HB4041 H ED AM 1-20 #1
The Committee on Education moves to amend the bill on page
one, following the enacting clause, by striking the remainder of
the bill and inserting in lieu thereof the following:
"That §18-9D-4b, §18-9D-6, and §18-9D-8 of the Code of West
Virginia, 1931, as amended, be amended and reenacted to read as
follows:
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
§18-9D-4b. School Building Authority authorized to issue bonds and
pay debt service on bonds with funds distributed from
State Excess Lottery Fund.
The School Building Authority is expressly authorized to issue
bonds and pay debt service on bonds pursuant to the provisions of
this article with funds distributed from the state Excess Lottery
Fund under section eighteen-a, article twenty-two, chapter twenty-
nine of this code and deposited into the Excess Lottery School
Building Debt Service Fund
and any federal subsidies received by
the School Building Authority and deposited into the Excess Lottery
School Building Debt Service Fund with respect to bonds authorized
by this section. If the amounts deposited in the Excess Lottery
School Building Debt Service Fund exceed the amount which the
authority is authorized to expend, the excess shall be set aside in
a special surplus fund for the authority. Expenditures from this
special surplus fund shall be made only in accordance with the
procedures established in section eighteen, article two, chapter
eleven-B of this code.
§18-9D-6. School Building Capital Improvements Fund in State
Treasury; School Construction Fund in State
Treasury; School Building Debt Service Fund in State
Treasury; School Improvement Fund in State Treasury;
collections to be paid into special funds; Excess
Lottery School Building Debt Service Fund in State
Treasury; authority to pledge the collections as
security for refunding revenue bonds; authority to
finance projects on a cash basis.
(a) There is continued in the state Treasury a School Building
Capital Improvements Fund to be expended by the authority as
provided in this article. The School Building Capital Improvements
Fund shall be an interest-bearing account with interest credited to
and deposited in the School Building Capital Improvements Fund and
expended in accordance with the provisions of this article.
The School Building Authority may pledge all or any part of
the revenues paid into the School Building Capital Improvements
Fund that are needed to meet the requirements of any revenue bond
issue or issues authorized by this article prior to July 20, one
thousand nine hundred ninety-three, or revenue bonds issued to
refund revenue bonds issued prior to that date, including the
payment of principal of, interest and redemption premium, if any,
on the revenue bonds and the establishing and maintaining of a
reserve fund or funds for the payment of the principal of, interest
and redemption premium, if any, on the revenue bond issue or issues
when other moneys pledged may be insufficient for the payment of the principal, interest and redemption premium, including any
additional protective pledge of revenues that the authority in its
discretion has provided by resolution authorizing the issuance of
the bonds or in any trust agreement made in connection with the
bond issue. Additionally, the authority may provide in the
resolution and in the trust agreement for priorities on the
revenues paid into the School Building Capital Improvements Fund
that are necessary for the protection of the prior rights of the
holders of bonds issued at different times under the provisions of
this article.
Any balance remaining in the School Building Capital
Improvements Fund after the authority has issued bonds authorized
by this article and after the requirements of all funds, including
reserve funds established in connection with the bonds issued prior
to July 20, one thousand nine hundred ninety-three, pursuant to
this article have been satisfied may be used for the redemption of
any of the outstanding bonds issued under this article which by
their terms are then redeemable, or for the purchase of the bonds
at the market price, but not exceeding the price, if any, at which
the bonds are in the same year redeemable and all bonds redeemed or
purchased shall immediately be canceled and shall not again be
issued.
The School Building Authority, in its discretion, may use the
moneys in the School Building Capital Improvements Fund to finance
the cost of projects authorized in accordance with the provisions
of section sixteen of this article on a cash basis. Any pledge of moneys in the fund for revenue bonds issued prior to July 20, one
thousand nine hundred ninety-three, is a prior and superior charge
on the fund over the use of any of the moneys in the fund to pay
for the cost of any project on a cash basis: Provided, That any
expenditures from the fund, other than for the retirement of
revenue bonds, may only be made by the authority in accordance with
the provisions of this article.
