The Bureau of Finance and Management told the South Dakota Joint Appropriations Committee on Jan. 16 that the state has fully obligated its $974,500,000 allocation of American Rescue Plan Act State Fiscal Recovery Funds and is in the process of spending the money across water and sewer projects, broadband, housing and health efforts.

"South Dakota's allocation was 974,500,000," Jim Twiliger, commissioner of the Bureau of Finance and Management, said during the committee's briefing. Twiliger told lawmakers the state had obligated the funds by the end of calendar year 2024 and that federal rules require most of the obligated money to be expended by the end of calendar year 2026.

Why it matters: The SFRF and the related Capital Projects Fund (CPF) are federal pandemic recovery grants intended for infrastructure, public services and community projects. How the state spends the remaining balances — and whether projects meet federal eligibility and reporting rules — will determine whether South Dakota keeps the funds and avoids federal recapture.

Most money is committed to environmental infrastructure: Twiliger said the largest share went to water and wastewater projects administered through the Department of Agriculture and Natural Resources and related state environmental projects. He presented a line-by-line breakdown that included: a $76,000,000 allocation for state projects, roughly $49,900,000 for broadband (about 72% expended as of the end of Q4 2024), $50,000,000 for workforce housing (about 34% expended), $35,000,000 for tourism marketing (about 64% expended) and a behavioral health service delivery program that Twiliger said totals $12,800,000 and was about 72% expended.

Priorities and near-term timelines: Twiliger told the panel the state had spent about $548,600,000 of the total as of the end of December 2024 and that many large construction projects will continue through the 2025 and 2026 construction seasons. He said the federal deadline to obligate SFRF funds was calendar-year-end 2024 and that the deadline to expend obligated funds for most projects is calendar-year-end 2026. When Senator Van Heisen asked, Twiliger replied: "For the SFRF? 26. 26. The end of calendar year 2026." (Transcript excerpt.)

Selected project details reported by the bureau:
- Environmental water/wastewater projects in communities statewide (private and state) — primary administering agencies and Treasury-approved uses for wastewater capacity.
- Broadband: roughly $49.9 million obligated, ~72% expended as of Q4 2024.
- Workforce housing: $50,000,000 obligated, ~34% expended.
- Behavioral health regional facilities: $12,800,000 obligated, ~72% spent; part of Department of Social Services efforts.
- Men's prison utilities for the new men's prison: $10,000,000; bureau expects this to appear as fully expended by the end of January 2025 and will be discussed with Corrections.
- Telemedicine and nursing homes: $5,000,000 originally appropriated; the Department of Health obligated about $2.6 million through grants and the remaining funds were reallocated by the bureau into other eligible projects.
- Capital Projects Fund (CPF): $115,900,000 in CPF projects including a $75,300,000 public health laboratory build and a $29,500,000 renovation and expansion of NSU's Lincoln Hall; overall CPF expenditures had begun with $21.5 million spent as of Q4 2024.

Reporting and oversight: Twiliger said the state must report expenditures quarterly to the U.S. Treasury. He told legislators the administration had used Treasury-approved processes to obligate funds and had engaged consultants to assist with reporting; he also described the workload that state staff had carried to deploy federal aid, including prior CRF funds and other pandemic-era programs.

What lawmakers pressed: Committee members asked for more lists and detail on specific projects. Senator Howard asked whether the committee could get a list of workforce housing projects; Twiliger said the Bureau would work with the South Dakota Housing Development Authority to provide that list. Representative Northrup asked whether the $10 million for men's prison utilities implied the facility would be used long term; Twiliger clarified the funds were for the "new men's prison" utilities and said Corrections would present more next week.

What's next: The bureau said it can provide more detailed project lists and will continue reporting quarterly. Several legislators asked for follow-up materials and for agency staff to appear at future hearings on specific items, including corrections and public-health lab work.

Ending note: Twiliger emphasized the scale of the work and said the state aimed to use ARPA funds for long-term infrastructure and public-service improvements while meeting federal reporting and eligibility rules.