H 3002 Session 111 (1995-1996)
H 3002 General Bill, By Koon, Delleney, Kirsh, Knotts, Richardson and D. Smith
Similar(S 48)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
11-27-110 so as to provide that the principle amount of a lease purchase or
financing agreement is subject to the constitutional debt limit for political
subdivisions and that the payments made by the state under such an agreement
are deemed general obligation debt service for purposes of the constitutional
debt service limit on the state, to provide that the calculation of the
limitation on general obligation bonded indebtedness for future general
obligation bond issues must include the principle balance of any outstanding
financing agreement; and to amend the 1976 Code by adding Section 59-17-0120
so as to provide that school bonds called before maturity may be reissued only
if the payoff amount and the amount necessary to service the reissued bonds
does not increase by more than eight percent in a year the debt service on the
original bonded indebtedness and does not exceed the district's debt limit.
12/14/94 House Prefiled
12/14/94 House Referred to Committee on Ways and Means
01/10/95 House Introduced and read first time HJ-7
01/10/95 House Referred to Committee on Ways and Means HJ-8
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING SECTION 11-27-110 SO AS TO PROVIDE
THAT THE PRINCIPAL AMOUNT OF A LEASE PURCHASE
OR FINANCING AGREEMENT IS SUBJECT TO THE
CONSTITUTIONAL DEBT LIMIT FOR POLITICAL
SUBDIVISIONS AND THAT PAYMENTS MADE BY THE
STATE UNDER SUCH AN AGREEMENT ARE DEEMED
GENERAL OBLIGATION DEBT SERVICE FOR PURPOSES OF
THE CONSTITUTIONAL DEBT SERVICE LIMIT ON THE
STATE, TO PROVIDE THAT THE CALCULATION OF THE
LIMITATION ON GENERAL OBLIGATION BONDED
INDEBTEDNESS FOR FUTURE GENERAL OBLIGATION
BOND ISSUES MUST INCLUDE THE PRINCIPAL BALANCE
OF ANY OUTSTANDING FINANCING AGREEMENT; AND TO
AMEND THE 1976 CODE BY ADDING SECTION 59-17-120 SO
AS TO PROVIDE THAT SCHOOL BONDS CALLED BEFORE
MATURITY MAY BE REISSUED ONLY IF THE PAYOFF
AMOUNT AND THE AMOUNT NECESSARY TO SERVICE
THE REISSUED BONDS DOES NOT INCREASE BY MORE
THAN EIGHT PERCENT IN A YEAR THE DEBT SERVICE ON
THE ORIGINAL BONDED INDEBTEDNESS AND DOES NOT
EXCEED THE DISTRICT'S DEBT LIMIT.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 27, Title 11 of the 1976 Code is amended
by adding:
"Section 11-27-110. (A) As used in this section:
(1) `asset' means any real property and permanent
improvements thereon including structures, buildings, and fixtures;
(2) `bond act' means:
(a) the county bond act, as contained in Chapter 15 of
Title 4;
(b) the municipal bond act, as contained in Article 5,
Chapter 21 of Title 5;
(c) the school bond act as contained in Article 1, Chapter
71 of Title 59;
(d) the provisions contained in Articles 3 and 5 of Chapter
11 of Title 6 pertaining to special purpose districts;
(e) any provision of law by which the State may issue
obligations secured in whole or in part by the full faith, credit, and
taxing power of the State, and;
(f) any other law, general or special, providing for the
issuance of general obligation bonds by the State or any of its
political subdivisions;
(3) `constitutional debt limit' for the State or any political
subdivision of the State which has the power to incur general
obligation bonded indebtedness, means the limitation of the
principal amount of general obligation bonded indebtedness
specified in Article X of the Constitution;
(4) `enterprise financing agreement' means a financing
agreement entered into to provide an asset for a governmental
enterprise the revenues from which are expected to be sufficient to
pay the amounts due under the financing agreement;
(5) `financing agreement' means any contract entered into
after December 31, 1995, under the terms of which a governmental
entity acquires the use of an asset which provides:
(a) for payments to be made in more than one fiscal year,
whether by the stated term of the contract or under any renewal
provisions, optional or otherwise,
(b) that the payments thereunder are divided into principal
and interest components or which contain any reference to any
portion of any payment under the agreement being treated as
interest, and
(c) that title to the asset will be in the name of or be
transferred to the governmental entity if all payments scheduled or
provided for in the financing agreement are made, but the term
excludes any contracts entered into in connection with issues of
general obligation bonds or revenue bonds issued pursuant to
authorization provided in Article X of the Constitution;
(6) `governmental enterprise' means any activity undertaken
by a governmental entity which derives revenues from or because
of the activity on a basis other than the exercise of the power of
taxation by that governmental entity;
(7) `governmental entity' means:
(a) the State, whose general obligation debt service
payments are limited pursuant to Section 13, Article X of the
Constitution, or
(b) any political subdivision of the State including a
municipality, county, school district, special purpose district, or
similar entity, whose general obligation debt is limited as provided
in Sections 14 and 15, in Article X of the Constitution;
(8) `limited bonded indebtedness' means the amount of
bonded indebtedness that may be incurred by a governmental entity
without a referendum or, where the context requires, the amount of
such indebtedness then outstanding; and
(9) `principal balance' means the total amount, excluding any
amount characterized as interest, payable as of any time of
consideration under any financing agreement, including any
renewals or extensions of the agreement.
(B) A governmental entity described in subsection (A)(7)(b) of
this section may not enter into a financing agreement, other than an
enterprise financing agreement, if the principal balance of the
financing agreement, when added to the principal amount of limited
bonded indebtedness outstanding on the date of execution of the
financing agreement exceeds eight percent of the assessed value of
taxable property in the jurisdiction of the governmental entity unless
the financing agreement is approved by a majority of the electors
voting on the agreement in a referendum duly called for this
purpose by the governmental entity.
(C) If a governmental entity described in subsection (A)(7)(b) of
this section has outstanding any financing agreement, other than an
enterprise financing agreement on the date of issuance of any
limited bonded indebtedness pursuant to any bond act, the amount
of this limited bonded indebtedness plus the amount of all other
limited bonded indebtedness of the governmental entity, when
added to the principal balance under any financing agreement or
agreements of the governmental entity must not exceed the amount
of the governmental entity's constitutional debt limit unless this
bonded indebtedness is approved by a majority of the electors
voting on the bonded indebtedness in a referendum duly called for
this purpose by the governmental entity. This requirement applies
notwithstanding any other provision of any bond act and is in
addition to the terms and conditions specified in any bond act.
(D) A payment made by the State pursuant to a financing
agreement is deemed general obligation debt service subject to the
debt service limitation provided in Section 13, Article X of the
Constitution."
SECTION 2. Chapter 17, Title 59 of the 1976 Code is amended
by adding:
"Section 59-17-120. Bonds issued by a school district
under the bonded indebtedness limitation of Article X, Section
14(7)(a) of the South Carolina Constitution and called before the
maturity date only may be reissued if the amount required to
service the reissuance and to pay off the called bonds does not:
(1) increase by more than eight percent in any one year the
amount of the district's budget needed to service the original
bonded indebtedness; or
(2) exceed the debt limit of the district."
SECTION 3. This act takes effect upon approval by the
Governor.
-----XX----- |