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Recovery Zone Economic Development Bonds are a new type of taxable bond created by the American Recovery and Reinvestment Act, passed by Congress in February 2009. They may be used to finance certain kinds of business development activities in areas of significant economic distress.
Q. Who is eligible to issue Recovery Zone Economic Development Bonds (RZ-EDBs), and what can they be used for?
A. Under this program, South Dakota Counties and Sioux Falls are eligible to issue a new type of tax credit bond called a “Recovery Zone Economic Development Bond” to finance economic activities in a Recovery Zone. A Recovery Zone is defined as an area having significant poverty, unemployment, home foreclosures, or general distress; or an area that has already been federally designated as an Empowerment Zone or Renewal Community. In addition to the federally designated areas, a county or municipality may designate areas within their jurisdiction as Recovery Zones.
Economic development activities qualified under this program include:
- Capital expenditures paid or incurred for property in Recovery Zones.
- Expenditures for public infrastructure and construction of public facilities.
- Expenditures for job training and educational programs.
Private activities, defined as those in which a substantial portion of the bond or tax credit proceeds benefit a private business or individual, may not be financed with this program.
Important Note: This program allocates the authority to issue bonds and sell tax credits to bond and tax credit investors in order to finance economic development activities; it is not a direct funding program that allocates public dollars.
Q. How much bond issuing authority is available?
A. A total of $90 million in bond issuing authority is available statewide. It will be divided among the counties based on the rate of employment declines in each county during the period from December 2007 and December 2008.
Q. Where, how and when do I apply for an allocation of RZ-FB authority?
A. If you are a business or taxpayer with a qualifying project, you will need to work through your city or county to have a bond issued to finance the project. Counties and Sioux Falls may create their own processes for projects within their jurisdictions. Bonds must be issued prior to January 1, 2011.
Q. What are the allocations?
A. The allocations are as follows:
|
Issuer
|
Recovery Zone Economic Development Bonds
|
Recovery Zone Facility Bonds
|
Combined
|
|
South Dakota - State Totals
|
90,000,000.00
|
135,000,000.00
|
225,000,000.00
|
| |
|
|
|
|
Sioux Falls city, SD
|
13,288,000.00
|
19,933,000.00
|
33,221,000.00
|
| |
-
|
|
-
|
|
Aurora County, SD
|
-
|
-
|
-
|
|
Beadle County, SD
|
-
|
-
|
-
|
|
Bennett County, SD
|
658,000.00
|
986,000.00
|
1,644,000.00
|
|
Bon Homme County, SD
|
1,122,000.00
|
1,683,000.00
|
2,805,000.00
|
|
Brookings County, SD
|
-
|
-
|
-
|
|
Brown County, SD
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7,795,000.00
|
11,693,000.00
|
19,488,000.00
|
|
Brule County, SD
|
406,000.00
|
609,000.00
|
1,015,000.00
|
|
Buffalo County, SD
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348,000.00
|
522,000.00
|
870,000.00
|
|
Butte County, SD
|
-
|
-
|
-
|
|
Campbell County, SD
|
-
|
-
|
-
|
|
Charles Mix County, SD
|
-
|
-
|
-
|
|
Clark County, SD
|
-
|
-
|
-
|
|
Clay County, SD
|
-
|
-
|
-
|
|
Codington County, SD
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3,810,000.00
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5,716,000.00
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9,526,000.00
|
|
Corson County, SD
|
-
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-
|
-
|
|
Custer County, SD
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503,000.00
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754,000.00
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1,257,000.00
|
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Davison County, SD
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3,191,000.00
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4,787,000.00
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7,978,000.00
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Day County, SD
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-
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-
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-
|
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Deuel County, SD
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-
|
-
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-
|
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Dewey County, SD
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1,064,000.00
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1,596,000.00
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2,660,000.00
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|
Douglas County, SD
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-
|
-
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-
|
|
Edmunds County, SD
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754,000.00
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1,132,000.00
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1,886,000.00
|
|
Fall River County, SD
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2,805,000.00
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4,207,000.00
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7,012,000.00
|
|
Faulk County, SD
|
-
|
-
|
-
|
|
Grant County, SD
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1,257,000.00
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1,886,000.00
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3,143,000.00
|
|
Gregory County, SD
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309,000.00
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464,000.00
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773,000.00
|
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Haakon County, SD
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155,000.00
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232,000.00
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387,000.00
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Hamlin County, SD
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677,000.00
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1,015,000.00
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1,692,000.00
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Hand County, SD
|
-
|
|
-
|
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Hanson County, SD
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561,000.00
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841,000.00
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1,402,000.00
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Harding County, SD
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-
|
-
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-
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Hughes County, SD
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4,932,000.00
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7,399,000.00
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12,331,000.00
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Hutchinson County, SD
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812,000.00
