ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 558
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
____________
[Originating in the Committee on Finance;
reported March 24, 2005.]
____________
A BILL to repeal §12-6-10 and §12-6-15 of the Code of West
Virginia, 1931, as amended; to amend and reenact §12-1-2,
§12-1-12 and §12-1-13 of said code; to amend said code by
adding thereto a new section, designated §12-1-12b; to amend
and reenact §12-2-2 and §12-2-3 of said code; to amend and
reenact §12-3A-4 of said code; to amend and reenact §12-6-1a,
§12-6-5, §12-6-8 and §12-6-13 of said code; to amend and
reenact §12-6B-4 of said code; and to amend said code by
adding thereto a new article, designated §12-6C-1, §12-6C-2,
§12-6C-3, §12-6C-4, §12-6C-5, §12-6C-6, §12-6C-7, §12-6C-8,
§12-6C-9, §12-6C-10, §12-6C-11, §12-6C-12, §12-6C-13,
§12-6C-14, §12-6C-15, §12-6C-16, §12-6C-17, §12-6C-18,
§12-6C-19 and §12-6C-20, all relating generally to the management and investment of public funds; authorizing
investment accounts for the Board of Treasury Investments;
adding State Treasurer to entities receiving reports from
depositories regarding accounts not approved by the State
Treasurer; allowing the Board of Treasury Investments to
accept funds remitted by the State Treasurer; codifying and
clarifying the duties of the State Treasurer in administering
the Federal Cash Management Improvement Act; authorizing the
Federal Cash Management Interest Fund and the Federal Cash
Management - Administration Fund; enabling the Board of
Treasury Investments to invest moneys in the consolidated
fund; codifying current method of handling receipts using the
state accounting system; authorizing Legislature to transfer
moneys; requiring spending units to comply with procedures for
receipt and disbursement of moneys not due the state;
clarifying roles and administration of the West Virginia pay
card; transferring management of consolidated fund from
Investment Management Board to West Virginia Board of Treasury
Investments; removing provision that the Investment Management
Board can order the State Auditor and the State Treasurer to
transmit funds; creating West Virginia Board of Treasury
Investments; changing the date the debt capacity report is due
from the first day of October to the fifteenth day of January; providing purposes, legislative findings and definitions for
the Board of Treasury Investments; specifying membership of
Board, appointment of certain directors of Board, terms of
office, vacancies in office, removal of directors, expenses of
directors, meetings and powers of Board; transferring
management, control and administration of consolidated fund to
the Board of Treasury Investments; requiring annual review of
asset allocation plans and investment policies; specifying
requirements and restrictions on investments; authorizing
loans for industrial development; handling of securities;
establishing the standard of care for investments;
transferring existing cash, securities and other investments
to the Board of Treasury Investments; requiring audits,
financial statements and reports; continuing the current
powers of spending units as to investments; transferring all
loans from the consolidated fund to the Board of Treasury
Investments; creating the fee fund and the investment fund;
authorizing fees for administration and expenses; and
termination of Board.
Be it enacted by the Legislature of West Virginia:
That §12-6-10 and §12-6-15 of the Code of West Virginia, 1931,
as amended, be repealed; that §12-1-2, §12-1-12 and §12-1-13 of
said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §12-1-12b; that §12-2-2
and §12-2-3 of said code be amended and reenacted; that §12-3A-4 of
said code be amended and reenacted; that §12-6-1a, §12-6-5,
§
12-6-8
and §12-6-13 of said code be amended and reenacted; that §12-6B-4
of said code be amended and reenacted; and that said code be
amended by adding thereto a new article, designated
§
12-6C-1, §12-
6C-2,
§12-6C-3,
§12-6C-4, §
12-6C-5,
§
12-6C-6,
§
12-6C-7,
§
12-6C-8,
§
12-6C-9,
§
12-6C-10,
§
12-6C-11,
§
12-6C-12,
§
12-6C-13,
§
12-6C-14,
§
12-6C-15,
§
12-6C-16,
§
12-6C-17,
§
12-6C-18,
§
12-6C-19 and
§
12-6C-
20, all to read as follows:
ARTICLE 1. STATE DEPOSITORIES.
§12-1-2. Depositories for demand deposits; categories of demand
deposits; competitive bidding for disbursement
accounts; maintenance of deposits by State Treasurer;
definition of spending unit.
(a) The State Treasurer shall designate the state and national
banks and the state and federal savings and loan associations in
this state meeting the requirements of this chapter as depositories
for all state funds placed in demand deposits.
(b) (1) Demand deposit accounts shall consist of receipt and
disbursement accounts. Receipt accounts are accounts in which are
deposited moneys belonging to or due the State of West Virginia or
any official, department, board, commission or agency thereof of the state.
(2) Disbursement accounts are accounts from which are paid
moneys due from the State of West Virginia or any official,
department, board, commission, political subdivision or agency
thereof of the state to any political subdivision, person, firm or
corporation, except moneys paid from investment accounts.
(3) Investment accounts are accounts established by the West
Virginia Investment Management Board, the West Virginia Board of
Treasury Investments or the State Treasurer for the buying and
selling of securities for investment purposes.
(c) The State Treasurer shall promulgate propose rules for
legislative approval, in accordance with the provisions of article
three, chapter twenty-nine-a of this code, concerning depositories
for receipt accounts prescribing the selection criteria,
procedures, compensation and such any other contractual terms as it
considers to be in the best interests of the state giving due
consideration to: (1) The activity of the various accounts
maintained therein in the depositories; (2) the reasonable value of
the banking services rendered or to be rendered the state by such
the depositories; and (3) the value and importance of such the
deposits to the economy of the communities and the various areas of
the state affected thereby by the deposits.
(d) The State Treasurer shall select depositories for disbursement accounts through competitive bidding by eligible banks
in this state. If none of the eligible banks in this state are
able to provide the needed services, then the State Treasurer may
include eligible banks outside this state in the competitive
bidding process. The State Treasurer shall promulgate propose
rules for legislative approval in accordance with the provisions of
article three, chapter twenty-nine-a of this code, prescribing the
procedures and criteria for the bidding and selection. The State
Treasurer shall, in the invitations for bids, specify the
approximate amounts of deposits, the duration of contracts to be
awarded and such any other contractual terms as the State Treasurer
considers to be in the best interests of the state, consistent with
obtaining the most efficient service at the lowest cost.
The amount of money needed for current operation purposes of
the state government, as determined by the State Treasurer, shall
be maintained at all times in the State Treasury, in cash, in short
term investments not to exceed five days or in disbursement
accounts with financial institutions designated as depositories in
accordance with the provisions of this section. No state officer
or employee shall make or cause to be made any deposits of state
funds in banks not so designated financial institutions which have
not been designated as depositories.
(e) Except as otherwise provided in this code, only banks and state and federal savings and loan associations designated by the
State Treasurer as depositories may accept deposits of state funds.
Only the Legislature and the State Treasurer may determine whether
funds are state funds and only the State Treasurer may approve the
opening of an account or processing of a transaction with a
financial institution.
(f) Boards, commissions and spending units with authority
pursuant to this code to deposit moneys in a financial institution
without approval of the State Treasurer shall retain that authority
and are not required to have the State Treasurer designate a
financial institution as a depository: Provided, That boards,
commissions and spending units with moneys deposited in financial
institutions not approved for that purpose by the State Treasurer
shall submit a report on those moneys annually to the Legislative
Auditor and the State Treasurer.
(g) The provisions of this section shall not apply to the
proceeds from the sale of general obligation bonds or bonds issued
by the School Building Authority, the Parkways, Economic
Development and Tourism Authority, the Housing Development Fund,
the Economic Development Authority, the Infrastructure and Jobs
Development Council, the Water Development Authority or the
Hospital Finance Authority.
(h) As used in this chapter, "spending unit" means a department, agency, board, commission or institution of state
government for which an appropriation is requested, or to which an
appropriation is made by the Legislature.
§12-1-12. Investing funds in treasury; depositories outside the
state.
