HB 3000 Text

COMMITTEE SUBSTITUTE
FOR
H. B. 3000
(By Mr. Speaker, (Mr. Thompson) and Delegate Armstead)

(Originating in the Committee on Finance)
[March 27, 2009]

A BILL to amend and reenact §11-13-2 of the Code of West Virginia, 1931, as amended; to amend said code by adding thereto a new section, designated §11-13-2q; and to amend and reenact §24-2- 11a of said code, all relating to a business and occupation tax on the business of the transmission of electricity through certain electric transmission lines; imposing a business and occupation tax; setting forth legislative findings; defining certain terms; providing for the rate and measure of tax; prohibiting certain credits against tax; providing for the dedication of tax proceeds; establishing the Crossed County Transmission Line Fund; establishing the All Counties Municipalities Transmission Line Revenue Fund; providing for the distribution of tax proceeds to local governmental units; specifying establishment of accounts and for local governmental units' expenditure of funds for limited purposes; authorizing the Tax Commissioner to promulgate rules; requiring reports to the Legislature; requiring additional notice to certain property owners impacted by transmission line construction; providing for severability; providing criteria for a certificate of public convenience and necessity for the construction of certain high voltage transmission lines.

Be it enacted by the Legislature of West Virginia:
That §11-13-2 of the Code of West Virginia, 1931, as amended, be amended an reenacted; that said code by adding thereto a new section, designated §11-13-2q; and that §24-2-11a of said code be amended and reenacted, all to read as follows:
CHAPTER ELEVEN. TAXATION.
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
§11-13-2. Imposition of privilege tax.
(a) Imposition of tax. -- There is hereby levied and shall be collected annual privilege taxes against the persons, on account of their business and other activities, and in the amount to be determined by the application of rates against the measures of tax as set forth in sections two-d, two-e, two-f, two-m, two-n, ~~and~~ two-o, and two-q of this article.
(b) If any person liable for any tax under section two-m shall ship or transport his products or any part thereof out of the state without making sale of such products, the value of the products in the condition or form in which they exist immediately before transportation out of the state shall be the basis for the assessment of the tax imposed in the applicable section, except in those instances in which another measure of the tax is expressly provided. The Tax Commissioner shall prescribe equitable and uniform rules for ascertaining the value.
(c) In determining value, however, as regards sales from one to another of affiliated companies or persons, or under other circumstances where the relation between the buyer and seller is such that the gross proceeds from the sale are not indicative of the true value of the subject matter of the sale, the Tax Commissioner shall prescribe uniform and equitable rules for determining the value upon which the applicable privilege tax shall be levied, corresponding as nearly as possible to the gross proceeds from the sale of similar products of like quality or character where no common interest exists between the buyer and seller but the circumstances and conditions are otherwise similar.

§11-13-2q. Legislative findings; business of transmission of electricity through certain electric transmission lines; rate and measure of tax; definitions; credits not allowed against tax; emergency rule authorized; severability.

