South Carolina General Assembly
115th Session, 2003-2004

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Bill 837

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Indicates New Matter


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COMMITTEE REPORT

February 4, 2004

S. 837

Introduced by Senators Rankin, Kuhn and Hutto

S. Printed 2/4/04--S.

Read the first time January 14, 2004.

            

THE COMMITTEE ON JUDICIARY

To whom was referred a Joint Resolution (S. 837) to provide the proceeds from the sale of any surplus real property identified by the Board of Directors of the South Carolina Public Service Authority must be retained by Santee Cooper and used, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass with amendment:

Amend the joint resolution, as and if amended, page 3, beginning on line 2, in SECTION 1, by striking lines 2 through 8 in their entirety and inserting therein the following:

/    SECTION    1.     (A)    Except as provided in Section 58-31-110, the proceeds from the sale of any surplus property identified by the board of directors of the South Carolina Public Service Authority or funds derived from any other source, including borrowed funds, must be retained by Santee Cooper and used for its purposes and not transferred to the State of South Carolina to help alleviate state budget shortfalls.     /

Renumber sections to conform.

Amend title to conform.

WILLIAM MESCHER for Committee.

            

STATEMENT OF ESTIMATED FISCAL IMPACT

REVENUE IMPACT1/

This Joint Resolution is not expected to reduce general fund revenue in FY2004-05. However, this joint resolution would prevent a $13,000,000 one-time transfer from Santee Cooper to the state's general fund in FY2004-05 as had been proposed by the Santee Cooper Board of Directors on December 15, 2003.

Explanation

This Joint Resolution would not allow Santee Cooper to transfer $13,000,000 in one-time funds to the state's general fund during FY2004-05 as had been approved by the Santee Cooper Board of Directors on December 15, 2003. According to a resolution adopted by the Santee Cooper Board of Directors on December 15, 2003, $13,000,000 would have been advanced to the General Fund in two equal payments during FY2004-05 and would have been paid for by the expected future sale of certain surplus properties owned by Santee Cooper that were thought to be no longer necessary for operation of the corporation. This joint resolution would prevent this and any similar future transfers from occurring and would instead direct Santee Cooper to use such funds for its own purposes, which might include customer rate reductions, principal and interest payments, and/or other recurring purposes of the corporation. This joint resolution would not impact or otherwise reduce current general fund transfers received semi-annually from Santee Cooper pursuant to SC Code Section 58-31-110 which have totaled approximately $10,000,000 annually in recent years. As such, this joint resolution is not expected to reduce general fund revenue in FY2004-05. However, this joint resolution would prevent a $13,000,000 one-time transfer from Santee Cooper to the state's general fund in FY2004-05 as had been proposed by the Santee Cooper Board of Directors on December 15, 2003.

Approved By:

William C. Gillespie

Board of Economic Advisors

1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.

A JOINT RESOLUTION

TO PROVIDE THE PROCEEDS FROM THE SALE OF ANY SURPLUS REAL PROPERTY IDENTIFIED BY THE BOARD OF DIRECTORS OF THE SOUTH CAROLINA PUBLIC SERVICE AUTHORITY MUST BE RETAINED BY SANTEE COOPER AND USED FOR ITS PURPOSES AND NOT TRANSFERRED TO THE STATE OF SOUTH CAROLINA TO HELP ALLEVIATE STATE BUDGET SHORTFALLS, TO PROVIDE THAT ANY OTHER USE OF THESE PROCEEDS MUST BE EXPRESSLY APPROVED BY THE GENERAL ASSEMBLY, TO PROVIDE THAT IF THE PROCEEDS FROM SUCH SALES HAVE BEEN USED OR DISTRIBUTED IN VIOLATION OF THIS RESOLUTION, THESE PROCEEDS MUST BE RETURNED TO THE PUBLIC SERVICE AUTHORITY AND USED IN THE MANNER REQUIRED BY THIS JOINT RESOLUTION, AND TO PROVIDE THAT ANY RESOLUTION OR PARTS OF A RESOLUTION OF THE BOARD OF DIRECTORS OF THE PUBLIC SERVICE AUTHORITY CONTRARY TO THE REQUIREMENTS OF THIS JOINT RESOLUTION IS NULL AND VOID.

Whereas, the South Carolina Public Service Authority is established by the provision of Chapter 31 of Title 58 of the 1976 Code and is authorized by these provisions to generate and produce electricity and to treat or sell water at wholesale; and

Whereas, Section 58-31-110 of the 1976 Code provides as follows:

"The South Carolina Public Service Authority is a corporation, completely owned by and to be operated for the benefit of the people of this State, and any and all net earnings thereof not necessary or desirable for the prudent conduct and operation of its business or to pay the principal of and interest on its bonds, notes or other evidences of indebtedness or other obligations or to fulfill the terms and provisions of any agreements made with the purchasers or holders thereof or others shall be paid over semiannually to the State Treasurer for the general funds of the State and shall be used to reduce the tax burdens on the people of this State."; and

Whereas, the Santee Cooper Board of Directors, by resolution, has determined that certain real properties owned by Santee Cooper are surplus to its future operating needs; and

Whereas, the board believes that the sale of these surplus properties would produce approximately thirteen million dollars; and

Whereas, the board has adopted a resolution proposing to transfer this thirteen million dollars to the State of South Carolina to assist the State with its budget difficulties and revenue shortfalls and has further proposed in the resolution the specific manner and use of these funds by the State; and

Whereas, the General Assembly believes no such action should be undertaken by the board in regard to the sale of any surplus property where the proceeds of such sale are directed toward a purpose other than those of the Public Service Authority without the express approval of the General Assembly and further that any such other use of the proceeds is solely the prerogative of the General Assembly; and

Whereas, the proceeds from such sales should not be transferred to the State but instead should be used for the purposes of the Public Service Authority including rate reductions to customers, payment of additional principal and interest on existing bonded or other debt, and for other recurring purposes of the authority; and

Whereas, to not retain these proceeds would constitute an indirect tax increase on the customers of Santee Cooper by depriving Santee Cooper of resources that could be used for the benefit of these customers and for the betterment of Santee Cooper as an economic development engine of the State of South Carolina. Now, therefore,

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

SECTION    1.        (A)    The proceeds from the sale of any surplus real property identified by the board of directors of the South Carolina Public Service Authority must be retained by Santee Cooper and used for its purposes and not transferred to the State of South Carolina to help alleviate state budget shortfalls, and that any other use of these proceeds must be expressly approved by the General Assembly.

(B)    If the proceeds from such sales have been used or distributed in violation of subsection (A), these proceeds must be returned to the Public Service Authority and used in the manner required by this joint resolution.

(C)    Any resolution or parts of a resolution of the board of directors of the Public Service Authority contrary to the requirements of this joint resolution is null and void.

SECTION    2.    This joint resolution takes effect upon approval by the Governor.

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