COMMITTEE SUBSTITUTE
FOR
H. B. 4058
(By Delegate Michael)
(Originating in the Committee on Finance)
[February 26, 2002]
A BILL to repeal section twelve-a, article one, chapter twelve of
the code of West Virginia, one thousand nine hundred thirty-
one, as amended; to repeal sections ten and fifteen, article
six of said chapter; to amend and reenact sections two, seven,
twelve and thirteen, article one of said chapter; to amend and
reenact section seven, article one-a of said chapter; to amend
and reenact sections one, two and three, article two of said
chapter; to amend and reenact sections one and one-a, article
three of said chapter; to amend and reenact sections three,
four and six, article three-a of said chapter; to amend and
reenact sections one-a, two, five, eight, nine-e, twelve,
thirteen, sixteen, nineteen, and twenty-one, article six of
said chapter; and to further amend said chapter by adding
thereto a new article, designated article six-c, all relating
generally to the management and investment of public funds;
designating financial institutions as depositories for state
funds; providing types of accounts; requiring approval of state treasurer to open account or process transaction through
financial institution; requiring contracts or agreements for
banking goods or services; directing investments of funds;
disposition of earnings on investments; linked deposit
agreements; distribution of deposit reports; collections by
the chief inspector of public offices; requiring spending
units to comply with procedures for receipt and disbursement
of moneys not due the state; requiring disposition of federal
funds transferred from unclaimed property division;
competitive bids for the selection of vendors to implement
electronic capabilities of offices of state treasurer and
auditor; legal effect of documents and electronic signatures;
administration of the West Virginia check card; administration
of and fees for electronic commerce purchases; transfer of
management of consolidated fund from investment management
board to West Virginia board of treasury investments;
investment of funds of political subdivisions; transfer of
rights, duties and responsibilities for certain loans made
from consolidated fund; creation of West Virginia board of
treasury investments; providing purposes, legislative findings
and definitions; membership of board; appointment of certain
directors of board; terms of office, vacancies in office and
removal of directors; expenses of directors; meetings and
powers of board; management, control and administration of
consolidated fund; investments and restrictions on
investments; loans for industrial development; investment in the West Virginia Enterprise Capital Fund, LLC; handling of
securities; standard of care; requiring audits, financial
statements and reports; bees for administration and expenses;
and termination of board.
Be it enacted by the Legislature of West Virginia:
That section twelve-a, article one, chapter twelve of the code
of West Virginia, on thousand nine hundred thirty-one, as amended,
be repealed; that sections ten and fifteen, article six of said
chapter be repealed; that sections two, seven, twelve and thirteen,
article one of said chapter be amended and reenacted; that section
seven, article one-a of said chapter be amended and reenacted; that
sections one, two and three, article two of said chapter be amended
and reenacted; that sections one and one-a, article three of said
chapter be amended and reenacted; that sections three, four and
six, article three-a of said chapter be amended and reenacted; that
sections one-a, two, five, eight, nine-e, twelve, thirteen,
sixteen, nineteen and twenty-one, article six of said chapter be
amended and reenacted; and that said chapter be further amended by
adding thereto a new article, designated article six-c, all to read
as follows:
ARTICLE 1. STATE DEPOSITORIES.
§12-1-2. Depositories for demand deposits; categories of demand
deposits; competitive bidding for disbursement
accounts; maintenance of deposits by state treasurer.
The state treasurer shall designate the state and national banks and the state and federal savings and loan associations in
this state which shall serve meeting the requirements of this
chapter as depositories for all state funds placed in demand
deposits. Any such state or national bank shall, upon request to
the treasurer, be designated as a state depository for such
deposits, if such bank meets the requirements set forth in this
chapter.
Demand deposit accounts shall consist of receipt and
disbursement accounts. Receipt accounts shall be those are accounts
in which are deposited moneys belonging to or due the state of West
Virginia or any official, department, board, commission or agency
thereof. Disbursement accounts shall be those are accounts from
which are paid moneys due from the state of West Virginia or any
official, department, board, commission, political subdivision or
agency thereof to any political subdivision, person, firm or
corporation, except moneys paid from investment accounts.
Investment accounts shall be those are accounts established by
the West Virginia investment management board, the West Virginia
board of treasury investments, or the state treasurer for the
buying and selling of securities for investment for the state of
West Virginia purposes.
The state treasurer shall promulgate rules, in accordance with
the provisions of article three, chapter twenty-nine-a of this
code, concerning depositories for receipt accounts prescribing the
selection criteria, procedures, compensation and such other
contractual terms as it considers to be in the best interests of the state giving due consideration to: (1) The activity of the
various accounts maintained therein; (2) the reasonable value of
the banking services rendered or to be rendered the state by such
depositories; and (3) the value and importance of such deposits to
the economy of the communities and the various areas of the state
affected thereby.
The state treasurer shall select depositories for disbursement
accounts through competitive bidding by eligible banks in this
state. If none of the eligible banks in this state is able to
provide any of the needed services, then the treasurer may include
in the selection eligible banks outside this state. The treasurer
shall promulgate rules in accordance with the provisions of article
three, chapter twenty-nine-a of this code, prescribing the
procedures and criteria for the bidding and selection. The
treasurer shall, in the invitations for bids, specify the
approximate amounts of deposits, the duration of contracts to be
awarded and such other contractual terms as it considers to be in
the best interests of the state the treasurer determines
appropriate , consistent with obtaining the most efficient service
at the lowest cost.
The amount of money needed for current operation purposes of
the state government, as determined by the state treasurer, shall
be maintained at all times in the state treasury, in cash, in short
term investments not to exceed five days, or in disbursement
accounts with banks designated as depositories in accordance with
the provisions of this section. No state officer or employee shall make or cause to be made any deposits of state funds in banks not
so designated. Only banks designated by the treasurer as
depositories may accept deposits of state funds and only the
Legislature and the state treasurer may determine whether funds are
state funds. Notwithstanding any provision of this code to the
contrary, approval of the treasurer is required before any spending
unit may open an account in or process a transaction through a
financial institution.
§12-1-7. Rules; banking contracts and agreements; depositors;
agreements.
In addition to rules specially authorized in this article, the
West Virginia investment management board, the board of treasury
investments and the state treasurer are generally authorized to
promulgate any rules necessary to protect the interests of the
state, its depositories and taxpayers. All rules promulgated shall
be are subject to the provisions of article three, chapter
twenty-nine-a of this code. Any rules previously established by
the board of public works, the board of investments, the investment
management board or the state treasurer pursuant to this article
shall remain in effect until amended, superseded or rescinded.
Only the treasurer may enter into contracts or agreements with
financial institutions for banking goods or services. A state
spending unit requiring banking goods or services shall submit a
request for the services to the treasurer. If the treasurer enters
into a contract or agreement for the required goods or services,
spending units using the contract or agreement shall either pay the vendor or pay the treasurer for the goods or services used.
The treasurer is also authorized to enter into any depositors'
agreements for the purpose of reorganizing or rehabilitating any
depository in which state funds are deposited, and for the purpose
of transferring the assets, in whole or in part, of any depository
to any other lawful depository when, in the judgment of the
treasurer, the interests of the state will be are promoted thereby,
and upon condition that no right of the state to preferred payment
be is waived.
§12-1-12. Investing funds in treasury; depositories outside the
state.
When the funds in the treasury exceed the amount needed for
current operational purposes, as determined by the treasurer, the
treasurer shall make all of such excess available for investment by
the investment management board which shall invest the excess for
the benefit of the general revenue fund: Provided, That the state
treasurer, after reviewing the cash flow needs of the state, may
withhold and invest amounts not to exceed one hundred twenty-five
million dollars of the operating funds needed to meet current
operational purposes. Investments made by the state treasurer under
this section shall be made in short term investments not to exceed
five days. Operating funds means the consolidated fund established
in section eight, article six of this chapter, including all cash
and investments of the fund.
The treasurer may invest funds in the treasury with the board
of treasury investments or the investment management board, depending on the length of time the funds are available for
investment. Spending units with authority to retain interest on a
fund may submit requests to the treasurer to transfer moneys to a
specific pool of the board of treasury investments or the
investment management board and retain any interest or other
earnings on the money invested. The general revenue fund shall
receive all interest or other earnings on money invested that are
not designated for a specific fund.
Whenever the funds in the treasury exceed the amount for which
depositories within the state have qualified, or the depositories
within the state which have qualified are unwilling to receive
larger deposits, the treasurer may designate depositories outside
the state, disbursement accounts being bid for in the same manner
as required by depositories within the state, and when such
depositories outside the state have qualified by giving the bond
prescribed in section four of this article, the state treasurer
shall deposit funds therein in like in the same manner as funds are
deposited in depositories within the state under this article.
The state treasurer may transfer funds to banks financial
institutions outside the state to meet obligations to paying agents
outside the state and any such transfer if the financial
institution must meet meets the same bond collateral requirements
as set forth in this article.
§12-1-13. Payment of banking services and litigation costs for
prior investment losses.
(a) The treasurer is authorized to pay for banking services, and goods and services ancillary thereto, by either a compensating
balance in a noninterest-bearing account maintained at the
financial institution providing the services or with a state
warrant as described in section one, article five of this chapter.
(b) The investment management board is authorized to pay for
the investigation and pursuit of claims against third parties for
the investment losses incurred during the period beginning on the
first day of August, one thousand nine hundred eighty-four, and
ending on the thirty-first day of August, one thousand nine hundred
eighty-nine. The payment may be in the form of a state warrant.
(c) If payment is made by a state warrant, the investment
management West Virginia board of treasury investments, at the
request of the treasurer, is authorized to establish within the
consolidated fund an investment pool which will generate sufficient
income to pay for all banking services provided to the state and to
pay for the investigation and pursuit of the prior investment loss
claims. All income earned by the investment pool shall be is paid
into a special account of the treasurer to be known as the banking
services account and shall be used solely for the purpose of paying
to pay for all banking services and goods and services ancillary to
the banking services provided to the state, for the investigation
and pursuit of the prior investment loss claims, amortize and for
amortization of the balance in the investment imbalance fund.
ARTICLE 1A. WEST VIRGINIA SMALL BUSINESS LINKED DEPOSIT PROGRAM.
§12-1A-7. Liability of state.
