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ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 280
(Senators McCabe, Bailey, Foster and Plymale, original sponsors)
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[Passed March 8, 2008; in effect ninety days from passage.]
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AN ACT to amend and reenact §8-38-3, §8-38-5, §8-38-7, §8-38-12 and
§8-38-16 of the Code of West Virginia, 1931, as amended, all
relating to the Municipal Economic Opportunity Development
District Act generally; adding certain remediation projects to
those for which special district excise taxes may be
authorized upon meeting certain requirements; clarifying the
rates of the tax; authorizing the Tax Commissioner to require
the electronic filing of returns and electronic payment of the
tax; providing for the sharing of tax information and
confidentiality of such information; and requiring additional
deposits of the tax into the general revenue fund in certain
circumstances.
Be it enacted by the Legislature of West Virginia:
That §8-38-3, §8-38-5, §8-38-7, §8-38-12 and §8-38-16 of the Code of West Virginia, 1931, as amended, be amended and reenacted,
all to read as follows:
ARTICLE 38. MUNICIPAL ECONOMIC OPPORTUNITY DEVELOPMENT DISTRICTS.
§8-38-3. Definitions.
For purposes of this article, the term:
(1) "Development expenditures" means payments for governmental
functions, programs, activities, facility construction,
improvements and other goods and services which a district board is
authorized to perform or provide under section five of this
article;
(2) "District" means an economic opportunity development
district created pursuant to this article;
(3) "District board" means a district board created pursuant
to section ten of this article;
(4) "Eligible property" means any taxable or exempt real
property located in a district established pursuant to this
article;
(5) "Municipality" is a word of art and shall mean, for the
purposes of this article, only Class I and Class II cities as
classified in section three, article one of this chapter;
(6) "Remediation" means measures undertaken to bring about the
reconditioning or restoration of property located within the
boundaries of an economic opportunity development district project
that has been affected by exploration, industrial operations or solid waste disposal and which measures, when undertaken, will
eliminate or ameliorate the existing state of the property and
enable the property to be commercially developed.
§8-38-5. Development expenditures.
Any municipality that has established an economic opportunity
development district under this article may make, or authorize to
be made by a district board and other public or private parties,
development expenditures as will promote the economic vitality of
the district and the general welfare of the municipality,
including, but not limited to, expenditures for the following
purposes:
(1) Beautification of the district by means such as
landscaping and construction and erection of fountains, shelters,
benches, sculptures, signs, lighting, decorations and similar
amenities;
(2) Provision of special or additional public services such as
sanitation, security for persons and property and the construction
and maintenance of public facilities, including, but not limited
to, sidewalks, parking lots, parking garages and other public
areas;
(3) Making payments for principal, interest, issuance costs,
any of the costs described in section twenty of this article and
appropriate reserves for bonds and other instruments and
arrangements issued or entered into by the municipality for financing the expenditures of the district described in this
section and to otherwise implement the purposes of this article;
(4) Providing financial support for public transportation and
vehicle parking facilities open to the general public, whether
physically situate within the district's boundaries or on adjacent
land;
(5) Acquiring, building, demolishing, razing, constructing,
repairing, reconstructing, refurbishing, renovating,
rehabilitating, expanding, altering, otherwise developing,
operating and maintaining real property generally, parking
facilities, commercial structures and other capital improvements to
real property, fixtures and tangible personal property, whether or
not physically situate within the district's boundaries: Provided,
That the expenditure directly benefits the district;
(6) Developing plans for the architectural design of the
district and portions thereof and developing plans and programs for
the future development of the district;
(7) Developing, promoting and supporting community events and
activities open to the general public that benefit the district;
(8) Providing the administrative costs for a district
management program;
(9) Providing for the usual and customary maintenance and
upkeep of all improvements and amenities in the district as are
commercially reasonable and necessary to sustain its economic viability on a permanent basis;
(10) Providing any other services that the municipality or
district board is authorized to perform and which the municipality
does not also perform to the same extent on a countywide basis;
(11) Making grants to the owners or tenants of economic
opportunity development district for the purposes described in this
section;
(12) Acquiring an interest in any entity or entities that own
any portion of the real property situate in the district and
contributing capital to any entity or entities;
(13) Remediation of publicly or privately owned landfills,
solid waste facilities or hazardous waste sites to facilitate
commercial development which would not otherwise be economically
feasible; and
(14) To do any and all things necessary, desirable or
appropriate to carry out and accomplish the purposes of this
article notwithstanding any provision of this code to the contrary.
