S 1282 Session 111 (1995-1996)
S 1282 General Bill, By Hayes, Gregory, Peeler and Short
Similar(H 4637)
A Bill to amend Chapter 125, Title 59, Code of Laws of South Carolina, 1976,
relating to Winthrop University, by designating Sections 59-125-10 through
59-125-120 as Article 1, entitled "General Provisions", and by adding Article
3 enacting the Winthrop University Facilities Revenue Bond Act so as to
provide authority for the University to issue revenue bonds to acquire,
construct, renovate, and equip certain revenue-producing facilities, and to
provide the terms and conditions under which these bonds may be issued,
including those revenues that may be pledged for their repayment.
03/21/96 Senate Introduced and read first time SJ-6
03/21/96 Senate Referred to Committee on Education SJ-6
A BILL
TO AMEND CHAPTER 125, TITLE 59, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO WINTHROP
UNIVERSITY, BY DESIGNATING SECTIONS 59-125-10
THROUGH 59-125-120 AS ARTICLE 1, ENTITLED
"GENERAL PROVISIONS", AND BY ADDING
ARTICLE 3 ENACTING THE WINTHROP UNIVERSITY
FACILITIES REVENUE BOND ACT SO AS TO PROVIDE
AUTHORITY FOR THE UNIVERSITY TO ISSUE REVENUE
BONDS TO ACQUIRE, CONSTRUCT, RENOVATE, AND
EQUIP CERTAIN REVENUE-PRODUCING FACILITIES, AND
TO PROVIDE THE TERMS AND CONDITIONS UNDER
WHICH THESE BONDS MAY BE ISSUED, INCLUDING
THOSE REVENUES THAT MAY BE PLEDGED FOR THEIR
REPAYMENT.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Sections 59-125-10 through 59-125-120 are
designated Article 1, Chapter 125 of Title 59 of the 1976 Code, and
entitled "General Provisions."
SECTION 2. Chapter 125, Title 59 of the 1976 Code is
amended by adding:
"Article 3
Winthrop University Facilities
Revenue Bond Act
Section 59-125-310. (A) The General Assembly finds that is
desirable to provide continuing and general statutory authority for
Winthrop University to incur debt for, among other things, the
purposes of providing funds to acquire, construct, renovate, and
equip certain revenue-producing auxiliary facilities, which debt is
secured by a pledge of the revenues derived from the operation of
some or all of the facilities. Winthrop University has demonstrated
need for additional funds to provide for acquisition, construction,
renovation, and equipping of these facilities. These facilities are
needed to replace or renovate aging facilities and to provide
additional facilities all to the end that the educational environment
at Winthrop University will be enhanced for the benefit of present
and potential students at Winthrop University.
(B) Consideration has been given to this need and to the
methods of funding it. It has been determined to be in the best
interests of the people of this State to authorize Winthrop
University to acquire, construct, renovate, and equip additional
facilities and to incur indebtedness for these purposes which is
payable from the revenues derived from the operation of these
facilities to the extent and under the conditions provided for in this
article.
Section 59-125-320. As used in this article:
(1) `Bond' or `bonds' means any note, bond, installment
contract, or other evidence of indebtedness issued pursuant to this
chapter.
(2) `Winthrop' means Winthrop University.
(3) `Facilities' means any or all of the following facilities
operated to provide for the students, faculty, or staff at Winthrop:
dining or food service facilities; laundry facilities; canteen facilities;
vending machines; convenience stores; any other facilities for the
sale of sundry items; health services; book stores, parking lots and
vehicle registration; and all furniture, furnishings, and equipment in
them, which are now owned by Winthrop, or which may be
acquired by Winthrop for any of these purposes.
(4) `Revenues' of any facilities means the entire receipts of
Winthrop from the operation of the facilities. `Net revenues' means
these receipts reduced by the necessary expenses for operation and
maintenance of the facilities.
(5) `Board' means the State Budget and Control Board.