The state, the treasurer and the small business development center are not liable to any eligible lending institution in any
manner for payment of the principal or interest on the loan to an
eligible small business. Any delay in payment or default on the
part of an eligible small business does not in any manner affect
the deposit agreement between the eligible lending institution and
the board treasurer.
ARTICLE 2. PAYMENT AND DEPOSIT OF TAXES AND OTHER AMOUNTS DUE THE
STATE OR ANY POLITICAL SUBDIVISION
.
§12-2-1. How and to whom taxes and other amounts due the state or
any political subdivision, official, department,
board, commission or other collecting agency thereof
may be paid.
All persons, firms and corporations shall promptly pay all
taxes and other amounts due from them to the state, or to any
political subdivision, official, department, board, commission or
other collecting agency thereof authorized by law to collect the
taxes and other amounts due by any authorized commercially
acceptable means, in money, United States currency or by check,
bank draft, certified check, cashier's check, post office money
order, or express money order or electronic funds transfer payable
and delivered to the official, department, board, commission or
collecting agency thereof authorized by law to collect the taxes
and other amounts due and having the account upon which the taxes
or amounts due are chargeable against the payer of the taxes or
amounts due. The duly elected or appointed officers of the state and of its political subdivisions, departments, boards, commissions
and collecting agencies having the account on which the taxes or
other amounts due are chargeable against the payer of the taxes or
other amounts due and authorized by law to collect the taxes or
other amounts due, and their respective agents, deputies,
assistants and employees shall in no case be the agent of the payer
in and about the collection of the taxes or other amounts, but
shall at all times and under all circumstances be the agent of the
state, its political subdivision, official, department, board,
commission or collecting agency having the account on which the
taxes or amounts are chargeable against the payer of the taxes or
other amounts due and authorized by law to collect the same.
§12-2-2. Itemized record of moneys received for deposit;
regulations governing deposits; credit to state fund;
exceptions.
(a) All officials and employees of the state authorized by
statute to accept moneys due the state of West Virginia shall keep
a daily itemized record of moneys so received for deposit in the
state treasury and shall deposit within twenty-four hours with the
state treasurer all moneys received or collected by them for or on
behalf of the state for any purpose whatsoever. The treasurer shall
be is authorized to review the procedures and methods used by
officials and employees authorized to accept moneys due the state
and change such the procedures and methods if he or she determines
it to be is in the best interest of the state: Provided, That the treasurer shall not be is not authorized to review or amend the
procedures by which the department of tax and revenue accepts
moneys due the state. The treasurer shall propose rules, in
accordance with the provisions of article three, chapter
twenty-nine-a of this code governing the procedure for deposits.
The official or employee making such deposits with the
treasurer shall prepare deposit lists in the manner and upon report
forms as may be prescribed by the treasurer. Certified or receipted
copies shall be immediately forwarded by the state treasurer to the
state auditor and to the secretary of administration. The
treasurer shall immediately forward certified or receipted copies
to the state auditor and secretary of administration. The original
of the deposit report shall become is a part of the treasurer's
permanent record records.
(b) All moneys received by the state from appropriations made
by the Congress of the United States shall be recorded in special
fund accounts, in the state treasury apart from the general
revenues of the state, and shall be expended in accordance with the
provisions of article eleven, chapter four of this code. All
moneys, other than federal funds, defined in section two, article
eleven, chapter four of this code, shall be credited to the state
fund and treated by the auditor and treasurer as part of the
general revenue of the state except the following funds which shall
be recorded in separate accounts:
(1) All funds excluded by the provisions of section six,
article eleven, chapter four of this code;
(2) All funds derived from the sale of farm and dairy products
from farms operated by any agency of the state government other
than the farm management commission spending unit of the state;
(3) All endowment funds, bequests, donations, executive
emergency funds, and death and disability funds;
(4) All fees and funds collected at state educational
institutions for student activities;
(5) All funds derived from collections from dormitories,
boardinghouses, cafeterias and road camps;
(6) All moneys received from counties by institutions for the
deaf and blind on account of clothing for indigent pupils;
(7) All insurance collected on account of losses by fire and
refunds;
(8) All funds derived from bookstores and sales of blank paper
and stationery, and collections by the chief inspector of public
offices;
(9) All moneys collected and belonging to the capitol building
fund, state road fund, state road sinking funds, general school
fund, school fund, state fund (moneys belonging to counties,
districts and municipalities), state interest and sinking funds,
state compensation funds, the fund maintained by the public service
commission for the investigation and supervision of applications,
and all fees, money, interest or funds arising from the sales of
all permits and licenses to hunt, trap, fish or otherwise hold or
capture fish and wildlife resources and money reimbursed and
granted by the federal government for fish and wildlife conservation;
(10) All moneys collected or received under any act of the
Legislature providing that funds collected or received thereunder
shall be are used for specific purposes.
(c) All moneys, excepted as provided in subdivisions (1)
through (9), inclusive, subsection (b) of this section, shall be
paid into the state treasury in the same manner as collections not
so excepted, and shall be recorded in separate accounts to be used
and expended only for receipt and expenditure for the purposes for
which the same are authorized to be collected by law: Provided,
That the Legislature may transfer any of the amounts collected
pursuant to subdivision (10), subsection (b) of this section, which
are found from time to time to exceed funds needed for the purposes
set forth in general law may be transferred to other accounts or
funds and redesignated for other purposes by appropriation of the
Legislature. The gross amount collected in all cases shall be paid
into the state treasury,. and Commissions, costs and expenses, of
collection authorized by general law to be paid out of the gross
collection, including bank and credit or check card fees, are
hereby authorized to be paid out of the moneys collected and paid
into the state treasury including without limitation amounts
charged for use of bank, charge, check, credit or debit cards,
incurred in the collection process shall be paid from the gross
amount collected in the same manner as other payments are made from
the state treasury.
(d) The state treasurer shall have authority is authorized to establish an imprest fund or funds in the office of any state
agency or institution making upon receipt of a proper application
to the board. To implement this authority, the treasurer shall
propose rules in accordance with the provisions of article three,
chapter twenty-nine-a of this code. The treasurer or his or her
designee shall annually audit all imprest funds and prepare a list
of all such the funds showing the location and amount as of fiscal
year end, retaining the list as a permanent record of the treasurer
until the legislative auditor has completed an audit of the imprest
funds of all agencies and institutions involved.
(e) The treasurer shall be is authorized to develop and
implement a centralized receipts processing center. The treasurer
may request the transfer of equipment and personnel from
appropriate state agencies to the centralized receipts processing
center in order to implement the provisions of this subsection:
Provided, That the governor or appropriate constitutional officer
shall have final authority to authorize the transfer of equipment
or personnel to the centralized receipts processing center from the
respective agency.
§12-2-3. Deposit of moneys not due the state.
All officials and employees of the state authorized to accept
moneys that the state treasurer determines or that this code
specifies are not funds due the state pursuant to the provisions of
section two of this article shall deposit the moneys, as soon as
practicable in the manner and in the depository specified by the
treasurer. The treasurer shall prescribe the forms and procedures for depositing the moneys.
Notwithstanding any provision of this code to the contrary,
including provisions stating funds collected are not state funds
and provisions authorizing a spending unit to have one or more
accounts outside the treasury, a spending unit shall comply with
the state treasurer's procedures for the receipt and disbursement
of moneys not due the state and obtain written authorization from
the state treasurer before depositing the funds any moneys in an
account outside the treasury. Upon the treasurer's written
revocation of the authorization, the spending unit shall deposit
funds deposited in an account outside the treasury in into the
treasury in the manner and in the depository specified by the
treasurer. The treasurer is the final determining authority as to
whether these funds are funds moneys are moneys due or not due the
state pursuant to section two of this article. The treasurer shall
on a quarterly basis provide the legislative auditor with a report
of all accounts approved by him or her authorized under this
section.
ARTICLE 3.APPROPRIATIONS, EXPENDITURES AND DEDUCTIONS.
§12-3-1. Manner of payment from treasury; form of checks.
Every person claiming to receive money from the treasury of
the state shall apply to the auditor for a warrant for same. The
auditor shall thereupon examine the claim, and the vouchers,
certificates and evidence, if any, offered in support thereof, and
for so much thereof as he or she finds to be justly due from the
state, if payment thereof is authorized by law, and if there is an appropriation not exhausted or expired out of which it is properly
payable, the auditor shall issue his or her warrant on the
treasurer, specifying to whom and on what account the money
mentioned therein is to be paid, and to what appropriation it is to
be charged. The auditor shall present to the treasurer daily
reports on the number of warrants issued, the amounts of the
warrants and the dates on the warrants for the purpose of
effectuating the investment policy policies of the board of
treasury investments and the investment management board. On the
presentation of the warrant to the treasurer, the treasurer shall
ascertain whether there are sufficient funds in the treasury to pay
that warrant, and if he or she finds it to be so, he or she shall
in that case, but not otherwise, endorse his or her check upon the
warrant, directed to some depository, which check shall be payable
to the order of the person who is to receive the money therein
specified.
If the a check is not presented for payment within six months
after it is drawn, it shall then be is the duty of the treasurer to
credit it to the depository on which it was drawn, to credit the
unclaimed property fund pursuant to the provisions of article
eight, chapter thirty-six of this code, and immediately notify the
auditor to make corresponding entries on the auditor's books. When
the unclaimed property division receives funds from a check that
includes federal funds, the division shall notify the spending unit
authorizing the payment. Within six months following issuance of
the notice, the spending unit shall inform the unclaimed property division of the amount of federal funds included in the check, the
account from which the federal funds were disbursed, and the
current fiscal year account to receive the federal funds. After
receiving the information, the unclaimed property division shall
transfer the amount of federal funds specified as a reimbursement
to the current fiscal year account specified by the spending unit
to receive the federal funds.
No state depository may pay a check unless it is presented
within six months after it is drawn and every check shall bear upon
its face the words "Void, unless presented for payment within six
months." Any information or records maintained by the treasurer
concerning any check which has not been not presented for payment
within six months of the date of issuance may only be disclosed is
confidential and exempt from disclosure under the provisions of
article one, chapter twenty-nine-b of this code, and is disclosable
only to the state agency specified on spending unit authorizing the
check, or to the payee, his or her personal representative, next of
kin or attorney-at-law and is otherwise confidential and exempt
from disclosure under the provisions of article one, chapter
twenty-nine-b of this code. All claims required by law to be
allowed by any court, and payable out of the state treasury, shall
have the seal of the court allowing or authorizing the payment of
the claim affixed by the clerk of the court to his or her
certificate of its allowance. No claim may be audited and paid by
the auditor unless the seal of the court is thereto attached as
aforesaid. No tax or fee may be charged by the clerk for affixing his or her seal to the certificate, referred to in this section.
