H. B. 2493
(By Mr. Speaker, Mr. Chambers, and Delegate Ashley)
[By Request of the Executive]
[Introduced February 15, 1995; referred to the
Committee on Finance.]
A BILL to amend and reenact section twenty-one, article two-c,
chapter thirteen of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to industrial
development and commercial development bonds; ceiling on
issuance of private activity bonds, including private
activity bonds for projects located in empowerment zones and
enterprise communities; procedure for allocation and
disbursements; reservation of funds; limitations; unused
allocation; expirations and carryovers.
Be it enacted by the Legislature of West Virginia;
That section twenty-one, article two-c, chapter thirteen of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 2C. INDUSTRIAL DEVELOPMENT AND COMMERCIAL DEVELOPMENT
BOND ACT.
§13-2C-21. Ceiling on issuance of private activity bonds;
establishing
procedure
for
allocati
on and
disburse
ments;
reservat
ion of
funds;
limitati
ons;
unused
allocati
on;
expirati
ons and
carryove
rs.
(a) Private activity bonds (as defined in section 141(a) of
the United States Internal Revenue Code of 1986, other than those
described in section 146(g) of the Internal Revenue Code) issued
pursuant to this article, including bonds issued by the West
Virginia public energy authority pursuant to subsection (11),
section five, article one, chapter five-d of this code, or under
article eighteen, chapter thirty-one of this code, during any calendar year shall not exceed the ceiling established by section
146(d) of the United States Internal Revenue Code. It is hereby
determined and declared as a matter of legislative finding:
(i)
That, in an attempt to promote economic revitalization of
distressed urban and rural areas, certain special tax incentives
will be provided for empowerment zones and enterprise communities
to be designated from qualifying areas nominated by state and
local governments, all as set forth by section 1391 et seq. of
the United States Internal Revenue Code; (ii) that qualified
businesses operating in enterprise communities and empowerment
zones will be eligible to finance property and provide other
forms of financial assistance as provided for in section 1394 of
the United States Internal Revenue Code; and (iii) that it is in
the best interest of this state and the citizens thereof to
facilitate the acquisition, construction and equipping of
projects within designated empowerment zones and enterprise
communities by providing an orderly mechanism for the commitment
of the annual ceiling for private activity bonds for such
projects. It is hereby further determined and declared as a
matter of legislative finding;
(i) (iv) that the production of
bituminous coal in this state has resulted in coal waste, which
coal waste is stored in areas generally referred to as gob piles;
(ii) (v) that such gob piles are unsightly and have the potential
to pollute the environment in this state;
(iii) (vi) that the
utilization of the materials in such gob piles to produce
alternative forms of energy needs to be encouraged;
(iv) (vii) that section 142(a)(6) of the United States Internal Revenue Code
of 1986, permits the financing of solid waste disposal facilities
through the issuance of such private activity bonds; and
(v)
(viii) that it is in the best interest of this state and the
citizens thereof to facilitate the construction of facilities for
the generation of power through the utilization of coal waste by
providing an orderly mechanism for the commitment of the annual
ceiling for private activity bonds for such projects.
(b) On or before the first day of each calendar year, the
executive director of the development office shall determine the
state ceiling for such year based on the criteria of the United
States Internal Revenue Code, which annual ceiling shall be
allocated among the several issuers of bonds under this article
or under article eighteen, chapter thirty-one of this code, as
follows:
(1) Fifty million dollars shall be allocated to the West
Virginia housing development fund for the purpose of issuing
qualified mortgage bonds, qualified mortgage certificates or
bonds for qualified residential rental projects.
(2) The amount remaining after the allocation to the West
Virginia Housing Development Fund described in subdivision (1),
subsection (b) of this section shall be retained by the West
Virginia Development Office and shall be referred to in this
section as the "state allocation."
(3)
For calendar year one thousand nine hundred ninety-five,
twenty and one-half percent of the state allocation and for all subsequent calendar years, thirty-five Thirty percent of the
state allocation shall be set aside by the development office to
be made available for lessees, purchasers or owners of proposed
projects, hereafter in this section referred to as "nonexempt
projects," which do not qualify as exempt facilities as defined
by United States Internal Revenue Code. All reservations of
private activity bonds for nonexempt projects shall be approved
and awarded by the committee based upon an evaluation of general
economic benefit and any rule or regulation that the council for
community and economic development may promulgate pursuant to
section three, article two, chapter five-b of this code:
Provided, That on the first day of September That all requests
for reservations of funds from projects described in this
subsection shall be submitted to the development office on or
before the first day of November of each calendar year: Provided
however, That on the fifteenth day of November of each calendar
year, the uncommitted portion of this part of the state
allocation, shall revert to and become part of the state
allocation portion described in subsection
(g) (c) of this
section.
(4) For calendar year one thousand nine hundred ninety-five,
nine and one-half percent of the state allocation and for all
subsequent calendar years, ten percent of the state allocation
shall be made available for lessees, purchasers or owners of
proposed commercial or industrial projects which qualify as
exempt facilities under section 1394 of the United States Internal Revenue Code. All reservations of private activity
bonds for the projects shall be approved and awarded by the
committee based upon an evaluation of general economic benefit
and any rule or regulation that the council for community and
economic development may promulgate pursuant to section three,
article two, chapter five-b of this code.
(c)
For calendar year one thousand nine hundred ninety-five,
the remaining seventy percent and for all subsequent calendar
years, the remaining
fifty-five seventy percent of the state
allocation shall be made available for lessees, purchasers or
owners of proposed commercial or industrial projects which
qualify as exempt facilities as defined by section 142(a) of the
United States Internal Revenue Code.
