GOVERNORVol. 29 Iss. 5 - November 05, 2012
GOVERNOR
EXECUTIVE ORDER NUMBER 51 (2012)
Allocation of the Remaining Portion of the Commonwealth's Share of the Calendar Year 2009 and 2010 National Limitation for Qualified School Construction Bonds Under the American Recovery and Reinvestment Act of 2009
The American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5, 123 Stat. 355 (2009)) was enacted on February 17, 2009 ("ARRA"). ARRA added Section 54F to the Internal Revenue Code of 1986, as amended ("IRC"), to provide for the issuance of qualified school construction bonds ("QSCBs"). QSCBs are tax credit bonds that may be issued to finance the construction, rehabilitation, or repair of a public school facility or for qualifying public school facility land acquisitions ("Qualified Projects"). QSCBs were originally designed as taxable bonds providing the QSCB holder with a federal tax credit in lieu of interest. In the Hiring Incentives to Restore Employment Act (Pub. L. No. 111-147, 124 Stat. 71 (2010)), enacted March 18, 2010, Congress provided a direct payment subsidy option whereby an issuer of QSCBs could elect to receive a subsidy payment from the federal government on each interest payment date intended to be equal to the amount of coupon interest payable on such date.
One of the conditions for the valid issuance of QSCBs is the receipt of an allocation of the national limitation under IRC Section 54F(c) sufficient to cover the maximum face amount of the QSCBs to be issued (a "Volume Cap Allocation"). IRC Section 54F created a national limitation of $11 billion for each of the calendar years 2009 and 2010, with a provision allowing carryforwards of any unused limitation amounts to calendar years after 2010. The U.S. Secretary of the Treasury made allocations of the calendar year 2009 and 2010 national limitation amounts to the states and certain "large local education agencies" in accordance the formulae set forth in IRC Section 54F. Pursuant to Notice 2009-35 of the Internal Revenue Service (IRB 2009-17, dated April 27, 2009), the share of the calendar year 2009 national limitation allocated to the Commonwealth of Virginia (the "Commonwealth" or "Virginia") was $191,077,000 (the "2009 Commonwealth Share") and, pursuant to Notice 2010-17 (IRB 2010-14, dated March 17, 2010), the share of the calendar year 2010 national limitation allocated to the Commonwealth was $172,249,000 (the "2010 Commonwealth Share").
IRC Section 54F(d)(1) also provides that the national limitation amount allocated to a state for any calendar year shall be allocated by a "state agency" to qualified issuers within the state. The General Assembly has provided no specific guidance on how such allocations are to be made in Virginia.
Reference is made to Executive Order 34 (2011), issued June 10, 2011 ("Executive Order 34"), and Executive Order 42 (2011), issued November 22, 2011 ("Executive Order 42"), for the prior applications of the 2009 and 2010 Commonwealth Shares and the determination of the basis on which a portion of the below-described allocations are being made.
As of the date of this Executive Order, the Volume Cap Allocation remaining (the "Carryforward Amount") from the 2010 Commonwealth Share is $21,252,015.50 and there is no Volume Cap Allocation remaining from the 2009 Commonwealth Share.
As of the date of this Executive Order, $16,910,000 of the Carryforward Amount has been allocated pursuant to Executive Order 42 and Executive Order 34. It was anticipated in such Executive Orders that the Virginia Public School Authority ("VPSA") would provide another opportunity for such localities to participate in a future sale of QSCBs by VPSA. VPSA has postponed issuing another series of QSCBs for these localities in order to provide the Virginia Department of Education ("VDOE") with an opportunity to allocate the remaining $4,342,015.50 of Carryforward Amount so that all of the Carryforward Amount could be issued in the next series of QSCBs issued by VPSA.
On March 20, 2012, the Virginia Department of Education ("VDOE") surveyed the localities with projects on the First Priority Waiting List for assistance from the Literary Fund ("FPWL") to determine which FPWL localities were interested in pursuing, and could qualify for, QSCB financing through a VPSA pooled QSCB issue in the late summer of 2012.
VPSA is scheduled to issue the next series of QSCBs in the fall of 2012 (the "2012-1 QSCBs").
On March 2, 2011, VDOE announced the allocation of the then remaining 2009 and 2010 Commonwealth Shares to fully or partially fund 41 new construction, renovation, and expansion application-based projects in 33 school divisions. Such announcement will be referred to below as the "VDOE Announcement." VDOE has advised me that Richmond County, Virginia, and Buena Vista, Virginia, received QSCB allocations pursuant to the VDOE Announcement. VDOE has also advised me that pursuant to the authorization in Executive Order No. 42, VDOE reallocated some of the Volume Cap Allocation waived by the awarded localities to Gloucester County and Louisa County, to address emergencies in certain school divisions arising from 5.8 magnitude earthquake that occurred on August 23, 2011, Hurricane Irene, and other bonafide emergency situations significantly affecting the conditions of a public school building. These allocations from Executive Order 42 and Executive Order 34 expired June 30, 2012, before VPSA was able to have their next QSCBs sale. Furthermore, VDOE has determined which FPWL localities are interested in pursuing, and have qualifying projects for, QSCB financing.
