Senate Bill No. 137
(By Senators Burdette, Mr. President, and Boley,
By Request of the Executive)
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[IntroducedJanuary 28, 1994; referred to the Committee
on Finance.]
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A BILL to repeal section thirty-a, article fifteen, chapter
eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to amend and reenact section
thirty of said article; to amend and reenact sections two,
six and fifteen, article nine-d, chapter eighteen of said
code; and to amend and reenact section eighteen, article
twenty-two, chapter twenty-nine of said code, all relating
to dedicating lottery proceeds toward the payment of bonds
issued and to be issued by the school building authority;
and providing for certification of the amount needed to pay
bond principal, interest and coverage ratios for each fiscal
year.
Be it enacted by the Legislature of West Virginia:
That section thirty-a, article fifteen, chapter eleven of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be repealed; that section thirty of said article be
amended and reenacted; that sections two, six and fifteen,article nine-d, chapter eighteen of said code be amended and
reenacted; and that section eighteen, article twenty-two, chapter
twenty-nine of said code be amended and reenacted, all to read as
follows:
CHAPTER 11. TAXATION.
ARTICLE 15. CONSUMERS SALES TAX.
§11-15-30. Proceeds of tax; dedication of certain revenues.
Beginning the first day of November, one thousand nine
hundred ninety-three, and continuing on the first day of each
succeeding month thereafter, there shall be dedicated monthly
from the collections of this tax, prior to the payment or
commitment of the proceeds or collections of this tax for any
other purpose whatsoever, an amount equal to one eighth of the
projected annual principal and interest requirements on any and
all revenue bonds and refunding bonds issued, or to be issued, on
or after the first day of January, one thousand nine hundred
ninety-four, for which bond moneys in the school building debt
service fund have been pledged, or will be pledged, for repayment
pursuant to section six, article nine-d, chapter eighteen of this
code, such principal and interest requirements having been
certified to the tax commissioner in accordance with the
provisions of said section: Provided, That in no event shall the
total dedicated collections of this tax to be paid into the
school building debt service fund, as provided in this section,
in any fiscal year exceed the lesser of the principal and
interest requirements certified to the tax commissioner asaforesaid, or twelve million dollars. The amount dedicated shall
be deposited on a monthly basis into the school building debt
service fund created pursuant to section six, article nine-d,
chapter eighteen of this code. The proceeds from the tax imposed
by this article shall be deposited in the general revenue fund of
the state.
CHAPTER 18. EDUCATION.
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
§18-9D-2. Definitions.
The following terms, wherever used or referred to in this
article, have the following meanings, unless a different meaning
clearly appears from the context:
(1) "Authority" means the school building authority of West
Virginia or, if said authority shall be abolished, any board or
officer succeeding to the principal functions thereof, or to whom
the powers given to said authority shall be given by law;
(2) "Bonds" means bonds issued by the authority pursuant to
this article;
(3) "Project" or "capital improvement project" means the new
construction, major renovation, repair and safety upgrading of
facilities, buildings and structures for school purposes
including the acquisition of land for current or future use in
connection therewith, equipment, machinery, furnishings,
installation of utilities and other similar items convenient in
connection with placing the foregoing into operation, but may not
include such items as books, fuel, supplies and other items whichare customarily deemed to result in a current operating charge;
(4) "Cost of project" means the cost of construction,
renovation, repair and safety upgrading of facilities, buildings
and structures for school purposes; the cost of land, equipment,
machinery, furnishings, installation of utilities and other
similar items convenient in connection with placing the foregoing
into operation; and the cost of financing, interest during
construction, professional service fees and all other charges or
expenses necessary, appurtenant or incidental to the foregoing,
including the cost of administration of this article;
(5) "Revenue" or "revenues" means moneys deposited in the
school building capital improvements fund pursuant to the
operation of section ten, article nine-a of this chapter; moneys
deposited in the school building debt service fund pursuant to
the operation of section
thirty eighteen, article
fifteen twenty-
two, chapter
eleven twenty-nine of this code; any moneys
received, directly or indirectly, from any source for the use of
all or any part of any project completed pursuant to this
article; and any other moneys received by the authority for the
purposes of this article;
(6) "Facilities plan" means the regional plan for school
facilities required prior to the distribution of state funds to
any county board pursuant to section fifteen of this article; and
(7) "Region" means the area encompassed within and serviced
by a regional educational service agency established pursuant to
section twenty-six, article two of this chapter.
