VALUE ADDED FINANCE AUTHORITY
1-16E-1 Short title of chapter.
1-16E-2 Legislative declaration.
1-16E-3 Definition of terms.
1-16E-4 Creation of authority.
1-16E-4.1 Membership of board of directors--Terms of office.
1-16E-4.2 Duties and goal of Board of Directors of the Value Added Finance Authority.
1-16E-4.3 Election of members of Board of Directors of Value Added Finance Authority.
1-16E-4.4 Compensation of members of Board of Directors of Value Added Finance Authority.
1-16E-5, 1-16E-6. Obsolete.
1-16E-7 Powers of authority.
1-16E-8 Lending power of authority.
1-16E-9 Borrowing power of authority.
1-16E-10 Security for authority bonds.
1-16E-11 Authority bonds not state or subdivision obligation.
1-16E-12 Bond authorization, terms, and sale--Interest rate--Noninterest bearing bonds.
1-16E-13 Pledges by authority.
1-16E-14 Redemption of bonds.
1-16E-15 Trust indenture securing authority bonds.
1-16E-16 Proceeds of bonds--Investments.
1-16E-17 Bonds as negotiable instruments.
1-16E-18 Execution of bonds--Seal.
1-16E-19 Immunity from personal liability on bonds.
1-16E-20 State pledge not to alter rights of authority to detriment of its bondholders.
1-16E-21 Conflict of interest--Disclosure--Participation in transaction.
1-16E-22 Tax exemption--Filing fee exemption.
1-16E-23 Bonds as authorized investments and securities for deposits.
1-16E-24 Rules and regulations of authority.
1-16E-25 Construction with other laws.
1-16E-26 Liberal construction of chapter.
1-16E-27 Disposition of authority assets on dissolution.
1-16E-28 Report to Governor and Legislature.
1-16E-29 Cost of establishing a development project defined.
1-16E-30 Compliance with Internal Revenue Code.
1-16E-31 Confidentiality of borrower information.
1-16E-32 Authority may contract to manage payment or interest rate risk for bonds.
1-16E-1. Short title of chapter. This chapter shall be known and may be cited as the Value Added Finance Authority Act.
Source: SL 1986, ch 16, § 2; SL 1986, ch 17, § 1.
1-16E-2. Legislative declaration. It is hereby declared that:
(1) The high and increasing cost of agricultural land, improvements, equipment and breeding livestock and the high and increasing cost of current agricultural operating expenses creates an urgent demand for financing which is not available in the amounts needed and at reasonable interest rates in the present market and the inability on the part of persons engaged in agriculture to acquire land, modern agricultural equipment and improvements at reasonable financing costs or to finance working capital needs at reasonable interest rates makes it difficult for such persons to continue their operations at present levels;
(2) Such inability to continue agricultural operations decreases employment and results in unemployment and its attendant problems;
(3) The high costs of financing capital improvements and working capital requirements impose a heavy economic burden on businesses in this state;
(4) The viability of businesses in this state is threatened by the high cost of obtaining funds to meet general capital improvement programs and working capital requirements and the continued existence of business enterprises in and the attraction of new business enterprises to this state is desirable and necessary for the maintenance and expansion of employment opportunities in and the preservation of the economic well-being of this state;
(5) It is accordingly in furtherance of the interests and welfare of all the citizens of South Dakota that a public authority be established with power to issue revenue bonds and to make the proceeds available for loans to finance agricultural enterprises, to finance business enterprises, or to finance the working capital needs of businesses, or any combination of the foregoing, at interest rates lower than would otherwise be obtainable. It is intended that the authority so established be vested with all powers necessary to the accomplishment of these purposes and that this chapter be liberally construed to accomplish such purposes;
(6) The lack of sufficient available credit to farmers and other businesses in this state at rates which are affordable is an immediate threat to the public peace, health and safety of the state. There is an immediate need to preserve the public peace, health and safety of the state by the issuance of bonds to raise sufficient funds to be deposited in financial institutions to permit such institutions to make loans to farmers and other businesses in order (i) to refinance outstanding loans which are or may become in default because of high rates of interest or the inabilities of farmers and other businesses to sustain profitable operations in view of the drastic downturn in agriculturally based economies, (ii) to enable farmers to purchase supplies from business enterprises to permit timely spring planting, (iii) to encourage, promote and develop alternative business and agricultural enterprises to employ workers from displaced farm families, (iv) to maintain and promote a level of economic activity within the state so that the revenues which support the state and its public institutions are not diminished;
(7) The foregoing conditions such as unemployment, displacement of farm families, loss of health and other employment benefits, use of out-dated, unsafe, inefficient or defective agricultural equipment and the like pose an immediate threat to the public peace, health and safety of the state and its people; and
(8) This chapter is also in support of the state government and its existing public institutions because it expands, supplements and implements this state's prior activities and programs which have been undertaken to loan and extend credit to the people of the state for similar purposes.Source:
SL 1986, ch 16, § 3; SL 1986, ch 17, § 2.
