Current Status Bill Number:3067 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19970114 Primary Sponsor:Limehouse All Sponsors:Limehouse, Cotty, Bailey, Altman, Whatley and Harrell Drafted Document Number:dka\3907cm.97 Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Transportation Infrastructure Bank Act, loans, highways, public finance
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
House 19970114 Introduced, read first time, 26 HLCI
referred to Committee
House 19961218 Prefiled, referred to Committee 26 HLCI
View additional legislative information at the LPITS web site.
TO AMEND TITLE 11, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PUBLIC FINANCE, BY ADDING CHAPTER 42 SO AS TO ESTABLISH THE SOUTH CAROLINA TRANSPORTATION INFRASTRUCTURE BANK ACT AND TO PROVIDE FOR ITS POWERS AND DUTIES; TO AUTHORIZE THE BANK TO PROVIDE LOANS AND OTHER FINANCIAL ASSISTANCE TO GOVERNMENT UNITS AND PRIVATE ENTITIES TO FINANCE PUBLIC HIGHWAY AND TRANSIT PROJECTS; TO AUTHORIZE THE DEPARTMENT OF TRANSPORTATION TO FUND THE BANK WITH UP TO FIVE PERCENT OF FUNDS APPROPRIATED FOR THE CONSTRUCTION AND MAINTENANCE OF STATE HIGHWAYS TO ALLOW FEDERAL GRANTS, LOAN REPAYMENTS, AND OTHER AVAILABLE AMOUNTS TO BE CREDITED TO THE BANK; AND TO AUTHORIZE LENDING TO AND BORROWING BY GOVERNMENT UNITS AND PRIVATE ENTITIES THROUGH THE BANK.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that:
(1) Adequate transportation facilities are an important element in the ability of a community to provide for the health and welfare of its citizens and the continuing economic growth and development that will provide jobs for the citizens of South Carolina.
(2) Traditional transportation financing methods in South Carolina cannot generate the resources necessary to fund the cost of transportation facilities which are required for continued economic viability and future economic expansion.
(3) The State of South Carolina has the ability to provide for alternative methods of financing highway and transportation projects.
(4) Loans and other financial assistance to government units and private entities can play an important part in meeting transportation needs, and this assistance is in the public interest, for the public benefit and good as a matter of legislative intent.
(5) This chapter provides an instrumentality to assist government units and private entities in constructing and improving highway and transportation facilities by providing loans and other financial assistance.
SECTION 2. Title 11 of the 1976 Code is amended by adding:
Section 11-42-10. This chapter may be referred to as the 'South Carolina Transportation Infrastructure Bank Act'.
Section 11-42-20. (A) There is created a body corporate and politic and an instrumentality of the State to be known as the South Carolina Transportation Infrastructure Bank.
(B) The bank is governed by a board of directors as provided in this chapter.
(C) The corporate purpose of the bank is to provide loans and other financial assistance to government units and private entities for constructing and improving highway and transportation facilities necessary for public purposes including economic development. The exercise by the authority of a power conferred in this chapter is an essential public function.
(D) The bank shall establish and maintain at least the four following accounts: state highway account, state transit account, federal highway account, and federal transit account.
(E) The board shall ensure that the bank maintains on a continuing basis a sufficient investment grade rating on its debt issuances or has a sufficient level of bond or debt instrument insurance to maintain the viability of the bank.
Section 11-42-30. As use in this chapter, the following words, unless the context clearly indicates otherwise, must be construed as follows:
(1) 'Bank' means the South Carolina Transportation Infrastructure Bank established pursuant to the provisions of this chapter.
(2) 'Board' means the board of directors of the bank.
(3) 'Bonds' means bonds, notes, or other evidence of indebtedness.
(4) 'Department of Transportation' means the South Carolina Department of Transportation, an agency of the State, and its successors.
(5) 'Eligible cost' means as applied to a qualified project to be financed from the federal accounts, the costs that are permitted under applicable federal laws, requirements, procedures, and guidelines in regard to establishing, operating, and providing assistance from the bank. As applied to a qualified project to be financed from the state highway account, these costs include the costs of preliminary engineering, traffic and revenue studies, environmental studies, right-of-way, legal and financial services associated with the development of the qualified project, construction, construction management, facilities, and other costs necessary for the start up of the qualified project. As applied to any qualified project to be financed from the state transit account, eligible project costs are limited to capital expenditures for transit equipment and facilities.
(6) 'Eligible project' means a highway or transit project which provides public benefits by either enhancing mobility and safety, promoting economic development, or increasing the quality of life and general welfare of the public.
(7) 'Federal accounts' means collectively, the separate account for federal highway funds and federal transit funds.
