CHARLESTON, W.Va. — The Senate Finance Committee today heard from the House Speaker, who described an investment fund meant to entice capital investment in big projects around West Virginia.
After hearing an explanation from House Speaker Roger Hanshaw, the Senate Finance Committee passed House Bill 4001. The bill, called the top priority in the House of Delegates before the session began, now moves to consideration by the full Senate.
Hanshaw, speaking from a podium before senators, called the investment fund “a mechanism to de-risk the flow of foreign capital into the state of West Virginia.”
The bill would establish a Mountaineer Impact Fund so West Virginia could serve as an official partner in investment deals.
As envisioned, the finances would come from private investors or other sovereign investment funds with minimal West Virginia public dollars — if any — being involved.
Major investors might include big corporations, combinations of private investors or the sovereign wealth funds of other countries.
West Virginia 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.
Guiding those decisions would be a board led by an executive director who 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 would also be on board.
One problem the bill is aimed at solving is the effect of the federal Committee on Foreign Investments in the United States. CFIUS can intervene in foreign investment deals if it believes they affect national security.
Members include the secretaries of Justice, Homeland Security, Commerce, Defense, State, and Energy, along with the U.S. Trade Representative and the head of the White House’s Office of Science and Technology Policy.
As China has risen as a “strategic competitor,” the concern is that planned investments could be unraveled.
Hanshaw said that can cause a chilling effect on investment, one that he hopes to resolve through West Virginia’s stamp of approval.
One of the impediments to $17 trillion dollars of investment capital flowing into the United States is the possibility that it can be unwound up to two years after,” he said.
Once a project such as an ethane cracker or a fertilizer plant is targeted for investment in West Virginia, Hanshaw said, “the benefit of the fund is to serve as a de-risking mechanism to flow capital from around the world into the project.”
He emphasized that no taxpayer dollars would flow into the projects unless future Legislatures designate it. He called the concept the first sovereign investment fund in the nation to operate without the backing of taxpayer dollars.
Senator Bob Plymale, D-Wayne, stated his approval.
“There’s no other way we could participate in this unless we pass a bill like this to allow it,” he said.
Senator Ron Stollings, D-Boone, called the bill visionary but asked if there’s any risk to the state.
“When we de-risk people involved with this, does that put any risk on the citizens of West Virginia?” Stollings asked.
Hanshaw responded, “It does not,” saying the projects themselves would be freestanding legal entities and that West Virginia merely provides the blessing through the lens of federal oversight.