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Introduced Version - Originating in Committee Senate Bill 563 History

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Key: Green = existing Code. Red = new code to be enacted


Senate Bill No. 563

(By Senator Craigo)

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[Originating in the Committee on Finance;


reported April 2, 1997.]

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A BILL to amend and reenact sections two, four, eight, nine-g and thirteen, article six, chapter twelve of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said article by adding thereto a new section, designated section eight-a, all relating to the West Virginia State board of investments; defining terms; designating the state treasurer as chairman of the board and custodian of the funds; authorizing the board to employ an internal auditor; requiring consolidated public retirement board to promulgate rules; requiring consolidated public retirement board to submit names of designated representatives to the board of investments; designated representatives to provide information to the board; requiring board to meet with committees representing beneficiaries; review of investment policy board meetings; confidentiality; executive sessions of the board; establishing the consolidated pension fund; repeal of trust fund; transfer of assets and funds.

Be it enacted by the Legislature of West Virginia:
That sections two, four, eight, nine-g, and thirteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that said article be further amended by adding thereto a new section, designated section eight-a, all to read as follows:
ARTICLE 6. WEST VIRGINIA STATE BOARD OF INVESTMENTS.

§12-6-2. Definitions.
As used in this article, unless a different meaning clearly appears from the context:
(1) "Board" means the West Virginia state board of investments;
(2) "Consolidated fund" means the investment fund managed by the board and established pursuant to subsection (a), section eight of this article;


(3) "Consolidated pension fund" means the investment fund managed by the board and established pursuant to subsection (a), section eight of this article.
(3)(4) "Local government funds" means the moneys of a political subdivision, including policemen's pension and relief funds, firemen's pension and relief funds and volunteer fire departments, transferred to the board for deposit;
(4)(5) "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;
(5)(6) "Securities" means all bonds, notes, debentures or other evidences of indebtedness;
(6)(7) "State funds" means all moneys of the state which may be lawfully invested except the "school fund" established by section four, article XII of the state constitution; and
(7) "West Virginia trust fund" means the entity created by the provisions of article six-b, chapter forty-four of this code.
(8) "Pension funds" means and includes the workers' compensation fund; the pneumoconiosis fund; the state teachers retirement system funds; the death disability and retirement fund for members of the division of public safety; the West Virginia state police retirement system; the judges retirement fund; the public employees retirement system funds; and any other retirement or pension funds and systems as may be hereafter established on behalf of public employees of this State or of its political subdivisions and administered by the State; or pension funds established on behalf of public employees of its political subdivisions and administered by the political subdivisions.
(9) "Beneficiaries" means those people entitled to benefits from the consolidated pension fund.
§12-6-4. Officers; executive secretary; term; organization; board staff; surety bonds for members and employees.

(a) The governor treasurer shall be the chairman of the board and the custodian of all funds, securities and assets held by the board. The board shall elect an executive secretary to serve for a term of six years. such election to be held at the board's first meeting after the first effective date of this article. Effective with any If a vacancy occurs in the position of executive secretary, the board shall appoint an executive secretary to serve at the will and pleasure of the board. which The executive secretary may not be a member of the board: Provided,
That the executive secretary shall have at least a bachelor's degree in either business administration or accounting in an accredited program and/or have at least five years' experience in investment management or securities markets, said the experience to have occurred within the ten years next preceding the date of appointment of the secretary: Provided, however, That the executive secretary may be paid a salary as determined by the board out of appropriations by the Legislature: Provided further, That the board treasurer shall appoint a staff to act for the board: And, Provided, further, That the board may employ an internal auditor who shall report directly to the board concerning all investment activities. The internal auditor shall be paid a salary as determined by the board out of appropriations of the Legislature.
(b) The board shall meet quarterly and may include in its bylaws procedures for the calling and holding of additional meetings.
(c) Each member of the board shall give a separate and additional fidelity bond from a surety company qualified to do business within this state in a penalty amount of two hundred fifty thousand dollars for the faithful performance of his or her duties as a member of the board. In addition, the board will purchase a blanket bond for the faithful performance of its duties in the amount of five million dollars excess of the two hundred fifty thousand dollar individual bond required of each member by the provisions of this section. The board may require a fidelity 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 such the fidelity bond shall be fixed by the board. The premiums payable on all fidelity bonds shall be an expense of the board.
(d) On or before the first day of July, one thousand nine hundred ninety-seven, the West Virginia consolidated public retirement board shall promulgate procedural rules requiring each pension system to designate an individual representative of that pension system and the West Virginia workers' compensation commission shall promulgate procedural rules by requiring the pneumoconiosis fund and the workers' compensation fund to designate an individual representative of their respective fund.
(e) On or before the first day of July, one thousand nine hundred ninety-seven, and annually thereafter on the first day of July, the consolidated public retirement board shall submit in writing to the board, the names of the five designated representatives of the pension systems, and the workers' compensation commission shall submit the names of the two representatives of its funds.
(f) Each designated representative shall provide to the board of investments his or her current address and shall annually update the information on or before the first day of July. The board shall provide notice of meetings of the board pursuant to subsection (g) of this section.
(g) Each designated representative shall submit in writing to the board on or before the first day of July, one thousand nine hundred ninety-seven, and annually thereafter on or before the same date, the names of no more than three persons comprising a committee representing the beneficiaries of that representative's participant plan.
(h) The board shall meet with each of the seven committees for the purpose of receiving input from the committees regarding the board's written investment policy and the need for the board to review or modify its policy. In reviewing the investment policy statement, the board shall receive each committee's stated objectives and policies regarding the risk tolerances and return expectations of each participant plan. The board may meet with all of the committees or any of them at its quarterly meeting or at any additional meetings for the same purpose.
(I) All meetings of the board shall be open to the designated representatives of the participant plans. The representatives are subject to any rules, guidelines, requirements and standards promulgated by the board. The representatives shall observe standards of decorum established by the board. The representatives are subject to the same code of conduct applicable to the board members and are subject to all the board's rules. The representatives are also subject to any requirements of confidentiality applicable to the members of the board. Each representative is liable for any act which he or she undertakes which violates any rule, statute governing ethical standards, confidentiality standards or other standard of conduct imposed upon the members of the board or the designated representatives. Any meeting of the board may be closed, upon adoption of a motion by any member, 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 beneficiaries.

