Chamber Advocate: Jan. 20, 2023

SB 41 to establish a program for housing infrastructure loans and grants, make an appropriation therefor, and to declare an emergency.

SB 41 is the bill to redo the $200 million set for workforce housing during last year’s session. The funds were placed in the “Housing Opportunity Fund” (HOF) which is run by the South Dakota Housing Development Authority. The Governor withheld the funds believing the statutes that control the Housing Opportunity Fund did not allow the income levels that are needed for the workforce housing money because the Authority and the (HOF) were created to deal with low-income housing.

SB 41 will create a new fund also to be administered by the Housing Development Authority that will not have income restrictions and will provide $50 million in grants and $150 million in loans. Both the money for grants and the money for the loans are to be distributed with 30% of each fund going to communities with populations exceeding 50,000 (Sioux Falls/Rapid City) and the rest of the funds reserved for all other communities. The money must be used for infrastructure to help facilitate housing projects by helping to build water/sewer lines, pave streets and install lighting.

SB 41 had its first hearing Thursday, January 12^th before Senate Commerce Committee. The bill passed out of Senate Commerce on a vote of 8-Yea to 1-Nay. The Senate passed the bill with a vote of 29-Yea to 2-Nay. This week the House State Affairs committee moved the bill to the House of Representatives with a 12-Yea to 1-Nay vote. The House deferred the vote on the bill to Friday, January 20, 2023. The Chamber anticipates the bill will pass on Friday with a close vote.

The Chamber supports the bill.

HB 1011 – The Commerce Committee sponsored bill from the Department of Labor and Regulation. This bill creates a new rate schedule for employer contributions to the Unemployment Insurance Trust Fund. This new rate schedule has lower rates than the two current rate structures.

Unemployment Insurance (now known as Reemployment Assistance) contribution rates are determined by the past experiences of each business regarding whether or not they have employees that left the business for reasons other being fired (otherwise known as leaving through ‘no fault of their own’) and have filed claims.

The contribution rate is a percentage of each employee’s wages up to the “Wage Base” which is currently set at $15,000. The percentages start at 0.05% ($7.50/employee) and have a maximum rate of 9.3% ($1,395/Employee). The new schedule will decrease the maximum rate to 8.80% ($1,320). South Dakota is one of the very few states that allow a business to earn a rate of “zero” which means exactly what it says. Businesses with sufficient reserves in their RA accounts earn a rate of zero and do not need to pay any additional funds into the system. With this new rate schedule, more businesses will earn a rate of zero.

This bill also addresses changes in the UI surcharge system by having future surcharges kick in at a higher level of UI the Trust Fund Balance but with a lower rate and allowing the surcharge payments to be credited to an employer’s account. Currently, the surcharges kick in when the trust fund level falls to $11 million and are not allowed to be credited to an individual employer’s account.

The end-of-year for projected balance for the calendar year 2022 in the Reemployment Assistance Trust Fund is $195.8 million. The largest payout for benefits from the RA Trust Fund was during the Pandemic and that totaled $98.5 million (2020). The fund was replenished when Governor Noem decided to move $88.6 million dollars of Federal CARES Act Funds into the RA trust fund in order to make sure it remained solvent. (Bill analysis provided by the SD Chamber of Commerce.)

The bill has passed the House of Representatives and will be scheduled for a hearing in the Senate.

The Chamber supports this bill.

HB 1055 An Act to increase the dollar amount of South Dakota opportunity scholarships. The bill raises the opportunity scholarship from $6,500 over four years to $7,500. This is the scholarship given to high-performing students who stay in South Dakota for college/technical schools. The scholarship hasn’t been increased in eight years, and this increase of 15% is on track with the Board of Regent increases in tuition and fees during that time.

The scholarship is paid out annually to eligible South Dakota students: $1,300 for the first three years and $2,600 for the fourth year.

Fun fact: SD Opportunity Scholarship recipients TOP 10 Major/Graduates:

• Nursing
• Biology
• Mechanical Engineering
• Psychology
• Pharmaceutical Sciences
• Elementary Education
• Computer Science
• Mathematics
• Civil Engineering
• Economics

The Chamber supports this bill.