H. B. 4036
(By Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive]
[Introduced January 14, 2004; referred to the
Committee on Finance.]
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 seventeen
new sections, designated
§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, §4-11A-18, §4-11A-19, §4-11A-20, §4-11A-21 and
§4-11A-22
, 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; creation of tobacco
settlement finance authority and providing for general powers;
establishing governing board of authority; defining staff of the authority; limitation of liability; providing certain
definitions; authorizing sale of rights in a master settlement
agreement; authorization of bonds of the authority; providing
for the use of proceeds of bonds of the authority; creating a
workers' compensation commission settlement account; providing
an exemption from state purchasing provisions; providing for
the delivery of an annual report by the authority to the
governor; providing bankruptcy provisions; establishing the
dissolution of the authority; severability of sections; 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 seventeen new sections,
designated §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, §4-11A-18, §4-11A-19, §4-11A-20, §4-11A-21 and §4-11A-22
,
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 such revenues in the future at or above
current amounts 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 receives approximately seventy million
dollars in revenue each year under the terms of the master
settlement agreement with the tobacco manufacturers. The 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.
(e) A deficit exists in the workers' compensation fund of such
critical proportions that it constitutes an imminent threat to the
immediate and long-term solvency of the fund.
(f) The prudent use of available moneys is necessary to
supplement ongoing efforts to reduce and eliminate this threat.
(g) As a result of financial distress that occurred in the
state during the 1980's, the death, disability and retirement fund
of the West Virginia state police and the judges' retirement system
each has a significant unfunded actuarial accrued liability that is
being amortized over a term of years ending no later than two
thousand thirty-four through annual appropriations in addition to
amounts appropriated annually for the normal cost contribution to
such pension system.
(h) Providing funds to create an actuarially sound death,
disability and retirement fund of the West Virginia state police
and judges' retirement system would relieve the state from ongoing
financial burdens and would otherwise be beneficial to residents of
the state.
(i) The sale of all or a portion of the revenues, the issuance
of bonds payable from the revenues and the application of proceeds
of such bonds to provide funding for programs of vital importance to the people of West Virginia is in the best interest of the
people of this state, including, but not limited to, creating an
actuarially sound death, disability and retirement fund of the West
Virginia state police and an actuarially sound judges' retirement
system and improving the solvency of the workers' compensation
fund.
§4-11A-2. Receipt of settlement funds and required deposit in West
Virginia tobacco settlement medical trust fund.
(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 and for other public purposes. It further finds and
declares that certain of these dedicated revenues should also be
preserved in trust for the purpose of educating the public about
the health risks associated with tobacco usage and for the
establishment of 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. The fund shall consist of a principal
sub-account and an interest sub-account. Unless contrary to
federal law, fifty percent of all revenues received pursuant to the
master settlement agreement and not sold by the state pursuant to
section thirteen of this article, shall be deposited in this fund.
Funds paid into the account may also be derived from the following
sources:
(1) Proceeds from the tobacco settlement authority's sale of
tobacco settlement bonds in the amount set forth in section
thirteen of this article;
(1) (2) All interest or return on investment accruing to the
fund;
(2) (3) Any gifts, grants, bequests, transfers or donations
which may be received from any governmental entity or unit or any
person, firm, foundation or corporation; and
(3) (4) Any appropriations by the Legislature which may be
made for this purpose; and
(5) 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) Except as provided below, the moneys from the principal sub-account 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 article twenty-f, chapter thirty-three of this code.
