Reps. LUCAS, G.M. SMITH, SIMRILL, RUTHERFORD, FINLAY and DAVIS propose the following Amendment No. to H. 3194 (COUNCIL\ZW\3194C003.CC.ZW21):
Reference is to Printer's Date 4/22/21-S.
Amend the bill, as and if amended, by adding Part 2 immediately preceding Part 3 to read:
/ Part 2
SECTION1. Section 58-31-20 of the 1976 Code is amended to read:
"Section 58-31-20.( A)(1)The Public Service Authority consists of a board of twelve directors who reside in South Carolina and who have the qualifications stated in this section, as determined by the State Regulation of Public Utilities Review Committee pursuant to Section 58-3-530(14), before being appointed by the Governor with the advice and consent of the Senate as follows: one from each congressional district of the State; one from each of the counties of Horry, Berkeley, and Georgetown who reside in authority territory and are customers of the authority; and two from the State at large, one of whom must be chairman. Two of the directors must have substantial work experience within the operations of electric cooperatives or substantial experience on an electric cooperative board, including one of the two who must have substantial experience within the operations or board of a transmission or generation cooperative. Except to the extent they are serving in an ex-officio capacity, a A director shall not serve as an employee or board member of an electric cooperative during his term as a director. Each director shall serve for a term of seven four years, except as provided in this section. At the expiration of the term of each director and of each succeeding director, the Governor, with the advice and consent of the Senate, must appoint a successor, who shall hold office for a term of seven four years or until his successor has been appointed and qualified. In the event of a director vacancy due to death, resignation, or otherwise, the Governor must appoint the director's successor, with the advice and consent of the Senate, and the successor-director shall hold office for the unexpired term. A director shall not be appointed for more than three consecutive full terms. An appointment to an unexpired partial term shall not be considered for purposes of determining term limits.
(2)A director may not receive a salary for services as director until the authority is in funds, but each director must be paid his actual expense in the performance of his duties, the actual expense to be advanced from the contingent fund of the Governor until the time the Public Service Authority is in funds, at which time the contingent fund must be reimbursed. After the Public Service Authority is in funds, the compensation and expenses of each member of the board must be paid from these funds, and the compensation and expenses must be fixed by the advisory board established in this section. The authority may provide, at its expense, health insurance benefits to members of the board through the state insurance plan or otherwise.
(3)Members of the board of directors may be removed for cause, pursuant to Section 1-3-240(C), by the Governor of the State, the advisory board, or a majority thereof. A member of the General Assembly of the State of South Carolina is not eligible for appointment as Director of the Public Service Authority during the term of his office. No more than two members from the same county may serve as directors at any time.
(B) Candidates for appointment to the board must be screened by the State Regulation of Public Utilities Review Committee and, prior to confirmation by the Senate, must be found qualified by meeting the minimum requirements contained in subsection (C). The review committee must submit a written report to the Clerk of the Senate setting forth its findings as to the qualifications of each candidate. A candidate must not serve on the board, even in an interim capacity, until he is screened and found qualified by the State Regulation of Public Utilities Review Committee.
(C) (1)Each member must possess abilities and experience that are generally found among directors of energy utilities serving this State and that allow him to make valuable contributions to the conduct of the authority 's business. These abilities include substantial business skills and experience, but are not limited to:
(1)(a)general knowledge of the history, purpose, and operations of the Public Service Authority and the responsibilities of being a director of the authority;
(2)(b)the ability to interpret legal and financial documents and information so as to further the activities and affairs of the Public Service Authority;
(3)(c)with the assistance of counsel, the ability to understand and apply federal and state laws, rules, and regulations including, but not limited to, Chapter 4 of Title 30 as they relate to the activities and affairs of the Public Service Authority; and
(4)(d)with the assistance of counsel, the ability to understand and apply judicial decisions as they relate to the activities and affairs of the Public Service Authority.
(2) Each member must also have:
(a) a baccalaureate or more advanced degree from:
(i) a recognized institution of higher learning requiring face-to-face contact between its students and instructors prior to completion of the academic program;
(ii) an institution of higher learning that has been accredited by a regional or national accrediting body; or
(iii) an institution of higher learning chartered before 1962; and
(b) a background of substantial duration and an expertise in at least one of the following:
(i) energy issues;
(ii) consumer protection and advocacy issues;
(iii) water and wastewater issues;
(iv) finance, economics, and statistics;
(v) accounting;
(vi) engineering; or
(vii) law.
