South Carolina General Assembly
109th Session, 1991-1992

Bill 3845


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Introducing Body:               House
Bill Number:                    3845
Primary Sponsor:                Boan
Type of Legislation:            GB
Subject:                        Institution bonds, etc.
Residing Body:                  House
Date Tabled:                    May 15, 1991
Computer Document Number:       CYY/18503.SD
Introduced Date:                Apr 11, 1991
Last History Body:              House
Last History Date:              May 15, 1991
Last History Type:              Tabled
Scope of Legislation:           Statewide
All Sponsors:                   Boan
Type of Legislation:            General Bill



History


 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 3845  House   May 15, 1991  Tabled
 3845  House   May 14, 1991  Debate adjourned until
                             Wednesday, May 15
 3845  House   May 09, 1991  Debate adjourned until
                             Tuesday, May 14
 3845  House   May 08, 1991  Debate adjourned until
                             Thursday, May 9
 3845  House   Apr 25, 1991  Committee Report: Favorable     30
                             with amendment
 3845  House   Apr 11, 1991  Introduced, read first time,    30
                             referred to Committee

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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

COMMITTEE REPORT

April 25, 1991

H. 3845

Introduced by REP. Boan

S. Printed 4/25/91--H.

Read the first time April 11, 1991.

THE COMMITTEE ON WAYS AND MEANS

To whom was referred a Bill (H. 3845), to amend Sections 59-107-40, 59-107-50, 59-107-60, 59-107-70, etc., respectfully

REPORT:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/SECTION 1. Section 59-107-40(3) of the 1976 Code is amended to read:

"(3) A statement establishing the aggregate sum received from tuition fees for the twelve calendar months preceding the month fiscal year immediately preceding the fiscal year in which such application is dated;"

SECTION 2. Section 59-107-50(3) of the 1976 Code is amended to read:

"(3) That the aggregate of tuition fees received by such institution for the twelve calendar months preceding the month in which the application made pursuant to Section 59-107-40 is dated will, if multiplied by the number of years for which the bonds provided for by this chapter shall be outstanding, result in the production of a sum equal to not less than one hundred fifty percent of the estimated aggregate principal and interest requirements of all state institution bonds issued for such institution to be outstanding, but excluding bonds defeased pursuant to Section 59-107-200 if the application is approved, except that subsequent to the effective date of the ratification of new Article X of the State Constitution the test imposed by subparagraph (b) of paragraph 6 of Section 13 of new Article X shall control the issuance of state institution bonds and the statutory test imposed by this paragraph (3) shall be disregarded annual debt service on all state institution bonds issued for such state institution, including the bonds then proposed to be issued, shall not exceed ninety percent of the sums received by such state institution of higher learing from tuition fees for the preceding fiscal year;"

SECTION 3. Section 59-107-60(8) of the 1976 Code is amended to read:

"(8) The sum received by such State institution from tuition fees for the twelve calendar months preceding the month fiscal year preceding the fiscal year in which the application made pursuant to Section 59-107-40 is dated; and"

SECTION 4. Section 59-107-70 of the 1976 Code is amended to read:

"Section 59-107-70. It shall be the duty of the Governor and the State Treasurer to examine the request mentioned in Section 59-107-60, and if they shall jointly approve it, and, for themselves, determine that the schedule of tuition fees in force at such State institution will, upon the basis of the sum received by such State institution from tuition fees for the twelve calendar months preceding the month fiscal year preceding the fiscal year in which the application made pursuant to Section 59-107-40 is dated, produce funds sufficient to meet the principal and interest requirements on the proposed bonds and on all outstanding State institution bonds issued for such State institution, and provide the margin for such principal and interest requirements to the extent required by paragraph (3) of Section 59-107-50, they shall be empowered to provide for the issuance of State institution bonds in the amount approved by the State Board."

SECTION 5. Section 59-107-100 of the 1976 Code is amended to read:

"Section 59-107-100. For the payment of the principal and interest on all State institution bonds, whose issuance is authorized by this chapter, there shall be pledged the full faith, credit and taxing power of the State, and in addition, the revenues derived from the tuition fees received by the particular institution of higher learning for which such state institution bonds are issued must also be pledged."

SECTION 6. Section 59-107-160 of the 1976 Code is amended to read:

"Section 59-107-160. State institution bonds may be privately placed if the terms and conditions of such disposition shall be approved by resolution duly adopted by the State Board and the terms of such proposal meet the financial test prescribed in the second paragraph of this section.

