HB 2037 Text

H. B. 2037

(By Mr. Speaker, Mr. Chambers, and Delegate Ashley)
[By Request of the Executive]
[Introduced January 16, 1995; referred to the
Committee on Finance.]

A BILL to amend and reenact sections three, nine 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 by the water development authority for infrastructure purposes; providing definitions; providing for the deposit of proceeds in the infrastructure fund derived from the sale of state bonds; providing for disbursements to pay debt service on infrastructure general obligation and revenue bonds; empowering the West Virginia water development authority to issue infrastructure general obligation bonds, revenue bonds and refunding bonds; creating the general obligation and revenue infrastructure debt service funds, funding the general obligation and revenue infrastructure debt service funds, establishing a trustee for infrastructure revenue bondholders and the contents of trust agreements; legal remedies of infrastructure revenue bondholders or noteholders and trustees; prohibiting 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; infrastructure general obligation and revenue bonds lawful investments; purchasing and canceling notes or bonds; refunding bonds; providing that infrastructure revenue bonds or notes not debt of state, county municipality or of any political subdivision; infrastructure general obligation and revenue bonds or notes exemption from taxation; and the termination of dissolution; providing terms for general obligation bonds; providing for transfer and registration fees; setting forth a cap on the interest rate of bonds; setting forth the form of general obligation bond and coupon; requiring the listing of bonds; directing the use of funds deposited in general obligation debt service account; setting forth the covenants of the state; providing for the sale of general obligation bonds and their minimum price; providing for plates to be property of the state; making the water development authority the custodian of unsold bonds; authorizing interim certificates; allowing the council to engage financial and legal advisors; allowing the payment of expenses.

Be it enacted by the Legislature of West Virginia:
That sections three, nine 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:
§31-15A-3. West Virginia infrastructure and jobs development

council created; members of council; staff of council.

(a) There is hereby created the West Virginia infrastructure and jobs development council. The council shall be 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 ~~nine~~ 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 ~~two~~ four members representing the general public: Provided, That no more than two of the members representing the general public shall be residents of the same congressional district. 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, 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. Five 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 public members of the council shall receive reimbursement for his or her 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 it considers it necessary.
(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, the farmers home administration, the United States economic development agency and the United States army corps of engineers or any successors thereto.

§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) There is hereby created a special revenue account in the state treasury to be appropriated by the Legislature for use by the water development authority, which shall be designated and known as the "West Virginia infrastructure fund." The infrastructure fund shall consist of sub-accounts, as deemed necessary by the council, 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 sixteen of this article; and (7) all proceeds derived from the sale of state bonds issued pursuant to any resolution or act of the legislature carrying into effect the infrastructure amendment.
Any money collected from any aforesaid sources shall be paid into the state treasury by the state agent or entity charged with the collection of the same, credited to the infrastructure fund, and used only for purposes named in this article, as directed by the council.
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 may be deposited by the water development authority in one or more banking institutions located in this state and selected by the water development authority. 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, 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 such 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.

§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 fund created pursuant to section nine of this article: 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 the principal and interest coverage ratio and amount for the following fiscal year on any infrastructure general obligation bonds issued on or after the effective date of this legislation. Upon this certification, the treasurer shall transfer an amount from the infrastructure fund, as created in section nine of this article, to the infrastructure general obligation debt service account, as created in section two, 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) "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;
(b) "Infrastructure general obligation bond" means any bond of bonds issued by the state pursuant to any resolution or act of the legislature carrying into effect the "Infrastructure Amendment" to the Constitution of this State, approved by referendum in the month of November, one thousand nine hundred ninety-four;
(c) "Infrastructure revenue bond" means a revenue bond, note or other obligation issued by the West Virginia water development authority pursuant to this article, including bonds or notes to refund such bonds or renew notes, and notes issued in anticipation of and payable from the proceeds of such bonds; and
(d) "Water development authority" means the West Virginia water development authority established under article five-c, chapter twenty of this code, or any successor to all or any substantial part of its powers and duties.

