WEST VIRGINIA LEGISLATURE
2024 SECOND EXTRAORDINARY SESSION
Enrolled Senate Bill 2035
By Senators Blair (Mr. President) and Woelfel [By Request of the Executive]
[Passed October 8, 2024; in effect from passage]
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1 AN ACT to amend and reenact §31-15-8, §31-15-8a, and §31-15-23a of the Code of West Virginia,
2 1931, as amended, all relating generally to funding for certain broadband expansion
3 programs administered by the Economic Development Authority; permitting the authority
4 to use certain moneys transferred to the Insurance Fund to finance the Broadband Loan
5 Insurance Program; permitting the authority to use the Economic Development Project
6 Fund to finance certain federally supported broadband expansion programs; permitting the
7 authority to transfer moneys from the authority’s Economic Development Project Fund to
8 the Insurance Fund to finance the Broadband Loan Insurance Program; and requiring
9 certain annual audits by the Legislative Auditor.
Be it enacted by the Legislature of West Virginia:
ARTICLE 15. WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY.
§31-15-8. Insurance fund.
1 (a) There is hereby created an insurance fund which shall be a continuing, nonlapsing,
2 revolving fund that consists of:
3 (1) Moneys appropriated by the state to the insurance fund;
4 (2) Premiums, fees, and any other amounts received by the authority with respect to
5 financial assistance provided by the authority from the insurance fund;
6 (3) Upon the satisfaction of any indebtedness or other obligation owed on any property
7 held or acquired by the authority, such proceeds as designated by the authority from the sale,
8 lease, or other disposition of such property;
9 (4) Income from investments made from moneys in the insurance fund; and
10 (5) Any other moneys transferred to the insurance fund or made available to it for the
11 purposes described under this section, under this article, or pursuant to any other provisions of this
12 code.
13 (b) Subject to the provisions of any outstanding insurance agreements entered into by the
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14 authority under this section, the authority may enter into covenants or agreements with respect to
15 the insurance fund and establish accounts within the insurance fund which may be used to
16 implement the purposes of this article. If the authority elects to establish separate accounts within
17 the insurance fund, the authority may allocate its revenues and receipts among the respective
18 accounts in any manner the authority considers appropriate.
19 (c) If the authority at any time finds that more money is needed to keep the reserves of the
20 insurance fund at an adequate level, the authority, with the consent of the chair, shall send a
21 written request to the Legislature for additional funds.
22 (d) The insurance fund shall be used for the following purposes by the authority to
23 financially assist projects so long as such financial assistance will, as determined by the authority,
24 fulfill the public purposes of this article:
25 (1) To insure the payment or repayment of all or any part of the principal of, redemption or
26 prepayment premiums or penalties on, and interest on bonds or notes whether issued under this
27 article or under the Industrial Development and Commercial Development Bond Act, the West
28 Virginia Hospital Finance Authority Act or, with respect to health care facilities only, §8-33-1 et seq.
29 of this code;
30 (2) To insure the payment or repayment of all or any part of the principal of, redemption or
31 prepayment premiums or penalties on, and interest on any instrument executed, obtained, or
32 delivered in connection with the issuance and sale of bonds or notes whether under this article or
33 under the Industrial Development and Commercial Development Bond Act, the West Virginia
34 Hospital Finance Authority Act or, with respect to health care facilities only, §8-33-1 et seq. of this
35 code;
36 (3) To insure the payment or repayment of all or any part of the principal of, prepayment
37 premiums or penalties on, and interest on any form of debt instrument entered into by an
38 enterprise, public body, or authority of the state with a financial institution, including, but not limited
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39 to, banks, insurance companies and other institutions in the business of lending money, which
40 debt instruments shall include, but not be limited to, instruments relating to loans for working
41 capital and to the refinancing of existing debt: Provided, That nothing contained in this subsection
42 or any other provision of this article shall be construed as permitting the authority to insure the
43 refinancing of existing debt except when such insurance will result in the expansion of the
44 enterprise whose debt is to be refinanced or in the creation of new jobs;
45 (4) To pay or insure the payment of any fees or premiums necessary to obtain insurance,
46 guarantees, letters of credit, or other credit support from any person or financial institution in
47 connection with financial assistance provided by the authority under this section;
48 (5) To pay any and all expenses of the authority, including, but not limited to:
49 (A) Any and all expenses for administrative, legal, actuarial, and other services related to
50 the operation of the insurance fund; and
51 (B) All costs, charges, fees, and expenses of the authority related to the authorizing,
52 preparing, printing, selling, issuing, and insuring of bonds or notes (including, by way of example,
53 bonds or notes, the proceeds of which are used to refund outstanding bonds or notes) and the
54 funding of reserves; and
55 (6) To insure, for up to 20 years, the payment or repayment of all or any part of the principal
56 of and interest on any form of debt instrument entered into by an eligible broadband provider with a
57 financial institution, including, but not limited to, banks, insurance companies, and other
58 institutions in the business of lending money, which debt instruments are to be solely for capital
59 costs relating to the purposes authorized in §31-15-8a of this code: Provided, That loan moneys
60 shall not be transferred to the fund except as authorized by §12-6C-11a or §31-15-23a of this
61 code. All moneys transferred to the fund for the purpose of issuing broadband loan insurance shall
62 be held in accounts that are separate and segregated from other moneys in the fund. Moneys
63 transferred to the fund pursuant to §31-15-23a of this code which are no longer required for
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64 outstanding loan insurance obligations may be returned to the Economic Development Project
