H. B. 2206


(By Mr. Speaker, Mr. Kiss, and Delegate Trump)

[By Request of the Executive]

[Introduced February 15, 2001; referred to the

Committee on Government Organization then Finance.]




A BILL to amend and reenact sections four and six, article fifteen, chapter thirty-one 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 seven-a, all relating to definitions, corporate powers, establishing a new markets fund, creating new markets tax credits and rulemaking.

Be it enacted by the Legislature of West Virginia:
That sections four and six, article fifteen, chapter thirty-one 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 seven-a, all to read as follows:
ARTICLE 15. WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY.
§31-15-4. Definitions.
Unless the context clearly indicates otherwise, as used in this article:
(a) "Authority" means the West Virginia economic development authority;
(b) "Board" means the governing body of the authority;
(c) "Board of investments" means the board of investments investment management board established by article six, chapter twelve of this code;
(d) "Bonds" means bonds or other debt instruments of the authority issued under this article, whether the interest thereon is taxable or tax-exempt for federal income tax purposes;
(e) "Business plan" means a document detailing the sales, production and distribution plans of an enterprise, together with the expenditures necessary to carry out those plans (including budget and cash flow projections) on an annual basis, and an employment plan setting forth steps to be taken by the enterprise to retain jobs or reduce unemployment in this state;
(f) "Costs of establishing an industrial development project" means the cost of acquiring existing facilities, cost of machinery, cost of equipment and fixtures, the cost of construction, including without limitation, cost of improvements, repairs, and renovations, costs of all lands, water areas, property rights and easements, financing charges, interest prior to and during construction, cost of architectural, engineering, legal and financial or other consulting services, plans, site assessments, site remediation costs, specifications and surveys, estimates of costs and any other expenses necessary or incident to determining the feasibility or practicability of any project, together with such other costs and expenses as may be necessary or incidental to the financing and the construction or acquisition of the project and the placing of the same in operation;
(g) "County" means any county of this state;
(h) "Enterprise" means an entity which is or proposes to be engaged in this state in any business activity for profit. The entity may be owned, operated, controlled or under the management of a person, partnership, corporation, trust, community-based development organization or council, local commerce group, employee stock ownership plan, pension or profit-sharing plan, a group of participating employees who desire to own an entity which does not presently exist, or any similar entity or organization;
(i) "Federal agency" means the United States of America and any department, corporation, agency or instrumentality created, designated or established by the United States of America;
(j) "Financing plan" means a plan designed to meet the financing needs of an enterprise as reflected in the business plan;
(k) "Fund" means the economic development fund provided for in section twenty-three of this article;
(l) "Government" means state and federal government, and any political subdivision, agency or instrumentality thereof, corporate or otherwise;
(m) "Industrial development agency" means any incorporated organization, foundation, association or agency to whose members or shareholders no profit inures, which has as its primary function the promotion, encouragement and development of industrial, commercial, manufacturing and tourist enterprises or projects in this state;
(n) "Insurance fund" means the insurance fund created in this article;
(o) "Loan" means an extension of financing by the authority to an industrial development agency or an enterprise, including, but not limited to, a loan, a lease or an installment sale;
(p) "Municipality" means any city or town in this state;
(q) "New markets fund" means the new markets fund created in this article;
(r) "New markets tax credits" means the new markets tax credits created in this article;
(q) (s) "Notes" means any notes, including commercial paper, of the authority issued under this article whether the interest thereon is taxable or tax-exempt for federal income tax purposes;
(r) (t) "Project" means a commercial or industrial undertaking and all of the assets reasonably and necessarily required therefor, all as determined by the authority, which determination shall be conclusive, and shall include, without limiting the generality of the foregoing, industrial projects and commercial projects as presently defined in section three, article two-c, chapter thirteen;
(s) (u) "Revenues" means all fees, premiums, charges, moneys, profits, payment or principal of or interest on, loans and other investments, gifts, grants, appropriations, contributions and all other income derived or to be derived by the authority under this article; and
(t) (v) "Security interest" means an interest in the loan portfolio of the authority which interest is secured by an underlying loan or loans and is evidenced by a note issued by the authority.
