Introduced Version
House Bill 4174 History
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Key: Green = existing Code. Red = new code to be enacted
H. B. 4174
(By Delegates Martin, Klempa, Barker,
Cann, Ferro, Guthrie, Kominar, Shook,
Stephens, Swartzmiller and J. Miller)
[Introduced January 26, 2010; referred to the
Committee on Government Organization then Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §31-15D-1, §31-15D-2,
§31-15D-3, §31-15D-4, §31-15D-5, §31-15D-6, §31-15D-7,
§31-15D-8, §31-15D-9 and §31-15D-10, all relating to
establishment of the West Virginia Transportation Finance
Commission; creating a governing board of the commission;
setting forth appointment, terms, qualifications, compensation
and expenses of board members; setting forth the powers and
duties of the commission; creating the West Virginia
Transportation Finance Commission Fund; setting forth
requirements for deposits, contributions, appropriations,
capitalization, disbursements, subaccounts, loans and other
financial assistance from the fund; setting forth requirements
for applications for loans and other financial assistance,
approval of qualified projects, finance agreements, payments
and repayments of loans and withholding of defaulted payments from funds allotted or payable to a defaulting government
unit; setting forth the rights of qualified borrowers from the
fund; requiring annual reports to the Governor, the
Legislature and appropriate federal agencies; requiring the
commission to perform annual audits; requiring the Department
of Transportation to assist the board; and making legislative
findings and defining terms.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §31-15D-1, §31-15D-2,
§31-15D-3, §31-15D-4, §31-15D-5, §31-15D-6, §31-15D-7, §31-15D-8,
§31-15D-9 and §31-15D-10, all to read as follows:
ARTICLE 15D. WEST VIRGINIA TRANSPORTATION FINANCE COMMISSION.
§31-15D-1. Legislative findings.
The West Virginia Legislature finds that:
(1) Adequate transportation facilities are an important
element in the ability of the state to provide for the health and
welfare of its citizens and the continuing economic growth and
development that will provide jobs for the citizens of West
Virginia;
(2) Traditional transportation financing methods in West
Virginia cannot generate the resources necessary to fund the cost
of transportation facilities which are required for the continued
economic viability and future economic expansion;
(3) The State of West Virginia has the ability to provide
alternative methods of financing highway and transportation
projects;
(4) Loans and other financial assistance to government units
can play an important part in meeting transportation needs and this
assistance is in the public interest and for the public benefit;
and
(5) This article provides an instrumentality to assist
government units in constructing and improving highway and other
transportation facilities by providing loans and other financial
assistance.
§31-15D-2. Definitions.
For the purposes of this article the following terms have the
meanings ascribed to them unless a different meaning clearly
appears from the context:
(1) "Commission" means the West Virginia Transportation
Finance Commission created in section three of this article.
(2) "Board" means the governing board of the commission
established in section three of this article.
(3) "Bond" means a revenue bond, note, or other evidence of
indebtedness.
(4) "Department of Transportation" means the Department of
Transportation established in section one, article two, chapter
five-f of this code or any successor to all, or any substantial part, of its powers and duties.
(5) "Division of Highways" means the Division of Highways
established in section one, article two-a, chapter seventeen of
this code or any successor to all, or any substantial part, of its
powers and duties.
(6) "Eligible costs" means, as applied to a qualified project
to be financed, in whole or in part, from funds provided from
federal accounts, the costs that are permitted under applicable
federal laws, requirements, procedures and guidelines in regard to
establishing, operating and providing assistance from the
commission. As applied to a qualified project to be financed from
other funds otherwise provided by this article, eligible costs
include the costs of preliminary engineering, traffic and revenue
studies, environmental studies, rights-of-way, legal and financial
services associated with the development of a qualified project,
construction, construction management, facilities and other costs
necessary for the start up of the qualified project. As applied to
any qualified project to be financed from the state Road Fund,
eligible projects costs are limited to capital expenditures for
highway facilities.
