HB 2037 Text

COMMITTEE SUBSTITUTE
FOR
H. B. 2037

(By Mr. Speaker, Mr. Chambers, and Delegate Ashley)
[By Request of the Executive]
(Originating in the Committee on Finance)
[January 31, 1995]

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 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; 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; providing for disbursements to pay debt service on infrastructure general obligation and revenue bonds; empowering the governor to issue infrastructure general obligation bonds; authorizing the water development authority to issue 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; setting forth legal remedies of infrastructure revenue bondholders or noteholders and trustees; prohibiting funds inuring to the benefit of or being distributable to directors or officers; providing that infrastructure general obligation and revenue bonds are lawful investments; providing for the purchasing and canceling of notes or bonds; providing that infrastructure revenue bonds or notes are not debt of state, county municipality or of any political subdivision; exempting infrastructure general obligation and revenue bonds or notes from taxation; providing provisions in case of termination or dissolution of the water development authority; providing terms for general obligation bonds; setting forth a cap on the interest rate of bonds; directing the use of funds deposited in general obligation debt service fund; setting forth the covenants of the state; providing for the sale of general obligation bonds and their minimum price; allowing the governor to select legal advisors; 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 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 continued; members of council; staff of council.

(a) ~~There is hereby created the~~ The West Virginia infrastructure and jobs development council is hereby continued. The council ~~shall be~~ is a governmental instrumentality of the state. The ~~exercise by the council~~ council's exercise 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 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, 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~~ 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 ~~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~~ 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) 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 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 sixteen of this article; and (7) all proceeds derived from the sale of bonds issued pursuant to article fifteen-b of this chapter.
Any money collected from any of these sources 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 ~~may~~ 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. ~~and~~ 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 ~~such~~ 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 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-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 and the water development board 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. Upon this certification, the water development authority shall transfer the amount so certified from the infrastructure fund, created in section nine of this article, to the infrastructure general obligation debt service account, created in section thirteen, 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 twelve of this article.
(d) "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
(e) "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. 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 and article fifteen-a of this chapter, 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 the principal and interest payments due on all outstanding loans to projects previously made by the water development authority.
(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 infrastructure and jobs development council in accordance with the provisions of article fifteen-a of this chapter.
(c) The water development authority 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 the disbursement is consistent with the purposes and intent of this article or article fifteen-a of this chapter.
(d) There is hereby created a special account to be held by the trustee under the trust agreement for the revenue bonds or notes, 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 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 revenue bonds or notes. All amounts deposited in the infrastructure revenue bond 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 the fund may be used to establish or maintain reserves created for the purposes of securing any bonds or notes. The 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 the pledge without any physical delivery thereof or further act, and the lien of any 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 or amounts deposited into the account irrespective of whether the parties have notice thereof.
(e) Except as may otherwise be expressly provided in this article or by resolution of the West Virginia water development authority 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 West Virginia infrastructure revenue bond debt service fund and infrastructure fund, and the reserves created for this purpose by the West Virginia water development authority, without preference or priority among these bonds regardless of when issued, subject only to any agreements with the holders of any bonds or notes to the contrary. All 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. These bonds or notes shall bear the date and shall mature at the time, in case of any 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 a rate or rates, including variable rates, shall be taxable or tax-exempt, shall be in the denominations, shall be in registered form, shall carry the registration privileges, shall be payable in the medium of payment, and in the place and shall be subject to the terms of redemption and may be sold by the West Virginia water development authority at public or private sale, and at the price the West Virginia water development authority determines. The bonds or notes shall be executed by the chairman or the 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 the following provisions: (1) provisions with respect to the pledge of or other use and disposition of infrastructure revenues; (2) provisions setting aside of reserve funds; (3) limitations on the purpose to which the proceeds of sale of bonds or notes may be applied; (4) provisions relating to notes issued in anticipation of the issuance of bonds; (5) an 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; (6) limitations on the issuance of additional bonds or notes; (7) the terms upon which additional bonds or notes may be issued and secured; (8) provisions for the refunding of outstanding bonds or notes; (9) the procedures, if any, by which the terms of any contract with bondholders or noteholders may be amended or abrogated; (10) the amount of bonds or notes the holders of which must consent thereto and the manner in which such consent may be given; and (11) any other matter, which in any way affects the security for or protection of the bonds or notes. These provisions shall be subject to any agreement with bondholders or noteholders which may then exist, which agreement shall be part of the contract with the holder.
(h) In the event that the sum of all reserves pledged to the payment of the bonds or notes issued pursuant to this section shall be less than the minimum reserve requirements established in any resolution or resolutions authorizing the issuance of the bonds or notes, the chairman or the director of the water development authority 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 water development authority 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 nor 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 trust agreement may pledge or assign infrastructure revenues of the West Virginia water development authority to be received. Any 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, article fifteen-a of this chapter and covenants setting forth the duties of the council and the water development authority 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 the bonds or notes, and 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 and shall furnish such indemnifying bonds or pledge securities as required by the West Virginia water development authority. The 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. The trust agreement may contain any 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 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 the 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 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-6. 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-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 power, 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 the 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 the purchase shall not exceed the redemption price applicable on the first date after the purchase upon which the bonds become subject to redemption plus accrued interest to such date. Upon purchase such bonds or notes shall be canceled.
§31-15B-8. Refunding bonds.
Any infrastructure revenue bonds which are outstanding may at any time be refunded by the West Virginia water development authority by the issuance of refunding bonds in an amount it deems necessary to refund the principal of the bonds to be refunded, together with any unpaid interest thereon; to provide additional funds for the West Virginia water development authority 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 revenue bonds to be refunded shall have then matured or shall thereafter mature: Provided, That the holders of any infrastructure revenue bonds 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 to be 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 revenue 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-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. 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. The bonds or notes 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 are 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 exempt from taxation.

The exercise of the powers granted to the West Virginia water development authority by this article and article fifteen-a of this chapter 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 water, sewage and 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 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 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-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. These bonds may be issued by the governor in such amounts, in 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 at a time and in 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.
Both the principal and interest of the bonds shall be payable in the lawful money of the United States of America and the bonds 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 bear interest at a rate not to exceed eight percent per annum.
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-13. 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 the amounts certified by the council pursuant to the provisions of section sixteen, article fifteen-a of this chapter, as well as, any amounts appropriated by the Legislature.

§31-15B-14. 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 for the purpose of paying the principal and interest on the general obligation bonds 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 the payment of principal and interest as provided herein and expenses authorized pursuant to section nineteen of this article shall be deposited to the credit of the infrastructure fund.
§31-15B-15. 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 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-16. 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.
§31-15B-17. 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-18. 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.
§31-15B-19. 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. The authority shall cause the amount so certified to be transferred from the infrastructure fund to the infrastructure general obligation debt service fund.

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