(6) `Trustees' means the Board of Trustees of Winthrop or
any successor body.
Section 59-125-330. The trustees are authorized to acquire
additional facilities and to improve and renovate existing facilities
to the extent they determine to be necessary; and the proceeds of
bonds authorized by this article are made available for that purpose.
The trustees also are authorized to refund bonds that may from time
to time be outstanding pursuant to this article by exchange or
otherwise.
Section 59-125-340. Upon receiving the approval of the board
and upon review by the Joint Bond Review Committee, the trustees
may from time to time borrow such sums as may be necessary to
accomplish the purpose of this article and to evidence these
borrowings by bonds issued pursuant to this article in such
aggregate principal amount as they determine, except that
notwithstanding any other provisions of this article, there may not
be outstanding at any time bonds issued pursuant to this article in
excess of twenty-five million dollars.
Section 59-125-350. Bonds issued pursuant to this article must
be payable from the revenues or the net revenues derived by
Winthrop from these facilities as designated by the trustees with
respect to the bonds. The trustees may abandon the use of any
portion of the facilities or sell or dispose of any portion of the
facilities upon receipt of a written recommendation by the chief
financial officer of Winthrop to the effect that the action shall not
adversely affect the ability of Winthrop to discharge its obligations
to the holders of bonds issued pursuant to this article and upon the
further conditions as prescribed in the resolution of the trustees
providing for the issuance of bonds. The bonds issued pursuant to
this article may be further secured by the additional pledges of
other revenues or fees of Winthrop as it may be authorized to grant
pursuant to other laws of this State.
Section 59-125-360. The faith and credit of the State may not
be pledged for the payment of the principal and interest of the
bonds, and there must be on the face of each bond a statement
plainly worded to that effect. Neither the trustees nor any other
person signing the bonds is personally liable for them.
Section 59-125-370. In order to avail themselves of the
authorizations set forth in this article, the trustees shall adopt
resolutions providing for the issuance of bonds of Winthrop, within
the limitations mentioned in this article which must prescribe the
tenor, terms, and conditions of the bonds. The bonds must be
issued as serial or term bonds, maturing in equal or unequal
amounts, at such times and on such occasions as the trustees
determine. The last maturing bonds of any issue must be expressed
to mature not later than fifty years from their date, and the first
maturing bonds of any issue, issued pursuant to this article, falls
due within five years from their date. They must bear such rates of
interest, payable on such occasion as the trustees prescribe, and the
bonds must be in such denominations, payable in such medium of
payment, and at such place as such resolutions prescribe. All bonds
may be issued with a provision permitting their redemption on any
interest payment date before their respective maturities. Bonds
made subject to redemption before their stated maturities may
contain a provision requiring the payment of a premium for the
privilege of exercising the right of redemption in such amount or
amounts as the trustees prescribe in the resolutions authorizing their
issuance. All bonds that are subject to redemption must contain a
statement to that effect on the fact of each bond. The resolutions
authorizing their issuance must contain provisions specifying the
manner of call and the notice of call that must be given.
Section 59-125-380. The bonds authorized by this article and all
interest to become due on them have the tax exempt status
prescribed by Section 12-2-50.
Section 59-125-390. It is lawful for all executors,
administrators, guardians, and fiduciaries, all sinking fund
commissions, the board, as trustee of the South Carolina Retirement
System, and all other governmental entities within this State to
invest any monies in their hands in the bonds.
Section 59-125-400. The bonds and coupons, if any, attached to
the bonds, are executed manually or by facsimile in the name of
Winthrop in the manner and by persons as the trustees from time to
time determine, and the seal of Winthrop must be affixed to or
impressed or reproduced on each bond. Any coupons attached to
the bonds must be authenticated by the facsimile signature of one or
more of the persons signing the bonds. The bonds, in the discretion
of the trustees, may be registerable as to principal and interest on
books kept for them by or on behalf of Winthrop, including by a
corporate registrar. The delivery of the executed bonds is valid
notwithstanding changes in officers or in the seal occurring after the
execution. Notwithstanding the foregoing, the bonds, in the
discretion of the trustees, may be issued as fully registered
noncertificated book-entry securities.
