Senate Bill No. 76
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Introduced January 9, 2003; referred to the Committee on
Economic Development; and then to the Committee on Finance.]
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A BILL to amend and reenact section nine-e, article six, chapter
twelve of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, relating to increasing the amount
available from the consolidated fund as a revolving loan to
the West Virginia economic development authority for the
purpose of promoting certain business or industrial
development projects.
Be it enacted by the Legislature of West Virginia:
That section nine-e, 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.
§12-6-9e. 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 the West
Virginia economic development authority board. 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. 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 seventy-five 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) Subject to cash availability, the board shall make
available to the West Virginia economic development authority from
the consolidated fund a nonrecourse loan in an amount up to twenty-
five million dollars for the purpose of the West Virginia economic
development authority making a loan or loans, from time to time, to
the West Virginia enterprise advancement corporation, an affiliated
nonprofit corporation of the West Virginia economic development
authority. The respective loans authorized by this subsection by
the board to the West Virginia economic development authority and
by the West Virginia economic development authority to the West
Virginia enterprise advancement corporation shall each be evidenced
by one note and shall each bear interest at the rate of three
percent per annum. The proceeds of any and all loans made by the
West Virginia economic development authority to the West Virginia
enterprise advancement corporation pursuant to this subsection
shall be invested by the West Virginia enterprise corporation in
the West Virginia enterprise capital fund, LLC, the manager of
which is the West Virginia enterprise advancement corporation. The
loan to West Virginia economic development authority authorized by
this subsection shall be nonrevolving and advances thereunder shall
be made at times and in amounts as may be requested or directed by
the West Virginia economic development authority, upon reasonable
notice to the board, the loan authorized by this subsection is not subject to or included in the limitations set forth in subsection
(b) of this section with respect to the fifteen million dollar
limitation for any one business or industrial development project
and limitation of one hundred three percent of outstanding loans
and may not be included in the revolving fund loan principal
balance for purposes of calculating the loan amortization in
subsection (b) of this section. The loan authorized by this
subsection to the West Virginia economic development authority
shall be classified by the board as a long-term, fixed income
investment, shall bear interest on the outstanding principal
balance thereof at the rate of three percent per annum payable
annually on or before the thirtieth day of June of each year and
the principal of which shall be repaid no later than the thirtieth
day of June, two thousand twenty-two, in annual installments due on
or before the thirtieth day of June of each year, which annual
installments shall commence no later than the thirtieth day of
June, two thousand three, in annual principal amounts as may be
agreed upon between the board and the West Virginia economic
development authority, and which annual installments need not be
equal. The loan authorized by this subsection shall be nonrecourse
and shall be payable by the West Virginia economic development
authority solely from amounts or returns received by the West
Virginia economic development authority in respect of the loan authorized by this subsection to the West Virginia enterprise
advancement corporation, whether in the form of interest,
dividends, realized capital gains, return of capital or otherwise,
in all of which the board shall have a security interest to secure
repayment of the loan to the West Virginia economic development
authority authorized by this subsection. Any and all loans from
the West Virginia economic development authority to the West
Virginia enterprise advancement corporation made pursuant to this
subsection shall also bear interest on the outstanding principal
balance thereof at the rate of three percent per annum payable
annually on or before the thirtieth day of June of each year shall
be nonrecourse and shall be payable by the West Virginia enterprise
advancement corporation solely from amounts of returns received by
the West Virginia enterprise advancement corporation in respect of
its investment in the West Virginia enterprise capital fund, LLC,
whether in the form of interest, dividends, realized capital gains,
return of capital or otherwise, in all of which the board shall
have a security interest to secure repayment of the loan to the
West Virginia economic development authority authorized by this
subsection. In the event the amounts or returns received by the
West Virginia enterprise corporation in respect of its investment
in the West Virginia enterprise capital fund, LLC, are not adequate
to pay when due the principal or interest installments, or both, with respect to the loan from the West Virginia economic
development authority and, as a result thereof, the West Virginia
economic development authority is unable to pay the principal or
interest installments, or both, with respect to the loan authorized
by this subsection by the board to the West Virginia economic
development authority, the principal or interest, or both, as the
case may be due on the loan made to the West Virginia economic
development authority pursuant to this subsection shall be deferred
and any and all such past-due principal and interest payments shall
promptly be paid to the fullest extent possible upon receipt by the
West Virginia enterprise advancement corporation of moneys in
respect of its investments in the West Virginia enterprise capital
fund, LLC. The trustees or the board shall bear no fiduciary
responsibility as provided in section eleven, article six, chapter
twelve of this code with regard to the loan authorized by this
subsection.
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(NOTE:
The purpose of this bill is to increase to one hundred
seventy-five million dollars from one hundred fifty million dollars
the amount of moneys available from the consolidated fund as a loan
to the West Virginia economic development authority for the purpose
of promoting business or industrial development projects in West
Virginia.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates language that would be
added.)
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FINANCE COMMITTEE AMENDMENTS
On page two, section nine-e, line thirteen, by striking out
the word "hereinafter";
On page two, section nine-e, line thirteen, after the word
"provided", by inserting the words "in this section";
On page four, section nine-e, line twenty-one, by striking out
the word "shall";
On page five, section nine-e, line twenty-one, by striking out
the word "thereunder" and inserting in lieu thereof the words
"under the loan";
On page five, section nine-e, line twenty-one, by striking out
the words "as may be";
On page six, section nine-e, line sixteen, after the word
"year", by striking out the comma and inserting in lieu thereof a
period;
On page six, section nine-e, line sixteen, by striking out the
word "which" and inserting in lieu thereof the word "The";
On page six, section nine-e, line eighteen, by striking out
the words "as may be";
On page six, section nine-e, line nineteen, after the word
"authority", by striking out the comma and inserting in lieu
thereof a period;
On page six, section nine-e, line nineteen, by striking out
the words "and which" and inserting in lieu thereof the word "The";
On page seven, section nine-e, line ten, by striking out the
word "thereof" and inserting in lieu thereof the words "of the
loan";
And,
On page eight, section nine-e, line nine, by striking out the
word "such".