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SB500 SUB1 Senate Bill 500 History

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WEST virginia legislature

2019 regular session

Committee Substitute

for

Senate Bill 500

By Senators Boso, Azinger, Baldwin, Beach, Clements, Cline, Facemire, Hamilton, Hardesty, Ihlenfeld, Jeffries, Lindsay, Mann, Maroney, Maynard, Palumbo, Plymale, Roberts, Romano, Rucker, Smith, Stollings, Swope, Sypolt, Takubo, Tarr, Trump, Weld, and Woelfel

[Originating in the Committee on Transportation and Infrastructure; Reported on February 13, 2019]

 

 

A BILL to amend and reenact §11B-2-20 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new article, designated §31-15D-1, §31-15D-2, §31-15D-3, §31-15D-4, and §31-15D-5, all relating to creating the Sewer and Water Infrastructure Replacement and Rehabilitation Act; creating the Sewer and Water Infrastructure Replacement and Rehabilitation Fund; providing for funding and administration of the fund; setting forth responsibilities and authorities for the Secretary of Revenue, West Virginia Investment Management Board, State Treasurer, West Virginia Infrastructure and Jobs Development Council, and West Virginia Water Development Authority related to the fund; directing the West Virginia Water Development Authority to create a special sub account in the West Virginia Infrastructure Fund designated the SWIRRA Sub Account; allowing the West Virginia Infrastructure and Jobs Development Council to direct the authority to govern, administer, and account for the SWIRRA Sub Account in the same manner as the West Virginia Infrastructure Fund; providing a short title; defining terms; authorizing grants by the West Virginia Infrastructure and Jobs Development Council; establishing eligibility requirements, limitations, guidelines, and application processes concerning grants; imposing requirements on the West Virginia Infrastructure and Jobs Development Council relating to the Sewer and Water Infrastructure Replacement and Rehabilitation Fund and grants; requiring publication of certain information; setting forth application and engineering study limitations; and requiring rulemaking.

Be it enacted by the Legislature of West Virginia:


CHAPTER 11B. DEPARTMENT OF REVENUE.


ARTICLE 2. STATE BUDGET OFFICE.


§11B-2-20. Reduction of appropriations; powers of Governor; Revenue Shortfall Reserve Fund and permissible expenditures therefrom; funding of Sewer and Water Infrastructure Replacement and Rehabilitation Fund.

(a) Notwithstanding any provision of this section, the Governor may reduce appropriations according to any of the methods set forth in §11B-2-21 and §11B-2-22 of this code. The Governor may, in lieu of imposing a reduction in appropriations, request an appropriation by the Legislature from the Revenue Shortfall Reserve Fund established in this section.

(b) The Revenue Shortfall Reserve Fund is continued within the State Treasury. The Revenue Shortfall Reserve Fund shall be funded continuously and on a revolving basis in accordance with this subsection up to an aggregate amount not to exceed 13 percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended. The Revenue Shortfall Reserve Fund shall be funded as set forth in this subsection from surplus revenues, if any, in the State Fund, General Revenue, as the surplus revenues may accrue from time to time.

Within 60 days of the end of each fiscal year, the secretary shall cause to be deposited into the Revenue Shortfall Reserve Fund such amount of the first 50 percent of all surplus revenues, if any, determined to have accrued during the fiscal year just ended, as may be necessary to bring the balance of the Revenue Shortfall Reserve Fund to 13 percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended. If at the end of any fiscal year the Revenue Shortfall Reserve Fund is funded at an amount equal to or exceeding 13 percent of the state's General Revenue Fund budget for the fiscal year just ended, then there shall be no further deposit by the secretary under the provisions of this section of any surplus revenues as set forth in this subsection until that time the Revenue Shortfall Reserve Fund balance is less than 13 percent of the total appropriations from the State Fund, General Revenue.

