Senate Bill No. 123
(By Senators Tomblin (Mr. President) and Sprouse
By Request of the Executive)
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[Introduced February 15, 2001; referred to the Select
Committee on Economic Development; and then to the Committee on
Finance.]
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A BILL to amend and reenact sections four and six, article fifteen,
chapter thirty-one 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
seven-a, all relating to the economic development authority;
definitions; corporate powers; establishing a new markets
fund; creating new markets tax credits; and rulemaking.
Be it enacted by the Legislature of West Virginia:
That sections four and six, article fifteen, chapter
thirty-one 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 seven-a, all to read as follows:
ARTICLE 15. WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY.
§31-15-4. Definitions.
Unless the context clearly indicates otherwise, as used in this article:
(a) "Authority" means the West Virginia economic development
authority;
(b) "Board" means the governing body of the authority;
(c) "Board of investments" means the
board of investments
investment management board established by article six, chapter
twelve of this code;
(d) "Bonds" means bonds or other debt instruments of the
authority issued under this article, whether the interest thereon
is taxable or tax-exempt for federal income tax purposes;
(e) "Business plan" means a document detailing the sales,
production and distribution plans of an enterprise, together with
the expenditures necessary to carry out those plans (including
budget and cash flow projections) on an annual basis, and an
employment plan setting forth steps to be taken by the enterprise
to retain jobs or reduce unemployment in this state;
(f) "Costs of establishing an industrial development project"
means the cost of acquiring existing facilities, cost of machinery,
cost of equipment and fixtures, the cost of construction, including
without limitation, cost of improvements, repairs, and renovations,
costs of all lands, water areas, property rights and easements,
financing charges, interest prior to and during construction, cost
of architectural, engineering, legal and financial or other
consulting services, plans, site assessments, site remediation
costs, specifications and surveys, estimates of costs and any other
expenses necessary or incident to determining the feasibility or practicability of any project, together with such other costs and
expenses as may be necessary or incidental to the financing and the
construction or acquisition of the project and the placing of the
same in operation;
(g) "County" means any county of this state;
(h) "Enterprise" means an entity which is or proposes to be
engaged in this state in any business activity for profit. The
entity may be owned, operated, controlled or under the management
of a person, partnership, corporation, trust, community-based
development organization or council, local commerce group, employee
stock ownership plan, pension or profit-sharing plan, a group of
participating employees who desire to own an entity which does not
presently exist, or any similar entity or organization;
(i) "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;
(j) "Financing plan" means a plan designed to meet the
financing needs of an enterprise as reflected in the business plan;
(k) "Fund" means the economic development fund provided for in
section twenty-three of this article;
(l) "Government" means state and federal government, and any
political subdivision, agency or instrumentality thereof, corporate
or otherwise;
(m) "Industrial development agency" means any incorporated
organization, foundation, association or agency to whose members or
shareholders no profit inures, which has as its primary function the promotion, encouragement and development of industrial,
commercial, manufacturing and tourist enterprises or projects in
this state;
(n) "Insurance fund" means the insurance fund created in this
article;
(o) "Loan" means an extension of financing by the authority to
an industrial development agency or an enterprise, including, but
not limited to, a loan, a lease or an installment sale;
(p) "Municipality" means any city or town in this state;
(q) "New markets fund" means the new markets fund created in
this article;
(r) "New markets tax credits" means the new markets tax
credits created in this article;
(q) (s) "Notes" means any notes, including commercial paper,
of the authority issued under this article whether the interest
thereon is taxable or tax-exempt for federal income tax purposes;
(r) (t) "Project" means a commercial or industrial undertaking
and all of the assets reasonably and necessarily required therefor,
all as determined by the authority, which determination shall be
conclusive, and shall include, without limiting the generality of
the foregoing, industrial projects and commercial projects as
presently defined in section three, article two-c, chapter
thirteen;
(s) (u) "Revenues" means all fees, premiums, charges, moneys,
profits, payment or principal of or interest on, loans and other
investments, gifts, grants, appropriations, contributions and all other income derived or to be derived by the authority under this
article; and
(t) (v) "Security interest" means an interest in the loan
portfolio of the authority which interest is secured by an
underlying loan or loans and is evidenced by a note issued by the
authority.
§31-15-6. General powers of authority.
