CHAPTER 1-16G
ECONOMIC DEVELOPMENT
1-16G-1 Board of Economic Development created--Appointment--Terms.
1-16G-1.1 Authority of Board of Economic Development.
1-16G-1.2 Foreclosure as means of protecting loan--Sale, transfer, or conveyance of property.
1-16G-1.3 Nonvoting members of Board of Economic Development.
1-16G-2 1-16G-2. Repealed by SL 2011, ch 7, § 1.
1-16G-3 Revolving economic development and initiative fund--Purpose.
1-16G-4 1-16G-4. Repealed by SL 2015, ch 63, § 3.
1-16G-5 Receipt of repayment of loans and interest--Rules--Loans for credit enhancement--Reversion of excess.
1-16G-6 No appeal by applicant from board's action.
1-16G-7 Acceptance and expenditure of other funds by Board of Economic Development.
1-16G-8 Promulgation of rules.
1-16G-8.1 1-16G-8.1 to 1-16G-9. Repealed by SL 2007, ch 5, §§ 4 to 7.
1-16G-10 Annual report by Board of Economic Development.
1-16G-11 Documentary material consisting of trade secrets exempt from disclosure--Discussion of or action on trade secrets at meeting closed to public.
1-16G-12 1-16G-12 to 1-16G-16. Repealed by SL 2004, ch 12, §§ 1 to 5.
1-16G-16.1 Procurement of certain services for revolving economic development and initiative fund.
1-16G-17 1-16G-17, 1-16G-18. Repealed by SL 2004, ch 12, §§ 6, 7.
1-16G-19 1-16G-19. Repealed by SL 2009, ch 1, § 19.
1-16G-20 1-16G-20. Repealed by SL 2006, ch 2, § 9.
1-16G-21 1-16G-21. Repealed by SL 2006, ch 2, § 10.
1-16G-22 1-16G-22. Repealed by SL 2006, ch 2, § 11.
1-16G-23 1-16G-23. Repealed by SL 2006, ch 2, § 12.
1-16G-24 Use of earnings for administrative costs of Division of Finance of Governor's Office of Economic Development.
1-16G-25 1-16G-25 to 1-16G-28. Repealed by SL 2013, ch 192, §§ 3, 5, 6, 8.
1-16G-29 1-16G-29 to 1-16G-39. Repealed by SL 2007, ch 5, §§ 10 to 20.
1-16G-40 1-16G-40 to 1-16G-46. Rejected by referendum.
1-16G-47 1-16G-47. Repealed by SL 2018, ch 10, § 1.
1-16G-47.1 Disbursements from local infrastructure improvement grant fund and economic development partnership fund.
1-16G-48 1-16G-48. Repealed by SL 2018, ch 10, § 2.
1-16G-49 Annual report to Government Operations and Audit Committee.
1-16G-50 Local infrastructure improvement grant fund.
1-16G-51 Economic development partnership fund created.
1-16G-52 Awards from economic development partnership fund.
1-16G-53 Matching basis of awards from economic development partnership fund.
1-16G-54 Promulgation of rules regarding local infrastructure improvement grant fund.
1-16G-55 Promulgation of rules regarding economic development partnership fund.
1-16G-56 Definitions relating to reinvestment payment program.
1-16G-57 Reinvestment payment procedure.
1-16G-58 Application for reinvestment payment.
1-16G-59 Factors for board review of application.
1-16G-60 Permit to submit an affidavit for reinvestment payment.
1-16G-61 Affidavit for reinvestment payment--Form and contents.
1-16G-62 Time for filing affidavit for reinvestment payment--Eligible project costs--Extension.
1-16G-63 Time and manner of reinvestment payment.
1-16G-64 Reinvestment payment fund created.
1-16G-65 Effect of tax collection agreement with Indian tribe.
1-16G-66 Public records-Information on the GOED website.
1-16G-67 Promulgation of rules on reinvestment payments.
1-16G-68 Prohibited commissions.
1-16G-69 1-16G-69 to 1-16G-72. Executed.
1-16G-73 Definitions relating to new frontiers program.
1-16G-74 Requirements for new frontiers program applicants.
1-16G-75 Time for filing application--Contents.
1-16G-76 Board review of application--Factors for consideration.
1-16G-77 Permit from GOED--Assignment and transfer of permit and payment--Amended application.
1-16G-78 Affidavit for new frontiers payment--Contents.
1-16G-79 Time for filing affidavit for payment--Final program cost determination--Extension.
1-16G-80 Time for new frontiers payment--Additional information.
1-16G-81 Repayment upon relocation outside of state--Repayment waiver.
1-16G-82 Limitations on reinvestment payments.
1-16G-83 Public information.
1-16G-84 Promulgation of rules regarding new frontiers program.
1-16G-85 [Effective until July 1, 2025] Definitions.
1-16G-86 [Effective until July 1, 2025] Disaster relief subfund--Creation--Continuous appropriation.
1-16G-87 [Effective until July 1, 2025] Disaster relief subfund--Loans.
1-16G-88 [Effective until July 1, 2025] Disaster relief subfund--Reporting.
1-16G-89 [Effective until July 1, 2025] Disaster relief subfund loans--Confidentiality.
1-16G-1. Board of Economic Development created--Appointment--Terms.
There is created a Board of Economic Development and the Governor may appoint up to thirteen members to consult with and advise the Governor and the commissioner of the Governor's Office of Economic Development in carrying out the functions of the office. The members shall be confirmed by the senate. The members of the board shall be appointed by the Governor for four-year terms of office so arranged that no more than four members' terms expire in any given year. Not all members may be from the same political party. The Governor shall designate the terms at the time of appointment. Any member appointed to fill a vacancy arising from other than the natural expiration of a term shall serve only the unexpired portion of the term.
