WEST VIRGINIA LEGISLATURE
2024 SECOND EXTRAORDINARY SESSION
Introduced Senate Bill 2043
By Senators Blair (Mr. President) and Woelfel [By request of the Executive]
[Introduced October 7, 2024]
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1 A BILL to amend and reenact §13-2G-3 of the Code of West Virginia, 1931, as amended; to amend
2 said code by adding thereto a new chapter, designated §13A-1-1, §13A-1-2, §13A-1-3,
3 §13A-1-4, §13A-1-5, §13A-1-6, §13A-1-7, §13A-1-8, §13A-1-9, §13A-1-10, §13A-1-11,
4 §13A-1-12, §13A-2-1, §13A-2-1a, §13A-2-2. §13A-2-3, §13A-2-4, §13A-2-5, §13A-2-6,
5 §13A-2-7, §13A-2-8, §13A-2-9, §13A-2-10, §13A-2-11, §13A-2-12, §13A-2-13, §13A-2-14;
6 §13A-3-1, §13A-3-1a, §13A-3-2, §13A-3-3, §13A-3-4, §13A-3-5, §13A-3-6, §13A-3-7,
7 §13A-3-8, §13A-3-9, §13A-3-10, §13A-3-11, §13A-3-12, §13A-3-13, §13A-3-14, §13A-4-1,
8 §13A-4-1a, §13A-4-2, §13A-4-3, §13A-4-4, §13A-4-5, §13A-4-6, §13A-4-7, §13A-4-8,
9 §13A-4-9, §13A-4-10, §13A-4-11, §13A-4-12, and §13A-4-13; to repeal §17-26-1,
10 §17-26-2, §17-26-3, §17-26-4, §17-26-5, §17-26-6, §17-26-7, §17-26-8, §17-26-9,
11 §17-26-10, §17-26-11, §17-26-12, §17-26-13, and §17-26-14 of said code; to repeal
12 §17-26A-1, §17-26A-2, §17-26A-3, §17-26A-4, §17-26A-5, §17-26A-6, §17-26A-7,
13 §17-26A-8, §17-26A-9, §17-26A-10, §17-26A-11, §17-26A-12, §17-26A-13 of said code;
14 and to repeal §31-15b-1; §31-15b-2, §31-15b-3, §31-15b-4, §31-15b-5, §31-15b-6,
15 §31-15b-7, §31-15b-8, §31-15b-9, §31-15b-10, §31-15b-11, §31-15b-12, and §31-15b-13
16 of said code, all relating generally to bonded indebtedness of the State of West Virginia;
17 requiring recommendation from the State Treasurer prior to issuing refunding bonds
18 beginning on a certain date; authorizing legislative rules related to refunding bonds,
19 including emergency rules for a limited period; setting forth legislative intent and findings;
20 defining terms; clarifying application of new article; specifying when the Treasurer may
21 issue general obligation bonds; setting forth amount, form, and terms of general obligation
22 bonds; declaring general obligation bonds to be covenants of the state and lawful
23 investments; providing for manner of sale of general obligation bonds; requiring creation of
24 a debt service fund for each general obligation bond series; specifying permissible use of a
25 debt service fund; authorizing investment of a debt service fund; authorizing the Treasurer
26 to issue certain refunding bonds; requiring the Treasurer to determine the bond counsel
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27 and financial advisor for general obligation bonds; exempting selection of bond-related
28 services from certain state purchasing requirements; authorizing the Treasurer to pay
29 general obligation bond issuance expenses from the debt service fund; prohibiting conflicts
30 of interest; creating a criminal misdemeanor offense and providing penalties for violation
31 on conflict of interest provisions; authorizing legislative rules related to general obligation
32 bonds, including emergency rules; relocating statutory language concerning the state’s
33 outstanding general obligation bonds to a single chapter of code; declaring legislative
34 intent; providing for statutory construction; and making various technical corrections.
Be it enacted by the Legislature of West Virginia:
CHAPTER 13. PUBLIC BONDED INDEBTEDNESS.
ARTICLE 2G. STATE REFUNDING BOND ACT.
§13-2G-3. Issuance of refunding bonds.
1 (a) The state may, in the manner and subject to the limitations and conditions contained in
2 this article, issue its refunding bonds, at a public or private sale, for the purpose of refunding the
3 bonds of the state then outstanding, including the payment of any redemption premium thereon
4 and any interest accrued or to accrue to the date of redemption of such bonds. A determination by
5 the state that any refunding is advantageous or necessary, or that any of the outstanding
6 obligations should be called for redemption on the first or any subsequent available redemption
7 date or permitted to remain outstanding until their respective dates of maturity, shall be conclusive:
8 Provided, That a determination by the state to issue its refunding bonds as provided in this article
9 is subject to the provisions of the Debt Management Act set forth in §12-6A-1 et seq. of this code.
10 (b) Beginning July 1, 2025, a state agency may not issue refunding bonds unless the
11 agency first receives and reviews a recommendation from the State Treasurer.
