S*41 Session 104 (1981-1982)
S*0041(Rat #0087, Act #0050 of 1981) General Bill, By Senate Judiciary
A Bill to amend Chapter 21 of Title 11, Code of Laws of South Carolina, 1976,
relating to advanced refunding of bonds of public agencies, so as to redefine
the conditions under which public agencies of the State may utilize the
provisions of the chapter and to repeal Section 11-21-70, relating to advanced
refunding of refunding bonds.
01/14/81 Senate Introduced, read first time, placed on calendar
without reference SJ-6
01/15/81 Senate Read second time SJ-7
01/21/81 Senate Read third time and sent to House SJ-16
01/22/81 House Introduced and read first time HJ-302
01/22/81 House Referred to Committee on Ways and Means HJ-302
04/22/81 House Committee report: Favorable Ways and Means HJ-1962
04/28/81 House Read second time HJ-2074
04/29/81 House Read third time and enrolled HJ-2103
04/30/81 Senate Ratified R 87 SJ-8
05/05/81 Signed By Governor
05/05/81 Effective date 05/05/81
05/05/81 Act No. 50
05/15/81 Copies available
(A50, R87, S41)
AN ACT TO AMEND CHAPTER 21 OF TITLE 11, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO ADVANCED REFUNDING OF BONDS OF PUBLIC AGENCIES, SO AS TO REDEFINE THE
CONDITIONS UNDER WHICH PUBLIC AGENCIES OF THE STATE MAY UTILIZE THE PROVISIONS
OF THE CHAPTER AND TO REPEAL SECTION 11-21-70, RELATING TO ADVANCED REFUNDING OF
REFUNDING BONDS.
Be it enacted by the General Assembly of the State of South Carolina:
Findings
SECTION 1. The General Assembly finds that a number of public agencies finds
it desirable to refund outstanding bonds in order to eliminate covenants which
hamper further financing of revenue-producing projects. Much of any refunding
done under existing market conditions would require much higher interest rates
than those borne by the bonds to be refunded. Thus, there is necessitated a
"wraparound" plan under which the outstanding bonds would not be paid
until their respective maturities and meanwhile the proceeds of the refunding
Bonds would be invested until used at interest rates commensurate with the rates
of interest borne by the refunding bonds themselves, thus eliminating all or most
of the additional interest expense which would result if the outstanding bonds
were paid on the "occasion fixed for their earliest redemption" as now
provided by Section 11-21-50 of the 1976 Code. Other provisions of Chapter 21,
Title 11 of the 1976 Code provide obstacles to "advanced" refunding
under present market conditions and for such reason it has been determined to
amend certain sections of Chapter 21, Title 11 of the 1976 Code, as hereafter set
forth, in order to give all public agencies greater latitude in the refunding of
outstanding bonds.
Advance refunding of bonds
SECTION 2. Chapter 21 of Title 11 of the 1976 Code is amended to read:
"Chapter 21
Advanced Refunding of Bonds of Public Agencies
Section 11-21-10. For the purposes of this chapter the following terms shall
mean:
(1) 'Advanced refunding', the refunding of outstanding bonds through the
authorizations of this chapter and other statutes herein referred to more than
six months prior to the dates on which outstanding bonds mature or may be called
for payment and redemption.
(2) 'Corporate trustee', any incorporated bank organized under the laws of any
of the states of the United States or any national banking corporation organized
under the laws of the United States maintaining an established and active trust
department which shall agree to perform the functions imposed upon it by the
provisions of this chapter; but, unless such bank or national bank shall maintain
offices in South Carolina, it shall have unimpaired capital and surplus of not
less than twenty-five million dollars.
(3) 'Governing board', the board, commission, municipal council, board of
trustees, authority or any other public body upon which is devolved by law the
administrative and executive duties with respect to any public agency.
(4) 'Outstanding Bonds', all general obligation bonds, with or without
additional security, or bonds payable solely from any revenue-producing project,
now or hereafter issued pursuant to laws now or hereafter enacted.
(5) 'Public agency', the State of South Carolina, its agencies and
institutions, counties, all incorporated municipalities, school districts,
special purpose districts, authorities and every other agency or political entity
of the State which now or hereafter shall be given the power to incur debt in the
form of general obligation bonds, with or without additional security, or bonds
payable solely from any revenue-producing project, now or hereafter issued
pursuant to law.
