SB 206: "South Georgia Energy Authority Act"; enact

Senate Bill 206

By: Senators Summers of the 13th and Tillery of the 19th

AS PASSED

A BILL TO BE ENTITLED

AN ACT

To create the South Georgia Energy Authority; to provide for a short title; to provide for definitions; to provide for purpose; to provide for members of the Authority and meetings; to provide for powers of the Authority; to authorize the issuance of revenue bonds of the Authority; to provide for funds received and trust funds; to provide for venue and jurisdiction; to provide for imposition of rates, charges, fees, and the pledge of revenues; to provide for tax exemption of Authority property; to provide for tort immunity; to provide contracting requirements; to provide for supplemental powers; to deny taxing powers; to provide for construction and severability; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Short title.

This Act shall be known and may be cited as the "South Georgia Energy Authority Act."

SECTION 2.

South Georgia Energy Authority; creation.

There is hereby created a public body corporate and politic to be known as the "South Georgia Energy Authority," which shall be a political subdivision of the State of Georgia, an instrumentality of the State of Georgia, and a public corporation performing an essential government function, and by that name, style, and title such body may contract and be contracted with, sue and be sued, implead and be impleaded, and complain and defend in all courts of law and equity. The Authority, however, shall not be a State institution nor a department or agency of the State but shall be an instrumentality of the State, a mere creature of the State, being a distinct corporate entity and being exempt from Article 2 of O.C.G.A. 50-17. The Authority shall have perpetual existence. All property owned by such corporation shall be public property held and owned for governmental purposes and shall be exempt from taxation as provided by law.

SECTION 3.

Definitions.

As used in this Act, the following words and terms shall have the following meanings unless the context clearly indicates otherwise:

(1) "Authority" means the South Georgia Energy Authority created in this Act.

(2) "Cities" means, collectively, the City of Ashburn, Georgia, the City of Douglas, Georgia, the City of Fitzgerald, Georgia, the City of Ocilla, Georgia, and the City of Tifton, Georgia.

(3) "Cost of the project" or "cost of construction" means all costs of construction; all costs of real and personal property required for the purpose of such project and facilities related thereto, including land and any leases, rights or undivided interests therein, easements, franchises, water rights, fees, permits, approvals, licenses, and certificates, and the securing of such permits, approvals, licenses, and certificates and the preparation of applications therefor, and including all machinery and equipment, including equipment for use in connection with such construction; financing charges; working capital; interest prior to and during construction and during such additional period as the Authority may determine; operating expenses during such period as the Authority may determine; costs of engineering, architectural, and legal services; costs of plans and specifications and all expenses necessary or incidental to determining the feasibility or practicability of the project; costs of insurance or of self-insuring any project; administrative expenses; amounts payable under any judgment against the Authority; disposal costs; all costs associated with acquiring contract rights or other contractual arrangements for the short-term or long-term provisions of gas supplies, including reserves, transmission, storage, peaking, or other services associated therewith, including prepayments for such; and such other expenses as may be necessary or incidental to the financing herein authorized. All funds paid or advanced for any of the purposes mentioned in this paragraph by political subdivisions contracting with the Authority prior to the issuance of any of the Authority's bonds or notes may be refunded to such political subdivisions out of the proceeds of any bonds or notes so issued. The costs of any project may also include a fund or funds for the creation of a debt service reserve, a renewal and replacement reserve, and such other reserves as may be reasonably required by the Authority for the operation of its projects and as may be authorized by any bond resolution or trust agreement or indenture pursuant to the provisions of which the issuance of any such bonds may be authorized. Any obligation or expense incurred for any of the purposes mentioned in this paragraph shall be regarded as a part of the cost of the project and may be paid or reimbursed as such out of the proceeds of revenue bonds or notes issued under the provision of this Act for such project. The term "cost of the project" is intended to include all costs associated with acquiring contract rights or other contractual arrangements for the short-term or long-term provision of gas supplies, including reserves, transmission, storage, peaking, or other services associated therewith, including prepayments for such and any hedging or similar agreements.

(4) "Gas" means either natural or synthetic gas, including propane, manufactured, methane from coal beds, geothermal gas, or any mixture thereof, whether in gaseous or liquid form, or any byproduct resulting therefrom.

