Special session on road wraps up with drama on military pensions bill

CHARLESTON, W.Va. — After a slow start Monday, West Virginia legislators got into gear Tuesday and completed work on a brief special session agenda, passing legislation intended to help facilitate building highways after passage earlier this month of a $1.6 billion road bond referendum.

The day’s drama, however, involved attempts to amend a bill to fully exempt military pensions from state income taxes (House Bill 201) — resulting in a challenge to House Speaker Tim Armstead’s leadership authority from the right and the left.

Folk, a member of the far-right Liberty Caucus, found an unlikely ally in his motion from Delegate Isaac Sponaugle, D-Pendleton, who contended that Armstead has broadly interpreted germaneness in the past, including last regular session, by allowing the House to amend the contents of the so-called “Tim Tebow” bill, allowing home-schooled children to play on public school sports teams, into a bill authorizing county school systems to offer virtual-classroom instruction online.

“You may or may not like what’s in the amendment, but it fits the one-object rule, and it is germane,” said Sponaugle, who previously had offered an amendment that would have raised the top income tax bracket from a 6.5 percent to a 10 percent rate, a proposal that Armstead also ruled was not germane.

Armstead, meanwhile, left the podium to make a plea that overturning his ruling would tear apart the fabric that holds the House of Delegates together.

“We are setting ourselves up for chaos,” Armstead said, adding, “It’s not about the issue before us. It’s about the rules of this House.”

Ultimately, the House sustained Armstead’s ruling on a 63-33 vote, and then passed the bill 95-1. Later Tuesday afternoon, the Senate passed the bill without amendment or debate on a 33-0 vote, sending it to Gov. Jim Justice.

The bill will provide about $3.1 million in tax relief to about 3,800 military retirees who have pensions in excess of the $22,000 currently exempted.

Delegate Saira Blair, R-Berkeley, the lone no vote in the House, said she could not support what she said amounted to Justice pandering to retired veterans.

“I think this was political pandering,” she said. “We need to be looking at comprehensive tax reform and should be doing that in the 2018 session.”

Other bills passed Tuesday, the second day of a special session coinciding with regularly scheduled monthly legislative interim committee meetings, include:

• Allowing the Tax Department to provide confidential taxpayer information to the Division of Highways so that Highways can verify that contractors have properly paid taxes and made payroll deductions before the DOH makes final payment (Senate Bill 2002). The bill passed the Senate 33-0, and the House 91-0.
• Toughening penalties in the West Virginia Jobs Act, which requires contractors on taxpayer-funded projects of $500,000 or more to ensure that 75 percent of their workforce is from West Virginia or bordering counties, or obtain waivers from the state if they cannot meet that requirement (HB 205). It passed the House 94-1 and Senate 33-0.

House Judiciary Chairman John Shott, R-Mercer, said the legislation gives teeth to the act, in part by raising a nominal $100 a day fine to $250 per day per employee below the 75 percent requirement.

Senate Judiciary Chairman Charlie Trump, R-Morgan, said that was the question most frequently raised at town hall meetings on the road bond referendum: “If you’re going to invest $1.6 billion in our state highways system, what are you going to do to assure these jobs go to West Virginians?”

• Streamlining hiring procedures for Highways and for the Department of Revenue’s auditing, compliance and enforcement divisions, to rapidly fill more than 600 vacancies needed for the expected upswing in road construction and maintenance projects (SB 2003). It passed the Senate 33-0.
• Increasing tax credits for rehabilitating historic buildings from the existing 10 percent credit to 25 percent of the project costs, with total credits capped at $30 million a year (HB 203).

Advocates of the measure contend that the 10 percent credit does not provide enough financial incentive to encourage people to invest in rehabbing historic buildings. It passed the House 91-3, and the Senate 33-0.