Source: SL 1987, ch 390 (Ex. Ord. 87-1), § 37; SL 1988, ch 439 (Ex. Ord. 88-1), § 20; SDCL § 1-42-15.1; SL 2005, ch 10, § 2; SL 2011, ch 1 (Ex. Ord. 11-1), § 85, eff. Apr. 12, 2011; SL 2013, ch 7, § 22, eff. Mar. 20, 2013.
1-16G-1.1. Authority of Board of Economic Development.
The Board of Economic Development, in order to implement this chapter, may:
(1) Make contracts and execute all instruments;
(2) Establish interest rates within the bounds as otherwise statutorily provided;
(3) Collect fees and charges, as are determined to be necessary, reasonable, and proper in connection with its loans, advances, leases, grants, servicing, and other activities;
(4) Provide for the repayment and redeposit of loan and lease payments;
(5) Sue and be sued;
(6) Foreclose any mortgages, deed of trust, notes, debentures, bonds, and other security interest held by it, either by action or by exercise of a power of sale, and sell the equity redemption in the security interests in accordance with the terms of instruments and applicable state law, and take any other actions necessary to enforce any obligations held by it;
(7) Perform any act and execute any instrument which is necessary or convenient to the exercise of the powers granted by this chapter or reasonably implied from it;
(8) Enter into agreement with any agency of the United States government to make and service loans and loan guarantees; and
(9) Sell loans or loan guarantees at public or private sale.
Source: SL 1997, ch 7, § 1; SL 1999, ch 4, § 1.
1-16G-1.2. Foreclosure as means of protecting loan--Sale, transfer, or conveyance of property.
The Board of Economic Development may take title by foreclosure to any property given as security if the acquisition is necessary to protect any loan made under this chapter, and may sell, transfer, or convey any such property to any responsible buyer. Any sale of property hereunder shall be performed in a commercially reasonable manner. If the sale, transfer, or conveyance cannot be effected with reasonable promptness, the board may, in order to prevent financial loss and sustain employment, lease the property to a responsible tenant or tenants.
All sale proceeds or lease payments received by the board pursuant to this section shall be deposited in the fund from which the original loan was made.
Source: SL 1997, ch 7, § 2.
1-16G-1.3. Nonvoting members of Board of Economic Development.
In addition to the members of the Board of Economic Development appointed pursuant to § 1-16G-1, four nonvoting members shall be appointed to the board by the Legislature as follows:
(1) The majority leader of the Senate shall appoint one member of the Senate;
(2) The minority leader of the Senate shall appoint one member of the Senate;
(3) The majority leader of the House of Representatives shall appoint one member of the House of Representatives; and
(4) The minority leader of the House of Representatives shall appoint one member of the House of Representatives.
The members shall be appointed to the board for a term of two years before the close of each regular session of the Legislature. If there is a vacancy, the vacancy shall be filled in the same manner as the original appointment.
Source: SL 2013, ch 7, § 23, eff. Mar. 20, 2013.
1-16G-3. Revolving economic development and initiative fund--Purpose.
There is established in the state treasury a special revenue fund to be known as the revolving economic development and initiative fund for the purpose of making grants and loans for economic development.
Source: SL 1987, ch 98, § 1; SL 1988, ch 17, § 6; SDCL § 1-42-24; SL 2007, ch 5, § 1.
1-16G-5. Receipt of repayment of loans and interest--Rules--Loans for credit enhancement--Reversion of excess.
Any repayment of loans made and any interest thereon shall be receipted into the revolving economic development and initiative fund and all money in the fund is hereby appropriated for the purposes of making grants and loans as provided in §§ 1-16G-3 to 1-16G-11, inclusive. The Board of Economic Development may promulgate rules pursuant to chapter 1-26, to make grants and loans from the revolving economic development and initiative fund, and may establish criteria for the qualification, application, payment, and repayment of funds for such projects.
The board may also make loans from the revolving economic development and initiative fund to the South Dakota Economic Development Finance Authority for the purposes of assisting in the credit enhancement requirements of bond issues, notes, loan guarantees and bond insurance. Any excess in the capital reserve fund of the economic development finance authority on June thirtieth of each year shall revert to the revolving economic development and initiative fund for the purposes of principal and interest reduction.
Source: SL 1987, ch 98, § 15; SL 1988, ch 16; SDCL § 1-42-26; SL 2004, ch 11, § 1; SL 2007, ch 5, § 2.
1-16G-6. No appeal by applicant from board's action.
In no event may an applicant appeal from the board's action pursuant to chapter 1-26.
Source: SL 1988, ch 17, § 2; SDCL 1-42-28.1.
1-16G-7. Acceptance and expenditure of other funds by Board of Economic Development.
The Board of Economic Development may accept and expend for the purpose of §§ 1-16G-3 to 1-16G-11, inclusive, in addition to the amounts deposited in the revolving economic development and initiative fund, any funds obtained from federal sources, gifts, contributions, or any other source if such acceptance and expenditure is approved in accordance with § 4-8B-10.
Source: SL 1987, ch 98, § 16; SDCL 1-42-30.
1-16G-8. Promulgation of rules.
