COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 185
(By Senators Tomblin, Mr. President, and Caruth,
By Request of the Executive)
____________
[Originating in the Committee on Finance;
reported February 22, 2007.]
____________
A BILL to amend and reenact §4-11A-1, §4-11A-2 and §4-11A-3 of the
Code of West Virginia, 1931, as amended; and to amend said
code by adding thereto fourteen new sections, designated §4-
11A-1a, §4-11A-6, §4-11A-7, §4-11A-8, §4-11A-9, §4-11A-10, §4-
11A-11, §4-11A-12, §4-11A-13, §4-11A-14, §4-11A-15, §4-11A-16,
§4-11A-17 and §4-11A-18, all relating to legislative
appropriation of tobacco settlement funds; setting forth
legislative findings and purposes; receipt of settlement funds
and required deposit in West Virginia Tobacco Settlement
Medical Trust Fund; receipt of settlement funds and required
deposit in the West Virginia Tobacco Settlement Fund; creating
Tobacco Settlement Finance Authority and providing for general
powers; establishing governing board of the authority;
defining staff of the authority; limiting liability; providing
certain definitions; authorizing sale of rights in a master settlement agreement; authorizing bonds of the authority;
providing for the use of proceeds of bonds of the authority;
providing an exemption from state purchasing provisions;
providing bankruptcy provisions; establishing the dissolution
of the authority; ensuring a revenue source remains for the
unfunded liabilities of the Old Fund to replace previous
legislative appropriation of tobacco settlement funds for the
benefit of the Old Fund; and construction of article.
Be it enacted by the Legislature of West Virginia:
That §4-11A-1, §4-11A-2 and §4-11A-3 of the Code of West
Virginia, 1931, as amended, be amended and reenacted; and that said
code be amended by adding thereto fourteen new sections, designated
§4-11A-1a, §4-11A-6, §4-11A-7, §4-11A-8, §4-11A-9, §4-11A-10, §4-
11A-11, §4-11A-12, §4-11A-13, §4-11A-14, §4-11A-15, §4-11A-16,
§4-11A-17 and §4-11A-18, all to read as follows:
ARTICLE 11A. LEGISLATIVE APPROPRIATION OF TOBACCO SETTLEMENT
FUNDS; CREATION OF TOBACCO SETTLEMENT FINANCE
AUTHORITY.
§4-11A-1. Legislative findings and purpose.
(a) On the twenty-third day of November, one thousand nine
hundred ninety-eight, tobacco product manufacturers entered into a
settlement agreement with the state. This master settlement
agreement releases those manufacturers from past, present and
specific future claims against them in return for payment of annual sums of money to the state, obligates the manufacturers to change
their advertising and marketing practices and requires the
establishment by the manufacturers of a national foundation for the
interests of public health.
(b) The revenues received pursuant to the master settlement
agreement are directly related to the past, present and future
costs incurred by the state for the treatment of tobacco-related
illnesses.
The receipt of revenues in the future is subject to the
ongoing risk of litigation against manufacturers or other events
that may adversely affect the financial strength of the
manufacturers. The purpose of this article is to preserve the
revenues received from the settlement.
(c) The receipt of funds in accordance with the master
settlement agreement shall be deposited only in accordance with the
provisions of this article.
(d)
West Virginia The state receives
approximately seventy
million dollars in revenue each year under the terms of the master
settlement agreement with the tobacco manufacturers. This revenue
is used to fund programs of vital importance to the people of West
Virginia and the Legislature finds that it is in the best interest
of the people of this state to protect these revenues
by the sale
of the state's share to the Tobacco Settlement Finance Authority
created in section six of this article.
§4-11A-1a. Legislative findings related to securitization of moneys received pursuant to master settlement
agreement and previously dedicated to the Workers'
Compensation Debt Reduction Fund.
