Senate Bill No. 417
(By Senators Unger, Snyder and Craigo)
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[Introduced March 7, 2001; referred to the Committee on
Education; and then to the Committee on Finance.]
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A BILL to amend article nine-d, chapter eighteen of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
six-a; and to amend and reenact section fifteen of said
article, all relating to creation of the schools for growth
counties fund; legislative findings; providing funding sources
for the fund; defining "growth county"; providing the manner
of allocating moneys distributed from the fund; and providing
that it is the intent of the Legislature to provide funding
for construction needed to provide additional space and
facilities in counties experiencing substantial increases in
student enrollment which create a need for additional space and facilities.
Be it enacted by the Legislature of West Virginia:
That article nine-d, chapter eighteen of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section six-a;
and that section fifteen of said article be amended and reenacted,
all to read as follows:
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
§18-9D-6a. Schools for growth counties fund.
(a) The Legislature finds:
(1) That growth counties have special needs regarding school
construction and improvements;
(2) That requiring full day, every day kindergarten has been
especially expensive for growth counties;
(3) That the use of enrollment figures from the previous year
for calculating an allocation in accordance with the state aid
formula also adds to the financial problems that growth counties
experience; and
(4) That although the allowance for increased enrollment helps
growth counties, it is intended for the operation of the schools
and is intended primarily for school construction and improvements.
(b) There is hereby created in the state treasury a special revenue fund named the schools for growth counties fund.
(1) Beginning in fiscal year two thousand two, any amount of
money deposited in the school construction fund created pursuant to
the provisions of section six of this article that exceed the
amounts deposited during the fiscal year beginning the first day of
July, two thousand, and ending on the thirtieth day of June, two
thousand one, shall be deposited in the schools for growth counties
fund created in this section: Provided, That the amount deposited
may not exceed five million dollars in any fiscal year.
(2) For the purposes of this section the term "growth county"
means a county in which there has been more than five percent
growth in the second month headcount enrollment between school year
one thousand nine hundred ninety one - one thousand nine hundred
ninety-two and school year two thousand - two thousand one, and in
every nine-year period thereafter.
(3) Any growth county designated to receive funds from the
schools for growth counties fund shall first provide matching funds
in a ratio not less than one dollar for every two dollars
designated from the fund for that county and shall meet all other
funding requirements of the authority.
(4) Moneys accruing to the schools for growth counties fund in any specific fiscal year that exceed the moneys requested by
qualified growth counties shall revert to the school construction
fund.
(c) The school building authority shall distribute funds from
the schools for growth counties fund pursuant to the following:
(1) The school building authority may use the funds
appropriated pursuant to this section only for school construction
or improvements in counties classified as growth counties for
either the current or previous two fiscal years; and
(2) The school building authority may use the funds
appropriated pursuant to this section only for school construction
or improvements in counties that the school building authority
determines need additional building space as a result of the
increase in net enrollment.
§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 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 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 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 allocate no 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: Provided, That nothing in this section
may be construed to prohibit the requirement of matching funds from
counties receiving funding from the schools for growth counties
fund. 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,
however,
That the state board of education shall
promulgate rules 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
: Provided, That notwithstanding any
provision of this code to the contrary, growth counties remain
eligible to receive allocations from the school construction fund
and the school major improvement fund.
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:
Provided, That a vendor who has been debarred pursuant to the
provisions of sections thirty-three-a through thirty-three-f,
article three, chapter five-a of this code, may not bid on or be
awarded a contract under this section.
NOTE: The purpose of this bill is to create a special revenue
fund called the Schools for Growth Counties Fund, to provide school
construction or improvements in counties classified as growth
counties for either the current or two previous years. It requires
the Legislature to appropriate a maximum total of $5 million to
this fund beginning in fiscal year 2002, from any net increase in lottery profits over the prior fiscal year.
Any growth county designated to receive funds is required to
provide matching funds in a ratio of not less than $1 for every $2
designated from the fund. Moneys in the fund which exceed the
moneys requested by qualified growth counties are to revert to the
school construction fund.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§18-5D-6a is new; therefore, strike-throughs and underscoring
have been omitted.