Introduced Version - Originating in Committee Senate Bill 674 History

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Senate Bill No. 674

(By Senators Browning, Klempa, McCabe, Stollings and Wells)


[Originating in the Committee on Economic Development; reported February 22, 2012.]





A BILL to amend and reenact §12-7-5, §12-7-6, §12-7-7 and §12-7-11 of the Code of West Virginia, 1931, as amended, all relating generally to the Jobs Investment Trust; permitting Jobs Investment Trust Board to deposit funds into financial institution of its choice; expanding powers of Jobs Investment Trust Board to allow supplemental investments and creation of board committees; defining “total investment portfolio”; expanding information required to be made public; modernizing provisions of Jobs Investment Trust; making technical clarifications; and deleting obsolete language.

Be it enacted by the Legislature of West Virginia:

    That §12-7-5, §12-7-6, §12-7-7 and §12-7-11 of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:


§12-7-5. Management and control of jobs investment trust vested in board; officers; liability; authority of executive director to act on behalf of board; relationship to higher education institutions.

    (a) It is the duty of the board to manage and control the jobs investment trust. With the advice and consent of the Senate, the Governor appoints an executive director of the jobs investment trust who is or has been a senior executive of a major financial institution, brokerage firm, investment firm or similar institution, with extensive experience in capital market development. The director serves at the Governor's will and pleasure and is responsible for managing and administering the daily functions of the jobs investment trust and for performing other functions necessary to the effective operation of the trust. The compensation of the director is annually fixed by the board.

    (b) The board annually elects a secretary to keep a record of the proceedings of the board, who need not be a member of the board.

    (c) The members and officers of the board are not liable personally, either jointly or severally, for any debt or obligation created by the board.

    (d) The acts of the board are solely the acts of its corporation and are not those of an agent of the state. A debt or obligation of the board is not a debt or obligation of the state.

    (e) Upon the affirmative vote of at least a majority of those members in attendance or participating by such other means as described in subsection (g), section four of this article in a meeting of the board, but in any event not fewer than six of the members serving on the board, the board may approve any action to be taken and authorize the executive director for and on behalf of the board to execute and deliver all instruments, agreements or other documents that are required or are reasonably necessary to effectuate the decisions or acts of the board.

    (f) The West Virginia Housing Development Fund shall provide office space and staff support services for the director and the board, shall act as fiscal agent for the board and, as such, shall provide accounting services for the board, invest all funds as directed by the board, service all investment activities of the board and shall make the disbursements of all funds as directed by the board, for which the West Virginia Housing Development Fund shall be reasonably compensated as determined by the board: Provided, That upon mutual agreement of the board and the West Virginia Housing Development Fund, the board may deposit funds except funds held pursuant to section eight-a of this article with a financial institution of the board’s choice, or the State Treasurer’s office, with respect to which funds the board may act as its own fiscal agent, and the funds may be invested and disbursed as directed by the board. The board may reasonably compensate any financial institution or the State Treasurer’s office holding funds in accordance with this subsection, in the amounts as may be approved by the board.

    (g) The board and the executive director shall involve students and faculty members of state institutions of higher education in the board's activities in order to enhance the opportunities at the institutions for learning and for participation in the board's investment activities and in the economic development of the state, whether in research, financial analysis, management participation or in such other ways as the board and the executive director may, in their discretion, find appropriate.

§12-7-6. Corporate powers.

    The board may:

    (1)(I) Make loans to eligible businesses with or without interest secured if and as required by the board; and (ii) acquire ownership interests in eligible businesses. These investments may be made in eligible businesses that stimulate economic growth and provide or retain jobs in this state and shall be made only upon the determination by the board that the investments are prudent and meet the criteria established by the board;

    (2) Accept appropriations, gifts, grants, bequests and devises and use or dispose of them to carry out its corporate purposes;

    (3) Make and execute contracts, releases, compromises, agreements and other instruments necessary or convenient for the exercise of its powers or to carry out its corporate purposes;

    (4) Collect reasonable fees and charges in connection with making and servicing loans, notes, bonds, obligations, commitments and other evidences of indebtedness, in connection with making equity investments and in connection with providing technical, consultative and project assistance services;

    (5) Sue and be sued;

    (6) Make, amend and repeal bylaws and rules consistent with the provisions of this article;

