HB 1279 establish the South Dakota Municipal Facilities...
ENTITLED, An Act to
establish the South Dakota Municipal Facilities Authority, to provide for the
establishment of one or more special purpose corporations by the South Dakota Municipal
Facilities Authority, to establish the powers of the South Dakota Municipal Facilities Authority
and each such corporation, including the power to acquire, own, lease, sublease and dispose of
certain land, improvements and capital equipment comprising all or a portion of any municipal
facilities, including any system or part of a system of waterworks, sewage or waste disposal, and
to establish or confirm the powers and liabilities of the state, the Department of Environment and
Natural Resources, the Board of Water and Natural Resources, the South Dakota Conservancy
District and municipalities and other public entities of the state in connection therewith.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section
1.
Terms used in this Act mean:
(1) "Authority," the South Dakota Municipal Facilities Authority, a body corporate and
politic, created under section 2 of this Act;
(2) "Corporation," any special purpose body corporate and politic established by the authority
by resolution of the authority board as provided in section 6 of this Act;
(3) "Lease," when used with respect to municipal facilities, any lease, sublease, purchase
agreement, lease-purchase agreement, installment purchase agreement, lease-back
agreement or other contract, agreement, instrument, or arrangement pursuant to which any
rights, interests or property with respect to municipal facilities are transferred to, by or
from any party to, by or from one or more parties and any related documentation,
instruments or arrangements entered into or to be entered into in connection therewith or
ancillary thereto including, without limitation, support and operating agreements, service
agreements, indemnity agreements, participation agreements, loan agreements or payment
undertaking agreements;
(4) "Municipal facilities," all or any part of, or an undivided or other interest in, (a) any utility
property or (b) any other land, buildings, improvements or capital equipment, and any
property or other rights or interests ancillary or related to (a) or (b), whether owned or
used by or leased by, to or from, or to be owned, used or leased by, to or from a public
entity, or useful to or by a public entity;
(5) "Permitted investments," any investment authorized by
§
§
4-5-23 and 4-5-26 together with
(a) collateralized or noncollateralized obligations of, or any other payment undertaking,
deposit or other agreement of, any bank or savings institution, investment banking firm or
organization, financial institution, insurance company or bank or insurance holding
company (or any subsidiary or affiliate of any of the foregoing), whether organized under
the laws of the United States of America, any state or territory thereof, or the laws of any
foreign nation, if at the time such investments are acquired, the senior debt or claims
paying ability of such person or entity is rated in, or such person or entity has its
obligations in respect of such investments guaranteed or supported by a person or entity
the senior debt or claims paying ability of which is rated in, or whose obligations in respect
of such investments are secured by bonds, notes, or other financial obligations issued by
issuers rated in, the highest four basic rating classifications by at least one standard
domestic rating service, (b) any bonds, notes or other obligations of any state or territory
of the United States of America or any political subdivision thereof or any agency,
authority or other instrumentality of the United States of America or any state, territory
or political subdivision thereof, if at the time such investments are acquired such bonds,
notes or other obligations are rated in, or the obligations in respect of such investments are
guaranteed or supported by a person or entity the senior debt or claims paying ability of
which is rated in, the four highest basic rating classifications established by at least one
standard domestic rating service or (c) any bonds, notes or other obligation of the State
of South Dakota, Board of Water and Natural Resources, the South Dakota Conservancy
District, the authority, any corporation formed by the authority or any public body,
authority or instrumentality now or hereafter existing under the laws of the State of South
Dakota or any public entity;
(6) "Person," any natural person, firm, partnership, limited liability company, association,
corporation, nonprofit corporation, trust, grantor trust, business trust or public entity;
(7) "Public entity," any county, township, municipality, political or administrative subdivision
of state government, water project district, irrigation district, water user district, watershed
district, drainage district, soil conservation district, or other political subdivision or public
body, authority or instrumentality recognized by state law and shall expressly include the
authority and any corporation formed pursuant to this Act;
(8) "State," the State of South Dakota acting by and through the Department of Environment
and Natural Resources or any other department, agency or authority of the state
designated by the Governor;
(9) "Support and operating agreement," any contract, agreement or other arrangement
pursuant to which a party agrees with another party to make certain municipal facilities,
or rights with respect thereto or in connection therewith, available to such other party and
which agreement may provide for the imposition of fees, rates or charges for the use or
operation of or receipt of services from municipal facilities;
(10) "Utility," any system or part of a system of waterworks, or sewage and waste disposal
described in
§
9-40-1; and
(11) "Utility property," all or any part of any land, buildings, improvements or capital
equipment and any property or rights ancillary or related thereto comprising a utility,
including any extensions, additions, improvements or appurtenances to any such utility or
combination of systems and any interest in any of the foregoing, whether owned, leased
or used by, to or from the authority, any corporation formed by the authority, the state or
any other public entity, or useful to or by a public entity, including, without limitation, as
to which a public entity has arranged a service agreement.