§31-15B-2. West Virginia water development authority empowered to issue infrastructure revenue bonds and refunding bonds; creation of infrastructure debt service fund; funding of infrastructure debt service fund; requirements and manner of such issuance.

(a) To accomplish the purpose and intent of this article, the West Virginia water development authority is hereby empowered to issue from time to time infrastructure revenue bonds in such principal amounts as the council deems necessary to make loans, loan guarantees and grants and other forms of financial assistance to project sponsors for one or more projects: Provided, that the West Virginia water development authority may not issue any such bonds (other than refunding bonds) unless the council by resolution determines that the aggregate cost of the projects expected to be constructed during any annual period exceeds the projected annual infrastructure revenues for the same period, and principal and interest payments due the council on all outstanding loans to projects previously made by the council.
(b) The proceeds of infrastructure revenue bonds or notes shall be used solely for the purpose of making loans, loan guarantees and grants and other forms of financial assistance to project sponsors for one or more projects and shall be deposited in one or more special accounts with the trustee under the trust agreement securing such bonds or notes and disbursed from time to time for projects as determined by the council.
(c) The council may not authorize the disbursement of any proceeds of infrastructure revenue bonds unless it shall have received documentation sufficient to allow it to determine that such distribution is consistent with the purposes and intent of the article.
(d) There is hereby created a special account in the state treasury, which shall be designated and known as the "West Virginia Infrastructure Revenue Bond Debt Service Fund," into which shall be deposited the amounts certified by the executive director of the West Virginia water development authority as necessary to pay the principal, premium, if any, and interest on infrastructure revenue bonds or notes and any reserve requirements, subject to the terms of any agreement with the holders of the infrastructure bonds. All amounts deposited in the infrastructure debt service fund shall be pledged to the repayment of the principal, interest and redemption premium, if any, on any infrastructure revenue bonds or notes or refunding revenue bonds authorized by this article: Provided, That amounts on deposit in such fund may be used to establish or maintain reserves created for the purposes of securing such bonds or notes. Such pledge shall be valid and binding from the time the pledge is made, and the infrastructure debt service fund so pledged shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the West Virginia water development authority irrespective of whether such parties have notice thereof.
(e) Except as may otherwise be expressly provided in this article or by the West Virginia water development authority by resolution, every issue of infrastructure revenue bonds or notes shall be special obligations of the West Virginia water development authority payable solely from amounts in the infrastructure debt service fund and infrastructure fund, and the reserves created for such purposes by the West Virginia water development authority, without preference or priority among the bonds regardless of when issued, subject only to any agreements with the holders of any such bonds or notes to the contrary. All such bonds and notes are hereby declared to be negotiable instruments.
(f) The infrastructure revenue bonds, notes, bond anticipation notes and refunding bonds shall be authorized by resolution of the West Virginia water development authority, shall bear such date and shall mature at such time, in case of any such bond not exceeding fifty years from the date of issue, as such resolution may provide. The infrastructure revenue bonds or notes shall bear interest at such rate or rates, including variable rates, taxable or tax-exempt, be in such denominations, be in registered form, carry such registration privileges, be payable in such medium of payment, in such place and be subject to such terms of redemption as the West Virginia infrastructure revenue bonds or notes may be sold by the West Virginia water development authority at public or private sale, at the price the West Virginia water development authority determines. The bonds or notes shall be executed by the chairman or the executive director of the West Virginia water development authority who may use a facsimile signature. The official seal of the West Virginia water development authority or a facsimile thereof shall be affixed thereto or printed thereon and attested, by manual or facsimile signature by the secretary or assistant secretary of the West Virginia water development authority. If any officer whose signature, or a facsimile of whose signature appears on any bonds or notes ceases to be such officer before delivery of such bonds, such signature or facsimile is nevertheless sufficient for all purposes to the same extent as if he or she had remained in office until such delivery, and if the seal of the West Virginia water development authority has been changed after a facsimile has been imprinted on such bonds, such facsimile will continue to be sufficient for all purposes.
(g) Any resolution authorizing any infrastructure revenue bonds or notes may contain provisions (subject to such agreements with bondholders or noteholders as may then exist, which provisions shall be a part of the contract with the holder thereof) with respect to the pledge of or other use and disposition of infrastructure revenues; the setting aside of reserve funds; limitations on the purpose to which the proceeds of sale of bonds or notes may be applied; notes issued in anticipation of the issuance of bonds; the agreement of the West Virginia water development authority to do all things necessary for the authorization, issuance and sale of such bonds in such amounts as may be necessary for the timely retirement of such notes; limitations on the issuance of additional bonds or notes; the terms upon which additional bonds or notes may be issued and secured; the refunding of outstanding bonds or notes; the procedures, if any, by which the terms of any contract with bondholders or noteholders may be amended or abrogated; the amount of bonds or notes the holders of which must consent thereto and the manner in which such consent may be given; and any other matter, which in any way affects the security for or protection of the bonds or notes.
(h) In the event that the sum of all reserves pledged to the payment of such bonds or notes shall be less than the minimum reserve requirements established in any resolution or resolutions authorizing the issuance of such bonds or notes, the chairman or the executive director of the council shall certify, on or before the first day of December of each year, the amount of such deficiency to the governor of the state for inclusion, if the governor shall so elect, of the amount of such deficiency in the budget to be submitted to the next session of the Legislature for appropriation to the council to be pledged for payment of such bonds or notes: Provided, That the Legislature shall not be required to make any appropriations so requested, and the amount of such deficiencies shall not constitute a debt or liability of the state.
(i) Neither the officers or directors of the West Virginia water development authority not any person executing the infrastructure revenue bonds or notes shall be liable personally on the bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof.

