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TO AMEND SECTIONS 11-27-40 AND 11-27-50, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE EFFECT OF ARTICLE X OF THE CONSTITUTION OF THIS STATE ON POLITICAL SUBDIVISIONS AND SCHOOL DISTRICTS, SO AS TO REQUIRE THE MEMBERS OF THE GOVERNING BODY OF A SUCCESSOR-IN-INTEREST, TRANSFEREE, OR ASSOCIATE OF THESE ENTITIES TO BE BONDED IN AN AMOUNT THAT WHEN AGGREGATED EQUALS THE THEN OUTSTANDING BALANCE OF THE DEBT INCURRED WHEN THE SUCCESSOR-IN-INTEREST, TRANSFEREE, OR ASSOCIATE UNDERTAKES A DUTY OF THOSE ENTITIES AND IN SO DOING INCURS DEBT SERVICED BY GENERAL OBLIGATION BORROWING OF THOSE ENTITIES AND TO PROHIBIT FUNDS DERIVED FROM THE POLITICAL SUBDIVISION OR SCHOOL DISTRICT TO BE USED TO PAY FOR THE BOND.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 11-27-40 of the 1976 Code, as last amended by Act 113 of 1999, is further amended by adding an appropriately numbered item at the end to read:
". For purposes of this section, members of the governing body of a complete or partial successor-in-interest to, or other transferee of, a political subdivision of the State or other associate of any kind of the political subdivision, when that successor-in-interest, transferee, or associate of the political subdivision undertakes a duty of the political subdivision and in that undertaking incurs debt serviced by general obligation borrowing of the political subdivision, must be bonded in an amount that when aggregated equals the then outstanding balance of the debt incurred by the successor-in-interest, transferee, or associate of the political subdivision. Funds derived directly or indirectly from the political subdivision may not be used to pay for the required bond."
SECTION 2. Section 11-27-50 of the 1976 Code, as last amended by Act 113 of 1999, is further amended by adding an appropriately numbered item at the end to read:
". For purposes of this section, members of the governing body of a complete or partial successor-in-interest to, or other transferee of, a school district or other associate of any kind of the school district, when that successor-in-interest, transferee, or associate of the school district undertakes a duty of the school district and in that undertaking incurs debt serviced by general obligation borrowing of the school district, must be bonded in an amount that when aggregated equals the then outstanding balance of the debt incurred by the successor-in-interest, transferee, or associate of the school district. Funds derived directly or indirectly from the school district may not be used to pay for the required bond."
SECTION 3. This act takes effect on the first day of the fourth month following the month in which this act is approved by the Governor.
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