 (c) Not earlier than November 1 of each calendar year, if the state’s fiscal circumstances are such as to otherwise trigger the authority of the Governor to reduce appropriations under this section or §11B-2-21 or §11B-2-22 of this code, then in that event the Governor may notify the presiding officers of both houses of the Legislature in writing of his or her intention to convene the Legislature pursuant to section 19, article VI of the Constitution of West Virginia for the purpose of requesting the introduction of a supplementary appropriation bill or to request a supplementary appropriation bill at the next preceding regular session of the Legislature to draw money from the surplus Revenue Shortfall Reserve Fund to meet any anticipated revenue shortfall. If the Legislature fails to enact a supplementary appropriation from the Revenue Shortfall Reserve Fund during any special legislative session called for the purposes set forth in this section or during the next preceding regular session of the Legislature, then the Governor may proceed with a reduction of appropriations pursuant to §11B-2-21 and §11B-2-22 of this code. Should any amount drawn from the Revenue Shortfall Reserve Fund pursuant to an appropriation made by the Legislature prove insufficient to address any anticipated shortfall, then the Governor may also proceed with a reduction of appropriations pursuant to §11B-2-21 and §11B-2-22 of this code.

(d) Upon the creation of the fund, the Legislature is authorized and may make an appropriation from the Revenue Shortfall Reserve Fund for revenue shortfalls, for emergency revenue needs caused by acts of God or natural disasters, or for other fiscal needs as determined solely by the Legislature.

(e) Prior to October 31 in any fiscal year in which revenues are inadequate to make timely payments of the state’s obligations, the Governor may, by executive order, after first notifying the presiding officers of both houses of the Legislature in writing, borrow funds from the Revenue Shortfall Reserve Fund: Provided, That for the fiscal year 2014, pursuant to this subsection and subject to all other conditions, requirements, and limitations set forth in this section, the Governor may borrow funds from the Revenue Shortfall Reserve Fund prior to the first day of April. The amount of funds borrowed under this subsection shall not exceed one and one-half percent of the general revenue estimate for the fiscal year in which the funds are to be borrowed, or the amount the Governor determines is necessary to make timely payment of the state’s obligations, whichever is less. Any funds borrowed pursuant to this subsection shall be repaid, without interest, and redeposited to the credit of the Revenue Shortfall Reserve Fund within 90 days of their withdrawal.

(f) The Revenue Shortfall Reserve Fund – Part B is continued within the State Treasury. The Revenue Shortfall Reserve Fund – Part B shall consist of moneys transferred from the West Virginia Tobacco Settlement Medical Trust Fund pursuant to the provisions of §4-11A-2 of this code, repayments made of the loan from the West Virginia Tobacco Settlement Medical Trust Fund to the Physician's Mutual Insurance Company pursuant to the provisions of §33-20F-1 et seq. of this code and all interest and other return earned on the moneys in the Revenue Shortfall Reserve Fund – Part B. Moneys in the Revenue Shortfall Reserve Fund – Part B may be expended solely for the purposes set forth in §11B-2-20(d) of this code, subject to the following conditions:

(1) No moneys in the Revenue Shortfall Reserve Fund – Part B nor any interest or other return earned thereon may be expended for any purpose unless all moneys in the Revenue Shortfall Reserve Fund described in §11B-2-20(b) of this code have first been expended, except that the interest or other return earned on moneys in the Revenue Shortfall Reserve Fund – Part B may be expended as provided in §11B-2-20(f)(2) of this code;

(2) Notwithstanding any other provision of this section to the contrary, the Legislature may appropriate any interest and other return earned thereon that may accrue on the moneys in the Revenue Shortfall Reserve Fund – Part B after June 30, 2025, for expenditure for the purposes set forth in §4-11A-3 of this code; and

(3) Any appropriation made from Revenue Shortfall Reserve Fund – Part B shall be made only in instances of revenue shortfalls or fiscal emergencies of an extraordinary nature.

(g) Subject to the conditions upon expenditures from the Revenue Shortfall Reserve Fund – Part B prescribed in §11B-2-20(f) of this code, in appropriating moneys pursuant to the provisions of this section, the Legislature may in any fiscal year appropriate from the Revenue Shortfall Reserve Fund and the Revenue Shortfall Reserve Fund – Part B a total amount up to, but not exceeding, 10 percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended.