(6) 'Refunding bonds', any bonds issued for the purpose of providing all or any
part of the monies required to effect the payment upon maturity, or upon
redemption, of any outstanding bonds and shall include all sums required to meet
the payment of principal, redemption premiums and such interest on outstanding
bonds as may be required to be funded in order to effect the advanced refunding
of outstanding bonds.
Section 11-21-20. Any public agency may utilize the provisions of either
Article 5, Chapter 15, Title 11 (the Refunding Act) or Chapter 17, Title 6 (the
Revenue Bond Refinancing Act) as herein amplified, to effect the refunding of any
of its outstanding bonds and the provisions of this chapter shall extend to and
are hereby made available to the governing boards of all public agencies in order
to refund outstanding bonds. If and when the authorizations of this chapter are
utilized, the provisions of this chapter shall control in the event of conflict
between this chapter and any provision in either the Refunding Act or the Revenue
Bond Refinancing Act. To the extent that they may be required in order to effect
an advanced refunding, refunding bonds may be issued in such amounts as shall be
required to provide for the payment of (a) all outstanding bonds maturing
subsequent to the date as of which refunding bonds shall be issued and (b) such
further amount as shall be required to effect the payment of any redemption
premium of the outstanding bonds, the amount required to fund interest on the
outstanding bonds to the date fixed for redemption in the plan of advancing
refunding, if the funding of interest on the outstanding bonds shall prove
necessary, and any deposits required in connection with the refunding bonds and
expenses incurred by the governing board in connection with the issuance of
refunding bonds. ProvIded, if any governing board shall find it necessary to
effect improvements at the same time as it shall undertake an advanced refunding
with refunding bonds issued pursuant to Chapter 17, Title 6 and this chapter,
refunding bonds in addition to those otherwise required may be issued to such
extent as may be necessary to meet the costs of such improvements.
Section 11-21-30. Advanced refunding pursuant to this chapter may be effected
at any time under the conditions prescribed by this chapter.
Section 11-21-40. Prior to any advanced refunding the governing board of any
public agency which shall have outstanding bonds shall find either:
(a) That a savings can be effected through advanced refunding;
(b) That existing covenants and agreements in the proceedings authorizing
the outstanding bonds payable from revenue-producing projects hamper or impede
the ability of the public agency to borrow monies which are then or thereafter
required to provide for improvements, enlargements and extensions to such
revenue-producing projects.
In the event any governing board shall undertake to effect an advanced
refunding pursuant to Chapter 17, Title 6 and this chapter, and at the same time
to borrow for the purpose of constructing improvements to its revenue-producing
project, it shall likewise have found that such improvements are then necessary
and can be accomplished with the monies provided by the proceeds of the refunding
bonds issued pursuant to Chapter 17, Title 6 and this chapter for the purpose of
constructing such improvements.
Section 11-21-50. The governing board shall not be required to effect the
payment or redemption of the outstanding bonds through the means of any optional
redemption provision and it may provide in the agreement required by Section
11-21-60 that the proceeds of the refunding bonds be used for the payment of the
outstanding bonds as and when the same mature. Whenever refunding bonds are
issued pursuant to this chapter, the public agency issuing such bonds shall give
published notice in a financial paper published in the City of New York of the
purpose for which the proceeds of the refunding bonds will be used.
Section 11-21-60. On the delivery of any refunding bonds issued pursuant to
this chapter, the principal proceeds thereof, less any accrued interest and less
the proceeds of that portion of any refunding bonds issued pursuant to Chapter
17, Title 6 and this chapter for improvements, shall be deposited with a
corporate trustee and held by it under a written trust agreement and in a special
trust account. It shall be the duty of the corporate trustee to keep such
proceeds invested and reinvested to the extent that it shall be practical in
obligations of the United States or any agency thereof and to apply the principal
and interest of the trust so established in the manner prescribed in such trust
agreement."
Repealed
SECTION 3. Section 11-21-70 of the 1976 Code is repealed.
Time effective
SECTION 4. This act shall take effect upon approval by the Governor. |