65 Fund, along with any interest or earnings accruing to the account in which said moneys are held.
66 (e) Except as relating to insured portions of debt instruments under subdivision (6),
67 subsection (d) of this section the total aggregate amount of insurance from the insurance fund with
68 respect to the insured portions of principal of bonds or notes or other instruments may not exceed
69 at any time an amount equal to five times the balance in the insurance fund.
70 (f) The authority may, in its sole and absolute discretion, set the premiums and fees to be
71 paid to it for providing financial assistance under this section. The premiums and fees set by the
72 authority shall be payable in the amounts, at the time, and in the manner that the authority, in its
73 sole and absolute discretion, requires. The premiums and fees need not be uniform among
74 transactions and may vary in amount: (1) Among transactions; and (2) at different stages during
75 the terms of transactions.
76 (g) The authority may, in its sole and absolute discretion, require the security it believes
77 sufficient in connection with its insuring of the payment or repayment of any bonds, notes, debt, or
78 other instruments described in subdivisions (1) through (4), subsection (d) of this section.
79 (h) The authority may itself approve the form of any insurance agreement entered into
80 under this section or may authorize the chair or his or her designee to approve the form of any
81 such agreement. Any payment by the authority under an agreement entered into by the authority
82 under this section shall be made at the time and in the manner that the authority, in its sole and
83 absolute discretion, determines.
84 (i) The obligations of the authority under any insurance agreement entered into pursuant
85 to this article shall not constitute a debt or a pledge of the faith and credit or taxing powers of this
86 state or of any county, municipality, or any political subdivision of this state for the payment of any
87 amount due thereunder or pursuant thereto, but the obligations evidenced by such insurance
88 agreement shall be payable solely from the funds pledged for their payment.
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89 (j) On or before the 30th day of January, April, July, and October of each year, the authority
90 shall prepare and submit to the Joint Committee on Government and Finance and the Governor a
91 quarterly report which shall include, at a minimum:
92 (1) The aggregate outstanding amount of insurance issued from the insurance fund; and
93 (2) For each agreement to insure a debt or security instrument, the name of the parties to
94 the agreement; the lending financial institution to which any insured debt or security instrument is
95 owed; the total value of any insured debt or security interest; the maturity date of the insured debt
96 or security instrument; and the status of the insured debt or security instrument, including whether
97 the party to the insurance agreement is delinquent or in default on any insured debt or security
98 instrument.
§31-15-8a. Broadband Loan Insurance Program; requirements.
1 (a) Definitions. – For the purposes of this section:
2 (1) "Broadband Enhancement Council" or "council" refers to the governmental
3 instrumentality established by §31G-1-3 of this code.
4 (2) "Broadband Loan Insurance Program" or the "program" refers to the program through
5 which the authority issues loan insurance, as authorized by this section.
6 (3) "Broadband provider" or "provider" means a business or enterprise providing
7 broadband service, as defined in §31G-1-2 of this code.
8 (4) "Debt instrument" means any note, loan agreement, or any other form of indebtedness
9 whatsoever and shall expressly include a letter of credit or other agreement relating to a letter of
10 credit.
11 (5) "Eligible broadband provider" means a business or enterprise certified, in writing, by the
12 Broadband Enhancement Council to the authority to be a broadband provider, and that is not
13 disqualified from participating in the Broadband Loan Insurance Program according to subdivision
14 (4), subsection (c) of this section, as certified, in writing, by the authority.
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15 (6) "Federally funded broadband expansion program" means the Rural Digital Opportunity
16 Fund of the Federal Communications Commission; the Broadband ReConnect Program of the
17 United States Department of Agriculture; the Broadband Equity, Access, and Deployment
18 Program of the National Telecommunications and Information Administration; or any other
19 federally funded broadband expansion or enhancement program that Congress may from time to
20 time establish.
