Source: http://www.wvlegislature.gov/WVCODE/code.cfm?chap=18B&art=19
Timestamp: 2019-04-22 10:56:35+00:00

Document:
§18B-19-1. Legislative findings and intent.
§18B-19-3. System capital development planning.
§18B-19-9. Higher education facilities information system.
§18B-19-10. Authorization to sell and transfer property; use of proceeds.
§18B-19-13. Real property contracts and agreements.
§18B-19-14. Authorization for sale lease-back.
§18B-19-15. Construction and operation of auxiliary facilities; fees for auxiliary enterprises.
§18B-19-19. Applicability to certain institutions.
(1) State institutions of higher education vary widely in the conditions of their facilities infrastructure.
(2) State institutions of higher education vary widely in their ability to incur debt for capital improvements. It is nearly impossible for community and technical colleges and some smaller baccalaureate institutions to fund significant capital improvements in the absence of state funding.
(3) A student enrolled at a community and technical college that previously was administratively linked to another state institution of higher education pays substantially higher tuition and mandatory fees than a student enrolled at a freestanding community and technical college. This cost discrepancy is due in large part to the significantly higher capital fees charged to these students to pay debt service for capital improvements.
(4) The substantial amount of capital fees that students must pay at the institution level contributes significantly to the poor grade the state receives in the category of “Affordability” in Measuring Up: The National Report Card on Higher Education.
(5) It is beneficial for the state to provide additional ongoing capital funding to reduce the obligation of students and parents to bear the cost of higher education capital improvements and facilities maintenance.
(6) West Virginia is one of only a few states that does not address higher education capital improvements and facilities maintenance needs through a statewide plan.
(7) State funding for capital improvements should align with state and system higher education goals, objectives and priorities as set forth in article one-d of this chapter.
(8) State capital funding should focus primarily on educational and general capital improvements, not auxiliary capital improvements.
(9) Renovations of existing buildings sometimes deserve greater consideration for state funding than new construction. However, new construction may deserve greater consideration than renovation when a state or system goal, objective or priority is implicated, as well as when renovation would be financially inefficient.
(10) As the Legislature increases funding for new educational and general capital improvements and major renovations, and supplants existing educational and general debt, institutions should target funds for maintenance and deferred maintenance needs.
(11) If community and technical colleges are to keep the cost of education affordable, they cannot be expected to fund maintenance obligations entirely from student capital fees.
(12) The commission and council should scrutinize carefully all requests from institutions to incur additional debt in order to determine their effect on institution debt capacity and the impact that incurring additional debt will have on students.
(13) State institutions of higher education ultimately should target adequate state capital contributions and capital fees to address maintenance and deferred maintenance needs.
(14) Until institutions are able to generate sufficient revenue to address maintenance and deferred maintenance needs, the Legislature should provide periodic funding to assist institutions in addressing these needs. Funding priority should be given to projects that address building code requirements and critical maintenance needs.
(15) In supporting future high priority capital needs, the Legislature, commission and council should not reward institutions with state funding if they neglect to address facilities maintenance needs or do not prudently manage their capital resources.
(16) Once an institution’s capital development plan has been approved by the governing board and confirmed by the commission or approved by the council, as appropriate, project priorities should not change significantly from year to year.
(17) Commission and council staff should participate in managing capital projects at smaller institutions if the smaller institution lacks the expertise necessary to plan, design and complete projects at or under budget.
(5) Once a system capital plan is in place, institutions shall set aside adequate funding annually to ensure that ongoing facilities maintenance needs are met.
As used in this article, the following terms have the meanings ascribed to them.
(a) "ADA" means the Americans with Disabilities Act of 1990, 42 U.S.C. §12101, et seq.
(b) "Auxiliary enterprise" means an entity that exists to furnish goods or services to students, faculty, staff or others; charges a fee directly related to, although not necessarily equal to, the cost of the goods or services; and is managed as essentially self-supporting.
(c) "Auxiliary facility" means a building or structure that is used for an auxiliary enterprise including, but not limited to, residence halls, food services, parking, intercollegiate athletics, faculty and staff housing, student unions, bookstores and other service centers.
(7) Fees assessed to students to support auxiliary enterprises.
(e) "Capital planning" means a purposeful activity that focuses attention on long term physical plant objectives which should be accomplished in a logical sequence over time as opportunities arise and resources become available.
(f) "Capital project management" means planning, designing, bidding and providing construction administration and oversight of architectural, engineering and construction contracts and projects.
