H. B. 3156
(By Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive]
[Introduced March 30, 2001; referred to the
Committee on Finance.]
A BILL to amend and reenact section twenty-one, article six,
chapter twelve of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to amend article fifteen,
chapter thirty-one of said code by adding thereto a new
section, designated six-b; and to amend and reenact section
fourteen, article three, chapter thirty-three of said code,
all relating to the construction and permanent financing of
new regional jail, juvenile detention and correctional
facilities; providing for the permanent financing of new jail
and juvenile detention facilities; authorizing the return of
certain investment capital to the investment management board;
authorizing the issuance of bonds by the West Virginia
economic development authority to prepay certain investment
capital and to finance the construction new jail and juvenile
detention facilities; and providing for the dedication and transfer of certain amounts from the insurance tax fund to the
regional jail and correctional facility debt service fund.
Be it enacted by the Legislature of West Virginia:
That section twenty-one, article six, chapter twelve of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; that article fifteen, chapter
thirty-one of said code be amended by adding thereto a new section,
designated section six-b; and that section fourteen, article three,
chapter thirty-three of said code be amended and reenacted, all to
read as follows:
CHAPTER 12. PUBLIC MONEYS AND SECURITIES.
ARTICLE 6. WEST VIRGINIA INVESTMENT MANAGEMENT BOARD.
§12-6-21. Investment with regional jail and correctional
facility authority.
(a) The Legislature finds and declares:
(1) That the supreme court of appeals has determined and
ordered that the constitution of this state imposes a duty on
behalf of the state to make significant improvements in the jail
and correctional facility system, including the duty to make
capital improvements to facilities and to pay for the cost of those
improvements;
(2) That construction of capital improvements requires that
the cost of the facilities be financed over time; that capital
improvements cannot be
funding funded out of the current year appropriations of the Legislature; and that section fifty-one,
article six of the constitution prohibits the Legislature amending
the budget bill so as to create a deficit;
(3) That while the supreme court of appeals is empowered to
interpret the laws, including the constitution of the state,
section one, article ten of the constitution grants to the
Legislature the power of taxation; section fifty-one, article six
of the constitution grants to the Legislature the power of
appropriation; and section one, article five of the constitution
prohibits any branch of government from exercising powers properly
belonging to another;
(4) That the enacting of new taxes, or the diversion of
revenues from other essential departments and functions of
government, in order to support capital improvements in jails and
correctional facilities, is not in the interests of the people of
the state represented in the Legislature, and is specifically
rejected by the Legislature in its exercise of its legitimate
constitutional powers;
(5) That the decision of the supreme court of appeals,
imposing a duty on the state to construct and pay for capital
improvements to jails and correctional facilities arising out of
the Bill of Rights of the United States constitution declared
ratified in the year one thousand seven hundred ninety-one, and the
state constitution of the year one thousand eight hundred sixty-three, constitutes a prior liability of the state within the
meaning of section four, article ten of the constitution and an
exception to the constitutional limitation on contracting state
debt;
(6) That the construction of capital improvements of jail and
correctional facilities may be funded through funds available for
investment through the West Virginia investment management board,
invested in such a manner as to be assured as high a rate of return
as would be earned if these funds were otherwise invested, and
repaid by the state as provided in this article.
(b) The investment management board shall upon request of the
regional jail and correctional facility authority transfer moneys
as an investment, from funds available for investment from the
public employees retirement system, to the regional jail and
correctional facility authority. The amount transferred may not
exceed one hundred fifty million dollars in the aggregate and shall
be used for the purposes of financing construction of regional
jails, correctional facilities, juvenile detention facilities,
juvenile correctional facilities, or extensions, renovations,
improvements or additions thereto, or for the replacement or
renovation of existing facilities. If the board has loaned money to
the state building commission under subsection (b), section
nineteen of this article, the total amount loaned shall be repaid
to the board from funds made available under the investment made pursuant to this section. Prior to the expenditure of any of the
funds, the regional jail and correctional facility authority shall
certify to the joint committee on government and finance a list of
projects that are to be funded from the invested funds. This
certified list may not thereafter be altered or amended other than
by legislative enactment. Funds shall be invested with the regional
jail and correctional facility authority as requested by the
regional jail and correctional facility authority. The money
invested shall earn a return at a rate equal to the annualized rate
of return earned by the core fixed-income portfolio of the public
employees retirement system over the previous five years, plus one
tenth of one percent:
Provided, That in all events this rate of
return may not be less than five percent per annum. The monthly
rate of return shall be calculated every quarter. The manner and
timing of the investment shall be determined by the board. The
total of the amounts invested may not exceed a total of one hundred
fifty million dollars during fiscal year one thousand nine hundred
ninety-eight, and fiscal year one thousand nine hundred ninety-
nine, cumulatively. The authority to make the investment authorized
by this section expires on the thirtieth day of June, one thousand
nine hundred ninety-nine.