(a) Legislative findings. --
(1) The Federal Energy Regulatory Commission has authorized the formation of Regional Transmission Organizations and Independent System Operators for the purposes of promoting competition in wholesale electricity markets and exercising independent functional control of the interconnected regional electric transmission systems necessary to deliver electricity from electric generating plants to the distribution systems of electric load serving entities.
(2) Pursuant to authorization by the Federal Energy Regulatory Commission, Regional Transmission Organizations and Independent System Operators operate competitive wholesale electricity markets and functionally control the transmission of electricity across wide geographic regions, matching generation to the load instantaneously to keep supply and demand of electricity in balance and to assure that sufficient generation is available in case demand rises or a power plant or transmission line is out of service.
(3) Regional Transmission Organizations and Independent System Operators also provide nondiscriminatory transmission access, which facilitates competition among wholesale suppliers.
(4) Regional Transmission Organizations and Independent System Operators are authorized by the Federal Energy Regulatory Commission to require the construction or modification of electric transmission lines and other transmission facilities to assure the reliability of the interconnected regional transmission systems and to reduce economic congestion in the transmission of electricity.
(5) While the construction of long distance, extra-high voltage electric transmission lines as required by Regional Transmission Organizations and Independent System Operators promotes the purposes for which such entities were created and serves a public purpose, the siting, construction, operation and maintenance of long distance, extra-high voltage electric transmission lines places significant additional burdens on the state, local governments and their citizens, affects public and private land use, increases electric rates and impacts aesthetic and recreational values important to the state, local governments and their citizens.
(6) Accordingly, the imposition of a privilege tax on the transmission of electricity through an electric transmission line that: (A) Was constructed by a public utility, person or corporation in West Virginia at the direction of a Regional Transmission Organization or Independent System Operator pursuant to authority granted by the Federal Energy Regulatory Commission; (B) has a voltage carrying capacity of at least four hundred fifty kilovolts; and (C) Was designed and constructed to transmit electricity over a total distance of at least fifty miles within this state whether interconnected with one or more electric substations located either within this state or outside of this state, serves a legitimate public purpose.
(b) Definitions. -- For purposes of this section:
(1) "County infrastructure project" means any project of a public nature that is intended to foster and enhance the basic physical and organizational structures needed for the operation of a county including, but not limited to, roads, streets, parks and recreational facilities, bridges, buildings, curbs, sidewalks, water supply, sewers, electric lines and telecommunications.
(2) "Kilovolt" means one thousand volts;
(3) "Long distance, extra-high voltage electric transmission line" means a series of towers, wires, electrical substations and other transmission-related equipment that: (A) Was constructed by a public utility, person or corporation in West Virginia at the direction of a Regional Transmission Organization or Independent System Operator pursuant to authority granted by the Federal Energy Regulatory Commission; (B) has a voltage carrying capacity of at least four hundred fifty kilovolts; and (C) was designed and constructed to transmit electricity over a total distance of at least fifty miles within this state whether interconnected with one or more electric substations located either within this state or outside of this state;
(4) "Transmission of electricity" means the act or process of causing electricity to pass or be conveyed from one place or geographical location to another place or geographical location through an electric transmission line; and
(5) "Voltage carrying capacity" means the rated voltage capacity of an electric transmission line expressed in kilovolts. For the purpose of computing the tax imposed by subsection (C) of this section, the voltage carrying capacity of any long distance, extra-high voltage electric transmission line shall be set an amount equal to five hundred kilovolts.
(c) Imposition of tax. -- For the privilege of engaging or continuing within this state in the business of the transmission of electricity through one or more long distance, extra-high voltage electric transmission lines, for sale, profit or commercial use, there is hereby levied and shall be collected from every public utility, person or corporation exercising such privilege an annual tax.
(d) Rate and measure of tax. -- The tax imposed in subsection (c) of this section shall be computed by multiplying the number of miles of long distance, extra-high voltage electric transmission lines in service in West Virginia during the tax year by an amount equal to the product of the tax rate of $750 per mile multiplied by the voltage carrying capacity of the long distance, extra-high voltage electric transmission line.
(e) Credits not allowed against tax. -- When determining the amount of tax due under this section, no credit shall be allowed under any provision of this code unless it is expressly provided that the credit applies to the tax on the privilege of operating a long distance, extra-high voltage electric transmission line.
(f) Dedication of taxes collected. -- Effective July 1, 2009:
(1) One-third of the net proceeds of the tax imposed in subsection (c) of this section is hereby dedicated for the use and benefit of counties crossed or containing long distance, extra-high voltage electric transmission lines. The proceeds of this dedicated tax shall be distributed by the State Treasurer in the manner specified in this section to the various counties crossed or containing long distance, extra-high voltage electric transmission lines;
(2) One-third of the net proceeds of the tax imposed in subsection (c) of this section shall be dedicated for the use and benefit of the West Virginia Infrastructure and Jobs Development Council. The proceeds of this dedicated tax shall be deposited in the West Virginia Infrastructure Fund, as established in section nine, article fifteen-a, chapter thirty-one of this code, for the purpose of funding infrastructure projects, as that term is defined in section two, article fifteen-a, chapter thirty-one of this code; and
(3) One-third of the net proceeds of the tax imposed in subsection (c) of this section is hereby dedicated for the use and benefit of counties and municipalities in this state. The proceeds of this dedicated tax shall be distributed by the State Treasurer in the manner specified in subsection (j).
(g) Creation of fund. -- There is hereby created in the State Treasury a special fund entitled the "Crossed County Transmission Line Fund." The fund shall consist of the portion of the tax proceeds collected by the Tax Commissioner that is dedicated for the use and benefit of counties containing or crossed by long distance, extra-high voltage electric transmission lines pursuant to subsection (f) paragraph (2) of this section. The Tax Commissioner shall deposit moneys into the fund, from time to time, as such proceeds are received.
(h) Distribution of moneys in the Crossed County Transmission Line Fund; use of funds by counties; special budgets required. --
(1) Moneys in the Crossed County Transmission Line Fund shall be distributed by the State Treasurer annually to counties containing or crossed by long distance, extra-high voltage electric transmission lines. The distribution to each county shall be based on the proportion of the total miles of long distance, extra-high voltage electric transmission lines located within each county to the total miles of long distance, extra-high voltage electric transmission lines located within the state. Moneys distributed to a county pursuant to this section shall be deposited in the county general fund or a special fund established by the county for the receipt of such moneys and may be expended as follows:
(A) On or before March 28, 2010, and each March 28 thereafter, each county commission or other governing body of the county receiving moneys pursuant to this section shall submit to the State Auditor, on a form provided by the State Auditor, a special budget detailing how the moneys are to be spent by the county in a fiscal year.
(B) The State Auditor shall approve or disapprove, in whole or in part, a special budget within thirty days of his or her receipt thereof. The State Auditor shall approve of a special budget if he or she determines that any expenditures set forth therein are for county infrastructure projects. Any portion of a special budget not approved by the State Auditor may be resubmitted for approval. Failure of the State Auditor to approve or disapprove the special budget within thirty days results in the budget being deemed approved by the State Auditor.
(C) A county may not expend moneys received pursuant to this section for any purpose that was not approved by the State Auditor in accordance with this section.
(D) A county may, on its own initiative, submit amendments to its special budget for a fiscal year. The State Auditor shall approve of an amendment to a county's special budget if he or she determines that any expenditures set forth therein are for county infrastructure projects.
(E) Any moneys distributed to a county pursuant to this section that remain in a county's general fund or special fund established in accordance with this subsection at the close of a fiscal year shall remain in the general Fund or special fund and may not be appropriated for any purpose that was not approved by the State Auditor in accordance with this section.
(F) The balance of any unexpended moneys distributed to a county pursuant to this section may be included within a county's special budget for a subsequent fiscal year.
(2) The Office of Chief Inspector shall annually determine whether the distributions of funds from the Crossed County Transmission Line Fund are in compliance with the requirements of this section.
(i) Creation of fund. In order to provide a procedure for the distribution of the remaining one third of the net proceeds of the additional tax to all counties and municipalities of the state, the special fund known as the "all counties and municipalities transmission line revenue fund" is hereby created. The fund shall consist of the portion of the tax proceeds collected by the Tax Commissioner that is dedicated for the use and benefit of all counties and municipalities in the state as provided in subsection (f) paragraph (3) of this section.
(j) Distribution of moneys in the All Counties and Municipalities Counties and Municipalities Transmission Line Revenue Fund . -- (1) The net proceeds allocated in this subsection shall be deposited in the all counties and municipalities transmission line revenue fund, from time to time, as the proceeds are received by the Tax Commissioner. The moneys in the funds shall be distributed to the respective counties and municipalities entitled to the moneys in the manner set forth in subdivision (2) of this section.
(2) The moneys in the all counties and municipalities transmission line revenue fund shall be allocated among and distributed quarterly to the counties and municipalities entitled to the moneys by the State Treasurer in the manner specified in this section. On or before each distribution date, the State Treasurer shall determine the total amount of moneys in each fund which will be available for distribution to the respective counties and municipalities entitled to the moneys on that distribution date. The amount to which every county and municipality is entitled from the all counties and municipalities utility revenue fund shall be determined in accordance with subdivision (3) of this subsection. After determining the amount each county and municipality is entitled to receive from the respective fund or funds, a warrant of the State Auditor for the sum due to each county or municipality shall issue and a check drawn thereon making payment of such amount shall thereafter be distributed to each such county or municipality.
(3) The amount to which each county and municipality is entitled from the all counties and municipalities transmission line revenue fund shall be determined in accordance with the provisions of this subsection. For purposes of this subsection "population" means the population as determined by the most recent decennial census taken under the authority of the United States:
(A) The State Treasurer shall first apportion the total amount of moneys available in the all counties and municipalities utility revenue fund by multiplying the total amount in the fund by the percentage which the population of each county bears to the total population of the state. The amount thus apportioned for each county is the county's "base share".
(B) Each county's base share shall then be subdivided into two portions. One portion is determined by multiplying the base share by that percentage which the total population of all unincorporated areas within the county bears to the total population of the county, and the other portion is determined by multiplying the base share by that percentage which the total population of all municipalities within the county bears to the total population of the county. The former portion shall be paid to the county and the latter portion is the "municipalities' portion" of the county's base share. The percentage of the latter portion to which each municipality in the county is entitled shall be determined by multiplying the total of the latter portion by the percentage which the population of each municipality within the county bears to the total population of all municipalities within the county.
(C) All counties and municipalities shall create a "infrastructure construction revenue fund" which shall be the depository for moneys distributed to any county or municipality under the provisions of this section, from either or both special funds. Moneys in the infrastructure construction revenue fund, in compliance with subsection (h) of this section, may be expended by the county commission or governing body of the municipality for infrastructure projects as defined in subsection (b) of this section as the best interest of the people of the respective county and municipality: Provided, That the infrastructure construction revenue fund moneys shall not be budgeted for personal services in an amount to exceed one fourth of the total funds available in such fund.
(j) Emergency rule authorized, proration, allocation. -- The Tax Commissioner may promulgate an emergency rule as provided in article three, chapter twenty-nine-a of this code that clarifies, explains or implements the provisions of this section and that equitably prorates taxes for a taxable year in which a long distance, extra-high voltage electric transmission line is first placed in service or retired, or in which a taxpayer acquires or transfers an interest in a long distance, extra-high voltage electric transmission line, or that equitably allocates taxes among multiple taxpayers with interests in a long distance, extra-high voltage electric transmission line, it being the intent of the Legislature to prohibit multiple taxation of the same taxable transmission capacity.
(k) On or before December 15, 2010, and each December 15 thereafter, the Tax Commissioner shall deliver to the Clerk of the Senate and the Clerk of the House of Delegates a consolidated report of the special budgets submitted to the Tax Commissioner in accordance with this section for all county commissions, municipalities or other governing bodies as of July 15 of the current year.
(l) Severability. -- If any provision of this section or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the section which can be given effect without the invalid provision or its application, and to this end the provisions of this section are declared to be severable.
CHAPTER 24. PUBLIC SERVICE COMMISSION.
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.