(g) "Deferred maintenance" means repair, maintenance and renewal of capital facilities which should be part of normal maintenance management, but which have been postponed to a future budget cycle or until funds become available.
(h) "Educational and general capital fees" means the fees collected from students to pay debt service for capital improvement bonds issued by the commission and governing boards for educational and general facilities, for the maintenance of those facilities and to fund capital improvements in those facilities on a cash basis.
(i) "Educational and general facility" means a building or structure used for instruction and instructional support purposes, and includes classroom, laboratory, library, computer laboratory, faculty and administrative office and other academic support spaces.
(j) "Extraordinary circumstance" or "extraordinary circumstances" means, a situation involving life-safety issues, issues that would result in extensive damage to a facility if not addressed immediately, any unforeseen opportunity to use external funds and any other situation the commission or council determines should warrant special consideration.
(k) "Life-safety" means a condition existing on a campus that, if not corrected immediately, would jeopardize the safety and property of students, faculty, staff and the visiting public.
(l) "Maintenance" means the work necessary within a budget cycle to realize the originally anticipated life of a fixed asset, including buildings, fixed equipment and infrastructure.
(m) "Governing board", "state institution of higher education" and "institution under the jurisdiction of the commission" means all state institutions of higher education including Marshall University and West Virginia University and their respective governing boards.
(6) A process for governing boards to follow to ensure that sufficient revenue is generated for and applied toward facilities maintenance.
(b) The system capital development plan shall be developed in consultation with governing boards and appropriate institution staff. Before approving the capital development plan, the commission and council shall afford interested parties an opportunity to comment on the plan through a notice-and-comment period of at least thirty days.
(c) The commission and council shall update its system capital development plan at least once in each ten-year period.
(3) The current campus development plan objectives.
(14) Any other requirement established by the commission and council in the rules required by section seventeen of this article.
(c) Campus development plans shall incorporate all current and proposed facilities, including educational and general and auxiliary facilities.
(d) Not later than the next regularly scheduled meeting of the commission or council, as applicable, following the fifth anniversary date after the commission confirms or council approves, as appropriate, the development plan of a governing board the governing board shall report on the progress made in the first five years to implement the campus development plan for each campus under its jurisdiction. In addition, the governing board shall report on its plans to implement the remaining five-year period of its campus development plan.
(e) Each governing board shall update its campus development plan at least once during each ten-year period and any update is subject to the confirmation of the commission or approved by the council, as appropriate.
(f) Except for the governing boards of the exempted schools, a governing board may not implement a campus development plan or plan update that has not been confirmed by the commission or approved by the council, as appropriate.
(a) The commission and council each shall submit a prioritized capital appropriation request annually to the state budget office as required by article two, chapter eleven-b of this code consisting of major capital projects and maintenance projects.
(b) The commission and council each shall develop a process for governing boards to follow in submitting a list of major educational and general capital projects so that a prioritized major capital project list, prepared by the commission or council, as appropriate, may be submitted to the state budget office by the applicable deadline.
(C) Any additional information required to be provided by the commission, council or state budget office.
(2) The commission and council each shall rank the major capital projects submitted by the governing boards according to priority consistent with the criteria outlined in the system capital development plan. The council and commission may not submit to the state budget office a request for an institution which the commission or council determines reasonably could not secure funding through the appropriation process during the following fiscal year.
(c) The commission and council each shall develop a process for governing boards to follow in submitting a list of major maintenance projects so that a prioritized maintenance project list, prepared by the commission or council, as appropriate, may be submitted to the state budget office by the applicable deadline.
(1) Annually, the commission and council, as appropriate, shall provide each governing board a recommended building renewal calculation that identifies the funds that should be collected and invested in its buildings and facilities during the next fiscal year to maintain them and minimize deferred maintenance.
(2) As soon as it receives the building renewal calculation, each governing board shall make realistic revenue estimates of the funds available for maintenance projects from educational and general capital fees, from auxiliary and auxiliary capital fees and from any other revenue that may be used for maintenance projects, as well as any anticipated reserves. The governing boards then shall identify and submit proposed major maintenance projects, consistent with its campus development plan or plans, to be funded from these revenues.
(3) The commission and council each shall report to the Legislative Oversight Commission on Education Accountability on the revenue available to governing boards for educational and general and auxiliary maintenance projects, as well as any shortfalls based on building renewal formula calculation, and major maintenance projects that institutions propose to undertake during the upcoming fiscal year.
(4) The commission shall work with institutions under its jurisdiction to ensure that adequate funds are generated to fund maintenance and build adequate reserves from educational and general and auxiliary capital fees and other revenue consistent with the building renewal formula. The Legislature recognizes that it may take several years for this to be accomplished fully.
