Bill Would End Bond Shell Corporations

WINNSBORO – In the wake of the controversial $24 million bond ordinance, passed by Fairfield County Council in 2013 and issued through a legal shell corporation to avoid exceeding the County’s 8 percent debt limit, State Sen. Creighton Coleman (D-17) last month introduced a bill in the General Assembly to end such practices.

The bill (S.143), which was pre-filed in December and officially introduced on Jan. 13, would “prohibit a governmental entity from entering into a contract in which installment payments (on a bond) are to be paid by a governmental entity to a nonprofit corporation, political subdivision, or any other entity in order to finance the acquisition, construction, renovation, or repair of any asset,” the bill states.

It was by just such a method, through the Fairfield Facilities Corporation, that Fairfield County managed to acquire the 2013 bond.

“What I’m trying to accomplish is, what happened with Fairfield County Council and them approving bonds that exceeded that 8 percent limit and nobody knew about in the county,” Coleman said. “That’s what I’m trying to fix. At least at a minimum they’ve got to publish what they’re doing. This is such convoluted and complex stuff, if they publish it, they’ve got to publish it where people can understand it.”

Coleman is not the first legislator to tackle Installment Purchase Revenue Bonds (IPRBs). In 2013, State Rep. F. Gregory Delleney Jr. (R-43), Chairman of the House Judiciary Committee, sponsored House Bill 3105 to end IPRB financing.

“The people should be able to vote on a bond referendum of that magnitude,” Delleney told The Voice last year.

While Coleman said his bill was somewhat different from the Delleney bill, which never made it out of the Ways and Means Committee, he said it probably had about the same chances of passing as Delleney’s effort.

“I had a subcommittee meeting this morning, and I’m telling you the Municipal Association was there, the Association of Counties was there,” Coleman said. “They’re all opposing this.”

S.143 is currently in the Senate’s Committee on Finance.

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