The Board of Economic Development shall promulgate rules pursuant to chapter 1-26 concerning the following:
(1) The existing barriers to economic growth and development in the state;
(2) Developing investment in research and development in high technology industries;
(3) The submission of business plans prior to the approval of economic development grants or loans. Business plans shall include the products or services to be offered by the applicant, job descriptions with attendant salary or wage information by job category, educational requirements by job category, methods of accounting, financing other than that provided by the economic development loan, and marketing, sales, merchandising, and other disciplines proposed to be used for business growth and expansion;
(4) The cooperation between agencies of state government and applicant businesses for nonfinancial services including loan packaging, marketing assistance, research assistance, and assistance with finding solutions for complying with environmental, energy, health, safety, and other federal, state, and local laws and regulations;
(5) Regular performance monitoring and reporting systems for participating businesses to assure compliance with their business plans and terms of repayment;
(6) Establish eligibility criteria for grants and loans;
(7) Establish application procedures for grants and loans;
(8) Establish criteria to determine which applicants will receive grants or loans;
(9) Govern the use of proceeds of grants and loans;
(10) Establish criteria for the terms and conditions upon which loans shall be made, including matching requirements, interest rates, repayment terms, and the terms of security given to secure such loans; and
(11) Establish criteria for the terms and conditions upon which grants shall be made, including permitted uses, performance criteria, and matching requirements.
Source: SL 1987, ch 98, § 15; SL 1988, ch 16; SDCL § 1-42-26; SL 2007, ch 5, § 3; SL 2009, ch 1, § 17.
1-16G-10. Annual report by Board of Economic Development.
The Board of Economic Development shall prepare an annual report by the first day of November of each year detailing the activities of the board and the terms and conditions of any grants and loans made, including the current status of outstanding loans.
Source: SL 1987, ch 98, § 15A; SDCL § 1-42-27; SL 1993, ch 11, § 2; SL 2007, ch 5, § 8.
1-16G-11. Documentary material consisting of trade secrets exempt from disclosure--Discussion of or action on trade secrets at meeting closed to public.
Any documentary material or data made or received by the Board of Economic Development or Governor's Office of Economic Development for the purpose of furnishing assistance to a business, to the extent that such material or data consists of trade secrets or commercial or financial information regarding the operation of such business, may not be considered public records, and is exempt from disclosure pursuant to the provisions of §§ 1-16G-3 to 1-16G-11, inclusive. Any discussion, consideration of, or action upon such trade secrets or commercial or financial information by the Board of Economic Development may be done in executive session closed to the public, notwithstanding the provisions of the open meeting laws of this state.
Source: SL 1987, ch 98, § 15B; SL 1988, ch 17, § 1; SDCL 1-42-28.
1-16G-16.1. Procurement of certain services for revolving economic development and initiative fund.
The Board of Economic Development may use the revolving economic development and initiative fund for the purpose of paying taxes and liens and for the procuring of legal services and other services necessary to protect, recover, maintain, and liquidate the assets of the revolving economic development and initiative fund. Such costs may be incurred and paid up to ten percent of the loan balance with a majority vote of the board of economic development. Costs in excess of ten percent shall be approved by a two-thirds vote of the board. Such services are not subject to state bid laws so long as such services are procured in a commercially acceptable manner.
Source: SL 1993, ch 14, § 1; SL 2009, ch 1, § 18.
1-16G-24. Use of earnings for administrative costs of Division of Finance of Governor's Office of Economic Development.
Earnings on the revolving economic development and initiative fund may be used for the administrative costs of the Division of Finance of the Governor's Office of Economic Development. Such earnings shall be expended in accordance with the provisions of Title 4 on warrants drawn by the state auditor on vouchers approved by the commissioner of the Governor's Office of Economic Development. Eligible expenses may not exceed total interest earnings during the previous fiscal year prior to the deduction of loan losses for the same fiscal year.
Source: SL 1994, ch 14; SL 1999, ch 5, § 6; SL 2003, ch 15, § 6; SL 2004, ch 13, § 7; SL 2005, ch 10, § 3; SL 2007, ch 5, § 9; SL 2011, ch 1 (Ex. Ord. 11-1), § 86, eff. Apr. 12, 2011; SL 2013, ch 192, § 1.
1-16G-40 to 1-16G-46. Rejected by referendum.
1-16G-47.1. Disbursements from local infrastructure improvement grant fund and economic development partnership fund.
The commissioner of the Governor's Office of Economic Development shall authorize money from the programs provided under §§ 1-16G-50 and 1-16G-51 for the following purposes:
(1) An amount to pay for any contracts entered into by the Governor's Office of Economic Development with an implementing partner to provide technical assistance to an applicant or monitoring service for the local infrastructure improvement grant program; and
(2) An amount to pay the administrative expenses incurred by the Governor's Office of Economic Development for the local infrastructure improvement grant program. The administrative expenses are limited to the salary and benefits of any personnel directly responsible for the administration of the programs.
Source: SL 2016, ch 4, § 4; SL 2018, ch 10, § 7.
1-16G-49. Annual report to Government Operations and Audit Committee.
Each department administering the funds created by §§ 1-16G-50, 1-16G-51, 11-13-2, and 13-13-88 shall report annually to the Government Operations and Audit Committee about the operations and results of the building South Dakota programs. The Governor's Office of Economic Development shall report annually to the Government Operations and Audit Committee about the operations and results of the South Dakota Jobs grant program.
Source: SL 2013, ch 7, § 3, eff. Mar. 20, 2013; SL 2018, ch 10, § 3; SL 2021, ch 6, § 1.
1-16G-50. Local infrastructure improvement grant fund.
