H. B. 2570
(By Mr. Speaker (Mr. Chambers) and Delegate Burk)
(By Request of the Executive)
[Introduced March 12, 1993; referred to the
Committee on Government Organization.]
A BILL to repeal chapter five-d of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to amend
and reenact sections two, four and five, article six-a,
chapter twelve of said code; and to further amend said
article by adding thereto five new sections, designated
sections eight, nine, ten, eleven and twelve, all relating
to abolishing the public energy authority and transferring
certain of its powers to the state board of investment,
division of debt management; legislative findings;
definitions; powers and duties; exemption from taxation;
acquisition of property; savings provisions; severability;
and promulgate rules and regulations.
Be it enacted by the Legislature of West Virginia:
That chapter five-d of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be repealed; and
sections two, four and five, article six-a, chapter twelve of
said code be amended and reenacted; and that said article befurther amended by adding thereto five new sections, designated
sections eight, nine, ten, eleven and twelve, all to read as
follows:
ARTICLE 6A. THE DEBT MANAGEMENT ACT.
§12-6A-2. Legislative findings and declaration of public
necessity.
(a) The Legislature hereby finds and declares that efficient
and effective state government requires the designation of an
authority having responsibility for procuring, maintaining and
reporting pertinent information relating to the debt of the state
and its agencies, boards, commissions and authorities. In
addition to other duties and powers delegated to the state board
of investments by this article, the board shall perform the
functions and duties necessary to enable it to serve as a central
information source concerning the i?ncurrence, recording and
reporting of debt issued by the state, its agencies, boards,
commissions and authorities.
(b) The Legislature hereby finds:
(1) The credit rating and acceptance of bonds, notes,
certificates of participation and other securities and
indebtedness of the state and its spending units have been
unstable as a result of the instability in traditional national
and international markets of goods and services produced by the
citizens of the state.
(2) In order to finance essential capital projects for the
benefit of the citizens of the state at the lowest possible cost,the state must maintain high levels of acceptance of the
indebtedness of the state and its spending units in the financial
markets.
(3) In order to attain these goals, authorization of state
debt must be based on the ability of the state to meet its total
debt service requirements, in light of other uses of its fiscal
resources.
(c) The Legislature hereby further finds that the public
policies and responsibilities of the state as set forth in this
article cannot be fully attained without the creation of a state
division of debt management.
(d) The Legislature hereby finds and declares that in order
to provide the citizens of the state with efficient and effective
state government, the state shall consolidate some of its
individual bonding authorities within the West Virginia board of
investments, division of debt management, to eliminate staff
duplication and wasteful spending and to allow the state to
benefit from the economies of scale achieved from the
consolidation of such bonding authorities.
(e) The Legislature hereby further finds and declares that
the economy of the state of West Virginia needs a reliable and
dependable market for the state's coal, natural gas and other
natural resources and the by-products thereof, that the state of
West Virginia needs to encourage the efficient utilization and
disposition of by-products resultant from the production of
natural resources; with all due regard to the protection of theenvironment and husbandry of the natural resources of this state,
the health, happiness, safety, right of gainful employment and
general welfare of the citizens of this state will be promoted by
the establishment and operation of coal fired electric generating
plants and transmission facilities and the establishment and
operation of natural gas transmission projects and/or other
energy projects, and the means and measures herein authorized for
the financing, building and operation of the facilities described
in this subsection are, as a matter of public policy, for the
public purpose of the state.
§12-6A-4. Definitions.
For the purpose of this article:
"Bond" means a revenue bond, or note or other evidence of
indebtedness, including, but not limited to, a taxable bond and
commercial paper, issued by the West Virginia board of
investments, division of debt management, or by any one of its
predecessors, including the West Virginia public energy
authority, to effect the intents and purposes of this article.
"Construction" includes construction, acquisition,
reconstruction, enlargement, improvement and providing
furnishings or equipment.
