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HOUSE AMENDMENTS AMENDED
June 6, 2002
S. 290
S. Printed 6/6/02--S.
Read the first time February 6, 2001.
TO AMEND CHAPTER 9, TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TELEPHONE, TELEGRAPH, AND EXPRESS COMPANIES, BY ADDING ARTICLE 23 SO AS TO REGULATE GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS, EXCLUDING THAT BY THE STATE BUDGET AND CONTROL BOARD, SPECIFICALLY TO PROHIBIT SPECIAL GOVERNMENTAL BENEFITS, SUBSIDIZATION OF COSTS FROM OTHER SOURCES, INCLUSION OF CERTAIN CAPITAL COSTS AND TAXES AND FEES IN THEIR RATES, AND MAINTENANCE OF SEPARATE BOOKS; TO REQUIRE THAT GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS BE SUBJECT TO THE SAME STATUTORY REGULATION AS NONGOVERNMENTAL PROVIDERS AND PREPARE AND PUBLISH AN INDEPENDENT ANNUAL AUDIT; TO PROVIDE FOR PAYMENT AND COLLECTION OF TAXES LIKE A NONGOVERNMENTAL PROVIDER; TO LIMIT THE APPLICABILITY OF THE DEPARTMENT OF REVENUE CONFIDENTIALITY PROVISIONS; TO PROVIDE THAT THE DEPARTMENT OF INSURANCE DETERMINE MARKET RATES AND REQUIRE THE RATE OF PAYMENT BY GOVERNMENTAL PROVIDERS TO EQUAL OR EXCEED THE AVERAGE MARKET RATE; AND TO EXEMPT PUBLIC UTILITIES OWNED OR OPERATED BY A MUNICIPALITY OR REGIONAL TRANSPORTATION AUTHORITY FROM OTHER REGULATION BY THE PUBLIC SERVICE COMMISSION.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. A. Section 3 of Act 789 of 1952 is amended to read:
"Section 3. Such The authority shall consist of a board of seven members as follows: (1), the Mayor of Clinton, ex officio, shall serve as a member o f the authority and shall hold office for a terms corresponding to his term as Mayor of Clinton; (2), the Mayor of Newberry, ex-officio, shall serve as a member of the authority and shall hold office for a term corresponding to his term as Mayor of Newberry; (3), the Municipal Council of each of Clinton and Newberry shall elect two members of their respective councils who shall serve. ex officio, as members of the authority and shall hold office for terms corresponding to their respective terms as such councilmen. Immediately following the effective date of this act, the respective Municipal Councils of Clinton and Newberry shall adopt resolutions designating the members of the council chosen for membership on the authority; certified copies of such resolutions shall be filed with the official records of the authority; Similar action shall be taken upon the expiration of the term of any of the members who are designated by the respective Municipal Councils of Clinton and Newberry. In making the foregoing ex officio designations, the General Assembly finds that the successful operation of the natural gas system has a distinct relation to the welfare of Clinton and Newberry. It has, therefore, determined that those responsible for the operation of such municipalities should likewise participate in the operation of the authority. The six members so designated shall, at their first meeting, elect a seventh member, who shall reside in the service area of the authority. Such seventh member, upon his qualification, shall hold office for a term expiring four years from the date of his appointment or when his successor shall have been selected and shall have qualified, whichever shall last occur. At the expiration of the term of the seventh member, a successor shall be elected for a further term of four years. At each expiration of the term of the seventh member, his successor shall be appointed in the same manner for a term of four years who must be appointed by the legislative delegations representing Laurens and Newberry Counties, for terms of four years. In order to stagger terms, four members shall be appointed for terms of four years and three members must be appointed for terms of two years. At the expiration of the two-year terms, successors must be appointed for terms of four years. All members must reside in Newberry and Laurens Counties. In the event of a vacancy in the office of the seventh a member, a successor shall be elected for the remainder of the unexpired term. The members shall serve without salary, but shall be compensated for any actual expenses incurred by them on any official business of the authority. As soon as the seventh member shall be all members are elected, all members of the authority shall convene and shall elect one of their number as chairman and another as secretary, each of whom shall hold office for terms corresponding to their terms as members of the authority. The secretary of the authority shall from time to time file in the offices of the clerks of court for Laurens and Newberry Counties appropriate certificates, showing the personnel of the authority and the duration of the terms of the respective members."
B. Section 4(10) of Act 789 of 1952 is amended to read:
"(10) To enter into contracts of long duration for the sale of firm and interruptible gas only, but all of such contracts shall contain a provision permitting the authority to increase the price charged its customers for gas if the authority, in turn, shall be required to pay more for its gas than it did on the occasion that such contract was entered into, and no contract of any sort shall be entered into which shall 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. And, no contract of any sort shall be made respecting the sale of firm gas, which shall be sold in accordance with such schedule of rates as shall from time to tome be in effect."
