S 866 Session 109 (1991-1992)
S 0866 General Bill, By J.M. Waddell, Drummond, Leatherman, I.E. Lourie,
S.S. Martschink, M.F. Mullinax, J.V. Smith and N.W. Smith
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 5
in Title 48, relating to environmental protection and conservation, by
enacting the South Carolina Water Quality Revolving Fund Authority Act so as
to create the South Carolina Water Quality Revolving Fund Authority; to
provide for the powers of the Authority; to authorize the establishment by the
Authority of a revolving fund for the purpose of making loans to project
sponsors for the financing of wastewater treatment facilities and other clean
water projects; to authorize the Authority to issue bonds for the purpose of
providing funds for deposit to the Revolving Fund; to provide for the method
of issuance and securing of the bonds and the payment; to authorize the
deposit in the Revolving Fund of federal grants, state appropriations, loan
repayments, and other amounts available to the Authority; to authorize the
making of loans by the Authority to project sponsors and the borrowing by
project sponsors from the Authority; and to repeal Chapter 6 of Title 48,
relating to the Water Pollution Revolving Fund.
04/09/91 Senate Introduced and read first time SJ-19
04/09/91 Senate Referred to Committee on Finance SJ-19
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING CHAPTER 5 IN TITLE 48, RELATING TO
ENVIRONMENTAL PROTECTION AND CONSERVATION, BY
ENACTING THE SOUTH CAROLINA WATER QUALITY
REVOLVING FUND AUTHORITY ACT SO AS TO CREATE THE
SOUTH CAROLINA WATER QUALITY REVOLVING FUND
AUTHORITY; TO PROVIDE FOR THE POWERS OF THE
AUTHORITY; TO AUTHORIZE THE ESTABLISHMENT BY THE
AUTHORITY OF A REVOLVING FUND FOR THE PURPOSE OF
MAKING LOANS TO PROJECT SPONSORS FOR THE FINANCING
OF WASTEWATER TREATMENT FACILITIES AND OTHER
CLEAN WATER PROJECTS; TO AUTHORIZE THE AUTHORITY
TO ISSUE BONDS FOR THE PURPOSE OF PROVIDING FUNDS
FOR DEPOSIT TO THE REVOLVING FUND; TO PROVIDE FOR
THE METHOD OF ISSUANCE AND SECURING OF THE BONDS
AND THE PAYMENT; TO AUTHORIZE THE DEPOSIT IN THE
REVOLVING FUND OF FEDERAL GRANTS, STATE
APPROPRIATIONS, LOAN REPAYMENTS, AND OTHER
AMOUNTS AVAILABLE TO THE AUTHORITY; TO AUTHORIZE
THE MAKING OF LOANS BY THE AUTHORITY TO PROJECT
SPONSORS AND THE BORROWING BY PROJECT SPONSORS
FROM THE AUTHORITY; AND TO REPEAL CHAPTER 6 OF
TITLE 48, RELATING TO THE WATER POLLUTION REVOLVING
FUND.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds:
(1) This State is singularly fortunate in the quantity and quality
of its water resources, which water resources are of critical importance
to the health and welfare of the citizens of South Carolina and this state's
economy.
(2) In order to ensure the preservation of this state's water
resources it is necessary that measures be taken by various governmental
entities to provide facilities for the supply and treatment of water in
order to provide an adequate, safe, and reliable water supply system and
an effective and adequate wastewater treatment system.
(3) The Federal Water Pollution Control Act, Chapter 26, Title
33, United States Code (the Clean Water Act), as amended by the Water
Quality Act of 1987, provides for federal grants to the states to fund
state water pollution control revolving funds and requires that the states
contribute at least twenty percent in matching funds to the revolving
fund.
(4) Pursuant to Chapter 6 of Title 48, Code of Laws of South
Carolina, 1976, the State Budget and Control Board established the State
Water Pollution Control Revolving Fund for the purpose of making
loans of the federal grant funds and state matching funds pursuant to the
Clean Water Act.
SECTION 2. The purpose of the South Carolina Water Quality
Revolving Fund Authority Act is to establish an authority to administer
the revolving fund established pursuant to Chapter 6, Title 48 of the
1976 Code and the loans made from the fund and to provide additional
financing in the future to local governmental units for the purpose of
providing projects.
SECTION 3. Title 48 of the 1976 Code is amended by adding:
"Chapter 5
South Carolina Water Quality
Revolving Fund Authority Act
Section 48-5-10. This chapter may be cited as the South Carolina
Water Quality Revolving Fund Authority Act.