1-16E-3. Definition of terms. Terms used in this chapter mean:
(1) "Agricultural enterprise," the acquisition, construction, reconstruction, rehabilitation, or improvement of land, buildings, improvements thereto or personal property, which land, buildings, improvements, or personal property are located within the State of South Dakota and are necessary or suitable for use in farming, ranching, or the production of agricultural commodities or necessary or suitable for treating, processing, storing, or transporting raw agricultural commodities;
(2) "Authority," the Value Added Finance Authority created pursuant to this chapter;
(2A) "Beginning farmer," an individual or partnership with a low or moderate net worth that engages in or wishes to engage in farming or ranching;
(3) "Board," the board of directors of the authority;
(4) "Bonds," bonds, notes and certificates, and bond, grant, or revenue anticipation notes or any other evidence of indebtedness representing an obligation to pay money;
(5) "Business enterprise," a work or improvement located within the State of South Dakota including, but not limited to, real property, buildings, equipment, furnishings and, any other real and personal property or any interest therein, financed, refinanced, acquired, owned, constructed, reconstructed, extended, rehabilitated, improved, or equipped, directly or indirectly, in whole or in part, by the authority or through loans made by it and which is designed and intended for the purpose of providing facilities for manufacturing, industrial, processing, warehousing, commercial (including wholesale or retail trade), recreational, hotel, office, research, business (whether or not for profit), or other related purposes, including, but not limited to, machinery and equipment deemed necessary or desirable for the operation thereof;
(a) The cost of construction;
(b) The cost of acquisition of property, including rights in land and other property, both real and personal and improved and unimproved;
(c) The cost of demolishing, removing, or relocating any buildings or structures on lands so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved or relocated;
(d) The cost of all machinery, equipment and personal property, financing charges, interest prior to and during construction, and, if deemed advisable by the authority, for a period not exceeding one year after completion of construction, the cost of engineering and architectural surveys, plans and specifications; and
(e) The cost of consultant and legal services, other expenses necessary or incident to determining the feasibility or practicability of construction and administrative and other expenses necessary or incident to construction and the financing of construction;
(7) "Lender," any federal or state chartered bank, insurance company, credit union, mortgage loan company, federal land bank, production credit association, bank for cooperatives, federal or state chartered savings and loan association or building and loan association, small business investment company, or any other institution or association qualified within this state to originate and service loans;
(8) "Working capital needs of business," the requirements of any manufacturing, industrial, processing, warehousing, commercial (including wholesale or retail trade), recreational, hotel, office, research, farming, or ranching enterprise located in the State of South Dakota or enterprise located in the State of South Dakota engaged in the production of agricultural commodities to finance cash flow, inventory, receivables or other current assets or to finance the cost of operating expenses of such enterprise or any combination of the foregoing.
