Source: http://www.wvlegislature.gov/Bill_Status/bills_text.cfm?billdoc=sb558%20intr.htm&yr=2005&sesstype=RS&i=558
Timestamp: 2018-02-21 14:18:06
Document Index: 314016878

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sb558 intr
A BILL to repeal §12-6-10 and § 12-6-15 of the Code of West Virginia, 1931, as amended; to amend and reenact § 12-1-2, § 12-1-12 and § 12-1-13 of said code; to amend said code by adding thereto a new section, designated § 12-1-12b; to amend and reenact § 12-2-2 and § 12-2-3 of said code; to amend and reenact § 12-3A-4 of said code; to amend and reenact § 12-6-1a, § 12-6-5, § 12-6-8 and §12-6-13 of said code; to amend and reenact § 12-6B-4 of said code; and to amend said code by adding thereto a new article, designated § 12-6C-1, §12-6C-2, §12-6C-3, §12-6C-4, § 12-6C-5, § 12-6C-6, § 12-6C-7, § 12-6C-8, § 12-6C-9, § 12-6C-10, § 12-6C-11, § 12-6C-12, § 12-6C-13, § 12-6C-14, § 12-6C-15, § 12-6C-16, § 12-6C-17, § 12-6C-18, § 12-6C-19 and § 12-6C-20, all relating generally to the management and investment of public funds; authorizing investment accounts for the Board of Treasury Investments; adding State Treasurer to entities receiving reports from depositories regarding accounts not approved by the State Treasurer; allowing the Board of Treasury Investments to accept funds remitted by the State Treasurer; codifying and clarifying the duties of the State Treasurer in administering the Federal Cash Management Improvement Act; authorizing the Federal Cash Management Interest Fund and the Federal Cash Management - Administration Fund; enabling the Board of Treasury Investments to invest moneys in the consolidated fund; codifying current method of handling receipts using the state accounting system; authorizing Legislature to transfer moneys; requiring spending units to comply with procedures for receipt and disbursement of moneys not due the state; clarifying roles and administration of the West Virginia pay card; transferring management of consolidated fund from Investment Management Board to West Virginia Board of Treasury Investments; removing provision that the Investment Management Board can order the State Auditor and the State Treasurer to transmit funds; creating West Virginia Board of Treasury Investments; changing the date the debt capacity report is due from the first day of October to the fifteenth day of January; providing purposes, legislative findings and definitions for the Board of Treasury Investments; specifying membership of Board, appointment of certain directors of Board, terms of office, vacancies in office, removal of directors, expenses of directors, meetings and powers of Board; transferring management, control and administration of consolidated fund to the Board of Treasury Investments; requiring annual review of asset allocation plans and investment policies; specifying requirements and restrictions on investments; authorizing loans for industrial development; handling of securities; establishing the standard of care for investments; transferring existing cash, securities and other investments to the Board of Treasury Investments; requiring audits, financial statements and reports; continuing the current powers of spending units as to investments; transferring all loans from the consolidated fund to the Board of Treasury Investments; creating the fee fund and the investment fund; authorizing fees for administration and expenses; and termination of Board.
That §12-6-10 and §12-6-15 of the Code of West Virginia, 1931, as amended, be repealed; that §12-1-2, §12-1-12 and §12-1-13 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §12-1-12b; that §12-2-2 and §12-2-3 of said code be amended and reenacted; that §12-3A-4 of said code be amended and reenacted; that §12-6-1a, §12-6-5, § 12-6-8 and §12-6-13 of said code be amended and reenacted; that §12-6B-4 of said code be amended and reenacted; and that said code be amended by adding thereto a new article, designated § 12-6C-1, §12- 6C-2, §12-6C-3, §12-6C-4, § 12-6C-5, § 12-6C-6, § 12-6C-7, § 12-6C-8, § 12-6C-9, § 12-6C-10, § 12-6C-11, § 12-6C-12, § 12-6C-13, § 12-6C-14, § 12-6C-15, § 12-6C-16, § 12-6C-17, § 12-6C-18, § 12-6C-19 and § 12-6C- 20, all to read as follows:
§12-1-2.
Depositories for demand deposits; categories of demand deposits; competitive bidding for disbursement accounts; maintenance of deposits by State Treasurer; definition of spending unit.
