Attorney General Long said that the agency performs three main functions: law enforcement, legal
services for the state, and consumer protection. About half of the agency's budget and FTEs are for
the day-to-day enforcement of statutes in the state. The Division of Criminal Investigation consists
of 45 law enforcement officers that have statewide jurisdiction. They coordinate and assist city police
and county sheriffs in areas where investigations cross jurisdiction boundaries.
Another primary aspect of law enforcement is through training and labs. The division supervises and
trains all law enforcement officers in the state. It sets training standards and criteria for law
enforcement officers in South Dakota. The training is funded by the Law Enforcement Officers
Training (LEOT) Fund which generates revenue by costs attached to criminal convictions.
The forensics lab in Pierre performs forensic testing for local law enforcements. The work is time
consuming, meticulous, and needs to be performed with expertise. This work is essential to high
quality law enforcement.
Attorney General Long said that the recommended FY10 budget does not contain substantial changes
from the previous budget. The department requests 1.0 FTE, which was approved by the Governor,
to work in the Consumer Protection Division. Last session, the Legislature passed legislation that
removed the cap on FTEs for the division. This FTE will be funded through funds generated in the
Consumer Protection Division.
About $3 million, in a variety of nationwide litigation settlements, was given to the state. Most of
the settlements were from drug companies that violated state and federal law standards set by the
Food and Drug Administration (FDA). A vast bulk of the settlement funds were transferred to the
Office of the Governor for the purpose of which the state receive the money _ to repay the people
that the drug companies were benefiting from. Attorney General Long hopes to pay for the new FTE
from these funds.
In response to Representative Quinten Burg's question, Attorney General Long said that the new
FTE should be funded through this means for the next five to six years.
In response to committee questions, Attorney General Long said that the funds have various
restrictions on how the money may be spent. Each settlement language is different, but usually
allows for the reimbursement for legal fees and running the department. He will provide to the
committee language from one of the settlements.
Representative Deb Peters asked about the dramatic decline in funds on the condition statement. In
response, Ms. McLain said that the money from the settlement was given to the Department of Social
Services (DSS). The funding for the Consumer Protection Division FTE has been projected for each
year.
Attorney General Long informed the members that the department has never previously transferred
money to DSS. Typically the amount that the fund generates is not significant enough to have
disposable income. In previous years with large settlements, money has been earmarked for the
consumers that lost it. The drug company money was transferred to an agency that will spend the
money to benefit the people that will buy and have trouble purchasing medication because that is the
reason for the settlement.
Attorney General Long said that the overall settlement share will be $1.4 million, which will be split
between the federal and state government. South Dakota will receive $475, 000 which will be a
direct reimbursement to South Dakota for the money that Elli Lilly illegally took. The settlement
money will go directly into the general fund.
The only other significant change is a transfer from federal funds to general funds. About 4-5 years
ago, the federal BYRNE Grant was severely cut and that amount the state receives fluctuates. The
Governor has recommended that general funds replace the decrease in federal funds.
Representative J.E. “Jim” Putnam asked if there are any suggestions that the BYRNE Grant may
increase in funding. Mr. Gortmaker stated that there are some conversations about the new
administration in Washington being interested in funding the BYRNE Grants, but it is too early to
know.
Representative Lance Carson commented that a couple years ago, the Office of the Attorney General
asked for additional money to get the lab technicians certified. Eventually there would be a savings
to the state because tests would not have to be shipped out-of-state. He asked if the state is seeing
a return on the investment. In response, Attorney General Long said that the department received a
federal grant two years ago to hire two lab technicians to perform DNA testing. The federal money
became unavailable because positions no longer qualify for this grant and the FY10 funding request
is to fund the salaries for those two FTEs. The Governor approved the request, but with the funding
coming from the Law Enforcement Training Fund. Prior to the addition of the two FTEs, there was
about a 130 day backlog on all testing; today it is about 30-45 days which can be maintained with
the additional help.
In response to Senator Hunhoff's question about overtime, Attorney General Long responded that
the Fair Labor Standards Act required overtime to be paid starting at 80 hours for all people but law
enforcement; which was 86 hours. A transition to 80 hours for overtime has occurred over the years,
and the Division of Criminal Investigation was the only division not at 80 hours. The request is to
have all the divisions be the same for overtime.
Representative Susan Wismer asked about the $100,000 transfer from the LEOT Fund to the general fund. In response, Attorney General Long said that the decision was made by the Bureau of Finance and Management. The Law Enforcement Training Fund has been in existence for many years and is funded with fees. The fund generates more revenue than expended, and therefore there were additional funds. Given the circumstance, the Governor asked to make an expenditure from the LEOT fund to reduce strain on the general fund. The fund was negative several hundred dollars. The $10 fee increase is helping the fund recover, but it is not as solvent as he would like.
For FY10, the agency requests budget of $3,401,211 and 9.0 FTEs, which is the same as approved
in FY09. Treasurer Larson noted that the agency is comprised of 85% other funds and 15% general
funds. The other funds are unclaimed property from holders throughout the United States.
Division of Treasury Management
The division is comprised of 100% general funds with a FY10 recommended budget of $506,859.
Treasurer Larson informed the committee that performance indicators are delineated. The ACH
volume reflected only the Office of the State Treasurer with the ACH dollar amount reflecting the
entire state. The agency corrected the mistake. The actual FY07 for ACH volume was for the State
Treasurer alone, and the actual FY08 is for the entire state.
Within days of the agency's 2008 budget hearing, remote deposit was implemented. The department
scans and deposits over 2,000 checks per day. In August, Department of Social Services child
support checks will also be made available through remote deposit. There will be an additional 900
checks that are automatically deposited totaling about $1 million per day. This provides more
immediate availability of funds, no transaction cost, minimal bank charges, and no weather delay.
The University of South Dakota and South Dakota State University will be added in January.
Representative Quinten Burg asked about a fee for providing the service. In response, Treasurer
Larson said that the agency or university will need to purchase a scanner so the checks can be
deposited in the state's main account. No other fee is charged.
Another new function is the implementation of electronic payments. Payments can be made via ACH
or credit cards. The agency is working with the Department of Revenue and Regulation and US Bank
to allow for the payment of licensing fees via the e-pay system. This will be a savings to the person
and state because it will provide faster access to the money. The program will be ready to implement
in mid February.
Division of Unclaimed Property
For FY10, the division requests $2,849,352 in other funds and 3.5 FTEs. This is a continually
appropriated information budget because the amount of funds that will be deposited or be paid to the
person is not certain.
Treasurer Larson told the committee that the agency collected $9,823,973 in revenues for FY07 and
$11,008,563 in FY08. It is anticipated that revenues will decrease $1 - $2 million. Revenues are
collected until the end of the fiscal year. In response to Senator Corey Brown's question, Treasurer
Larson said that the major payments are due by November 1, and smaller payments are still received
through the remainder of the year.
Treasurer Larson stated that reason for the $2 million decline in revenues is that the agency was
seeing one-time payments from Wells Fargo, and now there will primarily be on-going payments.
Wells Fargo took ownership of Wakovia and by adding that bank to the Wells Fargo system may
increase the on-time money to unclaimed property. However, it could be 3-5 years before the state
will receive any money due to regulations.