Senate Bill No. 62

(By Senators Ross, Hunter, Boley, Love, Dawson and Ball)

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[Introduced January 13, 2000; referred to the Committee on Education; and then to the Committee on Finance.]
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A BILL to amend and reenact sections three, fifteen and sixteen, article nine-d, chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to the distribution of moneys by the school building authority; providing that county school boards may spend authority moneys on any school that has been included in an approved comprehensive educational facilities plan; providing that no one criterion, especially the economies of scale, may dominate other statutory criteria when decisions are made to award grant moneys; and requiring the school building authority to undergo legislative rule-making review and have its guidelines approved as legislative rules.

Be it enacted by the Legislature of West Virginia:
That sections three, fifteen and sixteen, article nine-d, chapter eighteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.

§18-9D-3. Powers of authority.
The school building authority has the power:
(1) To sue and be sued, plead and be impleaded;
(2) To have a seal and alter the same at pleasure;
(3) To contract to acquire and to acquire, in the name of the authority by purchase, lease-purchase not to exceed a term of twenty-five years, or otherwise, real property or rights or easements necessary or convenient for its corporate purposes and to exercise the power of eminent domain to accomplish those purposes;
(4) To acquire, hold and dispose of real and personal property for its corporate purposes;
(5) To make bylaws for the management and rule of its affairs and to propose legislative rules for promulgation in accordance with article three, chapter twenty-nine-a of this code as may be required by the provisions of this article or as may be necessary to carry out the provisions of this article;
(6) To appoint, contract with and employ attorneys, bond counsel, accountants, construction and financial experts, underwriters, financial advisers, trustees, managers, officers and such any other employees and agents as may be necessary in the judgment of the authority and to fix their compensation: Provided, That contracts entered into by the school building authority in connection with the issuance of bonds under this article to provide professional and technical services, including, without limitation, accounting, actuarial, underwriting, consulting, trustee, bond counsel, legal services and contracts relating to the purchase or sale of bonds are subject to the provisions of article three, chapter five-a of this code: Provided, however, That notwithstanding any other provisions of this code, any authority of the attorney general of this state relating to the review of contracts and other documents to effectuate the issuance of bonds under this article shall be is exclusively limited to the form of the contract and document: Provided further, That the attorney general of this state shall complete all reviews of contracts and documents relating to the issuance of bonds under this article within ten calendar days of receipt of the contract and document for review;
(7) To make contracts and to execute all instruments necessary or convenient to effectuate the intent of and to exercise the powers granted to it by this article;
(8) To renegotiate all contracts entered into by it whenever, due to a change in situation, it appears to the authority that its interests will be best served;
(9) To acquire by purchase, eminent domain or otherwise all real property or interests in the property necessary or convenient to accomplish the purposes of this article;
(10) To require proper maintenance and insurance of any project authorized under this section;
(11) To charge rent for the use of all or any part of a project or buildings at any time financed, constructed, acquired or improved, in whole or in part, with the revenues of the authority;
(12) To assist any county board of education that chooses to acquire land, buildings and capital improvements to existing school buildings and property for use as public school facilities, by lease from a private or public lessor for a term not to exceed twenty-five years with an option to purchase pursuant to an investment contract with the lessor on such terms and conditions as may be determined to be in the best interests of the authority, the state board of education and the county board of education, consistent with the purposes of this article, by transferring funds to the state board of education as provided in subsection (e), section fifteen of this article for the use of the county board of education;
(13) To accept and expend any gift, grant, contribution, bequest or endowment of money to, or for the benefit of, the authority, from the state of West Virginia or any other source for any or all of the purposes specified in this article or for any one or more of such those purposes as may be specified in connection with the gift, grant, contribution, bequest or endowment;
(14) To enter on any lands and premises for the purpose of making surveys, soundings and examinations;
(15) To contract for architectural, engineering or other professional services considered necessary or economical by the authority to provide consultative or other services to the authority or to any regional educational service agency or county board requesting professional services offered by the authority, to evaluate any facilities plan or any project encompassed in the plan, to inspect existing facilities or any project that has received or may receive funding from the authority, or to perform any other service considered by the authority to be necessary or economical. Assistance to the region or district may include the development of preapproved systems, plans, designs, models or documents; advice or oversight on any plan or project; or any other service that may be efficiently provided to regional educational service agencies or county boards by the authority;
(16) To provide funds on an emergency basis to repair or replace property damaged by fire, flood, wind, storm, earthquake or other natural occurrence, the funds to be made available in accordance with guidelines of the school building authority;
(17) To transfer moneys to custodial accounts maintained by the school building authority with a state financial institution from the school construction fund and the school improvement fund created in the state treasury pursuant to the provisions of section six of this article, as necessary to the performance of any contracts executed by the school building authority in accordance with the provisions of this article;
(18) To enter into agreements with county boards and persons, firms or corporations to facilitate the development of county board projects and county board facilities plans. The county board participating in an agreement shall pay at least twenty-five percent of the cost of the agreement. Nothing in this section shall may be construed to supersede, limit or impair the authority of county boards to develop and prepare their projects or plans; and
(19) To do all things necessary or convenient to carry out the powers given in conferred by this article.
