the copy of the notice of lien is effective when deposited in the United States mailbox with postage prepaid. The broker's lien is unenforceable if mailing or service of the copy of notice of lien does not occur at the time and in the matter required by this Act.

     Section 10. A broker may bring suit to enforce a lien in the circuit court in the county where the property is located by filing a complaint and sworn affidavit that the notice of lien has been recorded. The broker claiming a lien shall, within two years after recording the notice of lien, commence proceedings, by filing a complaint. Failure to commence proceedings as required in this section within two years after recording the notice of lien extinguishes the lien. No subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceeding under this Act. A broker claiming a lien based upon an option or other right to purchase or lease shall, within two years after the transfer or conveyance of the commercial real estate under the exercise of the option to purchase or lease, commence proceedings by filing a complaint. Failure to commence proceedings within this time shall extinguish the lien. No subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceeding under this Act.

     A complaint under this section shall contain a brief statement of the contract or instrument on which the lien is founded, the date when the contract or instrument was made, a description of the services performed, the amount due and unpaid, a description of the property that is subject to the lien, and other facts necessary for a full understanding of the rights of the parties. The plaintiff shall make any interested party, of whose interest the plaintiff is notified or has knowledge, a defendant to the action, and shall issue summons and provide service as in other civil actions. If any defendant resides or has gone out of the state, or on inquiry cannot be found, or is concealed within the state so that process cannot be served on that defendant, the plaintiff shall cause a notice to be given to that defendant, or cause a copy of the complaint to be served upon that defendant in the manner and upon the same conditions as in other civil actions. Failure of the plaintiff to provide proper summons or notice is grounds for judgment against the plaintiff and in favor of the defendant who is not properly served with summons or notice with prejudice.

     Section 11. The notice of lien shall state the name of the claimant, the name of the owner, a description of the property upon which the lien is being claimed, the amount for which the lien is claimed, and the license number of the broker. The notice of lien shall recite that the information contained in the notice is true and accurate to the knowledge of the signator. The notice of lien shall be signed by the broker or by a person authorized to sign on behalf of the broker and shall be verified.

     Section 12. Whenever a notice of lien has been filed with the register of deeds and a condition occurs that would preclude the broker from receiving compensation under the terms of the written agreement on which the lien is based, the broker shall provide to the owner of record, within ten days following written demand by the owner of record, a written release or satisfaction of the lien.

     Section 13. Upon written demand of the owner, lienee, or other authorized agent of the owner or lienee, which demand shall be served on the broker claiming the lien requiring suit to be commenced to enforce the lien or answer to be filed in a pending suit, a suit shall be commenced or an answer filed within thirty days after service of the written demand, or the lien shall be extinguished. Service of the written demand may be made by registered or certified mail, return receipt requested, or by personal service.

     Section 14. Whenever a notice of lien has been filed with the register of deeds and such claimed commission has been paid to the broker claiming the lien, or if there is failure to institute a suit to enforce the lien within the time provided by this Act, the broker shall acknowledge satisfaction or release of the notice of lien in writing, on written demand of the owner within five days after payment or within five days after expiration of the time in which the notice of lien was to be filed.

     Section 15. If the broker and the party or parties from whom the commission is claimed agree to alternative dispute resolution, the claim shall be heard and resolved in the forum on which these parties have agreed. The court before which the lien foreclosure proceeding is brought shall retain jurisdiction to enter judgment on the award or other result made or reached by alternative dispute resolution on all parties to the foreclosure. The broker's notice of lien shall remain of record and the foreclosure proceeding shall be stayed during the pendency of the alternative dispute resolution process.

     Section 16. The cost of proceedings brought under this Act including reasonable attorneys' fees, costs, and prejudgment interest due to the prevailing party shall be borne by the nonprevailing party or parties. If more than one party is responsible for costs, fees, and prejudgment interest, the costs, fees, and prejudgment interest shall be equitably apportioned by the court or alternative dispute resolution tribunal among those responsible parties.

     Section 17. Except for a waiver or release of lien provided in consideration of payment of the fee claimed by the broker, or pursuant to sections 12 and 14 of this Act, any waiver of a broker's right to lien commercial property under this Act, any other waiver or release of lien is void.

     Section 18. Prior valid recorded liens, mortgages, and other encumbrances have priority over a broker's lien. Such prior recorded liens, mortgages, and encumbrances include a valid mechanic's lien claim that is recorded subsequent to the broker's notice of lien but which relates back to a date prior to the recording date of the broker's notice of lien and prior recorded liens securing revolving credit and future advances of construction loans.

     Section 19. If a claim for lien has been filed with the register of deeds, and an escrow account is established either from the proceeds from the transaction conveyance or any other source of funds in an amount computed as one hundred twenty-five percent of the amount of the claim for lien, the lien against the real estate is extinguished and becomes a lien on the funds contained in the escrow account. The requirement to establish an escrow account, as provided for in this section, is not cause for any party to refuse to close the transaction."


Moved by:    Kelly
Second by:    Schoenbeck
Action:    Prevailed by voice vote.

The Chair deferred SB 182 until February 15, 2005.

         SB 179: revise certain provisions relating to the practice of occupational therapy.

Presented by:    Senator Tom Hansen
Proponents:    Dennis Duncan, Beverly Enterprises
        Mark Deak, SD Health Care Assn.
        Michael Demersseman, Occupational Therapists Of South Dakota

MOTION:     AMEND SB 179

179jb
     On page 2, line 11 of the printed bill, after " modalities " insert " limited to the upper extremities ".