(b) There is continued in the state Treasury a special revenue
fund named the School Building Debt Service Fund into which shall
be deposited the amounts specified in section eighteen, article
twenty-two, chapter twenty-nine of this code
together with any
federal subsidies received by the authority with respect to bonds
authorized by this article for which moneys deposited in the School
Building Debt Service Fund have been pledged. If the amounts
deposited in the School Building Debt Service Fund exceed the
amount which the authority is authorized to expend, the excess
shall be set aside in a special surplus fund for the authority.
Expenditures from this special surplus fund shall be made only in
accordance with the procedures established in section eighteen,
article two, chapter eleven-B of this code.
All amounts deposited
in the fund shall be pledged to the repayment of the principal,
interest and redemption premium, if any, on any revenue bonds or
refunding revenue bonds authorized by this article for which moneys
deposited in the School Building Debt Service Fund have been
pledged by the authority: Provided, That deposited moneys may not
be pledged to the repayment of any revenue bonds issued prior to January 1, one thousand nine hundred ninety-four, or with respect
to revenue bonds issued for the purpose of refunding revenue bonds
issued prior to January 1, one thousand nine hundred ninety-four.
Additionally, the authority may provide in the resolution and in
the trust agreement for priorities on the revenues paid into the
School Building Debt Service Fund that are necessary for the
protection of the prior rights of the holders of bonds issued at
different times under the provisions of this article. On or prior
to May 1 of each year, the authority shall certify to the state
Lottery Director the principal and interest and coverage ratio
requirements for the following fiscal year on any revenue bonds
issued on or after January 1, one thousand nine hundred ninety-
four, and for which moneys deposited in the School Building Debt
Service Fund have been pledged, or will be pledged, for repayment
pursuant to this section.
After the authority has issued bonds authorized by this
article for which moneys deposited in the School Building Debt
Service Fund have been pledged and after the requirements of all
funds have been satisfied, including coverage and reserve funds
established in connection with the bonds issued pursuant to this
article, any balance remaining in the School Building Debt Service
Fund may be used for the redemption of any of the outstanding bonds
issued under this article, for which moneys deposited in the School
Building Debt Service Fund have been pledged, which, by their
terms, are then redeemable or for the purchase of the outstanding
bonds at the market price, but not to exceed the price, if any, at which the bonds are redeemable and all bonds redeemed or purchased
shall be immediately canceled and shall not again be issued:
Provided, That after the authority has issued bonds authorized by
this article and after the requirements of debt service and all
associated funds have been satisfied for the fiscal year for which
moneys deposited in the School Building Debt Service Fund have been
pledged, including coverage and reserve funds established in
connection with the bonds issued pursuant to this article, any
remaining balance in the School Building Debt Service Fund may be
transferred to the School Construction Fund created in subsection
(c) of this section and used by the School Building Authority in
its discretion to finance the cost of school construction or
improvement projects authorized in accordance with the provisions
of section sixteen of this article on a cash basis.
(c) There is continued in the state Treasury a special revenue
fund named the School Construction Fund into which shall be
deposited the amounts specified in section thirty, article fifteen,
chapter eleven of this code, together with any moneys appropriated
to the fund by the Legislature: Provided, That for the school year
beginning July 1, two thousand four, only, funds from the excess
lottery allocated in section eighteen-a, article twenty-two,
chapter twenty-nine of this code shall not be transferred to the
School Construction Fund and, in lieu thereof, made available for
legislative appropriation: Provided, however, That for the school
year beginning July 1, two thousand four, only, up to five million
dollars of the amounts in the fund may be appropriated by the Legislature for budget shortfalls.
