ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 2037
(By Mr. Speaker, Mr. Chambers, and Delegate Ashley)
[By Request of the Executive]
[Passed March 10, 1995; in effect from passage.]
AN ACT to amend and reenact sections three, nine, ten and
sixteen, article fifteen-a, chapter thirty-one of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended; and to further amend said chapter by adding thereto
a new article, designated article fifteen-b, all relating to
authorizing the sale of bonds for water, sewer and
infrastructure purposes; increasing the number of public
members of council; specifying qualifications for public
members; authorizing expenses for public members of council;
exempting economic development authority and civil
contingent fund from council review; providing for the
deposit of proceeds in the infrastructure fund derived from
the sale of bonds; providing that the fund may be operated
as a trust account in a local bank; establishing minimum
rates for loans; providing for engineering assistance
program; limiting types of engineering information required;
providing requirements for disbursement of funds by loan or
grant; setting minimum end user utility rates; providing for
disbursements to pay debt service on infrastructure general
obligation bonds; empowering the governor to issue infrastructure general obligation bonds; creating the
infrastructure obligation debt service fund; funding the
infrastructure general obligation debt service funds;
providing terms for general obligation bonds; setting forth
a cap on the interest rate of bonds; directing the use of
funds deposited in infrastructure general obligation debt
service fund; setting forth the covenants of the state;
providing for the sale of general obligation bonds and their
minimum price; prohibiting funds inuring to the benefit of
or being distributable to directors or officers; providing
that infrastructure general obligation bonds are lawful
investments; authorizing the water development authority to
issue refunding bonds; providing for the termination or
dissolution of the water development authority; allowing the
governor to select legal advisors; setting forth duties of
bond counsel; authorizing the treasurer to select financial
advisor; allowing the payment of expenses from debt service
fund.
Be it enacted by the Legislature of West Virginia:
That sections three, nine, ten and sixteen, article fifteen-
a, chapter thirty-one of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended and reenacted;
and that said chapter be further amended by adding thereto a new
article, designated article fifteen-b, all to read as follows:
ARTICLE 15A. WEST VIRIGINIA INFRASTRUCTURE AND JOBS DEVELOPMENT
COUNCIL.
§31-15A-3. West Virginia infrastructure and jobs development
council continued; members of council; staff of
council.
(a)
The West Virginia infrastructure and jobs development
council is hereby continued. The council is a governmental
instrumentality of the state. The exercise by the council of the
powers conferred by this article and the carrying out of its
purpose and duties shall be considered and held to be, and are
hereby determined to be, essential governmental functions and for
a public purpose.
(b) The council shall consist of eleven members, including
the executive director of the housing development fund or his or
her designee, the director of the division of environmental
protection or his or her designee, the director of the economic
development authority or his or her designee, the director of the
water development authority or his or her designee, the executive
director of the state development office or his or her designee,
the director of the division of health or his or her designee,
the chairman of the public service commission or his or her
designee, and four members representing the general public:
Provided, That there shall be at least one member representing
the general public from each congressional district:
Provided,
however, That after the expiration of the term of office of the
members first appointed as representatives of the general public,
no more than one member representing the general public may be a
resident of the same county. The governor shall appoint the public members of the council who shall serve three-year
staggered terms. The commissioner of the division of highways,
the executive director of the state rail authority, two members
of the West Virginia Senate, two members of the West Virginia
House of Delegates, one representative of the board of directors
of the state college system and one representative of the board
of trustees of the university of West Virginia shall serve as
advisory members of the council. The governor shall appoint the
legislative members of the council:
Provided further, That no
more than three of the legislative members may be of the same
political party. The governor shall appoint the representatives
of the governing boards from a list of three names submitted by
each governing board. The advisory members shall be ex officio,
nonvoting members of the council.
(c) The council shall annually elect one of its members as
chairman, and shall appoint a secretary, who need not be a member
of the council and who shall keep records of its proceedings.
