Current Status Introducing Body:Senate Bill Number:725 Primary Sponsor:Hayes Committee Number:30 Type of Legislation:GB Subject:Lease-purchase financing, payment of bonds Residing Body:House Current Committee:Ways and Means Computer Document Number:PT/22078DW.93 Introduced Date:19930422 Date of Last Amendment:19940120 Last History Body:House Last History Date:19940126 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Hayes Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
____ ______ ____________ ______________________________ ___ ____________
725 House 19940126 Introduced, read first time, 30
referred to Committee
725 Senate 19940125 Read third time, sent to House
725 Senate 19940120 Amended, read second time
725 Senate 19940119 Committee Report: Favorable 06
with amendment
725 Senate 19930422 Introduced, read first time, 06
referred to Committee
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Indicates Matter Stricken
Indicates New Matter
COMMITTEE AMENDMENT ADOPTED
January 20, 1994
S. 725
S. Printed 1/20/94--S.
Read the first time April 22, 1993.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTIONS 11-15-610 AND 11-21-90, SO AS TO PROVIDE THAT ANY ISSUER OR ANY PUBLIC AGENCY WHICH IS THE LESSEE OF PROPERTY UNDER A LEASE-PURCHASE FINANCING AGREEMENT MAY ISSUE BONDS FOR THE PURPOSE OF PAYING THE REMAINING AMOUNTS OF RENT TO BECOME PAYABLE PURSUANT TO THIS FINANCING, INCLUDING INTEREST AND ANY REDEMPTION PREMIUM; TO AMEND SECTION 11-15-470 RELATING TO THE MATURITIES OF REFUNDING BONDS, SO AS TO REMOVE THE RESTRICTIONS AS TO MINIMUM PRINCIPAL MATURITY DATES OF REFUNDING BONDS; AND TO AMEND SECTION 11-15-520 RELATING TO THE SALE OF REFUNDING BONDS, SO AS TO DELETE THE REQUIREMENT THAT THESE BONDS BE SOLD ONLY AT PUBLIC SALES AND PROVIDE THAT THE BONDS MAY BE SOLD AT PRIVATE OR PUBLIC SALES AS DETERMINED BY THE GOVERNING BODY OF THE ISSUER.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that as a consequence of a decrease in interest rates over the past several years, general obligation bonds issued by political subdivisions of the State may now in some circumstances be economically refunded, resulting in considerable savings to the taxpayers of these political subdivisions. The Refunding Act, codified as Article 5, Chapter 11, Code of Laws of South Carolina, 1976, provides a vehicle whereby general obligation bonds may be refunded. The Refunding Act, however, contains several restrictions which impede the ability of political subdivisions to maximize the level and scheduling of savings achievable through a refunding transaction. These restrictions include a requirement that refunding bonds be sold at public sale; this effectively prevents issuers from taking advantage of current market conditions and poses a substantial risk to the ability of issuers to achieve a savings through refunding. Also, the Refunding Act, requires that the principal of refunding bonds maturing in any one year be not less than two percent of the aggregate principal amount of the issue. This restrictions limits the extent to which savings achieved through a refunding may be tailored to the greatest benefit of taxpayers, especially where less than all of the outstanding bonds of an issue are to be refunded. The Refunding Act is also, by its terms, limited to the refunding of outstanding general obligation bonds. The General Assembly finds that it would be of substantial benefit to taxpayers to permit political subdivisions to convert lease-purchase financings to general obligation bond financings, provided that a savings is achieved in the process.
SECTION 2. Article 5, Chapter 15, Title 11 of the 1976 Code is amended by adding:
"Section 11-15-610. Any issuer which is the lessee of property, real or personal, under a lease-purchase financing may issue bonds pursuant to this chapter for the purpose of paying the remaining amounts of rent to become payable pursuant to such financing, including interest, and any redemption premium."
SECTION 3. Chapter 21, Title 11 of the 1976 Code is amended by adding:
"Section 11-21-90. Any public agency which is the lessee of property, real or personal, under a lease-purchase financing agreement may issue bonds pursuant to this chapter for the purpose of paying the remaining amounts of rent to become payable pursuant to such financing, including interest and any redemption premium."
SECTION 4. Section 11-15-470 of the 1976 Code is amended to read:
"Section 11-15-470. Such refunding bonds shall mature in such annual series or installments, equal or unequal in amount, as the governing body shall provide, except that:
(1) The first maturing bonds shall mature within five years from the date as of which they are issued; not later than three years from the date of maturity of the earliest maturing refunded bonds; and
(2) Not less than two per cent of the aggregate of the issue shall mature in any year; and
(3) (2) No bonds shall mature later than forty years from the date as of which they are issued."
SECTION 5. This act takes effect upon approval by the Governor.