South Carolina General Assembly
113th Session, 1999-2000

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Bill 3357


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Indicates Matter Stricken

Indicates New Matter

RECALLED

May 27, 1999

H. 3357

Introduced by Reps. Fleming, Wilder, Klauber and Hayes

S. Printed 5/27/99--S.

Read the first time April 28, 1999.

            

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 6-25-115 SO AS TO AUTHORIZE A JOINT MUNICIPAL WATER SYSTEM ORGANIZED FOR THE PURPOSE OF CREATING A FINANCING POOL TO ISSUE CONSTRUCTION NOTES; BY ADDING SECTION 6-25-129 SO AS TO EXEMPT FROM STATE TAXES THE INCOME OF A JOINT MUNICIPAL WATER SYSTEM; BY ADDING SECTION 6-25-131 SO AS TO PROVIDE THAT NO INCOME, PROFITS, OR ASSETS OF A JOINT SYSTEM MAY INURE TO THE BENEFIT OF ANY INDIVIDUAL OR PRIVATE ENTITY; TO AMEND SECTION 6-25-20, AS AMENDED, RELATING TO DEFINITIONS FOR JOINT MUNICIPAL WATER SYSTEMS, SO AS TO DEFINE "CONSTRUCTION NOTE OR NOTES", "FINANCING AGREEMENT", "FINANCING POOL", "GOVERNMENT", AND "INTERIM FINANCING"; TO AMEND SECTION 6-25-30, RELATING TO THE CREATION OF A JOINT SYSTEM, SO AS TO AUTHORIZE THE GOVERNING BODIES OF MUNICIPALITIES TO CREATE A JOINT SYSTEM FOR THE PURPOSE OF CREATING A FINANCING POOL, AND TO LIMIT THE PURPOSES FOR WHICH A JOINT SYSTEM MAY BE CREATED; TO AMEND SECTION 6-25-40, RELATING TO THE NOTICE OF THE INSTRUMENT CREATING A JOINT SYSTEM, SO AS TO EXEMPT A JOINT SYSTEM FROM THE NOTICE PROVISIONS IF IT IS FORMED FOR THE PURPOSE OF CREATING A FINANCING POOL; TO AMEND SECTION 6-25-50, RELATING TO THE APPOINTMENT OF A MUNICIPAL REPRESENTATIVE TO THE JOINT SYSTEM, SO AS TO ADD TO THE REQUIREMENTS OF THE APPLICATION FILED WITH THE SECRETARY OF STATE THE PURPOSE FOR THE CREATION OF THE JOINT SYSTEM; TO AMEND SECTION 6-25-60, AS AMENDED, RELATING TO THE MANAGEMENT AND CONTROL OF THE JOINT SYSTEM, SO AS TO CLARIFY THAT EACH VOTING MEMBER OF A JOINT SYSTEM SHALL APPOINT A REPRESENTATIVE WHO MUST BE A COMMISSIONER OF THE JOINT SYSTEM AND TO AUTHORIZE THE COMMISSIONERS TO MEET BIENNIALLY, IF ITS BYLAWS PROVIDE FOR IT; TO AMEND SECTION 6-25-70, RELATING TO CHANGE IN MEMBERSHIP OF A JOINT SYSTEM, SO AS TO EXEMPT A JOINT SYSTEM ORGANIZED FOR THE PURPOSE OF CREATING A FINANCING POOL FROM FILING A CHANGE IN MEMBERSHIP WITH THE SECRETARY OF STATE; TO AMEND SECTION 6-25-80, RELATING TO THE DISSOLUTION OF A JOINT SYSTEM, SO AS TO PROVIDE THAT INCOME OWNED BY THE JOINT SYSTEM AT THE TIME OF DISSOLUTION MUST BE DISBURSED TO THE VOTING MEMBERS OF THE MEMBERS OF THE JOINT SYSTEM ACCORDING TO ITS BYLAWS; TO AMEND SECTION 6-25-100, AS AMENDED, RELATING TO POWERS OF JOINT MUNICIPAL WATER SYSTEMS, SO AS TO AUTHORIZE THE SYSTEMS TO LOAN THE PROCEEDS OF ANY BORROWING TO ANY MEMBER OF THE JOINT SYSTEM WITH PAYMENT FOR BONDS OR NOTES AUTHORIZED TO BE PAID FROM LOAN REPAYMENT OF MEMBERS, AND TO PROVIDE THAT CERTAIN POWERS ARE NOT GRANTED WHEN A JOINT SYSTEM IS ORGANIZED SOLELY FOR THE PURPOSE OF CREATING A FINANCING POOL; TO AMEND SECTION 6-25-110, AS AMENDED, RELATING TO THE AUTHORIZATION OF A JOINT SYSTEM TO INCUR DEBT AND ISSUE BONDS, SO AS TO AUTHORIZE A JOINT SYSTEM FORMED FOR THE PURPOSE OF CREATING A FINANCING POOL TO ISSUE NOTES IN ANTICIPATION OF THE ISSUANCE OF BONDS BY ITS MEMBERS TO THE GOVERNMENT; TO AMEND SECTION 6-25-120, AS AMENDED, RELATING TO PAYMENT OF NOTES, OBLIGATIONS, OR BONDS, SO AS TO INCLUDE CONSTRUCTION NOTES WITHIN THE LIST OF OBLIGATIONS WHICH MAY NOT BE PLEDGED AS FULL FAITH, CREDIT, OR TAXING POWER OF ANY MEMBER OF THE JOINT SYSTEM; TO AMEND SECTION 6-25-126, RELATING TO THE AUTHORIZATION OF A JOINT SYSTEM TO TEMPORARILY INVEST FUNDS PENDING DISBURSEMENTS IN SECURITIES, SO AS TO INCLUDE CONSTRUCTION NOTES IN ADDITION TO BONDS WHICH MAY BE AUTHORIZED IN THE RESOLUTION; TO AMEND SECTION 6-25-127, RELATING TO THE ENFORCEMENT OF RIGHTS OF BONDHOLDERS, SO AS TO INCLUDE HOLDERS OF CONSTRUCTION NOTES AS HAVING THOSE RIGHTS; TO AMEND SECTION 6-25-145, RELATING TO THE PROHIBITION OF CERTAIN FIDUCIARIES TO INVEST MONIES IN THEIR HANDS IN BONDS ISSUED UNDER THE PROVISIONS OF CHAPTER 25 OF TITLE 6, SO AS TO ADD A REFERENCE TO CONSTRUCTION NOTES; TO AMEND SECTION 6-25-155, RELATING TO BONDS AS INVESTMENT SECURITIES FOR PURPOSES OF CHAPTER 8 OF TITLE 36, SO AS TO ADD CONSTRUCTION NOTES TO THOSE EVIDENCES OF INDEBTEDNESS CONSIDERED INVESTMENT SECURITIES; AND TO AMEND SECTION 6-25-160, RELATING TO THE TAX-EXEMPT STATUS OF EVIDENCES OF INDEBTEDNESS ISSUED BY A JOINT SYSTEM, SO AS TO INCLUDE CONSTRUCTION NOTES, AND ADD A REFERENCE TO SECTION 12-2-50.

