H. B. 2508
(By Mr. Speaker, Mr. Kiss, and Delegate Ashley)
[By Request of the Executive]
[Introduced March 12, 1997; referred to the
Committee on Finance.]
A BILL to amend and reenact section one, article three, chapter
seventeen 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
twenty-six, all relating to the sale of state road general
obligation bonds; providing for the deposit of bond proceeds
in the state road fund; setting forth the definitions to be
used in the article; authorizing the issuance of bonds by
the governor upon resolution by the Legislature; exempting
interest on bonds from taxation; setting forth the amount of
bonds which may be sold in each fiscal year; creating the
state road bond debt service fund and dedicating the fund
for the payment of interest on bonds; setting forth the source of funds for the payment of debt service; providing
for the investment of the remainder of the state road bond debt service fund; setting forth the covenants between the
state and the bondholders; setting forth impermissible
conflicts of interest and providing criminal penalties for
violation of the conflict of interest provisions; providing
that state road bonds are lawful investments for specified
entities; providing for the sale of refunding bonds and the
manner of making interest payments thereon; providing for
transfer of funds upon dissolution of division of highways;
providing for the selection of the financial advisor for the
issuance of bonds; providing for the selection of bond
counsel; providing for the selection of underwriters for the
issuance of bonds; authorizing the payment of expenses from
the state road debt service fund; and providing for the
dedication of the gasoline and special fuel excise tax to
pay debt service.
Be it enacted by the Legislature of West Virginia:
That section one, article three, chapter seventeen 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 twenty-six, all to read as follows:
ARTICLE 3. STATE ROAD FUND.
§17-3-1. What constitutes fund; payments into fund; use of money
in fund.
There shall be a state road fund, which shall consist of the
proceeds of all state license taxes imposed upon automobiles or
other motor or steam driven vehicles; the registration fees
imposed upon all owners, chauffeurs, operators and dealers in
automobiles or other motor driven vehicles; all sums of money
which may be donated to such fund; all proceeds derived from the
sale of state bonds issued pursuant to any resolution or act of
the Legislature carrying into effect the "Better Roads Amendment"
to the constitution of this state, adopted in the month of
November, one thousand nine hundred sixty-four, except that the
proceeds from the sale of these bonds shall be kept in a separate
and distinct account in the state road fund;
all proceeds from
the sale of state bonds issued pursuant to any resolution or act
of the Legislature carrying into effect the "Safe Roads Amendment
of 1996" to the constitution of this state, adopted in the month
of November, one thousand nine hundred ninety-seven, except that
the proceeds from the sale of these bonds shall be kept in a
separate and distinct account in the state road fund; all moneys
and funds appropriated to it by the Legislature; and all moneys
allotted or appropriated by the federal government to this state
for road construction and maintenance pursuant to any act of the
Congress of the United States; the proceeds of all taxes imposed
upon and collected from any person, firm or corporation and of
all taxes or charges imposed upon and collected from any county, district or municipality for the benefit of such fund; the
proceeds of all judgments, decrees or awards recovered and
collected from any person, firm or corporation for damages done
to, or sustained by, any of the state roads or parts thereof; all
moneys recovered or received by reason of the violation of any
contract respecting the building, construction or maintenance of
any state road; all penalties and forfeitures imposed, recovered
or received by reason thereof; and any and all other moneys and
funds appropriated to, imposed and collected for the benefit of
such fund, or collected by virtue of any statute and payable to
such fund:
Provided, That notwithstanding any provisions of this
code to the contrary, fifty cents of every license fee paid
pursuant to the provisions of subdivision (2), subsection (a),
section eight, article two, chapter seventeen-b of this code
shall be paid to the special fund established pursuant to the
provisions of subsection (d), section twenty-two-a, article two,
chapter three of this code.
When any money is collected from any of the sources
aforesaid, it shall be paid into the state treasury by the
officer whose duty it is to collect and account for the same, and
credited to the state road fund, and shall be used only for the
purposes named in this chapter, that is to say: (a) To pay the
principal and interest due on all state bonds issued for the
benefit of said fund, and set aside and appropriated for that purpose; (b) to pay the expenses of the administration of the
road department; and (c) to pay the cost of maintenance,
construction, reconstruction and improvement of all state roads.
