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Current Status Bill Number:View additional legislative information at the LPITS web site.1189 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:20020404 Primary Sponsor:Leventis All Sponsors:Leventis Drafted Document Number:l:\council\bills\gjk\21249sd02.doc Residing Body:Senate Current Committee:Finance Committee 06 SF Subject:Tobacco Settlement Revenue Management Authority Act, to extend the maturity of bonds issued under; Tobacco Master Settlement Agreement, revenues payable to the State from History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 20020404 Introduced, read first time, 06 SF referred to Committee Versions of This Bill
TO AMEND SECTION 11-49-70, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO BONDS ISSUED UNDER THE TOBACCO SETTLEMENT REVENUE MANAGEMENT AUTHORITY ACT, SO AS TO EXTEND THE MATURITY OF THE BONDS THAT MAY BE ISSUED UNDER THE ACT, AND TO AUTHORIZE THE ISSUANCE OF A SERIES OF BONDS DURING FISCAL YEAR 2001-2002 THE PROCEEDS OF WHICH SHALL BE USED TO REFUND CERTAIN OUTSTANDING INDEBTEDNESS OF THE AUTHORITY OR DEPOSITED IN THE STATE GENERAL FUND; AND TO AMEND SECTION 11-11-170, AS AMENDED, RELATING TO USES OF REVENUES PAYABLE TO THE STATE FROM THE TOBACCO MASTER SETTLEMENT AGREEMENT, SO AS TO FURTHER PROVIDE FOR THE FUNDS OR REVENUES TO WHICH THIS PROVISION APPLIES AND FOR THE SOURCES OF THESE FUNDS OR REVENUES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly hereby finds that:
(1) by Act 387 of 2000 ("Act 387"), the General Assembly established the Tobacco Settlement Revenue Management Authority (the "Authority"), and conferred upon the authority certain enumerated powers. Among other things, the authority was given the power to receive, and to issue bonds secured by, the state's tobacco receipts as defined in Act 387. The factual findings set forth in Act 387 are hereby ratified and confirmed in all respects, and are incorporated by reference herein;
(2) on March 22, 2001, the authority issued its two hundred million dollars of Tobacco Settlement Asset-Backed Bonds, Series 2001A (taxable), and its seven hundred thirty-four million five hundred thirty thousand dollars of Tobacco Settlement Asset-Backed Bonds, Series 2001b (tax exempt) (together, the "2001 Bonds"). Pursuant to the terms of Act 387, which limited the scheduled maturity of bonds issued thereunder to thirty years after the date of issuance of such bonds, the 2001 bonds were scheduled to finally mature in the year 2030;
(3) Act 387 further specified the purposes for which the state's tobacco receipts, together with the proceeds of any bonds secured by the state's tobacco receipts, must be applied. The proceeds of the 2001 bonds were applied for such purposes;
(4) the authority has been advised that significant proceeds may be realized by extending the maximum scheduled maturity of bonds issued under Act 387 to forty years and, in connection therewith, issuing bonds with a final scheduled maturity of forty years after their date of issuance, a portion of the proceeds of which will be used to refund or defease the 2001 bonds. The General Assembly therefore finds that it is in the best interests of the State of South Carolina and its residents to extend the permissible maturity of bonds issued under Act 387. The General Assembly further finds that if any bonds are issued thereunder during fiscal year 2001-2002, any proceeds of such bonds that remain after paying the costs of issuance thereof and refunding or defeasing the 2001 bonds should be deposited to the state's general fund.
SECTION 2. Section 11-49-70(F) of the 1976 Code, as added by Act 387 of 2000, is amended to read:
"(F) The authority may not issue any bond with a scheduled maturity later than thirty years after the date of issuance the fortieth fiscal year after the fiscal year in which such bond is issued."
SECTION 3. Section 11-49-70(G) of the 1976 Code, as added by Act 387 of 2000, is amended to read:
"(G) When issuing bonds for the purpose purposes described in subsection (J)(2) of this section or to refund the bonds this chapter, the authority may sell bonds either in a negotiated transaction with one or more lead underwriters selected by the board on the basis of criteria to be established by the board, or through a competitive bidding process in accordance with procedures to be established by the board. The determination of whether to sell bonds through negotiation or through competitive bidding must be made by the board."
SECTION 4. Section 11-49-70(J) of the 1976 Code, as added by Act 387 of 2000, is amended to read:
"(J) Subject to the requirements of this section, the board may authorize the issuance of bonds of the authority for one or more of the following purposes:
(1) refunding, on a current or advance-refunding basis, any outstanding bonds of the authority; or
(2) obtaining funds for delivery to the funds as provided in Section 11-11-170; or
(3) during the fiscal year ending June 30, 2002, only, and notwithstanding anything in this chapter to the contrary, obtaining funds for delivery to the state's general fund.