(a) When the funds in the Treasury exceed the amount needed
for current operational purposes, as determined by the State
Treasurer, the State Treasurer shall make all of such excess funds
available for investment by the investment management board Board
of Treasury Investments which shall invest the excess for the
benefit of the general revenue fund: Provided, That the State
Treasurer, after reviewing the cash flow needs of the state, may
withhold and invest amounts not to exceed one hundred twenty-five
million dollars of the operating funds needed to meet current
operational purposes. Investments made by the State Treasurer under
this section shall be made in short term investments not to exceed
five days. Operating funds means the consolidated fund established
in section eight, article six of this chapter, including all cash
and investments of the fund.
(b) Spending units with authority to retain interest or
earnings on a fund or account may submit requests to the State
Treasurer to transfer moneys to a specific investment pool of the
Investment Management Board or the Board of Treasury Investments and retain any interest or earnings on the money invested. The
general revenue fund shall receive all interest or other earnings
on money invested that are not designated for a specific fund or
account.
(c) Whenever the funds in the Treasury exceed the amount for
which depositories within the state have qualified, or the
depositories within the state which have qualified are unwilling to
receive larger deposits, the State Treasurer may designate
depositories outside the state, disbursement accounts being bid for
in the same manner as required by depositories within the state,
and when depositories outside the state have qualified by giving
the bond prescribed in section four of this article, the State
Treasurer shall deposit funds in the same manner as funds are
deposited in depositories within the state under this article.
(d) The State Treasurer may transfer funds to financial
institutions outside the state to meet obligations to paying agents
outside the state if the financial institution meets the same
collateral requirements as set forth in this article.
§12-1-12b. Cash management improvement act; administration;
reports.
(a) The Cash Management Improvement Act of 1990, Public Law
101-453, October 24, 1990, 31 USCA Section 6501, et seq., (CMIA)
and regulations, as amended, establishes requirements and techniques, including calculations, for the receipt and
disbursement of federal funds by states. The authorized official
and representative of the State of West Virginia for the CMIA is
the State Treasurer.
(b) In administering the CMIA, the State Treasurer is
authorized to do all things reasonably necessary, including without
limitation, entering into agreements with, negotiating settlements
with, refunding any interest due and satisfying any liability to
the United States Treasury in accordance with the CMIA.
(c) Periodically the State Treasurer shall transfer to the
Federal Cash Management Interest Fund, which is hereby authorized
and continued, earnings on the State General Revenue Fund in an
amount the State Treasurer estimates is needed to make refunds in
accordance with the CMIA. After each annual settlement with the
United States Treasury, the State Treasurer shall transfer to the
State General Revenue Fund any moneys remaining in the Federal Cash
Management Interest Fund for the period just settled.
(d) The State Treasurer shall also transfer periodically to
the Federal Cash Management - Administration Fund, which is hereby
authorized and continued, earnings on the State General Revenue
Fund in an amount the State Treasurer determines is needed to pay
for the costs of administering the CMIA. The State Treasurer may
pay the costs he or she incurs in administering the CMIA from the Federal Cash Management - Administration Fund.
(e) All state spending units shall cooperate fully with the
State Treasurer in accumulating all the necessary data elements to
fully comply with the CMIA.
(f) The State Treasurer shall send quarterly reports on the
activities involving the CMIA to the Governor, State Auditor,
Secretary of Revenue and Joint Committee on Government and Finance.
§12-1-13. Payment of banking services and litigation costs for
prior investment losses.
(a) The State Treasurer is authorized to pay for banking
services, and goods and services ancillary thereto to the banking
services, by either a compensating balance in an account maintained
at the financial institution providing the services or with a state
warrant as described in section one, article three of this chapter.
(b) The Investment Management Board is authorized to may pay
for the investigation and pursuit of claims against third parties
for the investment losses incurred during the period beginning on
the first day of August, one thousand nine hundred eighty-four, and
ending on the thirty-first day of August, one thousand nine hundred
eighty-nine. The payment may be in the form of a state warrant.
(c) If payment is made by a state warrant, the investment
management board West Virginia Board of Treasury Investments, at
the request of the State Treasurer, is authorized to may establish within the consolidated fund an investment pool which will generate
sufficient income to pay for all banking services provided to the
state and to pay for the investigation and pursuit of the prior
investment loss claims. All income earned by the investment pool
shall be paid into a special account of the State Treasurer known
as the banking services account to pay for all banking services and
goods and services ancillary to the banking services provided to
the state, for the investigation and pursuit of the prior
investment loss claims, and for amortization of the balance in the
investment imbalance fund.
ARTICLE 2. PAYMENT AND DEPOSIT OF TAXES AND OTHER AMOUNTS DUE THE
STATE OR ANY POLITICAL SUBDIVISION.
§12-2-2. Itemized record of moneys received for deposit;
regulations governing deposits; credit to state fund;
exceptions.
(a) All officials and employees of the state authorized by
statute to accept moneys due the State of West Virginia shall keep
a daily itemized record of moneys so received for deposit in the
State Treasury and shall deposit within twenty-four hours with the
State Treasurer all moneys received or collected by them for or on
behalf of the state for any purpose whatsoever. The State
Treasurer shall be authorized to may review the procedures and
methods used by officials and employees authorized to accept moneys due the state and change such the procedures and methods if he or
she determines it to be is in the best interest of the state:
Provided, That the State Treasurer shall not be authorized to may
not review or amend the procedures by which the Department of Tax
and Revenue accepts moneys due the state. The State Treasurer
shall propose rules for legislative approval, in accordance with
the provisions of article three, chapter twenty-nine-a of this code
governing the procedure for deposits. The official or employee
making such deposits with the State Treasurer shall prepare deposit
lists in the manner and upon report forms as may be prescribed by
the State Treasurer in the state accounting system. Certified or
receipted copies shall be immediately forwarded by the state
treasurer The State Treasurer shall review the deposits in the
state accounting system and forward the information to the State
Auditor and to the Secretary of administration Revenue. The
original of the deposit report shall become a part of the
treasurer`s permanent record.
(b) All moneys received by the state from appropriations made
by the Congress of the United States shall be recorded in special
fund accounts, in the State Treasury apart from the general
revenues of the state, and shall be expended in accordance with the
provisions of article eleven, chapter four of this code. All
moneys, other than federal funds, defined in section two, article eleven, chapter four of this code, shall be credited to the state
fund and treated by the State Auditor and State Treasurer as part
of the general revenue of the state except the following funds
which shall be recorded in separate accounts:
(1) All funds excluded by the provisions of section six,
article eleven, chapter four of this code;
(2) All funds derived from the sale of farm and dairy products
from farms operated by any agency of the state government other
than the farm management commission spending unit of the state;
(3) All endowment funds, bequests, donations, executive
emergency funds and death and disability funds;
(4) All fees and funds collected at state educational
institutions for student activities;
(5) All funds derived from collections from dormitories,
boardinghouses, cafeterias and road camps;
(6) All moneys received from counties by institutions for the
deaf and blind on account of clothing for indigent pupils;
(7) All insurance collected on account of losses by fire and
refunds;
(8) All funds derived from bookstores and sales of blank paper
and stationery, and collections by the chief inspector of public
offices;
(9) All moneys collected and belonging to the capitol building fund, state road fund, state road sinking funds, general school
fund, school fund, state fund (moneys belonging to counties,
districts and municipalities), state interest and sinking funds,
state compensation funds, the fund maintained by the Public Service
Commission for the investigation and supervision of applications
and all fees, money, interest or funds arising from the sales of
all permits and licenses to hunt, trap, fish or otherwise hold or
capture fish and wildlife resources and money reimbursed and
granted by the federal government for fish and wildlife
conservation; and
(10) All moneys collected or received under any act of the
Legislature providing that funds collected or received thereunder
under the act shall be used for specific purposes.
