Can a West Virginia county development authority hand out matching grants to community colleges, scholarship programs, and recreational projects, even though the statute that creates the authority does not mention 'education' in its list of purposes?

Plain-English summary

The Berkeley County Development Authority wanted to start a matching-grants program: businesses would chip in money for projects in the county, and the BCDA would match. The proposed projects included scholarships in business-related fields, training programs at Blue Ridge Community and Technical College for the specific skills local employers wanted to hire for, recreational programs, work-force services, and possibly endowing a chair at an educational institution.

The Berkeley County prosecutor asked the AG: does the statute authorizing county development authorities (W. Va. Code § 7-12-1 et seq.) actually let a development authority spend its money this way?

The AG said yes for most of these, with one caveat for the open-ended endowment.

The starting point is § 7-12-2, which lays out the development authority's purposes: promote business prosperity and economic welfare, stimulate business and industrial expansion, maximize employment, improve the standard of living, cooperate "in the promotion and advancement of recreational developments," and "furnish money . . . and such other aid as may be deemed requisite to approved and deserving applicants for the promotion, development and conduct of all kinds of business activity" in the county.

Two pieces of statutory framing make the analysis lean permissive. First, § 7-12-7(a)(3) says development authorities have authority to do "any and all things necessary or convenient" toward those goals. Second, § 7-12-15 says the article "shall be liberally construed as giving to the authority full and complete power reasonably required to give effect to the purposes hereof." The Legislature wrote in a wide net.

Recreational grants are easy. § 7-12-2 expressly says development authorities may "cooperate and act in conjunction with other organizations . . . in the promotion and advancement of . . . recreational developments." The matching-grant program for recreational endeavors falls squarely within that.

Education is the harder case, but mostly fine. The statute does not list "educational" as a purpose. The Legislature did include "educational" in the parallel statute creating the statewide WV Economic Development Authority (§ 31-15-3), specifically authorizing support for "business incubator programs, including the programs at institutions of higher education." A court could read the omission from the county-authority statute as deliberate, citing Young v. Apogee Coal and State v. Louk (the Legislature knows how to write something in when it wants to).

But the AG concludes that argument is overcome by two countervailing pieces. First, West Virginia's statute books are full of legislative findings tying education to economic development: "Educational attainment is inextricably linked to economic development" (§ 18C-1-3(a)(1)); "critical link between education and economic development" (§ 18B-3D-1(a)(2)); higher-ed/business collaboration is needed for "the advancement of new and emerging technologies" (§ 18B-1F-1). Second, the Supreme Court of Appeals has repeatedly emphasized "the critical role played by institutions of higher education with regard to the social, economic, political, and cultural development of the general public" (UMW v. Parsons). And once "industrial" was understood to extend to "commercial" generally (State ex rel. Ohio Cty. Comm'n v. Samol), narrow textual readings of these economic-development statutes have not done well in court.

So the practical rule the AG articulates: as long as the educational program has a nexus to local economic development, business prosperity, or workforce needs, the development authority can fund it. The bar is "low." § 18-2E-8 supplies a useful framing: educational opportunities advancing economic development should focus on "relevancy, responsiveness to business . . . needs, and on the current and future work force needs of the state."

Applied to the BCDA's specific examples:

• Matching funds for a local college program in skills targeted to a specific employer's hiring needs. Clearly authorized. Direct nexus to "business prosperity and economic welfare" and "maximum opportunities for employment."
• Scholarships in industrial and business-related fields. Authorized. Same nexus.
• Matching grants for "rehabilitative" or workforce-related services. Authorized. Direct nexus to economic stability and improving the standard of living.
• Endowing a chair at an educational facility, field unspecified. Closer call. An endowment in computer science or nursing for a community college whose curriculum is keyed to regional workforce needs would likely be fine. An endowment in an unrelated humanities field at a four-year university with no clear local-economic tie might fail the nexus test.

