H. B. 2629
(By Delegates Love, J. Martin and Nichols)
[Introduced February 22, 1995; referred to the
Committee on Government Organization then Finance.]
A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article thirteen-c,
relating to the establishment of the Regional Water
Authority Act; setting forth the purpose of the Legislature
to enable public agencies to join together to secure and
provide water for resale; providing definitions; setting
forth requirements for agreements between public agencies;
authorizing public agencies to provide funds, personnel and
services to regional water authorities and authorizing
agreements between public agencies and such authorities;
establishment of the authority as a quasi-public corporation; establishing requirements for the governing
board of such authority; requiring meetings and an audit of
the authority; establishing powers of the authority;
authorizing the sale of bonds for constructing or acquiring
water supply systems; authorizing items to be included as
costs of properties; providing that the bonds may be secured
by trust indenture; requiring the establishment of a sinking
fund; establishing enforcement provisions for bondholders;
establishing a statutory mortgage lien in favor of
bondholders; providing for the requirement that the
authority establish appropriate rates and charges for the
use of services rendered; and, providing for partial
invalidity.
Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article thirteen-c, to
read as follows:
ARTICLE 13C. REGIONAL WATER AUTHORITY.
§16-13C-1. Statement of purpose.
It is the purpose of this article, to permit certain public
agencies to make the most efficient use of their powers relating
to public water supplies by enabling them to cooperate with other
public agencies on a basis of mutual advantage and thereby to
provide services and facilities to participating public agencies
and to provide for the establishment for such purpose of a
quasi-governmental public corporation which shall be known as a
regional water authority. The function of the regional water
authority shall be to secure a source of water on a scale larger
than is feasible for individual public agencies acting alone, and
to sell such water at wholesale to public service districts,
municipalities, and publicly and privately owned water utilities.
§16-13C-2. Definitions.
For the purposes of this article:
(1) The term "public agency" shall mean any municipality,
county, public service district or other political subdivision of
this state; and
(2) The term "authority" shall mean any regional water
authority organized pursuant to the provisions of this article.
§16-13C-3. Joint exercise of powers by certain public agencies;
agreements among agencies, contents; submission to
public service commission; filing of agreement.
(a) Any powers, privileges or authority of a public agency
of this state relating to public water supplies may be exercised
jointly with any other public agency of this state, or with any
agency of the United States to the extent that the laws of the
United States permit. Any agency of the state government when
acting jointly with any public or private agency may exercise all
of the powers, privileges and authority conferred by this article
upon a public agency.
(b) Any public agency may enter into agreements with one or
more other public agencies for the purpose of organizing a
regional water authority. Appropriate action by ordinance,
resolution or otherwise pursuant to law of the governing bodies
of the participating public agencies shall be necessary before
any agreement may enter into force.
(c) Any agreement shall specify the following:
(1) Its duration;
(2) The precise organization, composition and nature of the
authority created thereby together with the powers delegated
thereto;
(3) Its purpose or purposes;
(4) The manner of financing the authority and of
establishing and maintaining a budget therefor;
(5) The permissible methods for partial or complete
termination of the agreement and for disposing of property upon
partial or complete termination;
(6) The manner of acquiring, holding and disposing of real
and personal property of the authority; and
(7) Any other necessary and proper matters.
(d) Any agreement may be amended to include additional
public agencies by consent of two thirds of the signatories to
the agreement, if no terms of agreement are changed, otherwise a
new agreement with the new public agency shall be drawn. Where
fewer than three public agencies come together to form an
authority, both parties must consent to the amendment of the
agreement to include additional public agencies.
(e) Prior to taking effect, every agreement made hereunder
shall be submitted to the public service commission for its
approval as to form and as to compliance with the provisions of
this article. The public service commission's authority
hereunder is limited to the review stated in this paragraph and
it shall approve any agreement submitted hereunder unless it shall find that the agreement does not meet the conditions set
forth herein, in which case it shall detail in writing addressed
to the governing bodies of the public agencies concerned the
specific respects in which the proposed agreement fails to meet
the requirements of law. Failure to disapprove an agreement
submitted hereunder within thirty days of its submission shall
constitute approval thereof.