The remaining moneys in the interest sub-account 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. The moneys in the interest sub-account 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: Provided, That commencing with the
fiscal year of the state beginning on the first day of July, two
thousand six, and for each fiscal year thereafter, in the event
moneys have been transferred to the principal sub-account pursuant to section thirteen of this article, there shall be transferred
from the interest sub-account to the department of health and human
resources the sum of ten million dollars for deposit in the tobacco
settlement expenditure fund - tobacco education program - activity
nine hundred six, to be used at the discretion of the secretary of
the department of health and human resources for the purpose of
educating the public about the health risks associated with tobacco
usage and for the establishment of a program designed to reduce and
stop the use of tobacco by the citizens of this state and in
particular by teenagers: Provided, however, That in the event that
in any fiscal year there are insufficient funds in the interest
sub-account to make the required transfer to the department of
health and human resources, funds shall be transferred to the
department of health and human resources from the principal
sub-account in an amount necessary to satisfy the deficiency.
§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 and not sold
by the state pursuant to section thirteen of this article, 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 the provisions of section two, article
two, chapter twelve of this code, moneys within the tobacco
settlement trust fund may not be redesignated for any purpose other
than those set forth in this section.
§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.
(b) The purposes of the authority include all of the
following:
(1) To establish a stable source of revenue to be used for the
purposes designated in this article.
(2) To enter into sales agreements.
(3) To issue bonds and enter into funding options, consistent
with this article, including refunding and refinancing its debt and
obligations.
(4) To sell, pledge, or assign, as security or consideration,
all or a portion of the state's share sold to the authority
pursuant to a sales agreement, to provide for and secure the
issuance and repayment of its bonds.
(5) To invest funds as provided under this article.
(6) To enter into agreements with the state for the periodic
distribution of amounts due the state under any sales agreement.
(7) To 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.
(8) To sell, pledge, or assign, as security or consideration, all or a portion of the state's share to implement alternative
funding options.
(9) To implement the purposes of this article.
(c) The authority shall invest its funds and accounts in
accordance with this chapter and shall not take action or invest in
any manner that would cause the state to become a stockholder in
any corporation or that would cause the state to assume or agree to
pay the debt or liability of any corporation in violation of the
United States constitution or the constitution of the state of West
Virginia.
(d) 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.
(e) 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.
(f) Except as otherwise expressly set forth in this article,
The authority shall not pledge or make its debts payable out of
proceeds of its bonds.
(g) The authority shall have no other assets or property than
the portion of the state's share purchased by the sales agreement,
proceeds of bonds held as security for the bonds and investment income on the foregoing.
§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) "Financial institution" means a bank, trust company or
credit union within or without the state.
(f) "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 such
agreement may include the option to enter into or cancel the
agreement or to reverse or extend the agreement.
(g) "Master settlement agreement" means the master settlement
agreement as defined in section one of this article.
(h) "Medical trust fund" means the West Virginia medical trust
fund created in section two of this article.
(i) "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 capitalized
interest, if any, and to pay the costs of issuance and other
expenses and fees directly related to the authorization and
issuance of bonds.
(j) "Notes" means notes, warrants, loan agreements, and all
other forms of evidence of indebtedness authorized under this
article.
(k) "Qualified investments" means investments of the authority
authorized pursuant to this article.
(l) "Qualifying statute" has the meaning given that term in
the master settlement agreement, constituting article nine-b,
chapter sixteen of this code.
(m) "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.
(n) "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 such
payments, under the master settlement agreement.
(2) To the extent that such amounts have been assigned to the
state, all payments of attorney fees required to be made by tobacco product manufacturers under the master settlement agreement, and
all rights to receive such attorney fees.
(o) "Tobacco settlement fund" means the tobacco settlement
fund created in section three of this article.
(p) "Workers' compensation commission settlement account"
means the account created in section fifteen of this article.
§4-11A-8. Powers not restricted; law complete in itself.
This article shall not restrict or limit the powers that the
authority has under any other law of this state, but is cumulative
as to any such powers. A proceeding, notice, or approval is not
required for the creation of the authority or the issuance of
obligations or an instrument as security, except as provided in
this chapter.
§4-11A-9. 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, the treasurer of state, the executive director of the
investment management board, and two individuals, each appointed by
the governor, with the advice and consent of the Senate, 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 so request.
