H*2931 Session 107 (1987-1988)
H*2931(Rat #0163, Act #0117 of 1987) General Bill, By R.N. McLellan
A Bill to establish a plan for allocating the State ceiling on the issuance of
private activity bonds imposed by the Federal Tax Reform Act of 1986, Public
Law 99-514.
04/14/87 House Introduced and read first time HJ-1827
04/14/87 House Referred to Committee on Ways and Means HJ-1828
04/23/87 House Committee report: Favorable Ways and Means HJ-2164
04/29/87 House Read second time HJ-2234
04/30/87 House Read third time and sent to Senate HJ-2363
04/30/87 Senate Introduced and read first time SJ-1616
04/30/87 Senate Referred to Committee on Finance SJ-1616
05/07/87 Senate Recalled from Committee on Finance SJ-1754
05/07/87 Senate Read second time SJ-1754
05/07/87 Senate Ordered to third reading with notice of
amendments SJ-1754
05/12/87 Senate Read third time and enrolled SJ-1795
05/20/87 Ratified R 163
05/26/87 Signed By Governor
05/26/87 Effective date 05/26/87
05/26/87 Act No. 117
06/09/87 Copies available
(A117, R163, H2931)
AN ACT TO ESTABLISH A PLAN FOR ALLOCATING THE STATE CEILING ON THE ISSUANCE OF
PRIVATE ACTIVITY BONDS IMPOSED BY THE FEDERAL TAX REFORM ACT OF 1986, PUBLIC LAW
99-514.
Whereas, the General Assembly finds that the United States Congress through
passage of the Tax Reform Act of 1986, Public Law 99-514 (the act), imposed a new
volume limitation on the number of tax-exempt private activity bonds that can be
issued in each state; and
Whereas, the Governor of each state was given interim authority by the act to
proclaim a different formula than that provided in the act for allocating the
state's volume limitation among its governmental units which have authority to
issue private activity bonds; and
Whereas, the act provides that the Governor's interim authority does not apply
to any bonds issued after the earlier of the effective date of any state
legislation with respect to the allocation of the state ceiling or December 31,
1987; and
Whereas, Executive Order 87-01, issued on January 7, 1987, and effective on
January 8, 1987, sets forth the plan under which the state's volume limitation
under the act is now being allocated among its governmental units which have
authority to issue private activity bonds; and
Whereas, to provide continuity in the processes for allocating the state's volume
limitation under the act among the governmental units authorized to issue private
activity bonds, it is essential that the General Assembly act to provide a
formula for allocating the state's ceiling and to establish a procedure for
making these allocations which will be effective beyond the end of calendar year
1987 when the interim authority granted to and exercised by the Governor expires.
Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
Calculation and certification of state ceiling
SECTION 1. The state ceiling on the issuance of private activity bonds as
defined in Section 146 of the Internal Revenue Code of 1986 (the Code)
established in the act must be certified annually by the Budget and Control Board
secretary based upon the provisions of the act. The board secretary shall make
this certification as soon as practicable after the estimates of the population
of the State of South Carolina to be used in the calculation are published by the
United States Bureau of the Census but in no event later than February first of
each calendar year.
Allocation of bond limit amounts
SECTION 2. (A) The private activity bond limit for all issuing authorities
must be allocated by the board in response to authorized requests as described
in Section 4 by the issuing authorities.
(B) The aggregate private activity bond limit amount for all South Carolina
issuing authorities is allocated initially to the State for further allocation
within the limits prescribed herein.
(C) Except as is provided in Section 5, all allocations must be made by the
board on a first-come, first-served basis, to be determined by the date and time
sequence in which complete authorized requests are received by the board
secretary.
Private activity bond limits and pools
SECTION 3. (A) The private activity bond limit for all state government
issuing authorities now or hereafter authorized to issue private activity bonds
as defined in the act, to be known as the "state government pool", is
forty percent of the state ceiling less any amount shifted to the local pool as
described in subsection (B) of this section or plus any amount shifted from that
pool.
(B) The private activity bond limit for all issuing authorities other than
state government agencies, to be known as the "local pool", is sixty
percent of the state ceiling plus any amount shifted from the state government
pool or less any amount shifted to that pool.
(C) The board, with review and comment by the Joint Bond Review Committee, may
shift unallocated amounts from one pool to the other at any time.
Authorized requests for an allocation
SECTION 4. (A) For private activity bonds proposed for issue by other than
state government issuing authorities, an authorized request is a request included
in a petition to the board that a specific amount of the state ceiling be
allocated to the bonds for which the petition is filed. The petition must be
accompanied by a copy of the Inducement Contract, Inducement Resolution, or other
comparable preliminary approval entered into or adopted by the issuing authority,
if any, relating to the bonds. The board shall forward promptly to the committee
a copy of each petition received.
(B) For private activity bonds proposed for issue by any state government
issuing authority, an authorized request is a request included in a petition to
the board that a specific amount of the state ceiling be allocated to the bonds
for which the petition is filed. The petition must be accompanied by a bond
resolution or comparable action by the issuing authority authorizing the issuance
of the bonds. The board shall forward promptly to the committee a copy of each
petition received.
(C) Each authorized request must demonstrate that the allocation amount
requested constitutes all of the private activity bond financing contemplated at
the time for the project and any other facilities located at or used as a part
of an integrated operation with the project.