C. Section 5 of Act 789 of 1952 is amended to read:
"Section 5. All net revenues derived from the system whose disposition the authority shall not have covenanted to otherwise dispose of shall be disposed of as follows:
(a). That sum which reflects the proportion of revenue derived from the sale of firm gas shall be divided between Clinton and Newberry on the basis of firm gas sold within their respective municipal service areas. For the purposes of this section, the Clinton municipal service area is defined as all of the service area of the authority lying in Laurens County, and the Newberry municipal service area is defined as all of the service area of the authority lying in Newberry County. Firm gas sales shall mean gas sold on a non-interruptible basis. Fifty percent to the City of Clinton, irrespective of where the interruptible or firm gas is sold in the services areas of the authority; and
(b). That sum which reflects the proportion of the revenue derived from the sale of interruptible gas shall be divided equally between Clinton and Newberry, irrespective of where such interruptible gas shall be sold. Interruptible gas shall mean gas not sold on a firm basis, but gas sold on an interruptible basis. Fifty percent to the City of Newberry, irrespective of where the interruptible or firm gas is sold in the services areas of the authority.
(c). That portion of the net revenues to which Newberry shall be entitled, hereinafter specified, shall be used by the authority in the manner hereinafter provided to reimburse the authority for the actual cost of constructing that portion of the transmission line which lies between the northwestern municipal limits of Newberry and the line dividing the Counties of Newberry and Laurens. Such cost shall be determined on a per foot basis, in the ratio that the distance between the northwestern municipal limits of Newberry and the line dividing the Counties of Laurens and Newberry bears to the distance between the northwestern municipal limits of Newberry and the point where the said transmission line connects with the transmission line of the Transcontinental Gas Pipe Line Company at or near Fountain Inn. That sum which represents the annual principal and interest requirements on such portion of the construction bond issue as reflects the cost of the portion of the construction bond issue as reflects the cost of the portion of the transmission line between the northwestern municipal limits of Newberry and the line dividing the Counties of Laurens and Newberry shall be deducted from the net revenues due to Newberry for so long a period of time as may be necessary to effect the retirement of such portion of the said construction bond issue. Such payments shall be applied to the effect the earliest possible retirement of the said construction bond issue The provisions of this paragraph shall may not be construed to limit the power of the authority to pledge and apply the gross revenues derived from the system in such the manner as the authority shall determine to the payment of the principal and interest on any bonds, notes, or other obligations which the authority may issue, it being intended that the application of revenues herein provided in this section for shall be is in addition thereto to that application."
D. Act 789 of 1952 is amended by adding:
"Section 4A. (A) The authority shall make a monthly full statement to each member of the legislative delegations representing Laurens and Newberry Counties.
(B) The Public Service Commission shall have conducted an annual audit. A copy of the audit must be forwarded to each member of the legislative delegations representing Laurens and Newberry Counties."
E. Notwithstanding any other provision of law, the Clinton Newberry Natural Gas Authority shall retain one and one-half percent of annual revenues which must be used directly on the operation of the authority with the remainder of unencumbered revenues returned to its customers on a pro rata basis.
F. The terms of members serving on the effective date of this section are terminated on that date. All members shall serve until their successors are appointed and qualify.
SECTION 2. A. Chapter 9 of Title 58 of the 1976 Code is amended by adding:
Section 58-9-2600. This article regulates the provision of telecommunications service by an agency or entity of the State or a political subdivision of this State, excluding the State Budget and Control Board for services provided as of this article's effective date.
Section 58-9-2610. As used in this article:
(1) 'Government-owned telecommunications service provider' means a state or local political subdivision or person or entity providing telecommunications service to the public for hire over a facility, operation, or system that is directly or indirectly owned by, operated by, or a financial benefit obtained by or derived from, an agency or entity of the State or any local government. 'Government owned telecommunications service provider' does not include the State Budget and Control Board for services provided as of this article's effective date.
The term 'Government-owned telecommunications service provider' does not include any state or local governmental entity or agency that obtains or derives financial benefit solely from leasing or renting, to any person or entity, property that is not, in and of itself, a facility used to provide telecommunications service.
(2) 'Telecommunications service' for the purpose of this section is defined in Section 58-9-2200(1).
(3) 'Person' as defined in Section 58-9-10(4) includes a 'government-owned telecommunications service provider'.
(4) 'Public' means the public generally or any limited portion of the public, including a person or corporation. The term 'public' excludes governmental agencies or entities when they receive telecommunications service from the Budget and Control Board pursuant to its statutory authority or other legal requirements;
Section 58-9-2620. Notwithstanding any other provision of law, a government-owned telecommunications service provider shall:
(1) be subject to the same local, state, and federal regulatory, statutory, and other legal requirements that nongovernment-owned telecommunications service providers are subject to, including regulation by the Public Service Commission;
(2) not be the recipient of any financial benefits of any type that nongovernment-owned telecommunications service providers are not recipients of including, but not limited to, tax exemptions and governmental subsidies of any type. Tax exempt capital financing may be used consistent with Sections 58-9-2620(A)(4)(a) and 58-9-2630(C).
(3) not be permitted to subsidize the cost of providing telecommunications service with funds from any other nontelecommunications service, operation, or other revenue source. If a determination is made that a direct or indirect subsidy has occurred, the government-owned telecommunications service provider immediately shall increase prices for telecommunications service in a manner that ensures that the subsidy shall not continue, and any amounts used directly or indirectly to subsidize the past operations shall be reimbursed to the general treasury of the appropriate state or local government;
(4) impute, in calculating the cost incurred and in the rates to be charged for the provision of telecommunications services, the following:
(a) cost of capital component that is the equivalent to the cost of capital available to nongovernment-owned telecommunications service providers in the same state or locality, and
(b) an amount equal to all taxes, licenses, fees, and other assessments applicable to a nongovernment-owned telecommunications provider including, but not limited to, federal, state, and local taxes, rights-of-way franchise consent, or administrative fees, and pole attachment fees.
