Senate Bill No. 347
(By Senators Unger, Fanning, Jenkins and Plymale)
____________
[Introduced January 26, 2010; referred to the Committee
on Government Organization; and then to the Committee on Finance
.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §31-15D-1, §31-15D-
2, §31-15D-3, §31-15D-4, §31-15D-5, §31-15D-6, §31-15D-7,
§31-15D-8, §31-15D-9 and §31-15D-10, all relating to
establishment of the West Virginia Transportation Finance
Commission; creating a governing board of the commission;
setting forth appointment, terms, qualifications,
compensation and expenses of board members; setting forth
the powers and duties of the commission; creating the West
Virginia Transportation Finance Commission Fund; setting
forth requirements for deposits, contributions,
appropriations, capitalization, disbursements, subaccounts,
loans and other financial assistance from the fund; setting
forth requirements for applications for loans and other
financial assistance, approval of qualified projects,
finance agreements, payments and repayments of loans and
withholding of defaulted payments from funds allotted or
payable to a defaulting government unit; setting forth the
rights of qualified borrowers from the fund; requiring
annual reports to the Governor, the Legislature and
appropriate federal agencies; requiring the commission to
perform annual audits; requiring the Department of
Transportation to assist the board; making legislative
findings; and defining terms.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §31-15D-1, §31-15D-2,
§31-15D-3, §31-15D-4, §31-15D-5, §31-15D-6, §31-15D-7, §31-15D-8,
§31-15D-9 and §31-15D-10, all to read as follows:
ARTICLE 15D. WEST VIRGINIA TRANSPORTATION FINANCE COMMISSION.
§31-15D-1. Legislative findings.
The West Virginia Legislature finds that:
(1) Adequate transportation facilities are an important
element in the ability of the state to provide for the health and
welfare of its citizens and the continuing economic growth and
development that will provide jobs for the citizens of West
Virginia;
(2) Traditional transportation financing methods in West
Virginia cannot generate the resources necessary to fund the cost
of transportation facilities which are required for the continued economic viability and future economic expansion;
(3) The State of West Virginia has the ability to provide
alternative methods of financing highway and transportation
projects;
(4) Loans and other financial assistance to government units
can play an important part in meeting transportation needs and
this assistance is in the public interest and for the public
benefit; and
(5) This article provides an instrumentality to assist
government units in constructing and improving highway and other
transportation facilities by providing loans and other financial
assistance.
§31-15D-2. Definitions.
For the purposes of this article the following terms have
the meanings ascribed to them unless a different meaning clearly
appears from the context:
(1) "Commission" means the West Virginia Transportation
Finance Commission created in section three of this article;
(2) "Board" means the governing board of the commission
established in section three of this article.
(3) "Bond" means a revenue bond, note, or other evidence of
indebtedness.
(4) "Department of Transportation" means the Department of
Transportation established in section one, article two, chapter
five-f of this code or any successor to all, or any substantial
part, of its powers and duties.
(5) "Division of Highways" means the Division of Highways
established in section one, article two-a, chapter seventeen of
this code or any successor to all, or any substantial part, of
its powers and duties.
(6) "Eligible costs" means, as applied to a qualified
project to be financed, in whole or in part, from funds provided
from federal accounts, the costs that are permitted under
applicable federal laws, requirements, procedures and guidelines
in regard to establishing, operating and providing assistance
from the commission. As applied to a qualified project to be
financed from other funds otherwise provided by this article,
eligible costs include the costs of preliminary engineering,
traffic and revenue studies, environmental studies, rights-of-
way, legal and financial services associated with the development
of a qualified project, construction, construction management,
facilities and other costs necessary for the start up of the
qualified project. As applied to any qualified project to be
financed from the state Road Fund, eligible projects costs are
limited to capital expenditures for highway facilities.
