PIERRE, S.D. (KELO) — The $200 million that the South Dakota Legislature approved this year was meant specifically for loans and grants to housing infrastructure.

That’s what the Legislature’s Executive Board emphasized Monday in a letter of intent to the South Dakota Housing Development Authority.

The housing authority is scheduled to meet Tuesday on the matter.

Governor Kristi Noem signed HB 1033 into law but issued a letter raising questions about how it would fit with the authority’s existing powers.

The Executive Board letter clarifies how the $150 million of state funding and $50 million of federal funding are to be used.

The letter states that the new funds “are not subject to the income targeting requirements and other restrictions” of the existing law and the infrastructure loan repayments should be used for future infrastructure loans.

“When this money got put into the South Dakota Housing Opportunity Fund – there are programs that come out of the South Dakota Housing Opportunity Fund, but this is a separate entity that goes toward infrastructure, and infrastructure alone,” Representative Roger Chase, R-Huron, said. He chaired the Legislature’s study on South Dakota’s workforce housing needs last year.

“So South Dakota Housing wants clarity from the Executive Board and what the intent of the Legislature was in moving forward that the one-hundred-fifty million dollars is not specifically tied to the restrictions and the covenants of the Housing Opportunity Fund, that this is a stand-alone program that should be administered by South Dakota Housing, for infrastructure and infrastructure alone,” Chase explained.

Senator Lee Schoenbeck, R-Watertown, added his perspective.

“This is designed to give comfort on a short-term basis, which I think probably they (South Dakota Housing) are going to come back to the Legislature this next session to clarify this very issue,” Schoenbeck said. “But in the meantime we don’t want to slow them down from trying to get the money out on housing infrastructure projects in South Dakota — and this is to give their (legal) counsel comfort and counsel to their board on use of those funds, which many of us think already is clear in the bill.”

Senator Troy Heinert, D-Mission, said he thought the funds should still be subject to income-targeting requirements. “I thought we made it pretty clear that was an important piece of that,” Heinert said.

Schoenbeck responded that when a person flushes a toilet, the sewer line doesn’t know whether it’s from a small house or a big house.

Heinert wound up voting against accepting the letter. He agreed the line doesn’t know whether it’s going to an apartment complex or a $2 million-dollar home. “But we were worried that a bunch of this money is not going to go where it’s supposed to, and the way I read this resolution that’s how I see it,” he said.