(a) In December, two thousand five, the Governor issued a
proclamation regarding the privatization of the workers'
compensation system pursuant to section eleven, article two-c,
chapter twenty-three of this code, thereby proclaiming that a
revenue source had been secured to satisfy the Old Fund liabilities
as they occur;
(b) A portion of the revenue source secured to satisfy the Old
Fund liabilities as they occur was the first thirty million dollars
received pursuant to section IX(c)(1) of the master settlement
agreement and the anticipated strategic compensation payments to be
received pursuant to section IX(c)(2) of the master settlement
agreement;
(c) For purposes of the proclamation, it was assumed that the
first thirty million dollars received pursuant to section IX(c)(1)
of the master settlement agreement and the anticipated strategic
compensation payments to be received pursuant to section IX(c)(2)
of the master settlement agreement as calculated pursuant to
subsection (a), section twelve of this article would on a calendar
year basis provide a maximum of fifty million dollars per year to
satisfy the Old Fund liabilities as they occur;
(d) The Legislature finds and declares that replacing the first thirty million dollars received pursuant to section IX(c)(1)
of the master settlement agreement and the anticipated strategic
compensation payments to be received pursuant to section IX(c)(2)
of the master settlement agreement with fifty million, four hundred
thousand dollars pursuant to section eighteen of this article for
the benefit of the Old Fund, in combination with the remaining
portions of the revenue sources secured for the unfunded
liabilities of the Old Fund as established in Enrolled Senate Bill
No. 1004 during the first extraordinary session of the Legislature,
two thousand five, will ensure that a revenue source has been and
will continue to remain secured to satisfy the Old Fund liabilities
as they occur; and thus all conditions precedent to the issuance of
the proclamation by the Governor remain in effect.
§4-11A-2. Receipt of settlement funds and required deposit in West
Virginia Tobacco Settlement Medical Trust Fund until
the first day of June, two thousand five, then to
Workers' Compensation Debt Reduction Fund; deposit of
strategic compensation payments; transfer of trust
fund moneys.
(a) The Legislature finds and declares that certain dedicated
revenues should be preserved in trust for the purpose of
stabilizing the state's health-related programs and delivery
systems. It further finds and declares that these dedicated
revenues should be preserved in trust for the purpose of educating the public about the health risks associated with tobacco usage and
establishing a program designed to reduce and stop the use of
tobacco by the citizens of this state and in particular by
teenagers.
(b) There is hereby created a special account in the State
Treasury, designated the West Virginia Tobacco Settlement Medical
Trust Fund, which shall be an interest-bearing account and may be
invested in the manner permitted by section nine, article six,
chapter twelve of this code, with the interest income a proper
credit to the fund. Unless contrary to federal law, fifty percent
of all revenues received pursuant to the master settlement
agreement shall be deposited in this fund. Funds paid into the
account may also be derived from the following sources:
(1) All interest or return on investment accruing to the fund;
(2) Any gifts, grants, bequests, transfers or donations which
may be received from any governmental entity or unit or any person,
firm, foundation or corporation;
(3) Any appropriations by the Legislature which may be made
for this purpose; and
(4) Any funds or accrued interest remaining in the Board of
Risk and Insurance Management Physicians' Mutual Insurance Company
account created pursuant to section seven, article twenty-f,
chapter thirty-three of this code on or after the first day of
July, two thousand four.
(c) (1) The moneys from the principal in the trust fund may
not be expended for any purpose, except that on the first day of
April, two thousand three, the Treasurer shall transfer to the
Board of Risk and Insurance Management Physicians' Mutual Insurance
Company account created by section seven, article twenty-f, chapter
thirty-three of this code, twenty-four million dollars from the
West Virginia Tobacco Settlement Medical Trust Fund for use as the
initial capital and surplus of the Physicians' Mutual Insurance
Company created pursuant to said article. The remaining moneys in
the trust fund resulting from interest earned on the moneys in the
fund and the return on investments of the moneys in the fund shall
be available only upon appropriation by the Legislature as part of
the state budget and expended in accordance with the provisions of
section three of this article.