(b) Demand deposit accounts shall consist of receipt and disbursement accounts. Receipt accounts 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 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 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 purposes.
(c) 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.
(d) 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 are able to provide the needed services, then the Treasurer may include eligible banks outside this state in the competitive bidding process. 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 the Treasurer considers to be in the best interests of the state, 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 financial institutions 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.
(e) Except as otherwise provided in this code, only banks and state and federal savings and loan associations designated by the treasurer as depositories may accept deposits of state funds. Only the Legislature and the treasurer may determine whether funds are state funds and only the treasurer may approve the opening of an account or processing a transaction with a financial institution.
(f) Boards, commissions and spending units with authority pursuant to this code to deposit moneys in a financial institution without approval of the State Treasurer shall retain that authority and are not required to have the Treasurer designate a financial institution as a depository: Provided, That boards, commissions and spending units with moneys deposited in financial institutions not approved for that purpose by the State Treasurer shall submit a report on those moneys annually to the Legislative Auditor and the State Treasurer.
§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 funds available for investment by the investment management board Board of Treasury Investments 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.
Spending units with authority to retain interest or earnings on a fund or account may submit requests to the Treasurer to transfer moneys to a specific investment pool of the Investment Management Board or the Board of Treasury Investments and retain any interest or 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 or account.
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 depositories outside the state have qualified by giving the bond prescribed in section four of this article, the State Treasurer shall deposit funds in the same manner as funds are deposited in depositories within the state under this article.
The State Treasurer may transfer funds to financial institutions outside the state to meet obligations to paying agents outside the state if the financial institution meets the same collateral requirements as set forth in this article.
(a)The Cash Management Improvement Act of 1990, Public Law 101-453, October 24, 1990, 31 USCA Section 6501 et seq. (CMIA) and regulations, as amended, establishes requirements and techniques, including calculations, for the receipt and disbursement of federal funds by states. The authorized official and representative of the State of West Virginia for the CMIA is the State Treasurer.
(b)In administering the CMIA, the State Treasurer is authorized to do all things reasonably necessary, including without limitation, entering into agreements with, negotiating settlements with, refunding any interest due, and satisfying any liability to the United States Treasury in accordance with the CMIA.
(c)Periodically the State Treasurer shall transfer to the "Federal Cash Management Interest Fund," which is hereby authorized and continued, earnings on the State General Revenue Fund in an amount the Treasurer estimates is needed to make refunds in accordance with the CMIA. After each annual settlement with the United States Treasury, the State Treasurer shall transfer to the State General Revenue Fund any moneys remaining in the Federal Cash Management Interest Fund for the period just settled.
(d)The State Treasurer shall also transfer periodically to the "Federal Cash Management - Administration Fund," which is hereby authorized and continued, earnings on the State General Revenue Fund in an amount the Treasurer determines is needed to pay for the costs of administering the CMIA. The State Treasurer may pay the costs he incurs in administering the CMIA from the Federal Cash Management - Administration Fund.
(e)All state spending units shall cooperate fully with the State Treasurer in accumulating all the necessary data elements to fully comply with the CMIA.
(f)The State Treasurer shall send quarterly reports on the activities involving the CMIA to the Governor, Auditor, Secretary of Revenue, and Joint Committee on Government and Finance.
(a) The Treasurer is authorized to pay for banking services, and goods and services ancillary thereto, by either a compensating balance in an account maintained at the financial institution providing the services or with a state warrant as described in section one, article three 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 board 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 paid into a special account of the treasurer known as the banking services account 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, and for amortization of the balance in the investment imbalance fund.
(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 in the state accounting system. Certified or receipted copies shall be immediately forwarded by the state treasurer The Treasurer shall review the deposits in the state accounting system and forward the information to the State Auditor and to the Secretary of administration Revenue. The original of the deposit report shall become a part of the treasurer`s permanent record.
(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:
(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;
(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 used for specific purposes.
(c) All moneys, excepted except 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 moneys are authorized to be collected by law: Provided, That 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, 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 spending unit 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 section: 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.
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 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.
