South Carolina General Assembly
117th Session, 2007-2008

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H. 5008

STATUS INFORMATION

General Bill
Sponsors: Reps. Crawford, Lowe, Branham, Williams and Alexander
Document Path: l:\council\bills\dt\27156bb08.doc
Companion/Similar bill(s): 1224

Introduced in the House on April 10, 2008
Currently residing in the House Committee on Ways and Means

Summary: Francis Marion University

HISTORY OF LEGISLATIVE ACTIONS 

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
   4/10/2008  House   Introduced, read first time, placed on calendar without 
                        reference HJ-18
   4/11/2008          Scrivener's error corrected
   4/15/2008  House   Committed to Committee on Ways and Means HJ-50

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

4/10/2008
4/10/2008-A
4/11/2008

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

INTRODUCED

April 10, 2008

H. 5008

Introduced by Reps. Crawford, Lowe, Branham, Williams and Alexander

S. Printed 4/10/08--H.    [SEC 4/11/08 3:47 PM]

Read the first time April 10, 2008.

            

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 3 TO CHAPTER 133, TITLE 59 SO AS TO ALLOW THE FRANCIS MARION BOARD OF TRUSTEES TO ISSUE REVENUE BONDS FOR THE CONSTRUCTION OF ATHLETIC FACILITIES BY RESOLUTION, TO PROVIDE THE MANNER AND TERMS BY WHICH THE BONDS ARE ISSUED, AND TO DEFINE CERTAIN TERMS; AND TO DESIGNATE SECTIONS 59-133-10 THROUGH 59-133-60 AS ARTICLE 1, CHAPTER 133 OF TITLE 59.

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

SECTION    1.    Sections 59-133-10 through 59-133-60 are designated as Article 1, Chapter 133 of Title 59.

SECTION    2.    Chapter 133, Title 59 of the 1976 Code is amended by adding:

"Article 3

Athletic Facilities Revenue Bonds

Section 59-133-210.    (A)    The General Assembly finds it desirable to provide continuing and general statutory authority for Francis Marion University to incur debt for the purpose of, among other things, acquiring, constructing, renovating, and equipping certain athletic facilities, which debt is secured by a pledge of the revenues derived from the operation of the athletic department of Francis Marion University and by the proceeds of certain related admissions fees and special fees charged to students enrolled at the university. Francis Marion University has demonstrated need for additional funds to provide for acquisition, construction, renovation, and equipping of these facilities. The facilities are needed to replace or renovate aging facilities and to provide additional facilities so that the educational environment at Francis Marion University will be enhanced for the benefit of present and future students.

(B)    Consideration has been given to this need and to the methods of funding the need. The General Assembly has determined that it is in the best interest of the people of this State to authorize Francis Marion University to acquire, construct, renovate, and equip additional facilities and to incur indebtedness for these purposes, which is payable from the revenues derived from the operation of these facilities and from related fees, to the extent and under the conditions provided in this article.

Section 59-133-220.    As used in this article:

(1)    'Admissions fees' mean the specially designated admissions fees or charges which may be imposed by the trustees upon a person admitted to an event held at an athletic facility in addition to other charges.

(2)    'Athletic department' means the athletic department of Francis Marion University.

(3)    'Athletic facilities' mean facilities designated by the trustees as intercollegiate athletic facilities now owned or which may be acquired by Francis Marion University.

(4)    'Bond' or 'bonds' mean a note, bond, installment contract, or other evidence of indebtedness issued pursuant to this article.

(5)    'Bond reserve fund' means the special fund which may be established by the trustees pursuant to this article, which must be in the custody of the State Treasurer or its corporate trust designee, and which is primarily established for the purpose of providing a reserve with which to meet the payment of the principal and interest on bonds in the event that payments otherwise required from the debt service fund are insufficient to meet the payments when they become due and payable.

(6)    'Debt service fund' means the fund established by this article for the payment of principal and interest on bonds, which must be in the custody of the State Treasurer or its corporate trust designee.

(7)    'Net revenues' mean revenues remaining after payment of the operating and maintenance expenses of the athletic department before provision is made for depreciation, amortization, nonmandatory transfers, and interest expenses of the athletic department for a given fiscal year.