Section 48-5-20. As used in this chapter, unless a different
meaning clearly appears from the context:
(1) `Agency' means the United States Environmental Protection
Agency.
(2) `Authority' means the South Carolina Water Quality
Revolving Fund Authority.
(3) `Bonds' means bonds, notes, debentures, interim certificates,
commercial paper, bond, grant, or revenue anticipation notes, or any
other evidence of indebtedness of the authority.
(4) `Clean water act' means the Federal Water Pollution Control
Act, Chapter 26, Title 33, United States Code, as modified or amended,
and a successor, substitute, or replacement provisions of law, and the
rules and regulations promulgated under it.
(5) `Department' means the South Carolina Department of Health
and Environmental Control.
(6) `Fund' means the water pollution control revolving loan fund
originally established pursuant to Section 48-6-20 and comprising
monies derived from capitalization grants pursuant to the Clean Water
Act and associated state match money, as well as repayments of all
principal and interest on loans made from the fund and any other money
committed to the fund.
(7) `Loan' means a loan from the authority to a project sponsor for
the purpose of financing all or a portion of the cost of a project.
(8) `Loan agreement' means a written agreement between the
authority and a project sponsor with respect to a loan.
(9) `Loan obligation' means a bond, note, or other evidence of
obligation issued by a project sponsor to evidence its indebtedness under
a loan agreement with respect to a loan.
(10) `Project' means:
(a) publicly owned treatment works, or the capacity or rights to
the capacity of a publicly owned treatment work, including any devices
and systems used in the storage, treatment, recycling, and reclamation
of municipal sewage or industrial wastes of a liquid nature or necessary
to recycle or reuse water at the most economical cost over the estimated
life of the works, including intercepting sewers, outfall sewers, sewage
collection systems, pumping, power, and other equipment and their
appurtenances; extensions, improvements, remodeling, additions and
alterations thereof; elements essential to provide a reliable recycled
supply such as standby treatment units; and any works, including site
acquisition of the land that will be an integral part of the treatment
process (including land used for the storage of treated wastewater in land
treatment systems before land application), or is used for ultimate
disposal of residues resulting from the treatment and any other method
or system for preventing abating, reducing, storing, treating, separating,
or disposing of municipal waste, including storm water runoff and waste
in combined storm water and sanitary sewer systems;
(b) management programs authorized under the Clean Water
Act;
(c) development and implementation of a conservation and
management plan authorized under the Clean Water Act; and
(d) other projects as the authority and the department
determine are permissible uses of the fund under the terms of the Clean
Water Act to the extent then applicable.
(11) `Project sponsor' means a county, municipality, special
purpose, or special service district, commissioners of public works, or
any other public body or agency of the State which may own or operate
a project; this term includes any combination of two or more of these
entities acting jointly to construct, own, or operate a project.
Section 48-5-30. There is created the South Carolina Water
Quality Revolving Fund Authority. The authority is a public
instrumentality of this State and the exercise by it of a power conferred
in this chapter is the performance of an essential public function. The
members of the State Budget and Control Board comprise the authority.
