H. B. 2570


(By Mr. Speaker (Mr. Chambers) and Delegate Burk)
(By Request of the Executive)
[Introduced March 12, 1993; referred to the
Committee on Government Organization.]



A BILL to repeal chapter five-d of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact sections two, four and five, article six-a, chapter twelve of said code; and to further amend said article by adding thereto five new sections, designated sections eight, nine, ten, eleven and twelve, all relating to abolishing the public energy authority and transferring certain of its powers to the state board of investment, division of debt management; legislative findings; definitions; powers and duties; exemption from taxation; acquisition of property; savings provisions; severability; and promulgate rules and regulations.

Be it enacted by the Legislature of West Virginia:
That chapter five-d of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; and sections two, four and five, article six-a, chapter twelve of said code be amended and reenacted; and that said article befurther amended by adding thereto five new sections, designated sections eight, nine, ten, eleven and twelve, all to read as follows:
ARTICLE 6A. THE DEBT MANAGEMENT ACT.

§12-6A-2. Legislative findings and declaration of public necessity.

(a) The Legislature hereby finds and declares that efficient and effective state government requires the designation of an authority having responsibility for procuring, maintaining and reporting pertinent information relating to the debt of the state and its agencies, boards, commissions and authorities. In addition to other duties and powers delegated to the state board of investments by this article, the board shall perform the functions and duties necessary to enable it to serve as a central information source concerning the i?ncurrence, recording and reporting of debt issued by the state, its agencies, boards, commissions and authorities.
(b) The Legislature hereby finds:
(1) The credit rating and acceptance of bonds, notes, certificates of participation and other securities and indebtedness of the state and its spending units have been unstable as a result of the instability in traditional national and international markets of goods and services produced by the citizens of the state.
(2) In order to finance essential capital projects for the benefit of the citizens of the state at the lowest possible cost,the state must maintain high levels of acceptance of the indebtedness of the state and its spending units in the financial markets.
(3) In order to attain these goals, authorization of state debt must be based on the ability of the state to meet its total debt service requirements, in light of other uses of its fiscal resources.
(c) The Legislature hereby further finds that the public policies and responsibilities of the state as set forth in this article cannot be fully attained without the creation of a state division of debt management.
(d) The Legislature hereby finds and declares that in order to provide the citizens of the state with efficient and effective state government, the state shall consolidate some of its individual bonding authorities within the West Virginia board of investments, division of debt management, to eliminate staff duplication and wasteful spending and to allow the state to benefit from the economies of scale achieved from the consolidation of such bonding authorities.
(e) The Legislature hereby further finds and declares that the economy of the state of West Virginia needs a reliable and dependable market for the state's coal, natural gas and other natural resources and the by-products thereof, that the state of West Virginia needs to encourage the efficient utilization and disposition of by-products resultant from the production of natural resources; with all due regard to the protection of theenvironment and husbandry of the natural resources of this state, the health, happiness, safety, right of gainful employment and general welfare of the citizens of this state will be promoted by the establishment and operation of coal fired electric generating plants and transmission facilities and the establishment and operation of natural gas transmission projects and/or other energy projects, and the means and measures herein authorized for the financing, building and operation of the facilities described in this subsection are, as a matter of public policy, for the public purpose of the state.
§12-6A-4. Definitions.

