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Questions Raised Over Last-Minute Special Session

Delegate Isaac Sponaugle, D-Pendleton, grilled state revenue and transportation officials Monday over a last-minute request for spending authority to pay debt service in Roads to Prosperity bonds.

CHARLESTON — The West Virginia Legislature passed two bills Monday night for its second special session of 2019, but one bill that could affect tourism projects started by Gov. Jim Justice’s companies was postponed and state officials were chided for waiting until the last minute to bring the bills forward.

The state Senate and House of Delegates convened at noon Monday by order of Gov. Jim Justice to look at three bills making fixes to the state’s expungement law for driving under the influence (DUI) convictions, renewing a tourism tax credit program, and approving debt service for new bonds for Roads to Prosperity projects.

The Senate passed all three bills, while the House only passed two bills and adjourned until House Speaker Roger Hanshaw, R-Clay, calls delegates back to finish work on the bill dealing with the Tourism Development Act, likely during December interims.

Justice issued a proclamation Nov. 14 calling lawmakers back to Charleston to pass the three bills during regularly scheduled legislative interim meetings for Monday and today in order to not cost taxpayers additional money.

Senate Bill 2003 grants spending authority for debt service for the second and third round of bonds for Roads to Prosperity projects, which include new construction and major renovation projects. The Legislature approved a resolution in July approving $800 million for the second round of Roads to Prosperity bonds.

According to the Department of Revenue, $25 million is needed for debt service payments, which comes from increased DMV fees and other sources, but officials lacked the spending authority. The spending authority will allow the Department of Transportation to take the funding from the maintenance line item in the State Road Fund to the debt service on the bond.

Some members of the House raised concerns about the bill, specifically whether the bill would affect secondary road maintenance funding. The legislature allocated nearly $150 million for secondary road maintenance between March and June.

“I’m tired of watching us play a shell game around here with money that goes for roads,” said Del. Joe Canestraro, D-Marshall. “It speaks loudly of what we’re dealing with in this administration right now. It’s showing that they’re not really prepared and don’t have these things in place when we’re here passing these measures.”

Members of the House Finance Committee were told Monday afternoon that HB 213 needed to be passed by the end of the day Monday in order to tell the bond market that the state could pay the debt service in a due diligence phone call with investors scheduled today.

“Doing it now is the absolute, in my estimation, best time to do it.” said Leslie Dillon, deputy general counsel for the Department of Revenue. “They’re actually going to probably be ramifications if it doesn’t get done today.”

During the first round of Roads to Prosperity bonds, the state took $800 million to market in June of 2018, bringing in $913 million due to West Virginia’s excellent bond ratings. Two concurrent resolutions passed in July allowed the state to take to market $800 million on road bonds for round two. Del. Isaac Sponaugle, D-Pendleton, asked why this spending authority was requested within days of needing it.

“We had been in legislative session since the middle of March,” Sponaugle said. “Then (Justice) comes up and throws a bill up over the weekend and asks a legislative body – a co-equal branch of government – to waive the constitutional rules…so you could make a telephone call? That’s a little arrogant.”

Senate Bill 2001 would renew the Tourism Development Act, which sunsets on Dec. 31.

The act, first passed in 2004 and made permanent in 2014, gives tax breaks to companies focused on tourism projects. The bill would extend the act until 2026, but only the Senate passed it Monday.

The tax incentive covers as much as 25 percent of construction projects, and 35 percent of construction costs on former coal mine sites. The companies are required to invest at least $1 million of their own money for the project, stay open at least 100 days per year, bring in at least 20 percent of their visitors from out-of-state, and dedicate no more than 50 percent of the project for lodging.

At least one company owed by Justice was a recipient of this tax credit in 2014, two years prior to winning election as West Virginia’s new Democratic governor.

A football training facility at the Greenbrier Resort was slated to receive $9.5 million in tax credits over 10 years if revenue increased. The facility cost $27 million to build according to the Charleston Gazette-Mail. Justice applied for the tax credit for two other projects prior to 2016 before entering politics: a tennis court and wedding chapel on the grounds of the Greenbrier Resort, and a proposed ski resort that has yet to get off the drawing board.

Senate Bill 2002 fixes issues with the state’s criminal expungement laws in order to keep the state in compliance with federal law. It limits DUI expungements to what can be expunged by state law and limits the ability to expunge DUIs for commercial driver’s licenses. Senate Judiciary Committee Chairman Charles Trump, R-Morgan, said the state could lose as much as $26 million from the federal government if the bill isn’t passed.

“There are federal regulations that had been adopted in Washington pursuant to an act of Congress that tie state highway funding … to the manner in which the state deals with suspensions and revocations for people who have offenses of driving under the influence,” Trump said. “If you point to the exact language in our current law, that’s too broad at least in the view of the Federal Highway Administration.”

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