South Carolina S 891: Financing Agreements

Bill Text

2025-2026 Bill 891 Text of Previous Version (Feb. 04, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 891

Indicates Matter Stricken
Indicates New Matter

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

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING 
SECTION 11-27-110, RELATING TO LEASE PURCHASE OR FINANCING AGREEMENTS SUBJECT 
TO CONSTITUTIONAL DEBT LIMITS, SO AS TO PROVIDE AN EXPANDED DEFINITION OF 
FINANCING AGREEMENTS; BY AMENDING SECTION 11-27-40, RELATING TO THE EFFECT OF 
THE NEW ARTICLE X ON BONDS OF POLITICAL SUBDIVISIONS, SO AS TO PROVIDE THAT ANY 
MEMBER OF A LOCAL GOVERNING BODY WHO KNOWINGLY VOTES IN FAVOR OF A PROPOSED 
ACTION THAT VIOLATES SECTION 14 OF THE NEW ARTICLE X OF THE CONSTITUTION IS 
GUILTY OF MISCONDUCT IN OFFICE; AND BY AMENDING SECTION 11-27-50, RELATING TO 
THE EFFECT OF THE NEW ARTICLE X ON BONDS OF SCHOOL DISTRICTS, SO AS TO PROVIDE 
THAT ANY MEMBER OF A GOVERNING BODY OF THE STATE'S SCHOOL DISTRICTS WHO VOTES 
IN FAVOR OF A PROPOSED ACTION THAT KNOWINGLY VIOLATES SECTION 15 OF THE NEW 
ARTICLE X OF THE CONSTITUTION IS GUILTY OF MISCONDUCT IN OFFICE.

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

SECTION 1. Section 11-27-110(A)(6) of the S.C. Code is amended to 
read:

 (6) "financing agreement" means, with 
respect to any governmental entity, any contract entered into after December 
31, 1995, under the terms of which a governmental entity acquires the use of an 
asset which provides:

 (a) 
for payments to be made in more than one fiscal year, whether by the stated 
term of the contract or under any renewal provisions, optional or otherwise;

 (b) 
that the payments thereunder are divided into principal and interest components 
or which contain any reference to any portion of any payment under the 
agreement being treated as interest;

 (c) for payments by the governmental 
entity which will be utilized, directly or through any intermediary, to service 
all or a portion of indebtedness of such governmental entity, intermediary or 
any other entity issued for the purpose of acquiring or improving the asset;

 (c) (d) that title to all or a portion of 
the asset will be in the name of or be transferred to the governmental 
entity if all or a portion of the payments 
scheduled or provided for in the financing agreement are made; and

 (d) (e) for any contract entered into after December 31, 2006, 
pursuant to which installment payments of the purchase price are to be paid by 
a school district or other political subdivision to a nonprofit corporation, 
political subdivision, or any other entity. in order to finance the acquisition, construction, renovation, 
or repair of school buildings or other school facilities. This item 
shall apply to any contracts entered into after August 31, 2006, pursuant to 
which installment payments of the purchase price are to be paid by a school 
district or other political subdivision to a non-profit corporation, political 
subdivision, or any other entity, from any source other than the issuance of 
general obligation indebtedness. by the school district, in order to finance the acquisition, 
construction, renovation, or repair of school buildings or other school 
facilities.

 However, the term 
excludes any refinancing agreement and contracts entered into in connection 
with issues of general obligation bonds or revenue bonds issued pursuant to 
authorization provided in Article X of the Constitution;

SECTION 2. Section 11-27-40 of the S.C. Code is amended to read:

 Section 
11-27-40. The governing body of each of the 
political subdivisions of the State shall be empowered to incur general 
obligation debt for their respective political subdivisions as permitted by 
Section 14, New Article X and in accordance with its provisions and limitations. 
Any member of a local governing body who knows or should 
have known that a proposed action violates Section 14 of New Article X of the 
Constitution or the provisions of this Section and votes in favor of such an 
action is guilty of misconduct in office. All laws shall continue in 
force and effect after the ratification date, but each of such laws is amended 
as follows:

 1. If no election be 
prescribed in such law and an election is required by New Article X, then in 
every such instance, a majority vote of the qualified electors of the political 
subdivision voting in the referendum herein authorized is declared a condition 
precedent to the issuance of bonds pursuant to such law. The governing body of 
each of the political subdivisions shall be empowered to order any such 
referendum as is required by New Article X or any other provision of the 
Constitution, to prescribe the notice thereof and to conduct or cause such 
referendum to be conducted in the manner prescribed by Title 7, Code of Laws of 
South Carolina, 1976.

 2. If an election