(c) There is created in the state treasury a regional jail and
correctional facility investment fund dedicated to the payment of
investment earnings and the return of capital invested under this section. The treasurer shall administer the fund. The fund is an
interest-bearing account with interest earned credited to and
deposited back into the fund. The fund consists of amounts required
to be deposited by section fourteen, article three, chapter thirty-
three of this code.
(d) The treasurer shall, monthly, transfer amounts from the
regional jail and correctional facility investment fund to the
board that are sufficient to allow investment earnings to be paid
and the capital invested returned in substantially equal amounts by
the thirty-first day of August, two thousand twenty-three:
Provided, That the amount of investment earnings paid and the
capital invested returned during the fiscal year beginning the
first day of July, one thousand nine hundred ninety-eight, may not
exceed ten million dollars. Payment representing investment
earnings and the return of capital invested shall begin six months
from the date the initial funds are invested, or by the tenth day
of January, one thousand nine hundred ninety-nine, whichever is
later.
(e) The board shall calculate the amount of the projected
annual investment earnings to be paid and the capital invested to
be returned and certify the amount to the treasurer on the first
day of December of each year, until all investment earnings are
paid and the total capital invested is returned.
(f) As a condition precedent to the transfer and investment of moneys by the investment management board pursuant to subsection
(b) of this section, either the investment management board or the
regional jail and correctional authority shall have first caused a
judicial determination to be made by an appropriate action
initiated in the West Virginia supreme court of appeals regarding
the transfer of moneys by the investment management board to the
regional jail and correctional facility authority as an investment
from funds available for investment from the public employees
retirement system, and to otherwise determine the constitutionality
of the provisions of Enrolled House Bill 4702, as enacted by the
Legislature in the year one thousand nine hundred ninety-eight.
This judicial determination shall be brought as soon as
practicable, but not later than thirty days following the effective
date of the amendments to this section made by the Legislature in
the year one thousand nine hundred ninety-eight.
(g) The Legislature recognizes the fiduciary liability and
responsibility imposed on the board by this article and by article
six, chapter forty-four of this code. The board, its trustees and
employees, have no liability, either personally or corporately with
respect to the investment provided for in this section and the
loans made under section nineteen of this article, if the
investment and loans are made in accordance with the respective
provisions of this section and section nineteen of this article.
(h) The regional jail and correctional facility authority shall expend the funds invested under the provisions of this
section to proceed with the projects identified pursuant to
subsection (b) of this section.
(i) The regional jail and correctional facility authority may
return the total remaining capital invested upon thirty days
written notice to the board and at the time of such return shall
pay the investment earnings accrued to the return date.
CHAPTER 31. CORPORATIONS.
ARTICLE 15. WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY.
§31-15-6b. Special power of authority to issue bonds or notes to
repay and refinance capital investment of
investment management board in regional jail and
correctional facility authority; authorizing
issuance of bonds or notes to finance local and
regional jail facilities, including juvenile
detention centers; creation of regional jail and
correctional facility debt service fund.