(5) keep separate books and separately account for the revenues, expenses, property, and source of investment dollars associated with the provision of telecommunications service; and
(6) be required to prepare and publish an independent annual audit in accordance with generally accepted accounting principles that reflects the full cost of providing the service, including all direct and indirect costs. The indirect costs shall include, but are not limited to, amounts for rights-of-way franchise, consent, or administrative fees, regulatory fees, occupation taxes, pole attachment fees, and ad valorem taxes. The annual accounting must reflect any direct or indirect subsidies received by the government-owned telecommunications provider. Records demonstrating compliance with the provisions of this section shall be filed with the Public Service Commission and be made available for public inspection and copying. The compliance shall be overseen by the Public Service Commission pursuant to and not inconsistent with its power and jurisdiction set forth by law including Section 58-3-140.
Section 58-9-2630. (A) A government-owned telecommunications service provider shall pay or collect taxes each year in a manner equivalent to taxes paid by nongovernment-owned telecommunications service providers through payment of the following:
(1) all state taxes, including corporate income taxes, under Section 12-6-530 and utility license taxes under Section 12-20-100;
(2) all local taxes, including local business license taxes, under Section 58-9-2230, together with any franchise fees and other local taxes and fees, including impact, user, service, or permit fees, pole rental fees, and rights-of-way, franchise, consent, or administrative fees; and
(3) all property taxes on otherwise exempt real and personal property that are directly used in the provision of telecommunication services.
(B) A government-owned telecommunications service provider shall be required to compute, collect, and remit taxes in the same manner as a nongovernment-owned telecommunications service provider and shall be entitled to the same deductions.
(C) A government owned telecommunications service provider shall annually remit to the general fund of the government entity owning the telecommunications provider an amount equivalent to any and all taxes or fees a private sector telecommunications provider would be required to pay.
(D) The taxpayer confidentiality provisions contained in Title 12 shall not apply to the filings of government-owned telecommunications service providers. Provided however, the Department of Revenue shall require an annual report of all telecommunications providers. The report shall require any telecommunications company licensed in this state to report the total gross of retail telecommunications, to which the business license tax is applicable, pursuant to Section 58-9-2220. This information shall be available to any entity authorized to collect a tax on retail telecommunications or their agent. Information provided to an entity or agent authorized to collect a tax may not be disclosed or provided in any manner to any other person. Such information may only be used by an entity or agent of an entity authorized to collect a tax for purposes of determining the accuracy of tax returns, filings and payment of taxes.
Section 58-9-2650. The Department of Insurance must determine the South Carolina average market rate for private sector liability insurance for telecommunications operations. In order to have government-owned and nongovernment-owned telecommunications service providers in the same competitive position, to the extent possible, the rate paid for liability insurance for government-owned telecommunications operations must be equal to or greater than the average market rate for private sector liability insurance in South Carolina as determined by the Department of Insurance. To the extent that any government-owned telecommunications service provider pays less than the average market rate for this insurance established by the Department of Insurance, the difference shall be remitted by the government-owned telecommunications service provider to the general fund of the government owning the telecommunications provider. Provided however, nothing in this section shall be construed to mean that government - owned telecommunication providers are not covered by the South Carolina Tort Claims Act.
B. Section 58-5-30 of the 1976 Code is amended to read:
"Section 58-5-30. Nothing Except as provided in Article 23, Chapter 9 of Title 58, nothing contained in Articles 1, 3, and 5 of this chapter shall give the commission any power to regulate or interfere with public utilities owned or operated by or on behalf of any municipality or regional transportation authority (as defined in Chapter 25 of this title) or their agencies."
C. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this article is for any reason held to be unconstitutional or invalid, the holding shall not affect the constitutionality or validity of the remaining portions of this article, the General Assembly hereby declaring that it would have passed this article, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 3. (A) The General Assembly finds that:
(1) special purpose districts have been created and established for the principal purpose of furnishing natural gas throughout their respective service areas;
(2) these special purpose districts include the Chester County Natural Gas Authority, the Clinton-Newberry Natural Gas Authority, the Fort Hill Natural Gas Authority, the Lancaster County Natural Gas Authority, and the York County Natural Gas Authority (the "Gas Authorities");
(3) Section 13, Article VIII of the Constitution of the State of South Carolina provides that any political subdivision may agree with another political subdivision for the joint administration of functions and joint exercise of powers and the sharing of related costs;
(4) in many instances, the public would benefit from more efficient and better services if projects were undertaken by two or more Gas Authorities for the benefit of the residents of both;
(5) in many instances, one Gas Authority may be unable to provide services that could be provided if undertaken collectively by two or more Gas Authorities; and
(6) there is no general mechanism for the joint undertaking of projects by the Gas Authorities, the lack of which is detrimental to the public health, safety, and welfare of the residents of the several Gas Authorities.
(B) It is the intent of the General Assembly to provide to the Gas Authorities of the State a mechanism for the joint exercise of their powers, joint administration of functions, and sharing of related costs so as to ensure that the residents of this State located in the service areas of the Gas Authorities are provided with natural gas services as efficiently and inexpensively as possible. To accomplish those goals, the General Assembly intends to empower the Gas Authorities to create joint agencies to provide for the joint exercise of powers, joint administration of functions, and sharing of costs in a convenient and predictable manner.
