May 12, 1980

Mr. Charles P. Schroyer 
Hughes County State's Attorney 
124 South Euclid 
Pierre, South Dakota 57501

Official Opinion No. 80-35

County Economic Development Revenue Bonds

Dear Mr. Schroyer:

You have requested an official opinion from this office in regard to the following factual situation:

FACTS: 

A developer has requested the Hughes County Commission to consider the issuance of revenue bonds under SDCL 9-54.  The project involves the purchase of approximately 4000 acres of agricultural land, irrigation equipment and a processing plant for the production of mint.

Based on the above facts, you have asked the following question:

QUESTION: 

Can revenue bonds be used for the purchase of agricultural land under the provisions of SDCL 9-54-2?

SDCL 9-54-1 provides: 

The purpose of this chapter is to stimulate and develop the general economic welfare and prosperity of the state through the promotion and advancement of industrial, commercial, manufacturing, agricultural, natural resources, research, data collection, health service and recreational development and the reduction of water and air pollution resulting from such developments; to encourage and assist in the location of new business and industry in this state and the expansion of existing business development; and to promote the economic stability of the state by providing greater  employment opportunities and diversification of industry thus promoting the general welfare of the citizens by authorizing all municipalities of the state to issue revenue bonds to finance projects comprising real or personal property or both, useful for any of these purposes.

Secondly, SDCL 9-54-2 provides: 

For the purposes stated in § 9-54-1, any municipality shall have power when authorized by ordinance to issue revenue bonds, the proceeds of which shall be used only to purchase, construct, reconstruct, acquire sites for, enlarge, improve or remodel buildings, structures or equipment, and to enter into agreements of lease or sale of such projects upon rentals or purchase payments extending for a term not to exceed thirty years, with any person, firm, corporation or governmental entity, said projects to be situated in any municipality or its environs without limitation a to distance, providing the governing body of said municipality declares that the project, if in being, would promote the welfare of the municipality.

As is apparent from reading the purposes stated in SDCL 9-54-1, the Legislature has determined that advancement of agricultural projects is included within the scope of the powers granted by Chapter 9-54.  Further, SDCL 9-54-1 contemplates the revenue bonds being used to purchase real property as well as personal property.

SDCL 9-54-2 then makes provision for the necessary findings to be made by  the governing body of the municipality or the county. Thus, according to that statute, if the governing body of the county were to declare that the project would promote the welfare of the county, it appears to me that there is authority for the Hughes County Commission to proceed in the issuance of revenue bonds under SDCL 9-54 for the purpose of purchasing agricultural land to be used as discussed above.  In my opinion the answer to your question is yes.

Respectfully submitted,

Mark V. Meierhenry
Attorney General