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

SECTION 1. The 1976 Code is amended by adding:

"Section 6-25-115. (A) A joint system organized for the purpose of creating a financing pool may issue from time to time its construction notes for the purpose of creating a financing pool and providing funds to defray the cost of administration of the financing pool and the costs of issuance of the construction notes. The principal of, premium if any, and the interest on an issue of construction notes must be payable solely from the proceeds of the construction notes, earning on the proceeds, the proceeds of bonds issued to the government by members of the joint system, financing agreements between the joint system and its members, and such funds and accounts of the joint system as provided by the resolution of the commission authorizing the issuance of such issue of construction notes or a trust agreement securing the issue of construction notes. Each issue of construction notes may be sold at public or private sale. The construction notes may be sold at a price, and must bear interest at a rate, as may be determined by the commission of the joint system. The construction notes of each issue must be dated and must mature in amounts and at times not exceeding two years from their respective dates, as may be determined by the commission of the joint system, and may be made redeemable before maturity at a price and under terms and conditions as may be fixed by the commission of the joint system prior to the issuance of the construction notes. The commission of the joint system shall determine the form and the manner of execution of the construction notes, including any interest coupons to be attached to them, and shall fix the denomination of the construction notes and the place of payment of principal and interest, which may be at any bank or trust company within or without the State. In case any officer whose signature or a facsimile of whose signature appears on any construction note or coupons ceases to be an officer before the delivery of the construction notes, the signature of the facsimile is nevertheless valid and sufficient for all purposes the same as if he had remained in office until the delivery. The commission of the joint system may also provide for the authentication of the construction notes by a trustee or fiscal agent. The construction notes may be issued in bearer or in fully registered form, or both, as the commission of the joint system may determine.

