COMMITTEE SUBSTITUTE
FOR
H. B. 4444
(By Delegates Mr. Speaker, Mr. Kiss, and Delegate Ashley)
[By Request of the Executive]
(Originating in the Committee on Finance)
[March 2, 1998]
A BILL to amend and reenact sections two, three and twelve,
article one, chapter twelve of the code of West Virginia,
one thousand nine hundred thirty-one, as amended; to further
amend said article by adding thereto a new section,
designated section twelve-a; to amend and reenact sections
fourteen, seventeen and eighteen, article one, chapter
thirteen of said code; and to amend and reenact section two,
article two said chapter, all relating to the clarification
and technical clean-up of language concerning the
responsibilities of the state treasurer; authorizing
investment accounts by the state treasurer; authorizing
money needed for current operation purposes to be invested
in short term investments not to exceed five days;
authorizing the state treasurer to designate banks as
depositories for interest earning deposits of the state and
to apportion such interest earning deposits; authorizing the
treasurer to invest up to one hundred twenty-five million
dollars of the operating funds of the state to meet current operational needs; clarifying the meaning of operating
funds; limiting investments by the state treasurer; and
authorizing the treasurer to be bond payor and registrar.
Be it enacted by the Legislature of West Virginia:
That sections two, three and twelve, article one, chapter
twelve of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted; that said
article be further amended by adding thereto a new section,
designated section twelve-a; that sections fourteen, seventeen
and eighteen, article one, chapter thirteen of said code be
amended and reenacted; and that section two, article two of said
chapter be amended and reenacted, all to read as follows:
CHAPTER 12. PUBLIC MONEYS AND SECURITIES.
ARTICLE 1. STATE DEPOSITORIES.
§12-1-2. Depositories for demand deposits; categories of demand
deposits; competitive bidding for disbursement
accounts; maintenance of deposits by state
treasurer.
The state treasurer shall designate the state and national
banks in this state which shall serve as depositories for all
state funds placed in demand deposits. Any such state or
national bank shall, upon request to the treasurer, be designated
as a state depository for such deposits, if such bank meets the
requirements set forth in this chapter.
Demand deposit accounts shall consist of receipt and
disbursement. Receipt accounts shall be those accounts in which are deposited moneys belonging to or due the state of West
Virginia or any official, department, board, commission or agency
thereof.
Disbursement accounts shall be those accounts from which are
paid moneys due from the state of West Virginia or any official,
department, board, commission, political subdivision or agency
thereof to any political subdivision, person, firm or
corporation, except moneys paid from investment accounts.
Investment accounts shall be those accounts established by
the West Virginia investment management board or the state
treasurer for the buying and selling of securities for investment
for the state of West Virginia. or any official, department,
board, commission or agency thereof or to meet obligations to
paying agents or for paying charges incurred for the custody,
safekeeping and management of such securities pursuant to the
provisions of section five, article five of this chapter, or for
paying the charges of any bank or trust company acting as paying
agent or copaying agent for a bond issue of the state pursuant to
the provisions of section seven-a, article one, chapter fifty- seven of this code.
The state treasurer shall promulgate rules, in accordance
with the provisions of article three, chapter twenty-nine-a of
this code, concerning depositories for receipt accounts
prescribing the selection criteria, procedures, compensation and
such other contractual terms as it considers to be in the best
interests of the state giving due consideration to: (1) The activity of the various accounts maintained therein; (2) the
reasonable value of the banking services rendered or to be
rendered the state by such depositories; and (3) the value and
importance of such deposits to the economy of the communities and
the various areas of the state affected thereby.
The state treasurer shall select depositories for
disbursement accounts through competitive bidding by eligible
banks in this state. The treasurer shall promulgate rules, and
regulations in accordance with the provisions of article three,
chapter twenty-nine-a of this code, prescribing the procedures
and criteria for the bidding and selection. The treasurer shall,
in the invitations for bids, specify the approximate amounts of
deposits, the duration of contracts to be awarded and such other
contractual terms as it considers to be in the best interests of
the state, consistent with obtaining the most efficient service
at the lowest cost.
The amount of money needed for current operation purposes of
the state government, as determined by the state treasurer, shall
be maintained at all times in the state treasury, in cash, in
short term investments not to exceed five days, or in
disbursement accounts with banks designated as depositories in
accordance with the provisions of this section. No state officer
or employee shall make or cause to be made any deposits of state
funds in banks not so designated.