(7) "Eligible project" means any public transportation
project to acquire, plan, engineer, design, construct,
reconstruct, improve, repair, restore, maintain or rehabilitate
any highway, road, bridge, tunnel, public transit facility,
aviation facility, rail facility, port or public port as defined in section five, article sixteen-b, chapter seventeen of this
code; a transportation project eligible for financing or aid
under any federal or state program; or any transportation project
used for the transportation of people or goods within this state
and all structures, equipment, facilities, improvements,
appurtenances or activities necessary or incident thereto.
(8) "Federal accounts" means federal highway funds.
(9) "Financing agreement" means an agreement entered into
between the commission and a qualified borrower pertaining to or
evidencing a loan or other financial assistance. This agreement
may contain, in addition to financial terms, provisions relating
to the regulation and supervision of a qualified project or other
provisions as the board may determine. The term includes,
without limitation, a loan agreement, trust agreement, trust
indenture, security agreement, reimbursement agreement, guarantee
agreement, bond or note, ordinance or resolution, or similar
instrument.
(10) "Federal agency" means the United States of America and
any department, corporation, agency or instrumentality created,
designated or established by the United States of America.
(11) "Fund" means the West Virginia Transportation Finance
Commission Fund established in section five of this article.
(12) "Government unit" means a municipal corporation,
county, port, port authority, transit authority and any other
state or local authority, board or other political subdivision of
the state which may construct, own or operate a qualified
project.
(13) "Loan" means an obligation subject to repayment which
is provided by the commission to a qualified borrower for all or
a part of the cost of a qualified project. A loan may be
disbursed in anticipation of reimbursement for or direct payment
of eligible costs of a qualified project.
(14) "Loan obligation" means a bond, note or other evidence
of obligation issued by a qualified borrower.
(15) "Other financial assistance" means, but is not limited
to, credit enhancement, capital or debt reserves for bonds or
debt instrument financing, interest rate subsidies, provision of
letters of credit and credit instruments, provisions of bond or
other debt financing instrument security and other lawful forms
of financing and methods of leveraging funds that are approved by
the board and as allowed by law.
(16) "Qualified borrower" means any government unit which is
authorized to construct, operate or own a qualified project.
(17) "Qualified project" means an eligible project that is
compatible with the state transportation plan and with the local
comprehensive plan or plans, has been approved by the Department
of Transportation and has been selected by the commission to
receive a loan or other financial assistance from the commission
to defray eligible costs.
§31-15D-3. West Virginia Transportation Finance Commission established; composition and appointment of
commission board; compensation and expenses of
board members.
(a) The West Virginia Transportation Finance Commission is
hereby created as a body corporate and politic, constituting a
public corporation and government instrumentality of the state.
(b) The governing body of the commission shall be a board
consisting of seven voting members as follows:
(1) The Secretary of the Department of Transportation or his
or her designee; and
(2) Six members appointed by the Governor with the advice
and consent of the Senate who are citizens of this state and meet
the requirements and qualifications prescribed in subsections (c)
and (d) of this section. No more than four members appointed by
the Governor may be of the same political party. Appointments
shall be made in a manner that each congressional district is
represented and so that no less than one member and not more than
three members of the board reside in any one congressional
district.
(c) (1) The six members appointed by the Governor pursuant
to subdivision (2), subsection (b) of this section shall be
appointed by the Governor for terms that begin July 1, 2010 and
expire as follows:
(A) Two members shall be appointed for a term ending June
30, 2012;
(B) Two members shall be appointed for a term ending June
30, 2013; and
(C) Two members shall be appointed for a term ending June
30, 2014.
(2) Except for appointments to fill vacancies, each
subsequent appointment shall be for a term ending June 30 of the
fourth year following the year the preceding term expired. In
the event a vacancy occurs, it shall be filled by appointment for
the unexpired term. A member whose term has expired shall
continue in office until a successor has been duly appointed and
qualified.
(3) No member appointed by the Governor pursuant to
subdivision (2), subsection (b) of this section may be a
candidate for or hold elected office. These members may be
reappointed for no more than two full terms.