There is hereby created in the state treasury the local infrastructure improvement grant fund. The Board of Economic Development may award grants to any political subdivision of this state, tribal government, or local development corporation from the fund to construct or reconstruct infrastructure for the purpose of serving an economic development project. The board shall consult state agencies to evaluate the feasibility and merits of the proposed infrastructure improvements. The board shall consider the funding mechanisms available to and utilized by the applicant when making a decision to award a grant. Any general funds appropriated to the local infrastructure improvement program shall be transferred into the local infrastructure improvement grant fund. Interest earned on money in the fund shall be deposited into the fund.
Source: SL 2013, ch 7, § 4, eff. Mar. 20, 2013; SL 2014, ch 7, § 1; SL 2018, ch 10, § 10.
1-16G-51. Economic development partnership fund created.
There is hereby created in the state treasury the economic development partnership fund. The Board of Economic Development may award grants to any nonprofit development corporation, tribal government, municipality, county, or other political subdivision of this state from the fund on a matching basis as provided in §§ 1-16G-52 and 1-16G-53. Interest earned on money in the fund shall be deposited into the fund.
Source: SL 2013, ch 7, § 5, eff. Mar. 20, 2013; SL 2014, ch 7, § 2; SL 2018, ch 10, § 11.
1-16G-52. Awards from economic development partnership fund.
The Board of Economic Development may award funds from the economic development partnership fund for the following purposes:
(1) To support new staff, or elevate existing part-time staff and equipment and training needs for the purpose of developing or expanding local, community, and economic development programs;
(2) To support any recipient's plans to work with other entities for the purpose of developing or expanding local, community, and economic development programs; or
(3) To award funds from the economic development partnership fund to commence or replenish a local revolving loan fund for the purpose of developing or expanding housing, community, and economic development programs. Areas of emphasis for funding include creating high quality employment opportunities, repopulation, stronger economies, housing development, business growth, support of entrepreneurship, and job creation, expansion, and retention. When awarding funds for a revolving loan fund, the board may give priority to an application that serves multiple communities. The board may give additional priority to an application that leverages state funds at greater than a one-to-one matching basis.
Source: SL 2013, ch 7, § 6, eff. Mar. 20, 2013; SL 2016, ch 4, § 5.
1-16G-53. Matching basis of awards from economic development partnership fund.
Any funds awarded under the economic development partnership fund shall be provided on a matching basis. The funds awarded to a recipient for staffing may be distributed over a four year period with forty percent being distributed in the first year, thirty percent in the second year, twenty percent in the third year, and ten percent in the fourth year. Over the four year period, the recipient shall match the total funds received from the economic development partnership fund.
Source: SL 2013, ch 7, § 7, eff. Mar. 20, 2013.
1-16G-54. Promulgation of rules regarding local infrastructure improvement grant fund.
The Board of Economic Development shall promulgate rules pursuant to chapter 1-26 regarding the application process and timelines, the guidelines and criteria for approval of applications, and the distribution of funds from the local infrastructure improvement grant fund.
Source: SL 2013, ch 7, § 8, eff. Mar. 20, 2013.
1-16G-55. Promulgation of rules regarding economic development partnership fund.
The Board of Economic Development shall promulgate rules pursuant to chapter 1-26 regarding the application process and timelines, the guidelines and criteria for approval of applications, and the distribution of funds from the economic development partnership fund.
Source: SL 2013, ch 7, § 9, eff. Mar. 20, 2013.
1-16G-56. Definitions relating to reinvestment payment program.
Terms used in §§ 1-16G-56 to 1-16G-68, inclusive, mean:
(1) "Board," the Board of Economic Development;
(2) "Commissioner," the commissioner of the Governor's Office of Economic Development;
(3) "Completed the project" or "completion of the project," the first date when the project is operational;
(4) "Construction date," the first date earth is excavated or a contractor has initiated work for the purpose of constructing a new or expanded facility or the first date new equipment is located on the project site or existing equipment is removed from the project site for the purpose of equipment upgrades, whichever occurs first;
(5) "Data center," any facility established for the purpose of processing, storage, retrieval, or communication of data;
(6) "Department," the Department of Revenue;
(7) "Equipment upgrades," the installation of new equipment or the replacement or improvement of existing equipment, which is subject to the sales or use tax imposed by chapters 10-45 or 10-46 or contractor's excise tax imposed by chapters 10-46A or 10-46B;
(8) "GOED," the Governor's Office of Economic Development;
(9) "New or expanded facility," a new building or structure, or the expansion, renovation, or retrofitting of an existing building or structure, which is subject to the contractor's excise tax imposed by chapters 10-46A or 10-46B;
(10) "Person," any individual, firm, copartnership, joint venture, association, cooperative, nonprofit development corporation, limited liability company, limited liability partnership, corporation, estate, trust, business trust, receiver, or any group or combination acting as a unit;
(11) "Project," a new or expanded facility with a project cost which exceed twenty million dollars, or equipment upgrades with a project cost which exceed two million dollars. A project includes laboratory and testing facilities, manufacturing facilities, advanced telecommunications capability, data centers, power generation facilities, power transmission facilities, agricultural processing facilities, wind energy facilities, and facilities defined by GOED as targeted industries. A project does not include any building or structure:
(a) Used predominantly for the sale of products at retail, other than the sale of electricity at retail, or the provision of advanced telecommunications capability, to individual consumers;
(b) Used predominantly for residential housing or transient lodging;
(c) Used predominantly to provide health care services;
(d) Used predominantly for the transportation or transmission of natural gas, oil, or crude oil by means of a pipeline; or
(e) That is not subject to ad valorem real property taxation or equivalent taxes measured by gross receipts;
(12) "Project cost," the amount paid by the project owner in money, credits, property, or other consideration associated with a project including, without limitation, land, labor, materials, furniture, equipment, fees, or fixtures;
(13) "Wind energy facility," any new facility or facility expansion that:
(a) Consists of a commonly managed integrated system of towers, wind turbine generators with blades, power collection systems, and electric interconnection systems, that convert wind movement into electricity, and is subject to the tax imposed by §§ 10-35-18 and 10-35-19; and
(b) The construction of which is subject to contractors' excise tax pursuant to chapter 10-46A or 10-46B;
(14) "Advanced telecommunications capability," without regard to any transmission media or technology, is high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology that provides a minimum actual download speed of at least twenty-five megabits per second and actual upload speed of at least three megabits per second.