§31-15B-3. Trustee for infrastructure revenue bondholder; contents of trust agreement.

(a) Any infrastructure revenue bonds or notes or infrastructure revenue refunding bonds issued by the West Virginia water development authority under this article shall be secured by a trust agreement between the West Virginia water development authority and a corporate trustee, which trustee may be any trust company or banking institution having the powers of a trust company within this state.
(b) Any such trust agreement may pledge or assign infrastructure revenues of the West Virginia water development authority to be received. Any such trust agreement or any resolution providing for the issuance of such bonds or notes may contain such provisions for protecting and enforcing the rights and remedies of the bondholders or noteholders as are reasonable and proper and not in violation of law, including the provisions contained in section eleven of this article and covenants setting forth the duties of the council in relation to provisions regarding the payment of the principal of and interest, charges and fees on loans made to, or bond purchases from, governmental agencies from the proceeds of such bonds or notes, the custody, safeguarding and application of all moneys. Any banking institution or trust company incorporated or authorized to do business in this state under the laws of this state which may act as depository of the proceeds of bonds or notes or of the infrastructure debt service fund shall furnish such indemnifying bonds or pledge such securities as are required by the West Virginia water development authority. Any such trust agreement may set forth the rights and remedies of the bondholders and noteholders and of the trustee and may restrict individual rights of action by bondholders and noteholders as customarily provided in trust agreements or trust indentures securing similar bonds. Such trust agreement may contain such other provisions as the West Virginia water development authority deems reasonable and proper for the security of the bondholders or noteholders. All expenses incurred in carrying out the provisions of any such trust agreement may be treated as part of the cost of the construction, renovation, repair, improvement or acquisition of a project.

§31-15B-4. Legal remedies of infrastructure revenue bondholders or noteholders and trustees.

Any holder of infrastructure revenue bonds or notes issues pursuant to this article and the trustee under any trust agreement, except to the extent the rights given by this article may be restricted by the applicable resolution or trust agreement, may by civil action, mandamus or other proceedings protect and enforce any rights granted under the laws of this state or granted under this article, by the trust agreement or by the resolution in the issuance of such bonds or notes, and may enforce and compel the performance of all duties required by this article, pursuant to the trust agreement or resolution, to be performed by the West Virginia water development authority or the council or any officer thereof.

