South Dakota Office of Tourism

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South Dakota Office of Tourism
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South Dakota Office of Tourism
Budget Review

• Tourism Budget History
• State Level Budget Comparison
• Tourism Impact on Economy

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South Dakota Office of Tourism
Budget History

• 1995 - Gaming and Tourism Tax
• 2005 - Million Dollar Co-op
• 2007 - Million Dollar Challenge

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South Dakota Office of Tourism
Budget Review
Source TIA Survey of US State and Territory
Tourism Office Budgets
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South Dakota Office of Tourism
Budget Review
Source TIA Survey of US State and Territory
Tourism Office Budgets
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South Dakota Office of Tourism
Budget Review
Source TIA Survey of US State and Territory
Tourism Office Budgets
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South Dakota Office of Tourism
Budget Review
Source TIA Survey of US State and Territory
Tourism Office Budgets
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South Dakota Office of Tourism
Budget Review
Source TIA Survey of US State and Territory
Tourism Office Budgets
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South Dakota Office of Tourism
Tourism Impact
Source 2007 Annual Report
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South Dakota Office of Tourism
Tourism Impact
Source 2007 Annual Report
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South Dakota Office of Tourism
Tourism Revenue
Source 2007 Annual Report
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Governors Office of Economic Development
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Governors Office of Economic Development

• Board of Economic Development (BED) (REDI)
• Economic Development Finance Authority (EDFA)
• South Dakota Development Corporation (SDDC)

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Board of Economic Development

• Created under Statute 1-16G in 1987
• 13 member board appointed by Governor to four
  year terms
• Administers the Revolving Economic Development
  and Initiative (REDI) Fund, the Value-Added
  Agriculture Sub Fund, and the Tourism
  Enhancement Program

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Board of Economic Development
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Revolving Economic Development Initiative Fund

• BED authorized to promulgate rules for economic
  development under Statute 1-16G-8
• Administrative Rules 680201 were originally
  promulgated by BED in 1987
• Current version of Administrative Rules
  (68020133 to 68020155) adopted in 2007

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Revolving Economic Development Initiative Fund

• Eligibility Criteria
• Job Creation (10.50/hr. minimum, benefits),
  exception for wages based on median county
  income
• Financing for land, building, leasehold
  improvements, machinery and equipment
• Finance up to 45 of total project costs, must
  have other sources identified
• 10 equity contribution (of total project costs)
• Interim financing required.

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Revolving Economic Development Initiative Fund

• Loan Loss Ratio (Historical)
• REDI
• Net Charge-Offs/Total Funded Loans
• 2,624,739/175,918,881
• 1.49
• FDIC Insured Commercial Banks NA

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Revolving Economic Development Initiative Fund

• Loan Loss Ratio (FRB Defined) - as of 6/30/08
• Net charge-offs during quarter/Avg. level loans
  outstanding
• REDI
• 0/42,251,904
• 0.00
• FDIC Insured Commercial Banks
• 1.24

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Revolving Economic Development Initiative Fund
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Value-Added Ag Sub Fund

• Created under Statute 1-16G-25 in 1999
• Statute 1-16G-26 designated 3 million from the
  REDI Fund for purposes of the value added
  agriculture subfund
• Statute 10-47B-154 provides .03/gallon of
  claimed ag fuel tax refunds as an ongoing
  funding source for VASF
• Statute 1-16G-27 directed BED to administer the
  value added agriculture subfund
• Statute 1-16G-27 also directed the value added
  agriculture subfund (VASF) to be used to
  develop and promote value added agriculture
  in SD

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Value-Added Ag Sub Fund

• Administrative Rules 680204 were originally
  promulgated by BED in 1999, repealed in 2007
• Current version of Administrative Rules
  (68020215 to 68020236) were promulgated
  and adopted in 2007

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Value-Added Ag Sub Fund

• Up to 45 of the total eligible costs
• Minimum 10 equity required
• Awarded as 0 interest loan
• Repayment (if project proceeds)
• Up to 20 yr amortization, 5 yr balloon
• Forgiveness (if project does not proceed)
• If granted, study becomes public information

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Value-Added Ag Sub Fund

• Statistics
• Awarded () Since Inception 3,662,951
• Awarded () Since Inception 59
• Funded Since Inception 3,008,867
• Amount Forgiven/Granted 1,236,878

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Tourism Enhancement Program

• Formerly the value added tourism sub fund
  created under Statute 1-16G-29 in 2003
• Statute 1-16G-31 designated 3 million from the
  REDI Fund for purposes of the value added
  tourism subfund
• Subfund repealed in 2007, program moved directly
  under REDI fund

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Tourism Enhancement Program

• BED promulgated Administrative Rules 680204 in
  2003, repealed in 2007
• Current version of Administrative Rules
  (68020323 to 68020344) were promulgated
  and adopted in 2007