Section
2.
There is created the South Dakota Municipal Facilities Authority, a body corporate
and politic, to consist of seven members appointed by the Governor. Not more than four of said seven
members of the authority shall be of the same political party. At least one of the members to be
appointed by the Governor shall be or shall have been an elected municipal official and at least one
of such appointed members shall be or shall have been experienced in and having a favorable
reputation for skill, knowledge, and experience in the field of municipal utility property. The terms
for the initial appointments shall be as follows: one member four years; two members three years; two
members two years; and two members one year. No person shall be appointed to the authority who
is an elected official of the State of South Dakota. One of the members shall be designated by the
Governor as chairman.
Section
3.
Following the expiration of the initial appointment, all subsequent appointments to the
authority shall be made for a four-year term. Each member's term of office shall expire on the
appropriate third Monday in January, but he or she shall continue to hold office until his or her
successor is appointed and qualified. Any vacancy in the authority shall be filled by appointment for
only the balance of the unexpired term. Four members of the authority shall constitute a quorum.
Section
4.
Each member shall, before entering upon the duties of his or her office, take and
subscribe the constitutional oath of office and give bond in the penal sum of twenty-five thousand
dollars conditioned upon the faithful performance of his or her duties. The oath and bond shall be filed
in the Office of the Secretary of State.
Section
5.
No member of such authority shall receive any compensation for services rendered
under this chapter. However, members shall be reimbursed for necessary expenses incurred in
connection with duties and powers prescribed by this Act.
Section
6.
In addition to all other powers hereunder, the authority shall have the power and
authority, by resolution of the authority board, to establish one or more special purpose corporations
each of which shall be a body corporate and politic and instrumentality of, but separate and apart
from, the State of South Dakota and the authority. Any such corporation shall be established for the
express limited public purposes set forth in this Act and no part of the net earnings of any such
corporation shall inure to any private individual.
Any such corporation shall be governed by a board of trustees consisting of the members of the
board of the authority together with two additional persons appointed by the Governor, which two
additional members shall be independent from the government of the state. The resolution establishing
the corporation shall serve as the charter of the corporation and may be amended from time to time
by resolution of the board, but such resolution shall at all times provide that the power and the
authority of the corporation shall be subject to the terms, conditions and limitations of this Act and
any applicable covenants or agreements of the corporation in any lease, indenture or other instrument,
contract or agreement then in effect. The authority may delegate to the corporation any power
granted to the authority under this Act, including the power to enter into contracts regarding any
matter connected with any corporate purpose of the authority or the corporation within the objects
and purposes of this Act.
The corporation shall not have the authority to file a voluntary petition under or be or become
a debtor or bankrupt under the federal bankruptcy code or any other federal or state bankruptcy,
insolvency or moratorium law or statute as may, from time to time, be in effect and neither any public
officer nor any organization, entity or other person shall authorize the corporation to be or become
a debtor or bankrupt under the federal bankruptcy code or any other federal or state bankruptcy,
insolvency or moratorium law or statute, as may, from time to time be in effect.
No such corporation shall have the authority to guarantee the debts of another.
No such corporation shall be required to file any reports with the state other than those specified
herein.
Except for debts incurred directly by the corporation, no lease or other contract, agreement,
instrument or obligation, issued, incurred or created by the State of South Dakota or any state agency
or instrumentality (other than such corporation) may be or become a lien, charge or liability against
the corporation or the property or funds of the corporation.
