PIERRE, S.D. — The Senate Commerce and Energy Committee on Jan. 12 voted 8-1 in favor of moving $200 million in housing infrastructure dollars to floor discussion and a potential Senate vote as soon as Friday, Jan. 13.
“We’re hoping we can have this done by the end of January and have it on the governor’s desk,” Rep. Roger Chase, the prime sponsor of the legislation in the House, told Forum News Service on Jan. 12.
The bill as written allots $100 million in loans and $100 million in grants — half of those grants coming from federal dollars — toward public infrastructure such as streetlights, sewers, roads and related construction that supports increasing housing stock.
The legislation includes a rule that loans and grants can’t make up more than one-third of the total infrastructure project cost and targets 70% of total funds toward municipalities under 50,000 people.
“We are here to address an emergency. We have a drastic workforce shortage,” Sen. Casey Crabtree, the prime sponsor on the Senate side, said during his testimony to the committee. “And due to rising interest rates, we have seen new construction of multi-family and single-family homes slow drastically."
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For Crabtree, another benefit of the bill is the use of low-interest loans for half of the $200 million investment, creating a revolving loan fund which he says will benefit the state long after the top-line dollar amount is expended.
The support for the bill was overwhelming. By the end of proponent testimony, lobbyists representing some of the largest organizations in South Dakota formed a revolving door in the chair facing the committee members.
Dave Owen, representing the state Chamber of Commerce, simply said, “us, too.”
Attached to the bill is an emergency clause, meaning the money will be released to the South Dakota Housing Development Authority as soon as Gov. Kristi Noem signs the bill into law, rather than on July 1 as is the case with normal laws.
While that means that both chambers must pass the legislation with a two-thirds majority, proponents said the emergency clause is required to get the infrastructure dollars moving in order to meet seasonal demand beginning in the spring.
“We already lost one construction season, and we don’t want to lose another one,” Chase said.
No opponents were present. However, the relative ease of discharging the legislation onto the Senate floor is not entirely reflective of the nearly three-year-long odyssey that led up to Jan. 12’s drama-free hearing.
The use of state dollars to buttress the expansion of housing-related infrastructure was a major topic in the 2021 workforce housing summer study, leading to the introduction of House Bill 1033 last year.
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When Noem signed a similar law last session, she attached a letter laying out several concerns with the language of the bill and the potential clashes with already-existing state laws that require specific targeting of funds by the legislature.
“That uncertainty creates risks for the SDHDA and those seeking grants and loans to consider, and that risk may result in red tape and delays,” Noem wrote in the letter, a prediction that ultimately proved correct as the state housing authority opted to hold onto the much-needed funds as it waited for clarification from the legislature.
The concerns with the bill appear to have been fixed, as a representative from the governor’s office rose during proponent testimony in favor of the legislation.
“Needing the clarification was a valid reason for us to come back this session and fix everything,” Chase said. “We made sure we dotted our I’s and crossed our T’s on this one, and we’re moving forward and getting that money in the right place.”
Following the likely passage in the Senate as soon as Jan. 13, the bill will move over to the House side for a committee hearing next week.
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or jharward@forumcomm.com.
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