H. B. 4449
(By Delegates Poling and Paxton)
[Originating in to the
Committee on Education]
(February 6, 2008)
A BILL to
amend and reenact §18B-5-4 of the Code of West
Virginia, 1931, as amended, relating to purchase or
acquisition of materials, supplies, equipment, services and
printing; and extending to the Higher Education Policy
Commission and the West Virginia Council for Community and
Technical College Education the authority to enter into
lease-purchase agreements for capital improvements,
including equipment.
Be it enacted by the Legislature of West Virginia:
That §18B-5-4 of the Code of West Virginia, 1931, be amended
and reenacted to read as follows:
ARTICLE 5. HIGHER EDUCATION BUDGETS AND EXPENDITURES.
§18B-5-4. Purchase or acquisition of materials, supplies,
equipment, services and printing.
(a) The Council, Commission and each governing board, through the Vice Chancellor for Administration, shall purchase or
acquire all materials, supplies, equipment, services and printing
required for that governing board or the Council or Commission,
as appropriate, and the state institutions of higher education
under their jurisdiction, except the governing boards of Marshall
University and West Virginia University, respectively, are
subject to the provisions of subsection (d) of this section.
(b) The Commission and Council jointly shall adopt rules
governing and controlling acquisitions and purchases in
accordance with the provisions of this section. The rules shall
assure that the Council, Commission and governing boards:
(1) Do not preclude any person from participating and making
sales thereof to the governing board or to the Council or
Commission except as otherwise provided in section five of this
article. Provision of consultant services such as strategic
planning services
will does not preclude or inhibit the governing
boards, Council or Commission from considering any qualified bid
or response for delivery of a product or a commodity because
of
the rendering of those the consultant services
are rendered;
(2) Establish and prescribe specifications, in all proper
cases, for materials, supplies, equipment, services and printing
to be purchased;
(3) Adopt and prescribe such purchase order, requisition or other forms as may be required;
(4) Negotiate for and make purchases and acquisitions in
such quantities, at such times and under contract, in the open
market or through other accepted methods of governmental
purchasing as may be practicable in accordance with general law;
(5) Advertise for bids on all purchases exceeding twenty-
five thousand dollars, to purchase by means of sealed bids and
competitive bidding or to effect advantageous purchases through
other accepted governmental methods and practices;
(6) Post notices of all acquisitions and purchases for which
competitive bids are being solicited in the purchasing office of
the specified institution involved in the purchase, at least two
weeks prior to making such purchases and ensure that the notice
is available to the public during business hours;
(7) Provide for purchasing in the open market;
(8) Provide for vendor notification of bid solicitation and
emergency purchasing;
(9) Provide that competitive bids are not required for
purchases of twenty-five thousand dollars or less; and
(10) Provide for not fewer than three bids where bidding is
required. If fewer than three bids are submitted, an award may
be made from among those received.
(c) When a state institution of higher education submits a contract, agreement or other document to the Attorney General for
approval as to form as required by this chapter the following
conditions apply:
(1) "Form" means compliance with the Constitution and
statutes of the State of West Virginia.
(2) The Attorney General does not have the authority to
reject a contract, agreement or other document based on the
substantive provisions therein or any extrinsic matter so long as
there is compliance it complies with the Constitution and
statutes of this State.
(3) Within fifteen days of receipt, the Attorney General
must shall notify the appropriate state institution of higher
education in writing that the contract, agreement or other
document is approved or disapproved as to form. If the contract,
agreement or other document is disapproved as to form, the notice
of disapproval
must shall identify each defect that supports the
disapproval.
(4) If the state institution elects to challenge the
disapproval by filing a Writ of Mandamus or other action and
prevails, then the Attorney General shall pay reasonable attorney
fees and costs incurred.