(5) "Project," "undertaking," or "facility" means any plant, works, system, facility, and real and personal property of any nature whatsoever, together with all parts thereof and appurtenances hereto, and any contract rights, relating to the storage, acquisition, exploration, production, distribution, enrichment, transmission, purchase, sale, exchange, or interchange of gas and relating to the acquisition, extraction, conversion, transportation, storage, or reprocessing of fuel of any kind for any such purposes, or any interest in, or right to the use, services, enrichment, output, or capacity of any such plant, works, system, or facilities so as to assure an adequate natural gas distribution or transmission system deemed by the Authority necessary or convenient for the efficient operation of such type of project or undertaking. "Project" or "undertaking" as used in this paragraph is intended to include acquiring contract rights and other contractual arrangements for the short-term or long-term provision of gas supplies, as well as tangible property.

(6) "Revenue bonds" and "bonds," as used in this Act, means revenue bonds as defined and provided for in Article 3 of Chapter 82 of Title 36 of the O.C.G.A., known as the "Revenue Bond Law," as amended, and such type of obligations may be issued by the Authority as authorized under the "Revenue Bond Law" and, in addition, shall also mean obligations of the Authority, the issuance of which are hereinafter specifically provided for in this Act.

(7) "State" means the State of Georgia.

SECTION 4.

Purpose.

Without limiting the generality of any provisions of this Act, the general purpose of the Authority is declared to be that of effecting projects that benefit the Cities, including, without limitation, acquiring an adequate source or sources of natural gas and thereafter the transmission and distribution of same to the natural gas utilities of the Cities; but such general purpose shall not restrict the Authority from selling and delivering natural gas directly to consumers in those areas regardless of whether any county or any municipality deems it desirable or feasible to furnish natural gas.

SECTION 5.

Members.

(a) The Authority shall be governed by a board that shall consist of eight members, who shall be determined and selected as follows:

(1) The Mayor or a person appointed by the Mayor of the City of Ashburn, Georgia;

(2) The Mayor or a person appointed by the Mayor of the City of Douglas, Georgia;

(3) The Mayor or a person appointed by the Mayor of the City of Fitzgerald, Georgia;

(4) The Mayor or a person appointed by the Mayor of the City of Ocilla, Georgia;

(5) The Mayor or a person appointed by the Mayor of the City of Tifton, Georgia; and

(6) Three members appointed by majority vote of the members provided for by paragraphs (1) through (5) of this subsection, provided that any person appointed pursuant to this paragraph shall have at least three years of experience in the field of economic development.

(b)(1) If a member appointed pursuant to paragraphs (1) through (5) of subsection (a) of this section is a mayoral appointee, such member shall serve at the pleasure of his or her appointing authority and each appointing authority shall have the right and authority to remove its appointee from the Authority and to appoint replacements as may be required to fill vacancies.

(2) The members appointed pursuant to paragraph (6) of subsection (a) of this section may be removed at any time by majority vote of the remaining board members. The members appointed pursuant to paragraphs (1) through (5) of this subsection shall appoint a qualified person to fill any vacancy created pursuant to this paragraph.

(c) The terms of members of the Authority who are serving by nature of being a mayor of one of the Cities shall be concurrent with the elected terms of office of such mayor. The terms of members of the Authority who are serving as appointees of a mayor or pursuant to paragraph (6) of subsection (a) of this section shall be four years from the date of such member's appointment.

(d) No person shall hold the office of the Authority member if that person is ineligible for such office pursuant to O.C.G.A. § 45-2-1 or any other general law.

(e) Five members of the Authority shall constitute a quorum, and no vacancy on the Authority shall impair the right of the quorum to exercise all the rights and perform all the duties of the Authority and, in every instance, a majority vote of a quorum shall authorize any legal act of the Authority, including all things necessary to authorize and issue revenue bonds.

(f) The Authority shall elect one of its members as chairman and another as vice chairman, and shall elect a secretary-treasurer and an assistant secretary-treasurer, each of whom shall be elected from the membership of the Authority. Such officers shall serve for such terms as shall be prescribed by the resolution of the Authority or until their successors are elected and qualified.