§12-6-8. Investment funds established; management thereof.
(a) There is hereby established a special investment fund to be managed by the board and designated as the "consolidated fund".
(b) There is hereby established a special investment fund to be managed by the board and designated as the "consolidated pension fund" for the common investment of pension funds. All administrators, custodians or trustees of the various pension funds may make money available to the board of investments. Pension funds received by the board shall be deposited in the consolidated pension fund.
(b)(c) Each board, commission, department, official or agency charged with the administration of state funds is hereby authorized to may make moneys available to the board for investment.
(c)(d) Each political subdivision of this state through its treasurer or equivalent financial officer is hereby authorized to may enter into agreements with the board for the investment of moneys of the political subdivision. Any political subdivision may enter into an agreement with any state agency from which it receives funds to allow the funds to be transferred to their investment account with the state board of investments.
(d)(e) Moneys held in the various funds and accounts administered by the board shall be invested as permitted in section twelve of this article and subject to the restrictions contained in section ten of this article. The board shall maintain records of the deposits and withdrawals of each participant and the performance of the various funds and accounts. The board shall also establish such rules and regulations 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 minimum 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.
12-6-8a Transfers from the West Virginia Trust Fund.
(1) On the effective date of this article, the West Virginia trust fund created in article six-b, chapter forty-four of this code shall be repealed and the West Virginia trust fund shall deliver all the assets of the pension funds, workers' compensation fund and the pneumoconiosis fund to the board.
(2) The West Virginia trust fund shall transfer all funds to a special account of the state treasurer and shall transfer all computers and other necessary items of equipment associated with each position at the trust fund whose responsibilities and obligations shall be as of the effective date of this section performed by the state treasurer.
(3) The state treasurer may pay the expenses associated with the transfer of assets from the West Virginia trust fund to the special account.
§12-6-9g. Transfer of loans to consolidated fund.
The Legislature hereby finds and declares that with the establishment of the West Virginia trust fund as provided in article six-b, chapter forty-four of this code, and the transfer of the retirement systems' and workers' compensation and pneumoconiosis funds' investments to the West Virginia trust fund, those mortgage and economic development loans which the board determines cannot be actively traded and which are currently held by the retirement systems and workers' compensation and pneumoconiosis funds should remain as investments of the state.
Effective on the thirtieth day of June, one thousand nine hundred ninety-six, the board of investments is hereby directed to purchase the workers' compensation loan pool, public employees retirement system loan pool and teachers retirement loan pool. The amount to be paid shall be the loan's current amortized cost value plus any accrued interest as of the purchase date. The purchased loans shall then be recorded in the consolidated fund's state loan pool.
§12-6-13. Board as sole 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 the West Virginia trust fund, is the sole entity for the investment of the consolidated pension plan funds in accordance with article six-b, chapter forty-four of this code: Provided, however, 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 further 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.
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FINANCE COMMITTEE AMENDMENTS

On page four, section four, line fourteen, by striking out the word "treasurer" and inserting in lieu thereof the word "governor";
And,
On page five, section four, line nine, by striking out the word "treasurer" and inserting in lieu thereof the word "board".


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