Section
7.
The purposes of the authority and any corporation formed by the authority are:
(1) To acquire, own, lease, sublease, sell, transfer or otherwise use, operate, obtain service
from or dispose of municipal facilities to, for or on behalf of, the state, any public entity
or other person;
(2) To make, acquire, dispose of or pledge loans in connection with any transactions involving
municipal facilities and to enter into deposit, payment undertaking or similar arrangements
in connection with such transactions;
(3) To serve the Legislature by making reports concerning the providing of such property and
facilities;
(4) To finance or refinance municipal facilities and to enter into transactions a purpose of
which is to raise capital or provide access to capital for or by public entities; and
(5) To invest, on its own behalf or on behalf of any party to any lease, any funds or any other
amounts in permitted investments.
Section
8.
The state, the authority or any corporation formed by the authority may take title to
or enter into any conveyance, lease or contract necessary or desirable in furtherance of the purposes
set forth in this Act, including, without limitation, to acquire, own, lease, sell, transfer or otherwise
use, operate or obtain services from or dispose of land or municipal facilities and any other
improvements made upon or under such land and capital equipment necessary or useful for the
operation of the municipal facilities to be acquired by it pursuant to this Act, including, without
limitation, lease, lease-purchase, and, subject to compliance with the provisions of South Dakota
Constitution, Art. XIII,
§
1, installment purchase contracts. Without limitation, the state, the authority
or any corporation formed by the authority may include in such conveyances, leases or contracts any
of the following provisions:
(1) In lease contracts, options to purchase the property subject to the lease or the lessor's
interest therein, and provisions for the deferred payment or prepayment by lessee to lessor
of rent, and provisions for designating a portion of the periodic payments to be made
thereunder as interest, net of all other costs and expenses of ownership, operation,
maintenance, and insurance of the leased property by the authority or any such corporation
as agent of the lessor; and
(2) In lease-purchase contracts or installment purchase contracts, provisions of the type
specified in subdivision (1), and provisions for designating a portion of the periodic
payments to be made thereunder as interest, for prepayment, and for acquisition of
unencumbered title or fee title to the property subject to the contract.
No term of a lease, lease-purchase or an installment purchase contract may exceed one hundred
years, and for such purpose, all renewal terms shall be included.
Section
9.
The state, the authority and each corporation formed by the authority shall have the
power and authority:
(1) To acquire and enter into leases of municipal facilities, support and operating agreements,
deposit agreements, payment undertaking agreements, service agreements and any and all
contracts, agreements or other instruments related or ancillary thereto, and to secure
payment or performance of obligations in connection therewith with any property, funds,
investments or rights of the state, the authority or any corporation;
(2) To pledge as security for any arrangement entered into with respect to municipal facilities
(i) any rights under any lease, support and operating agreement, deposit agreements,
payment undertaking agreements, service agreement or other contract, agreement or
instrument, (ii) any rights with respect to investment of monies, including permitted
investments and contracts related or ancillary thereto, (iii) moneys or other funds deposited
with, payable to or held by or on behalf of the authority or any corporation and (iv) the
proceeds of the foregoing. Any such pledge so made shall be valid and binding from the
time such pledge is made. The property, interests, revenues, moneys, other funds and
rights so pledged and thereafter held or received by or on behalf of the pledgor shall
immediately be subject to the lien of such pledge without any physical delivery thereof or
further act; and, subject only to the provisions of prior pledges or agreements of the
pledgor, the lien of such pledge shall be valid and binding as against the state, the
authority, any public entity and any corporation and all persons having claims of any kind
in tort, contract or otherwise against the state, the authority, any public entity or any
corporation irrespective or whether such persons have notice thereof. No ordinance,
resolution, trust agreement or other instrument by which such pledge is created need be
filed or recorded;
(3) To enter into one or more support and operating agreements, service agreements or other
arrangements to provide additional security, property or liquidity in connection with any
lease or other contract or arrangement relating to municipal facilities. Such arrangements
may include, without limitation, bond insurance, letters of credit and lines of credit;
(4) To enter into contracts necessary or appropriate to permit it to manage payment or interest
rate risk or credit risk in connection with any sale, lease or other contract, agreement,
instrument or arrangement relating to municipal facilities or the investment of funds of the
state, any public entity, the authority or any corporation in connection therewith. These
contracts may include, but are not limited to, 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; and contracts incorporating
interest rate caps, collars, floors, or locks;
(5) To purchase, acquire, own, operate, contract with other parties to operate, pledge, lease,
sublease, encumber, sell, mortgage or otherwise transfer any or all right, title and interest
in and to municipal facilities;
(6) To make loans in connection with any transactions involving municipal facilities or to enter
into deposit, payment undertaking or similar arrangements in connection with such
transactions;
(7) To raise funds through the sale, lease, transfer, pledge, encumbrance, mortgage or other
conveyance of the rights, interests, property or contracts described in this section; and
(8) To pool or cross-collateralize any leases, contracts or other agreements or assets in order
to secure any obligations, leases, contracts or other agreements or arrangements.