Limitations on allocations
SECTION 5. (A) The board, with review and comment by the committee, may
disapprove, reduce, or defer any authorized request. If it becomes necessary to
exercise this authority, the board and the committee shall take into account the
public interest in promoting economic growth and job creation.
(B) Authorized requests for state ceiling allocations of more than ten million
dollars for a single project are deferred until after July first unless the
board, after review and comment by the committee, determines in any particular
instance that the positive impact upon the State of approving an allocation of
an amount greater than ten million dollars is of such significance that approval
of the allocation is warranted.
Certificates by issuing authority and by board
SECTION 6. (A) An allocation of the state ceiling approved by the board is
made formal initially by a certificate which allocates tentatively a specific
amount of the state ceiling to the bonds for which the allocation is requested.
This tentative allocation certificate must specify the state ceiling amount
allocated, the issuing authority and the project involved, and the time period
during which the tentative allocation is valid. This certificate must remind the
issuing authority that the tentative allocation is made final after the issuing
authority chairman or other duly authorized official or agent of the issuing
authority, before the issue is made, certifies the issue amount and the projected
date of issue, as is required by subsection (B) of this section. It also may
include other information considered relevant by the board secretary.
(B) The chairman or other authorized official or agent of an issuing authority
issuing any private activity bond for which a portion of the state ceiling has
been allocated tentatively shall execute and deliver to the board secretary an
issue amount certificate setting forth the exact amount of bonds to be issued and
the projected bond issue date which date must not be more than ten business days
after the date of the issue amount certificate and it must be before the state
ceiling allocation involved expires. The issue amount certificate may be an
executed copy of the appropriate completed Internal Revenue Service form to be
submitted to the Internal Revenue Service on the issue or it may be in the form
of a letter which certifies the exact amount of bonds to be issued and the
projected date of the issue.
(C) In response to the issuing authority's issue amount certificate required
by subsection (B) of this section, the board secretary is authorized to issue
and, as may be necessary, to revise a certificate making final the ceiling
allocation approved previously by the board on a tentative basis, if the
secretary determines that:
(1) the issuing authority's issue amount certificate specifies an amount not
in excess of the approved tentative ceiling allocation amount;
(2) the issue amount certificate was received prior to the issue date
projected and that the certificate is dated not more than ten days prior to the
issue date projected;
(3) the issue date projected is within the time period approved previously
for the tentative ceiling allocation; and
(4) the bonds when issued and combined with the total amount of bonds
requiring a ceiling allocation included in issue amount certificates submitted
previously to the board by issuing authorities do not exceed the state ceiling
for the calendar year. Except under extraordinary circumstances, the board
secretary shall issue this certificate within two business days following the
date the issue amount certificate is received.
(D) In accordance with Section 149(e)(2)(F) of the Code, the secretary of the
Budget and Control Board is designated as the state official responsible for
certifying, if applicable, that certain bonds meet the requirements of Section
146 of the Code relating to the volume cap on private activity bonds.
(E) Any tentative or final state ceiling allocation granted by the board
before the effective date of this act remains valid as an allocation of a portion
of the volume cap for South Carolina provided under Section 146 of the Code. The
allocations expire in accordance with the regulations under which they were
granted or
extended and their validity may be extended or reinstated in accordance with the
provisions of this act.
Time limits on allocations
SECTION 7. (A) Any state ceiling allocation approved by the board is valid
only for the calendar year in which it is approved, unless eligible and approved
for carry-forward election or unless specified differently in the board
certificates required by Section 6.
(B) Unless eligible and approved for carryforward election or unless specified
differently in board certificates required by Section 6, each state ceiling
allocation expires automatically if the bonds for which the allocation is made
are not issued within ninety consecutive calendar days from the date the
allocation is approved by the board.
(C) In response to a written request by the chairman or other duly authorized
official or agent of an issuing authority, the board, acting during the period
an approved allocation is valid, may extend the period in which an allocation is
valid in a single calendar year by thirty-one consecutive calendar days to a
total of not more than one hundred twenty-one consecutive calendar days.
(D) In response to a written request by the chairman or other authorized
official or agent of an issuing authority, the board may reinstate for a period
of not more than thirty-one consecutive calendar days in any one calendar year
part or all of an allocation approved but not extended previously in accordance
with subsection (C) of this section in that same calendar year which has expired.
The reinstatement request must certify that the authorized request submitted
previously is still true and correct or a new authorized request must be
submitted.
(E) A tentative ceiling allocation is canceled automatically if the chairman
or other authorized official or agent of the issuing authority involved fails to
deliver the issue amount certificate required by Section 6 to the board secretary
before the bonds for which the allocation is made are issued.
(F) The chairman or other authorized official or agent of an issuing authority
shall advise the board secretary in writing as soon as is practicable after a
decision is made not to issue bonds for which a portion of the state ceiling has
been allocated. All notices of relinquishment of ceiling allocations must be
entered promptly in the board's records by the board secretary.
(G) Ceiling allocations which are eligible and approved for carry-forward
election are not subject to the validity limits of this section. The board shall
join with the issuing authorities involved in carry-forward election statements
to meet the requirements of the Internal Revenue Service.
Board may adopt administrative policies and procedures
SECTION 8. The Budget and Control Board, after review and comment by the
committee, may adopt the policies and procedures it considers necessary for the
equitable and effective administration of this act.
Time effective
SECTION 9. This act takes effect upon approval by the Governor. |