Bill Summary – FastDemocracy

WEST VIRGINIA LEGISLATURE
SECOND EXTRAORDINARY SESSION
                   ENROLLED
              House Bill 227
       BY DELEGATES HANSHAW (MR. SPEAKER) AND
                      HORNBUCKLE
            (BY REQUEST OF THE EXECUTIVE)
    [Passed October 8, 2024; in effect from passage.]
     Enr HB 227
  AN ACT to amend and reenact §18-9D-15 of the Code of West Virginia, 1931, as amended,
         relating to a public charter school's application for funding.
     Be it enacted by the Legislature of West Virginia:
     ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
     §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 10 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) 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;
        (2) Moneys paid into the School Construction Fund pursuant to §18-9D-6 of this code; and
        (3) Any other moneys received by the authority, except moneys paid into the School Major
 Improvement Fund pursuant to §18-9D-6 of this code and moneys deposited into the School
 Access Safety Fund pursuant to §18-9F-5 of this code, may be allocated and may be expended
 by the authority for projects authorized in accordance with §18-9D-16 of this code that service the
 educational community statewide or, upon application by the state board, for educational
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 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 §18-2B-1 et seq. of this code, the authority may allocate and expend under this
 subsection moneys for school major improvement projects authorized in accordance with §18-
 9D-16 of this code 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 programs at comprehensive middle schools, vocational
 schools cooperating with community and technical college programs, or any combination of the
 three. 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) Any project funded by the authority shall be in accordance with a comprehensive
 educational facility plan which must be approved by the state board and the authority. 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 10-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) 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;
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        (2) Moneys paid into the School Construction Fund pursuant to §18-9D-6 of this code; and
        (3) 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
 §18-9F-5 of this code, 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) 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;
        (2) Moneys paid into the School Construction Fund pursuant to §18-9D-6 of this code; and
        (3) 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
 §18-9F-5 of this code, 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 §18-9D-16 of this code. 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.
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        (e) The remaining moneys determined by the authority to be available for distribution
 during the then current fiscal year from:
        (1) 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;
        (2) Moneys paid into the School Construction Fund pursuant to §18-9D-6 of this code; and
        (3) 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
 §18-9F-5 of this code, shall be allocated and expended on the basis of need and efficient use of
 resources for projects funded in accordance with §18-9D-16 of this code.
        (f) If a county board proposes to finance a project that is authorized in accordance with
 §18-9D-16 of this code 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 to the county board in connection with the project: Provided, That the authority
 may transfer moneys to the state 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,
 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:
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          (A) If 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 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.
         (g) 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
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 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) 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 §18-9D-6 of this code shall be allocated and distributed on the
 basis of need and efficient use of resources for projects authorized in accordance with §18-9D-
 16 of this code, 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) 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.
 Therefore, as a prerequisite for eligibility to receive an allocation of school major improvement
 funds from the authority, a county board shall provide annual school facility maintenance
 expenditure data to the authority which shall be jointly reviewed by the authority and the state
 Department of Education Office of School Facilities and Transportation to assist the authority in
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 its determination of the most meritorious projects to be funded through the School Major
 Improvement Fund. The state board shall promulgate rules relating to county boards' school
 facility maintenance budgets, including items which shall be included in these budgets.
        (j) 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.
        (2) A county board may apply to the authority for funding under this article as part of the
 county's bond finance plan for a proposed capital improvement bond levy to be submitted to the
 voters of that county. The county board shall first submit a request for the funding to the executive
 director of the authority prior to the county board’s proposed bond levy election. After initial
 consultation with the executive director, the county board shall prepare a written outline of the
 bond finance plan, the capital improvements to be made with levy funds, and the amount and
 timing of funding requested from the authority. The county board shall then present its request at
 a meeting of the members of the authority.
        Grants of financial assistance that have received initial approval under this section are
 contingent upon passage of the bond levy and final approval by the School Building Authority of
 the county’s bond finance plan. Any materials produced by the county or its county board that
 refer to the authority shall include a statement of this contingency and terms. Notwithstanding any
 other provision of this subsection, financial assistance to be provided by the authority may only
 be used to pay costs of capital improvements and may not be pledged as security for or repayment
 of any bonds issued by the county board.
        Upon passage of the bond levy, the county board shall have four years to finalize the
 project: Provided, That the authority may grant an extension to the four years in extenuating
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 circumstances. The provisions of this subsection do not apply to any proposed capital
 improvement bond levy that is scheduled to be submitted to the voters on or before December
 31, 2023.
        (k) 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 §18-9D-16 of this code.
        (l) It is the intent of the Legislature to encourage county boards to explore and