Lawmakers discuss delay in action
CHARLESTON — A simple special session wasn’t so simple after the House of Delegates put the brakes on an extension of a tourism tax credit program set to expire at the end of the year.
On Monday, the Senate passed Senate Bill 2001 to extend the Tourism Development Act to 2026. The act was set to expire on Dec. 31 after it was last extended in 2014.
An attempt Monday evening by the House of Delegates to pass SB 2001 by suspending the constitutional rules requiring a bill be read on three separate days failed to get the four-fifths vote required – 80 out of 100 delegates. The rule suspension vote only received 56 votes mostly along party lines, with 37 Democratic lawmakers voting to block the suspension. Only Delegate Larry Kump, R-Berkeley, voted with the Democrats.
SB 2001 remains on second reading and a motion was made to adjourn the House until recalled by House Speaker Roger Hanshaw, R-Clay.
“I was a little disappointed that we didn’t get a chance to get the four-fifths votes needed to move the bill forward,” said House Finance Committee Chairman Eric Householder, R-Berkeley. “Obviously the Senate earlier in the day did pass the bill, and we are going to come back in December and take a crack at it and get it passed before the tax credits expire.”
House Minority Leader Tim Miley, D-Harrison, said the Democratic caucus chose not to suspend the rules and to wait a month until a Dec. 1 report from the Division of Tourism is released showing the effectiveness of the tax break. Lawmakers will return to Charleston for interim meetings Dec. 16-17.
“We just thought that it was prudent that we get that report and be provided that information to use as support or opposition to continuing this program,” Miley said.
The Tourism Development Act was first passed in 2004 and was renewed most recently in 2014. The act gives tax breaks to companies focused on tourism projects, covering as much as 25 percent of construction projects and 35 percent of construction costs on former coal mine sites.
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.
By not re-authorizing the Tourism Development Act, it would not affect any of the 15 projects receiving the tax credit. The total investment by these projects is more than $334 million between 2005 and 2019. Some of these projects include the expansion of Oglebay Resort and Conference Center in Wheeling, the American Mountain Theatre in Elkins and the River Riders Family Adventure Resort in Harpers Ferry.
Householder said the costs to the state for the tax credits has only been around $11 million since the act was first passed 15 years ago.
“It’s an economic tool to bring in tourism and to bring in those investment dollars. It’s been a good program,” Householder said. “There’s a total of 13 qualifications before any of these tax credits can even be applied for. It is an economic development bill.”
At issue for some Democrats was the connections between the tax credit and the Greenbrier Resort owned by Gov. Jim Justice. The resort is now operated by his daughter Jill.
In 2014, the Tourism Development Act was amended to allow applications for the tax credit if the project was adjacent to a “an existing historic resort hotel with at least five hundred rooms.” This amendment was added in the last days of the 2014 regular session. Shortly afterward, a press conference was held by former Gov. Earl Ray Tomblin and legislative leaders.
At that press conference, Justice was led into the room by a trumpeter playing New Orleans jazz, followed by Sean Payton, head coach of the New Orleans Saints. Together, they announced that the Greenbrier Resort was adding a football training facility to its grounds, with the Saints being the first team to start training there, all thanks to the tax credit.
The $27 million training facility at the Greenbrier was slated to receive $9.5 million in tax credits over 10 years if revenue increased. One year later, the Greenbrier was approved for another tax credit for the construction of tennis courts and a chapel costing $11.5 million.
In 2005, The Resort at Glade Springs, also owned by Justice, received the tax credit for a $16 million expansion. Glade Springs was one of only two companies placed in a blind trust by Justice after being elected governor. It was listed for sale in 2018.
Chelsea Ruby, commissioner of the Division of Tourism, told the House Finance Committee Monday that none of the project applications for Justice-owned properties were approved while he was governor and that there had been no new applications since he took office in 2017.
“Chelsea Ruby was asked under oath by several Democratic members of the House Finance Committee ‘does Gov. Justice or does the Justice companies have any applications or pending applications for this tax credit,’ and the response both times was no,” Householder said.
“There was some concern expressed by a few about whether the governor is going to be benefiting from the extension of the act, but we’ve been told that…he doesn’t have any application pending or doesn’t plan to submit one,” Miley said. “And the applications he has submitted in the past for various projects are already ongoing, so they’ve already been approved. As of now, unless something comes to light that I wasn’t aware of, I intend to support the bill as do I believe most of our caucus members.”
Miley said that his caucus wanted to wait and make sure no additional information comes out that could make lawmakers regret a vote. In July, the Legislature passed a last-minute bill giving FirstEnergy Solutions a break on its Business and Occupation Taxes to keep the Pleasants Power Station open. A day after the vote it was revealed that a Justice-owned company, Bluestone Energy Sales, was being sued by FirstEnergy Solutions.
“We suspended rules for the Pleasants Power Station and a day or two later something came to light that caused people concern, so much so that they would’ve liked to have had that information provided to them before being asked to pass that bill,” Miley said. “They’re a little gun shy thinking about rushing bills through when there’s no need to if we’re going to be back here in December anyway.”
A request for an interview with officials with the governor’s office was not returned.