H*3279(Rat #0560, Act #0547 of 1986)  General Bill, By  House Ways and Means
 A Bill to amend Act 1377 of 1968, as amended, relating to the issuance of
 State Capital Improvement Bonds, so as to authorize funds for prison
 construction and renovations required by the Nelson settlement; to provide
 that the funds must be only one or more of the following: Capital Fund monies,
 general obligation bonds, or lease purchase agreements, and must not exceed
 the authorized amount; and to require the funds to be released pursuant to the
 Nelson Setttlement deadlines; and to provide that no project authorized in
 whole or in part for capital improvement bond funding may be implemented until
 funds can be made available and until the Joint Bond Review Committee, in
 consultation with the Budget and Control Board, establishes priorities for
 project funding and to require the Committee to report its priorities to the
 General Assembly within thirty days of the establishment of the funding
 priorities.-amended title

   01/15/86  House  Introduced, read first time, placed on calendar
                     without reference HJ-111
   01/16/86  House  Debate adjourned HJ-211
   01/22/86  House  Debate adjourned HJ-239
   01/23/86  House  Debate adjourned HJ-270
   01/28/86  House  Debate adjourned until Tuesday, February 4, 1986 HJ-321
   02/04/86  House  Debate adjourned HJ-470
   02/05/86  House  Debate adjourned until Tuesday, Feb. 11, 1986 HJ-497
   02/12/86  House  Objection by Rep. McAbee, Carnell, Mangum &
                     Klapman HJ-640
   03/04/86  House  Special order, set for following consideration of
                     S 153 (Under H 3596) HJ-1139
   03/26/86  House  Amended HJ-1968
   03/26/86  House  Read second time HJ-1972
   03/27/86  House  Read third time and sent to Senate HJ-2043
   04/02/86  Senate Introduced and read first time SJ-1381
   04/02/86  Senate Referred to Committee on Finance SJ-1381
   05/07/86  Senate Committee report: Favorable Finance SJ-2465
   05/14/86  Senate Read second time
   05/14/86  Senate Ordered to third reading with notice of amendments
   05/27/86  Senate Debate interrupted SJ-3297
   05/28/86  Senate Amended SJ-3323
   05/28/86  Senate  Read third time SJ-3324
   05/28/86  Senate Returned SJ-3324
   05/29/86  House  Concurred in Senate amendment and enrolled HJ-3526
   06/04/86         Ratified R 560
   06/09/86         Signed By Governor
   06/09/86         Effective date 06/09/86
   06/09/86         Act No. 547
   06/20/86         Copies available

AN ACT TO AMEND ACT 1377 OF 1968, AS AMENDED, RELATING TO THE ISSUANCE OF STATE CAPITAL IMPROVEMENT BONDS, SO AS TO AUTHORIZE FUNDS FOR PRISON CONSTRUCTION AND RENOVATIONS REQUIRED BY THE NELSON SETTLEMENT; TO PROVIDE THAT THE FUNDS MUST BE ONLY ONE OR MORE OF THE FOLLOWING: CAPITAL FUND MONIES, GENERAL OBLIGATION BONDS, OR LEASE PURCHASE AGREEMENTS, AND MUST NOT EXCEED THE AUTHORIZED AMOUNT; AND TO REQUIRE THE FUNDS TO BE RELEASED PURSUANT TO THE NELSON SETTLEMENT DEADLINES; AND TO PROVIDE THAT NO PROJECT AUTHORIZED IN WHOLE OR IN PART FOR CAPITAL IMPROVEMENT BOND FUNDING MAY BE IMPLEMENTED UNTIL FUNDS CAN BE MADE AVAILABLE AND UNTIL THE JOINT BOND REVIEW COMMITTEE, IN CONSULTATION WITH THE BUDGET AND CONTROL BOARD, ESTABLISHES PRIORITIES FOR PROJECT FUNDING AND TO REQUIRE THE COMMITTEE TO REPORT ITS PRIORITIES TO THE GENERAL ASSEMBLY WITHIN THIRTY DAYS OF THE ESTABLISHMENT OF THE FUNDING PRIORITIES.

Be it enacted by the General Assembly of the State of South Carolina:

Findings

SECTION 1. (A) The General Assembly will be considering a 1986 bond bill of over one hundred million dollars. The normal capital improvement program is required to address the maintenance, repair, renovation, and remodeling of six thousand buildings and facilities, and the need for new buildings and facilities of fifty agencies, institutions, colleges, and universities. The regular statewide capital improvement program spends sixty to seventy million dollars annually. The Nelson prison overcrowding settlement will cost about one hundred sixty million dollars for prison construction over the next five years, requiring an additional average of thirty-five million dollars a year until fiscal year 1990-91. The statewide capital improvement program must be financed with general obligation bonds until the capital fund is large enough to finance the whole program with cash. This transition will take four to five years if properly regulated.

(B) The State entered into an agreement in the Nelson settlement in 1985, which means that the State agreed to no prison overcrowding by 1990. After the settlement, the General Assembly passed a burglary bill which will require an additional six hundred beds but has done nothing to fund the prison construction that will be required.

(C) The Joint Bond Review Committee recommends that good-faith compliance with the Nelson settlement be assured by guaranteeing that funds are made available to build the prisons that are necessary. The five prisons that will be needed by 1990 should be authorized in 1986. The committee will look closely at all reasonable methods of reducing the need for these prisons and at any alternative financing proposals that would be more cost effective than general obligation bonds or cash.

(D) The Joint Bond Review Committee further recommends that the funds made available through the annual capital fund monies be used solely for prison construction until the time as there are funds in excess of the need for prisons which would then be applied toward the funding of projects already authorized by the General Assembly. The committee recommends suspending the gradual phase-down of the debt service limitation but requiring full implementation by 1992. This will enable the treasurer to issue bonds until the capital fund can replace them. The committee and the Budget and Control Board will regulate the transition from bonds to the capital fund. This transition will take four to six years to complete. An annual capital improvement budget could be financed by the capital fund by 1991. The debt service will gradually be reduced to nothing as old bond issues are paid off, thus freeing up operating budget funds and avoiding all interest charges.

(E) It is further recommended that funds be made available through the issuance of lease-purchase agreements which would permit the lease back of prison facilities between public or quasi-public entities. The additional proceeds, provided by a lease-purchase arrangement offering shall compliment the cash and general obligation bond proceeds to insure that the State is afforded every opportunity to meet the requirement of the Nelson settlement.

Bonds authorized

SECTION 2. Item (f) of Section 3 of Act 1377 of 1968, as last amended by Section 1 of Part V of Act 201 of 1985, is further amended by adding:

"Department of Corrections

Prison Construction

and Renovations/

Nelson Settlement $96,000,000

TOTAL, Department of

Corrections $96,000,000

The funds authorized above for prison construction and renovations required by the Nelson prison overcrowding settlement must be only one or more of the following: capital fund monies, general obligation bonds, or lease-purchase agreements as determined by the Joint Bond Review Committee and the Budget and Control Board, but the total of all methods must not exceed the amount authorized hereinabove.

Provided, Further, That the funds must be scheduled for release in a manner that ensures compliance with the deadlines of the Nelson settlement."

Conditions of authorization

SECTION 3. No project authorized in whole or in part for capital improvement bond funding under the provisions of Act 1377 of 1968, as amended, may be implemented until funds can be made available and until the Joint Bond Review Committee, in consultation with the Budget and Control Board, establishes priorities for the funding of the projects. The Joint Bond Review Committee shall report its priorities to the members of the General Assembly within thirty days of the establishment of the funding priorities.

Time effective

SECTION 4. This act shall take effect upon approval by the Governor.