(7) "Eligible project" means any public transportation project
to acquire, plan, engineer, design, construct, reconstruct,
improve, repair, restore, maintain or rehabilitate any highway,
road, bridge, tunnel, public transit facility, aviation facility, rail facility, port or public port as defined in section five,
article sixteen-b, chapter seventeen of this code; a transportation
project eligible for financing or aid under any federal or state
program; or any transportation project used for the transportation
of people or goods within this state and all structures, equipment,
facilities, improvements, appurtenances or activities necessary or
incident thereto.
(8) "Federal accounts" means federal highway funds.
(9) "Financing agreement" means an agreement entered into
between the commission and a qualified borrower pertaining to or
evidencing a loan or other financial assistance. This agreement
may contain, in addition to financial terms, provisions relating to
the regulation and supervision of a qualified project or other
provisions as the board may determine. The term includes, without
limitation, a loan agreement, trust agreement, trust indenture,
security agreement, reimbursement agreement, guarantee agreement,
bond or note, ordinance or resolution, or similar instrument.
(10) "Federal agency" means the United States of America and
any department, corporation, agency or instrumentality created,
designated or established by the United States of America.
(11) "Fund" means the West Virginia Transportation Finance
Commission Fund established in section five of this article.
(12) "Government unit" means a municipal corporation, county,
port, port authority, transit authority and any other state or local authority, board or other political subdivision of the state
which may construct, own or operate a qualified project.
(13) "Loan" means an obligation subject to repayment which is
provided by the commission to a qualified borrower for all or a
part of the cost of a qualified project. A loan may be disbursed
in anticipation of reimbursement for or direct payment of eligible
costs of a qualified project.
(14) "Loan obligation" means a bond, note or other evidence of
obligation issued by a qualified borrower.
(15) "Other financial assistance" means, but is not limited
to, credit enhancement, capital or debt reserves for bonds or debt
instrument financing, interest rate subsidies, provision of letters
of credit and credit instruments, provisions of bond or other debt
financing instrument security and other lawful forms of financing
and methods of leveraging funds that are approved by the board and
as allowed by law.
(16) "Qualified borrower" means any government unit which is
authorized to construct, operate or own a qualified project.
(17) "Qualified project" means an eligible project that is
compatible with the state transportation plan and with the local
comprehensive plan or plans, has been approved by the Department of
Transportation and has been selected by the commission to receive
a loan or other financial assistance from the commission to defray
eligible costs.
§31-15D-3. West Virginia Transportation Finance Commission
established; composition and appointment of
commission board; compensation and expenses of
board members.
(a) The West Virginia Transportation Finance Commission is
hereby created as a body corporate and politic, constituting a
public corporation and government instrumentality of the state.
(b) The governing body of the commission shall be a board
consisting of seven voting members as follows:
(1) The Secretary of the Department of Transportation or his
or her designee; and
(2) Six members appointed by the Governor with the advice and
consent of the Senate who are citizens of this state and meet the
requirements and qualifications prescribed in subsections (c) and
(d) of this section. No more than four members appointed by the
Governor may be of the same political party. Appointments shall be
made in a manner that each congressional district is represented
and so that no less than one member and not more than three members
of the board reside in any one congressional district.
(c) (1) The six members appointed by the Governor pursuant to
subdivision (2), subsection (b) of this section shall be appointed
by the Governor for terms that begin July 1, 2010 and expire as
follows:
(A) Two members shall be appointed for a term ending June 30, 2012;
(B) Two members shall be appointed for a term ending June 30,
2013; and
(C) Two members shall be appointed for a term ending June 30,
2014.
(2) Except for appointments to fill vacancies, each subsequent
appointment shall be for a term ending June 30 of the fourth year
following the year the preceding term expired. In the event a
vacancy occurs, it shall be filled by appointment for the unexpired
term. A member whose term has expired shall continue in office
until a successor has been duly appointed and qualified.
(3) No member appointed by the Governor pursuant to
subdivision (2), subsection (b) of this section may be a candidate
for or hold elected office. These members may be reappointed for
no more than two full terms.