(h) (1) Of the moneys in the Revenue Shortfall Reserve Fund, $100 million, or such greater amount as may be certified as necessary by the Director of the Budget Office for the purposes of §11B-2-20(e) of this code, shall be made available to the West Virginia Board of Treasury Investments for management and investment of the moneys in accordance with the provisions of §12-6C-1 et seq. of this code. All other moneys in the Revenue Shortfall Reserve Fund shall be made available to the West Virginia Investment Management Board for management and investment of the moneys in accordance with the provisions of §12-6-1 et seq of this code. Any balance of the Revenue Shortfall Reserve Fund, including accrued interest and other return earned thereon at the end of any fiscal year, does not revert to the General Fund but shall remain in the Revenue Shortfall Reserve Fund for the purposes set forth in this section.

(2) All of the moneys in the Revenue Shortfall Reserve Fund – Part B shall be made available to the West Virginia Investment Management Board for management and investment of the moneys in accordance with the provisions of §12-6-1 et seq of this code. Any balance of the Revenue Shortfall Reserve Fund – Part B, including accrued interest and other return earned thereon at the end of any fiscal year, shall not revert to the General Fund but shall remain in the Revenue Shortfall Reserve Fund – Part B for the purposes set forth in this section.

(i) The Sewer and Water Infrastructure Replacement and Rehabilitation Fund created in §31-15D-2 of this code shall be funded as set forth in this subsection from surplus revenues, if any, in the State Fund, General Revenue, as the surplus revenues may accrue from time to time. The Sewer and Water Infrastructure Replacement and Rehabilitation Fund shall be funded continuously and on a revolving basis in accordance with this subsection. Within 60 days of the end of each fiscal year, the secretary shall cause to be deposited into the Sewer and Water Infrastructure Replacement and Rehabilitation Fund such amount of 25 percent of all surplus revenues, in the State Fund, General Revenue, if any, determined to have accrued during the fiscal year just ended.

CHAPTER 31. CORPORATIONS.


ARTICLE 15D. Sewer and Water Infrastructure Replacement and Rehabilitation ACT.


§31-15D-1. Short title; definitions.

(a) This article may be cited as the “Sewer and Water Infrastructure Replacement and Rehabilitation Act” or “SWIRRA”.

(b) Unless a different meaning is clearly indicated by the context, the following words and phrases as used in this article have the following meanings:

“Authority” means the West Virginia Water Development Authority created by §22C-1-1 et seq.

“Board” means the West Virginia Investment Management Board created in §12-6-3 of this code.

“Council” means the West Virginia Infrastructure and Jobs Development Council created in §31-15A-3 of this code.

“Eligible facility” means an underground water or wastewater facility in West Virginia that is owned by a governmental agency: Provided, That the facility was originally constructed more than 30 years before a grant request is made for such facility pursuant to this article.

“Eligible project” means a project to replace or rehabilitate an eligible facility and shall include performance of a preliminary engineering study on an eligible facility to identify sewer infrastructure infiltration and inflow, water distribution or sewer collection system integrity, water loss, and leak detection. An eligible project may provide exclusively for a preliminary engineering study to identify sewer infrastructure infiltration and inflow, water distribution or sewer collection system integrity, water loss, and leak detection.

“Governmental agency” means any municipality, sanitary district, public service district, water association, sewer association, or regional governmental authority authorized to own and operate a water or wastewater facility.

“Infrastructure Fund” means the West Virginia Infrastructure Fund created and established in §31-15A-9 of this code, which is administered by the authority.

“Reserve” means the funds in the SWIRRA Fund administered solely by the board pursuant to §31-15D-2(b) of this code.

 “SWIRRA Fund” means the Sewer and Water Infrastructure Replacement and Rehabilitation Fund created in §31-15D-2 of this code.

“Treasurer” means the West Virginia State Treasurer.