SECTION 4. Title 6 of the 1976 Code is amended by adding:
Section 6-24-10. This chapter is known as the 'Joint Agency Act'.
Section 6-24-20. As used in this chapter:
(1) 'Cost', with respect to a project, means:
(a) all costs of planning, designing, constructing, and financing the project, including fees for professional services, costs of insurance, and costs for principal and interest, during planning, designing, and construction and for up to one year after completion of construction;
(b) all costs associated with establishing necessary or desirable reserves in connection with a project; and
(c) other expenditures of the joint agency incidental, necessary, or convenient to the acquisition, construction, implementation, reconstruction, improvement, enlargement, or extension of a project.
If a project does not involve the acquisition or construction of a facility, 'cost' includes all costs of the undertaking or funding of the undertaking. In either case, 'cost' may include those administration expenses a joint agency considers appropriate.
(2) 'Governing body' means the duly constituted governing body of a governmental entity.
(3) 'Governmental entity' means a special purpose district created by the General Assembly of this State for the principal purpose of furnishing natural gas to the residents of the service area as defined in and fully described in the act of the General Assembly that created and established the special purpose district, and in amendments to that act.
(4) 'Joint agency' means a public body and body corporate and politic organized in accordance with the provisions of this chapter.
(5) 'Member' of a joint agency means each of those governmental entities which have agreed to create a joint agency to undertake the ownership, operation, maintenance, financing, or contractual use of a project.
(6) 'Project' means a project or other undertaking pursued by a joint agency for a purpose that is a public and corporate purpose of each member of the joint agency. A project may consist of:
(a) the acquisition or construction of a facility or facilities or a system of facilities; and
(b) an administrative undertaking, such as the acquisition of insurance, investment, banking, or other like services, or the provision of interim financing in the anticipation of the collection of taxes or other revenues or grants or the issuance of bonds.
(7) 'State' means the State of South Carolina.
Section 6-24-30. (A) In addition and supplemental to other powers granted to governmental entities of the State, a governmental entity may:
(1) jointly plan, finance, develop, acquire, purchase, construct, reconstruct, improve, enlarge, own, operate, and maintain an undivided interest as a tenant-in-common in a project situated within the State with one or more governmental entities in this State and make plans and enter into contracts in connection with the project consistent with the provisions of this chapter and necessary or appropriate;
(2) undertake the exercise of any administrative function or power jointly with one or more governmental entities in this State and make plans and enter into contracts in connection with that exercise consistent with the provisions of this chapter and necessary or appropriate; and
(3) agree to share the costs of a like undertaking with another governmental entity as is appropriate.
(B) Each governmental entity agreeing to act jointly shall have the legal capacity, power, and authority, by charter, act, constitution, or other law, to so act on its own. This section does not grant any authorization other than as is specifically provided. Each governmental entity may make plans and enter into contracts severally in connection with the projects described consistent with the provisions of this chapter and necessary or appropriate.
(C) Governmental entities which become tenants-in-common pursuant to this section may waive by contract their right of partition, either in kind or by sale. The power and right to enter into agreements to waive the right of judicial partition authorized by this section are in addition to powers and rights authorized elsewhere.
Section 6-24-40. (A) Two or more governmental entities may determine by resolution, as appropriate, that it is in their best interests and those of their residents to create a joint agency for the purpose of:
(1) undertaking the planning, financing, development, acquisition, purchase, construction, reconstruction, improvement, enlargement, ownership, sale, lease, operation, or maintenance of a project or other undertaking constituting a project;
(2) undertaking the exercise of any administrative function or power and making plans and entering into contracts in connection with that exercise consistent with the provisions of this chapter as necessary or appropriate; or
(3) sharing the costs of a like undertaking with another governmental entity as is appropriate to provide for the present and future needs of the inhabitants and residents of their jurisdictions or to whom they are permitted to provide services as an alternative or supplement to assuming severally and individually the responsibilities of ownership, undertaking a project, or administering a function or power.
(B) The finding that the creation of a joint agency is in the best interests of the governmental entity and its residents, or the residents of the State, must include one or more of the following reasons:
(1) a joint agency is able to acquire, construct, own, or operate a project, administer a function, or exercise a power more efficiently and economically than its members operating individually;
(2) a joint agency is able to undertake a project or exercise a power for the benefit of its members, but one or more of its members otherwise would be unable to undertake a similar project or exercise the power acting individually;
(3) a joint agency is able to finance the cost of a project more efficiently and economically;
(4) to the extent financing is required in connection with the undertaking, better financial market acceptance results if one entity is responsible for issuing all of the bonds and incurring all other debt required for a project;
(5) fiscal savings and other advantages are obtained by providing a separate entity responsible for the:
( i) acquisition, purchase, construction, ownership, or operation of, or otherwise undertaking, a project; or
(ii) administering a function or power.
(C) If the creation of a joint agency is found to be in the best interests of a governmental entity or those it serves, notice of the adoption of the resolution must be published once a week for two consecutive weeks in a newspaper of general circulation within the county in which the governmental entity is located or, if the governmental entity is located in two or more counties, in each of the counties, or, if the governmental entity is an agency, instrumentality, board, or commission of the State, in a newspaper of general circulation within the State. A person affected by the action of the governmental entity may challenge the action by action de novo instituted in the court of common pleas for the county in which the governmental entity is located or, if the governmental entity is located in two or more counties, in one of the counties, within twenty days following the last publication of the notice.
