Senators Question Vagueness of Emergency Small Business Act

Jan 22, 2014

House Bill 4175, The West Virginia Emergency Small Business Act, has two basic provisions.

The first gives the governor authority to direct the state Office of Homeland Security and Emergency Management to write emergency rules. Those rules would allow the state to provide some form of monetary assistance to small businesses during a declared State of Emergency.

Legislative Counsel Doren Burrell explains House Bill 4175 to the Senate Committee on Economic Development.
Credit Ashton Marra

The second says the state can collect repayment of that aide from the business if it recoups losses from a third party. For example, if the business sues as a result of losses during a state of emergency and settles or is granted an award by a jury, the bill says the state shall be repaid from those funds.

Senator Bob Williams said during a meeting of the Senate Economic Development Committee, the bill was left purposefully vague by members of the House so as to not tie the governor’s hand during an unforeseen emergency, but that wasn’t enough to halt the concerns of some Senators.

Sen Dave Sypolt, R-Preston County:

-What was the definition of a small business? Who was eligible for the assistance?
-What could those businesses use the money for? Lost supplies? Reimbursing employees for lost wages?
-How many other states have a similar method of assistance during a State of Emergency?
-Is there any specific amount of loss that has to be proven before a business can be eligible for relief?
-Is the bill retroactive? Can businesses who suffered losses under Hurricane Sandy or the derecho apply for aide?

Counsel responded any definition of who is eligible, the amount they are eligible for and how they can use the funds would be defined in the written emergency rules. Counsel explained some states do have funds contingency funds and grant programs to aide during States of Emergency and the bill is written prospectively, not taking previous States of Emergency into account.

Sen. Roman Prezioso, D-Marion County, Finance Chair:

-Is there a defined source of funds identified?
-Is there a cap to funds available?
-Does the bill allow for low or zero interest loans? Is there a time limit for repayment?

Counsel explained the only defined source of funds is the governor’s contingency fund, a fund he has full control over. The bill proposes available funds be capped at $2 million, which is near the current balance of the contingency fund. The type of funding assistance available, whether it be loans, grants, or tax credits, are to be specified in the written emergency rules.

Sen. Ron Stollings, D-Mingo County, Health and Human Resources Chair:

-Does this bill fulfill the intent of members of the House of Delegates and provide immediate assistance to those affected by the current water crisis?

Counsel explained should the governor continue the current State of Emergency, upon passage he could use this bill to provide relief for Kanawha Valley businesses.

The committee did not take action on House Bill 4175. Instead, they plan to further discuss the provisions and possible amendments at their next meeting.