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A366, R256, H4520
Sponsors: Reps. Cooper, Harrell, Cobb-Hunter, Walker, Perry, Battle, Skelton, Thompson, Alexander, Ballentine, Edge, Harrison, Hayes, Limehouse, J.H. Neal, Ott, Owens, Williams, Spires, Whipper, R. Brown, Hosey, Mitchell and Hodges
Document Path: l:\council\bills\gjk\20484sd08.doc
Companion/Similar bill(s): 976, 1225
Introduced in the House on January 22, 2008
Introduced in the Senate on April 17, 2008
Last Amended on April 15, 2008
Passed by the General Assembly on May 1, 2008
Governor's Action: May 14, 2008, Vetoed
Legislative veto action(s): Veto overridden
Summary: Higher Education Revenue Bond Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 1/22/2008 House Introduced and read first time HJ-5 1/22/2008 House Referred to Committee on Ways and Means HJ-5 2/5/2008 House Committee report: Favorable Ways and Means HJ-9 2/6/2008 House Debate adjourned until Thursday, February 7, 2008 HJ-18 2/6/2008 Scrivener's error corrected 2/7/2008 House Member(s) request name added as sponsor: Spires 2/7/2008 House Debate adjourned until Tuesday, February 12, 2008 HJ-31 2/12/2008 House Debate adjourned until Tuesday, February 19, 2008 HJ-21 2/19/2008 House Debate adjourned until Tuesday, February 26, 2008 HJ-10 2/26/2008 House Debate adjourned until Tuesday, March 4, 2008 HJ-18 3/4/2008 House Debate adjourned until Tuesday, March 11, 2008 HJ-46 3/11/2008 House Debate adjourned until Tuesday, March 25, 2008 HJ-86 3/25/2008 House Debate adjourned until Wednesday, March 26, 2008 HJ-38 3/26/2008 House Debate adjourned until Thursday, March 27, 2008 HJ-27 3/27/2008 House Member(s) request name added as sponsor: Whipper, R.Brown 3/27/2008 House Debate adjourned until Tuesday, April 1, 2008 HJ-16 4/1/2008 House Debate adjourned until Wednesday, April 2, 2008 HJ-25 4/2/2008 House Member(s) request name added as sponsor: Hosey, Mitchell 4/2/2008 House Debate adjourned until Thursday, April 3, 2008 HJ-28 4/3/2008 House Member(s) request name added as sponsor: Hodges 4/3/2008 House Debate adjourned until Tuesday, April 8, 2008 HJ-25 4/8/2008 House Debate adjourned until Wednesday, April 9, 2008 HJ-14 4/9/2008 House Debate adjourned until Tuesday, April 15, 2008 HJ-23 4/15/2008 House Debate adjourned HJ-31 4/15/2008 House Amended HJ-56 4/15/2008 House Read second time HJ-62 4/16/2008 House Read third time and sent to Senate HJ-17 4/16/2008 Scrivener's error corrected 4/17/2008 Senate Introduced and read first time SJ-7 4/17/2008 Senate Referred to Committee on Finance SJ-7 4/23/2008 Senate Committee report: Favorable with amendment Finance SJ-26 4/24/2008 Senate Committee Amendment Adopted SJ-75 4/24/2008 Senate Read second time SJ-75 4/25/2008 Scrivener's error corrected 4/29/2008 Senate Read third time and returned to House with amendments SJ-50 5/1/2008 House Concurred in Senate amendment and enrolled HJ-138 5/8/2008 Ratified R 256 5/14/2008 Vetoed by Governor 5/21/2008 House Veto overridden by originating body Yeas-92 Nays-10 HJ-80 5/22/2008 Senate Veto overridden Yeas-45 Nays-0 6/2/2008 Copies available 6/2/2008 Effective date 05/22/08 8/6/2008 Act No. 366
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
(A366, R256, H4520)
AN ACT 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, PROCEDURES, AND PROVISIONS UNDER WHICH THE REVENUE BONDS MAY BE ISSUED AND CIRCUMSTANCES UNDER WHICH THE BONDS MAY BE REFINANCED.
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 interest 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:
Revenue bonds for new business school and renovation of existing school
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 act. A portion of the proceeds of the bonds issued also may 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 act 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 act, the trustees shall adopt a resolution providing for the issuance of the bonds, within the limitations of this act. 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 act 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 noncertificated 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;
(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 fiduciaries 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 monies 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 act.
(K) The trustees are authorized to cause the university to issue bonds to provide for refinancing of the original bonds in the event the federal government terminates the Lease and Occupancy Agreement prior to its original stated term. Refinancing bonds shall be secured by a pledge of and payable from any revenues available to and designated by the university except appropriations from the General Assembly and amounts which may not be pledged pursuant to the terms of any other outstanding bonds of the university. The faith and credit of the State shall not be pledged for the payment of the principal and interest of any refunding bonds. Issuance of refunding bonds shall be subject to the prior approval of the state board and upon review by the Joint Bond Review Committee. Any refunding bonds shall mature on a date no later than the final maturity date of the original bonds. Proceeds of the refunding bonds shall be used to pay the cost of retirement of the outstanding bonds and to fund reserves and pay costs of issuance and credit enhancement of the refunding bonds. Except as otherwise expressly provided in this subsection, the provisions of subsections (C) through (J) shall apply to refunding bonds as if all references to the original bonds were to the refunding bonds, and all references to the Lease and Occupancy Agreement and the federal government were to the applicable lease, contract, or other applicable revenue source securing the refunding bonds.
(L) The authorizations of the university and the trustees in this act shall remain in full force and effect until the time as payment in full of the bonds and refunding bonds shall have been made to the holders.
SECTION 2. This act takes effect upon approval by the Governor.
Ratified the 8th day of May, 2008.
Vetoed by the Governor -- 5/15/08.
Veto overridden by House -- 5/21/08.
Veto overridden by Senate -- 5/22/08.
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