(2) Notwithstanding any other provision of this code to the
contrary, on the effective date of the amendment and reenactment of
this section during the regular session of the Legislature in two
thousand six, all moneys in the trust fund and any interest or
other return earned thereon shall be transferred to the revenue
shortfall reserve fund - Part B created in section twenty, article
two, chapter eleven-b of this code and the trust fund shall be
closed. No provisions of the amendments made to this section
during the regular session of the Legislature in two thousand six
may be construed to change the requirements of this section for the deposit of revenues received pursuant to the
tobacco master
settlement agreement into the Workers' Compensation Debt Reduction
Fund.
(d) Notwithstanding the preceding subsections to the contrary,
the first thirty million dollars of all revenues received after the
thirtieth day of June, two thousand five, pursuant to section
IX(c)(1) of the
tobacco master settlement agreement shall in the
fiscal year beginning the first day of July, two thousand five, and
each fiscal year thereafter, be deposited in the Workers'
Compensation Debt Reduction Fund established in the State Treasury
in section five, article two-d, chapter twenty-three of this code.
Receipts in excess of thirty million dollars shall be deposited
into the tobacco settlement fund provided in section three of this
article.
(e) Notwithstanding anything in this code to the contrary,
strategic compensation payments received pursuant to section
IX(c)(2) of the
tobacco master settlement agreement, beginning in
two thousand eight, shall be deposited in their entirety in the
Workers' Compensation Debt Reduction Fund.
(f) Notwithstanding anything in this code to the contrary, on
the effective date of the sale of the state's share to the
authority as authorized in this article, the deposits and transfers
provided in this section shall cease and no longer be required.
§4-11A-3. Receipt of settlement funds and required deposit in the West Virginia Tobacco Settlement Fund.
(a) There is hereby created in the State Treasury a special
revenue account, designated the Tobacco Settlement Fund, which
shall be an interest-bearing account and may be invested in the
manner permitted by the provisions of article six, chapter twelve
of this code, with the interest income a proper credit to the fund.
Unless contrary to federal law, fifty percent of all revenues
received pursuant to the master settlement agreement shall be
deposited in this fund. These funds shall be available only upon
appropriation by the Legislature as part of the state budget:
Provided, That for the fiscal year two thousand, the first five
million dollars received into the fund shall be transferred to the
Public Employees Insurance Reserve Fund created in article two,
chapter five-a of this code.
(b) Appropriations from the Tobacco Settlement Fund are
limited to expenditures for the following purposes:
(1) Reserve funds for continued support of the programs
offered by the Public Employees Insurance Agency established in
article sixteen, chapter five of this code;
(2) Funding for expansion of the federal-state Medicaid
program as authorized by the Legislature or mandated by the federal
government;
(3) Funding for public health programs, services and agencies;
and
(4) Funding for any state-owned or -operated health
facilities.
(c) Notwithstanding anything in this code to the contrary, on
the effective date of the sale of the state's share to the
authority as authorized in this article, the deposits and transfers
provided in this section shall cease and no longer be required.
§4-11A-6. Creation of Tobacco Settlement Finance Authority.
(a) The Tobacco Settlement Finance Authority is hereby created
and constitutes a body corporate and politic, constituting a public
corporation and government instrumentality of the state and the
exercise of its powers pursuant to this article is an essential
governmental function.
(b) The authority shall not create any obligation of this
state or any political subdivision of this state within the meaning
of any constitutional or statutory debt limitation.
(c) The authority shall not pledge the credit or taxing power
of the state or any political subdivision of this state, or make
its debts payable out of any moneys except those of the authority
specifically pledged for their payment.
§4-11A-7. Definitions.
Unless the context clearly indicates otherwise, as used in
this article:
(a) "Authority" means the Tobacco Settlement Finance Authority
created in this article.
(b) "Board" means the governing board of the authority.
(c) "Bonds" means bonds, notes and other obligations and
financing arrangements issued or entered into by the authority
pursuant to this article.
(d) "Complementary legislation" means article nine-d, chapter
sixteen of this code.