(d) Each of the members of the board appointed by the
Governor pursuant to subdivision (2), subsection (b) of this
section shall be appointed based upon his or her demonstrated
knowledge and experience to effectively accomplish the purposes
of this article and shall meet the following qualifications:
(1) At least two shall be persons who have demonstrated
knowledge and experience in banking and financial services in the
private sector;
(2) At least one shall be a person who has demonstrated
knowledge and experience in public finance of government units in the state; and
(3) At least two shall be persons with demonstrated
knowledge and experience in the construction and administration
of eligible projects.
(e) The Secretary of the Department of Transportation shall
serve as chairperson. The board shall hold meetings at the
request of the chairperson or at the request of at least three of
the members of the board, but no less frequently than once every
month. The chairperson shall determine the date and time of each
meeting.
(f) The board shall appoint a vice chairperson and a
secretary from among the members. Four members of the board
shall constitute a quorum and the affirmative vote of at least a
majority of those members present is necessary for any action
taken by vote of the board, however, approval or rejection of an
application for a loan or other financial assistance shall be
made by majority vote of the full membership of the board.
(g) Members of the board are not entitled to compensation
for services performed as members but are entitled to
reimbursement for all reasonable and necessary expenses actually
incurred in the performance of their duties.
§31-15D-4. Powers and duties of the West Virginia
Transportation Finance Commission.
(a) In addition to the powers contained elsewhere in this
article, the commission, by action of the board, has all power
necessary, useful or appropriate to fund, operate and administer
the commission and to perform its other functions including, but
not limited to, the power to:
(1) Have perpetual succession;
(2) Adopt, promulgate, amend and repeal bylaws not
inconsistent with this article for the administration of its
affairs and the implementation of its functions;
(3) Sue and be sued in its own name;
(4) Adopt a seal and alter it at its pleasure, although the
failure to affix the seal does not affect the validity of an
instrument executed on behalf of the commission;
(5) Make loans to qualified borrowers to finance the
eligible costs of qualified projects and to acquire, hold and
sell loan obligations at prices and in a manner as the board
determines advisable;
(6) Provide qualified borrowers with other financial
assistance necessary to defray the eligible costs of a qualified
project;
(7) Enter into contracts, arrangements and agreements with
qualified borrowers and other persons and to execute and deliver
all financing agreements and other instruments necessary or
convenient to the exercise of the powers granted in this article;
(8) Enter into agreements with a department, agency or
instrumentality of the United States, this state or another state
for the purpose of planning and providing for the financing of qualified projects;
(9) Establish policies and procedures for the making and
administering of loans and other financial assistance;
(10) Establish fiscal controls and accounting procedures to
ensure proper accounting and reporting by the commission and
government units and to ensure proper oversight of all financing
agreements, loans, loan obligations and other financial
assistance established or issued for financial assistance of a
qualified project throughout the course of the financial
assistance;
(11) Acquire by purchase, lease, donation or other lawful
means and to sell, convey, pledge, lease, exchange, transfer and
dispose of all or any part of its properties or assets of every
kind and character or any interest in it to further the public
purpose of the commission;
(12) Expend funds to obtain accounting, management, legal,
financial consulting and other professional services necessary to
the operations of the commission;
(13) Expend funds credited to the commission as the board
determines necessary for the costs of administering the
operations of the commission that are approved by the Department
of Transportation;
(14) Establish advisory committees as the board determines
appropriate, which may include individuals from the private
sector with banking and financial expertise or transportation
infrastructure expertise;
(15) Procure insurance against losses in connection with its
property, assets or activities, including insurance against
liability for its acts or the acts of its employees or agents or
to establish cash reserves to enable it to act as a self-insurer
against any and all such losses;
(16) Collect fees and charges in connection with its loans
and other financial assistance;
(17) Apply for, receive and accept from any source, aid,
grants and contributions of money, property, labor or other
things of value to be used to carry out the purposes of this
article subject to the conditions upon which the aid, grants or
contributions are made;
(18) Enter into contracts or agreements for the servicing
and processing of financial agreements; and
(19) Do all other things necessary or convenient to exercise
the powers granted or reasonably implied by this article.
