COMMITTEE SUBSTITUTE

FOR

H. B. 4032


(By Mr. Speaker, Mr. Chambers, and Delegate Burk)

[By Request of the Executive]



(Originating in the House Committee on Finance)


[February 11, 1994]


A BILL to amend and reenact sections three and twenty-one, article two-c, chapter thirteen 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 three-a, all relating to the allocation of industrial revenue bonds; creating industrial revenue bond allocation review committee; redefining state allocation procedures; and providing a set-aside for classified nonexempt projects.
Be it enacted by the Legislature of West Virginia:

That sections three and twenty-one, article two-c, chapter thirteen 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 three-a, all to read as follows:

ARTICLE 2C. INDUSTRIAL DEVELOPMENT AND COMMERCIAL DEVELOPMENT BOND ACT.

§ 13 - 2C - 3. Definitions.

Unless the context clearly indicates otherwise, as used in this article:
(a) "Commercial project" means real or personal property or both, including any buildings, improvements, additions, extensions, replacements, appurtenances, lands, rights in land, water rights, franchises, machinery, equipment, furnishings, landscaping, utilities, railroad spurs and sidings, parking facilities, farms, parking wharfs, approaches and roadways or any number or combination of the foregoing necessary or desirable in connection with a commercial enterprise or incidental thereto and includes, without limiting the generality of the foregoing, hotels and motels and related facilities, nursing homes and other health care facilities, facilities for participatory or spectator sports, conventions or trade show facilities, airport facilities, shopping centers, office buildings, residential real property for family units, and mass commuting facilities, dormitories, apartments and other housing facilities for the students and faculties of institutions of higher education, instructional buildings and other facilities used in connection with nonpublic institutions of higher education, facilities providing housing for the elderly, including, but not limited to, life care facilities, congregate living facilities and adult residential facilities.
(b) "Committee" means the industrial revenue bond allocation committee created by section three-a of this article.
(b)(c) "County commission" means the governmental body created by section twenty-two, article VIII of the West Virginia constitution.
(c)(d) "Governmental body" means the county commission, a town or city council or any other governing body in lieu thereof any city, town, village, county, public service district, sanitary district, political subdivision or any other similar public entity now or hereafter created, having power to issue revenue bonds, and the West Virginia public energy authority.
(d)(e) "Industrial project" means any site, structure, building, industrial park, water dock, wharf or port facilities, fixtures, machinery, equipment and related facility, including real and personal property, or any combination thereof, suitable as a factory, mill or shop, or processing, assembly, manufacturing or fabricating project, or warehouse or distribution facility, or facilities for the extraction, production or distribution of mineral resources and related facilities, or sewage or solid waste disposal facilities, or facilities for the local furnishing of electric energy or gas, or facilities for the furnishing of water, if available on reasonable demand to members of the general public, or storage or training facilities related to any of the foregoing, or research or development facility or pollution abatement or control facility and includes the reconstruction, modernization and modification of any existing industrial project for the abatement or control of industrial pollution.
(e)(f) "Industrial pollution" means any gaseous, liquid or solid waste substances or adverse thermal effects or combinations thereof resulting from any process of industry, manufacturing, trade or business or from the development, processing or recovery of any natural resources which pollute the land, water or air of this state.
§ 13 - 2C - 3a. Creation of industrial revenue bond allocation review committee; appointment, term, etc., of private members; voting; expenses; duties.

(a) There is hereby created the West Virginia industrial revenue bond allocation review committee consisting of five members, two of whom shall be the secretary of tax and revenue, who shall serve as chair of the committee, and the executive director of the development office, and three of whom shall be chosen from the general public as private members.