Section
10.
The authority and any corporation formed by the authority shall also have the power
and authority:
(1) To serve the Legislature by making reports concerning the foregoing;
(2) To sue and be sued and to prosecute and defend, at law or in equity, in any court having
jurisdiction of the subject matter and of the parties;
(3) To have and to use a corporate seal and to alter the same at pleasure;
(4) To maintain an office at such place or places as the authority or the board of trustees of
the corporation by resolution may designate;
(5) To receive and invest in permitted investments any funds transferred to it by the authority,
any corporation, the State of South Dakota, any public entity or any other person;
(6) To receive deposits or prepayments and to establish, fund and apply any reserve accounts
or funds for any purpose;
(7) To establish, assess, levy and collect, or cause to be established, assessed, levied and
collected, fees, rates and charges for the use of utility property or other municipal facilities
which are subject to a lease authorized hereunder or which are otherwise owned, leased
or controlled by the state, corporation, the authority, any public entity or other person
pursuant to a transaction authorized hereby;
(8) To employ attorneys, accountants, engineers, consultants and financial experts, managers,
advisors and such other employees and agents as may be necessary in its judgment and to
fix their compensation;
(9) 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 Act;
(10) Contract with the South Dakota Building Authority to provide staff and support services;
(11) 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
available;
(12) 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 obligations of the authority
or corporation, including the power to pay premiums, fees or other charges on any such
insurance, letters of credit, guarantees, or credit arrangements;
(13) 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;
(14) Enter into agreements with any department, agency, or instrumentality of the United
States, any public entity of this state and with lenders or others and enter into loan
agreements, sales contracts and leases, or other financing arrangements with contracting
parties for the purpose of planning, regulating and providing for the financing or
refinancing of any municipal facilities;
(15) Enter into contracts or agreements for the operation, use, maintenance or improvement
of municipal facilities;
(16) Cooperate with and exchange services, personnel and information with any federal, state,
or local governmental agency or public entity;
(17) Enter into agreements for management by or on behalf of the State of South Dakota, the
authority or any corporation of any municipal facilities upon such terms and conditions as
may be mutually agreeable;
(18) Sell, exchange, donate, and convey any or all of its properties whenever the board of the
authority or any corporation shall find such action to be in furtherance of the purposes for
which the authority or corporation was organized;
(19) To establish bank accounts and securities accounts, or have such accounts established on
its behalf at any trust, banking or financial institution;
(20) 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;
(21) Promulgate rules pursuant to chapter 1-26 to implement the provisions of this chapter;
(22) To do all things necessary and convenient to carry out the purposes of this chapter.
To accomplish projects of the kind listed in this Act, the authority and any corporation formed
by the authority may convey property, without charge, to the State of South Dakota or any public
entity, if all obligations which have been secured by the property have been paid or payment has been
duly provided for.
Section
11.
