Opinion ID: 1339400
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: In the 1950's the South Carolina General Assembly recognized the need to link South Carolina with international markets. At that time the only practical way to export grain was through Norfolk, Virginia. In 1956, the General Assembly passed Act No. 821, Acts and Joint Resolutions, South Carolina, 1956, Regular Session, which authorized a bond issue of $10 million to construct docking facilities and provide facilities to export soybeans and other small grains. To repay the principal and interest on the bonds, this Act pledged the full faith, credit, and taxing power of the State and net revenues derived from operation of the Authority's facilities. In 1957, Act No. 821 was amended to increase the bond indebtedness to $21 million and to replace the pledge of operating revenues with a directive to the Budget and Control Board to determine annually the portion of revenues to be used toward repayment. Act No. 32, Acts and Joint Resolutions, South Carolina, 1956, Regular Session. In 1961, Act No. 821 was again amended by the General Assembly to authorize an additional $1 million bond issue for building the grain facility. Act No. 207, Acts and Joint Resolutions, South Carolina, 1961, Regular Session. The grain elevator was completed in 1962 at a cost of $2,974,818. [1] In October 1962, the Authority entered into a management agreement with the plaintiff for the operation of the grain elevator. The demand for the use of the elevator exceeded its capacity and in 1965, Act No. 821 was amended to provide an additional bond issue of $2.5 million to expand the elevator. Act No. 486, Acts and Joint Resolutions, South Carolina, 1965, Regular Session. The amendment provided for a per bushel charge on all grains passing through the elevator sufficient to repay principal and interest on the bonds. The original management agreement was then superseded by an agreement which provided for this per bushel charge. In 1965, expansion of the grain elevator was completed at a cost of $2,529,902, bringing the total cost to $5,460,020. The grain elevator was operating successfully, but the Association was losing money on the operation. [2] In 1970, Act No. 821 was again amended to eliminate the per bushel fee imposed for the use of the elevator. Section 8 of Act No. 1272, Acts and Joint Resolutions, South Carolina, 1970, Regular Session. Subsequently, the Management Agreement was modified to eliminate the per bushel fee and to provide for a fixed rent. [3] The present Management Agreement was entered into in 1977. The initial term is from 1977 to 1983 with an option to renew for fifteen years. Fixed annual rent is $60,500.00. Additionally, the Association agrees to spend $2 million on improvements, to pay all costs, charges, or rents connected with the operation of the elevator, and to maintain all machinery, the facilities, and improvements. The Association is granted complete and exclusive custody of the elevator as an independent contractor. The Association provides insurance covering damage to the equipment, bodily injury and property damage liability, and motor vehicle liability. The Authority provides insurance on the buildings and berthing facilities. The Association has spent in excess of $1.8 million to date on improvements to the state-owned facility. Neither the defendant Authority nor the State has contributed any funds for the operation of the elevator or its improvements. The only expenditure by the State has been its capital investment to build and expand the elevator. This was financed primarily by the proceeds of general obligation bonds [4] which were duly authorized by the General Assembly and the validity of which has not been questioned by the Attorney General.