(B) The proceeds of the construction notes of each issue may be used solely for the purposes for which the construction notes are issued, and must be disbursed in a manner and under restrictions, if any, as the commission of the joint system may provide in the resolution authorizing the issuance of the construction notes or in any trust agreement securing them. The joint system may also provide for the replacement of any construction notes which have become mutilated or have been destroyed or lost.

(C) The proceeds of the construction notes must be applied solely to the costs of issuance thereof, the cost of administration of the joint system, to capitalized interest on the notes, and to create a financing pool.

(D) Monies in a financing pool may be loaned to members of the joint system upon such terms and conditions as are set forth by the resolution of the commission authorizing construction notes issued to provide funds for the financing pool or a trust agreement securing the issue of construction notes, provided, however, that the loan made from the financing pool may be only made upon the delivery by the borrower of such funds of a letter of commitment from the government to provide permanent financing for the capital project to be initially financed by the loan.

(E) All construction notes must be special obligations of the joint system by which they are issued, and the full faith, credit, and taxing power of neither this State nor any of its political subdivisions may be pledged for these notes. All construction notes shall include a legend substantially similar to the following:

THIS NOTE IS A SPECIAL AND LIMITED OBLIGATION OF (NAME OF JOINT SYSTEM), A BODY CORPORATE AND POLITIC OF THE STATE OF SOUTH CAROLINA. THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THIS NOTE IS NOT PAYABLE FROM THE GENERAL FUNDS OF THE (NAME OF JOINT SYSTEM), NOR DOES IT 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 ISSUANCE OF THIS NOTE OR THE TRUST AGREEMENT SECURING THIS NOTE. THIS NOTE DOES NOT CONSTITUTE A DEBT, LIABILITY, OR OTHER OBLIGATION OF THE STATE OF SOUTH CAROLINA, OR ANY POLITICAL SUBDIVISION OF IT. THE (NAME OF JOINT SYSTEM) IS NOT OBLIGATED TO PAY THIS NOTE OR THE INTEREST HEREON EXCEPT FROM THE REVENUES, FUNDS, AND ASSETS PLEDGED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF SOUTH CAROLINA. THE (NAME OF JOINT SYSTEM) OR ITS MEMBER ENTITIES IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THIS NOTE. NO HOLDER OF THIS NOTE HAS THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER BY THE STATE OR ANY POLITICAL SUBDIVISION OF IT OR THE FORFEITURE OF ANY OF ITS PROPERTY IN CONNECTION WITH ANY DEFAULT.

(F) Construction notes may be issued under provisions of this chapter without obtaining the consent or approval of the State or any political subdivision or any agency, commission, or instrumentality of them, but such construction notes may not be issued without the prior approval of a majority of the commissioners of the joint system present and voting at a duly called meeting of it. No member is liable for any payments in respect of any construction notes issued by a joint system except with the approval of the governing body of the member, by resolution or ordinance of the governing body of the member.