The authority, as a public corporation and governmental
instrumentality exercising public powers of the state, shall have
and may exercise all powers necessary or appropriate to carry out
the purposes of this article, including the power:
(a) To cooperate with industrial development agencies in
efforts to promote the expansion of industrial, commercial,
manufacturing and tourist activity in this state.
(b) To determine, upon the proper application of an industrial
development agency or an enterprise, whether the declared public
purposes of this article have been or will be accomplished by the
establishment by such agency or enterprise of a project in this
state.
(c) To conduct examinations and investigations and to hear
testimony and take proof, under oath or affirmation, at public or
private hearings, on any matter relevant to this article and
necessary for information on the establishment of any project.
(d) To issue subpoenas requiring the attendance of witnesses
and the production of books and papers relevant to any hearing
before such authority or one or more members appointed by it to conduct any hearing.
(e) To apply to the circuit court having venue of such offense
to have punished for contempt any witness who refuses to obey a
subpoena, to be sworn or affirmed or to testify or who commits any
contempt after being summoned to appear.
(f) To authorize any member of the authority to conduct
hearings, administer oaths, take affidavits and issue subpoenas.
(g) To financially assist projects by insuring obligations in
the manner provided in this article through the use of the
insurance fund.
(h) To finance any projects by making loans to industrial
development agencies or enterprises upon such terms as the
authority shall deem appropriate:
Provided, That nothing contained
in this subsection (h) or under any other provision in this article
shall be construed as permitting the authority to make loans for
working capital:
Provided, however, That nothing contained in this
article shall be construed as prohibiting the authority from
insuring loans for working capital made to industrial development
agencies or to enterprises by financial institutions:
Provided
further, That nothing contained in this subsection or any other
provision of this article shall be construed as permitting the
authority to refinance existing debt except when such refinancing
will result in the expansion of the enterprise whose debt is to be
refinanced or in the creation of new jobs.
(i) To issue revenue bonds or notes to fulfill the purposes of
this article, and to secure the payment of such bonds or notes, all as hereinafter provided.
(j) To issue and deliver revenue bonds or notes in exchange
for a project.
(k) To borrow money for its purposes and issue bonds or notes
for the money and provide for the rights of the holders of the
bonds or notes or other negotiable instruments, to secure the bonds
or notes by a deed of trust on, or an assignment or pledge of, any
or all of its property and property of the project, including any
part of the security for loans, and the authority may issue and
sell its bonds and notes, by public or private sale, in such
principal amounts as it shall deem necessary to provide funds for
any purposes under this article, including the making of loans for
the purposes set forth in this article.
(l) To maintain such sinking funds and reserves as the board
shall determine appropriate for the purposes of meeting future
monetary obligations and needs of the authority.
(m) To sue and be sued, implead and be impleaded, and complain
and defend in any court.
(n) To adopt, use and alter at will a corporate seal.
(o) To make, amend, repeal and adopt both bylaws and rules
and
regulations for the management and regulation of its affairs.
(p) To appoint officers, agents and employees and to contract
for and engage the services of consultants.
(q) To
directly make contracts
and agreements of every kind
and nature to execute all instruments necessary or convenient for
carrying on its business
notwithstanding the provisions of article three, chapter five-a of this code.
(r) To accept grants and loans from and enter into contracts
and other transactions with any federal agency.
(s) To take title by conveyance or foreclosure to any project
where acquisition is necessary to protect any loan previously made
by the authority and to sell, by public or private sale, transfer,
lease or convey such project to any enterprise.
(t) To participate in any reorganization proceeding pending
pursuant to the United States Code (being the act of Congress
establishing a uniform system of bankruptcy throughout the United
States, as amended) or in any receivership proceeding in a state or
federal court for the reorganization or liquidation of an
enterprise. The authority may file its claim against any such
enterprise in any of the foregoing proceedings, vote upon any
questions pending therein which requires the approval of the
creditors participating in any reorganization proceeding or
receivership, exchange any evidence of such indebtedness for any
property, security or evidence of indebtedness offered as a part of
the reorganization of such enterprise or of any other entity formed
to acquire the assets thereof and may compromise or reduce the
amount of any indebtedness owing to it as a part of any such
reorganization.
(u) To acquire, construct, maintain, improve, repair, replace
and operate projects within this state, as well as streets, roads,
alleys, sidewalks, crosswalks and other means of ingress and egress
to and from projects located within this state.
