FISCAL NOTE

Date Requested: January 28, 2020
Time Requested: 11:34 AM
Agency: Parkways Authority, WV
CBD Number: Version: Bill Number: Resolution Number:
1642 Introduced HB4561
CBD Subject: Roads and Transportation


FUND(S):

Toll Road Revenues

Sources of Revenue:

Other Fund Toll Road Revenues

Legislation creates:





Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government. This bill does not affect the general revenue of the State of West Virginia. The West Virginia Turnpike is operated and maintained by the Parkways Authority with Turnpike toll revenues paid by the users of the highway. Thus, no State tax or general revenue dollars are used in the maintenance or operation of the Turnpike or in paying debt service on Turnpike bonds issued by the Authority.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years. See Fiscal Note Summary above for information regarding the fiscal impact of this bill on the State of West Virginia.



Memorandum


Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form. The following contains the Authority’s concerns with the amendment contained within this Bill. • On August 14, 2018, the West Virginia Parkways Authority (the “Authority”) issued its $166,370,000 Senior Lien Turnpike Toll Revenue Bonds, Series 2018 (the “Bonds”) in connection with the Roads to Prosperity highway program. The Bonds are secured by and payable solely from net toll road revenues. • In connection with the issuance of the Bonds, the Authority and United Bank, as Trustee, entered into a Master Trust Indenture dated August 1, 2018 (the “Master Trust Indenture”), containing a number of contractual obligations for the benefit and protection of the holders of the Bonds. • These contractual obligations of the Authority for the benefit and protection of the holders of the Bonds are also very important to the rating agencies that rated the Bonds, and any violation, erosion or impairment of any of these contractual obligations and protections may be viewed negatively by the rating agencies. Any negative rating action would likely have a material impact on existing holders of the Bonds and could negatively impact the Authority’s future borrowing costs and reduce its future bonding capacity, potentially by millions of dollars. • The Bonds were approved and issued under existing West Virginia law, which vests sole legal authority to set tolls, rents, fees and other charges in the Authority, and the independence of the Authority on such matters is an issue of significant importance to rating agencies and holders of the Bonds. It likewise is an integral component of the contractual obligations for the benefit and protection of the holders of the Bonds. • House Bill 4561 proposes an amendment to W. Va. Code §17-16A-6(a)(8) that states, in part, “that no tolls or fees may be charged to law enforcement and emergency vehicles, including, but not limited to, on-duty police officers or troopers, ambulances, fire trucks and round trip medical transports for use of the turnpike”. • As proposed, House Bill 4561 expands free passage beyond the express text and intent of the restrictive covenants set forth in the Master Trust Indenture and would violate and likely materially impair the Authority’s contractual obligations for the benefit and protection of the holders of the Bonds. • In effect, passage of House Bill 4561 would put the Authority in the untenable position of having to choose between (i) violating State law or (ii) violating its contractual obligations to the holders of the Bonds. • Passage of House Bill 4561 would violate the (i) United States Constitution, Article I, Section 10 prohibiting the impairment of contracts, stating in relevant part that “[n]o State shall . . . pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts . . .” and (ii) West Virginia Constitution, Article III, Section 4 prohibiting laws that would impair existing contracts, stating in relevant part that “[n]o bill of attainder, ex post facto law, or law impairing the obligation of a contract, shall be passed.” While we can appreciate the well-intentioned purpose of House Bill 4561, we are legally compelled under the circumstances to oppose its passage for the foregoing reasons.



    Person submitting Fiscal Note: Robin Shamblin
    Email Address: rshamblin@wvturnpike.com