The State Auditor and the State Treasurer may jointly establish a state stored value debit card program known as the "West Virginia Check Pay Card" for recipients of employee payroll, or of retirement benefits or entitlement programs who are considered unbanked and who do not possess a federally insured depository institution account. The State Auditor and the State Treasurer shall use every reasonable effort to make a federally insured depository account available to a recipient, and to encourage all identified unbanked recipients to obtain a federally insured depository account. Prior to issuing the West Virginia check card, The State Auditor and the state treasurer shall first make a determination include an unbanked recipient in the program upon determining that a recipient has shown good cause that an alternative method to direct deposit is necessary exists. Once an unbanked recipient is included in the program, the State Auditor and shall provide the State Treasurer with an electronic file containing the necessary unbanked recipient information. The State Treasurer shall jointly issue a request for proposals in accordance with section three of this article to aid in the administration of the program. and in the establishment of state owned bank accounts and accommodate accessible locations for use of the West Virginia check card. The State Auditor shall assist in the review of pay card proposals. 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.
(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 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.
(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.
(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.
(16) Make and, from time to time, amend and repeal bylaws, regulations and procedures not inconsistent with the provisions 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;
(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; and
(23) (22) Notwithstanding any other provision of the code to the contrary, conduct investment transactions, including purchases, sales, redemptions and income collections, which shall not be treated by the Auditor as recordable transactions on the state`s accounting system.
(a) There is hereby continued a special investment fund to be managed by the board and designated as the "consolidated fund." Effective the thirtieth day of June, two thousand five, the power and authority of the Board as to the consolidated fund shall terminate. On the first day of July, two thousand five, 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 established in article six-c of this chapter.
(b) Each board, commission, department, official or agency charged with the administration of state funds may request the 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 West Virginia 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 State Treasurer at the times determined by the State 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.
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 by 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.
ARTICLE 6B. DEBT CAPACITY ADVISORY DIVISION.
§12-6B-4. Powers and duties.
The Division shall perform the following functions and duties:
(a) Promulgate rules pursuant to article three, chapter twenty-nine-a of this code, for the management and conduct of its affairs;
(b) Annually review the size and condition of the state`s tax-supported debt and submit to the Governor and to the Legislature, on or before the first fifteenth day of October January of each year, an estimate of the maximum amount of new tax-supported debt that prudently may be authorized for the next fiscal year, together with a report explaining the basis for the estimate. The estimate shall be advisory and in no way restrict the Governor or the Legislature. In preparing its annual review and estimate, the Division shall, at a minimum, consider:
(1) The amount of net tax supported debt that, during the next fiscal year and annually for the following ten fiscal years: (A) Will be outstanding; and (B) has been authorized but not yet issued;
(2) Projected debt service requirements during the next fiscal year and annually for the following ten fiscal years based upon: (A) Existing outstanding debt; (B) previously authorized but unissued debt; and (C) projected bond authorizations;
(3) Any information available from the budget section of the Department of Administration in connection with anticipated capital expenditures projected for the next five fiscal years;
(4) The criteria that recognized bond rating agencies use to judge the quality of state bonds;
(5) Any other factor that the Division finds as relevant to: (A) The ability of the state to meet its projected debt service requirements for the next fiscal year; (B) the ability of the state to meet its projected debt service requirement for the next five fiscal years; and (C) any other factor affecting the marketability of such bond; and
(6) The effect of authorizations of new tax-supported debt on each of the considerations of this subsection.
(c) Conduct ongoing review of the amount and condition of bonds, notes and other security obligations of the state`s spending units: (1) Not secured by the full faith and credit of the state or for which the Legislature is not obligated to replenish reserve funds or make necessary debt service payments; (2) for which the state has a contingent or limited liability or for which the Legislature is permitted to replenish reserve funds or make necessary debt service payments if deficiencies occur. When appropriate, the Division shall recommend limits on such additional obligations to the Governor and to the Legislature. Such recommendation is advisory and shall in no way restrict the Governor, the Legislature or the spending unit.
(d) The Treasurer may review all proposed offerings of debt, as defined in this article, submitted to the Division of Debt Management, as provided in section six, article six-a of this chapter. The Division may also request any additional information which may be needed to issue an advisory opinion to the Governor, the Speaker of the House of Delegates and the President of the Senate as to the impact of the proposed offering on the state`s net tax-supported debt outstanding and any other criteria which the Treasurer feels may be relevant to the marketability of said offering and its impact on the state's credit rating. Such advisory opinion shall in no way restrict the Governor, the Legislature or the spending unit.