The VDOE has advised me of these qualifying projects and maximum face amounts of QSCBs for each such project proposed to be included in the 2012-1 QSCBs. Such projects and the localities in which they are located will be referred to below respectively as the "Awarded Projects" and the "Awarded Localities."
Accordingly, by virtue of the powers invested in me by Article V of the Constitution of Virginia and § 2.2-103 of the Code of Virginia as Governor of the Commonwealth of Virginia, I hereby (i) reissue to VPSA the Volume Cap Allocation previously-issued pursuant to Executive Order 42 and Executive Order 34 for the purpose of issuing QSCBs for the benefit of Buena Vista, Gloucester County, Louisa County, and Richmond County, as listed below in an aggregate face amount up to the respective maximum face amount listed below and (ii) provide a Volume Cap Allocation to VPSA pursuant to IRC Section 54F(d)(1) from the Carryforward Amount in an amount sufficient for VPSA to issue QSCBs for the benefit of Caroline County, Richmond County, and Smyth County listed below in an aggregate face amount up to the respective maximum face amount listed below. Although it is anticipated that the Awarded Localities will participate in VPSA's 2012-1 QSCBs sale, if any Awarded Locality determines not to participate in VPSA's 2012-1 QSCBs sale or determines not to utilize the maximum amount of its Volume Cap Allocation, in either case such determination being made by such date set forth by VPSA, such portion of the Volume Cap Allocation not to be used by such Awarded Locality will be deemed waived and VDOE is authorized, at its discretion, to reallocate such Volume Cap Allocation to any other Awarded Locality participating in VPSA's 2012-1 QSCBs sale. The first priority use of the sale and investment proceeds of such QSCBs (the "Local Available Project Proceeds") shall be to finance qualifying costs of the respective Awarded Projects, as listed below.
| The Awarded Localities and Awarded Projects: | ||
| Awarded Locality | Awarded Project | Maximum Face Amount |
| Re-issued Allocations |
|
|
| Buena Vista | Renovation of Parry McCluer Middle School | $510,000.00 |
| Gloucester County | Rebuilding Page Middle School | 6,000,000.00 |
| Louisa County | Repairing or rebuilding schools in Louisa County | 5,400,000.00 |
| Richmond County | Additions and renovations to the existing Rappahannock High School | 5,000,000.00 |
| FPWL localities |
|
|
| Caroline County | Construction of a new Bowling Green Elementary School | 1,085,504.00 |
| Richmond County | Additions and renovations to the existing Rappahannock High School | 1,085,504.00 |
| Smyth County | Construction of a new elementary school and renovations to Marion Primary School | 2,171,007.50 |
An Awarded Locality must give first priority to the application of its Local Available Project Proceeds to complete the scope of work described in the approved project application for its Awarded Project.
VDOE is directed to establish a procedure to ensure that the Local Available Project Proceeds are used to finance public school projects within an Awarded Locality ("Additional Projects") to the extent such proceeds are in excess of the amounts needed to complete the scope of work on the locality's Awarded Project. Such Additional Projects (i) must be projects that will qualify for QSCB financing under the applicable provisions of federal and Virginia law, (ii) must be able to utilize the unspent Local Available Project Proceeds within the three years after the issue date of the respective QSCBs and (iii) should be evaluated against the following criteria: consolidation projects, projects eliminating overcrowding, projects replacing facilities more than 35 years old, and projects creating school-wide, high-speed computer networks.
By December 31, 2012, VPSA shall provide to the Superintendent of Public Instruction the completed Internal Revenue Service reporting form or forms (then in effect for the QSCBs) for those QSCBs issued pursuant to the Volume Cap Allocations made to VPSA pursuant to this order. Any portion of such Volume Cap Allocations not used by December 31, 2012, will expire and be deemed waived by the VPSA, and I will direct VDOE to establish procedures for reallocating the waived Volume Cap Allocations.
I hereby authorize the Superintendent of Public Instruction to provide certificates of compliance with IRC Section 54F(c) as may be requested by VPSA.
This Executive Order shall be effective as of October 4, 2012, without any further act or filing.
Given under my hand and under the Seal of the Commonwealth of Virginia this 4th day of October, 2012.
/s/ Robert F. McDonnell
Governor
EXECUTIVE ORDER NUMBER 52 (2012)
State Fraud, Waste, and Abuse Hotline
Importance of the Initiative
Efficiency and economy in government and wise stewardship of taxpayer dollars demand constant vigilance to prevent fraud, waste, and abuse in the operation of state government.
The State Fraud, Waste, and Abuse Hotline (formerly known as the State Employee Fraud, Waste, and Abuse Hotline) was previously available only to state employees. Because of its usefulness in helping to ensure efficiency in state government, the hotline will now be expanded and available to all citizens of the Commonwealth.