"Cost," as applied to natural gas transmission projects,
electric power projects or other energy projects authorized by
the West Virginia board of investments, division of debt
management, includes, but is not limited to: The cost of their
acquisition and construction, including all costs pertaining topipelines; the cost of acquisition of all land, rights-of-way,
property rights, easements, franchise rights, contract rights,
lease rights and other rights or interests required by the West
Virginia board of investments, division of debt management, for
such acquisition and construction; the cost of demolishing or
removing any pipeline, buildings or structures on land so
acquired, including the cost of acquiring any lands to which such
pipelines, buildings or structures may be moved; the cost of
acquiring or constructing and equipping a principal office and
suboffices of the West Virginia board of investments, division of
debt management; the cost of diverting highways, interchange of
highways and access roads to private property, including the cost
of land or easements therefor; the cost of all machinery,
furnishings and equipment, all financing charges, and interest
prior to and during construction and after completion of
construction; the cost of all engineering services and all
expenses of research and development with respect to natural gas
transmission projects, electric power projects, and related
facilities; the cost of all legal services and expenses; the cost
of all plans, specifications, surveys and estimates of cost and
revenues; all working capital and other expenses necessary or
incident to determining the feasibility or practicability of
acquiring or constructing any such projects; all administrative
expenses and such other expenses as may be necessary or incident
to the acquisition or construction of any such projects; the
financing of such acquisition or construction, and the cost offinancing of the placing of any such project in operation. Any
obligation or expenses incurred after the effective date of this
article by any person, with the approval of the West Virginia
board of investments, division of debt management, for surveys,
borings, preparation of plans and specifications and other
engineering services in connection with the acquisition or
construction of a project shall be regarded as a part of the cost
of such project and shall be reimbursed out of the proceeds of
loans or bonds as authorized by the provisions of this article.
"Debt" means bonds, notes, certificates of participation,
certificate transactions, capital leases and all other forms of
securities and indebtedness.
"Division" means the West Virginia board of investments,
division of debt management.
"Electric power project" means the complex of structures,
machinery and associated equipment for the generation or
transmission of electricity including the production and
distribution of other energy produced from coal, natural gas and
by-products of coal occurring as a result of the production of
coal, and all facilities related or incidental thereto.
"Governmental agency" means the state government or any
agency, department, division or unit thereof; counties;
municipalities; public service districts; regional governmental
authorities and any other governmental agency, entity, political
subdivision, public corporation or agency; the United States
government or any agency, department, division or unit thereof;and any agency, commission or authority established pursuant to
an interstate compact or agreement.
"Natural gas transmission project" means any natural gas
pipeline and all facilities necessary or incident to the
transportation of natural gas to or for the benefit of industrial
or other end-users in West Virginia, the acquisition or
construction of which is financed, in whole or in part, by the
division or the acquisition or construction of which is financed,
in whole or in part, from funds made available by grant, loan or
any other source by, or through, the division as provided in this
article, including facilities, the acquisition or construction of
which is authorized, in whole or in part, by the division or the
acquisition or construction of which is financed, in whole or in
part, from funds made available by grant, loan or any other
source by, or through, the division as provided in this article,
including all pipelines, buildings and facilities which the
division deems necessary for the operation of the project,
together with all property, rights, easements and interests which
may be required for the operation of the project.
"Owner" includes all persons having any title or interest in
any property rights, easements and interests authorized to be
acquired by this article.
"Person" means any public or private corporation,
institution, association, firm or company organized or existing
under the laws of this or any other state or country; the United
States or the state of West Virginia; any federal or stategovernmental agency; political subdivision; county commission;
municipality; industry; public service district; partnership;
trust; estate; person or individual; and group of persons or
individuals acting individually or as a group or any other legal
entity whatever.
"Pipeline" or "pipelines" means any actual lines of pipe for
the transmission and distribution of natural gas together with
all appurtenances, facilities, structures, equipment, machinery
and other items related to the transmission and distribution of
gas through lines of pipe.
"Program" means any legislatively authorized act which
transfers authority and responsibility to the division for the
issuance, recording and supervision of debt instruments.
"Revenue" means any money or thing of value collected by, or
paid to, the division as rents, loan payments, installment
payments, or other proceeds of sale, rates, user fees, service
charges or other charges for the electric power produced by, for
the use of, for the lease, the lease with an option to purchase
or the purchase of, or in connection with any electric power
project; or as rent, use, transportation or service fee or charge
for use of, or in connection with, any natural gas transmission
project; or other money or property from any source which is
received and may be expended for or pledged as revenues pursuant
to this article.
"State" means the state of West Virginia.
"Spending unit" means any of the state's agencies, boards,commissions, committees, authorities or other of its entities
with the power to issue debt and secure such debt, and not
including local political subdivisions of the state.
§12-6A-5. Powers and duties.
The division of debt management shall perform the following
functions and duties:
(1) Develop a long-term debt plan including criteria for the
issuance of debt by the state and its spending units and the
continuous evaluation of the current and projected debt of the
state and its spending units.
(2) Evaluate cash flow projections relative to proposed and
existing revenue bond issues.
(3) Act as liaison with the Legislature on all debt matters,
including, but not limited to, new debt issues and the status of
debt issued by the state and its spending units.
(4) Assist the state and its spending units regarding the
issuance of debt if requested.
(5) Establish reporting requirements for the issuance of
debt by the state and its spending units pursuant to the
provisions of this article.