Section 48-5-40. The authority has all powers necessary, useful,
or appropriate to fund, invest, use, and administer the fund, including,
but not limited to, the power to:
(1) have perpetual succession as a public body corporate and as
a political subdivision of the State;
(2) adopt, promulgate, amend, and repeal bylaws and regulations
not inconsistent with this chapter for the administration of its affairs and
the implementation of its functions in accordance with the provisions of
Chapter 23 of Title 1;
(3) sue and be sued in its own name;
(4) have an official seal and alter it at will although the failure to
affix the seal does not affect the validity of an instrument executed on
behalf of the authority;
(5) make and service loans, enter into loan agreements, accept and
enforce loan obligations, and provide other forms of financial assistance
permitted by this chapter;
(6) make and execute contracts and all other instruments and
agreements necessary or convenient for the performance of its duties and
the exercise of its powers and functions;
(7) establish (a) policies and procedures for the making and
administration of loans and (b) fiscal controls and accounting procedures
to ensure proper accounting and reporting by the authority and project
sponsors;
(8) sell, convey, mortgage, pledge, lease, exchange, transfer, and
otherwise dispose of all or any part of its properties and assets;
(9) hire staff and employ agents, advisers, consultants, and other
employees, including attorneys, financial advisers, engineers, and other
technical advisers and public accountants and determine their duties and
compensation;
(10) procure insurance against a loss in connection with its
property, assets, or activities including insurance against liability for its
acts or the acts of its employees or agents;
(11) procure insurance, guarantees, letters of credit, and other
forms of collateral or security or credit support from a public or private
entity, including a department, agency, or instrumentality of the United
States or of this State, for the payment of bonds issued by it, including
the power to pay premiums or fees on insurance, guarantees, letters of
credit, and other forms of collateral or security or credit support;
(12) receive and accept from any source aid, grants, and
contributions of money, property, labor, or other things of value to be
used to carry out the purposes of this chapter subject to the conditions
upon which the aid, grants, or contributions are made;
(13) enter into agreements with a department, agency, or
instrumentality of the United States or of this State for the purpose of
planning and providing for the financing of projects;
(14) collect, or authorize the trustee under a trust indenture
securing bonds to collect, amounts due under the loan agreement or loan
obligation, including taking the action required to obtain payment of
sums in default;
(15) enter into contracts or agreements for the servicing and
processing of loan agreements or loan obligations;
(16) invest or reinvest its funds as permitted by applicable law;
(17) unless restricted under an agreement with holders of bonds,
consent to a modification with respect to the rate of interest, time, and
payment of an installment of principal or interest, or other term of a loan
agreement or loan obligation;
(18) establish and revise, amend and repeal, and collect fees and
charges in connection with activities or services rendered by the
authority;
(19) perform an act necessary or convenient to the exercise of the
powers granted or reasonably implied by this chapter; and
(20) disburse monies from the fund to the department and the
authority for program, project, loan and fund management.
Section 48-5-50. (A) The fund established pursuant to the
former provisions of Chapter 6 of Title 48 is continued in existence and
held and administered by the authority in accordance with the provisions
of this chapter and policies, rules, regulations, directives, and
agreements as may be promulgated or entered into by the authority
pursuant to this chapter. Earnings on balances in the fund must be
credited to the fund. Amounts remaining in the fund at the end of a
fiscal year accrue only to the credit of the fund. Amounts in the fund
must be available in perpetuity for the purpose of providing financial
assistance in accordance with the provisions of this chapter and the
Clean Water Act.
(B) There must be deposited in the fund:
(1) federal capitalization grants and awards or other federal
assistance received by the department under authority of the Clean
Water Act for purposes of the fund;
(2) funds appropriated by the General Assembly for deposit
to the fund;
(3) payments received from a project sponsor in repayment of
a loan, including amounts withheld by the State Treasurer and paid to
the authority pursuant to Section 48-5-170;
(4) net proceeds of bonds issued by the authority;
(5) interest or other income earned on the investment of
monies in the fund; and
(6) additional monies made available from public or private
sources for the purposes for which the fund has been established.
The authority may establish accounts and subaccounts within the
fund as considered desirable to effectuate the purposes of this chapter,
to comply with the provisions of a bond resolution, or to meet a
requirement of the Clean Water Act.
(C) Amounts in the fund may be used only:
(1) to make loans to project sponsors in accordance with
provisions of this chapter and the Clean Water Act;
(2) to buy or refinance debt obligations of project sponsors at
or below market rates, if the debt obligations were incurred after March
7, 1985;
(3) to guarantee, or purchase insurance for, bonds, notes, or
other evidences of obligation issued by a project sponsor for the purpose
of financing all or a portion of the cost of a project, if the action
improves credit market access or reduces interest rates;
(4) as a source of revenue or security for the payment of
principal and interest on bonds issued by the authority if the proceeds of
the sale of the bonds are deposited in the fund;
(5) to earn interest on fund accounts;
(6) for the reasonable costs of administering the fund and
conducting activities under the Clean Water Act; and
(7) for any other purpose authorized by the Clean Water Act.
Section 48-5-60. The department may:
(1) promulgate regulations with authority input, to effectuate the
provisions of this chapter and the Clean Water Act;
(2) develop a priority system with authority input which ensures
consistency with the Clean Water Act for the fund;
(3) prepare an annual plan in accordance with the Clean Water
Act after providing for input from the authority and public comment and
review;
(4) receive monies from the fund for program and project
management activities of the fund; and
(5) enter into binding agreements with the agency as necessary to
effect the implementation of this chapter.