§31-15D-2. Sewer and Water Infrastructure Replacement and Rehabilitation Fund; fund administration; SWIRRA Sub Account.

(a) The Sewer and Water Infrastructure Replacement and Rehabilitation Fund is hereby created as a special revenue fund in the State Treasury to be invested, administered, and expended only as provided in this article. The SWIRRA Fund consists of moneys received from any gifts, grants, bequests or transfers from any source, including surplus revenues as set forth in §11B-2-20 of this code, and all interest and other income earned from investment of moneys in the SWIRRA Fund.

(b) The first $100 million deposited into the SWIRRA Fund shall be invested by the board. The council shall not dispense funds from the SWIRRA Fund unless it has a reserve of at least $100 million as of June 30 of each year. Such funds constitute the reserve of the SWIRRA Fund.

(c) Funds in the SWIRRA Fund shall be administered by the council for the purposes and in the manner set forth in this article: Provided, That the council shall keep all funds with the board that council does not plan to grant within 180 days. The council, or the authority at the discretion of the council, or both, may enter into agreements with the board or the West Virginia State Treasurer, or both, as the council deems appropriate, for the investment of the funds in excess of the reserve.

(d) The authority shall create a special sub account in the Infrastructure Fund designated the “SWIRRA Sub Account”. Funds held in the SWIRRA Sub Account shall be used by the council exclusively for the purposes and in the manner set forth in this article. Council may direct the deposit of funds from the SWIRRA Fund that are in excess of the reserve into the SWIRRA Sub Account: Provided, That the council may only direct deposits into the SWIRRA Sub Account in an amount not exceeding the total amount of grants under this article that the council plans to award within 60 days of such deposit request.

(e) The council may direct the authority to govern, administer, and account for the SWIRRA Sub Account in the same manner as the Infrastructure Fund: Provided, That the authority may not disburse any funds in the SWIRRA Sub Account unless specifically directed to do so by council in accordance with the provisions of this article.

§31-15D-3. Grants; expenditures.


(a) The council is authorized to award, as grants, beginning on November 1 of each year, not more than 50 percent of all investment earnings on the SWIRRA Fund during the previous fiscal year: Provided, That when the SWIRRA Fund contains at least $250 million as of June 30, the council is authorized to grant, beginning on November 1 of that year, not more than 50 percent of all investment earnings on the SWIRRA Fund during the previous fiscal year and all moneys received from the previous fiscal year surplus revenues pursuant to §11B-2-20(i) of this code.

(b) The council may award not more than $1 million to a governmental agency per grant application for an eligible project each fiscal year. The council may not award a grant that exceeds 75 percent of the total project cost for an eligible project. A grant may not be awarded unless the governmental agency has another funding source that contributes at least 25 percent of the total project cost for the eligible project.

(c) Council may advance grant funds to a governmental agency from time to time upon receipt of invoices evidencing work on the eligible project.

(d) Grants awarded under this section are independent of grants the council may award under §31-15A-1 et seq. of this code. Any restrictions and limitations applicable to grants under this article shall not apply to §31-15A-1 et seq. of this code, and any restrictions and limitations applicable to grants under §31-15A-1 et seq. of this code shall not apply to this article. Council shall not take into consideration a grant awarded under this article when determining the funding level and percentage of project cost as required by §31-15A-10 of this code.


§31-15D-4. Guidelines and applications for grants; rule-making; grant review factors and considerations; publication of information.


(a) In order to implement and carry out the intent of this article, the council shall propose rules for legislative approval in accordance with the provisions of §29A-3-1 et seq. of this code. Such rules shall provide instructions on how and when a governmental agency may apply for a grant for an eligible project, set forth comprehensive and uniform guidelines for use by the council in evaluating a grant request, and set forth further detail to implement and carry out the intent of this article.