§18-9D-6. School building capital improvements fund in state
treasury; school building debt service fund in the state
treasury; collections to be paid into special funds;
authority to pledge such collections as security for revenue
bonds; authority to finance projects on a cash basis.
(a) There is continued in the state treasury a school
building capital improvements fund to be expended by the
authority as provided in this article.
The school building authority shall have authority to pledge
all or such part of the revenues paid into the school building
capital improvements fund as may be needed to meet the
requirements of any revenue bond issue or issues authorized by
this article prior to the first day of January, one thousand nine
hundred ninety-four, or revenue bonds issued to refund revenue
bonds issued prior to that date, including the payment of
principal of, interest and redemption premium, if any, on such
revenue bonds and the establishing and maintaining of a reserve
fund or funds for the payment of the principal of, interest and
redemption premium, if any, on such revenue bond issue or issues
when other moneys pledged may be insufficient therefor, including
such additional protective pledge of revenues as the authority in
its discretion has provided by resolution authorizing the issue
of such bonds or in any trust agreement made in connection
therewith. The authority may further provide in such resolution
and in such trust agreement for such priorities on the revenues
paid into such school building capital improvements fund as maybe necessary for the protection of the prior rights of the
holders of bonds issued at different times under the provisions
of this article.
Any balance remaining in the school building capital
improvements fund after the authority has issued bonds authorized
by this article, and after the requirements of all funds
including reserve funds established in connection with the bonds
issued pursuant to this article have been satisfied, may be used
for the redemption of any of the outstanding bonds issued
hereunder which by their terms are then redeemable, or for the
purchase of such bonds at the market price, but not exceeding the
price, if any, at which such bonds shall in the same year be
redeemable, and all bonds redeemed or purchased shall forthwith
be canceled and shall not again be issued.
The school building authority, in its discretion, may use
the moneys in the school building capital improvements fund to
finance the cost of projects on a cash basis. Any pledge of
moneys in such fund for revenue bonds shall be a prior and
superior charge on such fund over the use of any of the moneys in
such fund to pay for the cost of any project on a cash basis:
Provided, That any expenditures from such fund, other than for
the retirement of revenue bonds, may only be made by the
authority in accordance with the provisions of this article.
(b) There is hereby created in the state treasury a special
fund named the school building debt service fund into which shall
be deposited on and after the first day of
November April, onethousand nine hundred
ninety-three ninety-four, the amounts
specified in section
thirty eighteen, article
fifteen twenty-two,
chapter
eleven twenty-nine of this code. All amounts deposited
in the fund shall be pledged to the repayment of the principal,
interest and redemption premium, if any, on any revenue bonds or
refunding revenue bonds authorized by this article:
Provided,
That moneys so deposited shall not be pledged to the repayment of
any revenue bonds issued prior to the first day of January, one
thousand nine hundred ninety-four, or with respect to revenue
bonds issued for the purpose of refunding revenue bonds issued
prior to the first day of January, one thousand nine hundred
ninety-four. The authority may further provide in the resolution
and in the trust agreement for priorities on the revenues paid
into the school building debt service fund as may be necessary
for the protection of the prior rights of the holders of bonds
issued at different times under the provisions of this article.
On or prior to the first day of
January May of each year,
commencing the first day of
January May, one thousand nine
hundred ninety-four, the authority shall certify to the state
tax
commissioner lottery director the principal and interest
requirements for the following fiscal year on any revenue bonds
issued on or after the first day of January, one thousand nine
hundred ninety-four, and for which moneys deposited in the school
building debt service fund have been pledged, or will be pledged,
for repayment pursuant to this section:
Provided, however, That
before the first day of
November May, one thousand nine hundred
ninety-three ninety-four, the authority shall also certify to the
tax commissioner lottery director of the state the principal and
interest requirements for the fiscal year ending on the thirtieth
day of June, one thousand nine hundred ninety-four, on any
revenue bonds issued, or to be issued, on or after the first day
of January, one thousand nine hundred ninety-four.