For the purpose of this article:
"Bond" means a revenue bond, or note or other evidence of indebtedness, including, but not limited to, a taxable bond and commercial paper, issued by the West Virginia board of investments, division of debt management, or by any one of its predecessors, including the West Virginia public energy authority, to effect the intents and purposes of this article.
"Construction" includes construction, acquisition, reconstruction, enlargement, improvement and providing furnishings or equipment.
"Cost," as applied to natural gas transmission projects, electric power projects or other energy projects authorized by the West Virginia board of investments, division of debt management, includes, but is not limited to: The cost of their acquisition and construction, including all costs pertaining topipelines; the cost of acquisition of all land, rights-of-way, property rights, easements, franchise rights, contract rights, lease rights and other rights or interests required by the West Virginia board of investments, division of debt management, for such acquisition and construction; the cost of demolishing or removing any pipeline, buildings or structures on land so acquired, including the cost of acquiring any lands to which such pipelines, buildings or structures may be moved; the cost of acquiring or constructing and equipping a principal office and suboffices of the West Virginia board of investments, division of debt management; the cost of diverting highways, interchange of highways and access roads to private property, including the cost of land or easements therefor; the cost of all machinery, furnishings and equipment, all financing charges, and interest prior to and during construction and after completion of construction; the cost of all engineering services and all expenses of research and development with respect to natural gas transmission projects, electric power projects, and related facilities; the cost of all legal services and expenses; the cost of all plans, specifications, surveys and estimates of cost and revenues; all working capital and other expenses necessary or incident to determining the feasibility or practicability of acquiring or constructing any such projects; all administrative expenses and such other expenses as may be necessary or incident to the acquisition or construction of any such projects; the financing of such acquisition or construction, and the cost offinancing of the placing of any such project in operation. Any obligation or expenses incurred after the effective date of this article by any person, with the approval of the West Virginia board of investments, division of debt management, for surveys, borings, preparation of plans and specifications and other engineering services in connection with the acquisition or construction of a project shall be regarded as a part of the cost of such project and shall be reimbursed out of the proceeds of loans or bonds as authorized by the provisions of this article.
"Debt" means bonds, notes, certificates of participation, certificate transactions, capital leases and all other forms of securities and indebtedness.
"Division" means the West Virginia board of investments, division of debt management.
"Electric power project" means the complex of structures, machinery and associated equipment for the generation or transmission of electricity including the production and distribution of other energy produced from coal, natural gas and by-products of coal occurring as a result of the production of coal, and all facilities related or incidental thereto.
"Governmental agency" means the state government or any agency, department, division or unit thereof; counties; municipalities; public service districts; regional governmental authorities and any other governmental agency, entity, political subdivision, public corporation or agency; the United States government or any agency, department, division or unit thereof;and any agency, commission or authority established pursuant to an interstate compact or agreement.
"Natural gas transmission project" means any natural gas pipeline and all facilities necessary or incident to the transportation of natural gas to or for the benefit of industrial or other end-users in West Virginia, the acquisition or construction of which is financed, in whole or in part, by the division or the acquisition or construction of which is financed, in whole or in part, from funds made available by grant, loan or any other source by, or through, the division as provided in this article, including facilities, the acquisition or construction of which is authorized, in whole or in part, by the division or the acquisition or construction of which is financed, in whole or in part, from funds made available by grant, loan or any other source by, or through, the division as provided in this article, including all pipelines, buildings and facilities which the division deems necessary for the operation of the project, together with all property, rights, easements and interests which may be required for the operation of the project.
"Owner" includes all persons having any title or interest in any property rights, easements and interests authorized to be acquired by this article.
"Person" means any public or private corporation, institution, association, firm or company organized or existing under the laws of this or any other state or country; the United States or the state of West Virginia; any federal or stategovernmental agency; political subdivision; county commission; municipality; industry; public service district; partnership; trust; estate; person or individual; and group of persons or individuals acting individually or as a group or any other legal entity whatever.
"Pipeline" or "pipelines" means any actual lines of pipe for the transmission and distribution of natural gas together with all appurtenances, facilities, structures, equipment, machinery and other items related to the transmission and distribution of gas through lines of pipe.
"Program" means any legislatively authorized act which transfers authority and responsibility to the division for the issuance, recording and supervision of debt instruments.
"Revenue" means any money or thing of value collected by, or paid to, the division as rents, loan payments, installment payments, or other proceeds of sale, rates, user fees, service charges or other charges for the electric power produced by, for the use of, for the lease, the lease with an option to purchase or the purchase of, or in connection with any electric power project; or as rent, use, transportation or service fee or charge for use of, or in connection with, any natural gas transmission project; or other money or property from any source which is received and may be expended for or pledged as revenues pursuant to this article.
"State" means the state of West Virginia.
"Spending unit" means any of the state's agencies, boards,commissions, committees, authorities or other of its entities with the power to issue debt and secure such debt, and not including local political subdivisions of the state.
§12-6A-5. Powers and duties.