Section 59-125-410. The bonds must be disposed of in such
manner as the trustees determine, except that no sale, privately
negotiated without public advertisement, may be made unless the
approval of the board is obtained. If the trustees elect to sell the
bonds at public sale, at least one advertisement of them must appear
in some newspaper of general circulation in this State not less than
seven days before the date fixed for the opening of bids. The
bonds may be sold at such discount or for such premium as may be
determined by the trustees or their designee as being in the best
interest of Winthrop.
Section 59-125-420. To the end that the payment of the
principal and interest of the bonds authorized by this article is
secured adequately, the trustees of Winthrop may:
(1) issue bonds in such amount within the limitations provided
for in this article as the trustees consider necessary. It is lawful for
the trustees to use a portion of the principal proceeds derived from
any sale of bonds, except bonds issued to effect refunding of
outstanding bonds, to meet the payment of interest on the bonds for
a period equal to the period of construction of the facilities to be
financed with the proceeds of such bonds plus a period not
exceeding six months. It is recognized by the General Assembly
that until the facilities to be constructed with the proceeds of the
loan are completed, an undue burden may be imposed upon the
existing revenues at that time;
(2) pledge the revenues or the net revenues of the facilities as
designated by the trustees in connection with the issuance of the
bonds whether then or after that time to be existing and to pledge
any otherwise available gifts, grants, or donations to Winthrop for
the payment of the principal of and interest on the bonds as they
respectively mature. However, any surplus of the revenues or net
revenues available after the payment of costs of operation and
maintenance of the facilities and of debt service on the bonds, and
the establishment of any debt service reserve obligation under the
proceedings providing for the issuance of the bonds, is placed in a
contingency and improvement fund for the facilities in order to
restore depreciated or obsolete items of the facilities, to make
improvements to the facilities, to defray the cost of unforeseen
contingencies with regard to the facilities, to prevent defaults under
such bonds, or to redeem any of the bonds;
(3) further secure the bonds with a pledge of any additional
revenues or fees of Winthrop as may be authorized under other
laws of this State;
(4) covenant that no facilities owned by Winthrop may be used
free of charge, or to specify and limit the facilities which may be
used free of charge;
(5) covenant to establish and maintain a system of rules as
will ensure the continuous use and occupancy of the facilities whose
revenues are pledged to secure any bonds;
(6) covenant that an adequate schedule of charges be established
and maintained for the facilities designated by the trustees, whose
revenues or net revenues are pledged to secure the bonds, to the
extent necessary to produce sufficient revenues to:
(a) pay the cost of operating and maintaining the facilities,
whose revenues or net revenues are pledged for the payment of the
bonds, including the cost of fire, extended coverage and use, and
occupancy insurance;
(b) pay the principal and interest of the bonds as they
respectively become due;
(c) create and at all times maintain an adequate debt
service reserve fund to meet the payment of the principal and
interest; and
(d) create and at all times maintain an adequate reserve for
contingencies and for major repairs and replacement.
