Current Status Bill Number:
786Ratification Number: 123Act Number: 193Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 19950426Primary Sponsor: HayesAll Sponsors: Hayes, Peeler, Short and GregoryDrafted Document Number: pt\1940dw.95Date Bill Passed both Bodies: 19950524Date of Last Amendment: 19950517Governor's Action: SDate of Governor's Action: 19950612Subject: York County Natural Gas Authority
Body Date Action Description Com Leg Involved ______ ________ _______________________________________ _______ ____________ ------ 19950612 Act No. A193 ------ 19950612 Signed by Governor ------ 19950606 Ratified R123 Senate 19950524 Concurred in House amendment, enrolled for ratification House 19950523 Read third time, returned to Senate with amendment House 19950518 Debate adjourned until Tuesday, 19950523 House 19950517 Amended, read second time House 19950516 Introduced, read first time, placed on Calendar without reference Senate 19950512 Read third time, sent to House Senate 19950511 Read second time, unanimous consent for third reading on Friday, 19950512 Senate 19950511 Amended Senate 19950426 Introduced, read first time, placed on local and uncontested Calendar without referenceView additional legislative information at the LPITS web site.
(A193, R123, S786)
AN ACT TO AMEND ACT 959 OF 1954, AS AMENDED, RELATING TO THE CREATION OF THE YORK COUNTY NATURAL GAS AUTHORITY, SO AS TO EXPAND THE SERVICE AREA TO A PORTION OF CHEROKEE COUNTY; TO INCREASE THE BOARD OF DIRECTORS OF THE AUTHORITY FROM SIX TO TEN MEMBERS AND CHANGE ITS COMPOSITION; TO PROVIDE THAT ANY MEMBER OF THE AUTHORITY HAVING THREE UNEXCUSED ABSENCES DURING A CALENDAR YEAR MUST BE REMOVED BY THE GOVERNOR; TO AUTHORIZE THE AUTHORITY TO PURCHASE, MANUFACTURE, PRODUCE, AND TRANSPORT LIQUEFIED NATURAL GAS, COMPRESSED NATURAL GAS, AND PROPANE; TO CORRECT ARCHAIC REFERENCES; TO AUTHORIZE THE AUTHORITY TO ESTABLISH A RESERVE FUND; TO DELETE THE REQUIREMENT THAT ALL UNENCUMBERED REVENUES FROM THE SYSTEM BE PAID OVER TO YORK COUNTY AND THE MUNICIPALITIES SERVED BY THE AUTHORITY AND PROVIDE THAT THESE FUNDS MUST BE USED INSTEAD TO EXPAND THE SYSTEM OR TO REDUCE CUSTOMER RATES; AND TO PROVIDE THAT THE AUTHORITY MUST DURING THE MONTH OF DECEMBER OF EACH YEAR CONDUCT AN ANNUAL MEETING OF THE MEMBERS OF THE COUNTY LEGISLATIVE DELEGATION, COUNTY COUNCIL, AND MUNICIPAL COUNCILS FOR THE PURPOSE OF REPORTING THE PREVIOUS YEAR'S ACTIVITIES AND FUTURE EXPANSION PLANS OF THE AUTHORITY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. As incident to the adoption of this legislation, the General Assembly makes the following findings:
(A) The York County Natural Gas Authority (the "authority") was created pursuant to Act 959 of 1954, as amended. The authority is presently authorized to purchase, lease, acquire, build, construct, maintain, and operate natural gas distribution systems within its service area and such transmission lines as may be necessary to transport natural gas to such distribution systems from transmission lines owned by the South Carolina Pipeline Company and other sources. Act 959 authorized the authority to serve persons, firms, corporations, municipal corporations, and any subdivision or division of the State located in and nearby to each of the incorporated municipalities of Clover, York, Rock Hill, Fort Mill, and any other municipality or thickly populated area of York County.
(B)(1) The General Assembly has found that it is in the best interest of the authority and the citizens of York County and Cherokee County to expand the boundaries of the authority so that it includes all of York County and the northeast portion of Cherokee County. Except for areas served by the Town of Blacksburg, there is presently no natural gas service available in northeastern Cherokee County, despite there being a great demand for this service from individuals and industry located in it.
(2) The Town of Blacksburg does not currently have the resources to construct all of the transmission lines which are needed to serve this area of Cherokee County, but in cooperation with the authority, anticipates being able to construct sufficient distribution lines which are necessary to serve end users in the area when such service is feasible. The provision of natural gas service in northeastern Cherokee County also will enhance economic development activities in that county. The authority, in the northeastern portion of Cherokee County, is authorized in cooperation with the Town of Blacksburg to provide natural gas services as more fully described in this act.