Practical takeaway for the BCDA: nearly all the proposals on the table are authorized. The endowment-of-a-chair concept needs to be tied to a specific subject area with documented local economic value before the authority commits.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Does this opinion mean any county development authority can fund any educational program?
A: No. The opinion specifically requires a nexus between the program and the county's "business prosperity and economic welfare." A program in a field with clear workforce ties is on solid ground; an endowment in a field without those ties is risky. Document the connection in the grant approval.

Q: Can a development authority fund a private business directly?
A: § 7-12-2 explicitly authorizes "investment[s] . . . in the locating of new business" and "assist[ance] [to an] existing business." The 1969 AG opinion (53 W. Va. Op. Att'y Gen. 276) and 2013 AG opinion (2013 WL 3790633) both treat business-support funding as authorized. The statutory framing is permissive.

Q: What about the prohibition against using public funds for private purposes?
A: This opinion does not directly address the public-purpose limit, but the underlying premise is that promoting business prosperity in the county is a public purpose. The Supreme Court of Appeals confirmed in Samol that commercial development "gives much the same economic benefit to a community as would comparable activities in the industrial area." Read the constitutional public-purpose limit through that lens.

Q: Is there a statutory cap on how much a development authority can grant?
A: Not in this opinion. § 7-12-7 says the authority may "expend funds in the execution of the powers and authority herein given." The cap is whatever budget the authority has.

Q: Could the Legislature change this?
A: Yes. The Legislature could narrow the "necessary or convenient" language, add a list of exclusive permitted uses, or specifically forbid education funding. As of the opinion date, the statute was permissive.

Background and statutory framework

§ 7-12-1. Authorizes counties and municipalities to create development authorities.

§ 7-12-2 (purposes). "Promote, develop and advance the business prosperity and economic welfare" of the county. Stimulate expansion of business and industrial activity. Provide maximum employment opportunities. Improve standard of living. Cooperate with other organizations in promotion of recreational developments. Furnish money and other aid to applicants for "the promotion, development and conduct of all kinds of business activity."

§ 7-12-7 (powers). Enter contracts with public or private entities consistent with statutory purposes. Expend funds in execution of those powers. Do "any and all things necessary or convenient" toward the statutory ends.

§ 7-12-15 (construction). "[T]his article shall be liberally construed as giving to the authority full and complete power reasonably required to give effect to the purposes hereof."

§ 31-15-3 (parallel state statute). Creates statewide WV Economic Development Authority. Like § 7-12-2, lists business prosperity and economic welfare. Also expressly mentions "business incubator programs, including the programs at institutions of higher education." This express education clause is what raises the textual question of whether the omission from the county-authority statute was deliberate.

§ 18-2E-8 (workforce-relevance findings). Educational opportunities that advance economic development must focus on "relevancy, responsiveness to business . . . needs, and on the current and future work force needs of the state."

§§ 18B-3D-1(a)(2), 18C-1-3(a)(1), 18B-1F-1. Legislative findings tying education to economic development.

Earlier AG opinions. 53 W. Va. Op. Att'y Gen. 276 (1969) (county/development-association matching arrangement lawful under "industrial development" authority); 2013 WL 3790633 (W. Va. A.G. June 12, 2013) (statutory text "broadly worded").

Key cases. State ex rel. Ohio Cty. Comm'n v. Samol, 165 W. Va. 714 (1980) (commercial projects yield "much the same economic benefit" as industrial; the two should be read together for economic-development purposes). UMW v. Parsons, 172 W. Va. 386 (1983) ("critical role played by institutions of higher education" in social and economic development). Young v. Apogee Coal, 232 W. Va. 554 (2013), and State v. Louk, 237 W. Va. 200 (2016) (canons against adding to or subtracting from statutes; relevant counterweight).