(G) In the discretion of the commission of the joint system, any construction notes issued under the provisions of this chapter may be secured by a trust agreement by and between the joint system and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the State. The trust agreement or the resolution providing for the issuance of the construction notes may contain provisions for protecting and enforcing the rights and remedies of the holders of the construction notes and of the trustees as may be reasonable and proper and not in violation of law, and may restrict the individual right of action by holders of construction notes. The trust agreement or the resolution providing for the issuance of the construction notes may contain covenants including, but not limited to, the following:

(1) the pledge of the proceeds of the construction notes, earnings on the proceeds, the proceeds of bonds issued to the government by members of the joint system, agreements between the joint system and its members, and the funds and accounts of the joint system;

(2) the terms and conditions of loans to be made from the financing pool;

(3) the setting aside of reserves and the investment, regulation, and disposition of the reserves;

(4) the custody, collection, securing, investment, and payment of any monies held for the payment of construction notes;

(5) limitations or restrictions on the purposes to which the proceeds of sale of construction notes then or thereafter issued may be applied;

(6) limitations or restrictions on the issuance of additional construction notes, the terms upon which additional construction notes may be issued and secured, or the refunding of outstanding or other construction notes;

(7) the procedure, if any, by which the terms of any contract with holders of construction notes may be amended, the percentage of construction notes the holders of which must consent to, and the manner in which the consent may be given;

(8) events of default and the rights and liabilities arising on default, the terms and conditions upon which construction notes issued under this chapter become or may be declared due before maturity, and the terms and conditions upon which the declaration and its consequences may be waived;

(9) the retention or employment of financial advisors, attorneys, independent auditors, and other technical consultants;

(10) provisions for insurance and for accounting reports and the inspection and audit of them;

(11) conditions under which the construction notes may be defeased or redeemed."

SECTION 2. The 1976 Code is amended by adding:

"Section 6-25-129. A joint system is an instrumentality of local government, and is authorized by this chapter exclusively for the performance of governmental functions, and the income of a joint system is exempt from state taxes."

SECTION 3. The 1976 Code is amended by adding:

"Section 6-25-131. None of the income, profits, or assets of a joint system may inure to the benefit of any individual or private entity."

SECTION 4. Section 6-25-20 of the 1976 Code, as last amended by Act 74 of 1997, is further amended by adding five appropriately lettered items at the end to read:

"( ) 'Construction note' or 'notes' means notes of a joint system issued to provide funds for the creation of a financing pool and costs associated with it.

( ) 'Financing agreement' means an agreement entered into by a joint system organized to create a financing pool and a member of it in connection with the lending of the proceeds of construction notes or portion thereof by the joint system to the member so as to provide for the repayment of amounts loaned and interest on it by the member to the joint system.

( ) 'Financing pool' means a fund of money, obtained through the issuance of a construction note of a joint municipal water system, which may be loaned to the members of it by way of interim financing. Not exceeding five percent of the principal amount of a financing pool may be loaned to not-for-profit corporations established pursuant to Chapter 35 of Title 33.

( ) 'Government' means the United States of America, acting through the United States Department of Agriculture, or its successor, and the agencies and divisions of it.

( ) 'Interim financing' means a bond anticipation note or notes issued pursuant to the provisions of Sections 11-17-10 to 11-17-120 in anticipation of the issuance of a bond or bonds of a municipality to be sold to the government."

SECTION 5. Section 6-25-20(h) of the 1976 Code is amended to read:

"(h) 'Member of a joint system' means those municipalities whose governing bodies have agreed (1) to create a joint municipal water system to undertake the impounding, acquisition, treatment, production, transmission, distribution, service, and sale of water to a municipality which is a member of the system and other municipalities, and persons which are not members when approved by the governing body of each member or (2) to create a joint municipal water system for the purpose of creating a financing pool. A joint municipal water system created for the purpose of creating a financing pool may have as nonvoting members not-for-profit corporations created pursuant to Chapter 35 of Title 33."

SECTION 6. Section 6-25-30 of the 1976 Code is amended by adding the following two paragraphs at the end:

"Additionally, any two or more governing bodies of municipalities may, by resolution or ordinance, determine that it is in the best interests of their municipalities, residents, and customers to create a joint system for the purpose of creating a financing pool.

A joint system may be created for the purpose of planning, financing, developing, constructing, acquiring, improving, enlarging, selling, leasing, maintaining, and operating a project or for the purpose of creating a financing pool, but not for both such purposes."

SECTION 7. Section 6-25-40 of the 1976 Code is amended by adding the following sentence at the end:

"If a joint system is formed for the purposes of creating a financing pool, the provisions of this section do not apply."