By virtue of the authority vested in me as Governor under Article V of the Constitution of Virginia and under the laws of the Commonwealth, including but not limited to Chapter 1 of Title 2.2 of the Code of Virginia, and subject to my continuing and ultimate authority and responsibility to act in such matters, I hereby direct the State Inspector General to continue the anonymous State Fraud, Waste, and Abuse Hotline (hereinafter referred to as the "Hotline") to encourage the state's employees and its citizens to report situations where fraud, waste, or abuse may be occurring in Virginia's executive branch agencies and institutions, including institutions of higher education.
All citizens of the Commonwealth, including state employees, now have the opportunity to report possible instances of fraud, waste, or abuse anonymously and without fear of retribution by using the Hotline. The State Inspector General shall be responsible for administering the Hotline. Through the Hotline, the State Inspector General shall:
• Provide assistance to Executive Branch agency heads in fulfilling their responsibilities for maintaining appropriate internal controls to protect against fraud, waste, and abuse.
• Make available to state employees and all citizens of the Commonwealth a variety of means to report fraud, waste, and abuse in the Commonwealth's government business, one of which will be an anonymous toll-free telephone number, and also including, but not limited to, any other communications through the Governor's office, Cabinet Secretaries, agency heads, U.S. Mail, fax, and the Internet.
• Make appropriate efforts to publicize the availability of the hotline and ways of accessing it.
• Implement a process for handling allegations of fraud, waste, and abuse received via the Hotline.
• Deliver ongoing training to state agency heads and managers on prevention of waste, fraud, and abuse.
• Ensure that instances of potential criminal conduct are referred forthwith to the appropriate law enforcement agency.
The State Inspector General shall e-mail all State employees at least annually to advise them of the Hotline and other means of reporting such problems.
The State Inspector General, through the Executive Branch's network of internal auditing programs and agency fraud, waste, and abuse coordinators, shall ensure that investigation and resolution activities are undertaken in response to allegations received through the Hotline. The State Inspector General may allow an internal auditing program at an executive branch agency to contract with a private firm in order to perform the investigations in a timely manner. Any such private firm shall comply with the applicable policies and procedures and the work must be supervised and approved by the contracting internal auditing program.
The State Inspector General shall undertake investigation and resolution activities in the most cost-effective manner possible. Responsibility for investigation or resolution activities shall be assigned to other investigative staffs when appropriate to avoid unnecessary duplication. Executive Branch agencies responsible for promulgating central administrative (e.g., personnel) policies will provide input on the interpretation of the policies applicable to investigations in order to ensure consistent and proper application of those policies so that appropriate conclusions are reached and recommendations made.
The State Inspector General shall review the reported corrective actions taken to rectify an actual fraud, waste, or abuse identified. If corrective actions are deemed insufficient, then the State Inspector General will conduct such follow-up as may be necessary to ensure that acceptable corrective actions are developed.
The State Inspector General shall conduct follow-up reviews to ensure that corrective action has been implemented. The results of such reviews shall be reported to the Governor's Chief of Staff and to the relevant cabinet secretary.
All executive branch agencies of the Commonwealth shall cooperate with and assist the State Inspector General and all investigators to the fullest extent. During the course of a Hotline investigation, investigators will have access to electronic and paper files, records, and documents, as well as personnel, facilities, property, and any other things necessary to conduct an investigation (Code of Virginia 2.2-310). This includes access to electronic and paper files maintained by the Virginia Information Technologies Agency (VITA) for other executive branch agencies as well as access to administrative investigative reports generated by an agency's in-house investigative unit that are germane to the hotline investigations.
Under no circumstances shall anyone directly or indirectly interfere with a Hotline investigation, or induce or coerce others not to cooperate with investigators. Any attempt to directly or indirectly interfere with a Hotline investigation is also prohibited and is subject to appropriate disciplinary action under the Standards of Conduct promulgated by the Department of Human Resource Management.
Under no circumstances shall anyone, directly or indirectly, attempt to identify or retaliate against someone suspected of calling or cooperating with the Hotline. This includes threatening to effect any reprisal; or taking, or directing others to take, or recommending, processing, or approving, any personnel action, or any other retaliatory actions, or attempts to do the same. Any such actions will be subject to appropriate disciplinary actions under the Standards of Conduct.
The Governor's Chief of Staff shall be responsible for addressing any instances of alleged interference with an investigation or retaliation against employees using the Hotline.
This Executive Order rescinds Executive Order Number Fifteen (2010), State Employee Fraud, Waste, and Abuse Hotline.
Effective Date of the Executive Order
This Executive Order shall be effective upon its signing and shall remain in full force and effect unless sooner amended or rescinded by further executive order.
Given under my hand and under the Seal of the Commonwealth of Virginia this 9th day of October 2012.
/s/ Robert F. McDonnell
Governor