§12-1-3. Depositories for interest earning deposits;
qualifications.
Any state or national bank or any state or federal savings
and loan association in this state shall, upon request made to
the board of investments state treasurer, be designated as an
eligible depository for interest earning deposits of state funds
if such bank or state or federal savings and loan association
meets the requirements set forth in this chapter. For purposes
of this article, the term "interest earning deposits" includes
certificates of deposit. The board of investments state
treasurer shall make and apportion such interest earning deposits
and shall prescribe the interest rates, terms and conditions of
such deposits, all in accordance with the provisions of article
six of this chapter: Provided, That state or federal savings and
loan associations insured by an agency of the federal government
shall be eligible for such deposits not in excess of one hundred
thousand dollars: Provided, however, That notwithstanding any
provision of this article to the contrary, no such interest
earning deposits may be deposited in any depository which has
been in existence over a period of five years which does not have
a loan to deposit ratio of fifty percent or more and which does
not have farm, single or multifamily residential unit loans in an
amount greater than twenty-five percent of the amount of loans
representing a loan-to-deposit ratio of fifty percent. For the
purpose of making the foregoing calculation, the balances due the
depository on the following loans shall be given effect: (1)
Qualifying residential loans held by the depository; (2)
qualifying loans made in participation with other financial institutions; (3) qualifying loans made in participation with
agencies of the state, federal or local governments; and (4)
qualifying loans originated and serviced by the depository but
owned by an out-of-state investor. The computation of the
criteria for eligibility specified above shall be based on the
average daily balances of deposits, the average daily balances of
total loans and qualifying residential loans for the period being
reported.
§12-1-12. When treasurer shall make funds available to the
investment management board; depositories outside
the state.
When the funds in the treasury exceed the amount needed for
current operational purposes, as determined by the treasurer, the
treasurer shall make all of such excess available for investment
by the investment management board which shall invest the same
excess for the benefit of the general revenue fund: Provided,
That the state treasurer, after reviewing the cash flow needs of
the state, may withhold and invest amounts not to exceed one
hundred twenty-five million dollars of the operating funds needed
to meet current operational purposes. Investments made by the
state treasurer under this section shall be made in short term
investments not to exceed five days. Operating funds means the
consolidated fund established in section eight, article six of
this chapter, including all cash and investments of the fund.
Whenever the funds in the treasury exceed the amount for
which depositories within the state have qualified, or the depositories within the state which have qualified are unwilling
to receive larger deposits the treasurer may designate
depositories outside the state, disbursement accounts being bid
for in the same manner as required by depositories within the
state, and when such depositories outside the state have
qualified by giving the bond prescribed in section four of this
article, the state treasurer shall deposit funds therein in like
manner as funds are deposited in depositories within the state
under this article.
The state treasurer or board of investments may transfer
funds to banks outside the state to meet obligations to paying
agents outside the state and any such transfer must meet the same
bond requirements as set forth in this article.
§12-1-12a. Investment of operating funds for cash flow needs.
(a) The Legislature hereby finds and declares that the cash
flow needs of the state require short term and liquid
investments, and that up to one hundred twenty-five million
dollars of the operating funds of the state should be sufficient
to meet cash flow needs. The Legislature further finds that the
state treasurer may withhold from transfer to the investment
management board up to one hundred twenty-five million dollars of
the operating funds of the state and invest those funds in short
term and liquid investments.
(b) The state treasurer may exercise any and all powers
reasonably necessary or appropriate to carry out and effectuate
the purposes of this section.
(c) Investments shall be made in accordance with the
provisions of the "Uniform Prudent Investor Act" codified as
article six-c, chapter forty-four of this code.
(d) The state treasurer is authorized to invest the funds in
repurchase agreements fully collateralized by obligations of the
United States government or its agencies or instrumentalities.
(e) The state treasurer shall prepare monthly a report of
the investments he or she administers. A copy of each report
shall be furnished to the president of the Senate, speaker of the
House, legislative auditor, council of finance and
administration, and upon request to any legislative committee,
banking institution, state or federal savings and loan
association in this state, and any member of the news media. The
report shall also be kept available for inspection by the public.
CHAPTER 13. PUBLIC BONDED INDEBTEDNESS.
ARTICLE 1. BOND ISSUES FOR ORIGINAL INDEBTEDNESS.
§13-1-14. Resolution authorizing issuance and fixing terms of
bonds.
