H. B. 2311


(By Mr. Speaker, Mr. Chambers, and Delegates Martin

and Mezzatesta)

[Introduced March 1, 1993; referred to the

Committee on Finance.]




A BILL authorizing the issuance and sale by the governor, on and after the first day of July, one thousand nine hundred ninety-three of bonds of the state of West Virginia, under authority of the veterans bonus amendment of 1992, in an amount not exceeding four million dollars, less any appropriations of the Legislature made, for the sole purpose of raising funds, in combination with appropriations of the Legislature, for the payment of a cash bonus to veterans, including the cost of administration necessarily incident thereto; specifying the powers of and limitations upon the governor in the issuance and sale of such bonds; prescribing the duties of the auditor, treasurer and West Virginia state board of investments with respect to such bonds; providing for transfer and registration fees with respect to registered bonds and the disposition of such fees; providing for places of payment of principal and interest on such bonds; exempting such bonds from taxation by the state, or by any county, district or municipality thereof; setting forth the form of coupon and registered bonds and coupons;
creating the veterans bonus sinking fund and stating what money shall be paid into such fund, providing for the disposition and investment of the veterans bonus sinking fund; providing a covenant between the state and the bondholders; creating the veterans bonus fund and providing that all money as appropriated and made available by the Legislature and the proceeds from the sale of the bonds shall be paid into such fund for expenditure from such fund and investment thereof, and disposition of any unexpended balance; providing that the plates, etc., from which the bonds are produced or made shall be the property of the state; providing for interim certificates in lieu of permanent bonds; providing for the West Virginia state board of investments to be financial advisor; providing for the attorney general or his duly appointed legal representative or any other attorney at law authorized to act as bond counsel and duly appointed by the governor to serve as bond counsel; and providing that all necessary expenses, including legal expenses approved by the attorney general, or in the case of counsel appointed by the governor, the governor, incurred in the execution of this bill shall be paid out of the veterans bonus fund on warrants of the auditor of the state drawn on the state treasurer.
Be it enacted by the Legislature of West Virginia:

ISSUANCE AND SALE OF VETERANS BONUS BONDS.

§l. Veterans bonus bonds; amount; authority to issue.
§2. Transfer fee; registration fee; where payable; interest rate; tax exempt.
§3. Form of bond.
§4. Form of coupon.
§5. Listing by West Virginia state board of investments.
§6. Veterans bonus sinking fund for payment of bonds and interest; investment thereof.
§7. Covenants of state.
§8. Sale by governor; minimum price.
§9. Legislative appropriations and bond sale proceeds paid into veterans bonus fund; expenditures; investment thereof;
unexpended balance.
§10. Plates, etc., property of state.
§11. Auditor to be custodian of unsold bonds.
§12. Interim certificates.
§13. West Virginia state board of investments to be financial advisor.
§14. Bond counsel.
§15. Approval and payment of all necessary expenses.

§l. Veterans bonus bonds; amount; authority to issue.
Bonds of the state of West Virginia under authority of the veterans bonus amendment of 1992, of the par value not to exceed four million dollars, less any appropriations of the Legislature made for the payment of a cash bonus to veterans as provided in said amendment are hereby authorized to be issued and sold, on and after the first day of July, one thousand nine hundred ninety-three, for the sole purpose of raising funds in combination with the appropriations of the Legislature as aforesaid for the payment of a cash bonus to veterans as provided for by the constitution and the laws enacted thereunder, including the cost of administration necessarily incident thereto. Such bonds may be issued by the governor in such amounts, in coupon or registered form, in such denominations, at such times on and after the first day of July one thousand nine hundred ninety-three, and bearing such date or dates as the governor may determine, and shall become due and payable serially, annually or semiannually, in such amounts and at such times as the governor may determine:
Provided, That such bonds shall mature within and not exceeding fifteen years from theirdate: Provided, however, That the governor may offer such bonds for competitive bids from recognized financial investment institutions before said bonds are sold. All of such bonds maturing more than five years after the date of issuance thereof shall be redeemable prior to maturity, at the option of the state of West Virginia, at such time or times, at such premium or premiums, and upon such other conditions as the governor shall determine and prescribe in the notice of sale thereof.
§2. Transfer fee; registration fee; where payable; interest rate; tax exempt.

