COMMITTEE SUBSTITUTE
FOR
H. B. 4508
(By Mr. Speaker, Mr. Kiss, and Delegate Ashley)
[By Request of the Executive]
(Originating in the Committee on Finance)
[March 5, 1998]
A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article thirteen-d, all
relating to the establishment of the regional water and
wastewater authority act; setting forth the purpose of the
Legislature to enable public agencies to join together to
secure and provide water for resale and other purposes, or
to join together for the transportation and treatment
of wastewater; providing definitions; setting forth
requirements for agreements between public agencies;
prohibiting competing services by public agencies in an
agreement; requiring outstanding bond indebtedness to be
retired before a public agency can withdraw from an
agreement; authorizing public agencies to provide funds,
personnel, and services to regional water authorities,
regional wastewater authorities and regional water and
wastewater authorities and authorizing agreements between
public agencies and such authorities; establishment of the
authority as a quasi-public corporation; establishing
requirements for the governing board of such authority; requiring meetings and an audit of the authority;
establishing powers of the authority; authorizing the sale
of bonds for constructing or acquiring water supply systems
or for constructing or acquiring wastewater transportation
and treatment facilities; authorizing items to be included
as costs of properties; providing that the bonds may be
secured by trust indenture; requiring the establishment of
a sinking fund; establishing enforcement provisions for
bondholders; establishing a statutory mortgage lien in favor
of bondholders; providing for the requirement that the
authority establish appropriate rates and charges for the
use of services rendered; refunding issued bonds; exempting
bonds and bond interest from taxation; establishing that
bonds issued by authorities are legal investments; requiring
the article to be liberally construed to effectuate its
purposes; and providing for partial invalidity.
Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article thirteen-d, all
to read as follows:
ARTICLE 13D. REGIONAL WATER AND WASTEWATER AUTHORITY ACT.
§16-13D-1. Statement of purpose.
It is the purpose of this article, to permit certain public
agencies to make the most efficient use of their powers relating
to public water supplies and the transportation and treatment of
wastewater by enabling them to cooperate with other public agencies on a basis of mutual advantage and thereby to provide
services and facilities to participating public agencies and to
provide for the establishment for such purpose of a quasi- governmental public corporation which shall be known as a
regional water authority, or where appropriate, a regional
wastewater authority, or regional water and wastewater authority.
The function of the regional water authority shall be to secure
a source of water on a scale larger than is feasible for
individual public agencies acting alone, and to sell such water
to public service districts, municipalities, publicly and
privately owned water utilities, and others. The function of the
regional wastewater authority shall be to enable public agencies
to join together to provide the most economical method of
transportation and treatment of wastewater and to provide such
transportation and treatment services to public service
districts, municipalities, publicly and privately owned
wastewater utilities, and others. The function of the regional
water and wastewater authority shall be to enable public agencies
to join together to carry out the joint functions of both
regional water authority and a regional wastewater authority.
In addition to the purposes for which it may have originally
been created, any authority created pursuant to this article
shall have the power to enter into agreements with public
agencies, privately owned utilities, and other authorities, for
the provision of related services including, but not limited to
the following: administration, operation and maintenance,
billing and collection.
§16-13D-2. Definitions.
For the purposes of this article:
(a) The term "authority" shall mean any regional water
authority, regional wastewater authority, or regional water and
wastewater authority organized pursuant to the provisions of this
article; and
(b) The term "public agency" shall mean any municipality,
county, public service district, or other political subdivision
of this state.
§16-13D-3. Joint exercise of powers by certain public agencies;
agreements among agencies, contents; submission to public service commission; filing of agreement; prohibition against competition; retirement of bonds.
(a) Any powers, privileges or authority of a public agency
of this state relating to public water supplies, or the
transportation or treatment of wastewater, may be exercised
jointly with any other public agency of this state, or with any
agency of the United States to the extent that the laws of the
United States permit. Any agency of the state government when
acting jointly with any public or private agency may exercise all
of the powers, privileges and authority conferred by this act
upon a public agency.
