Introduced Version
Senate Bill 560 History
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Senate Bill No. 560
(By Senators Palumbo, McCabe, Wells, Walters, D. Hall, Unger,
Beach, Williams and Stollings)
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[Introduced March 18, 2013; referred to the Committee on
Education; and then to the Committee on Finance .]
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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 rulemaking; 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.