§8-38-7. Application to development office for community and
economic development for approval of an economic
opportunity development district project.
(a) General. -- The development office shall receive and act
on applications filed with it by municipalities pursuant to section
six of this article. Each application must include:
(1) A true copy of the notice described in section six of this article;
(2) The total cost of the project;
(3) A reasonable estimate of the number of months needed to
complete the project;
(4) A general description of the capital improvements,
additional or extended services and other proposed development
expenditures to be made in the district as part of the project;
(5) A description of the proposed method of financing the
development expenditures, together with a description of the
reserves to be established for financing ongoing development or
redevelopment expenditures necessary to permanently maintain the
optimum economic viability of the district following its inception:
Provided, That the amounts of the reserves shall not exceed the
amounts that would be required by ordinary commercial capital
market considerations;
(6) A description of the sources and anticipated amounts of
all financing, including, but not limited to, proceeds from the
issuance of any bonds or other instruments, revenues from the
special district excise tax and enhanced revenues from property
taxes and fees;
(7) A description of the financial contribution of the
municipality to the funding of development expenditures;
(8) Identification of any businesses that the municipality
expects to relocate their business locations from the district to another place in the state in connection with the establishment of
the district or from another place in this state to the district:
Provided, That for purposes of this article, any entities shall be
designated "relocated entities";
(9) Identification of any businesses currently conducting
business in the proposed economic opportunity development district
that the municipality expects to continue doing business there
after the district is created;
(10) A good faith estimate of the aggregate amount of
consumers sales and service tax that was actually remitted to the
Tax Commissioner by all business locations identified as provided
in subdivisions (8) and (9) of this subsection with respect to
their sales made and services rendered from their then current
business locations that will be relocated from, or to, or remain in
the district for the twelve full calendar months next preceding the
date of the application: Provided, That for purposes of this
article, the aggregate amount is designated as "the base tax
revenue amount";
(11) A good faith estimate of the gross annual district tax
revenue amount;
(12) The proposed application of any surplus from all funding
sources to further the objectives of this article;
(13) The Tax Commissioner's certification of: (i) The amount
of consumers sales and service taxes collected from businesses located in the economic opportunity district during the twelve
calendar months preceding the calendar quarter during which the
application will be submitted to the development office; (ii) the
estimated amount of economic opportunity district excise tax that
will be collected during the first twelve months after the month in
which the Tax Commissioner would first begin to collect that tax;
and (iii) the estimated amount of economic opportunity district
excise tax that will be collected during the first thirty-six
months after the month in which the Tax Commissioner would first
begin to collect that tax; and
(14) Any additional information the development office may
require.
(b) Review of applications. -- The development office shall
review all project proposals for conformance to statutory and
regulatory requirements, the reasonableness of the project's budget
and timetable for completion and the following criteria:
(1) The quality of the proposed project and how it addresses
economic problems in the area in which the project will be located;
(2) The merits of the project determined by a cost-benefit
analysis that incorporates all costs and benefits, both public and
private;
(3) Whether the project is supported by significant private
sector investment and substantial credible evidence that, but for
the existence of sales tax increment financing, the project would not be feasible;
(4) Whether the economic opportunity development district
excise tax dollars will leverage or be the catalyst for the
effective use of private, other local government, state or federal
funding that is available;
(5) Whether there is substantial and credible evidence that
the project is likely to be started and completed in a timely
fashion;
(6) Whether the project will, directly or indirectly, improve
the opportunities in the area where the project will be located for
the successful establishment or expansion of other industrial or
commercial businesses;
(7) Whether the project will, directly or indirectly, assist
in the creation of additional long-term employment opportunities in
the area and the quality of jobs created in all phases of the
project, to include, but not be limited to, wages and benefits;
(8) Whether the project will fulfill a pressing need for the
area, or part of the area, in which the economic opportunity
district is located;
(9) Whether the municipality has a strategy for economic
development in the municipality and whether the project is
consistent with that strategy;
(10) Whether the project helps to diversify the local economy;
(11) Whether the project is consistent with the goals of this article;
(12) Whether the project is economically and fiscally sound
using recognized business standards of finance and accounting; and
(13)(A) The ability of the municipality and the project
developer or project team to carry out the project: Provided, That
no project may be approved by the development office unless the
amount of all development expenditures proposed to be made in the
first twenty-four months following the creation of the district
results in capital investment of more than fifty million dollars in
the district and the municipality submits clear and convincing
information, to the satisfaction of the development office, that
such investment will be made if the development office approves the
project and the Legislature authorizes the municipality to levy an
excise tax on sales of goods and services made within the economic
opportunity development district as provided in this article.
