This article shall be known and may be cited as the "Workers' Compensation Debt Reduction Bond Act".
The Legislature finds and declares that:
(a) The Supreme Court of Appeals has ruled that article X, section four of the Constitution does not preclude issuance of revenue bonds which are to be redeemed from a special fund.
(b) The Supreme Court of Appeals has also ruled that the Legislature may not designate funds that will be used to liquidate a bond issue out of a current tax source that flows into the General Revenue Fund.
(c) This act imposes several new taxes and provides for those taxes to be deposited in the Workers' Compensation Debt Reduction Fund created in section five of this article, which is a special account in the Treasury and is not part of the state General Revenue Fund.
(d) This act also provides for certain special revenue dollars that are not part of the state General Revenue Fund to also be deposited in the Workers' Compensation Debt Reduction Fund.
(e) This article provides for the reduction of the old fund liability of the Workers' Compensation Commission through the issuance of revenue bonds for the purpose of:
(1) Providing for the safety and soundness of the Workers' Compensation System; and
(2) Redeeming the unfunded liability of the Workers' Compensation Fund in order to realize savings over the remaining term of the amortization schedules of the unfunded actuarial accrued liabilities.
(f) The general credit of the state will not be pledged for repayment of bonds issued under this article and repayment will come from moneys that are not part of the state's General Revenue Fund.
For purposes of this article:
(a) "Old fund" means the fund created in sections two and six, article two-c of this chapter;
(b) "Workers' Compensation Commission" or "commission" means the West Virginia Workers' Compensation Commission established under article one, chapter twenty-three of this code, or any successor to all or any substantial part of its powers and duties; and
(c) "Workers' Compensation Debt Reduction Revenue Bond" means any bond or bonds issued by the Economic Development Authority pursuant to this article.
(a) Revenue bonds of the State of West Virginia are hereby authorized to be issued and sold by the West Virginia Economic Development Authority created and provided in article fifteen, chapter thirty-one of this code, solely for the paying down and elimination of the current unfunded liability of the Workers' Compensation Fund, as provided by the Constitution and the provisions of this article. The principal of, and the interest and redemption premium, if any, on the bonds shall be payable solely from the special fund provided in section six of this article for repayment.
(b) The West Virginia Economic Development Authority either in the resolution authorizing the issuance of the bonds or by the execution and delivery by the West Virginia Economic Development Authority of a trust indenture or agreement, shall stipulate the form of the bonds, whether the bonds are to be issued in one or more series, the date or dates of issue, the time or times of maturity, the rate or rates of interest payable on the bonds, which may be at fixed rates or variable rates and which interest may be current interest or may accrue, the denomination or denominations in which the bonds are issued, the conversion or registration privileges applicable to some or all of the bonds, the sources and medium of payment and place or places of payment, the terms of redemption, any privileges of exchangeability or interchangeability applicable to the bonds, and the entitlement of holders of the bonds and the providers of any agreements provided in subsection (e) of this section to priorities of payment or security in the amounts deposited in the West Virginia Workers' Compensation Debt Reduction Revenue Bond Debt Service Fund: Provided, That in no event may the amount of bonds issued pursuant to this article exceed $1,500,000,000: Provided, however, That the terms of the bonds shall not exceed thirty years from their respective issuance dates.
(c) Revenue bonds issued under this article shall state on their face that the bonds do not constitute a debt of the State of West Virginia; that payment of the bonds, interest and charges thereon cannot become an obligation of the State of West Virginia; and that the bondholders' remedies are limited in all respects to the "special revenue fund" established in this article for the liquidation of the bonds.
(d) Net proceeds from sale of these bonds shall be deposited in the Old Fund.
(e) In addition and not in limitation to the other provisions of this section, in connection with any bonds issued or expected to be issued pursuant to this article, the West Virginia Economic Development Authority may enter into: (I) Commitments to purchase or sell bonds and bond purchase or sale agreements; (ii) agreements providing for credit enhancement or liquidity, including revolving credit agreements, agreements establishing lines of credit or letters of credit, insurance contracts, surety bonds and reimbursement agreements; (iii) agreements to manage interest rate exposure and tax risk and the return on investments, including interest rate exchange agreements, interest rate cap, collar, corridor, ceiling and floor agreements, option, rate spread or similar exposure agreements, float agreements and forward agreements; (iv) stock exchange listing agreements; and (v) any other commitments, contracts or agreements approved by the West Virginia Economic Development Authority: Provided, That the provider or providers of any of the agreements set forth above may be granted the same security and lien privileges as the bondholders and upon execution of such agreements will constitute a contract between the West Virginia Economic Development Authority and the provider or providers.
(a) There is hereby created in the state Treasury a special interest bearing account known as the "Workers' Compensation Debt Reduction Fund." Funds in this account may be invested in the manner permitted by the provisions of article six, chapter twelve of this code, with interest income a proper credit to this fund.
