Senate Bill No. 537
(By Senators Oliverio and Prezioso)
____________
[Introduced February 15, 1999;
referred to the Committee on Finance.]
____________
A BILL to amend chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article six-h, relating to
providing an alternative valuation for ad valorem taxation
for certain property within a municipality that is
revitalized.
Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article six-h, to read
as follows:
ARTICLE 6H. SPECIAL METHOD FOR APPRAISING CERTIFIED REVITALIZED
PROPERTY.
§11-6H-1. Legislative findings.
The Legislature finds that the encouragement of economic
growth and development in this state is in the public interest
and promotes the general welfare of the people of this state.
The Legislature further finds that the ad valorem property tax
valuation set forth in this article for certified revitalized
property, as defined in section two of this article, will help
preserve the tax base and preserve and create jobs in municipal
areas existing in this state.
§11-6H-2. Definitions.
As used in this article, the term:
(1) "Certified revitalized property" means all real property
within a qualified local enterprise zone, certified by a
municipality, pursuant to a qualified municipal ordinance and
approved by the tax commissioner as eligible revitalized
property pursuant to section four of this article;
(2) "Employee" means any person holding less than a five
percent ownership interest in the taxpayer, working for a wage,
salary or commission at a site within a local enterprise zone;
(3) "Full-time" means being employed for a wage, salary or
commission for at least thirty-five hours a week. In addition
full-time includes any number of employees who together are
employed for a wage, salary or commission for a total of at least
thirty-five hours per week;
(4) "Municipality" means a municipality within the state
that imposes a business and occupation tax;
(5) "New facility" means a building or series of buildings
constructed with new construction materials which construction is
in compliance with all federal, state and local building codes
and local zoning regulations and requirements, and the plans for
which including the style and design of the facade and exterior
must be preapproved by the municipality and follow the general
design criteria to be established by the municipality;
(6) "Qualified local enterprise zone" means an area within
the boundaries of a municipality that has been designated as a
local enterprise zone by a qualified municipal ordinance;
(7) "Qualified municipal ordinance" means a municipal
ordinance that:
(A) Designates an area within the corporate limits of the
municipality as a local enterprise zone that satisfies the United
States department of housing and urban development's statutory
eligibility requirements for designation as an urban federal
empowerment zone;
(B) Provides for a credit from its business and occupation
tax for a taxpayer who:
(i) Has made substantial renovations to an existing
structure within the designated local enterprise zone or who
construct a new facility within the designated zone which structure houses the taxpayer's business or occupation which is
subject to the municipality's business and occupation tax;
(ii) Has one or more full-time employees at the facility
located within the subject zone; and
(iii) For each and every tax period for which the business
and occupation tax credit is applied for, has at least ten
percent of all of the taxpayer's employees who work at the
facility within the subject local enterprise zone that reside or
when employed did reside within the zone.
(8) "Real property" means all property specified in
subdivision (p), section ten, article two, chapter two of this
code and includes, but is not limited to, lands, buildings and
improvements on the land such as sewers, fences, roads, paving
and leasehold improvements.
(9) "Substantial renovation" means renovation, renewal,
rehabilitation of an existing structure or structures located
within a local enterprise zone, which renovation, renewal, and
rehabilitation is in compliance with all federal, state and local
building codes and local zoning regulations and requirements, and
which renovation includes facade and exterior renovations,
renewals and rehabilitations which are required to be
preapproved by the municipality and which follow the general
design criteria established by the municipality; and
(10) "Taxpayer" means a natural person, firm, limited liability company, partnership, corporation or other entity
liable for a municipal business and occupation tax.
§11-6H-3. Tax treatment of certified capital addition property.
Notwithstanding section seven, article one-c of this chapter
or any other provision of law, the appraised value of certified
revitalized property, for purposes of ad valorem property
taxation under this chapter, is:
(1) For the first five years that it is certified
revitalized property, its salvage value, which for purposes of
this article is one percent of the certified revitalized
property's value after it becomes certified revitalized property;
and
(2) For years six through ten that it is certified
revitalized property, its improved salvage value, which for
purposes of this article is fifty percent of the certified
revitalized property's value after it becomes certified
revitalized property.
§11-6H-4. Application and certification.
(a) Any person seeking designation of property as certified
revitalized property shall first make a sworn application to the
municipality on forms prescribed by the municipality. If the
municipality determines the property is certified revitalized
property under its ordinance and is eligible for credit against its business and occupation tax, it shall give the taxpayer a
certificate indicating its approval.
(b) The taxpayer shall then make a sworn application, that
includes the certificate, to the state tax commissioner on forms
prescribed by the tax commissioner. The state tax commissioner
shall within ninety days of the application determine in writing
whether the property qualifies for the tax treatment under the
provisions of section three of this article and shall provide a
copy of the written determination to the applicant and the
assessor in the county in which the property is located. Upon
receipt of a determination finding that certain property is
certified revitalized property, the assessor shall,
notwithstanding section seven, article one-c of this chapter or
any other provision of law, appraise the property in accordance
with section three of this article.
(c) The applicant may file an appeal with the state tax
commissioner to have a formal hearing for a review and
redetermination on property the state tax commissioner has found
not to meet the requirements of this article to be certified
revitalized property, within thirty days of the official written
notification from the state tax commissioner.
(d) After the state tax commissioner determines that
property qualifies as certified revitalized property, the
property is and remains certified revitalized property for purposes of this article until the earlier of:
(1) The disposition of the property to an unrelated third
party other than a transferee who continues to operate the
facility;
(2) The cessation of all business at the facility; or
(3) The tenth year succeeding the year in which the
certified revitalized property became certified.
(e) All applications and determinations under this section
are return information and are subject to section twenty-three,
article one-a of this chapter. The state tax commissioner shall
report annually the number of applications filed, certified,
denied and pending pursuant to this section for the preceding
year along with recommendations regarding the structure, benefits
and costs of the valuation method specified in this article to
the joint committee on government and finance and to the
governor. In no event may identifying characteristics and facts
about applicants be disclosed under this section.
§11-6H-5. Authority to propose rules.
The state tax commissioner shall propose rules for
legislative approval in accordance with the provisions of article
three, chapter twenty-nine of this code for the administration of
this article as may be necessary to implement the provisions of
this article. The state tax commissioner may promulgate emergency rules to implement the provisions of this article.
§11-6H-6. Effective date.
This article is effective for the tax years beginning on and
after the first day of July, one thousand nine hundred
ninety-nine.
NOTE: The purpose of this bill is to provide for reduced
property taxes on certain property within municipalities that is
revitalized.
This article is new; therefore, strike-throughs and
underscoring have been omitted.