Expenditures from the School Construction Fund shall be for
the purposes set forth in this article, including lease-purchase
payments under agreements made pursuant to subsection (e), section
fifteen of this article and section nine, article five of this
chapter and are authorized from collections in accordance with the
provisions of article three, chapter twelve of this code and from
other revenues annually appropriated by the Legislature from
lottery revenues as authorized by section eighteen, article twenty-
two, chapter twenty-nine of this code pursuant to the provisions
set forth in article two, chapter five-a of this code. Amounts
collected which are found, from time to time, to exceed the funds
needed for purposes set forth in this article may be transferred to
other accounts or funds and redesignated for other purposes by
appropriation of the Legislature. The School Construction Fund
shall be an interest-bearing account, with the interest credited to
and deposited in the School Construction Fund and expended in
accordance with the provisions of this article. Deposits to and
expenditures from the School Construction Fund are subject to the
provisions of subsection (k), section fifteen of this article.
(d) There is continued in the state Treasury a special revenue
fund named the School Major Improvement Fund into which shall be
deposited the amounts specified in section thirty, article fifteen,
chapter eleven of this code, together with any moneys appropriated
to the fund by the Legislature. Expenditures from the School Major
Improvement Fund shall be for the purposes set forth in this article and are authorized from collections in accordance with the
provisions of article three, chapter twelve of this code and from
other revenues annually appropriated by the Legislature from
lottery revenues as authorized by section eighteen, article twenty-
two, chapter twenty-nine of this code pursuant to the provisions
set forth in article two, chapter five-a of this code. Amounts
collected which are found, from time to time, to exceed the funds
needed for purposes set forth in this article may be transferred to
other accounts or funds and redesignated for other purposes by
appropriation of the Legislature. The School Major Improvement
Fund shall be an interest-bearing account, with interest being
credited to and deposited in the School Major Improvement Fund and
expended in accordance with the provisions of this article.
(e) There is created in the state Treasury a special revenue
fund named the Excess Lottery School Building Debt Service Fund
into which shall be deposited the amounts specified in section
eighteen-a, article twenty-two, chapter twenty-nine of this code
,
together with any federal subsidies received by the authority with
respect to bonds authorized by section four-b of this article. If
the amounts deposited in the Excess Lottery School Building Debt
Service Fund exceed the amount which the authority is authorized to
expend, the excess shall be set aside in a special surplus fund for
the authority. Expenditures from this special surplus fund shall
be made only in accordance with the procedures established in
section eighteen, article two, chapter eleven-B of this code.
All
amounts deposited in the fund shall be pledged, as designated by the authority, to the repayment of the principal, interest and
redemption premium, if any, on revenue bonds or refunding revenue
bonds authorized by section four-b of this article. On or prior to
May 1 of each year, the authority shall certify to the state
Lottery Director the principal and interest and coverage ratio
requirements for the following fiscal year on any revenue bonds
issued for which moneys deposited in the Excess Lottery School
Building Debt Service Fund have been pledged, or will be pledged,
for repayment pursuant to this section.
After the authority has issued bonds authorized by this
article for which moneys deposited in the Excess Lottery School
Building Debt Service Fund have been pledged and after the
requirements of all funds have been satisfied, including coverage
and reserve funds established in connection with the bonds issued
pursuant to this article, any balance remaining in the Excess
Lottery School Building Debt Service Fund may be used for the
redemption of any of the outstanding bonds issued under this
article, for which moneys deposited in the Excess Lottery School
Building Debt Service Fund have been pledged, which, by their
terms, are then redeemable or for the purchase of the outstanding
bonds at the market price, but not to exceed the price, if any, at
which the bonds are redeemable and all bonds redeemed or purchased
shall be immediately canceled and shall not again be issued:
Provided, That after the authority has issued bonds authorized by
this article and after the requirements of debt service and all
associated funds have been satisfied for the fiscal year, including coverage and reserve funds established in connection with the bonds
issued pursuant to this article for which moneys deposited in the
Excess Lottery School Building Debt Service Fund have been pledged,
any remaining balance in the Excess Lottery School Building Debt
Service Fund may be transferred to the School Construction Fund
created in subsection (c) of this section and used by the School
Building Authority in its discretion to finance the cost of school
construction or improvement projects authorized in accordance with
the provisions of section sixteen of this article on a cash basis.