(v) To acquire, construct, maintain, improve, repair and
replace and operate pipelines, electric transmission lines,
waterlines, sewer lines, electric power substations, waterworks
systems, sewage treatment and disposal facilities and any
combinations thereof for the use and benefit of any enterprise
located within this state.
(w) To acquire watersheds, water and riparian rights,
rights-of-way, easements, licenses and any and all other property,
property rights and appurtenances for the use and benefit of any
enterprise located within this state.
(x) To acquire, by purchase, lease, donation or eminent
domain, any real or personal property, or any right or interest
therein, as may be necessary or convenient to carry out the
purposes of the authority. Title to all property, property rights
and interests acquired by the authority shall be taken in the name
of the authority.
(y) To issue renewal notes, or security interests, to issue
bonds to pay notes or security interests and, whenever it deems
refunding expedient, to refund any bonds or notes by the issuance
of new bonds or notes, whether the bonds or notes to be refunded
have or have not matured and whether or not the authority
originally issued the bonds or notes to be refunded.
(z) To apply the proceeds from the sale of renewal notes,
security interests or refunding bonds or notes to the purchase,
redemption or payment of the notes, security interests or bonds or
notes to be refunded.
(aa) To accept gifts or grants of property, funds, security
interests, money, materials, labor, supplies or services from the
United States of America or from any governmental unit or any
person, firm or corporation, and to carry out the terms or
provisions of, or make agreements with respect to, or pledge, any
gifts or grants, and to do any and all things necessary, useful,
desirable or convenient in connection with the procuring,
acceptance or disposition of gifts or grants.
(bb) To the extent permitted under its contracts with the
holders of bonds, security interests or notes of the authority, to
consent to any modification of the rate of interest, time of
payment of any installment of principal or interest, security or
any other term of any bond, security interests, note or contract or
agreement of any kind to which the authority is a party.
(cc) To sell loans, security interests or other obligations in
the loan portfolio of the authority. Such security interests shall
be evidenced by instruments issued by the authority. Proceeds from
the sale of loans, security interests, or other obligations may be
used in the same manner and for the same purposes as bond and note
revenues.
(dd) To procure insurance against any losses in connection
with its property, operations or assets in such amounts and from
such insurers as the authority deems desirable.
(ee) To sell, license, lease, mortgage, assign, pledge or
donate its property, both real and personal, or any right or
interest therein to another or authorize the possession, occupancy or use of such property or any right or interest therein by
another, in such manner and upon such terms as it deems
appropriate.
(ff) To participate with the state and federal agencies in
efforts to promote the expansion of commercial and industrial
development in this state.
(gg) To finance, organize, conduct, sponsor, participate and
assist in the conduct of special institutes, conferences,
demonstrations and studies relating to the stimulation and
formation of business, industry and trade endeavors.
(hh) To conduct, finance and participate in technological,
business, financial and other studies related to business and
economic development.
(ii) To conduct, sponsor, finance, participate and assist in
the preparation of business plans, financing plans and other
proposals of new or established businesses suitable for support by
the authority.
(jj) To prepare, publish and distribute, with or without
charge as the authority may determine, such technical studies,
reports, bulletins and other materials as it deems appropriate,
subject only to the maintenance and respect for confidentiality of
client proprietary information.
(kk) To exercise such other and additional powers as may be
necessary or appropriate for the exercise of the powers herein
conferred.
(ll) To exercise all of the powers which a corporation may lawfully exercise under the laws of this state.
(mm) To contract for the provision of legal services by
private counsel, and notwithstanding the provisions of article
three, chapter five, such counsel may, but is not limited to,
represent the authority in court, negotiate contracts and other
agreements on behalf of the authority, render advice to the
authority on any matter relating thereto, prepare contracts and
other agreements, and provide such other legal services as may be
requested by the authority.
(nn) To develop, maintain, operate and apply for the
establishment of foreign trade zones pursuant to and in accordance
with all applicable provisions of federal law.
(oo) To enter into and make contracts and agreements of every
kind and nature and to execute all instruments necessary or
convenient for implementing and carrying out the provisions of
section seven-a of this article.
§31-15-7a. West Virginia new markets initiative; new markets fund;
new markets tax credits; rulemaking.