(g) The members of the Authority shall serve without compensation; provided, however, that the members shall be reimbursed for all actual, reasonable, and necessary expenses incurred in the performance of their duties. No reimbursement or payment shall be made by the Authority for travel, meal, or entertainment expenses for members of the Authority unless on each occasion the incurring of such expenses for the same are approved in advance by the Authority at one of its public meetings.

SECTION 6.

General powers.

The Authority shall have all the powers necessary or convenient to carry out and effectuate the purpose and provisions of this Act, including, but without limiting the generality of the foregoing, the power:

(1) To provide natural gas transmission and distribution services to the natural gas utilities of the Cities;

(2) To sue and be sued and to complain and defend in all courts of law and equity;

(3) To have a seal and alter the same at pleasure;

(4) To acquire by purchase, lease, or otherwise, and to hold, lease, and dispose of real and personal property of every kind and character for its corporate purposes;

(5) To acquire in its own name by purchase, on such terms and conditions and in such manner as it may deem proper, or by condemnation in accordance with the provisions of any and all existing laws applicable to the condemnation of property for public use, real property or rights of easements therein or franchises necessary or convenient for its corporate purposes, and to use the same so long as its corporate existence shall continue and to lease or make contracts with respect to the use of or dispose of the same in any manner it deems to the best advantage of the Authority, the Authority being under no obligation to accept and pay for any property condemned under this Act except from the funds provided under the authority of this Act, and in any proceedings to condemn, such orders may be made by the court having jurisdiction of the suit, action or proceedings as may be just to the Authority and to the owners of the property to be condemned, and no property shall be acquired under the provision of this Act on which any lien or other encumbrance exists, unless at the time such property is so acquired a sufficient sum of money be deposited in trust to pay and redeem the fair value of such lien or encumbrance;

(6) To appoint, select, and employ officers, agents, and employees, including engineering, architectural, and construction experts, fiscal agents, and attorneys, and fix their respective compensations;

(7) To make contracts and leases and to execute all instruments necessary or convenient, including contracts for construction of projects and leases of projects or contracts with respect to the use of projects which it causes to be erected or acquired, and any and all persons, firms, and corporations and any and all political subdivisions, departments, institutions, or agencies of the State are hereby authorized to enter into contracts, leases, or agreements with the Authority upon such terms and for such purposes as they deem advisable; and without limiting the generality of the above, the authority is specifically granted to municipal corporations and counties and to the Authority to enter into contracts, lease agreements, or other undertakings relative to the furnishing of natural gas and related services and facilities by the Authority to such municipal corporations and counties for a term not exceeding 50 years. This power includes the making of contracts for the construction of projects, which contracts for construction may be made either as sole owner of the project or as owner, in common with other public or private persons, of any divided or undivided interest therein; and is further intended to include, without limitation, the making of contracts for the purchase, sale, exchange, interchange, pooling, transmission, distribution, or storage of gas and fuel of any kind for any such purposes, inside and outside the State of Georgia, in such amounts as it shall determine to be necessary and appropriate to make the most effective use of its powers and to meet its responsibilities, on such terms and for such period of time, not exceeding 50 years, as the Authority shall determine; and is further intended to include, without limitation, the making of contracts for furnishing gas supply, development services, and management services to political subdivisions contracting with the Authority;

(8) To construct, erect, acquire, own, repair, remodel, maintain, add to, extend, improve, equip, operate, and manage projects, as hereinabove defined; the cost of any such project to be paid in whole or in part from the proceeds of revenue bonds of the Authority or from such proceeds and any grant from the United States of America or any agency or instrumentality thereof;

(9) To accept, receive, and administer gifts, grants, appropriations, donations of money, materials, and property of any kind, including loans and grants from the United States of America or the State of Georgia or any agency or instrumentality thereof, upon such terms and conditions as the United States of America, the State of Georgia, or such agency or instrumentality may impose;

(10) To borrow money for any of its corporate purposes and to issue revenue bonds as hereinafter provided in evidence of its indebtedness incurred with respect to the powers above described payable from the revenues, receipts, and earnings of the projects of the Authority and other available funds thereof; to execute trust agreements or indentures; to sell, convey, pledge, and assign any and all of its funds, assets, property, and income as security for the payment of such revenue bonds and to provide payment of the same and for the rights of the owners thereof;

