H. B. 3157
(By Delegates Williams and Shaver)
[Introduced January 13, 2010; referred to the
Committee on Education then Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §18-5-9c; and to
amend and reenact §18-9D-3 and §18-9D-15 of said code, all
relating to allowing a county board of education to enter into
lease-purchase agreements and allowing the School Building
Authority to provide one-time grants to a county board of
education for the purpose of entering into lease-purchase
agreements for the construction of school facilities.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §18-5-9c; and that
§18-9D-3 and §18-9D-15 of said code be amended and reenacted, all
to read as follows:
ARTICLE 5. COUNTY BOARD OF EDUCATION.
§18-5-9c. Lease-purchase agreements to provide school facilities.
Notwithstanding section twenty-six, article eight, chapter
eleven of this code or any other contrary provision of this code,
a county board may enter into a lease-purchase agreement for land,
buildings and capital improvements.
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
§18-9D-3. Powers of authority.
The School Building Authority has the power:
(1) To sue and be sued, plead and be impleaded;
(2) To have a seal and alter the same at pleasure;
(3) To contract to acquire and to acquire, in the name of the
authority, by purchase, lease-purchase or otherwise, not to exceed
a term of twenty-five years, or otherwise, real property or rights
or easements necessary or convenient for its corporate purposes,
and to exercise the power of eminent domain to accomplish those
purposes, and to accomplish the purposes as provided in subsection
twelve of this section;
(4) To acquire, hold and dispose of real and personal property
for its corporate purposes;
(5) To make bylaws for the management and rule of its affairs;
(6) To appoint, contract with and employ attorneys, bond
counsel, accountants, construction and financial experts,
underwriters, financial advisers, trustees, managers, officers and
such other employees and agents as may be necessary in the judgment
of the authority and to fix their compensation: Provided, That contracts entered into by the School Building Authority in
connection with the issuance of bonds under this article to provide
professional and technical services, including, without limitation,
accounting, actuarial, underwriting, consulting, trustee, bond
counsel, legal services and contracts relating to the purchase or
sale of bonds are subject to the provisions of article three,
chapter five-a of this code:
Provided, however, That
notwithstanding any other provisions of this code, any authority of
the Attorney General of this state relating to the review of
contracts and other documents to effectuate the issuance of bonds
under this article shall be exclusively limited to the form of the
contract and document:
Provided further, That the Attorney General
of this state shall complete all reviews of contracts and documents
relating to the issuance of bonds under this article within ten
calendar days of receipt of the contract and document for review;
(7) To make contracts and to execute all instruments necessary
or convenient to effectuate the intent of and to exercise the
powers granted to it by this article;
(8) To renegotiate all contracts entered into by it whenever,
due to a change in situation, it appears to the authority that its
interests will be best served;
(9) To acquire by purchase, eminent domain or otherwise all
real property or interests in the property necessary or convenient
to accomplish the purposes of this article;
(10) To require proper maintenance and insurance of any
project authorized under this section, including flood insurance
for any facility within the one hundred year flood plain at which
authority funds are expended;
(11) To charge rent for the use of all or any part of a
project or buildings at any time financed, constructed, acquired or
improved, in whole or in part, with the revenues of the authority;
(12) To assist any county board of education that chooses to
acquire land, buildings and capital improvements to existing school
buildings and property for use as public school facilities, by
lease from a private or public lessor for a term not to exceed
twenty-five years with an option to purchase pursuant to an
investment contract with the lessor on such terms and conditions as
may be determined to be in the best interests of the authority, the
State Board of Education and the county board of education,
consistent with the purposes of this article, by transferring funds
to the State Board of Education county board of education as
provided in subsection (d) subsections (f) and/or (g), section
fifteen of this article for the use of the county board of
education;
(13) To accept and expend any gift, grant, contribution,
bequest or endowment of money and equipment to, or for the benefit
of, the authority or any project under this article, from the State
of West Virginia or any other source for any or all of the purposes specified in this article or for any one or more of such purposes
as may be specified in connection with the gift, grant,
contribution, bequest or endowment;
(14) To enter on any lands and premises for the purpose of
making surveys, soundings and examinations;
(15) To contract for architectural, engineering or other
professional services considered necessary or economical by the
authority to provide consultative or other services to the
authority or to any regional educational service agency or county
board requesting professional services offered by the authority, to
evaluate any facilities plan or any project encompassed in the
plan, to inspect existing facilities or any project that has
received or may receive funding from the authority or to perform
any other service considered by the authority to be necessary or
economical. Assistance to the region or district may include the
development of preapproved systems, plans, designs, models or
documents; advice or oversight on any plan or project; or any other
service that may be efficiently provided to regional educational
service agencies or county boards by the authority;
(16) To provide funds on an emergency basis to repair or
replace property damaged by fire, flood, wind, storm, earthquake or
