A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 11-27-110, RELATING TO LEASE PURCHASE OR FINANCING AGREEMENTS SUBJECT TO CONSTITUTIONAL DEBT LIMITS, SO AS TO PROVIDE AN EXPANDED DEFINITION OF FINANCING AGREEMENTS; BY AMENDING SECTION 11-27-40, RELATING TO THE EFFECT OF THE NEW ARTICLE X ON BONDS OF POLITICAL SUBDIVISIONS, SO AS TO PROVIDE THAT ANY MEMBER OF A LOCAL GOVERNING BODY WHO KNOWINGLY VOTES IN FAVOR OF A PROPOSED ACTION THAT VIOLATES SECTION 14 OF THE NEW ARTICLE X OF THE CONSTITUTION IS GUILTY OF MISCONDUCT IN OFFICE; AND BY AMENDING SECTION 11-27-50, RELATING TO THE EFFECT OF THE NEW ARTICLE X ON BONDS OF SCHOOL DISTRICTS, SO AS TO PROVIDE THAT ANY MEMBER OF A GOVERNING BODY OF THE STATE'S SCHOOL DISTRICTS WHO VOTES IN FAVOR OF A PROPOSED ACTION THAT KNOWINGLY VIOLATES SECTION 15 OF THE NEW ARTICLE X OF THE CONSTITUTION IS GUILTY OF MISCONDUCT IN OFFICE.

 

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

 

SECTION 1.  Section 11-27-110(A)(6) of the S.C. Code is amended to read:

 

       (6) "financing agreement" means, with respect to any governmental entity, any contract entered into after December 31, 1995, under the terms of which a governmental entity acquires the use of an asset which provides:

           (a) for payments to be made in more than one fiscal year, whether by the stated term of the contract or under any renewal provisions, optional or otherwise;

           (b) that the payments thereunder are divided into principal and interest components or which contain any reference to any portion of any payment under the agreement being treated as interest;

           (c) for payments by the governmental entity which will be utilized, directly or through any intermediary, to service all or a portion of indebtedness of such governmental entity, intermediary or any other entity issued for the purpose of acquiring or improving the asset;

           (c) (d) that title to all or a portion of the asset will be in the name of or be transferred to the governmental entity if all or a portion of the payments scheduled or provided for in the financing agreement are made;  and

           (d) (e) for any contract entered into after December 31, 2006, pursuant to which installment payments of the purchase price are to be paid by a school district or other political subdivision to a nonprofit corporation, political subdivision, or any other entity. in order to finance the acquisition, construction, renovation, or repair of school buildings or other school facilities.  This item shall apply to any contracts entered into after August 31, 2006, pursuant to which installment payments of the purchase price are to be paid by a school district or other political subdivision to a non-profit corporation, political subdivision, or any other entity, from any source other than the issuance of general obligation indebtedness. by the school district, in order to finance the acquisition, construction, renovation, or repair of school buildings or other school facilities.

       However, the term excludes any refinancing agreement and contracts entered into in connection with issues of general obligation bonds or revenue bonds issued pursuant to authorization provided in Article X of the Constitution;

 

SECTION 2.  Section 11-27-40 of the S.C. Code is amended to read:

 

    Section 11-27-40.  The governing body of each of the political subdivisions of the State shall be empowered to incur general obligation debt for their respective political subdivisions as permitted by Section 14, New Article X and in accordance with its provisions and limitations. Any member of a local governing body who knows or should have known that a proposed action violates Section 14 of New Article X of the Constitution or the provisions of this Section and votes in favor of such an action is guilty of misconduct in office. All laws shall continue in force and effect after the ratification date, but each of such laws is amended as follows:

    1. If no election be prescribed in such law and an election is required by New Article X, then in every such instance, a majority vote of the qualified electors of the political subdivision voting in the referendum herein authorized is declared a condition precedent to the issuance of bonds pursuant to such law. The governing body of each of the political subdivisions shall be empowered to order any such referendum as is required by New Article X or any other provision of the Constitution, to prescribe the notice thereof and to conduct or cause such referendum to be conducted in the manner prescribed by Title 7, Code of Laws of South Carolina, 1976.

    2. If an election be prescribed by the provisions of such law, but is not required by the provisions of New Article X, then in every such instance, no election need be held (notwithstanding the requirement therefor in such law) and the remaining provisions of such law shall constitute a full and complete authorization to issue bond in accordance with such remaining provisions.

    3. If a statutory debt limitation be prescribed by any such law, then in lieu thereof, the debt limitation shall be that resulting from the provisions of Section 14, New Article X.