(a) The Legislature finds and declares that the supreme court
of appeals has determined and ordered that the constitution of this
state imposes a duty on behalf of the state to make significant
improvements in the jail and correctional facility system,
including the duty to make capital improvements to facilities and
to pay for the cost of those improvements; that construction of
capital improvements requires that the cost of the facilities be financed over time; that capital improvements cannot be funded out
of current year appropriations of the Legislature; and that section
fifty-one, article six of the constitution prohibits the
Legislature amending the budget bill so as to create a deficit;
that the enacting of new taxes, or the diversion of revenues from
other essential departments and functions of government, in order
to support capital improvements in jails and correctional
facilities, including juvenile detention centers, is not in the
interests of the people of the state represented in the
Legislature, and is specifically rejected by the Legislature in its
exercise of its legitimate constitutional powers; that there have
been previously funded certain jail and correctional facilities
through funds available for investment through the West Virginia
investment management board, the proceeds of which have and are
being used by the regional jail and correctional facility authority
to finance the cost of capital improvements to jail and
correctional facilities, the repayment of such investment being
made from transfers to the regional jail and correctional facility
investment fund established under section twenty-one, article six,
chapter twelve of this code, from funds on deposit in the insurance
tax fund established under subsection (b), section fourteen,
article three, chapter thirty-three of this code, such transfers
undertaken in the manner set forth in subsection (c), section
fourteen, article three, chapter thirty-three of this code; that the supreme court of appeals has previously made a judicial
determination that the insurance tax fund is a special revenue fund
from which repayment of the investment may be made without
violating any constitutional limitation on contracting state debt;
that the rate of return being paid under subsection (b), section
twenty-one, article six, chapter twelve for the investment is
subject to annual adjustment and theretofore subject to the
volatility of the financial markets and it is anticipated that the
rate of return paid on such investment will be in excess of the
interest rate that would be payable with respect to bonds issued
under this article to repay and refinance such investment; that a
lower interest rate payable with respect to bonds issued under this
article issued to repay and refinance such investment would provide
sufficient money for repayment of the investment in full as well as
additional money for capital expenditures for jail and correctional
facilities, including juvenile detention centers, without
increasing the amounts currently transferable from the insurance
tax fund for repayment of the investment; and that the use of the
insurance tax fund, as a special revenue fund, for the repayment of
debt service on bonds or notes issued under this article to finance
capital expenditures for jail and correctional facilities,
including juvenile detention centers, is a means by which the state
may make significant improvements to the jail and correctional
facility system without enacting new taxes or diverting revenues from other essential departments and functions of government.
(b) In order to provide (1) for the repayment of all or a
portion of the investment, and (2) for the financing of
improvements to jail and correctional facilities, including
juvenile detention centers, bonds of the authority may be issued in
accordance with the provisions of this article.
(c) There is hereby created a special revenue fund in the
state treasury which is designated the "regional jail and
correctional facility debt service fund." Moneys deposited into
the fund shall be used to make payments of principal, redemption
premium, if any, and interest payments for bonds issued for the
purposes set forth in this section. Separate accounts may be
established within the special revenue fund for the purpose of
identification of payment of specific obligations. The fund shall
consist of amounts transferred from the insurance tax fund in the
manner set forth in subsection (c), section fourteen, article
three, chapter thirty-three of this code. The authority may
further provide in the resolution and in the trust agreement for
priorities on the revenues paid into the regional jail and
correctional facility debt service fund as may be necessary for the
protection of the prior rights of the holders of bonds issued at
different times under the provisions of this article.
CHAPTER 33. INSURANCE.
ARTICLE 3. LICENSING, FEES AND TAXATION OF INSURERS.
§33-3-14. Annual financial statement and premium tax return;
remittance by insurer of premium tax, less certain
deductions; special revenue fund created.
(a) Every insurer transacting insurance in West Virginia shall
file with the commissioner, on or before the first day of March,
each year, a financial statement made under oath of its president
or secretary and on a form prescribed by the commissioner. The
insurer shall also, on or before the first day of March of each
year subject to the provisions of section fourteen-c of this
article, under the oath of its president or secretary, make a
premium tax return for the previous calendar year, on a form
prescribed by the commissioner showing the gross amount of direct
premiums, whether designated as a premium or by some other name,
collected and received by it during the previous calendar year on
policies covering risks resident, located or to be performed in
this state and compute the amount of premium tax chargeable to it
in accordance with the provisions of this article, deducting the
amount of quarterly payments as required to be made pursuant to the
provisions of section fourteen-c of this article, if any, less any
adjustments to the gross amount of the direct premiums made during
such calendar year, if any, and transmit with the return to the
commissioner a remittance in full for the tax due. The tax is the
sum equal to two percent of the gross direct premiums, including
dividends, by whatever name called, on participating policies applied in reduction of premiums, less premiums returned to
policyholders because of cancellation of policies, and also
includes any additional tax due under section fourteen-a of this
article. All taxes received by the commissioner shall be paid into
the insurance tax fund created in subsection (b) of this section.