SL 1986, ch 16, § 4; SL 1995, ch 4, § 3; SL 1997, ch 5, § 1.
1-16E-4. Creation of authority. There is created the Value Added Finance Authority, with such powers and duties as are hereinafter provided.
Source: SL 1986, ch 16, § 5; SL 1995, ch 4, § 2.
1-16E-4.1. Membership of board of directors--Terms of office. The Board of Directors of the Value Added Finance Authority consists of seven members appointed by the Governor. No more than four members may be of the same political party. A member appointed to fill a vacancy occurring other than by expiration of a term is appointed for the remainder of the unexpired term.
The terms of members begin on October thirty-first of the calendar year in which the Governor appoints the member, unless otherwise designated by the Governor. The appointee's term expires on October thirtieth in the third year of appointment.
Any member's term ending June 30, 2013, or thereafter is extended to October thirtieth in the year the term is to expire.
Source: SL 1994, ch 318, § 2; SL 1995, ch 4, § 4; SL 2012, ch 16, § 21; SL 2013, ch 176, § 14.
1-16E-4.2. Duties and goal of Board of Directors of the Value Added Finance Authority. The board shall administer the beginning farmer bond program and make annual recommendations to the Legislature and Governor on programs to develop and promote agricultural processing activity in South Dakota, including the initial or subsequent production, use, or processing of any form of agricultural commodity, product, or by-product in this state. The authority's goal is to facilitate the retention of agricultural commodities and products in this state for the maximum feasible time span during the life cycle, use, or consumption of the commodity or product.
Source: SL 1994, ch 318, § 1, as amended by SL 1995, ch 4, § 5.
1-16E-4.3. Election of members of Board of Directors of Value Added Finance Authority. The authority shall annually elect from its members any officers it deems advisable. A majority of the members constitutes a quorum. The board shall meet at the call of the chair or a majority of the members but shall meet at least twice annually.
Source: SL 1994, ch 318, § 3, as amended by SL 1995, ch 4, § 6.
1-16E-4.4. Compensation of members of Board of Directors of Value Added Finance Authority. Members of the authority may receive no compensation for their services but may receive an allowance per day for the time spent in attending and traveling to and from meetings of the commission, and expenses and travel allowance pursuant to § 3-9-2.
Source: SL 1994, ch 318, § 4, as amended by SL 1995, ch 4, § 7.
1-16E-5, 1-16E-6. Obsolete.
1-16E-7. Powers of authority. The authority may:
(1) Have perpetual succession as a body politic and corporate exercising essential public functions;
(2) Adopt, amend and repeal bylaws, rules and regulations not inconsistent with this chapter, regulate its affairs, carry into effect the powers and purposes of the authority and conduct its business;
(3) Sue and be sued in its own name;
(4) Have an official seal and alter it at will;
(5) Maintain an office at such place or places within the state as it may designate;
(6) Make and execute contracts and all other instruments necessary or convenient for the performance of its duties and the exercise of its powers and functions under this chapter;
(7) Employ fiscal consultants, engineers, attorneys, and such other consultants and employees as may be required and contract with the South Dakota Department of Agriculture to provide staff and support services;
(8) Procure insurance against any loss in connection with the property and other assets, including loans and loan notes in such amounts and from such insurers as it may deem advisable;
(9) Borrow money and issue bonds as provided by this chapter;
(10) Procure insurance, letters of credit, guarantees, or other credit enhancement arrangements from any public or private entities, including any department, agency, or instrumentality of the United States, for payment of all or any portion of any bonds issued by the authority, including the power to pay premiums, fees, or other charges on any such insurance, letters of credit, guarantees, or credit arrangements;
(11) Receive and accept from any source aid or contributions of moneys, property, labor, or other things of value to be held, used and applied to carry out the purposes of this chapter subject to the conditions upon which the grants or contributions are made, including, but not limited to, gifts or grants from any department, agency, or instrumentality of the United States for any purpose consistent with the provisions of this chapter;