    4. Notwithstanding any contrary provision in any law, any issue of general obligation bonds maturing not later than ten years from their date of issuance and in the amount of not exceeding one million five hundred thousand dollars may be sold at private sale and without advertisement, if not less than seven days prior to their delivery, notice of intention to sell such bonds at private sale shall be given by publication in a newspaper of general circulation in such political subdivision. Such notice shall set forth the purchaser, the purchase price, interest rates, and maturity schedule of such bonds.

    5. As permitted by paragraph 8, Section 14 of New Article X, all political subdivisions are authorized and empowered to incur general obligation debt in anticipation of the collection of ad valorem taxes or licenses (tax anticipation notes). Tax anticipation notes shall be expressed to mature not later than ninety days from the date on which such taxes or license fees may be paid without penalty. In the case of counties and incorporated municipalities, tax anticipation notes shall be issued pursuant to an ordinance adopted in the manner provided by law. In the case of any special purpose district, tax anticipation notes may be authorized by a resolution of its governing body but such action shall be authorized, approved, or ratified by an ordinance of the governing body or governing bodies (as the case may be) of the county or counties wherein such special purpose district is situate. The provisions of this item shall take effect upon May 30, 1977.

    6. The provisions of Chapter 17, Title 11, relating to the issuance of bond anticipation notes, shall continue in force and effect after the ratification with respect to all political subdivisions and the governing body of each political subdivision is hereby authorized and empowered to issue bond anticipation notes pursuant to and in accordance with the provisions of that chapter and the limitations imposed by paragraph 9, Section 14 of New Article X.

    7. All laws now in force permitting any political subdivisions to incur indebtedness (and to issue bonds or other evidences of debt) which shall be payable solely from a revenue-producing project or from a special source, which source does not involve revenues from any tax or license, shall continue in force and effect after the ratification date. Evidences of such indebtedness shall contain a statement on the face thereof specifying the sources from which payment is to be made and shall state that the full faith, credit, and taxing powers of the issuer are not pledged therefor.

    Any law containing any provisions inconsistent herewith (including Chapter 19, Title 11, as amended) is herewith amended by the removal therefrom of such inconsistent provisions.

    8. The initiative and referendum provisions contained in Article 13, Chapter 9, Title 4 and Chapter 17, Title 5 of the 1976 Code shall not be applicable to any other ordinance authorizing the issuance of general obligation bonds unless a notice, signed by not less than five qualified electors, of the intention to seek a referendum, be filed both in the office of the clerk of court of the county wherein such political subdivision is situate and with the clerk or other recording officer of the political subdivision. Such notices of intention to seek a referendum shall be so filed within twenty days following the publication by the governing body of the political subdivision of notice in a newspaper of general circulation in such political subdivision of the adoption of such ordinance.

    9. Notwithstanding any other provision of law, a political subdivision may issue general obligation bonds in accordance with one or more of the following provisions:

       (a) The principal amount of the bonds maturing in a given year shall be in an amount as prescribed by the governing body of the political subdivision. The first maturing bonds of an issue shall mature within five years from the date on which they are issued;  and no bond shall mature later than thirty years from the date on which it is issued.

       (b) The bonds shall be sold at public sale, after advertisement of the sale in a newspaper having general circulation in the State or in a financial publication published in the City of New York. The advertisement must appear not less than seven days prior to the date set for the sale. The advertisement may set as a sale date a fixed date not less than seven days following publication, or the advertisement may advise that the sale date will be at least seven days following the date of publication. If a fixed date of sale is not set forth in the notice of sale published in accordance with this subitem, the date selected for the receipt of bids must be disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids. If a fixed date of sale is set forth in the notice of sale, it may be modified by notice disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids on the modified date of sale. No bonds may be sold pursuant to this subitem on a date that is more than sixty days after the date of the most recent publication of the notice of sale. Bids for the purchase of bonds may be received in such form as determined by the governing body of the issuer.

       (c) The bonds may be disposed of at private sale if there are no bids received or if all bids are rejected. The provisions of this section shall not prevent a sale at private sale to the United States of America or any agency thereof.

       (d) Bonds issued pursuant to this section may be issued with a provision for their redemption prior to their maturity at par and accrued interest, plus such redemption premium as may be prescribed by the governing body of the issuer, but no bond shall be redeemable before maturity unless it contains a statement to that effect. In the proceedings authorizing the issuance of the bonds, provisions shall be made specifying the manner of call and the notice that must be given.