All other State institution bonds shall be sold by the Governor and the State Treasurer upon sealed proposals, after publication of notice of the sale one or more times at least ten days before the sale in a newspaper of general circulation in the State and also in a financial paper published in New York City which regularly publishes notices of sale of state or municipal bonds. In all calls for bids, the right shall be reserved to reject all bids and readvertise for the sale of the bonds. Upon the opening of bids the Governor and the State Treasurer shall determine the most advantageous bid, and if one hundred fifty per cent of the aggregate principal and interest requirements on (a) bonds sold in accordance with the most advantageous bid and (b) all outstanding State institution bonds issued for such State institution is within the estimate of the tuition fees to be received by the State institution or institutions for which such bonds are issued, made on the basis required by item (3) of Section 59-107-50, and if they shall find that one hundred fifty per cent of the aggregate principal and interest requirements, calculated in accordance with the formula prescribed by Section 59-107-50, does not exceed the estimate, they may award the State institution bonds on such bid, at a price not less than par and accrued interest to the date of delivery and if such bid produces principal and interest payments on such proposed issue which are in compliance with the provisions outlined in paragraph (3) of Section 59-107-50, they may award the state institution bonds on such bid, at a price not less than par and accrued interest to the date of delivery. For the purpose of bringing about a successful sale of such bonds, the State Board may do all things ordinarily and customarily done in connection with the sale of state or municipal bonds. All expenses incident to the sale of the bonds shall be paid from the proceeds of the bonds."

SECTION 7. Section 59-107-180 of the 1976 Code is amended to read:

"Section 59-107-180. Immediately following the determination of the Governor and the State Treasurer to provide for the issuance of State institution bonds, the Treasurer shall segregate into a special fund all tuition fees of the State institution for which State institution bonds are to be issued and shall apply such special fund to the payment of the principal, interest and redemption premium, if any, on all bonds issued pursuant to this chapter for such institution, except that in all instances where the special fund established for the bonds of any such institution shall exceed (a) all payments of principal and interest due in the then current fiscal year, plus (b) the maximum annual debt service requirements in any succeeding fiscal year of all State institution bonds outstanding for such institution, the Treasurer may upon direction of the State Board apply moneys in excess of the sum of (a) and (b) above: (1) to the defeasance of State institution bonds for such institution as provided in Section 59-107-200; or (2) to any purpose set forth in clauses (a), (b) and (c) of the first paragraph of Section 59-107-40. In the event the surplus is to be applied to the defeasance of bonds, the maximum annual debt service requirements shall be computed as though the bonds to be defeased had already been defeased issuance of state institution bonds, the State Treasurer shall segregate into a special fund all tuition fees of the state institution for which state institution bonds have been issued and shall apply such special fund to the payment of the principal, interest, and redemption premium, if any, on all bonds issued pursuant to this chapter for such institution; provided, however, that in the event the monies on deposit in such special fund at any time shall exceed all payments of principal and interest due in the then current fiscal year, plus the maximum annual debt service requirements in any succeeding fiscal year of all state institution bonds outstanding for such institution that were issued prior to March 1, 1991, plus any additional amount described in the last sentence of this section, the State Treasurer shall thereupon establish within the special fund created by this section separate funds for each issuance of state institution bonds for such state institution to be designated `special debt service and reserve funds', and (1) shall deposit in the special debt service and reserve fund for each issuance of state institution bonds that was issued prior to March 1, 1991, an amount equal to all payments of principal and interest due in the then current fiscal year on such issuance, plus the maximum annual debt service requirements in any succeeding fiscal year of such issuance, and (2) shall deposit in the special debt service and reserve fund for each issuance of such state institution bonds that was issued on or after March 1, 1991, an amount equal to all payments of principal and interest due on such issuance of state institution bonds in the then current fiscal year. Upon the establishment and funding of such special debt service and reserve funds for the state institution bonds for any state institution in accordance with the foregoing sentence, the State Treasurer shall apply tuition fees later received to maintain the levels of the special debt service and reserve funds at the level required by the foregoing sentence as such level may be adjusted as current annual and maximum annual requirements vary, and may apply any remaining tuition fees and any monies still remaining in the general special fund after the complete funding of the special debt service and reserve funds: to the defeasance of state institution bonds for such institution as provided in Section 59-107-200; or to any purpose set forth in subitems (a), (b), and (c) of the first paragraph of Section 59-107-40. In the event the surplus is to be applied to the defeasance of bonds, the computation of annual debt service requirements for purposes of this section shall be made as though the bonds to be defeased had already been defeased. Notwithstanding the foregoing, it is expressly provided that the State Treasurer may increase the required level for a special debt service and reserve fund for an issuance of state institution bonds issued on or after March 1, 1991, to an amount equal to all payments of principal and interest due on such issuance of state institution bonds in the then current fiscal year plus an amount equal to all payments of principal and interest due on such issuance of state institution bonds to become due between the end of the then current fiscal year and the date at which the State Treasurer anticipates receiving sufficient deposits of tuition fees from such state institution in the ensuing fiscal year to provide an adequate cash flow to meet debt service requirements for such ensuing fiscal year."

