CHARLESTON, W.Va. — Commerce Secretary Ed Gaunch is intrigued by the idea of a state investment fund, and lawmakers say they have a lot of questions.
House Speaker Roger Hanshaw said last week that his top priority is establishing a capital investment fund that would let the state partner with companies or the sovereign funds of other nations.
“When I read about Speaker Hanshaw’s proposal to have an economic impact fund, that really kind of gets the juices flowing in Commerce. That’s one of the huge needs we have,” Gaunch said during the annual Legislative Lookahead event sponsored by the West Virginia Press Association.
“If we can develop that venture capital fund to make that available, it will be a huge step forward.”
The first bill Hanshaw plans to introduce for the annual legislative session that kicks off next week is one — House Bill 4001 — aimed at kickstarting additional capital investment in West Virginia.
The bill would establish a Mountaineer Impact Fund, using state financial assets that have been allocated already, so West Virginia could serve as an official partner in investment deals.
In most cases, as Hanshaw envisions it, West Virginia’s state government would be a minor investor but could be the controlling partner, essentially the sponsor of the projects. In other words, West Virginia would be endorsing the investment with the state’s name.
“The fund that we’re going to propose is nothing more than a vehicle to make it possible for other capital to flow into the state of West Virginia as everyone has said we need to do,” Hanshaw said last week on MetroNews “Talkline.”
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An executive director with expertise would need to be hired. An investment committee including the governor and five appointees confirmed by the Senate would also be established.
And the state Commerce Secretary — Gaunch or his representative — would also be on board.
“We’ve had discussions with Speaker Hanshaw and others for the biggest part of a year,” Gaunch said in a brief interview Friday. “I love that he’s taken the initiative to move it forward.”
Gaunch said the concept could help West Virginia become more competitive for development.
“Right now we just have so few venture capital dollars. They’re very limited. This would make us a player in some of these projects that now we probably don’t even get considered for.”
Senate President Mitch Carmichael, speaking at the same Legislative Lookahead event, said he favors the investment fund.
“I’m supportive of it in general,” said Carmichael, R-Jackson.
“We have to cross the hurdle of making sure people are aware this is not socializing investment decisions with the taxpayers’ money in West Virginia. I’m convinced that it’s not.”
Senate Finance Chairman Craig Blair said he is intrigued but wants to know more.
“I’m a little bit familiar with it, but we haven’t sat down as a caucus on the Senate side to see where we’re going on it,” said Blair, R-Berkeley, on Friday.
“I want to see the metrics on it. We’ve got to be careful that we’re trying to buy business into this state. What I’m trying to do is just even the playing field.”
Senator Eric Tarr, R-Putnam, lamented the lack of investment capital in West Virginia but said he is not familiar with the details of the bill backed by Hanshaw.
“Those billion dollar investments require capital to get going,” Tarr said. “West Virginia, our largest venture capital effort I believe right now is $12 million.”
Tarr added, ““We have got to get better at it.”
Delegate Mick Bates, the ranking Democrat on the House Finance Committee, spoke during a morning panel on Friday and was hanging around to hear Hanshaw’s remarks about the investment fund.
“I’m still trying to wrap my head around it,” said Bates, D-Raleigh. “He’s a pretty smart guy. It’s pretty wonky.”
The bill is likely to be assigned to the Finance Committee. Bates said he will have “questions upon questions.”
“I don’t understand what it’s based on. I don’t understand the reason, what the problem is and what he’s trying to solve with that. But you know, he’s the Speaker; the bill will run. It’ll come to Finance, so hopefully we’ll have an opportunity to learn more about it.
“If it’s something that makes a difference then I think we should consider it.”