(e) "Interest rate agreement" means an interest rate swap or
exchange agreement, an agreement establishing an interest rate
floor or ceiling or both, or any similar agreement. Any agreement
may include the option to enter into or cancel the agreement or to
reverse or extend the agreement.
(f) "Master settlement agreement" means the master settlement
agreement as defined in section one of this article.
(g) "Net proceeds" means the amount of proceeds remaining
following each sale of bonds which are not required by the
authority to establish and fund reserve funds, to fund an operating
expense reserve for the authority, to fund capitalized interest, if
any, and to pay the costs of issuance and other expenses and fees
related to the authorization and issuance of bonds.
(h) "Notes" means notes, warrants, loan agreements and all
other forms of evidence of indebtedness authorized under this
article.
(i) "Qualified investments" means investments of the authority
authorized pursuant to this article as established by the authority pursuant to subdivision (11), subsection (a), section eleven of
this article.
(j) "Qualifying statute" has the meaning given that term in
the master settlement agreement, constituting article nine-b,
chapter sixteen of this code.
(k) "Sales agreement" means any agreement authorized pursuant
to this article in which the state provides for the sale of all or
a portion of the state's share to the authority.
(l) "State's share" means all of the following:
(1) All payments required to be made by tobacco product
manufacturers to the state, and the state's rights to receive the
payments, under the master settlement agreement.
(2) The state's rights in any collateral securing or otherwise
assuring the receipt of the moneys.
§4-11A-8. Governing board.
(a) The powers of the authority are vested in and shall be
exercised by a board of five individuals, consisting of the
Secretary of the Department of Administration, who shall act as
chairperson, and four individuals, each appointed by the Governor,
who shall have skill and experience in finance.
(b) Three members of the board constitute a quorum.
(c) The members shall elect a vice chairperson and secretary,
annually, and other officers as the members determine necessary.
(d) Meetings of the board shall be held at the call of the chairperson or when a majority of the members request a meeting.
(e) The members of the board shall not receive compensation by
reason of their membership on the board.
(f) Of the initial appointments made by the Governor to the
authority, two shall be for a term of two years and two shall be
for a term of three years. Members appointed to the authority
subsequent to the initial appointments shall serve for terms of
four years. Any member whose term has expired shall serve until
his or her successor has been duly appointed and qualified. Any
person appointed to fill a vacancy shall serve only for the
unexpired term.
§4-11A-9. Staff; assistance by state officers, agencies and
departments.
(a) The Secretary of the Department of Administration shall
furnish to the authority any secretarial, clerical, technical,
research and other services that are necessary to the conduct of
the business of the authority.
(b) State officers, agencies and departments may render
services to the authority within their respective functions, as
requested by the authority.
§4-11A-10. Limitation of liability.
Members of the board and persons acting on the authority's
behalf, while acting within the scope of their employment or
agency, are not subject to personal liability resulting from carrying out the powers and duties conferred on them under this
article.
§4-11A-11. General powers.