The treasurer shall propose rules in accordance with the provisions
of article three, chapter twenty-nine-a of this code governing the
procedure for such payments from the treasury.
§12-3-1a. Payment by deposit in bank account.
The auditor may issue his warrant on the treasurer to pay any
person claiming to receive money from the treasury by deposit to
the person's account in any bank or other financial institution by
electronic funds transfer, if the person furnishes authorization of
the method of payment. The auditor shall prescribe the form of the
authorization. If the authorization is in written form, it shall be
sent to the auditor for review and approval and then forwarded in
electronic form to the treasurer. If the authorization is in
electronic form, it shall be sent to both the auditor and the
treasurer. The auditor must review and approve the authorization.
This section shall may not be construed to require the auditor to
utilize the method of payment authorized by this section. An
authorization furnished pursuant to this section may be revoked by
written notice furnished to the auditor and then forwarded by the
auditor in electronic form to the treasurer or by electronic notice
furnished to both the auditor and the treasurer. Upon execution of
the authorization and its receipt by the office of the auditor, the
warrant shall be created in the manner specified on the
authorization and forwarded to the treasurer for further
disposition to the designated bank or other financial institution
specified on the electronic warrant: Provided, That after the first day of July, two thousand two, the state auditor shall cease
issuing paper warrants except for income tax refunds. After that
date all warrants except for income tax refunds, shall be issued by
electronic funds transfer: Provided, however, That the auditor, in
his or her discretion, may issue paper warrants on an emergency
basis: Provided further, That the treasurer and the auditor may
contract with any bank or financial institution for the processing
of electronic authorizations.
ARTICLE 3A.FINANCIAL ELECTRONIC COMMERCE.
§12-3A-3.Financial electronic commerce.
The state auditor and the state treasurer shall implement
electronic commerce capabilities for each of their offices to
facilitate the performance of their duties under this code. The
state auditor and the For purposes of the purchasing card program,
the auditor shall competitively bid the selection of vendors, and
for all other banking, investment and related goods and services
for the state, the state treasurer shall competitively bid the
selection of vendors needed to provide the necessary banking,
investment and related services for their offices, and the
provisions of article one-b, chapter five, and articles three and
seven, chapter five-a of this code shall not apply, unless
requested by the state auditor or state treasurer.
A record, or an authentication, a document or a signature
issued or used by the auditor, or the treasurer or the comptroller
authorized in article two, chapter five-a of this code may not be denied legal effect solely on the ground that it is in electronic
form.
The head of each spending unit is responsible for adopting and
implementing security procedures to ensure adequate integrity,
security, confidentiality, and auditability of the business
transactions of his or her spending unit when utilizing electronic
commerce.
§12-3A-4. Payment by the West Virginia Check Card.
The state auditor treasurer may establish a state debit card
known as the "West Virginia Check Card" for recipients of employee
payroll or of benefits or entitlement programs processed by the
auditor who are considered unbanked and who do not possess a
federally insured depository institution account. The state
auditor treasurer shall use every reasonable effort to make a
federally insured depository account available to a recipient, and
to encourage all recipients to obtain a federally insured
depository account. Prior to issuing the West Virginia check card,
the state auditor treasurer shall first make a determination that
a recipient has shown good cause that an alternative method to
direct deposit is necessary. The state auditor and the state
treasurer shall jointly issue a request for proposals in accordance
with section three of this article to aid the auditor in the
administration of the program and to aid the treasurer in the
establishment of state owned bank accounts and accommodate
accessible locations for use of the West Virginia check card. In
carrying out the purposes of this article, the state auditor and state treasurer shall not compete with banks or other federally
insured financial institutions, or for profit.
§12-3A-6. Receipting of electronic commerce purchases.
The treasurer may establish a system for acceptance of credit
card and other payment methods for electronic commerce purchases
from spending units. Notwithstanding any other provision of this
code to the contrary, each Each spending unit utilizing WEB
commerce, electronic commerce or other method that offers products
or services for sale shall utilize the treasurer's system for
acceptance of payments. To facilitate electronic commerce, the
treasurer may authorize a spending unit to assess and collect a
fee to recover the cost of accepting bank, charge, check, credit or
debit cards or to pay the cost of accepting bank, charge, check,
credit or debit cards from amounts collected. The treasurer shall
promulgate rules in accordance with the provisions of article three
of chapter twenty-nine-a of the code to establish the criteria and
procedures involved in granting authorization. The treasurer is
also authorized to promulgate emergency rules in accordance with
the provisions of article three of chapter twenty-nine-a of the
code to expedite collections by spending units.
ARTICLE 6.WEST VIRGINIA INVESTMENT MANAGEMENT BOARD.
§12-6-1a. Legislative findings.
(a) The Legislature hereby finds and declares that all the
public employees covered by the public employees retirement system,
the teachers retirement system, the West Virginia state police retirement system, the death, disability and retirement fund of the
division of public safety, the judges' retirement system and the
deputy sheriff's retirement system should benefit from a prudent
and conscientious staff of financial professionals dedicated to the
administration, investment and management of those employees' and
employers' financial contributions and that an independent board
and staff should be immune to changing political climates and
should provide a stable and continuous source of professional
financial investment and management.
(b) The Legislature finds and declares that teachers and
other public employees throughout the state are experiencing
economic difficulty and that in order to reduce this economic
hardship on these dedicated public employees and to help foster
sound financial practices, the West Virginia investment management
board is given the authority to develop, implement and maintain an
efficient and modern system for the investment and management of
the state's money, except those moneys managed by the West Virginia
board of treasury investments in accordance with article six-c of
this chapter. The Legislature further finds that in order to
implement these sound fiscal policies, the West Virginia investment
management board shall operate as an independent board with its own
full-time staff of financial professionals, immune to changing
political climates, in order to provide a stable and continuous
source of professional financial management.
(c) The Legislature hereby finds and declares further that
experience has demonstrated that prudent investment provides diversification and beneficial return not only for public employees
but for all citizens of the state and that in order to have access
to this sound fiscal policy, public employee and employer
contributions to the 401(a) plans are declared to be made to an
irrevocable trust on behalf of each plan, available for no use or
purpose other than for the benefit of those public employees.
(d) The Legislature hereby finds and declares further that
the workers' compensation funds and coal-workers' pneumoconiosis
fund are trust funds to be used exclusively for those workers,
miners and their beneficiaries who have sacrificed their health in
the performance of their jobs and further finds that the assets
available to pay awarded benefits should be prudently invested so
that awards may be paid.
(e) The Legislature hereby finds and declares further that an
independent public body corporate with appropriate governance shall
be the best means of assuring prudent financial management of these
funds under rapidly changing market conditions and regulations.
(f) The Legislature hereby finds and declares further that in
accomplishing this purpose, the West Virginia investment management
board, created and established by this article, is acting in all
respects for the benefit of the state's public employees and
ultimately the citizens of the state and the West Virginia
investment management board is empowered by this article to act as
trustee of the irrevocable trusts created by this article and to
manage and invest other state funds.
(g) The Legislature hereby finds and declares further that the standard of care and prudence applied to trustees, the conduct
of the affairs of the irrevocable trusts created by this article
and the investment of other state funds is intended to be that
applied to the investment of funds as described in the "uniform
prudent investor act" codified as article six-c, chapter forty-four
of this code and as described in section eleven of this article.
(h) The Legislature further finds and declares that the West
Virginia supreme court of appeals declared the "West Virginia Trust
Fund Act" unconstitutional in its decision rendered on the
twenty-eighth day of March, one thousand nine hundred ninety-seven,
to the extent that it authorized investments in corporate stock,
but the court also recognized that there were other permissible
constitutional purposes of the "West Virginia Trust Fund Act" and
that it is the role of the Legislature to determine those purposes
consistent with the court's decision and the constitution of West
Virginia.
(i) The Legislature hereby further finds and declares that it
is in the best interests of the state and its citizens to create a
new investment management board in order to: (1) Be in full
compliance with the provisions of the constitution of West
Virginia; and (2) protect all existing legal and equitable rights
of persons who have entered into contractual relationships with the
West Virginia board of investments and the West Virginia trust
fund.
§12-6-2. Definitions.
As used in this article, unless a different meaning clearly appears from the context:
(1) "Beneficiaries" means those individuals entitled to
benefits from the participant plans;
(2) "Board" means the governing body for the West Virginia
investment management board and any reference elsewhere in this
code to board of investments or West Virginia trust fund means the
board as defined in this subdivision;
(3) "Consolidated fund" means the investment fund previously
established and managed by the board and established pursuant to
subsection (a), section eight of this article and now transferred
to and managed by the West Virginia board of treasury investments
in accordance with article six-c of this chapter;
(4) "401(a) plan" means a plan which is described in section
401(a) of the Internal Revenue Code of 1986, as amended, and with
respect to which the board has been designated to hold assets of
the plan in trust pursuant to the provisions of section nine-a of
this article;
(5) "Local government funds" means the moneys of a political
subdivision, including policemen's pension and relief funds,
firemen's pension and relief funds and volunteer fire departments,
transferred to the board for deposit;
(6) "Participant plan" means any plan or fund subject now or
hereafter to subsection (a), section nine-a, article six of this
chapter;
(7) "Political subdivision" means and includes a county,
municipality or any agency, authority, board, county board of education, commission or instrumentality of a county or
municipality and regional councils created pursuant to the
provisions of section five, article twenty-five, chapter eight of
this code;
(8) "Trustee" means any member serving on the West Virginia
investment management board: Provided, That in section nine-a of
this article in which the terms of the trusts are set forth,
"trustee" means the West Virginia investment management board;
(9) "Securities" means all bonds, notes, debentures or other
evidences of indebtedness and other lawful investment instruments;
and
(10) "State funds" means all moneys of the state which may be
lawfully invested except the "school fund" established by section
four, article XII of the state constitution.