If three fifths of all the votes cast for and against the
proposition to incur debt and issue negotiable bonds shall be in
favor of the same, the governing body of the political division
shall, by resolution, authorize the issuance of such bonds in an
amount not exceeding the amount stated in the proposition; fix
the date thereof; set forth the denominations in which they shall
be issued, which denominations shall be one hundred dollars or
multiples thereof; determine the rate or rates of interest which the bonds shall bear, which rate or rates of interest shall be
within the maximum rate stated in the proposition submitted to
vote and payable semiannually; prescribe the medium with which
the bonds shall be payable; require that the bonds shall be made
payable at the office of the state board of investments treasurer
and at such other place or places as the body issuing the same
may designate; provide for a sufficient levy to pay the annual
interest on the bonds and the principal at maturity; fix the
times within the maximum period, as contained in the proposition
submitted to vote, when the bonds shall become payable, which
shall not exceed thirty-four years from the date thereof;
determine whether all or a portion of the bonds shall be subject
to redemption prior to the maturity thereof and, if so, the terms
of the redemption; and prescribe a form for executing the bonds
authorized.
§13-1-17. Bonds may be registered; coupon bonds may be
registered as to principal.
The bonds issued hereunder may be registered or coupon
bonds. Coupon bonds may be registered as to the principal in the
owner's name by the state board of investments treasurer on books
which shall be kept at its office for the purpose and the
registration shall also be noted on the bonds, after which no
transfer shall be valid unless made by the state board of
investments treasurer on the books of registration and similarly
noted on the bonds. Bonds registered as to principal may be
discharged from registration by being transferred to bearer, after which they shall be transferable by delivery; but may
again, and from time to time, be registered as to the principal
amount as before. The registration of coupon bonds as to the
principal sum shall not affect the negotiability of the interest
coupons, but title to the same shall pass by delivery.
§13-1-18. Registration of coupon bonds as to interest; exchange
of registered bond for coupon bond.
Coupon bonds may also be registered as to the interest by
the holder surrendering the bonds with the unpaid coupons
attached, which bonds and coupons shall be canceled by the state
board of investments treasurer. New bonds of the same date and
tenor and for the same amounts as the bonds surrendered, or, at
the option of the holder, a single bond for the aggregate amount
of the bonds surrendered, but without interest coupons attached,
shall be issued in the place of the coupon bonds and registered
in the manner required in the preceding section. A registered
bond may at any time be surrendered and be exchanged by the
holder for a coupon bond by the holder delivering the registered
bond to the state board of investments treasurer who shall cancel
the same and who shall cause a new bond of the same date and
tenor and for the same amount to be issued, and with interest
coupons for the interest thereafter to accrue thereon attached,
and deliver the same to the holder of the surrendered bond. The
governing body of the county, municipal corporation or school
district which issued the original bond shall issue and execute
the new bond required by this section and shall pass the resolutions and ordinances necessary to authorize the same. The
expense of such registration shall in all cases be paid by the
holder of the bonds.
ARTICLE 2. REFUNDING BONDS.
§13-2-2. Terms of refunding bonds; time, place and amount of
payments.
Upon determining to issue such refunding bonds, the
governing body of such political division shall, by resolution,
authorize the issuance of such bonds in an amount not exceeding
the principal amount permitted by section one of this article,
fix the date thereof, the rate or rates of interest which such
bonds shall bear, payable semiannually, and require that the
bonds shall bear, payable at the office of the state board of
investments treasurer and at such other place or places as the
body issuing the same may designate. Such resolution shall also
provide that such bonds shall mature serially in annual
installments beginning not more than three years after the date
thereof, and the last of such annual installments shall mature in
not exceeding thirty-four years from the date of such bonds. The
amount payable in each year on the refunding bonds, together with
any unrefunded or unissued bonds of the prior issue, may be so
fixed that, when the amount of interest is added to the principal
amount to be paid during the respective years, the total amount
payable in each year shall be as nearly equal as practicable; or
such bonds may be made payable in annual installments as nearly
equal in principal as may be practicable.
All or a portion of the refunding bonds may be subject to
redemption prior to the maturity thereof, at the option of the
body issuing the same, at such times and prices and on such terms
as shall be designated in the resolution required by this
section. The body issuing the refunding bonds may not levy taxes
in connection with the redemption of any refunding bonds in
excess of the taxes that would have been levied for the payment
of principal of and interest on such refunding bonds in such
year.
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