(a) The authority has all the general powers necessary to
carry out its purposes and duties and to exercise its specific
powers, including, but not limited to, the power to:
(1) Enter into sales agreements and acquire by purchase,
grant, lease, gift or otherwise from the state its right, title and
interest in and to the state's share, including, without
limitation, the rights of the state to receive the moneys due to it
under this article and the rights in any collateral securing or
otherwise assuring the receipt of the moneys;
(2) Sell, pledge or assign, as security or consideration, the
state's share sold to the authority pursuant to one or more sales
agreements, to provide for and secure the issuance and repayment of
its bonds or to implement alternative funding options;
(3) Issue and sell one or more series or classes of bonds,
notes or other obligations through public bidding, private
placement or negotiated underwriting to finance the acquisition
referred to in this article;
(4) Refund and refinance the authority's debts and obligations
and to manage its funds, obligations and investments as necessary
and if consistent with its purpose;
(5) Enter into funding options consistent with this article, including refunding and refinancing its debt and obligations;
(6) Enter into credit enhancements, liquidity agreements or
interest rate agreements;
(7) Have perpetual succession as a public instrumentality and
agency of the state, until dissolved in accordance with this
article;
(8) Sue and be sued in its own name;
(9) Make and execute agreements, contracts and other
instruments with any public or private person, in accordance with
this chapter;
(10) Retain or employ counsel, auditors, investment bankers,
trustees, economic experts and any other private consultants and
advisors, on a contract basis or otherwise, necessary or desirable
for rendering legal, banking, financial or other professional,
management or technical services or advice in connection with the
acquisition and financing referred to in this article and pay for
all of the services from the proceeds of the bonds;
(11) Establish investment guidelines, designate qualified
investments and invest funds;
(12) Procure insurance, other credit enhancements, liquidity
agreements and other financing arrangements and to execute
instruments and contracts and to enter into agreements convenient
or necessary to facilitate financing arrangements of the authority;
and to fulfill the purposes of the authority under this article, including, but not limited to, any arrangements, instruments,
contracts and agreements as municipal bond insurance, liquidity
facilities, interest rate agreements and letters of credit;
(13) Accept appropriations, gifts, grants, loans or other aid
from public or private entities;
(14) Acquire, own, hold, administer and dispose of property;
(15) Determine, in connection with the issuance of bonds, and
subject to the sales agreement, the terms, documentation and other
details of the financing;
(16) Hold, use, sell, convey, mortgage, pledge, exchange or
otherwise dispose of the state's share and any proceeds or further
rights associated with the state's share;
(17) Establish a trust which is entitled to receive revenues
and bond proceeds of the authority that are in excess of the
authority's expenses, debt service and contractual obligations and
to transfer its ownership interest in the trust to the state as the
noncash portion of the purchase price for the state's share; and
(18) Include in its agreements with the holders of the bonds
the nonimpairment pledge as described in subdivision (7),
subsection (c), section twelve of this article.
(b) Other than the payments of debt service on its bonds, the
authority may not make payments or distributions to private
interests or private individuals unless those payments are
reasonable in amount and paid in exchange for the performance of services.
§4-11A-12. Authorization of the sale of rights in the master
settlement agreement.
(a) The sale of the state's share shall be authorized by an
executive order issued by the Governor as authorized in this
section. The executive order shall be received by the Secretary of
State and filed in the State Register pursuant to section three,
article two, chapter twenty-nine-a of this code:
Provided, That
the Governor shall not issue the executive order unless the
aggregate collective amount of net sale proceeds received by the
state from the sale of the state's share is not less than seven
hundred fifty million dollars.
(b) The Governor may sell and assign all or a portion of the
state's share to the authority pursuant to one or more sales
agreements for the purpose of securitization of the amounts
received by the state under the master settlement agreement.
(c) The terms and conditions of the sale established in any
sales agreement shall include the following:
(1) A requirement that the state enforce its right to collect
all moneys due from the participating tobacco manufacturers
pursuant to the provisions of the master settlement agreement,
including, without limitation, the state's share that has been sold
to the authority under a sales agreement, and, in addition, that
the state shall diligently enforce the qualifying statute as contemplated in section IX (d)(2)(b) of the master settlement
agreement and the complementary legislation against all tobacco
product manufacturers selling tobacco products in the state and
that are not in compliance with the qualifying statute or the
complementary legislation, in each case in the manner and to the
extent considered necessary in the judgment of the Attorney General
of the state;
(2) A requirement that the state not agree to any amendment of
the master settlement agreement, the qualifying statute, the
complementary legislation, this article or the sales agreement that
materially and adversely affects the authority's ability or rights