Section 6-24-50. (A) Upon fulfilling the requirements of Section 6-24-40, each governmental entity participating in the proposed joint agency shall appoint by resolution one representative to the proposed joint agency. Two or more appointed representatives shall file with the Secretary of State an application signed by the representative of each of the proposed members. The application must include:
(1) names of all the proposed members and their respective appointed representatives;
(2) a certified copy of:
( i) the resolution of each member determining it is in its best interests or the best interests of those it serves to participate in the proposed joint agency; and
(ii) the resolution appointing the member's representative;
(3) the statement of desire that the joint agency be organized as a public body and a body corporate and politic pursuant to this chapter;
(4) the proposed name for the joint agency; and
(5) the method of appointment of the board of directors, including the number of directors appointed by each member.
(B) The Secretary of State shall file the application after examining it and determining that it complies with the requirements of subsection (A) and that the proposed name of the joint agency is not identical to that of another corporation of the State or an agency or instrumentality, or so similar as to lead to confusion and uncertainty.
(C) The Secretary of State then shall issue a corporate certificate. The corporate certificate must include the names of the members and the name of the joint agency. The existence of the joint agency as a public body corporate and politic under the proposed name begins when the corporate certificate is issued by the Secretary of State. Notice of the issuance of the corporate certificate must be given to all members of the joint agency by the Secretary of State.
(D) In any suit, action, or proceeding involving the validity or enforcement of or otherwise relating to a contract of a joint agency, the joint agency is presumed conclusively 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, absent a showing of fraud. A copy of the certificate, duly certified by the Secretary of State, is admissible in evidence in any suit, action, or proceeding and is conclusive proof of the filing and contents.
Section 6-24-60. (A) Management and control of the joint agency is vested in a board of directors consisting of the number of directors specified in the application as filed or as amended. The governing body of each member of the joint agency shall appoint the number of representatives provided, and each appointed representative is a director of the joint agency. The governing body of a member may provide that a representative be an officer or employee of the member and also serve ex officio as a member of the board of directors of the joint agency. Each director has at least one vote and has additional votes as a majority of the members of the joint agency may determine. Each director, who serves at the pleasure of the governing body by which he was appointed, 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. A record of each oath must be filed with the governing body of the appointing governmental entity.
(B) The board of directors of the joint agency shall elect annually, with each director having one vote, one of the directors as chairman, another as vice-chairman, and other persons who may be, but need not be, directors as treasurer, secretary, and, if desired, assistant secretary. The office of treasurer may be held by the secretary or assistant secretary. The board of directors also may appoint additional officers as it considers necessary. The secretary or assistant secretary of the joint agency shall keep a record of the proceedings of the joint agency and the secretary is the custodian of all books, records, documents, and papers filed with the joint agency, the minute book or journal of the joint agency, and its official seal.
(C) A majority of the directors of the joint agency constitutes a quorum. A vacancy on the board of directors of the joint agency does not impair the right of a quorum to exercise all rights and perform all duties of the joint agency. An action taken by the joint agency pursuant to this chapter must be authorized by resolution at a regular or special meeting held pursuant to notice in accordance with bylaws of the joint agency, and each resolution takes effect immediately, without publication or posting. Except as otherwise provided in this chapter or in the bylaws of the joint agency, a majority of the votes which the directors present are entitled to cast, with a quorum present, is necessary and sufficient to take any action or to pass a resolution. A director of a joint agency may not receive compensation solely for the performance of duties as a director, but each director may be paid per diem, mileage, and subsistence expenses as provided by law for state boards, committees, and commissions.
Section 6-24-70. (A) After a joint agency is created, another governmental entity may become a member by:
(1) adopting a resolution complying with the requirements of Section 6-24-40, including publication of notice;
(2) submitting an application to the joint agency; and
(3) receiving approval of the application by resolution from the governing body of each member of the joint agency. The approval must include approval of any changes to the board of directors resulting from the addition.
(B) A member may withdraw from a joint agency by resolution of its governing body. All contractual rights acquired and contractual obligations incurred by a member while it was a member of the joint agency remain in full force and effect. Upon withdrawal of a member, the board of directors must be reduced by the number of directors appointed by the withdrawing member.
(C) The members of a joint agency may modify the composition of the board of directors to increase or decrease the number of directors or to change the number of directors appointed by each member through the adoption of a resolution approving the modification by the governing body of each member.
(D) Notice of a change in membership and a modification of the board of directors, including changes resulting from a change in membership, must be filed with the Secretary of State. A change is not final until the filing.
Section 6-24-80. If the board of directors of a joint agency and the governing body of each of its members determine by resolution that the purposes for which the joint agency was formed have been fulfilled substantially and that all bonds issued and all other obligations incurred by the joint agency have been paid or satisfied fully, the board of directors and members may declare the joint agency to be dissolved. On the effective date of the resolution, title to all funds and other property owned by the joint agency at the time of the dissolution must be disbursed to the members of the joint agency according to its bylaws.