(D) For the assistance of the board of directors of the Public Service Authority, there is hereby established an advisory board to be known as the advisory board of the South Carolina Public Service Authority, to be composed of the Governor of the State, the Attorney General, the State Treasurer, the Comptroller General, and the Secretary of State, as ex officio members, who must serve without compensation other than necessary traveling expenses. The advisory board must perform any duties imposed on it pursuant to this chapter, and must consult and advise with the board of directors on any and all matters which by the board of directors may be referred to the advisory board. The board of directors must make annual reports to the advisory board, which reports must be submitted to the General Assembly by the Governor, in which full information as to all of the acts of said board of directors shall be given, together with financial statement and full information as to the work of the authority. On July first of each year, the advisory board must designate a certified public accountant or accountants, resident in the State, for the purpose of making a complete audit of the affairs of the authority, which must be filed with the annual report of the board of directors. The Public Service Authority must submit the audit to the General Assembly.
(E)(1) The following shall be nonvoting ex officio members of the board of directors entitled to attend all meetings of the authority board, including any executive sessions, except as set forth below:
(a) The Chairman of Central Electric Power Cooperative, or his designee, and one member of the Board of Central Electric Power Cooperative chosen by that board who is not the chairman or his designee.
(b) An individual who must represent an industrial class customer of the authority. This member must be recommended by the South Carolina Manufactures Alliance and appointed by the Governor.
(c) The ex officio members shall have the same obligations and duties as other members of the board, except the obligation to vote, and are subject to removal in the same manner as other board members. An ex officio member that has otherwise satisfied all obligations and duties owed to the Public Services Authority shall not be liable for matters directly related to either the process of voting nor a decision determined by a vote of the board of directors.
(2) The ex officio members may be excluded from executive session where the following matters are being discussed:
(a) negotiations incident to proposed contractual arrangements with a customer, including Central Electric Cooperative, Inc., or receiving legal advice involving a customer, Central Electric Power Cooperative Inc., or one of its members; or
(b) discussions regarding generation resources that will not be shared resources under any wholesale power supply agreement between the authority and Central Electric Power Cooperative or receiving legal advice in relation thereto.
(c) litigation involving or in which Central Electric Cooperative or any electrical cooperative is a party.
A conflict pursuant to this subsection may be raised by any member of the Board, the ex officio member or counsel for the Board and then determined by a majority vote of the Board.
(3) When ex officio members are excluded from executive session, the reason for the conflict must be stated before the vote is taken and shall be recorded in official minutes or other records of the meeting. The ex officio member of the board must be given an opportunity to speak to the conflict and the underlying issue at the beginning of the executive session. After being provided the opportunity to speak as provided in this provision, the ex officio member must leave the room and may not participate in the remainder of the executive session that is related to the specific matter that gives rise to the conflict. Efforts should be taken to maximize participation of ex officio members by segmenting executive sessions.
(4) Ex officio members will begin serving immediately upon a letter indicating their appointments is delivered to the board and to the Public Utilities Review Committee but must meet the qualifications set forth in Section 58-31-20(C) as verified by the Public Utilities Review Committee within six months of beginning service as an ex officio member. Ex officio members will be appointed for four-year terms but may be removed either by the Governor pursuant to Section 1-3-240(C)(1)(m) or the Board of Central Electric Power Cooperative. In the event that the Board of Central Electric Power Cooperative removes the ex officio member, the Public Service Authority Board of Directors must receive notice at least sixty days before the ex officio member's successor begins service on the Public Service Authority Board of Directors. An ex officio member will not be entitled to receive compensation from the Public Service Authority for his or her service as an ex officio member and will not be counted for purposes of determining a quorum.
(F) In making appointments to the board of directors, the Governor, in making appointments and the Senate, in its advice and consent capacity, must give due consideration to race, gender, and other demographic factors to assure nondiscrimination, inclusion, and representation to the greatest extent possible of all segments of the population of this State."