(e) The members of the board shall not receive compensation by
reason of their membership on the board.
(f) One of the original members of the authority appointed by
the governor shall serve a two-year term and one shall serve a
three-year term. Thereafter, such members of the authority shall
serve four-year terms. 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-10. Staff; assistance by state officers, agencies and
departments.
(a) The staff of the office of the department of
administration, under the supervision of the secretary of the
department of administration shall also serve as staff 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-11. 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-12. 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, all of the following powers:
(1) The power to issue its bonds and to enter into other
funding options as provided in this article.
(2) The power to have perpetual succession as a public
instrumentality and agency of the state, until dissolved in
accordance with this article.
(3) The power to sue and be sued in its own name.
(4) The power to make and execute agreements, contracts, and
other instruments, with any public or private person, in accordance
with this chapter.
(5) The power to hire and compensate legal counsel, bond
counsel, underwriters, consultants and advisors.
(6) The power to hire investment advisors and other persons as
necessary to fulfill its purpose.
(7) The power to invest or deposit moneys in the manner
permitted by section nine, article six, chapter twelve of this code.
(8) The power to procure insurance, other credit enhancements,
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, such arrangements, instruments, contracts and
agreements as municipal bond insurance, liquidity facilities,
interest rate agreements and letters of credit.
(9) The power to accept appropriations, gifts, grants, loans
or other aid from public or private entities.
(10) The power to adopt and promulgate rules, consistent with
this article and in accordance with chapter twenty-nine-a of this
code, as the board determines necessary.
(11) The power to acquire, own, hold, administer, and dispose
of property.
(12)The power to determine, in connection with the issuance
of bonds, and subject to the sales agreement, the terms,
documentation and other details of such financing.
(13)The power to perform any act not inconsistent with
federal or state law necessary to carry out the purposes of the
authority.
§4-11A-13. Authorization of the sale of rights in the master settlement agreement.
(a) The governor or the governor's designee 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 all or a portion of amounts received by the state
under the master settlement agreement.
(b) 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 deemed 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 bond
proceeds received pursuant to the sales agreement shall be for the
purposes set forth in this article, payment of attorney fees
related to the master settlement agreement, and to provide a secure
and stable source of funding to the state for purposes designated
by this article.
(4) A requirement that the net proceeds received by the
authority from the sale of any bonds issued to provide funds for
the purposes set forth in this article be paid by the authority to
the state as consideration for the sale of that portion of the
state's share and that such net proceeds be applied by the state
upon receipt in the following priority: (i) To the consolidated
public retirement board, an amount not to exceed three hundred
forty-nine million dollars to redeem all or a portion of the
unfunded actuarial accrued liability of the death, disability and
retirement fund of the West Virginia state police, the exact amount
to be determined by the secretary of the department of
administration and communicated in writing to the authority upon issuance of the bonds pursuant to this article; (ii) to the
consolidated public retirement board, an amount not to exceed
forty-five million dollars to redeem all or a portion of the
unfunded actuarial accrued liability of the judges' retirement
system, the exact amount to be determined by the secretary of the
department of administration and communicated in writing to the
authority upon issuance of the bonds pursuant to this article;
(iii) to the principal sub-account in the West Virginia tobacco
settlement medical trust fund established in section two of this
article, one hundred thirty-seven million dollars, to be applied in
accordance with the provisions of section two of this article; (iv)
to the department of administration, ten million dollars, to be
deposited in a "new state office building account" established
hereby in the state treasury, to be used for the acquisition,
construction and equipping of a new state office building on or
near the capitol complex; and (v) to: (a) The workers'
compensation commission settlement account established in section
fifteen of this article, the remainder of the net proceeds of the
bonds, to be applied in accordance with the provisions of section
fifteen of this article; or (b) an account established with the
state treasury designated as a guaranteed pool, the moneys
deposited therein to be utilized to offset actual or anticipated
lost revenues due to insolvency, financial distress or bankruptcy of self-insured employers, the exact amount for each of the
purposes set forth in (a) and (b) to be determined by the executive
director of the workers' compensation commission and communicated
in writing to the authority upon issuance of the bonds pursuant to
this article. Each amount transferred shall constitute
consideration received by the state for that portion of the state's
share.