(8) 'Financing agreement' means any agreement entered into between the bank and a qualified borrower pertaining to a loan or other financial assistance. This agreement may contain, in addition to financial terms, provisions relating to the regulation and supervision of a qualified project, or other provisions as the board may determine. The term 'financing agreement' shall include, without limitation, a loan agreement, trust agreement, trust indenture, security agreement, reimbursement agreement, guarantee agreement, bond or note, ordinance or resolution, or similar instrument.
(9) 'Government obligations or governmental obligations' means bonds, notes, or other evidence of indebtedness issued by a government unit to evidence a loan.
(10) 'Government unit' means a municipal corporation, county, special purpose district, special service district, commissioners of public works, or another public body, instrumentality or agency of the State including combinations of two or more of these entities acting jointly to construct own, or operate a qualified project, and any other state or local authority, board, or other political subdivision created by the General Assembly or pursuant to the Constitution and laws of the State which may construct, own, or operate a qualified project.
(11) 'Loan' means an obligation subject to repayment which is provided by the bank to a qualified borrower for all or a part of the cost of a qualified project. A loan may be disbursed in anticipation of reimbursement for or direct payment of costs of a qualified project.
(12) 'Loan obligation' means a bond, note, or other evidence of obligation issued by a qualified borrower.
(13) 'Other financial assistance' means, but is not limited to, credit enhancement, capital or debt reserves for bonds or debt instrument financing, interest rate subsidies, provision of letters of credit and credit instruments, provision of bond or other debt financing instrument security, and other lawful forms of financing and methods of leveraging funds that are approved by the board, and in the case of federal funds, as allowed by federal law.
(14) 'Private entity' means a private person or entity that has entered into a contract with a government unit to design, finance, construct, and operate a highway bridge, tunnel, or approach that is within the jurisdiction of the government unit that is responsible for complying with applicable federal requirements.
(15) 'Project revenues' means all rates, rents, fees, assessments, charges, and other receipts derived or to be derived by a qualified borrower from a qualified project or made available from a special source, and, if provided in the applicable financing agreement, derived from any system of which the qualified project is a part of from any other revenue producing facility under the ownership or control of the qualified borrower including, without limitation, proceeds or grants, gifts, appropriations and loans, including the proceeds of loans made by the bank, investment earnings, reserves for capital and current expenses, proceeds of insurance or condemnation and proceeds from the sale or other disposition of property.
(16) 'Qualified borrower' means any government unit or private entity which is authorized to construct, operate, or own a qualified project.
(17) 'Qualified project' means an eligible project which has been selected by the bank to receive a loan or other financial assistance from the bank to defray an eligible cost.
(18) 'Regional government unit' means a government unit which is authorized to construct, own, or operate an eligible project on behalf of two or more government units, or designated parts of it.
(19) 'Revenues' means when used with respect to the bank, any receipts, fees, income, or other payments received or to be received by the bank including, without limitation, receipts, and other payments deposited in the bank and investment earnings on its funds and accounts.
(20) 'State accounts' means, collectively, the separate account for state highway funds and state transit funds.
Section 11-42-40. The board of directors is the governing board of the bank. The board shall consist of five voting members as follows: the deputy director of Finance and Administration of the Department of Transportation in an ex officio capacity; two members appointed by the Department of Transportation, one of which the Department of Transportation will designate as chairman; one member appointed by the State Treasurer; and one member appointed by the Governor. All appointed members shall serve two-year terms, terminable at the will of the appointing agency or officer. However, the initial appointees of the Department of Transportation shall serve an initial three-year term.
Section 11-42-50. (A) In addition to the powers contained elsewhere in this chapter, the bank shall have all power necessary, useful, or appropriate to fund, operate and administer the bank, and to perform its other functions including, but not limited to, the power to:
(1) have perpetual succession;
(2) adopt, promulgate, amend, and repeal bylaws, subject to the approval of the Department of Transportation, not inconsistent with this chapter for the administration of its affairs and the implementation of its functions;
(3) sue and be sued in its own name;
(4) have a seal and alter it at its pleasure, although the failure to affix the seal does not affect the validity of an instrument executed on behalf of the bank;
(5) make loans to qualified borrowers to finance the eligible costs of qualified projects and to acquire, hold, and sell loan obligations at prices and in a manner as the board determines advisable;
(6) provide qualified borrowers with other financial assistance necessary to defray eligible costs of a qualified project;
(7) enter into contracts, arrangements, and agreements with qualified borrowers and other persons and to execute and deliver all financing agreements and other instruments necessary or convenient to the exercise of the powers granted in this chapter;
(8) enter into agreements with a department, agency, or instrumentality of the United States or of this State or another state for the purpose of planning and providing for the financing of qualified projects;
(9) establish:
(a) policies and procedures for the making and administering of loans and other financial assistance; and
(b) fiscal controls and accounting procedures to ensure proper accounting and reporting by the bank, government units, and private entities.