§12-6-5. Powers of the board.
The board may exercise all powers necessary or appropriate to
carry out and effectuate its corporate purposes. The board may:
(1) Adopt and use a common seal and alter it at pleasure;
(2) Sue and be sued;
(3) Enter into contracts and execute and deliver instruments;
(4) Acquire (by purchase, gift or otherwise), hold, use and
dispose of real and personal property, deeds, mortgages and other
instruments;
(5) Promulgate and enforce bylaws and rules for the management
and conduct of its affairs;
(6) Notwithstanding any other provision of law, retain and employ legal, accounting, financial and investment advisors and
consultants;
(7) Acquire (by purchase, gift or otherwise), hold, exchange,
pledge, lend and sell or otherwise dispose of securities and invest
funds in interest earning deposits and in any other lawful
investments;
(8) Maintain accounts with banks, securities dealers and
financial institutions both within and outside this state;
(9) Engage in financial transactions whereby securities are
purchased by the board under an agreement providing for the resale
of the securities to the original seller at a stated price;
(10) Engage in financial transactions whereby securities held
by the board are sold under an agreement providing for the
repurchase of the securities by the board at a stated price;
(11) Consolidate and manage moneys, securities and other
assets of the other funds and accounts of the state and the moneys
of political subdivisions which may be made available to it under
the provisions of this article;
(12) Enter into agreements with political subdivisions of the
state whereby moneys of the political subdivisions are invested on
their behalf by the board Accept and invest funds transferred to
the board by the treasurer on behalf of the state and political
subdivisions;
(13) Charge and collect administrative fees from political
subdivisions for its services;
(14) Exercise all powers generally granted to and exercised by the holders of investment securities with respect to management of
the investment securities;
(15) Contract with one or more banking institutions in or
outside the state for the custody, safekeeping and management of
securities held by the board;
(16) Make and, from time to time, amend and repeal bylaws,
regulations and procedures not inconsistent with the provisions of
this article;
(17) Hire its own employees, consultants, managers and
advisors as it considers necessary and fix their compensation and
prescribe their duties;
(18) Develop, implement and maintain its own banking accounts
and investments;
(19) Do all things necessary to implement and operate the
board and carry out the intent of this article;
(20) Require the state auditor and treasurer to transmit state
funds on a daily basis for investment: Provided, That money held
for meeting the daily obligations of state government need not be
transferred;
(21) (20) Upon request of the treasurer, transmit funds for
deposit in the state treasury to meet the daily obligations of
state government; and
(22) (21) Establish one or more investment funds for the
purpose of investing the funds for which it is trustee, custodian
or otherwise authorized to invest pursuant to this article.
Interests in each fund shall be designated as units and the board shall adopt industry standard accounting procedures to determine
each fund's unit value. The securities in each investment fund are
the property of the board and each fund shall be considered an
investment pool or fund and may not be considered a trust nor may
the securities of the various investment funds be considered held
in trust. However, units in an investment fund established by or
sold by the board and the proceeds from the sale or redemption of
any unit may be held by the board in its role as trustee of the
participant plans.
§12-6-8. Investment funds established; management thereof.
(a) There is hereby continued a special investment fund to be
managed by the board and designated as the "consolidated fund." On
the first day of July, two thousand two, the board shall transfer
the consolidated fund, all moneys, obligations, assets, securities
and other investments of the consolidated fund and all records,
properties and any other document or item pertaining to the
consolidated fund in its possession or under its control to the
West Virginia board of treasury investments.
(b) Each board, commission, department, official or agency
charged with the administration of state funds may request the
state treasurer to make moneys available to the board for
investment.
(c) Each political subdivision of this state through its
treasurer or equivalent financial officer may enter into agreements
with the board state treasurer for the investment of moneys of the
political subdivision. Any political subdivision may enter into an agreement with any a state agency spending unit from which it
receives funds to allow the funds to be transferred request
transfer of the funds to their investment account with the
investment management board or the board of treasury investments.
(d) Moneys held in the various funds and accounts administered
by the board shall be invested as permitted by this article and
subject to the restrictions contained in this article. For the
consolidated fund, the treasurer shall maintain records of the
deposits and withdrawals of each participant and the performance of
the various funds and accounts. The board shall report the earnings
on the various funds under management to the treasurer at the times
determined by the treasurer. The board shall also establish rules
for the administration of the various funds and accounts
established by this section as it considers necessary for the
administration of the funds and accounts, including, but not
limited to: (1) The specification of amounts which may be deposited
in any fund or account and minimum periods of time for which
deposits will be retained; and (2) creation of reserves for losses:
Provided, That in the event any moneys made available to the board
may not lawfully be combined for investment or deposited in the
consolidated funds established by this section, the board may
create special accounts and may administer and invest those moneys
in accordance with the restrictions specially applicable to those
moneys.
§12-6-9e. Legislative findings; loans for industrial development;
availability of funds and interest rates.
(a) The Legislature hereby finds and declares that the
citizens of the state benefit from the creation of jobs and
businesses within the state; that a business and industrial
development loan program provides for economic growth and
stimulation within the state; that loans from pools established in
the consolidated fund will assist in providing the needed capital
to assist business and industrial development; and that time
constraints relating to business and industrial development
projects prohibit duplicative review by both the board and West
Virginia economic development authority board. This section is
enacted in view of these findings.
(b) The board shall make available, subject to cash
availability, in the form of a revolving loan, up to one hundred
fifty million dollars from the consolidated fund to loan the West
Virginia economic development authority for business or industrial
development projects authorized by section seven, article fifteen,
chapter thirty-one of this code and to consolidate existing loans
authorized to be made to the West Virginia economic development
authority pursuant to this section and pursuant to section twenty,
article fifteen, chapter thirty-one of this code which authorizes
a one hundred fifty million dollar revolving loan and article
eighteen-b, chapter thirty-one of this code which authorizes a
fifty million dollar investment pool: Provided, That the West
Virginia economic development authority may not loan more than
fifteen million dollars for any one business or industrial
development project. The revolving loan authorized by this subsection shall be secured by one note at a variable interest rate
equal to the twelve-month average of the board's yield on its cash
liquidity pool. The rate shall be set on the first day of July and
the rate shall be adjusted annually on the same date. The maximum
annual adjustment may not exceed one percent. Monthly payments
made by the West Virginia economic development authority to the
board shall be calculated on a one hundred twenty-month
amortization. The revolving loan shall be secured by a security
interest that pledges and assigns the cash proceeds of collateral
from all loans under this revolving loan pool. The West Virginia
economic development authority may also pledge as collateral
certain revenue streams from other revolving loan pools which
source of funds does not originate from federal sources or from the
board.
The outstanding principal balance of the revolving loan from
the board to the West Virginia economic development authority may
at no time exceed one hundred three percent of the aggregate
outstanding principal balance of the business and industrial loans
from the West Virginia economic development authority to economic
development projects funded from this revolving loan pool. This
provision shall be certified annually by an independent audit of
the West Virginia economic development authority financial records.
(c) The interest rates and maturity dates on the loans made by
the West Virginia economic development authority for business and
industrial development projects authorized by section seven,
article fifteen, chapter thirty-one of this code shall be at competitive rates and maturities as determined by the West Virginia
economic development authority board.
(d) Any and all outstanding loans made by the board, or any
predecessor entity, to the West Virginia economic development
authority shall be refunded by proceeds of the revolving loan
contained in this section and no loans may be made hereafter by the
board to the West Virginia economic development authority pursuant
to section twenty, article fifteen, chapter thirty-one of this code
or article eighteen-b of said chapter.
(e) The trustees of the board shall bear no fiduciary
responsibility as provided in section eleven of this article with
specific regard to the revolving loan contemplated in this section.
(f) The authority of the investment management board to make
additional loans pursuant to this section expires on the thirtieth
day of June, two thousand two. Beginning the first day of July,
two thousand two, the provisions of this section are superseded by
the provisions of section eleven, article six-c of this chapter.
All rights, duties and responsibilities of the investment
management board arising out of all loans made pursuant to this
section and outstanding on the thirtieth day of June, two thousand
two, are hereby transferred to the West Virginia board of treasury
investments effective the first day of July, two thousand two.
§12-6-12. Investment restrictions.
(a) The board shall hold in equity investments no more than
sixty percent of the assets managed by the board and no more than
sixty percent of the assets of any individual participant plan or the consolidated fund.
(b) The board shall hold in international securities no more
than twenty percent of the assets managed by the board and no more
than twenty percent of the assets of any individual participant
plan or the consolidated fund.
(c) The board may not at the time of purchase hold more than
five percent of the assets managed by the board in the equity
securities of any single company or association: Provided, That if
a company or association has a market weighting of greater than
five percent in the Standard & Poor's 500 index of companies, the
board may hold securities of that equity equal to its market
weighting.
(d) The board shall at all times limit its asset allocation
and types of securities to the following:
(1) The board may not hold more than twenty percent of the
aggregate participant plan assets in commercial paper. Any
commercial paper at the time of its acquisition shall be in one of
the two highest rating categories by an agency nationally known for
rating commercial paper;
(2) At no time shall the board hold more than seventy-five
percent of the assets managed by the board in corporate debt. Any
corporate debt security at the time of its acquisition shall be
rated in one of the six highest rating categories by a nationally
recognized rating agency; and
(3) No security may be purchased by the board unless the type
of security is on a list approved by the board. The board may modify the securities list at any time and shall give notice of
that action pursuant to subsection (g), section three of this
article and shall review the list at its annual meeting.
(e) Notwithstanding the investment limitations set forth in
this section, it is recognized that the assets managed by the
board, or the assets of the consolidated fund or participant plans,
whether considered in the aggregate or individually, may
temporarily exceed the investment limitations in this section due
to market appreciation, depreciation and rebalancing limitations.
Accordingly, the limitations on investments set forth in this
section shall not be considered to have been violated if the board
rebalances the assets it manages or the assets of the consolidated
fund or participant plans, whichever is applicable, to comply with
the limitations set forth in this section at least once every six
months based upon the latest available market information and any
other reliable market data that the board considers advisable to
take into consideration.