(B) Notwithstanding any provision of paragraph (A) of this
subdivision to the contrary, no project involving remediation may
be approved by the development office unless the amount of all
development expenditures proposed to be made in the first forty-
eight months following the creation of the district results in
capital investment of more than fifty million dollars in the
district. In addition to the remaining provisions of paragraph (A)
of this subdivision the development office may not approve a
project involving remediation authorized under section five of this article unless the municipality submits clear and convincing
information, to the satisfaction of the development office, that
the proposed remediation expenditures to be financed by the
issuance of bonds or notes pursuant to section sixteen of this
article do not constitute more than twenty-five percent of the
total redevelopment expenditures associated with the project.
(c) Additional criteria. -- The development office may
establish other criteria for consideration when approving the
applications.
(d) Action on the application. -- The Executive Director of
the Development Office shall act to approve or not approve any
application within thirty days following the receipt of the
application or the receipt of any additional information requested
by the development office, whichever is the later.
(e) Certification of project. -- If the Executive Director of
the Development Office approves a municipality's economic
opportunity district project application, he or she shall issue to
the municipality a written certificate evidencing the approval.
The certificate shall expressly state a base tax revenue
amount, the gross annual district tax revenue amount and the
estimated net annual district tax revenue amount which, for
purposes of this article, is the difference between the gross
annual district tax revenue amount and the base tax revenue amount,
all of which the development office has determined with respect to the district's application based on any investigation it considers
reasonable and necessary, including, but not limited to, any
relevant information the development office requests from the Tax
Commissioner and the Tax Commissioner provides to the development
office: Provided, That in determining the net annual district tax
revenue amount, the development office may not use a base tax
revenue amount less than that amount certified by the Tax
Commissioner but, in lieu of confirmation from the Tax Commissioner
of the gross annual district tax revenue amount, the development
office may use the estimate of the gross annual district tax
revenue amount provided by the municipality pursuant to subsection
(a) of this section.
(f) Certification of enlargement of geographic boundaries of
previously certified district. -- If the Executive Director of the
Development Office approves a municipality's economic opportunity
district project application to expand the geographic boundaries of
a previously certified district, he or she shall issue to the
municipality a written certificate evidencing the approval.
The certificate shall expressly state a base tax revenue
amount, the gross annual district tax revenue amount and the
estimated net annual district tax revenue amount which, for
purposes of this article, is the difference between the gross
annual district tax revenue amount and the base tax revenue amount,
all of which the development office has determined with respect to the district's application based on any investigation it considers
reasonable and necessary, including, but not limited to, any
relevant information the development office requests from the Tax
Commissioner and the Tax Commissioner provides to the development
office: Provided, That in determining the net annual district tax
revenue amount, the development office may not use a base tax
revenue amount less than that amount certified by the Tax
Commissioner, but, in lieu of confirmation from the Tax
Commissioner of the gross annual district tax revenue amount, the
development office may use the estimate of the gross annual
district tax revenue amount provided by the municipality pursuant
to subsection (a) of this section.
(g) Promulgation of rules. -- The executive director of the
development office may promulgate rules to implement the economic
opportunity development district project application approval
process and to describe the criteria and procedures it has
established in connection therewith. These rules are not subject
to the provisions of chapter twenty-nine-a of this code but shall
be filed with the Secretary of State.
§8-38-12. Special district excise tax authorized.
(a) General. -- The council of a municipality, authorized by
the Legislature to levy a special district excise tax for the
benefit of an economic opportunity development district, may, by
ordinance, impose that tax on the privilege of selling tangible personal property and rendering select services in the district in
accordance with this section.
(b) Tax base. -- The base of a special district excise tax
imposed pursuant to this section shall be identical to the base of
the consumers sales and service tax imposed pursuant to article
fifteen, chapter eleven of this code on sales made and services
rendered within the boundaries of the district. Sales of gasoline
and special fuel are not subject to special district excise tax,
but remain subject to the tax levied by article fifteen, chapter
eleven of this code. Except for the exemption provided in section
nine-f of article fifteen, chapter eleven of this code, all
exemptions and exceptions from the consumers sales and service tax
shall also apply to the special district excise tax.