(f) The Legislature finds and declares that the Supreme Court
of Appeals of West Virginia has held that the issuance of
additional revenue bonds authorized under the School Building
Authority Act, as enacted in this article prior to July 20, one
thousand nine hundred ninety-three, constituted an indebtedness of
the state in violation of section four, article X of the
Constitution of West Virginia, but that revenue bonds issued under
this article prior to July 20, one thousand nine hundred ninety-
three, are not invalid.
The Legislature further finds and declares that the financial
capacity of a county to construct, lease and improve school
facilities depends upon the county's bonding capacity (local
property wealth), voter willingness to pass bond issues and the
county's ability to reallocate other available county funds instead
of criteria related to educational needs or upon the ability of the
School Building Authority created in this article to issue bonds
that comply with the holding of the West Virginia Supreme Court of Appeals or otherwise assist counties with the financing of
facilities construction and improvement. The Legislature further
finds and declares that this section, as well as section eighteen,
article twenty-two, chapter twenty-nine of this code, had been
reenacted during the first extraordinary session of the West
Virginia Legislature in the year one thousand nine hundred ninety-
four in an attempt to comply with the holding of the Supreme Court
of Appeals of West Virginia.
The Legislature further finds and declares that it intends,
through the reenactment of this section and section eighteen,
article twenty-two, chapter twenty-nine of this code, to dedicate
a source of state revenues to special revenue funds for the
purposes of paying the debt service on bonds and refunding bonds
issued subsequent to January 1, one thousand nine hundred ninety-
four, the proceeds of which will be used for the construction and
improvement of school building facilities. The Legislature further
finds and declares that it intends, through the reenactment of this
section and section thirty, article fifteen, chapter eleven of this
code and section eighteen, article twenty-two, chapter twenty-nine
of this code, to appropriate revenues to two special revenue funds
for the purposes of construction and improvement of school building
facilities. Furthermore, the Legislature intends to encourage
county boards to maintain existing levels of county funding for
construction, improvement and maintenance of school building
facilities and to generate additional county funds for those
purposes through bonds and special levies whenever possible. The Legislature further encourages the School Building Authority, the
state board and county boards of education to propose uniform
project specifications for comparable projects whenever possible to
meet county needs at the lowest possible cost.
The Legislature further finds and declares that it intends,
through the reenactment of this section and section eighteen,
article twenty-two, chapter twenty-nine of this code, to comply
with the provisions of sections four and six, article X of the
Constitution of West Virginia; and section one, article XII of said
Constitution.
§18-9D-8. Use of proceeds of bonds; bonds exempt from taxation.
(a) The maximum aggregate face value amount of bonds that may
be issued by the authority outstanding at any time, for which the
moneys in the School Building Debt Service Fund or the Excess
Lottery School Building Debt Service Fund are to be pledged, is
$500 million; however, any amount of bonds for which moneys have
been deposited in a sinking fund, reserve fund or other fund
established to provide payment of principal or interest on the
bonds shall be excluded from the calculation of the maximum
aggregate amount of bonds outstanding at any time. The issuance of
revenue bonds under the provisions of this article shall be
authorized, from time to time, by resolution or resolutions of the
School Building Authority which shall set forth the proposed
projects authorized in accordance with the provisions of section
sixteen of this article and provide for the issuance of bonds in
amounts sufficient, when sold as provided in this section, to provide moneys considered sufficient by the authority to pay the
costs, less the amounts of any other funds available for the costs
or from any appropriation, grant or gift for the costs: Provided,
That bond issues from which bond revenues are to be distributed in
accordance with section fifteen of this article for projects
authorized pursuant to the provisions of section sixteen of this
article are not required to set forth the proposed projects in the
resolution. The resolution shall prescribe the rights and duties
of the bondholders and the School Building Authority and, for that
purpose, may prescribe the form of the trust agreement referred to
in this section. The bonds may be issued, from time to time, in
such amounts; shall be of such series; bear such date or dates;
mature at such time or times not exceeding forty years from their
respective dates; bear interest at such rate or rates; be in such
denominations; be in such form, either coupon or registered,
carrying such registration, exchangeability and interchangeability
privileges; be payable in such medium of payment and at such place
or places within or without the state; be subject to such terms of
redemption at such prices not exceeding one hundred five percent of
the principal amount of the bonds; and be entitled to such
priorities on the revenues paid into the fund pledged for repayment
of the bonds as may be provided in the resolution authorizing the
issuance of the bonds or in any trust agreement made in connection
with the bonds: Provided, however, That revenue bonds issued on or
after January 1, 1994, and prior to January 1, 2008, which are
secured by lottery proceeds from section eighteen, article twenty-two, chapter twenty-nine of this code shall mature at such time or
times not exceeding ten years from their respective dates:
Provided further, That revenue bonds issued on or after January 1,
2008, which are secured by lottery proceeds from section eighteen
or eighteen-a, article twenty-two, chapter twenty-nine of this
code, shall mature at such time or times not exceeding twenty years
from their respective dates.