(d) Each of the members of the board appointed by the Governor
pursuant to subdivision (2), subsection (b) of this section shall
be appointed based upon his or her demonstrated knowledge and
experience to effectively accomplish the purposes of this article
and shall meet the following qualifications:
(1) At least two shall be persons who have demonstrated
knowledge and experience in banking and financial services in the
private sector;
(2) At least one shall be a person who has demonstrated knowledge and experience in public finance of government units in
the state; and
(3) At least two shall be persons with demonstrated knowledge
and experience in the construction and administration of eligible
projects.
(e) The Secretary of the Department of Transportation shall
serve as chairperson. The board shall hold meetings at the request
of the chairperson or at the request of at least three of the
members of the board, but no less frequently than once every month.
The chairperson shall determine the date and time of each meeting.
(f) The board shall appoint a vice chairperson and a secretary
from among the members. Four members of the board shall constitute
a quorum and the affirmative vote of at least a majority of those
members present is necessary for any action taken by vote of the
board, however, approval or rejection of an application for a loan
or other financial assistance shall be made by majority vote of the
full membership of the board.
(g) Members of the board are not entitled to compensation for
services performed as members but are entitled to reimbursement
for all reasonable and necessary expenses actually incurred in the
performance of their duties.
§31-15D-4. Powers and duties of the West Virginia Transportation
Finance Commission.
(a) In addition to the powers contained elsewhere in this article, the commission, by action of the board, has all power
necessary, useful or appropriate to fund, operate and administer
the commission and to perform its other functions including, but
not limited to, the power to:
(1) Have perpetual succession;
(2) Adopt, promulgate, amend and repeal bylaws not
inconsistent with this article for the administration of its
affairs and the implementation of its functions;
(3) Sue and be sued in its own name;
(4) Adopt a seal and alter it at its pleasure, although the
failure to affix the seal does not affect the validity of an
instrument executed on behalf of the commission;
(5) Make loans to qualified borrowers to finance the eligible
costs of qualified projects and to acquire, hold and sell loan
obligations at prices and in a manner as the board determines
advisable;
(6) Provide qualified borrowers with other financial
assistance necessary to defray the eligible costs of a qualified
project;
(7) Enter into contracts, arrangements and agreements with
qualified borrowers and other persons and to execute and deliver
all financing agreements and other instruments necessary or
convenient to the exercise of the powers granted in this article;
(8) Enter into agreements with a department, agency or instrumentality of the United States, this state or another state
for the purpose of planning and providing for the financing of
qualified projects;
(9) Establish policies and procedures for the making and
administering of loans and other financial assistance;
(10) Establish fiscal controls and accounting procedures to
ensure proper accounting and reporting by the commission and
government units and to ensure proper oversight of all financing
agreements, loans, loan obligations and other financial assistance
established or issued for financial assistance of a qualified
project throughout the course of the financial assistance;
(11) Acquire by purchase, lease, donation or other lawful
means and to sell, convey, pledge, lease, exchange, transfer and
dispose of all or any part of its properties or assets of every
kind and character or any interest in it to further the public
purpose of the commission;
(12) Expend funds to obtain accounting, management, legal,
financial consulting and other professional services necessary to
the operations of the commission;
(13) Expend funds credited to the commission as the board
determines necessary for the costs of administering the operations
of the commission that are approved by the Department of
Transportation;
(14) Establish advisory committees as the board determines appropriate, which may include individuals from the private sector
with banking and financial expertise or transportation
infrastructure expertise;
(15) Procure insurance against losses in connection with its
property, assets or activities, including insurance against
liability for its acts or the acts of its employees or agents or to
establish cash reserves to enable it to act as a self-insurer
against any and all such losses;
(16) Collect fees and charges in connection with its loans and
other financial assistance;
(17) Apply for, receive and accept from any source, aid,
grants and contributions of money, property, labor or other things
of value to be used to carry out the purposes of this article
subject to the conditions upon which the aid, grants or
contributions are made;
(18) Enter into contracts or agreements for the servicing and
processing of financial agreements; and
(19) Do all other things necessary or convenient to exercise
the powers granted or reasonably implied by this article.