(d) Pursuant to this subsection, the governing boards of
Marshall University and West Virginia University, respectively, may:
(1) Purchase or acquire all materials, supplies, equipment,
services and printing required for the governing board without
approval from the Commission or the Vice Chancellor for
Administration and may issue checks in advance to cover postage
as provided in subsection (f) of this section;
(2) Make purchases from cooperative buying groups,
consortia, the federal government or from federal government
contracts if the materials, supplies, services, equipment or
printing to be purchased is available from these groups and if
this would be the most financially advantageous manner of making
the purchase;
(3) Select and acquire by contract or lease all grounds,
buildings, office space or other space,
and capital improvements,
including equipment, the rental of which is necessarily required
by the governing board; and
(4) Use purchase cards under terms approved for the
Commission, the Council and governing boards of state
institutions of higher education and participate in any expanded
program of use as provided in subsection (w) of this section.
(e) The governing boards shall adopt sufficient accounting
and auditing procedures and promulgate and adopt appropriate
rules subject to the provisions of section six, article one of this chapter to govern and control acquisitions, purchases,
leases and other instruments for grounds, buildings, office or
other space,
and capital improvements, including equipment, or
lease-purchase agreements.
(f) The Council, Commission or each governing board, through
the Vice Chancellor for Administration, may issue a check in
advance to a company supplying postage meters for postage used by
that board, the Council or Commission and by the state
institutions of higher education under their jurisdiction.
(g) When a purchase is to be made by bid, any or all bids
may be rejected. However, all purchases based on advertised bid
requests shall be awarded to the lowest responsible bidder taking
into consideration the qualities of the articles to be supplied,
their conformity with specifications, their suitability to the
requirements of the governing boards, Council or Commission and
delivery terms. The preference for resident vendors as provided
in section thirty-seven, article three, chapter five-a of this
code apply to the competitive bids made pursuant to this section.
(h) The governing boards, Council and Commission shall
maintain a purchase file, which shall be a public record and open
for public inspection. After the award of the order or contract,
the governing boards, Council and Commission shall indicate upon
the successful bid that it was the successful bid and shall
further indicate why bids are rejected and, if the mathematical low vendor is not awarded the order or contract, the reason
therefor. A record in the purchase file may not be destroyed
without the written consent of the Legislative Auditor. Those
files in which the original documentation has been held for at
least one year and in which the original documents have been
reproduced and archived on microfilm or other equivalent method
of duplication may be destroyed without the written consent of
the Legislative Auditor. All files, no matter the storage
method, shall be open for inspection by the Legislative Auditor
upon request.
(i) The Commission and Council also jointly shall adopt
rules to prescribe qualifications to be met by any person who is
to be employed as a buyer pursuant to this section. These rules
shall require that a person may not be employed as a buyer unless
that person, at the time of employment, either is:
(1) A graduate of an accredited college or university; or
(2) Has at least four years' experience in purchasing for
any unit of government or for any business, commercial or
industrial enterprise.
(j) Any person making purchases and acquisitions pursuant to
this section shall execute a bond in the penalty of fifty
thousand dollars, payable to the State of West Virginia, with a
corporate bonding or surety company authorized to do business in this state as surety thereon, in form prescribed by the Attorney
General and conditioned upon the faithful performance of all
duties in accordance with this section and sections five through
eight, inclusive, of this article and the rules of the governing
board and the Council and Commission. In lieu of separate bonds
for such buyers, a blanket surety bond may be obtained. Any such
bond shall be filed with the Secretary of State. The cost of any
such bond shall be paid from funds appropriated to the applicable
governing board or the Council or Commission.
(k) All purchases and acquisitions shall be made in
consideration and within limits of available appropriations and
funds and in accordance with applicable provisions of article
two, chapter five-a of this code relating to expenditure
schedules and quarterly allotments of funds. Notwithstanding any
other provision of this code to the contrary, only those
purchases exceeding the dollar amount for competitive sealed bids
in this section are required to be encumbered and they may be
entered into the state's centralized accounting system by the
staff of the Commission, Council or governing boards to satisfy
the requirements of article two, chapter five-a of this code and
specifically sections twenty-six, twenty-seven and twenty-eight
of said article to determine whether the amount of the purchase
is within the Commission's, Council's or governing board's
quarterly allotment, is in accordance with the approved expenditure schedule and otherwise conforms to the provisions of
said article.
