WEST virginia
legislature
2017 Third
extraordinary session
By
[By Request of the Executive]
[
A BILL to amend and
reenact §17-3-1 of the Code of West Virginia, 1931, as amended; and to amend
said code by adding thereto a new article, designated §17-26A-1,
§17-26A-2, §17-26A-3, §17-26A-4, §17-26A-5, §17-26A-6, §17-26A-7, §17-26A-8,
§17-26A-9, §17-26A-10, §17-26A-11, §17-26A-12, §17-26A-13 and §17-26A-14, all
relating generally to state road bonds; requiring proceeds from the sale of
state road bonds issued pursuant to Roads to Prosperity Amendment of 2017 to be
kept in separate and distinct account in the State Road Fund; authorizing cost
of issuance to be paid from State Road Fund; providing definitions; authorizing
sale of bonds; providing schedule for sale of bonds; providing amount of bonds
to be sold; providing conditions on the sale and issuance of bonds; creating
the Roads to Prosperity Bond Debt Service Fund; authorizing investment of the
fund; providing bond covenants; requiring certification of annual debt service
amount; prohibiting conflicts of interest; creating a criminal misdemeanor
offense and providing penalties for the proceeds from the sale of bonds to
inure to the benefit of or be distributed to officers or employees of the state
except to pay reasonable compensation for services rendered; declaring state
road bonds lawful investments; allowing for the refund of bonds; allowing for
continuity of debt service in termination or dissolution; authorizing the
Treasurer to select financial advisor; authorizing the Governor to select bond
counsel and underwriter; allowing for payment of necessary expenses for
issuance from funds; dedicating tax and fee collections for debt service; and
setting a schedule for certain deposits into the Roads to Prosperity Bond Debt
Service Fund.
Be it enacted by the
Legislature of West Virginia:
That §17-3-1 of the
Code of West Virginia, 1931, as amended, be amended and reenacted; and that
said code be amended by adding thereto a new article, designated §17-26A-1,
§17-26A-2, §17-26A-3, §17-26A-4, §17-26A-5, §17-26A-6, §17-26A-7, §17-26A-8,
§17-26A-9, §17-26A-10, §17-26A-11, §17-26A-12, §17-26A-13 and §17-26A-14, all
to read as follows:
ARTICLE 3. STATE ROAD
FUND.
§17-3-1. What constitutes
fund; payments into fund; use of money in fund.
There shall be a State Road
Fund, which shall consist of the proceeds of all state license taxes imposed
upon automobiles or other motor or steam driven vehicles; the registration fees
imposed upon all owners, chauffeurs, operators and dealers in automobiles or
other motor driven vehicles; all sums of money which may be donated to such
fund; all proceeds derived from the sale of state bonds issued pursuant to any
resolution or act of the Legislature carrying into effect the "Better
Roads Amendment" to the Constitution of this state, adopted in November,
1964, except that the proceeds from the sale of these bonds shall be kept in a
separate and distinct account in the State Road Fund; all proceeds from the
sale of state bonds issued pursuant to any resolution or act of the Legislature
carrying into effect the "Safe Roads Amendment of 1996" to the
Constitution of this state, adopted in November, 1996, except that the proceeds
from the sale of these bonds shall be kept in a separate and distinct account
in the State Road Fund; all proceeds from the sale of state bonds issued
pursuant to any resolution or act of the Legislature carrying into effect the
"Roads to Prosperity Amendment of 2017" to the Constitution of this
state, adopted in October 2017, except that the proceeds from the sale of these
bonds shall be kept in a separate and distinct account in the State Road Fund;
all moneys and funds appropriated to it by the Legislature; and all moneys
allotted or appropriated by the federal government to this state for road
construction and maintenance pursuant to any act of the Congress of the United
States; the proceeds of all taxes imposed upon and collected from any person,
firm or corporation and of all taxes or charges imposed upon and collected from
any county, district or municipality for the benefit of the fund; the proceeds
of all judgments, decrees or awards recovered and collected from any person,
firm or corporation for damages done to, or sustained by, any of the state
roads or parts thereof; all moneys recovered or received by reason of the
violation of any contract respecting the building, construction or maintenance
of any state road; all penalties and forfeitures imposed, recovered or received
by reason thereof; and any and all other moneys and funds appropriated to,
imposed and collected for the benefit of such fund, or collected by virtue of
any statute and payable to such fund: Provided, That notwithstanding any
provisions of this code to the contrary, 50¢ of every license fee paid pursuant to the provisions of
subdivision (2), subsection (a), section eight, article two, chapter
seventeen-b of this code shall be paid to the special fund established pursuant
to the provisions of subsection (a), section twelve, article two, chapter three
of this code.