(b) The commission is not, nor is it authorized or empowered
to be or to constitute, a bank or trust company within the
jurisdiction or under the control of the state or any agency
thereof or the comptroller of the currency or the Treasury
Department of the United States or a bank, banker or dealer in securities within the meaning of, or subject to the provisions of,
any securities, securities exchange or securities dealers' law of
the United States or of the State of West Virginia.
§31-15D-5. West Virginia Transportation Finance Commission Fund;
deposits in fund; disbursements to provide loans and
other assistance; subaccounts.
(a) There is hereby established in the state Treasury a
special revenue account to be known as the West Virginia
Transportation Finance Commission Fund that shall be governed,
administered and accounted for by the board for the purposes set
forth in section four of this article. All proceeds and revenues
of the commission shall be deposited or credited to the fund.
(b) Funds from the following resources may be deposited to the
fund and used to capitalize the commission:
(1) Funds appropriated to the fund by the Legislature;
(2) Notwithstanding any provisions of article three, chapter
seventeen of this code to the contrary, annual contributions by the
Division of Highways or the Department of Transportation of funds
for the construction and maintenance of state highways, not to
exceed $10 million. These funds may be used to match federal
capitalization grants to the commission and provide capital for the
state accounts of the commission;
(3) Federal funds that may be made available to the state for
the commission;
(4) Contributions and donations from public authorities,
government units and private entities;
(5) All moneys paid or credited to the commission, by contract
or otherwise; payments of principal and interest on loans or other
financial assistance made from the commission and interest earnings
which may accrue from the investment or reinvestment of the
commission moneys; and
(6) Other lawful sources as determined appropriate by the
board.
(c) Earnings on balances in the federal accounts must be
credited and invested according to federal law. Earnings on state
accounts must be credited to the account that generates the
earnings. The commission may establish accounts and subaccounts
within the fund as considered desirable to effectuate the purposes
of this article or to meet the requirements of any state or federal
programs.
(d) For the necessary and convenient administration of the
account, the board shall direct the State Treasurer to establish
accounts and subaccounts within the fund account necessary to meet
any applicable federal law requirements or as the commission
determines necessary or desirable in order to implement the
provisions of this article.
(e) The commission shall comply will all federal and state
laws and regulations prohibiting the commingling of funds deposited in the account. Amounts in the fund that are prohibited from being
commingled with other amounts in the fund shall be segregated and
administered separate and apart from other amounts in the fund and
may not be transferred to any other account.
§31-15D-6. Requirements for loans and other financial assistance.
(a) Subject to the provisions of this article, the commission
may provide loans and other financial assistance to a government
unit to pay for all or a portion of the eligible cost of a
qualified project. The term of the loan or other financial
assistance may not exceed thirty years. The commission shall
require the government unit to enter into an agreement to evidence
all of the terms and conditions of the loan obligation. The
commission may require that the government unit obtain or provide
matching funds for the qualified project from sources other than
the loan from the commission. The board shall determine the form
and content of loan applications, financing agreements and loan
obligations, including the term and rate or rates of interest on a
financing agreement. The terms and conditions of a loan or other
financial assistance from a federal account shall comply with
applicable federal requirements.