§31-15-6. General powers of authority.
The authority, as a public corporation and governmental instrumentality exercising public powers of the state, shall have and may exercise all powers necessary or appropriate to carry out the purposes of this article, including the power:
(a) To cooperate with industrial development agencies in efforts to promote the expansion of industrial, commercial, manufacturing and tourist activity in this state.
(b) To determine, upon the proper application of an industrial development agency or an enterprise, whether the declared public purposes of this article have been or will be accomplished by the establishment by such agency or enterprise of a project in this state.
(c) To conduct examinations and investigations and to hear testimony and take proof, under oath or affirmation, at public or private hearings, on any matter relevant to this article and necessary for information on the establishment of any project.
(d) To issue subpoenas requiring the attendance of witnesses and the production of books and papers relevant to any hearing before such authority or one or more members appointed by it to conduct any hearing.
(e) To apply to the circuit court having venue of such offense to have punished for contempt any witness who refuses to obey a subpoena, to be sworn or affirmed or to testify or who commits any contempt after being summoned to appear.
(f) To authorize any member of the authority to conduct hearings, administer oaths, take affidavits and issue subpoenas.
(g) To financially assist projects by insuring obligations in the manner provided in this article through the use of the insurance fund.
(h) To finance any projects by making loans to industrial development agencies or enterprises upon such terms as the authority shall deem appropriate: Provided, That nothing contained in this subsection (h) or under any other provision in this article shall be construed as permitting the authority to make loans for working capital: Provided, however, That nothing contained in this article shall be construed as prohibiting the authority from insuring loans for working capital made to industrial development agencies or to enterprises by financial institutions: Provided further, That nothing contained in this subsection or any other provision of this article shall be construed as permitting the authority to refinance existing debt except when such refinancing will result in the expansion of the enterprise whose debt is to be refinanced or in the creation of new jobs.
(i) To issue revenue bonds or notes to fulfill the purposes of this article, and to secure the payment of such bonds or notes, all as hereinafter provided.
(j) To issue and deliver revenue bonds or notes in exchange for a project.
(k) To borrow money for its purposes and issue bonds or notes for the money and provide for the rights of the holders of the bonds or notes or other negotiable instruments, to secure the bonds or notes by a deed of trust on, or an assignment or pledge of, any or all of its property and property of the project, including any part of the security for loans, and the authority may issue and sell its bonds and notes, by public or private sale, in such principal amounts as it shall deem necessary to provide funds for any purposes under this article, including the making of loans for the purposes set forth in this article.
(l) To maintain such sinking funds and reserves as the board shall determine appropriate for the purposes of meeting future monetary obligations and needs of the authority.
(m) To sue and be sued, implead and be impleaded, and complain and defend in any court.
(n) To adopt, use and alter at will a corporate seal.
(o) To make, amend, repeal and adopt both bylaws and rules and regulations for the management and regulation of its affairs.
(p) To appoint officers, agents and employees and to contract for and engage the services of consultants.
(q) To directly make contracts and agreements of every kind and nature to execute all instruments necessary or convenient for carrying on its business notwithstanding the provisions of article three, chapter five-a of this code.
(r) To accept grants and loans from and enter into contracts and other transactions with any federal agency.
(s) To take title by conveyance or foreclosure to any project where acquisition is necessary to protect any loan previously made by the authority and to sell, by public or private sale, transfer, lease or convey such project to any enterprise.
(t) To participate in any reorganization proceeding pending pursuant to the United States Code (being the act of Congress establishing a uniform system of bankruptcy throughout the United States, as amended) or in any receivership proceeding in a state or federal court for the reorganization or liquidation of an enterprise. The authority may file its claim against any such
enterprise in any of the foregoing proceedings, vote upon any questions pending therein which requires the approval of the creditors participating in any reorganization proceeding or receivership, exchange any evidence of such indebtedness for any property, security or evidence of indebtedness offered as a part of the reorganization of such enterprise or of any other entity formed to acquire the assets thereof and may compromise or reduce the amount of any indebtedness owing to it as a part of any such reorganization.