Section 48-5-70. (A) All project sponsors may borrow money
from the authority through loan agreements and the issuance of loan
obligations in favor of the authority. Project sponsors may enter into
and issue the agreements and evidences of indebtedness comprising the
loan agreements and loan obligations in accordance with the provisions
of this chapter, and no further statutory authorization is required for the
issuance and delivery by project sponsors of their loan obligations. All
project sponsors entering into loan agreements and issuing loan
obligations to the authority may perform any acts, take any action, adopt
any proceedings, and make and carry out any contracts with the
authority which are contemplated by this chapter. The contracts need
not be identical among all project sponsors but may be structured as
determined by the authority according to the needs of the contracting
project sponsors and the authority.
(B) In addition to the authorizations contained in this chapter, all
other statutes permitting project sponsors to borrow money and issue
obligations, including both general obligation and revenue bonds, may
be utilized by project sponsors borrowing money from the authority to
the extent considered necessary or useful by the project sponsor in
connection with a loan agreement and the issuance, securing, or sale of
its loan obligation to the authority.
Section 48-5-80. (A) Subject to the requirements of subsections
(B) and (C) of this section, the authority may borrow money and issue
its bonds, including refunding bonds, in amounts it determines necessary
or convenient to provide funds to carry out its purposes and powers and
to pay all costs and expenses incurred in connection with the issuance
of bonds.
(B) At or before the delivery of bonds by the authority, the
authority shall, by resolution of the authority, certificate of an officer or
employee of the authority or other manner as the authority determines,
establish with respect to all bonds of the authority then outstanding and
then proposed to be delivered that, following the period during which
interest on bonds or loan obligations is capitalized, either:
(1) the ratio of all assets, including, without limitation, loan
obligations, reserves, and any amounts to be received pursuant to an
agreement with the agency held, or to be held, as security for all the
bonds to the principal amount of all the bonds is not less than 1.10 to 1;
or
(2) the ratio of anticipated annual receipts to be derived from
assets described in (1), above, to debt service on all the bonds is
estimated to be not less than 1.10 to 1.
(C) With respect to bonds, or that portion of an issue of bonds,
issued to refund outstanding bonds of the authority, in lieu of the
requirements of subsection (B) of this section, the bonds may be issued
if the authority establishes with respect to the issuing of the bonds that
debt service with respect to the refunding bonds is not expected to
exceed debt service with respect to the refunded bonds in a year in
which the refunded bonds were outstanding.
Section 48-5-90. The authority may pledge its revenues or funds
to the payment of its bonds, subject only to prior agreement with the
holders of particular bonds which may have pledged specific money or
revenue. Bonds may be secured by a pledge of a loan obligation owned
by the authority, a grant, contribution, or guaranty from the United
States, the State, or a corporation, association, institution or person other
property or assets of the authority, or a pledge of money, income, or
revenue of the authority from any source.
Section 48-5-100. Bonds issued by the authority do not constitute
a debt or a pledge of the faith and credit of this State or its political
subdivisions other than the authority, but are payable solely from the
revenue, money, or property of the authority as provided for in this
chapter. The bonds issued do not constitute an indebtedness of this State
within the meaning of a constitutional or statutory limitation. No
members of the authority or a person executing bonds of the authority
is liable personally on the bonds by reason of their issuance or
execution. Each bond issued under this chapter must contain on its face
a statement to the effect that:
(1) neither this State, nor its political subdivisions, nor the
authority is obligated to pay the principal of or interest on the bond or
other costs incident to the bond except from the revenue, money, or
property of the authority pledged;
(2) neither the faith and credit nor the taxing power of this State,
or its political subdivisions, is pledged to the payment of the principal
of or interest on the bonds;
(3) the authority does not have taxing power.
Section 48-5-110. (A) The bonds of the authority must be
authorized by a resolution of the authority and must be in the form and
executed in the manner provided in the resolution. The bonds must bear
the date and mature at the time which the resolution provides, except
that no bond may mature more than thirty years from its date of issue.
The bonds may be in the denominations, be executed in the manner, be
payable in the medium of payment, be payable at the place and at the
time, and be subject to redemption or repurchase and contain other
provisions determined by the authority before their issuance. The bonds
may bear interest payable at a time and at a rate as determined by the
authority, including the determination of interest rates by agents
designated by the authority under guidelines established by it. Bonds
may be sold by the authority at public or private sale at the price it
determines and approves.