Six members of the council shall constitute a quorum and the
affirmative vote of at least the majority of those members
present shall be necessary for any action taken by vote of the
council. No vacancy in the membership of the council impairs the
rights of a quorum by such vote to exercise all the rights and
perform all the duties of the council.
(d) No member of the council who serves by virtue of his or
her office shall receive any compensation or reimbursement of
expenses for serving as a member. The members of the council who represent the general public shall receive reimbursement for
actual expenses incurred in the service of the council.
(e) The council shall meet at least monthly to review
projects and infrastructure projects requesting funding
assistance and otherwise to conduct its business, and shall meet
more frequently if necessary. Notwithstanding any other
provision of this article to the contrary, the economic
development authority shall not be subject to council review with
regard to any action taken pursuant to the authority established
in article fifteen, chapter thirty-one of this code nor shall the
governor's civil contingent fund be subject to council review
with regard to projects or infrastructure projects funded through
the governor's civil contingent fund.
(f) The water development authority shall provide office
space for the council, and each governmental agency represented
on the council shall provide staff support for the council in the
manner determined by the council from time to time.
(g) The council shall invite to all its meetings one or more
representatives of the United States department of agriculture,
rural economic community development, the United States economic
development agency and the United States army corps of engineers
or any successors thereto. The council shall also invite such
other appropriate parties as may be necessary to effectuate the
purposes of this article.
§31-15A-9. Infrastructure fund; deposits in fund; disbursements
to provide loans, loan guarantees, grants and other assistance; loans, loan guarantees, grants
and other assistance shall be subject to
assistance agreements.
(a) The water development authority shall create and
establish a special revolving fund of moneys made available by
appropriation, grant, contribution or loan to be known as the
"West Virginia Infrastructure Fund". This fund shall be
governed, administered and accounted for by the directors,
officers and managerial staff of the water development authority
as a special purpose account separate and distinct from any other
moneys, funds or funds owned and managed by the water development
authority. The infrastructure fund shall consist of sub-accounts,
as deemed necessary by the council or the water development
authority, for the deposit of: (1) Infrastructure revenues; (2)
any appropriations, grants, gifts, contributions, loan proceeds
or other revenues received by the infrastructure fund from any
source, public or private; (3) amounts received as payments on
any loans made by the water development authority to pay for the
cost of a project or infrastructure project; (4) insurance
proceeds payable to the water development authority or the
infrastructure fund in connection with any infrastructure project
or project; (5) all income earned on moneys held in the
infrastructure fund; (6) all funds deposited in accordance with
section four of article fifteen-b; and (7) all proceeds derived
from the sale of bonds issued pursuant to article fifteen-b of
this chapter.
Any money collected pursuant to this section shall be paid
into the West Virginia infrastructure fund by the state agent or
entity charged with the collection of the same, credited to the
infrastructure fund, and used only for purposes set forth in this
article or article fifteen-b.
Amounts in the infrastructure fund shall be segregated and
administered by the water development authority separate and
apart from its other assets and programs. Amounts in the
infrastructure fund may not be transferred to any other fund or
account or used, other than indirectly, for the purposes of any
other program of the water development authority, except that the
water development authority may use funds in the infrastructure
fund to reimburse itself for any administrative costs incurred by
it and approved by the council in connection with any loan, loan
guarantee, grant or other funding assistance made by the water
development authority pursuant to this article.
(b) Notwithstanding any provision of this code to the
contrary, amounts in the infrastructure fund shall be deposited
by the water development authority in one or more banking
institutions:
Provided, That any moneys so deposited shall be
deposited in a banking institution located in this state. The
banking institution shall be selected by the water development
authority by competitive bid. Pending the disbursement of any
money from the infrastructure fund as authorized under this
section, the water development authority shall invest and
reinvest the moneys subject to the limitations set forth in article eighteen, chapter thirty-one of this code.
(c) To further accomplish the purposes and intent of this
article and article fifteen-b of this chapter, the water
development authority may pledge infrastructure revenues and from
time to time establish one or more restricted accounts within the
infrastructure fund for the purpose of providing funds to
guarantee loans for infrastructure projects or projects:
Provided, That for any fiscal year the water development
authority may not deposit into the restricted accounts more than
twenty percent of the aggregate amount of infrastructure revenues
deposited into the infrastructure fund during the fiscal year.