(b) To implement and carry out the intent of this article, the
board shall propose rules for legislative approval in accordance
with article three, chapter twenty-nine-a of this code to develop
comprehensive uniform guidelines for use by the board in evaluating any request by a government unit for funding assistance from the
commission. The guidelines shall include, but are not limited to,
the following criteria:
(1) The feasibility of the project and the amount and degree
of risk assumed by the commission;
(2) The local support of the project, expressed by resolutions
of the governing bodies in the areas in which the project will be
located, and the financial or in-kind contributions to the project;
(3) Whether the project is consistent with the adopted
transportation plan of the appropriate planning organization,
including any metropolitan planning organization whose jurisdiction
includes the location of the project, and the transportation plan
of the division;
(4) Whether the existing transportation infrastructure of the
area served by the project is adversely affected by the project;
(5) The economic development benefits of the project;
(6) The degree to which the project will correct deficiencies
or will supplement the existing transportation infrastructure of
the area served by the project;
(7) The cost effectiveness of the project as compared with
alternatives which achieve substantially the same public
transportation or economic development benefits;
(8) The availability of alternative sources of funding which
could finance all or a part of the project and the need for the assistance of the commission to finance the project or for the
applicant to attract other sources of funding;
(9) The applicant's ability to operate and maintain the
transportation facilities if the project is approved;
(10) The degree to which the project achieves other state or
regional planning goals;
(11) The estimated date upon which the project could commence
if the loan or other financial assistance were available and the
estimated completion date of the project; and
(12) Whether the governing bodies of the county or the
incorporated municipality in which the project is to be located
provides to the commission a resolution which makes a finding that
the project is essential to or necessary for the transportation
needs of the public.
(c) The board may promulgate emergency rules pursuant to the
provisions of section fifteen, article three, chapter twenty-nine-a
of this code to develop and establish guidelines pursuant to this
subsection.
(d) The board shall create a preliminary application form
which shall be used by all government units requesting funding
assistance from the commission for a qualified project. The
preliminary application form shall contain all information required
by all state agencies that will be required to issue permits and/or
certificates regarding the project. The preliminary application shall require the applicant to set forth the type and proposed
location of the project; the estimated total cost of the project;
the amount of funding assistance required and the specific uses of
the funding; the proposed method of repayment of any loans or other
financial assistance for the project provided by the commission;
other sources of funding available or potentially available for the
project; information demonstrating the need for the project and
that the proposed funding of the project is the most economically
feasible and viable alternative to completing the project; and such
other information as the board considers necessary to enable it to
evaluate the project financing, in terms of the kind, amount and
source of funding, and to otherwise carry out the intent of this
article.
§31-15D-7. Finance agreements; repayment of loans.
(a) Qualified borrowers are authorized to obtain loans or
other financial assistance from the commission through financing
agreements. Qualified borrowers entering into financing agreements
and issuing loan obligations to the commission may perform any
acts, take any action, adopt any proceedings and make and carry out
any contracts or agreements with the commission as may be agreed to
by the commission and the qualified borrower for the purposes of
carrying out the provisions contemplated by this article.
(b) Each loan or other financial assistance made or provided
by the commission shall be evidenced by a written finance agreement between the commission and the qualified borrower to which the loan
or other financial assistance shall be made or provided, setting
forth the terms of the loan or other financial assistance, which
agreement shall include, without limitation and to the extent
applicable, the following provisions:
(1) The estimated cost of the qualified project, the amount of
the loan or the nature of the financial assistance and, in the case
of a loan, the terms of repayment and the security therefor, if
any;
(2) The specific purposes for which the loan proceeds shall be
expended or the benefits to accrue from the financial assistance
and the conditions and procedure for disbursing loan proceeds;
(3) The duties and obligations imposed upon the government
unit regarding the acquisition, construction, improvement or
operation of the qualified project;
(4) The agreement of the governmental unit to the withholding
of payments pursuant to the finance agreement that are owed by the
governmental unit to the commission which are in default in
accordance with the provisions of section eight of this article;
and
(5) The agreement of the governmental unit to comply with all
applicable federal and state laws and all rules and regulations
issued or imposed by the commission or other state, federal or
local bodies regarding the acquisition, construction, improvement or operation of the qualified project and granting the commission
the right to appoint a receiver for the qualified project if the
governmental unit should default on any terms of the agreement.
(c) In addition to the authorizations contained in this
article, all other statutes or provisions permitting qualified
borrowers to borrow money and issue obligations may be utilized by
a qualified borrower in obtaining a loan or other financial
assistance from the commission to the extent determined necessary
or useful by the qualified borrower in connection with any
financing agreement and the issuance, securing or sale of loan
obligations to the commission.
