1 HOUSE AMENDMENTS AMENDED 2 May 31, 2016 3 4 S. 1166 5 6 Introduced by Senators Leatherman, Setzler, Allen, J. Matthews, 7 Jackson, M.B. Matthews, Malloy, Lourie, Williams, Sheheen, 8 Nicholson, Johnson, Scott, Sabb, Hutto and Kimpson 9 10 S. Printed 5/31/16--S. [SEC 6/1/16 3:29 PM] 11 Read the first time March 10, 2016. 12 13

[1166-1] 1 2 3 4 5 6 7 8 9 A JOINT RESOLUTION 10 11 TO PROVIDE FOR ANNUAL INSTALLMENT PAYMENTS 12 BY SOUTH CAROLINA STATE UNIVERSITY ON 13 OUTSTANDING LOANS MADE TO THE UNIVERSITY BY 14 THE STATE OF SOUTH CAROLINA AND LIABILITIES 15 INCURRED PURSUANT TO SECTION 26570, TO PROVIDE 16 FOR WHEN THE INSTALLMENT PAYMENTS ARE DUE, TO 17 PROVIDE FOR THE AMOUNT OF THE INSTALLMENT 18 PAYMENTS, TO PROVIDE FOR A PROCESS THROUGH 19 WHICH THE DEBT INCURRED MAY BE RELIEVED, AND 20 TO EXTEND FLEXIBILITY RELATED TO FURLOUGHS AS 21 PROVIDED IN ACT 120 OF 2015. 22 Amend Title To Conform 23 24 Be it enacted by the General Assembly of the State of South 25 Carolina: 26 27 PART I 28 29 Debt Restructuring 30 31 SECTION 1. (A) Pursuant to Proviso 19.2 Part IB, of Act 286 of 32 2014, South Carolina State University was approved for a loan to 33 be disbursed through a series of scheduled installments. Any 34 funds not disbursed to the university pursuant to the schedule shall 35 be disbursed to the university. 36 (B)(1) The State Auditor shall review and audit, if necessary, 37 the financial structure and activities of South Carolina State 38 University to ensure sufficient financial and internal controls are in 39 place to protect the financial integrity of the university. A report 40 of findings and recommendations shall be submitted to the 41 Chairman of the Senate Finance Committee, the Chairman of the

[1166] 2 1 House Ways and Means Committee, and the Executive Budget 2 Office, by December 30, 2016. 3 (2) In order to assist the State Auditor, provide for the 4 adequate training of university financial staff, and provide for 5 technical assistance to the university board and State Fiscal 6 Accountability Authority, the Executive Director of the State 7 Fiscal Accountability Authority shall engage a thirdparty 8 accounting consultant to assist the university and the authority in 9 evaluating and promoting the financial integrity of the university. 10 The university shall reimburse the authority for the actual expenses 11 of the consultant, not to exceed $150,000 in Fiscal Year 2016- 12 2017. 13 (C) No later than July 31, 2016, the Executive Director of the 14 State Fiscal Accountability Authority shall enter into a loan 15 repayment agreement with the university for the $12,000,000 loan 16 referenced in subsection (A). The terms of the agreement shall, at 17 a minimum, include a provision that the loan funds disbursed to 18 South Carolina State University pursuant to Proviso 19.2, Part IB, 19 of Act 286 of 2014, including any associated interest, shall be 20 forgiven at a rate of $8,000,000 per year beginning in Fiscal Year 21 201617, $2,000,000 in Fiscal Year 2017-18, and $2,000,000 in 22 Fiscal Year 2018-19 provided that the university has met the 23 following benchmarks: 24 (1) For Fiscal Year 201617 the university must have attained 25 accreditation status from the Southern Association of Colleges and 26 Schools (SACS); and 27 (2) For each subsequent fiscal year until the loan is fully 28 forgiven the university must: 29 (a) maintain such accreditation status; 30 (b) attain an increase in net financial position as 31 demonstrated by the university’s published audited financial 32 statements beginning with Fiscal Year 201617 after such 33 adjustments for pension and other liabilities as recommended by 34 the accounting consultant and SACS, until such time as the 35 university has achieved and can maintain a balanced budget and 36 positive net financial position; and 37 (c) achieve a one percent growth in fulltime student 38 enrollment above the prior academic year enrollment. 39 (D)(1) South Carolina State University must provide a report on 40 a quarterly basis to the House Ways and Means Higher Education 41 and Technical Schools Subcommittee and the Senate Finance 42 Committee that includes, but is not limited to, the status of their 43 fiscal affairs and enrollment growth. The format and contents of

