Senate Bill No. 532
(By Senators Boley, Helmick, Walker, Jones, Manchin,
Yoder and Wehrle)
[Introduced March 22, 1993; referred to the Committee
on Finance.]
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A BILL to amend and reenact sections two, four, five, six and
seven, article six-a, chapter twelve of the code of West
Virginia, one thousand nine hundred thirty-one, as amended;
and to further amend said article by adding thereto a new
section, designated section six-a, all relating to the
division of debt management; legislative findings;
definitions; powers and duties; debt information reporting;
limitation on authority of agencies to incur bonded debt;
and promulgation of rules.
Be it enacted by the Legislature of West Virginia:
That sections two, four, five, six and seven, article six-a,
chapter twelve of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; and
that said article be further amended by adding thereto a new
section, designated section six-a, 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 totaldebt service requirements, in light of other uses of its fiscal
resources.
(c) The Legislature hereby finds that the economic well
being of the citizens of the state will be enhanced by
revitalizing existing industrial and commercial enterprises,
promoting development of new industrial and commercial
enterprises, promoting export development, providing economical
health care facilities, providing solid waste disposal
facilities, providing water facilities and waste water
facilities, developing economical, reliable and environmentally
compatible sources of energy for all types of public and private
consumption, providing capital improvement facilities for
citizens and the governments that serve them and providing
financial assistance to political subdivisions of the state.
(d) It is declared to be the public policy and
responsibility of this state to promote the health, welfare,
safety, morals and economic security of its inhabitants through
the retention of existing employment and alleviation of
unemployment in all phases of industrial or commercial
enterprises; the development of health care facilities, solid
waste disposal facilities, water facilities, waste water
facilities and capital improvement facilities for the state and
its political subdivisions; the promotion of export development;
and the development of reliable, affordable, efficient and
environmentally compatible sources of energy for all types of
public and private consumption.
(c) (e) 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 with comprehensive and extensive
powers therein to oversee the issuance and management of debt by
the state and its authorities, that the foregoing are public
purposes and uses for which public moneys may be expended.
§12-6A-4. Definitions.
For the purpose 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 division of debt management.
"Professional services" means financial advisors, attorneys,
agents, securities firms, bond insurance companies and similar
institutions.
"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 necessary to oversee the reporting, issuance
and management of debt issued by the state and its spending
units, including the following:
(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, and an evaluation of how much total
debt of the state and its spending units is justified at any
particular time.
(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 is requested. The responsibility of assisting
and overseeing the state and its spending units regarding the
issuance of their debt, and acting as liaison with the bond
market and its institutions and professions including financial
advisors, attorneys, agents, and personnel from securities firms,
rating agencies, bond insurance companies, or similar
institutions.
(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 othergovernments or public agencies, or with any political subdivision
of the state, or with the United States, to perform any
administrative service, activity or undertaking which any such
contracting party is authorized by law to perform, including the
issuance of bonds, and to charge for providing such services and
expend any fees collected.
(8) The formulation of rules, from time to time, to carry
out the issuance and management of debt by the state and its
authorities, and to carry out any other functions described in
this section.
(8) (9) Do all things necessary or convenient to effectuate
the intent of this article and to carry out its powers and
functions including, but not limited to, overseeing the making
of debt service payments, the sale of financial obligations, and
staff assistance on all debt-issuing activities by the state and
its authorities.
§12-6A-6. Debt information reporting.
(1) Within fifteen days following the end of each calendar
quarter, each state spending unit shall provide the division and
the legislative auditor, in the manner provided by this article
and in such form and detail as the state board of investments may
by regulation require, a statement of the total debt of each such
state spending unit incurred during the calendar quarter and
owing at the end of such calendar quarter, which statement shall
include, but not be limited to, the name of the state spending
unit, the amounts and types of debt incurred during the calendarquarter and outstanding at the end of the calendar quarter, the
cost and expenses of incurring the debt, the maturity date of
each debt, the terms and conditions of the debt, the current debt
service on the debt, the current interest rate on the debt, the
source of the proceeds utilized for repayment of the debt, the
amounts of repayment during the calendar quarter, the repayment
schedule and the security for the debt.
(2) Not less than fifteen days prior to a proposed offering
of debt to be issued by a state spending unit, written notice of
such proposed offering and the terms thereof shall be given to
the division by such state spending unit in such form as the
division may by regulation require.
(3) (2) Within thirty days following the end of each
calendar quarter and on an annual basis the state board of
investments shall prepare and issue a report of all debt of the
state and its spending units and of all proposed debt issuances
of which the board has received notice and shall furnish a copy
of such report to the governor, the president of the Senate, the
speaker of the House of Delegates, the legislative auditor and
upon request to any legislative committee and any member of the
Legislature and such report shall be kept available for
inspection by any citizen of the state.
§12-6A-6a. Limitation on authority of spending units to incur
debt.
(a) Notwithstanding any provisions of this code to the
contrary, no spending unit except the housing development fund,may incur bonded debt, except as provided for by the provisions
of this article.
(b) All other provisions of the West Virginia code
notwithstanding, prior to seeking initial or additional
appropriations from the Legislature to be used to pay debt
service on bonds, notes, certificates of participation,
certificate transactions, capital leases and all other forms of
securities and indebtedness, and prior to issuing bonds, notes
and other forms of debt, all spending units and all individuals,
agencies, authorities, boards, commissions, corporations or other
entities of, or representing the state with power to issue bonds,
shall submit such proposals for review and approval to the
division of debt management in compliance with such rules as set
forth by the division of debt management.
(c) Additionally, all spending units and all individuals,
agencies, authorities, boards, commissions, corporations or other
entities of, or representing the state with power to issue bonds,
notes, certificates of participation, certificate transactions,
capital leases and all other forms of securities and
indebtedness, with debt service to be paid by special revenue
accounts or from revenues raised from the fees generated from the
project shall submit such proposals for review and approval to
the division of debt management in compliance with such rules as
set forth by the division of debt management.
§12-6A-7. Promulgation of rules.
The division of debt management shall promulgate rulesrelating to reporting requirements, providing for procurement of
professional services which will ensure the best quality
professional services at a reasonable cost to the state, as well
as procedures for long term debt management and planning, 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 authorize the Division
of Debt Management to have debt oversight authority to approve or
disapprove the issuance of bonds by the state and its spending
units.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
Section six-a is new; therefore, strike-throughs and
underscoring have been omitted.