(b)Any public agency may enter into agreements with one or
more other public agencies for the purpose of organizing a
regional water authority, regional wastewater authority, or
regional water and wastewater authority. Appropriate action by
ordinance, resolution or otherwise pursuant to law of the governing bodies of the participating public agencies shall be
necessary before any such agreement may enter into force.
(c) Any such agreement shall specify the following:
(1) Its duration;
(2)The precise organization, composition and nature of the
authority created thereby together with the powers delegated
thereto;
(3)Its purpose or purposes;
(4)The manner of financing for the authority and of
establishing and maintaining a budget therefor;
(5) The permissible methods for partial or complete
termination of the agreement and for disposing of property upon
such partial or complete termination;
(6)The manner of acquiring, holding and disposing of real
and personal property of the authority;
(7) Any other necessary and proper matters.
(d) Any such agreement may be amended to include additional
public agencies by consent of two thirds of the signatories to
the agreement, if no terms of agreement are changed, otherwise a
new agreement with the new public agency shall be drawn. Where
fewer than three public agencies come together to form an
authority, both parties must consent to the amendment of the
agreement to include additional public agencies.
(e) Prior to taking effect, every agreement made hereunder
shall be submitted to the public service commission for its
approval.
as to form and as to compliance with the provisions of
this article. The public service commission's authority
hereunder is limited to the review stated in this paragraph and it shall approve any agreement submitted hereunder unless it
shall find that the agreement does not meet the conditions set
forth herein, in which case it shall detail in writing addressed
to the governing bodies of the public agencies concerned the
specific respects in which the proposed agreement fails to meet
the requirements of law. Failure to disapprove an agreement
submitted hereunder within ninety days of its submission shall
constitute approval thereof.
(f)Prior to taking effect, an agreement made hereunder
shall be filed with the clerk of the county commission of each
county in which a member of the authority is located and such
agreement then also shall be filed with the secretary of state,
accompanied by a certificate from the clerk of the county
commission of the county, or counties, where filed, stating that
such agreement has been filed in such county.
(g) A public agency which enters into an agreement made
hereunder shall not offer or provide water or wastewater services
in competition with another public agency entering into such
agreement.
(h) A public agency which enters into an agreement made
hereunder shall not withdraw from the agreement until such time
as the outstanding bonded indebtedness of the authority is
retired or the bond holders are otherwise protected.
§16-13D-4. Furnishing of funds, personnel or services by certain
public agencies, agreements for purchase, sale, distribution, transmission, transportation and treatment of water or wastewater; terms and conditions.
Any public agency entering into an agreement pursuant to
this article may appropriate funds and may sell, lease, give, or
otherwise supply to the authority created such personnel or
services for the operation of such authority as may be within its
legal power to furnish.
Any public agency, whether or not a party to an agreement
pursuant to this article, and any publicly or privately owned
water distribution company may enter into contracts with any
regional water authority or regional water and wastewater
authority created pursuant to this article for the purchase of
water from such authority or the sale of water to the authority,
the treatment of water by either party and the distribution or
transmission of water by either party and any such authority may
enter into such contracts, subject to the prior approval of the
public service commission pursuant to the provisions of section
twelve, article two of chapter twenty-four of this code. Any
public agency, whether or not a party to an agreement pursuant to
this act, and any publicly or privately owned wastewater
transportation or treatment system may enter into contracts with
any regional wastewater authority or regional water and
wastewater authority created pursuant to this article for the
transportation and treatment of wastewater by either party and
any such authority may enter into such contracts, subject to the
prior approval of the public service commission pursuant to the
provisions of section twelve, article two of chapter twenty-four
of this code:
Provided, That if the public service commission
has not acted on any such proposed contract within ninety days of its filing, such approval shall be deemed to have been granted.
Any such contract may include an agreement for the purchase of
water not actually received or the treatment of wastewater not
actually treated. No such contract shall be made for a period in
excess of forty years, but renewal options may be included
therein. The obligations of any public agency under any such
contract shall be payable solely from the revenues produced from
such public agency's water or wastewater system, and the public
service commission, in the case of a public agency whose rates
are subject to its jurisdiction, shall permit the public agency
to recover through its rates revenues sufficient to meet its
obligations under such agreement.