other natural occurrence, the funds to be made available in
accordance with guidelines of the School Building Authority;
(17) To transfer moneys to custodial accounts maintained by the School Building Authority with a state financial institution
from the school construction fund and the school improvement fund
created in the State Treasury pursuant to the provisions of section
six of this article, as necessary to the performance of any
contracts executed by the School Building Authority in accordance
with the provisions of this article;
(18) To enter into agreements with county boards and persons,
firms or corporations to facilitate the development of county board
projects and county board facilities plans. The county board
participating in an agreement shall pay at least twenty-five
percent of the cost of the agreement. Nothing in this section
shall be construed to supersede, limit or impair the authority of
county boards to develop and prepare their projects or plans;
(19) To encourage any project or part thereof to provide
opportunities for students to participate in supervised, unpaid
work-based learning experiences related to the student's program of
study approved by the county board. The work-based learning
experience must be conducted in accordance with a formal training
plan approved by the instructor, the employer and the student and
which sets forth at a minimum the specific skills to be learned,
the required documentation of work-based learning experiences, the
conditions of the placement, including duration and safety
provisions, and provisions for supervision and liability insurance
coverage as applicable. Projects involving the new construction and renovation of vocational-technical and adult education
facilities should provide opportunities for students to participate
in supervised work-based learning experiences, to the extent
practical, which meet the requirements of this subdivision.
Nothing in this subdivision may be construed to affect registered
youth apprenticeship programs or the provisions governing those
programs; and
(20) To do all things necessary or convenient to carry out the
powers given in this article.
§18-9D-15. Legislative intent; allocation of money among
categories of projects; lease-purchase options;
limitation on time period for expenditure of
project allocation; county maintenance budget
requirements; project disbursements over period of
years; preference for multicounty arrangements;
submission of project designs; set-aside to
encourage local participation.
(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 not 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 or the Excess Lottery 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 and moneys deposited into the School Access Safety
Fund pursuant to section five, article nine-f of this chapter, may
be allocated and may be expended by the authority for projects
authorized in accordance with the provisions of section sixteen of
this article 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 subsection moneys for school major improvement projects
authorized in accordance with the provisions of section sixteen of
this article 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.
Furthermore, upon application by a county board, the authority may
allocate and expend under this subsection moneys for school major
improvement projects for vocational programs at comprehensive high
schools, vocational schools cooperating with community and
technical college programs, or both. Each county board is
encouraged to cooperate with community and technical colleges in
the use of existing or development of new vocational technical
facilities. All projects eligible for funds from this subsection
shall be submitted directly to the authority which shall be solely
responsible for the project's evaluation, subject to the following:
(A) 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 facilities plan; and
(B) 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 not 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 or the Excess Lottery 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 and moneys
deposited into the School Access Safety Fund pursuant to section
five, article nine-f of this chapter, shall be set aside by the
authority as an emergency fund to be distributed in accordance with
the guidelines adopted by the authority.
(d) An amount that is not more than five 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 or the Excess Lottery 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 and moneys
deposited into the School Access Safety Fund pursuant to section
five, article nine-f of this chapter, may be reserved by the
authority for multiuse vocational-technical education facilities
projects that may include post-secondary programs as a first
priority use. The authority may allocate and expend under this
subsection moneys for any purposes authorized in this article on
multiuse vocational-technical education facilities projects,
including equipment and equipment updates at the facilities,
authorized in accordance with the provisions of section sixteen of
this article. If the projects approved under this subsection do
not require the full amount of moneys reserved, moneys above the
amount required may be allocated and expended in accordance with
other provisions of this article. A county board, the state board,
an administrative council or the joint administrative board of a
vocational-technical education facility which includes post-
secondary programs may propose projects for facilities or
equipment, or both, which are under the direct supervision of the
respective body:
Provided, That the authority shall, before allocating any moneys for a project under this subsection, consider
all other funding sources available for the project.
(e) 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 or the Excess Lottery 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 and moneys
deposited into the School Access Safety Fund pursuant to section
five, article nine-f of this chapter, shall be allocated and
expended on the basis of need and efficient use of resources for
projects funded in accordance with the provisions of section
sixteen of this article.
