Section 5-12-59 - Tobacco development interest fund established--State pledge to honor agreements ofauthority or corporation with regard to certain federal income tax exclusions. - South Dakota Statutes

5-12-59. Tobacco development interest fund established--State pledge to honor agreements of authority or corporation with regard to certain federal income tax exclusions. The tobacco development interest fund is established in the state treasury. The amounts in the tobacco development interest fund shall be state public funds within the meaning of chapter 4-4 and shall remain in the fund until appropriated by the Legislature. The amounts in the tobacco development interest fund shall be invested in permitted investments or otherwise in accordance with §§ 4-5-23 and 4-5-26.
If in order to obtain or preserve any exclusion of interest on bonds from gross income of the holders thereof for purposes of federal income taxation, the corporation or authority enters into any agreement or covenant with the holders of bonds (or the trustee or other fiduciary acting on behalf of or for the benefit of holders of bonds) that imposes restrictions or conditions on the investment, use, expenditure, or other application of the proceeds of bonds issued, incurred, or created under §§ 5-12-48 to 5-12-60, inclusive, including any investment earnings thereon (whether while on deposit in the permanent tobacco settlement development trust fund, the tobacco development interest fund or otherwise), then the state and each agency, authority, or other body politic of the state or acting on behalf of the state, shall observe and fully honor each such agreement, covenant, or other restriction or condition with respect to investment, use, expenditure, or application thereof. The State of South Dakota pledges to and agrees with the holders of bonds issued, incurred, or created under §§ 5-12-48 to 5-12-60, inclusive, that the state will not invest, use, expend, or otherwise apply such proceeds of bonds and any other amounts so as to impair the terms of any such agreement or covenant made by the corporation or authority with any such holders (or trustee or other fiduciary) or in any way impair the exemption or exclusion of interest on any such bonds from federal income taxation. The corporation and authority each may include these pledges and agreements of the state in any contract with the holders of bonds issued, incurred, or created under §§ 5-12-48 to 5-12-60, inclusive.

Source: SL 2001, ch 27, § 12.