(6) Make and execute contracts and other instruments and pay
the reasonable value of services or commodities rendered to the
division pursuant to those contracts.
(7) Contract, cooperate or join with any one or more other
governments or public agencies, or with any political subdivision
of the state, or with the United States, to perform anyadministrative service, activity or undertaking which any such
contracting party is authorized by law to perform and to charge
for providing such services and expend any fees collected.
(8) Apply and effectuate the usage of any power, authority
or duty granted to the division under a particular legislative
program.
(9) Issue bonds, security interests and notes payable solely
from the revenues or funds available to the division therefor;
and the division may issue its bonds, security interests or notes
in such principal amounts as it shall deem necessary to provide
funds for any program which the division is charged with
operating.
(10) Issue bonds for the purpose of financing the cost of
acquisition and construction of one or more electric power
projects or natural gas transmission projects or any additions,
extensions or improvements thereto which will be sold, leased
with an option by the lessee to purchase, leased or otherwise
disposed of to persons other than governmental agencies or for
the purpose of loaning the proceeds thereof to persons other than
governmental agencies for the acquisition and construction of
said projects or both. Such bonds shall be issued and the
payment of such bonds secured in the manner provided by the
applicable provisions of sections seven, eight, nine, ten,
eleven, twelve, thirteen and seventeen, article two-c, chapter
thirteen of this code: Provided, That the principal and interest
on such bonds shall be payable out of the revenues derived fromthe lease, lease with an option by the lessee to purchase, sale
or other disposition of or from loan payments in connection with
the electric power project or natural gas transmission project
for which the bonds are issued, or any other revenue derived from
such electric power project or natural gas transmission project.
(11) Acquire by gift or purchase, hold and dispose of real
and personal property in the exercise of its powers and the
performance of its duties as set forth in this article.
(12) Acquire in the name of the state, by purchase or
otherwise, on such terms and in such manner as it deems proper,
or by the exercise of the right of eminent domain in the manner
provided in chapter fifty-four of this code, such real property
or parts thereof or rights therein, rights-of-way, property,
rights, easements and interests it deems necessary for carrying
out the provisions of this article, and compensation shall be
paid for public or private lands so taken; and the division may
sell any of the real property or parts thereof or rights therein,
rights-of-way, property, rights, easements and interests acquired
hereunder in such manner and upon such terms and conditions as
the division deems proper: Provided, That if the division
determines that land or an interest therein acquired by the
division through the exercise of the power of eminent domain for
the purpose of this article is no longer necessary or useful for
such purposes, and if the division desires to sell such land or
interest therein, the division shall first offer to sell such
land or interest to the owner or owners from whom it wasacquired, at a price equal to its fair market value: Provided,
however, That if the prior owner or owners shall decline to
reacquire the land or interest therein, the division shall be
authorized to dispose of such property by direct sale, auction,
or competitive bidding. In no case shall such land or an
interest therein acquired under this subdivision be sold for less
than its fair market value. This article does not authorize the
division to take or disturb property or facilities belonging to
any public utility or to a common carrier, which property or
facilities are required for the proper and convenient operation
of such public utility or common carrier, except for the
acquisition of easements or rights-of-way which will not
unreasonably interfere with the operation of the property or
facilities of such public utility or common carrier, and in the
event of the taking or disturbance of property or facilities of
public utility or common carrier, provision shall be made for the
restoration, relocation or duplication of such property or
facilities elsewhere at the sole cost of the division.
The term "real property" as used in this article is defined
to include lands, structures, franchises and interests in land,
including lands under water and riparian rights, and any and all
other things and rights usually included within the said term,
and includes also any and all interests in such property less
than full title, such as easements, rights-of-way, uses, leases,
licenses and all other incorporeal hereditaments and every
estate, interest or right, legal or equitable, including termsfor years and liens thereon by way of judgments, mortgages or
otherwise, and also all claims for damages for such real estate.
For the purposes of this section "fair market value" shall
be determined by an appraisal made by an independent person or
firm chosen by the division. The appraisal shall be performed
using the principles contained in the "Uniform Appraisal
Standards for Federal Land Acquisitions" published under the
auspices of the Interagency Land Acquisition Conference, United
States Government Printing Office, 1972.
(13) Make and enter into all contracts and agreements and
execute all instruments necessary or incidental to the
performance of its duties and the execution of its powers.
(14) Employ financial consultants, accountants, attorneys
and such other consultants as are necessary in its judgement to
carry out the provisions of this article and shall fix the fees.
All program expenses to be payable solely from the proceeds of
bonds issued by the division from the proceeds of bonds issued by
or loan payments, lease payments or other payments received by
the division, or from revenues and funds appropriated for such
purpose by the Legislature.
