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COMMITTEE REPORT
February 4, 2004
S. 787
S. Printed 2/4/04--S.
Read the first time January 13, 2004.
To whom was referred a Bill (S. 787) to amend Sections 11-15-590, 11-21-60, as amended, 11-41-150, 41-43-110, as amended, etc., respectfully
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 adding appropriately numbered SECTIONS to read:
/ SECTION ____. Section 11-41-50 of the 1976 Code is amended to read:
"Section 11-41-50. (A) Pursuant to Article X, Section 13(6)(c) of the Constitution of this State, 1895, the General Assembly provides that economic development bonds may be issued under this chapter only at such times as the maximum annual debt service on all general obligation bonds of the State, including economic development bonds outstanding and being issued, but excluding highway bonds, state institution bonds, tax anticipation notes, and bond anticipation notes, must will not exceed five and one-half percent of the general revenues of the State for the fiscal year next preceding, excluding revenues which are authorized to be pledged for state highway bonds and state institution bonds. The State at any time must may not have outstanding issue general obligation bonds, excluding economic development bonds, highway bonds, state institution bonds, tax anticipation notes, and bond anticipation notes, if at the time of issuance the maximum annual debt service on which all such general obligation bonds, outstanding and being issued exceeds five percent of the general revenues of the State for the fiscal year next preceding, excluding revenues which are authorized to be pledged for state highway bonds and state institution bonds.
(B) With respect to the first eight hundred-fifty million dollars in principal amount of general obligation bonds issued after the effective date of this chapter within the debt service constraints set forth in subsection (A) of this section, the General Assembly provides additional constitutional authorization for such bonds pursuant to Article X, Section 13(5) of the Constitution of this State, 1895. This authorization is the same authorization contained in, and is not duplicative of, the authorization set forth in Section 11-51-50(c)."
SECTION ____. Section 11-1-110 of the 1976 Code is amended to read:
"Section 11-1-110. The State Budget and Control Board is authorized to issue and sell bonds, notes, or other obligations for the purpose of acquiring, constructing, renovating, or maintaining facilities for the use of and occupancy of state departments and agencies or to refund such bonds, notes, or other obligations, provided that these obligations must be payable solely from revenues derived from the renting, leasing or sale of all or any designated portion of such the facilities acquired with the proceeds of the sale of these obligations held by the State Budget and Control Board for the use of and occupancy by state departments and agencies and must be secured solely by a pledge of these the revenues from such designated facilities and, at the option of the State Budget and Control Board, may be additionally secured by a mortgage of these facilities; provided, further, that the issuance and the sale of the bonds, notes, or other obligations provided for in this section are subject to the review of the Joint Bond Review Committee." /
Renumber sections to conform.
Amend title to conform.
HUGH K. LEATHERMAN, SR. for Committee.
EXPLANATION OF IMPACT:
A review of this bill by the State Treasurer's Office indicates there is a potential for cost savings on the General Fund of the State because any premium received will in most cases be used to reduce total borrowing resulting in lower debt service costs over the term of the debt. Any cost savings is contingent on future bond issues and premiums received at time of issue.
Approved By:
Don Addy
Office of State Budget
TO AMEND SECTIONS 11-15-590, 11-21-60, AS AMENDED, 11-41-150, 41-43-110, AS AMENDED, 57-11-380, 59-71-180, 59-107-170, AND 59-146-140, ALL OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, AND ALL RELATING TO THE USE OF BOND SALE PROCEEDS FOR GENERAL OBLIGATION BONDS ISSUED BY THE STATE AND POLITICAL SUBDIVISIONS OF THE STATE UNDER THE VARIOUS AUTHORIZING STATUTES, SO AS TO ELIMINATE THE REQUIREMENT THAT BOND PREMIUMS BE APPLIED ONLY TO THE FIRST INSTALLMENT OF PRINCIPAL DUE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 11-15-590 of the 1976 Code is amended to read:
"Section 11-15-590. The proceeds derived from the sale of any such these bonds shall must be deposited in a special fund, separate and distinct from all other funds, and applied solely to the purposes for which the bonds are issued, except that the premium, if any, shall be placed in the sinking fund established by Section 11-15-540 and the accrued interest, if any, shall must be used to discharge in part the first interest to become due on such the bonds."