(12) Enter into agreements with any department, agency, or instrumentality of the United States or this state and with lenders or others and enter into loan agreements, sales contracts and leases or other financing arrangements with a beginning farmer or other contracting parties in connection with the beginning farmer bond program or for the purpose of planning, regulating, and providing for the financing or refinancing of any agricultural and business enterprises or financing or refinancing the working capital needs of businesses;
(13) Enter into contracts or agreements with lenders for the servicing and processing of loans or with any person or entity providing credit enhancement for the bonds of the authority;
(14) Provide technical assistance to local public bodies and to profit and nonprofit entities in the development or operation of agricultural and business enterprises and distribute data and information concerning the encouragement and improvement of agricultural and business enterprises;
(15) To the extent permitted under its contract with the holders of bonds of the authority, consent to any modification with respect to the rate of interest, time, and payment of any installment of principal or interest, or any other term of any contract, loan, loan note, loan note commitment, contract, lease, or agreement of any kind to which the authority is a party;
(16) To the extent permitted under its contract with the holders of bonds of the authority, enter into contracts with any lender containing provisions enabling it to reduce the rental or carrying charges to persons unable to pay the regular schedule or charges when, by reason of other income or payment by any department, agency, or instrumentality of the United States or of this state, the reduction can be made without jeopardizing the economic stability of the agricultural or business enterprise being financed;
(17) Invest proceeds of any bonds not needed for immediate disbursement in any investment permitted under § 1-16E-16;
(18) Collect fees and charges, as the authority determines to be reasonable, in connection with its loans, advances, insurance, commitments, servicing, and other activities;
(19) Cooperate with and exchange services, personnel and information with any federal, state, or local governmental agency;
(20) Sell, at public or private sale, with or without public bidding, any loan or other obligation held by the authority;
(21) Foreclose any mortgages, deeds of trust, notes, debentures, bonds, and other security interests held by it, either by action or by exercise of a power of sale, and to sell the equity of redemption in said security interests in accordance with the terms of said instruments and applicable state law, and to take all other actions necessary to enforce any obligation held by it;
(22) Purchase the equity of redemption in any such mortgage, deed of trust, debenture, bond, or other security interest;
(23) Mortgage, pledge, assign, or grant security interests in any or all of its notes or other instruments, contract rights or other property, including, but without limitation to, any receipts from insurance on or guarantees of any of its notes or other instruments, as security for the payment of the principal of, premium, if any, and interest on any bonds issued by the authority, or as security for any credit enhancement or other agreements made in connection therewith, whether then owned or thereafter acquired, and to pledge the revenues from which said bonds are payable and any other available revenues or assets as security for the payment of the principal of, premium, if any, and interest on said bonds and any agreements made in connection therewith;
(24) Enter into agreements for management on behalf of the authority of any of its properties upon such terms and conditions as may be mutually agreeable;
(25) Sell, exchange, donate, and convey any or all of its properties whenever the authority shall find such action to be in furtherance of the purposes for which the corporation was organized;
(26) Do any act and execute any instrument which in the authority's judgment is necessary or convenient to the exercise of the powers granted by this chapter or reasonably implied from it;
(27) Assign the loans or security documents or other instruments to bondholders as security without recourse; and
(28) Acquire, hold, and dispose of real and personal property for its purposes.Source:
SL 1986, ch 16, § 8; SL 1986, ch 17, § 3; SL 1994, ch 13; SL 1995, ch 4, § 10.