(f) Prior to taking effect, an agreement made hereunder
shall be filed with the clerk of the county commission of that
county wherein the authority is to be located and the agreement
then also shall be filed with the secretary of state, accompanied
by a certificate from the clerk of the county commission of the
county where filed, stating that the agreement has been filed in
the county.
§16-13C-4. Furnishing of funds, personnel or services by certain
public agencies: Agreements between public
agencies and wholesale water supply authorities
for purchase and sale of water; terms and
conditions.
Any public agency entering into an agreement pursuant to
this article may appropriate funds and may sell, lease, give or
otherwise supply to the authority created such personnel or services for the operation of the authority as may be within its
legal power to furnish. Any public agency, whether or not a
party to an agreement pursuant to this article, and any publicly
or privately owned water distribution company may enter into
contracts with any authority created pursuant to this article for
the purchase of water from the authority or the sale of water to
the authority, the treatment of water by either party and/or the
distribution or transmission of water by either party and any
authority may enter into such contracts, subject to the prior
approval of the public service commission pursuant to the
provisions of section twelve, article two of chapter twenty-four
of this code: Provided, That if the public service commission
has not acted on the proposed contract within sixty days of its
filing, the approval shall be deemed to have been granted. Any
contract may include an agreement for the purchase of water not
actually received. No contract shall be made for a period in
excess of forty years, but renewal options in favor of the
purchasing entity may be included therein. The obligations of
any public agency under any contract shall be payable solely from
the revenues produced from public agency's water system, and the
public service commission, in the case of a public agency whose rates are subject to its jurisdiction, shall permit the public
agency to recover through its rates revenues sufficient to meet
its obligations under the agreement.
§16-13C-5. Declaration of authority organization, when
quasi-governmental public corporation.
Upon the approval of the public service commission and
filing with the secretary of state, the secretary of state shall
declare the authority organized and give it the corporate name of
regional water authority number . Thereupon the authority
shall be a quasi-governmental public corporation.
§16-13C-6. Governing body; appointments; terms of members.
The governing body of the authority shall consist of:
(a) At least one and not more than two members appointed by
each participating public agency and each representative's full
term shall be not less than one year nor more than four years and
initial terms shall be staggered in accordance with procedures
set forth in the agreement provided for in section three of this
article and amendments thereto; or
(b) Not less than three persons selected by the
participating public agencies and the manner of selection of the
governing body and terms of office shall be set forth in the agreement provided for in section three of this article and
amendments thereto. The governing body of the authority shall
elect one of its members as president, one as treasurer and one
as secretary.
§16-13C-7. Meetings of governing body; annual audit.
The governing body of the authority shall meet as often as
the needs of the authority require. The governing body shall
cause to be made an annual audit of the financial records of the
authority, the cost of the audit to be paid by the authority.
§16-13C-8. Powers of governing body.