SECTION2. Secti on 58-31-30(A)(11) and (12) of the 1976 Code is amended to read:
"(11) to make bylaws for the management and regulation of its affairs , including the establishment of subcommittees of the board of directors to include Finance and Audit, Public Information, Water Services and Resource Management, Generation and Power Supply Planning, and Executive and Governance, each of these making regular reports to the full board of directors at each regular meeting of the full board;
(12) to appoint officers, agents, employees, and servants, to prescribe their duties, and to fix their compensation to select a chief executive officer for the authority who shall cause the authority to employ all necessary employees with the board, by vote, approving the compensation of any senior management official selected by the chief executive officer;"
SECTION3. Section 58-31-30 of the 1976 Code is amended by adding a subsection (C) to read:
"(C) Any compensation package, severance package, payment or other benefit of whatever nature conferred upon the chief executive officer or member of the board of the Public Service Authority or offered on or after May 15, 2021, must first be approved by the Agency Head Salary Commission before the authority can enter into an agreement regarding a severance package, payment or other benefits. Any payment made in violation of this section is grounds for a claw-back of the payment or benefit in a legal action brought by the Attorney General of this State seeking a recovery of that payment. The Public Service Authority must provide a report to the Agency Head Salary Commission by July 6, 2021, with information regarding any severance package, payment or other benefit conferred upon an executive officer or member of the board of the Public Service Authority from January 1, 2020, through June 30, 2021."
SECTION 4.Section 58-31-55 of the 1976 Code is amended to read:
"Section 58-31-55.(A) A director shall discharge his duties as a director, including his duties as a member of a committee:
(1) in good faith;
(2) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
(3) in a manner he reasonably believes to be in the best interests of the Public Service Authority. As used in this chapter, 'best interests' means a balancing of the following:
(a) preservation of the financial integrity of the Public Service Authority and its ongoing operation of generating, transmitting, and distributing electricity to wholesale and retail customers on a reliable, adequate, efficient, and safe basis, at just and reasonable rates, regardless of the class of customer operations;
(b) the interest of the Public Service Authority's residential, commercial and industrial retail customers and those wholesale customers served pursuant to contractual arrangements but excluding joint action agencies and those entities located outside the State, in reliable, adequate, efficient, and safe service, at just and reasonable rates, regardless of customer class;
(c) maintenance, preservation and keeping of the Public Service Authority's properties and all additions and betterments thereto and extension thereof and every part and parcel in thereof, in good repair, working order and condition;
(b)(d) the support of, economic development and job attraction and retention within the Public Service Authority's present service area or areas within the State authorized to be served by an electric cooperative or municipally owned electric utility that is a direct or indirect wholesale customer of the authority, provided the remaining items of this subsection have been met; and
(c)(e)subject to the limitations of Section 58-31-30(B) and item (A)(3)(a) of this section, exercise of the powers of the authority set forth in Section 58-31-30 in accordance with good business practices and the requirements of applicable licenses, laws, and regulations.
(B) In discharging his duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
(1) one or more officers or employees of the Public Service Authority whom the director reasonably believes to be reliable and competent in the matters presented;
(2) legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person 's professional or expert competence; or
(3) a committee of the board of directors of which he is not a member if the director reasonably believes the committee merits confidence.
(C) A director is not acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (B) unwarranted.
(D) A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section.
(E) An action against a director for failure to perform the duties imposed by this section must be commenced within three years after the cause of action has occurred, or within two years after the time when the cause of action is discovered or should reasonably have been discovered, whichever occurs sooner. This limitations period does not apply to breaches of duty which have been concealed fraudulently.
(F) Any violation of this code section by a director shall constitute grounds for removal from office by the Governor pursuant to Section 1-3-240."
SECTION5. Section 58-31-56 of the 1976 Code is amended to read:
"Section 58-31-56. (A)A conflict of interest transaction is a transaction with the Public Service Authority in which a director of the Public Service Authority has a direct or indirect interest. A conflict of interest transaction is not voidable by the Public Service Authority solely because of the director 's interest in the transaction if any one of the following is true:
(1) the material facts of the transaction and the director 's interest were disclosed or known to the board of directors or a committee of the board of directors, and the board of directors or a committee authorized, approved, or ratified the transaction; or
(2) the transaction was fair to the Public Service Authority and its customers.
If item (1) has been accomplished, the burden of proving unfairness of any transaction covered by this section is on the party claiming unfairness. If item (1) has not been accomplished, the party seeking to uphold the transaction has the burden of proving fairness.
(B) For purposes of this section, a director of the Public Service Authority has an indirect interest in a transaction if:
(1) another entity in which he has a material financial interest or in which he is a general partner is a party to the transaction; or
(2) another entity of which he is a director, officer, or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the Public Service Authority.
(C) For purposes of subsection (A)(1), a conflict of interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the board of directors (or on the committee) who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subsection (A)(1) if the transaction is otherwise authorized, approved, or ratified as provided in that subsection.
(D) Any violation of this code section by a director shall constitute grounds for removal from office by the Governor pursuant to Section 1-3-240."