(b) The three private members shall be appointed by the governor, with the advice and consent of the Senate: Provided, That one private member shall be appointed from each congressional district of the state, in such a manner as to provide a broad geographical distribution of members of the committee: Provided, however, That at least one private member appointed pursuant to this subdivision shall have significant experience in economic development. No more than two private members shall be from the same political party.
(c) Not later than the first day of July, one thousand nine hundred ninety-four, the governor shall appoint the three private members for staggered terms. The terms of the members first taking office on or after the effective date of this legislation shall expire as designated by the governor at the time of the nomination, one at the end of the first year, one at the end of the second year, and one at the end of the third year, after the first day of July, one thousand nine hundred ninety-four. As these original appointments expire, each subsequent appointment shall be for a full three-year term. Any member whose term has expired shall serve until a successor has been duly appointed and qualified. Any member shall be eligible for reappointment. In case of any vacancy in the office of a private member, such vacancy shall be filled by appointment by the governor for the unexpired term. The governor may remove any private member in case of incompetency, neglect of duty, gross immorality, or malfeasance in office; and he may declare the office vacant and may appoint a person for such vacancy as provided in other cases of vacancy.
(d) Members 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.
(e) A majority of the members of the committee shall constitute a quorum for the purpose of conducting business. The affirmative vote of at least the majority of the members present is necessary for any action taken by vote of the committee. No vacancy in the membership of the committee shall impair the right of a quorum to exercise all the rights and perform all the duties of the committee.
(f) The committee shall review and evaluate all applications for reservation of funds submitted to the development office by a governmental body pursuant to the provisions of subsections (d) and (e), section twenty-one of this article, and shall make reservations of the state allocation (as defined in subdivision two, subsection (b), section twenty-one of this article) pursuant to subdivision three, subsection (b) and subsection (c), section twenty-one of this article.
§ 13 - 2C - 21. Ceiling on issuance of private activity bonds; establishing procedure for allocation and disbursements; reservation of funds; limitations; unused allocation; expirations and carryovers.

(a) Private activity bonds (as defined in section 141(a) of the United States Internal Revenue Code of 1986, other than those described in section 146(g) of the Internal Revenue Code) issued pursuant to this article, including bonds issued by the West Virginia public energy authority pursuant to subsection (8)(11), section five, article one, chapter five-d of this code, or under article eighteen, chapter thirty-one of this code, during any calendar year shall not exceed the ceiling established by section 146(d) of the United States Internal Revenue Code. It is hereby determined and declared as a matter of legislative finding (i) that the production of bituminous coal in this state has resulted in coal waste, which coal waste is stored in areas generally referred to as gob piles; (ii) that such gob piles are unsightly and have the potential to pollute the environment in this state; (iii) that the utilization of the materials in such gob piles to produce alternative forms of energy needs to be encouraged; (iv) that section 142(a)(6) of the United States Internal Revenue Code of 1986 permits the financing of solid waste disposal facilities through the issuance of such private activity bonds; (v) that it is in the best interest of this state and the citizens thereof to facilitate the construction of facilities for the generation of power through the utilization of coal waste by providing an orderly mechanism for the commitment of the annual ceiling for private activity bonds for such projects.