For the purpose of providing a water supply to the
participating public agencies the governing body of the authority
shall have the following powers, authorities and privileges:
(1) To accept by gift or grant from any person, firm,
corporation, trust or foundation, or from this state or any other
state or any political subdivision or municipality thereof, or
from the United States, any funds or property or any interest
therein for the uses and purposes of the authority and to hold
title thereto in trust or otherwise and to bind the authority to
apply the same according to the terms of the gift or grant;
(2) To sue and be sued;
(3) To enter into franchises, contracts and agreements with
this or any other state or the United States or any municipality,
political subdivision or authority thereof, or any of their
agencies or instrumentalities, or any public or private person,
partnership, association, or corporation of this state or of any
other state or the United States, and this state and any
municipality, political subdivision, authority, or any of their
agencies or instrumentalities, and any public or private person,
partnership, association, or corporation is hereby authorized to
enter into contracts and agreements with the authority for any
term not exceeding forty years for the planning, development,
construction, acquisition or operation of any facility or for any
service rendered to, for or by the authority;
(4) To borrow money and evidence the same by warrants,
notes, or bonds as hereinafter provided in this article, and to
refund the same by the issuance of refunding obligations;
(5) To acquire land and interests in land by gift, purchase,
exchange or eminent domain, the power of eminent domain to be
exercised within or without the boundaries of the authority in
accordance with provisions of article two, chapter fifty-four of
this code;
(6) To acquire by purchase or lease, construct, install, and
operate reservoirs, pipelines, wells, check dams, pumping
stations, water purification plants and other facilities for the
production, wholesale distribution and utilization of water and
to own and hold real and personal property as may be necessary to
carry out the purposes of its organization, subject to the
advance approval of the public service commission for any
proposed acquisition, construction, installation or operation:
Provided, That the public service commission shall act on all
proposals submitted under this paragraph within one hundred
twenty days of filing with the commission: Provided, however,
That if the public service commission has not acted within the
period of time, approval of the proposal shall be deemed granted;
(7) To have the general management, control, and supervision
of all the business, affairs, property, and facilities of the
authority, and of the construction, installation, operation, and
maintenance of authority improvements and to establish
regulations relating thereto;
(8) To hire and retain agents, employees, engineers and
attorneys and to determine their compensation. The governing
body shall select and appoint a general manager of the authority who shall serve at the pleasure of the governing body. The
general manager shall have training and experience in the
supervision and administration of water systems and shall manage
and control the water system under the general supervision of the
governing body. All employees, servants and agents of the
authority shall be under the immediate control and management of
the general manager. The general manager shall perform all other
duties as may be prescribed by the governing body and shall give
the governing body a good and sufficient surety company bond in
a sum to be set and approved by the governing body conditioned
upon the satisfactory performance of the general manager's
duties. The governing body may also require that any other
employees be bonded in an amount as it shall determine. The cost
of the bonds shall be paid out of the funds of the authority;
(9) To adopt and amend rules not in conflict with the
Constitution and laws of this state, necessary for the carrying
on of the business, objects and affairs of the governing body and
of the authority; and
(10) To have and exercise all rights and powers necessary or
incidental to or implied from the specific powers granted herein.
The specific powers shall not be considered as a limitation upon any power necessary or appropriate to carry out the purposes of
this article.
§16-13C-9. Revenue bonds.
For constructing or acquiring any water supply system for
the authorized purposes of the authority, or necessary or
incidental thereto, and for constructing improvements and
extensions thereto, and also for reimbursing or paying the costs
and expenses of creating the authority, the governing body of any
authority is hereby authorized to borrow money from time to time
and in evidence thereof issue the revenue bonds of the authority.
The revenue bonds are hereby made a lien on the revenues produced
from the water supply system, but shall not be general
obligations of the public agencies participating in the
agreement. All revenue bonds issued under this article shall be
signed by the president of the governing body of the authority
and attested by the secretary of the governing body of the
authority and shall contain recitals stating the authority under
which the bonds are issued and that they are to be paid by the
authority from the net revenue derived from the operation of the
water supply system and not from any other fund or source and
that the bonds are negotiable and payable solely from the revenues derived from the operation of the water supply system
under control of the authority. The bonds may be issued in one
or more series, may bear the date or dates, may mature at the
time or times not exceeding forty years from their respective
dates, may bear interest at the rate or rates not exceeding
eighteen percent per annum payable at such times, may be in such
form, may carry the registration privileges, may be executed in
such manner, may be payable at the place or places, may be
subject to the terms of redemption with or without premium, may
be declared or become due before maturity date thereof, may be
authenticated in any manner, and upon compliance with the
conditions, and may contain the terms and covenants as may be
provided by resolution or resolutions of the governing body of
the authority. Notwithstanding the form or tenor thereof, and in
the absence of any express recital on the face thereof, that the
bond is nonnegotiable, all the bonds shall be, and shall be
treated as, negotiable instruments for all purposes. Bonds
bearing the signatures of officers in office on the date of the
signing thereof shall be valid and binding for all purposes
notwithstanding that before the delivery thereof any or all of
the persons whose signatures appear thereon shall have ceased to be such officers. Notwithstanding the requirements or provisions
of any other law, any bonds may be negotiated or sold in a manner
and at the time or times as is found by the governing body to be
most advantageous, and all the bonds may be sold at the price
that the interest cost of the proceeds therefrom does not exceed
nineteen percent per annum, based on the average maturity of the
bonds and computed according to standard tables of bond values.
