SB 2035 — Providing funding for certain broadband expansion programs administered by Economic Development Authority

WEST VIRGINIA LEGISLATURE SECOND EXTRAORDINARY SESSION EngrossedEnrolled Senate Bill 2035 By Senators Blair (Mr.

President) and Woelfel [By Request of the Executive] [Introduced[Passed October 7,8, 2024]2024; Eng SB 2035 A BILL to amend and reenact §31-15-8, §31-15-8a, and §31-15-23a of the Code of West Virginia, 1931, as amended, all relating generally to funding for certain broadband expansion programs administered by the Economic Development Authority;

in effect from passage] Enr SB 2035 AN ACT to amend and reenact §31-15-8, §31-15-8a, and §31-15-23a of the Code of West Virginia, 1931, as amended, all relating generally to funding for certain broadband expansion programs administered by the Economic Development Authority;

and permitting the authority to transfer moneys from the authority’s Economic Development Project Fund to the Insurance Fund to finance the Broadband Loan Insurance Program.Program;

and requiring certain annual audits by the Legislative Auditor.

(b) Subject to the provisions of any outstanding insurance agreements entered into by the Enr SB 2035 authority under this section, the authority may enter into covenants or agreements with respect to Eng SB 2035 the insurance fund and establish accounts within the insurance fund which may be used to implement the purposes of this article.

(b) (d) The insurance fund shall be used for the following purposes by the authority to financially assist projects so long as such financial assistance will, as determined by the authority, fulfill the public purposes of this article:

(3) To insure the payment or repayment of all or any part of the principal of, prepayment premiums or penalties on, and interest on any form of debt instrument entered into by an enterprise, public body, or authority of the state with a financial institution, including, but not limited Enr SB 2035 to, banks, insurance companies and other institutions in the business of lending money, which Eng SB 2035 debt instruments shall include, but not be limited to, instruments relating to loans for working capital and to the refinancing of existing debt:

Provided, That beginning on the effective date of the amendments made to this section during the regular session of the Legislature, 2021 loan moneys shall not be transferred to the fund except as authorized by §12-6C-11a or §31-15-23a of this code.

Moneys transferred to the fund pursuant to §31-15-23a of this code Eng SB 2035 which are no longer required for Enr SB 2035 outstanding loan insurance obligations may be returned to the Economic Development Project Fund, along with any interest or earnings accruing to the account in which said moneys are held.

(c) (e) Except as relating to insured portions of debt instruments under subdivision (6), subsection (b)(d) of this section the total aggregate amount of insurance from the insurance fund with respect to the insured portions of principal of bonds or notes or other instruments may not exceed at any time an amount equal to five times the balance in the insurance fund.

(d) (f) The authority may, in its sole and absolute discretion, set the premiums and fees to be paid to it for providing financial assistance under this section.

(e) (g) The authority may, in its sole and absolute discretion, require the security it believes sufficient in connection with its insuring of the payment or repayment of any bonds, notes, debt, or other instruments described in subdivisions (1) through (4), subsection (b) (d) of this section.

(f) (h) The authority may itself approve the form of any insurance agreement entered into under this section or may authorize the chair or his or her designee to approve the form of any such agreement.

(g) (i) The obligations of the authority under any insurance agreement entered into pursuant to this article shall not constitute a debt or a pledge of the faith and credit or taxing powers of this state or of any county, municipality, or any political subdivision of this state for the payment of any amount due thereunder or pursuant thereto, but the obligations evidenced by such Eng SB 2035 insurance agreement shall be payable solely from the funds pledged for their payment.

(h)Enr (j)SB By2035 October(j) 30, 2021, and On or before the 30th day of January, April, July, and October of each yearyear, thereafter, the authority shall prepare and submit to the Joint Committee on Government and Finance and the Governor a quarterly report which shall include, at a minimum:

(A) (1) The aggregate outstanding amount of insurance issued from the insurance fund;

and (B) (2) For each agreement to insure a debt or security instrument, the name of the parties to the agreement;

(5) "Eligible broadband provider" means a business or enterprise certified, in writing, by the Broadband Enhancement Council to the authority to be a broadband provider, and that is not Eng SB 2035 disqualified from participating in the Broadband Loan Insurance Program according to subdivision (4), subsection (c) of this section, as certified, in writing, by the authority.

