Current Status Introducing Body:Senate Bill Number:866 Primary Sponsor:Waddell Committee Number:06 Type of Legislation:GB Subject:Water Quality Revolving Fund Authority Act Residing Body:Senate Current Committee:Finance Computer Document Number:JIC/5564.HC Introduced Date:Apr 09, 1991 Last History Body:Senate Last History Date:Apr 09, 1991 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Waddell Drummond Leatherman Martschink Mullinax J. Verne Smith Nell W. Smith Lourie Type of Legislation:General Bill
Bill Body Date Action Description CMN
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866 Senate Apr 09, 1991 Introduced, read first time, 06
referred to Committee
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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:
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.