HOUSE CONCURRENT RESOLUTION NO. 58

(By Mr. Speaker, Mr. Kiss, and Delegates Campbell,

Michael, Mezzatesta, Warner, Varner, Williams, Beane, Ennis,

R. M. Thompson, Pino, Kominar, Staton, Tucker and Hall)


[Introduced February 26, 2003; referred to

the Committee on Finance.]


Providing for the issuance of bonds pursuant to article eight, chapter twelve of the code of West Virginia, one thousand nine hundred thirty-one, as amended, in an amount not to exceed three billion nine hundred million dollars.

Resolved by the Legislature of West Virginia:
That bonds authorized by article eight, chapter twelve of the code of West Virginia in the principal amount not to exceed three billion nine hundred million dollars are authorized to be sold by the Governor during the fiscal year ending the thirtieth day of June, two thousand three and during each fiscal year thereafter, but no bonds, other than refunding bonds issued pursuant to section nine, article eight, chapter twelve thereof may be sold after the fourteenth day of February, two thousand eight.
The terms of the bonds shall be those set forth by the Governor, either in the executive order authorizing the issuance of the bonds or by the execution and delivery by the governor of a trust indenture or agreement authorized in such executive order, and within that executive order or trust indenture or agreement the Governor shall stipulate the form of the bonds, whether the bonds are to be issued in one or more series, the date or dates of issue, the time or times of maturity, which shall not exceed the longest remaining term of the current amortization schedules for the unfunded actuarial accrued liability, the rate or rates of interest payable on the bonds, which may be at fixed rates and which interest may be current interest or may accrue, the denomination or denominations in which the bonds are issued, the conversion or registration privileges applicable to some or all of the bonds, the sources and medium of payment and place or places of payment, the terms of redemption, any privileges of exchangeability or interchangeability applicable to the bonds, and the entitlement of obligation holders to priorities of payment or security in the amounts deposited in the pension liability redemption fund. The terms of the bonds shall require that for a period of no less than five years from the date of issuance of the bonds, the aggregate of each year's annual pension liability redemption payments as defined in section three, article eight, chapter twelve of the code of West Virginia shall be no less than the aggregate of that year's projected annual contribution to each of the affected systems as set forth in the amortization schedules stated in the actuarial valuations of the affected systems as of the first day of July, two thousand two, that were prepared at the request of and delivered to the West Virginia Consolidated Public Retirement Board in December, two thousand two, by its actuarial consultants. Bonds shall be signed by the Governor and attested by the Secretary of State, by either manual or facsimile signatures.
The Governor shall sell these bonds at such time or times, in such amounts, not exceeding the aggregate principal sum of three billion nine hundred million dollars, at such prices as he may determine necessary to provide funds for the purpose of redeeming a previous liability of the state by funding all or a portion of the aggregate of the unfunded actuarial accrued liabilities of the Judges' Retirement System, the Death, Disability and Retirement Fund of the Department of Public Safety, and the Teachers Retirement System of the state and funds for the issuance costs of the bonds, which bonds shall be payable from and secured by moneys deposited in the pension liability redemption fund.
Before the sale of any bonds authorized herein and before signing any bonds, the Governor shall first make a written finding and deliver a copy in writing of that finding to the State Treasurer, the Secretary of State, the Speaker of the House of Delegates, and the President of the Senate that: (i) The true interest cost of the bonds is at least thirty basis points less than the assumed actuarial interest rate used to calculate the unfunded actuarial accrued liability; and (ii) that the issuance of the bonds will not in any manner cause a down grade or reduction in the state's general obligation credit rating by standard bond rating agencies. Before the sale of any bonds authorized herein and before the Governor may sign the bonds, the investment management board shall prepare and provide to the Governor, the State Treasurer, the Secretary of State, the President of the Senate, and the Speaker of the House of Delegates a report detailing the board's plan of investment for the proceeds of bonds that are sold.
The maximum costs associated with the issuance of bonds, excluding fees for bond insurance, credit enhancement and liquidity facilities, plus underwriter's discount and any other costs associated with the issuance may not exceed, in the aggregate, the sum of one percent of the aggregate principal amount of bonds issued, the payment of such costs to be subject to final approval by the review committee established pursuant to section four, article eight, chapter twelve of the code of West Virginia.
The issuance of the bonds shall comply with the provisions of the Code of West Virginia. The proceeds from the sale of bonds, other than refunding bonds, issued pursuant to article eight, chapter twelve of the Code of West Virginia, after payment of any costs payable at time of issuance of such bonds, shall be paid to the Consolidated Public Retirement Board to redeem the unfunded actuarial accrued liability described herein, which is a previous liability of the state, by funding the amount of the unfunded actuarial accrued liability provided for by such bonds, and allocated on a pro rata basis among the affected systems in accordance with the percentage each system's unfunded actuarial accrued liability to bears to the aggregate of the affected systems' unfunded actuarial accrued liability as set forth in the amortization schedules stated in the actuarial valuations of the affected systems as of the first day of July, two thousand two, that were prepared at the request of and delivered to the West Virginia Consolidated Public Retirement Board in December, two thousand two, by its actuarial consultants.