Senate Bill No. 438
(By Senators Tomblin (Mr. President) and Sprouse
By Request of the Executive)
[Introduced February 10, 2000; referred to the Committee on
A BILL to amend chapter thirty-one of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article eighteen-d, relating
to the establishment and administration of a West Virginia
affordable housing trust fund; legislative findings and
purpose; definitions; creating an affordable housing trust
fund board of directors; setting forth board of directors'
powers and responsibilities; defining eligible activities and
organizations; corporate powers; requiring an application
period and selection criteria; confidentiality; conflicts; tax
exemption; requiring the publication of an annual report;
exemptions from certain requirements; requiring an annual
audit by a licensed accountant; and severability.
Be it enacted by the legislature of West Virginia:
That chapter thirty-one of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by adding
thereto a new article, designated article eighteen-d, to read as
ARTICLE 18D. WEST VIRGINIA AFFORDABLE HOUSING TRUST FUND.
§31-18D-1. Short title.
This article shall be known as the "West Virginia Affordable
Housing Trust Fund Act."
§31-18D-2. Legislative finding and purpose.
The Legislature finds that current and past economic
conditions in this state, changing federal housing policies which
devolve responsibility for housing back to state government,
declining resources at the federal level and changing demographics
have resulted in low and moderate income persons, including elderly
persons and persons with special needs, being unable to obtain
safe, decent and affordable housing in this state. Lack of
affordable housing affects the ability of communities to develop
and maintain strong and stable economies and impairs the health,
stability and self-esteem of individuals and families. The
Legislature further finds that financing affordable housing,
especially in rural areas and small communities, is becoming
increasingly difficult and is often characterized by fragmented,
uncoordinated, burdensome and expensive funding mechanisms. For these reasons, it is in the public interest to establish a new
resource known as the West Virginia affordable housing trust fund
to encourage stronger partnerships, collaboration and greater
involvement of local communities in meeting housing needs in West
Virginia. It is the intent of the Legislature that this trust
fund shall assist in increasing the capacity of community housing
organizations and encourage private sector businesses and
individuals to contribute capital to community-based organizations
and assist them in providing safe, decent and affordable housing to
(a) "Board" is the board of directors of the West Virginia
affordable housing trust fund established pursuant to this article.
(b) "Housing" includes owner-occupied dwellings, rental units,
and other types of shelter for individuals and families.
(c) "Low or moderate income" means the income of individuals
or families that is determined from time to time by the board as a
percentage of the area median income for the state. The board may
use the income data provided by the United States department of
housing and urban development or other reliable income data as
determined by a resolution of the board.
(d) "Technical assistance" means activities that are directly
related to a nonprofit organization's ability to provide housing for low income persons and includes, but is not limited to, land
use and planning costs, design and engineering services, loan
packaging assistance, program development assistance and
(e) "Trust fund" means the West Virginia affordable housing
trust fund established by this article.
§31-18D-4. Affordable housing trust fund.
There is hereby established a governmental instrumentality of
the state and public body corporate to be known as the West
Virginia affordable housing trust fund.
§31-18D-5. Housing trust fund board of directors.
(a) There is hereby created an affordable housing trust fund
board of directors, which shall consist of eleven voting members.
The members of the board shall be responsible for administering the
(b) The trust fund board of directors shall consist of:
(1) The secretary of the department of health and human
resources, or his or her designee, who shall serve as chairperson
and shall have voting authority;
(2) The executive director of the West Virginia development
office, or his or her designee, who shall serve as an ex officio
member and shall have voting authority;
(3) The executive director of the West Virginia housing development fund, or his or her designee, who shall serve as an ex
officio member and shall have voting authority;
(4) One member who is currently serving as an appointed
private director of the board of the West Virginia housing
(5) One member who shall be an officer of a corporation or
member of a limited liability company, which is currently licensed
to do business in West Virginia and is engaged in real estate
(6) Four members who shall be executive directors or officers
of not-for-profit organizations, which are not affiliated with one
another through common management control and which currently hold
charitable organization status under Section 501(c)(3) [26 U.S.C.
§501(c)(3)] of the Internal Revenue Code, and are currently
licensed to do business in West Virginia and provide housing
assistance to low or moderate income citizens of this state;
(7) One member representative of the banking industry;
(8) One citizen member who shall be representative of the
population served by the trust fund.