to receive the state's share that has been sold to the authority or
the authority's rights and powers under this article and the sales
agreement;
(3) An agreement that the anticipated use by the state of sale
proceeds received pursuant to the sales agreement shall be for the
purposes set forth in this article;
(4) A requirement that the aggregate collective amount of net
sale proceeds received by the state from the sale of the state's
share shall not be less than seven hundred fifty million dollars;
(5) A requirement that the proceeds received by the state from
the sale of the state's share be applied by the state upon receipt
to the Consolidated Public Retirement Board for deposit into the
State Teachers Retirement System to redeem a portion of the unfunded actuarial accrued liability;
(6) A requirement that the state may receive from the
authority, as the purchase price for the sale, any combination of
cash, securities and direct or beneficial ownership interests in
property, including, but not limited to, the allocable beneficial
interest in the residual state's share cash flows not needed to
meet the bond debt service allocable to the state's share purchased
by the authority from the state, whether by an initial sale or
sales of the authority's bonds;
(7) A requirement that the state take all action necessary to
maintain the tax exempt status, if any, of the interest on the
authority's bonds; and
(8) A requirement that the state will pledge to and agree with
the holders of the authority's bonds and with any person or entity
that contracts with the authority in connection with the issuance
of the bonds that the state will not alter, limit or impair: (i)
The rights vested in the authority to receive the state's share, to
exercise its powers, or the ability to fulfill the terms of any
contract entered into with the holders of the authority's bonds or
any person or entity with reference to the authority's bonds; and
(ii) the rights and remedies of the holders of any of the
authority's bonds. The state's pledge and agreement shall continue
in full force and effect until the authority's legal commitments
with respect to the authority's bonds and contracts have been discharged in full.
(d) Any sale made under this section shall be irrevocable.
Any sale shall constitute and be treated as a true and absolute
sale and absolute transfer of the property transferred and not as
a pledge or other security interest for any borrowing.
(e) On or after the effective date of any sale, the state
shall not have any right, title or interest in the portion of the
state's share sold, and the portion of the state's share sold shall
be the property of the authority and not the state. None of the
property sold by the state pursuant to this section shall be
subject to garnishment, levy, execution, attachment or other
process, or remedy in connection with the assertion or enforcement
of any debt, claim, settlement or judgment against the state.
(f) On or before the effective date of any sale, the state
shall notify the escrow agent under the master settlement agreement
of the sale and shall irrevocably direct the escrow agent under the
master settlement agreement that, subsequent to that date, all
payments constituting the state's share or a portion thereof shall
be made directly to the authority or its designee.
§4-11A-13. Authorization of bonds of the authority.
(a) The authority may issue bonds in more than one series and,
if bonds are issued, shall use the net proceeds to purchase the
state's share pursuant to the sales agreement to be applied as set
forth in section twelve of this article. In connection with the issuance of bonds and subject to the terms of the sales agreement,
the authority shall determine the terms and other details of the
financing. Bonds issued pursuant to this section may be secured by
a pledge of the state's share purchased by the authority. The
authority may also issue refunding bonds, including advance
refunding bonds, for the purpose of refunding previously issued
bonds, and may issue other types of bonds, notes or other debt
obligations and financing arrangements necessary to fulfill its
purposes or the purposes of this article.
(b) The authority may issue its bonds in principal amounts
which, in the opinion of the authority, are necessary to provide
sufficient funds for achievement of its purposes, the payment of
interest on its bonds, the establishment of reserves to secure the
bonds, the costs of issuance of its bonds and all other
expenditures of the authority incident to and necessary to carry
out its purposes or powers. The bonds are investment securities
and negotiable instruments within the meaning of and for the
purposes of article eight, chapter forty-six of this code, subject
only to the provisions of the notes or bonds for registration,
unless otherwise provided by resolution of the authority.
(c) Bonds issued by the authority are payable solely and only
out of the moneys, assets or revenues pledged by the authority and
are not a general obligation or indebtedness of the authority or an
obligation or indebtedness of the state or any subdivision of the state. The authority shall not pledge the credit or taxing power
of the state or any political subdivision of the state, or create
a debt or obligation of the state, or make its debts payable out of
any moneys except those of the authority.
(d) Bonds of the authority shall state on their face that they
are payable both as to principal and interest solely out of the
assets of the authority pledged for their purpose and do not
constitute an indebtedness of the state or any political
subdivision of the state; are secured solely by and payable solely
from assets of the authority pledged for such purpose; constitute
neither a general, legal nor moral obligation of the state or any
of its political subdivisions; and that the state has no obligation
or intention to satisfy any deficiency or default of any payment of
the bonds.