No obligation of any corporation formed by the authority under any lease, support
and operating agreement or other contract or agreement may be or become a lien, charge or liability
against the State of South Dakota or the authority within the meaning of the Constitution or statutes
of South Dakota. No instrument of conveyance, lease or other contract or other agreement entered
into by the state, the authority or any corporation formed by the authority, relating to municipal
facilities shall be a debt of the state or the authority within the meaning of the constitution or statutes
of the State of South Dakota, and this Act shall not be construed as a guarantee by the state or the
authority of the obligations of the corporation or any other person. Nothing in this chapter shall be
construed to authorize the authority, any corporation formed by the authority, or any department,
board, commission, or other agency to create an obligation of the State of South Dakota within the
meaning of the constitution or statutes of South Dakota.
Section
12.
The State of South Dakota pledges to and agrees with any party to any sale, lease,
or other contract, agreement, instrument or other arrangement created under this Act that the state
will not limit or alter the rights and powers vested in the authority, any corporation formed by the
authority or other public entity by this Act so as to impair the terms of any such contract made by the
state, the authority, any such corporation or other public entity with such party or in any way impair
the rights and remedies of such party until such contract is satisfied. The authority, any such
corporation and any public entity is each authorized to include their pledges and agreements of the
state in any such contract created under this Act.
Section
13.
The authority and any corporation formed by the authority are hereby declared to be
performing a public function on behalf of the state and to be a public instrumentality of the state. The
income of the authority and any corporation, and all municipal facilities and any other property at any
time owned by the authority or any corporation, and the acquisition, sale, transfer, lease or purchase
of municipal facilities by or from the state, the authority or any corporation or any public entity, and
the pledge of any right, title or interest in any municipal facilities by any person, shall be exempt from
all taxation in the State of South Dakota. Each corporation shall be exempt from all filing, reporting
and similar requirements otherwise applicable to nonprofit and other corporations.
Section
14.
To accomplish the purposes or projects of the kind listed in this Act, the authority or
any corporation may adopt all necessary bylaws, rules, and regulations for the conduct of the business
and affairs of the authority, and for the management and use of municipal facilities acquired under the
powers granted by this Act.
Section
15.
Any public entity and any department, board, commission, agency, or officer of this
state may sell, lease or otherwise transfer jurisdiction of or title to or any interest in any property
under its or his or her control to the authority or any corporation formed by the authority hereunder.
Section
16.
The state, the authority and any corporation formed by the authority may each acquire
by purchase, condemnation (including the power of condemnation in accordance with chapter 21-35),
lease, gift or otherwise any utility property and may construct, complete, remodel, maintain and equip
such utility property and dispose of such utility property without any further authorization from the
Legislature. In addition, if the Legislature by law declares it to be in the public interest, the state, the
authority and any corporation formed by the authority may each acquire by purchase, condemnation
(including the power of condemnation in accordance with chapter 21-35), lease, gift or otherwise,
any other municipal facilities and may construct, complete, remodel, maintain and equip such other
or further municipal facilities subject to any limit as to appraised value or such other or further terms
and conditions as shall be so specified by the Legislature in such declaration. The authority shall
obtain and consider when determining the value of any municipal facilities to be leased, sold or
acquired, at least one independent appraisal.
Section
17.
Any lease or other contract or agreement authorized hereby by, to or from the state,
the authority, any corporation formed by the authority or any other public entity may be:
(1) Upon such terms, conditions, and rentals, subject to available appropriations as in the
judgment of the authority are in the public interest; or
(2) For a term of one or more years, with an option in the lessee to extend the term of the
lease for a term of one year from the expiration of the original term of the lease and for
one year from the expiration of each extended term of the lease, until the original term of
the lease has been extended for a total number of years to be agreed upon by the parties
at a rental which, if paid for the original term and for each of the full number of years for
which the term of the lease may be extended, will pay or amortize the total cost of any
financing or the appraised value of the property or such other amount as the authority or
any corporation formed by the authority shall determine to be appropriate under the
circumstances;
(3) Provide that the rental may be deposited, paid or prepaid at any time or such times as the
parties to the lease agree upon, and if prepaid, any or all of such prepayment may be
deposited with a lessor and invested in permitted investments or may be used to satisfy or
repay any outstanding debt or obligations. The lessee may receive credits for such
prepayment or deposit at such times and in such manner specified in the lease;
(4) Provide that the lessee may, at the expiration of the original or any extended term,
purchase the leased premises at a stated price, which may be the appraised value of the
leased property or such other amount paid or amortized by the payment or prepayment of
rents previously made by the lessee;
(5) Provide that in the event of the exercise of the option to purchase the leased premises or
in the event the lease has been extended for the full number of years which it is agreed the
same may be extended, and all rents and other amounts provided for in the lease have been
made, the lessor shall convey the premises or the lessor's interest therein to the lessee with
or without a covenant or warranty of title;
(6) Provide that the lessee shall, as additional rent for the leased premises, pay, or provide for
the payment of, all taxes assessed against the leased premises if any, the cost of insuring
the building erected thereon against loss or damage by casualty or otherwise in such sum
as may be agreed by the parties thereto and any other costs associated with the property
or any financing, and that lessee shall indemnify and hold the authority, corporation and
any lenders or other parties harmless for any costs, claims, taxes or damages relating to
or arising out of the lease or any financing or other contract or any other matters relating
to the transactions contemplated thereby. Any lessee of municipal facilities owned or
leased by or to the authority or corporation is hereby authorized to self-insure the
municipal facilities on such terms or conditions approved by the authority or set forth in
the lease.
