Senate Bill No. 508

(By Senators Unger, Jenkins and Kessler (Mr. President))

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[Introduced February 7, 2014; referred to the Committee on Government Organization; and then to the Committee on Finance.]

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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §29-3E-1, §29-3E-2 and §29-3E-3, all relating to the establishment of the Volunteer Departments Loan Fund within the State Treasurer’s Office; providing the power of the State Fire Commission to withdraw money from the fund; and providing amounts that the State Fire Commission may loan to volunteer departments.

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 §29-3E-1, §29-3E-2 and §29-3E-3, all to read as follows:

ARTICLE 3E. VOLUNTEER DEPARTMENTS LOAN FUND.

§29-3E-1. Establishing the Volunteer Departments Loan Fund.

    (a) Beginning July 1, 2014, there is created within the State Treasury a fund designated the Volunteer Departments Loan Fund. The fund shall have credited to it all appropriations for volunteer fire departments made by the Legislature, other than appropriations for expenses of administering this article or grants from other sources to the State Fire Commission as well as repayment of principal and interest on loans made under this article.

    (b) Upon approval of a loan, the State Fire Commission shall routinely requisition from the fund amounts as allocated by the State Fire Commission for loans to volunteer fire departments. When the amounts allocated as loans to volunteer fire departments are repaid pursuant to the terms of the agreements made and entered into with the commission, the commission shall pay those amounts into the fund. The fund shall operate as a revolving fund in which all appropriations and payments made to it may be applied to the purposes of this article.

    (c) Upon written request to the State Treasurer, the State Fire Commission may withdraw money from the fund to provide loans in a manner pursuant to section two of this article.

§29-3E-2. State Fire Commission’s use of funds.

    (a) In deciding how to distribute funds in the Volunteer Departments Loan Fund, the State Fire Commission shall have the power to:

    (1) Establish criteria for determining the need for firefighting equipment apparatuses, ambulances and rescue vehicles and to establish guidelines and procedures for volunteer fire departments to show just cause to determine the need; and

    (2) Propose legislative rules it deems necessary to carry out its powers and duties under this article;

    (3) Specify priority of any liens against any facilities, apparatus equipment, ambulances, rescue vehicles or any equipment purchased by volunteer companies using funds loaned under this article and to pay any part of the purchase price. The State Fire Commission may specify the type of liens or collateral authorized as security under this subsection; and

    (4) Reject a loan application based on the criteria established under subdivision (1) of this subsection.

§29-3E-3. Providing loans to volunteer fire departments.

    (a)(1) The State Fire Commission is authorized, upon application by any volunteer fire department, volunteer ambulance service or volunteer rescue squad, to make loans as provided in this subsection.

    (2) A loan may be made to establish or modernize a facility that houses firefighting equipment, ambulance or rescue vehicles. The amount of a loan for establishing or modernizing facilities made to any one volunteer fire department, ambulance service or rescue squad may not exceed fifty percent of the total cost of the facilities or modernization or $400,000, whichever is less. Proceeds of the loan shall be used only for purposes of structure, land acquisition, renovation and construction, but may not be used for payment of fees for design, planning, preparation of applications or any other cost not directly attributable to structure, land acquisition, renovation or construction.

    (3) A loan may be made to purchase firefighting apparatuses, ambulances or rescue vehicles. The amount of a loan made to any one volunteer fire department, ambulance service or rescue squad for any ambulance or light duty rescue vehicle as defined by rule may not exceed $100,000 and for a watercraft rescue vehicle may not exceed $30,000 or fifty percent of the cost of the ambulance or rescue vehicle, whichever is less.

    (4) A loan may be made to a volunteer fire department, ambulance service or rescue squad for the purchase of protective, accessory or communication equipment once in any five-year period. Each volunteer fire department, ambulance service or rescue squad may apply for a loan for a mobile and portable radio unit for each existing serviceable apparatus equipment, ambulance or rescue vehicle. Radio equipment obtained through loans under this article shall be equipped with a frequency or frequencies licensed by the Federal Communications Commission for firefighting or emergency response purposes. Loans made under this subsection for the purchase of protective, accessory or communicative equipment shall not exceed $20,000.

    (5) A loan may be made to a volunteer fire department, ambulance service or rescue squad to pay for debt incurred or entered into after the enactment of this article, and used for the purchase of apparatus equipment or for the construction or modernization of facilities or for modification of apparatus equipment in order to comply with National Fire Protection Association standards.