Section 6-24-90. The board of directors of a joint agency may create an executive committee, the composition of which must be set forth in the bylaws of the joint agency and reflect a fair representation of the members. The executive committee may exercise powers during intervals between the board's meetings as provided by the board. The terms of office of the members of the executive committee and the methods of filling vacancies must be fixed by the bylaws of the joint agency.
Section 6-24-100. Each joint agency has the rights and powers of a public body politic and corporate of the State including, without limitation, all the rights and powers necessary or convenient to carry out and effectuate the provisions of this chapter including, but not limited to, rights and powers to:
( 1) adopt bylaws for the regulation of its affairs and the conduct of its business and to prescribe rules and policies and promulgate regulations in connection with the performance of its functions and duties;
( 2) adopt an official seal and alter it at its pleasure;
( 3) maintain an office at a place it determines;
( 4) sue and be sued in its own name and to plead and be impleaded;
( 5) receive, administer, and comply with the conditions and requirements of a gift, grant, or donation of property or money;
( 6) acquire by purchase, lease, gift, or otherwise acquire or to obtain options for the acquisition of property, real or personal, improved or unimproved, including an interest in land less than the fee in conformity with state law;
( 7) sell, lease, exchange, transfer, or otherwise dispose of, or to grant options for those purposes with respect to, real or personal property, insurance, recovery, or condemnation award;
( 8) pledge or assign any money, rents, charges, or other evidence of indebtedness of the joint agency for the purpose of providing funds for its corporate purposes;
( 9) borrow money and issue notes, bonds, or other evidence of indebtedness of the joint agency for the purpose of providing funds for its corporate purposes;
(10) authorize the construction, operation, or maintenance of a project by a person, firm, or corporation, including political subdivisions and agencies of a state of the United States;
(11) acquire by negotiated purchase or lease from one of its members one or more projects which may be an existing project, project under construction, or other project, either individually or jointly with one or more other governing bodies or joint agencies in this State;
(12) fix, charge, and collect rents, rates, fees, and charges in connection with a project;
(13) make and execute contracts and other instruments necessary or convenient in the exercise of the powers and functions of the joint agency pursuant to this chapter, including contracts with persons, firms, corporations, and others;
(14) apply to the appropriate agencies of the State, the United States, or any state of the United States, and to another proper agency for necessary permits, licenses, certificates, or approvals and to construct, maintain, and operate projects in accordance with those licenses, permits, certificates, or approvals; and
(15) employ engineers, architects, attorneys, appraisers, financial advisors, and other consultants and employees as required in the judgment of the joint agency and to fix and pay their compensation from funds available to the joint agency for that purpose.
Section 6-24-110. (A) A governmental entity may contract with the joint agency for its present or future service requirements, including the capacity and output of one or more specified projects. The contract may provide that the contracting governmental entity is obligated to make the payments required by the contract whether or not a project is completed, operable, or operating and that payments pursuant to the contract are not subject to reduction, whether by offset or otherwise, and are not conditioned upon the performance or nonperformance of the joint agency or a member of the joint agency pursuant to the contract or other instrument. A contract entered into between a joint agency and its members also may provide that the remaining members of the joint agency shall assume on a proportional basis the obligations of a defaulting member if one or more of the members defaults in the payment of the obligations.
(B) A contract entered into between a governmental entity and a joint agency may be in the form of an obligation or bond issued under another statute authorizing or permitting the incurring of indebtedness by the governmental entity. The provisions of another statute authorizing or permitting the incurring of indebtedness by the governmental entity do not apply to the extent they would prohibit or limit the sale of the obligation by negotiation to a joint agency and the form of the obligation as a single instrument payable to the joint agency on terms as the joint agency considers appropriate. If the statute requires the establishment or maintenance of reserves or other funds or accounts, intended as security for the holders of the obligations, the joint agency may elect to eliminate or waive those requirements. To the extent any statute provides a lien or permits the pledge of property or revenues as security for obligations issued under it, the joint agency may be the direct beneficiary of the lien or pledge or to waive it.
(C) Notwithstanding the provisions of another law to the contrary, a contract between a governmental entity and a joint agency may extend for a period not exceeding fifty years from the date services are first provided pursuant to the contract, and the execution and effectiveness of the contract is not subject to authorizations or approvals by the State or any agency, commission, or instrumentality or political subdivision of the State.
(D) Except as specifically provided by the terms of the contract, payments by a governmental entity pursuant to a contract with a joint agency are not a legal or equitable pledge, charge, lien, or encumbrance upon property of the governmental entity or upon its income, receipts, or revenues. The faith and credit or the taxing power of the governmental entity may be pledged from the payment of an obligation under the contract only to the extent the contract obligation is treated like a general obligation debt of the governmental entity and is subject to the same constitutional debt limitations as other general obligation debts of the governmental entity.
(E) A governmental entity may authorize a joint agency to act on its behalf in the same manner and to the same extent as any agency, commission, or employee of the governmental entity. A governmental entity may exercise its governmental powers on behalf of a joint agency in instances where the exercise of the power cannot be delegated.
Section 6-24-120. A joint agency may incur debt for its purposes and may issue bonds pledging the revenues derived from all or any of its projects and additions and betterments or extensions or contributions or advances from its members to the payment of both principal and interest.