After the authority has issued bonds authorized by this
article, and after the requirements of all funds have been
satisfied, including reserve funds established in connection with
the bonds issued pursuant to this article, any balance remaining
in the school building debt service fund may be used for the
redemption of any of the outstanding bonds issued hereunder
which, by their terms, are then redeemable or for the purchase of
the outstanding bonds at the market price, but not to exceed the
price, if any, at which redeemable, and all bonds redeemed or
purchased shall be forthwith canceled and shall not again be
issued.
(c) The Legislature hereby finds and declares that the
supreme court of appeals of West Virginia has held that the
revenue bonds authorized under the school building authority act,
as enacted in this article prior to the twentieth day of July,
one thousand nine hundred ninety-three, constituted an
indebtedness of the state in violation of section four, article
ten of the constitution of West Virginia. The Legislature
further finds and declares that the financial capacity of a
county to construct facilities depends on the county's bondingcapacity (local property wealth) and on voter willingness to pass
bond issues instead of criteria related to educational needs, or
upon the ability of the school building authority created in this
article to issue bonds that comply with said holding of the West
Virginia supreme court of appeals.
The Legislature hereby
further finds and declares that this section, as well as section
thirty, article fifteen, chapter eleven of this code, have been
reenacted during the second extraordinary session of the West
Virginia Legislature in the year one thousand nine hundred
ninety-three, in an attempt to comply with said holding of the
supreme court of appeals of West Virginia. The Legislature
hereby further finds and declares that the continued construction
and improvement of school building facilities and the dedication
of
the consumers sales tax lottery proceeds pursuant to
said
section
eighteen, article twenty-two, chapter twenty-nine of this
code to finance such construction and improvement are for the use
and benefit of the state, its counties, its municipalities and
its other political subdivisions, and such construction and
improvement serves the vital public purpose of providing for a
thorough and efficient system of free schools in this state. The
Legislature hereby further finds and declares that it intends,
through the reenactment of this section and section
thirty
eighteen, article
fifteen twenty-two, chapter
eleven twenty-nine
of this code, to dedicate a source of state revenue to a special
fund for the purpose of paying the debt service on bonds and
refunding bonds issued subsequent to the first day of January,one thousand nine hundred ninety-four, the proceeds of which will
be utilized for the construction and improvement of school
building facilities.
The Legislature further finds and declares
that the vast majority of free schools in West Virginia are owned
by the counties, and that the reenactment of this section and
section thirty, article fifteen, chapter eleven of this code
meets the requirements of section six-a, article ten of the
constitution of West Virginia. The Legislature hereby further
finds and declares that it intends, through the reenactment of
this section and section
thirty eighteen, article
fifteen twenty-
two, chapter
eleven twenty-nine of this code, to comply with the
provisions of section four, article ten, section six, article
ten,
section six-a, article ten and section one, article twelve
of the constitution of West Virginia.
§18-9D-15. Legislative intent; distribution of money.
(a) It is the intent of the Legislature to empower the
school building authority to facilitate and provide state funds
for the construction and maintenance 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
facilities 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 no more than three percent of the sumof moneys that are determined by the authority to be available
for distribution during the then current fiscal year from: (1)
The increase in local share 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 such
increase in local share is pledged as security; and (3) any other
moneys received by the authority may be allocated and may be
expended by the authority for projects 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.
Fifty percent of the remaining available funds shall be
allocated and distributed to each county board on the basis of
its net enrollment as defined in section two, article nine-a of
this chapter: Provided, That such moneys shall not be
distributed to any county board whose region does not have an
approved region-wide facilities plan or to any county board that
is not prepared to commence expenditures of such funds during the
fiscal year in which the moneys are distributed: Provided,
however, That any moneys allocated to a county board and not
distributed to that county board shall be deposited in an account
to the credit of that county board, such principal amount to
remain to the credit of and available to the county board for a
period of three years. Any moneys which are unexpended after a
three-year period shall be redistributed on the basis of net
enrollment to those county boards then eligible for the receiptof net enrollment distributions in that fiscal year.
The remaining
fifty ninety-seven percent of moneys available
for distribution shall be allocated and expended on the basis of
need and efficient use of resources, such basis to be determined
by the authority in accordance with the provisions of section
sixteen of this article.