Source: SL 2013, ch 7, § 24, eff. Mar. 20, 2013; SL 2017, ch 5, § 1.
1-16G-57. Reinvestment payment procedure.
If the projects costs for a new or expanded facility exceeds twenty million dollars or the projects costs for equipment upgrades exceeds two million dollars, a person may apply for a reinvestment payment pursuant to §§ 1-16G-56 to 1-16G-68, inclusive. The person shall:
(1) Timely file an application as required by § 1-16G-58;
(2) Receive a permit from GOED pursuant to § 1-16G-60;
(3) Timely file the affidavit of reinvestment payment as required by § 1-16G-61; and
(4) Comply with the provisions of §§ 1-16G-56 to 1-16G-68, inclusive, to qualify for the reinvestment payment.
A project with a construction date on or after April 1, 2013, may receive a reinvestment payment as provided by §§ 1-16G-56 to 1-16G-68, inclusive.
Source: SL 2013, ch 7, § 25, eff. Mar. 20, 2013.
1-16G-58. Application for reinvestment payment.
Before any person receives any reinvestment payment as provided in §§ 1-16G-56 to 1-16G-68, inclusive, the person shall file an application with GOED. The application may be filed no later than ninety days after the construction date. No person may receive any reinvestment payment as provided by §§ 1-16G-56 to 1-16G-68, inclusive, if the application is not timely filed with GOED.
The application shall include the following information:
(1) The project owner's name and contact information;
(2) The general description of the project;
(3) The construction date of the project;
(4) The projected date for completion of the project;
(5) The estimated project costs;
(6) The location of the project;
(7) The legal description of the project location;
(8) A list of the anticipated contractors and subcontractors that will perform work on the project; and
(9) Any other information that GOED may require.
The application shall be on a form prescribed by the commissioner. The application shall be signed by the project owner under penalty of perjury, and signed under oath before a notary public. No application may include more than one project.
Source: SL 2013, ch 7, § 26, eff. Mar. 20, 2013.
1-16G-59. Factors for board review of application.
The Board of Economic Development shall review an application and make a determination of whether the project is approved or disapproved. The board shall consider the likelihood that the project would have occurred without the reinvestment payment. The board may approve a reinvestment payment that is equal to or less than South Dakota sales and use tax paid on the project costs.
The board shall consider the following factors when making that determination:
(1) Has the county or municipality adopted a formula to reduce property taxation for the project for five years under the discretionary formula pursuant to § 10-6-137;
(2) Has the county or municipality approved a tax increment financing district pursuant to chapter 11-9 for the area where the project will be located;
(3) Has the municipality approved a municipal sales tax refund pursuant § 10-52-10;
(4) Economic activity that may occur in the community, area, and state; and
(5) Criteria established by rules promulgated pursuant to § 1-16G-67.
Source: SL 2013, ch 7, § 27, eff. Mar. 20, 2013; SL 2018, ch 70, § 46; SL 2021, ch 44, § 44.
1-16G-60. Permit to submit an affidavit for reinvestment payment.
Upon approval of the application by the Board of Economic Development, GOED shall issue a permit entitling the person to submit an affidavit for reinvestment payment as provided by § 1-16G-61. The permit and reinvestment payment is assignable and transferable and may be used as collateral or security pursuant to chapter 57A-9. If the initial permit holder entity reorganizes into a new entity, the new entity shall file with GOED an amended application within sixty days of the reorganization. If either the permit or reinvestment payment, or both, is assigned or transferred to another entity, such entity shall file with GOED an amended application within sixty days.
Source: SL 2013, ch 7, § 28, eff. Mar. 20, 2013.
1-16G-61. Affidavit for reinvestment payment--Form and contents.
Any person that has timely filed the application and is holding a permit issued by GOED, and has completed the project, shall file an affidavit for reinvestment payment with GOED.
The affidavit for reinvestment payment shall contain the following information:
(1) The project owner's name and contact information;
(2) The general description of the project;
(3) The date of completion of the project;
(4) The final project costs;
(5) The amount of South Dakota sales tax, use tax, and contractors excise tax paid for the construction of the project;
(6) The location of the project;
(7) The legal description of the project location;
(8) A list of the contractors and subcontractors that performed work on the project;
(9) If the reinvestment payment was assigned or transferred, the name and address of the person to whom the reinvestment payment has been assigned or transferred; and
(10) Any other information that GOED may require.
The affidavit for reinvestment payment shall be on a form prescribed by the commissioner. The affidavit for reinvestment payment shall be signed by the project owner and signed under oath before a notary public. No affidavit for reinvestment payment may include more than one project.
Source: SL 2013, ch 7, § 29, eff. Mar. 20, 2013.