(5)A requirement that to the extent the issuance of the
bonds and the use of proceeds of the bonds for the purposes set
forth in this section results in a reduction of general revenue
appropriations which would have otherwise been necessary in the
fiscal year in which the bonds are issued, such amount will be used
to offset the amounts which are available for transfer from the
West Virginia settlement medical trust fund established in section
two of this article in accordance with the provisions of section
six, article three, chapter twenty-three of this code. The amount
of any reduction shall be certified by the secretary of
administration in writing to the authority at the time of the
issuance of the bonds.
(6) To the extent the net proceeds of bonds paid to the state
under the preceding subsection (4) are derived from bonds the
interest in which is not includable in the gross income of the
holder for federal income tax purposes, the state shall enter into an agreement pursuant to which it will covenant for the benefit of
such bondholders not to invest the net proceeds or expend them in
any way which would cause the interest on the bonds to be
includable in gross income for federal income tax purposes.
(7) An agreement that the effective date of the sale is the
date of receipt of the bond proceeds by the authority and the
deposits of the net proceeds of the bonds in the respective
accounts set forth in this article.
(c) The sale made under this section shall be irrevocable
during the time when bonds are outstanding under this article, and
shall be a part of the contractual obligation owed to the
bondholders. The sale shall constitute and be treated as a true
sale and absolute transfer of the property so transferred and not
as a pledge or other security interest for any borrowing. The
characterization of such a sale as an absolute transfer shall not
be negated or adversely affected by the fact that only a portion of
the state's share is being sold, or by the state's acquisition or
retention of an ownership interest in the residual assets.
(d) On or after the effective date of such sale, the state
shall not have any right, title, or interest in the portion of the
state's share sold and such portion 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, writ (including writ
of mandate), or remedy in connection with the assertion or
enforcement of any debt, claim, settlement, or judgment against the
state.
(e) On or before the effective date of the 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 portion sold shall be made directly to
the authority or its designee.
§4-11A-14. Authorization of bonds of the authority.
(a) The authority may issue bonds and, if bonds are issued,
shall make the net proceeds from the bonds available to the state
pursuant to the sales agreement to be applied as set forth in
section thirteen of this article and to provide a secure and stable
source of funding to the state, consistent with the purposes 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 all or a
portion of the state's share purchased by the authority and any
moneys derived from the state's share purchased by the authority,
and any other sources available to 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, 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, provided, however that in no event
shall costs of issuance, excluding rating agency fees, fees for
bond insurance, credit enhancements and liquidity facilities, plus
underwriters' discount and any other costs associated with the
issuance of the bonds exceed, in the aggregate, the sum of one
percent of the aggregate principal amount of bonds issued. The
bonds are investment securities and negotiable instruments within
the meaning of and for the purposes of the uniform commercial code.
(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, or 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 shall be valid and binding at the time the
pledge is made. Amounts so pledged and then or thereafter received
by the state or the authority shall immediately be subject to the
lien of such pledge without any physical delivery thereof or
further act. The lien of any such pledge shall be valid and
binding as against all parties having claims of any kind against
the authority or the state, whether such parties have notice of the
lien or not. Notwithstanding any other provision of law, the lien
of such pledge shall not be subject to Article nine of the Uniform Commercial 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 such 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.
(g) The exercise of the powers granted to the authority by
this article will be in all respects for the benefit of the people
of the state for the improvement of their health, safety,
convenience and welfare and is a public purpose. The authority,
its income and all bonds and all interest and income thereon, shall
be 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 shall be in a form, issued in denominations,
executed in a manner, 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.