The West Virginia state board of investments is hereby authorized to arrange for the transfer of registered bonds, and for each such transfer a fee of one dollar and fifty cents shall be charged by and paid to the state of West Virginia, to the credit of the veterans bonus sinking fund. Bonds taken in exchange shall be cancelled by the state board of investments and be carefully preserved by the state board of investments. The state board of investments shall make provisions for registering "payable to bearer" bonds, and for each bond registered a fee of one dollar and fifty cents shall likewise be charged by and paid to the state of West Virginia, to the credit of the veterans bonus sinking fund. All of such bonds shall be payable at the office of the state board of investments, or, at the option of the holder, at such other bank or banks, as may be designated or approved by the governor. The bonds shall bear interest, payable semiannually, to bearer, at the office of the state board of investments, or at the banks designated and approved by the governor, upon presentation and surrender ofinterest coupons then due, in the case of coupon bonds. For the payment of interest of registered bonds, the state board of investments shall requisition a warrant from the auditor of the state to be drawn on the state treasurer, and shall mail such check to the registered owner at the address as shown by the record of registration, or, at the option of the holder, by electronic funds transfer. Both the principal and interest of the bonds shall be made payable in lawful money of the United States of America and the bonds shall be exempt from taxation by the state of West Virginia, or by any county, district or municipality thereof, which facts shall appear on the face of the bonds as part of the contract with the holder thereof.
§3. Form of bond.
The bonds shall be executed on behalf of the state of West Virginia, by the manual or facsimile signature of the treasurer thereof, under the great seal of the state or a facsimile thereof, and countersigned by the manual or facsimile signature of the auditor of the state:
Provided, That one of said signatures on said bonds shall be a manual signature and said bonds shall be in the following form or to the following effect, as nearly as may be, namely:

VETERANS BONUS

COUPON BOND

(or registered bond as the case may be)

OF THE

STATE OF WEST VIRGINIA

$______________ No.____________
The state of West Virginia, under and by virtue of authority of an amendment to the constitution, which was proposed by House Joint Resolution No. 109, adopted the twenty-ninth day of February one thousand nine hundred ninety-two, and was ratified by a vote of the people at the general election on the third day of November, one thousand nine hundred ninety-two, which is hereby made a part hereof as fully as if set forth at length herein, acknowledges itself to be indebted to and hereby promises to pay to the bearer hereof (in case of a coupon bond) or to
or assigns (the owner of record, in case of registered bonds) on the day of __________________, 19__, in lawful money of the United States of America at the office of the West Virginia state board of investments, or, at the option of the holder, at
bank, the sum of dollars, with interest thereon at percent per annum from date, payable semiannually in like lawful money of the United States of America at the state board of investments or banks aforesaid, on the first day of and the first day of of each year (and in the case of coupon bonds) according to the tenor of the annexed coupons bearing the facsimile signature of the treasurer of the state of West Virginia, upon surrender of such coupons. This bond (in case of a coupon bond) may be exchanged for a registered bond of like tenor upon application to the state board of investments.
(Redemption provisions, if any, to be inserted here).
The state of West Virginia hereby covenants and agrees with the holders of the bonds issued pursuant hereto as follows: (1)That this bond shall constitute a direct and general obligation of the state of West Virginia; (2) that the full faith and credit of the state is pledged to secure the payment of the principal and interest of this bond; (3) that an additional or enhanced state tax shall be levied and collected in such amounts as may be required to pay annually the interest on this bond and the principal thereof within and not exceeding fifteen years; (4) that the additional or enhanced tax so levied and collected shall be irrevocably dedicated to the payment of the interest on this bond and the principal thereof until the interest on this bond and the principal thereof is finally paid and discharged; (5) that the additional or enhanced tax otherwise provided by law for the payment of this bond, shall not be reduced so long as the interest on any of the veterans bonus bonds, or the principal thereof is outstanding and unpaid, unless the payment thereof has been adequately provided for; and (6) to the full extent permitted by the constitution of West Virginia, any of the covenants, agreements or provisions in the acts of the Legislature providing for such levying or collection of such taxes or charges shall be enforceable in any court of competent jurisdiction by any of the holders of such bonds or of any interest coupon appertaining thereto.
This bond is hereby made exempt from any taxation by the state of West Virginia, or by any county, district or municipal corporation thereof.
In testimony whereof, witness the manual or facsimile signature of the treasurer of the state of West Virginia, and the manual or facsimile countersignature of the auditor of the state,hereto affixed according to law, dated the day of _____________, one thousand nine hundred ________________, and the seal of the state of West Virginia or a facsimile thereof.