Any resolution or resolutions providing for the issuance of the
bonds may contain the covenants and restrictions upon the
issuance of additional bonds thereafter as may be deemed
necessary or advisable for the assurance of the payment of the
bonds thereby authorized.
§16-13C-10. Items included in cost of properties.
The cost of any water supply system acquired or constructed
under the provisions of this article shall be deemed to include
the cost of the acquisition or construction thereof, the cost of
all property rights, easements and franchises deemed necessary or
convenient therefor and for the improvements and extensions
thereto; interest upon bonds prior to and during construction or
acquisition and for six months after completion of construction
or of acquisition of the improvements and extensions; engineering, fiscal agents and legal expenses; expenses for
estimates of cost and of revenues, expenses for plans,
specifications and surveys; other expenses necessary or incident
to determining the feasibility or practicability of the
enterprise, administrative expense, and other expenses as may be
necessary or incident to the financing herein authorized, and the
construction or acquisition of the properties and the placing of
same in operation, and the performance of the things herein
required or permitted, in connection with any thereof.
§16-13C-11. Bonds may be secured by trust indenture.
In the discretion and at the option of the governing body of
the authority, the bonds may be secured by a trust indenture by
and between the authority and a corporate trustee, which may be
a trust company or bank having powers of a trust company within
or without the state of West Virginia, but no trust indenture
shall convey, mortgage or create any lien upon the water supply
system or any part thereof of the authority or its member public
agencies. The resolution authorizing the bonds and fixing the
details thereof may provide that the trust indenture may contain
the provisions for protecting and enforcing the rights and
remedies of bondholders as may be reasonable and proper, not in violation of law, including covenants setting forth the duties of
the authority and the members of its governing body and officers
in relation to the construction or acquisition of water supply
system and the improvement, extension, operation, repair,
maintenance and insurance thereof, and the custody, safeguarding
and application of all moneys, and may provide that all or any
part of the construction work shall be contracted for,
constructed and paid for, under the supervision and approval of
consulting engineers employed or designated by the governing body
and satisfactory to the original bond purchasers, their
successors, assignees or nominees, who may be given the right to
require the security given by contractors and by any depository
of the proceeds of bonds or revenues of the water supply system
or other money pertaining thereto be satisfactory to the
purchasers, their successors, assignees or nominees. Such
indenture may set forth the rights and remedies of the
bondholders and the trustee.
§16-13C-12. Sinking fund for revenue bonds.
At or before the time of the issuance of any bonds under
this article the governing body of the authority shall by
resolution or in the trust indenture provide for the creation of a sinking fund and for monthly payments into the fund from the
revenues of the water supply system operated by the authority the
sums in excess of the cost of maintenance and operation of the
properties as will be sufficient to pay the accruing interest and
retire the bonds at or before the time each will respectively
become due and to establish and maintain reserves therefor. All
sums which are or should be, in accordance with the provisions,
paid into the sinking fund shall be used solely for payment of
interest and for the retirement of the bonds at or prior to
maturity as may be provided or required by the resolutions.
§16-13C-13. Collection, etc., of revenues and enforcement of
covenants; default; suit, etc., by bondholder or
trustee to compel performance of duties;
appointment and powers of receiver.
