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Introduced Version Senate Bill 390 History

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Senate Bill No. 390

(By Senators Kessler (Mr. President) and Hall,

By Request of the Executive)

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[Introduced January 24, 2012; referred to the Committee on Finance.]

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A BILL to amend and reenact §11B-2-20 of the Code of West Virginia, 1931, as amended; to amend said code by adding thereto a new section, designated §11B-2-20a; to amend and reenact §17-3-1 of said code; and to amend and reenact §31-15A-9 of said code, all relating to the Revenue Shortfall Reserve Fund, the Revenue Shortfall Reserve Fund - Part B and the creation of a West Virginia Infrastructure Modernization and Development Special Revenue Fund; specifying maximum aggregate funding amount for the Revenue Shortfall Reserve Fund; providing that interest and other earnings on Revenue Shortfall Reserve Fund - Part B shall be dedicated to and expended for and in support of the federal-state Medicaid program authorized by the Legislature or mandated by the federal government; providing that, in commencing and executing the provisions of this subdivision, the West Virginia Investment Management Board is not and shall not be obligated to sell any investments at a loss or otherwise take any action not in furtherance of its fiduciary duties and obligations in respect of funds and investments under its management and supervision; creating the West Virginia Infrastructure Modernization and Development Special Revenue Fund in the State Treasury; specifying the funding source for the West Virginia Infrastructure Modernization and Development Special Revenue Fund; specifying use of funds in the West Virginia Infrastructure Modernization and Development Special Revenue Fund; providing ability of State Road Fund to accept and expend funds transferred from the West Virginia Infrastructure Modernization and Development Special Revenue Fund; and providing ability of West Virginia Infrastructure Fund to accept and expend funds transferred from the West Virginia Infrastructure Modernization and Development Special Revenue 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; that said code be amended by adding thereto a new section, designated §11B-2-20a; that §17-3-1 of said code be amended and reenacted; and that §31-15A-9 of said code be amended and reenacted, 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 continuously and on a revolving basis in accordance with this subsection up to an aggregate amount not to exceed thirteen fifteen percent of the total appropriations from the State Fund, General Revenue, for the fiscal year just ended. 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 such amount of the first fifty percent of all surplus revenues, if any, determined to have accrued during the fiscal year just ended, as may be necessary to bring the balance of the Revenue Shortfall Reserve Fund to thirteen fifteen 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 thirteen fifteen percent of the State’s General Revenue Fund budget for the fiscal year just ended, then there shall be no further deposit by the secretary under the provisions of this section of any surplus revenues as set forth in this subsection until that time the Revenue Shortfall Reserve Fund balance is less than thirteen fifteen percent of the total appropriations from the State Fund, General Revenue.

    (c) Not earlier than 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 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 October 31, 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 payment 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) There is hereby created 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) Beginning on July 1, 2012, any and all interest and other return earned thereon that may accrue on the moneys in the Revenue Shortfall Reserve Fund - Part B shall be dedicated to and expended for and in support of the federal-state Medicaid program authorized by the Legislature or mandated by the federal government: Provided, That in commencing and executing the provisions of this subdivision, the West Virginia Investment Management Board is not and shall not be obligated to sell any investments at a loss or otherwise take any action not in furtherance of its fiduciary duties and obligations in respect of funds and investments under its management and supervision;

    (1) (2) 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 subdivisions (2) (1) and (3) of this subsection; and

    (2) (3) 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) (4) 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) Subject to the conditions upon expenditures from the Revenue Shortfall Reserve Fund – Part B prescribed in subsection (f) 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)(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 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 – 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.

§11B-2-20a. West Virginia Infrastructure Modernization and Development Special Revenue Fund and permissible expenditures therefrom.