Section
18.
The authority or any corporation formed by the authority may, in the event of
nonpayment of rents or other amounts reserved in a lease, maintain and operate such facilities and
sites or execute leases thereof to or service contracts with others for any suitable purposes.
Section
19.
The charges, fees, or rentals established by the authority or any corporation formed
by the authority, as lessor, for the use of any municipal facilities acquired, constructed, completed,
remodeled, or equipped in whole or in part with the proceeds of any financing or other transaction
as provided in this Act shall be sufficient at all times to pay maintenance and operation costs for such
facilities (unless under a lease maintenance and operation costs are otherwise provided for), and a
proportion of the administrative expenses of the authority and any corporation as provided for by
each lease, and such reserves as may be provided in the lease or any other resolution or other
agreement of the authority.
Section
20.
Any lease obligation of the state, the authority or any corporation formed by the
authority pursuant to this Act shall be payable solely and only from:
(1) Revenues to be derived by the state, the authority or such corporation from the ownership,
sale, lease, disposition and operation of any municipal facilities leased in connection
therewith;
(2) Income to be derived from leases to or involving any public entity or other person;
(3) Any funds or permitted investments, and any earnings thereon, to the extent pledged
therefor;
(4) Revenues to be derived by the authority or corporation from any public entity or from any
support and operating agreement, service agreement or any other agreement with any
person;
(5) Funds, if any, appropriated for such purpose by the Legislature;
(6) Revenues derived from the exercise of any power provided under this Act;
(7) Income or proceeds from any collateral pledged or provided therefor; and
(8) Revenues to be derived in connection with municipal facilities from (a) the foreclosure of
any mortgages, deeds of trust, notes, debentures, bonds, and other security interests held
by it, or pledged and assigned by it in connection with the lease, either by action or by
exercise of a power of sale, (b) the sale of the equity of redemption in said security
interests in accordance with the terms of said instruments and applicable state law or (c)
other actions to enforce any obligation held by it. Each such lease shall state that it does
not constitute an obligation of the State of South Dakota or the authority within the
meaning of any provisions of the Constitution or statutes of the State of South Dakota.
Section
21.
Any lease or other instrument or agreement authorized hereunder shall be executed
by such officers of the authority as shall be designated by the authority. Any lease or other instrument
or agreement authorized hereunder bearing the signature of officers in office at the date of signing
thereof shall be valid and binding for all purposes, notwithstanding that before delivery thereof any
or all such persons whose signature appears thereon shall have ceased to be such officers.
Section
22.
The provisions of this Act and of any resolution or proceeding authorizing any lease
of municipal facilities shall constitute a contract with any person claiming rights under or pursuant
to the lease. The provisions thereof shall be enforceable either in law or in equity, by suit, action,
mandamus, or other proceeding in any court of competent jurisdiction to enforce and compel the
performance of any duties required by this Act or any resolution or proceeding authorizing the lease,
including the establishment of sufficient charges, fees, or rentals and the application of the income
from municipal facilities under this Act.
