COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 243
(By Senators McCabe, Caruth, Plymale and Prezioso)
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[Originating in the Committee on Finance;
reported March 5, 2009.]
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A BILL to repeal §13-1-18 of the Code of West Virginia, 1931, as
amended; and to amend and reenact §13-1-4, §13-1-14, §13-1-15,
§13-1-15a, §13-1-16, §13-1-17, §13-1-19 and §13-1-21 of said
code, all relating to updating the code for consistency with
the current practices and procedures required for issuing
general obligation bonds through competitive sale and the West
Virginia Constitution; providing that the issuer is not
required to designate the series of bonds in the election
order; providing that the bond resolution does not have to set
forth the date of issuance, the denominations of the bonds,
the medium with which the bonds are payable or the terms of
redemption; allowing issuers to establish a maximum rate of
interest in the bond resolution; allowing issuers to make
semiannual payments on principal and interest; lengthening the
time an issuer is required to begin making debt service payments by a year from the date of issuance; requiring
issuers to register bonds and eliminating reference to coupon
bonds; allowing issuers to accept electronic bids; and
allowing an issuer to publish an abbreviated sale of notice
when advertising the sale of bonds.
Be it enacted by the Legislature of West Virginia:
That §13-1-18 of the Code of West Virginia, 1931, as amended,
be repealed; and that §13-1-4, §13-1-14, §13-1-15, §13-1-15a,
§13-1-16, §13-1-17, §13-1-19 and §13-1-21 of said code be amended
and reenacted, all to read as follows:
ARTICLE 1. BOND ISSUES FOR ORIGINAL INDEBTEDNESS.
§13-1-4. Bond issue proposal to be submitted to voters; election
order.
No debt shall be contracted or bonds issued under this article
until all questions connected with the same
shall have been are
first submitted to a vote of the qualified electors of the
political division for which the bonds are to be issued, and
shall
have received receive three fifths of all the votes cast for and
against the same:
Provided, That a county board of education may
contract indebtedness and issue bonds for public school purposes
when submitted to a vote of the people of the county if the
question of contracting indebtedness and issuing bonds is approved
by a majority of all the votes cast for and against the same
pursuant to section ten, article X of the constitution. The governing body of any political division referred to in this
article
may shall, and when requested so to do by a petition in
writing, praying that bonds be issued and stating the purpose and
amount thereof, signed by legal voters of the political division
equal to twenty percent of the votes cast in a county or
magisterial district for Governor, or in a municipal corporation or
school district for mayor or member of the board of education,
as
the case may be, shall, by order entered of record, direct that an
election be held for the purpose of submitting to the voters of the
political division all questions connected with the contracting of
debt and the issuing of bonds.
Such The order shall state:
(a) The necessity for issuing the bonds or, if a petition has
been filed as provided herein, that
such the petition has been
filed;
(b) If for the construction of a county-district road or
bridge thereon, a summary of the engineer's report provided for in
the following section setting forth the approximate extent and the
estimated cost of the proposed improvement and the kind or class of
work to be done thereon;
(c) Purpose or purposes for which the proceeds of bonds are to
be expended;
(d) Valuation of the taxable property as shown by the last
assessment thereof for state and county purposes;
(e) Indebtedness, bonded or otherwise;
(f) Amount of the proposed bond issue;
(g) Maximum term of bonds;
and series
(h) Maximum rate of interest;
(i) Date of election;
(j) If a special election, names of commissioners for holding
same;
(k) If registration of voters is necessary, notice of the
time, place and manner of making same;
(l) (j) That the levying body is authorized to lay a
sufficient levy annually to provide funds for the payment of the
interest upon the bonds and the principal at maturity and the
approximate rate of levy necessary for this purpose;
(m) (k) In the case of school bonds, that
such bonds, together
with all existing bonded indebtedness, will not exceed in the
aggregate five percent of the value of the taxable property in
such
the school district ascertained in accordance with section eight,
article X of the constitution; and that
such bonds will be payable
from a direct annual tax levied and collected in each year on all
taxable property in
such the school district sufficient to pay the
principal and the interest maturing on
such the bonds in
such each
year, together with any deficiencies for prior years, within, and
not exceeding thirty-four years, which tax levies will be laid
separate and apart and in addition to the maximum rates provided
for tax levies by school districts on the several classes of property in section one, article X of the constitution, but in the
same proportions as
such the maximum rates are levied on the
several classes of property; and
said the tax may be levied outside
the limits fixed by section one, article X of the constitution.
Any other provision which does not violate any provision of
law, or transgress any principle of public policy, may be
incorporated in the order.
§13-1-14. Resolution authorizing issuance and fixing terms of
bonds.
If
three fifths the required amount of all the votes,
pursuant
to section four of this article, cast for and against the
proposition to incur debt and issue negotiable bonds
shall be is in
favor of the same, the governing body of the political division
shall, by resolution, authorize the issuance of
such bonds in an
amount not exceeding the amount stated in the proposition;
fix the
date thereof; set forth the denominations in which they shall be
issued, which denominations shall be one hundred dollars or
multiples thereof determine establish the
maximum rate or rates of
interest which the bonds shall bear
which rate or rates of interest
shall be within the maximum rate stated in the proposition
submitted to vote;
and payable semiannually; prescribe the medium
with which the bonds shall be payable require that the bonds shall
be made payable at the office of the
State Treasurer Municipal Bond
Commission and at
such any other place or places as the body issuing the same
may designate designates; provide for a sufficient
levy to pay the annual interest on the bonds and the principal at
maturity; fix the times within the maximum period, as contained in
the proposition submitted to vote, when the bonds shall become
payable, which shall not exceed thirty-four years from the date
thereof; determine whether all or a portion of the bonds
shall be
are subject to redemption prior to the maturity thereof;
and, if
so, the terms of the redemption and prescribe a form for executing
the bonds authorized.