No local matching funds shall be required under the
provisions of this subsection, and any county board may use the
state moneys provided herein in conjunction with local funds
derived from bonding or other source. Any county board may
dedicate any allocations of state moneys pursuant to this
subsection to the payment of local bonds used for purposes
encompassed in an approved facilities plan or for the payment of
bonds that are issued by the authority for the benefit of that
county that are in addition to the bond moneys distributed in
accordance with this subsection.
Moneys made available pursuant to this subsection that shall
be expended on projects that benefit more than one district shall
be apportioned among the districts in accordance with the formula
encompassed in that portion of the facilities plan that addresses
the project designed to benefit more than one district.
(c) To encourage regional educational service agencies and
county boards to proceed promptly with facilities planning and to
prepare for the expenditure of any state moneys derived from the
sources described in subsection (b) of this section, any county
board failing to expend money within three years of theallocation thereto shall forfeit such allocation and thereafter
shall be ineligible for further
net enrollment or other
allocations pursuant to subsection (b) until the county board is
ready to expend funds in accordance with an approved facilities
plan. Any amount so forfeited shall be added to the total funds
available for allocation and distribution in the next ensuing
fiscal year.
(d) Distribution to the county boards may be in a lump sum
or in accordance with a schedule of payments adopted by the
authority pursuant to such guidelines as it shall adopt.
§29-22-18. State lottery fund; appropriations and deposits; not
part of general revenue; no transfer of state funds after
initial appropriation; use and repayment of initial
appropriation; allocation of fund for prizes, net profit and
expenses; surplus; state lottery education fund; state
lottery senior citizens fund; allocation and appropriation
of net profits.
(a) There is hereby created a special fund in the state
treasury which shall be designated and known as the "state
lottery fund." The fund shall consist of all appropriations to
the fund and all interest earned from investment of the fund, and
any gifts, grants or contributions received by the fund. All
revenues received from the sale of lottery tickets, materials and
games shall be deposited with the state treasurer and placed into
the "state lottery fund." The revenue shall be disbursed in the
manner herein provided for the purposes stated herein and shallnot be treated by the auditor and treasurer as part of the
general revenue of the state.
(b) No appropriation, loan or other transfer of state funds
shall be made to the commission or lottery fund after the initial
appropriation.
(c) A minimum annual average of forty-five percent of the
gross amount received from each lottery shall be allocated and
disbursed as prizes.
(d) Not more than fifteen percent of the gross amount
received from each lottery shall be allocated to and may be
disbursed as necessary for fund operation and administration
expenses.
(e) The excess of the aggregate of the gross amount received
from all lotteries over the sum of the amounts allocated by
subsections (c) and (d) shall be allocated as net profit. The
director is authorized to expend the necessary percentage of the
amount allocated as net profit, not to exceed six percent of the
gross amount received, for the purposes of entering into
contractual arrangements for the acquisition, financing, lease
and lease-purchase, and other financing transactions, of lottery
goods and services, including tickets, equipment, machinery,
electronic computer systems and terminals, and supplies and
maintenance therefor, for the first thirty-six months of
operation, and may apportion the costs, expenses and expenditures
related thereto among the commission, vendor or vendors and
licensed lottery sales agents. In the event that the percentageallotted for operations and administration generates a surplus,
the surplus will be allowed to accumulate to an amount not to
exceed two hundred fifty thousand dollars. On a monthly basis
the director shall report to the joint committee on government
and finance of the Legislature any surplus in excess of two
hundred fifty thousand dollars and remit to the state treasurer,
by electronic funds transfer or by other means, the entire amount
of those surplus funds in excess of two hundred fifty thousand
dollars which shall be allocated as net profit.
(f) Annually,
the Legislature shall appropriate all of the
amounts allocated as net profits above
shall be disbursed,
allocated, or appropriated as set forth in subsections (g) and
(h) in such proportions as it deems beneficial to the citizens of
this state, to (1) the lottery education fund created in
subsection (g) of this section, (2) the lottery senior citizens
fund created in subsection (h) of this section, and (3) the
commerce division created in article one, chapter five-b of this
code, in accordance with subsection (i) of this section.
