There is established under the direction and control of the Secretary of Commerce the South Carolina Water and Wastewater Infrastructure Fund for the purposes of selecting, assisting, and financing major qualified projects by providing financing assistance to governmental units and private entities for constructing and improving water and wastewater facilities that are necessary for public purposes, including economic development and for technology-related infrastructure grants for local units of government.

(A) As used in this section:

(1) "Fund" means the South Carolina Water and Wastewater Infrastructure Fund.

(2) "Department" means the Department of Commerce.

(3) "Financing agreement" means any agreement entered into between the department and a qualified borrower pertaining to financing assistance. This agreement may contain, in addition to financing terms, provisions relating to the regulation and supervision of a qualified project, or other provisions as the department determines. The term "financing agreement" includes, without limitation, a loan or grant agreement, trust indenture, security agreement, reimbursement agreement, guarantee agreement, ordinance or resolution, or similar instrument.

(4) "Government unit" means a municipal corporation, county, special purpose district, special service district, commissioners of public works, or another public body, instrumentality or agency of this State including combinations of two or more of these entities acting jointly to construct, own, or operate a qualified project, and any other state or local authority, board, commission, agency, department, or other political subdivision created by the General Assembly or pursuant to the Constitution and laws of this State which may construct, own, or operate a qualified project.

(5) "Loan obligation" means a note or other evidence of an obligation issued by a qualified borrower.

(6) "Financing assistance" means, but is not limited to, grants, contributions, credit enhancement, capital or debt reserves for debt instrument financing, interest rate subsidies, provision of letters of credit and credit instruments, provision of debt financing instrument security, and other lawful forms of financing and methods of leveraging funds that are approved by the department, and in the case of federal funds, as allowed by federal law.

(7) "Project revenues" means all rates, rents, fees, assessments, charges, and other receipts derived or to be derived by a qualified borrower from a qualified project or made available from a special source, and as provided in the applicable financing agreement, derived from any system of which the qualified project is a part of, from any other revenue producing facility under the ownership or control of the qualified borrower including, without limitation, proceeds of grants, gifts, appropriations, including the proceeds of financing made by the department, investment earnings, reserves for capital and current expenses, proceeds of insurance or condemnation, and proceeds from the sale or other disposition of property and from any other special source as may be provided by the qualified borrower.

(8) "Qualified borrower" means any government unit, public or private nonprofit entity approved by the department that is authorized to construct, operate, or own a qualified project and receives financing assistance pursuant to this section.

(9) "Qualified project" means an eligible project that has been selected by the department to receive financing assistance pursuant to this section.

(10) "Revenues" means any receipts, fees, income, or other payments received or to be received by the department, expressly for the fund including, without limitation, receipts and other payments deposited for the fund and investment earnings on any monies and accounts established for the fund.

(B) The department shall provide the required staff and may add additional staff or contract for services, if necessary, to administer the fund in accordance with this section. The compensation, costs, and expenses incurred incident to administering the fund may be paid from revenues. If the department requests, the Department of Administration may provide legal, technical, planning, and other assistance through intergovernmental agreement. Costs incurred by the board pursuant to such a request must be reimbursed to it by the department from revenues.

(C) In addition to the powers and authority granted in this chapter, the department has the powers and authority necessary to carry out the purposes of this section including, but not limited to:

(1) establish procedures and guidelines necessary for the administration of this section;

(2) offer any form of financing assistance that the department considers necessary to any qualified borrower for a qualified project;

(3) provide loans or other financing assistance to qualified borrowers to finance the eligible costs of qualified projects and to acquire, hold, and sell loans or other obligations at prices and in the manner the department determines advisable;

(4) provide qualified borrowers with other financing assistance necessary to defray eligible costs of a qualified project;

(5) enter into contracts, arrangements, and agreements with qualified borrowers, governmental units, or other otherwise eligible entities, and execute and deliver all financing agreements and other instruments necessary or convenient to the exercise of the powers granted in this chapter;

(6) enter into agreements with a department, agency or instrumentality of the United States or of this State or another state for the purpose of planning and providing for the financing of qualified projects;

(7) establish fiscal controls and accounting procedures to ensure proper accounting and reporting by qualified borrowers;

(8) acquire by purchase, lease, donation, or other lawful means and sell, convey, pledge, lease, exchange, transfer, and dispose of all or part of its properties and assets of every kind and character or any interest in it to further the public purpose of the fund, without further approval or authorization;

(9) procure insurance, guarantees, letters of credit, and other forms of collateral or security or credit support from any public or private entity, including any department, agency, or instrumentality of the United States or this State, for the payment of any debt issued by a qualified borrower or other entity receiving assistance pursuant to this section, including the power to pay premiums or fees on insurance, guarantees, letters of credit, and other forms of collateral or security or credit support, without further approval or authorization;

(10) collect fees and charges in connection with financing assistance and expend such funds to effectuate the purposes of this section;

(11) apply for, receive and accept from any source, aid, grants, and contributions of money, property, labor, or other things of value to be used to carry out the purposes of this section;

(12) do all other things necessary or convenient to exercise powers granted or reasonably implied by this chapter.

