H. B. 2900
(By Delegates Stephens, Swartzmiller, C. Miller,
Cowles, J. Miller, Boggs, Cann, Barker, Kominar and Klempa)
[Introduced March 2, 2009; 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
Infrastructure Bank; definitions; creating a governing board
of the bank; appointment, terms, qualifications, compensation
and expenses of board members; powers and duties of the bank;
creating the West Virginia Transportation Infrastructure Bank
Fund; deposits and capitalization; disbursements; subaccounts;
requirements for loans and other financial assistance from the
bank; requirements for applications for loans and other
financial assistance and for approval of qualified projects;
finance agreements; payments and repayments of loans;
withholding of defaulted payments from funds allotted or
payable to a defaulting government unit; annual reports to Governor and Legislature; annual audits of the bank; and
assistance of the Department of Transportation to the board.
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 INFRASTRUCTURE BANK.
§31-15D-1. Legislative Findings.
The West Virginia Legislature finds that:
(a) 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;
(b) 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;
(c) The State of West Virginia has the ability to provide
alternative methods of financing highway and transportation
projects;
(d) 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
(e) 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.
(a) "Bank" means the West Virginia Transportation
Infrastructure Bank created in section three, article fifteen-D,
chapter thirty-one of this article;
(b) "Board" means the board of directors of the bank;
(c) "Bond" means a revenue bond, note, or other evidence of
indebtedness;
(d) "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;
(e) "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;
(f) "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 bank. 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;
(g) "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 defined in §17-16B-5 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;
(h) "Federal accounts" means federal highway funds;
(i) "Financing agreement" means an agreement entered into between the bank 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;
(j) "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;
(k) "Fund" means the West Virginia Transportation
Infrastructure Bank Fund established in section five of this
article;
(l) "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;
(m) "Loan" means an obligation subject to repayment which is
provided by the bank 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;
(n) "Loan obligation" means a bond, note or other evidence of obligation issued by a qualified borrower;
(o) "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;
(p) "Qualified borrower" means any government unit which is
authorized to construct, operate or own a qualified project;
(q) "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 bank to receive a loan
or other financial assistance from the bank to defray eligible
costs;
§31-15D-3. West Virginia Transportation Infrastructure Bank
established; composition and appointment of bank
board; compensation and expenses of board members.
(a) The West Virginia Transportation Infrastructure Bank 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 bank 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.
(c) (1) The six members appointed by the Governor pursuant to
subdivision (G) of subdivision (1), subsection (b) of this section
shall be appointed by the Governor for terms that begin July 1,
2009, and expire as follows:
(A) Two members shall be appointed for a term ending June 30,
2011;
(B) Two members shall be appointed for a term ending June 30,
2012; and
(C) Two members shall be appointed for a term ending June 30,
2013.
(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 (G) of subdivision (1), 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 (G) of subdivision (1), 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;
(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 shall be necessary for any action taken by vote of
the board: Provided, That 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 shall not be entitled to compensation
for services performed as members but shall be 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
Infrastructure Bank.
(a) In addition to the powers contained elsewhere in this
article, the bank shall have all power necessary, useful or
appropriate to fund, operate and administer the bank, 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 bank;
(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 bank 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 bank;
(12) Expend funds to obtain accounting, management, legal,
financial consulting and other professional services necessary to
the operations of the bank;
(13) Expend funds credited to the bank as the board determines
necessary for the costs of administering the operations of the
bank: Provided, That the costs of administering the operations 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 bank 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 Infrastructure Bank 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 Infrastructure Bank Fund", which shall be governed,
administered and accounted for by the board. All proceeds and
revenues of the bank 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 bank:
(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
appropriated for the construction and maintenance of state
highways, not to exceed a maximum of $10 million. These funds may
be used to match federal capitalization grants to the bank and
provide capital for the state accounts of the bank;
(3) Federal funds that may be made available to the state for
the bank;
(4) Contributions and donations from public authorities,
government units and private entities;
(5) All moneys paid or credited to the bank, by contract or
otherwise; payments of principal and interest on loans or other
financial assistance made from the bank, and interest earnings
which may accrue from the investment or reinvestment of the bank
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 bank 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
bank, 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 bank shall
determine necessary or desirable in order to implement the
provisions of this article.
(e) The bank shall comply will all federal and state laws and
regulations prohibiting the commingling of funds deposited in the
bank. 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 bank 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 shall
not exceed forty years. The bank shall require the government unit
to enter into an agreement to evidence all of the terms and
conditions of the loan obligation. The bank may require that the government unit obtain or provide matching funds for the qualified
project from sources other than the loan from the bank. 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
bank. 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 bank;
(2) The local support of the project, expressed by resolutions
by 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 project is consistent with the adopted plan of the
appropriate planning organization 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; and
(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 bank 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 bank a resolution which makes a finding that the
project is essential to or necessary for the transportation needs
of the public.
The board may also 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.
(c) The board shall create a preliminary application form
which shall be used by all government units requesting funding
assistance from the bank 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 bank; 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 bank through financing
agreements. Qualified borrowers entering into financing agreements
and issuing loan obligations to the bank may perform any acts, take
any action, adopt any proceedings, and make and carry out any
contracts or agreements with the bank as may be agreed to by the
bank 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 bank shall be evidenced by a written finance agreement
between the bank 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 bank 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 bank or other state, federal or local
bodies regarding the acquisition, construction, improvement or
operation of the qualified project and granting the bank 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 bank 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 bank.
(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 bank 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 bank 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 bank 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
bank 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 bank 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 bank 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 bank 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 bank's operation
during the preceding fiscal year. The bank shall also submit an
annual report to the appropriate federal agencies in accordance
with the requirements of the federal agencies. The bank 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 bank.
The Department of Transportation shall provide staff and
assist the bank in the administration of the program and the
performance of the bank under this article. In providing this assistance, the department may:
(a) Assist in the formulation, establishment and structuring
of programs undertaken by the bank pursuant to this article;
(b) Provide government units with information as to the bank
and the procedures for obtaining the assistance intended by this
article;
(c) Assist government units in making applications to state
and federal agencies, including the bank, as may be necessary or
helpful in order to avail themselves of this program;
(d) Assist the bank in analyzing and evaluating requests for
assistance pursuant to this article;
(e) Assist in the structuring and negotiating of financing
agreements;
(f) Administer the fund, including any accounts in it;
(g) Administer the bank'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 bank 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
(h) Provide other assistance and perform other duties as may
be requested or directed by the bank.
NOTE: The purpose of this bill is to create the West Virginia
Transportation Infrastructure Bank. The purpose of the bank is to
provide loans and other financial assistance to government units
for transportation infrastructure.
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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