Infrastructure bill resists attempts to quash it in House of Representatives

PIERRE – The House of Representatives sent a $200 million infrastructure bill to Gov. Kristi Noem’s desk on Monday with a hard-won 54-16 vote.

Senate Bill 41 is a fix to 2022 bill that sought to send infrastructure funds to developers to help fill gaps in workforce housing. The agency deemed responsible for dispersing the mix of state and federal funds decided not to award the money over concerns that it lacked the authority to do so.

Several planned projects were placed on hold as a result of the hold-up.

The new bill clarifies that the Housing Development Authority can dispense the funds, $150 million of which comes from state coffers. The updated bill for 2023 uses $100 million of those state funds to create a revolving loan program to support continued development.

The bill carries an emergency clause, which means it will become law the moment Gov. Noem signs it, which she has promised to do. That clause also required that the bill earn the support of two-thirds of House members.

The Senate passed the bill in its first week of session. The bill was a harder sell in the House, which has several members who opposed the proposal last session and carried their opposition into the 2023 session. 

On Friday, the House punted the bill to this week, scuttling hopes for a more rapid win by its sponsors. On Monday, the bill survived four attempts to amend it, with pitches that would have removed the emergency clause, defined workforce housing, made it a felony for a lawmaker to benefit financially from the funds and barred developers using the funds from using tax-increment financing. 

Rep. Chris Karr, R-Sioux Falls, decried the bill as a harmful disruption to the housing market that puts more responsibility for community growth and personal well-being in the hands of government bureaucrats.

Karr pointed to efforts to offer parental leave and bolster daycares as evidence that the state is intervening too often in the markets.

“Perhaps the next session, we can figure out how we can make sure everybody has a car, so that way they can get to and from their government-incentivized house to their government-incentivized daycare to their government-incentivized job,” Karr said.

Arguments from Karr and others only delayed an outcome that wasn’t in question, according to many who spoke on the floor. Rep. Roger Chase, R-Huron, the prime sponsor in the House, said he spent hours trying to convince opponents to come to his side on Sunday, but to no avail.
Rep. Aaron Aylward, R-Harrisburg, challenged other members to explain how the bill squares with the state GOP platform, but only after saying “it probably won’t change anyone’s mind.”

Several opponents spoke of the poor precedent the state would set by using one-time funds – some of the money came through federal COVID-19 relief – to deal with ongoing problems.

Rep. Tony Venhuizen, R-Sioux Falls, disputed that, noting the creation of the revolving loan fund in the updated bill.

“We should not confuse the difference between a one-time expense and an ongoing benefit,” Venhuizen said.

After an hour and a half of debate, the bill passed with the two-thirds majority required for a bill with an emergency clause. Immediately following the vote, Rep. Phil Jensen, R-Rapid City, attempted to undo it by accusing Rep. Chase of a conflict of interest. House Speaker Hugh Bartels, R-Watertown, quickly dispatched that argument, saying his review of the effort showed no financial interest for Chase in Senate Bill 41. 

The bill now heads to Noem’s desk.