(u) To acquire, construct, maintain, improve, repair, replace and operate projects within this state, as well as streets, roads, alleys, sidewalks, crosswalks and other means of ingress and egress to and from projects located within this state.
(v) To acquire, construct, maintain, improve, repair and replace and operate pipelines, electric transmission lines, waterlines, sewer lines, electric power substations, waterworks systems, sewage treatment and disposal facilities and any combinations thereof for the use and benefit of any enterprise located within this state.
(w) To acquire watersheds, water and riparian rights, rights-of-way, easements, licenses and any and all other property, property rights and appurtenances for the use and benefit of any enterprise located within this state.
(x) To acquire, by purchase, lease, donation or eminent domain, any real or personal property, or any right or interest therein, as may be necessary or convenient to carry out the purposes of the authority. Title to all property, property rights and interests acquired by the authority shall be taken in the name of the authority.
(y) To issue renewal notes, or security interests, to issue bonds to pay notes or security interests and, whenever it deems refunding expedient, to refund any bonds or notes by the issuance of new bonds or notes, whether the bonds or notes to be refunded have or have not matured and whether or not the authority originally issued the bonds or notes to be refunded.
(z) To apply the proceeds from the sale of renewal notes, security interests or refunding bonds or notes to the purchase, redemption or payment of the notes, security interests or bonds or notes to be refunded.
(aa) To accept gifts or grants of property, funds, security interests, money, materials, labor, supplies or services from the United States of America or from any governmental unit or any person, firm or corporation, and to carry out the terms or provisions of, or make agreements with respect to, or pledge, any gifts or grants, and to do any and all things necessary, useful, desirable or convenient in connection with the procuring, acceptance or disposition of gifts or grants.
(bb) To the extent permitted under its contracts with the holders of bonds, security interests or notes of the authority, to consent to any modification of the rate of interest, time of payment of any installment of principal or interest, security or any other term of any bond, security interests, note or contract or agreement of any kind to which the authority is a party.
(cc) To sell loans, security interests or other obligations in the loan portfolio of the authority. Such security interests shall be evidenced by instruments issued by the authority. Proceeds from the sale of loans, security interests, or other obligations may be used in the same manner and for the same purposes as bond and note revenues.
(dd) To procure insurance against any losses in connection with its property, operations or assets in such amounts and from such insurers as the authority deems desirable.
(ee) To sell, license, lease, mortgage, assign, pledge or donate its property, both real and personal, or any right or interest therein to another or authorize the possession, occupancy or use of such property or any right or interest therein by another, in such manner and upon such terms as it deems appropriate.
(ff) To participate with the state and federal agencies in efforts to promote the expansion of commercial and industrial development in this state.
(gg) To finance, organize, conduct, sponsor, participate and assist in the conduct of special institutes, conferences, demonstrations and studies relating to the stimulation and formation of business, industry and trade endeavors.
(hh) To conduct, finance and participate in technological, business, financial and other studies related to business and economic development.
(ii) To conduct, sponsor, finance, participate and assist in the preparation of business plans, financing plans and other proposals of new or established businesses suitable for support by the authority.
(jj) To prepare, publish and distribute, with or without charge as the authority may determine, such technical studies, reports, bulletins and other materials as it deems appropriate, subject only to the maintenance and respect for confidentiality of client proprietary information.
(kk) To exercise such other and additional powers as may be necessary or appropriate for the exercise of the powers herein conferred.
(ll) To exercise all of the powers which a corporation may lawfully exercise under the laws of this state.
(mm) To contract for the provision of legal services by private counsel, and notwithstanding the provisions of article three, chapter five, such counsel may, but is not limited to, represent the authority in court, negotiate contracts and other agreements on behalf of the authority, render advice to the authority on any matter relating thereto, prepare contracts and other agreements, and provide such other legal services as may be requested by the authority.
(nn) To develop, maintain, operate and apply for the establishment of foreign trade zones pursuant to and in accordance with all applicable provisions of federal law.
(oo) To enter into and make contracts and agreements of every kind and nature and to execute all instruments necessary or convenient for implementing and carrying out the provisions of section seven-a of this article.
§31-15-7a. West Virginia new markets initiative; new markets fund; new markets tax credits; rulemaking.