     On page 4 , delete lines 18 to 24 , inclusive, and insert:
"
             (6)    Certification: In order to apply physical agent modalities as defined in §  36-3-1, an occupational therapist or occupational therapist assistant shall be qualified pursuant to this subdivision, as follows:

             (a)    Has successfully completed twenty-five hours of American Occupational Therapy Association or American Physical Therapy Association approved education on the physical agent modality and completed a supervised mentorship to include five case studies on each class of modality to be incorporated into patient care;

             (b)    Is certified as a hand therapist by the Hand Therapy Certification commission or other equivalent entity recognized by the board; or

             (c)    Has completed education during a basic occupational therapy educational program that included demonstration of competencies on each class of the physical agent modalities.

                 A supervising therapist or mentor may be a physical therapist, a certified hand therapist, or an occupational therapist who has completed a supervised mentorship and has five years of clinical experience utilizing each class of physical agent modalities; or an occupational therapist who has graduated from an occupational therapy program whose curriculum includes physical agent modality education. ".

     On page 5 , delete lines 1 to 7 , inclusive.

Moved by:    Broderick
Second by:    Abdallah
Action:    Prevailed by voice vote.

MOTION:     DO PASS SB 179 AS AMENDED

Moved by:    Schoenbeck
Second by:    Sutton (Dan)
Action:    Prevailed by roll call vote.(7-0-0-0)

Voting Yes:    Abdallah, Kelly, Koetzle, Schoenbeck, Sutton (Dan), Broderick, McCracken

MOTION:     PLACE SB 179 ON CONSENT CALENDAR

Moved by:    Schoenbeck

Second by:    Kelly
Action:    Prevailed by voice vote.

         SB 192: establish wine shipper licenses and to provide for certain shipments of wine.

Presented by:    Senator Tom Hansen
Proponents:    Jim Schade, self, Volga
        Eldon Nygaard, Valiant Vineyards (Handouts 1, 2, 3, 4 & 5)
Opponents:    Jack Magee, Department of Revenue and Regulation
        Jeremiah D. Murphy, self, Sioux Falls

MOTION:     DEFER SB 192 TO THE 41ST LEGISLATIVE DAY

Moved by:    Schoenbeck
Second by:    Abdallah
Action:    Prevailed by roll call vote.(7-0-0-0)

Voting Yes:    Abdallah, Kelly, Koetzle, Schoenbeck, Sutton (Dan), Broderick, McCracken

         HB 1038: revise certain provisions regarding the responsibility of alcohol licensees that sell alcohol to underage people.

Proponents:    Jack Magee, Department of Revenue and Regulation
        Shawn Lyons, SD Retailers Association

MOTION:     DO PASS HB 1038

Moved by:    Sutton (Dan)
Second by:    Schoenbeck
Action:    Prevailed by roll call vote.(5-0-2-0)

Voting Yes:    Koetzle, Schoenbeck, Sutton (Dan), Broderick, McCracken

Excused:    Abdallah, Kelly

MOTION:     PLACE HB 1038 ON CONSENT CALENDAR

Moved by:    Schoenbeck
Second by:    Sutton (Dan)
Action:    Prevailed by voice vote.

         HB 1089: to provide for licensure and regulation of massage therapists and to provide funding from licensure fees.

Presented by:    Senator Dan Sutton
        Representative Joni Cutler
Proponents:    Neil Fulton, SD Massage Therapists
        Marcia Hultman, Department of Labor

MOTION:     AMEND HB 1089

1089jb
     On page 7 of the House engrossed bill, between lines 11 and 12, insert:

"

             (2)    As part of a licensed practice pursuant to chapter 36-14 or 36-15, if the licensee is performing within the scope of the licensed practice and the licensee does not hold himself or herself out to be a massage therapist or to be engaged in the practice of massage therapy;".

     On page 7 , line 12, delete " (2) " and insert "(3)".

     On page 7 , line 13, delete " (3) " and insert "(4)".

     On page 7 , line 15, delete " (4) " and insert "(5)".

     On page 7 , line 17, delete " (5) " and insert "(6)".

Moved by:    Broderick
Second by:    Schoenbeck
Action:    Prevailed by voice vote.

MOTION:     DO PASS HB 1089 AS AMENDED

Moved by:    Koetzle
Second by:    Broderick
Action:    Prevailed by roll call vote.(7-0-0-0)

Voting Yes:    Abdallah, Kelly, Koetzle, Schoenbeck, Sutton (Dan), Broderick, McCracken

MOTION:     PLACE HB 1089 ON CONSENT CALENDAR

Moved by:    Schoenbeck

Action:    Withdrawn.

         SB 199: expand eligibility for the health insurance risk pool.

Presented by:    Senator Frank Kloucek
Proponents:    Chad Liedtke, self, Nunda (Handouts 6 & 7)
Opponents:    Jeff Bloomberg, Bureau of Personnel (Handouts 8 & 9)
        Randy Moses, Division of Insurance

MOTION:     AMEND SB 199

199ja
     On page 1, line 6 of the printed bill, after " excess of " insert "one hundred".

Moved by:    Schoenbeck
Second by:    Broderick
Action:    Prevailed by voice vote.

MOTION:     DO PASS SB 199 AS AMENDED

Moved by:    Koetzle
Second by:    Sutton (Dan)
Action:    Was not acted on.

MOTION:     SUBSTITUTE MOTION DEFER SB 199 TO THE 41ST LEGISLATIVE DAY

Moved by:    Broderick
Second by:    Abdallah
Action:    Prevailed by roll call vote.(4-2-1-0)

Voting Yes:    Abdallah, Kelly, Broderick, McCracken

Voting No:    Koetzle, Sutton (Dan)

Excused:    Schoenbeck

MOTION:     ADJOURN

Moved by:    Abdallah
Second by:    Kelly
Action:    Prevailed by voice vote.



Grace Curtis

____________________________

Committee Secretary
Royal "Mac" McCracken, Chair

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