(5) The council shall work with the Legislature and institutions under its jurisdiction to ensure that a combination of appropriated and nonappropriated revenue is available to fund maintenance and build adequate reserves at community and technical colleges consistent with the building renewal formula.
(a) The commission and governing boards, jointly or singly, may issue revenue bonds for capital project financing in accordance with section eight, article ten of this chapter.
(b) A governing board may seek funding for and initiate construction or renovation work for major projects only if contained in a campus development plan approved by the council or confirmed by the Commission: Provided, That this subsection (b) shall not apply to the governing boards of the exempted schools.
(c) A governing board may fund capital improvements on a cash basis, through bonding or through notes or another financing method that is approved by the commission and by the council, if appropriate. Provided, That the exempted schools shall not be required to get the approval of the commission.
(1) If the cost of an improvement project for any institution under the jurisdiction of the council, exceeds $1 million, the governing board first shall obtain the approval of the council, as appropriate. If the cost of an improvement project at an institution under the jurisdiction of the commission, other than the exempted schools, exceeds $3 million, the governing board shall first obtain the approval of the commission.
(E) Any other factor considered appropriate.
(d) A governing board shall notify the Joint Committee on Government and Finance at least thirty days before beginning construction or renovation work on any capital project in excess of $1 million.
(e) The commission may pledge all or part of the fees of any or all state institutions of higher education as part of a system bond issue.
(f) Any fee or revenue source pledged prior to the effective date of this section for payment of any outstanding debt remains in effect until the debt is fully repaid or refunded.
(a) The commission, council and governing boards, as responsibility is otherwise assigned herein, shall ensure that capital funds are spent appropriately and that capital projects are managed effectively. Project management shall be conducted in all respects according to sound business practices and applicable laws, and rules.
(b) The commission shall employ a sufficient number of competent facilities staff experienced in capital project development and management that is suitable for the number, size and complexity of the capital projects being managed. By December 31, 2011, and continuing thereafter, at least one employee shall be Leadership in Energy and Environmental Design (LEED) certified.
(2) Employs at least one Certified Facilities Manager (CFM) as credentialed by the International Facility Management Association or employs at least one Project Management Professional (PMP) as certified by the Project Management Institute.
(v) Providing a method for project closeout and final acceptance of the project by the governing board.
(3) The institutional capital project management rule shall be filed with the commission no later than one hundred eighty days following the effective date of the rule required of the commission and council in section seventeen of this article.
(4) The commission may review or audit projects greater than $5 million periodically to ascertain that appropriate capital project management practices are being employed.
(B) Promulgates and adopts a capital project management rule in accordance with section six, article one of this chapter that is approved by the commission. The capital project management rule may be amended at the discretion of the governing board, but amendments shall be submitted to the commission for review and approval before becoming effective.
(3) If an institution does not meet the provisions of this subsection, the commission shall manage all capital projects exceeding $1 million.
(4) The commission staff shall review and audit periodically all projects greater than $1 million to ascertain that appropriate project management practices are being employed. If serious deficiencies are identified and not addressed sufficiently within ninety days, commission staff may assume management of all projects.
(f) For institutions that have entered into construction contracts averaging less than $20 million over the most recent rolling five-year period and for all community and technical colleges, the commission and council shall manage capital projects exceeding $1 million. In the rule required by section seventeen of this article, the commission and council, as appropriate, shall adopt procedures to afford participation by the governing boards and staff in the planning, development and execution of capital projects.
(a) Each governing board shall ensure that facilities under its jurisdiction are maintained and that a listing of any major deferred maintenance projects is provided annually to the commission or council, as appropriate.
(b) Each governing board shall strive to invest annually an amount for maintenance that is consistent with the building renewal formula developed and approved by the commission and council and to generate a reserve sufficient to address unexpected maintenance needs.
(2) Periodic evaluations of the conditions of facilities at the institution and its performance and effectiveness in maintaining its facilities.
(3) Other purposes as determined by the commission and council consistent with facilitating policy analysis without burdening or interfering unnecessarily with the governance responsibilities which are placed upon the governing boards.
(5) Provide information on facilities needed to calculate the building renewal formula.
(c) The commission and council shall establish benchmarks for classroom and class laboratory use including an analysis of utilization for the fall and spring semesters of each academic year. The efficient use of classrooms and class laboratories is a factor in determining whether an institution needs additional classroom and laboratory facilities.