The division of debt management shall perform the following functions and duties:
(1) Develop a long-term debt plan including criteria for the issuance of debt by the state and its spending units and the continuous evaluation of the current and projected debt of the state and its spending units.
(2) Evaluate cash flow projections relative to proposed and existing revenue bond issues.
(3) Act as liaison with the Legislature on all debt matters, including, but not limited to, new debt issues and the status of debt issued by the state and its spending units.
(4) Assist the state and its spending units regarding the issuance of debt if requested.
(5) Establish reporting requirements for the issuance of debt by the state and its spending units pursuant to the provisions of this article.
(6) Make and execute contracts and other instruments and pay the reasonable value of services or commodities rendered to the division pursuant to those contracts.
(7) Contract, cooperate or join with any one or more other governments or public agencies, or with any political subdivision of the state, or with the United States, to perform anyadministrative service, activity or undertaking which any such contracting party is authorized by law to perform and to charge for providing such services and expend any fees collected.
(8) Apply and effectuate the usage of any power, authority or duty granted to the division under a particular legislative program.
(9) Issue bonds, security interests and notes payable solely from the revenues or funds available to the division therefor; and the division may issue its bonds, security interests or notes in such principal amounts as it shall deem necessary to provide funds for any program which the division is charged with operating.
(10) Issue bonds for the purpose of financing the cost of acquisition and construction of one or more electric power projects or natural gas transmission projects or any additions, extensions or improvements thereto which will be sold, leased with an option by the lessee to purchase, leased or otherwise disposed of to persons other than governmental agencies or for the purpose of loaning the proceeds thereof to persons other than governmental agencies for the acquisition and construction of said projects or both. Such bonds shall be issued and the payment of such bonds secured in the manner provided by the applicable provisions of sections seven, eight, nine, ten, eleven, twelve, thirteen and seventeen, article two-c, chapter thirteen of this code: Provided, That the principal and interest on such bonds shall be payable out of the revenues derived fromthe lease, lease with an option by the lessee to purchase, sale or other disposition of or from loan payments in connection with the electric power project or natural gas transmission project for which the bonds are issued, or any other revenue derived from such electric power project or natural gas transmission project.
(11) Acquire by gift or purchase, hold and dispose of real and personal property in the exercise of its powers and the performance of its duties as set forth in this article.
(12) Acquire in the name of the state, by purchase or otherwise, on such terms and in such manner as it deems proper, or by the exercise of the right of eminent domain in the manner provided in chapter fifty-four of this code, such real property or parts thereof or rights therein, rights-of-way, property, rights, easements and interests it deems necessary for carrying out the provisions of this article, and compensation shall be paid for public or private lands so taken; and the division may sell any of the real property or parts thereof or rights therein, rights-of-way, property, rights, easements and interests acquired hereunder in such manner and upon such terms and conditions as the division deems proper: Provided, That if the division determines that land or an interest therein acquired by the division through the exercise of the power of eminent domain for the purpose of this article is no longer necessary or useful for such purposes, and if the division desires to sell such land or interest therein, the division shall first offer to sell such land or interest to the owner or owners from whom it wasacquired, at a price equal to its fair market value: Provided, however, That if the prior owner or owners shall decline to reacquire the land or interest therein, the division shall be authorized to dispose of such property by direct sale, auction, or competitive bidding. In no case shall such land or an interest therein acquired under this subdivision be sold for less than its fair market value. This article does not authorize the division to take or disturb property or facilities belonging to any public utility or to a common carrier, which property or facilities are required for the proper and convenient operation of such public utility or common carrier, except for the acquisition of easements or rights-of-way which will not unreasonably interfere with the operation of the property or facilities of such public utility or common carrier, and in the event of the taking or disturbance of property or facilities of public utility or common carrier, provision shall be made for the restoration, relocation or duplication of such property or facilities elsewhere at the sole cost of the division.
The term "real property" as used in this article is defined to include lands, structures, franchises and interests in land, including lands under water and riparian rights, and any and all other things and rights usually included within the said term, and includes also any and all interests in such property less than full title, such as easements, rights-of-way, uses, leases, licenses and all other incorporeal hereditaments and every estate, interest or right, legal or equitable, including termsfor years and liens thereon by way of judgments, mortgages or otherwise, and also all claims for damages for such real estate.
For the purposes of this section "fair market value" shall be determined by an appraisal made by an independent person or firm chosen by the division. The appraisal shall be performed using the principles contained in the "Uniform Appraisal Standards for Federal Land Acquisitions" published under the auspices of the Interagency Land Acquisition Conference, United States Government Printing Office, 1972.
(13) Make and enter into all contracts and agreements and execute all instruments necessary or incidental to the performance of its duties and the execution of its powers.
(14) Employ financial consultants, accountants, attorneys and such other consultants as are necessary in its judgement to carry out the provisions of this article and shall fix the fees. All program expenses to be payable solely from the proceeds of bonds issued by the division from the proceeds of bonds issued by or loan payments, lease payments or other payments received by the division, or from revenues and funds appropriated for such purpose by the Legislature.
(15) Receive and accept from any federal agency, or any other source, grants for or in aid of the construction of any project or for research and development with respect to electric power projects, natural gas transmission projects or other energy projects, and receive and accept aid or contribution from any source of money, property, labor or other things of value to beheld, used and applied only for the purpose for which such grants and contributions are made.
(16) Purchase property coverage and liability insurance for any electric power project or natural gas transmission project or other energy project and for the principal office and suboffices of the division, insurance protecting the division and its officers and employees against liability, if any, for damage to property or injury to or death of persons arising from its operations and any other insurance which may be provided for under a resolution authorizing the issuance of bonds or in any trust agreement securing the same.
(17) Enter upon any lands, waters and premises in the state for the purpose of making surveys and examinations as it may deem necessary or convenient for the purpose of this article, and such entry shall not be deemed a trespass, nor shall an entry for such purposes be deemed an entry under any condemnation proceedings which may be then pending, and the division shall make reimbursement for any actual damages resulting to such lands, waters and premises as a result of such activities.
(8) (18) Do all things necessary or convenient to effectuate the intent of this article and to carry out its powers and functions.
§12-6A-8. Exemption from taxation.