§13-1-15. Bonds to be payable in annual or semiannual installments.
Such bonds Bonds shall be made payable in annual
or semiannual
installments beginning not more than
two three years after the date
thereof and the amount payable in each year may be so fixed that
when the annual interest is added to the principal amount to be
paid, the total amount payable in each year in which part of the
principal is payable shall be as nearly equal as practicable.
Once
principal payments commence, it shall be an immaterial variance if
the difference between the largest and smallest amounts of
principal and interest payable annually
or semiannually during the
term of the bonds shall not exceed
three five percent of the total
authorized issue.
Or, such bonds Bonds may be payable in annual
or
semiannual installments beginning not more than
two three years
after the date thereof, each installment being as nearly equal in
principal amount as
may be practicable.
§13-1-15a. Bonds may be subject to redemption.
All or a portion of
such the bonds
may be are subject to
redemption prior to the maturity thereof at the option of the body
issuing the same
as established by resolution of the governing body
authorizing the bonds. at such times and prices and on such terms
as shall be designated in the resolution required by section
fourteen of this article The body issuing the bonds may not levy
taxes in connection with the redemption of any bonds in excess of
the taxes that would have been levied for the payment of principal
of and interest on
such the bonds in
such any year.
§13-1-16. Recital of certification that bonds are issued in
conformity with constitution and statutes; effect
thereof with Attorney General's endorsement.
The resolution authorizing the bonds provided for in section
fourteen of this article may direct that they
shall contain the
following recital:
"It is certified that this bond is authorized by and is issued
in conformity with the requirements of the Constitution and
Statutes of the State of West Virginia."
Such The recital, when
such bonds
shall have been endorsed by
the Attorney General as provided in section twenty-eight of this
article,
shall be deemed are considered an authorized declaration
by the governing body of the political division and to import that
there is constitutional and statutory authority for incurring the debts and issuing the bonds; that all the proceedings therefor are
regular; that all the acts, conditions and things required to
exist, happen and be performed precedent to and in the issuance of
the bonds have existed, happened and been performed in due time,
form and manner as required by law; that the amount of the bond and
the issue of which it forms a part, together with all other
indebtedness, does not exceed any limit or limits prescribed by the
constitution or statutes of this state; and that all questions
connected with incurring the debt and issuing the bonds have been
first submitted to a vote of the people and have received
three
fifths the required amount
of all the votes,
pursuant to section
four of this article, cast for and against the same at an election
regularly called and held for the purpose after notice published
and posted in the manner required by law. If any bond be issued
containing the said recital, and also containing the endorsement of
the Attorney General as aforesaid, it shall be conclusively
presumed that said the recital, construed according to the import
hereby declared, is true and neither the political division nor any
taxpayer thereof shall be permitted to question the validity or
regularity of the obligation in any court or in any action or
proceeding.
§13-1-17. Bonds shall be registered.
The bonds issued hereunder may be registered or coupon bonds
shall be issued only in fully registered form and shall carry registration privileges as set forth in the resolution authorizing
the bonds. Coupon bonds may be registered as to the principal in
the owner's name by the State Treasurer on books which shall be
kept at its office for the purpose and the registration shall also
be noted on the bonds, after which no transfer shall be valid
unless made by the State Treasurer on the books of registration and
similarly noted on the bonds. Bonds registered as to principal may
be discharged from registration by being transferred to bearer,
after which they shall be transferable by delivery; but may again,
and from time to time, be registered as to the principal amount as
before. The registration of coupon bonds as to the principal sum
shall not affect the negotiability of the interest coupons, but
title to the same shall pass by delivery
§13-1-19. Signing, sealing and delivery of bonds.
All bonds issued under this article by any county shall be
signed by the president of the county court commission and
countersigned by the clerk of such court the county commission;
bonds issued by any municipality shall be signed by the mayor or
other chief executive and countersigned by the clerk, recorder or
secretary; bonds issued by a district or independent school
district shall be signed by the president of the board of education
and countersigned by the secretary thereof. The seal of the
political division shall be affixed to such the bonds. Interest
coupons shall be signed by the facsimile signatures of such officers. The delivery of any bonds or coupons so executed at any
time thereafter shall be valid, although before the date of
delivery the person signing such the bonds or coupons shall have
ceased to hold office.
§13-1-21. Advertisement and sale of bonds.
The governing body of the political division issuing such
bonds shall sell the same and collect the proceeds, which proceeds
shall be deposited with its treasurer. The governing body of the
political division shall advertise such bonds for sale, on sealed
bids or electronic bids if the governing body elects to utilize an
electronic bidding procedure, which advertisement shall be
published as a Class II legal advertisement in compliance with the
provisions of article three, chapter fifty-nine of this code and
the publication area for such publication shall be the political
division. The first publication shall be made at least fourteen
days before the date fixed for the reception of bids. Such The
advertisement shall also be published in a financial paper
published either in the city of New York or the city of Chicago, or
in a newspaper published in a city of this state having a
population of not less than twenty thousand inhabitants, according
to the last federal census the Bond Buyer or similar publication
and the advertisement may be published electronically: Provided,
That all advertisements required by this section may consist of an
abbreviated notice of the sale of the bonds. The governing body may reject any and all bids. If the bonds be are not sold pursuant
to such the advertisement, they may, within one hundred twenty days
after the date advertised for the reception of bids, be sold by the
governing body at private sale, but no private sale shall be made
at a price less than the highest bid which shall have been is
received. If not sold, such the bonds shall be readvertised in the
manner herein provided. In no event shall bonds be sold for less
than their par value.
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