(f) If a county board proposes to finance a project that is
authorized in accordance with
section nine-c, article five of this
chapter or 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
not allocate moneys
in the form of a grant to the county board in
connection with the project:
Provided, That the authority may
transfer moneys to the
state county board
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:
Provided, however, That in the
event of default by the county board of the lease-purchase contract
under this section, the authority shall have no liability on the
lease-purchase contract: Provided further, That in such an event
of default, the county board may fulfill the terms of the
lease-purchase contract for up to two consecutive years from the
event of default utilizing funds granted to the county pursuant to
section ten, article nine-a of this chapter in order to fulfill the
terms of the lease-purchase contract: And provided further, That
if, at any time during the term of a lease-purchase contract under
this section, the State Board of Education takes control of a
county board pursuant to section five, article two-e of this
chapter, the authority may, in the sole discretion of the
authority, assume responsibility for the lease purchase contract.
(g) If a county board proposes to finance a project that is
authorized in accordance with section nine-c, article five of this
chapter or 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 moneys in the form of a loan to the county board in
connection with the project: Provided, That the authority may lend
moneys 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 any terms and
conditions that 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, subject
to the following:
(A) 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 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;
(B) 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;
(C) 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;
(D) 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
(E) If the loan becomes due and payable immediately, the
authority, in consultation with the state board,
shall may 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;
and
(4) In the event of default by the county board of the
lease-purchase contract under this section, the authority shall
have no liability on the lease-purchase contract: Provided, That
in such an event of default, the county board may fulfill the terms
of the lease-purchase contract for up to two consecutive years from
the event of default utilizing funds granted to the county purusant
to section ten, article nine-a of this chapter in order to fulfill
the terms of the lease-purchase contract: Provided, however, That
if, at any time during the term of a lease-purchase contract under
this section the State Board of Education takes control of a county
board pursuant to section five, article two-e, of this chapter, the
authority may, in the sole discretion of the authority, assume
responsibility for the lease-purchase contract.
(g) (h) 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 section, any
county board or other entity to whom moneys are allocated by the
authority that fails to expend the money within three years of the
allocation shall forfeit the allocation and thereafter is
ineligible for further allocations pursuant to this section until it 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. Funds may not be
distributed for any project under this article unless the
responsible entity has a facilities plan approved by the state
board and the School Building Authority and is prepared to commence
expenditure of the funds during the fiscal year in which the moneys
are distributed.
(h) (i) 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 for
projects authorized in accordance with the provisions of section
sixteen of this article, subject to the following:
(1) The moneys may not be distributed for any project under
this section unless the responsible entity has a facilities plan
approved by the state board and the authority and is to commence
expenditures of the funds during the fiscal year in which the
moneys are distributed;
(2) Any moneys allocated to a project and not distributed for that project shall be deposited in an account to the credit of the
project, the principal amount to remain to the credit of and
available to the project for a period of two years; and
(3) 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.
(i) (j) Local matching funds may not be required under the
provisions of this section. However, this article does not negate
the responsibilities of the county boards to maintain school
facilities. 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 shall promulgate rules relating to county
boards' maintenance budgets, including items which shall be
included in the budgets.
(j) (k) 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.
(k) (l) Funds in the School Construction Fund shall first be
transferred and expended as follows:
(1) Any funds deposited in the School Construction Fund shall
be expended first in accordance with an appropriation by the
Legislature.
(2) 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 for projects
authorized in accordance with the provisions of section sixteen of
this article.
(l) (m) 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.
(m) (n) 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. 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.
(n) (o) 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 school
construction project over a period of more than three years;
(2) The authority may not approve the use of more than fifty
percent of the revenue available for distribution in any given
fiscal year for projects that are to be funded over a period of
more than one year; and
(3) In order to encourage local participation in funding
school construction projects, the authority may set aside limited
funding, not to exceed $500,000, in reserve for one additional year
to provide a county the opportunity to complete financial planning
for a project prior to the allocation of construction funds. Any
funding shall be on a reserve basis and converted to a part of the
construction grant only after all project budget funds have been
secured and all county commitments have been fulfilled. Failure of
the county to solidify the project budget and meet its obligations to the state within eighteen months of the date the funding is set
aside by the authority will result in expiration of the reserve and
the funds shall be reallocated by the authority in the succeeding
funding cycle.
NOTE: The purpose of this bill is to allow a county board of
education to enter into a lease-purchase agreement for land,
buildings and capital improvements and to allow the School Building
Authority to provide one-time grants to a county board of education
for these same purposes.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.