S 2 Session 112 (1997-1998)
S 0002 General Bill, By Passailaigue and D. Williams
Similar(S 1, S 1002, H 3192, H 3256)
A BILL TO AMEND CHAPTER 11, TITLE 57 OF THE 1976 CODE, RELATING TO FINANCIAL
MATTERS OF HIGHWAYS, BY ADDING ARTICLE 5, SO AS TO PROVIDE FOR THE STATE
LOTTERY FUND AND TO PROVIDE FOR THE ISSUANCE OF STATE LOTTERY BONDS; AND TO
AMEND SECTION 11-17-10, RELATING TO BOND ANTICIPATION NOTES, SO AS TO ADD
LOTTERY BONDS TO THE DEFINITION OF BONDS.
01/14/97 Senate Introduced and read first time SJ-85
01/14/97 Senate Referred to Committee on Finance SJ-85
A BILL
TO AMEND CHAPTER 11, TITLE 57 OF THE 1976 CODE,
RELATING TO FINANCIAL MATTERS OF HIGHWAYS, BY
ADDING ARTICLE 5, SO AS TO PROVIDE FOR THE STATE
LOTTERY FUND AND TO PROVIDE FOR THE ISSUANCE OF
STATE LOTTERY BONDS; AND TO AMEND SECTION
11-17-10, RELATING TO BOND ANTICIPATION NOTES, SO AS
TO ADD LOTTERY BONDS TO THE DEFINITION OF BONDS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 11, Title 57 of the 1976 Code is amended by
adding Article 5:
" Article 5
Lottery Bonds
Section 57-11-500. As used in this article :
(1) `Board' is the State Budget and Control Board.
(2) `Commission' is the administrative and governing body of the
Department of Transportation.
(3) `Highway projects' are those projects undertaken to construct,
reconstruct, maintain, or improve roads or bridges within this State.
(4) `Lottery bonds' are bonds issued pursuant to Article X, Section
13(6)(c) of the State Constitution, 1895, as amended and this article .
Section 57-11-510. There is created the State Lottery Fund
comprised of the gross revenue from the operation of the state
lotteries authorized in Section 7, Article XVII of the State
Constitution. This fund is separate and distinct from the general fund
of the State, with all deposits to be invested by the State Treasurer
with interest earned remaining a part of the fund. No more than seven
percent of the gross revenues each year may be used for operational
expenses of state lotteries, and of the net revenue remaining after
payment of operational expenses, fifty percent must be expended in
prizes. The remaining revenues, including interest, must be used as
the basis for issuing lottery bonds for highway projects, according to
this article .
Section 57-11-520. (A) The amount in the State Lottery Fund, less
operational expenses of state lotteries and expenditures for prizes,
after the close of the fiscal year, must be used as follows:
(1) No more than ninety percent of the remaining revenue must
be used as a basis of a bond pledge to finance highway projects. This
amount must be sufficient to meet the payment of principal and
interest on lottery bond debt then due.
(2) At least ten percent of the remaining revenue must be
reserved each year. This amount is the reserve fund.
(B) If funds are needed to service existing bond obligations, the
board may retrieve funds from the reserve fund as is necessary.
However, the amount retrieved must be restored to the reserve fund
out of future revenues until the ten percent minimum is reached.
(C) Except as provided in subsection (B), any revenue remaining
in the reserve fund at the end of the fiscal year remains in the reserve
fund.
Section 57-11-530. To raise money for highway projects and
monies to refund any lottery bonds then outstanding, the commission
may make a request to the board for the issuance of lottery bonds
pursuant to this article . The request must be in the form of a
resolution adopted at any regular or special meeting of the
commission and must include:
(1) the amount then required for highway projects;
(2) a tentative time schedule setting forth the period during which
the sum requested will be expended;
(3) a debt service table showing the annual principal and interest
requirements for all lottery bonds then outstanding;
(4) the amount of revenues derived from the lotteries during the
preceding fiscal year; and
(5) the amount, as estimated by the commission, that will be
derived from the lotteries during the then current and the next
ensuing fiscal years during which it is expected that the lottery bonds
then sought to be issued will be outstanding.
Section 57-11-540. The board must review the request received
pursuant to Section 57-11-530. If the board approves the request, it
may, by resolution, effect the issuance of lottery bonds, or pending
the issuance of them, effect the issuance of bond anticipation notes
pursuant to Chapter 17 of Title 11.
The board's certified copy of the resolution providing for the
issuance of lottery bonds must be transmitted to the Governor and to
the State Treasurer, with the request that they issue and deliver lottery
bonds in accordance with the terms and conditions of the resolution.