(l) The governing boards, Council and Commission may make
requisitions upon the Auditor for a sum to be known as an advance
allowance account, not to exceed five percent of the total of the
appropriations for the governing board, Council or Commission,
and the Auditor shall draw a warrant upon the Treasurer for such
accounts. All advance allowance accounts shall be accounted for
by the applicable governing board or the Council or Commission
once every thirty days or more often if required by the State
Auditor.
(m) Contracts entered into pursuant to this section shall be
signed by the applicable governing board or the Council or
Commission in the name of the state and shall be approved as to
form by the Attorney General. A contract which requires approval
as to form by the Attorney General is considered approved if the
Attorney General has not responded within fifteen days of
presentation of the contract. A contract or a change order for
that contract and notwithstanding any other provision of this
code to the contrary, associated documents such as performance
and labor/material payments, bonds and certificates of insurance
which use terms and conditions or standardized forms previously
approved by the Attorney General and do not make substantive
changes in the terms and conditions of the contract do not require approval as to form by the Attorney General. The
Attorney General shall make a list of those changes which he or
she considers to be substantive and the list, and any changes
thereto, shall be published in the State Register. A contract
that exceeds the dollar amount requiring competitive sealed bids
in this section shall be filed with the State Auditor. If
requested to do so, the governing boards, Council or Commission
shall make all contracts available for inspection by the State
Auditor. The governing board, Council or Commission, as
appropriate, shall prescribe the amount of deposit or bond to be
submitted with a bid or contract, if any, and the amount of
deposit or bond to be given for the faithful performance of a
contract.
(n) If the governing board, Council or Commission purchases
or contracts for materials, supplies, equipment, services and
printing contrary to the provisions of sections four through
seven of this article or the rules pursuant thereto, such
purchase or contract is void and of no effect.
(o) Any governing board or the Council or Commission, as
appropriate, may request the Director of purchases to make
available, from time to time, the facilities and services of that
department to the governing boards, Council or Commission in the
purchase and acquisition of materials, supplies, equipment,
services and printing and the director of purchases shall cooperate with that governing board, Council or Commission, as
appropriate, in all such purchases and acquisitions upon such
request.
(p) Each governing board or the Council or Commission, as
appropriate, shall permit private institutions of higher
education to join as purchasers on purchase contracts for
materials, supplies, services and equipment entered into by that
governing board or the Council or Commission. Any private school
desiring to join as purchasers on such purchase contracts shall
file with that governing board or the Council or Commission an
affidavit signed by the president of the institution of higher
education or a designee requesting that it be authorized to join
as purchaser on purchase contracts of that governing board or the
Council or Commission, as appropriate. The private school shall
agree that it is bound by such terms and conditions as that
governing board or the Council or Commission may prescribe and
that it will be responsible for payment directly to the vendor
under each purchase contract.
(q) Notwithstanding any other provision of this code to the
contrary, the governing boards, Council and Commission, as
appropriate, may make purchases from cooperative buying groups,
consortia, the federal government or from federal government
contracts if the materials, supplies, services, equipment or
printing to be purchased is available from cooperative buying groups, consortia, the federal government or from a federal
contract and purchasing from the cooperative buying groups,
consortia, federal government or from a federal government
contract would be the most financially advantageous manner of
making the purchase.
(r) An independent performance audit of all purchasing
functions and duties which are performed at any state institution
of higher education, except Marshall University and West Virginia
University, shall be performed each fiscal year. The Joint
Committee on Government and Finance shall conduct the performance
audit and the governing boards, Council and Commission, as
appropriate, are responsible for paying the cost of the audit
from funds appropriated to the governing boards, Council or
Commission.
(1) The governing boards of Marshall University and West
Virginia University, respectively, shall provide for independent
performance audits of all purchasing functions and duties on
their campuses at least once in each three-year period.
(2) Each audit shall be inclusive of the entire time period
that has elapsed since the date of the preceding audit.