ARTICLE 26. STATE ROAD BONDS.
§17-26-1. Definitions.
For purposes of this article and article fifteen-a of this
chapter:
(a) "Commissioner" means the West Virginia commissioner of
highways continued pursuant to section one, article two-a of this
chapter;
(b) "Amendment" means the amendment to the constitution of
this state entitled "Safe Roads Amendment of 1996" as approved by
referendum in the month of November, one thousand nine hundred
ninety-six;
(c)"State road bond" means any bond or bonds issued by the
state pursuant to section two of this article;
(d) "Division" means the West Virginia division of highways
established under section one, article two-a, of this chapter,
or any successor to all or any substantial part of its powers and
duties; and
(e) "Secretary" means the secretary of the West Virginia
department of transportation.
§17-26-2. State road general obligation bonds; amount; when may
issue.
Bonds of the state of West Virginia, under authority of the
"Safe Roads Amendment of 1996" of the par value not to exceed in
the aggregate five hundred fifty million dollars, are hereby
authorized to be issued and sold for matching available federal
funds for highway construction and for general highway
construction or improvements in each of the fifty-five counties
in this state, as provided for by the constitution and the
provisions of this article. During the fiscal year ending the
thirtieth day of June, one thousand nine hundred ninety-eight,
the amount of one hundred ten million dollars in bonds may be
sold. That same amount is authorized to be sold in each of the
next four following fiscal years:
Provided, That any amount not
sold in a fiscal year may be carried forward and sold in the next
fiscal year.
These bonds may be issued by the governor upon resolution
passed by the Legislature authorizing the same. The bonds shall
bear the date and mature at the time, bear interest at the rate,
be in amounts, be in denominations, be in the registered form,
carry registration privileges, be due and payable at the time
and place and in amounts, and subject to terms of redemption as
the resolution may allow.
Both the principal and interest of the bonds shall be
payable in the lawful money of the United States of America and
the bonds and the interest thereon shall be exempt from taxation by the state of West Virginia, or by any county, district or
municipality thereof, which fact shall appear on the face of the
bonds as part of the contract with the holder of the bond.
The bonds shall be executed on behalf of the state of West
Virginia, by the manual or facsimile signature of the state
treasurer, under the great seal of the state or a facsimile of
the great seal, and countersigned by the manual or facsimile
signature of the auditor of the state.
§17-26-3. Creation of debt service fund; disbursements to pay
debt service on state road general obligation bonds.
There is hereby created a special account in the state
treasury, which shall be designated and known as the "State Road
Bond Debt Service Fund", into which shall be deposited any and
all amounts appropriated by the Legislature from the state road
fund or funds from any source whatsoever which is made liable by
law for the purpose of paying the interest on the bonds or paying
off and retiring bonds issued pursuant to this article.
§17-26-4. State road bond debt service fund; sources used to
pay bonds and interest; investment of remainder.
All funds deposited to the credit of the state road bond
debt service fund shall be kept by the treasurer of the state in
a separate account and all money belonging to the fund shall be
deposited in the treasury to the credit of the fund.
The fund shall be applied by the treasurer of the state for payments on the interest on bonds sold pursuant to this article
as it becomes due and payable. The remainder of the fund, if
any, shall be invested by the state board of investments in the
manner authorized under article six, chapter twelve of this code.
§17-26-5. Covenants of state.
The state of West Virginia covenants and agrees with the
holders of the bonds issued pursuant hereto as follows: (1) That
such bonds shall constitute a direct and general obligation of
the state of West Virginia; (2) that the full faith and credit of
the state is hereby pledged to secure the payment of the
principal and interest of such bonds; (3) that an annual state
tax shall be collected in an amount sufficient to pay, as it may
accrue, the interest on such bonds and the principal thereof; and
(4) that such tax shall be levied in any year only to the extent
that the moneys transferred to the state road bond debt service
fund as provided in sections three and four, of this article
which are irrevocably set aside and appropriated for and applied
to the payment of the interest on and principal of any bond
becoming due and payable in such year are insufficient therefor.