12 (1) The state agency desiring to issue refunding bonds shall, at least 90 days prior to the
13 sale of said bonds, submit a recommendation request to the State Treasurer: Provided, That the
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14 Treasurer may waive the recommendation request deadline upon a showing of good cause by the
15 agency. The recommendation request shall be on a form and contain such information as may be
16 required by the Treasurer.
17 (2) After review of the recommendation request, the State Treasurer shall provide the
18 agency with a recommendation as to whether the issuance of the refunding bonds is
19 advantageous or necessary for the state, considering the state’s total debt position and capacity,
20 and whether the issuance of said bonds complies with applicable state law.
21 (3) The State Treasurer may propose rules for legislative approval to carry out the
22 requirements of this subsection, in accordance with §29A-3-1 et seq. of this code. Prior to July 1,
23 2025, the Treasurer may promulgate emergency legislative rules, in accordance with §29A-3-15 of
24 this code, as necessary to implement the new requirements of this subsection.
CHAPTER 13A. GENERAL OBLIGATION BONDED INDEBTEDNESS.
ARTICLE 1. GENERAL OBLIGATION BONDS.
§13A-1-1. Legislative findings and intent.
1 (a) The Legislature finds that:
2 (1) As the chief financial officer of the State of West Virginia, the State Treasurer is the
3 constitutional officer best-suited to manage the state’s general obligation bonded indebtedness
4 consistent with the state’s overall financial health, as the Treasurer serves on all of the state’s
5 major financial decision-making boards and is charged with monitoring and reporting the state’s
6 total projected debt pursuant to §12-6A-1 et seq. of this code;
7 (2) Placing the authority to issue, sell, and administer general obligation bonds on behalf of
8 the State of West Virginia under the purview of the West Virginia State Treasurer will ensure that
9 the state’s constitutional office with expertise in financial services is empowered to manage the
10 state’s bonded indebtedness according to the highest fiduciary and industry standards; and
11 (3) Relocating all provisions of this code relating to outstanding general obligation bonds to
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12 a single chapter of code will provide clarity and posterity to both citizens and lawmakers
13 concerning the state’s procedures for issuing, selling, and managing general obligation bonds.
14 (b) By enacting this Chapter, the Legislature intends to set forth a standardized process
15 under the purview of the State Treasurer for the issuance, sale, and administration of all general
16 obligation bonds hereafter authorized by the West Virginia Constitution.
17 (c) By relocating the provisions of §17-26-1 et seq., §17-26A-1 et seq., and §31-15B-1 to
18 appear within this chapter, it is not the intent of the Legislature to authorize the issuance or sale of
19 new general obligation bonds or to alter or amend the terms, conditions, or legal status of any
20 outstanding general obligation bonds of the state in any manner whatsoever.
§13A-1-2. Definitions.
1 "Authorizing resolution" means the resolution adopted by the Legislature to authorize the
2 issuance and sale of a general obligation bond, as described in §13A-1-4 of this code.
3 "General obligation bond" means a bond, authorized by an amendment to the West
4 Virginia Constitution after the effective date of this article, which constitutes a direct and general
5 obligation of the State of West Virginia and for which the state has pledged its full faith and credit to
6 guarantee the bond’s principal and interest.
7 "Refunding bond" means a bond issued for the purpose of refunding the principal of an
8 underlying general obligation bond and any unpaid interest thereon.
9 "State Treasurer" or "Treasurer" means the West Virginia State Treasurer.
10 "Underlying bonds" refers to the specific general obligation bond series for which a
11 particular debt service fund is created or the specific general obligation bond series the Treasurer
12 seeks to refund by selling a refunding bond.
§13A-1-3. Application of article.
1 The requirements for the issuance, sale, and management of bonds set forth in this article
2 apply only to general obligation bonds that are authorized by an amendment to the West Virginia
3 Constitution after the effective date of this article, and said provisions do not apply to revenue
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4 supported bonds authorized by Chapter 13, or to any bonds authorized by another article of this
5 code.
§13A-1-4. General obligation bonds; amount; when may issue.
1 (a) The Treasurer may issue general obligation bonds authorized by the West Virginia
2 Constitution upon the Legislature’s adoption of a resolution authorizing the same. The Treasurer,
3 in his or her discretion, may make a written request to the President of the West Virginia Senate
4 and the Speaker of the West Virginia House of Delegates that an authorizing resolution be
5 adopted for the issuance of bonds pursuant to this article.
6 (b) The bonds shall bear the date and mature at the time, bear interest at the rates, be in
7 amounts, be in denominations, be in the registered form, carry registration privileges, be due and
8 payable at the times and place and in amounts, and be subject to terms of redemption as the
9 authorizing resolution may allow.
10 (c) Both the principal and interest of the bonds shall be payable in the lawful money of the
11 United States of America, and the bonds and the interest thereon shall be exempt from taxation by
12 the State of West Virginia, or by any county, district, or municipality thereof, which fact shall appear
13 on the face of the bonds as part of the contract with the holder of the bond.