§18-9D-15. Legislative intent; distribution of money.
(a) It is the intent of the Legislature to empower the school building authority to facilitate and provide state funds and to administer all federal funds provided for the construction and major improvement of school facilities so as to meet the educational needs of the people of this state in an efficient, thorough and economical manner. The authority shall make funding determinations in accordance with the provisions of this article and shall assess existing school facilities and each facility's school major improvement plan in relation to the needs of the individual student, the general school population, the communities served by the facilities and facility needs statewide.
(b) An amount that is no more than three percent of the sum of moneys that are determined by the authority to be available for distribution during the then current fiscal year from: (1) Moneys paid into the school building capital improvements fund pursuant to section ten, article nine-a of this chapter; (2) the issuance of revenue bonds for which moneys in the school building debt service fund are pledged as security; (3) moneys paid into the school construction fund pursuant to section six of this article; and (4) any other moneys received by the authority, except moneys paid into the school major improvement fund pursuant to section six of this article, may be allocated and may be expended by the authority for projects that service serve the educational community statewide or, upon application by the state board, for educational programs that are under the jurisdiction of the state board. In addition, upon application by the state board or the administrative council of an area vocational educational center established pursuant to article two-b of this chapter, the authority may allocate and expend under this section moneys for school major improvement projects proposed by the state board or an administrative council for school facilities under the direct supervision of the state board or an administrative council, respectively: Provided, That the authority may not expend any moneys for a school major improvement project proposed by the state board or the administrative council of an area vocational educational center unless the state board or an administrative council has submitted a ten-year school major improvement plan, to be updated annually, pursuant to section sixteen of this article: Provided, however, That the authority shall, before allocating any moneys to the state board or the administrative council of an area vocational educational center for a school improvement project, consider all other funding sources available for the project.
(c) An amount that is no more than two percent of the moneys that are determined by the authority to be available for distribution during the current fiscal year from: (1) Moneys paid into the school building capital improvements fund pursuant to section ten, article nine-a of this chapter; (2) the issuance of revenue bonds for which moneys in the school building debt service fund are pledged as security; (3) moneys paid into the school construction fund pursuant to section six of this article; and (4) any other moneys received by the authority, except moneys deposited into the school major improvement fund, shall be set aside by the authority as an emergency fund to be distributed in accordance with the guidelines adopted rules proposed for promulgation by the authority.
(d) The remaining moneys determined by the authority to be available for distribution during the then current fiscal year from: (1) Moneys paid into the school building capital improvements fund pursuant to section ten, article nine-a of this chapter; (2) the issuance of revenue bonds for which moneys in the school building debt service fund are pledged as security; (3) moneys paid into the school construction fund pursuant to section six of this article; and (4) any other moneys received by the authority, except moneys deposited into the school major improvement fund, shall be allocated and expended on the basis of need and efficient use of resources, the basis to be determined by the authority in accordance with the provisions of section sixteen of this article.
