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COMMITTEE REPORT
April 20, 2006
H. 4075
S. Printed 4/20/06--H.
Read the first time May 11, 2005.
To whom was referred a Bill (H. 4075) to amend Section 11-35-70, as amended, Code of Laws of South Carolina, 1976, relating to when a school district is subject to the consolidated procurement, 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 an appropriately numbered SECTION to read:
/ SECTION ___.A. This SECTION may be cited as the "Financial Advisory Services Act".
B. Chapter 15, Title 11 of the 1976 Code is amended by adding:
Section 11-15-710. As used in this article:
(1) 'Governing board' means the board, council, commission, board of trustees, authority, or other public body upon which is devolved by law the administrative duties of an issuer.
(2) 'Issuer' means any incorporated city or town, school district, county, special purpose district, public service district, or other political division or subdivision of the State.
(3) 'Municipal securities' means bonds, notes, or other obligations issued by or on behalf of an issuer.
(4) 'Municipal securities broker' and 'municipal securities dealer' have the meanings provided them in the rules established by the Municipal Securities Rulemaking Board.
(5) 'Providing financial advisory services' means a relationship that exists when a person renders, either directly or indirectly, or enters into an agreement to render, either directly or indirectly, financial advisory or consultant services to or on behalf of an issuer with respect to an issue or issues of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning the issue or issues, for a fee or other compensation or in expectation of compensation for the rendering of the services. Notwithstanding the provisions of this subsection, a financial advisory relationship does not exist when, in the course of acting as an underwriter, a municipal securities broker or municipal securities dealer renders advice to an issuer, including advice with respect to the structure, timing, terms, and other similar matters concerning a new issue of municipal securities. An attorney-client relationship is not a financial advisory relationship.
(6) 'State' means the State of South Carolina.
Section 11-15-720. (A) Only a municipal securities broker or dealer may provide financial advisory services to issuers.
(B) Financial advisory services must be provided to issuers only upon official action by the governing board of an issuer taken before, contemporaneously with, or promptly after the inception of the relationship, specifying the services to be rendered and the costs for the services.
(C) Public funds or proceeds of municipal securities must not be used to pay for financial advisory services unless subsections (A) and (B) have been complied with." /
Renumber sections to conform.
Amend title to conform.
DANIEL T. COOPER for Committee.
EXPLANATION OF IMPACT:
The Budget and Control Board and the State Department of Education each indicate that implementation of this bill will have no impact on the General Fund of the State, or on federal and/or other funds.
Approved By:
Don Addy
Office of State Budget
TO AMEND SECTION 11-35-70, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO WHEN A SCHOOL DISTRICT IS SUBJECT TO THE CONSOLIDATED PROCUREMENT CODE, SO AS TO PROVIDE THAT IF A SCHOOL DISTRICT WHOSE BUDGET OF TOTAL EXPENDITURES, INCLUDING DEBT SERVICE, EXCEEDS SEVENTY-FIVE MILLION DOLLARS BECAUSE OF A ONE-TIME CONSTRUCTION PROJECT, THE SCHOOL DISTRICT IS EXEMPT FROM THE PROVISIONS OF THE CONSOLIDATED PROCUREMENT CODE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 11-35-70 of the 1976 Code, as last amended by Act 153 of 1997, is further amended to read:
"Section 11-35-70. (A) Irrespective of the source of funds, any school district whose budget of total expenditures, including debt service, exceeds seventy-five million dollars annually is subject to the provisions of Chapter 35 of Title 11, and shall notify the Director of the Office of General Services of the Budget and Control Board of its expenditures within ninety days after the close of its fiscal year. However, if a district has its own procurement code which is, in the written opinion of the Office of General Services of the State Budget and Control Board, substantially similar to the provisions of the South Carolina Consolidated Procurement Code, the district is exempt from the provisions of the South Carolina Consolidated Procurement Code except for a procurement audit which must be performed every three years by an audit firm approved by the Office of General Services. Costs associated with the internal review and audits are the responsibility of the school district and will be paid to the entity performing the audit.
(B) If a school district whose budget of total expenditures, including debt service, exceeds seventy-five million dollars because of a one-time construction project, the school district is exempt from the provisions of subsection (A)."
SECTION 2. This act takes effect upon approval by the Governor.
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