Senate Bill No. 625
(By Senators Kessler (Mr. President), Boley, Edgell, Hall, Jenkins, Klempa, McCabe, Plymale, Yost, Browning and Foster)
[Introduced February 17, 2012; referred to the Committee on Economic Development; and then to the Committee on Finance.]
A BILL to amend and reenact §11-6F-2 of the Code of West Virginia, 1931, as amended, relating to designating certain property as qualified capital addition to a manufacturing facility; and reducing the disincentive for capital investment.
Be it enacted by the Legislature of West Virginia:
That §11-6F-2 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 6F. SPECIAL METHOD FOR APPRAISING QUALIFIED CAPITAL ADDITIONS TO MANUFACTURING FACILITIES.
As used in this article, the term:
(a) “Certified capital addition property” means all real property and personal property included within or to be included within a qualified capital addition to a manufacturing facility that has been certified by the State Tax Commissioner in accordance with section four of this article: Provided, That airplanes and motor vehicles licensed by the Division of Motor Vehicles shall in no event constitute certified capital addition property.
(b) “Manufacturing” means any business activity classified as having a sector identifier, consisting of the first two digits of the six-digit North American Industry Classification System code number of thirty-one, thirty-two or thirty-three or the six digit code number 211112.
(c) “Manufacturing facility” means any factory, mill, chemical plant, refinery, warehouse, building or complex of buildings, including land on which it is located, and all machinery, equipment, improvements and other real property and personal property located at or within the facility used in connection with the operation of the facility in a manufacturing business.
(d) “Personal property” means all property specified in subdivision (q), section ten, article two, chapter two of this code and includes, but is not limited to, furniture, fixtures, machinery and equipment, pollution control equipment, computers and related data processing equipment, spare parts and supplies.
(e) “Qualified capital addition to a manufacturing facility” means either:
(1) All real property and personal property, the combined original cost of all of the property which exceeds $50 $10 million to be constructed, located or installed at or within two miles of a manufacturing facility owned or operated by the person making the capital addition that has a total original cost before the capital addition of at least $100 $20 million. If the capital addition is made in a steel, chemical or polymer alliance zone as designated from time-to-time by executive order of the Governor, then the person making the capital addition may for purposes of satisfying the requirements of this subsection join in a multiparty project with a person owning or operating a manufacturing facility that has a total original cost before the capital addition of at least $100 $20 million if the capital addition creates additional production capacity of existing or related products or feedstock or derivative products respecting the manufacturing facility, consists of a facility used to store, handle, process or produce raw materials for the manufacturing facility, consists of a facility used to store, handle or process natural gas to produce fuel for the generation of steam or electricity for the manufacturing facility or consists of a facility that generates steam or electricity for the manufacturing facility, including but not limited to a facility that converts coal to a gas or liquid for the manufacturing facility’s use in heating, manufacturing or generation of electricity, Beginning on and after July 1, 2011, when the new capital addition is a facility that is or will be classified under the North American Industry Classification System with a six digit code number 211112, or is a manufacturing facility that uses product produced at a facility with code number 211112; then wherever the term “100 million” is used in this subsection, the term “20 million” shall be substituted and where the term “50 million” is used, the term “10 million” shall be substituted. or
(2)(A) All real property and personal property, the combined original cost of which exceeds $2 billion to be constructed, located or installed at a facility, or a combination of facilities by a single entity or combination of entities engaged in a unitary business, that:
(i) Is or will be classified under the North American Industry Classification System with a six digit code number 211112; or
(ii) Is a manufacturing facility that uses one or more products produced at a facility with code number 211112; or
(iii) Is a manufacturing facility that uses one or more products produced at a facility described in subparagraph (ii) of this subdivision.
(B) No preexisting investment made, or in place before the capital addition shall be required for property specified in paragraph (A) of this subdivision. The requirements set forth in subdivision (1) of this subsection do not apply to property specified in this subdivision relating to:
(i) Location or installation of investment at or within two miles of a manufacturing facility owned or operated by the person making the capital addition;
(ii) Total original cost of preexisting investment before the capital addition of at least $100 million or $20 million; or
(iii) Multiparty projects.
(f) “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: Provided, That for capital additions certified on or after July 1, 2011, the value of the land before any improvements shall be subtracted from the value of the capital addition and the unimproved land value shall not be given salvage value treatment.
NOTE: The purpose of this bill is to reduce the disincentive for new capital investment by reducing the original cost requirement for a capital improvement to $20 million and to reduce the amount of required new investment to $10 million.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.