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Introduced Version House Bill 2691 History

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H. B. 2691

 

(By Mr. Speaker, (Mr. Thompson) and Delegate Armstead)

[By Request of the Executive]

[Introduced January 20, 2011; referred to the

Committee on Finance.]

 

 

 

A BILL to amend and reenact §11B-2-20 of the Code of West Virginia, 1931, as amended; and to amend and reenact §21A-8-1 and §21A-8-10 of said code, all relating to maintaining solvency of the Unemployment Compensation Fund; providing a mechanism for the Governor to borrow funds from the Revenue Shortfall Reserve Fund and deposit those funds into the Unemployment Compensation Fund if the balance of the Unemployment Compensation Fund drops below $20 million; providing that no amount borrowed shall exceed $20 million; and providing for repayment of any outstanding loans from the Revenue Shortfall Reserve Fund.

Be it enacted by the Legislature of West Virginia:

    That §11B-2-20 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that §21A-8-1 and §21A-8-10 of said code be amended and enacted, all to read as follows:

CHAPTER 11B. DEPARTMENT OF REVENUE.

ARTICLE 2. STATE BUDGET OFFICE.

§11B-2-20. Reduction of appropriations; powers of Governor; Revenue Shortfall Reserve Fund and permissible expenditures therefrom.

    (a) Notwithstanding any provision of this section, the Governor may reduce appropriations according to any of the methods set forth in sections twenty-one and twenty-two of this article. The Governor may, in lieu of imposing a reduction in appropriations, request an appropriation by the Legislature from the Revenue Shortfall Reserve Fund established in this section.

    (b) A Revenue Shortfall Reserve Fund is hereby continued within the State Treasury. The Revenue Shortfall Reserve Fund shall be funded as set forth in this subsection from surplus revenues, if any, in the State Fund, General Revenue, as the surplus revenues may accrue from time to time. Within sixty days of the end of each fiscal year, the secretary shall cause to be deposited into the Revenue Shortfall Reserve Fund the first fifty percent of all surplus revenues, if any, determined to have accrued during the fiscal year just ended. The Revenue Shortfall Reserve Fund shall be funded continuously and on a revolving basis in accordance with this subsection up to an aggregate amount not to exceed ten percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended. If at the end of any fiscal year the Revenue Shortfall Reserve Fund is funded at an amount equal to or exceeding ten percent of the State’s General Revenue Fund budget for the fiscal year just ended, then there shall be no further obligation of the secretary under the provisions of this section to apply any surplus revenues as set forth in this subsection until that time the Revenue Shortfall Reserve Fund balance is less than ten percent of the total appropriations from the state fund, general revenue State Fund, General Revenue.

    (c) Not earlier than the first day of November 1 of each calendar year, if the state’s fiscal circumstances are such as to otherwise trigger the authority of the Governor to reduce appropriations under this section or section twenty-one or section twenty-two of this article, then in that event the Governor may notify the presiding officers of both houses of the Legislature in writing of his or her intention to convene the Legislature pursuant to section nineteen, article VI of the Constitution of West Virginia for the purpose of requesting the introduction of a supplementary appropriation bill or to request a supplementary appropriation bill at the next preceding regular session of the Legislature to draw money from the surplus Revenue Shortfall Reserve Fund to meet any anticipated revenue shortfall. If the Legislature fails to enact a supplementary appropriation from the Revenue Shortfall Reserve Fund during any special legislative session called for the purposes set forth in this section or during the next preceding regular session of the Legislature, then the Governor may proceed with a reduction of appropriations pursuant to sections twenty-one and twenty-two of this article. Should any amount drawn from the Revenue Shortfall Reserve Fund pursuant to an appropriation made by the Legislature prove insufficient to address any anticipated shortfall, then the Governor may also proceed with a reduction of appropriations pursuant to sections twenty-one and twenty-two of this article.

    (d) Upon the creation of the fund, the Legislature is authorized and may make an appropriation from the Revenue Shortfall Reserve Fund for revenue shortfalls, for emergency revenue needs caused by acts of God or natural disasters or for other fiscal needs as determined solely by the Legislature.

    (e) Prior to the thirty-first day of October 31 of in any fiscal year in which revenues are inadequate to make timely payments of the state’s obligations, the Governor may by executive order, after first notifying the presiding officers of both houses of the Legislature in writing, borrow funds from the Revenue Shortfall Reserve Fund. The amount of funds borrowed under this subsection shall not exceed one and one-half percent of the general revenue estimate for the fiscal year in which the funds are to be borrowed, or the amount the Governor determines is necessary to make timely payments of the state’s obligations, whichever is less. Any funds borrowed pursuant to this subsection shall be repaid, without interest, and redeposited to the credit of the Revenue Shortfall Reserve Fund within ninety days of their withdrawal.

    (f) On the first day of any month in which the balance in the state's Unemployment Compensation Fund, established in article eight, chapter twenty-one-a of this code, is projected by the Executive Director of Workforce West Virginia to drop below $20 million at any time during said month, the Governor may by executive order, after first notifying the presiding officers of both houses of the Legislature in writing, borrow funds from the Revenue Shortfall Reserve Fund for deposit into the Unemployment Compensation Fund to be expended in accordance with this code. The amount of funds borrowed and outstanding under this subsection shall not exceed $20 million at any one time, or the amount the Governor determines is necessary to adequately sustain the balance in the Unemployment Compensation Fund at a minimum of $20 million, whichever is less. Any funds borrowed pursuant to this subsection shall be repaid from funds on deposit in the Unemployment Trust Fund in excess of $20 million or from other funds legally available for such purpose, without interest, and redeposited to the credit of the Revenue Shortfall Reserve Fund within one-hundred-eighty days of their withdrawal.