(D) The department shall establish accounts and subaccounts within the state accounts and any federal accounts to receive and disburse funds to effectuate the purposes of this section. Earnings on the balances in these state accounts must be expended to effectuate the purposes of this section. Earnings on balances in the federal accounts must be credited and invested according to federal law. All accounts must be held in trust by the State Treasurer and the unexpended funds in these accounts carry forward from year to year. All earnings on state accounts must be retained in those accounts and used for the same purposes.

(E) The department shall determine which projects are eligible projects and then select from among the eligible projects those qualified to receive financing assistance under this section. Priority in funding must be given to projects located in underdeveloped areas of the State.

(F) In selecting qualified projects, the department shall consider the projected feasibility of the project and the amount of financial risk. The department also may consider, but is not limited to, the following criteria in making its determination that an eligible project is a qualified project:

(1) local support of the project, expressed by resolutions by the governing bodies in the areas in which the project will be located;

(2) economic benefit of the project;

(3) readiness of the project to proceed;

(4) ability of the applicant to repay financial assistance obtained;

(5) financial or in-kind contributions to the project;

(6) development status of the county in which the project is located; and

(7) whether the governing bodies of the county or the incorporated municipality in which the project is located provide to the department a resolution that makes a finding that the project is essential to economic development in the political subdivisions, or the department receives a resolution or certificate from the Coordinating Council for Economic Development that the project is essential to economic development in this State, or both, at the option of the department.

(G) Qualified borrowers may obtain financing assistance pursuant to this section through financing or grant agreements. Qualified borrowers entering into financing or grant agreements or issuing debt obligations may perform any acts, take any action, adopt any proceedings, or make and carry out any contracts or agreements with the department as may be agreed to by the department and any qualified borrower and necessary for effectuating the purposes of this section.

(H) In addition to the authorizations contained in this section, all other statutes or provisions permitting government units to borrow money and issue obligations including, but not limited to, the Revenue Bond Act for Utilities and the Revenue Bond Refinancing Act of 1937, may be utilized by any government unit in obtaining financing assistance from the department pursuant to this section. Notwithstanding the foregoing, obligations secured by ad valorem taxes may be issued by a government unit and purchased by the department or its agent without regard to any public bidding requirement.

(I) A qualified borrower may receive, apply, pledge, assign, and grant security interest in project revenues; and, in the case of a governmental unit, its project revenues, revenues derived from a special source or ad valorem taxes, to secure its obligations as provided in this section, and may fix, revise, charge, and collect fees, rates, rents, assessments, and other charges of general or special application for the operation or services of a qualified project, the system of which it is a part, and any other revenue producing facilities from which the qualified borrower derives project revenues, to meet its obligations under a financing agreement or to provide for the construction and improving of a qualified project.

(J) If a qualified borrower fails to collect and remit in full all amounts due under any related financing agreement, note, or other obligation, the department may, on or after the date these amounts are due, notify the State Treasurer who shall withhold all or a portion of the state funds and all funds administered by this State, its agencies, boards, and instrumentalities allotted or appropriated to the government unit and apply an amount necessary to the payment of the amount due; or in the case of a private entity, the department may pursue recovery pursuant to Chapter 56 of Title 12; or the department may pursue any other remedy provided by law.

(K) Nothing contained in this section mandates the withholding of funds allocated to a government unit or private entity which would violate contracts to which this State is a party, the requirements of federal law imposed on this State, or judgments of a court binding on this State.

(L) Notice, proceeding, or publication, except those required in this section, are not necessary to the performance of any act authorized in this section nor is any act of the department subject to any referendum.

(M) Following the close of each state fiscal year, the department shall submit an annual report of its activities pursuant to this section for the preceding year to the Governor and to the General Assembly.

(N) No funds under this section may be provided, promised, or allocated to any projects authorized hereunder before November 15, 2000.

(O) The department shall submit a quarterly report to the State Fiscal Accountability Authority, Revenue and Fiscal Affairs Office, and Executive Budget Office of all projects obligated for funding pursuant to this section.

HISTORY: 2000 Act No. 387, Part II, Section 69A.2, eff June 30 2000.