No loan guarantee shall be made pursuant to this article unless
recourse under the loan guarantee is limited solely to amounts in
the restricted account or accounts. No person shall have any
recourse to any restricted accounts established pursuant to this
subsection other than those persons to whom the loan guarantee or
guarantees have been made.
(d) Each loan, loan guarantee, grant or other assistance
made or provided by the water development authority shall be
evidenced by a loan, loan guarantee, grant or assistance
agreement between the water development authority and the project
sponsor to which the loan, loan guarantee, grant or assistance
shall be made or provided, which agreement shall include, without
limitation and to the extent applicable, the following
provisions:
(1) The estimated cost of the infrastructure project or project, the amount of the loan, loan guarantee or grant or the
nature of the assistance, and in the case of a loan or loan
guarantee, the terms of repayment and the security therefor, if
any;
(2) The specific purposes for which the loan or grant
proceeds shall be expended or the benefits to accrue from the
loan guarantee or other assistance, and the conditions and
procedure for disbursing loan or grant proceeds;
(3) The duties and obligations imposed regarding the
acquisition, construction, improvement or operation of the
project or infrastructure project; and
(4) The agreement of the governmental agency to comply with
all applicable federal and state laws, and all rules and
regulations issued or imposed by the water development authority
or other state, federal or local bodies regarding the
acquisition, construction, improvement or operation of the
infrastructure project or project and granting the water
development authority the right to appoint a receiver for the
project or infrastructure if the project sponsor should default
on any terms of the agreement.
(e) Any resolution of the water development authority
approving loan, loan guarantee, grant or other assistance shall
include a finding and determination that the requirements of this
section have been met.
(f) The interest rate on any loan to governmental, quasi-
governmental, or not for profit project sponsors for projects made pursuant to this article shall not exceed three percent per
annum. Due to the limited availability of funds available for
loans for projects, it is the public policy of this state to
prioritize funding needs to first meet the needs of governmental,
quasi-governmental and not for profit project sponsors and to
require that loans made to for-profit entities shall bear
interest at the current market rates. Therefore, no loan may be
made by the council to a for-profit entity at an interest rate
which is less than the current market rate at the time of the
loan agreement.
(g)
The water development authority shall cause an annual
audit to be made by an independent certified public accountant of
its books, accounts and records, with respect to the receipts,
disbursements, contracts, leases, assignments, loans, grants and
all other matters relating to the financial operation of the
infrastructure fund, including the operating of any sub-account
within the infrastructure fund. The person performing such audit
shall furnish copies of the audit report to the commissioner of
finance and administration, where they shall be placed on file
and made available for inspection by the general public. The
person performing such audit shall also furnish copies of the
audit report to the Legislature's joint committee on government
and finance.
§31-15A-10. Recommendations by council for expenditures of
funds by loan, grant or for engineering
assistance.
(a) To further accomplish the purpose and intent of this
article, the water development authority shall use the moneys in
the infrastructure fund created pursuant to section nine of this
article, upon receipt of one or more recommendations from the
council pursuant to section five of this article, to make loans,
with or without interest, loan guarantees or grants and to
provide other assistance, financial, technical or otherwise, to
finance all or part of the costs of infrastructure projects or
projects to be undertaken by a project sponsor:
Provided, That
any moneys disbursed from the infrastructure fund in the form of
grants shall not exceed twenty percent of the total funds
available for the funding of projects. No loan, loan guarantee,
grant or other assistance shall be made or provided except upon
a determination by the council that the loan, loan guarantee,
grant or other assistance and the manner in which it will be
provided are necessary or appropriate to accomplish the purposes
and intent of this article, based upon an application submitted
to the council:
Provided, however, That no grant shall be made
to a project sponsor that is not a governmental agency or a not
for profit corporation under the provisions of section 501(c) of
the Internal Revenue Code of 1986, as amended. Applications for
loans, loan guarantees, grants or other assistance may be
submitted by a project sponsor for one or more infrastructure
projects on preliminary application forms prepared by the council
pursuant to section four of this article. Any recommendation of
the council approving a loan, loan guarantee, grant or other assistance shall include a finding and determination by the
council that the requirements of this section have been met. The
council shall base any decisions to loan money for projects to
project sponsors pursuant to this article solely on the need of
the project sponsors.