The resolution must include:
(1) the amount, denomination, and numbering of lottery bonds to
be issued;
(2) the date as of which they shall be issued;
(3) the maturity schedule for the retirement of the lottery bonds;
(4) the redemption provisions, if any, applicable to the bonds;
(5) the maximum rate or rates of interest the bonds will bear;
(6) the purposes for which the bonds are to be issued;
(7) the occasion on which bids will be received for the sale of the
bonds;
(8) the form of advertisement of sale;
(9) the form of the bonds of the particular issue;
(10) other matters necessary to effect the sale, issuance, and
delivery of the bonds; and
(11) a finding by the board that the actual receipts, for the
preceding fiscal year, from the lotteries equaled or exceeded the
maximum annual debt service requirements for all lottery bonds then
outstanding and lottery bonds then proposed to be issued.
Following receipt of a certified copy of the resolution of the board,
the Governor and State Treasurer must issue lottery bonds according
to the provisions of the resolution of the board.
Section 57-11-550. The maximum annual debt service on general
obligation bonds issued or outstanding as lottery bonds may not
exceed the debt service limits established in Article X, Section 13 of
the South Carolina Constitution. Within these limitations, lottery
bonds may be issued for state highway projects or to refund lottery
bonds from time to time under the conditions prescribed by this
article .
Section 57-11-560. The full faith, credit, and taxing power of the
State of South Carolina is pledged to pay the principal of and interest
on lottery bonds (whether now outstanding or hereafter issued), as
they come due. In addition, the State Treasurer may use all of the
monies derived from the state lotteries to pay the principal and
interest of lottery bonds, without further action of the commission, as
the bonds mature.
Section 57-11-570. Lottery bonds are issued as fully registered
bonds with both principal and interest made payable only to the
registered holder. Fully registered bonds are subject to transfer under
the conditions as the board prescribes.
Section 57-11-580. Lottery bonds must bear interest, payable on
the prescribed occasions not more than twenty-five years after the
date of issuance. The installments or series may be equal or unequal
in amount. Lottery bonds may, in the discretion of the board, be
made subject to redemption at par and accrued interest, plus the
redemption premium as it approves and on the occasions as it
prescribes. Lottery bonds may not be redeemable before maturity
unless they contain a statement to that effect.
Section 57-11-590. Lottery bonds issued under this article , and
the interest thereon, are exempt from all state, county, municipal,
school district, and other taxes or assessments, direct or indirect,
general or special, imposed by the State of South Carolina, whether
imposed for general revenue or otherwise, except inheritance, estate,
or transfer taxes.
Section 57-11-600. Lottery bonds are sold by the Governor and
the State Treasurer upon sealed proposals, after publication of notice
of the sale one or more times at least seven days before the sale, in a
newspaper of general circulation in the State and also in a financial
paper published in New York City that regularly publishes notices of
sale of state or municipal bonds. The bonds must be awarded to the
bidder offering to purchase the lottery bonds at the lowest net interest
cost to the State at a price of not less than ninety-nine percent of par
and accrued interest to the date of delivery, but the State reserves the
right to reject all bids and to readvertise the bonds for sale and to
waive technicalities in the bidding.
For the purpose of bringing about successful sales of the bonds, the
board may do all things ordinarily and customarily done in
connection with the sale of state or municipal bonds. All expenses
incident to the sale of the bonds are paid from the proceeds of the sale
of the bonds.
Section 57-11-610. Executors, administrators, guardians, and
other fiduciaries and all sinking fund commissions, including the
State Budget and Control Board of South Carolina as manager and
administrator of other state sinking funds, may invest any monies in
their hands in lottery bonds.
Section 57-11-620. The proceeds of the sale of lottery bonds are
received by the State Treasurer and applied by him to the purposes
for which issued, except that the accrued interest, if any, is used to
discharge in part the first interest to become due on the bonds, and
the premium, if any, is used to discharge the payment of the first
installment of principal to become due on the bonds, but the
purchasers of the bonds are not liable for the proper application of
the proceeds to the purposes for which they are intended.
Section 57-11-630. The proceeds derived from the sale of lottery
bonds may be applied only to the purposes set forth in the resolution
of the board pursuant to which the bonds are issued.
Section 57-11-640. Lottery bonds are issued in accordance with
the provisions of this article and Chapter 47 of Title 2 of the 1976
Code, as amended."
SECTION 2. Section 11-17-10(a) of the 1976 Code is amended to
read:
"Section 11-17-10(a). The term `bonds' shall mean
means general obligation bonds payable from ad valorem
taxes, general obligation bonds additionally secured by any pledge of
any assessments, or any pledge of revenues derived by the borrower
from any revenue-producing facility, bonds payable solely from the
revenues of any revenue-producing facility, and bonds payable solely
from any assessments. The term `bonds' shall also include
also includes state highway bonds as defined pursuant to the
provisions of item (10) of Section 57-11-210, as amended and
state lottery bonds as defined in Section 57-11-500."
SECTION 3. This act takes effect upon approval by the Governor.
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