CHARLESTON, W.Va. — After about two hours of explanations, questions and amendments, the House of Delegates overwhelmingly passed a bill that could create a sovereign investment fund for West Virginia.
The bill has been a priority for House Speaker Roger Hanshaw, who came down from the dais to take questions about it.
“What we are talking about is a vehicle to facilitate the flow of non-tax dollars for investment here in West Virginia,” said Hanshaw, R-Clay.
— Brad McElhinny (@BradMcElhinny) February 21, 2020
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 issue the House of Delegates grappled with is whether that is the optimal makeup of the committee. Some delegates said that provides too much power to the governor and appointees. They wanted an investment board dominated by members of the private sector, but their proposal was voted down.
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.
Such an investor, he said, “faces the possibility of having that investment, once made, yanked back within two years of having been made.”
West Virginia’s seal of approval as a top line investor could reassure nervous investors, state delegates have suggested.
“We can bring the free market back to the United States” by countering the possible chilling effects of CFIUS, said Delegate Daniel Linville, R-Cabell.
Delegate Lisa Zukoff, D-Marshall, said, “I’m really intrigued by this impact fund. I think it’s something that could be very beneficial.”
Delegate Tony Paynter, R-Wyoming, said the government’s involvement in the fund loses his trust.
“I don’t trust government a bit,” he said. “Even though they’re not putting money into this, they still have a hand in where it goes.”
Hanshaw, in his closing remarks, said it’s possible the fund won’t wind up doing anything. But he also said it could lure the kind of investment that would excite West Virginia economically.
“We have a chance here to do something that we’ve not done before,” Hanshaw said.
“The very worst thing that can happen if we pass this bill is that just nothing happens. We aren’t appropriating money into it. We aren’t taking money away from other programs. We’re simply using resources that are already in the Department of Commerce in a way that allows us to put in place a vehicle that allows us to do something historic.”
But, he said, “What if something does happen?”
He referred to possible investments by modern companies like Virgin Hyperloop One or Uber.