§17-26-6. Sale by governor; minimum price; certification of
annual debt service amount.
The governor shall sell the bonds herein authorized at such
time or times as provided by a resolution enacted by the
Legislature. The governor, in his or her discretion, may, by executive message, request that a resolution be proposed for the
issuance of bonds pursuant to this article. The governor shall
determine the manner by which bonds will be sold. On or before
the first day of June in each fiscal year the commissioner shall
certify to the treasurer and secretary of the department of tax
and revenue the principal and interest requirement for the
following fiscal year on any bonds issued pursuant to this
article.
§17-26-7. Conflicts of interest.
No part of the proceeds from the sale of bonds under this
article may inure to the benefit of or be distributable to the
officers, employees of the state except to pay reasonable
compensation for services rendered to the state. No officer or
employee of the state may be financially interested , directly or
indirectly, in any contract of any person with the division of
highways or the state, or in the sale of any property, real or
personal, to or from the state during that person's employment
with the state or for a period of twelve months after the
termination of that person's employment with the state. Any
person violating the provisions of this section shall be guilty
of a misdemeanor and, upon conviction thereof, shall be fined not
more than one thousand dollars, or confined in jail nor more than
one year, or both fined and imprisoned.
§17-26-8. State road bonds lawful investments.
All state road 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.
§17-26-9. Refunding bonds.
Any state road general obligation bonds which are
outstanding may at any time be refunded by the issuance of
refunding bonds in an amount deemed necessary to refund the
principal of the bonds to be refunded, together with any unpaid
interest thereon; to accomplish the purpose of the amendment and
to pay any premiums and commissions necessary to be paid in
connection therewith. Any refunding may be effected whether the
state road general obligation bonds to be refunded shall have
then matured or shall thereafter mature. Any refunding bonds
issued pursuant to this article shall be payable from the state
road bond debt service fund.
§17-26-10. Termination or dissolution.
Upon the termination or dissolution of the West Virginia
division of highways, all rights and properties of the West
Virginia division of highways with respect to the state road bond
debt service fund shall pass to and be vested in the state,
subject to the rights of bondholders, lienholders and other creditors.
§
17-26-11. Governor to determine financial advisor.
The governor, in his or her discretion, may 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.
§17-26-12. Governor to determine bond counsel.
The governor shall select a competent person or firm to
serve as bond counsel who shall be responsible for the issuance
of a final approving opinion regarding the legality of the sale
of general obligation bonds issued pursuant to this article.
Notwithstanding the provisions of article three, chapter five of
this code, bond counsel may represent the state in court, render
advice and provide other legal services as may be requested by
the governor, the secretary or the commissioner regarding any
bond issuance pursuant to this article and all other matters
relating to the bond issue. The governor may also, in his or her
discretion, select a person or firm to serve as underwriter for
any issuance pursuant to this article.
§17-26-13. Approval and payment of all necessary expenses.
All necessary expenses, including legal expenses, incurred
in the issuance of any general obligation bonds pursuant to this
article shall be paid out of the state road debt service fund.
The amount of any expenses incurred shall be certified to the commissioner of highways.
§17-26-14. Dedication of tax.
(a) There shall be dedicated an annual amount from the
collections of the tax imposed pursuant to section three, article
fourteen, chapter eleven of this code for sufficient to pay the
principal and interest of any state road bonds issued pursuant to
this article.
(b) Beginning in the month of July, one thousand nine
hundred ninety-seven, and monthly thereafter, there shall be
deposited into the state road bond debt service fund an amount
equal to one tenth of the projected annual principal, interest
requirements, as certified by the commissioner, on all bonds
issued pursuant to this article, of the tax collected pursuant to
article fourteen, chapter eleven of this
code.
NOTE: The purpose of this bill is to provide a means for
the sale of road bonds which were authorized by the people in
approving the state roads amendment of 1996.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§17-26 is new; therefore, strike-throughs and
underscoring have been omitted.
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