1-16E-8. Lending power of authority. The authority may:
(1) Make, and undertake commitments to make, loans or deposits with lenders including certificates of deposits, under terms and conditions which shall require such lenders to make loans (in an amount substantially equal to the principal amount of the loan or deposit) to or enter into leases with borrowers to finance the costs of agricultural enterprises, to finance the cost of business enterprises, to finance the working capital needs of businesses, to refinance existing indebtedness incurred for any of the foregoing purposes or any combination of the foregoing;
(2) Invest in, purchase or make commitments to invest in or purchase, and take assignments of, loans made by lenders to borrowers to finance the costs of agricultural enterprises, to finance the cost of business enterprises, to finance the working capital needs of businesses, to refinance existing indebtedness incurred for any of the foregoing purposes or any combination of the foregoing;
(3) Invest in, purchase or make commitments to invest in or purchase, any securities or obligations deemed necessary or desirable by the authority for the purpose of pledging such securities or obligations as security for any bonds of the authority;
(4) Make loans directly to a beginning farmer and enter into agreements, contracts, and other instruments with a beginning farmer or lender in connection with the beginning farmer bond program.Source:
SL 1986, ch 16, § 9; SL 1986, ch 17, § 4; SL 1990, ch 11, § 7; SL 1995, ch 4, § 9.
1-16E-9. Borrowing power of authority. The authority may:
(1) Borrow funds and issue its bonds from time to time and in such principal amounts as the authority deems necessary to carry out its purposes under this chapter, including, but not limited to, the exercise of its powers under § 1-16E-8, the payment of interest on its bonds, the establishment of reserves to secure the bonds, and payment of other expenses necessary, convenient and incident to fulfillment of its purposes;
(2) Issue from time to time bonds to renew or to pay bonds, including the interest or premium thereon, and whenever it deems refunding expedient, to refund any bonds and to pay costs of issuance of such refunding bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund outstanding bonds and partly for any other of its corporate purposes. The refunding bonds may be sold and the proceeds applied to the purchase, redemption, or payment of the bonds to be refunded, or exchanged for the bonds to be refunded.Source:
SL 1986, ch 16, § 10.
1-16E-10. Security for authority bonds. Bonds issued pursuant to this chapter are special obligations of the authority, payable solely out of, and secured by a pledge of, the assets, revenues, and other receipts designated in the resolution of the authority or instrument under which the bonds are issued. The bonds may be additionally secured by a pledge of any grant, contribution, or guarantee from the federal government or agency thereof or any corporation, association, institution or person or a pledge of any money, income, or revenue of the authority from any source.
Source: SL 1986, ch 16, § 11; SL 1990, ch 11, § 2; SL 1995, ch 4, § 12.
1-16E-11. Authority bonds not state or subdivision obligation. Obligations issued under the provisions of this chapter may not be deemed to constitute a debt, liability, or obligation of the state or of any other political subdivision thereof, nor a pledge of the full faith and credit of the state or any other political subdivision, but shall be payable solely as provided in § 1-16E-10. Each obligation issued under this chapter shall contain on the face thereof a statement to the effect that neither the full faith and credit, nor the taxing power of the state, or of any political subdivision thereof is pledged to the payment of the principal of or the interest on such obligation. All obligations of the authority issued under the provisions of this chapter shall be authority bonds or notes and may not be general obligations of the State of South Dakota.
Source: SL 1986, ch 16, § 12; SL 1990, ch 11, § 3.
1-16E-12. Bond authorization, terms, and sale--Interest rate--Noninterest bearing bonds. The bonds shall be authorized by a resolution of the authority, shall bear such date or dates and shall mature at such time or times as the resolution or the instrument providing for the issuance of such bonds may provide, except that no bond may mature more than fifty years from the date of its issue. The bonds shall bear interest at such rate or rates, be in such denominations, be in such form, either coupon or registered, be evidenced by physical certificates or uncertificated, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, including redemption prior to maturity, as such resolution or the instrument providing for the issuance of such bonds may provide. No other state laws relating to the offer, sale or issuance of revenue bonds or any other security may apply to bonds issued by the authority. Bonds of the authority may be sold by the authority at public or private sale, and at such price or prices as the authority shall determine.