(7) covenant against the mortgaging or disposing of the facilities
designated by the trustees, whose revenues or net revenues are
pledged for the payment of the bonds, and against permitting or
suffering any lien to be created on them equal or superior to the
lien created for the benefit of such bonds. The trustees are
empowered to discontinue the use of or demolish obsolete facilities
and to reserve the right, under the terms they prescribe, to issue
additional bonds on a parity with the bonds authorized by this
article, if at some later date they obtain legislative authorization for
the issuance of additional bonds;
(8) covenant as to the use of the proceeds derived from the sale
of any bonds issued pursuant to this article;
(9) provide for the terms, form, registration, exchange,
execution, and authentication of bonds, and for the replacement of
lost, destroyed, or mutilated bonds;
(10) make covenants with respect to the use of the facilities to be
constructed with the proceeds of the bonds authorized by this article
and of the other facilities whose revenues must be pledged for the
payment of the bonds;
(11) covenant that all revenues or net revenues of the particular
facilities pledged for the payment of the bonds must be segregated
into special funds and that the funds must be used solely for the
purposes for which they are intended and for no other purpose;
(12) covenant for the mandatory redemption of bonds on the
terms and conditions as the resolutions authorizing the bonds
prescribe;
(13) provide for early defeasance of bonds through the
establishment of special escrow accounts maintained by a corporate
trustee, which may be the State Treasurer, of cash or United States
government obligations, or obligations of agencies of them, which
escrows may be funded with proceeds of bonds issued under the
provisions of this article or revenues or other funds available to
Winthrop;
(14) prescribe the procedure, if any, by which the terms of the
contract with the bondholders may be amended, the number of
bonds whose holders must consent to it, and the manner in which
consent is given;
(15) covenant as to the maintenance of the facilities, whose
revenues must be pledged for the payment of the bonds, the
insurance to be carried on them, and the use and disposition of
proceeds from any insurance policy;
(16) prescribe the events of default and the terms and conditions
upon which all or any bonds become or may be declared due before
maturity and the terms and conditions upon which the declaration
and its consequences may be waived;
(17) impose a statutory lien upon the facilities designated by the
trustees, the revenues or net revenues of which must be pledged to
secure the bonds. The lien must extend to the facilities, to their
appurtenances and extension, to their additions, improvements, and
enlargements to the extent specified in the resolutions and must
inure to the benefit of the holders of the bonds secured by the lien.
The facilities remain subject to the statutory lien until the payment
in full of the principal and interest of the bonds. A holder of a
bond, or any of the coupons representing interest on them, either at
law or in equity, by suit, action, mandamus, or other proceedings,
may protect and enforce the statutory lien, and by suit, action,
mandamus, or other proceedings may enforce and compel
performance of all duties of the trustees, including the fixing of
sufficient rates, the proper segregation of the revenues, and the
proper application of them. However, the statutory lien may not be
construed to give the bond or coupon holder authority to compel the
sale of any of the facilities or any part of them;
(18) covenant that if there is a default in the payment of the
principal of or interest upon any of the bonds, a court having
jurisdiction in any proper action may appoint a receiver to
administer and operate the facilities designated by the trustees,
whose revenues or net revenues are pledged for the payment of the
bonds, with power to fix rates and charges for the facilities,
sufficient to provide for the payment of the expense of operating
and maintaining the facilities, and to apply the income and revenues
of the facilities to the payment of the bonds and the interest on
them;
(19) ) establish on or before the delivery of any bonds issued
pursuant to this article a debt service reserve fund and to cause it to
be deposited with a corporate trustee, who may be the State
Treasurer, and to that end, the trustees are empowered to utilize any
monies available for that purpose, including revenues previously
accumulated from the facilities before the issuance of bonds. In the
discretion of the trustees, in lieu of cash, the debt service reserve
fund may be funded with a surety bond, insurance policy, letter of
credit, line of credit, or similar guarantee. At the discretion of the
trustees, Winthrop may purchase an insurance policy insuring
payment of both principal and interest on any issuance of bonds
under the provisions of this article;
(20) appoint a corporate trustee, who may be the State Treasurer,
or paying agent to whom must be paid all or any portion of the
revenues or net revenues pledged to the payment of the bonds or
derived from the operation of the facilities, and to prescribe the
manner in which these revenues or net revenues must be utilized
and disposed of. The corporate trustee shall serve in a fiduciary
capacity as trustee for the bondholders under the resolutions of the
trustees authorizing the issuance of bonds.
Section 59-125-430. No time limit is set for the issuance of
bonds pursuant to this article."
SECTION 3. This act takes effect upon approval by the
Governor.
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