South Carolina General Assembly
111th Session, 1995-1996

Bill 1312


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                       1312
Type of Legislation:               General Bill GB
Introducing Body:                  Senate
Introduced Date:                   19960402
Primary Sponsor:                   Wilson 
All Sponsors:                      Wilson 
Drafted Document Number:           jic\5355htc.96
Residing Body:                     Senate
Current Committee:                 Judiciary Committee 11 SJ
Subject:                           Joint municipal water systems,
                                   revenue bonds



History


Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

Senate  19960402  Introduced, read first time,             11 SJ
                  referred to Committee

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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND SECTION 6-25-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR JOINT MUNICIPAL WATER SYSTEMS, SO AS TO REVISE THE MEANING OF THE TERMS "REVENUE BONDS" AND "BONDS"; TO AMEND SECTION 6-25-100, AS AMENDED, RELATING TO POWERS OF JOINT MUNICIPAL WATER SYSTEMS, SO AS TO ALLOW LOANS, BONDS, OR NOTES ISSUED TO A JOINT SYSTEM TO BE PAID FROM OTHER FUNDS AS MAY BE AVAILABLE AND TO ALLOW MEMBERS OF A JOINT SYSTEM TO CREATE, AS THEY CONSIDER NECESSARY, ADDITIONAL PROCEDURES WHICH GOVERN THE ISSUANCE OF ANY NOTES OR BONDS; TO AMEND SECTION 6-25-110, RELATING TO AUTHORIZATION OF A JOINT SYSTEM TO INCUR DEBT AND ISSUE BONDS, SO AS TO ALLOW A JOINT SYSTEM TO USE OTHER SOURCES OF FUNDS AVAILABLE TO IT TO PAY FOR ISSUED BONDS; TO AMEND SECTION 6-25-113, RELATING TO SOURCES FROM WHICH JOINT SYSTEM BONDS ARE PAYABLE, SO AS TO ALLOW A MEMBER COUNTY OR MUNICIPALITY TO PROVIDE A PLEDGE OF ALL OR PART OF ANY REVENUES DERIVED AS PAYMENTS IN LIEU OF TAXES WITH RESPECT TO A PROJECT; TO AMEND SECTION 6-25-120, RELATING TO PAYMENT OF NOTES, OBLIGATIONS, OR BONDS, SO AS TO REQUIRE ONLY REVENUES AND OTHER FUNDS AVAILABLE TO THE JOINT SYSTEM TO BE USED TO PAY OR PLEDGED TO THE AMOUNT OF ANY NOTES, OBLIGATIONS, OR BONDS; AND TO AMEND SECTION 6-25-128, RELATING TO CONTRACTS BETWEEN MUNICIPALITIES AND JOINT SYSTEMS, SO AS TO ALLOW A MUNICIPALITY UNDER CONTRACT FOR THE PURCHASE OF CAPACITY AND OUTPUT FROM A JOINT SYSTEM TO PAY FROM REVENUES DERIVED FROM THE OWNERSHIP AND OPERATION OF THE WATER SYSTEM OF THE MUNICIPALITY AND FROM OTHER SOURCES OF FUNDS AS MAY BE AVAILABLE, INCLUDING ANY AMOUNTS RECEIVED AS PAYMENTS IN LIEU OF TAXES.

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

SECTION 1. Section 6-25-20(g) of the 1976 Code, is amended to read:

"(g) `Revenue bonds' and `bonds' mean bonds, notes, certificates, or other obligations of a joint system issued pursuant to the provisions of this chapter and shall include refinancing or refunding same, but which must be paid solely from the revenues of and other sources of funds available to a joint system, the term `revenues' includes all sources of funds which are revenues to the joint system, regardless of the source of the funds, from any other party obligated to the joint system."

SECTION 2. Section 6-25-100(n) of the 1976 Code, as last amended by Part II, Section 91B of Act 145 of 1995, is further amended to read:

"(n) To borrow money and issue bonds or notes of the joint system to be paid solely from revenues of the system and other funds as may be available. No bonds or notes shall may be issued the payment for which is dependent upon contracts or agreements with a member except with the approval of the governing body of each member, by resolution or ordinance of the governing body of each member;. provided However, that the requirements of this item will be are satisfied and no further action is required with respect to any bonds or notes issued to a finance project which has been approved by the governing bodies body of each member as provided in Section 6-25-110;. and provided further that The approval of any notes or bonds under this chapter shall include any issuance in one or more series and any refunding or refinancing of them so that only the original issuance of the debt must be approved. The members of a joint system may prescribe additional procedures and requirements as they determine appropriate for the issuance of any notes or bonds in the bylaws of any joint system."

SECTION 3. Section 6-25-110 of the 1976 Code is amended to read:

"Section 6-25-110. A joint system may incur debt for any of its purposes and may issue bonds pledging to the payment as to both principal and interest the revenues, or any portion, derived or to be derived from all or any of its projects and any additions and betterments or extensions or contributions or advances from its members or other sources of funds available to it. No joint system shall undertake any project required to be financed, in whole or in part, with the proceeds of bonds without the approval of the governing bodies of each member which is obligated or to be obligated under any contract for the payment of amounts to be pledged as security."