(c) All moneys, excepted except as provided in subdivisions
(1) through (9), inclusive, subsection (b) of this section, shall
be paid into the State Treasury in the same manner as collections
not so excepted and shall be recorded in separate accounts to be
used and expended only for receipt and expenditure for the purposes
for which the same moneys are authorized to be collected by law:
Provided, That amounts collected pursuant to subdivision (10),
subsection (b) of this section, which are found, from time to time,
to exceed funds needed for the purposes set forth in general law
may be transferred to other accounts or funds and redesignated for other purposes by appropriation of the Legislature. The gross
amount collected in all cases shall be paid into the State
Treasury. And Commissions, costs and expenses, of collection
authorized by general law to be paid out of the gross collection,
including bank and credit or check card fees, are hereby authorized
to be paid out of the moneys collected and paid into the state
treasury including, without limitation, amounts charged for use of
bank, charge, credit or debit cards, incurred in the collection
process shall be paid from the gross amount collected in the same
manner as other payments are made from the State Treasury.
(d) The State Treasurer shall have authority to may establish
an imprest fund or funds in the office of any state agency or
institution making spending unit upon receipt of a proper
application to the board. To implement this authority, the State
Treasurer shall propose rules for legislative approval in
accordance with the provisions of article three, chapter
twenty-nine-a of this code. The State Treasurer or his or her
designee shall annually audit all imprest funds and prepare a list
of all such the funds showing the location and amount as of fiscal
year end, retaining the list as a permanent record of the State
Treasurer until the Legislative Auditor has completed an audit of
the imprest funds of all agencies and institutions involved.
(e) The State Treasurer shall be authorized to may develop and implement a centralized receipts processing center. The State
Treasurer may request the transfer of equipment and personnel from
appropriate state agencies to the centralized receipts processing
center in order to implement the provisions of this subsection
section: Provided, That the Governor or appropriate constitutional
officer shall have final has authority to authorize the transfer of
equipment or personnel to the centralized receipts processing
center from the respective agency.
§12-2-3. Deposit of moneys not due the state.
All officials and employees of the state authorized to accept
moneys that the State Treasurer determines or that this code
specifies are not funds due the state pursuant to the provisions of
section two of this article shall deposit the moneys, as soon as
practicable, in the manner and in the depository specified by the
State Treasurer. The State Treasurer shall prescribe the forms and
procedures for depositing the moneys.
Notwithstanding any provision of this code to the contrary,
including provisions stating funds collected are not state funds
and provisions authorizing a spending unit to have one or more
accounts outside the Treasury, a spending unit shall comply with
the State Treasurer's procedures for the receipt and disbursement
of moneys not due the state and obtain written authorization from
the State Treasurer before depositing the funds any moneys in an account outside the Treasury. Upon the State Treasurer`s written
revocation of the authorization, the spending unit shall deposit
funds deposited in an account outside the Treasury in into the
Treasury in the manner and in the depository specified by the State
Treasurer. The State Treasurer is the final determining authority
as to whether these funds are funds due or not due the state
pursuant to section two of this article. The State Treasurer shall
on a quarterly basis provide the Legislative Auditor with a report
of all accounts approved by him or her authorized under this
section.
ARTICLE 3A. FINANCIAL ELECTRONIC COMMERCE.
§12-3A-4. Payment by a West Virginia pay card.
The State Auditor and the State Treasurer may jointly
establish a state stored value debit card program known as the
"West Virginia Check Pay Card" for recipients of employee payroll,
or of retirement benefits or entitlement programs who are
considered unbanked and who do not possess a federally insured
depository institution account. The State Auditor and the State
Treasurer shall use every reasonable effort to make a federally
insured depository account available to a recipient, and to
encourage all identified unbanked recipients to obtain a federally
insured depository account. Prior to issuing the West Virginia
check card, The State Auditor and the state treasurer shall first make a determination include an unbanked recipient in the program
upon determining that a recipient has shown good cause that an
alternative method to direct deposit is necessary exists. Once an
unbanked recipient is included in the program, the State Auditor
and shall provide the State Treasurer with an electronic file
containing the necessary unbanked recipient information. The State
Treasurer shall jointly issue a request for proposals in accordance
with section three of this article to aid in the administration of
the program. and in the establishment of state owned bank accounts
and accommodate accessible locations for use of the West Virginia
check card. The State Auditor shall assist in the review of pay
card proposals. In carrying out the purposes of this article, the
state auditor and State Treasurer shall not compete with banks or
other federally insured financial institutions, or for profit.
ARTICLE 6. WEST VIRGINIA INVESTMENT MANAGEMENT BOARD.
§12-6-1a. Legislative findings.
(a) The Legislature hereby finds and declares that all the
public employees covered by the Public Employees Retirement System,
the Teachers Retirement System, the West Virginia State Police
Retirement System, the Death, Disability and Retirement Fund of the
Division of Public Safety, the Judges' Retirement System and the
Deputy Sheriffs Retirement System should benefit from a prudent and
conscientious staff of financial professionals dedicated to the administration, investment and management of those employees and
employers financial contributions and that an independent board and
staff should be immune to changing political climates and should
provide a stable and continuous source of professional financial
investment and management.
(b) The Legislature finds and declares that teachers and other
public employees throughout the state are experiencing economic
difficulty and that in order to reduce this economic hardship on
these dedicated public employees and to help foster sound financial
practices, the West Virginia Investment Management Board is given
the authority to may develop, implement and maintain an efficient
and modern system for the investment and management of the state's
money, except those moneys managed in accordance with article six-c
of this chapter. The Legislature further finds that in order to
implement these sound fiscal policies, the West Virginia Investment
Management Board shall operate as an independent board with its own
full-time staff of financial professionals, immune to changing
political climates, in order to provide a stable and continuous
source of professional financial management.
(c) The Legislature hereby finds and declares further that
experience has demonstrated that prudent investment provides
diversification and beneficial return not only for public employees
but for all citizens of the state and that in order to have access to this sound fiscal policy, public employee and employer
contributions to the 401(a) plans are declared to be made to an
irrevocable trust on behalf of each plan, available for no use or
purpose other than for the benefit of those public employees.
(d) The Legislature hereby finds and declares further that the
Workers' Compensation Fund and Coal-Workers' Pneumoconiosis Fund
are trust funds to be used exclusively for those workers, miners
and their beneficiaries who have sacrificed their health in the
performance of their jobs and further finds that the assets
available to pay awarded benefits should be prudently invested so
that awards may be paid.
(e) The Legislature hereby finds and declares further that an
independent public body corporate with appropriate governance shall
be is the best means of assuring prudent financial management of
these funds under rapidly changing market conditions and
regulations.
(f) The Legislature hereby finds and declares further that in
accomplishing this purpose, the West Virginia Investment Management
Board, created and established by this article, is acting in all
respects for the benefit of the state's public employees and
ultimately the citizens of the state and the West Virginia
Investment Management Board is empowered by this article to may act
as trustee of the irrevocable trusts created by this article and to manage and invest other state funds.
(g) The Legislature hereby finds and declares further that the
standard of care and prudence applied to trustees, the conduct of
the affairs of the irrevocable trusts created by this article and
the investment of other state funds is intended to be that applied
to the investment of funds as described in the "Uniform Prudent
Investor Act" codified as article six-c, chapter forty-four of this
code and as described in section eleven of this article.
(h) The Legislature further finds and declares that the West
Virginia Supreme Court of Appeals declared the West Virginia Trust
Fund Act unconstitutional in its decision rendered on the
twenty-eighth day of March, one thousand nine hundred ninety-seven,
to the extent that it authorized investments in corporate stock,
but the court also recognized that there were other permissible
constitutional purposes of the West Virginia Trust Fund Act and
that it is the role of the Legislature to determine those purposes
consistent with the court's decision and the Constitution of West
Virginia.
(i) The Legislature hereby further finds and declares that it
is in the best interests of the state and its citizens to create a
new investment management board in order to: (1) Be in full
compliance with the provisions of the Constitution of West
Virginia; and (2) protect all existing legal and equitable rights of persons who have entered into contractual relationships with the
West Virginia Board of Investments and the West Virginia Trust
Fund.
§12-6-5. Powers of the Board.