(f) The board, at the annual meeting provided for in
subsection (h), section three of this article, shall review,
establish and modify, if necessary, the investment objectives of
the individual participant plans as incorporated in the investment
policy statements of the respective trusts so as to provide for the
financial security of the trust funds giving consideration to the
following:
(1) Preservation of capital;
(2) Diversification;
(3) Risk tolerance;
(4) Rate of return;
(5) Stability;
(6) Turnover;
(7) Liquidity; and
(8) Reasonable cost of fees.
§12-6-13. Board to manage certain investments; exceptions.
All duties vested by law in any agency, commission, official
or other board of the state relating to the investment of moneys,
and the acquisition, sale, exchange or disposal of securities or
any other investment are hereby transferred to the board:
Provided, That neither this section nor any other section of this
article applies to the duties vested by law in any agency,
commission, official or other board of the state relating to the
investment of moneys, and the acquisition, sale, exchange or
disposal of securities or any other investment that are transferred
to the West Virginia board of treasury investments pursuant to
article six-c of this chapter, to the "board of the school fund",
and or to the "school fund" established by section 4, article XII
of the state constitution: Provided, however, That funds under the
control of the municipal bond commission may, in the discretion of
the commission, be made available to the board for investment to be
invested by the commission as provided in article three, chapter
thirteen of this code.
§12-6-16. Existing investments.
The board shall be is vested with ownership of all securities
or other investments lawfully held by the board of investments or
the West Virginia trust fund as of the effective date of this
article. All obligations and assets of the board of investments
and the West Virginia Trust Fund, Inc., shall be are vested in the
West Virginia investment management board as of the effective date
of this article. On the first day of July, two thousand two, the
investment management board shall transfer the consolidated fund,
all moneys, obligations, assets securities and other investments of
the consolidated fund and all records, properties and any other
document or item pertaining to the consolidated fund in its
possession or under its control to the West Virginia board of
treasury investments.
§12-6-19. Authorization for loans by the board.
(a) The board, upon request of the state building commission,
shall transfer moneys as a loan to the state building commission in
an amount not to exceed in the aggregate twenty-one million dollars
for the purposes of financing or refinancing the projects specified
in subsections (b) and (d), section eight, article six, chapter
five of this code. The money borrowed shall bear interest during
the term of the loan at a fixed rate not to exceed the interest
rate on treasury notes, bills or bonds of the same term as the term
of the loan the week of closing on the loan as reported by the
treasury of the United States. Loans made under this subsection
shall be repaid in regular monthly or semiannual payments, or as
funds are made available by the budget office of department of administration, and shall be paid in full not later than
twenty-five years from the date the loans are made with terms and
conditions mutually agreed upon by the state building commission
and the investment management board.
(b) The investment management board shall upon request of the
state building commission transfer moneys as a loan to the state
building commission in an amount not to exceed in the aggregate one
hundred thirty-seven million dollars for the purposes of financing
construction of regional jails, correctional facilities or building
extensions or improvements to regional jails and correctional
facilities. Prior to the expenditure of any loan proceeds, the
regional jail and correctional facility authority shall certify a
list of projects to the state building commission and the joint
committee on government and finance that shall be funded from loan
proceeds. This certified list cannot thereafter be altered or
amended other than by legislative enactment. The state building
commission shall borrow money as needed by the regional jail and
correctional facility authority. The investment management board
shall transfer loan proceeds to the authority for expenditure. The
money borrowed shall bear interest during the term of the loan at
a fixed rate not to exceed the interest rate on treasury notes,
bills or bonds of the same term as the term of the loan the week of
closing on the loan as reported by the treasury of the United
States.
(c) The regional jail and correctional facility authority
shall expend the loan proceeds received under the provisions of subsection (b) of this section to proceed with the projects
included in the letter submitted to the joint committee on
government and finance dated the fifteenth day of January, one
thousand nine hundred ninety-seven: Provided, That the letter
shall not be construed to prioritize any project or projects which
are included in the letter: Provided, however, That the authority
may also expend loan proceeds for any expansion to any existing
regional jail or any expansion to a regional jail under
construction upon the effective date of this section.
(d) Loans made under this section for the projects specified
in subsection (b) of this section and in subsection (d), section
eight, article six, chapter five of this code, shall be repaid in
annual payments of not less than twelve million dollars per year by
appropriation of the Legislature to the board. The amount
transferred for loans under subsection (a) or (b) of this section
shall not exceed that amount which the board determines is
reasonable given the cash flow needs of the consolidated fund. The
board shall make transfers for loans first for the project
specified in subsection (d), section eight, article six, chapter
five of this code, second for the projects specified in subsection
(b) of this section and third for projects specified in subsection
(b), section eight, article six, chapter five of this code, which
are in imminent danger of default in payment. The board shall take
the steps necessary to increase the liquidity of the consolidated
fund over a period of the next five years to allow for the loans
provided in this section without increasing the risk of loss in the consolidated fund.
(e) Authority for making additional loans pursuant to this
section expires on the thirtieth day of June, two thousand two.
All rights, duties and responsibilities of the investment
management board arising out of all loans made pursuant to this
section and outstanding on the first day of July, two thousand two,
are hereby transferred to the West Virginia board of treasury
investments.
§12-6-21. Investment with regional jail and correctional facility
authority.
(a) The Legislature finds and declares:
(1) That the supreme court of appeals has determined and
ordered that the constitution of this state imposes a duty on
behalf of the state to make significant improvements in the jail
and correctional facility system, including the duty to make
capital improvements to facilities and to pay for the cost of those
improvements;
(2) That construction of capital improvements requires that
the cost of the facilities be financed over time; that capital
improvements cannot be funded out of the current year
appropriations of the Legislature; and that section fifty-one,
article six of the constitution prohibits the Legislature amending
the budget bill so as to create a deficit;
(3) That while the supreme court of appeals is empowered to
interpret the laws, including the constitution of the state,
section one, article ten of the constitution grants to the Legislature the power of taxation; section fifty-one, article six
of the constitution grants to the Legislature the power of
appropriation; and section one, article five of the constitution
prohibits any branch of government from exercising powers properly
belonging to another;
(4) That the enacting of new taxes, or the diversion of
revenues from other essential departments and functions of
government, in order to support capital improvements in jails and
correctional facilities, is not in the interests of the people of
the state represented in the Legislature, and is specifically
rejected by the Legislature in its exercise of its legitimate
constitutional powers;
(5) That the decision of the supreme court of appeals,
imposing a duty on the state to construct and pay for capital
improvements to jails and correctional facilities arising out of
the Bill of Rights of the United States constitution declared
ratified in the year one thousand seven hundred ninety-one, and the
state constitution of the year one thousand eight hundred
sixty-three, constitutes a prior liability of the state within the
meaning of section four, article ten of the constitution and an
exception to the constitutional limitation on contracting state
debt;
(6) That the construction of capital improvements of jail and
correctional facilities may be funded through funds available for
investment through the West Virginia investment management board,
invested in such a manner as to be assured as high a rate of return as would be earned if these funds were otherwise invested, and
repaid by the state as provided in this article.
(b) The investment management board shall upon request of the
regional jail and correctional facility authority transfer moneys
as an investment, from funds available for investment from the
public employees retirement system, to the regional jail and
correctional facility authority. The amount transferred may not
exceed one hundred fifty million dollars in the aggregate and shall
be used for the purposes of financing construction of regional
jails, correctional facilities, juvenile detention facilities,
juvenile correctional facilities, or extensions, renovations,
improvements or additions thereto, or for the replacement or
renovation of existing facilities. If the board has loaned money to
the state building commission under subsection (b), section
nineteen of this article, the total amount loaned shall be repaid
to the board from funds made available under the investment made
pursuant to this section. Prior to the expenditure of any of the
funds, the regional jail and correctional facility authority shall
certify to the joint committee on government and finance a list of
projects that are to be funded from the invested funds. This
certified list may not thereafter be altered or amended other than
by legislative enactment. Funds shall be invested with the regional
jail and correctional facility authority as requested by the
regional jail and correctional facility authority. The money
invested shall earn a return at a rate equal to the annualized rate
of return earned by the core fixed-income portfolio of the public employees retirement system over the previous five years, plus one
tenth of one percent: Provided, That in all events this rate of
return may not be less than five percent per annum. The monthly
rate of return shall be calculated every quarter. The manner and
timing of the investment shall be determined by the board. The
total of the amounts invested may not exceed a total of one hundred
fifty million dollars during fiscal year one thousand nine hundred
ninety-eight, and fiscal year one thousand nine hundred
ninety-nine, cumulatively. The authority to make the investment
authorized by this section expires on the thirtieth day of June,
one thousand nine hundred ninety-nine.
(c) There is created in the state treasury a regional jail and
correctional facility investment fund dedicated to the payment of
investment earnings and the return of capital invested under this
section. The treasurer shall administer the fund. The fund is an
interest-bearing account with interest earned credited to and
deposited back into the fund. The fund consists of amounts required
to be deposited by section fourteen, article three, chapter
thirty-three of this code.
(d) The treasurer shall, monthly, transfer amounts from the
regional jail and correctional facility investment fund to the
board that are sufficient to allow investment earnings to be paid
and the capital invested returned in substantially equal amounts by
the thirty-first day of August, two thousand twenty-three:
Provided, That the amount of investment earnings paid and the
capital invested returned during the fiscal year beginning the first day of July, one thousand nine hundred ninety-eight, may not
exceed ten million dollars. Payment representing investment
earnings and the return of capital invested shall begin six months
from the date the initial funds are invested, or by the tenth day
of January, one thousand nine hundred ninety-nine, whichever is
later.
(e) The board shall calculate the amount of the projected
annual investment earnings to be paid and the capital invested to
be returned and certify the amount to the treasurer on the first
day of December of each year, until all investment earnings are
paid and the total capital invested is returned.
(f) As a condition precedent to the transfer and investment of
moneys by the investment management board pursuant to subsection
(b) of this section, either the investment management board or the
regional jail and correctional authority shall have first caused a
judicial determination to be made by an appropriate action
initiated in the West Virginia supreme court of appeals regarding
the transfer of moneys by the investment management board to the
regional jail and correctional facility authority as an investment
from funds available for investment from the public employees
retirement system, and to otherwise determine the constitutionality
of the provisions of Enrolled House Bill 4702, as enacted by the
Legislature in the year one thousand nine hundred ninety-eight.
