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S. 1225
STATUS INFORMATION
Joint Resolution
Sponsors: Senators Leatherman and Courson
Document Path: l:\s-res\hkl\021uscr.dag.doc
Companion/Similar bill(s): 976, 4520
Introduced in the Senate on March 25, 2008
Currently residing in the Senate Committee on Finance
Summary: University of South Carolina
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 3/25/2008 Senate Introduced and read first time SJ-2 3/25/2008 Senate Referred to Committee on Finance SJ-2
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AUTHORIZE THE UNIVERSITY OF SOUTH CAROLINA TO ISSUE REVENUE BONDS TO PROVIDE FUNDS FOR THE ACQUISITION, CONSTRUCTION, AND EQUIPPING OF A NEW BUSINESS SCHOOL FACILITY AND FOR THE RENOVATION OF THE CLOSE-HIPP BUILDING FOR LEASE AND OCCUPANCY BY AN AGENCY OF THE FEDERAL GOVERNMENT, TO PROVIDE THAT THE REVENUE BONDS SHALL BE SECURED BY AND PAYABLE FROM A PLEDGE OF THE LEASE PAYMENTS, AND TO PROVIDE THE PROCESS BY WHICH THE REVENUE BONDS MAY BE ISSUED.
Whereas, the principal facilities of the Moore School of Business of the University of South Carolina are currently located in the Close-Hipp Building (the CH building) on the campus of the university in Columbia, South Carolina; and
Whereas, the university has determined that in order to provide for the growth and development of the Moore School, and to continue the excellence of its nationally recognized International Business and other undergraduate and graduate programs, a new facility should be constructed in the Innovista District on the Columbia Campus; and
Whereas, the university has received preliminary indications from an agency of the federal government that the federal government desires to lease and occupy the CH building for an approximate twenty-five-year period and thereby locate substantially skilled white-collar employment in the State through a lease agreement with the university (the Lease and Occupancy Agreement); and
Whereas, the university has indicated its determination to pledge the rent payments to be received from the federal government for its use of the CH building to pay and secure revenue bond indebtedness issued by the university to acquire, construct, and equip the new facility, to make certain renovations to the CH building for use by the federal government, and to pay related costs; and
Whereas, the university has demonstrated the need for the new facility and the benefits, financial and otherwise, to be received by the university from the proposed arrangement with the federal government and that additional funds are needed to provide for the acquisition, construction, renovation, and equipping of the projects; and
Whereas, consideration has been given to the need for and desirability of the projects and the methods of funding the projects, and it has been determined to be in the best interests of the people of this State to authorize the university to issue, from time to time, in one or more series, revenue bonds in an aggregate amount not exceeding one hundred twenty-five million dollars in order to provide for the acquisition, construction, equipping, and renovation of the projects and to pay related costs, provided that the revenue bonds are payable from and secured solely by payments to be received by the university from the federal government. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) Upon receiving approval of the South Carolina State Budget and Control Board and upon review by the Joint Bond Review Committee, the Board of Trustees of the University of South Carolina is authorized to cause the issuance of revenue bonds of the university, from time to time in one or more series, for the purposes of acquiring, constructing, and equipping a new facility for the Moore School in the Innovista District on the Columbia Campus and renovating the Close-Hipp Building (CH building) and related facilities for the purpose of leasing the building to the federal government. The revenue bonds shall be payable solely as provided in this joint resolution. A portion of the proceeds of the bonds issued may also be used to fund or establish any debt service reserve fund securing the bonds, to pay interest on the bonds during construction, and to pay costs of issuance, including costs of credit or liquidity enhancement, of the bonds, all as may be determined necessary by the trustees or their designee. The aggregate principal amount of bonds to be issued may not exceed one hundred twenty-five million dollars.
(B) The bonds issued pursuant to this joint resolution shall be secured by a pledge of and payable from the amounts received from the federal government for the leasing of the CH building pursuant to the lease agreement with the university (Lease and Occupancy Agreement). The faith and credit of the State shall not be pledged for the payment of the principal and interest on the bonds, and there shall be on the face of each bond a statement plainly worded to that effect. Neither the trustees nor any other person signing the bonds shall be personally liable for the bonds.
(C) In order to avail themselves of the authorization set forth in this joint resolution, the trustees shall adopt a resolution providing for the issuance of the bonds, within the limitations of this joint resolution. The resolution shall prescribe, or authorize the delivery of trust indenture documentation subscribing, the tenor, terms, and conditions of the bonds. The bonds may be issued as serial or term bonds, maturing in such amounts, at such times, and on such occasions as the trustees or their designee shall determine; provided, that the last maturing bonds shall mature not later than the earlier of the original stated termination date of the Lease and Occupancy Agreement or thirty years from the date of the issuance of the bonds. The bonds shall bear the rates of interest and shall be payable on the occasion as the trustees or their designee shall prescribe. The bonds shall be issued in specific denominations and shall be payable in a medium of payment at the place the resolution prescribes. The bonds may be issued with a provision permitting their redemption on any date prior to maturity, at the redemption price the trustees or their designee prescribe.
(D) The bonds authorized by this joint resolution and all interest to become due on them have the tax exempt status prescribed by Section 12-2-50.