1-16G-62. Time for filing affidavit for reinvestment payment--Eligible project costs--Extension.
The affidavit for reinvestment payment as required by § 1-16G-61 shall be filed no later than six months after the completion of the project. If the affidavit for reinvestment payment is not timely filed, the person is ineligible for any reinvestment payment provided by §§ 1-16G-56 to 1-16G-68, inclusive. If the person filing the affidavit for reinvestment payment knowingly makes any material false statement or report in the affidavit for reinvestment payment, the person is ineligible for any reinvestment payment provided by §§ 1-16G-56 to 1-16G-68, inclusive.
No project costs that occur after three years from the construction date are eligible to be included in the final project cost determination for any reinvestment payment provided by §§ 1-16G-56 to 1-16G-68, inclusive, unless an extension is granted at the sole discretion of the board, which extension may not extend beyond four years from the construction date.
Source: SL 2013, ch 7, § 30, eff. Mar. 20, 2013.
1-16G-63. Time and manner of reinvestment payment.
After the timely receipt of a completed affidavit for reinvestment payment, within ninety days GOED shall make payment from the reinvestment fund to the project owner based upon the amount and terms approved by the board as a reinvestment payment. If GOED requests additional documents or information from the project owner, the ninety day period begins to run from the date of receipt of the additional documents or information. GOED shall tender the reinvestment payment by electronic funds transfer.
Source: SL 2013, ch 7, § 31, eff. Mar. 20, 2013.
1-16G-64. Reinvestment payment fund created.
There is hereby created the reinvestment payment fund for the purpose of making reinvestment payments pursuant to the provisions of §§ 1-16G-56 to 1-16G-68, inclusive, and new frontiers payments pursuant to the provisions of §§ 1-16G-73 to 1-16G-84, inclusive.
If the board approves a reinvestment payment pursuant to the provisions of §§ 1-16G-56 to 1-16G-68, inclusive, the Department of Revenue shall deposit into the fund a portion or all of the sales and use taxes paid by the project owner up to a maximum amount of the reinvestment payment approved by the board.
If the board approves a new frontiers payment pursuant to the provisions of §§ 1-16G-73 to 1-16G-84, inclusive, the Department of Revenue shall deposit into the fund a portion or all of the sales and use taxes paid by the program owner up to a maximum amount of the new frontiers payment approved by the board.
The funds in the reinvestment project fund are continuously appropriated to GOED to make reinvestment payments pursuant to §§ 1-16G-56 to 1-16G-68, inclusive, and new frontiers payments pursuant to §§ 1-16G-73 to 1-16G-84, inclusive. If any money deposited in the fund and set aside for a specific reinvestment payment or new frontiers payment is in excess of the final reinvestment or new frontiers payment, as applicable, or the specific project or program becomes ineligible for the reinvestment or new frontiers payment, as applicable, such money shall be deposited into the general fund. Interest earned on money in the fund shall be deposited into the general fund.
Source: SL 2013, ch 7, § 32, eff. Mar. 20, 2013; SL 2016, ch 5, § 13.
1-16G-65. Effect of tax collection agreement with Indian tribe.
If the project is located on land that is included within the agreement area of a sales and use tax collection agreement entered into by the state and an Indian tribe pursuant to chapter 10-12A, the board may only approve a reinvestment payment that is equal to or less than the amount of funds attributable to the project that the Department of Revenue retains pursuant to the terms of the tax collection agreement.
Source: SL 2013, ch 7, § 33, eff. Mar. 20, 2013.
1-16G-66. Public records-Information on the GOED website.
The name of any person that receives a reinvestment payment as provided by §§ 1-16G-56 to § 1-16G-68, inclusive, and the amount of the reinvestment payment is public information and shall be available and open to public inspection as provided in § 1-27-1. The following information shall be made public on the GOED website as public information:
(1) An estimated number of the full-time jobs to be created by the project;
(2) An estimated average wage of the full-time jobs;
(3) A list of all the local government tax mechanisms and state economic tools, loans, or grants provided to the project;
(4) An estimate of the property taxes to be paid by the project; and
(5) A statement of why the project would not have occurred in South Dakota without the reinvestment payment.
Source: SL 2013, ch 7, § 34, eff. Mar. 20, 2013.
1-16G-67. Promulgation of rules on reinvestment payments.
The board may promulgate rules, pursuant to chapter 1-26, concerning the procedures and forms for applying for and receiving the reinvestment payment, the requirements necessary to qualify for the reinvestment payment, and the criteria to evaluate projects submitting applications.
Source: SL 2013, ch 7, § 35, eff. Mar. 20, 2013.
1-16G-68. Prohibited commissions.
No person who works for a project may be employed for a commission dependent in any manner upon the approval of any government grants, loans, or reinvestment payments that the person obtains for the project.
Source: SL 2013, ch 7, § 36, eff. Mar. 20, 2013.
1-16G-69 to 1-16G-72. Executed.
1-16G-73. Definitions relating to new frontiers program.