SECTION6. Section 1-3-240(C)(1)(m) of the 1976 Code is amended to read:
" (m) Directors of the South Carolina Public Service Authority appointed pursuant to Section 58-31-20. A director of the South Carolina Public Service Authority also may be removed for his breach of any duty arising under Section 58-31-55 or 58-31-56. The Governor must not request a director of the South Carolina Public Service Authority to resign unless cause for removal, as established by this subsection, exists. Removal of a director of the South Carolina Public Service Authority, except as is provided by this section or by Section 58-31-20(A), must be considered to be an irreparable injury for which no adequate remedy at law exists;"
SECTION7. (A)To ensure that the Public Service Authority Board of Directors positions are appropriately staggered, the following establishes the term expiration for positions as of the effective date of this act:
(1) The terms for the members representing the 2nd and 4th congressional districts, and the at-large seat designated as the chair shall expire upon the effective date of this act;
(2) The terms for the members representing the 1 st and 7th congressional districts and Berkeley County shall expire on January 1, 2022;
(3) The terms for members representing the 3rd, and 6th congressional districts and the other at-large seat shall expire on June 30, 2022; and
(4) The terms for members representing the 5th congressional district and Georgetown and Horry counties shall expire on January 1, 202 3.
Current members of the Board may continue to serve beyond the dates indicated until such time as the Governor transmits their nomination to the Senate.
If any vacancy occurs prior to respective dates established in this SECTION, the Governor may appoint a successor pursuant to Section 58-31-20.
(B) Notwithstanding the term limit provisions in subsection 58-31-20(A), a director serving as of the effective date of this act is ineligible for reappointment unless that director was first appointed after January 1, 2018.
SECTION8. Article 1, Chapter 31, Title 58 of the 1976 Code is amended by adding:
"Section 58-31-240.For purposes of this section:
(A) 'JBRC' means the Joint Bond Review Committee.
(1) Prior to issuing any (1) bonds, (2) notes, or (3) other indebtedness, including any refinancing that does not achieve a savings in total debt service, JBRC must approve, reject, or modify the issuance by the authority. This section does not apply to the issuance of short term or revolving credit debt for the management of day to day operations and financing needs.
(2) If JBRC does not take action on the issuance with in sixty days, the issuance is considered approved.
(3) Issuance approved by the JBRC need not be issued immediately, and the debt may be issued across multiple series and over a three-year term.
(B)(1) By September first of each year, the authority shall provide an annual report regarding every transaction involving an interest in real property and executed during the preceding twelve months, including:
(a) a summary of the key terms of all contracts effectuating or related to such transactions; and
(b) parties involved in the transaction, including all entities or persons with any type of ownership interest or authority to control.
(2) A transfer of any interest in real property by the authority, regardless of the value of the transaction, requires approval, rejection, or modification by JBRC.
(3) The reporting and other requirements of this item do not apply to encroachment agreements, rights-of-way, or lease agreements made by the authority for property within the Federal Energy Regulatory Project boundary.
(C)JBRC, may adopt instructions which must be followed by the Authority for any submission pursuant to this section.
(D) The requirements imposed on the authority pursuant to this section are in addition to any other requirements of law. If any provision of this section conflicts with another provision of law, the provisions of this section shall control to the extent of the conflict.
Section 58-31-250.(A) The Senate Finance Committee and the House Ways and Means Committee may request and the Authority must produce, in writing or by testimony at the request of the relevant committee, within 30 days of any request any or all of the following:
(1) annual audited financial statements;
(2) projected and actual annual revenue;
(3) actual annual expenditures;
(4) any debt issuances in the previous five years, whether short-term or long-term;
(5) percent of annual revenues utilized for administration. For purposes of this item, 'administration' includes executive level employees compensation and other operating costs;
(6) organizational flow chart displaying the position titles and name of executive-level employees;
(7) major components of any long-term capital plan, including timing and cost estimates, and financing plan for such capital investments whether paid from operations or debt;
(8) performance objectives and results;
(9) performance measurements used to evaluate program effectiveness;
(10) any outstanding litigation issues; and
(11) planning documents and progress reports, including budgeted and actual expenditures.
(B) The authority must post its annual audited financial report in a conspicuous place on the authority 's website and distribute the reports to members of the General Assembly.
(C) The authority and the Board of Directors and its subcommittees are public bodies for purposes of the Freedom of Information Act.
(D) Any and all compensation for the Authority CEO must be reviewed by the Agency Head Salary Commission. Additionally, any employment contracts or retention contracts that last longer than five years, and all contract extensions, must be reviewed by the Agency Head Salary Commission." /
Renumber parts and sections to conform.