(3) Copies of all appropriate documents relating to any
audit performed by the governing boards of Marshall University
and West Virginia University shall be furnished to the Joint Committee on Government and Finance and the Legislative Oversight
Commission on Education Accountability within thirty days of the
date the audit report is completed.
(s) The governing boards shall require each institution
under their respective jurisdictions to notify and inform every
vendor doing business with that institution of the provisions of
section fifty-four, article three, chapter five-a of this code,
also known as the Prompt Pay Act of 1990.
(t) Consultant services, such as strategic planning
services,
may do not preclude or inhibit the governing boards,
Council or Commission from considering any qualified bid or
response for delivery of a product or a commodity because of the
rendering of those consultant services.
(u)
The Commission or Council may enter into lease-purchase
agreements for capital improvements, including equipment, on
behalf of or for the benefit of state institutions of higher
education, the Commission or Council. After the Commission or
Council, as appropriate, has granted approval for lease-purchase
arrangements agreements by the governing boards, a governing
board, may enter into lease-purchase
arrangements agreements for
capital improvements, including equipment, except the governing
boards of Marshall University and West Virginia University may
enter into lease-purchase
arrangements agreements for the state
institutions of higher education known as Marshall University and West Virginia University without seeking the approval of the
Commission or the Council. Any lease-purchase
arrangement
agreement so entered shall constitute a special obligation of the
State of West Virginia. The obligation under a lease-purchase
arrangement agreement so entered may be from any funds legally
available to the
Commission, Council or the institution and must
be cancelable at the option of the
Commission, Council or the
governing board or institution at the end of any fiscal year.
The obligation, any assignment or securitization thereof, never
constitutes an indebtedness of the State of West Virginia or any
department, agency or political subdivision thereof, within the
meaning of any constitutional provision or statutory limitation,
and may not be a charge against the general credit or taxing
powers of the state or any political subdivision thereof. Such
facts shall be plainly stated in any lease-purchase agreement.
Further, the lease-purchase agreement shall prohibit assignment
or securitization without consent of the lessee and the approval
of the agreement as to form by the Attorney General of West
Virginia. Proposals for any
arrangement must agreement shall be
requested in accordance with the requirements of this section and
any rules or guidelines of the Commission and Council. In
addition, any lease-purchase agreement which exceeds one hundred
thousand dollars total shall be approved as to form by the
Attorney General of West Virginia. The interest component of any lease-purchase obligation is exempt from all taxation of the
State of West Virginia, except inheritance, estate and transfer
taxes. It is the intent of the Legislature that if the
requirements set forth in the Internal Revenue Code of 1986, as
amended, and any regulations promulgated pursuant thereto are
met, the interest component of any lease-purchase obligation also
is exempt from the gross income of the recipient for purposes of
federal income taxation and may be designated by the governing
board or the president of the institution as a bank-qualified
obligation.
(v) Notwithstanding any other provision of this code to the
contrary, the Commission, Council and governing boards have the
authority, in the name of the state, to lease, or offer to lease,
as lessee, any grounds, buildings, office or other space in
accordance with this paragraph and as provided below:
(1) The Commission, Council and governing boards have sole
authority to select and to acquire by contract or lease all
grounds, buildings, office space or other space, the rental of
which is necessarily required by the Commission, Council or
governing boards for the institutions under their jurisdiction.
For state institutions of higher education other than Marshall
University and West Virginia University, the Chief Executive
Officer of the Commission, Council or an institution shall
certify the following:
(A) That the grounds, buildings, office space or other space
requested is necessarily required for the proper function of the
Commission, Council or institution;
(B) That the Commission, Council or institution will be
responsible for all rent and other necessary payments in
connection with the contract or lease; and
(C) That satisfactory grounds, buildings, office space or
other space is not available on grounds and in buildings
currently owned or leased by the Commission, Council or the
institution. Before executing any rental contract or lease, the
Commission, Council or a governing board shall determine the fair
rental value for the rental of the requested grounds, buildings,
office space or other space, in the condition in which they
exist, and shall contract for or lease the premises at a price
not to exceed the fair rental value.