§31-15B-5. 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 make loans and exercise its other powers as previously specified in furtherance of its corporate purpose: Provided, That no such loans shall be made, and no property shall be purchased or leased from, or sold, leased or otherwise disposed of, to any commissioner, director or officer of the council or the public service commission or the West Virginia water development authority.
§31-15B-6. Infrastructure revenue bonds lawful investments.
All infrastructure 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.
§31-15B-7. Purchase and cancellation of notes or bonds.
(a) The West Virginia water development authority, subject to such agreements with noteholders or bondholders as may then exist, shall have the poser, from any funds available therefor, to purchase infrastructure revenue bonds or notes of the West Virginia water development authority.
(b) If the infrastructure revenue bonds or notes are then redeemable, the price of such purchase shall not exceed the redemption price then applicable plus accrued interest to the next interest payment date thereon. If the infrastructure revenue bonds or notes are not then redeemable, the price of such purchase shall not exceed the redemption price applicable on the first date after such purchase upon which the bonds become subject to redemption plus accrued interest to such date. Upon such purchase such bonds or notes shall be canceled.
§31-15B-8. Refunding bonds.
Any infrastructure revenue bonds issued hereunder and at any time outstanding may at any time and from time to time be refunded by the West Virginia water development authority by the issuance of its refunding bonds in such amount as it may deem necessary to refund the principal of the bonds to be refunded, together with any unpaid interest thereon; to provide additional funds for the purpose of the West Virginia water development authority to accomplish the purpose of this article; and to pay any premiums and commissions necessary to be paid in connection therewith. Any such refunding may be effected whether the infrastructure revenue bonds to be refunded shall have then matured or shall thereafter mature: Provided, That the holders of any infrastructure revenue bonds so to be refunded shall not be compelled without their consent to surrender their infrastructure revenue bonds for payment or exchange prior to the date on which they are payable or, if they are called for redemption, prior to the date on which they are by their terms subject to redemption. Any refunding bonds issued pursuant to this article shall be payable from the infrastructure debt service fund, and shall be subject to the provisions contained in section eleven of this article and shall be secured in accordance with the provisions of sections eleven and twelve of this article.

§31-15B-9. Infrastructure revenue bonds or notes not debt of state, county municipality or of any political subdivision.

Infrastructure revenue bonds or notes and infrastructure revenue refunding bonds issued under the authority of this article shall not constitute a debt or a pledge of the faith and credit or taxing power of this state or of any county, municipality or any other political subdivision of this state, and the holders or owners thereof shall have no right to have taxes levied by the Legislature or taxing authority of any county, municipality or any other political subdivision of this state for the payment of the principal thereof or interest thereon, but such bonds shall be payable solely from the revenues and funds pledged for their payment as authorized by this article, unless the notes are issued in anticipation of the issuance of bonds or the bonds ar refunded by refunding bonds issued under authority of this article, which infrastructure refunding bonds shall be payable solely from revenues and funds pledged for their payment as authorized by this article. All such bonds and notes shall contain on the face thereof a statement to the effect that the bonds or notes, as to both principal and interest, are not debts of the state or any county, municipality or political subdivision thereof, but are payable solely from revenues and funds pledged for their payment.

§31-15B-10. Infrastructure revenue bonds or notes exemption from taxation.