SECTION 8. The first paragraph of Section 59-107-200 of the 1976 Code is amended to read:

"Upon the direction of the State Board, the State Treasurer may apply all or any part of the surplus, as defined in this section, of the special fund established pursuant to Section 59-107-180, applicable to the state institution bonds of any state institution to the defeasance of any of such bonds by establishing an irrevocable trust therefor which shall consist of either moneys in an amount which shall be sufficient, or direct obligations of the United States of America, or obligations unconditionally guaranteed by the United States of America, the principal and interest on which when due will provide the sums required to pay the principal, interest and redemption premium, if any, of the particular state institution bonds sought to be defeased. The trust fund shall be established in such manner as to designate the state institution bonds intended to be defeased. When so established, the state institution bonds shall be deemed to be defeased and shall not be deemed to be outstanding for all purposes of this chapter. The term surplus shall mean the sum remaining in the special fund after deducting therefrom (a) all payments of principal and interest due in the then current fiscal year plus (b) the maximum annual debt service requirements of any subsequent fiscal year of all state institution bonds to be outstanding for such institution following the establishment of the irrevocable trust authorized by this section. Provided, that notwithstanding excess, as defined in Section 59-107-180, of the special fund established pursuant to Section 59-107-180, applicable to the state institution bonds of any state institution to the defeasance of any of such bonds by establishing an irrevocable trust therefor which shall consist of either moneys in an amount which shall be sufficient, or direct obligations of the United States of America, or obligations unconditionally guaranteed by the United States of America, the principal and interest on which when due will provide the sums required to pay the principal, interest, and redemption premium, if any, of the particular state institution bonds sought to be defeased. The trust fund shall be established in such manner as to designate the state institution bonds intended to be defeased. When so established, the state institution bonds shall be deemed to be defeased and shall not be deemed to be outstanding for all purposes of this chapter. Notwithstanding the establishment of the irrevocable trust fund, the obligation of the State to pay to the holders of the defeased bonds all sums due by way of principal and interest shall not be deemed to be impaired."

SECTION 9. Section 11-27-30 8. of the 1976 Code is amended to read:

"8. Notwithstanding any contrary provision of any law, any and all state general obligation bonds, tax anticipation notes or bond anticipation notes issued after May 30, 1977, shall be executed in the name of and on behalf of the State of South Carolina and shall be signed by the Governor and the State Treasurer. The Great Seal of the State shall be affixed to, impressed or reproduced upon each of them and the same shall be attested by the Secretary of State, provided that if approved by the State Board, any one or two of such officers may, in lieu of manually signing, employ the use of the facsimile of their signature in executing any of the foregoing. All state general obligation bonds, revenue bonds, tax anticipation notes, and bond anticipation notes shall be issued, executed, authenticated, registered and delivered in such form or manner as the State Board or other authority may determine in the resolution authorizing the issuance of such obligations."

SECTION 10. Sections 57-11-350, 59-71-500, 59-107-130 of the 1976 Code, and Section 13 of Act 1377 of 1968 are repealed.

SECTION 11. This act takes effect upon approval by the Governor./

Renumber sections to conform.

Amend title to conform.

WILLIAM D. BOAN, for Committee.

A BILL

TO AMEND SECTIONS 59-107-40, 59-107-50, 59-107-60, 59-107-70, 59-107-100, 59-107-160, 59-107-180, AND 59-107-200, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO STATE INSTITUTION BONDS, SO AS TO FURTHER PROVIDE FOR THE MANNER IN WHICH THESE BONDS ARE AUTHORIZED AND ISSUED; TO AMEND SECTION 11-27-30, RELATING TO THE EFFECT OF THE CONSTITUTION OF THIS STATE ON ALL STATE BONDS, SO AS TO FURTHER PROVIDE FOR THE MANNER IN WHICH CERTAIN STATE BONDS AND NOTES MUST BE ISSUED AND DELIVERED, AND TO REPEAL SECTIONS 57-11-350, RELATING TO THE EXECUTION OF STATE HIGHWAY BONDS, 59-71-500, RELATING TO THE EXECUTION OF STATE SCHOOL BONDS, AND 59-107-130, RELATING TO THE EXECUTION OF STATE INSTITUTION BONDS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 59-107-40 of the 1976 Code is amended to read:

SECTION 2. Section 59-107-50 of the 1976 Code is amended to read:

SECTION 3. Section 59-107-60 of the 1976 Code is amended to read:

SECTION 4. Section 59-107-70 of the 1976 Code is amended to read:

SECTION 5. Section 59-107-100 of the 1976 Code is amended to read:

SECTION 6. Section 59-107-160 of the 1976 Code is amended to read:

SECTION 7. Section 59-107-180 of the 1976 Code is amended to read:

SECTION 8. Section 59-107-200 of the 1976 Code is amended to read:

SECTION 9. Section 11-27-30 of the 1976 Code is amended to read:

SECTION 10. Sections 57-11-350, 59-71-500, and 59-107-130 of the 1976 Code are repealed.

SECTION 11. This act takes effect upon approval by the Governor.

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