(b) The council has the authority in its sole discretion
to make grants to project sponsors if it finds that: (1) The
level of rates for the users would otherwise be an unreasonable
burden given the users' likely ability to pay; or (2) the absence
of a sufficient number of users prevents funding of the project
except through grants:
Provided, That no project sponsor shall
receive infrastructure grant money in an amount in excess of
fifty percent of the total cost of the project. Therefore, the
council may consider the economic or financial conditions of the
area to be served. As a condition for receipt of a grant under
this subsection, the council may require, in addition to any
other conditions, that the applicant pursue other state or
federal grant or loan programs. Upon a recommendation by the
council, the water development authority shall provide the grant
in accordance with the recommendation. The council shall develop
criteria to be considered in making grants to project sponsors
which shall require consideration of the economic or financial
conditions of the area to be served and the availability of other
funding sources. The council shall adopt procedural rules
regarding the manner in which grants will be awarded in
conformity with this section. The procedural rules shall be adopted pursuant to article three, chapter twenty-nine-a of this
code.
(c) The council shall affix a mandatory minimum end user
utility rate that must be met by the project sponsor before grant
assistance may be awarded. The mandatory minimum utility rate
shall be established by legislative rule promulgated in
accordance with article three, chapter twenty-nine-a of this
code. The rule shall provide that the mandatory minimum utility
rate be based upon a uniform statewide percentage of the median
household income in a particular geographic area which is
rationally related to the geographic area of the project to be
served.
(d) No loan or grant funds may be made available for a
project if the project to be funded will provide subsidized
services to certain users in the service area of the project.
(e) Notwithstanding any other provision of this article to
the contrary, engineering studies and requirements imposed by the
council for preliminary applications shall not exceed those
engineering studies and requirements which are necessary for the
council to determine the economic feasibility of the project. If
the council determines that the engineering studies and
requirements for the pre-application would impose an undue
hardship on any project sponsor, the council may provide funding
assistance to project sponsors to defray the expenses of the pre-
application process from moneys available in the infrastructure
fund for making loans:
Provided, That the council may only provide funding assistance in an amount equal to five thousand
dollars or fifty percent of the total preapplication cost of the
project, whichever amount is greater. If the project is
ultimately approved for a loan by the council, the amount of
funding assistance provided to the project sponsor for the pre-
application process shall be included in the total amount of the
loan to be repaid by the project sponsor. If the project is not
ultimately approved by the council, then the amount of funding
assistance provided to the project sponsor will be considered a
grant by the council and the total amount of the assistance shall
be forgiven. In no event may the amount of funding assistance
provided to all project sponsors exceed, in the aggregate, one
hundred thousand dollars annually.
§31-15A-16. Dedication of severance tax proceeds.
(a) There shall be dedicated an annual amount from the
collections of the tax collected pursuant to article thirteen-a,
chapter eleven of this code for the construction, extension,
expansion, rehabilitation, repair and improvement of water supply
and sewage treatment systems and for the acquisition,
preparation, construction and improvement of sites for economic
development in this state as provided in this article.
(b) Notwithstanding any other provision of this code to the
contrary, beginning on the first day of July, one thousand nine
hundred ninety-five, the first sixteen million dollars of the tax
collected pursuant to article thirteen-a, chapter eleven of this
code shall be deposited to the credit of the West Virginia infrastructure general obligation debt service fund created
pursuant to section three, article fifteen-b of this chapter:
Provided, That none of the collections from the tax imposed
pursuant to section six, article thirteen-a, chapter eleven of
this code shall be so dedicated or deposited:
Provided,
however, That the portion of the tax imposed by article
thirteen-a, chapter eleven and dedicated for purposes of medicaid
and the division of forestry pursuant to section twenty-a of said
article thirteen-a shall remain dedicated for the purposes set
forth in said section twenty-a.
