Introduced Version
House Bill 2864 History
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Key: Green = existing Code. Red = new code to be enacted
H. B. 2864
(By Delegates Skaff, Moore, Poore, Raines,
Wells, Stowers, Morgan, Reynolds,
Lane, Eldridge and Manypenny)
[Introduced March 7, 2013; referred to the
Committee on Education then Finance.]
A BILL to amend and reenact §18B-18A-1, §18B-18A-2, §18B-18A-3,
§18B-18A-9, §18B-18A-11 and §18B-18A-12 of the Code of West
Virginia, 1931, as amended, all relating to the West Virginia
Research Trust Fund; increasing the recipients of the fund to
include all state land grant institutions of higher education;
redistribution of moneys; deposit into fund from General
Revenue Fund under certain conditions; deadline and
consequences for failure to obtain matching funds and
donations; legislative rule making; and reporting requirement.
Be it enacted by the Legislature of West Virginia:
That §18B-18A-1, §18B-18A-2, §18B-18A-3, §18B-18A-9, §18B-18A-
11 and §18B-18A-12 of the Code of West Virginia, 1931, as amended,
be amended and reenacted, all to read as follows:
ARTICLE 18A. DIRECTED RESEARCH ENDOWMENTS.
§18B-18A-1. Legislative findings; purpose; and intent.
(a) The Legislature finds that the continued expansion of the
nation's economy is dependent upon the ability of its institutions
of higher education to increase the quality, quantity and
productivity of its citizens who are engaged in scientific and
technical fields of study. Failure of the United States to compete
in these areas may lead to lower standards of living, dependence
upon foreign intellectual capital and international insecurity.
The economic future of West Virginia is equally dependent upon the
ability of Marshall University and West Virginia University, the
state's two doctoral-granting, public research universities, its
higher education institutions to promote, educate and train
researchers and research support staff in these diverse fields of
study.
The Legislature further finds that a recent emphasis on the
creation of innovative curricula and the receipt of significant
private donations by Marshall University and West Virginia
University West Virginia's higher education institutions has led to
major expansions in certain areas of study, including energy,
national security technology, environmental sciences, health and
biomedical sciences, biometrics, biotechnology and nanotechnology.
Despite these expansions, the additional investment of both private
donations and state moneys is critical to recruiting world-class
scientists, researchers, research staff, technicians and
professional degree graduates, as well as providing funding for laboratories and scientific equipment.
(b) The purpose of the Legislature in enacting this article is
to establish a state fund to be administered by the Higher
Education Policy Commission to address the findings outlined in
subsection (a) of this section. The fund will make public moneys
available to the state's two doctoral-granting public research
universities and any state land grant higher education institution
to match qualified private donations and qualified private donation
pledges thereby creating an incentive for donors to support certain
priority areas of study consistent with each participating
institution's long-range strategic plan for research. Creation of
this fund promotes strategic private donations targeted to specific
areas of research and creates a sustainable source of funding for
research initiatives that are critical to achieving long-term goals
including, but not limited to, the following:
(1) Research-based economic development and economic
diversification; and
(2) Increased potential for patenting, licensing and related
technology transfer and commercialization of scientific and
technological research in the state.
§18B-18A-2. Definitions.
(a) General -- For the purposes of this article, terms have
the meaning ascribed to them in section two, article one of this
chapter, unless the context in which the term is used clearly requires a different meaning or a specific definition is provided
in this section.
(b) Definitions --
(1) "Directed research endowment" or "research endowment"
means an account established at or administered by a participating
institution or its affiliated research corporation or foundation in
accordance with the provisions of section four of this article;
(2) "Directed research endowment plan" or "research plan"
means the strategies and procedures formally approved and adopted
by a governing board of a participating institution pursuant to
section seven of this article outlining how a participating
institution proposes to use directed research endowment proceeds to
meet established goals and objectives;
(3) "Directed research endowment proceeds" or "endowment
proceeds" means those investment earnings accruing to a
participating institution's directed research endowment and
available for expenditure by a participating institution or its
affiliated research corporation in accordance with the provisions
of section four of this article;
(4) "Trust fund" means the special account designated as the
West Virginia Research Trust Fund established in section three of
this article;
(5) "Participating institution" means Marshall University, or
West Virginia University and any other state land grant higher education institution;
(6) "Qualified private donation" or "qualified donation" means
any a private donation, gift or bequest to a directed research
endowment that meets the criteria set forth in section five of this
article;
(7) "Qualified private donation pledge" or "qualified pledge"
means any a pledge, commitment or other agreement to give a private
donation to a directed research endowment that is made pursuant to
a written agreement between the donor and the institution or its
affiliated research corporation or foundation and that meets the
criteria set forth in section five of this article;
(8) "Foundation" means a corporation created, organized and
located in West Virginia that meets the following conditions:
(A) Is organized and operated for educational purposes in
support of one or more state institutions of higher education;
(B) Is designated by the board of Governors of one or more
state institutions of higher education to receive charitable
contributions for educational purposes on behalf of the institution
or institutions;
(C) Does not have any part of its earnings inuring to the
benefit of any a private shareholder or individual;
(D) Is not disqualified from tax exemption under 26 U.S.C.
§501(c)(3) for any reason; and
(E) Does not participate or intervene in, on behalf of or in opposition to, any political campaigns for public office;
(9) "Research corporation" means an organization created
pursuant to the provisions of article twelve of this chapter; and
(10) "State college" means the West Virginia School of
Osteopathic Medicine, Bluefield State College, Concord University,
Fairmont State University, Glenville State College, Shepherd
University, West Liberty State College or West Virginia State
University.
§18B-18A-3. West Virginia Research Trust Fund.