The Board may exercise all powers necessary or appropriate to
carry out and effectuate its corporate purposes. The Board may:
(1) Adopt and use a common seal and alter it at pleasure;
(2) Sue and be sued;
(3) Enter into contracts and execute and deliver instruments;
(4) Acquire (by purchase, gift or otherwise), hold, use and
dispose of real and personal property, deeds, mortgages and other
instruments;
(5) Promulgate and enforce bylaws and rules for the management
and conduct of its affairs;
(6) Notwithstanding any other provision of law, retain and
employ legal, accounting, financial and investment advisors and
consultants;
(7) Acquire (by purchase, gift or otherwise), hold, exchange,
pledge, lend and sell or otherwise dispose of securities and invest
funds in interest earning deposits and in any other lawful
investments;
(8) Maintain accounts with banks, securities dealers and
financial institutions both within and outside this state;
(9) Engage in financial transactions whereby securities are
purchased by the Board under an agreement providing for the resale
of the securities to the original seller at a stated price;
(10) Engage in financial transactions whereby securities held
by the Board are sold under an agreement providing for the
repurchase of the securities by the Board at a stated price;
(11) Consolidate and manage moneys, securities and other
assets of the other funds and accounts of the state and the moneys
of political subdivisions which may be made available to it under
the provisions of this article;
(12) Enter into agreements with political subdivisions of the
state whereby moneys of the political subdivisions are invested on
their behalf by the Board;
(13) Charge and collect administrative fees from political
subdivisions for its services;
(14) Exercise all powers generally granted to and exercised by
the holders of investment securities with respect to management of
the investment securities;
(15) Contract with one or more banking institutions in or
outside the state for the custody, safekeeping and management of
securities held by the Board;
(16) Make and, from time to time, amend and repeal bylaws,
regulations rules and procedures not inconsistent with the provisions of this article;
(17) Hire its own employees, consultants, managers and
advisors as it considers necessary and fix their compensation and
prescribe their duties;
(18) Develop, implement and maintain its own banking accounts
and investments;
(19) Do all things necessary to implement and operate the
Board and carry out the intent of this article;
(20) Require the state auditor and treasurer to transmit state
funds on a daily basis for investment: Provided, That money held
for meeting the daily obligations of state government need not be
transferred;
(21) (20) Upon request of the State Treasurer, transmit funds
for deposit in the State Treasury to meet the daily obligations of
state government;
(22) (21) Establish one or more investment funds for the
purpose of investing the funds for which it is trustee, custodian
or otherwise authorized to invest pursuant to this article.
Interests in each fund shall be designated as units and the Board
shall adopt industry standard accounting procedures to determine
each fund`s unit value. The securities in each investment fund are
the property of the Board and each fund shall be considered an
investment pool or fund and may not be considered a trust nor may the securities of the various investment funds be considered held
in trust. However, units in an investment fund established by or
sold by the Board and the proceeds from the sale or redemption of
any unit may be held by the Board in its role as trustee of the
participant plans; and
(23) (22) Notwithstanding any other provision of the code to
the contrary, conduct investment transactions, including purchases,
sales, redemptions and income collections, which shall not be
treated by the State Auditor as recordable transactions on the
state`s accounting system.
§12-6-8. Investment funds established; management thereof.
(a) There is hereby continued a special investment fund to be
managed by the board and designated as the Consolidated Fund.
Effective the thirtieth day of June, two thousand five, the power
and authority of the Board as to the consolidated fund terminates.
On the first day of July, two thousand five, the Board shall
transfer the consolidated fund, all moneys, obligations, assets,
securities and other investments of the consolidated fund and all
records, properties and any other document or item pertaining to
the consolidated fund in its possession or under its control to the
West Virginia Board of Treasury Investments established in article
six-c of this chapter.
(b) Each board, commission, department, official or agency charged with the administration of state funds may request the
State Treasurer to make moneys available to the Board for
investment.
(c) Each political subdivision of this state through its
treasurer or equivalent financial officer may enter into agreements
with the board State Treasurer for the investment of moneys of the
political subdivision. Any political subdivision may enter into an
agreement with any a state agency spending unit from which it
receives funds to allow the funds to be transferred request
transfer of the funds to their investment account with the
Investment Management Board or the West Virginia Board of Treasury
Investments.
(d) Moneys held in the various funds and accounts administered
by the Board shall be invested as permitted by this article and
subject to the restrictions contained in this article. For the
consolidated fund, the treasurer shall maintain records of the
deposits and withdrawals of each participant and the performance of
the various funds and accounts. The Board shall report the
earnings on the various funds under management to the State
Treasurer at the times determined by the State Treasurer. The
Board shall also establish rules for the administration of the
various funds and accounts established by this section as it
considers necessary for the administration of the funds and accounts, including, but not limited to: (1) The specification of
amounts which may be deposited in any fund or account and minimum
periods of time for which deposits will be retained; and (2)
creation of reserves for losses: Provided, That in the event any
moneys made available to the Board may not lawfully be combined for
investment or deposited in the consolidated funds established by
this section, the Board may create special accounts and may
administer and invest those moneys in accordance with the
restrictions specially applicable to those moneys.
§12-6-13. Board as agency for investments; exceptions.
All duties vested by law in any agency, commission, official
or other board of the state relating to the investment of moneys,
and the acquisition, sale, exchange or disposal of securities or
any other investment are hereby transferred to the Board:
Provided, That neither this section nor any other section of this
article applies to the duties vested by law in any agency,
commission, official or other board of the state relating to the
investment of moneys and the acquisition, sale, exchange or
disposal of securities or any other investment by the West Virginia
Board of Treasury Investments pursuant to article six-c of this
chapter, to the Board of the School Fund and or to the School Fund
established by section 4, article XII of the State Constitution:
Provided, however, That funds under the control of the Municipal Bond Commission may, in the discretion of the Commission, be made
available to the Board for investment to be invested by the
Commission as provided in article three, chapter thirteen of this
code.
ARTICLE 6B. DEBT CAPACITY ADVISORY DIVISION.
§12-6B-4. Powers and duties.
The Division shall perform the following functions and duties:
(a) Promulgate rules pursuant to article three, chapter
twenty-nine-a of this code, for the management and conduct of its
affairs;
(b) Annually review the size and condition of the state`s
tax-supported debt and submit to the Governor and to the
Legislature, on or before the first fifteenth day of October
January of each year, an estimate of the maximum amount of new
tax-supported debt that prudently may be authorized for the next
fiscal year, together with a report explaining the basis for the
estimate. The estimate shall be advisory and in no way restrict
the Governor or the Legislature. In preparing its annual review
and estimate, the Division shall, at a minimum, consider:
(1) The amount of net tax supported debt that, during the next
fiscal year and annually for the following ten fiscal years: (A)
Will be outstanding; and (B) has been authorized but not yet
issued;
(2) Projected debt service requirements during the next fiscal
year and annually for the following ten fiscal years based upon:
(A) Existing outstanding debt; (B) previously authorized but
unissued debt; and (C) projected bond authorizations;
(3) Any information available from the budget section of the
Department of Administration in connection with anticipated capital
expenditures projected for the next five fiscal years;
(4) The criteria that recognized bond rating agencies use to
judge the quality of state bonds;
(5) Any other factor that the Division finds as relevant to:
(A) The ability of the state to meet its projected debt service
requirements for the next fiscal year; (B) the ability of the state
to meet its projected debt service requirement for the next five
fiscal years; and (C) any other factor affecting the marketability
of such the bond; and
(6) The effect of authorizations of new tax-supported debt on
each of the considerations of this subsection.
(c) Conduct ongoing review of the amount and condition of
bonds, notes and other security obligations of the state`s spending
units: (1) Not secured by the full faith and credit of the state
or for which the Legislature is not obligated to replenish reserve
funds or make necessary debt service payments; (2) for which the
state has a contingent or limited liability or for which the Legislature is permitted to replenish reserve funds or make
necessary debt service payments if deficiencies occur. When
appropriate, the Division shall recommend limits on such the
additional obligations to the Governor and to the Legislature.
Such The recommendation is advisory and shall in no way restrict
restricts the Governor, the Legislature or the spending unit.
(d) The State Treasurer may review all proposed offerings of
debt, as defined in this article, submitted to the Division of Debt
Management, as provided in section six, article six-a of this
chapter. The Division may also request any additional information
which may be needed to issue an advisory opinion to the Governor,
the Speaker of the House of Delegates and the President of the
Senate as to the impact of the proposed offering on the state's net
tax-supported debt outstanding and any other criteria which the
State Treasurer feels may be relevant to the marketability of said
offering and its impact on the state's credit rating. Such The
advisory opinion shall in no way restrict the Governor, the
Legislature or the spending unit.