Citations and references

Statutes:
- W. Va. Code § 5-3-2 (AG advisory authority for prosecutors)
- W. Va. Code §§ 7-12-1, -2, -7, -15 (county development authority)
- W. Va. Code § 18-2E-8 (workforce-relevance criteria)
- W. Va. Code § 18B-1F-1 (higher-ed/business collaboration)
- W. Va. Code § 18B-3D-1(a)(2) (education/economic development link)
- W. Va. Code § 18C-1-3(a)(1) (educational attainment and economic development)
- W. Va. Code § 31-15-3 (state WV Economic Development Authority)

Cases:
- State ex rel. Ohio Cty. Comm'n v. Samol, 165 W. Va. 714 (1980)
- UMW v. Parsons, 172 W. Va. 386 (1983)
- Young v. Apogee Coal Co., LLC, 232 W. Va. 554 (2013)
- State v. Louk, 237 W. Va. 200 (2016)

Earlier AG opinions:
- 53 W. Va. Op. Att'y Gen. 276, 1969 WL 100559 (1969)
- 2013 WL 3790633 (W. Va. A.G. June 12, 2013)

Source

• Landing page: https://ago.wv.gov/media/17796/download?inline
• Original PDF: https://ago.wv.gov/media/17796/download?inline

Original opinion text

State of West Virginia
Office of the Attorney General
State Capitol
Building 1, Room 26-E
Charleston, WV 25305-0220
Patrick Morrisey
Attorney General

(304) 558-2021
Fax (304) 558-0140
July 31, 2018

The Honorable Catie Wilkes Delligatti
Office of the Prosecuting Attorney of Berkeley County
380 West South Street, Suite 1100
Martinsburg, WV 25401

Dear Prosecutor Delligatti:

You have asked for an Opinion of the Attorney General concerning the ability of the Berkeley County Development Authority ("BCDA") to make matching contributions to educational institutions and to provide funding for various recreational activities within Berkeley County. This Opinion is issued pursuant to W. Va. Code § 5-3-2, which provides that the Attorney General may "consult with and advise the several prosecuting attorneys in matters relating to the official duties of their office." To the extent this Opinion relies on facts, it is based solely on the factual assertions in your correspondence with the Office of the Attorney General.

In your letter and discussions with our Office, you explain that several businesses have asked if the BCDA will provide matching funds to facilitate various educational and recreational programs within Berkeley County. The BCDA is interested in granting some of these requests by providing matching-funds grants to "educational institutions, non-profit organizations" or "governmental entities or subdivisions which further economic development and vitality in Berkeley County." You further note that, with respect to the education-related funding, "generally, the BCDA intends to utilize the grant program to support business-related coursework and certifications" at local educational institutions, such as Blue Ridge Community and Technical College ("BRCTC") in Martinsburg.

Your letter raises the following legal question:

Does West Virginia Code Section 7-12-1 et seq. permit a county development authority to issue matching funds to a private educational institution or other private or governmental entity for the purpose of fostering economic development?

We conclude that there is no legal barrier to the BCDA issuing matching funds to an educational institution or other entity to support educational or recreational activities, as long as the programs are connected to advancing business and economic interests within Berkeley County.

Discussion

Under West Virginia law, municipalities and counties are empowered to create development authorities. W. Va. Code § 7-12-1. The overall goal of a development authority, including the BCDA, is to "promote, develop and advance the business prosperity and economic welfare" of the county. W. Va. Code § 7-12-2.

The authorizing statute includes several specific descriptions of development authorities' purposes, including to "stimulate and promote the expansion of all kinds of business and industrial activity which will tend to advance business and industrial development and maintain the [county's] economic stability," "provide maximum opportunities for employment," "improve the standard of living of the citizens of the county," act with other organizations "in the promotion and advancement of . . . recreational developments," and "furnish money . . . and such other aid as may be deemed requisite to approved and deserving applicants for the promotion, development and conduct of all kinds of business activity" in the county. W. Va. Code § 7-12-2. Development authorities also have statutory power to "enter into contracts with any person, agency, governmental department, firm or corporation, including both public and private corporations," consistent with its purposes, W. Va. Code § 7-12-7(a)(3), and to expend "funds in the execution of the powers and authority herein given," W. Va. Code § 7-12-7(12).

