Senate Bill No. 424
(By Senators Unger, Bailey, Boley, Caldwell, Edgell, Helmick,
Minear, Mitchell, Oliverio, Plymale and Redd)
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[Originating in the Committee on Education;
reported January 25, 2002.]
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A BILL to amend and reenact section fifteen, article nine-d,
chapter eighteen of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to allowing the
school building authority to make counties offering a minimum
match a priority for distributing certain funds from the
school construction fund; and allowing the authority to commit
funds from the next fiscal year.
Be it enacted by the Legislature of West Virginia:
That section fifteen, article nine-d, chapter eighteen of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
§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 Except as provided in subsection (j) of this section,
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
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 priority for the
distribution of the excess funds over twenty-five million dollars
may be given to counties that propose a specific project that
demonstrates a priority need as identified by the authority and
offers minimum matching funds of one dollar for every two dollars
designated from the fund for that county. The authority may commit
funds from the next fiscal year to a county that shows evidence of
providing local funds equal to or exceeding the minimum required
match prior to the first day of November of the next fiscal year.
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,
inclusive, article three, chapter five-a of this code may not bid
on or be awarded a contract under this section.
(m) The authority may elect to disburse funds for approved
construction projects over a period of more than one year subject
to the following:
(1) The authority may not approve the funding of a project for
more than three years; and
(2) The authority may not approve the use of more than fifty
percent of the revenue for projects to be funded over more than one
year.