The exercise of the powers granted to the West Virginia water development authority 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 for a public purpose. As the construction, acquisition, repair or renovation of infrastructure projects will constitute the performance of essential governmental functions, the West Virginia water development authority shall not be required to pay any taxes or assessments upon any project or upon any property acquired or used by the West Virginia water development authority or upon the income therefrom. The infrastructure revenue bonds and notes and the infrastructure refunding bonds 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.
§31-15B-11. Termination of 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-12. 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. Such bonds may be issued by the governor in such amounts, in coupons or registered form, in such denominations, at such time, bearing such date or dates as the infrastructure council may determine by resolution which justifies the issuance by the governor of said bonds, and shall become due and payable serially, annually or semiannually, in such amounts and mature in such years as the council may determine by resolution and certify to the governor: Provided, That in no event may the amount of bonds outstanding exceed an amount for which sixteen million dollars would not be sufficient to service the total amount of debt outstanding: Provided, however, That the bonds shall mature within and not exceeding thirty years from their date. The water development authority must offer the bonds for competitive bids from recognized financial investment institutions before the bonds may be sold.

§31-15B-13. Infrastructure General Obligation Debt Service Account; sources used to pay bonds and interest; investment of remainder.

Into the infrastructure general obligation debt service account there shall be paid all money from any and all appropriations made by the state from and moneys transferred pursuant to the provisions of section sixteen, article fifteen-a, chapter thirty-one for the purpose of paying the interest on such bonds or paying off and retiring the bonds, from transfer and registration fees as herein provided, and from any other source whatsoever which is made liable by law for the payment of the principal of such bonds or the interest thereon.
All these funds shall be kept by the treasurer in a separate account, under the designation aforesaid, and all moneys belonging to the fund shall be deposited in the state treasury to the credit thereof.
Such fund shall be applied by the water development authority of the state first to the payment of the semiannual interest on such bonds as it shall become due as herein provided. The remainder of the fund shall be deposited to the credit of the infrastructure fund and the council shall have the duty it shall be to invest the same obligations of the government of the United States, bonds of the state of West Virginia, or any political subdivision thereof: Provided, That the bonds or other obligations so purchased by the water development authority shall mature so as to provide sufficient money to pay off all bonds herein provided to be issued as they become due; and the moneys so paid into the infrastructure debt service fund under the provisions of this act shall be expended for the purpose of paying the interest and principal of the bonds hereby provided for as they severally become due and payable and for no other purpose except that the fund may be invested until needed, as herein provided.
§31-15B-14. 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 account as provided in section sixteen, article fifteen-a, chapter thirty-one of this code which are irrevocably set aside and appropriated for an applied to the payment of the interest on and principal of this bond becoming due and payable in such year are insufficient therefor.
§31-15B-15. Sale by water development authority; minimum price.
The water development authority 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 subject to the limitations contained in this act. sales shall be at not less than par and accrued interest. All interest coupons becoming payable prior to the sale date shall be cancelled by the treasurer and rendered ineffective, before the delivery of the bonds so sold.
§31-15B-16. Council to determine financial advisor.
The council shall, by resolution, employ a competent person or firm to serve as financial advisor to the governor for the issuance and sale of such bonds.
§31-15B-17. Council to determine bond counsel.
The council shall, by resolution, employ 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 such bonds.
§31-15B-18. Approval and payment of all necessary expenses.
All necessary expenses, including legal expenses, incurred in the execution of this act shall be paid out of the infrastructure general obligation debt service account.

§31-15B-19. 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 the amounts certified by the council pursuant to the provisions of section sixteen, sub-section b of this article, as well as, any amounts appropriated by the legislature.

NOTE: The purpose of this bill is to authorize the sale of revenue bonds, refunding bonds and general obligation bonds. The general obligations bond authorization is in response to the electorate's support of Amendment 3 to the West Virginia Constitution, as passed by referendum on November 8, 1994.
The bill adds definitions of "Infrastructure amendment," "Infrastructure general obligation bond," and "Infrastructure revenue bond." Further, the definition of "State infrastructure agency" is amended making it more specific and eliminating the economic development authority.
The bill gives the council the ability to receive and properly account for general obligation bond proceeds. A special account is established for servicing the debt of any general obligation bond issue. Section sixteen of the act is amended to command certification by the council of yearly debt service needs of general obligation bond issues.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added. Article fifteen-b is new, therefore underlining and strike-throughs have been omitted.

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