ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 243
(Senators McCabe, Caruth, Plymale and Prezioso, original sponsors)
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[Passed April 10, 2009; in effect ninety days from passage.]
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AN ACT to repeal §13-1-18 of the Code of West Virginia, 1931, as
amended; and to amend and reenact §13-1-4, §13-1-14, §13-1-15,
§13-1-15a, §13-1-16, §13-1-17, §13-1-19 and §13-1-21 of said
code, all relating to updating the code for consistency with
the current practices and procedures required for issuing
general obligation bonds through competitive sale and the West
Virginia Constitution; providing that the issuer is not
required to designate the series of bonds in the election
order; providing that the bond resolution does not have to set
forth the date of issuance, the denominations of the bonds,
the medium with which the bonds are payable or the terms of
redemption; allowing issuers to establish a maximum rate of
interest in the bond resolution; allowing issuers to make
semiannual payments on principal and interest; lengthening the
time an issuer is required to begin making debt service payments by a year from the date of issuance; requiring
issuers to register bonds and eliminating reference to coupon
bonds; allowing issuers to accept electronic bids; and
allowing an issuer to publish an abbreviated sale of notice
when advertising the sale of bonds.
Be it enacted by the Legislature of West Virginia:
That §13-1-18 of the Code of West Virginia, 1931, as amended,
be repealed; and that §13-1-4, §13-1-14, §13-1-15, §13-1-15a,
§13-1-16, §13-1-17, §13-1-19 and §13-1-21 of said code be amended
and reenacted, all to read as follows:
ARTICLE 1. BOND ISSUES FOR ORIGINAL INDEBTEDNESS.
§13-1-4. Bond issue proposal to be submitted to voters; election
order.
No debt shall be contracted or bonds issued under this article
until all questions connected with the same are first submitted to
a vote of the qualified electors of the political division for
which the bonds are to be issued, and receive three fifths of all
the votes cast for and against the same:
Provided, That a county
board of education may contract indebtedness and issue bonds for
public school purposes when submitted to a vote of the people of
the county if the question of contracting indebtedness and issuing
bonds is approved by a majority of all the votes cast for and
against the same pursuant to section ten, article X of the
constitution. The governing body of any political division referred to in this article may, and when requested so to do by a
petition in writing, praying that bonds be issued and stating the
purpose and amount thereof, signed by legal voters of the political
division equal to twenty percent of the votes cast in a county for
Governor, or in a municipal corporation or school district for
mayor or member of the board of education, as the case may be,
shall, by order entered of record, direct that an election be held
for the purpose of submitting to the voters of the political
division all questions connected with the contracting of debt and
the issuing of bonds. The order shall state:
(a) The necessity for issuing the bonds or, if a petition has
been filed as provided herein, that the petition has been filed;
(b) If for the construction of a county-district road or
bridge thereon, a summary of the engineer's report provided for in
the following section setting forth the approximate extent and the
estimated cost of the proposed improvement and the kind or class of
work to be done thereon;
(c) Purpose or purposes for which the proceeds of bonds are to
be expended;
(d) Valuation of the taxable property as shown by the last
assessment thereof for state and county purposes;
(e) Indebtedness, bonded or otherwise;
(f) Amount of the proposed bond issue;
(g) Maximum term of bonds;
(h) Maximum rate of interest;
(i) Date of election;
(j) That the levying body is authorized to lay a sufficient
levy annually to provide funds for the payment of the interest upon
the bonds and the principal at maturity and the approximate rate of
levy necessary for this purpose;
(k) In the case of school bonds, that the bonds, together with
all existing bonded indebtedness, will not exceed in the aggregate
five percent of the value of the taxable property in the school
district ascertained in accordance with section eight, article X of
the constitution; and that the bonds will be payable from a direct
annual tax levied and collected in each year on all taxable
property in the school district sufficient to pay the principal and
the interest maturing on the bonds in that year, together with any
deficiencies for prior years, within, and not exceeding thirty-four
years, which tax levies will be laid separate and apart and in
addition to the maximum rates provided for tax levies by school
districts on the several classes of property in section one,
article X of the constitution, but in the same proportions as the
maximum rates are levied on the several classes of property; and
the tax may be levied outside the limits fixed by section one,
article X of the constitution.
Any other provision which does not violate any provision of
law, or transgress any principle of public policy, may be incorporated in the order.
§13-1-14. Resolution authorizing issuance and fixing terms of
bonds.
If the required amount of all the votes, pursuant to section
four of this article, cast for and against the proposition to incur
debt and issue negotiable bonds is in favor of the same, the
governing body of the political division shall, by resolution,
authorize the issuance of the bonds in an amount not exceeding the
amount stated in the proposition; establish the maximum rate or
rates of interest which the bonds shall bear within the maximum
rate stated in the proposition submitted to vote; require that the
bonds shall be made payable at the office of the Municipal Bond
Commission and at any other place or places as the body issuing the
same designates; provide for a sufficient levy to pay the annual
interest on the bonds and the principal at maturity; fix the times
within the maximum period, as contained in the proposition
submitted to vote, when the bonds shall become payable, which shall
not exceed thirty-four years from the date thereof; determine
whether all or a portion of the bonds will be subject to redemption
prior to the maturity thereof; and prescribe a form for executing
the bonds authorized.