(e) Do all things necessary or convenient to effectuate the
intent of this article and to carry out its powers and functions.
ARTICLE 6C. WEST VIRGINIA BOARD OF TREASURY INVESTMENTS.
§12-6C-1. Purposes and objects; how article cited.
This article, cited as the West Virginia Treasury Investments Act, is enacted to provide for the investment and management of the
Consolidated Fund for the purposes of making state moneys more
accessible to state government and allowing the Investment
Management Board to focus on long-term investment of the trust
estates it manages pursuant to article six of this chapter.
§12-6C-2. Legislative findings.
(a) The Legislature finds and declares that the Consolidated
Fund should benefit from financial professionals dedicated to and
focused on the sound administration, investment and management of
the Fund.
(b) The Legislature finds and declares that the State
Treasurer currently enters into agreements on behalf of the West
Virginia Investment Management Board with political subdivisions
and provides reporting services for participants in the
Consolidated Fund.
(c) The Legislature finds and declares that the transfer of
the Consolidated Fund to the West Virginia Board of Treasury
Investments will allow for management of the fund within state
government and will encourage better cash management of state
moneys.
(d) The Legislature finds and declares that a public body
corporate within state government with appropriate governance is
the best means of assuring reasonable access to and prudent management and investment of the Consolidated Fund.
(e) The Legislature finds and declares that in accomplishing
these purposes, the West Virginia Board of Treasury Investments is
acting in all respects for the benefit of the citizens of the state
in managing and investing the Consolidated Fund.
(f) The Legislature further finds and declares that it is in
the best interests of the state, its citizens and the political
subdivisions to create the West Virginia Board of Treasury
Investments to manage and invest the Consolidated Fund to: (1)
Provide focused investment services for the operating funds of the
state and of its political subdivisions; (2) provide better
management of all state funds within state government; and (3)
allow the West Virginia Investment Management Board to focus on the
long-term investment of the trust estates it manages pursuant to
article six of this chapter.
§12-6C-3. Definitions.
As used in this article, unless a different meaning clearly
appears from the context:
(1) "Board" means the governing body for the West Virginia
Board of Treasury Investments. References in this code to the
entity investing the moneys of the Consolidated Fund, to the West
Virginia Board of Investments, to the West Virginia Trust Fund or
to the West Virginia Investment Management Board in connection with investing moneys in the Consolidated Fund means the Board as
defined in this subdivision;
(2) "Consolidated fund" means the investment fund continued in
section six of this article and transferred to the Board by the
West Virginia Investment Management Board for Management and
Investment;
(3) "Director" means any member serving on the Board;
(4) "Local government funds" means the moneys of a political
subdivision, including policemen's and firemen's pension and relief
funds, and volunteer fire department funds, transferred to the
Board for deposit;
(5) "Participant" means any state government spending unit or
political subdivision which transfers moneys to the Board for
investment;
(6) "Political subdivision" means and includes a county,
municipality or any agency, authority, board, county board of
education, commission or instrumentality of a county or
municipality and regional councils created pursuant to the
provisions of section five, article twenty-five, chapter eight of
this code;
(7) "Securities" means all bonds, notes, debentures or other
evidences of indebtedness and other lawful investment instruments;
and
(8) "State funds" means all moneys of the state which may be
lawfully invested except for the "school fund" established by
section four, article XII of the State Constitution.
§12-6C-4. West Virginia Board of Treasury Investments created;
body corporate; board; directors; nomination and
appointment of directors, qualifications and terms of
appointment, advice and consent; annual and other
meetings; committees; board approval of investment
policies required; open meetings, qualifications.
(a) The West Virginia Board of Treasury Investments is created
as a public body corporate and established to provide prudent
fiscal administration, investment and management for the
Consolidated Fund.
(b) Any appointment to the Board is effective immediately upon
appointment by the Governor with respect to voting, constituting a
quorum, receiving expenses and all other rights and privileges of
the Director position. A trustee of the West Virginia Investment
Management Board other than the Governor, State Treasurer or State
Auditor is not eligible to serve as a Director of the Board.
(c) The Board shall consist of five members, as follows:
(1) The Governor, the State Treasurer and the State Auditor or
their designees. They shall serve by virtue of their offices and
are not entitled to compensation under the provisions of this article. The Governor, State Treasurer and State Auditor or their
designees are subject to all duties, responsibilities and
requirements of the provisions of this article; and
(2) Two persons appointed by the Governor subject to the
advice and consent of the Senate.
(d) Of the two persons appointed by the Governor, one shall be
a certified public accountant with experience in finance, investing
and management, and one shall be an attorney with experience in
finance, investing and management.
(e) (1) Initial appointment of the appointed directors shall
be for the following terms:
(A) One member shall be appointed for a term ending the
thirtieth day of June, two thousand seven; and
(B) One member shall be appointed for a term ending the
thirtieth day of June, two thousand nine.
(2) Except for appointments to fill vacancies, each subsequent
appointment shall be for the term ending the thirtieth day of June
of the fourth year following the year the preceding term expired.
A Director may be reappointed. In the event a vacancy occurs it
shall be filled by appointment for the unexpired term. A Director
whose term has expired shall continue in office until a successor
has been duly appointed and qualified. No appointed member of the
Board may be removed from office by the Governor except for official misconduct, incompetency, neglect of duty, gross
negligence, misfeasance or gross immorality.
(f) All directors shall receive reasonable and necessary
expenses actually incurred in discharging director's duties
pursuant to this article.
(g) The Board shall hold quarterly meetings. Board bylaws may
provide for calling and holding additional meetings.
Representatives of participants and members of the public may
attend any meeting held by the Board, except during those meetings
or part of meetings closed by the Board as permitted by law.
Attendees shall observe standards of decorum established by board
policy.
(h) The Board shall annually adopt a fee schedule and a budget
reflecting fee structures for the year.
(i) The Board chairman may appoint committees as needed,
including, but not limited to, an investment policies committee to
discuss drafting, reviewing or modifying written investment
policies. Each committee shall seek input from participants before
reporting its recommendations to the Board. The Board may meet
with any or all committees during any of its meetings.
(j) Any meeting of the Board may be closed upon adoption of a
motion by any Director when necessary to preserve the
attorney-client privilege, to protect the privacy interests of individuals, to review personnel matters or to maintain
confidentiality when confidentiality is in the best interest of the
participants.
§12-6C-5. Powers of the Board.