§16-13D-5. Declaration of authority organization, when quasi-
governmental public corporation.
Upon the approval of the public service commission and
filing with the secretary of state, the secretary of state shall
declare the authority organized and give it the corporate name of
regional water authority number
, regional wastewater
authority number
, or regional water and wastewater authority
number
, whichever is appropriate. Thereupon the authority
shall be a quasi-governmental public corporation.
§16-13D-6. Governing body; appointments; terms of members,
voting rights.
The governing body of the authority shall consist of not
less than three persons selected by the participating public
agencies. Each participating public agency shall appoint at
least one and not more than two members. Each member's full term shall be not less than one year nor more than four years and
initial terms shall be staggered in accordance with procedures
set forth in the agreement provided for in section three of this
article and amendments thereto. In the case of an authority
which is made up by the agreement of two public agencies, each
public agency shall appoint two representatives to the governing
body.
The manner of selection of such governing body and terms of
office shall be set forth in the agreement provided for in
section three of this article and amendments thereto. The
governing body of the authority shall elect one of its members as
president, one as treasurer and one as secretary.
Each member shall have one vote in any matter that comes
before the authority for decision. However, the member agencies
shall, in the original agreement establishing the authority, set
forth any special weighing of such votes based upon population
served, volumes of water purchased, volumes of wastewater
treated, numbers of customers, or some other criterion, so as to
maintain fairness in the decisions and operations of the
authority.
§16-13D-7. Meetings of governing body; annual audit.
The governing body of the authority shall meet as often as
the needs of the authority require; but not less frequently than
on a quarterly basis. The governing body shall cause to be made
an annual audit of the financial records of the authority, the
cost of said audit to be paid by the authority.
§16-13D-8. Powers of governing body.
For the purpose of providing a water supply, transportation facilities, or treatment system to the participating public
agencies, and others, the governing body of the authority shall
have the following powers, authorities and privileges:
(1) To accept by gift or grant from any person, firm,
corporation, trust or foundation, or from this state or any other
state or any political subdivision or municipality thereof, or
from the United States, any funds or property or any interest
therein for the uses and purposes of the authority and to hold
title thereto in trust or otherwise and to bind the authority to
apply the same according to the terms of such gift or grant;
(2)To sue and be sued;
(3) To enter into franchises, contracts and agreements with
this or any other state or the United States or any municipality,
political subdivision or authority thereof, or any of their
agencies or instrumentalities, or any public or private person,
partnership, association, or corporation of this state or of any
other state or the United States, and this state and any such
municipality, political subdivision, authority, or any of their
agencies or instrumentalities, and any such public or private
person, partnership, association, or corporation is hereby
authorized to enter into contracts and agreements with such
authority for any term not exceeding forty years for the
planning, development, construction, acquisition, maintenance, or
operation of any facility or for any service rendered to, for, or
by said authority;
(4) To borrow money and evidence the same by warrants,
notes, or bonds as hereinafter provided in this article, and to
refund the same by the issuance of refunding obligations;
(5) To acquire land and interests in land by gift,
purchase, exchange or eminent domain, such power of eminent
domain to be exercised within or without the boundaries of the
authority in accordance with provisions of article two, chapter
fifty-four of this code;
(6) To acquire by purchase or lease, construct, install,
and operate reservoirs, pipelines, wells, check dams, pumping
stations, water purification plants, and other facilities for the
production, distribution and utilization of water, and
transportation facilities, pump stations, lift stations,
treatment facilities and other facilities for the transportation
and treatment of wastewater, and to own and hold such real and
personal property as may be necessary to carry out the purposes
of its organization, subject to the advance approval of the
public service commission for any proposed acquisition,
construction, installation or operation:
Provided, That the
public service commission shall act on all proposals submitted
under this paragraph within one hundred and twenty days of filing
with the commission:
Provided, however, That if the public
service commission has not acted within such period of time,
approval of such proposal shall be deemed granted;
(7) To have the general management, control, and
supervision of all the business, affairs, property and
facilities of the authority, and of the construction,
installation, operation and maintenance of authority
improvements, and to establish regulations relating thereto;
(8)To hire and retain agents, employees, engineers and
attorneys and to determine their compensation. The governing body shall select and appoint a general manager of the authority
who shall serve at the pleasure of said governing body. The
general manager shall have training and experience in the
supervision and administration of the system or systems operated
by the authority and shall manage and control the system under
the general supervision of said governing body. All employees,
servants and agents of the authority shall be under the immediate
control and management of said general manager. The general
manager shall perform all such other duties as may be prescribed
by said governing body and shall give the governing body a good
and sufficient surety company bond in a sum to be set and
approved by the governing body conditioned upon the satisfactory
performance of the general manager's duties. The governing body
may also require that any other employees be bonded in such
amount as it shall determine. The cost of said bonds shall be
paid out of the funds of the authority;
(9)To adopt and amend rules and regulations not in
conflict with the constitution and laws of this state, necessary
for the carrying on of the business, objects and affairs of the
governing body and of the authority;
(10)To have and exercise all rights and powers necessary or
incidental to or implied from the specific powers granted herein.
