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State Senate rejects legislation to help Hideaway Hills homeowners
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State Senate rejects legislation to help Hideaway Hills homeowners

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Blackhawk Sinkhole 20200519 (copy)

A sinkhole on East Daisy Lane in Black Hawk exposed that part of the Hideaway Hills community was built over an abandoned gypsum mine. 

PIERRE | A bill designed to help Hideaway Hills homeowners affected by the collapse of an old gypsum mine failed Tuesday afternoon in the state Senate.

SB117 would have allowed the victims of disasters to get low interest or no interest loans from the S.D. Housing Authority.

Sen. David Johnson, R-Rapid City, said one of the homeowners in the Hideaway Hills area of Black Hawk was mowing his lawn one day during April of 2020 and heard a loud “swoosh.” He looked back to see part of the lawn he had just mowed had fallen into an old gypsum mine.

Johnson said 15 families lost their homes because of the mine collapse.

“They have no option ever, ever to return to their homes,” he said. “They don’t have insurance for a collapsed mine.”

Half of the homeowners walked away from their homes and filed for bankruptcy, Johnson said. The others have continued to make payments on their homes. Johnson explained that the loans allowed in SB117 would be expressly for repaying their mortgages in the same amount of time they were given by their original lenders.

Sen. John Wiik, R-Big Stone City, said he wasn’t comfortable with a provision in the bill that allows the Legislature to declare disasters. Johnson explained that the disaster declaration could also come through a governor’s executive order.

Sen. Gary Cammack, R-Union Center, said that during testimony before the Senate Local Government Committee, a representative of the S.D. Housing Authority testified against the bill.

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“It would put in jeopardy the triple A bond rating,” he said.

Sen. Lee Schoenbeck, R-Watertown, warned about the path lawmakers would go down if they got in the business of declaring disasters. He said there were plenty of farmers with flooded homes and land in the northeast part of the state that would like a disaster declaration.

Sen. Julie Frye-Mueller, R-Rapid City, called on lawmakers to pass the bill.

“This is just an opportunity for them to apply for a loan,” Frye-Mueller said of the bill. “These families’ lives and everything they have in them are gone.”

Sen. Michael Diedrich, R-Rapid City, said a better approach might be the creation of a residential disaster fund. He cautioned against SB117 becoming law.

“The change in public policy is huge,” Diedrich said.

According to Johnson, the change in public policy fit within the mission of the housing authority.

“The South Dakota Housing Authority exists for a reason,” he said. “This is the epitome of the reason.”

The bill was defeated in the Senate on a vote of 11-24.

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