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Title 11 - Public Finance
DEFEASANCE OF OUTSTANDING PUBLIC BONDS, NOTES AND OTHER OBLIGATIONS
Defeasance of outstanding public obligations authorized; deposits in special trust fund.
The State, acting through the Budget and Control Board, all agencies and institutions and all counties, municipal corporations, authorities, special purpose districts and other political units may effect the defeasance of any outstanding bonds, notes or other obligations by depositing in a special irrevocable trust fund, to be held by the State Treasurer or a bank or other financial institution approved by the State Treasurer, obligations of the United States or any of its agencies and moneys which will provide the sums required to pay when due the principal of, redemption premium, if any, and interest on the bonds sought to be defeased. Upon the establishment and funding in full of such special trust fund, the bonds so defeased shall no longer be deemed outstanding for any purpose.
Defeasance of assumed debt.
In all instances where all or any portion of the debt of one public agency or political unit has been assumed by another public agency or political unit, it shall be presumed that the assumed obligations will be appropriately paid by the public agency or political unit assuming such debt and the unpaid debt shall be deemed to have been defeased to the same extent as debt defeased in the manner provided for in Section 11-14-110.
Defeasance not to impair obligations of contract between issuer and holder.
It is not intended that any action pursuant to the authorization of this chapter shall impair any obligation of any contract between the issuer and any holder of any bond, note or other obligation of the issuer and, if for any reason any trust established shall fall, in whole or in part, to effect the payments intended or required to be made, or if in the instance of debt assumed as contemplated by Section 11-14-120, the public agency or political unit assuming such debt shall fail to pay such assumed debt, in whole or in part, then in each instance the issuer shall forthwith effect payment of such principal or interest through the means and in the manner originally provided.