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1,219,000.00
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2,031,000.00
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Hyde County, SD
|
-
|
-
|
-
|
|
Jackson County, SD
|
-
|
-
|
-
|
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Jerauld County, SD
|
-
|
-
|
-
|
|
Jones County, SD
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116,000.00
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174,000.00
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290,000.00
|
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Kingsbury County, SD
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-
|
-
|
-
|
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Lake County, SD
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3,308,000.00
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4,961,000.00
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8,269,000.00
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Lawrence County, SD
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1,547,000.00
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2,321,000.00
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3,868,000.00
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Lincoln County, SD - Residual
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2,495,000.00
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3,743,000.00
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6,238,000.00
|
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Lyman County, SD
|
-
|
-
|
-
|
|
McCook County, SD
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426,000.00
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638,000.00
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1,064,000.00
|
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McPherson County, SD
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464,000.00
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696,000.00
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1,160,000.00
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|
Marshall County, SD
|
-
|
-
|
-
|
|
Meade County, SD
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1,818,000.00
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2,727,000.00
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4,545,000.00
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Mellette County, SD
|
-
|
-
|
-
|
|
Miner County, SD
|
-
|
-
|
-
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|
Minnehaha County, SD - Residual
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2,785,000.00
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4,178,000.00
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6,963,000.00
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Moody County, SD
|
-
|
-
|
-
|
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Pennington County, SD
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7,930,000.00
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11,896,000.00
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19,826,000.00
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Perkins County, SD
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503,000.00
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754,000.00
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1,257,000.00
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Potter County, SD
|
-
|
-
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-
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|
Roberts County, SD
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2,631,000.00
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3,946,000.00
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6,577,000.00
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Sanborn County, SD
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716,000.00
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1,074,000.00
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1,790,000.00
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Shannon County, SD
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3,965,000.00
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5,948,000.00
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9,913,000.00
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Spink County, SD
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1,799,000.00
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2,698,000.00
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4,497,000.00
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Stanley County, SD
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928,000.00
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1,393,000.00
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2,321,000.00
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Sully County, SD
|
-
|
-
|
-
|
|
Todd County, SD
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1,451,000.00
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2,176,000.00
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3,627,000.00
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Tripp County, SD
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1,006,000.00
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1,509,000.00
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2,515,000.00
|
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Turner County, SD
|
658,000.00
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986,000.00
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1,644,000.00
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|
Union County, SD
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3,211,000.00
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4,816,000.00
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8,027,000.00
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Walworth County, SD
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1,780,000.00
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2,669,000.00
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4,449,000.00
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|
Yankton County, SD
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5,648,000.00
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8,472,000.00
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14,120,000.00
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|
Ziebach County, SD
|
368,000.00
|
551,000.00
|
919,000.00
|
| |
90,000,000.00
|
135,000,000.00
|
|
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|
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A. Each County will be required to track projects and monitor bond issuances to ensure that it and the state do not exceed their total allowable amount of bond issuing authority.
Q. Are there any other rules or obligations I need to know about?
A. Specific federal tax regulations apply to projects financed under this program. Bond issuers will need the advice of qualified bond counsel and tax counsel in order to ensure the project and the bond issuance are in compliance with all applicable federal bond and tax regulations.
Federal Davis-Bacon prevailing wage rules apply to projects financed with RZ-EDBs.
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