(b) On or before the first day of each calendar year, the executive director of the governor's office of community and industrial development development office shall determine the state ceiling for such year based on the criteria of the United States Internal Revenue Code, which annual ceiling shall be allocated among the several issuers of bonds under this article or under article eighteen, chapter thirty-one of this code, as follows:
(1) Fifty million dollars shall be allocated to the West Virginia housing development fund for the purpose of issuing qualified mortgage bonds, qualified mortgage certificates or bonds for qualified residential rental projects.
(2) One half the total state ceiling for each year remaining after the allocation to the West Virginia housing development fund described in subdivision (1) shall be allocated to the counties on a per capita basis and, unless the context in which used requires otherwise, shall be hereinafter in this section referred to as the "county allocation." The amount remaining after the allocation to the West Virginia Housing Development Fund described in subdivision (1) shall be retained by the West Virginia Development Office and shall be referred to in this section as the "state allocation."
(3) One half of the total state ceiling for each year remaining after the allocation to the West Virginia housing development fund described in subdivision (1) shall be retained by the state of West Virginia by the governor's office of community and industrial development and, unless the context in which used requires otherwise, shall be hereinafter in this section referred to as the "state allocation." Thirty percent of the state allocation shall be set aside by the development office to be made available for lessees, purchasers or owners of proposed projects, hereafter in this section referred to as "nonexempt projects", which do not qualify as exempt facilities as defined by United States Revenue Code [26 U.S.C.§ 142(a)]. All reservations of private activity bonds for nonexempt projects shall be approved and awarded by the committee based upon an evaluation of general economic benefit and any rule or regulation that the council for community and economic development may promulgate pursuant to section three, article two, chapter five-b of this code: Provided, That on the first day of September of each calendar year the uncommitted portion of this part of the state allocation shall revert to and become part of the state allocation portion described in subsection (c) of this section.
(c) The director of the governor's office of community and industrial development shall notify each clerk of the county commission of that county's apportionment from the county allocation. All apportionments made to any county from the county allocation shall be for issues of the county commission of that county and for issues of all municipalities or other governmental bodies within that county. The remaining seventy percent of the state allocation shall be made available for lessees, purchasers or owners of proposed commercial or industrial projects which qualify as exempt facilities as defined by section 142(a) of the United States Internal Revenue Code [26 U.S.C. § 142(a): All reservations of private activity bonds for exempt facilities shall be approved and awarded by the committee based upon an evaluation of general economic benefit and any rule or regulation that the council for community and economic development may promulgate pursuant to section three, article two, chapter five-b of this code: Provided, That no such reservation shall be in an amount in excess of fifty percent of this portion of the state allocation.
(d) Notwithstanding the foregoing, in the event the state allocation is fully distributed prior to the first day of July of each calendar year, the governor's office of community and industrial development may reallocate all or any portion of the then remaining county allocation to the state upon the director's notification of such action to the clerk of the several county commissions. Any reallocations of less than all of the then remaining county allocation shall be made proportionately from each county's apportionment then remaining.
(e)(d) Distribution of both the county and state allocation to lessees, purchasers or owners of proposed commercial or industrial projects shall be on a first come, first serve basis and No reservation shall not be distributed or allocated be made for any project until the governmental body, seeking the same shall submit an application for notice of reservation of funds as provided in subsection (f)(e) of this section. The governmental body must first adopt an inducement resolution approving the prospective issuance of bonds and setting forth the maximum amount of bonds to be issued. Each governmental body, which includes the West Virginia public energy authority, seeking an allocation reservation of the state ceiling funds following the adoption of such inducement resolution shall submit a notice of inducement signed by its clerk, secretary or recorder or other appropriate official to the governor's office of community and industrial development development office. Such notice shall include such information as may be required by the governor's office of community and industrial development by development office pursuant to any rule or regulation of the council for community and economic development. Notwithstanding the foregoing, when an issuer described in this section governmental body proposes to issue bonds for the purpose of constructing an energy producing project which relies, in whole or in part, upon coal waste as fuel, to the extent such project qualifies as a solid waste facility under section 142(a)(6) of the United States Internal Revenue Code of 1986, such project may be given awarded an allocation reservation of funds from the state ceiling allocation available for any three years subsequent to the year in which application the notice of reservation of funds is made submitted, (other than the amount to be allocated reserved pursuant to subdivision (1) of subsection (b) of this section), at the discretion of the director of the governor's office of community and industrial development executive director of the development office: Provided, That no such discretionary allocation reservation may be made to for any single project in an amount in excess of forty thirty-five percent of the state ceiling allocation available for such year subsequent to the year in which the request is made (exclusive of the amount to be allocated pursuant to subdivision (1) of subsection (b) of this section for such year). A discretionary allocation reservation of the state ceiling allocation for a project described in the preceding sentence shall not be granted by the director of the governor's office of community and industrial development executive director of the development office unless the project for which the request is made has received a certification from the Federal Energy Regulatory Commission as a qualifying facility or a cogeneration project.