_____________________________________
Treasurer of the State of West Virginia
(SEAL)
Countersigned:
_________________________________________
Auditor of the State of West Virginia
§4. Form of coupon.
The form of coupon shall be substantially as follows, to wit:
STATE OF WEST VIRGINIA

Bond No._______________ Coupon No._________
On the first day of , 19 , the state of West Virginia will pay to the bearer, in lawful money of the United States of America, at the office of the West Virginia state board of investments at the capitol of said state, or, at the option of the holder, at bank, the sum of
dollars, the same being semiannual interest on Veterans Bonus Bond No._____________.
_________________________________________
Treasurer of the State of West Virginia
The signature of the treasurer to such coupon shall be by his facsimile signature and the coupons shall be numbered in the order of their maturity, from number one consecutively. The bonds and coupons may be signed, as provided in this bill, by thepresent treasurer and auditor, or by any of their respective successors in office, and the bonds signed by the persons now in the office may be sold by the governor or his successor in office without being signed by the successor in office of the present treasurer or auditor.
§5. Listing by West Virginia state board of investments.
All coupons and registered bonds issued under this bill shall be separately listed by the West Virginia state board of investments in books provided for the purpose, in each case giving the date, number, character and amount of obligations issued, and in case of registered bonds, the name and post-office address of the person, firm or corporation registered as the owner thereof.
§6. Veterans bonus sinking fund for payment of bonds and interest; investment thereof.