(a) There is created in the State Treasury a special fund to
be known as the West Virginia Research Trust Fund which shall
consist consists of any appropriations of moneys to the fund made
by the Legislature, all earnings from investment of the fund and
any unmatched portion of state moneys returned by a State
Institution of Higher Education.
(b) Expenditures from the trust fund shall be made for the
purposes set forth in this article and are not subject to separate
appropriation by the Legislature. Any balance, including accrued
investment earnings on any unmatched portion of state moneys
returned by a state institution of higher education in the trust
fund at the end of each fiscal year shall does not expire to the
General Revenue Fund but shall remain remains in the trust fund and
be expended as provided by this article.
(c) In accordance with the provisions of section eight of this article, the commission shall make available seventy sixty-five
percent of moneys in this account to match qualified donations and
qualified pledges to West Virginia University; and thirty twenty-
five percent of the moneys to match qualified donations and
qualified pledges to Marshall University; and ten percent of moneys
in this account to match qualified donations and qualified pledges
to any other state land grant higher education institution.
(d) Investment earnings accruing in the account may be
expended by the commission to provide matching research funds to
state colleges in accordance with the provisions of section ten of
this article.
(e) The Legislature shall make available $25 million from the
state's General Revenue Fund to be deposited into the West Virginia
Research Trust Fund. This additional $25 million is available only
to Marshall University, West Virginia University and any state land
grant higher education institution to the extent these universities
raise the same amount in matching funds. The funds made available
by this subsection are distributed as described in subsection (c)
of this section.
§18B-18A-9. Reallocation of matching moneys.
(a) No later than seven two years from the effective date of
this article, July 1, 2013, each participating institution shall
have deposited into its research endowments an amount of qualified
donations equal to or greater than the total amount of moneys allocated for distribution to the institution pursuant to the
provisions of subsection (c), section three of this article.
(1) If one of the participating institutions fails to have
deposited into its research endowments the requisite amount of
qualified donations by the end of this seven two year period, then
any portion of the moneys allocated to the institution that has not
been distributed shall be reallocated for distribution to the other
participating institution institutions pursuant to the terms of
this article.
(2) To be eligible to receive a distribution of reallocated
moneys pursuant to this subsection, the other participating
institution institutions shall have qualified donations in excess
of the amount required by subsection (a) of this section deposited
into its research endowment(s) in an amount equal to or greater
than the amount of reallocated moneys.
(3) If the other participating institution institutions does
not have excess qualified donations on deposit, the reallocated
moneys shall be made available for distribution by the commission
to state colleges in accordance with the provisions of section ten
of this article.
(b) If any a pledge previously used by a participating
institution to obtain a distribution of matching moneys from the
trust fund has not been paid in full within seven two years from
the effective date of this article, July 1, 2013, then the institution shall return the unmatched portion of state moneys to
the trust fund. These moneys shall be reallocated for distribution
to the other participating institution institutions or to the state
colleges pursuant to the terms of this section and section ten of
this article as applicable.
(c) If both the participating institutions fail to have
deposited into their respective research endowments the requisite
amount of qualified donations within seven two years from the
effective date of this article, July 1, 2013, then any moneys
remaining in the trust fund that have not been distributed shall be
made available for distribution by the commission to state colleges
in accordance with the provisions of this article.
§18B-18A-11. Higher Education Policy Commission rule required;
emergency rule authorized.
(a) By October 1, 2008, 2013, the commission shall propose a
rule for legislative approval in accordance with the provisions of
section six, article one of this chapter and article three-a,
chapter twenty-nine-a of this code to implement the provisions and
purposes of this article. The rule shall include the following:
(1) Documentation standards and review procedures to determine
whether a donation or pledge meets the criteria of a qualified
donation or qualified pledge when initially received or when the
terms of a qualified donation or a qualified pledge are materially
altered;
(2) Eligibility criteria in accordance with the provisions of
section six of this article for the expenditure of endowment
proceeds to pay the base salaries of personnel, to fund research
fellowships and to purchase basic infrastructure;
(3) Procedures to ensure that endowment proceeds are expended
in compliance with the provisions of this article;
(4) A requirement for each participating institution to report
on the total amount of qualified donations received, the investment
earnings realized and any anticipated expenditures of the research
endowment proceeds in its annual operating budget; and
(5) Procedures for the competitive application and review of
requests from state colleges and criteria for the eligible use of
moneys distributed pursuant to section ten of this article.
(b) The Legislature finds that an emergency exists and,
therefore, the commission shall file a rule to implement the
provisions of this article as an emergency rule pursuant to the
provisions of article three-a, chapter twenty-nine-a of this code.
The rule is subject to the prior approval of the Legislative
Oversight Commission on Education Accountability.
§18B-18A-12. Annual report.
By January 1, 2010,and annually thereafter, 2015, the
commission shall submit a report to the Governor, the President of
the Senate, the Speaker of the House of Delegates and the
Legislative Oversight Commission on Education Accountability detailing implementation of the research endowments at each
participating institution, the amount of qualified donations
received by each participating institution in the preceding fiscal
year, the amount of any distributions made from the trust fund and
a description of the research and outcomes supported by those
moneys.
NOTE: The purpose of this bill is to increase the recipients
of the West Virginia Research Trust Fund to include all state land
grant institutions of higher education, to redistribute funds, to
deposit into the fund a sum certain from the General Revenue Fund
under certain conditions, to establish a deadline and consequences
for failure to obtain matching funds and donations, to authorize
legislative rule making and to require a report from commission by
January 1, 2015.
Strike-throughs indicate language that would be stricken from
the present law and underscoring indicates new language that would
be added.