In addition to these specific powers, development authorities also have statutory authorization "generally to do any and all things necessary or convenient" toward the end of "promoting, developing and advancing the business prosperity and economic welfare of the county." W. Va. Code § 7-12-7(a)(3) (emphasis added). The statute similarly provides that "this article shall be liberally construed as giving to the authority full and complete power reasonably required to give effect to the purposes hereof." W. Va. Code § 7-12-15 (emphasis added).

The Supreme Court of Appeals has not had occasion to address the scope of these statutory powers in the context of potential funding measures like those you describe. Nevertheless, as our Office noted in a previous Attorney General Opinion, the statutory text is "broadly worded." 2013 WL 3790633, at 2 (W. Va. A.G. June 12, 2013). Further, a 1969 Attorney General Opinion considered a somewhat analogous matching-funds program between a county and the county development association. 53 W. Va. Op. Att'y Gen. 276, 1969 WL 100559 (1969). Relying in part on the statutes described above about development authorities' purposes, that Opinion determined such an arrangement was lawful under the county's statutory authority to "furnish" funding for "industrial development." Id. at 11. And since then, the Supreme Court of Appeals has made clear that commercial development generally, not industrial development alone, serves the same statutory ends. See, e.g., State ex rel. Ohio Cty. Comm'n v. Samol, 165 W. Va. 714, 718, 275 S.E.2d 2, 4 (1980) ("It does not require any lengthy discussion to realize that the renovation, expansion or creation of existing or new commercial projects gives much the same economic benefit to a community as would comparable activities in the industrial area. Each serves to create or maintain employment and enhance tax revenues, and thereby operates to benefit the community and public in general." (footnote omitted)).

Just as a county may exercise its authority to "furnish" funds for industrial development through a matching program with a development authority (whose purpose is to promote that very goal), we see no reason why a development authority cannot also use matching programs pursuant to its authority to "furnish money . . . to approved and deserving applicants for the promotion, development and conduct of all kinds of business activity" in the county." W. Va. Code § 7-12-2. The critical inquiry, then, is whether the relevant program advances the development authority's purposes within the county.

With these principles in mind, we address the examples you provided our Office of potential matching-funding proposals. One type of program appears to fall squarely within the BCDA's enumerated powers: "matching grant funding for recreational endeavors in the county." As noted above, the operative statute provides that a development authority may "cooperate and act in conjunction with other organizations . . . in the promotion and advancement of . . . recreational developments" in Berkeley County. W. Va. Code § 7-12-2 (emphasis added).

The other programs you describe involve funding educational programs, and it is less clear from the statutory text whether the Legislature intended for the wide net of a development authority's powers to include funding for higher-education initiatives. Unlike "business," "economic," "industrial," and "recreational," Section 7-12-2 does not include the word "educational." Nevertheless, many statutes and cases make clear that education is tied closely to economic development. Our high court has emphasized, for example, "the crucial role played by institutions of higher education with regard to the social, economic, political, and cultural development of the general public." United Mine Workers of Am. Int'l Union by Trumka v. Parsons, 172 W. Va. 386, 395, 305 S.E.2d 343, 351 (1983) (emphasis added). Similarly, Chapter 18B of the West Virginia Code (higher education) is replete with legislative findings about the "critical link between education and economic development." W. Va. Code § 18B-3D-1(a)(2). For instance, the Legislature has declared that "[e]ducation[al] attainment is inextricably linked to economic development," W. Va. Code § 18C-1-3(a)(1), and that "economic development in West Virginia" requires "collaborations developed between higher education and businesses and industry, particularly in the advancement of new and emerging technologies." W. Va. Code § 18B-1F-1.

These authorities reflect the Legislature's understanding that educational initiatives are often important facets of economic development, and thus that funding educational programs very likely falls within a development authority's powers.