§13-1-15. Bonds to be payable in annual or semiannual
installments.
Bonds shall be made payable in annual or semiannual installments beginning not more than three years after the date
thereof and the amount payable in each year may be so fixed that
when the annual interest is added to the principal amount to be
paid, the total amount payable in each year in which part of the
principal is payable shall be as nearly equal as practicable. Once
principal payments commence, it shall be an immaterial variance if
the difference between the largest and smallest amounts of
principal and interest payable annually or semiannually during the
term of the bonds shall not exceed five percent of the total
authorized issue. Bonds may be payable in annual or semiannual
installments beginning not more than three years after the date
thereof, each installment being as nearly equal in principal amount
as practicable.
§13-1-15a. Bonds may be subject to redemption.
All or a portion of the bonds may be subject to redemption
prior to the maturity thereof at the option of the body issuing the
same as established by resolution of the governing body authorizing
the bonds. The body issuing the bonds may not levy taxes in
connection with the redemption of any bonds in excess of the taxes
that would have been levied for the payment of principal of and
interest on the bonds in any year.
§13-1-16. Recital of certification that bonds are issued in
conformity with constitution and statutes; effect
thereof with Attorney General's endorsement.
The resolution authorizing the bonds provided for in section
fourteen of this article may direct that they contain the following
recital:
"It is certified that this bond is authorized by and is issued
in conformity with the requirements of the Constitution and
Statutes of the State of West Virginia."
The recital, when the bonds have been endorsed by the Attorney
General as provided in section twenty-eight of this article, are
considered an authorized declaration by the governing body of the
political division and to import that there is constitutional and
statutory authority for incurring the debts and issuing the bonds;
that all the proceedings therefor are regular; that all the acts,
conditions and things required to exist, happen and be performed
precedent to and in the issuance of the bonds have existed,
happened and been performed in due time, form and manner as
required by law; that the amount of the bond and the issue of which
it forms a part, together with all other indebtedness, does not
exceed any limit or limits prescribed by the constitution or
statutes of this state; and that all questions connected with
incurring the debt and issuing the bonds have been first submitted
to a vote of the people and have received the required amount
of
all the votes,
pursuant to section four of this article, cast for
and against the same at an election regularly called and held for
the purpose after notice published and posted in the manner required by law. If any bond be issued containing the recital, and
also containing the endorsement of the Attorney General as
aforesaid, it shall be conclusively presumed that the recital,
construed according to the import hereby declared, is true and
neither the political division nor any taxpayer thereof shall be
permitted to question the validity or regularity of the obligation
in any court or in any action or proceeding.
§13-1-17. Bonds shall be registered.
The bonds issued hereunder shall be issued only in fully
registered form and shall carry registration privileges as set
forth in the resolution authorizing the bonds.
§13-1-19. Signing, sealing and delivery of bonds.
All bonds issued under this article by any county shall be
signed by the president of the county commission and countersigned
by the clerk of the county commission; bonds issued by any
municipality shall be signed by the mayor or other chief executive
and countersigned by the clerk, recorder or secretary; bonds issued
by a county board of education shall be signed by the president of
the board of education and countersigned by the secretary thereof.
The seal of the political division shall be affixed to the bonds.
The delivery of any bonds so executed at any time thereafter shall
be valid, although before the date of delivery the person signing
the bonds shall have ceased to hold office.
§13-1-21. Advertisement and sale of bonds.
The governing body of the political division issuing bonds
pursuant to this article shall sell the same and collect the
proceeds, which proceeds shall be deposited with its treasurer.
The governing body of the political division shall advertise such
bonds for sale, on sealed bids or electronic bids if the governing
body elects to utilize an electronic bidding procedure, which
advertisement shall be published as a Class II legal advertisement
in compliance with the provisions of article three, chapter
fifty-nine of this code and the publication area for the
publication shall be the political division. The first publication
shall be made at least fourteen days before the date fixed for the
reception of bids. The advertisement shall also be published in
the Bond Buyer or similar publication and the advertisement may be
published electronically: Provided, That all advertisements
required by this section may consist of an abbreviated notice of
the sale of the bonds. The governing body may reject any and all
bids. If the bonds are not sold pursuant to the advertisement,
they may, within one hundred twenty days after the date advertised
for the reception of bids, be sold by the governing body at private
sale, but no private sale shall be made at a price less than the
highest bid which is received. If not sold, the bonds shall be
readvertised in the manner herein provided. In no event shall
bonds be sold for less than their par value.
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