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House passes economic development bill

CHARLESTON — Taking an extra day, the West Virginia House of Delegates passed the final bill on Gov. Jim Justice’s special session agenda Tuesday.

The House passed Senate Bill 2001, generally relating to funding for infrastructure and economic development projects in the state, in a 76-6 vote with 18 absent or not voting. The bill heads to Justice’s desk next.

But the bill’s fate was in doubt as lawmakers gaveled in Tuesday morning at 8 a.m. In a vote Monday night, a motion to suspend the constitutional rules that require a bill be read three separate days failed 21-66 with 13 absent or not voting. A constitutional rule suspension motion needs a vote of four-fifths of members present.

SB 2001 creates two revolving loan funds for economic development projects and transportation infrastructure projects. One fund through the Economic Development Authority would fund loans for business and industrial development projects.

Funds will come from $600 million appropriated to the Department of Economic Development in the fiscal year 2023 general revenue budget from end-of-year surplus collections. A minimum of $200 million can be used to finance high impact development projects.

The other fund through the Department of Transportation would create a $200 million Infrastructure Investment Reimbursement Fund to cover reimbursement for transportation projects. The fund itself would be reimbursed with federal funds as they become available.

The bill was on second reading Tuesday morning. A second motion to suspend the constitutional rules was adopted in a 71-13 vote with 16 absent or not voting, meeting the requirement of four-fifths of members present. Del. Tom Fast, R-Fayette, voted against the constitutional rule suspension Monday night but changed his vote Tuesday morning.

“I…urge suspension of the rules so we can move past this bill,” Fast said. “I know that’s a change from my vote (Monday). I will just state that since voting yesterday, I have ascertained a great deal more information than I had before I voted yesterday…I think that this is good for economic development.”

House Majority Whip Paul Espinosa, R-Jefferson, said the motion was important to make sure the bill passed so that the revolving loan funds have guardrails to limit how the Department of Economic Development can use the funds.

“My sense is if we don’t suspend rules, this bill will probably not move further and we’ll adjourn sine die and we’ll lose these safeguards…,” Espinosa said. “By not suspending rules, the effect of which is this bill would likely not get enacted, we’re essentially not enacting some additional provisions that will direct the governor and his agency in how to expend these funds.”

Once the motion to suspend constitutional rules was adopted, SB 2001 enjoyed wide bipartisan support from both Republican and Democratic House members.

“I think that we should be doing these economic development projects. I think they are very critical to moving this state forward,” said Delegate Shannon Kimes, R-Wood. “I understand some of the arguments that some of the folks have against it, especially the conservatives that don’t like the crony capitalism. I’ll just say I prefer crony capitalism over swamp socialism any day, and that’s what could happen to the money if we don’t free it today in the private sector.”

“If it’s $100,000 per job at $50 million minimum for high impact, you’re talking about 500 jobs. That’s transformative,” said Delegate Larry Rowe, D-Kanawha. “I can’t vote against that.”

The six no votes came from Delegates Barbara Fleischauer, D-Monongalia; Marty Gearheart, R-Mercer; Joe Jeffries, R-Putnam; Pat McGeehan, R-Hancock; Chris Pritt, R-Kanawha; and Mike Pushkin, D-Kanawha. Concerns ranged from lack of information tracking West Virginians hired by companies receiving loans to exemptions from the Freedom of Information Act for any documentary material, data, or other writing for high impact development projects.

“This bill eliminates the ability to FOIA material information, and perhaps that material information is promises or quid pro quos made between target private enterprises…and this government board,” McGeehan said. “That is in respect to the tune of hundreds of millions of tax dollars…far less transparency is being enacted with this economic development bill.”

“To me, just because you say it’s a high impact project doesn’t sound like a guardrail to me,” Fleischauer said. “We are taking a dramatic step, in my opinion, to shield the documents that might underlie these deals…there is a reason we have a Freedom of Information Act, and that is so there is transparency about many things, including how taxpayer funds are used.”

Justice called a special session last Friday. After amending the special session call Monday morning, lawmakers convened at noon and considered 17 bills made up of legislation passed during the 2022 legislation session that was vetoed for technical reasons, bills that didn’t make it past the March 12 deadline and a handful of new bills.

The driving impetus for the special session was to fix flaws found in Senate Bill 729. Justice voted the bill at the end of March, citing numerous technical flaws in the final draft of the bill. SB 2001 was introduced to fix those flaws and make additional tweaks to two revolving loan programs.

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