When any money is collected
from any of the sources aforesaid, it shall be paid into the State Treasury by
the officer whose duty it is to collect and account for the same, and credited
to the State Road Fund, and shall be used only for the purposes named in this
chapter, which are: (a) To pay the principal and interest due on all state
bonds issued for the benefit of said fund, and any costs related to the
issuance thereof, and set aside and appropriated for that purpose; (b) to
pay the expenses of the administration of the road department Division
of Highways; and (c) to pay the cost of maintenance, construction,
reconstruction and improvement of all state roads.
article 26a. roads to
prosperity state road bonds.
§17-26A-1.
Definitions.
For purposes of this
article:
(1)
"Commissioner" means the West Virginia Commissioner of Highways
continued pursuant to section one, article two-a of this chapter;
(2)
"Amendment" means the amendment to the constitution of this state
entitled “Roads to Prosperity Amendment of 2017” as approved by referendum in
October, 2017;
(3) "State road
bond" means any bond or bonds issued by the state pursuant to section two
of this article;
(4) "Division"
means the West Virginia Division of Highways established under section one,
article two-a of this chapter, or any successor to all or any substantial part
of its powers and duties; and
(5)
"Secretary" means the Secretary of the West Virginia Department of
Transportation.
§17-26A-2. State road
general obligation bonds; amount; when may issue.
(a) Bonds of the State
of West Virginia, under authority of the "Roads to Prosperity Amendment of
2017" of the principal amount not to exceed in the aggregate $1.6 billion
are authorized to be issued and sold for matching available federal funds for
highway and bridge construction in this state and for general highway and
secondary roads and bridge construction or improvements in each of the
fifty-five counties in this state, as provided for by the constitution and the
provisions of this article. During the fiscal year beginning July 1, 2017, the
principal amount of $800 million in bonds may be sold. During the fiscal year beginning July 1,
2018, the principal amount of $400 million in bonds may be sold. During the
fiscal year beginning July 1, 2019, the principal amount of $200 million in
bonds may be sold. During the fiscal
year beginning July 1, 2020, the principal amount of $200 million in bonds may
be sold. Any amount not sold in a fiscal
year may be carried forward and issued in any subsequent year before July 1,
2021.
(b) These bonds may be
issued by the Governor upon resolution passed by the Legislature authorizing
the same. The bonds shall bear the date and mature at the time, bear interest
at the rates, be in amounts, be in denominations, be in the registered form,
carry registration privileges, be due and payable at the times and place and in
amounts, and be subject to terms of redemption as the resolution may allow.
(c) Both the principal
and interest of the bonds shall be payable in the lawful money of the United
States of America, and the bonds and the interest thereon shall be exempt from
taxation by the State of West Virginia, or by any county, district or
municipality thereof, which fact shall appear on the face of the bonds as part
of the contract with the holder of the bond.
(d) The bonds shall be
executed on behalf of the State of West Virginia, by the manual or facsimile
signature of the Governor, under the Great Seal of the State or a facsimile of
the Great Seal, and countersigned by the manual or facsimile signature of the Secretary
of State.
§17-26A-3. Creation
of debt service fund to pay debt service on state road general obligation bonds.
There is hereby created
a special account in the State Treasury, which shall be designated and known as
the "Roads to Prosperity Bond Debt Service Fund", into which shall be
deposited any and all amounts appropriated by the Legislature from the State Road
Fund or funds from any source whatsoever which is made liable by law for the
purpose of paying the interest on the bonds or paying off and retiring bonds
issued pursuant to this article.
§17-26A-4. Roads to Prosperity
Bond Debt Service Fund; sources used to pay bonds, interest and cost of
issuance; investment of remainder.
(a) All funds deposited
to the credit of the Roads to Prosperity Bond Debt Service Fund shall be kept
by the State Treasurer in a separate account, and all money belonging to the
fund shall be deposited in the Treasury to the credit of the fund.
(b) The fund shall be
applied by the State Treasurer for payments on the principal and interest on
bonds sold pursuant to this article as it becomes due and payable and any costs
related to the issuance thereof. The remainder of the fund, if any, shall be
invested by the West Virginia Board of Treasury Investments in the manner
authorized under article six-c, chapter twelve of this code.
§17-26A-5. Covenants
of state.
The State of West
Virginia covenants and agrees with the holders of the bonds issued pursuant
hereto as follows: (1) That the bonds are 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 the bonds; (3)
that an annual state tax shall be collected in an amount sufficient to pay, as
it may accrue, the interest on the bonds and the principal thereof; and (4)
that the tax shall be levied in any year only to the extent that the moneys
transferred to the Roads to Prosperity Bond Debt Service Fund as provided in
sections three and four of this article which are irrevocably set aside and
appropriated for and applied to the payment of the interest on and principal of
any bond becoming due and payable in such year are insufficient therefor.