(E) It is lawful for all executors, administrators, guardians, and fiduciaries, all sinking fund commissions, the board, as trustee of the South Carolina Retirement System, and all other governmental entities within this State to invest any monies in their hands in the bonds.
(F) The bonds and the coupons, if any, attached thereto, shall be executed manually or by facsimile in the name of the university in the manner and by persons as the trustees determine, and the seal of the university shall be affixed to, or impressed or reproduced on each bond. The bonds may be registrable as to principal and interest on books kept for them by or on behalf of the university, including by a corporate registrar. The delivery of the executed bonds shall be valid notwithstanding changes in officers or in the seal occurring after the execution. Notwithstanding the foregoing, the bonds may be issued as fully registered non-certificated book-entry securities.
(G) The bonds shall be sold in a manner as the trustees shall determine, at public or private sale. If the trustees elect to sell the bonds at public sale, at least one advertisement of the sale shall be published in the manner prescribed by the State Treasurer not less than seven days prior to the time fixed for the opening of bids. The bonds may be sold at a discount or for a premium as may be determined by the trustees or their designee as being in the best interest of the university.
(H) Proceeds of the bonds shall be delivered to the State Treasurer or its corporate trust designee and retained in a special fund or funds and applied solely to the purposes for which the bonds are issued. Any withdrawal from the fund shall be made on the order or requisition of the university and shall be in the form the State Treasurer prescribes. The State Treasurer may make temporary investments of funds derived from the proceeds of bonds in the manner prescribed by law. Any interest earned in the fund or funds shall remain in the fund or funds.
(I) To the end that provision be made for the adequate payment of the principal and interest of the bonds, the trustees shall determine prior to the issuance of the bonds that applicable annual payments to be received by the university pursuant to the Lease and Occupancy Agreement shall be sufficient to enable the university to meet its annual debt service payments of the bonds, as well as any obligation to maintain the required balance in any reserve fund required to be established. The trustees shall cause to be established with the State Treasurer or its corporate trust designee on or before the occasion of the delivery of the bonds a fund into which shall be deposited annually sufficient funds to meet the payment of principal and interest of the bonds for the year.
(J) To the end that the payment of the principal and interest of the bonds shall be adequately secured, the trustees shall be empowered in their discretion to:
(1) pledge any portion of payments to be received by the university pursuant to the Lease and Occupancy Agreement as security for the payment of the bonds and maintenance of the facilities financed by the bonds; provided, however, that any surplus of the payments available upon final maturity for the benefit of the bonds may be used for any university purpose;
(2) covenant:
(a) to maintain facilities subject to the applicable portion of the Lease and Occupancy Agreement, and to insure the facilities against risks and hazards;
(b) to create and maintain an adequate reserve for contingencies and for repairs and replacement of the facilities;
(c) to pay the principal and interest of the bonds as they respectively become due;
(d) to create and maintain any reserve fund established in connection with the issuance of the bonds;
(e) against the disposal or further encumbrance of receipts and revenues pledged to the payment of the bonds, for the benefit of the holders of the bonds; and
(f) for the mandatory redemption of bonds on the terms and conditions as the resolution authorizing the bonds prescribes;
(3) provide for the terms, form, registration, exchange, execution, and authentication of bonds, and for the replacement of lost, destroyed or mutilated bonds;
(4) provide for early defeasance of the bonds through the establishment of a special escrow account maintained by a corporate trustee, which may be the State Treasurer;
(5) prescribe the procedure, if any, by which the terms of the contract with the bondholders may be amended, the number of bonds whose holders must consent to the amendment, and the manner in which consent shall be given;
(6) prescribe the events of default and the terms and conditions upon which all or any bonds shall become or may be declared due before maturity, as well as other remedies available to the bondholders or their fiduciary upon the occurrence of any event of default;
(7) establish on or before the occasion of the delivery of the bonds, or thereafter, any reserve fund and to cause the fund to be maintained by the State Treasurer or its designee, and to that end, the trustees shall be empowered to utilize any moneys available for the funding of any reserve fund. In the discretion of the trustees or their designee, in lieu of cash, any reserve fund may be funded with a surety bond, insurance policy, letter of credit, line of credit or similar guarantee, and the university may obligate itself for the reimbursement of any amounts drawn under the guarantee, with interest. At the discretion of the trustees or their designee, the university may purchase an insurance policy or provide any other acceptable surety for payment of both principal and interest on any bonds;
(8) appoint a corporate trustee and a paying agent for the bondholders, with the consent of the State Treasurer, either of whom may be the State Treasurer, and to prescribe the manner in which applicable payments received by the university under the Lease and Occupancy Agreement shall be utilized and disposed of. Any corporate trustee shall serve in a fiduciary capacity as trustee for the bondholders under the resolution of the trustees or applicable bond indenture pursuant to which the bonds shall be issued; and
(9) enter into an indenture of trust with a corporate trustee, which may be the State Treasurer, in order to provide for the issuance of the bonds and for any of the other related matters authorized by this joint resolution.
(K) The authorizations of the university and the trustees shall remain in full force and effect until the time as payment in full of the bonds shall have been made to the bondholders.
SECTION 2. This joint resolution takes effect upon approval by the Governor.
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