Senate Bill No. 44
(By Senators Burdette, Mr. President, and Boley,
By Request of the Executive)
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[Introduced January 17, 1994; referred to the Committee
on Finance.]
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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,
relating to the allocation of industrial revenue bonds;
redefining state allocation procedures; providing a
set-aside for the classified nonexempt projects; and
directing committee review of allocation applications.
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 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) "County commission" means the governmental body created
by section twenty-two, article VIII of the West Virginia
constitution.
(c) "Governmental body" means the county commission, a town
or city council or any other governing body in lieu thereof.
(d) "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) "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.
(f) "Industrial revenue bond allocation review committee"
means a committee of five to be composed of the secretary of
commerce, labor and environmental resources, who shall serve aschair, the secretary of tax and revenue, the executive director
of the development office, the director of the economic
development authority, and the director of the division of
environmental protection.
§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),
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 facilitiesthrough 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
director executive director of the governor's office of
community and industrial development development office
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 WestVirginia Development Office and shall be hereinafter in this
section referred to 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 specifically made available to lessees, purchasers or
owners of proposed projects which do not qualify as exempt
facilities as defined by United States Revenue Code [26-U.S.C.§
142(a)]. Such allocations shall be approved and awarded by the
industrial revenue bond allocation review 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 amount shall revert back to and become an unencumbered part
of the state allocation.
(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 thecounty 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. Allocations of the
remaining portion of the state allocation shall be made to
lessees, purchasers or owners of proposed commercial or
industrial projects which qualify as exempt facilities as defined
by United States Revenue Code [26 U.S.C. §142(a)]: Such
allocations shall be approved and awarded by the industrial
revenue bond allocation 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 allocation 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. Prior to any
allocation, the county in which the project is to be located
shall submit an application for reservation of funds as provided
in subsection (f) of this section. The county commission mustfirst adopt an inducement resolution approving the prospective
issuance of bonds and setting forth the amount of bonds to be
issued. Following the adoption of such inducement resolution, a
notice of inducement signed by the clerk, secretary, recorder or
other appropriate official shall be forwarded to the West
Virginia development office. The notice shall include such
information as may be required by rule or regulation.
(e) Distribution of both the county and state Allocations
to lessees, purchasers or owners of proposed commercial or
industrial projects shall be on a first come, first serve basis
and shall not be distributed or allocated for any project until
the governmental body, seeking the same shall submit an
application for reservation of funds as provided in subsection
(f) of this section. The governmental body must first adopt an
inducement resolution approving the prospective issuance of bonds
and setting forth the amount of bonds to be issued. Each
governmental body, which includes the West Virginia public energy
authority, seeking an allocation of the state ceiling 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 council for
community and economic development by rule or regulation.
Notwithstanding the foregoing, when an issuer described in thissection 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
an allocation from the state ceiling available for any year
subsequent to the year in which application is made (other than
the amount to be allocated 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 may be made to
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) (c) of this section for such year). A
discretionary allocation 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) Currently with or following the submission of its notice
of inducement, the governmental body at any time deemed expedientby 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.
(g) The development office shall accept the notice of
reservation of funds no earlier than the first calendar work day
of the year for which an allocation is sought. 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, ifsuch 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) (h) 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
development office, as required by the provisions of subsection
(g) of this section, or the thirty-first day of December
following such date of certification 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 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 state allocation, as the case may
be, from which the funds were originally reserved and allocation
will then be made available for other qualified issues in
accordance with this section and the Internal Revenue Code:
Provided,
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 reservation of funds and the allocation to which the
same relates shall not expire or be subject to forfeiture:
Provided, however,
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 be treated in the samemanner as a new notice of reservation of funds in accordance with
subsections (f) (e) and (g) (f) above.
(j) (i) Once a reservation of an allocation has been made to
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) (h) 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) (h) 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.
NOTE: The purpose of this bill is to redesign allocation
procedures regarding tax-free 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. As currently structured, the article
provides for state and county allocations. Upon expenditure of
the state allocation, county allocations can be expired and
expropriated, and thereby replenish the state allocation. In
practice, the state allocation is committed immediately, and the
county allocation is expired and expropriated within hours of its
conveyance. This bill corrects the inefficient procedure by
restructuring allocation procedures in a manner which maximizes
economic benefit to the citizens of the state by providing for
evaluative committee review of proposed projects, as well as, a
time limited allocation set-aside conceived to promote job
creation maximization.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.