SECTION 8. Section 6-25-50 of the 1976 Code is amended to read:

"Section 6-25-50. Upon fulfilling the requirements set forth in Section 6-25-40, if applicable each governing body which determines that its participation in the proposed joint system is in its best interest shall by resolution appoint one representative to the proposed joint system. Any two or more representatives shall file with the Secretary of State an application signed by the representative of each proposed member setting forth:

(a) the names of all the proposed members and their respective appointed representatives;

(b) a certified copy of (i) the resolution or ordinance of each member determining it is in its best interest to participate in the proposed joint system and (ii) the resolution appointing such the member's representative;

(c) the desire that the joint system be organized as a public body and a body corporate and politic under this chapter;

(d) the name which is proposed for the joint system; and

(e) the purpose for creation of the joint system.

The Secretary of State shall file the application if after examining it and determining that it complies with the requirements in this section and that the proposed name of the joint system is not identical with that of any other corporation of the State or any agency or instrumentality or so nearly similar as to lead to confusion and uncertainty.

After the application has been made and filed, the Secretary of State shall issue a corporate certificate which shall must be filed with the application, and the joint system shall then must be constituted a public body corporate and politic under the name proposed in the application. The corporate certificate shall set forth the names of the all voting members and of the name of the joint system. There must also be stated upon the corporate certificate the purpose for which it has been created, as set forth in the application. Notice of the issuance of such corporate certificate shall must be given to all members of the joint system by the Secretary of State.

In any suit, action, or proceeding involving the validity or enforcement of, or relating to, any contract of a joint system, the joint system in the absence of establishing fraud shall be conclusively deemed considered to have been established in accordance with the provisions of this chapter upon proof of the issuance of the certificate by the Secretary of State. A copy of such the certificate, duly certified by the Secretary of State, shall be is admissible in evidence in any suit, action, or proceeding and shall be is conclusive proof of the filing and contents."

SECTION 9. Section 6-25-60(a) and (b) of the 1976 Code, as last amended by Act 569 of 1988, is further amended to read:

"(a) The management and control of a joint system shall be is vested in a commission. The governing body of each voting member of a joint system shall appoint a representative who shall must be a commissioner of the joint system. The representative may be an officer or employee of the member and may also serve ex officio as a member of the commission. Each commissioner shall have has one vote and may have additional votes as a majority of the members of the joint system determines. Each commissioner shall serve at the pleasure of the governing body by which he was appointed. Each appointed commissioner, before entering upon his duties, shall take and subscribe to an oath before a person authorized by law to administer oaths to execute the duties of his office faithfully and impartially, and a record of each oath shall must be filed with the governing body of the appointing authority.

If the commissioners unanimously designate any member for additional representation, then the governing body of any member designated is entitled to appoint up to two additional representatives to be commissioners of the joint system. These additional commissioners have the same power and authority and are subject to the same limitations as the commissioners initially appointed. Once the membership of a commission has been increased in this manner, the additional votes provision of the preceding paragraph no longer applies to the commission.

(b) The commissioners of the joint system shall annually, or biennially, if provided in the bylaws of the joint system, elect, with each commissioner having one vote, one of the commissioners as chairman, another as vice chairman, and other persons who may, but need not be commissioners, as treasurer, secretary and, if desired, assistant secretary. The office of treasurer may be held by the secretary or assistant secretary. The commission may also appoint such additional officers as it deems necessary. The secretary or assistant secretary of the joint system shall keep a record of the proceedings of the joint system, and the secretary shall must be the custodian of all books, records, documents, and papers filed with the joint system, the minute book or journal of the joint system, and its official seal."

SECTION 10. The last paragraph of Section 6-25-70 of the 1976 Code is amended to read:

"Notice of any change in membership must be filed in the office of the Secretary of State, and no change is final until such this filing, provided, however, that the filing is not required if a joint system is organized for the purpose of creating a financing pool."

