CHARLESTON — The state Supreme Court agreed Tuesday to decide whether West Virginia University evaded the law when it put a private foundation in charge of building a new services center in Morgantown.
In a 5-0 vote, the court said it will hear the appeal filed by the Affiliated Construction Trades Foundation of a decision issued in May by Kanawha County Circuit Judge Charles King.
Financing and construction of the $23 million University Services Center is being handled by the West Virginia University Foundation, a private fund-raising group affiliated with WVU.
When the project is complete, WVU plans to lease the building from the foundation for 30 years, after which the university will own it.
In his ruling, King concluded that the arrangement was legal. The Supreme Court agreed Tuesday to hear an appeal of that decision.
A lawyer for the ACT Foundation told the court Tuesday that the financing scheme was an attempt to evade laws that require state agencies to submit the projects for bid and require the successful contractor to pay prevailing wage rates.
“We believe this was ... a scheme designed to avoid paying the prevailing wage,” said Morgantown lawyer Vincent Trivelli, representing the ACT Foundation.
“They say they have a contract provision calling for paying the prevailing wage, but we don’t know if they are paying it,” Trivelli said.
In the lower court ruling, King said he did not find ACT’s arguments persuasive.
“The Court is not persuaded that WVU’s alleged use of the foundation as ’conduit’ for the construction and financing of the Office Building has transformed that project into a ’public improvement,’ as defined by statute,” King said.
Trivelli said ACT had filed various requests under the Freedom of Information Act but had had its requests rebuffed by the WVU Foundation.
“They said they were private, not public, and did not have to respond,” Trivelli said.
In questioning Trivelli, the justices repeatedly asked him what remedy he seeks in his lawsuit, now that the services building is more than 60 percent complete.
Trivelli suggested rebidding the contract and paying prevailing wages going forward, but the justices seemed reluctant to go down that road.
“Maybe we can do something for future situations,” Justice Joseph Albright said.
“My guess is that if they had used union employees, we wouldn’t be hearing this today,” Justice Larry Starcher added.

 
CHARLESTON — The Senate Finance Committee on Tuesday endorsed a tax on smokeless tobacco that is weaker than a similar measure pending in the House Finance Committee.
The Senate’s version calls for a 7 percent tax on smokeless tobacco, cigars and pipe tobacco, the same tax the state now imposes on cigarettes.
The House bill follows Gov. Bob Wise’s recommendation for a 25 percent tax.
Former Gov. Cecil Underwood proposed a similar tax measure last year which passed in the House but died in the Senate Finance Committee.
The Senate committee on Tuesday endorsed the tax after about an hour of discussion, which included a plea by state Secretary of Health and Human Resources Paul Nusbaum that lawmakers pass the bill because studies show it will deter tobacco usage teenagers.
Nusbaum said the tobacco industry is targeting young consumers with new attractive products, such as tea bags and flavored tobacco. West Virginia should make purchasing tobacco products as difficult as possible, he said.
“Price dramatically impacts usage. It’s that simple. I can show you study after study,” Nusbaum said.
John Hodges of the West Virginia Wholesalers Association, who also addressed the committee, said the proposed tax is not likely to stop teenage consumers from buying tobacco products. It will simply drive them across state lines.
Senators in counties that border Virginia, Kentucky and Pennsylvania have said their primary concern with the bill is that retailers would be hurt by a 25 percent tax because those states don’t tax smokeless tobacco.
“Where I live, in Weirton, you can go one mile into Pennsylvania and buy smokeless tobacco that’s not being taxed,” said Sen. Ed Bowman, D-Hancock.
Nusbaum’s lobbying for the tax was instrumental in reviving the debate over the smokeless tobacco tax, some lawmakers said.
“It’s good that the Senate made this move, because it’s precident-setting,” Nusbaum said.
Nusbaum said he would prefer that the percentage be higher, but “the legislative process is still going on.”
Senate President Earl Ray Tomblin, D-Logan, said the tax passed by the Senate Finance Committee seems fair, because it “taxes all tobacco products, and it treats all tobacco products the same.”
The bill, SB116, was amended to include other provisions not part of the House bill.
The tax would go into effect in January 2002, not July 2001 as suggested by Wise, under terms approved by the finance committee.
Unlike the House version, the Senate bill also added pipe tobacco and cigars among the items taxed and insists that wholesalers from out-of-state be required to pay West Virginia’s tax.
The committee voted down a proposal by Senate Majority Leader Truman Chafin, D-Mingo, which would have exempted all retailers within a five-mile radius of Virginia, Kentucky and Maryland.
“I’m concerned about what this is going to do to our businesses in border counties,” Chafin said.
“I understand this is a health issue, but it’s also a business issue. We’re saying we’re going to be business-friendly, but we’re doing things that continue to drive businesses away from the state,” he said.
State tax officials estimated that a 25 percent tax would bring in about $6 million, and Wise included that amount in his proposed fiscal 2002 budget.
By adding pipe tobacco and cigars, but then dropping the tax to 7 percent, the tax would likely bring in about $2 million, said state tax analyst Mark Muchow.