The bonds of the authority may bear interest at a fixed, variable or adjustable rate (and may be convertible from one method of calculating interest to another) and such interest rate may be based upon any formula or contractual arrangement for the periodic determination of interest rates, all as may be established in the resolution or instrument providing for the issuance of such bonds. Any such formula or contractual arrangement may authorize the delegation of the interest rate setting function to a third party subject only to such standards or criteria as shall be set forth in the resolution or instrument providing for the issuance of such bonds. In no event may the setting or resetting of the rate of interest on the authority's bonds or the conversion from one method of determining interest to another constitute a reissuance or refunding of bonds issued by the authority if such action is taken in accordance with the resolution or instrument providing for the initial issuance of such bonds.
The authority may issue noninterest bearing bonds or bonds bearing interest at a rate of zero percent and sell the same at such price or prices as may be determined by the authority.
Source: SL 1986, ch 16, § 13; SL 1986, ch 17, § 5; SL 1990, ch 11, § 1.
1-16E-13. Pledges by authority. Any pledge made by the authority shall be valid and binding from the time when the pledge is made. The revenue, money, or properties so pledged and thereafter received by or on behalf of the authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether the parties have notice thereof. Neither the resolution nor the trust indenture, if any, nor any other instrument by which a pledge is created need be recorded.
Source: SL 1986, ch 16, § 14.
1-16E-14. Redemption of bonds. The authority, subject to such agreements with bondholders as may then exist, may purchase and cancel its bonds out of any funds available therefor, at any reasonable price which, if the bonds are then redeemable, may not exceed the redemption price then applicable plus accrued interest to the next interest payment thereon.
Source: SL 1986, ch 16, § 15.
1-16E-15. Trust indenture securing authority bonds. The bonds may be secured by a trust indenture by and between the authority and a corporate trustee which may be any bank having the power of a trust company or any trust company within or without the state. Such trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the authority in relation to the exercise of its powers and the custody, safekeeping, and application of all money. The authority may provide by the trust indenture for the payment of the proceeds of the bonds and the revenue to the trustee under the trust indenture or other depository, and for the method of disbursement thereof, with such safeguards and restrictions as the authority may determine. All expenses incurred in carrying out the trust indenture may be treated as a part of the operating expenses of the authority.
Source: SL 1986, ch 16, § 16.
1-16E-16. Proceeds of bonds--Investments. Any proceeds of bonds not needed for immediate disbursement may be held uninvested or invested in any one or more of the following:
(1) Obligations issued or guaranteed by the United States of America;
(2) Obligations issued or guaranteed by any person controlled or supervised by and acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States of America;
(3) Obligations issued or guaranteed by any state of the United States of America, or the District of Columbia, or any political subdivision of any such state or district;
(4) Commercial paper or corporate debt obligations having a rating by Standard & Poor's Corporation or Moody's Investors Service equal to an "A" or higher rating assigned by such organization;
(5) Banker's acceptances drawn on and accepted by any bank, trust company or national banking association organized under the laws of any state or of the United States of America;
(6) Repurchase agreements fully secured by obligations issued or guaranteed by the United States of America or by any person controlled or supervised by and acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States of America;
(7) Certificates of deposit or time deposits issued by any bank, trust company or national banking association organized under the laws of any state or of the United States of America;
(8) United States dollar-denominated certificates of deposits issued by, or time deposits with, the European subsidiaries of any bank, trust company or national banking association incorporated or doing business under the laws of the United States of America or one of the states thereof;
(9) Certificates or units issued by any mutual fund, unit investment trust or similar entity evidencing interest in obligations described above.Source:
SL 1986, ch 16, § 17; SL 1990, ch 11, § 6.
1-16E-17. Bonds as negotiable instruments. Whether or not the bonds are in the form and character of negotiable instruments, such bonds are hereby made negotiable instruments, subject only to provisions of the bonds relating to registration.
Source: SL 1986, ch 16, § 18.