On the other hand, there are some statutes in which the Legislature, in contrast to the development authority statute, specifically mentions education. The statute creating the statewide West Virginia Economic Development Authority, for instance, uses language similar to the county development authority statute, such as "develop[ing] and advanc[ing] the business prosperity and economic welfare of the state of West Virginia," and "stimulat[ing] and assist[ing] in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of this state." W. Va. Code § 31-15-3. Unlike here, that statute also specifically mentions support for "business incubator programs, including the programs at institutions of higher education in the state." Id. (emphasis added).

A reviewing court might conclude that the Legislature's reference to higher education in only one of these statutes indicates a deliberate choice not to include educational programs within a county development authority's scope. Cf. Young v. Apogee Coal Co., LLC, 232 W. Va. 554, 561, 753 S.E.2d 52, 59 (2013) ("Just as courts are not to eliminate through judicial interpretation words that were purposely included, we are obliged not to add to statutes something the Legislature purposely omitted." (citations omitted)); State v. Louk, 237 W. Va. 200, 205, 786 S.E.2d 219, 224 (2016) (concluding that if the Legislature had intended a criminal statute to encompass specific conduct, it would have "writ[ten] that language into the statute," particularly where it has done so "in a variety of other statutes"). Nevertheless, this is an isolated example compared to the many statutory provisions linking education and business growth. Combined with the generally broad scope of authority the Legislature granted to development authorities and its directive to interpret those powers liberally, W. Va. Code § 7-12-15, it is likely that the Legislature did not mean to exclude educational programs altogether. To be sure, some educational programs may be too far afield of a development authority's statutory purposes, in at least one statute, for instance, the Legislature found that educational opportunities that advance economic development must focus on "relevancy, responsiveness to business . . . needs, and on the current and future work force needs of the state," W. Va. Code § 18-2E-8. But in general, a standard like this should prove a low bar when establishing a nexus between a particular educational program and the county's economic welfare.

Turning back to your remaining examples, we conclude that most should satisfy this standard. You suggested, for instance, that a business located or looking to set up shop in Berkeley County might apply for matching funds to help a local educational institution like BRCTC offer a training program in skills the employer seeks in future hires. The funds in this scenario could be used to cover the costs of acquiring necessary equipment or hiring a qualified instructor. This type of worker training program has a clear connection to promoting "the business prosperity and economic welfare" of Berkeley County" and "provid[ing] maximum opportunities for employment." W. Va. Code § 7-12-2. Depending on the circumstances, it could also be said to be an "investment[ ] . . . in the locating of new business" or "assist[ance] [to an] existing business." Id. So too for "providing scholarships to educate students in industrial and business-related fields," and providing "matching grant funding for rehabilitative" or "work force related services." These measures likewise appear to have a direct connection to advancing Berkeley County's "economic welfare," "maintain[ing] [its] economic stability," and "improv[ing] the standard of living of [its] citizens." Id.

As for the last potential program, "endowing a chair at an educational facility", without additional detail, this type of grant may test the limits of the development authority's powers. Unlike business-focused scholarships and programs, it is not readily apparent how close the connection would be between an endowment in an unspecified field and the current and future work force needs of Berkeley County. For some fields, the connection may be too attenuated. Yet for many others, we expect that the BCDA could make the necessary showing, particularly in the context of a community or technical school like BRCTC, whose curriculum is "integrated directly with the economic and workforce needs of the region." Blue Ridge Community and Technical College, Mission, Vision, & Core Values, FY 2015-2020 Strategic Plan, http://www.blueridgectc.edu/about-blue-ridge/mission-vision-statements/.

In short, the BCDA's broad purposes, combined with the Legislature's repeated refrain elsewhere in the West Virginia Code that educational funding is critical to economic development, make it very likely that the BCDA could provide matching funding for most of the programs you describe consistent with its statutory authority.

Sincerely,

Patrick Morrisey
Attorney General
Lindsay See
Solicitor General
Zachary A. Viglianco
Assistant Attorney General