Such specific powers shall not be considered as a limitation upon
any power necessary or appropriate to carry out the purposes of
this article.
§16-13D-9. Revenue bonds.
For constructing or acquiring any water supply, wastewater
transportation, or treatment system for the authorized purposes of the authority, or necessary or incidental thereto, and for
constructing improvements and extensions thereto, and also for
reimbursing or paying the costs and expenses of creating the
authority, the governing body of any such authority is hereby
authorized to borrow money from time to time and in evidence
thereof issue the revenue bonds of such authority. Such revenue
bonds are hereby made a lien on the revenues produced from the
operation of the authority's system, but shall not be general
obligations of the public agencies participating in the
agreement. All revenue bonds issued under this article shall be
signed by the president of the governing body of the authority
and attested by the secretary of the governing body of the
authority and shall contain recitals stating the authority under
which such bonds are issued and that they are to be paid by the
authority from the net revenue derived from the operation of the
authority's system and not from any other fund or source and that
said bonds are negotiable and payable solely from the revenues
derived from the operation of the system under control of the
authority:
Provided, That in the case of a regional water and
wastewater authority, the statutory lien created hereby shall
only be a lien on the revenues of that service funded by the
proceeds of the sale of the bonds, it being understood that such
combined authority shall maintain separate books and records for
its water and wastewater operations. Such bonds may be issued in
one or more series, may bear such date or dates, may mature at
such time or times not exceeding forty years from their
respective dates, may bear interest at
such rate or rates not
exceeding eighteen percent per annum a rate not exceeding two percent above the interest rate on treasury notes, bills or bonds
of the same term as the term of the bond or bonds the week of
closing on the bond or bonds as reported by the treasury of the
United States, may be payable at such times, may be in such form,
may carry such registration privileges, may be executed in such
manner, may be payable at such place or places, may be subject to
such terms of redemption with or without premium, may be declared
or become due before maturity date thereof, may be authenticated
in any manner, and upon compliance with such conditions, and may
contain such terms and covenants as may be provided by resolution
or resolutions of the governing body of such authority.
Notwithstanding the form or tenor thereof, and in the absence of
any express recital on the face thereof, that the bond is
nonnegotiable, all such bonds shall be, and shall be treated as,
negotiable instruments for all purposes. Bonds bearing the
signatures of officers in office on the date of the signing
thereof shall be valid and binding for all purposes
notwithstanding that before the delivery thereof any or all of
the persons whose signatures appear thereon shall have ceased to
be such officers. Notwithstanding the requirements or provisions
of any other law, any such bonds may be negotiated or sold in
such manner and at such time or times as is found by the
governing body to be most advantageous, and all such bonds may be
sold at such price that the interest cost of the proceeds
therefrom does not exceed
nineteen percent per annum three
percent above the interest rate on treasury notes, bills or bonds
of the same term as the term of the bond or bonds the week of
closing on the bond or bonds as reported by the treasury of the United States, based on the average maturity of such bonds and
computed according to standard tables of bond values. Any
resolution or resolutions providing for the issuance of such
bonds may contain such covenants and restrictions upon the
issuance of additional bonds thereafter as may be deemed
necessary or advisable for the assurance of the payment of the
bonds thereby authorized.