(11) To invest any accumulation of its funds and any sinking funds or reserves in any manner that public funds of the State of Georgia or its political subdivisions may be invested and to purchase its own bonds and notes; and

(12) To do any and all things necessary or proper for the accomplishment of the objectives of this Act and any amendments hereto and to exercise any power usually possessed by private corporations performing similar functions which is not in conflict with the Constitution and laws of this State, including employment of professional and administrative staff and personnel and retaining of legal, engineering, and other professional services, the purchasing of all kinds of insurance including, without limitation, insurance against tort liability and against risks of damage to property, including the power to borrow money for any of the corporate purposes of the Authority; provided, however, that obligations of the Authority other than revenue bonds, for which provision is herein made, shall be payable from the general funds of the Authority and shall not be a charge against any special fund allocated to the payment of revenue bonds, and including the power to indemnify and hold harmless any parties contracting with the Authority or its agents from damage to person or property and the power to act as self-insurer with respect to any loss or liability.

SECTION 7.

Revenue bonds.

The Authority shall have power and is authorized, pursuant to the Revenue Bond Law, to provide by resolution for the issuance of revenue bonds of the Authority for the purpose of paying all or any part of the costs of a project and for the purpose of refunding revenue bonds or other obligations previously issued. Revenue bonds shall be undertaken, issued, priced, validated, sold, paid, redeemed, refunded, secured, and replaced in accordance with the provisions of the Revenue Bond Law. The principal of and interest on such revenue bonds shall be payable solely from such part of the revenues and earnings of a project or projects as may be designated in the resolution of the Authority authorizing the issuance of such revenue bonds.

SECTION 8.

Revenue bonds; conditions precedent to issuance.

The Authority shall adopt a resolution authorizing the issuance of the revenue bonds. In the resolution, the Authority may determine that the project financed with the proceeds of such revenue bonds is self-liquidating. Revenue bonds may be issued without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions, and things which are specified or required by this Act. Any resolution providing for the issuance of revenue bonds under the provisions of this Act shall become effective immediately upon its passage and need not be published or posted, and any such resolution may be passed at any regular, special, or adjourned meeting of the Authority by a majority of its members present and voting.

SECTION 9.

Credit not pledged.

Neither the revenue bonds nor notes issued under provisions of this Act nor the instruments evidencing the obligations which constitute the security therefor shall constitute a debt or a loan or pledge of the faith and credit of the State of Georgia or of any political subdivision thereof, other than the Authority, but such bonds and notes shall be payable from the revenues of the Authority as provided in the resolutions or trust agreements or indentures authorizing or securing the issuance and payment of such bonds or notes. The issuance of such bonds or notes shall not obligate the State or any political subdivision thereof, other than the Authority, nor shall any such bond or note constitute a charge, lien, or encumbrance, legal or equitable, upon any such property. Notwithstanding the foregoing provisions, this Act shall not affect the ability of the Authority and a political subdivision or municipal corporation of the State from entering into an intergovernmental contract pursuant to which the political subdivision or municipal corporation agrees to pay amounts sufficient to pay operating charges and other costs of the Authority or any project, including, without limitation, the principal of and interest on revenue bonds, in consideration for services or facilities of the Authority.

SECTION 10.

Revenue bonds; trust indenture as security.

In the discretion of the Authority, any issue of revenue bonds may be secured by a trust agreement or indenture made by the Authority with a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the State. Such trust agreement or indenture may pledge or assign all revenues, receipts, and earnings to be received by the Authority and any proceeds which may be derived from the disposition of any real or personal property of the Authority or proceeds of insurance carried thereon. The resolution providing for the issuance of revenue bonds and such trust agreement or indenture may contain provisions for protecting and enforcing the rights and remedies of the bond owners, including the right of appointment of a receiver upon default in the payment of any principal or interest obligation and the right of any receiver or trustee to enforce collection of contractual rights, rates, fees, tolls, charges, or revenues for the use of the services or facilities of the project necessary to pay all costs of operation and all reserves provided for, the principal of and interest on all bonds in the issue, all costs of collection, and all other costs reasonably necessary to accomplish the collection of such sums in the event of any default of the Authority. Such resolution and trust agreement or indenture may include covenants setting forth the duties of the Authority in relation to the acquisition of property for and construction of the project and to the custody, safeguarding, and application of all funds of the Authority, including any proceeds derived from the disposition of any real or personal property of the Authority or proceeds of insurance carried thereon, and covenants providing for the operation, maintenance, repair, and insurance of the project and may contain provisions concerning the conditions, if any, upon which additional bonds may be issued. Such resolution and trust agreement or indenture may set forth the rights and remedies of the bond owners and of the trustee and may restrict the individual right of action of any bond owner as is customary in securing bonds and debentures of corporations and may contain such other provisions as the Authority may deem reasonable and proper for the security of the bond owners. All expenses incurred in carrying out such trust may be treated as part of the cost of maintenance, operation, and repair of the project affected by such trust.