Terms used in §§ 1-16G-73 to 1-16G-84, inclusive, mean:
(1) "Board," the Board of Economic Development;
(2) "Commissioner," the commissioner of the Governor's Office of Economic Development;
(3) "Completed the program" or "completion of the program," the first date when the program's schedule of work as outlined in the application required under § 1-16G-75 is finished. In the specific case of a clinical trial for a new pharmaceutical product or medical device, this term means the end date of the clinical trial phase undertaken pursuant to approval by a federal authority;
(4) "Commencement date," the first date preclinical research or clinical trial activities begin pursuant to a program's schedule of work or the terms of an approval by a federal authority. For a person already engaged in a program and relocating to South Dakota from a foreign jurisdiction, commencement date means the date of first full-time occupancy of an office or other facility located in this state;
(5) "Department," the Department of Revenue;
(6) "Federal authority," an agency or instrumentality of the United States government authorized under law to regulate the activities of the program, including the U.S. Food and Drug Administration and the National Institutes of Health;
(7) "GOED," the Governor's Office of Economic Development;
(8) "Person," any individual, firm, copartnership, joint venture, association, cooperative, nonprofit development corporation, limited liability company, limited liability partnership, corporation, estate, trust, business trust, receiver, or any group or combination acting as a unit. The term also includes any heirs, assigns, or successors in interest thereto;
(9) "Program," a planned, sustained original research engagement into a new or adapted method, process, product, or technology, or the testing of a new method, process, product, or technology under approval by a federal authority, including a clinical trial for a new pharmaceutical product or medical device;
(10) "Program cost," the amount paid by the program owner in money, credits, property, or other consideration associated with a program including contract labor, materials, equipment, supplies, or fees.
Source: SL 2016, ch 5, § 1.
1-16G-74. Requirements for new frontiers program applicants.
A person may apply for a new frontiers payment pursuant to §§ 1-16G-73 to 1-16G-84, inclusive. The person shall:
(1) Timely file an application as required by § 1-16G-75;
(2) Receive a permit from GOED pursuant to § 1-16G-77;
(3) Timely file an affidavit for new frontiers payment as required by § 1-16G-78; and
(4) Comply with the provisions of §§ 1-16G-73 to 1-16G-84, inclusive, to qualify for the new frontiers payment.
A program with a commencement date after March 31, 2016, may receive a new frontiers payment as provided by §§ 1-16G-73 to 1-16G-84, inclusive.
Source: SL 2016, ch 5, § 2.
1-16G-75. Time for filing application--Contents.
Before any person receives any new frontiers payment as provided in §§ 1-16G-73 to 1-16G-84, inclusive, the person shall file an application with GOED. The application may be filed no later than thirty days after the commencement date. No person may receive a new frontiers payment if the application is not timely filed with GOED.
The application shall include the following information:
(1) The program owner's name and contact information;
(2) The general description of the program;
(3) The commencement date of the program;
(4) The projected date for completion of the program;
(5) A schedule of work for the program;
(6) The estimated program costs;
(7) The location of the program;
(8) A list of the anticipated contractors and subcontractors who will perform work on the program;
(9) A copy of any approval notification by a federal authority;
(10) A commitment from the program owner to manufacture or process the product resulting from the program in South Dakota; and
(11) Any other information that GOED may require.
The application shall be on a form prescribed by the commissioner. The application shall be signed by the program owner under penalty of perjury. No application may include more than one program.
Source: SL 2016, ch 5, § 3.
1-16G-76. Board review of application--Factors for consideration.
The board shall review the application and make a determination of whether the program shall be approved or disapproved. The board may approve a new frontiers payment that is equal to or less than South Dakota sales and use tax paid on the program costs.
The board shall consider the following factors when making that determination:
(1) Is the program in an industry or sector identified by GOED as a priority for economic development;
(2) Is the program likely to lead to future economic development or commercialization opportunities located in South Dakota;
(3) Impact of the program on current economic activity in the community, area, and state;
(4) Extent to which program costs are subject to similar taxes in other states; and
(5) Criteria pertaining to eligible activities and economic impact established by rules promulgated pursuant to § 1-16G-84.
Source: SL 2016, ch 5, § 4.
1-16G-77. Permit from GOED--Assignment and transfer of permit and payment--Amended application.
Upon approval of the application by the board, GOED shall issue a permit entitling the person to submit an affidavit for new frontiers payment as provided by § 1-16G-80. The permit and new frontiers payment is assignable and transferable and may be used as collateral or security pursuant to chapter 57A-9. If the initial permit holder entity reorganizes into a new entity, the new entity shall file with GOED an amended application within sixty days of the reorganization. If either the permit or new frontiers payment, or both, is assigned or transferred to another entity, the entity shall file with GOED an amended application within sixty days.
Source: SL 2016, ch 5, § 5.
1-16G-78. Affidavit for new frontiers payment--Contents.
Any person holding a new frontiers permit issued by GOED and completing its program shall file an affidavit for new frontiers payment with GOED.
The affidavit for new frontiers payment shall contain the following information:
(1) The program owners' name and contact information;
(2) The general description of the program;
(3) The date of completion of the program;
(4) The final program costs;
(5) The amount of South Dakota sales tax and use tax paid for the completion of the program;
(6) The location of the program;
(7) A list of the contractors and subcontractors who performed work on the program;
(8) A copy of any approval notification by a federal authority;
(9) A commitment from the program owner to manufacture or process the product resulting from the program in South Dakota;
(10) If the new frontiers payment was assigned or transferred, the name and address of the person to whom the new frontiers payment has been assigned or transferred; and
(11) Any other information that GOED may require.
The affidavit for new frontiers payment shall be on a form prescribed by the commissioner. The affidavit for new frontiers payment shall be signed by the program owner. No affidavit for new frontiers payment may include more than one program.
Source: SL 2016, ch 5, § 6.
1-16G-79. Time for filing affidavit for payment--Final program cost determination--Extension.
The affidavit for new frontiers payment as required by § 1-16G-78 shall be filed no later than six months after the completion of the program. If the affidavit for new frontiers payment is not timely filed, the person is ineligible for a new frontiers payment. If the person filing the affidavit for new frontiers payment knowingly makes any material false statement or report in the affidavit for new frontiers payment, the person is ineligible for a new frontiers payment.