This judicial determination shall be brought as soon as
practicable, but not later than thirty days following the effective
date of the amendments to this section made by the Legislature in the year one thousand nine hundred ninety-eight.
(g) The Legislature recognizes the fiduciary liability and
responsibility imposed on the board by this article and by article
six, chapter forty-four of this code. The board, its trustees and
employees, have no liability, either personally or corporately with
respect to the investment provided for in this section and the
loans made under section nineteen of this article, if the
investment and loans are made in accordance with the respective
provisions of this section and section nineteen of this article.
(h) The regional jail and correctional facility authority
shall expend the funds invested under the provisions of this
section to proceed with the projects identified pursuant to
subsection (b) of this section.
(i) The regional jail and correctional facility authority may
return the total remaining capital invested upon thirty days
written notice to the board and at the time of such return shall
pay the investment earnings accrued to the return date.
(j) Authority for making additional loans pursuant to this
section expires on the thirtieth day of June, two thousand two.
All rights, duties and responsibilities of the investment
management board arising out of all loans made pursuant to this
section and outstanding on the first day of July, two thousand two,
are hereby transferred to the West Virginia board of treasury
investments.
ARTICLE 6C.WEST VIRGINIA BOARD OF TREASURY INVESTMENTS.
§12-6C-1. Purposes and objects; how article cited.
This article, cited as the "West Virginia Treasury Investments
Act", is enacted to provide investment and management services for
the consolidated fund, comprised of the operating funds of the
state and of its political subdivisions, for the purposes of making
state moneys more accessible to state government, enabling
investment managers to focus on the consolidated fund and allowing
the investment management board to focus on long-term investment of
the trust estates it manages pursuant to article six of this
chapter.
§12-6C-2. Legislative findings.
(a) The Legislature finds and declares that the consolidated
fund should benefit from financial professionals dedicated to and
focused on the sound administration, investment and management of
the fund.
(b) The Legislature finds and declares that the state
treasurer already enters into agreements on behalf of the West
Virginia investment management board with and provides reporting
services for participants in the consolidated fund.
(c) The Legislature finds and declares that the transfer of
the consolidated fund to the West Virginia board of treasury
investments will allow for management of the fund within state
government and will encourage better cash management of state
moneys.
(d) The Legislature finds and declares that a public body
corporate within state government with appropriate governance is
the best means of assuring reasonable access to and prudent management and investment of the consolidated fund under rapidly
changing market conditions, laws and regulations.
(e) The Legislature finds and declares that in accomplishing
these purposes, the West Virginia board of treasury investments is
acting in all respects for the benefit of the citizens of the state
in managing and investing the consolidated fund.
(f) The Legislature further finds and declares that it is in
the best interests of the state, its citizens and the political
subdivisions to create the West Virginia board of treasury
investments to manage and invest the consolidated fund to: (1)
provide focused investment services for the operating funds of the
state and of its political subdivisions; (2) provide better
management of all state funds within state government; and (3)
allow the West Virginia investment management board to focus on the
long-term investment of the trust estates it manages pursuant to
article six of this chapter.
§12-6C-3. Definitions.
As used in this article, unless a different meaning clearly
appears from the context:
(1) "Board" means the governing body for the West Virginia
board of treasury investments. References elsewhere in this code
to the entity investing the moneys of the consolidated fund, to the
West Virginia board of investments in connection with investing the
moneys of the consolidated fund, or to the West Virginia trust fund
in connection with investing the moneys of the consolidated fund,
means the board as defined in this subdivision;
(2) "Consolidated fund" means the investment fund transferred
to the board by the West Virginia investment management board for
management and investment by the board and continued pursuant to
section six of this article;
(3) "Director" means any member serving on the West Virginia
board of treasury investments;
(4) "Local government funds" means the moneys of a political
subdivision, including policemen's pension and relief funds,
firemen's pension and relief funds and volunteer fire department
funds, transferred to the board for deposit;
(5) "Participant" means any state government spending unit or
political subdivision which transfers moneys to the board for
investment;
(6) "Political subdivision" means and includes a county,
municipality or any agency, authority, board, county board of
education, commission or instrumentality of a county or
municipality and regional councils created pursuant to the
provisions of section five, article twenty-five, chapter eight of
this code;
(7) "Securities" means all bonds, notes, debentures or other
evidences of indebtedness and other lawful investment instruments;
and
(8) "State funds" means all moneys of the state which may be
lawfully invested except the "school fund" established by section
four, article XII of the state constitution.
§12-6C-4. West Virginia board of treasury investments created; body corporate; board; directors; nomination and appointment
of directors, qualifications and terms of appointment, advice
and consent; annual and other meetings; committees; board
approval of investment policies required; open meetings,
qualifications.
(a) There is hereby created the West Virginia board of
treasury investments. The board is created as a public body
corporate and established to provide prudent fiscal administration,
investment and management for the consolidated fund.
(b) Any appointment is effective immediately upon appointment
by the governor with respect to voting, constituting a quorum,
receiving expenses and all other rights and privileges of the
director position. All appointed directors shall have experience
in finance, investing and management.
(c) The board consists of seven members, as follows:
(1) The state treasurer, the state auditor and the secretary
of administration or their designees. They shall serve by virtue
of their offices and are not entitled to compensation under the
provisions of this article. The treasurer, the auditor and the
secretary of administration or their designees are subject to all
duties, responsibilities and requirements of the provisions of this
article;
(2) One person appointed by the governor from a list of two
persons provided by the president of the Senate in accordance with
this section;
(3) One person appointed by the governor from a list of two
persons provided by the speaker of the House of Delegates in
accordance with this section; and
(4) Two persons appointed by the governor in accordance with
this section.
(d) Appointment of directors shall be made subject to the
advice and consent of the Senate.
(e) Of the four persons appointed by the governor, one shall
be a certified public accountant with experience in finance,
investing and management, and one shall be an attorney with
experience in finance, investing and management.
(f)(1) Initial appointment of the appointed directors shall be
for the following terms:
One member shall be appointed for a term ending the thirtieth
day of June, two thousand three;
One member shall be appointed for a term ending the thirtieth
day of June, two thousand four;
One member shall be appointed for a term ending the thirtieth
day of June, two thousand five;
One member shall be appointed for a term ending the thirtieth
day of June, two thousand six;
(2) Except for appointments to fill vacancies, each subsequent
appointment shall be for a term ending the thirtieth day of June of
the fourth year following the year the preceding term expired. In
the event a vacancy occurs it shall be filled by appointment for
the unexpired term. A member whose term has expired shall continue in office until a successor has been duly appointed and qualified.
No appointed member of the board may be removed from office by the
governor except for official misconduct, incompetency, neglect of
duty, gross negligence, misfeasance or gross immorality.
(g) Of the four appointed directors, no more than two shall
belong to the same political party.
(h) All directors shall receive reasonable and necessary
expenses actually incurred in discharging director duties pursuant
to this article.
(i) The board shall hold an annual meeting and quarterly
meetings. Board bylaws may provide for calling and holding
additional meetings. Representatives of participants and members
of the public may attend any meeting held by the board, except
during those meetings or part of meetings closed by the board as
permitted by law.
(j) The board shall hold an annual meeting which may also
serve as a quarterly meeting. Attendees shall observe standards of
decorum established by board policy. At the annual meeting the
board shall adopt a fee schedule and a budget reflecting fee
structures for the year.
(k) The board chairman may appoint committees as needed,
including an investment policies committee to discuss the board's
drafting, reviewing or modifying written investment policies. Each
committee shall seek input from participants before reporting its
recommendations to the board. The board may meet with any or all
committees during any of its meetings.
(l) Any meeting of the board may be closed upon adoption of a
motion by any director when necessary to preserve the attorney-
client privilege, to protect the privacy interests of individuals,
to review personnel matters or to maintain confidentiality when
confidentiality is in the best interest of the participants.
§12-6C-5. Powers of the board.
The board may exercise all powers necessary or appropriate to
carry out and effectuate its corporate purposes. The board may:
(1) Adopt and use a common seal and alter it at pleasure;
(2) Sue and be sued;
(3) Enter into contracts and execute and deliver instruments
utilizing the policies and procedures of the state treasurer's
office;
(4) Acquire (by purchase, gift or otherwise), hold, use and
dispose of real and personal property, deeds, mortgages and other
instruments;
(5) Promulgate and enforce bylaws and rules for the management
and conduct of its affairs;
(6) Notwithstanding any other provision of law to the
contrary, specifically article three, chapter five-a of this code,
retain and contract with legal, accounting, financial and
investment managers, advisors and consultants;
(7) Acquire (by purchase, gift or otherwise), hold, exchange,
pledge, lend and sell or otherwise dispose of securities and invest
funds in investments authorized by this article;
(8) Maintain accounts with banks, securities dealers and financial institutions both within and outside this state;
(9) Engage in financial transactions whereby securities are
purchased by the board under an agreement providing for the resale
of the securities to the original seller at a stated price;
(10) Engage in financial transactions whereby securities held
by the board are sold under an agreement providing for the
repurchase of the securities by the board at a stated price;
(11) Consolidate and manage moneys, securities and other
assets of the consolidated fund and accounts of the state and the
moneys of political subdivisions which may be made available to it
under the provisions of this article;
(12) Abide by agreements entered into by the state treasurer
with political subdivisions of the state for investment of moneys
of the political subdivisions by the board;
(13) Charge and collect administrative fees from participants,
including political subdivisions, for its services;
(14) Exercise all powers generally granted to and exercised by
the holders of investment securities with respect to management of
the investment securities;
(15) Utilize any contract or agreement of the investment
management board and the treasurer's office, and enter into its own
contracts or agreements, including without limitation entering into
a contract or agreement with one or more banking institutions in or
outside the state for the custody, safekeeping and management of
securities held by the board and with any investment manager and
investment advisor needed;
(16) Make and, from time to time, amend and repeal bylaws,
rules, regulations and procedures not inconsistent with the
provisions of this article;
(17)Hire its own employees, consultants, managers and
advisors as it considers necessary and fix their compensation and
prescribe their duties;
(18)Develop, implement and maintain its own banking accounts
and investments;
(19)Offer assistance and seminars to spending units and to
political subdivisions and create a local government investment
pool;
(20) Upon request of the treasurer, transmit funds for deposit
in the state treasury to meet the daily obligations of state
government; and
(21) Establish one or more investment funds, pools or
participant accounts for the purpose of investing the moneys and
assets for which it is director, custodian or otherwise authorized
to invest pursuant to this article. Interests in each fund, pool or
participant account are designated as units and the board shall
adopt industry standard accounting procedures to determine the unit
value of each fund, pool or participant account. The securities in
each investment fund, pool or participant account are the property
of the board, and each fund, pool or participant account is
considered an investment pool, investment fund or investment
participant account.