SECTION 11.

Revenue bonds; interest rate or rates; negotiability; exemption from taxes. All revenue bonds shall have and are hereby declared to have all the qualities and incidents of negotiable instruments under the laws of the State. The interest rate or rates to be borne by any revenue bonds or other obligations of the Authority shall be fixed by the board of the Authority. Any limitations with respect to interest rates found in Article 3 of Chapter 82 of Title 36 of the O.C.G.A. or the usury laws of this State shall not apply to revenue bonds issued under this Act. All revenue bonds, their transfer, and the income therefrom shall be exempt from all taxation within the State.

SECTION 12.

Trust indenture as security; remedies of bondholders.

Any owner of revenue bonds and the trustee under the trust indenture, if any, except to the extent that the rights given herein may be restricted by resolution passed before the issuance of the revenue bonds or by the trust indenture, may, either at law or in equity, by suit, action, mandamus, or other proceedings, protect and enforce any and all rights it may have under the laws of the State, including specifically, but without limitation, the Revenue Bond Law, or granted hereunder or under such resolution or trust indenture and may enforce and compel performance of all duties required by this Act or by such resolution or trust indenture to be performed by the Authority or any officer thereof, including the fixing, charging, and collecting of revenues, fees, tolls, fines, and other charges for the use of the facilities and services furnished, and the enforcement of any contract.

SECTION 13.

To whom proceeds of bonds shall be paid.

In the resolution providing for the issuance of revenue bonds or in the trust indenture, the Authority shall provide for the payment of the proceeds of the sale of the revenue bonds to any officer or person who, or any agency, bank, or trust company which, shall act as trustee of such funds and shall hold and apply the same to the purposes thereof, subject to such regulations as this Act and such resolution or trust indenture may provide.

SECTION 14.

Sinking fund.

All or any part of the gross or net revenues and earnings derived from any particular project or projects and any and all revenues and earnings received by the Authority, regardless of whether or not such revenues and earnings were produced by a particular project for which bonds have been issued, may be pledged by the Authority to the payment of the principal of and interest on revenue bonds of the Authority as may be provided in any resolution authorizing the issuance of such bonds or in any trust instrument pertaining to such bonds. Such funds so pledged, from whatever source received, may include funds received from one or more or all sources and may be set aside at regular intervals into a sinking fund for which provision may be made in any such resolution or trust instrument, which sinking funds may be pledged to and charged with the payment of:

(1) The interest upon such revenue bonds as such interest shall become due;

(2) The principal of the bonds as the same shall mature;

(3) The necessary charges of any trustee or paying agent or registrar for such bonds; and

(4) Any premium upon bonds retired upon call or purchase.

The use and disposition of any sinking fund may be subject to such regulations for which provisions may be made in the resolution authorizing the issuance of the bonds or in the trust instrument or indenture, but, except as may otherwise be provided in such resolution or trust instrument or indenture, such sinking fund shall be maintained as a trust account for the benefit of all revenue bonds without distinction or priority of one over another.

SECTION 15.

Interest of bondholders protected.

While any of the bonds or notes issued by the Authority shall remain outstanding, the powers, duties, or existence of the Authority or its officers, employees, or agents shall not be diminished or impaired in any manner that will affect adversely the interests and rights of the owners of such bonds or notes; and no other entity, department, agency, or authority shall be created to compete with the Authority so as to affect adversely the interests and rights of the owners of such bonds or notes. The provisions of this Act shall be for the benefit of the Authority and every owner of the Authority's bonds and notes and, upon and after the issuance of bonds or notes under the provisions of this Act, shall constitute an irrevocable contract by the Authority with the owners of such bonds and notes.