No program costs that occur after eight years from the commencement date are eligible to be included in the final program cost determination for a new frontiers payment, unless an extension is granted at the sole discretion of the board. Any extension granted may not extend beyond twelve years from the commencement date.
Source: SL 2016, ch 5, § 7.
1-16G-80. Time for new frontiers payment--Additional information.
After the timely receipt of a completed affidavit for new frontiers payment, within ninety days GOED shall make payment from the reinvestment fund established in § 1-16G-64 to the program owner based upon the amount and terms approved by the board. If GOED requests additional documents or information from the program owner, the ninety-day period begins to run from the date of receipt of the additional documents or information. GOED shall tender the new frontiers payment by electronic funds transfer.
Source: SL 2016, ch 5, § 8.
1-16G-81. Repayment upon relocation outside of state--Repayment waiver.
If a person receives a new frontiers payment under § 1-16G-80 for a program, but subsequently locates the manufacture or processing of the product resulting from the program outside of South Dakota, the person shall repay all new frontiers payments to the State of South Dakota. Upon application by the person, the board may in its discretion waive all or part of the repayment obligation.
The application for repayment waiver shall be on a form prescribed by the commissioner and shall be signed by the person requesting the waiver.
Source: SL 2016, ch 5, § 9.
1-16G-82. Limitations on reinvestment payments.
The limitations on reinvestment payments imposed by § 1-16G-65 also apply to any new frontiers payment approved by the board.
Source: SL 2016, ch 5, § 10.
1-16G-83. Public information.
The name of any person that receives a new frontiers payment or waiver as provided by §§ 1-16G-73 to 1-16G-84, inclusive, and the amount of the new frontiers payment or waiver, is public information and shall be available and open to public inspection as provided in § 1-27-1.
Source: SL 2016, ch 5, § 11.
1-16G-84. Promulgation of rules regarding new frontiers program.
The board may promulgate rules, pursuant to chapter 1-26, concerning the procedures and forms for applying for and receiving the new frontiers payment, the requirements necessary to qualify for the new frontiers payment, and the criteria to evaluate programs submitting applications.
Source: SL 2016, ch 5, § 12.
1-16G-85. [Effective until July 1, 2025] Definitions.
Terms used in §§ 1-16G-85 through 1-16G-89 mean:
(1) "Commissioner," the Commissioner of the Governor's Office of Economic Development;
(2) "Disaster relief subfund," the small business economic disaster relief subfund created in § 1-16G-86;
(3) "COVID-19 state of emergency," the COVID-19 outbreak emergency declared by the Governor as provided in § 34-48A-5, including any extension thereof; and
(4) "Small business," a business enterprise with no more than two hundred fifty full-time equivalent employees.
Source: SL 2020, ch 3, § 1, eff. Mar. 31, 2020.
Effective July 1, 2025
1-16G-86. [Effective until July 1, 2025] Disaster relief subfund--Creation--Continuous appropriation.
There is created within the revolving economic development and initiative fund created by § 1-16G-3 the small business economic disaster relief subfund. Unexpended money and any interest that may be credited to the subfund shall remain in subfund. Any money in the subfund is continuously appropriated to the Governor's Office of Economic Development. The commissioner may accept grants and gifts to the subfund.
Source: SL 2020, ch 3, § 2, eff. Mar. 31, 2020.
Effective July 1, 2025
1-16G-87. [Effective until July 1, 2025] Disaster relief subfund--Loans.
The commissioner may make loans from the disaster relief subfund to small businesses adversely affected by the COVID-19 state of emergency. The commissioner shall approve loans from the disaster relief subfund upon terms established by the commissioner. Loan proceeds may be used for business purposes as approved by the commissioner. A loan from the disaster relief subfund under this section must meet each of the following criteria:
(1) The loan may not exceed seventy-five thousand dollars;
(2) The interest rate on the loan must not be at a rate greater than zero percent; and
(3) The loan may not include any fee for processing, administering, or servicing of the loan, except in the case of a default by the borrower.
Source: SL 2020, ch 3, § 3, eff. Mar. 31, 2020.
Effective July 1, 2025
1-16G-88. [Effective until July 1, 2025] Disaster relief subfund--Reporting.
The commissioner shall provide a report at each regular meeting of the Board of Economic Development containing the name of each disaster relief subfund borrower, the amount of the loan, and the maturity date of the loan. The report shall be a public document and shall be posted on the Governor's Office of Economic Development website.
Source: SL 2020, ch 3, § 4, eff. Mar. 31, 2020.
Effective July 1, 2025
1-16G-89. [Effective until July 1, 2025] Disaster relief subfund loans--Confidentiality.
The meetings and deliberations of the commissioner and the Governor's Office of Economic Development concerning loans from the disaster relief subfund are confidential and exempt from public disclosure, chapter 1-25, and chapter 1-27. Any documentary material or data made or received by the commissioner or the Governor's Office of Economic Development for the purpose of acting upon an application for a loan from the disaster relief subfund or administering the loan, to the extent that such material or data consists of trade secrets or commercial or financial information regarding the operation of such business, are not considered public records, and are exempt from disclosure. Nothing in this section prohibits the disclosure of confidential information to the extent necessary to collect or recoup the loan or the disclosure of confidential information to the Board of Economic Development.
Source: SL 2020, ch 3, § 5, eff. Mar. 31, 2020.
Effective July 1, 2025