(d) Each governing board and any institution under its jurisdiction shall participate and cooperate with the commission and council in all respects in the development and maintenance of the higher education facilities information system.
(e) The higher education facilities information system may be used for other purposes set forth by the commission and council in the rules required by section seventeen of this article, consistent with the provisions of the foregoing subsection (a).
(a) Notwithstanding any other provision of law or this code to the contrary, the commission, council and governing boards each may sell, lease, convey or otherwise dispose of all or part of any real property that it owns, either by contract or at public auction, and shall retain the proceeds of the transaction.
(5) In the case of the commission, notifying the Joint Committee on Government and Finance.
(b) The commission, council or a governing board may not lease real property for an annual amount of greater than $50,000 without satisfying the obligations of subdivisions (2) to (4) of subsection (a) of this section.
(c) The commission, council or a governing board shall deposit the net proceeds from the sale, conveyance or other disposal of real property into a special revenue account in the State Treasury to the credit of the commission, council, or governing board that sold, conveyed or otherwise disposed of the real property.
(a) The commission or council may enter into lease-purchase agreements for capital improvements, including equipment, on behalf of, or for the benefit of, a state institution of higher education, the commission or council.
(b) After the commission or council, as appropriate, has granted approval for a lease-purchase agreement by a governing board, the board may enter into a lease-purchase agreement for capital improvements, including equipment.
(c) The governing boards of the exempted schools may enter into lease-purchase agreements without seeking the approval of the commission. The governing boards, subject to the jurisdiction of the commission, may enter into lease-purchase agreements of less than $1.5 million, without obtaining approval of the commission.
(d) A lease-purchase agreement constitutes a special obligation of the State of West Virginia. The obligation may be met from any funds legally available to the commission, council or the institution and shall be cancelable at the option of the commission, council, or governing board at the end of any fiscal year. The obligation, or any assignment or securitization of the obligation, never constitutes an indebtedness of the State of West Virginia or any department, agency or political subdivision of the state, within the meaning of any constitutional provision or statutory limitation, and may not be a charge against the general credit or taxing powers of the state or any political subdivision of the state. The facts shall be plainly stated in any lease-purchase agreement.
(e) A lease-purchase agreement shall prohibit assignment or securitization without consent of the lessee and the approval of the agreement as to form by the Attorney General. Proposals for any agreement shall be requested in accordance with the requirements of this section and rules of the commission and council. In addition, any lease-purchase agreement that exceeds $100,000 total shall be approved as to form by the Attorney General.
(f) The interest component of any lease-purchase obligation is exempt from all taxation of the State of West Virginia, except inheritance, estate and transfer taxes. It is the intent of the Legislature that if the requirements set forth in the Internal Revenue Code of 1986, as amended, and any regulations promulgated pursuant thereto are met, the interest component of any lease-purchase obligation also is exempt from the gross income of the recipient for purposes of federal income taxation and may be designated by the governing board or the president of the institution as a bank-qualified obligation.
(a) Notwithstanding any other provision of this code to the contrary, the commission, council and governing boards may lease, or offer to lease, as lessee, any grounds, buildings, office or other space in the name of the state.
(b) The commission, council and governing boards have sole authority to select and to acquire by contract or lease all grounds, buildings, office space or other space, the rental of which is required necessarily by the commission, council or institutions.
(c) Before executing any rental contract or lease, the commission, council or a governing board shall determine the fair market value for the rental of the requested grounds, buildings, office space or other space, in the condition in which they exist, and shall contract for or lease the premises at a price not to exceed the fair market value.
(d) The commission, council and each governing board may enter into long-term agreements for buildings land and space for periods longer than one fiscal year but not to exceed forty years.
(3) The lease is considered renewed for each ensuing fiscal year during the term of the lease unless it is canceled by the commission, council or governing board before the end of the then-current fiscal year.
(f) The commission, council or institution that is granted any grounds, buildings, office space or other space leased in accordance with this section may not order or make permanent changes of any type thereto, unless the commission, council or governing board, as appropriate, has first determined that the change is necessary for the proper, efficient and economically sound operation of the institution. For purposes of this section, a "permanent change" means any addition, alteration, improvement, remodeling, repair or other change involving the expenditure of state funds for the installation of any tangible thing that cannot be economically removed from the grounds, buildings, office space or other space when vacated by the institution.
(g) Leases and other instruments for grounds, buildings, office or other space, once approved by the commission, council or governing board, may be signed by the chief executive officer, or designee, of the commission, council or institution.