SECTION 16.

Funds received considered trust funds.

All funds received pursuant to the authority of this Act, whether as proceeds from the sale of revenue bonds or as contractual payments, revenues, fees, tolls, charges, or other earnings or as gifts, grants, or other contributions, shall be deemed to be trust funds to be held and applied solely as provided in this Act. The bond owners are entitled to receive the benefits of such funds until applied as provided in any such resolution, trust agreement, or indenture of the Authority.

SECTION 17.

Venue; jurisdiction; service.

The principal office of the Authority shall be in Coffee County, Georgia, and unless otherwise provided in general law, the venue of any action against it shall be in Coffee County. Any action pertaining to the validation of any bonds issued under the provisions of this Act or the validation of any contract entered into by the Authority shall be brought by the district attorney of Coffee County, a complaint directed to the Superior Court of Coffee County in the name of the State and against the Authority in the Superior Court of Coffee County, and such court shall have exclusive original jurisdiction of such actions. Service upon the Authority of any process, subpoena, or summons shall be effected by serving the same personally upon any officer of the Authority.

SECTION 18.

Imposition of rates, charges, fees, pledge of revenues, and exemption from regulation by the Georgia Public Service Commission.

The Authority is hereby authorized to prescribe, fix, and collect rates, fees, tolls, or charges, and to revise from time to time and collect such rates, fees, tolls, or charges for the services, facilities, or commodities furnished, and is authorized to enter into contracts relating to the provision of gas supplies including any hedging or similar agreements, and in anticipation of the collection of the revenues of such undertaking or project, to issue revenue bonds as herein provided to finance in whole or in part the cost of the acquisition, construction, reconstruction, improvement, betterment, or extension of any project and the provision of gas supplies including any hedging or similar agreements, and to pledge to the punctual payment of said bonds and interest thereon, all or any part of the revenues of such undertaking or project, including the revenues of improvements, betterments, or extensions thereto thereafter made and contractual payments. The Authority shall be exempt from regulation by the Georgia Public Service Commission to the same extent as a municipality and will be treated in all respects like a municipality for purposes of law or regulation related directly to natural gas transmission and distribution facilities and service.

SECTION 19.

Tax exemption of Authority properties.

The properties of the Authority, both real and personal, are declared to be public properties used for the benefit and welfare of the people of the State of Georgia, and not for purposes of private or corporate benefit and income, and such properties and the Authority as provided by general law shall be exempt from all taxes and special assessments of any city, county, or the State or any political subdivision thereof.

SECTION 20.

Immunity from tort actions.

To the extent permitted by law, the Authority shall have the same immunity and exemption from liability for torts and negligence as a municipality; and the officers, agents, and employees of the Authority when in the performance of the work of the Authority shall have the same immunity and exemption from liability for torts and negligence as the officers, agents, and employees of a municipality when in the performance of their public duties or work of the municipality.

SECTION 21.

Contracts.

The Authority may be sued the same as any private corporations on any contractual obligation of the Authority, so long as the contractual obligation is set forth in a writing, approved by the board of the Authority during a meeting, and entered into the minutes of the board.

SECTION 22.

Property not subject to levy and sale.

The property of the Authority shall not be subject to levy and sale under legal process.

SECTION 23.

Powers declared supplemental and additional.

This Act shall be deemed to provide an additional and alternative method of carrying out the duties authorized hereby, shall be regarded as supplemental and additional to powers conferred to the Cities by other laws, and shall not be regarded as being in derogation of any powers now existing.

SECTION 24.

Authority without taxing power.

The Authority shall not have the power to levy, impose, or collect any tax on any person or property.

SECTION 25.

Liberal construction of Act.

This Act, being for the welfare of various political subdivisions of the State and its inhabitants, shall be liberally construed to effect the purposes hereof.

SECTION 26.

Severability; effect of partial invalidity of Act.

The provisions of this Act are severable, and if any of its provisions shall be held unconstitutional by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions.

SECTION 27.

General repealer.

All laws and parts of laws in conflict with this Act are repealed.