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ENROLLED
H. B. 4037
(By Mr. Speaker, (Mr. Thompson) and Delegate Armstead)
[By Request of the Executive]
[Passed February 25, 2010; in effect from passage.]
AN ACT to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §13-4-1 and §13-4-2,
all relating generally to federal subsidy bonds and bond
financing; defining terms; authorizing certain bond issuers to
receive and use credit payments with respect to federal
subsidy bonds; and exempting the bonds from taxation.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §13-4-1 and §13-4-2,
all to read as follows:
ARTICLE 4. FEDERAL SUBSIDY BONDS.
§13-4-1. Definitions.
Unless the context clearly indicates otherwise, as used in
this article:
(1) "Federal subsidy bonds" means any state or local government bonds authorized for sale under the Internal Revenue
Code of 1986, as amended, for which a credit payment is available
to the issuer or its designee. Certain Build America Bonds
authorized under Section 1531 of Title I of Division B of the
American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5,
123 Stat. 115 (2009), codified at Section 54AA(g) of the Internal
Revenue Code of 1986, as amended, are federal subsidy bonds.
(2) "Credit payment" means any payment to an issuer of federal
subsidy bonds or its designee authorized under the provisions of
the Internal Revenue Code to offset a portion of the interest paid
on the bonds. Periodic credit payments received from the United
States Secretary of the Treasury, as described in Section 6431(b)
of the Internal Revenue Code, are credit payments.
(3) "Government entity" means the State of West Virginia,
including any department, division, agency, bureau, board,
commission, office or authority thereof, any political subdivision
of the State of West Virginia including, but not limited to, any
county, municipality or school district, and any other entity
authorized by the provisions of this code to issue bonds, notes or
other debt obligations.
(4) "General revenue bond" means a bond, note or other debt
obligation issued by a government entity for which the government
entity has pledged the full faith and credit, including a limited
pledge, of such government entity to the repayment of the obligation.
(5) "Special revenue bond" means a bond, note or other debt
obligation issued by a government entity for which the government
entity pledges a dedicated revenue stream or other security
interest to secure the repayment of the obligation.
§13-4-2. Authority to issue federal subsidy bonds; election of
credit payments; treatment of federal subsidy
payments; exemption from taxation.
(a) A government entity authorized to issue bonds, notes or
other debt obligations under the provisions of this code may issue
federal subsidy bonds in the manner, and subject to the
requirements, limitations and conditions, set forth in the
provisions of the code that authorize the government entity to
issue such bonds, notes or other debt obligations. This section
may not be construed to grant bonding authority to any government
entity or to expand the bonding authority of any government entity.
(b) A government entity that issues federal subsidy bonds may
elect to receive credit payments.
(c) Credit payments shall be treated as special revenue in the
case of special revenue bonds issued by a government entity or as
general revenue in the case of general revenue bonds issued by a
government entity. A government entity may use credit payments to
pay future debt service on the federal subsidy bonds or for any
other purpose allowable by law.
(d) Federal subsidy bonds issued by a government entity under
this section shall be exempt from tax in the manner, and subject to
the requirements, limitations and conditions, set forth in the
provisions of this code that authorize the government entity to
issue bonds, notes or other debt obligations.