(B) Bonds may be secured by a trust indenture between the
authority and a corporate trustee, which may be the State Treasurer or
a bank having trust powers or a trust company, designated by the State
Treasurer doing business in South Carolina. A trust indenture may
contain provisions for protecting and enforcing the rights and remedies
of the bondholders which are reasonable and proper, including
covenants setting forth the duties of the authority in relation to the
exercise of its powers and the custody, safekeeping, and application of
its money. The authority may provide by the trust indenture for the
payment of the proceeds of the bonds and all or any part of the revenues
of the authority to the trustee under the trust indenture or to some other
depository, and for the method of its disbursement with safeguards and
restrictions prescribed by it.
(C) A resolution or trust indenture pursuant to which bonds are
issued may contain provisions which are part of the contract with the
holders of the bonds as to such matters relating to the terms of the bonds
or the security or protection of the holders of the bonds which the
authority considers appropriate.
Section 48-5-120. A pledge made by the authority is valid and
binding from the time the pledge is made. The revenue, money, or
property pledged and thereafter received by the authority is immediately
subject to the lien of the pledge without physical delivery or further act.
The lien of a pledge is valid and binding as against all parties having
claims of any kind in tort, contract, or otherwise against the authority,
irrespective of whether the parties have notice of the pledge. No
recording or filing of the resolution authorizing the issuance of bonds,
the trust indenture securing bonds, or other instrument including filings
under the Uniform Commercial Code is necessary to create or perfect a
pledge or security interest granted by the authority to secure bonds, but
the record of the proceedings relative to the issuance of any bonds must
be filed as prescribed by Section 11-15-20.
Section 48-5-130. Subsequent amendments to this chapter may not
limit the rights vested in the authority with respect to agreements made
with, or remedies available to, the holders of bonds issued under this
chapter before the enactment of the amendments until the bonds, with all
premiums and interest on them, and all costs and expenses in connection
with the proceeding by or on behalf of the holders, are fully met and
discharged.
Section 48-5-140. The authority in performing an essential
governmental function in the exercise of the powers conferred upon it
is not required to pay taxes or assessments upon property or upon its
operations or the income from them, or taxes or assessments upon
property or loan obligation acquired or used by the authority or upon the
income from them. Bonds issued by the authority, the transfer of bonds,
and the income from them, are free from taxation and assessment of
every kind by this State, and by the project sponsors and other political
subdivisions of this State.
Section 48-5-150. The bonds issued by the authority are legal
investments in which all public officers or public bodies of the State, its
political subdivisions, all municipalities and political subdivisions, all
insurance companies and associations and other persons carrying on
insurance business, all banks, bankers, banking associations, trust
companies, savings banks, savings associations, including savings and
loan association investment companies, and other persons carrying on
a banking business, all administrators, guardians, executors, trustees, and
other fiduciaries, and all other persons who are now or may be
authorized in the future to invest in bonds or other obligations of this
State, may invest funds in their control or belonging to them. The bonds
of the authority are also securities which may be deposited with and
received by all public officers and bodies of this State or an agency or
political subdivision of this State and all municipalities and public
corporations for a purpose for which the deposit of bonds or other
obligations of this State is now or may later be required by law.
Section 48-5-160. The authority shall submit, following the close
of each fiscal year, an annual report of its activities for the preceding
year to the Governor and to the members of the General Assembly. The
authority in cooperation with the department shall also submit an annual
report to the agency in accordance with requirements of the Clean Water
Act. The State Auditor or, upon his approval, an independent certified
public accountant shall perform an audit of the books and accounts of
the authority at least once in each fiscal year.
Section 48-5-170. If at any time a project sponsor fails to effect the
punctual payment of an amount payable by the project sponsor to the
authority pursuant to a loan agreement or other agreement between the
project sponsor and the authority, the State Treasurer shall, upon
notification by the authority of the failure by the project sponsor to make
the payment, and subject to the withholding of amounts pursuant to
Article X, Section 14, Paragraph (5) of the constitution of this State,
withhold from the project sponsor sufficient monies from a state
appropriation to the project sponsor and apply so much as necessary to
the payment of the amount. All appropriations for project sponsors are
subject to the provisions of this section.
Section 48-5-180. The provisions of this chapter must be liberally
construed to the end that its beneficial purposes may be effectuated. No
proceeding, notice, or approval is required for the issuance of bonds of
the authority or loan obligations by a project sponsor or instruments or
the security for the bonds or loan obligation, except as provided in this
chapter."
SECTION 4. Chapter 6, Title 48 of the 1976 Code is repealed.
SECTION 5. This act takes effect upon approval by the Governor.
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