§12-6C-6. Consolidated fund continued; management.
(a) The "Consolidated Fund" is the special investment fund
managed by the West Virginia investment management board through
the thirtieth day of June, two thousand two. The consolidated fund
is hereby continued and is transferred to the West Virginia board
of treasury investments on the first day of July, two thousand two.
(b) Each spending unit authorized to invest moneys may request
the state treasurer to invest its moneys. Based upon spending unit
representations, the treasurer shall send the moneys to the West
Virginia board of treasury investments or to the investment
management board.
(c) Each political subdivision of this state through its
treasurer or equivalent financial officer may enter into agreements
with the state treasurer for the investment of moneys of the
political subdivision. Any political subdivision may enter into an
agreement with a state spending unit from which it receives moneys
to allow the state treasurer to invest the moneys.
(d) Moneys held in the various funds and accounts administered
by the board are invested as permitted by this article and subject
to the restrictions contained in this article.
(e) The treasurer shall maintain records of the deposits and
withdrawals of each participant and the performance of the various
funds, pools and accounts. The board shall report the earnings on
the funds, pools and accounts under management to the treasurer at
the times determined by the treasurer.
(f) The board shall establish policies for the administration
of the various funds, pool and accounts authorized by this article as it determines necessary. The policies may specify the minimum
amounts and timing of deposits and withdrawals, and any other
matters authorized by the board.
§12-6C-7. Management and control of fund; officers; staff;
fiduciary or surety bonds for directors; liability
of directors.
(a) The management and control of the consolidated fund is
vested solely in the directors in accordance with the provisions of
this article.
(b) The treasurer is the chairman of the board. The board
shall elect a vice chairman from the appointed directors to serve
a two-year term. Effective with any vacancy in the vice
chairmanship, the board shall elect a vice chairman from the
appointed directors to complete the incomplete term. Annually, the
directors shall elect a secretary to keep a record of the
proceedings of the board and provide any other duties required by
the board. The board may elect a person who is not a member of the
board as secretary.
(c) The board may utilize the staff of the West Virginia state
treasurer, employ personnel, and contract with any person or entity
needed to perform the tasks related to operating the consolidated
fund.
(d) The board shall retain an internal auditor to report
directly to the board and shall fix his or her compensation.
Minimum qualifications for internal auditor are that the internal auditor must be a certified public accountant with at least three
years experience as an auditor. The internal auditor shall develop
an internal audit plan, with board approval, for the testing of
procedures and the security of transactions.
(e) Each director shall give a separate fiduciary or surety
bond from a surety company qualified to do business within this
state in a penalty amount of one million dollars for the faithful
performance of his or her duties as a director. The board shall
purchase a blanket bond for the faithful performance of its duties
in the amount of twenty million dollars or in an amount equivalent
to one percent of the assets under management, whichever is
greater. The amount of the blanket bond is in addition to the one
million dollar individual bond required of each director by the
provisions of this section. The board may require a fiduciary or
surety bond from a surety company qualified to do business in this
state for any person who has charge of, or access to, any
securities, funds or other moneys held by the board and the amount
of the fiduciary or surety bond are fixed by the board. The
premiums payable on all fiduciary or surety bonds are expenses of
the board.
(f) The directors, employees of the board and employees of the
state treasurer performing work for or on behalf of the board are
not liable personally, either jointly or severally, for any debt or
obligation created by the board.
(g) The board is exempt from the provisions of article three,
chapter five-a, and sections seven and eleven, article three, chapter twelve of this code. However, the board is subject to the
purchasing policies and procedures of the state treasurer's office.
§12-6C-8. Administration of consolidated fund.
(a) In the administration of the consolidated fund continued
by this article, the board may:
(1) Purchase, retain, hold, transfer and exchange and sell, at
public or private sale, the whole or any part of the fund or pools
upon such terms and conditions as it considers advisable;
(2) Invest and reinvest the fund and pools or any part thereof
in fixed income securities as provided in this article;
(3) Carry the securities and other property held in trust
either in the name of the board or in the name of its nominee;
(4) Vote, in person or by proxy, all securities held; to join
in or to dissent from and oppose the reorganization,
recapitalization, consolidation, merger, liquidation or sale of
corporations or property; to exchange securities for other
securities issued in connection with or resulting from any
transaction; to pay any assessment or expense which the board
considers advisable for the protection of its interest as holder of
the securities; to exercise any option appurtenant to any
securities for the conversion of any securities into other
securities; and to exercise or sell any rights issued upon or with
respect to the securities of any corporation, all upon terms the
director considers advisable;
(5) Prosecute, defend, compromise, arbitrate or otherwise
adjust or settle claims in favor of or against the board or a director;
(6) Employ and pay from the fund any investment advisers,
brokers, counsel, managers and any other assistants and agents the
board considers advisable;
(7) Develop, implement and modify an asset allocation plan and
investment policy for each fund or pool; and
(8) Create a local government investment pool, a program to
purchase certificates of deposit from West Virginia financial
institutions that are depositories and any funds, pools or
participant accounts needed.
(b) All income and earnings are free from anticipation,
alienation, assignment or pledge by, and free from attachment,
execution, appropriation or control by or on behalf of, any and all
creditors of any beneficiary by any proceeding at law, in equity,
in bankruptcy or insolvency.
(c)The board shall render an annual accounting not more than
one hundred twenty days following the close of the fiscal year.
§12-6C-9. Asset allocation; investment policies; authorized
investments; restrictions.
(a)The board shall develop, adopt, review or modify an asset
allocation plan for the consolidated fund at each annual board
meeting.
(b)The board shall adopt, review, modify or cancel the
investment policy of each fund or pool created at each annual board
meeting. For each participant directed account authorized by the
treasurer, staff of the board shall develop an investment policy for the account and create the requested account. The board shall
review all existing participant directed accounts and investment
policies at its annual meeting for modification.
(c) The board shall consider the following when adopting,
reviewing, modifying or canceling investment policies:
(1) Preservation of capital;
(2) Risk tolerance;
(3) Credit standards;
(4) Diversification;
(5) Rate of return;
(6) Stability and turnover;
(7) Liquidity;
(8) Reasonable costs and fees;
(9) Permissible investments;
(10) Maturity ranges;
(11) Internal controls;
(12) Safekeeping and custody;
(13) Valuation methodologies;
(14) Calculation of earnings and yields;
(15) Performance benchmarks and evaluation; and
(16) Reporting.
(d) No security may be purchased by the board unless the type
of security is on a list approved at a board meeting. The board
shall review the list at its annual meeting.
(e) Notwithstanding the investment limitations set forth in
this section, it is recognized that the assets managed by the board, whether considered in the aggregate or individually, may
temporarily exceed the investment limitations established by the
board due to market appreciation, depreciation and rebalancing
limitations. Accordingly, the investment limitations are not
violated if the board rebalances the assets of the consolidated
fund to comply with the limitations in this section at least once
every six months based upon the latest available market information
and any other reliable market data the board considers advisable to
take into consideration.
(f) Notwithstanding the restrictions which are otherwise
provided by law with respect to the investment of funds, the board
and all participants, now and in the future, are authorized to
invest funds in these securities:
(1) Obligations of, or obligations that are insured as to
principal and interest by, the United States of America or any
agency or corporation thereof and obligations and securities of the
United States sponsored enterprises, including without limitation:
(i) United States Treasury;
(ii) Export-Import Bank of the United States;
(iii) Farmers Home Administration;
(iv) Federal Farm Credit Banks;
(v) Federal Home Loan Banks;
(vi) Federal Home Loan Mortgage Corporation;
(vii) Federal Land Banks;
(viii) Federal National Mortgage Association;
(ix) Merchant Marine bonds; and
(x) Tennessee Valley Authority obligations.
(2) Obligations of the Government National Mortgage
Corporation;
(3) Commercial paper with one of the two highest commercial
paper credit ratings by a nationally recognized investment rating
firm;
(4) Corporate debt rated in one of the six highest rating
categories by a nationally recognized rating agency;
(5) State and local government, or any instrumentality or
agency thereof, securities with one of the three highest ratings by
a nationally recognized rating agency;
(6) Repurchase agreements involving the purchase of United
States Treasury securities and repurchase agreements fully
collateralized by obligations of the United States government or
its agencies or instrumentalities;
(7) Reverse repurchase agreements involving the purchase of
United States Treasury securities and reverse repurchase agreements
fully collateralized by obligations of the United States government
or its agencies or instrumentalities;
(8) Asset-backed securities rated in the highest category by
a nationally recognized rating agency, but excluding mortgage-
backed securities;
(9) Investments in accordance the linked deposit program, a
program using West Virginia banks to obtain certificates of
deposit, loans and any other programs authorized by the
Legislature; and
(10) Any other fixed income security recommended to the board
by an investment advisor in accordance with this article.
§12-6C-10. Investment authority for consolidated fund transferred
to board; exceptions.
All duties vested by law in state spending units and the West
Virginia investment management board relating to the consolidated
fund are hereby transferred to the board, including without
limitation the investment of moneys, and the acquisition, sale,
exchange or disposal of securities or any other investment:
Provided, That neither this section nor any other section of this
article applies to the "board of the school fund" and the "school
fund" established by section 4, article XII of the state
constitution: Provided, however, That the municipal bond
commission may make funds under its control available to the board
for investment.
§12-6C-11. Legislative findings; loans for industrial development;
availability of funds and interest rates.
(a) The Legislature hereby finds and declares that the
citizens of the state benefit from the creation of jobs and
businesses within the state; that business and industrial
development loan programs provide for economic growth and
stimulation within the state; that loans from pools established in
the consolidated fund will assist in providing the needed capital
to assist business and industrial development; and that time
constraints relating to business and industrial development projects prohibit duplicative review by both the board and West
Virginia economic development authority board. This section is
enacted in view of these findings.