(c) Tax rate. -- The rate or rates of a special district
excise tax levied pursuant to this section shall be stated in an
ordinance enacted by the municipality and identical to the rate or
rates of the consumers sales and service tax imposed pursuant to
article fifteen, chapter eleven of this code on sales rendered
within the boundaries of the district authorized by this section.
(d) Collection by Tax Commissioner. -- The ordinance of the
municipality imposing a special district excise tax shall provide
for the tax to be collected by the Tax Commissioner in the same
manner as the tax levied by section three, article fifteen, chapter
eleven of this code is administered, assessed, collected and enforced.
(1) The State Tax Commissioner may require the electronic
filing of returns related to the special district excise tax
imposed pursuant to this section and may require the electronic
payment of the special district excise tax imposed pursuant to this
section. The State Tax Commissioner may prescribe by rules
promulgated pursuant to article three, chapter twenty-nine-a of
this code, administrative notices, and forms and instructions, the
procedures and criteria to be followed to electronically file such
returns and to electronically pay the special district excise tax
imposed pursuant to this section.
(2) Any rules filed by the State Tax Commissioner relating to
the special district excise tax imposed pursuant to this section
shall set forth the following:
(A) Acceptable indicia of timely payment;
(B) Which type of electronic filing method or methods a
particular type of taxpayer may or may not use;
(C) What type of electronic payment method or methods a
particular type of taxpayer may or may not use;
(D) What, if any, exceptions are allowable and alternative
methods of payment that may be used for any exceptions;
(E) Procedures for making voluntary or mandatory electronic
payments or both;
(F) Any other provisions necessary to ensure the timely electronic filing of returns related to the special district excise
tax and the making of payments electronically of the special
district excise tax imposed pursuant to this section.
(3) (A) Notwithstanding the provisions of section five-d,
article ten, chapter eleven of this code: (i) So long as bonds are
outstanding pursuant to this article, the Tax Commissioner shall
provide on a monthly basis to the trustee for bonds issued pursuant
to this article information on returns submitted pursuant to this
article; and (ii) the trustee may share the information so obtained
with the county commission that established the economic
opportunity development district that issued the bonds pursuant to
this article and with the bondholders and with bond counsel for
bonds issued pursuant to this article. The Tax Commissioner and
the trustee may enter into a written agreement in order to
accomplish such exchange of information.
(B) Any confidential information provided pursuant to this
subdivision shall be used solely for the protection and enforcement
of the rights and remedies of the bondholders of bonds issued
pursuant to this article. Any person or entity that is in
possession of information disclosed by the Tax Commissioner or
shared by the trustee pursuant to subdivision (a) of this
subsection is subject to the provisions of section five-d, article
ten, chapter eleven of this code as if such person or entity that
is in possession of such tax information is an officer, employee, agent or representative of this state or of a local or municipal
governmental entity or other governmental subdivision.
(e) Deposit of net tax collected. --
(1) The ordinance of the municipality imposing a special
district excise tax shall provide that the Tax Commissioner deposit
the net amount of tax collected in the special Economic Opportunity
Development District Fund to the credit of the municipality's
subaccount therein for the economic opportunity development
district and that the money in the subaccount may only be used to
pay for development expenditures as provided in this article except
as provided in subsection (f) of this section.
(2)(A) The State Treasurer shall withhold from the
municipality's subaccount in the Economic Opportunity Development
District Fund and shall deposit in the General Revenue Fund of this
state, on or before the twentieth day of each calendar month next
following the effective date of a special district excise tax, a
sum equal to one twelfth of the base tax revenue amount last
certified by the development office pursuant to section seven of
this article.
(B) In addition to the amounts described in paragraph (A) of
this subdivision, the Tax Commissioner shall deposit in the General
Revenue Fund of this state on the dates specified in paragraph (A)
not less than twenty percent nor more than fifty percent of the
excess of the special district excise taxes collected during the preceding month above one twelfth of the base tax revenue, said
percentage to be fixed by the development office in conjunction
with its approval of an application in accordance with section
seven of this article based on the amount of state funds, if any,
to be expended in conjunction with the respective economic
opportunity development district project for items including, but
not limited to, the acquisition, construction, reconstruction,
improvement, enlargement or extension of roadways, rights-of-way,
sidewalks, traffic signals, water or sewer lines and other public
infrastructure and such other expenditures of state funds
identified by the development office.