(c) On or before the first day of May of each year,
commencing the first day of May, one thousand nine hundred
ninety-five, the council, by resolution, shall certify to the
treasurer and the water development authority the principal and
interest coverage ratio and amount for the following fiscal year
on any infrastructure general obligation bonds issued pursuant to
the provisions of article fifteen-b of this chapter.
Article 15B. Infrastructure bonds.
§31-15B-1. Definitions.
For purposes of this article and article fifteen-a of this
chapter:
(a)"Council" means the West Virginia infrastructure and
jobs development council created in section three, article
fifteen-a of this chapter;
(b) "Infrastructure amendment" means the amendment to the
constitution of this state entitled "infrastructure amendment" as approved by referendum in the month of November, one thousand
nine hundred ninety-four;
(c) "Infrastructure general obligation bond" means any bond
or bonds issued by the state pursuant to section two of this
article;
(d) "Water development authority" means the West Virginia
water development authority established under article one,
chapter twenty-two-c of this code, or any successor to all or any
substantial part of its powers and duties.
§31-15B-2. Infrastructure general obligation bonds; amount;
when may issue.
Bonds of the state of West Virginia, under authority of the
infrastructure improvement amendment of 1994, of the par value
not to exceed in the aggregate three hundred million dollars, are
hereby authorized to be issued and sold solely for the
construction, extension, expansion, rehabilitation, repair and
improvement of water supply and sewage treatment systems and for
the acquisition, preparation, construction and improvement of
sites for economic development as provided for by the
constitution and the provisions of this article.
These bonds may be issued by the governor upon resolution by
the infrastructure council and certification to the governor.
The bonds shall bear such date and mature at such time, bear
interest at such rate not to exceed eight percent per annum, be
in such amounts, be in such denominations, be in such registered
form, carry such registration privileges, be due and payable at such time and place and in such amounts, and subject to such
terms of redemption as such resolution may provide:
Provided,
That in no event may the amount of bonds outstanding exceed an
amount for which sixteen million dollars would not be sufficient
to provide annual service on the total amount of debt
outstanding.
Both the principal and interest of the bonds shall be
payable in the lawful money of the United States of America and
the bonds and the interest thereon shall be exempt from taxation
by the state of West Virginia, or by any county, district or
municipality thereof, which fact shall appear on the face of the
bonds as part of the contract with the holder of the bond.
The bonds shall be executed on behalf of the state of West
Virginia, by the manual or facsimile signature of the treasurer
thereof, under the great seal of the state or a facsimile
thereof, and countersigned by the manual or facsimile signature
of the auditor of the state.
§31-15B-3. Creation of debt service fund; disbursements to pay
debt service on infrastructure general obligation
bonds.
There is hereby created a special account in the state
treasury, which shall be designated and known as the "West
Virginia Infrastructure General Obligation Debt Service Fund",
into which shall be deposited amounts pursuant to the provisions
of section sixteen, article fifteen-a of this chapter, as well as
any amounts appropriated by the Legislature.
§31-15B-4. Infrastructure general obligation debt service fund;
sources used to pay bonds and interest;
investment
of remainder.
All money from any and all appropriations made by the
state, all moneys transferred pursuant to the provisions of
section sixteen, article fifteen-a of this chapter and all moneys
from any other source whatsoever which is made liable by law for
the payment of the principal of such bonds or the interest
thereon shall be deposited into the infrastructure general
obligation debt service fund. Moneys shall be kept by the
treasurer in a separate account, under the designation aforesaid,
and all moneys belonging to the infrastructure general obligation
debt service fund shall be deposited in the state treasury to the
credit thereof.