(b) There is created a special revenue fund in the state
treasury which is designated the "insurance tax fund." This fund is
not part of the general revenue fund of the state. It consists of
all amounts deposited in the fund pursuant to subsection (a) of
this section, sections fifteen and seventeen of this article, any
appropriations to the fund, all interest earned from investment of
the fund and any gifts, grants or contributions received by the
fund. The treasurer shall administer the fund.
(c) The treasurer shall dedicate and transfer from the
insurance tax fund to the regional jail and correctional facility
investment fund created under the provisions of section twenty-one,
article six, chapter twelve of this code, on or before the tenth
day of each month, an amount equal to one twelfth of the projected
annual investment earnings to be paid and the capital invested to
be returned, as certified to the treasurer by the investment
management board:
Provided, That the amount dedicated and
transferred may not exceed twenty million dollars in any fiscal
year. In the event there are insufficient funds available in any
month to transfer the amount required pursuant to this subsection to the regional jail and correctional facility investment fund, the
deficiency shall be added to the amount transferred in the next
succeeding month in which revenues are available to transfer the
deficiency. Each month a lien on the revenues generated from the
insurance premium tax, the annuity tax and the minimum tax,
provided in this section and sections fifteen and seventeen of this
article, up to a maximum amount equal to one twelfth of the
projected annual principal and return is granted to the investment
management board to secure the investment made with the regional
jail and correctional facility authority pursuant to section
twenty, article six, chapter twelve of this code. The treasurer
shall, no later than the last business day of each month, transfer
amounts the treasurer determines are not necessary for making
refunds under this article to meet the requirements of subsection
(d), section twenty-one, article six, chapter twelve of this code,
to the credit of the general revenue fund.
Commencing on the first
day of the month the investment created under the provisions of
section twenty-one, article six, chapter twelve of this code, is
returned to the investment management board, the treasurer shall
dedicate and transfer from the insurance tax fund to the regional
jail and correctional facility debt service fund created under the
provisions of section six-b, article fifteen, chapter thirty-one of
this code, on or before the tenth day of each month, an amount
equal to one tenth of the projected annual principal, interest and coverage requirements on any and all revenue bonds and refunding
bonds issued, or to be issued, after the first day of May, two
thousand and one, as certified to the treasurer by the economic
development authority: Provided, That the amount transferred may
not exceed sixteen million dollars in any fiscal year. In the
event there are insufficient funds available in any month to
transfer the amount required pursuant to this subsection to the
regional jail and correctional facility debt service fund, the
deficiency shall be added to the amount transferred in the next
succeeding month in which revenues are available to transfer the
deficiency. A lien on the revenues generated from the insurance
premium tax, the annuity tax and the minimum tax, provided in this
section and sections fifteen and seventeen of this article, not to
exceed twenty million dollars annually, is granted to the economic
development authority to secure the bonds issued by the economic
development authority on behalf of the regional jail and
correctional facility authority pursuant to section six-b, article
fifteen, chapter thirty-one of this code. The treasurer shall, no
later than the last business day of the month in which the last
annually required transfer is made to the regional jail and
correctional facility debt service fund, transfer amounts the
treasurer determines are not necessary for making transfers under
this article to meet the requirements of section six-b(c), article
fifteen, chapter thirty-one of this code, as appropriated by the Legislature.
(d) The amendment to this section enacted during the regular
session of the Legislature in the year one thousand nine hundred
ninety-eight is effective on the first day of July, one thousand
nine hundred ninety-eight.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added. Section 31-15-6b is new, therefore, strike-
throughs and underscoring have been omitted.
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