(3) The bonds shall be 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 during
any period the bonds are outstanding, and other terms, conditions,
covenants, and protective provisions safeguarding payment, not
inconsistent with this chapter and 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.
However, 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.(k) To comply with federal law with respect to the issuance of
bonds, the interest of which is tax exempt pursuant to the Internal
Revenue Code, the authority may issue a certain series of bonds, or
periodically issue several series of bonds, so that interest on the
bonds remains exempt from federal taxation or to comply with the
purposes specified in this article.
(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 such other accounts, sub-accounts or reserves
as may be deemed 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.
§4-11A-15. Workers' compensation commission settlement account
created.
There is hereby created a special fund in the state treasury
separate and apart from all other public moneys or funds of the state named the workers' compensation commission settlement account
into which there shall be deposited proceeds of bonds issued under
this article in the amount and in the manner provided in section
thirteen of this article. Moneys on deposit in the workers'
compensation commission settlement account shall be used at the
discretion of the commissioner of the division of workers'
compensation for the lump sum settlement of certain claims and
other structured settlements as the commissioner may determine.
§4-11A-16. Exemption from purchasing provisions.
The provisions of article three, chapter five-a of this code
shall not apply to the authority and contracts entered into by the
authority in carrying out its public and essential governmental
functions 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-17. Annual report.
(a)The authority shall submit to the governor, the
Legislature, and the attorney general, on or before the
thirty-first day of December, annually, a report including
information regarding all of the following:
Its operations and accomplishments.
(2) Its receipts and expenditures during the previous fiscal year, in accordance with classifications it establishes for its
operating and capital accounts.
(3) Its assets and liabilities at the end of the previous
fiscal year and the status of reserve, special and other funds.
(4) A schedule of its bonds outstanding at the end of the
previous fiscal year, and a statement of the amounts redeemed and
issued during the previous fiscal year.
(5) A statement of its proposed and projected activities.
(6) Recommendations to the governor and the Legislature, as
deemed necessary.
(7) Any other information deemed necessary.
(b) The annual report shall identify performance goals of the
authority, and clearly indicate the extent of progress, during the
reporting period, in attaining these goals.
(c) The secretary of the department of health and human
resources shall submit to the governor, the Legislature, and the
attorney general, on or before the thirty-first day of December,
annually, commencing with the calendar year ending the thirty-first
day of December, two thousand seven, a report summarizing the use
of all moneys transferred from the West Virginia tobacco settlement
medical trust fund.
(d) The commissioner of the division of workers' compensation
shall submit to the governor, the Legislature, and the attorney general, on or before the thirty-first day of December, annually,
a report summarizing the use of all moneys in the workers'
compensation commission settlement account.
§4-11A-18. Bankruptcy.
Notwithstanding any other provision of law, the authority is
not authorized, and no public officer, organization, entity or
other person shall authorize the authority, to become a debtor in
a case under the United States bankruptcy code (title eleven of the
United States code), to make an assignment for the benefit of
creditors, or to become the subject of any similar case of
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-19. 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 fifty
percent shall be deposited in the medical trust fund and fifty
percent shall be deposited in the tobacco settlement fund, unless
otherwise directed by the Legislature, 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-20. Investments generally.
Notwithstanding anything in this code to the contrary, any
fund or accounts into which proceeds of bonds issued under this
article are deposited may be invested in tax-exempt municipal
obligations that are not subject to alternative minimum tax for
federal income tax purposes. The investment permitted in this
subsection is in addition to all other investments otherwise
permitted for such proceeds under this code.
§4-11A-21. Severability.
If any section, subsection, subdivision, subparagraph,
sentence or clause of this article is adjudged to be
unconstitutional or invalid, such adjudication shall not affect the
validity of the remaining portions of this article, and, to this end, the provisions of this article are hereby declared to be
severable.
§4-11A-22. Construction.
This article, being deemed necessary for the welfare of the
state and its people, shall be liberally construed to affect its
purpose.
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