(b) The commission is not, nor is it authorized or empowered
to be or to constitute, a bank or trust company within the
jurisdiction or under the control of the state or any agency
thereof or the comptroller of the currency or the Treasury
Department of the United States or a bank, banker or dealer in
securities within the meaning of, or subject to the provisions
of, any securities, securities exchange or securities dealers'
law of the United States or of the State of West Virginia.
§31-15D-5. West Virginia Transportation Finance Commission
Fund; deposits in fund; disbursements to provide
loans and other assistance; subaccounts.
(a) There is hereby established in the state Treasury a
special revenue account to be known as the West Virginia
Transportation Finance Commission Fund that shall be governed,
administered and accounted for by the board for the purposes set
forth in section four of this article. All proceeds and revenues
of the commission shall be deposited or credited to the fund.
(b) Funds from the following resources may be deposited to
the fund and used to capitalize the commission:
(1) Funds appropriated to the fund by the Legislature;
(2) Notwithstanding any provisions of article three, chapter
seventeen of this code to the contrary, annual contributions by
the Division of Highways or the Department of Transportation of
funds for the construction and maintenance of state highways, not
to exceed $10 million. These funds may be used to match federal
capitalization grants to the commission and provide capital for
the state accounts of the commission;
(3) Federal funds that may be made available to the state
for the commission;
(4) Contributions and donations from public authorities,
government units and private entities;
(5) All moneys paid or credited to the commission, by
contract or otherwise; payments of principal and interest on
loans or other financial assistance made from the commission and
interest earnings which may accrue from the investment or
reinvestment of the commission moneys; and
(6) Other lawful sources as determined appropriate by the
board.
(c) Earnings on balances in the federal accounts must be
credited and invested according to federal law. Earnings on
state accounts must be credited to the account that generates the
earnings. The commission may establish accounts and subaccounts
within the fund as considered desirable to effectuate the
purposes of this article or to meet the requirements of any state
or federal programs.
(d) For the necessary and convenient administration of the
account, the board shall direct the State Treasurer to establish
accounts and subaccounts within the fund account necessary to
meet any applicable federal law requirements or as the commission
determines necessary or desirable in order to implement the
provisions of this article.
(e) The commission shall comply will all federal and state
laws and regulations prohibiting the commingling of funds
deposited in the account. Amounts in the fund that are
prohibited from being commingled with other amounts in the fund
shall be segregated and administered separate and apart from
other amounts in the fund and may not be transferred to any other
account.
§31-15D-6. Requirements for loans and other financial
assistance.
(a) Subject to the provisions of this article, the
commission may provide loans and other financial assistance to a
government unit to pay for all or a portion of the eligible cost
of a qualified project. The term of the loan or other financial
assistance may not exceed thirty years. The commission shall
require the government unit to enter into an agreement to
evidence all of the terms and conditions of the loan obligation.
The commission may require that the government unit obtain or
provide matching funds for the qualified project from sources
other than the loan from the commission. The board shall
determine the form and content of loan applications, financing
agreements and loan obligations, including the term and rate or
rates of interest on a financing agreement. The terms and
conditions of a loan or other financial assistance from a federal
account shall comply with applicable federal requirements.
(b) To implement and carry out the intent of this article,
the board shall propose rules for legislative approval in
accordance with article three, chapter twenty-nine-
a
of this code
to develop comprehensive uniform guidelines for use by the board
in evaluating any request by a government unit for funding
assistance from the commission. The guidelines shall include,
but are not limited to, the following criteria:
(1) The feasibility of the project and the amount and degree
of risk assumed by the commission;
(2) The local support of the project, expressed by
resolutions of the governing bodies in the areas in which the
project will be located, and the financial or in-kind
contributions to the project;
(3) Whether the project is consistent with the adopted
transportation plan of the appropriate planning organization,
including any metropolitan planning organization whose
jurisdiction includes the location of the project, and the
transportation plan of the division;
(4) Whether the existing transportation infrastructure of
the area served by the project is adversely affected by the
project;
(5) The economic development benefits of the project;
(6) The degree to which the project will correct
deficiencies or will supplement the existing transportation
infrastructure of the area served by the project;
(7) The cost effectiveness of the project as compared with
alternatives which achieve substantially the same public
transportation or economic development benefits;
(8) The availability of alternative sources of funding which
could finance all or a part of the project and the need for the
assistance of the commission to finance the project or for the
applicant to attract other sources of funding;
(9) The applicant's ability to operate and maintain the transportation facilities if the project is approved;
(10) The degree to which the project achieves other state or
regional planning goals;
(11) The estimated date upon which the project could
commence if the loan or other financial assistance were available
and the estimated completion date of the project; and
(12) Whether the governing bodies of the county or the
incorporated municipality in which the project is to be located
provides to the commission a resolution which makes a finding
that the project is essential to or necessary for the
transportation needs of the public.