(f) Effective date of special district excise tax. -- Any
taxes imposed pursuant to the authority of this section shall be
effective on the first day of the calendar month that begins at
least sixty days after the date of enactment of the ordinance
imposing the tax or at any later date expressly designated in the
ordinance that begins on the first day of a calendar month.
(g) Copies of ordinance. -- Upon enactment of an ordinance
levying a special district excise tax, a certified copy of the
ordinance shall be mailed to the State Auditor, as ex officio the
chief inspector and supervisor of public offices, the State
Treasurer and the Tax Commissioner.
§8-38-16. Bonds issued to finance economic opportunity development
district projects.
(a) General. -- The municipality that established the economic
opportunity development district may issue bonds or notes for the
purpose of financing development expenditures, as described in
section five of this article, with respect to one or more projects
within the economic opportunity development district.
(b) Limited obligations. -- All bonds and notes issued by a
municipality under the authority of this article are limited
obligations of the municipality.
(c) Term of obligations. -- No municipality may issue notes,
bonds or other instruments for funding district projects or
improvements that exceed a repayment schedule of thirty years:
Provided, That the maximum repayment schedule of bonds issued to
finance remediation authorized under section five of this article
may not exceed twenty years.
(d) Debt service. -- The principal and interest on the bonds
shall be payable out of the funds on deposit in the subaccount
established for the economic opportunity development district
pursuant to section eight of this article, including, without
limitation, any funds derived from the special district excise tax
imposed by section twelve of this article or other revenues derived
from the economic opportunity development district to the extent
pledged for the purpose by the municipality in the resolution
authorizing the bonds.
(e) Surplus funds. -- To the extent that the average daily amount on deposit in the subaccount established for a district
pursuant to section eight of this article exceeds, for more than
six consecutive calendar months, the sum of: (1) One hundred
thousand dollars; plus (2) the amount required to be kept on
deposit pursuant to the documents authorizing, securing or
otherwise relating to the bonds or notes issued under this section,
then the excess shall be used by the district either to redeem the
bonds or notes previously issued or remitted to the general fund of
this state.
(f) Debt not general obligation of municipality. -- Neither
the notes or bonds and any interest coupons issued under the
authority of this article shall ever constitute an indebtedness of
the municipality issuing the notes or bonds within the meaning of
any constitutional provision or statutory limitation and shall
never constitute or give rise to a pecuniary liability of the
municipality issuing the notes or bonds.
(g) Debt not a charge general credit or taxing powers of
municipality. -- Neither the bonds or notes, nor interest thereon,
is a charge against the general credit or taxing powers of the
municipality and that fact shall be plainly stated on the face of
each bond or note.
(h) Issuance of bonds or notes. --
(1) Bonds or notes allowed under this section may be executed,
issued and delivered at any time and, from time to time, may be in a form and denomination, may be of a tenor, must be negotiable but
may be registered as to the principal thereof or as to the
principal and interest thereof, may be payable in any amounts and
at any time or times, may be payable at any place or places, may
bear interest at any rate or rates payable at any place or places
and evidenced in any manner and may contain any provisions therein
not inconsistent herewith, all as provided in the ordinance of the
municipality whereunder the bonds or notes are authorized to be
issued.
(2) The bonds may be sold by the municipality at public or
private sale at, above or below par as the municipality authorizes.
(3) Bonds and notes issued pursuant to this article shall be
signed by the authorized representative of the municipality and
attested by the municipal recorder and be under the seal of the
municipality.
(4) Any coupons attached to the bonds shall bear the facsimile
signature of the authorized representative of the municipality. In
case any of the officials whose signatures appear on the bonds,
notes or coupons cease to be officers before the delivery of the
bonds or notes, their signatures shall, nevertheless, be valid and
sufficient for all purposes to the same extent as if they had
remained in office until the delivery.
(i) Additional bonds or notes. -- If the proceeds of the bonds
or notes, by error of calculation or otherwise, are less than the cost of the economic opportunity development district project, or
if additional real or personal property is to be added to the
district project or if it is determined that financing is needed
for additional development or redevelopment expenditures,
additional bonds or notes may, in like manner, be issued to provide
the amount of the deficiency or to defray the cost of acquiring or
financing any additional real or personal property or development
or redevelopment expenditures and, unless otherwise provided in the
trust agreement, mortgage or deed of trust, are considered to be of
the same issue and shall be entitled to payment from the same fund,
without preference or priority, and shall be of equal priority as
to any security.