The Board may exercise all powers necessary or appropriate to
carry out and effectuate its corporate purposes. The Board may:
(1) Adopt and use a common seal and alter it at pleasure;
(2) Sue and be sued;
(3) Enter into contracts and execute and deliver instruments
using the policies and procedures of the State Treasurer's Office;
(4) Acquire (by purchase, gift or otherwise), hold, use and
dispose of real and personal property, deeds, mortgages and other
instruments;
(5) Promulgate and enforce bylaws and rules for the management
and conduct of its affairs;
(6) Notwithstanding any other provision of law to the
contrary, specifically article three, chapter five-a of this code,
retain and contract with legal, accounting, financial and
investment managers, advisors and consultants;
(7) Acquire (by purchase, gift or otherwise), hold, exchange,
pledge, lend and sell or otherwise dispose of securities and invest
funds in investments authorized by this article;
(8) Maintain accounts with banks, securities dealers and financial institutions both within and outside this state;
(9) Engage in financial transactions whereby securities are
purchased by the Board under an agreement providing for the resale
of the securities to the original seller at a stated price;
(10) Engage in financial transactions whereby securities held
by the Board are sold under an agreement providing for the
repurchase of the securities by the Board at a stated price;
(11) Consolidate and manage moneys, securities and other
assets of the consolidated fund and accounts of the state and the
moneys of political subdivisions which may be made available to it
under the provisions of this article;
(12) Abide by agreements entered into by the State Treasurer
with political subdivisions of the state for investment of moneys
of the political subdivisions by the Board;
(13) Charge and collect administrative fees from participants,
including political subdivisions, for its services;
(14) Exercise all powers generally granted to and exercised by
the holders of investment securities with respect to management of
the investment securities;
(15) Use any contract or agreement of the Investment
Management Board or the State Treasurer's Office and enter into its
own contracts or agreements, including, without limitation entering
into a contract or agreement with one or more banking institutions in or outside the state for the custody, safekeeping and management
of securities held by the Board and with any investment manager and
investment advisor needed;
(16) Make, and from time to time, amend and repeal bylaws,
rules and procedures not inconsistent with the provisions of this
article;
(17) Hire its own employees, consultants, managers and
advisors as it considers necessary and fix their compensation and
prescribe their duties;
(18) Develop, implement and maintain its own investment
accounts;
(19) Offer assistance and seminars to spending units and to
political subdivisions;
(20) Upon request of the State Treasurer, transmit funds for
deposit to the State Treasury to meet the daily obligations of
state government; and
(21) Establish one or more investment funds, pools or
participant accounts within the consolidated fund for the purpose
of investing the moneys and assets for which it is director,
trustee, custodian or otherwise authorized to invest pursuant to
this article. Interests in each fund, pool or participant account
are designated as units and the Board shall adopt industry standard
accounting procedures to determine the unit value of each fund, pool or participant account. The securities in each investment
fund, pool or participant account are the property of the Board and
each fund, pool or participant account is considered an investment
pool, investment fund or investment participant account.
§12-6C-6. Consolidated fund continued; management.
(a) The consolidated fund is continued and notwithstanding any
provision of this code to the contrary is vested in the West
Virginia Board of Treasury Investments on the first day of July,
two thousand five.
(b) Each spending unit authorized to invest moneys shall
unless prohibited by law, request the State Treasurer to invest its
moneys. Based upon spending unit representations, the State
Treasurer shall send the moneys to the West Virginia Board of
Treasury Investments or to the Investment Management Board for
investment.
(c) Each political subdivision of this state through its State
Treasurer or equivalent financial officer may enter into agreements
with the State Treasurer for the investment of moneys of the
political subdivision. Any political subdivision may enter into an
agreement with the state spending unit from which it receives
moneys to allow the board to invest the moneys.
(d) Moneys held in the various funds and accounts administered
by the Board are invested as permitted by this article and subject to the restrictions contained in this article.
(e) The State Treasurer shall maintain records of the deposits
and withdrawals of each participant and the performance of the
various funds, pools and accounts. The Board shall report the
earnings on the funds, pools, and accounts under management to the
State Treasurer at the times determined by the State Treasurer.
(f) The Board shall establish policies for the administration
of the various funds, pools and accounts authorized by this article
as it determines necessary. The policies may specify the minimum
amounts and timing of deposits and withdrawals and any other
matters authorized by the Board.
§12-6C-7. Management and control of fund; officers; staff;
fiduciary or surety bonds for directors; liability of
directors.
(a) The management and control of the Consolidated Fund is
vested solely in the Board in accordance with the provisions of
this article.
(b) The State Treasurer is the Chairman of the Board. The
Board shall elect a vice chairman. Annually, the Directors shall
elect a secretary to keep a record of the proceedings of the Board
and provide any other duties required by the Board. The Board may
elect a person who is not a member of the Board as secretary.
(c) The board may use the staff of the State Treasurer, employ personnel and contract with any person or entity needed to perform
the tasks related to operating the Consolidated Fund.
(d) The Board shall retain an internal auditor to report
directly to the Board and shall fix his or her compensation. As a
minimum qualification, the internal auditor shall be a certified
public accountant with at least three years' experience as an
auditor. The Internal Auditor shall develop an internal audit
plan, with Board approval, for the testing of procedures, internal
controls and the security of transactions.
(e) The Board shall retain one employee with a chartered
financial analyst designation or an employee who is a certified
treasury manager.
(f) Each director shall give a separate fiduciary or surety
bond from a surety company qualified to do business within this
state in a penalty amount of one million dollars for the faithful
performance of his or her duties as a director. The Board shall
purchase a blanket bond for the faithful performance of its duties
in the amount of fifty million dollars or in an amount equivalent
to one percent of the assets under management, whichever is
greater. The amount of the blanket bond is in addition to the one
million dollar individual bond required of each director by the
provisions of this section. The Board may require a fiduciary or
surety bond from a surety company qualified to do business in this state for any person who has charge of, or access to, any
securities, funds or other moneys held by the Board and the amount
of the fiduciary or surety bond are fixed by the Board. The
premiums payable on all fiduciary or surety bonds are expenses of
the Board.
(g) The Directors, employees of the Board and employees of the
State Treasurer performing work for or on behalf of the Board are
not liable personally, either jointly or severally, for any debt or
obligation created by the Board: Provided, That the Directors and
employees of the Board are liable for acts of misfeasance or gross
negligence.
(h) The Board is exempt from the provisions of article three,
chapter five-a, and sections seven and eleven, article three,
chapter twelve of this code. However, the Board is subject to the
purchasing policies and procedures of the State Treasurer's Office.
§12-6C-8. Administration of Consolidated Fund.
(a) In the administration of the Consolidated Fund continued
by this article, the Board may:
(1) Purchase, retain, hold, transfer and exchange and sell, at
public or private sale, the whole or any part of the Fund or pools
upon any terms and conditions it considers advisable;
(2) Invest and reinvest the fund and pools or any part thereof
in fixed income securities as provided in this article;
(3) Carry the securities and other property held in trust
either in the name of the Board or in the name of its nominee;
(4) Vote, in person or by proxy, all securities held; join in
or dissent from and oppose the reorganization, recapitalization,
consolidation, merger, liquidation or sale of corporations or
property; exchange securities for other securities issued in
connection with or resulting from any transaction; pay any
assessment or expense which the Board considers advisable for the
protection of its interest as holder of the securities; exercise
any option appurtenant to any securities for the conversion of any
securities into other securities; and exercise or sell any rights
issued upon or with respect to the securities of any corporation,
all upon terms the Board considers advisable;
(5) Prosecute, defend, compromise, arbitrate or otherwise
adjust or settle claims in favor of or against the board or a
director;
(6) Employ and pay from the Fund any investment advisors,
brokers, counsel, managers and any other assistants and agents the
Board considers advisable;
(7) Develop, implement and modify an asset allocation plan and
investment policy for each fund or pool; and
(8) Create a local government investment pool, a program to
purchase certificates of deposit from West Virginia financial institutions that are state depositories and any funds, pools or
participant accounts needed.
(b) All income and earnings are free from anticipation,
alienation, assignment or pledge by, and free from attachment,
execution, appropriation or control by or on behalf of, any and all
creditors of any beneficiary by any proceeding at law, in equity,
in bankruptcy or insolvency.
(c) The Board shall render an annual accounting not more than
one hundred twenty days following the close of the fiscal year.
§12-6C-9. Asset allocation; investment policies, authorized
investments; restrictions.
(a) The Board shall develop, adopt, review or modify an asset
allocation plan for the Consolidated Fund at each annual board
meeting.
(b) The Board shall adopt, review, modify or cancel the
investment policy of each fund or pool created at each annual board
meeting. For each participant directed account authorized by the
State Treasurer, staff of the Board shall develop an investment
policy for the account and create the requested account. The Board
shall review all existing participant directed accounts and
investment policies at its annual meeting for modification.
(c) The Board shall consider the following when adopting,
reviewing, modifying or canceling investment policies:
(1) Preservation of capital;
(2) Risk tolerance;
(3) Credit standards;
(4) Diversification;
(5) Rate of return;
(6) Stability and turnover;
(7) Liquidity;
(8) Reasonable costs and fees;
(9) Permissible investments;
(10) Maturity ranges;
(11) Internal controls;
(12) Safekeeping and custody;
(13) Valuation methodologies;
(14) Calculation of earnings and yields;
(15) Performance benchmarks and evaluation; and
(16) Reporting.
(d) No security may be purchased by the Board unless the type
of security is on a list approved at a board meeting. The Board
shall review the list at its annual meeting.