(c) The board may promulgate emergency rules pursuant to the
provisions of section fifteen, article three, chapter twenty-
nine-a of this code to develop and establish guidelines pursuant
to this subsection.
(d) The board shall create a preliminary application form
which shall be used by all government units requesting funding
assistance from the commission for a qualified project. The
preliminary application form shall contain all information
required by all state agencies that will be required to issue
permits and/or certificates regarding the project. The
preliminary application shall require the applicant to set forth
the type and proposed location of the project; the estimated
total cost of the project; the amount of funding assistance
required and the specific uses of the funding; the proposed
method of repayment of any loans or other financial assistance
for the project provided by the commission; other sources of
funding available or potentially available for the project;
information demonstrating the need for the project and that the
proposed funding of the project is the most economically feasible
and viable alternative to completing the project; and such other
information as the board considers necessary to enable it to
evaluate the project financing, in terms of the kind, amount and
source of funding, and to otherwise carry out the intent of this
article.
§31-15D-7. Finance agreements; repayment of loans.
(a) Qualified borrowers are authorized to obtain loans or
other financial assistance from the commission through financing
agreements. Qualified borrowers entering into financing
agreements and issuing loan obligations to the commission may
perform any acts, take any action, adopt any proceedings and make
and carry out any contracts or agreements with the commission as
may be agreed to by the commission and the qualified borrower for
the purposes of carrying out the provisions contemplated by this
article.
(b) Each loan or other financial assistance made or provided
by the commission shall be evidenced by a written finance
agreement between the commission and the qualified borrower to
which the loan or other financial assistance shall be made or
provided, setting forth the terms of the loan or other financial assistance, which agreement shall include, without limitation and
to the extent applicable, the following provisions:
(1) The estimated cost of the qualified project, the amount
of the loan or the nature of the financial assistance and, in the
case of a loan, the terms of repayment and the security therefor,
if any;
(2) The specific purposes for which the loan proceeds shall
be expended or the benefits to accrue from the financial
assistance and the conditions and procedure for disbursing loan
proceeds;
(3) The duties and obligations imposed upon the government
unit regarding the acquisition, construction, improvement or
operation of the qualified project;
(4) The agreement of the governmental unit to the
withholding of payments pursuant to the finance agreement that
are owed by the governmental unit to the commission which are in
default in accordance with the provisions of section eight of
this article; and
(5) The agreement of the governmental unit to comply with
all applicable federal and state laws and all rules and
regulations issued or imposed by the commission or other state,
federal or local bodies regarding the acquisition, construction,
improvement or operation of the qualified project and granting
the commission the right to appoint a receiver for the qualified
project if the governmental unit should default on any terms of
the agreement.
(c) In addition to the authorizations contained in this
article, all other statutes or provisions permitting qualified
borrowers to borrow money and issue obligations may be utilized
by a qualified borrower in obtaining a loan or other financial
assistance from the commission to the extent determined necessary
or useful by the qualified borrower in connection with any
financing agreement and the issuance, securing or sale of loan
obligations to the commission.