(e) Any amount pledged by the authority to be received under
any sales agreement is valid and binding at the time the pledge is
made. Amounts pledged and then or thereafter received by the
authority are immediately subject to the lien of the pledge without
any physical delivery thereof or further act. The lien of any
pledge is valid and binding as against all parties having claims of
any kind against the authority whether the parties have notice of
the lien or not. Notwithstanding any other provision of law, the
pledge is not subject to article nine, chapter forty-six of this
code. Notwithstanding any other provision to the contrary, the resolution of the authority or any other instrument by which a
pledge is created need not be recorded or filed to perfect the
pledge.
(f) The proceeds of bonds issued by the authority may be
invested in any security or obligation approved by the board and
specified in the trust indenture or resolution pursuant to which
the bonds must be issued, notwithstanding any other provision to
the contrary provided that any sales proceeds derived from tax
exempt bonds are invested in a manner prescribed by the board so as
to maintain the tax exempt status of the bonds.
(g) The exercise of the powers granted to the authority by
this article will be in all respects an essential governmental
function and for the benefit of the people of the state and is a
public purpose. The authority, its property, income and all bonds
and all interest and income thereon are exempt from all taxation by
this state and any county, municipality, political subdivision or
agency thereof.
(h) Bonds of the authority shall comply with all of the
following:
(1) The bonds may be issued in one or more series and shall be
in a form, issued in denominations, carry such registration
privileges and payable over terms and with rights of redemption as
the board prescribes in the trust indenture or resolution
authorizing their issuance;
(2) The bonds shall be fully negotiable instruments under the
laws of this state and may be sold at prices, at public or private
sale, and in a manner as prescribed by the board; and
(3) The bonds are subject to the terms, conditions and
covenants providing for the payment of the principal, redemption
premiums, if any, interest which may be fixed or variable,
including, but not limited to, zero coupon bonds and capital
appreciation bonds, during any period the bonds are outstanding,
and other terms, conditions, covenants and protective provisions
safeguarding payment as determined by the trust indenture or
resolution of the board authorizing their issuance.
(i) The bonds issued under this article are securities in
which insurance companies and associations and other persons
engaged in the business of insurance; banks, trust companies,
savings associations, savings and loan associations and investment
companies; administrators, guardians, executors, trustees and other
fiduciaries; and other persons authorized to invest in bonds or
other obligations of the state may properly and legally invest
funds, including capital, in their control or belonging to them.
(j) Bonds must be authorized by a resolution of the board. A
resolution authorizing the issuance of bonds may delegate to an
officer of the authority the power to negotiate and fix the details
of an issue of bonds and of their sale by an appropriate
certificate of the authorized officer or by execution and delivery of a trust indenture or bond purchase agreement. The bonds and
notes shall be executed by the chairperson and secretary of the
authority, both of whom may use facsimile signatures. In case any
officer whose signature, or a facsimile of whose signature, appears
on any bonds or notes ceases to be an officer before delivery of
the bonds or notes, the signature or facsimile is nevertheless
sufficient for all purposes the same as if he or she had remained
in office until the delivery.
(k) The authority may issue one or more series of bonds at any
time or times so that interest on the bonds may be or remain exempt
from federal taxation or to comply with the purposes specified in
this article:
Provided, That the state shall covenant and agree to
invest any funds received from the sales agreement which were
derived from tax exempt bonds issued by the authority in a manner
prescribed from the authority.
(l) In connection with the issuance of any bonds authorized
and issued pursuant to this section, and in addition to the funds
and accounts established elsewhere in this article, the board may,
under the trust indenture or resolution pursuant to which the bonds
are issued, establish any other accounts, subaccounts or reserves
determined necessary by the board.