(b) The West Virginia board of treasury investments shall make
available, subject to a liquidity determination, in the form of a
revolving loan, up to one hundred fifty million dollars from the
consolidated fund to loan the West Virginia economic development
authority for business or industrial development projects
authorized by section seven, article fifteen, chapter thirty-one of
this code and to consolidate existing loans authorized to be made
to the West Virginia economic development authority pursuant to
this section and pursuant to section twenty, article fifteen,
chapter thirty-one of this code which authorizes a one hundred
fifty million dollar revolving loan and article eighteen-b, chapter
thirty-one of this code which authorizes a fifty million dollar
investment pool: Provided, That the West Virginia economic
development authority may not loan more than fifteen million
dollars for any one business or industrial development project. The
revolving loan authorized by this subsection is secured by one note
at a variable interest rate equal to the twelve-month average of
the board's yield on its cash liquidity pool. The rate is set on
the first day of July and adjusted annually on the same date. The
maximum annual adjustment may not exceed one percent. Monthly
payments made by the West Virginia economic development authority
to the board are calculated on a one hundred twenty-month
amortization. The revolving loan is secured by a security interest that pledges and assigns the cash proceeds of collateral from all
loans under this revolving loan pool. The West Virginia economic
development authority may also pledge as collateral certain revenue
streams from other revolving loan pools which source of funds does
not originate from federal sources or from the board.
The outstanding principal balance of the revolving loan from
the board to the West Virginia economic development authority may
at no time exceed one hundred three percent of the aggregate
outstanding principal balance of the business and industrial loans
from the West Virginia economic development authority to economic
development projects funded from this revolving loan pool. The
independent audit of the West Virginia economic development
authority financial records shall annually certify the one hundred
three percent requirement.
(c) The interest rates and maturity dates on the loans made by
the West Virginia economic development authority for business and
industrial development projects authorized by section seven,
article fifteen, chapter thirty-one of this code are at competitive
rates and maturities as determined by the West Virginia economic
development authority board.
(d) Any and all outstanding loans made by the West Virginia
board of treasury investments, or any predecessor entity, to the
West Virginia economic development authority are refundable by
proceeds of the revolving loan contained in this section and the
board shall make no loans to the West Virginia economic development authority pursuant to section twenty, article fifteen, chapter
thirty-one of this code or article eighteen-b of said chapter.
(e) The directors of the board shall bear no fiduciary
responsibility with specific regard to the revolving loan
contemplated in this section.
(f)(1) In addition to findings and declarations set forth in
subsection (a) of this section, the Legislature further finds and
declares that an investment in the West Virginia Enterprise Capital
Fund, LLC of moneys in the consolidated fund as hereinafter
provided will assist in creating jobs and businesses within the
state and providing the needed risk capital to assist business and
industrial development.
(2) Beginning the first day of July, two thousand two, the
West Virginia board of treasury investments is hereby authorized
and directed to invest moneys from the consolidated fund in the
West Virginia Enterprise Capital Fund, LLC, the manager of which is
the West Virginia Enterprise Advancement Corporation, a subsidiary
of the West Virginia economic development authority: Provided,
That at no time shall the aggregate amount of consolidated fund
moneys so invested exceed twenty-five million dollars. The board
shall make such investment from time to time in such amounts and at
such times as directed by the West Virginia economic development
authority and the aggregate amount of consolidated fund moneys so
invested shall not exceed ten million dollars through the fiscal
year ending the thirtieth day of June, two thousand three, and five
million dollars during any fiscal year thereafter. Any amount of consolidated fund moneys invested in the West Virginia Enterprise
Capital Fund, LLC pursuant to this subsection shall reduce by an
equal amount the amount available to the West Virginia economic
development authority pursuant to the revolving loan described in
subsection (b) of this section. As amounts or returns are received
by the board in respect of any and all such investments, whether in
the form of interest, dividends, realized capital gains, return of
capital or otherwise, such amounts and returns shall be deposited
and maintained by the board in a segregated account entitled "West
Virginia Enterprise Capital Fund, LLC Account," in accordance with
the laws, rules, regulations and policies of the board regarding
same. In the discretion of the West Virginia economic development
authority, moneys in said account may be returned to the
consolidated fund, in which case a corresponding amount of the
aggregate and fiscal year caps set forth herein shall become
available anew, or may be invested as directed by the West Virginia
economic development authority in the West Virginia Enterprise
Capital Fund, LLC without reducing the amount available to the West
Virginia economic development authority pursuant to the revolving
loan described in subsection (b) of this section. Any and all
moneys and amounts invested from the West Virginia Enterprise Fund,
LLC account in the West Virginia Capital Fund, LLC shall be in
addition to and not subject to the aggregate and fiscal year
limitations provided for above.
§12-6C-12. Securities handling.
In financial transactions whereby securities are purchased by
the board under an agreement providing for the resale of the
securities to the original seller at a stated price, the board
shall take physical possession of the securities, directly, by its
custodian bank or through a neutral third party: Provided, That an
agreement with a neutral third party may not waive liability for
the handling of the securities: Provided, however, That when the
board is unable to take possession, directly, by its custodian bank
or through a mutual third party, the board may leave securities in
a segregated account with the original seller, provided the amount
of the securities with any one seller may not exceed one hundred
fifty million dollars.
§12-6C-13. Standard of care.
(a) The "Uniform Prudent Investor Act" codified in article
six-c, chapter forty-four of this code is the standard for any
investments made under this article. Investments are further
subject to the following:
(1) Directors shall diversify fund investment so as to
minimize the risk of large losses unless, under the circumstances,
it is clearly prudent not to do so;
(2) Directors shall defray reasonable expenses of investing
and managing the consolidated fund by charging fees as provided in
this article; and
(3) Directors shall discharge their duties in accordance with
the documents and instruments consistent with the provisions of
this article.
(b) Duties of the directors apply only with respect to those
assets deposited with or otherwise held by it.
§12-6C-14. Existing investments.
The investment management board shall transfer the cash,
securities and other investments of the consolidated fund it holds,
maintains or administers to the West Virginia board of treasury
investments on the first day of July, two thousand two, which will
lawfully vest the West Virginia board of treasury investments with
ownership of all securities or other investments of the
consolidated fund.
§12-6C-15. Annual audits; financial statements; information.
(a) The board shall have an annual financial and compliance
audit of the assets, funds, pools and participant accounts managed
by the board made by a certified public accounting firm which has
a minimum staff of ten certified public accountants and which is a
member of the American institute of certified public accountants
and, if doing business in West Virginia, a member of the West
Virginia society of certified public accountants. The board shall
have financial and compliance audits of the board's books, accounts
and records with respect to its receipts, disbursements,
investments, contracts and all other matters relating to its
financial operations completed annually.
(b) The board shall produce monthly financial statements for
the assets managed by the board and send them to each member of the
board and provide copies as reasonably requested.
(c) Each quarter the board shall deliver a report for the prior quarter to the council of finance and administration.
(d) The board shall contract with an investment consulting or
a certified public accounting firm meeting the criteria set out in
subsection (a) of this section for an annual audit of the reported
returns of the assets managed by the board.
(e) Unless specifically otherwise stated, copies of the
reports required in this section are furnished to the board,
governor, president of the senate, speaker of the house of
delegates, council of finance and administration, legislative
librarian and upon request to any legislator, legislative
committee, financial institution, member of the media, and the
public.
(f) The board shall provide any other information requested in
writing by the council of finance and administration or any member
of the Legislature.
§12-6C-16. Reports to participants.
(a) On a monthly basis, the board shall timely provide the
treasurer with information to enable the treasurer to provide an
itemized statement of a spending unit's or other participant
account in the consolidated fund to each state spending unit and
any other entity investing moneys in the consolidated fund. The
statement shall include the beginning balance, contributions,
withdrawals, income distributed, change in value and ending
balance.
(b) The board shall prepare annually, or more frequently if
determined necessary by the board, a report of its operations and the performance of the various funds, pools and participant
accounts administered by it. The board shall furnish copies of the
report to each participant, the president of the Senate, speaker of
the House of Delegates, legislative auditor, and upon request to
any legislative committee, any legislator, any banking institution
or state or federal savings and loan association in this state, and
any member of the news media. The board shall also keep the
reports available for inspection by any citizen of this state.
§12-6C-17. Legal status of agencies and boards continued.
Except as otherwise provided in this article, every state
spending unit shall retain all of the powers and shall exercise all
of the functions and duties vested in or imposed upon it by law, as
to any fund or account.
§12-6C-18. Authorization for loans by the board.
(a) Any loans made by a predecessor of the board shall remain
in existence and in accordance with the terms and conditions of the
loan.
(b) The board shall continue the work of the investment
management board in taking the steps necessary to increase the
liquidity of the consolidated fund over a period of the next five
years to allow for the loans provided in this section without
increasing the risk of loss in the consolidated fund.
§12-6C-19. Creation of fee account and investment account;
budget.
(a) The board may charge fees, which are subtracted from the total return on investments, for the reasonable and necessary
expenses incurred by the board in rendering services. All fees
collected shall be deposited in a special account in the state
treasury to be known as the "Board of Treasury Investments Fee
Account". Expenditures from the fund shall be for the purposes set
forth in this article and are not authorized from collections but
are to be made only in accordance with appropriation by the
Legislature and in accordance with the provisions of article three,
chapter twelve of this code and upon the fulfillment of the
provisions set forth in article two, chapter five-a of this code:
Provided, That for the fiscal year ending the thirtieth day of
June, two thousand four, expenditures are authorized from
collections rather than pursuant to an appropriation by the
Legislature.
(b) There is hereby created in the state treasury, the "Board
of Treasury Investments Investment Account", for use in receiving
funds for investment, disbursing funds from investments and
processing investment transactions.
(c) All fees dedicated, identified or readily identifiable to
an entity, fund, pool or participant account shall be charged to
that entity, fund, pool or participant account and all other fees
shall be charged as a percentage of assets under management. At its
annual meeting, the board shall adopt a fee schedule and a budget
reflecting fee schedules.
§12-6C-20. Termination of board.
Pursuant to the provisions of article ten, chapter four of this code, the West Virginia board of treasury investments shall
continue to exist until the first day of July, two thousand eight.