(d) A qualified borrower may receive, apply, pledge, assign
and grant a security interest in project revenues or any other
revenues of the governmental unit which may otherwise be lawfully
pledged or assigned as security, to secure its obligations as
provided in this article and may fix, revise, charge and collect
fees, rates, rent, assessments and other charges of general or
special application for the operation or services of a qualified
project, the system of which it is a part, and any other revenue
producing facilities from which the qualified borrower derives
project revenues to meet its obligations under a financing
agreement or to provide for the construction and improving of a
qualified project.
(e) Any resolution of the commission approving loan or other
financial assistance shall include a finding and determination
that the requirements of this section have been met.
§31-15D-8. Interception and withholding of defaulted payments from funds allotted or payable to a defaulting
government unit.
(a) Any payment owed by a government unit to the commission
pursuant to a financing agreement that is in default may be
intercepted and withheld from any funds administered or in the
custody of the Treasurer which are owned by, allotted or payable
to the government unit in default. In the event of default by a
government unit upon any payment due, the commission may notify
the Treasurer of the default. Upon receipt of a notification of
default, the Treasurer shall withhold the amount of the payment
in default and payable to the commission from any funds
administered or in the custody of the Treasurer which are owned
by, allotted or payable to the government unit in default. The
amount withheld shall be remitted by the Treasurer to the
commission and applied toward the payment in default.
(b) Withholdings or interceptions pursuant to this section
may not be made from funds owned by, allotted or payable to a
government unit in default which are restricted to use for a
particular purpose by law or which violate the terms of any
agreement governing the funds or which would be in violation of
the laws of this state or of the United States.
(c) The commission and the Treasurer may enter into an
agreement to effect the provisions of this section.
§31-15D-9. Annual reports; audits.
On October 1 of each year, the commission shall submit an
annual report of its activities for the preceding fiscal year to
the Governor and the Legislature. Each such report shall set
forth a complete operating and financial statement of the
commission's operation during the preceding fiscal year. The
commission shall also submit an annual report to the appropriate
federal agencies in accordance with the requirements of the
federal agencies. The commission shall cause an audit of its
books and records to be made by an independent certified public
accountant for each fiscal year.
§31-15D-10. Department of Transportation assistance to the
commission.
The Department of Transportation shall provide staff and
assist the commission in the administration of the program and
the performance of the commission under this article. In
providing this assistance, the department may:
(1) Assist in the formulation, establishment and structuring
of programs undertaken by the commission pursuant to this
article;
(2) Provide government units with information as to the
commission and the procedures for obtaining the assistance
intended by this article;
(3) Assist government units in making applications to state
and federal agencies, including the commission, as may be
necessary or helpful in order to avail themselves of this
program;
(4) Assist the commission in analyzing and evaluating
requests for assistance pursuant to this article;
(5) Assist in the structuring and negotiating of financing
agreements;
(6) Administer the fund, including any accounts in it;
(7) Administer the commission's accounts, loans and other
financial assistance, including monitoring compliance by
government units or private entities with any rules, regulations
or other requirements of the commission with respect to the
programs and compliance with covenants and agreements made by the
government units or private entities with respect to a financing
agreement; and
(8) Provide other assistance and perform other duties as may
be requested or directed by the commission.
NOTE: The purpose of this bill is to create the West
Virginia Transportation Finance Commission and its governing
board. The bill sets forth the appointment, terms,
qualifications, compensation and expenses of its members and the
powers and duties of the commission. The bill creates the West
Virginia Transportation Finance Commission Fund and sets forth
the requirements for deposits, contributions, appropriations,
capitalization, disbursements, subaccounts, loans and other
financial assistance from the fund. The bill also sets forth
requirements for applications for loans and other financial
assistance, approval of qualified projects, finance agreements,
payments
and repayments of loans and withholding of defaulted
payments from funds allotted or payable to a defaulting
government unit. The bill identifies the rights of qualified
borrowers from the fund. The bill further requires annual
reports to Governor, the Legislature and appropriate federal
agencies and requires annual audits. The bill requires the
Department of Transportation to assist the commission. The bill
also makes legislative findings and defining terms.
This article is new; therefore, strike-throughs and
underscoring have been omitted.