14 (d) The bonds shall be executed on behalf of the State of West Virginia, by the manual or
15 facsimile signature of the Treasurer under the Great Seal of the State, or a facsimile of the Great
16 Seal, and shall be countersigned by the manual or facsimile signature of the Secretary of State.
§13A-1-5. Covenants of the state; lawful investments.
1 (a) Any general obligation bond issued by the Treasurer pursuant to the West Virginia
2 Constitution and the requirements of this article shall constitute a covenant and agreement by the
3 state, with the holders of said bonds, to the following:
4 (1) That the bonds are a direct and general obligation of the State of West Virginia;
5 (2) That the full faith and credit of the state is pledged to secure the payment of the principal
6 and interest of the bonds;
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7 (3) That an annual state tax shall be collected in an amount sufficient to pay, as it may
8 accrue, the interest on the bonds and the principal of the bonds; and
9 (4) That the tax shall be levied in any year only to the extent that the moneys transferred to
10 the debt service fund for the bond pursuant to §13A-1-7 of this code, which are irrevocably set
11 aside and appropriated for and applied to the payment of the interest on and principal of any bond
12 becoming due and payable in such year, are insufficient to pay said interest and principal.
1 (b) All general obligation bonds sold pursuant to this article shall be lawful investments for
2 banking institutions, societies for savings, building and loan associations, savings and loan
3 associations, deposit guarantee associations, trust companies, and insurance companies,
4 including domestic for life and domestic not for life insurance companies.
§13A-1-6. Sale by Treasurer; certification of annual debt service amount.
1 The Treasurer shall determine the manner by which bonds will be sold at an aggregate
2 price equal to, above, or below par value. On or before June 1 in the fiscal year in which bonds are
3 issued pursuant to constitutional authorization and June 1 of each fiscal year, the Treasurer shall
4 certify to the Legislature and Secretary of the Department of Revenue the principal and interest
5 requirement for the following fiscal year on any bonds issued pursuant to this article.
§13A-1-7. Debt service funds; purpose; investment.
1 (a) For each series of general obligation bonds issued and sold, the Treasurer shall
2 establish and administer a separate and distinct debt service fund, and all money belonging to the
3 fund shall be deposited in the State Treasury to the credit of the fund. Each fund created pursuant
4 to this section shall be named in such a manner as to clearly identify the underlying bond series.
5 (b) A fund created pursuant to this section shall receive all moneys from any source
6 whatsoever which is made liable by law for the purpose of paying the interest on the bonds or
7 paying off and retiring bonds issued pursuant to this article.
8 (c) The State Treasurer shall deposit all payments on the principal and interest on a
9 general obligation bond sold pursuant to this article, as it becomes due and payable, and apply
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10 any costs related to the issuance thereof to the specific debt service fund created for the
11 underlying bond series. The remainder of the fund, if any, shall be invested by the West Virginia
12 Board of Treasury Investments in the manner authorized under §12-6C-1 et seq. of this code.
§13A-1-8. Refunding bonds.
1 (a) The Treasurer may refund outstanding general obligation bonds issued pursuant to this
2 article by issuing refunding bonds in an amount deemed necessary to refund the principal of the
3 underlying bonds, together with any unpaid interest thereon.
4 (b) The proceeds of any refunding bond issued pursuant to this section may be used to
5 accomplish the purpose of the underlying bond and to pay any premiums necessary to be paid in
6 connection therewith.
7 (c) Any refunding may be affected whether the general obligation bonds to be refunded
8 shall have then matured or shall thereafter mature.
9 (d) Any refunding bond issued pursuant to this article shall be payable from the debt
10 service fund created for the underlying general obligation bond series.
§13A-1-9. Treasurer to determine bond counsel and financial advisor.
1 (a) The Treasurer shall select a competent person or firm to serve as bond counsel who
2 shall be responsible for the issuance of a final approving opinion regarding the legality of the sale
3 of general obligation bonds issued pursuant to this article. Notwithstanding the provisions of
4 §5-3-1 et seq. of this code, bond counsel may represent the state in court, render advice, and
5 provide other legal services as may be requested by the Treasurer regarding any bond issuance
6 pursuant to this article and all other matters relating to the bond issue. The Treasurer may also, in
7 his or her discretion, select a person or firm to serve as underwriter for any issuance pursuant to
8 this article.
9 (b) The Treasurer, in his or her discretion, may select a competent person or firm to serve
10 as financial advisor for the issuance and sale of general obligation bonds.
11 (c) The selection of bond counsel, financial advisors, or any other provider of services
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12 related to bond issuance is not subject to the provisions of §5A-3-1 et seq. of this code.
§13A-1-10. Approval of and payment of all necessary expenses.
1 The State Treasurer is authorized to pay all necessary expenses incurred in the issuance
2 of a general obligation bond series, including legal expenses, out of the debt service fund created
3 for the said bond series.
§13A-1-11. Conflicts of interest.
1 No part of the proceeds from the sale of bonds under this article may inure to the benefit of
2 or be distributable to the officers or employees of the state except to pay reasonable
3 compensation for services ren