Senate Bill No. 209

(By Senator Snyder, Unger, Mitchell, Rowe, Edgell and Kessler)

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[Introduced January 15, 2002; 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 shall 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 - ninety-two and school year two thousand - two thousand one and in every nine-year period thereafter.
(3) The school building authority shall designate those counties which are eligible growth counties. 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 the 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.

 NOTE: The purpose of this bill is to require the school building authority to request an appropriation for school construction and improvements in growth counties.

This section is new; therefore, strike-throughs and underscoring have been omitted.