(e) If a county board of education proposes to finance a project that is approved pursuant to section sixteen of this article through a lease with an option to purchase leased premises upon the expiration of the total lease period pursuant to an investment contract, the authority may not allocate no any moneys to the county board in connection with the project: Provided, That the authority may transfer moneys to the state board of education, which, with the authority, shall lend the amount transferred to the county board to be used only for a one-time payment due at the beginning of the lease term, made for the purpose of reducing annual lease payments under the investment contract, subject to the following conditions:
(1) The loan shall be secured in the manner required by the authority, in consultation with the state board, and shall be repaid in a period and bear interest at a rate as determined by the state board and the authority and shall have such terms and conditions as are required by the authority, all of which shall be set forth in a loan agreement among the authority, the state board and the county board;
(2) The loan agreement shall provide for the state board and the authority to defer the payment of principal and interest upon any loan made to the county board during the term of the investment contract, and annual renewals of the investment contract, among the state board, the authority, the county board and a lessor: Provided, That in the event a county board, which has received a loan from the authority for a one-time payment at the beginning of the lease term, does not renew the subject lease annually until performance of the investment contract in its entirety is completed, the county board is in default and the principal of the loan, together with all unpaid interest accrued to the date of the default, shall at the option of the authority, in consultation with the state board, become due and payable immediately or subject to renegotiation among the state board, the authority and the county board: Provided, however, That if a county board renews the lease annually through the performance of the investment contract in its entirety, the county board shall exercise its option to purchase the leased premises: Provided further, That the failure of the county board to make a scheduled payment pursuant to the investment contract constitutes an event of default under the loan agreement: And provided further, That upon a default by a county board, the principal of the loan, together with all unpaid interest accrued to the date of the default, shall at the option of the authority, in consultation with the state board, become due and payable immediately or subject to renegotiation among the state board, the authority and the county board: And provided further, That if the loan becomes due and payable immediately, the authority, in consultation with the state board, shall use all means available under the loan agreement and law to collect the outstanding principal balance of the loan, together with all unpaid interest accrued to the date of payment of the outstanding principal balance; and
(3) The loan agreement shall provide for the state board and the authority to forgive all principal and interest of the loan upon the county board purchasing the leased premises pursuant to the investment contract and performance of the investment contract in its entirety.
(f) To encourage county boards to proceed promptly with facilities planning and to prepare for the expenditure of any state moneys derived from the sources described in this subsection, any county board failing to expend money within three years of the allocation to the county board shall forfeit the allocation and thereafter is ineligible for further allocations pursuant to this subsection until the county board is ready to expend funds in accordance with an approved facilities plan: Provided, That the authority may authorize an extension beyond the three-year forfeiture period not to exceed an additional two years. Any amount forfeited shall be added to the total funds available in the school construction fund of the authority for future allocation and distribution.
(g) The remaining moneys that are determined by the authority to be available for distribution during the then current fiscal year from moneys paid into the school major improvement fund pursuant to section six of this article shall be allocated and distributed on the basis of need and efficient use of resources, the basis to be determined by the authority in accordance with the provisions of section sixteen of this article: Provided, That the moneys may not be distributed to any county board that does not have an approved school major improvement plan or to any county board that is not prepared to commence expenditures of the funds during the fiscal year in which the moneys are distributed: Provided, however, That any moneys allocated to a county board and not distributed to that county board shall be deposited in an account to the credit of that county board, the principal amount to remain to the credit of and available to the county board for a period of two years. Any moneys which are unexpended after a two-year period shall be redistributed on the basis of need from the school major improvement fund in that fiscal year.
(h) No local matching funds may be required under the provisions of this section. However, the responsibilities of the county boards of education to maintain school facilities are not negated by the provisions of this article. To be eligible to receive an allocation of school major improvement funds from the authority, a county board must have expended in the previous fiscal year an amount of county moneys equal to or exceeding the lowest average amount of money included in the county board's maintenance budget over any three of the previous five years and must have budgeted an amount equal to or greater than the average in the current fiscal year: Provided, That the state board of education shall promulgate propose rules for promulgation relating to county boards' maintenance budgets, including items which shall be included in the budgets.
(i) Any county board may use moneys provided by the authority under this article in conjunction with local funds derived from bonding, special levy or other sources. Distribution to a county board, or to the state board or the administrative council of an area vocational educational center pursuant to subsection (b) of this section, may be in a lump sum or in accordance with a schedule of payments adopted by the authority pursuant to guidelines adopted by the authority.
(j) Funds in the school construction fund shall first be transferred and expended as follows:
Any funds deposited in the school construction fund shall be expended first in accordance with an appropriation by the Legislature. To the extent that funds are available in the school construction fund in excess of that amount appropriated in any fiscal year, the excess funds may be expended in accordance with the provisions of this article. Any projects which the authority identified and announced for funding on or before the first day of August, one thousand nine hundred ninety-five, or identified and announced for funding on or before the thirty-first day of December, one thousand nine hundred ninety-five, shall be funded by the authority in an amount which is not less than the amount specified when the project was identified and announced.