(b) The bonds shall be signed by the Governor, and by the
president or vice president or his or her designee, or the vice
chair of the authority, under the great seal of the state, attested
by the Secretary of State, and the coupons attached to the bonds
shall bear the facsimile signature of the president or vice
president Governor, or his or her designee, or the vice chair of
the authority. In case any of the officers whose signatures appear
on the bonds or coupons cease to be officers before the delivery of
the bonds, the signatures shall nevertheless be valid and
sufficient for all purposes the same as if the officers had
remained in office until the delivery. The revenue bonds shall be
sold in the manner determined by the authority to be for the best
interests of the state.
(c) Any pledge of revenues made by the School Building
Authority for revenue bonds issued prior to July 20, 1993, pursuant
to this article is valid and binding between the parties from the
time the pledge is made; and the revenues pledged shall immediately
be subject to the lien of the pledge without any further physical
delivery of the revenues pledged or further act. The lien of the pledge is valid and binding against all parties having claims of
any kind in tort, contract or otherwise, irrespective of whether
the parties have notice of the lien of the pledge and the pledge
shall be a prior and superior charge over any other use of the
revenues pledged.
(d) The proceeds of any bonds shall be used solely for the
purpose or purposes as may be generally or specifically set forth
in the resolution authorizing those bonds and shall be disbursed in
the manner and with the restrictions, if any, that the authority
provides in the resolution authorizing the issuance of the bonds or
in the trust agreement referred to in this section securing the
bonds. If the proceeds of the bonds, by error in calculations or
otherwise, are less than the cost of any projects specifically set
forth in the resolution, additional bonds may in like manner be
issued to provide the amount of the deficiency; and unless
otherwise provided for in the resolution or trust agreement
hereinafter mentioned, the additional bonds shall be considered to
be of the same issue and are entitled to payment from the same
fund, without preference or priority, as the bonds before issued
for the projects. If the proceeds of bonds issued for the projects
specifically set forth in the resolution authorizing the bonds
issued by the authority exceed the cost of the bonds, the surplus
may be used for any other projects authorized in accordance with
the provisions of section sixteen of this article or in any other
manner that the resolution authorizing the bonds provides. Prior
to the preparation of definitive bonds, the authority may, under like restrictions, issue temporary bonds with or without coupons,
exchangeable for definitive bonds upon the issuance of the
definitive bonds.
(e) After the issuance of any revenue bonds, the revenues
pledged for the revenue bonds shall not be reduced as long as any
of the revenue bonds are outstanding and unpaid except under the
terms, provisions and conditions that are contained in the
resolution, trust agreement or other proceedings under which the
revenue bonds were issued.
(f) The revenue bonds and the revenue refunding bonds and
bonds issued for combined purposes, together with the interest on
the bonds, are exempt from all taxation by the State of West
Virginia, or by any county, school district, municipality or
political subdivision thereof.
(g) To meet the operational costs of the School Building
Authority, the School Building Authority may transfer to a special
revenue account in the State Treasury interest on any debt service
reserve funds created within any resolution authorizing the issue
of bonds or any trust agreement made in connection with the bonds
for expenditure in accordance with legislative appropriation or
allocation of appropriation.
(h) Any school construction bonds issued under this section
shall be issued on parity with any existing School Building
Authority bonds previously issued under this article."