    (6) A loan may be made to a volunteer fire department, ambulance service or rescue squad for the repair or rehabilitation of apparatus equipment. Where it has been determined that existing apparatus equipment no longer meets the standards of the National Fire Protection Association and the repair or rehabilitation of such equipment will bring it in compliance with National Fire Protection Association standards, loans for the repair or rehabilitation for a single apparatus equipment shall be for at least $2,000 but may not exceed the lesser of $70,000 or eighty percent of the total cost of repairs or rehabilitation.

    (7) A loan may be made to a volunteer fire department, ambulance service or rescue squad for the purchase of used firefighting apparatuses, equipment, used ambulances, used rescue vehicles, used communications equipment, used accessory equipment or used protective equipment. Any used vehicles and equipment purchased shall meet the National Fire Protection Association standards and loans for the purchase of a used single apparatus equipment shall not exceed $120,000 or eighty percent of the total cost of the equipment, whichever is less.

    (8) A loan may be made to a volunteer fire department, ambulance service or rescue squad for the purchase of any hardware and software needed for fire information reporting. Volunteer fire departments, ambulance services and rescue squads are eligible to apply one time only for a loan of not more than $4,000 or seventy-five percent of the cost of an acquisition, whichever is less, and with a term not exceeding five years for the purpose of acquiring the any necessary hardware and software. The State Fire Commission shall develop, at its discretion, procedures and forms as it may deem necessary to facilitate loans for hardware and software.

    (b) Loans made by the commission in the amount of $30,000 or less are for a period of no more than five years. Loans in excess of $30,000 but for $100,000 or less are for a period of not more than fifteen years. The payback period of any loan in excess of $100,000, except a loan for establishing or modernizing facilities, may not exceed twenty years. The payback period for any loan in excess of $200,000 for establishing or modernizing facilities may not exceed twenty years. Loans are subject to the payment of interest at two percent annually and are subject to such security as determined by the commission. The total amount of interest earned by the investment or reinvestment of all or any part of the principal of any loan shall be returned to the commission and transferred to the Volunteer Departments Loan Fund and may not be credited as payment of principal or interest on the loan. Except as provided in subdivisions(5) and (7) of subsection (a) of this section, the minimum amount of any loan shall be $10,000.

    (c) Every application for a loan shall be accompanied by a notarized financial statement of the volunteer fire department, ambulance service or rescue squad and a financial plan to show the amount of assets and projected revenues for the repayment of the loan, any other obligations and operating expenses over the period of the loan. Every application shall be accompanied by evidence sufficient to show that all costs except the amount of the loan have been obtained by assets of the volunteer department and other loans or sources of revenue.

    (d) Loans used for the acquisition by volunteer departments of new or used apparatus equipment, new or used ambulances, new or used rescue vehicles, new or used communications equipment, new or used accessory equipment or new or used protective equipment or for the acquisition and renovation of existing structures to house firefighting equipment, ambulance or rescue vehicles or for the construction or modernization of facilities and, except as provided in subdivision (4) of subsection (a) of this section, may not be used for operating expenses or for the refinancing of renovated structures, refinancing of construction or modernization of facilities, apparatus equipment, communication equipment, accessory equipment, or, except as provided in subdivision (4) of subsection (a) of this section, shall be made or used to reduce any debt or other obligations issued prior to the effective date of this article.

    (e) Loans made by the State Fire Commission shall be paid from the Volunteer Departments Loan Fund to the volunteer fire departments, ambulance services and rescue squads in accordance with legislative rules.

    (f) All payments of interest on the loans and the principal of loans shall be deposited by the State Fire Commission in the Volunteer Departments Loan Fund.

    (g) A volunteer fire department, ambulance service and rescue squad is eligible for a loan regardless of legal ownership in whole or in part by any political subdivision of any facilities or apparatus equipment used by the volunteer fire department, volunteer ambulance and volunteer rescue squad. Any equipment or facilities financed may be transferred to a political subdivision served by the volunteer fire department, volunteer ambulance service or volunteer rescue squad subject to such security as determined by the State Fire Commission.

    NOTE: The purpose of this bill is to create a fund allowing the State Fire Commission to make loans to volunteer fire departments, ambulance and rescue vehicle services to pay for new and updated equipment.

    This article is new; therefore, strike-throughs and underscoring have been omitted.