(a) The West Virginia new markets initiative is hereby
established in order to permit the authority to better fulfill its
purposes as listed in this article by providing leverage financing
and capital for emerging, expanding and restructuring businesses in
the state. The authority is hereby designated as the state entity
charged with maximizing the benefit provided by the new markets
initiative of the United States small business administration,
including, but not limited to, facilitating opportunities relating to the new markets venture capital program as such may be
administered by said small business administration.
(b) The authority shall create and establish a special
revolving fund of moneys made available pursuant to this section to
be known as the "New Markets Fund." The new markets fund shall be
governed, administered and accounted for by the authority as a
special purpose fund segregated and distinct from any other moneys,
funds or accounts owned or managed by the authority. New markets
fund moneys shall consist of any appropriations, grants, gifts,
contributions, loan proceeds or other revenues received by the new
markets fund from any source, public or private, including, but not
limited to, proceeds derived from the sale of new market fund tax
credits as contemplated in this section. Notwithstanding any
provision of this code to the contrary, new markets fund moneys
shall be deposited by the authority in one or more banking
institutions located in the state which shall be selected by the
authority by competitive bid. The authority shall consider
entering into contracts or agreements with private and public
venture capital entities and financial institutions for the purpose
of acquiring or providing management services, investment
consulting services and investment services in an effort to
maximize financial leverage in order to fulfill the purposes of
this article.
(c) New markets tax credits are hereby created, issued and
transferred by the state to the authority in a total amount of
twenty million dollars to be used by taxpayers, including persons, firms, corporations and all other business entities, to reduce the
tax liabilities imposed upon them pursuant to articles twelve-a,
thirteen, thirteen-a, thirteen-b, twenty-one, twenty-three and
twenty-four of chapter eleven of this code. Without limiting the
powers otherwise enumerated in this article, the authority shall
have the power to sell and transfer new markets tax credits
created, issued and transferred to the authority pursuant to the
provisions of this section.
(d) In conjunction with the department of tax and revenue, the
authority shall develop a system for: (1) Registering and
certifying new markets tax credits, commitments for the sale and
transfer of new markets tax credits, the assignment of new markets
tax credits; and (2) certifying new markets tax credits in order
that when new markets tax credits are claimed on any tax return,
such may be verified as validly issued by the authority, properly
taken in the year of claim and made in accordance with the
requirements of this section.
(e) Without limiting the powers otherwise enumerated in this
article, the authority shall have and may exercise all powers
necessary to further the purposes of this section, including, but
not limited to, the power to commit, sell and transfer new markets
tax credits up to the total amount of twenty million dollars:
Provided, That the authority may issue the new markets tax credits
in amounts totaling not more than four million dollars in each of
the fiscal years ending in two thousand two, two thousand three,
two thousand four, two thousand five and two thousand six.
(f) Prior to committing to the sale and transfer of any new
markets tax credits, the board shall first determine that: (1) New
market fund moneys to be received in relationship to the commitment
shall be used for the development, promotion and expansion of the
economy of the state; and (2) the sale and transfer of any new
market tax credits shall leverage as much private sector investment
participation as feasible. The new markets tax credits sold and
transferred by the board pursuant to this section shall be claimed
as a credit on the tax returns for the year or years in which the
new markets tax credits are sold and transferred by the board. The
amount of the new markets tax credit that exceeds the taxpayer's
tax liability for the taxable year in the year of purchase may be
carried to succeeding taxable years until used in full up to two
years after the year of purchase, and may not be carried back to
prior taxable years. Any new market tax credit sold and
transferred by the board that remains outstanding after the third
taxable year subsequent to and including the year of the transfer
is forfeited.
(g) The authority may promulgate, repeal, amend and change
rules consistent with the provisions of this article to carry out
the purposes of this section. These rules are not subject to the
provisions of chapter twenty-nine-a of this code, but shall be
filed with the secretary of state.
NOTE: The purpose of this bill is to update and modify
provisions including definitions and powers all relating to the
West Virginia Economic Development Authority. The bill also establishes the new markets fund and new markets tax credits for
purposes of empowering the West Virginia Economic Development
Authority to act as a mobilizer of financing and capital for
emerging, expanding and restructuring business opportunities in
the state. The new markets fund shall be funded through
appropriations, grants, gifts, contributions, loan proceeds or
other revenues received by the new markets fund from any source,
public or private, including, but not limited to, proceeds derived
from the sale of new markets fund tax credits.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§31-15-7a is new; therefore, strike-throughs and underscoring
have been omitted.
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