The governing body of any authority shall have power to
insert enforceable provisions in any resolution authorizing the
issuance of bonds relating to the collection, custody and
application of revenues of the authority from the operation of
the water supply system under its control and to the enforcement
of the covenants and undertakings of the authority. In the event
there shall be default in the sinking fund provisions aforesaid
or in the payment of the principal or interest on any of the bonds or, in the event the authority or its governing body or any
of its officers, agents or employees, shall fail or refuse to
comply with the provisions of this article, or shall default in
any covenant or agreement made with respect to the issuance of
the bonds or offered as security therefor, then any holder or
holders of the bonds and any trustee under the trust indenture,
if there be one, shall have the right by suit, action, mandamus
or other proceeding instituted in the circuit court for the
county or any of the counties wherein the authority extends, or
in any other court of competent jurisdiction, to enforce and
compel performance of all duties required by this article or
undertaken by the authority in connection with the issuance of
the bonds, and upon application of any holder or holders, or
trustee, the court shall, upon proof of such defaults, appoint a
receiver for the affairs of the authority and its properties,
which receiver so appointed shall forthwith directly, or by his
agents and attorneys, enter into and upon and take possession of
the affairs of the authority and each and every part thereof, and
hold, use, operate, manage and control the same, and in the name
of the authority exercise all of the rights and powers of
authority as shall be deemed expedient, and the receiver shall have power and authority to collect and receive all revenues and
apply same in the manner as the court shall direct. Whenever the
default causing the appointment of such receiver shall have been
cleared and fully discharged and all other defaults shall have
been cured, the court may in its discretion and after notice and
hearing as it deems reasonable and proper direct the receiver to
surrender possession of the affairs of the authority to its
governing body. The receiver so appointed shall have no power to
sell, assign, mortgage or otherwise dispose of any assets of the
authority except as hereinbefore provided.
§16-13C-14. Statutory mortgage lien created; foreclosure
thereof.
There shall be and is hereby created a statutory mortgage
lien upon such water supply system of the authority, which shall
exist in favor of the holders of bonds hereby authorized to be
issued, and each of them, and the coupons attached to said bonds,
and the water supply system shall remain subject to statutory
mortgage lien until payment in full of all principal of and
interest on the bonds. Any holder of the bonds, of any coupons
attached thereto, may, either at law or in equity, enforce said
statutory mortgage lien conferred hereby and upon default in the payment of the principal of or interest on bonds, may foreclose
the statutory mortgage lien in the manner now provided by the
laws of the state of West Virginia for the foreclosure of
mortgages on real property.
§16-13C-15. Rates and charges.
The governing body shall by appropriate resolution make
provisions for the payment of said bonds by fixing rates, fees
and charges, for the use of all services rendered by the water
authority, which rates, fees and charges shall be sufficient to
pay the costs of operation, improvement and maintenance of the
water supply system, to provide an adequate depreciation fund,
provide an adequate sinking fund to retire the bonds and pay
interest thereon when due, and to create reasonable reserves for
such purposes. Said fees, rates or charges shall be sufficient
to allow for miscellaneous and emergency or unforeseen expenses.
The resolution of the governing body authorizing the issuance of
revenue bonds may include agreements, covenants or restrictions
deemed necessary or advisable by the governing body to effect the
efficient operation of the system and to safeguard the interests
of the holders of the revenue bonds and to secure the payment of
the bonds and the interest thereon.
§16-13C-16. Invalidity of part.
If any section or sections of this article be declared
unconstitutional or invalid, this shall not invalidate any other
section of this article.
§16-13C-17. Citation of article.
This act may be known and cited as the Regional Water
Authority Act.
NOTE: The purpose of this bill is to create the Regional
Water Authority Act, to authorize public agencies to join
together to construct and acquire water sources for resale and
authorizing the issuance of bonds by such authority to fund the
projects of the authority.
This article is new; therefore, strike-throughs and
underscoring have been omitted.