1-16E-18. Execution of bonds--Seal. Bonds of the authority may be executed by the manual or facsimile signatures of the board members or officers of the authority authorized by the resolution of the authority to execute such bonds. If such resolution authorizes or directs the affixing of the seal of the authority on bonds of the authority, such seal or a facsimile thereof may be impressed or imprinted thereon. In the event that any board members or officers of the authority shall cease to be members or officers of the authority prior to the delivery of any bonds or coupons signed by them, their signatures or facsimiles thereof shall nevertheless be valid and sufficient for all purposes, the same as if such members or officers had remained in office until such delivery.
Source: SL 1986, ch 16, § 19.
1-16E-19. Immunity from personal liability on bonds. Neither the members of the authority nor any other person executing the bonds issued under this chapter is subject to personal liability or accountability by reason of the issuance thereof.
Source: SL 1986, ch 16, § 20.
1-16E-20. State pledge not to alter rights of authority to detriment of its bondholders. The state does hereby pledge to and agree with the holder of any bonds issued under this chapter that the state will not limit or alter the rights vested in the authority to fulfill the terms of any agreements made with the holders thereof or in any way impair the rights or remedies of the holders until the bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders, are fully met and discharged. The authority may include this pledge and agreement of the state in any agreement with the holders of the bonds.
Source: SL 1986, ch 16, § 21.
1-16E-21. Conflict of interest--Disclosure--Participation in transaction. Any member or employee of the authority who has, will have, or later acquires a personal interest, direct or indirect, in any transaction with the authority shall immediately disclose the nature and extent of such interest in writing to the authority as soon as he has knowledge of such actual or prospective interest. Such disclosure shall be entered upon the minutes of the authority. Upon such disclosure such member or employee may not participate in any action by the authority authorizing such transaction. Actions taken when such member or employee reasonably believed that he had and would not have any conflict are not invalidated because of such conflict. The fact that a member is also an officer or owner of an organization is not deemed to be a direct or indirect interest unless:
(1) Such member has an ownership interest of greater than five percent in such organization; or
(2) The transaction in question does not involve all similar organizations, but rather involves only the authority and such organization.Source:
SL 1986, ch 16, § 22.
1-16E-22. Tax exemption--Filing fee exemption. The exercise of the powers granted by this chapter shall be in all respects for the benefit of the people of the state. The authority is not required to pay any tax or assessment on any property owned by the authority under the provisions of this chapter or upon the income therefrom; nor is the authority required to pay any transfer tax of any kind on account of instruments recorded by it or on its behalf.
Source: SL 1986, ch 16, § 23; SL 2002, ch 13, § 1.
1-16E-23. Bonds as authorized investments and securities for deposits. The bonds and notes of the authority are hereby made securities in which all public officers and bodies of this state and all municipal subdivisions, all insurance companies and associations and other persons carrying on insurance business, all banks, bankers, trust companies, including savings and loan associations, building and loan associations, investment banking companies, and other persons carrying on an investment banking business, all personal representatives, conservators, trustees, and other fiduciaries, and all other persons who are now or may hereafter be authorized to invest in bonds or obligations of the state, may properly and legally invest in the bonds and notes of the authority funds including capital in their own control or belonging to them. The bonds and notes are also hereby made securities which may be deposited with and may be received by all public officers and bodies of this state and all municipalities and municipal subdivisions for any purpose for which the deposit of bonds or notes or other obligations of this state is now or may hereafter be authorized.
Source: SL 1986, ch 16, § 24; SL 1993, ch 213, § 77.
1-16E-24. Rules and regulations of authority. The authority may, pursuant to chapter 1-26, adopt such rules or regulations as it deems necessary or desirable to implement the purposes of this chapter, including, but not limited to:
(1) Setting forth the procedures for applicants to apply for loans under this chapter;
(2) Establishing criteria for determining which applicants will receive such loans;
(3) Governing the use of proceeds of such loans;
(4) Establishing criteria for the terms and conditions upon which such loans shall be made, including the terms of security given, if any, to secure such loans;
(5) Governing the use of proceeds by lenders of funds advanced to such lenders by the authority including the terms and conditions upon which such proceeds shall be loaned to borrowers for the purposes described in this chapter.Source:
SL 1986, ch 16, § 25.