This fund shall be applied by the treasurer to the payment
of the principal and interest on such bonds as shall become due
as herein provided. Any funds remaining after certification of
the amount necessary for the payment of principal and interest as
provided by section sixteen, article fifteen-a and expenses
authorized pursuant to section thirteen of this article shall be
deposited to the credit of the infrastructure fund.
§31-15B-5. Covenants of state.
The state of West Virginia covenants and agrees with the
holders of the bonds issued pursuant hereto as follows: (1) That
such bonds shall constitute a direct and general obligation of
the state of West Virginia; (2) that the full faith and credit of the state is hereby pledged to secure the payment of the
principal and interest of such bonds; (3) that an annual state
tax 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 such tax shall be levied in any year only to the extent
that the moneys transferred to the infrastructure general
obligation debt service fund as provided in section sixteen,
article fifteen-a of this chapter which are irrevocably set aside
and appropriated for and applied to the payment of the interest
on and principal of any bond becoming due and payable in such
year are insufficient therefor.
§31-15B-6. Sale by governor; minimum price.
The governor shall sell the bonds herein authorized at such
time or times as the council, by resolution, may determine
necessary to provide funds for purposes set forth in this article
and article fifteen-a of this chapter. Sales shall be at not less
than par and accrued interest.
The bonds must be offered for competitive bids from
recognized financial investment institutions before the bonds may
be sold:
Provided, That the bid process is not subject to the
provisions of article three-a, chapter five-a of this code. Any
and all of the bids may be rejected. If the bonds are not sold
pursuant to the competitive bid process, the bonds may, within
sixty days after the date the bids are received, be sold at
private sale:
Provided,
however, That no private sale shall be
made at a price less than the highest bid received.
§31-15B-7. Prohibition on funds inuring to the benefit of or
being distributable to directors or officers;
transactions between the council and West Virginia
water development authority and directors or
officers having certain interests in such
transactions.
No part of the infrastructure fund shall inure to the
benefit of or be distributable to the commissioners of the public
service commission, the council, or the West Virginia water
development authority's directors or officers. The council may
approve and the water development authority make loans and
exercise other powers as previously specified in furtherance of
their corporate purpose:
Provided, That no loans shall be made,
nor shall any property be purchased or leased from, or sold,
leased or otherwise disposed of, to any commissioner, director or
officer of the council, the public service commission or the West
Virginia water development authority.
§31-15B-8. Infrastructure bonds lawful investments.
All infrastructure 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.
§31-15B-9. Refunding bonds.
Any infrastructure general obligation 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
article fifteen-a of this chapter; and to pay any premiums and
commissions necessary to be paid in connection therewith. Any
refunding may be effected whether the infrastructure general
obligation 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 infrastructure general
obligation bond debt service fund, and shall be subject to the
provisions contained in section eleven, article fifteen-a of this
chapter and shall be secured in accordance with the provisions of
this article.
§31-15B-10. Termination or dissolution.
Upon the termination or dissolution of the West Virginia
water development authority, all rights and properties of the
West Virginia water development authority with respect to the
infrastructure fund shall pass to and be vested in the state,
subject to the rights of bondholders, lienholders and other
creditors.
§
31-15B-11. Treasurer to determine financial advisor.
The treasurer shall select a competent person or firm to
serve as financial advisor for the issuance and sale of general
obligation bonds issued pursuant to this article.
§31-15B-12. Governor to determine bond counsel.
The governor shall select a competent person or firm to
serve as bond counsel who shall be responsible for the issuance
of a final approving opinion regarding the legality of the sale
of general obligation bonds issued pursuant to this article.
Notwithstanding the provisions of article three, chapter five of
this code, bond counsel may represent the council in court,
render advice to the council and provide other legal services as
may be requested by the council regarding any bond issuance
pursuant to this article and all other matter relating to the
bond issue.
§31-15B-13. Approval and payment of all necessary expenses.
All necessary expenses, including legal expenses, incurred
in the issuance of any general obligation bonds pursuant to this
article shall be paid out of the infrastructure general
obligation debt service fund. The amount of any expenses
incurred shall be certified to the water development authority.