(C) The General Assembly is aware that in Knight v. Salisbury, 262 S.C. 565, 206 S.E.2d 875 (1974) and later cases, the Supreme Court ruled that, pursuant to Article VIII, Section 7 of the Constitution of South Carolina, 1895, the General Assembly may not enact laws relating to a single county, including laws for special purpose districts located within a single county. It is the belief of the General Assembly, however, that Knight and later cases are inapplicable in instances where the boundaries of a special purpose district are to be expanded to include areas located in more than one county. Furthermore, it is the considered judgment of the General Assembly that in those instances where a special purpose district includes or will include areas located in more than one county, that the powers, boundaries, and other fundamental aspects of such a special purpose district be subject to review and amendment by the General Assembly; multicounty special purpose districts address regional, rather than purely local, concerns.
(D) The General Assembly further notes that Knight v. Salisbury and later cases are concerned with special purpose districts authorized to provide services which may also be provided by county governments, such as water, sewer, and recreational services; the holding in Knight is predicated upon the fact that the county government and special purpose district at issue in that case were both authorized to provide recreation services. Because of this overlap in powers, the court in Knight stated that "there is no longer a need for special state laws to create this type of district." (206 S.E.2d at 879). Pursuant to Article VIII, Section 16 of the Constitution of South Carolina, 1895, however, county governments may not provide natural gas services. Thus, there is no overlap in powers and the basis for the holding in Knight is inapplicable to legislation concerning the authority.
Miscellaneous amendments to York County Natural Gas Authority
SECTION 2. Act 959 of 1954, as last amended by Act 694 of 1957, is further amended to read:
"Section 1. There is created a body corporate and politic of perpetual succession to be known as the York County Natural Gas Authority (referred to in this act as the authority) subject to the provisions provided in Section 2 of this act. It is the function of the authority to purchase, lease, acquire, build, construct, maintain, and operate natural gas distribution systems within the service area defined in this act and such transmission lines as may be necessary to transport natural gas to the distribution systems from the transmission lines owned by South Carolina Pipeline Company or other sources from which natural gas may become available after the effective date of this act. The authority may furnish, transport, and distribute natural gas, liquefied natural gas (LNG), compressed natural gas (CNG), and propane service throughout the service area of the authority. The transmission lines, distribution systems, their component parts, all apparatus, equipment, and property incident to them or used or useful in the operation of them, and all additions, improvements, extensions, and enlargements to any of them, must be referred to collectively in this act as the system. This system will serve persons, firms, corporations, municipal corporations, and any subdivision or division of the State located in the service area as defined in Section 2 of this act, or in as many economically feasible areas as the authority determines. The authority has the further functions and duties prescribed by this act, and has all of the powers granted in this act.
Section 2. (A) The service area of the authority includes all of York County and each municipality within the county, all the Town of Smyrna to include that portion of the town which is within the boundaries of Cherokee County, and that portion of Cherokee County beginning at the intersection of the Broad River, the York County line, and the Cherokee County lines; extending in a northwesterly direction along the center line of the Broad River to the center of the Transcontinental Gas Pipeline Corporation's right-of-way; thence in a northeasterly direction along the center line of the Transcontinental Gas Pipeline Corporation's right-of-way to its intersection with the North Carolina state line; thence east along the common boundary of North Carolina and Cherokee County to the York County line. Those areas in Cherokee County, which may now or in the future be served by the Blacksburg municipal system, must be excluded from the authority's distribution system, but may be served by its transmission system.
(B) The Town of Blacksburg owns and operates a gas system which is capable of providing gas service to the portion of the service area of the authority in Cherokee County except for the portion located in the Town of Smyrna. The town is responsible for the distribution of gas to end users located in such service area and may supply this gas service either through its transmission lines and distribution lines or by connecting its distribution lines to the transmission lines of the authority upon the payment of a reasonable tap fee and a reasonable transportation charge to the authority for the use of its transmission lines.
Section 3. The authority must be governed by a board of ten members who must be appointed by the Governor, upon, and only upon recommendation of the respective municipalities below named and York County in the manner prescribed in this act, with, and only with, the advice and consent of the Senators representing York County. One member of the board must be recommended by each of the municipal councils of Clover, York, Fort Mill, and Tega Cay, three members must be recommended by the municipal council of Rock Hill, and three members must be recommended by the York County Council. In order to stagger the terms, of the initial appointees recommended by the York County Council, members must be appointed for three-, two-, and one-year terms, respectively. Except as provided in this act, all subsequent terms must be for a period of three years. Upon termination of office of any member of the board, whether an initial or subsequent appointee, or upon a vacancy in membership from any other cause, the vacancy must be filled, either for a full term or for the remainder of any unexpired term as appropriate, in exactly the same manner as in the case of the original appointment of the member whose vacancy is being filled. In all cases those persons holding office shall continue to hold office until their successors have been appointed and are qualified, notwithstanding that their term of office may have expired. No person who is a member of a municipal or county council, and no person who is regularly retained to provide legal or professional services for any of the foregoing, may be a member of the board. The members of the board shall serve without salary, and may be compensated only for actual expenses incurred on official business of the authority, and a full record of all expenses that may be incurred by the members of the board must be kept and at all times be open to public inspection. Any member having three unexcused absences during a calendar year must be removed by the Governor. The members of the board shall elect one of their members as chairman and another as secretary, each of whom shall hold office for terms fixed by the board. The secretary of the board shall from time to time file, in the office of the Clerk of Court for York County, appropriate certificates showing the members of the board, and the duration of the terms of the respective members.