(b) Moneys to be deposited in this account include:
(1) The amounts provided in section two, article eleven-a, chapter four of this code;
(2) The net amount of all moneys received by the Tax Commissioner from collection of the new taxes imposed by section four, article thirteen-v, chapter eleven of this code, including any interest, additions to tax, or penalties collected with respect to these taxes pursuant to article ten, chapter eleven of this code;
(3) The net amount of moneys received by the Insurance Commissioner from collection of the new premiums tax imposed by section three, article two-c of this chapter; and
(4) Moneys from racetrack video lottery net terminal income, as provided in section ten and ten-b, article twenty-two-a, chapter twenty-nine of this code.
(c) Moneys in this account are to be used and expended to reduce the Workers' Compensation debt or to pay debt service on bonds sold pursuant to this article for the purpose of reducing or paying the Workers' Compensation debt, or for any combination of both of these purposes.
(d) From the moneys deposited in this fund, there shall first be transferred each month to the debt service fund created in section six of this article sufficient amounts to provide for the timely payment of the principal, interest and redemption premium, if any, on any revenue bonds or refunding bonds issued pursuant to this article, as determined in the trust agreement or agreements. Remaining moneys shall be transferred monthly to the old fund.
When in any fiscal year ending after June 30, 2006, the state collects net severance tax on the privilege of severing, extracting, reducing to possession or producing coal for sale profit or commercial use imposed by section three, article thirteen-a, chapter eleven of the code, that is in excess of the net amount of the tax collected in fiscal year 2006, fifty percent of the difference shall be deposited in the old fund created in article two-c of this chapter. For purposes of this section, the amount of the additional severance tax on coal imposed pursuant to section six, article thirteen-a, chapter eleven of the code, collected each fiscal year for the benefit of counties and municipalities as provided in said section six, shall be excluded when determining the amount of the tax imposed by section three, article thirteen-a, chapter eleven of the code, that is collected each fiscal year from the privilege of severing, extracting, reducing to possession or producing coal for sale, profit or commercial use. The provisions of this section shall not be effective after June 30, 2009.
(a) There is hereby created a special account in the state Treasury, which shall be designated and known as the "West Virginia Workers' Compensation Debt Reduction Revenue Bond Debt Service Fund", into which shall monthly be deposited amounts from the Workers' Compensation Debt Reduction Fund necessary to pay debt service on the bonds and to provide for any coverage requirements.
(b) All amounts deposited in the fund shall be pledged to the repayment of the principal, interest and redemption premium, if any, on any revenue bonds or refunding revenue bonds authorized by this article, including any and all commercially customary and reasonable costs and expenses which may be incurred in connection with the issuance, refunding, redemption or defeasance thereof.
(c) The treasurer shall transfer monies in this fund as set forth in the trust agreement for the bonds issued under this article.
(d) A lien on the proceeds of the West Virginia Workers' Compensation debt reduction revenue bond debt service fund up to a maximum amount equal to the projected annual principal, interest and coverage ratio requirements may be granted by the economic development authority in favor of the bonds it issues secured by this fund.
The State of West Virginia covenants and agrees with the holders of the bonds issued pursuant hereto as follows: (1) That such bonds shall never constitute a direct and general obligation of the State of West Virginia; (2) that the full faith and credit of the state is not hereby pledged to secure the payment of the principal and interest of such bonds; (3) that new annual state taxes that are not and never were part of the state General Revenue Fund shall be collected in an amount sufficient to pay as it may accrue the interest on such bonds and the principal thereof; and (4) that the moneys transferred to the workers' compensation debt reduction revenue bond debt service fund as provided in this article are irrevocably set aside and dedicated to the payment of the interest on and principal of any bond becoming due and payable in such year.
All workers' compensation debt reduction revenue bonds issued pursuant to this article shall be lawful investments for banking institutions, societies for savings, building and loan associations, savings and loan associations, deposit guarantee associations, trust companies, insurance companies, including domestic for life and domestic not for life insurance companies.
Any workers' compensation debt reduction revenue bonds which are outstanding may at any time be refunded by the issuance of refunding bonds in an amount deemed necessary to refund the principal of the bonds to be refunded, together with any unpaid interest thereon; to accomplish the purpose of this article; and to pay any premiums and commissions necessary to be paid in connection therewith. Any refunding may be effected whether the workers' compensation debt reduction revenue bonds to be refunded shall have then matured or shall thereafter mature. Any refunding bonds issued pursuant to this article shall be payable from the workers' compensation debt reduction revenue bond debt service fund shall be secured in accordance with the provisions of this article.
All necessary expenses, including legal expenses, incurred in the issuance of any revenue bonds pursuant to this article shall be paid out of bond proceeds.