Justice Signs Coal, Campaign Finance Bills; Vetoes Cannabis Bill, ‘Randy’s Dream'

Mar 27, 2019

Hours ahead of a midnight deadline to take action on bills from the regular legislative session, Gov. Jim Justice has announced a final set of approvals and vetoes.

Of the 294 bills passed this regular session, Justice signed 266 pieces of legislation and vetoed 28.

Governor Holds Bill Signing Event at Marion County Mine

Justice signed three bills Wednesday at Harrison County Coal Company, a Murray Energy Company subsidiary based in Marion County.

Miners joined Justice as he signed bills focused on the coal industry -- House Bill 3142 (reducing the severance tax on thermal or steam coal), House Bill 3144 (North Central Appalachian Coal Severance Tax Rebate Act) and Senate Bill 635 (relating generally to coal mining activities).

With the Murray Energy mine focused on thermal coal, Justice spoke at length about House Bill 3142. He says the bill is aimed at saving thermal coal mining jobs across the state. It will reduce the tax rate from 5 percent to 3 percent over three years and translates to a $60 million annual loss in revenue upon full implementation, according to a fiscal note from state revenue officials.

“We can't do without these jobs -- there's no way around it,” Justice said in an interview following the event. “The multiplier effect of a coal miner’s job is astronomical. At the end of the day, we need to do everything in our power to preserve it. That's what I'm trying to do.”

Bills to Up Limits on Campaign Contributions Becomes Law

Justice also signed a controversial bill that increases the contribution limits in the state’s campaign finance laws. Senate Bill 622 allows up to $2,800 in donations to candidate committees, $5,000 to political action committees and $10,000 to state party executive committees. Each of those limits had been set at $1,000 per year or election cycle.

Del. Andrew Robinson, D-Kanawha, was one vocal opponent of Senate Bill 622.

“I think it is one of the worst bills we have passed since I’ve been in the Legislature for three years,” Robinson said in a Wednesday phone interview.

While the measure does call for more stringent reporting requirements on expenses made by independent expenditures, Robinson argued that those updates don’t require the reporting of donors to those groups.

“I would describe them as very miniscule attempts to provide transparency,” he said.

In committee and during debate on the floor, Robinson and other House Democrats pushed to keep the contribution limits as they had been. Members of the minority also sought to increase transparency for independent expenditures. Each of the Democrats’ attempts to amend the bill failed.

“I think adding more money into politics is one of the worst things we can do for our constituents,” Robinson said, specifically taking issue with money spent as independent expenditures. “Those messages can be misleading, can cause disruption and put people in office who don’t represent the values of everyday West Virginians.”

Attempts to reach Senate Bill 622’s lead sponsor, Sen. Eric Tarr, R-Putnam, went unreturned as of Wednesday night.

Veto Targets Medical Cannabis Vertical Integration Because of Tax Classification

While Justice announced Tuesday he had signed a bill providing a banking solution for the state’s yet-to-launch medical cannabis program, he decided to veto a measure that would have allowed the industry’s growers, processors and dispensaries to be vertically integrated.

Vertical integration would allow those in the industry to take on more than one role. Law regarding the medical cannabis program currently does not allow a grower or processor to act as a dispensary.

In a veto message for House Bill 2079, Justice said the proposal “favors wholly vertically integrated businesses” rather than those who act in a single function within the industry.

“While the Legislature has the authority to classify different businesses and to tax them differently, the classifications must be (1) reasonable, (2) based on pertinent and real differences, and (3) have as their object a purpose that is germaine to the enabling legislation,” Justice wrote.

Del. Mike Pushkin, D-Kanawha, was the main sponsor of the medical cannabis vertical integration measure. He expressed frustration over the veto in a news release.

“The Governor's veto of this legislation effectively means suffering people will not have access to treatment and the promise of jobs, investment and additional tax revenue that would have come with the passage of the bill will not be realized for West Virginia,” Pushkin said.

The veto puts West Virginia’s medical cannabis program -- which was set to have the Department of Health and Human Resources being issuing permits on July 1 -- further in question.

 

“My bill allowed investments in the cannabis industry in West Virginia to be treated the same way as any other business for tax purposes. Without the ability to make the same type of deductions that other businesses are allowed, it's doubtful that any cannabis business in West Virginia could exist,” Pushkin said. “The Governor couldn't successfully run the Greenbrier under this tax structure and neither can medical cannabis growers.”

‘Randy’s Dream’ Nixed

Justice also vetoed Senate 522, dubbed “Randy’s Dream” for Sen. Randy Smith’s (R-Tucker) plan to address issues with secondary roads. The bill would have allowed the Department of Highways to put up to $80 million into what would have been a new Special Road Repair Fund.

The measure also called on county roads supervisors, in consultation with the county commission and state lawmakers, to prioritize repair projects. The state auditor would have also been tasked with providing transparency in the way money was spent on roads projects across the state.

In a veto message for that measure, Justice said the proposal overstepped the bounds of the Legislature.

“The purpose of this bill, while well-intentioned, is problematic because it represents a legislative encroachment into executive functions,” Justice wrote.

Smith took issue with Justice’s veto in a Wednesday phone interview.

“I cannot understand why the governor would veto a bill that would provide accountability and transparency in fixing the roads,” Smith said.

In recent weeks, Justice has called for money to be redirected from state surpluses and bond money from the Roads to Prosperity project to address issues with secondary roads. The Department of Transportation released this week lists of secondary roads in need of repair after Justice called on highway district supervisors to compile that information.

“No matter what he is doing with the roads now, there is still no transparency there. The press and the public won’t be able to know how he is spending the money,” Smith said. “The only thing I can come up with as to why he vetoed my bill is that it wasn’t Jim Justice’s idea. He’s a self-serving governor.”

Regular Session Bills Finished, Special Session Looms on Education

More bills are likely headed Justice’s way in the coming months. A special session on “education betterment” aims to achieve a pre-midterm election promise from Justice and Republican legislative leaders and to consider other aspects of public education.

An omnibus education reform measure -- which included pay raises along with the establishment of charter schools and education savings accounts -- failed during the regular session. But some Republican leaders, particularly those in the Senate, have said they want to include charter schools and education savings accounts in the special session.

A series of meetings on public education is ongoing around the state.