Section 6-24-130. If a joint agency undertakes a project requiring financing, in whole or in part, with the proceeds of bonds, and the payment of principal or interest on the bonds is assured directly or indirectly by a contract with one or more members, the project must not be undertaken without the approval of the governing body of each member which provides assurance. For these purposes, a member has not assured payment on bonds unless its obligation pursuant to the contract is absolute and without regard to the completion or operation of the project.
Section 6-24-140. (A) A joint agency may issue at one time, or from time to time, its bonds for the purpose of paying all or part of the cost of the purposes authorized by this chapter. The principal of and the interest on the bonds, and any premium, are payable only from the fund provided for payment. The bonds of each issue may be sold at public or private sale. Notwithstanding another provision of law to the contrary, the bonds may be sold at a price, and bear interest at a rate or rates, as determined by the board of directors of the joint agency. The bonds of each issue must be dated and must mature in amounts and at a time, not exceeding fifty years from their respective date, as determined by the board of directors of the joint agency, and may be redeemable before maturity at a price and by terms and conditions as fixed by the board of directors of the joint agency before the issuance of the bonds. The board of directors of the joint agency shall determine the form and the manner of execution of the bonds, including interest coupons attached to them, and shall fix the denomination of the bonds and the place of payment of principal and interest, which may be at a bank or trust company inside or outside the State. If an officer whose signature or signature facsimile appears on a bond or coupons ceases to be an officer before the delivery of the bonds, the signature or facsimile is valid and sufficient for all purposes as if he had remained in office until delivery. The board of directors of the joint agency also may provide for the authentication of the bonds by a trustee or fiscal agent. The bonds may be issued in fully registered form or under a book-entry-only system, as the governing body of the issuer determines.
(B) The proceeds of the bonds of each issue must be used only for the purposes for which the bonds were issued, and must be disbursed in a manner as the board of directors of the joint agency provides in the resolution authorizing the issuance of the bonds or in a trust agreement securing the issuance. The joint agency may issue interim receipts or temporary bonds exchangeable for definitive bonds when the bonds are executed and available for delivery. The joint agency also may provide for the replacement of bonds which are mutilated, destroyed, or lost.
(C) Bonds may be issued pursuant to this chapter without obtaining the consent or approval of the State or any political subdivision, or agency, commission, or instrumentality of the State.
Section 6-24-150. The board of directors of the joint agency may elect to have bonds issued pursuant to this chapter secured by a trust agreement between the joint agency and a corporate trustee, which may be any trust company or bank having the powers of a trust company inside or outside the State. The trustee agreement or the resolution providing for the issuance of the bonds may contain provisions for protecting and enforcing the rights and remedies of the bondholders and of the trustee as may be reasonable and proper and not in violation of law, and may restrict the individual right of action by bondholders. The trust agreement or the resolution providing for the issuance of the bonds may contain covenants including, but not limited to, the:
( 1) assignment or pledge of:
(a) all or a part of the revenues derived from the project financed by the bonds; or
(b) the contracts and any collateral between the joint agency and any of its members or other governmental entities;
( 2) rents, rates, fees, and charges to be established, maintained, and collected and the use and disposal of revenues, gifts, grants, and funds received by the joint agency;
( 3) setting aside, investment, regulation, and disposition of reserves;
( 4) custody, collection, securing, investment, and payment of monies held for the payment of bonds;
( 5) limitations or restrictions on the purposes to which the proceeds of sale of issued bonds must be applied;
( 6) limitations or restrictions on the issuance and security of additional bonds or the refunding of outstanding or other bonds;
( 7) procedure for amending the terms of a contract with bondholders;
( 8) events of default and the rights and liabilities arising upon default, and the terms and conditions upon which bonds issued pursuant to this chapter are or may be declared due before maturity, and the terms and conditions upon which that declaration and its consequences may be waived;
( 9) preparation and maintenance of a budget;
(10) retention or employment of conducting engineers, independent auditors, and other technical consultants;
(11) limitations on, or the prohibition of, free service to a person, firm, or corporation, public or private;
(12) acquisition and disposal of property, except that a project or part of a project must not be mortgaged by the trust agreement or resolution. The joint agency may mortgage other property owned by it;
(13) provisions for insurance and for accounting reports and their inspection and audit;
(14) continuing operation and maintenance of the project.
Section 6-24-160. (A) The joint agency may fix, charge, and collect rents, rates, fees, and charges for services provided by the agency or the use of a project so as to provide revenues, for so long as the bonds are outstanding and unpaid, at least sufficient together with other available funds to:
(1) pay all costs of and charges and expenses in connection with the proper operation and maintenance of its projects and for all necessary repairs, replacements, or renewals;
(2) pay when due the principal and interest and any premiums on all bonds payable from the revenues;
(3) create and maintain reserves and comply with covenants required by a resolution or trust agreement authorizing and securing bonds; and
(4) pay amounts which the joint agency may be obligated by law or contract to pay from the revenues.
(B) A pledge made by a joint agency pursuant to this chapter is valid and binding from the date the pledge is made. The revenues, securities, and other monies pledged and held or received afterwards by the joint agency or fiduciary are subject immediately to the lien of the pledge without physical delivery of it or other act, and the lien of the pledge is valid and binding as against all parties having claims in tort, contract, or otherwise against the governmental entity or joint agency without regard to whether the parties have notice of it.
