H. B. 2120
(By Delegate Stemple)
[Introduced February 9, 2005; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend of the code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §11-6H-1, §11-6H-2,
§11-6H-3, §11-6H-4 and §11-6H-5, all relating to providing a
special method for appraising certain charitable property that
is leased for profit; requiring certification by the Tax
Commissioner; and providing an appeal process.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §11-6H-1, §11-6H-2,
§11-6H-3, §11-6H-4 and §11-6H-5, all to read as follows:
ARTICLE 6H. METHOD FOR APPRAISING QUALIFIED CHARITABLE RENTAL
As used in this article, the term:
(1) "Market rental value" is the annual rental payment, determined by the State Tax Commissioner, at or for which a
particular parcel or species of property would rent if it were
leased to a willing lessee by a willing lessor in an arms-length
transaction without either the lessee or the lessor being under any
compulsion to rent or lease. In determining value, primary
consideration shall be given to the trends of annual rental
payments paid for like or similar property in the area or locality
where the property is located. For purposes of this article the
annual rent paid on the property pursuant to an arms-length lease
is presumed to be its market rental value; and
(2) "Qualified charitable rental property" means that portion
of real property owned by a charitable organization that would
otherwise be exempt from ad valorem tax on the property under the
provisions of subdivision (12), subsection (a), section nine,
article three of this chapter, but for the fact that it is held or
is leased out for profit.
§11-6H-2. Tax treatment of certified qualified charitable rental
Notwithstanding any other provisions of law, the value of
certified qualified charitable rental property, for purposes of ad
valorem property taxation under this chapter, is its market rental
§11-6H-3. Application and certification.
(a) Any person seeking designation of property as certified qualified charitable rental property and a determination of its
market rental value, shall first make a sworn application to the
State Tax Commissioner on forms prescribed by the State Tax
Commissioner on or before a date designated by the Commissioner.
The Commissioner shall within ninety days of the application
determine in writing whether the property is or will be qualified
charitable rental property and determine its market rental value.
The Commissioner shall provide a copy of the written determination
to the applicant and the assessor or assessors in the county or
counties in which the charitable rental property is located. The
applicant may file an appeal with the Commissioner to have a formal
hearing for a review and redetermination of a decision of the
Commissioner concerning whether property is qualified charitable
rental property or its market rental value, within thirty days of
the official written notification from the Commissioner. After the
Commissioner determines the property is or will be qualified
charitable rental property, the property is and remains certified
qualified charitable rental property for purposes of this article
until the earlier of:
(1) The transfer of the property to a third party; or
(2) The property becomes exempt from ad valorem taxation.
(b) All applications and determinations under this section
constitute return information and are subject to section
twenty-three, article one-a of this chapter.
§11-6H-4. Authority to propose rules.
The State Tax Commissioner shall propose rules for
promulgation in accordance with article three, chapter
twenty-nine-a of this code for the administration of this article
that are necessary to implement the provisions of this article,
except that the Commissioner may promulgate the initial rules as
emergency rules in order to facilitate the implementation of the
provisions of this article.
§11-6H-5. Effective date.
This article is effective for the tax years beginning on and
after the first day of July, two thousand five.
NOTE: The purpose of this bill is to provide a method for
appraising certain charitable property that is leased for profit,
based on its rental payments received.
This article is new; therefore, strike-throughs and
underscoring have been omitted.