(d) A qualified borrower may receive, apply, pledge, assign
and grant a security interest in project revenues or any other
revenues of the governmental unit which may otherwise be lawfully
pledged or assigned as security, to secure its obligations as
provided in this article and may fix, revise, charge and collect
fees, rates, rent, assessments and other charges of general or
special application for the operation or services of a qualified
project, the system of which it is a part, and any other revenue
producing facilities from which the qualified borrower derives
project revenues to meet its obligations under a financing
agreement or to provide for the construction and improving of a
qualified project.
(e) Any resolution of the commission approving loan or other financial assistance shall include a finding and determination that
the requirements of this section have been met.
§31-15D-8. Interception and withholding of defaulted payments
from funds allotted or payable to a defaulting
government unit.
(a) Any payment owed by a government unit to the commission
pursuant to a financing agreement that is in default may be
intercepted and withheld from any funds administered or in the
custody of the Treasurer which are owned by, allotted or payable to
the government unit in default. In the event of default by a
government unit upon any payment due, the commission may notify the
Treasurer of the default. Upon receipt of a notification of
default, the Treasurer shall withhold the amount of the payment in
default and payable to the commission from any funds administered
or in the custody of the Treasurer which are owned by, allotted or
payable to the government unit in default. The amount withheld
shall be remitted by the Treasurer to the commission and applied
toward the payment in default.
(b) Withholdings or interceptions pursuant to this section may
not be made from funds owned by, allotted or payable to a
government unit in default which are restricted to use for a
particular purpose by law or which violate the terms of any
agreement governing the funds or which would be in violation of the
laws of this state or of the United States.
(c) The commission and the Treasurer may enter into an
agreement to effect the provisions of this section.
§31-15D-9. Annual reports; audits.
On October 1 of each year, the commission shall submit an
annual report of its activities for the preceding fiscal year to
the Governor and the Legislature. Each such report shall set forth
a complete operating and financial statement of the commission's
operation during the preceding fiscal year. The commission shall
also submit an annual report to the appropriate federal agencies in
accordance with the requirements of the federal agencies. The
commission shall cause an audit of its books and records to be made
by an independent certified public accountant for each fiscal year.
§31-15D-10. Department of Transportation assistance to the
commission.
The Department of Transportation shall provide staff and
assist the commission in the administration of the program and the
performance of the commission under this article. In providing
this assistance, the department may:
(1) Assist in the formulation, establishment and structuring
of programs undertaken by the commission pursuant to this article;
(2) Provide government units with information as to the
commission and the procedures for obtaining the assistance intended
by this article;
(3) Assist government units in making applications to state and federal agencies, including the commission, as may be necessary
or helpful in order to avail themselves of this program;
(4) Assist the commission in analyzing and evaluating requests
for assistance pursuant to this article;
(5) Assist in the structuring and negotiating of financing
agreements;
(6) Administer the fund, including any accounts in it;
(7) Administer the commission's accounts, loans and other
financial assistance, including monitoring compliance by government
units or private entities with any rules, regulations or other
requirements of the commission with respect to the programs and
compliance with covenants and agreements made by the government
units or private entities with respect to a financing agreement;
and
(8) Provide other assistance and perform other duties as may
be requested or directed by the commission.
NOTE: The purpose of this bill is to create the West Virginia
Transportation Finance Commission and its governing board. The
bill sets forth the appointment, terms, qualifications,
compensation and expenses of its members and the powers and duties
of the commission. The bill creates the West Virginia
Transportation Finance Commission Fund and sets forth the
requirements for deposits, contributions, appropriations,
capitalization, disbursements, subaccounts, loans and other
financial assistance from the fund. The bill also sets forth
requirements for applications for loans and other financial
assistance, approval of qualified projects, finance agreements,
payments
and repayments of loans and withholding of defaulted
payments from funds allotted or payable to a defaulting government unit. The bill identifies the rights of qualified borrowers from
the fund. The bill further requires annual reports to Governor,
the Legislature and appropriate federal agencies and requires
annual audits. The bill requires the Department of Transportation
to assist the commission. The bill also makes legislative findings
and defining terms.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.