(k) It is the intent of the Legislature to encourage county boards to explore and consider arrangements with other counties that may facilitate the highest and best use of all available funds, which may result in improved transportation arrangements for students, or which otherwise may create efficiencies for county boards and the students. In order to address the intent of the Legislature contained in this subsection, the authority shall grant preference to those projects which involve multicounty arrangements as the authority shall determine reasonable and proper.
(l) County boards shall submit all designs for construction of new school buildings to the school building authority for review and approval prior to preparation of final bid documents.
§18-9D-16. Facilities and major improvement plans generally; need-based eligibility.

(a) To facilitate the goals as stated in section fifteen of this article and to assure the prudent and resourceful expenditure of state funds for construction projects as described in subsection (d) of said section, each county board of education shall submit a county-wide comprehensive educational facilities plan that addresses the facilities and major improvement needs of the county pursuant to such guidelines as shall be adopted legislative rules proposed for promulgation by the authority in accordance with this section and in accordance with each county's facilities plan approved by the state board of education. Any project receiving funding shall be in furtherance of such the approved county-wide facilities plan and any school included in the approved county-wide facilities plan is eligible for funding by the authority.
(1) To assure efficiency and productivity in the project approval process, the county-wide facilities plan shall be submitted only after a preliminary plan, a plan outline or a proposal for a plan has been submitted to the authority. Selected members of the authority, which selection shall include citizen members, shall then meet promptly with those persons designated by the county board to attend the facilities plan consultation. The purpose of the consultation is to assure understanding of the general goals of the school building authority as stated in subsection (a), section fifteen of this article and the specific goals encompassed in the following criteria and to discuss ways the plan may be structured to meet those goals.
(2) The guidelines rules for the development of a facilities plan shall state the manner, timeline and process for submission of any plan to the authority; such those project specifications as may be deemed considered appropriate by the authority; and those matters which are deemed determined by the authority to be important reflections of how the project will further the overall goals of the authority, as stated in subsection (a), section fifteen of this article.
(b) To facilitate the goals as stated in section fifteen of this article and to assure the prudent and resourceful expenditure of state funds derived from the school major improvement fund, each county board of education shall submit to the authority a ten-year county-wide school major improvement plan that addresses the major improvement needs of each school within the county. If the state board of education or the administrative council of an area vocational educational center chooses to seek funding for a major improvement project from the authority pursuant to subsection (f) of said section, the state board or such the administrative council shall submit a ten-year school major improvement plan that addresses the major improvement needs of the school or area vocational educational center for which funding is sought. Each ten-year school major improvement plan shall be prepared pursuant to such guidelines as shall be adopted legislative rules proposed for promulgation by the authority in accordance with this section and shall be updated annually to reflect projects completed and new or continuing needs. Any school major improvement project funded by the authority shall be in furtherance of such the approved school major improvement plan.
The guidelines rules for the development and annual updates of a ten-year school major improvement plan shall state the manner, timeline and process for submission of any plan, including a repair and replacement schedule for school facilities, to the authority; such those maintenance specifications as may be deemed considered appropriate by the authority; and those matters which are deemed determined by the authority to be important reflections of how the major improvement project or projects will further the overall goals of the authority, as stated in subsection (a), section fifteen of this article.
(c) The guidelines rules regarding submission of the facilities plans and school major improvement plans shall include requirements for public hearings, comments or other means of providing broad-based input within a reasonable time period as the authority may deem considers appropriate. The submission of each plan shall be accompanied by a synopsis of all comments received and a formal comment by the county board, the state board or the administrative council of an area vocational educational center submitting such the plan.
The guidelines rules regarding project specifications may include such matters as energy efficiency, preferred siting, construction materials, maintenance plan or any other matter related to how the project is to proceed. If a county board of education proposes to finance a construction project through a lease with an option to purchase pursuant to an investment contract as described in subsection (e), section fifteen of this article, the specifications for such the project shall include the term of the lease, the amount of each lease payment, including the payment due upon exercise of the option to purchase, and the terms and conditions of the proposed investment contract.
