FISCAL NOTE
Date Requested: January 29, 2026
Time Requested: 06:17 PM |
| Agency: |
Economic Development Authority, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2809 |
Introduced |
HB4952 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
FUND(S):
Unknown
Sources of Revenue:
Other Fund Unknown
Legislation creates:
Creates New Expense, Creates New Program, Creates New Fund: 3 - Charter Schools-Direct Loan, Credit Enhancement, Facilities Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The West Virginia Economic Development Authority (“WVEDA”) is primarily a lender to manufacturers in the State of West Virginia. As such, the WVEDA’s personnel are experts in the underwriting of loans to private businesses that manufacture such things as commercial metals, wood products, plastics, electrical components, and packaging materials. This expertise allows the WVEDA loan officers to engage in credit analysis of each applicant by evaluating job creation, product need, cost to produce, competition, expertise of the managers, personal net worth of the owners, and other profitability factors.
HB4952 creates a loan program for charter schools. Charter schools would have virtually no commonality with manufacturers. If the WVEDA is tasked with implementing the program enacted by the bill, the startup would be substantial. The WVEDA would have to engage consultants with adequate knowledge of charter school financing and incur legal expense for the drafting of program policies that comply with the new law. Secondly, the WVEDA would have to hire additional personnel experienced in charter school regulations and financing.
The WVEDA also issues bonds for private and public industry. The WVEDA is a conduit issuer in those bond projects, meaning that no state funds are used to fund the bonds. Rather they are funded by private investors in the market. HB4952 enables the WVEDA to issue bonds to fund charter schools. However, it also requires the WVEDA to administer the debt service reserve funds for each bond financing project. This would entail substantial administrative responsibilities to the WVEDA and would be a significant departure from the WVEDA’s current bond responsibilities.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
8,025,000 |
10,365,000 |
8,400,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
25,000 |
300,000 |
300,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
8,000,000 |
10,065,000 |
8,100,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
While it is difficult for the WVEDA to estimate the costs to implement HB4952 with any degree of certainty, the WVEDA has estimated that the agency would have to hire a consultant with charter school financing expertise to review the bill and advise the WVEDA on what types of requirements need to be in the program policies. The WVEDA would also have to incur substantial legal fees to draft policies and ensure compliance with the bill. The WVEDA would need to hire two employees with expertise in school financing to administer the programs. The WVEDA would also need to provide training for current personnel, and incur additional ongoing legal fees to bond counsel for any bonds issued by the WVEDA. Lastly and most importantly, the WVEDA would need the funds to make the loans to applicants which are capped at $2,000,000 per school.
The very rough estimates included in this fiscal note include the following:
Current expenses:
-new employee salaries and benefits
-ongoing legal fees for bond counsel and other legal requirements once the programs are fully implemented
-misc. training, travel, etc.
Other Expenses:
-consultant fees
-legal fees specific to development of program policies
-training for existing personnel
-set up of new employee (office build-out, equipment, etc.)
-funds to make loans
It is not possible to estimate the increased revenue at this time because there is no way for the WVEDA to anticipate how many loans would be requested each year.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
As previously noted, the start-up of these programs for the WVEDA would be substantial given the lack of expertise of the WVEDA personnel in anything related to charter schools or education in general. The start-up phase for the WVEDA could delay the ability to begin making loans or issuing bonds in comparison to an agency that is already well versed in education and charter schools. Perhaps, another state entity with existing expertise in education and/or charter schools should be considered or created for implementation of these programs.
Lines 92-93 of the bill state that up to 3% of funds in the Charter School Direct Loan Program Fund and up to 3% of funds in the Charter School Credit Enhancement Fund may be transferred to the Charter School Finance Authority Fund. The Charter School Finance Authority Fund is not mentioned anywhere else in the bill. Was this language intended to refer to the Charter School Facilities Expense Fund created by the bill? If not, perhaps a reference to the Charter School Finance Authority Fund would be appropriate. A search of the West Virginia Code did not readily identify this fund.
Line 156 of the bill references Subsection (3)(iii)(1). This appears to be an error as there is no subsection (3)(iii)(1) in the bill.
Person submitting Fiscal Note: Teresa Helmick
Email Address: teresa.w.helmick@wv.gov