(8)    'Revenues' mean revenues or other income, including investment income, received by the athletic department from the operation of the athletic department and the athletic facilities, and gifts, bequests, contributions, and donations received by the trustees or Francis Marion from any persons, including from an athletic booster organization, for use in connection with the operations of the athletic department, plus other unrestricted revenues of the athletic department not otherwise pledged that may be made applicable by the trustees to the payment of the principal and interest of the bonds, including revenues which may fall into the category of nonmandatory transfers as the term is used in generally accepted accounting principles, but excluding:

(i)        gifts, bequests, contributions, and donations restricted to a particular purpose inconsistent with their use for the payment of the principal, premium, or interest on obligations of the trustees or Francis Marion;

(ii)    the proceeds of borrowings;

(iii)    state appropriations; and

(iv)    revenues, income, receipts, and money received by the trustees or Francis Marion University for purposes other than those related to the athletic department.

(9)    'Special student fees' mean the fees authorized by this article to be established by the trustees and which may be imposed upon persons in attendance at an academic session of Francis Marion University in order to provide funds to assist in the repayment of bonds.

(10)    'Trustees' mean the Board of Trustees of Francis Marion University or a successor body.

(11)    'Francis Marion' means Francis Marion University.

Section 59-133-230.    The trustees are authorized to acquire, construct, and equip additional athletic facilities and to improve, renovate, and equip existing athletic facilities to the extent they shall determine to be necessary, and proceeds of bonds authorized by this article are made available for that purpose. The trustees also are authorized to refund bonds that may be outstanding pursuant to this article by exchange or other means. A portion of the proceeds of bonds issued for these purposes also may be used to fund, establish, or replenish a bond reserve fund, to pay interest on the bonds as provided in Section 59-133-340(1), or to pay costs of issuance of the bonds or of credit enhancement for the bonds as may be deemed necessary by the trustees.

Section 59-133-240.    Upon receiving the approval of the State Budget and Control Board and upon review by the Joint Bond Review Committee, the trustees may borrow sums of money as necessary to accomplish the purpose of this article and evidence the borrowings by bonds issued pursuant to this article in an aggregate principal amount as they determine. There must not be bonds issued pursuant to this article in excess of fifteen million dollars outstanding at a given time, notwithstanding other provisions of this article.

Section 59-133-250.    Bonds issued pursuant to this article are payable from the revenues or the net revenues as designated by the trustees, as well as from proceeds of the admissions fees and the special student fees. Bonds issued pursuant to this article may be further secured by additional pledges of other revenues or fees of Francis Marion. The trustees may abandon the use of a portion of the athletic facilities or sell or dispose of a portion of the athletic facilities upon the receipt of a written recommendation by the chief financial officer of Francis Marion that this action does not adversely affect the ability of Francis Marion to discharge its obligations to the holders of bonds issued pursuant to this article and upon further conditions as prescribed in the resolution of the trustees providing for the issuance of bonds.

Section 59-133-260.    The faith and credit of the State may not be pledged for the payment of the principal and interest of these bonds, and there must be on the face of each bond a statement plainly worded to that effect. Neither the trustees nor another person signing the bonds is personally liable on the bonds.

Section 59-133-270.    The trustees shall adopt resolutions providing for the issuance of bonds of Francis Marion, within the limitations mentioned in this article, which shall prescribe the tenor, terms, and conditions of the bonds. Bonds must be issued as serial or term bonds, maturing in equal or unequal amounts, at times and on occasions as the trustees determine. The last maturing bonds of an issue must be expressed to mature not later than thirty years from their date, and the first maturing bonds of an issue, issued pursuant to this article, must fall due within three years from their date. The bonds must bear rates of interest, payable on occasion, as the trustees prescribe, and the bonds must be in denominations, payable in the medium of payment, and at the place as such resolutions prescribe. Bonds may be issued with a provision permitting their redemption on an interest payment date prior to their respective maturities. Bonds made subject to redemption prior to their stated maturities may contain a provision requiring the payment of a premium for the privilege of exercising the right of redemption, in the amount or amounts as the trustees prescribe in the resolutions authorizing their issuance. Bonds that are subject to redemption must contain a statement to that effect on the face of each bond. The resolutions authorizing their issuance must contain provisions specifying the manner of call for redemption and the notice of the call that must be given.

Section 59-133-280.    The bonds authorized by this article and interest to become due on them have tax exempt status pursuant to Section 12-2-50.