 

SECTION 3.  Section 11-27-50 of the S.C. Code is amended to read:

 

    Section 11-27-50.  The board of trustees or other governing body (the governing body) of each of the school districts of the State shall be empowered to incur general obligation debt for their respective school districts as permitted by Section 15 of New Article X and in accordance with its provisions and limitations. Any member of the board of trustees or of any other governing body of the school districts of the State who knows or should have known that a proposed action violates Section 15 of New Article X of the Constitution or the provisions of this Section and votes in favor of such an action is guilty of misconduct in office.  All laws relating to such matters shall continue in force and effect after the ratification date, but all such laws are amended as follows:

    1. If no election be prescribed in such law and an election is required by New Article X, then in every such instance, a majority vote of the qualified electors of the school district voting in the referendum herein authorized is declared a condition precedent to the issuance of bonds pursuant to such law. The governing body of each of the school districts shall be empowered to order any such referendum as is required by New Article X or any other provisions of the Constitution, to prescribe the notice thereof and to conduct or cause to be conducted such referendum in the manner prescribed by Article 1, Chapter 71, Title 59, Code of Laws of South Carolina, 1976.

    2. If an election be prescribed by the provisions of such law, but is not required by the provisions of New Article X, then in every such instance, no election need be held and the remaining provisions of such law shall constitute a full and complete authorization to issue bonds in accordance with such remaining provisions.

    3. If a statutory debt limitation be prescribed by any such law, then in lieu thereof, the debt limitation shall be that resulting from the provisions of Section 15 of New Article X.

    4. As permitted by paragraph 7, Section 15 of New Article X, all school districts are authorized and empowered to incur general obligation debt in anticipation of the collection of ad valorem taxes (tax anticipation notes). Tax anticipation notes shall be expressed to mature not later than ninety days from the date as of which such taxes may be paid without penalty. Tax anticipation notes shall be issued pursuant to a resolution adopted by the governing body.

    5. The provisions of Chapter 17, Title 11, relating to the issuance of bond anticipation notes, shall continue in force and effect after the ratification date with respect to all school districts, and the governing body of each school district is hereby authorized and empowered to issue bond anticipation notes pursuant to and in accordance with the provisions of Chapter 17, Title 11 and the limitations imposed by paragraph 8, Section 15 of New Article X.

    6. Notwithstanding provision of law to the contrary, an issue of general obligation bonds maturing not later than ten years from their date of issuance and in the amount of not exceeding one million five hundred thousand dollars may be sold at private sale and without advertisement, if not less than seven days prior to their delivery, notice of intention to sell such bonds at private sale is given by publication in a newspaper of general circulation in the school district. Such notice shall set forth the purchaser, the purchase price, interest rates, and maturity schedule of such bonds.

    7. Notwithstanding any other provision of law, a school district may issue general obligation bonds in accordance with one or more of the following provisions:

       (a) The principal amount of the bonds maturing in a given year shall be in an amount as prescribed by the governing body. The first maturing bonds of an issue shall mature within five years from the date on which they are issued;  and no bond shall mature later than thirty years from the date on which it is issued.

       (b) The bonds shall be sold at public sale, after advertisement of the sale in a newspaper having general circulation in the State or in a financial publication published in the City of New York or, in the discretion of the authorities, in both publications. The advertisement must appear not less than seven days prior to the date set as a sale date for the sale. The advertisement may set a fixed date not less than seven days following publication, or the advertisement may advise that the sale date will be at least seven days following the date of publication. If a fixed date of sale is not set forth in the notice of sale published in accordance with this subitem, the date selected for the receipt of bids must be disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids. If a fixed date of sale is set forth in this notice of sale, it may be modified by notice disseminated via an electronic information service at least forty-eight hours prior to the time set for the receipt of bids on the modified date of sale. No bonds may be sold pursuant to this section on a date that is more than sixty days after the date of the most recent publication of the notice of sale. Bids for the purchase of bonds may be received in such form as determined by the governing body of the issuer.

       (c) The bonds may be disposed of at private sale if there are no bids received or if all bids are rejected. The provisions of this section shall not prevent a sale at private sale to the United States of America or any agency thereof.

       (d) Any bonds issued pursuant to this section may be issued with a provision for their redemption prior to their maturity at par and accrued interest, plus such redemption premium as may be prescribed by the governing body of the issuer, but no bond shall be redeemable before maturity unless it contains a statement to that effect. In the proceedings authorizing the issuance of the bonds, provisions shall be made specifying the manner of call and the notice that must be given.

    8. Notwithstanding any other provision of law, bonds issued as Qualified School Construction Bonds in amounts not exceeding one and a half million dollars pursuant to the provisions of 26 U.S.C. Section 54F may be sold at public or private sale at the price determined by the governing body of the issuer.

 

SECTION 4.  This act takes effect upon approval by the Governor.

----XX----