South Dakota Codified Laws 1-16A-89. Credit enhancement obligation–Conditions
No credit enhancement obligation is valid unless the authority adopts a resolution which finds and determines the following:
(1) The bonds or other obligations to be secured by such credit enhancement obligation are to be issued for the purpose of financing or refinancing property, real or personal, or related costs incurred by a health institution which owns or operates a hospital which presently provides or intends to provide hospital services to all or a portion of the residents of the municipality or county which is proposing to issue the credit enhancement obligation;
Terms Used In South Dakota Codified Laws 1-16A-89
- Authority: means the South Dakota Health and Educational Facilities Authority created by this chapter. See South Dakota Codified Laws 1-16A-2
- Credit enhancement obligation: means an agreement, instrument, or other arrangement described in chapter 6-8B, pursuant to which any municipality or county covenants or agrees to levy taxes or pledge its full faith and credit or other revenues, funds, fees, or property, in amounts necessary to pay debt service and related charges on or in connection with bonds or other obligations issued to finance or refinance property, real or personal, and related costs for a health institution that owns or operates a hospital in this state. See South Dakota Codified Laws 1-16A-2
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Health institution: means any private nonprofit corporation or institution authorized by law to provide or operate health facilities in this state, or any private nonprofit corporation or institution authorized by law to provide or operate health facilities outside this state. See South Dakota Codified Laws 1-16A-2
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Participating health institution: means a nonprofit health institution that, pursuant to this chapter, shall undertake the financing and construction or acquisition of health facilities or shall undertake the refunding or refinancing of outstanding obligations or of a mortgage or of advances or loans, as provided in and permitted by this chapter, whether located within this state or in another state. See South Dakota Codified Laws 1-16A-2
- Property: includes property, real and personal. See South Dakota Codified Laws 2-14-2
(2) The participating health institution which is obligated to make payments in amounts and at the times required to repay the bonds or other obligations to be secured by the credit enhancement obligation are reasonably expected to have sufficient funds available for such purposes;
(3) The credit enhancement obligation and any bonds or other obligations to be issued by the authority, municipality or county in connection therewith do not contain provisions which will require credit enhancement obligation payments by the municipality or county in any fiscal year of the municipality or county prior to the year in which a principal payment, sinking fund installment or comparable redemption payment amount is otherwise scheduled to become due; and
(4) If deemed advisable by the authority, the participating health institution shall agree to one or more financial or operational covenants which, if not complied with, may result in the authority or a financial institution requiring the participating health institution to take certain actions including, without limitation, the retaining of an independent consultant to study the operations of the participating health institution and recommend improvements therein.
Source: SL 1992, ch 3, § 2.