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Introduced Version Senate Bill 533 History

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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 533

(By Senators Tomblin (Mr. President) and Buckalew
By Request of the Executive)
____________

[Introduced February 12, 1998; referred to the Committee
on Finance.]
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A BILL to amend and reenact section thirty, article fifteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend and reenact section ten, article nine-a, chapter eighteen of said code; and to amend and reenact section eighteen, article twenty- two, chapter twenty-nine of said code, all relating to a funding plan for continuing public school construction; deleting out-dated language; continuing monthly state sales tax payments into the school major improvement fund by eliminating the termination date for such payments; continuing monthly state sales tax payments into the school construction fund by eliminating the termination date for such payments; providing for the payment of the annual difference between the allocation made in the one thousand nine hundred ninety-seven fiscal year and the amount of funds required for debt service on school improvement bonds under the better school building amendment for any succeeding current year to be deposited into the school construction fund; providing that, upon retirement of school construction bonds secured through allocations from the school building capital improvements fund, certain moneys allocated for that purpose are to be deposited into the school construction fund; and providing that upon the retirement of the school improvement bonds secured by profits from the lottery and deposited in the school debt service fund an annual amount of eighteen million dollars of such funds shall be deposited into the school construction fund.

Be it enacted by the Legislature of West Virginia:
That section thirty, article fifteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that section ten, article nine-a, 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; appropriation of certain revenues.

(a) The proceeds of the tax imposed by this article shall be deposited in the general revenue fund of the state beginning the first day of July, one thousand nine hundred ninety-four, except as otherwise expressly provided in this article. Prior to the said first day of July, the proceeds of this tax shall, except as otherwise expressly provided in this article, be deposited as provided in chapter three, acts of the Legislature, second extraordinary session, one thousand nine hundred ninety-three, and, for such purpose, such prior law is fully preserved. On the said first day of July, the balance in "WVFIMS" account number fund 6676, fiscal year one thousand nine hundred ninety-four, organization 0615, shall be transferred to the general revenue fund. On the said first day of July, the balance in "WVFIMS" account number fund 3962, fiscal year one thousand nine hundred ninety-four, organization 0402, shall be transferred to the school construction fund created pursuant to section six, article nine-d, chapter eighteen of this code.
(b) School major improvement fund. --
After the payment or commitment of the proceeds or collections of this tax for the purposes set forth in sections sixteen and eighteen of this article:
(1) On the first day of July, one thousand nine hundred ninety-four, there shall be dedicated from the collections of this tax, an amount appropriated by the Legislature to this fund in the general revenue budget for the fiscal year beginning on the first day of July, one thousand nine hundred ninety-four, and the amount dedicated shall be deposited into the school major improvement fund created pursuant to section six, article nine-d, chapter eighteen of this code, as soon as such amount has been accumulated from the collections of this tax.
(2) Beginning on the first day of July, one thousand nine hundred ninety-five, and continuing on the first day of each succeeding month thereafter, through the thirtieth day of June, two thousand five, there shall be dedicated monthly from the collections of this tax, the amount of four hundred sixteen thousand six hundred sixty-seven dollars and the amount dedicated shall be deposited on a monthly basis into the school major improvement fund created pursuant to section six, article nine-d, chapter eighteen of this code.
(C) School construction fund. --
After the payment or commitment of the proceeds or collections of this tax for the purposes set forth in sections sixteen and eighteen of this article:
(1) Beginning the first day of July, one thousand nine hundred ninety-five, and continuing on the first day of each succeeding month thereafter through the last day of June, one thousand nine hundred ninety-six, there shall be dedicated monthly from the collections of this tax, the amount of five hundred eighty-three thousand three hundred thirty-three dollars and the amount dedicated shall be deposited into the school construction fund created pursuant to section six, article nine-d, chapter eighteen of this code.
(2) Beginning the first day of July, one thousand nine hundred ninety-six, and continuing on the first day of each succeeding month thereafter, through the thirtieth day of June, two thousand five, there shall be dedicated monthly from the collections of this tax, the amount of one million four hundred sixteen thousand six hundred sixty-seven dollars and the amount dedicated shall be deposited into the school construction fund created pursuant to section six, article nine-d, chapter eighteen of this code.
(2) Effective the first day of July, one thousand nine hundred ninety-eight, there shall be dedicated from the collections of this tax, an amount equal to any annual difference that may occur between the debt service payment for the one thousand nine hundred ninety-seven fiscal year for school improvement bonds issued under the better school building amendment under the provisions of article nine-c, chapter eighteen of this code and the amount of funds required for debt service on these school improvement bonds in any current fiscal year thereafter. This annual difference shall be prorated monthly, added to the monthly deposit in subdivision (1) of this subsection and deposited into the school construction fund created pursuant to section six, article nine-d, chapter eighteen of this code.
CHAPTER 18. EDUCATION.

ARTICLE 9A. PUBLIC SCHOOL SUPPORT.