Section 4. In order that the authority may construct, operate, enlarge, and extend the system within the limits of its service area it may:
(a) sue and be sued;
(b) adopt, use, and alter a corporate seal;
(c) make bylaws for the management and regulation of its affairs, and define a quorum for its meetings;
(d) acquire, purchase, hold, use, lease, mortgage, sell, transfer, and dispose of any property, real, personal or mixed, or any interest therein;
(e) purchase, lease, acquire, build, construct, maintain, and operate distribution systems and transmission lines within its service area and from time to time enlarge and extend these distribution systems and transmission lines;
(f) purchase, manufacture, produce, and transport, or in any other manner secure supplies of natural gas, manufactured gas, liquefied natural gas, compressed natural and propane, and to enter into contracts for the acquisition of this gas, of such duration as the authority shall approve; and to transport gas that any other gas provider has procured from a supplier of gas on such terms as is mutually agreed upon;
(g) enter into contracts of long duration for the sale of firm and interruptible gas, but all of these contracts shall contain a provision permitting the authority to increase the price charged its customers for gas if the authority, in turn, is required to pay more for its gas than it did on the occasion that the contract was entered into, and no contract of any sort may be entered into which does not in all respects be subordinate to any covenant or undertaking which the authority may make in the proceedings taken in connection with the issuance of any bond or other obligation of the authority;
(h) transport gas and to sell gas on such terms and rates as it shall approve. To that end, the authority may adopt and revise, whenever it wishes or may be so required, a schedule of rates and charges for all gas and all services furnished by the system, which must be fixed for the respective areas being served on a basis reasonably commensurate with the cost of providing service to these areas;
(i) make use of county and state highway rights-of-way, in which to lay pipes and lines, in the manner and under the conditions as the appropriate officials in charge of such rights-of-way shall approve;
(j) subject always to the limitations of Section 4, Article VIII of the Constitution of South Carolina, 1895, make use of the streets and public ways of any incorporated municipality for the purpose of laying pipes and lines;
(k) exercise the power of eminent domain for any corporate function, including the right to acquire, through the exercise of eminent domain, any existing gas distribution system, anywhere within its service area except for the system owned by the Town of Blacksburg. The power of eminent domain may be exercised through any procedure prescribed by Chapter 2, Title 28, Code of Laws of South Carolina, 1976, (South Carolina Eminent Domain Procedure Act), as now or hereafter constituted, it being the intent of this provision that further amendments and modifications of these code provisions are deemed to amend and revise correspondingly the powers granted by this item;
(l) appoint officers, agents, employees, and servants, prescribe the duties of such, fix their compensation, and determine if and to what extent they shall be bonded for the faithful performance of their duties;
(m) in its discretion, employ any person or corporation to operate its system for a fixed period of time, upon such terms and conditions as the authority may consider proper; or to enter into a contract of long duration, with any person or corporation skilled in the management of natural gas properties, for the provision of complete management and operational service for its system. This contract may provide for compensation of the management agency through a fixed fee, a fixed per customer or per meter fee, a percentage fee against gross or net receipts, or any one or more of them. The authority may require positive assurance or guarantee from this agency, in exchange for the agreed fee, that its operating costs must be held within certain fixed limits or that sufficient sums must be available to enable it to discharge all obligations, or both, falling due during the term of the agreement, incurred by the authority through the issuance of revenue bonds to finance construction of its system;
(n) make contracts for construction, engineering, and other services, with or without competitive bidding;
(o) borrow money and make and issue negotiable bonds, notes, and other evidences of indebtedness, payable from all or any part of the revenues derived from the operation of its system. The sums borrowed may be those needed to pay all costs incident to the construction and establishment of the system, and any extension, addition, and improvement to it, including engineering costs, construction costs, the sum needed to pay interest during the period prior to which the system, or any extension, addition, or improvement to it, must be fully in operation, the sum as is needed to supply working capital to place the system in operation, and all other expenses of any sort that the authority may incur in establishing, extending, and enlarging the system. Neither the faith and credit of the State of South Carolina, nor the municipalities of Clover, Tega Cay, York, Rock Hill, and Fort Mill, in York County, nor the counties of York or Cherokee, nor any other municipality or county within the service area may be pledged for the payment of the principal and interest of the obligations, and there must be on the face of each obligation a statement, plainly worded to that effect. Neither the members of the board, nor any person signing the obligations, are personally liable on them. To the end that a convenient procedure for borrowing money may be prescribed the authority may exercise all powers granted by Chapters 17 and 21, Title 6, Code of Laws of South Carolina, 1976, as now or hereafter constituted, it being the intent of this provision that further amendments and modification of these code provisions is considered to amend and revise correspondingly the powers granted by this item. In exercising the powers conferred upon the authority by these code provisions, the authority may make all pledges and covenants authorized by any provision of it, and may confer upon the holders of its securities all rights and liens authorized by these code provisions. Specifically, and notwithstanding contrary provisions in any of these code provisions, if contrary provisions exist, the authority may:
(1) provide that these bonds, notes, or other evidences of indebtedness be payable, both as to the principal and interest, from the net revenues derived from the operation of its system, as the net revenues may be defined by the authority;
(2) covenant and agree that upon it being adjudged in default as to the payment of any installment of principal or interest upon any obligation issued by it, or in default as to the performance of any covenant or undertaking made by it, that in the event the principal of all obligations of the issue may be declared immediately due and payable, notwithstanding that any of them may not have then matured;
(3) confer upon a corporate trustee the power to make disposition of the proceeds from all borrowings and of all revenues derived from the operation of the system, in accordance with the resolutions adopted by the authority as an incident to the issuance of any notes, bonds, or other types of securities;
(4) dispose of all obligations at public or private sales, and upon such terms and conditions as it shall approve;
(5) make the provision for the redemption of any obligations issued by it prior to their stated maturity, with or without premium, and on such terms and conditions as the authority approves;
(6) covenant and agree that reserve funds must be established to further secure the payment of the principal and interest of any obligations and further expansion of the system;
(7) covenant and agree that no free gas will be furnished to any person, firm, corporation, municipal corporation, or any subdivision or division of the State;
(8) prescribe the procedure, if any, by which the terms of the contract with the holders of its obligations may be amended, the number of obligations whose holders must consent to them, and the manner in which the consent must be given; and
(9) prescribe the events of default and the terms and conditions upon which all or any obligations shall become or may be declared due before maturity and the terms and conditions upon which the declaration and its consequences may be waived.
(p) do all other acts and things necessary or convenient to carry out any function or power committed or granted to the authority.
Section 5. All net revenues derived from the system, whose disposition the authority has not covenanted or contracted to otherwise dispose of, must be used to expand the system or to reduce customer rates. It is the intent of this legislation to provide a means of ensuring that reasonably priced natural gas service is available to all citizens who desire the service within the service area of the authority.
Section 6. The rates and fees charged for services furnished by the system, as constructed, improved, enlarged, and extended are not subject to supervision or regulation by any state bureau, board, commission, or other like instrumentality or agency of it. However, during the month of December of each year the authority shall, as requested, conduct an annual meeting of members of the county's legislative delegation, county council, and municipal councils for the purpose of reporting the previous year's activities and future expansion plans of the authority.
Section 7. All property of and income of the authority is exempt from all taxes, franchise fees, and other charges levied by the State, county or any municipality, division, subdivision, or agency of it, direct or indirect.
Section 8. As long as the authority is indebted to any person, firm, or corporation on any bonds, notes, or other obligations issued pursuant to the authority of this act, the provisions of this act, and the powers granted to the authority may not be in any way diminished or restricted, and this provision of this act may be deemed a part of the contract between the authority and the holders of such obligations.
Section 9. It is unlawful for any person to wilfully injure or destroy, or in any manner hurt, damage, tamper with, or impair the system of the authority, or any part of the same, or any apparatus, property, or equipment incident to it or used or useful in the operation of the system, or to obtain gas from it except in accordance with the regulations promulgated by the authority. Any person violating the provisions of this section is considered guilty of a misdemeanor and, upon conviction, is fined not less than ten dollars nor more than one hundred dollars, or be imprisoned for not more than thirty days at the discretion of the court, and is further liable to pay all damages suffered by the authority.
Section 10. If any part of this act is held unconstitutional, the unconstitutionality does not affect the remainder of this act.
Section 11. All acts or parts of acts inconsistent with any part of this act are repealed.
Section 12. This act takes effect upon approval by the Governor."
SECTION 3. The terms of the members serving on the authority on the effective date of this act are not affected by this act. The initial appointees recommended by the York County Council have terms of three, two, and one years, respectively, as determined and specified by the York County Council in its recommendation to the Governor.
SECTION 4. This act takes effect upon approval by the Governor.
Approved the 12th day of June, 1995.