(m) While bonds of the authority are outstanding, the state
shall not agree to any amendment of the master settlement
agreement, the qualifying statute, the complementary legislation, this article or the sales agreement that materially and adversely
affects the authority's ability or rights to receive the state's
share that has been sold to the authority or the authority's rights
and powers under this article and the sales agreement. The
provision of this section shall be part of the contractual
obligation owed to the holders of the authority's bonds.
§4-11A-14. Exemption from purchasing provisions.
The provisions of article three, chapter five-a of this code
shall not apply to the authority with respect to contracts entered
into by the authority in carrying out the public and essential
governmental functions set forth in this article and are exempt
from the laws of the state which provide for competitive bids and
hearings in connection with contracts and for review as to the form
of contracts by the office of the Attorney General of the state.
§4-11A-15. Bankruptcy.
Notwithstanding any other provision of law, the authority is
not authorized, and no governmental officer or organization shall
authorize the authority to become a debtor in a case under the
United States bankruptcy code, Title 11 of the United States Code,
to make an assignment for the benefit of creditors or to become the
subject of any similar case or proceeding. The provisions of this
section shall be part of any contractual obligation owed to holders
of any bonds issued pursuant to this article and shall not be
modified by the state prior to the date which is three hundred sixty-six days after which the authority no longer has any bonds
outstanding.
§4-11A-16. Dissolution of the authority; distribution of assets.
The authority shall dissolve not sooner than three hundred
sixty-six days after it no longer has any bonds outstanding and no
later than two years from the date of final payment of all
outstanding bonds and the satisfaction of all outstanding
obligations of the authority, except to the extent necessary to
remain in existence to fulfill any outstanding covenants or
provisions with bondholders or third parties made in accordance
with this article. Upon dissolution of the authority, all assets
of the authority shall be transferred to the state, and the
authority shall execute any necessary assignments or instruments,
including any assignment of any right, title or ownership to the
state for receipt of payments under the master settlement
agreement. In no event shall the authority dissolve while any
bonds of the authority are outstanding.
§4-11A-17. Construction.
This article, being considered necessary for the welfare of
the state and its people, shall be liberally construed to affect
its purpose.
§4-11A-18. Dedication of personal income tax proceeds as
replacement moneys for anticipated tobacco master
settlement agreement proceeds to the Old Fund.
(a) There is hereby dedicated an annual amount of fifty
million four hundred thousand dollars from annual collections of
the tax imposed by article twenty-one, chapter eleven of this code
as a portion of the revenue source dedicated to satisfy the Old
Fund liabilities as they occur to provide a dollar for dollar
replacement of the first thirty million dollars received pursuant
to section IX(c)(1) of the master settlement agreement and the
anticipated strategic compensation payments to be received pursuant
to section IX(c)(2) of the master settlement agreement as
previously dedicated to the Old Fund prior to the sale of state's
share to the Tobacco Settlement Finance Authority. No portion of
this amount may be pledged for payment of debt service on revenue
bonds issued pursuant to article two-d, chapter twenty-three of
this code.
(b) Notwithstanding any other provision of this code to the
contrary, beginning immediately after the sale of the state's share
to the Tobacco Settlement Finance Authority, fifty million four
hundred thousand dollars from collections of the tax imposed by
article twenty-one, chapter eleven of this code shall be deposited
each calendar year to the credit of the Old Fund created in article
two-d, chapter twenty-three of this code in accordance with the
following schedule. Each calendar month, except for July, August
and September each year, five million six hundred thousand dollars
shall be transferred, on or before the twenty-eighth day of the month, to the Workers' Compensation Debt Reduction Fund created in
article two-d, chapter twenty-three of this code. The transfers
pursuant to this section are in addition to the transfers pursuant
to section ninety-six of article twenty-one, chapter eleven of this
code.
(c)
Expiration. -- The transfers required by this section
shall continue to be made until the governor certifies to the
Legislature that an independent actuary study determined that the
unfunded liability of the Old Fund, as defined in chapter twenty-
three of this code, has been paid or provided for in its entirety.
No transfer pursuant to this section shall be made thereafter.
Email
Webmaster | © 2024 West Virginia Legislature **