§24-2-11a. Requirement for certificate of public convenience and necessity before beginning construction of high voltage transmission lines; contents of application; notice; hearing; criteria for granting or denying certificate; regulations.

(a) No public utility, person or corporation shall begin construction of a high voltage transmission line of two hundred thousand volts or over, which line is not an ordinary extension of an existing system in the usual course of business as defined by the Public Service Commission, unless and until it or he or she shall have obtained from the Public Service Commission a certificate of public convenience and necessity approving the construction and proposed location of such transmission line.
(b) The application for such certificate shall be in such form as the commission may prescribe and shall contain:
(1) A description, in such detail as the commission may prescribe, of the location and type of line facilities which the applicant proposes to construct;
(2) A statement justifying the need for such facilities. If the applicant seeks a certificate of public convenience and necessity for a high voltage transmission line of four hundred fifty thousand volts or over, the applicant must demonstrate that it has studied the economic and technical feasibility of retensioning, double-circuiting or reconductoring existing transmission lines and, in light of that study, has determined that the proposed transmission line is required;
(3) A statement of the environmental impact of such line facilities; and
(4) Such other information as the applicant may deem relevant or the commission may require.
(c) Upon the filing of such application, the applicant shall make a good faith effort to provide either by personal service or by certified mail, notice to each and every property owner whose property lies within one-quarter mile of the center line of the proposed property line, and, shall publish, in such form as the commission shall direct, as a Class II legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, the publication area for such publication to be each county in which any portion of the proposed transmission line is to be constructed, a notice of the filing of such application and that the commission may approve the same unless within fifteen days after completion of publication a written request for a hearing thereon has been received by the commission from a person or persons alleging that the proposed transmission line or its location is against the public interest. If such request be timely received, the commission shall set the matter for hearing on a date within sixty days from completion of said publication, and shall require the applicant to publish notice of the time and place of hearing in the same manner as is herein required for the publication of notice of the filing of the application.
(d) Within sixty days after the filing of said application, or if hearing shall be held thereon, within ninety days after final submission on oral argument or brief, the commission may approve the application if it shall find and determine that: ~~the proposed transmission line~~
(1) The proposed transmission line will economically, adequately and reliably contribute to meeting the present and anticipated requirements for electric power of the customers served by the applicant or is necessary and desirable for present and anticipated reliability of service for electric power for its service area or region; ~~and~~
(2) Retensioning, double-circuiting or reconductoring existing transmission lines is not technically or economically feasible to meet the present and anticipated requirements for electric power of the customers served by the applicant or to provide present and anticipated reliability of service for electric power for its service area or region; and
~~(2)~~ (3) The proposed transmission line will result in an acceptable balance between reasonable power needs and reasonable environmental factors.
(e) The commission may impose conditions upon its approval of the application, or modify the applicant's proposal, to achieve an acceptable balance between reasonable power needs and reasonable environmental factors.
(f) The provisions of this section shall not apply to the construction of line facilities which will be part of a transmission line for which any right-of-way has been acquired prior to January 1, 1973.
(g) The commission shall prescribe such rules and regulations as it may deem proper for the administration and enforcement of the provisions of this section, which rules and regulations shall be promulgated in accordance with the applicable provisions of chapter twenty-nine-a of this code as if the same were set forth herein in extenso.
(h) Notwithstanding any other provision of the law to the contrary, the commission shall determine, in its discretion, which transmission line or lines crossing above the Ohio River must be marked to be made visible to airborne traffic flying in any area where such lines exist, and shall, within one hundred twenty days of the effective date of this section, promulgate rules requiring that all public utilities or persons who install or maintain such lines make the necessary markings.

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