    (a) There is hereby created in the State Treasury the West Virginia Infrastructure Modernization and Development Special Revenue Fund. The West Virginia Infrastructure Modernization and Development Special Revenue Fund shall be funded on a revolving basis in accordance with this subsection from surplus revenues, if any, in the State Fund, General Revenue, as the surplus revenues may accrue from time to time, subject to the requirements of section twenty of this article. If at the end of any fiscal year there exists surplus revenues in the State Fund, General Revenue, that accrued during the fiscal year just ended, then the secretary shall first cause funds to be deposited into the Revenue Shortfall Reserve Fund pursuant to section twenty of this article. If at the end of any fiscal year the Revenue Shortfall Reserve Fund is funded at an amount equal to or exceeding fifteen percent of the State's General Revenue Fund budget for the fiscal year just ended, then the secretary shall, within sixty days of the end of such fiscal year, cause to be deposited into the West Virginia Infrastructure Modernization and Development Special Revenue Fund the first fifty percent of all surplus revenues, if any, in the State Fund, General Revenue, determined to have accrued during the fiscal year just ended.

    (b) On October 1 in the fiscal year beginning July 1, 2012, and on October 1 in each subsequent fiscal year thereafter, the secretary shall transfer: (1) Fifty percent of the balance, if any, of the West Virginia Infrastructure Modernization and Development Special Revenue Fund into the West Virginia Infrastructure Fund created in section nine, article fifteen-a, chapter thirty-one of this code to be expended in accordance with the provisions of said article; and (2) fifty percent of the balance, if any, of the West Virginia Infrastructure Modernization and Development Special Revenue Fund into the State Road Fund created in section one, article three, chapter seventeen of this code to be expended in accordance with the provisions of said chapter.

CHAPTER 17. ROADS AND HIGHWAYS.

ARTICLE 3. STATE ROAD FUND.

§17-3-1. What constitutes fund; payments into fund; use of money in fund.

    There shall be a State Road Fund, which shall consist of the proceeds of all state license taxes imposed upon automobiles or other motor or steam driven vehicles; the registration fees imposed upon all owners, chauffeurs, operators and dealers in automobiles or other motor driven vehicles; all sums of money which may be donated to such fund; all proceeds derived from the sale of state bonds issued pursuant to any resolution or act of the Legislature carrying into effect the Better Roads Amendment to the Constitution of this state, adopted in the month of November, 1964, except that the proceeds from the sale of these bonds shall be kept in a separate and distinct account in the State Road Fund; all proceeds from the sale of state bonds issued pursuant to any resolution or act of the Legislature carrying into effect the Safe Roads Amendment of 1996 to the Constitution of this state, adopted in the month of November, 1996, except that the proceeds from the sale of these bonds shall be kept in a separate and distinct account in the State Road Fund; all moneys and funds appropriated to it by the Legislature; and all moneys allotted or appropriated by the federal government to this state for road construction and maintenance pursuant to any act of the Congress of the United States; the proceeds of all taxes imposed upon and collected from any person, firm or corporation and of all taxes or charges imposed upon and collected from any county, district or municipality for the benefit of the fund; the proceeds of all judgments, decrees or awards recovered and collected from any person, firm or corporation for damages done to, or sustained by, any of the state roads or parts thereof; all moneys recovered or received by reason of the violation of any contract respecting the building, construction or maintenance of any state road; all penalties and forfeitures imposed, recovered or received by reason thereof; all funds transferred in accordance with section twenty-a, article two, chapter eleven-b of this code; and any and all other moneys and funds appropriated to, imposed and collected for the benefit of such fund, or collected by virtue of any statute and payable to such fund: Provided, That notwithstanding any provisions of this code to the contrary, fifty cents of every license fee paid pursuant to the provisions of subdivision (2), subsection (a), section eight, article two, chapter seventeen-b of this code shall be paid to the special fund established pursuant to the provisions of subsection (a), section twelve, article two, chapter three of this code.

    When any money is collected from any of the sources aforesaid, it shall be paid into the State Treasury by the officer whose duty it is to collect and account for the same, and credited to the State Road Fund, and shall be used only for the purposes named in this chapter, which are: (a) To pay the principal and interest due on all state bonds issued for the benefit of said fund, and set aside and appropriated for that purpose; (b) to pay the expenses of the administration of the road department; and (c) to pay the cost of maintenance, construction, reconstruction and improvement of all state roads.