All proceeds of bonds issued for the purpose purposes described in item items (2) or (3) of this subsection must be delivered promptly to the respective fund or funds, except as needed to defray the costs of issuance of the bonds or to establish any required reserve fund for the bonds.
The bonds and the issuance of the bonds are subject to the provisions of Sections 11-15-20 and 11-15-30 and any successor provisions."
SECTION 5. Section 11-11-170 of the 1976 Code, as last amended by Act 7 of 2001, is further amended to read:
"Section 11-11-170. (A) All revenues payable to received by this State pursuant to the Master Settlement Agreement as described in Section 11-47-20(e) Section 11-49-130 must be used in the manner specified in this section.
(B)(1) Seventy-three percent of the revenues must be used for healthcare programs. These revenues, or the funds obtained pursuant to Chapter 49 of Title 11 proceeds of bonds issued pursuant to Section 11-49-70(J)(2), must be deposited in a fund separate and distinct from the general fund and all other funds, which is hereby established in the state treasury styled the Healthcare Tobacco Settlement Trust Fund. Earnings on this fund must be credited to the fund. The principal must remain in the fund and only the interest earnings may be appropriated and used for the following purposes:
(a) for fiscal year 2000-2001 only, the first twenty million dollars available from the principal derived from securitization must be used for hospital-base increase;
(b) the South Carolina Seniors' Prescription Drug Program, as provided in Chapter 130 of Title 44;
(c) home and community-based programs for seniors coordinated by the Department of Health and Human Services;
(d) youth smoking cessation and prevention programs coordinated by the Department of Health and Environmental Control and the Department of Alcohol and Other Drug Abuse Services;
(e) newborn infants hearing screening initiatives coordinated by the Department of Health and Environmental Control;
(f) disease prevention and elimination of health disparities: diabetes, HIV/AIDS, hypertension, and stroke, particularly in minority populations;
(g) other health related issues as determined by the General Assembly.
(2) Fifteen percent of the revenues, or of the funds obtained pursuant to Chapter 49 of Title 11 proceeds of the bonds issued pursuant to Section 11-49-70(J)(2), must be deposited in a fund separate and distinct from the general fund and all other funds, which is hereby established in the state treasury styled the Tobacco Community Trust Fund. Earnings on the fund must be credited to the fund. This fund must be used to reimburse:
(a) tobacco growers, tobacco quota holders, and tobacco warehousemen for actual losses due to reduced quotas since 1998. For purposes of this subitem, 'tobacco quota owner' and 'tobacco grower' have the meaning provided in Section 46-30-210, and the reimbursement is for losses incurred in reduced cultivation of tobacco in this State. Reimbursements must be made pursuant to eligibility requirements established by the South Carolina Tobacco Community Development Board created pursuant to Section 46-30-230;
(b) after the reimbursement provided pursuant to subitem (a), the balance must be held in an escrow account through June 30, 2012, and used as provided in subitem (a). After June 30, 2012, any account balance must be transferred to the Healthcare Tobacco Settlement Trust Fund.
(3) Ten percent of the revenues, or of the funds obtained pursuant to Chapter 49 of Title 11 proceeds of bonds issued pursuant to Section 11-49-70(J)(2), must be deposited in a fund separate and distinct from the general fund and all other funds, which is hereby established in the State Treasury styled the Tobacco Settlement Economic Development Fund. Earnings on the fund must be credited to the fund. This fund must be used for the following programs:
(a) the first eighty million dollars credited to the fund is set aside to be used for the purposes specified in this item except for subitem (b);
(b) for fiscal year 2000-2001 only, the next ten million dollars credited to the fund must be set aside to be available to be appropriated and used in accordance with the provisions of Section 12-37-2735; and
(c) the remaining revenue credited to the fund must be used to fund the South Carolina Water and Wastewater Infrastructure Fund as provided in Section 13-1-45.
(4) Two percent of the revenues, or of the funds obtained pursuant to Chapter 49 of Title 11 proceeds of bonds issued pursuant to Section 11-49-70(J)(2), must be deposited in a fund separate and distinct from the general fund and all other funds, which is hereby established in the state treasury styled the Tobacco Settlement Local Government Fund. Earnings on the fund must be credited to the fund. This fund must be used to fund the operation of and grants distributed by the Office of Local Government of the Division of Regional Development of the Budget and Control Board, or its successor in interest.
(C) In addition to those investments allowed pursuant to Section 11-9-660, the State Treasurer may invest and reinvest the revenues payable to the State pursuant to the Tobacco Master Settlement Agreement or funds raised pursuant to the provisions of Chapter 49 of this title and credited to the funds established by this section in any obligations of a corporation, state, or political subdivision denominated in United States dollars if the obligations bear an investment grade rating of at least two nationally recognized rating services."
SECTION 5. This act takes effect upon approval by the Governor.
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