    (7) Hire its own employees, who shall be employees of the state of West Virginia for purposes of articles ten and sixteen, chapter five of this code, and appoint officers and consultants and fix their compensation and prescribe their duties;

    (8) Acquire, hold and dispose of real and personal property for its corporate purposes;

    (9) Enter into agreements or other transactions with any federal or state agency, college or university, any person and any domestic or foreign partnership, corporation, association or organization;

    (10) Acquire real and personal property, or an interest in real or personal property, in its own name, by purchase or foreclosure when acquisition is necessary or appropriate to protect any loan in which the board has an interest; to sell, transfer and convey any real or personal property to a buyer; and, in the event a sale, transfer or conveyance cannot be effected with reasonable promptness or at a reasonable price, to lease real or personal property to a tenant;

    (11) Purchase, sell, own, hold, negotiate, transfer or assign: (I) Any mortgage, instrument, note, credit, debenture, guarantee, bond or other negotiable instrument or obligation securing a loan, or any part of a loan; (ii) any security or other instrument evidencing ownership or indebtedness; or (iii) equity or other ownership interest. An offering of one of these instruments shall include the representation and qualification that the board is a public body corporate managing a venture capital fund that includes high-risk investments and that in any transfer, sale or assignment of any interest, the transferee, purchaser or assignee accepts any risk without recourse to the jobs investment trust or to the state;

    (12) Procure insurance against losses to its property in amounts, and from insurers, as is prudent;

    (13) Consent, when prudent, to the modification of the rate of interest, time of maturity, time of payment of installments of principal or interest or any other terms of the investment, loan, contract or agreement in which the board is a party;

    (14) Establish training and educational programs to further the purposes of this article;

    (15) File its own travel rules;

    (16) Borrow money to carry out its corporate purpose in principal amounts and upon terms as are necessary to provide sufficient funds for achieving its corporate purpose;

    (17) Take options in or warrants for, subscribe to, acquire, purchase, own, hold, transfer, sell, vote, employ, mortgage, pledge, assign, pool or syndicate: (I) Any loans, notes, mortgages or securities; (ii) debt instruments, ownership certificates or other instruments evidencing loans or equity; or (iii) securities or other ownership interests of or in domestic or foreign corporations, associations, partnerships, limited partnerships, limited liability partnerships, limited liability companies, joint ventures or other private enterprise to foster economic growth, jobs preservation and creation in the state of West Virginia and all other acts that carry out the board's purpose;

    (18) Contract with either Marshall university or West Virginia university, or both, for the purpose of retaining the services of, and paying the reasonable cost of, services performed by the institution for the board in order to effectuate the purposes of this article;

    (19) Enter into collaborative arrangements or contracts with private venture capital companies when considered advisable by the board;

    (20) Provide equity financing for any eligible business that will stimulate economic growth and provide or retain jobs in this state and hold, transfer, sell, assign, pool or syndicate, or participate in the syndication of, any loans, notes, mortgages, securities, debt instruments or other instruments evidencing loans or equity interest in furtherance of the board's corporate purposes;

    (21) Form partnerships, create subsidiaries or take all other actions necessary to qualify as a small business investment company under the United States Small Business Investment Act, PL 85-699, as amended;

    (22) Provide for staff payroll and make purchases in the same manner as the housing development fund;

    (23) Indemnify its members, directors, officers, employees and agents relative to actions and proceedings to which they have been made parties and make advances for expenses relative thereto and purchase and maintain liability insurance on behalf of those persons all to the same extent as authorized for West Virginia business corporations under present or future laws of the state applicable to business corporations generally; and

    (24) Contract for the provision of legal services by private counsel and, notwithstanding the provisions of article three, chapter five of this code, counsel may, but is not limited to, represent the board in court, negotiate contracts and other agreements on behalf of the board, render advice to the board on any matter relating thereto, prepare contracts and other agreements and provide any other legal services requested by the board;

    (25) Authorize the executive director, without prior presentation at a board meeting but with written consent from the board’s chairperson or vice-chairperson, to approve supplemental investments (loans or ownership interests) in the board’s portfolio entities in amounts as provided in a board resolution but not greater than $25,000 for any one investment, not greater than $50,000 in the aggregate to any one portfolio entity, and not greater than $100,000 in the aggregate for all portfolio entities in any one fiscal year; and to authorize the executive director, when a supplemental investment is made, to negotiate the terms of the investments and to execute and deliver for and on behalf of the board all instruments, agreements or other documents that are required or are reasonably necessary to effectuate the supplemental investments; and