(10) acquire by purchase, lease, donation, or other lawful means and to sell, convey, pledge, lease, exchange, transfer, and dispose of all or any part of its properties and assets of every kind and character or any interest in it, to further the public purpose of the bank;
(11) expend funds to obtain accounting, management, legal, financial consulting, and other professional services necessary to the operations of the bank;
(12) expend funds credited to the bank as the board determines necessary for the costs of administering the operations of the bank, provided the costs of administering the operations are approved by the Department of Transportation;
(13) establish advisory committees as the board determines appropriate, which may include individuals from the private section with banking and financial expertise;
(14) procure insurance against losses in connection with its property;, assets, or activities including insurance against liability for its acts or the acts of its employees or agents or the employees or agents of the Department of Transportation, or to establish cash reserves to enable it to act as a self-insurer against any and all such losses;
(15) collect fees and charges in connection with its loans or other financial assistance;
(16) apply for, 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;
(17) enter into contracts or agreements for the servicing and processing of financing agreements;
(18) do all other things necessary or convenient to exercise powers granted or reasonably implied by this chapter.
(B) The bank is not authorized or empowered to be or to constitute a bank or trust company within the jurisdiction or under the control of the State or an agency of it or the Comptroller of the Currency or the Treasury Department of the United States, or a bank, banker or dealer in securities within the meaning of, or subject to the provisions of, any securities, securities exchange or securities dealers' law of the United States or the State of South Carolina.
Section 11-42-60. The following sources may be used to capitalize the bank:
(1) an annual contribution from the Department of Transportation of up to five percent of the funds appropriated for the construction and maintenance of state highways, the contribution must be used to match federal capitalization grants to the bank and provide capital for the state accounts of the bank;
(2) federal funds made available to the State for the bank;
(3) contributions and donations from public authorities, government units, and private entities;
(4) all monies paid or credit to the bank, by contract or otherwise, payments of principal and interest on loans or other financial assistance made from the bank, and interest earnings which may accrue from the investment or reinvestment of the bank monies; and
(5) other lawful sources as determined appropriate by the board.
Section 11-42-70. (A) Earnings on balances in the federal accounts must be credited and invested according to federal law. Earnings on state accounts must be credited to the state highway account or state transit account that generates the earnings. The bank may establish accounts and subaccounts within the state accounts and federal accounts as considered desirable to effectuate the purposes of this chapter, or to meet the requirements of any state or federal programs. All accounts must be held in trust by the State Treasurer.
(B) For necessary and convenient administration of the bank, the board shall direct the State Treasurer to establish federal and state accounts and subaccounts within the bank necessary to meet any applicable federal law requirements or as the bank shall determine necessary or desirable in order to implement the provisions of this chapter.
(C) The bank shall comply with all applicable federal laws and regulations prohibiting the commingling of certain federal funds deposited in the bank.
Section 11-42-80. (A) The bank may provide loans and other financial assistance to a government unit or private entity to pay for all or part of the eligible cost of a qualified project. The term of the loan or other financial assistance shall not exceed forty years. The bank may require the government unit or private entity to enter into a financing agreement in connection with its loan obligation. The board shall determine the form and content of loan applications, financing agreements and loan obligations including, the term and rate or rates of interest on a financing agreement. The term and conditions of a loan or other financial assistance from federal account shall comply with applicable federal requirements.
(B) The board shall determine which projects are eligible projects and then select from among the projects, the projects qualified to receive from the bank a loan or other financial assistance. In selected qualified projects, the board shall consider the projected feasibility of the project and the amount and degree of risk assumed by the bank. The board also may consider, but must not be limited to, the following criteria in making its determination that an eligible project is a qualified project:
(1) the local support of the project, expressed by resolutions by the governing bodies in the areas in which the project will be located, and the financial or in kind contributions to the project;
(2) whether the project is consistent with the:
(a) adopted transportation plan of the appropriate metropolitan planning organization, if applicable; and
(b) transportation plan for the Department of Transportation.
(3) whether the existing highway system of the area served by the project is adversely affected by the project; and
(4) whether the governing bodies of the county or the incorporated municipality in which the project is to be located provides to the bank a resolution which makes a finding that the project is essential to economic development in the political subdivisions, or the bank receives a resolution or certificate from the Advisory Coordinating Council for Economic Development of the South Carolina Department of Commerce that the project is essential to economic development in the State, or both, at the option of the board.
Section 11-42-90. (A) Qualified borrowers are authorized to obtain loans or other financial assistance from the bank through financing agreements. Qualified borrowers entering into financing agreements and issuing loan obligations to the bank may perform any acts, take any action, adopt any proceedings, and make and carry out any contracts or agreements with the bank as may be agreed to by the bank and any qualified borrower for the carrying out of the purposes contemplated by this chapter.