[26 U.S.C. § 142(a)] All
reservations of private activity bonds for exempt facilities
shall be approved and awarded by the committee based upon an
evaluation of general economic benefit and any rule or regulation
that the council for community and economic development may
promulgate pursuant to section three, article two, chapter five-b
of this code:
Provided, That no
such reservation shall be in an
amount in excess of fifty percent of this portion of the state
allocation.
(d) No reservation shall be made for any project until the
governmental body seeking the same shall submit a notice of
reservation of funds as provided in subsection (e) of this
section. The governmental body must first adopt an inducement
resolution approving the prospective issuance of bonds and setting forth the maximum amount of bonds to be issued. Each
governmental body seeking a reservation of funds following the
adoption of such inducement resolution shall submit a notice of
inducement signed by its clerk, secretary or recorder or other
appropriate official to the development office. Such notice
shall include
such information as may be required by the
development office pursuant to any rule or regulation of the
council for community and economic development. Notwithstanding
the foregoing, when a governmental body proposes to issue bonds
for the purpose of:
(i) Constructing, acquiring or equipping a
project described in subdivision (3), subsection (b), or
subdivision (4), subsection (b) of this section; or (ii)
constructing an energy producing project which relies, in whole
or in part, upon coal waste as fuel, to the extent such project
qualifies as a solid waste facility under section 142(a)(6) of
the United States Internal Revenue Code of 1986,
such the project
may be awarded a reservation of funds from the state allocation
available for three years subsequent to the year in which the
notice of reservation of funds is submitted, at the discretion of
the executive director of the development office:
Provided, That
no
such discretionary reservation may be made for any single
project
described in subsection (d)(ii) of this section in an
amount in excess of thirty-five percent of the state allocation
available for
such the year subsequent to the year in which the
request is made. A discretionary reservation of the state
allocation for a project described
in subsection (d)(ii) of this section in the preceding sentence shall not be granted by the
executive director of the development office unless the project
for which the request is made has received a certification from
the federal energy regulatory commission as a qualifying facility
or a cogeneration project.
(e) Currently with or following the submission of its notice
of inducement, the governmental body at any time deemed expedient
by it may submit its notice of reservation of funds which shall
include the following information:
(1) The date of the notice of reservation of funds;
(2) The identity of the governmental body issuing the bonds;
(3) The date of inducement and the prospective date of
issuance;
(4) The name of the entity for which the bonds are to be
issued;
(5) The amount of the bond issue, or, if the amount of the
bond issue for which a reservation of funds has been made has
been increased, the amount of the increase;
(6) The type of issue; and
(7) A description of the project for which the bonds are to
be issued.
(f) The development office shall accept the notice of
reservation of funds no earlier than the first calendar workday
of the year for which a reservation of funds is sought:
Provided, That a notice of reservation of funds with respect to
a project described in subdivision (4), subsection (b) of this section or an energy producing project that is eligible for a
reservation of funds for a year subsequent to the year in which
the notice of reservation of funds is submitted may contain an
application for funds from a subsequent year's state allocation.
Upon receipt of the notice of reservation of funds, the
development office shall immediately note upon the face of
such
the notice the date and time of reception.
(g) If the bond issue for which a reservation has been made
has not been finally closed within one hundred twenty days of the
date of the reservation to be made by the committee, or the
thirty-first day of December following such date of reservation
if sooner and a statement of bond closure which has been executed
by the clerk, secretary, recorder or other appropriate official
of the governmental body reserving the same has not been received
by the development office within that time, then
such the
reservation shall expire and be deemed to have been forfeited and
the funds so reserved shall be released and revert to the portion
of the state allocation from which the funds were originally
reserved and shall then be made available for other qualified
issues in accordance with this section and the Internal Revenue
Code:
Provided, That, as to any reservation for a nonexempt
project that is forfeited on or after the first day
November
September in any calendar year,
fifty percent of such reservation
shall revert to the portion of the state allocation described in
subsection (c) of this section
and fifty percent of such
reservation shall revert to the portion of the state allocation described in subdivision (4), subsection (b) of this section:
Provided, however, That, as to any notice of reservation of funds
received by the development office during the month of December
in any calendar year with respect to any project qualifying as an
elective carry forward pursuant to section 146(f)(5) of the
Internal Revenue Code,
such the notice of reservation of funds
and the reservation to which the same relates shall not expire or
be subject to forfeiture:
Provided further, That any unused
state ceiling as of the thirty-first day of December in any year
not otherwise subject to a carry forward pursuant to section
146(f) of the Internal Revenue Code shall be allocated to the
West Virginia housing development fund, which shall be deemed to
have elected to carry forward the unused state ceiling for the
purpose of issuing qualified mortgage bonds, qualified mortgage
credit certificates or bonds for qualified residential rental
projects, each as defined in the Internal Revenue Code. All
requests for subsequent reservation of funds upon loss of a
reservation pursuant to this section shall be treated in the same
manner as a new notice of reservation of funds in accordance with
subsections (d) and (e) above.
(h) Once a reservation of funds has been made for
a project
described in subdivision (4), subsection (b) of this section or
for an energy producing project which relies, in whole or in
part, upon coal waste as fuel and otherwise qualifies as a solid
waste facility under section 142(a)(6) of the United States
Internal Revenue Code of 1986, notwithstanding the language of subsection (g) of this section,
such the reservation shall remain
fully available with respect to such project until the first day
of October in the year from which the reservation was made at
which time, if the bond issue has not been finally closed, the
reservation shall expire and be deemed forfeited and the funds so
reserved shall be released as provided in subsection (g) of this
section.
NOTE: The purpose of this bill is to establish a procedure
for the allocation of the state ceiling on issuance of private
activity bonds for industrial and commercial projects to be
located in empowerment zones and enterprise communities and to
amend the allocation mechanism for other private activity bonds
accordingly.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.