Opinion ID: 1211638
Heading Depth: 1
Heading Rank: 5

Heading: Financial Structure.

Text: Turning to the most important factor first, we examine the financial structure of the Ports Authority. The Ports Authority may raise its own revenue by issuing bonds. [18] Its bonds are not a debt of, nor a pledge of the faith and credit of, the state, and are repayable only from Ports Authority earnings. [19] It may borrow money [20] and acquire property in its own name. [21] Although the Governor may make available to the Ports Authority funds appropriated for the construction of port facilities, [22] the General Assembly is not required to appropriate any funds to satisfy Ports Authority debts or ongoing operations. [23] The Ports Authority must set fees and rentals for services and facilities so that the Ports Authority is financially self-sufficient: Such rentals and other charges shall be so fixed and adjusted in respect of the aggregate thereof from the project or projects for which a single issue of revenue bonds is issued, as to proved a fund sufficient with other revenues of the project or projects, if any, to pay: (1) the cost of new construction of projects; (2) the cost of maintaining, repairing, and operating the project or projects, including reserves for extraordinary repairs and insurance ...; and (3) the principal of the revenue bonds and the interest thereon. [24] Finally, the profits of the Ports Authority are held in trust and can only be used for purposes set forth in the statutes establishing the Ports Authority. [25] In its supplemental brief, the Ports Authority contends that an analysis of State budgets shows that the Ports Authority is not self-sufficient. The citations provided, however, do not establish that the Ports Authority is financially dependent on the State. The direct appropriations cited are ambiguous  it is not clear whether monies appropriated to the Department of Industry and Trade are for rental obligations owed by the Department to the Ports Authority or for obligations owed by the Ports Authority. [26] Additionally, while the legislature has authorized general obligation debt for the financing of facilities for the Ports Authority, the Ports Authority does not contend, and nothing in the record shows, that these bonds are paid wholly from general tax revenues, as opposed to being repaid by Ports Authority earnings and revenue. [27] Furthermore, the extent to which the State chooses to fund the Ports Authority is less relevant than the extent to which it is required to pay its debts. [28] Finally, two federal circuit cases dealing with ports authorities support this conclusion. In Vierling, the Eleventh Circuit concluded that a Florida ports authority did not have immunity, primarily because it was financially self-sufficient. [29] In Ristow v. South Carolina Ports Authority, [30] the Fourth Circuit Court of Appeals held that the South Carolina ports authority did have immunity, primarily because the South Carolina ports authority was not self-sufficient because its extensive capital improvements were paid for with bonds that were wholly repaid from general tax revenues. [31] Because the record in this case indicates that the Ports Authority is self-sufficient and is not intertwined with the State's treasury, this factor suggests that the Ports Authority is not an arm of the state for Eleventh Amendment purposes. [32]