ENGROSSED

Senate Bill No. 647

(By Senators Helmick, Sharpe, Chafin, Plymale, Prezioso, Edgell, Love, Bailey, Bowman, McCabe, Unger, Dempsey, Boley, Minear Facemyer, Guills and Sprouse)

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[Originating in the Committee on Finance;


reported February 24, 2003.]

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A BILL to amend and reenact section four, article six, chapter twelve of the code of West Virginia, one thousand nine hundred thirty-one, as amended, related to modifying the type and amount of bond required to be obtained and maintained by the investment management board; and authorizing the establishment and maintenance of a self-insurance account in connection with the procurement and maintenance of insurance coverage by the investment management board.

Be it enacted by the Legislature of West Virginia:
That section four, article six, chapter twelve of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 6. WEST VIRGINIA INVESTMENT MANAGEMENT BOARD.
§12-6-4. Management and control of fund; officers; staff; fiduciary or surety bonds for trustees; liability of trustees.

(a) The management and control of the board shall be vested solely in the trustees in accordance with the provisions of this article.
(b) The governor shall be the chairman of the board and the trustees shall elect a vice chairman who may not be a constitutional officer or his or her designee to serve for a term of two years. Effective with any vacancy in the vice chairmanship, the board shall elect a vice chairman to a new two-year term. The vice chairman shall preside at all meetings in the absence of the chairman. Annually, the trustees shall elect a secretary, who need not be a member of the board, to keep a record of the proceedings of the board.
(c) The trustees shall appoint a chief executive officer of the board and shall fix his or her duties and compensation. The chief executive officer shall have five years' experience in investment management with public or private funds within the ten years next preceding the date of appointment. The chief executive officer additionally shall have academic degrees, professional designations and other investment management or investment oversight or institutional investment experience in a combination the trustees consider necessary to carry out the responsibilities of the chief executive officer position as defined by the trustees.
(d) The trustees shall retain an internal auditor to report directly to the trustees and shall fix his or her compensation. The internal auditor shall 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 trustee 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 trustee. The board shall purchase a blanket bond for the faithful performance of its duties in the amount of fifty 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 trustee by the provisions of this section. The board shall procure and maintain in effect commercially customary property, liability, crime and other insurance to cover risks of loss from its operations. The types and amount of the insurance coverages shall be determined by the board, in its reasonable discretion, with reference to the types and amounts of insurance carried by other public institutions performing functions similar to those performed by the board. 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 to obtain and maintain appropriate types and amounts of insurance or a fiduciary or surety bond from a surety company qualified to do business in this state. The amount of the fiduciary or surety bond shall be fixed by the board. The premiums payable on all fiduciary or surety bonds shall be an expense of the board. In connection with the duties of the board under this subsection, the board may establish, fund and maintain a self- insurance account. The amount of moneys, if any, which are deposited and maintained in the self-insurance account shall be determined by the board in consultation with one or more qualified insurance or actuarial consultants and all moneys in any self- insurance account may be used only for the purpose of providing self-insurance, establishing reserves in connection with insurance deductibles, self-insured retentions or self-insurance or helping to defray the costs of insurance procured under this subsection and for no other purpose.
(f) The trustees and employees of the board are not liable personally, either jointly or severally, for any debt or obligation created by the board: Provided, That the trustees and employees of the board are liable for acts of misfeasance or gross negligence.
(g) The board is exempt from the provisions of sections seven and eleven, article three of this chapter and article three, chapter five-a of this code: Provided, That the trustees and employees of the board are subject to purchasing policies and procedures which shall be promulgated by the board. The purchasing policies and procedures may be promulgated as emergency rules pursuant to section fifteen, article three, chapter twenty-nine-a of this code.
(h) Any employee of the West Virginia trust fund who previously was an employee of another state agency may return to the public employees retirement system pursuant to section eighteen, article ten, chapter five of this code and may elect to either: (1) Transfer to the public employees retirement system his or her employee contributions with accrued interest and, if vested, his or her employer contributions with accrued interest and retain as credited state service all time served as an employee of the West Virginia trust fund; or (2) retain all employee contributions with accrued interest and, if vested, his or her employer contributions with interest and forfeit all service credit for the time served as an employee of the West Virginia trust fund.