(c) Not more than three members, excluding the ex officio
members, shall be appointed from any one congressional district.
Not more than four of the members, excluding the ex officio
members, may belong to the same political party. Except for initial appointments and midterm special appointments made to fill
irregular vacancies on the board, members shall be appointed for
terms of three years each. Initial appointments shall consist of
three members whose terms expire after two years, three members
whose terms expire after three years and two members whose terms
expire after four years. Members shall be eligible for
reappointment. However, no member may serve for more than two
consecutive full terms. Except for midterm special appointments
made to fill irregular vacancies on the board, appointment terms
shall begin on the first day of July of the beginning year. All
appointment terms, special and regular, shall end on the thirtieth
day of June of the final year of the term.
(d) All members of the board shall be appointed by the
governor and shall be confirmed by the senate.
(e) The governor may remove any appointed member in case of
incompetency, neglect of duty, moral turpitude or malfeasance in
office, and the governor may declare the office vacant and fill the
vacancy as provided in other cases of vacancy.
(f) The board shall meet not less than four times during the
fiscal year, and additional meetings may be held upon a call of the
chairperson or of a majority of the members. Board members shall
be reimbursed for sums necessary to carry out responsibilities of
the board and for reasonable travel expenses to attend board meetings: Provided, That the chairperson and ex officio members
may not be reimbursed by the fund for travel expenses to attend
Six members of the board shall constitute a quorum. No
vacancy in the membership of the board shall impair the right of a
quorum to exercise all the rights and perform all the duties of the
board. No action shall be taken by the board except upon the
affirmative vote of at least six of the members.
§31-18D-6. Powers and responsibilities of the board.
(a) It shall be the duty of the board to manage and control
the affordable housing trust fund. In order to carry out the
day-to-day management and control of the trust fund and effectuate
the purposes of this article, the board may appoint an executive
director and other staff. The board shall fix the executive
director's duties and compensation as well as that of other staff.
The executive director and other staff shall serve at the will and
pleasure of the board. The board may provide for staff payroll and
employee benefits in the same manner as the West Virginia housing
development fund provides for its employees.
(b) The members of the board and its officers shall not be
liable personally, either jointly or severally, for any debt or
obligation created by the board.
(c) Members of the board and its officers and employees shall be provided insurance coverage by the state's risk and insurance
management board to the same extent and in the same manner such
coverage is applicable to state government agencies and appointed
state officials and employees: Provided, That the board may elect
to obtain other forms of insurance coverage as it deems reasonable
for its operations;
(d) The acts of the board shall be solely acts of its
corporation and shall not be deemed to be those of an agent of the
state, nor shall any debt or obligation of the board be deemed to
be a debt or obligation of the state.
(e) The board shall:
(1) Develop and implement comprehensive policies and programs
for the use of the trust fund that ensures the equitable
distribution of moneys from the trust fund throughout the various
geographic areas of this state and between urban and rural areas of
(2) Develop and implement an application and selection system
to identify housing sponsors or providers of affordable housing
developments or programs that qualify to receive assistance from
the trust fund for eligible activities;
(3) Provide funds for technical assistance to prospective
(4) Monitor services, developments, projects or programs receiving assistance from the trust fund to ensure that the
developments are operated in a manner consistent with this article
and in accordance with the representations made to the trust fund
board by the sponsors of the services, developments, projects or
(5) Recommend legislation to further its mission of providing
housing for low to moderate income citizens of this state;
(6) Provide funding to increase the capacity of nonprofit
community housing organizations to serve their communities;
(7) Research and study housing needs and potential solutions
to the substandard quality or lack of affordable housing;
(8) Coordinate programs with other entities when doing so
fulfills its mission to provide housing to low to moderate income
citizens of this state;
(9) Convene public meetings to gather information or receive
public comments regarding housing policy or issues; and
(10) Distribute available funds pursuant to policies
established by it which may permit the establishment of a permanent
(11) Serve as a clearing house for information regarding
housing services and providers within this state.
(f) The West Virginia housing development fund shall provide
office space and staff support services for the executive director and the board, shall act as fiscal agent for the board and, as
such, shall provide accounting services for the board, invest all
funds as directed by the board, service all investment and loan
activities of the board as requested, and shall make the
disbursements of all funds as directed by the board, for which the
West Virginia housing development fund shall be reasonably
compensated, as determined by the board.