(15) Receive and accept from any federal agency, or any
other source, grants for or in aid of the construction of any
project or for research and development with respect to electric
power projects, natural gas transmission projects or other energy
projects, and receive and accept aid or contribution from any
source of money, property, labor or other things of value to beheld, used and applied only for the purpose for which such grants
and contributions are made.
(16) Purchase property coverage and liability insurance for
any electric power project or natural gas transmission project or
other energy project and for the principal office and suboffices
of the division, insurance protecting the division and its
officers and employees against liability, if any, for damage to
property or injury to or death of persons arising from its
operations and any other insurance which may be provided for
under a resolution authorizing the issuance of bonds or in any
trust agreement securing the same.
(17) Enter upon any lands, waters and premises in the state
for the purpose of making surveys and examinations as it may deem
necessary or convenient for the purpose of this article, and such
entry shall not be deemed a trespass, nor shall an entry for such
purposes be deemed an entry under any condemnation proceedings
which may be then pending, and the division shall make
reimbursement for any actual damages resulting to such lands,
waters and premises as a result of such activities.
(8) (18) Do all things necessary or convenient to effectuate
the intent of this article and to carry out its powers and
functions.
§12-6A-8. Exemption from taxation.
The exercise of the powers granted to the division by this
article will be in all respects for the benefit of the people of
the state, for the improvement of their health, safety,convenience and welfare and for the enhancement of their
residential, agricultural, recreational, economic, commercial and
industrial opportunities and is a public purpose. As the
ownership, operation and maintenance of natural gas transmission
projects and electric power projects and other energy projects
owned and/or operated by the division will constitute the
performance of essential governmental functions, the division
shall not be required to pay any taxes or assessments upon any
such project or upon any property acquired or used by the
division or upon the income therefrom. Natural gas transmission
projects and electric power projects and other energy projects
owned or leased by persons other than governmental agencies shall
be subject to any taxes or assessments upon any such project or
projects. Bonds issued by the division and all interest and
income thereon shall be exempt from all taxation by this state,
or any county, municipality, political subdivision or agency
thereof, except inheritance taxes: Provided, That the division
shall require a fee in substitution of any ad valorem tax
exemption to be negotiated by said division.
§12-6A-9. Acquisition of property by division -- Acquisition by
purchase, lease or eminent domain; governmental
agencies authorized to convey, etc., property; sale
of property by division.
The division may acquire by purchase, or otherwise, as
authorized by this article whenever it deems such acquisition
expedient, any land, property, rights, rights-of-way, franchises,easements, leases and other interests in lands it deems necessary
or convenient for the construction and operation of any natural
gas transmission project, any electric power project, or other
energy project.
All governmental agencies, notwithstanding any contrary
provision of law, may lease, lend, grant or convey to the
division, at its request, upon such terms as the proper
authorities of such governmental agencies deem reasonable and
fair, any real property or interest therein, including
improvements thereto or personal property which is necessary or
convenient to the effectuation of the authorized purposes of the
division, including public roads and other real property or
interests therein, including improvements thereto or personal
property already devoted to public use.
The division may sell any land, property, rights, rights-of-
way, franchises, easements, leases and other interests in land
acquired under the provisions of this section in such manner and
upon such terms and conditions as it deems proper.
§12-6A-10. Savings provisions.
All orders, determinations, rules, contracts, licenses,
bonds, authorizations and privileges which have previously been
issued, made, granted or allowed by the division, in the
performance of its former duties, shall be transferred to,
complied with and overseen by, the division.
§12-6A-11. Severability.
If any section, part, provision, subsection, subpart,subdivision, paragraph or subparagraph of this article or the
application thereof to any person or circumstance is held
unconstitutional or invalid, such unconstitutionality or
invalidity shall not affect any other section, part, provision,
subsection, subpart, subdivision, paragraph or subparagraph of
this article or its application or validity, and to this end the
provisions of this article are declared to be severable.
§12-6A-12. Promulgation of rules.
The division shall promulgate rules relating to program
enactments, debt issuance, reporting requirements and its duties
under this article and the rules shall be promulgated in
accordance with the provisions of article three, chapter twenty-
nine-a of this code.
NOTE: The purpose of this bill is to abolish the Public
Energy Authority and to transfer its bonding and eminent domain
powers to the West Virginia State Board of Investment, division
of debt management; and to consolidate the responsibilities,
duties, and powers of the Public Energy Authority with the West
Virginia State Board of Investments, division of debt management.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§§12-6A-8, 9, 10, 11 and 12 are new; therefore, strike-
throughs and underscoring have been omitted.