    (26) By resolution or bylaw, create one or more committees of the board. The creation of a committee and the appointment of its members shall be approved by no less than seven of the board members participating in a meeting of the board notwithstanding any provision of this article to the contrary. Committee appointees shall serve at the will and pleasure of the board. To the extent specified by the board, each committee may exercise the authority and perform the duties of the board existing by reason of the provisions of this article: Provided, That the board may not delegate its authority pursuant to section ten of this article to approve or disapprove an initial investment package presented to the board for consideration. Each committee may include persons not members of the board, who shall be voting members of the committee. Each committee shall include at least two board members and the board’s executive director. Any action taken by a committee shall be approved by the affirmative vote of a majority of the committee members provided the affirmative votes include the affirmative votes of all members of the board serving on the committee and the board’s executive director.

§12-7-7. Limitation on investments.

    Subject to the provisions of section nine of this article, the board may invest in any eligible business: Provided, That at the time of the placement of the investment not more than twenty percent of the board's total investment portfolio is invested in one eligible business within any two-year period, total investment portfolio to include investments in eligible businesses and board funds available for investments in eligible businesses.: Provided, however, That the board may invest in an eligible business up to an additional twenty percent of the board's total investment portfolio, or up to a total of two million dollars, whichever is less. The additional investment must be in the form of a short- term debt investment to be repaid within twelve months of the investment: Provided further, That the board may extend said twelve-month repayment term until the thirtieth day of September, one thousand nine hundred ninety-four, and upon terms consistent with the actions of other investors involved in similar investments with the eligible business if the eligible business demonstrates to the board: (I) That said business is progressing with a plan for capital formation and business development; and (ii) that said extension of the twelve-month period, and any other modification thereto, will not substantially prejudice the position of the board in relation to the other investors in, and creditors of, the eligible business. The board shall report any extension of any repayment term made prior to the thirty-first day of March, one thousand nine hundred ninety-four, and approved by the board pursuant to the provisions of this section, to the governor and to the Legislature's joint committee on government and finance within twenty days of such approval: And provided further, That the board shall report to the governor and the joint committee on government and finance of its intention to extend any repayment term at least twenty days prior to the board approving any extension made on or after the first day of April, one thousand nine hundred ninety-four.

§12-7-11. Documentary materials concerning trade secrets; commercial, financial or personal information; confidentiality.

    Any documentary material or data made or received by the board for the purpose of furnishing assistance, to the extent that the material or data consists of trade secrets, commercial, financial or personal information regarding the financial position or activities of such business or person, shall not be considered public records and shall be exempt from disclosure pursuant to the provisions of chapter twenty-nine-b of this code. Any discussion or consideration of the trade secrets, commercial, financial or personal information may be held by the board in executive session closed to the public, notwithstanding the provisions of article nine-a, chapter six of this code: Provided, That the board shall make public the following information regarding executed investments:

    (1) The names and addresses of the principals of the business and its board of directors;

    (2) the location or locations of the projects;

    (3) the amount of the investment or financial assistance provided by the board;

    (4) the purpose of the investment or financial assistance;

    (5) the maturity, interest rate and other pertinent terms of the investment;

    (6) the fixed assets which serve as security for the investment; and

    (7) the names and addresses of all persons holding twenty-five percent or more of the equity of the entity receiving investment assistance: Provided, however, That the board shall keep available in its offices for inspection by any citizen of this state the annual report prepared pursuant to the requirements of section twelve of this article and the annual audit report prepared pursuant to the requirements of sections nine and fourteen of this article;

    (8) Any information as is required to be included or the board elects to include in a report required to be filed pursuant to the provisions of section twelve of this article, or required by other applicable law or regulation, and any information included in an audit report resulting from an audit required by the provisions of section fourteen of this article, or required by other applicable law or regulation; and

    (9) Any information disclosed or reported by the board to the United States Department of the Treasury and its officers, agents, representative, successors and assigns, in connection with the State Small Business Credit Initiative program established by Congress under the Small Business Jobs Act of 2010, Public Law 111-240 Stat. 2568, 2582.

    NOTE: The purpose of this bill is to modernize the Jobs Investment Trust.

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


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