Section
23.
The state may acquire from any public entity or other person by purchase, lease or
any other form of contract, agreement, instrument or conveyance all or any portion of municipal
facilities and may own, operate, use or otherwise contract with any public entity or other person to
own, operate, use or contract for use or operation of municipal facilities, and the state may dispose
of all or any portion of municipal facilities by sale, lease or any other form of contract, instrument or
conveyance to any public entity or other person, subject only to any applicable terms and conditions
set forth herein.
Any sale, acquisition, disposition, lease or other form, contract, instrument or conveyance by the
state of municipal facilities property pursuant to this Act shall be evidenced by an instrument or
agreement in writing signed on behalf of the state, a certified copy of which instrument or agreement
shall be filed with the Legislature. Upon the filing of a certified copy of any such instrument or
agreement, such sale, lease, acquisition, disposition or other contract shall, for all purposes, be valid,
binding and enforceable in accordance with the terms thereof and all deeds, bills of sale, leases and
other instruments, contracts and agreements related thereto, including any pledge, grant of security
interest or other encumbrance made by the state, the corporation, the authority or any public entity
are not subject to disavowal, disaffirmance, cancellation or avoidance by reason of insolvency of any
party, lack of consideration or any other fact, occurrence or rule of law.
Section
24.
The Board of Water and Natural Resources or the South Dakota Conservancy
District may become a party to a lease authorized by this Act whereby the Board of Water and
Natural Resources or South Dakota Conservancy District loans in an initial amount of not greater
than ninety percent of the appraised value of utility property leased to, by or from the state, authority,
corporation, other public entity pursuant to this Act. The Board of Water and Natural Resources or
South Dakota Conservancy District may also be lender, lessor and/or lessee in connection with any
transaction contemplated by this Act, provide a deposit agreement, payment undertaking or similar
contract to any party to a lease or lease transaction, and, in the event it is lessee, it may sublease such
property.
Section
25.
Notwithstanding any other provisions of law, all funds received by the authority and
any corporation formed by the authority shall be set forth in an informational budget as described in
§
4-7-7.2 and be annually reviewed by the Legislature.
Section
26.
The authority shall be audited annually in accordance with chapter 4-11 and any such
audit shall include any corporation formed by the authority.
Section
27.
The authority shall keep an accurate record of the rental payments under each lease
entered into by the authority or corporation.
Section
28.
No member, officer, agent, or employee of the state, the Board of Water and Natural
Resources, the South Dakota Conservancy District, the authority or any corporation formed by the
authority, nor any other person who executes a lease, shall be liable personally by reason of the
issuance thereof.
Section
29.
A public entity may by ordinance or resolution of its governing body exercise all the
powers conferred on (a) the South Dakota Building Authority and the Governor pursuant to
§
§
5-12-
15, 5-12-19, and 5-12-42 to 5-12-45, inclusive, and (b) the authority or any corporation formed by
the authority under this Act, with respect to the acquisition, lease, ownership, operation, sale and
leaseback of utility property or other municipal facilities.
For all purposes of this section, (1) any sale price shall not be required to exceed the appraised
value of the municipal facilities being sold or otherwise transferred, (2) no lease or other contract or
agreement entered into by a public entity as provided herein shall have a term in excess of one
hundred years, (3) only the net proceeds remaining with the public entity after any deposit, payment
or prepayment required by any lease, contract, agreement or other arrangement entered into in
connection therewith or relating to or concerning such municipal facilities are subject to
§
6-13-8, (4)
to the extent that a public entity sells, transfers or otherwise conveys municipal facilities to the state,
the authority, any corporation or other person as provided hereunder and enters into a lease, support
and operating agreement or other contract, agreement or other arrangement as described herein, as
modified hereby, such public entity and such sale, transfer, conveyance, lease, contract, agreement
and other arrangement shall not be subject to any restriction, condition or limitation or procedural
requirement prescribed by any other law or charter applicable to such public entity; (5) at the time
of lease or sale of municipal facilities by a public entity, unless the public entity retains pursuant to
lease, contract or other arrangement the right to possession of such facilities, the public entity shall
enter into a franchise agreement, a utility service contract, or other contract, requiring the purchaser
to furnish the public entity, its residents and users located in the area now served by the facilities sold,
utility service, at such rates as are approved by the public entity and on such further terms and
conditions as are determined by the public entity's governing body; (6) the provisions of
§
9-40-25
shall not apply to utility property described herein; and (7) bonds which have been defeased or for
which payment has been provided for by virtue of an arrangement involving an irrevocable deposit
of investments described in
§
4-5-26 shall be deemed paid in full for all purposes under chapter 9-40.