21 (7) "Financial institution" means the bank, insurance company, or other institution in the
22 business of lending money, that conditions issuance of a debt or security instrument on loan
23 insurance by the authority, as provided in subdivision (2), subsection (b) of this section.
24 (8) "Loan insurance" refers to an agreement to insure the payment or repayment of all or
25 any part of the principal of and interest on a debt or security instrument.
26 (b) Insurance of certain debt or security instruments authorized. –
27 (1) The authority is authorized to insure, for up to 20 years, the payment or repayment of all
28 or any part of the principal of and interest on any form of debt or security instrument entered into by
29 an eligible broadband provider with a financial institution, which debt or security instruments are to
30 be solely for capital costs relating to:
31 (A) A project which has as its principal purpose providing broadband service, as defined in
32 §31G-1-2 of this code, to a household or business located in an unserved area, as defined in
33 §31G-1-2 of this code, or to an underserved area meeting the following criteria:
34 (i) Access to internet service is only available by wireline or fixed wireless technology; and
35 (ii) Access to internet service in which 15 percent or more of households and businesses
36 cannot obtain internet service with an actual downstream or upstream data rate equivalent to or
37 faster than the current definition of broadband service as defined by the Federal Communications
38 Commission and further certified by the council; or
39 (B) A project which has as its principal purpose building a segment of a
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40 telecommunications network that links a network operator’s core network to a local network plant
41 that serves either an unserved area, as defined in §31G-1-2 of this code, or an area in which no
42 more than two wireline providers are operating.
43 (2) The authority may not issue loan insurance to a provider, unless the participating
44 financial institution provides written certification to the authority that, but for the authority’s insuring
45 the debt instrument, the financial institution would not otherwise make the loan based solely on the
46 creditworthiness of the loan applicant: Provided, That nothing contained in this section or any
47 other provision of this article may be construed as permitting the authority to insure the refinancing
48 of existing debt.
49 (3) The authority may make the provision of loan insurance authorized by this section
50 contingent upon the eligible broadband provider receiving an award under a federally funded
51 broadband expansion program.
52 (4) To fund the loan insurance authorized by this section, the authority shall request a loan
53 from the West Virginia Board of Treasury Investments, according to the requirements of §12-6C-
54 11a of this code, or utilize funds in the Insurance Fund transferred pursuant to §31-15-23a(d)(5) of
55 this code.
56 (5) The authority may not award an amount of loan insurance exceeding $50 million, in any
57 single calendar year, to insure the debt or security instruments, or costs related thereto, of any one
58 broadband provider.
59 (c) Insurance application requirements. –
60 (1) An eligible provider may apply to the authority for loan insurance. The authority shall
61 make the application form or forms available to the public on its website.
62 (2) The application for loan insurance shall, at a minimum, require the applicant to submit:
63 (A) Proof of business ownership and other business registration information;
64 (B) Detailed information regarding all current, previous, and pending business debt,
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65 including any past instances of loan delinquency or default or any breach of a borrower covenant;
66 (C) Detailed records of the provider’s financial history, including, but not limited to, tax
67 returns and financial statements detailing the provider’s income, cash flow, and account balances
68 for the past five years;
69 (D) The number of persons employed by the provider and the names and contact
70 information for all managers of the project to be insured;
71 (E) Detailed information regarding assets being presented as collateral, including, but not
72 limited to, serial or identification numbers for all large value machinery, equipment, furniture and
73 fixtures, inventory records, and accounts receivable;
74 (F) Detailed business plans, financial plans, and financial projections related to the
75 broadband deployment project for which the applicant is requesting loan insurance; and
76 (G) Any additional information that is relevant to the provider’s eligibility to receive loan
77 insurance and the provider’s ability to deploy broadband in the state, including, but not limited to,
78 any required authorizations or determinations by any applicable regulatory bodies.
79 (3) The authority shall ensure that applicants are eligible to receive loan insurance and
80 shall select applicants who demonstrate a minimal risk of default on any debt or security
81 instrument to be insured through the program. At a minimum, the authority shall consider the
82 following criteria in determining whether to approve a loan insurance application:
83 (A) The financial ability of the applicant to complete the insured project and repay the loan;
84 (B) The credit history of the provider;
85 (C) The past earnings and projected cash flow of the provider;
86 (D) The provider’s past performance as a participant in any previous economic
87 development program of this state or of any other state;
88 (E) The provider’s experience with broadband service deployment in the state or any other
89 state; and
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90 (F) The nature and value of the collateral being