(a) The West Virginia new markets initiative is hereby established in order to permit the authority to better fulfill its purposes as listed in this article by providing leverage financing and capital for emerging, expanding and restructuring businesses in the state. The authority is hereby designated as the state entity charged with maximizing the benefit provided by the new markets initiative of the United States small business administration, including, but not limited to, facilitating opportunities relating to the new markets venture capital program as such may be administered by said small business administration.
(b) The authority shall create and establish a special revolving fund of moneys made available pursuant to this section to be known as the "New Markets Fund." The new markets fund shall be governed, administered and accounted for by the authority as a special purpose fund segregated and distinct from any other moneys, funds or accounts owned or managed by the authority. New markets fund moneys shall consist of any appropriations, grants, gifts, contributions, loan proceeds or other revenues received by the new markets fund from any source, public or private, including, but not limited to, proceeds derived from the sale of new market fund tax credits as contemplated in this section. Notwithstanding any provision of this code to the contrary, new markets fund moneys shall be deposited by the authority in one or more banking institutions located in the state which shall be selected by the authority by competitive bid. The authority shall consider entering into contracts or agreements with private and public venture capital entities and financial institutions for the purpose of acquiring or providing management services, investment consulting services and investment services in an effort to maximize financial leverage in order to fulfill the purposes of this article.
(c) New markets tax credits are hereby created, issued and transferred by the state to the authority in a total amount of twenty million dollars to be used by taxpayers, including persons, firms, corporations and all other business entities, to reduce the tax liabilities imposed upon them pursuant to articles twelve-a, thirteen, thirteen-a, thirteen-b, twenty-one, twenty-three and twenty-four of chapter eleven of this code. Without limiting the powers otherwise enumerated in this article, the authority shall have the power to sell and transfer new markets tax credits created, issued and transferred to the authority pursuant to the provisions of this section.
(d) In conjunction with the department of tax and revenue, the authority shall develop a system for: (1) Registering and certifying new markets tax credits, commitments for the sale and transfer of new markets tax credits, the assignment of new markets tax credits; and (2) certifying new markets tax credits in order that when new markets tax credits are claimed on any tax return, such may be verified as validly issued by the authority, properly taken in the year of claim and made in accordance with the requirements of this section.
(e) Without limiting the powers otherwise enumerated in this article, the authority shall have and may exercise all powers necessary to further the purposes of this section, including, but not limited to, the power to commit, sell and transfer new markets tax credits up to the total amount of twenty million dollars: Provided, That the authority may issue the new markets tax credits in amounts totaling not more than four million dollars in each of the fiscal years ending in two thousand two, two thousand three, two thousand four, two thousand five and two thousand six.
(f) Prior to committing to the sale and transfer of any new markets tax credits, the board shall first determine that: (1) New market fund moneys to be received in relationship to the commitment shall be used for the development, promotion and expansion of the economy of the state; and (2) the sale and transfer of any new market tax credits shall leverage as much private sector investment participation as feasible. The new markets tax credits sold and transferred by the board pursuant to this section shall be claimed as a credit on the tax returns for the year or years in which the new markets tax credits are sold and transferred by the board. The amount of the new markets tax credit that exceeds the taxpayer's tax liability for the taxable year in the year of purchase may be carried to succeeding taxable years until used in full up to two years after the year of purchase, and may not be carried back to prior taxable years. Any new market tax credit sold and transferred by the board that remains outstanding after the third taxable year subsequent to and including the year of the transfer is forfeited.
(g) The authority may promulgate, repeal, amend and change rules consistent with the provisions of this article to carry out the purposes of this section. These rules are not subject to the provisions of chapter twenty-nine-a of this code, but shall be filed with the secretary of state.



NOTE: The purpose of this bill is to update and modify provisions including definitions and powers all relating to the West Virginia Economic Development Authority. The bill also establishes the new markets fund and new markets tax credits for purposes of empowering the West Virginia Economic Development Authority to act as a mobilizer of financing and capital for emerging, expanding and restructuring business opportunities in the state. The new markets fund shall be funded through appropriations, grants, gifts, contributions, loan proceeds or other revenues received by the new markets fund from any source, public or private, including, but not limited to, proceeds derived from the sale of new markets fund tax credits.

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

§31-15-7a is new; therefore, strike-throughs and underscoring have been omitted.