(B) In addition to the authorizations contained in this chapter, all other statutes or provisions permitting qualified borrowers to borrow money and issue obligations may be utilized by any qualified borrower in obtaining a loan or other financial assistance from the bank to the extent determined necessary or useful by the qualified borrower in connection with any financing agreement and the issuance, securing, or sale of loan obligations to the bank. Notwithstanding the foregoing, obligations secured by ad valorem taxes may be issued by a government unit and purchased by the bank without regard to any public bidding requirement.
(C) A qualified borrower may receive, apply, pledge, assign, and grant security interest in project revenues, and, in the case of a governmental unit, its project revenues, revenues derived from a special source or ad valorem taxes, to secure its obligations as provided in this chapter, and may fix, revise, charge, and collect fees, rates, rent, assessments, and other charges of general or special application for the operation or services of a qualified project, the system of which it is a part, and any other revenue producing facilities from which the qualified borrower derives project revenues, to meet its obligations under a financing agreement or to provide for the construction and improving of a qualified project.
Section 11-42-100. The bank is performing an essential governmental function in the exercise of the powers conferred upon it and 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 of other loan obligations acquired or used by the bank or upon the income from them.
Section 11-42-110. (A) If a government unit fails to collect and remit in full all amounts due to the bank on the date these amounts are due under the terms of any note or other obligation of the government unit or private entity, the bank shall notify the State Treasurer who, subject to the withholding of amounts under Article X, Section 14 of the State Constitution, shall withhold all or a portion of the funds of the State and all funds administered by the State, its agencies, boards, and instrumentalities allotted or appropriated to the government unit and apply an amount necessary to the payment of this amount.
(B) Nothing contained in this section mandates the withholding of funds allocated to a government unit or private entity which would violate contracts to which the State is a party, the requirements of federal law imposed on the State, or judgments of a court binding on the State.
Section 11-42-120. Neither the board nor any officer, employee, or committee of the bank acting in behalf of it, nor an officer or employee of the Department of Transportation, while acting within the scope of this authority, is subject to any liability resulting from carrying out any of the powers given in this chapter.
Section 11-42-130. Notice, proceeding, or publication except those required in this chapter are not necessary to the performance of any act authorized in this chapter, nor is any act of the bank subject to referendum.
Section 11-42-140. All money of the bank, except as authorized by law or provided in this chapter, must be deposited with and invested by the State Treasurer. Funds of the bank not needed for immediate use or disbursement may be invested by the State Treasurer in obligations or securities which are declared to be legal obligations by the provisions of Section 11-9-660. All federal funds must be invested as required by applicable federal law.
Section 11-42-150. Following the close of each state fiscal year, the bank shall submit an annual report of its activities for the preceding year to the Governor and to the General Assembly. The bank shall also submit an annual report to the appropriate federal agency in accordance with requirements of any federal program. An independent certified public accountant shall perform an audit of the books and accounts of the bank at least once in each state fiscal year.
Section 11-42-160. The Department of Transportation shall provide staff and assist the bank in the administration of the program and the performance of the bank under this chapter. In providing that assistance, the Department of Transportation may:
(1) assist in the formulation, establishment, and structuring of programs undertaken by the bank pursuant to this chapter;
(2) provide government units or private entities information as to the bank and the procedures for obtaining the assistance intended by the chapter;
(3) assist government units and private entities in making application to state and federal agencies including the bank as may be necessary or helpful in order to avail themselves of these programs;
(4) assist the bank in analyzing and evaluating government unit or private entity requests for assistance pursuant to this chapter;
(5) assist in the structuring and negotiation of financing agreements;
(6) administer the fund, including any accounts in it;
(7) administer the bank's accounts, loans, and other financial assistance, including monitoring compliance by government units or private entities with any rules, regulations, or other requirements of the bank with respect to the programs and compliance with covenants and agreements made by government units or private entities with respect to a financing agreement; and
(8) provide other assistance and perform other duties as may be requested or directed by the bank.
Section 11-42-170. This chapter, being for the welfare of this State and its inhabitants, must be liberally construed to effect the purposes specified in this chapter. However, nothing in this chapter must be construed as affecting any proceeding, notice, or approval required by law for the issuance by a government unit or private entity of the loan obligations, instruments, or security for loan obligations.
Section 11-42-180. If any provision of this chapter is held or determined to be unconstitutional, invalid, or otherwise unenforceable by a court of competent jurisdiction, it is the intention of the General Assembly that the provision is, or is determined to be, severable from the remaining provisions of the chapter and that the holding does not invalidate or render unenforceable another provision of the chapter."
SECTION 3. This act takes effect upon approval by the Governor.