SECTION 2. Section 11-21-60 of the 1976 Code, as last amended by Act 65 of 1991, is further amended to read:
"Section 11-21-60. On the delivery of any refunding bonds issued pursuant to this chapter, the proceeds thereof of the bonds, less the proceeds of that portion of any refunding bonds issued pursuant to Chapter 17, Title 6 for improvements, shall must be deposited with a corporate trustee and held by it under a written trust agreement and in a special trust account, except that the premium, if any, shall be used to pay the first principal to become due on such refunding bonds, and the accrued interest, if any, shall must be used to discharge in part the first interest to become due on such the refunding bonds. It shall be is the duty of the corporate trustee to keep such the proceeds invested and reinvested to the extent that it shall be practical in obligations of the United States or any agency thereof of the United States and to apply the principal and interest of the trust so established in the manner prescribed in such the trust agreement."
SECTION 3. Section 11-41-150 of the 1976 Code, as added by Act 254 of 2002, is amended to read:
"Section 11-41-150. The proceeds of the sale of bonds must be received by the State Treasurer and applied by him the State Treasurer to the purposes for which issued, except that the accrued interest, if any, may be used to discharge in part the first interest to become due on the bonds, and the premium, if any, must be used to discharge the payment of the first installment of principal to become due on the bonds, but the purchasers of the bonds in no way are liable for the proper application of the proceeds to the purposes for which they are intended."
SECTION 4. Section 41-43-110(D) of the 1976 Code is amended to read:
"(D) The proceeds from the sale of any bonds must be applied only for the purpose for which the bonds were issued. Any premium and accrued interest received in any such sale must be applied to the payment of the principal of or the interest on the bonds sold. If for any reason any portion of the proceeds is not needed for the purpose for which the bonds were issued, the unneeded portion of the proceeds must be applied to the payment of the principal of or the interest on the bonds."
SECTION 5. Section 57-11-380 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:
"Section 57-11-380. The proceeds of the sale of state highway bonds shall must be received by the State Treasurer and applied by him the State Treasurer to the purposes for which issued, except that the accrued interest, if any, shall must be used to discharge in part the first interest to become due on such the bonds, and the premium, if any, shall be used to discharge the payment of the first installment of principal to become due on such bonds, but the purchasers of such the bonds shall in no wise be are not liable for the proper application of the proceeds to the purposes for which they are intended."
SECTION 6. Section 59-71-180 of the 1976 Code is amended to read:
"Section 59-71-180. The proceeds derived from the sale of the bonds shall must be deposited with the treasurer of the county wherein in which the operating school unit is located, in whole or in part, in a special fund to the credit of the operating school unit and shall must be applied solely to the purposes for which the bonds were issued, except that the premium, if any, shall be placed in the sinking fund established by Section 59-71-150 and the accrued interest, if any, shall must be used to discharge in part the first interest to become due on such the bonds."
SECTION 7. Section 59-107-170 of the 1976 Code is amended to read:
"Section 59-107-170. The proceeds of sale of state institution bonds shall must be received by the State Treasurer and placed in a fund to the credit of the State Board subject to withdrawal on their order, except that all accrued interest received shall must be used by him the State Treasurer to discharge the first installment of interest coming due, and any premium shall be used to discharge the first installment of principal coming due on such bonds. On the occasion that he receives the proceeds of state institution bonds from the purchaser, the State Treasurer shall segregate the proceeds for the account of the state institution or institutions for which the bonds shall be are issued. The purchasers of the state institution bonds shall in no wise be are not liable for the application of the proceeds of the bonds to the purposes for which they are intended."
SECTION 8. Section 59-146-140 of the 1976 Code, as added by Act 28 of 1999, is amended to read:
"Section 59-146-140. The proceeds of the sale of state school facilities bonds shall must be received by the State Treasurer and applied by him the State Treasurer to the purposes for which issued, except that the accrued interest, if any, shall must be used to discharge in part the first interest to become due on such the bonds, and the premium, if any, shall be used to discharge the payment of the first installment of principal to become due on such bonds, but the purchasers of such the bonds shall in no way be are not liable for the proper application of the proceeds to the purposes for which they are intended."
SECTION 9. This act takes effect upon approval by the Governor.
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