§18-9A-10. Foundation allowance to improve instructional programs.

(a) For the school year beginning on the first day of July, one thousand nine hundred ninety-four, and thereafter, the sum of the allocations shall be in an amount at least equal to the amount appropriated by the Legislature, in addition to funds which accrue from balances in the general school fund, or from appropriations for such purposes:
(1) One hundred fifty thousand dollars shall be allocated to each county;
(2) Distribution to the counties of the remainder of these funds shall be made proportional to the average of each county's average daily attendance for the preceding year and the county's second month net enrollment. Moneys allocated by provision of this section shall be used to improve instructional programs according to a plan for instructional improvement which the affected county board shall file with the state board by the first day of August of each year, to be approved by the state board by the first day of September of that year if such plan substantially complies with standards to be adopted by the state board: Provided, That notwithstanding any other provision of this code to the contrary, moneys allocated by provision of this section may also be used in the implementation and maintenance of the uniform integrated regional computer information system; and
(3) Up to twenty-five percent of this allocation may be used to employ professional educators and/or service personnel in counties after all applicable provisions of sections four and five of this article have been fully utilized: Provided, That for the school year beginning on the first day of July, one thousand nine hundred ninety-six, only, up to an additional twenty-five percent of this allocation may be used to employ classroom teachers, as defined in section one, article one, chapter eighteen-a of this code, and/or service personnel in counties after all applicable provisions of sections four and five of this article have been fully utilized: Provided, however, That service personnel employed with the additional twenty-five percent for the school year beginning on the first day of July, one thousand nine hundred ninety-six, only, may not include directors, coordinators or supervisors.
Prior to the use of any funds from this section for personnel costs, the county board must receive authorization from the state superintendent of schools. The state superintendent shall require the district board to demonstrate: (1) The need for the allocation; (2) efficiency and fiscal responsibility in staffing; and (3) sharing of services with adjoining counties and the regional educational service agency for that county in the use of the total local district board budget. District boards shall make application for available funds for the next fiscal year by the first day of May of each year. On or before the first day of June, the state superintendent shall review all applications and notify applying district boards of the distribution of the allocation: Provided, That for the school year beginning on the first day of July, one thousand nine hundred ninety-three, only, the state superintendent shall review all applications and notify applying district boards of the distribution of the allocation on or before the first day of July, one thousand nine hundred ninety-three. Such funds shall be distributed during the fiscal year as appropriate. The state superintendent shall require the county board to demonstrate the need for an allocation for personnel based upon the county's inability to meet the requirements of state law or state board policy: Provided, however, That the funds available for personnel under this section may not be used to increase the total number of professional noninstructional personnel in the central office beyond four. Such instructional improvement plan shall be made available for distribution to the public at the office of each affected county board.
(b) Commencing with the school year beginning on the first day of July, one thousand nine hundred ninety-three, an amount not less than the amount required to meet debt service requirements on any revenue bonds issued prior to the first day of January, one thousand nine hundred ninety-four, and the debt service requirements on any revenue bonds issued for the purpose of refunding revenue bonds issued prior to the first day of January, one thousand nine hundred ninety-four, shall be paid into the school building capital improvements fund created by section six, article nine-d of this chapter, and shall be used solely for the purposes of said article. The school building capital improvements fund shall not be utilized to meet the debt services requirement on any revenue bonds or revenue refunding bonds for which moneys contained within the school building debt service fund have been pledged for repayment pursuant to said section.
When the school improvement bonds secured by funds from the school building capital improvements fund mature, an amount equal to twenty-four million dollars shall be deposited annually by the state board of education from the funds allocated in this section of the code into the school construction fund created pursuant to the provisions of section six, article nine-d, chapter eighteen of this code to continue funding school facility construction and improvements.
CHAPTER 29. MISCELLANEOUS BOARDS AND OFFICERS.

ARTICLE 22. STATE LOTTERY ACT.