SECTION 11. Section 6-25-80 of the 1976 Code is amended to read:

"Section 6-25-80. Whenever the commission of a joint system and the governing body of each of its members shall by resolution or ordinance determine that the purposes for which the joint system was formed have been substantially fulfilled and that all bonds issued and all other obligations incurred by the joint system have been fully paid or satisfied, such the commission and members may declare the joint system to be dissolved. On the effective date of such the resolution or ordinance, the title to all funds and other income and property owned by the joint system at the time of dissolution must be disbursed to the voting members of the joint system according to its bylaws."

SECTION 12. Section 6-25-100(n) of the 1976 Code, as last amended by Act 74 of 1997, is further amended to read:

"(n) To borrow money and issue bonds or notes of the joint system, to loan the proceeds of any borrowing to any member of the joint system to be paid solely from revenues of the system, the loan repayments of members, and such other funds as may be available therefor with a favorable vote of two-thirds of the commissioners. No bonds or notes 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 such member, by resolution or ordinance of the governing body of such the member. However, the requirements of this item are satisfied and no further action is required with respect to any bonds or notes issued to finance a project which has been approved by the governing body of such the members as provided in Section 6-25-110. 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 13. Section 6-25-100 of the 1976 Code, as last amended by Act 74 of 1997, is further amended by adding the following paragraph at the end:

"Provided, however, that the provisions of (g), (h), (i), (j), (p), (q), (t), (u), (v), (w), (x), (y), (z), (aa), and (bb) do not apply to a joint system organized solely for the purpose of creating a financing pool."

SECTION 14. Section 6-25-110 of the 1976 Code, as last amended by Act 74 of 1997, is further amended by adding the following sentence at the end:

"A joint system formed for the purpose of creating a financing pool may issue notes in anticipation of the issuance of bonds by its members to the government."

SECTION 15. Section 6-25-120 of the 1976 Code, as last amended by Act 74 of 1997, is further amended to read:

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

SECTION 16. Section 6-25-126 of the 1976 Code is amended to read:

"Section 6-25-126. The resolution authorizing the bonds or construction notes of any issue or the trust agreement securing the bonds or construction notes may provide that any of the monies may be temporarily invested and reinvested pending disbursements and the securities and other investments provided in the resolution or trust agreement, and must provide that any bank or trust company with which the monies are deposited shall act as trustee of the monies and shall hold and apply them for the purposes of this chapter, subject to regulation as this chapter and the resolution or trust agreement may provide."

SECTION 17. Section 6-25-127 of the 1976 Code is amended to read:

"Section 6-25-127. Any holder of bond or construction notes issued under the provisions of this chapter or any of the coupons appertaining to them, and the trustee under any trust agreement, except to the extent the rights given by this chapter may be restricted by the trust agreement or the resolution authorizing the issuance of the bonds or construction notes, may, either at law or in equity, by suit, action, mandamus, or other proceeding, protect and enforce any and all rights under the laws of the State or granted under this chapter, or, to the extent permitted by law, under the trust agreement or resolution authorizing the issuance of the bonds or under any agreement or other contract executed by the joint system pursuant to this chapter, and may enforce and compel the performance of all duties required by this chapter or by the trust agreement or resolution to be performed by any joint system or municipality or by their officers, including the fixing, charging, and collecting of rents, fees, and charges."

SECTION 18. Section 6-25-145 of the 1976 Code is amended to read:

"Section 6-25-145. It is lawful for any executor, administrator, guardian, committee, or other fiduciary to invest any monies in his hand in bonds and construction notes issued under the provisions of this chapter."

SECTION 19. Section 6-25-155 of the 1976 Code is amended to read:

"Section 6-25-155. Whether or not the bonds and interest coupons appertaining to them and construction notes are of a form and character as to be investment securities under Chapter 8 of Title 36, all bonds and interest coupons appertaining to them and construction notes issued under this chapter are hereby made investment securities within the meaning of and for all the purposes of Chapter 8 of Title 36, subject only to the provisions of the bonds and construction notes pertaining to registration."

SECTION 20. Section 6-25-160 of the 1976 Code is amended to read:

"Section 6-25-160. The principal and interest on the bonds, notes, construction notes, or other evidences of indebtedness issued pursuant to this chapter shall have the tax-exempt status prescribed by Section 12-1-60 12-2-50."

SECTION 21. This act takes effect upon approval by the Governor.

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