SECTION 4. Section 6-25-113 of the 1976 Code is amended to read:

"Section 6-25-113. The bonds are special obligations of the joint system issuing them. The principal of, premium, if any, and interest on the bonds are not payable from the general funds of the joint system, nor shall do they constitute a legal or equitable pledge, charge, lien, or encumbrance upon any of its property or upon any of its income, receipts, or revenues, except the funds which are pledged under the resolution authorizing the bonds or the trust agreement securing the bonds. Neither the faith and credit nor the taxing power of the State or any municipality is, or may be, pledged for the payment of the principal of or interest on the bonds, and no holder of the bonds has the right to compel the exercise of the taxing power by the State or any municipality or the forfeiture of any of its property in connection with any default. However, the provisions of this section do not affect the ability of any member county, or municipality from providing a pledge of all or part of any revenues derived as payments in lieu of taxes with respect to a project. Every bond must recite in substance that the principal of and interest on the bond is payable solely from the revenues pledged to its payment and that the joint system is not obligated to pay the principal or interest except from the revenues and funds so pledged."

SECTION 5. Section 6-25-120 of the 1976 Code is amended to read:

"Section 6-25-120. In borrowing money or the issuance of bonds or notes, or other obligations, there shall may not be pledged the full faith, credit, or taxing power of any member of the joint system, but only revenues of and other funds available to the system must be used to pay or pledged to the payment of any notes, obligations, or bonds."

SECTION 6. Section 6-25-128 of the 1976 Code is amended to read:

"Section 6-25-128. Any municipality may contract to buy from the joint system water required for its present or future requirements, including the capacity and output, or a portion or share of one or more specified projects. As the creation of a joint system is an alternative method whereby a municipality may obtain the benefits and assume the responsibilities of ownership in a project, any contract may provide that the municipality so contracting is obligated to make the payments required by the contract whether or not a project is completed, operable, or operating notwithstanding the suspension, interruption, interference, reduction, or curtailment of the output of a project or the water contracted for, and that the payments under the contract are not subject to any reduction, whether by offset or otherwise, and are not conditioned upon the performance or nonperformance of the joint system or any other members of the joint system under the contract or any other instrument. Any contract with respect to the sale or purchase of capacity or output, or a portion or share of them, of a project entered into between a joint system and its member municipalities may also provide that if one or more of the municipalities default in the payment of its or their obligations with respect to the purchase of the capacity or output, or a portion or share of them, in that event the remaining member municipalities which are purchasing capacity and output under the contract are required to accept and pay for and are entitled proportionately to and may use or otherwise dispose of the capacity or output which was to be purchased by the defaulting municipality.

Any contracts with respect to the sale or purchase of capacity and output from a project may extend for a period not exceeding fifty years from the date of the contract and may be renewable and extended upon terms as the parties may agree for not exceeding an additional fifty years; and the execution and effectiveness is not subject to any authorizations or approvals by the State or any agency, commission, or instrumentality or political subdivision of them.

Payments by a municipality under any contract for the purchase of capacity and output from a joint system must may be made from the revenues derived from the ownership and operation of the water system of the municipality or from other sources of funds available, including any amounts received as payments in lieu of taxes. However, no municipality may pledge its full faith, credit, and taxing power to secure its obligations to the joint system or the bonds of the joint system. and any obligation under the contract does not constitute a legal or equitable pledge, charge, lien, or encumbrance upon any property of the municipality or upon any of its income, receipts, or revenues, except the revenues of its water system, and neither the faith and credit nor the taxing power of the municipality is, or may be pledged for the payment of any obligation under any contract. A municipality is obligated to fix, charge, and collect rents, rates, fees, and charges for water and other services, facilities, and commodities sold, furnished, or supplied through its water system sufficient to provide revenues adequate to meet its obligations under any contract and to pay any and all other amounts payable from or constituting a charge and lien upon the revenues, including amounts sufficient to pay the principal of and interest on general obligation bonds, if any, heretofore or hereafter issued by the municipality for purposes related to its water system.

Any municipality which is a member of a joint system may furnish the joint system with money derived from the ownership and operation of its water system or facilities and provide the joint system with personnel, equipment, and property, both real and personal and from any other sources legally available to it for these purposes. Any municipality may also provide any services to a joint system.

Any member of a joint system may contract for, advance, or contribute funds derived solely from the ownership and operation of its water system or facilities or from any other sources legally available to it to a joint system as may be agreed upon by the joint system and the member, and the joint system shall repay the advances or contributions from the proceeds of bonds, from operation revenues, or from any other funds of the joint system, together with interest as may be agreed upon by the member and the joint system."

SECTION 7. This act takes effect upon approval by the Governor.

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