§31-18D-7. Eligible activities; eligible organizations.
(a) The board shall use the moneys from the trust fund to
make, or participate in the making, of loans or grants for eligible
activities that shall include, but not be limited to:
(1) Providing funds for new construction, rehabilitation,
repair or acquisition of housing to assist low or moderate income
citizens including land and land improvements;
(2) Providing matching funds for federal housing moneys
requiring a local or state match;
(3) Providing funds for administrative costs for housing
assistance programs or nonprofit organizations eligible for funding
pursuant to subsection (b) of this section if the grants or loans
provided will substantially increase the recipient's access to
housing funds or increase its capacity to supply affordable
(4) Providing loan guarantees and other financial mechanisms to facilitate the provision of housing products or services;
(5) Providing funds for down payments, closing costs,
foreclosure prevention, home ownership counseling, and security
bonds which facilitate the construction, rehabilitation, repair or
acquisition of housing by low to moderate income citizens; and
(6) Providing risk underwriting products not provided by
private sector entities to facilitate broader accessibility of
citizens to other federal or state housing funds or loan programs.
Such products shall be established using professional risk
underwriting standards and separate corporate vehicles may be
created and capitalized by the trust fund to provide such products.
(b) Organizations eligible for funding from the trust fund
include local governments, local government housing authorities,
nonprofit organizations holding charitable organization status
under section 501(c)(3) of the Internal Revenue Code that provide
housing assistance to low income persons, and regional or statewide
housing assistance organizations that hold such status.
§31-18D-8. Corporate powers.
The board shall have the power:
(1) To make loans or grants;
(2) To accept appropriations, gifts, grants, bequests and
devises and to utilize or dispose of the same to carry out its
(3) To make and execute contracts, releases, compromises,
agreements and other instruments necessary or convenient for the
exercise of its powers or to carry out its corporate purposes;
(4) To collect reasonable fees and charges in connection with
making and servicing loans, notes, bonds, obligations, commitments
and other evidences of indebtedness, and in connection with
providing technical, consultative and project assistance services;
(5) To sue and be sued;
(6) To have a seal and alter the same at will;
(7) To hire its own employees and appoint such officers and
consultants as it deems advisable, and to fix their compensation
and prescribe their duties;
(8) To acquire, hold and dispose of real and personal property
for its corporate purposes;
(9) To enter into agreements or other transactions with any
federal or state agency, any person and any domestic or foreign
partnership, corporation, association or organization;
(10) To acquire real property, or an interest therein, in its
own name, by purchase, transfer, bequest, gift or foreclosure,
where appropriate or is necessary to protect any loan in which the
board has an interest and to sell, transfer and convey any property
to a buyer and, in the event that a sale, transfer or conveyance
cannot be effected with reasonable promptness or at a reasonable price, to lease property to a tenant;
(11) To purchase or sell, at public or private sale, any
mortgage or other negotiable instrument or obligation securing a
(12) To procure insurance against any loss in connection with
its property in such amounts, and from such insurers, as may be
necessary or desirable;
(13) To consent, whenever it considers it necessary or
desirable in the fulfillment of its corporate purpose, to the
modification of the rate of interest, time of payment or any
installment of principal or interest or any other terms, of an
investment, loan, contract or agreement of any kind to which the
board is a party;
(14) To establish training and educational programs to further
the purposes of this article;
(15) To acquire, by purchase or otherwise, and to hold,
transfer, sell, assign, pool or syndicate or participate in the
syndication of, any loans, notes, mortgages, securities or debt
instruments or other instruments evidencing loans or equity
interests in or for the fostering, repairing, or providing
affordable housing to the citizens of this state;
(16) The board shall have the authority to make, and from time
to time, amend and repeal bylaws and rules and regulations not inconsistent with the provisions of this article;
(17) To have and exercise all other general powers of a
corporation in this state.
§31-18D-9. Applications and selection criteria.
(a) The board shall announce by public notice at least two
periods annually for prospective applicants to submit proposals,
applications or requests for funding. Each period shall be for at
least ninety days duration during each calendar year in which funds
are available from the trust fund. The board shall approve or deny
properly submitted and completed applications, proposals or
requests within sixty days of their receipt.
