Section

          24:59:04:01.  Application for new bonds for lease purchase agreements. An application for a new bond for lease purchase agreement for the postsecondary technical institutes must be submitted to the executive director of the Board of Technical Education. The executive director shall convene a meeting of designated representatives of the technical institutes and a representative of the Department of Executive Management referenced in SDCL Chapter 1-33. Postsecondary technical institutes with new bonds for lease purchase agreement proposals shall present their rationale for issuance. The executive director shall review the rationale presented and make a recommendation to the South Dakota Board of Technical Education on all applications which were submitted as to which projects should be considered for approval or disapproval. All proposals for projects must go through this process before they may be considered by the South Dakota Board of Technical Education at its next regularly scheduled meeting.

 

          Source: 40 SDR 40, effective September 11, 2013; Readopted from § 24:10:46:01, 44 SDR 184, effective June 25, 2018.

          General Authority: SDCL 1-16A-94, 13-39A-24.

          Law Implemented: SDCL 1-16A-93, 13-39A-24, 13-39A-25, 13-39A-26.

 

          24:59:04:02.  Approval of new bonds for lease purchase agreements. The South Dakota Board of Technical Education shall propose the adoption of a resolution for new facility bonds for lease purchase agreements if it considers it necessary and feasible based upon need and capacity for additional bonding. Items that the Board of Technical Education may consider in its deliberations are:

 

          (1)  Identification and description of the purpose of the proposed bonds;

 

          (2)  Availability of local;regional, and other outside support of the project;

 

          (3)  Industry support for the postsecondary technical institute and the program or programs it is expanding as part of the project;

 

          (4)  Projected five-year enrollment growth at the postsecondary technical institute due to the project;

 

          (5)  The estimated increase in state fees charged to students needed for debt coverage;

 

          (6)  Ratio of state fees charged to students for bonding projects to total tuition and fees;

 

          (7)  Physical capacity constraints of current facilities;

 

          (8)  Historical enrollment growth of postsecondary technical institute, particularly as it relates to past expansions;

 

          (9)  Anticipated demand for new and expanded curriculum;

 

          (10)  Information on how South Dakota postsecondary technical institutes total tuition and fees, state appropriation, and local taxing authority appropriation compare to those of other regional two-year colleges and technical institutes;

 

          (11)  Graduate placement rates of the postsecondary technical institute considering construction;

 

          (12)  Debt term length and payment structure of all existing bonds and new bonds being considered;

 

          (13)  Debt coverage ratio of all existing bonds and new bonds being considered;

 

          (14)  The term of bond compared to the average useful life of the asset or assets; and

 

          (15)  Capital expenditures of each postsecondary technical institute over the past ten years.

 

          New bonds for lease purchase agreements for postsecondary technical institutes must receive approval by adoption of a resolution from the Board of Technical Education and must be approved by the Legislature before being issued.

 

          Source: 40 SDR 40, effective September 11, 2013; Readopted from § 24:10:46:02, 44 SDR 184, effective June 25, 2018.

          General Authority: SDCL 1-16A-94, 13-39A-24.

          Law Implemented: SDCL 1-16A-93, 1-16A-95, 13-39A-24, 13-39A-25, 13-39A-26.

 

          24:59:04:03.  Bond amount limited by pledged revenues. The Board of Technical Education may not approve any revenue bonds for new projects that, when combined with the debt service on outstanding bonds, provide for a coverage ratio less than one hundred and three percent (103%) coverage for the estimated receipts, rentals, and other payments, including appropriations by the Legislature, student fee payments, or other balances or revenues pledged under the applicable bond indenture.

 

          Source: 40 SDR 40, effective September 11, 2013; Readopted from § 24:10:46:03, 44 SDR 184, effective June 25, 2018.

          General Authority: SDCL 13-39A-24.

          Law Implemented: SDCL 13-39A-24, 13-39A-25, 13-39A-26.

 

          24:59:04:04.  Projection of contribution from state fees charged to students. For purposes of forecasting anticipated contributions from student tuition and state fees charged to students for bonding projects, the following calculations shall be used:

 

          (1)  Calculate the estimated amount of revenue needed to be raised from state fees charged to students for debt service for the next five fiscal years;

 

          (2)  Estimate the number of full-time equivalent students for the current fiscal year and the subsequent five fiscal years;

 

          (3)  Determine the estimated contributions from student tuition and fees for the next five fiscal years as follows:

 

               (a)  For each fiscal year, multiply the results of subdivision (2) above by 30 credit hours;

               (b)  Divide the result of subdivision (1) by the result of subdivision (3)(a) and round up to the nearest whole dollar to calculate the estimated state fees charged to students per credit hour needed for debt service coverage; and

               (c)  Multiply the results of subsections (a) and (b) above for each fiscal year to calculate the estimated amount of state fees charged to students pledged for each fiscal year.

 

          Source: 40 SDR 40, effective September 11, 2013; Readopted from § 24:10:46:04, 44 SDR 184, effective June 25, 2018.

          General Authority: SDCL 1-16A-94, 13-39A-24.

          Law Implemented: SDCL 1-16A-43, 1-16A-93, 13-39A-24, 13-39A-25, 13-39A-26.

 

          24:59:04:05.  Maturity term of bonds issued. When considering approval of new bonds for lease purchase agreement, the Board of Technical Education may set a target maturity term of thirty years. The amortization cannot exceed one hundred and twenty percent (120%) of the weighted average useful life of the asset.

 

          Source: 40 SDR 40, effective September 11, 2013; Readopted from § 24:10:46:05, 44 SDR 184, effective June 25, 2018.

          General Authority: SDCL 1-16A-94, 13-39A-24.

          Law Implemented: SDCL 1-16A-39, 1-16A-43, 1-16A-93, 13-39A-24, 13-39A-25, 13-39A-26.