(e) Notwithstanding the restrictions which are otherwise
provided by law with respect to the investment of funds, the Board
and all participants, now and in the future, may invest funds in
these securities:
(1) Obligations of, or obligations that are insured as to
principal and interest by, the United States of America or any
agency or corporation thereof and obligations and securities of the
United States sponsored enterprises, including, without limitation:
(i) United States Treasury;
(ii) Export-Import Bank of the United States;
(iii) Farmers Home Administration;
(iv) Federal Farm Credit Banks;
(v) Federal Home Loan Banks;
(vi) Federal Home Loan Mortgage Corporation;
(vii) Federal Land Banks;
(viii) Government National Mortgage Association;
(ix) Merchant Marine bonds; and
(x) Tennessee Valley Authority Obligations.
(2) Obligations of the Federal National Mortgage Association;
(3) Commercial paper with one of the two highest commercial
paper credit ratings by a nationally recognized investment rating
firm;
(4) Corporate debt rated in one of the six highest rating
categories by a nationally recognized rating agency;
(5) State and local government, or any instrumentality or
agency thereof, securities with one of the three highest ratings by
a nationally recognized rating agency;
(6) Repurchase agreements involving the purchase of United
States Treasury securities and repurchase agreements fully
collateralized by obligations of the United States government or
its agencies or instrumentalities;
(7) Reverse repurchase agreements involving the purchase of
United States Treasury securities and reverse repurchase agreements
fully collateralized by obligations of the United States government
or its agencies or instrumentalities;
(8) Asset-backed securities rated in the highest category by
a nationally recognized rating agency, but excluding mortgage-
backed securities; and
(9) Investments in accordance with the Linked Deposit Program,
a program using financial institutions in West Virginia to obtain
certificates of deposit, loans approved by the Legislature and any
other programs authorized by the Legislature.
(f) In addition to the restrictions and conditions contained
in this section:
(1) At no time shall more than seventy-five percent of the
Consolidated Fund be invested in any bond, note, debenture,
commercial paper or other evidence of indebtedness of any private
corporation or association;
(2) At no time shall more than five percent of the
Consolidated Fund be invested in securities issued by a single private corporation or association; and
(3) At no time shall less than fifteen percent of the
Consolidated Fund be invested in any direct obligation of or
obligation guaranteed as to the payment of both principal and
interest by the United States of America.
§12-6C-10. Investment authority for Consolidated Fund transferred
to Board; exceptions.
Effective the first day of July, two thousand and five, all
duties vested by law in state spending units and the West Virginia
Investment Management Board relating to the Consolidated Fund are
transferred to the Board, including without limitation the
investment of moneys, and the acquisition, sale, exchange or
disposal of securities or any other investment: Provided, That
neither this section nor any other section of this article applies
to the "board of the school fund" and the "school fund" established
by section 4, article XII of the State Constitution: Provided,
however, That the municipal bond commission may make funds under
its control available to the board for investment.
§12-6C-11. Legislative findings; loans for industrial development;
availability of funds and interest rates.
(a) The Legislature finds and declares that the citizens of
the state benefit from the creation of jobs and businesses within
the state; that business and industrial development loan programs provide for economic growth and stimulation within the state; that
loans from pools established in the Consolidated Fund will assist
in providing the needed capital to assist business and industrial
development; and that time constraints relating to business and
industrial development projects prohibit duplicative review by both
the Board and West Virginia Economic Development Authority Board.
The Legislature further finds and declares that an investment in
the West Virginia Enterprise Capital Fund, LLC, of moneys in the
Consolidated Fund as hereinafter provided will assist in creating
jobs and businesses within the state and provide the needed risk
capital to assist business and industrial development. This
section is enacted in view of these findings.
(b) The West Virginia Board of Treasury Investments shall make
available, subject to a liquidity determination, in the form of a
revolving loan, up to one hundred seventy-five million dollars from
the Consolidated Fund to loan the West Virginia Economic
Development Authority for business or industrial development
projects authorized by section seven, article fifteen, chapter
thirty-one of this code and to consolidate existing loans
authorized to be made to the West Virginia Economic Development
Authority pursuant to this section and pursuant to section twenty,
article fifteen, chapter thirty-one of this code which authorizes
a one hundred seventy-five million dollar revolving loan and article eighteen-b, chapter thirty-one of this code which
authorizes a fifty million dollar investment pool: Provided, That
the West Virginia Economic Development Authority may not loan more
than fifteen million dollars for any one business or industrial
development project. The revolving loan authorized by this
subsection shall be secured by one note at a variable interest rate
equal to the twelve-month average of the board's yield on its cash
liquidity pool. The rate shall be set on the first day of July and
adjusted annually on the same date. The maximum annual adjustment
may not exceed one percent. Monthly payments made by the West
Virginia Economic Development Authority to the Board shall be
calculated on a one hundred twenty-month amortization. The
revolving loan is secured by a security interest that pledges and
assigns the cash proceeds of collateral from all loans under this
revolving loan pool. The West Virginia Economic Development
Authority may also pledge as collateral certain revenue streams
from other revolving loan pools which source of funds does not
originate from federal sources or from the Board.
(c) The outstanding principal balance of the revolving loan
from the Board to the West Virginia Economic Development Authority
may at no time exceed one hundred three percent of the aggregate
outstanding principal balance of the business and industrial loans
from the West Virginia Economic Development Authority to economic development projects funded from this revolving loan pool. The
independent audit of the West Virginia Economic Development
Authority financial records shall annually certify that one hundred
three-percent requirement.
(d) The interest rates and maturity dates on the loans made by
the West Virginia Economic Development Authority for business and
industrial development projects authorized by section seven,
article fifteen, chapter thirty-one of this code shall be at
competitive rates and maturities as determined by the West Virginia
Economic Development Authority Board.
(e) Any and all outstanding loans made by the West Virginia
Board of Treasury Investments, or any predecessor entity, to the
West Virginia Economic Development Authority are refundable by
proceeds of the revolving loan contained in this section and the
Board shall make no loans to the West Virginia Economic Development
Authority pursuant to section twenty, article fifteen, chapter
thirty-one of this code or article eighteen-b of said chapter.
(f) The Directors of the Board shall bear no fiduciary
responsibility with regard to any of the loans contemplated in this
section.
(g) Subject to cash availability, the Board shall make
available to the West Virginia Economic Development Authority, from
the Consolidated Fund, a nonresource loan in an amount up to twenty-five million dollars, for the purpose of the West Virginia
Economic Development Authority making a loan or loans from time to
time to the West Virginia Enterprise Advancement Corporation, an
affiliated nonprofit corporation of the West Virginia Economic
Development Authority. The respective loans authorized by this
subjection by the Board to the West Virginia Economic Development
Authority to the West Virginia Enterprise Advancement Corporation
shall each be evidenced by one note and shall each bear interest at
the rate of three percent per annum. The proceeds of any and all
loans made by the West Virginia Economic Development Authority to
the West Virginia Enterprise Advancement Corporation pursuant to
this subsection shall be invested by the West Virginia Enterprise
Corporation in the West Virginia Enterprise Capital Fund, LLC, the
manager of which is the West Virginia Enterprise Advancement
Corporation. The loan to West Virginia Economic Development
Authority authorized by this subsection shall be nonrevolving, and
advances under the loan shall be made at times and in amounts
requested or directed by the West Virginia Economic Development
Authority, upon reasonable notice to the Board. The loan
authorized by this subsection is not subject to or included in the
limitations set forth in subsection (b) of this section with
respect to the fifteen million-dollar limitation for any one
business or industrial development project and limitation of one hundred three percent of outstanding loans, and may not be included
in the revolving fund loan principal balance for purposes of
calculating the loan amortization in subsection (b) of this
section. The loan authorized by this subsection to the West
Virginia Economic Development Authority shall be classified by the
Board as a long-term fixed income investment, shall bear interest
on the outstanding principal balance of the loan at the rate of
three percent per annum payable annually on or before the thirtieth
day of June of each year, and the principal of which shall be
repaid no later than the thirtieth day of June, two thousand
twenty-two in annual installments due on or before the thirtieth
day of June of each year. The annual installments, which need not
be equal shall commence no later than the thirtieth day of June,
two thousand five, in annual principal amounts agreed upon between
the Board and the West Virginia Economic Development Authority.