(b) The board shall determine whether each person making an
application, proposal or request for funding is an eligible entity
and approve as many applications, proposals or requests as will
effectively use the available moneys in the trust fund less costs
required to administer the program. In selecting entities to
receive trust fund assistance, the board shall develop a qualified
allocation and selection plan as often as it deems appropriate in
order to provide affordable housing and improve the capacity of
nonprofit housing entities to supply affordable housing to low and
moderate income citizens of this state. The allocation and
selection plan for each period shall be available for review of
prospective applicants and the general public in sufficient time for prospective applicants to reasonably prepare an application,
project proposal or request for funding.
(c) No moneys may be expended from the trust fund for projects
that discriminate against any buyer or renter because of race,
religion, sex, familial status or national origin.
(d) The board shall forward to the West Virginia housing
development fund for its review and information approved requests,
applications and proposals for funding containing such information
as is necessary to permit the West Virginia housing development
fund to carry out its duties under this article.
§31-18D-10. Documentary materials concerning financial or personal
Any documentary material or data made or received by the board
for the purpose of furnishing assistance, to the extent that such
material or data consists of financial or personal information
regarding the financial position or activities of a for-profit
business or natural person, shall not be considered public records
and shall be exempt from any disclosure pursuant to the provisions
of chapter twenty-nine-b of this code. Any discussion or
consideration of such financial or personal information may be held
by the board in executive session closed to the public,
notwithstanding the provisions of article nine-a, chapter six of
(a) No member of the board or officer, agent or employee
thereof shall hold an ownership interest in any association, trust,
corporation, partnership, limited liability company, or other
entity which is, in his or her own name or name of a nominee, a
recipient of funding from the trust fund.`
(b) No member of the board may participate in the voting on an
application, request for funding or proposal if he or she or an
immediate family member is also an officer, director, employee or
owner of any entity which is a party to the proposed transaction.
§31-18D-12. Tax exemption.
The trust fund shall not be required to pay any taxes and
assessments to the state of West Virginia, or any county,
municipality or other governmental subdivision of the state of West
Virginia, upon any of its property or upon its obligations or other
evidences of indebtedness pursuant to the provision of this
article, or upon any moneys, funds, revenues or other income held
or received by the trust fund and the income therefrom shall at all
times be exempt from taxation, except for death and gift taxes,
taxes on transfers, sales taxes, real property taxes and business
and occupation taxes.
§31-18D-13. Annual report.
The board shall make a report to the governor and the Legislature within ninety days of the close of each fiscal year.
The report shall include summaries of all meetings of the board, an
analysis of the overall progress of the program, fiscal concerns,
the relative impact the program is having on the state, and any
suggestions and policy or legislative recommendations that the
board may have. The report shall include: (i) The applications
funded in the previous calendar year; (ii) the identity of
organizations receiving funds and significant private sector
partners of each project or program; (iii) the location of each
project unless such disclosure would endanger occupants or unduly
invade the privacy of occupants; (iv) the amount, maturity,
interest rate, collateral and other pertinent terms of funding
provided to the project or program and the amount of other funds
leveraged; (v) the number of units of housing created by the
project and the occupancy rate; (vi) the expected cost of rent or
monthly payment for those units; and (vii) the amount of revenue
deposited into the West Virginia affordable housing trust fund.
The report shall be public information made available to the
general public for examination and copying.
§31-18D-14. Exemption from certain requirements; audit.
(a) In order to provide the greatest flexibility to entities
receiving funding from the trust fund, the proposals, applications
and requests funded under this article shall be exempt from the bidding and public sale requirements, from the approval of
contractual agreements by the department of finance and
administration or the attorney general and from the requirements of
chapter five-a of this code.
(b) The trust fund's financial position, activities,
transactions, documents and records shall be subject to an annual
audit by an independent firm of certified public accountants.
§31-18D-15. Severability clause.
If any provision of this article or the application thereof to
any person or circumstance is held invalid, such invalidity shall
not affect other provisions or applications of the article, and to
this end the provisions of this article are severable.
NOTE: This bill creates the West Virginia Affordable Housing
Trust Fund and establishes a board of directors to administer the
This article is new, therefore, strike-throughs and
underscoring are omitted.