(e) Do all things necessary or convenient to effectuate the intent of this article and to carry out its powers and functions.
This article, cited as the "West Virginia Treasury Investments Act", is enacted to provide for the investment and management of the consolidated fund for the purposes of making state moneys more accessible to state government 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.
(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.
(c) The Board consists of five members, as follows:
(e) (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 seven; and
One member shall be appointed for a term ending the thirtieth day of June, two thousand nine.
(f) All directors shall receive reasonable and necessary expenses actually incurred in discharging director duties pursuant to this article.
(3) Enter into contracts and execute and deliver instruments utilizing the policies and procedures of the State Treasurer's Office;
(15) Utilize any contract or agreement of the Investment Management Board or the State 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;
(21) Establish one or more investment funds, pools or participant accounts within the consolidated fund for the purpose of investing the moneys and assets for which it is director, trustee, 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.
(a) The consolidated fund is hereby continued and notwithstanding any provision of this code to the contrary is vested in the West Virginia Board of Treasury Investments on the first day of July, two thousand five.
(f) The Board shall establish policies for the administration of the various funds, pools 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.
(b) The State Treasurer is the Chairman of the Board. The Board shall elect a vice chairman. 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 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. As a minimum qualification, an 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, internal controls and the security of transactions.
(e) The Board shall retain one employee with a chartered financial analyst designation or an employee who is a certified treasury manager.
(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;
§12-6C-9.
Asset allocation; investment policies, authorized investments; restrictions.
(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 State 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.
(e) 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:
(ii)Export-Import Bank of the United States;
(x) Tennessee Valley Authority Obligations.
(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; and
(9) Investments in accordance with the linked deposit program, a program using financial institutions in West Virginia to obtain certificates of deposit, loans approved by the Legislature and any other programs authorized by the Legislature.
(3) At no time shall less than fifteen percent of the Consolidated Fund be invested in any direct obligation of or obligation guaranteed as to the payment of both principal and interest by the United States of America. §12-6C-10.
Investment authority for Consolidated Fund transferred to Board; exceptions.
Effective the first day of July, two thousand and five, all duties vested by law in state spending units and the West Virginia Investment Management Board relating to the Consolidated Fund are 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.
(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. 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 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 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 seventy-five 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 that 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 regard to any of the loans 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 nonresource 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 subjection by the Board to 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 five, 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 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 to 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 that 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 to 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 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 to its investments in the West Virginia Enterprise Capital Fund, LLC. The Directors or the Board shall bear no fiduciary responsibility as provided in section thirteen of this article with regard to the loan authorized by this subsection.
(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 the Board.
(f) Unless specifically otherwise stated, copies of the reports required in this section shall be 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.
(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.
(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 hereby created and designated the "Board of Treasury Investments Fee Fund." 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, 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 eleven-b of this code: Provided, That for the fiscal year ending the thirtieth day of June, two thousand six, expenditures are authorized from collections rather than pursuant to an appropriation by the Legislature.
(b) There is hereby created in the State Treasury a special account designated the "Board of Treasury Investments Investment Fund" for use in receiving funds for investment, disbursing funds from investments and processing investment transactions.
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 ten.
NOTE: The purpose of this bill is to create the West Virginia Board of Treasury Investments, transfer management of the Consolidated Fund from the Investment Management Board to the Board of Treasury Investments, and amend various provisions to reflect the board creation and fund transfer. In addition, the bill codifies current duties of the State Treasurer in connection with the Federal Cash Management Improvement Act, current accounts, and current method of handling receipts; clarifies roles in administering the West Virginia pay card; changes the date the debt capacity report is due from October 1st to January 15th; requires compliance withe the procedures established by the Treasurer for moneys deposited outside the Treasury; transfers authority for issuing loans through the Economic Development Authority from the Investment Management Board to the Board of Treasury Investments as the loans are made from money in the Consolidated Fund and creates accounts. The Board of Treasury Investments will sunset on July 1, 2010.
§12-1-12b and §12-6C-1 thru 20 are new; therefore, strike-throughs and underscoring have been omitted.