[1166] 3 1 this report shall be developed in consultation with and approved by 2 the Commission on Higher Education, which shall cooperatively 3 develop with South Carolina State University reasonable metrics, 4 benchmarks, and the process for measuring such metrics to be 5 included in the quarterly report. 6 (2) The Commission on Higher Education, by November 7 first of each year, shall certify to the Chairman of the Senate 8 Finance Committee, the Chairman of the House Ways and Means 9 Committee, and the Executive Budget Office that the university 10 has met and maintained the required benchmarks each fiscal year. 11 12 SECTION 2. No later than July 31, 2016, the Executive Director 13 of the State Fiscal Accountability Authority shall enter into a 14 repayment schedule with South Carolina State University to retire 15 the debt incurred by the university pursuant to the April 30, 2014, 16 loan from the Budget and Control Board, succeeded in interest by 17 the State Fiscal Accountability Authority. The repayment terms 18 shall establish installment payments at the rate of $355,036 19 annually. 20 21 SECTION 3. The university board is authorized to reprogram 22 appropriations contained in H. 5001, R __, Act __ of 2016, the 23 Fiscal Year 2016-17 Appropriations Act, if the reprogrammed 24 appropriations are directly related to attaining accredidation status 25 from the Southern Association of Colleges and Schools (SACS), 26 including, but not limited to, improving the university’s 27 “Unrestricted Net Assets Exclusive of Plant and Plant Related 28 Debt” (UNAEP). The university board may not reprogram funds 29 pursuant to this SECTION for any other purpose. As soon as 30 practicable after making a determination that funds must be 31 reprogrammed, the university board must notify the Chairman of 32 the Senate Finance Committee, the Chairman of the House Ways 33 and Means Committee, the Executive Budget Office, and the State 34 Fiscal Accountability Authority that appropriations will be 35 reprogrammed, the specific purposes for the reprogramming, and 36 the specific appropriations that will be reprogrammed. 37 38 PART II 39 40 Furlough Authority Extension 41 42 SECTION 4. (A) Notwithstanding any other provision of law, 43 beginning in Fiscal Year 20162017 and ending Fiscal Year

[1166] 4 1 20212022, the agency head of South Carolina State University 2 may institute a mandatory employee furlough program of not more 3 than twenty working days in each fiscal year. The program must 4 meet the requirements provided in subsection (B). 5 (B) The furlough must be inclusive of all employees of the 6 university or within a designated department or program regardless 7 of source of funds, place of work, or tenure status, and must 8 include employees in classified positions and unclassified 9 positions in the designated area. A furlough program also may be 10 implemented by pay band for classified employees and by pay rate 11 for unclassified employees. Law enforcement employees, 12 employees who provide direct patient or client care, and frontline 13 employees who deliver direct customer services may be exempted 14 from a mandatory furlough. If the furlough includes the entire 15 university, the furlough must include the agency head. Scheduling 16 of furlough days, or portions of days, shall be at the discretion of 17 the university, but under no circumstances shall the university 18 close completely. If an employee participates in a voluntary 19 furlough program from Fiscal Year 20162017 through Fiscal Year 20 20212022, the furlough days taken voluntarily must count toward 21 the furlough days required by the mandatory furlough authorized 22 in this section. During this furlough, affected employees shall be 23 entitled to participate in the same state benefits as otherwise 24 available to them except for receiving their salaries. As to those 25 benefits which require employer and employee contributions, 26 including, but not limited to, contributions to the South Carolina 27 Retirement System or the optional retirement program, the 28 university will be responsible for making both employer and 29 employee contributions during the time of the furlough if coverage 30 would otherwise be interrupted; and as to those benefits which 31 require only employee contributions, the employee remains solely 32 responsible for making those contributions. Placement of an 33 employee on furlough under this provision does not constitute a 34 grievance or appeal under the State Employee Grievance 35 Procedure Act. The university may allocate the employee’s 36 reduction in pay over the balance of the fiscal year for payroll 37 purposes regardless of the pay period within which the furlough 38 occurs. The university is encouraged to consult the State Division 39 of Human Resources of the Budget and Control Board in the 40 development of the furlough plan to ensure that the plan meets the 41 requirements of this section. The university shall report 42 information regarding furloughs to the State Division of Human 43 Resources as requested.

[1166] 5 1 2 SECTION 5. This joint resolution takes effect July 2, 2016. 3 XX 4

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