(d) The guidelines rules pertaining to quality educational facilities shall require that a facilities plan address how the current facilities do not meet and how the proposed plan and any project thereunder under the proposed plan does meet the following goals, which shall be equally considered and weighted by the authority in making its funding decisions:
(1) Student health and safety;
(2) Economies of scale, including compatibility with similar schools that have achieved the most economical organization, facility utilization and pupil-teacher ratios taking into account that population sparsity affects school sizes, transportation times and costs;
(3) Reasonable travel time and practical means of addressing other demographic considerations: Provided, That maximum reasonable travel times are thirty minutes for kindergarten through grade five, forty-five minutes for grades six through eight and sixty minutes for grades nine through twelve;
(4) Multicounty and regional planning to achieve the most effective and efficient instructional delivery system;
(5) Curriculum improvement and diversification, including computerization, distance learning and other technology and advanced senior courses in science, mathematics, language arts and social studies;
(6) Innovations in education;
(7) Adequate space for projected student enrollments; and
(8) To the extent constitutionally permissible, each facilities plan shall address the history of efforts taken by the county board to propose or adopt local school bond issues or special levies.
If the project is to benefit more than one county in the region, the facilities plan shall state the manner in which the cost and funding of the project shall be apportioned among the counties.
(e) The guidelines rules pertaining to quality educational facilities shall require that a school major improvement plan address how the proposed plan and any project thereunder under the proposed plan meet the following goals set forth in subsection (d) of this section:
(1) Student health and safety, including, but not limited to, critical health and safety needs; and
(2) Economies of scale, including regularly scheduled preventive maintenance: Provided, That each county board's school maintenance plan shall address regularly scheduled maintenance for all facilities within the county.
(f) Each county board's facilities plan and school major improvement plan shall prioritize all the construction projects or major improvement projects, respectively, within the county. A school major improvement plan submitted by the state board or the administrative council of an area vocational educational center shall prioritize all the school improvement projects contained in such the plan. Such This priority list shall be one of the criteria to be considered by the authority in determining how available funds shall are to be expended. In prioritizing the projects, the county board, the state board or the administrative council submitting a plan shall make determinations in accordance with the objective criteria formulated by the school building authority.
(g) Each facilities plan and school major improvement plan shall include the objective means to be utilized in evaluating implementation of the overall plan and each project included therein in the plan. Such This evaluation shall measure each project's furtherance of each applicable goal stated in this section and any guidelines rules adopted hereunder under this article, as well as the overall success of any project as it relates to the facilities plan or school major improvement plan and the overall goals of the authority.
(h) The state department of education shall conduct on-site inspections, at least annually, of all facilities which have been funded wholly or in part by moneys from the authority or state board to ensure compliance with the county board's facilities plan and school major improvement plan as related to such those facilities; to preserve the physical integrity of the facilities to the extent possible; and to otherwise extend the useful life of the facilities: Provided, That the state board shall submit reports regarding its on-site inspections of facilities to the authority within thirty days of completion of such on-site inspections: Provided, however, That the state board shall promulgate rules propose rules for promulgation regarding such on-site inspections and matters relating thereto to on-site inspections, in consultation with the authority, as soon as practical practicable and shall submit such those proposed rules for legislative review no later than the first day of December, one thousand nine hundred ninety-four.
(i) The authority may adopt guidelines propose rules for promulgation for requiring that a county board modify, update, supplement or otherwise submit changes or additions to an approved facilities plan or for requiring that a county board, the state board or the administrative council of an area vocational educational center modify, update, supplement or otherwise submit changes or additions to an approved county board facilities plan or school major improvement plan. The authority shall provide reasonable notification and sufficient time for such any change or addition as delineated in guidelines developed rules proposed for promulgation by the authority.
(j) Based on its on-site inspection or notification by the authority to the state board that the changes or additions to a county's board facilities plan or school major improvement plan required by the authority have not been implemented within the time period prescribed by the authority, the state board shall restrict the use of the necessary funds or otherwise allocate funds from moneys appropriated by the Legislature for those purposes set forth in section nine, article nine-a of this chapter.
(k) In proposing rules for the distribution of school building funds, as required under the provisions of this article, the authority shall comply with all provisions relating to legislative rules as set forth in article three, chapter twenty-nine-a of this code. Guidelines previously adopted by the authority are invalid and without effect until such time as the authority has proposed those guidelines as legislative rules and the rules have been approved for promulgation by the Legislature.



NOTE: The purpose of this bill is to amend certain provisions relating to the award and distribution of grant moneys from the school building authority. It provides that county school boards may spend authority moneys on any school that has been included in an approved comprehensive educational facilities plan; makes explicit that no one criterion, especially the economies of scale, may dominate other statutory criteria when decisions are made to award grant moneys; and requires the school building authority to undergo legislative rule-making review and have its guidelines approved as legislative rules.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.