There is hereby created in the office of the West Virginia state board of investments a veterans bonus sinking fund. Into such fund there shall be paid all moneys received from all taxes or charges made applicable by law to the payment of such bonds or the interest thereon, from transfer and registration fees as herein provided, and from any other source whatsoever which is made liable by law for the payment of the principal of such bonds or the interest thereon.
All such funds shall be kept by the treasurer in a separate account under the designation aforesaid, and all money belonging to the fund shall be deposited in the state treasury to the credit thereof.
Such fund shall be applied by the state board of investmentsfirst to the payment of the principal and semiannual interest on such bonds as it shall become due as herein provided. The remainder of the fund shall be invested by the state board of investments in accordance with the provisions of article six, chapter twelve of the code of West Virginia, one thousand nine hundred thirty-one as amended:
Provided, That the bonds or other obligations so purchased by the state board of investments shall mature so as to provide sufficient money to pay off all bonds herein provided to be issued as they become due; and the money so paid into the veterans bonus sinking fund under the provisions of this bill shall be expended for the purpose of paying the interest and principal of the bonds hereby provided for as they severally become due and payable and for no other purpose except that the fund may be invested until needed, as herein provided: Provided, however, That upon final payment and discharge of all bonds issued pursuant to this bill, the unexpended balance, if any, remaining in the fund shall be transferred to other accounts or funds and redesignated for other purposes by appropriation of the Legislature.
§7. Covenants of state.
The state of West Virginia hereby covenants and agrees with the holders of the bonds issued pursuant hereto as follows: (1) That this bond shall constitute a direct and general obligation of the state of West Virginia; (2) that the full faith and credit of the state is pledged to secure the payment of the principal and interest of this bond; (3) that an additional or enhanced state tax shall be levied and collected in such amounts as may be required to pay annually the interest on this bond and theprincipal thereof within and not exceeding fifteen years; (4) that the additional or enhanced tax so levied and collected shall be irrevocably dedicated to the payment of the interest on this bond and the principal thereof until the interest on this bond and the principal thereof is finally paid and discharged; (5) that the additional or enhanced tax otherwise provided by law for the payment of this bond, shall not be reduced so long as the interest on any of the veterans bonus bonds, or the principal thereof is outstanding and unpaid, unless the payment thereof has been adequately provided for; and (6) to the full extent permitted by the constitution of West Virginia, any of the covenants, agreements or provisions in the acts of the Legislature providing for such levying or collection of such taxes or charges shall be enforceable in any court of competent jurisdiction by any of the holders of such bonds or of any interest coupon appertaining thereto.
§8. Sale by governor; minimum price.
The governor shall sell the bonds herein authorized at such time or times on and after the first day of July, one thousand nine hundred ninety-three as he may determine necessary to provide funds for the payment of the bonus as herein provided. All sales shall be at not less than par and accrued interest. All interest coupons becoming payable prior to the sale date shall be cancelled by the West Virginia state board of investments and rendered ineffective, before the delivery of the bonds so sold.
§9. Legislative appropriations and bond sale proceeds paid into veterans bonus fund; expenditures; investment thereof;
unexpended balance.
All moneys as appropriated and made available by the Legislature for the payment of a cash bonus to veterans as provided in said amendment and the proceeds of all sales of bonds herein authorized shall be paid into the veterans bonus fund which is hereby created in the office of the state treasurer and such fund shall be expended solely for the payment of such veterans bonus and the cost of administration necessarily incident thereto. Except for such sums necessary for current operating balances, such fund shall be invested and reinvested by the West Virginia state board of investments in accordance with the provisions of article six, chapter twelve of the code of West Virginia, one thousand nine hundred thirty-one, as amended:
Provided, That no such investment or reinvestment shall adversely affect the current operating balances of such fund.
Any unexpended balance remaining in this fund after payment of all legal bonuses have been made or adequately provided for shall be available for appropriation by the Legislature, unless bonds shall have been issued, in which case such unexpended balance shall be transferred to the veterans bonus sinking fund and used solely for payment of the bonus bonds.
§10. Plates, etc., property of state.
The plates, casts, dies or other forms from which the bonds authorized by this bill are produced or made shall be the property of the state of West Virginia.
§11. Auditor to be custodian of unsold bonds.
The state auditor shall be the custodian of all unsold bonds issued pursuant to the provisions of this bill.
§12. Interim certificates.
For the purpose of facilitating the payment of veterans bonus awards, prior to the issuance of any permanent bonds, the governor may authorize issuance by the West Virginia state board of investments of short-term interim certificates to purchasers, on and after the first day of July, one thousand nine hundred ninety-three, for a period not to exceed eighteen months and in sufficient amount as required to meet bonus award obligations. During the period such interim certificates are outstanding, as specified, it shall be ascertained, as near as may be, the total number of persons entitled to such awards who have not been or cannot be paid out of legislative appropriations for such purpose, the total cost of such awards remaining to be made, and the most favorable time for market and sale of permanent bonds, with sale of permanent bonds to thereupon occur and with the resultant retirement of said interim certificates. The interim certificates, when issued and outstanding, shall be full and legal obligations of the state of West Virginia under all of the provisions of this bill just as fully and completely as permanent bonds.
§13. West Virginia state board of investments to be financial advisor.

The West Virginia state board of investments shall serve as financial advisor to the governor for the issuance and sale of such bonds.
§14. Bond counsel.
The attorney general, or his duly appointed legal representative, or any other attorney at law authorized to act asbond counsel and duly appointed by the governor to serve as bond counsel, shall be responsible for the issuance of a final approving opinion regarding the legality of the sale of such bonds.
§15. Approval and payment of all necessary expenses.
All necessary expenses, including legal expenses approved by the bond counsel, or in the case of counsel appointed by the governor, the governor, incurred in the execution of this bill shall be paid out of the veterans bonus fund on warrants of the auditor of the state drawn on the state treasurer.


NOTE: The purpose of this bill is to give partial effect to the veterans bonus amendment of 1992 by establishing guidelines for the issuance and sale of veterans bonus bonds. This bill's compliment is the "Payment of Veterans Bonus" bill.

This bill is new; therefore, strike-throughs and underscoring have been omitted.