(g)
Beginning on or before the twenty-eighth day of July,
one thousand nine hundred ninety-four, and continuing on or
before the twenty-eighth day of each succeeding month thereafter,
there shall be allocated monthly by the lottery director from the
net profits of the lottery for the preceding month, prior to the
allocation of said net profits for any other purpose whatsoever,
an amount equal to one tenth of the projected annual principal,
interest and coverage ratio requirements on any and all revenuebonds and refunding bonds issued, or to be issued, on or after
the first day of January, one thousand nine hundred ninety-four,
for which bond moneys in the school building debt service fund
have been pledged, or will be pledged, for repayment pursuant to
section six, article nine-d, chapter eighteen of this code, such
principal, interest and coverage ratio requirements having been
certified to the lottery director in accordance with the
provisions of said section:
Provided,
That in no event shall the
total allocation of said net profits to be paid into the school
building debt service fund, as provided in this section, in any
fiscal year exceed the lesser of the principal, interest and
coverage ratio requirements certified to the lottery director as
aforesaid, or twenty million dollars:
Provided, however,
That
any amount, not to exceed ten million dollars in any fiscal year,
certified to the lottery director pursuant to section six,
article nine-d, chapter eighteen of this code, which amount
constitutes any coverage ratio requirement certified in
accordance with said section, may be reallocated by the lottery
director upon receipt by the lottery director of a certification
from the executive director of the school building authority that
said amount for any coverage ratio requirement may be released
because the principal and interest requirements certified for
that fiscal year pursuant to said section have been fully
satisfied. The amounts allocated by this subsection shall be
deposited on a monthly basis into the school building debt
service fund created pursuant to section six, article nine-d,chapter eighteen of this code. There is hereby created a special
fund in the state treasury which shall be designated and known as
the "lottery education fund." The fund shall consist of the
amounts allocated pursuant to subsection (f) of this section,
which amounts shall be deposited into the lottery education fund
by the state treasurer. The lottery education fund shall also
consist of all interest earned from investment of the lottery
education fund, and any other appropriations, gifts, grants,
contributions or moneys received by the lottery education fund
from any source. The revenues received or earned by the lottery
education fund shall be disbursed in the manner provided below
and shall not be treated by the auditor and treasurer as part of
the general revenue of the state. Annually, the Legislature
shall appropriate the revenues received or earned by the lottery
education fund to the state system of public and higher education
for such educational programs as it considers beneficial to the
citizens of this state.
(h) There is hereby created a special fund in the state
treasury which shall be designated and known as the "lottery
senior citizens fund." The fund shall consist of the amounts
allocated from said net profits by annual appropriation of the
Legislature, pursuant to subsection (f) of this section which
amounts shall be deposited into the lottery senior citizens fund
by the state treasurer. The lottery senior citizens fund shall
also consist of all interest earned from investment of the
lottery senior citizens fund, and any other appropriations,gifts, grants, contributions or moneys received by the lottery
senior citizens fund from any source. The revenues received or
earned by the lottery senior citizens fund shall be disbursed in
the manner provided below and shall not be treated by the auditor
or treasurer as part of the general revenue of the state.
Annually, the Legislature shall appropriate the revenues received
or earned by the lottery senior citizens fund to such senior
citizens medical care and other programs as it considers
beneficial to the citizens of this state.
(i) The commerce division may use the amounts allocated to
it pursuant to subsection (f) of this section for one or more of
the following purposes: (1) The payment of any or all of the
costs incurred in the development, construction, reconstruction,
maintenance or repair of any project or recreational facility, as
such terms are defined in section thirteen-a, article one,
chapter five-b of this code, pursuant to the authority granted to
it under article one, chapter five-b of this code, (2) the
payment, funding or refunding of the principal of, interest on,
or redemption premiums on any bonds, security interests or notes
issued by the parks and recreation section of the commerce
division under article one, chapter five-b of this code, or (3)
the payment of any advertising and marketing expenses for the
promotion and development of tourism or any tourist facility or
attraction in this state.
NOTE: The purpose of this bill is to dedicate lotteryproceeds to the payment of the costs of bonds issued by the
School Building Authority.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.