Section 6-24-170. The resolution authorizing the bonds of an issue or the trust agreement securing the bonds may provide that the monies may be invested temporarily and reinvested pending disbursement in securities and other investments provided in the resolution or trust agreement. The resolution or trust agreement must provide that a bank or trust company with which the monies are deposited shall act as trustee of the monies and hold and apply them for the purposes of this joint agency, subject to regulation as this chapter and the resolution or trust agreement provide.
Section 6-24-180. A holder of bonds issued pursuant to this chapter and the trustee pursuant to a trust agreement, except to the extent the rights are restricted by the trust agreement or the resolution authorizing the issuance of the bonds, may protect and enforce, either at law or in equity, by suit, action, mandamus, or other proceeding, all rights and compel performance of all duties arising out of the law of the State or terms of the trust agreement or resolution or other contract.
Section 6-24-190. All bonds issued pursuant to this chapter are investment securities within the meaning of and for all the purposes of Chapter 8, Title 36 of the 1976 Code, subject only to the provisions of the bonds pertaining to registration, regardless of whether or not the bonds authorized by this chapter are of such form and character as to be investment securities pursuant to Chapter 7, Title 36 of the 1976 Code.
Section 6-24-200. It is lawful for all executors, administrators, guardians, committees, and other fiduciaries to invest monies in their hands in bonds issued pursuant to this chapter.
Section 6-24-210. The bonds issued pursuant to this chapter are special obligations of the joint agency issuing them. The principal and interest and any premium on the bonds are not payable from the general fund of the joint agency, nor are they a legal or equitable pledge, charge, lien, or encumbrance upon any of its property, income, receipts, or revenues, except the funds which are pledged pursuant to the resolution authorizing the bonds or the trust agreement securing the bonds. Except as specifically provided with respect to an obligation of a governmental entity which is a general obligation, the faith and credit and the taxing power of the State of any governmental entity must not be pledged for the payment of the principal or interest on the bonds, and a holder of the bonds may not compel the exercise of the taxing power by the State and any governmental entity or the forfeiture of any of this property in connection with any default on the bonds. A bond must recite in substance that the principal of and interest on the bond is payable only from the revenues pledged to its payment and that the joint agency is not obligated to pay the principal or interest except from those revenues.
Section 6-24-220. A joint agency may provide by resolution for the issuance of refunding bonds of the joint agency for the purpose of refunding outstanding bonds issued pursuant to this chapter, including the payment of a redemption premium on them and interest accrued to the date of their redemption. The refund of outstanding bonds may be exercised as considered desirable by the board of the joint agency. The issuance of the bonds, their maturities and other terms, the rights of their holders, and the rights, duties, and obligations of the joint agency in respect to the bonds must be governed by the provisions of this chapter relating to the issuance of bonds to the extent those provisions apply.
Section 6-24-240. (A) Personnel employed or appointed by a member of a joint agency to work for it have the same authority, rights, privileges, and immunities, including coverage pursuant to workers' compensation laws, which the officers, agents, and employees of the appointing member enjoy within the territory of that member when they are acting within the scope of their authority or in the course of their employment.
(B) Personnel employed or appointed directly by a joint agency may participate in the South Carolina Retirement System if they are residents of this State with the same rights, privileges, obligations, and responsibilities as if they were employees of a governmental entity.
Section 6-24-250. At the close of each fiscal year, a joint agency shall submit an annual report of its activities for the preceding year to each member, including a complete operating and financial statement covering the operations of the joint agency during the year. The joint agency shall cause an audit of its books of record and accounts to be made at least once a year by a certified public accountant, and the cost of the audit may be treated as a part of the cost of construction of a project or otherwise as part of the expense of administration of a project covered by the audit.
Section 6-24-260. (A) The board of directors of a joint agency may make application and enter into contracts for and accept grants-in-aid and loans from the federal and state governments and their agencies or political subdivisions, including members, for planning, acquiring, constructing, expanding, maintaining, and operating a project or facility or participating in a reserve or development program or performing a function which a member of the joint agency may authorize by general or local law to provide or perform.
(B) The board of directors of a joint agency may:
(1) enter into and carry out contracts with the state or federal government or an agency or institution through which the government, agency, or institution grants financial or other assistance to the member or joint agency;
(2) accept assistance or funds granted or loaned by the state or federal government with or without a contract;
(3) agree to and comply with reasonable conditions imposed upon grants or loans; and
(4) make expenditures from granted funds.
Section 6-24-270. A joint agency formed by governmental entities which themselves possess the power of eminent domain for the purpose for which the joint agency was formed possesses the power of eminent domain within the jurisdictional limits of its members in accordance with Sections 5-7-50 and 4-29-30 or other provision of law as may be applicable so as to effectuate the purposes of this chapter and may exercise the power as provided in Title 28.
Section 6-24-280. A director of a joint agency or officer of a governmental entity or person acting for him is not subject to personal liability by reason of carrying out any of the powers expressly or impliedly provided in this chapter while acting within the scope of his authority.
Section 6-24-290. This chapter provides an additional method for accomplishing the acts authorized, and is supplemental to powers conferred by existing laws and not in derogation of powers now existing. If a provision of this chapter is inconsistent with the provisions of other general, special, or local law, the provisions of this chapter control.
Section 6-24-300. The provisions of this chapter must be liberally construed."
SECTION 5. Upon approval by the Governor this act takes effect July 1, 2002.
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