1. South Dakota Office of Tourism

2. Tourism Budget History State Level Budget Comparison Tourism Impact on Economy Budget Review South Dakota Office of Tourism

3. 1995 - Gaming and Tourism Tax 2005 - Million Dollar Co-op 2007 - Million Dollar Challenge Budget History

4. Budget Review Source: TIA Survey of US State and Territory Tourism Office Budgets South Dakota Office of Tourism

5. Budget Review Source: TIA Survey of US State and Territory Tourism Office Budgets South Dakota Office of Tourism

6. Budget Review Source: TIA Survey of US State and Territory Tourism Office Budgets South Dakota Office of Tourism

7. Budget Review Source: TIA Survey of US State and Territory Tourism Office Budgets South Dakota Office of Tourism

8. Budget Review Source: TIA Survey of US State and Territory Tourism Office Budgets South Dakota Office of Tourism

9. Tourism Impact Source: 2007 Annual Report South Dakota Office of Tourism

10. Tourism Impact Source: 2007 Annual Report South Dakota Office of Tourism

11. Tourism Revenue Source: 2007 Annual Report South Dakota Office of Tourism

12. Governor’s Office of Economic Development

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

14. 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

15. Board of Economic Development

16. Revolving Economic Development & Initiative Fund BED authorized to promulgate rules for economic development under Statute 1-16G-8 Administrative Rules 68:02:01 were originally promulgated by BED in 1987 Current version of Administrative Rules (68:02:01:33 to 68:02:01:55) adopted in 2007

17. 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.

18. 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

19. 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%

20. Revolving Economic Development & Initiative Fund

21. 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

22. Value-Added Ag Sub Fund Administrative Rules 68:02:04 were originally promulgated by BED in 1999, repealed in 2007 Current version of Administrative Rules (68:02:02:15 to 68:02:02:36) were promulgated and adopted in 2007

23. 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

24. 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

25. 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

26. Tourism Enhancement Program BED promulgated Administrative Rules 68:02:04 in 2003, repealed in 2007 Current version of Administrative Rules (68:02:03:23 to 68:02:03:44) were promulgated and adopted in 2007

27. 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

28. Tourism Enhancement Program Statistics Awarded (#) Since Inception: 20 Funded ($) Since Inception:$525,433 Amount Forgiven/Granted:$256,474

29. 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

30. Economic Development Finance Authority

31. 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 Poor’s “A” rating Current balance of CRF is $5mm, allowing bonding capacity of $40mm EDFA pooled loan bond program comes under Administrative Rules 68:01:01:01 to 68:01:01:06

32. 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

33. Pooled-Loan Bond Program

34. 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 68:01:02:01 to 68:01:02:20 EDFA receives funding from Rural Development at 1% and lends currently at 5%, spread covers administrative costs and charge-offs

35. 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.

36. Agricultural Processing & Exporting Fund Loan Loss Ratio (Historical) APEX: = Net Charge-Offs/Total Funded Loans = $117,436/$8,127,023 = 1.45%

37. 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

38. South Dakota Development Corporation

40. 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%

41. 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

42. 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

43. 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

44. South Dakota MicroLOAN Loan Loss Ratio (Historical) MicroLoan: = Net Charge-Offs/Total Funded Loans = $69,403/$3,335,345 = 2.08%

46. Governor’s Office of Economic Development