Enr SB 2035 (6) "Federally funded broadband expansion program" means the Rural Digital Opportunity Fund of the Federal Communications Commission;

and (ii) Access to internet service in which 15 percent or more of households and businesses cannot obtain internet service with an actual downstream or upstream data rate equivalent to or faster than the current definition of broadband service as defined by the Federal Communications Eng SB 2035 Commission and further certified by the council;

or (B) A project which has as its principal purpose building a segment of a Enr SB 2035 telecommunications network that links a network operator’s core network to a local network plant that serves either an unserved area, as defined in §31G-1-2 of this code, or an area in which no more than two wireline providers are operating.

(5) The authority may not award an amount of loan insurance exceeding $50 million, in any single calendar year, to insure the debt or security instruments, or costs related thereto, of any one broadband provider.

(B) Detailed information regarding all current, previous, and pending business debt, Enr SB 2035 including any past instances of loan delinquency or default or any breach of a borrower covenant;

Eng SB 2035 (C) Detailed records of the provider’s financial history, including, but not limited to, tax returns and financial statements detailing the provider’s income, cash flow, and account balances for the past five years;

and Enr SB 2035 (F) The nature and value of the collateral being offered for the loan insurance.

Eng SB 2035 (4) The authority may not issue loan insurance to a provider if the provider, or a parent company of the provider, has previously defaulted on a debt or security instrument insured by the authority.

The council shall issue a decision on whether the Enr SB 2035 proposed project satisfies the requirements of this section or not within 30 days of completion of Eng SB 2035 the hearing.

(g) Quarterly reports and biennialannual legislative audits.

— (1) By October 30, 2021, and On or before the 30th day of January, April, July, and October of each yearyear, thereafter, the authority shall prepare and submit to the Joint Committee on Government and Finance, the Governor, and Enr SB 2035 the West Virginia Board of Treasury Investments a Eng SB 2035 quarterly report which shall include, at a minimum:

(2) Beginning in 2022, and During each year in which a loan insurance agreement entered into pursuant to this section remains in effect, the authority shall prepare and submit to the Joint Committee on Government and Finance, the Governor, and the board an annual report addressing the status of each project that is insured, pursuant to this section.

(3) Beginning in 2022, and every other year thereafter so long as During each year in which a loan insurance agreement entered into pursuant to this section remains in effect, the Legislative Auditor shall audit the procedures, accounting practices, and internal controls of the authority for compliance with this section and §12-6C-11a of this code and report the findings of the audit to the Joint Committee on Government and Finance.

the term Eng SB 2035 "Eligible broadband provider" has the meaning provided in §31-15-8a of this code.

Enr SB 2035 "Federally funded broadband expansion program" has the meaning provided in §31-15-8a of this code.

(1) (A) The Governor has requested, in writing, that the project be approved for financing by the authority in an amount of $50 million or greater;

(2) (B) The industrial development agency or enterprise undertaking the project will privately invest an amount of $50 million or greater in the project;

and (3) (C) The project meets or exceeds the loan per job ratio criteria for high-impact development projects that may be established, in consultation with the Secretary of the Department of Economic Development, by the board of directors.

(d) The authority may use moneys in the Economic Development Project Fund to offer incentives for business formation or expansion and provide assistance with site development or Eng SB 2035 other concerns to industrial development agencies or enterprises according to the requirements of Enr SB 2035 this article as set forth in this subsection.

Provided, That money moneys available to fund such high impact development projects may not exceed $300 million dollars annually, unless otherwise appropriated by the Legislature or increased by interest payments received pursuant to this subsection.

Funds which are paid back to the authority as principal pursuant to this subsection may be utilized and relent reloaned by the authority for the same purpose.