S 0725 General Bill, By Hayes
 A Bill 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.

   04/22/93  Senate Introduced and read first time SJ-2
   04/22/93  Senate Referred to Committee on Finance SJ-2
   01/19/94  Senate Committee report: Favorable with amendment
                     Finance SJ-15
   01/20/94  Senate Amended SJ-33
   01/20/94  Senate Read second time SJ-33
   01/25/94  Senate Read third time and sent to House SJ-11
   01/26/94  House  Introduced and read first time HJ-10
   01/26/94  House  Referred to Committee on Ways and Means HJ-10

COMMITTEE AMENDMENT ADOPTED

January 20, 1994

S. 725

S. Printed 1/20/94--S.

Read the first time April 22, 1993.

A BILL

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.