    (f) (g) There is hereby in the State Treasury the “Revenue Shortfall Reserve Fund – Part B.” The Revenue Shortfall Reserve Fund – Part B shall consist of moneys transferred from the West Virginia Tobacco Settlement Medical Trust Fund pursuant to the provisions of section two, article eleven-a, chapter four of this code, repayments made of the loan from the West Virginia Tobacco Settlement Medical Trust Fund to the physician’s mutual insurance company pursuant to the provisions of article twenty-f, chapter thirty-three of this code, and all interest and other return earned on the moneys in the Revenue Shortfall Reserve Fund – Part B. Moneys in the Revenue Shortfall Reserve Fund – Part B may be expended solely for the purposes set forth in subsection (d) of this section, subject to the following conditions:

    (1) No moneys in the Revenue Shortfall Reserve Fund – Part B nor any interest or other return earned thereon may be expended for any purpose unless all moneys in the Revenue Shortfall Reserve Fund described in subsection (b) of this section have first been expended, except that the interest or other return earned on moneys in the Revenue Shortfall Reserve Fund – Part B may be expended as provided in subdivision (2) of this subsection; and

    (2) Notwithstanding any other provision of this section to the contrary, the Legislature may appropriate any interest and other return earned thereon that may accrue on the moneys in the Revenue Shortfall Reserve Fund – Part B after June 30, 2025, for expenditure for the purposes set forth in section three, article eleven-a, chapter four of this code; and

    (3) Any appropriation made from Revenue Shortfall Reserve Fund – Part B shall be made only in instances of revenue shortfalls or fiscal emergencies of an extraordinary nature.

    (g) (h) Subject to the conditions upon expenditures from the Revenue Shortfall Reserve Fund – Part B prescribed in subsection (f) (g) of this section, in appropriating moneys pursuant to the provisions of this section, the Legislature may in any fiscal year appropriate from the Revenue Shortfall Reserve Fund and the Revenue Shortfall Reserve Fund – Part B, a total amount up to, but not exceeding, ten percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended.

    (h) (i) (1) Of the moneys in the Revenue Shortfall Reserve Fund, $100 million, or such greater amount as may be certified as necessary by the director of the budget for the purposes of subsection (e) of this section, shall be made available to the West Virginia Board of Treasury Investments for management and investment of the moneys in accordance with the provisions of article six-c, chapter twelve of this code. All other moneys in the Revenue Shortfall Reserve Fund shall be made available to the West Virginia Investment Management Board for management and investment of the moneys in accordance with the provisions of article six, chapter twelve of this code. Any balance of the Revenue Shortfall Reserve Fund including accrued interest and other return earned thereon at the end of any fiscal year shall not revert to the general fund but shall remain in the Revenue Shortfall Reserve Fund for the purposes set forth in this section.

    (2) All of the moneys in the Revenue Shortfall Reserve Fund – Part B shall be made available to the West Virginia Management Board for management and investment of the moneys in accordance with the provisions of article six, chapter twelve of this code. Any balance of the Revenue Shortfall Reserve Fund – Part B, including accrued interest and other return earned thereon at the end of any fiscal year, shall not revert to the general fund but shall remain in the Revenue Shortfall Reserve Fund –Part B for the purposes set forth in this section.

CHAPTER 21A. UNEMPLOYMENT COMPENSATION.

ARTICLE 8. UNEMPLOYMENT COMPENSATION FUND.

§21A-8-1. Establishment.

    There is hereby established as a special fund, separate and apart from all public moneys or funds of the state, an Unemployment Compensation Fund. The fund shall consist of:

    (1) All payments collected under this chapter.

    (2) Interest earned upon money in the fund.

    (3) Property or securities acquired through the use of the fund.

    (4) Earnings of such property or securities.

    (5) Amounts transferred from the Employment Security Special Administration Fund.

    (6) Any moneys loaned to the fund pursuant to section twenty, article two, chapter eleven-b of this code.

    (6) (7) Any moneys received from the federal unemployment account in the Unemployment Trust Fund in accordance with Title XII of the Social Security Act, as amended.

    All money in the funds shall be mingled and undivided.

    Any interest required to be paid on advances under Title XII of the Social Security Act, as amended, shall be paid by the date on which such interest is due. No interest shall be paid directly or indirectly from amounts in the Unemployment Compensation Trust Fund.

§21A-8-10. Withdrawals.

    Except as provided in section thirteen of this article, money shall be requisitioned from this state's account in the unemployment trust fund solely for the payment of benefits and repayment of any loans outstanding from the Revenue Shortfall Reserve Fund as provided in section twenty, article two, chapter eleven-b of this code. The commissioner may requisition from the unemployment trust fund such accounts, not exceeding the amount of the account, as he the commissioner determines to be necessary for the payment of benefits for a reasonable future period.

    Upon receipt of the money he the commissioner shall deposit it in the benefit account.


    NOTE: The purpose of this bill is to provide a mechanism for the Governor to borrow funds from the Revenue Shortfall Reserve Fund and deposit those funds into the Unemployment Compensation Fund if the balance of the Unemployment Compensation Fund drops below $20 million and to provide a mechanism for repaying any such loans outstanding from the Revenue Shortfall Reserve Fund.


    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

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