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Tourism Enhancement Program

• Up to 45 of the total eligible costs
• Minimum 10 equity required
• Awarded as 0 interest loan
• Repayment (if project proceeds)
• Up to 20 yr amortization, 5 yr balloon
• Forgiveness (if project does not proceed)
• If granted, study becomes public information

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Tourism Enhancement Program

• Statistics
• Awarded () Since Inception 20
• Funded () Since Inception 525,433
• Amount Forgiven/Granted 256,474

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Economic Development Finance Authority

• Created under Statute 1-16B
• 5 member board appointed by Governor to four
  year terms
• Administers the EDFA pooled-loan bond program
  and the Agricultural Processing and Exporting
  (APEX) Fund

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Economic Development Finance Authority
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Pooled-Loan Bond Program

• EDFA approves bond issuances to fund loans that
  are credit enhanced by the Capital Reserve
  Fund (CRF)
• CRF and moral obligation backing of State
  enhance the credit rating of underlying
  borrowers to a Standard and Poors A rating
• Current balance of CRF is 5mm, allowing bonding
  capacity of 40mm
• EDFA pooled loan bond program comes under
  Administrative Rules 68010101 to 68010106

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Pooled-Loan Bond Program

• Eligibility Criteria
• Must be for profit business, engaged in the
  operation of industrial processing or
  manufacturing
• Maximum project size of 20MM (under tax
  exempt program) taxable bond program does
  not limit the project size
• Maximum bond issuance of 10MM 80 LTV on
  real estate and 75 LTV on equipment

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Pooled-Loan Bond Program
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Agricultural Processing Exporting Fund

• EDFA approves and administers APEX loans that
  are funded via loans from the United State
  Department of Agriculture Rural Development
• APEX program falls under Administrative Rules
  68010201 to 68010220
• EDFA receives funding from Rural Development at
  1 and lends currently at 5, spread covers
  administrative costs and charge-offs

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Agricultural Processing Exporting Fund

• Eligibility Criteria
• APEX program can lend 75 of total projects up
  to 237,500, If
• Export a minimum of 75 percent of its product to
  entities outside the state of South Dakota or
  replace an import (1)
• Provide employment opportunities for low-income
  persons or displaced farm families to the
  maximum extent practicable (2)
• Use a South Dakota grown or produced
  agricultural product as at least 50 percent of
  the raw material (3) and
• Locate in a municipality with a population less
  than 25,000, as listed according to the latest
  decennial census (4).
• An applicant may request a waiver of subdivision
  (1) or (3) by petitioning the authority. A
  two-thirds vote by the authority is necessary to
  approve a waiver.

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Agricultural Processing Exporting Fund

• Loan Loss Ratio (Historical)
• APEX
• Net Charge-Offs/Total Funded Loans
• 117,436/8,127,023
• 1.45

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South Dakota Development Corporation

• Created under Executive Order 83-12
• 25 member board appointed by Governor to three
  year terms, maximum of three terms.
• Executive Board of 7, elected annually by full
  board
• One year terms on Executive Board
• Executive Board responsible for making credit
  decisions
• Administers the SBA 504 loan program and the
  MicroLoan program

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South Dakota Development Corporation
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South Dakota Development Corporation
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SBA 504 Loan

• SDDC approves and administers federal loans for
  Small Business Administration.
• SDDC is a Certified Development Corporation
  (required by SBA to participate in 504 program)
• Program is funded by SBA issuing bonds, SBA
  backs the bonds
• Bank lends 50 of total project, SBA/SDDC lends
  30-40 and borrower injects equity of 10-20

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SBA 504 Loan

• Eligibility Criteria
• Fixed asset purchases only
• For-profit businesses
• Ag, Manufacturing and Service
• 10-20 equity injection required
• 1.5 million maximum, Public Policy 2.0 million
  maximum Manufacturing 4.0 million maximum

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South Dakota MicroLOAN

• Originally created in partnership with Citibank
  SD in 1999
• Originally Citibank provided the funding,
  SDDC/GOED administered program and loans
• BED (via REDI loan) purchased assets (took out
  Citi) in 2004 to help lower interest rate
  provided to borrower
• REDI allocated 3mm in availability to fund
  SDDC approved MicroLoans
• Current loans outstanding/receivables of
  approximately 725,000

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South Dakota MicroLOAN

• Eligibility Criteria
• 50 must be provided by local bank balance from
  MicroLOAN and equity as determined by local
  bank
• Maximum loan amount of 50,000, minimum of
  1,000 total project costs not to exceed
  200,000
• Net worth limitations - 500,000

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South Dakota MicroLOAN

• Loan Loss Ratio (Historical)
• MicroLoan
• Net Charge-Offs/Total Funded Loans
• 69,403/3,335,345
• 2.08

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Governors Office of Economic Development