(2) The Commission, Council and governing boards are
authorized to enter into long-term agreements for buildings, land
and space for periods longer than one fiscal year but not to
exceed forty years. Any purchase of real estate, any lease-
purchase agreement and any construction of new buildings or other
acquisition of buildings, office space or grounds resulting
therefrom, pursuant to the provisions of this subsection shall be
presented by the Commission or Council, as appropriate, to the
Joint Committee on Government and Finance for prior review. Any such lease shall contain, in substance, all the following
provisions:
(A) That the Commission, Council or governing board, as
lessee, has the right to cancel the lease without further
obligation on the part of the lessee upon giving thirty days'
written notice to the lessor at least thirty days prior to the
last day of the succeeding month;
(B) That the lease is considered canceled without further
obligation on the part of the lessee if the Legislature or the
federal government fails to appropriate sufficient funds therefor
or otherwise acts to impair the lease or cause it to be canceled;
and
(C) That the lease is considered renewed for each ensuing
fiscal year during the term of the lease unless it is canceled by
the Commission, Council or governing board before the end of the
then-current fiscal year.
(3) The Commission, Council or institution which is granted
any grounds, buildings, office space or other space leased in
accordance with this section may not order or make permanent
changes of any type thereto, unless the Commission, Council or
governing board, as appropriate, has first determined that the
change is necessary for the proper, efficient and economically
sound operation of the institution. For purposes of this section, a "permanent change" means any addition, alteration,
improvement, remodeling, repair or other change involving the
expenditure of state funds for the installation of any tangible
thing which cannot be economically removed from the grounds,
buildings, office space or other space when vacated by the
institution.
(4) Leases and other instruments for grounds, buildings,
office or other space, once approved by the Commission, Council
or governing board, may be signed by the Chief Executive Officer
of the Commission, Council or institution. Any lease or
instrument exceeding one hundred thousand dollars annually shall
be approved as to form by the Attorney General. A lease or other
instrument for grounds, buildings, office or other space that
contains a term, including any options, of more than six months
for its fulfillment shall be filed with the State Auditor.
(5) The Commission and Council jointly may promulgate rules
they consider necessary to carry out the provisions of this
section. The governing boards of Marshall University and West
Virginia University shall promulgate rules pursuant to section
six, article one of this chapter to implement the provisions of
this section.
(w) Purchasing card use may be expanded by the Council,
Commission and state institutions of higher education pursuant to
the provisions of this subsection.
(1) The Council and Commission jointly shall establish
procedures to be implemented by the Council, Commission and any
institution under their respective jurisdictions using purchasing
cards. The procedures shall ensure that each maintains:
(A) Appropriate use of the purchasing card system;
(B) Full compliance with the provisions of article three,
chapter twelve of this code relating to the purchasing card
program; and
(C) Sufficient accounting and auditing procedures for all
purchasing card transactions.
(2) By the first day of November, two thousand four, the
Council and Commission jointly shall present the procedures to
the Legislative Oversight Commission on Education Accountability
for its adoption.
(3) Notwithstanding any other provision of this code to the
contrary, if the Legislative Oversight Commission on Education
Accountability adopts the procedures, the Council, Commission,
and any institution authorized pursuant to subdivision (4) of
this subsection, may use purchasing cards for:
(A) Travel expenses directly related to the job duties of
the traveling employee, including fuel and food; and
(B) Any routine, regularly scheduled payment, including, but
not limited to, utility payments and real property rental fees. The Council, Commission and each institution, annually by the
thirtieth day of June, shall provide to the State Purchasing
Division a list of all goods or services for which payment was
made pursuant to this provision during that fiscal year.
(4) The Commission and Council each shall evaluate the
capacity of each institution under its jurisdiction for complying
with the procedures established pursuant to subdivision (3) of
this subsection. The Commission and Council each shall authorize
expanded use of purchasing cards pursuant to said subdivision for
any such institution it determines has the capacity to comply.
NOTE: The purpose of this bill is allow the Higher Education
Policy Commission and WV Council for Community and Technical
College Education to enter into lease-purchase agreements.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.