(b) The guidelines that council shall use when evaluating a grant request shall include the following factors:

(1) The public health benefits of the eligible project;

(2) The economic development benefits of the eligible project;

(3) The degree to which the eligible project will correct deficiencies in the compliance of water distribution or sewage collection or treatment facilities with state or federal laws, regulations, or standards;

(4) The degree to which the eligible project encourages effective and efficient consolidation of water or sewage treatment systems;

(5) The cost effectiveness of the eligible project as compared with alternatives that achieve substantially the same public health or economic development benefits, including the consideration of providing maximum feasible fire protection;

(6) The availability of alternative sources of funding which could finance all or a part of the eligible project, and the need for the assistance of the council to finance the eligible project or attract other sources of funding;

(7) The applicant's ability to operate and maintain the system if the eligible project is approved;

(8) The degree to which the eligible project achieves other state or regional planning goals;

(9) The estimated date upon which the eligible project could commence if funding were available and the estimated completion date of the eligible project;

(10) The evidence demonstrating that the grant request applies to a project that is an eligible project for an eligible facility; and

(11) Such other considerations as the council may consider necessary or appropriate to accomplish the purpose and intent of this article.

(c) The council shall create an application form which shall be used by all governmental agencies requesting a grant pursuant to this article. The application form shall contain all information required by all state infrastructure agencies that will be required to issue permits and certificates for an eligible project. The application shall require the governmental agency to set forth the following information:

(1) The evidence demonstrating that the grant request applies to a project that is an eligible project for an eligible facility;

(2) The type and location of the eligible facility and eligible project;

(3) The estimated total cost of the eligible project, including, but not limited to, costs for construction, permit fees, professional design services, legal and accounting services, and surveying;

(4) The amount of grant assistance required and the specific uses of the grant funding;

(5) Other sources of funding available or potentially available for the eligible project;

(6) Information demonstrating the need for the eligible project and that a grant pursuant to this article is the most economically feasible funding method to completing the eligible project; and

(7) Such other information as the council considers necessary to enable it to determine whether an eligible project should be approved or denied.

(d) Council shall publish on its website the following information:

(1) Current copies of this article and any legislative rule proposed thereunder;

(2) The application form for grants pursuant to this article;

(3) An estimate of the amount of money available for grants;

(4) An annual estimate of the amount invested in the SWIRRA Fund; and

(5) An annual summary of grants awarded, including the type and location of the eligible facility, type of eligible project, and amount of grant awarded.

(e) The council shall review grant applications for eligible projects and prepare a list of all eligible project applications.

(f) Grants shall be awarded equally, within five percent, among the state’s congressional districts within 60 days of the final application review.

(g) In reviewing each application for an eligible project, the council shall use the engineering, financial, and technical expertise of the respective staffs of the state infrastructure agencies represented on the council so as to recommend for grants those eligible projects which are consistent with the purposes and intent of this article. The council may include in its findings a recommendation that an application should consider technical reports on the project prepared by other infrastructure agencies or by a federal agency.


§31-15D-5. Application limitations; limitation concerning engineering studies.


(a) Governmental agencies with eligible projects may apply for not more than one eligible project in a given fiscal year if the SWIRRA Fund is less than $250 million.

(b) Governmental agencies with eligible projects may apply for not more than two eligible projects in a given fiscal year if the SWIRRA Fund exceeds $250 million.

(c) The total grant amount awarded or contributed to an eligible project cost for a preliminary engineering study shall not exceed $150,000 per eligible facility during a fiscal year.


 

NOTE: The purpose of this bill is to create the Sewer and Water Infrastructure Replacement and Rehabilitation Act. The bill creates the Sewer and Water Infrastructure Replacement and Rehabilitation Fund, which is funded from surplus revenues and investments. The bill provides that the fund shall be invested by the West Virginia Investment Management Board, may be held and invested in part pursuant to an agreement with the State Treasurer, and be administered by the West Virginia Infrastructure and Jobs Development Council. The bill permits a specified amount of surplus revenue and investment income be used to replace certain aging water and sewer facilities. The bill establishes the authority of the West Virginia Infrastructure and the Jobs Development Council. The bill establishes eligibility requirements. The bill establishes guidelines and a grant application process. The bill requires rule-making and publishing of certain information.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

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