The public entity may enter into all other contracts considered necessary or desirable with respect to
the municipal facilities being sold, including but not limited to, contracts relating to the operation,
maintenance, insurance, improvements, replacement, and extension of the facilities sold or similar new
facilities to be operated in conjunction therewith by the public entity or the other contracting party.
Section
30.
All municipal facilities owned, leased, acquired, sold or operated by or for the benefit
of the state, the authority, any corporation formed by the authority or any other public entity pursuant
to a lease having a term (including, for such purpose, all renewal options) in excess of three years or
a lease-purchase or installment purchase contract, or pursuant to an operating contract described in
section 29 of this Act shall constitute a separate class of property which is exempt from all taxation.
Section
31.
Any public entity which enters into a lease or other transaction described in this Act
may also enter into one or more support and operating agreements, participation agreements,
indemnity agreements, payment undertaking agreements and such other contracts or arrangements
related thereto or ancillary therewith with the corporation, authority, state or any other public entity
or any person if the governing board of a public entity determines such agreements or arrangements
are reasonably necessary to induce lenders, investors or other persons to participate therein, and such
agreements or arrangements may include, without limitation, indemnities for losses or claims of any
nature or cause, agreements to charge, assess, levy or collect fees and charges for the use of
municipal facilities, an agreement to subsidize any such fees or charges and the pledge of the full faith
and credit of the public entity to pay any obligations of the public entity under or with respect to any
such lease, agreement or other arrangement.
Section
32.
The powers conferred by this Act are in addition to all other powers conferred upon
the state, the authority, any corporation and any public entity, and their exercise shall be subject only
to such restrictions as may be provided by the South Dakota Constitution and are not subject to any
restriction or procedural requirements related to the acquisition, leasing, financing, sale, use,
operation or encumbering of municipal facilities prescribed by any other law or charter, including,
without limitation, any public procurement or bidding requirements.
Section
33.
If any clause or other portion of this Act shall be held invalid, that decision shall not
affect the validity of the remaining portions of this Act. It is hereby declared that all such remaining
portions of this Act are severable, and that the Legislature would have enacted such remaining
portions if the portions that may be so held to be invalid had not been included in this chapter.
An Act to establish the South Dakota Municipal Facilities Authority, to provide for the establishment
of one or more special purpose corporations by the South Dakota Municipal Facilities Authority, to
establish the powers of the South Dakota Municipal Facilities Authority and each such corporation,
including the power to acquire, own, lease, sublease and dispose of certain land, improvements and
capital equipment comprising all or a portion of any municipal facilities, including any system or part
of a system of waterworks, sewage or waste disposal, and to establish or confirm the powers and
liabilities of the state, the Department of Environment and Natural Resources, the Board of Water
and Natural Resources, the South Dakota Conservancy District and municipalities and other public
entities of the state in connection therewith.
=========================
I certify that the attached
Act
originated in the
HOUSE as
Bill
No.
1279
|
____________________________
Chief Clerk
=========================
____________________________
Speaker of the House
____________________________
Chief Clerk
____________________________
President of the Senate
____________________________
Secretary of the Senate
House
Bill
No.
1279
File No. ____
Chapter No. ______
=========================
Received at this Executive Office
this _____ day of _____________ ,
20____ at ____________ M.
By _________________________
for the Governor
=========================
The attached Act is hereby
approved this ________ day of
______________ , A.D., 20___
____________________________
Governor
=========================
STATE OF SOUTH DAKOTA,
ss.
Office of the Secretary of State
Filed ____________ , 20___
at _________ o'clock __ M.
____________________________
Secretary of State
By _________________________
Asst. Secretary of State