(h) Any lease or instrument exceeding $100,000 annually shall be approved as to form by the Attorney General. A lease or other instrument for grounds, buildings, office or other space that contains a term, including any options, of more than six months for its fulfillment shall be filed with the State Auditor.
(a) In addition to the requirements otherwise provided in this article, any purchase of real estate, any lease-purchase agreement and any construction of new buildings or other acquisition of buildings, office space or grounds resulting from these transactions, shall be approved by the commission or council, as appropriate, and provided to the Joint Committee on Government and Finance for prior review, if the transaction exceeds $1 million: Provided, That the exempted schools shall not be required to get the approval of the commission.
(b) Notwithstanding any provision of this code to the contrary, any acquisition, bequest, donation or construction of new buildings, office space or grounds exceeding $1 million in appraised value or requiring $1 million in repairs and renovation or lease payments over the lifetime of the lease, made or accepted by an institution’s research corporation established by article twelve of this chapter or an affiliated foundation of an institution under the jurisdiction of the council, shall be approved by the council.
(2) A report setting forth a detailed summary of the terms of the contract or agreement, including the name of the property owner and the agent involved in the sale.
(d) The copy and report required by subsection (b) of this section shall be provided at least thirty days before any sale, exchange, transfer, purchase, lease-purchase, lease or rental of real property, refundings of lease-purchases, leases or rental agreements, construction of new buildings, and any other acquisition or lease of buildings, office space or grounds.
(e) A contract or agreement that is for the lease purchase, lease or rental of real property, where the costs of real property acquisition and improvements are to be financed, in whole or in part, with bond proceeds, may contain a preliminary schedule of rents and leases for purposes of review by the committee.
(f) For renewals of contracts or agreements required by this section to be reported, the commission, council or governing board shall provide a report setting forth a detailed summary of the terms of the contract or agreement, including the name of the property owner.
(g) The Joint Committee on Government and Finance shall meet and review any contract, agreement or report within thirty days of receipt.
(h) Each governing board shall provide to the commission or council, as appropriate, a copy of any contract or agreement submitted to the Joint Committee on Government and Finance pursuant to this section.
(5) Retain independent financial and legal services to examine fully all aspects of the transaction.
(b) The sale may be made only to a special purpose entity that exists primarily for the purpose of supporting the institution at which the building is located.
(a) A governing board may provide, construct, erect, improve, equip, maintain and operate auxiliary facilities, as defined in section two of this article, for students, employees and visitors on land it owns or leases.
(b) The cost of construction, erection, improvement or equipment may be paid with the proceeds of revenue bonds authorized by this code or by any other financing method provided in this article.
(c) A governing board may engage experts in engineering, architecture and construction and other experts as it considers necessary and may specify the payment and contract terms which are included in the cost of the project.
(4) To build a reserve for major renovation or replacement.
(e) All moneys collected for the use of auxiliary facilities shall be paid to the credit of and expended by the governing board of that institution in accordance with section thirteen, article ten of this chapter.
(a) The commission, council and governing boards each may acquire land or buildings by condemnation for the use and benefit of any state institution under its jurisdiction. A condemnation proceeding conducted pursuant to this section is governed by chapter fifty-four of this code.
(b) The commission, council and governing boards each may condemn any interest, right or privilege, land or improvement, which in its opinion is necessary, in the manner provided by law for the acquisition by this state of property for public purposes. The state is under no obligation to accept and pay for any property condemned and may pay for the property only from the funds provided for that purpose.
(c) In any proceeding to condemn, the order shall be made by the court having jurisdiction of the suit, action or proceedings. A bond or other security may be required by the court securing the property owner against any loss or damage to be sustained by reason of the state's failure to accept and pay for the property. The bond or security may not impose liability or debt on or of the state as contemplated by the Constitution of the State in relation to state debt.
The commission and council jointly shall propose a rule or rules for legislative approval in accordance with article three-a, chapter twenty-nine-a of this code, to implement this article.
(a) By July 1, 2013, and annually thereafter, the commission and council shall provide a general status report to the Legislative Oversight Commission on Education Accountability on the progress being made in implementing the state-wide capital development plan and on the progress of the governing boards in implementing the objectives of institutions' campus development plans.
(b) The process required by the commission and council for reporting by the governing boards shall be included in the rules required by section seventeen of this article.
The governing boards of the exempted schools each may, without obtaining approval of the commission, take any action described or set forth in this article that otherwise would require the approval or confirmation of the commission. The respective governing board shall provide notice of the action to the commission. If the commission requests additional information relevant to the action from the respective governing board, the governing board shall provide information regarding the action to the commission.

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