The exercise of the powers granted to the division 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 for the enhancement of their residential, agricultural, recreational, economic, commercial and industrial opportunities and is a public purpose. As the ownership, operation and maintenance of natural gas transmission projects and electric power projects and other energy projects owned and/or operated by the division will constitute the performance of essential governmental functions, the division shall not be required to pay any taxes or assessments upon any such project or upon any property acquired or used by the division or upon the income therefrom. Natural gas transmission projects and electric power projects and other energy projects owned or leased by persons other than governmental agencies shall be subject to any taxes or assessments upon any such project or projects. Bonds issued by the division and all interest and income thereon shall be exempt from all taxation by this state, or any county, municipality, political subdivision or agency thereof, except inheritance taxes: Provided, That the division shall require a fee in substitution of any ad valorem tax exemption to be negotiated by said division.
§12-6A-9. Acquisition of property by division -- Acquisition by purchase, lease or eminent domain; governmental agencies authorized to convey, etc., property; sale of property by division.

The division may acquire by purchase, or otherwise, as authorized by this article whenever it deems such acquisition expedient, any land, property, rights, rights-of-way, franchises,easements, leases and other interests in lands it deems necessary or convenient for the construction and operation of any natural gas transmission project, any electric power project, or other energy project.
All governmental agencies, notwithstanding any contrary provision of law, may lease, lend, grant or convey to the division, at its request, upon such terms as the proper authorities of such governmental agencies deem reasonable and fair, any real property or interest therein, including improvements thereto or personal property which is necessary or convenient to the effectuation of the authorized purposes of the division, including public roads and other real property or interests therein, including improvements thereto or personal property already devoted to public use.
The division may sell any land, property, rights, rights-of- way, franchises, easements, leases and other interests in land acquired under the provisions of this section in such manner and upon such terms and conditions as it deems proper.
§12-6A-10. Savings provisions.

All orders, determinations, rules, contracts, licenses, bonds, authorizations and privileges which have previously been issued, made, granted or allowed by the division, in the performance of its former duties, shall be transferred to, complied with and overseen by, the division.
§12-6A-11. Severability.

If any section, part, provision, subsection, subpart,subdivision, paragraph or subparagraph of this article or the application thereof to any person or circumstance is held unconstitutional or invalid, such unconstitutionality or invalidity shall not affect any other section, part, provision, subsection, subpart, subdivision, paragraph or subparagraph of this article or its application or validity, and to this end the provisions of this article are declared to be severable.
§12-6A-12. Promulgation of rules.

The division shall promulgate rules relating to program enactments, debt issuance, reporting requirements and its duties under this article and the rules shall be promulgated in accordance with the provisions of article three, chapter twenty- nine-a of this code.


NOTE: The purpose of this bill is to abolish the Public Energy Authority and to transfer its bonding and eminent domain powers to the West Virginia State Board of Investment, division of debt management; and to consolidate the responsibilities, duties, and powers of the Public Energy Authority with the West Virginia State Board of Investments, division of debt management.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§§12-6A-8, 9, 10, 11 and 12 are new; therefore, strike- throughs and underscoring have been omitted.