§16-13D-10. Items included in cost of properties.
The cost of any water supply, wastewater transportation or
treatment system acquired or constructed under the provisions of
this article shall be deemed to include the cost of the
acquisition or construction thereof, the cost of all property
rights, easements and franchises deemed necessary or convenient
therefor and for the improvements and extensions thereto;
interest upon bonds prior to and during construction or
acquisition and for six months after completion of construction
or of acquisition of the improvements and extensions;
engineering, fiscal agents and legal expenses; expenses for
estimates of cost and of revenues, expenses for plans,
specifications and surveys; other expenses necessary or incident
to determining the feasibility or practicability of the
enterprise, administrative expense, and such other expenses as
may be necessary or incident to the financing herein authorized,
and the construction or acquisition of the properties and the
placing of same in operation, and the performance of the things
herein required or permitted, in connection with any thereof.
§16-13D-11. Bonds may be secured by trust indenture.
In the discretion and at the option of the governing body of
the authority, such bonds may be secured by a trust indenture by
and between the authority and a corporate trustee, which may be
a trust company or bank having powers of a trust company within
or without the state of West Virginia, but no such trust
indenture shall convey, mortgage or create any lien upon the
water supply, wastewater transportation or treatment system or
any part thereof of the authority or its member public agencies.
The resolution authorizing the bonds and fixing the details
thereof may provide that such trust indenture may contain such
provisions for protecting and enforcing the rights and remedies
of bondholders as may be reasonable and proper, not in violation
of law, including covenants setting forth the duties of the
authority and the members of its governing body and officers in
relation to the construction or acquisition of the water supply,
wastewater transportation or treatment system and the
improvement, extension, operation, repair, maintenance and
insurance thereof, and the custody, safeguarding and application
of all moneys, and may provide that all or any part of the
construction work shall be contracted for, constructed and paid
for, under the supervision and approval of consulting engineers
employed or designated by the governing body and satisfactory to
the original bond purchasers, their successors, assignees or
nominees, who may be given the right to require the security
given by contractors and by any depository of the proceeds of
bonds or revenues of the water supply, wastewater transportation
or treatment system or other money pertaining thereto be satisfactory to such purchasers, their successors, assignees or
nominees. Such indenture may set forth the rights and remedies
of the bondholders and such trustee.
§16-13D-12. Sinking fund for revenue bonds.
At or before the time of the issuance of any bonds under
this article the governing body of the authority shall by
resolution or in the trust indenture provide for the creation of
a sinking fund and for monthly payments into such fund from the
revenues of the water supply, wastewater transportation or
treatment system operated by the authority such sums in excess of
the cost of maintenance and operation of such properties as will
be sufficient to pay the accruing interest and retire the bonds
at or before the time each will respectively become due and to
establish and maintain reserves therefor. All sums which are or
should be, in accordance with such provisions, paid into such
sinking fund shall be used solely for payment of interest and for
the retirement of such bonds at or prior to maturity as may be
provided or required by such resolutions.
§16-13D-13. Collection, etc., of revenues and enforcement of
covenants; default; suit, etc., by bondholder or
trustee to compel performance of duties;
appointment and powers of receiver.
