Legislators met on Monday, October 5, in a special legislative session called by Governor Noem to discuss federal COVID relief funds. Our State Constitution limits the scope of any special session called by a governor to only those issues set out in a governor’s proclamation calling for the session.
In this case, the proclamation limited the session to two issues: “to amend the Fiscal Year 2021 budget for the planned expenditure of federal funds relating to coronavirus relief received by the state, and to consider the resolution recommended by the Interim Committee on Appropriations on September 30, 2020.”
In late March, the federal government allocated $1.25 billion to South Dakota under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The money is to be used only to cover costs that:
- are necessary expenditures incurred due to the public health emergency with respect to COVID–19
- were not accounted for in the budget most recently approved as of March 27, 2020, (the date of enactment of the CARES Act) for the State or government; and
- were incurred during the period from March 1, 2020, through December 30, 2020.
The first allocations of money were to help local governments and schools in South Dakota deal with COVID expenses. The state’s re-employment insurance fund was allocated $100 million. And various public safety and health expenses were paid for out of the federal money. In all, about $470 million in the coronavirus relief fund was obligated by the end of September, leaving $597 million unexpended or unobligated.
Five different joint House-Senate legislative committees met in September to take public testimony on ideas for allocating additional CARES Act funds. These committees included Ag and Natural Resources, Commerce and Energy, Education, Health and Human Services, and Local Government. The ideas from each committee were presented to the Joint Committee on Appropriations, which spent a full day sifting through the ideas presented by the policy committees. Not all suggestions appeared to fit within U.S. Treasury Guidelines for spending the money; however, at the end of the day, JCA compiled the ideas into a legislative resolution for the entire legislature to consider.
By majority votes, legislators approved the resolution which urges the Governor to use the rest of the money as follows:
- $400 million for a small business COVID interruption grant program (a “small” business is defined as not having gross revenues exceeding $38.5 million, which fits SBA guidelines)
- $40 million for a small nonprofit COVID interruption grant program
- $10 million for a small business start-up grant program
- $115 million for grants to community-based health care providers or personal service providers
- $15 million for acute care in hospitals
- $2 million for adult education and private nonaccredited education
- $5 million for destination marketing organizations (visitor advertising)
- $10 million for housing assistance, including rent, utilities, or mortgage payments
The resolution, which does not have the force of law, asks the Governor to give monthly reports to JCA on the status of the coronavirus relief fund expenditures. In addition, the resolution states that the Legislature intends for the Governor to exercise her authority to adjust to changing economic conditions, to unexpected circumstances in the administration of relief funds, or to changes in federal law or guidance.
State law dating back to 1919 (SDCL 4-8-17) reads: “The Governor is authorized and empowered to accept on behalf of the state any appropriations made or moneys allotted to the state by the United States of America, as well as the provisions of any act of Congress appropriating or allotting such funds to the state to be used in cooperation with departments of the federal government and appropriations and acts of Congress.
“The funds received for the State of South Dakota pursuant to the provisions of this section shall be administered and expended under the immediate supervision of the Governor through such state departments as he shall designate for that purpose, and shall be deposited in the state treasury to be paid out by warrants drawn by the state auditor on vouchers approved by the Governor.”
However, according to SDCL 4-8B-10, enacted in 1974, the JCA must grant spending authority for spending federal funds in excess of the amounts appropriated in the general appropriations act. Therefore the Legislature passed a bill amending the FY21 General Appropriations Act by adding federal spending authority for the Coronavirus Stimulus Pool.
Complete details of the resolution and the bill passed on Monday are available on the LRC website at sdlegislature.gov.