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Bill Number: 4154 Ratification Number: 708 Act Number 767 Introducing Body: House Subject: To authorize the Board of Trustees of Clarendon County to issue general obligation bonds
(A767, R708, H4154)
AN ACT TO AUTHORIZE THE BOARD OF TRUSTEES OF SCHOOL DISTRICT 1 OF CLARENDON COUNTY TO ISSUE GENERAL OBLIGATION BONDS AT ONE TIME OR FROM TIME TO TIME IN AN AMOUNT NOT EXCEEDING THREE HUNDRED THIRTY-SEVEN THOUSAND DOLLARS TO FUND AN OPERATING DEFICIT, TO PRESCRIBE THE CONDITIONS UNDER WHICH THE BONDS MAY BE ISSUED AND THE PURPOSES FOR WHICH THE PROCEEDS MAY BE EXPENDED, AND TO MAKE PROVISION FOR THE PAYMENT OF THE BONDS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that School District 1 of Clarendon County experienced in the 1986-87 fiscal year a revenue shortfall and by Act 258 of 1987 the General Assembly authorized the school district to issue general obligation bonds in an amount not exceeding two hundred thousand dollars to satisfy the deficit. The school district experienced a higher deficit than anticipated in fiscal year 1986-87 and the school district anticipates a revenue shortfall in the current fiscal year 1987-88.
Article X, Section 7 of the Constitution of this State provides that each school district shall prepare and maintain annual budgets which provide for sufficient income to meet its estimated expenses for each year. Whenever it happens that the ordinary expenses of a political subdivision for any year exceed the income of such political subdivision, the governing body of such political subdivision shall provide for levying a tax in the ensuing year sufficient, with other sources of income, to pay the deficiency of the preceding year together with the estimated expenses for the ensuing year.
There presently exists no statutory authorization for the school district to incur bonded indebtedness to fund an operating deficit. The General Assembly has determined it is in the best interest of the school district and the State of South Carolina to authorize the board of trustees of the school district to issue at one time or from time to time general obligation bonds of the school district to fund the 1986-87 fiscal year deficit and the current 1987-88 fiscal year deficit, for a total aggregate principal amount not exceeding three hundred thirty-seven thousand dollars.
SECTION 2. For the purpose of funding the fiscal year 1986-87 deficit of the school district and the current fiscal year 1987-88 anticipated deficit, the board of the school district may on, before, or after July 1, 1988, issue, without an election, general obligation bonds of the school district at one time or from time to time, in an amount not exceeding the fiscal year 1986-87 deficit and the district may on or after July 1, 1988, issue, without an election, general obligation bonds of the school district at one time or from time to time in an amount not exceeding the fiscal year 1987-88 deficit, for a total aggregate principal amount not exceeding three hundred thirty-seven thousand dollars.
SECTION 3. All bonds issued pursuant to this act must mature in annual series or installments as the board prescribes. The final maturity of the bonds must be no more than ten years from the date of issue.
SECTION 4. Any bonds issued pursuant to this act may be issued with a provision for their redemption prior to their maturity at par and accrued interest, plus a redemption premium as may be prescribed by the board, but no bond is redeemable before maturity unless it contains a statement to that effect. In the proceedings authorizing the issuance of the bonds, provision must be made specifying the manner of call and the notice of call which must be given.
SECTION 5. The bonds issued pursuant to this act must be in the form of fully registered bonds or notes payable to or upon the order of the registered owner, upon conditions as the board may prescribe.
Where payable - denomination
SECTION 6. The bonds issued pursuant to this act must be in a denomination and must be made payable at a place, within or without the State, as the board prescribes.
SECTION 7. Bonds issued pursuant to this act must bear interest at a rate determined by the board within the limitations of Section 11-9-350 of the 1976 Code.
SECTION 8. The bonds must be executed in a manner as the board prescribes by resolution.
SECTION 9. Bonds issued pursuant to this act must be sold at a price of not less than par and accrued interest to the date of their respective deliveries. Bonds authorized by this act may be sold at public or private sale upon the terms prescribed by the board.
SECTION 10. For payment of the principal of and interest on all bonds issued pursuant to this act, as they respectively mature, and for the creation of such sinking fund as may be necessary therefor, the full faith, credit, and taxing power of the school district must be irrevocably pledged, and there must be levied annually by the auditor of Clarendon County, and collected by the treasurer of Clarendon County, in the same manner as county taxes are levied and collected, a tax without limit on all taxable property in the school district sufficient to pay the principal of and interest on the bonds as they respectively mature and to create such sinking fund as may be necessary therefor.
SECTION 11. The principal of and interest on bonds issued pursuant to this act have the tax exemption prescribed by Section 12-1-60 of the 1976 Code.
Use of proceeds
SECTION 12. The proceeds derived from the sale of any bonds issued pursuant to this act must be paid to the treasurer of Clarendon County, to be deposited in the Bond Account Fund for the
school district and must be expended and made use of by the board as follows:
(1) Any accrued interest must be applied to the payment of the first installment of interest to become due on the bonds.
(2) Any premium must be applied to the payment of the first installment of principal of the bonds.
(3) The remaining proceeds must be used to defray the costs of issuing bonds authorized by this act and to fund the 1986-87 and 1987-88 deficit of the school district, or a portion of the deficit.
(4) If any balance remains, it must be held by the treasurer of Clarendon County in a special fund and used to effect the retirement of these bonds.
SECTION 13. The powers and authorizations conferred upon the board of the school district by this act are in addition to all other powers and authorizations previously vested in the board and may be availed of pursuant to action taken at any regular or special meeting of the board by a resolution to take effect immediately upon its adoption.
Further action unnecessary
SECTION 14. No election is prescribed as a condition precedent to the issuance of the bonds and no action other than that prescribed in this act needs to be taken to effect the issuance of the bonds. No approval of any other public agency including the Clarendon County Board of Education is required for any action taken pursuant to the authorizations of this act.
SECTION 15. This act takes effect upon approval by the Governor.