The governing body of any such authority shall have power to
insert enforceable provisions in any resolution authorizing the
issuance of bonds relating to the collection, custody and
application of revenues of the authority from the operation of
the water supply, wastewater transportation or treatment system under its control and to the enforcement of the covenants and
undertakings of the authority. In the event there shall be
default in the sinking fund provisions aforesaid or in the
payment of the principal or interest on any of such bonds or, in
the event the authority or its governing body or any of its
officers, agents or employees, shall fail or refuse to comply
with the provisions of this article, or shall default in any
covenant or agreement made with respect to the issuance of such
bonds or offered as security therefor, then any holder or holders
of such bonds and any such trustee under the trust indenture, if
there be one, shall have the right by suit, action, mandamus or
other proceeding instituted in the circuit court for the county
or any of the counties wherein the authority extends, or in any
other court of competent jurisdiction, to enforce and compel
performance of all duties required by this article or undertaken
by the authority in connection with the issuance of such bonds,
and upon application of any such holder or holders, or such
trustee, such court shall, upon proof of such defaults, appoint
a receiver for the affairs of the authority and its properties,
which receiver so appointed shall forthwith directly, or by his
agents and attorneys, enter into and upon and take possession of
the affairs of the authority and each and every part thereof, and
hold, use, operate, manage and control the same, and in the name
of the authority exercise all of the rights and powers of such
authority as shall be deemed expedient, and such receiver shall
have power and authority to collect and receive all revenues and
apply same in such manner as the court shall direct. Whenever
the default causing the appointment of such receiver shall have been cleared and fully discharged and all other defaults shall
have been cured, the court may in its discretion and after such
notice and hearing as it deems reasonable and proper direct the
receiver to surrender possession of the affairs of the authority
to its governing body. Such receiver so appointed shall have no
power to sell, assign, mortgage, or otherwise dispose of any
assets of the authority except as hereinbefore provided.
§16-13D-14. Statutory mortgage lien created; foreclosure
thereof.
There shall be and is hereby created a statutory mortgage
lien upon such water supply, wastewater transportation or
treatment system of the authority, which shall exist in favor of
the holders of bonds hereby authorized to be issued, and each of
them, and such system shall remain subject to such statutory
mortgage lien until payment in full of all principal of and
interest on such bonds.
§16-13D-15. Rates and charges.
The governing body shall by appropriate resolution make
provisions for the payment of said bonds by fixing rates, fees
and charges, for the use of all services rendered by such
authority, which rates, fees and charges shall be sufficient to
pay the costs of operation, improvement and maintenance of the
authority's water supply or wastewater transportation and/or
treatment system, to provide an adequate depreciation fund,
provide an adequate sinking fund to retire said bonds and pay
interest thereon when due, and to create reasonable reserves for
such purposes. Said fees, rates or charges shall be sufficient to allow for miscellaneous and emergency or unforeseen expenses.
The resolution of the governing body authorizing the issuance of
revenue bonds may include agreements, covenants or restrictions
deemed necessary or advisable by the governing body to effect the
efficient operation of the system and to safeguard the interests
of the holders of the revenue bonds and to secure the payment of
the bonds and the interest thereon.
§16-13D-16. Refunding revenue bonds.
The authority having issued bonds under the provisions of
this article is hereby empowered thereafter by resolution to
issue refunding bonds of such authority for the purpose of
retiring or refinancing such outstanding bonds, together with any
unpaid interest thereon and redemption premium thereunto
appertaining and all of the provisions of this article relating
to the issuance, security and payment of bonds shall be
applicable to such refunding bonds, subject, however, to the
provisions of the proceedings which authorized the issuance of
the bonds to be so refunded.
§16-13D-17. Exemption of bonds from taxation.
Said bonds and the interest thereon, together with all
properties and facilities of the authority owned or used in
connection with the water or wastewater system, and all the
moneys, revenues and other income of such authority derived from
such water or wastewater system shall be exempt from all taxation
by the state of West Virginia or any county, municipality,
political subdivision or agency thereof.
§16-13D-18. Bonds made legal investments.
Bonds issued under the provisions of this article shall be
legal investments for banks, building and loan associations, and
insurance companies organized under the laws of this state and
for a business development corporation organized pursuant to
chapter thirty-one, article fourteen of the code of West
Virginia.
§16-13D-19. Invalidity of part.
If any section or sections of this article be declared
unconstitutional or invalid, this shall not invalidate any other
section of this article.
§16-13D-20. Article to be liberally construed.
This article is necessary for the public health, safety and
welfare and shall be liberally construed to effectuate its
purposes.
§16-13D-21. Citation of article.
This article may be known and cited as the "Regional Water
and Wastewater Authority Act".
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