CHAPTER 31. CORPORATIONS.

ARTICLE 15A. WEST VIRGINIA INFRASTRUCTURE AND JOBS DEVELOPMENT                   COUNCIL.

§31-15A-9. Infrastructure fund; deposits in fund; disbursements to provide loans, loan guarantees, grants and other assistance; loans, loan guarantees, grants and other assistance shall be subject to assistance agreements; West Virginia Infrastructure Lottery Revenue Debt Service Fund; use of funds for projects.

    (a) The Water Development Authority shall create and establish a special revolving fund of moneys made available by appropriation, grant, contribution or loan to be known as the West Virginia Infrastructure Fund. This fund shall be governed, administered and accounted for by the directors, officers and managerial staff of the Water Development Authority as a special purpose account separate and distinct from any other moneys, funds or funds owned and managed by the Water Development Authority. The Infrastructure Fund shall consist of subaccounts, as deemed necessary by the council or the Water Development Authority, for the deposit of: (1) Infrastructure revenues; (2) any appropriations, grants, gifts, contributions, loan proceeds or other revenues received by the Infrastructure Fund from any source, public or private; (3) amounts received as payments on any loans made by the Water Development Authority to pay for the cost of a project or infrastructure project; (4) insurance proceeds payable to the Water Development Authority or the Infrastructure Fund in connection with any infrastructure project or project; (5) all income earned on moneys held in the Infrastructure Fund; (6) all funds deposited in accordance with section four of article fifteen-b; and (7) all proceeds derived from the sale of bonds issued pursuant to article fifteen-b of this chapter; and (8) all funds transferred in accordance with section twenty-a, article two, chapter eleven-b of this code.

    Any money collected pursuant to this section shall be paid into the West Virginia Infrastructure Fund by the state agent or entity charged with the collection of the same, credited to the Infrastructure Fund, and used only for purposes set forth in this article or article fifteen-b.

    Amounts in the Infrastructure Fund shall be segregated and administered by the Water Development Authority separate and apart from its other assets and programs. Amounts in the Infrastructure Fund may not be transferred to any other fund or account or used, other than indirectly, for the purposes of any other program of the Water Development Authority, except that the Water Development Authority may use funds in the Infrastructure Fund to reimburse itself for any administrative costs incurred by it and approved by the council in connection with any loan, loan guarantee, grant or other funding assistance made by the Water Development Authority pursuant to this article.

    (b) Notwithstanding any provision of this code to the contrary, amounts in the Infrastructure Fund shall be deposited by the Water Development Authority in one or more banking institutions: Provided, That any moneys so deposited shall be deposited in a banking institution located in this state. The banking institution shall be selected by the Water Development Authority by competitive bid. Pending the disbursement of any money from the Infrastructure Fund as authorized under this section, the Water Development Authority shall invest and reinvest the moneys subject to the limitations set forth in article eighteen, chapter thirty-one of this code.

    (c) To further accomplish the purposes and intent of this article and article fifteen-b of this chapter, the Water Development Authority may pledge infrastructure revenues and from time to time establish one or more restricted accounts within the Infrastructure Fund for the purpose of providing funds to guarantee loans for infrastructure projects or projects: Provided, however, That for any fiscal year the Water Development Authority may not deposit into the restricted accounts more than twenty percent of the aggregate amount of infrastructure revenues deposited into the Infrastructure Fund during the fiscal year. No loan guarantee shall be made pursuant to this article unless recourse under the loan guarantee is limited solely to amounts in the restricted account or accounts. No person shall have any recourse to any restricted accounts established pursuant to this subsection other than those persons to whom the loan guarantee or guarantees have been made.