Section 59-133-290.    Executors, administrators, guardians, fiduciaries, sinking fund commissions, the State Budget and Control Board, as trustee of the South Carolina Retirement System, and other governmental entities within the State may invest in these bonds.

Section 59-133-300.    The bonds and the coupons attached to the bonds, must be executed manually or by facsimile in the name of Francis Marion in the manner and by the persons as the trustees shall determine, and the seal of Francis Marion University must be affixed to, impressed, or reproduced on each bond. Coupons attached to the bonds must be authenticated by the facsimile signature of one or more of the persons signing the bonds. Bonds may, in the discretion of the trustees, be registerable as to principal and interest on books kept by or on behalf of Francis Marion, including books kept by a corporate registrar. The delivery of the bonds are valid notwithstanding changes in officers or in the seal occurring after the execution. Notwithstanding the remainder of this section, the bonds may, in the discretion of the trustees, be issued as fully registered, noncertificated, book-entry securities.

Section 59-133-310.    The bonds may be disposed of in a manner as the trustees determine, except that no privately negotiated sale without public advertisement may be made without the prior approval of the State Budget and Control Board. 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 Francis Marion.

Section 59-133-320.    The proceeds of the bonds must 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 such bonds have been issued. Withdrawals from the fund must be made on the order or requisition of the university and must be in such form as 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.

Section 59-133-330.    (A)    The trustees shall maintain in full force and effect necessary admissions fees or special student fees on a basis and in such amounts as will be sufficient, after taking into account net revenues and funds pledged to the payment of the bonds as provided pursuant to Section 59-133-340(4), to provide for the payment of the principal and interest on the bonds as they mature and to provide the required reserve in a bond reserve fund. It is the duty of Francis Marion to calculate the debt service requirements of the bonds not less frequently than annually and make appropriate revisions of admissions fees or special student fees if such revisions are required, after taking into account net revenues for the year, to make adequate provisions for the payment of the principal and interest on the bonds and the maintenance of a required reserve in a bond reserve fund.

(B)    The admissions fees and the special student fees must bear nomenclature as the trustees prescribe. The special student fees may, in the discretion of the trustees, be included as a part of other fees. The trustees shall account for the receipt of admissions fees and the special student fees to the State Treasurer, for deposit by the State Treasurer in the debt service fund.

(C)    The trustees shall establish with the State Treasurer or its corporate trust designee a debt service fund into which sufficient funds must be deposited annually as provided in this article to meet the payment of principal and interest on the bonds for the year on or before the occasion of the delivery of bonds pursuant to this article.

Section 59-133-340.    The trustees are empowered in their discretion to:

(1)    issue bonds in an amount, within the limitations provided in this article, as they consider necessary. Trustees may use a portion of the principal proceeds derived from the sale of bonds, except bonds issued to effect refunding of outstanding bonds, to meet the payment of interest on the bonds for a time period equal to the period of construction or renovation of the athletic facilities to be financed with the proceeds of such bonds, plus a period not exceeding six months;

(2)    impose admissions fees and special student fees upon the basis and in amounts as the trustees determine;

(3)    pledge the revenues or the net revenues as designated by the trustees, and the proceeds of admissions fees and special student fees, as security for the payment of present or future bonds. However, a surplus of these revenues or net revenues available after the payment of costs of operation and maintenance of the athletic department and of athletic facilities and of debt service on these bonds, and the establishment of a debt service reserve obligation in a bond reserve fund under the proceedings providing for the issuance of these bonds, may be placed in a contingency and improvement fund for athletic facilities in order to restore depreciated or obsolete athletic facilities, to make improvements to such athletic facilities, to defray the cost of unforeseen contingencies with regard to athletic facilities, to prevent defaults under bonds or to redeem the bonds, or may be reflected in the opening balance of the operating fund of the department for the next succeeding fiscal year and used for a purpose approved by the trustees;

(4)    further secure the bonds with a pledge of additional revenues or fees of Francis Marion as may be authorized under other laws of the State;

(5)    specify and limit athletic facilities which may be used free of charge;

(6)    establish and maintain a system of rules that will ensure the continuous and effective use of the athletic facilities;

(7)    maintain an adequate schedule of rates and charges for attendance at events held at athletic facilities, and ensure that net athletic revenues plus proceeds of the admissions fees and the special student fees are sufficient to:

(i)        pay the cost of operating and maintaining the athletic department and the athletic facilities, including the cost of fire, extended coverage and use, and occupancy insurance;

(ii)    pay the principal and interest of the bonds as they respectively become due;

(iii)    provide necessary debt service coverage ratios;

(iv)    create and maintain a bond reserve fund established to meet the payment of principal and interest of the bonds; and

(v)    create and at all times maintain an adequate reserve for contingencies and for major repairs and replacement of athletic facilities;

(8)    prevent the mortgaging or disposing of the athletic facilities and liens being imposed upon them, equal or superior to a lien created on the facilities for the benefit of the holders of the bonds. However, the trustees reserve the right, under terms as they prescribe, to issue additional bonds on a parity with, or subordinate to, the bonds authorized by this article;

(9)    determine how the proceeds derived from the sale of bonds issued pursuant to this article are to be used;

(10)    provide for the terms, form, registration, exchange, execution, and authentication of bonds, and for the replacement of lost, destroyed, or mutilated bonds;

(11)    oversee the operation of the athletic department and the athletic facilities;

(12)    require revenues or net revenues pledged for the payment of the bonds to be duly segregated into special funds and that these funds must be used solely for the purposes for which they are intended and for no other purpose;

(13)    require the mandatory redemption of bonds on the terms and conditions as the resolutions authorizing the bonds prescribe;

(14)    provide for early defeasance of bonds through the establishment of special escrow accounts maintained by a corporate trustee, which may be the State Treasurer, of cash, United States government obligations, or obligations of agencies, which escrows may be funded with proceeds of bonds, revenues, net revenues, or other funds available to Francis Marion;

(15)    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 is given;

(16)    oversee the maintenance of the athletic facilities, the insurance to be carried on them, and the use and disposition of proceeds from an insurance policy;

(17)    prescribe the events of default and the terms and conditions upon which bonds become or may be declared due before maturity, and the terms and conditions upon which this declaration and its consequences may be waived;

(18)    impose a statutory lien upon athletic facilities as security for the payment of the bonds. The lien must extend to the athletic facilities and, to their appurtenances and extensions, additions, improvements, and enlargements to the extent specified in the resolutions and shall inure to the benefit of the holders of the bonds secured by the lien. These athletic facilities remain subject to the statutory lien until the payment in full of the principal and interest of the bonds. A holder of a bond, or coupons representing interest on the bond, may, either at law or in equity, by suit, action, mandamus, or other proceeding, protect and enforce the statutory lien, and may, by suit, action, mandamus, or other proceedings enforce and compel performance of duties of the trustees, including the fixing of sufficient rates, the proper segregation of the revenues, and the proper application of the revenues. However, the statutory lien must not be construed to give a bond or coupon holder authority to compel the sale of all or part of an athletic facility;

(19)    allow the appointment of a receiver to administer and operate the athletic department, with power to fix rates and charges for athletic facilities and other activities of the athletic department, and to apply the income and revenues of the athletic department to the payment of the bonds and their interest if there is a default in the payment of the principal or interest on the bonds by a court having jurisdiction in the proper action;

(20)    establish on or before the occasion of the delivery of bonds issued pursuant to this article a bond reserve fund and to cause the same to be maintained by the State Treasurer or its corporate trustee designee. The trustees are empowered to utilize funds available for the funding of a reserve fund, including revenues or net revenues previously accumulated prior to the issuance of bonds or available proceeds of the admissions fees or the special student fees. In the discretion of the trustees, in lieu of cash, a bond reserve fund may be funded with a surety bond, insurance policy, letter of credit, line of credit, or similar guarantee. At the discretion of the trustees, Francis Marion may purchase an insurance policy ensuring payment of both principal and interest on issuance of bonds;

(21)    with the consent of the State Treasurer, appoint a corporate trustee and a paying agent for the bondholders, either of whom may be the State Treasurer, and prescribe the manner in which revenues or net revenues, as well as proceeds of admissions fees and special student fees are utilized and disposed. A corporate trustee serves in a fiduciary capacity as trustee for the bondholders under the resolutions of the trustees authorizing the issuance of bonds.

Section 59-133-350.    The authorizations granted by this article must remain of full force and effect until they are rescinded by subsequent enactment, and no time limit is set for the issuance of bonds pursuant to this article."

SECTION    3.    This act takes effect upon approval by the Governor.

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