1-16E-25. Construction with other laws. Insofar as the provisions of this chapter are inconsistent with the provisions of any other law, the provisions of this chapter shall be controlling.
Source: SL 1986, ch 16, § 26.
1-16E-26. Liberal construction of chapter. This chapter, being necessary for the welfare of the state and its inhabitants, shall be liberally construed so as to effectuate its purposes.
Source: SL 1986, ch 16, § 27.
1-16E-27. Disposition of authority assets on dissolution. If, after all indebtedness and other obligations of the authority are discharged, the authority is dissolved, its remaining assets shall inure to the benefit of the state.
Source: SL 1986, ch 16, § 28.
1-16E-28. Report to Governor and Legislature. The authority shall submit to the Governor and the Legislature within ninety days of the close of its fiscal year a complete and detailed report setting forth:
(1) Its operations and accomplishments;
(2) Its receipts and expenditures during such fiscal year in accordance with the categories or classifications established by the authority for its operating and capital outlay purposes;
(3) Its assets and liabilities at the end of its fiscal year, including a schedule of its loans and commitments and the status of reserve, special or other funds; and
(4) A schedule of its notes and bonds outstanding at the end of its fiscal year, together with a statement of the amounts redeemed and incurred during such fiscal year.Source:
SL 1986, ch 16, § 29.
1-16E-29. Cost of establishing a development project defined. "Cost of establishing a development project," as used in this chapter unless the context otherwise plainly requires, means any or all of the following:
(1) The cost of construction including heating, air conditioning, lighting, and plumbing;
(2) The cost of all lands, property, rights, easements, and franchises acquired, which are deemed necessary for such construction;
(3) Financing charges, interest prior to and during construction and the cost of engineering and legal expense, plans, specifications, and surveys;
(4) Estimates of costs and other expenses necessary or incident to determining the feasibility or practicability of any development project together with such other expenses as may be necessary or incident to the financing and construction of the development project and the placing of the same in operation;
(5) The cost of acquisition and installation of machinery, equipment, and other tangible personal property.Source:
SL 1990, ch 11, § 4.
1-16E-30. Compliance with Internal Revenue Code. Notwithstanding any provision under the laws of the State of South Dakota, the authority in order to accomplish the purposes provided in this section and chapter 1-16E may perform all acts necessary to comply with the requirements of § 103 of the Internal Revenue Code of 1986, as amended, and any regulation promulgated pursuant to § 103 to insure that all interest from bonds issued under this chapter are tax exempt.
All hearings or acts necessary to comply with § 147(f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated pursuant to § 147(f) are exempt from the requirements and procedures of chapter 1-26.
The Governor is the approving representative for the state for the purpose of complying with the applicable provisions of § 147(f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated pursuant to § 147(f) necessary to insure that all interest from bonds issued are tax exempt.
Source: SL 1995, ch 4, § 11.
1-16E-31. Confidentiality of borrower information. All financial information submitted by the borrower to the board is confidential.
Source: SL 1995, ch 4, § 13.
1-16E-32. Authority may contract to manage payment or interest rate risk for bonds. The authority may enter into any contract that the authority determines necessary or appropriate to manage payment or interest rate risk for bonds issued pursuant to this chapter, the investment of proceeds, or other funds of the authority. The contracts may include: interest rate exchange agreements; contracts providing for payment or receipt of funds based on levels of or changes in interest rates; contracts to exchange cash flows or series of payments; or contracts incorporating interest rate caps, collars, floors, or locks.
Source: SL 2003, ch 10, § 3.