The loan authorized by this subsection shall be nonrecourse and
shall be payable by the West Virginia Economic Development
Authority solely from amounts or returns received by the West
Virginia Economic Development Authority in respect of the loan
authorized by this subsection to the West Virginia Enterprise
Advancement Corporation, whether in the form of interest,
dividends, realized capital gains, return of capital or otherwise,
in all of which the Board shall have a security interest to secure repayment of the loan to the West Virginia Economic Development
Authority authorized by this subsection. Any and all loans from
the West Virginia Enterprise Advancement Corporation made pursuant
to this subsection shall also bear interest on the outstanding
principal balance of the loan at the rate of three percent per
annum payable annually on or before the thirtieth day of June of
each year, shall be nonrecourse and shall be payable by the West
Virginia Enterprise Advancement Corporation solely from amounts of
returns received by the West Virginia Enterprise Advancement
Corporation in respect to its investment in the West Virginia
Enterprise Capital Fund, LLC, whether in the form of interest,
dividends, realized capital gains, return of capital or otherwise,
in all of which that Board shall have a security interest to secure
repayment of the loan to the West Virginia Economic Development
Authority authorized by this subsection. In the event the amounts
or returns received by the West Virginia Enterprise Corporation in
respect to its investment in the West Virginia Enterprise Capital
Fund, LLC, are not adequate to pay when due the principal or
interest installments, or both, with respect to the loan authorized
by this subsection by the Board to the West Virginia Economic
Development Authority, the principal or interest, or both, as the
case may be, due on the loan made to the West Virginia Economic
Development Authority pursuant to this subsection shall be deferred and any and all past-due principal and interest payments shall
promptly be paid to the fullest extent possible upon receipt by the
West Virginia Enterprise Advancement Corporation of moneys in
respect to its investments in the West Virginia Enterprise Capital
Fund, LLC. The Directors or the Board shall bear no fiduciary
responsibility as provided in section thirteen of this article with
regard to the loan authorized by this subsection.
§12-6C-12. Securities handling.
In financial transactions whereby securities are purchased by
the Board under an agreement providing for the resale of the
securities to the original seller at a stated price, the Board
shall take physical possession of the securities, directly, by its
custodian bank or through a neutral third party: Provided, That an
agreement with a neutral third party may not waive liability for
the handling of the securities: Provided, however, That when the
board is unable to take possession, directly, by its custodian bank
or through a mutual third party, the Board may leave securities in
a segregated account with the original seller, provided the amount
of the securities with any one seller may not exceed one hundred
fifty million dollars.
§12-6C-13. Standard of care.
(a) The Uniform Prudent Investor Act, codified in article six-
c, chapter forty-four of this code, is the standard for any investments made under this article. Investments are further
subject to the following:
(1) The directors shall diversify fund investment so as to
minimize the risk of large losses unless, under the circumstances,
it is clearly prudent not to do so;
(2) The directors shall defray reasonable expenses of
investing and managing the Consolidated Fund by charging fees as
provided in this article; and
(3) The directors shall discharge their duties in accordance
with the documents and instruments consistent with the provisions
of this article.
(b) The duties of the directors apply only with respect to
those assets deposited with or otherwise held by the Board.
§12-6C-14. Existing investments.
The Investments Management Board shall transfer the cash,
securities and other investments of the Consolidated Fund it holds,
maintains or administers to the West Virginia Board of Treasury
investments on the first day of July, two thousand five, which will
lawfully vest the West Virginia Board of Treasury Investments with
ownership of all securities or other investments of the
Consolidated Fund.
§12-6C-15. Annual audits; financial statements; information.
(a) The Board shall have an annual financial and compliance audit of the assets, funds, pools and participant accounts managed
by the Board made by a certified public accounting firm which has
a minimum staff of ten certified public accountants and which is a
member of the American Institute of Certified Public Accountants
and, if doing business in West Virginia, a member of the West
Virginia Society of Certified Public Accountants. The Board shall
have financial and compliance audits of the Board's books, accounts
and records with respect to its receipts, disbursements,
investments, contracts and all other matters relating to its
financial operations completed annually.
(b) The Board shall produce monthly financial statements for
the assets managed by the Board and send them to each member of the
Board and provide copies as reasonably requested.
(c) Each quarter the Board shall deliver a report for the
prior quarter to the Council of Finance and Administration.
(d) The Board shall contract with an investment consulting or
a certified public accounting firm meeting the criteria set out in
subsection (a) of this section for an annual audit of the reported
returns of the assets managed by the Board.
(e) The Board shall prepare an annual report detailing all
fees charged by the Board under this article. The Board shall
furnish copies of the report to the Legislative Joint Committee on
Government and Finance.
(f) Unless specifically otherwise stated, copies of the
reports required in this section shall be furnished to the Board,
Governor, President of the Senate, Speaker of the House of
Delegates, Council of Finance and Administration, Legislative
Librarian and upon request to any legislator, legislative
committee, financial institution, member of the media and the
public.
(g) The Board shall provide any other information requested in
writing by the Council of Finance and Administration or any member
of the Legislature.
§12-6C-16. Reports to participants.
(a) On a monthly basis, the Board shall timely provide the
State Treasurer with information to enable the State Treasurer to
provide an itemized statement of a spending unit's or other
participant's account in the Consolidated Fund to each state
spending unit and any other entity investing moneys in the
Consolidated Fund. The statement shall include the beginning
balance, contributions, withdrawals, income distributed, change in
value and ending balance.
(b) The Board shall prepare annually, or more frequently if
determined necessary by the Board, a report of its operations and
the performance of the various funds, pools and participant
accounts administered by it. The Board shall furnish copies of the report to each participant, the President of the Senate, Speaker of
the House of Delegates, Legislative Auditor, and upon request to
any legislative committee, any legislator, any banking institution
or state or federal savings and loan association in this state and
any member of the news media. The Board shall also keep the
reports available for inspection by any citizen of this state.
§12-6C-17. Legal status of spending units continued.
Except as otherwise provided in this article, every state
spending unit shall retain all of the powers and shall exercise all
of the functions and duties vested in or imposed upon it by law, as
to any fund or account.
§12-6C-18. Authorization for loans by the Board.
(a) Any loan made from the Consolidated Fund by a predecessor
entity shall remain in existence and in accordance with the terms
and conditions of the loan.
(b) The Board shall continue the work of the Investment
Management Board in taking the steps necessary to increase the
liquidity of the Consolidated Fund to allow for any loans
authorized by the Legislature without increasing the risk of loss.
§12-6C-19. Creation of fee account and investment account; budget.
(a) The Board may charge fees, which are subtracted from the
total return on investments, for the reasonable and necessary
expenses incurred by the Board in rendering services. All fees collected shall be deposited in a special account in the State
Treasury created and designated the Board of Treasury Investments
Fee Fund. Expenditures from the Fund shall be for the purposes set
forth in this article and are not authorized from collections, but
are to be made only in accordance with appropriation by the
Legislature, in accordance with the provisions of article three,
chapter twelve of this code and upon the fulfillment of the
provisions set forth in article two, chapter eleven-b of this code:
Provided, That for the fiscal year ending the thirtieth day of
June, two thousand six, expenditures are authorized from
collections rather than pursuant to an appropriation by the
Legislature.
(b) There is created in the State Treasury a special account
designated the Board of Treasury Investments Investment Fund for
use in receiving funds for investment, disbursing funds from
investments and processing investment transactions.
(c) All fees dedicated, identified or readily identifiable to
an entity, fund, pool or participant account shall be charged to
that entity, fund, pool or participant account and all other fees
shall be charged as a percentage of assets under management. At
its annual meeting, the Board shall adopt a fee schedule and a
budget reflecting fee schedules.
§12-6C-20. Termination of board.
Pursuant to the provisions of article ten, chapter four of
this code, the West Virginia Board of Treasury Investments shall
continue to exist until the first day of July, two thousand ten.
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