§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 continued a special revenue 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 provided in this section for the purposes stated in this section and shall not 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 may 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) of this section shall be allocated as net profit. In the event that the percentage allotted for operations and administration generates a surplus, the surplus shall 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 the entire amount of those surplus funds in excess of two hundred fifty thousand dollars which shall be allocated as net profit.
(f) After first satisfying the requirements for funds dedicated to the school building debt service fund in subsection (h) of this section to retire the ten-year bonds authorized to be issued pursuant to section eight, article nine-d, chapter eighteen of this code, and then satisfying the requirements for funds dedicated to the education, arts, sciences and tourism debt service fund in subsection (i) of this section to retire the bonds authorized to be issued pursuant to section eleven-a, article six, chapter five of this code, the Legislature shall annually appropriate all of the remaining amounts allocated as net profits in subsection (e) of this section, in such proportions as it considers beneficial to the citizens of this state, to: (1) The lottery education fund created in subsection (g) of this section; (2) the school construction fund created in section six, article nine-d, chapter eighteen of this code; (3) the lottery senior citizens fund created in subsection (j) of this section; and (4) the division of natural resources created in section four, article five, chapter twenty of this code and the West Virginia development office as created in section one, article two, chapter five-b of this code, in accordance with subsection (k) of this section. No transfer to any account other than the school building debt service account and the education, arts, sciences and tourism debt service fund may be made in any period of time in which a default exists in respect to debt service on bonds issued by the school building authority and the state building commission which are secured by lottery proceeds. No additional transfer shall be made to any account other than the school building debt service account and the education, arts, sciences and tourism debt service fund when net profits for the preceding twelve months are not at least equal to one hundred fifty percent of debt service on bonds issued by the school building authority and the state building commission which are secured by net profits.
(g) There is hereby continued a special revenue 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 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) On or before the twenty-eighth day of each month through the twentieth day of June, two thousand five, the lottery director shall allocate to the school building debt service fund created pursuant to the provisions of section six, article nine-d, chapter eighteen of this code, as a first priority from the net profits of the lottery for the preceding month, an amount equal to one tenth of the projected annual principal, interest and coverage ratio requirements on any and all revenue bonds and refunding bonds issued, or to be issued, on or after the first day of April, one thousand nine hundred ninety-four, as certified to the lottery director in accordance with the provisions of section six, article nine-d, chapter eighteen of this code. In no event shall the monthly amount allocated exceed one million eight hundred thousand dollars, nor shall the total allocation of the 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 and interest requirements certified to the lottery director or eighteen million dollars. In the event there are insufficient funds available in any month to transfer the amount required to be transferred pursuant to this subsection to the school debt service fund, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency. A lien on the proceeds of the state lottery fund up to a maximum amount equal to the projected annual principal, interest and coverage ratio requirements, not to exceed twenty-seven million dollars annually, may be granted by the school building authority in favor of the bonds it issues which are secured by the net lottery profits.
When the school improvement bonds, secured by profits from the lottery and deposited in the school debt service fund, mature, the lottery director shall allocate monthly, from the net profits of the lottery for the preceding month, an amount equal to one million five hundred thousand dollars into the school construction fund created pursuant to the provisions of section six, article nine-d, chapter eighteen of this code.
(i) Beginning on or before the twenty-eighth day of July, one thousand nine hundred ninety-six, and continuing on or before the twenty-eighth day of each succeeding month thereafter through the twenty-eighth day of June, two thousand twenty-one, the lottery director shall allocate to the education, arts, sciences and tourism debt service fund created pursuant to the provisions of section eleven-a, article six, chapter five of this code, as a second priority from the net profits of the lottery for the preceding month, an amount equal to one tenth of the projected annual principal, interest and coverage ratio requirements on any and all revenue bonds and refunding bonds issued, or to be issued, on or after the first day of April, one thousand nine hundred ninety-six, as certified to the lottery director in accordance with the provisions of that section. In no event shall the monthly amount allocated exceed one million dollars nor shall the total allocation paid into the education, arts, sciences and tourism debt service fund, as provided in this section, in any fiscal year exceed the lesser of the principal and interest requirements certified to the lottery director or ten million dollars. In the event there are insufficient funds available in any month to transfer the amount required pursuant to this subsection to the education, arts, sciences and tourism debt service fund, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency. A second-in-priority lien on the proceeds of the state lottery fund up to a maximum amount equal to the projected annual principal, interest and coverage ratio requirements, not to exceed fifteen million dollars annually, may be granted by the state building commission in favor of the bonds it issues which are secured by the net lottery profits.
(j) There is hereby continued a special revenue 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 pursuant to subsection (f) of this section, which 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.
(k) The division of natural resources and the West Virginia development office, as appropriated by the Legislature, 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 these terms are defined in section four, article five, chapter twenty of this code, pursuant to the authority granted to it under article five, chapter twenty 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 division of natural resources under article five, chapter twenty 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 provide a mechanism for continuing and increasing the pay-as-you-go funding for school building construction as debt service on all current school improvement bonds decreases and after said bonds have matured. This bill eliminates the June 30, 2005 termination date for allocation of state sales tax to the school major improvement fund and the school construction fund. The bill provides that the amount of sales tax dedicated to the school construction fund to retire debt on those bonds will remain constant. Effective with the 1998 fiscal year, any annual differences between the amount dedicated in the 1997 fiscal year and the debt service payments on these bonds are also transferred to the school construction fund to increase the amount available for the pay-as-you-go program and dedicating the full amount after retirement of the bonds. The bill also provides that when the school construction bonds secured through allocations made to the School Building Capitol Improvements Fund are retired in 2020, an additional $24 million will be transferred annually to the school construction fund to increase the amount available for the pay-as-you-go program. In addition, when bonds secured by Lottery net profits and dedicated to the School Building Debt Service Fund mature, $18 million of the lottery net profits, currently dedicated to debt service, are transferred annually to the school construction fund to increase the amount available for the pay-as-you-go program.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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