    (d) Each loan, loan guarantee, grant or other assistance made or provided by the Water Development Authority shall be evidenced by a loan, loan guarantee, grant or assistance agreement between the Water Development Authority and the project sponsor to which the loan, loan guarantee, grant or assistance shall be made or provided, which agreement shall include, without limitation and to the extent applicable, the following provisions:

    (1) The estimated cost of the infrastructure project or project, the amount of the loan, loan guarantee or grant or the nature of the assistance, and in the case of a loan or loan guarantee, the terms of repayment and the security therefor, if any;

    (2) The specific purposes for which the loan or grant proceed shall be expended or the benefits to accrue from the loan guarantee or other assistance, and the conditions and procedure for disbursing loan or grant proceeds;

    (3) The duties and obligations imposed regarding the acquisition, construction, improvement or operation of the project or infrastructure project; and

    (4) The agreement of the governmental agency to comply with all applicable federal and state laws, and all rules and regulations issued or imposed by the Water Development Authority or other state, federal or local bodies regarding the acquisition, construction, improvement or operation of the infrastructure project or project and granting the Water Development Authority the right to appoint a receiver for the project or infrastructure if the project sponsor should default on any terms of the agreement.

    (e) Any resolution of the Water Development Authority approving loan, loan guarantee, grant or other assistance shall include a finding and determination that the requirements of this section have been met.

    (f) The interest rate on any loan to governmental, quasi- governmental or not-for-profit project sponsors for projects made pursuant to this article shall not exceed three percent per annum. Due to the limited availability of funds available for loans for projects, it is the public policy of this state to prioritize funding needs to first meet the needs of governmental, quasi-governmental and not-for-profit project sponsors and to require that loans made to for-profit entities shall bear interest at the current market rates. Therefore, no loan may be made by the council to a for-profit entity at an interest rate which is less than the current market rate at the time of the loan agreement.

    (g) The Water Development Authority shall cause an annual audit to be made by an independent certified public accountant of its books, accounts and records, with respect to the receipts, disbursements, contracts, leases, assignments, loans, grants and all other matters relating to the financial operation of the Infrastructure Fund, including the operating of any subaccount within the Infrastructure Fund. The person performing such audit shall furnish copies of the audit report to the commissioner of finance and administration, where they shall be placed on file and made available for inspection by the general public. The person performing such audit shall also furnish copies of the audit report to the Legislature's Joint Committee on Government and Finance.

    (h) There is hereby created in the Water Development Authority a separate, special account which shall be designated and known as the West Virginia Infrastructure Lottery Revenue Debt Service Fund, into which shall be deposited annually for the fiscal year beginning July 1, 2011, and each fiscal year thereafter, the first $6 million transferred pursuant to section eighteen-d, article twenty-two, chapter twenty-nine of this code and any other funds provided therefor: Provided, That such deposits and transfers are not subject to the reservations of funds or requirements for distributions of funds established by sections ten and eleven of this article. Moneys in the West Virginia Infrastructure Lottery Revenue Debt Service Fund shall be used to pay debt service on bonds or notes issued by the Water Development Authority for watershed compliance projects as provided in section seventeen-b of this article, and to the extent not needed to pay debt service, for the design or construction of improvements for watershed compliance projects. Moneys in the West Virginia Infrastructure Lottery Revenue Debt Service Fund not expended at the close of the fiscal year do not lapse or revert to the General Fund but are carried forward to the next fiscal year.


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    (NOTE: The purpose of this bill is to increase the maximum aggregate funding amount from 13% to 15% for the Revenue Shortfall Reserve Fund; dedicate all interest and other earnings on moneys in Revenue Shortfall Reserve Fund - Part B to the State’s Medicaid program; create the West Virginia Infrastructure Modernization and Development Special Revenue Fund in the State Treasury; specify the funding source for the West Virginia Infrastructure Modernization and Development Special Revenue Fund; specify the use of funds in the West Virginia Infrastructure Modernization and Development Special Revenue Fund; provide ability of State Road Fund to accept and expend funds transferred from the West Virginia Infrastructure Modernization and Development Special Revenue Fund; and provide ability of West Virginia Infrastructure Fund to accept and expend funds transferred from the West Virginia Modernization and Development Special Revenue Fund.


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


    §11B-2-20a is new; therefore, strike-throughs and underscoring have been omitted.)

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