(f)(e) Currently with or following the submission of its notice of inducement, the governmental body at any time deemed expedient by it may submit its notice of reservation of funds which shall include the following information:
(1) The date of the notice of reservation of funds;
(2) The identity of the governmental body issuing the bonds;
(3) The date of inducement and the prospective date of issuance;
(4) The name of the entity for which the bonds are to be issued;
(5) The amount of the bond issue, or, if the amount of the bond issue for which a reservation of funds has been made has been increased, the amount of the increase;
(6) The type of issue; and
(7) A description of the project for which the bonds are to be issued.
(f) The development office shall accept the notice of reservation of funds no earlier than the first calendar work day of the year for which a reservation of funds is sought: Provided, That a notice of reservation of funds with respect to an energy producing project that is eligible for a reservation of funds for a year subsequent to the year in which the notice of reservation of funds is submitted may contain an application for funds from a subsequent year's state allocation. Upon receipt of the notice of reservation of funds, the development office shall immediately note upon the face of such notice the date and time of reception.
(g)(1) Upon receipt of the notice of reservation of funds by the governor's office of community and industrial development, such office shall immediately note upon the face of such notice the date and time the same was so received and shall within ten days certify to the governmental body submitting the same (A) that the statewide ceiling has not been exceeded, if such be the case, and (B) that the amount of the bond issue has been allocated and reserved in the name of such governmental body for the project for which the bonds are to be issued and, thereafter, the amount of such bond issue shall be so allocated and reserved.
(2) In the event the amount required in the notification of reservation of funds, as provided for in subdivision (1) of this subsection, exceeds the apportionment available to that county from the county allocation, the governor's office of community and industrial development shall immediately notify the governmental body proposing to issue such bonds of that fact and such body may apply to such office for an apportionment to the extent of such excess from the state allocation.
(h) The governmental body shall submit a new notice of reservation of funds pursuant to subsections (f) and (g) above for any increase in the amount of a bond issue for which a reservation of funds has been made. Such notice shall be treated as a new request for a reservation of funds to the extent of such increase.
(i) If the bond issue for which a reservation has been made has not been finally closed within one hundred twenty days of the date of the certification of reservation to be made by the governor's office of community and industrial development committee, as required by the provisions of subsection (g) of this section, or the thirty-first day of December following such date of certification reservation if sooner and a statement of bond closure which has been executed by the clerk, secretary, recorder or other appropriate official of the governmental body reserving the same has not been received by such the development office within that time, then such reservation shall expire and be deemed to have been forfeited and the funds so reserved shall be released and revert to the county and/or portion of the state allocation, as the case may be, from which the funds were originally reserved and allocation will shall then be made available for other qualified issues in accordance with this section and the Internal Revenue Code: Provided, That, as to any reservation for a nonexempt project that is forfeited on or after September 1 in any calendar year, such reservation shall revert to the portion of the state allocation described in subsection (c) of this section: Provided, however, That, as to any notice of reservation of funds received by the governor's office of community and industrial development development office during the month of December in any calendar year with respect to any project qualifying as an elective carry forward pursuant to section 146(f)(5) of the Internal Revenue Code, such notice of reservation of funds and the allocation reservation to which the same relates shall not expire or be subject to forfeiture: Provided further, That any unused state ceiling as of the thirty-first day of December in any year not otherwise subject to a carry forward pursuant to section 146(f) of the Internal Revenue Code shall be allocated to the West Virginia housing development fund, which shall be deemed to have elected to carry forward the unused state ceiling for the purpose of issuing qualified mortgage bonds, qualified mortgage credit certificates or bonds for qualified residential rental projects, each as defined in the Internal Revenue Code. All requests for subsequent reservation of funds and reallocation upon loss of a reservation pursuant to this section will shall be treated in the same manner as a new notice of reservation of funds in accordance with subsections (f) (d) and (g) (e) above.
(j) (h) Once a reservation of an allocation funds has been made to for an energy producing project which relies, in whole or in part, upon coal waste as fuel and otherwise qualifies as a solid waste facility under section 142(a)(6) of the United States Internal Revenue Code of 1986, notwithstanding the language of subsection (i) (g) of this section, such reservation shall remain fully available with respect to such project until the first day of October in the year from which the reservation of allocation was made at which time, if the bond issue has not been finally closed, the reservation shall expire and be deemed forfeited and the funds so reserved shall be released as provided in subsection (i) (g) of this section.
(k) Any amount of the county allocation remaining unreserved on the first day of October in any calendar year (which amount shall be determined by the director of the governor's office of community and industrial development) shall revert to the state allocation for the remainder of that year, and all notification of reservation of funds by either the state or any county submitted on or after such date shall be treated on a first come, first serve basis.
(l) The amendments to this section adopted by the Legislature at the regular session thereof, held in the year one thousand nine hundred eighty-nine, shall apply and be effective with respect to such year and to all subsequent years.