§17-26A-6. Sale by Governor;
certification of annual debt service amount.
The Governor shall sell
the bonds herein authorized at a time or times as provided by resolutions
enacted by the Legislature. The Governor, in his or her discretion, may, by
executive message, request that a resolution be proposed for the issuance of
bonds pursuant to this article. The Governor shall determine the manner by
which bonds will be sold at an aggregate price equal to, above or below par
value. On or before June 1st in the fiscal year in which the first bonds are
issued pursuant to this article and June 1st of each fiscal year, the commissioner
shall certify to the Treasurer and Secretary of the Department of Revenue the
principal and interest requirement for the following fiscal year on any bonds
issued pursuant to this article.
§17-26A-7. Conflicts
of interest.
No part of the proceeds
from the sale of bonds under this article may inure to the benefit of or be
distributable to the officers or employees of the state except to pay
reasonable compensation for services rendered to the state. Any person
violating the provisions of this section is guilty of a misdemeanor and, upon
conviction thereof, shall be fined not more than $1,000, or confined in jail
not more than one year, or both fined and confined.
§17-26A-8. State road
bonds lawful investments.
All state road bonds
issued pursuant to this article shall be lawful investments for banking
institutions, societies for savings, building and loan associations, savings
and loan associations, deposit guarantee associations, trust companies, and
insurance companies, including domestic for life and domestic not for life
insurance companies.
§17-26A-9. Refunding
bonds.
Any state road general
obligation bonds which are outstanding may at any time be refunded by the
issuance of refunding bonds in an amount deemed necessary to refund the
principal of the bonds to be refunded, together with any unpaid interest
thereon; to accomplish the purpose of the amendment and to pay any premiums
necessary to be paid in connection therewith. Any refunding may be effected
whether the state road general obligation bonds to be refunded shall have then
matured or shall thereafter mature. Any refunding bonds issued pursuant to this
article shall be payable from the Roads to Prosperity Bond Debt Service Fund.
§17-26A-10.
Termination or dissolution.
Upon the termination or
dissolution of the West Virginia Division of Highways, all rights and
properties of the West Virginia Division of Highways with respect to the Roads
to Prosperity Bond Debt Service Fund shall pass to and be vested in the state,
subject to the rights of bondholders, lienholders and other creditors.
§17-26A-11. Treasurer
to determine financial advisor.
The Treasurer, in his or
her discretion, may select a competent person or firm to serve as financial
advisor for the issuance and sale of general obligation bonds issued pursuant
to this article.
§17-26A-12. Governor
to determine bond counsel.
The Governor shall
select a competent person or firm to serve as bond counsel who shall be
responsible for the issuance of a final approving opinion regarding the
legality of the sale of general obligation bonds issued pursuant to this
article. Notwithstanding the provisions of article three, chapter five of this
code, bond counsel may represent the state in court, render advice and provide
other legal services as may be requested by the Governor, the secretary or the
commissioner regarding any bond issuance pursuant to this article and all other
matters relating to the bond issue. The Governor may also, in his or her
discretion, select a person or firm to serve as underwriter for any issuance
pursuant to this article.
§17-26A-13. Approval
of and payment of all necessary expenses.
All necessary expenses,
including legal expenses, incurred in the issuance of any general obligation
bonds pursuant to this article shall be paid out of the Roads to Prosperity
Bond Debt Service Fund or the State Road Fund if so appropriated by the
Legislature. The amount of any expenses incurred shall be certified to the Treasurer
by the Commissioner of Highways.
§17-26A-14.
Dedication of taxes and fees.
(a) There shall be
dedicated an annual amount from the collections of the taxes and fees
imposed pursuant to chapters eleven, seventeen-a, seventeen-b, seventeen-c and
seventeen-d of this code, that are required to be deposited to the credit of
the State Road Fund sufficient to pay the principal and interest of any state
road bonds issued pursuant to this article.
(b) Beginning in July in
the fiscal year in which the first interest payment on the bonds issued
pursuant to this article is due, and monthly thereafter for the first ten
months of each fiscal year, there shall be deposited into the Roads to Prosperity
Bond Debt Service Fund an amount equal to one tenth of the projected annual
principal and interest requirements, as certified by the commissioner, on all
bonds issued pursuant to this article, of the tax collected pursuant to chapter
eleven of this code: Provided, That
each tenth payment shall be reduced by any interest earnings accrued to the
Roads to Prosperity Bond Debt Service Fund: Provided,
however, That if bonds issued after the annual certification have a first
interest or principal payment coming due in the then current or next fiscal
year, the monthly deposits shall be made in such a manner to provide for the
payment of the interest and/or principal coming due.
NOTE: The purpose of this bill is
to authorize the sale of bonds approved by the voters when they ratified the Roads
to Prosperity Amendment of 2017.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.